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• 

  Mr. Oberstar

  At 00:00:35
  7 minutes

  The Committee on Investigations and Oversight
  will come to order.
  We meet today in full Committee to inquire into compliance
  of the Coast Guard with the Deepwater Contract.
  When I was elected to the chairmanship of the Committee, I
  said at the very outset, that we would have a strong emphasis
  of oversight and investigations into the programs within the
  jurisdiction of our Committee.
  It has long been a role of this Committee going back to
  1959 when the Special Investigating Committee and the Federal-
  Aid Highway Program was established by then Speaker Rayburn and
  my predecessor, John Botnick, whose portrait is over there in
  the corner was designated chair of that Committee. It was the
  very first deep investigative work of the House in the post-
  World War II era that resulted in conversion of all State and
  Federal highway programs from no internal audit and review
  procedures to every State having internal audit, review and
  accountability for their Federal highway funds.
  It also resulted in 36 people going to Federal and State
  prison for their illegal activities in misuse and abuse of
  public funds in the Federal-Aid Highway Program.
  The Committee continued its work into other areas of
  jurisdiction of the full Committee doing enormous good service
  to the public. We continue that work in the spirit of inquiring
  into the whys, the best and most effective use of public funds
  and ensuring that there is not failure on the part of Federal
  agencies carrying out their public trust.
  Of all the issues that have come before our Committee--we
  have had a lot since the beginning of this session of
  Congress--the failures of the Coast Guard Deepwater Acquisition
  Program are the most disturbing. The Investigations and
  Oversight bipartisan staff has conducted an in-depth
  investigation over the last three months of the conversion of
  110 foot patrol boats to 123 foot boats, which is a 12 percent
  extension, and to modernize their electronics in the new era of
  security and the additional mission of the Coast Guard in
  homeland security.
  The investigation uncovered factors far more disturbing
  than we anticipated at the outset, more than other committees
  that have looked into this have uncovered. Major problems in
  the program, some of the major problems, have already been
  disclosed in hearings of other committees and by news reports.
  But four years after the Coast Guard began the Deepwater
  program to replace or upgrade all of its ships, fixed wing
  aircraft and helicopters, we know that 8 of the 110 foot patrol
  boats have been found unseaworthy and rendered essentially
  useless by a poorly designed hull extension.
  It has already on public record that plans to produce a new
  class of 147 foot ships have been shelved after a new hull
  design was found to be flawed.
  It has already been published that serious questions have
  been raised about the structural integrity of the new National
  Security Cutter and whether it can be expected to meet its
  projected lifetime in service.
  There are problems that have increased the cost of the
  Fleet Renewal Program from $17 billion to more than $24
  billion.
  We know that the Coast Guard's ability to fulfill its
  mission has been compromised, that critically needed assets are
  not going to be available or certainly not available in the
  timeframe within which the Coast Guard needs them. The Coast
  Guard, consequently, has been forced to cut back on patrols. At
  times, it has had to ignore tips from other Federal agencies
  about drug smugglers.
  We are concerned these difficulties will only grow and
  become more acute in the years ahead as older vessels fail and
  replacements are not available.
  What we have learned in our investigation, though, is even
  more disturbing, serious management failings which are
  structural internal to the Coast Guard. We are not going to
  pass final judgment on those charges or allegations until we
  have had the response of the Coast Guard and its contractors.
  I should point out that the testimony we will hear today
  raises serious problems that were known early in the program by
  the Coast Guard and that warnings delivered by very courageous
  persons involved in the program from the earliest days were
  delivered, and many of the warnings consciously rejected by
  various levels of Coast Guard management.
  I commend those who are witnesses here before us today, who
  have helped us in understanding what happened and have put
  their jobs, their careers on the line in order to do the right
  thing and assure that the truth is out, in particular, Michael
  DeKort, Robert Braden and Scott Sampson. Mr. Atkinson is not a
  Coast Guard employee, but he is a similarly public spirited
  person who has proffered an extensive analysis of the internal
  problems.
  Now the Coast Guard has taken a lessons learned approach to
  the tragedies, the failures that have occurred in the
  conversion program, and we hope that today's hearing will make
  a major contribution to improving, changing not only the way
  the Coast Guard does this but the culture, the very culture
  within the culture. Time will tell, but one thing is certain.
  We are going to stay on top of it.
  The Chair recognizes the gentleman from
  Florida, the Ranking Member, Mr. Mica.
  

• 

  Mr. Mica

  At 00:07:50
  4 minutes

  Thank you, Mr. Chairman. I have some comments.
  I am a little bit concerned. This is the first of our
  investigative hearings, and by going forward today under some
  terms that I thought were a little bit different than what I
  had anticipated, I do have some issues that I do want to raise.
  The Committee is continuing today in what I was led to
  believe was the oversight of the Coast Guard's very important
  Deepwater program. Unfortunately, after reviewing the materials
  for this hearing, most of what we are going to hear or go
  through in a series of panels appears to be matters that we
  have already reviewed.
  I guess some of it may be redundant because I have not only
  participated in at least two hearings on this Committee but
  also the Government Reform Committee on which I serve which has
  also looked into this. This is, I believe, the sixth hearing
  held this year, and number seven is next week in the Senate.
  I do want to say that I have been impressed with the
  conduct of the Chairman of the Subcommittee, Mr. Cummings, and
  the Ranking Member, Mr. LaTourette. They stated that they would
  continue to pursue this matter and have subsequent testimony
  from the DHS IG and the General Accountability Office just last
  month. In the January hearing, Mr. Cummings, Chair of the
  Subcommittee, and Commandant Allen agreed that there would be a
  hearing 120 days later in which the Coast Guard would report
  also on changes in the program and progress that has been made.
  I think it is very important that we review that.
  I come from the State of Florida. We have these eight
  cutters that now I am told they have been brought up here to
  the Northeast from Florida. They are not usable.
  These cutters are critical to safety, to national security,
  to questions and problems we face on illegal immigration. Last
  week, we had, I believe, over 100 Haitians just come in, in one
  batch, and warm weather hasn't started. The Coast Guard has a
  mission dealing with illegal narcotics which is critical, and I
  don't have those assets there.
  There are 40 of these cutters. These are eight. A large
  percentage of these cutters are out of service. I know there
  are some plans in place, and it is critical that we deal with
  these issues I mentioned, not to mention the possibility of
  some change in the regime with Castro and critical needs
  without the vessels in place.
  No one is more deeply troubled than I am about the problems
  associated with the 110 foot cutters to 123 foot cutters which
  was the effort underway. However, I am afraid again that this
  hearing merely rehashes some of the issues the IG has gone
  through and reviewed and testified about at our Coast Guard
  Budget Hearing last week.
  I do have the questions that were raised, I would like to
  submit for the record, and then the responses which are some of
  the same questions again today, if I could have that included.
  

• 

  Mr. Oberstar

  At 00:12:08
  

  Without objection, they will be included.
  

• 

  Mr. Mica

  At 00:12:08
  1 minute

  In addition, I must point out again this is very
  important that this is the first of our investigative hearings,
  and both Mr. Oberstar and I are committed to strong
  investigations and oversight. We think that is an important
  part of our responsibility.
  However, the minority was not included in the selection of
  the interviewing of these witnesses. Given the traditional
  bipartisan nature of the work on Coast Guard and maritime
  transportation, this causes me great concern. In Government
  Reform, for example, we don't interview a witness or depose a
  witness without notification and the opportunity to have
  bipartisan participation. That does concern me, and I hope that
  is not the way we proceed in the future.
  I also understand that one of today's witnesses, as staff
  has told me, is being paid by the Committee, the taxpayers, as
  a consultant, and I think that is Mr. Atkinson. Is that
  correct?
  

• 

  Mr. Oberstar

  At 00:13:18
  

  Only his travel and expenses are covered.
  

• 

  Mr. Mica

  At 00:13:18
  2 seconds

  So he is being paid.
  

• 

  Mr. Oberstar

  At 00:13:20
  

  As in the tradition of the Committee.
  

• 

  Mr. Mica

  At 00:13:20
  5 minutes

  Again, I have concerns about the selection of
  witnesses and particularly those, well, we are going to hear
  from a whistleblower, and I think he has some important
  information to share with the Committee. I am not certain,
  because again our staff was not permitted to interview him at
  the same time, that he is actually in position to be able to
  comment on some of the issues relating to certification, et
  cetera, that he may be testifying on. So that raises a
  question.
  Secondly, with Mr. Atkinson, I am just totally at a loss
  with why he was permitted to be a witness. Now I did not see
  this until yesterday, and staff provided me with this
  yesterday, but anyone can go on to www.tscm.com. That is his
  web site.
  In 15 years of having witnesses before numerous
  subcommittees, some of which I chaired or participating on
  different committees, I have never had a witness who set forth
  a mission statement or qualifications. Let me read from his,
  and you all pull this up and see it.
  These are quotes from his web site: ``I will not have
  anything to do with someone I know to be a criminal, and if I
  have seen the slightest reason to believe that they have a
  criminal history, I will back away from them the second I find
  out about it. In fact, not only will I start backing away from
  them, but they will hear me reloading the shot gun as I do
  it.''
  Second paragraph: ``If someone choose to be an
  eavesdropper, I will hunt them to the ends of the Earth. If
  they are a felon or a crook using electronics in their work, I
  will relentlessly stalk them until they are rendered
  impotent.''
  Third paragraph: ``When the eavesdropper lies on his death
  bed and the angel of death comes to take him away, I want death
  to be holding a scanlock instead of a scythe. I want them
  constantly looking over their shoulder and expecting TSCM
  specialists to pounce on them and start beating them with an
  NLJD. Let them fear black boxes and weird looking antennas. Let
  them eat Xanax by the handful and spend their days in pain.''
  Fourth paragraph: ``Let them be afraid. Let them be very
  afraid, for I am hunting them. If I am not hunting them, then
  someone who I trained will be. Let them be afraid. I perform
  bug sweeps like a contact sport. I don't play fair.''
  I have never heard a witness give those kind of
  qualifications. Again, the rest of it is troubling to me. The
  staff pointed this out. So I do have concerns about the
  witnesses and particularly that witness.
  The Deepwater program, as I said, is critically important,
  and we need to have the best witnesses and access to the best
  information and resources to make certain that we have enhanced
  vessels and aircraft in place as quickly as possible at the
  lowest cost to the taxpayer.
  In January, Admiral Allen appeared before the Committee and
  committed himself and the Coast Guard to improving the
  oversight which is very important.
  Finally, I do have concerns about two things. One, it is
  also the custom that we investigate and then we make a
  determination, and I am prepared to do that and work with the
  Chairman and the Ranking Member before calling the Department
  of Justice to look if we find in this hearing or subsequent
  hearings criminal and civil misconduct that warrants an
  investigation, not to announce that to the media before the
  hearing.
  Then the second concern that I have is that the Coast Guard
  has now made an announcement prompted by some of these
  inquiries, and I am not sure that it is the wisest
  announcement, to go forward with in-house actually control and
  management of these contracts which I don't know they have the
  capability of doing and which testimony we have heard
  previously and in other committees indicated their inability to
  pay, their inability to retain personnel, attract personnel or
  put a program like this into place for oversight. They may not
  have that oversight capability or ability even to maintain that
  capability.
  In the meantime, I am pledged to continue to work with the
  majority. This is a very important issue, and I am sorry that
  we did get off with some unacceptable terms in both procedures
  and witnesses for this first hearing.
  I yield back.
  

• 

  Mr. Oberstar

  At 00:18:55
  1 minute

  I read the same comments on the web site, and
  I took them in a different vein. But, Mr. Atkinson, after he is
  sworn in, will have an opportunity to respond to the Ranking
  Member's comments.
  As to witnesses, I directed the majority staff to share
  with the minority, the names of witnesses, and they are free to
  call and inquire and interrogate them as they wish, and they
  had all the names.
  As for redundancy, I can't control what other committees
  do, I will say to my good friend. If they want to have
  hearings, that is their business, but we are conducting our
  business. We did have a preliminary hearing earlier this year
  on Deepwater. It set the stage for what I felt was necessary
  and what you and I both discussed was a necessary, more
  intensive discussion and inquiry into these matters.
  As for the Justice Department, we make no judgment. Justice
  is conducting its own inquiry into this matter. After the
  conclusion of our hearings and in consultation with the Ranking
  Member, we will decide what next steps to take.
  The gentleman from Maryland, the Chairman of the
  Subcommittee, Mr. Cummings, at the outset, I want to say
  conducted a very thorough inquiry and has given an enormous
  amount of his personal time and been actually on board
  defective vessels.
  I recognize the gentleman for his statement.
  

• 

  Mr. Cummings

  At 00:20:30
  7 minutes

  I want to thank the gentleman for yielding,
  and I want to thank you, Mr. Oberstar, for your dedication and
  effective oversight and for convening this hearing today to
  continue requiring accountability, and I emphasize
  accountability on the part of the Coast Guard as well as its
  contractor-partner for implementation of a Deepwater
  Acquisition Program.
  I must say that as I listened to Mr. Mica, I think we have
  to be very careful that we don't assassinate witnesses before
  they even testify. These witnesses come to us, some of them I
  am sure, with some fear, but they have stepped forward bravely.
  I am very, very familiar with their testimony, and I know that
  they have the concerns of the American people and the Coast
  Guard and Coast Guard personnel, by the way, in mind.
  Deepwater is a $24 billion, and I emphasizes billion
  dollar, procurement effort through which the Coast Guard is
  acquiring 91 cutters, more than 100 small surface craft and 244
  new or converted aircraft including helicopters and fixed wing
  airplanes.
  Americans trust the Coast Guard to protect them from
  emerging threats approaching our homeland from the sea, to
  rescue them when they are in danger and to protect the natural
  resources of our marine environments. That trust is well
  placed.
  However, Americans also need to know that they can trust
  the Coast Guard's leaders to manage the taxpayers' hard earned
  dollars effectively and efficiently and to provide the tools
  that the men and women of the Coast Guard need to succeed.
  Further, Americans need to know that when a multibillion dollar
  contract is signed, the parties to that contract will
  accomplish its objectives to the best of their abilities.
  Our expectations for the Deepwater program are not
  unreasonable. We expect it to produce boats that float, planes
  that fly and information technology systems that work, meaning
  that they allow for identification of threats in the maritime
  domain while protecting sensitive and classified communications
  and allowing effective control of deployed assets.
  What is remarkable and completely unacceptable is that a
  program costing on the order of $100 million intended to
  upgrade 110 foot legacy cutters, lengthen them to 123 feet and
  extend their service lives has produced eight cracking hulks
  that are now tied up within a few miles of my house in
  Baltimore, unable to return to service and waiting for the
  scrap heap.
  And guess who paid for them. The American people.
  What is unconscionable is that the simple and
  straightforward expectations of Congress and, more importantly,
  the American taxpayers have not been met because of a
  combination of poor oversight by the United States Coast Guard
  and poor performance by two of the world's largest defense
  contracts, Lockheed Martin and Northrop Grumman.
  I applaud the action taken yesterday by Admiral Thad Allen,
  the Commandant of the United States Coast Guard to begin to
  right what has become a floundering acquisitions effort veering
  far, far off course. I believe that this decisive leadership
  will put this program on a path to success.
  However, though the Commandant has taken bold steps to
  bring the systems integration functions back in-house, to rebid
  parts of the Deepwater contract and to ensure that assets are
  independently certified against highest industry standards, it
  is essential that we learn the lessons of the past five years
  of Deepwater implementation so that past errors are never
  repeated.
  I have said it before, and I will say it again. This is a
  Country that is able to send folks to the moon. We ought to be
  able to build ships that float.
  Today, therefore, we examine the 123 program. We will take
  a close look at all of the actions of the Coast Guard and its
  partner, the integrated Coast Guard systems team that
  contributed to the colossal failure of the program. We want to
  know why the Coast Guard and its partners went ahead with a
  design to lengthen the 110 foot cutters despite warnings from
  the United States Navy that the hulls should have been
  strengthened before they were lengthened, warnings based on the
  Navy's own experience lengthening the 170 foot Cyclone Class
  ships to 179 feet.
  We will also closely examine whether the equipment
  installed inside the converted 123 foot boats met all
  contractual requirements and was designed to ensure safety of
  the crews, and I emphasize that, safety of the crews. We want
  to make sure that Coast Guard personnel are safe.
  Further, we want to examine whether the C4ISR Command and
  Control System was properly certified to ensure the protection
  of national security data.
  I applaud the willingness of the dedicated individuals, who
  worked in various capacities in the Deepwater program, to come
  forward today to share their concerns about what they
  experienced on that program and about the actions taken by
  managers leading the program.
  The Committee's investigation also received critical
  assistance from an outside expert on TEMPEST process who has
  dedicated countless hours of his own personal time to analyzing
  TEMPEST certification process on the 123s.
  I thank Michael DeKort, Robert Braden, Scott Sampson and
  James Atkinson for their dedication to excellence.
  Our Committee shares their dedication. Therefore, while we
  examine what must be done to ensure the success of Deepwater,
  we also will be examining what must be done to build
  acquisitions systems and develop experienced management
  personnel within the Coast Guard who can assure that a single
  dollar is never, ever wasted in the procurement of a ship or
  plane for the Coast Guard fleet.
  With that, Mr. Chairman, I yield back.
  

• 

  Mr. Oberstar

  At 00:28:00
  13 seconds

  I thank the gentleman for his very strong
  statement and again for his very diligent work.
  I yield now to the gentleman from Ohio, the Ranking Member
  of the Subcommittee, Mr. LaTourette.
  

• 

  Mr. LaTourette

  At 00:28:13
  3 minutes

  I thank you very much, Mr. Chairman, and I
  will try to move along expeditiously. I want to thank you and
  Chairman Cummings for holding this hearing.
  I have to say that I come to this hearing with a deep
  concern over the future success of the Deepwater program. As I
  indicated at the Subcommittee hearing in January, there is no
  more important issue facing the Coast Guard now than the delays
  and setbacks that are jeopardizing this program.
  This hearing today is going to focus on the conversion of
  the 110 foot patrol boat fleet, and I believe that we will use
  this hearing to examine the roots of the problems that resulted
  in this failure, and I hope that what we look at is how the
  Coast Guard can apply the lessons learned to future acquisition
  projects.
  The original Deepwater contract, which has now run a number
  of years, established performance requirements for each asset
  and component system. It appears that in too many cases, the
  responsibilities to oversee, test and certify the construction
  and performance of these assets and systems was invested in the
  contractors and not the Coast Guard.
  The Coast Guard has addressed these issues under Commandant
  Allen's direction that was announced just yesterday, and I have
  confidence that the Coast Guard will take much more active role
  in reviewing and ultimately approving or disapproving asset
  designs, performance testing and compliance with contract
  requirements.
  While I appreciate the Commandant's new directives and
  willingness to address past problems, I remained concern by the
  number and nature of problems that seem to come to light every
  time this Committee holds a hearing. It appears that there were
  several opportunities to make significant changes to the design
  and the structure of the 123 foot patrol boat hull and that the
  Coast Guard chose not to take those corrective actions.
  As a result, the Coast Guard took possession of eight
  vessels that can't be used for any mission by the Coast Guard
  and are now scheduled to be scrapped. The loss of these eight
  vessels and the impending delay in requiring more capable
  vessels hurts the Coast Guard's ability to safeguard and secure
  our Nation's waters and jeopardizes the safety of Coast
  Guardsmen that serve aboard increasingly aged and deteriorating
  vessels.
  I am further concerned by the apparent lack of control
  procedures that allow a contractor to install and self-certify
  component systems that have not been tested against industry or
  military standards. The Coast Guard is responsible for ensuring
  that the assets and systems that it accepts meet all terms and
  conditions of the contract and all relevant performance
  specifications.
  Under the Commandant's new directions, the Coast Guard will
  take on additional responsibilities to verify compliance. I
  can't emphasize enough how critical these new responsibilities
  are for the future of the service.
  The Deepwater program and the assets that will acquired
  under Deepwater are critical to the Coast Guard's future
  mission success. The men and women of the Coast Guard carry out
  brave and selfless service to our Nation each and every day,
  and we need to make sure that the Deepwater program is carried
  out in a way that the best, most capable equipment is acquired
  to allow these Coast Guardsmen to carry out their important
  missions.
  I want to thank the witnesses for appearing today.
  Mr. Chairman, on the way over from my last series of votes,
  I mentioned some matters to Subcommittee Chairman Cummings, and
  I am not going to bring those up at this moment, but they do
  relate to issues that Mr. Mica was addressing. I hope that
  maybe the four of us could have a conversation in the future
  about some of those things.
  I thank you for your courtesy and yield back the balance of
  my time.
  

• 

  Mr. Oberstar

  At 00:31:29
  1 minute

  I thank the gentleman for his statement, for
  his ever public spirited concern about the work of this
  Committee.
  We have had some difficulties in proceeding with this
  hearing because we requested on March 20th documents from the
  Coast Guard. We did not get what we were requesting until April
  6th and not until Subcommittee Chairman Cummings met with the
  Commandant did we get at 5:00 p.m., on Friday, April 13th, the
  full set of documents that we requested much earlier. That
  hampered and made difficult the task of structuring this
  hearing and getting the information we needed. So there have
  been some difficulties along the way.
  We made our best effort to include the Republican side in
  this process and gave to staff the names of witnesses right at
  the outset and how to contact and invited minority staff to
  conduct their own individual inquiry.
  

• 

  Mr. LaTourette

  At 00:32:38
  

  Will the Chairman just yield?
  

• 

  Mr. Oberstar

  At 00:32:38
  

  Yes, I will yield.
  

• 

  Mr. LaTourette

  At 00:32:38
  17 seconds

  I think the Chairman and the full Committee
  know that there is no member of Congress that I have greater
  respect for and even affection for than the Chairman. My
  invitation was that maybe as we move forward we can do a little
  bit better in talking to each other.
  

• 

  Mr. Oberstar

  At 00:32:55
  

  Always, we always can do better, and we will.
  

• 

  Mr. LaTourette

  At 00:32:55
  

  Thank you.
  

• 

  Mr. Oberstar

  At 00:32:55
  50 seconds

  Now I ask all witnesses to rise.
  Do you solemnly swear to tell the truth, the whole truth
  and nothing but the truth, so help you, God?
  [Witnesses respond in the affirmative.]
  Thank you.
  Mr. DeKort, we will begin with you. We welcome your
  statement. Again, I say that you have provided enormous service
  to the public and to the Committee, and I think in the long
  run, the Coast Guard, by the work that you have done.
  Please proceed.
  TESTIMONY OF MICHAEL DEKORT, FORMER PROJECT MANAGEMENT
  SPECIALIST FOR 123 SYSTEMS, LOCKHEED MARTIN; ROBERT BRADEN,
  SENIOR TECHNICAL STAFF, PROCESSOR AND SYSTEMS DESIGN, LOCKHEED
  MARTIN; SCOTT SAMPSON, SECTION CHIEF OF THE DEVELOPMENT
  SECTION, U.S. COAST GUARD MAINTENANCE AND LOGISTICS COMMAND
  ATLANTIC IN THE VESSEL SPECIFICATIONS BRANCH; JAMES ATKINSON,
  PRESIDENT AND SENIOR ENGINEER, GRANITE ISLAND GROUP.
  

• 

  Mr. DeKort

  At 00:33:45
  12 minutes

  Thank you, Mr. Chairman, for that comment.
  Good afternoon, Mr. Chairman and members of the Committee.
  I deeply appreciate your taking the time to hear testimony on
  the C4ISR problems relating to the Deepwater effort.
  While I will be highlighting the C4ISR issues, I am sure
  you realize that they are only examples of the systemic
  engineering and management problems associated with this
  effort. The problems I will be describing are not simply
  mistakes. They were informed, deliberate acts.
  As I will show, I have been trying to resolve these
  problems for almost four years after not being able to convince
  every level of management of every relevant organization in
  Lockheed Martin through to the CEO and board of directors, and
  I believe there is a timeline up that shows some of that
  information. As well as working with integrated Coast Guard
  systems, I turned to the appropriate Government agencies,
  public officials, whistleblower organizations and when all else
  failed, the internet and the press for help.
  What needs to be understood here is that every one of these
  problems was easily resolved with off the shelf products well
  before any of the assets were delivered. Additionally, as the
  contract mandates system commonality, every one of these
  problems is a candidate for inclusion on every other maritime
  asset that ICGS delivers for the lifetime of the contract. This
  plan, if allowed to come to fruition, will literally cripple
  the entire maritime fleet of the U.S. Coast Guard for decades.
  Before delving into the issues, I would like to tell you a
  little bit about my background. I was an electronics technician
  in the U.S. Navy for six years. I specialized in communications
  systems. After my enlistment ended, I spent a brief time in the
  private sector before I joined the U.S. State Department as a
  communications engineer for embassy and consular duties as well
  as for the counterterrorism group.
  After leaving that organization, I became a systems
  engineer in Lockheed Martin. Through the years, I was promoted
  to project, program and engineering manager. During my last
  five years, I was a software project manager for Aegis Baseline
  6/3, the lead systems engineer of C4ISR for the Deepwater
  effort and the software engineering manger for the NORAD
  efforts. It is the period where I held the C4ISR lead systems
  engineer position that is the focus of this testimony.
  At the point I joined the effort in the summer of 2003, the
  final design review had been completed, and most of the
  equipment had been purchased for the first several boats. In
  addition to creating a master schedule, I was tasked with
  identifying final deliverable requirements and planning
  integration of the first boats. It was during this period that
  several critical safety and security issues came to my
  attention.
  The first problem was that we had purchased non-
  weatherproof radios for the Short Range Prosecutors or SRPs.
  The boats are small open aircraft that are constantly exposed
  to the environment. Upon first hearing about this issue, I have
  to admit I found it too incredible to believe. Who would put a
  non-weatherproof radio, the primary means of communication for
  the crew, on a boat with no protection from the elements?
  The individual who brought this to my attention strongly
  suggested I look into it no matter how incredible it sounded. I
  called the supplier of the radio who informed me it was true.
  We had purchased four radios for the first SRPs, and they were
  not weatherproof. As a matter of fact, the vendor asked me to
  not use the radios on any of the SRPs which would eventually
  total 91 in all.
  Upon informing Lockheed management that the radios needed
  to be replaced, I was told that there was a design of record.
  This meant the customer had accepted our design at the
  conclusion of the critical design review and that we would make
  no changes that would cause cost or schedule impacts. As a
  matter of fact, we ordered five more radios after I went to
  management about the problem in order to prepare for the next
  set of boats we were contracted to modify.
  I tried for several months to get the radios replaced.
  Just before delivery of the first 123 and its associated
  SRP, the customer asked to test the system. Coincidentally, it
  rained on test day. During the testing, several radios shorted
  out. It should be noted that had we not tested the boats in the
  rain on that day, we would have delivered that system, and it
  would have failed the very first time it was used.
  After this, I was told we would go back to the radio that
  originally came with the SRPs.
  I believe that this example more than any other
  demonstrates the lengths the ICGS parties were willing to go to
  hold to schedule and budget while sacrificing the safety and
  security of the crew.
  The next problem uncovered involved the video surveillance
  system. The Coast Guard wanted a system that would permit
  watching the boats when in a Coast Guard port without someone
  having to be physically on the boats. Our solution was to
  provide a video surveillance system that had significant blind
  spots leaving the bridge or pilot house vulnerable to
  penetration.
  The most frustrating part about this issue is that the
  simple purchase and installation of a fifth camera would have
  resolved the problem. Bear in mind, we knew about the need for
  the extra camera several months before the first 123 was
  delivered.
  Another problem we discovered involved low smoke cables.
  There was a requirement to install low smoke cables so that in
  case of a fire, flames do not spread quickly, equipment is not
  overly exposed to corrosive smoke and the crew is not exposed
  to a large amount of toxic fumes. In a recent report, the
  Inspector General for the Department of Homeland Security
  confirmed that over 80 of these cables are the wrong type and
  that the waiver the Coast Guard gave to the contractor so they
  could avoid having to provide these cables was invalid.
  The next issue involved communications security and the
  standards necessary to ensure those communications are
  safeguarded from the eavesdropping or inadvertent transmission
  of crosstalk. These standards are known as TEMPEST. We
  installed non-shielded cables, 101 in all, on all of the 123s,
  cables that did not meet standard TEMPEST safety and security
  requirements as borne out by their failing of the visual
  inspection which was carried out by the appropriate testing
  authority.
  This situation could lead to serious compromise of secure
  communications not only for the Coast Guard but for other
  Government organizations such as DOD, FBI and DEA. I was
  informed that we had included these cables in the design
  because we had not bid the TEMPEST requirement and, as such, we
  decided we did not have the money to include them.
  The final significant problem was that of the survivability
  of the external mounted equipment. I saved this one for last
  because of how serious the repercussions are for the Coast
  Guard and the Nation, the fact that the DHS IG agreed
  completely with my allegation relative to this issue, the
  incredible position Lockheed Martin has taken on this issue and
  the fact that the Coast Guard seems willing to allow them to
  get away with it.
  Shortly before the first 123 was delivered, we finally
  received the environmental requirements. During the late review
  of the requirements --I am sorry --of the equipment for
  compliance, well after the design review and purchase of the
  equipment, we found the very first item we looked into would
  not meet environmental requirements. Given this failure, we
  feared the rest of the equipment may not meet environmental
  requirements.
  Let me state this in simple terms. This meant the Coast
  Guard ships that utilized this equipment would not operate in
  conditions that could include heavy rain, heavy seas, high
  winds and extreme temperatures.
  When I brought this information to Lockheed management,
  they directed me and my team to stop looking in to whether or
  not the rest of the equipment met these requirements. This
  meant that all of the externally mounted equipment being used
  for the critical communication, command and control and
  navigation systems might fail in harsh environments. Since that
  time, we have learned through the DHS IG report on the 123s
  that 30 items on the 123s and at least a dozen items installed
  on the SRPs did not meet environmental requirements.
  In addition to their technical and contractual findings,
  the IG also made some of Lockheed Martin's responses on this
  issue known in that report. Incredibly, the IG states that
  Lockheed Martin incorrectly stated in their self-certification
  documents that there were no applicable requirements
  stipulating what the environmental requirements were in regard
  to weather, and they actually stated that they viewed the
  certification of those requirements as ``not really
  beneficial.''
  In addition, the IG states that the Coast Guard did not
  know the boats were non-compliant until July of 2005, one and a
  half years after the first 123 was delivered. The report also
  states that none of these problems were fixed, not on any of
  the delivered boats. That, along with this issue not being
  called out in the DD-250 acceptance documents, supports my
  supposition that Lockheed Martin purposefully withheld this
  information from the Coast Guard.
  Finally, the IG states that Lockheed's position on them
  passing the self-certification without testing these items was
  the right thing to do because they thought the tests would be
  ``time consuming, expensive and of limited value.'' Bear in
  mind that the contractors have stated time and time again in
  front of this and other oversight committees that they do not
  practice self-certification.
  Where does this situation leave us? Had the hulls not
  cracked or the cracks not appeared for some time, ICGS would
  have delivered 49 123s and 91 SRPs with the problems I
  described.
  In addition to that, the Deepwater Project is a system of
  systems effort. What this means is that the contractor is
  directed to deliver solutions that would provide common
  equipment sets for all C4ISR systems. Said differently, all the
  equipment for like systems need to match unless there is an
  overwhelming reason not to.
  This means that every faulty system I have described here
  will be installed on every other maritime asset delivered over
  the lifetime of the effort. This includes the FRCs, the OPCs
  and the NSCs. If we don't stop this from happening, ICGS will
  deliver assets with these and other problems. I believe this
  could cripple the effectiveness of the Coast Guard and their
  ability to perform their missions for decades to come.
  How have the ICGS parties reacted to the totality of these
  allegations? At first, Lockheed and the U.S. Coast Guard, as
  stated by the ICGS organization, responded to my allegations by
  saying they were baseless, had no merit or that all of the
  issues were handled contractually. That evolved after the IG
  report came out to them, stating that the requirements had gray
  areas and later by actually deciding, after the systems were
  accepted and the problems were found, that in some cases the
  Coast Guard exaggerated their needs as was their comment
  regarding the environmental survivability problems.
  Up until the announcement yesterday, I have heard a lot of
  discussion about the changing of the ICGS contract structure,
  the fixing of the requirement, reorganizing the Coast Guard and
  adding more oversight. While all of those things are
  beneficial, they in no way solve the root problem. Had the ICGS
  organization listened to the Engineering Logistics Center or
  ELC and my recommendations, there would be no problems on these
  boats. We wouldn't be talking about more oversight or making
  sweeping changes. Instead, we would be discussing what a model
  program Deepwater is.
  I guarantee you that had the changes that were made up
  until yesterday, yesterday's announcement, been made four or
  five years ago, it wouldn't have mattered. Even with the
  incestuous ICGS arrangement, the less than perfect requirements
  and minimal oversight, there was plenty of structure in place
  and information available to do the right thing. It is not
  practical to think that one can provide an ironclad set of
  requirements and an associated contract that will avoid all
  problems.
  All that was needed were leaders who were competent and
  ethical in any one of the key contractor or Coast Guard
  positions. Any one of dozens of people could have simply done
  the right thing on this effort and changed the course of events
  that have followed. It is because of that that I strongly
  suggest you shift, suggest you focus, your focus shift to one
  of accountability in an effort to provide a deterrent.
  No matter what structure these parties put in place, no
  matter what spin they come up with or promises they make, no
  matter how many people you spend taxpayer dollars to employ to
  provide more oversight, it still comes down to people. We
  wouldn't need more oversight if the ICGS parties would have
  done as they promised when they bid the effort.
  They told the Coast Guard: We know you have a lack of
  personnel with the right skills. Let us help you. Let us be
  your trusted agent. Let us help write the requirements so we
  can provide you cutting edge solutions. Let us write the test
  procedures and self-certify so we can meet the challenges we
  all face in a post-9/11 world.
  In the end, people have to do the right thing and know that
  when they don't, the consequences will be swift and
  appropriate. I strongly believe that especially in a time of
  war the conduct of these organizations has been appalling.
  As such, I would hope that this Committee and other
  relevant agencies with jurisdiction will do the right thing and
  hold people in these organizations accountable. All defense
  contractors and employees of the Government need to know that
  the high ethical standards, high ethical standards are not
  matters of convenience. If you do not hold these people and
  organizations accountable, you will simply be repackaging the
  same problems and have no way of ensuring the problems don't
  happen again on this or any other effort.
  In closing, I am offering to help you, help in any way I
  can to remedy these issues. As I told the Commandant,
  Commandant Allen's staff and Lockheed Martin before my
  employment was terminated, I want to be part of the fix. With
  the right people in place in the right positions, this project
  can be put back on track rapidly.
  I would like to thank you again for the opportunity to
  testify and look forward to answering your questions.
  

• 

  Mr. Oberstar

  At 00:46:11
  11 seconds

  Thank you very much for a very thorough,
  thoughtful and well structured statement.
  Mr. Braden, would you identify yourself and then proceed
  with your statement?
  

• 

  Mr. Braden

  At 00:46:22
  5 minutes

  Yes. Thank you, Mr. Chairman and members of the
  Committee.
  My name is Robert Braden, and I have over 40 years of
  engineering experience including nearly 30 years of service
  with Lockheed Martin Corporation. I am currently employed by
  Lockheed as a senior technical staff at Moorestown, New Jersey.
  In this position, I am often expected to provide program and
  project leadership for a variety of programs.
  In early 2003, I was requested to join the U.S. Coast Guard
  Deepwater program as a lead system engineer for the
  Communication Area Master Stations or CAMS and Legacy Cutter
  program. That program was to do upgrades of three different
  classes of cutters that did not include the 123s. Program
  objectives were to provide enhanced satellite communications
  and modern C4ISR systems for these existing Legacy assets.
  This included installations, upgrades and new capabilities
  for 39 existing Legacy Cutters. We provided significantly
  improved satellite bandwidth, improved shipboard networks, new
  law-marine radios, new Automatic Identification Systems and
  expanded secret internet protocol router networks, or SIPRNET,
  communications capabilities. These improved SIPRNET
  capabilities provide the Legacy fleet with the ability to
  significantly improve coordination with law enforcement and
  homeland security actions with the U.S. Navy and within the
  Coast Guard.
  After completing the total replan of the program, we
  submitted an aggressive fixed price proposal to the Coast
  Guard. Unfortunately, the Coast Guard contracting office
  continued to extend negotiations all the way to the end of the
  fiscal year. This required Lockheed Martin to either stop work
  or independently fund the continued engineering and procurement
  of our long lead material. Lockheed elected to support the
  aggressive Deepwater deployment objectives of Admiral Stillman
  and provided several million dollars of internal risk funding
  to allow my team to obtain the material, integrate the system
  and prepare for the first installations.
  During this same period of development and design, I was
  engaged in intensive dialogue with my Coast Guard contracts
  technical representative, with the Coast Guard's ships
  integration personnel and with the Coast Guard's top
  communications security organization known as TISCOM.
  The purpose was to determine and negotiate all requirements
  for the CAMS/Legacy installations. Our key objective was to
  provide a communications installation that would immediately
  achieve a SIPRNET Interim Authority to Operate followed shortly
  thereafter by a full Authority to Operate. The reason that was
  important was that these ships were in port for a limited
  period of time. When those ships left port, our installation
  needed to allow the crew to immediately use the new secure
  capabilities.
  I was also fully engaged in weekly program integration
  meetings involving all Moorestown management of the Deepwater
  program. These PIT meetings were mandatory every week and
  covered all aspects of the program and included at every
  meeting, U.S. Coast Guard representatives and generally
  included representatives from the ICGS or Integrated Coast
  Guard Systems organization. The purposes of the meetings were
  to ensure coordination among the various programs and maintain
  commonality among all the assets. Topics included status of the
  system of systems activities, the CAMS/Legacy Cutter upgrades,
  the 123 foot cutter conversion program and the other various
  assets.
  Approximately once each month, the PIT meetings, Program
  Integration Team meetings, would expand to a full Deepwater
  program review with all management present, and that usually
  included the ICGS, the different subcontractors as well as the
  Coast Guard officers.
  On numerous occasions, I presented the design, installation
  and security briefings appropriate to my cutter class to ensure
  coordination of our CAMS and Legacy plans. During these PIT
  meetings, the various LSEs or Lead System Engineers would
  become aware of the problems and issues faced by their
  counterparts. So part of the purpose of the meeting was to make
  sure we compared notes and make sure that we all met a common
  design. We would occasionally compare notes to see if a common
  resolution to our problems were possible.
  Often, the aggressive pace of my own project and the
  structure of the Deepwater program required that my team
  maintain focus on our own design issues. However, whenever I
  found an issue that concerned me and I was unable to influence
  a change, I would advise upper management of the problem.
  In August, 2003, my team began upgrades of the CAMSLANT or
  master station Atlantic facility and installation of the first
  Deepwater sea-based asset, the U.S. Coast Guard Cutter,
  Northland. We completed these installations within one month,
  thereby establishing the milestone of the first successful
  asset delivery to the Coast Guard Deepwater program. By year
  end, we followed this achievement with a successful
  installation of the Deepwater C4ISR suite aboard the cutter
  Tampa.
  The subsequent string of successful installations has been
  a continuing source of personal satisfaction for my design and
  installation team, and I personally take great pride in
  expeditiously and cost effectively completing the first
  successful and compliant Deepwater installations in the history
  of the program.
  I continued to manage and guide the installation of the
  first nine 270 foot Legacy Cutters and developed the design and
  installation procedures for the remaining 210 and 378 foot
  cutters. In March, 2004, I was removed from the Deepwater
  program and transferred to another program.
  This concludes my testimony. I would be pleased to answer
  any questions the Committee may have.
  

• 

  Mr. Oberstar

  At 00:52:12
  5 seconds

  Thank you, Mr. Braden.
  Mr. Sampson, please identify yourself and proceed with your
  testimony.
  

• 

  Mr. Sampson

  At 00:52:17
  41 seconds

  Good afternoon, Congressman Oberstar,
  Congressman Cummings and distinguished Committee and
  Subcommittee members.
  My name is Scott Sampson. I have been requested to come
  before you today to discuss my involvement with the 123 program
  as associated with the Deepwater program.
  I have a unique perspective of this program in that I work
  for the DOD agency which expressed grave concern about a
  potential extension of a 110 foot patrol boat to 123 feet, then
  changed jobs to work for a Coast Guard office which supports
  these modified cutters. Today, I will tell you about the people
  I communicated my concerns to that were unfortunately realized.
  If I may request, Mr. Chairman, I would like my written
  statement entered into the record.
  

• 

  Mr. Oberstar

  At 00:52:58
  

  Without objection, so ordered. Your statement
  will be included in the record.
  

• 

  Mr. Sampson

  At 00:52:58
  3 minutes

  Thank you, sir.
  The DOD agency I worked for was the Combatant Craft
  Division, a detachment of the Naval Surface Warfare Center
  Carderock Division, otherwise known as CCD. CCD had designed a
  similar extension on a similar platform and felt, based on
  lessons learned, that the proposed method of modification of
  the 110 was at a high risk for failure.
  While I was with CCD, three key contacts were made to
  express concerns over the proposed design modification. The
  first was Debu Ghosh of the Coast Guard's Engineering Logistics
  Center. Mr. Ghosh was the Branch Chief of the Boat Engineering
  Branch. Second was Diane Burton of the Coast Guard's Deepwater
  Program Office. Ms. Burton was the Deepwater Surface Technical
  Director. The third person that was contacted was Dennis Fanguy
  of Bollinger Shipyard. The Fanguy was the head of their
  engineering department.
  These conversations were conducted in the August to
  September, 2002 timeframe with the exception of Mr. Fanguy who
  was contacted shortly thereafter.
  It was explained to each of these individuals not only
  concerns associated with the proposed modification of the 110
  but where those concerns stem from as they pertain to a similar
  experience with a Navy craft. These concerns centered around
  several items but specifically included longitudinal strength,
  running trim and engineering experience.
  Mr. Ghosh appeared to share our concerns and attempted to
  hire Combatant Craft to assist with oversight. Specifically,
  Mr. Ghosh requested and I provided a statement of work and an
  estimate to provide 14 days of on site support at Bollinger
  shipyard, assisting the two naval architects and also to supply
  a sea keeping analysis comparing the 110 to the 123. The
  estimate for this level of support was $42,000.
  Mr. Ghosh told me shortly thereafter that the Deepwater
  Program Office would not supply the funding.
  Conversations with the other two contacts, Ms. Burton and
  Mr. Fanguy were short and with little discussion.
  The Matagorda was inducted into Bollinger Shipyard on the
  2nd of February, 2003. On the 5th of March, 2004, the MATAGORDA
  was delivered back to the Coast Guard and on the 10th of May,
  2004, entered a Post Delivery Maintenance Availability. Within
  days of leaving this availability in the early part of
  September, 2004, Matagorda suffered damage in the middle of the
  cutter, buckling the side shell and deck.
  This is the type of longitudinal failure that the Combatant
  Craft Division anticipated seeing and had warned the Coast
  Guard and Bollinger Shipyard about. This predicted failure
  occurred not as a result of fatigue or corrosion but rather
  from one short period of operation in a sea reported to be four
  to six feet in height. This longitudinal bending failure was
  acknowledge in a report issued by ELC entitled Matagorda
  Buckling Incident Analysis dated 24 September, 2004, and
  verified our concerns expressed in August of 2002.
  After two attempts to make the 123s usable for service, the
  Coast Guard made the decision to lay the vessels up until a
  final decision could be made as to whether or not they could be
  repaired. The Coast Guard made this decision after extensive
  inspection of the cutters. All eight cutters are currently
  located at the Coast Guard Yard.
  Mr. Chairman, this concludes my statement. I will be more
  than happy to answer any questions you may have.
  

