Coast Guard uses new model to procure new fleet

By Sydney J. Freedberg Jr.

April 24, 2000

When something falls apart, the traditional American approach is to buy a new one-bigger, better, and more expensive. But times, and needs, can change. Just as proud new parents trade in their rusted VW Beetles for minivans, and college graduates doff tattered blue jeans to don dark suits, the U.S. Coast Guard wants to replace $10 billion worth of aging ships and aircraft with more than just more of the same.

Instead of a one-for-one replacement of old models, the service's objective is a clean-slate force that takes full advantage of modern information technology. The Coast Guard has given three competing private-sector teams unprecedented freedom to design not just a single new vessel or vehicle, but an entire system of ships, small boats, aircraft, and even satellites and robotic "unmanned aerial vehicles." All units would be electronically linked to operate together at distances more than 50 nautical miles from shore. The Coast Guard calls this master plan the Integrated Deepwater System.

If this ambitious approach succeeds, the Coast Guard will have a high-tech, high-efficiency force; the winning contractors will have a new product to sell the Pentagon and foreign navies; and the Defense Department will have a new model of how to buy equipment. If Deepwater fails, its name describes precisely what the Coast Guard will be in.

Necessity is the mother of the Coast Guard's inventiveness. Replacing its entire inventory as a package was forced on the Coast Guard because it's all falling apart at once. Although Congress's budget watchdog, the General Accounting Office, has softened the Coast Guard's earliest and most dire estimates, the fact remains that most of its cutters are more than 30 years old, and the service expects to have to retire ships wholesale during the next decade.

The existing fleet is not only old, it is mismatched to current missions. Designed in the 1960s and 1970s, before the advent of the "war on drugs," most cutters are simply too slow. The Coast Guard has 12 Hamilton-class cutters that can sprint, at great cost in fuel, at nearly 30 knots, but the other 31 deepwater cutters cannot top 20 knots-compared with 30 to 60 knots for a smuggler's speedboat. "They're just so much faster, we haven't been able to catch them even if we've seen them," said Lt. Andrew McGurer, a former drug patrol officer now working on Deepwater.

And seeing them can be a shot in the dark. "Our ships are basically blind, deaf, and dumb," said Capt. Richard Kelly, the Coast Guard's chief of requirements for Deepwater, commenting on the service's obsolete electronics. Nor are the drug smugglers the only ones whose technology is more advanced. "We were way behind what the fishermen had," said Lt. j.g. Katherine Niles, a veteran of Coast Guard fisheries patrols in the Atlantic. "When we were trying to find them fishing in illegal waters, we were having trouble."

Even finding boat people can pose a problem. Small wooden vessels can easily slip by radar, making detection a matter of luck and binoculars. In the Haitian and Cuban mass migrations of 1994, recalled Kelly, "My crew picked up over 3,000 people that summer from over a hundred boats and rafts. The initial detection on every one of those, except for one, was made by the lookout, not by any piece of technology."

The Coast Guard wants to improve sensors in each of its units, and to enhance their ability to share data with other Coast Guard units and the Navy. Today, each cutter or aircraft still relies largely on its own onboard systems to detect targets, relaying sightings laboriously over two-way radio. The Deepwater plan proposes to plug all the individual units into a single network so that everyone knows what everyone else is seeing. A satellite or high-flying UAV robot might spot a sinking ship, smuggler's speedboat, leaking oil tanker, or illegal fishing boat and instantly upload the sighting to the network, signaling the nearest cutter either to investigate or, far faster, to dispatch a team by air. The crucial requirement is that the whole system mesh seamlessly with the Navy's.

This ability to plug into the Defense Department's cutting-edge systems-without paying their bleeding-edge price-could prove valuable not only to the Coast Guard, but also to friendly navies around the world that despair of keeping up with their high-tech American allies. "We effectively could become the bridge," said Kelly.

The industry teams competing for the Deepwater contract are cautiously optimistic that the Coast Guard approach could be sold to the Pentagon too. Said Lockheed Martin Corp. executive Rich Turner, "That system-of-systems integration capability-not just a ship, not just an airplane, but all of it rolled together to perform multiple missions-is really what we're striving for."

Indeed, the potential to get the Pentagon's business may be more profitable than Deepwater itself. "If the Coast Guard can actually realize its vision for Deepwater, then it really is a significant amount of business," said industry analyst Loren Thompson of the Lexington Institute, a defense-oriented think tank in Arlington, Va. "[But] we would need to spend about $10 billion. . . . Industry's a little doubtful that it's going to happen."

Spread over 20 years at $500 million a year-the price of about two and a half Air Force F-22 fighters-Deepwater would actually be fairly modest by defense industry standards. But the Coast Guard's entire annual budget is under $5 billion, of which less than $500 million goes to new equipment-everything from small boats to buoys, as well as deepwater ships and aircraft. Something has got to give.

The Coast Guard hopes it will be Deepwater's price tag. "I don't think we have a clue" about the cost, Coast Guard commandant Adm. James Loy told reporters at a March 15 roundtable discussion. The $10 billion would be the cost of a one-for-one replacement of the entire Coast Guard fleet, Loy said, but that is exactly what Deepwater's package-deal approach intends to avoid. In past military programs, however, similar hopes that high technology and efficient design could lower costs have consistently been dashed.

So $500 million a year-or more-looks likely. And Loy argued that the price is not unreasonable: "Back in the '60s and '70s, when we were building our current fleet," he said, "those annual acquisition [costs] were around 750 or 800 million" in current dollars. But the Coast Guard of 30 years ago could ride the wave of military spending for Vietnam. Today "it's a hard sell," lamented Rep. Gene Taylor, D-Miss., himself a former Coast Guard officer. "Congress has finally gotten serious about trying to live within its means."

Congress has steadily increased Pentagon budgets in recent years-but the Coast Guard's position inside the Transportation Department has made it the service most often overlooked. The Navy has historically helped out by paying for weapons and electronics that the Coast Guard did not need except to support the Navy in wartime. But "very little" of Deepwater will meet that criterion, said one Navy official, since most of the Coast Guard's requirements are driven by the increasing difficulty and danger of stopping drug smugglers. Nor is the Navy enthusiastic about shelling out for Coast Guard cutters just as it is asking Congress for dozens of new ships itself.

So the most encouraging news for the Coast Guard has been the December 1999 interagency task force report, sponsored by the White House Office of Management and Budget, which-to the annoyance of some budget hawks-applauded Deepwater as a "near term national priority" for funds. Laughed Loy, "It's enormously important to me that we find a way to tack that on every telephone pole."

And he may need to. "There's very few people in the Congress that are aware of this concept of Deepwater," said Rep. Wayne T. Gilchrest, R-Md., who plans to hold hearings this year on the idea of moving the Coast Guard out of the Department of Transportation. "The Coast Guard is really an unsung hero."

By Sydney J. Freedberg Jr.

April 24, 2000