Panama City. Fla.-based Eastern Shipbuilding Group Inc. (ESG) has filed a bid protest with the GAO contesting the U.S. Coast Guard’s decision to award Stage 2 of the Offshore Patrol Cutter (OPC) program to Mobile, Ala.-based Austal USA.

A bid protest is a challenge to the terms of a solicitation or the award of a federal contract. The GAO (U.S. Government Accountability Office) Procurement Law Division adjudicates these bid protests. You can find out more about the process HERE.

ESG was the original prime contractor for the whole of the OPC program, but in June 2019 submitted a request to the Coast Guard’s parent agency, the Department of Homeland Security for extraordinary contract relief after its shipbuilding facilities sustained significant damage resulting from Hurricane Michael, a Category 5 storm, in October 2018. In response, then Acting Secretary of Homeland Security Kevin K. McAleenan made the decision to grant extraordinary contract relief limited to the first four hulls. Following that, the Coast Guard revised the OPC acquisition strategy “to mitigate emergent cost and schedule risk by establishing a new, full and open competition for OPCs five and through 15, designated as Stage 2 of the overall program.”

Since surviving Hurricane Michael, ESG has fully rebuilt its operational facilities. It has made many infrastructure investments. These infrastructure investments include an aluminum fabrication facility specifically designed to support full construction of the OPC aluminum superstructure in a covered and controlled environment. ESG has also completed launch way upgrades, upland bulkhead upgrades, construction platen expansions, and waterway deepening projects to further enhance ESG’s capability to launch and deliver two OPC sized vessels per year. It has also constructed a state-of-the-art C5ISR Production Facility to conduct testing and integration of navigation, communication, and command and control, equipment, and simulators on premises prior to final installation on the vessel.

Joey D’Isernia, president of ESG, issued this statement on the decision to file the bid protest:

“Upon careful evaluation of the OPC Stage 2 award, we have found several grounds for protest that have been filed with the U.S. Government Accountability Office. Our decision to protest does not come lightly. Our community is left reeling from the decision to abandon our workforce and move the Coast Guard’s largest acquisition program from our successful production line to a high-risk situation. It begs the question, why? While this process plays out, we remain committed to our USCG partners and delivering shipbuilding excellence on the first four hulls. We are grateful for the outpouring of support we have received.”

BACKGROUND ON GROUNDS OF PROTEST

The following are just some excerpts from the public redacted protest filing submitted to GAO by ESG on Monday, July 18:

“If the USCG had reasonably evaluated and made the award in accordance with the RFP, ESG would have received the award.”

“Moreover, the USCG evaluation failed to adequately consider risk (e.g., schedule, cost, and performance), contrary to an express RFP requirement.”

“The procurement was also deeply flawed because the USCG (a) ignored or otherwise failed to mitigate the USCG’s leak of ESG price data and (b) failed to avoid an Austal unfair competitive advantage arising from Austal’s use on its proposal writing team of a former USCG employee who had access to competitively useful non-public information.”

“The Austal award cannot be reconciled with the RFP and stated USCG objectives. ESG was higher rated and provided lower risk with strong, relevant past performance. Austal’s purported lower price is overwhelmed by the substantial risks associated with an award to Austal, a new entrant to the steel shipbuilding industry with a record of well publicized cost overruns and performance issues. The USCG’s flawed evaluation risks depriving the United States of a significant shipbuilding capability (ESG, judged ) in the United States’ Defense Industrial Base at a time of rising near-peer capabilities by hostile nations. The Austal award is inconsistent with the USCG’s stated objective in the RFP and elsewhere seeking a sustainable shipyard that can produce a fleet of OPCs over the long term. The USCG award arbitrarily ignores the additional risks and costs associated with award to Austal.”

“The USCG’s award to Austal is also contrary to USCG representations to GAO regarding the OPC program. Previous USCG statements to GAO support ESG’s protest. The USCG noted to GAO numerous positive aspects of ESG OPC 1 performance demonstrating low ESG schedule, technical and cost risk for the OPC program. The USCG evaluation and award here is inconsistent with prior USCG statements and rewards Austal for the low price, high risk approach contrary to the RFP and the USCG’s stated objectives.”

CICA AND FAR

In its filing ESG asserts that “the USCG violated the Competition in Contracting Act (“CICA”), the Federal Acquisition Regulation (“FAR”), and the terms of the RFP” and says that “The USCG award determination was arbitrary and unreasonable.”

ESG asserts that it was materially prejudiced by a number of procurement errors that it addresses in the filing. It says that the USCG evaluation “unreasonably failed to evaluate Austal schedule, cost and technical risk.”

“Given Austal’s status as a new entrant to steel shipbuilding and its well-publicized performance issues on large projects,” ESG says in the filing, “the USCG should have evaluated schedule, cost and technical risks higher, all of which could result in substantially higher actual costs to the government and delays and disruptions in contract execution, sustainment of the delivered vessels, and extended sustainment of existing vessels when the schedule slips.”

