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30–649 PDF 2006

DEEPWATER IMPLEMENTATION

(109–79)

HEARING

BEFORE THE

SUBCOMMITTEE ON

COAST GUARD AND MARITIME TRANSPORTATION

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

JUNE 14, 2006

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

JEAN SCHMIDT, Ohio

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

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

JOHN BARROW, Georgia

(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

Allen, Admiral Thad, Commandant, U.S. Coast Guard ....................................... 2

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Filner, Hon. Bob, of California ............................................................................... 32

LoBiondo, Hon. Frank A., of New Jersey .............................................................. 35

PREPARED STATEMENT SUBMITTED BY THE WITNESS

Allen, Admiral Thad ................................................................................................ 24

SUBMISSIONS FOR THE RECORD

Allen, Admiral Thad, Commandant, U.S. Coast Guard

Response to a question from Rep. Filner ........................................................... 6

Response to a question from Rep. Fortun ̃ o ........................................................ 19

Response to a question from Rep. Boustany ...................................................... 21

(1)

DEEPWATER IMPLEMENTATION

Wednesday, June 14, 2006

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, SUBCOMMITTEE ON

COAST GUARD AND MARITIME TRANSPORTATION, WASHINGTON, D.C.

The committee met, pursuant to call, at 1:00 p.m. in room 2167,

Rayburn House Office Building, Hon. Frank A. LoBiondo [Chairman of the committee] presiding.

Mr. LOBIONDO. Good afternoon. The Subcommittee will come to

order.

The Subcommittee is meeting this afternoon to review the Coast

Guard’s Deepwater Program and the Service’s revised Deepwater

implementation schedule. The Coast Guard’s Integrated Deepwater

System is designed to replace or modernize approximately 90 ships

and 200 aircraft currently utilized by the Service to carry out missions more than 50 miles from shore.

The new assets obtained under this program are extremely important and will greatly expand the Coast Guard’s ability to perform its many traditional and homeland security missions. The

original Deepwater implementation plan and asset mixture were

devised prior to September 11th and consequently, the plan has

been revised to take into account the Coast Guard’s greater homeland security responsibilities.

It was important for the Service to do this, and I am pleased

they did. Nevertheless, it is my duty to evaluate the plan, and I

have some concerns. First, I am disappointed that the plan extends

the time period for acquiring the new assets from 20 to 25 years.

Every year we delay the purchase of new assets, the men and

women of the Coast Guard, and our taxpayers, lose, for a couple

of reasons. First, the cost of maintaining legacy assets significantly

increases, eating more and more of the money available to purchase replacement assets. And newer and more capable assets are

not available to improve the performance and safety of the Service’s operations.

My second major concern is with the workhorse of the Coast

Guard’s fleet, the 110-foot patrol boats. These boats are rapidly

failing, resulting in an estimated patrol boat readiness gap of nearly 20,000 hours annually from 2008 through 2012. Exasperating

the problem are the failures surrounding the development of the

replacement of the 110, the fast response cutter, as well as the termination of the agreement with the Navy to provide the Coast

Guard with 179-foot patrol ships.
2

I am especially interested in hearing from the Commandant on

how he plans to manage the readiness gap and what progress has

been made in fixing the design problems of the FRC, as well as the

status of the search for an off the shelf patrol boat design as an

alternative to the FRC.

Finally, I would like to congratulate Admiral Allen on becoming

the Service’s 23rd Commandant. We have enjoyed when you have

been here before and we are especially pleased that this is your

first visit as Commandant of the Coast Guard. I know I speak for

the entire Committee: we are absolutely thrilled, Admiral Allen,

that you got the position.

When Mr. Filner comes, he may have an opening statement. I

want to apologize, we have some floor activity. Mr. Coble is going

to temporarily take over in a minute. But Admiral Allen, please

proceed.

TESTIMONY OF ADMIRAL THAD ALLEN, COMMANDANT,

UNITED STATES COAST GUARD

Admiral ALLEN. Thank you, Mr. Chairman.

I have a statement that I would like to submit for the record and

I have a very brief oral statement that I would like to make right

now.

