Hearing of the Oceans, Atmosphere, Fisheries, and Coast Guard Subcommittee of the Senate Commerce, Science and Transportation Committee - Coast Guard's Fiscal Year 2009 Budget and Programs in the Pending Coast Guard Reauthorization Act Fiscal Year 2008
Statement
Hearing of the Oceans, Atmosphere, Fisheries, and Coast Guard Subcommittee of the Senate Commerce, Science and Transportation Committee - Coast Guard's Fiscal Year 2009 Budget and Programs in the Pending Coast Guard Reauthorization Act for Fiscal Year 2008
SEN. CANTWELL: The Senate committee on -- the Subcommittee on -- Oceans, Atmosphere, Fisheries, Coast Guard Subcommittee will come to order. We are here today to have a hearing on the U.S. Coast Guard budget, and to hear from Adm. Thad Allen, as well as Stephen Caldwell, director of Homeland Security and Justice Issues. So thank you, gentlemen, for being here.
We are joined by the Chairman of the full committee, and I would like to ask Senator Inouye if he would like to make an opening statement.
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SEN. CANTWELL: Thank you, Senator Inouye, and thank you for attending this important budget hearing. Again, I want to thank Adm. Allen and Mr. Caldwell for being here this morning, and for your dedicated service to our nation, and for your testimony that we are about to hear.
I want to also thank -- take time now at the beginning, to start up and thank the Coast Guard and Admiral Allen. At the end of last year, Washington State was pummeled by a severe storm and flooding. At one point, 150-mile-an-hour winds cloaked off the coast of Washington.
And with what really was swift action by the Coast Guard relocation of the command center, the Coast Guard worked in very difficult conditions to literally save hundreds of lives, and we are very grateful for the efforts that the Coast Guard did in actually becoming the command center focus in rescuing over 100 of our constituents, who were in very treacherous situation. I think it was an example of the Coast Guard at its finest.
On a national scale, the Coast Guard's responsibilities are just as challenging. For example, last year, the Coast Guard responded to over 27,000 search and rescue cases, stopped more than 6000 illegal immigrants from entering the U.S., responded to 162 significant oil and chemical spills, protected our communities by seizing a record number of illegal drugs worth billions of dollars.
And a few people are aware of the unique role that the Coast Guard plays in Iraq. During 2007, the Coast Guard supported operations in Iraq with more than 800 deployed personnel and 6 patrol boats helping secure sea lanes, train Iraqi forces and protect Iraqis' offshore oil infrastructure. And again, we are grateful for those services.
When looking at all of these, we always do have the question of asking how you balance the increasing demand in involving Homeland Security missions, while ensuring the traditional missions of the Coast Guard are not set aside, and we will definitely discuss that further and have questions.
But I think this morning's hearing -- and focus on the 2009 budget request. And one issue continues to concern me as a member of the United States Senate, and I think our committee, and that is the Deepwater Program.
The Coast Guard has taken important steps towards fixing the failings of the past, and I'm glad that the Coast Guard is implementing many of the reforms that the Senate passed; Integrated Deepwater Reform Act, including phasing out its focus on a failed private lead systems integrator approach, and moving towards a full and more open, and competitive acquisition process.
While these are important steps; make no mistake, I am nowhere close to satisfied with the Coast Guard's progress on Deepwater, and believe that there is much more to still be done. We're not done fixing this program, and there are many potential problems that still lie ahead. The offshore patrol cutter is estimated to cost more than $8 billion, and the largest Deepwater Act acquisition still exists only on paper. That ship and many of the other acquisitions that lie ahead are fraught with risks, and uncertainty.
The recently completed alternative analysis, a thorough review of the Deepwater Program by an independent third party makes the compelling case that Deepwater needs to continue to change course.
We cannot repeat the problems of the past, and I assure you that every step of the way, we're going to make sure that the taxpayers' dollars are spent wisely and effectively in this program.
The Coast Guard needs to complete its mission safely and effectively, and taxpayers need to know what they're getting for their dollar. And beyond Deepwater, I have concerns about the current fulfillment of other responsibilities by the Coast Guard.
Over the past several years, I've heard a growing chorus of worry from my constituents, and I'm sure from my colleagues, about the Coast Guard and its traditional responsibilities, in particular for maritime safety to oil spill response. I believe this is on a list of growing concerns, but at the top of the list.
