[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]





                        DEEPWATER IMPLEMENTATION

=======================================================================

                                (109-14)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 20, 2005

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

                                 _____

                     U.S. GOVERNMENT PRINTING OFFICE
                             WASHINGTON: 2006        

21-703 PDF

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-    JAMES L. OBERSTAR, Minnesota
Chair                                NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York       PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
WAYNE T. GILCHREST, Maryland         Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
PETER HOEKSTRA, Michigan             ROBERT MENENDEZ, New Jersey
VERNON J. EHLERS, Michigan           CORRINE BROWN, Florida
SPENCER BACHUS, Alabama              BOB FILNER, California
STEVEN C. LaTOURETTE, Ohio           EDDIE BERNICE JOHNSON, Texas
SUE W. KELLY, New York               GENE TAYLOR, Mississippi
RICHARD H. BAKER, Louisiana          JUANITA MILLENDER-McDONALD, 
ROBERT W. NEY, Ohio                  California
FRANK A. LoBIONDO, New Jersey        ELIJAH E. CUMMINGS, Maryland
JERRY MORAN, Kansas                  EARL BLUMENAUER, Oregon
GARY G. MILLER, California           ELLEN O. TAUSCHER, California
ROBIN HAYES, North Carolina          BILL PASCRELL, Jr., New Jersey
ROB SIMMONS, Connecticut             LEONARD L. BOSWELL, Iowa
HENRY E. BROWN, Jr., South Carolina  TIM HOLDEN, Pennsylvania
TIMOTHY V. JOHNSON, Illinois         BRIAN BAIRD, Washington
TODD RUSSELL PLATTS, Pennsylvania    SHELLEY BERKLEY, Nevada
SAM GRAVES, Missouri                 JIM MATHESON, Utah
MARK R. KENNEDY, Minnesota           MICHAEL M. HONDA, California
BILL SHUSTER, Pennsylvania           RICK LARSEN, Washington
JOHN BOOZMAN, Arkansas               MICHAEL E. CAPUANO, Massachusetts
JIM GERLACH, Pennsylvania            ANTHONY D. WEINER, New York
MARIO DIAZ-BALART, Florida           JULIA CARSON, Indiana
JON C. PORTER, Nevada                TIMOTHY H. BISHOP, New York
TOM OSBORNE, Nebraska                MICHAEL H. MICHAUD, Maine
KENNY MARCHANT, Texas                LINCOLN DAVIS, Tennessee
MICHAEL E. SODREL, Indiana           BEN CHANDLER, Kentucky
CHARLES W. DENT, Pennsylvania        BRIAN HIGGINS, New York
TED POE, Texas                       RUSS CARNAHAN, Missouri
DAVID G. REICHERT, Washington        ALLYSON Y. SCHWARTZ, Pennsylvania
CONNIE MACK, Florida                 JOHN T. SALAZAR, Colorado
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
VACANCY

                                  (ii)




        SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

                FRANK A. LOBIONDO, New Jersey, Chairman

HOWARD COBLE, North Carolina         BOB FILNER, California, Ranking 
WAYNE T. GILCHREST, Maryland         Democrat
PETER HOEKSTRA, Michigan             CORRINE BROWN, Florida
ROB SIMMONS, Connecticut             GENE TAYLOR, Mississippi
MARIO DIAZ-BALART, Florida           JUANITA MILLENDER-McDONALD, 
DAVID G. REICHERT, Washington,Vice-  California
Chair                                MICHAEL M. HONDA, California
CONNIE MACK, Florida                 ANTHONY D. WEINER, New York
LUIS G. FORTUNO, Puerto Rico         BRIAN HIGGINS, New York
CHARLES W. BOUSTANY, Jr., Louisiana  BRIAN BAIRD, Washington
DON YOUNG, Alaska                    JAMES L. OBERSTAR, Minnesota
  (Ex Officio)                         (Ex Officio)

                                 (iii)



                                CONTENTS

                               TESTIMONY

                                                                   Page
 Collins, Admiral Thomas A., Commandant, United States Coast 
  Guard, accompanied by Rear Admiral Patrick M. Stillman, Program 
  Executive Officer, Coast Guard Integrated Deepwater System, 
  United States Coast Guard......................................     3
 Wrightson, Margaret, Director of Homeland Security and Justice 
  Issues, Government Accountability Office.......................     3

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Collins, Admiral Thomas A., Commandant..........................    25
 Wrightson, Margaret.............................................    39

 
                        DEEPWATER IMPLEMENTATION

                              ----------                              


                       Wednesday, April 20, 2005

        House of Representatives, Committee on 
            Transportation and Infrastructure, Subcommittee 
            on Coast Guard and Maritime Transportation, 
            Washington, D.C.

    The Committee met, pursuant to call, at 2:00 p.m., in room 
2167, Rayburn House Office Building, Hon. Frank LoBiondo 
[chairman of the committee], presiding.
    Mr. LoBiondo. The Subcommittee will come to order.
    The Subcommittee is meeting this afternoon to review the 
Coast Guard's Deepwater program and the Service's recent 
proposal to revise the Deepwater Implementation schedule. The 
Coast Guard's integrated Deepwater system is designed to 
replace or modernize more than 90 ships and 200 aircraft 
currently utilized by the Coast Guard to carry out missions 
more than 50 miles from shore. The new assets procured under 
this program will greatly expand the Coast Guard's capabilities 
to perform the Service's many traditional and homeland security 
missions.
    The original Deepwater Implementation plan and asset 
mixture were devised well in advance of the events of September 
11th. Since that time, the Coast Guard has taken on greater 
homeland security responsibilities in addition to its ongoing 
traditional missions. Therefore, the recent revision of the 
Deepwater plan was greatly needed.
    While I appreciate the Coast Guard's long and hard labor to 
get this revised plan approved by the Department of Homeland 
Security and the Office of Management and Budget, I do have 
some concerns about the long-term adequacy of the plan. First, 
it will not surprise anyone who has heard my comments about the 
program over the last three years that I am very disappointed 
that the plan does not accelerate the acquisition of new 
assets.
    And while I certainly recognize the constraints on our 
budget, I want everyone to understand that for every year we 
delay the purchase of new assets, our Coastguardsmen and our 
taxpayers lose in two ways. First, the cost of maintaining 
existing assets is dramatically increasing. This eats up the 
already scarce resources available to purchase replacement 
assets and only increases the total cost of the program. 
Second, new, more capable assets are not available to improve 
the performance of the Service's operation, undermining their 
ability to keep our ports and waterways safe and secure.
    My second major concern is that the revised plan is not as 
specific as Congress had requested. The plan does not provide 
for a time line beyond 2010 to fully explain when the legacy 
asset will be replaced, nor does it provide a spending plan 
beyond fiscal year 2006. Finally, the plan does not 
specifically spell out the benefits of making changes to 
certain assets. I expect the Service to provide Congress with a 
revised report addressing these concerns as soon as possible.
    I look forward to hearing the testimony of our witnesses 
today. Now I'd like to turn it over to Mr. Filner.
    Mr. Filner. Thank you, Mr. Chairman. We welcome our 
Admirals here today.
    It seems to me, Mr. Chairman and Admiral, and I hope you 
can prove us wrong today, that Deepwater is in deep trouble. 
The new post-9/11 requirements analysis provided to Congress by 
the Coast Guard seems to me to be so devoid of reality that it 
is beyond belief. For example, how in a post-9/11 environment 
can the Coast Guard need fewer national security cutters? How 
in a post-9/11 environment can the Coast Guard need fewer fast 
response cutters? How in a post-9/11 environment can we 
suddenly decide to overhaul old C-130 planes, old HH65 Dolphin 
helicopters and old HH60 Jayhawk helicopters rather than 
replacing them with new ones?
    Deepwater is changing from a program to modernize the Coast 
Guard with new equipment to a program that seems on our 
analysis that buys too few new ships and keeps old aircraft.
    Now, the concept behind the Deepwater concept was, to mix a 
metaphor, groundbreaking. Maybe we should say icebreaking. It 
started with examining all Coast Guard mission requirements. 
Then the Coast Guard would buy the mix of assets to best 
accomplish these missions. And the entire fleet mix of aircraft 
and cutters were going to be on the table.
    Today it seems we are presented with a program that will 
leave the Coast Guard with fewer cutters than before and a 
fleet of aircraft that will be over 40 years old when the 
Deepwater acquisition program is completed. Instead of being an 
icebreaking procurement, Deepwater is becoming just another 
vessel replacement program.
    So Mr. Chairman, I think Deepwater is in deep water or doo-
doo, whatever we would like to use. And the Administration 
isn't giving the Coast Guard the support that they need. It 
does not seem to be committed to giving the men and women of 
the Coast Guard who risk their lives every day to save others 
the best equipment that can be bought. Instead, they are 
forcing the Coast Guard to fulfill all of their future missions 
based on the budget restraints of today.
    At the hearings that this Subcommittee held on the Coast 
Guard budget, I stated something to the effect that something 
smelled a little fishy about the Coast Guard's decision to 
rebuild the 20 year old HH65 Dolphin helicopters instead of 
replacing this older aircraft. Mr. Chairman, I hope that 
today's hearing will shed more light on the basis for making 
that decision and others like it, that the Coast Guard will be 
able to compare the cost and performance of an old versus a new 
helicopter.
    Mr. Chairman, like you, I remain committed to the Deepwater 
program. However, given the direction of this program in a 
post-9/11 environment, I do not think that the Coast Guard of 
the future will live up to its motto: Semper Paratas--always 
ready. I hope, Mr. Commandant, that I'm wrong. But we look 
forward to your testimony.
    Mr. LoBiondo. Thank you.
    Congressman Higgins, would you like to open with anything?
    Mr. Higgins. No, thank you, Mr. Chairman.
    Mr. LoBiondo. Okay, thank you. Congressman Fortuno, would 
you like to open with anything?
    Mr. Fortuno. No, thank you, Mr. Chairman.
    Mr. LoBiondo. Okay, thank you.
    We are going to introduce our panel today. We have Admiral 
Tom Collins, Commandant of the United States Coast Guard, who 
is accompanied by Admiral Stillman, who will help support with 
technical answers, he is the Program Executive Officer of the 
Coast Guard Integrated Deepwater System; and Ms. Margaret 
Wrightson, Director of Homeland Security and Justice Issues for 
the GAO.
    Admiral Collins, the floor is yours.

