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December 6, 2019 | International, Naval

Coast Guard to Re-Compete Multi-Billion Dollar Offshore Patrol Cutter Contract

By: Ben Werner

This post was updated to accurately reflect the size of the Offshore Patrol Cutter contract the Coast Guard is re-competing. An earlier version of this post included an incorrect number of hulls included in the re-compete.

The Coast Guard is recompeting its potentially $10.5 billion Offshore Patrol Cutter contract because the program risks falling fatally behind schedule due to hurricane damage to the shipyard initially awarded the contract.

The program has already slipped nearly a year behind schedule and could cost an additional $659 million to finish just the first four OPCs contracted to Eastern Shipbuilding Group as part of a nine-hull deal awarded in 2016, according to a recent Congressional Research Service report. To reign-in costs and try getting the program back on schedule, the Coast Guard is now taking the extraordinary measure of recompeting the entire contract for OPC hulls five through 25.

The 25-hull OPC fleet is intended to replace the Coast Guard's current fleet of 29 medium-endurance cutters, some of which were built during the Vietnam War. The Coast Guard previously set a target cost of $310 million per cutter. The service is asking potential bidders to provide analysis comparing their anticipated costs with this target for building the six OPCs

Friday is the deadline for contractors to provide comments on an OPC industry studies statement of work. The study, along with an industry day scheduled for next Wednesday, is intended to give the Coast Guard an assessment of the technical effort, cost risks and schedule risks associated with recompeting the OPC contract.

“These activities will provide fresh insight into the current state of the shipbuilding industrial base and inform the Coast Guard's way forward on a re-compete strategy to complete the OPC program of record,” Brian Olexy, the communication manager for the Coast Guard Acquisition Directorate, told USNI News in an email.

The Coast Guard intends to purchase up to 25 OPCs making this the service's largest acquisition program. However, the current prime contractor, Panama City, Fla.-based Eastern Shipbuilding Group, is having a hard time fulfilling the contract due to damage caused in 2018 by Hurricane Michael.

Eastern Shipbuilding officials could not be reached for comment at the time of this post.

In September 2016, the Coast Guard awarded Eastern Shipbuilding Group a contract to build the future USCGC Argus (WMSM-915) with options to build up to nine OPCs. Eastern beat General Dynamics Bath Iron Works and Bollinger Shipyards to land the design and construction contract.

The average purchase cost for OPCs is about $421 million per ship, according to the CRS report. The first OPC, Argus, was funded in Fiscal Year 2018. The second OPC, the future USCGC Chase (WMSM-916) and long-lead-time materials for the third OPC were funded in the FY 2019.

Eastern Shipbuilding was just about to start building Argus and was gathering materials to start building Chase when Hurricane Michael hit the Florida panhandle, USNI News reported in October 2018.

Workers evacuated from the area and were slow to return. When they did, many took jobs rebuilding nearby Tyndall Air Force Base, which also suffered substantial damage from the hurricane, according to a statement released by Sen. Marco Rubio (R.-Fla.). Rubio supported a plan to modify Eastern Shipbuilding's contract with the Coast Guard.

In October, the Coast Guard asked Congress for extraordinary relief from the contract, on behalf of Eastern Shipbuilding. The Coast Guard plan would allow Eastern Shipbuilding to continue building the first four OPCs but would move forward with seeking new bidders to build out the fleet, Adm. Karl Schultz, the commandant of the Coast Guard, said during an event co-hosted by the Center for Strategic and International Studies and the U.S. Naval Institute.

Lawmakers, though, did not sound too receptive to the plan. Congressional leaders detailed their concerns in a bipartisan letter to the Coast Guard sent Nov. 25, from Rep. Peter DeFazio (D-Ore.); the chair of the House Committee on Transportation and Infrastructure; ranking member Rep. Sam Graves (R-Mo.), Rep. Sean Patrick Maloney (D-N.Y.), chair of subcommittee on Coast Guard and Maritime Transportation; and ranking member Rep. Bob Gibbs, (R-Ohio).

“We are skeptical that such truly extraordinary relief is justified given that this ‘crisis' was foreseeable and mostly avoidable. Further, we are concerned that this relief sets a damaging precedent that any current or future contract with the United States Coast Guard (Coast Guard or Service) could be renegotiated outside the Federal Acquisition Regulations,” their letter states.

