Coast Guard extends fleet upgrade contract

The Coast Guard has announced that an embattled industry team will be allowed to continue doing work on its fleet modernization program for up to 43 more months, but a key House lawmaker declared Tuesday the move has "no relevance" because legislation is moving through Congress to restructure the program.

The Coast Guard announced Monday that it was renewing contract work with Integrated Coast Guard Systems for as long as 43 more months.

The joint venture between Lockheed Martin Maritime Systems & Sensors of Moorestown, N.J., and Northrop Grumman Ship Systems of Pascagoula, Miss., was given an initial five-year contract in 2002 to be the lead systems integrator for the Coast Guard's $24 billion Deepwater fleet modernization.

That pact effectively handed primary management of the complex development and procurement program to the private sector, a practice that has had widespread appeal among the armed services but is not without its drawbacks.

The decision to keep the industry team on board took some by surprise, as government investigators have documented major problems with its work on Deepwater so far. Even the Coast Guard has already taken away some of the team's responsibilities.

House Transportation and Infrastructure Coast Guard Subcommittee Chairman Elijah Cummings, D-Md., told CongressDaily Tuesday he does not believe the industry team will serve out the duration of its new contract.

"That 43 months is a little bit like an umbrella," Cummings said. "Just because it's for 43 months doesn't guarantee work."

He added that his subcommittee is "doing everything in our power to remove the integrated team" as the lead systems integrator of the program.

The subcommittee marked up a bill Tuesday that would prohibit the Coast Guard from using a private sector lead systems integrator either by October 2011 or earlier if the Homeland Security Department certifies that doing so is possible. It was the latest move in Congress this year to wrest control of some of the most expensive federal programs from major contractors.

Cummings said he originally wanted to remove the industry team within two years, but agreed to the four-year schedule in order to give the Coast Guard time to make the transition.

The bill, which will be marked up by the full Transportation and Infrastructure Committee Thursday, also requires the Coast Guard to use full and open competition in making Deepwater contract awards; get independent certification of assets procured through the program; and appoint a civilian chief acquisitions officer.

"We find ourselves in a crisis situation and it demands a crisis solution," Cummings said.

The legislation resembles House Armed Services Committee language in the fiscal 2008 defense authorization bill that would bar the Defense Department from issuing any new contracts to private-sector lead system integrators to manage and supervise major weapons programs after Oct. 1, 2011.

Armed Services lawmakers chose that effective date to give the Pentagon four years to hire and train new acquisition managers to run its massive programs, reversing a decade-long trend that has seen cuts to in-house acquisition staff and the outsourcing of many development and procurement responsibilities.

According to a Coast Guard spokesman, the industry team technically remains the Deepwater program's lead systems integrator under the new contact.

But in response to congressional pressure to restructure the program, the Coast Guard intends to eventually remove the team from that role, even if Cummings' legislation is not enacted into law.

"There will be more oversight and more control," the spokesman said. "Right now they're going to get task orders for X numbers of dollars. But we're going to exercise more control."

He also said the Coast Guard will review the industry team's work in 18 months. If the work is competent, the industry team will likely continue getting task orders. If the work is shoddy, no new task orders will be awarded, the Coast Guard spokesman said.

In addition, the Coast Guard will create a new acquisitions unit next month in anticipation of taking over the day-to-day management of the program, the spokesman said.

The House subcommittee also marked up another bill Tuesday that would authorize $8.3 billion in funding for the Coast Guard for fiscal 2008. Of that, about $840 million is for Deepwater. That bill, too, will be marked up by the full committee Thursday.

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