  TESTIMONY OF ADMIRAL THOMAS A. COLLINS, COMMANDANT, UNITED 
  STATES COAST GUARD, ACCOMPANIED BY: REAR ADMIRAL PATRICK M. 
  STILLMAN, PROGRAM EXECUTIVE OFFICER, COAST GUARD INTEGRATED 
     DEEPWATER SYSTEM, UNITED STATES COAST GUARD; MARGARET 
 WRIGHTSON, DIRECTOR OF HOMELAND SECURITY AND JUSTICE ISSUES, 
                GOVERNMENT ACCOUNTABILITY OFFICE

    Admiral Collins. Thank you, Mr. Chairman and distinguished 
members of the Subcommittee. It is a pleasure to be with you, 
along with my PEO, Program Executive Officer, Rear Admiral Pat 
Stillman, and also with Ms. Wrightson from GAO that has been a 
great partner with us in continuing to take a critical yet 
positive view of our Deepwater program and providing us wise 
counsel on adjustments as we go forward.
    We clearly welcome the opportunity to discuss the Coast 
Guard's Deepwater project and what we think is the very 
positive impact it will have on our missions and more 
importantly, our ability to assure a safe and secure maritime 
environment in the United States. The Deepwater, of course, is 
the centerpiece of the Coast Guard's overall transformation in 
the post-9/11 environment. It might top capital priority. It 
does play a fundamental and critical role in building a more 
ready and capable 21st century Coast Guard.
    The Deepwater government-industry partnership, from our 
perspective, has achieved many program milestones, important 
program milestones during 2004, and has strengthened 
Deepwater's foundation by incorporating many of the program and 
contract management improvements that GAO has recommended to 
us. Most importantly, this year's approval of a revised post-9/
11 Deepwater mission needs statement and associated 
implementation plan are the most significant programmatic 
developments since we awarded Deepwater contract in 2002. With 
the strong support of the Department of Homeland Security, the 
Administration and Congress, we will now position the Deepwater 
program to play an even greater role in reducing the future 
risk of a terrorist event and other security events in the 
homeland.
    The implementation plan establishes requirements for 
improved capabilities necessary to perform the Coast Guard's 
full range of post-9/11 missions while concurrently sustaining, 
modernizing or converting select legacy assets to operate 
effectively until replaced. The new plan moves the design of 
the fast response cutter and offshore patrol cutter by 10 years 
and 5 years to 2007 and 2010. It also leverages our existing 
asset base of C-130s, HH60s and HH65s through conversion what 
we feel is a cost-effective, high performance aviation 
Deepwater solution.
    The plan also incorporates aerial use of force, strategic 
lifts and enhanced force protection and other critical homeland 
security capabilities. I look forward to discussing these and 
other requirements adjustments this afternoon.
    The Coast Guard 2006 budget, of course, includes $966 
million for Deepwater, a 33 percent increase over last year's 
appropriation. We think it is a wise investment, a wise 
investment in our ability to deliver the services we do. The 
national security cutter and the offshore patrol cutter are the 
centerpieces of the Integrated Deepwater system. And the third 
national security cutter is funded in the 2006 budget. Last 
month, together with Secretary and Mrs. Chertoff, I had the 
great pleasure of participating in a keel-laying ceremony for 
our first national security cutter in Pascagoula, a significant 
milestone in Deepwater's transformation of the Coast Guard.
    As I have indicated, with the 2006 budget, we have moved 
forward the design work, engineering and long lead time 
materials to the offshore patrol cutter.
    Funding is also included in the 2006 budget for legacy 
asset sustainment projects, such as the HH65 re-engineing and 
medium endurance cutter mission effectiveness projects. These 
initiatives are absolutely critical to sustain capabilities 
today while acquisition of new and enhanced Deepwater assets is 
vital to ensuring the Coast Guard has the right capabilities 
tomorrow.
    Re-engineing the 65 helicopter fleet continues to be my 
highest aviation concern. We are moving out at best speed at 
our aviation repair and supply center to restore operational 
safety and reliability to these critical assets. We are looking 
at ways to speed things up, including accelerating engine 
delivery, standing up a second re-engineing facility and 
purchasing additional aircraft. I am confident we will complete 
the re-engineing in the first half of 2007. Mr. Chairman, your 
air station up in Atlantic City, as you know, has already been 
delivered the first of these improved aircraft.
    Our fiscal year 2006 Deepwater budget and our revised 
implementation plan have been carefully, carefully thought out, 
with third party consultation, private sector industry 
consultation and review. It is the right way forward with our 
modernization efforts. With the continued support of the 
Administration, this Committee and Congress, I know that we 
will succeed in putting the right tools in the very capable 
hands of Coast Guard men and women and will succeed in 
delivering the robust maritime safety and security capability 
that America expects and deserves from the Coast Guard.
    Mr. Chairman, again, thanks for the opportunity to testify 
on this very, very important issue. I will be happy to answer 
your questions at the appropriate time.
    Mr. LoBiondo. Thank you, Admiral Collins.
    Ms. Wrightson.
    Ms. Wrightson. Thank you very much.
    Good afternoon, Mr. Chairman and members. I am pleased to 
be here today to discuss Deepwater program implementation, 
focusing on the results of our work for this Subcommittee on 
the condition of the Coast Guard's legacy Deepwater assets, 
actions the Coast Guard has taken to maintain them, and on the 
management challenges the Coast Guard faces in acquiring 
replacements.
    The bottom line of our work to date is this: the costly and 
important Deepwater program will continue to carry substantial 
risk to the Government and therefore needs constant monitoring 
and management attention to successfully accomplish its goals 
of maximizing effectiveness, minimizing total operation costs 
and satisfying the assets' users. The revised implementation 
plan is the most recent evidence of the complexity and 
challenges the Coast Guard faces to effectively manage this 
program and adapt to its changing mission needs in a post-9/11 
environment.
    With respect to these risks, our work makes three main 
points. First, the need to replace or upgrade deteriorating 
legacy assets is considerable. While the Coast Guard lacks 
measures that clearly demonstrate how this deterioration 
affects its ability to perform Deepwater related missions, it 
is clear that the Deepwater legacy assets are insufficient in a 
post-9/11 environment.
    Second, although the need to replace and upgrade assets is 
strong, there are still major risks in the Coast Guard's 
acquisition approach that will only be increased under a more 
aggressive acquisition schedule. The cost increases and 
schedule slippages that have already occurred are warning 
signs. We will continue to work with the Coast Guard to 
determine how best to manage these risks, so the Deepwater 
missions can be accomplished in the most cost-effective way.
    In that regard, I would like to say that I would like to 
compliment the Coast Guard on their very nimble approach to 
responding to GAO's findings and recommendations, even while we 
are conducting our work. They are to be complimented on that.
    Third, there are signs that as the Deepwater program moves 
ahead, the Coast Guard will continue to report more problems 
with sustaining existing assets, together with the attendant 
need for additional infusions of funding to deal with them. 
Some of these problems, such as those for the 378 foot cutters, 
are included in a compendium the Coast Guard now uses to set 
sustainment priorities and plan budgets. But they have not been 
funded because they pertain to assets that were the first to be 
replaced.
    However, projects to address these problems nevertheless 
are likely to be needed. We will continue to work with the 
Coast Guard to determine if there is a more systematic and 
comprehensive approach to managing these assets and keeping the 
Congress abreast of the potential bill for sustaining them.
    Turning to some of the most important details, our analysis 
of the most recent five years shows that the condition of 
Deepwater legacy assets generally declined during the period, 
but the Coast Guard's available condition measures do not 
demonstrate the rate of decline to be as rapid or clear-cut as 
asserted. In particular, during fiscal year 2000 to 2004, the 
Coast Guard's various condition measures for aircraft and 
cutters did generally trend downward, but there were year to 
year fluctuations and not all assets showed similar trends.
    However, we believe these trends should be viewed with 
caution. While there is no systematic, quantitative evidence 
sufficient to demonstrate that Deepwater legacy assets are 
headed for a train wreck, this does not mean that the assets 
are in good condition or have been performing their missions 
safely, reliably and at levels that meet or exceed Coast Guard 
standards. Evidence from our site visits showed aging and 
obsolete systems and equipment as a major cause of the 
reduction in mission capabilities for a number of Deepwater 
