US Coast Guard Gets GAO Praise, Extends ICGS Deepwater Contract to 2011
The US Coast Guard is currently operating vessels that date from the 1950s and 1960s, and a fleet-wide recapitalization is becoming an urgent priority given its new domestic security responsibilities. That effort is being handled as an integrated, multi-year $25 billion project called Deepwater that encompasses everything from long-range patrol aircraft and UAVs, to new communications and computing backbones, to new ship designs. In August 2005, “U.S. Coast Guard’s Deepwater Acquisition Plan In Deep Water?” covered the GAO’s critical scrutiny of Deepwater’s program structure. A week later, we noted Seapower Magazine’s Deepwater focus issue with a number of interesting and related articles. Integrated Coast Guard Systems (ICGS), a joint venture between Lockheed Martin and Northrop Grumman, is serving as the program’s overall system-of-systems integrator.
After an extensive Coast Guard review of the joint venture’s performance during its first 42 months, and a positive follow-up report from the GAO in April 2006, the U.S. Coast Guard recently announced a 43-month award term extension of ICGS’ performance-based contract…
The GAO’s positive report was a major milestone for the Deepwater program. Their April 2006 GAO report abstract (GAO-06-546) notes that:
“The Coast Guard’s analytical methods were appropriate for determining if the revised asset mix would provide greater mission performance and whether the mix is appropriate for meeting Deepwater missions. GAO and other independent experts found the Coast Guard’s methods were reliable for assessing the effects of changing the asset mix and a Department of Defense review board facilitated accreditation of the Coast Guard’s approach. Because the model has proved useful for guiding Coast Guard decisions on the proper asset mix for achieving Deepwater performance goals, the Coast Guard is considering ways to expand the model to guide decisions on meeting its Coast Guard-wide performance goals. Actions by the Coast Guard and the system integrator have fully implemented three of the eight GAO recommendations that were not fully addressed during GAO’s review in 2005, and three more recommendations appear to be nearly implemented. The remaining two have unresolved concerns, but the Coast Guard is taking steps to resolve them. A program of this size, however, will likely experience other challenges beyond those that have emerged so far, making continued monitoring by the Coast Guard important.”
The initial ICGS contract had specified a five-year base period of performance, with potential for five additional award terms of up to 60 months each, for a maximum of 30 years. This term extension will begin at completion of the base period in June 2007, and end in January 2011.
Denise L. Randolph, Chief of Contracts for the Deepwater program, noted that “announcement of award term length does not mandate any changes to the existing contract, nor does it equate to any specific contract dollar value.” Formal signing of the extension contract “will be based upon successful negotiations with ICGS and agreement upon fair and reasonable pricing.” See USCG release.
James Anton, ICGS executive vice president, says that they are moving into the delivery phase of the contract. “More than 15 major Deepwater acquisitions are concurrently underway. We have already deployed enhanced command, control and communications systems to the existing fleet, and are continuing to deliver dramatically improved HH-65C helicopters. We will launch the first National Security Cutter and deliver the first Maritime patrol aircraft for testing this year, with follow on production of both assets already underway.” See ICGS release.
As the April 2006 GAO report also noted:
“The revised Deepwater implementation plans change the balance between new and legacy assets, alter the delivery schedule for some assets, lengthen the overall acquisition schedule by 5 years, and increase the projected program cost from $17 billion to $24 billion. The higher cost generally relates to upgrading assets to reflect added homeland security mission requirements. Upgrades to vessels account for the single largest area of increase; with upgrades to the command, control, communications and other capabilities being second highest. In contrast, because the revised plans upgrade rather than replace most legacy aircraft and reduce the number of unmanned aircraft, the cost for Deepwater aircraft drops. The revised plans, like the original plan, are heavily dependent on receiving full funding each year. Coast Guard officials state that a shortfall in funding in any year could substantially increase total costs.”
Thanks to some exceptional and widely-praised work by the Coast Guard in the aftermath of Hurricane Katrina, and positive assessments like the 2006 GAO Report, the Coast Guard’s case and constituency for steady funding has become much stronger than it was a year ago.
- US Coast Guard – Integrated Deepwater System
- Integrated Coast Guard Systems (ICGS), the Lockheed/N-G partnership serving as Deepwater’s systems integrator.
- US Congressional Government Accountability Office (#GAO-06-546, April 28/06) – Coast Guard: Changes to Deepwater Plan Appear Sound, and Program Management Has Improved, but Continued Monitoring Is Warranted
- US Congressional Government Accountability Office (#GAO-05-757, July 22/05) – Coast Guard: Progress Being Made on Addressing Deepwater Legacy Asset Condition Issues and Program Management, but Acquisition Challenges Remain
- DID (March 30/06) – US Government Ship-Building Roundup. Inclding Deepwater.
- DID (Aug 25/05) – Seapower: USCG Deepwater Program Special Issue
- DID (Aug 16/05) – U.S. Coast Guard’s Deepwater Acquisition Plan In Deep Water?
- DID (Jan 3/06) – Cobham Catches A$ 1B CoastWatch Contract. Australia has a very different and interesting approach to the Coast Guard function, which is also its border patrol.