Deepwater Update and Outlook: The Leading Edge of Acquisition Reform

By PATRICK M. STILLMAN

Rear Adm. Patrick M. Stillman, USCG, is program executive officer, Integrated Deepwater System, at Coast Guard Headquarters.

This year has been a crucial one for the Integrated Deepwater System acquisition program, commonly referred to as "Deepwater." This multiyear acquisition will replace and modernize our aging force of cutters and aircraft--and their supporting command-and-control and logistics systems--used to perform essential operations in support of America's maritime safety and security. These aging assets are expensive to operate and maintain, and they lack essential capabilities in speed, sensors, and communications. Because they were acquired individually, moreover, they also lack interoperability and commonalities, limiting their overall mission effectiveness and efficiency.

Deepwater is the largest, most complex acquisition program in Coast Guard history. It will affect processes throughout the service, which means that high-level coordination is required to address critically important Deepwater issues. To meet this leadership and management challenge, we established the Program Executive Office (PEO) on 9 April 2001. This is the first such organization in the Coast Guard's 212-year history.

Another key event in 2001 was the release on 29 June 2001 of the Deepwater Request for Proposals (RFP). The RFP seeks an industry-team partner "to design, construct, deploy, operate, support, and dispose of the Integrated Deepwater System." Not only does release of the RFP mark a major milestone in our quest to rebuild our offshore capability for 21st-century service, it also puts the Deepwater program on the leading edge of federal acquisition reform.

Most of the Coast Guard's Deepwater assets (93 cutters and 206 aircraft) will reach the end of their service lives within the next 10 years. Instead of initiating concurrent but disconnected platform-replacement programs as we have done in the past, we looked at our deepwater assets as an integrated system. This approach allowed us to focus our strategy on common systems and technologies, common operational concepts, and a common logistics base, which in turn provided us with operational and cost efficiencies that we otherwise would not have if we had pursued independent programs.

A World-Class Industry Team

We decided that the best way to implement the integrated Deepwater concept would be in partnership with a single world-class system integrator leading a team of experienced high-quality subcontractors. By structuring our acquisition this way, we can benefit from private-sector innovation, the "best practices" concept, and other cost efficiencies.

We also decided on a performance-based acquisition strategy. Instead of giving industry the specifications required for specific assets, we are providing specifications for the capabilities we will need to carry out our deepwater missions worldwide. With the exception of the National Security Cutter, there are no preconceived requirements for a certain number or type of surface or air assets.

Deepwater's focus on capabilities permits industry to use both new and proven technologies in designing systems of surface, air, communications, sensors, and logistics-support assets to meet requirements. But it still holds the integrator responsible for ensuring that the systems work together, and that they do so in a way that maximizes operational effectiveness while minimizing total ownership costs. We will diligently measure the results.

Both industry and the Coast Guard face many challenges. We must optimize the performance of the Integrated Deepwater System while containing lifetime system costs. The PEO must achieve measurable mission-perform-ance goals, but must also give the system integrator enough room to apply the industry team's knowledge and creativity to resolve trade-offs between Deepwater's operational and fiscal mandates. In short, our Deepwater acquisition strategy relies upon a blend of oversight, open communications, and contract incentives designed to foster competition and innovation. Together they give the system integrator as much a stake in making the program work as we have.

We are confident that this acquisition strategy will prove successful. We have engaged the best minds in both industry and government to help us realize our Deepwater vision. The administration has demonstrated its own strong commitment to Deepwater, and the president's budget requests $338 million in funding for the program in fiscal year 2002. I believe this commitment will continue in the future, provided that we continue to run a successful, cost-conscious program focused on fielding and supporting an Integrated Deepwater System that safeguards the maritime safety and security of the United States and provides the best value to America's taxpayers in doing so. That is our goal, and we intend to achieve it!