LOCAL

Rep. Dunn requests Homeland Security probe into 'deeply troubling' Coast Guard allegations

The News Herald

PANAMA CITY — Insider knowledge might have been the reason Austal USA won a massive U.S. Coast Guard contract over Eastern Shipbuilding, according to Congressman Neal Dunn.

In a letter that Dunn sent Wednesday to Alejandro Mayorkas, secretary of the U.S. Department of Homeland Security, Dunn says Eastern Shipbuilding alleges a former Coast Guard commander with access to "non-public information" wrote Austal USA's proposal for the $3 billion contract it won over the Panama City shipbuilder on June 30. The letter was forwarded to The News Herald by Dunn's office.

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Rep. Neal Dunn wrote a letter to the U.S. Department of Homeland Security saying it appears Austal USA used insider knowledge to win a $3 billion U.S. Coast Guard contract over Eastern Shipbuilding.

The $3 billion contract includes the rights to ships five through 15 in the Coast Guard's 25-ship Offshore Patrol Cutter Program. Eastern was commissioned to build the first four ships in the program, three of which are under construction.

The Panama City company also was given the rights to the first 11 cutters in 2016, but that contract was reduced to four after Hurricane Michael destroyed much of Bay County in October 2018.

"This allegation is deeply troubling," Dunn wrote in an email. "Government contracts should be awarded fairly. They should be awarded to the company that can do the best job. I'm concerned that Austal secured this contract under false pretenses, and this will ultimately hurt our national security and cost the U.S. millions of dollars."

More allegations against Austal USA

In addition to Eastern's claims, Austal USA, a foreign-owned shipbuilder based in Alabama, has been investigated by the U.S. Department of Justice, the Securities and Exchange Commission, and Australian security regulators for its financial and procurement practices, according to an Associated Press article from February 2021.

In his letter, Dunn writes that after the former Coast Guard commander retired, he "was immediately employed by Austal USA" to write its proposal for the 11-ship contract. He also worked to assist the company "in winning" the contract, Dunn says.

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Dunn also says that after he reviewed the documents of Eastern Shipbuilding's protest against the Coast Guard's decision, "there appears to be compelling evidence that suggests (the former commander) had direct access to proprietary, business sensitive and non-public information while working for the Coast Guard."

Eastern alleges the former commander gathered the information while being involved in the Coast Guard's contract for the first four ships, as well as while helping prepare the bid process of ships five through 15.

This is one of four Heritage Class Offshore Patrol Cutters being built at Eastern Shipbuilding for the U.S. Coast Guard.

Dunn requested the U.S. Department of Homeland Security immediately conduct an investigation into the allegations.

"It appears that facts exist demonstrating the existence of serious ethical and conflict issues that the Coast Guard was either unaware of, or knew about but failed to address," he writes. "As a former Army officer, integrity and accountability are vital to the trust bestowed by the American people upon the military.

"... Instances or appearances of impropriety in any form call into question that trust. This is one of those instances which should not be dismissed lightly."