Cost of Coast Guard's Deepwater Project Rises Again

By Renae Merle
Washington Post Staff Writer
Thursday, August 9, 2007

The Coast Guard said yesterday that two ships key to its modernization efforts are now expected to cost a combined $1.1 billion, an increase of about $255 million that will pay for extending their lifespans and making other improvements.

The 400-foot ships, known as national security cutters, are central to the Coast Guard's Deepwater program, a $24 billion effort to modernize and replace its ships, helicopters and planes. Congress has criticized the program for cost increases, technical and design flaws, and the decision-making power allowed to the contractors, Lockheed Martin of Bethesda and Northrop Grumman of Los Angeles. In a January report, the Department of Homeland Security's inspector general said the cutters had design flaws.

The first ship, which is about 90 percent complete, is now expected to cost $640 million, and the second will cost about $496 million, according to the Coast Guard.

About $70 million of the increase will go to address what technical experts said were design flaws in the vessels that would probably result in "fatigue cracks," leading to higher maintenance costs and shortening the ships' life. Without the changes, the vessels may experience structural fatigue before the end of their 30-year lifespan, the Coast Guard has said.

The rest of the increase will help repair damages at Northrop's New Orleans shipyard caused by Hurricane Katrina, pay for delays caused by a Northrop strike last year and adapt the vessels to the extra duties the Coast Guard took on after the Sept. 11, 2001, attacks, the Coast Guard said.

The Coast Guard expects to buy eight of the ships and said the third one is now expected to cost $500 million. "The contract award for the third national security cutter is a significant milestone for the Coast Guard," Rear Adm. Gary T. Blore, the Coast Guard's commandant for acquisition, said in a statement.

The first ship is meeting its goals and is expected to begin sea trials in October, said George Kardulias, a Coast Guard spokesman. "They successfully tested the engine on [the ship] yesterday," he said. "From a sailor's perspective, it is very exciting."

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