New Coast Guard Cutter Sparks Fierce Competition Among Shipbuilders

It is one of the most highly anticipated military shipbuilding programs in the foreseeable future, and it has nothing to do with the Navy.

The Coast Guard wants to acquire 25 Offshore Patrol Cutters and spend some $8 billion doing so.

Despite hand-wringing about the decline of the U.S. shipbuilding industrial base, no less than eight contenders answered the service’s request for proposals that was released last year.

Three contractors will be chosen for an engineering and development phase this fall, with one eventually being tapped to begin production at a two-per-year pace, as early as 2016.
That is if the current budget crisis doesn’t throw the process into disarray.

“’It’s not looking good for any of the [Coast Guard acquisition] programs, particularly when you have pretty serious budget cuts,” said Brian Slattery, a research assistant for defense studies at the Heritage Foundation.

The eight shipbuilders are: Bollinger Shipyards, Lockport, La.; Eastern Shipbuilding, Panama City, Fla.; General Dynamics Bath Iron Works, Bath, Maine; General Dynamics Nassco, San Diego; Huntington Ingalls Industries, Pascagoula, Miss.; Marinette Marine, Marinette, Wis.; Vigor Shipyards, Seattle and VT Halter Marine, Pascagoula, Miss.

As the Coast Guard was in the process of writing its request for proposals in 2011, acquisition officials stated that the ship would be designed for affordability and that it would meet “minimum” requirements. Expensive items such as the ability to launch small boats from the stern — featured on the new National Security Cutters  — would not make it onto the boat. Nor would costly gas turbine engines.

Coast Guard Commandant Adm. Robert Papp Jr. said at the Naval Surface Association conference in January that the Offshore Patrol Cutter will be the service’s “workhorse” for the next 40 years. He has stated many times in public that the ship is the Coast Guard’s most important project.

“We’ve put an awful lot of effort into it,” he said of the program.

“There seems to be significant interest out there to build 25 ships, and we’re very pleased about that. I think people are thinking out of the box. They’re looking at new designs. We need to think out of the box as well as we go forward, because as I said, this ship is going to be very, very important to us.”

Slattery said the Coast Guard desperately needs the program to get under way. The 210- and 270-foot cutters the OPC is intended to replace are already operating beyond their expected service lives “and they’re pushing them pretty hard. The Coast Guard’s missions are not decreasing,” he said.

They are envisioned for missions far offshore in waters such as the Caribbean where they can interdict drug smugglers. 

The Coast Guard is under the same budget pressures as similar Defense Department components, which must currently spend the funding they have on hand on operations. “I imagine the Coast Guard will have to do the same thing. Because the OPC is a new program in development, often what happens is that these get cut to fund everyday operations,” Slattery said.

If the program proceeds as planned, the competition will be intense.

All eight candidates were contacted to talk about their designs and what some of the “out-of-the-box” proposals Papp referred to might be. Only four repsponded. GD Nassco declined. A spokesman there said the company didn’t want to tip competitors off to its plans.

Matt Von Ruden, OPC program manager at Vigor, said he believed that his yard’s design was one of the innovative concepts Papp mentioned.

It incorporates the Ulstein X-bow hull, which was developed by the Ulstein Group in Norway. The design eliminates the slamming of waves on the bow and reduces vibration levels, which makes for smoother motions and increased fuel efficiency, Ulstein Group literature said. It is in use in 43 vessels around the world, with 22 more on order.

“This popularity reflects the patented design’s proven performance. The unique design improves sea-keeping abilities — allowing for higher sustained speeds and better operability than traditional designs — at an affordable price,” Von Ruden said in an email response to questions.

Vigor is best known for building ferries for the state of Washington. Along with incorporating the Ulstein-designed bow, it is partnering with DRS Power and Control Technologies, as the propulsion system integrator, and L3 Communications, as the command, control, computers and sensor integrator. Both have deep experience with the Coast Guard and Navy, he added.  

“We were able to get an early start and mature our design well past the concept level, properly balancing capability with affordability,” he said. 

