Thank you very much.  We are here today to discuss the single most vital homeland security acquisition program facing our nation –  Deepwater.  Regrettably, despite the tremendous urgency for upgrading the Coast Guard’s assets on the water and in the air, we are compelled to focus our attention today on the Coast Guard’s apparent failure in managing this multi-billion dollar, multi-year project. 

Before I turn to the Coast Guard and our other witnesses, I want to first commend you, Senator Cantwell, for calling this hearing so quickly.  And of course I congratulate you on assuming your position as Chairwoman.  I know you share my alarm over the troubling pattern of mis-management that the New York Times and the DHS Inspector General has discovered, and it is indisputable we must restore accountability to the Deepwater program for the sake of our critical Coast Guard service and our homeland security.  Because I’m deeply troubled that this mis-management is not only a breach of trust with the American people, but has also undermined a program that is so vitally important to our future.

First, we must understand exactly what happened – and why – starting with the National Security Cutter.  As revealed by Eric Lipton of the New York Times on December 9th and the DHS Inspector General last month, the Coast Guard was fully aware of significant design problems with this cutter since at least 2004.  The investigators found that the design of the ship, if not corrected at considerable cost to the US taxpayer, may not allow it to meet a 30 year fatigue life.  In addition, they reported that the design and performance deficiencies are fundamentally the result of the Coast Guard’s failure to exercise its technical and management oversight. 

And now, I am profoundly troubled by further reports that the Coast Guard intentionally withheld specific structural design flaws of the National Security Cutter when submitting documents to the IG.  Unquestionably the Coast Guard has jeopardized the trust that is so essential for support of its vital programs if this is so.   

Indeed, I am not only troubled to learn of the Coast Guard’s problems with managing Deepwater and working with the IG – I am equally distressed about how these transgressions may have damaged the Coast Guard’s relationship with Congress.  I have been the Republican leader of this Coast Guard oversight subcommittee for more than ten years, and Deepwater has been the subject of at least 10 of our hearings since 2001.

In addition, I have requested two GAO audits of Coast Guard’s Deepwater Oversight, asked Secretary Chertoff to conduct a “Best Practices” review of Deepwater management, and inserted language in three separate Coast Guard Authorization Bills directing the Coast Guard to report on Deepwater asset and timelines.  In fact, last October my staff visited the Northrup Grumman Shipyard in Mississippi, where the Coast Guard gave them a tour of the National Security Cutter from stem to stern, and they received no indication of any problems whatsoever. 

Despite the numerous means by which we exerted our oversight, the Coast Guard failed to alert us to any allegations or investigations into problems with the Deepwater program.  Not once during these hearings, briefings, or visits was there any mention of the significance of structural design issues or fatigue life concerns.  Not once did the Coast Guard relay to Congress the intensity of the debate and the seriousness of the issues surrounding what many have called the Flagship of the Deepwater effort.  The failure to inform us of such serious structural failings in the National Security Cutter is unprecedented, and unacceptable.

It is simply unconscionable that the Coast Guard did not bring these issues to light prior to December 2006.  Transparency and accountability are essential to any program of this magnitude, and even more so given the innovative nature of Deepwater’s public-private partnership.  And yet, the Coast Guard has had considerable difficulties with oversight and execution of Deepwater acquisitions.  Here we are, stunned by the scale and scope of management failures that threaten to derail the entire program.  Our taxpayers – and our national security – are not well served by the “ruthless execution” that the Coast Guard has demonstrated in charging forward on the National Security Cutter despite grave concerns with the ship.

Admiral, understanding what went wrong in all these instances is only the first of many steps essential to correcting Deepwater’s course.  The second step is for all parties to hold themselves accountable for their roles and decisions in this debacle.  Admiral, I appreciate that you have assured me – in writing and in person – that you hold yourself personally responsible for all Coast Guard actions, regardless of when the decisions were made.  And it will be critical that the commitment to reorganize Coast Guard leadership that you expressed in yesterday’s State of the Coast Guard address comes to fruition – to help stem the tide of poor decisions that has brought us to this point.

Moreover, in light of the recently released of the Defense Acquisition University recommending changes in Deepwater’s acquisition strategy, contract structure, and management, I expect the Coast Guard to develop and present to Congress a detailed plan outlining its strategy for regaining control of the this program before coming to a final agreement with ICGS on the next Deepwater Award Term.  Any new strategy must include the Coast Guard improving its acquisition processes and reasserting its oversight responsibilities.  To do anything less places the entire Deepwater program in jeopardy, and does a profound disservice to the brave men and women of the Coast Guard who desperately require these resources.

As for the allegations of stonewalling and finger-pointing in the IG’s investigation, I will introduce legislation that directs DHS to develop an audit plan so that the IG will not be encumbered in its future work.  It is simply unacceptable that lack of clarity on IG authorities should hamper investigations on such a critical national security program.

The reasons we need to improve – and perhaps even reform – the Deepwater process are rooted in the urgency for modernizing the Coast Guard fleet.  I chaired the April 2004 budget hearing when your predecessor brought in a thin, rusted piece of metal from the hull of a Coast Guard Cutter to make his point about the state of your fleet.  It is almost 3 years later and those decaying vessels – some up to 64 years old – are still patrolling the waters off our coast.