COMPLIANCE WITH REQUIREMENTS

OF THE COAST GUARD’S DEEPWATER CONTRACT

(110–27)

HEARING

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

APRIL 18, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMPLIANCE WITH REQUIREMENTS OF THE COAST GUARD’S DEEPWATER CONTRACT

COMPLIANCE WITH REQUIREMENTS OF THE COAST GUARD’S DEEPWATER CONTRACT

COMPLIANCE WITH REQUIREMENTS OF THE COAST GUARD’S DEEPWATER CONTRACT

COMPLIANCE WITH REQUIREMENTS OF THE COAST GUARD’S DEEPWATER CONTRACT

COMPLIANCE WITH REQUIREMENTS OF THE COAST GUARD’S

DEEPWATER CONTRACT

COMPLIANCE WITH REQUIREMENTS OF THE COAST

GUARD’S DEEPWATER CONTRACT

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34–798 PDF 2007

COMPLIANCE WITH REQUIREMENTS

OF THE COAST GUARD’S DEEPWATER CONTRACT

(110–27)

HEARING

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

APRIL 18, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

JUANITA MILLENDER-MCDONALD, 

California 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

(III)

CONTENTS Page

Summary of Subject Matter .................................................................................... v 

C4ISR Overview ....................................................................................................... xv 

Background Paper on the 110/123 Hull Cracking Issue ...................................... xxv

TESTIMONY 

Anton, James E., Executive Vice President of Integrated Coast Guard Systems and Vice President of the Deepwater Program, Northrop Grumman 

Ship Systems ........................................................................................................ 57

Atkinson, James, President and Senior Engineer, Granite Island Group. ......... 10

Blore, Rear Admiral Gary T., Program Executive Officer, Coast Guard Integrated Deepwater System ................................................................................... 117

Braden, Robert, Senior Technical Staff, Processor and Systems Design, Lockheed Martin .......................................................................................................... 10

DeKort, Michael, Former Project Management Specialist for 123 Systems, 

Lockheed Martin .................................................................................................. 10

Ghosh, Debu, Naval Architect, Branch Chief, U.S. Coast Guard Boat Engineering Branch ..................................................................................................... 88

Jacoby, Lieutenant Commander Chad, Program Manager, Scaleable Composite Vessel Prototype Program Science and Technology Directorate, Department Of Homeland Security ......................................................................... 88

Lavan, Maryanne, Vice President for Ethics and Business Conduct, Lockheed 

Martin ................................................................................................................... 57

Mackay, Leo, Vice President and General Manager, Integrated Coast Guard 

Systems ................................................................................................................. 57

Martindale, Cathy, Contracting Office Chief, Coast Guard Engineering and 

Logistics Center .................................................................................................... 88

Michel, Joe, Assistant Deputy for Systems Implementation, U.S. Coast Guard 

Nationwide Automatic Identification System Project ....................................... 88

Rodgers, Thomas, Vice President, Technical Operations, Lockheed Martin 

Maritime Systems and Sensors ........................................................................... 57

Sampson, Scott, Section Chief of the Development Section, U.S. Coast Guard 

Maintenance and Logistics Command Atlantic in the Vessel Specifications 

Branch ................................................................................................................... 10

Stanley, Marc, Executive Vice President of Government Affairs, Bollinger 

Shipyards, Inc. ...................................................................................................... 57

Sullivan, Vice Admiral Paul E., Commander, Naval Sea Systems Command, 

U.S. Navy .............................................................................................................. 117

Winterstine, Bruce, Principal Project Analyst, Lockheed Martin Maritime 

Systems and Sensors ........................................................................................... 57

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Cohen, Hon. Steve, of Tennessee ............................................................................ 134

Costello, Hon. Jerry F., of Illinois .......................................................................... 135

Mica, Hon. John L., of Florida ................................................................................ 137

Mitchell, Hon. Harry E., of Arizona ....................................................................... 141

Oberstar, Hon. James L. ......................................................................................... 143

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Anton, James E. ....................................................................................................... 146

Atkinson, James M. ................................................................................................. 151

Blore, Rear Admiral Gary T. .................................................................................. 319

Braden, Robert K. .................................................................................................... 337

DeKort, Michael ....................................................................................................... 340

Ghosh, Debu ............................................................................................................. 400

Jacoby, Lieutenant Commander Chad ................................................................... 405

Page

IV

Mackay, Leo ............................................................................................................. 407

Martindale, Cathy ................................................................................................... 412

Michel, Joe ............................................................................................................... 414

Sampson, Scott ......................................................................................................... 416

SUBMISSIONS FOR THE RECORD 

Blore, Rear Admiral Gary T., Program Executive Officer, Coast Guard Integrated Deepwater System:

Responses to questions from Rep. LaTourette ................................................... 125

Responses to questions from Rep. Oberstar ....................................................... 326

Ghosh, Debu, Naval Architect, Branch Chief, U.S. Coast Guard Boat Engineering Branch, response to question from Rep. Kagan ................................... 106

Jacoby, Lieutenant Commander Chad, Program Manager, Scaleable Composite Vessel Prototype Program Science and Technology Directorate, Department Of Homeland Security, response to question from Rep. 

Cummings ............................................................................................................. 112

ADDITION TO THE RECORD 

U.S. Coast Guard, Pamela K. Bible, Contracting Officer, letter of revocation 

of acceptance ......................................................................................................... 421

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(1)

OVERSIGHT HEARING ON COMPLIANCE WITH 

REQUIREMENTS OF THE COAST GUARD’S 

DEEPWATER CONTRACT 

Wednesday, April 18, 2007

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 2:40 p.m., in Room 

2167, Rayburn House Office Building, the Honorable James L. 

Oberstar [chairman of the committee] presiding. 

Mr. OBERSTAR. The Committee on Investigations and Oversight 

will come to order. 

We meet today in full Committee to inquire into compliance of 

the Coast Guard with the Deepwater Contract. 

When I was elected to the chairmanship of the Committee, I said 

at the very outset, that we would have a strong emphasis of oversight and investigations into the programs within the jurisdiction 

of our Committee. 

It has long been a role of this Committee going back to 1959 

when the Special Investigating Committee and the Federal-Aid 

Highway Program was established by then Speaker Rayburn and 

my predecessor, John Botnick, whose portrait is over there in the 

corner was designated chair of that Committee. It was the very 

first deep investigative work of the House in the post-World War 

II era that resulted in conversion of all State and Federal highway 

programs from no internal audit and review procedures to every 

State having internal audit, review and accountability for their 

Federal highway funds. 

It also resulted in 36 people going to Federal and State prison 

for their illegal activities in misuse and abuse of public funds in 

the Federal-Aid Highway Program. 

The Committee continued its work into other areas of jurisdiction 

of the full Committee doing enormous good service to the public. 

We continue that work in the spirit of inquiring into the whys, the 

best and most effective use of public funds and ensuring that there 

is not failure on the part of Federal agencies carrying out their 

public trust. 

Of all the issues that have come before our Committee—we have 

had a lot since the beginning of this session of Congress—the failures of the Coast Guard Deepwater Acquisition Program are the 

most disturbing. The Investigations and Oversight bipartisan staff 

has conducted an in-depth investigation over the last three months 

of the conversion of 110 foot patrol boats to 123 foot boats, which 

2

is a 12 percent extension, and to modernize their electronics in the 

new era of security and the additional mission of the Coast Guard 

in homeland security. 

The investigation uncovered factors far more disturbing than we 

anticipated at the outset, more than other committees that have 

looked into this have uncovered. Major problems in the program, 

some of the major problems, have already been disclosed in hearings of other committees and by news reports. But four years after 

the Coast Guard began the Deepwater program to replace or upgrade all of its ships, fixed wing aircraft and helicopters, we know 

that 8 of the 110 foot patrol boats have been found unseaworthy 

and rendered essentially useless by a poorly designed hull extension. 

It has already on public record that plans to produce a new class 

of 147 foot ships have been shelved after a new hull design was 

found to be flawed. 

It has already been published that serious questions have been 

raised about the structural integrity of the new National Security 

Cutter and whether it can be expected to meet its projected lifetime 

in service. 

There are problems that have increased the cost of the Fleet Re- newal Program from $17 billion to more than $24 billion. 

We know that the Coast Guard’s ability to fulfill its mission has 

been compromised, that critically needed assets are not going to be 

available or certainly not available in the timeframe within which 

the Coast Guard needs them. The Coast Guard, consequently, has 

been forced to cut back on patrols. At times, it has had to ignore 

tips from other Federal agencies about drug smugglers. 

We are concerned these difficulties will only grow and become 

more acute in the years ahead as older vessels fail and replacements are not available. 

What we have learned in our investigation, though, is even more 

disturbing, serious management failings which are structural internal to the Coast Guard. We are not going to pass final judgment 

on those charges or allegations until we have had the response of 

the Coast Guard and its contractors. 

I should point out that the testimony we will hear today raises 

serious problems that were known early in the program by the 

Coast Guard and that warnings delivered by very courageous persons involved in the program from the earliest days were delivered, 

and many of the warnings consciously rejected by various levels of 

Coast Guard management. 

I commend those who are witnesses here before us today, who 

have helped us in understanding what happened and have put 

their jobs, their careers on the line in order to do the right thing 

and assure that the truth is out, in particular, Michael DeKort, 

Robert Braden and Scott Sampson. Mr. Atkinson is not a Coast 

Guard employee, but he is a similarly public spirited person who 

has proffered an extensive analysis of the internal problems. 

Now the Coast Guard has taken a lessons learned approach to 

the tragedies, the failures that have occurred in the conversion program, and we hope that today’s hearing will make a major contribution to improving, changing not only the way the Coast Guard 

does this but the culture, the very culture within the culture. Time 

3

will tell, but one thing is certain. We are going to stay on top of 

it. 

Mr. OBERSTAR. The Chair recognizes the gentleman from Florida, 

the Ranking Member, Mr. Mica. 

Mr. MICA. Thank you, Mr. Chairman. I have some comments. 

I am a little bit concerned. This is the first of our investigative 

hearings, and by going forward today under some terms that I 

thought were a little bit different than what I had anticipated, I 

do have some issues that I do want to raise. 

The Committee is continuing today in what I was led to believe 

was the oversight of the Coast Guard’s very important Deepwater 

program. Unfortunately, after reviewing the materials for this 

hearing, most of what we are going to hear or go through in a series of panels appears to be matters that we have already reviewed. 

I guess some of it may be redundant because I have not only participated in at least two hearings on this Committee but also the 

Government Reform Committee on which I serve which has also 

looked into this. This is, I believe, the sixth hearing held this year, 

and number seven is next week in the Senate. 

I do want to say that I have been impressed with the conduct of 

the Chairman of the Subcommittee, Mr. Cummings, and the Ranking Member, Mr. LaTourette. They stated that they would continue 

to pursue this matter and have subsequent testimony from the 

DHS IG and the General Accountability Office just last month. In 

the January hearing, Mr. Cummings, Chair of the Subcommittee, 

and Commandant Allen agreed that there would be a hearing 120 

days later in which the Coast Guard would report also on changes 

in the program and progress that has been made. I think it is very 

important that we review that. 

I come from the State of Florida. We have these eight cutters 

that now I am told they have been brought up here to the Northeast from Florida. They are not usable. 

These cutters are critical to safety, to national security, to questions and problems we face on illegal immigration. Last week, we 

had, I believe, over 100 Haitians just come in, in one batch, and 

warm weather hasn’t started. The Coast Guard has a mission dealing with illegal narcotics which is critical, and I don’t have those 

assets there. 

There are 40 of these cutters. These are eight. A large percentage 

of these cutters are out of service. I know there are some plans in 

place, and it is critical that we deal with these issues I mentioned, 

not to mention the possibility of some change in the regime with 

Castro and critical needs without the vessels in place. 

No one is more deeply troubled than I am about the problems associated with the 110 foot cutters to 123 foot cutters which was the 

effort underway. However, I am afraid again that this hearing 

merely rehashes some of the issues the IG has gone through and 

reviewed and testified about at our Coast Guard Budget Hearing 

last week. 

I do have the questions that were raised, I would like to submit 

for the record, and then the responses which are some of the same 

questions again today, if I could have that included. 

Mr. OBERSTAR. Without objection, they will be included. 

4

Mr. MICA. In addition, I must point out again this is very important that this is the first of our investigative hearings, and both 

Mr. Oberstar and I are committed to strong investigations and 

oversight. We think that is an important part of our responsibility. 

However, the minority was not included in the selection of the 

interviewing of these witnesses. Given the traditional bipartisan 

nature of the work on Coast Guard and maritime transportation, 

this causes me great concern. In Government Reform, for example, 

we don’t interview a witness or depose a witness without notification and the opportunity to have bipartisan participation. That 

does concern me, and I hope that is not the way we proceed in the 

future. 

I also understand that one of today’s witnesses, as staff has told 

me, is being paid by the Committee, the taxpayers, as a consultant, 

and I think that is Mr. Atkinson. Is that correct? 

Mr. OBERSTAR. Only his travel and expenses are covered. 

Mr. MICA. So he is being paid. 

Mr. OBERSTAR. As in the tradition of the Committee. 

Mr. MICA. Again, I have concerns about the selection of witnesses 

and particularly those, well, we are going to hear from a whistleblower, and I think he has some important information to share 

with the Committee. I am not certain, because again our staff was 

not permitted to interview him at the same time, that he is actually in position to be able to comment on some of the issues relating to certification, et cetera, that he may be testifying on. So that 

raises a question. 

Secondly, with Mr. Atkinson, I am just totally at a loss with why 

he was permitted to be a witness. Now I did not see this until yesterday, and staff provided me with this yesterday, but anyone can 

go on to www.tscm.com. That is his web site. 

In 15 years of having witnesses before numerous subcommittees, 

some of which I chaired or participating on different committees, 

I have never had a witness who set forth a mission statement or 

qualifications. Let me read from his, and you all pull this up and 

see it. 

These are quotes from his web site: ‘‘I will not have anything to 

do with someone I know to be a criminal, and if I have seen the 

slightest reason to believe that they have a criminal history, I will 

back away from them the second I find out about it. In fact, not 

only will I start backing away from them, but they will hear me 

reloading the shot gun as I do it.’’

Second paragraph: ‘‘If someone choose to be an eavesdropper, I 

will hunt them to the ends of the Earth. If they are a felon or a 

crook using electronics in their work, I will relentlessly stalk them 

until they are rendered impotent.’’

Third paragraph: ‘‘When the eavesdropper lies on his death bed 

and the angel of death comes to take him away, I want death to 

be holding a scanlock instead of a scythe. I want them constantly 

looking over their shoulder and expecting TSCM specialists to 

pounce on them and start beating them with an NLJD. Let them 

fear black boxes and weird looking antennas. Let them eat Xanax 

by the handful and spend their days in pain.’’

Fourth paragraph: ‘‘Let them be afraid. Let them be very afraid, 

for I am hunting them. If I am not hunting them, then someone 

5

who I trained will be. Let them be afraid. I perform bug sweeps 

like a contact sport. I don’t play fair.’’

I have never heard a witness give those kind of qualifications. 

Again, the rest of it is troubling to me. The staff pointed this out. 

So I do have concerns about the witnesses and particularly that 

witness. 

The Deepwater program, as I said, is critically important, and we 

need to have the best witnesses and access to the best information 

and resources to make certain that we have enhanced vessels and 

aircraft in place as quickly as possible at the lowest cost to the taxpayer. 

In January, Admiral Allen appeared before the Committee and 

committed himself and the Coast Guard to improving the oversight 

which is very important. 

Finally, I do have concerns about two things. One, it is also the 

custom that we investigate and then we make a determination, and 

I am prepared to do that and work with the Chairman and the 

Ranking Member before calling the Department of Justice to look 

if we find in this hearing or subsequent hearings criminal and civil 

misconduct that warrants an investigation, not to announce that to 

the media before the hearing. 

Then the second concern that I have is that the Coast Guard has 

now made an announcement prompted by some of these inquiries, 

and I am not sure that it is the wisest announcement, to go forward with in-house actually control and management of these contracts which I don’t know they have the capability of doing and 

which testimony we have heard previously and in other committees 

indicated their inability to pay, their inability to retain personnel, 

attract personnel or put a program like this into place for oversight. They may not have that oversight capability or ability even 

to maintain that capability. 

In the meantime, I am pledged to continue to work with the majority. This is a very important issue, and I am sorry that we did 

get off with some unacceptable terms in both procedures and witnesses for this first hearing. 

I yield back. 

Mr. OBERSTAR. I read the same comments on the web site, and 

I took them in a different vein. But, Mr. Atkinson, after he is 

sworn in, will have an opportunity to respond to the Ranking Member’s comments. 

As to witnesses, I directed the majority staff to share with the 

minority, the names of witnesses, and they are free to call and inquire and interrogate them as they wish, and they had all the 

names. 

As for redundancy, I can’t control what other committees do, I 

will say to my good friend. If they want to have hearings, that is 

their business, but we are conducting our business. We did have a 

preliminary hearing earlier this year on Deepwater. It set the stage 

for what I felt was necessary and what you and I both discussed 

was a necessary, more intensive discussion and inquiry into these 

matters. 

As for the Justice Department, we make no judgment. Justice is 

conducting its own inquiry into this matter. After the conclusion of 

6

our hearings and in consultation with the Ranking Member, we 

will decide what next steps to take. 

The gentleman from Maryland, the Chairman of the Subcommittee, Mr. Cummings, at the outset, I want to say conducted 

a very thorough inquiry and has given an enormous amount of his 

personal time and been actually on board defective vessels. 

I recognize the gentleman for his statement. 

Mr. CUMMINGS. I want to thank the gentleman for yielding, and 

I want to thank you, Mr. Oberstar, for your dedication and effective 

oversight and for convening this hearing today to continue requiring accountability, and I emphasize accountability on the part of 

the Coast Guard as well as its contractor-partner for implementation of a Deepwater Acquisition Program. 

I must say that as I listened to Mr. Mica, I think we have to be 

very careful that we don’t assassinate witnesses before they even 

testify. These witnesses come to us, some of them I am sure, with 

some fear, but they have stepped forward bravely. I am very, very 

familiar with their testimony, and I know that they have the concerns of the American people and the Coast Guard and Coast 

Guard personnel, by the way, in mind. Deepwater is a $24 billion, and I emphasizes billion dollar, procurement effort through which the Coast Guard is acquiring 91 cutters, more than 100 small surface craft and 244 new or converted 

aircraft including helicopters and fixed wing airplanes. 

Americans trust the Coast Guard to protect them from emerging 

threats approaching our homeland from the sea, to rescue them 

when they are in danger and to protect the natural resources of our 

marine environments. That trust is well placed. 

However, Americans also need to know that they can trust the 

Coast Guard’s leaders to manage the taxpayers’ hard earned dollars effectively and efficiently and to provide the tools that the men 

and women of the Coast Guard need to succeed. Further, Americans need to know that when a multibillion dollar contract is 

signed, the parties to that contract will accomplish its objectives to 

the best of their abilities. 

Our expectations for the Deepwater program are not unreasonable. We expect it to produce boats that float, planes that fly and 

information technology systems that work, meaning that they allow 

for identification of threats in the maritime domain while protecting sensitive and classified communications and allowing effective control of deployed assets. 

What is remarkable and completely unacceptable is that a program costing on the order of $100 million intended to upgrade 110 

foot legacy cutters, lengthen them to 123 feet and extend their 

service lives has produced eight cracking hulks that are now tied 

up within a few miles of my house in Baltimore, unable to return 

to service and waiting for the scrap heap. 

And guess who paid for them. The American people. 

What is unconscionable is that the simple and straightforward 

expectations of Congress and, more importantly, the American taxpayers have not been met because of a combination of poor oversight by the United States Coast Guard and poor performance by 

two of the world’s largest defense contracts, Lockheed Martin and 

Northrop Grumman. 

7

I applaud the action taken yesterday by Admiral Thad Allen, the 

Commandant of the United States Coast Guard to begin to right 

what has become a floundering acquisitions effort veering far, far 

off course. I believe that this decisive leadership will put this program on a path to success. 

However, though the Commandant has taken bold steps to bring 

the systems integration functions back in-house, to rebid parts of 

the Deepwater contract and to ensure that assets are independently certified against highest industry standards, it is essential 

that we learn the lessons of the past five years of Deepwater implementation so that past errors are never repeated. 

I have said it before, and I will say it again. This is a Country 

that is able to send folks to the moon. We ought to be able to build 

ships that float. 

Today, therefore, we examine the 123 program. We will take a 

close look at all of the actions of the Coast Guard and its partner, 

the integrated Coast Guard systems team that contributed to the 

colossal failure of the program. We want to know why the Coast 

Guard and its partners went ahead with a design to lengthen the 

110 foot cutters despite warnings from the United States Navy that 

the hulls should have been strengthened before they were lengthened, warnings based on the Navy’s own experience lengthening 

the 170 foot Cyclone Class ships to 179 feet. 

We will also closely examine whether the equipment installed inside the converted 123 foot boats met all contractual requirements 

and was designed to ensure safety of the crews, and I emphasize 

that, safety of the crews. We want to make sure that Coast Guard 

personnel are safe. 

Further, we want to examine whether the C4ISR Command and 

Control System was properly certified to ensure the protection of 

national security data. 

I applaud the willingness of the dedicated individuals, who 

worked in various capacities in the Deepwater program, to come 

forward today to share their concerns about what they experienced 

on that program and about the actions taken by managers leading 

the program. 

The Committee’s investigation also received critical assistance 

from an outside expert on TEMPEST process who has dedicated 

countless hours of his own personal time to analyzing TEMPEST 

certification process on the 123s. 

I thank Michael DeKort, Robert Braden, Scott Sampson and 

James Atkinson for their dedication to excellence. 

Our Committee shares their dedication. Therefore, while we examine what must be done to ensure the success of Deepwater, we 

also will be examining what must be done to build acquisitions systems and develop experienced management personnel within the 

Coast Guard who can assure that a single dollar is never, ever 

wasted in the procurement of a ship or plane for the Coast Guard 

fleet. 

With that, Mr. Chairman, I yield back. 

Mr. OBERSTAR. I thank the gentleman for his very strong statement and again for his very diligent work. 

I yield now to the gentleman from Ohio, the Ranking Member of 

the Subcommittee, Mr. LaTourette. 

8

Mr. LATOURETTE. I thank you very much, Mr. Chairman, and I 

will try to move along expeditiously. I want to thank you and 

Chairman Cummings for holding this hearing. 

I have to say that I come to this hearing with a deep concern 

over the future success of the Deepwater program. As I indicated 

at the Subcommittee hearing in January, there is no more important issue facing the Coast Guard now than the delays and setbacks that are jeopardizing this program. 

This hearing today is going to focus on the conversion of the 110 

foot patrol boat fleet, and I believe that we will use this hearing 

to examine the roots of the problems that resulted in this failure, 

and I hope that what we look at is how the Coast Guard can apply 

the lessons learned to future acquisition projects. 

The original Deepwater contract, which has now run a number 

of years, established performance requirements for each asset and 

component system. It appears that in too many cases, the responsibilities to oversee, test and certify the construction and performance of these assets and systems was invested in the contractors 

and not the Coast Guard. 

The Coast Guard has addressed these issues under Commandant 

Allen’s direction that was announced just yesterday, and I have 

confidence that the Coast Guard will take much more active role 

in reviewing and ultimately approving or disapproving asset designs, performance testing and compliance with contract requirements. 

While I appreciate the Commandant’s new directives and willingness to address past problems, I remained concern by the number 

and nature of problems that seem to come to light every time this 

Committee holds a hearing. It appears that there were several opportunities to make significant changes to the design and the structure of the 123 foot patrol boat hull and that the Coast Guard 

chose not to take those corrective actions. 

As a result, the Coast Guard took possession of eight vessels that 

can’t be used for any mission by the Coast Guard and are now 

scheduled to be scrapped. The loss of these eight vessels and the 

impending delay in requiring more capable vessels hurts the Coast 

Guard’s ability to safeguard and secure our Nation’s waters and 

jeopardizes the safety of Coast Guardsmen that serve aboard increasingly aged and deteriorating vessels. 

I am further concerned by the apparent lack of control procedures that allow a contractor to install and self-certify component 

systems that have not been tested against industry or military 

standards. The Coast Guard is responsible for ensuring that the assets and systems that it accepts meet all terms and conditions of 

the contract and all relevant performance specifications. 

Under the Commandant’s new directions, the Coast Guard will 

take on additional responsibilities to verify compliance. I can’t emphasize enough how critical these new responsibilities are for the 

future of the service. 

The Deepwater program and the assets that will acquired under 

Deepwater are critical to the Coast Guard’s future mission success. 

The men and women of the Coast Guard carry out brave and selfless service to our Nation each and every day, and we need to make 

sure that the Deepwater program is carried out in a way that the 

9

best, most capable equipment is acquired to allow these Coast 

Guardsmen to carry out their important missions. 

I want to thank the witnesses for appearing today. 

Mr. Chairman, on the way over from my last series of votes, I 

mentioned some matters to Subcommittee Chairman Cummings, 

and I am not going to bring those up at this moment, but they do 

relate to issues that Mr. Mica was addressing. I hope that maybe 

the four of us could have a conversation in the future about some 

of those things. 

I thank you for your courtesy and yield back the balance of my 

time. 

Mr. OBERSTAR. I thank the gentleman for his statement, for his 

ever public spirited concern about the work of this Committee. 

We have had some difficulties in proceeding with this hearing because we requested on March 20th documents from the Coast 

Guard. We did not get what we were requesting until April 6th and 

not until Subcommittee Chairman Cummings met with the Commandant did we get at 5:00 p.m., on Friday, April 13th, the full set 

of documents that we requested much earlier. That hampered and 

made difficult the task of structuring this hearing and getting the 

information we needed. So there have been some difficulties along 

the way. 

We made our best effort to include the Republican side in this 

process and gave to staff the names of witnesses right at the outset 

and how to contact and invited minority staff to conduct their own 

individual inquiry. 

Mr. LATOURETTE. Will the Chairman just yield? 

Mr. OBERSTAR. Yes, I will yield. 

Mr. LATOURETTE. I think the Chairman and the full Committee 

know that there is no member of Congress that I have greater respect for and even affection for than the Chairman. My invitation 

was that maybe as we move forward we can do a little bit better 

in talking to each other. 

Mr. OBERSTAR. Always, we always can do better, and we will. 

Mr. LATOURETTE. Thank you. 

Mr. OBERSTAR. Now I ask all witnesses to rise. 

Do you solemnly swear to tell the truth, the whole truth and 

nothing but the truth, so help you, God? 

[Witnesses respond in the affirmative.] 

Mr. OBERSTAR. Thank you. 

Mr. DeKort, we will begin with you. We welcome your statement. 

Again, I say that you have provided enormous service to the public 

and to the Committee, and I think in the long run, the Coast 

Guard, by the work that you have done. 

Please proceed. 

10

TESTIMONY OF MICHAEL DEKORT, FORMER PROJECT MANAGEMENT SPECIALIST FOR 123 SYSTEMS, LOCKHEED MARTIN; ROBERT BRADEN, SENIOR TECHNICAL STAFF, PROCESSOR AND SYSTEMS DESIGN, LOCKHEED MARTIN; SCOTT 

SAMPSON, SECTION CHIEF OF THE DEVELOPMENT SECTION, 

U.S. COAST GUARD MAINTENANCE AND LOGISTICS COMMAND ATLANTIC IN THE VESSEL SPECIFICATIONS BRANCH; 

JAMES ATKINSON, PRESIDENT AND SENIOR ENGINEER, 

GRANITE ISLAND GROUP. 

Mr. DEKORT. Thank you, Mr. Chairman, for that comment. 

Good afternoon, Mr. Chairman and members of the Committee. 

I deeply appreciate your taking the time to hear testimony on the 

C4ISR problems relating to the Deepwater effort. 

While I will be highlighting the C4ISR issues, I am sure you realize that they are only examples of the systemic engineering and 

management problems associated with this effort. The problems I 

will be describing are not simply mistakes. They were informed, deliberate acts. 

As I will show, I have been trying to resolve these problems for 

almost four years after not being able to convince every level of 

management of every relevant organization in Lockheed Martin 

through to the CEO and board of directors, and I believe there is 

a timeline up that shows some of that information. As well as 

working with integrated Coast Guard systems, I turned to the appropriate Government agencies, public officials, whistleblower organizations and when all else failed, the internet and the press for 

help. 

What needs to be understood here is that every one of these 

problems was easily resolved with off the shelf products well before 

any of the assets were delivered. Additionally, as the contract mandates system commonality, every one of these problems is a candidate for inclusion on every other maritime asset that ICGS delivers for the lifetime of the contract. This plan, if allowed to come 

to fruition, will literally cripple the entire maritime fleet of the 

U.S. Coast Guard for decades. 

Before delving into the issues, I would like to tell you a little bit 

about my background. I was an electronics technician in the U.S. 

Navy for six years. I specialized in communications systems. After 

my enlistment ended, I spent a brief time in the private sector before I joined the U.S. State Department as a communications engineer for embassy and consular duties as well as for the 

counterterrorism group. 

After leaving that organization, I became a systems engineer in 

Lockheed Martin. Through the years, I was promoted to project, 

program and engineering manager. During my last five years, I 

was a software project manager for Aegis Baseline 6/3, the lead 

systems engineer of C4ISR for the Deepwater effort and the software engineering manger for the NORAD efforts. It is the period 

where I held the C4ISR lead systems engineer position that is the 

focus of this testimony. 

At the point I joined the effort in the summer of 2003, the final 

design review had been completed, and most of the equipment had 

been purchased for the first several boats. In addition to creating 

a master schedule, I was tasked with identifying final deliverable 

11

requirements and planning integration of the first boats. It was 

during this period that several critical safety and security issues 

came to my attention. 

The first problem was that we had purchased non-weatherproof 

radios for the Short Range Prosecutors or SRPs. The boats are 

small open aircraft that are constantly exposed to the environment. 

Upon first hearing about this issue, I have to admit I found it too 

incredible to believe. Who would put a non-weatherproof radio, the 

primary means of communication for the crew, on a boat with no 

protection from the elements? 

The individual who brought this to my attention strongly suggested I look into it no matter how incredible it sounded. I called 

the supplier of the radio who informed me it was true. We had purchased four radios for the first SRPs, and they were not weatherproof. As a matter of fact, the vendor asked me to not use the radios on any of the SRPs which would eventually total 91 in all. 

Upon informing Lockheed management that the radios needed to 

be replaced, I was told that there was a design of record. This 

meant the customer had accepted our design at the conclusion of 

the critical design review and that we would make no changes that 

would cause cost or schedule impacts. As a matter of fact, we ordered five more radios after I went to management about the problem in order to prepare for the next set of boats we were contracted 

to modify. 

I tried for several months to get the radios replaced. 

Just before delivery of the first 123 and its associated SRP, the 

customer asked to test the system. Coincidentally, it rained on test 

day. During the testing, several radios shorted out. It should be 

noted that had we not tested the boats in the rain on that day, we 

would have delivered that system, and it would have failed the 

very first time it was used. 

After this, I was told we would go back to the radio that originally came with the SRPs. 

I believe that this example more than any other demonstrates 

the lengths the ICGS parties were willing to go to hold to schedule 

and budget while sacrificing the safety and security of the crew. 

The next problem uncovered involved the video surveillance system. The Coast Guard wanted a system that would permit watching the boats when in a Coast Guard port without someone having 

to be physically on the boats. Our solution was to provide a video 

surveillance system that had significant blind spots leaving the 

bridge or pilot house vulnerable to penetration. 

The most frustrating part about this issue is that the simple purchase and installation of a fifth camera would have resolved the 

problem. Bear in mind, we knew about the need for the extra camera several months before the first 123 was delivered. 

Another problem we discovered involved low smoke cables. There 

was a requirement to install low smoke cables so that in case of 

a fire, flames do not spread quickly, equipment is not overly exposed to corrosive smoke and the crew is not exposed to a large 

amount of toxic fumes. In a recent report, the Inspector General for 

the Department of Homeland Security confirmed that over 80 of 

these cables are the wrong type and that the waiver the Coast 

12

Guard gave to the contractor so they could avoid having to provide 

these cables was invalid. 

The next issue involved communications security and the standards necessary to ensure those communications are safeguarded 

from the eavesdropping or inadvertent transmission of crosstalk. 

These standards are known as TEMPEST. We installed non-shielded cables, 101 in all, on all of the 123s, cables that did not meet 

standard TEMPEST safety and security requirements as borne out 

by their failing of the visual inspection which was carried out by 

the appropriate testing authority. 

This situation could lead to serious compromise of secure communications not only for the Coast Guard but for other Government 

organizations such as DOD, FBI and DEA. I was informed that we 

had included these cables in the design because we had not bid the 

TEMPEST requirement and, as such, we decided we did not have 

the money to include them. 

The final significant problem was that of the survivability of the 

external mounted equipment. I saved this one for last because of 

how serious the repercussions are for the Coast Guard and the Nation, the fact that the DHS IG agreed completely with my allegation relative to this issue, the incredible position Lockheed Martin 

has taken on this issue and the fact that the Coast Guard seems 

willing to allow them to get away with it. 

Shortly before the first 123 was delivered, we finally received the 

environmental requirements. During the late review of the requirements --I am sorry --of the equipment for compliance, well after the 

design review and purchase of the equipment, we found the very 

first item we looked into would not meet environmental requirements. Given this failure, we feared the rest of the equipment may 

not meet environmental requirements. 

Let me state this in simple terms. This meant the Coast Guard 

ships that utilized this equipment would not operate in conditions 

that could include heavy rain, heavy seas, high winds and extreme 

temperatures. 

When I brought this information to Lockheed management, they 

directed me and my team to stop looking in to whether or not the 

rest of the equipment met these requirements. This meant that all 

of the externally mounted equipment being used for the critical 

communication, command and control and navigation systems 

might fail in harsh environments. Since that time, we have learned 

through the DHS IG report on the 123s that 30 items on the 123s 

and at least a dozen items installed on the SRPs did not meet environmental requirements. 

In addition to their technical and contractual findings, the IG 

also made some of Lockheed Martin’s responses on this issue 

known in that report. Incredibly, the IG states that Lockheed Martin incorrectly stated in their self-certification documents that 

there were no applicable requirements stipulating what the environmental requirements were in regard to weather, and they actually stated that they viewed the certification of those requirements 

as ‘‘not really beneficial.’’

In addition, the IG states that the Coast Guard did not know the 

boats were non-compliant until July of 2005, one and a half years 

after the first 123 was delivered. The report also states that none 

13

of these problems were fixed, not on any of the delivered boats. 

That, along with this issue not being called out in the DD-250 acceptance documents, supports my supposition that Lockheed Martin purposefully withheld this information from the Coast Guard. 

Finally, the IG states that Lockheed’s position on them passing 

the self-certification without testing these items was the right 

thing to do because they thought the tests would be ‘‘time consuming, expensive and of limited value.’’ Bear in mind that the 

contractors have stated time and time again in front of this and 

other oversight committees that they do not practice self-certification. 

Where does this situation leave us? Had the hulls not cracked or 

the cracks not appeared for some time, ICGS would have delivered 

49 123s and 91 SRPs with the problems I described. 

In addition to that, the Deepwater Project is a system of systems 

effort. What this means is that the contractor is directed to deliver 

solutions that would provide common equipment sets for all C4ISR 

systems. Said differently, all the equipment for like systems need 

to match unless there is an overwhelming reason not to. 

This means that every faulty system I have described here will 

be installed on every other maritime asset delivered over the lifetime of the effort. This includes the FRCs, the OPCs and the NSCs. 

If we don’t stop this from happening, ICGS will deliver assets with 

these and other problems. I believe this could cripple the effectiveness of the Coast Guard and their ability to perform their missions 

for decades to come. 

How have the ICGS parties reacted to the totality of these allegations? At first, Lockheed and the U.S. Coast Guard, as stated by 

the ICGS organization, responded to my allegations by saying they 

were baseless, had no merit or that all of the issues were handled 

contractually. That evolved after the IG report came out to them, 

stating that the requirements had gray areas and later by actually 

deciding, after the systems were accepted and the problems were 

found, that in some cases the Coast Guard exaggerated their needs 

as was their comment regarding the environmental survivability 

problems. 

Up until the announcement yesterday, I have heard a lot of discussion about the changing of the ICGS contract structure, the fixing of the requirement, reorganizing the Coast Guard and adding 

more oversight. While all of those things are beneficial, they in no 

way solve the root problem. Had the ICGS organization listened to 

the Engineering Logistics Center or ELC and my recommendations, 

there would be no problems on these boats. We wouldn’t be talking 

about more oversight or making sweeping changes. Instead, we 

would be discussing what a model program Deepwater is. 

I guarantee you that had the changes that were made up until 

yesterday, yesterday’s announcement, been made four or five years 

ago, it wouldn’t have mattered. Even with the incestuous ICGS arrangement, the less than perfect requirements and minimal oversight, there was plenty of structure in place and information available to do the right thing. It is not practical to think that one can 

provide an ironclad set of requirements and an associated contract 

that will avoid all problems. 

14

All that was needed were leaders who were competent and ethical in any one of the key contractor or Coast Guard positions. Any 

one of dozens of people could have simply done the right thing on 

this effort and changed the course of events that have followed. It 

is because of that that I strongly suggest you shift, suggest you 

focus, your focus shift to one of accountability in an effort to provide a deterrent. 

No matter what structure these parties put in place, no matter 

what spin they come up with or promises they make, no matter 

how many people you spend taxpayer dollars to employ to provide 

more oversight, it still comes down to people. We wouldn’t need 

more oversight if the ICGS parties would have done as they promised when they bid the effort. 

They told the Coast Guard: We know you have a lack of personnel with the right skills. Let us help you. Let us be your trusted 

agent. Let us help write the requirements so we can provide you 

cutting edge solutions. Let us write the test procedures and selfcertify so we can meet the challenges we all face in a post-9/11 

world. 

In the end, people have to do the right thing and know that 

when they don’t, the consequences will be swift and appropriate. I 

strongly believe that especially in a time of war the conduct of 

these organizations has been appalling. 

As such, I would hope that this Committee and other relevant 

agencies with jurisdiction will do the right thing and hold people 

in these organizations accountable. All defense contractors and employees of the Government need to know that the high ethical 

standards, high ethical standards are not matters of convenience. 

If you do not hold these people and organizations accountable, you 

will simply be repackaging the same problems and have no way of 

ensuring the problems don’t happen again on this or any other effort. 

In closing, I am offering to help you, help in any way I can to 

remedy these issues. As I told the Commandant, Commandant Allen’s staff and Lockheed Martin before my employment was terminated, I want to be part of the fix. With the right people in place 

in the right positions, this project can be put back on track rapidly. 

I would like to thank you again for the opportunity to testify and 

look forward to answering your questions. 

Mr. OBERSTAR. Thank you very much for a very thorough, 

thoughtful and well structured statement. 

Mr. Braden, would you identify yourself and then proceed with 

your statement? 

Mr. BRADEN. Yes. Thank you, Mr. Chairman and members of the 

Committee. 

My name is Robert Braden, and I have over 40 years of engineering experience including nearly 30 years of service with Lockheed 

Martin Corporation. I am currently employed by Lockheed as a 

senior technical staff at Moorestown, New Jersey. In this position, 

I am often expected to provide program and project leadership for 

a variety of programs. 

In early 2003, I was requested to join the U.S. Coast Guard 

Deepwater program as a lead system engineer for the Communication Area Master Stations or CAMS and Legacy Cutter program. 

15

That program was to do upgrades of three different classes of cutters that did not include the 123s. Program objectives were to provide enhanced satellite communications and modern C4ISR systems for these existing Legacy assets. 

This included installations, upgrades and new capabilities for 39 

existing Legacy Cutters. We provided significantly improved satellite bandwidth, improved shipboard networks, new law-marine 

radios, new Automatic Identification Systems and expanded secret 

internet protocol router networks, or SIPRNET, communications 

capabilities. These improved SIPRNET capabilities provide the 

Legacy fleet with the ability to significantly improve coordination 

with law enforcement and homeland security actions with the U.S. 

Navy and within the Coast Guard. 

After completing the total replan of the program, we submitted 

an aggressive fixed price proposal to the Coast Guard. Unfortunately, the Coast Guard contracting office continued to extend negotiations all the way to the end of the fiscal year. This required 

Lockheed Martin to either stop work or independently fund the 

continued engineering and procurement of our long lead material. 

Lockheed elected to support the aggressive Deepwater deployment 

objectives of Admiral Stillman and provided several million dollars 

of internal risk funding to allow my team to obtain the material, 

integrate the system and prepare for the first installations. 

During this same period of development and design, I was engaged in intensive dialogue with my Coast Guard contracts technical representative, with the Coast Guard’s ships integration personnel and with the Coast Guard’s top communications security organization known as TISCOM. 

The purpose was to determine and negotiate all requirements for 

the CAMS/Legacy installations. Our key objective was to provide a 

communications installation that would immediately achieve a 

SIPRNET Interim Authority to Operate followed shortly thereafter 

by a full Authority to Operate. The reason that was important was 

that these ships were in port for a limited period of time. When 

those ships left port, our installation needed to allow the crew to 

immediately use the new secure capabilities. 

I was also fully engaged in weekly program integration meetings 

involving all Moorestown management of the Deepwater program. 

These PIT meetings were mandatory every week and covered all 

aspects of the program and included at every meeting, U.S. Coast 

Guard representatives and generally included representatives from 

the ICGS or Integrated Coast Guard Systems organization. The 

purposes of the meetings were to ensure coordination among the 

various programs and maintain commonality among all the assets. 

Topics included status of the system of systems activities, the 

CAMS/Legacy Cutter upgrades, the 123 foot cutter conversion program and the other various assets. 

Approximately once each month, the PIT meetings, Program Integration Team meetings, would expand to a full Deepwater program review with all management present, and that usually included the ICGS, the different subcontractors as well as the Coast 

Guard officers. 

On numerous occasions, I presented the design, installation and 

security briefings appropriate to my cutter class to ensure coordinaVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
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tion of our CAMS and Legacy plans. During these PIT meetings, 

the various LSEs or Lead System Engineers would become aware 

of the problems and issues faced by their counterparts. So part of 

the purpose of the meeting was to make sure we compared notes 

and make sure that we all met a common design. We would occasionally compare notes to see if a common resolution to our problems were possible. 