legacy aircraft and cutters. It is clear that these problems 
will need to be addressed if the assets are to remain able to 
perform their missions at or near current levels until 
replacement assets or upgrades can become operational.
    Turning to Coast Guard efforts to address the problems of 
their legacy assets, beginning in 2002, the Coast Guard has 
annually issued a compendium consolidating information needed 
to make planning and budget decisions regarding maintenance and 
upgrades. Also, and very significantly, Coast Guard crews have 
been spending increasingly more time between missions to 
prepare for the next deployment. Such efforts are likely to 
help prevent a more rapid decline in the condition of these 
assets but it is important to note that even with increasing 
amounts of maintenance, these assets are still losing mission 
capabilities due to equipment and system failures.
    In reality, our work suggests that simply working harder 
may not be enough. In this regard, the Coast Guard's Pacific 
Area Command has been experimenting with a different approach 
to maintaining and sustaining its 370 foot cutters that may be 
needed in light of slippages in dates for their replacements. 
As a first step, command officials have launched an initiative 
applying new business principles to the problem including 
ensuring that operations and maintenance staffs work more 
closely together to determine priorities and accepting the 
proposition that with constrained funding, not all cutters may 
be fully capable to perform all missions.
    The Pacific Area Command approach has potential, but even 
there, the commander has told us that in order for the 
Deepwater legacy assets to be properly maintained until their 
replacements become operational, the Coast Guard will still 
have to provide more focused funding for legacy asset 
sustainment that in recent years.
    With respect to the challenges the Coast Guard faces to 
replace these assets, from the outset, we have expressed 
concern about the risks. Last year, we reported that well into 
the second year, keep components needed to manage the program 
and oversee the contractor have not been effectively 
implemented. The Coast Guard also had not updated its 
integrated master schedule and costs were rising above original 
estimates.
    More recently, we have seen some slippages for the national 
security cutter and emergency acceleration such as the HH65. 
Unobligated balances are growing. We have also seen at least 
one instance of serious performance problems, these being the 
hull breaches in the first converted 123 patrol boats.
    We have made numerous recommendations to improve the 
program's management and oversight, and the Coast Guard has 
agreed with all of them. In most cases, however, while actions 
are underway to address our concerns, management issues remain 
that may take some time to fully address. Additionally, there 
is uncertainty due to the recently revised mission needs 
statement, or MNS, and implementation plan, which at the end of 
the day will certainly increase costs and require further 
schedule adjustment.
    We have recently been requested to review this plan to 
determine whether it is sound and adequate to meet the Coast 
Guard's changing mission needs and what further challenges it 
might pose for the program's management and oversight. We 
expect to begin this work in the coming months.
    In sum, the need to replace or upgrade deteriorating assets 
is considerable. However, given all the attendant risks, 
management problems and other uncertainties, a more aggressive 
schedule does not necessarily translate directly into a more 
efficient and effective replacement strategy.
    Finally, and no matter what schedule is adopted, the Coast 
Guard will continue to face a daunting challenge to effectively 
sustain its legacy assets in the meanwhile. We look forward to 
continuing our work for your Subcommittee to identify program 
and management improvements and risk mitigation strategies 
through our productive oversight and engagement with the Coast 
Guard.
    Thank you very much.
    Mr. LoBiondo. Thank you.
    Mr. Filner, would you like to start off?
    Mr. Filner. Admiral Collins, you started off with thanking 
GAO for their partnership. I'm not sure they are partners, they 
are oversight. But if you just look at the headings for their 
report, I mean, this is devastating. I do not know how else to 
say it. I wonder if you might comment on it, along with my 
opening statement about how in a post-9/11 world we were 
decreasing the assets instead of increasing them, which is what 
GAO said. But they went a lot further than that.
    I would not be too proud of this report card on what has 
been accomplished. Do you want to comment on that?
    Admiral Collins. Sure. I think we do have a partnership 
with GAO. We welcome their comments, their participation and 
their oversight. I think we have benefitted from it.
    Deepwater is a big program. It does have risks associated 
with it. I would submit a different acquisition approach, a one 
by one, piece by piece one would even have greater risks to us 
and would ensure a non-system approach to our world of work. So 
I think it is just the type of approach, acquisition approach, 
it is innovative, it is creative and I think in the end it is 
going to produce the product that we need.
    The issue about the numbers of assets, we are not building 
a one-for-one replacement. Deepwater was never about whether it 
was the pre-9/11 requirement or the new implementation plan. We 
are building a system. And the system yields for certain 
performance outcome. And that outcome is going to compare to 
the 1998 baseline and now 2001 baseline in terms of 
performance.
    If you look at some of the asset types relative to the 
contract awarded in June of 2002, there are some that are in 
the new implementation plan, some that are higher, some that 
are lower. Some are given in a range. The fact of the matter is 
that we will continue to look at the performance of the system 
and make adjustments along the course of this 20 year plus 
program as is deemed necessary.
    Each individual, the system is much, much more capable than 
the assets in the old system. So the issue is the capability of 
each system than the numbers of each system. Take a look at any 
one of the Deepwater asset when they're through, and they will 
be incredibly more capable one-for-one, and as a system much 
more capable.
    So I think you have got to look at the output of the system 
and what the system delivers. In addition, the old cutter, say 
a medium endurance cutter or high endurance cutter with the 
crew we have is getting 185 program days a year. Under the 
Deepwater construct, in terms of the technologies we are 
embedding into these platforms and the crewing concept, 
alternative crewing concepts that we are driving into these 
systems, we hope to get 230, 235, 240 days out of each 
platform. So you are going to get more out of the platform, you 
are going to get more out of each platform, and a much more 
capable platform.
    The surveillance performance of the new system alone is 
dramatically, I mean dramatically improved over independent 
ship ops that we have today. So we are concentrating on 
performance. We are concentrating on a systems approach and we 
are concentrating on leveraging each asset in terms of 
operating time to get the most we can out of the system. We 
will continue to evaluate it over time.
    Mr. Filner. You haven't convinced me. We say again and 
again up here, and you say it, after 9/11, and with the 
reorganization of the Department of Homeland Security, the 
Coast Guard was expected to perform its traditional duties and 
a whole set of new ones. And I just, by your own figures, I do 
not see that happening. You are comparing something that I was 
not talking about. I said before 9/11, your own ICGS study said 
you needed this many, this many, this many to do what you say 
you're going to do. And yet the post-9/11 numbers are below 
that for those for the Deepwater assets.
    So I do not see how your argument stands up. It looks to 
me, Admiral, and correct me if I'm wrong, that you're 
responding to a budget as opposed to responding to the need. 
And the budget is not sufficient, and I guess you do not want 
to say that, but it looks to me that your budget is 
insufficient and you're not getting the support you need by you 
own analysis to get up there, to get up to those capabilities 
that we all want. It just looks like you're being run by the 
OMB rather than OMB being told what the Department of Homeland 
Security needs are.
    Admiral Collins. We're managing three variables: cost, 
schedule and performance, and trying to keep those in balance, 
understand the budget realities of the day and ensure we get 
the performance out of the system we do. I think you have to go 
through each asset category in Deepwater and compare what we 
had. Some are higher. And that is all as a result of the 
performance gap analysis we did and the new capabilities that 
we need to embed in our system.
    I think the most important thing coming out of the new 
implementation plan, the most important thing, is building the 
right capabilities into each of the system elements. We have 
consensus in the Administration, across the Administration, on 
those capabilities that need to be added or embedded into the 
Deepwater systems. We have a new missions needs statement that 
