[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
DEEPWATER: 120-DAY UPDATE
=======================================================================
(110-50)
HEARING
BEFORE THE
SUBCOMMITTEE ON
COAST GUARD AND MARITIME TRANSPORTATION
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
JUNE 12, 2007
__________
Printed for the use of the
Committee on Transportation and Infrastructure
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
JAMES L. OBERSTAR, Minnesota, Chairman
NICK J. RAHALL, II, West Virginia JOHN L. MICA, Florida
PETER A. DeFAZIO, Oregon DON YOUNG, Alaska
JERRY F. COSTELLO, Illinois THOMAS E. PETRI, Wisconsin
ELEANOR HOLMES NORTON, District of HOWARD COBLE, North Carolina
Columbia JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York WAYNE T. GILCHREST, Maryland
CORRINE BROWN, Florida VERNON J. EHLERS, Michigan
BOB FILNER, California STEVEN C. LaTOURETTE, Ohio
EDDIE BERNICE JOHNSON, Texas RICHARD H. BAKER, Louisiana
GENE TAYLOR, Mississippi FRANK A. LoBIONDO, New Jersey
ELIJAH E. CUMMINGS, Maryland JERRY MORAN, Kansas
ELLEN O. TAUSCHER, California GARY G. MILLER, California
LEONARD L. BOSWELL, Iowa ROBIN HAYES, North Carolina
TIM HOLDEN, Pennsylvania HENRY E. BROWN, Jr., South
BRIAN BAIRD, Washington Carolina
RICK LARSEN, Washington TIMOTHY V. JOHNSON, Illinois
MICHAEL E. CAPUANO, Massachusetts TODD RUSSELL PLATTS, Pennsylvania
JULIA CARSON, Indiana SAM GRAVES, Missouri
TIMOTHY H. BISHOP, New York BILL SHUSTER, Pennsylvania
MICHAEL H. MICHAUD, Maine JOHN BOOZMAN, Arkansas
BRIAN HIGGINS, New York SHELLEY MOORE CAPITO, West
RUSS CARNAHAN, Missouri Virginia
JOHN T. SALAZAR, Colorado JIM GERLACH, Pennsylvania
GRACE F. NAPOLITANO, California MARIO DIAZ-BALART, Florida
DANIEL LIPINSKI, Illinois CHARLES W. DENT, Pennsylvania
DORIS O. MATSUI, California TED POE, Texas
NICK LAMPSON, Texas DAVID G. REICHERT, Washington
ZACHARY T. SPACE, Ohio CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii JOHN R. `RANDY' KUHL, Jr., New
BRUCE L. BRALEY, Iowa York
JASON ALTMIRE, Pennsylvania LYNN A WESTMORELAND, Georgia
TIMOTHY J. WALZ, Minnesota CHARLES W. BOUSTANY, Jr.,
HEATH SHULER, North Carolina Louisiana
MICHAEL A. ACURI, New York JEAN SCHMIDT, Ohio
HARRY E. MITCHELL, Arizona CANDICE S. MILLER, Michigan
CHRISTOPHER P. CARNEY, Pennsylvania THELMA D. DRAKE, Virginia
JOHN J. HALL, New York MARY FALLIN, Oklahoma
STEVE KAGEN, Wisconsin VERN BUCHANAN, Florida
STEVE COHEN, Tennessee
JERRY McNERNEY, California
VACANCY
(ii)
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION
ELIJAH E. CUMMINGS, Maryland, Chairman
GENE TAYLOR, Mississippi STEVEN C. LaTOURETTE, Ohio
RICK LARSEN, Washington DON YOUNG, Alaska
CORRINE BROWN, Florida HOWARD COBLE, North Carolina
BRIAN HIGGINS, New York WAYNE T. GILCHREST, Maryland
BRIAN BAIRD, Washington FRANK A. LoBIONDO, New Jersey
TIMOTHY H. BISHOP, New York TED POE, Texas
VACANCY JOHN L. MICA, Florida
JAMES L. OBERSTAR, Minnesota (Ex Officio)
(Ex Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
TESTIMONY
Allen, Admiral Thad W., Commandant, United States Coast Guard.... 6
Skinner, Richard L., Inspector General, Department of Homeland
Security, accompanied by Rich Johnson, Project Manager, Office
of Inspector General, Department of Homeland Security.......... 6
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Cummings, Hon. Elijah E., of Maryland............................ 42
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Allen, Admiral Thad W............................................ 44
Skinner, Richard L............................................... 58
SUBMISSIONS FOR THE RECORD
Allen, Admiral Thad W., responses to questions from the Committee 55
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HEARING ON DEEPWATER: 120 DAY UPDATE
----------
Tuesday, June 12, 2007
House of Representatives,
Committee on Transportation and Infrastructure,
Subcommittee on Coast Guard and Maritime Transportation,
Washington, DC.
The Subcommittee met, pursuant to call, at 11:00 a.m., in
Room 2167, Rayburn House Office Building, the Honorable Elijah
E. Cummings [Chairman of the Subcommittee] presiding.
Mr. Cummings. The Subcommittee will come to order.
Today, the Subcommittee on Coast Guard and Maritime
Transportation convenes to receive an update on the steps that
the Coast Guard has taken over the past 120 days to continue
strengthening the management of the $24 billion 25 year
Deepwater procurement program.
I note the significance of the 120 day time period. It is
the time that has elapsed since I convened the Committee's
first oversight hearing on Deepwater in the 110th Congress, and
it is the time period after which I promised the Subcommittee
would reconvene to hear again from the Coast Guard's
Commandant, Admiral Thad Allen.
This hearing continues our Subcommittee's unwavering
commitment to require strict accountability from the Coast
Guard for its implementation of the Deepwater program and the
expenditures of taxpayers' resources. Since we met in January,
our Subcommittee has examined the Coast Guard's fiscal year
2008 budget, and the House is considering the appropriation for
the Coast Guard on the Floor today.
The Full Committee on Transportation and Infrastructure has
also held an investigative hearing to examine the extent to
which contractors working on the failed 123 foot patrol boat
program complied with the requirements of the Deepwater
contract.
During that 120 day period, the Commandant has also
announced important changes to the Deepwater program including
promising the Coast Guard will assume the lead role as systems
integrator for the program, that the use of third party
certification will be increased and that the Coast Guard will
contract directly with vendors when it is in the best interest
of the service to do so. Further, the Coast Guard will stand up
a new acquisitions directorate under the command of Rear
Admiral Gary Blore on July 13.
The principles and plans the Commandant has announced
appear likely to set the Deepwater program on a steadier
course. However, it is important that we understand how these
principles will be translated into the specific practices that
will insure the success of the program.
The failures already registered in Deepwater are simply
unacceptable. An approximately $100 million effort to lengthen
8 123 foot patrol boats yielded only 8 buckled hulls. According
to the Inspector General, the Coast Guard has obligated more
than 100 million of money allocated to the development of the
vertical unmanned aerial vehicle through fiscal year 2007, but
this obligation has yielded little more than a pile of rubble
and the first effort to design a Fast Response Cutter, which at
just 120 to 160 feet is the smallest of the new cutters
expected to be acquired under Deepwater, produced a failed
design.
As I have said before, what we expect from Deepwater is
really quite simple. It is no rocket scientist stuff. We expect
boats to float. We expect aircraft to fly. Yet, as simple as
these goals appear to be, too frequently they have not been met
in the Deepwater program, and this is simply intolerable.
Unfortunately, there are problems with other ongoing
procurements, most notably the National Security Cutter, the
most expensive asset to be acquired under Deepwater. I had the
opportunity, thanks to Admiral Allen, to visit the NSC last
week in Pascagoula, Mississippi, and it is indeed, without a
doubt, an impressive ship. However, like all of my colleagues
on the Subcommittee, I am deeply concerned by lingering
questions about the likely fatigue life of hulls 1 and 2.
I believe that it is imperative and should be among the
Coast Guard's top priorities at this time to ensure that design
changes incorporated into hulls 3 through 8 will yield ships
that will fulfill all of the requirements of the Deepwater
contract. For that reason, I believe that all proposed designs
must be closely examined by the Navy's Carderock Division.
During today's hearing, I also hope to understand the
specific role that the Integrated Coast Guard Systems Team is
currently playing in implementing the Deepwater procurements
and how any future contract extension granted to that team will
be structured to ensure that performance is based solely on the
quality of work performed and the effectiveness of assets
produced.
In recent years, our great Country has unfortunately
witnessed the troubled aftermath of incompetence in government,
and the Congress has been too willing to tolerate mediocrity.
Ladies and gentlemen, these days are over. We are the United
States of America. We were not founded on mediocrity. We cannot
stoop to it now, and we will no longer tolerate failures in the
Deepwater program.
Thus, while I continue to have the utmost confidence in
Admiral Allen, our Subcommittee will also continue to expect
the Coast Guard to meet the highest standards of performance.
We look forward to hearing today from Admiral Allen and how he
will put in place the systems and personnel that will ensure
these standards are met.
In addition to hearing from Admiral Allen, we will also
hear from the Inspector General of the Department of Homeland
Security, Richard Skinner. Inspector General Skinner has done
an outstanding job in reporting on emerging problems throughout
the Deepwater program, and it was his office that identified
the hull fatigue life problems with the NSC. The Inspector
General's Office has been a critical partner to our
Subcommittee as we have conducted our oversight over the Coast
Guard.
I look forward to Mr. Skinner's comments today on the steps
that the Coast Guard still needs to take to prepare to
implement the reforms that Admiral Allen has announced. I also
invite him to comment on the steps being taken to mitigate the
problems with the NSC.
Again, I want to reiterate my full confidence in Admiral
Allen. Admiral Allen has earned our trust, not only from a
standpoint of integrity and the highest integrity but also from
the standpoint of the highest level of competence.
And so, with that, I would like to now recognize my
colleague, the Ranking Member of our Committee, Mr. LaTourette.
Mr. LaTourette. Thank you very much, Mr. Chairman, for
yielding and also for conducting this hearing.
The Subcommittee, as you have indicated, is meeting this
morning to continue its oversight of the Coast Guard's
Deepwater program. This Subcommittee has already held three
oversight hearings to review the setbacks that have been
encountered by the Deepwater program.
Since our last hearing, the Coast Guard has proposed
several modifications to improve its management of the
acquisition process to address some of the issues that have
caused previous problems. I know and I hope that Commandant
Allen today will provide the Subcommittee with an update on the
progress that has been made since we met in January.
The Coast Guard has taken several promising steps to
improve its management and oversight of the Deepwater contract.
The Coast Guard has started and will continue to enhance its
acquisition and contracting personnel levels and expertise. The
service has also reasserted itself as the lead technical
authority for all designs and design modifications of Deepwater
assets. Lastly, the Coast Guard has committed to use the
capabilities of the American Bureau of Shipping and other third
parties to review and oversee the design and construction of
Deepwater vessels.
While I commend the Coast Guard for these actions, I
continue to have deep reservations about the decision to take
on the wide-ranging responsibilities of the lead system
integrator for a project of this size and length. I am
concerned that the Coast Guard does not have the resources,
personnel or capabilities to fully take on this task. When the
concept of Deepwater was first considered, the Coast Guard made
the decision to utilize a private sector lead system integrator
because the Coast Guard lacked the in-house administrative,
technical and contracting expertise to carry out such a large
multi-year project.
While the Coast Guard is rapidly increasing its personnel
and capabilities of the acquisition staff, the service does not
presently have the necessary personnel or expertise in place. I
hope to hear and I have confidence that we will hear how the
Coast Guard plans to build on these capabilities while at the
same time carrying out all of its other vital missions within
the service's limited resources.
The Deepwater program and the assets that will be acquired
under Deepwater are critical to the Coast Guard future mission
success. The program remains at a critical junction, but I have
confidence that under the leadership of Admiral Allen the
program can be a success. The men and women of the Coast Guard
carry out brave and selfless service to our Nation each and
every day, and we all need to make sure that this program is
delivering the aircraft, vessels and systems that are necessary
to support their missions.
I thank the witnesses for appearing and thank the Inspector
General and his staff for their continued efforts to examine
and approve this complex, wide-ranging program.
In closing, the Chairman noted that during the
consideration of the Homeland Security appropriations bill,
that the Deepwater program was one of the line items contained
in that bill. I am disappointed at the level in that bill, and
I hope that Members of the Subcommittee will join me later
during debate in expressing disappointment with the decision of
the Appropriations Committee in that regard.
I thank you, Mr. Chairman, and yield back my time.
Mr. Cummings. Before I yield to Mr. Larsen for an opening
statement, I hope that the Admiral will comment on the level of
funding in the appropriations bill so we can have some guidance
from you as to how that fits with your program.
Mr. Larsen?
Mr. Larsen. Thank you, Mr. Chairman. I will just try to be
brief here.
I think we all share the goal of the Coast Guard's long
term recapitalization plan, Deepwater, and I think we all share
the goal that the purpose is critical to the security of the
United States. We also, though, need to be sure to work with
the Coast Guard to pull Deepwater out of the critical care that
it still seems to be in.