Often, the aggressive pace of my own project and the structure 

of the Deepwater program required that my team maintain focus 

on our own design issues. However, whenever I found an issue that 

concerned me and I was unable to influence a change, I would advise upper management of the problem. 

In August, 2003, my team began upgrades of the CAMSLANT or 

master station Atlantic facility and installation of the first Deepwater sea-based asset, the U.S. Coast Guard Cutter, Northland. We 

completed these installations within one month, thereby establishing the milestone of the first successful asset delivery to the 

Coast Guard Deepwater program. By year end, we followed this 

achievement with a successful installation of the Deepwater C4ISR 

suite aboard the cutter Tampa. 

The subsequent string of successful installations has been a continuing source of personal satisfaction for my design and installation team, and I personally take great pride in expeditiously and 

cost effectively completing the first successful and compliant Deepwater installations in the history of the program. 

I continued to manage and guide the installation of the first nine 

270 foot Legacy Cutters and developed the design and installation 

procedures for the remaining 210 and 378 foot cutters. In March, 

2004, I was removed from the Deepwater program and transferred 

to another program. 

This concludes my testimony. I would be pleased to answer any 

questions the Committee may have. 

Mr. OBERSTAR. Thank you, Mr. Braden. 

Mr. Sampson, please identify yourself and proceed with your testimony. 

Mr. SAMPSON. Good afternoon, Congressman Oberstar, Congressman Cummings and distinguished Committee and Subcommittee 

members. 

My name is Scott Sampson. I have been requested to come before 

you today to discuss my involvement with the 123 program as associated with the Deepwater program. 

I have a unique perspective of this program in that I work for 

the DOD agency which expressed grave concern about a potential 

extension of a 110 foot patrol boat to 123 feet, then changed jobs 

to work for a Coast Guard office which supports these modified cutters. Today, I will tell you about the people I communicated my 

concerns to that were unfortunately realized. 

If I may request, Mr. Chairman, I would like my written statement entered into the record. 

Mr. OBERSTAR. Without objection, so ordered. Your statement 

will be included in the record. 

Mr. SAMPSON. Thank you, sir. 

The DOD agency I worked for was the Combatant Craft Division, 

a detachment of the Naval Surface Warfare Center Carderock DiviVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
17

sion, otherwise known as CCD. CCD had designed a similar extension on a similar platform and felt, based on lessons learned, that 

the proposed method of modification of the 110 was at a high risk 

for failure. 

While I was with CCD, three key contacts were made to express 

concerns over the proposed design modification. The first was Debu 

Ghosh of the Coast Guard’s Engineering Logistics Center. Mr. 

Ghosh was the Branch Chief of the Boat Engineering Branch. Second was Diane Burton of the Coast Guard’s Deepwater Program 

Office. Ms. Burton was the Deepwater Surface Technical Director. 

The third person that was contacted was Dennis Fanguy of 

Bollinger Shipyard. The Fanguy was the head of their engineering 

department. 

These conversations were conducted in the August to September, 

2002 timeframe with the exception of Mr. Fanguy who was contacted shortly thereafter. 

It was explained to each of these individuals not only concerns 

associated with the proposed modification of the 110 but where 

those concerns stem from as they pertain to a similar experience 

with a Navy craft. These concerns centered around several items 

but specifically included longitudinal strength, running trim and 

engineering experience. 

Mr. Ghosh appeared to share our concerns and attempted to hire 

Combatant Craft to assist with oversight. Specifically, Mr. Ghosh 

requested and I provided a statement of work and an estimate to 

provide 14 days of on site support at Bollinger shipyard, assisting 

the two naval architects and also to supply a sea keeping analysis 

comparing the 110 to the 123. The estimate for this level of support 

was $42,000. 

Mr. Ghosh told me shortly thereafter that the Deepwater Program Office would not supply the funding. 

Conversations with the other two contacts, Ms. Burton and Mr. 

Fanguy were short and with little discussion. 

The Matagorda was inducted into Bollinger Shipyard on the 2nd 

of February, 2003. On the 5th of March, 2004, the MATAGORDA 

was delivered back to the Coast Guard and on the 10th of May, 

2004, entered a Post Delivery Maintenance Availability. Within 

days of leaving this availability in the early part of September, 

2004, Matagorda suffered damage in the middle of the cutter, buckling the side shell and deck. 

This is the type of longitudinal failure that the Combatant Craft 

Division anticipated seeing and had warned the Coast Guard and 

Bollinger Shipyard about. This predicted failure occurred not as a 

result of fatigue or corrosion but rather from one short period of 

operation in a sea reported to be four to six feet in height. This longitudinal bending failure was acknowledge in a report issued by 

ELC entitled Matagorda Buckling Incident Analysis dated 24 September, 2004, and verified our concerns expressed in August of 

2002. 

After two attempts to make the 123s usable for service, the Coast 

Guard made the decision to lay the vessels up until a final decision 

could be made as to whether or not they could be repaired. The 

Coast Guard made this decision after extensive inspection of the 

18

cutters. All eight cutters are currently located at the Coast Guard 

Yard. 

Mr. Chairman, this concludes my statement. I will be more than 

happy to answer any questions you may have. 

Mr. OBERSTAR. Thank you very much, Mr. Sampson. That is very 

critical testimony for the inquiry of the Committee. 

I have heard a couple of cell phones or other devices going off. 

Under the Committee rules, all communication devices must be inaudible. Turn them off or put them on vibrate. 

Mr. Atkinson, you may feel free in your remarks to respond to 

the issues raised by Mr. Mica earlier. 

Mr. ATKINSON. Thank you, sir. 

My name is James Atkinson. I am the President and Senior Engineer of Granite Island Group located in Gloucester, Massachusetts. 

We specialize in electronics engineering. We perform bug sweeps. 

We perform wiretap detection. We stop technical espionage. We 

plug leaks both in classified and unclassified communications systems. Essentially, we hunt spies. 

I am considered to be one of the top international experts on the 

subject matter of TSCM, TEMPEST and technical security. I have 

attended private and Government-sponsored TSCM, TEMPEST, 

cryptograph, technical intelligence, electronics and security training both in the United States and abroad. I have been involved in 

many hundreds of TSCM, TEMPEST inspections over the last 25 

years of Government service and private sector assignments. 

My clients include major heads of major corporations, heads of 

state, diplomats, Government agencies, defense contractors, hospitals, courthouses, political leaders, ministers, small business, 

large ministers in virtually walk of our Country. 

Due to the nature of my, of the services I render to my clients, 

it would not be prudent to disclose precisely who they are. However, I have been to Washington, D.C. many times on business to 

render such services. 

I am one of the few people who can clearly explain the highly 

technical and highly classified subject matters such as TEMPEST 

and TSCM to this Committee in an unclassified way so that a nontechnical layman can understand it, and I can provide a voice of 

reason. 

The documents in this matter are highly technical, and it takes 

a TEMPEST and TSCM expert to fully understand what is really 

in those documents, what it really represents and what they really 

mean and to bring forth the gravity of what is really going on. 

The core message here is that TEMPEST is a rigorous series of 

Government standards which have been developed by the National 

Security Agency. The purpose is to protect classified equipment, 

signals and information from eavesdropping. TEMPEST focuses on 

securing classified equipment and systems in order to keep electronics from leaking secrets. 

Our foreign adversaries know about TEMPEST and the related 

fields and know how to steal our electronic secrets from equipment 

that does not comply with these rigorous standards. For example, 

the nations of Cuba, Iran, India, China, Colombia, France, North 

Korea and many other countries have become quite adept at eavesVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
19

dropping on our improperly protected classified equipment. While 

most countries are our allies, the United States has designated 

over 30 nations to be openly hostile to the United States, and there 

is strong evidence that these countries not only do have the equipment to eavesdrop on our leaking equipment but do so on a regular 

basis. 

Gentleman, it is my unpleasant duty to inform you that the 

Coast Guard, ICGS and Lockheed Martin have been highly negligent in their oversight of the Deepwater program, that many millions of dollars has been wasted on ships that don’t float and electronics, classified electronics which leak national security secrets. 

During my review of the technical documents in this matter, I 

discovered that the United States Coast Guard was not being forthcoming with information to this Committee and that the Department of Homeland Security Office of Inspector General had previously requested in regards to C4ISR and TEMPEST issues. I 

found that instead they were hiding malfeasance within these documents and a deeply flawed procurement process. 

Further review determined that there was significant lack of 

oversight on the part of the United States Coast Guard and that 

they were using doublespeak in their answers to this Committee 

and evading politically uncomfortable questions put before them. 

Based on the analysis of the numerous documents to include detailed TEMPEST reports which the Coast Guard eventually, albeit 

begrudgingly, provided to the Committee, I was able to determine 

the following: 

From the very beginning, the very first day of the program, the 

Coast Guard did not clearly define the technical specifications and 

standards that these ships had to comply with in order to protect 

the classified information. The contractor, in turn, delivered substandard and highly defective assets as there was little or no Coast 

Guard oversight on the project even though the Government was 

paying the contractor to provide oversight as the integrator. 

The Coast Guard accepted delivery of these defective ships and, 

instead of correcting many of the defects, merely covered them up 

with waivers or used substandard parts to create the illusion of a 

repair. An example is unclassified and classified local area network 

connection boxes were supposed to be separated from each other. 

The Coast Guard chose to resolve this problem merely by putting 

stickers on the equipment as opposed to fixing it. So they patched 

a leak with a Post-It note. 

Not only has the contractor responsible for this waste butchered 

eight valuable ships and rendered them worthless, they have endangered national security in delivering ships that leak secrets, 

contain significant vulnerabilities and which provide a clear and 

present danger to our national security. The Coast Guard was and 

still is spending money like a drunken sailor on shore leave with 

minimal oversight. The Coast Guard lacks the core competencies 

and resources to protect this classified information through their 

TEMPEST program. ICGS has taken advantage of the United 

States after 9/11 and has taken advantage of the Coast Guard in 

particular. The Coast Guard put more priority on its public relations than it did with their TEMPEST program. 

20

My recommendations is that this Committee pull the plug on the 

Coast Guard’s access to classified information, that it revoke 

SIPRNET access and essentially revoke the Coast Guard’s security 

clearance. This should be done by the end of business today. 

Also, I recommend that you initiate an exhaustive top-down 

study of all COMSEC, Coast Guard COMSEC, TEMPEST, NONSTOP, TSCM, emission security and related technical security and 

engineering disciplines and focus on all assets of the Coast Guard 

not just the Deepwater ships. 

I recommend that this Committee assume every Coast Guard 

asset is suspect until it can be scientifically proven secure through 

actual instrumented analysis and not just waivered as has been the 

case of late. 

I recommend that all eight cutters be stripped of anything of 

value and that they be sold off as scrap metal, cancel or suspend 

all current or upcoming contracts with ICGS and Lockheed Martin 

until this matter can be fully resolved and consider issuing an interim debarment against Lockheed Martin and ICGS until their 

full management has been forthcoming with appropriate answers. 

Also, refuse to allow the Coast Guard to possess, access, obtain 

materials or gain access to any classified networks until each asset 

has been subjected to a rigorous and independent, highly detailed 

technical inspection by somebody outside of the Coast Guard. 

Refuse to allow the Coast Guard to purchase any further tactical 

or Deepwater assets unless other elements of the United States 

Government provide very close oversight over the specifications, designs and procurement of such systems. The natural agency to assist the Coast Guard with this would be the U.S. Navy who should 

handle the procurement and oversight of the Coast Guard assets 

until such time the Coast Guard is competent and can be trusted 

to do this themselves which they have not been able to of late. 

Identify the command level officers within the Coast Guard who 

had the ultimate responsibility for the oversight of this program 

and then remove them from any further Government service. 

Finally, we have to assume that the Department of Homeland 

Security is not competent in these matters and that their lack of 

oversight is widespread and institutionalized. 

Patrick Henry stated years ago that we are apt to shut our eyes 

against a painful truth, but for my part I am willing to know the 

whole truth, to know the worst of it and to provide for it. 

Gentleman, this project was doomed to fail from the very beginning. When modern electronics operate, they generate electromagnetic fields. Digital computers, radios, typewriters and so on 

generate tremendous amounts of electromagnetic energy. Compromising emanations is that electromagnetic energy. This can be conducted through the airwaves, over the power lines, over the phone 

lines, cable TV. 

The TEMPEST standards are very rigid as to how these emanations are controlled. The Coast Guard completely disregarded all 

of these specifications except one, and the one which they chose to 

pay attention to, they evaded on it significantly. 

Most of consumer market equipment leaks significantly. However, if somebody’s computer leaks a little bit of information, they 

may have personal embarrassment. If a National Security Cutter 

21

or a Coast Guard Cutter or a B2B Bomber or other tactical equipment leaks, national security is at risk. 

This project was doomed to failure. It boils down to two core 

issues, a lack of oversight and malfeasance. 

On the issue of my mission statement, the mission statement 

was actually published many years ago. It says that I hunt spies 

and I hunt bad people. That is what it says. 

Lockheed Martin has a real problem with this because that issue 

was brought up repeatedly by Lockheed Martin previously after 

their security people were caught dealing with convicted felons to 

purchase illegal bugging equipment and to do moonlighting. This 

issue was brought up by Lockheed Martin and provided to the 

Coast Guard. I have a full audit trail from my web site logs of 

them doing this. 

That concludes my statement. 

Mr. OBERSTAR. Thank you very much, Mr. Atkinson. 

Mr. Atkinson has used and throughout the testimony we hear 

the word, the acronym, TEMPEST, which stands for Telecommunications Electronics Material Protected from Emanating Spurious 

Transmission. A layman’s definition might be unclassified signals 

that leak from improperly shields cables. 

You can go to Radio Shack and buy a device that can tap into 

a model that is not properly shielded and get fax information and 

get computer information from your neighbor’s home if you wish to 

do that. 

NATO electronic spies in Germany in the 1950s discovered that 

they could break into classified information by using unclassified 

signals that allowed them to trace back into the heart of technology 

in use. That is why the issue of TEMPEST is so critically important here. We will come to that later. 

We have a series of four votes on the floor. We have eight minutes remaining on the first vote. We will recess for the four votes 

and resume immediately thereafter with Mr. Cummings in the 

Chair. 

The Committee stands in recess. 

[Recess.] 

Mr. CUMMINGS. [Presiding] Ladies and gentlemen, we are going 

to resume the hearing. We left off with Mr. Atkinson had finished 

testimony. 

I want to thank our panelists for your remarks. 

I am going to start off with a few questions. 

Mr. DeKort, you mentioned in your testimony that you brought 

a number of matters to the attention of senior Lockheed management. How high did you take these issues and what responses did 

you receive? 

Mr. DEKORT. I took the matters to the CEO, Robert Stevens, on 

at least two occasions and the board of directors, and the response 

I received was that the allegations were baseless or had no merit, 

and I believe that was based on Lockheed’s contention that they 

had disclosed all the issues to the Coast Guard or resolved them 

and they were handled contractually. 

Mr. CUMMINGS. Did you ever contact the Coast Guard directly? 

Mr. DEKORT. Yes. 

Mr. CUMMINGS. Since you did that, who did you contact? 

22

Mr. DEKORT. I contacted a Commander Ciampaglio and Mr. 

Jacoby who is here. I contacted Lieutenant Commander Durr who 

was the, I believe on the Commandant’s staff at the time. I contacted a group commander of the boats in Key West, and I think 

that is it. 

Mr. CUMMINGS. What kind of responses did you receive? 

Mr. DEKORT. Well, thank you was the response I got. 

Mr. CUMMINGS. Thank you? 

Mr. DEKORT. Yes, we will look into it. 

Mr. CUMMINGS. But no thank you? 

Mr. DEKORT. They didn’t say the no thank you part. I understand your point. 

Mr. CUMMINGS. As a Lockheed employee, had you ever been involved in another Lockheed project in which the company failed to 

meet contractual requirements in the way that you describe on the 

Deepwater program? 

Had you worked on any other contracts? 

Mr. DEKORT. Not of the same type or scale, no, sir. 

Mr. CUMMINGS. What was your role in the installation of the 

TEMPEST hardware in the 123s? 

Mr. DEKORT. I was the lead system engineer for the 123s for 

C4ISR which meant that the final design, the installation was my 

responsibility and basically the final design. Like I explained in my 

statement, I came on board after the final design review, and so 

everything was pretty much locked in concrete at that point, and 

they ordered all the materials. 

The reason why the requirements were brought back up is because as I understand it, after the Rand study, the Coast Guard 

asserted a more aggressive posture in rolling out the programs because the Rand study had said, if you want 100 percent mission 

satisfaction, you have to pull back your schedule 5 or 10 years, and 

they actually recommended 10, and I believe that is what precipitated us rolling out the 123s differently than was originally proposed. 

Originally, there was something called Increment 1. Increment 1 

was the first set of requirements. When I took over the systems engineer role, they decided to deliver an Increment 0 which was a 

subset of Increment 1. So we were trying to decide what would that 

subset be and what were the requirements associated with it. Did 

we deliver them entirely, not at all, partially? 

Part of my job was to figure out what Increment 0 was. And 

then, as I was figuring out what Increment 0 was, I was asking 

then well, what is our implementation? What is it we are doing to 

resolve that requirement and where are we in going down that 

road? 

Mr. CUMMINGS. Did you all ever come to any conclusions as to 

what would be the standard? 

You just talked about the conversations you may have had, and 

I am trying to determine whether or not there was clarity at some 

point with regard to what those standards would be. 

Mr. DEKORT. Well, there was basically from the very beginning, 

sir, a difference of opinion. 

When these issues were brought forward, the response was, and 

it occurred over and over again, we have a design of record, and 

23

what that meant was we don’t want to hear it. If what you are 

bringing to me is an issue that is going to cause any schedule or 

financial problems or cost problems, we are not going to change it. 

We are not going to do anything. 

Mr. CUMMINGS. I take it you had some concerns about the way 

things were proceeding. Is that correct? 

Mr. DEKORT. Oh, yes, sir. 

Mr. CUMMINGS. What were your major concerns or fears? 

Mr. DEKORT. Well, individually, I think the issues are pretty severe. I mean it is the Coast Guard. So if you are putting equipment 

on Coast Guard vessels—and I am talking about every Coast 

Guard vessel for the next 20 years, everything that Deepwater 

does—that won’t survive the elements, okay, that is bad enough. 

You can’t use their classified systems without compromising and 

have somebody eavesdrop. 

You have low smoke cables that if they catch on fire could cause 

someone to be overcome with smoke or make the fire spread faster. 

The blind spots on the surveillance system, the blind spots were 

very, very large, and they led right up to the bridge. 

So, individually, some of those issue are pretty significant. In 

total, I don’t think it is an overstatement to say that if they continued, it would have crippled the Coast Guard. Had these boats not 

cracked or had they not cracked for some period of time, all 49 

boats would have been delivered with these issues. 

Mr. CUMMINGS. The ICGS team produced a document called 

Evaluation of TEMPEST Requirements to be Followed Aboard the 

Deepwater 123 Island Class Patrol Boat, and it was authored by 

a Jo Agat. Are you familiar with that document? 

Mr. DEKORT. Yes, sir. 

Mr. CUMMINGS. It is dated February 20th, 2003. Is that correct? 

Mr. DEKORT. Yes, sir. 

Mr. CUMMINGS. To your knowledge, were the procedures for installing the TEMPEST hardware spelled in this guide followed during the installation of the C4ISR hardware on the 123s? 

Mr. DEKORT. No, sir, the majority were not followed. 

Mr. CUMMINGS. This document, I guess this was the Bible as far 

as the guide is concerned, is that right, as to what you are supposed to be doing? 

Mr. DEKORT. Yes, sir. If I could, a little bit of history: As I understand it, going back to the beginning, there was some disagreement or lack of understanding on Lockheed’s part of what it meant 

to do TEMPEST and to have TEMPEST, and as such, as it was explained to me, it wasn’t bid or at least not entirely. 

Well, at some point, Lockheed realized that they had classified 

circuits. As soon as you put these classified circuits on a boat, you 

assume TEMPEST. It is part of the deal. It is what happens. So 

they asked an internal engineer to go tell them what they needed 

to do in order to satisfy those requirements, and keep in mind this 

is after the bid had been accepted and they had already started. 

Mr. CUMMINGS. So what you are saying is that the bid had been 

accepted. 

Mr. DEKORT. Yes. 

Mr. CUMMINGS. The requirements were not online to be met with 

regard to TEMPEST. 

24

Mr. DEKORT. They literally didn’t know what needed to be done. 

Mr. CUMMINGS. The Coast Guard did not know? 

Mr. DEKORT. No, no, no, Lockheed. 

Mr. CUMMINGS. Lockheed. 

Mr. DEKORT. Lockheed did not know, at the time they asked for 

that report internally, exactly what they needed to do to satisfy the 

TEMPEST requirement. 

Mr. CUMMINGS. That is a very strong statement you just made. 

You understand you are talking about Lockheed Martin, do you 

not? 

Mr. DEKORT. Oh, yes, sir. You don’t—I am sorry. 

Mr. CUMMINGS. Let me finish. 

You are talking about an organization that is known worldwide 

for producing all kinds of systems in this realm. You understand 

that? 

Mr. DEKORT. Yes, sir. I am saying they weren’t competent. 

Mr. CUMMINGS. I am sorry. 

Mr. DEKORT. I am saying they weren’t competent, and I can explain how they got to that position. 

Mr. CUMMINGS. Well, tell me. 

Mr. DEKORT. And this was explained to me by Mr. Bruce 

Winterstine who is on one of the panels. I was actually on the proposal team for three days. 

During that period when I came in, I had asked Mr. Winterstine 

how the bid was going to be structured, and they explained to me 

that the Moorestown group that primarily does Aegis was going to 

be the lead group and that previously to that there had been another group that was going to be involved or lead out of Eagan, 

Minnesota where the C4ISR engineers were. 

And they said, well, we are going to bid it out of Moorestown so 

we can leverage Aegis which strategically is a great idea. Aegis is 

a fantastic system. I understand why you would want to leverage 

it. 

But I told them. I said, look, you people are Aegis engineers, 

okay, and you have a software background. You need to go back to 

Eagan, Minnesota, get the C4ISR experts and have them as part 

of your team. 

And I was told no, we don’t need to do that. 

And I asked why, and they said because Aegis is difficult. We 

have been doing it for 30 years. We know what we are doing. The 

C4ISR area is easy. We will figure it out, no problem. We don’t 

need that other group. 

Okay, that is literally how it happened. It is a perfect storm, sir. 

So when you get into an aggressive bidding situation where you 

have to move out fast, you may have underbid and your staff and 

not in all cases. 

Let me say here that there are some very dedicated people, lower 

level engineers, who worked extremely hard and some who did 

have the background required, but there weren’t nearly enough of 

them, okay. So they literally shut out the C4ISR experts that they 

had in the company. 

Of course, sir, Lockheed Martin is the world’s largest defense 

contractor. They have over 100,000 employees. They have plenty of 

people, sir, who know how to do this well, and I recommended to 

25

them that they go back to Minnesota and get those people, and 

they said no. I fought the issue for three days, and they removed 

me from the proposal team. 

Mr. CUMMINGS. So, basically, what you are saying is that the 

contracted personnel and the Coast Guard personnel working on 

the C4ISR, the system, you are saying they weren’t qualified to understand TEMPEST, TEMPEST requirements? 

Mr. DEKORT. I am saying, sir, that the people who were involved 

at the time, who were working on the proposal at the time I was 

there, were not. What they were doing is since Aegis is a very large 

command and control system, a very complicated, large command 

and control system, I believe they were trying to leverage that expertise. 

The ironic part is C4ISR in these areas since it is all off the 

shelf, compared to Aegis is actually much easier to figure out. 

There is not a lot of complicated engineering. However, you still 

need to know what you are doing. 

Mr. CUMMINGS. Overall, why do you think the 123s had so much 

difficulty achieving TEMPEST certification? 

Mr. DEKORT. Because when you have 100 cables that are not the 

right type, I mean you run into problems. 

TEMPEST can be moderately difficult on a very small craft because of very tight space constraints. So a lot of engineering and 

thought has to be put into how do you co-locate systems that are 

red and black. Mr. Atkinson can explain later, but basically red 

and black are just classifications for the part of the system that is 

clear and unencrypted and the part of the system that is encrypted 

and not clear. 

Well, it is very difficult to do on a small ship, but to go the extra 

degree to not actually purchase the equipment that is very, very 

basic to TEMPEST requirements just starts you off at a very bad 

place. In DOD and the State Department, sir, everybody used the 

proper shielded cable. It was the backbone or one of the backbone 

items that you always do, and they didn’t do it because of cost. 

Mr. CUMMINGS. The Department of Homeland Security IG indicates that the contractor on the 123, Mr. DeKort, used aluminum 

mylar shielded cable as part of the cutter upgrade. The IG indicates that these cables met minimum Deepwater contract requirements for the shielded cable but do not have the mechanical durability of the braided metallic shielded cable. 

Do you know which type of cable the ICGS TEMPEST requirements document required? 

Mr. DEKORT. Again, sir, this is going to get into an area where 

even I have a TEMPEST background relative to working on cryptographic equipment and systems, but you are getting into some 

particulars that are better left to Mr. Atkinson, but I can say that. 

Mr. CUMMINGS. Well, let me ask you this. What type of cabling 

was installed on the 110s prior to their conversion? 

Mr. DEKORT. I have been unable to determine that, sir. I was 

told that they had the braided shielded cable. Not only that but 

Mr. Braden can tell you that the braided shielded cable was used 

on his effort, not on mine or on the 123s, I should say. 

Mr. CUMMINGS. Now you know Mr. Braden? 

Mr. DEKORT. Yes, sir. 

26

Mr. CUMMINGS. How did you come to know him? 

Mr. DEKORT. We were both lead. We were both system engineer 

leads of our respective parts in the project. 

Mr. CUMMINGS. So you worked with him. 

Mr. DEKORT. There were occasions, sir, that we did. Mostly it 

was in program manager meetings. We actually didn’t work side by 

side all the time. 

Mr. CUMMINGS. Okay. Now did you raise the issue of noncompliance of the topside equipment on the 123s with senior Lockheed 

management? 

Mr. DEKORT. All the way to the CEO and board of directors, sir. 

Mr. CUMMINGS. All the way up to who? 

Mr. DEKORT. The board of directors and the CEO of Lockheed 

Martin. I went up through my functional chain, the program management chain, the engineering chains and the ethics chains, all 

the way up to the CEO and board of directors. 

Mr. CUMMINGS. When you say you went up to the CEO and 

board of directors, what do you mean by that? How did you do 

that? 

Mr. DEKORT. I sent e-mails to Robert Stevens, at least two of 

them, and the board of directors, I sent a letter. 

Mr. CUMMINGS. To the entire board. 

Mr. DEKORT. Yes. Well, I sent it to a specific individual who I 

believe was the ethics officer on the board. 

Mr. CUMMINGS. Did you discuss with anyone at Lockheed the 

need for noncompliance of the topside equipment with the Deepwater contract requirements to be noted on the DD-250s? 

If so, what was the outcome of those discussions? 

Mr. DEKORT. I was told before the 123s, the first one delivered, 

the Matagorda, that every item that I had brought forth would either be repaired or clearly called down to DD-250s as being a problem. The first time I actually saw the DD-250s or was told what 

they contained was recently, and I understand it, the DD-250 for 

the Matagorda, that item does not show. 

Mr. CUMMINGS. Why was topside equipment so crucial? 

Mr. DEKORT. The topside equipment is all of the externally 

mounted equipment that supports the C4ISR systems. So for the 

communication systems, it is everything on the outside of the boat 

that you would need for the systems, usually antennas. But for 

sensors like radar, it is the radar antenna, and there is other 

equipment up there like amplifiers. 

For other vessels like the NSC and the FRC, there would be 

many, many more systems. 

Basically, the 123s had communications systems, they had sensor 

systems and they had navigation systems. So for those systems it 

was anything that those systems required to operate that was attached to the outside of the boat. 

Mr. CUMMINGS. Let me ask you something. You mentioned a moment ago the word, ethics. You said something about an ethics 

complaint or complaints. Did you file complaints? 

Mr. DEKORT. Three, there were three separate ethics investigations internal to Lockheed Martin conducted. 

Mr. CUMMINGS. Were those with regard to the issues that you 

have just mentioned here? 

27

Mr. DEKORT. Yes, sir, all of them. 

Mr. CUMMINGS. Could you just tell us in a sentence or two what 

those were now? 

Mr. DEKORT. The external equipment being able to survive the 

environment, the blind spots for the cameras, the low smoke cables 

and TEMPEST. 

The reason why the non-waterproof radio was not included is because, like I explain in my statement, they had actually swapped 

it out right before they delivered the Matagorda. So I did not include that in my ethics statement other than to say, look, any 

group who was willing to put a non-weatherproof radio in an exposed boat like that, something is wrong and something needs to 

be looked into and especially when they order more radios after you 

tell them it is a mistake. So it was an incidental item. 

Mr. CUMMINGS. What happened with regard to those investigations? 

Mr. DEKORT. The answer for the first one was literally the allegations all have no merit. They are all baseless, and we are not 

going to tell you why. 

Mr. CUMMINGS. That was a response from the ethics officer? 

Mr. DEKORT. It was from a John Shelton who was the ethics investigator for the Lockheed Martin organization out of Moorestown. 

And then after that, there were two more investigations. Every 

time they came back to me and said that my allegations were baseless, I asked who their boss was. 

Mr. CUMMINGS. Then you still tried to go a step higher? 

Mr. DEKORT. Yes, sir. 

Mr. CUMMINGS. Now would Mr. Braden or anybody else have 

known of those? 

You said you worked with Mr. Braden. Would he have known 

about that? 

We will get to him a little later. 

Mr. DEKORT. Would he have known that I necessarily filed an 

ethics? 

Mr. CUMMINGS. Right. 

Mr. DEKORT. Not that I was aware of, no, sir. 

Mr. CUMMINGS. Did you see any evidence at Lockheed? 

You mentioned a little earlier something about underbidding. Is 

this a conclusion you came to? 

Mr. DEKORT. Yes, sir. That is subjective on my part. It is an observation in being in DOD. It is aggressively bid. Projects are basically priced to win, and more often than not they turn out to be 

extremely aggressive which is usually a politically correct term for 

underbid. 

Mr. CUMMINGS. Did anybody at Lockheed ever tell you to just get 

on with it? 

Mr. DEKORT. Yes, sir. 

Mr. CUMMINGS. Is that right? 

Mr. DEKORT. Well, everybody I talked to. I mean my manager, 

my functional manager actually told me and so did some other people, but they said, you are doing the right thing here, but it is 

going to come back to bite you. 

Mr. CUMMINGS. Say that again. I am sorry. 

28

Mr. DEKORT. Several people including my manager at the time 

told me that I was doing the right thing, but it was going to come 

back to bite me. 

Mr. CUMMINGS. Your immediate supervisor? 

Mr. DEKORT. Yes, sir. 

Mr. CUMMINGS. He knew you were doing the right thing, he told 

you. 

Mr. DEKORT. That is what he told me, sir. 

Several engineers and program managers on the effort said the 

same thing. 

Mr. CUMMINGS. Now you said that you left the 123 program, is 

that right? 

Mr. DEKORT. I was removed from the program, yes. 

Mr. CUMMINGS. How did that come about and when? 

Mr. DEKORT. Roughly, January or February. I had sent an email or letter embedded in an e-mail at the time to the acting technical director for the engineering group, saying that I wanted to be 

removed from the project because they were going down a road 

that I just found intolerable. 

However, later on, I met with the VP of the organization, a man 

named Carl Bannar, and he told me everything would be resolved, 

and I said at that point, well, then I would like to recall my letter 

to be removed. If you are going to do the right thing, then I want 

to be part of the right thing. I want to see this project to conclusion. But, after that, they removed me anyway. 

Mr. CUMMINGS. My last question, Mr. DeKort, you understand 

that today you are under oath, do you not? 

Mr. DEKORT. Yes, sir, I am completely aware of that. 

Mr. CUMMINGS. You know what that means? 

Mr. DEKORT. It means I should tell you the truth. 

Mr. CUMMINGS. And that you are telling the truth. 

Mr. DEKORT. Yes, sir. 

Mr. CUMMINGS. You understand that all kinds of agencies will 

probably review this transcript and some are probably looking at 

this right now? 

Mr. DEKORT. I would hope that they do. 

Mr. CUMMINGS. Would you tell us why you have come forward? 

Did they term you a whistleblower? I guess you know that. 

Mr. DEKORT. Well, at its essence, I did not want a crew to come 

into harm’s way down the road and to know that I could have done 

something about it. It is just that simple. 

My background is Navy, State Department, counterterrorism for 

a while. I have been in DOD programs since I was 18 years old in 

one capacity or another, okay. It is just real simple. I couldn’t have 

that on my conscience. 

Mr. CUMMINGS. Thank you very much. 

Mr. LaTourette? 

Mr. LATOURETTE. Thank you, Mr. Chairman, and thank you all 

for your testimony. 

Mr. DeKort, I made a note during the latter part of your responses to the Chairman that it is your allegation that Lockheed 

Martin didn’t do the braided shielded cables, the low smoke cables, 

the proper environmental work on the topside and 360 degree camera radius because of cost. Is that your observation? 

29

Mr. DEKORT. I was told we didn’t do the TEMPEST cables, the 

shielded cables, because of cost. The rest, to some degree, is an inference. Their response consistently was we are not going to slip 

schedule. We are not going to have more budget issues. 

And, to some degree because there was a relationship with Northrop Grumman that was extremely contentious at the time, and 

I will refer to it as playing chicken, they didn’t want to fix the 

issues for any one or all of those reasons. 

Mr. LATOURETTE. I guess my question is this. My understanding, 

and we can quibble about the exact value of the contract, but this 

was about a $90 million contract to convert these 8 boats from 110s 

to 123s. 

Mr. DEKORT. Yes, sir. 

Mr. LATOURETTE. Not being in the boat business, I would think 

that the big chunk of change was probably in extending the hulls. 

That is not where the big money is? 

Mr. DEKORT. I have been told that the C4ISR proportionally was 

a larger part of the budget. I could be wrong. 

Mr. LATOURETTE. Okay, so let me get to that. Is it your understanding that low smoke cables were called for in the Deepwater 

contract that Lockheed Martin bid for? 

Mr. DEKORT. Yes. Yes, sir. 

Mr. LATOURETTE. But they were not installed? 

Mr. DEKORT. Yes, sir. 

Mr. LATOURETTE. Is it your understanding that they weren’t installed because low smoke cables cost more than the cables that 

were installed? 

Mr. DEKORT. Yes, sir. 

Mr. LATOURETTE. Is that the same with the braided shielded cables? 

Mr. DEKORT. Yes, sir. 

Mr. LATOURETTE. And the weatherization or making sure that 

the antenna on the topside is the same as that? 

Mr. DEKORT. It is more supposition because there wasn’t. I don’t 

know which one of those four issues was the overbearing reason for 

the environmental issue. What I am saying is in the others, somebody told me specifically cost. In that one, it was any one of the 

four or all four reasons. 

Mr. LATOURETTE. Just so I am clear, it is your testimony and allegation that the reason that Lockheed Martin didn’t comply with 

the specifications that were in the Deepwater contract is because 

they wanted to install cheaper stuff? 

Mr. DEKORT. Yes, sir. That is part of it, yes. 

Mr. LATOURETTE. You understand they say that is not so, right? 

So we are going to be stuck with a problem here sooner or later. 

Mr. DEKORT. Objectively, sir, if you look at the equipment that 

they wound up delivering and the equipment that I wanted them 

to deliver, the equipment that I wanted them to deliver in every 

case is more expensive. So I don’t think it is a leap. 

Mr. LATOURETTE. I guess I am trying to get expensive. They put 

some cables in. 

Mr. DEKORT. Right. 

30

Mr. LATOURETTE. You are saying that the cables that the contract called for were more expensive. Are we talking on the scale 

of millions of dollars? 

Mr. DEKORT. For the external equipment over, understand, sir, 

because it is system of systems, they were leveraging designs. So 

it very well could be millions of dollars. You know the 123 was establishing the pattern. So all the rest of the systems, they were 

contractually directed to make them common. 

So while it appears like a small issue for the 123s, understand 

that it was 49 123s and then every other boat they delivered. So 

it is millions of dollars spread out, yes, sir. 

Mr. LATOURETTE. Mr. Atkinson, to you, one, I want to thank you 

for your testimony and your charts because you truly did make the 

TEMPEST system understandable by people as dumb as I am, and 

I appreciate that. I now have an understanding. I thought that 

your explanation was a good one. 

To you, how did you get involved in this project to the point 

where you wrote us 128 or 138 pages of stuff? 

Mr. ATKINSON. Sir, I was contacted by the Committee and asked 

to provide expert guidance as to how to query properly the Coast 

Guard and Lockheed Martin because the documents which had 

been produced to date, this is dating a month ago, were not answering the questions that the Committee needed answers, and I 

was asked to assist the Committee in demanding from the Coast 

Guard the relevant documents which the Department of Homeland 

Security OIG had failed to pick up on. 

TEMPEST is a very tricky matter. It is very easy for a defense 

contractor to ignore it. It is also very easy for them to conceal their 

ignorance of it or their ignoring of it. 

And I was engaged by this Committee. I have donated my time 

to this Committee to assist this Committee in finding the truth and 

by helping the Committee identify the documents that the Committee needed to conduct its business. 

Mr. LATOURETTE. Good, I appreciate that, and I think everybody 

on the Committee appreciates your willingness to donate and volunteer your time. 

I found the questions in your amendments. I assume those are 

the questions you are talking about that people need to ask to get 

the answers that you think need to be answered. 

Mr. ATKINSON. Yes, sir. This Committee needs to ask all of those 

questions on the responsible players. 

Mr. LATOURETTE. Which brings me to the next part of my question, and that is the observations that you make in the first 36 odd 

pages of your testimony relative to the TEMPEST tests that were 

performed and how they were performed and how they weren’t performed properly and things of that nature. That comes about not 

from an inspection of the systems on the 123. That comes about as 

a result of your examination of the documents that were obtained 

from the Coast Guard? 

Mr. ATKINSON. Yes, sir. I advised the Committee on what documents to demand from the Coast Guard. The Coast Guard provided 

some of the documents, albeit reluctantly, to this Committee. I examined those documents. I found significant inconsistencies in 

31

those documents which I brought to this Committee’s attention in 

the form of my written report. 

Mr. LATOURETTE. Right, and I saw that. But I guess my question 

to you is I don’t know what people in the next panels are going to 

testify, but we have three more panels of people including the 

Coast Guard and people from Navy and so forth and so on. 

Based upon your field of study, your expertise, what you do for 

a living, if people come forward and testify under oath that, in fact, 

the TEMPEST tests were performed properly and that this system 

passed, is there any way in your opinion that they could give such 

an answer? 

Mr. ATKINSON. Could I get you to repeat the question, sir? 

Mr. LATOURETTE. No. I don’t remember the question. 

[Laughter.] 

Mr. LATOURETTE. The question is that as I read your testimony, 

you came to a conclusion that there is no way, but that this system 

wasn’t properly tested, and you go to great lengths to tell us that. 

I don’t know who is coming next. I know who is coming next. I 

don’t know what they are going to say until they say it. But based 

upon the documents that you reviewed, is there any way that you 

believe someone could sit before this Committee and say that this 

system, these systems that were installed on the 8 123s could pass 

the TEMPEST testing system? 

Mr. ATKINSON. I will make the answer very straightforward. 

Mr. LATOURETTE. I would appreciate that. 

Mr. ATKINSON. If anybody comes before this Committee and indicates that these ships protect national defense information, they 

are committing perjury. 

Mr. LATOURETTE. That is a very straightforward answer. 

Not to be lawyerly with you but since I don’t know the TEMPEST tests the way that you do and you went to great lengths to 

talk about how it is appropriate or proper to make the tests of the 

TEMPEST system. 

What I am saying is if we have somebody who comes and says, 

you know what, I tested this TEMPEST system, and it meets the 

standard in the industry, the standard in the military, whatever 

the standard is. Can a person make such a claim based upon the 

knowledge that you have today? 

Mr. ATKINSON. No, sir. All of the documents that were provided 

to the Committee stated in the Coast Guard’s own documents that 

they failed the TEMPEST inspections and instead of correcting the 

deficiencies, they either ignored the deficiencies or they issue waivers to cover the deficiencies up. 

Mr. LATOURETTE. Right. 

Mr. Braden, to you, you have installed TEMPEST systems in 

other programs, have you? 

Mr. BRADEN. Yes, on the 270 foot cutters, the Legacy Cutters and 

also the design for the 210s and the 383s. 

Mr. LATOURETTE. To Mr. DeKort’s observation, did you, in the 

installation of those systems, have a specification that called for 

these braided shielded cables? 

Mr. BRADEN. The specification is actually a standard, a TEMPEST standard, and as was mentioned before, I initially relied on 

a report from a Ms. Jo Agog who was asked to put together a list 

32

of criteria, if you will, for how a TEMPEST installation was to be 

done. 

The reason that I met with her to go over that document, although it was listed as a document for the 123s, is that some years 

ago I was product manager for a line of TEMPEST terminals sold 

to several national security agencies, and as a result I was familiar 

with TEMPEST requirements in a very detailed fashion at that 

time. A number of years went by. I wanted to make sure that the 

requirements had not changed. 

Mr. LATOURETTE. The requirement is braided shielded cables? 

Mr. BRADEN. The requirement consists of recommendations. In 

some cases, those recommendations give alternatives. Braided 

shielded cable is the preferred alternative for ensuring security 

with the cabling. 

Mr. LATOURETTE. Are you familiar with the cables that were installed on the 123 conversions? 

Mr. BRADEN. No. 

Mr. LATOURETTE. Do you know what they are called, Mr. 

DeKort? 

Mr. DEKORT. The aluminum mylar cables. 

Mr. LATOURETTE. Aluminum mylar? 

Mr. DEKORT. Yes, sir. 

Mr. LATOURETTE. Mr. Braden, is an aluminum mylar cable one 

of the alternatives that you had, do you know? 

Mr. BRADEN. It could be an alternative as long as it was confirmed that the aluminum mylar was properly shielded and that it 

gave a full coverage under all conditions. As was already mentioned, aluminum mylar is not recommended because of durability 

issues. So it would be more appropriate in internal compartments 

or places where movement isn’t used. 

