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DEEPWATER IMPLEMENTATION

(109–14)

HEARING

BEFORE THE

SUBCOMMITTEE ON

COAST GUARD AND MARITIME TRANSPORTATION

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

APRIL 20, 2005

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

CHARLES W. DENT, Pennsylvania

TED POE, Texas

DAVID G. REICHERT, Washington

CONNIE MACK, Florida

JOHN R. ‘RANDY’ KUHL, JR., New York

LUIS G. FORTUN ̃ O, Puerto Rico

LYNN A. WESTMORELAND, Georgia

CHARLES W. BOUSTANY, JR., Louisiana

VACANCY

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

ROBERT MENENDEZ, New Jersey

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JOHN T. SALAZAR, Colorado

(II)
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

FRANK A. LOBIONDO, New Jersey, Chairman

HOWARD COBLE, North Carolina

WAYNE T. GILCHREST, Maryland

PETER HOEKSTRA, Michigan

ROB SIMMONS, Connecticut

MARIO DIAZ-BALART, Florida

DAVID G. REICHERT, Washington,ViceChair

CONNIE MACK, Florida

LUIS G. FORTUN ̃ O, Puerto Rico

CHARLES W. BOUSTANY, JR., Louisiana

DON YOUNG, Alaska

(Ex Officio)

BOB FILNER, California, Ranking Democrat

CORRINE BROWN, Florida

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

MICHAEL M. HONDA, California

ANTHONY D. WEINER, New York

BRIAN HIGGINS, New York

BRIAN BAIRD, Washington

JAMES L. OBERSTAR, Minnesota

(Ex Officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Collins, Admiral Thomas A., Commandant, United States Coast Guard, accompanied by Rear Admiral Patrick M. Stillman, Program Executive Officer, Coast Guard Integrated Deepwater System, United States Coast

Guard .................................................................................................................... 3

Wrightson, Margaret, Director of Homeland Security and Justice Issues, Government Accountability Office ............................................................................. 3

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Collins, Admiral Thomas A., Commandant ........................................................... 25

Wrightson, Margaret ............................................................................................... 39

(1)

DEEPWATER IMPLEMENTATION

Wednesday, April 20, 2005

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPOR- TATION AND INFRASTRUCTURE, SUBCOMMITTEE ON

COAST GUARD AND MARITIME TRANSPORTATION, WASH- INGTON, D.C.

The Committee met, pursuant to call, at 2:00 p.m., in room 2167,

Rayburn House Office Building, Hon. Frank LoBiondo [chairman of

the committee], presiding.

Mr. LOBIONDO. The Subcommittee will come to order.

The Subcommittee is meeting this afternoon to review the Coast

Guard’s Deepwater program and the Service’s recent proposal to

revise the Deepwater Implementation schedule. The Coast Guard’s

integrated Deepwater system is designed to replace or modernize

more than 90 ships and 200 aircraft currently utilized by the Coast

Guard to carry out missions more than 50 miles from shore. The

new assets procured under this program will greatly expand the

Coast Guard’s capabilities to perform the Service’s many traditional and homeland security missions.

The original Deepwater Implementation plan and asset mixture

were devised well in advance of the events of September 11th.

Since that time, the Coast Guard has taken on greater homeland

security responsibilities in addition to its ongoing traditional missions. Therefore, the recent revision of the Deepwater plan was

greatly needed.

While I appreciate the Coast Guard’s long and hard labor to get

this revised plan approved by the Department of Homeland Security and the Office of Management and Budget, I do have some concerns about the long-term adequacy of the plan. First, it will not

surprise anyone who has heard my comments about the program

over the last three years that I am very disappointed that the plan

does not accelerate the acquisition of new assets.

And while I certainly recognize the constraints on our budget, I

want everyone to understand that for every year we delay the purchase of new assets, our Coastguardsmen and our taxpayers lose

in two ways. First, the cost of maintaining existing assets is dramatically increasing. This eats up the already scarce resources

available to purchase replacement assets and only increases the

total cost of the program. Second, new, more capable assets are not

available to improve the performance of the Service’s operation, undermining their ability to keep our ports and waterways safe and

secure.

My second major concern is that the revised plan is not as specific as Congress had requested. The plan does not provide for a
2

time line beyond 2010 to fully explain when the legacy asset will

be replaced, nor does it provide a spending plan beyond fiscal year

2006. Finally, the plan does not specifically spell out the benefits

of making changes to certain assets. I expect the Service to provide

Congress with a revised report addressing these concerns as soon

as possible.

I look forward to hearing the testimony of our witnesses today.

Now I’d like to turn it over to Mr. Filner.

Mr. FILNER. Thank you, Mr. Chairman. We welcome our Admirals here today.

It seems to me, Mr. Chairman and Admiral, and I hope you can

prove us wrong today, that Deepwater is in deep trouble. The new

post-9/11 requirements analysis provided to Congress by the Coast

Guard seems to me to be so devoid of reality that it is beyond belief. For example, how in a post-9/11 environment can the Coast

Guard need fewer national security cutters? How in a post-9/11 environment can the Coast Guard need fewer fast response cutters?

How in a post-9/11 environment can we suddenly decide to overhaul old C-130 planes, old HH65 Dolphin helicopters and old HH60

Jayhawk helicopters rather than replacing them with new ones?

Deepwater is changing from a program to modernize the Coast

Guard with new equipment to a program that seems on our analysis that buys too few new ships and keeps old aircraft.

Now, the concept behind the Deepwater concept was, to mix a

metaphor, groundbreaking. Maybe we should say icebreaking. It

started with examining all Coast Guard mission requirements.

Then the Coast Guard would buy the mix of assets to best accomplish these missions. And the entire fleet mix of aircraft and cutters were going to be on the table.

Today it seems we are presented with a program that will leave

the Coast Guard with fewer cutters than before and a fleet of aircraft that will be over 40 years old when the Deepwater acquisition

program is completed. Instead of being an icebreaking procurement, Deepwater is becoming just another vessel replacement program.

So Mr. Chairman, I think Deepwater is in deep water or doo-doo,

whatever we would like to use. And the Administration isn’t giving

the Coast Guard the support that they need. It does not seem to

be committed to giving the men and women of the Coast Guard

who risk their lives every day to save others the best equipment

that can be bought. Instead, they are forcing the Coast Guard to

fulfill all of their future missions based on the budget restraints of

today.

At the hearings that this Subcommittee held on the Coast Guard

budget, I stated something to the effect that something smelled a

little fishy about the Coast Guard’s decision to rebuild the 20 year

old HH65 Dolphin helicopters instead of replacing this older aircraft. Mr. Chairman, I hope that today’s hearing will shed more

light on the basis for making that decision and others like it, that

the Coast Guard will be able to compare the cost and performance

of an old versus a new helicopter.

Mr. Chairman, like you, I remain committed to the Deepwater

program. However, given the direction of this program in a post9/11 environment, I do not think that the Coast Guard of the fu-
3

ture will live up to its motto: Semper Paratas—always ready. I

hope, Mr. Commandant, that I’m wrong. But we look forward to

your testimony.

Mr. LOBIONDO. Thank you.

Congressman Higgins, would you like to open with anything?

Mr. HIGGINS. No, thank you, Mr. Chairman.

Mr. LOBIONDO. Okay, thank you. Congressman Fortuno, would

you like to open with anything?

Mr. FORTUNO. No, thank you, Mr. Chairman.

Mr. LOBIONDO. Okay, thank you.

