PANAMA CITY – Congressman Neal Dunn says he will do whatever he can to fight the The decision of the US Coast Guard to award a huge construction contract to an Alabama shipbuilder owned by a foreign company.
Federal officials announced on Friday that Austal USA, a subsidiary of Australia’s Austal Limited, has beaten Eastern Shipbuilding of Panama City for a more than $3 billion contract to build 11 heritage-class offshore patrol cutters.
The rewarded cutters – ships 5 to 15 – are part of the coast guard Offshore Patrol Cutter Program, a $10.5 billion project to build 25 ships, the first four of which were loaded by Eastern Shipbuilding.
‘Extremely disappointed’:Eastern Shipbuilding loses $3 billion Coast Guard contract
The Panama City-based company secured 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. “This is a real disappointment for many reasons, and it affects the entire region. We have technical schools, state colleges from Jacksonville to Pensacola gearing up to provide labor for the East, so it affects us very, very wildly.”
Dunn, who has indicated he plans to meet with Coast Guard officials next week to begin his formal protest against their decision, said Austal has ‘no experience building steel-hulled vessels’ .
The company, which has service centers in San Diego and Singapore, is known for building aluminum ships for the U.S. Navy, some of which recently developed “serious” problems that dramatically shortened their lifespans, said Dunn said.
“(The Navy) is considering mothballing major warships after only five to seven years in service,” he said. “The ships that (Austal) has built over the past decade are failing, and not in wartime, but in normal use.
“…Why would the Coast Guard go and reinvent the Navy’s problems?”
Austal USA has also been investigated by the US Department of Justice and the Securities and Exchange Commission, as well as Australian security regulators, for financial and procurement practices in construction programs dating back to before July 2016, according to an Associated Press article from February 2021.
Dunn said his office is still digging into the details of the investigation. He did not know as of Wednesday morning if the investigation was still active or if Austal had received associated sanctions.
The News Herald made several attempts to contact officials from the US Department of Justice, the US Coast Guard and Austal USA. None responded Wednesday afternoon. Eastern Shipbuilding officials declined to comment.
The Associated Press article notes that Austal USA officials have said in earlier statements that its “aluminum-hulled ships cost more to build than expected.” The story also states that “some valves installed on ships did not meet government standards”.
Dunn said he thought the company’s bid for the Coast Guard’s latest project was “highly unrealistic, especially given the cost of steel and rising” inflation going on.
Former Austal USA 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 approximately two years after law enforcement raided the offices of Austal USA,” the article read. “No charges have been announced and the company said it is still working with US regulators.”