Coasties Stripped of Acquisition Power

By Colin Clark Friday, October 31st, 2008 8:59 am
Posted in Homeland Security, Naval, Policy

The Department of Homeland Security has stripped acquisition decision authority from the Coast Guard in the wake of the service’s disastrous management of the Deepwater program. The Coast Guard joins the Air Force and National Reconnaissance Office in having decision authority stripped from it. The Air Force lost decision authority over all space programs in March 2005 and is unlikely to regain it any time soon. The NRO was stripped of decision authority over the BASIC satellite program early this year. The NRO is granted decision authority program by program and that authority is regularly reviewed.

According to an Oct. 28 Coast Guard press statement, “the rescission of acquisition decision authority does not imply removal of Coast Guard management of major acquisition projects.” But it really does mean the Coast Guard has lost the fundamental legal and policy authority to allow a program to move from one acquisition milestone to another since that is what constitutes the milestone decision authority is.

As the release notes, Coast Guard “major projects are reviewed and approved by DHS at each prescribed decision milestone. Prior to DHS approval to proceed toward the next milestone, the Coast Guard must demonstrate the project is properly progressing by satisfying milestone and acquisition plan criteria.”

Appropriations for the Deepwater Program totaled over $4 billion as of fiscal year 2008. Deepwater is intended to replace or modernize 15 major classes of Coast Guard assets, five each of vessels and aircraft, and five other projects, including command, control, communications, computers, intelligence, surveillance, and reconnaissance systems. A joint venture of Lockheed Martin and Northrop Grumman serving as lead system integrator was awarded the Deepwater contract in 2002.

The new arrangement should help DHS get the Coast Guard back on track, according to Robbin Laird, a defense consultant who has worked with the Coast Guard.

“With the coming of the new administration funding of appropriate homeland security functions is crucial. With this transfer of authority, DHS will be in a position to shape the future of the USCG and its approach to the future. The Deepwater C4ISR remains central to the new missions of the USCG and have been performed well; uncertainity about ship acquisitions have created the problem,” Laird said.

One new approach might be for the DSH to to “work with the Navy to acquire common littoral ships for the littoral missions. What remains important is to keep the commonality of systems to work with civilian, commercial, law enforcement and military authorities in the US and worldwide in the C4ISR domain. Hopefully, DHS will continue to re-enforce commonality in this area with other US agencies and global agencies. What began as a reform under Admiral Currier has now become the DHS ownership of USCG modernization.”

One important issue that DHS and the Coast Guard need to address is what will happen to the roughly 1,000 Coast Guard acquisition personnel. In particular, Laird noted that the question of “who will they really report to” needs to be answered.

The Government Accountability Office recommended stripping the Coast Guard of this authority in June. And language requiring the action, “due to the Coast Guard’s failure to adequately oversee the Deepwater program,” was included in the recently passed consolidated appropriations bill and its accompanying report.

The Coast Guard statement tries to put the best face on the service’s progress, noting the the GAO report says they have “begun to follow the disciplined, project management framework of its Major Systems Acquisition Manual (MSAM), which requires documentation and high-level executive approval of decisions at key points in a program’s life cycle.” But it you read the next few sentences, you get a clear picture of just why decision authority was stripped from the service. “But the consequences of not following this approach in the past are now evident, as Deepwater assets have been delivered without a determination of whether their planned capabilities would meet mission needs. The MSAM process currently allows limited initial production to proceed before the majority of design activities have been completed. In addition, a disconnect between MSAM requirements and current practice exists because DHS had earlier delegated to the Coast Guard all Deepwater acquisition decisions, resulting in little departmental oversight.”

