Rough seas: Coast Guard procurement programs struggling but staying afloat.

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NEW ORLEANS -- Coast Guard officials are optimistic that a new agency in charge of acquisitions can help salvage the service's modernization plans and restore confidence in its ability to manage complex projects.

Acquisition programs must get back on track soon, officials said, because the Coast Guard's current equipment may not last much longer.

"The Coast Guard has never been more decrepit," said Rear Adm. Gary T. Blore, assistant commandant for acquisition and head of the new "CG-9" acquisition directorate.

Speaking at the Coast Guard's annual technology symposium here, Blore and other CG-9 officials said they are aggressively moving to hire qualified procurement managers and to boost the skills of the current workforce of nearly 2,000 people.

The directorate oversees 20 programs worth about $27 billion.

An immediate goal is to fix the Coast Guard's $24 billion Integrated Deepwater Systems and the Rescue 21 communications system. These programs aim to replace 40-year-old ships and decades-old communications technologies.

Cost overruns and delays in these projects have tarnished the service's reputation and have sparked added scrutiny on Capitol Hill.

The Coast Guard must act soon to regain credibility or will risk funding cuts in the years ahead, analysts said.

"The Coast Guard cannot afford to go wrong on major acquisition programs," said Mackenzie Eaglen, a national security policy analyst at the Heritage Foundation. Past failures have led to "difficulty in securing adequate funding for all its priorities, including modernization," she said.

The Coast Guard's budget for fiscal year 2008 increased by 3 percent to $8.73 billion, but funding for acquisition of new equipment decreased by 19 percent this year. Recent acquisition troubles, particularly in Deepwater, were a contributing factor, said Stephen Caldwell, acting director of homeland security and justice affairs at the Government Accountability Office.

The service has a big job ahead trying to prove to Congress that it can manage the Deepwater recapitalization program. The project had been managed by a team of Northrop Grumman and Lockheed Martin, but the Coast Guard took over management of the program last year after disclosures of significant cost overruns and design flaws in new cutters.

The Coast Guard in July 2007 consolidated parts of its acquisition office and created the CG-9 acquisition directorate.

This was a smart move, Eaglen said. Under the previous organization, there were too many stovepipes that did not communicate with each other. An integrated organization should help in making programs more interoperable, she noted.

Under Coast Guard Commandant Adm. Thad Allen's direction, CG-9 officials wrote the "Blueprint for Acquisition Reform," which outlines a plan to strengthen procurement and contracting.

These changes are a "helpful early step toward addressing the myriad of procurement challenges the Coast Guard currently faces," Eaglen said.

Ultimately, she said, the service needs to prove that these new measures will translate into real success. "All the reforms in the world do not matter unless there is a highly skilled, professional and trained acquisition workforce to carry them out."

The current procurement woes are not accidental, noted Stephen Flynn, senior fellow for national security studies at the Council on Foreign Relations.

Government procurement personnel cutbacks dating back to the 1990s led the Coast Guard--as well as the other military services--to gradually turn over the management of large programs to contractors. After 9/11, the Coast Guard took on new and more complex missions but lacked in-house procurement personnel to oversee the modernization of the fleet. Not surprisingly, said Flynn, "Deepwater was not well-executed."

The Rescue 21 project, like Deepwater, has been under fire for major cost overruns and delays.

Rescue 21 is a command, control and communications system that is intended to improve the Coast Guard's ability to find ships in distress and save lives. General Dynamics C4 systems received a $611 million contract in 2002 to develop the technology, making it the most costly acquisition after Deepwater. The program was expected to use readily available, commercial-off-the-shelf technology, but that plan failed. The timeline for flail operating capability was delayed from 2006 to 2011. GAO estimated that Rescue 21 costs could soar to $872 million.