On the 25th of May, I made a compact with the men and women

of the Coast Guard to do four things as Commandant. The first one

was to focus on mission execution, to sustain the high level of performance that has been demonstrated over the last year in response to the hurricanes and since 9/11, with our response in

homeland security. To do that, we have to have the very best people.

But our people are nothing without platforms. We have to put

the right tools in the hands of our people, and we have to build a

command and control structure behind that that optimizes mission

execution. Then we need to build a mission support system that focuses on the right logistics, maintenance, financial support, so that

all the forces in the Coast Guard are optimized on mission execution.

To that end, we are going to rationalize our force structure. We

made a major reorganization in the last year by establishing Coast

Guard sectors that unifies Coast Guard effort in and around our

ports. The Deepwater acquisition is our maritime patrol and presence force that allows us to meet and defeat threats as far offshore

as possible.

The final piece of that are our deployable teams, port security

units, maritime safety and security teams and so forth. It is my intention to consolidate all those units under a unified command of

the Coast Guard to get better synergy out of them and to offer that

force to the Secretary of Homeland Security for all hazards, all

threats.

In regard to today’s hearing, I would like the Committee know

that last week I traveled down to Pascagoula, Mississippi. I walked

through the shipyard, I got a briefing, and I completely toured the

national security cutter that is under construction. It will be floated later this fall, and we will take possession of it next year.
3

I have made it clear to our partners in Integrated Coast Guard

Systems that my watchwords for the Deepwater project are ruthless execution. We need to cut steel and float boats, we need the

right tools in the hands of our people. If we need to make tough

decisions on requirements, we will do that. We need to focus on

cost, schedule and performance. We have issued the first award

term and we are in the process of entering negotiations on the criteria and how that contract will be managed.

The Committee has my complete commitment to do just that:

manage cost, schedule and performance. I think it is very, very important that we get these tools in the hands of our people.

I was very pleased with the walkthrough of the national security

cutter last week. This is going to be a major step forward for our

folks who go to sea. It is much more habitable. It is going to be

a much greater, effective tool for our people to use. I took the new

Master Chief of the Coast Guard with me. He was very pleased

with what he saw, and I think we need to tell the Coast Guard

what they have got coming, I think they are going to appreciate

this ship.

There are some technical issues associated with the construction

that we will address in subsequent hulls. But I am here to report

to the Committee that my watchword for acquisition is ruthless

execution.

I will be glad to take your questions.

Mr. COBLE. [Presiding] Admiral, I want to extend what Chairman LoBiondo has said. Pardon my immodesty, but I think I may

have been the first person to have congratulated you prematurely

back in January. But I felt confident in extending those words of

congratulation to you. As Mr. LoBiondo has said, I think this was

warmly felt on the Hill, your having been named Commandant.

Good to have you on the Hill again.

While I am at it, I might as well say a good word to the threestriper who sits behind you. They do a good job with House liaison.

I continue to get good words from them. So two thumbs up for

them as well, Admiral.

And Mr. Filner I presume is on his way.

Admiral, let me ask you this question. We all know the significance of Deepwater. But there was a recent GAO report that focused on the RESCUE–21 program. One of the major themes of

that report was that the Coast Guard needs to improve its management oversight of the program.

Let me ask you a two-part question, Admiral. A, do you agree

with this, and if so, what steps are you taking to ensure this critical, life-saving system is successfully deployed?

Admiral ALLEN. Thank you, sir. First of all, this is a critical system for the Coast Guard for mission execution and for the American public. There are issues with this acquisition. There are issues

on both sides, both Coast Guard and General Dynamics.

What we have agreed to do is put together an executive team to

address the issues that were raised in the GAO report. The GAO

report concentrated on a couple of areas. One was requirements

management. The other was project monitoring. The other one was

risk management. Also contractor costs and schedule estimation

delivery controls. And most importantly, executive oversight.
4

We have brought in a distinguished panel of acquisition experts

to take a look at this. I am going to have an action plan presented

to me by August. I spoke with the CEO of General Dynamics this

morning on the need for he and I to take a personal leadership role

in moving this process forward, that we need to take a look at the

current contract vehicle that is in place, whether or not it is serving the Coast Guard and General Dynamics well.