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	Anon October 31st, 2008 at 2:33 pm This blog is horribly researched and written! Doesn’t even have the right name of the Commandant and significantly overstates the significance of this change. The Coast Guard will still manage its acquisitions, but a degree of coordination with DHS that was essentially already being done informally will now be formalized.
	Thomas Jackson November 1st, 2008 at 1:34 pm What interest me is that so many people want to show their support for Coast Guard Acquisition, but remain anonymous. Coast Guard has never punished anyone for supporting their cause, programs or the Commandant. However, those who have spoken out against Coast Guard Acquisition or the debacle inside the Coast Guard Civil Rights have been punished relentlessly and several fired, and a dozen more forced to resign. Anyway you look at it, Coast Guard Acquisition Authority has been pulled by order of the U.S. Congress. Admiral Thad Allen’s leadership has been impeached to a certain degree and it’s doubtful he’ll recover from that.
	RFL November 1st, 2008 at 1:58 pm Whoever is Anon should remain so; Admiral Currier was the predecessor of Admiral Blore; he was the Admiral in charge of Acquisition; after all Admiral Allen is not in charge of every activity in the USCG; and the change is a significant recognition of the evolution of acquisition authority with the USCG itself; the Blueprint for Acquisition certainly anticipated better intergration with DHS; but that is not what has happened here.
	M-8825 November 6th, 2008 at 3:47 am WHAT !!! I thought the US was suppose to be proactive and reactive towards combating terrorism. Then why is the US setting itself up for similar 9/11 related events?
	Anon November 6th, 2008 at 4:40 am Well this all sounds familiar, and the U.S. Navy and thier high year tenure putting out good sailors, pretty soon, the U.S will not even have a fighting force to defend itself.
	Scott November 6th, 2008 at 8:18 am It is amazing that anyone would trust the incompetents at DHS with the security of this country. It is the amateur hour over there with wanna be’s having taken over the investigative power. Our nation has been placed in eril by adding yet another level of beuracratic intanglements in the way of those who do the job. Considering that this nightmare was a creation of the last administration I guess we do get the gov’t we deserve. Hopefully the new administration will be about getting the job done and less about controlling everyeone wit the petty adolescent bullying practices. Left in the hands of DHS our enemies will win time after time. God help the United States, mostly from itself.
	Swoop November 6th, 2008 at 10:09 am You know it seems to me that our militarys are loosing more and more power and privitized contractors are gaining more and more power over our military I think its bullshit. I dont like contractors telling our military what to do while our polititions sit behind a desk taking bribe moneys for their piggy banks. Its funny to me that a congress person can hide 100k dollars in his freezer, get busted for it and keep his job while if I owe the irs 4 dollars their gonna put a lean on my house. this businees of letting privitzed companys have power over our military is bad business and trust me most ohholand security is outsoursed to private comapanys. Just ask. Its true and its dangerous.
	anthony bauwens November 6th, 2008 at 10:17 am Maybe we are getting a little too many contracters that take military jobs?
	BungeeBob November 6th, 2008 at 10:20 am “You get what you pay for.” As the 1950s ads for Yuban proclaimed. The leadership from the President(s), Congress, SECDEF, Service commanders, on down through the executive chain reward corruption and cowardice while punishing competence compounded by integrity. If you have integrity, but are not sufficiently competent to unearth corruption, they have no problem and you are eligible for promotion. If you have competence and can unearth the collusion and corruption, but are willing to participate in the sham (or at least look the other way), you are eligible for promotion. However, If you are have the talent to discern corruption in contractors or the agency and have the integrity to report it, you are a danger to the leadership chain and must be removed or driven out. At a major DoD agency, I found a contractor submitting false test reports that were complete fabrications as no testing had been done. The program civilian deputy whitewashed it. A number of other items occurred including executive decisions that directly passed hundreds of thousands to the company and overriding the entire program team findings. When I submitted the FWA (Fraud, Waste, and Abuse) form at the local major center, it mysteriously was lost. (Note: back then FWA forms were in nice wood cases throughout the halls. Now none are around – get the scenario?) I turned the FWA in to the DoD. A