October 2017

By Tamar Gegechkori

Over the past several decades, the strategic significance of the Arctic region of the North Pole has become a major field of international interest. With an estimated 13 percent of the world’s undiscovered oil and 30 percent of conventional natural gas resources, the region has generated strong competition among the Arctic players, which include Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States as the eight countries with sovereignty over the area.

In February of 2017, the United States took a significant step forward when the Coast Guard awarded a fixed-price design contract to five American shipyards, requiring them to examine the optimal design and realistic schedule of building a polar icebreaker. The program represents an advance that many have felt was long overdue. A recent report by the National Academies of Sciences, Engineering, and Medicine noted that the U.S.’s insufficient icebreaking capacity prevents it from protecting its interests, executing policies, and meeting its obligations in the Arctic and Antarctic regions. While the Coast Guard has been pushing hard for the funding of new polar vessels (ideally requiring three heavy- and three medium-scale icebreakers), the steep price estimates of over $1 billion USD per ship has been a significant deterrent. 

In contrast to the United States’ two operational icebreakers, which are both well over their intended 30-year service lives, Russia boasts 31 polar icebreakers, with 11 under construction and four more planned for the future. The Kremlin’s large-scale military exercises and planned expansion of its already substantial polar fleet has made Russian presence in the region increasingly harder to ignore. In 2014, Moscow established a new Arctic command to further facilitate and coordinate its military and scientific activities in the region. Present day uncertainty as a backdrop has further complicated U.S. strategy to detect, deter, prevent, and defeat threats in the Arctic.

Hence, the U.S. Coast Guard’s chosen approach. The design contracts awarded in February aim to provide realistic figures for future steps of acquisition – an attempt to preemptively decrease the high price-tag by implementing a “parent design” patent that allows an American shipyard to re-modify an existing icebreaker design to fit the Coast Guard’s specific scientific and military capability requirements.

This presents an interesting opportunity for U.S. companies to partner with overseas shipyards to work on their patent design, thereby saving time and money by not re-inventing the wheel. General Dynamics, which is one of the five awardees, has already partnered with the Norwegian ship designer and manufacturer Vard, and will be re-designing their patent for Coast Guard specifications.

As the 12-month period of design contracts slowly approaches its end, the U.S. Coast Guard is planning to release the final RFP (request for proposals) for three polar icebreakers by fiscal year 2018. With the delivery of a third and final ship by FY 2026, U.S. efforts to buttress its physical presence in, and access to, the strategic Arctic region is a launching point that many believe has been neglected for far too long. This also presents an opportunity for U.S. firms with a vision and an understanding of the procurement process, among other expertise.