[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
UNITED STATES COAST GUARD FISCAL YEAR 2008 BUDGET REQUESTS AND
AUTHORIZATION
=======================================================================
(110-15)
HEARING
BEFORE THE
SUBCOMMITTEE ON
COAST GUARD AND MARITIME TRANSPORTATION
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
March 8, 2007
__________
Printed for the use of the
Committee on Transportation and Infrastructure
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
JAMES L. OBERSTAR, Minnesota, Chairman
NICK J. RAHALL, II, West Virginia JOHN L. MICA, Florida
PETER A. DeFAZIO, Oregon DON YOUNG, Alaska
JERRY F. COSTELLO, Illinois THOMAS E. PETRI, Wisconsin
ELEANOR HOLMES NORTON, District of HOWARD COBLE, North Carolina
Columbia JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York WAYNE T. GILCHREST, Maryland
CORRINE BROWN, Florida VERNON J. EHLERS, Michigan
BOB FILNER, California STEVEN C. LaTOURETTE, Ohio
EDDIE BERNICE JOHNSON, Texas RICHARD H. BAKER, Louisiana
GENE TAYLOR, Mississippi FRANK A. LoBIONDO, New Jersey
JUANITA MILLENDER-McDONALD, JERRY MORAN, Kansas
California GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California HENRY E. BROWN, Jr., South
LEONARD L. BOSWELL, Iowa Carolina
TIM HOLDEN, Pennsylvania TIMOTHY V. JOHNSON, Illinois
BRIAN BAIRD, Washington TODD RUSSELL PLATTS, Pennsylvania
RICK LARSEN, Washington SAM GRAVES, Missouri
MICHAEL E. CAPUANO, Massachusetts BILL SHUSTER, Pennsylvania
JULIA CARSON, Indiana JOHN BOOZMAN, Arkansas
TIMOTHY H. BISHOP, New York SHELLEY MOORE CAPITO, West
MICHAEL H. MICHAUD, Maine Virginia
BRIAN HIGGINS, New York JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri MARIO DIAZ-BALART, Florida
JOHN T. SALAZAR, Colorado CHARLES W. DENT, Pennsylvania
GRACE F. NAPOLITANO, California TED POE, Texas
DANIEL LIPINSKI, Illinois DAVID G. REICHERT, Washington
DORIS O. MATSUI, California CONNIE MACK, Florida
NICK LAMPSON, Texas JOHN R. `RANDY' KUHL, Jr., New
ZACHARY T. SPACE, Ohio York
MAZIE K. HIRONO, Hawaii LYNN A WESTMORELAND, Georgia
BRUCE L. BRALEY, Iowa CHARLES W. BOUSTANY, Jr.,
JASON ALTMIRE, Pennsylvania Louisiana
TIMOTHY J. WALZ, Minnesota JEAN SCHMIDT, Ohio
HEATH SHULER, North Carolina CANDICE S. MILLER, Michigan
MICHAEL A. ACURI, New York THELMA D. DRAKE, Virginia
HARRY E. MITCHELL, Arizona MARY FALLIN, Oklahoma
CHRISTOPHER P. CARNEY, Pennsylvania VERN BUCHANAN, Florida
JOHN J. HALL, New York
STEVE KAGEN, Wisconsin
STEVE COHEN, Tennessee
JERRY McNERNEY, California
(ii)
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION
ELIJAH E. CUMMINGS, Maryland, Chairman
GENE TAYLOR, Mississippi STEVEN C. LaTOURETTE, Ohio
RICK LARSEN, Washington DON YOUNG, Alaska
CORRINE BROWN, Florida HOWARD COBLE, North Carolina
JUANITA MILLENDER-McDONALD, WAYNE T. GILCHREST, Maryland
California FRANK A. LoBIONDO, New Jersey
BRIAN HIGGINS, New York TED POE, Texas
BRIAN BAIRD, Washington JOHN L. MICA, Florida
TIMOTHY H. BISHOP, New York (Ex Officio)
JAMES L. OBERSTAR, Minnesota
(Ex Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
TESTIMONY
Allen, Admiral Thad W., Commandant, United States Coast Guard.... 5
Bowen, Charles W., Master Chief Petty Officer, United States
Coast Guard.................................................... 5
Skinner, Richard L., Inspector General, Department of Homeland
Security....................................................... 40
Caldwell, Stephen, Director, Homeland Security and Justice
Issues, Government Accountability Office....................... 40
PREPARED STATEMENT SUBMITTED BY MEMBERS OF CONGRESS
Cummings, Hon. Elijah E., of Maryland............................ 58
Mica, Hon. John L., of Florida................................... 65
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Allen, Admiral Thad W............................................ 68
Bowen, Charles W................................................. 82
Caldwell, Stephen L.............................................. 88
Skinner, Richard L............................................... 119
SUBMISSIONS FOR THE RECORD
Allen, Admiral Thad W., Commandant, United States Coast Guard:
Coast Guard Mission Support Organization Chart................. 10
Response to Naval Surface Warfare Service Finite Element
Analysis..................................................... 16
Response to question from Rep. Coble........................... 20
Response to request from Rep. Cummings......................... 23
Status Report on Cape Wind at Nantucket Sound, as requested by
Rep. Oberstar................................................ 33
Response to question from Rep. Cummings........................ 39
ADDITIONS TO THE RECORD
Reserve Officers Association of the United States, statement..... 130
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HEARING ON BUDGET AND AUTHORIZATION FOR FISCAL YEAR 2008
----------
Thursday, March 8, 2007,
House of Representatives
Committee on Transportation and Infrastructure,
Subcommittee on Coast Guard and Maritime Transportation,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in
Room 2167, Rayburn House Office Building, the Honorable Elijah
E. Cummings [Chairman of the Subcommittee] presiding.
Mr. Cummings. The Committee will come to order.
Today, the Subcommittee on Coast Guard and Maritime
Transportation convenes to examine the Coast Guard's fiscal
year 2008 budget.
The President has requested nearly $5.9 billion to fund the
coast Guard's operations, an increase of $416 million over
fiscal year 2007 enacted level of just under $5.5 billion.
The President's total request for the Coast Guard capital
budget is nearly $998 million, of which $837 million is for
Deepwater. This represents a decrease of approximately $250
million below the amount appropriated for Deepwater in fiscal
year 2007.
We will hear today from Admiral Thad Allen, the Commandant
of the Coast Guard, and Master Chief Petty Officer Charles W.
Bowen, regarding the President's budget request and how it
aligns to the Coast Guard's needs as the service continues an
ambitious transformation effort to balance its many missions
and to respond to the emerging threats that confront our
homeland.
I look forward to hearing from all of the witnesses today
and hearing their thoughts on the question of whether the Coast
Guard has adequate resources to perform each of its missions.
As I have stated since the beginning of my tenure as
Chairman of this Subcommittee, our Subcommittee will be an
advocate for the Coast Guard, but we will balance our advocacy
with a demand for accountability. Further, as we review the
budget request, our Subcommittee will continually seek new
opportunities to strengthen the systems and processes that can
ensure accountability in all aspects of the Coast Guard's
operating and capital budgets.
While I am concerned that $837 million may not be adequate
funding for Deepwater, we have just begun our oversight of this
program and, before I advocate for an increase in funding, I
want to know in detail the steps that the Coast Guard is taking
to correct Deepwater and I want evidence that the steps are
producing the results that we expect. As I have said over and
over and over again, I do not expect for the American people to
continuously pay for errors that are made by others.
At the same time, the Committee on Transportation and
Infrastructure is concerned that insufficient capital funding
is being directed towards the maintenance of on-shore
facilities. The President's budget of $35 million for this
purpose, which appears to be far below the amount required to
meet the maintenance needs of existing infrastructure. Our
Committee supports the appropriation of $360 million for non-
Deepwater capital expenditures, which is the level of funding
that was appropriated in fiscal year 2005.
I am also very concerned about the funding levels for some
of the Coast Guard's historical programs. Proposed funding
levels for search and rescue, marine safety, aids-to-
navigation, icebreaking, and the protection of living resources
are all lower than the amounts that were appropriated for these
purposes in fiscal year 2007.
I have hear concerns from throughout the maritime industry
and labor organizations about the Coast Guard's lack of support
for traditional maritime safety programs. Some have even
advocated transferring this mission back to the Department of
Transportation, where they believe it will receive better
support.
Today, we also welcome to the Subcommittee Mr. Richard
Skinner, the Inspector General of the Department of Homeland
Security, and Mr. Stephen Caldwell, who represents the
Government Accountability Office.
These two experts will discuss the Coast Guard's budget
needs and the Deepwater procurement, which they both have
examined in detail.
Since our last hearing on the Deepwater program, the DHS IG
has issued a new report on the 123-foot patrol boats. Of
course, these boats have been pulled from service due to
problems with their hulls. However, the DHS IG has found that
aside from the hull problems, the contractors failed to meet
the requirements of the Deepwater contract by failing to
install low-smoke cabling and failing to install topside
equipment that would have been operable in all of the weather
conditions the patrol boats were expected to face.
I must tell you that this particular issue is one that
concerns me greatly. We have just seen, over the past week,
what happens when our military come back from Iraq and the
disregard, it seems, in many instances, for their health and
safety. And here we are in the Coast Guard, a requirement
having been put in by the Coast Guard and then seeming to have
been waived that goes to the very safety and health of our
personnel.
These findings are particularly disturbing because they
identify specific instances in which the contractor failed to
meet the requirements of the Deepwater contract and they
identify failures that were apparently not immediately
recognized by the Coast Guard. Further, the use of non-low-
smoke cabling could have needless exposed the crews on these
boats to safety risks, including excessive toxic smoke in the
event of an on-board fire.
I think that it would be almost criminal if this
Committee--if something were to happen in the future where
members of the Coast Guard were harmed because we did not make
sure these specifications were met. And if we did not address
them, I think that that falls square on our shoulders, and I,
for one, will not be a part of that. So, therefore, we are
going to look at that very carefully.
Such instances of shoddy performance that could endanger
the safety of the Coast Guard crews are completely
unacceptable. And let me say to everyone here I hope these are
the last instances we hear about the Deepwater contract.
I look forward to the testimony of all our witnesses, and
now I turn it over to my able and good friend and Ranking
Member of this Committee, Mr. LaTourette.
Mr. LaTourette. Thank you very much, Mr. Chairman, and
thank you very much for this hearing.
The Subcommittee is meeting this morning to review the
President's request for Coast Guard activities and personnel
for fiscal year 2008. With the problems that have recently come
to light with the vessels that will be acquired under the
Deepwater program, 2008 is shaping up to be a critical year for
the future of the Coast Guard.
The Administration has requested approximately $8.2 billion
for fiscal year 2008, which is an increase of 2.4 percent over
last year. While I am pleased that the President has proposed
this increase for the Coast Guard, I am also concerned by
several other proposals included in the budget. The President
has proposed a funding level of approximately $1 billion for
the Coast Guard's Acquisition and Capital Programs, including
$837 million for the Deepwater program. The proposed amount for
the Deepwater program is more than $229 million less than the
Congress appropriated for the program last year.
I am concerned about the effects that any reductions in
funding would have on the cost and the expected delivery of
assets under Deepwater. I hope that the witnesses will speak on
how the proposed funding level will affect the overall costs
and schedule for the Deepwater program, as well as the effects
on individual acquisitions under the project. The Coast Guard
is in the process of successfully acquiring new aircraft, small
boats, and command and communication systems as a part of
Deepwater, and I believe we must take care that any adjustment
to the funding levels do not endanger those acquisitions.
I am also concerned that the President's budget does not
include funding to support several of the Coast Guard's
missions. Once again, the President has proposed a transfer of
funds for operations and personnel of the Coast Guard's three
polar icebreakers to the National Science Foundation. Last
year, this Subcommittee received a statutorily mandated report
from the National Academy of Sciences that recommended that the
Federal Government and the Coast Guard maintain icebreaking
capabilities to support economic and national security
interests in the polar region. I hope that the witnesses will
also advise the Subcommittee how the Administration plans to
address these recommendations and how the Coast Guard plans to
support its current polar icebreakers and related personnel
without direct budgetary authority over funds for these assets.
The President has also proposed a transfer of funding and
statutory responsibilities over the bridge alteration program
from the Coast Guard to the Department of Transportation. The
Subcommittee will review this proposal to examine whether these
functions can be better performed by another Federal agency;
however, I am extremely concerned by the justification that was
included for this proposed transfer: that the removal of these
responsibilities would better focus the Coast Guard on its
growing homeland security responsibilities.
If the Coast Guard is unable to carry out all of its
traditional and homeland security missions with its current
legal authority, assets, and personnel levels, this
Subcommittee needs to know and I believe we need to take
action.
This hearing is very important because it lays the
groundwork for the authorization bill that the Subcommittee
will develop and hopefully enact into law later this year under
the direction of our Chairman.
I thank the witnesses for their testimony. And, lastly, I
want to welcome Master Chief Charles Bowen on his first
appearance before the Subcommittee in his capacity as the
Master Chief Petty Officer of the Coast Guard and, Master
Chief, congratulations on this accomplishment, and we look
forward to working with you.
And thank you, Mr. Chairman. I yield back my time.
Mr. Cummings. Thank you very much, Mr. LaTourette.
Mr. Coble?
Mr. Coble. Thank you, Mr. Chairman. I will not take the
full five minutes.
I want to welcome our panel here and would like to note for
the record, Mr. Chairman, that the Administration's fiscal year
2008 budget includes $13.3 million for construction of a state-
of-the-art pool and training facility for the Rescue Swimmer
Program located in Elizabeth City, North Carolina. While
Elizabeth City is not in my district, I do want to acknowledge
the Coast Guard presence in North Carolina and the contribution
it makes not only there, but across the Nation.
And for those who have seen the movie The Guardian, Mr.
Chairman, which portrays the training and efforts of rescue
swimmers, you no doubt understand the need for adequate
training and facilities for rescue swimmers, and all Coast
Guard programs, for that matter.
I commend men and women of the Coast Guard, including
Admiral Allen and Master Chief Bowen, for the good job they do
each day to protect our Nation, and it is good to have you all
with us today.
And I yield back, Mr. Chairman.
Mr. Cummings. Thank you very much, Mr. Coble.
Mr. Taylor, you had no opening statement. Thank you very
much.
We now will bring forward Admiral Thad Allen and Master
Chief Bowen.
Good morning, gentlemen, and thank you for being with us.
TESTIMONY OF ADMIRAL THAD W. ALLEN, COMMANDANT, UNITED STATES
COAST GUARD; CHARLES W. BOWEN, MASTER CHIEF PETTY OFFICER,
UNITED STATES COAST GUARD
Admiral Allen. Good morning, Mr. Chairman, Ranking Member
LaTourette, and Members of the Committee. It is a pleasure to
be here this morning. I have a statement for the record that I
would like to submit and a brief oral statement, subject to
your approval, sir.
Mr. Cummings. Without objection.
Admiral Allen. Sir, the previous hearing we had focused a
good deal on Deepwater, and I am prepared to answer any
questions you may have for that topic today. I would tell you
up front that we are proceeding on task per my previous
testimony. We are in the process of restructuring the contract
for the next award time, which we will have the opportunity to
award in June of this year. We are looking at the feedback from
the Inspector General, Government Accounting Office, this
Committee and other Committees about establishing performance
metrics, proper criteria for award fee, off-ramps where we need
to do that, and more effective ways to hold the contractor
accountable. We are on time line to return to this Committee
within 120 days from the hearing on the 30th of January. I look
forward to testifying at that time and reporting out to you,
sir.
