But without reliable funding, Deepwater program may run aground
On a bright spring day, the gleaming 87-foot Albacore leaves the Washington, D.C., waterfront for a short cruise on the murky Potomac River.
Aboard the cutter, one of the Coast Guard's premier patrol boats, are eight sailors (soon to be 10) and an array of high-tech gadgetry — from a Global Positioning System-based charting tool to a $5,000 toilet with a microchip that enables it to be unclogged using software.
"It's the most capable boat the Coast Guard has come up with," said Lt. Pete Niles, the Albacore's commanding officer. The Albacore's high-tech features include:
* An electronic charting display — known as the "quartermaster in a box" — that combines satellite-positioning data with digital maps of the world. Niles can overlay that information with radar data showing other vessels, tide conditions and sea currents.
* Autopilot, which helps the commander keep an eye on his crew-in-training.
* Digital controls, new radars, cellular phones, a Globalstar satellite telephone and a Digital Selective Calling radio, which takes the search out of search and rescue by automatically transmitting position information with distress calls.
"Everything's at my fingertips," said Niles, who took command of the 2-year-old Albacore after serving on a 58-year-old buoy tender.
And coastal cutters like the Albacore are just the beginning. After decades of neglect, the Coast Guard is set for a sweeping modernization of its Deepwater fleet, which patrols at least 50 miles from shore. After three years of preparation, Coast Guard officials plan to solicit proposals from three systems integrators for an Integrated Deepwater System under the Deepwater Capability Replacement Program, potentially worth $10 billion. The competitors will be Northrop Grumman Corp.'s Litton Avondale Industries, Science Applications International Corp. and Lockheed Martin Corp. Coast Guard officials plan to award a contract next March to one integrator for the first five years of the program.
If it survives final scrutiny this summer, the Deepwater program would replace 90 ships, 200 aircraft and all the sensors that connect them. If Rear Adm. Patrick Stillman, the program executive officer for Deepwater, has his way, the program will revolutionize the way the men and women of the Coast Guard do their jobs.
But critics say the project could entangle the Coast Guard in a decades-long fight if performance or schedule problems develop with the contractor. Even worse, the Coast Guard will need $350 million to $525 million a year for at least 20 years to complete the project, and congressional appropriators fear they won't be able to supply the money.
"One of these days, budget pressure is going to come. How do we ensure that we don't create a monster that will eat us alive?" asked Hal Rogers (R-Ky.), chairman of the House Appropriations Committee's Transportation Subcommittee, at a recent hearing on the Coast Guard's budget. Coast Guard officials requested $338 million for Deepwater in fiscal 2002.
But Stillman, a nearly 30-year veteran of the Coast Guard, insists the acquisition program scheduled to launch this month — the largest in the Coast Guard's history — is the best course for the future.
"I find it amazing that people say the Coast Guard is throwing the keys over the transom and giving the future to industry. We could not do this alone," Stillman said. "We have a lot to gain from a constructive partnership with the private sector."
Coast Guard officials have already built in checks and balances to ensure that the agency remains in control of the program, Stillman said. Indeed, the Coast Guard is known for its outcomes-based management, and its annual performance reports have met with stellar reviews.
"The true differential is this is a performance-based acquisition that is measuring operational effectiveness," Stillman said. "It truly is the next Coast Guard in the offshore arena. We have 207 years of legacy tied to that solution, and we're determined to get it right."
Throughout the contract, Coast Guard managers will interact with vendors using a process they have developed during the last three years, he said. And the Coast Guard will always reserve the right to reject a proposal that is not feasible.
Coast Guard officials have established mission-based objectives that the vendors' solutions must meet, such as improving the percentage of illegal drugs the agency intercepts each year, said Jay Dragone, director of Coast Guard programs for Lockheed Martin and leader of the company's Deepwater bid.
Mission-based requirements work well because they give officials the flexibility to find the most cost-effective way to meet the service's goals. If funding is lower than expected one year, for example, the contract allows Coast Guard officials to work with the vendor to determine which purchases to defer without having to renegotiate the whole contract.
"The challenge for the industry teams is to come up with a way to increase mission effectiveness and do it for less money than it cost to maintain them before," Dragone said. "It really comes down to an improved command and control system implementing more technology."
Deepwater program officials also developed an operational simulation tool they can use to test the effectiveness of the winning vendor's proposed systems, said Kenneth Gorter, head of the Coast Guard's Deepwater contracting division. Similar to the process they will use to select the winner, Coast Guard officials can track the total ownership cost against the contractor's claims, he said.
