Coast Guard Moving Forward with Deepwater as SI

From the Acquisition Corner

In a continued effort to do more with less, a recent report by the Government Accountability Office (GAO) discusses the efforts by the U.S. Coast Guard (USCG) since assuming the role of systems integrator (SI) for the overall Deepwater Program. Admiral Thad Allen has done a tremendous job since assuming his role as Commandant of the USCG, and the GAO report illustrates both the challenges and successes the USCG is having since assuming the SI role, previously held by Northrop Grumman/Lockheed Martin owned Integrated Coast Guard Systems (ICGS). Understanding that the previous failures in Deepwater were a function of poor management by both ICGS and the USCG, the USCG began its work as the SI by reducing scope, and assigning these functions to Coast Guard stakeholders as significant cost overruns could not be sustained with an existing scope of such magnitude. Further, the USCG has undertaken a fundamental reassessment of the capabilities, number, and mix of assets needed, including finding ways to increase competition and cost reductions by allowing future work on individual assets to be potentially bid competitively outside of the existing contract held with ICGS.

One reason the USCG hired an SI contractor to begin with was in part because of the acknowledgement that it lacked the experience and depth in workforce to manage the acquisition internally. Any chance of success to develop and manage such a vast program such as Deepwater clearly needed outside contractor engagement. Further complicating the issue is the same issue across the federal government; continuing challenges hiring and retaining qualified acquisition personnel with subsequent risks to the successful execution of its acquisition programs. Also like most of the federal government, retooling the acquisition workforce continues in parallel with increased reliance on support contractors to complete the acquisition mission.

The USCG is definitely on the right path, but persistent challenges remain as reported by GAO. Improvements have been made to create a disciplined management process in line with the USCG Major Systems Acquisition Manual (MSAM), but the goal of aligning all Deepwater assets by the end of March 2009 was not reached. One example cited in the report was that operational requirements documents and test plans are not in place for assets with contracts or orders recently awarded (such as the Fast Response Cutter and C4ISR) or in production. This lack of oversight will clearly hinder reaching cost, schedule, and performance objectives.

Budgetary issues are also on the front burner in taking over its programs, and creating budgets and cost schedules on realistic estimates. USCG officials stated the previous baseline determined by ICGS did not reflect a traditional cost estimate, but rather the anticipated contract costs as determined by ICGS. As the USCG continues to develop its own cost baselines, it has become apparent that costs will increase, to the tune of $2.7 billion. I just wrote about the need to create realistic cost estimates, so here is more evidence substantiating that position. As more cost baselines are developed and approved, the USCG can further see the underestimates created by ICGS, and is expecting likely cost growth in its assets. Further revealing how ICGS was managing the program, updates to the asset baselines indicate schedule slips for several of the assets, in addition to finding out that details of their budget submission to Congress at the asset level did not include estimates of total costs and total numbers of assets procured. Although USCG took the GAO recommendations under advisement as they feel they are complying, one area that can be improved is collaboration on major acquisition programs with the Department of Defense (DoD), specifically with budget submission since DoD acquires similar systems and must follow similar processes. Perhaps another example of where social media tools to collaborate and transfer knowledge can be beneficial to improve operations at both agencies.

The USCG is making tremendous strides in how it manages its assets and the Deepwater program, with one of the overarching issues being the continuing need to strengthen its acquisition workforce. The continued application and improvement of the disciplined management processes inherent in the MSAM will also be beneficial to ensure that Deepwater assets are designed and delivered to meet mission needs. Managing Deepwater is not an easy business, but continued oversight and risk mitigation by the USCG will hopefully help continued improvements in managing the largest acquisition ever undertaken by the agency.