GAO: Costs surge on Deepwater project

The Coast Guard continues to struggle with key procurement and budget matters

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.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Reader Comments

Wed, Jul 8, 2009 Michael DeKort

A significant portion of the budget increase is to cover the hundreds of millions of dollars the Coast Guard is paying the contractors to do work they were already on the hook to provide. This is occurring because the Coast Guard covered for huge mistakes on the 123s that were then propagated to the NSC. Since the Coast Guard (and DHS IG) allowed Lockheed to get away with saying a huge portion of their work was not in the requirements (which the Coast guard and IG did to cover for their lack of oversight) they were able to modify the contract and ask for hundreds of millions more to do work they already were under contract to perform. To make matters work that work on the 123s and NSC is severely flawed. Finally the Coast Guard and other government organizations have now gone 2 years in not being able to secure refunds to offset these costs. As a matter of fact a recent DHS IG report actually contradicts statements they have made in previous public reports and invalidates huge portions of the refund requests. Hopefully the DoJ will step up their involvement in our case and help us sort this out.

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