As you know, Admiral, recent events such as the Cosco Busan oil spill in San Francisco has reemphasized the need for an even greater vigilance in the Coast Guard's mission of environmental protection and oil spill response.
I know that we have had separate hearings on this and rulemaking, and we'll, I'm sure, have a chance in the questions to elaborate further on that. I also am concerned about preparing for the future, and I'm concerned that the Coast Guard is unprepared for the coming challenges presented by global warming and an increasing vulnerable artic. I believe our nation is asleep at the wheel on the future of the artic, and staying on path, with what can be some very devastating impacts to out national interests.
The president still refuses to put forward national policy on the fate of our polar icebreaker fleet or artic issues in general, and as a result, our icebreaker fleet is wasting away, held a prisoner under the budget pressures of today. This is both unacceptable and dangerous.
The Coast Guard has always been proud of saying it does more with less, and it has worked hard to be efficient and always strived for greater efficiency. At some point though, there is a limit where the Coast Guard can only do with what we are giving them, and we need to start seeing that an agency could be overextended, and can't go beyond doing more with less.
I look forward to discussing these issues, and I'm optimistic that the Coast Guard, if it continues to make changes and move in the right direction, we will continue to meet the challenges that our nation sets before the Coast Guard Committee.
So I look forward to your testimony, Adm. Allen, and to Mr. Caldwell, your statement as well.
So without waiting the arrival of my colleague, Senator Snowe; we'll go ahead and start with you, Adm. Allen.
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ADM. ALLEN: There is no comparison in the two relationships, sir. This is in our own department; this has a strong policy lead. These are with decisions made upfront with interagency vetting what the position should be and the way forward. There is clear communication of what the expectations are and adequate funding exists in the base right now to support operations sir.
SEN. INOUYE: I thank you very much, sir.
SEN. CANTWELL: Thank you Admiral, and I don't know if I agree with that last statement.
I think what Chairman Inouye is trying to point out is that when there is assets and responsibility of the Coast Guard and resources in another agency it really becomes frustrated by the oversight and implementation as it relates to LORAN-C.
We think that a technology upgrade is definitely needed, but outsourcing that to another agency we are worried that instead of getting the really technology upgrade that these deserve, we will end up focusing on the fact of conflict between two agencies.
ADM. ALLEN: Yes, ma'am and I can see given the past track record with the NSF funding, where you would think that -- and I can tell you having lived with the National Science Foundation funding scheme for the last three years if I thought we are going to duplicate that in any way shape or form, I will fall it on my sword, not to have that LORAN money move.
SEN. CANTWELL: Thank you.
Let me turn, Admiral, and if can, to the Deepwater Program and focus some of my questions on that. We are seeing the National Security Cutter, the first one completed in the trials, which are basically machinery trials and builder trials.
And in that trial process there were 987 certification standards for the ship that were supposed to be met and the contractor was to submit documentation on 892 of those for review.
I am saying they have submitted I guess it is the 987 and there is - and those 987, 892 which have been submitted and almost the challenge is that the Coast Guard has identified issues with the C4ISR, the cross-platform communication integration, the hull, mechanical and electrical risks, and there are eight of which have to be moderated to high risk if some problems continue to happen.
So the Coast Guard and Navy personnel have had this open process but my question is with this new security cutter that is being proposed in the budget and these outstanding issues if we don't meet all those requirements how will the contractor be held accountable?
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SEN. CANTWELL: Mr. Caldwell, how can we judge, particularly when it is a first in class vessel, whether these are worrisome problems, or they are normal and how you see that they are red flags here in the machinery and builder trials and do you have deeper concerns?
MR. CALDWELL: We are looking specifically at some of the specific issues on the NSC but problems with first in class vessels or of any major asset like this are relatively common.
SEN. CANTWELL: So what is -- either of you -- who bears the cost? Would the Coast Guard get any money back if the ship doesn't meet performance?
I mean we are already over-budget obviously in the National Security Cutter area so I am asking given the huge problems that we have seen with this ship now what are our protections in moving forward?
ADM. ALLEN: Well, the contractual vehicle for this vessel is a cost plus contract, so whatever the -- whatever it takes to get the ship out is what we will pay.
That is what we are trying to manage in looking at these trial cards the delivery date and at some point we will have to make a decision on when the ship actually moves from the shipyard, because just having the ship in the shipyard itself incurs about 12 to $14 million a month cost.