We are going to introduce our panel today. We have Admiral

Tom Collins, Commandant of the United States Coast Guard, who

is accompanied by Admiral Stillman, who will help support with

technical answers, he is the Program Executive Officer of the Coast

Guard Integrated Deepwater System; and Ms. Margaret

Wrightson, Director of Homeland Security and Justice Issues for

the GAO.

Admiral Collins, the floor is yours.

TESTIMONY OF ADMIRAL THOMAS A. COLLINS, COMMANDANT,

UNITED STATES COAST GUARD, ACCOMPANIED BY: REAR

ADMIRAL PATRICK M. STILLMAN, PROGRAM EXECUTIVE OFFICER, COAST GUARD INTEGRATED DEEPWATER SYSTEM,

UNITED STATES COAST GUARD; MARGARET WRIGHTSON, DIRECTOR OF HOMELAND SECURITY AND JUSTICE ISSUES,

GOVERNMENT ACCOUNTABILITY OFFICE

Admiral COLLINS. Thank you, Mr. Chairman and distinguished

members of the Subcommittee. It is a pleasure to be with you,

along with my PEO, Program Executive Officer, Rear Admiral Pat

Stillman, and also with Ms. Wrightson from GAO that has been a

great partner with us in continuing to take a critical yet positive

view of our Deepwater program and providing us wise counsel on

adjustments as we go forward.

We clearly welcome the opportunity to discuss the Coast Guard’s

Deepwater project and what we think is the very positive impact

it will have on our missions and more importantly, our ability to

assure a safe and secure maritime environment in the United

States. The Deepwater, of course, is the centerpiece of the Coast

Guard’s overall transformation in the post-9/11 environment. It

might top capital priority. It does play a fundamental and critical

role in building a more ready and capable 21st century Coast

Guard.

The Deepwater government-industry partnership, from our perspective, has achieved many program milestones, important program milestones during 2004, and has strengthened Deepwater’s

foundation by incorporating many of the program and contract

management improvements that GAO has recommended to us.

Most importantly, this year’s approval of a revised post-9/11 Deepwater mission needs statement and associated implementation plan

are the most significant programmatic developments since we

awarded Deepwater contract in 2002. With the strong support of

the Department of Homeland Security, the Administration and

Congress, we will now position the Deepwater program to play an
4

even greater role in reducing the future risk of a terrorist event

and other security events in the homeland.

The implementation plan establishes requirements for improved

capabilities necessary to perform the Coast Guard’s full range of

post-9/11 missions while concurrently sustaining, modernizing or

converting select legacy assets to operate effectively until replaced.

The new plan moves the design of the fast response cutter and offshore patrol cutter by 10 years and 5 years to 2007 and 2010. It

also leverages our existing asset base of C-130s, HH60s and HH65s

through conversion what we feel is a cost-effective, high performance aviation Deepwater solution.

The plan also incorporates aerial use of force, strategic lifts and

enhanced force protection and other critical homeland security capabilities. I look forward to discussing these and other requirements adjustments this afternoon. The Coast Guard 2006 budget, of course, includes $966 million

for Deepwater, a 33 percent increase over last year’s appropriation.

We think it is a wise investment, a wise investment in our ability

to deliver the services we do. The national security cutter and the

offshore patrol cutter are the centerpieces of the Integrated Deepwater system. And the third national security cutter is funded in

the 2006 budget. Last month, together with Secretary and Mrs.

Chertoff, I had the great pleasure of participating in a keel-laying

ceremony for our first national security cutter in Pascagoula, a significant milestone in Deepwater’s transformation of the Coast

Guard.

As I have indicated, with the 2006 budget, we have moved forward the design work, engineering and long lead time materials to

the offshore patrol cutter.

Funding is also included in the 2006 budget for legacy asset

sustainment projects, such as the HH65 re-engineing and medium

endurance cutter mission effectiveness projects. These initiatives

are absolutely critical to sustain capabilities today while acquisition of new and enhanced Deepwater assets is vital to ensuring the

Coast Guard has the right capabilities tomorrow.

Re-engineing the 65 helicopter fleet continues to be my highest

aviation concern. We are moving out at best speed at our aviation

repair and supply center to restore operational safety and reliability to these critical assets. We are looking at ways to speed things

up, including accelerating engine delivery, standing up a second reengineing facility and purchasing additional aircraft. I am confident we will complete the re-engineing in the first half of 2007.

Mr. Chairman, your air station up in Atlantic City, as you know,

has already been delivered the first of these improved aircraft.

Our fiscal year 2006 Deepwater budget and our revised implementation plan have been carefully, carefully thought out, with

third party consultation, private sector industry consultation and

review. It is the right way forward with our modernization efforts.

With the continued support of the Administration, this Committee

and Congress, I know that we will succeed in putting the right

tools in the very capable hands of Coast Guard men and women

and will succeed in delivering the robust maritime safety and security capability that America expects and deserves from the Coast

Guard.
5

Mr. Chairman, again, thanks for the opportunity to testify on

this very, very important issue. I will be happy to answer your

questions at the appropriate time.

Mr. LOBIONDO. Thank you, Admiral Collins.

Ms. Wrightson.

Ms. WRIGHTSON. Thank you very much.

Good afternoon, Mr. Chairman and members. I am pleased to be

here today to discuss Deepwater program implementation, focusing

on the results of our work for this Subcommittee on the condition

of the Coast Guard’s legacy Deepwater assets, actions the Coast

Guard has taken to maintain them, and on the management challenges the Coast Guard faces in acquiring replacements.

The bottom line of our work to date is this: the costly and important Deepwater program will continue to carry substantial risk to

the Government and therefore needs constant monitoring and management attention to successfully accomplish its goals of maximizing effectiveness, minimizing total operation costs and satisfying

the assets’ users. The revised implementation plan is the most recent evidence of the complexity and challenges the Coast Guard

faces to effectively manage this program and adapt to its changing

mission needs in a post-9/11 environment.

With respect to these risks, our work makes three main points.

First, the need to replace or upgrade deteriorating legacy assets is

considerable. While the Coast Guard lacks measures that clearly

demonstrate how this deterioration affects its ability to perform

Deepwater related missions, it is clear that the Deepwater legacy

assets are insufficient in a post-9/11 environment.

Second, although the need to replace and upgrade assets is

strong, there are still major risks in the Coast Guard’s acquisition

approach that will only be increased under a more aggressive acquisition schedule. The cost increases and schedule slippages that

have already occurred are warning signs. We will continue to work

with the Coast Guard to determine how best to manage these risks,

so the Deepwater missions can be accomplished in the most costeffective way.

In that regard, I would like to say that I would like to compliment the Coast Guard on their very nimble approach to responding to GAO’s findings and recommendations, even while we are

conducting our work. They are to be complimented on that.

Third, there are signs that as the Deepwater program moves

ahead, the Coast Guard will continue to report more problems with

sustaining existing assets, together with the attendant need for additional infusions of funding to deal with them. Some of these problems, such as those for the 378 foot cutters, are included in a compendium the Coast Guard now uses to set sustainment priorities

and plan budgets. But they have not been funded because they pertain to assets that were the first to be replaced.

However, projects to address these problems nevertheless are

likely to be needed. We will continue to work with the Coast Guard

to determine if there is a more systematic and comprehensive approach to managing these assets and keeping the Congress abreast

of the potential bill for sustaining them.

Turning to some of the most important details, our analysis of

the most recent five years shows that the condition of Deepwater
6

legacy assets generally declined during the period, but the Coast

Guard’s available condition measures do not demonstrate the rate

of decline to be as rapid or clear-cut as asserted. In particular, during fiscal year 2000 to 2004, the Coast Guard’s various condition

measures for aircraft and cutters did generally trend downward,

but there were year to year fluctuations and not all assets showed

similar trends.

