(WASHINGTON) — Department of Homeland Security (DHS) Secretary Kristi Noem on Friday announced the partial termination of Eastern Shipbuilding Group’s offshore patrol cutter (OPC) contract, cutting two vessels from the shipyard due to construction delays and cost concerns.
“This administration is unwavering in its commitment to the American taxpayer and to a strong, ready Coast Guard,” said a senior DHS official. “We cannot allow critical shipbuilding projects to languish over budget and behind schedule. Our Coast Guard needs modern, capable vessels to safeguard our national and economic security, and we will ensure every dollar is spent wisely to achieve that mission. This action redirects resources to where they are most needed, ensuring the Coast Guard remains the finest, most-capable maritime service in the world.”
As part of that commitment, the Coast Guard is reviewing contracts that are failing to meet delivery agreements. Eastern has been slow to deliver four OPCs, according to DHS, “harming the U.S.’s defense capabilities and wasting American’s hard-earned money.” In light of that, Noem partially canceled Eastern’s contract for two out of four OPCs expected from the shipyard in Panama City, Fla.
Easter’s delivery of OPC 1 was initially due in June 2023, but the vessel will now be completed by the end of 2026 at the earliest. Eastern missed its April 2024 delivery for OPC 2, DHS said. The Coast Guard stopped work on OPCs 3 and 4 after Eastern notified the service earlier this year it could not fulfill its contractual duty to deliver all four OPCs without unabsorbable loss, DHS said.
The Coast Guard’s goal is to procure 25 OPCs and that has not changed, according to DHS. “The Coast Guard remains intent on acquiring and delivering the full OPC class as fast as possible to address the nation’s security and safety needs,” according to DHS.
Eastern was awarded the contract to design and construct the four OPCs in 2016 as part of a nine-vessel procurement. The contract was modified after Hurricane Michael damaged Eastern’s Panama City yard in 2018, and the program was split into two stages. In 2022, Austal USA was awarded the contract for the first OPC in stage 2, with options for additional vessels.
The OPC fleet will complement the capabilities of the service’s national security cutters, fast response cutters and polar security cutters.