• 

  Mr. Oberstar

  At 00:56:40
  28 seconds

  Thank you very much, Mr. Sampson. That is
  very critical testimony for the inquiry of the Committee.
  I have heard a couple of cell phones or other devices going
  off. Under the Committee rules, all communication devices must
  be inaudible. Turn them off or put them on vibrate.
  Mr. Atkinson, you may feel free in your remarks to respond
  to the issues raised by Mr. Mica earlier.
  

• 

  Mr. Atkinson

  At 00:57:08
  9 minutes

  Thank you, sir.
  My name is James Atkinson. I am the President and Senior
  Engineer of Granite Island Group located in Gloucester,
  Massachusetts.
  We specialize in electronics engineering. We perform bug
  sweeps. We perform wiretap detection. We stop technical
  espionage. We plug leaks both in classified and unclassified
  communications systems. Essentially, we hunt spies.
  I am considered to be one of the top international experts
  on the subject matter of TSCM, TEMPEST and technical security.
  I have attended private and Government-sponsored TSCM, TEMPEST,
  cryptograph, technical intelligence, electronics and security
  training both in the United States and abroad. I have been
  involved in many hundreds of TSCM, TEMPEST inspections over the
  last 25 years of Government service and private sector
  assignments.
  My clients include major heads of major corporations, heads
  of state, diplomats, Government agencies, defense contractors,
  hospitals, courthouses, political leaders, ministers, small
  business, large ministers in virtually walk of our Country.
  Due to the nature of my, of the services I render to my
  clients, it would not be prudent to disclose precisely who they
  are. However, I have been to Washington, D.C. many times on
  business to render such services.
  I am one of the few people who can clearly explain the
  highly technical and highly classified subject matters such as
  TEMPEST and TSCM to this Committee in an unclassified way so
  that a non-technical layman can understand it, and I can
  provide a voice of reason.
  The documents in this matter are highly technical, and it
  takes a TEMPEST and TSCM expert to fully understand what is
  really in those documents, what it really represents and what
  they really mean and to bring forth the gravity of what is
  really going on.
  The core message here is that TEMPEST is a rigorous series
  of Government standards which have been developed by the
  National Security Agency. The purpose is to protect classified
  equipment, signals and information from eavesdropping. TEMPEST
  focuses on securing classified equipment and systems in order
  to keep electronics from leaking secrets.
  Our foreign adversaries know about TEMPEST and the related
  fields and know how to steal our electronic secrets from
  equipment that does not comply with these rigorous standards.
  For example, the nations of Cuba, Iran, India, China, Colombia,
  France, North Korea and many other countries have become quite
  adept at eavesdropping on our improperly protected classified
  equipment. While most countries are our allies, the United
  States has designated over 30 nations to be openly hostile to
  the United States, and there is strong evidence that these
  countries not only do have the equipment to eavesdrop on our
  leaking equipment but do so on a regular basis.
  Gentleman, it is my unpleasant duty to inform you that the
  Coast Guard, ICGS and Lockheed Martin have been highly
  negligent in their oversight of the Deepwater program, that
  many millions of dollars has been wasted on ships that don't
  float and electronics, classified electronics which leak
  national security secrets.
  During my review of the technical documents in this matter,
  I discovered that the United States Coast Guard was not being
  forthcoming with information to this Committee and that the
  Department of Homeland Security Office of Inspector General had
  previously requested in regards to C4ISR and TEMPEST issues. I
  found that instead they were hiding malfeasance within these
  documents and a deeply flawed procurement process.
  Further review determined that there was significant lack
  of oversight on the part of the United States Coast Guard and
  that they were using doublespeak in their answers to this
  Committee and evading politically uncomfortable questions put
  before them.
  Based on the analysis of the numerous documents to include
  detailed TEMPEST reports which the Coast Guard eventually,
  albeit begrudgingly, provided to the Committee, I was able to
  determine the following:
  From the very beginning, the very first day of the program,
  the Coast Guard did not clearly define the technical
  specifications and standards that these ships had to comply
  with in order to protect the classified information. The
  contractor, in turn, delivered substandard and highly defective
  assets as there was little or no Coast Guard oversight on the
  project even though the Government was paying the contractor to
  provide oversight as the integrator.
  The Coast Guard accepted delivery of these defective ships
  and, instead of correcting many of the defects, merely covered
  them up with waivers or used substandard parts to create the
  illusion of a repair. An example is unclassified and classified
  local area network connection boxes were supposed to be
  separated from each other. The Coast Guard chose to resolve
  this problem merely by putting stickers on the equipment as
  opposed to fixing it. So they patched a leak with a Post-It
  note.
  Not only has the contractor responsible for this waste
  butchered eight valuable ships and rendered them worthless,
  they have endangered national security in delivering ships that
  leak secrets, contain significant vulnerabilities and which
  provide a clear and present danger to our national security.
  The Coast Guard was and still is spending money like a drunken
  sailor on shore leave with minimal oversight. The Coast Guard
  lacks the core competencies and resources to protect this
  classified information through their TEMPEST program. ICGS has
  taken advantage of the United States after 9/11 and has taken
  advantage of the Coast Guard in particular. The Coast Guard put
  more priority on its public relations than it did with their
  TEMPEST program.
  My recommendations is that this Committee pull the plug on
  the Coast Guard's access to classified information, that it
  revoke SIPRNET access and essentially revoke the Coast Guard's
  security clearance. This should be done by the end of business
  today.
  Also, I recommend that you initiate an exhaustive top-down
  study of all COMSEC, Coast Guard COMSEC, TEMPEST, NONSTOP,
  TSCM, emission security and related technical security and
  engineering disciplines and focus on all assets of the Coast
  Guard not just the Deepwater ships.
  I recommend that this Committee assume every Coast Guard
  asset is suspect until it can be scientifically proven secure
  through actual instrumented analysis and not just waivered as
  has been the case of late.
  I recommend that all eight cutters be stripped of anything
  of value and that they be sold off as scrap metal, cancel or
  suspend all current or upcoming contracts with ICGS and
  Lockheed Martin until this matter can be fully resolved and
  consider issuing an interim debarment against Lockheed Martin
  and ICGS until their full management has been forthcoming with
  appropriate answers.
  Also, refuse to allow the Coast Guard to possess, access,
  obtain materials or gain access to any classified networks
  until each asset has been subjected to a rigorous and
  independent, highly detailed technical inspection by somebody
  outside of the Coast Guard.
  Refuse to allow the Coast Guard to purchase any further
  tactical or Deepwater assets unless other elements of the
  United States Government provide very close oversight over the
  specifications, designs and procurement of such systems. The
  natural agency to assist the Coast Guard with this would be the
  U.S. Navy who should handle the procurement and oversight of
  the Coast Guard assets until such time the Coast Guard is
  competent and can be trusted to do this themselves which they
  have not been able to of late.
  Identify the command level officers within the Coast Guard
  who had the ultimate responsibility for the oversight of this
  program and then remove them from any further Government
  service.
  Finally, we have to assume that the Department of Homeland
  Security is not competent in these matters and that their lack
  of oversight is widespread and institutionalized.
  Patrick Henry stated years ago that we are apt to shut our
  eyes against a painful truth, but for my part I am willing to
  know the whole truth, to know the worst of it and to provide
  for it.
  Gentleman, this project was doomed to fail from the very
  beginning. When modern electronics operate, they generate
  electromagnetic fields. Digital computers, radios, typewriters
  and so on generate tremendous amounts of electromagnetic
  energy. Compromising emanations is that electromagnetic energy.
  This can be conducted through the airwaves, over the power
  lines, over the phone lines, cable TV.
  The TEMPEST standards are very rigid as to how these
  emanations are controlled. The Coast Guard completely
  disregarded all of these specifications except one, and the one
  which they chose to pay attention to, they evaded on it
  significantly.
  Most of consumer market equipment leaks significantly.
  However, if somebody's computer leaks a little bit of
  information, they may have personal embarrassment. If a
  National Security Cutter or a Coast Guard Cutter or a B2B
  Bomber or other tactical equipment leaks, national security is
  at risk.
  This project was doomed to failure. It boils down to two
  core issues, a lack of oversight and malfeasance.
  On the issue of my mission statement, the mission statement
  was actually published many years ago. It says that I hunt
  spies and I hunt bad people. That is what it says.
  Lockheed Martin has a real problem with this because that
  issue was brought up repeatedly by Lockheed Martin previously
  after their security people were caught dealing with convicted
  felons to purchase illegal bugging equipment and to do
  moonlighting. This issue was brought up by Lockheed Martin and
  provided to the Coast Guard. I have a full audit trail from my
  web site logs of them doing this.
  That concludes my statement.
  

• 

  Mr. Oberstar

  At 01:07:00
  3 minutes

  Thank you very much, Mr. Atkinson.
  Mr. Atkinson has used and throughout the testimony we hear
  the word, the acronym, TEMPEST, which stands for
  Telecommunications Electronics Material Protected from
  Emanating Spurious Transmission. A layman's definition might be
  unclassified signals that leak from improperly shields cables.
  You can go to Radio Shack and buy a device that can tap
  into a model that is not properly shielded and get fax
  information and get computer information from your neighbor's
  home if you wish to do that.
  NATO electronic spies in Germany in the 1950s discovered
  that they could break into classified information by using
  unclassified signals that allowed them to trace back into the
  heart of technology in use. That is why the issue of TEMPEST is
  so critically important here. We will come to that later.
  We have a series of four votes on the floor. We have eight
  minutes remaining on the first vote. We will recess for the
  four votes and resume immediately thereafter with Mr. Cummings
  in the Chair.
  The Committee stands in recess.
  [Recess.]
  

• 

  Mr. Cummings

  At 01:10:28
  34 seconds

  [Presiding] Ladies and gentlemen, we are
  going to resume the hearing. We left off with Mr. Atkinson had
  finished testimony.
  I want to thank our panelists for your remarks.
  I am going to start off with a few questions.
  Mr. DeKort, you mentioned in your testimony that you
  brought a number of matters to the attention of senior Lockheed
  management. How high did you take these issues and what
  responses did you receive?
  

• 

  Mr. DeKort

  At 01:11:02
  31 seconds

  I took the matters to the CEO, Robert Stevens,
  on at least two occasions and the board of directors, and the
  response I received was that the allegations were baseless or
  had no merit, and I believe that was based on Lockheed's
  contention that they had disclosed all the issues to the Coast
  Guard or resolved them and they were handled contractually.
  

• 

  Mr. Cummings

  At 01:11:33
  

  Did you ever contact the Coast Guard
  directly?
  

• 

  Mr. DeKort

  At 01:11:33
  4 seconds

  Yes.
  

• 

  Mr. Cummings

  At 01:11:37
  5 seconds

  Since you did that, who did you contact?
  

• 

  Mr. DeKort

  At 01:11:42
  23 seconds

  I contacted a Commander Ciampaglio and Mr.
  Jacoby who is here. I contacted Lieutenant Commander Durr who
  was the, I believe on the Commandant's staff at the time. I
  contacted a group commander of the boats in Key West, and I
  think that is it.
  

• 

  Mr. Cummings

  At 01:12:05
  

  What kind of responses did you receive?
  

• 

  Mr. DeKort

  At 01:12:05
  6 seconds

  Well, thank you was the response I got.
  

• 

  Mr. Cummings

  At 01:12:11
  

  Thank you?
  

• 

  Mr. DeKort

  At 01:12:11
  

  Yes, we will look into it.
  

• 

  Mr. Cummings

  At 01:12:11
  6 seconds

  But no thank you?
  

• 

  Mr. DeKort

  At 01:12:17
  5 seconds

  They didn't say the no thank you part. I
  understand your point.
  

• 

  Mr. Cummings

  At 01:12:22
  20 seconds

  As a Lockheed employee, had you ever been
  involved in another Lockheed project in which the company
  failed to meet contractual requirements in the way that you
  describe on the Deepwater program?
  Had you worked on any other contracts?
  

• 

  Mr. DeKort

  At 01:12:42
  

  Not of the same type or scale, no, sir.
  

• 

  Mr. Cummings

  At 01:12:42
  6 seconds

  What was your role in the installation of the
  TEMPEST hardware in the 123s?
  

• 

  Mr. DeKort

  At 01:12:48
  1 minute

  I was the lead system engineer for the 123s for
  C4ISR which meant that the final design, the installation was
  my responsibility and basically the final design. Like I
  explained in my statement, I came on board after the final
  design review, and so everything was pretty much locked in
  concrete at that point, and they ordered all the materials.
  The reason why the requirements were brought back up is
  because as I understand it, after the Rand study, the Coast
  Guard asserted a more aggressive posture in rolling out the
  programs because the Rand study had said, if you want 100
  percent mission satisfaction, you have to pull back your
  schedule 5 or 10 years, and they actually recommended 10, and I
  believe that is what precipitated us rolling out the 123s
  differently than was originally proposed.
  Originally, there was something called Increment 1.
  Increment 1 was the first set of requirements. When I took over
  the systems engineer role, they decided to deliver an Increment
  0 which was a subset of Increment 1. So we were trying to
  decide what would that subset be and what were the requirements
  associated with it. Did we deliver them entirely, not at all,
  partially?
  Part of my job was to figure out what Increment 0 was. And
  then, as I was figuring out what Increment 0 was, I was asking
  then well, what is our implementation? What is it we are doing
  to resolve that requirement and where are we in going down that
  road?
  

• 

  Mr. Cummings

  At 01:14:15
  15 seconds

  Did you all ever come to any conclusions as
  to what would be the standard?
  You just talked about the conversations you may have had,
  and I am trying to determine whether or not there was clarity
  at some point with regard to what those standards would be.
  

• 

  Mr. DeKort

  At 01:14:30
  28 seconds

  Well, there was basically from the very
  beginning, sir, a difference of opinion.
  When these issues were brought forward, the response was,
  and it occurred over and over again, we have a design of
  record, and what that meant was we don't want to hear it. If
  what you are bringing to me is an issue that is going to cause
  any schedule or financial problems or cost problems, we are not
  going to change it. We are not going to do anything.
  

• 

  Mr. Cummings

  At 01:14:58
  

  I take it you had some concerns about the way
  things were proceeding. Is that correct?
  

• 

  Mr. DeKort

  At 01:14:58
  2 seconds

  Oh, yes, sir.
  

• 

  Mr. Cummings

  At 01:15:00
  

  What were your major concerns or fears?
  

• 

  Mr. DeKort

  At 01:15:00
  1 minute

  Well, individually, I think the issues are
  pretty severe. I mean it is the Coast Guard. So if you are
  putting equipment on Coast Guard vessels--and I am talking
  about every Coast Guard vessel for the next 20 years,
  everything that Deepwater does--that won't survive the
  elements, okay, that is bad enough.
  You can't use their classified systems without compromising
  and have somebody eavesdrop.
  You have low smoke cables that if they catch on fire could
  cause someone to be overcome with smoke or make the fire spread
  faster.
  The blind spots on the surveillance system, the blind spots
  were very, very large, and they led right up to the bridge.
  So, individually, some of those issue are pretty
  significant. In total, I don't think it is an overstatement to
  say that if they continued, it would have crippled the Coast
  Guard. Had these boats not cracked or had they not cracked for
  some period of time, all 49 boats would have been delivered
  with these issues.
  

• 

  Mr. Cummings

  At 01:16:06
  14 seconds

  The ICGS team produced a document called
  Evaluation of TEMPEST Requirements to be Followed Aboard the
  Deepwater 123 Island Class Patrol Boat, and it was authored by
  a Jo Agat. Are you familiar with that document?
  

• 

  Mr. DeKort

  At 01:16:20
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 01:16:20
  5 seconds

  It is dated February 20th, 2003. Is that
  correct?
  

• 

  Mr. DeKort

  At 01:16:25
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 01:16:25
  12 seconds

  To your knowledge, were the procedures for
  installing the TEMPEST hardware spelled in this guide followed
  during the installation of the C4ISR hardware on the 123s?
  

• 

  Mr. DeKort

  At 01:16:37
  

  No, sir, the majority were not followed.
  

• 

  Mr. Cummings

  At 01:16:37
  16 seconds

  This document, I guess this was the Bible as
  far as the guide is concerned, is that right, as to what you
  are supposed to be doing?
  

• 

  Mr. DeKort

  At 01:16:53
  44 seconds

  Yes, sir. If I could, a little bit of history:
  As I understand it, going back to the beginning, there was some
  disagreement or lack of understanding on Lockheed's part of
  what it meant to do TEMPEST and to have TEMPEST, and as such,
  as it was explained to me, it wasn't bid or at least not
  entirely.
  Well, at some point, Lockheed realized that they had
  classified circuits. As soon as you put these classified
  circuits on a boat, you assume TEMPEST. It is part of the deal.
  It is what happens. So they asked an internal engineer to go
  tell them what they needed to do in order to satisfy those
  requirements, and keep in mind this is after the bid had been
  accepted and they had already started.
  

• 

  Mr. Cummings

  At 01:17:37
  

  So what you are saying is that the bid had
  been accepted.
  

• 

  Mr. DeKort

  At 01:17:37
  5 seconds

  Yes.
  

• 

  Mr. Cummings

  At 01:17:42
  5 seconds

  The requirements were not online to be met
  with regard to TEMPEST.
  

• 

  Mr. DeKort

  At 01:17:47
  

  They literally didn't know what needed to be
  done.
  

• 

  Mr. Cummings

  At 01:17:47
  5 seconds

  The Coast Guard did not know?
  

• 

  Mr. DeKort

  At 01:17:52
  

  No, no, no, Lockheed.
  

• 

  Mr. Cummings

  At 01:17:52
  

  Lockheed.
  

• 

  Mr. DeKort

  At 01:17:52
  8 seconds

  Lockheed did not know, at the time they asked
  for that report internally, exactly what they needed to do to
  satisfy the TEMPEST requirement.
  

• 

  Mr. Cummings

  At 01:18:00
  9 seconds

  That is a very strong statement you just
  made. You understand you are talking about Lockheed Martin, do
  you not?
  

• 

  Mr. DeKort

  At 01:18:09
  

  Oh, yes, sir. You don't--I am sorry.
  

• 

  Mr. Cummings

  At 01:18:09
  12 seconds

  Let me finish.
  You are talking about an organization that is known
  worldwide for producing all kinds of systems in this realm. You
  understand that?
  

• 

  Mr. DeKort

  At 01:18:21
  

  Yes, sir. I am saying they weren't competent.
  

• 

  Mr. Cummings

  At 01:18:21
  

  I am sorry.
  

• 

  Mr. DeKort

  At 01:18:21
  7 seconds

  I am saying they weren't competent, and I can
  explain how they got to that position.
  

• 

  Mr. Cummings

  At 01:18:28
  

  Well, tell me.
  

• 

  Mr. DeKort

  At 01:18:28
  1 minute

  And this was explained to me by Mr. Bruce
  Winterstine who is on one of the panels. I was actually on the
  proposal team for three days.
  During that period when I came in, I had asked Mr.
  Winterstine how the bid was going to be structured, and they
  explained to me that the Moorestown group that primarily does
  Aegis was going to be the lead group and that previously to
  that there had been another group that was going to be involved
  or lead out of Eagan, Minnesota where the C4ISR engineers were.
  And they said, well, we are going to bid it out of
  Moorestown so we can leverage Aegis which strategically is a
  great idea. Aegis is a fantastic system. I understand why you
  would want to leverage it.
  But I told them. I said, look, you people are Aegis
  engineers, okay, and you have a software background. You need
  to go back to Eagan, Minnesota, get the C4ISR experts and have
  them as part of your team.
  And I was told no, we don't need to do that.
  And I asked why, and they said because Aegis is difficult.
  We have been doing it for 30 years. We know what we are doing.
  The C4ISR area is easy. We will figure it out, no problem. We
  don't need that other group.
  Okay, that is literally how it happened. It is a perfect
  storm, sir.
  So when you get into an aggressive bidding situation where
  you have to move out fast, you may have underbid and your staff
  and not in all cases.
  Let me say here that there are some very dedicated people,
  lower level engineers, who worked extremely hard and some who
  did have the background required, but there weren't nearly
  enough of them, okay. So they literally shut out the C4ISR
  experts that they had in the company.
  Of course, sir, Lockheed Martin is the world's largest
  defense contractor. They have over 100,000 employees. They have
  plenty of people, sir, who know how to do this well, and I
  recommended to them that they go back to Minnesota and get
  those people, and they said no. I fought the issue for three
  days, and they removed me from the proposal team.
  

• 

  Mr. Cummings

  At 01:20:15
  17 seconds

  So, basically, what you are saying is that
  the contracted personnel and the Coast Guard personnel working
  on the C4ISR, the system, you are saying they weren't qualified
  to understand TEMPEST, TEMPEST requirements?
  

• 

  Mr. DeKort

  At 01:20:32
  30 seconds

  I am saying, sir, that the people who were
  involved at the time, who were working on the proposal at the
  time I was there, were not. What they were doing is since Aegis
  is a very large command and control system, a very complicated,
  large command and control system, I believe they were trying to
  leverage that expertise.
  The ironic part is C4ISR in these areas since it is all off
  the shelf, compared to Aegis is actually much easier to figure
  out. There is not a lot of complicated engineering. However,
  you still need to know what you are doing.
  

• 

  Mr. Cummings

  At 01:21:02
  5 seconds

  Overall, why do you think the 123s had so
  much difficulty achieving TEMPEST certification?
  

• 

  Mr. DeKort

  At 01:21:07
  1 minute

  Because when you have 100 cables that are not
  the right type, I mean you run into problems.
  TEMPEST can be moderately difficult on a very small craft
  because of very tight space constraints. So a lot of
  engineering and thought has to be put into how do you co-locate
  systems that are red and black. Mr. Atkinson can explain later,
  but basically red and black are just classifications for the
  part of the system that is clear and unencrypted and the part
  of the system that is encrypted and not clear.
  Well, it is very difficult to do on a small ship, but to go
  the extra degree to not actually purchase the equipment that is
  very, very basic to TEMPEST requirements just starts you off at
  a very bad place. In DOD and the State Department, sir,
  everybody used the proper shielded cable. It was the backbone
  or one of the backbone items that you always do, and they
  didn't do it because of cost.
  

• 

  Mr. Cummings

  At 01:22:13
  35 seconds

  The Department of Homeland Security IG
  indicates that the contractor on the 123, Mr. DeKort, used
  aluminum mylar shielded cable as part of the cutter upgrade.
  The IG indicates that these cables met minimum Deepwater
  contract requirements for the shielded cable but do not have
  the mechanical durability of the braided metallic shielded
  cable.
  Do you know which type of cable the ICGS TEMPEST
  requirements document required?
  

• 

  Mr. DeKort

  At 01:22:48
  16 seconds

  Again, sir, this is going to get into an area
  where even I have a TEMPEST background relative to working on
  cryptographic equipment and systems, but you are getting into
  some particulars that are better left to Mr. Atkinson, but I
  can say that.
  

• 

  Mr. Cummings

  At 01:23:04
  4 seconds

  Well, let me ask you this. What type of
  cabling was installed on the 110s prior to their conversion?
  

• 

  Mr. DeKort

  At 01:23:08
  16 seconds

  I have been unable to determine that, sir. I
  was told that they had the braided shielded cable. Not only
  that but Mr. Braden can tell you that the braided shielded
  cable was used on his effort, not on mine or on the 123s, I
  should say.
  

• 

  Mr. Cummings

  At 01:23:24
  

  Now you know Mr. Braden?
  

• 

  Mr. DeKort

  At 01:23:24
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 01:23:24
  

  How did you come to know him?
  

• 

  Mr. DeKort

  At 01:23:24
  6 seconds

  We were both lead. We were both system engineer
  leads of our respective parts in the project.
  

• 

  Mr. Cummings

  At 01:23:30
  

  So you worked with him.
  

• 

  Mr. DeKort

  At 01:23:30
  7 seconds

  There were occasions, sir, that we did. Mostly
  it was in program manager meetings. We actually didn't work
  side by side all the time.
  

• 

  Mr. Cummings

  At 01:23:37
  8 seconds

  Okay. Now did you raise the issue of
  noncompliance of the topside equipment on the 123s with senior
  Lockheed management?
  

• 

  Mr. DeKort

  At 01:23:45
  

  All the way to the CEO and board of directors,
  sir.
  

• 

  Mr. Cummings

  At 01:23:45
  5 seconds

  All the way up to who?
  

• 

  Mr. DeKort

  At 01:23:50
  15 seconds

  The board of directors and the CEO of Lockheed
  Martin. I went up through my functional chain, the program
  management chain, the engineering chains and the ethics chains,
  all the way up to the CEO and board of directors.
  

• 

  Mr. Cummings

  At 01:24:05
  5 seconds

  When you say you went up to the CEO and board
  of directors, what do you mean by that? How did you do that?
  

• 

  Mr. DeKort

  At 01:24:10
  5 seconds

  I sent e-mails to Robert Stevens, at least two
  of them, and the board of directors, I sent a letter.
  

• 

  Mr. Cummings

  At 01:24:15
  

  To the entire board.
  

• 

  Mr. DeKort

  At 01:24:15
  8 seconds

  Yes. Well, I sent it to a specific individual
  who I believe was the ethics officer on the board.
  

• 

  Mr. Cummings

  At 01:24:23
  14 seconds

  Did you discuss with anyone at Lockheed the
  need for noncompliance of the topside equipment with the
  Deepwater contract requirements to be noted on the DD-250s?
  If so, what was the outcome of those discussions?
  

• 

  Mr. DeKort

  At 01:24:37
  23 seconds

  I was told before the 123s, the first one
  delivered, the Matagorda, that every item that I had brought
  forth would either be repaired or clearly called down to DD-
  250s as being a problem. The first time I actually saw the DD-
  250s or was told what they contained was recently, and I
  understand it, the DD-250 for the Matagorda, that item does not
  show.
  

• 

  Mr. Cummings

  At 01:25:00
  5 seconds

  Why was topside equipment so crucial?
  

• 

  Mr. DeKort

  At 01:25:05
  39 seconds

  The topside equipment is all of the externally
  mounted equipment that supports the C4ISR systems. So for the
  communication systems, it is everything on the outside of the
  boat that you would need for the systems, usually antennas. But
  for sensors like radar, it is the radar antenna, and there is
  other equipment up there like amplifiers.
  For other vessels like the NSC and the FRC, there would be
  many, many more systems.
  Basically, the 123s had communications systems, they had
  sensor systems and they had navigation systems. So for those
  systems it was anything that those systems required to operate
  that was attached to the outside of the boat.
  

• 

  Mr. Cummings

  At 01:25:44
  13 seconds

  Let me ask you something. You mentioned a
  moment ago the word, ethics. You said something about an ethics
  complaint or complaints. Did you file complaints?
  

• 

  Mr. DeKort

  At 01:25:57
  6 seconds

  Three, there were three separate ethics
  investigations internal to Lockheed Martin conducted.
  

• 

  Mr. Cummings

  At 01:26:03
  7 seconds

  Were those with regard to the issues that you
  have just mentioned here?
  

• 

  Mr. DeKort

  At 01:26:10
  

  Yes, sir, all of them.
  

• 

  Mr. Cummings

  At 01:26:10
  4 seconds

  Could you just tell us in a sentence or two
  what those were now?
  

• 

  Mr. DeKort

  At 01:26:14
  36 seconds

  The external equipment being able to survive
  the environment, the blind spots for the cameras, the low smoke
  cables and TEMPEST.
  The reason why the non-waterproof radio was not included is
  because, like I explain in my statement, they had actually
  swapped it out right before they delivered the Matagorda. So I
  did not include that in my ethics statement other than to say,
  look, any group who was willing to put a non-weatherproof radio
  in an exposed boat like that, something is wrong and something
  needs to be looked into and especially when they order more
  radios after you tell them it is a mistake. So it was an
  incidental item.
  

• 

  Mr. Cummings

  At 01:26:50
  

  What happened with regard to those
  investigations?
  

• 

  Mr. DeKort

  At 01:26:50
  11 seconds

  The answer for the first one was literally the
  allegations all have no merit. They are all baseless, and we
  are not going to tell you why.
  

• 

  Mr. Cummings

  At 01:27:01
  

  That was a response from the ethics officer?
  

• 

  Mr. DeKort

  At 01:27:01
  19 seconds

  It was from a John Shelton who was the ethics
  investigator for the Lockheed Martin organization out of
  Moorestown.
  And then after that, there were two more investigations.
  Every time they came back to me and said that my allegations
  were baseless, I asked who their boss was.
  

• 

  Mr. Cummings

  At 01:27:20
  

  Then you still tried to go a step higher?
  

• 

  Mr. DeKort

  At 01:27:20
  3 seconds

  Yes, sir.
  

• 

  Mr. Cummings

  At 01:27:23
  11 seconds

  Now would Mr. Braden or anybody else have
  known of those?
  You said you worked with Mr. Braden. Would he have known
  about that?
  We will get to him a little later.
  

• 

  Mr. DeKort

  At 01:27:34
  

  Would he have known that I necessarily filed an
  ethics?
  

• 

  Mr. Cummings

  At 01:27:34
  5 seconds

  Right.
  

• 

  Mr. DeKort

  At 01:27:39
  6 seconds

  Not that I was aware of, no, sir.
  

• 

  Mr. Cummings

  At 01:27:45
  10 seconds

  Did you see any evidence at Lockheed?
  You mentioned a little earlier something about
  underbidding. Is this a conclusion you came to?
  

• 

  Mr. DeKort

  At 01:27:55
  13 seconds

  Yes, sir. That is subjective on my part. It is
  an observation in being in DOD. It is aggressively bid.
  Projects are basically priced to win, and more often than not
  they turn out to be extremely aggressive which is usually a
  politically correct term for underbid.
  

• 

  Mr. Cummings

  At 01:28:08
  4 seconds

  Did anybody at Lockheed ever tell you to just
  get on with it?
  

• 

  Mr. DeKort

  At 01:28:12
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 01:28:12
  

  Is that right?
  

• 

  Mr. DeKort

  At 01:28:12
  12 seconds

  Well, everybody I talked to. I mean my manager,
  my functional manager actually told me and so did some other
  people, but they said, you are doing the right thing here, but
  it is going to come back to bite you.
  

• 

  Mr. Cummings

  At 01:28:24
  

  Say that again. I am sorry.
  

• 

  Mr. DeKort

  At 01:28:24
  6 seconds

  Several people including my manager at the time
  told me that I was doing the right thing, but it was going to
  come back to bite me.
  

• 

  Mr. Cummings

  At 01:28:30
  

  Your immediate supervisor?
  

• 

  Mr. DeKort

  At 01:28:30
  5 seconds

  Yes, sir.
  

• 

  Mr. Cummings

  At 01:28:35
  5 seconds

  He knew you were doing the right thing, he
  told you.
  

• 

  Mr. DeKort

  At 01:28:40
  5 seconds

  That is what he told me, sir.
  Several engineers and program managers on the effort said
  the same thing.
  

• 

  Mr. Cummings

  At 01:28:45
  5 seconds

  Now you said that you left the 123 program,
  is that right?
  

• 

  Mr. DeKort

  At 01:28:50
  

  I was removed from the program, yes.
  

• 

  Mr. Cummings

  At 01:28:50
  5 seconds

  How did that come about and when?
  

• 

  Mr. DeKort

  At 01:28:55
  37 seconds

  Roughly, January or February. I had sent an e-
  mail or letter embedded in an e-mail at the time to the acting
  technical director for the engineering group, saying that I
  wanted to be removed from the project because they were going
  down a road that I just found intolerable.
  However, later on, I met with the VP of the organization, a
  man named Carl Bannar, and he told me everything would be
  resolved, and I said at that point, well, then I would like to
  recall my letter to be removed. If you are going to do the
  right thing, then I want to be part of the right thing. I want
  to see this project to conclusion. But, after that, they
  removed me anyway.
  

• 

  Mr. Cummings

  At 01:29:32
  6 seconds

  My last question, Mr. DeKort, you understand
  that today you are under oath, do you not?
  

• 

  Mr. DeKort

  At 01:29:38
  

  Yes, sir, I am completely aware of that.
  

• 

  Mr. Cummings

  At 01:29:38
  

  You know what that means?
  

• 

  Mr. DeKort

  At 01:29:38
  4 seconds

  It means I should tell you the truth.
  

• 

  Mr. Cummings

  At 01:29:42
  

  And that you are telling the truth.
  

• 

  Mr. DeKort

  At 01:29:42
  3 seconds

  Yes, sir.
  

• 

  Mr. Cummings

  At 01:29:45
  8 seconds

  You understand that all kinds of agencies
  will probably review this transcript and some are probably
  looking at this right now?
  

• 

  Mr. DeKort

  At 01:29:53
  

  I would hope that they do.
  

• 

  Mr. Cummings

  At 01:29:53
  10 seconds

  Would you tell us why you have come forward?
  Did they term you a whistleblower? I guess you know that.
  

• 

  Mr. DeKort

  At 01:30:03
  27 seconds

  Well, at its essence, I did not want a crew to
  come into harm's way down the road and to know that I could
  have done something about it. It is just that simple.
  My background is Navy, State Department, counterterrorism
  for a while. I have been in DOD programs since I was 18 years
  old in one capacity or another, okay. It is just real simple. I
  couldn't have that on my conscience.
  

• 

  Mr. Cummings

  At 01:30:30
  5 seconds

  Thank you very much.
  Mr. LaTourette?
  

• 

  Mr. LaTourette

  At 01:30:35
  27 seconds

  Thank you, Mr. Chairman, and thank you all
  for your testimony.
  Mr. DeKort, I made a note during the latter part of your
  responses to the Chairman that it is your allegation that
  Lockheed Martin didn't do the braided shielded cables, the low
  smoke cables, the proper environmental work on the topside and
  360 degree camera radius because of cost. Is that your
  observation?
  

• 

  Mr. DeKort

  At 01:31:02
  28 seconds

  I was told we didn't do the TEMPEST cables, the
  shielded cables, because of cost. The rest, to some degree, is
  an inference. Their response consistently was we are not going
  to slip schedule. We are not going to have more budget issues.
  And, to some degree because there was a relationship with
  Northrop Grumman that was extremely contentious at the time,
  and I will refer to it as playing chicken, they didn't want to
  fix the issues for any one or all of those reasons.
  

• 

  Mr. LaTourette

  At 01:31:30
  12 seconds

  I guess my question is this. My
  understanding, and we can quibble about the exact value of the
  contract, but this was about a $90 million contract to convert
  these 8 boats from 110s to 123s.
  

• 

  Mr. DeKort

  At 01:31:42
  

  Yes, sir.
  

• 

  Mr. LaTourette

  At 01:31:42
  6 seconds

  Not being in the boat business, I would
  think that the big chunk of change was probably in extending
  the hulls. That is not where the big money is?
  

• 

  Mr. DeKort

  At 01:31:48
  6 seconds

  I have been told that the C4ISR proportionally
  was a larger part of the budget. I could be wrong.
  

• 

  Mr. LaTourette

  At 01:31:54
  8 seconds

  Okay, so let me get to that. Is it your
  understanding that low smoke cables were called for in the
  Deepwater contract that Lockheed Martin bid for?
  

• 

  Mr. DeKort

  At 01:32:02
  

  Yes. Yes, sir.
  

• 

  Mr. LaTourette

  At 01:32:02
  

  But they were not installed?
  

• 

  Mr. DeKort

  At 01:32:02
  4 seconds

  Yes, sir.
  

• 

  Mr. LaTourette

  At 01:32:06
  9 seconds

  Is it your understanding that they weren't
  installed because low smoke cables cost more than the cables
  that were installed?
  

• 

  Mr. DeKort

  At 01:32:15
  

  Yes, sir.
  

• 

  Mr. LaTourette

  At 01:32:15
  5 seconds

  Is that the same with the braided shielded
  cables?
  

• 

  Mr. DeKort

  At 01:32:20
  

  Yes, sir.
  

• 

  Mr. LaTourette

  At 01:32:20
  5 seconds

  And the weatherization or making sure that
  the antenna on the topside is the same as that?
  

• 

  Mr. DeKort

  At 01:32:25
  15 seconds

  It is more supposition because there wasn't. I
  don't know which one of those four issues was the overbearing
  reason for the environmental issue. What I am saying is in the
  others, somebody told me specifically cost. In that one, it was
  any one of the four or all four reasons.
  

• 

  Mr. LaTourette

  At 01:32:40
  13 seconds

  Just so I am clear, it is your testimony
  and allegation that the reason that Lockheed Martin didn't
  comply with the specifications that were in the Deepwater
  contract is because they wanted to install cheaper stuff?
  

• 

  Mr. DeKort

  At 01:32:53
  

  Yes, sir. That is part of it, yes.
  

• 

  Mr. LaTourette

  At 01:32:53
  10 seconds

  You understand they say that is not so,
  right? So we are going to be stuck with a problem here sooner
  or later.
  

• 

  Mr. DeKort

  At 01:33:03
  13 seconds

  Objectively, sir, if you look at the equipment
  that they wound up delivering and the equipment that I wanted
  them to deliver, the equipment that I wanted them to deliver in
  every case is more expensive. So I don't think it is a leap.
  

• 

  Mr. LaTourette

  At 01:33:16
  5 seconds

  I guess I am trying to get expensive. They
  put some cables in.
  

• 

  Mr. DeKort

  At 01:33:21
  

  Right.
  

• 

  Mr. LaTourette

  At 01:33:21
  7 seconds

  You are saying that the cables that the
  contract called for were more expensive. Are we talking on the
  scale of millions of dollars?
  

• 

  Mr. DeKort

  At 01:33:28
  26 seconds

  For the external equipment over, understand,
  sir, because it is system of systems, they were leveraging
  designs. So it very well could be millions of dollars. You know
  the 123 was establishing the pattern. So all the rest of the
  systems, they were contractually directed to make them common.
  So while it appears like a small issue for the 123s,
  understand that it was 49 123s and then every other boat they
  delivered. So it is millions of dollars spread out, yes, sir.
  

• 

  Mr. LaTourette

  At 01:33:54
  26 seconds

  Mr. Atkinson, to you, one, I want to thank
  you for your testimony and your charts because you truly did
  make the TEMPEST system understandable by people as dumb as I
  am, and I appreciate that. I now have an understanding. I
  thought that your explanation was a good one.
  To you, how did you get involved in this project to the
  point where you wrote us 128 or 138 pages of stuff?
  

• 

  Mr. Atkinson

  At 01:34:20
  1 minute

  Sir, I was contacted by the Committee and
  asked to provide expert guidance as to how to query properly
  the Coast Guard and Lockheed Martin because the documents which
  had been produced to date, this is dating a month ago, were not
  answering the questions that the Committee needed answers, and
  I was asked to assist the Committee in demanding from the Coast
  Guard the relevant documents which the Department of Homeland
  Security OIG had failed to pick up on.
  TEMPEST is a very tricky matter. It is very easy for a
  defense contractor to ignore it. It is also very easy for them
  to conceal their ignorance of it or their ignoring of it.
  And I was engaged by this Committee. I have donated my time
  to this Committee to assist this Committee in finding the truth
  and by helping the Committee identify the documents that the
  Committee needed to conduct its business.
  

• 

  Mr. LaTourette

  At 01:35:27
  15 seconds

  Good, I appreciate that, and I think
  everybody on the Committee appreciates your willingness to
  donate and volunteer your time.
  I found the questions in your amendments. I assume those
  are the questions you are talking about that people need to ask
  to get the answers that you think need to be answered.
  

• 

  Mr. Atkinson

  At 01:35:42
  

  Yes, sir. This Committee needs to ask all of
  those questions on the responsible players.
  

• 

  Mr. LaTourette

  At 01:35:42
  28 seconds

  Which brings me to the next part of my
  question, and that is the observations that you make in the
  first 36 odd pages of your testimony relative to the TEMPEST
  tests that were performed and how they were performed and how
  they weren't performed properly and things of that nature. That
  comes about not from an inspection of the systems on the 123.
  That comes about as a result of your examination of the
  documents that were obtained from the Coast Guard?
  

• 

  Mr. Atkinson

  At 01:36:10
  21 seconds

  Yes, sir. I advised the Committee on what
  documents to demand from the Coast Guard. The Coast Guard
  provided some of the documents, albeit reluctantly, to this
  Committee. I examined those documents. I found significant
  inconsistencies in those documents which I brought to this
  Committee's attention in the form of my written report.
  

• 

  Mr. LaTourette

  At 01:36:31
  29 seconds

  Right, and I saw that. But I guess my
  question to you is I don't know what people in the next panels
  are going to testify, but we have three more panels of people
  including the Coast Guard and people from Navy and so forth and
  so on.
  Based upon your field of study, your expertise, what you do
  for a living, if people come forward and testify under oath
  that, in fact, the TEMPEST tests were performed properly and
  that this system passed, is there any way in your opinion that
  they could give such an answer?
  

• 

  Mr. Atkinson

  At 01:37:00
  

  Could I get you to repeat the question, sir?
  

• 

  Mr. LaTourette

  At 01:37:00
  42 seconds

  No. I don't remember the question.
  [Laughter.]
  The question is that as I read your
  testimony, you came to a conclusion that there is no way, but
  that this system wasn't properly tested, and you go to great
  lengths to tell us that.
  I don't know who is coming next. I know who is coming next.
  I don't know what they are going to say until they say it. But
  based upon the documents that you reviewed, is there any way
  that you believe someone could sit before this Committee and
  say that this system, these systems that were installed on the
  8 123s could pass the TEMPEST testing system?
  

• 

  Mr. Atkinson

  At 01:37:42
  

  I will make the answer very straightforward.
  

• 

  Mr. LaTourette

  At 01:37:42
  3 seconds

  I would appreciate that.
  

• 

  Mr. Atkinson

  At 01:37:45
  10 seconds

  If anybody comes before this Committee and
  indicates that these ships protect national defense
  information, they are committing perjury.
  

• 

  Mr. LaTourette

  At 01:37:55
  27 seconds

  That is a very straightforward answer.
  Not to be lawyerly with you but since I don't know the
  TEMPEST tests the way that you do and you went to great lengths
  to talk about how it is appropriate or proper to make the tests
  of the TEMPEST system.
  What I am saying is if we have somebody who comes and says,
  you know what, I tested this TEMPEST system, and it meets the
  standard in the industry, the standard in the military,
  whatever the standard is. Can a person make such a claim based
  upon the knowledge that you have today?
  

• 

  Mr. Atkinson

  At 01:38:22
  23 seconds

  No, sir. All of the documents that were
  provided to the Committee stated in the Coast Guard's own
  documents that they failed the TEMPEST inspections and instead
  of correcting the deficiencies, they either ignored the
  deficiencies or they issue waivers to cover the deficiencies
  up.
  

• 

  Mr. LaTourette

  At 01:38:45
  7 seconds

  Right.
  Mr. Braden, to you, you have installed TEMPEST systems in
  other programs, have you?
  

• 

  Mr. Braden

  At 01:38:52
  8 seconds

  Yes, on the 270 foot cutters, the Legacy
  Cutters and also the design for the 210s and the 383s.
  

• 

  Mr. LaTourette

  At 01:39:00
  10 seconds

  To Mr. DeKort's observation, did you, in
  the installation of those systems, have a specification that
  called for these braided shielded cables?
  

• 

  Mr. Braden

  At 01:39:10
  45 seconds

  The specification is actually a standard, a
  TEMPEST standard, and as was mentioned before, I initially
  relied on a report from a Ms. Jo Agog who was asked to put
  together a list of criteria, if you will, for how a TEMPEST
  installation was to be done.
  The reason that I met with her to go over that document,
  although it was listed as a document for the 123s, is that some
  years ago I was product manager for a line of TEMPEST terminals
  sold to several national security agencies, and as a result I
  was familiar with TEMPEST requirements in a very detailed
  fashion at that time. A number of years went by. I wanted to
  make sure that the requirements had not changed.
  

• 

  Mr. LaTourette

  At 01:39:55
  

  The requirement is braided shielded cables?
  

• 

  Mr. Braden

  At 01:39:55
  13 seconds

  The requirement consists of recommendations. In
  some cases, those recommendations give alternatives. Braided
  shielded cable is the preferred alternative for ensuring
  security with the cabling.
  

