House passes bill to reform Coast Guard’s Deepwater program

The following is the text of remarks by U.S. Rep. Elijah E. Cummings, D-Md., regarding support for a bill reforming the Coast Guard’s Deepwater program — followed by a fact sheet explaining the bill — before the bill passed the House over the weekend:
Mr. Speaker:
As Chairman of the Subcommittee on Coast Guard and Maritime Transportation, I rise today to urge the adoption of the Integrated Deepwater Program Reform Act of 2008, H.R. 6999, as amended.  This legislation is based on Deepwater reform legislation, H.R. 2722, which passed the House by a vote of 426 to 0 last year, and on S. 924, which passed the Senate by unanimous consent.
The manager’s amendment amends the underlying bill by making it a crime to operate a submersible vessel that is not registered in any country.
Such vessels are often used to smuggle illegal drugs into the United States.  In fact, just this month, the Coast Guard worked with the United States Navy to seize two such submersibles carrying a combined total of 14 tons of cocaine.
As a Representative of the City of Baltimore, I know that every gram of illegal drugs we keep off our nation’s streets is a gram that cannot destroy a life.
Therefore, as smugglers develop new ways to bring drugs to our shores, our laws must be updated to enable law enforcement personnel to prosecute these new types of crimes – and this bill does precisely that.
I recognize and thank:
·       Congressman Oberstar, the Chairman of the Committee on Transportation and Infrastructure, for his exceptional leadership.
I also thank:
·       Ranking Member Mica and Ranking Member LaTourette,
·       Chairman Thompson and Ranking Member King of the House Committee on Homeland Security, and
·       Senators Inouye, Hutchison, Cantwell, and Snowe,
for their leadership and their dedication to ensuring effective management and oversight both of the United States Coast Guard and of taxpayers’ resources. 
Mr. Speaker, since my appointment in January 2007 as Chairman of the Subcommittee on the Coast Guard, the Subcommittee has exercised careful oversight over the Coast Guard’s $24 billion, 25-year Deepwater procurements, through which the Coast Guard is replacing or rehabilitating its cutters and aircraft.  Senator Cantwell has been leading a similarly aggressive oversight effort in the Senate.
Unfortunately, many of the acquisitions conducted under Deepwater have failed, including the nearly $100 million effort to lengthen 110-foot patrol boats, which yielded 8 unseaworthy vessels that have been removed from service.
The early Deepwater procurements failed because the Coast Guard did not have the systems and personnel necessary to manage large acquisitions.  They failed because the Coast Guard left private sector contractors to police themselves.  And they failed because Congress did not require of the Coast Guard full accountability for the billions of taxpayer dollars appropriated to support its acquisitions.
The Commandant of the Coast Guard, Admiral Thad Allen, has moved to strengthen the service’s ability to manage acquisitions, including creating a new acquisitions directorate, and I applaud his efforts.
Under his leadership, the service has taken conditional delivery of the first National Security Cutter, the Bertholf. 
Having joined the Coast Guard in commissioning the Bertholf this summer, I know it is a fine ship that will greatly enhance the service’s mission capabilities.
However, the Bertholf experienced significant cost overruns, and the Coast Guard continues to face procurement challenges – and not only within Deepwater. 
For example, the Rescue 21 program, which is intended to upgrade the systems the Coast Guard utilizes to locate those in distress at sea, is now hundreds of millions of dollars over budget and years behind schedule.
American taxpayers – who are now being asked to rescue our financial system from the consequences of failed oversight – have already shouldered the burden for the Coast Guard’s earlier failed procurements and for failed procurements throughout the Department of Homeland Security – which, according to a tally compiled by the Homeland Security Committee, have wasted approximately $15 billion.
As the Representative elected by the citizens of Maryland’s 7th Congressional District and as Subcommittee Chairman, I believe that one of our most critical duties at this time is to implement every available measure to ensure that federal agencies are effective stewards of taxpayers’ money.
The legislation before us today implements such measures with regard to the U.S. Coast Guard.
Specifically, H.R. 6999 requires the Coast Guard to eliminate the use of all private sector lead systems integrators by October 2011 – the same date on which their use is phased out in the Department of Defense. 
