Coast Guard acquisition chief: Deepwater is back on course

Eight months after taking control of its troubled fleetwide modernization program from Integrated Coast Guard Systems, a consortium created by Lockheed Martin Corp. and Northrop Grumman Corp., the Coast Guard is claiming significant progress in putting the $24 billion acquisition program, known as Deepwater, back on course.

"This is a much different acquisition than we had a year ago," said Rear Adm. Gary Blore, assistant commandant for acquisition. At a briefing for reporters at Coast Guard headquarters in Washington, he noted that at this time last year, major components of the program were failing or stalled, and the Coast Guard was under fire for not adequately overseeing the contract, which comprises a complex mix of aircraft, watercraft and communications systems linking everything together.

When problems came to a head last April, Coast Guard Commandant Adm. Thad Allen announced the service would take over the contractor's role of integrating the program's components. By reorganizing and expanding its acquisition and engineering workforces, revising the terms of the contract award, and by demonstrating a willingness to turn to other contractors, Blore said the Coast Guard already is starting to see positive effects.

"We've re-enhanced the role of our technical authorities throughout the Coast Guard," Blore said, adding the Coast Guard also has forged formal partnerships with Navy organizations to better tap that service's technical expertise. As a result, the Coast Guard no longer cedes engineering expertise to contractors, he said.

The Coast Guard also is steering away from developmental technologies it originally planned to purchase, such as the vertically launched unmanned aircraft known as Eagle Eye, which was to operate from the new National Security Cutter, the Deepwater program's centerpiece watercraft.

"I can't buy something that doesn't work," Blore said. "The Eagle Eye wasn't ready for production, and I do not, within the Coast Guard, have the necessary developmental funding to keep working through that project." Instead, the Coast Guard will seek to fill the surveillance requirement that Eagle Eye was intended to address with another proven capability, such as surveillance drones launched from shore or helicopters operating aboard the cutter.

From its inception, Deepwater was one of the most expensive and ambitious federal acquisition programs in history. In 2002, the Coast Guard awarded the indefinite-delivery, indefinite-quantity contract to ICGS to manage the acquisition of new or upgraded cutters, patrol boats, helicopters, fixed-wing aircraft and the communications systems that would link them. The five-year deal was designed to be extended in five-year increments up to 25 years, the program's anticipated duration. As the lead systems integrator, ICGS had broad authority to select and manage subcontractors and to shape the acquisition plan to best meet the Coast Guard's mission requirements.

Designed to modernize an aging fleet increasingly crippled by growing maintenance requirements and outmoded communications systems, the program had broad political support and was widely seen as a model for managing technically complex acquisition programs at a time when government contracting staffs were shrinking and agencies were losing in-house engineering expertise to the private sector.

But by late last year, problems with the contract had mounted. Eight upgraded 123-foot patrol boats (expanded versions of existing 110-foot patrol boats), were found to have structural problems so severe they were pulled from the fleet and eventually decommissioned. The Coast Guard rescinded its acceptance of the boats and now is trying to recoup more than $86 million from ICGS.

Early this year, an investigation by the Office of the Inspector General at Homeland Security, the Coast Guard's parent agency, found that the National Security Cutter had serious design flaws and would not meet performance requirements, including a requirement to handle secure communications, an essential capability.

As a result of the criticism and under pressure from Congress, the Coast Guard earlier this year restructured the National Security Cutter program and with support from the Navy devised a design change to address the flaws in future cutters. Because the first two cutters already were under development when the design flaws were discovered, the Coast Guard is working out another design solution for those ships, which eventually will have to be retrofitted.

One of the highest-risk areas of concern with Deepwater is what's known as "information assurance," especially with regard to the National Security Cutter and its ability to send and receive sensitive or classified information while protecting it.

"Both the TEMPEST [the technical standards for protecting classified information] and information assurance issues continue to get more arduous every month as hackers worldwide demonstrate their ability to get into both our classified and unclassified systems, so the Department of Defense and others continue to adjust those standards," Blore said.

"We will meet those standards or we will not operate the classified and secure gear," he said.