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Congressman Cummings Continues Oversight of Deepwater Program

Washington, D.C.-This morning, U.S. Congressman Elijah E. Cummings, who is a senior Member of the House Committee on Oversight and Government Reform and Chair of the House Subcommittee on the Coast Guard and Maritime Transportation, participated in the Oversight Committee's hearing regarding the mismanagement of large homeland security contracts.

As part of a three-day series of hearings on waste, fraud, and abuse in government contracting, the Committee heard testimony on both the Coast Guard's Deepwater program and the Customs and Border Patrol's (CBP) SBInet security program.
Congressman Cummings said, "The hearing held today by the Committee on Oversight and Government Reform examined the challenges that have been faced by both the Department of Homeland Security (DHS) and its constituent agencies as they have worked to acquire the new assets they need to fulfill their new and expanding missions while at the same time trying to develop the systems they need to manage these acquisitions.

"Unfortunately, because the acquisition management capacities of the Coast Guard have failed to keep pace with the speed of new acquisitions, the Deepwater program has suffered from a lack of adequate oversight of the federal government. SBInet, which is in a similar position, is unfortunately threatened with the same fate.

"The Coast Guard sought to compensate for its lack of managerial capacity and systems by engaging a private sector contractor to both manage and implement its acquisitions programs. There is an inherent conflict of interest when any entity is responsible for both implementing a task and policing its implementation. This is a clear illustration of the fact that some essential government functions simply cannot be outsourced - and I hope that the government will learn from this example.

"Today, we also learned from both the Government Accountability Office and the DHS Inspector General's office that the contracts structured by the Coast Guard were essentially too vague to enable it to hold its contracting teams to even the standards of performance that the Coast Guard had previously developed. The contracts also did not provide adequate mechanisms for penalizing poor performance or allowing timely and efficient resolution of disputes.

"Astoundingly, despite the demonstrable inadequacies of virtually all of the ships that have been produced under Deepwater, the Coast Guard's irresponsible contractual arrangements resulted in the award of a performance bonus to its contractors. Such a situation is an insult to American taxpayers and cannot be tolerated.

"In all contracts, the federal government must have in place the systems that it needs to get the best value for the investments it makes with taxpayers' resources - and to ensure that it can require accountability of its contractors. Clearly, these systems were not in place in the contracts the Coast Guard issued for Deepwater - and as a result, ships have been produced that have either failed outright or suffered from serious design flaws.

"I continue to believe that Coast Guard Admiral Thad Allen will take the concrete steps necessary to correct the Deepwater procurement and to produce the assets that will meet the mission needs of the Coast Guard for decades to come. These steps must include the development of acquisition oversight capabilities that can restore our trust in the Coast Guard's ability to administer taxpayers' resources - and they must also include the development of contracting vehicles that put the government's interests before the profit concerns of private contractors.

"The Coast Guard's Deepwater procurement provides a cautionary tale to DHS and indeed all federal agencies that we should not use a systems integrator model in contracting without also implementing the necessary checks and balances to oversee the integrator. I hope that after our hearing today, CBP will carefully heed this warning in its SBInet program.

"As the Chairman of the Subcommittee on Coast Guard and as a longstanding Member of the Committee on Oversight and Government Reform, I will continue to work closely with Admiral Allen and with the Coast Guard's contractors to ensure that the Deepwater procurement is put on the path to success."