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Department of Homeland Security Approves Limited Extraordinary Relief for Offshore Patrol Cutter Contract

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Following a determination by the Acting Secretary of Homeland Security that extraordinary relief is necessary to maintain the national defense and is in the best interest of the government, the Coast Guard is moving forward with an adjustment to the Offshore Patrol Cutter (OPC) detail design and construction contract with Eastern Shipbuilding Group (ESG) for up to the first four hulls. The Coast Guard will work with ESG to establish new cost and schedule targets under the contract and continue OPC production at ESG’s facilities in Panama City, Florida. Additionally, the Coast Guard will release a Request for Information to gauge industry interest in re-competing the remainder of the OPC program of record. This information will inform the acquisition strategy for the follow-on procurement.

The Coast Guard and Department of Homeland Security, with support from the Navy and independent third party experts, completed a comprehensive evaluation of ESG’s request for extraordinary contract relief as a result of Hurricane Michael. This evaluation focused on cost, schedule, and performance factors and determined that ESG’s continued performance on the OPC contract is essential to the national defense.

The request was made by ESG under the authority of Public Law 85-804 after Hurricane Michael – a Category 5 storm – made landfall in Panama City on October 10, 2018. Hurricane Michael caused widespread damage to ESG facilities as well as homes and businesses in the area.

ESG began reconstitution efforts immediately following the storm and remains actively engaged in post‐hurricane recovery activities. However, impacts are likely to be felt across the community for the better part of the next decade. As a result of property damage incurred, a significant impact to ESG’s workforce, and overall regional impacts to infrastructure, ESG requested extraordinary cost and schedule relief from the Coast Guard to support continued performance on the OPC contract.

Production on the first OPC commenced in January 2019 and new post-hurricane build strategy is being implemented. Long lead-time material to support construction of the second OPC are on order.

The OPC is the Coast Guard’s highest acquisition priority and will provide a capability bridge between the National Security Cutter, which patrols the open ocean in the most demanding maritime environments, and the Fast Response Cutter, which serves closer to shore. The OPC will feature state-of-the-market technology and will replace the service’s 270-foot and 210-foot Medium Endurance Cutters, which are becoming increasingly expensive to maintain and operate.

The Coast Guard remains committed to acquiring the OPC to address the Nation’s security needs, while maintaining public trust and stewardship of the American taxpayers’ dollars.

For more information on Coast Guard acquisition activities, visit: http://www.dcms.uscg.mil/acquisition/