Eastern Shipbuilding Suspends Work on Coast Guard’s Offshore Patrol Cutter Program

Eastern Shipbuilding Group has announced the suspension of work on the U.S. Coast Guard’s two Offshore Patrol Cutters, citing unsustainable financial pressures and workforce reductions as the company struggles with what CEO Joey D’Isernia described as “significant financial strain caused by the program’s structure and conditions.”

The decision marks another setback for the Coast Guard’s fleet modernization efforts and comes months after the Department of Homeland Security partially terminated Eastern Shipbuilding’s contract for two vessels, further cutting the program in half.

“Unfortunately, we also had to reduce our workforce—an extremely hard step, as our people are the strength of this company,” D’Isernia said in a statement.”This action allows us to remain financially stable and focused on delivering for our government and commercial customers.”

Eastern Shipbuilding was originally awarded the contract to design and construct the first four OPCs in 2016 as part of what was planned as a larger nine-vessel procurement. However, the program encountered significant obstacles when Hurricane Michael severely damaged the company’s Panama City facilities in 2018, forcing contract modifications and dividing the program into two stages.

The company’s delivery of OPC 1 was initially scheduled for June 2023 but has been delayed until at least late 2026, while OPC 2 missed its April 2024 delivery date. In July 2025, DHS Secretary Kristi Noem announced the partial termination of Eastern Shipbuilding’s contract for OPCs 3 and 4, after the company reportedly informed the Coast Guard it could not fulfill its contractual obligations without incurring “unabsorbable loss.”

“We cannot allow critical shipbuilding projects to languish over budget and behind schedule,” a Senior Homeland Security official stated at the time of the termination. “Our Coast Guard needs modern, capable vessels to safeguard our national and economic security.”

Despite the setback, D’Isernia remained optimistic about the company’s future. “Our shipyards will continue to build quality American vessels and support the regional economy,” he said. “We’ve overcome a major hurricane and a global pandemic, and we will overcome this challenge as well.”

In August, Eastern Shipbuilding Group received approval from Washington State Ferries to build two 160-vehicle hybrid-electric ferries, with an option for a third, marking a major milestone for the nation’s largest ferry system’s electrification. The $714.5 million contract follows the first competitive ferry construction bid in over 25 years.

Austal USA

The Coast Guard’s OPC program has been redirected to Austal USA, which was awarded a contract in June 2022 for detail design and construction of up to 11 OPCs with a potential value of $3.3 billion.In September, the Coast Guard exercised contract options worth $314 million with Austal USA for long lead time materials for three additional cutters.

Work on Austal USA’s first OPC, Pickering (WMSMS 919), is progressing with keel laying scheduled for December, while construction on the second vessel, Icarus (WMSMS 920), began in early August.

The 110-meter cutters are designed to operate beyond 12 nautical miles from shore with a range of 10,200 nautical miles at 14 knots and a 60-day endurance period, conducting missions including law enforcement, drug and migrant interdiction, and search and rescue operations.

The Coast Guard maintains its goal of procuring 25 OPCs as part of its fleet modernization strategy, though the program’s cost has escalated significantly. According to a 2023 U.S. Government Accountability Office report, the acquisition cost estimate rose from $12.5 billion to $17.6 billion due to contract restructuring following Hurricane Michael and higher infrastructure costs.

The Trump administration has pledged nearly $25 billion to the Coast Guard through the “One Big Beautiful Bill” and “Force Design 2028,” described as Homeland’s plan to transform the Coast Guard into a more agile and capable force.

Eastern Shipbuilding Group has delivered over 350 vessels over the past 20 years and is Northwest Florida’s largest private employer.

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