DHS Grants ESG Contract Relief for Offshore Patrol Cutters

Updated: July 26, 2022 (Originally published October 15, 2019)

The U.S. Department of Homeland Security has granted extraordinary contract relief to Eastern Shipbuilding Group related to the first four hulls in the Coast Guard’s Offshore Patrol Cutter (OPC) program due to impacts from Hurricane Michael in 2018.

ESG submitted its request extraordinary contract relief in June 2019 after their Panama City, Florida shipbuilding facilities sustained significant damage as a of Hurricane Michael, a Category 5 storm that came ashore October 10, 2018 along the Florida Panhandle.

Upon review, Acting Secretary of Homeland Security Kevin K. McAleenan granted the request, but limited it to the first four hulls under the contract.

The Coast Guard in October 2016 awarded ESG the contract to design and construct the first series of up to nine Offshore Patrol Cutters, marking the largest-ever vessel procurement contract ever awarded in the history of the Coast Guard. The Coast Guard plans to build a total of 25 OPCs, representing a total investment of more $10 billion. 

DHS granted the contract relief under a 1958 law that permits an existing contract may be amended or modified for reasons of national defense. 

The DHS statement said the Coast Guard will immediately transition to a follow-on competitive contract for the remaining OPC program of record, calling into question ESG’s role in constructing the next five OPCs in the first series. 

The OPCs will replace the aging service’s aging fleet of 29 medium endurance cutters, some of which are more than 50 years old.

Delivery of the lead OPC is planned for 2021.

Update: GAO Study Finds Significant Risks in Coast Guard’s Offshore Patrol Cutter Program

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