Coast Guard/Deepwater Update

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I recently wrote about Michael DeKort, the former Lockheed engineer who has been blowing the whistle on Coast Guard contracting debacles for years. Late Tuesday evening, DeKort emailed me to pass on the news (from this source) that the Coast Guard will no longer be using Integrated Coast Guard Systems—a joint Northrop Grumman-Lockheed Martin venture—for any projects related to its Deepwater modernization program. That’s probably good news. ICGS, a so-called “lead systems integrator,” (PDF) was once in charge of handing out contracts for work on Deepwater. Not surprisingly, a lot of those contracts ended up going to Northrop and Lockheed, ICGS’s owners.

DeKort says it’s “a step forward to not award future contracts to ICGS,” because that means Northrop and Lockheed can no longer essentially “pick themselves” for future Coast Guard contracts. But this “certainly does not mean Lockheed and Northrop can’t still win,” he adds.

The true test of whether Lockheed and Northrop will suffer further for their alleged mistakes on Deepwater, DeKort says, will be whether or not they get big future shipbuilding projects coming down the pipe. The most important and lucrative contracts in the works are for five remaining 418-foot “National Security Cutters” and a new class of ships called “Offshore Patrol Cutters.” Those two groups of contracts may represent around half of Deepwater’s $25-billion budget.

DeKort thinks Northrop and Lockheed could win the contracts despite their past mistakes. “Seems to me it would take an act of God for Lockheed and Northrop not to win the remainder of the [National Security Cutters],” he says. “So the real issue is the [Offshore Patrol Cutters].  And that will come down to who else bids, how the competition is handled and who wins.  This all could very well be a boondoggle.”

A boondoggle would be bad. I will look into this more later today.

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