The lawmakers are concerned the Coast Guard and Department of Homeland Security focused on “exploring options to resuscitate [Eastern Shipbuilding Group] and prevent it from defaulting on the OPC contract without first completing a transparent and objective alternative analysis.”

The chief lobbyist for Eastern Shipbuilding is former commandant of the Coast Guard, retired Adm. Robert Papp, who joined the company shortly after being awarded the initial OPC contract. Papp is the first Washington lobbyist hired by Eastern Shipbuilding, according to a company statement.

“The veil of secrecy regarding its analysis and the absence of any meaningful consultation by the Coast Guard and DHS with the Committee, provides us scant confidence that any revised OPC contract will not encounter a similar fate as the original contract,” the congressional letter states.

https://news.usni.org/2019/12/05/coast-guard-to-re-compete-multi-billion-dollar-offshore-patrol-cutter-contract

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  • Contract Awards by US Department of Defense - February 18, 2020

    February 19, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - February 18, 2020

    NAVY East Coast Repair & Fabrication LLC,* Norfolk, Virginia (N00024-20-D-4411; Lot 1) (N00024-20-D-4413; Lot 2); and Colonna's Shipyard Inc.,* Norfolk, Virginia (N00024-20-D-4412; Lot 1) (N00024-20-D-4414; Lot 2), are awarded firm-fixed-price, indefinite-delivery/indefinite-quantity (IDIQ) contracts for ship repair, maintenance and modernization of non-nuclear surface ships assigned to or visiting Norfolk, Virginia, via the rolling admissions solicitation process. Awards reflecting the final option period under Lot 1 have a maximum ceiling value of $250,000,000; awards reflecting the final option period under Lot 2 have a maximum ceiling value of $100,000,000. At the time of the IDIQ awards, each awardee under both Lot 1 and Lot 2 will receive the $10,000 minimum guarantee via delivery order. These multiple award IDIQ contracts are for repair, maintenance and modernization of non-nuclear Navy surface ships undergoing Chief of Naval Operations-scheduled maintenance availabilities in Norfolk, Virginia. These availabilities can be docking or non-docking availabilities and will be procured via competitive delivery order solicitations amongst the IDIQ contract holder. Each awardee of a delivery order for an availability will provide the facilities and human resources capable of completing, coordinating and integrating multiple areas of ship maintenance, repair and modernization. Work will be performed in Norfolk, Virginia, and is expected to be completed by February 2021. Fiscal 2020 operations and maintenance (Navy) funding in the amount of $10,000 per delivery order (four delivery orders total; $40,000 total) will be obligated at time of each IDIQ award and will expire at the end of the current fiscal year. These contracts were competitively procured via the Federal Business Opportunities website, with two offers received in response to solicitation N00024-19-R-4412. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. Rolls-Royce Corp., Indianapolis, Indiana, is awarded a $62,400,402 modification (P00016) to a previously awarded firm-fixed-price contract (N00019-17-C-0081). This modification exercises an option to procure 29 AE1107C engines for Navy V-22 aircraft. Work will be performed in Indianapolis, Indiana, and is expected to be completed December 2021. Fiscal 2019 aircraft procurement (Navy) funds in the amount of $21,517,380; and fiscal 2020 aircraft procurement (Navy) funds in the amount of $40,883,022 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. General Atomics, San Diego, California, is awarded a $25,200,747 cost-plus-fixed-fee delivery order (N00019-20-F-0521) against a previously issued basic ordering agreement (N00019-16-G-0006). This delivery order procures Electromagnetic Aircraft Launch System (EMALS) Depot Planning Phase II efforts, including depot level logistics support analysis, engineering support for logistics, supportability analysis, maintenance planning, reliability maintenance, technical manual development and engineering support as it directly correlates to depot planning for the USS Gerald Ford (CVN 78) and USS John F. Kennedy (CVN 79). Additional efforts include those required to complete the Depot Planning EMALS logistics products necessary in support of an in-service EMALS. Work will be performed in San Diego, California (99.9%); and Tupelo, Mississippi (0.1%), and is expected to be completed February 2022. Fiscal 2020 research, development, test and evaluation (Navy) funds in the amount of $4,787,000 will be obligated at time of award, none of which will expire at the end of the fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. Boston Ship Repair LLC, Boston, Massachusetts, is awarded a $14,358,866 firm-fixed-price contract (N32205-20-C-4006) for a 90-calendar day shipyard availability for the overhaul dry-docking availability of USNS John Lenthall (T-AO 189). The $14,358,866 consists of the amounts listed in the following areas: category "A" work item cost, additional government requirement, other direct costs and the general and administrative costs. Work will include furnish general services, hull steel replacement, tank painting, stability testing, degaussing conduit removal from tanks and inserting bulkheads, diesel engine repair, structural steel gauging surveys, flight deck non-skid, flight deck safety net inspection and weight testing, steel replacement and underway replenishment systems repairs. The contract includes options, which, if exercised, would bring the total contract value to $16,867,699. Funds will be obligated Feb. 18, 2020. Work will be performed in Philadelphia, Pennsylvania, and is expected to begin on March 9, 2020, and is expected to be completed by June 6, 2020. Fiscal 2020 Navy working capital funds in the amount of $14,358,866 excluding options, are