The House Oversight and Government Reform Committee has held a third contracting oversight hearing, focusing this time on DHS’s management of large contracts relying on private contractors as "system integrators," specifically the Deepwater Coast Guard modernization program and Secure Border Initiative.
The Deepwater contract was initiated in 1998 and projected to cost $17 billion to modernize the Coast Guard fleet, but has only "produced a series of lemons," and wasted hundreds of millions of dollars, said committee chairman Henry Waxman, D-Calif. The contract is now projected to cost $24 billion.
Waxman asked in his opening statement how and why a nine-month Navy assessment of a key aspect of the new fleet, a 425-foot cutter, was edited by the Deepwater project office to remove a series of bottom-line warnings in red ink saying the vessel would not hold up for the duration of its projected life span in part because of design flaws.
The altered slides were presented to the Coast Guard Commandant, Thad Allen, a few months before the contract was to be renewed. However, Allen reportedly testified that the substance of the warnings had been incorporated elsewhere in the report.
Waxman said DHS "ignored the warnings," and that it was making the same mistakes with Boeing’s contract, estimated around $30 billion, to implement SBI, and criticized the department for considering "no task too important to be outsourced to contractors," namely oversight.
More than half of the project’s oversight staff consists of contractors, some of who are supplied by Boeing’s partners.
