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Snowe Demands Explanation for Failures of Deepwater Program
February 15, 2007
WASHINGTON D.C. – As Ranking Member of the Senate Commerce Subcommittee with oversight responsibility of the United States Coast Guard, Senator Olympia J. Snowe (R-Maine) today demanded an explanation for continued failure of the 25 year, $24 billion asset upgrade program known as “Deepwater.” A recent Department of Homeland Security Investigator General report cited deficient oversight and management of the Deepwater program by the Coast Guard as the primary cause of cost overruns and project failures, specifically as it relates to the National Security Cutter, the flagship of the Deepwater program. The Coast Guard failed to inform Congressional oversight committees of the nearly 2 year IG investigation prior to December of 2006 when its existence was widely reported in a number of national newspapers.
“I am shocked and deeply disturbed by the pattern of mismanagement the Coast Guard has shown in its oversight of the Deepwater program,” Snowe said. “It is beyond disputable that the Coast Guard must take immediate action to restore accountability to Deepwater for the sake of our critical Coast Guard service and our homeland security. This mismanagement is not only a breach of trust with the American people, but has undermined a program that is so vitally important to the brave men and women of the Coast Guard who desperately require these resources.”
At a hearing of the Commerce Subcommittee on Oceans, Atmosphere, Fisheries, and the Coast Guard this afternoon, Senator Snowe questioned Coast Guard Commandant, Admiral Thad Allen on the challenges deepwater has encountered since 2001 and the Coast Guard’s proposed course of action to prevent future problems. Steven Caldwell from the Government Accountability Office; Richard Skinner from the Department of Homeland Security Office of Inspector General; Philip Teel of Integrated Coast Guard Systems and Northrop Grumman and Mr. Leo Mackay of Lockheed Martin; and retired Coast Guard Captain Jarvis also testified at today’s hearing.
The following is text of Senator Snowe’s opening statement as prepared for delivery:
“We are here today to discuss the Coast Guard’s vital acquisition effort, Deepwater. Regrettably, despite the tremendous urgency for upgrading the Coast Guard’s assets on the water and in the air, we are compelled to focus our attention today on the Coast Guard’s apparent failure in managing this multi-billion dollar, multi-year project.
I know we are all alarmed by the troubling pattern of mismanagement that the New York Times and the DHS Inspector General has discovered, and it is indisputable we must restore accountability to the Deepwater program for the sake of our critical Coast Guard service and our homeland security. This mismanagement is not only a breach of trust with the American people, but has also undermined a program that is so vitally important to our future.
First, we must understand exactly what happened, and why, starting with the National Security Cutter. As revealed by Eric Lipton of the New York Times on December 9th and the DHS Inspector General last month, the Coast Guard was fully aware of significant design problems with this cutter since at least 2004. The investigators found that the design of the ship, if not corrected at considerable cost to the US taxpayer, may not allow it to meet a 30 year fatigue life. In addition, they reported that the design and performance deficiencies are fundamentally the result of the Coast Guard’s failure to exercise its technical and management oversight.
And now, I am horrified by last Friday’s report in the Washington Post that the Coast Guard may have tried to cover-up the problems with the National Security Cutter when submitting documents to the IG. If this is found to be true, unquestionably the Coast Guard has jeopardized the trust that is so essential for support of its vital programs.
Indeed, I am not only troubled to learn of the Coast Guard’s problems with managing Deepwater and working with the IG, I am equally distressed about how these transgressions may have damaged the Coast Guard’s relationship with Congress. I have been the Republican leader of this Coast Guard oversight subcommittee for more than ten years, and Deepwater has been the subject of at least 10 of our hearings since 2001.
In addition, I have requested two GAO audits of Coast Guard’s Deepwater Oversight, asked Secretary Chertoff to conduct a “Best Practices” review of Deepwater management, and inserted language in three separate Coast Guard Authorization Bills directing the Coast Guard to report on Deepwater asset and timelines. In fact, last October my staff visited the Northrup Grumman Shipyard in Mississippi, where the Coast Guard gave them a tour of the National Security Cutter from stem to stern, and they received no indication of any problems whatsoever.
Despite the numerous means by which we exerted our oversight, the Coast Guard failed to alert us to any allegations or investigations into problems with the Deepwater program. Not once during these hearings, briefings, or visits was there any mention of the significance of structural design issues or fatigue life concerns. Not once did the Coast Guard relay to Congress the intensity of the debate and the seriousness of the issues surrounding what many have called the Flagship of the Deepwater effort. The failure to inform us of such serious structural failings in the National Security Cutter is unprecedented, and unacceptable.
It is simply unconscionable that the Coast Guard did not bring these issues to light prior to December 2006. Transparency and accountability are essential to any program of this magnitude, and even more so given the innovative nature of Deepwater’s public-private partnership. And yet, the Coast Guard has had considerable difficulties with oversight and execution of Deepwater acquisitions. Here we are, stunned by the scale and scope of management failures that threaten to derail the entire program. Our taxpayers, and our national security are not well served by the “ruthless execution” that the Coast Guard has demonstrated in charging forward on the National Security Cutter despite grave concerns with the ship.
Understanding what went wrong in all these instances is only the first of many steps essential to correcting Deepwater’s course. The second step is for all parties to hold themselves accountable for their roles and decisions in this debacle. I appreciate that Coast Guard Commandant, Admiral Allen has assured me in writing and in person that he holds himself responsible for all Coast Guard actions, regardless of when the decisions were made. It will be critical that the commitment to reorganize Coast Guard leadership that you expressed in yesterday’s State of the Coast Guard address comes to fruition to help stem the tide of poor decisions that has brought us to this point.
Moreover, in light of the recently released of the Defense Acquisition University recommending changes in Deepwater’s acquisition strategy, contract structure, and management, I expect the Coast Guard to develop and present to Congress a detailed plan outlining its strategy for regaining control of the this program before coming to a final agreement with ICGS on the next Deepwater Award Term. Any new strategy must include the Coast Guard improving its acquisition processes and reasserting its oversight responsibilities. To do anything less places the entire Deepwater program in jeopardy, and does a profound disservice to the brave men and women of the Coast Guard who desperately require these resources.
As for the allegations of stonewalling and finger-pointing in the IG’s investigation, I will introduce legislation that directs DHS to develop an audit plan so that the IG will not be encumbered in its future work. It is simply unacceptable that lack of clarity on IG authorities should hamper investigations on such a critical national security program.
Despite the degrading condition of its assets, just last year the Coast Guard responded to over 28,000 mariners in distress and stopped more than 140,000 tons of cocaine from reaching our shores. Clearly, our Nation must have a Coast Guard that is equipped, trained, and ready to meet our maritime and Homeland Security challenges. We all had a chance to see the Coast Guard’s tremendous dedication during Hurricane Katrina, and we have not forgotten that.
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