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PANAMA CITY − U.S. Rep. Neal Dunn continues challenging a foreign-owned company connected to a controversy involving a local shipbuilder.
In a news release from Dunn’s office, the Republican congressman representing Florida’s second district addressed recent news that three senior executives of Austal Limited allegedly “manipulated financial information to cover up not meeting target goals on U.S. Navy projects.” He also said the company should not be trusted with government contracts.
The Australian-based corporation is the parent company of Austal USA, an Alabama shipbuilder selected in 2022 over Eastern Shipbuilding for a more than $3 billion U.S. Coast Guard contract.
“The news of Austal executives lying and covering up vital information is not the least bit shocking,” Dunn said in the release. “This company has a history of missing deadlines and underquoting costs. I urge the U.S. Navy and U.S. Coast Guard to stop working with Austal.”
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For background, the massive contract awarded to Austal USA in 2022 was for the rights to build ships five through 15 in the the Coast Guard’s Offshore Patrol Cutter Program. The ships are part of a $10.5 billion project with the Coast Guard to build up to 25 Heritage Class Offshore Patrol Cutters − vessels that span about 360 feet in length and are able to navigate deep waters for up to 60 days.
Eastern Shipbuilding was commissioned to build the first four cutters in the program. The Panama City company also was given the rights for the first 11 ships in 2016, but that contract was reduced to four after Category 5 Hurricane Michael devastated Bay County and other parts on the Panhandle in October 2018.
Eastern officials have said they think Austal USA’s bid for the latest Coast Guard contract was unrealistic. They also have noted Austal USA does not have experience building steel hull ships. The company instead is known for building aluminum ships for the Navy.
Prior to receiving the Coast Guard contract last year, the foreign-owned Alabama shipbuilder was commissioned by the Navy to build Littoral Combat Ships, which the release from Dunn’s office notes were “plagued by cracked hulls, broken equipment and technologies that do not work.”
Since delivering these ships, Austal USA was awarded both the Coast Guard contract and another Navy contract to build nuclear submarines, the release notes.
According to Dunn’s office, the U.S. Securities and Exchange Commission on March 31 announced Craig Perciavalle, the former president of Austal USA; Joseph Runkel, acting director of financial analysis for the company; and William Adams, the former director of Austal’s Littoral Combat Ships program, were charged with “orchestrating a fraudulent revenue recognition scheme that allowed its parent company to meet or exceed analyst expectations.”
Dunn has been very public in his attempt to challenge Austal USA and its foreign-owned parent company.
He has sent multiple letters to the Department of Homeland Security in attempts to overturn the Coast Guard’s decision to go with Austal USA for the $3 billion contract. He also recently highlighted national security concerns related to the similarities between the Navy’s Littoral Combat Ships and the Chinese equivalent during the first hearing of the select committee on the strategic competition between the United Stations and the Chinese Communist Party. And he has sent multiple letters to the Biden Administration urging an investigation into Austal’s relationship with China.
“This deceitful company should not be trusted with producing our nuclear submarines and U.S. Coast Guard offshore patrol cutters,” Dunn said in the release.
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