New court doc sheds light on Austal’s 2022 Offshore Patrol Cutter win

WASHINGTON — The U.S. Coast Guard, when deciding on Austal USA over Japanese Shipbuilding Group to construct the subsequent 11 Offshore Patrol Cutters, extremely valued Austal’s indoor metal meeting facility and lower cost tag, in line with just lately unsealed paperwork from the U.S. Courtroom of Federal Claims.

The court docket final month dominated towards Japanese Shipbuilding, which had appealed the Coast Guard’s determination. The court docket unsealed the case paperwork Dec. 14, although with some redactions.

Among the many revelations within the paperwork are that Japanese’s bid was judged to current much less threat and included a superior design method.

Austal was the one bidder credited with a “important power,” for its indoor meeting facility.

And whereas Japanese scored higher on the 5 non-price components, which have been imagined to be weighted extra closely within the remaining determination than worth, the Coast Guard decided the 2 “approached equality” of their scores such that Austal’s lower cost tipped the scales.

In the end, Austal’s proposal got here to $3.22 billion, or about $292 million per hull, in line with the unsealed paperwork.

Japanese’s worth is redacted within the paperwork however is characterised as a “very giant worth differential.”

Japanese Shipbuilding’s successful bid in 2016, when the OPC program was first awarded, got here to about $264 million per hull — however the price of labor and materials have elevated considerably since.

Although Japanese received the unique 2016 deal, the Coast Guard rebid this system after the Florida yard was devastated by Hurricane Michael in 2018. The Coast Guard introduced in June 2022 it chosen Austal to construct the subsequent part of 11 ships.

Japanese protested the award to the Authorities Accountability Workplace two weeks later, and in October 2022 it dropped the GAO protest to as a substitute enchantment to the U.S. Courtroom of Federal Claims.

Japanese’s lawsuit “contends that the Coast Guard made quite a lot of errors when it evaluated the technical deserves of the proposals,” in line with the court docket doc, which addresses every declare. In every, the court docket both denied the advantage of the declare or discovered the court docket lacked authority to go towards the Coast Guard’s evaluation standards.

CLICK HERE TO VIEW THE UNSEALED COURT DOCUMENT

Whereas Japanese argued outscoring Austal on the higher-weighted non-price components ought to have resulted in a win, the court docket paperwork state the Coast Guard decided “the extra advantages that may be achieved … don’t justify the value premium.”

Relatively, any threat incurred from Austal’s plans “might be mitigated by particular contractor emphasis and shut Authorities monitoring.”

The court docket doc reveals the Coast Guard was drawn to the resilience of Austal’s amenities. Particularly, it discovered the indoor metal meeting facility would cut back weather-related delays, notably throughout welding and portray work, cut back the probability of corrosion and weather-related harm to the ship hulls and improve the standard of labor.

The Coast Guard acknowledged Austal’s metal manufacturing line is new — the corporate beforehand constructed solely aluminum ships on the Alabama yard — which creates some threat. It additionally famous just one OPC might be constructed within the indoor facility at a time, that means the heel-to-toe manufacturing cadence might lend itself to “notable disruptions” to schedule.

Amongst Japanese’s claims is that Austal’s work on the U.S. Navy’s towing, salvage, and rescue ships and Giant Unmanned Floor Vessel program utilizing the identical indoor facility “compounds Austal’s already extreme schedule threat for setting up the OPC.”

The Coast Guard wrote it was comfy managing the danger by its authorities oversight, and the court docket discovered it didn’t have the authority to second-guess that dedication.

Austal USA couldn’t be reached for remark.

Japanese Shipbuilding Group CEO Joey D’Isernia mentioned “we’re disenchanted within the court docket’s determination.” Nonetheless, the corporate is eager about future alternatives to rejoin this system.

The Coast Guard plans to finally award a Part 3 contract for 10 further OPCs, for a complete of 25 ships. Coast Guard acquisition chief Rear Adm. Chad Jacoby mentioned at a current convention there’s no present plan to have each yards construct concurrently into the long run however that he’d be open to it if lawmakers elevated annual OPC spending, because it’s “pressing” to get OPCs into the fleet to exchange “the medium endurance cutters, that are struggling to keep up operational functionality proper now.”

In a press release to Protection Information, D’Isernia mentioned Japanese is “very eager about any path that may allow our workforce to proceed constructing the OPCs.”