• 

  Mr. LaTourette

  At 01:40:08
  5 seconds

  Are you familiar with the cables that were
  installed on the 123 conversions?
  

• 

  Mr. Braden

  At 01:40:13
  

  No.
  

• 

  Mr. LaTourette

  At 01:40:13
  6 seconds

  Do you know what they are called, Mr.
  DeKort?
  

• 

  Mr. DeKort

  At 01:40:19
  

  The aluminum mylar cables.
  

• 

  Mr. LaTourette

  At 01:40:19
  

  Aluminum mylar?
  

• 

  Mr. DeKort

  At 01:40:19
  5 seconds

  Yes, sir.
  

• 

  Mr. LaTourette

  At 01:40:24
  5 seconds

  Mr. Braden, is an aluminum mylar cable one
  of the alternatives that you had, do you know?
  

• 

  Mr. Braden

  At 01:40:29
  20 seconds

  It could be an alternative as long as it was
  confirmed that the aluminum mylar was properly shielded and
  that it gave a full coverage under all conditions. As was
  already mentioned, aluminum mylar is not recommended because of
  durability issues. So it would be more appropriate in internal
  compartments or places where movement isn't used.
  

• 

  Mr. LaTourette

  At 01:40:49
  11 seconds

  Let me ask you this. Do you know anything
  about what the difference is and how much 100 feet of braided
  shielded cable costs as opposed to how much the mylar aluminum
  cable costs?
  

• 

  Mr. Braden

  At 01:41:00
  10 seconds

  No. I couldn't say what the price difference
  is. It certainly is more expensive, but I think the key issue
  is that it is much harder to get schedule-wise.
  

• 

  Mr. LaTourette

  At 01:41:10
  

  It is harder to get because of the
  manufacturer?
  

• 

  Mr. Braden

  At 01:41:10
  7 seconds

  From a schedule, from a schedule standpoint, it
  is not the common ordinary cable that you can buy at CompUSA.
  

• 

  Mr. LaTourette

  At 01:41:17
  

  But you could buy mylar aluminum cable?
  

• 

  Mr. Braden

  At 01:41:17
  3 seconds

  Oh, absolutely, you can get it at almost any
  outlet.
  

• 

  Mr. LaTourette

  At 01:41:20
  

  You worked for Lockheed Martin for 30
  years?
  

• 

  Mr. Braden

  At 01:41:20
  

  Yes.
  

• 

  Mr. LaTourette

  At 01:41:20
  14 seconds

  Have you experienced a situation where the
  company has made a determination on cable that has the ability
  to be detrimental to national security just based on how much
  it costs?
  

• 

  Mr. Braden

  At 01:41:34
  

  I have never seen that before.
  

• 

  Mr. LaTourette

  At 01:41:34
  4 seconds

  What about scheduling?
  

• 

  Mr. Braden

  At 01:41:38
  

  I have seen a lot of pressure on schedule in
  many programs.
  

• 

  Mr. LaTourette

  At 01:41:38
  22 seconds

  Well, I am sure you have seen pressures,
  but where a decision was made. The allegation that Mr. DeKort,
  I think, is making is his testimony is that part of it was cost
  and part of it was not wanting to get behind schedule. They
  were going to get behind schedule on the stuff.
  Have you experienced the same experiences that Mr. DeKort
  has testified to in any of the work that you have done for the
  company?
  

• 

  Mr. Braden

  At 01:42:00
  15 seconds

  On the Deepwater program, I did experience
  intense pressure on both schedule and cost as I stated in my
  opening statement. My project was a fixed price contract, and
  so there was a fair amount of scrutiny on every issue
  associated with cost.
  

• 

  Mr. LaTourette

  At 01:42:15
  20 seconds

  Last question, not to be lawyerly with you,
  but did that pressure on cost and schedule cause you or others
  that you worked with to do something that you knew violated
  either the specs or created a situation on the TEMPEST system
  that was likely, as Mr. Atkinson has testified, to be
  vulnerable to leaking national secrets?
  

• 

  Mr. Braden

  At 01:42:35
  13 seconds

  I didn't allow that to happen. I had a bit more
  oversight of my program than Mr. DeKort did, a little more
  independence in decision-making, and as a result we implemented
  our system totally correctly.
  

• 

  Mr. LaTourette

  At 01:42:48
  

  Were you ever asked to do what Mr. DeKort
  says he was asked to do?
  

• 

  Mr. Braden

  At 01:42:48
  

  No.
  

• 

  Mr. LaTourette

  At 01:42:48
  7 seconds

  Okay, thank you very much, Mr. Chairman.
  

• 

  Mr. Cummings

  At 01:42:55
  30 seconds

  Thank you very much.
  As we go to Mr. Oberstar, in fairness to Lockheed Martin
  and to the contract team, Mr. Atkinson, you said in the answer
  to a question about if someone were to say that TEMPEST
  certification was done here with these boats, that they would
  be committing perjury. Is that what you said?
  

• 

  Mr. Atkinson

  At 01:43:25
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 01:43:25
  7 seconds

  Could it be that maybe they just didn't know?
  I just want to be fair.
  

• 

  Mr. Atkinson

  At 01:43:32
  58 seconds

  Well, let me be very precise on this. In the
  delivery task order that the Coast Guard issued to purchase
  these ships, they listed only one TEMPEST specification, one.
  There is book roughly that thick. It is called MIL Handbook
  232A Red/Black Engineering. I have a copy of it in front of me.
  That was the only document that the United States Coast Guard
  provided to Lockheed Martin as part of the delivery order.
  The United States Coast Guard did not ask for TEMPEST
  ships. They did not ask for these ships to pass classified
  information. I have it right in front of me, documents which
  this Committee has in their possession that irrefutably show
  these ships would not have complied with TEMPEST when they were
  delivered from the contract the Coast Guard gave Lockheed
  Martin.
  

• 

  Mr. Cummings

  At 01:44:30
  

  Thank you.
  Mr. Oberstar?
  

• 

  Mr. Oberstar

  At 01:44:30
  14 seconds

  Mr. Braden, you knew Mr. DeKort during the
  Deepwater program?
  

• 

  Mr. Braden

  At 01:44:44
  

  Yes, I did.
  

• 

  Mr. Oberstar

  At 01:44:44
  7 seconds

  Were you aware of the problems Mr. DeKort
  raised with 123s and how did you come to know about those
  problems?
  

• 

  Mr. Braden

  At 01:44:51
  20 seconds

  Well, I was aware of them because of the weekly
  integration team meetings that we had. Many of the issues on
  all the assets were discussed openly, and presentations were
  given by the various lead members, and we would hear issues
  that were trying to be resolved across the entire program.
  

• 

  Mr. Oberstar

  At 01:45:11
  43 seconds

  Did you discuss at length the issue of non-
  low smoke cabling, cameras that did not provide 360 degree
  coverage, problems with TEMPEST hardware?
  For the record, Mr. Chairman, we have been using this term,
  but it is Telecom Electronics Material Protected from Emanating
  Spurious Transmissions. I may have said that earlier, but I
  think we need to get that on the record because it is a term
  frequently used and it has a very ominous sound to it.
  And non-weatherproof topside equipment, did you discuss
  those matters?
  

• 

  Mr. Braden

  At 01:45:54
  38 seconds

  I had occasion to speak on a couple of those
  matters with Mr. DeKort, and that was as a result of an
  integration team meeting we had where I had presented the
  approach that we were using for the Legacy Cutters for our
  certification and accreditation. I was approached after that
  meeting by Mr. DeKort who quizzed me on what we were doing on
  those issues.
  We did not talk about the radios or environmental issues.
  We primarily talked about cabling and TEMPEST issues, that was
  the nature of the conversation, and I related to him what we
  were doing on my cutters.
  

• 

  Mr. Oberstar

  At 01:46:32
  14 seconds

  Are you aware of the cabling issue on
  aircraft in the 1980s and 1990s where chafing occurred in the
  bundles of cables on aircraft?
  

• 

  Mr. Braden

  At 01:46:46
  

  Yes, I have read about it.
  

• 

  Mr. Oberstar

  At 01:46:46
  

  I am talking about commercial aircraft.
  

• 

  Mr. Braden

  At 01:46:46
  

  Yes, right.
  

• 

  Mr. Oberstar

  At 01:46:46
  

  You are aware of that?
  

• 

  Mr. Braden

  At 01:46:46
  

  Yes.
  

• 

  Mr. Oberstar

  At 01:46:46
  41 seconds

  It was similar mylar aluminum non-shielded
  cable. Chafing that occurred inside aircraft resulted in
  wearing away of the shield, the protective mylar covering that
  then resulted in sparking with surge of very low voltage
  through those wires that then caused fire and caused aircraft
  damage and failure. Are you aware of all that?
  

• 

  Mr. Braden

  At 01:47:27
  

  Yes. Yes, I am.
  

• 

  Mr. Oberstar

  At 01:47:27
  9 seconds

  So you understand what the Coast Guard was
  doing in this case when it did not install the proper cabling,
  right?
  

• 

  Mr. Braden

  At 01:47:36
  26 seconds

  I believe that the analogy you gave is
  appropriate in a hazardous situation. In the implementation of
  network cabling, at least for the assets that I was responsible
  for, all that cabling was routed through benign areas where no
  hazard would occur if the cable had been chafed. But I do
  understand your point.
  

• 

  Mr. Oberstar

  At 01:48:02
  

  Making a leap from the hazard to a different
  kind of hazard of leakage of signal, that is the real issue
  here.
  

• 

  Mr. Braden

  At 01:48:02
  8 seconds

  Yes, I believe so.
  

• 

  Mr. Oberstar

  At 01:48:10
  5 seconds

  You knew about Mr. DeKort raising his
  concerns to Lockheed?
  

• 

  Mr. Braden

  At 01:48:15
  11 seconds

  Well, I learned about them through his YouTube
  video which was widely viewed by many employees, and that is
  where I first learned of his allegations.
  

• 

  Mr. Oberstar

  At 01:48:26
  7 seconds

  You said your program, the upgrade of the 270
  foot cutters, was successful.
  

• 

  Mr. Braden

  At 01:48:33
  

  Yes.
  

• 

  Mr. Oberstar

  At 01:48:33
  

  What cabling did you install there?
  

• 

  Mr. Braden

  At 01:48:33
  32 seconds

  We installed shielded braided cable. In some
  instances, we installed fiber optic cable in instances where we
  went from secure compartments to compartments, and we armor
  jacketed that cable to prevent intrusion in non-secured
  locations on the ship, and we also specified low smoke, zero
  halogen jackets on all the cabling.
  

• 

  Mr. Oberstar

  At 01:49:05
  15 seconds

  Why were you able to install the more TEMPEST
  standard cabling on the 270 Legacy Cutters?
  

• 

  Mr. Braden

  At 01:49:20
  15 seconds

  I can't say explicitly why that was, but I can
  say that the attention of most of the program and the
  management staff was attending to the 123 in terms of its
  schedule difficulties, and more or less I guess I was left
  alone to do it right.
  

• 

  Mr. Oberstar

  At 01:49:35
  8 seconds

  Why would the more secure cabling go onto one
  class of vessel and not on the other?
  

• 

  Mr. Braden

  At 01:49:43
  5 seconds

  I really can't answer that question. I don't
  know why that would be.
  

• 

  Mr. Oberstar

  At 01:49:48
  2 seconds

  But you knew it was happening, and you saw
  the dangers?
  

• 

  Mr. Braden

  At 01:49:50
  33 seconds

  Well, I had heard that it had. It was one of
  the items that had been raised, but I think, as Mr. DeKort has
  stated, these are, during the course of any project, there are
  problems. These problems are usually mitigated or removed as
  the course of the program goes on, and I, my team was very,
  very busy meeting our aggressive schedule. I did not have time
  to go investigate personally whether anyone had taken action on
  these or not.
  

• 

  Mr. Oberstar

  At 01:50:23
  5 seconds

  Were you asked to use aluminum mylar cable,
  and if you had been, would you have used it on the 270s?
  

• 

  Mr. Braden

  At 01:50:28
  

  Where appropriate, I would have used it, yes.
  

• 

  Mr. Oberstar

  At 01:50:28
  18 seconds

  Now I want to come to the testing. There are
  visual tests and instrument tests. Did the 270 cutters pass the
  visual and then, subsequently, the instrument tests?
  

• 

  Mr. Braden

  At 01:50:46
  53 seconds

  We passed the visual on the second cutter.
  The first cutter, we retrofit, and the reason for that is
  that the cabling that we had ordered for the fiber optic
  connections and some of the other connections was a custom
  cable that was being manufactured for us by a firm in Virginia.
  There was a hurricane that hit and pulled the roof off of that
  factory. That caused delays in that cable.
  With the total agreement of the Coast Guard, we went ahead
  with a first installation and planned to retrofit it with the
  higher quality cable at a later date which was subsequently
  done. The visual inspection noted those discrepancies. They
  accepted them on the Interim Authority to Operate, and we did
  replace that cable.
  On the second cutter, we fully passed all visual
  inspections and all subsequent.
  

• 

  Mr. Oberstar

  At 01:51:39
  

  Then subsequent should be the instrumented
  inspection and testing.
  

• 

  Mr. Braden

  At 01:51:39
  8 seconds

  Yes, yes, and I left the program before that
  instrumented test had been performed on the first cutter.
  

• 

  Mr. Oberstar

  At 01:51:47
  13 seconds

  Now the IG at the Department of Homeland
  Security has confirmed that the contractor failed to install
  non-low smoke cabling and failed to install topside equipment
  that would function in all weather conditions. How could that
  have happened?
  

• 

  Mr. Braden

  At 01:52:00
  9 seconds

  I really can't explain how that would have
  taken place.
  

• 

  Mr. Oberstar

  At 01:52:09
  9 seconds

  Did you raise your concerns about the cable
  installation with Lockheed management?
  

• 

  Mr. Braden

  At 01:52:18
  17 seconds

  I had discussed with our technical director,
  some of the issues that had come up in the reviews regarding
  the 123, and I discussed them with him only in the sense that I
  was expressing my concern that they really needed to deal with
  them so that we wouldn't keep talking about them.
  

• 

  Mr. Oberstar

  At 01:52:35
  

  Did you feel that this rose to the level of
  an ethics question and did you file an ethics investigation?
  

• 

  Mr. Braden

  At 01:52:35
  13 seconds

  I didn't feel it did at that time, no.
  I subsequently did file an ethics investigation concern at
  a later date.
  

• 

  Mr. Oberstar

  At 01:52:48
  

  To whom or to which level did you file that?
  

• 

  Mr. Braden

  At 01:52:48
  8 seconds

  The ethics office at Lockheed Martin,
  Moorestown.
  

• 

  Mr. Oberstar

  At 01:52:56
  7 seconds

  What action was taken subsequent to the
  filing of that?
  

• 

  Mr. Braden

  At 01:53:03
  

  I received no response.
  

• 

  Mr. Oberstar

  At 01:53:03
  

  Nothing?
  

• 

  Mr. Braden

  At 01:53:03
  

  Nothing.
  

• 

  Mr. Oberstar

  At 01:53:03
  7 seconds

  Do you know any outcome of any action taken
  later?
  

• 

  Mr. Braden

  At 01:53:10
  25 seconds

  Only supposition on my part. One of the
  concerns I had had to do with an employee morale program that
  had not been followed through with, and I suggested that the
  ethics officer might want to contact our HR department to
  reinstate the employee award program, and about one month after
  that, the award program was reinstated. Now I don't know
  whether that was a result of my conversation or just a normal
  course of events.
  

• 

  Mr. Oberstar

  At 01:53:35
  

  To the best of your knowledge, that is the
  only follow-up that occurred.
  

• 

  Mr. Braden

  At 01:53:35
  5 seconds

  That is the best guess I have, and that is it.
  

• 

  Mr. Oberstar

  At 01:53:40
  8 seconds

  I will have further questions later. Thank
  you very much.
  

• 

  Mr. Cummings

  At 01:53:48
  

  Mr. LoBiondo?
  

• 

  Mr. LoBiondo

  At 01:53:48
  3 minutes

  Thank you, Mr. Chairman, very much. I want to
  commend you for holding this hearing.
  I think it is absolutely imperative that we try to get to
  the bottom of the situation. I am hoping that we are going to
  hear something about the buckling hulls. I may ask that in a
  couple of minutes.
  But I wanted to say that while I think this hearing today
  is very important, I think it is equally important that we not
  lose sight of the fact that the Coast Guard currently operates
  the second oldest fleet of vessels and aircraft in the world,
  and that was the purpose of operation Deepwater. Some of these
  assets are over 60 years old. They are rapidly failing.
  Operations tempo continues to increase. Service-wide readiness
  is now. Hundreds of patrol days are being lost annually.
  Probably, most importantly, the safety of the men and women
  of the Coast Guard who operate these assets are more in danger,
  I think, every day. The success of the Coast Guard's many vital
  missions, I think, are in serious jeopardy.
  As we move through this, I just hope that we can keep in
  sight that it is critically important that the service get
  these aging assets replaced with fully functioning and capable
  assets and as soon as possible.
  I would hope that we remember the videos of the Gulf
  hurricanes of Katrina and Rita and the job that the Coast Guard
  did. However miserably the Federal Government failed, no one
  faulted the Coast Guard. Part of the ability of the Coast Guard
  to perform so admirably at that time was the result of the
  Deepwater program and the upgrade of communications. Thousands
  upon thousands of lives were saved in that whole process.
  I am very pleased with Admiral Allen's decision yesterday.
  I think it was very proactive. I think it will help rein in
  control of this program, and it is a serious situation that
  needs to be fixed. I have a lot of confidence in Admiral Allen.
  I have a very serious regret that Admiral Allen did not get
  his hands on the helm sooner than what he did. I will leave it
  at that.
  I will say to my colleagues that I know this situation
  makes it pretty easy for us to throw our hands up and to walk
  away from Deepwater and to say that it is fatally flawed and it
  has got to be scrapped, but I plead with you not to turn your
  back on the men and women of the Coast Guard, those young men
  and women who are heroes every day, who are putting their lives
  on the line for us in so many different ways and are depending
  on us to come up with a solution that meets the challenges of
  the problems we are hearing about today but still finds a way
  to give them a replacement of the assets. So the safety and
  success of their missions depend on the replacement of these
  assets, and it is our job to make sure that we do the best
  possible.
  Mr. Chairman, I once again commend you and Mr. Oberstar for
  really getting at the heart of this problem, and I hope we can
  get to a point where we can move forward. I thank you very
  much.
  I will later on try to ask some questions about the
  buckling of the hulls. I don't know when that is an appropriate
  time.
  

• 

  Mr. Cummings

  At 01:57:44
  1 minute

  It would probably be good when we have the
  Coast Guard up.
  Let me just say, Mr. LoBiondo, there is not one syllable,
  not one syllable that you just stated that I disagree with. We
  all are trying to get and make sure that the Coast Guard has
  equipment so that they can do the great job like they did down
  in Katrina and the things that they do everyday, the largest
  seizure that they have ever had in their history just recently
  taken place.
  This is all a part of making sure, and I agree with you,
  that we want them to have that equipment, but we want that
  equipment to be safe and we want it to be safe for our
  personnel, Again, as I said a little earlier, we just want
  ships that float, planes that fly, just what we contracted for.
  Before we get to Mr. DeFazio, I just have one quick
  question.
  Mr. Braden, just in follow-up to Chairman Oberstar's
  question, he asked you whether you would use aluminum mylar
  shielded cable, and you said, in certain instances. Is that
  correct?
  

• 

  Mr. Braden

  At 01:59:05
  

  Yes.
  

• 

  Mr. Cummings

  At 01:59:05
  25 seconds

  Let me ask you this. Would you have used the
  in secure situations where we were trying to make sure that
  there was no eavesdropping, the very thing that Mr. DeKort
  complained about? I think that is the question.
  If you had been asked to use that kind of cabling under the
  circumstances that Mr. DeKort complained about, would you have
  used it?
  

• 

  Mr. Braden

  At 01:59:30
  48 seconds

  That is a difficult question to answer because
  the application of the cabling is also dependent on the type of
  compartment that you install it in and whether it is a totally
  shielded and contained and properly grounded compartment.
  What I mean by that, and I am sure Mr. Atkinson can lend
  more detail to this, if I have a piece of equipment that is
  totally contained within a shielded enclosure and it is sharing
  that enclosure with other equipment of its same classification
  level and the same network connection and connectivity. Then if
  that cable is properly grounded, shielded, then yes, the mylar
  cable would be acceptable in that instance.
  

• 

  Mr. Cummings

  At 02:00:18
  

  I see you shaking your head, Mr. Atkinson.
  

• 

  Mr. Atkinson

  At 02:00:18
  1 minute

  Yes, sir. If you build a cabinet that
  contains classified equipment and the cabinet itself is TEMPEST
  certified, you can take an uncertified piece of equipment, put
  it inside this cabinet and it will provide some level of
  protection. A very common thing is to take a printer or a
  plotter or a certain type of computer that there is no TEMPEST
  equivalent of and to encapsulate it inside of a TEMPEST box or
  a TEMPEST shield which now renders it protected.
  We can do the same thing with cables where we can use a
  non-TEMPEST involved cable to hook up something that is put
  into a box which is itself is protected, and we have to be very
  careful what we put into this box because some things we put in
  this box will cause TEMPEST hazards to occur.
  

• 

  Mr. Cummings

  At 02:01:27
  

  From all the records that you have read,
  would you agree with Mr. DeKort?
  

• 

  Mr. Atkinson

  At 02:01:27
  

  In what regard?
  

• 

  Mr. Cummings

  At 02:01:27
  13 seconds

  With regard to his complaints about the
  aluminum mylar shielded cable and that it should not have been
  used?
  

• 

  Mr. Atkinson

  At 02:01:40
  18 seconds

  Yes, sir. I have actually researched the
  cable that he is referring to and found Coast Guard records in
  regards to them and have identified that we are talking at a
  difference of about $20 for the cable.
  

• 

  Mr. Cummings

  At 02:01:58
  

  Mr. DeFazio?
  

• 

  Mr. Oberstar

  At 02:01:58
  

  Would the gentleman yield before he gets to
  his questions?
  

• 

  Mr. DeFazio

  At 02:01:58
  

  I would certainly yield to the Chairman.
  

• 

  Mr. Oberstar

  At 02:01:58
  1 minute

  Thank you.
  I just want to reassure the gentleman from New Jersey who
  served for a long time as the Chair of the Coast Guard
  Subcommittee that our purpose is not a public hanging. We are
  here to try to fix the underlying problems in the Coast Guard's
  management of its contractual responsibilities to deliver on
  the program that the gentleman played a large part in
  authorizing for the Coast Guard just as we have done over many
  years when I chaired the Aviation Subcommittee and the
  Investigations and Oversight Subcommittee to get FAA on the
  right track, learn how to manage multibillion contracts and
  then fund those programs.
  I assure the gentleman that is the purpose of this hearing,
  to go to the core of the problems uncovered here, fix them and
  then report out a robust Coast Guard authorization program so
  they can fix those old ships and have the equipment they need
  to carry out the many responsibilities we have loaded upon
  them.
  

• 

  Mr. LoBiondo

  At 02:03:09
  

  Would the gentleman yield for a moment?
  

• 

  Mr. Oberstar

  At 02:03:09
  

  I yield back.
  

• 

  Mr. LoBiondo

  At 02:03:09
  26 seconds

  Mr. Oberstar, I applaud your efforts. I in no
  way meant to intimate that that was the case, but my concern
  was from some other colleagues who are not on the Committee,
  who have just in casual conversation said to me, we ought to
  just scrap the program.
  

• 

  Mr. Oberstar

  At 02:03:35
  

  No.
  

• 

  Mr. LoBiondo

  At 02:03:35
  

  I don't think they understand what scrapping
  the program would mean.
  

• 

  Mr. Oberstar

  At 02:03:35
  

  I just want to reassure the gentleman. We are
  on the same wave.
  

• 

  Mr. LoBiondo

  At 02:03:35
  

  Okay, we are in synchronization. Thank you,
  Mr. Oberstar.
  

• 

  Mr. DeFazio

  At 02:03:35
  2 minutes

  I would certainly second those comments. Ten
  years ago as Ranking Member on the Coast Guard Subcommittee, I
  became very well aware of and was a strong advocate for
  increased funding and new equipment for the Coast Guard. I had
  one of the antique ships in the Coast Guard serving my district
  for a while, and I am well aware of that problem. But it was
  only after 9/11 that Congress and this Administration began to
  recognize the need, and Katrina certainly highlighted the
  efficiency and valor of the Coast Guard.
  None of that is in question here today, but there are
  extraordinary questions about how we got to this point.
  I guess I am going to direct most of my questions to Mr.
  Sampson, and I will be questioning the buckling and the design
  on the 123s which the former Chairman hoped we would get to. I
  have been waiting to get to it too. I am not much of an
  electronics guy, but I am and have been a lifelong sailor and
  boat owner.
  Mr. Sampson, these will be directed to you, but just keep
  this in mind as I ask you the questions. This is a statement
  that will come after you have left, and I want to give you an
  opportunity to respond to it in your responses to me.
  Mr. James Anton, Vice President, Deepwater Program,
  Northrop Grumman Ship Systems, if you look at page two of his
  testimony, he says: HBJV added a 13 foot extension to the 110
  which was similar to the 9 foot extension they had successfully
  added to the Cyclone Patrol Boats starting in 2000--no mention
  there of the early problems with those extensions, but he does
  say they were successful.
  He goes on further on that page to talk about hull
  deterioration.
  He goes on page three to talk about the ships being
  operated in seas beyond their design capacity.
  He goes on, on page four, to say that an outside
  engineering firm designers and planners engaged by the Coast
  Guard, analysis showed the overall hull structure design was
  adequate under all expected operating conditions up to the
  worst operating condition modeled.
  Then in summary, he says it is premature to speculate on
  the final cause and final way forward.
  I assume you probably don't agree too much with that
  analysis of those remarks.
  

• 

  Mr. Sampson

  At 02:06:10
  1 minute

  No, sir, I don't. There are several different
  perspectives that I would like to address. I haven't had the
  opportunity to read the comment that you are discussing. I
  wrote down some quick notes, so if there is something there
  that I missed, please remind me and I will feel free to
  discuss.
  In regards to the Navy's experience with the PCs, I want to
  make sure it is very clear. CCD, Combatant Craft, emphasized to
  the Coast Guard as well as Bollinger Shipyard because this was
  kind of a misconception among many that Bollinger Shipyard
  built the 110. They built the 170. They did the extension.
  What never appears to come to the surface is the fact that
  Combatant Craft Division was the one that did the entire design
  work for the extension. The failures that occurred were
  actually prior to the ones when the 170s were first built. When
  the PCs were first delivered, they started failing immediately.
  That was a function of, after extensive investigation,
  Combatant Craft came to the position that the 1997 ABS rules,
  high speed craft rules with which the PCs were built to had
  underpredicted what they call a dynamic loading condition. The
  ABS later in their high speed naval craft code did correct this
  based on that experience. It was a known issue to ABS, to
  Combatant Craft, and we made that very clear to Bollinger
  Shipyard.
  

• 

  Mr. DeFazio

  At 02:07:53
  

  Is that what you discussed with Mr. Debu Ghosh
  on 9/3/02?
  

• 

  Mr. Sampson

  At 02:07:53
  

  That was one of the topics, yes, sir. Yes,
  sir.
  

• 

  Mr. DeFazio

  At 02:07:53
  

  Okay, go ahead.
  

• 

  Mr. Sampson

  At 02:07:53
  1 minute

  The Combatant Craft, when they did the design
  work, Bollinger is a great fabricator. However, they did not
  facilitate the engineering. Production details, things of that
  nature, but the actual first extension was not performed by
  Bollinger to my understanding. It was actually by another
  shipyard. So they did not perform the engineering. That
  expertise resided with CCD.
  During that 9/3 meeting with Mr. Ghosh, we emphasized to
  him that this was not a simple evolution, that the design was
  very complex. The PC went from a 5 percent length increase of 9
  feet as compared to the 123 or the 110 which added 13 feet to
  12 percent increase. This is a substantial, substantial
  increase in length.
  As a result of that, the rules that were being used or we
  were told were being used for the 110/123 conversion were
  these, what CCD felt were flawed rules of ABS, the 1997 high
  speed craft code.
  

• 

  Mr. DeFazio

  At 02:09:05
  20 seconds

  So that was probably the point at which you or
  the Navy CCD offered to provide some design and engineering
  support to Bollinger, Northrop Grumman or the Coast Guard on
  the conversions?
  

• 

  Mr. Sampson

  At 02:09:25
  15 seconds

  Yes, sir. Let me make it clear. CCD did not go
  out and necessary try. Combatant Craft is a capital-funded
  program. So, in essence, we are like a contractor. We have to
  go out and sell our services.
  

• 

  Mr. DeFazio

  At 02:09:40
  

  Right.
  

• 

  Mr. Sampson

  At 02:09:40
  

  So I can't voluntarily, but.
  

• 

  Mr. DeFazio

  At 02:09:40
  

  But you made an offer.
  

• 

  Mr. Sampson

  At 02:09:40
  5 seconds

  We informed the parties involved, yes, sir.
  

• 

  Mr. DeFazio

  At 02:09:45
  5 seconds

  I believe it was not particularly spending in
  terms of how much money has been wasted here. What would the
  costs have been?
  

• 

  Mr. Sampson

  At 02:09:50
  5 seconds

  Just for oversight to determine if a problem
  existed would have been $42,000.
  

• 

  Mr. DeFazio

  At 02:09:55
  

  Forty-two thousand dollars?
  

• 

  Mr. Sampson

  At 02:09:55
  

  Yes, sir.
  

• 

  Mr. DeFazio

  At 02:09:55
  8 seconds

  How much did we spend per ship conversion?
  

• 

  Mr. Sampson

  At 02:10:03
  

  A lot more than that, yes, sir. I am not aware
  of the exact number.
  

• 

  Mr. DeFazio

  At 02:10:03
  

  Okay. But that offer was declined.
  

• 

  Mr. Sampson

  At 02:10:03
  7 seconds

  Yes, sir.
  

• 

  Mr. DeFazio

  At 02:10:10
  5 seconds

  Okay. Was there any particular reason given
  for declining that offer?
  

• 

  Mr. Sampson

  At 02:10:15
  

  No, sir.
  

• 

  Mr. DeFazio

  At 02:10:15
  5 seconds

  Okay. Then you went to the Coast Guard.
  

• 

  Mr. Sampson

  At 02:10:20
  

  Well, the order that we talked. We had talked
  with Mr. Ghosh first.
  

• 

  Mr. DeFazio

  At 02:10:20
  10 seconds

  Right.
  

• 

  Mr. Sampson

  At 02:10:30
  1 minute

  Then we talked to the Deepwater Program Office
  up in Washington, D.C. Talked to Ms. Diane Burton and another
  gentleman. For the of me, I can't remember his name, but I
  remember him as a program manager. I don't recall if he was
  specific to the 123 or in total. Explained the situation to
  them.
  Ms. Burton, being a former NAVC employee, I think,
  understood some of our concerns. However, the discussion was
  very short and thank you very much, and we never heard anything
  further from them.
  Northrop Grumman, Combatant Craft did not contact directly.
  However, Bill Moss, who is our point of contact for the
  Carderock Division, did provide a capabilities brief to
  Northrop Grumman to explain what the Navy had to offer them,
  but specific to the 123, nothing was mentioned.
  

• 

  Mr. DeFazio

  At 02:11:30
  

  Do you think that there is any possibility
  that Mr. Anton who raises these other issues was aware of these
  concerns as a Northrop Grumman executive?
  

• 

  Mr. Sampson

  At 02:11:30
  15 seconds

  I have no idea, sir.
  

• 

  Mr. DeFazio

  At 02:11:45
  30 seconds

  Perhaps he will be asked that on the next
  panel under oath and why action wasn't taken.
  I have got to jump ahead here because the time is valuable
  and we have been holding people on time.
  This is, I think, a critical question because there was
  some concern raised earlier by Mr. Mica that we are plowing old
  ground and that, in fact, this has all come out before. Did Mr.
  Casamassina of Navy CCD warn the Coast Guard that it was in
  danger of losing a ship if the hull cracking problem was not
  corrected?
  

• 

  Mr. Sampson

  At 02:12:15
  25 seconds

  I don't have firsthand knowledge of that
  specific conversation or those words were used. I do, however,
  know that Mr. Casamassina and myself talked at length to the
  Coast Guard and Bollinger and explained the severity of the
  situation, and we felt confident that they understood that.
  

• 

  Mr. DeFazio

  At 02:12:40
  10 seconds

  Apparently, the Navy did give us that
  statement that they afforded that warning, but I thought you
  had knowledge of it.
  

• 

  Mr. Sampson

  At 02:12:50
  

  Not that specific phone call.
  

• 

  Mr. DeFazio

  At 02:12:50
  

  You had conversations similar to that with Mr.
  Casamassina.
  

• 

  Mr. Sampson

  At 02:12:50
  

  Yes, sir.
  

• 

  Mr. DeFazio

  At 02:12:50
  9 seconds

  So the risk here was catastrophic failure,
  hull failure, loss of the ship, potentially loss of life?
  

• 

  Mr. Sampson

  At 02:12:59
  

  Potentially, yes, sir.
  

• 

  Mr. DeFazio

  At 02:12:59
  24 seconds

  Then, finally, it is our understanding the
  Coast Guard made two efforts to fix the 123s after the problems
  with the decks appeared. Did the Coast Guard consult with CCD
  on these proposed fixes that you are aware of?
  

• 

  Mr. Sampson

  At 02:13:23
  

  I, as employed by the Coast Guard, did consult
  with CCD but purely on a professional peer level.
  

• 

  Mr. DeFazio

  At 02:13:23
  

  Right.
  

• 

  Mr. Sampson

  At 02:13:23
  34 seconds

  Having worked with them, I consulted them and
  asked them their thoughts or to confirm what I was suspecting
  or believing which they provided to me as a personal interest
  that, yes, these fixes were not going to work. However, there
  was no direct involvement, to my knowledge, between CCD and
  parts.
  

• 

  Mr. DeFazio

  At 02:13:57
  11 seconds

  Did you report that up the chain, that these
  proposed fixes were not likely to work according to your
  consultation with CCD?
  

• 

  Mr. Sampson

  At 02:14:08
  

  Absolutely. My command, the Maintenance and
  Logistics Command Atlantic voiced those concerns repeatedly.
  

• 

  Mr. DeFazio

  At 02:14:08
  

  But they went ahead anyway.
  

• 

  Mr. Sampson

  At 02:14:08
  5 seconds

  Yes, sir.
  

• 

  Mr. DeFazio

  At 02:14:13
  

  And they didn't work.
  

• 

  Mr. Sampson

  At 02:14:13
  

  Correct.
  

• 

  Mr. DeFazio

  At 02:14:13
  27 seconds

  Well, so none of the efforts to fix the 123s
  succeeded. Would you then disagree with Mr. Anton's statement
  that it is premature to speculate on the final cause and the
  way forward of the failure?
  You think we know the cause?
  

• 

  Mr. Sampson

  At 02:14:40
  30 seconds

  I think there is a strong case to be made that
  the cause is due to the hull strength or the hull girder issue.
  The localized failures that have occurred on deck and some
  other places were, in my opinion, a result of the modifications
  where they just moved stress from one location to another. The
  actual initial failure of the Matagorda was a clear classical
  failure due to bending.
  

• 

  Mr. DeFazio

  At 02:15:10
  50 seconds

  Mr. Chairman, I want to thank you for the
  generous grant of time and for your leadership on this issue.
  I do want to say in closing that Mr. DeKort in his
  testimony said that and he was referring to a number of things
  here, that these were actually informed and deliberate acts. I
  hope if through our investigation we find that any of these
  acts were informed and deliberate, that both defrauded the
  taxpayers and jeopardized national security and potentially
  jeopardized the health and safety of our Coast Guard crews,
  that we will be providing all of that to the Justice
  Department. I hope that maybe some of those responsible could
  enjoy Federal hospitality.
  

• 

  Mr. Cummings

  At 02:16:00
  15 seconds

  Thank you very much.
  I take it, Mr. Sampson, that you did not believe.
  I have seen the ships. I saw them last Thursday, and I can
  tell you they are a mess.
  

• 

  Mr. Sampson

  At 02:16:15
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:16:15
  

  Have you see them?
  

• 

  Mr. Sampson

  At 02:16:15
  6 seconds

  Yes, sir. I have done extensive investigations
  and inspections on those craft.
  

• 

  Mr. Cummings

  At 02:16:21
  13 seconds

  The amazing thing is that I thought we were
  talking about a big ship. Some of these boats are not as big as
  some yachts.
  

• 

  Mr. Sampson

  At 02:16:34
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:16:34
  19 seconds

  It is incredible, and they so happen to be in
  Baltimore where I live. So I happen to be there, and I wanted
  to go see them.
  But, anyway, I am sorry, Mr. Gilchrest.
  

• 

  Mr. Gilchrest

  At 02:16:53
  2 minutes

  Thank you very much, Mr. Chairman.
  I too want to make sure that that Coastie who is today
  similar to Gene Taylor 30 years ago, whether they are breaking
  ice to McMurdo. Maybe 10 years ago, I don't know when Gene
  Taylor was in the Coast Guard. When those are Coasties are
  breaking ice to McMurdo Station in the Antarctic on that ship,
  when they are at Cape Disappointment rescuing people, when they
  are in the Gulf of Alaska because a crab boat is in trouble, or
  the Chesapeake Bay, or these guys are out there determining
  international standards at the IMO in London, it is an
  extraordinary service.
  But I do remember a time 40 years ago when I was using an
  M-14 in Vietnam. It worked every time we pulled the trigger.
  Sadly, we had to pull the trigger occasionally. Rain, monsoons,
  heat, mud, you name it.
  We were given an M16, about February of 1967, and it didn't
  work. Who was responsible for that?
  In 1967, these young men, like we have now in Iraq and in
  Afghanistan, assume the chain of command is competent.
  We are here to praise the stunning abilities of the Coast
  Guard people, and we also want to find out the chain of command
  that whomever and wherever it is that changed the basic
  physics. They changed the physics of the boat when they wanted
  to put in some add-ons which would have made it more
  serviceable under certain conditions. But they changed the
  physics of the boat.
  So who was responsible for proving that chain up the chain
  of command including everybody and the contractors?
  I am glad the Chairman is holding this hearing. We are not
  here to unfairly reprimand anybody, but we would like to know
  how this came about that we have eight boats now that don't
  work.
  Mr. Sampson, did the Coast Guard consult with the Navy
  engineers when reviewing the proposed design of the 110 foot
  patrol boat conversion?
  

• 

  Mr. Sampson

  At 02:19:26
  16 seconds

  No, sir, they didn't necessarily consult us.
  We at CCD did notify them of our experience with the PC and the
  lessons learned, and we shared that with the Coast Guard
  voluntarily.
  

• 

  Mr. Gilchrest

  At 02:19:42
  

  There was a basic consultation that took
  place.
  

• 

  Mr. Sampson

  At 02:19:42
  24 seconds

  Yes, sir. On that 3rd of September with Mr.
  Ghosh in addition to the Deepwater Program Office, we shared
  that we had extensive knowledge and experience with this type
  of design and modification and that they were at very high risk
  of failure if they were to proceed.
  

• 

  Mr. Gilchrest

  At 02:20:06
  

  What were the specific concerns that would
  cause the high rate of failure if they proceeded?
  

• 

  Mr. Sampson

  At 02:20:06
  56 seconds

  As I stated earlier, that ABS 1997 high speed
  craft rules, that uses two methods of prediction for the
  strength of the boat. One is a static-loading. One is a
  dynamic-loading. The 1997 rules underpredicted the dynamic
  loading. As a result, the static was a driving factor according
  to that rule set.
  Combatant Craft, through investigation, realized that that
  was actually not the case, and they used another classification
  society's rules in conjunction with some additional
  calculations to determine the actual correct strength that the
  vessel had to be. Because of that, we cautioned the Coast Guard
  extensively because we knew they were going to use that, the
  old set of ABS rules.
  

• 

  Mr. Gilchrest

  At 02:21:02
  

  Did they take your caution seriously?
  

• 

  Mr. Sampson

  At 02:21:02
  18 seconds

  I felt, we felt that they understood our
  concerns. I do not know what they did with our information. Mr.
  Ghosh certainly tried to, I think understood, and he tried to
  hire us to provide.
  

• 

  Mr. Gilchrest

  At 02:21:20
  

  But you don't know if those recommendations
  were followed through by anybody in the Coast Guard?
  

• 

  Mr. Sampson

  At 02:21:20
  50 seconds

  Eventually, they weren't, sir, because the
  boats were built as proposed.
  We also shared--real quick, sir--that when you lengthen a
  boat, those bending moments, that static bending and dynamic
  loading, those are affected primarily by the length of the
  vessel, and the dynamic also has a speed component. But the
  length of the vessel is a significant contributor to that
  bending force. And so, when you lengthen a boat by 12 percent,
  that is a tremendous length increase for that size craft, and
  so you have to add strength to the vessel, vessels that are
  high speed craft such as the 110.
  

• 

  Mr. Gilchrest

  At 02:22:10
  

  So strength was not added to the vessel?
  

• 

  Mr. Sampson

  At 02:22:10
  

  No, sir, not at all.
  

• 

  Mr. Gilchrest

  At 02:22:10
  10 seconds

  Can you just tell us--I know my time is up,
  why wasn't strength added to the vessel if those
  recommendations were made?
  

• 

  Mr. Sampson

  At 02:22:20
  19 seconds

  The only thing that I can speculate, sir, is
  that the static condition was a driving factor, and they felt
  they complied with that static condition. Other than that, I
  have no idea, sir.
  

• 

  Mr. Gilchrest

  At 02:22:39
  

  I see. Thank you very much.
  Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:22:39
  4 seconds

  Thank you.
  Mr. Taylor?
  

• Mr. Taylor

  At 02:22:43
  1 minute

  Thank you, Mr. Chairman.
  Mr. Sampson, I want to follow up on what you were just
  touching on because I have heard now three different
  explanations for the 110 problems.
  First, I was told they never did hogging and sagging
  calculations. Then I was told, yeah, we did them, but we didn't
  figure in fatigue. Yeah, we figured in fatigue, but we
  misjudged the steel.
  Apparently, the initial hull had some high tensile steel.
  Apparently, it got a Made in U.S.A. waiver. I am told it was
  from England, but I am told no one ever tested it on the
  initial building of the hull and that, like you said, when the
  hull is only 110 feet and you stress between two waves, you
  didn't have the hogging and sagging problem. You make it 123
  feet, get between two waves, and you have substantial problems.
  My question to you is since I am getting so many different
  stories from people who ought to hopefully be telling me the
  truth and since we have now got eight ruined ships, $40 million
  down the drain. To my knowledge, no one has been fired. To my
  knowledge, no one has claimed responsibility. I can assure you
  if this had happened in the private sector, a bunch of people
  would have been fired by now.
  So what do you think happened?
  

• 

  Mr. Sampson

  At 02:24:05
  

  Sir, you bring up some good points.
  

• Mr. Taylor

  At 02:24:05
  30 seconds

  I also want to say, Mr. Cummings, if you owned
  a crew boat, a boat that takes people out to an off-shore oil
  rig and you wanted to stretch that crew boat and still have it
  certified to carry passengers, the Coast Guard would have run
  the tests before they ever recertified that vessel again. So it
  is absolutely crazy that something they do every day in judging
  the private sector, they apparently didn't do for themselves,
  and no on has ever answered that question.
  

• 

  Mr. Sampson

  At 02:24:35
  29 seconds

  Sir, I think to clarify, I think there are
  some issues there that may have been crossed over. The metal
  fatigue and the material properties were things that were
  subsequently looked at well after the Matagorda failed. Those
  were things that were addressed after the fixes did not work in
  the hopes to try to figure out exactly what transpired.
  