This bill creates in statute the position of Chief Acquisitions Officer – and requires that it be filled with a fully qualified individual who can, at the Commandant’s choosing, be a civilian member of the senior executive service or a uniformed member of the Coast Guard but who must have a Level III Acquisitions qualification and 10 years of experience managing acquisitions efforts.
The bill requires independent, third-party certification of assets – and requires that appropriate testing be performed on asset designs so that problems can be identified before construction of an asset begins. 
It also requires the regular submission of acquisition program reviews to Congress – including notification of cost overruns and schedule delays – so that Congress is aware of emerging issues before they become crises.
In short, this bill brings common-sense oversight and management reform measures – many of them based on current practices within the DOD – to the Coast Guard.  It also requires strict and appropriate accountability from the service for its stewardship of taxpayer resources. 
These measures are critical to ensuring that through the remaining Deepwater procurements, the nearly 42,000 men and women of the Coast Guard will be equipped with state-of-the-art assets equal to the missions they will perform – and the challenges they will face – in the 21st century.
I urge my colleagues to support H.R. 6999 and with that, I reserve the balance of my time.
Fact Sheet:
H.R. 6999, The Integrated Deepwater Program Reform Act of 2008
H.R. 6999 imposes appropriate standards and oversight over the Coast Guard’s Deepwater procurement program – a program through which the service expects to expend a total of $24 billion and which is to last for another 20 years.  The highlights of the bill are discussed below.
·       Private Sector Lead Systems Integrator: Section 2 of H.R. 6999 prohibits the use of a lead systems integrator beginning 90 days after the date of enactment of this Act.  However, the bill does allow the Coast Guard to continue to utilize private sector lead systems integrators for on-going acquisition efforts between now and October 2011 (when the Coast Guard’s use of a lead systems integrator is fully prohibited – as it will be in the Department of Defense as of that date) under specific circumstances to ensure that no procurements are disrupted.  This will also ensure that the Coast Guard has the time necessary to prepare to fully bring the lead systems integration function in-house.  Specifically, H.R. 6999 allows the use of a lead systems integrator between now and 2011 under the following circumstances:
§       To complete any delivery order or task order issued to a lead systems integrator within the 90-day period after the date of enactment of this Act (that is, any award issued to a private sector lead systems integrator before the prohibition on the use of these integrators takes effect 90 days after the enactment of this Act);
§       For acquisitions of – or of systems that support – HC-130J aircraft, HH-65 helicopters, and C4ISR information technology systems;
§       For acquisitions of National Security Cutters and the Maritime Patrol Aircraft that are under contract or order for construction between now and the date that is 90 days after the date of enactment of this Act – and for acquisitions of National Security Cutters and Maritime Patrol Aircraft after the implementation of the prohibition 90 days after the date of enactment of this Act IF the use of the lead systems integrator is in compliance with the Federal Acquisition Regulation, is in the best interests of the government, and does not involve the use of Tier 1 subcontractors in which the lead systems integrator has a financial interest (unless that subcontractor was chosen through full and open competition).
§       Essentially, then, the use of the lead systems integrator is permitted for all on-going asset procurements under Deepwater.  It is not permitted for the procurement of new assets – as these are to be handled by the Coast Guard as it develops its own internal capacity to serve as the lead systems integrator.
§       Both the House-passed bill, H.R. 2722, and the Senate-passed bill, S. 924, eliminated the use of private sector lead systems integrators.
·       Retention in the Coast Guard of Technical Authorities and Specification of Certification and Testing Requirements: Section 3 of H.R. 6999 requires the Commandant of the Coast Guard to retain all technical authorities, prohibits the contractors under the Deepwater program from self-certifying that they are complying with the contract’s requirements, and requires performance awards to be based on actual performance.  Section 4 of the bill also requires adequate testing of asset designs before construction begins (called an Early Operational Assessment) so that problems can be corrected at the design stage and requires the conduct of an operational assessment on constructed assets before the Coast Guard accepts delivery to ensure that quality standards and contractual requirements have been met.
