Coast Guard signals all clear for new Deepwater deal

The Coast Guard yesterday awarded a new 43-month term contract to the existing Deepwater contractor, but did not guarantee additional work.

The changes from the existing contract presented no major surprises since they were previously disclosed as part of the Coast Guard's tightened oversight of the program.

The Coast Guard on Tuesday said it was ready to begin issuing task orders to Integrated Coast Guard Systems of Rosslyn, Va., a joint venture of Lockheed Martin Corp. and Northrop Grumman Corp., to address work to be completed from June 2007 through January 2011.

The original contract for the $24 billion Integrated Deepwater Systems asset modernization program was awarded in June 2002 for a five-year base period, with five additional optional terms of 60 months each. Following a review of contractor performance, the Coast Guard said it reduced the initial award term to 43 months.

"Changes in the terms and condition of the Award Term 1 contract better aligns the relationship between government and industry, clearly defining the roles of each ? in program management; requirements development; contracting actions; and compliance enforcement ? according to industry standards and departmental procurement and financial management policies," Rear Adm. Ronald J. Rábago, Deepwater's program executive officer, said in a statement.

"Changes in this contract will help the Coast Guard achieve the best value for the taxpayers and the government, and will change the relationship with ICGS to ensure that we deliver the assets, services and capabilities crucially important to the men and women of our Coast Guard operating forces," Rabago said.

The new contract provides for task orders for work to be performed by Integrated Coast Guard Systems during the 43-month period. At the same time, it specifies no required minimum order and does not guarantee any future delivery or task orders.

Because there is no minimum award, the contract value is undetermined at this time. "The value of the contract will be determined by further government-industry negotiations as ICGS submits proposals for specific work planned as part of the award term," the Coast Guard said.

Features of the new contract were previously disclosed by Coast Guard Commander Admiral Thad Allen in testimony to the House Subcommittee on Coast Guard and Maritime Transportation on June 12. Allen also said at that hearing that there would be a review of contractor performance after 18 months.

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 is taking over the lead systems integrator role in the project.

Under Deepwater, which is the Coast Guard's largest acquisition program spanning 25 years, there will be 91 new cutters; 195 new aircraft; new equipment for command, control, communications, intelligence, surveillance and reconnaissance; and modernization of existing shore facilities.

The Deepwater contractor is a joint venture between Lockheed Martin Maritime Systems & Sensors of Moorestown, N.J., and Northrop Grumman Ship Systems of Pascagoula, Miss.