Mr. LATOURETTE. Let me ask you this. Do you know anything 

about what the difference is and how much 100 feet of braided 

shielded cable costs as opposed to how much the mylar aluminum 

cable costs? 

Mr. BRADEN. No. I couldn’t say what the price difference is. It 

certainly is more expensive, but I think the key issue is that it is 

much harder to get schedule-wise. 

Mr. LATOURETTE. It is harder to get because of the manufacturer? 

Mr. BRADEN. From a schedule, from a schedule standpoint, it is 

not the common ordinary cable that you can buy at CompUSA. 

Mr. LATOURETTE. But you could buy mylar aluminum cable? 

Mr. BRADEN. Oh, absolutely, you can get it at almost any outlet. 

Mr. LATOURETTE. You worked for Lockheed Martin for 30 years? 

Mr. BRADEN. Yes. 

Mr. LATOURETTE. Have you experienced a situation where the 

company has made a determination on cable that has the ability 

to be detrimental to national security just based on how much it 

costs? 

Mr. BRADEN. I have never seen that before. 

Mr. LATOURETTE. What about scheduling? 

Mr. BRADEN. I have seen a lot of pressure on schedule in many 

programs. 

33

Mr. LATOURETTE. Well, I am sure you have seen pressures, but 

where a decision was made. The allegation that Mr. DeKort, I 

think, is making is his testimony is that part of it was cost and 

part of it was not wanting to get behind schedule. They were going 

to get behind schedule on the stuff. 

Have you experienced the same experiences that Mr. DeKort has 

testified to in any of the work that you have done for the company? 

Mr. BRADEN. On the Deepwater program, I did experience intense pressure on both schedule and cost as I stated in my opening 

statement. My project was a fixed price contract, and so there was 

a fair amount of scrutiny on every issue associated with cost. 

Mr. LATOURETTE. Last question, not to be lawyerly with you, but 

did that pressure on cost and schedule cause you or others that you 

worked with to do something that you knew violated either the 

specs or created a situation on the TEMPEST system that was likely, as Mr. Atkinson has testified, to be vulnerable to leaking national secrets? 

Mr. BRADEN. I didn’t allow that to happen. I had a bit more oversight of my program than Mr. DeKort did, a little more independence in decision-making, and as a result we implemented our system totally correctly. 

Mr. LATOURETTE. Were you ever asked to do what Mr. DeKort 

says he was asked to do? 

Mr. BRADEN. No. 

Mr. LATOURETTE. Okay, thank you very much, Mr. Chairman. 

Mr. CUMMINGS. Thank you very much. 

As we go to Mr. Oberstar, in fairness to Lockheed Martin and to 

the contract team, Mr. Atkinson, you said in the answer to a question about if someone were to say that TEMPEST certification was 

done here with these boats, that they would be committing perjury. 

Is that what you said? 

Mr. ATKINSON. Yes, sir. 

Mr. CUMMINGS. Could it be that maybe they just didn’t know? 

I just want to be fair. 

Mr. ATKINSON. Well, let me be very precise on this. In the delivery task order that the Coast Guard issued to purchase these ships, 

they listed only one TEMPEST specification, one. There is book 

roughly that thick. It is called MIL Handbook 232A Red/Black Engineering. I have a copy of it in front of me. That was the only document that the United States Coast Guard provided to Lockheed 

Martin as part of the delivery order. 

The United States Coast Guard did not ask for TEMPEST ships. 

They did not ask for these ships to pass classified information. I 

have it right in front of me, documents which this Committee has 

in their possession that irrefutably show these ships would not 

have complied with TEMPEST when they were delivered from the 

contract the Coast Guard gave Lockheed Martin. 

Mr. CUMMINGS. Thank you. 

Mr. Oberstar? 

Mr. OBERSTAR. Mr. Braden, you knew Mr. DeKort during the 

Deepwater program? 

Mr. BRADEN. Yes, I did. 

34

Mr. OBERSTAR. Were you aware of the problems Mr. DeKort 

raised with 123s and how did you come to know about those problems? 

Mr. BRADEN. Well, I was aware of them because of the weekly 

integration team meetings that we had. Many of the issues on all 

the assets were discussed openly, and presentations were given by 

the various lead members, and we would hear issues that were trying to be resolved across the entire program. 

Mr. OBERSTAR. Did you discuss at length the issue of non-low 

smoke cabling, cameras that did not provide 360 degree coverage, 

problems with TEMPEST hardware? 

For the record, Mr. Chairman, we have been using this term, but 

it is Telecom Electronics Material Protected from Emanating Spurious Transmissions. I may have said that earlier, but I think we 

need to get that on the record because it is a term frequently used 

and it has a very ominous sound to it. 

And non-weatherproof topside equipment, did you discuss those 

matters? 

Mr. BRADEN. I had occasion to speak on a couple of those matters 

with Mr. DeKort, and that was as a result of an integration team 

meeting we had where I had presented the approach that we were 

using for the Legacy Cutters for our certification and accreditation. 

I was approached after that meeting by Mr. DeKort who quizzed 

me on what we were doing on those issues. 

We did not talk about the radios or environmental issues. We 

primarily talked about cabling and TEMPEST issues, that was the 

nature of the conversation, and I related to him what we were 

doing on my cutters. 

Mr. OBERSTAR. Are you aware of the cabling issue on aircraft in 

the 1980s and 1990s where chafing occurred in the bundles of cables on aircraft? 

Mr. BRADEN. Yes, I have read about it. 

Mr. OBERSTAR. I am talking about commercial aircraft. 

Mr. BRADEN. Yes, right. 

Mr. OBERSTAR. You are aware of that? 

Mr. BRADEN. Yes. 

Mr. OBERSTAR. It was similar mylar aluminum non-shielded 

cable. Chafing that occurred inside aircraft resulted in wearing 

away of the shield, the protective mylar covering that then resulted 

in sparking with surge of very low voltage through those wires that 

then caused fire and caused aircraft damage and failure. Are you 

aware of all that? 

Mr. BRADEN. Yes. Yes, I am. 

Mr. OBERSTAR. So you understand what the Coast Guard was 

doing in this case when it did not install the proper cabling, right? 

Mr. BRADEN. I believe that the analogy you gave is appropriate 

in a hazardous situation. In the implementation of network cabling, at least for the assets that I was responsible for, all that cabling was routed through benign areas where no hazard would 

occur if the cable had been chafed. But I do understand your point. 

Mr. OBERSTAR. Making a leap from the hazard to a different kind 

of hazard of leakage of signal, that is the real issue here. 

Mr. BRADEN. Yes, I believe so. 

35

Mr. OBERSTAR. You knew about Mr. DeKort raising his concerns 

to Lockheed? 

Mr. BRADEN. Well, I learned about them through his YouTube 

video which was widely viewed by many employees, and that is 

where I first learned of his allegations. 

Mr. OBERSTAR. You said your program, the upgrade of the 270 

foot cutters, was successful. 

Mr. BRADEN. Yes. 

Mr. OBERSTAR. What cabling did you install there? 

Mr. BRADEN. We installed shielded braided cable. In some instances, we installed fiber optic cable in instances where we went 

from secure compartments to compartments, and we armor jacketed that cable to prevent intrusion in non-secured locations on the 

ship, and we also specified low smoke, zero halogen jackets on all 

the cabling. 

Mr. OBERSTAR. Why were you able to install the more TEMPEST 

standard cabling on the 270 Legacy Cutters? 

Mr. BRADEN. I can’t say explicitly why that was, but I can say 

that the attention of most of the program and the management 

staff was attending to the 123 in terms of its schedule difficulties, 

and more or less I guess I was left alone to do it right. 

Mr. OBERSTAR. Why would the more secure cabling go onto one 

class of vessel and not on the other? 

Mr. BRADEN. I really can’t answer that question. I don’t know 

why that would be. 

Mr. OBERSTAR. But you knew it was happening, and you saw the 

dangers? 

Mr. BRADEN. Well, I had heard that it had. It was one of the 

items that had been raised, but I think, as Mr. DeKort has stated, 

these are, during the course of any project, there are problems. 

These problems are usually mitigated or removed as the course of 

the program goes on, and I, my team was very, very busy meeting 

our aggressive schedule. I did not have time to go investigate personally whether anyone had taken action on these or not. 

Mr. OBERSTAR. Were you asked to use aluminum mylar cable, 

and if you had been, would you have used it on the 270s? 

Mr. BRADEN. Where appropriate, I would have used it, yes. 

Mr. OBERSTAR. Now I want to come to the testing. There are visual tests and instrument tests. Did the 270 cutters pass the visual 

and then, subsequently, the instrument tests? 

Mr. BRADEN. We passed the visual on the second cutter. 

The first cutter, we retrofit, and the reason for that is that the 

cabling that we had ordered for the fiber optic connections and 

some of the other connections was a custom cable that was being 

manufactured for us by a firm in Virginia. There was a hurricane 

that hit and pulled the roof off of that factory. That caused delays 

in that cable. 

With the total agreement of the Coast Guard, we went ahead 

with a first installation and planned to retrofit it with the higher 

quality cable at a later date which was subsequently done. The visual inspection noted those discrepancies. They accepted them on 

the Interim Authority to Operate, and we did replace that cable. 

On the second cutter, we fully passed all visual inspections and 

all subsequent. 

36

Mr. OBERSTAR. Then subsequent should be the instrumented inspection and testing. 

Mr. BRADEN. Yes, yes, and I left the program before that instrumented test had been performed on the first cutter. 

Mr. OBERSTAR. Now the IG at the Department of Homeland Security has confirmed that the contractor failed to install non-low 

smoke cabling and failed to install topside equipment that would 

function in all weather conditions. How could that have happened? 

Mr. BRADEN. I really can’t explain how that would have taken 

place. 

Mr. OBERSTAR. Did you raise your concerns about the cable installation with Lockheed management? 

Mr. BRADEN. I had discussed with our technical director, some of 

the issues that had come up in the reviews regarding the 123, and 

I discussed them with him only in the sense that I was expressing 

my concern that they really needed to deal with them so that we 

wouldn’t keep talking about them. 

Mr. OBERSTAR. Did you feel that this rose to the level of an ethics question and did you file an ethics investigation? 

Mr. BRADEN. I didn’t feel it did at that time, no. 

I subsequently did file an ethics investigation concern at a later 

date. 

Mr. OBERSTAR. To whom or to which level did you file that? 

Mr. BRADEN. The ethics office at Lockheed Martin, Moorestown. 

Mr. OBERSTAR. What action was taken subsequent to the filing 

of that? 

Mr. BRADEN. I received no response. 

Mr. OBERSTAR. Nothing? 

Mr. BRADEN. Nothing. 

Mr. OBERSTAR. Do you know any outcome of any action taken 

later? 

Mr. BRADEN. Only supposition on my part. One of the concerns 

I had had to do with an employee morale program that had not 

been followed through with, and I suggested that the ethics officer 

might want to contact our HR department to reinstate the employee award program, and about one month after that, the award 

program was reinstated. Now I don’t know whether that was a result of my conversation or just a normal course of events. 

Mr. OBERSTAR. To the best of your knowledge, that is the only 

follow-up that occurred. 

Mr. BRADEN. That is the best guess I have, and that is it. 

Mr. OBERSTAR. I will have further questions later. Thank you 

very much. 

Mr. CUMMINGS. Mr. LoBiondo? 

Mr. LOBIONDO. Thank you, Mr. Chairman, very much. I want to 

commend you for holding this hearing. 

I think it is absolutely imperative that we try to get to the bottom of the situation. I am hoping that we are going to hear something about the buckling hulls. I may ask that in a couple of minutes. 

But I wanted to say that while I think this hearing today is very 

important, I think it is equally important that we not lose sight of 

the fact that the Coast Guard currently operates the second oldest 

fleet of vessels and aircraft in the world, and that was the purpose 

37

of operation Deepwater. Some of these assets are over 60 years old. 

They are rapidly failing. Operations tempo continues to increase. 

Service-wide readiness is now. Hundreds of patrol days are being 

lost annually. 

Probably, most importantly, the safety of the men and women of 

the Coast Guard who operate these assets are more in danger, I 

think, every day. The success of the Coast Guard’s many vital missions, I think, are in serious jeopardy. 

As we move through this, I just hope that we can keep in sight 

that it is critically important that the service get these aging assets 

replaced with fully functioning and capable assets and as soon as 

possible. 

I would hope that we remember the videos of the Gulf hurricanes 

of Katrina and Rita and the job that the Coast Guard did. However 

miserably the Federal Government failed, no one faulted the Coast 

Guard. Part of the ability of the Coast Guard to perform so admirably at that time was the result of the Deepwater program and 

the upgrade of communications. Thousands upon thousands of lives 

were saved in that whole process. 

I am very pleased with Admiral Allen’s decision yesterday. I 

think it was very proactive. I think it will help rein in control of 

this program, and it is a serious situation that needs to be fixed. 

I have a lot of confidence in Admiral Allen. 

I have a very serious regret that Admiral Allen did not get his 

hands on the helm sooner than what he did. I will leave it at that. 

I will say to my colleagues that I know this situation makes it 

pretty easy for us to throw our hands up and to walk away from 

Deepwater and to say that it is fatally flawed and it has got to be 

scrapped, but I plead with you not to turn your back on the men 

and women of the Coast Guard, those young men and women who 

are heroes every day, who are putting their lives on the line for us 

in so many different ways and are depending on us to come up 

with a solution that meets the challenges of the problems we are 

hearing about today but still finds a way to give them a replacement of the assets. So the safety and success of their missions depend on the replacement of these assets, and it is our job to make 

sure that we do the best possible. 

Mr. Chairman, I once again commend you and Mr. Oberstar for 

really getting at the heart of this problem, and I hope we can get 

to a point where we can move forward. I thank you very much. 

I will later on try to ask some questions about the buckling of 

the hulls. I don’t know when that is an appropriate time. 

Mr. CUMMINGS. It would probably be good when we have the 

Coast Guard up. 

Let me just say, Mr. LoBiondo, there is not one syllable, not one 

syllable that you just stated that I disagree with. We all are trying 

to get and make sure that the Coast Guard has equipment so that 

they can do the great job like they did down in Katrina and the 

things that they do everyday, the largest seizure that they have 

ever had in their history just recently taken place. 

This is all a part of making sure, and I agree with you, that we 

want them to have that equipment, but we want that equipment 

to be safe and we want it to be safe for our personnel, Again, as 

38

I said a little earlier, we just want ships that float, planes that fly, 

just what we contracted for. 

Before we get to Mr. DeFazio, I just have one quick question. 

Mr. Braden, just in follow-up to Chairman Oberstar’s question, 

he asked you whether you would use aluminum mylar shielded 

cable, and you said, in certain instances. Is that correct? 

Mr. BRADEN. Yes. 

Mr. CUMMINGS. Let me ask you this. Would you have used the 

in secure situations where we were trying to make sure that there 

was no eavesdropping, the very thing that Mr. DeKort complained 

about? I think that is the question. 

If you had been asked to use that kind of cabling under the circumstances that Mr. DeKort complained about, would you have 

used it? 

Mr. BRADEN. That is a difficult question to answer because the 

application of the cabling is also dependent on the type of compartment that you install it in and whether it is a totally shielded and 

contained and properly grounded compartment. 

What I mean by that, and I am sure Mr. Atkinson can lend more 

detail to this, if I have a piece of equipment that is totally contained within a shielded enclosure and it is sharing that enclosure 

with other equipment of its same classification level and the same 

network connection and connectivity. Then if that cable is properly 

grounded, shielded, then yes, the mylar cable would be acceptable 

in that instance. 

Mr. CUMMINGS. I see you shaking your head, Mr. Atkinson. 

Mr. ATKINSON. Yes, sir. If you build a cabinet that contains classified equipment and the cabinet itself is TEMPEST certified, you 

can take an uncertified piece of equipment, put it inside this cabinet and it will provide some level of protection. A very common 

thing is to take a printer or a plotter or a certain type of computer 

that there is no TEMPEST equivalent of and to encapsulate it inside of a TEMPEST box or a TEMPEST shield which now renders 

it protected. 

We can do the same thing with cables where we can use a nonTEMPEST involved cable to hook up something that is put into a 

box which is itself is protected, and we have to be very careful 

what we put into this box because some things we put in this box 

will cause TEMPEST hazards to occur. 

Mr. CUMMINGS. From all the records that you have read, would 

you agree with Mr. DeKort? 

Mr. ATKINSON. In what regard? 

Mr. CUMMINGS. With regard to his complaints about the aluminum mylar shielded cable and that it should not have been 

used? 

Mr. ATKINSON. Yes, sir. I have actually researched the cable that 

he is referring to and found Coast Guard records in regards to 

them and have identified that we are talking at a difference of 

about $20 for the cable. 

Mr. CUMMINGS. Mr. DeFazio? 

Mr. OBERSTAR. Would the gentleman yield before he gets to his 

questions? 

Mr. DEFAZIO. I would certainly yield to the Chairman. 

Mr. OBERSTAR. Thank you. 

39

I just want to reassure the gentleman from New Jersey who 

served for a long time as the Chair of the Coast Guard Subcommittee that our purpose is not a public hanging. We are here 

to try to fix the underlying problems in the Coast Guard’s management of its contractual responsibilities to deliver on the program 

that the gentleman played a large part in authorizing for the Coast 

Guard just as we have done over many years when I chaired the 

Aviation Subcommittee and the Investigations and Oversight Subcommittee to get FAA on the right track, learn how to manage 

multibillion contracts and then fund those programs. 

I assure the gentleman that is the purpose of this hearing, to go 

to the core of the problems uncovered here, fix them and then report out a robust Coast Guard authorization program so they can 

fix those old ships and have the equipment they need to carry out 

the many responsibilities we have loaded upon them. 

Mr. LOBIONDO. Would the gentleman yield for a moment? 

Mr. OBERSTAR. I yield back. 

Mr. LOBIONDO. Mr. Oberstar, I applaud your efforts. I in no way 

meant to intimate that that was the case, but my concern was from 

some other colleagues who are not on the Committee, who have 

just in casual conversation said to me, we ought to just scrap the 

program. 

Mr. OBERSTAR. No. 

Mr. LOBIONDO. I don’t think they understand what scrapping the 

program would mean. 

Mr. OBERSTAR. I just want to reassure the gentleman. We are on 

the same wave. 

Mr. LOBIONDO. Okay, we are in synchronization. Thank you, Mr. 

Oberstar. 

Mr. DEFAZIO. I would certainly second those comments. Ten 

years ago as Ranking Member on the Coast Guard Subcommittee, 

I became very well aware of and was a strong advocate for increased funding and new equipment for the Coast Guard. I had one 

of the antique ships in the Coast Guard serving my district for a 

while, and I am well aware of that problem. But it was only after 

9/11 that Congress and this Administration began to recognize the 

need, and Katrina certainly highlighted the efficiency and valor of 

the Coast Guard. 

None of that is in question here today, but there are extraordinary questions about how we got to this point. 

I guess I am going to direct most of my questions to Mr. Sampson, and I will be questioning the buckling and the design on the 

123s which the former Chairman hoped we would get to. I have 

been waiting to get to it too. I am not much of an electronics guy, 

but I am and have been a lifelong sailor and boat owner. 

Mr. Sampson, these will be directed to you, but just keep this in 

mind as I ask you the questions. This is a statement that will come 

after you have left, and I want to give you an opportunity to respond to it in your responses to me. 

Mr. James Anton, Vice President, Deepwater Program, Northrop 

Grumman Ship Systems, if you look at page two of his testimony, 

he says: HBJV added a 13 foot extension to the 110 which was 

similar to the 9 foot extension they had successfully added to the 

Cyclone Patrol Boats starting in 2000—no mention there of the 

40

early problems with those extensions, but he does say they were 

successful. 

He goes on further on that page to talk about hull deterioration. 

He goes on page three to talk about the ships being operated in 

seas beyond their design capacity. 

He goes on, on page four, to say that an outside engineering firm 

designers and planners engaged by the Coast Guard, analysis 

showed the overall hull structure design was adequate under all 

expected operating conditions up to the worst operating condition 

modeled. 

Then in summary, he says it is premature to speculate on the 

final cause and final way forward. 

I assume you probably don’t agree too much with that analysis 

of those remarks. 

Mr. SAMPSON. No, sir, I don’t. There are several different perspectives that I would like to address. I haven’t had the opportunity to read the comment that you are discussing. I wrote down 

some quick notes, so if there is something there that I missed, 

please remind me and I will feel free to discuss. 

In regards to the Navy’s experience with the PCs, I want to 

make sure it is very clear. CCD, Combatant Craft, emphasized to 

the Coast Guard as well as Bollinger Shipyard because this was 

kind of a misconception among many that Bollinger Shipyard built 

the 110. They built the 170. They did the extension. 

What never appears to come to the surface is the fact that Combatant Craft Division was the one that did the entire design work 

for the extension. The failures that occurred were actually prior to 

the ones when the 170s were first built. When the PCs were first 

delivered, they started failing immediately. 

That was a function of, after extensive investigation, Combatant 

Craft came to the position that the 1997 ABS rules, high speed 

craft rules with which the PCs were built to had underpredicted 

what they call a dynamic loading condition. The ABS later in their 

high speed naval craft code did correct this based on that experience. It was a known issue to ABS, to Combatant Craft, and we 

made that very clear to Bollinger Shipyard. 

Mr. DEFAZIO. Is that what you discussed with Mr. Debu Ghosh 

on 9/3/02? 

Mr. SAMPSON. That was one of the topics, yes, sir. Yes, sir. 

Mr. DEFAZIO. Okay, go ahead. 

Mr. SAMPSON. The Combatant Craft, when they did the design 

work, Bollinger is a great fabricator. However, they did not facilitate the engineering. Production details, things of that nature, but 

the actual first extension was not performed by Bollinger to my understanding. It was actually by another shipyard. So they did not 

perform the engineering. That expertise resided with CCD. 

During that 9/3 meeting with Mr. Ghosh, we emphasized to him 

that this was not a simple evolution, that the design was very complex. The PC went from a 5 percent length increase of 9 feet as 

compared to the 123 or the 110 which added 13 feet to 12 percent 

increase. This is a substantial, substantial increase in length. 

As a result of that, the rules that were being used or we were 

told were being used for the 110/123 conversion were these, what 

CCD felt were flawed rules of ABS, the 1997 high speed craft code. 

41

Mr. DEFAZIO. So that was probably the point at which you or the 

Navy CCD offered to provide some design and engineering support 

to Bollinger, Northrop Grumman or the Coast Guard on the conversions? 

Mr. SAMPSON. Yes, sir. Let me make it clear. CCD did not go out 

and necessary try. Combatant Craft is a capital-funded program. 

So, in essence, we are like a contractor. We have to go out and sell 

our services. 

Mr. DEFAZIO. Right. 

Mr. SAMPSON. So I can’t voluntarily, but. 

Mr. DEFAZIO. But you made an offer. 

Mr. SAMPSON. We informed the parties involved, yes, sir. 

Mr. DEFAZIO. I believe it was not particularly spending in terms 

of how much money has been wasted here. What would the costs 

have been? 

Mr. SAMPSON. Just for oversight to determine if a problem existed would have been $42,000. 

Mr. DEFAZIO. Forty-two thousand dollars? 

Mr. SAMPSON. Yes, sir. 

Mr. DEFAZIO. How much did we spend per ship conversion? 

Mr. SAMPSON. A lot more than that, yes, sir. I am not aware of 

the exact number. 

Mr. DEFAZIO. Okay. But that offer was declined. 

Mr. SAMPSON. Yes, sir. 

Mr. DEFAZIO. Okay. Was there any particular reason given for 

declining that offer? 

Mr. SAMPSON. No, sir. 

Mr. DEFAZIO. Okay. Then you went to the Coast Guard. 

Mr. SAMPSON. Well, the order that we talked. We had talked 

with Mr. Ghosh first. 

Mr. DEFAZIO. Right. 

Mr. SAMPSON. Then we talked to the Deepwater Program Office 

up in Washington, D.C. Talked to Ms. Diane Burton and another 

gentleman. For the of me, I can’t remember his name, but I remember him as a program manager. I don’t recall if he was specific 

to the 123 or in total. Explained the situation to them. 

Ms. Burton, being a former NAVC employee, I think, understood 

some of our concerns. However, the discussion was very short and 

thank you very much, and we never heard anything further from 

them. 

Northrop Grumman, Combatant Craft did not contact directly. 

However, Bill Moss, who is our point of contact for the Carderock 

Division, did provide a capabilities brief to Northrop Grumman to 

explain what the Navy had to offer them, but specific to the 123, 

nothing was mentioned. 

Mr. DEFAZIO. Do you think that there is any possibility that Mr. 

Anton who raises these other issues was aware of these concerns 

as a Northrop Grumman executive? 

Mr. SAMPSON. I have no idea, sir. 

Mr. DEFAZIO. Perhaps he will be asked that on the next panel 

under oath and why action wasn’t taken. 

I have got to jump ahead here because the time is valuable and 

we have been holding people on time. 

42

This is, I think, a critical question because there was some concern raised earlier by Mr. Mica that we are plowing old ground and 

that, in fact, this has all come out before. Did Mr. Casamassina of 

Navy CCD warn the Coast Guard that it was in danger of losing 

a ship if the hull cracking problem was not corrected? 

Mr. SAMPSON. I don’t have firsthand knowledge of that specific 

conversation or those words were used. I do, however, know that 

Mr. Casamassina and myself talked at length to the Coast Guard 

and Bollinger and explained the severity of the situation, and we 

felt confident that they understood that. 

Mr. DEFAZIO. Apparently, the Navy did give us that statement 

that they afforded that warning, but I thought you had knowledge 

of it. 

Mr. SAMPSON. Not that specific phone call. 

Mr. DEFAZIO. You had conversations similar to that with Mr. 

Casamassina. 

Mr. SAMPSON. Yes, sir. 

Mr. DEFAZIO. So the risk here was catastrophic failure, hull failure, loss of the ship, potentially loss of life? 

Mr. SAMPSON. Potentially, yes, sir. 

Mr. DEFAZIO. Then, finally, it is our understanding the Coast 

Guard made two efforts to fix the 123s after the problems with the 

decks appeared. Did the Coast Guard consult with CCD on these 

proposed fixes that you are aware of? 

Mr. SAMPSON. I, as employed by the Coast Guard, did consult 

with CCD but purely on a professional peer level. 

Mr. DEFAZIO. Right. 

Mr. SAMPSON. Having worked with them, I consulted them and 

asked them their thoughts or to confirm what I was suspecting or 

believing which they provided to me as a personal interest that, 

yes, these fixes were not going to work. However, there was no direct involvement, to my knowledge, between CCD and parts. 

Mr. DEFAZIO. Did you report that up the chain, that these proposed fixes were not likely to work according to your consultation 

with CCD? 

Mr. SAMPSON. Absolutely. My command, the Maintenance and 

Logistics Command Atlantic voiced those concerns repeatedly. 

Mr. DEFAZIO. But they went ahead anyway. 

Mr. SAMPSON. Yes, sir. 

Mr. DEFAZIO. And they didn’t work. 

Mr. SAMPSON. Correct. 

Mr. DEFAZIO. Well, so none of the efforts to fix the 123s succeeded. Would you then disagree with Mr. Anton’s statement that 

it is premature to speculate on the final cause and the way forward 

of the failure? 

You think we know the cause? 

Mr. SAMPSON. I think there is a strong case to be made that the 

cause is due to the hull strength or the hull girder issue. The localized failures that have occurred on deck and some other places 

were, in my opinion, a result of the modifications where they just 

moved stress from one location to another. The actual initial failure 

of the Matagorda was a clear classical failure due to bending. 

Mr. DEFAZIO. Mr. Chairman, I want to thank you for the generous grant of time and for your leadership on this issue. 

43

I do want to say in closing that Mr. DeKort in his testimony said 

that and he was referring to a number of things here, that these 

were actually informed and deliberate acts. I hope if through our 

investigation we find that any of these acts were informed and deliberate, that both defrauded the taxpayers and jeopardized national security and potentially jeopardized the health and safety of 

our Coast Guard crews, that we will be providing all of that to the 

Justice Department. I hope that maybe some of those responsible 

could enjoy Federal hospitality. 

Mr. CUMMINGS. Thank you very much. 

I take it, Mr. Sampson, that you did not believe. 

I have seen the ships. I saw them last Thursday, and I can tell 

you they are a mess. 

Mr. SAMPSON. Yes, sir. 

Mr. CUMMINGS. Have you see them? 

Mr. SAMPSON. Yes, sir. I have done extensive investigations and 

inspections on those craft. 

Mr. CUMMINGS. The amazing thing is that I thought we were 

talking about a big ship. Some of these boats are not as big as 

some yachts. 

Mr. SAMPSON. Yes, sir. 

Mr. CUMMINGS. It is incredible, and they so happen to be in Baltimore where I live. So I happen to be there, and I wanted to go 

see them. 

But, anyway, I am sorry, Mr. Gilchrest. 

Mr. GILCHREST. Thank you very much, Mr. Chairman. 

I too want to make sure that that Coastie who is today similar 

to Gene Taylor 30 years ago, whether they are breaking ice to 

McMurdo. Maybe 10 years ago, I don’t know when Gene Taylor 

was in the Coast Guard. When those are Coasties are breaking ice 

to McMurdo Station in the Antarctic on that ship, when they are 

at Cape Disappointment rescuing people, when they are in the Gulf 

of Alaska because a crab boat is in trouble, or the Chesapeake Bay, 

or these guys are out there determining international standards at 

the IMO in London, it is an extraordinary service. 

But I do remember a time 40 years ago when I was using an M14 in Vietnam. It worked every time we pulled the trigger. Sadly, 

we had to pull the trigger occasionally. Rain, monsoons, heat, mud, 

you name it. 

We were given an M16, about February of 1967, and it didn’t 

work. Who was responsible for that? 

In 1967, these young men, like we have now in Iraq and in Afghanistan, assume the chain of command is competent. 

We are here to praise the stunning abilities of the Coast Guard 

people, and we also want to find out the chain of command that 

whomever and wherever it is that changed the basic physics. They 

changed the physics of the boat when they wanted to put in some 

add-ons which would have made it more serviceable under certain 

conditions. But they changed the physics of the boat. 

So who was responsible for proving that chain up the chain of 

command including everybody and the contractors? 

I am glad the Chairman is holding this hearing. We are not here 

to unfairly reprimand anybody, but we would like to know how this 

came about that we have eight boats now that don’t work. 

44

Mr. Sampson, did the Coast Guard consult with the Navy engineers when reviewing the proposed design of the 110 foot patrol 

boat conversion? 

Mr. SAMPSON. No, sir, they didn’t necessarily consult us. We at 

CCD did notify them of our experience with the PC and the lessons 

learned, and we shared that with the Coast Guard voluntarily. 

Mr. GILCHREST. There was a basic consultation that took place. 

Mr. SAMPSON. Yes, sir. On that 3rd of September with Mr. Ghosh 

in addition to the Deepwater Program Office, we shared that we 

had extensive knowledge and experience with this type of design 

and modification and that they were at very high risk of failure if 

they were to proceed. 

Mr. GILCHREST. What were the specific concerns that would 

cause the high rate of failure if they proceeded? 

Mr. SAMPSON. As I stated earlier, that ABS 1997 high speed craft 

rules, that uses two methods of prediction for the strength of the 

boat. One is a static-loading. One is a dynamic-loading. The 1997 

rules underpredicted the dynamic loading. As a result, the static 

was a driving factor according to that rule set. 

Combatant Craft, through investigation, realized that that was 

actually not the case, and they used another classification society’s 

rules in conjunction with some additional calculations to determine 

the actual correct strength that the vessel had to be. Because of 

that, we cautioned the Coast Guard extensively because we knew 

they were going to use that, the old set of ABS rules. 

Mr. GILCHREST. Did they take your caution seriously? 

Mr. SAMPSON. I felt, we felt that they understood our concerns. 

I do not know what they did with our information. Mr. Ghosh certainly tried to, I think understood, and he tried to hire us to provide. 

Mr. GILCHREST. But you don’t know if those recommendations 

were followed through by anybody in the Coast Guard? 

Mr. SAMPSON. Eventually, they weren’t, sir, because the boats 

were built as proposed. 

We also shared—real quick, sir—that when you lengthen a boat, 

those bending moments, that static bending and dynamic loading, 

those are affected primarily by the length of the vessel, and the dynamic also has a speed component. But the length of the vessel is 

a significant contributor to that bending force. And so, when you 

lengthen a boat by 12 percent, that is a tremendous length increase 

for that size craft, and so you have to add strength to the vessel, 

vessels that are high speed craft such as the 110. 

Mr. GILCHREST. So strength was not added to the vessel? 

Mr. SAMPSON. No, sir, not at all. 

Mr. GILCHREST. Can you just tell us—I know my time is up, why 

wasn’t strength added to the vessel if those recommendations were 

made? 

Mr. SAMPSON. The only thing that I can speculate, sir, is that the 

static condition was a driving factor, and they felt they complied 

with that static condition. Other than that, I have no idea, sir. 

Mr. GILCHREST. I see. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. CUMMINGS. Thank you. 

Mr. Taylor? 

45

Mr. TAYLOR. Thank you, Mr. Chairman. 

Mr. Sampson, I want to follow up on what you were just touching 

on because I have heard now three different explanations for the 

110 problems. 

First, I was told they never did hogging and sagging calculations. 

Then I was told, yeah, we did them, but we didn’t figure in fatigue. 

Yeah, we figured in fatigue, but we misjudged the steel. 

Apparently, the initial hull had some high tensile steel. Apparently, it got a Made in U.S.A. waiver. I am told it was from England, but I am told no one ever tested it on the initial building of 

the hull and that, like you said, when the hull is only 110 feet and 

you stress between two waves, you didn’t have the hogging and 

sagging problem. You make it 123 feet, get between two waves, and 

you have substantial problems. 

My question to you is since I am getting so many different stories 

from people who ought to hopefully be telling me the truth and 

since we have now got eight ruined ships, $40 million down the 

drain. To my knowledge, no one has been fired. To my knowledge, 

no one has claimed responsibility. I can assure you if this had happened in the private sector, a bunch of people would have been 

fired by now. 

So what do you think happened? 

Mr. SAMPSON. Sir, you bring up some good points. 

Mr. TAYLOR. I also want to say, Mr. Cummings, if you owned a 

crew boat, a boat that takes people out to an off-shore oil rig and 

you wanted to stretch that crew boat and still have it certified to 

carry passengers, the Coast Guard would have run the tests before 

they ever recertified that vessel again. So it is absolutely crazy that 

something they do every day in judging the private sector, they apparently didn’t do for themselves, and no on has ever answered 

that question. 

Mr. SAMPSON. Sir, I think to clarify, I think there are some 

issues there that may have been crossed over. The metal fatigue 

and the material properties were things that were subsequently 

looked at well after the Matagorda failed. Those were things that 

were addressed after the fixes did not work in the hopes to try to 

figure out exactly what transpired. 

Mr. TAYLOR. To the point I was told they never looked at metal 

fatigue in the beginning when they were running the hogging and 

sagging calculations. Is that true? 

Mr. SAMPSON. That, I am not aware of, but I would suspect that 

is the case. 

Mr. TAYLOR. Did they run hogging and sagging calculations up 

front just like they would have if a crew boat operator had gone 

to them, wanting to stretch their vessel? 

Mr. SAMPSON. Mr. Ghosh would probably be the best one to answer that, sir. My understanding is they did, and there were some 

errors in those calculations, but he would give you a definitive answer on that, sir. 

Mr. TAYLOR. Did anyone ever test the steel that I am told came 

from England which probably would have required a Made in 

U.S.A. waiver and that, if we did that, we undoubtedly paid a premium for it in the first place to see whether or not it was up to 

the spec that we probably paid the premium for? 

46

Mr. SAMPSON. Okay, to my understanding, no steel was imported 

from England. 

The initial design, both the 110s and the 170s, all those craft 

were designed by a British company called Vosper Thornycroft. 

They had a material requirement in their design of what they call 

British steel 4316. It is a British standard saying this is a material 

property. 

It is my understanding, and Bollinger may be able to correct this, 

but it is my understanding that they had specifically mill runs performed by U.S. steel mills and all that material made to that British standard and delivered to Bollinger Shipyard for construction 

of the 110. Whether or not they had any material testing done at 

that time, I am not aware of. 

Mr. TAYLOR. To the point, what do you think happened? I am 

game now for the fourth opinion of why these ships failed and yet 

no one is responsible. 

Mr. SAMPSON. Sir, I think there is a combination of things, but 

I believe that the longitudinal bending. In real simple terms—and 

I will try to make this brief—when you take a hull and you put 

it in the water, it has to be designed to handle, to go in through 

waves and over waves. 

Mr. TAYLOR. Mr. Sampson, I have stretched a steel boat, my 

boat. So I am familiar with all of that. 

Mr. SAMPSON. Okay, okay. You have to design for both of those 

loading conditions. The loading conditions that were initially assessed by the 1997 ABS rules underpredicted those loads that the 

boat would have to meet. 

It may have been the FE-I do not know. Mr. Ghosh may be able 

to provide the information. 

But we understood, as Combatant Craft, that those rules were 

faulty. We did our own simplified investigation to determine that 

the loadings would have been much more significant to require, to 

provide strength of that hull sufficient enough to withstand the operations. 

There were other issues later on where the specification, the performance specification came into question. I have read the performance specification that was issued. To me, it is very clear that the 

intent was to have a platform that was as capable as the 110 WPB 

at the end of the conversion. That did not happen, obviously. 

At all the times of the failures of the 123s, we had 110s out and 

operating that suffered no hull damage whatsoever. 

Mr. TAYLOR. For the record, who did you notify? 

Mr. SAMPSON. I notified ELC, Mr. Debu Ghosh. I notified the 

Deepwater Program Office, Ms. Diane Burton and another gentleman who I cannot remember his name. I notified Bollinger Shipyard, Dennis Fanguy and anybody else would listen. But those 

were the three primary contacts that we notified. 

Mr. TAYLOR. For the record, did any of them change their plans 

in any way or did any of them recalculate the tests to address your 

concerns? 

Mr. SAMPSON. At the time, sir, I was with CCD. The Coast 

Guard, I was not intimate with the Coast Guard. I do not know 

what they did. 

47

Mr. Ghosh took the matter very seriously. I am not sure what 

he did. 

Mr. TAYLOR. Okay. 

Thank you, Mr. Chairman. 

Mr. CUMMINGS. Before we get to Mr. Diaz-Balart, let me just ask 

you one question. I would direct this to Mr. Braden and to Mr. 

Sampson. 

Yesterday, the Coast Guard announced its intention to bring the 

systems integration functions back in-house. How do you think this 

changed process will help? 

I mean do you think it will help at all? Do you think we will still 

have the same kind of problems? 

I am following up on what Mr. Taylor just talked about. I am 

just wondering. Nobody has been fired to my knowledge either, and 

it seems like this is a situation that all parties involved have some 

responsibility and some issues. 

But I am just wondering. He has made this announcement apparently in an effort to try to cure the situation and make it better 

for the future. I was just wondering are you familiar with that, 

what he said? 

Mr. BRADEN. Yes, I am. 

Mr. CUMMINGS. Mr. Braden, do you have an opinion on that? 

Mr. BRADEN. Well, I feel, and I think this was mentioned previously, that the Coast Guard is ill prepared at this time to provide 

quality systems engineering and integration oversight. I have 

heard from the members that there are efforts to beef up their 

staff, to hire the necessary people. I think that is going to be a 

major challenge for them to do that. 

I think they will still need to rely heavily on industry to provide 

that guidance. I believe, personally, that oversight, meaning an 

independent assessment of what the requirements have been 

agreed to, is the biggest key to success on the program. 

In the past, as a performance-based requirement, there is a good 

bit of subjectivity as to how you achieve the final performance goal, 

and that subjectivity was, I would say, a major point of contention 

between the Coast Guard, in my direct experience on the 270s, and 

ourselves in terms of debating probably needlessly and sometimes 

seemingly endlessly as to someone’s interpretation. And I think by 

getting clear requirements and then having oversight of those requirements, that would go a long way towards making sure that 

things get done exactly right the first time. 

Mr. CUMMINGS. It sounds like, Mr. Braden, that you are very 

strong with regard to your standards, and you are not going to 

bend, no pun intended, but you are not going to bend. 

It sounds like to me basically they let you alone, and you did 

what you had to do. Apparently, as we see now, it worked out fine. 

That is what it sounds like now. 

Mr. BRADEN. Well, I will echo what I have heard previously too, 

and that is that I had the utmost respect for the people who put 

their lives on the line daily in the Coast Guard, and it was my intention to be certain that we delivered the best quality system we 

possibly could. 

And I found that, in some instances, I saw in other areas of the 

program, sort of an adversarial relationship between the Coast 

48

Guard and the contractors. I tried to nurture a friendly, cooperative, open discussion, and that is how we did finally nail some of 

the issues we had to contend with in terms of interpretation. 

Mr. CUMMINGS. Mr. DeKort, same question. 

Mr. DEKORT. We had a different experience, Mr. Braden and I. 

If I had the ability to be that independent and to have that relative 

authority, we would not be talking right now. 

Mr. CUMMINGS. Mr. Sampson? 

Mr. SAMPSON. Sir, I guess my FE 

Mr. CUMMINGS. See, you have a unique perspective, Mr. Sampson. You had the Navy and the Coast Guard experience. 

Mr. SAMPSON. Yes, sir. 

Mr. CUMMINGS. What we have been hearing is that the Navy is 

well equipped to do a lot of these things and maybe the Coast 

Guard isn’t there yet. 

But you go ahead. I am listening. 

Mr. SAMPSON. I love the Coast Guard, sir, through and through. 

Mr. CUMMINGS. We do too. 

Mr. SAMPSON. It is the best organization out there. I think the 

Coast Guard, one of the more trying aspects that the Coast Guard 

has is resources. 

If you look at the Navy, it is a huge organization, lots of money, 

lots of human capital to take care of many of the challenges that 

are put before them. 

With the Coast Guard, now this is Scott Sampson’s personal 

opinion, but the Coast Guard, we are asked to do more and more 

and more. I had to give up billets out of the section that I supervise 

to provide people for Pat Forswa, the 110s that we have overseas 

supporting our men and women over there. I have to give up a lieutenant JG for an admiral’s billet that doesn’t get replaced. 