reflects that. And we have a budget submitted up here in 2006 
and you will see in the out years that are very consistent with 
that.
    That is a huge accomplishment, to understand what the 
capability adjustments are based on 9/11, get them vetted, get 
them approved and have them now into the contract. I am very, 
very pleased that we are able to do that. It positions us for 
adjustments, if we need to, along the way. It is capability 
first, capacity second and line
    Mr. Filner. The second time around I am going to do more 
talking than you. But you said some are higher. Which ones are 
higher? I have your list here. The ones that are higher are the 
ones that you kept the old ones in and you're not building new 
ones, you used the old ones.
    Admiral Collins. The contract baseline that was awarded in 
2002 was 93 short range helicopters and the 24 billion end of 
the range is 95.
    Mr. Filner. Aren't those the old helicopters?
    Admiral Collins. The HH
    Mr. Filner. You just gave a very long thing, and you are 
pointing to two helicopters, even if we accept your own data 
here. That is what you pointed to, two.
    I will get my next turn in.
    Mr. LoBiondo. Admiral Collins, I understand what you are 
saying, and I certainly agree that what is important are the 
capabilities in the systems and how we put these together. But 
I am troubled and having trouble connecting the dots with what 
will be available for the Coast Guard to perform its mission 
before the new assets come online.
    Ms. Wrightson, you talked about this a little bit. But what 
performance measures would be most useful to track the 
deterioration and availability of legacy assets? You say that 
while the data may be okay, it may not be okay and there is a 
warning flag here. And this is pretty serious, because if in 
fact the tracking data is not accurate and we have catastrophic 
failures that we cannot deal with, where does that leave us 
before the new assets come online?
    Can you offer any suggestions?
    Ms. Wrightson. Let me see if I can answer it. Right now the 
condition measures the Coast Guard has are not adequate to 
track the relationship between problems in the condition of the 
assets and what impact that may have on performance in terms of 
degradation.
    Mr. LoBiondo. Does not have in place?
    Ms. Wrightson. Does not have in place. That was in fact one 
of the surprising things we found when we did our work.
    Working closely with the Coast Guard for many months, we 
looked at every possible summary measure and indicator of 
conditions in order to be able to establish a trend over time 
in the condition of those assets. While we saw the trend as 
declining, the measures, when you brought them together, had 
mixed results.
    As a result of that, we have engaged the Coast Guard in a 
dialogue about developing measures that are more robust and 
have greater granularity to them and are readiness oriented. In 
doing that, the Coast Guard may better be able to track this 
information back to the most critical conditions and allocate 
its resources in a manner that will have a more cost-effective 
use of those assets over time until they can be replaced.
    So that is really the sum total of what we saw. The Coast 
Guard is moving out on the problem, and with your staff's 
permission, we have extended our work to look more deeply into 
what recommendations we might be able to make for particular 
measures or types of measures that will help the Coast Guard. 
Lacking better measures, the Coast Guard cannot now, for 
example, tell you when a cutter is limping back, what that 
means versus when a cutter is coming back under full sail and 
what the consequences of this situation are were for mission 
performance.
    I want to take a minute if I can give you one example. The 
Coast Guard has a measure for the HH65, which showed that over 
the five years our analysis covered, the asset was performing 
at or above the most common summary measure of condition the 
Coast Guard uses, which is availability. Yet at the same time, 
the HH-65 is the Coast Guard's highest priority for spending to 
rectify safety and reliability problems. So we have an issue 
with degradation of mission. The HH-65 is operating under 
restrictions at the same time where the condition measures are 
showing that it is meeting standards.
    The C-130 is the same. If AC-130 goes out on a mission, but 
its APS-137 radar is in trouble, then I will just quote the 
Kodiak, Alaska air crew who told me that "the situation is 
essentially like going up in an aircraft and looking through a 
straw to try to find a boat." What point is it to deploy that 
asset if it cannot perform its mission? So we are looking for a 
greater linkage between condition measures and mission 
performance that would help the Coast Guard make better 
decisions about how to use its scarce maintenance dollars to 
maximize performance.
    Mr. LoBiondo. So you are saying that you are engaged in 
developing the measurements that could give us that 
information. Can you give us
    Ms. Wrightson. It is an important question. GAO does not, 
as a matter of policy, tell agencies the measures they should 
have, in part because after the fact we go back and audit 
those, and if they are ours, we are poorly positioned to offer 
additional advice. But what we do do is we make recommendations 
on the types of measures you need, and we can look at the Coast 
Guard's and determine what the pros and cons are of various 
measures and what it would take to get to where we think the 
Coast Guard needs to be. We can work with them on that, but we 
will not substitute our judgment for the Coast Guard's on which 
measures.
    Mr. LoBiondo. Okay, so you are identifying a deficiency, 
you are strongly suggesting that we need to be developing these
    Ms. Wrightson. Better readiness
    Mr. LoBiondo. Better readiness standards, capabilities, 
measurements. You are working with the Coast Guard to determine 
if what they are going to put in place to meet these 
requirements will in fact do what we think they will do. You 
will analyze what they recommend.
    Ms. Wrightson. I wish I had said it that well. That is 
exactly right.
    Mr. LoBiondo. Can you suggest where we are in the time 
frame of this?
    Ms. Wrightson. Well, the Coast Guard, as I said, is pretty 
nimble. It seems like when GAO goes out and finds a problem, 
before I can get the report written, the Coast Guard is 
actively engaging with us in a way to fix it.
    I think we are months away from coming to grips with how we 
feel about their measures for cutters. And that's where they 
are the farthest along. I am not sure, the Coast Guard right 
now thinks that it needs--I do not want to put words in their 
mouth--but is not quite so sure about what kind of measures, if 
any, it would need for its aircraft, because aircraft do not go 
up if they are not ready.
    But I think we are talking months, not years. It is not 
like their effort to measure homeland security performance. It 
is not that hard.
    Mr. LoBiondo. Okay. Admiral Collins, do you agree with what 
Ms. Wrightson just said?
    Admiral Collins. Absolutely. We would like to keep refining 
our readiness metrics and have those that allow us to make the 
best decisions possible. So we take that advice seriously and 
certainly we would like to develop even more comprehensive 
measures.
    I should note that there are a series of surrogate or 
indirect measures that certainly say there is a bunch of smoke. 
Days with the cutters that are without a casualty, for example, 
or the amount of money that is needed to be spent on basic 
systems above and beyond the standard allowance on a given 
vessel. I think if you look to do a trend assessment of what we 
are spending above our maintenance base to address casualties 
on their subsystems, almost every class, it is above 50 
percent, over the last three or four years, it is about 50 
percent growth in the amount of money.
    So from a dollar perspective, we are spending more. If you 
plotted that curve versus the curve days free from casualties, 
the number of days free from casualties is going down. You want 
that number to go up. And that number is going down. So we are 
spending more, getting less in terms of readiness, with that 
macro type of an assessment.
    Clearly, if we could get more refined tools that truly 
linked the performance dimension, certainly we are very, very 
interested in doing that, Mr. Chairman.
    Mr. LoBiondo. So it would not be unreasonable for the 
Committee to expect an answer to the question of what these new 
measurement capabilities/tools will be in a couple of months?
    Admiral Collins. Sir, I will be glad to provide for the 
record what our game plan is and what our time line is for you, 
sir.
    Mr. LoBiondo. Okay. I have quite a bit more. But I want to 
go to Mr. Reichert.
    Mr. Reichert. Thank you, Mr. Chairman.
    Just a couple of comments. I noticed, Admiral, in your 
written statement that you refer to your primary focus on 
September 10th, 2001 was safe, efficient use of America's 
waterways. After September 11th, that changed dramatically.
    For law enforcement, Columbine was a defining date. We had 
to change the way that we approached and solved problems like 
Columbine presented. We were required to come up with new 
strategies, new equipment, new training, a lot of pressure by 
the public to do that. So I understand the pressure that you 