The U.S. Coast Guard will soon activate a directorate that
will have responsibility for acquisition. This is a major
positive step, I think. However, according to testimony, the
Coast Guard currently lacks the number of acquisition
professional necessary to handle the major acquisitions and has
requested no funding for this. I would be interested in hearing
from Admiral Allen how they plan to handle these major
acquisitions in the short term while they build up for the long
term.
Second, numerous reports and testimony indicate problems
with the testing and certification of the secured communication
components of Deepwater, but the U.S. Coast Guard doesn't
address this problem in its testimony except to say it seems
that it isn't a problem.
I don't think that we can nor should we accept a he said/
she said debate regarding this important national security
element of the Deepwater program, and I would like to hear a
little more detail from Admiral Allen exactly what he believes
the problems are with the secured communication components and
what is being done to address the problems in it based on the
reports that we have heard, not just from individuals but from
certainly qualified analyses from the IG and others.
So with that, Mr. Chairman, I will yield back and look
forward to the testimony.
Mr. Cummings. Thank you very much.
Mr. Coble?
Mr. Coble. Thank you, Mr. Chairman. I will not use the full
five minutes, but I thank you for having this hearing.
I want to associate myself with your remarks in commending
Admiral Allen. I think he has performed superbly. Gentlemen,
many of these problems that currently plagued the Coast Guard
are unfamiliar to some of us, but many of those problems were
inherited by Admiral Allen prior to his appointment as
Commandant.
To coin an oft-uttered nautical phrase, they did not happen
on your watch, Admiral. That doesn't make them disappear. You
are still stuck with them. But I am looking forward to hearing
from you, Admiral. I think you are doing a good job.
I still believe, Mr. Chairman, that the American taxpayer,
these other problems notwithstanding, get the best bang for the
buck with the Coast Guard, and I continue to believe that.
I look forward to hearing from Admiral Allen today, and I
yield back my time.
Mr. Cummings. Mr. Coble, as a response to what you just
said, I agree with you. I think they get the best bang for
their buck too, and that is why I want to make sure--and I know
we all want to make sure--that they have the equipment that
they need so that they can do the job that we have asked them
to do.
I want to thank you for your support.
Are there any opening statements on this side? Mr. Higgins,
did you?
Thank you very much.
We will now go to Mr. LoBiondo.
Mr. LoBiondo. Thank you very much, Mr. Chairman. I would
like to commend you for vigorously pursuing the looking into of
the Deepwater program and for holding this hearing. I really
think it is imperative that we continue to pursue the
particulars of the Deepwater program.
I join with most of my colleagues in expressing my
disappointment in the missteps and failures of the Deepwater
program especially prior to the tenure of Admiral Allen. I
think there are a lot of things we can look at and wish had
been done differently and wish that we knew about.
However, I am, like my colleagues, very pleased with the
direction Admiral Allen has taken to rein in control of the
program including taking the lead role of systems integrator.
It is a very serious situation that needs to be fixed, and
again I have full confidence in Admiral Allen.
But as Mr. LaTourette mentioned a minute ago, I am
concerned that the Coast Guard does not currently have the
proper number of qualified acquisition personnel to properly
manage the program, and I am also concerned that in the time it
takes to establish that competency the procurement of
desperately needed replacement assets may be further delayed.
Mr. Chairman, I certainly look forward to working with you
and the Committee to make sure that we move forward with
reforming Deepwater and seeing that it is positively moving
forward.
Finally, I would like to remind my colleagues of what
really Deepwater is all about, that the safety of the men and
women of the Coast Guard and success of their mission are
dependent on a replacement of these rapidly failing obsolete
assets. We must see this program through, but it must be done
right.
Again, Mr. Chairman, thank you very much.
Mr. Cummings. Thank you very much.
Admiral Allen, please.
TESTIMONY OF ADMIRAL THAD W. ALLEN, COMMANDANT, UNITED STATES
COAST GUARD; RICHARD L. SKINNER, INSPECTOR GENERAL, DEPARTMENT
OF HOMELAND SECURITY ACCOMPANIED BY RICH JOHNSON, PROJECT
MANAGER, OFFICE OF INSPECTOR GENERAL, DEPARTMENT OF HOMELAND
SECURITY
Admiral Allen. Thank you, Mr. Chairman. Chairman Cummings,
Representative LaTourette, thank you for the opportunity to
appear before this Committee as well as the other Members.
Let me first say that the Coast Guard family expresses its
deepest sympathy and regret at the passing of Representative
Millender-McDonald. Our thoughts remain with her family,
friends and loved ones.
Mr. Chairman, in January, I committed to returning here and
testify to the progress of the last 120 days in addressing the
challenges associated with our Deepwater program. As I have
stated previously, I am personally accountable to make the
changes needed to move this program forward, and I am prepared
to report before this Committee in another 120 days or at
whatever interval is needed to ensure that you and the American
public have confidence that we are on track.
I have a brief opening statement. I would ask that my
written statement be included in its entirety for the record.
Mr. Cummings. So ordered.
Admiral Allen. My written statement contains an extensive
list of actions taken in the last 120 days, but I will focus on
a few important points, and I will be glad to answer any
questions.
Mr. Chairman, last week, you walked the decks of two Coast
Guard cutters with me.
The first one was 40 years old, the Cutter Decisive that
was commissioned the year I entered the Coast Guard Academy,
1967. You saw the 24 person berthing areas with 3-high bunks
and a single head. You saw the cramped operations spaces and
the separation of communication and sensors displays in
different compartments. You saw the flight deck where Commander
Walker explained that just a few days earlier held over 200
migrants.
Across the channel in Pascagoula, the Cutter Bertholf nears
completion, and we anticipate in the new calendar year it will
see successful acceptance trials. The largest berthing module
in the Bertholf will house only six personnel in two-high
bunks. Its propulsion and electrical systems are the most
capable and versatile that have ever been built into a Coast
Guard cutter. The flight deck is more capable than any Navy or
Coast Guard vessel of similar size and requires no personnel on
deck to launch or recover an aircraft.
Mr. Chairman, you have seen our past and our future. When
you addressed the crew of the Project Management Resident
Office in Pascagoula, you gave them a charge. You told them,
our children are the signals we send to a future we will never
see.
Your words were stunning then, and they remain so now.
The aircraft, sensors and surface craft that Deepwater will
provide to the Coast Guard are the signals we will send to a
future Coast Guard that we will never see. For that reason, we
are building an acquisition organization that can create a
future for the Coast Guard.
Rear Admiral Ron Rabago has relieved Rear Admiral Gary
Blore as Program Executive Officer for Deepwater. Next month,
we will stand up our new acquisition organization that will
unify and strengthen program management, contracting and
workforce development. Within another year, we will create a
mission support organization that will unify our technical
authorities with the acquisition organization under a single
accountable senior flag officer.
We are nearing completion of negotiations regarding the
structural changes for the third National Security Cutter. We
have been engaged in near continual negotiations for the past
week and are close to an agreement. I hope to be able to report
to you shortly NSC 3 is under contract. This will establish the
technical baseline for changes needed to lock in the first two
cutters and create a design baseline for the remaining hulls.
This month, we will award the next term contract to
Integrated Coast Guard Systems under a substantially changed
structure. We will have the opportunity to award the contract
for a period of 43 months. We intend to limit any tasking to 18
months or less so that we can determine whether the level of
performance justifies further awards. It is important that we
retain our relationship with ICGS as we transition the Coast
Guard to a lead role in systems integration and allow for our
workforce to be brought on board and developed.
I have met regularly with the CEOs of Lockheed Martin and
Northrop Grumman, most recently in Pascagoula two weeks ago.
The focus of that meeting was the need to develop a
comprehensive, realistic, integrated schedule for the delivery
of the first National Security Cutter to complete the
consolidated contract action being negotiated as we speak this
morning.
Our next meeting will focus on aviation and logistics
issues and will be held at our Aviation and Logistics Center in
Elizabeth City, North Carolina.
On the 22nd of June, we will issue a request for proposals
for the Fast Response Cutter based on an existing design. We
are moving at best speed to bring more patrol boat hours into
the fleet. This vessel will be ABS classed.
Every integrated product team in Deepwater is now chaired
by a Coast Guard military or civilian employee, and the
remaining accomplishments are listed in my statement for the
record.
Mr. Chairman, I would ask two things of you to assist me
and the Coast Guard in continuing our progress. First, we are
seeking through our appropriations request the ability to
manage all Coast Guard personnel within a single funding
account to create flexibility to respond in gaps and surges and
needs associated with the Deepwater or other operations.
Stovepiping personnel costs within appropriation inhibits the
optimum use of resources.
Second, I am in the process of adding 50 additional
personnel to the Deepwater program management organization to
the current year programmings and the fiscal year 2008
appropriations request. I have temporarily assigned four
personnel to assist in meeting congressional reporting
requirements. I am prepared to work with the Congress to
consolidate the various information request and status reports
to effectively and transparently communicate to you and other
Committees.
Prior to responding to your questions, I would close by
assuring the Committee that as the Commandant, I am committed
to the effective execution of all of our assigned missions. I
have stated from the outset one year ago that mission execution
is our first responsibility. That includes all of our missions.
Security concerns in a post-9/11 environment present
significant challenges as have the mandates provided by
Congress. We are also mindful that the Country depends on the
Coast Guard for safety and stewardship of our maritime
transportation system and the Earth's last global commons. The
rapid growth of maritime shipping, the expansion of liquid
natural gas facility permit requests, and the fragility and
vulnerability of our ecosystems require a discussion and a
prioritization of Coast Guard resources against assigned tasks.
I look forward to the discussion. I would be glad to answer
questions.
Mr. Cummings. Admiral, thank you very much.
I want to go straight to the heart of matters. As you have
heard the opening statements, there seems to be some concern
about the systems integrator and the capacity of the Coast
Guard to take on those responsibilities. So I am going to ask
you some questions about that because I think we need to get
that cleared up.
I know you have carefully looked at your manpower and
womanpower and tried to figure out exactly your experts in this
and that and how you are going to run them and all that, but I
want to make sure the Committee is satisfied but first of all
understands exactly where you are going with this, and the
capability questions must be brought up.
The current award term for the contract for the ICGS
expires in June, 2007. Can you describe in more detail the
status of the next award and how it will be structured?
Admiral Allen. Yes, sir. Based on the evaluation of the
first award, the base award term, we are allowed to award a
contract for up to 43 months, a sole source. We are not
required to nor are we obligated to. There are certain support
functions and integration functions that ICGS provides to us
that are separate from the platform acquisitions that we can
acquire under the contract.
Our goal is to issue task orders regarding the ongoing
operations including the operations of the Systems Integration
Program Office which has the lead systems integration
responsibility right now for a period not to exceed 18 months
and to determine the level of performance before we proceed
after that. So the first thing we are going to do is there will
be no task order issued under the new contract that is longer
than 18 months even though we could go 43 months because we
want to make sure we understand the level of performance.
That also allows us to maintain a contractual relationship
with ICGS regarding the systems integration and support
functions they carry out as we make that transition. It can't
be an on-off switch where they do it one day and we do it the
next day, and this will allow for that transition.
We intend to take the current functions that are being
carried out at the Systems Integration Program Office and move
those to Coast Guard Headquarters as part of the larger
acquisition organization, but that will take over the next six
to twelve months to accomplish.
To make sure that this is carried out in a timely fashion
and we are ramping up with personnel at the same time we are
slowly lessening our dependence on ICGS, we have, over the
course of fiscal year 2007 and 2008, added approximately 50 new
people to the Deepwater organizational structure. To give you
an idea of the order of magnitude, when the contract was
awarded in 2002, we had 245 personnel assigned to project
management. As we sit here this morning, that number is 451 of
which 50 more will be added. So there have been significant
resources that have been added to this program.
In addition, we have strategic agreements with Naval Sea
Systems Command, Naval Surface Warfare Center at Carderock,
SPAWAR for things like TEMPEST testing and so we can also
partner and outsource to bring in some of that technical
competency. At the same time, we have designated technical
authorities for hull machinery and equipment associated with
design, and we have emerging together a technical authority and
program management that did not exist before.
The challenge moving forward will be to take that same
technical authority structure and apply that to the sensor
systems with our Chief Information Officer, and we are in the
process of doing that right now.
Mr. Cummings. How do we make sure?
One of the things about the Coast Guard and we hear this. I
have heard this from a number of folks, the heads of ports, and
I have heard it from various people in the maritime industry.
One of the things that they are concerned about is that people,
they do certain things for a certain period of time and then
they move on. I know that is the nature of the military.
Admiral, say, for example, we train people to do these
things that you are talking about. I know what you are trying
to do is create a mechanism so that when Admiral Allen is
fixing to retire, that systems are still in place, smooth
transition is in place, so that we keep the strong expertise
and personnel that we need, so that we don't have to keep
reinventing the wheel and keep borrowing from other people.
