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Title: Improving Government Procurement: Lessons from the Coast Guard Deepwater Program
Authors: Trevor Brown
David Van Slyke
Matthew Potoski
Keywords: Contract Management
Public Management
Coast Guard
Issue Date: 17-Sep-2010
Publisher: Acquisition Research Program
Citation: Published--Unlimited Distribution
Series/Report no.: Deep-water Program
Abstract: The Coast Guard launched the Deepwater contract in 2002 to much fanfare, promising a new paradigm for managing large government contracts. The Coast Guard's aim was to establish a contracting paradigm founded on a cooperative partnership between government and industry in order to cut through the rigid regulations and red tape that killed contracts through a thousand small wounds. The Deepwater contract gave the vendor, Integrated Coast Guard Systems (ICGS), very broad responsibilities and discretion to achieve the Coast Guard's goals, promising that the vendors high performance would be rewarded with financial bonuses. Four years later, after a series of highly publicized problems with patrol boats that the Coast Guard was buying, the Deepwater partnership was over. While ICGS was successfully delivering some Deepwater ships and aircraft to the Coast Guard, other vessels were over-budget and behind schedule. By 2009, the Coast Guard was back to using traditional contracting approaches to overhaul its fleet: buying assets one at a time, scrambling to hire more contract managers, and relying on a regulations and enforcement approach to acquire the Deepwater system. In many ways the Deepwater contract was designed according to contract management principles that call for a less rule-bound and more fluid contracting process. Instead of specifying at the outset how the Coast Guard expected this system and its components to work, the Coast Guard allowed the vendor to specify the system as it was built and deal with unforeseen challenges as they arose. The promise of Deepwater was that a public-private partnership, guided by performance goals, would deliver a more innovative and cost-effective solution than a contracting regime governed by rules that rigidly specified all of the system's inputs, activities, and outputs in advance. Our review of the Deepwater program suggests that the program's problems stemmed from several sources. The Coast Guard and ICGS never developed the cooperative partnership as it was originally envisioned. The Coast Guard was decidedly passive in the partnership and did not dedicate sufficient experienced personnel to help manage the contract. As a consequence, ICGS made important decisions about the Deepwater program without sufficient Coast Guard input, some of which may have benefited ICGS at the Coast Guard's expense.
Description: Contract Management / Grant-funded Research
Appears in Collections:Sponsored Acquisition Research & Technical Reports

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