obligated at the time of the award and will expire at the end of the current fiscal year. This contract was competitively procured, with proposals solicited via the Federal Business Opportunities website and two offers were received. The Navy Military Sealift Command, Norfolk, Virginia, is the contracting activity. General Atomics, Electromagnetics Systems Group, San Diego, California, is awarded a $10,364,470 modification (P00047) to a previously awarded firm-fixed-price contract (N00019-14-C-0037). This modification procures hardware and installation support services for the System Functional Demonstrator and Shipset Control Lab sites for the Electromagnetic Aircraft Launch System. Work will be performed in San Diego, California (95%); and Tupelo, Mississippi (5%), and is expected to be completed December 2021. Fiscal 2018 shipbuilding and conversion (Navy) funds in the amount of $10,364,470 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. DEFENSE LOGISTICS AGENCY Coastal Pacific Food Distributors Inc., Stockton, California, has been awarded a maximum $246,750,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for full-line food distribution. This was a competitive acquisition with two responses received. This is a five-year contract with no option periods. Locations of performance are California and Washington state, with a Feb. 15, 2025, performance completion date. Using military service is Navy. Type of appropriation is fiscal 2020 through 2025 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-20-D-3259). Sysco Seattle Inc., Kent, Washington, has been awarded a maximum $176,250,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for full-line food distribution. This was a competitive acquisition with two responses received. This is a five-year contract with no option periods. Location of performance is Washington state, with a Feb. 15, 2025, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriation is fiscal 2020 through 2025 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-20-D-3260). Science Applications International Corp., Fairfield, New Jersey, has been awarded a maximum $90,000,000 firm-fixed-price contract for facilities maintenance, repair and operations items. This was a sole-source acquisition using justification 10 U.S. Code 2304(c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is an 18-month bridge contract with no option periods. Location of performance is the Southwest Region Zone 2 of the U.S., with an Aug. 18, 2021, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriation is fiscal 2020 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8E3-20-D-0007). SupplyCore Inc.,* Rockford, Illinois, has been awarded a maximum $90,000,000 firm-fixed-price contract for facilities maintenance, repair and operations items. This was a sole-source acquisition using justification 10 U.S. Code 2304(c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is an 18-month bridge contract with no option periods. Location of performance is the Southwest Region Zone 1 of the U.S., with an Aug. 18, 2021, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriate is fiscal 2020 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8E3-20-D-0006). ARMY 313 Industries Inc.,* Warren, Michigan (W56HZV-20-D-L001); Mettle Craft Manufacturing LLC,* Sterling Heights, Michigan (W56HZV-20-D-L002); Milton Manufacturing Inc.,* Detroit, Michigan (W56HZV-20-D-L003); and Rose-A-Lee Technologies Inc.,* Sterling Heights, Michigan (W56HZV-20-D-L004), will compete for each order of the $19,000,000 firm-fixed-price contract to provide surge support for build-to-print component requirements through fabrication and manufacturing for the Combat Capabilities Development Command Ground Vehicle System Center. Bids were solicited via the internet with four received. Work locations and funding will be determined with each order, with an estimated completion date of Feb. 15, 2025. U.S. Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity. Canco LLC,* Canton, Ohio, was awarded a $10,050,000 firm-fixed-price contract to replace an existing fire station. Bids were solicited via the internet with seven received. Work will be performed in Mansfield, Ohio, with an estimated completion date of Dec. 31, 2021. Fiscal 2019 -Air National Guard military construction funds in the amount of $10,050,000 were obligated at the time of the award. The United States Property and Fiscal Office, Columbus, Ohio, is the contracting activity (W50S8R-20-C-0003). U.S. TRANSPORTATION COMMAND Vane Line Bunkering Inc., Baltimore, Maryland, has been awarded contract modification P00040 on contract HTC711-13-C-W015 in the amount of $11,516,430. This modification provides continued transportation of bulk jet fuel and marine diesel fuel by barge for the Defense Logistics Agency-Energy in the Atlantic Region. Work will be performed in ports and points along the inland waterways and East Coast locations in the Atlantic Region. Period of performance is March 1, 2020, to Aug. 31, 2020. Fiscal 2020 defense working capital funds were obligated at award. This modification brings the total cumulative face value of the contract to $178,740,305 from $167,223,875. U.S. Transportation Command, Directorate of Acquisition, Scott Air Force Base, Illinois, is the contracting activity. DEFENSE ADVANCED RESEARCH PROJECTS AGENCY Two Six Labs LLC,* Arlington, Virginia, has been awarded a $7,970,711 modification (P00008) to previously awarded contract HR0011-18-C-0134 for additional in-scope work under a Defense Advanced Research Projects Agency research project. Work will be performed in Arlington, Virginia, with an expected completion date of September 2022. Fiscal 2020 research, development, test and evaluation funding in the amount of $850,108 is being obligated at time of award. The Defense Advanced Research Projects Agency, Arlington, Virginia, is the contracting activity. *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2086591/source/GovDelivery/

