Florida-based Eastern Shipbuilding Group (ESG) has filed a protest over the US Coast Guard’s decision to award a $3 billion contract to an Australian shipbuilding company’s branch in the US, Austal USA. ESG has cried foul on grounds such as Austal having no prior experience in steel construction, their poor track record on previous contracts regarding performance of the vessels and their finance, and an alleged Coast Guard leak of their pricing data.
The contract is for 11 new “Offshore Patrol Cutters,” which are a sort of intermediate-sized vessel meant to close the gap between the Coast Guard’s large “National Security Cutters” that operate in the open ocean and the smaller “Fast Response Cutters.” These newly ordered vessels are meant to replace models currently in service that are over 50 years old. The contract was initially awarded to ESG in 2016; however, it was again put on the market following the devastation of ESG’s Shipyard after Category 5 Hurricane Michael struck in 2018.
The new contract ended up being awarded to Austal USA. However, ESG protests that even though the bid by Austal was more lucrative, their past performance, scheduled deliveries, and lower risk should have weighed the deal in their favor. They have pointed out several areas of concern, such as the well-publicized cost and performance issues with Austal’s previous contracts with the US Government, the lack of prior experience in Austal with steel shipbuilding, and the hiring of a former Coast Guard commander who had inside access to ESG’s information to work on Austal’s proposal writing team. In essence, having their proprietary pricing data helped Austal lowball their offer.
However, Austal has responded that they have faith in the integrity of the Coast Guard’s solicitation process and believe that they will prevail in the dispute.
