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BIW gets another chance to bid on Coast Guard cutters

Significant damage caused by Hurricane Michael at Eastern Shipbuilding prompted the U.S. Coast Guard to reopen bids for all but four ships in the 29-cutter program.

BATH, Maine — When Bath Iron Works lost a multi-billion dollar contract to build a fleet of Offshore Patrol Cutters for the U.S. Coast Guard in September 2016, shipbuilders there were worried that layoffs were imminent.

But, now BIW will get a chance to bid on those cutters.

Back in October, Hurricane Michael inflicted significant damage at Eastern Shipbuilding in Panama City, Florida -- the shipyard that won the entire Coast Guard contract.

 On Friday, the Department of Homeland Security and U.S. Coast Guard announced that Eastern Shipbuilding would be granted "extraordinary contract relief" to build up to four of the first cutter hulls, however, competitive bidding for the remaining cutters in the program would be reopened.

Twenty-five cutters are planned, according to the Coast Guard, at an estimated procurement cost of about $421 million per ship.

An extensive analysis of Eastern's request for relief included "an assessment of the cost, schedule and performance impacts of the existing contract," says a press release from the Coast Guard and the Department of Homeland Security.

“Eastern Shipbuilding’s request for extraordinary relief was carefully considered,” Coast Guard Vice Commandant Admiral Charles W. Ray said in the release. “This review validated the essential contributions the OPC will provide to our national security and determined that limited relief, in parallel with immediate re-compete, is the best option in this exceptional situation. Doing so is consistent with the law, fiscally responsible, and the most expeditious means to deliver this essential national capability.”

In February 2014, BIW was one of three shipyards to win two-year design contracts for the next-generation OPCs.

But in September 2016, the Coast Guard awarded the contract to Eastern Shipbuilding. The initial contract had a potential value of $2.38 billion if all options are exercised.

Bath Iron Works did not immediately return a request for comment on Friday.

Senator Susan Collins weighed in on the announcement, releasing this statement:

"I have long believed that Eastern Shipbuilding Group likely underbid the contract for these Coast Guard cutters, and I have said I would carefully scrutinize any requests for supplemental funding. Although it is a positive development that the Coast Guard has decided to rebid a portion of the existing contract to give other shipyards the opportunity to compete to build these ships, a full re-competition would have been more appropriate."

It goes on to say:

“I continue to believe that Bath Iron Works, with its outstanding shipbuilding record, would have delivered the highest-quality cutters to the Coast Guard.  I remain committed to highlighting BIW’s extensive capabilities and will continue to advocate for the shipyard through my senior position on the Senate Appropriations Committee.”