Coast Guard saves taxpayers $1.7 million in purchase of long lead time materials for 6th National Security Cutter

Coast Guard Headquarters NewsWASHINGTON — The Coast Guard saved taxpayers $1.7 million as it awarded a contract option worth a total of $87.9 million to Huntington Ingalls, Industries, Inc., Friday to acquire long lead time material for the production and delivery of the Coast Guard’s sixth National Security Cutter.

The savings of $1.7 million was achieved by executing procurement and negotiation for the long lead time material within one year of that for the fifth National Security Cutter, which strengthened bargaining positions with vendors. That move, coupled with the increased value of the U.S. dollar to the euro, resulted in the decreased costs when compared to the January 2011 long lead time material costs for the fifth National Security Cutter.

This purchase of long lead time material one year before production also decreases the cost of the sixth National Security Cutter by allowing an earlier start of production, reduced inflation and a reduced gap in production between ships five and six.

The full production contract for the 5th National Security Cutter was awarded Sept. 9, 2011, only 10 months after that for NSC 4. The cost for the fifth National Security Cutter is nearly identical to the cost for the fourth, which is the first National Security Cutter purchased on a fixed contract.

“We have achieved a level of maturity and momentum in the NSC acquisition program that is yielding significant efficiencies,” said Coast Guard Commandant Adm. Bob Papp. “Maintaining this pace will allow us to deliver the remaining ships in this program at a cost savings of tens of millions of dollars each. This ultimately places American made, quality built, best value National Security Cutters in the hands of Coast Guard crews who need them to protect American security and prosperity.”

The contract option award includes materials such as critical main propulsion and navigation systems, generators, electrical switchboards, and major castings, using $75.9 million appropriated for this purpose in fiscal year 2012. Two sub-contract line item numbers will be established – one for valves worth $2.8 million and one for the Ships Integrated Control System valued at $9.1 million. Funding requested in the president’s fiscal year 2013 budget request supports this remaining $12 million, unless funding is made available sooner.

The Coast Guard’s first two National Security Cutters, the Bertholf and Waesche, have already demonstrated their operational capabilities during patrols conducted between July and December 2011 in which the two cutters interdicted illegal narcotics bound for U.S. shores with an estimated street value of $85.8 million. The advanced capabilities of the National Security Cutter led to its selection by Papp for deployment to the Arctic this summer to provide command and control for operations in the Beaufort and Chukchi seas.

For more than 220 years the U.S. Coast Guard has safeguarded America’s maritime interests – at home and around the world – protecting those on the sea, protecting the nation from threats delivered by sea and protecting the sea itself. The National Security Cutters are faster, better equipped, more durable, safer and more efficient than the 30- to 45-year-old cutters they replace.

The third National Security Cutter, the Stratton, was commissioned Saturday in Alameda, Calif.

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