04.17.07

Coast Guard Will Implement Some of Changes Called for by Cantwell to Fix Deepwater

Cantwell will continue pushing for additional changes outlined in her Deepwater legislation; Coast Guard will drop lead systems integrator

WASHINGTON, DC - Tuesday, the Coast Guard announced its decision to implement significant changes to the Deepwater fleet replacement program, including many of the changes called for in legislation introduced last month by U.S. Senator Maria Cantwell (D-WA). The Coast Guard will take over the lead systems integration role currently filled by ICGS, increase its use of third parties to review the project, and take control of future repairs and logistics upgrades on Deepwater ships. Cantwell's comprehensive legislation calls for these steps, as well as several other vital steps needed to truly fix the program. Cantwell will continue working to move her legislation through Congress to implement remaining steps, codify all of the bill's provisions into law, and further improve transparency and oversight so taxpayers get a fair deal and Coast Guard personnel get the assets they need.

"The changes announced today need to be paired with all the comprehensive transparency, oversight, accountability, and best practice requirements called for in my legislation," said Cantwell, Chair of the Senate Coast Guard Subcommittee. "The Coast Guard can't pick and choose elements from this bill and ignore others that many government reports have called essential. Congress will not wait to put in place the safeguards and proven best practices needed to ensure success. If the Coast Guard is moving forward, we must make sure we implement all the changes needed to make this work, really get the program back on track, and secure the assets the Coast Guard needs without wasting taxpayer dollars."

In addition to announcing plans to take over the lead systems integration role, increase its use of third party reviewers, and assume future repair and upgrade responsibility, the Coast Guard said it will work with ICGS to resolve issues with the first two National Security Cutters (NSCs). This responds to a March 14, 2007 letter Cantwell and Subcommittee Ranking Member Olympia Snowe (R-ME) sent to Coast Guard Commandant Thad Allen calling on him to work with the Justice Department to ensure taxpayers are not burdened with NSC cost overruns. In a second letter, Cantwell and Snowe asked the Department of Homeland Security (DHS) Inspector General to review and report on the Coast Guard's plans to hold ICGS accountable for failures to meet contract requirements.

In addition to codifying important improvements into law, Cantwell's comprehensive Integrated Deepwater Program Reform Act (S. 924), cosponsored by Snowe, contains several key steps not yet addressed by the Coast Guard or included in Tuesday's announcement. These include:

  • Requiring a third-party entity with expertise in major acquisitions to review all proposed Deepwater assets for which contracts have not yet been issued and determine the best way to procure these assets; this third-party entity would also conduct a broad analysis of the assets the Coast Guard needs to complete its mission, and determine how the Coast Guard can best acquire these assets
  • Requiring the Coast Guard to certify to Congress, prior to issuing new contracts for proposed acquisitions, that the proposed technology meets feasibility, design, mission, and cost objectives; a similar requirement currently applies to Defense Department contracts
  • Authorizing the Coast Guard to shift personnel to its acquisitions staff
  • Improving the Coast Guard's management of Deepwater by implementing recommendations made in the Coast Guard's Blueprint for Acquisition Reform, as well as recommendations for improved management included in a February 5, 2007 Defense Acquisition University (DAU) report
  • Requiring the Coast Guard to provide significant additional information to Congress on the status of Deepwater, and requiring the Government Accountability Office (GAO) to closely monitor the Coast Guard's implementation of the legislation's requirements

Since taking over as Subcommittee Chair, Cantwell has worked aggressively to fix Deepwater. In February, she chaired the first Senate hearing on the program, and heard testimony from Coast Guard Commandant Admiral Thad Allen, DHS Inspector General Richard Skinner, Deepwater contractors, and retired Coast Guard engineer Kevin Jarvis. In March, Cantwell introduced her comprehensive legislation to fix Deepwater. In developing the legislation, Cantwell worked with the Coast Guard and took into account recommendations by the DHS Inspector General, the Defense Department's DAU, and the GAO. Cantwell also met with Commandant Allen on several occasions. Her legislation would ensure open competition for future Deepwater contracts, end Coast Guard reliance on ICGS, mandate better technical oversight by Coast Guard engineering staff, and improve internal Coast Guard management of Deepwater.

"The Coast Guard is getting the message and it's clear they've been listening as we've been writing our legislation, but we still have work ahead," Cantwell continued. "I'll continue pushing for a third-party analysis of alternatives for all future Deepwater assets, and to get real changes codified into law."

Deepwater—a partnership between the Coast Guard and a joint venture by Lockheed Martin and Northrop Grumman, known as Integrated Coast Guard Systems (ICGS)—is a 25-year, $24 billion initiative to replace the aging fleet of Coast Guard assets used in missions more than 50 miles from the coast. The program is plagued by cost overruns, design flaws, ships and technology that fail to meet contract requirements, and a contract structure that strips the Coast Guard of oversight and decision-making authority.

So far, eight 123-foot patrol boats converted under the Deepwater program are out of service—a waste of $100 million. After spending $25 million, the Coast Guard suspended the Fast Response Cutter project because the contractors' design failed to meet testing requirements. The National Security Cutter—the largest of the new Deepwater ships—is over budget and the current design fails to meet Coast Guard performance goals. Deepwater's Unmanned Aerial Vehicle, Eagle Eye, has significant delays and the prototype crashed. Mistakes have cost taxpayers hundreds of millions of dollars and delays have forced the Coast Guard to rely more heavily on outdated equipment.

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