Deepwater Contract Must Be Put Into Proper Hands

Reuters and other outlets report that Deepwater contractors actually had the nerve this week to send a letter challenging the Coast Guard’s legal authority to pursue a $100 million refund for the eight patrol boats which have been deemed unsalvageable. Lockheed Martin and Northrop’s primary defense is “I told you so,

Unfortunately, it seems Lockheed Martin and Northrop have the government over a barrel. A move last week in the House to reign in their status as the lead systems integrators on the $24 billion Deepwater contract faltered. Under the lead systems integrator model, contractors manage and oversee themselves, a model which was embraced in the 1990s, and has now led to a string of disastrous contracting failures including Deepwater. In a House Committee on Transportation and Infrastructure markup on HR 2722, the Deepwater Integrated Reform Act, Representative Steve LaTourette prevailed on a motion to allow the contractors to keep the contract for as much as another four years. Of course, it is probably just a coincidence that Representative LaTourette’s wife, Jennifer Laptook-Latourette is Vice President of a lobbying firm which represents Lockheed Martin.

Representative LaTourette adopted the industry line that the Coast Guard will not be able to assemble the team it needs to manage the Deepwater contract in a timely way. While the Coast Guard could assume the control of the contract sooner if they are capable, the onus will be on them to wrest the troubled Deepwater contract out of Lockheed and Northrop’s clutches.