Senate Passes Legislation Overhauling Coast Guard’s Deepwater Acquisition Process

The Senate today passed the “Integrated Deepwater Program Reform Act”.  The Act, which now must be reconciled with it’s House counterpart, restricts the use of private sector entities as a “lead systems integrator” and ensures “full and open competition” in procurements in the Deepwater Program which include the National Security Cutter and other vital assets of the Coast Guard.

”I applaud the passage of this critical reform legislation that will stregthen the Coast Guard’s oversight and management of its modernization effort,” said Senator Olympia Snowe (R-Maine), who had introduced the legislation with the Chair of the Subcommittee Senator Maria Cantwell (D-Washington). “As we recently witnessed with the Coast Guard’s announcement of record drug seizures and the heroic rescues of flood victims in the Northwest, the American public continues to benefit from a robust and modern Coast Guard.  At the same time, this legislation will ensure that going forward, the Deepwater modernization project will be characterized by fiscal stewardship and accountability.  The men and women of the United States Coast Guard and the nation deserve nothing less.”

Deepwater—a partnership between the Coast Guard and a joint venture by Lockheed Martin and Northrop Grumman, known as Integrated Coast Guard Systems (ICGS)—is a 25-year, $24 billion initiative to replace the aging fleet of Coast Guard assets used in missions more than 50 miles from the coast.  The program is plagued by cost overruns, debilitating design flaws, ships and technology that fall far short of contract requirements, and a contract structure that strips the Coast Guard of oversight and decision-making authority.

The legislation would:

  • Direct the Coast Guard to stop using a Lead Systems Integrator (LSI) on future Deepwater acquisitions.
  • Allow the Coast Guard to use the LSI to complete any specific work for which a contract or order had already been issued.
  • Allow the Coast Guard to use the LSI to complete the C130-J modifications, the C4ISR program, and also to complete procurements of the National Security Cutters (NSCs) and Maritime Patrol Aircraft (MPA) already under contract for construction.  However, the LSI must have no financial interest in subcontracts or have competed for the subcontracts.
  • Allow the Coast Guard to use the LSI to complete all of the remaining NSCs and MPAs only after an analysis of alternatives has been conducted, and if the Coast Guard concludes that these procurements and use of an LSI are in the best interests of the federal government, that justifications for not competing assets under the Federal Acquisition Regulations are met, and that the LSI has no financial interest in subcontracts or has competed the subcontracts.

In addition, the measure requires the Commandant of the Coast Guard to certify to Congress prior to issuing new contracts for specific proposed acquisitions that the proposed asset meets objective criteria on feasibility, maturity of design, and costs.  A similar requirement applies to Department of Defense contracts.

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