• Mr. Taylor

  At 02:25:04
  6 seconds

  To the point I was told they never looked at
  metal fatigue in the beginning when they were running the
  hogging and sagging calculations. Is that true?
  

• 

  Mr. Sampson

  At 02:25:10
  5 seconds

  That, I am not aware of, but I would suspect
  that is the case.
  

• Mr. Taylor

  At 02:25:15
  5 seconds

  Did they run hogging and sagging calculations
  up front just like they would have if a crew boat operator had
  gone to them, wanting to stretch their vessel?
  

• 

  Mr. Sampson

  At 02:25:20
  15 seconds

  Mr. Ghosh would probably be the best one to
  answer that, sir. My understanding is they did, and there were
  some errors in those calculations, but he would give you a
  definitive answer on that, sir.
  

• Mr. Taylor

  At 02:25:35
  20 seconds

  Did anyone ever test the steel that I am told
  came from England which probably would have required a Made in
  U.S.A. waiver and that, if we did that, we undoubtedly paid a
  premium for it in the first place to see whether or not it was
  up to the spec that we probably paid the premium for?
  

• 

  Mr. Sampson

  At 02:25:55
  45 seconds

  Okay, to my understanding, no steel was
  imported from England.
  The initial design, both the 110s and the 170s, all those
  craft were designed by a British company called Vosper
  Thornycroft. They had a material requirement in their design of
  what they call British steel 4316. It is a British standard
  saying this is a material property.
  It is my understanding, and Bollinger may be able to
  correct this, but it is my understanding that they had
  specifically mill runs performed by U.S. steel mills and all
  that material made to that British standard and delivered to
  Bollinger Shipyard for construction of the 110. Whether or not
  they had any material testing done at that time, I am not aware
  of.
  

• Mr. Taylor

  At 02:26:40
  8 seconds

  To the point, what do you think happened? I am
  game now for the fourth opinion of why these ships failed and
  yet no one is responsible.
  

• 

  Mr. Sampson

  At 02:26:48
  21 seconds

  Sir, I think there is a combination of things,
  but I believe that the longitudinal bending. In real simple
  terms--and I will try to make this brief--when you take a hull
  and you put it in the water, it has to be designed to handle,
  to go in through waves and over waves.
  

• Mr. Taylor

  At 02:27:09
  

  Mr. Sampson, I have stretched a steel boat, my
  boat. So I am familiar with all of that.
  

• 

  Mr. Sampson

  At 02:27:09
  1 minute

  Okay, okay. You have to design for both of
  those loading conditions. The loading conditions that were
  initially assessed by the 1997 ABS rules underpredicted those
  loads that the boat would have to meet.
  It may have been the FE-I do not know. Mr. Ghosh may be
  able to provide the information.
  But we understood, as Combatant Craft, that those rules
  were faulty. We did our own simplified investigation to
  determine that the loadings would have been much more
  significant to require, to provide strength of that hull
  sufficient enough to withstand the operations.
  There were other issues later on where the specification,
  the performance specification came into question. I have read
  the performance specification that was issued. To me, it is
  very clear that the intent was to have a platform that was as
  capable as the 110 WPB at the end of the conversion. That did
  not happen, obviously.
  At all the times of the failures of the 123s, we had 110s
  out and operating that suffered no hull damage whatsoever.
  

• Mr. Taylor

  At 02:28:30
  

  For the record, who did you notify?
  

• 

  Mr. Sampson

  At 02:28:30
  26 seconds

  I notified ELC, Mr. Debu Ghosh. I notified the
  Deepwater Program Office, Ms. Diane Burton and another
  gentleman who I cannot remember his name. I notified Bollinger
  Shipyard, Dennis Fanguy and anybody else would listen. But
  those were the three primary contacts that we notified.
  

• Mr. Taylor

  At 02:28:56
  17 seconds

  For the record, did any of them change their
  plans in any way or did any of them recalculate the tests to
  address your concerns?
  

• 

  Mr. Sampson

  At 02:29:13
  13 seconds

  At the time, sir, I was with CCD. The Coast
  Guard, I was not intimate with the Coast Guard. I do not know
  what they did.
  Mr. Ghosh took the matter very seriously.
  I am not sure
  what he did.
  

• Mr. Taylor

  At 02:29:26
  

  Okay.
  Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:29:26
  

  Before we get to Mr. Diaz-Balart, let me just
  ask you one question. I would direct this to Mr. Braden and to
  

• 

  Mr. Sampson

  At 02:29:26
  1 minute

  
  Yesterday, the Coast Guard announced its intention to bring
  the systems integration functions back in-house. How do you
  think this changed process will help?
  I mean do you think it will help at all? Do you think we
  will still have the same kind of problems?
  I am following up on what Mr. Taylor just talked about. I
  am just wondering. Nobody has been fired to my knowledge
  either, and it seems like this is a situation that all parties
  involved have some responsibility and some issues.
  But I am just wondering. He has made this announcement
  apparently in an effort to try to cure the situation and make
  it better for the future. I was just wondering are you familiar
  with that, what he said?
  

• 

  Mr. Braden

  At 02:30:30
  

  Yes, I am.
  

• 

  Mr. Cummings

  At 02:30:30
  

  Mr. Braden, do you have an opinion on that?
  

• 

  Mr. Braden

  At 02:30:30
  1 minute

  Well, I feel, and I think this was mentioned
  previously, that the Coast Guard is ill prepared at this time
  to provide quality systems engineering and integration
  oversight. I have heard from the members that there are efforts
  to beef up their staff, to hire the necessary people. I think
  that is going to be a major challenge for them to do that.
  I think they will still need to rely heavily on industry to
  provide that guidance. I believe, personally, that oversight,
  meaning an independent assessment of what the requirements have
  been agreed to, is the biggest key to success on the program.
  In the past, as a performance-based requirement, there is a
  good bit of subjectivity as to how you achieve the final
  performance goal, and that subjectivity was, I would say, a
  major point of contention between the Coast Guard, in my direct
  experience on the 270s, and ourselves in terms of debating
  probably needlessly and sometimes seemingly endlessly as to
  someone's interpretation. And I think by getting clear
  requirements and then having oversight of those requirements,
  that would go a long way towards making sure that things get
  done exactly right the first time.
  

• 

  Mr. Cummings

  At 02:32:03
  21 seconds

  It sounds like, Mr. Braden, that you are very
  strong with regard to your standards, and you are not going to
  bend, no pun intended, but you are not going to bend.
  It sounds like to me basically they let you alone, and you
  did what you had to do. Apparently, as we see now, it worked
  out fine. That is what it sounds like now.
  

• 

  Mr. Braden

  At 02:32:24
  40 seconds

  Well, I will echo what I have heard previously
  too, and that is that I had the utmost respect for the people
  who put their lives on the line daily in the Coast Guard, and
  it was my intention to be certain that we delivered the best
  quality system we possibly could.
  And I found that, in some instances, I saw in other areas
  of the program, sort of an adversarial relationship between the
  Coast Guard and the contractors. I tried to nurture a friendly,
  cooperative, open discussion, and that is how we did finally
  nail some of the issues we had to contend with in terms of
  interpretation.
  

• 

  Mr. Cummings

  At 02:33:04
  

  Mr. DeKort, same question.
  

• 

  Mr. DeKort

  At 02:33:04
  17 seconds

  We had a different experience, Mr. Braden and
  I. If I had the ability to be that independent and to have that
  relative authority, we would not be talking right now.
  

• 

  Mr. Cummings

  At 02:33:21
  

  Mr. Sampson?
  

• 

  Mr. Sampson

  At 02:33:21
  

  Sir, I guess my FE
  

• 

  Mr. Cummings

  At 02:33:21
  12 seconds

  See, you have a unique perspective, Mr.
  Sampson. You had the Navy and the Coast Guard experience.
  

• 

  Mr. Sampson

  At 02:33:33
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:33:33
  14 seconds

  What we have been hearing is that the Navy is
  well equipped to do a lot of these things and maybe the Coast
  Guard isn't there yet.
  But you go ahead. I am listening.
  

• 

  Mr. Sampson

  At 02:33:47
  

  I love the Coast Guard, sir, through and
  through.
  

• 

  Mr. Cummings

  At 02:33:47
  

  We do too.
  

• 

  Mr. Sampson

  At 02:33:47
  1 minute

  It is the best organization out there. I think
  the Coast Guard, one of the more trying aspects that the Coast
  Guard has is resources.
  If you look at the Navy, it is a huge organization, lots of
  money, lots of human capital to take care of many of the
  challenges that are put before them.
  With the Coast Guard, now this is Scott Sampson's personal
  opinion, but the Coast Guard, we are asked to do more and more
  and more. I had to give up billets out of the section that I
  supervise to provide people for Pat Forswa, the 110s that we
  have overseas supporting our men and women over there. I have
  to give up a lieutenant JG for an admiral's billet that doesn't
  get replaced.
  We are continuing to do more and more. I have a friend of
  mine who is in the acquisition office, that puts in routinely
  12 to 14 hour days including weekends, and he doesn't get to
  see his wife much because we ask more and more of our folks,
  and we are never provided or very rarely are we provided the
  men, the resources to try to get those tasks accomplished.
  While I have the utmost in confidence in the Commandant's
  direction and leadership, I think this is going to be a
  significant challenge for the Coast Guard to provide that
  additional oversight that is going to be placed upon us.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much.
  Mr. Diaz-Balart?
  

• 

  Mr. Diaz-Balart

  At 02:35:36
  

  Thank you, Mr. Chairman. I actually really
  don't have a question, more just a couple of comments.
  First, I want to thank you, Mr. Chairman, for what I think
  has been a very important hearing, and I want to thank also
  those of you who have come forward for spending all this time
  with us. I think it has been very helpful to allow us to
  understand what the issue is.
  Secondly, when I was listening to Mr. Taylor, I share his
  concern and his frustration, the fact that what he said, and I
  am paraphrasing, Mr. Taylor, but about the fact that nobody has
  been fired. We shouldn't be surprised, either Mr. Taylor and I,
  that in the public sector, it is very hard to fire people
  anyway which is one of the problems with creating a larger
  bureaucracy is you can never get rid of them. But it is clearly
  frustrating for him and for me, and I don't think it should
  surprise us.
  Number three is that I think it is very important, and you
  all have not done that, but it is very important that anybody
  listening doesn't. When we speak about the Coast Guard or
  Lockheed Martin, it is not the Coast Guard or Lockheed Martin.
  There may be some individuals that have made mistakes, and that
  is not the entire entity. You all understand that. We
  understand that. I just want to make sure that everybody else
  understands that.
  Lastly, Mr. Chairman, I just want to thank you and also
  Chairman Oberstar for your statements to Mr.
  LoBiondo's
  question or comments and your commitment to that because, as
  Mr. Sampson just stated, the Coast Guard has always been
  underfunded which is why this project, this Deepwater project
  is so important. But, obviously, it is important not only that
  it receives a funding but that it is funded and the money is
  spent efficiently and effectively. That is the purpose.
  I want to thank both of you gentlemen for clarifying that.
  Again, nothing that we didn't expect to hear from you, but it
  is always, I think, important that we thank you for that strong
  statement of support for an efficient, effective Deepwater
  program that does protect our national interests, our national
  security and obviously the men and women who perform.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Would the gentleman yield?
  

• 

  Mr. Diaz-Balart

  At 02:35:36
  

  Yes.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Just briefly for an observation, I have
  served on the Coast Guard Subcommittee since I came to Congress
  32 years ago. We have added 27 new functions to the Coast Guard
  in those years, but the Congress and administrations,
  Democratic or Republican, have not given the Coast Guard the
  funding they need to carry out those functions. That is what I
  am talking about. That is the frustration. By damn, we are
  going to work on that and do that in this Congress.
  

• 

  Mr. Diaz-Balart

  At 02:35:36
  

  I thank the Chairman if I may claim my
  time back. I thank the Chairman for that, for his commitment. I
  know that. I have been in conference with you not that many
  years obviously, and I have seen that commitment. Clearly, the
  Coast Guard deserves the funding.
  I think one of the problems that I am seeing here from Mr.
  Sampson's statement. Again, I don't want to paraphrase. I am
  paraphrasing what you said.
  One of the issues that may be unfolding here is that yes,
  frankly, with this Deepwater program, we have finally funded
  some assets for the Coast Guard that frankly since probably the
  Coast Guard has been underfunded for so many years, they just
  weren't ready for it, no excuse there.
  But, anyway, I just wanted to make those statements.
  I wanted to thank the Chairman of the Subcommittee and the
  Chairman of the full Committee for allowing us this
  opportunity. I think it has been very fruitful. Thank you.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Will the gentleman yield to me on your
  time?
  

• 

  Mr. Diaz-Balart

  At 02:35:36
  

  Yes, sir. I give you the rest of my time.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Thank you very much. I just wanted so I
  don't have to drag out this panel.
  Mr. Atkinson, could you clarify your $20 remark? I have
  asked Mr. DeKort and Mr. Braden about it. I thought I heard you
  say, and I don't want to put words in your mouth but the
  difference between the mylar aluminum and the braided shielded
  was 20 bucks. Is that 20 bucks a foot, 20 bucks a mile?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  No, sir. The Coast Guard, excuse me.
  ICGS purchased a cable made by a company called Cable
  General. This was an ethernet cable similar to what many of you
  have in your offices, but it was a heavier duty version of that
  cable.
  Now this cable is made in two formats. It is called a ship
  LAN cable designed for local area networks aboard ships. The
  first version is an unshielded twisted pair with a mylar shield
  only. There is also another version which is only slightly more
  expensive, which is a double shielded braid and foil. On the
  ends of this cable is a connector made by Sentinel Connector
  Company or Sentinel Connector Systems, Inc., which the actual
  connector itself was developed by Lockheed Martin.
  The price difference between the shielded cable and the
  mylar shielded cable or the double shielded cable, if you will,
  and the mylar shielded cable, the total cost for a 10 foot
  cable that is mylar shielded is about $7.50.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  For 10 feet?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  For a 10 foot cable.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Anybody have any idea how many feet of
  cable we are talking about in the 110 conversions? Mr. DeKort?
  

• 

  Mr. DeKort

  At 02:35:36
  

  There are almost 400 cables in total. I don't
  know how many there are, but I would imagine several dozen. But
  again, sir, that would need to multiplied times 49 times the
  rest of the vessels because it is a system of systems.
  If I could because I understand why you are going down, if
  I could clarify really quickly, when you have a program where
  you bid $4 million per boat and you know you are over-running
  double that and it is $8 million per boat, it is very possible
  that they thought their potential profit literally was in five
  cents per cable.
  Also, though, by the time these issues had snowballed, I
  believe Lockheed Martin, part of their thought was this is
  embarrassing. So, at some point, they just didn't want this to
  come out because how avoidable it was and how crucial these
  issues were. So it is the combination, sir, of the costs,
  schedule as well as not wanting to necessarily come out.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  I got you. I thank you and Mr. Diaz-Balart
  for yielding. Thank you.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. Hall?
  

• 

  Mr. Hall

  At 02:35:36
  

  Thank you, Mr. Chairman and Chairman Oberstar.
  I thank you for the patience of all our witnesses and our
  other witnesses. I will keep this really brief.
  Mr. Sampson, I gather you are, among other things, a Naval
  architect.
  

• 

  Mr. Sampson

  At 02:35:36
  

  Yes, sir, that is correct.
  

• 

  Mr. Hall

  At 02:35:36
  

  When one builds a 110 foot vessel or any vessel,
  I would guess that the Naval architect tries to make it of the
  ideal proportions to begin with. In other words, you are going
  to have the right proportion of length overall, beam draft,
  deck strength and so on and so forth, and the boat is designed
  to handle varying sea states in its existing proportion.
  There have been a number of famous cases of failures or
  believed failures, perfect Storm being one, for instance, where
  a fishing boat was altered without consulting a Naval architect
  in that case and wound up, some people think, capsizing because
  it had lockers installed on the deck that caught a sea that
  came transverse and pushed hard on it and it just rolled over.
  We will never know about that.
  But my question is when you take a 110 foot boat that was
  originally designed to be the ideal proportions, aren't you
  taking it off of its ideal proportions by lengthening it,
  almost by definition?
  

• 

  Mr. Sampson

  At 02:35:36
  

  Absolutely, yes, sir. That was our, one of our
  main points, that this was such an elementary decision point or
  observation, that if you lengthen a vessel, the midship section
  modules or the strength of that vessel has to be increased.
  This is a high speed craft. You don't have that much
  reserve margin built into an existing craft or you would
  overdesign it, and it wouldn't make the speed. So to make the
  assumption that the craft did not have that or that had that
  reserve strength.
  

• 

  Mr. Hall

  At 02:35:36
  

  That is what I thought.
  I just noticed in some of the testimony, the written
  testimony of the later witnesses that the design specs call for
  it to operate up to Sea State 5, 8 to 13 foot seas. I used to
  have a 39 foot cutter myself that I sailed in seas bigger than
  that.
  That seems to me rather like a low threshold for a ship
  that may have to operate, or a boat. It is a ship to me. But
  anyway, it is a boat that may have to operate under
  considerably more extreme weather and does probably.
  On top of everything else, I am just curious how one could
  not overbuild in this situation when you know you are cutting a
  boat open and then sending it. Has that occurred to you?
  

• 

  Mr. Sampson

  At 02:35:36
  

  Absolutely. There are several things that are
  associated with that performance specification and later
  information that I was told in regards to the requirements.
  We were always verbally told that it was designed to be the
  same capability as a 110, just a 123, so that a 110 for
  purposes of the operators. Mr. Ghosh has commented to me, and
  he will probably confirm this is that the 110 is, in essence,
  unrestricted. It can go out and operate in a sea that normally
  the human will give up long before the ship.
  

• 

  Mr. Hall

  At 02:35:36
  

  Right.
  

• 

  Mr. Sampson

  At 02:35:36
  

  They will pull the throttles back. With the
  123, after the failure, it was explained by Mr. Jacoby that the
  design spec was actually poorly written and that the
  requirements that were being interpreted were actually lower
  than what we felt was operationally needed.
  

• 

  Mr. Hall

  At 02:35:36
  

  Thank you.
  Mr. Atkinson, I just wanted to ask you. I understand that
  by Coast Guard accounts the Matagorda was given its ATO in
  January of 2005 and then later that year had a visual
  inspection. Do you know if the deficiencies identified in that
  visual inspection were severe and was it appropriate that they
  were waivered?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  No, sir. None of the items that were detected
  in the visual inspection should have been waivered. By issuing
  these waivers, they quite literally were covering up
  significant vulnerabilities. While our enemies may not have
  directly exploited those vulnerabilities, they did nonetheless
  create vulnerabilities that the Coast Guard decided were
  acceptable.
  

• 

  Mr. Hall

  At 02:35:36
  

  What is the risk to national security if a
  TEMPEST certifications testing process is not done properly and
  the vessel operates and broadcasts to other vessels?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  National security, a foreign government will
  be able to access our classified communications not just on a
  one ship basis but more of an everything our Country has. If
  they can a detect our codes, our ciphers, our hopping patterns,
  our communications, they can exploit that not just on the
  Matagorda but on everything in our inventory. You give them the
  keys to the kingdom when you breach TEMPEST.
  

• 

  Mr. Hall

  At 02:35:36
  

  Let them in. Thank you very much.
  Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you.
  First of all, I want to thank all of you for your
  testimony. I was just sitting here, thinking about what you all
  have said, and I am so glad that we have Americans who care as
  much as all of you care, and I really mean that.
  One of the things that is really nagging at me, though, is
  Mr. DeKort, and I am wondering.
  Mr. Braden, you have been with Lockheed Martin how long?
  

• 

  Mr. Braden

  At 02:35:36
  

  Thirty years.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thirty years.
  You have heard the complaints of Mr. DeKort. In your mind,
  I mean the things that you know about that you can express an
  opinion. Were those reasonable things to raise?
  I just want to make sure. Here is a man who, just like
  everybody else, has made it clear that he wants the best for
  the Coast Guard and the best for our Country. I am just
  wondering. What was your opinion on those things?
  

• 

  Mr. Braden

  At 02:35:36
  

  I think the issues he raised, I would expect to
  be raised by any competent program manager, project manager or
  engineer.
  

• 

  Mr. Cummings

  At 02:35:36
  

  All right. Thank you very much.
  Mr. Chairman?
  

• 

  Mr. Oberstar

  At 02:35:36
  

  I just want to nail a couple of things down
  with Mr. Atkinson.
  The difference between a visual test and an instrumented
  test, a visual review and certification through follow-up
  instrumentation testing, what is the significance of the one
  and the other and the two in combination?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  The physical inspection tells us if hardware
  has been properly placed onto the equipment, that cables are
  properly bonded, that cables are connected properly, that they
  are properly grounded, that isolation distances have been
  rigorously adhered to. Those must be done in a visual
  inspection before you do an instrumented inspection.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Is it sufficient to do the visual? If those
  factors are verified, can the inspector say that is sufficient?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  No, sir. It must pass a visual inspection and
  then pass an instrumented inspection.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  The instrumentation will tell us whether
  there is linkage and what distance and what can happen, how the
  signal can be intercepted, is that correct?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  Yes, sir. It is very similar to going to the
  doctor with a cough. The doctor can hear your cough. He can see
  that you are in pain, but he doesn't know that you have water
  on your lungs. So he will send you to a radiologist to have
  your chest examined and x-rayed. The x-ray is an instrumented
  test. An instrumented test is an absolute measure based on
  scientific principles, not just a visual observation.
  The two must be done, but the visual needs to be done
  before the instrumented, and then the visual needs to be
  repeated on a fairly regular basis.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  There is a risk to national security in a
  vessel handling classified information and conducting
  classified communications with shoreside and airborne
  equipment. What is the risk to national security if a vessel
  handles such traffic without proper TEMPEST certification?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  If a Coast Guard cutter goes into the
  territorial waters of Cuba and while they are in the
  territorial waters of Cuba they transmit a classified message
  through their satellite communications link or through other
  means and they have leaky equipment and Cuba picks up on those
  leaks, they will have just disclosed to the Cuban government
  how our cryptographic equipment works, how our C4ISR equipment
  works, the coding that it works on and they will be giving away
  not only their position, but they will be giving away, again,
  the keys to the kingdom. They will allow Cuba to listen in now
  on any of our ships.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  It can be at close range or at long range?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  It can. Depending on the specific
  vulnerability, it can be as little as somebody getting within
  30 to 50 feet of a vessel or, in other cases, it can be in
  excess of several hundred miles.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Under those circumstances, was it an
  acceptable risk that the Matagorda received Authority to
  Operate in January, 2005?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  No, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Without an instrumented test?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  The Matagorda had an instrumented test. It
  failed.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Without a successful test.
  

• 

  Mr. Atkinson

  At 02:35:36
  

  Without a successful test. However, in Coast
  Guard documents, there is indication that they had planned a
  second instrumented test which was never accomplished.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Never accomplished, that is right.
  I thank you very much.
  Mr. Chairman, as you said earlier, I think we should move
  on to the next panel.
  I am grateful to these four public spirited citizens who
  take their sense of responsibility deeply and genuinely, and I
  am grateful for your testimony today. It will help us get the
  Coast Guard on a better track.
  

• 

  Mr. Cummings

  At 02:35:36
  

  I understand Mr. Kagen has a few questions.
  

• 

  Mr. Kagen

  At 02:35:36
  

  Thank you, Mr. Chairman. I apologize for being
  late.
  Mr. DeKort, I will keep you only very briefly. Would you
  agree that this process of self-certification by Lockheed
  Martin played a key role in the failure that you observed?
  

• 

  Mr. DeKort

  At 02:35:36
  

  Yes, sir. It was the fox in the henhouse.
  

• 

  Mr. Kagen

  At 02:35:36
  

  So you think this process of self-certification
  should be continued anywhere else?
  

• 

  Mr. DeKort

  At 02:35:36
  

  I don't know that there is a place where you
  would allow self-certifying anywhere whether it is in the
  Government or private enterprise. It just doesn't sound like
  something you would want to do.
  

• 

  Mr. Kagen

  At 02:35:36
  

  Very good.
  Would you also agree that in this project overall there was
  no effective oversight?
  

• 

  Mr. DeKort

  At 02:35:36
  

  Yes. The oversight was not effective, and the
  reason I hesitated is because I want to draw a distinction
  between the oversight that existed and needing more. I don't
  necessarily. I know you need more, okay, because of coverage
  issues.
  Again, there was plenty of oversight, though, with these
  issues being raised with the people who were there who had the
  authority to make changes. So more in this case wouldn't have
  solved a thing. It was the decisions that the people, they had
  made, and every bit of it could have been avoided.
  

• 

  Mr. Kagen

  At 02:35:36
  

  It was the effectiveness of that oversight that
  was lacking.
  

• 

  Mr. DeKort

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagen

  At 02:35:36
  

  On a personal note, have you ever, at any time.
  felt that your health or your life was in danger? Do you ever
  feel nervous?
  

• 

  Mr. DeKort

  At 02:35:36
  

  No, sir. I feel that I suffered retribution
  after this while I was in Lockheed Martin, but it never
  elevated to the point where I thought that myself or my family.
  I never, and nothing ever occurred to make me actually think
  that.
  

• 

  Mr. Kagen

  At 02:35:36
  

  Very good. Thank you very much.
  I yield back.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Just to clear up, following up on Chairman
  Oberstar's questions, Mr. Atkinson, one of the most troubling
  things is this whole idea of waivers because you can have all
  the standards in the world, but if you are waiving, that is a
  problem.
  The Matagorda, the visual TEMPEST test results are the most
  troubling or dangerous from a perspective of protecting
  classified materials, is that right?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  No, sir. My concerns would be with all of the
  ships. The Matagorda received extra attention because it was a
  prototype. That which was on the Matagorda is also on the other
  ships because Lockheed Martin was required to make it identical
  on every ship. Therefore, if the first ship failed, all the
  ships fail. If the first ship passes, all the ships pass. All
  eight ships failed.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Although there were waivers, I guess you are
  saying that even without the waivers, they would have probably
  failed.
  

• 

  Mr. Atkinson

  At 02:35:36
  

  Yes, sir. It is akin to developing a hull
  breach and putting duct tape on it. It will fix it but not
  really.
  

• 

  Mr. Cummings

  At 02:35:36
  

  So this is a mess.
  

• 

  Mr. Atkinson

  At 02:35:36
  

  It is an enormous mess.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  One last question, Mr. Chairman, if I may, I
  know the panel has visited this subject. On the question of
  certification, would you recommend that for hull for TEMPEST,
  that the Coast Guard engage or be subjected to an outside
  independent party for certification purposes?
  

• 

  Mr. Atkinson

  At 02:35:36
  

  That is a very difficult issue. The Coast
  Guard lost their, it is referred to as a CTTA which is a
  Certified TEMPEST Authority that attends and graduates a
  TEMPEST school. They lost that person due to death prior to the
  Matagorda being commissioned or inspected.
  This person's second in command was then appointed an
  acting CTTA. He was not formally recognized at, by the National
  Security Agency as the cognizant authority. This is a matter of
  documentation which the Committee has in their possession. As a
  result, he was not recognized by the NSA as being competent to
  perform these inspections not competent to make the
  instrumented inspections.
  The Coast Guard turned to the Navy. The Navy sent their
  CTTA to the shipyards. He performed the instrumented inspection
  which had three failure points.
  The report then went back to the Coast Guard acting CTTA,
  and they started issuing waivers. Things were found bad.
  Instead of fixing it, they threw a waiver on top of it.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Let me ask the other members of the panel,
  briefly, your response to that question.
  

• 

  Mr. Sampson

  At 02:35:36
  

  In regards to structural certifications and
  such, sir, Mr. Ghosh would probably be better suited for that
  question.
  The issue primarily is focused, I think, for purpose of the
  hull. We have the capabilities. It is a matter of whether or
  not we have time, resources or the administrative authority to
  correct the contractor.
  Many times, as it has been stated before, that I have been
  told many times as an engineer by a contracting officer that we
  have to give the contractor the opportunity to fail, and that
  is a very frustrating position to be when we know for a fact
  that they are going to fail. But because we are required to
  give them that option, if we try to correct the contractor, it
  is always, well, delay and disruption or you are telling me or
  my way would have worked, and it is a very tenuous situation.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Mr. Braden and Mr. DeKort, do you have a
  comment?
  

• 

  Mr. Braden

  At 02:35:36
  

  As I said earlier, I believe that I would say
  that an independent third party that would provide some degree
  of oversight would go a long way towards resolving differences,
  subjective differences of what a requirement is or isn't, and I
  think that would help immensely both with efficiency of the
  Coast Guard side and the contractor sides.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Would the American Bureau of Shipping perform
  that function?
  

• 

  Mr. Sampson

  At 02:35:36
  

  That would be for the hull. ABS does have that
  capability to do certifications of designs, yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Thank you. Thank you.
  Mr. DeKort?
  

• 

  Mr. DeKort

  At 02:35:36
  

  Relative to TEMPEST, I could see utilizing,
  sir, the Navy to do that because of their capabilities.
  However, I would come back to ships that float, planes that
  fly. These are basic items that are just done, and they are
  considered to be elementary. So I don't know that we
  necessarily need to overthink oversight or who should be
  testing.
  You get in your car. You put it in drive. You punch the
  gas, and the car goes forward. If it doesn't go forward, it
  failed. I mean, sorry. These are basic things.
  The Coast Guard should have equipment that survives the
  elements. If they don't, then who is?
  I mean if you have every ship in the Coast Guard inventory,
  matching designs like I have said and Mr. Atkinson, 20 years
  from now, if the Coast Guard gets in level Sea State 6 or
  whatever condition or excessive whatever it is, who is going to
  rescue the Coast Guard?
  And I would imagine, sir, that you could find pleasure
  craft, okay, especially research vessels that are in much
  better shape than these craft would have been going forward.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Thank you.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Mr. Chairman, to your left, to the left of
  

• 

  the Chairman

  At 02:35:36
  

  
  

• 

  Mr. Cummings

  At 02:35:36
  

  Yes. Sorry, Mr. Gilchrest, my Maryland buddy.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  A quick question to Mr. DeKort or anybody
  else who wants to answer this, standard design, and I am
  curious. People have been making these Coast Guard cutters for
  a long time now. So if you go from 110 feet to 123 feet, why
  should that be a problem?
  

• 

  Mr. DeKort

  At 02:35:36
  

  Mechanical engineering is not my background,
  sir. But I will just say from an observer at 30,000 feet,
  looking in on this, it shouldn't.
  I mean here is the thing. If the contract was that loose or
  the requirements were that gray, I would like to know how is it
  ELC, Mr. Sampson or I figured it out. I don't know that we had
  some special insight capabilities or we are clairvoyant.
  So we had the same requirement set, the same contract, the
  same everything. Now it wasn't perfect. Did we need more
  oversight? Yes.
  Was ICGS potentially a contractual mess? Fine, yeah.
  Could the requirements have been written better? Yeah.
  But we are talking about just elementary items there that
  really don't take much discussion.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  This is Lockheed Martin. This is not a new
  boat builder.
  If it is elementary design to go from 110 feet to 123, I
  mean is this that difficult that the hulls are going to breach?
  What happened?
  

• 

  Mr. DeKort

  At 02:35:36
  

  Sorry. Well, sir, and I can't speak for the
  breach, but I can speak for all C4ISR.
  Again, it was the perfect storm. They just, they made a
  strategic decision to bid the job without enough C4ISR
  engineers and to use people who literally didn't have enough
  background or they didn't have enough people who had the
  background, and when they got into it, they were behind right
  away because it was aggressively bid. So they quickly had to
  make decisions so that they could stay on schedule.
  Like I said, the person who picked the non-waterproof
  radios background was a software configuration management
  specialist. It was a hardware item. I mean it sounds kind of
  incredible, I suppose, but it is literally what happened.
  So that perfect storm just hit it. Sorry, I am mixing
  metaphors. But then it snowballed, and they just got in so deep
  that I don't know that they could figure a way out.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  This was like the chaos theory in reverse.
  

• 

  Mr. DeKort

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Well, again, I thank you all.
  Mr. DeKort, what you just said, it seems you are right. It
  seems so elementary. It seems so elementary, it is painful,
  really, and it is painful from the standpoint that we are
  talking about lives, lives of our Coast Guard folks. We are
  talking about ships that are not out there now, guarding our
  coasts, interdicting drug runners, and the American people are
  paying big time.
  So I want to thank all of you. All I can say is--and I will
  say it 50 million times--if we can send people to the moon, we
  ought to be able to fix a ship that is no bigger than this
  room. It is incredible to me.
  We ought to be able to have communications whereby Cuba and
  other countries don't even have the capability of eavesdropping
  onto those communications. It is incredible and literally
  shocking to the conscience.
  Thank you all very much.
  We will move on to the next panel.
  Before you all sit down, I am going to administer the oath.
  Do you solemnly swear to tell the truth, the whole truth
  and nothing but the truth, so help you, God?
  [Witnesses respond in the affirmative.]
  Thank you.
  Dr. Mackay?
  TESTIMONY OF LEO MACKAY, VICE PRESIDENT AND GENERAL MANAGER,
  INTEGRATED COAST GUARD SYSTEMS; MARC STANLEY, EXECUTIVE VICE
  PRESIDENT OF GOVERNMENT AFFAIRS, BOLLINGER SHIPYARDS, INC.;
  JAMES E. ANTON, EXECUTIVE VICE PRESIDENT OF INTEGRATED COAST
  GUARD SYSTEMS AND VICE PRESIDENT OF THE DEEPWATER PROGRAM,
  NORTHROP GRUMMAN SHIP SYSTEMS; THOMAS RODGERS, VICE PRESIDENT,
  TECHNICAL OPERATIONS, LOCKHEED MARTIN MARITIME SYSTEMS AND
  SENSORS; BRUCE WINTERSTINE, PRINCIPAL PROJECT ANALYST, LOCKHEED
  MARTIN MARITIME SYSTEMS AND SENSORS; MARYANNE LAVAN, VICE
  PRESIDENT FOR ETHICS AND BUSINESS CONDUCT, LOCKHEED MARTIN
  

• 

  Mr. Mackay

  At 02:35:36
  

  Good evening, Mr. Chairman and Ranking Member.
  I am very grateful to be here on behalf of the people of
  Lockheed Martin and get the chance to explain the progress that
  Lockheed Martin is achieving on the integrated Deepwater system
  program where we are responsible for aviation, C4ISR integrated
  logistics and system engineering.
  Lockheed Martin has enabled deployment of more than 75
  upgraded HH-65 helicopters featuring more powerful engines,
  delivered 2 new HC-144A maritime patrol aircraft with 6 more in
  varying stages of contracting and construction, progressed
  through developmental tests and evaluation of the HC-144A
  electronic mission system, commenced mission system and sensor
  installation on all 6 J Model HC-130 long range search aircraft
  and sustained service of the MH-68A armed helicopters comprised
  in the Coast Guard's helicopter interdiction squadron.
  Lockheed Martin has upgraded command and control systems
  aboard all the Coast Guard's 39 medium and high endurance
  cutters, resulting in significant increases in the seizure of
  illicit drugs.
  In March, the Coast Guard issued full Authority to Operate,
  the Deepwater command and control system at its district
  command center in Miami in District 7. Achieving Authority to
  Operate is the Government certification that the system
  performs and operates correctly. This system provides enhanced
  mission planning tools and facilitates rapid exchange of
  information through a common operating picture among Coast
  Guard commands, cutters and aircraft.
  The system is now being installed in Sector San Juan in
  Puerto Rico, soon to be followed by a major Coast Guard
  commands in Massachusetts, Virginia, Washington, Hawaii,
  California and Louisiana.
  Deepwater is delivering and making a real difference
  impacting drug seizures, migrant interdiction and lives saved.
  On the Pacific Coast earlier this year, the Coast Guard
  performed a rescue utilizing an HH-65 Charlie helicopter under
  conditions that would have been impossible for the aircraft
  that it replaced.
  Just last month, the Coast Guard Cutter Sherman, patrolling
  off Central America, utilized its Lockheed Martin installed
  electronics to track passively a ship of interest, to board her
  without alerting her and to coordinate the seizure of a record
  21 tons of cocaine with a street vale of $300 million via
  secure satellite communications.
  We take the concerns raised by the Department of Homeland
  Security's Inspector General, seriously.
  For example, during a Lockheed Martin review of 123 foot
  patrol boat cabling, it was determined that 85 out of
  approximately 490 cables per ship cannot be confirmed as having
  low smoke properties. Subsequently, the Government determined
  that the risks were low enough to grant a waiver. The cables
  extend outside on the mast or on the deck, are surrounded by
  windows enabling easy ventilation and are short in length.
  After C4ISR equipment environmental requirements were
  updated in 2005, it became necessary to resolve inconsistencies
  in the specifications. A joint Coast Guard-Lockheed Martin
  working group was established, and after their consideration of
  the mission criticality of each component, its specification
  compliance and its function aboard the boat, a request for
  waiver was determined to be the appropriate action.
  This action permitted reconciliation of the program's
  acquisition strategy to maximize the use of ruggedized, off the
  shelf commercial and Government equipment with a multitude of
  military standards incorporated into the requirements. By
  requesting a waiver, the Coast Guard was afforded the ultimate
  decision as to a course of action according to its standards of
  cost effectiveness and safety.
  While there has been much discussion regarding C4ISR
  TEMPEST capabilities, the Inspector General determined in its
  report that the installed C4ISR system was not a security
  vulnerability. In fact, an independent third party, the U.S.
  Navy Space and Naval Warfare Systems Center or SPAWAR as it is
  colloquially known, determined the system on the 123 foot
  patrol boats did not have compromising emissions in two
  instrumented tests, and it was subsequently approved by the
  Coast Guard to operate in a classified environment.
  Finally, as the Inspector General found, the camera system
  on the 123 foot patrol boats fully complies with the video
  surveillance system requirements. It was designed as part of an
  overlapping series of measures including sentries and an
  intruder detection system. Lockheed Martin did not consider it
  prudent to unilaterally increase costs by providing
  functionality that the customer did not want or need.
  We continue to support the implementation, contractual and
  program management process improvements initiated by the Coast
  Guard as well as the active incorporation of lessons learned.
  We have supported the creation of a joint configuration control
  board and the participation of third parties for independent
  certification.
  In closing, I would like to read a short quote from the
  commanding officer of the Coast Guard's new Lockheed Martin
  installed C4ISR training center in Petaluma, California: ``The
  contrast between our tools of 1983 and the tools of the future
  ships like the Bertholf is significant. I remember analog
  radar, message traffic by teletype, paper charts and
  maneuvering boards, Polaroid cameras and slow criminal history
  checks.''
  ``By contrast, our new National Security Cutters will train
  on computerized digital sensors, radar and charts, have live
  sharable digital video, message traffic by PC, voice
  communications with anyone, clear or secure, and real time
  criminal histories and intelligence checks.''
  ``The Coast Guard will have increased maritime domain
  awareness to identify threats and a common operating picture to
  act when necessary, all to protect our coastlines and
  citizens.''
  Thank you again for the opportunity to present and explain
  the progress we are achieving on the Deepwater program. I look
  forward to answering your questions.
  Thank you, Mr. Chairman, Mr. Ranking Member.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much.
  Mr. Stanley, do you have a statement?
  

• 

  Mr. Stanley

  At 02:35:36
  

  No, I don't have a statement. I am here to
  answer questions.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much.
  Mr. Anton?
  

• 

  Mr. Anton

  At 02:35:36
  

  Good evening, Mr. Chairman and Ranking Member of
  the Committee, and thank you for the opportunity to appear
  before you to discuss the Deepwater program.
  I am the Executive Vice President of Integrated Coast Guard
  Systems and the Vice President of the Deepwater Program of
  Northrop Grumman Ship Systems.
  As you may know, NGSS has nearly 70 years of experience
  designing, constructing and maintaining ships of all types. In
  that time, NGSS Gulf Coast operations has produced a total of
  534 ships and has built nearly a quarter of the Navy's current
  fleet.
  On behalf of the Northrop Grumman and all the men and women
  working in support of this program, I would also like to thank
  this Committee for their strong support of the Coast Guard and
  of the Deepwater program.
  The 110 foot patrol boats have seen extensive duty since
  their entry into service some 20 years ago. The 123 conversion
  was intended as an interim measure to enhance the capabilities
  of the aging patrol fleet until a new vessel, the Fast Response
  Cutter, was available to replace it.
  The conversion work was performed by Bollinger Shipyards,
  the original builder of the 110s under subcontract to Northrop
  Grumman.
  The conversion project underwent a traditional set of
  design and review processes with contractor and Coast Guard
  personnel. After being awarded the patrol boat conversion work
  but before beginning the actual conversion work, the Coast
  Guard, ICGS, NGSS, Lockheed Martin and Bollinger with their
  joint venture partner, Halter, engaged in design reviews
  including a preliminary design review, a critical design review
  and a production readiness review. These reviews were reviews
  of the 123 conversion design which were presented to the Coast
  Guard in increasing levels of details.
  Although not a contract requirement, ICGS conducted the
  Preliminary Design Review or PDR. As part of the PDR process,
  drawings and analysis were submitted to the Coast Guard for
  consideration and review. Half of the attendees at the PDR were
  Coast Guard personnel.
  The next stage was Critical Design Review or CDR. In
  conjunction with CDR, the Coast Guard reviewed a series of
  design deliverables. CDR presentations included results from a
  number of design tests, and the Coast Guard represented nearly
  half of the attendees.
  CDR was followed again by a Production Readiness Review.
  During the PRR, the production process, procedures and state of
  the design to convert the 110 vessel into the 123 were
  presented. As with the design reviews, the Coast Guard fully
  participated in the PRR process.
  Four days later, the Coast Guard delivered the Matagorda to
  Bollinger for conversion in Lockport, Louisiana.
  In addition to these various reviews with the Coast Guard
  during the conversion of the first vessel, the Matagorda, the
  American Bureau of Shipping examined the design of the hull
  extension, the new deckhouse and monitored key elements of the
  work being performed. The Coast Guard also had a Program
  Management Resident Office on site to oversee the 123
  conversions.
  At the completion of each conversion and as part of the
  acceptance process, the Coast Guard, similar to what the Navy
  does, established an In-Service Inspection Board to examine the
  performance of the converted cutter and make a formal
  recommendation of acceptance.
  At the conclusion of the Matagorda work, Abs issued a
  letter of approval for the conversion work and expressed no
  reservations with the feasibility of the conversion.
  Based on all of these reviews and actions, the Coast Guard
  accepted delivery of the Matagorda. This same process was
  applied to each of the seven patrol boats delivered to and
  accepted by the Coast Guard.
  To date, the problems associated with the 123 conversion
  include buckling or hull deformation and shaft and propeller
  line problems. Neither Coast Guard engineers nor our engineers
  have been able to determine the root cause for the 123 patrol
  boat structural problems.
  We understand that Admiral Allen has decided to
  decommission the eight 123 boats converted under the Deepwater
  program. We are not privy to the research, tests and reports
  that led to this decision. We will continue to support the
  Coast Guard's effort to address its mission needs.
  Thank you again for the opportunity to discuss with you the
  Deepwater program.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Does anyone else have a statement?
  Thank you very much.
  Let me just begin the questioning. To Mr. Rodgers, what
  position did you hold with regard to the Deepwater program?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  From January, 2003 through September, 2005, I
  was the Lead Program Manager for Lockheed Martin.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Did that position give you the overall day to
  day costs and schedule responsibility for the entire Deepwater
  and C4ISR effort?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  The C4ISR effort was part of that
  responsibility.
  

• 

  Mr. Cummings

  At 02:35:36
  

  All right. Was there ever any suggestion
  provided by you or your superiors at Lockheed Martin that costs
  and schedule goals were paramount and that the mission needs of
  the Coast Guard took a back seat to these considerations?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  No, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Was there pressure to produce this?
  You were here when Mr. Braden testified, were you not?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes, I was.
  

