Austal USA President Rusty Murdaugh, left, and Director of Manufacturing Neil Seddon, right, discuss the process that will be used in the company's new steel shipbuilding facility. The two spoke at an opening celebration in April. At the end of June, Austal USA won a Coast Guard steel shipbuilding contract potentially worth $3.3 billion.Lawrence Specker | LSpecker@AL.com

Austal USA has won one of the biggest contracts the Mobile-based shipyard has ever received, building Coast Guard cutters in a deal with a potential value of $3.3 billion.

By comparison, the 2008 contract to build the first 10 Expeditionary Fast Transports was valued at $1.6 billion. If the Coast Guard exercises all its option, the new deal likely would be topped only by the shipyard’s work on Independence-class Littoral combat ships.

The U.S. Coast Guard’s Heritage-class Offshore Patrol Cutter program is one of the major plums the shipyard has been pursuing since it began to transition from an aluminum-only yard into steel construction. It’s not a ship that Austal will be designing from the keel up: Back in 2016, Eastern Shipbuilding got a contract to start building the first four cutters in Panama City, Fla. Hurricane Michael damaged that facility in 2018, setting back production, and the Coast Guard began seeking to bolster output by spreading the work around.

In March 2020 the Coast Guard gave study contracts to nine other companies, including Austal. The Coast Guard hasn’t said how many actually submitted bids -- only that Austal had the winning proposal.

When Austal USA held a groundbreaking for its steel yard in March 2021, company officials and at least one politician went out of their way to give shout-outs to the Coast Guard and its need for steel ships. That was again the case in April 2022 when the shipyard held an opening celebration for the steel line: “I know that the Navy’s excited, I think the Coast Guard’s excited, I’m more than excited,” said Austal USA President Rusty Murdaugh.

The Coast Guard is certainly excited about its need for the new Offshore Patrol Cutters, which play a central role in its overall fleet.

“The offshore patrol cutter is absolutely vital to Coast Guard mission excellence as we recapitalize our legacy medium endurance cutters, some of which are more than 50 years old,” Adm. Linda Fagan, commandant of the Coast Guard, said in a statement released by the service. “The OPCs are the ships our crews need to protect our national security, maritime safety and economic prosperity. I look forward to the new cutters joining our fleet.”

According to that Coast Guard statement, the initial value of the deal is $208 million, covering “detail design and long lead-time material for the fifth OPC.” The Coast Guard then has options for a total of 11 of the ships. The Coast Guard wants 25 of the cutters in all.

The Coast Guard said the new class of cutters “complements the capabilities of the service’s national security cutters, fast response cutters and polar security cutters as an essential element of the Department of Homeland Security’s layered maritime security strategy. The OPC will meet the service’s long-term need for cutters capable of deploying independently or as part of task groups and is essential to stopping smugglers at sea, interdicting undocumented non-citizens, rescuing mariners, enforcing fisheries laws, responding to disasters and protecting ports.”

According to information from Austal, the ships will have a range of 10,200 nautical miles at 14 knots and a 60-day endurance period. Other missions could include “serving as a mobile command and control platform for surge operations such as hurricane response, mass migration incidents and other events. The cutters will also support Arctic objectives by helping regulate and protect emerging commerce and energy exploration in Alaska.”

“The Austal USA team is excited to support the U.S. Coast Guard using our new steel panel line to manufacture and deliver ships highly capable of performing their critical homeland security and defense missions,” Murdaugh said. “This contract award is the result of our continued investment in our people and our facilities. We are honored the Coast Guard has selected our team of shipbuilders to deliver its most important acquisition program. We are also thrilled for our community and our tremendous supplier base as this program will provide our shipbuilding team the backlog and stability for continued growth.”

Austal already has other steel work in hand for the Navy: It will build Navajo-class towing, salvage and rescue ships, and recently announced a $128 million Navy contract to build a floating dry dock with an 18,000 long ton lifting capacity.

The Coast Guard indicated that Austal won’t be required to build its ships to be completely identical to the first few made at Eastern. Its plan was “developed to maintain commonality with earlier OPCs in critical areas such as the hull and propulsion systems, but provide flexibility to propose and implement new design elements that benefit lifecycle cost, production and operational efficiency and performance.”

While Alabama politicians including Sen. Richard Shelby and U.S. Rep. Jerry Carl praised the Coast Guard’s decision, it didn’t sit so well in Florida. Defense News reported that Joey D’Isernia, the president of Eastern Shipbuilding Group, said his company’s leadership was “extremely disappointed in this decision and are evaluating our options.”

Sen. Marco Rubio said the decision was “short-sighted,” according to Defense News, and that “this decision will cost taxpayers more money and slow down the delivery of these critical vessels.”

There also was disappointment in Mississippi: Ingalls Shipbuilding had competed for the OPC program. That yard has been building larger Legend-class National Security Cutters for the Coast Guard since 2004.

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