Defense Contractors Running Government: A Recipe for Disaster

If you missed 60 Minutes this week, the good news is you can still watch their feature segment online. The topic is the Coast Guard's so-far disastrous Integrated Deepwater System program, and 60 Minutes interviews two of the whistleblowers, Michael DeKort and Captain Kevin Jarvis, who first exposed the program's failures. The situation began in 2002, when the Coast Guard awarded Lockheed Martin and Northrop Grumman a contract to manage Deepwater’s then-$17 billion program to modernize the Coast Guard’s aging fleet. And by "manage," we mean to literally manage.

In the 1990s, the government started placing contractors in charge of contracts due to a shortfall in the number of government employees who traditionally oversaw contract programs. The results have been disastrous. In Deepwater's case, the contract ballooned to $24 billion and has included problems such as failed encryption technologies, which jeopardizes classified government information, and boats rendered unusable due to buckling and cracking hulls.

Under the pressure cooker of Congressional and media scrutiny, the Coast Guard announced April 17 that it would take away management of the Deepwater contract from Lockheed Martin and Northrop Grumman. They also demanded last week that the contractors refund $100 million in federal money. Yet questions remain about whether the Coast Guard has enough skilled employees to oversee the project.

The moral of the Deepwater story is that the model of contractors executing programs on behalf of the federal government is a recipe for disaster. And why wouldn’t it be? Priority number one for major companies is to make a profit. That drive needs to be tempered by the demands of a vigilant and cost-conscious consumer. In the case of Deepwater, there are few incentives to control costs and deliver on promises.

Congress has heard the message loud and clear. Representative Duncan Hunter (R-CA), ranking member of the House Armed Services Committee (a Congressional member with a reputation for doling out goodies to defense contractors rather than holding them accountable), inserted language into the 2008 Defense Authorization bill which limits future contracts using the Deepwater contracting model, known as having a “lead system integrator.”

That provision is a step forward but will do nothing to reign in abuses on existing lead system integrator contracts including the Army’s Future Combat Systems program with costs skyrocketing by one estimate from $175 billion to $300 billion in just three years, Missile Defense with perennial cost overruns and a projected price tag of $247 billion from 2006 to 2024, and the Navy’s Littoral Combat Systems program with runaway cost overruns which even led to a two month stop-work order earlier this year.

Meanwhile, the government’s top contracting agency, the General Services Administration (GSA), announced a new initiative last week to dramatically expand the use of contractors in the hiring of contractors. Hello?!…Earth to GSA…is anybody home?

-- Beth Daley

Comments

[Michael DeKort]

Open call for assistance in Deepwater case:

Within the next few months we will be fighting the motions to dismiss from Lockheed, Northrop and ICGS. If we lose this round the case is over. That means there will be no refund and the contractors will not be held accountable for the Deepwater problem.

(In addition to that Northrop has signaled that the companies actually intend to seek damages from the Coast Guard for stopping the program. Text from Northrop motion to dismiss the Bollinger suit states the following:

"Presumably, Lockheed Martin could seek compensation from the Coast Guard under the CDA for C4ISR equipment and information delivery delays, if any, caused by the government. As the prime contractor, ICGS, not NGSS or Bollinger, could best determine whether Lockheed Martin or NGSS could assert a CDA claim against the government for delays experienced in delivering equipment or information to Bollinger. ICGS could also sponsor such a claim against the Coast Guard on behalf of Lockheed Martin.")

Additionally one of the tactics Northrop is using is to blame the Coast Guard for the 123 problems. They state that the Coast Guard abused these boats, did not operate nor not maintain them properly. From the motion:

"The Coast Guard decision to decommission vessels does not lead to the inescapable conclusion that the defendants committed fraud. To the contrary, there is strong evidence suggesting that the 123 structural issues were attributable to the Coast Guard's operation of the vessels beyond their performance parameters and failure to maintain the structural integrity of the vessels, not any nonconformance with contract requirements."

This is an open call for assistance. We are asking for the Coast Guard and even contractor personnel who read these blogs to get involved. We feel there should actually be very little trouble winning this motion but given the importance and finality of the event we believe it is prudent to not take anything for granted. If there was ever a time to act to ensure the refund is paid and the contractors are held responsible this may be the last opportunity. Finally I am calling on the Commandant himself to make a public and service wide call for the men and women who serve in the Coast Guard to assist in our efforts.

- Michael DeKort
[email protected]

[Axel]

Correction: From memory, ...........should read ..........forthright and worthwhile enterprising endeavors that may benefit from my attention and/or consideration........

Axel

[Axel]

5/24/2007

Knock Knock // Who's there? // Gorgonzola // Gorgonzola who?

Dear Gorgonzola,

Thank you for your attention? kind concern and [remarks?] As you may recall or find in your auto-deletions and/or my Whistleblower Protection comments to the POGO Blog ' Republican Committee calls on Whistleblowers......." of my words is that I may choose to consider many personal and vested responsibilities and/or obligations and implied promises of good faith should this current Whistleblower Legislation succeed to become a viable law and venue for procedural application and especially as intended.