REQUEST OF RELIEF

ESG requests a ruling by the Comptroller General of the United States that award to Austal is in violation of statute and regulation. The Comptroller General should recommend that the Austal contract be terminated, and that award be made to ESG.

In the alternative, the Comptroller General should recommend that the USCG reevaluate proposals, conduct clarifications or discussions, reevaluate revised proposals in accordance with the RFP criteria, assess Austal conflict and unfair competitive advantage issues and then make new responsibility and award determinations.”

AUSTAL USA RESPONDS

Asked to comment, an Austal USA spokesperson said:

“We are confident in the integrity of the solicitation process and that the United States Coast Guard’s selection of Austal USA as the Stage II OPC shipbuilder will be upheld. We will remain focused on delivering world-class ships to our customers.”

Source: https://www.marinelog.com/shipbuilding/shipyards/shipyard-news/eastern-shipbuilding-files-gao-bid-protest-of-stage-2-opc-award/

Fire erupted in engine room of ferry HOLIDAY ISLAND at around 1100 LT (UTC -3) Jul 22 when ferry was entering Wood Islands Harbor, on arrival from Nova Scotia, Gulf of St. Lawrence, Canada. It was decided to ground the ship to avoid negative developments. Fire was contained by crew, understood extinguished as of morning Jul 23. 182 passengers on board were evacuated, no injures reported. 18 crew is said to remain on board to fight fire jointly with firefighters. HOLIDAY ISLAND according to track, was still aground as of 0050 LT Jul 23, evacuated passengers waiting for their cars remaining on board. Ferry is said to block entrance channel, i.e. Wood Islands port is blocked.

New FleetMon Vessel Safety Risk Reports Available: https://www.fleetmon.com/services/vessel-risk-rating/

Passenger ro-ro ship ANATOLIAN left Mogadisho Port, Somalia, on Jul 3, bound for Alang India, most probably for dismantling. On Jul 19 EUNAVFOR ATALANTA Command was alerted by distress signal or message from the ship, reporting total blackout, lack of supplies. Spanish frigate ESPS NUMANCIA and other Naval units responded, technicians teams failed to restore power and propulsion, and ANATOLIAN finally, was taken on tow, to be towed to Bosasso Somalia, Gulf of Aden. The ship arrived at Bosasso or Bosasso Anchorage on Jul 22. Navies delivered on board of distressed ship food and fresh water. Commercial towage is hampered by adverse weather. Ship’s last AIS position dated Jul 10.

New FleetMon Vessel Safety Risk Reports Available: https://www.fleetmon.com/services/vessel-risk-rating/

Offshore supply ship THUNDER in the afternoon Jul 23 reported water ingress in Gulf of Mexico some 65 nm south of Port Fourchon, Louisiana. The ship is returning to Port Fourchon after carrying out offshore works, with ETA Jul 24. THUNDER was disabled and went adrift at around 1900 UTC Jul 23, as of 0345 UTC Jul 24 she was dead in the water, drifting in southern direction, with US Coast Guard ship USCG MORAY nearby. THUNDER sister ship of the same company, MV SQUALL, was approaching drifting THUNDER.

New FleetMon Vessel Safety Risk Reports Available: https://www.fleetmon.com/services/vessel-risk-rating/

The global seaborne coal market has grown yet again, over the course of the first half of 2022, following the significant rise of 2021. In its latest weekly report, shipbroker Banchero Costa said that “following a disastrous 2020, with the world hit by lockdowns and recession pretty much everywhere, global seaborne coal trade managed to rebound to some extent in 2021. In the full 12 months of 2021, global seaborne coal exports increased by +4.5% y-o-y to 1149 mln tonnes, from 1099 mln tonnes in 2020, according to vessels tracking data from Refinitiv. This however was still well below the levels we had in pre-Covid times, being -10.0% down from the 1276 mln tonnes shipped during 2019. In the first half of 2022, global coal trade was a bit of a mixed picture. In the January to June period of 2022, global coal loadings increased by +1.5% y-o-y to 572.7 mln t, from 564.1 mln t in the first half of 2021, but still well below the 637.9 mln t in 1H 2019. However, the worst was at start of the year, and the trend in recent months has been very positive. In 1Q 2022, global coal loadings were down -5.1% y-o-y to just 258.5 mln t. In 2Q 2022, coal loadings were a strong +7.7% y-o-y at 314.2 mln t. The month of June 2022 was actually a record 111.6 mln t, +12.3% y-o-y.

