The United States Department of Homeland Security has announced the partial termination of a shipbuilding contract with Eastern Shipbuilding Group (ESG), saying it was wasteful of taxpayer’s money. The Coast Guard is reviewing contracts which are failing to meet delivery agreements. An existing Offshore Patrol Cutter (OPC) contract with ESG has been slow to deliver four OPCs, so Secretary Kristi Noem partially canceled ESG’s contract for two out of the four OPCs expected from ESG in Panama City, Florida.
ESG’s delivery of OPC 1 was initially due in June 2023 but will now be completed by the end of 2026 at the earliest. ESG missed its April 2024 delivery for OPC 2. The Coast Guard stopped work on OPCs 3 and 4 after ESG notified the service earlier this year they could not fulfill their contractual duty to deliver all four OPCs without unabsorbable loss.
“This Administration is unwavering in its commitment to the American taxpayer and to a strong, ready Coast Guard,” said a Senior Homeland Security official. “We cannot allow critical shipbuilding projects to languish over budget and behind schedule. Our Coast Guard needs modern, capable vessels to safeguard our national and economic security, and we will ensure every dollar is spent wisely to achieve that mission. This action redirects resources to where they are most needed, ensuring the Coast Guard remains the finest, most-capable maritime service in the world.”
The Coast Guard’s goal is still to procure 25 OPCs.
The OPC fleet will complement the capabilities of the Service’s National Security Cutters, Fast Response Cutters and Polar Security Cutters as an essential element of the Nation’s layered maritime security strategy. They will be especially critical to the counter-drug and migrant interdiction missions along the southeast border.
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