Kerry bill would torpedo Deepwater program

The Coast Guard would be required to terminate its Integrated Deepwater Systems contract with Lockheed Martin Corp. and Northrop Grumman Corp. when it expires in June under legislation submitted late last week by Sen. John Kerry (D-Mass.).

The remainder of the $24 billion contract should be competitively bid to avoid further delays and reduce waste. The value of the remainder of the contract was not immediately available, Kerry said.

Kerry's legislation, called the Deepwater Accountability Act, was introduced two days after the Coast Guard announced it would separately rebid a portion of the Deepwater contract covering about $600 million for 12 fast-response cutter patrol boats. A request for proposals is anticipated in May.

Kerry said in a statement that the Coast Guard's rebidding of the fast-response cutter was a "good first step" but more reforms are needed.

"It is long overdue for the Coast Guard to make the necessary reforms to protect taxpayers and prevent further delays in the Deepwater program," Kerry said. "The Deepwater project has been riddled with problems, delaying implementation of essential security measures and potentially wasting millions of taxpayer dollars. My bill aims for a real, workable fix for the program."

Under Kerry's bill, the Coast Guard would have to solicit new contracts for the remaining assets of Deepwater under open competition. Some incomplete assets would be completed under the current contract if it compromises immediate national security or costs more money to pursue new bids. The Homeland Security Department would determine within 30 days which assets can be competitively bid and which would be finished with Lockheed Martin and Northrop Grumman, Kerry said.

In addition, the legislation states that the Coast Guard may not use a lead systems integrator to procure the remaining assets of the program.

The decision to reassign the patrol boat acquisition was intended to control costs and meet mission requirements quickly. The change in strategy was made after design work on another patrol craft in Deepwater was suspended in early 2006 due to technical risk.

The Coast Guard awarded the $17 million Deepwater modernization program in 2002 to Integrated Coast Guard Systems, a joint venture of Lockheed Martin and Northrop Grumman, as the lead systems integrator. Under the 25-year program the Coast Guard eventually will replace its aging fleet and helicopters with new systems.

The performance period for the current contract with Lockheed Martin and Northrop Grumman is due for renewal in June, according to Kerry.