Deepwater: Government is in Deep
Reuters and other outlets report that Deepwater contractors actually had the nerve this week to send a letter (pdf) challenging the Coast Guard’s legal authority to pursue a $100 million refund for the eight patrol boats which have been deemed unsalvageable. Lockheed Martin and Northrop’s primary defense is “I told you so,” saying that it disclosed the “issues” on forms it provided to the government – known as DD250s – when the boats were delivered. Following that logic, contractors can deliver whatever they want to the government, no matter how defective, as long as they note there are a few unresolved “issues” at delivery. That doesn’t pass the laugh test.
Unfortunately, it seems Lockheed Martin and Northrop have the government over a barrel. A move last week in the House to reign in their status as the lead systems integrators on the $24 billion Deepwater contract faltered. Under the lead systems integrator model, contractors manage and oversee themselves, a model which was embraced in the 1990s, and has now led to a string of disastrous contracting failures including Deepwater. In a House Committee on Transportation and Infrastructure markup on HR 2722, the Deepwater Integrated Reform Act, Representative Steve LaTourette prevailed on a motion to allow the contractors to keep the contract for as much as another four years. Of course, it is probably just a coincidence that Representative LaTourette’s wife, Jennifer Laptook-Latourette is Vice President of a lobbying firm which represents Lockheed Martin.
Representative LaTourette adopted the industry line that the Coast Guard will not be able to assemble the team it needs to manage the Deepwater contract in a timely way. While the Coast Guard could assume the control of the contract sooner if they are capable, the onus will be on them to wrest the troubled Deepwater contract out of Lockheed and Northrop’s clutches.
-- Beth Daley
Update (July 5th):
Former Lockheed Martin employee Michael DeKort who saw the foibles of the Deepwater contract first hand points out that many of the problems were NOT mentioned in the DD-250s as claimed in the letter. According to Mike:
--Low Smoke cables - were mentioned and had a waiver. However, the Coast Guard Inspector General found that the waiver should not have been issued.
--Environmental failures - were never in the DD-250s even though we knew well before delivery of any of the boats. I can prove Lockheed Martin and the Coast Guard knew and kept it out of the DD-250s (I specifically asked for it to be in there). Several years later the Coast Guard drafted a waiver that they still say the Coast Guard should sign.
--TEMPEST - all the failures were not mentioned.
--Cameras - blind spots not mentioned.
It appears to some extent the entire world has been waiting days, months, years and decades for our US Legislatures to get it right. Hopefully that time has not passed us by as the clock ticks ahead.
Posted on: Jul 06, 2007 at 11:24 PM
To Bill Rigert
While you are conceptually correct your application of those comments is misapplied in this case.
Several of the C4ISR issues are completely missing from the D-250s. Some are missing key details/disclosures.
As for waivers - yes the Gov’t can waiver. Lockheed asked them to waiver 2 of the C4ISR problems - Low Smoke and Ext Equip Survivability. They approved one and the other is still open(?). However - in both cases the DHS IG said they should not be waived. The Coast Guard is to a large degree culpable here. However - one of the primary reasons Lockheed was used by the CG and one of the primary drivers for the lead integrator concept was that the CG did not have the right or enough personnel with the right experience sets on staff to review the technical baseline - especially the particulars. They trusted and paid the contractors to provide a complete service - one that should be ethically sound and technically competent. They were paid to provide this leadership from the requirements through the test phases. This included writing the requirements and the tests and in some cases self-certifying. Lockheed wrote the majority of the requirements with the Coast Guard and even convinced them to change "shall" type statements to "guidance" so that Lockheed's hands wouldn't be tied and they could find the best solution. Lockheed asked to be trusted, then abused that trust and finally blamed the CG for letting it happen in the first place.
