[Congressional Record (Bound Edition), Volume 150 (2004), Part 5]
[Senate]
[Pages 5736-5737]
[From the U.S. Government Publishing Office, www.gpo.gov]




          COAST GUARD AND MARITIME TRANSPORTATION ACT OF 2003

  Mr. ALEXANDER. Mr. President, on behalf of the leader, I ask 
unanimous consent that the Commerce Committee be discharged from 
further consideration of H.R. 2443 and the Senate proceed to its 
immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (H.R. 2443) to authorize appropriations for the 
     Coast Guard for fiscal year 2004, to amend various laws 
     administered by the Coast Guard, and for other purposes.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. McCAIN. Mr. President, I am pleased that the Senate has favorably 
considered the Coast Guard Authorization Act of 2003, and will pass by 
unanimous consent the Senate manager's amendment to H.R. 2443. We look 
forward to working with the House to quickly reach agreement on a final 
bill for passage in both houses.
  Senator Hollings and I have agreed to work with the House through a 
balanced, bipartisan conference committee. The Senate members would 
include five majority and four minority members of the Commerce, 
Science, and Transportation Committee. We plan to work together in a 
bipartisan manner to support the provisions of the Senate bill, while 
working with the House conference members to reach a final bill 
acceptable to all conferees. We will also include one majority and one 
minority member of the Environment and Public Works Committee to work 
with us on provisions in the bill that amend the Oil Pollution Act of 
1990.
  Mr. HOLLINGS. Mr. President, I am likewise pleased that the Senate 
will pass this important authorization bill for the Coast Guard. I look 
forward to working with Senator McCain and the other members of the 
conference committee to reach a final consensus bill that we can adopt 
in both houses.
  The Coast Guard has always taken on an impressive array of tasks that 
are important for our security, for the protection of our resources, 
and for the safety of our mariners. After the tragic events of 
September 11, 2001, we have asked the Coast Guard to take on even more 
in the area of maritime security, while asking them to continue to 
carry out their traditional missions as effectively as before.
  This legislation provides authorizations for Coast Guard's Fiscal 
Year 2004 and Fiscal Year 2005 budgets, and also includes important new 
authority for the Coast Guard to better carry out its missions. While 
the President's budget request for these two years provided some 
increases, it was still far from adequate to ensure that the Coast 
Guard will be able to carry out all that we demand of it.
  Thus, I am particularly pleased that I had the support of the 
Committee on Commerce, Science, and Transportation in adding to the 
Fiscal Year 2004 authorization $491 million in authorizations not 
requested by the President. For Fiscal Year 2004, the bill authorizes 
approximately $7.032 billion. This is a 15-percent increase for the 
Coast Guard's budget over what Congress appropriated last year, and 
about 5 percent above the President's request for fiscal year 2004. The 
bill includes authorizations of $246 million in Fiscal Year 2004 for 
port security not requested by the President, including $100 million 
for operating expenses, to cover the increases in operating tempo that 
the Coast Guard has experienced over the past few years, $70 million 
for analyzing port security plans, and $36 million for three additional 
Marine Safety and Security Teams. These additional amounts are 
essential to the security of our ports and waterways, and of our 
maritime transportation industry.
  For Fiscal Year 2005, the bill authorizes approximately $7.787 
billion, a 10-percent increase over Fiscal Year 2004 authorized and 
enacted levels, including for port security operations. This is $327 
million greater than the President proposed, over 4 percent higher than 
the President's request.
  I have also been a firm supporter of the need to provide the Coast 
Guard with the tools it needs to get the job done. The Coast Guard 
needs to upgrade its core assets, in particular, its aging fleet of 
cutters. The Integrated Deepwater Program is the Coast Guard's program 
for achieving these upgrades, and the President has not requested 
sufficient funding in its budgets to even keep this program on its 
original track. I therefore strongly support the inclusion of an 
authorization of $702 million for this program in Fiscal Year 2004, 
which is $202 million above the President's budget request, and $708 
million in Fiscal Year 2005, or $30 million over the President's 
request. These increases will allow the program to get back on its 
original schedule.
  At the same time, I have significant concerns with respect to how 
well the Coast Guard is managing this procurement, and whether the 
unique method for procurement utilized by the Deepwater Program will be 
able to achieve the stated goals of minimizing costs and providing 
operational effectiveness. The Deepwater project is the single largest 
procurement program that the Coast Guard has managed to date. The 
Senate has voiced concerns about this program on numerous occasions 
over the past few years. A GAO analysis of the Deepwater project 
published in May 2001 entitled ``Coast Guard: Progress Being Made on 
Deepwater Project, but Risks Remain'' highlighted risks with the 
project, including concerns with the Coast Guard's ability to control 
costs by ensuring competition among subcontractors, and the Coast 
Guard's ability to effectively manage and oversee the acquisition phase 
of the project. GAO has identified the Deepwater Program as a ``high 
risk'' procurement.
  GAO recently produced a new report on this subject, entitled ``Coast 
Guard's Deepwater Program Needs increased Attention to Management and 
Contractor Oversight.'' The report's major conclusions indicate that 
there is a need for significant improvement of the program and its 
oversight by the Coast Guard. First, GAO found that over a year and a 
half into the Deepwater program, the Coast Guard has not put into place 
the key components needed to provide adequate oversight of the prime 
contractor. For example, the Coast Guard had not even agreed on 
specific criteria to measure the contractor's performance, yet awarded 
the contractor nearly the total amount possible as a bonus for the 
first year of the contract.
  Second, GAO found that there is no clear, transparent and predictable 
opportunity for competition of the subcontracts under the Deepwater 
program. While the prime contractor uses the ``open business model'' to 
decide whether to ``make or buy'' Deepwater assets, this guidance is a 
philosophy--not a formal process with clear criteria and specific 
decision points--that encourages, but does not require competition. In 
fact, over 40 percent of the funds obligated to the first-tier 
subcontractors, Lockheed Martin and Northrop Grumman, have either 
remained with those companies or been awarded to their subsidiaries.