However, we believe these trends should be viewed with caution.

While there is no systematic, quantitative evidence sufficient to

demonstrate that Deepwater legacy assets are headed for a train

wreck, this does not mean that the assets are in good condition or

have been performing their missions safely, reliably and at levels

that meet or exceed Coast Guard standards. Evidence from our site

visits showed aging and obsolete systems and equipment as a

major cause of the reduction in mission capabilities for a number

of Deepwater legacy aircraft and cutters. It is clear that these problems will need to be addressed if the assets are to remain able to

perform their missions at or near current levels until replacement

assets or upgrades can become operational.

Turning to Coast Guard efforts to address the problems of their

legacy assets, beginning in 2002, the Coast Guard has annually

issued a compendium consolidating information needed to make

planning and budget decisions regarding maintenance and upgrades. Also, and very significantly, Coast Guard crews have been

spending increasingly more time between missions to prepare for

the next deployment. Such efforts are likely to help prevent a more

rapid decline in the condition of these assets but it is important to

note that even with increasing amounts of maintenance, these assets are still losing mission capabilities due to equipment and system failures.

In reality, our work suggests that simply working harder may

not be enough. In this regard, the Coast Guard’s Pacific Area Command has been experimenting with a different approach to maintaining and sustaining its 370 foot cutters that may be needed in

light of slippages in dates for their replacements. As a first step,

command officials have launched an initiative applying new business principles to the problem including ensuring that operations

and maintenance staffs work more closely together to determine

priorities and accepting the proposition that with constrained funding, not all cutters may be fully capable to perform all missions.

The Pacific Area Command approach has potential, but even

there, the commander has told us that in order for the Deepwater

legacy assets to be properly maintained until their replacements

become operational, the Coast Guard will still have to provide more

focused funding for legacy asset sustainment that in recent years.

With respect to the challenges the Coast Guard faces to replace

these assets, from the outset, we have expressed concern about the

risks. Last year, we reported that well into the second year, keep

components needed to manage the program and oversee the contractor have not been effectively implemented. The Coast Guard

also had not updated its integrated master schedule and costs were

rising above original estimates.

More recently, we have seen some slippages for the national security cutter and emergency acceleration such as the HH65. Unob-
7

ligated balances are growing. We have also seen at least one instance of serious performance problems, these being the hull

breaches in the first converted 123 patrol boats.

We have made numerous recommendations to improve the program’s management and oversight, and the Coast Guard has

agreed with all of them. In most cases, however, while actions are

underway to address our concerns, management issues remain that

may take some time to fully address. Additionally, there is uncertainty due to the recently revised mission needs statement, or

MNS, and implementation plan, which at the end of the day will

certainly increase costs and require further schedule adjustment.

We have recently been requested to review this plan to determine whether it is sound and adequate to meet the Coast Guard’s

changing mission needs and what further challenges it might pose

for the program’s management and oversight. We expect to begin

this work in the coming months.

In sum, the need to replace or upgrade deteriorating assets is

considerable. However, given all the attendant risks, management

problems and other uncertainties, a more aggressive schedule does

not necessarily translate directly into a more efficient and effective

replacement strategy.

Finally, and no matter what schedule is adopted, the Coast

Guard will continue to face a daunting challenge to effectively sustain its legacy assets in the meanwhile. We look forward to continuing our work for your Subcommittee to identify program and

management improvements and risk mitigation strategies through

our productive oversight and engagement with the Coast Guard.

Thank you very much.

Mr. LOBIONDO. Thank you.

Mr. Filner, would you like to start off?

Mr. FILNER. Admiral Collins, you started off with thanking GAO

for their partnership. I’m not sure they are partners, they are oversight. But if you just look at the headings for their report, I mean,

this is devastating. I do not know how else to say it. I wonder if

you might comment on it, along with my opening statement about

how in a post-9/11 world we were decreasing the assets instead of

increasing them, which is what GAO said. But they went a lot further than that.

I would not be too proud of this report card on what has been

accomplished. Do you want to comment on that?

Admiral COLLINS. Sure. I think we do have a partnership with

GAO. We welcome their comments, their participation and their

oversight. I think we have benefitted from it.

Deepwater is a big program. It does have risks associated with

it. I would submit a different acquisition approach, a one by one,

piece by piece one would even have greater risks to us and would

ensure a non-system approach to our world of work. So I think it

is just the type of approach, acquisition approach, it is innovative,

it is creative and I think in the end it is going to produce the product that we need.

The issue about the numbers of assets, we are not building a

one-for-one replacement. Deepwater was never about whether it

was the pre-9/11 requirement or the new implementation plan. We

are building a system. And the system yields for certain perform-
8

ance outcome. And that outcome is going to compare to the 1998

baseline and now 2001 baseline in terms of performance.

If you look at some of the asset types relative to the contract

awarded in June of 2002, there are some that are in the new implementation plan, some that are higher, some that are lower. Some

are given in a range. The fact of the matter is that we will continue

to look at the performance of the system and make adjustments

along the course of this 20 year plus program as is deemed necessary.

Each individual, the system is much, much more capable than

the assets in the old system. So the issue is the capability of each

system than the numbers of each system. Take a look at any one

of the Deepwater asset when they’re through, and they will be incredibly more capable one-for-one, and as a system much more capable.

So I think you have got to look at the output of the system and

what the system delivers. In addition, the old cutter, say a medium

endurance cutter or high endurance cutter with the crew we have

is getting 185 program days a year. Under the Deepwater construct, in terms of the technologies we are embedding into these

platforms and the crewing concept, alternative crewing concepts

that we are driving into these systems, we hope to get 230, 235,

240 days out of each platform. So you are going to get more out

of the platform, you are going to get more out of each platform, and

a much more capable platform.

The surveillance performance of the new system alone is dramatically, I mean dramatically improved over independent ship ops

that we have today. So we are concentrating on performance. We

are concentrating on a systems approach and we are concentrating

on leveraging each asset in terms of operating time to get the most

we can out of the system. We will continue to evaluate it over time.

Mr. FILNER. You haven’t convinced me. We say again and again

up here, and you say it, after 9/11, and with the reorganization of

the Department of Homeland Security, the Coast Guard was expected to perform its traditional duties and a whole set of new

ones. And I just, by your own figures, I do not see that happening.

You are comparing something that I was not talking about. I said

before 9/11, your own ICGS study said you needed this many, this

many, this many to do what you say you’re going to do. And yet

the post-9/11 numbers are below that for those for the Deepwater

assets.

So I do not see how your argument stands up. It looks to me, Admiral, and correct me if I’m wrong, that you’re responding to a

budget as opposed to responding to the need. And the budget is not

sufficient, and I guess you do not want to say that, but it looks to

me that your budget is insufficient and you’re not getting the support you need by you own analysis to get up there, to get up to

those capabilities that we all want. It just looks like you’re being

run by the OMB rather than OMB being told what the Department

of Homeland Security needs are.

Admiral COLLINS. We’re managing three variables: cost, schedule

and performance, and trying to keep those in balance, understand

the budget realities of the day and ensure we get the performance

out of the system we do. I think you have to go through each asset
9

category in Deepwater and compare what we had. Some are higher.

And that is all as a result of the performance gap analysis we did

and the new capabilities that we need to embed in our system.

I think the most important thing coming out of the new implementation plan, the most important thing, is building the right capabilities into each of the system elements. We have consensus in

the Administration, across the Administration, on those capabilities

that need to be added or embedded into the Deepwater systems.

We have a new missions needs statement that reflects that. And

we have a budget submitted up here in 2006 and you will see in

the out years that are very consistent with that.