In the meantime, yesterday and today the chief of my
acquisition shop, Admiral Gary Blore and Admiral Dale Gable,
who is our new, who is our newly designated technical authority
for Deepwater, are personally down on the National Security
Cutter looking at the fatigue life issues, modifications that
need to be made for the purpose of closing the issues on the
first and second hull, and then being able to make the proper
design changes for the third hull, so we may proceed this year
and be in construction on the third hull.
Prior to any movement forward on any task order related to
Deepwater or the National Security Cutter, we will full consult
and advise the Committees and the oversight bodies of our
intentions to that regard and how we resolve those issues, sir.
I would like to focus on the budget and the authorization
bill, the purpose of the hearing this morning, sir. I was
pleased that you were able to join us at the State of the Coast
Guard speech several weeks ago. At that point, I made the case
to the public that was in attendance and the Coast Guard that
we are in a changing world and that the Coast Guard needs to
change with it, and we actually started that change last May
when I assumed command of the Coast Guard.
We are doing several things simultaneously. We are
assessing the external environment and what we need to do in
the future. I believe we need to pay attention--and we are--to
the current issues that have been raised, and I have said
repeatedly that Deepwater is my responsibility as the
Commandant and I will get it right. However, I don't think that
we should let the tyranny of the present release us from the
responsibility to focus on the future, and we need to do that
and we need to think about what the Coast Guard needs to be in
the 21st century.
I stated at the State of the Coast Guard speech that we
released a new Coast Guard strategy for maritime safety,
security, and stewardship. This document is intended to lay out
the capstone objectives for my tenure as Commandant and it
crosses all mission and achieves a balance between safety,
security, and stewardship, including new emphasis on security
and our legacy missions, and I would be glad to answer any
questions about mission balance as we move forward.
To be able to be effective in the current operating
environment, we need to be effective as an organization. There
are three things we are looking at, and they are reflected in
both the authorization bill and the budget that is before you.
The first is our forestructure, our people and our platforms,
to make them as effective as we can. The budget before you
today includes a base reprogramming that will assist us in
establishing an employable operations group that will take the
Coast Guard's deployable specialized forces, place them under a
single command, and allow us to do adaptive force package
against problem sets like Katrina, a terrorist attack, or a
manmade disaster.
Additionally, we are looking at the command and control
system in the Coast Guard to make sure it effectively supports
mission execution.
Finally, we are looking at mission support. The whole
process of acquisition reform and our blueprint for acquisition
reform, together with financial reforms and a new look at our
logistics and maintenance system are intended to bring the
Coast Guard into the 21st century on how we conduct business
practices. As I stated at my State of the Coast Guard speech,
there are portions of the Coast Guard that have been run like a
small business, and we need to start acting like a Fortune 500
company.
Finally, the end goal is to achieve balance between the
resources we have and the mission demands placed upon us. Our
operational commanders continually participate in a risk-based
decision-making process. We allocate the resources to them on
scene and empower them to apply them to the highest need. The
principle of on-scene initiative is what allowed us to respond
during Hurricane Katrina and save 34,000 lives. That same
operational guideline and that risk management decision plays
itself out every day through the decisions of our field
commanders, and I would be glad to answer any questions you may
have about how they make those decisions, how that relates to
mission balance, and how that translates into the budget
numbers that you spoke about earlier, sir.
Again, I am delighted to be here today, and I would be glad
to answer any questions you may have for me, sir.
Mr. Cummings. Thank you very much, Admiral.
Master Chief Petty Officer Charles W. Bowen, welcome.
Chief Bowen. Good morning, Mr. Chairman and distinguished
Members of the Subcommittee. I have submitted a statement for
the record and have a brief oral statement this morning.
It is a privilege to speak to you today about a subject
that I care very deeply about: the U.S. Coast Guard, our
missions, and our people. First, I would like to report to you
that the service that I represent is in very good shape overall
and well capable of executing our missions. During the past
nine months, I have visited every Coast Guard district with the
exception of District 14 in Hawaii, and spoken to or in front
of at least 9,000 Coast Guardsmen.
On the West Coast I met a Petty Officer on the Coast Guard
Cutter Monsoon who led a boarding party and a boarding that
resulted in the arrest of Javier Arellano-Felix, the violent
Mexican drug lord and the leader of the Tijuana Cartel.
Petty Officer Steven Ruh from Station Oswego swam over 100
years in eight to ten foot seas to rescue a woman who would
have surely died.
I saw CWO Jim Mullinax underway on the Coast Guard Cutter
Baronoff while on patrol near the oil platforms near Um Kassar,
Iraq. He and his shipmates are working incredible hours in
extreme conditions, and they are not only keeping the waters
off Iraq's only port secure, but they are also helping to train
Iraqi security forces in boarding techniques.
Whenever I talk to Coast Guard crews about the future of
our service, I talk in terms of opportunities and challenges.
Opportunities include expanded roles, new equipment, and
reorganization efforts that will make us better. Challenges
include an aging infrastructure, including old owned housing,
child care, and our health care.
A very bright spot is recruiting and retention. 2006 was a
very successful active duty recruiting year. We recruited the
highest percentage of minorities and the third highest
percentage of women in history of the Coast Guard. For the
Coast Guard, diversity is an operational necessity. Our
retention rates are historic, and 93 percent and 88.5 percent
respectively for the officer and enlisted workforce.
Just a quick note about Deepwater. The past several weeks
there have been several hearings devoted to this subject. I
won't even try to repeat what has already been said, but I will
give you my perspective from a deck plate standpoint. I know
firsthand the importance of being able to project our Coast
Guard presence. I have been on small cutters that could not
reach offshore and we needed that aging medium endurance or
high endurance cutter to reach that person in distress,
interdict drugs, or protect our natural resources.
Deepwater is also a quality of life issue. Our crews live
aboard those cutters over six months of every year. A current
378-foot cutter built in the 1960s has some berthing areas that
house 20 to 30 persons at once. In comparison, the largest
berthing area on the NSC will house six personnel at the most.
As stated, the art dining facility and an onboard gym will also
improve livability.
To correct my written statement, we removed nearly 287,000
pounds, or 130 metric tons, of cocaine from the transit zone in
fiscal year 2006, and over 338,000 pounds, or 153 metric tons,
of cocaine in fiscal year 2005. In comparison, from 1993 to
2003, the interagency seized an average of 109,474 pounds, or
about 50 metric tons, per year. To put it more powerfully, in
the last two years alone, we removed twice as much cocaine as
we cumulatively seized in all of the years from 1994 to 1998.
Thank you for the opportunity to appear before you and
thank you for all that you do for the men and women of the U.S.
Coast Guard.
Mr. Cummings. Thank you very much. We appreciate both of
your testimonies.
Admiral Allen, I want to also compliment you on your State
of the Coast Guard speech. I was very glad to be there. I
thought it was very enlightening and I thought it very
practical, and you showed a tremendous amount of vision, and we
want to make sure you help--want to help you get there.
Over the past seven years, the Coast Guard's operating
budget has grown substantially, from $2.7 billion to a figure
that is now approximately $5.5 billion. At the same time, by
the Coast Guard's count, the total number of full-time
equivalent positions has grown just 18 percent.
Admiral, do you believe that you have the right number of
people to manage the growth in your operations? And do you
believe you have the expertise?
Admiral Allen. I believe with the increments that are
provided each year, as long as the FTE matches the increased
funding, we are going to be fine, and I am good to go with the
numbers that are presented in the budget this year. That is not
to say we don't have challenges moving forward, and I will be
working with the Department of Homeland Security and OMB to
fashion a fiscal year 2009 budget that is line with the State
of the Coast Guard speech that I gave.
One of the reasons the budget that is presented to you this
year may seem flat-lined compared to previous years, I believe
we need a source-to-strategy. I believe you have to have an in-
state of mind when you go up and ask for resources, and in the
last eight months, in putting together the Coast Guard's
strategy and focusing on base realignment of the Coast Guard, I
have tried to position ourselves to move forward to have a
higher level of credibility and a linkage between what we are
trying to accomplish out there and buying down risk and the
resources that I am coming to you and requesting.
One of the perennial problems in the Coast Guard is we are
a multi-mission organization. The good news is you can put one
cutter out there and do five missions, you don't have to have
five cutters. The downside is you can only do one or two
missions at a time. So if anybody asks me could I use more
people, the answer is always yes, because if you give me more,
I will more effectively apply those than probably any
organization in Government. But there has to be a balance of
the infrastructure and the competency and how we apply those
resources. We know when we grow too fast we have juniority
problems, where we will have people in grade and time in
service at a much junior level than we had in the past. So I
think there is a balance we need to achieve there.
As we move forward, I will be willing to work with the
Committee and pass on any recommendations I may have for where
growth needs to take place in the Coast Guard. But, as I said,
for fiscal year 2008, coming in as the Commandant, my goal was
to take, as we would call, a round turn on our base. And if you
will notice, there is an on-budget base reprogramming forestall
of $80 million to centralize the personnel account and then
$132 million to align the funding and the personnel we need to
establish the deployable operations group.
So I would categorize this year's budget as a base
management budget, and I fully expect that, as we go forward, I
will make my needs known to the Department and the
Administration as we move forward, sir.
Mr. Cummings. On that note, on that note, one of your
requests I think is that you have four vice admirals. Is that
accurate? Is that right?
Admiral Allen. Yes, sir. This is the authorization bill
that we put up, sir. What I am requesting is to establish
parity with how vice admirals are assigned with DOD. It would
also allow me the flexibility to achieve some of the
reorganization goals that I laid forward in the State of the
Coast Guard speech. Right now, vice admirals in the Coast Guard
are assigned and confirmed to a position. I would like the
flexibility, subject to the confirmation of the Senate--which
they will still have the authority to review--to have more
flexibility on how we assign vice admirals, and I would like to
increase the number by one, sir.
Mr. Cummings. Okay. And so the difference would be between
now--if you get what you want and what is going on now, what is
the difference?
Admiral Allen. The major difference is I am proposing to
create a mission support organization in the Coast Guard.
Included in that is the new acquisition organization and the
new chief sustainment officer and the ability to manage our
platforms more effectively and efficiently. This will allow me
to establish a senior technical position at the three star
level. It will do two things: it will provide higher level
oversight of mission support in things like the Deepwater
acquisition; it will also allow a path to promotion for our
technical people to the three star level, sir.
Mr. Cummings. Will you provide us with a proposed
organizational chart showing this, showing what you just------
Admiral Allen. Would be happy to, sir. Yes, sir.
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Mr. Cummings. First of all, I don't want something you said
to go unnoticed, when you talk about how you are presenting
your budget and basically trying to not ask for things that you
don't need at this moment. I must tell you that that is
refreshing and we appreciate that, because we want to make
sure, as you have heard me say 50 million times, we want to
make sure that the public's money is spent effectively and
efficiently. So I really appreciate that.
Talking about personnel, do you believe that the head of
the acquisitions functions should be a member of the Coast
Guard or a civilian?
Admiral Allen. Actually, I think you would need a mix of
both skills, sir.
Mr. Cummings. Say that again?
Admiral Allen. You need a mix of both skills.
Mr. Cummings. Okay.
Admiral Allen. You need the operational experience and the
technical competency that we embed in our officers as they grow
up through the Coast Guard, and somebody rising to that level
has about 30 years experience and would be able to apply that
to great advantage to the Coast Guard. On the other hand, there
are issues of continuity, longstanding procurement expertise,
and so forth. That is the reason what we have tried to do in
the acquisition organization is have both a military member and
a deputy as sort of the senior executive service. And, in fact,
two or three of the last hires that we have made into our
technical community have been folks that have come from places
like the Naval Sea System Command, where we are trying to
acquire civilian competency that provides continuity, and then
overlay that with military experience, sir.
Mr. Cummings. And so do you believe that the chief
financial officer should be a member of the Coast Guard?
Admiral Allen. Yes, I do, sir, because ultimate
accountability, chain of command, and the accountability of the
senior officers to me, the way it is currently constructed is
the chief of our CG-8 organization is designated as a chief
financial officer. We are in the process of hiring a deputy CFO
who will be a civilian senior executive, sir.
Mr. Cummings. With regard to Deepwater, are we going to be
able to stay within that $24 billion budget, do you think?
Admiral Allen. Sir, I am not sure we are going to be able
to answer that question completely until we get some of these
first articles out and tested, and then we are going to have to
make some tradeoffs. If for some reason there is cost growth
and we intend to stay within that cap, then we may be looking
at less units or another way to acquire those units. I am ever
mindful of that. That is the target and I think I need about a
year under the new regimes we are putting in place and looking
at the options we have to acquire things, especially after we
have demonstrated first article performance, whether or not we
should go bilateral with the contract rather than work through
ICGS, and use that as a basis for revising our cost estimates
and whether or not the $24 billion is accurate. But I would
like to tell you that we need took at different mechanisms by
which we can drive cost out of the procurement overall, sir.
Mr. Cummings. All right, now, let's go back for a moment.
If we were to--you just said something that just kind of rang
some bells in my head. You said something to the effect that we
might have to reduce what we want basically. Is that what you
just said?
Admiral Allen. Well, sir, if you keep the baseline where it
is at, at $24 billion, and you have cost growth and you don't
change the baseline, you are going to buy less.
Mr. Cummings. Right. I understand that.
Admiral Allen. Or you have to extend the baseline cost.
What I am saying is that under the changes we are looking at in
the contract structure and our options as far as competition
and all that sort of thing, I think in the next six to twelve
months I can give you a more accurate assessment of whether or
not the changes we are making now can actually drive cost out
of the total top line of the procurement.
Mr. Cummings. I have got that.
Admiral Allen. Yes, sir.
Mr. Cummings. This is where I am going with this. One of
the things--one of the reasons why we even came up with the
Deepwater program was so that we could make sure--I know it
started pre-9/11, but particularly post-9/11 we wanted to make
sure that our military had the best equipment to do the job
that they have to do. And this is a theme that is, by the way,
not only running through the Coast Guard, but all of our
services. I mean, that is a major concern I think of probably
every single Member of Congress.
And so when--if we have to reduce our acquisitions, then
the question becomes are we--it is logical, I think, that we
are then reducing our capability of doing the missions that you
have been mandated to do. So I guess what I am looking at--and
I understand you need more time to figure out where this is
going, but I am interested to know how the negotiations are
going. We are interested to know what is happening without--I
don't want to interfere with the negotiations, but I am
interested in knowing how Northrop Grumman and Lockheed Martin,
are they working with you, trying to deal with the issues that
we have been talking about for the last few months.
And I am wondering whether or not there are any concessions
with regard--I mean, we noted their bonuses have been paid--
were paid a while back. We want to know where all of that is
because, again, what we are trying to do is take the American
people's money and protect them with their own money. That is
what we are trying to do, trying to spend that money
effectively and efficiently. We simply want what basically is
standard contract law to happen. We want to make sure that when
we give money, that we get a product back that works.
So where are we with your negotiations? Because I think
that is critical, where those negotiations are, because we
cannot just keep throwing money and throwing money. The
American people are not going to stand for it, nor will this
Congress.
Admiral Allen. Yes, sir. The process was intended to come
up with a range of suggestions to both myself and the two CEOs,
and the culmination of the work that has been going on was the
trip yesterday to Pascagoula with the chief of Deepwater and
our technical authority. The specific purpose of that trip was
to come to closure on the technical solutions for the fatigue
life issue as part of settling all issues relating to the first
and the second hull, as a prelude to being able to issue a task
order for the third NSC hull, sir. So we are almost at closure
on that. I would be glad to provide you a complete technical
briefing and where we are at in the negotiations, sir.
Mr. Cummings. I am going to end my questions because I want
the other Members to have opportunity, but let me tell you
something. The Homeland Security IG has a major issue with this
fatigue life situation. He is of the firm belief that we are
not getting what we contracted for. He has heard your
explanation; he has read all kinds of material; I guess he has
talked to a number of people.