Vigor would assemble the vessels at its Portland, Ore., shipyard, with components built at other facilities in Washington and Alaska. Construction of the Vigor OPC would provide up to 600 direct jobs beginning in 2016 and rise to over 1,000 jobs during full rate of production at two ships a year, he said. 

“The impact throughout the Pacific Northwest and Alaska would be many times greater as we draw upon small businesses to build our supply chain. Should Vigor win this contract, it will be truly transformational for the region’s maritime industry,” Von Ruden said.

“The Coast Guard requirements are certainly challenging, particularly considering the affordability requirement,” he added.

Bollinger Shipyards’ Executive Vice President Chris Bollinger, also not wanting to tip off his competitors, declined to speak about the company’s specific ideas.

“Obviously, we are in a fierce competition. But I feel good about where we are,” he said.

“The Coast Guard continues to be about affordability. We have learned that. We appreciate it, and they mean that, and we want to continue to do that in today’s environment,” he said.

“The key is to give the Coast Guard everything it wants and make it within its budget, and that is not always easy on both sides,” he said.

Bollinger is currently building the Coast Guard’s new 154-foot Fast Response Cutters.

The company recently came out from under a cloud when a federal judge dismissed False Claim Act charges brought against it by the Department of Justice. The case dated back to a failed attempt in 2005 to extend the Coast Guard’s fleet of patrol boats from 110 to 123 feet. Government prosecutors claimed Bollinger misrepresented the hull strength. Eight of the boats were later deemed not sea worthy, resulting in a $78 million loss for the Coast Guard.

The federal judge who dismissed the case said there was no evidence that the company had supplied false data on the hull strength to the Coast Guard.

As that controversy unfolded, the Coast Guard awarded in 2008 the Fast Response Cutter program to Bollinger.

“The Coast Guard has looked at us, and we’re building FRCs right now,” Bollinger said, declining to go into more specifics on the case.

Bollinger said everything he has seen in the RFP indicated that the Coast Guard wants a design that stresses affordability.

“An escalation of costs would be devastating,” Bollinger said.

Marinette Marine Corp., a subsidiary of the Italian shipbuilder, Fincantieri, also has worked with the Coast Guard. It built the Great Lakes Ice Breaker for the service and is the lead integrator of the ongoing 40-foot fast response boat-medium program. It is also building the Littoral Combat Ship for the Navy.

The Offshore Patrol Cutter, which will be of a similar size to the 377-foot LCS, is in the company’s “sweet spot,” said Terry Etnyre, vice president of marketing and strategy.

He was also reluctant to share what the company’s plans were. He doubted there will be any “off-the-shelf” candidates.

Other than a basic hull, the RFP indicated that this will be a new design, he said.

“There is no platform that exists today that can satisfy the OPC requirement without some modifications and redesign,” he said. “We’ll be drawing on the ideas and resources of our parent in Genoa as well as our own,” he said.

The only out-of-the-box concept he knows is Vigor’s. “That is a very unconventional hull design to be used by the Coast Guard or Navy,” he said.

Huntington Ingalls, which is currently building the Coast Guard’s largest ships, the 418-foot National Security Cutters, intends to use the experience gained on that program, spokesman Bill Glenn said in an email.

“Ingalls will leverage the commonality based on the already-proven National Security Cutter program and maximize the common equipment and processes it will take to design and build the OPC,” he said.

VT Halter did not respond to an interview request, but in the past has stated that it planned to team with French shipbuilder DCNS, which builds frigates for the French navy. The company is proposing an off-the-shelf DCNS design, according to an article in Defense News.

Etnyre said, “The RFP as written has an affordability target that everybody has to shoot for. That’s always the challenge.” The eight candidates will have had to prove in their proposals that they can reach the cost targets to make it to the next phase, he added.

“There is nothing else out there on the horizon, so that’s why there is so much interest in this. And other [shipbuilding] programs are winding down as well,” he said.

Bollinger said: “There are so many companies interested because there are so few projects going on, and so everybody is hungry.

“The positive side for the taxpayers is that they are going to get a very affordable ship, which is what the Coast Guard is looking for.”

Photo Credit: Vigor

Topics: Manufacturing, Shipbuilding