We are continuing to do more and more. I have a friend of mine 

who is in the acquisition office, that puts in routinely 12 to 14 hour 

days including weekends, and he doesn’t get to see his wife much 

because we ask more and more of our folks, and we are never provided or very rarely are we provided the men, the resources to try 

to get those tasks accomplished. 

While I have the utmost in confidence in the Commandant’s direction and leadership, I think this is going to be a significant challenge for the Coast Guard to provide that additional oversight that 

is going to be placed upon us. 

Mr. CUMMINGS. Thank you very much. 

Mr. Diaz-Balart? 

Mr. DIAZ-BALART. Thank you, Mr. Chairman. I actually really 

don’t have a question, more just a couple of comments. 

First, I want to thank you, Mr. Chairman, for what I think has 

been a very important hearing, and I want to thank also those of 

you who have come forward for spending all this time with us. I 

think it has been very helpful to allow us to understand what the 

issue is. 

Secondly, when I was listening to Mr. Taylor, I share his concern 

and his frustration, the fact that what he said, and I am paraphrasing, Mr. Taylor, but about the fact that nobody has been 

fired. We shouldn’t be surprised, either Mr. Taylor and I, that in 

the public sector, it is very hard to fire people anyway which is one 

49

of the problems with creating a larger bureaucracy is you can never 

get rid of them. But it is clearly frustrating for him and for me, 

and I don’t think it should surprise us. 

Number three is that I think it is very important, and you all 

have not done that, but it is very important that anybody listening 

doesn’t. When we speak about the Coast Guard or Lockheed Martin, it is not the Coast Guard or Lockheed Martin. There may be 

some individuals that have made mistakes, and that is not the entire entity. You all understand that. We understand that. I just 

want to make sure that everybody else understands that. 

Lastly, Mr. Chairman, I just want to thank you and also Chairman Oberstar for your statements to Mr. LoBiondo’s question or 

comments and your commitment to that because, as Mr. Sampson 

just stated, the Coast Guard has always been underfunded which 

is why this project, this Deepwater project is so important. But, obviously, it is important not only that it receives a funding but that 

it is funded and the money is spent efficiently and effectively. That 

is the purpose. 

I want to thank both of you gentlemen for clarifying that. Again, 

nothing that we didn’t expect to hear from you, but it is always, 

I think, important that we thank you for that strong statement of 

support for an efficient, effective Deepwater program that does protect our national interests, our national security and obviously the 

men and women who perform. 

Mr. OBERSTAR. Would the gentleman yield? 

Mr. DIAZ-BALART. Yes. 

Mr. OBERSTAR. Just briefly for an observation, I have served on 

the Coast Guard Subcommittee since I came to Congress 32 years 

ago. We have added 27 new functions to the Coast Guard in those 

years, but the Congress and administrations, Democratic or Republican, have not given the Coast Guard the funding they need to 

carry out those functions. That is what I am talking about. That 

is the frustration. By damn, we are going to work on that and do 

that in this Congress. 

Mr. DIAZ-BALART. I thank the Chairman if I may claim my time 

back. I thank the Chairman for that, for his commitment. I know 

that. I have been in conference with you not that many years obviously, and I have seen that commitment. Clearly, the Coast Guard 

deserves the funding. 

I think one of the problems that I am seeing here from Mr. 

Sampson’s statement. Again, I don’t want to paraphrase. I am 

paraphrasing what you said. 

One of the issues that may be unfolding here is that yes, frankly, 

with this Deepwater program, we have finally funded some assets 

for the Coast Guard that frankly since probably the Coast Guard 

has been underfunded for so many years, they just weren’t ready 

for it, no excuse there. 

But, anyway, I just wanted to make those statements. 

I wanted to thank the Chairman of the Subcommittee and the 

Chairman of the full Committee for allowing us this opportunity. 

I think it has been very fruitful. Thank you. 

Mr. LATOURETTE. Will the gentleman yield to me on your time? 

Mr. DIAZ-BALART. Yes, sir. I give you the rest of my time. 

50

Mr. LATOURETTE. Thank you very much. I just wanted so I don’t 

have to drag out this panel. Mr. Atkinson, could you clarify your $20 remark? I have asked 

Mr. DeKort and Mr. Braden about it. I thought I heard you say, 

and I don’t want to put words in your mouth but the difference between the mylar aluminum and the braided shielded was 20 bucks. 

Is that 20 bucks a foot, 20 bucks a mile? 

Mr. ATKINSON. No, sir. The Coast Guard, excuse me. 

ICGS purchased a cable made by a company called Cable General. This was an ethernet cable similar to what many of you have 

in your offices, but it was a heavier duty version of that cable. 

Now this cable is made in two formats. It is called a ship LAN 

cable designed for local area networks aboard ships. The first 

version is an unshielded twisted pair with a mylar shield only. 

There is also another version which is only slightly more expensive, 

which is a double shielded braid and foil. On the ends of this cable 

is a connector made by Sentinel Connector Company or Sentinel 

Connector Systems, Inc., which the actual connector itself was developed by Lockheed Martin. 

The price difference between the shielded cable and the mylar 

shielded cable or the double shielded cable, if you will, and the 

mylar shielded cable, the total cost for a 10 foot cable that is mylar 

shielded is about $7.50. 

Mr. LATOURETTE. For 10 feet? 

Mr. ATKINSON. For a 10 foot cable. 

Mr. LATOURETTE. Anybody have any idea how many feet of cable 

we are talking about in the 110 conversions? Mr. DeKort? 

Mr. DEKORT. There are almost 400 cables in total. I don’t know 

how many there are, but I would imagine several dozen. But again, 

sir, that would need to multiplied times 49 times the rest of the 

vessels because it is a system of systems. 

If I could because I understand why you are going down, if I 

could clarify really quickly, when you have a program where you 

bid $4 million per boat and you know you are over-running double 

that and it is $8 million per boat, it is very possible that they 

thought their potential profit literally was in five cents per cable. 

Also, though, by the time these issues had snowballed, I believe 

Lockheed Martin, part of their thought was this is embarrassing. 

So, at some point, they just didn’t want this to come out because 

how avoidable it was and how crucial these issues were. So it is 

the combination, sir, of the costs, schedule as well as not wanting 

to necessarily come out. 

Mr. LATOURETTE. I got you. I thank you and Mr. Diaz-Balart for 

yielding. Thank you. 

Mr. CUMMINGS. Mr. Hall? 

Mr. HALL. Thank you, Mr. Chairman and Chairman Oberstar. 

I thank you for the patience of all our witnesses and our other 

witnesses. I will keep this really brief. 

Mr. Sampson, I gather you are, among other things, a Naval architect. 

Mr. SAMPSON. Yes, sir, that is correct. 

Mr. HALL. When one builds a 110 foot vessel or any vessel, I 

would guess that the Naval architect tries to make it of the ideal 

proportions to begin with. In other words, you are going to have the 

51

right proportion of length overall, beam draft, deck strength and so 

on and so forth, and the boat is designed to handle varying sea 

states in its existing proportion. 

There have been a number of famous cases of failures or believed 

failures, perfect Storm being one, for instance, where a fishing boat 

was altered without consulting a Naval architect in that case and 

wound up, some people think, capsizing because it had lockers installed on the deck that caught a sea that came transverse and 

pushed hard on it and it just rolled over. We will never know about 

that. 

But my question is when you take a 110 foot boat that was originally designed to be the ideal proportions, aren’t you taking it off 

of its ideal proportions by lengthening it, almost by definition? 

Mr. SAMPSON. Absolutely, yes, sir. That was our, one of our main 

points, that this was such an elementary decision point or observation, that if you lengthen a vessel, the midship section modules or 

the strength of that vessel has to be increased. 

This is a high speed craft. You don’t have that much reserve 

margin built into an existing craft or you would overdesign it, and 

it wouldn’t make the speed. So to make the assumption that the 

craft did not have that or that had that reserve strength. 

Mr. HALL. That is what I thought. 

I just noticed in some of the testimony, the written testimony of 

the later witnesses that the design specs call for it to operate up 

to Sea State 5, 8 to 13 foot seas. I used to have a 39 foot cutter 

myself that I sailed in seas bigger than that. 

That seems to me rather like a low threshold for a ship that may 

have to operate, or a boat. It is a ship to me. But anyway, it is a 

boat that may have to operate under considerably more extreme 

weather and does probably. 

On top of everything else, I am just curious how one could not 

overbuild in this situation when you know you are cutting a boat 

open and then sending it. Has that occurred to you? 

Mr. SAMPSON. Absolutely. There are several things that are associated with that performance specification and later information 

that I was told in regards to the requirements. 

We were always verbally told that it was designed to be the same 

capability as a 110, just a 123, so that a 110 for purposes of the 

operators. Mr. Ghosh has commented to me, and he will probably 

confirm this is that the 110 is, in essence, unrestricted. It can go 

out and operate in a sea that normally the human will give up long 

before the ship. 

Mr. HALL. Right. 

Mr. SAMPSON. They will pull the throttles back. With the 123, 

after the failure, it was explained by Mr. Jacoby that the design 

spec was actually poorly written and that the requirements that 

were being interpreted were actually lower than what we felt was 

operationally needed. 

Mr. HALL. Thank you. 

Mr. Atkinson, I just wanted to ask you. I understand that by 

Coast Guard accounts the Matagorda was given its ATO in January of 2005 and then later that year had a visual inspection. Do 

you know if the deficiencies identified in that visual inspection 

were severe and was it appropriate that they were waivered? 

52

Mr. ATKINSON. No, sir. None of the items that were detected in 

the visual inspection should have been waivered. By issuing these 

waivers, they quite literally were covering up significant 

vulnerabilities. While our enemies may not have directly exploited 

those vulnerabilities, they did nonetheless create vulnerabilities 

that the Coast Guard decided were acceptable. 

Mr. HALL. What is the risk to national security if a TEMPEST 

certifications testing process is not done properly and the vessel operates and broadcasts to other vessels? 

Mr. ATKINSON. National security, a foreign government will be 

able to access our classified communications not just on a one ship 

basis but more of an everything our Country has. If they can a detect our codes, our ciphers, our hopping patterns, our communications, they can exploit that not just on the Matagorda but on everything in our inventory. You give them the keys to the kingdom 

when you breach TEMPEST. 

Mr. HALL. Let them in. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. CUMMINGS. Thank you. 

First of all, I want to thank all of you for your testimony. I was 

just sitting here, thinking about what you all have said, and I am 

so glad that we have Americans who care as much as all of you 

care, and I really mean that. 

One of the things that is really nagging at me, though, is Mr. 

DeKort, and I am wondering. 

Mr. Braden, you have been with Lockheed Martin how long? 

Mr. BRADEN. Thirty years. 

Mr. CUMMINGS. Thirty years. 

You have heard the complaints of Mr. DeKort. In your mind, I 

mean the things that you know about that you can express an 

opinion. Were those reasonable things to raise? 

I just want to make sure. Here is a man who, just like everybody 

else, has made it clear that he wants the best for the Coast Guard 

and the best for our Country. I am just wondering. What was your 

opinion on those things? 

Mr. BRADEN. I think the issues he raised, I would expect to be 

raised by any competent program manager, project manager or engineer. 

Mr. CUMMINGS. All right. Thank you very much. 

Mr. Chairman? 

Mr. OBERSTAR. I just want to nail a couple of things down with 

Mr. Atkinson. 

The difference between a visual test and an instrumented test, 

a visual review and certification through follow-up instrumentation 

testing, what is the significance of the one and the other and the 

two in combination? 

Mr. ATKINSON. The physical inspection tells us if hardware has 

been properly placed onto the equipment, that cables are properly 

bonded, that cables are connected properly, that they are properly 

grounded, that isolation distances have been rigorously adhered to. 

Those must be done in a visual inspection before you do an instrumented inspection. 

Mr. OBERSTAR. Is it sufficient to do the visual? If those factors 

are verified, can the inspector say that is sufficient? 

53

Mr. ATKINSON. No, sir. It must pass a visual inspection and then 

pass an instrumented inspection. 

Mr. OBERSTAR. The instrumentation will tell us whether there is 

linkage and what distance and what can happen, how the signal 

can be intercepted, is that correct? 

Mr. ATKINSON. Yes, sir. It is very similar to going to the doctor 

with a cough. The doctor can hear your cough. He can see that you 

are in pain, but he doesn’t know that you have water on your 

lungs. So he will send you to a radiologist to have your chest examined and x-rayed. The x-ray is an instrumented test. An instrumented test is an absolute measure based on scientific principles, 

not just a visual observation. 

The two must be done, but the visual needs to be done before the 

instrumented, and then the visual needs to be repeated on a fairly 

regular basis. 

Mr. OBERSTAR. There is a risk to national security in a vessel 

handling classified information and conducting classified communications with shoreside and airborne equipment. What is the risk 

to national security if a vessel handles such traffic without proper 

TEMPEST certification? 

Mr. ATKINSON. If a Coast Guard cutter goes into the territorial 

waters of Cuba and while they are in the territorial waters of Cuba 

they transmit a classified message through their satellite communications link or through other means and they have leaky equipment and Cuba picks up on those leaks, they will have just disclosed to the Cuban government how our cryptographic equipment 

works, how our C4ISR equipment works, the coding that it works 

on and they will be giving away not only their position, but they 

will be giving away, again, the keys to the kingdom. They will 

allow Cuba to listen in now on any of our ships. 

Mr. OBERSTAR. It can be at close range or at long range? 

Mr. ATKINSON. It can. Depending on the specific vulnerability, it 

can be as little as somebody getting within 30 to 50 feet of a vessel 

or, in other cases, it can be in excess of several hundred miles. 

Mr. OBERSTAR. Under those circumstances, was it an acceptable 

risk that the Matagorda received Authority to Operate in January, 

2005? 

Mr. ATKINSON. No, sir. 

Mr. OBERSTAR. Without an instrumented test? 

Mr. ATKINSON. The Matagorda had an instrumented test. It 

failed. 

Mr. OBERSTAR. Without a successful test. 

Mr. ATKINSON. Without a successful test. However, in Coast 

Guard documents, there is indication that they had planned a second instrumented test which was never accomplished. 

Mr. OBERSTAR. Never accomplished, that is right. 

I thank you very much. 

Mr. Chairman, as you said earlier, I think we should move on 

to the next panel. 

I am grateful to these four public spirited citizens who take their 

sense of responsibility deeply and genuinely, and I am grateful for 

your testimony today. It will help us get the Coast Guard on a better track. 

Mr. CUMMINGS. I understand Mr. Kagen has a few questions. 

54

Mr. KAGEN. Thank you, Mr. Chairman. I apologize for being late. 

Mr. DeKort, I will keep you only very briefly. Would you agree 

that this process of self-certification by Lockheed Martin played a 

key role in the failure that you observed? 

Mr. DEKORT. Yes, sir. It was the fox in the henhouse. 

Mr. KAGEN. So you think this process of self-certification should 

be continued anywhere else? 

Mr. DEKORT. I don’t know that there is a place where you would 

allow self-certifying anywhere whether it is in the Government or 

private enterprise. It just doesn’t sound like something you would 

want to do. 

Mr. KAGEN. Very good. 

Would you also agree that in this project overall there was no effective oversight? 

Mr. DEKORT. Yes. The oversight was not effective, and the reason I hesitated is because I want to draw a distinction between the 

oversight that existed and needing more. I don’t necessarily. I 

know you need more, okay, because of coverage issues. 

Again, there was plenty of oversight, though, with these issues 

being raised with the people who were there who had the authority 

to make changes. So more in this case wouldn’t have solved a 

thing. It was the decisions that the people, they had made, and 

every bit of it could have been avoided. 

Mr. KAGEN. It was the effectiveness of that oversight that was 

lacking. 

Mr. DEKORT. Yes, sir. 

Mr. KAGEN. On a personal note, have you ever, at any time. felt 

that your health or your life was in danger? Do you ever feel nervous? 

Mr. DEKORT. No, sir. I feel that I suffered retribution after this 

while I was in Lockheed Martin, but it never elevated to the point 

where I thought that myself or my family. I never, and nothing 

ever occurred to make me actually think that. 

Mr. KAGEN. Very good. Thank you very much. 

I yield back. 

Mr. CUMMINGS. Just to clear up, following up on Chairman Oberstar’s questions, Mr. Atkinson, one of the most troubling things is 

this whole idea of waivers because you can have all the standards 

in the world, but if you are waiving, that is a problem. 

The Matagorda, the visual TEMPEST test results are the most 

troubling or dangerous from a perspective of protecting classified 

materials, is that right? 

Mr. ATKINSON. No, sir. My concerns would be with all of the 

ships. The Matagorda received extra attention because it was a 

prototype. That which was on the Matagorda is also on the other 

ships because Lockheed Martin was required to make it identical 

on every ship. Therefore, if the first ship failed, all the ships fail. 

If the first ship passes, all the ships pass. All eight ships failed. 

Mr. CUMMINGS. Although there were waivers, I guess you are 

saying that even without the waivers, they would have probably 

failed. 

Mr. ATKINSON. Yes, sir. It is akin to developing a hull breach and 

putting duct tape on it. It will fix it but not really. 

Mr. CUMMINGS. So this is a mess. 

55

Mr. ATKINSON. It is an enormous mess. 

Mr. OBERSTAR. One last question, Mr. Chairman, if I may, I 

know the panel has visited this subject. On the question of certification, would you recommend that for hull for TEMPEST, that the 

Coast Guard engage or be subjected to an outside independent 

party for certification purposes? 

Mr. ATKINSON. That is a very difficult issue. The Coast Guard 

lost their, it is referred to as a CTTA which is a Certified TEMPEST Authority that attends and graduates a TEMPEST school. 

They lost that person due to death prior to the Matagorda being 

commissioned or inspected. 

This person’s second in command was then appointed an acting 

CTTA. He was not formally recognized at, by the National Security 

Agency as the cognizant authority. This is a matter of documentation which the Committee has in their possession. As a result, he 

was not recognized by the NSA as being competent to perform 

these inspections not competent to make the instrumented inspections. 

The Coast Guard turned to the Navy. The Navy sent their CTTA 

to the shipyards. He performed the instrumented inspection which 

had three failure points. 

The report then went back to the Coast Guard acting CTTA, and 

they started issuing waivers. Things were found bad. Instead of fixing it, they threw a waiver on top of it. 

Mr. OBERSTAR. Let me ask the other members of the panel, briefly, your response to that question. 

Mr. SAMPSON. In regards to structural certifications and such, 

sir, Mr. Ghosh would probably be better suited for that question. 

The issue primarily is focused, I think, for purpose of the hull. 

We have the capabilities. It is a matter of whether or not we have 

time, resources or the administrative authority to correct the contractor. 

Many times, as it has been stated before, that I have been told 

many times as an engineer by a contracting officer that we have 

to give the contractor the opportunity to fail, and that is a very 

frustrating position to be when we know for a fact that they are 

going to fail. But because we are required to give them that option, 

if we try to correct the contractor, it is always, well, delay and disruption or you are telling me or my way would have worked, and 

it is a very tenuous situation. 

Mr. OBERSTAR. Mr. Braden and Mr. DeKort, do you have a comment? 

Mr. BRADEN. As I said earlier, I believe that I would say that an 

independent third party that would provide some degree of oversight would go a long way towards resolving differences, subjective 

differences of what a requirement is or isn’t, and I think that 

would help immensely both with efficiency of the Coast Guard side 

and the contractor sides. 

Mr. OBERSTAR. Would the American Bureau of Shipping perform 

that function? 

Mr. SAMPSON. That would be for the hull. ABS does have that 

capability to do certifications of designs, yes, sir. 

Mr. OBERSTAR. Thank you. Thank you. 

Mr. DeKort? 

56

Mr. DEKORT. Relative to TEMPEST, I could see utilizing, sir, the 

Navy to do that because of their capabilities. However, I would 

come back to ships that float, planes that fly. These are basic items 

that are just done, and they are considered to be elementary. So 

I don’t know that we necessarily need to overthink oversight or 

who should be testing. 

You get in your car. You put it in drive. You punch the gas, and 

the car goes forward. If it doesn’t go forward, it failed. I mean, 

sorry. These are basic things. 

The Coast Guard should have equipment that survives the elements. If they don’t, then who is? 

I mean if you have every ship in the Coast Guard inventory, 

matching designs like I have said and Mr. Atkinson, 20 years from 

now, if the Coast Guard gets in level Sea State 6 or whatever condition or excessive whatever it is, who is going to rescue the Coast 

Guard? 

And I would imagine, sir, that you could find pleasure craft, 

okay, especially research vessels that are in much better shape 

than these craft would have been going forward. 

Mr. OBERSTAR. Thank you. 

Mr. GILCHREST. Mr. Chairman, to your left, to the left of the 

Chairman. 

Mr. CUMMINGS. Yes. Sorry, Mr. Gilchrest, my Maryland buddy. 

Mr. GILCHREST. A quick question to Mr. DeKort or anybody else 

who wants to answer this, standard design, and I am curious. People have been making these Coast Guard cutters for a long time 

now. So if you go from 110 feet to 123 feet, why should that be a 

problem? 

Mr. DEKORT. Mechanical engineering is not my background, sir. 

But I will just say from an observer at 30,000 feet, looking in on 

this, it shouldn’t. 

I mean here is the thing. If the contract was that loose or the 

requirements were that gray, I would like to know how is it ELC, 

Mr. Sampson or I figured it out. I don’t know that we had some 

special insight capabilities or we are clairvoyant. 

So we had the same requirement set, the same contract, the 

same everything. Now it wasn’t perfect. Did we need more oversight? Yes. 

Was ICGS potentially a contractual mess? Fine, yeah. 

Could the requirements have been written better? Yeah. 

But we are talking about just elementary items there that really 

don’t take much discussion. 

Mr. GILCHREST. This is Lockheed Martin. This is not a new boat 

builder. 

If it is elementary design to go from 110 feet to 123, I mean is 

this that difficult that the hulls are going to breach? What happened? 

Mr. DEKORT. Sorry. Well, sir, and I can’t speak for the breach, 

but I can speak for all C4ISR. 

Again, it was the perfect storm. They just, they made a strategic 

decision to bid the job without enough C4ISR engineers and to use 

people who literally didn’t have enough background or they didn’t 

have enough people who had the background, and when they got 

into it, they were behind right away because it was aggressively 

57

bid. So they quickly had to make decisions so that they could stay 

on schedule. 

Like I said, the person who picked the non-waterproof radios 

background was a software configuration management specialist. It 

was a hardware item. I mean it sounds kind of incredible, I suppose, but it is literally what happened. 

So that perfect storm just hit it. Sorry, I am mixing metaphors. 

But then it snowballed, and they just got in so deep that I don’t 

know that they could figure a way out. 

Mr. GILCHREST. This was like the chaos theory in reverse. 

Mr. DEKORT. Yes, sir. 

Mr. GILCHREST. Thank you, Mr. Chairman. 

Mr. CUMMINGS. Well, again, I thank you all. 

Mr. DeKort, what you just said, it seems you are right. It seems 

so elementary. It seems so elementary, it is painful, really, and it 

is painful from the standpoint that we are talking about lives, lives 

of our Coast Guard folks. We are talking about ships that are not 

out there now, guarding our coasts, interdicting drug runners, and 

the American people are paying big time. 

So I want to thank all of you. All I can say is—and I will say 

it 50 million times—if we can send people to the moon, we ought 

to be able to fix a ship that is no bigger than this room. It is incredible to me. 

We ought to be able to have communications whereby Cuba and 

other countries don’t even have the capability of eavesdropping 

onto those communications. It is incredible and literally shocking 

to the conscience. 

Thank you all very much. 

We will move on to the next panel. 

Before you all sit down, I am going to administer the oath. 

Do you solemnly swear to tell the truth, the whole truth and 

nothing but the truth, so help you, God? 

[Witnesses respond in the affirmative.] 

Mr. CUMMINGS. Thank you. 

Dr. Mackay? 

TESTIMONY OF LEO MACKAY, VICE PRESIDENT AND GENERAL 

MANAGER, INTEGRATED COAST GUARD SYSTEMS; MARC 

STANLEY, EXECUTIVE VICE PRESIDENT OF GOVERNMENT 

AFFAIRS, BOLLINGER SHIPYARDS, INC.; JAMES E. ANTON, 

EXECUTIVE VICE PRESIDENT OF INTEGRATED COAST 

GUARD SYSTEMS AND VICE PRESIDENT OF THE DEEPWATER PROGRAM, NORTHROP GRUMMAN SHIP SYSTEMS; 

THOMAS RODGERS, VICE PRESIDENT, TECHNICAL OPERATIONS, LOCKHEED MARTIN MARITIME SYSTEMS AND SENSORS; BRUCE WINTERSTINE, PRINCIPAL PROJECT ANALYST, 

LOCKHEED MARTIN MARITIME SYSTEMS AND SENSORS; 

MARYANNE LAVAN, VICE PRESIDENT FOR ETHICS AND BUSINESS CONDUCT, LOCKHEED MARTIN 

Mr. MACKAY. Good evening, Mr. Chairman and Ranking Member. 

I am very grateful to be here on behalf of the people of Lockheed 

Martin and get the chance to explain the progress that Lockheed 

Martin is achieving on the integrated Deepwater system program 

58

where we are responsible for aviation, C4ISR integrated logistics 

and system engineering. 

Lockheed Martin has enabled deployment of more than 75 upgraded HH-65 helicopters featuring more powerful engines, delivered 2 new HC-144A maritime patrol aircraft with 6 more in varying stages of contracting and construction, progressed through developmental tests and evaluation of the HC-144A electronic mission 

system, commenced mission system and sensor installation on all 

6 J Model HC-130 long range search aircraft and sustained service 

of the MH-68A armed helicopters comprised in the Coast Guard’s 

helicopter interdiction squadron. 

Lockheed Martin has upgraded command and control systems 

aboard all the Coast Guard’s 39 medium and high endurance cutters, resulting in significant increases in the seizure of illicit drugs. 

In March, the Coast Guard issued full Authority to Operate, the 

Deepwater command and control system at its district command 

center in Miami in District 7. Achieving Authority to Operate is the 

Government certification that the system performs and operates 

correctly. This system provides enhanced mission planning tools 

and facilitates rapid exchange of information through a common 

operating picture among Coast Guard commands, cutters and aircraft. 

The system is now being installed in Sector San Juan in Puerto 

Rico, soon to be followed by a major Coast Guard commands in 

Massachusetts, Virginia, Washington, Hawaii, California and Louisiana. 

Deepwater is delivering and making a real difference impacting 

drug seizures, migrant interdiction and lives saved. On the Pacific 

Coast earlier this year, the Coast Guard performed a rescue utilizing an HH-65 Charlie helicopter under conditions that would 

have been impossible for the aircraft that it replaced. 

Just last month, the Coast Guard Cutter Sherman, patrolling off 

Central America, utilized its Lockheed Martin installed electronics 

to track passively a ship of interest, to board her without alerting 

her and to coordinate the seizure of a record 21 tons of cocaine with 

a street vale of $300 million via secure satellite communications. 

We take the concerns raised by the Department of Homeland Security’s Inspector General, seriously. 

For example, during a Lockheed Martin review of 123 foot patrol 

boat cabling, it was determined that 85 out of approximately 490 

cables per ship cannot be confirmed as having low smoke properties. Subsequently, the Government determined that the risks 

were low enough to grant a waiver. The cables extend outside on 

the mast or on the deck, are surrounded by windows enabling easy 

ventilation and are short in length. 

After C4ISR equipment environmental requirements were updated in 2005, it became necessary to resolve inconsistencies in the 

specifications. A joint Coast Guard-Lockheed Martin working group 

was established, and after their consideration of the mission criticality of each component, its specification compliance and its function aboard the boat, a request for waiver was determined to be the 

appropriate action. 

This action permitted reconciliation of the program’s acquisition 

strategy to maximize the use of ruggedized, off the shelf commerVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00096 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
59

cial and Government equipment with a multitude of military standards incorporated into the requirements. By requesting a waiver, 

the Coast Guard was afforded the ultimate decision as to a course 

of action according to its standards of cost effectiveness and safety. 

While there has been much discussion regarding C4ISR TEMPEST capabilities, the Inspector General determined in its report 

that the installed C4ISR system was not a security vulnerability. 

In fact, an independent third party, the U.S. Navy Space and 

Naval Warfare Systems Center or SPAWAR as it is colloquially 

known, determined the system on the 123 foot patrol boats did not 

have compromising emissions in two instrumented tests, and it was 

subsequently approved by the Coast Guard to operate in a classified environment. 

Finally, as the Inspector General found, the camera system on 

the 123 foot patrol boats fully complies with the video surveillance 

system requirements. It was designed as part of an overlapping series of measures including sentries and an intruder detection system. Lockheed Martin did not consider it prudent to unilaterally 

increase costs by providing functionality that the customer did not 

want or need. 

We continue to support the implementation, contractual and program management process improvements initiated by the Coast 

Guard as well as the active incorporation of lessons learned. We 

have supported the creation of a joint configuration control board 

and the participation of third parties for independent certification. 

In closing, I would like to read a short quote from the commanding officer of the Coast Guard’s new Lockheed Martin installed C4ISR training center in Petaluma, California: ‘‘The contrast between our tools of 1983 and the tools of the future ships 

like the Bertholf is significant. I remember analog radar, message 

traffic by teletype, paper charts and maneuvering boards, Polaroid 

cameras and slow criminal history checks.’’

‘‘By contrast, our new National Security Cutters will train on 

computerized digital sensors, radar and charts, have live sharable 

digital video, message traffic by PC, voice communications with 

anyone, clear or secure, and real time criminal histories and intelligence checks.’’

‘‘The Coast Guard will have increased maritime domain awareness to identify threats and a common operating picture to act 

when necessary, all to protect our coastlines and citizens.’’

Thank you again for the opportunity to present and explain the 

progress we are achieving on the Deepwater program. I look forward to answering your questions. 

Thank you, Mr. Chairman, Mr. Ranking Member. 

Mr. CUMMINGS. Thank you very much. 

Mr. Stanley, do you have a statement? 

Mr. STANLEY. No, I don’t have a statement. I am here to answer 

questions. 

Mr. CUMMINGS. Thank you very much. 

Mr. Anton? 

Mr. ANTON. Good evening, Mr. Chairman and Ranking Member 

of the Committee, and thank you for the opportunity to appear before you to discuss the Deepwater program. 

60

I am the Executive Vice President of Integrated Coast Guard 

Systems and the Vice President of the Deepwater Program of Northrop Grumman Ship Systems. 

As you may know, NGSS has nearly 70 years of experience designing, constructing and maintaining ships of all types. In that 

time, NGSS Gulf Coast operations has produced a total of 534 

ships and has built nearly a quarter of the Navy’s current fleet. 

On behalf of the Northrop Grumman and all the men and women 

working in support of this program, I would also like to thank this 

Committee for their strong support of the Coast Guard and of the 

Deepwater program. 

The 110 foot patrol boats have seen extensive duty since their 

entry into service some 20 years ago. The 123 conversion was intended as an interim measure to enhance the capabilities of the 

aging patrol fleet until a new vessel, the Fast Response Cutter, was 

available to replace it. 

The conversion work was performed by Bollinger Shipyards, the 

original builder of the 110s under subcontract to Northrop Grumman. 

The conversion project underwent a traditional set of design and 

review processes with contractor and Coast Guard personnel. After 

being awarded the patrol boat conversion work but before beginning the actual conversion work, the Coast Guard, ICGS, NGSS, 

Lockheed Martin and Bollinger with their joint venture partner, 

Halter, engaged in design reviews including a preliminary design 

review, a critical design review and a production readiness review. 

These reviews were reviews of the 123 conversion design which 

were presented to the Coast Guard in increasing levels of details. 

Although not a contract requirement, ICGS conducted the Preliminary Design Review or PDR. As part of the PDR process, drawings and analysis were submitted to the Coast Guard for consideration and review. Half of the attendees at the PDR were Coast 

Guard personnel. 

The next stage was Critical Design Review or CDR. In conjunction with CDR, the Coast Guard reviewed a series of design 

deliverables. CDR presentations included results from a number of 

design tests, and the Coast Guard represented nearly half of the 

attendees. 

CDR was followed again by a Production Readiness Review. During the PRR, the production process, procedures and state of the 

design to convert the 110 vessel into the 123 were presented. As 

with the design reviews, the Coast Guard fully participated in the 

PRR process. 

Four days later, the Coast Guard delivered the Matagorda to 

Bollinger for conversion in Lockport, Louisiana. 

In addition to these various reviews with the Coast Guard during 

the conversion of the first vessel, the Matagorda, the American Bureau of Shipping examined the design of the hull extension, the 

new deckhouse and monitored key elements of the work being performed. The Coast Guard also had a Program Management Resident Office on site to oversee the 123 conversions. 

At the completion of each conversion and as part of the acceptance process, the Coast Guard, similar to what the Navy does, established an In-Service Inspection Board to examine the performVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00098 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
61

ance of the converted cutter and make a formal recommendation of 

acceptance. 

At the conclusion of the Matagorda work, Abs issued a letter of 

approval for the conversion work and expressed no reservations 

with the feasibility of the conversion. 

Based on all of these reviews and actions, the Coast Guard accepted delivery of the Matagorda. This same process was applied 

to each of the seven patrol boats delivered to and accepted by the 

Coast Guard. 

To date, the problems associated with the 123 conversion include 

buckling or hull deformation and shaft and propeller line problems. 

Neither Coast Guard engineers nor our engineers have been able 

to determine the root cause for the 123 patrol boat structural problems. 

We understand that Admiral Allen has decided to decommission 

the eight 123 boats converted under the Deepwater program. We 

are not privy to the research, tests and reports that led to this decision. We will continue to support the Coast Guard’s effort to address its mission needs. 

Thank you again for the opportunity to discuss with you the 

Deepwater program. 

Mr. CUMMINGS. Does anyone else have a statement? 

Thank you very much. 

Let me just begin the questioning. To Mr. Rodgers, what position 

did you hold with regard to the Deepwater program? 

Mr. RODGERS. From January, 2003 through September, 2005, I 

was the Lead Program Manager for Lockheed Martin. 

Mr. CUMMINGS. Did that position give you the overall day to day 

costs and schedule responsibility for the entire Deepwater and 

C4ISR effort? 

Mr. RODGERS. The C4ISR effort was part of that responsibility. 

Mr. CUMMINGS. All right. Was there ever any suggestion provided by you or your superiors at Lockheed Martin that costs and 

schedule goals were paramount and that the mission needs of the 

Coast Guard took a back seat to these considerations? 

Mr. RODGERS. No, sir. 

Mr. CUMMINGS. Was there pressure to produce this? 

You were here when Mr. Braden testified, were you not? 

Mr. RODGERS. Yes, I was. 

Mr. CUMMINGS. I think he talked a little bit about pressure. I am 

not trying to put words in his mouth, but he did talk about pressure. So you don’t know anything about that pressure, the pressure 

that he talked about? 

Mr. RODGERS. From an overall program, there is always pressure 

to perform in that sense. In my 24 years, there is always pressure 

to execute the job you are assigned to. 

Mr. CUMMINGS. Is it the case that employees of Lockheed Martin 

regarding an assignment to the Deepwater project as a type of punishment? Did you ever get that impression? 

Mr. RODGERS. No, I did not. 

Mr. CUMMINGS. To what degree did limited resources available 

for the C4ISR components of the Deepwater project contribute to 

the failure of Lockheed to meet all contractual requirements of the 

systems installed in the 123s? 

62

In other words, were there budgetary problems? 

Mr. RODGERS. Overall, we had a schedule challenge. We missed 

the original schedule in November of 2003, and it was replanned 

with the Coast Guard to March of 2004. The major focus area was 

how do we achieve the first delivery. 

Mr. CUMMINGS. Wait a minute. I am sorry. I didn’t hear a word 

you said. 

Mr. RODGERS. Okay. 

Mr. CUMMINGS. Say that again. 

Mr. RODGERS. The original schedule for delivery of the 123 was 

November of 2003, and we did a replan with the Coast Guard to 

make that March of 2004. 

Mr. CUMMINGS. All right. 

Mr. RODGERS. So from a schedule point of view, we replanned the 

original schedule. 

Mr. CUMMINGS. All right. Now you heard the testimony of Mr. 

DeKort, did you not? 

Mr. RODGERS. Yes, I did. 

Mr. CUMMINGS. Were you here for the entire testimony? 

Mr. RODGERS. Yes, I was. 

Mr. CUMMINGS. Did Mr. DeKort raise each and every one of 

these issues to you and your superiors, the ones that he stated? 

Mr. RODGERS. Not to me personally. 

Mr. CUMMINGS. Did you know about them? 

Mr. RODGERS. I knew. I knew after the fact in a sense that I 

knew there were some issues. I facilitated him meeting with some 

of senior management. To that point, I was aware of them. 

Mr. CUMMINGS. In other words, did you know what he was going 

to meet with senior management about? 

Mr. RODGERS. I know he had some concerns with the program 

that were not being addressed, and he wanted to have the ability 

to talk to some people in more senior management. 

Mr. CUMMINGS. In other words, you made it possible for him? 

Mr. RODGERS. That was facilitated. 

Mr. CUMMINGS. So you never really discussed them in any kind 

of detail, is that what you are saying? 

Mr. RODGERS. Yes, from my seat, I would not. I was the overall 

program manager. So I would not have spoken in technical detail 

to his concerns. We would have relayed that to engineering. 

Mr. CUMMINGS. Let me ask you this. Do you know whatever became? Do you know who he met with as a result of your facilitating 

discussions? Do you know who he met with after that, in other 

words, who you made it possible for him to talk to? 

Mr. RODGERS. He mentioned in his testimony that he met with 

the Vice President of Engineering, Carl Bannar. I was aware of 

that meeting. 

Mr. CUMMINGS. You know for a fact that he did meet with the 

Vice President. What is his name again? 

Mr. RODGERS. Carl Bannar. 

Mr. CUMMINGS. You know for a fact that he met with him? 

Mr. RODGERS. I knew that meeting was being set up and I have 

no reason to believe that did not happen. 

63

Mr. CUMMINGS. You did hear. I guess to facilitate the meeting, 

you had to hear a little bit about what he was concerned about. Did 

you have an immediate response other than facilitating a meeting? 

Mr. RODGERS. Overall, he has a chain of command within his department. His concerns, I believe, were expressed to his chain of 

command as he testified. 

Mr. CUMMINGS. Where would you have been on the chain of command in regard to him? 

Mr. RODGERS. I was the overall Program Manager. 

Mr. CUMMINGS. In other words, what I am trying to say is he 

had to go two steps up to get to you? Were you on the same level? 

I am trying to figure out. 

Mr. RODGERS. In general -

Mr. CUMMINGS. Hear my question. I am just trying to figure out 

where you fit on the chain. 

Mr. RODGERS. Overall, from a Lockheed perspective, there was 

approximately 350 people in the Deepwater program. I was the 

overall lead. 

Mr. CUMMINGS. The last words? 

Mr. RODGERS. I was the overall lead. 

Mr. CUMMINGS. So you were like at the top? 

Mr. RODGERS. Or second to the top, yes. 

Mr. RODGERS. Okay, so in order for him to get to you, that meant 

he skipped over some folks. 

In other words, what I am trying to get to is he got to you, and 

you said there is a chain of command. You said there are some 300 

people. You are at the top. So you then told him to meet with somebody above you. Is that it? 

Mr. RODGERS. Overall, he had some engineering concerns. We 

had him meet with the head of engineering to share his concerns. 

Mr. CUMMINGS. The person who you facilitated the meeting with, 

the vice president that you spoke of. 

Mr. RODGERS. Yes. 

Mr. CUMMINGS. That person was above you. 

Mr. RODGERS. Correct. 

Mr. CUMMINGS. Okay, gotcha. 

You are familiar with the Deepwater program, and you just said 

that you were responsible for the day to day costs and schedule responsibilities. So you are pretty familiar with it, are you not? 

Mr. RODGERS. I left the program 18 months ago. So I am familiar 

with it up until September of 2005. 

Mr. CUMMINGS. Well, let me ask you. You heard the complaints 

of Mr. DeKort today, did you not? 

Mr. RODGERS. Yes, I did. 

Mr. CUMMINGS. I am just wondering. Do you have an opinion? Do 

you think they were reasonable complaints? 

Mr. RODGERS. The first time I read his complaints was in the Inspector General’s report which when I called to testify I read. I understand the Inspector General’s report. I don’t have a specific 

opinion on his complaints from a technical perspective because his 

complaints to me are technical perspectives. 

Mr. CUMMINGS. Is that unusual for employees to have complaints 

of this nature, to have had them with regard to this Deepwater 

program? I am just curious. 

64

I am sure you have done other programs too. Is it unusual for 

people to bring issues like this to you? 

Mr. RODGERS. No, it is not unusual for people to bring issues like 

this to me. 

Mr. CUMMINGS. Now did you ever have a conversation with the 

vice president that you referred him to about his complaints? Was 

there ever a conversation, ever? 

Mr. RODGERS. No, not about his complaints, specifically. 

Mr. CUMMINGS. Say that again. 

Mr. RODGERS. Not about his complaints, specifically. 

Mr. CUMMINGS. About him? 

Mr. RODGERS. Other than facilitating the meeting, I did not get 

feedback from the meeting. 

Mr. CUMMINGS. All right. Now were you aware that Lockheed 

had planned to install a non-waterproof radio in the prosecutors’ 

launch from the 123s? Were you aware of that? 

Mr. RODGERS. No, I was not. 

Mr. CUMMINGS. Were you aware that the installation of a nonwaterproof radio would put the crew or the prosecutors at risk of 

potential electric shock? 

Mr. RODGERS. Can you clarify when you say are you aware? 

Mr. CUMMINGS. Well, this is what I am asking you. You are the 

day to day guy. 

Mr. RODGERS. Right. 

Mr. CUMMINGS. You are number one and number two. You are 

up there. You are up there, and you said, I didn’t say this, you said 

it. You are the day to day costs and schedule responsibility guy, 

and you said you are familiar with the project. 

Mr. RODGERS. Correct. 

Mr. CUMMINGS. I mean is that right? I am not trying to put 

words in your mouth. 

Mr. RODGERS. 123 is just one of many projects within the Deepwater program. 

Mr. CUMMINGS. Okay. Now what I am asking you is that I think 

you would agree if you heard Mr. DeKort, and I think maybe another person may have said it too. This radio that they use is their 

means of communication. Is that right? 

Mr. RODGERS. I am not a technical expert on the 123 design. 

