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Summary

The Integrated Deepwater Systems (IDS) program, or Deepwater program for short, is a $24-billion, 25-year project to replace and modernize the Coast Guard's aging fleet of deepwater-capable ships and aircraft. It is the largest and most complex acquisition effort in Coast Guard history, encompassing 91 new cutters, 124 new small surface craft, and 244 new or converted airplanes, helicopters, and unmanned aerial vehicles (UAVs). The issue for Congress is whether to approve, reject, or modify the Administration's annual funding requests and overall approach for the program. The Coast Guard is pursuing the Deepwater program as a system-of-systems acquisition project, under which a combination of cutters, patrol boats, aircraft, and supporting assets is to be procured as a single, integrated package. To execute this system-of-systems acquisition approach, the Coast Guard is using a lead system integrator (LSI) -- a private-sector entity responsible for designing, building, and integrating the various elements of the package. On June 25, 2002, the Coast Guard awarded the Deepwater LSI role to Integrated Coast Guard Systems (ICGS) -- an industry team led by Lockheed Martin and Northrop Grumman's Ship Systems division. ICGS was awarded a contract that includes a five-year baseline term and five potential additional award terms of up to five years (60 months) each. On May 19, 2006, the Coast Guard announced that it was awarding ICGS a 43-month first additional award term. Some observers have strongly criticized the management and execution of the Deepwater program, particularly regarding the decision to use an LSI, the execution of a project for modernizing 49 Island-class 110-foot patrol boats and keeping them service until they are replaced by the 58 planned Fast Response Cutters (FRCs), and the FRC design effort. The Coast Guard and industry have acknowledged problems but defended their management and execution of the Deepwater program. Potential options for Congress regarding the Deepwater program include but are not limited to the following: continuing with the program as currently planned; instituting additional or stricter reporting requirements; compressing the acquisition period from 25 years to 15 or 10 years; replacing ICGS as the LSI; dropping the use of an LSI in favor of direct Coast Guard management and integration of the program; and replacing the Deepwater program with a series of separate procurement programs for replacing individual classes of cutters, boats, and aircraft. The Coast Guard's FY2007 budget requested $934.431 million for the Deepwater program. The conference report (H.Rept. 109-699 of September 28, 2006) on H.R. 5441/P.L. 109-295, the FY2007 Department of Homeland Security (DHS) appropriations act, provides a total $1,144.566 million in FY2007 funds for the Deepwater program. H.R. 889/P.L. 109-241, the Coast Guard and Maritime Transportation Act of 2006, establishes certain reporting requirements for the Deepwater program. This report will be updated as events warrant.

Related Legislation:
• H.R.5441
• H.R.889
• S.110

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