Coast Guard Awards Deepwater Contract

A Performance-Based System of Systems

Interview with Rear Adm. Patrick M. Stillman, Program Executive Officer, Integrated Deepwater System

Editor in Chief James D. Hessman and Senior Editor Gordon I. Peterson interviewed Rear Adm. Stillman for this issue of Sea Power.

As the first program executive officer of the Integrated Deepwater System (IDS) acquisition program, Rear Adm. Patrick M. Stillman leads the largest recapitalization effort in the Coast Guard's history. The Deepwater program will develop, acquire, and sustain an integrated system of the next generation of surface, air, command-and-control, and logistics assets that serve to protect the United States and support the Coast Guard's many missions. A landmark Deepwater contract valued at $11.04 billion was awarded in June to Integrated Coast Guard Systems, a joint venture established by the Lockheed Martin and Northrop Grumman Corporations.

Prior to his present assignment, Stillman served as the Coast Guard's assistant commandant for governmental and public affairs. His career includes numerous afloat and shore assignments, including command of the Coast Guard Barque Eagle. He also commanded the 270-foot medium endurance cutter USCGC Forward and the cutter USCGC Cape Cross. His shore assignments include tours as chief of staff, chief of operations, and chief of the Coast Guard's Atlantic Area Operational Forces. He also served as the commandant of cadets at the U.S. Coast Guard Academy. Stillman graduated from the Coast Guard Academy in 1972 with a Bachelor of Science degree. He also holds a Master of Arts degree from Wesleyan University and a Master of Public Administration degree from George Washington University.

Sea Power: Admiral, now that you have announced the award of the Integrated Deepwater System contract, could you please describe the key determinants behind the Coast Guard's down-select decision?

STILLMAN: The down-select process leading to our source-selection decision was extremely detailed. Frankly, I marveled at the commitment of the evaluation team during its work. We looked at four key areas: the operational effectiveness of the system, the technical feasibility of the solution proposed by the offeror, the managerial capability of the offeror, and, finally, the analysis of the total-ownership cost of the system. The desired end state was highest performance with best value to the public.

It is important to realize that Deepwater takes a system-of-systems approach to design and acquisition. This is unquestionably the right way to do business for the long term. It forced us to step back to begin with the "end in mind" so that we could provide a system-performance specification to three industry teams for their design of a new system. This was a fundamental construct in how we structured the program, and it allowed us to steer toward our destination successfully. We based the evaluation process on the performance construct of what we are trying to accomplish--operational effectiveness and reduced total-ownership cost. It was absolutely the right way to evaluate the proposals.

We used an Air Force software package that highly documented the evaluation team's analysis. We had close to 30 people involved in this undertaking, and they spent close to 60,000 man-hours in arriving at their decisions and recommendations. I am absolutely enthralled with their effort, because it was so detailed and comprehensive. It is a great construct for framing your written management requirements at the start of a program so that you are able to partner more effectively with industry in the long run.

Some skeptics question the Coast Guard's ability to deliver this program on schedule and within programmed cost. How would you reply?

STILLMAN: It is safe to say that, in any complex acquisition undertaking of this nature, risk management is absolutely central to your success. The reality is that cost, schedule, and performance issues bear down daily on the people who execute the program. You need to be adroit enough to look to the horizon during the execution of the program, identify where the risks are, and be forehanded in dealing with them so that you don't begin to experience additional costs and unacceptable technical delays--or detract from the very tangible products that you bring to the men and women of the Coast Guard.

The General Accounting Office constantly, in assessing large ACAT I [Acquisition Category One] acquisitions in DOD [Department of Defense], NASA, DOE [Department of Energy], and now the Coast Guard in DOT [Department of Transportation] focuses on the need for risk management to be a honed and extremely well-defined discipline.

We will follow a robust risk-management approach in partnership with the system integrator as we execute the Deepwater program. The Coast Guard and our industry partners--the Deepwater team--will deliver this program on or ahead of schedule, and on or under budget. We are committed to this goal. Cost, schedule, and performance rule the day, and we won't lose sight of that.

What factors set the winning Lockheed Martin-Northrop Grumman team's proposal apart from the two others?

STILLMAN: I don't think that it would be appropriate for me to go into the details of each team's proposal. It is important to realize that we had three committed industry teams during phase one and phase two of the undertaking. They provided very valuable and superlative work with respect to the request for proposals that was on the street. We had the responsibility, unquestionably, to select the team that provided best value to the American taxpayer, and we did so.

Perhaps another way to phrase the question is to ask how difficult it was to reach the final decision--did you have three competitive proposals and an equitable process in place to select the best?

