5 mars 2024 | International, Sécurité
6 décembre 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.
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5 septembre 2023 | International, Terrestre
Elbit Systems Awarded Two Contracts in an Aggregate Amount of $200 Million to Supply Artillery C4I Solution and Hostile Fire Counter Attack Solution to a European Country
The contracts will be executed until 2026, with options for further extensions.
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29 octobre 2019 | International, Aérospatial
Pentagon and Lockheed Martin reach agreement reducing F-35A cost by 12.8 per cent
The F-35 Joint Program Office and Lockheed Martin finalized a US$34 billion agreement for the production and delivery of 478 F-35s at the lowest aircraft price during the history of the program. This contract includes all U.S., international partners and foreign military sales aircraft in Lots 12, 13 and 14. In the agreement, the F-35 Enterprise meets and exceeds its long-stated cost reduction targets for each variant – and the F-35A unit price, including aircraft and engine, is now below US$80 million in both Lot 13 and Lot 14, the F-35A unit cost represents an estimated overall 12.8 per cent reduction from Lot 11 costs for the conventional landing variant, and an average of 12.7 per cent savings across all three variants from Lot 11 to 14. “Driving down cost is critical to the success of this program. I am excited that the F-35 Joint Program Office and Lockheed Martin have agreed on this landmark three-lot deal. This agreement achieves an average 12.7 per cent cost reduction across all three variants and gets us below US$80 Million for a USAF F-35A by Lot 13 — one lot earlier than planned,” said Air Force LGen Eric Fick, F-35 program executive officer. “This US$34 billion agreement is a truly historic milestone for the F-35 Enterprise.” The agreement includes 291 aircraft for the U.S. Services, 127 for F-35 international partners, and 60 for F-35 foreign military sales customers. Price details include: F-35A — Lot 12: US$82.4M; Lot 13: US$79.2M; Lot 14: US$77.9M; % reduction from Lot 11: 12.8 per cent F-35B — Lot 12: US$108M; Lot 13: US$104.8M; Lot 14: US$101.3M; % reduction from Lot 11: 12.3 per cent F-35C — Lot 12: US$103.1M; Lot 13: US$98.1M; Lot 14: US$94.4M; % reduction from Lot 11: 13.2 per cent “With smart acquisition strategies, strong government-industry partnership and a relentless focus on quality and cost reduction, the F-35 Enterprise has successfully reduced procurement costs of the fifth generation F-35 to equal or less than fourth generation legacy aircraft,” said Greg Ulmer, Lockheed Martin, F-35 program vice-president and general manager. “With the F-35A unit cost now below US$80 million in Lot 13, we were able to exceed our long-standing cost reduction commitment one year earlier than planned.” The sub US$80 million unit recurring flyaway cost for an F-35 represents an integrated acquisition price for the fifth generation weapon system. With embedded sensors and targeting pods, this F-35 unit price includes items that add additional procurement and sustainment costs to legacy fourth generation aircraft. Program Progress With more than 450 aircraft operating from 19 bases around the globe, the F-35 is playing a critical role in today's global security environment. More than 910 pilots and 8,350 maintainers have been trained, and the F-35 fleet has surpassed more than 220,000 cumulative flight hours. Eight nations have F-35s operating from a base on their home soil and seven services have declared initial operating capability. In addition to strengthening global security and partnerships, the F-35 provides economic stability to the U.S. and international partners by creating jobs, commerce and security, and contributing to the global trade balance. The F-35 is built by thousands of men and women in America and around the world. With more than 1,400 suppliers in 46 states and Puerto Rico, the F-35 Program supports more than 220,000 direct and indirect jobs in the U.S. alone. The program also includes more than 100 international suppliers, creating or sustaining thousands of jobs. https://www.skiesmag.com/press-releases/pentagon-and-lockheed-martin-reach-agreement-reducing-f-35a-cost-by-12-8-per-cent