The Troubled Waters Of "Deepwater"

(CBS)  This segment was originally broadcast on May 17, 2007. It was updated on Aug. 14, 2007.

After 9/11, few government entities were as poorly prepared to take on an expanded role as the U.S. Coast Guard. Already charged with sea rescues, drug interdictions and immigration enforcement, the Coast Guard became the primary maritime force for homeland security, tasked with protecting 95,000 miles of coastline and 361 ports with an old and antiquated fleet.

So five years ago the Coast Guard undertook a massive modernization program called "Deepwater" and ended up way over its head. As correspondent Steve Kroft reports, the $24 billion project has turned into a fiasco that has set new standards for incompetence, and triggered a Justice Department investigation.

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A promotional video for the biggest project the Coast Guard had ever taken on looked impressive enough: "Deepwater" would include 91 new ships and 124 smaller boats, plus new planes and helicopters.

But five years into the program, the Coast Guard has fewer boats and ships now than it did before it started. Congressman Elijah Cummings, chairman of the Coast Guard oversight subcommittee calls the program, "a mess."

"Here it goes to the national security of this country," Rep. Cummings says. "That's serious business. Particularly after 9/11. And so, you know, it pains me. It really does."

Asked if he thinks the Coast Guard in worse shape now than it was before it began Deepwater, the congressman tells Kroft, "They say they're not. But I think they are."

You can begin with the fact that the Coast Guard spent nearly $100 million to ruin eight patrol boats. The plan was to take the aging workhorses of the fleet, the 110-foot Island Class patrol boats, and lengthen them by 13 feet, adding a launch ramp for small inflatable boats and expanding the superstructure. But something went drastically wrong at the Bollinger Shipyard near New Orleans, where the first eight boats were extended.

"What you see is a lot of buckling. In the floor. And spaces where you know something is bending that shouldn't be bending in other words it should be flat," Cummings recalls.

After just a few weeks on the water, all eight boats experienced severe structural problems and had to be pulled out of service. They are currently tied up at a pier at the Coast Guard's Baltimore yard waiting to be decommissioned. Their problems, the Coast Guard says, are too serious to be fixed.

Rep. Cummings wanted to show Kroft the cracks and buckling himself, but the Coast Guard refused to let him take 60 Minutes on its base.

"We should not allow situations to occur where you spend $14 million for a boat that doesn't float," Cummings says.

"You don't think it was seaworthy?" Kroft asks.

"No. And they don't either. That's why when I say 'they,' I'm referring to the Coast Guard," the congressman replies.

How does that happen?

Says Cummings, "I don't know. The thing I'll tell you and I think I know partly. It started with some people not either paying attention. Or people who didn't care. Or people who were greedy. Or people who were incompetent. Or people who lacked integrity. Or a combination of all."

That pretty much sums up the sentiments of just about every government organization that has taken the time to investigate Deepwater and its problems, which go far beyond the patrol boats.

And there has been no shortage of whistleblowers shouting "Mayday." Some of the blame can be traced to the original Deepwater contract.

From the outset, the Coast Guard didn't have the resources to run a $24 billion project. So it outsourced the entire program to the private sector—not just the construction—but the day-to-day management of the contract. It went to a company called Integrated Coast Guard Systems, a joint venture of Lockheed Martin and Northrop Grumman that had been formed specifically for this job. Not surprisingly, the joint venture picked Lockheed Martin and Northrop Grumman to do the lion's share of the work.

One of the first people to send up a warning flare about the contract was Captain Kevin Jarvis, who, until his retirement last fall, commanded of the Coast Guard's Engineering and Logistics Center.

"People have told us, 'Look, the people that were supposedly managing the contractors were, in many cases, the contractors themselves.' The same companies. Correct?" Kroft asks.

"Correct. Correct. People say that this is like the fox watching the henhouse. And it's worse than that," Capt. Jarvis says. "It's where the government asked the fox to develop the security system for the henhouse. Then told 'em, 'You're gonna do it. You know, by the way, we'll give you the security code to the system and we'll tell you when we're on vacation.'"

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[aengichy]

Dear Sammyboy:
You have pointed out the pro''s and con''s about our US Coast Guard organization. The best improvement for any powerful organizations, example, for our US Coast Guard is not pretending that there is no problem. If you have kept hiding problem without reporting out to the American people, then there won''t be good and positive will coming out from, for improving roles , and enforcing discipline, especially toward the leadership in US Coast Guard. Forgive me for saying this, but Too many Officers were in charged in the office, and studied papers for passing test only for more paycheck, just to become an officers without the skills experiences about common sense to do a good job. These Officers did not cared about doing good job, except for helding power, and big paycheck, too.
Speaking of Which, The Navy folks have problem, but the good thing about the Navy, is they know how to taken cared of their every family members. They provided hospital just for their own. For example, when the US Coast Guard have messed up our tiny paycheck, and do not want to paying our healthcare, I have gone sleep without eating, except coffee, and water. These are really sadden for the small guy in the US Coast Guard have works so hard supporting his family and doing good job,(serving his country...) and have ended-up shuffling around, because of poor leadership coming from the top, and because I''ve happen to be a non-white, wife, too. Respectfully.

