US DHS axes partial US Coast Guard cutter contract in move to reduce costs

July 15, 2025, by Fatima Bahtić

US Department of Homeland Security Secretary Kristi Noem has announced the partial termination of a “wasteful shipbuilding contract” that was awarded to Florida-based shipbuilder Eastern Shipbuilding Group (ESG) for US Coast Guard vessels.

Eastern Shipbuilding Group render of the OPC design

As part of that commitment, the US Coast Guard is reviewing contracts that are failing to meet delivery agreements. An existing offshore patrol cutter (OPC) contract with Eastern Shipbuilding Group has been slow to deliver four OPCs, Noem highlighted. This harms “the U.S.’s defense capabilities and wasting American’s hard-earned money”.

In light of that, Secretary Noem partially canceled ESG’s contract for two out of the four OPCs expected from ESG in Panama City, Florida, because it was not “an effective use of taxpayer money”.

ESG’s delivery of OPC 1 was initially due in June 2023 but will now be completed by the end of 2026 at the earliest. The shipbuilder missed its April 2024 delivery for OPC 2.

The US Coast Guard stopped work on OPCs 3 and 4 after ESG notified the service earlier this year that it could not fulfill its contractual duty to deliver all four OPCs without unabsorbable loss.

The US Coast Guard’s goal is to procure 25 OPCs. The fleet will complement the capabilities of the Service’s national security cutters, fast response cutters and polar security cutters as an essential element of the Nation’s layered maritime security strategy.

They will be especially critical to the counter-drug and migrant interdiction missions along the southeast border, it was concluded.