Commandant discusses Coast Guard's efforts to modernize.

• Author: Wright, Austin
• Position: Thad W. Allen

* Adm. Thad W. Allen, the commandant of the Coast Guard, said the service's $24.2 billion Deepwater acquisition program could end up being more expensive and take longer to complete than had been previously estimated.

A Government Accountability Office report from July says costs could increase by as much as $2.7 billion for the program, which aims to overhaul the Coast Guard's fleet by 2027.

In a wide-ranging interview, Allen discussed with National Defense the cost of the Deepwater program, funding challenges and plans to create a more sustainable Coast Guard. He also said that maintenance costs for aging ships have risen substantially in recent years and that the government's fiscal crisis will likely mean these ships have to remain in service longer than anticipated.

"It's very difficult to deal with increased maintenance costs to our legacy fleet and build a new class of cutters at the same time," he said. "At some point we're going to be forced to decommission these ships because we can't afford to operate them."

The Coast Guard has now rolled what used to be 15 Deepwater programs into one acquisition directorate, which also oversees seven other major programs. Deepwater's flagship project, deploying the new national security cutters, reached a milestone earlier this month. The service accepted the second of eight new ships--a 418-foot cutter named the Waesche.

'The third cutter, the Stratton, will be launched here very shortly," Allen said. "We're dealing with a very complex world with transnational threats, and the demand for our services has never been greater." It's possible, he added, that these projects could extend beyond the original 2027 ending date.

Two-and-a-half years ago, Coast Guard officials scrapped Deepwater's lead contractor, a Lockheed Martin-Northrop Grumman consortium, and began transferring management of the program to its own acquisition shop. GAO said a higher price tag for Deepwater is likely because the contractor team may have underestimated the cost. By bringing the program in-house, the Coast Guard probably will be able to come up with a more realistic--and maybe higher--cost estimate, GAO said. Revised cost and timeline figures will be released in the next six to 12 months, Allen said.

"There used to be a rollup estimate for the entire system, and that included all the cutters, aircraft and sensors that we were buying," he said. "We're now taking each component ... apart, and we're doing an acquisition...