• Environmental survivability of the exterior equipment – These flaws were never mentioned in the DD-250s. Lockheed knows this, which is why they want the Coast Guard to sign a waiver relieving them of these requirements. Lockheed maintains that the requirements are excessive and not all necessary. These requirements state the environment these ships can safely operate in. This includes temperature, shock and vibe, humidity and sea state conditions. Remember this is a System of Systems effort. If equipment on the 123s was flawed but then accepted through waivers that means that those equipment’s can be used on every other assets the contractors deliver. This will means every boat the Coast guard takes receipt of will not be able to survive the extreme weather conditions they operate or want to operate in. Lastly – since Lockheed’s contention is that the Coast Guard’s original needs and requirements are overstated the acceptance of the waivers will be in affect creating the new and drastically inferior, requirements set.
• Camera blind spots – The blind spots were mentioned in the DD-250s. They were not mentioned because Lockheed contends there was no 360-degree view requirement. If this issue is not addressed properly for the 123s, even though they are not in service, there is nothing driving Lockheed to ensure complete 360-degree camera surveillance capability on every other asset it delivers. (This is another area where the DHS IG findings were flawed)
• Low smoke cables – This was included in the D-250s. Additionally a waiver was submitted and accepted by the Coast Guard. This action changes the requirements for every asset that will be design and delivered in the future. In spite of the DHS IG’s admonition that the waivers should not have been granted ICGS and the Coast Guard appear to be pressing on.
• TEMPEST – The Coast Guard and ICGS maintain there are no problems. They continue to refer to the DHS IG’s flawed finding that the instrumented tests passed – when they did not. Not only did they not pass but the individual who waivered the failures was not cleared by the NSA to make those decisions. The majority of the cables were the wrong type and there are significant equipment design issues. These boats leak and actually retransmit classified information to those we don’t want to have access to it. In order to meet the System of System design criteria and to ensure the cover up I believe the NSC and every other boat will have the same problems. This puts our nation at risk.
If LM/ICGS is succesful in refuting the refund they will not only not have to return the funds but they will be changing the C4ISR requirements for the rest of the contract. Since this is a Systems of Systems approach everything has to match. The decommissioning of the 123s doesn't end anything. If they win this the Environmental Survivability, Camera, TEMEPST and Low Smoke problems will be delivered on every asset they ever build. Lockheed knows this. Their cover up is so deep now they have no choice but to take this tact in order to not be held accountable.
Posted on: Jul 06, 2007 at 05:05 PM
Great write up..
Posted on: Jul 06, 2007 at 01:56 PM
Hello Chris (and our other commenters here). I greatly appreciate your feedback. In regard to your concern that this blog post is a "fabrication", I think you may not have understood that my last sentence sought to make the very point you say was missing: "While the Coast Guard could assume the control of the contract sooner if they are capable, the onus will be on them to wrest the troubled Deepwater contract out of Lockheed and Northrop’s clutches." Thank you for writing in to clarify the specifics of the situation. Finally, I welcome all comments and communications from Lockheed Martin employees who have substantive criticisms. Although my blog postings may be incendiary at times, I read your comments carefully and am deeply committed to presenting the truth fairly for all parties involved including Lockheed Martin and Northrop.
Posted on: Jul 06, 2007 at 01:12 PM
Chris Baker,
You're wrong. One, the legislation is hardly passed and has several steps to go. Two, if you read Adm. Allen's testimony to the House Transp and Infra Committee, you will see he fully intends to use, for possibly several years, LM and NG in many of the same PM and LSI roles, since he hasn't the staff. But he says they will be watched more closely.
Three, although POGO can be wrong, overreach, and overly damn any kind of contractor for anything. But not all the time. Not this time. Beth is spot on as Axelrodd said.
We have enough yahoos shooting from the lip. Why be one of them, Chris? BTW, are you the same Chris Baker who works for Lockheed Martin in Baltimore?
JT
Posted on: Jul 06, 2007 at 09:19 AM
The description of the committee legislation says the Coast Guard may manage the program itself before the 4-year period ends provided the committee receives certification of their qualifications to do so. Therefore this entire issue appears to be a fabrication by this non-profit. Don't you have better things to do than fabricate lies?
