New York Times
March 15, 2007
By David Stout
WASHINGTON, March 14 — The Coast Guard said Wednesday that it was canceling a contract with two military contractors to develop a vessel for a wide range of missions in the post-9/11 world and would instead have the Coast Guard’s own acquisition branch handle the project.
The deal that the Coast Guard pulled out of Wednesday, involving a joint venture of Lockheed Martin and Northrop Grumman, is to develop a 120- to 160-foot “fast-response cutter,” which is to be armed with .50-caliber machine guns, travel at 28 knots or more and be suitable for tasks ranging from patrols of fishing lanes to military operations.
Development of the cutter is part of the service’s $24 billion, 25-year modernization program, which is replacing or rebuilding most of the Coast Guard’s vessels, airplanes and helicopters. The program, called Deepwater, has already been hit with cost overruns and construction problems that have embarrassed the Coast Guard and stoked criticism from legislators.
Adm. Thad Allen, the Coast Guard commandant, said the decision to end the joint-venture contract was made to “achieve the best value for taxpayers and the government” and provide the Coast Guard with the best possible equipment.
The government can cancel or modify contracts far more easily than can parties to private contracts, and Lockheed Martin and Northrop Grumman are not precluded from other roles in the Deepwater program.
Margaret Mitchell-Jones, a spokeswoman for the contractors’ joint venture, said in a statement Wednesday night that the Coast Guard’s decision had always been an option under the terms of the original Deepwater contract. “We will continue to provide any support we can to our Coast Guard customer as they further refine their requirements moving forward,” she added.
Rear Adm. Gary Blore, executive officer in charge of the Deepwater program, said the decision Wednesday was “about business” and reflected the service’s growing self-sufficiency in acquiring the equipment it needed without a middle design layer. Admiral Blore said the service would soon seek proposals for a proven patrol boat design that would require “minimal modifications” to meet Coast Guard needs.
The first 12 fast-response cutters are expected to be delivered in the spring of 2010, the Coast Guard said. The service has been under increasing pressure from Capitol Hill as its efforts to remake itself have grown more expensive and been plagued by construction and mechanical problems.
“We need a comprehensive fix for Deepwater’s problems before any more taxpayer dollars go down the drain,” Senator Maria Cantwell, Democrat of Washington, said Wednesday. She is chairwoman of the Senate Commerce, Science and Transportation subcommittee that oversees the Coast Guard.
The subcommittee’s ranking Republican, Senator Olympia J. Snowe of Maine, expressed similar concerns.