I will say this, where this equipment has been deployed, it has

been remarkably effective. We have a much increased efficiency

and response to search and rescue cases and direction finding. This

is something the Coast Guard and the Country sorely needs, and

I am taking it on as a personal leadership issue to deal with the

CEO of General Dynamics, sir.

Mr. COBLE. Thank you, Admiral.

We have been joined by the distinguished gentleman from California, Mr. Filner.

Mr. FILNER. You have never called me distinguished before.

Thank you.

Mr. COBLE. I was just trying to impress the Commandant with

that.

[Laughter.]

Mr. FILNER. Thank you, Mr. Chairman. And thank you, Admiral.

Mr. COBLE. Excuse me. Also the distinguished gentleman from

Louisiana is with us. Didn’t mean to overlook you, Mr. Boustany.

Mr. FILNER. I apologize for being late, Admiral. I would like my

opening statement to be made part of the record.

Mr. COBLE. Without objection.

Mr. FILNER. Let me just ask you, and if you have covered these,

just say that and I will listen to the tape.

Admiral, the Deepwater plan to replace the 110-foot boats has

had one problem after another. I don’t think we need to detail them

now. But cracks in the hull and attempted conversion, which did

not work, replacement vessels made out of composite materials,

which also did not work.

Now you are going to try I think to do an off the shelf design

for the cutter. Is there one that meets your needs? Are you going

to be able to do that? What is plan C now that plan A and B

haven’t worked?

Admiral ALLEN. Yes, sir, I think there is a craft that will work.

Let me provide some context, if I could. As you know, we attempted, as a bridging strategy to the new fast response cutter to

extend the 110-foot cutters to 123 feet, put in a stern ramp and improve the command and control communications on those vessels.

We have had significant structural problems associated with that,

and the project was terminated with eight hulls.

We are now testing those hulls to see if further repairs may be

needed. Their current operations are restricted to eight foot seas or

less.

I would note, though, despite the operational limitations of those

vessels, they have a significantly improved boat handling capability

and significantly improved secure communications capability, so we

are using them to mission effect down there, not to the extent that

we envisioned or with the number that we wanted.
5

In the meantime, we have a tired 110-foot fleet out there, as you

have mentioned. We have tended to stabilize that fleet through our

mission effectiveness program where we were actually looking at

hull structural issues. We are running these boats through the

Coast Guard yard. I think with the current 110 fleet that we have

out there now, we will stabilize it in the near term, so those units

can be effectively applied to mission effect.

The problem is that as we have evolved the composite design for

the fast response cutter, there are some technical issues that need

to be resolved. As a risk mitigator, we have elected to put out a

request for information on parent craft or replacement type designs

where we could get something that is pretty much off the shelf that

could be a gap-filler for the patrol boat hours that were mentioned

by Mr. Coble in his statement.

My goal is to proceed with an acquisition as soon as we can on

a replacement patrol boat as a gap-filler to give us those patrol

boat hours and simultaneously validate the concept and technology

of composite hulls. And to the extent that we can move forward on

that, when the time is right, we can suspend the other procurement. But my goal is to have patrol boats being brought into the

Coast Guard to fill that gap until such time as can validate the

composite hull and move forward with that acquisition.

Mr. FILNER. Where will those boats be built?

Admiral ALLEN. That will be subject to a procurement process.

We have put out a request for information to find out what is available. We know there are a substantial number of hulls out there

that can probably meet our mission requirements. It will be a matter of making that selection and proceeding with the contract,

working with our partners at ICGS.

But in the meantime, we need to be moving ahead and seeing

what the doability is on the composite design.

Mr. FILNER. But I notice you didn’t say there would be any competition amongst U.S. ship yards for that. I mean, does ICGS make

that decision themselves, or would there be a bid process?

Admiral ALLEN. We fully expect that there will be competition

everywhere there can be as part of this acquisition. We have

passed that on to ICGS, and in fact, in the next award term, one

of the criteria will be competition as a means to measure their performance.

Mr. FILNER. When is that contract looked at, again?

Admiral ALLEN. We are in the process of beginning to negotiate

the next award term, which will take effect in June 2007. We just

awarded the award term decision for 43 months to Integrated

Coast Guard Systems. We have established the basic criteria by

which we will evaluate that award term, and we will shortly enter

into negotiations with ICGS on the request for proposal.

