Eastern Shipbuilding in Panama City awarded $10.5 billion Coast Guard contract
The economy of Panama City and Bay County got a huge boost Thursday after Eastern Shipbuilding landed a $10.5 billion contract to build two dozen new U.S. Coast Guard cutters.
"We're very happy to have this long term U.S. government work here in Bay County," said Brian D'Isernia, CEO of Eastern Shipbuilding.
"This is a game changer for Bay County," said Panama City Mayor Greg Brudnicki.
According to U.S. Senator Bill Nelson (D-FL), the contract to build 25 new Offshore Patrol Cutters could bring 2,000 jobs to the Panama City area.
"This is a big win for the people of Northwest Florida,” Nelson said. “The 2,000 new jobs that this contract will create will provide a significant boost to the local economy.”
"Anytime you have that much money coming into the community you're going to have more people to fill those jobs," said Brudnicki. "I mean the value of your property is going to go up, it's a economics thing."
"This is a big win for Bay County and for Florida! I want to applaud Eastern Shipbuilding on this big announcement and all the jobs it will bring to our state," Governor Rick Scott said in a statement sent to WJHG/WECP.
U.S. Senator Marco Rubio issued a statement on the contract and it's benefits for northwest Florida.
"This is great news for the Panhandle and Florida workers, and further validation of the good work Eastern Shipbuilding does in building reliable, state-of-the-art ships that will now become a part of the Coast Guard's fleet. I'm proud of the work Eastern does to further our maritime and national security, and I congratulate the talented men and women who work there on beating out strong competition from all over the country to secure this opportunity."
“The Offshore Patrol Cutter acquisition is the Coast Guard’s highest investment priority, and we are proud to announce this important milestone,” said Coast Guard Commandant Adm. Paul Zukunft in a statement. “The Offshore Patrol Cutter will replace our aging medium endurance cutters and provide the majority of offshore presence by the Coast Guard’s cutter fleet.”
At a cost of around $484 million per ship, it’s the largest contract the Coast Guard has ever awarded in its 226-year history.
Eastern Shipbuilding Group was selected to finalize its design and construct the first series of nine Offshore Patrol Cutters to replace the Medium Endurance Cutters currently in service.
The contract is initially for nine vessels with options for two additional vessels. The Coast Guard program goal is to build 25 Offshore Patrol Cutters having a potential total contract value in excess of $10 billion.
"Ultimately we'll end up with 25 vessels built over the next 20 years built here at Eastern Shipbuilding in Panama City," said D'Isernia.
Eastern Shipbuilding is a family held shipbuilding company. An employer in Bay County for over 40 years, Eastern currently provides jobs for more than 1,500 employees.
Six of those employee's are D'Isernia's sons.
"What a legacy to leave to six sons to devote their time and their life to doing a good job for the U.S. Coast Guard," said D'Isernia.
Since 2008, Eastern has spent more than $75 million in upgrading and expanding its facilities and shipbuilding capabilities to continue growing and meeting the needs of its commercial and government customers.
At the full ramp up of the OPC contract Eastern anticipates expanding its workforce with additional craftsmen and additional engineering and administration staff to fulfill the contract requirements. Eastern will also continue to provide quality vessels for commercial customers, maintaining its success and providing numerous jobs in the competitive, cost-conscious commercial shipbuilding market.
Initially, Eastern has been awarded the detail design effort with a value of approximately $110 million. Construction of the first vessel is expected to commence in 2018.
Securing this contract was based on Eastern’s reputation as an industry leader in the construction of mid-range tonnage commercial ships. With a record of delivering 149 out of 150 ships on time and on budget since 2002, Eastern’s performance record is unmatched.
Over the past 10 years, Eastern has delivered vessels, ranging from 80 feet to 433 feet in length, many with complexity comparable to the Offshore Patrol Cutter. Efficient, commercially based production processes ensure affordability in the construction of these Coast Guard vessels.
"We knew from the beginning, that the U.S. Coast Guard would appreciate our excellent performance record of on time delivery of high quality vessels built by our first-rate craftsmen,” said Joey D'Isernia, Eastern Shipbuilding president.
"We believe that the Coast Guard is going to get the best value for its money and the finest vessels to succeed in its mission,” added Brian D'Isernia.
The Coast Guard’s Program of Record, calls for procuring a total of 25 Offshore Patrol Cutters as replacements for the 29 Medium Endurance Cutters currently in service. Eight shipbuilders originally provided draft designs for the cutters. The Coast Guard down selected to five shipbuilders to refine designs. In 2014, the U.S. Coast Guard awarded firm fixed-price contracts to three shipyards to develop preliminary and contract design proposals for the project.
Eastern Shipbuilding was selected over the other finalists located in Louisiana and Maine.
The Coast Guard conducted a thorough evaluation of the three proposals based on technical, management, productivity, and price factors. Eastern’s design includes the following features: Length 360 Feet; Width 54 Feet; Speed in excess of 22 knots; Capable of carrying an MH-60R or MH-65 Helicopter; Capable of carrying three OTH small boats. The vessel also includes a highly sophisticated combat system and C4ISR communication suite which will allow the Coast Guard to continue to support and execute the Coast Guard’s missions.