Mr. CUMMINGS. Let me ask you this. If you are producing a boat 

and water is splashing up on it and there is a radio, would you 

deem it prudent to have a radio that is waterproof? 

Mr. RODGERS. Yes, I would. 

Mr. CUMMINGS. Let me ask you something else. Were you aware 

that the topside equipment was installed on the 123s that would 

not meet environmental requirements? 

Mr. RODGERS. No, I was not aware at that time. 

Mr. CUMMINGS. Were you aware that Mr. DeKort tried to identify this noncompliant equipment and have it replaced and that 

Lockheed directed him not to do so? 

Mr. RODGERS. No, I was not aware of that. 

Mr. CUMMINGS. Were you aware that the contractor eventually 

self-certified that the topside equipment met specifications when, 

in fact, it did not? Did you know that? 

That is from the IG report? Are you aware of that? 

65

Mr. RODGERS. I have read the IG report once. I am not familiar. 

I have not studied its contents. 

Mr. CUMMINGS. Let me ask you this. Do these things that I am 

saying to you concern you? 

I mean, in other words, you were the top guy. 

Mr. RODGERS. Right. 

Mr. CUMMINGS. We have a radio that is not waterproof. We have 

got topside equipment that they claimed met specifications but 

didn’t, and you are the top guy. You are the one, I guess, that if 

anything goes wrong, somebody says, wait a minute, what happened? Is that right? 

You are the one that I guess the President would ask the questions of. 

Mr. RODGERS. I have overall program oversight. 

Mr. CUMMINGS. Does it concern you that these things have come 

out in the IG report when you were responsible for this? 

Mr. RODGERS. From an IG report, as I said, I read it. I have not 

studied its results. I have been off the program. The first time I 

saw the IG report was on Tuesday of this week. 

Mr. CUMMINGS. Maybe you can answer this and maybe you can’t. 

Why was the deficiency in the topside equipment on the 123s not 

clearly spelled out on the Matagorda’s DD-250 as the intention to 

submit a waiver for noncompliance when the requirement for low 

smoke cabling was clearly singled out in the DD-250? 

Mr. RODGERS. I don’t know. 

Mr. CUMMINGS. Was the deficiency with the topside equipment 

noted on any of the DD-250 forms or any of the eight 110 foot patrol boats lengthened to 123 feet? 

Mr. RODGERS. I would not have had the day to day cognizance 

of what went on that 123 DD-250. 

Mr. CUMMINGS. Did the integrated team indicate on self-certification forms that there were no applicable environmental requirements for the topside equipment? 

Mr. RODGERS. I am not familiar with the self-certification form. 

Mr. CUMMINGS. Is there anybody up here that would be familiar 

with that? Do you know? Nobody? 

Can you all, can anybody tell us who we can get the answers to 

these questions from? Anybody? 

Mr. Mackay, you seem like you have got an answer? 

Mr. MACKAY. Mr. Chairman, if I might. 

Mr. CUMMINGS. This concerns us because we are here just trying 

to get to the bottom of some things, and you tell us that you are 

in charge. This is a major corporation, major project. You are sitting there under oath, and then you tell us you don’t know anything. 

Mr. Taylor said something that was very interesting when he 

talked about the fact that he couldn’t understand why nobody had 

been fired. I guess nobody has been fired because nobody knows 

anything. 

Mr. Mackay? 

Mr. MACKAY. Mr. Chairman, if I might, just to explain some 

things about the way the certifications and the other things, the requirements on the program are determined. As other people have 

mentioned, it is an IPT environment, and issues are vetted in a 

66

joint environment—Coast Guard, Lockheed Martin, Northrop 

Grumman, industry. 

In specifying a ship program and the C4ISR specifically on that, 

the way the program operated was that there is a cutter certification matrix, some 1,700 documents that have all the requirements and specifications that cutter, that go into outlining the requirements for a cutter, that industry must meet as it presents the 

cutter for DD-250 and acceptance. 

What happens is from those universal requirements, the cutter 

specific certification matrix or a subset of those requirements is 

called out, and they are either assigned to the HM&E lead, Northrop Grumman, Bollinger, Halter-Bollinger, those folks or to 

C4ISR. 

In the event as I understand it and have talked to people who 

have contemporaneous knowledge, the issue is that if you look in 

the IG report, the standard that is called out, Mil. Standard 1399 

Charlie, at the time was only specified for HM&E. It was not specified for C4ISR. It was not until the July, 2005 timeframe that that 

specification was deemed and agreed to by Coast Guard and industry working together, that that specific sort, Sort 21, if you look on 

the document, presented in the IG report, photostatically copied 

there, was deemed to apply to C4ISR. 

That is why if you look closely at that document, the signature 

attesting to the S016 is from Bollinger. They were attesting to environmental standards with respect to HM&E. 

Once those, it was understood that those should be assigned 

properly to C4ISR, a joint working group was undertaken, and as 

the IG outlines in its report, eventually a request for waiver process was undertaken. 

And let me be clear about what that process entails. Industry 

presents to Government the conditions, specifications, costs of complying with the requirement. Then Government looks at that data 

and makes an independent judgment based on its standards of cost 

effectiveness, its assessment of the safety consideration and either 

grants the waiver or deviation or does not do so. And so, it is a 

very disicplined process in which all the facts relevant come out on 

the table, and the Government is allowed to make a decision about 

the prudence of a waiver or deviation or compliance to the requirement. 

And so, the form S016 that is photostatically copied in the IG report does not bear a Lockheed Martin signature because at that 

time on the program in March, 2005-FE I think if you look on the 

document-FE those specifications, Mil. Standard 1399 Charlie or 

Sort 21 as it is also called right there on the form were not understood by either Government or industry to pertain to the C4ISR 

portion of the program. 

That judgment was subsequently corrected or changed, altered 

by mutual agreement. 

Mr. CUMMINGS. The Coast Guard has always said that the certification was required. Are you familiar or aware of that? 

You haven’t heard the testimony. But are you aware of that? 

Mr. MACKAY. No, sir, I am not. 

Mr. CUMMINGS. They have consistently said that. 

67

Mr. MACKAY. The facts that I am aware of, Mr. Chairman, are 

that it was not until July, 2005, that that specific sort was deemed 

to apply to C4ISR. It was given to the HM&E side of the program. 

It was not given to the C4 side until later in the spring, summer 

timeframe of 2005. 

Mr. CUMMINGS. Would it concern you if we produced a system. 

C4 system, where the Cubans and others could eavesdrop? 

I am just curious. Would that concern you? 

You know I look, I watch when a President comes to the capital, 

and they go through 50 million changes. They bring in all kinds of 

experts to make sure he has got a secure line. I mean they have 

somebody guarding the line. I mean literally. I wish you could see 

the operation. 

When I listen to the testimony that we heard a little earlier 

about countries being able to eavesdrop, I am just wondering is 

that something that would concern Lockheed Martin? 

Mr. MACKAY. Yes, sir, it very well would, and I would like to just 

read from the DHS IG report on page five. You know the complaint. I am quoting here. I am reading from the report itself. 

The complaint also alleged that the use of non-braided cable 

would limit the 123 cutter’s ability to meet TEMPEST testing requirements which we have talked about at length here. However, 

TEMPEST testing conducted on the Matagorda and Padre between 

February, 2004 and July, 2006, indicated the cabling installed on 

the C4ISR upgrade was not a source of compromising emissions. 

Those instrumented tests were conducted by SPAWAR, by the 

Navy Space and Electronic Warfare Command, the U.S. Navy with 

all their expertise. 

Mr. CUMMINGS. To your knowledge, was there ever certification, 

TEMPEST certification done and it passed? 

Mr. MACKAY. I am not. 

Mr. CUMMINGS. Are you familiar with any TEMPEST certification that took place with regard to the systems that you put in 

place? 

Mr. MACKAY. I am aware of these tests that were done by the 

Navy’s Space and Electronic Warfare Command. One was done 

prior to the DD-250 or the acceptance of the vessel in the February, 

2004 timeframe, and the other was done in 2006 after the allegations were raised in the IG report, sir. 

Mr. CUMMINGS. Now, why were you testing in 2004? 

Mr. MACKAY. That would be testing pursuant to the DD-250 

which is the turning over of the vessel from industry to Government. It is an acceptance form. That is what a DD-250 is, sir. 

Mr. CUMMINGS. You were testing then. So then there were tests 

later on. Is that correct? 

Mr. MACKAY. Yes, sir. After the IG report and the concerns were 

raised, another instrumented test was performed by the Navy and 

SPAWAR, and I just read the quote from the IG report about the 

results of those instrumented tests conducted by the Navy. I can 

read it again, sir, if you would like. 

Mr. CUMMINGS. No. I am going to come back. 

Mr. MACKAY. Yes, sir. 

Mr. CUMMINGS. Mr. LaTourette? 

Mr. LATOURETTE. Thank you very much, Mr. Chairman. 

68

Just a couple of observations before I make my questions, I 

would say to the Chairman over my spring vacation, one of the 

places that I visited was the Lockheed Martin site in Akron. Mr. 

Chairman, you should see. They have taken over the air dock down 

in Akron, Ohio. It is one of three, it is my understanding, that are 

existing still in the Country, and they are going to build a high altitude airship. We are not only excited about that, but we are 

happy with the work of the aerostats that are protecting our border 

and also doing yeoman’s work at 5,000 feet in the Middle East. 

Having said that, I know that you were all in the room for the 

first panel. There is nobody, I think, on the Committee, there is nobody in the audience, there is nobody in the Country that thinks 

that spending $90 million for eight ships that don’t work is a good 

idea or that it is acceptable. If anybody think that it was a good 

idea, then you can chime in, but I don’t think I am going to get 

any responses. 

There is a big difference between that in my mind because you 

prosecute people. You sue people. Money damages are awarded. 

There is a big difference between that and some of the stuff that 

came up during the first panel and then some of the accusations, 

quite frankly, that are being leveled against Lockheed Martin. 

The staff tells me that these cameras located around here, 60 

Minutes, and I am going to tell you that there are two types of stories. There is bad performance on a contract which is unacceptable, 

but there are also two allegations that I really think, Dr. Mackay, 

I would like you to address, that have been made during the course 

of the first panel and maybe as we proceed. 

Mr. DeKort, the whistleblower in this case, and let us start with 

one first and that is national security. The story sort of perking 

under the surface here is that because of a difference between $7 

a cable, $7.95 for 10 feet of a cable and $27.95 for 10 feet of cable, 

that Lockheed Martin in the reconfiguration of these 110 foot ships 

made either a schedule decision or a cost decision to put our national security at risk by installing aluminum mylar cable instead 

of the braided shielded cable. 

I think I need you to tell me what you think about that allegation. 

Mr. MACKAY. Well, what I will tell you is what I know, sir, is 

that, and these facts are verified by the IG report, the aluminum 

mylar cable met contract specifications. I think the experts that 

were here said that there are design choices that are made. Braided cable has some superior characteristics, but it is not always and 

universally a superior or the appropriate choice. 

As verified by the IG report, the aluminum mylar met contract 

specifications and both these tests conducted by the Navy’s 

SPAWAR and reported in this IG report said that there were no 

compromising emissions. That is what. 

Mr. LATOURETTE. That is my next question because Mr. Atkinson said. You may remember I asked Mr. Atkinson, can any witness under oath, but even not under, I mean I don’t think everybody has to be under oath. If they don’t tell the truth, that is a 

bad thing, the oath notwithstanding. 

But I believe in response to my question, can any witness come 

before us and indicate that this system passed the TEMPEST test, 

69

and he said that anybody that said that would be committing perjury. 

Now I understood you to not only read that section on page five 

of the IG’s report but I understood you to say in your introductory 

testimony that the TEMPEST system passed. Is that right? 

Mr. MACKAY. Sir, what I am attesting to is what I read. 

Mr. LATOURETTE. Right. 

Mr. MACKAY. There were no compromising emissions. That was 

the judgment of the DHS IG reviewing that data. 

Mr. LATOURETTE. Okay, but for your sake as well as the Country’s sake, I want that in language that people sitting home apparently some Sunday evening can understand. 

The allegation was made that Fidel Castro is going to be listening in on our most secure communications. The keys to the kingdom was the phrase used by the first panel. Because Lockheed 

Martin made a design choice to put in the $7.95 cable as opposed 

to the $27.95, the keys to the kingdom are given to Fidel Castro 

and our enemies. I want you to tell me that that is not so if you 

believe that. 

Mr. MACKAY. Sir, that is what I believe, and that is what, if you 

read the Inspector General’s report, that is what they attest to. 

Mr. LATOURETTE. Now let me get to the second issue because 

just as important, if not more important, than national security are 

the lives and the well being of the Guardsmen that serve on these 

ships. Mr. DeKort’s second observation was about low smoke cabling. 

I think Mr. Oberstar was exact. I think many of us remember 

what happened when the bundled cables ignited, and we had horrible problems on airplanes. There has to be a reason for low smoke 

cabling specifications for fires as well as certainly the health and 

safety of the crew. 

I understood you to say that you went to the Coast Guard. Who 

came to who on the low smoke cabling? 

I am sorry for not remembering. Did you go to them for the waiver or did they come to you and ask for a waiver? 

Mr. MACKAY. Since we are in an IPT, it is sort of we always discover these things in almost simultaneously, sir. 

Mr. LATOURETTE. Okay, but regardless, a waiver was granted. So 

somebody reached the conclusion, and maybe jointly if you are all 

in these meetings, that low smoke cabling wasn’t required on these 

110 conversions or at least waived that requirement. 

Mr. MACKAY. The determination was made that in a situation 

like this, you examine all of the relevant facts which is where the 

low smoke cabling is, what the density of it is. Those are just a 

couple of things. When an analysis was done, 85 of 490 C4ISR cables that are on each individual ship were not low smoke. 

A couple of facts: 16 of the 85 cables were actually extended outside to the mast or on deck. So if the issue is that when there is 

a fire, that there are fumes, those fumes immediately waft away. 

Seventy-one of the 85 cables run into the pilothouse which is surrounded by windows enabling easy ventilation and the cables. 

We are using commercial off the shelf or Government off the 

shelf equipment, trying to maximize savings. That is our acquisition strategy. And so, a lot of times you have proprietary cable asVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00107 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
70

semblies where there is not a low smoke equivalent available. 

There are cable assemblies that are attached to equipment, to 

radar masts and the like. Sometimes if you remove the manufacturer supply cable, you void the manufacturer’s warranty, and in 

some situations it might be cost prohibitive due to the employment 

of unique connectors. 

But all of that data, and it is a request for waiver or deviation. 

All of that data, all those considerations are bundled together. 

They are given to the Government. 

The Government makes a judgment based on cost effectiveness, 

its safety standards, how much risk it is willing to take and whether it is a prudent risk, and they either grant a waiver or they say 

no, you have to. That is the process, sir. 

Mr. LATOURETTE. I get that. I get that. During these hearings, 

I think there was bad judgment all the way around. 

But, again, I want this to be real clear on the record. The allegation is made, and people aren’t being shy about the allegation here. 

The allegation is made to save money, to meet a deadline, Lockheed Martin installed low smoke cables on a ship that endangered 

the lives of Coast Guardsmen, and I want you to tell me whether 

that is true or not. 

Mr. MACKAY. No, sir. 

Mr. LATOURETTE. Because of the explanation, I assume. 

Mr. MACKAY. The explanation, I assume? I am not saying that 

there is no low smoke, that there is not, that all the cabling is low 

smoke 

Mr. LATOURETTE. I know that. 

Mr. MACKAY. I said that for all the factors that I mentioned. 

Mr. LATOURETTE. But my question was the allegation is that by 

not using low smoke cables, you put Coast Guardsmen at risk and 

you put the ship at risk. I believe your answer is no, but could you 

just say no if that is your answer. 

Mr. MACKAY. No, sir, not in the judgment of the Government 

which granted the waiver. 

Mr. LATOURETTE. Okay. The last question, Mr. Chairman, just so 

we are not parsing words. 

On the TEMPEST system passing, I think that if Mr. Atkinson 

were able to come back in here and take another swing, he would 

say that the reason that the TEMPEST system passed the 

SPAWAR test was because so many waivers were granted that it 

really didn’t pass the test; it passed a test that wasn’t a test. 

Would he be right if he said that? 

Mr. MACKAY. Sir, that is a question that would have to be asked 

to the Government agencies that granted that. 

Mr. LATOURETTE. Then I will. 

Mr. MACKAY. And also to, I guess, the IG that made the determination that there were no emanations that compromised those 

standards, sir. 

Mr. LATOURETTE. Right. Okay, thank you very much. 

Thank you, Mr. Chairman. 

Mr. CUMMINGS. In fairness, I want to be real clear. We are under 

oath, and I want to be real clear. 

SPAWAR has stated to this Committee that they did not certify 

the ships in an instrument test. They simply ran a test. They gave 

71

the data to the Coast Guard. It had deficiencies. The Coast Guard 

has turned over records that we have in our possession, that we 

have reviewed, that showed that they could not have passed and 

if they did ‘‘pass’’ it was because of waivers. 

The IG told the Committee that the Coast Guard told them they 

passed. In other words, the Coast Guard says they passed, but the 

IG did not have the expertise, and that is according to the IG, to 

evaluate the records. And so, the Committee did have the records 

evaluated. 

We can mess with words from now until forever, but we have 

gone through 50 million changes getting records. As a lawyer, I 

have never seen anything like it, from the Coast Guard mainly. 

Our staffs have spent literally 19 hour days going through those 

records. We got records as late as yesterday evening that we requested almost a month ago. 

I hear you, Mr. LaTourette, but I don’t want the record to remain 

there, that there is something where there has been TEMPEST 

certification because I know you are as concerned as I am that certification has been, in fact, done. All I can say is that is what we 

have. 

I am going to come back to you, Mr. Rodgers, because I have 

some concerns about some of your testimony, but now we will go 

on to Mr. Oberstar. 

Mr. OBERSTAR. Was there a contract specification for a particular 

type of radio for these vessels? 

Mr. MACKAY. Mr. Chairman, if you are directing that at me, I 

was not on the program at that time. My entry to the program was 

in July of 2005. I don’t have any contemporaneous knowledge of 

that. 

Mr. OBERSTAR. Well, in the contract, this is an unusual type of 

contract in which there was an absence of very specific contract 

specifications. So in the agreement, in the contractual agreement 

between the Coast Guard and Lockheed who is the electronics suppliers, was the contractor free to choose what it, in its judgment, 

felt was the proper equipment to put on board this class of vessels? 

You don’t know? You can’t answer that question? 

Mr. MACKAY. With specific reference to those radios, no, sir, I 

cannot. 

Mr. OBERSTAR. Is anyone on the panel able to answer that question? 

Mr. RODGERS. Dr. Mackay mentioned the IPT. Within the IPT 

environment, the Coast Guard working with ICGS, with Northrop 

Grumman and Lockheed Martin would then have gone through 

that process to choose which radios. 

Mr. OBERSTAR. So somebody made a choice for a radio that was 

not waterproof to be operating at sea in an exposed situation where 

it could short out or shock someone or worse, right? 

No one wants to take responsibility for that. No one knows anything about it on the panel. 

Lockheed was the contractor, right? 

Mr. MACKAY. Yes, sir, I just, my experience on the program just 

doesn’t extend back that far, Mr. Chairman. 

Mr. OBERSTAR. The issues that I think Mr. LaTourette was raising about whether individuals were compromised is not a question 

72

of whether he made a deliberate choice of the type of cable to 

achieve a particular end, but the fact is that this cable was not sufficient. The cable used on the to-be 123 foot patrol boats was not 

sufficient to prevent leakage, correct? 

That is what we heard from the previous panel. 

But on the 170s, that cable, the more secure cable was, in fact, 

used. Now why was cabling on one class of vessels used at a higher 

level and a different level used on the other class of vessels? 

Dr. Mackay, have you got an answer? 

Mr. MACKAY. I don’t, Chairman. As I mentioned, my tenure on 

the program doesn’t extend back to that timeframe. I can take the 

question for the record if you would like. 

Mr. OBERSTAR. Mr. Winterstine, do you believe Lockheed made 

the right technical, contractual and ethical decisions on the 123 

program? 

Mr. WINTERSTINE. Mr. chairman, Lockheed Martin entered into 

a contract arrangement to satisfy the 123 requirements that we 

had under contract. We went through the design processes, shared 

those designs with the Coast Guard, discussed those designs with 

the Coast Guard and then implemented those designs. So, yes, sir. 

Mr. OBERSTAR. You are the Program Management Liaison of the 

integrated team. 

Mr. WINTERSTINE. Yes, sir. 

Mr. OBERSTAR. Are the allegations made that you heard previous 

by Michael DeKort, are they with or without merit? 

Mr. WINTERSTINE. Mr. Chairman, Mr. DeKort made quite a few 

allegations. I would rather not offer opinion, sir. 

Mr. OBERSTAR. Well, on January 7th, 2004, Mr. DeKort sent a 

memo to a number of people including Mr. Rodgers, and there are 

others, Mr. Clifford; Mr. Ewing, Patrick; McLaverty, Brian. Brian 

McLaverty, I am sorry, I just got the names in reverse order. 

In which he says: ‘‘I have become increasingly frustrated with 

the direction the Deepwater project is following, and we have sacrificed hard earned and well founded engineering and customer focused principles in order to meet the needs of nonrealistic schedules. I believe this path will lead, at best, to the delivery of a substandard product that will harm our reputation and, at worst, the 

delivery of a product that will hamper our customers’ ability to successfully carry out their mission.’’

Are you aware of that memo? 

Mr. WINTERSTINE. No, sir, I am not. 

Mr. OBERSTAR. Mr. Rodgers, you were on that memo. Are you 

aware of it? 

Mr. RODGERS. Not specifically. 

Mr. OBERSTAR. If you received such a memo, would that get your 

attention? 

Mr. RODGERS. Was it a memo? Was it e-mail? 

Mr. OBERSTAR. Whether it was an e-mail or a memo makes no 

difference. It was a message sent on January 7th, 2004, time, 11:53 

a.m. Maybe it was an e-mail. 

The question is it is a very strong allegation: a substandard product that will harm our reputation and, at worst, the delivery of a 

product that will hamper our customer’s ability to successfully 

carry out their mission. 

73

Mr. RODGERS. Sir, what you are referring to is an e-mail, and I 

am not specifically familiar with this e-mail itself. 

Mr. OBERSTAR. If you had gotten that, would that trouble you? 

Would you want to do something about it? 

Mr. RODGERS. Overall, with that said, I would encourage him to 

express his concerns to his management and let us get them adjudicated. 

Mr. OBERSTAR. Well, it doesn’t appear that much was done about 

it. It was sent. You didn’t see it, and you were one of the assignees. 

Mr. RODGERS. I receive many, many e-mails in a day. 

Mr. OBERSTAR. This is a big contract. 

Mr. RODGERS. Yes, sir. 

Mr. OBERSTAR. This goes to the expertise of your organization. 

You are supposed to pay careful attention to this stuff and not dismiss it saying I get many e-mails. I get thousands. All of us get 

thousands of communications a week. 

Mr. RODGERS. Yes, sir, I did not specifically 

Mr. OBERSTAR. Something of this magnitude, it is serious. You 

have got to pay attention to it. 

Mr. CUMMINGS. Will the gentleman yield for just one question? 

Mr. OBERSTAR. Yes. 

Mr. CUMMINGS. Thank you, Mr. Chairman, for yielding. 

In answer to one of my questions, you said that the first time you 

had heard about this was, I think recently and you just did not 

have very much detail about it. This memo really outlines everything very, very carefully. I am just wondering does this refresh 

your recollection at all, this memo, now that you have it in your 

hand because he really lays out everything and you are one of the 

top people on the project. 

If somebody came and said I have got these issues, Mr. Rodgers, 

and they put them in writing, and they are talking about issues 

that go to our national security and go to the safety of the wonderful, brave men and women, patriotic men and women of the Coast 

Guard that we are supposed to be producing a vessel for, that is 

safe. It seems to me that is something that would go to the very 

essence of your thought process. 

It would also concern you that your corporation, Lockheed Martin, you don’t want them, I am sure, to be placed in an embarrassing position. 

But what you are saying is that you don’t remember the e-mail 

at all? 

Mr. RODGERS. Let me clarify, sir. Overall, I mentioned the schedule issue in November of that year. With that, we added resources. 

We added additional talent. Some of the people on this e-mail were 

added, such as Mr. Clifford and Mr. Ewing and Mr. Wilhelm. They 

were added to the team. My day to day interaction was with those 

gentlemen. 

So to clarify, after the November timeframe, I did not interface 

with Mr. DeKort on a day to day basis. 

Mr. CUMMINGS. Did any of those gentlemen bring it to your attention, the memo? 

Mr. RODGERS. This memo? Not to my recollection, sir. 

Mr. CUMMINGS. All right, I yield back. 

74

Mr. OBERSTAR. What is emerging from the questioning and from 

the responses is that the fundamental issue we are concerned 

about, there is a structural failure in the way this program was 

carried. There is a structural failure in the Coast Guard self-certifying and allowing the contractor to self-certify, and there was not 

a third party oversight of this in an effective way. 

Ms. Lavan, you are Vice President of Ethics and Business Conduct for Lockheed, correct? 

Ms. LAVAN. That is correct. Actually, right now I am Vice President of Internal Audits since February. 

Mr. OBERSTAR. But you were at the time. 

Ms. LAVAN. For the past three and a half years since October of 

2003. 

Mr. OBERSTAR. When you got an ethics complaint, what was your 

procedure for dealing with it? 

Ms. LAVAN. Well, just as a bit of background on Lockheed Martin 

and its ethics program, we have a very solid program that is comprised of a number of components. One of the most important components is that we have ethics officers at each of our major locations, for instance, here where Deepwater is located. And so, those 

ethics officers are tasked with taking in any kind of complaints 

that employees bring forward. 

So they are to conduct thorough and complete investigations of 

any complaints that are brought forward, and that is what Mr. 

DeKort brought forward in October of 2004 to the ethics office. 

Mr. OBERSTAR. He brought forth very technically complex complaints? 

Ms. LAVAN. He did, yes, and the ethics officers that investigated 

it, both had engineering backgrounds. 

Mr. OBERSTAR. They had the technical expertise to evaluate the 

complaint from Mr. DeKort. Then in what way was it disposed of? 

Ms. LAVAN. They conducted an investigation that took over two 

months. They looked at all his concerns, talked to people on the 

program and reviewed documents and determined that his concerns about an ethical issue were not substantiated and that they, 

we believed, they believed that the customer was well informed and 

involved in the decision-making process on the issues that were 

raised. 

I do want to mention that Mr. DeKort at that time had raised 

the radio issue. 

Mr. OBERSTAR. Yes. 

Ms. LAVAN. It was not investigated because, as Mr. DeKort himself mentioned to the Committee, it was replaced under warranty 

by Lockheed Martin. So those radios were never put on the boat. 

Mr. OBERSTAR. Do you have a document of exoneration, of selfexoneration of Lockheed? 

You said the issue was resolved, and it was determined that 

there was not an ethical issue here. Was that in writing? 

Ms. LAVAN. The issue about the radio? 

Mr. OBERSTAR. No. The other, the previous question. 

Ms. LAVAN. We keep a record of our ethics investigations. That 

is not something we typically share with the complainants. It is internal to Lockheed Martin. 

75

Mr. OBERSTAR. Mr. DeKort said that you told him that the official response to the allegations, that his allegations were baseless 

and had no merit. Is that how the ethics issue was resolved? 

Ms. LAVAN. Actually, there were three separate ethics investigations. As Mr. DeKort continued to be unsatisfied with the results 

of the investigations, they went to increasingly different levels. 

The next level involved what we call our business area where we 

put together a team of experts that had technical background, procurement background as well as programmatic background, and 

they again looked at the original investigation. They talked to people on the program, looked at documents, talked to Mr. DeKort and 

found that his concerns were unsubstantiated because they were 

being worked with the customer through the customer system. 

Mr. OBERSTAR. Did you dismiss the DeKort complaint, ethics 

complaint, on grounds of ethics or on substance of the work to be 

accomplished? 

Ms. LAVAN. But we never dismissed his complaint. We took his 

complaint very seriously and invested. 

Mr. OBERSTAR. You said it was disposed of. 

Ms. LAVAN. Internally, we talked. We would go back to Mr. 

DeKort. 

Mr. OBERSTAR. You found it not substantiated. 

Ms. LAVAN. Exactly, yes. 

Mr. OBERSTAR. So I call that a dismissal. 

That is a very important element in this whole inquiry. When 

you said that you hold these matters internally, could the Committee receive a copy of your internal documents for our review if 

you wish in a confidential manner? 

Ms. LAVAN. Yes, the ethics investigation certainly. You would be 

entitled. You could receive a copy of that. 

Mr. OBERSTAR. We would like to have that. 

Ms. LAVAN. They are actually, they are fairly substantial documents. 

Mr. OBERSTAR. It is a very substantial issue, and I think it goes 

to the core of our inquiry here. 

In the end, did your office at the time or did Lockheed conclude 

that the deficiencies existed as listed by DeKort but that Lockheed 

was not responsible for them because the Coast Guard took contractual delivery of the boats? 

Ms. LAVAN. The way we looked at it, then there was a third investigation which I spoke with Mr. DeKort myself and looked at 

the program myself, personally, and the way we looked at it from 

the issues that Mr. DeKort raised was that what was the customer 

informed, were they fully aware and were there decisions being 

made in terms of for the benefit of the customer and the program? 

We knew that at that point, that SPAWAR had approved the 

TEMPEST. It has passed the TEMPEST test. We also knew the ongoing IPT was looking at the C4ISR specifications and that was to 

be resolved on a contractual basis. So we knew that there was ongoing dialogue and debate between the customer and Lockheed 

Martin. 

Mr. OBERSTAR. In the end, Lockheed took the position that if the 

Coast Guard wanted the problems fixed, they would deal with it, 

extend the schedule and add the funds to do so. Is that correct? 

76

Ms. LAVAN. We viewed that there was an open and honest dialogue between Lockheed Martin and the Coast Guard and that 

both Lockheed Martin and the Coast Guard through the IPT provisions of the contract would reach a decision that was well informed 

on both sides. 

Mr. OBERSTAR. Mr. Chairman, I will withhold at this point. 

Mr. CUMMINGS. Mr. Coble? 

Mr. COBLE. Thank you, Mr. Chairman. 

I was here earlier but I have missed a good portion of this panel. 

It appears what we have is a dependable, respected armed service 

in the U.S. Coast Guard and two highly regarded defense contractors plagued by an expensive fiscal error. 

Dr. Mackay, let me ask you a question. In light of the Commandant’s proposal for a new direction for the Deepwater program 

and the problems that have been revealed today and in previous 

hearings, what suggestions would you have to improve the protocols and the procedures that govern acquisition, design, construction, coordination, et cetera, for future projects? 

Mr. MACKAY. Sir, I will limit my remarks to the Deepwater 

project. I think that the course of action that the Commandant has 

laid down is prudent and goes to a direct and active dealing with 

issues that have surfaced on this program. Industry, both Lockheed 

and Northrop Grumman, both myself, Mr. Anton, and well above 

us extending to our CEOs, have been in active consultation and 

discussion about the way forward on this program. 

The new acquisition plan that the Commandant has laid out, the 

features of it, some of the other things at a lower level, like the 

joint configuration control board, the incorporation of ABS, I think 

are an affirmative series of steps to meet the challenge and the 

issues that have been raised by this Committee and other bodies. 

We look forward to continuing to cooperate with the Coast Guard 

to effectuate those steps to improve this program and to continue 

to deliver the kind of performance that I alluded to in my opening 

statement. 

The fact that every Coast Guard Station now has new HH-65 

Charlie helicopters, that all of their medium and high endurance 

cutters in the Coast Guard have been touched by not one but two 

rounds of upgrades, the fact that though we have spent a lot of the 

program time upgrading legacy cutters, in this year of 2007 we now 

turn to deliver all new systems—the HC-144, and eventually the 

national security cutter, and redeliver the C130Js to the Coast 

Guard, which will be their longest range and most capable maritime patrol aircraft. 

There is a lot that can be gained as this program goes forward. 

I think the Commandant has laid out a prudent and well-considered way to get there. 

Mr. LOBIONDO. Thank you, sir. Let me ask you this, Doctor. 

What level of responsibility do the system integrator and the contractors have for the failure of the 110-foot conversion project? 

Mr. MACKAY. Lockheed Martin is responsible for the C4ISR. I am 

not aware of a C4ISR issue that is directly connected to the issues 

that led to the lay-up of these cutters. 

Mr. LOBIONDO. Anybody else want to weigh in on that? 

77

Mr. Stanley, Mr. Sampson, the naval architect who was employed by the Navy and the Coast Guard, appeared on the first 

panel. Did he ever contact you regarding this matter? 

Mr. STANLEY. Not to my recollection, no, sir. 

Mr. LOBIONDO. Do you know whether he contacted anyone in 

your company? 

Mr. STANLEY. It could have happened. But not to my knowledge. 

Mr. LOBIONDO. All right. I thank you, Mr. Chairman. I yield 

back. 

Mr. CUMMINGS. Thank you very much. 

Mr. Taylor. 

Mr. TAYLOR. First of all, I want to thank all of you gentlemen 

and ladies for staying around till 8:20 tonight. I am going to go 

back to my question to the last panel. Well over $50 million was 

spent, eight working Coast Guard cutters are now rendered useless, and everybody says it was not me. Now if I were running a 

large supply boat company and had tasked a company to design a 

change to those vessels to make them longer, and had hired a company to implement that, and then I found out in a subsequent 

Coast Guard inspection that those vessels are now rendered useless, I would do one of several things. I would sue the company 

that designed it, I would sue the company that built it, and I would 

tell all the authorities involved that my company is not going to do 

another dime’s worth of business with any of you until someone accepts responsibility. 

The reason I say that is that I am fortunate enough to serve, as 

is Mr. Cummings, not only on this Committee but also on the 

Armed Services Committee. There is a heck of a lot of similarities 

between this vessel and the LCS; both very similar thin hulled vessels designed to operate in very tough conditions. The Navy is 

counting on the LCS program to ride to the rescue as far as getting 

the numbers of the fleet back up. We are having substantial problems with the LCS program dollar-wise. Some very serious mistakes I think were made in the construction of it, not addressing 

problems as they arose but continuing to build the vessel so that 

when it came time to fix those things it cost a heck of a lot more 

than it should have. 

So again, using that analogy, I do think this Congress has some 

very substantial leverage when it comes to someone stepping forward. It is really easy in my capacity to say we are not going to 

build any LCSs. If the folks who made the screw-ups here are 

being counted on to do great work there, and no one is going to 

admit a mistake, I have got to believe they are going to make the 

same mistakes on the next one. So at what point does one of you 

step forward and say we made a horrible mistake. We are not 

going to bill our Nation $50 million-plus for the mistakes we made 

and we are going to accept responsibility for ruining eight ships 

that still had a good ten to fifteen years of life left in them. 

That really is an option that is available to me. I cannot guarantee that the other members of my Subcommittee or the other 

members of my Committee will go along with it. But at this point, 

I am dead serious when I make that statement. I cannot look 

700,000 Mississippians in the eye and say you all have treated us 

78

fairly, and I sure as heck cannot look 300 million Americans in the 

eye and say that you all have treated our Nation fairly. 

I will open that up to the panel, because, apparently, all of the 

decisionmakers are represented right there. I think the stakes are 

pretty high, folks. I am giving you an opportunity to tell me what 

went wrong and who is going to accept responsibility. Because we 

do know that there are eight ruined ships that the Coast Guard is 

not even trying to fix at this point. They are either going to scrap 

them or sink them and hope that it is swept under the rug. It is 

now swept under the rug. It is a very real problem and it is a problem that could very well occur again in the LCS. I cannot in good 

faith let that happen. 

Mr. MACKAY. Mr. Taylor, I will tell you that I have met with, and 

Lockheed Martin has put forward to the Coast Guard for the 

C4ISR——

Mr. TAYLOR. Let us talk about the hull, sir. Because the reason 

that the ships are being retired is not because the radios were not 

waterproof, which strikes me as really dumb, or that we had 

vulnerabilities on the communications, particularly if you are a Colombian drug lord and want to know whether or not the Coast 

Guard is going to be in a certain place, and there are countries 

around the world that might be cooperating with them, so I can see 

that one, too. But the reason the ships are being retired is because 

of hull failure. No one has stepped forward to say we screwed up—

the builder says he did not do it, the designer says he did not do 

it. I can tell you one thing, apparently the two welders I hired in 

Bay St. Louis with a sketch that I did on the back of an envelope, 

we built a boat that still works. All these experts apparently could 

not do what those couple of guys in Bay St. Louis did for me. 

Mr. MACKAY. Mr. Taylor, I cannot address the hull aspects. Lockheed Martin was not under contract for that. But I will tell you 

that we have approached the——

Mr. TAYLOR. I think, as a point of clarification, I think Lockheed 

Martin was the lead contractor on that. 

Mr. MACKAY. No, sir. No, sir. 

Mr. TAYLOR. You were not involved in any way in the stretching 

of that vessel? 

Mr. MACKAY. No, sir, not with respect to the hull, the hull machinery and the electricity. No, sir. That was a——

Mr. TAYLOR. You were not involved in the design? 

Mr. MACKAY. No, sir. 

Mr. TAYLOR. You did not hire someone to do the design work? 

You did not pay the folks who did do the work? 

Mr. MACKAY. No, sir. As a point of clarification, sir, and then I 

will turn it over to my partners to comment. In ICGS, Lockheed 

Martin is responsible for C4ISR. With respect to shipbuilding, that 

is the responsibility of Northrop Grumman and its partners, one of 

which is represented here in Halter Bollinger. What I wanted to 

tell you is, in respect to C4ISR, we have discussed with the Coast 

Guard Lockheed Martin proposals for the reuse of the 123 C4ISR 

data, equipment on the 123s, and the Coast Guard has considered 

that and they will dispose of that as they deem fit. We were not 

contractually responsible or otherwise participated in the design or 

fabrication of the hull. That was a responsibility under the joint 

79

venture of Northrop Grumman Ship Systems and their partners on 

that side. 

Mr. TAYLOR. Mr. Anton? 

Mr. ANTON. The Coast Guard yesterday made the announcement 

that they were going to lay up the 110 to 123 converted vessels. 

In that announcement, the Commandant indicated that there were 

multiple pieces of analysis that have been done and that the root 

cause cannot be determined based on that analysis. Now, we are 

not privileged to that analysis, but we have requested a copy of it. 

We need to determine the cause of the failure, sir. When we determine the cause of the failure, we will determine accountability. 

And when we determine accountability, we will know who needs to 

stand up. 

Mr. TAYLOR. How long does that take? What was it, two years 

ago, right around the time of the hurricanes? Now I realize some 

of us were busy with other things. But to the best of my understanding, the problems on Matagorda were better than two years 

ago. 

Mr. ANTON. The first problem on Matagorda did occur two years 

ago. We immediately dispatched a team, both the Coast Guard, industry, Bollinger, Northrop Grumman, Bollinger, and the Coast 

Guard dispatched a team to the Matagorda to survey that ship and 

to find out what had happened and why the ship had buckled. In 

that survey, we found an unwelded stringer right in the area where 

the buckling occurred. When we went back and reviewed the analysis, we felt like the stringer had caused the problem. At that 

point, Bollinger welded the stringer, under no cost, and we thought 

we had the problem solved. 

For the record, I will have to tell you for the record the string 

of events, but I cannot tell you when the next failure occurred, but 

I can tell you all eight boats were already in conversion. When the 

next failure occurred, I believe four or five of the boats had been 

delivered. 

So, it does take a long time. A lot of people have looked at it. 

Just today, testimony from Scott Sampson indicates that the 1997 

ABS rules were flawed. It takes time. We were not aware of that 

comment until today. 

With respect to the design, and with respect to the fabrication of 

the extension, and the vessel, I will have to let Mr. Stanley comment on that. 

Mr. TAYLOR. For the record, because I think I have heard otherwise and so I would like a clarification from you gentlemen under 

oath, for the record, was anyone from Bollinger Shipbuilding ever 

invited to look at the vessels after the problem occurred to see if 

they could identify what they thought was causing the problem? 

Mr. ANTON. I will let Mr. Stanley answer that. 

Mr. OBERSTAR. Will the gentleman yield? The gentleman is right 

on with the line of questioning. In fact, I was going to pursue it 

at a later point. But at this stage, Bollinger also did the Navy’s extension of the 170 to 179 foot and you had no failures there. 

Mr. STANLEY. That is correct. 

Mr. OBERSTAR. From what I understand, the work proceeded by 

strengthening the hull. And you advised the Coast Guard that they 

needed to do the same because they were doing a much greater 

80

percentage extension of hull than the Navy was doing and they did 

not take your counsel. I want you to add that on in your response 

to the question that the gentleman from Mississippi raised. 

Mr. STANLEY. I will be glad to answer all the questions. If we 

could, Congressman Taylor, there are several periods of damage to 

the Matagorda and you have got to decipher and discuss for clarity 

where Bollinger was involved and where it was not. I would like 

to offer if I could, and I think it might be helpful, if we would 

spend a couple of seconds and go back over the history of the 

Matagorda and then——

Mr. TAYLOR. Okay. Can we go back to my direct question first, 

and then I certainly want to give you an opportunity to say what 

you want to say. 

Mr. STANLEY. All right. 

Mr. TAYLOR. I thought I heard representatives from Bollinger 

Shipyard say that they had never been invited to inspect the failed 

vessels so that they could give their opinion of what went wrong. 

Mr. STANLEY. That is correct. You heard that in your office and 

I was there the day it was said. 

Mr. TAYLOR. That seems to be a little different from what the 

gentleman from Northrop just said. 

Mr. STANLEY. No, it is not. 

Mr. TAYLOR. So, again, I am giving everyone an opportunity to 

clarify that. 

Mr. STANLEY. That is what I was trying to do. I need to spend 

just a moment with you. After the Matagorda came out of completion at Bollinger’s of the work that was contracted under Deepwater, Matagorda went into what they call a PDMA, it went into 

a maintenance period. So there was work done on the ship that 

was separate and apart from the Deepwater scope of work. Before 

it went into its PDMA, it went through an operational test evaluation period to see if it effectively would perform to the specifications of the contract for the conversion. It went into the PDMA. 

Then after the PDMA, it went to Key West, and then following its 

arrival at Key West it left Key West fleeing one of the storms that 

year enroute to Miami. This is the September timeframe of 2004. 