Admiral Allen. Yes, sir, excellent point.
Mr. Cummings. How do you do that? Have you thought about
it?
Admiral Allen. Yes, sir. You have to bootstrap it and build
it from the ground up, and these things don't happen overnight.
We are looking at some very innovative career entry level
opportunities where we can engage college students with the
right technical capabilities while they are still in school--
internships, co-ops, bring them in and stairstep, let us say to
GS-7, 9, 11, offer them a career progression fairly early on,
get them into the organization and then create that work
structure, that pyramid that we had lost over the years.
A fundamental part of the Blueprint for Acquisition Reform
in the Coast Guard is the workforce development portion of
that. We have new direct hiring authorities regarding bringing
contract specialists on board, and we will continue to partner
and find other ways to meet those gaps, but we have to grow
this workforce ourselves and make sure that it can be
sustained.
In addition to that, we have to have blue-suiters, active
duty military folks that go in and out of program management as
they go back to sea and do the things that they are expected to
do throughout a career that ultimately culminate in them being
a project manager and very similar to the operation you saw
down in Pascagoula. We have extensive experience down there as
we briefed you on it. We need to create that kind of competency
throughout the acquisition organization, and you do that with
human resources first, sir.
Mr. Cummings. Similarly, let us go back. In April, you
announced that the Coast Guard will expand the role of the
American Bureau of Shipping, and I was very excited about that.
But you went on to say, or other third parties as appropriate
to increase assurances that Deepwater assets are properly
designed and constructed in accordance with established
standards.
That is what you said.
Admiral Allen. Yes, sir.
Mr. Cummings. What exactly does that mean? Just be fair,
will you now ensure that every cutter you acquire in the future
will be classed by the ABS or another appropriate third party?
Admiral Allen. Yes, sir. The issue involving the American
Bureau of Shipping is they have a series of what they call
Naval Vessel Rules which are an interpretation of the old
military specifications to more commercial standards, and they
are actually rules specifically related to what they call a
high speed craft which is what the new Fast Response Cutter
will be.
We intend to bring ABS as part of the solicitation process,
part of the proposal review and have them involved throughout
the construction of the vessel and have the vessel classed by
the American Bureau of Shipping, sir.
To the extent we need other technical support, we have the
Naval Surface Warfare Center at Carderock that can provide us
engineering support, and we have SPAWAR that can provide us
support related to TEMPEST inspections. As you saw when you
were in Pascagoula, about one-third of our inspection force
down there is people that have 15 to 20 years experience
working for the Navy Supervisor of Ships in Pascagoula, sir.
Mr. Cummings. I was very impressed with the folks down
there.
Let me go back for just one moment to the ICGS. One of the
things I think our Committee has been very concerned about--and
I am sure the American people, when they found out about this,
are concerned about--is whether we are overspending with regard
to this project. Let me show you where I am going.
You just talked about the increase in personnel with regard
to acquisitions, is that right? The overseeing contracts, is
that right?
Admiral Allen. Yes, sir.
Mr. Cummings. As we increase, is there a decrease on the
other end? Do you understand what I am saying?
Admiral Allen. Yes, sir.
Mr. Cummings. I would hate to see us increasing our folks
in the Coast Guard and then the integrated team folks, Lockheed
Martin, Northrop Grumman are staying a certain level. How does
that work and how do we make sure we are not increasing our
costs?
I mean there may be some costs associated that may have to
be.
Admiral Allen. There is some because of the overlap.
Mr. Cummings. Right, but I just want to make sure that we
are not increasing our costs overall and then we end up paying
twice. What are you doing to make sure that we have that one
goes up and the other one goes down effect?
Admiral Allen. Yes, sir. That is exactly what is happening,
and I can give you a three year answer for the record if you
like on the amount of money that has gone into the ICGS
contract for program management and systems integration. That
is tailing off, and ours is being ramped up. We can give you
those exact numbers.
Mr. Cummings. Fine. I would appreciate that.
Admiral Allen. That is exactly what is happening, sir.
Mr. Cummings. I am going to get ready to go to Mr.
LaTourette, but I wanted to say that I really do appreciate the
visit down to Pascagoula and also down to Houston.
I think that going back to something Mr. Coble said a
moment ago. I tell you when I stood there and I spoke to two
groups of our Coast Guard's folks, I could not have been more
proud of them and to just let them know. Mr. Coble, I made it
clear to them that we are their number one fans and that we are
going to do every single thing in our power to help you provide
them with the very best that our Nation can provide and that
how we proud we are. I tell you it was just a wonderful
opportunity to address them.
To the Committee, I can't tell you how much they were
appreciative of knowing of our interest and our support of what
they were doing, and I appreciate the opportunity.
Mr. LaTourette?
Mr. LaTourette. Thank you very much, Mr. Chairman.
Commandant, when you, in your opening remarks, talked about
the appropriations bill that is on the Floor and you talked
about stovepiping, I just want to be clear because that bill is
on the Floor today. Were you referring to the request that you
made to transfer personnel devoted to overseeing and supporting
acquisitions to operating expenses, that $82 million? Is that
what you were talking about?
Admiral Allen. I was, sir.
Mr. LaTourette. Can you tell me because the bill that is on
the Floor today denies that request and says that at least the
Appropriations Committee feels that it is better if it stays in
the AC&I account as opposed to going to the ONE account?
Can you explain the basis of that and why you think that
money should have been transferred to the ONE account?
Admiral Allen. I can, sir. For many years, personnel costs
associated with a particular appropriation, in other words,
executing those funds was required to be funded out of that
appropriation.
In fact back when I was a commander at Coast Guard
Headquarters, we had a GAO desk audit where they came and they
said, for an engineer, how much work do you do that utilizes
operation expense fund and how much of your work is entailed in
designing capital investment expenditures out of AC&I?
Actually, we had a couple of anti-deficiency issues arise
because of that, so everything was stovepiped. So you are
limited in the amount of personnel you can put toward a problem
set in a particular appropriation.
For several years now, we have proposed to take our
personnel account and put it one particular funding source
which is not inconsistent with the way the other military
services do it. That allows you to do a couple of things. If
you have a surge or a gap, you can readdress within your own
operating base personnel to cover that.
It wouldn't be just a problem regarding acquisition. It
might be an operational situation regarding a mass migration or
type of a surge operation, long term surge operation following
a natural disaster. It provides flexibility.
We are willing to be transparent, provide reports on where
our personnel are assigned and so forth, but we just think it
will allow us to be more responsive to the oversight being
provided by the Congress in how we are applying human resources
to the acquisition issue.
Mr. LaTourette. Thank you, Commandant.
The Chairman, in his opening remarks, referenced a number
of the hearings, and one of the hearings that we had was an
oversight hearing, an investigative Subcommittee, I guess, done
with the Full Committee. I am sorry you couldn't have been with
us until 11:30 that night. We had a good time.
But there were some reports that followed that hearing, and
I think that those reports were at least disturbing to me
because some of the things that were in those reports were not
what I came away from at that hearing. The reports suggested
that secure communications installed aboard the lengthened 123
foot patrol boats failed the TEMPEST inspections and that the
use of these vessels could have and some suggested did expose
national security information to unauthorized persons.
Were you made aware of those allegations at that hearing
and what response do you have to that?
Admiral Allen. I am aware of the allegations, sir.
To state this very briefly, I know the hearing had
exhaustive treatment of this issue but to summarize before I
make a statement. A TEMPEST certification is divided into both
a visual inspection and a test of emanations that might come
from the cables. There has been exhaustive information provided
to the Committee on how that came about, changes that were made
regarding the equipment, a lack of a waiver procedure for the
Coast Guard, all of those which have been put into effect since
the lessons learned from the 123s.
To my knowledge, and I have talked extensively with my
staff, we have no indication there were ever any insecure
emanations made from those vessels while they were operating.
I would also add that to the extent there are questions,
and I noted earlier this sometimes becomes a he said-he said-
she said-they said regarding whether or not there is
compliance. I would submit to the Congress that I would request
that you call the National Security Agency and have them
testify, and I think they would be the experts of record
because they own this program for the Federal Government.
Mr. LaTourette. Thank you, Commandant.
Lastly, one of our hearings touched upon the fact that
there were some rulemaking projects that the Coast Guard was
undertaking, and staff tells me that that may be 100. Could you
just give us an update of where you are with these rulemaking
projects?
Admiral Allen. Yes, sir. It is of some source of concern to
me and has been for a while even before I assumed the duties as
Commandant. To give you an example, I will give you a rough
order of magnitude, and we will give you an exact answer for
the record.
But I believe around 9/11 we had about 50 or 51 rulemaking
projects that were backlogged that we were working on, anywhere
from invasive species on the Great Lakes to alternate tonnage,
a wide variety of issues that impact maritime transportation
security and safety and, quite frankly, facilitation of
commerce, if you will. That backlog is over 90 right now. A lot
of these have been generated by new legislation, the Maritime
Transportation Security Act, SAFE Port Act and so forth.
We are working on these now, but basically have roughly,
with some modest increases, the same workforce that we had
before 9/11. It is of significant concern to me that I have
raised it in meetings with Members, and we are looking at a way
to prioritize these things, come back and communicate to the
Committee.
We are going to have to do one of two things. You have to
prioritize what you can do with the resources you have or you
have to look at resources.
One of the things I am concerned about right now is the
proliferation of requests for permits for liquid natural gas
facilities that require extensive Coast Guard oversight for
waterway suitability assessments. Then if there is a
suitability assessment that says that a plant can be operated
with certain security or safety safeguards, I am not sure if
there has been an adequate enough public discussion about who
should provide those resources.
Is that something that should be passed on to the consumer
through the price of goods? Is this a local responsibility, a
Federal responsibility? I think that needs much, much more
discussion, sir.
Mr. LaTourette. Thank you very much, Commandant. I know
that the Chairman would be happy if maybe you didn't do that
waterway survey up at Sparrows Point and take care of that.
Thank you, Mr. Chairman. I yield back my time.
Mr. Cummings. Thank you very much, Mr. LaTourette.
Mr. Larsen?
I am sorry, Mr. Bishop, and then we will come back to you.
Mr. Bishop. Thank you, mr. Chairman. Thank you very much
for holding this hearing.
I want to pick up on where you just left off on the LNG
issue. There is an LNG platform proposed in my district. The
captain of the port issued a report, a waterway suitability
report that said that the facility would be acceptable, would
not impair the waterway but that the Coast Guard would need
significant additional resources, and he specifically indicated
that one of the things that he needed would be a new 110 foot
cutter.
Now given the difficulties with the 110 foot cutters that
we currently have that we all have discussed, the IG's report
says that the ability of you, of the Coast Guard to close its
patrol gap is compromised by the shortfall of cutters.
How do you see the Coast Guard going forward with respect
to dealing with this issue of securing LNG platforms? There are
42 some platforms I believe proposed all over the Country.
So given, if you will, the juxtaposition of Deepwater which
admittedly has not gone the way any of us would like it to go
and now a new demand that perhaps was not foreseen at the time
Deepwater was conceived, how do you see this playing out?
Admiral Allen. Yes, sir. First of all, I thank you for the
question.
When we look at a requirement for security or safety or any
mission requirement for the Coast Guard, it is always better to
look at the requirement. In this case, if there is a
requirement for a certain number of hours for a patrol boat to
be operating there, that doesn't necessarily presuppose that
110 foot cutter would be the right cutter. In fact, most of the
cutters that operate in and around Long Island Sound are 87
foot cutters, and there is one that is home-ported in New
London, Connecticut.
We have, with supplemental money provided by the GWOT
supplement that was just passed, placed on order with Bollinger
Shipyard a request for 4 87 foot patrol boats. There are many
places at the lower end of the operating spectrum of 110 foot
patrol boats where we can use those patrol boats to do the same
thing, and the type of patrols in and around an LNG facility
would be something that would be suitable for an 87 footer.
So we are able to mitigate the gap that is currently
existing right now while we bring the new Fast Response Cutter
online through a number of way crewing 110 foot cutters down
south. We are buying 4 additional 87 foot patrol boats, and we
have negotiated with the Navy to retain their 179 foot patrol
boats they had transferred to us through 2011. Three of those
will be stationed in Pascagoula.
But I would separate out the requirement to have a presence
on sea to meet the conditions of the waterway suitability
assessment and how that source. I would add, as I stated
earlier, I think there needs to be a public discussion on
whether or not that is a Federal role or not.
Mr. Bishop. Thank you. Thank you for that.
One more question, if I may, the VUAV acquisitions project,
and I am going to reference Mr. Skinner's testimony which I
don't know whether you have seen or not.
Admiral Allen. I have.
Mr. Bishop. If I have this correct, we will spend
approximately $198 million of the $500 million that had been
originally contemplated for 45 VUAVs. We will spend $198
million and take ownership of only 2 VUAVs if I understand the
IG's testimony correctly which would suggest that we will have
committed 40 percent of the at least expected expenditure for
this project but only have 5 percent of the assets.
