Government sues, alleging contractor botched Coast Guard acquisition

Feds claim company misrepresented information in its Deepwater bids

The federal government is seeking financial damages from Bollinger Shipyards Inc. and accusing the company of falsifying statements to the Coast Guard that resulted in eight “unseaworthy” boats being delivered under the Deepwater acquisition program, the Justice Department announced.

Bollinger proposed to convert existing the Coast Guard’s 110-foot patrol boats into 123-foot boats by extending the hulls. The Coast Guard awarded a contract to convert eight vessels; however, the first completed vessel suffered hull failure when put into service.


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In investigation concluded that Bollinger exaggerated the hull strength that would be achieved in the reconstructed vessels, the department said in statement released Aug. 17.

“The calculation of hull strength reported by Bollinger to the Coast Guard prior to the conversion was false,” Justice said in the statement.

The government’s lawsuit seeks damages from Bollinger under the False Claims Act for the “loss of the eight now unseaworthy vessels,” the statement said.

The amount of damages being sought was not specified. However, the Coast Guard, in the lawsuit, said it had paid Bollinger $78 million to date, according to an article in the New Orleans Times-Picayune.

“Companies which make false statements to win Coast Guard contracts do a disservice to the men and women securing our borders,” Tony West, assistant attorney general for Justice’s civil division, said in the statement. “We will take action against those who undermine the integrity of the public contracting process by providing substandard equipment to our armed services personnel.”

The Times-Picayune also obtained a statement from Bollinger, in which the company denied any wrongdoing.

Bollinger has a "spotless record for honest and fair dealing with every customer, including the U.S. Navy and Coast Guard, our largest customer,” the company said in the statement, according to the news report. "Throughout this process, Bollinger has been open and cooperative with the government, and we remain committed to providing the government all necessary information and assistance to bring this matter to a close," the statement said. "Bollinger has tried to find a way to resolve this matter short of litigation, but we are fully prepared to defend our good name aggressively in a court of law."

The Coast Guard began the multibillion-dollar Deepwater program in 2002 to modernize its fleet of ships, cutters, boats and other assets. A contract for lead systems integration was awarded to a joint venture owned by Lockheed Martin Corp. and Northrop Grumman Corp. Bollinger was awarded a number of construction contracts under the Deepwater umbrella.

After the hull failures of the converted 123-foot cutters, the Coast Guard took the eight converted boats out of service in 2007. Facing other difficulties and rising costs, the agency also took over the lead systems integrator role over the troubled program.

According to a report from the Government Accountability Office, the latest cost estimate for Deepwater assets is $29 billion, up from $24 billion in 2007.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Reader Comments

Sat, Apr 25, 2015 Michael Mortimer (MichaelSF) San Francisco

Federal and state governments get taken all the time. And it is up to good citizens to bring fraudulent conduct to the attention of prosecutors. I remember when our City Hall in San Francisco was being retrofitted and brought up to code for earthquakes. As they were digging into the building, "peeling back layers," so to speak, media reported that contractors and engineers were finding all kinds of ways that the contractors and subcontractors after the 1906 earthquake cheated the City by, for example, charging top dollar, but cutting corners by using cheap materials, shoddy construction. (As usual, on the surface the new City Hall looked fantastic. But internally, hidden from scrutiny, the building was a hazard and danger. Fast forward 100 years, things have not changed. The new "eastern span" of the San Francisco Bay Bridge has suffered from fraudulent construction and cutting corners. There's a lot of blame and finger pointing going on, but what was noteworthy to me, I knew a law firm who represented a lone plaintiff who claimed he was fired for being a whistle blower about shoddy welding done deep into the bridge where no one would ever discover the wrongdoing. He got a settlement and everyone went away. But five years later a new round of allegations of shoddy, fraudulent work on the Bridge is now making the local news and having to be dealt with. Interesting, the State of California is acting like the latest accusations is the first they have heard about shoddy work, no one making the connection between that guy who was making similar allegations years earlier. The irony, this guy's whistle blowing about the bridge is while it was under construction. If the Govt. had jumped on it at the time, they could have assured future work was done correctly. Seems like there's plenty of blame to go all around when the government gets cheated. I don't know why it is like that.

Sat, Apr 25, 2015 MichaelSF San Francisco

Jerome Little's comment is interesting and I am in concurrence with it. I too have my own experience from my Coast Guard days that IMO calls into question, are USCG members using ships and boats as "toys"? (Not all the time, just once in a while.) I was on a ship in Vietnam, on a Hamilton-class "jet powered" ship, the second round of ships named after Secretaries of the Treasury. Anyway, we were off the South Vietnam coast, quite close to shore. Back then these 378' cutters were state-of-the-art and the pride of the Coast Guard. Using the bow thruster was cool (back then fairly new tech) and we would tell people "we have two Boeing 707 jet engines. Not only could we haul ass (35 knots) but the ships could go 0 to 35 knots in 30 seconds. I was standing on the flight deck when I heard, saw, and felt someone on the bridge "flooring it." We were stationary and I heard the jet engines kick in and our rapid movement. About ten seconds later the entire ship rocked, I saw a propeller blade flying and thought from the vibration and shock that we had been attacked by a sapper (someone who swims to the ship and attaches explosives to the side), or had been hit by Viet Cong from the shore. The Captain sounded general quarters and while we manned our guns and damage control assessed what damage we suffered, we wondered for about 30 minutes if we were under attack, were we sinking, or what. Officially it later was noted that we "had hit an uncharted pinnacle." As we sat there dead in the water boats stood guard over us and we tried to make it look as though we were not disabled and our sitting in the water was intentional. A Navy tug sailed from the Philippines, hooked a line and towed us to Subic Bay for repairs. Even though I was low man on the totem pole of crew, even at my young age (18) I questioned WHY the officers had "floored it" in uncharted waters. That seems careless to me. After all, if I am in a war zone, close to shore, and I don't know what's in the water, I am going to keep my speed way down until I get to deeper water. I specifically recalled thinking to myself that someone on the bridge wanted to show off or have fun with the ship, showing people around us the "jet-powered ship hauling ass," somewhat akin to owning a muscle car and showing off at stoplights. I do remember at the time that we were NOT under orders to get somewhere, there was no action, we were not in danger, such as being under attack from the enemy. The only thing I concluded was this was someone wanting to have fun or get a thrill. So was my experience an example of the behavior Jerome Little refers to (4 years ago :) I certainly think so.

Wed, Oct 5, 2011 Jerome Little

I was involved with the Navy Patrol Coastal program and served on USS Cyclone PC-1 as the COB. Bollinger also built these ships. What is interesting to me and I think overlooked is this, I sailed in Cyclone from Norfolk to the Persian Gulf and back having gone through every sea state including two days of 20' seas off the coast of Aden. I will say honestly that most of the Commanding Officers viewed these ships as sports cars with guns. As a routine they would operate the ships in excess of the design limitations. The incident with USS Tempest PC-2 is what results when you exceed the design limitations. I would bet that the problem the Coast Guard had with the Island Class Cutters was a direct result of exceeding the design limitations and not a problem with the design. Like a plane, fly it outside the design envelope and bad things will happen.

Tue, Aug 23, 2011 rewelchjr

Wasn't Bollinger Shipyards the only one of the group in the hearing before Congress to acknowledge liability? Didn't a congressman/lawyer warn them about making such statements?

Mon, Aug 22, 2011 NJ

Thank God that the Coast Guard is going after these contractors. Their actions appear treasonous during a time of war. The US owes a huge debt of gratitude to the commenter - Mr. DeKort - for having the courage to bring this issue to the attention of the powers that be.

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