Coast Guard Cutter Procurement: Background and Issues for Congress

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Aboard the state-of-the-art US Coast Guard Cutter 'James'

Instead of being amass breaking ice, this actually slices the ice. Lou Correa D-Calif. Correa, chairman of the subcommittee, was referring to the advance purchase of materials for the second Polar Security Cutter PSC. The Coast Guard is expected to award a contract for the detailed design and construction of the first PSC within a month and already has the funding.

Contract with Options vs. Block Buy Contract Another potential issue for Congress is whether to use a contract with options or a block buy contract to acquire the ships. As noted earlier, the baseline plan for the PSC program calls for acquiring ships using a contract with options, but Coast Guard and Navy officials are open to the idea of instead using a block buy contract to acquire the ships, and have requested information on this possibility as part of the request for proposals RFP for the PSC program that was released on March 2, The authority is now codified at 14 U.

Although a contract with options covers multiple years, it operates more like a form of annual contracting, and it does not generate the kinds of savings that are possible with a block buy contract. A congressionally mandated July National Academies of Sciences, Engineering, and Medicine NASEM report on acquisition and operation of polar icebreakers states the following emphasis as in original : 3.

Coast Guard Cutter Procurement: Background and Issues for Congress [October 26, 2018]

Recommendation: USCG should follow an acquisition strategy that includes block buy contracting with a fixed price incentive fee contract and take other measures to ensure best value for investment of public funds. Icebreaker design and construction costs can be clearly defined, and a fixed price incentive fee construction contract is the most reliable mechanism for controlling costs for a program of this complexity. This technique is widely used by the U. To help ensure best long-term value, the criteria for evaluating shipyard proposals should incorporate explicitly defined lifecycle cost metrics A block buy authority for this program will need to contain specific language for economic order quantity purchases for materials, advanced design, and construction activities.

A block buy contracting program with economic order quantity purchases enables series construction, motivates competitive bidding, and allows for volume purchase and for the timely acquisition of material with long lead times. It would enable continuous production, give the program the maximum benefit from the learning curve, and thus reduce labor hours on subsequent vessels The merger of Hyundai Heavy Industries Co.