Bollinger Shipyards, the shipbuilder on the current contract to build 32 of a planned buy of 58 new Coast Guard patrol boats, is the only bidder on a recompetition for the remaining 26 vessels, according to briefing materials from a House panel.
The House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation says in briefing materials for a Wednesday hearing on the Coast Guard’s cutter acquisition programs that Bollinger’s bid on the second phase of construction for the Fast Response Cutter (FRC) was higher than the bid in the first phase of the program.
The subcommittee’s briefing memorandum, made available on its website in advance of the hearing, says that the higher bid is “said to be due to design changes, but confirming concerns that a second bidding process could lead to added costs to the program.”
The Coast Guard in March 2015 awarded Bollinger $79 million for the final two FRC’s to be built in phase one of the program. That contract brought to $1.48 billion the value of the company’s awards under the FRC program, $20 million shy of the $1.5 billion ceiling that called for procuring up to 36 of the vessels in the first phase.
The subcommittee’s memorandum says the Coast Guard estimates the total acquisition cost for 58 FRCs is nearly $3.8 billion, about $65 million per cutter. So far, 15 FRCs have been commissioned.
The Coast Guard is taking a phased approach to production of its Offshore Patrol Cutter as well. The OPC is still in the preliminary and contract design phase, but a detail design and initial construction contract for up to 11 OPCs is expected to be awarded later this year. The Coast Guard’s current requirement is for 25 OPCs.
“The two-phase acquisition strategy was developed by analyzing lessons learned from other major government shipbuilding programs and through collaboration with industry on how to best design and produce the most affordable OPOC,” the subcommittee says. “However, efforts to conduct such a phased contract approach did not result in increased competition or reduced costs for Phase II contract award for the Fast Response Cutters,” it adds.
The estimated total acquisition cost for the OPC program is $10.5 billion, about $421 million per ship, the subcommittee says.