That is a huge accomplishment, to understand what the capability adjustments are based on 9/11, get them vetted, get them approved and have them now into the contract. I am very, very

pleased that we are able to do that. It positions us for adjustments,

if we need to, along the way. It is capability first, capacity second

and line

Mr. FILNER. The second time around I am going to do more talking than you. But you said some are higher. Which ones are higher? I have your list here. The ones that are higher are the ones

that you kept the old ones in and you’re not building new ones, you

used the old ones.

Admiral COLLINS. The contract baseline that was awarded in

2002 was 93 short range helicopters and the 24 billion end of the

range is 95.

Mr. FILNER. Aren’t those the old helicopters?

Admiral COLLINS. The HH

Mr. FILNER. You just gave a very long thing, and you are pointing to two helicopters, even if we accept your own data here. That

is what you pointed to, two.

I will get my next turn in.

Mr. LOBIONDO. Admiral Collins, I understand what you are saying, and I certainly agree that what is important are the capabilities in the systems and how we put these together. But I am troubled and having trouble connecting the dots with what will be

available for the Coast Guard to perform its mission before the new

assets come online.

Ms. Wrightson, you talked about this a little bit. But what performance measures would be most useful to track the deterioration

and availability of legacy assets? You say that while the data may

be okay, it may not be okay and there is a warning flag here. And

this is pretty serious, because if in fact the tracking data is not accurate and we have catastrophic failures that we cannot deal with,

where does that leave us before the new assets come online?

Can you offer any suggestions?

Ms. WRIGHTSON. Let me see if I can answer it. Right now the

condition measures the Coast Guard has are not adequate to track

the relationship between problems in the condition of the assets

and what impact that may have on performance in terms of degradation.

Mr. LOBIONDO. Does not have in place?

Ms. WRIGHTSON. Does not have in place. That was in fact one of

the surprising things we found when we did our work.
10

Working closely with the Coast Guard for many months, we

looked at every possible summary measure and indicator of conditions in order to be able to establish a trend over time in the condition of those assets. While we saw the trend as declining, the measures, when you brought them together, had mixed results.

As a result of that, we have engaged the Coast Guard in a dialogue about developing measures that are more robust and have

greater granularity to them and are readiness oriented. In doing

that, the Coast Guard may better be able to track this information

back to the most critical conditions and allocate its resources in a

manner that will have a more cost-effective use of those assets over

time until they can be replaced.

So that is really the sum total of what we saw. The Coast Guard

is moving out on the problem, and with your staff’s permission, we

have extended our work to look more deeply into what recommendations we might be able to make for particular measures

or types of measures that will help the Coast Guard. Lacking better measures, the Coast Guard cannot now, for example, tell you

when a cutter is limping back, what that means versus when a cutter is coming back under full sail and what the consequences of

this situation are were for mission performance.

I want to take a minute if I can give you one example. The Coast

Guard has a measure for the HH65, which showed that over the

five years our analysis covered, the asset was performing at or

above the most common summary measure of condition the Coast

Guard uses, which is availability. Yet at the same time, the HH65 is the Coast Guard’s highest priority for spending to rectify safety and reliability problems. So we have an issue with degradation

of mission. The HH-65 is operating under restrictions at the same

time where the condition measures are showing that it is meeting

standards.

The C-130 is the same. If AC-130 goes out on a mission, but its

APS-137 radar is in trouble, then I will just quote the Kodiak,

Alaska air crew who told me that ′′the situation is essentially like

going up in an aircraft and looking through a straw to try to find

a boat.′′ What point is it to deploy that asset if it cannot perform

its mission? So we are looking for a greater linkage between condition measures and mission performance that would help the Coast

Guard make better decisions about how to use its scarce maintenance dollars to maximize performance.

Mr. LOBIONDO. So you are saying that you are engaged in developing the measurements that could give us that information. Can

you give us

Ms. WRIGHTSON. It is an important question. GAO does not, as

a matter of policy, tell agencies the measures they should have, in

part because after the fact we go back and audit those, and if they

are ours, we are poorly positioned to offer additional advice. But

what we do do is we make recommendations on the types of measures you need, and we can look at the Coast Guard’s and determine

what the pros and cons are of various measures and what it would

take to get to where we think the Coast Guard needs to be. We can

work with them on that, but we will not substitute our judgment

for the Coast Guard’s on which measures.
11

Mr. LOBIONDO. Okay, so you are identifying a deficiency, you are

strongly suggesting that we need to be developing these

Ms. WRIGHTSON. Better readiness

Mr. LOBIONDO. Better readiness standards, capabilities, measurements. You are working with the Coast Guard to determine if

what they are going to put in place to meet these requirements will

in fact do what we think they will do. You will analyze what they

recommend.

Ms. WRIGHTSON. I wish I had said it that well. That is exactly

right.

Mr. LOBIONDO. Can you suggest where we are in the time frame

of this?

Ms. WRIGHTSON. Well, the Coast Guard, as I said, is pretty nimble. It seems like when GAO goes out and finds a problem, before

I can get the report written, the Coast Guard is actively engaging

with us in a way to fix it.

I think we are months away from coming to grips with how we

feel about their measures for cutters. And that’s where they are the

farthest along. I am not sure, the Coast Guard right now thinks

that it needs—I do not want to put words in their mouth—but is

not quite so sure about what kind of measures, if any, it would

need for its aircraft, because aircraft do not go up if they are not

ready.

But I think we are talking months, not years. It is not like their

effort to measure homeland security performance. It is not that

hard.

Mr. LOBIONDO. Okay. Admiral Collins, do you agree with what

Ms. Wrightson just said?

Admiral COLLINS. Absolutely. We would like to keep refining our

readiness metrics and have those that allow us to make the best

decisions possible. So we take that advice seriously and certainly

we would like to develop even more comprehensive measures.

I should note that there are a series of surrogate or indirect

measures that certainly say there is a bunch of smoke. Days with

the cutters that are without a casualty, for example, or the amount

of money that is needed to be spent on basic systems above and beyond the standard allowance on a given vessel. I think if you look

to do a trend assessment of what we are spending above our maintenance base to address casualties on their subsystems, almost

every class, it is above 50 percent, over the last three or four years,

it is about 50 percent growth in the amount of money.

So from a dollar perspective, we are spending more. If you plotted that curve versus the curve days free from casualties, the number of days free from casualties is going down. You want that number to go up. And that number is going down. So we are spending

more, getting less in terms of readiness, with that macro type of

an assessment.

Clearly, if we could get more refined tools that truly linked the

performance dimension, certainly we are very, very interested in

doing that, Mr. Chairman.

Mr. LOBIONDO. So it would not be unreasonable for the Committee to expect an answer to the question of what these new measurement capabilities/tools will be in a couple of months?
12

Admiral COLLINS. Sir, I will be glad to provide for the record

what our game plan is and what our time line is for you, sir.

Mr. LOBIONDO. Okay. I have quite a bit more. But I want to go

to Mr. Reichert.

Mr. REICHERT. Thank you, Mr. Chairman.

Just a couple of comments. I noticed, Admiral, in your written

statement that you refer to your primary focus on September 10th,

2001 was safe, efficient use of America’s waterways. After September 11th, that changed dramatically.

For law enforcement, Columbine was a defining date. We had to

change the way that we approached and solved problems like Columbine presented. We were required to come up with new strategies, new equipment, new training, a lot of pressure by the public

to do that. So I understand the pressure that you are under and

that your team is under to undertake the new assignments that

you have been given.