Although I am willing to consider any enterprising suggestion your "good faith" inquiry may suggest and/or that you feel I should give consideration for my attention within these areas
of concern(s).

Thank you for your time and consideration.

Sincerely,
Axel

[Axel]

Dear Readers, May 23, 2007

As this blog article and blog comments will most likely become an archived article in the very near future, I tought it my be worthwhile for me to suggest that if any Executive, Legislative and/or Judicial representative people of our US Government, and/or POGO Contributors, and/or Prominent industry leaders and/or individuals, and/or forthright interested and/or concerned people would like to respond to this article of interest, I assume your good faith contributions would be appreciated.

I am confident your comments would be well received. I am relatively certain many of the readers of this POGO Organization are regular voters with a concern for this article and how their US Government (in God we trust) funds are spent and declared accounted. Be an American Idol, and/or a concerned citizen and/or an interested person and/or an elected and/or prospective US Candidate for public office and have your voice heard in this superb and excellent, free and available format that appears to allow for life, liberty and the pursuit of happiness and with the best available respect and regard for god, man and country.

( As a disclaimer, please note that there are many people in service to our US Government and that it is my opinion that they are and/or may be prohibited from being heard and posting in this venue. I am requesting and suggesting that any enlisted military personnel, please do not post and or acknowledge for posting the request as mentioned above. I hope this POGO Organization will be able to give consideration to prevent any military enlisted and/or officer most likely below the grade of Colonel from this venue of public posting.) Also, please note that it appears in my opinion that any and all US Legislative leadersa are mandated to disclose any secrets if they are and/or appear to be in violation of our US Constitution and/or substantial violation of law and that a obviously a telephone call to this POGO Organization would appear appropriate before you attempt to post anything that would be considered to be of a sensitive, secret and/or need to know nature.

Good luck, best wishes and regards.

Thank you and all for your time and consideration.

Sincerely,
Axel

[Gorgonzola]

hey what's the key to reading the stuff by "Axel"? [axolotl?] I found it easier to read after auto-deleting every two out of three words, and to halve the number of obsequious adjectives and adverbs.

[Axel]

Dear Readers, May 23, 2007

In the hopes that Mr. Schwellenbach or a POGO staff member will be able to post my two addition blog comment in the near future I would like to suggest a correction to my prior blog comment within this article blog from Ms. Daley in reference to Mr. Eschelmen. My corrected sentence, (from memory should read ....I find it appallingly shameful and embarrasing and I assume Mr. Eschmelman would concurr and/or have these emotions as from his many highly distinguished and commendable life accomplishments and achievements. I do not believe that I have responded to this POGO, Ms. Daley in any direct manner that would be presumed to be shameful and/or embarrasing.

As an additional note and folllow up to this area of discussion and as it was again a topic of discussion on Ms. Amy Goodman DemocracyNow.org daily radio and podcast broadcast that Blackwater is mentioned within a recent best seller book by Jeremy Scahill intitled 'Blackwater: The Rise of the World's Most Powerful Army'. As an additional note of interest is that these excellent broadcasts from Democracy Now are available as a podcast on your or a library computer with an excellent archive of superb and excellent prior interviews and informational broadcasts. Also and finally on a very sad note, I was sad to acknowledge that it is reported that our US legislatures are apparently praising there support and efforts as they have resolved to continue to fund this illegal and initially Unconstitutional War and all of this war henious programs, especially including Blackwater programs etc., with the exact funds that where requested from the Executive Branch of our government and with continued no accoutability and with an additional 17 Billion from the Democrats. This current funding bill appears to be exactly inapposite to the implied vote and will of the American people and our Counstitutional Laws. It appears clear and without doubt and hesitation that the Secrecy must end and with full uncoerced and reasonable accountability and that this must accompany any future bills and legislation and legal proceedings within our great country and within in the proper aspirations and endeavors towards our proud heritage and great democracy with life, liberty and the pursuit of happiness for all and with the proper respect and regard to and for god, man and country.

Best wishes and regards,
Sincerely,
Axel

[Axel]

Dear Readers, May 22, 2007

Please allow me this additional comment. I take exception to Mr. Eschmelman remark in his post that says....'SNIDE ad hominen Ms. Daly inserted into this hit piece.' Snide is clearly the wrong word AND implication and in my opinion unnecessarily and dileberately innapropriately offensive. I cannot find anything of malicious intent in this article
from Ms. Daly

Paragraph 4 (four) cleary states The moral..........to control costs and deliver on promises." is in everyones best interest and I presume would be appreciated and concurred by all reasonable persons. This article is clearly an excellent endeavor to bring to text and light one of our nations highest concerns. Mr. Eschelman you appear to reiterate excellent and well known fact in your blog comment response to Ms. Daly's fine and exemplary neverending efforts within this superb and excellent POGO Organization, therfore I am as embarrased and ashamed as I imagine you are from your use of the word snide as an attempted character assasination and discreditation of the intended concern, respect and regard of this article and Ms. Daly.

