Integrated Deepwater Program Reform Act

INTEGRATED DEEPWATER PROGRAM REFORM ACT -- (House of Representatives - July 30, 2007)

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Mr. CUMMINGS. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, the Integrated Deepwater Program Reform Act, H.R. 2722, which I authored in my capacity as the chairman of the Subcommittee on Coast Guard and Maritime Transportation, is a critical piece of legislation that will strengthen the management of the Coast Guard's Deepwater procurement program.

H.R. 2722 passed both the Subcommittee on Coast Guard and Maritime Transportation and the Committee on Transportation and Infrastructure on a voice vote and has enjoyed bipartisan support from the members of both the subcommittee and the full committee.

I wish to express my deepest appreciation to Chairman JAMES OBERSTAR for his leadership and support on this measure, and, indeed, for his leadership of our committee.

I also express my appreciation to the ranking member of the full committee, Congressman Mica, and the ranking member of the subcommittee, Congressman LaTourette, for their leadership and the commitment they have shown to the success of our United States Coast Guard through their work on the bill before us today.

Further, I wish to thank Chairman BENNIE THOMPSON for his wise counsel on this bill and for working with us to get this bill to the floor today.

Deepwater is a $24 billion, 25-year procurement effort through which the Coast Guard will replace or rehabilitate all of its cutters and aircraft. Management of the program was awarded in 2002 through a performance-based contract to a private sector team comprised of Lockheed Martin and Northrop Grumman, now known as the Integrated Coast Guard Systems or ICGS.

Unfortunately, some of the procurements conducted under Deepwater over the past 5 years have experienced unacceptable failures that have delayed the production of needed assets and contributed to a significant shortfall in Coast Guard patrol hours.

Perhaps the most widely publicized failure of the Deepwater program is the failure of the effort to lengthen 110-foot patrol boats already in the Coast Guard's fleet to 123 feet. The lengthening was intended to upgrade these boats and extend their service lives while newer assets were being developed.

Though warned by Navy experts that the proposed designs for the lengthening was inadequate, the Coast Guard proceeded with the effort anyway. Eight boats, which originally cost some $60 million to produce and which had many years of additional service life left, buckled soon after they were lengthened and now sit sadly in the Coast Guard yard in Baltimore waiting for the scrap heap.

Unfortunately, the failure of the 123-foot patrol boats is not the sole failure of the Deepwater program. The initial design of the Fast Response Cutter was also beset by technical failures, though fortunately these were identified before any ships were built. While this acquisition effort has now been revamped, the GAO reported earlier this year that the design failure has delayed the procurement by at least 2 years.

Together, the failed effort to lengthen the 110-foot patrol boats and the failure of the first design of the Fast Response Cutter wasted another $100 million of hard-earned American taxpayer dollars.

Similarly, despite the obligation of another $100 million, the initial design effort on the Vertical Unmanned Aerial Vehicle, which is needed to enhance the surveillance capacity of the National Security Cutter, also failed. This craft had originally been scheduled for delivery in 2007, but the GAO estimates that delivery will now be delayed by as much as 6 years, meaning that the first National Security Cutters will likely enter service without the vehicles.

More recently, the Department of Homeland Security's Office of the Inspector General found that the hull fatigue life on the National Security Cutter, the most expensive asset to be procured under the Deepwater program, may not meet contractual requirements. The IG warns that fixing the hulls of the first two NSCs, which are already well into production, will add potentially significant costs to these ships and may even affect their operational capabilities.

Despite this troubling record of failure and waste, during the first 4 years of the Deepwater program, the Coast Guard ranked the contractor performance between ``very good'' and ``excellent'' and awarded the ICGS team some $16 million in award fees; in other words, in bonuses.

Such a situation is ridiculous and intolerable. Having convened now three hearings on Deepwater in the Subcommittee on Coast Guard and Maritime Transportation in the 110th Congress and having chaired an investigative hearing on the 120-foot patrol boat program convened in the full Committee on Transportation and Infrastructure by Chairman Oberstar, we have had the opportunity to closely examine the failures in contractor performance and in Coast Guard management that have occurred since 2002.

H.R. 2722 responds directly to these failures by requiring the creation of the management systems and the appointment of the personnel needed to enable the Coast Guard to manage Deepwater as effectively as the service managed the truly amazing rescues of victims during Hurricane Katrina.

Under the leadership of Commandant Thad Allen, the service is already moving decisively to correct past mistakes. Admiral Allen has formed a new procurement directorate to professionalize acquisition management and to put the business practices in place needed to effectively oversee contractor performance and to create lines of strict accountability.