And our goal is to balance the cost of having the ship remain in the shipyard, complete the work that needs to be done before it is put in operation and what constitutes an acceptance of the vessel.
SEN. CANTWELL: Would the Coast Guard get any money back if the ship doesn't meet its performance requirements?
ADM. ALLEN: It would depend on the particular performance requirement that wasn't met and what was in the contract. And there are literally thousands of line items that you are dealing with in the delivery of the ship.
SEN. CANTWELL: And so has that happened before where the Coast Guard has gotten money back from a contractor for not meeting performance requirements?
ADM. ALLEN: It usually happens under a fixed-price contract, which we will shift to later on in this production line. Right now, we are operating under a cost plus contract with this vessel.
SEN. CANTWELL: Mr. Caldwell, are you concerned about that, given the past performance that as we move towards I guess the at-sea trials --
MR. CALDWELL: Acceptance trials.
SEN. CANTWELL: Acceptance trials. Now, we have a -- (inaudible) -- process in place given already the problems we have had with the system integration Deepwater Program.
MR. CALDWELL: I think based on some of the problems we have had, I mean we would rather have a go-slow approach with the punch list -- so called punch list and get those problems worked when we do have our first in class vessel like this.
As the admiral said it is cost plus, so the government will be absorbing some of those but then there could be a shift to a fixed- price contract which then will reduce the price of the government and also hopefully all the technical and operational problems are resolved at that point.
SEN. CANTWELL: Well, unfortunately we have a vote in progress. So what I am going to do instead of going to more questions, is recess the hearing to allow Senator Inouye, and I go and vote and hopefully we will be back very shortly to reconvene the hearing.
(Recess)
SEN. CANTWELL: And Transportation Subcommittee on Oceans and Atmosphere, Fisheries and Coast Guard.
We are having a hearing this morning on the Coast Guard budget and we appreciate Admiral Allan being here as well as Steve Caldwell, director of homeland security justice issues under GAO.
I would like to go back to the National Security Cutter question and sorry for the interruption of a vote, but that obviously happens around here.
And obviously, some of the problems that we have seen with the National Security Cutter have been around this weight margin issue, the ship's design typically include a margin for additional weight to accommodate service enhancements during the ship's life.
And according to the Coast Guard officials, most of the available weight margin has already been consumed during construction. Not including the fatigue life structure enhancements.
The officials further note that the subsequent change of the ship will cost more than they would have otherwise due to additional redesign and engineering and that maybe necessary to offset the additional weight.
So I have a concern, are these problems -- are there any problems with the national security weight margin and that having said that, I am concerned that the ship may not have any room to grow as it is -- right now currently designed.
So Admiral Allen, could you address that?
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SEN. CANTWELL: Mr. Caldwell aren't these weight margin issues simply deferring the cost from an originally flawed NSC cutter design to a later year?
MR. CALDWELL: I have to defer to some of the questions on the NSC, specifically DHS, IG is taking a very detailed look at the NSC. The GAO work has been kind of at the higher level in terms of how the contract is being managed.
One of the things I would like to add that I think is going on that has been based on my work is a larger input from external parties, whether that is ABS or naval experts in ship design. But I really don't have anything to add on the weight issue -- the design of NSC.
SEN. CANTWELL: Admiral Allan, are we moving forward with the flawed NSC design that we are going to see costs from later and it points to my question I asked earlier about getting any kind of refunds back from the ship designer if in fact we run into these problems?
ADM. ALLEN: I don't believe we are moving forward with the flawed design. The technical baseline established in the award of the third National Security Cutter addresses all the fatigue life issues.
Those were directed changes by the government and were paid for and that were included in the estimate for completing the construction of the Class-C ships ma'am.
SEN. CANTWELL: But we are still moving forward and we haven't done the final tests yet?
ADM. ALLEN: We are moving forward based on a --the technical requirements that were developed by the Coast Guard's technical authority.
These were the people that early on asserted that there might be structural issues with the cutter itself. In other words we failed to take that into account early on we have now that has been validated by an external third party the -- to the U.S. Navy.
We have come up with a technical design that will ensure the fatigue life on the ship that was incorporated, and the technical baseline for the third National Security Cutter when the contract was awarded and it serves as a baseline to go back and retrofit the first and second NSC ma'am.
SEN. CANTWELL: So does the contract have anything in it that considers this in the negotiations about problems that could still occur with the cutter and recouping clause is there anything in the contract that is specific on that point?
