The U.S. Court of Federal Claims has directed Eastern Shipbuilding Group (ESG) and the U.S. government to make their final written arguments by next February over the shipbuilder’s protest of the Coast Guard’s $3.3 billion contract to Austal USA in June for the second stage of the offshore patrol cutter (OPC).
Once the government and contractor make their final cases on paper, the court will schedule an oral argument, Elaine Kaplan, the chief judge assigned to rule on ESG’s protest, said in an order issued on Oct. 26. ESG filed its protest with the court on Oct. 21 and this week the court released redacted version of the company’s filing.
The final motions are due on Feb. 10, 2023.
Florida-based Eastern Shipbuilding in July first protested its loss for the OPC Stage II award to the Government Accountability Office, but withdrew that protest in October after the Coast Guard declined to share its source selection rationale with the company. ESG instead decided to pursue the case in court.
Essentially, ESG is making a similar complaint to the federal court, that the Coast Guard in its trade-off analysis ignored the non-price factors, which were ranked higher in importance, and instead awarded the contract based on Austal’s lower bid, which was considered the least important aspect of the proposals.
“The Austal award cannot be reconciled with the RFP and stated USCG objectives,” ESG charges in its bid protest to the court. “ESG was higher rated and provided lower risk with strong, relevant past performance. Austal’s purported lower price is overwhelmed by the substantial risks associated with an award to Austal, a new entrant in the steel shipbuilding industry with a record of well publicized cost overruns and performance issues. The USCG’s flawed evaluation risks depriving the United States of a significant shipbuilding capability (ESG, judged superior and lower risk) in the United States’ Defense Industrial Base at a time of rising near-peer capabilities by hostile nations.”
Austal USA, which is based in Alabama and is part of Australia’s Austal, has a legacy in aluminum shipbuilding. The company builds the aluminum hulls for the Independence variant of the U.S. Navy’s Littoral Combat Ship and is also building the expeditionary fast transport vessel, which is constructed of aluminum, for the service.
The medium-endurance OPC is a steel ship. Austal USA in the fall of 2021 won a Navy contract for up to five Navajo-class towing, salvage and rescue (T-ATS) ships, and in June won a contract from the service to build the Auxiliary Floating Dry Dock Medium. The T-ATS and dry dock will be made of steel.
ESG is building the first four OPCs under the first stage of the contract. ESG had been expected to build 11 of the cutters but a hurricane in 2018 seriously damaged its facilities, forcing it to seek contract relief. That relief was granted by the Department of Homeland Security, which terminated the contract after four vessels and reopened the program to competition for ships five through 15.
The Coast Guard’s plan of record is for 25 OPCs. The service plans to recompete the program again beginning with the 16th ship.