week or so later, an investigator called and asked me to bring over the information. I took about a file drawer of papers to the agent, and we spent the afternoon going over the details. At the end of the interview, the agent told me that this was the best case he had ever seen. Over the next few years, his workload kept getting reprioritized, and then the case was shifted around. Finally I received a letter signed by a Colonel at HQ AFOSI claiming they had taken several actions. Based on these actions they were not gong to take any action. When I used my resources to check on these, I found that all those I could check on had not been taken. The allegations of action were pure fabrications that were generated to get the executive off the hook. What do you do when the OSI is corrupt? Later, I understand that DCAA found discrepancies at the contractor’s leading to their disbarment. In the meantime, I was subjected to false disciplinary actions in an attempt to drive me from the civil service. After over a year and escalation all the way to the SECAF level the Colonel in charge of $40 billion annual procurement, his senior civilian deputy, and another director announced their retirements all in the same week. Soon after, the SECAF sent me a letter dismissing the entire matter as the subjects of the grievance were leaving the service. On the way out they steered a support contract to a company that retained their services. Instead of being allowed to retire, there was sufficient proof to incarcerate at least one of them. Afterwards, I would get calls thanking me for turning in FWAs that I had no knowledge of because they figured I was the only one with the guts to expose corruption. Others, even executives, would come to me with FWAs to turn in because they were afraid to do it and figured I had nothing to lose. I even had one person who sat on a promotion panel that interviewed me later tell me that the panel had been told they could promote “anybody but Bob.” Finally, I ended up on a half-billion annually FWA program required by Congress in order to pass taxpayer dollars to a major defense contractor. I was under constant pressure to omit findings or turn in false reports. This constant pressure was a major factor in taking an early retirement. As a support contractor, I later found that Bell was submitting false documents and making false statements to the NAVAIR on the V-22 Return To Flight program undefinitized contract. I submitted the irrefutable proof to the cost team civil servants that I supported. They promptly got rid of my services. Other program functions wanted my talents, but all requests for service that bore my name never came back out of the cost review. I then supported a MRRS radar program at Quantico charged with finalizing a draft cost analysis where the person who had done the report had left MCRI before completing the report. In the process, I found the draft report contained errors that almost tripled the analysis of costs. The person who had done the draft had deliberately concealed the problem. (Manual manipulation of the data had been required to conceal the issue. It could not have been done by accident.) When I did a proper analysis and submitted it to management, I was criticized for not relating the new number to the draft numbers. I replied that I do not track back to false numbers, but that in the report and presentations, I would advise the Marines that I had found errors in the draft analysis and present the real analysis. I was immediately removed from the program. Later, I obtained a copy of the report almost doubling my analysis in order to track the new number to the phony ones. These are only a few of the highlights of my career. My career was ended because no contractor or agency dares hire someone who can find what they do not know or want to hide. I never set out to look for these, but just encountered them along the way. To the issue at hand: I then spent almost two years supporting Coast Guard procurement with a company that actually had values. I have seen the problems and heard discussions. When Coast Guard personnel tried to rein in Lockheed Martin and Northrop Grumman they were run over by the awesome political power of these companies. Even Thad Allen did not have the power to go head to head against the political might of the corrupt contractor. Back to the opening quote and “Actions speak louder than words.” Congress, the Senate, the Executive Branch, DHS and DOD leadership all use words about procurement and program integrity but ACT loudly to promote and protect corrupt contractors and punish those who take to heart their oath to protect the USA and report wrong-doing. The problem is our leadership.
	Nagirrah November 6th, 2008 at 10:25 am Why not get the Navy to look this over? Or at least appoint a board of former Naval personnel to kick some sense into this program? DHS is still figuring out how to do its own business - and procurement is a bigger mess there than almost anywhere in the government. You’re going from Stevie Wonder to Hellen Keller here.