So my question is, the VUAV program, if we are going to
carry it forward, are we likely to see significant cost
overruns or is this a program that may not realize the
potential that you first? If that is the case, what does that
do to the NSC capability?
Admiral Allen. Yes, sir, a fair question as well.
Just a general statement for all the Committee Members,
what we are doing right now as part of the Deepwater program is
take a look at every single platform, going back and revisiting
the business case, where we are at, is the current solution the
right solution, is there enough competition, and what is the
best way forward.
The solution that was offered for a vertically launched
UAV, which is part of the larger system for both the National
Security Cutter and the Offshore Patrol Cutter to increase
their effectiveness, if you will, to be able to allow us to
reduce the number of vessels that are operating out there,
assumed that we would operate with vertically launched UAVs. At
the time the contract was awarded, there were only two out
there that might be viable, a helicopter drone and a tilt rotor
type drone which is what was offered to us by ICGS.
In the last year since I became Commandant, we have had a
technical evaluation done that tells us there is risk
associated with proceeding forward with the vertically launched
UAV that was offered by Integrated Coast Guard Systems. We have
stopped at this point and are looking at other alternatives. We
do not want to proceed forward and make another mistake that
results in the same type of first article failures we have had
before, so we are calling an all-stop, assessing where we are
at and if there are other solutions to providing that type of
surveillance with the National Security Cutter package.
We do recognize as the IG has stated, however, that if you
deploy that vessel without the proper aviation assets with it,
you will not get the mission effectiveness that was advertised
in the proposal by Deepwater.
So I would tell you that we probably in the next three to
four months owe this Committee a way forward on VUAVs.
Everything has been kind of queued up with the National
Security Cutter and the 123s being at the top of the triage
list, I would say right now. But we do not anticipate any
further action on the vertically launched UAV task order that
we have got in place right now until we clarify the way forward
for the aerial assets to be with the NSC.
Mr. Cummings. The gentleman's time has expired.
Mr. Bishop. Thank you.
Mr. Cummings. Thank you.
We are very pleased to have the Ranking Member of our Full
Committee, Mr. Mica.
Mr. Mica?
Mr. Mica. Thank you and thank you for conducting this
important follow-up hearing. I think it is very important that
we proceed as Mr. Cummings and I worked very closely together
for a number of years, and I appreciate his thoroughness on
this important responsibility he had inherited.
I had some questions. As you know, Admiral Allen, I was a
little bit concerned about sort of the stampeding of the Coast
Guard into becoming the systems integrator and not having the
capability to do systems integration in these large projects.
First of all, I have to say looking at the history of the
Deepwater problems, you inherited most of this and you have
done a great job in trying to resolve some of the problems that
you inherited. Many of these decisions go back long before you
took your current position.
I still have some questions, though. Now it is my
understanding that the contract, the ICGS contract, is going to
continue with a maximum of 43 months but 18 months, is that
what you said, for any one assignment?
Admiral Allen. Yes, sir, that is correct.
Mr. Mica. Also, you talked about the number of personnel.
The thing that concerned me about the Coast Guard becoming the
systems integrator is the ability, one, to attract the
personnel that you need to do that kind of job.
I think the mistake they made was not having a third party.
You have Northrop Grumman and Lockheed, who have formed this
consortium, are doing the whole enchilada. We should have had
somebody else. Someone writes the specs. Someone conducts the
systems, oversees systems integration and some oversight
responsibility.
You also said you went from 240 to was it 400 and some?
Admiral Allen. Four hundred and fifty-one, yes, sir.
Mr. Mica. How many of those are enlisted Coast Guard
personnel versus civilian employees?
Admiral Allen. Right now, I can give you a rough
approximately. I would be glad to answer for the record.
Mr. Mica. Of the added personnel.
Admiral Allen. It is about one-third military, one-third
civilian and one-third contractor, sir.
Mr. Mica. With that combination, you feel you can have in-
house the expertise to perform?
Admiral Allen. I would say to begin the transition, sir. As
I mentioned earlier, we are going to need to build a larger
workforce. We have time to do that. In the meantime, we need to
partner with the Navy and other folks to provide some of this
expertise and capacity that we need, but we have to build
ultimately an organization.
Mr. Mica. Are the contractors an en bloc number that you
retained someone or you hired them individually?
Admiral Allen. We retain a third.
Mr. Mica. You said a third are your personnel.
Admiral Allen. Yes, sir. We can give you a breakdown on it,
but it is usually a contractor that we award a contract, and
they provide the personnel, a support contractor.
Mr. Mica. See, I don't think you can hire in-house all the
expertise that you need and retain them. I mean your average
enlisted person probably is in and out in how many years?
Admiral Allen. Well, we don't have very many enlisted
people doing this. If they are, they are usually senior, sir.
Mr. Mica. I know. I know, but I am just saying your average
Coast Guard person. Even with a Commandant now you get a four-
year slot.
Admiral Allen. Yes, sir, I am term-limited.
Mr. Mica. And you are cleaning up the mess from the last
one. But these programs do take a long time. This started over
four years ago.
Admiral Allen. Yes, sir. This is building for the future.
Mr. Mica. Exactly. Then a lot of this is contingent on
Congress providing additional money. What was the figure that
you need to have the personnel and have the additional physical
capability of putting in place the component to do this job?
Admiral Allen. Well, we actually have requested increased
personnel as part of the fiscal year 2008 request, but the
other issue was having the ability to have more expanded use of
all personnel funds in the Coast Guard so you can surge if you
need to do that.
Mr. Mica. I think that there were some problems that a
Member relayed.
Admiral Allen. Yes, sir.
Mr. Mica. But did you have a dollar total figure?
Admiral Allen. The entire amount of personnel applied to
the acquisition, construction, improvement portion of our
budget is around $82 million.
Mr. Mica. Around $82 million.
Admiral Allen. Eighty-two million, yes, sir.
Mr. Mica. On an annualized basis.
Admiral Allen. Yes, sir.
Mr. Mica. All right, well, again we will watch this. I know
you are trying to clean it up, and you have done as good a job
as possible in trying to put in place, something, a mechanism
and a protocol so that we don't have the same problem.
Thank you. I yield back.
Mr. Cummings. Thank you very much.
Before we go on to Mr. Larsen, let me just follow up one
real quick question.
The one-third military, one-third contract and one-third
civilian, do you anticipate, Admiral, that those percentages
remain the same or is there an effort to, say, reduce the
contractors and increase the civilians or increase the military
and what have you?
Admiral Allen. I think we need to increase our civilian
workforce and diminish the number of contractors. I am not sure
what that right balance is because you always need a margin
just because of the ebb and flow of work. Civilians provide us
continuity across changes in military assignments as was
mentioned earlier.
But one of the things we are going to have to do is create
a pyramid so there is career growth. One of the challenges we
have currently in the Coast Guard is with being largely
military and only having about 6,000 civilians. In some
specialties, there is not a broad enough pyramid or base, if
you will, to be able to support upward mobility, and we need to
take a look at that. That is the reason the structure of some
of these ratings is going to be important.
But we have had success, believe it or not, in wooing some
of the folks that are working for our contractors to come on
over once we get those positions established on the civilian
side. My goal is to diminish somewhat the contracting force but
not entirely, sir.
Mr. Cummings. Mr. Larsen?
Mr. Larsen. Thank you, Mr. Chairman.
Admiral, regarding the C4ISR issue that I mentioned in my
opening statement, the OIG reported in their testimony--I think
you indicated you had read the OIG testimony--on page seven of
the OIG testimony talked about them reviewing the efforts to
design and implement C4ISR to support the Deepwater program,
lack of discipline and changed management processes provided
little assurance that requirements remain up to date or
effective and meet program goals. Certification and
accreditation of C4ISR equipment was difficult to obtain and so
on.
Your statement discusses that and your written and oral
testimony indicates to the best of your knowledge there was no
compromise of classified information and suggests that we look
into that, and I am sure we will.
But I think what I gather from the OIG's comments wasn't so
much whether classified information was compromised or not but
that there were problems with certification and accreditation
regardless of the outcome on the other end.
So I was wondering if you could address the issue the OIG
brings up, that is, the challenges of the certification and
accreditation and then what steps you are taking to address
those challenges.
Admiral Allen. I am happy to do that and thank you for the
question, sir.
The way the Coast Guard's technical community is structured
right now is really in two different offices. One, we have the
CG-4 shop which is a civil engineering, naval engineering and
aviation engineering and ocean engineering. The electronics
engineering and censor part of our technical world comes
underneath the CIO shop in the Coast Guard which is the CG-6
organization.
Early on when I became Commandant, it was clear that the
technical authority vested in CG-4, even if it was not
explicit, was not good enough to make sure that the contractors
were adhering to standards. We officially designed the CG-4
shop as a technical authority for all those engineering
disciplines that they own.
We are in the process now of doing exactly the same thing
for the CG-6 shop, the CIO, and make them the responsible
technical authority not only for issues like TEMPEST
certification and dealing with the National Security Agency,
SPAWAR and so forth but to have the technical authority reside
in them for certification and accreditation for C4ISR systems,
sir.
Mr. Larsen. Well, before that, was the authority to do that
floating around the Coast Guard?
Admiral Allen. I am not sure it was floating around, but it
wasn't explicitly delegated in terms of a written instruction
to me, saying you are accountable and there is going to be a
person that is, for instance, for an air search radar. This is
the one that certifies that the requirements are being met, and
that is what we are doing, sir.
Mr. Larsen. Okay, so that is how you are addressing that.
Admiral Allen. Yes, sir.
Mr. Larsen. Can I ask a question about helicopters as well?
In your written testimony, you start off, and I encourage
everyone to read early on in your testimony, some great stories
about the results of some of the investments including the
great story in Washington State of this high altitude rescue--
you call it daring, I think--and the video from this rescue, of
this high altitude rescue at 7,000 feet in my home State of
Washington State. It is, in fact, pretty compelling and pretty
exciting to watch, and that was on a helicopter with new
engines or re-engined engines, some great stories.
However, there is always a but in this. Again, the OIG
indicates that after some recommendations were made, the Coast
Guard did not concur with any of the agency's 65
recommendations that it had made. It goes on to say that Coast
Guard officials said that ICGS minimized operational legal
costs and contract performance risk associated with re-
engining.
Can you address the OIG's comments? Those are on page seven
of the OIG's testimony with regards to helicopter re-engining.
Admiral Allen. I can, but I would just make a general
comment.
There were a number of decisions that were taken over the
last three or four years in the course of Deepwater that were
senior management decisions that were not documented to the
level that there was an audible or traceable record on which
the IG could determine how the decision was made. For instance,
we merely issued the DTO for the construction of the NSC
because it required no more affirmative action than to do that,
but the lack of a business case on the subject and the basis
for the decisions brings into question whether or not terms are
being dictated to the Coast Guard.
I was present and understood when the decision was being
made to re-engine the helicopters that it was done to mitigate
risk. We knew there was a cost premium associated with that. We
knew that we could have ordered the work directly to our
logistics center in Elizabeth City, North Carolina, but the
decision was taken, maybe not documented to an audible trail
level of specificity, but that was the decision that was taken.
We could have gone other ways through a sole source
contract or a sole source award through our own logistics
function. But we were mitigating risk and, at that point, we
considered the additional cost associated with going through
ICGS was worth the value achieved in reducing the risk to the
acquisition.
That was the decision that was taken. Whether or not there
was an adequate business case to support that, that is up to
question. But I was there. I was privy to it. That was the
decision taken.
Mr. Larsen. Thank you.
Thank you, Mr. Chairman.
Mr. Cummings. Thank you very much.
Mr. Coble?
Mr. Coble. Thank you, Mr. Chairman.
Admiral, thank you for your testimony today. Let me put a
two part question to you, Admiral.
As you know, the problems of Deepwater have been widely
reported in the media and closely scrutinized by the Congress.
In fairness to you, I would like for you to tell us some of the
segments of the program that are succeeding, number one.
Number two, what, if anything, can be salvaged from 123
conversion and what can be done to recoup some of the monies
expended on that project to assure that similar situations do
not subsequently occur?
Admiral Allen. Yes, sir. A couple of successes: the
retrofitting of our Legacy Cutters with new sensor and
communication equipment has been very successful. We have the
ability now to come up and classify what we call SIPRNET,
secure internet protocol router chatrooms. Where we used to
have to relay requests up the chain of command for permission
to do something, everybody is on the circuit at once, if you
will, negotiating how the resources do apply to what the
problems are that are out there.
The Coast Guard Cutter Sherman recently set a maritime
record seizing nearly 20 tons of cocaine off Panama just a
matter of weeks ago. That whole operation, including the
pursuit into Panamanian waters under the bilateral agreement
with Panama, was facilitated through SIPRNET chat that did not
exist before the Legacy equipment was put on the old cutters.
So the ability to operate these old cutters with a higher level
of efficiency is a significant win, and our commanding officers
out there love this equipment.
