Coast Guard attempts to convince the public and Congress that it can fix Deepwater

Mariners around Key West and South Florida have enough to worry about: storms, drug traffickers, illegal aliens, terrorist activity, cruise-ship emergencies and a potentially chaotic flotilla of Cuban refugees that may follow the death of Fidel Castro.
Now they have one additional problem that could aggravate all the other risks. The Coast Guard has yanked eight patrol vessels out of service in the region because of dangerous defects that resulted from a recent rehabilitation.
The refit, in which the 110-foot cutters had their hulls lengthened by 13 feet, was part of the Coast Guard’s $24 billion Deepwater project. The unprecedented modernization initiative has been beset by cost overruns, delays and safety deficiencies, and Congress is investigating whether the program’s unique management structure is at fault.
Raymond Archer, director of the Port of Key West, said problems with the Deepwater program have handicapped the Coast Guard’s ability to respond to an emergency. Large cruise ships and fuel tankers routinely call at his facility.
“Key West can be in a vulnerable position,” Archer said. “The issue of the cutters being taken out has created some concern. Should a major disaster or big event take place, will they be able to get the resources together to respond?”
The Integrated Deepwater System program — the Coast Guard’s largest acquisition project ever — was intended as a much-needed campaign to update the Coast Guard’s fleet of ships, aircraft and other equipment. Conceived during the Clinton Administration as a 25-year, $17 billion project, the price tag has ballooned to at least $24 billion.
Three aspects of Deepwater have upset Congress, which is holding hearings this year on how to reform the program.
One is the so-called “123” project: the effort to modernize the Coast Guard’s fleet of 49 Island-class 110-foot cutters by adding 13 feet to their length. The first of the 123-foot vessels was delivered from the shipyard in March 2004.
By the time eight were completed, Coast Guard engineers noticed cracking and buckling of the hulls underneath the main engine on most of them. The eight vessels, all of which had been deployed to Sector Key West, were declared unseaworthy in November 2006. They were ordered out of service — after the Coast Guard had spent an estimated $100 million on them.

A second problematic aspect of Deepwater was a plan to build 58 so-called fast response cutters. After identifying the deficiencies with the 110-foot modernization, the Coast Guard accelerated that fast response cutter (FRC) program in an attempt to replace the aging 110-footers years earlier than originally planned.
After again discovering design problems, the Coast Guard in February 2006 suspended work on the 147-foot FRCs, which were to have glass-reinforced composite hulls. The Coast Guard then competitively bid the contract and is reviewing as many as 27 candidate designs from 19 manufacturers for a revamped FRC.
A third high-profile embarrassment has been deficiencies associated with the $564 million national security cutter. Construction began in 2004 in Mississippi on the first 418-foot, high-tech vessel, intended to be the Coast Guard’s flagship. The ship is outfitted with advanced weapons and intelligence systems, and it can detect and defend against chemical, biological and radiological attack. Eight of the vessels were planned.
Yet again, design flaws were identified. Coast Guard engineers determined that the hull could experience premature cracking due to fatigue.
Reports from the Department of Homeland Security Office of Inspector General and the Congressional Research Service suggested that Deepwater’s  management structure hindered the Coast Guard’s ability to oversee the contractors’ work sufficiently.
The project includes the construction of larger cutters and upgrades to helicopters, airplanes, and logistics and communications gear. Instead of managing the multiple projects itself, the Coast Guard delegated that function to a private-sector joint venture led by Lockheed Martin Corp. and Northrop Grumman Corp.’s Ship  Systems division.
The venture was given responsibility for designing, building and coordinating Deepwater’s complex elements. Democratic and Republican congressional leaders have said the novel management approach resulted in insufficient Coast Guard oversight of its own project. Deepwater “is not meeting its goals” and “is headed for the rocks,” and the design deficiencies and runaway costs are “completely unacceptable,” said Rep. Elijah E. Cummings, a Maryland Democrat who is the new chairman of the House Subcommittee on the Coast Guard and Maritime Transportation.


 Rear Adm. Gary Blore, left, and Commandant Adm. Thad Allen, right, during a meeting in the summer of 2006. Blore, as the new head of Deepwater, will be responsible for fixing the program’s problems. [courtesy U.S. Coast Guard]

“Things have obviously gone wrong,” Cummings told Professional Mariner in January. “We need to make sure there is clear accountability for the taxpayers’ dollars.”

The Coast Guard can’t say it wasn’t warned of the potential problems.
A 2001 report by the U.S. General Accounting Office cautioned that the Coast Guard’s management approach to Deepwater was taking too many things for granted. The authors cited the potential for out-of-control costs and reliance on unproven engineering designs. They warned of potentially inadequate procedures and personnel to manage the private contractors.

“The acquisition strategy the Coast Guard has chosen for the Deepwater project is unique and untried for a project of this magnitude,” the 2001 report said. “It carries many risks that could potentially cause significant schedule delays and cost increases.”