Mr. FILNER. I lost you. So did you award a 43 month extension?

Admiral ALLEN. We have established the next award term to be

43 months. That becomes a sole source award that has to be

negotiated———

Mr. FILNER. Why is that less than the 60 that you initially did?

Were there any problems with them?

Admiral ALLEN. That was based on an evaluation of their performance against a set of criteria and a board of Coast Guard per-
6

sonnel that were actually operating that equipment out there. Our

chief of operations led the evaluation board and made a recommendation to our program executive office that given the performance and the evaluation criteria that 43 months was the proper award term and that is what was conveyed to ICGS.

Mr. FILNER. Were there problems that led to not doing it for the

full 60 months? You said evaluation, but you haven’t said what.

Admiral ALLEN. We were looking at things like operational effectiveness, total ownership costs and those sorts of things across not

only the system but the platform and the component. So it is a

combination of performance across the system by the contractor. In

some cases they did better than other places and the aggregate

score, that led to the decision for 43 months, sir.

Mr. FILNER. I don’t know if you heard me say this to your predecessor, but you should read what you just said sometime and see

how that translates into English. You get into a certain mode of

talking and we lose the English. Did they perform or not is what

I want?

Admiral ALLEN. They performed well, they did not perform well

enough to get a 60 month award term. The reasons for that———

Mr. FILNER. And where didn’t they perform well enough?

Admiral ALLEN.—are embedded in different levels of performance

related to the specific platforms, how the system operates and their

ability to control total ownership costs. We can disaggregate this

for the record for you if you like, sir. It is a fairly complex matrix

that was evolved, sir.

[The information received follows:]
7
8
9
10
11
12
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Mr. FILNER. And of course, Congressmen couldn’t possibly understand anything so complex, right?

Admiral ALLEN. It is understandable, sir, but it is pretty

significant———

Mr. FILNER. Believe me, whatever you get me, I will understand

it.

Admiral ALLEN. Excuse me?

Mr. FILNER. I said get me whatever paper you want, I will understand it or I will ask the commander behind you to explain it to

me.

Admiral ALLEN. Yes, sir.

Mr. FILNER. Thank you, Mr. Chairman.

Mr. COBLE. I thank the gentleman.

The distinguished gentleman from Louisiana, Mr. Boustany.

Mr. BOUSTANY. Thank you, Mr. Chairman.

First of all, Admiral, congratulations. And also congratulations

on your outstanding service and the outstanding service of the

Coast Guard in my home State of Louisiana in the aftermath of the

two storms. We certainly appreciate the work that you did.

I want to talk about the risk of accelerating the program. We are

all aware of the problem with the FRC. But could you outline some

other risks that are out there if we were to try to accelerate the

program, the Deepwater program?

Admiral ALLEN. One risk that we really haven’t talked about in

prior hearings, and it may be a good time to bring it up now, is

the actual capacity of the Coast Guard to execute on an accelerated

time line. As much as we need these platforms brought forward

and as much as we need to close that aircraft and patrol boat gap,

there are a certain number of people in the Coast Guard and we

are limited by appropriations in how many people we are able to

put at this acquisition project.

So the ability to, for instance, build three classes of new cutter

at the same time, bringing on new aircraft and so forth, does tax

our personnel system in terms of the capacity and the amount of

people we have to put at the problem.

Mr. BOUSTANY. Thank you. Are there any parts that could be accelerated? Has there been any thought given to that approach?

Admiral ALLEN. Where there has already been a contract in

place or an order in place for platforms, or the requirements have

been locked down in their production, there is always an opportunity to do that. The ones that are coming offline right now in

particular would be the CASA 235. We are looking at both an MPA

gap and a patrol boat gap.

Mr. BOUSTANY. So you believe that if we were to take that approach, we would probably save some money in the long run?

Admiral ALLEN. Well, I tend to look at this in terms of requirements. There are always going to be funding issues out there and

competition for funding. My two priorities as a commandant are to

close the MPA gap and the patrol boat gap as soon as possible. So

I am more interested in how quickly we can answer our requirements and close gaps as that relates to the overall plan. So any opportunity to do that I would be appreciative of.

