Eastern Shipbuilding Group announced the suspension of construction on two U.S. Coast Guard offshore patrol vessels. The company’s CEO, Joey Dizenia, stated that the firm is facing “significant financial strain caused by the program’s structure and conditions,” with unsustainable financial burdens and workforce reductions being the primary reasons for the halt.
This decision marks another setback in the modernization of the U.S. Coast Guard fleet. In July 2025, the U.S. Department of Homeland Security formally canceled the contract for two patrol vessels to be built by the Oriental Shipbuilding Group, effectively halving the project’s scope.
D’Isernia stated in the announcement: “Unfortunately, we also had to reduce our workforce—an extremely hard step, as our people are the strength of this company. This action allows us to remain financially stable and focused on delivering for our government and commercial customers.”
Oriental Shipbuilding Group initially secured the contract to design and build the first four offshore patrol vessels in 2016, with the project originally planned to construct nine vessels. However, Hurricane Michael in 2018 caused severe damage to the company’s facilities in Panama City, resulting in significant setbacks for the project. The contract was subsequently modified and split into two phases for implementation.
The first patrol vessel, originally scheduled for delivery in June 2023, has now been delayed until late 2026 at the earliest; the second vessel also failed to meet its April 2024 delivery deadline.
In July this year, U.S. Secretary of Homeland Security Kristi Noem announced the termination of contracts for the third and fourth offshore patrol vessels with the Eastern Shipbuilding Group. Earlier, the Department of Homeland Security reported that the Eastern Shipbuilding Group had notified the U.S. Coast Guard earlier this year that continuing to fulfill the original contract for all four offshore patrol vessels would result in “unbearable massive losses” for the company.
A senior Department of Homeland Security official stated at the contract termination: “We cannot allow critical shipbuilding projects to stall due to cost overruns and delays. The U.S. Coast Guard requires modern, high-performance vessels to safeguard national and economic security, and we will ensure every dollar is spent wisely.”
Despite the setbacks, D’Isernia remains optimistic about the company’s future. “Our shipyard will continue building high-quality U.S. vessels and supporting regional economic development. Having weathered the dual impacts of hurricanes and the global pandemic, we will overcome this challenge as well.”
In August this year, Eastern Shipbuilding Group was awarded a contract by Washington State Ferry to build two 160-vehicle hybrid-electric ferries, with an option for a third vessel. This marks a significant milestone in the electrification of the nation’s largest ferry system. The $714.5 million contract represents the state’s first publicly tendered ferry construction project in 25 years.
The patrol vessel project was transferred to Ausal USA
The U.S. Coast Guard’s Offshore Patrol Vessel program has been awarded to Austal USA, the American subsidiary of Australian defense shipbuilder Austal. In June 2022, Austal USA signed a contract with the U.S. Coast Guard for the detailed design and construction of up to 11 offshore patrol vessels, with a potential total contract value of $3.3 billion. In September of this year, the U.S. Coast Guard exercised a $314 million contract option to place an additional order with Austal USA for long-lead procurement materials for three patrol vessels.
Construction of the first offshore patrol vessel, the USS Pickering (WMSMS 919), built by Austal USA, is progressing smoothly and is scheduled to have its keel laid in December of this year; construction of the second vessel, the USS Icarus (WMSMS 920), began in August of this year.
This class of offshore patrol vessel measures approximately 109.7 meters in length, with a range of 10,200 nautical miles at a cruising speed of 14 knots and an endurance of 60 days. Primarily deployed beyond 12 nautical miles, it can be positioned in any area where national interests are at stake and where the unique authority and capabilities of the U.S. Coast Guard are required. This patrol vessel is designed to support U.S. national security strategy by fulfilling missions related to economic, social, environmental, and military security, including law enforcement, counter-narcotics operations, immigration interdiction, and search and rescue operations.
Not long ago, US President Trump officially signed the One Big Beautiful Bill Act. With the support of this bill, the US Coast Guard received nearly $25 billion in investment, marking the largest single funding commitment in the agency’s history, of which $4.3 billion will be used for offshore patrol boat projects.