We are happy with where we are going with the Casa 235
aircraft. We are in the process now of testing the mission
palate. That is the integration of the sensor suite in the back
of the aircraft. We have achieved connectivity with that first
palate in the C4ISR Center of Excellence in Morristown, New
Jersey.
We need to finish the tests and evaluation of that to make
sure that the new palate integrates with the aircraft. We are
ready and into full production on the airframe itself. Once we
are sure of the integration on that, then we need to pull that
forward as fast as we can.
Where we do achieve success, I think we need to selectively
accelerate those things and pull them forward. If there is not
an issue with first article performance, let us buy that out
and get it off the table because we have other problems we have
to deal with.
Regarding the 123s, we have revoked acceptance of those
cutters. That is the first step in the process of recouping the
Government's interest in the money that was invested there.
There is some residual value related to the short range
prosecutors, the boats that were delivered with the boats, the
sensor suites that are on the boats and the engines that are in
the boats.
Ultimately, we will come up with a fair value that the
Government should receive in consideration for this, and we
will take that to ICGS and request that money be returned. At
that point, we will move on to whatever legal remedies are
required after that.
Mr. Coble. You can keep the Committee up to speed on the
progress to that.
Admiral Allen. I would be happy to do that, sir.
Mr. Coble. Thank you, Admiral.
I yield back, Mr. Chairman.
Mr. Cummings. Mr. LoBiondo?
Mr. LoBiondo. Thank you, Mr. Chairman.
Admiral, you just referenced the drug bust with the
improved capability for communication. Can you just briefly say
what implications that would have for homeland security, how
that would apply?
You told us how it applied in the drug bust.
Admiral Allen. Maybe I can give you a better example. There
are some cases where there is a threat approaching this
Country, and it could be a migrant or a drug boat but where you
may have cause to want to use warning shots or disabling fire.
Traditionally in the Coast Guard, that starts at the unit
level with the commanding officer, goes up maybe through the
local sector to the district command centers, sometimes to
headquarters for interagency consultation regarding the country
that is involved and the particular situation where we are
trying to negotiate what we call a Maritime Operational Threat
Response.
To be able to do that in parallel at the same time and not
sequentially reduces a process that could be a half hour to an
hour to hours. In some cases, we have been able to reduce that
down to 15 minutes or less, that allows the commanding officer
on the scene to be able to react to the threat, in some cases
before they might enter the territorial sea or actually get
involved in an illegal operation because we had not gotten the
permission to use warning shots or disabling fire.
Mr. LoBiondo. So pretty invaluable.
Admiral Allen. It is.
Mr. LoBiondo. Admiral, your statement indicated that you
will be releasing a request for proposals to build the interim
Fast Response Cutter B in the next couple of weeks. The cutter
will replace the rapidly failing 110 patrol boats and the
failed 123s. My concern and I think a concern of the Committee
is the time it will take to field the Fast Response Cutter B. I
understand the first one will not be in the water until 2010,
is that correct?
Admiral Allen. The proposal has that right now. I have been
working hard with our folks to try and incentivize us to make
it sooner than that, sir. We can't get these boats soon enough
and if I can get them before 2010, I will, sir.
Mr. LoBiondo. There is still a delay here. Meanwhile, the
readiness gap, I think, is at about 25,000 hours--if my
information is correct--25,000 hours annually and will be
expanding. How do you plan to make up the gap?
Admiral Allen. Yes, sir, I will give you a qualitative
breakdown of where that is at, and we can give you an answer
for the record as to actually the hours we are accumulating
right now.
About half of those hours have been recouped by taking the
eight crews and the maintenance money associated with the 123s
that were taken out of service and double-crewing 8 boats, 4 in
Miami and 4 in St. Pete. So we are basically recouping close to
50 percent of those hours by just using the crews on other
vessels and operating the vessels at a higher tempo. We are
taking the maintenance money associated with the 123s and
supporting those higher maintenance costs with that.
This is not unlike the operations we are running in the
Persian Gulf with the six patrol boats over there that have
been serving in superb fashion for a number of years now
because we have the right maintenance processes in place. That
is one.
Two, we are making better use of maritime patrol aircraft
down there as far as taking the search out of search and
seizure or search and rescue. We are also using multi-mission
hours that are available to us through our buoy tender fleet or
the cutter fleets to fill in those other hours, and we can give
you a detailed breakdown of where those hours are coming from,
sir.
Mr. LoBiondo. Thank you.
One more question, Admiral, can you explain if there will
be any impact on the schedule for the replacement of the Legacy
assets from the service's efforts to build an acquisition staff
and assume the role of systems integrator and what steps are
you taking to mitigate that potential?
Admiral Allen. Well, I think we have to almost on a yearly
basis, and I think we need to be up here talking with you folks
about how the organization is being stood up.
We are going to be making one by one decisions on every one
of these platforms. In other words, how are we going to
continue with the Casa 235? Where are we going to go with the
FRC, the NSC, the Offshore Patrol Cutter? Each time we make a
decision to bring a new platform on, we are going to have to
balance that with the capacity, capability and competency
needed to execute that in a lead systems integrator role.
There have been a lot of requests for status from a number
of Committees this year. I think we need, on an annual basis,
to say, here is the plan. Here are the platforms that are
coming on board. Here is the human resource plan that supports
that, the workforce development plan that support it. Where
there is a gap, it will be filled by ABS certification,
agreements with the Naval Sea Systems Command, putting
supervisor ship inspectors into our Project Management Resident
Offices, and that plan needs to be transparent to you, sir.
Mr. LoBiondo. Thank you. I will just close, Admiral, by
saying thank you for your outstanding leadership at this very
critical time.
Thank you, Mr. Chairman.
Mr. Cummings. Thank you.
Let me just ask a few wrap-up questions because the IG is
going to come up and I want to make sure that I address some of
the things that the IG may be addressing so that you will have
an opportunity to do that. Not all of these things but I am
going to try to go through a little list of things that I am
concerned about.
The 123 program, first of all, I was very pleased and I am
sure all of us were pleased that you rescinded the delivery of
the 123s. It just made sense.
But there is a piece of that that really interested me, and
I have expressed these concerns to at least Lockheed Martin. I
want the American people to get every dime, not every dime,
every penny of the money that they are due as a result of not
getting what they were supposed to get, and I want to know
where are we on that piece. It is one thing to rescind. It is
another thing to make sure that the American people get their
money.
I just want to know. What is the status of that? As a
lawyer, I know that you are not necessarily going to get every
penny, but I just want to know where that stands.
Admiral Allen. The next step is for the Coast Guard to
issue a letter to ICGS, saying, here is the dollar amount, we
would like it back.
Mr. Cummings. You have already done that?
Admiral Allen. We are in the process of finalizing that
number, yes, sir.
Mr. Cummings. And so, you are going to ask for a certain
amount of money. Can you share that with us later if you can?
We don't want to interfere with your negotiations.
Admiral Allen. Yes, sir. I would have to check with my
contracting officers and my attorney if it is allowable.
Mr. Cummings. Fine. I understand. I understand.
We just want to make sure that the American people get
their due. I just don't think that you can have a situation
like this, Admiral. It sends a bad message to a whole lot of
people.
Admiral Allen. Sir, it sends a bad message for the Coast
Guard.
Mr. Cummings. Yes, but what I am saying is that we teach
our kids that you keep a commitment. You deliver what you say
you are going to deliver. Then we see a situation, as I have
used the example, where you go and buy, for example, a $375
lawnmower that doesn't cut a blade of grass, and then the
United States of America's taxpayers' dollars are being spent
on that. We can't have that.
A lesson must be sent. I mean the word must go out that
when you do that to the American people, the American people
want their money back. It is just simple, basic accountability.
But I want you, if you can, to just keep us apprized of
that. We know that you are working with your lawyers and
everything. I am just glad that it was a two part statement.
Admiral Allen. Yes, sir.
Mr. Cummings. We rescind. We want money back.
Admiral Allen. Yes, sir.
Mr. Cummings. Now let me go to some of the things that the
IG may be concerned about. First of all, when do you anticipate
taking delivery of NSC 1?
Admiral Allen. My best guess, this is caught up in the
current negotiations because one of the things is we can't
close on the current contracting arrangements right now until
we both agree on how many hours it will take to finish NSC 1
and then establish the cost to be able to settle all the claims
associated with that, and that is where we are about now.
I would tell you that the hull and machinery portion, the
stuff that you saw below decks, will probably be ready sometime
before the end of the calendar year. The sensor suite, while it
may be there, it may be after the end of the calendar year. So
I would err on the side of conservatism and tell you that
acceptance trials probably after the first of the year, sir.
Mr. Cummings. What, if any, are the systems that will not
be fully operational and mission-ready when you accept delivery
of the ship? Do you anticipate such?
Admiral Allen. That is another great question.
Since we are going to retrofit certain portions of that
ship, we have to agree on what is the NSC that will be
delivered because, as we know, once we issue the construction
order for NSC 3, we will establish a technical baseline that we
have to go back and change 2 and 1. Knowing that will happen at
a later date than acceptance, we have to define what is
acceptance and what is that hull at acceptance, and that is the
basis for the current contract negotiations that we are about
to close, sir.
Mr. Cummings. Do you anticipate the ship will be TEMPEST
certifiable when delivery of the ship is made?
Admiral Allen. Yes, sir. We spoke when you were down there.
We showed you the cabinets and the cables, sir.
Mr. Cummings. If you recall, when I was down there, there
was that issue of nine feet.
Admiral Allen. Nine feet versus twelve feet, yes, sir.
Mr. Cummings. So you all anticipate you will be able to
address that.
Admiral Allen. Yes, sir, as you remember, the 12 feet was a
standard that was developed many, many years ago that was based
on the fact that there would be physical separation of visual
inspection and then an emanation inspection. We are waiting for
the results of the test, and we will provide that to you as
soon as we have it, sir.
Mr. Cummings. Now let me just ask you a few more questions
about the life, fatigue life of NSCs 3 through 8.
Admiral Allen. Yes, sir.
Mr. Cummings. Before you begin construction on NSC 3, will
you have implemented a new design to strengthen the hull
fatigue life and, if so, can you describe that design?
Admiral Allen. Yes, sir. In fact, the basis for the entire
what we call a consolidated contracting action is to decide
what the baseline is moving forward from NSC number 3. Once you
do that, then you know what you have to change in 1 and 2. So
the very first decision that is being negotiated right now is
the changes related to the NSC 3 design and what are we going
to do.
My statement for the record has a schematic, and we can
answer in a lot of detail. But as we explained when we were
down in Pascagoula the other day, the biggest change will be to
make a separation between the two superstructures so that
stresses associated with the ship when it is hogging and
sagging can't be transmitted back and forth through the ship
and create a way to absorb the stresses. There are some other
areas regarding transitions between certain areas of the
structure that will be strengthened and reinforced.
These are based on an agreement between our technical
authority that has now been designated for hull and machinery
and the program manager, that that is the fix that will
guarantee the service life of the ship that is being designed
as NSC 3, sir.
Mr. Cummings. What you just told me, has the Navy Surface
Warfare Center at Carderock gone over that, what you just said?
Admiral Allen. The changes that were recommended by our
technical authority were based on a finite element analysis
conducted by Carderock Surface Warfare Center that were subject
to previous hearings, sir.
Mr. Cummings. Perfect, perfect. I want to make sure we are
learning from our mistakes.
Admiral Allen. Yes, sir. In fact, before Carderock did the
finite element analysis, this was just a supposition on the
part of our engineers based on their experience that there
might be problems just based on their knowledge of how
structures work. The Carderock finite element analysis
basically corroborated what our engineers believed to be the
case on fatigue life, sir.
Mr. Cummings. Do we have any idea about how much that
design will cost?
In other words, we are making some changes. We had
anticipated a certain amount the NSC 3 costing.
Admiral Allen. Yes, sir. In a matter of days, as soon as
that NSC 3 task order is awarded, we will be able to tell you
the costs for NSC 3 and the following hulls, sir.
Mr. Cummings. Are you confident that the new design will
enable NSC 3 through 8 to be underway for 185 days per year in
the general Atlantic and north Pacific sea states without
experiencing hull buckling or cracking?
Admiral Allen. Yes, sir. It will allow them to be away from
home port 230 days and approximately 180, 185 days in the
operational environments that were exposed under the finite
element analysis that Carderock conducted, sir.
Mr. Cummings. To what extent does the ICGS team or Northrop
Grumman now believe that there is a problem with the fatigue
life on the NSC and to what extent will Northrop Grumman assume
responsibility for the cost of strengthening hulls 1 and 2, if
you know?
Admiral Allen. Sir, the difference between Northrop Grumman
and the Coast Guard on this issue is as follows and, not being
a naval engineer, I will extend revised comments if I could for
the record.
Mr. Cummings. Yes, you may.