I know how tough this is, when you have to balance the use of

old equipment and at the same time acquire new equipment. The

question, though, is with your new mission and all the other missions that you have had in the past, you still carry on forward to

today, are you still able to carry out all of your missions with the

deterioration of some of your equipment that you use now and not

acquiring the new equipment that you have, bottom line, on the

street, are you able to get the job done?

Admiral COLLINS. I think so. If you look, and there are a whole

bunch of measures on this, and we have debated these back and

forth, what are the right measures to measure performance, whether it is activities, in terms of boat hours, ship hours and things like

that.

I tend to go to the outcome as my ultimate measure. If that is

the measure, then you look back on last year, we did not step away

from our search and rescue standard one bit. We saved over 5,550

lives last year. And on the counter-drug mission, it wasn’t a record

breaking year, it was a record shattering year. We broke the old

record by 100,000 pounds. We had 240,000 pounds of cocaine that

we interdicted in the maritime. And we had the highest number of

migrants interdicted, close to 11,000 in the maritime, in 10 years.

We very successfully prevented a mass migration from Haiti last

spring, on and on. If you look at all our performance metrics, I

think in the totality of things, I think we are leveraging our assets,

we are paying attention to all our missions. We see safety and security, by the way, as a flip side of the same coin, you do well in

safety, you do well in security and vice versa.

So we are paying a lot of attention to all our missions. The thing

with this Deepwater program is, Deepwater provides us the capability across our mission set. It gives us, most attractive to me,

much, much more enhanced surveillance capability than we have

ever had, which is critical for whether it’s homeland security,

whether it is fisheries enforcement. So a long-winded answer to

your question, we are paying attention to all, and I think the performance metrics from my perspective are pretty solid.

Mr. REICHERT. I just wanted to give you an opportunity to explain to all the participants here today all the duties that you perform. You have been a great partner with law enforcement, local
13

law enforcement in the northwest region, King County Sheriff’s Office, Seattle Police Department and others. I know right now, one

of the things that is really important is the Coast Guard partnering

with local agencies. I know that currently there is an agreement

that is being examined for cooperation and partnership between

the sheriff’s office in Seattle with the air support unit and other

Coast Guard equipment.

Admiral COLLINS. It is something we, as a relatively small armed

service, the smallest, partnering is in our genes. I think we have

pursued it aggressively in the post-9/11 environment. I think we

have a great example of that in many places. San Diego is a great

place to show that kind of partnering as well, where we developed

a joint harbor operations center, where State, local and Federal all

are co-located on a 7 by 24 basis, sharing information, having a

common operational picture to act on. Independent operational

chains of commands kept intact, but a very collaborative, very effective 7 by 24 operation. We are going to replicate that kind of

thing around the country.

Mr. REICHERT. I think you can see that this Committee would

really like to help you, and I thank you for your service.

Admiral COLLINS. Thank you, sir.

Mr. REICHERT. Mr. Chairman, I yield the rest of my time.

Mr. LOBIONDO. Admiral Coble.

Mr. COBLE. He says that with tongue in cheek, Admiral.

Admiral COLLINS. Not at all.

[Laughter.]

Mr. COBLE. I apologize for my belated arrival. I was here earlier,

but I have two other meetings simultaneously being conducted. It

is good to have you all here today, folks.

Admiral, I noticed that the Deepwater plan provides a range, the

low end would result in fewer vessels, the high end I think about

the same, no increase. I guess my question is, how do you all propose to do more with fewer vessels?

Admiral COLLINS. There is a range. Again, some, some the low

is lower than the baseline, the high is higher. In addition to the

HH65 helicopter, by the way, if you count the number of fixedwing, the fixed-wing in the new implementation plan to the $24 billion level are considerably higher

Mr. COBLE. When I said fewer vessels, fewer assets.

Admiral COLLINS. The helicopters are more, if you count the helicopters, you count unmet, and you count the fixed-wing it is much

greater. And that is a reflection of our performance gap analysis

where we said that surveillance capabilities are tremendously important post-9/11.

But the short answer, sir, to this is that we are building platforms with much greater capability than the older ones. And we

are building a system that works together as a network to be much

more effective than the surveillance capability, the range and the

impact, finding targets of interest, interdicting them and so forth.

The other thing we are trying to do is get more ship days out

of each platform. Right now the standard program op temp for medium endurance cutter and high endurance cutter is 185 days a

year. We are going to try to drive that, with the new platforms, to

230, 240 days a year, and based upon better technology, a rotating
14

crew. So we keep the personal tempo the same, but the operational

tempo of the platform higher. So we are trying to leverage the investment we make, get more out of each platform and leverage the

impact of the system with incredible surveillance capabilities that

will enable us to, in the Department of Defense vernacular, put

metal on target in terms of finding the targets to board, intercepting them and doing effective things to them.

So that is kind of it in a nutshell. We are going to continue to

evaluate the performance. The important thing is to get the baseline capability right. You have to get that from day one. We have

now, with this implementation plan, the baseline capability right.

We can continue to discuss capacity every year, if need be, and continue to monitor the overall performance of the system. If we need

to make adjustments because we projected wrong, we can make adjustments either way up or down.

So I think the key here in fiscal year 2006 is to get the capabilities right. I am very pleased that we are able to do that and really

appreciate the support of all elements of the Administration in

helping us get to this point.

Mr. COBLE. Thank you, Admiral. Admiral, the Chairman usually

addresses me as Master Chief. Admiral today, I guess I fall somewhere in between the two.

I yield back, thank you, Mr. Chairman.

Mr. LOBIONDO. Mr. Boustany.

Mr. BOUSTANY. I too want to commend you on the work you have

done, particularly down in the Gulf of Mexico, which is my area,

the State of Louisiana. I appreciate the hard work and the great

work you have done.

My question, a couple of questions dealing with the deterioration

of the assets. Do you think that acceleration to a 15 year schedule

would actually enhance your capabilities and allow you the proper

operational capabilities that you are looking for?

Admiral COLLINS. Clearly, the greater distance between the old

asset and the new asset means you have to do something to the

old asset. And what we have is sort of a balanced approach here,

that we are trying to manage those legacy systems, recognizing

that we have to deliver our operational performance today. So you

have to use the assets you have, then you have to try to have an

effective program to replace them in a logical way. That is the constant tension that we are dealing with.

There are about 250 or some odd million dollars, if I remember

the number right, that are assigned to legacy systems in the 2006

budget. People say, wow, that is investing in the old and not investing in the new fast enough. But I would submit, if you look in

greater detail at that 250 some odd million dollars, that the vast

percentage of that money is investing in a Deepwater system, because it is taking an existing legacy system and transforming it,

converting it. So of that $250 million or so, $133 million is for reengineing the HH65, which will be ultimately part of a Deepwater

system. It will be converted from a legacy system into a Deepwater

system.

And by the way, that was the game plan from day one. That was

the game plan when the contract was awarded. So it’s the conversion of the legacy asset and buying totally new that will give us
15

the performance we need. It is a dynamic process that we are dealing with. I would like to think that we have got it right with this

new implementation plan, getting that right balance.

Mr. BOUSTANY. Thank you for your answer.

Ms. Wrightson, do you think acceleration to 15 years, what kind

of decrease in total costs to the program would you anticipate?

Ms. WRIGHTSON. That is a really good question. We spent months

with the Coast Guard staff and analyzed trying to get the data that

we needed to answer that question. At the end of the day, the

Coast Guard was not able to provide us the type of data that we

would need to be definitive about it. But that does not mean I cannot answer some aspect of your question today, and I would like

to do that.

Acceleration in a program as complex as Deepwater, with the

risks that Deepwater poses, and the uncertainties around the MNS

and the implementation plan, which we have only just now have

been asked to examine to see whether or not it is adequate, sufficient, and whether or not there is enough transparency to it, is a

real risk. That said, we also believe the condition of those assets

is a serious problem.