STILLMAN: Yes. It is safe to say that the process is everything, and I believe my contracting officer would agree with me. You must be disciplined and adhere constantly to the defined process for the evaluation. We took a very comprehensive approach and followed a well-defined process to ensure the proposals were evaluated properly based on the information provided to us by each offeror. There were a number of different parties tied to the process. A source evaluation board reviewed the results of the people actually involved in the evaluation. A source selection official was responsible for making the decision. This was a hard undertaking.

Deepwater is a system of systems. It is extremely complex and performance-based, so our evaluation required an immense amount of analysis. We committed a phenomenal number of man-hours to this undertaking in order to do it right. I will say, without any reservation, that the people who served on the evaluation team and the advisors assigned to assist them did an absolutely magnificent job. The fact that there were no protests tied to our decision is indicative of the fact that we did our homework and were diligent in terms of our responsibilities.

Why is the Deepwater procurement contract--the largest one of its kind in Coast Guard history--so important to the future operational effectiveness of your service?

STILLMAN: Taking a system-of-systems approach to the Coast Guard's core operational responsibilities is the foundation that one lays for a far better and more capable Coast Guard over the course of the next two decades. I have been very focused on what has transpired since September 11th of last year. Many people have said that the Coast Guard has changed significantly in light of the war on terrorism--and that we needed to redirect our mission focus. I don't agree; our organizational essence remains the same--a maritime, multimission, military Coast Guard is responding with adept flexibility.

That terrorist attack reinforced for me that our history is terribly important. More than 200 years ago, when Alexander Hamilton placed the first Revenue Marine vessels on station, he did so to ensure that they were "sentinels of the law." The reality is that today's Coast Guard--both pre- and post-9/11--is the nation's sentinel of the law at sea.

That law takes on multiple mandates--be it fisheries enforcement, search-and-rescue operations, drug interdiction, migrant interdiction, or the enforcement of environmental statutes. The reality is that our nation has sovereign concerns that manifest a surveillance requirement in both brown and blue water. During that surveillance you must be able to detect contacts and, once detected, you must be able to identify and classify them. Once that information is translated into knowledge, you must decide how you are going to prosecute the vessel or incident of concern.

That performance continuum holds true for every one of our mission requirements. The flow of variables may change somewhat, but the requirements are the same to the operator. You need great sensors. You need great interoperability and interconnectivity--across multiple agencies in the post-9/11 environment. You need to get a boarding party aboard to be a sentinel of the law--this is as true today as it was 1789! I am absolutely confident that the systems-performance specification used to design and provide a foundation for the Deepwater system is the right way to do business, and it will have an immense impact on enhancing the Coast Guard's operational effectiveness.

What are some of Deepwater's most important provisions?

STILLMAN: We will have far better C4ISR [command, control, communications, computers, intelligence, surveillance, reconnaissance] capabilities, interoperability, and interconnectivity--across multiple agencies. The superb foundation of this entire enterprise means that the Coast Guard's C4ISR systems will truly be the foundation of our operational effectiveness in the 21st century. That is critically important. We will take those systems and install them on legacy assets as well as recapitalized cutters, aircraft, and unmanned aerial vehicles [UAVs] and operate far more effectively in the military and maritime environments. We will realize an end state of maritime-domain awareness! That's the bottom line.

Perhaps you could share some illustrative examples of why the Coast Guard's cutters, aircraft, and helicopters are so sorely in need of modernization?

STILLMAN: We have one of the oldest fleets of ships in the world. Our aircraft are aging and experiencing readiness problems. Operational incidents tied to readiness problems manifested the clear need for the Deepwater program to move forward. Consider the accident we experienced in the Bering Sea when the [Coast Guard cutter] Storis, a vessel built before World War II, lost a boat crew with nine souls in the water when the aft boat davit fractured as the result of metal fatigue. Fortunately, all these shipmates were safely recovered.

When incidents like that begin to take place, it's time to step back and reassess the best way ahead. Our focus on readiness is very appropriate, because we have a responsibility to ensure that we give our people the right tools to do the job. We became very diligent in measuring the impact of operating antiquated systems. Poor logistics support, a lack of spare parts, and increases in operational and personnel tempo forced us to reassess the can-do attitude of the Coast Guard. Deepwater is an important part of the response to that challenge. Fortunately, it is now a reality and, as a result, we will bring improved systems to the operator.

What are the key milestones leading to Coast Guard acceptance of the system's first major new platforms?

STILLMAN: The beauty of Deepwater is that we will decide how to modernize existing assets and when to recapitalize. We are talking about an inventory of a significant number of ships and aircraft, so we will not do it overnight. It's going to be a 20-year undertaking. I hope it takes less time if we really prove our worth and obtain accelerated funding.