The Coast Guard's single-integrator strategy is based on numerous studies and collaboration with industry, said James Barton, corporate vice president for maritime programs at SAIC. The approach of using technology and integration to achieve maximum system performance for a minimal cost sets a strong model for other federal agencies to structure future acquisitions this way, he added.
"The Coast Guard really has done a good job of putting together the structure," Barton said. "The big issue is whether the fiscal 2002 dollars will be approved, which provides for the kickoff of this program."
But funding beyond 2002 is also important to the project's success, Stillman said. "I do think the Coast Guard is [right] to emphasize stable funding over a long period of time to truly build out a system. For the same reason you're required to make a monthly mortgage payment, we have to collectively reconcile whether we'll do this for the Coast Guard."
Deepwater is widely recognized as a necessary undertaking, but lawmakers are uncertain if they can provide the money required, particularly because the system's budget exceeds Office of Management and Budget targets by $500 million for the first five years.
"I see some tight dollars up ahead for discretionary funds," said Rep. Martin Olav Sabo (D-Minn.), ranking member of the Transportation Subcommittee. "I'm not sure we can look at 6 percent growth figures each year."
A funding shortfall down the road could turn Deepwater into a piecemeal purchase, "which is what got them in this situation in the first place," said Phillip Thompson, a senior fellow at the Lexington Institute, a nonprofit public policy foundation in Arlington, Va. Also, replacing assets piecemeal would cost the Coast Guard more because multiple platforms would not be integrated, Stillman said.
"We just don't have that ability," he said. "It's very frustrating when you don't have the spare parts available to fix systems. It's also very frustrating when you don't have the sensors or reconnaissance capabilities to respond to a threat."
Creating an integrated system with multiple platforms has not been attempted in the past, according to Gorter. "We have platforms that don't talk to each other really well," he said.
Thompson said that some helicopters are unable to carry the full suite of sensors needed for search-and- rescue missions because of payload limitations. In some cases, the Coast Guard has trouble receiving distress calls from commercial container ships because the commercial ships have more advanced sensors.
It is common to have 40-year-old cutters working with relatively new helicopters, Thompson said.
"There's a mishmash of equipment that usually works together but doesn't always work productively," Thompson said. "This is not the first time the Coast Guard has faced the dilemma they're in today. During Prohibition, they went through a period where the people they were facing on the high seas were better equipped and better funded than they were."
Seven of the Coast Guard's nine classes of Deepwater ships and aircraft will reach the end of their planned service life in the next 15 years. The Coast Guard's Deepwater fleet of high- and medium-endurance cutters is older than 37 of the world's 39 similar naval fleets.
With the new Deepwater initiative, the Coast Guard hopes to bring the fleet up-to-date and encourage its customers — commercial and private boat operators — to invest in new technology as well, Stillman said.
The linchpin of Deepwater, Thompson said, is communications equipment. Coast Guard crews must be able to talk to one another and to the Navy, he said.
That could take a while. Stillman and Gorter expect the vendors to propose open systems, with assets acquired in increments, and a conservative approach that allows the greatest flexibility if funding fluctuates. The Coast Guard will not spend money to build systems that have not already been developed, Stillman said, because that would be too expensive and risky.
Funding constraints are a way of life for the government, said Woody Oge, vice president of government and commercial programs at Litton Avondale Industries.
"We need to do the best job we can in industry to reinvent the Coast Guard within those funding limits," he said. "There's a delicate balance to be looked at between the aging assets the Coast Guard has with the introduction of new assets."
All the technology the Coast Guard needs to do its job is not available today, Oge said. But Deepwater provides an opportunity to continually phase in new technol.ogy during the next 20 years without the Coast Guard doing its own research and development.
Gorter expects some changes — such as upgrades to hardware and legacy systems — will take place immediately after the contract is awarded. Some communications, navigation, computer and surveillance system upgrades will also be made early on, but the Coast Guard will leave room for new technology that matures as the program progresses, he said.
Meanwhile, cutters like the Albacore are slowly entering the fleet, allowing smaller crews to perform more efficiently.
A few miles from the Washington harbor, the Albacore gets a radio call that there is a man in the water who has already donned an orange survival suit. For this training exercise, the men and women spring into action, using a new stern- launching system to send a small rescue boat to the scene.
An electronic display keeps Niles fully aware of the events taking place outside his boat. But every few minutes, he glances out the back door of the navigation bridge.
"Even with all the technology, I still have to keep a live watch," Niles said. "We're trying to teach the technology to work for us."
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