The Rescue 21 troubles "have much in common with the issues we identified with the Deepwater program," Caldwell wrote in a report requested by a Senate panel

Congress signaled its displeasure in fiscal year 2006 when it slashed program funds from $101 million to $41 million. The Bush administration budgeted $39.6 million for 2007.

Despite that setback, the Coast Guard requested $88.9 million in fiscal year 2008 to buy radio equipment and install transmission towers in the northeast, West Coast and Alaska.

Eaglen said she expects the budget will increase again in 2009.

"Funding for this program is more likely in fiscal year 2009 as additional Rescue 21 sites become operational in places like Alaska, thereby proving the technologies and developing a constituency on Capitol Hill."

As the service works to fix Deepwater and Rescue 21, it also faces challenges this year to secure funding for a new modernization program called Command 21.

Originally named Command 2010 to reflect the year it was supposed to become operational, it was renamed because of delays, said retired Cmdr. Mike Hauke, operations consultant at SSR Engineering, a radar technology firm in Seattle.

The program goal is to upgrade 1980s technology and modernize old command centers.

"Command 21 will provide additional vessel-tracking sensors and will combine vessel tracks with historical data, law enforcement information and intelligence through the common operational picture," said Lt. Cmdr. Bryan Bender, of the Coast Guard's maritime domain awareness directorate.

The initiative is one part of the service's overarching plan to be able to find and track all waterborne assets in and around U.S. shores. The effort, known as "maritime domain awareness," is a top priority for the Coast Guard, the Navy and the Department of Homeland Security.

In addition, Command 21 is the Coast Guard's answer to the Safe Port Act requirement that all high priority ports have interagency operational centers, also known as "fusion centers."

Despite this mandate, Command 21 is unfunded.

The service was unable to secure some $260 million it needs for the program in the fiscal year 2008 budget, said Kevin Peterson, Command 21 project manager.

"The Coast Guard might have funding in fiscal year 2009," Peterson said, "but we are constrained by what Congress can give us."

All the services are finding it difficult to pay for anything not directly involving counterterrorism, Flynn noted. "The funding stream is thin ... if an agency needs infrastructure upgrades, it gets pushed back."

Nevertheless, the Coast Guard has built five prototype centers by partnering with the Department of Justice, the Navy, and the DHS office of science and technology.

Seven additional ports have been identified for short-and medium-term pilot projects to evaluate joint operations between the Coast Guard and Customs and Border Protection.

Coast Guard officials hope that, if funded, each upgraded command center will have ample desk space, computers and phones available for local and federal agencies that could quickly set up shop in an emergency.

Operational requirements are being developed for Command 21, in anticipation of future funding, Bender said.

Meanwhile, the Coast Guard is seeing moderate success with a vessel tracking acquisition program called the nationwide automatic identification system, which is an additional component of the maritime domain awareness plan. NAIS was a requirement outlined by the Maritime Transportation Security Act of 2002, the Coast Guard said. It encompasses a maritime communications network that allows operators to more easily detect friend or foe vessels. The technology will "help form an overarching view of maritime traffic within or near U.S. territorial waters," a Coast Guard document said.

NAIS is split into three phases. The Coast Guard hopes this approach will help avoid cost overruns and delays.

"Implementing NAIS in these three increments will help to address technical, logistical and budgetary risks that would be more difficult to manage in a single step approach," the document continued.

In the first increment, all 55 critical U.S. ports and nine coastal areas were set to have receive only capability for automatic identification system signals. That phase was slated for completion in the first quarter fiscal year 2008. As of the end of fiscal year 2007, all ports and coastal areas were outfitted with the technology and were successfully receiving signals.

The second stage calls for AIS tracking capability out to 50 nautical miles. Satellites will be added in the third stage and if successful, are expected to detect ships as far out as 2,000 nautical miles. Plans call for the full program to be up and running in 2014.

The first experimental Coast Guard payload on a commercial satellite was slated for launch at the end of December. That satellite was outfitted with an AIS receiver to test out the viability of the space-based technology.