Mr. BOUSTANY. OK. With the recent exercise of the option with

ICGS, do you have any concerns about relying on a single contrac-
14

tor at this stage, and the potential for lack of competition in awarding contracts to subcontractors?

Admiral ALLEN. Your question is fair, sir and it relates back to

Mr. Filner’s concern. One of the new criteria we will use to evaluate ICGS in the first award term is competition. In other words,

for the award term following they will be evaluated on how well

they competed in the subordinate contracts.

Mr. BOUSTANY. OK. Has a baseline been made, or any evaluation

that would allow us to determine whether the use of ICGS and a

single package replacement program cost more to taxpayers than

using a more traditional approach of one-to-one asset replacement?

Admiral ALLEN. That is a fair question, too, sir. We were never

looking for a one-for-one asset replacement. We were looking for a

system that would produce a certain level of performance in an operating environment. The system that was offered by ICGS is the

one we are pursuing. The ability to do this another way, you could

go out and issue separate projects and contracts separately and acquire vessels and aircraft and sensors. They would have to be integrated at some point.

One of the challenges the Coast Guard faces, and was instrumental in the strategy on how the Deepwater contract was awarded is

the fact that there is no equivalent in the Coast Guard of the

Naval Sea Systems Command, NAVAIR or SPAWARS. In other

words, we don’t have those large systems commands and integrators that can do that inside our organization. So there is an issue

with both capacity and competency right now to be able to perform

that type of integration.

Mr. BOUSTANY. OK. On aircraft, could you update us on the HH–

65 re-engining project, and I guess you expect the fleet or, give me

a time line on the fleet and when it will be completed re-engined

and operational.

Admiral ALLEN. I can. We originally anticipated that the reengining would be completed around January of 2007. It now looks

like that will probably be June of 2007. At lot of that has to do

with the wear and tear we put on those airframes in the extensive

operations that took place in support of Hurricane Katrina, that required more extensive maintenance due to more hours being put

on, saltwater corrosion and so forth. But we are on track now to

have the re-engining completed by June 2007, and this will mean

a significant, significant upgrade to our forces out there.

Mr. BOUSTANY. I am glad to hear that. I was concerned about the

wear and tear imposed by Hurricanes Katrina and Rita and the

costs associated with it. So I am pleased to hear your answer on

that.

Admiral ALLEN. Sir, we actually noted that the performance of

the helicopters that had converted engines were superior during

Katrina. They carry 1,500 pounds of fuel versus 1,000 pounds of

fuel, they can carry 7 survivors versus 3, and almost double the

time on scene. So these are sorely needed assets.

Mr. BOUSTANY. Admiral, thank you very much. I yield back.

Mr. COBLE. I thank the gentleman.

Admiral, let me revisit the question that Mr. Filner put to you.

Can you clarify that the new fast response cutters will in fact be

built in the United States?
15

Admiral ALLEN. Well, the original plans were to build a composite FRC and that would be built within the Northrop Grumman

structure per the teaming arrangements that were included in the

ICGS. So, yes, sir.

Mr. COBLE. Let me ask you another question, then I will recognize Mr. Filner again.

Admiral, has the Coast Guard been forced to delay the acquisition of new Deepwater assets because of the high costs associated

with maintaining and repairing legacy assets?

Admiral ALLEN. I don’t believe so. If I could maybe just provide

a contextual comment. When this program first started, and the

original plan anticipated that it would be funded at a level of $500

million a year, this program is now approaching $1 billion a year.

It is hard for me to sit here and say that it hasn’t received funding

support by the Administration or the Congress. What we have is

a set of circumstances that have been superimposed on it on increased use of these assets and more maintenance problems that

are coming about.

So there are resources being put out, both new acquisitions, supporting the legacy assets. But there is also a third category where

we are taking legacy assets and upgrading the equipment on them

to make them part of the Deepwater system to make them more

effective. This is taking the older cutters that are operating out

there and for instance, giving them SIPR net chat rooms, so when

we are doing drug interdiction, we have the tactical officers actually talking to each other, and we can trade radar pictures between

ships, which we could never do before.