In March 2004, the Coast Guard chief engineer, Rear Adm. Erroll Brown, wrote a letter to his Deepwater colleagues stating that the national security cutter design contained flaws that could result in structural failure. Brown said construction should not commence until the safety issue was addressed. Members of Congress have complained that the Coast Guard approved construction anyway and didn’t inform oversight committees of the warning letter.
Even the Coast Guard’s top leaders now acknowledge that the private-sector management approach created a problem — and they promise a major restructuring of Deepwater. Commandant Adm. Thad Allen in January announced that he plans to put a senior Coast Guard officer in charge of a unified command covering all equipment acquisitions — including Deepwater.
Allen tapped Rear Adm. Gary Blore, who since April 2006 has been Deepwater’s program executive officer, to head up the combined acquisitions command. A former aviator and chief of the Office of Aviator Forces, Blore was also a budget analyst who once served as chief of the Office of Budget and Programs.
Before the Deepwater appointment, Blore was special assistant to President Bush for border and transportation security.
In an interview with Professional Mariner, Blore said the Deepwater-related modernization is vital to the nation’s security needs, and he promised to pay keen attention to the program’s effectiveness and costs. Blore said the American people should not get the impression that private industry can dictate what happens with Deepwater assets.
“The Coast Guard decides what’s best for the Coast Guard. It’s all about continuous improvement and public stewardship,” said Blore, 52. “We’re going to make this program work.”
Blore emphasized that most aspects of the Deepwater modernization are proceeding well. He particularly cited helicopter projects, including the installation of long-range surveillance capability on the HC-130J and beefier engines on the HH-65 “Charlies.” The Coast Guard’s new HC-144A maritime patrol aircraft are starting to be delivered.
Deepwater contractors have completed command, control and sensor upgrades to 39 cutters. They continue fulfilling a servicing agreement on a drug-interdiction helicopter squadron.
The Coast Guard is backing away from its earlier approach of relying on Lockheed Martin and Northrop Grumman Corp. as lead system integrators. The Coast Guard will assume a more direct responsibility in integrating the Deepwater assets, Blore promised. In-house analysts and engineers will have a greater role in determining the course of the procurement.
“That was viewed as an industry function. That has been rethought, and that is (now) a government function,” Blore said. “The Coast Guard is a better choice for the integration part.”

Coast Guard headquarters will also seek more third-party assessments of its acquisition plans and designs, Blore said. He expects more audits and consultation with independent analysts. The Defense Acquisition University, for example, is conducting a Deepwater audit that will be released later this year, he said.


Matagorda, the first of eight 110-foot cutters stretched to 123 feet at Bollinger Shipyards. Because of buckling of the hulls following the work, all eight were declared unseaworthy and taken out of service. [courtesy U.S. Coast Guard]

Headquarters has also recognized a need for more in-house personnel specializing in acquisitions.

“Some of the challenge we’ve run into is that we don’t have as large an experienced acquisition corps as maybe we should have,” Blore said. “We believe that is … a program improvement that needs to be made.”

The reforms call into question the future role of Integrated Coast Guard Systems. Various congressional panels planned to hold hearings on just that matter throughout 2007.

“If we conclude that the Coast Guard has to come back — assuming they have the capability — to do the job of Northrop Grumman and Lockheed Martin, I don’t know why it’s so significant that we have them,” said Cummings, whose congressional district includes the Baltimore waterfront. “I don’t want the taxpayers’ dollars to be paying the Coast Guard and Northrop Grumman and Lockheed Martin for the same thing.”

At a hearing before Cummings’ subcommittee Jan. 30, officials from the private contractors said they have managed and integrated their Deepwater contracts in a transparent fashion.

“ICGS utilizes the depth of capabilities and experience of its partners to provide solutions in accordance with Coast Guard requirements,” said Leo Mackay, a Lockheed Martin executive, who is president of Integrated Coast Guard Systems.

“The way forward will be difficult,” Mackay said, “but given the capabilities of the participants and the strategic imperative to better outfit the Coast Guard so the safety and security of our nation is improved, the Deepwater program is eminently achievable.”

Meanwhile, Coast Guard engineers are already beginning to solve some of the design flaws, Blore said. The changes to the Deepwater management structure should result in more focused and timely solutions to other engineering problems, he suggests.

“I think you’ll see the NSC on a much more even keel now. We have a solution for the fatigue issue” with the national security cutters, Blore said.

“The replacement patrol boats will also reflect the use of an independent assessor and the more robust role of our technical authority,” he said, “and I think the program will benefit from this.”

Regarding the untimely removal of the patrol vessels from Sector Key West, Blore said the Coast Guard has made major adjustments to ensure adequate coverage there. As a helicopter aircraft commander in 1980, Blore himself participated in the U.S. response to the Mariel boatlift of Cuban refugees.

He said commanders have shifted other patrol boats to the sector and are double-crewing some boats and leasing extra offshore vessels for non-military patrol functions.

“We’re very prepared. The Coast Guard prides itself on being ready for any contingency,” Blore said. “I’m not going to say it’s not a strain, and I’m going to say that the Coast Guard is disappointed with how the 123 project ended up.”

Archer, the Key West port director, said many mariners are giving the Coast Guard the benefit of the doubt, because the region tends to be pro-military and the maritime community there has a good working relationship with the Coast Guard.

 “Are they crippled? I wouldn’t say they are crippled. Are they handicapped? Yes. But I think they can overcome this handicap,” he said.

By Professional Mariner Staff