The Troubled Waters Of "Deepwater"

Congressman: The Country Is Less Safe Than Before $24 Billion Refurbishment

(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.'"

[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...

[littleblue12]

Another Bush-era faux pas? I am angry at our government for pouring millions of dollars down the drain when we have VA hospitals falling apart. New Orleans snd the surrounding area hasn''t changed much since Katrina destroyed so much of the South, yet the working people in America are footing the bill for these idiots. And we never seem to listen to the people who know what to do. The government turns a blind eye and the only people who care are the ones who lose their jobs because they told the truth! I am hoping that we can get the Navy to build the ships for the Coast Guard, they know what they are doing! Quit outsourcing to greedy comtractors. Use what is available to us. Our enemies watch 60 minutes too.

[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

[coast50]

The story is worse than CBS reported. The radios are a minor item. Contracting Officers in CG are usually military, I think. CG should never have had a separate Deepwater command not responsible to engineering elements in the CG. CG took a major contracting and design job and farmed it out, when in my opinion, it should have been done in house. CG did not exercise proper oversight and contractor did not do his job ie properly design and develop needed dwgs and evaluate problems early on.

[thoughtrules]

One last amateur input to this whole thing and I'll sign off (from this sad story forever!) and let all the important players grandstand like our politicians do over such drivel... One thing someone pointed out to me (another blind call I made that someone answered...producers????) is that this camera issue You Tube guy cackled about with Kroft is also wierd. Apparently, every bit of the ship onto which the boogie man or a terrorist could access his way on to the ship aqnd do harm IS covered. The bridge isn't in some spots. If my CG professionals need a camera to show them who is outside the door of the bridge that is ALWAYS manned and armed ... as far as I understand a CG ship under way ... then they ain't the pros I truly believe they are. Access points are what need camera coverage...not places where people (heavily armed and trained ones at that) always reside. Heck, I'm a democrat, I'd love to save money on that meaningless camera too. (OK, I admit, I only got one confirmation on this so I would be glad to be countered on this point (You Tube guy??)

[thoughtrules]

Another thing I recently found out about the lengthened boats is -- guess what Congressman, they ain't shrimp boats. Because the CG was grotesquely underfunded, these were boats already years (I think the guy even said "decades") past their structural life. A similar process had indeed been successful on Navy vessels, but these were not only within their structural life-span, but required an easier fix. Were they wrong to gamble on an untried process on steel way past its "Use By" date? Yeah... but I think they were trying to save taxpayer money by doing so. Ya think the industry guys would have preferred boucoup bux for building new "workhorse" boats instead of retrofitting these rotting hulks? Anyone ask that question?

[thoughtrules]

Whoever is speaking for You Tube guy is pretty defensive on this nit-picky issue of radios. The fact remains, in only minutes of "citizen research" (I'm not a media guy) I found out that the CG and industry ordered systems very similar to what the Navy and other federal agencies (like law enforcers) order for THEIR similar boats. For them, like the CG Deepwater radios, there IS a risk of shorts and the like. And it sounds to me like the program did what they were supposed to do...they changed the radios out when the specs allowed them to upgrade, and the engineers agreed the specs could be met cost-effectively. Sounds like responsiveness and fiscal responsibility to me.

[thoughtrules]

You would have had to begin a story like this with the absolute belief/bias that the CG leadership, the Northrup people and the Lockheed people are all a bunch of crooks and idiots. All of em except our brave hero with the web cam. That just struck me as bizaare, and I only know the CG brass from the TV, and I only know people who work in these kinds of industries socially. But I know as a citizen who lives a regular life that there is no conspiracy like they imply. OK, I grant You Tube guy is probably heartfelt and not sinister in his opinion about the program. But it would seem to me the job of a journalist/news producer (much less two Congressmen) is to look at reality from all angles and report the reality, not *** sounding half truths... In a couple of hours of research on the Internet, in the library and in blind calls around Washington, DC, I found a completely different set of perspectives about some pretty explosive charges that Kroft, You Tube guy, and the rest throw around.

[thoughtrules]

The point of all the concern about this story is that inspired me and other 60-Minutes geeks to BEGIN researching that night (and find a whole bunch of inconsistencies and credible doubts about people like "You Tube" man in a few hours of basic research) is that 60-Minutes must have done no real substantive assenssment of what are extremely sensitive and technical (even explosive) issues. Wallace wouldn't have done that. Indeed, how can you dare do that when you wind up blithely demeaning thousands of working stiffs and literally framing a great service of public servants as a joke...all for ratings, and to make You Tube man famous and employ-able.

[cgmember]

The composite hulls were mentioned in the interview. Let me help shed some light on that issue...

As stated in the interview Northup Gruman owned the "ONLY" shipyard on the Gulf Coast that was capable of building a composite hull of the required size. Northrup Gruman was also 50% of ICGS...therefore it only made good company sense to approach the CG with a composite hull plan. Why not? Northup Gruman runs the contract and then offers it to themselves to build. What could make it any better?

Oh yeah I forgot to mention...Northrup Gruman also proposed to pay a substantial percentage of the composite hull prototype. Don't make the mistake of thinking they were being generous.... they would have more than made it up in follow-on hulls once they convinced the CG composite was the way to go.

[cgmember]

I love the way everyone jumps on the band wagon when they see a mistake...evn without really knowing the full story!

This interview and video is ridiculous. Everything about it from the congressmen, to the whistleblower, and especially the sensationlist reporter...my god could you make it any more Jerry Springerish?

I won't go into the specifics of the contract or shipbiuilding, but I will comment on the CG's readiness and stance. The USCG, even before 9:11, was responsible for protection of US waterways, coastline, ship inspections, and a thousand other assignments the general public never hears about could even fathom. We performed these jobs with equipment and personnel shortages then...just as we perform them now! We have never faultered in our job because we were short on something. We made due and got the job done. We are a small and very proud service with many, many jobs that we do very well.

My real point of posting here is to advise anyone to not listen to this kind of sensationlism reporting and learn the facts for yourself. I've always had a high opinion of 60 Minutes until I saw this video. I was involved in the Deepwater project for some while and that gives me very good insight on just how realistic this report is...and in my opinion it is simply a weak attempt at stirring controversy vs showing the real CG. 60 Minutes should try to save face and leave this type of reporting to Springer.