What I would like to say is one thing. We would like to see the

Coast Guard, put the internal controls and other management improvements that we have asked for firmly into place. Once that is

done, one will still need to monitor that program, because of its

complexity.

However, I can say this, that if the Coast Guard were to successfully implement our recommendations, I would feel a lot more comfortable about a more aggressive schedule than I feel right now. I

would also say that I would prefer to see acceleration for assets

that are proven assets, that is, after they are built, fielded and

tested, so that the identified improvements that inevitably come

after you put those first few in play can be made for follow-on assets. That kind of a strategy for more aggressive schedule poses a

lot less risk than willy-nilly putting more money across the board

into the program.

Mr. BOUSTANY. Thank you for your answer.

That is all I have, Mr. Chairman.

Mr. LOBIONDO. Mr. Filner.

Mr. FILNER. Admiral Collins, you explained how you are going

from the legacy to the Deepwater, remanufacturing, I guess. And

we have expressed up here, at least I have, and others have joined,

I think, a little bit of concern about that approach, the cost-effectiveness of it.

I just want to note for the record that other agencies thought

that strategy would be nice, then shifted away from it because it

did not work. The U.S. Navy’s helicopters, the SH3s, the SH60s, Rs

and Ss, the U.S. Army’s decision regarding new Blackhawk helicopters, the U.S. Air Force efforts to remanufacture the

Pavehawks, the U.S. Marine Corps’ with the AH1 Yankee and the

Zulu aircraft, they all thought they were going to remanufacture

and had to shift to purchase. So you ought to look at that.

But let me look at the cost-effectiveness of this whole process.

Ms. Wrightson first. You stated that one of the problems with

using the system integrator approach was that there may not be
16

enough competition to lower the cost. It seems to me, with going

to the rebuilding of these helicopters and other aircraft, does that

not mean there is going to be even less competition, because there

are no new construction manufacturers that can compete?

Ms. WRIGHTSON. Again, that is a good question. If you look into

it a little more deeply and you talk about sort of competition across

the board, we did make recommendations to the Coast Guard to

put more safeguards in to ensure competition, which at the end of

the day, what competition is about is a tool to produce the best

value to the Government. Sometimes that means complete replacement and sometimes it does not. But whatever the outcome that

is what competition is for.

The two things the Coast Guard has done in this regard are that

they have agreed to observe FAR requirements that for amounts

greater than $10 million the Coast Guard needs to be notified, the

agency needs notification for that. And ICGS has agreed to do that.

That is one example. The other action is that they have put in specific metrics into the evaluation of the contract, such that before a

final decision is made, before they award another contract, they

will take a look at competition.

These are important steps. They are internal control steps. But

in order to know whether for any particular asset replacement or

purchase you have sufficient competition to ensure best value to

the Government, you have to look at the procurement details themselves and not just the internal controls. We have not looked at the

replacement of the HH65, HH60 or a combination for the AB139,

for example.

Mr. FILNER. And I wish you would. Again, when you go through

re-engineing, you are not going to have any competition from new

manufacturers. They cannot compete for that asset, so you have

ruled it out just from that decision, it has ruled out that competition.

Ms. WRIGHTSON. But it might be, and I do not know, because we

have not done the work, that that re-engineing decision might be

something that at the end of the day would be best value. You

would have to study it.

Mr. FILNER. That is a good thing. We have been asking this for

months and months and months, trying to get the data.

Let me just ask, on that question, Admiral Collins, the cost difference between remanufacturing a 20 year old HH65 and buying

a new multi-mission helicopter, what is that difference?

Admiral COLLINS. Which one are you talking about? Number one,

the initial commercial helicopter in the Deepwater baseline that

was awarded was the AB139 and that was a replacement for the

HH60, not the HH65. The decision not to do the 139 was based totally on the performance gap analysis and the performance that

could be delivered by the 139. It could not meet the revised requirement.

So we were forced to look at an alternative. We looked at the

HH60, the cost of revising it, updating the HH60. I think we have

very convincing numbers, I would be glad to share those in a brief

to your staff. Very convincing numbers that that is best value.

On the HH65, that was a Deepwater solution from the get-go.

When the contract was awarded in June of 2002, the solution pro-
17

posed and awarded for that particular level of helicopter was the

HH65. So it has been a Deepwater solution from the very beginning.

Mr. FILNER. I thought the ICGS identified the AB139 as the helicopter of choice.

Admiral COLLINS. It was under the previous requirement, the

mission needs statement, it was a candidate replacement for the

HH60. When we did the performance gap analysis in the post-9/11

environment and updated the performance elements that needed a

helicopter, it did not match up. So we had to look at another alternative.

Mr. FILNER. Just answer me this question. You are giving me all

kinds of corollaries and things. I just want to know the difference

between re-manufacturing the HH65 and buying an AB139. Just

what is the difference in that?

Admiral COLLINS. It is probably, the total costs to convert an

HH65, including the re-engineing, which is already a sum cost, we

have already done it, and the new tail rotor, new landing system

and avionics, which completes the transformation to a Deepwater

asset, rough order of magnitude about $8 million, $8.5 million. And

a 139 is at minimum, at minimum $15 million.

Mr. FILNER. All right, so you’re saying 9 versus 15.

Admiral COLLINS. At minimum. The range that my staff

Mr. FILNER. Customs bought the same helicopter for $12 million,

and they had additional requirements. If you—I do not know if that

was based on 1 or 90 of them. What was that $15 million cost

from?

Admiral COLLINS. Pat, do you want to answer this?

Admiral STILLMAN. Mr. Filner, I think it is important to recognize that the AB139 and the Deepwater solution was a placeholder.

It was not initially scheduled to actually enter into the solution

until 2012 or later. Ms. Wrightson’s point is extremely well taken,

notwithstanding the fact that that was a placeholder in the solution, you can rest assured that we would have competed that issue

to ensure best value to the government. The contract is predicated

on very accurate and deliberate statements of work for the first five

years.

So in 2007, we will make a decision regarding the renewal of

that contract and what transpires in the out years, quite frankly,

will absolutely be focused upon competition, best value and the

adroit use of an integrator.

Mr. FILNER. We do not have the time here, I guess we are going

to have to do it more person to person. But you keep mixing apples

and oranges on me.

Admiral STILLMAN. In what respect?

Mr. FILNER. You tell me that the AB139 was a placeholder to do

something down the line. But that was because the asset, the

HH65 was considered to be practical. And now you have decided

it is not. Did you change—so you changed the basis of the whole

equation there.

Admiral STILLMAN. Indeed we did, in terms of the capability

changes, post-9/11, as far as the desired performance and needs of

the system.
18

Mr. FILNER. How many people can the HH65, how many people

can it vertically insert on a boarding team, on a tanker or

Admiral STILLMAN. Four I think is the accepted norm in terms

of that aircraft. But the reason we have

Mr. FILNER. How much can the AB139 do?

Admiral STILLMAN. I would say it is certainly capable of four.

Mr. FILNER. Probably six.

Admiral STILLMAN. What is that, sir?

Mr. FILNER. Probably six.

Admiral STILLMAN. But not with the range that we feel is essential in terms of post-9/11, and the necessity of in some cases having

the capability to deploy a helicopter with aircraft use of force, vertical insertion, 200 miles from the platform. So that is the

Mr. FILNER. Can you tell me the range of things?

Admiral STILLMAN. Two hundred miles from the platform, the

ship that it is deployed on.

Mr. FILNER. What is the range of the HH65?