	NEF November 6th, 2008 at 10:25 am You know, this is really sad. What I don’t understand is who is behind making these types of decisions , the names behind the decisions..It seems like we are starting to reverse everything we were ever taught. It is just so sad to see this coming, but the time is drawing closer for all.
	U-2 Reconnaissance November 6th, 2008 at 11:12 am USCG shallow water sailors. Is about time somebody tell them to backoff and let the pros handle this issues. Excellent desicion! Your are not capable to be in DOD or DHS. Go back to DOT and secure the pools of our nation. Your fleet is aging as the same way your brain. And your air fleet is flow by people with skirts. What a waste of tax payer money.
	Mark Coleman November 6th, 2008 at 11:36 am “USCG shallow water sailors. Is about time somebody tell them to backoff and let the pros handle this issues’ I agree 100%. The USCG needs to be put back in their small box.
	Reader Bob November 6th, 2008 at 11:47 am Does one person have the answer to this multi-service problem? I doubt it as each service is unique in its requirements and/or needs. How they meet these requirements depends on their mission…not some mental giant sitting at a desk in some building miles away from where the mission is defined or managed. That said…Lets look at an idea please. It is called firm fixed pricing. If the Service needs a ship, they give the requirements to the builder (s) and ask, what will it cost? When can you deliver it? The builder says it will cost “X” amount and it will take 5 years to delivery. The service agrees, contract is signed. Progress payments are to the builder when predetermined milestones are met. If they are missed, they are no paid this payment until they do make it AND they pay a penalty for missing it. If there are cost overruns, the builder eats these costs. However, if the Service requests changes be made that effects cost or schedule, the contract is adjusted (delivery time) and more money is provided to cover these changes. Progress payments can not exceed more than 50% of the total cost. After delivery, the Service takes the ship for a series of trial runs to validate the ship will meet the contractual requirements. If it does not or if there are problems, final payment is withheld until it meets the requirements and penalties are paid by the builder for not meeting the terms of delivery. Another incentive to the builder to do it right and on time is that each time there is a payment with held, they loose the interest on the progress payment that they would realize. If the payment is in the millions of dollars, the interest on this money is significant, and they lose it. They can not draw interest until the money changes hands and it is in the builder’s account. When you go buy a car or truck you don’t give up front money to the car maker. You pick out what you want, drive it and agree to a price, pay for it and it is yours. Simple and direct. The same approach can be taken when buying anything for the military. The services acquisition system has become a monster that has multi-heads and can not be controlled or killed easily. They are their own worst enemy.
	LITTLE BOATS, BIG.... November 6th, 2008 at 11:47 am U-2, don’t you know Coasties are the reason Navy kids look so good. Don’t be jealous b/c the CG builds leaders and the Navy makes disgruntled latrine scrubbers. There are more ex-Navy guys in the CG then any other service. Squids are eating their young to get into the CG, at least the smart ones.
	BobGray1 November 6th, 2008 at 12:25 pm The whole problem began when the USCG was moved under the DHS. And for you Navy pukes - a Coastie does more in 4 hours than an anchor clanker or Navy wing wiper does in 24!
	MyBloodWasNavyRich November 6th, 2008 at 12:26 pm Many a Navy mate have not worked for the Navy since 1994 because political people used subcontracting civilian associates. i believe some creature was once head of Coast Guard Intelligence and then when young Bush took over America; this creature became Homeland Security. i agree with Reader Bob on this proficiency pay and cost over run of 50 % max contractor acquisitions programs. its a bit out of hand. The Navy Coast Guard or engineering authorities of the Armed Forces watch as contractors rip into the budget and supply ships service telecom computers weapons satellites bases aircraft motor transport medical services and medical equipment all sorts of logistics and supply. The engineering department of the military Navy Coast Guard Air Force had engineers experienced subsurface surface and air former commanding officers working the drawing boards designing our future Navy and Air Force. You could see it; the possibility; if the powers of the Navy/Air Force were striped from acquisitions; the contractors could run up the bill decide what is cost effective but not cost efficient to deliver the goods. When our Navy was being gathered up and contracted out to corporations; i told one of the big cheese fellas doing this job for the Navy; that eventually the contractors would take over have ownership of the keys, the trade secrets, the skill sets, loyalty, all sorts of security clearances in question and have the military services over a barrel. Warned him; later in the future; you would have lost all your DOD civil service back bone and military acquisitions backbone and then the civilian contractors will have ya. As the years go by the contractors will hike up the cost. He told me the truth; ” People are hell.” We continued to eat our soup at the Officers Club.
