November 26, 2019

Key Committee Lawmakers Question How DHS Granted Relief to Shipbuilder

Washington, D.C. –Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), Full Committee Ranking Member Sam Graves (R-MO), Chair of the House Subcommittee on Coast Guard and Maritime Transportation Sean Patrick Maloney (D-NY), and Subcommittee Ranking Member Bob Gibbs (R-OH) sent a letter to Acting Secretary of the Department of Homeland Security (DHS) Chad Wolf expressing concern over DHS’ proposal to give Eastern Shipbuilding Group (ESG) extraordinary relief from its fixed price contract to construct the Coast Guard’s Offshore Patrol Cutter (OPC), stating their skepticism that “such truly extraordinary relief is justified given that this ‘crisis’ was foreseeable and mostly avoidable.”

In the letter, the Members expressed their bipartisan concerns over the exception being made for ESG and the shrouded manner in which DHS determined that such relief was warranted; relief which should be reserved for only the most extraordinary circumstances. This recent decision raised a number of concerning questions, including why DHS allowed ESG to proceed with the contract when doing so would require up to $659 million in additional federal funding and how DHS determined the need to cap the ESG contract at the first four OPCs and to re-compete the contract to build the balance of the remaining OPCs under the existing contract. These are just some of the questions that must be answered in order for Congressional authorizers, who have direct oversight over the Coast Guard, to have confidence in the future of the OPC contract and the ultimate construction of these vessels which are essential to the Coast Guard’s ability to carry out its important missions.

“The Committee is concerned that the Coast Guard, along with DHS, embarked on exploring options to resuscitate ESG and prevent it from defaulting on the OPC contract without first completing a transparent and objective alternatives analysis. Additionally, the veil of secrecy regarding its analysis and the absence of any meaningful consultation by the Coast Guard and DHS with the Committee, provides us scant confidence that any revised OPC contract will not encounter a similar fate as the original contract,” the Members wrote.

A full copy of the letter can be found here.