Bath Iron Works has lost out on a nearly $11 billion contract with the United States Coast Guard to build 9 Offshore Patrol Cutters (OPC).

The Coast Guard announced on Thursday that it had awarded the contract to build the lead OPC and up to eight others to Eastern Shipbuilding Group, Inc., of Panama City, Florida. The shipyard was one of three, including BIW, that submitted bids to design and build the cutters.

“The Offshore Patrol Cutter acquisition is the Coast Guard’s highest investment priority, and we are proud to announce this important milestone,” said Commandant of the Coast Guard Adm. Paul Zukunft in announcing the decision. “The Offshore Patrol Cutter will replace our aging medium endurance cutters and provide the majority of offshore presence by the Coast Guard’s cutter fleet. Whether combating transnational organized criminal networks off Central America or patrolling in the increasingly accessible Arctic, the Offshore Patrol Cutter will ensure our Nation’s maritime security and economic interests are preserved for decades to come.”

BIW had negotiated vigorously with its unions to cut costs prior to submitting its bid. The largest of the three shipyards vying for the contract, BIW hoped that these cost-cutting efforts could help it remain competitive with the smaller, and generally cheaper, shipyards.

“We worked hard to submit a bid to the Coast Guard which we hope will be competitive enough to prevail over two other smaller, more nimble shipbuilders,” wrote Fred Harris, president of BIW, in an August newsletter. “Our ability to offer a realistic and strong bid was a direct result of the progress we made working together with Local S6 to make important changes here at BIW.

The loss of the contract, however, could signal workforce reduction. In a 2015 statement, Harris had stated that over 1,000 employees could be laid off if they did not receive the contract. The loss of the contract could also affect future bids. The Coast Guard contract would have helped lower overhead costs for the shipyard, helping them to submit a lower bid for DDG 51 multi-year contract which it plans to submit early next year.

“We plan to meet with the Coast Guard to understand their selection decision,” said Harris in a statement Thursday.

Maine Senators Susan Collins and Angus King released a joint statement expressing disappointment with the decision.

“We are deeply disappointed by the Coast Guard’s announcement and believe that Bath Iron Works, with its outstanding shipbuilding record, would have delivered nothing but the best, highest-quality cutters to the Coast Guard,” said Collins and King. “We intend to evaluate the details of the award to ensure that the Coast Guard properly met all of its decision criteria, and we will continue to do all that we can to support the highly-skilled men and women at BIW who do so much to support our nation’s security.”

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