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Summary:
The term Deepwater refers to a collection of more than a dozen Coast Guard acquisition programs for replacing and modernizing the services aging fleet of deepwater-capable ships and aircraft. Until April 2007, the Coast Guard had pursued these programs as a single, integrated acquisition program that was known as the Integrated Deepwater System (IDS) program or Deepwater program for short. The now-separated Deepwater acquisition programs include plans for, among other things, 91 new cutters, 124 new small boats, and 247 new or modernized airplanes, helicopters, and unmanned aerial vehicles (UAVs). The Coast Guard, which is part of the Department of Homeland Security (DHS), is requesting $1,051.5 million in FY2010 acquisition funding for Deepwater programs, including $305.5 million for aircraft, $591.4 million for surface ships and boats, and $154.6 million for other items. The year 2007 was a watershed year for Deepwater acquisition. The management and execution of what was then the single, integrated Deepwater program was strongly criticized by various observers. House and Senate committees held several oversight hearings on the program. Bills were introduced to restructure or reform the program in various ways. Coast Guard and industry officials acknowledged certain problems in the programs management and execution and defended the programs management and execution in other respects. The Coast Guard announced a number of reform actions that significantly altered the services approach to Deepwater acquisition (and to Coast Guard acquisition in general). In April 2009, the Government Accountability Office (GAO) testified that: At the individual Deepwater asset level, the Coast Guard has improved and begun to apply the disciplined management process found in its Major Systems Acquisition Manual, but did not meet its goal of complete adherence to this process for all Deepwater assets by the second quarter of fiscal year 2009. For example, key acquisition management activitiessuch as operational requirements documents and test plansare not in place for assets with contracts recently awarded or in production, placing the Coast Guard at risk of cost overruns or schedule slips. Due in part to the Coast Guards increased insight into what it is buying, the anticipated cost, schedules, and capabilities of many of the Deepwater assets have changed since the establishment of the $24.2 billion baseline in 2007. Coast Guard officials have stated that this baseline reflected not a traditional cost estimate but rather the anticipated contract costs as determined by ICGS. As the Coast Guard has developed its own cost baselines for some assets, it has become apparent that some of the assets it is procuring will likely cost more than anticipated. Information to date shows that the total cost of the program may grow by $2.1 billion. As more cost baselines are developed and approved, further cost growth may become apparent. In addition, while the Coast Guard plans to update its annual budget requests with asset-based cost information, the current structure of its budget submission to Congress does not include certain details at the asset level, such as estimates of total costs and total numbers to be procured. The Coast Guards reevaluation of baselines has also changed its understanding of the delivery schedules and capabilities of Deepwater assets. This report will be updated as events warrant.
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