So it is three phases. It is the new stuff, it is putting new capability on the old stuff and it is maintaining the old stuff. But we

are very pleased that we have been able to move from $500 million

a year up to a billion dollar a year program.

Mr. COBLE. Thank you, Admiral. The distinguished gentleman

from California, Mr. Filner.

Mr. FILNER. Thank you, Mr. Chairman.

I just wondered if I talk as fast as you if I might get a brain aneurysm there.

Admiral ALLEN. Tell me to slow down if I am talking too fast.

[Laughter.]

Mr. FILNER. No, I like your style, Admiral.

It looks to us up here that Deepwater has changed from a program to modernize the Coast Guard with new equipment to a program because of forced resource squeezing to a program that buys

too few new ships and keeps the old aircraft. I think OMB has been

saying that you can’t increase the program costs.

So it looks like you are not getting the support that you need to

be the Coast Guard of the 21st century, where we ask you to not

only do your traditional mission, but the post–9/11 homeland security mission. It doesn’t seem like you are getting the support. I

don’t know if you can answer this, Admiral, I mean, if you weren’t

getting the support that you needed to do the job that you need to

do, would we know about it in Congress?

Admiral ALLEN. You would from me, sir. Let me restate something I said earlier, because I think it is really———

Mr. FILNER. That is your reputation. I was hoping so.
16

Admiral ALLEN. When this program started, the envisioned funding level annually was supposed to be $500 million a year. The fact

that we are up to a billion dollars is indicative that we have had

support, both inside the Administration and on the Hill. I can’t

deny that as a sitting commandant, speaking to you about it today.

Can any Federal agency in town use more money? Sure. Would

we spend it wisely? Yes, we would, sir. But I cannot say that we

have not been supported and we are not moving this project forward. The problem is there is a convergence of events with the

operational tempo the Coast Guard has encountered, not only after

9/11, but as you saw with our response to Hurricane Katrina. Over

the next few months, as I formulate the fiscal year 2008 budget

with the Department and OMB, we are going to have to craft a

strategy coming forward where we are credibly demonstrating to

you that we are moving this project along, sir.

Mr. FILNER. I want you to save your original memos, because I

am going to ask you how much you asked for versus how much you

got.

Admiral ALLEN. I will acknowledge receipt of those questions, sir.

Mr. FILNER. Just one last point of concern of mine, and that is

the drug interdiction. Your predecessor, Admiral Collins, testified,

and I am not sure how exactly you know this, but he estimated 15

percent of the drugs entering the U.S. were interdicted. Are we

going to do better and how are we going to do that? You said, I

think, in your opening statement, at least in your written one, that

Deepwater does result in a modest, near-term operational hour

shortfall, followed by long-term gains. Does that mean we can expect, say, more drugs in this short-term situation? How are we

going to deal with all those issues in your view?

Admiral ALLEN. Yes, sir. The drug problem is fairly complex. We

have had three straight years of record cocaine seizures, as you

may know. We have done that, in some cases, with fewer assets out

there. The reason we have been able to achieve that level of performance is through intelligence, and mostly human intelligence.

Mr. FILNER. I want you to clarify. You said you have had record

cocaine seizures. You are not talking about personally, now, are

you sir?

Admiral ALLEN. I am talking about———

Mr. FILNER. Just my humor, just ignore me. I thought you shifted off the cocaine.

Admiral ALLEN. We have had three very successful years in

counter-drug operations. We may not come to that level this year,

as we are looking at the current operations down south. We are

hitting some challenges where, in spite of good intelligence, we are

not able to take cocaine we know is moving north off the sea routes

out there. It is due to a couple of issues. One of them has to do

with the shift of traffickers to different flag states that make it difficult for us to get on board and board them. We are going to have

to take a look at new strategies and how to deal with that.

But heretofore, in the last three years, we have been extremely

successful in drug interdiction. We will attempt to sustain that.

But we are having some problems to the shifting of the routes to

flags other than what we have bilateral agreements with, sir.
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Mr. FILNER. You have some of your patrol boats in Iraq right

now, right?

Admiral ALLEN. Six, sir.

Mr. FILNER. I assume that if you had them you could do better

with your drug interdictions?

Admiral ALLEN. We could always use more resources, sir. But

those six patrol boats are currently supporting the one single remaining offshore platform for Iraq, sir.