[sammyboy1790]

I am sad to see so many that seem to have lost faith in the USCG. I must point out that it is the U.S. Governement''s responsibility to ensure that the USCG is properly funded and they have done a pathetic job of it for many years. The budget for the USCG is about 1/20 of the budget for the US Navy. The U.S. Department of Defense budget is around $628 billion for 2008. The USCG budget is around $8 billion.

The deepwater program was origianlly devised to spend not-enough-money and in the end, the U.S. taxpayer will wind up paying for poor quality.

As it stands today, the USCG has one of the oldest fleets in the world and still they manage day-in and day-out without much complaint.

I know that there is no question of who is resposnible for the present mess - the U.S. Congress. Feel free to write them and ask them to start doing their jobs of supporting this service.

Here is a real article about the USCG:
http://www.time.com/time/magazine/article/0,9171,1122007-1,00.html

[aengichy]

This is a very serious issues about our US Coast Guard poor, and unworthy leadership. Is there any more report on %u201CRACISM%u201D in the US Coast Guard, for example toward family members, wife and children were non white? And if there is any serious case of RACISM in US Coast Guard have been hidden away, whom to we write to at CBS-60 Minutes for major investigation, too?

Respectfully.

[aengichy]

Speaking of Which, I was trying to watching the report on 60 minutes last night about the US Coast Guard %u201CTrouble Waters of Deep Water%u201D report was dated to August 19, 2007 by 60-minutes. Now, these are the real report it needed to given attention about, because these are the foundation for our American Democracy. If the US Coast Guard is hided what they are doing to the American people, then we are headed for failures of accountability to our nation, and our democracy. Every US Coat Guard are working for the American people, and are in charged of our %u201Chomeland security,%u201D too, and would be negligent for not provided open democracy to our American people. It would not fair for them to spy on our every American folks, but when its time for them to submitting report to the American people, the leadership of the US Coast Guard have close the door. Respectfully.

[aengichy]

test..test..

[expatkiwi-2009]

I know quite a few people in USCG. They are dedicated people, and the DO NOT DESERVE THIS TYPE OF MISMANAGEMENT. THe Coast Guard is an essential part of this nation''s defence, and when incompetance like this sets in, it puts the lives of evey coastguardsman and woman in danger. Someone has got to go in there and get DEEPWATER out of the quicksand!

[rlelievre1]

I spent 26 years in CG and ever year we would ask for **** dollars to Operate.And we would a small portion of what we ask for. and continued to do a good job. Look at New Orleans. Then there is 9-11 and they exspect the CG to get everything
they need to do over night.If CG would have gotten the Money they ask for, this ship expansion might not have had to happen. You should go back and do a study of why Congress alway cut the CG''s money yet excepted them to do there job there an old saying follow the money or should I say lack of Richard LeLievre

[archangelric]

to BearArnold: Live, unedited means that if he takes 4 hours to say 5 minutes worth of news you have to show the full 4 hours; very expensive.

to thoughtrules: you don''t have to believe they are "all a bunch of crooks and idiots", just that the CG finds itself hamstrung by a system that took operational control away and gave it to contractors who were inexperienced and only thinking of profit. Ever work in a defense industry? Most of the contracts are cost plus%; so the greater the cost the greater the plus (profit).

Coast50 did a great job of summing this up (read it below). This is not just about these examples but about a system that the CG had that was corrupted by outsourcing to the very people it was supposed to oversee.

Who allowed this contract in the first place?

[arnold88]

I find it unlikely that journalistic integrity can be used with this story. How about leveling the playing field and having Adm. Thad Allen on for a live UNEDITED one on one. Now that''s the type of action that Murrow, Cronkite, or Wallace would have gone for. Stop the ***-footing, let''s use only the maligning *** that we want, and give the man an honest chance to stand up and go for it. As a CG Veteran I am quite aware of what sort of used up, worn out *** that the CG has been forced to use in the performance of its duty.
The 110''s were used up pieces of *** when the FRAM jobs were done on them, and the first one should have been extensively tested before any others were altered.
That''s the usual manner, but not for Lockheed,Gruman,Northrup,Halliburton,KB&R. Ripoff is what they do and did, and jail isn''t good enough.

[tkoenig76]

I hope you noticed the US Coast Guard has shut down their email service on their web site under contact us... Wonder why... Now we have no way to tell them how we feel!!!

It''s times like this I''m so embarrassed to be an American...