But one of the most disturbing things that he found, he
felt that--and he believes very strongly--and he will be here--
he will be sitting where you are in a few minutes and I am sure
he will say this--is that he does not believe, when it comes to
fatigue life, that we have gotten--we are not getting what we
bargained for. Of all the points that he was most upset about,
it is that one, and he feels that, for some reason, we started
off with a certain fatigue life and then some folks played with
the words, and the next thing you are know we are not getting
what we bargained for.
Would you comment on that? Because I want to make sure
that, when he comes up here, I can tell him what you said.
Admiral Allen. Yes, sir. The only issue raised by the
Inspector General regarding the National Security Cutter has
been fatigue life. There has been no audit on the capability,
the quality of life improvements that the Master Chief talked
about. The single issue with the National Security Cutter and
the Inspector General is the fatigue life, and I believe you
are alluding to two issues, and I will take them separately.
One of them is I think there is an issue on how underway
days were defined, and I will talk about that.
The other issue is Northrop Grumman constructed this ship
through a traditional military combatant process using what
they call data design sheets. Our engineers felt that that
basis for construction introduced some risk in terms of hull
fatigue. They sought a modeling system that had not been
applied called finite element analysis that replicate the
action of waves on the hull over the lifetime of the hull. That
led our engineers to believe that it might not achieve the
fatigue life expected of the ship. That wasn't to say that you
would launch it and something would happen immediately; it is
almost like you ask for--you thought you were getting 80,000
mile Michelins and you got 60,000 Good Years, and how long
would it last. And that is where the discussion has come in.
Northrop Grumman believes that they have met the
requirement in the ship they have offered us; we don't think
they have. That is why our chief of Deepwater and our technical
authority are in Pascagoula. That is a seminal issue that has
to be resolved, codified, either contract changes made,
concessions made and completely spelled out about how we are
going to move forward. It involves strengthening certain parts
of the ship to make sure that, as the forces are subjected to
the hull over the lifetime of the ship, that we won't see
stress cracking and a loss of structural integrity on the ship,
sir.
The second issue was something that was not clear in the
contract but understood by both the Coast Guard and the
contractor and required clarification for the Inspector
General, and it is the difference between what is a day away
from home port and what is a day in the operating area. These
vessels have been crewed to be able to operate 230 days a year
away from home port. Our current cutters operate 185 days a
year away from home port. With transit times, dry dock time,
port calls for logistics, you do not yield 230 days on station
from 230 days away from home port, it is closer to about 185 or
190.
The contractor that was directed to do the finite element
analysis was not given any guidance; he therefore took 230 days
and applied that as if we were on station subject to all the
wave action, which results in a far greater requirement for
strengthening the hull over 30 years than you would for 185
days. Our technical authority--this is not Northrop Grumman or
the Deepwater Program Office--our technical authority went back
and corrected that that should be 185 days. We then went back
and clarified, to the extent there was any misunderstanding by
the IG or it was vague in the contract, we actually modified
the contract to make sure everybody knew that we were talking
about 185 days on station per year.
Mr. Cummings. Just to leave you with this. When we have the
IG who says, United States Congress, the people of this
Country, through the Coast Guard, are not getting what they
bargained for, that is a problem.
Admiral Allen. Yes, sir.
Mr. Cummings. That is a major, major problem. We rely on
the IG; we trust the IG, I think most of us. They have nothing
to gain; they are just trying to do their job. So I just--
again, as I said--and I think you------
Admiral Allen. Sir, we don't argue with the issue of
fatigue life. It has got to be resolved.
Mr. Cummings. Okay. All right, so we are trying to be
consistent with the IG, is that what you are trying to say to
me?
Admiral Allen. There was inconsistent interpretation of
whether the ship should be subjected to wave action for 230
days or 185 days a year. It was commonly understood between the
Coast Guard and the contractor that it was 185 days. The IG
interpreted the contract as saying 230. There is a different--
and it was stated different ways in different parts of the
contract, and we have clarified that.
Mr. Cummings. Now, did you all ask the Navy to do the
analysis on the basis of 230 days?
Admiral Allen. We submitted a work order to the Naval
Surface Warfare Service at Carderock and asked them to do a
finite element analysis. The work order did not specify the
number of days and they interpreted it to be 230. When we
received the report, we adjusted it to 185, which this is a
scaling of the results. And I would be glad to produce a
detailed answer for the record on that that is certified by my
technical authority, sir.
Mr. Cummings. I would like to have that only, like I said,
because the IG--and I know that he is very, very, very upset
about this and very concerned.
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Mr. Cummings. Mr. LaTourette.
Mr. LaTourette. Thank you, Chairman.
And welcome again. I want to go over just some parts of the
President's budget that I think I highlighted in my opening
remarks, and the first is on the shore-side facility funding.
Although the request for this year is about $16 million
higher than last year, in going back over previous periods,
there was a six year period, from 1995 to fiscal year 2000, the
Coast Guard requested an annual average of about $73.5 million
for those facilities, together with navigation facilities.
During the next six-year period, from 2001 to 2006, the Coast
Guard sought an average of only $30 million for the same
programs.
My question--just three quick questions. What accounts for
the reduction? Has the Coast Guard dramatically reduced its
shore-side aid and aids to navigation holdings? And do the
upgrades made during the more robust period still meet the
operational needs of the Coast Guard today?
Admiral Allen. Sir, we took a hit in the early 2000s in the
shore account. A lot of that had to do with the negotiations
that were going on regarding the awarding of the Deepwater
contract against a constrained funding ceiling. In fact, there
were a couple years there, because of the negotiations moving
the budget forward, the funding was probably inadequate.
We have raised that to $37 million this year. In future
years--I have already talked with the Secretary and the Deputy
Secretary about this--we need to grow this account, sir. It is
underfunded and we need to move it up in future years.
Mr. LaTourette. Thank you.
The other issue that I mentioned, one of the other issues
was the polar icebreaking operations. The President's budget
does not include funding for personnel or operations aboard the
service's three polar icebreakers for 2007. The President's
budget also does not include any funding to address
recommendations to maintain Federal polar icebreaking
capabilities that were made to Congress in the statutory
report. There was a report in January of this year to the
Committee that states that the Coast Guard is working with the
Administration to review that report.
One, when will the review of the report be complete? Two,
how does the transfer of this funding affect the Coast Guard's
capability to plan and budget for polar icebreaking missions
aboard Coast Guard vessels? And then, lastly, is the National
Science Foundation required to provide funding the Coast Guard
for this service or can it choose to contract out with other
parties or even foreign nations to engage in this activity?
Admiral Allen. Yes, sir. First of all, several years ago
the base funding for the operation of polar icebreakers was
transferred to the National Science Foundation. That has
required us, on an annual basis, to justify cost to them and
negotiate a fund transfer to operate our icebreakers. In
effect, we own the crews and the cutters, and they own the
funding on an annual basis to do that.
My own opinion is that is very dysfunctional, but that is
what @. It proved itself this year; when appropriations were
passed for the Department of Defense and Homeland Security, the
rest of the Government was submitted to a continuing
resolution, and that would include the National Science
Foundation. Now, we have adjusted that for this year, but that
is just one indication about this process and how it is very
problematic in how to execute.
Moving forward, I believe if the Coast Guard is going to
operate polar icebreakers, we should have the funding in our
base, whether it is adequate or not, and then we will operate.
I would rather have the flexibility and the money, even if it
is not enough, then to try and do a cross-agency transfer,
because it is very problematic.
In regard to the longer polar icebreaker issues, the
National Academy of Sciences produced a report last September
that validated the need for three polar icebreakers which the
Coast Guard: the Healy, which is basically an Arctic research
vessel; the Polar Sea; and the Polar Star.
Moving forward, we believe there is a decision point coming
down about the recapitalization or the refurbishment of the
Polar Sea and the Polar Star. It is not a this year budget
issue, but it is a this year policy issue in how we are going
to proceed in the future.
We have been partnering within the interagency, Department
of State and other entities, to take a look at the current
policy environment for polar icebreaking, both Arctic and
Antarctic, especially in view of the shrinking Arctic ice cap,
access to routes from Russia to Asia over the top of the
Western Hemisphere rather than through the Panama Canal, and
the likelihood of increased shipping. We think there are issues
up there regarding search and rescue, environmental response,
and even issues of national security. We think this is a policy
issue that needs to be addressed right now, and we look forward
to doing that over the next 12 to 18 months, and then following
a policy discussion with authorization and budget
recommendations, sir.
Mr. LaTourette. Okay, thank you. And just sticking with the
icebreaking theme for a minute, I want to--I will thank you a
little bit later, but publicly thank you and Admiral Crowley of
the 9th District and the skipper and the crew of the Neah Bay
for the relief that they gave my constituents last week, a
really great effort. I mean, the Neah Bay had to come out three
times because the ice in the lake was so tough, and it was
helped by the Ridgely from Canada. So I thank you, and I
thanked Admiral Crowley yesterday.
My last question is in your testimony, figure 1 on page 5
of your testimony includes a list of statutes and acts under
which the Coast Guard operates. The list is part of the
explanation of the new Coast Guard strategy for maritime
safety, security, and stewardship. It is of concern to me that
none of the provisions in Title 6 dealing with vessel safety
and documentation or merchant mariner credentialing appears on
the chart. As you know, the Subcommittee has been long
concerned with that, and I think my question is, is the failure
to mention this important provision of Title 46 an oversight or
should the Subcommittee be concerned that maritime safety is
suffering at the hands of increased attention to homeland
security?
Admiral Allen. Sir, I can guarantee you it was not an act
of commission. That chart in the--I am assuming you are
referring to the maritime strategy chart. That was a
representative example of statutes, and whether you call it
omission or oversight, there is no intention to walk away from
those missions, sir.
Mr. LaTourette. Okay. Thank you very much.
Thank you, Chairman.
Mr. Cummings. Mr. Coble?
Mr. Coble. Thank you, Mr. Chairman.
Thank you, Admiral and Master Chief. Admiral, let me first
of all insert my oars into back home waters involving a program
that was included in the previous authorization bill which
created a pilot program in Camden County, North Carolina.
Specifically, Section 401 authorized the creation of a Coast
Guard junior reserve officer training corps at the Camden
County High School. To date, that program has received no
funding. Given inclusion in the authorization, Admiral, what
level, if any, of involvement has the Coast Guard had with the
Camden County Board of Education and the Camden County
commissioners to reach an agreement on how to move the pilot
program forward? And if an agreement was reached between the
principals, would you be inclined to recommend funding to
support the program?
Admiral Allen. Sir, if it is okay, I will get the latest
status on that and answer for the record, but I do have a
couple thoughts to pass, if that is okay.
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Admiral Allen. We do have, as you know, a very successful
Junior ROTC program down in Miami, Florida, the Mast Academy;
it is a magnet school for marine science and technology, and
that has become a great feeder school for Academy applicants.
And, in fact, a year or so ago the regimental commander at the
Academy actually came out of that JROTC program. We know the
value of those programs.
With my sabbatical down in New Orleans and Baton Rouge last
year, I became disassociated from that particular initiative,
and I would like to get back to you and give you a response to
your question, sir.
Mr. Coble. I think the beauty of the Camden County locale
is the proximity, as you know, of the support center at
Elizabeth City and the various commanders there.
Admiral, I think you have touched on this, but give us some
examples of major decisions that were made regarding Deepwater
where it has been reported that the Coast Guard did not follow
Integrated Coast Guard Systems recommendation. First of all, is
it your belief that you did follow them, that the Coast Guard
did in fact follow the recommendations?
Admiral Allen. Thank you for the question, sir. There is a
lot of coverage in the press and a lot of perceptions out there
that, generally, terms have been dictated to the Coast Guard in
this contract. While the IG is correct in that we did not
adequately document the decision related to the National
Security Cutter and fatigue life, I can tell you that there are
numerous instances where we have told the contractor that the
proposed solution was not acceptable.
The original helicopter that was offered to the Coast Guard
was an AB139. We have decided to move forward with the re-
engining of our H-65 helicopters to H-65 Charlies and stay with
our H-60 helicopters and upgrade them to H-60 Tango versions
with the new cockpit and new avionics.
Likewise, the small boat that was offered for both the 123
and the National Security Cutter, the short-range prosecutor,
we didn't feel brought us the same performance at value and we
thought an independent purchase by the Coast Guard of these
small boats would give us the same performance at a lower cost,
and we would then provide that as Government-first equipment.
That would also allow us to have Northrop Grumman design the
stern launch system for the National Security Cutter, which is
somewhat of an innovation in a large ship. They would be able
to design that launch to the ship, the small boat that we were
going to acquire so that system would work together,
technically.
But there are a number of issues where we have said no,
that is not the right answer, we are going to go another
direction.
Another one would be the original fixed-wing maritime
patrol aircraft that was offered by Integrated Coast Guard
Systems was an extended range CASA 235 that we thought would
not give us a technical performance, and we were concerned
about the amount of power reserve on takeoff and whether or not
it could accomplish the long-range patrol objections that we
had. Then we ended up with a hybrid fleet. We moved the CASA
235 that did not have the modifications that introduced risk
and we kept a certain portion of our C-130 fleet and the new C-
130Js as part of the mix.
But I can tell you unequivocally, across the board, terms
have not been dictated to the Coast Guard. I know there is an
issue with the National Security Cutter, but that has not been
the standard practice.
Mr. Coble. I thank you, Admiral.
No further questions, Mr. Chairman.
Mr. Cummings. I want to thank you.
Before I go to Mr. Taylor, have we seen--first of all,
Admiral, just following up on what Mr. Coble just asked and
your response, I think it is great the things you just said,
because those were the kind of things that we were hoping would
happen. But have we seen any significant savings, Admiral, on
those things? I mean, like say, for example, when you can buy
something direct, as opposed to be going through the team or
whatever. I mean, have you seen savings?
Admiral Allen. These weren't decisions that were based on
savings, they were based on the performance enhancements, sir.
Mr. Cummings. I understand. But have we seen any? Are you
following what I am saying?
Admiral Allen. Yes, sir. There are savings associated with
the Short Range Prosecutor. And we can give you the exact--
there is a Delta for each hull, and I can give you that for the
record, sir.
Mr. Cummings. Yes. Can you give us that information?
Admiral Allen. Happy to do that, sir.
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Mr. Cummings. Mr. Taylor?
Mr. Taylor. Thank you, Mr. Chairman.
And, Commandant, thank you very much for being here. I will
start off with the good news. For years I have been concerned
about the safety of the crew ships as they tied up at the Port
of New Orleans, particularly around Mardi Gras time; thought it
would be a great terrorist target. My observation was that you
had some small boats out there protecting them from the
waterside, and there is also a Naval vessel there. So we start
off with the good news. I am glad that you all were doing that.
It is one less likely target to have been hit.
The bad news is, Commandant, that I continue to be
dumbfounded by what happened to the 110s. And it just hit me.
You are in the business of running marine safety inspections on
every commercial ship in America. Every tugboat, every offshore
supply boat has to be hauled periodically. Your crews run the
safety inspection. Your crews do the calculations. So how in
the heck do you stretch eight ships and render them useless,
spend $100 million of the taxpayers' money and nobody in your
fine organization catches this? Now, if you think about it, if
a guy shoots down five planes, he is an ace. Somebody took
eight ships out of your inventory, and nobody is to blame. And,
again, I am going to ask you this question every time. That is
not fair to the taxpayers. Somebody wasted eight ships. So the
question I want to ask in particular is who ran the hogging and
sagging calculations? Were those numbers entered properly? And
who is responsible for the loss of eight ships and $100 million
of taxpayers' money? Because--I am sorry it took so long for me
to hit me--if you have got the expertise to inspect everybody
else's vessels, I have got to believe that you had the
expertise in-house to have caught this.
