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Government Short of Contracting Officers
Officials Struggle to Keep Pace With Rapidly Increasing Defense Spending

By Renae Merle
Washington Post Staff Writer
Thursday, July 5, 2007

For a year, the workload just kept growing, to the point it became nearly impossible.

Cathy Martindale, a government contracting officer, darted between meetings about three Coast Guard ship programs, negotiating prices for proposed changes and monitoring contractors' compliance with their deals.

Martindale's job was to track the projects at the heart of the Coast Guard's $24 billion modernization project, known as Deepwater. She attended meetings about design and engineering changes for the ships -- one of which, at 418 feet, is the largest the Coast Guard has ever built. When a dispute emerged about contract terms, Martindale mediated, interpreting the terms and ensuring that companies complied.

"So I am there, always on my toes, trying to pay attention to make sure the path they are heading down is consistent with the contract," Martindale said.

But the job required 12- to 14-hour workdays. She traveled 15 days a month. And when she found that she needed to be two places at once, she decided it was time to plead for help. "I realized there's not going to be light around the corner," she said. "I could work 24/7 and would not catch up."

Martindale, 43, is among a group of procurement officers struggling to keep pace with increasing demands to oversee billions of dollars in spending by the Pentagon and civilian agencies. Although she and her colleagues play pivotal roles in the government's operation, their plight has received little attention even as the government continues to expand its reliance on private companies and embarks on increasingly complicated programs .

The Defense Department's civilian acquisition workforce has shrunk by about 40 percent since the early 1990s and now has about 270,000 employees, according to Pentagon statistics and Government Accountability Office reports. Yet defense spending on service contracts increased 78 percent, to $151 billion, from 1996 to 2006, the reports said.

There are 7.5 million federal contractors, 1.5 million more than in 2002, without a corresponding increase in government officials to oversee them, said Paul C. Light, a public service professor at New York University.

"The acquisition workforce couldn't be in any more distress right now, and I know they are frustrated that they can't oversee the contracts that they have," Light said. "They are looking at the hunks of money flowing out but don't have the bodies to keep up."

The shortfall, which the government has relied largely on private contractors to fill, has contributed to cost overruns and delays, according to government reports and audits.

In the midst of the decline, the Army launched a modernization project but had "insufficient resources to staff, manage, and synchronize" the program, which includes a complex system for networking soldiers with each other, planes and tanks, the GAO found recently. The Army hired Boeing to manage the project, which has nearly doubled in cost to $163 billion.

This year, after a ship being built by Lockheed Martin went more than 50 percent over budget, the Navy acknowledged that it hadn't provided enough oversight and pledged to more than double the number of technical experts at the shipyard where the work is being done.

The shortfall has put private contractors in positions normally held by government employees. A 2006 Defense Department review of 60 major acquisition programs found that in 21 of them, contractors were doing acquisition work "closely associated with 'inherently governmental' functions," according to a Congressional Research Service report.

"You can debate about the proper size, but the question is whether the skills and abilities of the acquisition workforce are well-suited for the solutions we're pursuing right now," said Paul L. Francis, the GAO's director of acquisition and sourcing management. "I would say there is a mismatch. That is what happened with Deepwater. Once you pick a solution that you then can't manage, that is a mismatch."

For the Coast Guard, the shortfall was almost immediately apparent as it embarked on the Deepwater program. It had been nearly 30 years since the service had built a ship as large as the 418-foot National Security Cutter, and its expertise in managing a large contract had atrophied, Coast Guard officials acknowledged. "We made a decision not to wait until we had 'perfect' staffing to begin executing the program," said Mary Elder, a former Coast Guard spokeswoman. "The critical need to replace aging assets forced our hand."

The service pursued an overhaul of nearly its entire fleet, hiring two of the Pentagon's largest contractors, Lockheed Martin of Bethesda and Northrop Grumman, to design the Coast Guard of the future. The two firms formed a joint venture, Integrated Coast Guard Systems, which Coast Guard officials thought would require less oversight than a traditional contract because the joint venture would make many of its own decisions about the ships, planes and helicopters to be built or upgraded. The Coast Guard and the contractors moved into a high-rise in Rosslyn and set up working groups that would make many of the daily decisions.

But Coast Guard officials found that Lockheed and Northrop were making too many decisions on their own, with little government input. In addition, the Department of Homeland Security's inspector general noted in a report last year, the Coast Guard struggled to review documents within the 30 days the contractors allowed. Sometimes, when the service missed the deadline, Lockheed and Northrop may have moved ahead with their plans, leaving the Coast Guard to accept the work or try to change it at additional cost, the report said.

Martindale, who was part of the group that picked Lockheed and Northrop for the job, was appointed the contracting officer for three of Deepwater's highest-profile projects.

Her workload included a project to lengthen 49 of the Coast Guard's 110-foot patrol boats to 123 feet and another to build short-range boats called prosecutors. Her largest project was for the National Security Cutters. The projects totaled more than $1 billion, compared with the $50 million to $60 million projects Martindale had helped oversee in the past.

Ideally, Martindale's workload would have been split among three or four contracting experts, with each program getting an officer, industry experts said. Martindale says she would have preferred to supervise three contracting officers.

The situation came to a head when her attention was needed by two of the programs at the same time. The contractors were preparing to begin construction of the patrol boats and entering a critical phase of the design process for the National Security Cutters.

"In my mind, I couldn't figure out which one I needed to be at, because they had critically important things going on," Martindale said. "If you were going to catch a problem, this was the time it would happen."

Martindale went to her boss for help, and over the next year, the Coast Guard added more contracting officers. It split Martindale's job among several people and added new on-site technical experts to oversee the shipbuilding. She has since been promoted and no longer oversees the projects.

But the additions were insufficient. The Coast Guard still has a 15 to 24 percent vacancy rate for acquisition officials on the Deepwater program, despite an aggressive recruitment campaign that includes relocation bonuses. The changes also did not come soon enough to head off technical problems and cost increases that attracted attention on Capitol Hill and spurred a Justice Department investigation. A government audit found that the National Security Cutters had significant design flaws that would limit their ability to venture far from U.S. shores in search of drug smugglers and terrorists. The project to lengthen the 110-foot patrol boats was abandoned after cracks were discovered in the first eight boats modified. The Coast Guard wants a refund from Lockheed and Northrop.

"I think if there had been more dedicated contracting-officer time spent on that, some of the design issues could have been better dealt with from a contractual standpoint, and they would have been dealt with earlier," Martindale said of the patrol-boat program.

In April, the Coast Guard said it would take over leadership of the program from Lockheed and Northrop. It also said it would revamp its acquisition systems, consolidating operations and redirecting employees to fill necessary positions. It plans to hire 50 people by 2009, has hired a firm to study whether it needs more and is planning to hire another firm to teach courses on keeping costs down.

The Coast Guard acknowledged that it is embarking on a lengthy reorganization. "I don't think the Coast Guard, on a complex acquisition, will ever be able to totally assume systems acquisition responsibility," said Rear Adm. John P. Currier, the Coast Guard's assistant commandant for acquisition. "But what we do need to have is the competency to manage not only the systems integrators we hire, but the major contractors that we hire."

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