ADM. ALLEN: Not to my knowledge, right now, the consolidated contracting action resolved all outstanding issues as of the date of the settlement. If new information were to arrive then it might be the basis for an action, we certainly will consider that.
SEN. CANTWELL: Let me ask you about the offshore patrol cutter. Now, this still exists on paper, correct?
ADM. ALLEN: We are looking at operational requirements. Right now, we took a pause to take a look at where we again with that cutter and there is money to start requirements development leading to a preliminary design in the next two years.
SEN. CANTWELL: The alternative analysis thinks we should move forward. In fact they think you should move forward and consider using some of these offshore patrol cutters in replacement of doing all the National Security Cutters.
ADM. ALLEN: Yeah, one of the variations on the analysis indicated that you might -- that before -- after the sixth NSC was awarded to take a look at that point whether or not OPCs could substitute for it.
I think that militates towards us walking down the requirements of the OPC and moving to a design on that to see whether or not the sea keeping, the endurance and so forth of the OPC could handle the NSC missions. And we will do that moving forward ma'am.
SEN. CANTWELL: So have you decided whether that is going to be an off-the-shelf design or something that is already in production or a new ship design?
ADM. ALLEN: It will be openly competed. We have to finish what is called an operational requirements document and have that approved and that will be the basis for moving forward with where we will proceed.
But I will tell you this, it will be a Coast Guard controlled openly competed design.
SEN. CANTWELL: I am glad you brought that up. Let me ask you about open competition for future acquisitions. The offshore patrol cutter, the fast response cutter, a, the unmanned aerial vehicle, the C4ISR, the long-range interceptor boats, short-range prosecutor boats; are they all going to be open competition?
ADM. ALLEN: Yes.
SEN. CANTWELL: All those are going to be open competition.
ADM. ALLEN: Yes.
SEN. CANTWELL: Okay. Well, Admiral I still have questions about the Deepwater Program, but I have some other questions I would like to ask as well from the budget.
One of the issues that we have had a previous hearing on is oil spill response and one of the issues that we asked you about on our December 18th oil hearing was in regard to Vessel Response Plans.
And that hearing, I think that you responded by saying in order to make a port of call in the US all non-tank vessels must a vessel response plan.
And since then you -- since that hearing -- you sent me a letter saying that was a mistake in your testimony and that there are instances where US and foreign flag non-tank vessels have entered and operated in the US without a Coast Guard reviewed vessel response plan.
I think those are called NTVRPs. So I want to make sure where we are to date because I want to understand since the Cosco Busan was a pretty big incident, how many non-tank vessels have committed Vessel Response Plans to the Coast Guard? And how many non-tank vessels required by law have not done so?
ADM. ALLEN: Yes, ma'am. The number changes depending on what plans you have submitted for review but right now it is approximately 14,000 vessels are covered by non-tank Vessel Response Plans, that have been reviewed by the Coast Guard.
One of the issues that came up and if I could discuss -- elaborate on the testimony and the correction that I sent you -- all vessels under IMO MARPOL annex 1 are required to have spilled oil response plan.
So any vessel coming into the country that is signatory to IMO would have that. Our response plans are a higher level of care, in line with our national contingency plan and area contingency plans.
When the legislation was passed, we put our voluntary guidelines for non-tank vessel response that would pretty much mirror where we are going with the rule making process.
What has happened is we need to figure out how many vessels above the 14,000 that are calling under the international plans rather than the higher level plans that we require.
And I developed a way forward related to that and I can articulate further that if you would like.
SEN. CANTWELL: Yes, please.
ADM. ALLEN: We had a very detailed discussion in December and I walked away from that quite frankly not satisfied with what I said and where we were at in this whole process and a lot of it had to do with the time that it takes to make a rule to implement the legislation from 2004 and 2006.
I, since, have got together with my staff and we have provided guidance to the Coast Guard, it is my intention to go ahead and to implement the basic tenets of that legislation without a rule under our authority in title 33.
What this would mean is in advance of a regulation we will require ships coming into this country to basically conform to the legislation as it was passed, even in the advance of a rule so we can make sure there is compliance with the statutes, failure to do that we will be able to put a control or deny entry to the vessel if they do not have a non-tank vessel response plan.
In other words we intend to enforce this without a regulation which is a striking difference from past practice with the Coast Guard but I feel given the events that this is the proper way to proceed.