Admiral STILLMAN. It is not 200 miles, sir, that is a medium

range helicopter. The

Mr. FILNER. What is the range of the AB139?

Admiral STILLMAN. I will have to give you that for the record, I

do not have that

Mr. FILNER. Well, you just said the ranges are different, so you

obviously have something in your head about—you said to me that

that was a bad comparison because there were range differences.

So I am just asking you what are those differences.

Admiral STILLMAN. I am just saying that is one of the issues that

came into play

Mr. FILNER. You are dismissing my question and you are not giving me any evidence for your dismissal of it. I can just say, no, you

are wrong, because you do not have any figures, do you?

Admiral COLLINS. Let me try to, if I can just comment, sir, it is

two separate helicopter systems that are part of Deepwater. The

candidate systems for the replacement of the HH60 initially was

the AB139 out into the 2012 time frame. The HH65 was the short

range helicopter, that is the one we deploy on our ships. That was

always a Deepwater solution, it had been from the get-go. And that

is converting that helicopter.

So we have re-engined it early because of the current condition

of that engine. So you have two helicopter systems going. Then in

the meantime, you had a post-9/11 performance gap analysis that

said the higher end helicopter, the medium recovery helicopter, had

to have certain performance dimensions to it. And the AB139 did

not match up to those. We would be glad to give you a blow-byblow, for the record in a brief, on all the dimensions of that performance shortfall.

But the comparison

Mr. FILNER. I have been asking you that for months and months.

I have been asking you for a cost-effective analysis. That means the

cost versus the performance. And you keep saying you are going to

give it to me, we keep asking and I—why do you keep saying you

are going to give it to me when I keep asking for it? I mean, either

give it to me or stop saying you are going to give it to me.
19

What does cost-effective mean in English? That is exactly what

it means, right? I have been asking this for six, eight months now.

Mr. LOBIONDO. Excuse me. The Admiral has said publicly that

he is going to.

Mr. FILNER. He said it six months ago, too.

Mr. LOBIONDO. Okay, we are going to ask for a follow-up. Do you

need a period of time before you can arrange a meeting with Mr.

Filner’s staff and the committee?

Admiral COLLINS. Let me check with my staff and see how quickly we can

Mr. LOBIONDO. You will let us know within the next week when

you can do that and within which time frame.

Admiral COLLINS. Yes, sir, I would be glad to do that.

Mr. LOBIONDO. We will follow up on that.

Ms. Wrightson, you talked a little bit earlier about your concern

if the program were accelerated, would the assets be proven to be

reliable, so that we are not just throwing money out there that

sounds good, but we are not actually going to be buying what we

think we are buying that is reliable, that is sort of what you said?

Ms. WRIGHTSON. No, not exactly.

Mr. LOBIONDO. What did you say?

Ms. WRIGHTSON. What I said was that in any program of this

complexity, every change affects every other change.

So what I said is, in a system of systems approach, while it has

certain promise that it can deliver some of the combinations of assets and coordination in assets that the Commandant has talked

about, there is risk to try and manage that and the use of a systems integrator is part of that risk.

What I said then was that an acceleration in and of itself, unless

you have the kind of internal controls in collaboration between

ICGS and the Coast Guard and accountability to Congress in place,

is potentially not a more effective or efficient strategy for replacement. So accelerating only increases those risks until these internal controls and oversight of ICGS are satisfactorily worked out.

We do not think they are right now.

Mr. LOBIONDO. So you do not think the internal controls are in

place that need to be?

Ms. WRIGHTSON. Two of our 11 recommendations we have closed

as fully implemented by the Coast Guard. The remainder we have

not seen as able to close, because the Coast Guard is still working

on them.

I just met with ICGS yesterday and the Coast Guard last week

to try and establish a time frame within which we can agree that

we will either be able to close these or say the Coast Guard is not

going to implement them.

Mr. LOBIONDO. What was the conclusion?

Ms. WRIGHTSON. I think the conclusion is that we are talking

many weeks but not many months until we can come to closure on

a status check. We will be happy to provide you and your staff a

sort of running record of how they are doing on that.

Mr. LOBIONDO. To say we are very interested is a big understatement.

Ms. WRIGHTSON. Absolutely.
20

Mr. LOBIONDO. This is a high priority, very critical information.

Because the questions that we are ready to ask are that, does the

Coast Guard have the capability to accelerate the Deepwater program to a 15 year schedule. I think if I am going to venture a

guess, we cannot say that until you can say whether we have

Ms. WRIGHTSON. I think that is the right answer. What we can

say is the Coast Guard is improving its capacity to effectively manage the program as it now stands. And keep in mind, there is a

lot in play in the program. Some assets are already being accelerated and others are not.

So it is really not quite that simple, but I can say in terms of

the Coast Guard capability, I will give you just one example. We

asked the Coast Guard to develop a better human capital plan for

its own staff to partner with ICGS. The Coast Guard has taken a

number of measures to do that.

But at the end of the day, there is still a 16 percent vacancy rate

in the program, and that is not a surprise to the Coast Guard. We

have talked about this and they are working on it.

But the absence of a fully staffed program, with people with the

knowledge, skills and abilities to work effectively with ICGS, represents a problem. In fact, ICGS themselves yesterday told me that

it was a problem, because it limits their ability to efficiently move

RFPs and other things along. So it is a complex program, there are

lots of risks. But we are not sitting here saying the Coast Guard

is not managing the program well or improving. We are saying that

it is a high risk program that needs a lot of oversight and a lot of

controls and management need to be in place to ensure that the

system of systems promises materialize and the program’s objectives are achieved.

Mr. LOBIONDO. But you are totally satisfied with the level of cooperation you are receiving?

Ms. WRIGHTSON. Absolutely satisfied with the level of cooperation right now, yes.

Mr. LOBIONDO. And the flexibility that demonstrates to react to

situations that are being uncovered? No question in your mind

about that?

Ms. WRIGHTSON. No question in my mind about that. We are

working very well with them.

But even with their best effort, some of these problems take time

to resolve.

Mr. LOBIONDO. Would you be able to say whether, in your view,

acceleration would result in a decrease in total program costs?

Would you be prepared to comment on that?

Ms. WRIGHTSON. I wish I could, but I cannot.

Mr. LOBIONDO. Would you be able to at some point in the future?

Ms. WRIGHTSON. I doubt it, because as I said, we put our best

economists on this effort. We spent a lot of time with the Coast

Guard. Two things. One, the current data they were able to provide

us does not give you the kind of data you need to have a definitive

answer to the question. Second, whenever you do a system of systems approach, every change affects the answer to the question.

This program has been undergoing so many changes that it is almost impossible to determine at any point in time whether that is

true and whether it would matter.
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I think it is fair to say that when you can eliminate maintenance

costs and move forward with a new system and get greater capabilities, that is a good idea. There is better value to the Government and you are able to achieve your missions more effectively.

But when you are engaged in this kind of a contract, it is very difficult to make summary judgments about it. Asset by asset it may

be possible. But as a system it is very difficult.

Mr. LOBIONDO. Admiral Collins, can you tell us with any degree

of certainty on your part that the legacy system will be able to

maintain the current mission level until Deepwater assets come online?

Admiral COLLINS. Mr. Chairman, we are working very, very hard

to ensure that we have the appropriate maintenance plan to address legacy asset subsystem problems. Incidentally, there was a

legacy report that is due Congress, I signed that out today, it was

hand delivered to the Hill today, which details asset by assets the

initiatives that we plan to pursue in a dollar amount per asset that

would need to be invested to keep legacy systems going until they

are replaced.

