Cantwell Calls Deepwater Problems "Fleecing of the Taxpayer with Ships that Don't Float"

Cantwell Calls Deepwater Problems "Fleecing of the Taxpayer with Ships that Don't Float"

Cantwell demands immediate change in approach to Deepwater contract, pledges to be an ally to Coast Guard, deliver needed assets

Wednesday, during an oversight hearing she chaired on the Coast Guard's troubled Deepwater initiative, U.S. Senator Maria Cantwell (D-WA) made it clear she expects the Coast Guard to work with Congress to find a solution to the program's problems. 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 beset by cost overruns, serious design flaws, ships and technology that fail to meet basic contract requirements, and a contract structure that takes oversight power away from the Coast Guard and gives primary decision-making authority to ICGS.

"Four recent independent reports now show us that Deepwater is in deep trouble," Cantwell, chair of the Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard. "This is the fleecing of the taxpayer with ships that don't float. The Deepwater program is not delivering as promised and has cost taxpayers hundreds of millions more than it should. The contract gives industry too much authority, offers them little incentive to control costs, and sidelines the Coast Guard when it comes to oversight. We are here to figure out a solution to get the Coast Guard the assets it needs, and we're going to do it in broad daylight, without playing a blame game, and without wasting any more taxpayer dollars."

Major problems with Deepwater include:

- The 123-foot patrol boat conversion has failed and eight of the converted patrol boats are now 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 and construction fails to meet the Coast Guard's performance goals.

- Deepwater's UAV, Eagle Eye, has huge delays, and the prototype crashed.

- Mistakes have cost taxpayers hundreds of millions of dollars, while delays have forced the Coast Guard to rely more heavily on outdated equipment that was not built for post-9/11 missions.

At Wednesday's hearing—the Senate's first on Deepwater—Cantwell heard testimony from Coast Guard Commandant Admiral Thad Allen, Department of Homeland Security (DHS) Inspector General (IG) Richard Skinner, and Stephen Caldwell of the Government Accountability Office (GAO). She also questioned Vice President and General Manager Dr. Leo Mackay of Lockheed Martin Maritime Systems and Sensors, Phillip Teel of Northrop Grumman Ship Systems, and Captain Kevin Jarvis, a retired Coast Guard engineer who worked extensively on Deepwater.

Recent reports from DHS and the Defense Department have detailed Deepwater's many missteps. The Defense Department's Defense Acquisition University released a report calling the overall Deepwater approach inappropriate and recommending fundamental changes to the program. Citing a contract structure that minimizes the use of other U.S. industry and Coast Guard support infrastructure, the report recommended a revised acquisition strategy that does not rely on a single industry entity. A January 29 report by the DHS IG examined the National Security Cutter (NSC) portion of Deepwater. In addition to concluding that the NSC will not meet its contract requirements, the IG report raises serious questions about the entire Deepwater program. Wednesday, the IG released a second report analyzing key concerns with the Coast Guard's 123-foot cutter conversion. An additional GAO report focusing on some of these same issues is due out later this month.

The Deepwater program is the Coast Guard's initiative 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. 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. However, cost overruns, design flaws including hull cracking, and a lack of oversight by the Coast Guard and ICGS have plagued the program since its inception.

Cantwell has consistently supported Coast Guard modernization efforts, but has expressed deep concern over contractor oversight, the sole-sourcing contracting model, specific projects, and other issues in letters requesting GAO reports, as well as in questions at a June 21, 2005 subcommittee hearing on Deepwater and to Coast Guard Commandant Thad Allen at a June 15, 2006 Coast Guard budget hearing.

Seattle is homeport to the Coast Guard's 13th district, which includes more than 6,000 active and reserve, military, civilian, and retired men and women. Washington is home to 15 Coast Guard ships—including four Deepwater ships. Three helicopters operating out of Port Angeles—also part of the Deepwater program— saved 39 lives in 2006. The Coast Guard is charged with protecting ports in the Seattle-Tacoma area, which are the third-busiest in the nation, handling more that 11,000 cargo containers each day.

http://cantwell.senate.gov/news/record.cfm?id=269289