Admiral Allen. Yes, sir. I think we are in violent
agreement on the amount of value that has been rendered to the
Government and the Coast Guard by this acquisition, and I think
failure to achieve adequate solution going forward is going to
result in us having to make sure that the Government's
interests are protected, and I stated before we are going to do
that. I have got a team doing basic forensics on the decision-
making process, the reviews that were done on that.
As we had talked earlier at one point, when they extended
the ship by 13 feet, they moved the midship's point of the ship
to aft of the pilot house. When it was on the pilot house, the
hogging and sagging of the ship subject to the forces of the
waves was absorbed by what we would call a larger cross-section
modulus. When they moved the midpoint back, there was a
narrower part of the ship to absorb the hogging and sagging, as
you have stated.
One of the things we are looking at is whether or not the
computer models that generated the solution on whether or not
that would be adequate were adequately applied, and we are
taking a look at that right now. We are going to produce a very
detailed analysis of all this and we will make it available to
the Committee, and we have somebody working on it right now.
There is nobody more concerned about this than I am, sir, and
it was with very, very careful deliberation that I went down to
Key West and removed those boats from service, because that is
the last thing I wanted to do, sir.
Mr. Taylor. Well, when do you anticipate a decision on
this? Because, Commandant, every time I see you I am going to
ask you the same question.
Admiral Allen. Yes, sir. We------
Mr. Taylor. Because I don't think the taxpayers ought to
get stuck with this bill.
Admiral Allen. Agreed, sir.
Mr. Taylor. To what extent--I am pleased to hear that you
have been talking with Admiral Mullen to the greatest extent
possible, coordinating your acquisition efforts with theirs.
And, again, you have expertise; they have expertise. Years
ago--and it may still be going on--the Coast Guard would lend--
I am sorry, the Navy would lend gunnery officers to the Coast
Guard. I am sure there was some sort of exchange of Coast Guard
officers to Navy vessels. I was just curious, have you now, or
have you ever looked into the possibility of trading off some
officers with NAVSEA? It doesn't strike me that you need a huge
acquisition shop, but to have some people who have got at least
that in their background, and knowing the people who to call at
NAVSEA I have got to believe would be of tremendous value to
the Coast Guard so that something like this doesn't happen in
the future. Having someone whose experience David Taylor for
the David Taylor Research Lab and at least knows who to call
there I would think would be of some value.
Admiral Allen. Yes, sir, you are absolutely right. In fact,
we are using those resources right now. The finite element
analysis that we talked about earlier that was conducted for
the National Security Cutter was conducted at the Naval Surface
Warfare Center at Carderock. We use the Navy for operational
test and evaluation, and we consult with them regularly where
they have expertise that we can use. And, in fact, I will
shamelessly state that we have stolen I think either two or
three senior executives right out of NAVSEA that are working in
the Deepwater project right now. And Admiral Mullen and
Secretary Winter have offered whatever resources we need moving
ahead.
I am traveling, as I told you earlier, on Friday down to
the shipyards of the Gulf Coast with Secretary Winter. That
will be followed by discussions with Admiral Mullen and Deputy
Secretary Jackson about how we might move forward to take
advantage of some of the issues you raise yourself, sir.
Mr. Taylor. Mr. Chairman, my last question is I have
forgotten the name of the deputy commandant who actually called
into question the National Security Cutter, and particularly
what he saw as the overly stress problems down in the bilges of
the ship. I have been told I think by you that he is now
retired and teaching at the Academy. My question is in your
conversations with Northrop and others, has he been included in
that? I would think--the reason I say this is I read what he
had to say. I mentioned his concerns to the president of
Northrop Grumman Shipbuilding; he says that is not the case. I
would think there would be some value to getting that retired
admiral and the engineers from Northrop in the same room at the
same table and see if this can't be resolved.
Admiral Allen. Yes, sir. You are talking about Admiral
Errol Brown. He is not teaching at the Academy. We recently
brought him on for special duty with us to oversee the top-to-
bottom review at the Coast Guard Academy, which has just been
completed and we are reviewing that. And he has done great
service and he is a terrific officer; I have known him for well
over 35 years; highly respected for his integrity.
I will tell you this. I am not sure we need to bring him
back to have the discussion, because my current technical
authority in the Coast Guard, Rear Admiral Dale Gable and Errol
Brown, there is absolutely no daylight between them in how they
see this issue, sir. I think we have got it covered. It is a
matter of sitting down with Northrop Grumman and resolving how
they view the fatigue life of the ship and how we review it,
and what we think needs to be done to move forward; and that is
exactly what we are doing, and I owe the Chairman and all of
you a report, sir.
Mr. Taylor. All right, thank you, Commandant.
Thank you, Mr. Chairman.
Mr. Cummings. And you are saying, then, that we will figure
out who is responsible for this problem and--I guess what I am
trying to get to is we can--and I know this is not--I mean, I
just--one of the things that the IG talked about was how--I am
going to be right with you, Mr. LoBiondo, but I have got to get
this straight--he talks about how, in the military, in the
Coast Guard, a lot of people like the certain folks like, say,
the Northrop Grummans and the Lockheed Martins, they almost
depend upon personnel to change, and they know that personnel
is going to change and they just have to wait it out a little
bit. So the problem here, going back to what Mr. Taylor was
talking about, is that it seems like, in Congress, it seems
like we are almost set not to get things done. In other words,
it is hard to get the accountability. And what he is aiming at
is what I am aiming at, the same thing------
Admiral Allen. Yes, sir.
Mr. Cummings.--we need times, dates. And if we have to have
a hearing every other day, we are going to do it. That is why
we asked you all to come back in 120 days.
Admiral Allen. Yes, sir.
Mr. Cummings. And so when you ask a question like the one
he asked, I would like to know when are we going to have that
information. Somebody is responsible. Somebody made some major
mistakes.
Admiral Allen. Yes, sir. Let me------
Mr. Cummings. Just pardon me just one more second. And
everywhere else in this Country, probably in the world, if
somebody messes up, they pay. So, some kind of way, we have got
to get to that bottom line and figure out where we go from
there. And I don't think that that is asking something
unreasonable, and I would just like to know when will we know.
Admiral Allen. Yes, sir. Let me just elaborate a little bit
more so I can make it clear. We are going to order
modifications to the National Security Cutter to ensure it
achieves its fatigue life. Now, the issue of whether or not the
contractor provided adequate services under the specification
provided to him or we ordered additional work will have to be
adjudicated, but, one way or the other, we have to have the
modifications because we can't issue the task order for the
third cutter unless that is done.
Mr. Cummings. Right.
Admiral Allen. Then the second step is who is accountable.
And I am more than happy to discuss that. We have got to
quantify exactly what has to be done. There has to be agreement
on the technical solution, and that is what we are coming to
right now. And I want that as quickly as you do, sir, and as
soon as I have got it, I will come to see you, sir.
Mr. Cummings. Thank you.
Admiral Allen. We are talking weeks, we are not talking
months, sir.
Mr. Cummings. Very well. So if we are talking weeks, that
means we are talking about within a month.
Admiral Allen. Yes, sir. And as I stated earlier------
Mr. Cummings. Because I want to hold you to that. So we are
talking about within a month?
Admiral Allen. Yes, sir, I will brief you within a month.
Mr. Cummings. Very well.
Mr. LoBiondo.
Mr. Oberstar. Would the Chairman yield?
Mr. Cummings. Yes.
Mr. Oberstar. I just want to reinforce what the Chairman
has said just a moment ago about the seriousness of keeping the
Coast Guard accountable. I have every confidence in your
leadership, Admiral Allen, but the Coast Guard has, as the
Deepwater program demonstrated, failed significantly, in a
matter that I have seen previously with the FAA, when they were
not able to manage large contracts and got in over their head.
And we in the Congress didn't stop them soon enough from making
those mistakes, and I accepted that responsibility at the time,
but we did get in and severed the relationship between IBM and
the FAA. You could not tell where FAA left off and IBM began,
nor vice versa. And we don't want to let a situation like that
develop between the Coast Guard and its contractors. You have a
responsibility of oversight, and vigorous oversight, over the
contractors, and you cannot allow them, in effect, to self-
certify. And as the Chairman has said, we are going to stay
close on top of this.
Mr. Cummings. Thank you very much, Mr. Chairman.
Mr. LoBiondo?
Mr. LoBiondo. Thank you, Mr. Chairman.
Admiral, you recently provided Congress with a report on
the condition of the infrastructure with the boat station at
Cape May, and in the report--by the way, that boat station was,
I think, a laundromat in the 1940s--that it is obsolete and in
need of replacement to ensure the mission, the success of the
mission. I am very pleased that the survey and design funding
for the facility is in the 2008 budget, but can you give me
some assurance or commitment that this project is going to
continue to move forward and in the next couple years will be
completed?
Admiral Allen. We will seek funding in 2009 for
construction, when the survey and design is done, sir. Just as
a footnote to that, when I was the Fifth District Commander, we
actually had to condemn the roof of that building for a while
until we could make emergency repairs. I am personally
familiar, as a former district commander, what needs to be done
with, and we will take care of it, sir.
Mr. LoBiondo. Thank you. I also understand your housing
authorities authorization expires at the end of this fiscal
year, and I believe it is imperative that the Coast Guard
authorization bill carry renewal of these authorities so that
the service can enter into the public-private ventures to
repair and replace some of the very, I think, just decrepit
conditions for member housing. And some of that is at the Cape
May Training Center. For my colleagues who may not remember,
that is the only recruit training center in the Nation.
I also understand now that you have an issue with OMB that
is throwing up a roadblock for the use of this authority with
the Coast Guard and other services. Can you explain to us the
issue that OMB has raised and what impact it will have on the
service's ability to recapitalize their housing and how you
intend to resolve the situation?
Admiral Allen. Yes, sir, I can explain the situation. I am
not sure I would attribute it to OMB; I think it is a matter of
appropriations law, but I would seek certainly your counsel on
this. The issue is, on a public-private venture, there is a
certain amount of seed money that is provided and there is an
anticipated revenue stream. Let's say for a housing development
that would come through the developer through the housing
allowance that would normally pay to the members; that would be
the income stream to the developer. The problem is this is very
much like a capital lease, where, when you go in and request
the money up front, you have to request the money for the
entire project, as you would for a capital lease scored the
first year. So it is a significant impact on our budget to be
able to hold one of these projects together absent some other
interpretation of the law, sir. That is the problem.
Mr. LoBiondo. Thank you.
Mr. Chairman, I would like to echo what you have said to
the Commandant, Mr. Oberstar, and Mr. Taylor and Commandant
about this whole situation with Deepwater. As you know, we put
a lot of time and energy over the last number of years into
trying to keep this program up and running to try to run
through this mine field that we were in, and this is a very
serious situation that these answers are critical for.
Many of us have been willing to take a step back to let
your investigation go on to be able to come up with these
answers, but somebody has to be held accountable. We can't walk
away from eight ships; we can't walk away from miscalculations.
There has to be something that we can definitively point to to
bring this to conclusion so that we can move on. Unless we
definitively bring it to conclusion with something that is
reasonable, I think we have got a big problem on our hands.
Thank you, Mr. Chairman.
Mr. Cummings. Thank you very much.
Mr. Gilchrest?
Mr. Gilchrest. Thank you, Mr. Chairman.
Admiral Allen, do you get out on boats much?
Admiral Allen. Whenever I can. Two weeks ago I was on our
patrol boats in the Persian Gulf and in the Port of Um Kassar,
sir. It was terrific.
Mr. Gilchrest. That is good. I was just--I had some fear
that you were stuck in the office a lot with all these issues.
Admiral Allen. I am a movable beast, sir.
Mr. Gilchrest. Good. Good. That is good.
Because of the issues that have been raised here this
morning, and everybody is under a budget crunch, a lot of
people, certainly including the Coast Guard, your boats and
Coastees are spread in a lot of different places around the
world as things keep unfolding, so as a result of this,
conditions in the world, the Persian Gulf, what is happening in
the Caribbean and other places, it seems like there is a pretty
good strain on the Coast Guard's budget, so I wanted to ask you
about four specific areas. The President's request doesn't
include anything for icebreakers I believe in the Antarctic and
the Arctic, so I was wondering how that program was going to be
funded. Is that program being cut back? Is the National Science
Foundation a part of appropriating funds? Is the international
community going to be asked to appropriate funds to take
advantage of some of the icebreaking activities down there?
The second thing, I noticed that there is either a cut or
an elimination of cold weather training for the Coast Guard,
especially up in Alaska. What is the status of that?
Number three, long-range vessel tracking issue. Apparently,
the standards have been passed by the International Maritime
Organization. This is, I think, a key component for a lot of
different activities, certainly port security, even vessel
monitoring with our fisheries and the international fishing
community.
And the last thing, about 10 years ago we really made an
effort to interdict drugs in the Caribbean, a lot more money,
different policies, and I wonder how that was going, especially
in light of what is perceived to be a pretty significant trans-
shipment point in Haiti.
So where is the Coast Guard on those four areas?
Admiral Allen. Thank you for the question, sir, and thank
you for your continuing support over the years.
In response to an earlier question, I will summarize. There
are two issues with icebreakers: ongoing operations money and
then the need to ultimately look at recapitalizing the Polar
Sea and the Polar Star. We have got ourselves into a position
over the last several years where the Coast Guard owns the
people and the hulls, and the National Science Foundation owns
the bulk of the money to operate them, and that requires a
reimbursement negotiation every year. I have stated earlier
that is not the optimal way to run this. I would rather have
the money in our base, even if it is not adequate, and be able
to manage it without trying to move it across two agencies. We
had some dysfunctionality this year when NSF was forced to
operate under a continuing resolution until emergency funding
was provided because it capped them and then ultimately
impacted us. So we need to get that straightened out going
forward, sir.
National Academy of Science produced a report last fall
that validated the need for three polar icebreakers: the Healy,
the Polar Star, and the Polar Sea. We are working with the
interagency right now hopefully to get a policy determination
that can be the basis for new authorizing and appropriating
requests going forward in the future fiscal years. I would call
this the policy development year, and in 2009 and 2010 to start
looking a what we need to do to have a permanent solution, sir.
Cold weather training, in the past years there were funds
earmarked in our budget for cold weather training. We intend to
go ahead and pursue that this year. One of the things we are
going to try and do, though, is openly compete the contract.
There is no intent to stop the training, but we would like to
go to an openly competed source for that training, sir.
Long-range tracking, we are in violent agreement there,
sir. That was a great agreement that we negotiated at IMO. As
you know, AIS is a line-of-sight collision avoidance system.
Under long-range tracking agreement, if you are a coastal
State, you are going to have visibility of vessels operating
within 1,000 miles. And if you declare advanced notice of
arrival, it will have to be out to 2,000 miles. There is an
issue of coming to technical standards and then having that
actually go into force. But we are very buoyed by the fact that
we were able to get this agreement made at IMO. We are fully
supportive of moving forward on that, sir.
Regarding drugs, I am pleased to tell you that the first
quarter of fiscal year 2007 was the record year for drug
seizures in Coast Guard history: 97,000 pounds. Nearly 50 tons
of cocaine was taken off the waters of the Caribbean in the
first quarter of this fiscal year. It exceeded our previous
record year two years ago, in 2005, in which we seized 150
tons. That is the result of several factors. Number one is
better intelligence, taking the search out of search and
seizure. But, number two, I cannot overstate the value of armed
helicopters for warning shots and disabling fire. That reduces
our end-game success down--up to almost 100 percent. I think
the only time we haven't been able to do an end-game where we
have used warning shots and disabling fire is by the time our
surface folks got on scene, they were able to repair the boat
and get underway, and we had to leave scene with the fuel
endurance of our helicopter. But this is nearly 100 percent and
just a wonderful, wonderful tool for us, and we are in the
process of converting every helicopter in the Coast Guard
inventory to be capable of using warning shots and disabling
fire, sir.