Mr. Eschelman, I read your Law Firm's link website. As you well know, you and your Law Firm appear to show the highest of marks in all catagories, especially those that relate to God, Man and Country. I hope you and/or your Law Firm are able to come to a sense of peace with your and/or your Law Firm's apparent frustrations.

Thank you for your time and consideration.

Sincerely,
Axel

[Axel]

My apologies as my impromptu sentence as in my prior posting should have read Watergate, Iran Contra etc!! ( Baker, Shultz, North, School of the Americas, Institue of the ...etc.??!!!!! Please note and as I assume your posting suggests is that "HOW CAN YOU HAVE A HEALING PROCESS AND DEMOCRACY IF THE IDENTIFICATION OF THE PROBLEM AND FACTS ARE CORRUPTED, DISTORTED AND UNAVAILABLE. THE ANSWER IS OBVIOUS". Please note a correction and in direct response to your last sentence, this nation must have ACCOUNTABILITY to avoid abondoning responsibility. Please note that our US Legislative Government has consistantly and continuously voted to apply and appropriate funds for all these illegal activities including an illegal and unconstitutional WAR, Patriot Act, Torture, illegal wiretaps, illegal fraudulent and frivilious signing statements, Unconstitutional Secrecy and half of he Trillion Dollars yearly that goes directly to the Defense department to be spent and held unaccountabile!!!!etc.!!!!!

My blog for thought is a good blog response to a miracolous incredible organization (POGO) posting through their many excellent and superb tireless efforts of the few with a small bubget to write an article from a most likely thoughtful brave and courageous interseted person(s) and/or Whistleblower(s). I am just trying to provide a credible response to a well intended article from POGO's Ms. Daley as I assume is also your intent. I am a US DOJ/INS Whistleblower who is doing the best of what he has left to support our US Constitution with Life, Liberty and the Pursuit of happiness for all and with the best available proper respect and regard to God, man and Country.

Good luck and best wishes to you and all in your continued efforts to provide reasonable venue for consideration to a more appropriate allocation of the recourses for all on earth and to those that are fortunate to continue to prosper and enjoy in a forthright and reasonable proper manner. [ACCOUNTABLE (when and where??) manner.]

Thank you and all for your time and consideration.

Sincerely,
Axel

[William Eshelman]

Congressman Hunter isn't the first to be concerned about this sort of contracting vehicle. One need look no further than the Space Station Freedom contract and the mess that NASA made of it by making Boeing the prime (integrator). It is a legitimate concern despite the snide ad hominem Ms. Daley inserted into this hit piece.

The real scandal in federal procurement is Sen. Diane Finestein's (D CA) shoveling of BILLIONS to companies oned or controlled (in whole or in part) by her husband -- which makes the ill-gotten gain 50% hers under California's Community Property rules. How's that for corruption? Makes Duke Cunningham's corruption look like chump change, doesn't it?

[LeRoy Haugh]

I must have missed something. I don't see any relation between Ford's pardon of Nixon a generation ago, and what is going on in contract management today. Clearly, the government does not have the personnel to properly manage and administer every program. But it does have a responsibility, if it contracts out the management, to have include terms on how that management will be conducted, benchmarks, reporting requirements, etc. The Deepwater Program should never have gone as long as it did without some oversight and review. We always had such checks and balances on major programs when they were fully administered by the government. Why should it be any different just because the responsibility has been shifted to the contractor? There is plenty of blame to go around in this and other cases, and plenty of lessons to be learned to avoid future repetitions. This is ready material for a good case study on how not to manage, and could help develop a model for management when contracting out is the only route left to the government. Contractng Out should never be an excuse for abandoning responsibility!
LeRoy Haugh, Gov't Contracts Consultant

Please post my comment

In reply to EARTH to GSA...is anyone home? Please review my prior blogs of over a year ago which state that the same people that where presidentially pardoned (=illegal constitutional act)(and those yet to be prosecutesd by trial) by President Ford and hailed as correct by Senator Kennedy from Watergate etc. are the same criminals that are running our country today. Yes Ms. Daley, they are home and should clearly be prosecuted by trial in a proper court of Law for violations upon our US Constitution including the illegal attributes of the Patriot Act, Torture which resulted in death, illegal wiretaps, numerous frivilious and flagrant signing statements and many other high crimes
and misdeamonors.

Ms. Daley if you are aware of another resolution that EARTH is able to respond to GSA other than an initial and thorough Impeachment proceeding against our Executive Branch of our US Government Leaders (an as somewhat initially described in US Congressman Kucinich) by our US Legislative Branch of our Government, please let me and your readers know.

(How can you have a healing process and democracy if the identification of the problem and facts are corrupted, distorted and unavailable to be heard????) ????? The answer is obvious!!!!

Thank you for your time and consideration.

Sincerely,
Axel