• 

  Mr. Cummings

  At 02:35:36
  

  I think he talked a little bit about
  pressure. I am not trying to put words in his mouth, but he did
  talk about pressure. So you don't know anything about that
  pressure, the pressure that he talked about?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  From an overall program, there is always
  pressure to perform in that sense. In my 24 years, there is
  always pressure to execute the job you are assigned to.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Is it the case that employees of Lockheed
  Martin regarding an assignment to the Deepwater project as a
  type of punishment? Did you ever get that impression?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  No, I did not.
  

• 

  Mr. Cummings

  At 02:35:36
  

  To what degree did limited resources
  available for the C4ISR components of the Deepwater project
  contribute to the failure of Lockheed to meet all contractual
  requirements of the systems installed in the 123s?
  In other words, were there budgetary problems?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Overall, we had a schedule challenge. We
  missed the original schedule in November of 2003, and it was
  replanned with the Coast Guard to March of 2004. The major
  focus area was how do we achieve the first delivery.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Wait a minute. I am sorry. I didn't hear a
  word you said.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Okay.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Say that again.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  The original schedule for delivery of the 123
  was November of 2003, and we did a replan with the Coast Guard
  to make that March of 2004.
  

• 

  Mr. Cummings

  At 02:35:36
  

  All right.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  So from a schedule point of view, we replanned
  the original schedule.
  

• 

  Mr. Cummings

  At 02:35:36
  

  All right. Now you heard the testimony of Mr.
  DeKort, did you not?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes, I did.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Were you here for the entire testimony?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes, I was.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Did Mr. DeKort raise each and every one of
  these issues to you and your superiors, the ones that he
  stated?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Not to me personally.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Did you know about them?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I knew. I knew after the fact in a sense that
  I knew there were some issues. I facilitated him meeting with
  some of senior management. To that point, I was aware of them.
  

• 

  Mr. Cummings

  At 02:35:36
  

  In other words, did you know what he was
  going to meet with senior management about?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I know he had some concerns with the program
  that were not being addressed, and he wanted to have the
  ability to talk to some people in more senior management.
  

• 

  Mr. Cummings

  At 02:35:36
  

  In other words, you made it possible for him?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  That was facilitated.
  

• 

  Mr. Cummings

  At 02:35:36
  

  So you never really discussed them in any
  kind of detail, is that what you are saying?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes, from my seat, I would not. I was the
  overall program manager. So I would not have spoken in
  technical detail to his concerns. We would have relayed that to
  engineering.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Let me ask you this. Do you know whatever
  became? Do you know who he met with as a result of your
  facilitating discussions? Do you know who he met with after
  that, in other words, who you made it possible for him to talk
  to?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  He mentioned in his testimony that he met with
  the Vice President of Engineering, Carl Bannar. I was aware of
  that meeting.
  

• 

  Mr. Cummings

  At 02:35:36
  

  You know for a fact that he did meet with the
  Vice President. What is his name again?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Carl Bannar.
  

• 

  Mr. Cummings

  At 02:35:36
  

  You know for a fact that he met with him?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I knew that meeting was being set up and I
  have no reason to believe that did not happen.
  

• 

  Mr. Cummings

  At 02:35:36
  

  You did hear. I guess to facilitate the
  meeting, you had to hear a little bit about what he was
  concerned about. Did you have an immediate response other than
  facilitating a meeting?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Overall, he has a chain of command within his
  department. His concerns, I believe, were expressed to his
  chain of command as he testified.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Where would you have been on the chain of
  command in regard to him?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I was the overall Program Manager.
  

• 

  Mr. Cummings

  At 02:35:36
  

  In other words, what I am trying to say is he
  had to go two steps up to get to you? Were you on the same
  level? I am trying to figure out.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  In general -
  

• 

  Mr. Cummings

  At 02:35:36
  

  Hear my question. I am just trying to figure
  out where you fit on the chain.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Overall, from a Lockheed perspective, there
  was approximately 350 people in the Deepwater program. I was
  the overall lead.
  

• 

  Mr. Cummings

  At 02:35:36
  

  The last words?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I was the overall lead.
  

• 

  Mr. Cummings

  At 02:35:36
  

  So you were like at the top?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Or second to the top, yes.
  Okay, so in order for him to get to you, that
  meant he skipped over some folks.
  In other words, what I am trying to get to is he got to
  you, and you said there is a chain of command. You said there
  are some 300 people. You are at the top. So you then told him
  to meet with somebody above you. Is that it?
  Overall, he had some engineering concerns. We
  had him meet with the head of engineering to share his
  concerns.
  

• 

  Mr. Cummings

  At 02:35:36
  

  The person who you facilitated the meeting
  with, the vice president that you spoke of.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes.
  

• 

  Mr. Cummings

  At 02:35:36
  

  That person was above you.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Correct.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay, gotcha.
  You are familiar with the Deepwater program, and you just
  said that you were responsible for the day to day costs and
  schedule responsibilities. So you are pretty familiar with it,
  are you not?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I left the program 18 months ago. So I am
  familiar with it up until September of 2005.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Well, let me ask you. You heard the
  complaints of Mr. DeKort today, did you not?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes, I did.
  

• 

  Mr. Cummings

  At 02:35:36
  

  I am just wondering. Do you have an opinion?
  Do you think they were reasonable complaints?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  The first time I read his complaints was in
  the Inspector General's report which when I called to testify I
  read. I understand the Inspector General's report. I don't have
  a specific opinion on his complaints from a technical
  perspective because his complaints to me are technical
  perspectives.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Is that unusual for employees to have
  complaints of this nature, to have had them with regard to this
  Deepwater program? I am just curious.
  I am sure you have done other programs too. Is it unusual
  for people to bring issues like this to you?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  No, it is not unusual for people to bring
  issues like this to me.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Now did you ever have a conversation with the
  vice president that you referred him to about his complaints?
  Was there ever a conversation, ever?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  No, not about his complaints, specifically.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Say that again.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Not about his complaints, specifically.
  

• 

  Mr. Cummings

  At 02:35:36
  

  About him?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Other than facilitating the meeting, I did not
  get feedback from the meeting.
  

• 

  Mr. Cummings

  At 02:35:36
  

  All right. Now were you aware that Lockheed
  had planned to install a non-waterproof radio in the
  prosecutors' launch from the 123s? Were you aware of that?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  No, I was not.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Were you aware that the installation of a
  non-waterproof radio would put the crew or the prosecutors at
  risk of potential electric shock?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Can you clarify when you say are you aware?
  

• 

  Mr. Cummings

  At 02:35:36
  

  Well, this is what I am asking you. You are
  the day to day guy.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Right.
  

• 

  Mr. Cummings

  At 02:35:36
  

  You are number one and number two. You are up
  there. You are up there, and you said, I didn't say this, you
  said it. You are the day to day costs and schedule
  responsibility guy, and you said you are familiar with the
  project.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Correct.
  

• 

  Mr. Cummings

  At 02:35:36
  

  I mean is that right? I am not trying to put
  words in your mouth.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  123 is just one of many projects within the
  Deepwater program.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay. Now what I am asking you is that I
  think you would agree if you heard Mr. DeKort, and I think
  maybe another person may have said it too. This radio that they
  use is their means of communication. Is that right?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I am not a technical expert on the 123 design.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Let me ask you this. If you are producing a
  boat and water is splashing up on it and there is a radio,
  would you deem it prudent to have a radio that is waterproof?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes, I would.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Let me ask you something else. Were you aware
  that the topside equipment was installed on the 123s that would
  not meet environmental requirements?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  No, I was not aware at that time.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Were you aware that Mr. DeKort tried to
  identify this noncompliant equipment and have it replaced and
  that Lockheed directed him not to do so?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  No, I was not aware of that.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Were you aware that the contractor eventually
  self-certified that the topside equipment met specifications
  when, in fact, it did not? Did you know that?
  That is from the IG report? Are you aware of that?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I have read the IG report once. I am not
  familiar. I have not studied its contents.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Let me ask you this. Do these things that I
  am saying to you concern you?
  I mean, in other words, you were the top guy.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Right.
  

• 

  Mr. Cummings

  At 02:35:36
  

  We have a radio that is not waterproof. We
  have got topside equipment that they claimed met specifications
  but didn't, and you are the top guy. You are the one, I guess,
  that if anything goes wrong, somebody says, wait a minute, what
  happened? Is that right?
  You are the one that I guess the President would ask the
  questions of.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I have overall program oversight.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Does it concern you that these things have
  come out in the IG report when you were responsible for this?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  From an IG report, as I said, I read it. I
  have not studied its results. I have been off the program. The
  first time I saw the IG report was on Tuesday of this week.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Maybe you can answer this and maybe you
  can't. Why was the deficiency in the topside equipment on the
  123s not clearly spelled out on the Matagorda's DD-250 as the
  intention to submit a waiver for noncompliance when the
  requirement for low smoke cabling was clearly singled out in
  the DD-250?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I don't know.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Was the deficiency with the topside equipment
  noted on any of the DD-250 forms or any of the eight 110 foot
  patrol boats lengthened to 123 feet?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I would not have had the day to day cognizance
  of what went on that 123 DD-250.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Did the integrated team indicate on self-
  certification forms that there were no applicable environmental
  requirements for the topside equipment?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I am not familiar with the self-certification
  form.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Is there anybody up here that would be
  familiar with that? Do you know? Nobody?
  Can you all, can anybody tell us who we can get the answers
  to these questions from? Anybody?
  Mr. Mackay, you seem like you have got an answer?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Mr. Chairman, if I might.
  

• 

  Mr. Cummings

  At 02:35:36
  

  This concerns us because we are here just
  trying to get to the bottom of some things, and you tell us
  that you are in charge. This is a major corporation, major
  project. You are sitting there under oath, and then you tell us
  you don't know anything.
  Mr. Taylor said something that was very interesting when he
  talked about the fact that he couldn't understand why nobody
  had been fired. I guess nobody has been fired because nobody
  knows anything.
  Mr. Mackay?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Mr. Chairman, if I might, just to explain some
  things about the way the certifications and the other things,
  the requirements on the program are determined. As other people
  have mentioned, it is an IPT environment, and issues are vetted
  in a joint environment--Coast Guard, Lockheed Martin, Northrop
  Grumman, industry.
  In specifying a ship program and the C4ISR specifically on
  that, the way the program operated was that there is a cutter
  certification matrix, some 1,700 documents that have all the
  requirements and specifications that cutter, that go into
  outlining the requirements for a cutter, that industry must
  meet as it presents the cutter for DD-250 and acceptance.
  What happens is from those universal requirements, the
  cutter specific certification matrix or a subset of those
  requirements is called out, and they are either assigned to the
  HM&E lead, Northrop Grumman, Bollinger, Halter-Bollinger, those
  folks or to C4ISR.
  In the event as I understand it and have talked to people
  who have contemporaneous knowledge, the issue is that if you
  look in the IG report, the standard that is called out, Mil.
  Standard 1399 Charlie, at the time was only specified for HM&E.
  It was not specified for C4ISR. It was not until the July, 2005
  timeframe that that specification was deemed and agreed to by
  Coast Guard and industry working together, that that specific
  sort, Sort 21, if you look on the document, presented in the IG
  report, photostatically copied there, was deemed to apply to
  C4ISR.
  That is why if you look closely at that document, the
  signature attesting to the S016 is from Bollinger. They were
  attesting to environmental standards with respect to HM&E.
  Once those, it was understood that those should be assigned
  properly to C4ISR, a joint working group was undertaken, and as
  the IG outlines in its report, eventually a request for waiver
  process was undertaken.
  And let me be clear about what that process entails.
  Industry presents to Government the conditions, specifications,
  costs of complying with the requirement. Then Government looks
  at that data and makes an independent judgment based on its
  standards of cost effectiveness, its assessment of the safety
  consideration and either grants the waiver or deviation or does
  not do so. And so, it is a very disicplined process in which
  all the facts relevant come out on the table, and the
  Government is allowed to make a decision about the prudence of
  a waiver or deviation or compliance to the requirement.
  And so, the form S016 that is photostatically copied in the
  IG report does not bear a Lockheed Martin signature because at
  that time on the program in March, 2005-FE I think if you look
  on the document-FE those specifications, Mil. Standard 1399
  Charlie or Sort 21 as it is also called right there on the form
  were not understood by either Government or industry to pertain
  to the C4ISR portion of the program.
  That judgment was subsequently corrected or changed,
  altered by mutual agreement.
  

• 

  Mr. Cummings

  At 02:35:36
  

  The Coast Guard has always said that the
  certification was required. Are you familiar or aware of that?
  You haven't heard the testimony. But are you aware of that?
  

• 

  Mr. Mackay

  At 02:35:36
  

  No, sir, I am not.
  

• 

  Mr. Cummings

  At 02:35:36
  

  They have consistently said that.
  

• 

  Mr. Mackay

  At 02:35:36
  

  The facts that I am aware of, Mr. Chairman, are
  that it was not until July, 2005, that that specific sort was
  deemed to apply to C4ISR. It was given to the HM&E side of the
  program. It was not given to the C4 side until later in the
  spring, summer timeframe of 2005.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Would it concern you if we produced a system.
  C4 system, where the Cubans and others could eavesdrop?
  I am just curious. Would that concern you?
  You know I look, I watch when a President comes to the
  capital, and they go through 50 million changes. They bring in
  all kinds of experts to make sure he has got a secure line. I
  mean they have somebody guarding the line. I mean literally. I
  wish you could see the operation.
  When I listen to the testimony that we heard a little
  earlier about countries being able to eavesdrop, I am just
  wondering is that something that would concern Lockheed Martin?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Yes, sir, it very well would, and I would like
  to just read from the DHS IG report on page five. You know the
  complaint. I am quoting here. I am reading from the report
  itself.
  The complaint also alleged that the use of non-braided
  cable would limit the 123 cutter's ability to meet TEMPEST
  testing requirements which we have talked about at length here.
  However, TEMPEST testing conducted on the Matagorda and Padre
  between February, 2004 and July, 2006, indicated the cabling
  installed on the C4ISR upgrade was not a source of compromising
  emissions. Those instrumented tests were conducted by SPAWAR,
  by the Navy Space and Electronic Warfare Command, the U.S. Navy
  with all their expertise.
  

• 

  Mr. Cummings

  At 02:35:36
  

  To your knowledge, was there ever
  certification, TEMPEST certification done and it passed?
  

• 

  Mr. Mackay

  At 02:35:36
  

  I am not.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Are you familiar with any TEMPEST
  certification that took place with regard to the systems that
  you put in place?
  

• 

  Mr. Mackay

  At 02:35:36
  

  I am aware of these tests that were done by the
  Navy's Space and Electronic Warfare Command. One was done prior
  to the DD-250 or the acceptance of the vessel in the February,
  2004 timeframe, and the other was done in 2006 after the
  allegations were raised in the IG report, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Now, why were you testing in 2004?
  

• 

  Mr. Mackay

  At 02:35:36
  

  That would be testing pursuant to the DD-250
  which is the turning over of the vessel from industry to
  Government. It is an acceptance form. That is what a DD-250 is,
  sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  You were testing then. So then there were
  tests later on. Is that correct?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Yes, sir. After the IG report and the concerns
  were raised, another instrumented test was performed by the
  Navy and SPAWAR, and I just read the quote from the IG report
  about the results of those instrumented tests conducted by the
  Navy. I can read it again, sir, if you would like.
  

• 

  Mr. Cummings

  At 02:35:36
  

  No. I am going to come back.
  

• 

  Mr. Mackay

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. LaTourette?
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Thank you very much, Mr. Chairman.
  Just a couple of observations before I make my questions, I
  would say to the Chairman over my spring vacation, one of the
  places that I visited was the Lockheed Martin site in Akron.
  Mr. Chairman, you should see. They have taken over the air dock
  down in Akron, Ohio. It is one of three, it is my
  understanding, that are existing still in the Country, and they
  are going to build a high altitude airship. We are not only
  excited about that, but we are happy with the work of the
  aerostats that are protecting our border and also doing
  yeoman's work at 5,000 feet in the Middle East.
  Having said that, I know that you were all in the room for
  the first panel. There is nobody, I think, on the Committee,
  there is nobody in the audience, there is nobody in the Country
  that thinks that spending $90 million for eight ships that
  don't work is a good idea or that it is acceptable. If anybody
  think that it was a good idea, then you can chime in, but I
  don't think I am going to get any responses.
  There is a big difference between that in my mind because
  you prosecute people. You sue people. Money damages are
  awarded. There is a big difference between that and some of the
  stuff that came up during the first panel and then some of the
  accusations, quite frankly, that are being leveled against
  Lockheed Martin.
  The staff tells me that these cameras located around here,
  60 Minutes, and I am going to tell you that there are two types
  of stories. There is bad performance on a contract which is
  unacceptable, but there are also two allegations that I really
  think, Dr. Mackay, I would like you to address, that have been
  made during the course of the first panel and maybe as we
  proceed.
  Mr. DeKort, the whistleblower in this case, and let us
  start with one first and that is national security. The story
  sort of perking under the surface here is that because of a
  difference between $7 a cable, $7.95 for 10 feet of a cable and
  $27.95 for 10 feet of cable, that Lockheed Martin in the
  reconfiguration of these 110 foot ships made either a schedule
  decision or a cost decision to put our national security at
  risk by installing aluminum mylar cable instead of the braided
  shielded cable.
  I think I need you to tell me what you think about that
  allegation.
  

• 

  Mr. Mackay

  At 02:35:36
  

  Well, what I will tell you is what I know, sir,
  is that, and these facts are verified by the IG report, the
  aluminum mylar cable met contract specifications. I think the
  experts that were here said that there are design choices that
  are made. Braided cable has some superior characteristics, but
  it is not always and universally a superior or the appropriate
  choice.
  As verified by the IG report, the aluminum mylar met
  contract specifications and both these tests conducted by the
  Navy's SPAWAR and reported in this IG report said that there
  were no compromising emissions. That is what.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  That is my next question because Mr.
  Atkinson said. You may remember I asked Mr. Atkinson, can any
  witness under oath, but even not under, I mean I don't think
  everybody has to be under oath. If they don't tell the truth,
  that is a bad thing, the oath notwithstanding.
  But I believe in response to my question, can any witness
  come before us and indicate that this system passed the TEMPEST
  test, and he said that anybody that said that would be
  committing perjury.
  Now I understood you to not only read that section on page
  five of the IG's report but I understood you to say in your
  introductory testimony that the TEMPEST system passed. Is that
  right?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Sir, what I am attesting to is what I read.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Right.
  

• 

  Mr. Mackay

  At 02:35:36
  

  There were no compromising emissions. That was
  the judgment of the DHS IG reviewing that data.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Okay, but for your sake as well as the
  Country's sake, I want that in language that people sitting
  home apparently some Sunday evening can understand.
  The allegation was made that Fidel Castro is going to be
  listening in on our most secure communications. The keys to the
  kingdom was the phrase used by the first panel. Because
  Lockheed Martin made a design choice to put in the $7.95 cable
  as opposed to the $27.95, the keys to the kingdom are given to
  Fidel Castro and our enemies. I want you to tell me that that
  is not so if you believe that.
  

• 

  Mr. Mackay

  At 02:35:36
  

  Sir, that is what I believe, and that is what,
  if you read the Inspector General's report, that is what they
  attest to.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Now let me get to the second issue because
  just as important, if not more important, than national
  security are the lives and the well being of the Guardsmen that
  serve on these ships. Mr. DeKort's second observation was about
  low smoke cabling.
  I think Mr. Oberstar was exact. I think many of us remember
  what happened when the bundled cables ignited, and we had
  horrible problems on airplanes. There has to be a reason for
  low smoke cabling specifications for fires as well as certainly
  the health and safety of the crew.
  I understood you to say that you went to the Coast Guard.
  Who came to who on the low smoke cabling?
  I am sorry for not remembering. Did you go to them for the
  waiver or did they come to you and ask for a waiver?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Since we are in an IPT, it is sort of we always
  discover these things in almost simultaneously, sir.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Okay, but regardless, a waiver was granted.
  So somebody reached the conclusion, and maybe jointly if you
  are all in these meetings, that low smoke cabling wasn't
  required on these 110 conversions or at least waived that
  requirement.
  

• 

  Mr. Mackay

  At 02:35:36
  

  The determination was made that in a situation
  like this, you examine all of the relevant facts which is where
  the low smoke cabling is, what the density of it is. Those are
  just a couple of things. When an analysis was done, 85 of 490
  C4ISR cables that are on each individual ship were not low
  smoke.
  A couple of facts: 16 of the 85 cables were actually
  extended outside to the mast or on deck. So if the issue is
  that when there is a fire, that there are fumes, those fumes
  immediately waft away.
  Seventy-one of the 85 cables run into the pilothouse which
  is surrounded by windows enabling easy ventilation and the
  cables.
  We are using commercial off the shelf or Government off the
  shelf equipment, trying to maximize savings. That is our
  acquisition strategy. And so, a lot of times you have
  proprietary cable assemblies where there is not a low smoke
  equivalent available. There are cable assemblies that are
  attached to equipment, to radar masts and the like. Sometimes
  if you remove the manufacturer supply cable, you void the
  manufacturer's warranty, and in some situations it might be
  cost prohibitive due to the employment of unique connectors.
  But all of that data, and it is a request for waiver or
  deviation. All of that data, all those considerations are
  bundled together. They are given to the Government.
  The Government makes a judgment based on cost
  effectiveness, its safety standards, how much risk it is
  willing to take and whether it is a prudent risk, and they
  either grant a waiver or they say no, you have to. That is the
  process, sir.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  I get that. I get that. During these
  hearings, I think there was bad judgment all the way around.
  But, again, I want this to be real clear on the record. The
  allegation is made, and people aren't being shy about the
  allegation here. The allegation is made to save money, to meet
  a deadline, Lockheed Martin installed low smoke cables on a
  ship that endangered the lives of Coast Guardsmen, and I want
  you to tell me whether that is true or not.
  

• 

  Mr. Mackay

  At 02:35:36
  

  No, sir.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Because of the explanation, I assume.
  

• 

  Mr. Mackay

  At 02:35:36
  

  The explanation, I assume? I am not saying that
  there is no low smoke, that there is not, that all the cabling
  is low smoke
  

• 

  Mr. LaTourette

  At 02:35:36
  

  I know that.
  

• 

  Mr. Mackay

  At 02:35:36
  

  I said that for all the factors that I
  mentioned.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  But my question was the allegation is that
  by not using low smoke cables, you put Coast Guardsmen at risk
  and you put the ship at risk. I believe your answer is no, but
  could you just say no if that is your answer.
  

• 

  Mr. Mackay

  At 02:35:36
  

  No, sir, not in the judgment of the Government
  which granted the waiver.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Okay. The last question, Mr. Chairman, just
  so we are not parsing words.
  On the TEMPEST system passing, I think that if Mr. Atkinson
  were able to come back in here and take another swing, he would
  say that the reason that the TEMPEST system passed the SPAWAR
  test was because so many waivers were granted that it really
  didn't pass the test; it passed a test that wasn't a test.
  Would he be right if he said that?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Sir, that is a question that would have to be
  asked to the Government agencies that granted that.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Then I will.
  

• 

  Mr. Mackay

  At 02:35:36
  

  And also to, I guess, the IG that made the
  determination that there were no emanations that compromised
  those standards, sir.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Right. Okay, thank you very much.
  Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:35:36
  

  In fairness, I want to be real clear. We are
  under oath, and I want to be real clear.
  SPAWAR has stated to this Committee that they did not
  certify the ships in an instrument test. They simply ran a
  test. They gave the data to the Coast Guard. It had
  deficiencies. The Coast Guard has turned over records that we
  have in our possession, that we have reviewed, that showed that
  they could not have passed and if they did ``pass'' it was
  because of waivers.
  The IG told the Committee that the Coast Guard told them
  they passed. In other words, the Coast Guard says they passed,
  but the IG did not have the expertise, and that is according to
  the IG, to evaluate the records. And so, the Committee did have
  the records evaluated.
  We can mess with words from now until forever, but we have
  gone through 50 million changes getting records. As a lawyer, I
  have never seen anything like it, from the Coast Guard mainly.
  Our staffs have spent literally 19 hour days going through
  those records. We got records as late as yesterday evening that
  we requested almost a month ago.
  I hear you, Mr. LaTourette, but I don't want the record to
  remain there, that there is something where there has been
  TEMPEST certification because I know you are as concerned as I
  am that certification has been, in fact, done. All I can say is
  that is what we have.
  I am going to come back to you, Mr. Rodgers, because I have
  some concerns about some of your testimony, but now we will go
  on to Mr. Oberstar.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Was there a contract specification for a
  particular type of radio for these vessels?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Mr. Chairman, if you are directing that at me,
  I was not on the program at that time. My entry to the program
  was in July of 2005. I don't have any contemporaneous knowledge
  of that.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Well, in the contract, this is an unusual
  type of contract in which there was an absence of very specific
  contract specifications. So in the agreement, in the
  contractual agreement between the Coast Guard and Lockheed who
  is the electronics suppliers, was the contractor free to choose
  what it, in its judgment, felt was the proper equipment to put
  on board this class of vessels?
  You don't know? You can't answer that question?
  

• 

  Mr. Mackay

  At 02:35:36
  

  With specific reference to those radios, no,
  sir, I cannot.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Is anyone on the panel able to answer that
  question?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Dr. Mackay mentioned the IPT. Within the IPT
  environment, the Coast Guard working with ICGS, with Northrop
  Grumman and Lockheed Martin would then have gone through that
  process to choose which radios.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  So somebody made a choice for a radio that
  was not waterproof to be operating at sea in an exposed
  situation where it could short out or shock someone or worse,
  right?
  No one wants to take responsibility for that. No one knows
  anything about it on the panel.
  Lockheed was the contractor, right?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Yes, sir, I just, my experience on the program
  just doesn't extend back that far, Mr. Chairman.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  The issues that I think Mr. LaTourette was
  raising about whether individuals were compromised is not a
  question of whether he made a deliberate choice of the type of
  cable to achieve a particular end, but the fact is that this
  cable was not sufficient. The cable used on the to-be 123 foot
  patrol boats was not sufficient to prevent leakage, correct?
  That is what we heard from the previous panel.
  But on the 170s, that cable, the more secure cable was, in
  fact, used. Now why was cabling on one class of vessels used at
  a higher level and a different level used on the other class of
  vessels?
  Dr. Mackay, have you got an answer?
  

• 

  Mr. Mackay

  At 02:35:36
  

  I don't, Chairman. As I mentioned, my tenure on
  the program doesn't extend back to that timeframe. I can take
  the question for the record if you would like.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Mr. Winterstine, do you believe Lockheed made
  the right technical, contractual and ethical decisions on the
  123 program?
  

• 

  Mr. Winterstine

  At 02:35:36
  

  Mr. chairman, Lockheed Martin entered into
  a contract arrangement to satisfy the 123 requirements that we
  had under contract. We went through the design processes,
  shared those designs with the Coast Guard, discussed those
  designs with the Coast Guard and then implemented those
  designs. So, yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  You are the Program Management Liaison of the
  integrated team.
  

• 

  Mr. Winterstine

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Are the allegations made that you heard
  previous by Michael DeKort, are they with or without merit?
  

• 

  Mr. Winterstine

  At 02:35:36
  

  Mr. Chairman, Mr. DeKort made quite a few
  allegations. I would rather not offer opinion, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Well, on January 7th, 2004, Mr. DeKort sent a
  memo to a number of people including Mr. Rodgers, and there are
  others, Mr. Clifford; Mr. Ewing, Patrick; McLaverty, Brian.
  Brian McLaverty, I am sorry, I just got the names in reverse
  order.
  In which he says: ``I have become increasingly frustrated
  with the direction the Deepwater project is following, and we
  have sacrificed hard earned and well founded engineering and
  customer focused principles in order to meet the needs of
  nonrealistic schedules. I believe this path will lead, at best,
  to the delivery of a substandard product that will harm our
  reputation and, at worst, the delivery of a product that will
  hamper our customers' ability to successfully carry out their
  mission.''
  Are you aware of that memo?
  

• 

  Mr. Winterstine

  At 02:35:36
  

  No, sir, I am not.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Mr. Rodgers, you were on that memo. Are you
  aware of it?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Not specifically.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  If you received such a memo, would that get
  your attention?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Was it a memo? Was it e-mail?
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Whether it was an e-mail or a memo makes no
  difference. It was a message sent on January 7th, 2004, time,
  11:53 a.m. Maybe it was an e-mail.
  The question is it is a very strong allegation: a
  substandard product that will harm our reputation and, at
  worst, the delivery of a product that will hamper our
  customer's ability to successfully carry out their mission.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Sir, what you are referring to is an e-mail,
  and I am not specifically familiar with this e-mail itself.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  If you had gotten that, would that trouble
  you?
  Would you want to do something about it?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Overall, with that said, I would encourage him
  to express his concerns to his management and let us get them
  adjudicated.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Well, it doesn't appear that much was done
  about it. It was sent. You didn't see it, and you were one of
  the assignees.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  I receive many, many e-mails in a day.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  This is a big contract.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  This goes to the expertise of your
  organization. You are supposed to pay careful attention to this
  stuff and not dismiss it saying I get many e-mails. I get
  thousands. All of us get thousands of communications a week.
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Yes, sir, I did not specifically
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Something of this magnitude, it is serious.
  You have got to pay attention to it.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Will the gentleman yield for just one
  question?
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Yes.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you, Mr. Chairman, for yielding.
  In answer to one of my questions, you said that the first
  time you had heard about this was, I think recently and you
  just did not have very much detail about it. This memo really
  outlines everything very, very carefully. I am just wondering
  does this refresh your recollection at all, this memo, now that
  you have it in your hand because he really lays out everything
  and you are one of the top people on the project.
  If somebody came and said I have got these issues, Mr.
  Rodgers, and they put them in writing, and they are talking
  about issues that go to our national security and go to the
  safety of the wonderful, brave men and women, patriotic men and
  women of the Coast Guard that we are supposed to be producing a
  vessel for, that is safe. It seems to me that is something that
  would go to the very essence of your thought process.
  It would also concern you that your corporation, Lockheed
  Martin, you don't want them, I am sure, to be placed in an
  embarrassing position.
  But what you are saying is that you don't remember the e-
  mail at all?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  Let me clarify, sir. Overall, I mentioned the
  schedule issue in November of that year. With that, we added
  resources. We added additional talent. Some of the people on
  this e-mail were added, such as Mr. Clifford and Mr. Ewing and
  Mr. Wilhelm.
  They were added to the team. My day to day
  interaction was with those gentlemen.
  So to clarify, after the November timeframe, I did not
  interface with Mr. DeKort on a day to day basis.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Did any of those gentlemen bring it to your
  attention, the memo?
  

• 

  Mr. Rodgers

  At 02:35:36
  

  This memo? Not to my recollection, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  All right, I yield back.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  What is emerging from the questioning and
  from the responses is that the fundamental issue we are
  concerned about, there is a structural failure in the way this
  program was carried. There is a structural failure in the Coast
  Guard self-certifying and allowing the contractor to self-
  certify, and there was not a third party oversight of this in
  an effective way.
  Ms. Lavan, you are Vice President of Ethics and Business
  Conduct for Lockheed, correct?
  

• 

  Ms. Lavan

  At 02:35:36
  

  That is correct. Actually, right now I am Vice
  President of Internal Audits since February.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  But you were at the time.
  

• 

  Ms. Lavan

  At 02:35:36
  

  For the past three and a half years since
  October of 2003.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  When you got an ethics complaint, what was
  your procedure for dealing with it?
  

• 

  Ms. Lavan

  At 02:35:36
  

  Well, just as a bit of background on Lockheed
  Martin and its ethics program, we have a very solid program
  that is comprised of a number of components. One of the most
  important components is that we have ethics officers at each of
  our major locations, for instance, here where Deepwater is
  located. And so, those ethics officers are tasked with taking
  in any kind of complaints that employees bring forward.
  So they are to conduct thorough and complete investigations
  of any complaints that are brought forward, and that is what
  Mr. DeKort brought forward in October of 2004 to the ethics
  office.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  He brought forth very technically complex
  complaints?
  

• 

  Ms. Lavan

  At 02:35:36
  

  He did, yes, and the ethics officers that
  investigated it, both had engineering backgrounds.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  They had the technical expertise to evaluate
  the complaint from Mr. DeKort. Then in what way was it disposed
  of?
  

• 

  Ms. Lavan

  At 02:35:36
  

  They conducted an investigation that took over
  two months. They looked at all his concerns, talked to people
  on the program and reviewed documents and determined that his
  concerns about an ethical issue were not substantiated and that
  they, we believed, they believed that the customer was well
  informed and involved in the decision-making process on the
  issues that were raised.
  I do want to mention that Mr. DeKort at that time had
  raised the radio issue.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Yes.
  

• 

  Ms. Lavan

  At 02:35:36
  

  It was not investigated because, as Mr. DeKort
  himself mentioned to the Committee, it was replaced under
  warranty by Lockheed Martin. So those radios were never put on
  the boat.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Do you have a document of exoneration, of
  self-exoneration of Lockheed?
  You said the issue was resolved, and it was determined that
  there was not an ethical issue here. Was that in writing?
  

• 

  Ms. Lavan

  At 02:35:36
  

  The issue about the radio?
  

• 

  Mr. Oberstar

  At 02:35:36
  

  No. The other, the previous question.
  

• 

  Ms. Lavan

  At 02:35:36
  

  We keep a record of our ethics investigations.
  That is not something we typically share with the complainants.
  It is internal to Lockheed Martin.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Mr. DeKort said that you told him that the
  official response to the allegations, that his allegations were
  baseless and had no merit. Is that how the ethics issue was
  resolved?
  

• 

  Ms. Lavan

  At 02:35:36
  

  Actually, there were three separate ethics
  investigations. As Mr. DeKort continued to be unsatisfied with
  the results of the investigations, they went to increasingly
  different levels.
  The next level involved what we call our business area
  where we put together a team of experts that had technical
  background, procurement background as well as programmatic
  background, and they again looked at the original
  investigation. They talked to people on the program, looked at
  documents, talked to Mr. DeKort and found that his concerns
  were unsubstantiated because they were being worked with the
  customer through the customer system.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Did you dismiss the DeKort complaint, ethics
  complaint, on grounds of ethics or on substance of the work to
  be accomplished?
  

• 

  Ms. Lavan

  At 02:35:36
  

  But we never dismissed his complaint. We took
  his complaint very seriously and invested.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  You said it was disposed of.
  

• 

  Ms. Lavan

  At 02:35:36
  

  Internally, we talked. We would go back to Mr.
  DeKort.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  You found it not substantiated.
  

• 

  Ms. Lavan

  At 02:35:36
  

  Exactly, yes.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  So I call that a dismissal.
  That is a very important element in this whole inquiry.
  When you said that you hold these matters internally, could the
  Committee receive a copy of your internal documents for our
  review if you wish in a confidential manner?
  

• 

  Ms. Lavan

  At 02:35:36
  

  Yes, the ethics investigation certainly. You
  would be entitled. You could receive a copy of that.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  We would like to have that.
  

• 

  Ms. Lavan

  At 02:35:36
  

  They are actually, they are fairly substantial
  documents.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  It is a very substantial issue, and I think
  it goes to the core of our inquiry here.
  In the end, did your office at the time or did Lockheed
  conclude that the deficiencies existed as listed by DeKort but
  that Lockheed was not responsible for them because the Coast
  Guard took contractual delivery of the boats?
  

• 

  Ms. Lavan

  At 02:35:36
  

  The way we looked at it, then there was a third
  investigation which I spoke with Mr. DeKort myself and looked
  at the program myself, personally, and the way we looked at it
  from the issues that Mr. DeKort raised was that what was the
  customer informed, were they fully aware and were there
  decisions being made in terms of for the benefit of the
  customer and the program?
  We knew that at that point, that SPAWAR had approved the
  TEMPEST. It has passed the TEMPEST test. We also knew the
  ongoing IPT was looking at the C4ISR specifications and that
  was to be resolved on a contractual basis. So we knew that
  there was ongoing dialogue and debate between the customer and
  Lockheed Martin.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  In the end, Lockheed took the position that
  if the Coast Guard wanted the problems fixed, they would deal
  with it, extend the schedule and add the funds to do so. Is
  that correct?
  

• 

  Ms. Lavan

  At 02:35:36
  

  We viewed that there was an open and honest
  dialogue between Lockheed Martin and the Coast Guard and that
  both Lockheed Martin and the Coast Guard through the IPT
  provisions of the contract would reach a decision that was well
  informed on both sides.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Mr. Chairman, I will withhold at this point.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. Coble?
  

• 

  Mr. Coble

  At 02:35:36
  

  Thank you, Mr. Chairman.
  I was here earlier but I have missed a good portion of this
  panel. It appears what we have is a dependable, respected armed
  service in the U.S. Coast Guard and two highly regarded defense
  contractors plagued by an expensive fiscal error.
  Dr. Mackay, let me ask you a question. In light of the
  Commandant's proposal for a new direction for the Deepwater
  program and the problems that have been revealed today and in
  previous hearings, what suggestions would you have to improve
  the protocols and the procedures that govern acquisition,
  design, construction, coordination, et cetera, for future
  projects?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Sir, I will limit my remarks to the Deepwater
  project. I think that the course of action that the Commandant
  has laid down is prudent and goes to a direct and active
  dealing with issues that have surfaced on this program.
  Industry, both Lockheed and Northrop Grumman, both myself, Mr.
  Anton, and well above us extending to our CEOs, have been in
  active consultation and discussion about the way forward on
  this program.
  The new acquisition plan that the Commandant has laid out,
  the features of it, some of the other things at a lower level,
  like the joint configuration control board, the incorporation
  of ABS, I think are an affirmative series of steps to meet the
  challenge and the issues that have been raised by this
  Committee and other bodies. We look forward to continuing to
  cooperate with the Coast Guard to effectuate those steps to
  improve this program and to continue to deliver the kind of
  performance that I alluded to in my opening statement.
  The fact that every Coast Guard Station now has new HH-65
  Charlie helicopters, that all of their medium and high
  endurance cutters in the Coast Guard have been touched by not
  one but two rounds of upgrades, the fact that though we have
  spent a lot of the program time upgrading legacy cutters, in
  this year of 2007 we now turn to deliver all new systems--the
  HC-144, and eventually the national security cutter, and
  redeliver the C130Js to the Coast Guard, which will be their
  longest range and most capable maritime patrol aircraft.
  There is a lot that can be gained as this program goes
  forward. I think the Commandant has laid out a prudent and
  well-considered way to get there.
  

• 

  Mr. LoBiondo

  At 02:35:36
  

  Thank you, sir. Let me ask you this, Doctor.
  What level of responsibility do the system integrator and the
  contractors have for the failure of the 110-foot conversion
  project?
  

• 

  Mr. Mackay

  At 02:35:36
  

  Lockheed Martin is responsible for the C4ISR. I
  am not aware of a C4ISR issue that is directly connected to the
  issues that led to the lay-up of these cutters.
  

• 

  Mr. LoBiondo

  At 02:35:36
  

  Anybody else want to weigh in on that?
  Mr. Stanley, Mr. Sampson, the naval architect who was
  employed by the Navy and the Coast Guard, appeared on the first
  panel. Did he ever contact you regarding this matter?
  

• 

  Mr. Stanley

  At 02:35:36
  

  Not to my recollection, no, sir.
  

• 

  Mr. LoBiondo

  At 02:35:36
  

  Do you know whether he contacted anyone in
  your company?
  

• 

  Mr. Stanley

  At 02:35:36
  

  It could have happened. But not to my
  knowledge.
  

• 

  Mr. LoBiondo

  At 02:35:36
  

  All right. I thank you, Mr. Chairman. I yield
  back.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much.
  

• Mr. Taylor

  At 02:35:36
  

  
  First of all, I want to thank all of you
  gentlemen and ladies for staying around till 8:20 tonight. I am
  going to go back to my question to the last panel. Well over
  $50 million was spent, eight working Coast Guard cutters are
  now rendered useless, and everybody says it was not me. Now if
  I were running a large supply boat company and had tasked a
  company to design a change to those vessels to make them
  longer, and had hired a company to implement that, and then I
  found out in a subsequent Coast Guard inspection that those
  vessels are now rendered useless, I would do one of several
  things. I would sue the company that designed it, I would sue
  the company that built it, and I would tell all the authorities
  involved that my company is not going to do another dime's
  worth of business with any of you until someone accepts
  responsibility.
  The reason I say that is that I am fortunate enough to
  serve, as is Mr. Cummings, not only on this Committee but also
  on the Armed Services Committee. There is a heck of a lot of
  similarities between this vessel and the LCS; both very similar
  thin hulled vessels designed to operate in very tough
  conditions. The Navy is counting on the LCS program to ride to
  the rescue as far as getting the numbers of the fleet back up.
  We are having substantial problems with the LCS program dollar-
  wise. Some very serious mistakes I think were made in the
  construction of it, not addressing problems as they arose but
  continuing to build the vessel so that when it came time to fix
  those things it cost a heck of a lot more than it should have.
  So again, using that analogy, I do think this Congress has
  some very substantial leverage when it comes to someone
  stepping forward. It is really easy in my capacity to say we
  are not going to build any LCSs. If the folks who made the
  screw-ups here are being counted on to do great work there, and
  no one is going to admit a mistake, I have got to believe they
  are going to make the same mistakes on the next one. So at what
  point does one of you step forward and say we made a horrible
  mistake. We are not going to bill our Nation $50 million-plus
  for the mistakes we made and we are going to accept
  responsibility for ruining eight ships that still had a good
  ten to fifteen years of life left in them.
  That really is an option that is available to me. I cannot
  guarantee that the other members of my Subcommittee or the
  other members of my Committee will go along with it. But at
  this point, I am dead serious when I make that statement. I
  cannot look 700,000 Mississippians in the eye and say you all
  have treated us fairly, and I sure as heck cannot look 300
  million Americans in the eye and say that you all have treated
  our Nation fairly.
  I will open that up to the panel, because, apparently, all
  of the decisionmakers are represented right there. I think the
  stakes are pretty high, folks. I am giving you an opportunity
  to tell me what went wrong and who is going to accept
  responsibility. Because we do know that there are eight ruined
  ships that the Coast Guard is not even trying to fix at this
  point. They are either going to scrap them or sink them and
  hope that it is swept under the rug. It is now swept under the
  rug. It is a very real problem and it is a problem that could
  very well occur again in the LCS. I cannot in good faith let
  that happen.
  

• 

  Mr. Mackay

  At 02:35:36
  

  Mr. Taylor, I will tell you that I have met
  with, and Lockheed Martin has put forward to the Coast Guard
  for the C4ISR----
  

• Mr. Taylor

  At 02:35:36
  

  Let us talk about the hull, sir. Because the
  reason that the ships are being retired is not because the
  radios were not waterproof, which strikes me as really dumb, or
  that we had vulnerabilities on the communications, particularly
  if you are a Colombian drug lord and want to know whether or
  not the Coast Guard is going to be in a certain place, and
  there are countries around the world that might be cooperating
  with them, so I can see that one, too. But the reason the ships
  are being retired is because of hull failure. No one has
  stepped forward to say we screwed up--the builder says he did
  not do it, the designer says he did not do it. I can tell you
  one thing, apparently the two welders I hired in Bay St. Louis
  with a sketch that I did on the back of an envelope, we built a
  boat that still works. All these experts apparently could not
  do what those couple of guys in Bay St. Louis did for me.
  

• 

  Mr. Mackay

  At 02:35:36
  

  Mr. Taylor, I cannot address the hull aspects.
  Lockheed Martin was not under contract for that. But I will
  tell you that we have approached the----
  

• Mr. Taylor

  At 02:35:36
  

  I think, as a point of clarification, I think
  Lockheed Martin was the lead contractor on that.
  

