Coast Guard alters course of Deepwater

The Coast Guard is preparing to award a revised contract for its $24 billion Deepwater modernization program starting on June 25 with significant alterations from the original contract, according to Coast Guard Commander Admiral Thad Allen.

The new award term creates a relationship with the existing prime contractor, Integrated Coast Guard Systems, a joint venture of Lockheed Martin Corp. and Northrop Grumman Corp.

"While the new award term does establish ICGS as a possible sole-source option, it does not obligate the government nor does it guarantee the award of any work to ICGS," Allen told the House Subcommittee on Coast Guard and Maritime Transportation on Tuesday.

In recent weeks, the Deepwater program has been criticized in Congress and by the Homeland Security Department's inspector general for cost overruns, delays and design flaws. The Coast Guard's current contract with Lockheed Martin Corp. and Northrop Grumman Corp. awarded in 2002 expires this month, and its terms are being renegotiated.

Allen described the new contract award as a "change in direction" and said it will have a shorter length than the original contract. Under the new 43-month award term, which begins on June 25, the Coast Guard will award each task order based on best value to the government, Allen said.

"The Coast Guard is going to be a smart buyer, only moving forward on a product line after a first article asset success," Allen said.

After 18 months, there will be a review of contractor performance to determine if any additional task orders should be awarded to the contractor, he said. Furthermore, the Deepwater contract has been strengthened with additional focus on cost control, operational effectiveness, competition, program management and execution and logistics.

Even though the Coast Guard has taken over the role of lead systems integrator, it still may use the services of Lockheed Martin and Northrop Grumman, or of any private or government systems integrator such as the Naval Sea Systems Command, to perform specific engineering or systems integration functions as needed, Allen said.

The Coast Guard's chief information officer's role has been redefined to serve as the chief technical expert for all the Coast Guard's C4ISR systems and equipment, Allen said. The guard's chief engineer's role will serve as chief technical authority for all asset design and design changes, he said.