Miss. Lawmakers Welcome $76.8 Million Contract Option for Next Coast Guard Cutter
Contract Option Allows Ingalls Shipyard to Begin Procurement for USCG National Security Cutter 7
June 14, 2013
WASHINGTON – U.S. Senators Roger Wicker (R-Miss.) and Thad Cochran (R-Miss.), along with Representative Steven Palazzo (R-Miss.), today welcomed a $76.8 million U.S. Coast Guard contract award to begin procurement of a seventh National Security Cutter (NSC).
The U.S. Coast Guard has exercised an option to an existing contract with Huntington Ingalls Industries to procure long lead time materials for the production of NSC 7. The $76.8 million will allow Huntington Ingalls to purchase material and components to support construction of the new cutter at its shipyard in Pascagoula.
“During a recent hearing, Coast Guard Commandant Adm. Robert Papp expressed his strong commitment to fund all eight National Security Cutters,” said Wicker, who has championed recapitalizing the Coast Guard’s aging fleet and prevented onerous requirements that would delay delivery and increase the cost of future National Security Cutters. “Today’s announcement is proof that the Coast Guard is keeping its word to Guardsmen and Mississippi’s shipbuilding workers in Pascagoula by obligating funds for NSC 7.”
“Securing long lead time materials ahead of time is a proven way to save on the cost of major shipbuilding projects, which is increasingly important as we confront budget challenges,” said Cochran, who was instrumental in obtaining the $77 million in long lead time materials funding during consideration of the FY2013 Homeland Security Appropriations Bill. “This award will put the Pascagoula shipyard in a good position to complete the seventh National Security Cutter when full funding is approved.”
“Providing certainty for our national security suppliers is key to cutting costs for the taxpayer and maintaining a stable workforce,” said Palazzo, who serves on the House Homeland Security Committee. “Our Pascagoula shipbuilders have a proud record of on-time and on-budget National Security Cutter deliveries, and today’s announcement ensures they are able to continue providing these invaluable maritime assets to the Coast Guard, the Department of Defense, and law enforcement.”
The contract modification represents the majority of the long lead time materials funding that will be needed for NSC 7. These resources will allow Ingalls shipyard to avoid a break in production and significant added costs, which would likely have occurred if Congress followed the President’s FY2013 budget request that did not recommend long lead time materials for this project.
Cochran, Wicker and Palazzo have used their committee assignments in support of the USCG goal, first outlined in 2005, to procure a total of eight NSCs as a minimum baseline needed to meet mission requirements. Long lead time materials allow shipbuilders to maintain the efficiencies associated with a one-ship-per-year rate of construction.
Cochran, a senior member of the Senate Homeland Security Appropriations Subcommittee, has successfully advocated for inclusion of NSC funding in administration budget requests, and in the FY 2012 appropriations bill, he helped add $77 million that was not in the President’s budget request for NSC 6 long lead time materials in order to guarantee work on that ship could begin. The Senator also pressured the administration to roll back a policy that would have delayed the execution of the NSC 6 contract by more than a year.
On May 1, Huntington Ingalls was awarded a $487.1 million “fixed-price incentive firm target contract” to provide the U.S. Coast Guard with NSC 6.
The Huntington Ingalls shipyard has already produced the first three NSCs for the Coast Guard and another two are under production in Pascagoula. NSC 4 is approximately 39 percent complete and NSC 5 is about 16 percent complete. The FY2014 budget request recommends $616 million to fully fund NSC 7.
The U.S. Coast Guard has exercised an option to an existing contract with Huntington Ingalls Industries to procure long lead time materials for the production of NSC 7. The $76.8 million will allow Huntington Ingalls to purchase material and components to support construction of the new cutter at its shipyard in Pascagoula.
“During a recent hearing, Coast Guard Commandant Adm. Robert Papp expressed his strong commitment to fund all eight National Security Cutters,” said Wicker, who has championed recapitalizing the Coast Guard’s aging fleet and prevented onerous requirements that would delay delivery and increase the cost of future National Security Cutters. “Today’s announcement is proof that the Coast Guard is keeping its word to Guardsmen and Mississippi’s shipbuilding workers in Pascagoula by obligating funds for NSC 7.”
“Securing long lead time materials ahead of time is a proven way to save on the cost of major shipbuilding projects, which is increasingly important as we confront budget challenges,” said Cochran, who was instrumental in obtaining the $77 million in long lead time materials funding during consideration of the FY2013 Homeland Security Appropriations Bill. “This award will put the Pascagoula shipyard in a good position to complete the seventh National Security Cutter when full funding is approved.”
“Providing certainty for our national security suppliers is key to cutting costs for the taxpayer and maintaining a stable workforce,” said Palazzo, who serves on the House Homeland Security Committee. “Our Pascagoula shipbuilders have a proud record of on-time and on-budget National Security Cutter deliveries, and today’s announcement ensures they are able to continue providing these invaluable maritime assets to the Coast Guard, the Department of Defense, and law enforcement.”
The contract modification represents the majority of the long lead time materials funding that will be needed for NSC 7. These resources will allow Ingalls shipyard to avoid a break in production and significant added costs, which would likely have occurred if Congress followed the President’s FY2013 budget request that did not recommend long lead time materials for this project.
Cochran, Wicker and Palazzo have used their committee assignments in support of the USCG goal, first outlined in 2005, to procure a total of eight NSCs as a minimum baseline needed to meet mission requirements. Long lead time materials allow shipbuilders to maintain the efficiencies associated with a one-ship-per-year rate of construction.
Cochran, a senior member of the Senate Homeland Security Appropriations Subcommittee, has successfully advocated for inclusion of NSC funding in administration budget requests, and in the FY 2012 appropriations bill, he helped add $77 million that was not in the President’s budget request for NSC 6 long lead time materials in order to guarantee work on that ship could begin. The Senator also pressured the administration to roll back a policy that would have delayed the execution of the NSC 6 contract by more than a year.
On May 1, Huntington Ingalls was awarded a $487.1 million “fixed-price incentive firm target contract” to provide the U.S. Coast Guard with NSC 6.
The Huntington Ingalls shipyard has already produced the first three NSCs for the Coast Guard and another two are under production in Pascagoula. NSC 4 is approximately 39 percent complete and NSC 5 is about 16 percent complete. The FY2014 budget request recommends $616 million to fully fund NSC 7.