are under and that your team is under to undertake the new 
assignments that you have been given.
    I know how tough this is, when you have to balance the use 
of old equipment and at the same time acquire new equipment. 
The question, though, is with your new mission and all the 
other missions that you have had in the past, you still carry 
on forward to today, are you still able to carry out all of 
your missions with the deterioration of some of your equipment 
that you use now and not acquiring the new equipment that you 
have, bottom line, on the street, are you able to get the job 
done?
    Admiral Collins. I think so. If you look, and there are a 
whole bunch of measures on this, and we have debated these back 
and forth, what are the right measures to measure performance, 
whether it is activities, in terms of boat hours, ship hours 
and things like that.
    I tend to go to the outcome as my ultimate measure. If that 
is the measure, then you look back on last year, we did not 
step away from our search and rescue standard one bit. We saved 
over 5,550 lives last year. And on the counter-drug mission, it 
wasn't a record breaking year, it was a record shattering year. 
We broke the old record by 100,000 pounds. We had 240,000 
pounds of cocaine that we interdicted in the maritime. And we 
had the highest number of migrants interdicted, close to 11,000 
in the maritime, in 10 years.
    We very successfully prevented a mass migration from Haiti 
last spring, on and on. If you look at all our performance 
metrics, I think in the totality of things, I think we are 
leveraging our assets, we are paying attention to all our 
missions. We see safety and security, by the way, as a flip 
side of the same coin, you do well in safety, you do well in 
security and vice versa.
    So we are paying a lot of attention to all our missions. 
The thing with this Deepwater program is, Deepwater provides us 
the capability across our mission set. It gives us, most 
attractive to me, much, much more enhanced surveillance 
capability than we have ever had, which is critical for whether 
it's homeland security, whether it is fisheries enforcement. So 
a long-winded answer to your question, we are paying attention 
to all, and I think the performance metrics from my perspective 
are pretty solid.
    Mr. Reichert. I just wanted to give you an opportunity to 
explain to all the participants here today all the duties that 
you perform. You have been a great partner with law 
enforcement, local law enforcement in the northwest region, 
King County Sheriff's Office, Seattle Police Department and 
others. I know right now, one of the things that is really 
important is the Coast Guard partnering with local agencies. I 
know that currently there is an agreement that is being 
examined for cooperation and partnership between the sheriff's 
office in Seattle with the air support unit and other Coast 
Guard equipment.
    Admiral Collins. It is something we, as a relatively small 
armed service, the smallest, partnering is in our genes. I 
think we have pursued it aggressively in the post-9/11 
environment. I think we have a great example of that in many 
places. San Diego is a great place to show that kind of 
partnering as well, where we developed a joint harbor 
operations center, where State, local and Federal all are co-
located on a 7 by 24 basis, sharing information, having a 
common operational picture to act on. Independent operational 
chains of commands kept intact, but a very collaborative, very 
effective 7 by 24 operation. We are going to replicate that 
kind of thing around the country.
    Mr. Reichert. I think you can see that this Committee would 
really like to help you, and I thank you for your service.
    Admiral Collins. Thank you, sir.
    Mr. Reichert. Mr. Chairman, I yield the rest of my time.
    Mr. LoBiondo. Admiral Coble.
    Mr. Coble. He says that with tongue in cheek, Admiral.
    Admiral Collins. Not at all.
    [Laughter.]
    Mr. Coble. I apologize for my belated arrival. I was here 
earlier, but I have two other meetings simultaneously being 
conducted. It is good to have you all here today, folks.
    Admiral, I noticed that the Deepwater plan provides a 
range, the low end would result in fewer vessels, the high end 
I think about the same, no increase. I guess my question is, 
how do you all propose to do more with fewer vessels?
    Admiral Collins. There is a range. Again, some, some the 
low is lower than the baseline, the high is higher. In addition 
to the HH65 helicopter, by the way, if you count the number of 
fixed-wing, the fixed-wing in the new implementation plan to 
the $24 billion level are considerably higher
    Mr. Coble. When I said fewer vessels, fewer assets.
    Admiral Collins. The helicopters are more, if you count the 
helicopters, you count unmet, and you count the fixed-wing it 
is much greater. And that is a reflection of our performance 
gap analysis where we said that surveillance capabilities are 
tremendously important post-9/11.
    But the short answer, sir, to this is that we are building 
platforms with much greater capability than the older ones. And 
we are building a system that works together as a network to be 
much more effective than the surveillance capability, the range 
and the impact, finding targets of interest, interdicting them 
and so forth.
    The other thing we are trying to do is get more ship days 
out of each platform. Right now the standard program op temp 
for medium endurance cutter and high endurance cutter is 185 
days a year. We are going to try to drive that, with the new 
platforms, to 230, 240 days a year, and based upon better 
technology, a rotating crew. So we keep the personal tempo the 
same, but the operational tempo of the platform higher. So we 
are trying to leverage the investment we make, get more out of 
each platform and leverage the impact of the system with 
incredible surveillance capabilities that will enable us to, in 
the Department of Defense vernacular, put metal on target in 
terms of finding the targets to board, intercepting them and 
doing effective things to them.
    So that is kind of it in a nutshell. We are going to 
continue to evaluate the performance. The important thing is to 
get the baseline capability right. You have to get that from 
day one. We have now, with this implementation plan, the 
baseline capability right. We can continue to discuss capacity 
every year, if need be, and continue to monitor the overall 
performance of the system. If we need to make adjustments 
because we projected wrong, we can make adjustments either way 
up or down.
    So I think the key here in fiscal year 2006 is to get the 
capabilities right. I am very pleased that we are able to do 
that and really appreciate the support of all elements of the 
Administration in helping us get to this point.
    Mr. Coble. Thank you, Admiral. Admiral, the Chairman 
usually addresses me as Master Chief. Admiral today, I guess I 
fall somewhere in between the two.
    I yield back, thank you, Mr. Chairman.
    Mr. LoBiondo. Mr. Boustany.
    Mr. Boustany. I too want to commend you on the work you 
have done, particularly down in the Gulf of Mexico, which is my 
area, the State of Louisiana. I appreciate the hard work and 
the great work you have done.
    My question, a couple of questions dealing with the 
deterioration of the assets. Do you think that acceleration to 
a 15 year schedule would actually enhance your capabilities and 
allow you the proper operational capabilities that you are 
looking for?
    Admiral Collins. Clearly, the greater distance between the 
old asset and the new asset means you have to do something to 
the old asset. And what we have is sort of a balanced approach 
here, that we are trying to manage those legacy systems, 
recognizing that we have to deliver our operational performance 
today. So you have to use the assets you have, then you have to 
try to have an effective program to replace them in a logical 
way. That is the constant tension that we are dealing with.
    There are about 250 or some odd million dollars, if I 
remember the number right, that are assigned to legacy systems 
in the 2006 budget. People say, wow, that is investing in the 
old and not investing in the new fast enough. But I would 
submit, if you look in greater detail at that 250 some odd 
million dollars, that the vast percentage of that money is 
investing in a Deepwater system, because it is taking an 
existing legacy system and transforming it, converting it. So 
of that $250 million or so, $133 million is for re-engineing 
the HH65, which will be ultimately part of a Deepwater system. 
It will be converted from a legacy system into a Deepwater 
system.
    And by the way, that was the game plan from day one. That 
was the game plan when the contract was awarded. So it's the 
conversion of the legacy asset and buying totally new that will 
give us the performance we need. It is a dynamic process that 
we are dealing with. I would like to think that we have got it 
right with this new implementation plan, getting that right 
balance.
    Mr. Boustany. Thank you for your answer.
    Ms. Wrightson, do you think acceleration to 15 years, what 
kind of decrease in total costs to the program would you 
anticipate?
    Ms. Wrightson. That is a really good question. We spent 
months with the Coast Guard staff and analyzed trying to get 
the data that we needed to answer that question. At the end of 
