Correction to This Article
A Dec. 8 article about the Coast Guard¿s fleet-modernization program incorrectly referred to Sen. Trent Lott (R-Miss.) as the incoming Senate minority leader. He will be the minority whip.
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Costly Fleet Update Falters

Deepwater, awarded in 2002 and modified in 2005, lays out an ambitious plan to modernize and greatly expand the Coast Guard's aging fleet of ships, planes and helicopters, equipping the fleet with more modern technology in the process. The aim is to carry out expanded homeland security missions, including offshore patrols, port protection, and vessel boarding and escorting duties, which the Coast Guard said will consume 68,500 operational hours a year for its Island cutters. In that time, Deepwater's cost grew from $17 billion to $24 billion.

The first problems appeared in 2004, when the patrol boat Matagorda was fleeing Hurricane Ivan off the coast of Florida. The Island-class ship had just undergone an $11 million upgrade that included extending its hull from 110 feet to 123 feet. Adm. Thomas H. Collins, then commandant of the Coast Guard, called it the "leading symbol of our service's transformation."

Soon after the hurricane, the Coast Guard found a six-inch crack in the ship's deck and buckling in its hull.

The Coast Guard abandoned plans to overhaul all 49 of its 110-foot boats. In 2005, the eight ships already converted were put on restrictive duty that prohibited them from operating in seas higher than eight feet.

Last month, the Coast Guard found new structural problems beneath the main engines of some ships -- a safety risk. All eight boats were pulled out of commission. Officials said they are now figuring out how to fix them, acknowledging that it will probably require more money.

To make matters worse, the proposed replacement ships for those cutters have also run into technical problems.

The 140-foot Fast Response Cutter is meant to be speedier and tougher than its predecessor, capable of operating in higher seas and for longer periods, and resupplying less often. Responding to a Coast Guard demand to fast-track up to 58 new cutters, contractors proposed a hull design using composite materials instead of steel, which they said would weigh less and be cheaper in the long run. The Coast Guard approved the approach despite having never used such material, a Coast Guard spokesman said.

But, according to a GAO report, concern soon emerged within the service about the form and design of the hull, which was to be built at a Gulfport, Miss., shipyard owned by Northrop Grumman's Ship Systems of Pascagoula, Miss. By February 2006, those concerns had been confirmed by an independent review, and the Coast Guard suspended work on the $3 billion program after spending $25 million.

The Coast Guard is now looking for another stopgap measure, perhaps even ordering an existing ship that would be deployed by 2010, agency officials said.

House Democrats have discussed exerting more control over Deepwater projects. But Gregg said the answer is more money to accelerate Deepwater, not less. "My view is, we're going to spend what it takes to get the nation up to speed," he said.

The program's problems have been compounded by the Coast Guard's hands-off management. The primary contractors, Bethesda-based Lockheed and Northrop Grumman of Los Angeles, have been given unusual authority to run the program through Integrated Coast Guard Systems, according to several government reports. The companies make many of the important decisions, including which ships and aircraft are needed and which subcontractors will design and build them, according to GAO and inspector general reports.

In August, the Homeland Security inspector general reported that the companies had not consistently followed information-technology testing procedures and that the Coast Guard had "limited influence" over some contractor decisions.

One contracting official told the inspector general that the Coast Guard, because of personnel shortages, struggles to review documents within the 30 days the contractors allow. By the time it reviews the documents, the companies may have moved ahead with their plans, leaving the agency to accept the work or try to change it at additional cost, the report said.

The Coast Guard said it is on a "learning curve."

"We continue to make the contract more rigorous," said Mary Elder, the Coast Guard's spokeswoman for the program. "The contractor is learning lessons, as are we, about how best to interact with each other."


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