SEN. CANTWELL: Well, but you are asking, in the budget request, for additional 2.6 million to fund and support rule making backlogs.
And one of the key issues on the rule making backlog is the oil spill issue and related rule making to prevent that, so?
ADM. ALLEN: Yes, ma'am we will proceed with the rule making but I intend to enforce the statute in advance of the rule consistent with the legislation that was passed, ma'am.
This is a break in past action. Usually, we would not enforce a statute that was intended to be implemented through a rule.
But given the delay in getting the regulations out and wanted to give effect to the statute, we are prepared to give direct orders to our field commanders to start enforcing the statute as written.
We have voluntary guidelines out there that give enough information for these folks to be able to comply and we will expect them to do that.
SEN. CANTWELL: In asking for this additional revenue I am asking about the rule making particularly for salvage and firefighting and for the vessel response plan, will both of those be completed, given this budget request, by FY09?
ADM. ALLEN: We expect the firefighting, salvage, and the additional oil store requirements rules to be completed within the next six to 12 months, and nearly following that was will queue up the non-tank vessel response plan ma'am.
I would look at notice of proposed rule-making for the non-tank vessel response plan to be out in 2009, but given the review requirements, it could be 2010 but the firefighting, salvage and additional removal capability will be out within the next year ma'am.
SEN. CANTWELL: Will the vessel -- you are saying the Coast Guard would have the plan out and it would be in negotiation or getting public input in 2009 and then --
ADM. ALLEN: Yes, we just got a notice of proposed rule making so the public could comment on it, ma'am, yes.
SEN. CANTWELL: The final rule would then be complete by what time?
ADM. ALLEN: 2010. In the meantime we will enforce compliance with the statute from my previous comments, we will make mandatory non-vessel tank response plan that complies with the statutes. We will do it in advance of the rule making, the rule making will just codify it.
SEN. CANTWELL: You can understand our concern right, admiral, I mean these are things that --
ADM. ALLEN: Yes, absolutely.
SEN. CANTWELL: -- that were promulgated in the '90s, rules that should have been in policy and implementation and carried out. We have continued to see obviously challenges.
I am not saying that that overall number is but obviously size of ships and spills and continuation of this challenge in our last hearing, and so now we are seeing a budget request that is saying give us more money, and I am glad to hear but you are going to take enforcement action before receiving those dollar.
But we are going to hold you accountable to those commitments on these two rules because we think they are critically important.
In fact I would prefer to see them done by 2009, but we can -- and at this point I take you at your 2010 commitment and we can have a conversation about that in more detail.
ADM. ALLEN: Ma'am, I am sure if I just -- the non-tank vessel response rule is 2010, the firefighting salvage and removal will be before that.
SEN. CANTWELL: I understand.
ADM. ALLEN: Okay.
SEN. CANTWELL: Understand. Senator Inouye, did you have follow- up questions.
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SEN. CANTWELL: Thank you, Senator Inouye.
Admiral, my staff has received information in December that only 2,351 of the 13,244 non-vessel tank response plans have been approved. So I think you gave me a number of roughly 14,000.
ADM. ALLEN: Yes ma'am, there are -- I can explain this to you, and I'll make sure that it's right -- for the record.
But there are companies that have eight or ten vessels of the same design that have a base plan that applies to all the vessels. So you could have a fewer number of plans that apply to a larger number of vessels.
SEN. CANTWELL: And so you're saying that these are subsets of the same vessels for different --
ADM. ALLEN: If you have vessels that are the same design -- let's say you have five vessels of the same design. A plan written for one plan is -- for one vessel is applicable for all five vessels because they're the same configuration and layout.
The number of plans reviewed will be less than the total number of vessels that are covered.
SEN. CANTWELL: Well, and -- I don't want to take up anymore time on that issue. But let's make sure that we're in sync about how many outstanding --
ADM. ALLEN: Yes.
SEN. CANTWELL: -- there are in the criteria by which we're measuring them so that the committee and the Coast Guard can be on the same framework at least for measurement. And then we can decide whether things are at --
ADM. ALLEN: Yes, ma'am.
SEN. CANTWELL: -- full capacity for approval or if we're still outstanding.
I wanted to ask -- you've obviously been given new responsibilities and some of that is reflected in the budget. On February 6, the Minerals Management Service auctioned off part of the Arctic Ocean the size of Pennsylvania for oil and gas drilling.