the day, the Coast Guard was not able to provide us the type of 
data that we would need to be definitive about it. But that 
does not mean I cannot answer some aspect of your question 
today, and I would like to do that.
    Acceleration in a program as complex as Deepwater, with the 
risks that Deepwater poses, and the uncertainties around the 
MNS and the implementation plan, which we have only just now 
have been asked to examine to see whether or not it is 
adequate, sufficient, and whether or not there is enough 
transparency to it, is a real risk. That said, we also believe 
the condition of those assets is a serious problem.
    What I would like to say is one thing. We would like to see 
the Coast Guard, put the internal controls and other management 
improvements that we have asked for firmly into place. Once 
that is done, one will still need to monitor that program, 
because of its complexity.
    However, I can say this, that if the Coast Guard were to 
successfully implement our recommendations, I would feel a lot 
more comfortable about a more aggressive schedule than I feel 
right now. I would also say that I would prefer to see 
acceleration for assets that are proven assets, that is, after 
they are built, fielded and tested, so that the identified 
improvements that inevitably come after you put those first few 
in play can be made for follow-on assets. That kind of a 
strategy for more aggressive schedule poses a lot less risk 
than willy-nilly putting more money across the board into the 
program.
    Mr. Boustany. Thank you for your answer.
    That is all I have, Mr. Chairman.
    Mr. LoBiondo. Mr. Filner.
    Mr. Filner. Admiral Collins, you explained how you are 
going from the legacy to the Deepwater, remanufacturing, I 
guess. And we have expressed up here, at least I have, and 
others have joined, I think, a little bit of concern about that 
approach, the cost-effectiveness of it.
    I just want to note for the record that other agencies 
thought that strategy would be nice, then shifted away from it 
because it did not work. The U.S. Navy's helicopters, the SH3s, 
the SH60s, Rs and Ss, the U.S. Army's decision regarding new 
Blackhawk helicopters, the U.S. Air Force efforts to 
remanufacture the Pavehawks, the U.S. Marine Corps' with the 
AH1 Yankee and the Zulu aircraft, they all thought they were 
going to remanufacture and had to shift to purchase. So you 
ought to look at that.
    But let me look at the cost-effectiveness of this whole 
process. Ms. Wrightson first. You stated that one of the 
problems with using the system integrator approach was that 
there may not be enough competition to lower the cost. It seems 
to me, with going to the rebuilding of these helicopters and 
other aircraft, does that not mean there is going to be even 
less competition, because there are no new construction 
manufacturers that can compete?
    Ms. Wrightson. Again, that is a good question. If you look 
into it a little more deeply and you talk about sort of 
competition across the board, we did make recommendations to 
the Coast Guard to put more safeguards in to ensure 
competition, which at the end of the day, what competition is 
about is a tool to produce the best value to the Government. 
Sometimes that means complete replacement and sometimes it does 
not. But whatever the outcome that is what competition is for.
    The two things the Coast Guard has done in this regard are 
that they have agreed to observe FAR requirements that for 
amounts greater than $10 million the Coast Guard needs to be 
notified, the agency needs notification for that. And ICGS has 
agreed to do that. That is one example. The other action is 
that they have put in specific metrics into the evaluation of 
the contract, such that before a final decision is made, before 
they award another contract, they will take a look at 
competition.
    These are important steps. They are internal control steps. 
But in order to know whether for any particular asset 
replacement or purchase you have sufficient competition to 
ensure best value to the Government, you have to look at the 
procurement details themselves and not just the internal 
controls. We have not looked at the replacement of the HH65, 
HH60 or a combination for the AB139, for example.
    Mr. Filner. And I wish you would. Again, when you go 
through re-engineing, you are not going to have any competition 
from new manufacturers. They cannot compete for that asset, so 
you have ruled it out just from that decision, it has ruled out 
that competition.
    Ms. Wrightson. But it might be, and I do not know, because 
we have not done the work, that that re-engineing decision 
might be something that at the end of the day would be best 
value. You would have to study it.
    Mr. Filner. That is a good thing. We have been asking this 
for months and months and months, trying to get the data.
    Let me just ask, on that question, Admiral Collins, the 
cost difference between remanufacturing a 20 year old HH65 and 
buying a new multi-mission helicopter, what is that difference?
    Admiral Collins. Which one are you talking about? Number 
one, the initial commercial helicopter in the Deepwater 
baseline that was awarded was the AB139 and that was a 
replacement for the HH60, not the HH65. The decision not to do 
the 139 was based totally on the performance gap analysis and 
the performance that could be delivered by the 139. It could 
not meet the revised requirement.
    So we were forced to look at an alternative. We looked at 
the HH60, the cost of revising it, updating the HH60. I think 
we have very convincing numbers, I would be glad to share those 
in a brief to your staff. Very convincing numbers that that is 
best value.
    On the HH65, that was a Deepwater solution from the get-go. 
When the contract was awarded in June of 2002, the solution 
proposed and awarded for that particular level of helicopter 
was the HH65. So it has been a Deepwater solution from the very 
beginning.
    Mr. Filner. I thought the ICGS identified the AB139 as the 
helicopter of choice.
    Admiral Collins. It was under the previous requirement, the 
mission needs statement, it was a candidate replacement for the 
HH60. When we did the performance gap analysis in the post-9/11 
environment and updated the performance elements that needed a 
helicopter, it did not match up. So we had to look at another 
alternative.
    Mr. Filner. Just answer me this question. You are giving me 
all kinds of corollaries and things. I just want to know the 
difference between re-manufacturing the HH65 and buying an 
AB139. Just what is the difference in that?
    Admiral Collins. It is probably, the total costs to convert 
an HH65, including the re-engineing, which is already a sum 
cost, we have already done it, and the new tail rotor, new 
landing system and avionics, which completes the transformation 
to a Deepwater asset, rough order of magnitude about $8 
million, $8.5 million. And a 139 is at minimum, at minimum $15 
million.
    Mr. Filner. All right, so you're saying 9 versus 15.
    Admiral Collins. At minimum. The range that my staff
    Mr. Filner. Customs bought the same helicopter for $12 
million, and they had additional requirements. If you--I do not 
know if that was based on 1 or 90 of them. What was that $15 
million cost from?
    Admiral Collins. Pat, do you want to answer this?
    Admiral Stillman. Mr. Filner, I think it is important to 
recognize that the AB139 and the Deepwater solution was a 
placeholder. It was not initially scheduled to actually enter 
into the solution until 2012 or later. Ms. Wrightson's point is 
extremely well taken, notwithstanding the fact that that was a 
placeholder in the solution, you can rest assured that we would 
have competed that issue to ensure best value to the 
government. The contract is predicated on very accurate and 
deliberate statements of work for the first five years.
    So in 2007, we will make a decision regarding the renewal 
of that contract and what transpires in the out years, quite 
frankly, will absolutely be focused upon competition, best 
value and the adroit use of an integrator.
    Mr. Filner. We do not have the time here, I guess we are 
going to have to do it more person to person. But you keep 
mixing apples and oranges on me.
    Admiral Stillman. In what respect?
    Mr. Filner. You tell me that the AB139 was a placeholder to 
do something down the line. But that was because the asset, the 
HH65 was considered to be practical. And now you have decided 
it is not. Did you change--so you changed the basis of the 
whole equation there.
    Admiral Stillman. Indeed we did, in terms of the capability 
changes, post-9/11, as far as the desired performance and needs 
of the system.
    Mr. Filner. How many people can the HH65, how many people 
can it vertically insert on a boarding team, on a tanker or
    Admiral Stillman. Four I think is the accepted norm in 
terms of that aircraft. But the reason we have
    Mr. Filner. How much can the AB139 do?
    Admiral Stillman. I would say it is certainly capable of 
four.
    Mr. Filner. Probably six.
    Admiral Stillman. What is that, sir?
    Mr. Filner. Probably six.
    Admiral Stillman. But not with the range that we feel is 
essential in terms of post-9/11, and the necessity of in some 
cases having the capability to deploy a helicopter with 
aircraft use of force, vertical insertion, 200 miles from the 
platform. So that is the
    Mr. Filner. Can you tell me the range of things?
