Efforts to add, upgrade ships have seen major cost overruns
PASCAGOULA, Miss. – Nearly a decade into a 25-year, $24.2 billion overhaul intended to add or upgrade more than 250 vessels to its aging fleet, the Coast Guard has two new ships to show after spending $7 billion-plus.
Now it’s facing an uphill battle persuading a budget-conscious Congress to keep pouring money into a project plagued by management problems and cost overruns.
“Congress wants to work with the Coast Guard to meet their needs for its myriad missions, but will not simply supply a blank check,” said GOP Rep. Frank LoBiondo of New Jersey, chairman of the House Transportation and Infrastructure subcommittee that oversees the Coast Guard.
By now the Coast Guard was supposed to have at least eight new ships – four 418-foot national security cutters and four 154-foot cutters – either in the water or about to be delivered. Instead it has only two of the largest ships already in use, and two on the way.
LoBiondo and others in Congress, including Rep. Bennie Thompson, the top Democrat on the House Homeland Security Committee, repeatedly have questioned the progress and scope of the fleet overhaul.
Government auditors have concluded that the Coast Guard still doesn’t know the answers to those questions.
The two completed ships and two more under production have cost about $2 billion. Much of the remaining $5 billion has been spent on new contracts for at least 10 more ships and improvements to more than two dozen older ships. The Coast Guard also used some of the money to buy and upgrade aircraft, though vessels were the program’s primary focus.
The modernization effort that began in earnest in 2002 was designed to replace ships from World War II, Korea and Vietnam. But within the first year, as Congress started to dole out billions of dollars for homeland security concerns after the Sept. 11 attacks, Coast Guard officials realized their blueprint wasn’t what was needed.
“I’ll be the first to admit, we weren’t prepared to start spending this money and supervising a project this big,” said Coast Guard Commandant Adm. Robert Papp.
Budget-cutting in the 1990s had left the service with few experts on buying new ships and other equipment. So the Coast Guard turned the project over to a joint venture between Northrop Grumman and Lockheed Martin
The program, known as Deepwater, appeared in trouble almost from the beginning. Early government audits criticized Coast Guard officials for a lack of oversight, which invariably led to early delays and cost increases. “In essence the contractors were overseeing themselves,” said Thompson, D-Miss.
In the early 2000s, the Coast Guard awarded a contract to convert its 110-foot patrol boats to 123-foot vessels. Starting with eight ships, the contractor attached new steel to extend the hulls of the ships by 13 feet. The results were disastrous.
“What we found out was when you put new steel on old steel, it flexes,” Papp said. “Those patrol boats were unusable afterward and there was a chance of a catastrophic failure.”
The upgrades cost about $95 million and the eight boats had to be decommissioned.
The Coast Guard took over management of the Deepwater program in 2007. By then the new estimated price had risen from $17 billion to $24.2 billion.
Papp said the criticism was fair, but he wishes auditors and legislators would focus more on what’s been accomplished, as well as the cost of maintaining an old fleet.
“It’s cost us way more to keep (older ships) operational than it should,” he said. “We are far surpassing the amount that we get in our budget to do routine maintenance on these ships, so that comes at the expense of doing maintenance to our newer ships.”
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