And despite a 33 to 51 percent chance of major oil spills in that region, where the oil spill cleanup is virtually impossible most of the time, I'm curious as to how the Coast Guard plans to operate with its current assets in the Arctic environment.
ADM. ALLEN: Madam Chair, that's an excellent question.
Starting last year, when you know we had a recession of summer ice farther than it ever had been before, we developed a plan for this next summer to deploy Coast Guard resources up to the north slope, including moving a buoy tender through the Bering Straits to -- looking at navigational and communications issues.
We're looking at moving small boats, and helicopters, and shore forces up there. And we want to test their ability to operate in a higher latitude harsh environment. We traditionally have not operated up there because there was not open ocean.
Giving the offshore oil and gas exploration is going to be going on there, increased cruise ships, increased vessel traffic in general, and the potential to have even fish stocks move north through the Bering Sea, we're moving as fast as we can to identify how well our equipment operates up there, any capability shortfalls.
And I would hope by this time next year to be able to tell you that based on the requirements for us to operate in open water up there, these are the gaps that we see. But we need to get our equipment up there and test them because we have not traditionally operated up there.
SEN. CANTWELL: What kind of grade would you give the Coast Guard's assets meeting that challenge and responsibility? Would you say currently you're at a --
ADM. ALLEN: Madam Chair, it's almost a situation of you don't know what you don't know.
If there -- our ability to stage equipment up there for an oil spill response, our ability to operate against a threat such as a cruise ship that happened off of South America recently where it hit an iceberg and sunk; it's a matter of moving capability up there and being able to operate up there.
We flew a C-130 to the North Pole last October and found out there were significant challenges with navigation, communications, and plus that we don't have heaters on our fuel tanks. And there is a problem. When it gets real cold, the fuel systems don't operate the way they need to.
I would give us an unknown. If you had to force me to some kind of a grade scale, I would say -- and results are not demonstrated. We need to find out exactly what the gap is.
SEN. CANTWELL: Was the Coast Guard consulted before this leasing?
ADM. ALLEN: No, ma'am.
SEN. CANTWELL: And were they consulted on what it would take to provide adequate resource and response plans?
ADM. ALLEN: I'm not aware of it, but I will check. But I'm not -- I don't believe so, ma'am.
SEN. CANTWELL: So where does this budget request for $200,000 for an Arctic assessment come from?
ADM. ALLEN: To address exactly what we've been discussing, ma'am. And that's to fund the requirements analysis up there based on our experience this coming summer and to move forward with a way ahead on how we need to operate in the Arctic.
I will tell you though that there is some significant policy issues to be decided up there and what constitutes a needed presence for the sovereignty of the United States.
There are national security issues associated with operating up there. That is all being discussed within the administration right now in anticipation of a -- of potentially a policy decision on where we need to go with the Arctic.
SEN. CANTWELL: Well, I think that it's a very important question if we're going to have a race to the Arctic. And part of the race to the Arctic is allowing the U.S. more drilling and focus of resource acquisition.
Then a very important component of the United States making that decision would be a response plan, given the fragile sensitivity of that area and the difficulty in reaching it. Wouldn't you agree?
ADM. ALLEN: I would agree.
SEN. CANTWELL: Perhaps we should have a larger hearing on this subject to discuss exactly the best way for us to make sure that as the United States moves forward, we actually have that kind of plan since you weren't consulted on the first round.
ADM. ALLEN: I would not dispute the need for that hearing, ma'am.
SEN. CANTWELL: Thank you. I'd like to go back to, if I could -- Senator Inouye, do you have more questions?
SEN. INOUYE: (Off mike.)
SEN. CANTWELL: Thank you. I'd like to go back to the Deepwater Program, if I could.
And the -- I want to understand the -- where the Coast Guard thinks it should go in regards to the unmanned aerial vehicle program. And how are you viewing what we now have back from the alternative analysis on where that technology should go forward, giving that it was a component of the Deepwater Program?
ADM. ALLEN: Well, first of all, based on requirements, there was an assumption that our cutters, both the OPC and the NSC, were deployed with vertically-launch UAV capability.
That is part of the mission package on which our requirements are based and the efficiency of the model is based. And we have to come to grips with aviation surveillance related to that.