    Admiral Stillman. Two hundred miles from the platform, the 
ship that it is deployed on.
    Mr. Filner. What is the range of the HH65?
    Admiral Stillman. It is not 200 miles, sir, that is a 
medium range helicopter. The
    Mr. Filner. What is the range of the AB139?
    Admiral Stillman. I will have to give you that for the 
record, I do not have that
    Mr. Filner. Well, you just said the ranges are different, 
so you obviously have something in your head about--you said to 
me that that was a bad comparison because there were range 
differences. So I am just asking you what are those 
differences.
    Admiral Stillman. I am just saying that is one of the 
issues that came into play
    Mr. Filner. You are dismissing my question and you are not 
giving me any evidence for your dismissal of it. I can just 
say, no, you are wrong, because you do not have any figures, do 
you?
    Admiral Collins. Let me try to, if I can just comment, sir, 
it is two separate helicopter systems that are part of 
Deepwater. The candidate systems for the replacement of the 
HH60 initially was the AB139 out into the 2012 time frame. The 
HH65 was the short range helicopter, that is the one we deploy 
on our ships. That was always a Deepwater solution, it had been 
from the get-go. And that is converting that helicopter.
    So we have re-engined it early because of the current 
condition of that engine. So you have two helicopter systems 
going. Then in the meantime, you had a post-9/11 performance 
gap analysis that said the higher end helicopter, the medium 
recovery helicopter, had to have certain performance dimensions 
to it. And the AB139 did not match up to those. We would be 
glad to give you a blow-by-blow, for the record in a brief, on 
all the dimensions of that performance shortfall.
    But the comparison
    Mr. Filner. I have been asking you that for months and 
months. I have been asking you for a cost-effective analysis. 
That means the cost versus the performance. And you keep saying 
you are going to give it to me, we keep asking and I--why do 
you keep saying you are going to give it to me when I keep 
asking for it? I mean, either give it to me or stop saying you 
are going to give it to me.
    What does cost-effective mean in English? That is exactly 
what it means, right? I have been asking this for six, eight 
months now.
    Mr. LoBiondo. Excuse me. The Admiral has said publicly that 
he is going to.
    Mr. Filner. He said it six months ago, too.
    Mr. LoBiondo. Okay, we are going to ask for a follow-up. Do 
you need a period of time before you can arrange a meeting with 
Mr. Filner's staff and the committee?
    Admiral Collins. Let me check with my staff and see how 
quickly we can
    Mr. LoBiondo. You will let us know within the next week 
when you can do that and within which time frame.
    Admiral Collins. Yes, sir, I would be glad to do that.
    Mr. LoBiondo. We will follow up on that.
    Ms. Wrightson, you talked a little bit earlier about your 
concern if the program were accelerated, would the assets be 
proven to be reliable, so that we are not just throwing money 
out there that sounds good, but we are not actually going to be 
buying what we think we are buying that is reliable, that is 
sort of what you said?
    Ms. Wrightson. No, not exactly.
    Mr. LoBiondo. What did you say?
    Ms. Wrightson. What I said was that in any program of this 
complexity, every change affects every other change.
    So what I said is, in a system of systems approach, while 
it has certain promise that it can deliver some of the 
combinations of assets and coordination in assets that the 
Commandant has talked about, there is risk to try and manage 
that and the use of a systems integrator is part of that risk.
    What I said then was that an acceleration in and of itself, 
unless you have the kind of internal controls in collaboration 
between ICGS and the Coast Guard and accountability to Congress 
in place, is potentially not a more effective or efficient 
strategy for replacement. So accelerating only increases those 
risks until these internal controls and oversight of ICGS are 
satisfactorily worked out. We do not think they are right now.
    Mr. LoBiondo. So you do not think the internal controls are 
in place that need to be?
    Ms. Wrightson. Two of our 11 recommendations we have closed 
as fully implemented by the Coast Guard. The remainder we have 
not seen as able to close, because the Coast Guard is still 
working on them.
    I just met with ICGS yesterday and the Coast Guard last 
week to try and establish a time frame within which we can 
agree that we will either be able to close these or say the 
Coast Guard is not going to implement them.
    Mr. LoBiondo. What was the conclusion?
    Ms. Wrightson. I think the conclusion is that we are 
talking many weeks but not many months until we can come to 
closure on a status check. We will be happy to provide you and 
your staff a sort of running record of how they are doing on 
that.
    Mr. LoBiondo. To say we are very interested is a big 
understatement.
    Ms. Wrightson. Absolutely.
    Mr. LoBiondo. This is a high priority, very critical 
information. Because the questions that we are ready to ask are 
that, does the Coast Guard have the capability to accelerate 
the Deepwater program to a 15 year schedule. I think if I am 
going to venture a guess, we cannot say that until you can say 
whether we have
    Ms. Wrightson. I think that is the right answer. What we 
can say is the Coast Guard is improving its capacity to 
effectively manage the program as it now stands. And keep in 
mind, there is a lot in play in the program. Some assets are 
already being accelerated and others are not.
    So it is really not quite that simple, but I can say in 
terms of the Coast Guard capability, I will give you just one 
example. We asked the Coast Guard to develop a better human 
capital plan for its own staff to partner with ICGS. The Coast 
Guard has taken a number of measures to do that.
    But at the end of the day, there is still a 16 percent 
vacancy rate in the program, and that is not a surprise to the 
Coast Guard. We have talked about this and they are working on 
it.
    But the absence of a fully staffed program, with people 
with the knowledge, skills and abilities to work effectively 
with ICGS, represents a problem. In fact, ICGS themselves 
yesterday told me that it was a problem, because it limits 
their ability to efficiently move RFPs and other things along. 
So it is a complex program, there are lots of risks. But we are 
not sitting here saying the Coast Guard is not managing the 
program well or improving. We are saying that it is a high risk 
program that needs a lot of oversight and a lot of controls and 
management need to be in place to ensure that the system of 
systems promises materialize and the program's objectives are 
achieved.
    Mr. LoBiondo. But you are totally satisfied with the level 
of cooperation you are receiving?
    Ms. Wrightson. Absolutely satisfied with the level of 
cooperation right now, yes.
    Mr. LoBiondo. And the flexibility that demonstrates to 
react to situations that are being uncovered? No question in 
your mind about that?
    Ms. Wrightson. No question in my mind about that. We are 
working very well with them.
    But even with their best effort, some of these problems 
take time to resolve.
    Mr. LoBiondo. Would you be able to say whether, in your 
view, acceleration would result in a decrease in total program 
costs? Would you be prepared to comment on that?
    Ms. Wrightson. I wish I could, but I cannot.
    Mr. LoBiondo. Would you be able to at some point in the 
future?
    Ms. Wrightson. I doubt it, because as I said, we put our 
best economists on this effort. We spent a lot of time with the 
Coast Guard. Two things. One, the current data they were able 
to provide us does not give you the kind of data you need to 
have a definitive answer to the question. Second, whenever you 
do a system of systems approach, every change affects the 
answer to the question. This program has been undergoing so 
many changes that it is almost impossible to determine at any 
point in time whether that is true and whether it would matter.
    I think it is fair to say that when you can eliminate 
maintenance costs and move forward with a new system and get 
greater capabilities, that is a good idea. There is better 
value to the Government and you are able to achieve your 
missions more effectively. But when you are engaged in this 
kind of a contract, it is very difficult to make summary 
judgments about it. Asset by asset it may be possible. But as a 
system it is very difficult.
    Mr. LoBiondo. Admiral Collins, can you tell us with any 
degree of certainty on your part that the legacy system will be 
able to maintain the current mission level until Deepwater 
assets come online?
    Admiral Collins. Mr. Chairman, we are working very, very 
hard to ensure that we have the appropriate maintenance plan to 
address legacy asset subsystem problems. Incidentally, there 
was a legacy report that is due Congress, I signed that out 
today, it was hand delivered to the Hill today, which details 
asset by assets the initiatives that we plan to pursue in a 
dollar amount per asset that would need to be invested to keep 
legacy systems going until they are replaced.
    The mission effectiveness program that we have on the 2006 
budget, sir, is the first part of that. Well, actually, they 