Mr. Gilchrest. Thank you very much, Admiral.
Thank you, Mr. Chairman.
Mr. Cummings. Thank you very much.
Chairman Oberstar.
Mr. Oberstar. Thank you, Chairman Cummings. You are doing a
great job as our Chairman of the Coast Guard Subcommittee. You
have learned the subject matter, mastered it well, and plunged
into the challenge of working on this extraordinary service to
the United States, the Coast Guard, whose origins go back to
the very first Congress, very beginnings of our Nation as the
Revenue Cutter Service, and from whose personnel I think this
Nation gets the best value for its dollar.
But, unfortunately, the Coast Guard is being asked to wear
more hats than ever before, and a divided personality, so to
speak, in the Department of Homeland Security. That is not a
choice the Coast Guard made, it was one that was foisted upon
it by this Administration and by the Congress, ultimately, in
approving and creating the Department of Homeland Security.
I will place a demurral on the record here: I did not vote
for it, I said it was a bad idea. If we are going to create
this thing, you should not put the Coast Guard in it, you
should not put FEMA in it; resources will be diverted, and that
is in fact what has happened.
The Coast Guard has not had an increase in personnel to
accomplish the new responsibilities that it is being asked to
shoulder in the homeland security era. And over the years that
I have served in Congress, my first term in 1975-1976, we have
added, we, the Congress, has voted 27 new functions for the
Coast Guard to carry out--and you are well aware of those,
Admiral--but we have not given the Coast Guard the personnel
nor the full funding it needs to carry out those
responsibilities. Somehow, the Coast Guard does it, though. And
we expect, I guess, my colleagues in the Congress expect the
Coast Guard to salute, yes, sir, go forward and do the job, and
work overtime at doing it. We need to increase the personnel
and the funding for the personnel. We need to provide adequate
funding for the equipment the Coast Guard needs for its variety
of missions, and this authorization bill is a start on that.
Chairman Cummings has moved out quickly, the Committee is
moving out quickly; Mr. LaTourette is committed to this
process, I know. It is a new responsibility for him; he has
seized upon it. But I fear that, as I reviewed last night I
went through the budget request and your statement, putting on
a brave face, but I think that the funding is inadequate and
the personnel numbers are inadequate, and we are going to make
an effort to raise those sufficiently give the Coast Guard what
it needs to carry out its responsibilities.
I had a chance conversation yesterday morning at a meeting
of the Great Lakes Commission with Admiral Crowley about live
firing on the Great Lakes, and I won't repeat because it was a
private conversation, but it appears that the process of review
of live firing is moving ahead and will soon come to a
resolution of a decision to be made. Could you comment on that
at this point?
Admiral Allen. Yes, sir. And as you know, we have discussed
this several times in the past. It is my intent to take a--and
we are taking a top-to-bottom review, reassessing the potential
environmental impacts, looking at alternatives for type of
ammunition we may use out there where a projectile may be less
hazardous. We have come up with alternative ways to train our
people in other areas of the Country.
Moving forward, when we finally decide what our options
are, we made the commitment, and I will keep that commitment,
to be completely open and transparent about what our options
are and discuss moving ahead. We will do that in full sight of
the public that uses the Great Lakes up there. And we have
listened at the town hall meetings that were held, and we will
forward an open collaboration, sir.
Mr. Oberstar. It was certainly a very responsible and
responsive move to direct Admiral Crowley to conduct these
public forums and, as he said, he has learned a great deal not
only about the Coast Guard, but about a lot of other things
that were on citizens' minds, and that is what Members of
Congress do when they go home and have open forum meetings; we
learn a lot about what we are doing and what we are not doing,
and what else is on the public's mind. So that is a good
experience. But there surely should be some alternatives to
live ammunition. And I fully concur that you can't have the
same experience on land as you get on a bobbing vessel in the
unique waters of the Great Lakes, where the seas are shorter
and choppier and where the weather can turn violent in a matter
of hours or even minutes, and I hope you are considering
alternatives.
Learn also from the Air Force. When the active Air Force
had a facility in Northern Minnesota, at Duluth, and the Air
National Guard as well, and they were doing simulated warfare
activities and they planned to run one of those strafing
activities right over Luoma's Chicken Ranch, and I called the
commandant of the Guard and the commander of the active duty
Air Force and said how many chickens are you prepared to buy?
He didn't know what I meant. I said, you are going to scare the
hell out of those chickens; they are going to die by the
hundreds. He didn't know they were flying over Luoma's Egg
Ranch in Carlton County, so they went back and revised their
plans and sent a copy of it, and I said are you prepared to
file a proposal for exemption from the airspace limitation over
the Boundary Waters Canoe Are Wilderness? Oh, they didn't
realize they were flying over the Wilderness and that it has a
ceiling limitation and that, in any event, military jets
shouldn't be flying over a wilderness, nor do they need to.
So this coordination with civilians and getting public
input and local government input is vitally important so you
don't make some of those mistakes or repeat them in the future.
Can you give me--give the Committee a status report on Cape
Wind at Nantucket Sound?
Admiral Allen. Yes, sir. The agreement that I made--and I
can give you a more extended answer for the record--was that we
would do a waterways assessment related to that.
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Admiral Allen. We are developing the criteria by which we
will do that and do that analysis. The first thing you have to
do is establish the standards and the criteria you are going to
apply. And, ultimately, we are probably going to have these
wind farm projects elsewhere around the Country, so we are
really starting to create what I would call a national standard
on where we want to go with that. So the first thing is to
develop the standards--we are in the process of doing that
right now--and then applying the standards to that specific
proposal as it relates to safety and navigation, the movement
of vessels around there.
And I would be happy to give you an update for the record,
but I think we are right about closure and finishing the
standards, and I have had a recent brief on it and I can pass
that on to you, sir.
Mr. Oberstar. Well, you are right to approach this as a
baseline critical evaluation that will apply, because there are
many other wind projects that are in the planning stage and a
good deal of pressure to move ahead with wind power generation.
The defining issue, though, in this is the interference,
electromagnetic interference that might be created by wind
farms with radar. And as I recall, the FAA did a simulation and
lost an aircraft from their radar screen because of the
projected electromagnetic interference from the wind farm. That
is--the view shed issues, those are other matters that best
left to locals, to the State, but, for our purposes,
interference with navigation is critical, and I assume that is
very high on your evaluation list.
Admiral Allen. Yes, sir. In establishing the criteria to
figure out what is the--maritime domain--report on potential--
as well. We may need, at some point, to seek some clarification
about the who owns the mission space, but we are aware off that
and we are looking at it, sir.
Mr. Oberstar. Okay. You did give me a call about the Coast
Guard investigation of the loss of live with the Healy in
Alaska. Has any further action been taken to deal with the on-
board situation with the personnel who were supposed to
supervise the divers and assure that they had a weight belt,
instead of putting weights in their pockets, and that other
safety measures were appropriately reviewed before they made
that dive.
Admiral Allen. Yes, sir. Several things have happened, and
I am not sure exactly what your last update was, but we
completed an investigation. I took final action on that
investigation. We made that public, posted it on our website.
We held a news conference in Seattle to go over the findings of
the investigation and later, after that point, at that point,
Admiral Wooster, who is the Area Commander in Pacific Area,
actually held admiral's mast on the three senior officers on
the ship. They were in the chain of accountability and they
were awarded punishment at mast. The commanding officer is
retiring and appropriate disciplinary action was taken. We have
also gone out and done a recertification of all the dive
programs in the Coast Guard, are in the process of making sure
that any systemic problems that come out of it, there is a
safety evaluation that is due to come out in the next couple of
weeks that follows the investigation we did, very similar to
like an internal NTSB type, looking at regulators' equipment
and everything that will give us some more detailed things that
we might want to look at regarding safety. We would be glad to
provide that to you when the report is released, sir.
Mr. Oberstar. I would welcome such a briefing. And the
recertification process, I think that is the most important
result.
Admiral Allen. Yes, sir. One of the problems------
Mr. Oberstar. Disciplinary action, that is a separate
matter, but, for the future, lessons learned.
Admiral Allen. Yes, sir. I have said on a couple of
occasions I think we may have been the victim of juniority, and
I mentioned it in one of the earlier questions. We had the dive
program grow very rapidly. We have actually dive operations
that are part of our maritime safety and security teams that
look at piers and hulls of ships, and so forth. With a large
number of people coming in, what that can result at the
beginning, that our people, while they have been certified,
sent to school and are qualified, they may have less time in-
service or less time in that position than they otherwise would
have been, and we are taking a look at that as we go through
the certification program as well, sir.
Mr. Oberstar. Thank you. In another Subcommittee, but maybe
also as part of this authorization bill, we may deal with
invasive species and setting up an enforcement program. I have
had enough of research, of studies, of testing, of declaring
that these invasive species, whether animals or plants, flora
or fauna, are in the lakes. We know they are there; we know
they are destroying the water column; we know they are
displacing native species. We need an enforcement program, and
it is going to be the Coast Guard that will have to carry it
out. Perhaps some participation with EPA and Corps of
Engineers, I don't know, haven't sorted that out yet, but that
is going to take additional personnel and we will need to work
with you to decide what that incremental increase will be so
that we don't load another responsibility onto the Coast Guard
without providing personnel and the funding for personnel that
will be required to carry that function out.
Admiral Allen. Yes, sir. Just to give you a quick update,
we are working with Environmental Protection Agency, the Naval
Research Lab. We are also working with the Animal and Plant
Health Inspection Service. There recently were some concerns up
on the Great Lakes about viral hemorrhagic septicemia that
attacked the fish and whether or not that was related to
ballast water. We are not sure, from a technical standpoint,
whether it is or not, but we need to exclude that as a
possibility. We are also looking, as you know, whether or not
we can establish a ballast water standard for discharge that
would replace now the mandatory salt water exchange that they
do in the ocean before they come in, and the question is how
far do we want to drive that standard down to zero tolerance
for any kind of microbe that might be in the ballast there.
We have got about three different candidate technologies
that could lead us to that and we look forward to, later on in
the year, to be able to come to you and tell you that is what
our recommendation is, sir.
Mr. Oberstar. I am determined that we move ahead, and I
thank you for those efforts and that report. I am determined to
move ahead with an enforcement program. We cannot allow any
further such species into the water column of the Great Lakes,
and we need to proceed with an eradication program for those
that are already there, and I am exploring that option with
EPA, Corps of Engineers, and State Departments of Natural
Resources to--we are seeing an extraordinary phenomenon in the
Harbor of Duluth and Superior where, because of these biotic
changes in the fauna of the water column, if you will, the
steal pilings, for the first time, started to rust. Those
columns have been in the water, some of them, for 50 or 60
years, and we have never seen this deterioration occur. And
there is some evidence that it is microbes in the water--now,
the study is not completed--that are causing this
deterioration. Well, if that is happening, then there is
something else happening that will be the next wave. We have to
attack this issue now; we have had enough and I have had enough
of studies of it. We need an action program.
Admiral Allen. Yes, sir.
Mr. Oberstar. Thank you.
Mr. Cummings. Let me just--thank you, Mr. Chairman.
Let me go to you, Master Chief Bowen. Let me just ask you.
I noted in your report you talked about housing. I want to go
back to something that Chairman Oberstar was talking about when
he was saying that he was wondering whether this budget is
adequate. And you say, on page 3 of your written statement,--
both of your statements were extremely well done and I thank
you for that, and very detailed, but you say the average age of
Coast Guard housing is over 40 years and requires significant
improvement. The Coast Guard faces many challenges to address
its shore infrastructure, maintenance, and recapitalization
programs, and you go on to talk about the problems.
One of the things that we are concerned about is, we are
concerned about Deepwater, but we are also concerned about the
life that--the lives that they experience, the members of your
corps, and I know that is something that you both are very
concerned about too. Do you have the resources that you need to
address the problems when you are talking about the average
housing being over 40 years old? And then I guess what I am
trying to get to also is I don't want us to be in a situation
where something is going on with the Coast Guard and we don't
know about it.
I sat the other day on another Committee, I am also on
Armed Services, and sat in Walter Reed the other day and heard
about all of these horrific stories, and, I tell you, it was
chilling. Do we have--I know Walter Reed is more or less health
care, but do we have any situations with regard to structures
similar to the problems that we talked about at Walter Reed?
Because, if so, we need to address them with the same kind of
vigor that the Congress has now come together in a bipartisan
fashion, by the way, which I am very glad to know we are doing
it this way, to address those problems. And if it is not in
this budget, we need to know what we can do to help you,
because it is one thing if we don't know; it is a whole other
thing if we do know. So can you help me with that?
Chief Bowen. Yes, sir, Mr. Chairman. I appreciate the
question. The first question, do we have resources we need to
address the housing problems. Right now we probably don't. I
think that we are moving forward in our shore infrastructure
needs. I mean, we have $37 million in the 2008 budget and
Admiral Allen is asking for more money in successive years
after that, and he has been raising that question with the--or
that issue with the Administration. So shore infrastructure is
definitely an issue, and right now we don't have adequate
resources to address it.
Now, the question is how bad of an issue is it. As I have
traveled around, some place things are in very good shape.
Other places there is a UPH, for example, on Staten Island that
was in extremely rough shape. In fact, I asked Admiral Allen to
go up and visit it personally. He did that. Probably, it could
have been compared to at least what I have seen in the news
report with that one building on Walter Reed, and we have
taken--he took immediately steps to find money within the base
to deal with that. Significant money is being put towards that
issue now to correct it, but it should have never really gotten
to that point. Bottom line is we definitely need more money in
our shore infrastructure, sir.
Mr. Cummings. Let me--Admiral, did you want to comment on
that?
Admiral Allen. I almost passed the Master Chief a note
saying talk about New York. We had made several trips. New York
is a very high tempo operation and we have a barracks for our
enlisted people on Staten Island. They developed a mole problem
there and, quite frankly, it got behind the building local
command to deal with and required some senior management
intervention. I was cued to the problem by the Master Chief's
visit. I visited myself. We are in the midst of a two-year,
two-stage process to go in and completely make repairs inside
the building, most notably, upgrade the HVAC system so we have
got better air handling and to better address the problem.
Where we find that, you are duty-bound by leadership to go
in and fix it.
Mr. Cummings. But, Admiral, I want to go back to what you
said a few minutes ago when you said you present your requests
as you go, and I appreciate that. Remember a few minutes ago,
hour ago?
[Laughter.]
Mr. Cummings. Is this one of those situations where you are
presenting your needs as you go or are you taking from
somewhere else to try to remedy this problem? In other words, I
am trying to figure out do we need more money to try to address
the things that go to, as Chief Petty Officer Bowen said, he
says that these kinds of things have a direct impact on the
health, safety, and morale of our service members. So I just
want to make sure that we are doing--I think you have heard on
this side and I think on both sides that we are pretty much
questioning whether or not this is enough money for you to do
the things that you need to do. So I don't want to see a
situation where we are placing on the back burner, if not
completely off the stove, the things that go to the morale of
our folks. So I guess maybe that is not--maybe that is a hard
question to address. I don't know, the Administration may have
one view, you may have enough, but we are just trying to do
what is right for our military.
Admiral Allen. Sir, it is not a hard question to answer at
all. We need more money in the shore account, and I am going to
move it up as we go forward. And we may have to make tradeoffs
on what is more important, but right now this is pretty
important to us, sir.
Mr. Cummings. All right.
One other question, Chief Officer Bowen. You also talked
about health care, and I am just wondering, you mentioned
TRICARE, you talked about so many of your folks being in rural
areas and you talked about a number of issues under health
care. What would you like to see us do under health care? I
mean, anything?
