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US Coast Guard takes control of Deepwater from Contractors - No Governance

Kirkhill

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I found this fascinating.  The Coasties have had enough of Lockheed Martin and Northrop Grumman (same companies involved in the overruns on the LCS that resulted in their entry being delisted) and have decided to takeover the Deepwater programme themselves.

Apparently the Contractors have managed to take a perfectly useable design (110 ft WPB) and managed to break it resulting in the USCG having to take 8 "new" patrol boats (123 ft WPB) out of commission.

http://www.uscg.mil/datasheet/123wpb.asp
http://www.uscg.mil/datasheet/110wpb.asp

As a result they are off the case.  Edit: http://www.defense-aerospace.com/cgi-bin/client/modele.pl?session=dae.16851726.1133540294.Q5BzxsOa9dUAAHeSPdQ&modele=jdc_34

....A significant step in changing the course of Deepwater is resolving outstanding issues within the program, so let me begin this morning by announcing my decision to permanently decommission the eight 123' patrol boats converted under the Deepwater program. 

Multiple extensive studies and analyses by both Coast Guard engineers and third-party naval architects and marine engineers over many months have described the failures in these vessels. They have been unable to determine a single definitive root cause for the 123-foot patrol boat structural problems. 

We believe the design of the 123-foot patrol boat reduced the structural cross section necessary to support the added weight distribution following the conversion. Our analysis has been complicated, however, by the fact that we’ve observed permanent deformations of each hull in slightly different ways. 

Based on this analysis, any strategy to permanently repair these cutters and return them to service would require an iterative, phased approach over a long period of time with uncertain costs and outcome. Initial estimates indicate it could cost well over $50 million. 

The excessive cost and time associated with continuing to pursue an uncertain resolution to these structural problems has convinced me – with the recommendation of my chief engineer – that permanently removing these cutters from service while recouping any residual value and redirecting funds to other programs is in the best interest of the government. 

We will continue to mitigate the loss of these patrol boat hours through our ongoing efforts and strategies (such as multi-crewing 110-foot patrol boats and an extension of the memorandum of understanding for three Navy 179-foot patrol craft) while we work toward acquiring a new platform as soon as we can to replace our entire fleet of 110-foot patrol boats. 

We will pursue all viably available contractual, legal or other options for recouping any funds that might be owed the government as a result of the loss of these hulls. 
Statement by Adm. Thad Allen on the Converted 123-foot Patrol Boats and Changes to the Deepwater Acquisition Program (Source: US Coast Guard; issued April 17, 2007)


What I find more interesting is the "6 new principles" for managing Deepwater:

- The Coast Guard will assume the lead role as systems integrator for all Coast Guard Deepwater assets, as well as other major acquisitions as appropriate. I have already begun building my organic staff in the fiscal year 2008 budget request, and will combine that with other government assets as we transition to this new role. 

- The Coast Guard will take full responsibility for leading the management of all life cycle logistics functions within the Deepwater program under a an improved logistics architecture established with the new mission support organization. 

- The Coast Guard will expand the role of the American Bureau of Shipping, or other third-parties as appropriate (KH Comment: Presumably this could include outfits like Lloyd's or Det Norske Veritas etc) , for Deepwater vessels to increase assurances that Deepwater assets are properly designed and constructed in accordance with established standards. 

- The Coast Guard will work collaboratively with Integrated Coast Guard Systems to identify and implement an expeditious resolution to all outstanding issues regarding the national security cutters. 

- The Coast Guard will consider placing contract responsibilities for continued production of an asset class on a case-by-case basis directly with the prime vendor consistent with competition requirements if: (1) deemed to be in the best interest of the government and (2) only after we verify lead asset performance with established mission requirements. 
 
- Finally, I will meet no less than quarterly with my counterparts from industry until any and all Deepwater program issues are fully adjudicated and resolved. Our next meeting is to be scheduled within a month. 

This is a pretty hard slam at all the Defence Systems managers out there.  One that I agree with. 

The crux of the matter seems to be a traditional bug-bear in any "integrated system": how do you deal with the necessary design compromises?  Every problem has a solution.  However every problem solver will define their own version of what is acceptable.  As a result any "component" will be a blend of hardware, software and operational procedures.   When two engineers are tasked to solve a problem by integrating components they will choose from what is available.  Each one will make their own decision as to which blend of strengths and weaknesses they can work with.  Some of the weaknesses of one component can be offset by the strengths of another component but sometimes the weaknesses are insoluble except through transferance to the operator (the discussion about the student ejecting on the tarmac is indicative).

