IG: Coast Guard not recouping on NSCs
- By Alice Lipowicz
- Jun 26, 2009
The Coast Guard will not seek to recoup the costs of technical and
structural problems related to the National Security Cutter under the
Deepwater acquisition program, according to a new report from the Homeland Security Department Inspector General Richard Skinner.
The service identified structural and technical problems with
the National Security Cutter program even though contract terms have
been met, the report of June 25 said. To deal with the problems, the
Coast Guard has renegotiated part of the contract and the problems are
being corrected, it added.
The report said the Coast Guard has experienced problems in
five Deepwater assets for which purchases were made under the $24
billion Deepwater acquisition effort. The prime contractor is a joint
venture of Lockheed Martin Corp. and Northrop Grumman Corp.
For two of the Deepwater assets, the $87 million 123-foot patrol
boats and the $3 million inflatable Prosecutor boats, the service is
seeking financial recoupment, the report said. The Coast Guard rejected
the patrol boats due to major structural flaws and is modifying
communications equipment on the Prosecutors so they can be put in
The service also cancelled the Fast Response Cutter program, for
which $43 million had been spent, and the vertical take-off unmanned
aerial vehicle program, for which $93 million had been spent. Both
programs were in the design phase. Designs for those assets met
contract terms, but the fast response cutter no longer met mission
needs and the aerial vehicle was deemed technically immature, the IG
“Because of problems encountered in their development,
construction, and testing phases, these acquisitions were canceled,
modified, or accelerated, in some instances creating or increasing gaps
in the Coast Guard’s operational capacity to accomplish its offshore
missions. The Coast Guard was left to determine what funds, if any, it
could recoup from the contractor for the unsuccessful acquisition
efforts,” the IG wrote.
The service has spent approximately $1.6 billion on development
of eight National Security Cutters. The first cutter, the Bertholf, is
in operation, while the second, the Waesche, is nearing completion, and
six others are in various phases of development.
In developing the first two cutters, the Coast Guard identified
structural changes to address design issues, the report said. If left
uncorrected, these design issues could result in fatigue cracks,
resulting in significantly increased maintenance costs and reduced
service life. To correct the problems, structural changes to the
Bertholf and Waesche will be made after delivery.
“The Coast Guard also renegotiated the contracts for the first
two National Security Cutters and thus resolved outstanding contracting
actions estimated at $300 million, added incentives for the contractor
to control costs, and aligned the contracts more closely with U.S. Navy
best shipbuilding practices. For National Security Cutters three to
eight, design modifications have been identified for completion during
the production phase,” Skinner wrote.
The report was addressed to Adm. Thad Allen, commandant of the Coast Guard.
Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.