Chief Bowen. I think for the Coast Guard------
Mr. Cummings. Yes.
Chief Bowen.--we have unique issues that stem from our
personnel being in high-cost, remote areas, and they don't have
access to DoD. I appreciate what has been done with the TRICARE
Prime Remote system, and that has helped immeasurably. Yet, it
hasn't really solved all of the problem. There is tremendous
out-of-pocket expense for our people when they have to leave
their place of duty and travel a long way to obtain care. I am
not sure what the answer is, but I do know that the Coast
Guard, this type of problem, it affects us a lot more than the
other services.
Mr. Cummings. Yes, sir.
Admiral Allen. Thank you, Mr. Chairman, for that question.
I would invite your attention to Section 303 of the
authorization act that we put forward to you this year. We are
seeking an amendment to Title 10, U.S.C. 1074, which is the
base for reimbursement when our families have to travel for
health care, and it basically says if you have to travel over
100 miles to get health care, what you can reasonably do in a
day, that you should be reimbursed for travel expenses. We have
a unique situation in the Coast Guard where we have some
families that are within 100 miles of health care, but they are
on an island. So, technically, they are within the geographical
boundaries that wouldn't allow reimbursement, but for them to
get that care requires them to actually travel. We are asking
you, through the Coast Guard authorization bill this year, to
give us that benefit, sir.
Mr. Cummings. Let me just ask you this last thing, Admiral.
The Coast Guard Academy, the cheating scandal, how often does
the board meet, the board of the Coast Guard Academy, do you
know? The Board of Visitors. Do you know?
Admiral Allen. Recently, not often enough, sir. That is
something we are looking at, whether or not we need to
reinvigorate that. I can give you the details when the last
visits were made. There are two, I am not sure I would call
them governing bodies because it is not a traditional
university. We have an internal flag and NSC Board of Trustees
and there is a Board of Visitors.
[Insert follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Admiral Allen. My understanding is that has not been as
active in the past as it had been a few years ago. One of the
things we are looking at in our top-to-bottom review of the
Coast Guard Academy is how we might use the Board of Visitors,
moving forward, to help illuminate some of the issues there and
create more transparency on what is going on there.
Mr. Cummings. I am sure you are aware I sit on the Board of
Visitors for the United States Naval Academy, and we meet at
least four times a year, and it is extremely helpful, I think,
because it just keeps things--the Board is informed; the Board
is able to have input; and I just think it is a good thing. And
I would suggest very strongly that the Board meet at least
those four times a year. And would you keep me abreast of your
progress with regard to those issues?
Admiral Allen. Yes, sir. Your question is timely; we have
been talking about it, and I will definitely get back to you,
sir.
Mr. Cummings. Thank you very much.
We really appreciated your testimony.
To the other panelists, we have two votes, so it is going
to be probably about, I guess, at least a half an hour,
somewhere in the area of a half an hour. We will resume the
hearing in a half an hour from now.
Admiral, Chief Petty Officer, thank you very much. We
really appreciate it. We will have some follow-up questions,
because there are a lot of things I did not get to, the whole
issue of folks trying to enter this Country and the changes
that you want with regard to people coming, the criminal
action--the standard for criminal activity. I want to get into
that. We have some specific questions I want to ask about that,
okay?
Have you said everything you needed to say?
Admiral Allen. Well, sir, I would only reiterate my offer.
I would really like you and any Committee Members that would
like to travel with me to Pascagoula, it would serve two
purposes. We could have in-depth discussions on the plane going
down and we could actually go down and kick the tires on the
National Security Cutter, and I think we need to do that, sir.
Mr. Cummings. I am going to strongly--I am going to do
that, and I am going to strongly suggest that other Members of
the Committee come with us. We just have to come up with a
date. But that is a part of our accountability mission, so we
look forward to doing that.
Admiral Allen. Thank you, sir.
Mr. Cummings. Thank you very much.
We will see you all in a half an hour.
[Recess.]
TESTIMONY OF RICHARD L. SKINNER, INSPECTOR GENERAL, DEPARTMENT
OF HOMELAND SECURITY; STEPHEN CALDWELL, DIRECTOR, HOMELAND
SECURITY AND JUSTICE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Skinner. Today, I intend to discuss the challenges
facing the U.S. Coast Guard, in particular its Deepwater
Program, and the efforts underway to improve the management and
oversight of this very important and complex acquisition
initiative. Over the past two and a half years, my office has
completed four audits involving Deepwater. They involve the
110/123 Cutter conversion, the National Security Cutter, the
Command and Control and Information Technology Systems of
Deepwater, and the re-engineering of the HH-65 helicopter.
Four common themes have emerged from those audits. First,
the dominant influence of expediency. That is, scheduled
concerns trumped performance concerns. This is best illustrated
by the National Security Cutter procurement. The Coast Guard
proceeded with the construction of the NSC, knowing well in
advance that its technical experts and others had engineering
design and future performance concerns. The design and
performance concerns still remain outstanding today, as you
know, and as you heard from the Commandant, and the cost to
mitigate those concerns has yet to be determined.
Second, the terms and condition of the contract are flawed.
The Coast Guard essentially agreed to ride shotgun, turning the
reins over to the systems integrator, ICGS. Consequently, the
Coast Guard was reluctant to exercise its authority to
influence the design and production of its own assets.
Third, our reviews have raised concerns with the definition
and clarity of operational and performance requirements. This
has compromised the Coast Guard's ability to hold the
contractor accountable. For example, we just recently issued a
report dealing with the 110/123 Cutter conversion. The
performance specifications associated with upgrading the
information systems on the 123 Cutter did not have a clearly
defined expected level of performance, causing the Coast Guard
to accept delivery of assets that did not meet its anticipated
requirements or specifications.
And, finally, simply put, the Coast Guard does not have the
right number and the right mix of expertise to manage an
acquisition as large and as complex as Deepwater. Many of the
staff who have been assigned to Deepwater have little
experience or training in performance-based contracting and
little experience in a systems integrated contract initiative.
These issues are not new; they were known as early as February
2003, only eight months after the award of the Deepwater
contract to ICGS. This lack of a proper foundation remains a
challenge to this day and, as a result, the Coast Guard has
encountered a number of implementation problems, which have
resulted in cost increases, schedule delays, and reduced
operational performance.
I believe that it is important to point out that the Coast
Guard recognizes these challenges, and we heard that from the
Commandant this morning, and, in fact, is taking some very
drastic steps to take back the reins and turn this thing
around. For example, it plans to use independent third-party
assessments of contractor performance, that is very important.
It is consolidating its acquisition activities under one
directorate. Again, that is very important. And it is
redefining the terms and conditions of the Deepwater contract
as we speak.
Furthermore, and most importantly, the Coast Guard is
increasing the staffing for Deepwater and reinvigorating its
acquisition training and certification processes to ensure that
staff have the skills and education needed to manage the
program. The Coast Guard has also advised us that it is taking
steps to improve the documentation of key Deepwater decisions.
This is particularly important to ensure transparency and
accountability as the program moves forward. These steps should
significantly improve the level and oversight exercised over
the program.
However, many of these corrective measures will take time.
It will require changing the culture, and it will take
considerable amount of time to train and obtain the experience
that is needed to manage a contract of this nature. Until this
is accomplished, the Coast Guard needs to proceed with caution,
taking advantage of all the tools at its disposal to mitigate
risk and avoid future problems.
I will conclude by saying that my office is highly
committed to the oversight of this and other major acquisitions
within the Department. This year, in addition to a series of
sector-specific audits dealing with Deepwater, we plan to issue
a first in a series of report cards on the Coast Guard's
management of its procurement responsibilities under the
Deepwater program. Specifically, we will be grading the Coast
Guard's organizational alignment and leadership, policies and
procedures, acquisition workforce, information management and
technology, and financial management. This will enable us to
measure the progress of the Coast Guard in years to come and to
improve the management and oversight of the Deepwater program.
Mr. Chairman, that concludes my remarks. I would be happy
to answer any questions.
Mr. Cummings. Thank you very much.
Mr. Caldwell?
Mr. Caldwell. Chairman Cummings, Mr. LaTourette, thank you
for inviting GAO here today. And, Mr. Cummings, congratulations
on becoming Chairman.
Mr. Cummings. Thank you very much.
Mr. Caldwell. GAO has provided this Committee with a number
of reports and testimonies over the years, and we appreciate
the opportunity to help you with your oversight. Both the scope
of this hearing as well as my portfolio at GAO covers a wide
gamut of activities covered in this 2008 budget. My statement
today focuses primarily on Deepwater.
As you know, Deepwater is a major part of the budget,
representing about 88 percent of the AC&I budget and almost 10
percent of the Coast Guard's budget as a whole.
From a budgetary perspective, two interesting things stand
out about the Deepwater program from an overall perspective.
First, the amount of funding for Deepwater, as you know, has
gone down 27 percent from the 2007 to 2008 budget. This is a
substantial decline at a point in the program where plans had
originally called for ramping up production and delivery.
Second, and perhaps partly an explanation of the first, is
that the unobligated balances for Deepwater have become very
large; they are currently at $1.6 billion. In some cases, these
unobligated balances are for assets that are behind schedule,
such as the FRC and the VUAV. And in these two cases the Coast
Guard is basically taking a ``strategic pause'' to re-evaluate
its approach to those assets. But in other cases the
unobligated balances are for assets that, at least according to
the latest data, are on schedule, such as the NSC.
In terms of Coast Guard management of the Deepwater
program, since about 2001 GAO has issued a number of reports
talking about the risks of the program given the Coast Guard's
overall approach_which was relying on a single lead integrator,
developing a system-of-systems, and using a performance-based
contract. All three parts of this approach, if not done
correctly and with the appropriate oversight, can have
substantial risk, and we have seen a lot of that risk played
out recently.
My statement also refers to our 2004 report in which we
made a number of recommendations to the Coast Guard. The Coast
Guard is acting to follow up on some of these recommendations
that are still open. We have ongoing work to look at those
recommendations and we will report back to you once that work
is done.
In terms of asset delivery, there actually is some good
news out there. As noted in Figure 1 of our report, page 20,
seven of ten key new assets are actually ahead of or on
schedule for delivery, at least that is true of the first-in-
class assets. However, one of the assets that is on schedule,
the NSC, as well as two of the assets that are behind schedule,
the FRC and the VUAV, still face significant structural design
or developmental problems.
As some of the earlier assets are actually reaching the
delivery phase, GAO's work has shifted beyond just reviews of
the overall contract management to reviews of the individual
assets. Unfortunately, we found additional problems with those
areas as well. Our report last spring on the FRC noted problems
that had ultimately led the Coast Guard to suspend the design
of the program. And, similarly, the recent reports by the IG on
the NSC as well as the 123 boats have shown similar problems.
These asset-specific difficulties have shown that the
problem has really expanded well beyond the abstract area of
contract management and acquisition reform to one of
operational effectiveness. This is best illustrated with the
current situation of the patrol boats, where you have the FRC
further delayed by the design problems and you have the eight
123 boats that are now out of service. This, of course, has a
key impact on the Coast Guard achieving its missions that we
know are so important to the Members here on the Committee,
such as search and rescue, interdiction of migrants, protection
of fisheries, national defense, and obviously port security
issues.
Admiral Allen, in his testimony today before this
Committee, as well as in some of the other testimonies that he
has done, has outlined a number of steps that he plans to take,
and he clearly places a priority on giving the men and women of
the Coast Guard the best ships and aircraft they can get as
soon as possible. He has referred to this as the ``Promise of
Deepwater.'' GAO stands ready to assist Congress, working with
the Coast Guard, and, of course, applying our due diligence as
auditors, to try to make that same promise happen.
Thank you very much. I would be happy to answer any
questions at this time about Deepwater or any other Coast Guard
issues where GAO has done work. Thank you.
Mr. Cummings. Thank you all very much.
Mr. Skinner, were you in the room when the Admiral
testified?
Mr. Skinner. Yes, I was.
Mr. Cummings. Were you, Mr. Caldwell, were you here?
Mr. Caldwell. Yes, I was.
Mr. Cummings. Oh, good. Why don't I start off by asking you
all what was your--was there anything in particular that
concerned you about what the--anything that the Admiral said? I
mean, it is fortunate that you all were here to hear it. I wish
he could have been here, and I know he--I didn't expect him to
be here to hear your testimony, but, I mean, is there anything
that really concerned you? I know that there was great concern,
and I expressed it, about the fatigue life, and we on this side
have heard that explanation at least three or four times, I
guess. But I think it was you, Mr. Skinner, who had much
concern about that, and I am assuming that I asked the question
properly when I said that it was your contention that we were
not getting what we originally bargained to get, no matter--and
what the confusion may have been. You apparently have a very,
very clear understanding of what, based upon, I guess, the
written documents, I guess, and the interviews, I guess------
Mr. Skinner. Yes.
Mr. Cummings.--of what we were supposed to be getting. Now,
what was your reaction to what he had to say?
Mr. Skinner. This is one area where the Admiral and I have
agreed to disagree. When we initiated this audit, we actually
started in 2004, we had to close it down because of cooperation
issues, which we have since resolved and restarted in------
Mr. Cummings. By the way, let me, on a separate note,
before we even move on, have you been getting the cooperation,
overall, that you need to do what you are responsible for
accomplishing here?
Mr. Skinner. Yes. Now we are, yes, we are, especially since
we have issued our report.
Mr. Cummings. Good. All right, go ahead.
Mr. Skinner. The Commandant, Admiral Allen, has been
cooperating 110 percent and we are getting everything we need
right now_access to documents and people_to do our job.
Mr. Cummings. Good. I just wanted to make sure. Sorry to
interrupt you.
Mr. Skinner. When we did start this job, we started with
the contract itself. According to the contract, the Coast Guard
would build a Cutter that could be 230 days underway. The
contracting officer, at that point in time, agreed that this
meant the specs were 230 days underway. The project manager
also agreed that, yes, the intention was to build a ship that
could be underway for 230 days. The chief systems engineer also
advised us, yes, the specs were written to suggest that the
Coast Guard would build a Cutter that would be underway for 230
days. We have talked to the two contractors who were brought in
by Coast Guard to evaluate the design. They both agreed that
their evaluation was based on a cutter that should be underway
for 230 days. We talked to Carderock, who also did an
evaluation of the design, and they too agreed that the contract
and the specs and the request to re-evaluate the design was
based on the premise that this Cutter should be underway for
230 days.
It was not until the summer of 2006 that we first saw
correspondence that would suggest that the Cutter was only
going to be built to meet a spec of 185 days. That
correspondence was generated by the contractor, ICGS, to the
Coast Guard, requesting the Coast Guard to change the contract
language to ensure that there was no misunderstanding that the
contractor was building a Cutter to be underway for 185 days,
not 230.
A new management team has now arrived at the Coast Guard.
They collectively, and the contractor, ICGS, have agreed that
the original intent was 185 days, not 230, and that is where we
are today.
Mr. Cummings. Let me ask you this. Why is that so
disturbing to you? First of all, I am assuming it is
disturbing.
Mr. Skinner. Yes, it is, or else we would not have reported
it.
Mr. Cummings. Okay.
Mr. Skinner. For several reasons: one deals with
operational issues. We are building--right now we have 12
Cutters. We are replacing those Cutters with 8 Cutters. Why?
Because we are building a Cutter now that has a greater
operational capability. Secondly,------
Mr. Cummings. And was that--to your knowledge, was that
part of a calculation from the beginning?
Mr. Skinner. Yes.
Mr. Cummings. Okay, fine. Is that written anywhere?
Mr. Skinner. That was our understanding.
Mr. Cummings. That was your understanding?