·       Strengthening the Coast Guard’s Acquisitions Management Capabilities: Sections 6 and 7 of H.R. 6999 include significant measures to improve the Coast Guard’s internal processes for managing acquisitions, including requiring the appointment of a Chief Acquisition Officer (CAO) at the Assistant Commandant level.  The Commandant is authorized to choose for this position either a civilian from the senior executive service or a flag-level uniformed officer – but whomever is chosen must have a Level III acquisition management qualification and 10 years of acquisition experience.  These requirements are in keeping with the requirements imposed on flag-level officers and civilians in equivalent positions in the Department of Defense as per 10 U.S.C. 1735.  Implementation of the requirement that the CAO have 10 years of acquisitions experience is delayed until October 2011 – when the use of private sector lead systems integrators is phased out – to enable the Coast Guard to prepare personnel to assume this position.
§       H.R. 6999 also requires that the Coast Guard develop a strategy to empower acquisitions program managers – who are the cornerstones of the acquisition workforce.  Such a strategy must explain how the Coast Guard will create a career path for program managers and provide adequate training and educational opportunities – as well as how the Coast Guard will hold program managers accountable for the results of acquisitions initiatives.  Development and implementation of this strategy is essential to enabling the Coast Guard to empower program managers and to grow senior level acquisitions managers.
§       The House-passed bill, H.R. 2722, created the Chief Acquisitions Officer and required that it be a civilian.  The current bill, H.R. 6999, ensures that the Commandant of the Coast Guard can choose either a civilian or a military officer for the Chief Acquisitions Officer position (as the Commandant requested) – but imposes specific qualification requirements on the individual selected for the position.
§       H.R. 6999 requires the Coast Guard to create career paths for both civilian and military personnel assigned to the acquisitions programs to ensure that these people receive the training and qualifications they need to effectively oversee and execute procurements worth billions of dollars.
§       H.R. 6999 requires the Coast Guard to promote a balanced workforce in which women and members of racial and ethnic minority groups are appropriately represented in Government service.
·       Notification of Cost Overruns and Schedule Delays: To ensure that Congress is fully apprised of major cost overruns and schedule delays encountered in acquisitions conducted under Deepwater, section 9 of H.R. 6999 requires the Coast Guard to advise Congress whenever a cost overrun greater than 8 percent of the acquisition program baseline total acquisition cost is encountered.  This standard is in keeping with the requirements of the Department of Homeland Security’s own investment management handbook.  Additionally, the Coast Guard is required to advise Congress whenever an asset or a delay in the production of an asset exceeding 180 days is encountered.  Both the House-passed bill, H.R. 2722, and the Senate-passed bill, S. 924, included provisions requiring the notification of Congress when cost overruns or scheduled delays occurred.
·       Alternatives Analyses for Experimental, Technically Immature, or First-in-Class Major Assets: Section 8 of H.R. 6999 requires the conduct of an alternatives analysis in advance of the acquisition of an experimental, technically immature, or first-in-class of a major asset class to objectively assess:
§       the technology’s capabilities, level of maturity, and safety and performance history;
§       the likely production and development costs of the assets – as well as their operating and support costs; and,
§       the correct number of the assets to be purchased to meet the Coast Guard’s mission needs.
§       Earlier in Deepwater, the Coast Guard obligated more than $100 million to the development of a vertical unmanned aerial vehicle and the effort failed to yield a reliable design.  The Coast Guard was seeking to develop its own VUAV when other branches of the military had already developed proven designs.  Now, as a result of the failure of this effort, the National Security Cutter will be launched without a VUAV – and without the expanded patrol range that the asset was intended to provide.
§       The Senate-passed bill, S. 924, required an alternatives analysis for the entire Deepwater program.  This bill, H.R. 6999, applies that requirement to individual assets to ensure that value for money is obtained – and that purchases are fully capable of meeting mission requirements.  The original slate of assets planned for purchase under Deepwater was developed by ICGS – and should be evaluated as new purchases are undertaken to ensure that the purchases align with current mission needs.
·       Consultation with the Department of Defense:  Section 10 of H.R. 6999 instructs the Coast Guard to obtain support to the extent appropriate from the Department of Defense (DOD) and to seek to leverage off of DOD contracts and contracts issued by other federal agencies to obtain the best prices for assets.  The bill also instructs the Coast Guard’s technical authority – who will make decisions regarding the fulfillment of technical contract requirements – to adopt procedures for overseeing technical issues similar to those used by the Navy.  The House-passed bill, H.R. 2722, and the Senate-passed bill, S. 924, included provisions authorizing and encouraging the Coast Guard to obtain technical assistance with contracting and acquisitions functions from the Department of Defense.
By Professional Mariner Staff