	CB November 6th, 2008 at 12:44 pm To U-2 Reconnaissance and Mr. Mark Coleman: If you are going to post article responses, you might as well make them intelligent. The USCG exists worldwide (in blue water as well!) and has diverse missions to accomplish: drug interdiction, fisheries enforement, maritime rescue, port security AND protecting our Navy in the Persian Gulf and throughout US ports. If you (the pros) would like to risk your lives to tackle all these missions with 40,000 people and a limited budget, by all means stand up! I will agree that their acquisition programs obviously needed more oversight as the contractors and their companies ran amuck with the money. Deepwater looked great on paper, but so many who are in that office are not ship handlers and are not aware of what the current needs are in the fleet. Advise from ship handlers was solicited but never taken seriously (hence the outcome of the failed refit of the 110′ patrol boats). The USCG would definitely benefit from looking at the ship plans that the Navy has already spent millions on and using the appropriate ones. They are tried and tested and could actually save them money in the long run.
	therabbit November 6th, 2008 at 12:48 pm The bigger the bureaucracy; the worse acquisition gets. So you put acquisition under DHS; wait for a bigger mess.
	iggle November 6th, 2008 at 2:15 pm therabbit has it right. Give it to DHS to make the problem worse. The only thing worse would be to give it to the “shipbuilding professionals” at the Navy. The 6 years ago the CG wrote a bad contract based on acquisition reform - the Navy writes bad contracts every day based on no reform. The over-runs aren’t bigger in the CG than the Navy - look at the LCS. GAO reports about 50-100% overrun projects all the time, and there’s only been one from the CG. CG acquisitions has to improve, but it is. They’ve gone back to some of the more-proven, less-trusting ways of doing business, and the new patrol boat contract will be a success - whether Bollinger builds it or Marinette’s protest is successful. CB - the shiphandlers change their mind every week, but never wanted the 123. That has nothing to do with the 123 failure. And if the CG gets a chance to look at the LCS, it’ll find it just as expensive as the NSC, faster, but built for the Navy (not the CG). But, I agree that the CG needs to look at the other available ships out there for future acquisitions, and that’s what they just did with the patrol boats, and are doing with the mid-level cutters (opc). Give it time!
	Justin Richards November 6th, 2008 at 2:41 pm Mr. Coleman. You must be a Navy man sir. Shallow water…There is a reason your in the Navy..You could not pass the entrance exam for the Coast Guard..By the was how is your wife and my kids?
	griffbuff52 November 6th, 2008 at 3:06 pm I agree with CB. Don’t post something unintelligible, it does not make you sound like a “pro”! As far as contractors taking military jobs, that’s asinine. There are only so many military billets on the books and if a military service needs more people or more expertise that is not available through current manning, the military service has to get contractor support to fill those gaps. I have to agree, though that the systems acquisition contractors working with the Coast Guard were given a blank check and there was very little government oversight at the beginning. That has changed. Despite the report and recommendation by the GAO, the Coast Guard has made huge improvements in acquisition management structure, acquisition personnel levels, acquisition experience levels, and acquisition training. Coast Guard acquisition program management is ensuring that the best systems for the best price with the right support are being acquired.
	U2 reconnassaince November 6th, 2008 at 5:28 pm Tbe CG was just another agency for draft dodgers during Viet Nam and that’s the best thing I can say for them…How many times have I seen them bootleg FLIR and radar images from legitimate law enforcement agencies. And as far as Richard producing kids from Mr. Coleman’s wife…it’s the only way homosexual’s can reproduce…The CG was the primary reason for the “don’t ask don’t tell policy”. Richard..put on your leather helmet, get on the short bus and go home
