Tide closes in on Deepwater

The $120 billion Iraq war supplemental spending bill Congress passed May 24 provides an additional $917 million for homeland security programs and also tightens restrictions on the Coast Guard’s troubled Deepwater acquisition program.

The new bill, H.R. 2206, allocates extra funds for airport security and  grants to mass transit and rail systems and shipping ports for emergency preparedness, among other programs. The new legislation provides less for homeland security than the earlier version, which President Bush vetoed.

Under the new bill, the Transportation Security Administration would receive $390 million, of which $285 million is for checked baggage explosive detection systems. Ports would be eligible for $110 million and mass transit and rail systems would get $100 million. Another $100 million is to be spent on advanced spectroscopic portal monitors.

For Deepwater, the legislation contains provisions requiring technical reviews, third-party assessments, life-cycle cost estimates and other actions as the program moves forward. The $24 billion procurement is the Coast Guard’s modernization program. The contract was awarded in 2002 to a partnership of Lockheed Martin Corp. and Northrop Grumman Corp.

Deepwater has been strongly criticized in recent months for alleged mismanagement, overspending and improper work. The Coast Guard recently reclaimed the lead systems integrator role for itself and said it would compete all future task orders. The Coast Guard also is seeking a refund for eight patrol boats that were reconfigured under Deepwater because it believes the boats are structurally unsound.

Under the legislation, future task orders related to design changes must include a technical review, third-party review and independent life-cycle cost estimate. The legislation would also require the Coast Guard to appoint a chairman of each integrated product team.

The bill further requires that the Coast Guard cannot receive $650 million in available funding for Deepwater until it:

•  Develops an expenditure plan that defines activities, milestones, yearly costs and life-cycle costs for procurement of each major asset;
•  Identifies life-cycle and training needs for Coast Guard employees;
•  Identifies competition for each contract;
•  Describes procurement plans that do not rely on a single industry entity or contract; and
•  Provides justifications and limits for indefinite-delivery, indefinite-quantity contracts.