That then becomes one of the bases of evaluation of the integrated systems - ease of operator use - along with cost and maintenance.

And those evaluations can only be done by the end user.  So they select a contractor and a design.  Then they wait to see if what they ordered will work.  What they inevitably discover is that some of the compromises are unacceptable to them, or just undesirable.  Then the fun begins.  Who pays and for what?  What is necessary and what is just desirable?

If the customer doesn't have a direct financial stake in modifications to the project (a fixed cost project) then they will demand more and more changes and be unhappy when they don't get them.  If they do have a direct financial stake in the modifications (a cost plus project) then they will still demand changes and complain about cost over-runs. 

In order to offset this discussion the system integrators will point to the component suppliers and say that the problems lie in the performance of the components while the component suppliers will argue that the problem lies with the systems integrator selecting incompatible components from different suppliers - if only the systems integrator had bought all components from them then everything would be perfectly integrated (in which case, of course, there is no need for a systems integrator).

The Coast Guard is just the latest organization to discover this truism:  If you want a job done well do it yourself.

This is NOT because of any technical competence that they have but strictly because when you are forced to make and pay for your own compromises you are more likely to have a realistic appreciation of what is possible. (Of course the sailors using the boats may not share management's views of what is an acceptable compromise but that is another thread).  If you are making your own decisions and spending your own cash you are more likely to be accepting of trade-offs.

The Coast Guard wanted to get out of the decision making business on design and logistics and hand that over to "experts" so that they could concentrate on being users (punching holes in the water at high rates of Knots).   They were then dissatisfied with the products the experts produced.

They are now back in the decision making and "GOVERNANCE" business.  Where they should have been all along.

The two advantages that Defence Contractors were supposed to supply was "seamless" integration of multiple systems across multiple platforms and long term stability in planning life-cycle costs. 

Predictability is dear to accountants because then they can make standards and hold administrators to those standards.  But when you are talking about projects with 25 to 50 year life cycles predictability goes out the window.  This is true in any commercial venture which is always subject to the vagaries of the market place.  It is more true in the military sphere where the enemy forces change resulting in the need to "Adapt and Overcome......Right Now".  And it is exacerbated by the rapid pace of change resulting from technology.

Life Cycle planning becomes a farce.  It is one thing to get contractors to prepare a Life Cycle Cost to evaluate maintenance costs under steady state conditions and use that as a basis of comparing systems.  It is quite another thing to hand out Life Cycle service contracts - especially in the military field.  You either end up with outdated, dangerous equipment that the enemy can counter or you end up having to break the contract to redesign the system. Edit: It is equally silly to expect that actual Life Cycle cost to be anything like the planned cost proposed by the manufacturer because the operators will inevitably find ways to use the equipment that neither management nor the supplier dreamed of.

The only rational solution is for the USER to become their own General Contractor and Maintenance Provider and demand (as Admiral Allen does in Principle 5) that suppliers be required to deliver what they promised.  That, unfortunately, still leaves a lot of compromises to be argued over but they are fewer in number, lower in cost, lower in risk and consequently more easily addressed.

There is no alternative to accepting responsibility for your own decisions.

The CF needs to keep that in mind as it re-equips and as people complain that there are too many people in HQ and Administration.  These are the people that are necessary to integrate the projects that the boots on the ground rely on to do there work. As systems become more technically complex the demand for high priced integrators and administrators (in uniform or out) will only increase.

Given that we have determined that there is a certain irreducible need for boots on the ground (people) to interact with people - and we have too few of those already - and given that we have an increasing need for integrators and administrators to manage the technologies then where might the people and dollars come from to permit this investment.  I suggest that the likely candidates are those fields where technology can replace man-power - the support fields and the technical arms.  That means logistics - replacing little ships and planes with big crews with big ships and planes with little crews and buying trucks with automated loading systems.  It means reducing the size of crews on fighting ships, aircraft and vehicles because it is the single platform and its weapons that supplies the effect - not the size of the crew - which in some instances can be reduced to zero these days.  It means increasing the number, range and effects of weapons available to the individual decision maker - trigger puller so that one individual can influence a large portion of the battlefield with out having to rely on massive numbers of subordinates.  Those PYs are more valuably employed interacting with people and making sure that the boots on the ground have the support systems in place they need to do their jobs.



PS - it appears I have done it again.  Sorry - sort of. ;D :salute:











 
Sorry Kirkhill you will never have me convinced that small crews will be able to contain a flood or a fire in an unprotected space. Until then my heels are dug in.
 
