POGO has received a letter from Rear Adm. Gary T. Blore, U.S. Coast Guard Assistant Commandant for Acquisition, in response to a post on our blog about the Deepwater program. The Coast Guard’s letter, along with our response and a more detailed technical response from Michael DeKort, former Lockheed Martin lead engineer on the Deepwater program, can be found below.
Coast Guard's Letter:
Dear Ms. Brian,
The Project on Government Oversight's blog posting entitled "Deepwater in Deep Again," correctly indicates that a protest has been filed on the recent award of the Coast Guard's Sentinel-class patrol boat. It is also correct in that the Coast Guard is supporting the DOJ's ongoing investigation of past patrol boat conversion contract failures, including one in which Bollinger may be found to have had some responsibility.
However, it mistakenly alleges that secure communications were misused in some way, so as to expose U.S. encrypting processes. There is no evidence of SIPRNET or encrypted communications being compromised by the 123' patrol boat or the National Security Cutter (NSC). In fact, the systems are not used unless they are TEMPEST certified.
The posting also incorrectly represents that this protest sheds light on apparent problems with Coast Guard acquisition management. The Sentinel acquisition was conducted fairly, in accordance with the Federal Acquisition Regulations, and Bollinger's performance record was fully considered. Therefore, in addition to the conversion of eight aging 110' Coast Guard patrol boats to 123', valued at $113M (adj. for 2008) we also considered:
- Construction of 13 new 170' Navy patrol craft valued at $315M (adj. for 2008), (eight of which have since successfully been converted to 179', and include the addition of a stern launch).
- Construction of 49 new 110' Coast Guard patrol boats off of a parent craft design valued at $567.5M (adj. for 2008).
- Construction of 69 new 87' Coast Guard patrol boats on a parent craft design (Damen), while revising it to include specific Coast Guard modifications, such as a stern launch, valued at $387.4M (adj. for 2008), (six more of which are still successfully on schedule and in production for a total of 75 boats, valued at $421M).
Further, the planning for the Sentinel Class contract is indicative of the robust steps the Coast Guard is taking with our contracts to ensure best acquisition practices are rigorously applied during contract administration. We fully expect that the Sentinel-class patrol boat will join Bollinger's past patrol boat new construction success stories by:
1. Contracting directly with the shipbuilder, rather than a consortium of companies (unlike the 123').
2. Requiring involvement with the parent craft designer throughout Sentinel-class design modifications (unlike the 123').
3. Attaching Coast Guard military and civilian employees to a Project Resident Office (PRO) oversight role at the shipbuilders' facility (unlike the 123').
4. Requiring class certification by an independent third party (ABS) (unlike the 123').
While a protest has been filed, this is not an unusual occurrence following federal government contract awards, and is a vital part of the system of checks and balances in our acquisition system. The Coast Guard respects the impartial review processes that exist for federal contract awards, and has every confidence that the Coast Guard award for the Sentinel class will be upheld.
The Coast Guard's Acquisition Directorate is committed to providing the very best value to the taxpayers, while insuring that the service is most appropriately equipped and ready to respond to the nation's needs, both now and in the future.
Thank you,
Gary T. Blore, Rear Adm., U.S. Coast Guard Assistant Commandant for Acquisition
POGO's Response:
We want to be clear that we never thought, meant to insinuate, or accused the Coast Guard of failing to uphold the Federal Acquisition Regulations (FAR). What we criticized specifically was a problem in the federal acquisitions process, which did not give officials enough information to have a comprehensive view of what a contractor's "past performance" is, since their only real metric for measuring this at the time was the Excluded Parties List System. Even with a more comprehensive view of responsibility, we lack the information to evaluate the propriety of awarding the contract to Bollinger.
Mike DeKort's response to the technical claims of the Coast Guard's letter:
"However, it mistakenly alleges that secure communications were misused in some way, so as to expose U.S. encrypting processes. There is no evidence of SIPRNET or encrypted communications being compromised by the 123' patrol boat or the National Security Cutter (NSC). In fact, the systems are not used unless they are TEMPEST certified."
