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Jan 13, 2009


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]

Michael DeKort

- The GAO asked for two extensions that would have put the decision past the inauguration. Then 3 days before the original deadline they make their decision? What were the extensions for? Did someone press for a decision before the new administration takes over?
- Previous performance is normally part of the process. Congressional aids told me that the Coast Guard didn't evaluate previous performance of Bollinger, relative to the 123 debacle, because the DHS IG and DoJ hadn't finished their investigation. How convenient is that? (The DoJ is also now responsible for the 123 refund acquisition.) Did the GAO ignore previous performance too or do their own investigation? If so what did they find? It's interesting that the Coast Guard can ignore previous performance of an ICGS subcontractor and award them what may be a $1.5b contract and they virtually ignore what is very recent poor performance.
- A little while back the DHS took back acquisition authority. Did they approve this?
- Marinette Maine was the low bidder.
- I was told the Coast Guard didn't evaluate any of the Bidder's C4ISR solution. That's interesting because it is 1/3 or more of the cost of each boat.
- Bollinger sued Northrop right after the protest was filed. In the suit they ask for $12m in compensation for hull and C4ISR work because the 123 contracts were canceled. In the suit Bollinger said Northrop was completely responsible for the Hull, shaft and C4ISR problems. If there was no wrong doing why try to pass the blame? Sure looks like Bollinger was trying real hard to void the blame so the GAO, DHS IG or DoJ wouldn't come down on them or find reason to deny the FRC award. Also - we learned from the lawsuit that ICGS appears to not only be inclined to pay the $96m 123 refund but they believe they may be due compensation for the government canceling the contract because all of the 123s were lost.

I realize there are a lot of factors that go in to issues like this. And a lot of politics. Maybe Bollinger has the best product etc. Additionally I have no problem with the people of southern Louisiana getting a big contract. They could use the break. But something seems wrong here. Did the GAO investigate Bollinger's performance and make some kind of evaluation of that? If not shouldn't they have waited until the DoJ and DHS IG finished their investigations - especially since they were investigating all of the potential wrong doing relative to the 123 project? Why did the GAO ask for two extensions they didn't use? Why didn't they wait until the new administration took over - especially since both of the extensions they asked for were after 1/20? Did the DHS and Coast Guard pull a fast one while they could? Will the Obama administration step in and review this? Can the DHS and Coast Guard keeping giving the parties involved in the 123 debacle
more work and more money - especially since it appears that the contractors not only have not interest in paying the $96m refund but may want to be financially compensated because the government canceled the contract?

Time will tell. The GAO's report on this decision is due soon. Let's see what that says.

Laura Williams

“We are of course very pleased with GAO’s decision. The Coast Guard had been confident, especially given the acquisition reforms our agency has put in place and with the rigor and discipline followed throughout the process for this patrol boat contract award, that GAO would ultimately uphold the Coast Guard’s decision. I appreciate the role that GAO plays in maintaining the transparency and equity of the federal procurement process and now that GAO has issued its decision, we can proceed with this critically important Coast Guard acquisition program,” stated Rear Adm. Gary Blore, Assistant Commandant for Acquisition.

To read more about this subject from the U.S. Coast Guard, "GAO Upholds U.S. Coast Guard Award of Sentinel-Class Patrol Boat to Bollinger Shipyard," visit:

Michael DeKort

GAO FRC decision emboldens Coast Guard leadership

From the Navy Times article that can be found here

Statements from Adm. Blore

“We are of course very pleased with GAO’s decision. The Coast Guard had been confident, especially given the acquisition reforms our agency has put in place and with the rigor and discipline followed throughout the process for this patrol boat contract award, that GAO would ultimately uphold the Coast Guard’s decisions,” Blore wrote in a statement released today.

“It’s big because of the general statement it makes about our acquisition process because this is the same process we use for everything,” he said. “There is nothing unique about the patrol boat. It’s the way we do acquisitions. It’s nice that a very independent, experienced party, in the GAO, upheld that. We respect the fact that because of mistakes that have been made in the past we needed to improve our processes, and we think this upholding of the award of the contract does just that.”

Of course the GAO’s report is not out so we do not know what they reviewed and based their decision one. We also do not know if they looked in to Bollinger’s performance on the 123project or simply chose to ignore it, as the Coast Guard did – citing that they were unable to include those issue in their determination because the DoJ and DHS IG had not finished their investigations. Said differently – it appears that the 123 issues, outstanding refund, lack of accountability or understanding of what went wrong on the 123s and the desire of the ICGS parties and Bollinger to seek compensation from the government relative to the 123s played no part in anyone’s decision here. (The Coast Guard also had to increase funding to update the 110s that never became 123s. That brings the 123 debacle monetary total to well over $200m. Imagine if ICGS were able to collect further compensation because the government canceled the 123 program) Additionally it
appears that the GAO may have been determined to make their decision prior to the Obama administration taking over as they finished 3 days earlier than their originally projected completion date in spite of making two changes to that date – pushing the final anticipated closure date to 2/25.

I guess we will have to wait and see what the GAO report states, what the DoJ and DHS IG come up with and what the Obama administration does with all of it.

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