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    March 30, 2021 | International, Aerospace, Naval

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  • Japan suspends Aegis Ashore deployment, pointing to cost and technical issues

    June 16, 2020 | International, Land

    Japan suspends Aegis Ashore deployment, pointing to cost and technical issues

    By: Mike Yeo MELBOURNE, Australia — Japan has abruptly suspended the planned deployment of the Aegis Ashore ballistic missile defense system, which will drastically alter the U.S. ally's plans for defending itself against such threats. Defense Minister Taro Kono cited cost and technical issues as the reasons for the suspension of Japan's plans to deploy two Aegis Ashore systems at Japan Ground Self-Defense Force, or JGSDF bases at Akita Prefecture in the north of Japan's main island of Honshu and at Yamaguchi Prefecture in the south. He explained during today's announcement that that the main technical issue was the need to ensure that the rocket boosters of the interceptor missiles, which are used to accelerate the missile to supersonic speeds following their launch, will fall on its designated areas following separation from the missile. Attempts to modify the software on the SM-3 Block IIA missiles to ensure correct booster separation so as to not put civilian lives and infrastructure at risk have not been successful so far, with modifications to the missile hardware likely to be needed, the minister said. Kono added that Japan has already spent the equivalent of $1.02 billion on the development of the SM-3 Block IIA so far, which is being developed jointly by Japan and the United States. The missiles can also be fired from the Aegis equipped ships of both countries to intercept short- and intermediate-range ballistic missiles. Japan's Aegis Ashore deployment plans have been controversial, with the defense ministry facing strong opposition from local governments and residents at both sites, citing concerns about the radiation from the system's Lockheed Martin Long Range Discrimination Radar. The news of the suspension comes a little over a month after local media reported that the ministry will cancel the planned Aegis Ashore deployment at Akita and choose another site. However, this was swiftly denied by Japan Chief Cabinet Secretary Yoshihide Suga, who said at the time no decision had been made. In announcing the suspension of the Aegis Ashore deployment, defense minister Kono said that Japan will continue to rely on its Aegis-equipped destroyers to provide ballistic missile defense against North Korea's missiles in the meantime. Japan operates seven such destroyers and is building another, although the Aegis Ashore radars are more advanced than that used on the ships. The land-based systems also reduce the demands placed on the ships and their crews by the missile defense mission. The latest developments come as Japan announces completion of the deployment of an upgraded Patriot Missile Segment Enhancement, or MSE, interceptors at four different locations throughout the country earlier this month. The announcement was made during a media briefing by Gen. Yoshinari Marumo, chief of the Air Staff of the Japan Air Self-Defense Force, or JASDF, last Friday. The missile batteries, which can be used against aircraft or short-range ballistic missiles, are located at JASDF bases at Narashino, Hamamatsu, Ashiya, and Tsuiki. https://www.defensenews.com/global/asia-pacific/2020/06/15/japan-suspends-aegis-ashore-deployment-pointing-to-cost-and-technical-issues/

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