U.S. Department of Homeland Security Secretary Kristi Noem announced the partial termination of a contract with Eastern Shipbuilding Group (ESG) for the construction of Offshore Patrol Cutters (OPCs) to reduce taxpayer expenditure and boost Coast Guard readiness, according to DHS.gov's release.
The contract for four OPCs, based in Panama City, Florida, was found to be “wasteful of taxpayer’s money” due to significant delays.
Delivery of OPC 1, originally scheduled for June 2023, is now expected by the end of 2026 at the earliest.
OPC 2, due in April 2024, has also been missed.
Work on OPCs 3 and 4 has stopped after ESG indicated it could not meet contractual obligations without substantial losses.
A senior DHS official stated: “This Administration is unwavering in its commitment to the American taxpayer and to a strong, ready Coast Guard. We cannot allow critical shipbuilding projects to languish over budget and behind schedule… ensuring every dollar is spent wisely”.
Despite the partial cancellation, the Coast Guard aims to procure the full fleet of 25 OPCs.
The program supports layered maritime security alongside National Security, Fast Response, and Polar Security Cutters, with a focus on counter‑drug and migrant interdiction operations on the southeast border.
Highlighting a recent increase of nearly $25 billion in Coast Guard funding through the “One Big Beautiful Bill” and Force Design 2028, the statement noted the move ends decades of underfunding and neglect.
U.S. Department of Homeland Security (DHS) oversees national security and domestic defense agencies, including the Coast Guard. It manages federal initiatives to protect U.S. borders, enforce cybersecurity, and coordinate disaster response. DHS holds contracting authority and allocates budgets for maritime assets.
Eastern Shipbuilding Group (ESG) is a Florida-based shipbuilder contracted in 2016 by the U.S. Coast Guard to construct Offshore Patrol Cutters. Its facilities in Panama City have faced delays; despite prior commitments, ESG has fallen behind on delivering four OPCs, citing potential financial losses.