In fact, several of the boats, all of the boats in Key West left for 

Miami fleeing that same storm that year. 

The first damage on Matagorda, the buckling damage happened 

at that time. That was reported to Bollinger. The ship was brought 

back to Bollinger, to Lockport, Louisiana, and repaired by 

Bollinger, with a joint discussion with the Coast Guard of what had 

happened, what has caused the failure, and what should be done 

to correct it. Northrop Grumman was in that discussion, ICGS was 

in that discussion, all the Coast Guard collectively was in that discussion. We recognized that in the early calculations of the 110’s 

conversion that some mistakes were made in those calculations, we 

all identified those mistakes, and for the mistakes that Bollinger 

made, Bollinger certainly stepped up to the table and said that was 

a mistake and this is the correct number and this is what should 

be done with this number. 

Then what happened was that ship sailed. It had other damage 

and it had other decisions made to correct that damage. Believe it 

or not, I did not know until January, in some of the Coast Guard’s 

81

testimony, of some of the repairs that were done to the Matagorda 

after it left us. 

So it is very difficult for us as a shipyard. You personally have 

known our owners many years. We are very proud of our work and 

very proud of what we have done with the Coast Guard. We built 

all the hourglass, we built all the CPBs. Our employees have married Coast Guard people, our employees have son and daughters 

that serve in the Coast Guard. We take this very seriously. We are 

at a loss as to what happened. And although we respect the Commandant’s decision, we do not believe that this question should remain unanswered. There is an answer. You are absolutely correct. 

The Commandant, and I cannot speak for him, but I think his 

decision was that in the best interest, considering everything, it is 

better to decommission those ships and move forward. I think that 

is what he is thinking, but I certainly cannot speak for him. But 

if you want an answer, there is an answer. And there has been, as 

Mr. Anton said, many independent studies done that neither 

Bollinger nor Northrop has seen. I think we could be very helpful 

in resolving the situation. But that information needs to be shared. 

Mr. TAYLOR. Well, I appreciate the gentleman’s answer. I stick 

by what I am saying. If all the parties involved are also involved 

in the LCS and none of the parties involved are going to step forward and say that is the problem, this is who ought to pay, then 

I do not see why our Nation ought to be doing business with you 

for the LCS. 

Mr. Chairman, I yield back my time. 

Mr. OBERSTAR. Mr. Chairman, I would like to follow up on Mr. 

Taylor’s. Mr. Stanley has said some extremely important here. We 

had a loss as to what happened. There should be an answer. And 

is the answer that Bollinger built both the 170 and the 179, and 

the 110 and the 123. The 179 did not crack because the hull and 

the hull girders were strengthened. The Navy specified that 

strengthening and the Coast Guard did not. 

Mr. STANLEY. That is not quite correct, Mr. Chairman. If I could, 

let me separate two issues for you. 

Mr. OBERSTAR. All right. 

Mr. STANLEY. The patrol coastals, the PCs for the Navy were 

strengthened very early after their delivery into service, long before 

the extensions were added to them and for a much different reason. 

The patrol coastals, like the Island Class and like the specifications 

for the 123, and like most operating equipment in the marine and 

in the air environment, they have operational restrictions. In the 

case of the PC, the PC was actually designed and specified to work 

in the Latorials, but it found itself making many transits on open 

ocean. 

And as it made transits in normal Navy operations, it made 

those with large ship convoys at convoy speeds. Sometimes the 

speed of the convoy and the size of the ship would get into weather 

that would not affect big ships but it really affected small ones, like 

the PC. And we had cracking on the PC because the PC was operating outside of its planned and designed environmental envelop. 

We strengthened the PCs which allowed them to then transit with 

the big ships in heavy seas at transit speeds. 

82

Much later on some of the PCs, not all, but some of the PCs received stern extensions for a very similar reason that we extended 

the 110s to all out for the boarding of a small rigid hull inflatable, 

for the safe boarding and exit of a rigid hull inflatable. But the two 

are not necessarily connected together. I think that is very important. It is true that the hulls of the PCs were strengthened. In the 

case of the 110, this calculation——

Mr. OBERSTAR. But did the Navy specify hull strengthening for 

the extension of the 170 to 179? Did they not give a specific——

Mr. STANLEY. No. No. Because the hulls had already——

Mr. OBERSTAR. That is what the Navy told us. 

Mr. STANLEY. Well, no. I do not think there is a——

Mr. OBERSTAR. The Carderock division, the David Taylor Model 

Basin specialist told us that, and you are saying they did not? 

Mr. STANLEY. I think it is a matter of timing. The Navy and 

Bollinger strengthened the hulls on the PCs, all of the PCs, long 

before, long before, several years before the stern extensions were 

added. So to say that the Navy instructed Bollinger to increase the 

strength of the hull because they wanted to add stern is incorrect. 

The hull had already been changed for another reason and its 

strength increased for another reason. 

Mr. OBERSTAR. All right. We will desist there because there are 

other members who have questions and we need to go on, in all 

fairness. Thank you, Mr. Gilchrest, for forebearing here. 

Mr. CUMMINGS. Mr. Gilchrest. 

Mr. GILCHREST. Thank you, Mr. Chairman. I guess I would like 

to stick with the hull design here for a little while. Mr. Anton, you 

are executive vice president of Northrop Grumman; is that correct? 

Mr. ANTON. Yes, sir. 

Mr. GILCHREST. And so you, working with the ICGS, got the contract to work on the hulls on these 110s; is that correct? 

Mr. ANTON. ICGS is the prime contractor. When the contract 

comes into ICGS, the HM&E portion of the work is given to the 

Northrop Grumman partner of the joint venture. 

Mr. GILCHREST. So Northrop Grumman has this contract and you 

subcontract to Mr. Stanley, with Bollinger? 

Mr. ANTON. We did. 

Mr. GILCHREST. So when Bollinger Shipyard was done with each 

of these boats at various times, what was your responsibility before 

the boat was put into service after Bollinger Shipyard finished the 

boats? 

Mr. ANTON. Could you ask that again? 

Mr. GILCHREST. Northrop Grumman is the contractor to extend 

the hull or make the 110 into the 123. So you subcontract to 

Bollinger Shipyard to do the work. 

Mr. ANTON. Yes, sir. 

Mr. GILCHREST. Once Bollinger Shipyard is done, what is your 

responsibility to ensure that the work was done appropriately? 

Mr. ANTON. During the production effort at Bollinger, we had a 

QA plan and a quality assurance team and we worked side-by-side 

with the program office from the Coast Guard reviewing the work 

that Bollinger was accomplishing. In addition to that, the Coast 

Guard again formed an in-serve team, and in service inspection 

83

team which actually took the ship out on trials and then made a 

recommendation as to whether to accept the ship or not. 

Mr. GILCHREST. Apparently you and the Coast Guard accepted 

each of these ships at various times. 

Mr. ANTON. Bollinger certified to Northrop Grumman that the 

work was in accordance with the specs. In the case of the hull extension, ABS monitored the structural part of the conversion process and they also signed a certification that the work was done in 

accordance with the design and we accepted that certification based 

on our on site QA team, and we certified that, yes. 

Mr. GILCHREST. So as a result of that, looking in hindsight at 

each of these eight ships going into service, the Matagorda 7 February 2005 went into service and the hull problem was identified 

10 September 2004. That is what I have here. Rather than go 

through all the dates, in hindsight, was there a design flaw in this 

extension, or was there less than top grade material used? Mr. 

Stanley and Mr. Anton, what was the problem with the breach of 

the hull? 

Mr. ANTON. I am going to tell you we have to determine the root 

of the cause for the failure then we will understand and we will 

be able to answer that question. 

Mr. GILCHREST. Are each of the eight ships different in their failure? 

Mr. ANTON. Yes. Each ship, in fact, fails in a different area. The 

modeling that has been done to date, to my knowledge, I know the 

modeling that we have done, but the modeling I believe that the 

Coast Guard has done as well has not been able to predict the occurrence of these failures on each vessel. 

Mr. GILCHREST. Has there ever been a 110 extended to a 123 

that passed? 

Mr. STANLEY. No, not to my knowledge. 

Mr. GILCHREST. This is the first time. 

Mr. STANLEY. Yes. 

Mr. GILCHREST. Did you, Mr. Anton or Mr. Stanley, who conducted the technical review of the design prior to the beginning of 

construction? 

Mr. STANLEY. We initiated the design which Northrop reviewed 

as well as the Coast Guard reviewed in the design process. Before 

we took the design to construction or to conversion, that design was 

generated and vetted many different times. 

Mr. GILCHREST. How was the design vetted? Was it vetted with 

third parties, other engineers, other boatyards, other shipbuilders? 

Mr. STANLEY. No. It was vetted inside of the Deepwater or the 

ICGS structure. Parts of that design, the stern extension, the superstructure, was vetted to ABS outside to review that design. 

Mr. GILCHREST. Now the hull failures went from 10 September 

2004 to 24 March 2006. Can you tell us about once you had a failure in 2004, was there any sense or anticipation that you were 

going to have another failure in another boat? Was the design 

changed in future boats? 

Mr. STANLEY. As I outlined for Congressman Taylor, we were involved in the initial failure of the Matagorda. 

Mr. GILCHREST. You say you were not involved? 

84

Mr. STANLEY. No, I said we were involved. The boat was brought 

back to Louisiana, calculations reviewed with the Coast Guard, and 

hull strengthening on the Matagorda and all the boats that followed her was applied. Failures that happened after that point, 

and studies that happened after that point, and events that happened after that point, we do not have any knowledge of. That has 

not been shared with us. 

Mr. GILCHREST. So you were the contractor that worked on the 

hulls of all these eight boats? 

Mr. STANLEY. Yes, sir. 

Mr. GILCHREST. But you are not familiar with the problem of the 

breaches in the hull other than the Matagorda? 

Mr. STANLEY. That is pretty much correct. Let me say, we are 

not the only contractor that worked on the breaches in the hull. As 

I reported, the ships left us, they went into an availability, and 

then at some point in time those ships also received modifications 

to their hull structure that——

Mr. GILCHREST. Where did they receive modifications? From different shipyards——

Mr. STANLEY. From different shipyards, in Savannah and Alabama. 

Mr. GILCHREST. But regardless of the modifications, every one of 

them that had this extension failed. 

Mr. STANLEY. I am not sure of that. We do not have those 

records of how many boats failed. 

Mr. GILCHREST. Thank you, Mr. Chairman. 

Mr. CUMMINGS. All eight failed. According to what I saw. All 

eight of them failed. 

Mr. Kagan, you can go ahead. 

Mr. KAGAN. Thank you, Mr. Chairman. I recognize the hour is 

late and the interest is still quite high, at least for this new Representative. I have been here 100 days and change, so I am new 

to shipbuilding. I am a physician, a doctor. I design laboratory 

tests. I have never designed a boat. I want to thank you all for 

being here and giving your best opinion. But I am still trying to 

sort out in my mind about the these ships that have a hull that 

does not work. It is obvious to me that the design was less than 

perfect, and that no matter who touched and tried to repair the 

ship after this design was put into place, they were unable to keep 

it together. So I am trying to decide where the buck stops. Earlier 

when you were testifying about the electrical wire and how well or 

unwell it is wrapped for security purposes, I got a little bit dizzy 

and confused trying to decide who is in charge. So with regard to 

who is in charge, where does the buck stop with regard to the hull 

design? Would that be Northrop? Would that be Bollinger? And just 

to make it easy for me, I built this for you. I will hand it to you 

and you can pass it around, but when it stops that is the person 

I want to talk to. The buck stops here. Who is going to take it? 

Mr. ANTON. Bollinger did the design work for the 110 123 extension. And so I think it is appropriate that Mr. Stanley answer your 

question. 

Mr. KAGAN. So, Mr. Stanley? 

Mr. STANLEY. I would be glad for the buck to stop here. 

Mr. KAGAN. Very good. 

85

Mr. STANLEY. I can only supply the information that we have, 

and I can only tell you the reason that I am here today, and one 

of our basic corporate tenets in our company is to not shy away 

from good times or bad times, I cannot answer your question where 

the buck stops yet. I really cannot. I can tell you that we did the 

design. 

Mr. KAGAN. All right. So the answer is, yes, you did do the design for the hull? 

Mr. STANLEY. We did the design. 

Mr. KAGAN. And if that design has been proven to be inadequate 

for the task at hand, would you agree with me that your company 

then would be responsible for the failures that follow? 

Mr. STANLEY. That could be possible. 

Mr. KAGAN. And so if I represent the people in northeast Wisconsin and we got something designed, the designed failed, would 

it be too much to ask for our money back? 

Mr. STANLEY. You certainly could do that. 

Mr. KAGAN. If you did accept damages and we did get all of our 

money back including loss of use for these eight ships in their future years, would that permanently damage your company? Would 

that put you out of business? 

Mr. STANLEY. There is a question before that. There are very 

clear ways contractually in Deepwater as well as naval shipbuilding that Mr. Taylor refers to, to determine where the buck 

stops. 

Mr. CUMMINGS. Mr. Stanley, we cannot hear you. This testimony 

is, I really want to hear this. 

Mr. STANLEY. There are very clear ways and established ways to 

settle where the buck stops. There are contractual obligations that 

are placed on the contractors, there are obligations the Government 

undertakes in its side of the contract, and in the case of the 110 

and in the case of any dispute where the contractors and the Government have a problem, there are very clear ways forward. We encourage ways at Bollinger to be pursued. And I hope that answers 

your question. 

Mr. KAGAN. It does in part, and it leads to some other queries. 

When you do design a piece of work to extend a ship off the rear 

end, I am sure you had other people take a look at your plans and 

your designs. Is that true? 

Mr. STANLEY. Yes. And I cannot tell you how many. 

Mr. KAGAN. But would that also mean that there might be other 

people besides your own company that should accept at least partial responsibility for this failure of design? 

Mr. STANLEY. That is part of the process that is described that 

I tried to describe. 

Mr. KAGAN. Are any of those companies represented here this 

evening? 

Mr. STANLEY. Well, the Coast Guard is here, Northrop Grumman 

is here. 

Mr. KAGAN. So that is two other individuals. 

Mr. STANLEY. And Bollinger is here. I do not know if there are 

ABS people here, I have not seen them. But certainly all three of 

those groups have a responsibility to share a part of the success or 

failure of a contract. 

86

Mr. KAGAN. Well, I want to applaud your honesty in accepting 

the buck stops here sign. I think it takes a great deal of courage 

to be here when things are bad. I know in the practice of medicine 

sometimes doctors will do everything right but things still do not 

work out; people still succumb even to an illness that is treated appropriately. I am a little saddened because no one has really gotten 

to the bottom line in figuring out why this unprecedented modification of a light weight, high speed craft has not been analyzed to 

the point where you could present the data here this evening to 

someone who really understands shipbuilding that could explain 

exactly where a single or multiple failures occurred in the design. 

But, obviously, this is a troubled project, and you would accept 

that. 

Mr. STANLEY. Yes, it is. 

Mr. KAGAN. I applaud you for accepting if not total at least partial responsibility. I yield back my time. 

Mr. CUMMINGS. Thank you very much. Mr. Stanley, I just heard 

what you said and let me make sure I am clear. Are you trying to 

tell us, because I just want to make sure I am clear on this because 

I want the record very, very, very clear because a lot is riding on 

what you just said, are you telling me that you believe that 

Bollinger is responsible for the hull problem? Is that what you are 

telling us? 

Mr. STANLEY. No, not at all. 

Mr. CUMMINGS. Then what are you saying? Because I want to 

make it clear. I want to make sure that whoever is responsible, 

going back to what Mr. Taylor was talking about, is held responsible because we are not going to be able to prevent these things 

from happening in the future if we do not get to the bottom line. 

And so, as I listen to your answers that you just gave, I am sitting 

here as a lawyer and I am saying if this were my case and I were 

representing Northrop Grumman, I would be saying hallelujah because apparently somebody had taken responsibility. I am just asking you to be clear. What are you saying? He has talked about the 

buck stopping, and when I hear the buck stopping and hear what 

you just said, it sounded like you were accepting liability here. 

Sworn testimony, I would think somebody would be able to take 

that into a court of law and do something with it. So, I am just 

curious. 

Mr. STANLEY. I would like to be very clear with you. I thought 

I was very clear with the Congressman. I said there is a process 

in Federal contracting, a very clear one, that adjudicates disputes 

and the adjudication of the dispute places responsibility and accountability. In our interchange, the Congressman asked me how 

many people was here in that process that could have responsibility, and I said three. 

Mr. CUMMINGS. Okay. I got you. I just wanted to make that clear 

and I wanted to make sure that the people back at your company 

would not be mad at you when you got back. 

Ms. Lavan, let me go to something that you said that is troubling 

me. You said that the Coast Guard was kept informed when we 

were talking about Mr. DeKort’s complaints, and there is a letter 

sitting up there somewhere from Mr. DeKort where he made some 

complaints, would you pass that to her, Mr. Rodgers, you said that 

87

the Coast Guard was kept informed of the various things that were 

happening with this contract. Is that correct? 

Ms. LAVAN. Yes, sir. 

Mr. CUMMINGS. Would they have been kept informed of the topside issue? 

Ms. LAVAN. You are referring, first of all, to the email, this is 

January 2004, before the ethics complaint came in, which was October 2004. And in terms of the topside equipment where I was 

talking about the flowdown of the specifications and where, as Dr. 

Mackay was talking about, where the sort should have been placed, 

Coast Guard was part of the IPT, which is the integrated product 

team, that was looking at that issue. 

Mr. CUMMINGS. Okay. So when DeKort raises topside, and that 

memo was January 2004; is that right? 

Ms. LAVAN. That is right. 

Mr. CUMMINGS. It was dated January 2004, the Matagorda is received and a DD-250 is dated around March 2004; is that right? 

Ms. LAVAN. Yes. 

Mr. CUMMINGS. Now the Coast Guard becomes aware of noncompliance, according to the IG, and I notice everybody is very familiar with the IG report, which I am very impressed with, thank 

you very much, July of 2005. Are you aware of that? 

Ms. LAVAN. Yes. 

Mr. CUMMINGS. And August 29 of 2006, the Coast Guard gets a 

letter from the integrated team indicating that the topside equipment did not meet minimum standards. Are you familiar with 

that? 

Ms. LAVAN. Not specifically, no. 

Mr. CUMMINGS. Well they did. Are you familiar with that, Mr. 

Mackay? 

Ms. LAVAN. I think we are talking about two different——

Mr. CUMMINGS. All right. Help me. 

Ms. LAVAN. One is the Tempest issue, the other is the topside 

equipment issue. The Tempest issue is the one that was approved 

by SPAWAR in March of 2004. Separate issues. 

Mr. CUMMINGS. Okay. So the Coast Guard was made aware of 

that; is that right? 

Ms. LAVAN. The Coast Guard, as I understand it, was part of the 

testing. 

Mr. CUMMINGS. Right. That clears that up. That is good. 

Ladies and gentlemen, any other questions? Well, we have heard 

a lot of testimony here today and, I will tell you, if I were a judge 

I would let a higher authority try to ferret all this out. I am being 

very frank with you. We have so many documents that, to be frank 

with you, show all kinds of inconsistencies. I am at a point right 

now where I have questions but I think it is better that I turn 

them over to somebody else, a higher authority, because this concerns me tremendously. Thank you very much. You are dismissed. 

Mr. CUMMINGS. We will now call our third panel. Mr. Debu 

Ghosh, Mr. Joe Michel, Lieutenant Commander Jacoby, and Ms. 

Martindale. Please come forward. 

If you will please repeat after me, I swear to tell the truth and 

nothing but the truth, so help me God. 

[Witnesses answered in the affirmative.] 

88

Mr. CUMMINGS. Thank you. We will begin with Mr. Ghosh. 

TESTIMONY OF DEBU GHOSH, NAVAL ARCHITECT, BRANCH 

CHIEF, U.S. COAST GUARD BOAT ENGINEERING BRANCH; 

JOE MICHEL, ASSISTANT DEPUTY FOR SYSTEMS IMPLEMENTATION, U.S. COAST GUARD NATIONWIDE AUTOMATIC IDENTIFICATION SYSTEM PROJECT; LIEUTENANT COMMANDER 

CHAD JACOBY, PROGRAM MANAGER, SCALEABLE COMPOSITE VESSEL PROTOTYPE PROGRAM SCIENCE AND TECHNOLOGY DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY; AND CATHY MARTINDALE, CONTRACTING OFFICE 

CHIEF, COAST GUARD ENGINEERING AND LOGISTICS CENTER 

Mr. GHOSH. Good evening, Mr. Chairman and distinguished 

members of the Committee. It is a pleasure to appear before you 

today to discuss compliance with requirements of the Deepwater 

contract. I am Debu Ghosh, executive officer of the Coast Guard’s 

Asset Project Office Standard Boats. I am a naval architect with 

over 33 years of experience specializing in the design of high speed 

craft. I have been in the boat engineering branch of the United 

States Coast Guard for the last 23 years, serving as the branch 

chief for the last 15 years. Mr. Chairman, I would like you to include my written statement in the record. 

I have a Bachelor’s degree in naval architecture from IAT, a 

MBA from Tulane University in New Orleans, and a Master of 

Science degree from ICAF. 

I have been involved with all recent patrol boat acquisition programs in the Coast Guard including the 110 Island Class, 87-foot 

coastal patrol boat, the 123-foot conversion, and the fast response 

cutter. My branch’s participation in the Integrated Deepwater Systems 123-foot patrol boat program began in the spring of 2002 following the contract award to Integrated Coast Guard Systems. 

After identifying our initial concerns with possible longitudinal 

strength problems, I asked both Coast Guard and the Bollinger 

members of the technical management information team to award 

contracts to the Navy’s Combatant Craft. 

I also suggested that Bollinger consult Vosper Thornycraft, the 

original designer of the Island Class patrol boats. I was unable to 

get support for this because the Deepwater contact was a performance based contract so the contractor was solely responsible for the 

success of the design. Nonetheless, I advised Bollinger to study this 

matter more carefully, due to the unusual nature of the lengthening a lightweight vessel by adding length aft instead of by adding length at midships, which is the normal process. 

After the cutter Matagorda failure, the section modulus calculation of the midship section submitted by Bollinger was found to be 

in error and did not meet the ABS Guide for high-speed craft 1997. 

A detailed review of the longitudinal strength and buckling calculations by ELC revealed that the primary stress of the deck and the 

side shell would exceed the critical buckling strength of the damaged panels. Subsequently, the Coast Guard accepted the ICGS 

proposed solution known as Modification One, comprising three 

straps welded on to each side. This raised the section modulus 

enough to meet ABS high-speed craft guide. This modification reVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00126 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
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duced the stress to an adequate level and also increased the allowable buckling load on the critical plates. 

After the cutter buckling damage, I took over as the project engineer from Deepwater to find the root cause of the problems with 

the cutters when such problems continued. I awarded six different 

contracts to nationally and internationally known consultants to resolve the problems. A variety of tests, analyses, and reviews were 

performed including independent third party verifications of the 

analyses. It is important to note that although this problem originates in longitudinal bending and involves overall hull girder 

strength, the light structure required for high speed, small patrol 

boats results in various types of buckling failures, not merely 

cracking. These are much more complicated structural responses 

than those commonly seen in larger ships. 

I believe this shows that the Coast Guard has to have more direct responsibility for, and control of future acquisitions, and oversight for vessel designs, as this Committee has advised and as the 

Commandant is now implementing. The Coast Guard has to rely 

more on the experience of existing proven vessels and experienced 

designers of these specialized high speed craft. This had been the 

practice that produced the successful 87-foot coastal patrol boat 

and the original 110-foot Island Class patrol boat, and this is the 

strategy that Coast Guard is now following for the replacement patrol boat, FRC-B. This also suggests that independent survey and 

design funding should be available to Coast Guard engineers as it 

was in the past so that the Coast Guard can investigate potential 

problems like this in a proactive fashion. 

Thank you for the opportunity to testify before you today. I will 

be happy to answer any questions you may have. 

Mr. CUMMINGS. Thank you very much. Mr. Michel. 

Mr. MICHEL. Good evening, Mr. Chairman and distinguished 

Committee members. It is a pleasure to appear before you today to 

testify on the Compliance with Requirements of the Deepwater contract. My name is Joe Michel. Currently I am an assistant deputy 

with the Nationwide Automatic Identification System project, the 

Coast Guard Office of Acquisition. Prior to that, I was engineering 

technical lead with the Ports and Waterways Safety System also 

with Coast Guard Acquisition. And from December 2001 to March 

of 2004, I was the Coast Guard’s lead C4ISR engineer on the 123-

foot patrol boat integrated product team. 

I am pleased at the opportunity to appear before you and I will 

be happy to answer any questions that you have. 

Mr. CUMMINGS. Thank you very much. Lieutenant Commander 

Jacoby. 

Lieutenant Commander JACOBY. Good evening, Mr. Chairman 

and distinguished members of the Committee. It is a pleasure to 

appear before you tonight to discuss the Compliance with Requirements of the Deepwater contract. 

I am Lieutenant Commander Chad Jacoby. I served as the program manager for the 123-foot patrol boat conversion project from 

July 2004 to October 2006. As the 123 program manager, I managed the delivery task orders under the Deepwater contract that 

pertained to the production, delivery, and warranty support of the 

123-foot cutters. 

90

During my time as program manager, I supervised the delivery 

of Coast Guard Cutter ATTU, Coast Guard Cutter NUNIVAK, 

Coast Guard Cutter VASHON, Coast Guard Cutter MONHEGAN, 

and Coast Guard Cutter MANITOU. I managed contracts with engineering firms to diagnose structural issues, I administered the 

one-year warranty period on all eight delivered 123s, and I managed the contract modifications to install structural upgrades on 

the cutters. 

Thank you for the opportunity to testify before you tonight. I will 

be happy to answer any questions that you may have. 

Mr. CUMMINGS. Thank you very much. Ms. Martindale. 

Ms. MARTINDALE. Mr. Chairman, I have a brief oral statement. 

I request that my written statement be entered into the record. 

Good evening, Mr. Chairman and distinguished members of the 

Committee. It is a pleasure to appear before you today to discuss 

Compliance with Requirements of the Deepwater contract. I am 

Cathy Martindale. I am currently the chief of the contracting office 

for the Coast Guard’s Engineering and Logistics Center located in 

Baltimore, Maryland. I have been a contracting officer for the U.S. 

Coast Guard for 15 years. I hold a Bachelor of Science degree in 

business administration from the University of Maryland. I also 

hold a Certificate in procurement and contract management from 

the University of Virginia, and a Defense Acquisition University 

level III certification. 

I was a contracting officer with Coast Guard Headquarters and 

assigned to the Deepwater program beginning January 2000 

through March 2006. While assigned to the Deepwater program, I 

served at various times as a contracting officer in both the surface 

and air domains at the systems integration program office located 

in Rosslyn, Virginia. I was one in a series of three contracting officers responsible for administering the 110/123 conversion of the 

Matagorda. As a contracting officer I had responsibility for administering, interpreting, and ensuring compliance with contract requirements. I worked daily with my contracting officer technical 

representative, the program office, and Integrated Coast Guard 

Systems. I attended design reviews, participated in integrated 

product team meetings, and accepted contract deliverables. 

Thank you for the opportunity to testify before you today. I will 

be happy to answer any questions that you may have. 

Mr. CUMMINGS. Thank you very much. I want to thank all of you 

for being here. We really appreciate it. 

Mr. Michel, was anyone in the Coast Guard aware during the 

123 program of the internal disputes at Lockheed or of the actions 

of Michel DeKort to raise awareness of his concerns? Would those 

kinds of issues have been things that would have come to your attention? 

Mr. MICHEL. Not as such, sir. I was not aware until sometime 

later that Mr. DeKort had actually pursued alternative action up 

through his management team. 

Mr. CUMMINGS. Mr. DeKort indicates that he contacted the Coast 

Guard to raise his concerns with them. Do you know whether any 

action was taken? I take it that you found out later on that he had 

raised issues. Did you ever find out whether action had been taken 

in regard to the issues that he raised? 

91

Mr. MICHEL. No, sir, I did not. He was extremely vocal during 

my tenure with the IPT. 

Mr. CUMMINGS. And when you say he was extremely vocal, how 

did it come to your attention that he was extremely vocal? 

Mr. MICHEL. He made his concerns known inside and outside of 

Integrated Product Team meetings. 

Mr. CUMMINGS. And so you did have knowledge of those concerns, did you not, based on what you just said? 

Mr. MICHEL. I did, sir, but I did not know that he had gone as 

far up his management chain. 

Mr. CUMMINGS. When he was complaining, were you aware of 

specific complaints? 

Mr. MICHEL. I was, sir. 

Mr. CUMMINGS. And did you have an opinion back then when you 

were hearing them as to whether or not you considered them to be 

valid complaints and things that you all should be concerned 

about? 

Mr. MICHEL. Well, sir, he and I shared a lot of the same concerns. 

Mr. CUMMINGS. Is that right? 

Mr. MICHEL. Yes, sir. 

Mr. CUMMINGS. Why not tell us about the concerns that you 

shared and why you had the concerns that you had. 

Mr. MICHEL. I think we have talked a lot about the Tempest concerns this evening. 

Mr. CUMMINGS. Yes. 

Mr. MICHEL. A few things that he might have perhaps——

Mr. CUMMINGS. Let me go back for one moment, because I want 

us to be clear. Mr. DeKort had his concerns, as I understand it, and 

you had concerns. Was this a thing where it just so happened that 

you sort of ended up with the same concerns, or were you all talking and he say, you know what, I really do not like this Tempest 

situation, and you sort of joined in to that? Were these things that 

you could have observed sort of independently, is what I am asking? 

Mr. MICHEL. Yes, sir, independently. Any two C4ISR systems engineers looking at the same problem would have come to the same 

sort of conclusions. 

Mr. CUMMINGS. No doubt about it? 

Mr. MICHEL. Absolutely, sir. No doubt. 

Mr. CUMMINGS. Tell me the concerns that you had that were 

common to his complaints, his concerns. 

Mr. MICHEL. Early on during the design reviews and during the 

review of various contract data exhibits, it was apparent that there 

either was not a clear understanding of Tempest requirements, for 

example, within the Lockheed design community, or they were not 

addressing them. So during design reviews. During review of contract documents, designs, and submission of comments via the IPT 

process these concerns were made known to Lockheed from the 

Coast Guard perspective. And I was not alone. There were many 

folks in the C4I community that were matrixed into the IPT that 

made these concerns known. So Lockheed went and did this study 

that was referred to earlier this evening, and they came to the 

same conclusion that yes, in fact, Tempest was a requirement procVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00129 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
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essing classified information, we are going to have to adhere to 

Tempest if we are going to get this cutter certified and operate on 

classified networks. 

So, a round turn was taken on the design. Lockheed did try. 

They did try. The equipment racks were reconfigured, red and 

black equipment was separated, red and black cables were separated. I cannot say that there was any material solution pursued, 

that is, the equipment that they had procured, the cables that they 

had procured, that is what they were using. 

Mr. CUMMINGS. So, in other words, he was saying, if I understood 

his testimony correctly, that he felt there should have been some 

other kind of cables. It seems like there has been a big deal made 

of the kind of cable that was used as opposed to the kind that he 

thought would be best for Tempest certification. Did you have that 

same concern? 

Mr. MICHEL. Yes, sir. 

Mr. CUMMINGS. So what you are saying is that the same type of 

cabling, although there were the complaints, Lockheed Martin’s reaction to that was to keep the same type of cabling but to just kind 

of reconfigure it. Is that a fair statement of what you just said? 

Mr. MICHEL. Yes, sir. Yes. 

Mr. CUMMINGS. Did you ever make any complaints? 

Mr. MICHEL. I did, sir. During the design reviews and during the 

review of the designs themselves, I made numerous comments and 

raised my concerns. Some of the problems, and I think we have 

talked about the structure of the Deepwater contract at length this 

evening, I was trying to work within the structure of the contract. 

Mr. CUMMINGS. Speaking of working within the structure of the 

contract, did you take your concerns to the higher ups in the Coast 

Guard? 

Mr. MICHEL. I elevated those concerns as high as I could within 

the program. 

Mr. CUMMINGS. And how high is that? 

Mr. MICHEL. To the deputy at the Systems Engineering and Integration Team. 

Mr. CUMMINGS. And who would that have been? 

Mr. MICHEL. Mr. Giddons was at the time. 

Mr. CUMMINGS. And what reaction did you get when you took 

those to his attention? 

Mr. MICHEL. He was extremely concerned and he wanted the 

issues to be resolved. 

Mr. CUMMINGS. And do you know why they were not resolved? 

Mr. MICHEL. Well, regrettably, I had mentioned that in March 

2004 my time with the Deepwater program came to an end. There 

were many issues that were unresolved, they were contractually 

identified on the DD-250, which was also referred to earlier this 

evening, that were, quite frankly, still up in the air. 

Mr. CUMMINGS. Why were you so concerned about the Tempest 

issue? 

Mr. MICHEL. For some of the same reasons that the first panel 

indicated, sir—compromise of classified information. 

Mr. CUMMINGS. When did you leave? 

Mr. MICHEL. About three weeks after Matagorda was delivered. 

Mr. CUMMINGS. All right. I will come back to you. 

93

Ms. Martindale, you were the contracting officer for Deepwater? 

Ms. MARTINDALE. Yes, I was the contracting officer administering 

the 110/123 delivery task order for the Matagorda. 

Mr. CUMMINGS. And does the contacting officer have the authority to decline to accept delivery of a ship or a boat? 

Ms. MARTINDALE. Yes, sir. 

Mr. CUMMINGS. And is that something that you have done in the 

past with regard to Deepwater? In other words, have you declined——

Ms. MARTINDALE. I have declined acceptance of a data 

deliverables, but not a ship, sir. 

Mr. CUMMINGS. I see. Explain that. Explain what you just said. 

You declined a date but not a ship. 

Ms. MARTINDALE. No. I am sorry, sir, a data deliverable. We had 

delivery requirements for data, design documents, and when they 

did not comply with contract requirements, we did not accept delivery. We gave them our comments, asked that corrections be made, 

and then they were accepted once those corrections were made. 

Mr. CUMMINGS. So, basically, you would get documents from the 

integrated team; is that right? 

Ms. MARTINDALE. That is correct, sir. 

Mr. CUMMINGS. With regard to, let us say, for example, a ship, 

a vessel. 

Ms. MARTINDALE. Yes. Technical specifications, yes, sir. 

Mr. CUMMINGS. And then you would not necessarily see the ship 

itself. You would actually base your judgement on documents that 

you received. Is that a fair representation? 

Ms. MARTINDALE. No, sir. Prior to delivery of the ship, there is 

a series of data deliverables, technical specifications, design documents. If they did not comply with the requirements of the contract, then I would reject those deliverables. 

Mr. CUMMINGS. Okay. Then how do you confirm the quality of 

the items for which you accept delivery? 

Ms. MARTINDALE. I rely on the technical expertise of my contracting officer technical representative. 

Mr. CUMMINGS. And so if a technical representative comes to you 

and says something is, for example, certified, Tempest certified, 

then you basically accept that. Is that correct? 

Ms. MARTINDALE. That is correct, sir. 

Mr. CUMMINGS. And the procedure, I take it, is that if they are 

incorrect, you would not necessarily know that. All you do is you 

get a document saying that it is fine or not fine. 

Ms. MARTINDALE. Yes, sir. I rely on their technical expertise. 

Mr. CUMMINGS. Were you at all concerned about the condition in 

which the 123s were delivered? 

Ms. MARTINDALE. Yes, sir. There were areas where it did not 

comply with the contract. As a contracting officer, it would be my 

preference not to take delivery of something not in full compliance. 

But we had discussions with regard to that on the COTR and myself and the noncompliance issues were such that they could be resolved after delivery. 

Mr. CUMMINGS. In other words, let me make sure I get this right, 

you are saying that you would accept the delivery and you would 

94

accept it but there were assurances made to you that things would 

be corrected later? 

Ms. MARTINDALE. That is correct. 

Mr. CUMMINGS. Was that standard procedure? 

Ms. MARTINDALE. It is not unusual, sir. It is a common practice 

in contracting where you sign a DD-250 accepting delivery of a 

product or service and you may withhold some aspect of payment 

or identify noncompliance areas with the expectation that at some 

point in the future they will bring the product into conformance.k 

Mr. CUMMINGS. Were all the major deficiencies noted in the DD250 for the Matagorda and each subsequent ship? 

Ms. MARTINDALE. I cannot speak to the subsequent ships, sir, but 

for the Matagorda, to my knowledge, all the nonconformances were 

identified in the DD-250, sir. 

Mr. CUMMINGS. Was the noncompliance of the topside equipment 

noted on the DD-250 with regard to the environmental standards? 

Ms. MARTINDALE. No, sir. 

Mr. CUMMINGS. It was not. And if it was not, why would that not 

have happened? In other words, if there was a problem with the 

topside equipment with regard to environmental standards and it 

had not been met, why would that not be noted on the DD-250? 

Ms. MARTINDALE. If there was an area of noncompliance, it 

should have been noted, sir. 

Mr. CUMMINGS. And the IG said that it was an area of noncompliance. Are you aware of that? 

Ms. MARTINDALE. No, sir. 

Mr. CUMMINGS. Does it concern you that we may have accepted 

a ship that did not have that notice on a DD-250? 

Ms. MARTINDALE. Yes. 

Mr. CUMMINGS. When, in fact, there was a problem. 

Ms. MARTINDALE. Yes. That would be a concern, yes, sir. 

Mr. CUMMINGS. Are there occasions when this has happened in 

the past where maybe something came in, you accept the compliance, DD-250 prepared, and then you later found out there was 

something that was not right? Has that happened? 

Ms. MARTINDALE. I have not had any firsthand experience with 

that, sir. 

Mr. CUMMINGS. Okay. I want to just make sure I am clear on 

this. With regard to the 123 program, I will call it the program, 

were there other things that concerned you overall? Was there anything unusual that concerned you? 

Ms. MARTINDALE. It was a very large, complex program, sir. I 

was not only responsible for the 110/123 DTO administration, but 

I also had responsibility for administering the NSC, the SRP, and 

FRC. So I was spread very thin, sir. 

Mr. CUMMINGS. You did all of that by yourself? 

Ms. MARTINDALE. Yes, sir. I was the sole contracting officer responsible for all of those delivery task orders. So that was certainly 

a concern. 

Mr. CUMMINGS. Now with regard to change orders, how were 

they dealt with? 

Ms. MARTINDALE. If the COTR identified an area of the contract 

requirements that they wanted to modify or add or subtract from, 

95

I would request a proposal from the contractor and then we would 

receive that proposal, review it, negotiate and modify the contract. 

Mr. CUMMINGS. Did that happen often with the 123 project? 

Ms. MARTINDALE. No, sir. 

Mr. CUMMINGS. You have been sitting here during all the earlier 

testimony, have you not? 

Ms. MARTINDALE. Yes, sir. 

Mr. CUMMINGS. And you heard that there were some concerns 

with regard to wiring and whether one piece of wire/cable costs a 

little bit more than the other. Did those kinds of things ever come 

to your attention in any way? In other words, did the integrated 

team ever come back and say, look, we have got a problem here, 

we need to change the wiring? 

Ms. MARTINDALE. On the 110/123 contract, that delivery task 

order? 

Mr. CUMMINGS. Yes. 

Ms. MARTINDALE. That was a firm fixed price, performance-based 

contract. So as far as the contractor and the type of cable that they 

would install, for them to correct that issue would not have necessitated a modification to the contract. They needed to do whatever 

was necessary to meet the standards that were incorporated into 

the contract. 

Mr. CUMMINGS. Period? 

Ms. MARTINDALE. Period. 

Mr. CUMMINGS. Let me make sure I am clear on this. Even if it 

cost more, you are saying that if the specifications asked for a certain thing, if they wanted to change, do something other than the 

specifications with regard to cabling——

Ms. MARTINDALE. The specifications of the 110/123 contract did 

not specify a type of cable. It specified a standard. They may have 

had to decide what type of cable to use to comply with that standard. If they chose the wrong cable and needed to use a different 

type of cable, a contract modification is not necessary to make that 

change. They just need to make whatever changes are necessary to 

comply with the standard that was incorporated into the contract. 

Mr. CUMMINGS. But if their complaint was that it was going to 

cost more money——

Ms. MARTINDALE. That is the firm fixed price risk nature of performance of that type of contract. 

Mr. CUMMINGS. So it would fall on the contractor? 

Ms. MARTINDALE. Yes. 

Mr. CUMMINGS. So you might not ever even know about that. Is 

that what you are saying? 

Ms. MARTINDALE. That is correct, sir. 

Mr. CUMMINGS. Let me just ask you a final question. The Defense Acquisitions University, are you familiar with them? 

Ms. MARTINDALE. Yes, sir. 

Mr. CUMMINGS. Its report on Deepwater indicates that the contractors and the Coast Guard were both incentivized to underestimate the cost of the new systems and their technical support 

needs. Do you think that was the case? 

Ms. MARTINDALE. No more than any other contractor is 

incentivized to do that to capture a contract in their bidding procVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00133 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
96

ess. They may have underestimated things in an attempt to come 

in with the lowest possible bid to capture the contract. 

Mr. CUMMINGS. That is not unusual? 

Ms. MARTINDALE. No. And we did do cost realism analysis when 

we evaluated the initial proposals at the award of the Deepwater 

contract to try to ferret out those types of concerns. 

Mr. CUMMINGS. And did the integrated team ever develop cost 

estimates that it knew were low-ball? 

Ms. MARTINDALE. Not that I am aware of. 

Mr. CUMMINGS. Basically, what you are saying to me is that folks 

can come in with a low bid to get the contract, get the contract, 

and then when they get it come back for change orders and things 

of that nature, and that is not unusual? Yes or no? 

Ms. MARTINDALE. I do not know that I can say unusual or not. 

Mr. CUMMINGS. But you have seen it? You believe that you have 

seen that happen? 

Ms. MARTINDALE. Yes, sir. 

Mr. CUMMINGS. You cannot say for sure, but based upon your 

judgement you believe that has happened? 

Ms. MARTINDALE. Yes, sir. 

Mr. CUMMINGS. Okay. And I am not trying to put words in your 

mouth. I am just asking a question. 

Mr. LaTourette? 

Mr. LATOURETTE. Thank you, Mr. Chairman. Ms. Martindale, I 

want to pick up a little bit where the Chairman left off. I think I 

have in front of me the DD-250 for the delivery of the Matagorda. 

