In the Dock

Key Coast Guard and Navy shipbuilding programs are failing to deliver.

January was a bad month for the sea services' modernization programs. Homeland Security Department Inspector General Richard L. Skinner issued a scathing report on the Coast Guard's management of its National Security Cutter acquisition program, declaring that design defects will reduce the ship's service life and increase maintenance costs. Even worse, the IG showed that Coast Guard leaders knew about the problems but chose to stick to the production schedule instead of first solving them.

As a result, the first cutter will need to undergo expensive retrofitting. At the Pentagon, the Navy suspended work on the third Littoral Combat Ship, fired the program manager and reassigned the admiral in charge of shipbuilding programs after an audit showed LCS' costs could nearly double to $400 million.

"We have some programmatic problems both here and in the Navy where apparently all sorts of money can get wasted, ships can get delayed, things can get screwed up and no one's responsible," said Rep. Gene Taylor, D-Miss., at a Jan. 30 hearing of the House Transportation and Infrastructure Committee's panel on the Coast Guard and maritime transportation. "Everyone says it's somebody else's problem while the taxpayers are stuck with the bill."

The Coast Guard's National Security Cutter program is part of a much broader, 25-year plan estimated to cost more than $24 billion, known as Deepwater, which aims to recapitalize the service's watercraft, aircraft and communications assets. It is being managed by a joint venture of defense contractors Lockheed Martin Corp. and Northrop Grumman Corp. and has come under fire in recent months for both technical and financial reasons. In November, Coast Guard Commandant Adm. Thad W. Allen suspended operation of patrol boats that had been revamped under the program when their hulls cracked during deployments. The problems are so severe that it's not yet clear if they can be made seaworthy, Allen told lawmakers at the hearing.

Both the IG and auditors at the Government Accountability Office concluded the Coast Guard has failed to adequately oversee and manage the contract and the contractors.

Lockheed Martin also is responsible for building the Littoral Combat Ship for which the Navy issued the stop-work order. Two other Littoral Combat Ships are being built by General Dynamics Corp. under the contract, and that version also is experiencing significant cost overruns, according to a March 1 report in The Washington Post.

In February, Taylor convened a House Armed Services Committee hearing on the LCS problems. "I am really troubled with the whole design and build concept, not just in this program but with two Coast Guard programs that are equally screwed up," Taylor said. Both the Navy and the Coast Guard are reviewing their shipbuilding programs and reorganizing their oversight workforces.

Allen has proposed a more radical revamping of Coast Guard operations and organizational structure, likely to be implemented in 2008. "Our command and control structures, our support systems and our business practices have in some cases failed to keep pace with our rapid growth and the expansion of our responsibilities," he told more than 40,000 Coast Guard members in a Feb. 13 address in Washington.

Allen said a new deputy commandant for mission support would oversee the design, acquisition and construction of new ships. Until now, these functions have been managed separately, and that, Allen believes, accounts for many of the problems with Deepwater. A new mission support organization will establish a single point of accountability, he said.

"I have made a personal commitment to be a commandant of change, transition and transformation. I did not ask for this job to maintain the status quo," Allen said.

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