Rep. Neal Dunn says he plans to fight the U.S. Coast Guard’s decision to not select Eastern Shipbuilding for a more than $3 billion contract to build additional offshore patrol cutters. Eastern is building the first four cutters in the project.

Rep. Dunn vows to fight Coast Guard’s decision to ditch Eastern Shipbuilding

PANAMA CITY — Congressman Neal Dunn says he will do everything he can to fight the U.S. Coast Guard’s decision to award a massive construction contract to an Alabama shipbuilder owned by a foreign company.

Federal officials announced Friday that Austal USA, a subsidiary of Australian-based Austal Limited, beat out Eastern Shipbuilding of Panama City for a more than $3 billion contract to build up to 11 Heritage Class Offshore Patrol Cutters.

The awarded cutters — vessels five through 15 — are part of the Coast Guard’s Offshore Patrol Cutter Program, a $10.5 billion project to construct 25 ships, the first four of which Eastern Shipbuilding was commissioned to build.

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The Panama City-based company was given the rights for the first 11 ships in 2016, but that contract was reduced to four after Hurricane Michael devastated Bay County and other parts of the Panhandle in October 2018.

“There’s every reason in the world to continue with Eastern on this,” Dunn told The News Herald on Wednesday. “It’s a real disappointment for a lot of reasons, and it affects the whole region. We have technical schools, state colleges from Jacksonville to Pensacola gearing up to supply a workforce for Eastern, so this affects us very, very wildly.”

Dunn, who noted he plans to meet with Coast Guard officials sometime next week to begin his formal protest of their decision, said Austal has “zero experience building steel hull ships.”

The company, which has service centers in San Diego and Singapore, is known for having built aluminum ships for the U.S. Navy, some of which recently have developed “serious” issues that drastically cut their shelf lives, Dunn said.

“(The Navy) is looking at mothballing major warships after just five to seven years of service,” he said. “The ships that (Austal) built in the last decade are failing, and not failing in war, but failing in normal use.

“… Why would the Coast Guard go reinvent the Navy’s problems?”

Austal USA also was investigated by the U.S. Department of Justice and the Securities and Exchange Commission, as well as Australian security regulators, for financial and procurement practices in construction programs dating before July 2016, according to an Associated Press article from February 2021.

Dunn said his office still was digging into the details of the investigation. He did not know as of Wednesday morning if the investigation still was active, or if Austal received any associated penalties.

Coast Guard Chief Warrant Officer Kurt Fredrickson wrote in a Thursday morning email to The News Herald that “the Coast Guard considered all relevant and required information when making its award decision” for the contract.

Fredrickson did not specifically answer questions about whether the investigation into Austal USA was ongoing, when and why it began or why Austal USA was better suited for the contract than Eastern Shipbuilding.

“The Coast Guard may not disclose any proprietary or acquisition sensitive information related to the source selection proceeding,” Fredrickson wrote.

The News Herald made multiple attempts to contact officials with the U.S. Department of Justice and Austal USA. Neither responded by Thursday morning. Eastern Shipbuilding officials declined to comment.

The Associated Press story notes Austal USA officials have said in past statements that its “aluminum-hulled ships cost more to build than anticipated.” The story also states “some valves installed on ships did not meet government standards.”

Dunn said he believes the company’s bid for the latest Coast Guard project was “highly unrealistic, especially given the cost of steel and the increases” of ongoing inflation.

Austal USA’s past chief executive, Craig Perciavalle, announced his resignation in 2021 following the investigation by federal and Australian authorities, according to the Associated Press.

“Perciavalle’s resignation was announced about two years after a law enforcement raid at the offices of Austal USA,” the story reads. “No charges were announced, and the company said it was still working with U.S. regulators.”

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Re Blogged from:-https://news.yahoo.com/rep-dunn-vows-fight-coast-174807136.html?fr=sycsrp_catchall

This article originally appeared on The News Herald: Rep. Dunn: Coast Guard wrong to pick Austal over Eastern Shipbuilding

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