The USCCG small boat program has been a success, look at the 47’ lifeboats an excellent design with lot’s of input from end users throughout, also their 41’ Cutters have a good rep as did the 36’,40’ and 52’ designs. Only their surf boat failed to live up to expectations.
 
Ex-Dragoon said:
Sorry Kirkhill you will never have me convinced that small crews will be able to contain a flood or a fire in an unprotected space. Until then my heels are dug in.

You, I have given up on.  ;)

While I agree many hands make light work your problem is that you don't have enough volunteering for the work that you have, much less the work that needs to be done.  Unfortunately coverage is given by the number of platforms, not the number of sailors.  225 Sailors on one Ship is still just one Ship.  25 Sailors on one Ship means that those 25 Sailors can man 9 Ships which can be 9 places.  (Numbers supplied for argument only - no basis in reality). 

Maybe the Navy could do something like the Army (or at least its suppliers) and create a protected crew pod from which all ship functions could be controlled and which could be cut adrift when the ship is beyond the abilities of the crew and its systems to keep afloat.  It might mean more lost ships with the crew ejecting but on the other hand it might also mean spending more money where it is critical and less money on "at risk" spaces......

But we're heading down another well travelled path here.

My primary interest was in the Contracting Out of Project Management.  I find it interesting that the Coast Guard has taken as couple of steps to the rear on this one and is taking a more hands on approach. 

 
And the Deepwater saga continues.

Coast Guard seeks refund for Deepwater boats
http://www.navytimes.com/news/2007/05/navy_deepwater_refund_070517w/

By Patricia Kime - Staff writer  Posted : Friday May 18, 2007 10:28:27 EDT
 
The Coast Guard is seeking to recover its losses for eight failed patrol boats built under the Deepwater modernization program.

The service filed a letter May 17 with Integrated Coast Guard Systems, the joint partnership between Northrop Grumman Corp. and Lockheed Martin Corp. that holds the contract, canceling acceptance of eight 123-foot patrol boats delivered to the service in 2004 and 2005.

The ships — originally 110-foot cutters that were rebuilt and upgraded — developed an array of problems once they hit the water, from hull deformations to buckling propeller shaft alignment issues.

The formality paves the way for the Coast Guard to pursue remuneration for its losses on the ships, which will be scrapped.

The letter does not say how much the Coast Guard wants refunded. The vessels cost between $87 million and $94 million to build.

In the letter, Coast Guard contracting officer Pamela Bible said ICGS engineers failed to provide their analysis of the 123s’ failures to the Coast Guard.

She added that the Coast Guard feels it did not take any action or activity that had “any material impact on these failures.”

During a hearing before several House Homeland Security subcommittees May 17, acquisition chief Rear Adm. Gary Blore said the Coast Guard is adapting to the loss of the ships, but admitted that a gap exists between the number of patrol boat hours they have and those they need.

“We’re frustrated in our attempts to bring the eight 123 cutters on line, we’re disappointed,” Blore said.

ICGS spokeswoman Margaret Mitchell-Jones said the companies will evaluate the letter and respond accordingly.

 
Latest:

Coast Guard in Dispute With Defense Contractors Amid Equipment Crisis
http://www.worldpoliticsreview.com/article.aspx?id=1057

...In the wake of the patrol boat fiasco, the Coast Guard cancelled the Lead Systems Integrator deal, returning contract control to the government. Concurrently, Allen promised a major overhaul of the Coast Guard bureaucracy to improve the service's ability to manage its own equipment purchases. But this represented "an ongoing challenge," he said, owing to a shortage of experienced managers. He added that in the mean time the service would have to rely on paid experts from various independent, not-for-profit consulting bodies.

This interim acquisitions force had its first test in late July when the Coast Guard began considering bids for the first of around 50 new patrol boats. The first unofficial meetings with shipyards occurred in Crystal City near Washington on July 25 and were an apparent success, perhaps marking the first step in a slow process of finally replacing the Coast Guard's aging fleet.

Mark
Ottawa
 
I am glad they are going after them for money, even if it bankrupts a couple of firms, it will help clean up the industry. We had a mini-version here with the 47' lifeboats, I believe SNC Lavlin got the contract and then subcontracted to a firm in Kingston who had never built a boat before, much less a aluminum self-righting lifeboat. I went to the yard and looked at their facilities, they were welding out in the open and had no idea what they were doing, the CCG had to cancel the contract after the first 2 boats, because there were so many flaws. Same thing happend back in the 80's with the 70' Point class boats and the first 41' rescue cutter.
 
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