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BIW Workers Reeling Over Loss of Coast Guard Contract

The president of the largest union at Bath Iron Works says workers are reeling from news that another shipyard was selected for a $10.5 billion contract to build a new generation of cutters for the Coast Guard. The decision to award the contract to a competitor with no experience in military shipbuilding has surprised industry observers.

The Coast Guard is expected to explain more about its decision to award the construction of 25 new cutters to Eastern Shipbuilding of Panama City, Florida, as early as next week. And Chris Cavas, Naval warfare correspondent at Defense News, will be among those watching.

“That Eastern won the contract I think surprised everybody — most people gave the inside track to Bollinger,” he says.

Cavas says Louisiana-based Bollinger Shipyards has a long track record of working with the Coast Guard, while this is Eastern’s very first government contract. Bath, Cavas says, has had a long relationship with the Navy, but hasn’t built a Coast Guard vessel since the 1930’s.

“The Coast Guard is very different in many ways. It has different sensibilities. It’s even maybe French Canadian versus French French. It’s similar but it’s not quite the same, and you can be off and not really know it,” he says.

Even so, Cavas says Bath was considered a strong contender for its quality of work and ability to build larger ships such as these. Others in the industry say the Coast Guard may simply be looking at the bottom line — Eastern’s bid is believed to have been significantly lower.

“There was a time when the government would pay a little bit more for a Bath-built ship because of the quality. Over time we’ve seen that go away because of the cost, right, wrong or indifferent,” says Rich Nolan, president of Machinists Union Local 6.

Nolan says the loss of the contract hurts BIW’s ability to diversify its shipbuilding portfolio and to lower costs for future bids on the next round of DDG destroyers for the Navy.

Democratic U.S. Rep. Chellie Pingree of Maine’s 1st District says there are implications beyond Maine, for the overall health of the shipbuilding workforce nationwide.

“You can’t just stop production and then a year later say, ‘Well I want to go hire a bunch of experienced workers,’ it’s not like that,” she says. “This is very complicated work and we need this experienced workforce, and we need it nationally, it’s not just a parochial Maine issue.”

But it could be an issue for the local economy and for many shipbuilders at BIW. The yard has said in the past that it would have cut 1,000 jobs if it failed to win the cutter contract — nearly a fifth of the current workforce.

BIW can issue a protest of the Coast Guard’s award decision. That would trigger a 100-day review process. And Maine’s Congressional Delegation says it will be taking a closer look at how the Coast Guard made its choice and at whether the winner will actually be able to deliver the goods.