Admiral Allen. To the best of my knowledge, the
construction standards used by Northrop Grumman to develop the
design of the National Security Cutter were based on something
called design data sheets and general specifications that are
used to build military vessels. That is a different type of a
design approach than our engineers used to assess the fatigue
life.
In other words, we accepted the design offered by Northrop
Grumman for the National Security Cutter based on the
technology they had at the time, military specifications. We
are applying a different standard to assess fatigue life.
Northrop Grumman feels they have met the requirements of
the contract with the technical basis for their designs. We
believe they have not. Therefore, it is a Government-requested
change, sir.
Mr. Cummings. I see. And so, you feel confident that your
recommendations are better than Northrop Grumman's. In other
words, it will serve our purpose better.
Admiral Allen. I think that is a better way to say it.
Mr. Cummings. The purpose of the Coast Guard.
Admiral Allen. Yes, sir.
Mr. Cummings. I am not trying to get you to beat up on
Northrop Grumman.
Admiral Allen. No. I talked to them.
Mr. Cummings. Again, I am trying to make sure that we are
clear as to what we are bargaining for, and I want us to be
clear as to what performance is, and I want to be clear as to
making sure that we have the kinds of equipment, i.e., ships to
do the job that the American people expect us to do.
Admiral Allen. Yes, sir. We are in violent agreement, sir.
Mr. Cummings. Let me ask you this, and this will be my last
question. When you look, I just want you to do a little crystal
ball thing for me and try to tell us.
You have what, about a year and a half left, two years
left?
Admiral Allen. In my term, sir?
Mr. Cummings. Yes.
Admiral Allen. Three.
Mr. Cummings. Three years?
Admiral Allen. About three years.
Mr. Cummings. What do you want to see?
Everybody up here just about has expressed tremendous
confidence in you, and it is not too much that we all agree on.
I can tell you. But that says a lot. So I want to know.
Now, you can't tell me exactly, but every morning when you
get up, you must say, at the end of my three years, I want to
have accomplished this.
I just want to know, what is this? Do you follow what I am
saying?
Admiral Allen. Yes, sir. It is an organization that is
positioned to execute its mission to the standards that the
American people have come to expect of us especially in a post-
Katrina environment and having the mission execution and
mission support structure that allows us to do that effectively
but also allows us to adapt to change and changing external
environments.
As I stated in my State of the Coast Guard speech--and you
were there, sir--we have been acting like a small business when
we are a Fortune 500 company. We have got to get our business
processes, command and control, and the organizational
structure of this Coast Guard to be more flexible, agile and
adaptable including human resources and technology and
everything.
I consider myself a transition commandant trying to
reposition the service for success far after I am gone, sir.
Mr. Cummings. I take it that with all that has happened,
there were plans before and those plans had to be changed to a
certain degree. Can you give us a new schedule?
Admiral Allen. Are you talking about the National Security
Cutter?
Mr. Cummings. I am talking about now with regard to
Deepwater, period. In other words, you expect certain things to
be happening at a certain time.
Admiral Allen. Yes, sir.
Mr. Cummings. I am just wondering, can you submit to us?
I don't want a situation where we have to keep, not have to
but keep bringing you to the Hill to tell us where things are.
I think that you realize the reason why we did this, this time,
is because we were in a critical situation.
I personally think that this Committee has been very
helpful in helping you to do the things that you have been
trying to do. Again, we are your number one fan.
Admiral Allen. Yes, sir.
Mr. Cummings. We are just trying to make sure that things
are the best that they can be. I guess what I am trying to get
at is exactly because of the problems we experienced, we learn
from them and we go forward.
I am just asking, can you get a new schedule as to when you
see certain things being completed?
Admiral Allen. Yes, sir. I think on an annual basis because
there are certain things that impact a schedule: contractor
performance that you are observing, the level of funding you
may get year to year that may not be what was anticipated early
on that impacts the number of units you can produce on any
particular platform.
This is almost going to have to be a year to year
presentation to you across all platforms. We come with a
budget. Here is what we are requesting this year. Here is what
we got last year. Here is the progress we have made. Here is
where I think we are going.
I would tell you that I haven't compiled them all side by
side and sat down and looked at them. If you look at all the
pending provisions that have either been included in the GWOT
supplemental or are being considered right now, collectively, I
think give you that information.
As I mentioned in my opening statement, I would like to
work with the Congress to create a transparent way to give you
that information on a real time basis so we hold it, you know
it and there are no surprises, sir.
Mr. Cummings. Last but not least, then I will go to Mr.
LoBiondo if he has anything, and I understand Mr. Larsen has a
follow-up question, but let me ask you this.
You mentioned a few moments ago that you said there were
Government changes, is that right, I think with NSC with regard
to 3? You said there were Government changes.
Admiral Allen. Yes, sir.
Mr. Cummings. Who pays for that?
Admiral Allen. We do, sir, if we ask them to be done.
Mr. Cummings. Okay, very well.
Mr. Larsen?
Mr. Larsen. Thank you, Mr. Chairman.
Just a quick couple of questions, regarding the FRC B, the
off the shelf model, has the initial failure of a composite
hull model soured the Coast Guard on composite hulls as you
move forward?
Admiral Allen. I am not sure we are soured on composite
hulls, and I think composites have shown themselves to be
successful in other areas, particularly the superstructures and
naval vessels and reducing the weight and long term durability
and lower maintenance cost.
I think, in our case, applying that technology to a high
speed craft of that size had not been demonstrated before, and
we had done two things that weren't done early on when we
started pursuing a composite variant.
Number one was just plain business case analysis. How much
is it going to cost to do this because to achieve a certain
speed and certain requirements, it requires a certain amount of
horsepower that drives the parameters of the boat? The second
one was the technical issues and the risks associated with
producing the boat. Both of those told us that this was a high
risk and we needed to take a look at mitigating the risks
associated with that.
While all that has been going on, you can't wait for all
that to be done to fill this patrol boat gap as we talked about
earlier. So we elected to proceed with the FRC B instead.
Mr. Larsen. Right. Finally, in your oral testimony and in
our questions, we have focused on the 50 or so folks that you
plan to hire for acquisition, but you mentioned 4 people that
you have assigned specifically to respond to various requests
probably from us here.
Admiral Allen. That is correct, sir.
Mr. Larsen. If those four weren't responding to our
requests, what would they be doing?
Admiral Allen. They would be applied somewhere else in the
organization, working on the problems that have been discussed,
sir.
Mr. Larsen. Pardon me?
Admiral Allen. They would be applied somewhere else in the
organization, working on the problems that have been discussed,
sir.
Mr. Larsen. Thank you.
Thank you, Mr. Chairman.
Mr. Cummings. Thank you. As we let you go, the NSC 3, you
said something that just kind of ricocheted back into my mind.
Apparently, with the NSC 1 and NSC 2, the Coast Guard was not
satisfied with the Northrop Grumman design. Is that an accurate
statement?
Admiral Allen. Our engineers were not satisfied that the
design that was offered by Northrop Grumman would meet the
fatigue life of the vessel, sir, our engineers, and they
notified senior management in 2004 of their concerns, sir. The
decision was made to go ahead and proceed with construction
because of the implications for cost of stopping, redesigning
and starting again with the knowledge we would have to retrofit
whatever solution that was developed into hulls 1 and 2.
Mr. Cummings. Okay, now, let us put a pen in that and
rewind. What has been done to address those issues that you
just stated with regard to 1 and 2 because we are going to have
Coast Guard men and women on those ships? They are going to be
trying to do the things that you are mandated to do.
So just tell me what has been done to make sure that those,
1 and 2, are okay.
Admiral Allen. It starts with establishing the technical
baseline for the entire fleet with NSC 3 which will have the
changes to meet the fatigue life designed in.
The second step then is to go back and look at 1 and 2. As
you know, more work will have to be done to institute those
changes on 1 because it is over 70 percent complete. There may
be an opportunity to make those changes earlier as they sit in
the shop and other places with NSC 2 which is somewhere between
20 and 30 percent done at this time.
So the type of retrofit for both the first two hulls will
have to be depending on where those ships were at when the
baseline was established. That is the reason it is so
incredibly important to get the baseline established for NSC 3,
sir.
Mr. Cummings. So it is possible. It is possible--I didn't
say probable--possible that we could end up scrapping 1 and 2?
Admiral Allen. Not in the vaguest realm of my imagination,
sir.
Mr. Cummings. You see where I am going with this, right?
Admiral Allen. Yes, sir. I understand the issue with the
123s. The issue with fatigue life of the NSCs is different on
what is going to happen 15, 20 or 30 years from now, not what
is going to happen tomorrow. In fact, we are offered the
opportunity to do some forensics on the hull 1 that we have
never been able to do before, and that is to put strain gauges
on the ship--it has not been changed yet--and see who is right.
Mr. Cummings. Okay.
Admiral Allen. This is not an immediate safety problem,
sir. I would not put my people to sea in this ship if I thought
it was.
Mr. Cummings. Say that one more time.
Admiral Allen. I would not put my people to sea in this
ship if it was a safety problem.
Mr. Cummings. I take it that that was the same thinking,
what you just said--what you just said--with regard to 123s, in
other words, the last sentence or two that you just said. You
said I would not put my people on a ship that whatever you just
said.
Admiral Allen. That is the reason I laid them up, sir.
Mr. Cummings. Right. I just wanted to make sure we were on
the same page.
Admiral Allen. In my view, by the time we laid the 123s up,
it ceased to be a technology issue. It became a leadership
issue.
Mr. Cummings. Finally, with regard to that, how do we make
sure when we know that there is a disagreement?
We know it because you just said it, that there is a
disagreement with regard to the design of the NSC 3, the
proposed design, and what we have done with NSC 1 and 2. Do we
then put and are we now putting NSC 1 and 2--I guess I am just
trying to do some prevention stuff here--under a microscope
where we make sure that every single inch is right?
I think we are making great progress. I really do. I think
we are moving forward. The last thing we need is for one of
these NSCs to get out there and then we discover we have got
problems.
Admiral Allen. I don't believe that will happen. The issues
associated with fatigue life which could produce cracking based
on the repeated stress of wave action on the hull that is
repeated over a period of time and doesn't happen immediately
when the ship is launched.
Mr. Cummings. Right.
Admiral Allen. You have got to bend that paper clip quite a
few times before it finally breaks. We will be able to test the
strain on the hull with instrumentation at the same time we are
developing on how to retrofit those hulls. But we are not
talking about an immediate safety problem, sir.
Mr. Cummings. I understand, but I am also concerned. You
used some of my words in your opening. We are talking about a
future we will never see. You and I, hopefully, will be having
tea up in heaven, and we want to make sure these ships are
still doing okay.
Admiral Allen. Yes, sir. Well, I hope I am there with you.
[Laughter.]
Mr. Cummings. I guess I am being kind of presumptuous.
Admiral Allen. Sir, let me make a comment about Coast Guard
culture because I think this needs to be said. We rejected
technical solutions offered by Deepwater in the aviation
community because the aviation community would not stand for
it. We originally offered an extended-range Casa 235 and an AB-
139 helicopter, neither of which we are using in the aircraft
solution for Deepwater.
I would tell you that the technical competency mind set,
configuration control union, if you will, of our aviation
engineers held the line.
Mr. Cummings. Good.
Admiral Allen. I think the traditional notion of service
operators, and I am one. I have got a cutterman's pin. I am I
have been the commanding officer of a ship. We tend to be more
independent, less organized. I think there are a lot of issues
related to the two cultures that played into this, and I think
we are going to solve some of those by going to a standard
maintenance concept for the entire service, sir.
Mr. Cummings. Very well. Could you try to get us just a
general idea at some point of where you expect to be in the
next six months? I am not going to bring you back up here, but
I would like to have that so I can hold you to it.
Admiral Allen. Sir, I will come back as often as you want.
I will be glad to communicate. I suggest maybe, if you have
never seen acceptance trials, you might like to see that ship
underway, sir.
Mr. Cummings. I will. I will.
Any other comments, questions?
Admiral, we have the full confidence. The things that I
said down there in Pascagoula and down in Houston, I hope that
you make sure that your men and women know that we really mean
that. We are so very, very proud of them, and we want to do
everything we can to support them.
Admiral Allen. Yes, sir. Your hope has made it throughout
the Coast Guard, sir.
Mr. Cummings. Thank you very much.
Inspector General Skinner? Mr. Skinner, how are you?
Mr. Skinner. Fine, thank you.
Mr. Cummings. Thank you very much for being with us.
Mr. Skinner. It is my pleasure and thank you and good
afternoon, Mr. Chairman and Members of the Committee.
Today, I have with me, Rich Johnson who is our Project
Manager providing audit oversight for our Coast Guard
operations, and I am pleased to have Rich next to me to answer
any technical questions you may have about any of our work.
When I last appeared before this Subcommittee over three
months ago, I talked about our acquisition management concerns
associated with the Deepwater program and how they affected the
modernization of key Coast Guard assets and systems.
I would like to take this opportunity today to talk about
the Coast Guard's ongoing and future challenges in their
efforts to improve the management of this very important and
complex acquisition initiative.
