Deepwater under continued fire

Published 13 February 2007

Henry Waxman charges Coast Guard with misleading DHS auditors and vows to get to the bottom of it; an independent DoD assessment finds the Deepwater project in trouble and wonders in Lockheed and Northrop should be stripped of their favored position; opportunities beckon for others

The hits just keep on coming for the U.S. Coast Guard’s $24 billion Deepwater program to develop a new fleet of cutters, which readers will recall was recently suspended due to growing concerns about quality and cost in the Northrop Grumman and Lockheed Martin-managed project. According to House Oversight Committee Chairman Henry Waxman (D-California), project managers covered up a 2005 Navy engineering report that concluded the craft would not last the required thirty years. When DHS auditors requested the report, Coast Guard officials edited out the warning. “Sugarcoating of the situation may have made life easier for the program management, but it certainly is a disservice to you, to the Coast Guard community and to the taxpayers of this country,” Waxman told DHS Inspector General Richard Skinner at a hearing last week.

That is not all. An independent Department of Defense assessment commissioned by the Coast Guard has concluded that the contracts with Northrop and Lockheed should be reexamined without the presumption in mind that those two companies should take the lead. Instead, the prime contractor “should be directed to consider the products and services of companies other than” those made by Lockheed and Northrop. Under the contracts currently in place, the Coast Guard buys ships and planes from the company for predetermined prices “that are far broader than those allowed in major systems acquisition contracts” in the Defense Department. The Defense Acquisition University, however, which conducted the study, now recommends that the Coast Guard rely on a “government run, full and open competition” for purchases of at least some material.

-read more about the Deepwater coverup in Spencer Hsu’s Washington Post report; read more about the Defense Acquisition University report in Eric Lipton’s New York Times  report