Bath Iron Works Won't Protest Awarding of Coast Guard Contract

U.S. Coast Guard
U.S. Coast Guard

BATH, Maine -- Three weeks after the U.S. Coast Guard chose a Florida shipyard over Bath Iron Works to build a new class of offshore patrol cutters, a BIW spokesman confirmed Wednesday that the Maine company would not protest the award.

BIW spokesman Matt Wickenheiser said the company will not protest the contract, for which only BIW, Eastern Shipbuilding Group and Bollinger Shipyards were finalists.

He declined to comment on why no protest was filed to the federal Government Accountability Office.

On Sept. 15, the Coast Guard announced that Eastern Shipbuilding Group in Panama City, Florida, had been awarded a $2.4 billion contract to build the first nine cutters in a new line, with the potential to build two more. Should Eastern Shipbuilding Group eventually build the full class of 25 cutters, the contract would be worth about $11 billion.

At the time, BIW President Fred Harris said the company planned to meet with the Coast Guard to seek details about the decision.

Harris had previously said that without the Coast Guard contract, as many as 1,200 manufacturing employees, or 35 percent of the shipyard's workforce, could be laid off.

BIW would have been required to notify the Government Accountability Office by phone of its intent to protest within 10 days of the award.

On Sept. 21, Adm. Paul Zukunft said at the International Seapower Symposium at the Naval War College that a protest would allow "full disclosure" of the losing bids, USNI News reported.

"What the other competitors do not know is what we are paying for one of these ships," Zukunft said.

Analysts had said for months that despite controversial cost-saving measures by the Bath shipyard, BIW is known for the quality of its ships and not the affordability.

When no protest is filed, the losing bids do not become public, according to Jay Korman, senior Navy analyst with the Washington, D.C.-based consulting firm The Avascent Group.

Korman said Wednesday he had no insight into why BIW did not protest the decision.

"Most often, companies will back away from a protest after a debrief from the customer where it's clear that the competition had some distinct advantages that are tough to argue. Sometimes that's based on a big cost differential. Sometimes it's based on technical competencies or managerial approaches or the business case offered to the customer. In those situations, companies will realize that a bid protest is a long shot that would just serve to annoy the customer, so they choose to keep their powder dry, preserve the relationship, and gear up for the next big competition."

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Cutters and Patrol Boats