02.12.07

Cantwell Says Latest Report on Deepwater Program Shows Need for Real Answers and New Direction

Cantwell to chair hearing set for Wednesday; report by Defense Dept. acquisition experts calls for fundamental changes to program

WASHINGTON, DC - Monday, in response to a new Defense Department analysis of the Coast Guard's flawed Deepwater acquisition program, U.S. Senator Maria Cantwell (D-WA) said the report showed the urgent need for fundamental changes to make sure the Coast Guard has the ships, planes, and technology it needs without further waste of taxpayer dollars. This is the second major report in less than a month to raise serious questions about the Deepwater program—a partnership between the Coast Guard and a joint venture of Lockheed Martin and Northrop Grumman, which is known as Integrated Coast Guard Systems (ICGS). The Deepwater program seeks 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, delivery of ships and technology with serious design flaws that do not meet contract terms, and a contract structure that takes oversight power away from the Coast Guard and gives primary decision-making authority to ICGS. As chair of the Senate Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard, Cantwell will chair a hearing on Deepwater this Wednesday.

"This report raises serious concerns about the overall approach to management, oversight, and execution of the Deepwater program," said Cantwell. "We need to find out from the Coast Guard and ICGS how they plan to get this program back on track. The Coast Guard needs to complete its missions safely and effectively, and taxpayers need to get what they're paying for. If the changes suggested by this report are needed, including overhauling the contracting approach, Congress will work with the Coast Guard to make sure this happens."

The study by the Defense Department's Defense Acquisition University at the request of the Coast Guard finds the Deepwater program approach inappropriate and recommends fundamental changes, including changes to acquisition strategy, acquisition personnel, contract structure, and contract management. Saying that the "emphasis on work sharing among the joint venture partners has minimized the use of other US industry and existing USCG support infrastructure," the report recommends the Coast Guard "implement a revised acquisition strategy that does not rely on a single industry entity or contract to produce or support all or the majority of USCG capabilities." The report will be a centerpiece of the hearing as Cantwell works to get answers from all the stakeholders on how to move forward with the Deepwater program.

The Deepwater program is the Coast Guard's $24 billion effort to modernize its aging fleet—most of which dates from the 1950s and 1960s—of approximately 90 cutters and 200 aircraft used in missions more than 50 miles off the coast. It is the largest procurement effort in the Coast Guard's history. Through Deepwater, the Coast Guard plans to acquire three major classes of new cutters, new small boats, new or upgraded aircraft, modernized helicopters, and unmanned aerial vehicles (UAVs), all linked by state-of-the-art command, control, and communication systems.

An earlier report released by the Department of Homeland Security (DHS) Inspector General (IG) on January 2, 2007 examined the National Security Cutter (NSC) portion of the Deepwater program. In addition to its conclusions that the NSC will not meet its contract requirements, the IG's report raises serious questions about the entire Deepwater program. In addition to this first report on the NRC, the IG will soon release a second report analyzing key concerns with the Coast Guard's 123-foot cutter portion of the fleet modernization program. An additional Government Accountability Office (GAO) report focusing on some of these same issues is due out later this month.

Cantwell has consistently supported the Coast Guard's modernization efforts, but has expressed concern over contractor oversight, the sole-sourcing contracting model, specific projects including the NSC and Fast Response Cutter, and other issues in letters requesting GAO reports, as well as in questions to Coast Guard Commandant Thad Allen at a June 15, 2006 hearing.

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