GAO: Costs surge on Deepwater project

The Coast Guard continues to face cost increases in its Deepwater acquisition program and management problems with its computer modernization program, according to new testimony from the Government Accountability Office.

The cost of Deepwater asset replacement is expected to grow by $2.1 billion, to $26.3 billion, and may expand beyond that, Stephen Caldwell, director of homeland security and justice issues for the Government Accountability Office, told the Senate Commerce, Science and Transportation Committee July 7.

“As more baselines for other assets are approved by DHS [the service's parent, the Homeland Security Department], further cost growth may become apparent,” Caldwell said. “These cost increases present the Coast Guard with additional challenges involving potential tradeoffs associated with quantity or capability reductions for Deepwater assets.”

Also, although the service assumed the lead role for managing the Deepwater asset replacement in 2007, it has not always followed appropriate procurement processes, and its budget submissions to Congress do not include detailed cost estimates, GAO said.

Other problems include difficulties in hiring and retaining qualified acquisition personnel, and negative effects from delays associated with the construction of the National Security Cutter, which will result in “the loss of thousands of cutter operational days for conducting missions through 2017, “ Caldwell said. Mranwhile, the DHS agency is undertaking several mitigation strategies.

In addition, although the Coast Guard has taken steps to oversee the information technology modernization program, development of performance measures is in the early stages with no definite time scheduled for completion, Caldwell said.

He said the Coast Guard fully or partially met eight out of 11 performance goals in 2008, and did not meet goals for defense readiness, migrant interdiction and protection of living marine resources.