The mission effectiveness program that we have on the 2006

budget, sir, is the first part of that. Well, actually, they are doing

the first cutter in 2005. There is an increment of, I want to say

about $39 million in the Deepwater line item for mission effectiveness programs for both 270 cutters, I think there are three each,

270 cutters and the 210 foot cutter, a nine month shipyard availability to be done at the Coast Guard yard that will place out needed subsystems to keep them going.

So we have for the medium endurance cutter a fairly definitive

program. We also have other sustainment plans for both the 110

and the 378. So we have identified the requirements for those legacy systems. It is obviously a function of what is the distance now

and the time to replace, what do you have to do to keep them

going. I am pleased that we have that kind of focus on them and

I think you will see that in the legacy report, sir.

Mr. LOBIONDO. So in essence, you need more time before you can

answer that question. We are concerned that we are going to reach

a point where we are going to have maybe not a surprise, but some

bad news about where we are. Do you have a sustainment plan for

the 110s?

Admiral COLLINS. The 110s, of course, is another not uncomplicated system. The initial strategy, as you recall, Mr. Chairman,

was to have a bridging strategy of the 110 to 123 conversation until

the full replacement platform came in. It is like the 2018 time

frame.

We have done six of those conversations to date. The eight will

be completed through September. We have had, quite frankly, some

structural problems with the solution. We are reevaluating that,

and if the fixes have cost us more money. We are reevaluating the

cost implications of that and the performance implications of that,

a formal operational reevaluation assessment of that ship. It is

very likely that we will truncate that 123 extension program. That

is why we have moved the design and up-front engineering of the

fast response cutter, its replacement, we have moved that up over
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10 years. It is now the design that we are doing right now. And

that was that reason.

Another mitigating thing is increasing the program hours for the

existing 110 fleet. The third mitigating factor is to do hull

sustainment of the 110s. The fourth mitigating factor is the addition of five PC175s to the United States Navy. All of those things

are helping. There is some loss of patrol boat hours, but we are

mitigating that loss through these various initiatives.

That is another report, sir, we owe the Congress, is on the patrol

boat hours and the impact over time. That is in the final stages of

being completed. It had to come in after the implementation plan

came up.

Mr. LOBIONDO. Mr. Reichert, do you have anything else?

Mr. REICHERT. Thank you, Mr. Chairman. Just one more question.

Integrating your new equipment and your new systems into the

Coast Guard’s operation sounds at least, that it is going to be challenging is an understatement. You talked about partnerships a little bit, so if it is going to be challenging to you to integrate that

system and equipment in the Coast Guard operation, I am just

wondering what your relationship is with the Department of Defense and with the Navy, and will your Deepwater equipment be

interoperable with the Navy?

Admiral COLLINS. Great question. We have had an incredibly

strong and close partnership with the United States Navy for a

long time, particularly the last three or four years. All of the performance specifications for all of the ship platforms in the Deepwater project, that performance specification is reviewed with the

Navy. We solicited what we call NOCs, Naval Operation Capabilities that they would like to see embedded into these systems.

So from the very beginning, they had a Naval Operation Capability dimension to their performance contract. We have updated it

since, particularly for the patrol boat platform. They are in fact

providing some Navy equipment to these ships, I want to say about

$21 million or so for the national security cutter, $21 million worth

of equipment. This is equipment in kind, not dollars sending our

way, but equipment in terms of radar systems and those kinds of

things.

So part of our contract, performance contract, the mission requirement was developed with the Navy, understanding that we

have to, this is sort of a national fleet that we are running between

the Navy and the Coast Guard. It has to be simpatico, non-redundant but supportive, non-duplicative but supportive, complementary assets. We work very, very hard to do that, and interoperability is very, very high on the agenda, and I think we have that,

sir.

Mr. REICHERT. So as far as the additional capabilities, they have

been providing equipment up to $21 million so far, you’ve said, but

no money.

Admiral COLLINS. It’s Navy systems that they provide to us, particularly on the weapons system type of category. That is terrific

for us, because they have the support infrastructure, training infrastructure and support infrastructure associated with those systems.

So we can leverage our partnership with the Navy for those things.
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So very much interoperability is high on Vern Clark’s agenda, it is

high on my agenda. We meet frequently to discuss those things.

Pat Stillman, my PEO, is also on the combat ship source selection

board. We are looking at where there is crosswalk between systems. So it is quite a partnership, sir.

Mr. REICHERT. Great, thank you.

Thank you, Mr. Chairman.

Mr. LOBIONDO. Mr. Filner.

Mr. FILNER. Just briefly. I was interested, Admiral, in your description of the 110 situation, since everything I told you earlier,

every experience that we have had in other agencies and apparently now in yours with the conversions ends up in a problem. Let

me just ask you on that one, who ended up paying for the mistake

that you had? ICGS has said that adding the 13 feet extension to

the 110 said it could support, the structure could support it and it

could not. The shipyard that apparently built the original one was

supposed to do the conversions.

I wonder who paid for that? And did you testify to us a year ago

or more how cost effective that conversion would be and how it met

all the capabilities and everything that you just said about the

HH65? Did you testify to the exact same cost effectiveness and yet

we have this incredible disaster, and who paid for it?

Admiral COLLINS. As to the contractual relationship going forward, I will ask the PEO to comment on that specifically.

Clearly, the Deepwater integrator and their solution had a host

of piece parts to the overall system. As you recall, sir, they were

driven by performance of the overall system at the total lowest cost

of ownership. Those were the basic metrics that were used in designing

Mr. FILNER. You gave me the wrong answer. So are you not

questioning the metrics that you start off with?

Mr. LOBIONDO. Mr. Filner.

Mr. FILNER. How can you give me an answer like that? They

gave you the wrong answer. And now you are telling me it is because you did not have enough money, which is how I started my

whole line of questioning for you in Deepwater to begin with, by

the way. They had the wrong metrics, Admiral, if they gave you

that answer, according to the metrics. How can you give me that

kind of answer?

Admiral COLLINS. I was talking about the entire system. I think

that is a good stewardship acquisition approach, sir, is that we are

looking at tradeoffs between, not optimizing every single part of

Deepwater, but saying how, together, collectively can it give you

the system you want effectively

Mr. FILNER. You just told me you stopped the conversion at six.

Admiral COLLINS. We are evaluating

Mr. FILNER. It was a mistake. It was a mistake.

Mr. LOBIONDO. Mr. Filner, I am going

Mr. FILNER. Look at the mistake and figure it out.

Mr. LOBIONDO. I am going to cut this off, because an argumentative approach is not going to get us where we go. Admiral Collins

is not giving you the answer that you want to hear. And you are

going to get a private briefing. The Admiral has promised us that.

We are going to follow up with that.
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I want to close by saying, obviously, we are very concerned. We

desperately want this to move forward in a positive fashion. Admiral Collins and Admiral Stillman, you have a very difficult task on

your hands. You have gone through a number of hurdles. There are

a lot of positive things that do not get emphasized enough about

what is going on. We, I think, both of us, or all of us here today

in the Committee, at least I do want to recognize the positive

things that have happened. We have not emphasized them because

the time we need is to try to move us forward.

Ms. Wrightson, your involvement through this whole program

with oversight is invaluable to what the end result is going to be

with your agency. We have great concerns we are going to follow

very closely and carefully. These are tough questions we are asking, but I hope you view it as tough love. We love the Coast Guard,

we love the work that your men and women are continuing to do

on behalf of the United States of America. We just want to try to

make sure that we can get this program done in the right way and

the best way possible.

So we will be following up, and with that, the Committee is adjourned.

[Whereupon, at 3:20 p.m., the subcommittee was adjourned.]
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