Just so I am clear, under the exceptions section, there is no reference to the shielded braided cable. The requirement left on the 

Tempest system is that the Tempest and classified testing will 

occur after the delivery of the ship. 

Ms. MARTINDALE. That is correct. 

Mr. LATOURETTE. Have you looked at the Inspector General’s report, the DHS Inspector General’s report? 

Ms. MARTINDALE. No, I have not, sir. 

Mr. LATOURETTE. The reason for that not being listed on here, 

on Page 5 of the Inspector General’s report it indicates that the 

contract required the use of only shielded, not braided, metallic 

shielded cable as recommended by the National Security Telecommunications. And so, because the contract did not make the requirement of braided, you would not list that as an exception, what 

was yet to occur as the Tempest testing. Is that correct? 

Ms. MARTINDALE. That is correct, sir. 

Mr. LATOURETTE. Mr. Michel, I do not know if you are the right 

one to ask this series of questions or not, but we have sort of been 

going round and round on this Tempest testing business. We had 

a witness on the first panel that said no way could this ever pass 

the Tempest testing. We have in the Inspector General’s report not 

a clear indication that it passed the Tempest testing, but the sentence is: ‘‘The Tempest testing conducted on the Matagorda and 

Padre between February 2004 and July 2006 indicated that the cabling installed...’’ so I guess this is the mylar aluminum cabling, 

‘‘during the C4ISR upgrade was not a source of compromising of 

missions.’’ Are you familiar with that finding by the Inspector General? 

97

Mr. MICHEL. I am not, sir. 

Mr. LATOURETTE. And do you have any opinion on that in light 

of your observation that you shared the same concerns as one of 

our previous witnesses? 

Mr. MICHEL. I had examined the visual inspection report that 

was provided to the program by TISCOM and I was made aware 

of the instrumented Tempest survey results that had been performed by SPAWAR. In neither case at the initial survey was the 

vessel recommended for certification. Basically, it failed both tests. 

So what we did to simplify matters, on the DD-250 the items were 

rolled up into this one line item, this Tempest in classified testing, 

because it was simply impossible to do classified testing until we 

could get the vessel to pass Tempest; you just cannot do it. 

Mr. LATOURETTE. Let me ask you this. This observation by the 

IG that whatever testing was conducted indicated that there was 

not—the big issue in the first panel, if you were here, is that we 

had national security stuff floating all over the country and our enemies could have the ability to listen in on these ships, compromising national security. Do you think this statement that the cabling installed, even though it is not the braided cable that everybody prefers, was not a source of compromising of missions is an 

accurate statement or not? 

Mr. MICHEL. It is possible, sir. I did not actually see the instrumented Tempest results for that particular compartment? 

Mr. LATOURETTE. Who would have been in charge of that? 

Mr. MICHEL. That would have been Mr. Ron Porter at TISCOM. 

The report itself was classified. 

Mr. LATOURETTE. Okay. Back to you, Ms. Martindale, for a 

minute. One of the exceptions listed, number seven, is low smoke 

cable, that we heard some things about. We have also heard from 

Lockheed Martin that I think at some point in time, I think after 

the delivery of the fourth ship, that a waiver was granted. Were 

you involved in that process? 

Ms. MARTINDALE. No, sir. 

Mr. LATOURETTE. Who would have been involved in that process? 

Yes, Commander Jacoby, thank you. Could you sort of walk us 

through that process? 

Lieutenant Commander JACOBY. Yes, sir. In July of 2004, I reported on board. One of the issues that was pending, sir, was a request for waiver from the contractor to the Coast Guard for around 

eighty cables that did not meet the low smoke requirement. I could 

see from the documentation that the IPT had worked this issue for 

close to a year. The number of low smoke cables in the waiver request originally was very high. Through the IPT process the number of cables on the waiver was reduced to eighty. I consulted with 

the IPT, got their input, I also called the C4ISR lead, Mr. Michel’s 

replacement, and got his input on recommendation on approval or 

disapproval of the waiver, I signed recommendation of the waiver, 

forwarded it to the contracting officer, and the contracting officer 

approved the waiver. 

Mr. LATOURETTE. Okay. Again, there are a couple of storylines 

that can come out of this investigation and this hearing, and one, 

relative to the low smoke cable, is that because that requirement 

was waived that guardsmen are put at risk if there should be a fire 

98

aboard that vessel. So I guess I appreciate your observations as to 

why you agreed to that waiver, if that were an accurate assessment. 

Lieutenant Commander JACOBY. Yes, sir. To be accurate, the requirement was not waived, the request for deviation was approved 

for specific cables and those specific cables, as was addressed before, were either on the mast, which the rationale that was provided from the IPT and from the C4 community was that a cable 

on the mast that produces smoke does not put anyone at risk. Also, 

some of the cables on the waiver request were, for example, phone 

cords or keyboard cords, not cables that were installed by Lockheed 

Martin but cables that came on equipment. The determination 

from the IPT and from the C4 community was that you would not 

want to cut the phone cords off the COTS equipment and have 

Lockheed try to put low smoke cables in their place, sir. Those 

were the rationales that I received before signing the waiver. 

Mr. LATOURETTE. Okay. And were you involved at all in the 

Tempest cabling issue? 

Lieutenant Commander JACOBY. I was involved not with the initial design, no, sir, but I did make the cutters available to the Tempest inspectors. And then also as the PM, when discrepancies were 

identified, I pursued either physical correction of those discrepancies by enforcing the requirements of the contract, or correcting 

the discrepancies to the satisfaction of Mr. Porter, the certifying 

authority at TISCOM, sir. 

Mr. LATOURETTE. Okay. And let us get to that. Again, when I 

was talking to Mr. Michel and when I was talking to the other witnesses, the allegation is that even though the contract was not violated according to the IG’s finding, that the contractor had a choice, 

there is a preferred cable, the preferred cable was not used, and 

because the preferred cable was not used, we had a danger of national security being compromised. What is your take on that? 

Lieutenant Commander JACOBY. My take, sir, is I relied on the 

recommendations and counsel of the C4 experts in the Coast 

Guard, which, to my knowledge, are certified to certify Tempest requirements. Like I said, we made the ships available for the inspections, we received the discrepancies from the inspections, we satisfied those discrepancies to the satisfaction of the Tempest authority. 

Mr. LATOURETTE. This is kind of key to me because I think everybody wants to be clear. When you say satisfied ‘‘to the satisfaction of the Tempest authority,’’ is there, when this thing passes, I 

know when it does not pass you get a report and say here are the 

problems, when it passes is there some kind of certificate that is 

issued? How do you know that it has passed? 

Lieutenant Commander JACOBY. An Interim Authority to Operate or an Authority to Operate is granted once Mr. Ron Porter is 

satisfied with the Tempest results. For some perspective from the 

program management standpoint, the time period between the inspections and the final Authority to Operate or even the Interim 

Authority to Operate was a span of months, which was weekly 

meetings of the program office, the contractor, and Mr. Porter 

working off those discrepancies. So from a program management 

point of view, for one, it was very difficult to work through this 

99

process and gain that ATL. And how we knew that we had done 

that was satisfied the requirements of Mr. Porter, the Coast 

Guard’s Tempest certifying authority, sir. 

Mr. LATOURETTE. Is it fair, because I do not operate in your 

world, but is it fair that when the ATO, the Authority to Operate 

was issued on these ships that the Tempest test had been completed and the system was installed in a manner that was acceptable to the service? 

Lieutenant Commander JACOBY. Yes, sir. 

Mr. LATOURETTE. And would acceptable to the service include a 

system that was leaking national security information out of its cables? 

Lieutenant Commander JACOBY. I would have to assume that the 

Tempest certifying authority would not grant an ATO if that were 

the case, sir. 

Mr. LATOURETTE. And did you get ATOs on all eight ships? 

Lieutenant Commander JACOBY. Yes, sir. 

Mr. LATOURETTE. Okay. I thank you. Nothing else, Mr. Chairman. 

Mr. CUMMINGS. Mr. Oberstar. 

Mr. OBERSTAR. Mr. Ghosh, you are internally and integrally involved with the design. So who was primarily responsible for the 

design for lengthening the hull 110 to 123 feet? 

Mr. GHOSH. In my opinion, sir, it is Bollinger and ICGS. 

Mr. OBERSTAR. It was——

Mr. GHOSH. ICGS as the——

Mr. OBERSTAR. ICGS. 

Mr. GHOSH. ICGS as the prime contractor and support contractor 

Bollinger. 

Mr. OBERSTAR. What was your role in all of this? You are a naval 

architect, are you not? 

Mr. GHOSH. Yes, sir. Yes, sir, we got involved in the sense that 

in review of the design. But again, Bollinger calculations solved 

that the required strength exceeds the calculations, the 123 exceeds the stand by 100 percent but also I was the first person to 

contact Carderock and VT and Bollinger to get these people on 

board. 

Mr. OBERSTAR. Now you had conversations with, as we understand it, Scott Sampson, a Navy employee at the Carderock facility, 

which I always called the David Taylor Model Basin. In September 

2002, Mr. Sampson warned the Coast Guard at that time of a likely design flaw. Did you get detailed information about that? 

Mr. GHOSH. Yes, sir. Before even then, actually, the 179 problem, 

the cracks on the 179, I knew about that. And they are correct that 

the 179 was lengthened only five percent, but under 123 it was 12 

percent. But there is a distinction between the length. The 110-foot 

versus 175-foot, that length difference makes this problem different. In our analysis, for the analysis in the future, what we 

found and we knew for a small boat the failure which the PC had 

is a yielding failure, meaning steel has yield strength of 40,000 

pounds per square inch. The failure on the 179 PC was cracking 

due to tensile strength exceeding that 40,000 pounds. But in our 

case, the 110, because of the short length, the failure is completely 

different. It is a buckling failure, which could be much lower. Like 

100

in our Matagorda case, it was only 7,200 pounds per square inch. 

So the two failures are completely different and all the knowledge 

and ABS rules and DNV rules, everybody suggested that, like for 

example the DNV rules only apply to more than 150-foot length. 

The ABS rules, the 1997 rule which Mr. Scott Sampson mentioned, 

did not apply. In that rule it said that this buckling, and all this 

conversion needs to be done if it is more than 20 feet. Subsequently, of course, ABS changed that rule in 2003 to 79 feet. 

Mr. OBERSTAR. ABS changed the rule? 

Mr. GHOSH. ABS changed the rule. Yes, sir. 

Mr. OBERSTAR. Now, did the Navy offer to provide design and engineering support for Bollinger, for Northrop Grumman, and for 

the Coast Guard? 

Mr. GHOSH. Yes, sir. 

Mr. OBERSTAR. We understand that offer was declined. 

Mr. GHOSH. Because I couldn’t get the funding. I didn’t have any 

funding. 

Mr. OBERSTAR. The funding was how much? 

Mr. GHOSH. Forty two thousand dollars, as stated. 

Mr. OBERSTAR. Forty two thousand dollars, did you say? Total 

cost, we understand, was somewhere between $50,000 and $60,000. 

This is a $90 million project? 

Mr. GHOSH. Yes, sir. 

Mr. OBERSTAR. Commander Jacoby, could you not find that 

money? 

Lieutenant Commander JACOBY. Respectfully, sir, this was two 

years before I joined the program. I cannot really speak for whether they could find the money or not, sir. 

Mr. OBERSTAR. All right. The Navy offered, and it was not going 

to do this free, they were going to do it on a cost reimbursable 

basis, and the cost was in the range of $60,000 on a $90 million 

contract. I do not understand this. When did you, Mr. Ghosh, become aware of the deck cracking issue on the 123s? 

Mr. GHOSH. After September 2004 Matagorda. 

Mr. OBERSTAR. By a year later, at least six of the eight converted 

ships had developed severe cracking. Is that correct? 

Mr. GHOSH. It is not cracking, sir. There is cracking in the aluminum deck, but the main problem has been the buckling on the 

side cells. The current problem is buckling of the bottom and misalignment of shafts, we cannot keep the shafts aligned. It is a 

much more complicated problem. 

Mr. OBERSTAR. You can have buckling without cracking? 

Mr. GHOSH. Yes, sir. 

Mr. OBERSTAR. I understand. 

Mr. GHOSH. Because the stress level for the buckling is much, 

much lower. 

Mr. OBERSTAR. Did you think it was useful to have the Navy advise the Coast Guard on this? 

Mr. GHOSH. Well, the current problem, the way we have analyzed it—yes, of course, it would have been good. But the solution 

they would have presented at the time, like we have already done 

in our Mod 1, Mod 2 structures, we have increased the section 

modulus as well as the buckling, in case the buckling, and still 

101

there are problems. So it is a much more complicated problem than 

Navy size to think. 

Mr. OBERSTAR. You said something very interesting earlier in 

your statement. You are comparing strength of steel. I know a good 

deal about steel. My district is very much involved in it and I have 

spent a great deal of time on the steel industry. You talked about 

14,000 pound strength per square inch? 

Mr. GHOSH. Forty, sir. 

Mr. OBERSTAR. Pardon me? 

Mr. GHOSH. Forty thousand, sir. 

Mr. OBERSTAR. Forty thousand? 

Mr. GHOSH. Yes, sir. 

Mr. OBERSTAR. I misunderstood. 

Mr. GHOSH. It is a high strength steel. 

Mr. OBERSTAR. Very high strength. Yes. And was it 7,200 pounds 

per square inch——

Mr. GHOSH. For the buckling failure, sir, yes. 

Mr. OBERSTAR. So what was the specification for strengthening 

of the hull, if any, on the 123? 

Mr. GHOSH. The contract is supposed to look at this critical buckling strength, 7,200. But, again, the section that was calculated 

was so high, almost 200 percent than required, so they did not do 

any calculations. Plus, it did not require it. 

Mr. OBERSTAR. A previous panel said that this was not a problem 

at all. That the problem of hull buckling or cracking was due to an 

underlying stringer in the ship construction that was not attached 

and therefore did not provide strength, and that the failure was 

due to something else, not to the design of the hull extension. 

Mr. GHOSH. That is true. The Matagorda——

Mr. OBERSTAR. True that there was a stringer——

Mr. GHOSH. A stringer not welded. 

Mr. OBERSTAR. Did that have a relationship to the strength of 

the hull? 

Mr. GHOSH. That stringer not being welded, the Matagorda failed 

at very low wave height, at very low systems. But eventually, when 

we fixed the problem and increased the strength based on when we 

found the calculus mistake and we increased the strength, which 

Carderock would have suggested the same thing, still we had failure. That failure is not due to just not having the welders stiffen 

her. It is much more complicated. And our theory is, again, we 

have spent half a million dollars almost in trying to solve this problem with experts from Europe, the original designer VT, and several fine detail analyses we have done. 

The main theory, what we think is that because the engine room 

hatch basically does not have the deck, it has a soft patch to remove the engines, that moved towards the midship of the hull. Also 

one other problem would be the 110 and 123 has aluminum deck, 

not steel. Aluminum basically behaves like rubber in this particular case. And that is like a canoe, if you have an open canoe, 

you can push it and it sort of buckles. And that is what is happening. We cannot prove it by analysis and we have gone to many 

experts, nobody could pinpoint the exact failure mode. 

Mr. OBERSTAR. Why would that not have shown up prior to actual construction work undertaken on the vessel? Why would there 

102

not have been a design evaluation before you put the vessel to construction? And secondly, why in the lengthening and strengthening, why did not someone notice the stringer was not attached? 

I do not understand that. 

Mr. GHOSH. Okay. Sir, the stringer not attached was——

Mr. OBERSTAR. And was that endemic to the other vessels? 

Mr. GHOSH. No, sir. 

Mr. OBERSTAR. Just to this one? 

Mr. GHOSH. Just that one. 

Mr. OBERSTAR. But the others cracked, the others buckled. 

Mr. GHOSH. Buckled. And the main problem right now is that we 

cannot keep our shafts aligned. 

Mr. OBERSTAR. All right. So the testimony we got in the previous 

panel was, not your words but mine, a coverup for their failure. 

When you received this information from the Navy and then you 

passed it on and recommended their guidance and action was not 

taken because, in the Coast Guard’s words, they did not have the 

money to do this, did you have any further leverage in this arena? 

Were your hands tied at that point? 

Mr. GHOSH. No, sir. We could not use our own money plus we 

did not have our money also, because these engineer projects we 

have like kind of money to use, you can use can mix and match. 

Mr. OBERSTAR. All right. Thank you, Mr. Chairman. I think that 

testimony is very helpful and sheds important light. I am going to 

come back and review this matter of steel strength and take a closer look at it later, not in this hearing but in another context. I appreciate that. That is very, very useful testimony. 

Mr. CUMMINGS. Mr. Gilchrest. 

Mr. GILCHREST. Thank you, Mr. Chairman. Maybe if you wrote 

a letter to the Coast Guard Auxiliary they would have contributed 

that $40,000 for that extra evaluation. 

Mr. Ghosh, you have in your testimony on Page 3, I just want 

to read a couple of sentences, second paragraph, ‘‘I asked both the 

contracting officer’s technical representative and the Bollinger 

members of the technical management information team to award 

contracts to the Navy’s Combatant Craft division because of its experience with similar problems that occurred after lengthening the 

179-foot Patrol Craft and its earlier involvement with the 110-foot 

Island Class Patrol Boat. I also suggested that Bollinger consult 

Vosper Thornycraft because it was the original designer of the Island Class Patrol Boats. I was unable to get support for this.’’ Who 

did you need to get support to have this done? 

Mr. GHOSH. I would say the project office. 

Mr. GILCHREST. Who was in the project office that did not give 

you support for this? 

Mr. GHOSH. While I was a member of the team I could go there 

and I could not go any further. But also I would like to point out 

that even if we had gotten the support at the time, the section 

modulus, suppose we had gone to Carderock at the time, they 

would have told us to increase the section modulus, and that is exactly what we have done to date. But still the boat fails. 

Mr. GILCHREST. So what I am saying is you had some concern 

about design flaws I guess and you could not get support for further evaluation for those proposed design flaws. 

103

Mr. GHOSH. No, sir. I did not know there was a design flaw. I 

just wanted them to look at the design because they have the experience, more than I did. 

Mr. GILCHREST. Now why were you not able to get support for 

this further evaluation? 

Mr. GHOSH. I cannot speak for—I did not control the money. 

Mr. GILCHREST. Who specifically was the person that turned you 

down? 

Mr. GHOSH. I cannot remember exactly, but everybody in the 

Deepwater program knew about that we wanted to get the money 

to get the——

Mr. GILCHREST. I would just like, Mr. Chairman, I would like to 

follow up and find out who that person was that you suggested that 

you get this other information, and I think I would just like to follow through so we that we can find out who that person or persons 

were. 

I would like to go to Page 5 of your testimony, the second from 

the last paragraph, about the middle way down. I just want a clarification from you, Mr. Ghosh, that it seems from what you say here 

that you now understand what caused the damage on the hull 

buckling on these ships: ‘‘After analyzing all additional information, the Coast Guard’s Engineering Logistics Center has developed 

a solution that might address all the possible mechanisms of damage; add a stiff beam in a closed tube to the upper edge of the deck. 

I believe this will address the major structural problems, but I cannot provide complete certainty that this will work, or that there are 

no other unanticipated problems.’’ So what we are talking about 

here, what Mr. Oberstar is talking about, the hull breaches, the 

hull buckling and all of those issues, a stiff beam in a closed tube 

to the upper edge of the deck will solve some of those problems possibly? 

Mr. GHOSH. Possibly so, yes. The thing is that increasing the 

strength by just putting plates or stiffener did not work. What we 

have come to the theory about that, if we have a closed cell which 

is several hundred times stronger in torsion and that will stabilize 

the deck. 

Mr. GILCHREST. We have eight ships sitting up at Curtis Bay just 

outside of Baltimore City. If you think you might have a solution 

to this problem, should we scrap those boats or should we pick out 

one and see if it will work? 

Mr. GHOSH. Well, that is not——

Mr. GILCHREST. That is not your decision to make. 

Mr. GHOSH. That is not my decision to make. I do not have a 100 

percent guarantee. I cannot guarantee. 

Mr. GILCHREST. Considering all the money that has been put into 

this project—there are some pretty good workers up there at Curtis 

Bay. Is it possible to hold the line, say let us not scrap all these 

ships, let us see if we can salvage one, put it out on the high seas 

for a year? And I will sail down to the McMerdo on it if need be, 

Mr. Chairman, give me six months leave of absence. Are these 

ships so far gone that salvaging one and testing it out just is not 

worth it? 

Mr. GHOSH. No, sir. I agree, you could do that, what you say, sir. 

104

Mr. GILCHREST. So these 110 boats changed to 123, that has 

never been done before? This is the first time we took 110s to make 

them 123s? 

Mr. GHOSH. Yes, sir. 

Mr. GILCHREST. This is really a silly question I guess, but considering all the potential problems that we are seeing here, both from 

Lockheed Martin and from Northrop Grumman, from the aviation, 

the logistics, the hulls and all that, would it not have been more 

prudent to do one, set it out there, because the first one entered 

service in 2005 but there were already hull problems in 2004 on 

that same boat, set it out there and see if you could get the kinks 

out? 

Mr. GHOSH. Yes, sir. 

Mr. GILCHREST. Did the Navy have similar problems when they 

went from 170 to 179? 

Mr. GHOSH. Not similar problems, sir. I just said that the stress 

level on the deck, their’s is in the 40,000 pounds per square inch 

level and ours is between 7,000 to 12,000, in that range. 

Mr. GILCHREST. You talked about solving—this will be my last 

question, Mr. Chairman—you talked about as far as add a stiff 

beam in a closed tube to the upper edge of the deck would have 

solved some of those damage problems with the 123. Is there a 

similar design in the 179? 

Mr. GHOSH. No, sir. They have, again because the problem is different, they have increased the strength. Though my solution also 

calls for increasing the strength, but in the 123 case, just increasing the strength does not help. It has to have a closed cell because 

of the open deck. In the PC, though they have some hatch, but by 

increasing the strength that solved their problems. There was 

cracking in their case. In our case it is mostly buckling. 

Mr. GILCHREST. How many 110s are left in the Coast Guard? 

Mr. GHOSH. Forty-one, sir. 

Mr. GILCHREST. Are any of those going to be 123s? 

Mr. GHOSH. No. 

Mr. GILCHREST. Okay. Thank you, Mr. Chairman. 

Mr. CUMMINGS. Before we go to Mr. Kagan, let me ask you this, 

Mr. Michel. Given that you agreed with Mr. DeKort’s concerns, did 

you believe that Lockheed Martin did anything unethical? 

Mr. MICHEL. I would not say unethical, sir, no. 

Mr. CUMMINGS. Did you file an ethics complaint? 

Mr. MICHEL. I did not, sir. 

Mr. CUMMINGS. Okay. Mr. Kagan. 

Mr. KAGAN. Thank you, Mr. Chairman. I did not know when I 

took this job we might be having sleep-overs. I do not think I 

brought all my equipment. 

Mr. CUMMINGS. At least you are a doctor, so if we get sick you 

can take care of us. 

Mr. KAGAN. That is right. But I am not allowed to write myself 

those prescriptions. 

Is it Doctor Ghosh? Ph.D? 

Mr. GHOSH. No, sir. I have just a Bachelor’s degree in naval architecture from Indian Institute of Technology. 

Mr. KAGAN. With 33 years of experience in architecture related 

to naval vessels? 

105

Mr. GHOSH. Yes, sir. 

Mr. KAGAN. And were you here during the earlier testimony 

when I questioned Mr. Stanley? 

Mr. GHOSH. Yes, sir. 

Mr. KAGAN. And do you agree with his answers with regard to 

potential responsibility? 

Mr. GHOSH. I would say yes, sir. 

Mr. KAGAN. Is there anybody else that you think you should add 

to the list of three? 

Mr. GHOSH. No, sir. 

Mr. KAGAN. And with regard to the name of the person, either 

your superior or someone in your organization that may not have 

been able to come up with the money necessary to do some more 

studies, is it possible that you could find that person’s name, if not 

tonight then in the next several days, certainly during my first 

term here? 

Mr. GHOSH. It has been five years, sir. I did not keep that good 

notes on that. But again, it was in a meeting and all names have 

been given. 

Mr. KAGAN. All right. Well can you offer perhaps three things 

that you think were the primary things that went wrong with the 

110? Give me a list. I have a scientific mind. But do not shake your 

hands because I teach medical students when a professor does this 

we put out notes down, do not write anything, because it is just a 

bunch of bull. So just give me three things that you think were the 

key things that went wrong with this project. Design. You mentioned the space in the hull, the hatch, so to speak. Let me ask you 

yes or no: Can you come up with three things that you think were 

central to the failure of this project? 

Mr. GHOSH. I guess I could. 

Mr. KAGAN. Perhaps then you could write to me and give me the 

answers in writing at a later time. 

[Information follows:]

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Mr. KAGAN. Mr. Michel, you mentioned in your statement that 

you are an assistant deputy for systems implementation with the 

Coast Guard’s nationwide automatic identification system project. 

Mr. MICHEL. Yes, sir. 

Mr. KAGAN. I am sure they do not answer the phone that way. 

But can you give me just a little background about what that 

means, what you do? 

Mr. MICHEL. These days I am more of a program management 

type than an engineering technical lead. But the two are closely related in my present responsibilities. 

Mr. KAGAN. So someone in that organization depends on your 

judgement? 

Mr. MICHEL. Yes, sir. 

Mr. KAGAN. And your judgement is based not just on your education, but your training and your experience. Is that correct? 

Mr. MICHEL. Yes, sir. 

Mr. KAGAN. Sir, you were involved in this project. Let me ask 

you this. Do you agree with everything offered in sworn testimony 

by Mr. Atkins? 

Mr. MICHEL. I do not. 

Mr. KAGAN. Is there anything that you disagree with him on? 

Mr. MICHEL. I think that some of his statements were a bit of 

a stretch. 

Mr. KAGAN. So the adjectives might be a problem. But what 

about the facts? Is it not a fact that some wiring and covering of 

wiring created the possibility, as you testified earlier this evening, 

for eavesdropping? 

Mr. MICHEL. For compromising emanations, yes, sir. 

Mr. KAGAN. And when you left the project, is it not also true that 

that same wiring was in place? 

Mr. MICHEL. Yes, sir. 

Mr. KAGAN. Do you think your judgement was sound in allowing 

it to continue to be present? 

Mr. MICHEL. I made my concerns known during my tenure. 

Mr. KAGAN. Well you did talk about it. But what happened? 

What were the results? What do you think? Was it poor judgment 

to walk away from that project knowing that there were unshielded 

wiring? 

Mr. MICHEL. Perhaps, sir. But it was a promotion. 

Mr. KAGAN. Okay. Okay. I will tell you, I am new around these 

parts and I think, Joe, you testified earlier that you thought there 

was really a contract problem. I do not think it is a contract problem. I think it is a people problem and it is really a problem of 

oversight. And I can, as my time expires here, reassure you that 

the 110th Congress is intently interested in providing oversight. 

And in my evening that I am spending here with you, there was 

one man who was honest thus far, and that gentleman from 

Bollinger is sitting in the back row. Mark fessed up, he accepted 

responsibility, and he has invited everybody else to accept responsibility. 

If I may just ask Cathy Martindale a question. Are you understaffed? Do you have a lot more responsibility to do personally than 

you think one person should be doing? 

109

Ms. MARTINDALE. While assigned to the Deepwater project, yes, 

sir. 

Mr. KAGAN. So how many other staff members do you feel would 

be adequate to get the job done right? 

Ms. MARTINDALE. There should be an over-arching surface contracting officer, there should be a contracting officer assigned to 

each asset; that would be the SRP, the 123, the NSC, the FRC, the 

OPC. That would be five contracting officers, and they would need 

two to three specialists working for each of those contracting officers. 

Mr. KAGAN. Is that not a staff of close to 18 in addition to you? 

Ms. MARTINDALE. Yes, sir. 

Mr. KAGAN. And who would be responsible for providing all that 

staff? Who is the decisionmaker? Where does that buck stop? 

Ms. MARTINDALE. I really do not know, sir. 

Mr. KAGAN. See, one of the principles in my businesses that I 

have run is that if I give someone a job that they cannot do, shame 

on me. Someone gave you a job that was humanly not possible in 

my early estimation. Would you agree with that? 

Ms. MARTINDALE. Yes, sir. 

Mr. KAGAN. All right. So it is a question again of failure of oversight. It is not a failure of contracts. I do not think this is necessarily a problem that is going to be solved by attorneys. This is 

going to be solved by this Congress in its oversight of activities, not 

just in the Coast Guard but elsewhere. 

Any other comments from the panel before I yield back my time? 

Ms. MARTINDALE. I have a comment, sir. I believe another issue 

of concern is the construct of the contractor. It has been a struggle 

in administering the contract when you have a joint venture, ICGS, 

which is a shell of a company, and then you have subcontractors, 

Lockheed Martin, Northrop Grumman Ships Systems, and then another tier subcontractor, Bollinger. Not necessarily do those contract relationships reflect that of the Coast Guard’s with ICGS 

making it an additional challenge. Also, the work was divided up. 

C4ISR was focused on doing their C4ISR work, HM&E was focused 

on doing their HM&E and not necessarily when the two would 

come together do they work compatibly. That was just a fallout of 

the organizational construct with whom we had a contract relationship. 

Mr. KAGAN. You have just described a disorganized orchestra 

where everyone is playing their own musical instrument but there 

is no conductor. So we have Madam Speaker Pelosi to guarantee 

there is going to be oversight in this Congress. I yield back my 

time.k 

Mr. CUMMINGS. Thank you very much. I just wanted to say that 

Admiral Blore, who is right over there, Ms. Martindale, is the guy 

who can get you some more help. Okay? 

Mr. Altmire. 

Mr. ALTMIRE. Thank you, Mr. Chairman. I wanted to clarify one 

thing. This question is for Commander Jacoby. You talked earlier 

about Ron Porter and the visual Tempest exam of the Matagorda. 

Lieutenant Commander JACOBY. Yes, sir. 

110

Mr. ALTMIRE. My question is, was Ron Porter a fully certified 

Tempest authority at the time he conducted the visual Tempest 

exam of the Matagorda? 

Lieutenant Commander JACOBY. To my knowledge, he was. Although I did not verify his certification, sir. 

Mr. ALTMIRE. Okay. Thank you. My next question is also for you 

Commander. According to records supplied by the Coast Guard, 

Matagorda received its Interim Authority to Operate its C4ISR on 

October 14, 2004. It then has a visual Tempest inspection on December 19, 2004, which noted a few lingering discrepancies. It received its Authority to Operate on January 19, 2005. Next, the 123 

class received a class waiver for visual discrepancies on July 12, 

2005. Matagorda itself was reinspected for visual Tempest on October 28, 2005. So the question is, why did Matagorda receive its 

ATO before the class waiver for the 123’s visual discrepancies was 

granted and before Matagorda was given a visual Tempest inspection to assess the condition of remaining deficiencies? 

Lieutenant Commander JACOBY. I tried to keep up with you on 

dates there, sir. I believe that there is a mixing of two issues there. 

The class-wide waiver which applied not to the Matagorda but the 

follow-on hulls was granted I believe on the date you mentioned. 

If I can just run through the Matagorda dates, I think that would 

clear up things. 

Mr. ALTMIRE. Please. 

Lieutenant Commander JACOBY. The Matagorda received a visual Tempest inspection and an instrumented Tempest inspection in 

the February 2004 timeframe, it received Interim Authority to Operate in October 2004, and a final Authority to Operate in January 

of 2005. Those dates in sequential order I believe are the only ones 

applicable to Matagorda. The class-wide waiver, in my understanding from what I have received from Mr. Porter, was after several cutters had been tested, his confidence level that the class met 

a configuration management standard that was consistent across 

the class and so he felt comfortable granting a class-wide Authority 

to Operate. 

Mr. ALTMIRE. Okay. Thank you. My final question we pulled 

from the testimony and it has some acronyms in there which I am 

going to try to pronounce correctly, but forgive me if I do not. From 

March 11 to April 5, 2005, Matagorda was among a group of ships 

reassessed by Navy’s COMOPTEVFOR unit and the Navy wrote 

the following, which I think we were going to put up on the screen 

but it is late now: ‘‘Tempest discrepancies and COMSEC discrepancies were corrected in Coast Guard Cutter Matagorda; however, 

there were unsolved installation discrepancies which precluded 

SPAWAR CISCOM recommendation for Coast Guard 62 to release 

an IATO. Without an IATO cutters were not authorized to transmit 

and receive classified information, significantly limiting their participation in U.S. Coast Guard tactical operations’’ And then later 

they wrote: ‘‘In spite of this progress, physical connectivity was still 

assessed as a high risk based upon the inability to establish and 

maintain classified two-way data exchanges with other Coast 

Guard and naval vessels.’’

Lieutenant Commander JACOBY. Yes, sir. It is my understanding 

that the date on which COMOPTEVFOR, the Navy Command, asVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00148 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
111

sessed the Matagorda it did not have an ATO, therefore could not 

energize their secure communications. So COMOPTEVFOR noted 

that they could not test certain gear during that evaluation. And 

I believe the ATO for Matagorda came several weeks after 

COMOPTEVFOR had done their evaluation, sir. 

Mr. ALTMIRE. Commander, had the Matagorda been handling 

classified information by this time? 

Lieutenant Commander JACOBY. No, sir. 

Mr. ALTMIRE. They had not? 

Lieutenant Commander JACOBY. No, sir. 

Mr. ALTMIRE. Okay. Why did the Coast Guard issue an ATO in 

January 2005 to the Matagorda when the Navy noted that unresolved installation discrepancies precluded SPAWAR from recommending the Coast Guard to release IATO when the system is still 

considered high risk at that time, March-April of 2005? 

Lieutenant Commander JACOBY. Sir, I believe there are two separate processes, the Navy’s operational evaluation of the cutter is 

not linked to Mr. Porter’s working with SPAWAR and determining 

the suitability of the Tempest system, sir. 

Mr. ALTMIRE. Okay. Thank you, Commander. Last question. Did 

the sequence of events pose a risk of compromising national security at any time? 

Lieutenant Commander JACOBY. It has always been my belief 

based on input from the C4 community and the Coast Guard that 

that is not the case. 

Mr. ALTMIRE. Okay. Thank you, sir. 

Mr. CUMMINGS. Tell me again, when did the Matagorda get its 

ATO? 

Lieutenant Commander JACOBY. I show a final ATO granted on 

19 January 2005, sir. 

Mr. CUMMINGS. And was that before the Navy assessment? 

Lieutenant Commander JACOBY. I do not have the Navy report 

in front of me, sir. 

Mr. CUMMINGS. March-April of 2005. How does that affect your 

testimony? 

Lieutenant Commander JACOBY. I would have to check those 

dates, sir. 

Mr. CUMMINGS. That is very, very important because you just 

gave us some information that we want to make sure is accurate. 

We can tell you that the information we got is that the Navy’s examination was in March of 2005. 

Lieutenant Commander JACOBY. Yes, sir. I believe what I am 

reading off of is something we provided for the record. I would be 

happy to provide this and the actual reports for the record, sir. 

[Information follows:]

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Mr. CUMMINGS. Mr. Taylor. 

Mr. TAYLOR. Thank you, Mr. Chairman. Commander Jacoby, you 

were the project officer? 

Lieutenant Commander JACOBY. I was the program manager for 

the 123 program. 

Mr. TAYLOR. In previous testimony I heard the gentlemen talking 

about electronics that were exposed to the weather that were not 

required to be waterproof. I kept waiting for someone to say, no, 

you are wrong, it was in the specs. I still have not heard anyone 

say that. How does something as basic as that happen? Any boatswain mate third class is going to go the first time it rains, the first 

time we catch a wave this stuff is ruined. How does something like 

that happen? 

Lieutenant Commander JACOBY. I agree with your assessment, 

sir, that that does not seem like something that could happen. In 

reality, coming on the program halfway through, I still know the 

contract states environmental requirements for operation of the 

equipment and that a certain radio was installed on the SRP that 

did not meet those environmental requirements, sir. 

Mr. TAYLOR. Were you empowered to catch mistakes like that? 

Lieutenant Commander JACOBY. It actually happened two years 

before I reported, sir. But yes, if I as program manager saw items 

that did not meet the contract requirements, I was empowered to 

work through the contracting officer and make corrections. 

Mr. TAYLOR. Okay. So your predecessor program officer, was he 

a lieutenant also at the time? I am taking it you were a lieutenant 

a couple of years back. 

Lieutenant Commander JACOBY. The prior program manager, 

there were several, some were GS-14s, I am not sure of all the 

ranks of the previous ones. 

Mr. TAYLOR. I realize the Coast Guard, as all the services do, 

throws a heck of a lot of responsibility on very young officers. But 

it strikes me that a program with a $90 million expenditure, eight 

ruined cutters, did you at any time then or since think you just 

were not high enough of a pay rate to address these problems? 

Lieutenant Commander JACOBY. Sir, I think I mirror Ms. 

Martindale’s feelings of the program early on, the staffing levels 

were very bleak. When I reported aboard my billet was actually to 

be the deputy surface program manager with an over-arching view 

of all the cutters construction. Shortly after arriving I saw the 123 

program with a need for some change and some guidance and I 

took that over in addition to the deputy surface job. After some 

months of work on the 123 it was clear that was a full-time job 

plus. So in that timeframe of 2004, people were wearing two and 

three hats and moving the program forward. The Commandant 

yesterday talked about increasing manning levels and oversight. I 

can attest I witnessed over my two and a half years on the program the increase of staffing levels. After a while the people who 

were wearing three hats got replacements and before I left in October of 2006 we were properly manning each billet instead of asking 

people to cover two and three billets, sir. 

Mr. TAYLOR. Again, and I would invite you to correct me, but 

that one jumps out at me as so glaring that I find it inconceivable. 

115

Let us take it to something a little bit more complicated, the hogging and sagging calculations. Is that your normal expertise within 

the Coast Guard? If a crewboat company or a ferryboat operator 

were going to lengthen their vessel, is that the sort of calculation 

that you would run? 

Lieutenant Commander JACOBY. I am not a naval architect or a 

marine safety inspector, sir. But I am a shipboard engineer for the 

Coast Guard, an engineer on 2-through 78-foot ships and even an 

engineer supporting the patrol boats down in Key West prior to my 

deepwater career. I think, from a commonsense standpoint, I share 

your concern that that does not pass the commonsense test. But I 

am not a naval architect to back that up with calculations, sir. 

Mr. TAYLOR. Commander, let me ask you this, and I very much 

appreciate your frankness, what is being done so it does not happen again? I have told you my concerns with the LCS, I have told 

you my concerns with the next generation cutters. Shame on me 

if a mistake is made once, but shame on all of us, enlisted, officer 

rank, Members of the Congress, members of the Administration if 

we let this happen again. I really, based on what I have heard here 

tonight, do not have any confidence that we are doing this any better. And what is particularly troubling, I sense this is the shipboard equivalent of sweeping it under the rug when you cut this 

ship up for scrap or if it is sunk offshore for a fishing reef and it 

is no longer there to be on 60 Minutes. We have got a real problem 

here. 

Lieutenant Commander JACOBY. Yes, sir. 

Mr. TAYLOR. I would like to hear from you as an up and coming 

officer in the United States Coast Guard that you have got a high 

degree of confidence that this is being addressed rather than just 

let us hope nobody asks that question again. 

Lieutenant Commander JACOBY. Yes, sir. I firmly believe that 

the factors that led to the structural as well as the C4 issues we 

have talked about tonight I could see the evolution of the things 

that will keep those from happening again in my two and a half 

years in the Coast Guard. One of them was the manning level that 

we talked about, the wearing three hats. I think there has been 

comparisons between Deepwater manning and Navy shipbuilding 

manning and we were trying to build ships with very few people. 

Another major contributor is the specificity of the requirement in 

the contract. In all these situations, we were dealing with contract 

language that was signed in 2002 and left the contractor and the 

Government in many cases unclear on the exact requirements. It 

was a performance-based contract but it still could have specificity 

that both the Government and industry could use to manage costs, 

manage expectations, manage requirements. 

Additionally, the oversight and the input from regulatory agencies, the Commandant and the PEO have mandated the use of regulatory agencies in further designs, and I have personally been involved in incorporating the things that brought us problems on this 

contract, like specific words in the contract or lack of words in the 

contract, into future contracts for the FRC and the OPC. So I do 

have a sense that I have contributed by the painful lessons learned 

to better contracts and better oversight and better manning for the 

Deepwater program, sir. 

116

Mr. TAYLOR. If a contract passed your desk tomorrow that called 

for a radio, a radar, fill in the blank, that is going to be exposed 

to the weather and did not mandate that it be waterproof, and we 

all know the difference between weatherproof and waterproof, 

would you be empowered to say, no, we are going to fix this right 

now rather than buy two or three or four of these at Government 

expense and replace the ones that do not work? 

Lieutenant Commander JACOBY. Absolutely, sir. I do have examples of issues that arose in the Deepwater program that the program office felt did not meet contract requirements and were able 

to enforce those requirements and get design changes and even retrofits on the cutters. So there are examples of successes in enforcing the contract requirements, and then there are examples of the 

program office unsuccessfully enforcing, mostly because of the 

wording that was incorporated into the contract in 2002, either 

vague or lacking the specificity. 

Mr. TAYLOR. Who in your opinion should have caught the hogging and sagging problem before it happened? 

Lieutenant Commander JACOBY. The Coast Guard’s contract is 

with ICGS. I feel the responsibility was with ICGS. In fact, I 

worked with my contracting officer to issue two latent defect letters 

to the contractor; one days after the Matagorda buckling incident, 

the other several months later when the deformations appeared on 

other cutters. 

Mr. TAYLOR. Okay. Thank you very much, Commander. 

Lieutenant Commander JACOBY. Yes, sir. 

Mr. TAYLOR. Thank you, Mr. Chairman. 

Mr. CUMMINGS. Mr. Oberstar. 

Mr. OBERSTAR. Yes. I have a follow-up for Mr. Jacoby. In January of 2005 the Matagorda got authority to operate; meaning that 

they also had authority to transmit and receive classified data. But 

at that time, according to all testimony we have seen, they had not 

yet passed the instrumented test, as it is called. The only instrument test which allegedly was passed was in July 2006 but for another ship in the same class as the Matagorda. Was it legal for the 

Matagorda to operate under those circumstances? 