We took a -- what I thought was a justified pause in the development of the vertically-launch UAV program. It was in the last year. And based on the analysis -- the alternatives analysis, we need to look at the new ways going forward.
One of the things we are doing right now is looking at the development of the Fire Scout UAV, which is being contemplated for the littoral combat ship. We have talked with our Navy counterparts in Northrop Grumman.
One of the concerns we had about that vertically-launch UAV is it didn't have a marine radar that would be suitable for us. They are now taking that on as a program of record.
We are not going to leave anything off the table in regard to aviation surveillance associated with Deepwater. But I want to make sure as we move forward that we are not on the bleeding edge of R&D and that we have demonstrable first article performance before we move into this. And I think we also need to take a look at the implications for our high-altitude UAVs and how they might be employed.
We have recently agreed with the Customs and Border Protection to stand up a joint program office within Homeland Security to take a look at programs like the Predator. And this month, we will do a prototype deployment of a Predator in the maritime environment.
We have also been engaged with discussions not only with the Coast Guard and CBP but the United States Air Force as well, potentially, about how we might become involved in some of their high- altitude UAV operations.
But we're in a period of what I would call a pause, and a consolidation, and moving forward carefully informed not only by the -- the alternatives analysis that was done but making sure that we've got technology that works when we bring it forward. And that remains a task before us, ma'am.
SEN. CANTWELL: The alternative analysis seem to indicate that the current baseline plan for Deepwater is the wrong path. So are you saying you're going to revert to an open competition and come back on what should be the specs for that UAV program?
ADM. ALLEN: I think we need to take a look at the surveillance requirements associated with the NSC and the OPC operating offshore and we need to leave everything on the table, whether it's an open competition for a VUAV or greater reliance on a high-altitude UAV like a Predator.
I think all of that needs to be considered. And I think that's consistent with the analysis.
SEN. CANTWELL: Thank you.
I noticed, Admiral, in the alternative analysis that -- we have had this conversation about the cost of the aircraft and my concern about the fact that we're -- since the cost of that product versus other costs.
You have -- it has been a challenge, Admiral, to keep up with all of the elements of the Deepwater Program in the original flawed approach.
And so as we have tried to correct course in saying that the system integrator in charge of determining what was right or wrong and its contract was the wrong way to go and move forward, we've now had a little more time to drill down on some of the individual assets. And so we've had many conversations about that.
And one of the conversations has been about the cost of the aircraft and its cost juxtaposed to other equipment choices and the fact that the costs -- I was assuming the alternative analysis would shed some light on the requirement that the Coast Guard is asking for as it relates to a rear door requirement.
So my office has had many conversations with your team about this. But I see in the AoA or the alternative analysis did nothing to address that issue and whether the Coast Guard really needs that as a particular aspect of the aircraft.
But instead, the performance requirements were already outlined in the alternative analysis so they had nothing to -- but to comply with that as the aircraft of choice.
So I'm asking you what was your understanding and your belief as it related to the CASA. And how can we give taxpayers some certainty that, in fact, the Coast Guard -- this really is the asset that the Coast Guard needs?
ADM. ALLEN: Well, I think what the alternatives analysis indicated and is our understanding as well based on the requirements for a maritime patrol aircraft, as part of a system, which at the higher level, you have C-130, a much longer range aircraft, and based on the Coast Guard requirements, that there was nothing else out there in the market that would satisfy those requirements.
And that was the basis for the analysis to indicate that the CASA was currently meeting the requirements of the Coast Guard.
SEN. CANTWELL: And that's my point.
And I think the committee, given all the problems with Deepwater, with all the problems, we still intend to think that we have not seen yet because we haven't seen all the assets and the resources.
We are now trying to -- now that we have at least got Congress moving on a trajectory of saying this kind of system integrator approach where the contractor self-certifies is the wrong approach, we've now said we want to make sure that all the assets that the Coast Guard is seeking have had the proper amount of oversight and attention so that we don't run into the same problems with these assets as we have with the national security cutters.
So the CASA aircraft is an example where we -- given the cost of that product versus what else is out there on the marketplace, we want to understand what the Coast Guard's needs and assessments are that led it to the choice of the CASA aircraft. And we want some validation that the taxpayers ought to be paying that additional expense.
Now, the alternative analysis didn't get us there. So I don't know if you have other suggestions about how we might do that.