• 

  Mr. Mackay

  At 02:35:36
  

  No, sir. No, sir.
  

• Mr. Taylor

  At 02:35:36
  

  You were not involved in any way in the
  stretching of that vessel?
  

• 

  Mr. Mackay

  At 02:35:36
  

  No, sir, not with respect to the hull, the hull
  machinery and the electricity. No, sir. That was a----
  

• Mr. Taylor

  At 02:35:36
  

  You were not involved in the design?
  

• 

  Mr. Mackay

  At 02:35:36
  

  No, sir.
  

• Mr. Taylor

  At 02:35:36
  

  You did not hire someone to do the design work?
  You did not pay the folks who did do the work?
  

• 

  Mr. Mackay

  At 02:35:36
  

  No, sir. As a point of clarification, sir, and
  then I will turn it over to my partners to comment. In ICGS,
  Lockheed Martin is responsible for C4ISR. With respect to
  shipbuilding, that is the responsibility of Northrop Grumman
  and its partners, one of which is represented here in Halter
  Bollinger. What I wanted to tell you is, in respect to C4ISR,
  we have discussed with the Coast Guard Lockheed Martin
  proposals for the reuse of the 123 C4ISR data, equipment on the
  123s, and the Coast Guard has considered that and they will
  dispose of that as they deem fit. We were not contractually
  responsible or otherwise participated in the design or
  fabrication of the hull. That was a responsibility under the
  joint venture of Northrop Grumman Ship Systems and their
  partners on that side.
  

• Mr. Taylor

  At 02:35:36
  

  Mr. Anton?
  

• 

  Mr. Anton

  At 02:35:36
  

  The Coast Guard yesterday made the announcement
  that they were going to lay up the 110 to 123 converted
  vessels. In that announcement, the Commandant indicated that
  there were multiple pieces of analysis that have been done and
  that the root cause cannot be determined based on that
  analysis. Now, we are not privileged to that analysis, but we
  have requested a copy of it.
  We need to determine the cause of the failure, sir. When we
  determine the cause of the failure, we will determine
  accountability. And when we determine accountability, we will
  know who needs to stand up.
  

• Mr. Taylor

  At 02:35:36
  

  How long does that take? What was it, two years
  ago, right around the time of the hurricanes? Now I realize
  some of us were busy with other things. But to the best of my
  understanding, the problems on Matagorda were better than two
  years ago.
  

• 

  Mr. Anton

  At 02:35:36
  

  The first problem on Matagorda did occur two
  years ago. We immediately dispatched a team, both the Coast
  Guard, industry, Bollinger, Northrop Grumman, Bollinger, and
  the Coast Guard dispatched a team to the Matagorda to survey
  that ship and to find out what had happened and why the ship
  had buckled. In that survey, we found an unwelded stringer
  right in the area where the buckling occurred. When we went
  back and reviewed the analysis, we felt like the stringer had
  caused the problem. At that point, Bollinger welded the
  stringer, under no cost, and we thought we had the problem
  solved.
  For the record, I will have to tell you for the record the
  string of events, but I cannot tell you when the next failure
  occurred, but I can tell you all eight boats were already in
  conversion. When the next failure occurred, I believe four or
  five of the boats had been delivered.
  So, it does take a long time. A lot of people have looked
  at it. Just today, testimony from Scott Sampson indicates that
  the 1997 ABS rules were flawed. It takes time. We were not
  aware of that comment until today.
  With respect to the design, and with respect to the
  fabrication of the extension, and the vessel, I will have to
  let Mr. Stanley comment on that.
  

• Mr. Taylor

  At 02:35:36
  

  For the record, because I think I have heard
  otherwise and so I would like a clarification from you
  gentlemen under oath, for the record, was anyone from Bollinger
  Shipbuilding ever invited to look at the vessels after the
  problem occurred to see if they could identify what they
  thought was causing the problem?
  

• 

  Mr. Anton

  At 02:35:36
  

  I will let Mr. Stanley answer that.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Will the gentleman yield? The gentleman is
  right on with the line of questioning. In fact, I was going to
  pursue it at a later point. But at this stage, Bollinger also
  did the Navy's extension of the 170 to 179 foot and you had no
  failures there.
  

• 

  Mr. Stanley

  At 02:35:36
  

  That is correct.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  From what I understand, the work proceeded by
  strengthening the hull. And you advised the Coast Guard that
  they needed to do the same because they were doing a much
  greater percentage extension of hull than the Navy was doing
  and they did not take your counsel. I want you to add that on
  in your response to the question that the gentleman from
  Mississippi raised.
  

• 

  Mr. Stanley

  At 02:35:36
  

  I will be glad to answer all the questions. If
  we could, Congressman Taylor, there are several periods of
  damage to the Matagorda and you have got to decipher and
  discuss for clarity where Bollinger was involved and where it
  was not. I would like to offer if I could, and I think it might
  be helpful, if we would spend a couple of seconds and go back
  over the history of the Matagorda and then----
  

• Mr. Taylor

  At 02:35:36
  

  Okay. Can we go back to my direct question
  first, and then I certainly want to give you an opportunity to
  say what you want to say.
  

• 

  Mr. Stanley

  At 02:35:36
  

  All right.
  

• Mr. Taylor

  At 02:35:36
  

  I thought I heard representatives from
  Bollinger Shipyard say that they had never been invited to
  inspect the failed vessels so that they could give their
  opinion of what went wrong.
  

• 

  Mr. Stanley

  At 02:35:36
  

  That is correct. You heard that in your office
  and I was there the day it was said.
  

• Mr. Taylor

  At 02:35:36
  

  That seems to be a little different from what
  the gentleman from Northrop just said.
  

• 

  Mr. Stanley

  At 02:35:36
  

  No, it is not.
  

• Mr. Taylor

  At 02:35:36
  

  So, again, I am giving everyone an opportunity
  to clarify that.
  

• 

  Mr. Stanley

  At 02:35:36
  

  That is what I was trying to do. I need to
  spend just a moment with you. After the Matagorda came out of
  completion at Bollinger's of the work that was contracted under
  Deepwater, Matagorda went into what they call a PDMA, it went
  into a maintenance period. So there was work done on the ship
  that was separate and apart from the Deepwater scope of work.
  Before it went into its PDMA, it went through an operational
  test evaluation period to see if it effectively would perform
  to the specifications of the contract for the conversion. It
  went into the PDMA. Then after the PDMA, it went to Key West,
  and then following its arrival at Key West it left Key West
  fleeing one of the storms that year enroute to Miami. This is
  the September timeframe of 2004. In fact, several of the boats,
  all of the boats in Key West left for Miami fleeing that same
  storm that year.
  The first damage on Matagorda, the buckling damage happened
  at that time. That was reported to Bollinger. The ship was
  brought back to Bollinger, to Lockport, Louisiana, and repaired
  by Bollinger, with a joint discussion with the Coast Guard of
  what had happened, what has caused the failure, and what should
  be done to correct it. Northrop Grumman was in that discussion,
  ICGS was in that discussion, all the Coast Guard collectively
  was in that discussion. We recognized that in the early
  calculations of the 110's conversion that some mistakes were
  made in those calculations, we all identified those mistakes,
  and for the mistakes that Bollinger made, Bollinger certainly
  stepped up to the table and said that was a mistake and this is
  the correct number and this is what should be done with this
  number.
  Then what happened was that ship sailed. It had other
  damage and it had other decisions made to correct that damage.
  Believe it or not, I did not know until January, in some of the
  Coast Guard's testimony, of some of the repairs that were done
  to the Matagorda after it left us.
  So it is very difficult for us as a shipyard. You
  personally have known our owners many years. We are very proud
  of our work and very proud of what we have done with the Coast
  Guard. We built all the hourglass, we built all the CPBs. Our
  employees have married Coast Guard people, our employees have
  son and daughters that serve in the Coast Guard. We take this
  very seriously. We are at a loss as to what happened. And
  although we respect the Commandant's decision, we do not
  believe that this question should remain unanswered. There is
  an answer. You are absolutely correct.
  The Commandant, and I cannot speak for him, but I think his
  decision was that in the best interest, considering everything,
  it is better to decommission those ships and move forward. I
  think that is what he is thinking, but I certainly cannot speak
  for him. But if you want an answer, there is an answer. And
  there has been, as Mr. Anton said, many independent studies
  done that neither Bollinger nor Northrop has seen. I think we
  could be very helpful in resolving the situation. But that
  information needs to be shared.
  

• Mr. Taylor

  At 02:35:36
  

  Well, I appreciate the gentleman's answer. I
  stick by what I am saying. If all the parties involved are also
  involved in the LCS and none of the parties involved are going
  to step forward and say that is the problem, this is who ought
  to pay, then I do not see why our Nation ought to be doing
  business with you for the LCS.
  Mr. Chairman, I yield back my time.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Mr. Chairman, I would like to follow up on
  

• Mr. Taylor's

  At 02:35:36
  

  Mr. Stanley has said some extremely important
  here. We had a loss as to what happened. There should be an
  answer. And is the answer that Bollinger built both the 170 and
  the 179, and the 110 and the 123. The 179 did not crack because
  the hull and the hull girders were strengthened. The Navy
  specified that strengthening and the Coast Guard did not.
  

• 

  Mr. Stanley

  At 02:35:36
  

  That is not quite correct, Mr. Chairman. If I
  could, let me separate two issues for you.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  All right.
  

• 

  Mr. Stanley

  At 02:35:36
  

  The patrol coastals, the PCs for the Navy were
  strengthened very early after their delivery into service, long
  before the extensions were added to them and for a much
  different reason. The patrol coastals, like the Island Class
  and like the specifications for the 123, and like most
  operating equipment in the marine and in the air environment,
  they have operational restrictions. In the case of the PC, the
  PC was actually designed and specified to work in the
  Latorials, but it found itself making many transits on open
  ocean.
  And as it made transits in normal Navy operations, it made
  those with large ship convoys at convoy speeds. Sometimes the
  speed of the convoy and the size of the ship would get into
  weather that would not affect big ships but it really affected
  small ones, like the PC. And we had cracking on the PC because
  the PC was operating outside of its planned and designed
  environmental envelop. We strengthened the PCs which allowed
  them to then transit with the big ships in heavy seas at
  transit speeds.
  Much later on some of the PCs, not all, but some of the PCs
  received stern extensions for a very similar reason that we
  extended the 110s to all out for the boarding of a small rigid
  hull inflatable, for the safe boarding and exit of a rigid hull
  inflatable. But the two are not necessarily connected together.
  I think that is very important. It is true that the hulls of
  the PCs were strengthened. In the case of the 110, this
  calculation----
  

• 

  Mr. Oberstar

  At 02:35:36
  

  But did the Navy specify hull strengthening
  for the extension of the 170 to 179? Did they not give a
  specific----
  

• 

  Mr. Stanley

  At 02:35:36
  

  No. No. Because the hulls had already----
  

• 

  Mr. Oberstar

  At 02:35:36
  

  That is what the Navy told us.
  

• 

  Mr. Stanley

  At 02:35:36
  

  Well, no. I do not think there is a----
  

• 

  Mr. Oberstar

  At 02:35:36
  

  The Carderock division, the David Taylor
  Model Basin specialist told us that, and you are saying they
  did not?
  

• 

  Mr. Stanley

  At 02:35:36
  

  I think it is a matter of timing. The Navy and
  Bollinger strengthened the hulls on the PCs, all of the PCs,
  long before, long before, several years before the stern
  extensions were added. So to say that the Navy instructed
  Bollinger to increase the strength of the hull because they
  wanted to add stern is incorrect. The hull had already been
  changed for another reason and its strength increased for
  another reason.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  All right. We will desist there because there
  are other members who have questions and we need to go on, in
  all fairness. Thank you, Mr. Gilchrest, for forebearing here.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. Gilchrest.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Thank you, Mr. Chairman. I guess I would
  like to stick with the hull design here for a little while. Mr.
  Anton, you are executive vice president of Northrop Grumman; is
  that correct?
  

• 

  Mr. Anton

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  And so you, working with the ICGS, got the
  contract to work on the hulls on these 110s; is that correct?
  

• 

  Mr. Anton

  At 02:35:36
  

  ICGS is the prime contractor. When the contract
  comes into ICGS, the HM&E portion of the work is given to the
  Northrop Grumman partner of the joint venture.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  So Northrop Grumman has this contract and
  you subcontract to Mr. Stanley, with Bollinger?
  

• 

  Mr. Anton

  At 02:35:36
  

  We did.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  So when Bollinger Shipyard was done with
  each of these boats at various times, what was your
  responsibility before the boat was put into service after
  Bollinger Shipyard finished the boats?
  

• 

  Mr. Anton

  At 02:35:36
  

  Could you ask that again?
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Northrop Grumman is the contractor to extend
  the hull or make the 110 into the 123. So you subcontract to
  Bollinger Shipyard to do the work.
  

• 

  Mr. Anton

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Once Bollinger Shipyard is done, what is
  your responsibility to ensure that the work was done
  appropriately?
  

• 

  Mr. Anton

  At 02:35:36
  

  During the production effort at Bollinger, we
  had a QA plan and a quality assurance team and we worked side-
  by-side with the program office from the Coast Guard reviewing
  the work that Bollinger was accomplishing. In addition to that,
  the Coast Guard again formed an in-serve team, and in service
  inspection team which actually took the ship out on trials and
  then made a recommendation as to whether to accept the ship or
  not.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Apparently you and the Coast Guard accepted
  each of these ships at various times.
  

• 

  Mr. Anton

  At 02:35:36
  

  Bollinger certified to Northrop Grumman that the
  work was in accordance with the specs. In the case of the hull
  extension, ABS monitored the structural part of the conversion
  process and they also signed a certification that the work was
  done in accordance with the design and we accepted that
  certification based on our on site QA team, and we certified
  that, yes.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  So as a result of that, looking in hindsight
  at each of these eight ships going into service, the Matagorda
  7 February 2005 went into service and the hull problem was
  identified 10 September 2004. That is what I have here. Rather
  than go through all the dates, in hindsight, was there a design
  flaw in this extension, or was there less than top grade
  material used? Mr. Stanley and Mr. Anton, what was the problem
  with the breach of the hull?
  

• 

  Mr. Anton

  At 02:35:36
  

  I am going to tell you we have to determine the
  root of the cause for the failure then we will understand and
  we will be able to answer that question.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Are each of the eight ships different in
  their failure?
  

• 

  Mr. Anton

  At 02:35:36
  

  Yes. Each ship, in fact, fails in a different
  area. The modeling that has been done to date, to my knowledge,
  I know the modeling that we have done, but the modeling I
  believe that the Coast Guard has done as well has not been able
  to predict the occurrence of these failures on each vessel.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Has there ever been a 110 extended to a 123
  that passed?
  

• 

  Mr. Stanley

  At 02:35:36
  

  No, not to my knowledge.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  This is the first time.
  

• 

  Mr. Stanley

  At 02:35:36
  

  Yes.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Did you, Mr. Anton or Mr. Stanley, who
  conducted the technical review of the design prior to the
  beginning of construction?
  

• 

  Mr. Stanley

  At 02:35:36
  

  We initiated the design which Northrop
  reviewed as well as the Coast Guard reviewed in the design
  process. Before we took the design to construction or to
  conversion, that design was generated and vetted many different
  times.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  How was the design vetted? Was it vetted
  with third parties, other engineers, other boatyards, other
  shipbuilders?
  

• 

  Mr. Stanley

  At 02:35:36
  

  No. It was vetted inside of the Deepwater or
  the ICGS structure. Parts of that design, the stern extension,
  the superstructure, was vetted to ABS outside to review that
  design.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Now the hull failures went from 10 September
  2004 to 24 March 2006. Can you tell us about once you had a
  failure in 2004, was there any sense or anticipation that you
  were going to have another failure in another boat? Was the
  design changed in future boats?
  

• 

  Mr. Stanley

  At 02:35:36
  

  As I outlined for Congressman Taylor, we were
  involved in the initial failure of the Matagorda.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  You say you were not involved?
  

• 

  Mr. Stanley

  At 02:35:36
  

  No, I said we were involved. The boat was
  brought back to Louisiana, calculations reviewed with the Coast
  Guard, and hull strengthening on the Matagorda and all the
  boats that followed her was applied. Failures that happened
  after that point, and studies that happened after that point,
  and events that happened after that point, we do not have any
  knowledge of. That has not been shared with us.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  So you were the contractor that worked on
  the hulls of all these eight boats?
  

• 

  Mr. Stanley

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  But you are not familiar with the problem of
  the breaches in the hull other than the Matagorda?
  

• 

  Mr. Stanley

  At 02:35:36
  

  That is pretty much correct. Let me say, we
  are not the only contractor that worked on the breaches in the
  hull. As I reported, the ships left us, they went into an
  availability, and then at some point in time those ships also
  received modifications to their hull structure that----
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Where did they receive modifications? From
  different shipyards----
  

• 

  Mr. Stanley

  At 02:35:36
  

  From different shipyards, in Savannah and
  Alabama.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  But regardless of the modifications, every
  one of them that had this extension failed.
  

• 

  Mr. Stanley

  At 02:35:36
  

  I am not sure of that. We do not have those
  records of how many boats failed.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:35:36
  

  All eight failed. According to what I saw.
  All eight of them failed.
  Mr. Kagan, you can go ahead.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Thank you, Mr. Chairman. I recognize the hour is
  late and the interest is still quite high, at least for this
  new Representative. I have been here 100 days and change, so I
  am new to shipbuilding. I am a physician, a doctor. I design
  laboratory tests. I have never designed a boat. I want to thank
  you all for being here and giving your best opinion. But I am
  still trying to sort out in my mind about the these ships that
  have a hull that does not work. It is obvious to me that the
  design was less than perfect, and that no matter who touched
  and tried to repair the ship after this design was put into
  place, they were unable to keep it together. So I am trying to
  decide where the buck stops. Earlier when you were testifying
  about the electrical wire and how well or unwell it is wrapped
  for security purposes, I got a little bit dizzy and confused
  trying to decide who is in charge. So with regard to who is in
  charge, where does the buck stop with regard to the hull
  design? Would that be Northrop? Would that be Bollinger? And
  just to make it easy for me, I built this for you. I will hand
  it to you and you can pass it around, but when it stops that is
  the person I want to talk to. The buck stops here. Who is going
  to take it?
  

• 

  Mr. Anton

  At 02:35:36
  

  Bollinger did the design work for the 110 123
  extension. And so I think it is appropriate that Mr. Stanley
  answer your question.
  

• 

  Mr. Kagan

  At 02:35:36
  

  So, Mr. Stanley?
  

• 

  Mr. Stanley

  At 02:35:36
  

  I would be glad for the buck to stop here.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Very good.
  

• 

  Mr. Stanley

  At 02:35:36
  

  I can only supply the information that we
  have, and I can only tell you the reason that I am here today,
  and one of our basic corporate tenets in our company is to not
  shy away from good times or bad times, I cannot answer your
  question where the buck stops yet. I really cannot. I can tell
  you that we did the design.
  

• 

  Mr. Kagan

  At 02:35:36
  

  All right. So the answer is, yes, you did do the
  design for the hull?
  

• 

  Mr. Stanley

  At 02:35:36
  

  We did the design.
  

• 

  Mr. Kagan

  At 02:35:36
  

  And if that design has been proven to be
  inadequate for the task at hand, would you agree with me that
  your company then would be responsible for the failures that
  follow?
  

• 

  Mr. Stanley

  At 02:35:36
  

  That could be possible.
  

• 

  Mr. Kagan

  At 02:35:36
  

  And so if I represent the people in northeast
  Wisconsin and we got something designed, the designed failed,
  would it be too much to ask for our money back?
  

• 

  Mr. Stanley

  At 02:35:36
  

  You certainly could do that.
  

• 

  Mr. Kagan

  At 02:35:36
  

  If you did accept damages and we did get all of
  our money back including loss of use for these eight ships in
  their future years, would that permanently damage your company?
  Would that put you out of business?
  

• 

  Mr. Stanley

  At 02:35:36
  

  There is a question before that. There are
  very clear ways contractually in Deepwater as well as naval
  shipbuilding that Mr. Taylor refers to, to determine where the
  buck stops.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. Stanley, we cannot hear you. This
  testimony is, I really want to hear this.
  

• 

  Mr. Stanley

  At 02:35:36
  

  There are very clear ways and established ways
  to settle where the buck stops. There are contractual
  obligations that are placed on the contractors, there are
  obligations the Government undertakes in its side of the
  contract, and in the case of the 110 and in the case of any
  dispute where the contractors and the Government have a
  problem, there are very clear ways forward. We encourage ways
  at Bollinger to be pursued. And I hope that answers your
  question.
  

• 

  Mr. Kagan

  At 02:35:36
  

  It does in part, and it leads to some other
  queries. When you do design a piece of work to extend a ship
  off the rear end, I am sure you had other people take a look at
  your plans and your designs. Is that true?
  

• 

  Mr. Stanley

  At 02:35:36
  

  Yes. And I cannot tell you how many.
  

• 

  Mr. Kagan

  At 02:35:36
  

  But would that also mean that there might be
  other people besides your own company that should accept at
  least partial responsibility for this failure of design?
  

• 

  Mr. Stanley

  At 02:35:36
  

  That is part of the process that is described
  that I tried to describe.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Are any of those companies represented here this
  evening?
  

• 

  Mr. Stanley

  At 02:35:36
  

  Well, the Coast Guard is here, Northrop
  Grumman is here.
  

• 

  Mr. Kagan

  At 02:35:36
  

  So that is two other individuals.
  

• 

  Mr. Stanley

  At 02:35:36
  

  And Bollinger is here. I do not know if there
  are ABS people here, I have not seen them. But certainly all
  three of those groups have a responsibility to share a part of
  the success or failure of a contract.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Well, I want to applaud your honesty in
  accepting the buck stops here sign. I think it takes a great
  deal of courage to be here when things are bad. I know in the
  practice of medicine sometimes doctors will do everything right
  but things still do not work out; people still succumb even to
  an illness that is treated appropriately. I am a little
  saddened because no one has really gotten to the bottom line in
  figuring out why this unprecedented modification of a light
  weight, high speed craft has not been analyzed to the point
  where you could present the data here this evening to someone
  who really understands shipbuilding that could explain exactly
  where a single or multiple failures occurred in the design.
  But, obviously, this is a troubled project, and you would
  accept that.
  

• 

  Mr. Stanley

  At 02:35:36
  

  Yes, it is.
  

• 

  Mr. Kagan

  At 02:35:36
  

  I applaud you for accepting if not total at
  least partial responsibility. I yield back my time.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much. Mr. Stanley, I just
  heard what you said and let me make sure I am clear. Are you
  trying to tell us, because I just want to make sure I am clear
  on this because I want the record very, very, very clear
  because a lot is riding on what you just said, are you telling
  me that you believe that Bollinger is responsible for the hull
  problem? Is that what you are telling us?
  

• 

  Mr. Stanley

  At 02:35:36
  

  No, not at all.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Then what are you saying? Because I want to
  make it clear. I want to make sure that whoever is responsible,
  going back to what Mr. Taylor was talking about, is held
  responsible because we are not going to be able to prevent
  these things from happening in the future if we do not get to
  the bottom line. And so, as I listen to your answers that you
  just gave, I am sitting here as a lawyer and I am saying if
  this were my case and I were representing Northrop Grumman, I
  would be saying hallelujah because apparently somebody had
  taken responsibility. I am just asking you to be clear. What
  are you saying? He has talked about the buck stopping, and when
  I hear the buck stopping and hear what you just said, it
  sounded like you were accepting liability here. Sworn
  testimony, I would think somebody would be able to take that
  into a court of law and do something with it. So, I am just
  curious.
  

• 

  Mr. Stanley

  At 02:35:36
  

  I would like to be very clear with you. I
  thought I was very clear with the Congressman. I said there is
  a process in Federal contracting, a very clear one, that
  adjudicates disputes and the adjudication of the dispute places
  responsibility and accountability. In our interchange, the
  Congressman asked me how many people was here in that process
  that could have responsibility, and I said three.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay. I got you. I just wanted to make that
  clear and I wanted to make sure that the people back at your
  company would not be mad at you when you got back.
  Ms. Lavan, let me go to something that you said that is
  troubling me. You said that the Coast Guard was kept informed
  when we were talking about Mr. DeKort's complaints, and there
  is a letter sitting up there somewhere from Mr. DeKort where he
  made some complaints, would you pass that to her, Mr. Rodgers,
  you said that the Coast Guard was kept informed of the various
  things that were happening with this contract. Is that correct?
  

• 

  Ms. Lavan

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Would they have been kept informed of the
  topside issue?
  

• 

  Ms. Lavan

  At 02:35:36
  

  You are referring, first of all, to the email,
  this is January 2004, before the ethics complaint came in,
  which was October 2004. And in terms of the topside equipment
  where I was talking about the flowdown of the specifications
  and where, as Dr. Mackay was talking about, where the sort
  should have been placed, Coast Guard was part of the IPT, which
  is the integrated product team, that was looking at that issue.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay. So when DeKort raises topside, and that
  memo was January 2004; is that right?
  

• 

  Ms. Lavan

  At 02:35:36
  

  That is right.
  

• 

  Mr. Cummings

  At 02:35:36
  

  It was dated January 2004, the Matagorda is
  received and a DD-250 is dated around March 2004; is that
  right?
  

• 

  Ms. Lavan

  At 02:35:36
  

  Yes.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Now the Coast Guard becomes aware of
  noncompliance, according to the IG, and I notice everybody is
  very familiar with the IG report, which I am very impressed
  with, thank you very much, July of 2005. Are you aware of that?
  

• 

  Ms. Lavan

  At 02:35:36
  

  Yes.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And August 29 of 2006, the Coast Guard gets a
  letter from the integrated team indicating that the topside
  equipment did not meet minimum standards. Are you familiar with
  that?
  

• 

  Ms. Lavan

  At 02:35:36
  

  Not specifically, no.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Well they did. Are you familiar with that,
  Mr. Mackay?
  

• 

  Ms. Lavan

  At 02:35:36
  

  I think we are talking about two different----
  

• 

  Mr. Cummings

  At 02:35:36
  

  All right. Help me.
  

• 

  Ms. Lavan

  At 02:35:36
  

  One is the Tempest issue, the other is the
  topside equipment issue. The Tempest issue is the one that was
  approved by SPAWAR in March of 2004. Separate issues.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay. So the Coast Guard was made aware of
  that; is that right?
  

• 

  Ms. Lavan

  At 02:35:36
  

  The Coast Guard, as I understand it, was part of
  the testing.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Right. That clears that up. That is good.
  Ladies and gentlemen, any other questions? Well, we have
  heard a lot of testimony here today and, I will tell you, if I
  were a judge I would let a higher authority try to ferret all
  this out. I am being very frank with you. We have so many
  documents that, to be frank with you, show all kinds of
  inconsistencies. I am at a point right now where I have
  questions but I think it is better that I turn them over to
  somebody else, a higher authority, because this concerns me
  tremendously. Thank you very much. You are dismissed.
  We will now call our third panel. Mr. Debu
  Ghosh, Mr. Joe Michel, Lieutenant Commander Jacoby, and Ms.
  Martindale. Please come forward.
  If you will please repeat after me, I swear to tell the
  truth and nothing but the truth, so help me God.
  [Witnesses answered in the affirmative.]
  Thank you. We will begin with Mr. Ghosh.
  TESTIMONY OF DEBU GHOSH, NAVAL ARCHITECT, BRANCH CHIEF, U.S.
  COAST GUARD BOAT ENGINEERING BRANCH; JOE MICHEL, ASSISTANT
  DEPUTY FOR SYSTEMS IMPLEMENTATION, U.S. COAST GUARD NATIONWIDE
  AUTOMATIC IDENTIFICATION SYSTEM PROJECT; LIEUTENANT COMMANDER
  CHAD JACOBY, PROGRAM MANAGER, SCALEABLE COMPOSITE VESSEL
  PROTOTYPE PROGRAM SCIENCE AND TECHNOLOGY DIRECTORATE,
  DEPARTMENT OF HOMELAND SECURITY; AND CATHY MARTINDALE,
  CONTRACTING OFFICE CHIEF, COAST GUARD ENGINEERING AND LOGISTICS
  CENTER
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Good evening, Mr. Chairman and distinguished
  members of the Committee. It is a pleasure to appear before you
  today to discuss compliance with requirements of the Deepwater
  contract. I am Debu Ghosh, executive officer of the Coast
  Guard's Asset Project Office Standard Boats. I am a naval
  architect with over 33 years of experience specializing in the
  design of high speed craft. I have been in the boat engineering
  branch of the United States Coast Guard for the last 23 years,
  serving as the branch chief for the last 15 years. Mr.
  Chairman, I would like you to include my written statement in
  the record.
  I have a Bachelor's degree in naval architecture from IAT,
  a MBA from Tulane University in New Orleans, and a Master of
  Science degree from ICAF.
  I have been involved with all recent patrol boat
  acquisition programs in the Coast Guard including the 110
  Island Class, 87-foot coastal patrol boat, the 123-foot
  conversion, and the fast response cutter. My branch's
  participation in the Integrated Deepwater Systems 123-foot
  patrol boat program began in the spring of 2002 following the
  contract award to Integrated Coast Guard Systems. After
  identifying our initial concerns with possible longitudinal
  strength problems, I asked both Coast Guard and the Bollinger
  members of the technical management information team to award
  contracts to the Navy's Combatant Craft.
  I also suggested that Bollinger consult Vosper Thornycraft,
  the original designer of the Island Class patrol boats. I was
  unable to get support for this because the Deepwater contact
  was a performance based contract so the contractor was solely
  responsible for the success of the design. Nonetheless, I
  advised Bollinger to study this matter more carefully, due to
  the unusual nature of the lengthening a lightweight vessel by
  adding length aft instead of by adding length at midships,
  which is the normal process.
  After the cutter Matagorda failure, the section modulus
  calculation of the midship section submitted by Bollinger was
  found to be in error and did not meet the ABS Guide for high-
  speed craft 1997. A detailed review of the longitudinal
  strength and buckling calculations by ELC revealed that the
  primary stress of the deck and the side shell would exceed the
  critical buckling strength of the damaged panels. Subsequently,
  the Coast Guard accepted the ICGS proposed solution known as
  Modification One, comprising three straps welded on to each
  side. This raised the section modulus enough to meet ABS high-
  speed craft guide. This modification reduced the stress to an
  adequate level and also increased the allowable buckling load
  on the critical plates.
  After the cutter buckling damage, I took over as the
  project engineer from Deepwater to find the root cause of the
  problems with the cutters when such problems continued. I
  awarded six different contracts to nationally and
  internationally known consultants to resolve the problems. A
  variety of tests, analyses, and reviews were performed
  including independent third party verifications of the
  analyses. It is important to note that although this problem
  originates in longitudinal bending and involves overall hull
  girder strength, the light structure required for high speed,
  small patrol boats results in various types of buckling
  failures, not merely cracking. These are much more complicated
  structural responses than those commonly seen in larger ships.
  I believe this shows that the Coast Guard has to have more
  direct responsibility for, and control of future acquisitions,
  and oversight for vessel designs, as this Committee has advised
  and as the Commandant is now implementing. The Coast Guard has
  to rely more on the experience of existing proven vessels and
  experienced designers of these specialized high speed craft.
  This had been the practice that produced the successful 87-foot
  coastal patrol boat and the original 110-foot Island Class
  patrol boat, and this is the strategy that Coast Guard is now
  following for the replacement patrol boat, FRC-B. This also
  suggests that independent survey and design funding should be
  available to Coast Guard engineers as it was in the past so
  that the Coast Guard can investigate potential problems like
  this in a proactive fashion.
  Thank you for the opportunity to testify before you today.
  I will be happy to answer any questions you may have.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much. Mr. Michel.
  

• 

  Mr. Michel

  At 02:35:36
  

  Good evening, Mr. Chairman and distinguished
  Committee members. It is a pleasure to appear before you today
  to testify on the Compliance with Requirements of the Deepwater
  contract. My name is Joe Michel. Currently I am an assistant
  deputy with the Nationwide Automatic Identification System
  project, the Coast Guard Office of Acquisition. Prior to that,
  I was engineering technical lead with the Ports and Waterways
  Safety System also with Coast Guard Acquisition. And from
  December 2001 to March of 2004, I was the Coast Guard's lead
  C4ISR engineer on the 123-foot patrol boat integrated product
  team.
  I am pleased at the opportunity to appear before you and I
  will be happy to answer any questions that you have.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much. Lieutenant Commander
  Jacoby.
  Lieutenant Commander Jacoby. Good evening, Mr. Chairman and
  distinguished members of the Committee. It is a pleasure to
  appear before you tonight to discuss the Compliance with
  Requirements of the Deepwater contract.
  I am Lieutenant Commander Chad Jacoby. I served as the
  program manager for the 123-foot patrol boat conversion project
  from July 2004 to October 2006. As the 123 program manager, I
  managed the delivery task orders under the Deepwater contract
  that pertained to the production, delivery, and warranty
  support of the 123-foot cutters.
  During my time as program manager, I supervised the
  delivery of Coast Guard Cutter ATTU, Coast Guard Cutter
  NUNIVAK, Coast Guard Cutter VASHON, Coast Guard Cutter
  MONHEGAN, and Coast Guard Cutter MANITOU. I managed contracts
  with engineering firms to diagnose structural issues, I
  administered the one-year warranty period on all eight
  delivered 123s, and I managed the contract modifications to
  install structural upgrades on the cutters.
  Thank you for the opportunity to testify before you
  tonight. I will be happy to answer any questions that you may
  have.
  Thank you very much. Ms. Martindale.
  

• 

  Ms. Martindale

  At 02:35:36
  

  Mr. Chairman, I have a brief oral
  statement. I request that my written statement be entered into
  the record.
  Good evening, Mr. Chairman and distinguished members of the
  Committee. It is a pleasure to appear before you today to
  discuss Compliance with Requirements of the Deepwater contract.
  I am Cathy Martindale. I am currently the chief of the
  contracting office for the Coast Guard's Engineering and
  Logistics Center located in Baltimore, Maryland. I have been a
  contracting officer for the U.S. Coast Guard for 15 years. I
  hold a Bachelor of Science degree in business administration
  from the University of Maryland. I also hold a Certificate in
  procurement and contract management from the University of
  Virginia, and a Defense Acquisition University level III
  certification.
  I was a contracting officer with Coast Guard Headquarters
  and assigned to the Deepwater program beginning January 2000
  through March 2006. While assigned to the Deepwater program, I
  served at various times as a contracting officer in both the
  surface and air domains at the systems integration program
  office located in Rosslyn, Virginia. I was one in a series of
  three contracting officers responsible for administering the
  110/123 conversion of the Matagorda. As a contracting officer I
  had responsibility for administering, interpreting, and
  ensuring compliance with contract requirements. I worked daily
  with my contracting officer technical representative, the
  program office, and Integrated Coast Guard Systems. I attended
  design reviews, participated in integrated product team
  meetings, and accepted contract deliverables.
  Thank you for the opportunity to testify before you today.
  I will be happy to answer any questions that you may have.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much. I want to thank all of
  you for being here. We really appreciate it.
  Mr. Michel, was anyone in the Coast Guard aware during the
  123 program of the internal disputes at Lockheed or of the
  actions of Michel DeKort to raise awareness of his concerns?
  Would those kinds of issues have been things that would have
  come to your attention?
  

• 

  Mr. Michel

  At 02:35:36
  

  Not as such, sir. I was not aware until
  sometime later that Mr. DeKort had actually pursued alternative
  action up through his management team.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. DeKort indicates that he contacted the
  Coast Guard to raise his concerns with them. Do you know
  whether any action was taken? I take it that you found out
  later on that he had raised issues. Did you ever find out
  whether action had been taken in regard to the issues that he
  raised?
  

• 

  Mr. Michel

  At 02:35:36
  

  No, sir, I did not. He was extremely vocal
  during my tenure with the IPT.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And when you say he was extremely vocal, how
  did it come to your attention that he was extremely vocal?
  

• 

  Mr. Michel

  At 02:35:36
  

  He made his concerns known inside and outside
  of Integrated Product Team meetings.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And so you did have knowledge of those
  concerns, did you not, based on what you just said?
  

• 

  Mr. Michel

  At 02:35:36
  

  I did, sir, but I did not know that he had gone
  as far up his management chain.
  

• 

  Mr. Cummings

  At 02:35:36
  

  When he was complaining, were you aware of
  specific complaints?
  

• 

  Mr. Michel

  At 02:35:36
  

  I was, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And did you have an opinion back then when
  you were hearing them as to whether or not you considered them
  to be valid complaints and things that you all should be
  concerned about?
  

• 

  Mr. Michel

  At 02:35:36
  

  Well, sir, he and I shared a lot of the same
  concerns.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Is that right?
  

• 

  Mr. Michel

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Why not tell us about the concerns that you
  shared and why you had the concerns that you had.
  

• 

  Mr. Michel

  At 02:35:36
  

  I think we have talked a lot about the Tempest
  concerns this evening.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Yes.
  

• 

  Mr. Michel

  At 02:35:36
  

  A few things that he might have perhaps----
  

• 

  Mr. Cummings

  At 02:35:36
  

  Let me go back for one moment, because I want
  us to be clear. Mr. DeKort had his concerns, as I understand
  it, and you had concerns. Was this a thing where it just so
  happened that you sort of ended up with the same concerns, or
  were you all talking and he say, you know what, I really do not
  like this Tempest situation, and you sort of joined in to that?
  Were these things that you could have observed sort of
  independently, is what I am asking?
  

• 

  Mr. Michel

  At 02:35:36
  

  Yes, sir, independently. Any two C4ISR systems
  engineers looking at the same problem would have come to the
  same sort of conclusions.
  

• 

  Mr. Cummings

  At 02:35:36
  

  No doubt about it?
  

• 

  Mr. Michel

  At 02:35:36
  

  Absolutely, sir. No doubt.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Tell me the concerns that you had that were
  common to his complaints, his concerns.
  

• 

  Mr. Michel

  At 02:35:36
  

  Early on during the design reviews and during
  the review of various contract data exhibits, it was apparent
  that there either was not a clear understanding of Tempest
  requirements, for example, within the Lockheed design
  community, or they were not addressing them. So during design
  reviews. During review of contract documents, designs, and
  submission of comments via the IPT process these concerns were
  made known to Lockheed from the Coast Guard perspective. And I
  was not alone. There were many folks in the C4I community that
  were matrixed into the IPT that made these concerns known. So
  Lockheed went and did this study that was referred to earlier
  this evening, and they came to the same conclusion that yes, in
  fact, Tempest was a requirement processing classified
  information, we are going to have to adhere to Tempest if we
  are going to get this cutter certified and operate on
  classified networks.
  So, a round turn was taken on the design. Lockheed did try.
  They did try. The equipment racks were reconfigured, red and
  black equipment was separated, red and black cables were
  separated. I cannot say that there was any material solution
  pursued, that is, the equipment that they had procured, the
  cables that they had procured, that is what they were using.
  

• 

  Mr. Cummings

  At 02:35:36
  

  So, in other words, he was saying, if I
  understood his testimony correctly, that he felt there should
  have been some other kind of cables. It seems like there has
  been a big deal made of the kind of cable that was used as
  opposed to the kind that he thought would be best for Tempest
  certification. Did you have that same concern?
  

• 

  Mr. Michel

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  So what you are saying is that the same type
  of cabling, although there were the complaints, Lockheed
  Martin's reaction to that was to keep the same type of cabling
  but to just kind of reconfigure it. Is that a fair statement of
  what you just said?
  

• 

  Mr. Michel

  At 02:35:36
  

  Yes, sir. Yes.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Did you ever make any complaints?
  

• 

  Mr. Michel

  At 02:35:36
  

  I did, sir. During the design reviews and
  during the review of the designs themselves, I made numerous
  comments and raised my concerns. Some of the problems, and I
  think we have talked about the structure of the Deepwater
  contract at length this evening, I was trying to work within
  the structure of the contract.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Speaking of working within the structure of
  the contract, did you take your concerns to the higher ups in
  the Coast Guard?
  

• 

  Mr. Michel

  At 02:35:36
  

  I elevated those concerns as high as I could
  within the program.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And how high is that?
  

• 

  Mr. Michel

  At 02:35:36
  

  To the deputy at the Systems Engineering and
  Integration Team.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And who would that have been?
  

• 

  Mr. Michel

  At 02:35:36
  

  Mr. Giddons was at the time.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And what reaction did you get when you took
  those to his attention?
  

• 

  Mr. Michel

  At 02:35:36
  

  He was extremely concerned and he wanted the
  issues to be resolved.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And do you know why they were not resolved?
  

• 

  Mr. Michel

  At 02:35:36
  

  Well, regrettably, I had mentioned that in
  March 2004 my time with the Deepwater program came to an end.
  There were many issues that were unresolved, they were
  contractually identified on the DD-250, which was also referred
  to earlier this evening, that were, quite frankly, still up in
  the air.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Why were you so concerned about the Tempest
  issue?
  

• 

  Mr. Michel

  At 02:35:36
  

  For some of the same reasons that the first
  panel indicated, sir--compromise of classified information.
  

• 

  Mr. Cummings

  At 02:35:36
  

  When did you leave?
  

• 

  Mr. Michel

  At 02:35:36
  

  About three weeks after Matagorda was
  delivered.
  

• 

  Mr. Cummings

  At 02:35:36
  

  All right. I will come back to you.
  Ms. Martindale, you were the contracting officer for
  Deepwater?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, I was the contracting officer
  administering the 110/123 delivery task order for the
  Matagorda.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And does the contacting officer have the
  authority to decline to accept delivery of a ship or a boat?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And is that something that you have done in
  the past with regard to Deepwater? In other words, have you
  declined----
  

• 

  Ms. Martindale

  At 02:35:36
  

  I have declined acceptance of a data
  deliverables, but not a ship, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  I see. Explain that. Explain what you just
  said. You declined a date but not a ship.
  

• 

  Ms. Martindale

  At 02:35:36
  

  No. I am sorry, sir, a data deliverable. We
  had delivery requirements for data, design documents, and when
  they did not comply with contract requirements, we did not
  accept delivery. We gave them our comments, asked that
  corrections be made, and then they were accepted once those
  corrections were made.
  

• 

  Mr. Cummings

  At 02:35:36
  

  So, basically, you would get documents from
  the integrated team; is that right?
  

• 

  Ms. Martindale

  At 02:35:36
  

  That is correct, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  With regard to, let us say, for example, a
  ship, a vessel.
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes. Technical specifications, yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And then you would not necessarily see the
  ship itself. You would actually base your judgement on
  documents that you received. Is that a fair representation?
  

• 

  Ms. Martindale

  At 02:35:36
  

  No, sir. Prior to delivery of the ship,
  there is a series of data deliverables, technical
  specifications, design documents. If they did not comply with
  the requirements of the contract, then I would reject those
  deliverables.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay. Then how do you confirm the quality of
  the items for which you accept delivery?
  

• 

  Ms. Martindale

  At 02:35:36
  

  I rely on the technical expertise of my
  contracting officer technical representative.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And so if a technical representative comes to
  you and says something is, for example, certified, Tempest
  certified, then you basically accept that. Is that correct?
  

• 

  Ms. Martindale

  At 02:35:36
  

  That is correct, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And the procedure, I take it, is that if they
  are incorrect, you would not necessarily know that. All you do
  is you get a document saying that it is fine or not fine.
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir. I rely on their technical
  expertise.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Were you at all concerned about the condition
  in which the 123s were delivered?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir. There were areas where it did not
  comply with the contract. As a contracting officer, it would be
  my preference not to take delivery of something not in full
  compliance. But we had discussions with regard to that on the
  COTR and myself and the noncompliance issues were such that
  they could be resolved after delivery.
  

