Coast Guard official faces tough questions on fleet overhaul

WASHINGTON—Members of a key House Appropriations subcommittee grilled the Coast Guard's top admiral Thursday on the cost and management of a program to repair and replace the Coast Guard's aging patrol boats and aircraft.

The Coast Guard program, called the Deepwater Project, began in 2002 with a contract for $15 billion over 20 years. The Coast Guard on Thursday told the Subcommittee on Homeland Security that it now would cost $24 billion over 25 years.

Members of the committee asked the Coast Guard commandant, Adm. Thomas Collins, whether taxpayers' money was being spent properly and why some key parts of the program weren't subject to competitive bidding.

The subcommittee's chairman, Rep. Harold Rogers, R-Ky., noted that the Coast Guard presented four options for Deepwater last month and the subcommittee asked it to return with only one plan.

"You just came back with the most expensive one of the four plans. I'm not sure whether there is enough money for this," Rogers said. "You have chosen a Cadillac Seville with all the options. We are going to have to work to fit you into something we can afford. Maybe not a Chevy but something close."

Rogers asked Collins how the Coast Guard intended to keep its rust-bucket fleet of 40- and 50-year-old cutters and patrol boats afloat when some wouldn't be replaced under the Deepwater project until 2018.

"Failing to adequately plan is a hallmark of poor management and that is precisely why I have been so stricken by this program," he said in an opening statement.

A contract to manage Deepwater was awarded to Integrated Coast Guard Systems, which is owned by defense contractors Lockheed Martin and Northrop Grumman. Those contractors will provide the most costly boats and ships and will upgrade and replace long-range patrol aircraft, without competitive bidding.

"The same people who are managing the program end up doing the biggest part of the work," said the ranking Democrat on the subcommittee, Rep. Martin Sabo, D-Minn. "Homeland Security and Transportation Security Agency are permeated with the same lack of management."

Rep. David Obey, D-Wis., told Collins that while the Coast Guard needs to replace its aging equipment quickly, "I don't believe Congress should just write you a blank check to do it."

Obey said he was concerned that the two largest Deepwater procurements—eight 378-foot cutters and 25 only slightly smaller cutters—amounted to $10.3 billion, or 43 percent of the total project.

"They haven't been competitively awarded. Why is that good for the taxpayer?" Obey said.

Collins said the service was exercising good stewardship in decisions to upgrade and renovate boats and aircraft.

"Anything over $10 million that they (the contractors) are doing in house they must notify the Coast Guard," he said. He also said the Coast Guard was asking for outside estimates.

"I do not think that this substitutes for competition," Obey said.

Collins said repairing and replacing the old boats was "absolutely critical." He said that of the 49 110-foot cutters the Coast Guard now operated, only 25 percent were considered fully mission capable. The operational readiness rating is about the same for the 123-foot patrol boats.

The commandant told Congress earlier that the old 110-foot cutters and 123-foot patrol boats had had 23 hull breaches since 2001 that required emergency dry-dock repairs to rusted and damaged steel plates. He added that each of the 12 378-foot cutters that operate in the Pacific Ocean had a significant engine, hydraulic or refrigeration breakdown on every patrol.