US Department of Homeland Security confirms partial termination of coast guard cutter contract
US Department of Homeland Security (DHS) Secretary Kristi Noem recently confirmed the partial termination of what has been described as a "wasteful shipbuilding contract" that had been awarded to Florida-based Eastern Shipbuilding Group (ESG).
"We cannot allow critical shipbuilding projects to languish over budget and behind schedule," Noem said on Friday, July 11, in reference to a contract under which ESG was to build four offshore patrol cutters (OPCs) for the US Coast Guard.
DHS said that the OPC contract with ESG has been slow to deliver four ships. In light of that, Noem partially cancelled ESG’s contract for two out of the four OPCs expected from its facilities in Panama City, Florida.
DHS said that ESG's delivery of the first OPC was initially due in June 2023 but will now be completed by the end of 2026 at the earliest, and that the company missed its April 2024 delivery for the second OPC.
The coast guard stopped work on OPCs number three and four after ESG notified the service earlier this year that it could not fulfil its contractual duty to deliver all four OPCs without unabsorbable loss.
DHS said the money saved will redirected to ensure it will actually be benefiting the coast guard.
The department said the coast guard's goal of acquiring 25 OPCs remains unchanged.
The OPC fleet will complement the capabilities of the coast guard's national security cutters (NSCs), fast response cutters and polar security cutters, "as an essential element of the nation's layered maritime security strategy," according to DHS.
The partial termination of the ESG OPC contract is the latest development to adversely affect the coast guard's vessel modernisation program.
In June, DHS cancelled the contract for the construction of the coast guard's eleventh NSC by Huntington Ingalls Industries. The cancellation came as a result of the cutter still being incomplete more than a year past its originally scheduled delivery of 2024.