[[Page 5737]]

  Perhaps most disturbing, according to Deepwater officials within the 
Coast Guard, it is unrealistic to believe that the Coast Guard would 
change contractors after the first five years of the program. Thus, 
there is little incentive for the prime contractor to achieve the 
performance goal of minimizing total ownership costs. This obviously 
could have serious implications for the American taxpayer.
  I have also long been concerned that the Deepwater Program meets not 
only the letter but the spirit of our Buy America laws. A number of the 
subcontractors that have either received awards under the Deepwater 
Program, and/or are included in the contractor's proposal, make all or 
most of their parts overseas. Buy America was intended to ensure that 
the U.S. Federal government, including the U.S. military, did not 
contribute to the loss of American manufacturing jobs, yet here we have 
a major acquisition program for our 5th branch of the military, the 
U.S. Coast Guard, that appears to be doing just that.
  As a result of concerns about the program, the Commerce Committee 
included in S. 733, as reported, a requirement that the Coast Guard 
provide a report to Congress which would include an analysis of the 
prime contractor's performance in meeting the two key goals of 
providing operational effectiveness and minimizing total ownership 
costs. However, based on this latest GAO report, and the need to ensure 
that Buy America is fully implemented, additional Congressional 
oversight of this major procurement is clearly warranted. Unless there 
are significant changes to the way business is conducted on this 
contract, there will be enormous problems in the future that may, in 
the long run, undermine this program.
  Mr. ALEXANDER. Mr. President, I ask unanimous consent that the McCain 
amendment at the desk be agreed to, the bill, as amended, be read for a 
third time and passed, the title amendment be agreed to, and the motion 
to reconsider be laid upon the table en bloc.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2954) was agreed to.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  The amendment (No. 2955) was agreed to, as follows:

       Amend the title so as to read A Bill To authorize 
     appropriations for fiscal years 2004 and 2005 for the United 
     States Coast Guard, and for other purposes.

  The bill (H.R. 2443), as amended, was read the third time and passed.
  Mr. ALEXANDER. I further ask that the Senate insist upon its 
amendments, request a conference with the House on the disagreeing 
votes of the two Houses, and that the Chair be authorized to appoint 
conferees at a ratio of 5-4 on the Commerce Committee and 1-1 on the 
Committee on Environment and Public Works.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Presiding officer (Mr. Talent) appointed Mr. McCain, Mr. Stevens, 
Mr. Lott, Mrs. Hutchison, Ms. Snowe, Mr. Hollings, Mr. Inouye, Mr. 
Breaux, and Mr. Wyden; from the Committee on Environment and Public 
Works, Mr. Inhofe and Mr. Jeffords, conferees on the part of the 
Senate.

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