Bollinger Shipyards, Inc. --- The Company Today 2008

With the September 26th, 2008 announcement from the United States Coast Guard that they had chosen Bollinger Shipyards, Inc of Lockport, Louisiana as the

successful contractor to design and build the Coast Guard’s newest cutter, “Sentinel” class, Bollinger starts the next chapter in their 62 year history.

The press release that Bollinger sent out promoting their award stated the facts about the contract award of a well fought solicitation from the United States Coast Guard. “Bollinger has been selected to design and construct up to 34 Fast Response Cutters “Sentinel” Class (FRC) for the Coast Guard. The FRC, a new generation of USCG patrol boats, is a replacement for the Coast Guard ISLAND Class cutters that Bollinger built almost a quarter century ago. “.

Information put out by the USCG took the announcement a bit further, revealing that the initial contract for the designing and construction of this new cutter would cost $88 million, and if all 34 vessels were constructed the value of the contract would be $1.5 billion.

The Bollinger FRC is a good looking vessel, measuring 153’-5” x 25’-5” x 8’5”, with a top speed over 28 knots. The vessel is reportedly state-of-the-art and will accommodate a crew of twenty-two for up to five days at sea on missions including search and rescue, drug and illegal migrant interdiction, homeland security and maritime defense. Bollinger reports that the first cutter will be delivered two years from contract award to its homeport in Miami, Florida. “The design standards of the Coast Guard are very demanding, but then again so are their missions,” said Bollinger’s CEO and Chairman Donald “Boysie” Bollinger. “At the peak of production Bollinger will be delivering a new cutter every eight weeks.”

Not being a newcomer to the construction of Patrol Boats for the USCG, Bollinger boasts that they have built every patrol boat in the USCG’s entire fleet of vessels. For the past 25 years Bollinger has built 124 patrol craft for the USCG. To have a better understanding of the make up of Bollinger and to see what qualifies them to spend potentially $1.5 billion of tax payer money you have to go back to their beginning.

What started as a dream in 1946 for founder Donald Bollinger to establish a business that would provide jobs for the area residents of South Louisiana and provide a service to the local marine industry has developed into an industry leader in commercial and government building and repairing of marine vessels.

The success story of Bollinger Shipyards has it’s share of industry downturns, but when you talk with chairman and chief executive officer Donald ‘Boysie” Bollinger, he will tell you that each time there was an industry challenge, the employees of Bollinger stepped up and pulled together to do whatever it would take to get the company over the hurdle at hand. Today, the Bollinger organization employs approximately 3,000 shipyard professionals, ranging from Naval Architects to fitters and welders.

Bollinger’s initial boat building and repair business did well through the 50’s into the 80’s. Then came the oil bust of 1984. Louisiana oil industry collapsed and the economy of the area soon followed. Donald “Boysie” Bollinger, son of Donald Bollinger, had worked his way up to become Chairman of the Board of the organization. He saw the slowdown in the oilfield work coming and took a risk to bid on a U.S. Coast Guard contract for new Patrol Boats. This was a big change from Bollinger’s core business of building commercial oilfield vessels, but Boysie knew his workers had the skills and could do the job if given the opportunity.

Bollinger was awarded the contract, which eventually meant they would build 49, 110 ft US Coast Guard “Island Class” cutters during the oilfield depression. This, along with their commercial repair programs, sustained the company moving through the 80’s into the 90’s.

During the 80’s and into the 90’s the shipyard industry would see its share of highs and lows from a big sector of the business, which is commercial oilfield business. The shipyard business is a very competitive business and during this period several of the South Louisiana and Texas industry shipyards did not have the diversity of Bollinger. The market presented opportunities and Bollinger took on the challenge to grow through acquisitions, growing and expanding their commercial and government new construction and repair facilities. The growth is seen in the chart below.

During this same time of growth, Bollinger continued its pursuit and success with contracts for the US Navy and US Coast Guard. A contract was secured with the US Navy for a total of 14 “Patrol Coastal” ships, and also a contract with the USCG for the 87-ft “Marine Protector” coastal patrol boats. Bollinger will deliver the 75th 87-ft coastal patrol boat to the USCG in 2009.

Projects with the US Government have not all gone according to plan for Bollinger. When Bollinger was a subcontractor to Northrop Grumman Integrated Coast Guard Systems on conversions to the Coast Guard ISLAND Class cutters in 2004, the initial eight vessels conversion had problems and the remaining program was cancelled, and the vessels removed from service. The ongoing investigation into this program is under review in Washington. Bollinger directed any questioning about this program to their prime contractor, maintaining their position as a subcontractor on this troublesome program.

From everything that we have read and researched, the Coast Guard’s Acquisition Directorate for the award of FRC followed a disciplined process to determine the award of the Sentinel Class patrol boat project, including a careful analysis of operational requirements; conducting worldwide market research; close consultation with Coast Guard technical authorities; use of third party independent review and an assessment of the most competitive designs put forth by industry in responses to the Coast Guard’s June 2007 solicitation. Other than the association with the program to lengthen the Island Class vessels, Bollinger has had an exemplarily record with the United States Government. Forty-nine “Island” Class cutters, fourteen “Cyclone” Class Cutters for the US Navy, and seventy-five “Marine Protector” coastal patrol cutters for the USCG. The decision for the USCG to once again go with Bollinger for this newest cutter, “Sentinel” class looks to be one that will continue the legacy of the success at Bollinger with the USCG and their commercial customers. This cutter contract alone will employee over 500 people in the Bollinger organization. Additionally, this contract will boost the local economy by employing additional services and contractors. Bollinger’s sustained growth has made them one of the regions top employers, with ample employment opportunities in the South Louisiana and Texas regions. With their new construction programs, and sustained growth in the repair and conversion shipyard business, Bollinger Shipyards looks to be a sure bet for growth and job security in to the next century.

Company Information: Privately owned and operated Bollinger Shipyards is a leading provider of new construction and other services to the offshore energy, commercial and government marine markets and is the largest vessel repair/conversion company in the Gulf of Mexico region with 35 dry-docks. Bollinger is a leading builder of offshore oil field support vessels, tugs, lifeboats, OPA’90 ocean-going barges, fast military patrol boats and other steel and aluminum products. Bollinger’s 13 shipyards are all strategically located between New Orleans and Houston, with direct access to the Gulf of Mexico, Mississippi River and Intracoastal Waterway.

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