During the first five years we will invest in existing assets to increase their surveillance and C4I sensor capability. There will be significant improvement in our data-fusion capability as these new systems come on line. The modernization of all 49 of our 110-foot patrol boats will begin. We will stretch them to 123 feet and improve their habitability, engineering, and C2 [command and control] systems. The detailed design and construction of the replacement for the National Security Cutter [NSC] will commence. This is of fundamental importance to the Coast Guard's capability to attend to the business of maritime security and safety. The first unmanned aerial vehicles also will be introduced during the first five years of Deepwater. We will also begin the modernization of the fleet of HH-65 helicopters as well as the replacement of our fixed-wing maritime-patrol aircraft. Wrap this all together, and we're going to be real busy!

Will these improved capabilities also advance the Coast Guard's work with the Navy to build a National Fleet?

STILLMAN: Yes. Fundamental to Deepwater's systems-performance specifications is the mandate for interoperability with the Navy. Unquestionably, you will see far- and wide-ranging improvement in this regard. In addition, I think that both the Navy and Coast Guard recognize now that there is an enterprise architecture that we must consider collectively to attend to the war on terrorism and the needs of homeland defense and security.

We are able to address this requirement through the Nav-Guard [Navy-Coast Guard] Board and the interchange between the DD(X) [the Navy's next-generation surface combatant] and Deepwater programs. We will be very active to ensure that we are not compromising the National Fleet agreement. Both the CNO [Chief of Naval Operations Adm. Vern Clark] and the Coast Guard commandant [Adm. Thomas H. Collins ] are absolutely committed to the principles of interoperability, compatibility, and nonredundant capabilities.

The Navy is committed to providing combat-systems definition and support as it pertains to many of the Deepwater assets. The CNO has issued a naval operational-capabilities statement for replacement of the 378s [Hamilton-class high-endurance cutters], and statements also were issued not too long ago for the replacement of our MECs [medium-endurance cutters] and WPBs [patrol boats]. We will assimilate these requirements during the road ahead.

The cooperation between the Coast Guard and the Navy has never been better. We are committed to serving the taxpayer and attending to the maritime security of the nation. There is direct correlation between the Navy's transformation strategy and the direction we have chosen with the Deepwater system-of-systems approach.

Does Deepwater offer the potential for added sales in the international arena?

STILLMAN: The program's potential for international sales is good. Although we are still at an early stage, Admiral Newsome [Rear Adm. Larry D. Newsome, director, Navy International Programs Office, or IPO] and his people in the IPO have been very helpful and extremely supportive in assisting us to begin the journey of promoting foreign military sales. The same is true for the Department of Commerce. It goes without saying that if you look at many of the world's navies you will find a need for interoperable frigates, corvettes, and patrol boats able to attend to sovereign concerns in the maritime arena. Those concerns, more often than not, are identical to the U.S. Coast Guard's missions.

With regard to the future systems and platforms you will need as part of the Deepwater long-range recapitalization program, is everything on the table?

STILLMAN: That's exactly right. And because all options are on the table and we now have a partnership with Northrop Grumman and Lockheed Martin, we will be able to take full advantage of their resources. The taxpayer is going to gain a great deal. We have never--in the history of the Coast Guard--had such commitment and support from corporate partners of their stature. We fully intend to leverage it in a number of ways.

Could you explain what you mean by a performance-based specification?

STILLMAN: In practical terms it means that you begin the design process with the end in mind--you are courageous enough to provide industry a desired outcome and tell them to design the best possible system to reach those results. You do not encumber them, in many respects, with countless constraints. To the contrary, you maximize their space to trade design features and capability through the use of well-conceived and measurable outcomes.

An example would be either to provide a very, very detailed analysis of the requirements for the National Security Cutter or, as we will do in Deepwater, to provide high-level system-performance specifications suitable for the functional and conceptual design of that cutter. We will take these specifications to a far higher level during the detail design of the craft in terms of interconnecting aviation, surface, and C4ISR capabilities--all with an appreciation for life-cycle costs and necessary logistics support over the entire life cycle of the system.

During the war on terrorism, some long-time supporters on Capitol Hill have asked if it is necessary for the Coast Guard to have its ships, aircraft, and helicopters forward-deployed beyond U.S. coastal waters. What would you say to them?

STILLMAN: We are a maritime nation with keen interests in the global commons. That is the battlefield for terrorists. I don't think for a minute that we should inhibit the free flow of commerce off our coasts and impose a detrimental impact on the very lifeblood and the economic welfare of America. We all recognize this is fundamental to sea power. We must press our borders out to confront multiple asymmetric threats with the blanket that is maritime-domain awareness and the effective use of "naval" power, and we would be deeply remiss if we did not attend to that.

