Righting the ship: Coast Guard may face rough seas as it takes control of deepwater.

• Author: Magnuson, Stew
• Position: Company overview

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A JUSTICE DEPARTMENT INVESTIGATION, A scathing 60 Minutes report, unsympathetic lawmakers and a stack of negative inspector general reports have marked the Coast Guard's Integrated Deepwater Systems program the last two years.

Coast Guard and industry officials believe they have some good news to report, and look forward to the day when the mix of 11 different ships, boats, aircraft--and the information technology backbone that ties it all together--starts delivering what they promised when the program was first conceived 11 years ago.

Despite the clouds hovering over the 25-year, $24.2 billion program, progress is being made, officials told National Defense. The first of the National Security Cutters is set for delivery next year. The aviation systems are on track and a "good news" story that hasn't been told, they added.

"It's going to be difficult to counter the bad publicity we've had despite the best efforts of our communications team," admitted J. Rocco Tomonelli, director of Coast Guard business development at Northrop Grumman.

Integrated Coast Guard Systems--the Northrop Grumman and Lockheed Martin consortium responsible for running the program until management was taken away from it and put in the hands of senior Coast Guard leadership--has borne the brunt of the criticism.

The Justice Department probe into a failed attempt to convert aging cutters into 123-foot boats threatens more bad headlines before the program can get out from under its "troubled" status. Nevertheless, The Coast Guard in July extended ICGS' contract for an additional 44 months.

The program's shortcomings have largely been blamed on a now discredited movement to allow contractors the leeway to manage and oversee defense acquisition programs. The consensus among government investigative arms is that the Coast Guard was ill-prepared to provide oversight as the mission requirements for the program changed and grew after 9/11. It simply did not have the bureaucracy required to keep tabs on such a complex and large integrated system with multiple programs.

Reasserting its oversight duties is an important and necessary step for the Coast Guard, defense experts agreed. However, that might be easier said than done.

"Conceptually, they've got all the right answers," said James Jay Carafano, assistant director of the Heritage Foundation. "The question is, 'do you have the horses to run the wagon?'" Key to the agency's efforts will be hiring the technocrats, inspectors and contract specialists needed to oversee the program, said defense experts.

"The Coast Guard commandant needs to spend about 1 percent of his time worrying about how ... integration is being done by people in the Coast Guard, and 99 percent of his time hiring the people to do the job," said Carafano.

There is no longer a large pool of qualified personnel for the service to draw from, said retired Rear Adm. Joe Carnevale, senior defense advisor to the Shipbuilders Council of America.

He blamed the Navy policies of the 1990s when it decided to shrink its own acquisition workforce. Not only did it lose a new generation of shipbuilding specialists who went on to choose other careers, but they also asked senior, more experienced personnel to retire early.

The Coast Guard has "got to have a sufficient staff of contracting, technical and quality assurance people within the government to make sure that these contracts stay on cost and schedule and provide the quality that they're asking for," Carnevale said.

The next generation of such specialists can be recruited, but it will be impossible to replace the cadre of experienced workers who moved on to other professions or retired, he added.

The Coast Guard finds itself competing for qualified staff with Naval Sea Systems Command, which is now trying to reverse its own misguided hiring and firing policies of the past, Carnevale said. The two organizations, however...