are doing the first cutter in 2005. There is an increment of, I 
want to say about $39 million in the Deepwater line item for 
mission effectiveness programs for both 270 cutters, I think 
there are three each, 270 cutters and the 210 foot cutter, a 
nine month shipyard availability to be done at the Coast Guard 
yard that will place out needed subsystems to keep them going.
    So we have for the medium endurance cutter a fairly 
definitive program. We also have other sustainment plans for 
both the 110 and the 378. So we have identified the 
requirements for those legacy systems. It is obviously a 
function of what is the distance now and the time to replace, 
what do you have to do to keep them going. I am pleased that we 
have that kind of focus on them and I think you will see that 
in the legacy report, sir.
    Mr. LoBiondo. So in essence, you need more time before you 
can answer that question. We are concerned that we are going to 
reach a point where we are going to have maybe not a surprise, 
but some bad news about where we are. Do you have a sustainment 
plan for the 110s?
    Admiral Collins. The 110s, of course, is another not 
uncomplicated system. The initial strategy, as you recall, Mr. 
Chairman, was to have a bridging strategy of the 110 to 123 
conversation until the full replacement platform came in. It is 
like the 2018 time frame.
    We have done six of those conversations to date. The eight 
will be completed through September. We have had, quite 
frankly, some structural problems with the solution. We are 
reevaluating that, and if the fixes have cost us more money. We 
are reevaluating the cost implications of that and the 
performance implications of that, a formal operational 
reevaluation assessment of that ship. It is very likely that we 
will truncate that 123 extension program. That is why we have 
moved the design and up-front engineering of the fast response 
cutter, its replacement, we have moved that up over 10 years. 
It is now the design that we are doing right now. And that was 
that reason.
    Another mitigating thing is increasing the program hours 
for the existing 110 fleet. The third mitigating factor is to 
do hull sustainment of the 110s. The fourth mitigating factor 
is the addition of five PC175s to the United States Navy. All 
of those things are helping. There is some loss of patrol boat 
hours, but we are mitigating that loss through these various 
initiatives.
    That is another report, sir, we owe the Congress, is on the 
patrol boat hours and the impact over time. That is in the 
final stages of being completed. It had to come in after the 
implementation plan came up.
    Mr. LoBiondo. Mr. Reichert, do you have anything else?
    Mr. Reichert. Thank you, Mr. Chairman. Just one more 
question.
    Integrating your new equipment and your new systems into 
the Coast Guard's operation sounds at least, that it is going 
to be challenging is an understatement. You talked about 
partnerships a little bit, so if it is going to be challenging 
to you to integrate that system and equipment in the Coast 
Guard operation, I am just wondering what your relationship is 
with the Department of Defense and with the Navy, and will your 
Deepwater equipment be interoperable with the Navy?
    Admiral Collins. Great question. We have had an incredibly 
strong and close partnership with the United States Navy for a 
long time, particularly the last three or four years. All of 
the performance specifications for all of the ship platforms in 
the Deepwater project, that performance specification is 
reviewed with the Navy. We solicited what we call NOCs, Naval 
Operation Capabilities that they would like to see embedded 
into these systems.
    So from the very beginning, they had a Naval Operation 
Capability dimension to their performance contract. We have 
updated it since, particularly for the patrol boat platform. 
They are in fact providing some Navy equipment to these ships, 
I want to say about $21 million or so for the national security 
cutter, $21 million worth of equipment. This is equipment in 
kind, not dollars sending our way, but equipment in terms of 
radar systems and those kinds of things.
    So part of our contract, performance contract, the mission 
requirement was developed with the Navy, understanding that we 
have to, this is sort of a national fleet that we are running 
between the Navy and the Coast Guard. It has to be simpatico, 
non-redundant but supportive, non-duplicative but supportive, 
complementary assets. We work very, very hard to do that, and 
interoperability is very, very high on the agenda, and I think 
we have that, sir.
    Mr. Reichert. So as far as the additional capabilities, 
they have been providing equipment up to $21 million so far, 
you've said, but no money.
    Admiral Collins. It's Navy systems that they provide to us, 
particularly on the weapons system type of category. That is 
terrific for us, because they have the support infrastructure, 
training infrastructure and support infrastructure associated 
with those systems. So we can leverage our partnership with the 
Navy for those things. So very much interoperability is high on 
Vern Clark's agenda, it is high on my agenda. We meet 
frequently to discuss those things. Pat Stillman, my PEO, is 
also on the combat ship source selection board. We are looking 
at where there is crosswalk between systems. So it is quite a 
partnership, sir.
    Mr. Reichert. Great, thank you.
    Thank you, Mr. Chairman.
    Mr. LoBiondo. Mr. Filner.
    Mr. Filner. Just briefly. I was interested, Admiral, in 
your description of the 110 situation, since everything I told 
you earlier, every experience that we have had in other 
agencies and apparently now in yours with the conversions ends 
up in a problem. Let me just ask you on that one, who ended up 
paying for the mistake that you had? ICGS has said that adding 
the 13 feet extension to the 110 said it could support, the 
structure could support it and it could not. The shipyard that 
apparently built the original one was supposed to do the 
conversions.
    I wonder who paid for that? And did you testify to us a 
year ago or more how cost effective that conversion would be 
and how it met all the capabilities and everything that you 
just said about the HH65? Did you testify to the exact same 
cost effectiveness and yet we have this incredible disaster, 
and who paid for it?
    Admiral Collins. As to the contractual relationship going 
forward, I will ask the PEO to comment on that specifically.
    Clearly, the Deepwater integrator and their solution had a 
host of piece parts to the overall system. As you recall, sir, 
they were driven by performance of the overall system at the 
total lowest cost of ownership. Those were the basic metrics 
that were used in designing
    Mr. Filner. You gave me the wrong answer. So are you not 
questioning the metrics that you start off with?
    Mr. LoBiondo. Mr. Filner.
    Mr. Filner. How can you give me an answer like that? They 
gave you the wrong answer. And now you are telling me it is 
because you did not have enough money, which is how I started 
my whole line of questioning for you in Deepwater to begin 
with, by the way. They had the wrong metrics, Admiral, if they 
gave you that answer, according to the metrics. How can you 
give me that kind of answer?
    Admiral Collins. I was talking about the entire system. I 
think that is a good stewardship acquisition approach, sir, is 
that we are looking at tradeoffs between, not optimizing every 
single part of Deepwater, but saying how, together, 
collectively can it give you the system you want effectively
    Mr. Filner. You just told me you stopped the conversion at 
six.
    Admiral Collins. We are evaluating
    Mr. Filner. It was a mistake. It was a mistake.
    Mr. LoBiondo. Mr. Filner, I am going
    Mr. Filner. Look at the mistake and figure it out.
    Mr. LoBiondo. I am going to cut this off, because an 
argumentative approach is not going to get us where we go. 
Admiral Collins is not giving you the answer that you want to 
hear. And you are going to get a private briefing. The Admiral 
has promised us that. We are going to follow up with that.
    I want to close by saying, obviously, we are very 
concerned. We desperately want this to move forward in a 
positive fashion. Admiral Collins and Admiral Stillman, you 
have a very difficult task on your hands. You have gone through 
a number of hurdles. There are a lot of positive things that do 
not get emphasized enough about what is going on. We, I think, 
both of us, or all of us here today in the Committee, at least 
I do want to recognize the positive things that have happened. 
We have not emphasized them because the time we need is to try 
to move us forward.
    Ms. Wrightson, your involvement through this whole program 
with oversight is invaluable to what the end result is going to 
be with your agency. We have great concerns we are going to 
follow very closely and carefully. These are tough questions we 
are asking, but I hope you view it as tough love. We love the 
Coast Guard, we love the work that your men and women are 
continuing to do on behalf of the United States of America. We 
just want to try to make sure that we can get this program done 
in the right way and the best way possible.
    So we will be following up, and with that, the Committee is 
adjourned.
    [Whereupon, at 3:20 p.m., the subcommittee was adjourned.]


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