The Coast Guard is now also directly managing the procurement of the Fast Response Cutter, and it has issued a solicitation that includes new measures specifically intended to focus the procurement on producing an asset that will meet all performance requirements.

The Integrated Deepwater Program Reform Act, H.R. 2722, would build on the important reforms Admiral Allen has already enacted by putting in place a comprehensive package of reforms that will strengthen the institutional capacity of the Coast Guard to manage not only Deepwater but all other procurements for years to come.

Specifically, H.R. 2722 will require that the Coast Guard be in charge of all technical decisions on Deepwater and would require the use of full and open competition for the procurement of new assets to ensure that the Coast Guard receives the best value for taxpayers' resources.

H.R. 2722 also sets rigorous new standards for the testing and certification of all Deepwater assets.

The bill requires that all new National Security Cutters procured from the date of enactment be certified by an independent third party to meet all contractual requirements.

The DHS Inspector General has testified before our subcommittee that the four audits of Deepwater he has conducted over the past 2 1/2 years have revealed the dominant influence of expediency and schedule over performance quality in the management of this program.

Unfortunately, the shoddy results of the prioritization of expediency and schedule can be seen in the 123-foot patrol boats, which cannot float, and the Unmanned Aerial Vehicle, which did not fly.

Professional certification of the design and construction of NSCs 3 through 8 will help ensure that these assets do not have any structural shortcomings, as such certification should be accommodated in all procurement schedules.

Further, given the serious concerns that currently exist over hull fatigue with NSCs 1 and 2, H.R. 2722 requires that the design used in all future NSCs be submitted to an assessment conducted by the Naval Surface Warfare Center, Carderock Division, before construction on the new NSCs begin.

Carderock identified many of the potential hull fatigue problems with NSC 1 and their expertise will help assess whether proposed design changes for subsequent NSCs truly correct design problems that could shorten the hull fatigue life of those ships.

H.R. 2722 requires that all other new cutters acquired under Deepwater be classified by the American Bureau of Shipping, and it requires that all new aircraft and aircraft engines be certified for airworthiness by an independent third party.

Significantly, H.R. 2722 also requires the appointment of a civilian as the head of the acquisitions directorate. Both the DHS Inspector General and the GAO have testified before the Subcommittee on Coast Guard and Maritime Transportation regarding the importance of personnel continuity in the effective management of acquisitions contracts.

Appointment of a civilian with a career's worth of experience in procurement will bring to the Coast Guard the level of expertise that simply is not cultivated among the service's uniformed personnel given that the service lacks a career path to train acquisitions professionals. Of course, while the appointment of a civilian to head Coast Guard acquisitions functions cannot guarantee continuity, the appointment of a uniformed servicemember will guarantee turnover on a predictable schedule.

With the implementation of these measures that will prepare the Coast Guard to manage Deepwater, H.R. 2722 requires that private sector contractors be phased out as the lead systems integrator by October 1, 2011. This phase-out can occur prior to that date if the Coast Guard certifies they have the personnel and systems in place they need to perform the lead systems integration function.

Madam Speaker, I remain completely confident in Admiral Allen's leadership of the Coast Guard and in his management of the Deepwater program, but I also believe that Congress must act to build within the Coast Guard the systems that will enable the service to effectively manage procurement efforts, and manage taxpayer resources, long after Admiral Allen has retired.

The men and women of the Coast Guard will rely on the assets procured under Deepwater for decades to come to defend our homeland against an ever-growing range of threats. This is a procurement effort that simply must be managed correctly, and I'm confident that the enactment of H.R. 2722 will ensure that it is.

This bill has enjoyed bipartisan support, both in the Subcommittee on Coast Guard and Maritime Transportation and the Committee on Transportation and Infrastructure. I also note that the Congressional Budget Office has found that enacting this measure will not affect revenues or direct spending in any way and could result in lower procurement expenditures and reduce the long-term costs of the Deepwater program.

In closing, I again commend Chairman JIM OBERSTAR, chairman of the Committee on Transportation and Infrastructure, for his strong support and his commitment to excellence. Under his inspired leadership, our committee has truly returned oversight and strict accountability to the agenda and is working to enact the ground-breaking policies that are essential to meeting the transportation challenges of the 21st century.

I also commend the ranking member of the full committee, Congressman Mica, for his leadership and support on this measure; and I commend the ranking member of our subcommittee, the distinguished gentleman, Mr. LaTourette, for his hard work and his outstanding leadership on the subcommittee.

I urge my colleagues to demonstrate their commitment to our brave young men and women in our Coast Guard, our thin blue line at sea, by supporting H.R. 2722, as amended.

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