USCG Awards $745 Million Contract For Building Ice Breaker To VT Halter Marine

VT Halter Marine Inc. has been awarded a $745M detailed design and construction contract for the Coast Guard’s next-generation heavy icebreaker, according to a Tuesday Pentagon contract announcement.

According to the announcement, the first-in-class ship will be built at the company’s Pascagoula, Miss. shipyard and is scheduled to deliver in 2024.

“The initial award is valued at $745.9 million and supports non-recurring engineering and detail design of the PSC class as well as procurement of long lead-time materials and construction of the first ship,” read a statement from the Coast Guard and Naval Sea Systems Command. “The contract also includes options for the construction of two additional PSCs. If all options are exercised, the total contract value is $1.9 billion.”

USCG Icebreaker
Image Credits: US Coast Guard

The yet-to-be-named Polar Security Cutter will be the first of a planned class of six icebreakers – three heavy and three medium – the Coast Guard says it needs to meet the minimum requirements for the U.S. mission in the Arctic.

“Against the backdrop of great power competition, the Polar Security Cutter is key to our nation’s presence in the polar regions,” Coast Guard commandant Adm. Karl Schultz, said in a Tuesday statement. “With the strong support of both the Trump Administration and the United States Congress, this contract award marks an important step towards building the nation’s full complement of six polar icebreakers to meet the unique mission demands that have emerged from increased commerce, tourism, research, and international activities in the Arctic and Antarctic.”

VT Halter Marine beat out Gulf Coast shipbuilder Bollinger and a team between Philly Shipyard of Philadelphia and Fincantieri Marinette Marine in Wisconsin, according to a report in The Associated Press. General Dynamics’ NASSCO shipyard had previously expressed interest in the work but did not submit a bid for the final work, USNI News understands.

The contract award follows the release of a request for proposals from the Coast Guard and the Navy last year for the new ships.

The Coast Guard received $655 million in Fiscal Year 2019 for the first hull and an additional $20 million for the second ship in the class. The service requested $35 million in the Fiscal Year 2020 Budget request for program management costs to keep the line going between new ships.

The development of the Polar Security Cutter is the furthest the Coast Guard has progressed in its long-voiced request to replace its decades-old pair of icebreakers.

Currently, the service has two icebreakers, heavy icebreaker USCGC Polar Star (WAGB-10), commissioned in 1976, and medium icebreaker USCGC Healy (WAGB-20) that was commissioned in 1999.

The service’s new Arctic Strategic Outlook, released this week, stressed the services need to recapitalize its Arctic ships and aircraft to keep pace with Russian and Chinese icebreaker developments. The Russian has a fleet of 14 icebreakers.

“The Coast Guard cannot meet the challenges of tomorrow’s Arctic with today’s paradigms. Rapid technological advancements within the maritime industry, combined with robust investments by strategic competitors, have raised the stakes,” reads the document. “The service must take this opportunity to leverage transformative technology and lead the employment of innovative policies to solve complex problems.”

The development of the design will be jointly overseen by the U.S. Navy’s Naval Sea Systems Command and the Coast Guard.

“This contract award reflects the great benefit achieved by integrating the incredible talents of U.S. Coast Guard and Navy acquisition and shipbuilding professionals to deliver best value at speed,” said James Geurts, Assistant Secretary of the Navy for Research, Development and Acquisition in a statement.

The following is the complete April 23, 2019 contract announcement for the Polar Security Cutter.

VT Halter Marine Inc., Pascagoula, Mississippi, is awarded a $745,940,860 fixed-price incentive-firm contract for the detail design and construction of the U.S. Coast Guard (USCG) Polar Security Cutter (PSC) (formerly the Heavy Polar Ice Breaker). The PSC program is a multiple year Department of Homeland Security Level 1 investment and a USCG major system acquisition to acquire up to three multi-mission PSCs to recapitalize the USCG fleet of heavy icebreakers which have exhausted their design service life. The PSC’s mission will be to ensure continued access to both polar regions and support the country’s economic, commercial, maritime, and national security needs. This contract includes options which, if exercised, would bring the cumulative value of this contract to $1,942,812,266. Work will be performed in Pascagoula, Mississippi (61 percent); Metairie, Louisiana (12 percent); New Orleans, Louisiana (12 percent); San Diego, California (4 percent); Mossville, Illinois (4 percent); Mobile, Alabama (2 percent); Boca Raton, Florida (2 percent); and various other locations (3 percent), and is expected to be completed by June 2024. If all options are exercised, work will continue through November 2027. Fiscal 2019 procurement, construction, and improvement (Coast Guard); and fiscal 2018 and 2017 shipbuilding and conversion (Navy) in the amount of $839,224,287 will be obligated at time of award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website, with three offers received. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity (N00024-19-C-2210).

The following is the complete April 23, 2019 statement from the NAVSEA and the Coast Guard.

WASHINGTON – Today, the U.S. Coast Guard and U.S. Navy, through an Integrated Program Office (IPO), awarded VT Halter Marine Inc., Pascagoula, Mississippi, a fixed price incentive (firm) contract for the Detail Design and Construction (DD&C) of the Coast Guard’s lead Polar Security Cutter (PSC).

The initial award is valued at $745.9 million and supports non-recurring engineering and detail design of the PSC class as well as procurement of long lead-time materials and construction of the first ship. The contract also includes options for the construction of two additional PSCs. If all options are exercised, the total contract value is $1.9 billion. PSCs support a wide range of Coast Guard missions including search and rescue, maritime law enforcement, environmental response, and national defence missions.

The U.S. Coast Guard is the nation’s lead agency responsible for providing assured surface access in the polar regions. This contract award supports the United States’ ability to recapitalize heavy polar icebreaker capabilities that are vital to our nation’s ability to conduct national missions, respond to critical events, and project presence in the polar regions.

“Against the backdrop of great power competition, the Polar Security Cutter is key to our nation’s presence in the polar regions,” said Admiral Karl L. Schultz, Commandant of the Coast Guard. “With the strong support of both the Trump Administration and the United States Congress, this contract award marks an important step towards building the nation’s full complement of six polar icebreakers to meet the unique mission demands that have emerged from increased commerce, tourism, research, and international activities in the Arctic and Antarctic.”

The acquisition of Polar Security Cutters is being jointly managed across the U.S. Navy and U.S. Coast Guard through an IPO that leverages the expertise and utilizes best practices across each enterprise to deliver a fleet of highly capable, multi-mission ships in the most cost-efficient and
timely manner possible. NAVSEA is the lead contracting authority.

“This contract award reflects the great benefit achieved by integrating the incredible talents of U.S. Coast Guard and Navy acquisition and shipbuilding professionals to deliver best value at speed,” said James Geurts, Assistant Secretary of the Navy for Research, Development and Acquisition. “Working with our industry partners, the team identified approximately $300 million in cost avoidances and accelerated the schedule for delivery of this capability to the nation by almost three years. This reflects the urgency in which we are operating to ensure we deliver capabilities necessary to support the U.S. Coast Guard and the nation’s missions in the polar regions.”

Construction on the first PSC is planned to begin in 2021 with delivery planned for 2024; however, the contract includes financial incentives for earlier delivery.

The U.S. Coast Guard and U.S. Navy are committed to working together to ensure the success of this program and to deliver the capabilities necessary to meet national defence and homeland security mission demands in the polar regions.

Reference: usni.org

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