Mr. Skinner. Yes.
Mr. Cummings. From the--is that written anywhere?
Mr. Skinner. I believe that is, and I could validate that
through a review of our work papers. It is_I believe Admiral
Allen has also testified to that effect, the reason we are
building 8 versus 12, because of the operational efficiencies
of the new Cutters.
Mr. Cummings. Okay.
Mr. Skinner. The second thing that bothers me about this is
that we are building a Cutter that will be underway for 185
days, and the operational profile for that Cutter is to have
the capability to be underway for 185 days, not the 230 days as
specified in the contract. The Coast Guard's historical
analysis of how long you can expect these Cutters to be
underway on any given year is 185 days. The question that we
are asking is, for example, if you want to build a bridge that
can maintain a capacity of 500 million tons at any point in
time, you would not build a bridge that could only maintain a
capacity of 500 million tons. You have no surge capacity. The
Cutter does not have the ability to surge, for example, and
that, again, puts the ship at risk.
Mr. Cummings. And you are basing that also on the 8 to 12,
right? In other words, moving from 12 to 8.
Mr. Skinner. Yes.
Mr. Cummings. Okay. All right. I get the analogy.
Mr. Skinner. And the third thing is simply that when your
contracting officer, who signed the legal document on behalf of
the Government, when your project manager, systems engineer,
and those that are reviewing the design, all collectively agree
that this contract said 230 days, yet they are only delivering
a product that could only be underway at 185 days, that simply
raises a red flag to us. Of course, the new contract that is
being negotiated will say 185 days. That is my understanding.
Mr. Cummings. Did you want to comment, Mr. Caldwell?
Mr. Caldwell. We didn't do the work on the NSC, so
obviously I will defer to Mr. Skinner on that issue. But
getting to your bigger question about whether there are any
areas of concern about things that the Commandant said, there
are a couple of areas. First, let me start with the good parts,
which is he clearly recognizes the problem, he is clearly upset
about it, and he is taking accountability for what the Coast
Guard has done so far. He is laying out plans to try and get
the program well.
But the two areas where there might be a little concern is
the hope that he can renegotiate with the contractors about
some of the problems we have had in the past_in some cases the
contract as it was signed may dictate accountability. So it may
be fairly hard to pin down accountability in a way that you
would like, Mr. Chairman. There may have been vague terms in
the contract because of the way the contract was written,
because the criteria was loose; which is another thing that Mr.
Skinner has talked about. Just to reiterate that first point,
it is not clear to me how much the Coast Guard can renegotiate
accountability for some of these past problems that have
happened. Going forward, of course, you have negotiation
leverage, but on some of the past problems, probably not.
The second thing------
Mr. Cummings. Could you hold that note? Hold that one right
there.
How do we--I mean, basically you are saying that we are
bleeding money. And I am trying to figure out--I mean, you are
right, there are some things that has got to be within the four
corners of the contract. But then I am wondering is there
anything that we can do now to make sure that we at least stop
the bleeding that we can stop, assuming that there is some
bleeding? Are you following my------
Mr. Caldwell. Yes.
Mr. Cummings. Some things we may not be able to do anything
about.
Mr. Caldwell. Yes. I think that the biggest problem is not
with the NSC; though that has problems and the IG here has
noted those. But there will be a solution, and I think the
solution will cost money, but there will be a solution to the
NSC problem. The biggest concern of mine, as it was obviously
to Rep. Taylor here, is the 123 conversions. That is going to
be the hardest one for the Coast Guard, with its forensic team,
to actually show that there was some kind of accountability
that the contractor has to take. The contractor could
successfully say the Coast Guard also has to take some
accountability. There may be some issues where the Coast Guard,
either because of its criteria that was loose or some other
things that were going on, would allow the contractor to escape
financial accountability.
Mr. Cummings. Do you know whether the contractor has
acknowledged the problem?
Mr. Caldwell. I have been to a couple of hearings where the
contractor has testified and I have not heard that.
Mr. Skinner. To our knowledge, the contractor has not
acknowledged the problem.
Mr. Cummings. I am sorry, I didn't hear you.
Mr. Skinner. To my knowledge, the contractor has not
acknowledged the problem.
Mr. Cummings. That is incredible.
Mr. Caldwell. Just on the 123 boats. The one observation I
made is that one of the contractors testified that the hulls on
the 110s were in worse shape than expected when they got them.
They thought that was part of the problem, as opposed to them
having done something wrong.
Mr. Cummings. And you had two points.
Mr. Caldwell. Yes. And my other point on the Commandants'
testimony has to do, with the time frames for fixing the
problem. The Commandant is obviously very committed to taking
steps to fix the problems; he has given you a promise that 120
days after your first hearing, he wants to clearly lay out the
plans he can put into place. But I think both the work of the
IG and GAO has shown that the Coast Guard just don't have that
acquisition oversight structure in place yet. It does not
happen overnight and it does not happen within a period of
weeks or months. They need to get more people there, they need
to get the right skills; they need to catch up just on the
backlog of things. There are still a lot of undefined tasking
orders and things like that that need to be clarified, so------
Mr. Cummings. Well, one of the things I am going to do----
--
Mr. Caldwell. While I appreciate the Commandant's optimism,
this is a situation where his own people will try his patience,
because there is a lot to do.
Mr. Cummings. His own people will what?
Mr. Caldwell. His own people will try his patience. The
Commandant wants things to happen very quickly here, and I am
sure his people will try to do that. But it will take time to
get this new acquisition structure in place, and to get the
additional people there.
Mr. Cummings. So I guess you all can kind of understand Mr.
Taylor's frustration and other Members' frustration, because
you are basically stating exactly why we are frustrated.
This $24 billion, do you see any way that we can stay
within the boundaries of the $24 billion at the rate we are
going, Mr. Skinner?
Mr. Skinner. No, I don't. And when you asked me are there
statements that the Commandant made that would give me pause,
first, I would like to reiterate that there were a lot of
things that Admiral Allen is doing. He is doing the right thing
through the reorganization, redefining the contract, giving
technical authority to his chief engineers, and re-energizing
his staff, trying to get the right people in there, but that is
going to take time.
But what concerns me right now is_this June we will be
redefining, rewriting,and renewing the contract, and this will
be a great opportunity to sit back and to redefine what the
budget and program baseline is going to be now and for the out-
years, because there has been a lot of setbacks. They were
costly setbacks, and that, in effect, has to have a major
impact on the original estimate of what the total costs were
going to be. So, if we are rewriting the contract, then we need
to also step back and rewrite the budget and program baseline.
And this is also a great opportunity to rewrite our
performance requirements, that is, what we expect at the end of
2007 and how much is it going to cost; what do we expect at the
end of 2008 and what it is going to cost, and through the out-
years so that each year the Coast Guard and the Congress can
manage or provide oversight of where it is going. Any time you
have a cost overrun, something else is going to suffer. We
issued a report last year dealing with command, control,
communications, computers, and intelligence, reconnaissance,
and surveillance. One of the things that is being shortchanged
is that particular aspect of the Deepwater program. As they
have cost overruns in one area, other areas are going to
suffer. As a result, total costs are going to go up. This is a
great opportunity now, this summer, to define exactly what it
is going to cost under this new contract.
Mr. Cummings. Let me just ask Mr. LaTourette to go forward
with just one question and then I am going to come back.
At the rate we are going, if we don't do something like
what you just said, I guess this contract could go on forever,
we not get what we bargained for, and we are paying. And we can
be paying big bucks for a long time, probably beyond our
lifetimes.
Mr. Skinner. That is correct. And this is Acquisitions 101.
It is impossible to be transparent if you don't know what you
are buying and what your estimates are and what your plans are.
This is a long-term project, and we need to sit down and really
think it through. We can't do it all in one year, five year,
ten years, fifteen years; this is a 20, 25 year effort. But we
need to, to the best of our ability, define our goals, and each
year we need to be making adjustments as we learn more and as
we move forward.
Mr. Cummings. Well, one of the things that we are going to
do, since the Admiral isn't here, if there are things that you
all are recommending, we are going to get a letter to him. I
mean, I know a lot of this is in your testimony and whatever,
but other things we want to get that to him, because--and by
the way, Mr. Caldwell, it was our suggestion, not the
Admiral's, that he come back in 120 days. We just felt that he
needed to come back and give us--but, one of the things that I
wanted to do is ask him to give us like a 60-day between the--
in other words, before the 120 days, 60 days before that give
me something in writing telling me where you are, what you are
doing, and we are going to make that, some of the suggestions
that you are making, a part of that letter. But understand all
we are trying to do up here is get efficiency and
effectiveness, and this seems--I am telling you, I have never
seen a contract like this. It seems like it is indefinite and
it certainly, it seems a bit ambiguous and it is indefinite
with regard to quality, quantity and cost. Boy, that is a hell
of a contract.
Mr. Skinner. As written, Mr. Chairman, I think this is one
of a kind, so I would be surprised if you said you saw
something like this before, because I don't think there is
anything like this.
Mr. Cummings. Is that right?
Mr. Skinner. Not to my knowledge.
Mr. Cummings. How about you, Mr. Caldwell?
Mr. Skinner. We have system-of-systems contracts, we have
performance-based contracts. That is fine, and I think this is
the way to go, and I do support the Coast Guard's decision to
go this way, to partner with the private sector, because you
need to bring that innovation to the table. We in the
Government do not have that. But we need to be a little bit
more definitive--not a little bit, we need to be definitive in
how we write what our roles are and what the contractor's role
is. There has to be a balance. Right now there is an imbalance
and it is leaning toward the contractor.
Mr. Cummings. Mr. Caldwell?
Mr. Caldwell. Three comments, one to follow up on your
comment on the 120 days. I think it is a great idea to have
that hearing in 120 days because I think that Admiral Allen is
still in the process of getting his structure in place and his
policies in place, and he will have done so in 120 days. I
guess what I was trying to say is that the implementation is
what takes a while.
The other issue you raised, in terms of the $24 billion, I
think there are maybe three areas of uncertainty that could
lead to higher costs overall. One is the uncertainty about the
cost of the individual assets. There has been cost growth in
some of the assets as they come closer to delivery. The NSC is
one example of that. There is also some uncertainty as to
exactly how the integrated logistics and maintenance package is
going to work. You haven't had a lot of assets delivered,
actually turned over to the Coast Guard where they have had to
maintain them. And so I think there is some uncertainty of the
role the contractor will have versus what role the Coast Guard
will have. And you don't want to have a situation where they
are duplicating each other's capabilities just to make sure
that these things are operating.
I think the third area of uncertainty is perhaps one of the
vaguest parts of the whole contract_the ultimate goal is a
system-of-systems. Each asset is interdependent on the others
to get to that ultimate goal. One of the issues you have now is
the NSC will be deploying without the VUAV. One of the issues
with going from 12 legacy Cutters down to 8 National Security
Cutters is that you have the VUAV, which would provide much
greater coverage to the NSC in terms of area. Now I think there
is a six-year delay in the VUAV. So you get to the point where
you have got some of your assets and you realize you still
don't have your system-of-systems yet in terms of capability.
There are maybe two things to do, first there may be quick
fixes to C4ISR or something like that to expand the
capabilities relatively cheaply, or you may need to buy more of
the assets in the end.
Mr. Cummings. All right, thank you.
Mr. Caldwell. And just one last thing. There are some other
contracts that look something like Deepwater in the Government.
One is the SBInet program, which is also managed by the
Department of Homeland Security. GAO is doing some work on that
one. That one has some similarities to Deepwater. I think that
with appropriate oversight they will make sure that doesn't
turn into where we are with Deepwater now. And the other
contract is one that I am not that familiar with, but it is the
Army's Future Combat System contract.
Mr. Cummings. All right.
Mr. LaTourette.
Mr. LaTourette. Thank you, Mr. Chairman.
And thank both of you for your testimony today. I want to
focus on the contract for a minute because we did have a
hearing and the contractor was here, and I don't know if it is
a disagreement or not, but they did acknowledge the problem;
they just didn't acknowledge the responsibility. And I think
that anybody that works for the contractor that would come
before a panel of Congress and admit that they owe us $100
million probably wouldn't be working for the contractor very
long, so that doesn't surprise me that that happened.
But on the contract, I mean, I guess I would like to know,
when you are doing your reviews and making recommendations and
writing reports, is there sort of a time when everybody sits
down and there is an instruction on how to write a contract
that we don't find ourselves in this situation? I mean, it
does--let's focus on the 110-foot boats, for instance. I mean,
talking to the Commandant and talking to the contractor, you
are right, we have now gotten this he said-she said, the hulls
were bad and we didn't do it and we shouldn't have done this,
and so forth and so on. And just from the little bit I know
about it, I think somebody owes the Government some money for
those conversions.
Is it your evaluation as a result of reviewing the
contracts that we may not have recourse?
Mr. Skinner. That is currently being reviewed by the Coast
Guard and the General Counsel, and we are also going to be--
although we may not be at the table, we are going to be
providing oversight of how those negotiations turn out. But,
yes, there is a possibility that the Government may not have
to--or has no recourse against the contractor because of the
way the contract was written, because the specifications were
so vague_it allowed a lot of discretion for the contractor to
provide what he thought was the right thing. There is that
possibility, but I wouldn't want to jump to a conclusion that
there is no recourse.
Mr. LaTourette. But when these contracts are written, I
mean, somebody sits down and actually writes the contract or
agrees to the contract on behalf of the Government. How do we
get such a lousy contract? I mean, isn't there sort of a
Government-wide contract where we protect ourselves?
Mr. Skinner. I wish there was, but, because everything we
buy in the Government is going to have a different requirement.
this is not feasible in this particular case, the best that we
can determine_and we are going back pre-DHS. We are going back
to the late 1990s now, and 2000, 2001, 2002 time frame,
building up to that contract, and one of the things that become
evident when we look at the history and reconstruct what
happened, is that the Coast Guard has never ever entered into
an arrangement like this in their history, and they did not
have the expertise to be negotiating a contract like this
unilaterally. And I think they did receive some technical
advise from the Navy and maybe from others who cautioned them
to proceed with caution; however, because of the lack of
expertise, that is how they found themselves in this situation
we are in today.
There are other contracts, for example, like SBInet, that
the Department has entered into, and they have used lessons
learned from Deepwater to tighten up the controls over that
contract. For example, instead of a 25-year contract, it is a
three-year contract. There are exit ramps or exit clauses if we
don't like what you are giving us. We can get out without
penalty. We are more heavily involved in SBInet in the
subcontracting. We can make the decisions of make or buy;
whereas, under the Deepwater contract, the integrator made
those decisions. So there are lessons learned in SBInet that
you won't see in Deepwater.
Mr. LaTourette. Let me ask you this just from a good
government standpoint. I mean, it amazes me that we could enter
into a $24 billion contract with somebody and not be protected,
and if it is a lack of expertise, what would you think if,
here, the Congress said, you know what, pick a number,
anything, anybody that is going to buy anything over a billion
bucks, we have to have Joe, the contract guy, look at it; I
mean, it doesn't matter whether you are from the Coast Guard or
the DoD or the Interior Department. I mean, do we have to do
something like that or do you think that everybody is competent
and this one just got screwed up?
Mr. Skinner. I think it is the latter. And one of the
things that I am seeing right now with Deepwater is that the
Department's procurement office, and the Chief Procurement
Officer, Elaine Duke, with Department of Homeland Security, is
now more actively engaged in providing technical assistance,
advice, and oversight as they proceed through this negotiation
process.
Mr. LaTourette. And let me ask you this. You seem to
express some hopeful optimism that when this contract is up in
June or July, whenever it is, that things are going to get
better. My understanding of the contract is that it is a five-
year contract and then it has sort of a grade-out, and they
have just completed that grade-out process, and based upon the
grades that the integrator got, I guess it is a 43-month
extension is what they have earned based upon their scores of
76 and 60 and things like that.