We previously identified several problems in our audits of
assets and IT systems being acquired under the Deepwater
contract. These deficiencies contributed to schedule delays,
cost increases and assets designs that did not meet minimum
Deepwater performance specifications.
As you heard today from Admiral Allen, the Coast Guard
recognizes these challenges and, through its recently published
Blueprint for Acquisition Reform, is taking aggressive action
to strengthen program management and oversight. The Blueprint,
among other things, outlines the Coast Guard's plans for
reorganizing and rebuilding its acquisition workforce. We are
encouraged that the Coast Guard recognizes these challenges and
is beginning to take aggressive action to strengthen its
acquisition management capabilities.
However, many of these corrective measures will take time,
such as building a procurement workforce to manage the broad
scope and complexity of the program. There is considerable risk
associated with the Coast Guard assuming the lead systems
integrator role at this time before having fully implemented
its Blueprint for Acquisition Reform. If all goes as planned,
the Coast Guard's Blueprint will not be fully implemented until
fiscal year 2010.
In the meantime, this month, the Coast Guard is planning to
move ahead with the second phase of the Deepwater contract
which will entail the estimated expenditure of more than $3
billion over a 43 month period. We believe the Coast Guard
should exercise caution and take a slower or phased approach to
assuming the systems integrator role, taking advantage of all
the tools at its disposal to mitigate risk and to avoid future
problems.
At a minimum, the Coast Guard needs to develop a
performance baseline, that is, something against which they can
measure the progress being made to achieve the goals outlined
in the Blueprint. These include the specific numbers and types
of acquisition professionals needed, when they are scheduled to
arrive on board and the financial costs associated with the
realignment, reorganization, retraining and rebuilding of its
acquisition workforce.
We are also concerned that the Coast Guard may have
difficulty resolving the structural design and performance
issues associated with National Security Cutters 1 and 2. For
example, the Coast Guard stated that it plans to go ahead with
construction of cutter 3 before it determines the actual cost
of the structural modifications to cutters 1 and 2 as well as
cutters 3 through 8 and the impact these modifications will
have on its operational performance requirements.
Consequently, there is a possibility that the required
changes to all eight cutters could be cost-prohibitive or
result in a reduction in operational capability. The cost and
operational impact of structural modifications to all of the
cutters should be identified and evaluated fully before the
Coast Guard authorizes any future construction.
Finally, we continue to identify other issues that may
impact Deepwater costs and inhibit the Coast Guard's ability to
perform its mission. The Coast Guard's acquisition of a
vertical unmanned aerial vehicle is a case in point.
Originally, the Coast Guard intended the VUAV to significantly
increase the aerial surveillance of the National Security
Cutter from 13,800 square nautical miles to 58,000 square
nautical miles, a four-fold increase in surveillance
capability. Acquiring the VUAV was also a major reason why the
Coast Guard elected to build eight versus twelve cutters.
To date, the Coast Guard has obligated over $114 million to
the project with very little to show for it. It is not yet
clear exactly when the VUAV will come online and how the
Deepwater system of systems approach to acquisition will make
up for this lost capability.
Another concern that we have deals with the needed
modifications to the HH-65 helicopter fleet to enable the
helicopters to deploy and be stowed safely on the National
Security Cutter. The Coast Guard estimates that it could take
as long as 5 years and an estimated 55 million to install such
a system on the entire fleet. Again, this is an integral part
of the cutter's system of systems capability.
To date, however, no funding has been available for this
project. Consequently, the Coast Guard will be unable to fully
test the interoperability of the ship's systems with the HH-65
when National Security Cutter 1 undergoes builder sea trials
and operational tests that are scheduled to begin, as you
heard, early next year.
In conclusion, the Coast Guard is to be commended for the
steps it has taken to regain control of the Deepwater program
and the improvements it is making to its acquisition management
function. When fully implemented, these actions should mitigate
many of the cost, schedule and performance risks identified
with the Deepwater program.
Nevertheless, we must keep in mind that these changes are
in their infant stage. A lot can go wrong before they are fully
implemented. The Deepwater program will continue to require the
highest levels of planning, coordination and oversight to be
fully successful.
Mr. Chairman, Members, this concludes my remarks. I will be
happy to answer any questions.
Mr. Cummings. Thank you very much, Mr. Skinner, and I want
to thank you for your very thorough work. We really appreciate
it. You have been extremely, extremely helpful.
Let me ask you this. I think we all know the problem
generally. On the one hand, you have got the Coast Guard that
is trying to get this contract complete to get performance.
They are also coming under a lot of pressure from the Members
of Congress, and they need this equipment.
So we have got the ICGS. We see what the problems have been
with them. I guess what is happening is that the Coast Guard is
saying, okay, things didn't work out. So now we are going to do
it.
I am just trying to figure out, on the one hand, I think
almost all of us have concerns, the same concerns that you
have. Are they ready to do this, even in the time period?
As I listened to the Admiral and I didn't get a chance to
ask him. I didn't think of it until after he left actually. If
we are bringing on these military folks in particular and some
civilians and contractors, but I am more concerned about the
military and the civilians, to do this oversight of the
contracts, the question becomes, who are we bringing?
In other words, are those people going to be really
qualified to do this job or is there a steep learning curve?
You may not even have the answers to these questions.
But then on the other hand, on the other side of it, Mr.
Skinner, you have a situation where they are saying, well, we
just can't keep doing what we are doing because what we have
been doing doesn't work.
I think that is the problem. They are trying to say get
away from the ICGS because there has been embarrassment. There
have been problems and whatever. But then the question is
becoming, are they moving too fast into taking it over
themselves?
Is that a fair statement?
Mr. Skinner. That is correct. That is one of the concerns,
and that is one of the issues we have discussed with Admiral
Allen and his executive team. We agree that a transitional
period moving from the ICGS to the Coast Guard assuming the
integrator role is probably a wise decision. However, we need
to proceed with caution.
I think we are seeing what the Coast Guard is currently
doing. They are, in fact, proceeding with caution. For example,
the Admiral that they are bringing in the Navy to fill in some
gaps, operational gaps, management gaps.
They are using the integrator, the ICGS, that is, to
continue to work on those contracts that are currently in place
without giving them necessarily new contracts. Instead of
providing task orders, which they did in the past for five
years, in this case 43 months, they are providing them task
orders for 18 months so that they can better manage and control
how the ICGS continues to do the work that it now has
responsibility for or any future work that it may have
responsibility for.
But it is something that needs to be closely monitored. It
is something that requires the highest level of management
attention as we move forward.
Are we moving too fast, that is, are we tasking our
contractors to do more work than we are able or faster than our
ability to manage them? That is something that needs to be
taken into consideration every time they issue a tasking order
or a task order.
Mr. Cummings. Now, considering what you just said, what
would make you feel more comfortable?
I understand what you are saying is maybe we need to slow
down this process a little bit. Maybe we need to be a little
more careful. Do you see a role, let us say under ideal
circumstances, while making that transition? Do you see a
significant role for the ICGS team or would you have something
else in place to try to make sure that things still flow nicely
while we are building up within the Coast Guard?
Mr. Skinner. There is no question there is a continuing
role for the ICGS.
Mr. Cummings. What would that be?
Mr. Skinner. They have contracts, for example, outstanding
right now. In actually systems integration, for example, there
are things that they have been heavily involved in, and they
probably can do a better job at this point in time than anyone
in Government can do. We don't want to halt that work.
There are some successes under this Deepwater program.
Unfortunately, those get overshadowed by all the failures that
we have had. The systems integration work, for example, is
something they can continue to do. We just don't want to cut
them off, and there may be other work that they might be able
to do. I don't want to speculate what that could be or what
that would be or what they couldn't do.
But, nonetheless, each time there is a tasking, I think the
Coast Guard needs to be more intricately involved in the
decision-making as to whether we want to go sole source with
the ICGS or whether we want to look outside ICGS to procure
those assets, for example, the FRC B. I think they are going
outside the Deepwater program.
Mr. Cummings. Yes.
Mr. Skinner. I think that is probably a wise decision.
Mr. Cummings. Has the Coast Guard, to your knowledge,
experienced challenges recruiting and retaining qualified
acquisitions professionals?
Mr. Skinner. Like I said, this initiative in acquisition
management, this program, is in its infant stages. It is too
early to tell whether they are going to see challenges. If they
experience anything like what we have experienced in other
parts of the department, in CBP, for example, or in FEMA as
another example or, for that matter, Government-wide, they are
going to experience considerable problems in bringing the right
mix of expertise to the table that can do these jobs.
Mr. Cummings. Earlier, I talked about some problems that
have been experienced by the Coast Guard with regard to
Deepwater. It seems as if while we know that there have been
some successes, we also know that there have been a number of
things that have been touched in this process that simply have
not worked. I think that we as human beings expect that there
are going to be failures. That is part of life.
But when you see them over and over and over again, then
you have to begin to ask the question, is there something wrong
with the system or the systems? Is there something wrong with
the personnel? Is there something wrong with the leadership?
The question is with the Admiral having done all the things
that he has stated. I know his intentions are great. We believe
in him. Do we still have the elements of whatever caused us to
get to where we are? With the mistakes and the problems, are
they still present?
Does that make sense?
Mr. Skinner. Yes, it does. I think I understand where you
are going. If we don't continue to focus on the management of
this program--it is a 24, 25 year program--we can revert back
and start experiencing the same problems that we experienced in
the first 5 years.
A lot of it has to do with leadership and a commitment to
manage, and Admiral Allen, I believe, has made that commitment.
But like we all know, that is a four year appointment. That
commitment needs to be carried forward to ensure that the
resources are maintained to provide the oversight and the
management of this initiative or we could revert back to where
we were.
We are making progress. We are in an infant stage. There is
a long way to go before we can say that we have this Deepwater
program under control.
Mr. Cummings. You heard my questions of Admiral Allen, as a
matter of fact, my last set of questions with regard to NSC 1,
NSC 2 and then NSC 3. I was concerned because it sounds like
there are some issues with NSC 1 and 2.
Can you comment on some of the things that he said? I mean
the things they are doing, for example, to mitigate any
problems that there might be with NSC 1 and 2.
Mr. Skinner. Yes.
Mr. Cummings. And do you have concerns?
Mr. Skinner. We have concerns. Admiral Allen's comments, I
believe, were at the 30,000 foot level, and the devil is in the
details. Our concerns are, one, they say the Coast Guard has an
engineering solution to mitigate or to fix cutter 1 and cutter
2. Our concern is what impact is that going to have on your
operational performance capability and also how much is it
going to cost?
When I say operational capability because these ships are
going to have to be taken offline. They are going to have to be
taken offline for an extensive period of time somewhere down
the road, probably within their first four or five years. When
they start retrofitting these ships, they are not going to be
in operation.
We are only going to build eight of these cutters. We are
taking two offline in the first five years. That leaves us with
six, and that raises concern.
Mr. Cummings. Where do you get the five years from? Why do
you say five years?
Mr. Skinner. I believe it is our understanding that
generally a new ship that goes out to sea is usually brought
back in for maintenance and repairs and just to check to see
how it is operating at sea, and generally that is done in four
or five years. That may be a Navy standard.
Mr. Cummings. I got you.
Mr. Skinner. Somewhere along the way, someone within the
Coast Guard in their engineering area has told us that.
Mr. Cummings. Okay.
Mr. Skinner. It could be sooner.
Mr. Cummings. I understand, but you raised a very, very
significant issue.
When I was talking to Admiral Allen, as best I can
remember, he was talking about immediate safety problems, and
you are talking about not necessarily immediate safety problems
but definite problems. He, I think, was trying to distinguish
that with regard to long term fatigue. I think that is what he
was trying to do.
Mr. Skinner. Yes.
Mr. Cummings. So what you are saying, though, is that there
are concerns because they are going to bring them back in and
they are going to probably be in some kind of trouble. That is
going to take them offline, and then we are going to have to
start over again, at least do some serious work.
Then we are going to have another bill, by the way. Let us
not forget the bill where folks are going to make some decent
money and the American people are going to pay.
Is there something that you all would recommend different
than what he said?
Mr. Skinner. What we are suggesting is that I think the
Coast Guard needs to step back, analyze what the total costs
are associated with retrofitting 1 and 2 to ensure that they
meet the performance specifications and the costs associated
with the design changes to 3 through 8, plus look at the
operational limitations these design changes may or may not
have on their performance capability as well as the impact it
will have on their operational capabilities when 1 and 2 are
taken offline for extensive repairs somewhere down the road,
anywhere from 2 to 4 or 5 years. We have heard different
figures from different sources.
Once they are equipped with that knowledge, then they can
make an informed decision or have a business case as to whether
they want to proceed with the construction of 3 through 8 or
look for other alternatives.
Mr. Cummings. I will have some more questions.
Mr. LoBiondo?
Mr. LoBiondo. Thank you, Mr. Chairman.
Mr. Skinner, thank you for being here.
