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Justice Dept. Probes, Congress Denounces Coast Guard Upgrade

By Renae Merle
Washington Post Staff Writer
Thursday, April 19, 2007

The Justice Department is investigating the Coast Guard's troubled modernization project, which has been beset by design flaws with its ships, delays and cost increases.

Lockheed Martin and Northrop Grumman, contractors on the project, were notified in December about the investigation, spokesmen for their joint venture said. The notice did not specify whether the inquiry was a civil or criminal investigation but said it would focus on communication and technology systems, a patrol boat program and development of ships known as national security cutters, they said.

The companies are cooperating with the inquiry, Troy Scully, a Lockheed spokesman said.

A Justice Department spokesman declined to comment.

In 2002, Northrop and Lockheed were awarded what has become a $24 billion, 25-year project to upgrade and replace hundreds of ships, helicopters and planes for the Coast Guard. The program has taken heavy criticism from Congress in recent months, including during a hearing yesterday on a portion of the project that involved converting 110-foot patrol boats into 123-foot vessels. The Coast Guard halted the conversions after noticing problems with hulls and cracks in decks. This week, the Coast Guard said the eight boats converted so far, for more than $80 million, could not be salvaged and would be scrapped.

Yesterday, former Lockheed employees testified before the House Transportation and Infrastructure Committee that the company and the Coast Guard ignored repeated warnings about the conversion project.

The Deepwater program has failed to meet the basic expectations of Congress and U.S. taxpayers, Rep. Elijah E. Cummings (D-Md.) said during the hearing. "We expect it to produce boats that float, planes that fly," he said.

The Coast Guard has recently worked to beef up oversight of the program and improve its reputation before Congress. The service said this week that Lockheed and Northrop's roles would be scaled back and that Coast Guard officials would take on more prominent roles in running the project.

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