Source: banchero costa &c s.p.a

According to the shipbroker, “the European Union is now the fifth largest seaborne importer of coal in the world, after India, China, Japan and South Korea. In 1H 2022, the EU accounted for 10.4% of global seaborne coal shipments. The EU’s seaborne coal imports in the 12 months of 2021 increased by +30.3% y-o-y to 87.1 mln tonnes. This was mostly a rebound from a massive -32.9% y-o-y decline in 2020 caused by Covid lockdowns. Previous years also saw a negative trend, with European coal imports declining by -18.3% y-o-y in 2019 and by -7.6% y-o-y in 2018, as European countries progressively abandon coal as a source of energy and embrace natural gas and renewables. In the first 6 months of 2022, coal imports into the EU further increased by +49.6% y-o-y to 57.6 mln tonnes. Europe accelerated its coal imports as a direct reaction to the threat of a reduction in gas supply from Russia. This compensated for the sharp drop in demand from Mainland China”.

Banchero Costa added that “in 1H 2022, China’s seaborne coal imports declined by -26.0% y-o-y to 87.8 mln t, from 118.6 mln t in the same period of 2021. The main coal import terminals in the European Union (27) are: Rotterdam in the Netherlands (14.6 mln tonnes discharged in 1H 2022), Amsterdam Netherlands (6.8 mln tonnes), Hamburg Germany (3.0 mln tonnes), Gdansk Poland (3.0), Gijon Spain (2.8), Dunkirk France (1.9), Fos France (1.9), Ljmuiden Netherlands (1.6), Ghent Belgium (1.2), Vlissingen Netherlands (1.2), Plonce Croatia (1.2), Taranto Italy (1.1), Wilhelmshaven Germany (1.1), Koper Slovenia (1.0), Antwerp (1.0), Algeciras Spain (0.8). In terms of sources of the shipments, Europe was and still now remains heavily dependant on Russia. In the whole of 2021, as much as 44% of the EU’s seaborne coal imports were sourced from Russia. In 1H 2022, as a result of the war in Ukraine, this proportion has declined. Nevertheless, Russia was still the source of 31.5% of the EU’s coal imports this year, and remains as the top supplier of coal to Europe. In 1H 2022, coal imports to the EU from Russia increased by +0.2% y-o-y to 18.2 mln tonnes. Of this, 9.1 mln tonnes were imported in the first quarter of 2022 (-1.6% y-oy), and 9.0 mln tonnes were imported in the second quarter (+2.1% y-o-y)”.

Source: banchero costa &c s.p.a

“The second most important supplier to Europe is now the USA, accounting for 19.4% of Europe’s imports in 1H 2022. In 1H 2022, imports from the USA surged by +91.6% y-o-y to 11.2 mln t. The third largest supplier to Europe is Australia, accounting for 17.6% of the EU’s seaborne imports in 1H 2022. In 1H 2022, imports from Australia increased +27.3% y-o-y to 10.2 mln t. In fourth place was Colombia, with a 12.7% share of Europe’s coal imports. In 1H 2022, 7.3 mln tonnes were imported from Colombia to the EU, up +113.6% y-o-y. In fifth place was South Africa, with a 5.6% share of Europe’s coal imports. In 1H 2022, the EU imported 3.2 mln tonnes from South Africa, up +764.4% y-o-y from just 0.4 mln t in 1H 2021”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

Last week, a Royal Navy warship picked up and tracked two Russian along the Norwegian coast. HMS Portland monitored the state-of-the-art Yasen-class missile sub Severodvinsk and the Akula-class attack sub Vepr as they headed southbound from Russia’s Arctic bastion.

The Type 23 frigate shadowed the submarines as they surfaced separately in the North Sea, northwest of Bergen, on July 16 and 19. NATO and NATO-applicant forces took over tracking duties as the subs continued to St Petersburg for Russian Navy Day celebrations, which will be held on July 31.

The Yasen-class sub Severodvinsk with HMS Portland. The Yasen-class is a modern design and is reportedly difficult to track (Royal Navy)

One of the Royal Air Force’s new P-8 Poseidon maritime patrol aircraft worked closely with HMS Portland to hunt and track the submarines.

“The cohesiveness of Royal Navy, RAF and our allies’ capabilities ensures that we are capable of conducting and sustaining these types of anti-submarine operations in the North Atlantic,” said HMS Portland CO Commander Tim Leeder.

Training under way

Back home, the Royal Navy is busily training up Ukrainian Navy personnel to get ready for mine warfare. Britain is sunsetting its minehunting fleet and going completely automated with unmanned minehunting systems, so its Sandown-class minehunters are no longer needed. Two of the previous-generation vessels will be sold to Ukraine, and 80 Ukrainian sailors have traveled to Britain to train to operate them.

“The intensity with which the Ukrainian soldiers and sailors are training is something to behold. They work with the focus of troops who know they’ll be fighting in a war in just a few short weeks’ time,” said UK Armed Forces Minister James Heappey. “Delivering training that matches that intensity and focus is not straightforward. The Royal Navy and the British Army are working long hours and drawing on all their operational experience.”

Around Britain, more than 1,000 UK service personnel are involved in training Ukraine’s armed forces. In addition to specialized trainings for the crews for the Sandown-class, British Army units are providing basic training for thousands of recruits for the front lines.

Source: https://www.maritime-executive.com/article/royal-navy-tracks-russian-subs-off-coast-of-norway