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Project on Government Oversight

Protest of Latest Deepwater Contract Confirms Need for Contractor Responsibility Database

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October 10, 2008

Marinette Marine filed a bid protest to the Government Accountability Office on October 7 in response to the recent award of a contract to Bollinger Shipyards for the design and construction of the Fast Response Cutter as part of the Coast Guard's Deepwater program.  Bollinger had won the $88 million contract--with an option for $1.5 billion--despite the fact that the Department of Justice (DoJ) is still investigating Bollinger's role in the past security and technical problems for another Deepwater project, the 123 Systems Project.  The Coast Guard has also asked for a $96 million refund for this past performance, though some figures suggest that the actual amount owed is over $100 million

As the Project On Government Oversight (POGO) has reported before, problems with this project included blind spots for the ship's cameras, weather-related equipment malfunctions, the failure to use low-smoke cables to prevent fires spreading within compartments, and insufficiently secure classified communications systems. Additionally, Bollinger never figured out where it went wrong on the designs of the 123s--whereby all 8 of the first boats modified were scrapped due to poor design and construction and the Coast Guard cancelled that project as a result.

Under the Federal Acquisitions Regulations, government agencies are required to factor in contractor responsibility when awarding a contract.  POGO sources have said that the fact that the Justice Department has not yet rendered a decision prevented Bollinger's allegedly poor performance from weighing heavily into the final decision.

"While companies should never be treated as guilty before it has been proven, the Coast Guard should be more wary of awarding a potentially billion-dollar contract to a contractor with a history of such poor performance," said POGO Fellow Mandy Smithberger.  "The government lacks the necessary tools to consider contractor responsibility."

This protest helps to shed much-needed light on apparent problems with contract management in the Deepwater program, but there are still remaining problems with the program.  There must be accountability for the C4ISR design flaws on the NSC and the Coast Guard's SIPRNET--classified internet the Coast Guard shares with the FBI and DEA--violations, which could have exposed secure communications or our mechanisms for encrypting communications.

POGO has consistently advocated the creation of a publicly-available federal contractor integrity and performance database to be used for responsibility determinations.  POGO's Federal Contractor Misconduct Database, which relies on publicly available information, served as a model for the database recently passed by Congress

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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