Coast Guard procurement contract likely to be delayed

The Coast Guard's multibillion-dollar contract for the renovation of deepwater ships and aircraft will probably not be awarded on schedule, Commandant Adm. James Loy said Thursday. In an interview with Government Executive, Loy said a contract for the Deepwater program would probably be awarded after he has finished his term as commandant on May 30. The Coast Guard originally planned to award the Deepwater contract in April or May. The complexity of evaluating industry proposals has pushed back the likely award date, said Loy. "My guess is [the award] will slide a little bit and that's just in the due course of making sure the government gets what it needs to get," he said. Lt. Cdr. Andrea Palermo, a spokeswoman for the Deepwater program, said the contract would be awarded no later than June. Three teams led by Boeing, Lockheed Martin and Science Applications International Corp. are vying for the Deepwater pact, which could be worth up to $10 billion. Loy said he is optimistic that Deepwater will be "strongly supported" in the Bush administration's fiscal 2003 budget, and noted that President Bush endorsed Coast Guard modernization in an address Wednesday to the Reserve Officers Association. The Deepwater program is expected to cost $500 million a year over the next two decades to replace its aging fleet of offshore cutters and aircraft. "The support of conviction and commitment to the Deepwater project I believe literally goes right into the Oval Office," said Loy. On Friday, Bush will visit the harbor at Portland, Maine and tour the 270-foot Coast Guard cutter Tahoma before delivering a speech on funding for homeland security. Loy said the Deepwater project would survive if the Coast Guard were moved out of the Transportation Department and into a new federal border administration, an option that is being considered by the White House Office of Homeland Security. But he cautioned that such a move could disrupt the inter-agency relationships the Coast Guard relies on to perform its numerous missions. "I have been trying to make sure that we . . . understand that there's always that classic law of unintended consequences, and the need to be very careful about what we're doing about the working synergies that are there because of the current organizational alignment," he said. He added that an agency reorganization could sap resources from the Coast Guard as it focuses on homeland security. "A crisis is not necessarily the very best time to make major reorganizational things happen," he said. "In order to do that, there is energy that has to be placed into reorganization activities, and in my mind they would easily be a drain on where we are really supposed to be putting our energies at the moment: in the war against terrorism." But Loy did not shut the door on moving the Coast Guard into a new department. "If at the end of the day there's simply a better way to organize the federal government to accomplish an array of things, so be it."