But just like the (C4-IBR ?) and other things, all of these assets are going to continue to get the attention of this committee because we are seeing either through GAO, or through the IG, or through the alternative analysis various questions raised. And we can't afford to make anymore mistakes.
So I think all of the assets to serve a complete, you know, scrubbing to make sure that we are acquiring the right assets.
ADM. ALLEN: Well, regarding the costs and we'd be glad to provide more information for the record because the picture I've had is kind of changing almost daily for us.
We are just finishing up the developmental tests and evaluation and finished certifying the C4ISR package on the CASA 235. We anticipate we will accept that aircraft, final acceptance of the lead aircraft and the mission palette system some time in the next 2 weeks. And that is held up against the standards regarding information assurance and everything else.
We have successfully transmitted in both an un-secure and secure mode from that aircraft. And we'd be happy to forward the developmental tests and the evaluation reports to you.
The next step will be to do operational tests and evaluation with the aircraft and in environments, see how it does against the mission set not just the specifications that it was built to.
And that's what I referred to earlier when we had one of the airplanes flying south of Mobile, was involved in a very successful search and rescue case just a week or so ago.
But we'd be happy to provide you the results of the developmental tests and evaluation, which will be ended within the next day or two, ma'am.
SEN. CANTWELL: I'm more interested -- and Mr. Caldwell, do you have any ideas on the mission capabilities of this particular product and how we could get some third party assessment of the -- given again, the complete challenges that we've had with the Deepwater Program?
MR. CALDWELL: Again, the IG is doing more of the asset-specific work. So I don't have any other light to shed on the CASA aircraft.
SEN. CANTWELL: So we should look to the inspector general for that.
MR. CALDWELL: That would be, yeah, appropriate.
SEN. CANTWELL: Okay, thank you.
As you can see, I'm -- we're going to continue to focus on the Deepwater Program. So I don't think this will be the last of the hearings although we certainly appreciate your attention this morning from a budget perspective, given the national security cutter funding that you're seeking in this budget to move forward.
I'd like to turn to the polar icebreaker issue that we talked about earlier when Senator Inouye mentioned the Loran system. And it's my understanding that the National Science Foundation had received permission from the administration to stop funding the 3 million to require and maintain the Polar Star in caretaker status.
This money, however, is not included in the Coast Guard's budget either for 2009. So who is going to pay for this ship?
ADM. ALLEN: We were advised at the end of the budget's mission process that the money to maintain the Polar Star was not contained in the National Science Foundation budget. I do not have any visibility into how that process works or how that decision was arrived at.
But quite frankly, unless it is resolved, there will not be money to keep the Polar Star in its commission-special status, which means money to keep a crew on there to keep the machinery turned over so it's not up and operating, but it's capable of being brought into operation in a year or so period of time should the vessel be put back into service or be needed.
SEN. CANTWELL: What does that mean economically do you think? What does that mean to U.S. commerce when we don't --
ADM. ALLEN: If we move into --
SEN. CANTWELL: -- fund polar icebreakers?
ADM. ALLEN: If we move into Fiscal Year '09 and we don't have the money to keep the Polar Star in a commission-special status, it will further degrade our capability to put the boat back into service and increase the length of time it would take to use that vessel should it be needed, ma'am.
SEN. CANTWELL: And do you have a number and -- do you know a number of what that cost is at. I know I've seen that number before or maybe my staff has it.
But we are talking about great commercial significance of not being able to move cargo and traffic and get people and product to where they need to be. And obviously, the polar icebreaker is a key component of that transportation passage system. Isn't that correct?
ADM. ALLEN: Yes, it is, ma'am. And all I can say is that the money is not contained within our budget. And if it's not there in '09, we're going to accrue significant additional risk.
SEN. CANTWELL: But -- so isn't this just another year of a continuing saga between NSF and the Coast Guard as it relates to who is financing and paying for the polar icebreakers?
ADM. ALLEN: It is a -- an exacerbation of a bad problem that already existed, yes, ma'am.
SEN. CANTWELL: Okay.
All right, Senator Inouye, do you have any other questions?
If not, I thank you, gentlemen, for your testimony and your availability in answering these questions. We will keep the record open for an additional, I think, 10 days or so. So if -- colleagues who weren't able to attend can get their questions submitted. And we appreciate your answering them. I know that I will have a variety of additional questions for you as well.
Mr. Caldwell, thank you.
Admiral Allen, thank you very much.
This committee meeting is adjourned.
END.
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