I am not at all surprised that individuals on Capitol Hill and elsewhere might question if the deepwater capability is now applicable post-9/11 because the world has changed. But the reality is that adapting to such change has been fundamental to the center of gravity of the Coast Guard's mission capability for more than two centuries. If you look at the inventory of platforms planned for the Deepwater program, I don't see how you can reach any conclusion other than it is absolutely essential if the Coast Guard is to be able to attend to the homeland security of the nation. It is fundamental for our surface fleet of cutters and coastal patrol boats. It is fundamental for all of our aircraft. It is fundamental to command and control across our shore commands and operating assets. It is fundamental for our surveillance capabilities and the attainment of maritime-domain awareness.

Eventually, down the pike, the UAV that we fly off the NSC might have a Coast Guard stripe, a Customs sticker, and a Border Patrol sticker! We should consider owning the asset collectively. This is what Admiral Collins has emphasized in our focus on stewardship and the effective use of all resources. In the long term, that is how I hope the Department of Homeland Security will proceed.

When will we see the first new Coast Guard cutters reach the fleet?

STILLMAN: The first new cutter, the NCS, will be delivered in 2006. The retrofits of the 110s [patrol boats] will begin this year--when we actually cut steel will depend upon the detailed design required for this upgrade. There is no question that Mr. Bollinger [Donald T. Bollinger, chairman of the board and chief executive officer of Bollinger Shipyards Inc., of Louisiana] is very adept to attending to that class of vessel, and we look forward to working with him.

Are you confident that the Bush administration's current and projected funding levels are sufficient to bring the Deepwater acquisition program to a successful conclusion?

STILLMAN: Sustainment of the program is the most important risk tied to the undertaking over the long term. I am focused on it, and I have a great deal of respect for the oversight responsibility of both the authorizers and appropriators in Congress. We have an obligation to execute this program on cost and schedule, and to its performance requirements. We will be diligent in doing so, and if we succeed in those regards I think we will be funded properly. If we hit some home runs over the fence with regularity, I hope consideration will be given to accelerating Deepwater funding.

The reality is that spreading the Coast Guard's recapitalization over 20 years is not the best way to execute the program. The best way would be to complete the program in 12 years. That would allow us to minimize the long-term costs and maximize the more effective and efficient operations of our assets over a longer period of time.

Do you expect that your program will have higher visibility and stronger support in the new Department of Homeland Security? Will the Coast Guard be better served?

STILLMAN: I don't know, but I am absolutely adamant when I say that I have never met people who are more committed and supportive of Deepwater than Secretary Mineta [Secretary of Transportation Norman Y. Mineta] and Michael Jackson [Deputy Secretary of Transportation Michael P. Jackson]. I have been humbled by their love--and love is the word to use--of the Coast Guard. Deepwater never would have happened were it not for their support. Secretary Mineta was recused from the source selection because of his previous employment, but in every way, shape, and form no one in the history of the Department of Transportation has to my knowledge taken a stronger interest in the Coast Guard than he has.

I don't know if the Coast Guard will be "better served" in the new department. I think the nation will be better served with the new department. I think that it is performance that counts. The Coast Guard's greatest attributes are its core values. I appreciate the need to be politically adroit in Washington [D.C.], but it is altruism that, in large measure, keeps the men and women of the Coast Guard motivated. Our young men and women will look to the Deepwater assets and the potential that we will bring over the next 20 years to their benefit and the benefit of the nation. They will be inspired by this nation's decision to make an investment in making the Coast Guard a far better and more capable institution.

The quality-of-life enhancements that will be manifest on these new and renovated ships will be terribly important. I don't think that there is any greater motivator for a young seaman on the mess decks than to look at Sea Power magazine, Navy Times, The Washington Post, or The Wall Street Journal and read in the lead article that the government is going to commit $11 billion to recapitalize the Coast Guard's ships, aircraft, and C4ISR systems. We are going to execute this program properly and be good stewards of the public trust as Admiral Collins has directed. We are going to stand tall.

It is really no different than taking a ship to sea successfully. You need committed people who love what they're doing and have a clear goal in mind.

As you know, admiral, the Navy League has been a stalwart supporter of the Deepwater program for many years, and we wish you every success. In closing, is there anything else that you would like to say to the readers of Sea Power?

STILLMAN: We have been at it for four years together--since I first came to Washington. The interaction and support that I gained from the Navy League have been fundamental to the success we have experienced with the Deepwater enterprise--as well as to the very important and positive impact on the men and women of the Coast Guard. I cannot put into words just how important it is to see Navy League sponsorship of Coast Guard units in the field in terms of the commitment and absolute devotion to helping to provide for the morale and welfare of our people. I never take that for granted. *