Coast Guard taps duo for Deepwater

The Coast Guard last week awarded its much-anticipated Integrated Deepwater System contract — a landmark deal worth up to $17 billion — to a joint venture established by Lockheed Martin Corp. and Northrop Grumman Corp.

As the largest procurement in the Transportation Department's history, Deepwater represents a sweeping modernization after years of neglect. The program will replace an aging fleet of cutters, aircraft, sensors and the supporting command, control, communications and surveillance systems.

The agency and companies officially launched Deepwater after signing a commitment to partnership and performance in a ceremony June 25 at the National Press Club in Washington, D.C.

The contract calls for the delivery of a first set of ships and planes — as well as some upgrades — in the next five years. Eventually, up to 91 ships, 35 fixed-wing aircraft, 34 helicopters and 76 unmanned surveillance aircraft will be acquired, and 49 existing cutters and 93 helicopters will be upgraded.

"With Deepwater, the Coast Guard will one day have an electronically interlinked armada," said Ronald Sugar, president and chief operating officer of Northrop Grumman, speaking at the ceremony.

The agency took a performance-based approach to Deepwater, a strategy that emphasizes results over detailed specifications and gives vendors room to come up with a best solution to meet an agency's mission.

Currently, the Coast Guard's communications systems are inadequate and its antiquated technology is costly, according to officials.

To deal with 21st-century threats — including terrorism, drug smuggling and arms trafficking — the agency needs up-to-date capabilities, said Coast Guard Commandant Adm. Thomas Collins.

Consider the following scenario. A cutter patrols an area for potential targets while a helicopter uses tools, including radar and video, to capture a picture of the sea from above. The helicopter cannot transmit the data it collects to the cutter. "It's very much manual, unsophisticated," said Capt. Jeff Karonis, a spokesman for the agency.

With Deepwater, the Coast Guard hopes to change that. Helicopters will be able to send information through data links to ships, shore centers and even other agencies, Karonis said.

"It's a quantum leap in terms of technology," he said. The capability cuts across the agency's "military, multi- mission maritime service," whether it is rescuing a person, tackling pollution or fighting organized crime. With such a tall order, the Coast Guard is looking at Deepwater as a long-term project — it could extend the contract up to 30 years.

Although the program has been in the works for years, it resonates with the current focus on homeland security. The Coast Guard, as an agency operating within DOT, has faced increased pressures since the terrorist attacks last September.

"The most significant backdrop for Deepwater now is Sept. 11," said Rep. David Vitter (R-La.), who supports the program.

The already high-profile program could land in a larger sea if President Bush has his way. Earlier this month, Bush unveiled his proposal to create a Cabinet-level Homeland Security Department that would house several existing agencies, including the Coast Guard and the new Transportation Security Administration.

"The lessons of this procurement have been studied by this administration," said Transportation Deputy Secretary Michael Jackson. DOT examined the Deepwater model while building TSA, he said.

In the past, members of Congress have questioned their ability to sustain the program's spending needs over time.

The Bush administration's $7.1 billion budget request for the Coast Guard for fiscal 2003 includes $500 million for Deepwater. It received $320 million in funding for fiscal 2002.

"We count our budget in M's," Collins said at a Feb. 4 news conference on the budget, referring to "millions." "Now we're starting to count it in B's." n

Deepwater particulars The Coast Guard awarded its Integrated Deepwater System contract to Integrated Coast Guard Systems, a joint venture established by Lockheed Martin Corp. and Northrop Grumman Corp. The performance-based contract is valued at $16.95 billion over 30 years. It includes $11.04 billion for new ships and aircraft and improved command and control systems, and $5.91 billion for operating, maintenance and sustainment costs.