• 

  Mr. Cummings

  At 02:35:36
  

  In other words, let me make sure I get this
  right, you are saying that you would accept the delivery and
  you would accept it but there were assurances made to you that
  things would be corrected later?
  

• 

  Ms. Martindale

  At 02:35:36
  

  That is correct.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Was that standard procedure?
  

• 

  Ms. Martindale

  At 02:35:36
  

  It is not unusual, sir. It is a common
  practice in contracting where you sign a DD-250 accepting
  delivery of a product or service and you may withhold some
  aspect of payment or identify noncompliance areas with the
  expectation that at some point in the future they will bring
  the product into conformance.k
  

• 

  Mr. Cummings

  At 02:35:36
  

  Were all the major deficiencies noted in the
  DD-250 for the Matagorda and each subsequent ship?
  

• 

  Ms. Martindale

  At 02:35:36
  

  I cannot speak to the subsequent ships,
  sir, but for the Matagorda, to my knowledge, all the
  nonconformances were identified in the DD-250, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Was the noncompliance of the topside
  equipment noted on the DD-250 with regard to the environmental
  standards?
  

• 

  Ms. Martindale

  At 02:35:36
  

  No, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  It was not. And if it was not, why would that
  not have happened? In other words, if there was a problem with
  the topside equipment with regard to environmental standards
  and it had not been met, why would that not be noted on the DD-
  

• 

  Ms. Martindale

  At 02:35:36
  

  If there was an area of noncompliance, it
  should have been noted, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And the IG said that it was an area of
  noncompliance. Are you aware of that?
  

• 

  Ms. Martindale

  At 02:35:36
  

  No, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Does it concern you that we may have accepted
  a ship that did not have that notice on a DD-250?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes.
  

• 

  Mr. Cummings

  At 02:35:36
  

  When, in fact, there was a problem.
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes. That would be a concern, yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Are there occasions when this has happened in
  the past where maybe something came in, you accept the
  compliance, DD-250 prepared, and then you later found out there
  was something that was not right? Has that happened?
  

• 

  Ms. Martindale

  At 02:35:36
  

  I have not had any firsthand experience
  with that, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay. I want to just make sure I am clear on
  this. With regard to the 123 program, I will call it the
  program, were there other things that concerned you overall?
  Was there anything unusual that concerned you?
  

• 

  Ms. Martindale

  At 02:35:36
  

  It was a very large, complex program, sir.
  I was not only responsible for the 110/123 DTO administration,
  but I also had responsibility for administering the NSC, the
  SRP, and FRC. So I was spread very thin, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  You did all of that by yourself?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir. I was the sole contracting
  officer responsible for all of those delivery task orders. So
  that was certainly a concern.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Now with regard to change orders, how were
  they dealt with?
  

• 

  Ms. Martindale

  At 02:35:36
  

  If the COTR identified an area of the
  contract requirements that they wanted to modify or add or
  subtract from, I would request a proposal from the contractor
  and then we would receive that proposal, review it, negotiate
  and modify the contract.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Did that happen often with the 123 project?
  

• 

  Ms. Martindale

  At 02:35:36
  

  No, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  You have been sitting here during all the
  earlier testimony, have you not?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And you heard that there were some concerns
  with regard to wiring and whether one piece of wire/cable costs
  a little bit more than the other. Did those kinds of things
  ever come to your attention in any way? In other words, did the
  integrated team ever come back and say, look, we have got a
  problem here, we need to change the wiring?
  

• 

  Ms. Martindale

  At 02:35:36
  

  On the 110/123 contract, that delivery task
  order?
  

• 

  Mr. Cummings

  At 02:35:36
  

  Yes.
  

• 

  Ms. Martindale

  At 02:35:36
  

  That was a firm fixed price, performance-
  based contract. So as far as the contractor and the type of
  cable that they would install, for them to correct that issue
  would not have necessitated a modification to the contract.
  They needed to do whatever was necessary to meet the standards
  that were incorporated into the contract.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Period?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Period.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Let me make sure I am clear on this. Even if
  it cost more, you are saying that if the specifications asked
  for a certain thing, if they wanted to change, do something
  other than the specifications with regard to cabling----
  

• 

  Ms. Martindale

  At 02:35:36
  

  The specifications of the 110/123 contract
  did not specify a type of cable. It specified a standard. They
  may have had to decide what type of cable to use to comply with
  that standard. If they chose the wrong cable and needed to use
  a different type of cable, a contract modification is not
  necessary to make that change. They just need to make whatever
  changes are necessary to comply with the standard that was
  incorporated into the contract.
  

• 

  Mr. Cummings

  At 02:35:36
  

  But if their complaint was that it was going
  to cost more money----
  

• 

  Ms. Martindale

  At 02:35:36
  

  That is the firm fixed price risk nature of
  performance of that type of contract.
  

• 

  Mr. Cummings

  At 02:35:36
  

  So it would fall on the contractor?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes.
  

• 

  Mr. Cummings

  At 02:35:36
  

  So you might not ever even know about that.
  Is that what you are saying?
  

• 

  Ms. Martindale

  At 02:35:36
  

  That is correct, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Let me just ask you a final question. The
  Defense Acquisitions University, are you familiar with them?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Its report on Deepwater indicates that the
  contractors and the Coast Guard were both incentivized to
  underestimate the cost of the new systems and their technical
  support needs. Do you think that was the case?
  

• 

  Ms. Martindale

  At 02:35:36
  

  No more than any other contractor is
  incentivized to do that to capture a contract in their bidding
  process. They may have underestimated things in an attempt to
  come in with the lowest possible bid to capture the contract.
  

• 

  Mr. Cummings

  At 02:35:36
  

  That is not unusual?
  

• 

  Ms. Martindale

  At 02:35:36
  

  No. And we did do cost realism analysis
  when we evaluated the initial proposals at the award of the
  Deepwater contract to try to ferret out those types of
  concerns.
  

• 

  Mr. Cummings

  At 02:35:36
  

  And did the integrated team ever develop cost
  estimates that it knew were low-ball?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Not that I am aware of.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Basically, what you are saying to me is that
  folks can come in with a low bid to get the contract, get the
  contract, and then when they get it come back for change orders
  and things of that nature, and that is not unusual? Yes or no?
  

• 

  Ms. Martindale

  At 02:35:36
  

  I do not know that I can say unusual or
  not.
  

• 

  Mr. Cummings

  At 02:35:36
  

  But you have seen it? You believe that you
  have seen that happen?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  You cannot say for sure, but based upon your
  judgement you believe that has happened?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay. And I am not trying to put words in
  your mouth. I am just asking a question.
  Mr. LaTourette?
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Thank you, Mr. Chairman. Ms. Martindale, I
  want to pick up a little bit where the Chairman left off. I
  think I have in front of me the DD-250 for the delivery of the
  Matagorda. Just so I am clear, under the exceptions section,
  there is no reference to the shielded braided cable. The
  requirement left on the Tempest system is that the Tempest and
  classified testing will occur after the delivery of the ship.
  

• 

  Ms. Martindale

  At 02:35:36
  

  That is correct.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Have you looked at the Inspector General's
  report, the DHS Inspector General's report?
  

• 

  Ms. Martindale

  At 02:35:36
  

  No, I have not, sir.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  The reason for that not being listed on
  here, on Page 5 of the Inspector General's report it indicates
  that the contract required the use of only shielded, not
  braided, metallic shielded cable as recommended by the National
  Security Telecommunications. And so, because the contract did
  not make the requirement of braided, you would not list that as
  an exception, what was yet to occur as the Tempest testing. Is
  that correct?
  

• 

  Ms. Martindale

  At 02:35:36
  

  That is correct, sir.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Mr. Michel, I do not know if you are the
  right one to ask this series of questions or not, but we have
  sort of been going round and round on this Tempest testing
  business. We had a witness on the first panel that said no way
  could this ever pass the Tempest testing. We have in the
  Inspector General's report not a clear indication that it
  passed the Tempest testing, but the sentence is: ``The Tempest
  testing conducted on the Matagorda and Padre between February
  2004 and July 2006 indicated that the cabling installed...'' so
  I guess this is the mylar aluminum cabling, ``during the C4ISR
  upgrade was not a source of compromising of missions.'' Are you
  familiar with that finding by the Inspector General?
  

• 

  Mr. Michel

  At 02:35:36
  

  I am not, sir.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  And do you have any opinion on that in
  light of your observation that you shared the same concerns as
  one of our previous witnesses?
  

• 

  Mr. Michel

  At 02:35:36
  

  I had examined the visual inspection report
  that was provided to the program by TISCOM and I was made aware
  of the instrumented Tempest survey results that had been
  performed by SPAWAR. In neither case at the initial survey was
  the vessel recommended for certification. Basically, it failed
  both tests. So what we did to simplify matters, on the DD-250
  the items were rolled up into this one line item, this Tempest
  in classified testing, because it was simply impossible to do
  classified testing until we could get the vessel to pass
  Tempest; you just cannot do it.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Let me ask you this. This observation by
  the IG that whatever testing was conducted indicated that there
  was not--the big issue in the first panel, if you were here, is
  that we had national security stuff floating all over the
  country and our enemies could have the ability to listen in on
  these ships, compromising national security. Do you think this
  statement that the cabling installed, even though it is not the
  braided cable that everybody prefers, was not a source of
  compromising of missions is an accurate statement or not?
  

• 

  Mr. Michel

  At 02:35:36
  

  It is possible, sir. I did not actually see the
  instrumented Tempest results for that particular compartment?
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Who would have been in charge of that?
  

• 

  Mr. Michel

  At 02:35:36
  

  That would have been Mr. Ron Porter at TISCOM.
  The report itself was classified.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Okay. Back to you, Ms. Martindale, for a
  minute. One of the exceptions listed, number seven, is low
  smoke cable, that we heard some things about. We have also
  heard from Lockheed Martin that I think at some point in time,
  I think after the delivery of the fourth ship, that a waiver
  was granted. Were you involved in that process?
  

• 

  Ms. Martindale

  At 02:35:36
  

  No, sir.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Who would have been involved in that
  process? Yes, Commander Jacoby, thank you. Could you sort of
  walk us through that process?
  Lieutenant Commander Jacoby. Yes, sir. In July of 2004, I
  reported on board. One of the issues that was pending, sir, was
  a request for waiver from the contractor to the Coast Guard for
  around eighty cables that did not meet the low smoke
  requirement. I could see from the documentation that the IPT
  had worked this issue for close to a year. The number of low
  smoke cables in the waiver request originally was very high.
  Through the IPT process the number of cables on the waiver was
  reduced to eighty. I consulted with the IPT, got their input, I
  also called the C4ISR lead, Mr. Michel's replacement, and got
  his input on recommendation on approval or disapproval of the
  waiver, I signed recommendation of the waiver, forwarded it to
  the contracting officer, and the contracting officer approved
  the waiver.
  Okay. Again, there are a couple of
  storylines that can come out of this investigation and this
  hearing, and one, relative to the low smoke cable, is that
  because that requirement was waived that guardsmen are put at
  risk if there should be a fire aboard that vessel. So I guess I
  appreciate your observations as to why you agreed to that
  waiver, if that were an accurate assessment.
  Lieutenant Commander Jacoby. Yes, sir. To be accurate, the
  requirement was not waived, the request for deviation was
  approved for specific cables and those specific cables, as was
  addressed before, were either on the mast, which the rationale
  that was provided from the IPT and from the C4 community was
  that a cable on the mast that produces smoke does not put
  anyone at risk. Also, some of the cables on the waiver request
  were, for example, phone cords or keyboard cords, not cables
  that were installed by Lockheed Martin but cables that came on
  equipment. The determination from the IPT and from the C4
  community was that you would not want to cut the phone cords
  off the COTS equipment and have Lockheed try to put low smoke
  cables in their place, sir. Those were the rationales that I
  received before signing the waiver.
  Okay. And were you involved at all in the
  Tempest cabling issue?
  Lieutenant Commander Jacoby. I was involved not with the
  initial design, no, sir, but I did make the cutters available
  to the Tempest inspectors. And then also as the PM, when
  discrepancies were identified, I pursued either physical
  correction of those discrepancies by enforcing the requirements
  of the contract, or correcting the discrepancies to the
  satisfaction of Mr. Porter, the certifying authority at TISCOM,
  sir.
  Okay. And let us get to that. Again, when I
  was talking to Mr. Michel and when I was talking to the other
  witnesses, the allegation is that even though the contract was
  not violated according to the IG's finding, that the contractor
  had a choice, there is a preferred cable, the preferred cable
  was not used, and because the preferred cable was not used, we
  had a danger of national security being compromised. What is
  your take on that?
  Lieutenant Commander Jacoby. My take, sir, is I relied on
  the recommendations and counsel of the C4 experts in the Coast
  Guard, which, to my knowledge, are certified to certify Tempest
  requirements. Like I said, we made the ships available for the
  inspections, we received the discrepancies from the
  inspections, we satisfied those discrepancies to the
  satisfaction of the Tempest authority.
  This is kind of key to me because I think
  everybody wants to be clear. When you say satisfied ``to the
  satisfaction of the Tempest authority,'' is there, when this
  thing passes, I know when it does not pass you get a report and
  say here are the problems, when it passes is there some kind of
  certificate that is issued? How do you know that it has passed?
  Lieutenant Commander Jacoby. An Interim Authority to
  Operate or an Authority to Operate is granted once Mr. Ron
  Porter is satisfied with the Tempest results. For some
  perspective from the program management standpoint, the time
  period between the inspections and the final Authority to
  Operate or even the Interim Authority to Operate was a span of
  months, which was weekly meetings of the program office, the
  contractor, and Mr. Porter working off those discrepancies. So
  from a program management point of view, for one, it was very
  difficult to work through this process and gain that ATL. And
  how we knew that we had done that was satisfied the
  requirements of Mr. Porter, the Coast Guard's Tempest
  certifying authority, sir.
  Is it fair, because I do not operate in
  your world, but is it fair that when the ATO, the Authority to
  Operate was issued on these ships that the Tempest test had
  been completed and the system was installed in a manner that
  was acceptable to the service?
  Lieutenant Commander Jacoby. Yes, sir.
  And would acceptable to the service include
  a system that was leaking national security information out of
  its cables?
  Lieutenant Commander Jacoby. I would have to assume that
  the Tempest certifying authority would not grant an ATO if that
  were the case, sir.
  And did you get ATOs on all eight ships?
  Lieutenant Commander Jacoby. Yes, sir.
  Okay. I thank you. Nothing else, Mr.
  

• 

  Chairman

  At 02:35:36
  

  
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. Oberstar.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Mr. Ghosh, you are internally and integrally
  involved with the design. So who was primarily responsible for
  the design for lengthening the hull 110 to 123 feet?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  In my opinion, sir, it is Bollinger and ICGS.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  It was----
  

• 

  Mr. Ghosh

  At 02:35:36
  

  ICGS as the----
  

• 

  Mr. Oberstar

  At 02:35:36
  

  ICGS.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  ICGS as the prime contractor and support
  contractor Bollinger.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  What was your role in all of this? You are a
  naval architect, are you not?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir. Yes, sir, we got involved in the sense
  that in review of the design. But again, Bollinger calculations
  solved that the required strength exceeds the calculations, the
  123 exceeds the stand by 100 percent but also I was the first
  person to contact Carderock and VT and Bollinger to get these
  people on board.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Now you had conversations with, as we
  understand it, Scott Sampson, a Navy employee at the Carderock
  facility, which I always called the David Taylor Model Basin.
  In September 2002, Mr. Sampson warned the Coast Guard at that
  time of a likely design flaw. Did you get detailed information
  about that?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir. Before even then, actually, the 179
  problem, the cracks on the 179, I knew about that. And they are
  correct that the 179 was lengthened only five percent, but
  under 123 it was 12 percent. But there is a distinction between
  the length. The 110-foot versus 175-foot, that length
  difference makes this problem different. In our analysis, for
  the analysis in the future, what we found and we knew for a
  small boat the failure which the PC had is a yielding failure,
  meaning steel has yield strength of 40,000 pounds per square
  inch. The failure on the 179 PC was cracking due to tensile
  strength exceeding that 40,000 pounds. But in our case, the
  110, because of the short length, the failure is completely
  different. It is a buckling failure, which could be much lower.
  Like in our Matagorda case, it was only 7,200 pounds per square
  inch. So the two failures are completely different and all the
  knowledge and ABS rules and DNV rules, everybody suggested
  that, like for example the DNV rules only apply to more than
  150-foot length. The ABS rules, the 1997 rule which Mr. Scott
  Sampson mentioned, did not apply. In that rule it said that
  this buckling, and all this conversion needs to be done if it
  is more than 20 feet. Subsequently, of course, ABS changed that
  rule in 2003 to 79 feet.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  ABS changed the rule?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  ABS changed the rule. Yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Now, did the Navy offer to provide design and
  engineering support for Bollinger, for Northrop Grumman, and
  for the Coast Guard?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  We understand that offer was declined.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Because I couldn't get the funding. I didn't
  have any funding.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  The funding was how much?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Forty two thousand dollars, as stated.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Forty two thousand dollars, did you say?
  Total cost, we understand, was somewhere between $50,000 and
  $60,000. This is a $90 million project?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Commander Jacoby, could you not find that
  money?
  Lieutenant Commander Jacoby. Respectfully, sir, this was
  two years before I joined the program. I cannot really speak
  for whether they could find the money or not, sir.
  All right. The Navy offered, and it was not
  going to do this free, they were going to do it on a cost
  reimbursable basis, and the cost was in the range of $60,000 on
  a $90 million contract. I do not understand this. When did you,
  Mr. Ghosh, become aware of the deck cracking issue on the 123s?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  After September 2004 Matagorda.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  By a year later, at least six of the eight
  converted ships had developed severe cracking. Is that correct?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  It is not cracking, sir. There is cracking in
  the aluminum deck, but the main problem has been the buckling
  on the side cells. The current problem is buckling of the
  bottom and misalignment of shafts, we cannot keep the shafts
  aligned. It is a much more complicated problem.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  You can have buckling without cracking?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  I understand.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Because the stress level for the buckling is
  much, much lower.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Did you think it was useful to have the Navy
  advise the Coast Guard on this?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Well, the current problem, the way we have
  analyzed it--yes, of course, it would have been good. But the
  solution they would have presented at the time, like we have
  already done in our Mod 1, Mod 2 structures, we have increased
  the section modulus as well as the buckling, in case the
  buckling, and still there are problems. So it is a much more
  complicated problem than Navy size to think.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  You said something very interesting earlier
  in your statement. You are comparing strength of steel. I know
  a good deal about steel. My district is very much involved in
  it and I have spent a great deal of time on the steel industry.
  You talked about 14,000 pound strength per square inch?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Forty, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Pardon me?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Forty thousand, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Forty thousand?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  I misunderstood.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  It is a high strength steel.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Very high strength. Yes. And was it 7,200
  pounds per square inch----
  

• 

  Mr. Ghosh

  At 02:35:36
  

  For the buckling failure, sir, yes.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  So what was the specification for
  strengthening of the hull, if any, on the 123?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  The contract is supposed to look at this
  critical buckling strength, 7,200. But, again, the section that
  was calculated was so high, almost 200 percent than required,
  so they did not do any calculations. Plus, it did not require
  it.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  A previous panel said that this was not a
  problem at all. That the problem of hull buckling or cracking
  was due to an underlying stringer in the ship construction that
  was not attached and therefore did not provide strength, and
  that the failure was due to something else, not to the design
  of the hull extension.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  That is true. The Matagorda----
  

• 

  Mr. Oberstar

  At 02:35:36
  

  True that there was a stringer----
  

• 

  Mr. Ghosh

  At 02:35:36
  

  A stringer not welded.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Did that have a relationship to the strength
  of the hull?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  That stringer not being welded, the Matagorda
  failed at very low wave height, at very low systems. But
  eventually, when we fixed the problem and increased the
  strength based on when we found the calculus mistake and we
  increased the strength, which Carderock would have suggested
  the same thing, still we had failure. That failure is not due
  to just not having the welders stiffen her. It is much more
  complicated. And our theory is, again, we have spent half a
  million dollars almost in trying to solve this problem with
  experts from Europe, the original designer VT, and several fine
  detail analyses we have done.
  The main theory, what we think is that because the engine
  room hatch basically does not have the deck, it has a soft
  patch to remove the engines, that moved towards the midship of
  the hull. Also one other problem would be the 110 and 123 has
  aluminum deck, not steel. Aluminum basically behaves like
  rubber in this particular case. And that is like a canoe, if
  you have an open canoe, you can push it and it sort of buckles.
  And that is what is happening. We cannot prove it by analysis
  and we have gone to many experts, nobody could pinpoint the
  exact failure mode.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Why would that not have shown up prior to
  actual construction work undertaken on the vessel? Why would
  there not have been a design evaluation before you put the
  vessel to construction? And secondly, why in the lengthening
  and strengthening, why did not someone notice the stringer was
  not attached? I do not understand that.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Okay. Sir, the stringer not attached was----
  

• 

  Mr. Oberstar

  At 02:35:36
  

  And was that endemic to the other vessels?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  No, sir.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Just to this one?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Just that one.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  But the others cracked, the others buckled.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Buckled. And the main problem right now is that
  we cannot keep our shafts aligned.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  All right. So the testimony we got in the
  previous panel was, not your words but mine, a coverup for
  their failure. When you received this information from the Navy
  and then you passed it on and recommended their guidance and
  action was not taken because, in the Coast Guard's words, they
  did not have the money to do this, did you have any further
  leverage in this arena? Were your hands tied at that point?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  No, sir. We could not use our own money plus we
  did not have our money also, because these engineer projects we
  have like kind of money to use, you can use can mix and match.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  All right. Thank you, Mr. Chairman. I think
  that testimony is very helpful and sheds important light. I am
  going to come back and review this matter of steel strength and
  take a closer look at it later, not in this hearing but in
  another context. I appreciate that. That is very, very useful
  testimony.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. Gilchrest.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Thank you, Mr. Chairman. Maybe if you wrote
  a letter to the Coast Guard Auxiliary they would have
  contributed that $40,000 for that extra evaluation.
  Mr. Ghosh, you have in your testimony on Page 3, I just
  want to read a couple of sentences, second paragraph, ``I asked
  both the contracting officer's technical representative and the
  Bollinger members of the technical management information team
  to award contracts to the Navy's Combatant Craft division
  because of its experience with similar problems that occurred
  after lengthening the 179-foot Patrol Craft and its earlier
  involvement with the 110-foot Island Class Patrol Boat. I also
  suggested that Bollinger consult Vosper Thornycraft because it
  was the original designer of the Island Class Patrol Boats. I
  was unable to get support for this.'' Who did you need to get
  support to have this done?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  I would say the project office.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Who was in the project office that did not
  give you support for this?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  While I was a member of the team I could go
  there and I could not go any further. But also I would like to
  point out that even if we had gotten the support at the time,
  the section modulus, suppose we had gone to Carderock at the
  time, they would have told us to increase the section modulus,
  and that is exactly what we have done to date. But still the
  boat fails.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  So what I am saying is you had some concern
  about design flaws I guess and you could not get support for
  further evaluation for those proposed design flaws.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  No, sir. I did not know there was a design flaw.
  I just wanted them to look at the design because they have the
  experience, more than I did.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Now why were you not able to get support for
  this further evaluation?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  I cannot speak for--I did not control the money.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Who specifically was the person that turned
  you down?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  I cannot remember exactly, but everybody in the
  Deepwater program knew about that we wanted to get the money to
  get the----
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  I would just like, Mr. Chairman, I would
  like to follow up and find out who that person was that you
  suggested that you get this other information, and I think I
  would just like to follow through so we that we can find out
  who that person or persons were.
  I would like to go to Page 5 of your testimony, the second
  from the last paragraph, about the middle way down. I just want
  a clarification from you, Mr. Ghosh, that it seems from what
  you say here that you now understand what caused the damage on
  the hull buckling on these ships: ``After analyzing all
  additional information, the Coast Guard's Engineering Logistics
  Center has developed a solution that might address all the
  possible mechanisms of damage; add a stiff beam in a closed
  tube to the upper edge of the deck. I believe this will address
  the major structural problems, but I cannot provide complete
  certainty that this will work, or that there are no other
  unanticipated problems.'' So what we are talking about here,
  what Mr. Oberstar is talking about, the hull breaches, the hull
  buckling and all of those issues, a stiff beam in a closed tube
  to the upper edge of the deck will solve some of those problems
  possibly?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Possibly so, yes. The thing is that increasing
  the strength by just putting plates or stiffener did not work.
  What we have come to the theory about that, if we have a closed
  cell which is several hundred times stronger in torsion and
  that will stabilize the deck.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  We have eight ships sitting up at Curtis Bay
  just outside of Baltimore City. If you think you might have a
  solution to this problem, should we scrap those boats or should
  we pick out one and see if it will work?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Well, that is not----
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  That is not your decision to make.
  

• 

  Mr. Ghosh

  At 02:35:36
  

  That is not my decision to make. I do not have a
  100 percent guarantee. I cannot guarantee.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Considering all the money that has been put
  into this project--there are some pretty good workers up there
  at Curtis Bay. Is it possible to hold the line, say let us not
  scrap all these ships, let us see if we can salvage one, put it
  out on the high seas for a year? And I will sail down to the
  McMerdo on it if need be, Mr. Chairman, give me six months
  leave of absence. Are these ships so far gone that salvaging
  one and testing it out just is not worth it?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  No, sir. I agree, you could do that, what you
  say, sir.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  So these 110 boats changed to 123, that has
  never been done before? This is the first time we took 110s to
  make them 123s?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  This is really a silly question I guess, but
  considering all the potential problems that we are seeing here,
  both from Lockheed Martin and from Northrop Grumman, from the
  aviation, the logistics, the hulls and all that, would it not
  have been more prudent to do one, set it out there, because the
  first one entered service in 2005 but there were already hull
  problems in 2004 on that same boat, set it out there and see if
  you could get the kinks out?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Did the Navy have similar problems when they
  went from 170 to 179?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Not similar problems, sir. I just said that the
  stress level on the deck, their's is in the 40,000 pounds per
  square inch level and ours is between 7,000 to 12,000, in that
  range.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  You talked about solving--this will be my
  last question, Mr. Chairman--you talked about as far as add a
  stiff beam in a closed tube to the upper edge of the deck would
  have solved some of those damage problems with the 123. Is
  there a similar design in the 179?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  No, sir. They have, again because the problem is
  different, they have increased the strength. Though my solution
  also calls for increasing the strength, but in the 123 case,
  just increasing the strength does not help. It has to have a
  closed cell because of the open deck. In the PC, though they
  have some hatch, but by increasing the strength that solved
  their problems. There was cracking in their case. In our case
  it is mostly buckling.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  How many 110s are left in the Coast Guard?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Forty-one, sir.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Are any of those going to be 123s?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  No.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Okay. Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Before we go to Mr. Kagan, let me ask you
  this, Mr. Michel. Given that you agreed with Mr. DeKort's
  concerns, did you believe that Lockheed Martin did anything
  unethical?
  

• 

  Mr. Michel

  At 02:35:36
  

  I would not say unethical, sir, no.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Did you file an ethics complaint?
  

• 

  Mr. Michel

  At 02:35:36
  

  I did not, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Okay. Mr. Kagan.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Thank you, Mr. Chairman. I did not know when I
  took this job we might be having sleep-overs. I do not think I
  brought all my equipment.
  

• 

  Mr. Cummings

  At 02:35:36
  

  At least you are a doctor, so if we get sick
  you can take care of us.
  

• 

  Mr. Kagan

  At 02:35:36
  

  That is right. But I am not allowed to write
  myself those prescriptions.
  Is it Doctor Ghosh? Ph.D?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  No, sir. I have just a Bachelor's degree in
  naval architecture from Indian Institute of Technology.
  

• 

  Mr. Kagan

  At 02:35:36
  

  With 33 years of experience in architecture
  related to naval vessels?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  And were you here during the earlier testimony
  when I questioned Mr. Stanley?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  And do you agree with his answers with regard to
  potential responsibility?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  I would say yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Is there anybody else that you think you should
  add to the list of three?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  No, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  And with regard to the name of the person,
  either your superior or someone in your organization that may
  not have been able to come up with the money necessary to do
  some more studies, is it possible that you could find that
  person's name, if not tonight then in the next several days,
  certainly during my first term here?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  It has been five years, sir. I did not keep that
  good notes on that. But again, it was in a meeting and all
  names have been given.
  

• 

  Mr. Kagan

  At 02:35:36
  

  All right. Well can you offer perhaps three
  things that you think were the primary things that went wrong
  with the 110? Give me a list. I have a scientific mind. But do
  not shake your hands because I teach medical students when a
  professor does this we put out notes down, do not write
  anything, because it is just a bunch of bull. So just give me
  three things that you think were the key things that went wrong
  with this project. Design. You mentioned the space in the hull,
  the hatch, so to speak. Let me ask you yes or no: Can you come
  up with three things that you think were central to the failure
  of this project?
  

• 

  Mr. Ghosh

  At 02:35:36
  

  I guess I could.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Perhaps then you could write to me and give me
  the answers in writing at a later time.
  [Information follows:]
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
  Mr. Michel, you mentioned in your statement that
  you are an assistant deputy for systems implementation with the
  Coast Guard's nationwide automatic identification system
  project.
  

• 

  Mr. Michel

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  I am sure they do not answer the phone that way.
  But can you give me just a little background about what that
  means, what you do?
  

• 

  Mr. Michel

  At 02:35:36
  

  These days I am more of a program management
  type than an engineering technical lead. But the two are
  closely related in my present responsibilities.
  

• 

  Mr. Kagan

  At 02:35:36
  

  So someone in that organization depends on your
  judgement?
  

• 

  Mr. Michel

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  And your judgement is based not just on your
  education, but your training and your experience. Is that
  correct?
  

• 

  Mr. Michel

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Sir, you were involved in this project. Let me
  ask you this. Do you agree with everything offered in sworn
  testimony by Mr. Atkins?
  

• 

  Mr. Michel

  At 02:35:36
  

  I do not.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Is there anything that you disagree with him on?
  

• 

  Mr. Michel

  At 02:35:36
  

  I think that some of his statements were a bit
  of a stretch.
  

• 

  Mr. Kagan

  At 02:35:36
  

  So the adjectives might be a problem. But what
  about the facts? Is it not a fact that some wiring and covering
  of wiring created the possibility, as you testified earlier
  this evening, for eavesdropping?
  

• 

  Mr. Michel

  At 02:35:36
  

  For compromising emanations, yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  And when you left the project, is it not also
  true that that same wiring was in place?
  

• 

  Mr. Michel

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Do you think your judgement was sound in
  allowing it to continue to be present?
  

• 

  Mr. Michel

  At 02:35:36
  

  I made my concerns known during my tenure.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Well you did talk about it. But what happened?
  What were the results? What do you think? Was it poor judgment
  to walk away from that project knowing that there were
  unshielded wiring?
  

• 

  Mr. Michel

  At 02:35:36
  

  Perhaps, sir. But it was a promotion.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Okay. Okay. I will tell you, I am new around
  these parts and I think, Joe, you testified earlier that you
  thought there was really a contract problem. I do not think it
  is a contract problem. I think it is a people problem and it is
  really a problem of oversight. And I can, as my time expires
  here, reassure you that the 110th Congress is intently
  interested in providing oversight. And in my evening that I am
  spending here with you, there was one man who was honest thus
  far, and that gentleman from Bollinger is sitting in the back
  row. Mark fessed up, he accepted responsibility, and he has
  invited everybody else to accept responsibility.
  If I may just ask Cathy Martindale a question. Are you
  understaffed? Do you have a lot more responsibility to do
  personally than you think one person should be doing?
  

• 

  Ms. Martindale

  At 02:35:36
  

  While assigned to the Deepwater project,
  yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  So how many other staff members do you feel
  would be adequate to get the job done right?
  

• 

  Ms. Martindale

  At 02:35:36
  

  There should be an over-arching surface
  contracting officer, there should be a contracting officer
  assigned to each asset; that would be the SRP, the 123, the
  NSC, the FRC, the OPC. That would be five contracting officers,
  and they would need two to three specialists working for each
  of those contracting officers.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Is that not a staff of close to 18 in addition
  to you?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  And who would be responsible for providing all
  that staff? Who is the decisionmaker? Where does that buck
  stop?
  

• 

  Ms. Martindale

  At 02:35:36
  

  I really do not know, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  See, one of the principles in my businesses that
  I have run is that if I give someone a job that they cannot do,
  shame on me. Someone gave you a job that was humanly not
  possible in my early estimation. Would you agree with that?
  

• 

  Ms. Martindale

  At 02:35:36
  

  Yes, sir.
  

• 

  Mr. Kagan

  At 02:35:36
  

  All right. So it is a question again of failure
  of oversight. It is not a failure of contracts. I do not think
  this is necessarily a problem that is going to be solved by
  attorneys. This is going to be solved by this Congress in its
  oversight of activities, not just in the Coast Guard but
  elsewhere.
  Any other comments from the panel before I yield back my
  time?
  

• 

  Ms. Martindale

  At 02:35:36
  

  I have a comment, sir. I believe another
  issue of concern is the construct of the contractor. It has
  been a struggle in administering the contract when you have a
  joint venture, ICGS, which is a shell of a company, and then
  you have subcontractors, Lockheed Martin, Northrop Grumman
  Ships Systems, and then another tier subcontractor, Bollinger.
  Not necessarily do those contract relationships reflect that of
  the Coast Guard's with ICGS making it an additional challenge.
  Also, the work was divided up. C4ISR was focused on doing their
  C4ISR work, HM&E was focused on doing their HM&E and not
  necessarily when the two would come together do they work
  compatibly. That was just a fallout of the organizational
  construct with whom we had a contract relationship.
  

• 

  Mr. Kagan

  At 02:35:36
  

  You have just described a disorganized orchestra
  where everyone is playing their own musical instrument but
  there is no conductor. So we have Madam Speaker Pelosi to
  guarantee there is going to be oversight in this Congress. I
  yield back my time.k
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much. I just wanted to say
  that Admiral Blore, who is right over there, Ms. Martindale, is
  the guy who can get you some more help. Okay?
  

• 

  Mr. Altmire

  At 02:35:36
  

  
  Thank you, Mr. Chairman. I wanted to clarify
  one thing. This question is for Commander Jacoby. You talked
  earlier about Ron Porter and the visual Tempest exam of the
  Matagorda.
  Lieutenant Commander Jacoby. Yes, sir.
  My question is, was Ron Porter a fully
  certified Tempest authority at the time he conducted the visual
  Tempest exam of the Matagorda?
  Lieutenant Commander Jacoby. To my knowledge, he was.
  Although I did not verify his certification, sir.
  Okay. Thank you. My next question is also for
  you Commander. According to records supplied by the Coast
  Guard, Matagorda received its Interim Authority to Operate its
  C4ISR on October 14, 2004. It then has a visual Tempest
  inspection on December 19, 2004, which noted a few lingering
  discrepancies. It received its Authority to Operate on January
  19, 2005. Next, the 123 class received a class waiver for
  visual discrepancies on July 12, 2005. Matagorda itself was
  reinspected for visual Tempest on October 28, 2005. So the
  question is, why did Matagorda receive its ATO before the class
  waiver for the 123's visual discrepancies was granted and
  before Matagorda was given a visual Tempest inspection to
  assess the condition of remaining deficiencies?
  Lieutenant Commander Jacoby. I tried to keep up with you on
  dates there, sir. I believe that there is a mixing of two
  issues there. The class-wide waiver which applied not to the
  Matagorda but the follow-on hulls was granted I believe on the
  date you mentioned. If I can just run through the Matagorda
  dates, I think that would clear up things.
  Please.
  Lieutenant Commander Jacoby. The Matagorda received a
  visual Tempest inspection and an instrumented Tempest
  inspection in the February 2004 timeframe, it received Interim
  Authority to Operate in October 2004, and a final Authority to
  Operate in January of 2005. Those dates in sequential order I
  believe are the only ones applicable to Matagorda. The class-
  wide waiver, in my understanding from what I have received from
  Mr. Porter, was after several cutters had been tested, his
  confidence level that the class met a configuration management
  standard that was consistent across the class and so he felt
  comfortable granting a class-wide Authority to Operate.
  Okay. Thank you. My final question we pulled
  from the testimony and it has some acronyms in there which I am
  going to try to pronounce correctly, but forgive me if I do
  not. From March 11 to April 5, 2005, Matagorda was among a
  group of ships reassessed by Navy's COMOPTEVFOR unit and the
  Navy wrote the following, which I think we were going to put up
  on the screen but it is late now: ``Tempest discrepancies and
  COMSEC discrepancies were corrected in Coast Guard Cutter
  Matagorda; however, there were unsolved installation
  discrepancies which precluded SPAWAR CISCOM recommendation for
  Coast Guard 62 to release an IATO. Without an IATO cutters were
  not authorized to transmit and receive classified information,
  significantly limiting their participation in U.S. Coast Guard
  tactical operations'' And then later they wrote: ``In spite of
  this progress, physical connectivity was still assessed as a
  high risk based upon the inability to establish and maintain
  classified two-way data exchanges with other Coast Guard and
  naval vessels.''
  Lieutenant Commander Jacoby. Yes, sir. It is my
  understanding that the date on which COMOPTEVFOR, the Navy
  Command, assessed the Matagorda it did not have an ATO,
  therefore could not energize their secure communications. So
  COMOPTEVFOR noted that they could not test certain gear during
  that evaluation. And I believe the ATO for Matagorda came
  several weeks after COMOPTEVFOR had done their evaluation, sir.
  Commander, had the Matagorda been handling
  classified information by this time?
  Lieutenant Commander Jacoby. No, sir.
  They had not?
  Lieutenant Commander Jacoby. No, sir.
  Okay. Why did the Coast Guard issue an ATO in
  January 2005 to the Matagorda when the Navy noted that
  unresolved installation discrepancies precluded SPAWAR from
  recommending the Coast Guard to release IATO when the system is
  still considered high risk at that time, March-April of 2005?
  Lieutenant Commander Jacoby. Sir, I believe there are two
  separate processes, the Navy's operational evaluation of the
  cutter is not linked to Mr. Porter's working with SPAWAR and
  determining the suitability of the Tempest system, sir.
  Okay. Thank you, Commander. Last question. Did
  the sequence of events pose a risk of compromising national
  security at any time?
  Lieutenant Commander Jacoby. It has always been my belief
  based on input from the C4 community and the Coast Guard that
  that is not the case.
  Okay. Thank you, sir.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Tell me again, when did the Matagorda get its
  ATO?
  Lieutenant Commander Jacoby. I show a final ATO granted on
  19 January 2005, sir.
  And was that before the Navy assessment?
  Lieutenant Commander Jacoby. I do not have the Navy report
  in front of me, sir.
  March-April of 2005. How does that affect
  your testimony?
  Lieutenant Commander Jacoby. I would have to check those
  dates, sir.
  That is very, very important because you just
  gave us some information that we want to make sure is accurate.
  We can tell you that the information we got is that the Navy's
  examination was in March of 2005.
  Lieutenant Commander Jacoby. Yes, sir. I believe what I am
  reading off of is something we provided for the record. I would
  be happy to provide this and the actual reports for the record,
  sir.
  Mr. Taylor.
  