Lieutenant Commander JACOBY. I believe so, and I will tell you 

from my perspective why I believe that, sir. The two instrumented 

Tempest inspections, one on Matagorda, one on Padre, were not related. The Padre inspection was not meant to validate Matagorda’s 

Tempest system. The original instrumented Tempest inspection on 

Matagorda, which you referred to as failed, was in my view as a 

program manager, Ron Porter assessed the vulnerabilities or issues 

with that, over time the physical discrepancies were corrected or 

Mr. Porter waived the discrepancies that were noted, and that 

original Tempest inspection was eventually the basis for Mr. Porter 

approving Authority to Operate, sir. 

Mr. OBERSTAR. How does that authority compare to the judgement of the Navy which said in a document we have that the system is still high-risk. 

Lieutenant Commander JACOBY. That is from a COMOPTEVFOR 

report sir? 

Mr. OBERSTAR. Yes. 

117

Lieutenant Commander JACOBY. I believe that the authority for 

Tempest certification lies with for the Coast Guard Mr. Ron Porter, 

for the Navy SPAWAR and not with COMOPTEVFOR, sir. I cannot 

speak to whether they would determine——

Mr. OBERSTAR. There is this gray area here which is now becoming somewhat clearer that there were deficiencies and these deficiencies were granted waivers instead of being repaired rather than 

being covered up. 

Lieutenant Commander JACOBY. I do not know the waiver process or the mentality that goes behind the waiver process at Mr. 

Ron Porter’s shop. 

Mr. OBERSTAR. Okay. Thank you. We need to proceed on to the 

next panel. I particularly want to thank Mr. Ghosh, a naval architect, for his very candid and straightforward and helpful answers. 

Mr. CUMMINGS. Thank you. Thank you all very, very much for 

being with us. Your testimony has been extremely helpful. You are 

excused. 

Mr. CUMMINGS. We will call our next panel now. Rear Admiral 

Gary T. Blore, and Vice Admiral Paul E. Sullivan. 

Raise your right hands, please. Do you swear to tell the whole 

truth and nothing but the truth, so help you God? Thank you. Let 

the record reflect that the witnesses answered in the affirmative. 

Thank you all very much. I know it has been a very, very long 

day. Hopefully, we will not take you into tomorrow. 

Rear Admiral Blore. 

TESTIMONY OF REAR ADMIRAL GARY T. BLORE, PROGRAM EXECUTIVE OFFICER, COAST GUARD INTEGRATED DEEPWATER SYSTEM; VICE ADMIRAL PAUL E. SULLIVAN, COMMANDER, NAVAL SEA SYSTEMS COMMAND, U.S. NAVY 

Admiral BLORE. Thank you, sir, and the members who have 

stuck it out with us. Good evening, Mr. Chairman, and distinguished members of the Committee. It is a pleasure to be here 

today with my colleague Admiral Sullivan. I respectfully request 

my previously submitted written testimony be entered into the 

record. 

Mr. CUMMINGS. Without objection, so ordered. 

Admiral BLORE. I would like to thank the Congress, in particular 

this Committee, for your oversight of the integrated Deepwater system. We have adopted many of your Committee recommendations 

as we reform the Deepwater acquisition process. I believe the Deepwater program is our best strategy for building a 21st century 

Coast Guard capable of executing our missions in maritime safety, 

environmental protection, homeland security and homeland defense. As part of our effort to strengthen the Deepwater program, 

and with the Commandant’s leadership, we have met extensively 

with Integrated Coast Guard Systems, ICGS, Lockheed Martin and 

Northrop Grumman. We have had frank discussions with industry 

about our intentions moving forward. We have strengthened the 

Coast Guard’s acquisition process and revamped our procedures to 

ensure that the contract expectations of the Coast Guard and the 

American taxpayer are crystal clear. 

This hearing is focused on mistakes the Coast Guard made in 

our first Deepwater shipbuilding project. Not a day goes by that I 

118

am not fully committed to avoiding a recurrence of this disappointment. Our Coast Guard men and women deserve better as does the 

public we serve. You have my assurance that I will take every step 

necessary to redress insufficiencies in analysis and communications 

that led to the premature decommissioning of the 123-foot patrol 

boats. However, we must not fall victim to living in the past which 

neither recapitalizes the Coast Guard nor serves the public interest. Instead, we must apply lessons learned to ensure a successful 

future for the Coast Guard, our acquisitions, homeland security, 

and the American people. 

The Coast Guard has options in choosing from whom to acquire 

our assets, consistent with the Federal Acquisition Regulations. 

With the Commandant’s support, I intend to use robust business 

case analysis, competition, and best value criteria in choosing 

which manufacturers will execute our projects. In many cases that 

may continue to be Lockheed Martin and/or Northrop Grumman, 

and to that end the Commandant and the company CEOs recently 

signed an agreement asserting the Coast Guard would: transition 

into becoming the systems integrator, lead management of all 

lifecycle logistics, expand the use of the American Bureau of Shipping, accelerate the resolution of remaining national security cutter 

issues, and where practicable work directly with the prime vendors. 

These actions combined with numerous other acquisitions and program management reforms will make the Deepwater program of tomorrow fundamentally better than the Deepwater program of 

today. 

This Committee has been a catalyst for much of this change. But 

the fundamental underpinnings of this reform began the day Admiral Allen became Commandant, just under a year ago. His first, 

very first new initiative as our Commandant was to direct a consolidation of our acquisition organization. Shortly thereafter, he 

adopted the blueprint for acquisition reform which called for a restructuring and prioritization of our agency’s entire acquisition 

process. We will stand up this new structure beginning July 13th 

and it will take shape fully over the next several months. 

For the upcoming award term, which starts this June, the Commandant has asked me to focus on more favorable Government 

terms and conditions and on those priority delivery task orders occurring during the first 18 to 24 months. This allows the recapitalization of the Coast Guard to continue unabated while acquisition 

reforms are implemented, at the same time allowing a full spectrum of options for future Government purchases. 

Today marks the start of my second year in this assignment. 

Critical to our acquisition is the partnership we have built with our 

sister service. The Navy is our third party independent assessor of 

choice. They speak Coast Guard, they understand us, and have superb engineering and technical expertise to share. For example, a 

quarter of my resident project office staff at the Pascagoula shipyard is on loan from NAVSEA on a reimbursable agreement. Our 

daily contact is across dozens of NAVSEA’s divisions, involving millions of dollars transferred from everything such as Navy-type, 

Navy-owned equipment to technical review. And now with the elevate role of our Coast Guard Technical Authority, the relationship 

with NAVSEA is even more integrated. 

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In conclusion, a properly equipped Coast Guard is critical to our 

Nation, and reforming the Deepwater acquisition is critical to a 

21st century Coast Guard. I look forward to working with you to 

ensure we can accomplish acquisition reform without derailing recapitalization but while focusing on the acquisition fundamentals of 

cost control, schedule integrity, and the surpassing of performance 

expectations. Thank you, Mr. Chairman. I would be pleased to answer your questions. 

Mr. CUMMINGS. Thank you very much. 

Vice Admiral Sullivan. 

Admiral SULLIVAN. Good evening, Mr. Chairman. Thanks for 

having us here tonight. My name is Vice Admiral Paul Sullivan. I 

am the Commander of the Naval Sea Systems Command. Before I 

had the job I have today I was the deputy commander for ship design, integration and engineering. I have also been a program manager of two submarine acquisition programs. 

I am here to discuss our partnership with the Coast Guard with 

regard to acquisition and also technical authority. I would be happy 

to answer any of your questions, sir. 

Mr. CUMMINGS. Very well. Thank you very much to both of you. 

Rear Admiral Blore, first of all, I want you to know that I think 

everybody on our panel on both sides of the aisle have tremendous 

confidence in Admiral Allen. He has clearly been a man of action 

and he has made it clear that he is going to make some significant 

changes. I had an opportunity to review his statement yesterday, 

his press statement, and I was very impressed and was glad that 

he was moving in the direction he is moving in. 

That being said, you have heard the testimony today. I think we 

can actually start with Ms. Martindale. She seems to be very diligent and hard working employee, contracting officer, given that she 

has got not enough people. I do not think that she was trying to 

make you all look bad, she was just answering questions honestly. 

We have heard testimony throughout about how it appears that 

there are problems with having the personnel to do the Tempest 

test and the resources to properly do them. So while we listen and 

we hear, and I can go on and on, you have heard the testimony, 

it is clear to me and it is a worry that I have expressed to Mr. 

Oberstar on at least two occasions, if not more, that we have got 

to make sure that if the Coast Guard is taking on these responsibilities that they have the personnel, the expertise, and the resources to take them on. To me, if that is not the case, then I think 

that we move from one bad situation to another bad situation. 

So I am just wondering where does that stand? I will be very 

frank with you. At this moment, just based upon what I have read 

and what I have heard, I do not know that the Coast Guard is in 

a position to do certification with regard to Tempest. I am not sure. 

And there are a lot of other things I am concerned about. That is 

not beating up on the Coast Guard, because we want to be the 

Coast Guard’s number one advocates, but we want to make sure 

that the Coast Guard has what it needs. So taking into consideration what was said by the Admiral yesterday, are we prepared to 

take on that responsibility? 

Admiral BLORE. Yes, Mr. Chairman, I believe we are. I share 

your respect for Ms. Martindale and I would like to hire her back 

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as a contracting officer for the Deepwater program if she would like 

to return and join us. 

Since I became the program executive officer a year ago, we have 

brought on about 45 new staff positions. That was the first increment that the Commandant and I had worked out together as we 

started preparing to build out our system integrator capability. I 

would not disagree with you for a moment that we are not prepared tomorrow to take over entirely the system integrator role. 

The Commandant has a plan to transition. We are much more capable on the logistics and the material side of the Coast Guard. We 

still need to do a lot of build out especially on our C4ISR side, and 

I will be depending on my colleague heavily and other Government 

sources to assist the Coast Guard with that. 

Right now, we have 22 contracting officer billets within the program. We have expanded that since Ms. Martindale left. Again for 

full disclosure, and I believe NAVSEA probably shares this issue, 

while I have 22 contracting officer positions, I do not always have 

22 contracting officers. Hiring in the Washington, DC general area 

for what is called an 1102 general schedule person is difficult, especially at the junior classification rates, although we work on that 

very hard again with our colleagues. We will continue to use 

SPAWARs as a facility to run our Tempest testing. I think some 

of the confusion earlier is we have always used them for the instrumented testing. The actual certification is done by a Coast Guard 

official, and that is why sometimes it may have been confusing who 

was doing the certification. Tempest for Coast Guard assets is certified by the Coast Guard based on SPAWAR testing. 

Mr. CUMMINGS. Let me ask you this. In the Admiral’s statement 

yesterday he said something that while it impressed me and it 

made me feel good, left me kind of slightly with question marks. 

He said the Coast Guard will expand the role of the American Bureau of Shipping or other third parties as appropriate for Deepwater vessels to increase assurances that Deepwater assets are 

properly designed and constructed in accordance with established 

standards. What does that mean, if you can tell me? In other 

words, one of the things that we have run into here with regard 

to Tempest is what is the standard. Is the standard a moving target? Is the standard something that can be waived or whatever? 

But putting Tempest aside, let us just deal with the American Bureau of Shipping, in talking to all of our experts they tell me if we 

would adhere to their standards we would be in pretty good shape, 

very good shape. I am wondering, does this statement mean that 

is the standard we will be using, or what does this mean? 

Admiral BLORE. Do you mind if I just ask Admiral Sullivan to 

comment on ABS because we try to pattern off his program. 

Mr. CUMMINGS. Sure. Please. Whoever is best to explain it. 

Admiral SULLIVAN. Yes, sir, Mr. Chairman. When you are building a ship or any complex system there obviously has to be a standard that that ship or system is built to. Either the service can 

maintain a set of standards that you design and construct the ship 

in accordance with those standards and then you certify that ship 

that it has been built to the design that meets the standards. The 

third party aspect can either be handled by the service or by this 

third party, such as the American Bureau of Shipping. In the case 

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of what we have in the Navy, we have been partnering with ABS, 

we have had a situation where we were unable to maintain our 

own standards due to lack of funding, we partnered with the ABS 

and developed a new set of standards that are not ABS standards, 

they are Navy-ABS partnership standards called the Naval Vessel 

Rules. 

We have had a lot of discussions in Mr. Taylor’s Committee on 

what that meant to the LCS program. But they are the rules to 

which you certify the ship. Either the service can perform that certification by an examination inspection, looking at paper signatures, objective quality evidence we call it, to make sure that the 

ship has been certified to those standards, or we can actually hire 

the third party, which in this case is the American Bureau of Shipping, to what we call ‘‘class the ship’’ by examining first the design 

and making sure the design meets that standards, and then by inspecting the ship as it is being constructed and certifying that the 

ship was built in accordance with the design which met the class 

standard. 

Mr. CUMMINGS. So who would do, say, the third party certification of things like the systems such as electronics? Who would 

do that? 

Admiral SULLIVAN. Yes, sir. ABS does not have experience to do 

that. So for naval ships, as Admiral Blore said, the Space and 

Naval Warfare Systems Command, otherwise known as SPAWAR. 

They would do that certification for the Navy. 

Mr. CUMMINGS. Admiral Blore, can you guarantee that none of 

the problems found on the 123s will be repeated on the NSCs? 

Admiral BLORE. Mr. Chairman, I can guarantee you that when 

we discover them we will address them individually and correctly, 

and will communicate, and will do the analysis necessary so that 

we knowingly walk into the future. I am not going to suggest for 

a moment that a platform as complex as the National Security Cutter is not going to encounter issues. I have 20 or 22 right now that 

I look at at my level but we address each one, we address the risk, 

we address the potential consequences, we work with our colleagues primarily at SUPSHIPS down in Pascagoula and eliminate 

them as discrepancies. 

Mr. CUMMINGS. Are you anticipating, other than beyond what 

you just said, are you anticipating those problems similar to the 

123s in any way? 

Admiral BLORE. Absolutely not. The National Security Cutter 

will be the finest Coast Guard cutter we have ever had. It will be 

more capable, we are working through all the issues, and we are 

doing it before we accept delivery of the cutter. 

Mr. CUMMINGS. Thank you. Thank you. That is helpful. Is that 

a new way of doing business? 

Admiral BLORE. I think Congressman Taylor would say it is the 

only way of doing business. It is the way we should have always 

been doing it to work out these things before the Government accepts final delivery. In almost probably every case when you do a 

DD-250 and accept custody there is going to be some discrepancies, 

but there should be no major high-risk discrepancies that you are 

accepting when the Government takes ownership. 

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Mr. CUMMINGS. Thank you. As far as low smoke cabling, is that 

used in the NSC? 

Admiral BLORE. Yes, sir. 

Mr. CUMMINGS. Is it meeting specifications? 

Admiral BLORE. Yes, sir. But there is similar issues to what we 

discussed before in that one of the tenets of the Deepwater program, and I think it is a good tenet, is to attempt to use commercial off-the-shelf equipment when it is appropriate. So we have a 

lot of the little like the mouse cable to the computer, a water fountain that just does not come with low smoke cabling. It is possible 

for the Government to request that all to be switched out, but we 

do not think anybody is at any degree of risk because of a couple 

feet of cable. When it is longer, for example, the main mount, the 

57 millimeter came with non-low smoke cable and we asked the 

manufacturer to switch that out before we installed it because it 

was a pretty long run. 

Mr. CUMMINGS. You have heard the testimony with regard to 

these waivers. Do you think that the Coast Guard appropriately 

waived in the past, and do you see any changes with regard to 

waivers in the future? One of the concerns, it seems to me, and I 

heard the testimony of some earlier witnesses about how there 

were certain things that maybe were connected to telephones and 

things of that nature, wires, but it seems to me we would try to 

be in front of all of that so that we lessen the disputes. I am just 

wondering, are there any lessons learned with regard to waivers? 

You know what happens when we hear about waivers, we begin to 

think, well, is somebody trying to get around the provisions of the 

contract. And when you are talking about low smoke cabling, then 

it sends up bright lights and alarms because we are concerned that 

your personnel might be harmed in case of an emergency. So I am 

just wondering, are there any lessons learned with regard to these 

waivers? 

Admiral BLORE. Yes, sir. I think there are a lot of lessons 

learned. But let me just speak to one of them because I think it 

is probably the singularly most significant event in the way we conduct the Deepwater program now. When Deepwater was first organized it was basically our organic organization; everything was contained within it. We did our own logistics, this is going back to 

2002/2003, and it became somewhat isolated. It originally started 

with only 75 Government personnel. We are much larger than that 

now. 

We have formally established the role of our technical authority, 

which is Admiral Dale Gable, which is, in essence, a smaller 

version of NAVSEA that we have within the Coast Guard, and we 

have another Admiral Dave Glen who functions in the same role 

for C4ISR. I am not an engineer. Even the engineers will offer different opinions occasionally, some of which you have heard today. 

The beauty of the current system is I do not try to sort that out. 

I go to the chief engineer of the Coast Guard and say what would 

you like me to do, or I go to the chief C4ISR admiral in the Coast 

Guard and say what would you like me to do. Because, in the end, 

it is their opinion that I am going to value and follow. So I think 

that is the most significant thing. If the chief engineer of the Coast 

Guard said that we should accept a waiver on something, I would 

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certainly discuss it with him to make sure I understood what his 

rationale was, but that is why he was appointed in that position 

for the Commandant, and the same thing on the electrical side. 

Mr. CUMMINGS. Now would you send the cutter one to the Navy 

COMOPTEVFOR, is that how you pronounce it? 

Admiral BLORE. Yes, sir, COMOPTEVFOR. It is Commander, 

Operational Test Forces. 

Mr. CUMMINGS. Will you do that? In other words, are you going 

to send them to that center for the same analysis that was performed on the 123s? 

Admiral BLORE. Yes, sir. In fact, we have established a huge 

staff of eight Coast Guard men and women that are actually assigned the COMOPTEVFOR that work with the larger staff that is 

there so that we can help advise the testers and evaluators with 

COMOPTEVFOR of what the Coast Guard unique requirements 

are, and the Coastees are actually assigned there full-time and sit 

next to our Navy and Marine colleagues. 

Mr. CUMMINGS. Now the Defense Acquisitions University recommends that the Coast Guard should convene a summit of the 

Coast Guard, the integrated team, and the Navy to examine all 

opinions about fatigue life on the NSCs. Will you convene that 

summit? 

Admiral BLORE. Yes, sir. I actually hired Defense Acquisition 

University to come in and do that analysis because we wanted to 

get the opinion of acquisition professionals on our acquisition policy. As you know, they gave us a good number of recommendations 

which we are incorporating. We have already had that summit. We 

have worked with the Carderock division of NAVSEA, and we have 

actually worked out a technical solution now with Northrop Grumman. It is not on contract yet, it should be on contract by the end 

of this month. It is typically referred to in the Coast Guard as the 

‘‘one break solution,’’ but it assures the fatigue life of the National 

Security Cutter of 30 years, 30-plus years. 

Mr. CUMMINGS. What measures will now be taken to increase the 

role of the Navy in testing the C4ISR security, in assessing the effectiveness of the ship designs, and improving the management of 

the Deepwater contract? 

Admiral BLORE. Specifically for C4ISR, Mr. Chairman, we are 

trying to build our own Coast Guard organic capability a little bit 

more. It is going to probably take us 18 months before we have our 

own evaluators within the Coast Guard. In the meantime, we are 

completely dependent on NAVSEA for any of the instrumentation 

and testing. We certainly have some expertise in the Coast Guard 

but it is certainly not our intention to go it alone for C4ISR. That 

will be an area in particular that we will be heavily dependent on 

Admiral Sullivan and others. 

Mr. CUMMINGS. The Defense Acquisition University report suggests that the acquisitions excellence in business competencies are 

not valued in the Coast Guard as much as operational excellence. 

Can you comment on this finding, and what will you do to cultivate 

acquisitions and financial management expertise among your personnel? I want to go back to something that the Commander said 

when he talked about, and this has come up in other hearings, the 

capacity to have contracting officers, folks who have expertise in 

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putting together these contracts. I think Admiral Allen has admitted, along with many others, that part of the problem with this 

contract is that a lot of the provisions are not necessarily in our 

best interest, and some place us in a position where they just call 

out for dispute because there are some ambiguities. Perhaps we 

could have resolved a lot of this, I think Ms. Martindale may have 

mentioned it too, if we had had the experienced contract folks involved in the process of creating the contract that was more balanced and certainly in the best interests of the Coast Guard and 

the American people. 

Admiral BLORE. I agree with what you just stated, Mr. Chairman. We have a type of contract that probably requires the most 

sophisticated expertise in contracting officers as opposed to a contract that has a lot more specifications. That is why we are changing the terms and conditions as we go into the next award term. 

We really do believe that the contract is the key, which is why we 

want to work on the terms and conditions, and at least enough 

specificity that, while it is still a performance-based contract, there 

is enough specificity so there is no misalignment with what we expect from industry. 

Mr. CUMMINGS. Thank you. Mr. LaTourette. 

Mr. LATOURETTE. Thank you very much, Mr. Chairman. Admiral 

Blore, in your written testimony you state, ‘‘At no time did the 123-

foot patrol boats engage in mission operations without first successfully completing standardized testing.’’ Does that mean that at no 

time did these vessels operate without the Authority to Operate 

designation? 

Admiral BLORE. Sir, to the best of my knowledge, they have 

never transmitted on a classified frequency or received on a classified frequency without the correct authority to operate. These cutters have commanding officers, they know when they have authority to operate; they will and have in the past gotten underway and 

not energized any of their secure gear because they did not have 

the authority to operate. I can also say as part of my sworn testimony that I have never been made aware of any compromise that 

has ever occurred off a 123-foot cutter. We are also, the Coast 

Guard, a member of the intelligence committee, and neither has 

my chief of intelligence of the Coast Guard ever notified me that 

there has been a detected compromise from a 123-foot cutter. 

Mr. LATOURETTE. And to both admirals. The Chairman talked 

about waivers and we have spent a good portion of the hearing 

talking about Tempest and Tempest testing and waivers. Is it unusual for waivers to be granted in the Tempest testing program either in the Coast Guard or in the Navy? 

Admiral SULLIVAN. It is not unheard of but it is not common. 

Mr. LATOURETTE. Admiral Blore? 

Admiral BLORE. I really do not think I know the answer to your 

question. I am sorry. It certainly appears to have happened in the 

123. I would be happy to submit something for the record and go 

through the rest of our cutters and see whether they have any 

waivers. 

Mr. LATOURETTE. If you could. 

[Information follows:]

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34798.037
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Mr. LATOURETTE. As a follow up question, and if you cannot answer this today maybe you can get back to me too, but Admiral 

Sullivan, if you know, can these waivers ever be granted if there 

is a risk that national security will be endangered? 

Admiral SULLIVAN. I think I would rather take that for the 

record so I could pass it to the proper people. I am more the ship 

engineering guy than the C4ISR. 

Mr. LATOURETTE. Okay. And Admiral Blore, maybe you could get 

back to us on that one as well. 

Admiral Blore, yesterday in the Commandant’s statement he 

made about three insightful and succinct points that led us to that 

point. He stated that the Coast Guard relied too much on the contractors to do the work of Government. As a result, the tightening 

AC&I budgets, a dearth of contracting personnel in the Federal 

Government, and a loss of focus on critical Government roles and 

responsibilities in management and oversight of the program. I 

think the principles that he laid out clearly address the third item. 

But relative to the contracting officers, I think it would be my 

observation that contracting officers, like Ms. Martindale, do not 

fall from the sky. And one of my questions was does the service 

have the ability to do that today, and I think you said no, and I 

think you said something about 18 months. Maybe I am mixing 

your answers. Can you just share with us how many of these experts the Coast Guard thinks it needs to hire to adequately do the 

job, and how the service plans to identify and hire these folks? 

Admiral BLORE. Yes, sir. I believe currently we have sufficient 

contracting officer positions, the 22 that I alluded to before. I think 

right now we have 17 filled, so I would like to bring that up to complement. There are a couple things that the Office of Personnel 

Management is allowing us to do now. We can do what is called 

direct hires. So if I find somebody that is fully qualified, I can basically offer him a job on the spot if they are qualified to be a Government contracting officer. 

So that has helped. We have also had a shift in processes where 

we are using our contracting officers in the field more than we did 

originally with the Deepwater program. For example, I have a contracting officer in Elizabeth City at the aircraft repair and supply 

center, and I am doing a lot of the spare parts purchases for the 

CASA and also through Eurocopter for the H-65 helicopter through 

the facility at ARNSC. We are starting to set up the same thing. 

I have a contracting officer that is about to be warranted in 

Pascagoula so that much of the contracting work can be done on 

site, which I think frankly is the Navy model where contracting officers are typically on site where the construction is taking place. 

Mr. LATOURETTE. Okay. My last question, Mr. Chairman. The 

first panel, I know Admiral Blore you were in the room for the first 

panel, I think I have tried to boil down the essence of the allegation that was made. The allegation that was made by some folks 

in the first panel is that Lockheed Martin underbid the 110 conversion contract without the expertise to properly complete it. Then 

when discovering that they were over their head, they made business decisions based on cost and schedule on, among other things, 

low smoke cables and shielded cables for the Tempest system that 

compromised national security and endangered Coast Guard perVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00164 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
127

sonnel. Do you think that is an accurate representation of what 

happened with this conversion program? 

Admiral BLORE. I do not believe I have the necessary information 

to make a judgement, sir. The one thing I would say, and I think 

this would support what Ms. Martindale said, is a properly run acquisition would run enough Government cost estimates and other 

surveys, including using our Government audit agency, to ensure 

that a contractor is not bidding a price that on its appearance could 

not possibly do the work that the Government is asking for. That 

is the way the Government protects against what someone earlier 

referred to as an aggressive bid. If it is that aggressive, then the 

good Government cost estimate should show that it is too aggressive and work should not be awarded. I do not know enough about 

the details to really answer the question you asked, sir. 

Mr. LATOURETTE. Specifically on the waivers and the low smoke 

cabling that Commander Jacoby talked about, are you in agreement or in a position to be in agreement with the decision he made 

relative to the placement of those cables on the ship? 

Admiral BLORE. I think I would, based on everything I know, I 

think I would agree that the waivers were appropriate for the nonlow smoke cables that were used. One of the things that the Inspector General pointed out, which was very true, is that often the 

waivers and deviations were given after the fact; in other words, 

they were following installation. That is another bad acquisition 

practice. If you are going to do something like that, it ought to be 

done before anything is installed. But I think the actual location, 

and I think even the Inspector General agreed with this, that there 

was no risk to the Coast Guard crew for the non-low smoke cables 

that were installed. But they did find fault with the process and 

why the deviations were given after the fact. 

Mr. LATOURETTE. And the fact that four ships had been delivered 

out of spec until that waiver was requested and granted. Okay. 

Thank you very much. Thank you, Mr. Chairman. 

Mr. CUMMINGS. We are going to do business differently now, 

right? I am just following up on what Mr. LaTourette just asked 

you. We are not going to be having these waivers after the stuff 

is already done, are we? 

Admiral BLORE. Not unless the waiver is in the interest of the 

Government. There is always going to be considerations made that 

perhaps a piece of equipment is in the interest of the Government 

to have installed before the fact, otherwise we will not accept it. 

Mr. CUMMINGS. Before we get to Mr. Oberstar, I think one of the 

things that we are most concerned about, when you talk about this 

low smoke cable and things that would go to the very survival, I 

am talking about life and death of the very people that you command, I think that we have to have a certain hope, a standard 

where if we are going to err with regard to waivers, we err on the 

side of life and safety. And sometimes I just wonder, I have read 

what has been written in the IG report or what has been represented to us, and I just wonder whether we have done that consistently with those waivers. I think when we are dealing with 

things like that, you know what, if we are granting these waivers 

and then something happens and we in the Congress knew about 

128

it and did not try to address it, then I think we become a part of 

the problem. 

Mr. Oberstar. 

Mr. OBERSTAR. Well said, Mr. Chairman. And Mr. LaTourette, I 

also appreciate your line of questioning and the issues you raise. 

They are extremely important. 

Admiral Blore, at the outset of your testimony, and Admiral Allen’s remarks in a news conference yesterday, ‘‘avoid recurrence.’’ 

Good. We want to avoid recurrence. But let us avoid living in the 

past. Let us not review the past. Philosopher George Santayana 

wrote ‘‘Those who do not study the past are condemned to relive 

it.’’ Thirty years ago, the Coast Guard in 1978 completed construction of two polar icebreakers. It was my first or second term in 

Congress. The Polar Sea and the Polar Wind. The Polar Sea went 

on mission to break ice in the North Pole. In February of 1981 it 

got stuck and stayed there for two months. We are about learning 

lessons from the past and making sure they are not repeated in the 

future. I do not want to be lectured in this Committee and all our 

members be lectured about learning from the past. 

Were you aware that Admiral Kraymek [phonetically] after he 

retired went to head the ABS, American Bureau of Shipping? 

Admiral BLORE. Yes, sir. 

Mr. OBERSTAR. And that during his tenure, he is now retired 

from there, he offered to Bollinger to do structural engineering 

analysis and to do it free. Are you aware of that? And was refused. 

Admiral BLORE. I am not aware of the details, sir. I have certainly heard that but not from a necessarily credible source. But 

certainly I have heard the story that it was offered. 

Mr. OBERSTAR. In one case the Coast Guard said, gee, we do not 

want to take the Navy’s offer of doing this design analysis because 

it is going to cost us $42,000. On the other hand, the shipyard gets 

an offer of free review and analysis and they will not take it either. 

There is something wrong with this. 

Admiral Allen announced yesterday the Coast Guard is going to 

take the lead role of systems integrator for Deepwater. I am not 

convinced you are ready to do that. Tell me how you think you are 

going to be able to do that in light of the testimony we have heard 

today. 

Admiral BLORE. Yes, Mr. Chairman. Before I answer that, let me 

say it was never the intent on the part of the Coast Guard, and 

certainly I speak for the Commandant, to sound like we were lecturing anyone on learning from the past. There is perhaps a little 

bit of a semantic difference. We do believe in learning from the 

past. We do believe in applying those lessons to the future. I think 

we meant it more in the context of not to fight the last war. We 

need to learn from the past and apply it to the future acquisition, 

because we know, and as you know, we have a responsibility to recapitalize the Coast Guard so we can keep doing our missions. That 

is what we meant. I am not suggesting for a moment we should 

not learn lessons from what occurred——

Mr. OBERSTAR. I appreciate that, but we want to know that the 

Coast Guard is learning those lessons and that they are ready to 

in various ways shoulder the responsibility of handling multibillion 

dollar contracts that are going to carry the Coast Guard’s capital 

129

equipment program into the future with a high degree of certainty 

that it can succeed. I have been through this years ago with the 

FAA. 

They were unable, as it turned out, and it was again the Navy 

who came in and did an assessment, Admiral Sullivan, of FAA’s 

procurement program in the STARS acquisition an the Advanced 

Automation Replacement System, and said they just do not have 

the personnel, they do not have the systems, they do not have the 

structure, they do not have any understanding of how to handle 

these multibillion dollar contracts. 

And it seems to me the Coast Guard was in the same mess. You 

got in way over your head and you allowed these contractors to certify themselves. And we want to know when we go forward, we 

want to do this Coast Guard authorization bill and do it right, put 

the money out there that is needed, give you the resources you 

need to move ahead, we want to know you are going to be able to 

do the job right. 

Admiral BLORE. Yes, sir. I appreciate that and I appreciate your 

support for the resources. I believe we can do it right. That is why 

we have increased our staffing, that is why we have changed our 

processes on how we address things, and that is why we have a 

much closer working relationship with the United States Navy, because we know what we can do and we know what we cannot do 

and that is where we will depend on other Government agencies, 

primarily the Navy. 

Mr. OBERSTAR. To whom does the Navy turn when it needs advice on hull, machinery, and electronics? Or are you really, as everyone says, the gold standard? 

Admiral SULLIVAN. Sir, I do not know if we are the gold standard, but we have worked very hard to keep the expertise for hull, 

mechanical, electrical, and electronics in-house because we believe 

that only the service can be in charge of knowing what it wants 

and specifying what it needs and in directing the contractors to deliver the performance that we need. Now that is a very precious 

core capability, we feel it is inherently governmental, and it takes 

years to grow. 

Mr. OBERSTAR. In the upcoming authorization bill, it seems to me 

this would be an appropriate time to craft, as we have done for the 

Corps of Engineers in a bill that is coming up on the House floor 

tomorrow, a process of independent review. Admiral Blore, what 

would be the Coast Guard’s reaction to, in general, an independent 

review authority for major contracts? 

Admiral BLORE. Well I think generally our reaction would be if 

it is the desire of the Congress that we would execute it. I do not 

know that we need congressional authority to do that. I think much 

of the independent reviews, such as hiring Defense Acquisition 

University and using third parties, we have ample authority to do 

ourselves. 

Mr. OBERSTAR. There is no question you have ample authority to 

do it. You have showed you have not used that authority and 

maybe what you need is direction from the Congress. 

Admiral BLORE. Mr. Chairman, respectfully, I think that I would 

agree with your statement for 2002 through about 2004-2005. I 

think that the Commandant has changed the way we do our procVerDate 0ct 09 2002 15:12 Sep 21, 2007 Jkt 000000 PO 00000 Frm 00167 Fmt 6633 Sfmt 6633 P:\DOCS\34798 HTRANS1 PsN: JASON
130

esses. Having said that, our number one priority as far as any legislative language is just that the Coast Guard be allowed the opportunity to continue our recapitalization program. Anything else 

that the Congress desires us to do, if it is passed in the legislation, 

obviously we would do it, but we would hope that we would be allowed to continue to recapitalize the Coast Guard so we can execute our missions. And anything else, if the Congress would like to 

suggest it, we would be happy to execute it. 

Mr. OBERSTAR. We do not want to slow down that process at all. 

We do not want to stop it in its tracks. But the same with the 

Corps of Engineers who act only on direction of the Congress, and 

yet we have felt for some time that there was a need for independent review. The Corps of Engineers came to an agreement 

with us on that and we have language that tomorrow will be on 

the House floor that will provide for that independent review. We 

will explore this further as we move into the authorization process 

and draw on the great resources we have in the members on this 

Committee on both sides of the aisle. Thank you, Mr. Chairman. 

And thank you very much, Admiral. We are about to set a record 

for endurance in this Committee. In another 15 minutes we will 

have done that. I thank you for your endurance. 

Mr. CUMMINGS. Mr. Gilchrest. 

Mr. GILCHREST. Thank you, Mr. Chairman. Admiral, how did 

these cutters get to Curtis Bay? These eight cutters, how did they 

get up there? 

Admiral BLORE. I believe we towed the cutters. They may have 

gotten underway because they were capable of it to meet whatever 

cutter was towing them. It was our choice to tow them because we 

had put operational restrictions on them to keep the crew safe and 

not at risk and we felt it progressed to the point that we did not 

want the cutters functioning independently. 

Mr. GILCHREST. So I understand they are going to be scraped. 

Admiral BLORE. Yes, sir. 

Mr. GILCHREST. Where are they going to be scraped? 

Admiral BLORE. I do not think that has been determined yet, sir. 

Mr. GILCHREST. So they are in such a condition that none of 

them could be salvaged or fixed? 

Admiral BLORE. Again, I am speaking on what I have been told 

because I am not an engineer. Admiral Gable, our chief engineer, 

did do a fairly exhaustive study on the cutters. There was about 

six recommendations presented to the Commandant. I think right 

now there are three competing theories on what the root cause is. 

One is a naval architectural effect called channeling. Another is 

that the stern section, because of the way the lines are, was overly 

buoyant. The third is that the metal itself was so fatigued it did 

not have enough structural strength from the original 110s. It is 

Admiral Gable’s opinion that he has a very low confidence that 

any——

Mr. GILCHREST. At any rate, it is likely that the best thing to do 

rather than go through any more expense is to just scrap all eight? 

Admiral BLORE. Yes, sir. Because it is going to involve millions 

of dollars. A single cutter, probably 18 to 24 months to develop 

whether your solution actually works. And I think the Commandant would like to focus elsewhere, sir. 

131

Mr. GILCHREST. Just a couple of other questions. This would be 

to Admiral Sullivan. Do you feel that the Coast Guard adequately 

addressed the concerns that apparently the Navy shared with its 

engineers about the hull integrity of these 123s? 

Admiral SULLIVAN. I can tell you, we said to the Coast Guard we 

were worried about the plate thickness in the section modulus of 

the hull, and we offered to help beyond that. I would be remiss to 

try to explain——

Mr. GILCHREST. Was this consultation in the early stages of the 

consideration of the design of these vessels? 

Admiral SULLIVAN. I think the consideration stared with very 

casual conversations in 2002 and nothing came of those, and then 

there were more serious conversations in 2005 when we actually 

produced a cost estimate for what we would do. And then that was 

about it, sir. 

Mr. GILCHREST. So, Admiral Blore, do you think that the problems that we have seen here today about adequate communication, 

consultation, recommendation between you and the Navy regarding 

this kind of issue has been adequately resolved? 

Admiral BLORE. Yes, sir, especially as far as relationships between us and the Navy, and in this particular case, using CCD or 

the Carderock division for expert counsel. 

Mr. GILCHREST. This ranges from hull design to logistics to 

C4ISR, the whole ball of wax. Do you feel the integration here is 

pretty well complete on these issues? 

Admiral BLORE. Yes, sir. And I would say really at all levels between C&O and the Commandant, between me and my colleague 

and certainly PEO ships, and same thing on the logistics and the 

naval engineering side and C4ISR side. 

Mr. GILCHREST. Let me ask, the capabilities that the Navy has 

for in-house engineering, is that also part of your conversation that 

those capabilities, that in-house engineering capability, can any of 

that be available to the Coast Guard? 

Admiral SULLIVAN. Yes, sir. We stand ready to help. We are 

heavily loaded today. We have our own issues with cost reduction 

and staffing reduction at headquarters. But compared to the capability that the Coast Guard lacks, we are robust, and subject to 

workload, we would definitely be ready to work. 

Mr. GILCHREST. Is that something that you would solicit, Admiral Blore, from the Navy? 

Admiral BLORE. Yes, sir. You are expressing it, respectfully, as 

if there is some hesitation on our part. There is no hesitation for 

us to work with the United States Navy. 

Mr. GILCHREST. Have the Coast Guard and Navy discussed the 

possibility of enhancing the commonality of the Navy and Coast 

Guard vessel designs and component systems? 

Admiral BLORE. Yes, sir. I could just give you two quick examples. Certainly for much of the navy-type, navy-owned equipment 

on the National Security Cutter, we are using the recommendations of the Navy. Our preference is to stay standard with them if 

we can, because they bring——

Mr. GILCHREST. You say your preference is to stay standard. 

Would it not be better if it were standard, and can it be made 

standard? 

132

Admiral BLORE. Yes, sir. But, for example, they would put many 

more weapons systems on a patrol boat than we would. So there 

are some cases where we will not be standard because we just will 

not have as powerful a weapons suite as they would. In the case 

of the Offshore Patrol Cutter, which is still a couple of years away, 

we are currently working with NAVSEA to actually do a study together on how the LCS, and original design offshore cutter, or even 

our National Security Cutter might be used to kind of form the 

basis of a design. We are very interested in seeing how the Latorial 

combat ship develops and whether it would be possible to have potentially, for example, a Coast Guard version of that. So we are 

very interested in being aligned and have commonality when we 

can. 

Admiral SULLIVAN. Let me give a couple more examples, sir. The 

gun on the National Security Cutter is the same as the gun on the 

LCS, and that gun is also going to be used on a DDG-1000. We are 

sharing all of our information across the services to work to make 

sure we are as common as we possibly can be in the installation 

of that gun. Additionally, I mentioned Naval Vessel Rules before 

where we were developing them in conjunction with ABS. The 

Coast Guard signed on I guess about two years ago and there is 

a Coast Guard annex to the Naval Vessel Rules. 

So we are sharing all the lessons learned and all of the rule development. My chief engineer, Kevin McCoy, and Admiral Gable, 

his counterpart in the Coast Guard, have co-signed an agreement 

that they will work together, and Admiral Gable is now attending 

all the meetings of the Naval Vessel Rules Committee. So there is 

an awful lot going on there now. 

Mr. GILCHREST. Thank you very much, gentlemen. Thank you, 

Mr. Chairman. 

Mr. CUMMINGS. Thank you very much. Mr. Kagan. 

Mr. KAGAN. Thank you, Mr. Chairman. I will make no reference 

to icebreakers because by the time we get out of here all the polar 

ice caps are going to be melted. 

Admiral Blore, I just want to get your opinion on record here 

about Mr. Ronald Porter. Is Ron Porter a CTTA? 

Admiral BLORE. Again, as was mentioned before, I do not think 

I have actually met him or asked to see his credentials. I would go 

to the assistant commandant for command control and information 

to get certification on Tempest and I believe they used Mr. Porter. 

Mr. KAGAN. Okay. Then I will ask you a hypothetical question. 

Assuming that he is not CTTA, then would it be true that those 

ships that have been firing up their communications equipment 

have been doing so in violation of our rules and laws? 

Admiral BLORE. I would assume you need to have the proper certification and authority to grant the Authority to Operate, yes, sir. 

Mr. KAGAN. Okay. Thank you, gentlemen, for your service to the 

country. I yield back my time. 

Mr. CUMMINGS. Thank you very much. I want to thank you all 

for your testimony. I want to thank the Members of Congress for 

sticking around this long. I know they have fifty million things to 

do. 

This does conclude our hearing. But please understand that Mr. 

Oberstar and many of us have expressed our concerns with regard 

133

to where the Coast Guard is going. We want to make it very, very 

clear, and I said it from the very beginning when I was appointed 

the Subcommittee Chairman, I am going to be a number one fan 

of the Coast Guard. But in being a number one fan, that also 

means that we want the Coast Guard to be the very, very, very 

best it can be so that it can do all the things that it is mandated 

to do and do them effectively and efficiently. 

So this has in no way been an effort to try to make anybody look 

bad. We just need to look to see what has happened in the past, 

as Mr. Oberstar said, so that we can chart a most effective and efficient course for the future. I think this hearing has gone a long 

way towards doing that. We certainly will look very carefully at 

what has transpired here and act accordingly. I am sure that there 

will be some follow up questions. We thank you all very much. 

This hearing is adjourned. 

[Whereupon, at 11:30 p.m., the committee was adjourned.]

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