Hurricane Michael hits coast guard's largest program, leaving devastation

A Coast Guard rendering of its new Offshore Patrol Cutter © breakingdefense.com

Amid the devastation wrought by Hurricane Michael last week is a family-owned shipyard the Coast Guard had just picked to work on the $10 billion Offshore Patrol Cutter program, the largest acquisition project in the service's history.

The Eastern Shipbuilding Group in Panama City took what amounts to a direct hit from the deadly storm. It overturned completed boats and damaged buildings and heavy equipment in the yard, and left the company's 800-strong workforce scattered, with some homeless. Officials in Florida estimate that 33 people have died from the storm and that toll is likely to keep rising.

It is unclear what effect the storm will have on the program, but the amount of damage inflicted and the repair work on several ships nearing completion in the company's yard would seem to indicate the path back will take some time.

Coast Guard spokesman Brian Olexy told me they are "in the early stages of gathering information about the post-hurricane situation at Eastern Shipbuilding Group," and personnel from the ship's project office are "focused on clean-up and re-activation." All 51 people, both military and civilian, working on the program are safe and accounted for, he confirmed.

A statement posted by company president Joey D'Isernia on the company's Web site yesterday asked employees to check in: "We would like to hear from you so we can know if you are OK and your current status and location."

Company officials said earlier in the week that about 100 of Eastern's 800 employees had managed to return to work, but many had lost their homes in the storm, so it was unclear when and if they could return to work in the near-term.

In his statement, D'Isernia said: "It is our mission to clean up both shipyards and get them back up and running as quickly as possible, and we need the help of each employee to accomplish this task. We are making great strides each day toward this goal."

While the company had only just started the process of building the first Coast Guard hull, the damage to other ships closer to completion signals a long road ahead. A new 261-ft. fishing trawler, the North Star, partially capsized during the storm and will have to be repaired before making its way to Alaska. In addition, two Staten Island Ferries were nearing completion and likely suffered some damage. The New York Department of Transportation has said it now expects the delivery of the first ferry, slated for 2019, to be delayed.

Eastern had not responded to a request for comment by publication.

The revelations of damage at the shipyard put the Coast Guard in a similar position as the Air Force and Navy, who are also assessing damage to their bases in the wake of the storm. Seventeen F-22 stealth fighter planes worth over $5 billion were damaged at Tyndall Air Base. At this point little is known about the aircraft beyond the fact they were in various states of repair before the storm struck, and Lockheed Martin has dispatched a team of engineers to determine how serious the damage is to the planes.

The storm and its aftermath also call into question how vulnerable critical military installations around the world and segments of the defense industrial base might be to the effects of climate change.

It was only on Sept. 28 that the Coast Guard awarded a $317.5 million option to Eastern to begin work on the first of 25 planned Offshore Patrol Cutters, a program to replace the service's aging fleet of 29 medium endurance cutters, some of which are 50 years old. The first cutter, USCGC Argus, is expected to be delivered in 2021.

The $10 billion Offshore Patrol Cutter effort is not only the largest acquisition program in Coast Guard history, but comes after Eastern was a surprise winner of the original competition in 2016.

In September of 2016, the Coast Guard announced the initial $2.4 billion contract with Eastern to build the first nine cutters with the potential to build two more. Competing for the work were Bath Iron Works, and Bollinger Shipyards. At the time it was thought Bath would protest the award, but the company declined.

"Recapitalization of the Coast Guard's aging fleet of vessels, aircraft, systems and support infrastructure remains one of my highest priorities as Commandant," Adm. Karl Schultz, Coast Guard Commandant, said in a statement when his service released the money last month. "Today's actions are a critical step towards delivering a fleet of Offshore Patrol Cutters that will provide Coast Guard men and women with the tools to enforce our laws, secure our maritime borders, and execute the full range of Coast Guard missions for decades to come."

And at the nearby Naval Surface Warfare Center in Panama City, testing of the Littoral Combat Ship mission modules and other unmanned systems the Navy is developing has been halted because of the hurricane.

The Navy's Capt. Danielle George, program manager for mine warfare, said earlier this week that "some of the buildings were damaged. Possibly some of the equipment that was in there ranging from government accepted test pieces of equipment to manufacturing capability for one-off parts for legacy systems" could be at risk.