The Court of Federal Claims in early November rejected a protest by one of the losing bidders for the second stage of the Coast Guard’s offshore patrol cutter (OPC) program, upholding the service’s $3.3 billion award to Austal USA in June 2022.
Eastern Shipbuilding Group (ESG), which is building the first four OPCs under Stage 1 of the program, initially protested the award to the Government Accountability Office in July 2022 but later withdrew the complaint and filed a bid protest in the U.S. Court of Federal Claims. The court on Nov. 6 rejected the protest but kept the judgment under seal until Dec. 14 to give the relevant parties an opportunity to propose redactions to the court’s opinion.
There were two additional bidders for the OPC Stage 2 contract but they did not protest.
The award to Austal was based on price as the company’s $3.2 billion bid was significantly lower than ESG’s, even though the Stage 1 contractor had a higher rating in their design approach and was rated lower risk in the production approach and schedule factors, according to Judge Elaine Kaplan, who authored the court’s opinion. ESG’s bid price was redacted in the unsealed opinion.
Both shipbuilders scored the same on program management and past performance factors.
The non-price factors combined were deemed more important than price for source selection, although the importance of price increased if the competing proposals were close on the other factors, Kaplan wrote. The Coast Guard, therefore, determined that Austal’s bid provided the best value, she wrote.
Regarding the Coast Guard’s best value determination, Kaplan deferred to the service’s judgment that both companies’ non-price factors “’approached’ equality because it is supported by the record and not irrational.”
ESG took exception.
“We are disappointed in the court’s decision,” Joey D’Isernia, ESG’s CEO, said in a statement. “In a side-by-side comparison, Eastern won outright – we were superior and lower risk in the top three highest weighted categories, and yet the government selected a higher risk shipyard with an unrealistic price. Having just successfully launched Hull 1, and with Hulls 2, 3 and 4 well on their way, our shipyard is clearly the lowest risk, best value, and most qualified to be building the Offshore Patrol Cutters.”
The company said it is still evaluating its options.
ESG in 2016 won the initial contract to build up to 11 OPCs, but in fall 2028 the company’s facilities in Panama City, Fla., were severely damaged by a hurricane, forcing the company to seek contract relief. The Department of Homeland Security granted schedule and cost relief, but also required the OPC program to be recompeted beginning with the fifth ship, a competition won by Austal for the next 11 vessels.
The Coast Guard plans to acquire 25 medium-endurance OPCs. The first ship, Argus, was christened in October and is expected to be delivered during the fourth quarter of 2024.