But based upon both of your reviews of the contract, the
existing contract, is there a lot, do you think, the Coast
Guard can do to fix the things that you find problematic in the
existing contract?
Mr. Skinner. Yes, and we have made recommendations to that
effect. And you hit it up on the evaluation as a basis for the
extension. Actually, I think the final score was somewhere
between 83 and 87, which gave us grave concern because you had
the FRC, you had the 110/123 conversion problems, you had the
NSC problems, you had the unmanned aircraft problems. How could
you score a B and deserve 43-month extension? And that is
because_the way the contract was written_again, it was flawed.
The evaluation was based on final deliverables, so, therefore,
the 123, the final deliverable had not been made; the NSC, the
final, all eight, had not been made; the FRC, the finals had
not been made. So, therefore, they weren't evaluated on their
failures, they were only evaluated on those final products. I
understand that is going to be rewritten as well.
Mr. LaTourette. Good. And let me ask both of you this. I
heard you and Mr. Caldwell say that three components to this,
one of the components being the integrated contractor. Just
your thoughts on--I also heard you say, Mr. Skinner, that you
think that it is nice that they partnered with the private
sector. But I have to tell you, from the last hearing that the
Chairman had where we had the integrator here, I am not so
crazy about the way that it is set up, and I just want you to--
if you could just give me your thoughts on the structure that
has Northrop Grumman, Lockheed Martin being the integrator, and
most of the business is going to them at the end of the day,
too.
Mr. Skinner. It is--after reviewing it very closely, I
mean, it is difficult for me to comment on whether the
structure is adequate or not. They went through a very lengthy,
I think a two-or three-year process, to pick these two
contractors to work in partnership and to work in partnership
with the Coast Guard. That, in and of itself, I don't think is
the problem. I think the problem is, one, is clearly defining
what your operational requirements are, holding them to those
requirements, having someone--right now they are self-
certifying--having someone independent------
Mr. LaTourette. Right.
Mr. Skinner.--validate what they are delivering to you.
Also, we need to be more actively involved in the decision-
making process. After all, it is a partnership.
Mr. LaTourette. Right.
Mr. Skinner. We turned over the reins to them. That was a
big mistake. We need to partner with them. When they give us
design proposals, we should be making the final decision
whether, one, that design meets our requirements; two, whether
we want to buy that from you or we want to shop somewhere else
to buy that requirement.
So it is the design of the contract, I think, and the
oversight expertise that needs to be addressed.
Mr. LaTourette. And I think when I say I am not crazy about
it, I mean, I think the problem that I have with it is the
gatekeeper really doesn't have any incentive to keep the gate
is the problem.
Mr. Caldwell, do you have a thought on the integrated
contractor structure?
Mr. Caldwell. Yes. In some of our past work we found that
the integrators perhaps weren't integrating as well. Northrop
Grumman was doing vessel side and Lockheed Martin was doing the
aircraft side, and in some cases it resulted in separate
proposals or parallel proposals going to the Coast Guard, as
opposed to an integrated proposal. The reason the Coast Guard
went with a system integrator like this is to do that kind of
integration. So in some cases I think they have been
disappointed that a higher level of integration hasn't
happened. We, of course, have found some evidence of that.
In terms of moving forward, you had asked a question about
how the Government can reduce risk as we move forward into the
next cycle, and a couple of the things that we have discussed
with the Coast Guard is the issues of going forward with a
contract where there aren't any minimum quantities of assets to
buy and there aren't any minimum dollar amounts. And then, of
course, you are giving the contractor a much greater incentive
to make sure they have a good product you are going to want at
that price or you are going to shop elsewhere.
Mr. LaTourette. Right. And then the last question I have is
for you, Mr. Caldwell. You mentioned unobligated balances of, I
think you said, $1.6 billion. Because this is a hearing about
the budget, I am concerned that the President's budget has come
in, I think, about $823 million for Deepwater and the
appropriated amounts over $1 billion. Based upon your
observation and analysis, is the $1.6 billion of unobligated
balances sufficient to move forward with the schedule of assets
that are being produced?
Mr. Caldwell. Well, I think what the Coast Guard owes
Congress, this Committee as well as others, is a plan of when
they plan to spend that unobligated money. In one of the
Committees the Commandant was asked when he could spend a
certain amount of money, and it was beyond a 24-month window.
So then why do you need it to carry over from the last budget
if you are not going to be spending it in 24 months? Of course,
we all know how the appropriations work, and there are risks at
every level in terms of whether, if you don't have money in
this year, whether it will be in there next year. And I think
it happened at a time where one of the risks we raised early on
with the Deepwater program is whether the Coast Guard would
actually have the money in any given year to carry on a program
this ambitious. And I think the initial planning that went out
for the initial contract had the contractors looking at a
window of $500 million a month.
(After the hearing, Mr. Caldwell edited the previous
statement to read: "...had the contractors looking at a
spending cap window of $500 million a year.")
Just talking to Coast Guard folks, it sounded like the
Coast Guard was just at a point they thought they were there,
we were pretty close to $800 million to $1 billion a year of
funding that Congress was willing to appropriate, but, of
course, all these problems had not come up yet, and so, because
of some of these problems, they haven't been able to spend that
money. But I am not sure that I have done a level of analysis
that could say how much should or shouldn't be given to the
Coast Guard or taken away, or something like that, but I think
the Coast Guard owes Congress that information in terms of here
is how we plan to spend that money. It is just obviously not
good financial management to have those kinds of unobligated
balances.
Mr. LaTourette. Right. Absolutely. Well, thank you.
Thank you, Mr. Chairman.
Mr. Cummings. Thank you very much, Mr. LaTourette.
Let's go back to the performance assessments. You said, I
think, there were 83 to 87. In the industry, is that medium,
high, low?
Mr. Skinner. I think that would be a B.
Mr. Cummings. A B?
Mr. Skinner. If we did an A through F grading.
Mr. Cummings. You also went to the criteria for the 83 to
87, is that right?
Mr. Skinner. I beg your------
Mr. Cummings. In other words, one of your concerns, I
guess, was even when you come up with the 83 to 87, is the
criteria how you got there?
Mr. Skinner. Yes. We didn't grade everything.
Mr. Cummings. Yes.
Mr. Skinner. That was our criticism, and I think the Coast
Guard and Admiral Allen agreed with that and is amending the
contract to grade everything, whether it is in progress or
whether it has already been delivered.
Mr. Cummings. And I take it that you all had--you may have
stated this already--had an opinion about the award fees. I
mean, one of the things that concerned me--and I had an
opportunity to talk to at least one of the team members, I
think it was Lockheed Martin folks, and I think what they were
trying to tell me, that this was not a bonus, that this was an
award, I guess, more or less for progress, sort of. But I saw
it as a bonus, and their argument was that they were taking
somewhat of a risk in doing this contract and so, therefore,
they just could not see it as, in any way, shape, or form,
anything that you could even put in the same dictionary as a
bonus. I mean, do you have an opinion on that?
Mr. Skinner. We didn't evaluate the basis for the award
fee, but it does go back to the criteria which we used to
evaluate their success or failure, their performance. And the
award fee, I think, is tied into that evaluation. So the higher
the score, the higher the award fee, which we also were
questioning the score; we think that it was too high.
Therefore, we are also suggesting, I guess, that the award
bonus may have been too high as well. But we did not comment on
that particular aspect.
Mr. Cummings. I understand. You also seem to have--I know
at least you, Mr. Skinner, and, Mr. Caldwell, I am sure you
have an opinion on this, about the role that civilians should
play in acquisitions and what have you. I mean, the argument
was made--I think it was by you, Mr. Skinner--that one of the
things that folks depend upon, contractors, is that personnel
will change, I mean, personnel will move from place to place in
the military, in the Coast Guard, and so they don't have to
deal with the same folks. The folks that were there two years
ago, some of them retired, some of them have gone overseas;
they are not there anymore. Even Admiral Allen has, I think, a
four-year term. And so this gives us great pause because I
think that, and I have said it many times, I think every Member
of this Committee has a tremendous amount of faith in Admiral
Allen, but I guess what we have got to do is figure out how we
put into place those things that will last beyond Admiral Allen
and others that may have great intentions.
So talk about the role of civilians and how significant
that is. Yes, Mr. Caldwell, and then we will go to you, Mr.
Skinner.
Mr. Caldwell. Let me just make a couple of comments. I
would agree with Admiral Allen that you need some of the
military folks in there who know the operational issues. There
is no doubt you need their expertise involved in that. You even
want to have maybe some overlaps among those people because, as
military people, they will rotate out. But, in principle, I
would agree that you need continuity here in terms of civilians
to carry on some of these programs.
I have one other kind of anecdotal observation I would like
to make. I have been with the GAO for 23 years now. The people
that we are hiring now, they are not going to stay for 23
years. I mean, it is a much more mobile workforce than it used
to be, and I think that will affect the Coast Guard or any
Government agency to a larger extent. So while the continuity
is a very valuable thing, it is just a harder thing to get
today, even in the civilian world.
Mr. Cummings. Mr. Skinner?
Mr. Skinner. If you look at best practices for performance-
based contracting or best practices for a system-of-systems
contract, there is a lot of literature out there. One of the
most important elements they say to be successful is
continuity. That is, the people that you put together on a
project team, an integrated project team, have to be committed
to the project from beginning to end. And like Mr. Caldwell
said, even in the civilian sector you are going to have staff
turnover, but in the military sector you are guaranteed
turnover, and that creates a problem because you just cannot
ensure that continuity.
The second thing that concerns me when you talk about
putting military in charge_it goes beyond acquisition
management, it goes into financial management, it goes into
human resources management, it goes into IT management. These
are specialties where you need professionals in those fields to
do this. If you look at the Coast Guard, particularly the Coast
Guard, any cadet or anyone that is coming out of the Coast
Guard Academy, I challenge anyone to say that they can look at
the Coast Guard organizational chart and say I want to be the
chief acquisition officer. There is no career path in the
military for those people to aspire to be there and to work and
train and receive the experience in the training that they need
to be able to run any type of acquisition program, let alone a
complex major acquisition program such as Deepwater.
So it does create a problem when you start relying on your
military people who do not have the experience, do not have the
training, and they would rather be somewhere else. They are
punching their ticket to get through Washington so they can go
back out to sea.
Mr. Cummings. One of the things that you talked about, Mr.
Skinner, in your opening statement, you talked about how
Admiral Allen was building up his personnel. And you also said
something that was very interesting, and that was that it is
going to take a long time. So I guess, I mean, do you see--so
you are saying that even if he built up his personnel, gave
them the training that they probably wouldn't be around but so
long, but you even question whether they can build up that kind
of training to do all the things that need to be done
particularly with regard to acquisitions, whether they even--
they are in a position to be able to accomplish that and still
deal with this contract in a fairly timely fashion?
Mr. Skinner. In the short term, that is absolutely true.
That is one of the things we are experiencing not just within
the Department, but this is a Government-wide issue, is to get
the right resources in the acquisition management field:
program managers, acquisition managers, procurement managers.
It is very difficult, in this day and age, to find those types
of people out there. There is a lot of competition in the
private sector right now. The private sector pays a lot more
than the Government, and that is who we are competing with
right now. So it is not something that we are going to be able
to fix just in a few months; this is going to--it is going to
be very difficult to find the right people and bring them in
here.
Mr. Cummings. Of all the things that you heard--and I will
end on this--what gave you the most hope that we are at least
partially on the right track here? Assuming that you got that
feeling.
Mr. Skinner. Yes, there is hope, and what gives me the most
hope is the leadership that we now have in the Coast Guard, and
that is Admiral Allen. He is firmly_he recognizes these
problems, he admits to these problems. He is very, very focused
on correcting these problems. He is very hands-on management,
and he has taken some very drastic steps to turn this thing
around with a major reorganization of his acquisition program,
in other areas as well, but we are focusing on acquisition
management, putting it under one directorate, where it is more
streamlined and you can go to someone where there is
accountability, which never existed before. And we learned that
through the course of our audits, because we just couldn't find
that one person that we could go to who is accountable for this
contract? It also has become very clear as to who has technical
authority over Deepwater. That was not clear before. And when
you talked about using the integrator project teams and when
you do experience those problems, well, when you got to the
end, the contractor was the chair of the team. The Coast Guard
were technical advisors, they were not technical decision-
makers. That now has changed. He recognizes that the contract
is flawed, going back to basics. Let's go back to Acquisition
101 plus what we have learned over the last four and a half
years from our mistakes, and to address those issues.
There is a lot that is now being done to turn this around,
but, again, we are still in the very early stages. Will we be
successful? Time will tell. But it is going to require
sustained leadership, it is going to require oversight, not
only from GAO or OIG, but Congressional oversight. We are going
to have to be transparent so we make sure that we are doing the
right thing; and if we are not, we have got to hold people
accountable.
Mr. Cummings. Mr. Caldwell?
Mr. Caldwell. Well, whether it is Admiral Allen or it is
kind of the lowest person in the chain of the acquisition
world, they are going to probably move or transition, or there
will be some lack of continuity. So the kind of things that
give us hope, looking forward, in terms of fixing the problem
is really having structures and processes in place that work,
and then people can come in and out of those. But if you have
those in place and you have a mechanism to make sure they are
working, from an auditor's perspective, it is internal controls
that are important, it is not the people that are in the
positions. So that is what I would say is most important to us.
Mr. Cummings. Mr. LaTourette?
Mr. LaTourette. Nothing further.
Mr. Cummings. Thank you all very much. We really appreciate
your. I am sure we will be talking to you all again. What is
next on you all's agenda? Are you all continuing not follow
this, is that right?
Mr. Skinner. Yes. We are embedded in the Coast Guard, into
the Deepwater program. Our next------
Mr. Cummings. Whether they like it or not, huh?
Mr. Skinner. Whether they like it or not. But Thad Allen
has in fact opened his doors to us and has been very
cooperative these last few months, and is welcoming our
suggestions. The next thing you will probably see is a report
card. This will be the first report card that we have done of
the Deepwater program. We are going to do it throughout the
Department and we are going to spread out to all the management
challenges in the Department. But this will give you a
baseline, and each year we can show you and the Secretary, and
the head of the Coast Guard the progress they are making, if
they are in fact making progress. We are also doing several
sector reviews of Deepwater activities, the unmanned aircraft,
for example, their infrastructure, which we talked about
earlier today and the progress that is being made there and the
problems that they are experiencing, and how that is going to
be integrated into the Deepwater program. So there are going to
be a whole series of audits for the next--Mr. Chairman, long
after I am gone.
Mr. Cummings. Mr. Caldwell?
Mr. Caldwell. We have a couple of things. I guess in the
long term we have a mandate, a legislative mandate from two
appropriations Committees, Senate and House, to look at this
every year, and we negotiate a little bit about what the terms
of those audits are. But I assure you it is not an indefinite
quantity, indefinite amount contract.
Mr. Cummings. Let me say this. I am sure you all don't hear
this too often, but we really do thank you for what you do. I
think you all have--you and your staffs have--I am sure you are
not always--people are not jumping up and down and having
parties for you when you come in the door and everything, but
the fact is that you help to keep Government strong and you
help to make sure that trust, with regard to integrity and
competence, both, you all are the ones that make sure that we
keep that in some type of order.
So I am sure you are well underpaid, but we really do thank
you for what you do, and I really mean that, and I hope you
will convey that to your staffs. And we want to thank you for
the outstanding work that you all have done for us and, on
behalf of the Congress, we thank you.
Mr. Skinner. You are welcome. Thank you.
[Whereupon, at 1:15 p.m., the Subcommittee was adjourned.]
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