• Mr. Taylor

  At 02:35:36
  

  Thank you, Mr. Chairman. Commander Jacoby, you
  were the project officer?
  Lieutenant Commander Jacoby. I was the program manager for
  the 123 program.
  In previous testimony I heard the gentlemen
  talking about electronics that were exposed to the weather that
  were not required to be waterproof. I kept waiting for someone
  to say, no, you are wrong, it was in the specs. I still have
  not heard anyone say that. How does something as basic as that
  happen? Any boatswain mate third class is going to go the first
  time it rains, the first time we catch a wave this stuff is
  ruined. How does something like that happen?
  Lieutenant Commander Jacoby. I agree with your assessment,
  sir, that that does not seem like something that could happen.
  In reality, coming on the program halfway through, I still know
  the contract states environmental requirements for operation of
  the equipment and that a certain radio was installed on the SRP
  that did not meet those environmental requirements, sir.
  Were you empowered to catch mistakes like that?
  Lieutenant Commander Jacoby. It actually happened two years
  before I reported, sir. But yes, if I as program manager saw
  items that did not meet the contract requirements, I was
  empowered to work through the contracting officer and make
  corrections.
  Okay. So your predecessor program officer, was
  he a lieutenant also at the time? I am taking it you were a
  lieutenant a couple of years back.
  Lieutenant Commander Jacoby. The prior program manager,
  there were several, some were GS-14s, I am not sure of all the
  ranks of the previous ones.
  I realize the Coast Guard, as all the services
  do, throws a heck of a lot of responsibility on very young
  officers. But it strikes me that a program with a $90 million
  expenditure, eight ruined cutters, did you at any time then or
  since think you just were not high enough of a pay rate to
  address these problems?
  Lieutenant Commander Jacoby. Sir, I think I mirror Ms.
  Martindale's feelings of the program early on, the staffing
  levels were very bleak. When I reported aboard my billet was
  actually to be the deputy surface program manager with an over-
  arching view of all the cutters construction. Shortly after
  arriving I saw the 123 program with a need for some change and
  some guidance and I took that over in addition to the deputy
  surface job. After some months of work on the 123 it was clear
  that was a full-time job plus. So in that timeframe of 2004,
  people were wearing two and three hats and moving the program
  forward. The Commandant yesterday talked about increasing
  manning levels and oversight. I can attest I witnessed over my
  two and a half years on the program the increase of staffing
  levels. After a while the people who were wearing three hats
  got replacements and before I left in October of 2006 we were
  properly manning each billet instead of asking people to cover
  two and three billets, sir.
  Again, and I would invite you to correct me,
  but that one jumps out at me as so glaring that I find it
  inconceivable.
  Let us take it to something a little bit more complicated,
  the hogging and sagging calculations. Is that your normal
  expertise within the Coast Guard? If a crewboat company or a
  ferryboat operator were going to lengthen their vessel, is that
  the sort of calculation that you would run?
  Lieutenant Commander Jacoby. I am not a naval architect or
  a marine safety inspector, sir. But I am a shipboard engineer
  for the Coast Guard, an engineer on 2-through 78-foot ships and
  even an engineer supporting the patrol boats down in Key West
  prior to my deepwater career. I think, from a commonsense
  standpoint, I share your concern that that does not pass the
  commonsense test. But I am not a naval architect to back that
  up with calculations, sir.
  Commander, let me ask you this, and I very much
  appreciate your frankness, what is being done so it does not
  happen again? I have told you my concerns with the LCS, I have
  told you my concerns with the next generation cutters. Shame on
  me if a mistake is made once, but shame on all of us, enlisted,
  officer rank, Members of the Congress, members of the
  Administration if we let this happen again. I really, based on
  what I have heard here tonight, do not have any confidence that
  we are doing this any better. And what is particularly
  troubling, I sense this is the shipboard equivalent of sweeping
  it under the rug when you cut this ship up for scrap or if it
  is sunk offshore for a fishing reef and it is no longer there
  to be on 60 Minutes. We have got a real problem here.
  Lieutenant Commander Jacoby. Yes, sir.
  I would like to hear from you as an up and
  coming officer in the United States Coast Guard that you have
  got a high degree of confidence that this is being addressed
  rather than just let us hope nobody asks that question again.
  Lieutenant Commander Jacoby. Yes, sir. I firmly believe
  that the factors that led to the structural as well as the C4
  issues we have talked about tonight I could see the evolution
  of the things that will keep those from happening again in my
  two and a half years in the Coast Guard. One of them was the
  manning level that we talked about, the wearing three hats. I
  think there has been comparisons between Deepwater manning and
  Navy shipbuilding manning and we were trying to build ships
  with very few people.
  Another major contributor is the specificity of the
  requirement in the contract. In all these situations, we were
  dealing with contract language that was signed in 2002 and left
  the contractor and the Government in many cases unclear on the
  exact requirements. It was a performance-based contract but it
  still could have specificity that both the Government and
  industry could use to manage costs, manage expectations, manage
  requirements.
  Additionally, the oversight and the input from regulatory
  agencies, the Commandant and the PEO have mandated the use of
  regulatory agencies in further designs, and I have personally
  been involved in incorporating the things that brought us
  problems on this contract, like specific words in the contract
  or lack of words in the contract, into future contracts for the
  FRC and the OPC. So I do have a sense that I have contributed
  by the painful lessons learned to better contracts and better
  oversight and better manning for the Deepwater program, sir.
  If a contract passed your desk tomorrow that
  called for a radio, a radar, fill in the blank, that is going
  to be exposed to the weather and did not mandate that it be
  waterproof, and we all know the difference between weatherproof
  and waterproof, would you be empowered to say, no, we are going
  to fix this right now rather than buy two or three or four of
  these at Government expense and replace the ones that do not
  work?
  Lieutenant Commander Jacoby. Absolutely, sir. I do have
  examples of issues that arose in the Deepwater program that the
  program office felt did not meet contract requirements and were
  able to enforce those requirements and get design changes and
  even retrofits on the cutters. So there are examples of
  successes in enforcing the contract requirements, and then
  there are examples of the program office unsuccessfully
  enforcing, mostly because of the wording that was incorporated
  into the contract in 2002, either vague or lacking the
  specificity.
  Who in your opinion should have caught the
  hogging and sagging problem before it happened?
  Lieutenant Commander Jacoby. The Coast Guard's contract is
  with ICGS. I feel the responsibility was with ICGS. In fact, I
  worked with my contracting officer to issue two latent defect
  letters to the contractor; one days after the Matagorda
  buckling incident, the other several months later when the
  deformations appeared on other cutters.
  Okay. Thank you very much, Commander.
  Lieutenant Commander Jacoby. Yes, sir.
  Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. Oberstar.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Yes. I have a follow-up for Mr. Jacoby. In
  January of 2005 the Matagorda got authority to operate; meaning
  that they also had authority to transmit and receive classified
  data. But at that time, according to all testimony we have
  seen, they had not yet passed the instrumented test, as it is
  called. The only instrument test which allegedly was passed was
  in July 2006 but for another ship in the same class as the
  Matagorda. Was it legal for the Matagorda to operate under
  those circumstances?
  Lieutenant Commander Jacoby. I believe so, and I will tell
  you from my perspective why I believe that, sir. The two
  instrumented Tempest inspections, one on Matagorda, one on
  Padre, were not related. The Padre inspection was not meant to
  validate Matagorda's Tempest system. The original instrumented
  Tempest inspection on Matagorda, which you referred to as
  failed, was in my view as a program manager, Ron Porter
  assessed the vulnerabilities or issues with that, over time the
  physical discrepancies were corrected or Mr. Porter waived the
  discrepancies that were noted, and that original Tempest
  inspection was eventually the basis for Mr. Porter approving
  Authority to Operate, sir.
  How does that authority compare to the
  judgement of the Navy which said in a document we have that the
  system is still high-risk.
  Lieutenant Commander Jacoby. That is from a COMOPTEVFOR
  report sir?
  Yes.
  Lieutenant Commander Jacoby. I believe that the authority
  for Tempest certification lies with for the Coast Guard Mr. Ron
  Porter, for the Navy SPAWAR and not with COMOPTEVFOR, sir. I
  cannot speak to whether they would determine----
  There is this gray area here which is now
  becoming somewhat clearer that there were deficiencies and
  these deficiencies were granted waivers instead of being
  repaired rather than being covered up.
  Lieutenant Commander Jacoby. I do not know the waiver
  process or the mentality that goes behind the waiver process at
  

• Mr. Ron Porter's shop

  At 02:35:36
  

  
  

• 

  Mr. Oberstar

  At 02:35:36
  

  Okay. Thank you. We need to proceed on to the
  next panel. I particularly want to thank Mr. Ghosh, a naval
  architect, for his very candid and straightforward and helpful
  answers.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you. Thank you all very, very much for
  being with us. Your testimony has been extremely helpful. You
  are excused.
  We will call our next panel now. Rear Admiral
  Gary T. Blore, and Vice Admiral Paul E. Sullivan.
  Raise your right hands, please. Do you swear to tell the
  whole truth and nothing but the truth, so help you God? Thank
  you. Let the record reflect that the witnesses answered in the
  affirmative.
  Thank you all very much. I know it has been a very, very
  long day. Hopefully, we will not take you into tomorrow.
  Rear Admiral Blore.
  TESTIMONY OF REAR ADMIRAL GARY T. BLORE, PROGRAM EXECUTIVE
  OFFICER, COAST GUARD INTEGRATED DEEPWATER SYSTEM; VICE ADMIRAL
  PAUL E. SULLIVAN, COMMANDER, NAVAL SEA SYSTEMS COMMAND, U.S.
  NAVY
  Admiral Blore. Thank you, sir, and the members who have
  stuck it out with us. Good evening, Mr. Chairman, and
  distinguished members of the Committee. It is a pleasure to be
  here today with my colleague Admiral Sullivan. I respectfully
  request my previously submitted written testimony be entered
  into the record.
  Without objection, so ordered.
  Admiral Blore. I would like to thank the Congress, in
  particular this Committee, for your oversight of the integrated
  Deepwater system. We have adopted many of your Committee
  recommendations as we reform the Deepwater acquisition process.
  I believe the Deepwater program is our best strategy for
  building a 21st century Coast Guard capable of executing our
  missions in maritime safety, environmental protection, homeland
  security and homeland defense. As part of our effort to
  strengthen the Deepwater program, and with the Commandant's
  leadership, we have met extensively with Integrated Coast Guard
  Systems, ICGS, Lockheed Martin and Northrop Grumman. We have
  had frank discussions with industry about our intentions moving
  forward. We have strengthened the Coast Guard's acquisition
  process and revamped our procedures to ensure that the contract
  expectations of the Coast Guard and the American taxpayer are
  crystal clear.
  This hearing is focused on mistakes the Coast Guard made in
  our first Deepwater shipbuilding project. Not a day goes by
  that I am not fully committed to avoiding a recurrence of this
  disappointment. Our Coast Guard men and women deserve better as
  does the public we serve. You have my assurance that I will
  take every step necessary to redress insufficiencies in
  analysis and communications that led to the premature
  decommissioning of the 123-foot patrol boats. However, we must
  not fall victim to living in the past which neither
  recapitalizes the Coast Guard nor serves the public interest.
  Instead, we must apply lessons learned to ensure a successful
  future for the Coast Guard, our acquisitions, homeland
  security, and the American people.
  The Coast Guard has options in choosing from whom to
  acquire our assets, consistent with the Federal Acquisition
  Regulations. With the Commandant's support, I intend to use
  robust business case analysis, competition, and best value
  criteria in choosing which manufacturers will execute our
  projects. In many cases that may continue to be Lockheed Martin
  and/or Northrop Grumman, and to that end the Commandant and the
  company CEOs recently signed an agreement asserting the Coast
  Guard would: transition into becoming the systems integrator,
  lead management of all lifecycle logistics, expand the use of
  the American Bureau of Shipping, accelerate the resolution of
  remaining national security cutter issues, and where
  practicable work directly with the prime vendors. These actions
  combined with numerous other acquisitions and program
  management reforms will make the Deepwater program of tomorrow
  fundamentally better than the Deepwater program of today.
  This Committee has been a catalyst for much of this change.
  But the fundamental underpinnings of this reform began the day
  Admiral Allen became Commandant, just under a year ago. His
  first, very first new initiative as our Commandant was to
  direct a consolidation of our acquisition organization. Shortly
  thereafter, he adopted the blueprint for acquisition reform
  which called for a restructuring and prioritization of our
  agency's entire acquisition process. We will stand up this new
  structure beginning July 13th and it will take shape fully over
  the next several months.
  For the upcoming award term, which starts this June, the
  Commandant has asked me to focus on more favorable Government
  terms and conditions and on those priority delivery task orders
  occurring during the first 18 to 24 months. This allows the
  recapitalization of the Coast Guard to continue unabated while
  acquisition reforms are implemented, at the same time allowing
  a full spectrum of options for future Government purchases.
  Today marks the start of my second year in this assignment.
  Critical to our acquisition is the partnership we have built
  with our sister service. The Navy is our third party
  independent assessor of choice. They speak Coast Guard, they
  understand us, and have superb engineering and technical
  expertise to share. For example, a quarter of my resident
  project office staff at the Pascagoula shipyard is on loan from
  NAVSEA on a reimbursable agreement. Our daily contact is across
  dozens of NAVSEA's divisions, involving millions of dollars
  transferred from everything such as Navy-type, Navy-owned
  equipment to technical review. And now with the elevate role of
  our Coast Guard Technical Authority, the relationship with
  NAVSEA is even more integrated.
  In conclusion, a properly equipped Coast Guard is critical
  to our Nation, and reforming the Deepwater acquisition is
  critical to a 21st century Coast Guard. I look forward to
  working with you to ensure we can accomplish acquisition reform
  without derailing recapitalization but while focusing on the
  acquisition fundamentals of cost control, schedule integrity,
  and the surpassing of performance expectations. Thank you, Mr.
  

• 

  Chairman

  At 02:35:36
  

  I would be pleased to answer your questions.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much.
  Vice Admiral Sullivan.
  Admiral Sullivan. Good evening, Mr. Chairman. Thanks for
  having us here tonight. My name is Vice Admiral Paul Sullivan.
  I am the Commander of the Naval Sea Systems Command. Before I
  had the job I have today I was the deputy commander for ship
  design, integration and engineering. I have also been a program
  manager of two submarine acquisition programs.
  I am here to discuss our partnership with the Coast Guard
  with regard to acquisition and also technical authority. I
  would be happy to answer any of your questions, sir.
  Very well. Thank you very much to both of
  you.
  Rear Admiral Blore, first of all, I want you to know that I
  think everybody on our panel on both sides of the aisle have
  tremendous confidence in Admiral Allen. He has clearly been a
  man of action and he has made it clear that he is going to make
  some significant changes. I had an opportunity to review his
  statement yesterday, his press statement, and I was very
  impressed and was glad that he was moving in the direction he
  is moving in.
  That being said, you have heard the testimony today. I
  think we can actually start with Ms. Martindale. She seems to
  be very diligent and hard working employee, contracting
  officer, given that she has got not enough people. I do not
  think that she was trying to make you all look bad, she was
  just answering questions honestly. We have heard testimony
  throughout about how it appears that there are problems with
  having the personnel to do the Tempest test and the resources
  to properly do them. So while we listen and we hear, and I can
  go on and on, you have heard the testimony, it is clear to me
  and it is a worry that I have expressed to Mr. Oberstar on at
  least two occasions, if not more, that we have got to make sure
  that if the Coast Guard is taking on these responsibilities
  that they have the personnel, the expertise, and the resources
  to take them on. To me, if that is not the case, then I think
  that we move from one bad situation to another bad situation.
  So I am just wondering where does that stand? I will be
  very frank with you. At this moment, just based upon what I
  have read and what I have heard, I do not know that the Coast
  Guard is in a position to do certification with regard to
  Tempest. I am not sure. And there are a lot of other things I
  am concerned about. That is not beating up on the Coast Guard,
  because we want to be the Coast Guard's number one advocates,
  but we want to make sure that the Coast Guard has what it
  needs. So taking into consideration what was said by the
  Admiral yesterday, are we prepared to take on that
  responsibility?
  Admiral Blore. Yes, Mr. Chairman, I believe we are. I share
  your respect for Ms. Martindale and I would like to hire her
  back as a contracting officer for the Deepwater program if she
  would like to return and join us.
  Since I became the program executive officer a year ago, we
  have brought on about 45 new staff positions. That was the
  first increment that the Commandant and I had worked out
  together as we started preparing to build out our system
  integrator capability. I would not disagree with you for a
  moment that we are not prepared tomorrow to take over entirely
  the system integrator role. The Commandant has a plan to
  transition. We are much more capable on the logistics and the
  material side of the Coast Guard. We still need to do a lot of
  build out especially on our C4ISR side, and I will be depending
  on my colleague heavily and other Government sources to assist
  the Coast Guard with that.
  Right now, we have 22 contracting officer billets within
  the program. We have expanded that since Ms. Martindale left.
  Again for full disclosure, and I believe NAVSEA probably shares
  this issue, while I have 22 contracting officer positions, I do
  not always have 22 contracting officers. Hiring in the
  Washington, DC general area for what is called an 1102 general
  schedule person is difficult, especially at the junior
  classification rates, although we work on that very hard again
  with our colleagues. We will continue to use SPAWARs as a
  facility to run our Tempest testing. I think some of the
  confusion earlier is we have always used them for the
  instrumented testing. The actual certification is done by a
  Coast Guard official, and that is why sometimes it may have
  been confusing who was doing the certification. Tempest for
  Coast Guard assets is certified by the Coast Guard based on
  SPAWAR testing.
  Let me ask you this. In the Admiral's
  statement yesterday he said something that while it impressed
  me and it made me feel good, left me kind of slightly with
  question marks. He said the Coast Guard will expand the role of
  the American Bureau of Shipping or other third parties as
  appropriate for Deepwater vessels to increase assurances that
  Deepwater assets are properly designed and constructed in
  accordance with established standards. What does that mean, if
  you can tell me? In other words, one of the things that we have
  run into here with regard to Tempest is what is the standard.
  Is the standard a moving target? Is the standard something that
  can be waived or whatever? But putting Tempest aside, let us
  just deal with the American Bureau of Shipping, in talking to
  all of our experts they tell me if we would adhere to their
  standards we would be in pretty good shape, very good shape. I
  am wondering, does this statement mean that is the standard we
  will be using, or what does this mean?
  Admiral Blore. Do you mind if I just ask Admiral Sullivan
  to comment on ABS because we try to pattern off his program.
  Sure. Please. Whoever is best to explain it.
  Admiral Sullivan. Yes, sir, Mr. Chairman. When you are
  building a ship or any complex system there obviously has to be
  a standard that that ship or system is built to. Either the
  service can maintain a set of standards that you design and
  construct the ship in accordance with those standards and then
  you certify that ship that it has been built to the design that
  meets the standards. The third party aspect can either be
  handled by the service or by this third party, such as the
  American Bureau of Shipping. In the case of what we have in the
  Navy, we have been partnering with ABS, we have had a situation
  where we were unable to maintain our own standards due to lack
  of funding, we partnered with the ABS and developed a new set
  of standards that are not ABS standards, they are Navy-ABS
  partnership standards called the Naval Vessel Rules.
  We have had a lot of discussions in Mr. Taylor's Committee
  on what that meant to the LCS program. But they are the rules
  to which you certify the ship. Either the service can perform
  that certification by an examination inspection, looking at
  paper signatures, objective quality evidence we call it, to
  make sure that the ship has been certified to those standards,
  or we can actually hire the third party, which in this case is
  the American Bureau of Shipping, to what we call ``class the
  ship'' by examining first the design and making sure the design
  meets that standards, and then by inspecting the ship as it is
  being constructed and certifying that the ship was built in
  accordance with the design which met the class standard.
  So who would do, say, the third party
  certification of things like the systems such as electronics?
  Who would do that?
  Admiral Sullivan. Yes, sir. ABS does not have experience to
  do that. So for naval ships, as Admiral Blore said, the Space
  and Naval Warfare Systems Command, otherwise known as SPAWAR.
  They would do that certification for the Navy.
  Admiral Blore, can you guarantee that none of
  the problems found on the 123s will be repeated on the NSCs?
  Admiral Blore. Mr. Chairman, I can guarantee you that when
  we discover them we will address them individually and
  correctly, and will communicate, and will do the analysis
  necessary so that we knowingly walk into the future. I am not
  going to suggest for a moment that a platform as complex as the
  National Security Cutter is not going to encounter issues. I
  have 20 or 22 right now that I look at at my level but we
  address each one, we address the risk, we address the potential
  consequences, we work with our colleagues primarily at SUPSHIPS
  down in Pascagoula and eliminate them as discrepancies.
  Are you anticipating, other than beyond what
  you just said, are you anticipating those problems similar to
  the 123s in any way?
  Admiral Blore. Absolutely not. The National Security Cutter
  will be the finest Coast Guard cutter we have ever had. It will
  be more capable, we are working through all the issues, and we
  are doing it before we accept delivery of the cutter.
  Thank you. Thank you. That is helpful. Is
  that a new way of doing business?
  Admiral Blore. I think Congressman Taylor would say it is
  the only way of doing business. It is the way we should have
  always been doing it to work out these things before the
  Government accepts final delivery. In almost probably every
  case when you do a DD-250 and accept custody there is going to
  be some discrepancies, but there should be no major high-risk
  discrepancies that you are accepting when the Government takes
  ownership.
  Thank you. As far as low smoke cabling, is
  that used in the NSC?
  Admiral Blore. Yes, sir.
  Is it meeting specifications?
  Admiral Blore. Yes, sir. But there is similar issues to
  what we discussed before in that one of the tenets of the
  Deepwater program, and I think it is a good tenet, is to
  attempt to use commercial off-the-shelf equipment when it is
  appropriate. So we have a lot of the little like the mouse
  cable to the computer, a water fountain that just does not come
  with low smoke cabling. It is possible for the Government to
  request that all to be switched out, but we do not think
  anybody is at any degree of risk because of a couple feet of
  cable. When it is longer, for example, the main mount, the 57
  millimeter came with non-low smoke cable and we asked the
  manufacturer to switch that out before we installed it because
  it was a pretty long run.
  You have heard the testimony with regard to
  these waivers. Do you think that the Coast Guard appropriately
  waived in the past, and do you see any changes with regard to
  waivers in the future? One of the concerns, it seems to me, and
  I heard the testimony of some earlier witnesses about how there
  were certain things that maybe were connected to telephones and
  things of that nature, wires, but it seems to me we would try
  to be in front of all of that so that we lessen the disputes. I
  am just wondering, are there any lessons learned with regard to
  waivers? You know what happens when we hear about waivers, we
  begin to think, well, is somebody trying to get around the
  provisions of the contract. And when you are talking about low
  smoke cabling, then it sends up bright lights and alarms
  because we are concerned that your personnel might be harmed in
  case of an emergency. So I am just wondering, are there any
  lessons learned with regard to these waivers?
  Admiral Blore. Yes, sir. I think there are a lot of lessons
  learned. But let me just speak to one of them because I think
  it is probably the singularly most significant event in the way
  we conduct the Deepwater program now. When Deepwater was first
  organized it was basically our organic organization; everything
  was contained within it. We did our own logistics, this is
  going back to 2002/2003, and it became somewhat isolated. It
  originally started with only 75 Government personnel. We are
  much larger than that now.
  We have formally established the role of our technical
  authority, which is Admiral Dale Gable, which is, in essence, a
  smaller version of NAVSEA that we have within the Coast Guard,
  and we have another Admiral Dave Glen who functions in the same
  role for C4ISR. I am not an engineer. Even the engineers will
  offer different opinions occasionally, some of which you have
  heard today. The beauty of the current system is I do not try
  to sort that out. I go to the chief engineer of the Coast Guard
  and say what would you like me to do, or I go to the chief
  C4ISR admiral in the Coast Guard and say what would you like me
  to do. Because, in the end, it is their opinion that I am going
  to value and follow. So I think that is the most significant
  thing. If the chief engineer of the Coast Guard said that we
  should accept a waiver on something, I would certainly discuss
  it with him to make sure I understood what his rationale was,
  but that is why he was appointed in that position for the
  Commandant, and the same thing on the electrical side.
  Now would you send the cutter one to the Navy
  COMOPTEVFOR, is that how you pronounce it?
  Admiral Blore. Yes, sir, COMOPTEVFOR. It is Commander,
  Operational Test Forces.
  Will you do that? In other words, are you
  going to send them to that center for the same analysis that
  was performed on the 123s?
  Admiral Blore. Yes, sir. In fact, we have established a
  huge staff of eight Coast Guard men and women that are actually
  assigned the COMOPTEVFOR that work with the larger staff that
  is there so that we can help advise the testers and evaluators
  with COMOPTEVFOR of what the Coast Guard unique requirements
  are, and the Coastees are actually assigned there full-time and
  sit next to our Navy and Marine colleagues.
  Now the Defense Acquisitions University
  recommends that the Coast Guard should convene a summit of the
  Coast Guard, the integrated team, and the Navy to examine all
  opinions about fatigue life on the NSCs. Will you convene that
  summit?
  Admiral Blore. Yes, sir. I actually hired Defense
  Acquisition University to come in and do that analysis because
  we wanted to get the opinion of acquisition professionals on
  our acquisition policy. As you know, they gave us a good number
  of recommendations which we are incorporating. We have already
  had that summit. We have worked with the Carderock division of
  NAVSEA, and we have actually worked out a technical solution
  now with Northrop Grumman. It is not on contract yet, it should
  be on contract by the end of this month. It is typically
  referred to in the Coast Guard as the ``one break solution,''
  but it assures the fatigue life of the National Security Cutter
  of 30 years, 30-plus years.
  What measures will now be taken to increase
  the role of the Navy in testing the C4ISR security, in
  assessing the effectiveness of the ship designs, and improving
  the management of the Deepwater contract?
  Admiral Blore. Specifically for C4ISR, Mr. Chairman, we are
  trying to build our own Coast Guard organic capability a little
  bit more. It is going to probably take us 18 months before we
  have our own evaluators within the Coast Guard. In the
  meantime, we are completely dependent on NAVSEA for any of the
  instrumentation and testing. We certainly have some expertise
  in the Coast Guard but it is certainly not our intention to go
  it alone for C4ISR. That will be an area in particular that we
  will be heavily dependent on Admiral Sullivan and others.
  The Defense Acquisition University report
  suggests that the acquisitions excellence in business
  competencies are not valued in the Coast Guard as much as
  operational excellence. Can you comment on this finding, and
  what will you do to cultivate acquisitions and financial
  management expertise among your personnel? I want to go back to
  something that the Commander said when he talked about, and
  this has come up in other hearings, the capacity to have
  contracting officers, folks who have expertise in putting
  together these contracts. I think Admiral Allen has admitted,
  along with many others, that part of the problem with this
  contract is that a lot of the provisions are not necessarily in
  our best interest, and some place us in a position where they
  just call out for dispute because there are some ambiguities.
  Perhaps we could have resolved a lot of this, I think Ms.
  Martindale may have mentioned it too, if we had had the
  experienced contract folks involved in the process of creating
  the contract that was more balanced and certainly in the best
  interests of the Coast Guard and the American people.
  Admiral Blore. I agree with what you just stated, Mr.
  

• 

  Chairman

  At 02:35:36
  

  We have a type of contract that probably requires the
  most sophisticated expertise in contracting officers as opposed
  to a contract that has a lot more specifications. That is why
  we are changing the terms and conditions as we go into the next
  award term. We really do believe that the contract is the key,
  which is why we want to work on the terms and conditions, and
  at least enough specificity that, while it is still a
  performance-based contract, there is enough specificity so
  there is no misalignment with what we expect from industry.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you. Mr. LaTourette.
  

• 

  Mr. LaTourette

  At 02:35:36
  

  Thank you very much, Mr. Chairman. Admiral
  Blore, in your written testimony you state, ``At no time did
  the 123-foot patrol boats engage in mission operations without
  first successfully completing standardized testing.'' Does that
  mean that at no time did these vessels operate without the
  Authority to Operate designation?
  Admiral Blore. Sir, to the best of my knowledge, they have
  never transmitted on a classified frequency or received on a
  classified frequency without the correct authority to operate.
  These cutters have commanding officers, they know when they
  have authority to operate; they will and have in the past
  gotten underway and not energized any of their secure gear
  because they did not have the authority to operate. I can also
  say as part of my sworn testimony that I have never been made
  aware of any compromise that has ever occurred off a 123-foot
  cutter. We are also, the Coast Guard, a member of the
  intelligence committee, and neither has my chief of
  intelligence of the Coast Guard ever notified me that there has
  been a detected compromise from a 123-foot cutter.
  And to both admirals. The Chairman talked
  about waivers and we have spent a good portion of the hearing
  talking about Tempest and Tempest testing and waivers. Is it
  unusual for waivers to be granted in the Tempest testing
  program either in the Coast Guard or in the Navy?
  Admiral Sullivan. It is not unheard of but it is not
  common.
  Admiral Blore?
  Admiral Blore. I really do not think I know the answer to
  your question. I am sorry. It certainly appears to have
  happened in the 123. I would be happy to submit something for
  the record and go through the rest of our cutters and see
  whether they have any waivers.
  If you could.
  [Information follows:]
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
  As a follow up question, and if you cannot
  answer this today maybe you can get back to me too, but Admiral
  Sullivan, if you know, can these waivers ever be granted if
  there is a risk that national security will be endangered?
  Admiral Sullivan. I think I would rather take that for the
  record so I could pass it to the proper people. I am more the
  ship engineering guy than the C4ISR.
  Okay. And Admiral Blore, maybe you could
  get back to us on that one as well.
  Admiral Blore, yesterday in the Commandant's statement he
  made about three insightful and succinct points that led us to
  that point. He stated that the Coast Guard relied too much on
  the contractors to do the work of Government. As a result, the
  tightening AC&I budgets, a dearth of contracting personnel in
  the Federal Government, and a loss of focus on critical
  Government roles and responsibilities in management and
  oversight of the program. I think the principles that he laid
  out clearly address the third item.
  But relative to the contracting officers, I think it would
  be my observation that contracting officers, like Ms.
  Martindale, do not fall from the sky. And one of my questions
  was does the service have the ability to do that today, and I
  think you said no, and I think you said something about 18
  months. Maybe I am mixing your answers. Can you just share with
  us how many of these experts the Coast Guard thinks it needs to
  hire to adequately do the job, and how the service plans to
  identify and hire these folks?
  Admiral Blore. Yes, sir. I believe currently we have
  sufficient contracting officer positions, the 22 that I alluded
  to before. I think right now we have 17 filled, so I would like
  to bring that up to complement. There are a couple things that
  the Office of Personnel Management is allowing us to do now. We
  can do what is called direct hires. So if I find somebody that
  is fully qualified, I can basically offer him a job on the spot
  if they are qualified to be a Government contracting officer.
  So that has helped. We have also had a shift in processes
  where we are using our contracting officers in the field more
  than we did originally with the Deepwater program. For example,
  I have a contracting officer in Elizabeth City at the aircraft
  repair and supply center, and I am doing a lot of the spare
  parts purchases for the CASA and also through Eurocopter for
  the H-65 helicopter through the facility at ARNSC. We are
  starting to set up the same thing. I have a contracting officer
  that is about to be warranted in Pascagoula so that much of the
  contracting work can be done on site, which I think frankly is
  the Navy model where contracting officers are typically on site
  where the construction is taking place.
  Okay. My last question, Mr. Chairman. The
  first panel, I know Admiral Blore you were in the room for the
  first panel, I think I have tried to boil down the essence of
  the allegation that was made. The allegation that was made by
  some folks in the first panel is that Lockheed Martin underbid
  the 110 conversion contract without the expertise to properly
  complete it. Then when discovering that they were over their
  head, they made business decisions based on cost and schedule
  on, among other things, low smoke cables and shielded cables
  for the Tempest system that compromised national security and
  endangered Coast Guard personnel. Do you think that is an
  accurate representation of what happened with this conversion
  program?
  Admiral Blore. I do not believe I have the necessary
  information to make a judgement, sir. The one thing I would
  say, and I think this would support what Ms. Martindale said,
  is a properly run acquisition would run enough Government cost
  estimates and other surveys, including using our Government
  audit agency, to ensure that a contractor is not bidding a
  price that on its appearance could not possibly do the work
  that the Government is asking for. That is the way the
  Government protects against what someone earlier referred to as
  an aggressive bid. If it is that aggressive, then the good
  Government cost estimate should show that it is too aggressive
  and work should not be awarded. I do not know enough about the
  details to really answer the question you asked, sir.
  Specifically on the waivers and the low
  smoke cabling that Commander Jacoby talked about, are you in
  agreement or in a position to be in agreement with the decision
  he made relative to the placement of those cables on the ship?
  Admiral Blore. I think I would, based on everything I know,
  I think I would agree that the waivers were appropriate for the
  non-low smoke cables that were used. One of the things that the
  Inspector General pointed out, which was very true, is that
  often the waivers and deviations were given after the fact; in
  other words, they were following installation. That is another
  bad acquisition practice. If you are going to do something like
  that, it ought to be done before anything is installed. But I
  think the actual location, and I think even the Inspector
  General agreed with this, that there was no risk to the Coast
  Guard crew for the non-low smoke cables that were installed.
  But they did find fault with the process and why the deviations
  were given after the fact.
  And the fact that four ships had been
  delivered out of spec until that waiver was requested and
  granted. Okay. Thank you very much. Thank you, Mr. Chairman.
  

• 

  Mr. Cummings

  At 02:35:36
  

  We are going to do business differently now,
  right? I am just following up on what Mr. LaTourette just asked
  you. We are not going to be having these waivers after the
  stuff is already done, are we?
  Admiral Blore. Not unless the waiver is in the interest of
  the Government. There is always going to be considerations made
  that perhaps a piece of equipment is in the interest of the
  Government to have installed before the fact, otherwise we will
  not accept it.
  Before we get to Mr. Oberstar, I think one of
  the things that we are most concerned about, when you talk
  about this low smoke cable and things that would go to the very
  survival, I am talking about life and death of the very people
  that you command, I think that we have to have a certain hope,
  a standard where if we are going to err with regard to waivers,
  we err on the side of life and safety. And sometimes I just
  wonder, I have read what has been written in the IG report or
  what has been represented to us, and I just wonder whether we
  have done that consistently with those waivers. I think when we
  are dealing with things like that, you know what, if we are
  granting these waivers and then something happens and we in the
  Congress knew about it and did not try to address it, then I
  think we become a part of the problem.
  

• 

  Mr. Oberstar

  At 02:35:36
  

  
  Well said, Mr. Chairman. And Mr. LaTourette,
  I also appreciate your line of questioning and the issues you
  raise. They are extremely important.
  Admiral Blore, at the outset of your testimony, and Admiral
  Allen's remarks in a news conference yesterday, ``avoid
  recurrence.'' Good. We want to avoid recurrence. But let us
  avoid living in the past. Let us not review the past.
  Philosopher George Santayana wrote ``Those who do not study the
  past are condemned to relive it.'' Thirty years ago, the Coast
  Guard in 1978 completed construction of two polar icebreakers.
  It was my first or second term in Congress. The Polar Sea and
  the Polar Wind. The Polar Sea went on mission to break ice in
  the North Pole. In February of 1981 it got stuck and stayed
  there for two months. We are about learning lessons from the
  past and making sure they are not repeated in the future. I do
  not want to be lectured in this Committee and all our members
  be lectured about learning from the past.
  Were you aware that Admiral Kraymek [phonetically] after he
  retired went to head the ABS, American Bureau of Shipping?
  Admiral Blore. Yes, sir.
  And that during his tenure, he is now retired
  from there, he offered to Bollinger to do structural
  engineering analysis and to do it free. Are you aware of that?
  And was refused.
  Admiral Blore. I am not aware of the details, sir. I have
  certainly heard that but not from a necessarily credible
  source. But certainly I have heard the story that it was
  offered.
  In one case the Coast Guard said, gee, we do
  not want to take the Navy's offer of doing this design analysis
  because it is going to cost us $42,000. On the other hand, the
  shipyard gets an offer of free review and analysis and they
  will not take it either. There is something wrong with this.
  Admiral Allen announced yesterday the Coast Guard is going
  to take the lead role of systems integrator for Deepwater. I am
  not convinced you are ready to do that. Tell me how you think
  you are going to be able to do that in light of the testimony
  we have heard today.
  Admiral Blore. Yes, Mr. Chairman. Before I answer that, let
  me say it was never the intent on the part of the Coast Guard,
  and certainly I speak for the Commandant, to sound like we were
  lecturing anyone on learning from the past. There is perhaps a
  little bit of a semantic difference. We do believe in learning
  from the past. We do believe in applying those lessons to the
  future. I think we meant it more in the context of not to fight
  the last war. We need to learn from the past and apply it to
  the future acquisition, because we know, and as you know, we
  have a responsibility to recapitalize the Coast Guard so we can
  keep doing our missions. That is what we meant. I am not
  suggesting for a moment we should not learn lessons from what
  occurred----
  I appreciate that, but we want to know that
  the Coast Guard is learning those lessons and that they are
  ready to in various ways shoulder the responsibility of
  handling multibillion dollar contracts that are going to carry
  the Coast Guard's capital equipment program into the future
  with a high degree of certainty that it can succeed. I have
  been through this years ago with the FAA.
  They were unable, as it turned out, and it was again the
  Navy who came in and did an assessment, Admiral Sullivan, of
  FAA's procurement program in the STARS acquisition an the
  Advanced Automation Replacement System, and said they just do
  not have the personnel, they do not have the systems, they do
  not have the structure, they do not have any understanding of
  how to handle these multibillion dollar contracts.
  And it seems to me the Coast Guard was in the same mess.
  You got in way over your head and you allowed these contractors
  to certify themselves. And we want to know when we go forward,
  we want to do this Coast Guard authorization bill and do it
  right, put the money out there that is needed, give you the
  resources you need to move ahead, we want to know you are going
  to be able to do the job right.
  Admiral Blore. Yes, sir. I appreciate that and I appreciate
  your support for the resources. I believe we can do it right.
  That is why we have increased our staffing, that is why we have
  changed our processes on how we address things, and that is why
  we have a much closer working relationship with the United
  States Navy, because we know what we can do and we know what we
  cannot do and that is where we will depend on other Government
  agencies, primarily the Navy.
  To whom does the Navy turn when it needs
  advice on hull, machinery, and electronics? Or are you really,
  as everyone says, the gold standard?
  Admiral Sullivan. Sir, I do not know if we are the gold
  standard, but we have worked very hard to keep the expertise
  for hull, mechanical, electrical, and electronics in-house
  because we believe that only the service can be in charge of
  knowing what it wants and specifying what it needs and in
  directing the contractors to deliver the performance that we
  need. Now that is a very precious core capability, we feel it
  is inherently governmental, and it takes years to grow.
  In the upcoming authorization bill, it seems
  to me this would be an appropriate time to craft, as we have
  done for the Corps of Engineers in a bill that is coming up on
  the House floor tomorrow, a process of independent review.
  Admiral Blore, what would be the Coast Guard's reaction to, in
  general, an independent review authority for major contracts?
  Admiral Blore. Well I think generally our reaction would be
  if it is the desire of the Congress that we would execute it. I
  do not know that we need congressional authority to do that. I
  think much of the independent reviews, such as hiring Defense
  Acquisition University and using third parties, we have ample
  authority to do ourselves.
  There is no question you have ample authority
  to do it. You have showed you have not used that authority and
  maybe what you need is direction from the Congress.
  Admiral Blore. Mr. Chairman, respectfully, I think that I
  would agree with your statement for 2002 through about 2004-
  2005. I think that the Commandant has changed the way we do our
  processes. Having said that, our number one priority as far as
  any legislative language is just that the Coast Guard be
  allowed the opportunity to continue our recapitalization
  program. Anything else that the Congress desires us to do, if
  it is passed in the legislation, obviously we would do it, but
  we would hope that we would be allowed to continue to
  recapitalize the Coast Guard so we can execute our missions.
  And anything else, if the Congress would like to suggest it, we
  would be happy to execute it.
  We do not want to slow down that process at
  all. We do not want to stop it in its tracks. But the same with
  the Corps of Engineers who act only on direction of the
  Congress, and yet we have felt for some time that there was a
  need for independent review. The Corps of Engineers came to an
  agreement with us on that and we have language that tomorrow
  will be on the House floor that will provide for that
  independent review. We will explore this further as we move
  into the authorization process and draw on the great resources
  we have in the members on this Committee on both sides of the
  aisle. Thank you, Mr. Chairman. And thank you very much,
  Admiral. We are about to set a record for endurance in this
  Committee. In another 15 minutes we will have done that. I
  thank you for your endurance.
  

• 

  Mr. Cummings

  At 02:35:36
  

  Mr. Gilchrest.
  

• 

  Mr. Gilchrest

  At 02:35:36
  

  Thank you, Mr. Chairman. Admiral, how did
  these cutters get to Curtis Bay? These eight cutters, how did
  they get up there?
  Admiral Blore. I believe we towed the cutters. They may
  have gotten underway because they were capable of it to meet
  whatever cutter was towing them. It was our choice to tow them
  because we had put operational restrictions on them to keep the
  crew safe and not at risk and we felt it progressed to the
  point that we did not want the cutters functioning
  independently.
  So I understand they are going to be
  scraped.
  Admiral Blore. Yes, sir.
  Where are they going to be scraped?
  Admiral Blore. I do not think that has been determined yet,
  sir.
  So they are in such a condition that none of
  them could be salvaged or fixed?
  Admiral Blore. Again, I am speaking on what I have been
  told because I am not an engineer. Admiral Gable, our chief
  engineer, did do a fairly exhaustive study on the cutters.
  There was about six recommendations presented to the
  Commandant. I think right now there are three competing
  theories on what the root cause is.
  One is a naval architectural effect called channeling.
  Another is that the stern section, because of the way the lines
  are, was overly buoyant. The third is that the metal itself was
  so fatigued it did not have enough structural strength from the
  original 110s. It is Admiral Gable's opinion that he has a very
  low confidence that any----
  At any rate, it is likely that the best
  thing to do rather than go through any more expense is to just
  scrap all eight?
  Admiral Blore. Yes, sir. Because it is going to involve
  millions of dollars. A single cutter, probably 18 to 24 months
  to develop whether your solution actually works. And I think
  the Commandant would like to focus elsewhere, sir.
  Just a couple of other questions. This would
  be to Admiral Sullivan. Do you feel that the Coast Guard
  adequately addressed the concerns that apparently the Navy
  shared with its engineers about the hull integrity of these
  123s?
  Admiral Sullivan. I can tell you, we said to the Coast
  Guard we were worried about the plate thickness in the section
  modulus of the hull, and we offered to help beyond that. I
  would be remiss to try to explain----
  Was this consultation in the early stages of
  the consideration of the design of these vessels?
  Admiral Sullivan. I think the consideration stared with
  very casual conversations in 2002 and nothing came of those,
  and then there were more serious conversations in 2005 when we
  actually produced a cost estimate for what we would do. And
  then that was about it, sir.
  So, Admiral Blore, do you think that the
  problems that we have seen here today about adequate
  communication, consultation, recommendation between you and the
  Navy regarding this kind of issue has been adequately resolved?
  Admiral Blore. Yes, sir, especially as far as relationships
  between us and the Navy, and in this particular case, using CCD
  or the Carderock division for expert counsel.
  This ranges from hull design to logistics to
  C4ISR, the whole ball of wax. Do you feel the integration here
  is pretty well complete on these issues?
  Admiral Blore. Yes, sir. And I would say really at all
  levels between C&O and the Commandant, between me and my
  colleague and certainly PEO ships, and same thing on the
  logistics and the naval engineering side and C4ISR side.
  Let me ask, the capabilities that the Navy
  has for in-house engineering, is that also part of your
  conversation that those capabilities, that in-house engineering
  capability, can any of that be available to the Coast Guard?
  Admiral Sullivan. Yes, sir. We stand ready to help. We are
  heavily loaded today. We have our own issues with cost
  reduction and staffing reduction at headquarters. But compared
  to the capability that the Coast Guard lacks, we are robust,
  and subject to workload, we would definitely be ready to work.
  Is that something that you would solicit,
  Admiral Blore, from the Navy?
  Admiral Blore. Yes, sir. You are expressing it,
  respectfully, as if there is some hesitation on our part. There
  is no hesitation for us to work with the United States Navy.
  Have the Coast Guard and Navy discussed the
  possibility of enhancing the commonality of the Navy and Coast
  Guard vessel designs and component systems?
  Admiral Blore. Yes, sir. I could just give you two quick
  examples. Certainly for much of the navy-type, navy-owned
  equipment on the National Security Cutter, we are using the
  recommendations of the Navy. Our preference is to stay standard
  with them if we can, because they bring----
  You say your preference is to stay standard.
  Would it not be better if it were standard, and can it be made
  standard?
  Admiral Blore. Yes, sir. But, for example, they would put
  many more weapons systems on a patrol boat than we would. So
  there are some cases where we will not be standard because we
  just will not have as powerful a weapons suite as they would.
  In the case of the Offshore Patrol Cutter, which is still a
  couple of years away, we are currently working with NAVSEA to
  actually do a study together on how the LCS, and original
  design offshore cutter, or even our National Security Cutter
  might be used to kind of form the basis of a design. We are
  very interested in seeing how the Latorial combat ship develops
  and whether it would be possible to have potentially, for
  example, a Coast Guard version of that. So we are very
  interested in being aligned and have commonality when we can.
  Admiral Sullivan. Let me give a couple more examples, sir.
  The gun on the National Security Cutter is the same as the gun
  on the LCS, and that gun is also going to be used on a DDG-
  1000. We are sharing all of our information across the services
  to work to make sure we are as common as we possibly can be in
  the installation of that gun. Additionally, I mentioned Naval
  Vessel Rules before where we were developing them in
  conjunction with ABS. The Coast Guard signed on I guess about
  two years ago and there is a Coast Guard annex to the Naval
  Vessel Rules.
  So we are sharing all the lessons learned and all of the
  rule development. My chief engineer, Kevin McCoy, and Admiral
  Gable, his counterpart in the Coast Guard, have co-signed an
  agreement that they will work together, and Admiral Gable is
  now attending all the meetings of the Naval Vessel Rules
  Committee. So there is an awful lot going on there now.
  Thank you very much, gentlemen. Thank you,
  

• 

  Mr. Chairman

  At 02:35:36
  

  
  

• 

  Mr. Cummings

  At 02:35:36
  

  Thank you very much. Mr. Kagan.
  

• 

  Mr. Kagan

  At 02:35:36
  

  Thank you, Mr. Chairman. I will make no
  reference to icebreakers because by the time we get out of here
  all the polar ice caps are going to be melted.
  Admiral Blore, I just want to get your opinion on record
  here about Mr. Ronald Porter. Is Ron Porter a CTTA?
  Admiral Blore. Again, as was mentioned before, I do not
  think I have actually met him or asked to see his credentials.
  I would go to the assistant commandant for command control and
  information to get certification on Tempest and I believe they
  used Mr. Porter.
  Okay. Then I will ask you a hypothetical
  question. Assuming that he is not CTTA, then would it be true
  that those ships that have been firing up their communications
  equipment have been doing so in violation of our rules and
  laws?
  Admiral Blore. I would assume you need to have the proper
  certification and authority to grant the Authority to Operate,
  yes, sir.
  Okay. Thank you, gentlemen, for your service to
  the country. I yield back my time.
  

• 

  Mr. Cummings

  At 02:35:36
  4 hours

  Thank you very much. I want to thank you all
  for your testimony. I want to thank the Members of Congress for
  sticking around this long. I know they have fifty million
  things to do.
  This does conclude our hearing. But please understand that
  Mr. Oberstar and many of us have expressed our concerns with
  regard to where the Coast Guard is going. We want to make it
  very, very clear, and I said it from the very beginning when I
  was appointed the Subcommittee Chairman, I am going to be a
  number one fan of the Coast Guard. But in being a number one
  fan, that also means that we want the Coast Guard to be the
  very, very, very best it can be so that it can do all the
  things that it is mandated to do and do them effectively and
  efficiently.
  So this has in no way been an effort to try to make anybody
  look bad. We just need to look to see what has happened in the
  past, as Mr. Oberstar said, so that we can chart a most
  effective and efficient course for the future. I think this
  hearing has gone a long way towards doing that. We certainly
  will look very carefully at what has transpired here and act
  accordingly. I am sure that there will be some follow up
  questions. We thank you all very much.
  This hearing is adjourned.