Mr. FILNER. Well, I am glad one member of the Administration

knows why we are in Iraq, to protect the oil.

Admiral ALLEN. Sir, I know why we are there.

Mr. FILNER. Thank you, Admiral.

Mr. BOUSTANY [PRESIDING]. Admiral, we have been joined by the

distinguished gentleman from Puerto Rico, Mr. Fortun ̃ o, and I yield

to him for questions.

Mr. FORTUN ̃ O. Thank you, Mr. Chairman. I truly appreciate it.

Welcome, Admiral Allen. First of all, I want to say, and I have

said it in the past and I will say it again, we are really thankful

for the work that your men and women are doing in the San Juan

sector. It is a large area. It covers essentially everything from the

DR, the Dominican Republic, to Venezuela, way out there. Your

men and women do a great job and I am very thankful. Our office

works very closely with you over there.

Mr. FILNER. Have you flown in any HH–65s lately?

[Laughter.]

Mr. FORTUN ̃ O. My first question was going to be, you do recall

as to the status of the re-engining of the HH–65s right now and

not just in the San Juan sector, but overall?

Admiral ALLEN. Yes, sir. Let me say at the start I am a Puerto

Rican at heart, having served in San Juan when I was a Lieutenant JG down at La Punta, it is a place that holds a great affection

for me.

Mr. FORTUN ̃ O. Beautiful property.

Admiral ALLEN. As I stated earlier, we anticipate that the reengining will be completed in June of 2007. We originally thought

that that would be done by January. We have encountered some

additional wear and tear on the aircraft, associated with a concentrated response to Hurricane Katrina, that has required us to

do some more work regarding some of the mechanical overhauls

that need to be done and look at some of the corrosion associated

with that.

But we are very happy with the way this is proceeding. These

re-engined helicopters are extremely, extremely effective in what

they are doing, and we hope to get them online by June of next

year, sir.

Mr. FORTUN ̃ O. Excellent. My other question is San Juan specific.

As I am sure you know, there is a resurgence in the trafficking, illegal trafficking of arms, drugs and people through the Caribbean

area. And Puerto Rico is directly affected by it. We are seeing

something quite interesting. When the traffickers know that there

is an area where they feel not all the resources that are needed are

deployed there, they move in from all over. We are getting a lot of

Chinese nationals coming in through the Caribbean, specifically
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through Puerto Rico. So that tells you that as far away as the Orient, they already know that we have a need for resources.

Our Committee last year put out some language, report language

specifically requesting that you all do an analysis of the resources

that are needed to adequately address the needs of the San Juan

sector. I would like to know if you have any feedback that you can

give us today.

Admiral ALLEN. Sir, if I could offer to provide you a more detailed response for the record. I will give you an assessment right

now. I would add that I was down in the Gulf Coast for almost six

months. So as I move back into it, I am reassessing some of the

strategies and everything that is going on inside the Coast Guard.

But I can tell you most recently, there has been an increase in

the amount of traffic across Mona Pass between the Dominican Republic and the west coast of Puerto Rico. We are seeing more frequent incidents that does not involve just Dominican nationals, it

involves other nationalities and also Cubans, who, once they land

on Mona Island become feet-dry and we have that issue to deal

with, too.

[Information received follows:]
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Mr. FORTUN ̃ O. If I may, I am sorry to interrupt you, actually we

welcome the Cubans. We have a very large Cuban community in

Puerto Rico. However, it is interesting, there are more Cubans getting to the U.S. through Puerto Rico than through Florida. That

should tell you something as well. Go ahead.

Admiral ALLEN. I was just going to make the point, as you have,

sir, that we have detected the trend that there is a new line or a

new way that Cubans are arriving in the United States, and it is

via Mona Pass, sir. We are looking at that. We are also looking at

the trends on the migrant interdictions that are happening on

Mona Pass. As you know, occasionally we are involved in an interdiction over in the U.S. Virgin Islands from either the British Virgin Islands or further down, down-island there. They do constitute

threat vectors. We are taking a look at it and if you would like, I

can give you a detailed answer for the record.

