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Members of the House panel overseeing the Coast Guard universally praised the commandant, Adm. Thad Allen, Tuesday for his moves to take control of the troubled Deepwater acquisition program, but expressed concerns that the service did not have enough trained procurement specialists to successfully manage the complex $24 billion effort.

House Transportation and Infrastructure Coast Guard Subcommittee Chairman Elijah Cummings, D-Md., also questioned whether Allen's bold leadership would be enough to overcome the mistakes by the previous Coast Guard leadership and the contractors responsible for producing the Deepwater ships, aircraft and systems.

"The failures already registered in Deepwater are simply unacceptable," Cummings said.

Those views were echoed by Coast Guard Subcommittee ranking member Steven LaTourette, R-Ohio, and other panel members.

Allen described the extensive changes to the Deepwater program and the Coast Guard procurement system he has ordered since becoming commandant last year and assured the panel "we're on the leading edge of significant changes in the program and are already beginning to see real results."

But he also acknowledged the program still faced a lot of challenges.

The subcommittee's concerns were reinforced by Richard Skinner, the Homeland Security Department's inspector general, who said the "sweeping changes" Allen is making "should mitigate many of the cost, schedule and performance risks" in Deepwater. But Skinner also questioned whether the Coast Guard had enough procurement experts to replace the contractor team of Lockheed Martin Corp. and Northrop Grumman Corp. as the lead systems integrator.

And he warned that the Coast Guard's plan to deal with structural flaws in the design of the National Security Cutters, the largest ships being acquired under Deepwater, "could be cost prohibitive" and force reductions in the capabilities of the NSCs or major cuts in other required systems.

Allen told the panel that the Coast Guard has identified design changes that will correct problems in the first NSC that could shorten its expected 30-year service life. Those changes will be made to the next six NSCs as they are built and will be retrofitted into the first two, which are partly constructed, he said.

Although Coast Guard engineers had questioned Northrop Grumman's plans for the NSCs, Allen admitted the government would have to pay for the design changes.

Skinner said the Coast Guard was negotiating with Northrop Grumman to make those changes before it knew how much they would cost.

He said the first two cutters already would cost "well beyond" the estimated $775 million each, not counting the $302 million additional pay the contractor has requested because of changes in the NSC schedule.

Future changes could add hundreds of millions of dollars more, Skinner said, and could require reductions in other ships now planned.

He urged the Coast Guard to delay any commitment for future work on the NSCs until it knew the total costs.

Skinner also cited hundreds of millions of dollars spent on proposed unmanned helicopters "with little to show for it;" the nearly $100 million spent to convert eight 110-foot patrol boats that had to be scrapped, and apparent flaws in expensive electronic systems obtained through Deepwater.

Allen said the Coast Guard will demand that the contractors repay the cost of converting the defunct 110-footers, and Cummings said he wanted to ensure that the taxpayers get back "every dime, every penny."

COMMENTS

• All this talk about using Navy/DOD assistance requires a review of the success and bona fides of Navy Acquisition. LCS - not a good example, LPD - ok but not great, JSF - whoa, and the list goes on...show me the expertise in DOD acquisition management that has not breached the big three - cost, schedule and performance...each agency has their challenges and the CG needs to learn from it's mistakes. The CG's contract leadership needs an overhaul and the organization needs to continue to professionalize it's PMs. CG leadership needs to to trust those acquisition professionals. Then the PM needs to be in charge of the acquisition with the contracting organization in support not in the lead in major systems acquisitions. Project Manager Posted June 22, 2007 12:06 PM
• The Coast Guard is clearly headed for the rocks on the deepwater acquisition program. They've announced big re-org plans, but no timelines or requirements for buying the new equipment the Coast Guard needs. The dismal program management failures Dan refers to are the CG's obvious inability to rein in requirements and manage their contract. "Yanking back control" from who?? Industry can only do what they are under contract to do, and they are taking the heat in the media and on Capitol Hill for doing it. It's the CG that has been managing this program--and badly. And it's the CG that has to answer for spending my taxpaying dollars. The last thing I want to fatten my tax bill is staffing up a CG acquisition directorate. Give it to the Navy. Just because the CG men and women can think on their feet in a crisis using axes and rowboats, that clearly doesn't qualify the service for professional acquisition and program management. Gail J. Posted June 20, 2007 10:36 AM
• The CG does have some significant experience on the aircraft side of the house in E-City, NC. Several major refurbishments of C-130 and HH-60's have exposed them to long term contracting as well as engineering capabilities. In fact, they have one of the best KO's down there who did work a number of years with the Navy and was quite dynamic with them. When he came to ARSC, he revamped procurement and made it a very professional organization. I know this personally because I worked there as a branch chief for a few years. Commandant Allen has always been a straight shooter and a man of the utmost integrity and honesty. If anyone can pull this fiasco out of the dump...he can. CG Assets are really old. In the Great Lakes area, some of the cutters there had their keels laid during WWII. FRAMs out the wazoo kept them in service long after their service lives were passed. The CG is like the Marines in some respects. They do so much with so little that no one seems to notice them until a mistake is made. They take it on the chin instead of complaining that the assets they have are old, unreliable and antiquidated and are actually a detriment to the mission rather than an asset. Bill Posted June 20, 2007 9:56 AM