- Critical TEMPEST failures, which the Navy did not want waived, were waived by a Mr. Ron Porter who was not cleared by the government to waive anything. Those waivers were illegal, improper, highly risky and set a pattern for the NSC, FRC, OPCs etc. Notice the CG doesn't address the Porter issue at all. Why? Because it is a fact, it was illegal and their careers depend on them continuing that cover up. The facts were established the night before our 4/17/2007 hearing by the committee using the CG's own documents.
- I have never said we were compromised. I have said it was possible or even probable. Why? Because our enemies listen to our transmissions around the clock - as we listen to theirs. The TEMPEST standards and testing criteria are written to assume we are always at risk for compromise.
- The CG used to say that the classified systems were never used from the 123s. Then when we found their own documentation, which I can provide, stated that the 123s and SIPRNET were used on Cuban missions they quickly changed their tune to one challenging proof of compromise.
- The 123s failed critical Visual and Instrumented TEMPEST tests. Had Porter not waived the critical failures the 123s would never have been granted and ATO (Authority to Operate) and would never have been able to use those systems. The Navy said the waivers in this area were unusual. Waiving critical areas design to prevent compromise will lead to compromise.
- Why is there no proof of compromise? Because our enemies won't tell us they have successfully compromised our systems.
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"The posting also incorrectly represents that this protest sheds light on apparent problems with Coast Guard acquisition management. The Sentinel acquisition was conducted fairly, in accordance with the Federal Acquisition Regulations, and Bollinger's performance record was fully considered. Therefore, in addition to the conversion of eight aging 110' Coast Guard patrol boats to 123', valued at $113M (adj. for 2008)..."
- The GAO will determine what was fair, what was not, and how the CG conducted itself.
- Is it a coincidence that Bollinger sued Northrop shortly after the protest was lodged? And that Bollinger seeks monetary damages and insists Northrop is 100% at fault for the 123 hull issues? If Northrop were to settle the suit, pay the amount asked for and accept responsibility Bollinger would be free and clear of the 123 refund and competency issues - as such the GAO would have no reason to find against them along those grounds.
- Why didn't the CG explain why the refund and open 123 design and competency issues were not crucial to their determination or even address them in their letter to POGO?
- The issue is not whether or not Bollinger has ever performed well. The issue was that their most recent contract with the CG resulted in the cancellation of a major ship project, the loss of 8 boats, a refund the CG has yet to recover, and Bollinger/Northrop supposedly never figured out how they blew a 13 ft. extension to boats Bollinger built in the first place.
- Competency 10 or 20 years ago does not necessarily mean they are competent now.
- Yes it is true that protests are common and that less than 10% are won by the filing party. I guess time will tell here.
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From a Federal Computer Week article:
"For Deepwater, the department must identify a competition strategy and explain each indefinite-delivery, indefinite-quantity contract. The congressional report also requests that Homeland Security Secretary Michael Chertoff amend the acquisition authority for Deepwater.
'Due to the Coast Guard's failure to adequately oversee the Deepwater program, the Secretary shall rescind the delegation of acquisition authority to the Coast Guard Directorate in order to keep oversight with the Office of the Chief Procurement Officer, as recommended by the Government Accountability Office,' the report states."
- Doesn't that statement by the Congress say that the current CG Acquisition Authority has failed to do their job? Didn't the CG take that role over from the LSI's recently? I don't think the CG's Acquisition Authority is in a position to say the following its closing:
"The Coast Guard's Acquisition Directorate is committed to providing the very best value to the taxpayers, while insuring that the service is most appropriately equipped and ready to respond to the nation's needs, both now and in the future."
I have something more important to address with the Coast Guard. They have been operation networks illegally without approval to operate and ignoring FISMA mandated policy for three years now. Talk about wrong.
Posted by: Jim Hendricks | Aug 13, 2009 at 02:34 PM
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]
Posted by: Michael DeKort | Jul 27, 2009 at 05:27 PM