Posted on: Jul 06, 2007 at 12:47 AM
Even though I have no expertise in this area, Ms. Daley's blog and update appear to be spot perfect. The responses appear to some extent, in agreement and emotional although appear not to fully grasp the article which appears to give concern to an overwhelming and possilbly ongoing major fraud, possible corruption and incompetence and gives the readers foibels to give their response and/or step to forward with creditable responses and/or for our legislatures to take a proper and/or more proper course of action for resolve that all the response appear to also agree.
Posted on: Jul 05, 2007 at 05:49 PM
Mr. Bill Rigert of Lockheed Martin:
Why are you ignoring the FACT that your company delivered 8 cutters that are not seaworthy--and LM /NG has the gall to bill for them as if nothing is wrong. Would you deliver an actuator design or part that way for an airplane? Hmm? And you are doing it to the little Coast Guard, the least wasteful and most needy service. How could you?
We truly hope that we, the taxpayers, get a full refund for the garbage you delivered, no matter what kind of contract it is. For your company to call the tune on designs, rather than your customer, is a real miscarriage of contracting.
Finally, if you believe so much in aerial surveillance (done by rogue Congressman, no less!), why don't you get a job in Iraq where you are needed badly, holding on to a drone over Sadr City. But don't try to erode our constitutional rights and raid our pocketbooks here, if you please.
JT
Posted on: Jul 05, 2007 at 01:32 PM
fyi,
a little Googling reveals that Bill Rigert w the same email address is "primary airframe design lead on various platforms for Lockheed-Martin Aeronautics Corp. in Palmdale, CA for the last 9+ years." His reposte was ok until the intimidating flaming out in the last sentence. Eh?
interesting that you post some comments and not others....
KSBR-X
Posted on: Jul 05, 2007 at 12:24 PM
Beth,
Your statement on the Deepwater program demonstrates your lack of knowledge on the DD250 process. Contractors provide full disclosure of deliverables, it's up to the customer to act on those disclosures. And in many cases, the disclosures are the result of the shifting requirements imposed by the gov't, long after contracts have been signed. The gov't does not have to grant a waiver for the disclosure. A more reasonable conclusion to your findings would be that the folks on the government side were unable to decisively act on those disclosures. The problem is there's an amazingly bloated government in existence, and no value-added in all the layers of oversight. Too much hand-wringing by career government employees who can't make a decision.
Your implication of an influence-peddling conspiracy is surprising, I'd expect that level of reporting from a tabloid. You forgot to mention that the Congressman and his wife own a fleet of black helicopters and are watching YOU right now.
Posted on: Jul 05, 2007 at 10:54 AM
Some interesting points.
Greg Giddens, former Deputy Program Manager for the Deepwater program, was promoted out of the Deepwater project right before Admiral Allen became Commandant. He is now the Program Manager for the much misaligned Secure Border Initiative project.
Rear Admiral Stillman who was Program Manager for Deepwater, and retired soon after Admiral Allen became Commandant. He now works
Admiral Loy works as a lobbyist for the Cohen Group, which considers Lockheed Martin one of its customers. He also serves on the board of directors for Lockheed. He is considered one of the founders of the Deepwater program.
Posted on: Jul 03, 2007 at 11:21 PM
Beth,
We agree on almost everything in your writeup. This is a disgrace that combines woeful government ignorance, potential Congressional corruption , and rapacious contractor behavior, all somewhat enabled by the regs. But a refund would be nice, eh?
We may disagree on the "industry line." Actually, many companies recoil at the highhanded conduct of the giant defense contractors--they bring on a shitful mist over all contractors, the vast majority of which are honest, straight and a good value for the government. Would that we could say that most government employees are a good value for the government. Because they're not, really, the government resorts to bringing on contractor who provide butts-in-seats, on the one hand, and real skills and brains on the other hand, when necessary.
What's necessary in the acquisition field is a class of program management support contractors, with absolutely no other lines of business and scrupulous non-conflicts of interest to step into the government staff gap and make it possible to avoid the idiotic LSI concept to be used.
Have a great Fourth.
KSBR-X
Posted on: Jul 03, 2007 at 05:31 PM