You asked some of the questions, Mr. Chairman, that I had
outlined.
Mr. Skinner, Admiral Allen has proposed and is in the
process of implementing significant modifications to the
Deepwater program which will establish the Coast Guard as the
lead system integrator and reassert the Coast Guard technical
authority over Deepwater projects and hopefully enhance the
Coast Guard's oversight over all facets of the program.
What, in your mind, are additional steps that the Coast
Guard can take to further improve its management and oversight
of the program?
Mr. Skinner. Incidentally, these things that you just
referred to are things that we recommended in prior audit
reports. Thank you for the question.
It goes beyond more than just reorganizing which is
something that we think they need to do, reasserting a
technical authority.
But there are things like they need to ensure that we have
third party certification of our designs as we move forward. We
should not be self-certifying. We should have third party or an
independent.
Mr. LoBiondo. Excuse me. What would an example be?
Mr. Skinner. You can go to Carderock, for example. There is
the private sector as well that can provide such certification
but Carderock for dealing with the ships, the national cutters
and any others that we may be bringing in that are state of the
art, first line cutters in the out years.
There is the self-certification, technical authority. The
acquisition reorganization, of course, is something that we
talked about.
There is also the contract itself needs to be rewritten to
ensure that the Coast Guard. Now I understand these are the
things that were told, that these are the things that are going
to be written into the new contract or the Phase 2 contract for
the 43 month contract that we referenced earlier that will give
the Coast Guard additional authority, that will clearly define
what we expect. We can do a better job of defining our
specifications and ensuring that the contractor in fact meets
the performance requirements.
There is a whole series of things that goes along with just
the reorganization. It is the management of the contracts. It
is the way the contract is written. It is the definition, the
specificity that we have in our taskings so that when we to
back, we can say this is not what we asked for.
We found ourselves in trouble with the 123 retrofits
because we were not that specific. When we went back and said
this is not what we ordered and we looked at the requirements
of the contract, it was so vague. We couldn't hold the
contractor accountable.
Mr. LoBiondo. What do you see as the risks associated for
the Coast Guard with taking on the role of lead system
integrator in the middle of the 25 year acquisition process?
Mr. Skinner. It is highly risky, and that is why we suggest
that they take a deep breath and they proceed with caution and
they do it in a very phased approach. This is something that I
believe Admiral Allen and the Coast Guard recognize that it can
be very risky if they move too quickly.
They are now using. They are not just going to eliminate
the ICGS. They are going to phase them out over time, and in
the interim they are also going to rely very heavily on
resources from the Navy, for example, to fill any gaps in
management or oversight, give them the oversight capability of
any new taskings that may be coming down the road.
But if we don't do it in a very phased, cautious manner, we
could get in trouble. It is too early now to predict whether we
are moving too fast. Our assessment right now is that we are in
fact moving in a very cautious manner.
Mr. LoBiondo. How do you see the potential liability for
costs associated with delays, modifications and potential asset
failure to be shared between the parties under the new
arrangement?
Mr. Skinner. It is very important that the Government
clearly defines what it is asking for. If we clearly define
what we are asking for and before we take delivery of any
products, we obtain expert certification that this is what we
were asking for, then I believe that the contractor has 100
percent responsibility to give us that. If they don't, they
need to be held liable.
Our biggest problem now is or has been that we don't
clearly define what we are asking for, up-front, before we
issue the tasking or at the time we issue the task order. So,
therefore, when delivery is made, we are not in a position to
hold the contractor accountable.
Mr. LoBiondo. Mr. Chairman, do I have time for a couple
more questions.
Mr. Cummings. Please.
Mr. LoBiondo. Mr. Skinner, the Coast Guard obviously is in
the process of significantly increasing its acquisition and
contracting staff to carry out the increased responsibilities
associated with the assumption of the lead system integrator
role. What do you think about the Coast Guard having the
resources necessary to carry out this buildup without
negatively impacting other acquisitions and operations?
Mr. Skinner. I don't think it should impact. For one thing,
under the reorganization, acquisition is going to be under one
directorate. That is one thing.
Secondly, this buildup should not have an impact on any
other of their acquisition functions. If anything, it would
complement any other acquisition activities they may have
ongoing outside of Deepwater. But I wouldn't see that having
any type of negative impact.
Our concern is you are not going to be able to build up
that capability easily. It is not just a matter of hiring
people. It is a matter of hiring the right mix of people,
getting them, training them and retaining them.
Mr. LoBiondo. That leads to my next question. What do you
think about the Coast Guard's ability to attract and retain the
tremendously qualified acquisition and contracting personnel
that Deepwater requires?
Mr. Skinner. It is going to be very, very difficult. We are
experiencing these problems in other parts of the Department of
Homeland Security, most notably in CBP, Customs Border and
Patrol, and within FEMA. It is going to be a difficult task.
We are competing not only with ourselves in the Department,
but we are also competing with other Federal agencies which
also are strapped and are short of acquisitions types, and we
are also competing with the private sector. It is not going to
be an easy task.
Mr. LoBiondo. Having the continuum of information and
background is going to be critical along with the expertise,
isn't it?
Mr. Skinner. Yes. You can bring in contracting officers
that have contracting experience but not necessarily the type
of Coast Guard-related experience, but nonetheless that
expertise is invaluable as well. You need people to come in
that have not necessarily Coast Guard experience but naval
military or the type of acquisition experience associated with
buying, retrofitting or building ships, airplanes, things that
are necessary to modernize the Coast Guard's fleet.
The IT area is another area that is going to be very
challenging as well, there primarily because of the competition
we have with the private sector, we in the Federal Government,
that is. You don't necessarily have to come through the ranks
of the Coast Guard to have an appreciation for systems
communications and things of that nature. Those things can be
learned on the job.
Mr. LoBiondo. Mr. Chairman, it seems to me that is real
critical point. I am not sure if Admiral Allen addressed that.
I might respectfully request that you consider asking him about
not only attracting the top-flight people that are necessary
but the plan to keep them on board so that while the best laid
plans are there, if we have gaps in service, we could
experience further problems.
Mr. Skinner, thank you very much.
Mr. Chairman, thank you.
Mr. Cummings. Thank you. I will do that.
I am going to go back to what I started with because we
have got a little bit of a dilemma here, I think, and I want
some clarity.
On the one hand, we have a team that has been in place
doing this, that the results of their efforts have not been
stellar. Is that a fair statement?
Mr. Skinner. Yes.
Mr. Cummings. On the other hand, we are trying to get to a
place where the Coast Guard can do the work of the integrator
team. Is that a fair statement?
Mr. Skinner. Yes.
Mr. Cummings. This is a piece that I found interesting, and
I don't know whether you find it interesting or not. We just
heard the Admiral provide testimony about rescinding the 123s
and to my knowledge--to my knowledge--nobody has ever told me
anything different. We scrapped I guess more than about $100
million worth? How much was that?
The scrapping process, how much did we scrap? Do you know
what that was worth?
Mr. Skinner. No, I don't.
Mr. Cummings. Okay, well, millions, tens of millions.
Mr. Skinner. Yes.
Mr. Cummings. Do you know whether anybody in the present
team was fired or demoted, the present team?
Mr. Skinner. Not that I am aware of. We have to understand
when we talk about the present team and the performance was not
stellar, we have to understand that oft times their hands were
tied because of the terms and conditions on the contract under
which they were operating which left the ICGS, giving them
ultimate authority to make final decisions as to go, no go.
Mr. Cummings. I got you.
Mr. Skinner. And so, it is not the people within the Coast
Guard per se. Matter of fact, there were some very good people
who came forward and complained to us about this which brought
it to our attention, some of the problems.
Mr. Cummings. Is it a good idea to leave things as they are
then or as they have been?
Mr. Skinner. No, no.
Mr. Cummings. Why do you say that?
Mr. Skinner. The Coast Guard needs to assume control over
the program. As I testified, I believe three or four months
ago, they were content to ride shotgun and turn over the reins
to the integrator, allowing them to define what your
requirements are and to deliver, make the ultimate decisions as
to what we are going to deliver, when we are going to deliver
it, how much it is going to cost and who is going to deliver it
to you.
The Coast Guard just relied too heavily on the integrator
to make its decisions for them, and that is where we need to
turn the pendulum. The Coast Guard needs to get more actively
engaged in making those decisions.
Mr. Cummings. Right now, because that is what we have got
to deal with, we are trying to figure out where we are going to
be, where we are proceeding in the next year. What do you see
as being the role of the integrator team once again?
See, it sounds like you are saying on the one hand. I don't
what to misunderstand you.
On the one hand, the Coast Guard needs to slow down. On the
other hand, we have got the integrator team over here saying,
okay, I am just hypothetically saying, well, things may not
have gone right, but we will stay in the ball game, coach.
I am just trying to figure out what role would they be
playing while we are slowly proceeding and carefully proceeding
to take over, that is, the Coast Guard take over?
Mr. Skinner. Yes, and there is where the devil is in the
details. We have an acquisition blueprint, the Blueprint for
Acquisition Reform. That is a strategic plan. We need, you need
detail. The Coast Guard needs detail.
Now, it is my understanding, and I think Admiral Allen did
allude to it at the end of his testimony, that they are
developing an operational performance baseline plan which will
set forth: these are the things we intend to do. These are the
people that are going to do it. These are the things that are
going to remain with ICGS, for example, some of its IT
capabilities or the NSC capabilities. These are the things that
we are going to take outside of the Deepwater, and these are
the things we are going to keep in Deepwater but we are going
to do ourselves.
We don't have that right now.
Mr. Cummings. I guess it sounds like this 18 month proposal
as opposed to 43 months that the Admiral talked about, is that
a good idea in that it gives you a shorter assessment time?
In other words, you see how things go, how we are doing.
Then you go back and say, okay, this is what we do. Instead of
waiting 43 months which is about, what, three times the time?
Mr. Skinner. Yes. The first time I heard about the 18 month
thing was today, and I think that is an excellent idea because
that gives the Coast Guard an exit ramp or an exit clause to
say, we don't like where you are headed here, and so therefore
we are just going to sever this particular. We are just going
to take away from you, this particular tasking.
It is somewhat modeled after what we are doing in the
SPINET program. Instead of entering into a three to five year
contract, we are doing this in a very incremental basis and a
phased approach. And so, at any point in time, in a short
period of time, if we don't like the progress we are making,
you can pull out without penalty.
Mr. Cummings. Based upon what you just said--I guess this
might be difficult to answer--do you have any idea when the
Coast Guard might be ready to take over as the full integrator?
Mr. Skinner. It would only be speculation.
Mr. Cummings. Yes.
Mr. Skinner. It is going to some time. I don't think it is
anything. It is going to happen in the next two to three years
because they are going through a major reorganization. It is
also a cultural shock for many people in the Coast Guard.
It is not the numbers so much that we are concerned about.
It is the mix of expertise that you have to ensure continuity,
to ensure continuity on the integrated project teams. You don't
want people coming in and out every two years. You want people,
civilians that are in there that can lend continuity to this
whole thing, and it is going to take time, two to three years
at a minimum.
Mr. Cummings. Let me say this, and then I am finished. One
of the things I think that has concerned me over and over
again, and I said it in my opening statement, is as far as I am
concerned this is the greatest country in the world.
I tell you when I went to see the 123s. I am not a ship
guy, but when I went to see them and I saw the buckling and
whatever, I have seen yachts that were bigger. I said to
myself, how in the world couldn't we get this right? We send
people to the moon.
Then today when I listened to the Admiral, I must admit
that I had some flashbacks because I thought about the NSC 1
and NSC 2, and really not under our watch do I want to see us
go backwards. Under our watch, I want to see us go forward.
That is why your testimony and the work of your staff, and
I hope you will convey this to them, has been incredible. So
often, our public servants do not get their due, but I really
mean it. You all have been working with our staff. You have
been absolutely great, and I just want you to know.
Again, I know there are people working behind the scenes
that we never see. I know that.
Mr. Skinner. Yes, and one of them is sitting next to me at
the moment.
Mr. Cummings. Mr. Johnson, thank you very much and your
team back there. The reason why I say that is because we
couldn't have done a number of things that we have been able to
do without you.
We are going to stay on top of this, and I am trying to
stay away from a political thing because I think it is so much
bigger than that. This is about our national security.
I am very pleased. Mr. LoBiondo cannot imagine. I know he
chaired this Committee, and his support and both sides have
been great because I think we are all looking at the big
picture, and I think everybody is trying to be fair across the
board.
But, in the end, we want to make sure that the Coast Guard
has what it needs to do the job and that our personnel are safe
on these vessels and these planes and these helicopters.
Mr. LoBiondo, did you have anything?
Mr. LoBiondo. No, thank you, Mr. Chairman.
Mr. Skinner and Mr. Johnson, thank you.
Mr. Cummings. Thank you very much. That ends this hearing.
Mr. Skinner. You are welcome.
[Whereupon, at 1:14 p.m., the Subcommittee was adjourned.]
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