	U2 reconnassaince November 6th, 2008 at 5:37 pm Just for the record! I am not Navy neither CG. Ps. I just watch everything from up high….
	Mac November 6th, 2008 at 5:51 pm Obama will only make things worse.
	duaneluke November 6th, 2008 at 7:26 pm This is another put down for the people that know what there needs are to get the job done and keep us safe
	John E. November 6th, 2008 at 9:43 pm You are only allowed to get something significant done once during your entire career. After that higher powers will insure that never happens again. It’s the American way. Suck up a paycheck and watch the clock, it’s what the other 99% are doing.
	becks November 7th, 2008 at 5:44 am The rise in private contracting seems a slippery slope where corporations acquire more influence and strategic decisions are profit driven..my country vs my corporation.
	P. Lamm November 8th, 2008 at 5:19 am Posse Comitatus Act of 1878 prohibits our military from conducting police duties to protect our nation. By letting the CG “guard our pools” we arre leaving our coastline undefended. The Squids can’t do it because it’s illegal.
	Mark Bigelow November 8th, 2008 at 8:04 am This predates DHS; anyone remember the mess we got from the 1980’s? The HU-25 jet, the HH-65 helicopter and the 270′ WMEC cutters? They did not do what they were supposed to do, did not work as well as the equipment they replaced and required hundreds of millions of dollars in upgrades and repairs to keep in the fleet. The problem is the admirals and civilian leaders decide what they want from the beginning, the days of competition from contractors to provide the best product are gone. The few defense contractors such as Northrup-Grumman and General Dynamics are in bed with the military leadership and they work together to maximise profits (and to make sure retiring flag officers get well paid jobs) rather than provide our forces with the best gear.
	Alex.Vasiliu November 8th, 2008 at 3:55 pm I am a member of the USCG Auxiliary and I worked in another country on Acceptance testing for large ships The idea to transfer decision power for ship building programms to AN AGENCY WITH NO EXPERTISE IN HANDLING SHIPS is equivalent to the Air Force letting the State Department decide what capabilities we should have in the F22 fighter programm. Maybe clearer minds will prevail before the mayhem from Tihuana spills on the Los Angeles streets
	U2 reconnassaince November 8th, 2008 at 4:07 pm P. Lamn! Please get out of the box. CG have to piggyback on other real law enforcement to do their job. Now theY “want” to do overseas ops. GIVE ME A BREAK. DOD can do the job if simple mind people get out of the way. Let passed this Act bull… and take all our resources and putted together for the benefic of our nation. Is a shame to the CG when I see from up high that you guys are not even close to the interdiction area and been so low, you claim stats… What low can you go!
	Chaff dispencer November 9th, 2008 at 12:58 pm Basic power grab by DHS but the Gruman folks knew they were taking the USCG for a ride at the start. I watched it happen from afar. Lots of good people working to fix this issue. Again ; DHS has its hands full with managing acqusition permissions for NRO, AF and now USCG. There must be lots of job openings at DHS.
	U-2 Reconnaissance November 10th, 2008 at 10:59 am We have excellent federal law enforcement that guard our coast better that USCG. The mentality of “deterrence” doesn’t work! You catch bad guys, sent them to jail for 30yrs and enforce all the weight of the LAW. And then we talk. Putting a big, slow cutter in front of the bad guy and the bad guys making loop around the cutter. That doesn’t cut it. But obviously is easer to claim stats that way.
	chris November 11th, 2008 at 8:33 pm why is the CG trying to go deepwater and the navy shoreline at the same time anyway? too many roosters in the henhouse.
	Not So Old Salt November 13th, 2008 at 1:08 am The trends of the 90s played out here in the 21st century. Industry convinced the leadership that they could do everything better, faster and cheaper. So we let the “old salts” who knew how to build ships retire and let the hot shots of industry take over thought leadership. Letting an integrator take over every aspect of recapatilizing the CG was the capstone of a decade of knowledge draining. Now there is scant few left in the Navy or the USCG with the waterfront know how to keep the contractor’s honest during ship construction or any other major production effort. Look at NG’s LPD 17 lube oil system failures in Bahrain. That ship is going to be a dock queen lasting half it’s planned service life. The decisions of the 90s are now manifesting themselves in the present. We turned over the keys to industry so we are going to continue to pay for these past sins.
	Gman November 27th, 2008 at 9:59 pm U2recon - Are you smoking crack? Seriously?

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