Shipping, shipbuilding, offshore news

April 17, 2007

Coast Guard makes major changes to Deepwater

"We understand all too well what has been ailing us within Deepwater in the past five years," said Coast Guard Commandant Thad Allen today. "We've relied too much on contractors to do the work of government as a result of tightening budgets, a dearth of contracting expertise in the federal government, and a loss of focus on critical governmental roles and responsibilities in the management and oversight of acquisition programs."

Allen made the comments in statement issued today, that announced that, "working together with industry," the Coast Guard will make six fundamental changes in the management of the Deepwater program:

The Coast Guard will assume the lead role as systems integrator for all Coast Guard Deepwater assets, as well as other major acquisitions as appropriate.

The Coast Guard will take full responsibility for leading the management of all life cycle logistics functions within the Deepwater program under an improved logistics architecture established with the new mission support organization.

The Coast Guard will expand the role of the American Bureau of Shipping, or other third-parties as appropriate, for Deepwater vessels to increase assurances that Deepwater assets are properly designed and constructed in accordance with established standards.

The Coast Guard will work collaboratively with Integrated Coast Guard Systems to identify and implement an expeditious resolution to all outstanding issues regarding the national security cutters.

The Coast Guard will consider placing contract responsibilities for continued production of an asset class on a case-by-case basis directly with the prime vendor consistent with competition requirements if: (1) deemed to be in the best interest of the government and (2) only after we verify lead asset performance with established mission requirements.

Finally, Allen said he "will meet no less than quarterly with my counterparts from industry until any and all Deepwater program issues are fully adjudicated and resolved. Our next meeting is to be scheduled within a month."

Allen also announced that the Coast Guard will permanently decommission eight 123-foot patrol boats converted under the Deepwater program.

Those conversions will be the subject of a hearing tomorrow by the House Committee on Transportation and Infrastructure

Multiple extensive studies and analyses by both Coast Guard engineers and third-party naval architects and marine engineers over many months have described the failures in these vessels, said Allen.

Any strategy to permanently repair these cutters and return them to service would require an iterative, phased approach over a long period of time with uncertain costs and outcome. Initial estimates indicate it could cost well over $50 million.

"The excessive cost and time associated with continuing to pursue an uncertain resolution to these structural problems has convinced me--with the recommendation of my chief engineer --that permanently removing these cutters from service while recouping any residual value and redirecting funds to other programs is in the best interest of the government." said Allen.

Allen noted that the Coast Guard will continue to mitigate the loss of the eight boats by such strategies as multi-crewing 110-foot boats and an extension of the memorandum of understanding for three Navy 179-foot patrol craft, while working on acquiring a new platform replace the entire fleet of 110-foot patrol boats.

"We will pursue all viably available contractual, legal or other options for recouping any funds that might be owed the government as a result of the loss of these hulls," said Allen.