Mr. FORTUN ̃ O. We would love to get that detailed information if

we may, Mr. Chairman. Again, I want to thank you for what you

are doing there. I urge you to look into the resources that are needed to complete the job. The men and women you have down there

are doing an excellent job. But I believe, I have been out there in

cutters and planes. Any time I have a chairman of any committee,

I try to get them out there to join me with members of the Coast

Guard. That is how proud I am of the work you are doing.

By the same token, I must tell you, I am doing that as well just

to get the resources needed to the San Juan sector. I will be eagerly awaiting the information you provide to our office. With that,

I will yield back, Mr. Chairman. Thank you.

Mr. BOUSTANY. Admiral, we have a few other questions we would

like to ask. The Coast Guard received funding to acquire the HC–

130J aircraft in fiscal year 2004. It used these funds to acquire six

of these ships, but has not outfitted these aircraft with specialized

avionics required for long range search and rescue missions.

This year, the Administration requested $4.95 million for that

work. Will this funding complete the work necessary to make the

existing six aircraft mission capable?

Admiral ALLEN. Sir, we have enough money in previously appropriated funds to mission-ize or what I would say more appropriately, appropriately sensorize those six aircraft. What we are

looking for in fiscal year 2007, first of all, in the ACNI portion of

our budget, is to establish a spare line and a simulator as a followon support for the aircraft. And on the operating side, it would be

to increase the number of hours we are flying those aircraft from

1,200 hours a year to 3,200 hours a year, sir.

Mr. BOUSTANY. Thank you. The Coast Guard has $66 million in

fiscal year 2006 funds to purchase HC–235 maritime patrol aircraft. What is the supplier quoting as the per plane price as of

today?

Admiral ALLEN. If I could, I would like to answer that for the

record. We are looking at the first initial products that are being

rolled out. I am not sure we have come to a final price, once we

level out the production line. And we are in the process of integrating those aircraft into the fleet right now.

[Information received follows:]
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Mr. BOUSTANY. OK. The Coast Guard has repeatedly assured the

Committee that the assumption of the National Capital Region Air

Defense Mission will not reduce the Service’s search and rescue capability. How does the Coast Guard intend to acquire the additional HH–65s necessary to carry out this new mission?

Admiral ALLEN. The $62.4 million that are included in the fiscal

year 2007 request are there to fund five aircraft, the personnel to

support them and the operating funds. Those aircraft will be placed

at our air station in Atlantic City, New Jersey, and they will be rotated down with a crew to support them of about 40 here in Washington, D.C. In addition, there were funds reprogrammed within

the Department to the tune of $4 million to help us get started in

fiscal year 2006. We look forward to standing that operation up in

late September.

Mr. BOUSTANY. Thank you, Admiral. And one final question with

regard to unfunded priorities. In conjunction with fiscal year 2006,

the fiscal year 2006 budget request, the Coast Guard submitted a

list of unfunded priorities for the next fiscal year. The top priority

on the list was an additional $639 million for the Deepwater program.

What Deepwater-related items would be on the fiscal year 2007

unfunded priority list?

Admiral ALLEN. Well, as I mentioned earlier, things that might

be suitable for funding would be those that are already under production, what is not a requirements issue, we have fixed all the

technical issues associated with it. That would be the CASA 235

line. Once we have made a selection on a replacement patrol boat,

to fill a patrol boat gap, that would be a priority.

Also, we are pretty much stabilizing the national security cutter

design and that can move forward, too.

Mr. BOUSTANY. Admiral, thank you.

Those are all the questions I have at this time. We may have

some additional questions that we will pose in writing to you.

Mr. Filner, do you have anything, do you want to make any closing statements?

Mr. FILNER. No, thank you, Mr. Chairman.

Mr. BOUSTANY. Mr. Fortun ̃ o, do you have anything in addition to

add?

Mr. FORTUN ̃ O. No, thank you, Mr. Chairman.

Mr. BOUSTANY. Well, again, Admiral, we thank you again. Congratulations on assuming your new post as Commandant. We look

forward to working with you. We have a lot of confidence in what

you will bring to the Coast Guard activities as we move forward.

Thank you. The Committee stands adjourned.

[Whereupon, at 1:39 p.m., the subcommittee was adjourned.]
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