H.R. 1665: Coast Guard Acquisition Reform Act of 2009

H.R. 1665

Coast Guard Acquisition Reform Act of 2009

Sponsor
Rep. Elijah E. Cummings

Date
July 21, 2009 (111th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

The House is scheduled to consider H.R. 1665 under suspension of the rules, requiring a two-thirds majority vote for passage. H.R. 1665 was introduced on March 23, 2009, by Rep. Elijah Cummings (D-MD). The Committee on Transportation and Infrastructure reported the bill by voice vote on April 2, 2009.

Bill Summary

Procurement Structure:  H.R. 1665 makes several reforms to the Coast Guard's procurement process.  The bill prohibits the use of a lead systems integrator beginning 180 days after enactment of the Act.  H.R. 1665 also requires full and open competition for a contract issued by the Coast Guard or any lead systems integrator employed by the General Counsel.

Acquisition Policy:  The bill would require the Coast Guard to establish specific operational requirements for a new acquisition before awarding a production contract.  H.R. 1665 also requires the Coast Guard Commandant to put several certain terms in all contracts for acquisitions costing at least $10 million.  Life-cycle cost estimates are also required for projects expected to cost over $10 million or result in assets with service lives of 10 years.  Independent life-cycle cost estimates would be required for acquisitions with total costs of over $100 million.

For acquisitions costing over $100 million, the Coast Guard would develop and approve a formal Test and Evaluation Master Plan (TEMP) to guide all developmental and operational testing.  The Coast Guard would be required to report to Congress on these acquisitions.  The Coast Guard must also report to Congress for these projects when a cost overrun of greater than 10 percent is likely to occur, a delay of 180 days is likely, or a failure for a new asset is anticipated.  If an acquisition is likely to have a cost overrun of greater than 20 percent or a delay of more than one year, the Coast Guard must certify that the asset is essential to the service, that there are no alternatives to such an asset, and that new cost or schedule estimates are reasonable.

H.R. 1665 prohibits the Coast Guard from entering an "Undefinitized Contractual Action" unless it is approved by the Head of Contracting Activity.  An "Undefinitized Contractual Action" is a procurement for which contractual terms, specifications, or price are not agreed upon before the contract is begun.

The bill requires the Commandant to issue guidance to ensure that "excessive pass-through charges" are not paid by the Coast Guard for work performed by subcontractors to a lead systems integrator.

Coast Guard Personnel:  The bill establishes a Chief Acquisition Officer position within the Coast Guard, establishes requirements for the position, and makes a number of reforms to management of its acquisition personnel and policies.  H.R. 1665 requires that design and related acquisition issues that are elevated to the Chief Acquisition Officer be reported to Congress within 45 days.

The legislation would require the Commandant to implement a program to recognize excellent performance by individuals and teams that have contributed to the long-term success of a Coast Guard acquisition effort.  H.R. 1665 would also provide the authority to retain and promote officers with specialized skills and allows the Commandant to designate acquisition programs as "shortage category positions" to better recruit and appoint qualified people directly to these positions.

 

 

Background

This legislation is based on H.R. 6999, the "Deepwater Acquisition Reform Act of 2008," which passed the House in the 110th Congress by voice vote. The Senate never acted on that bill. The bill now under consideration by the House expands the scope of the legislation to address all Coast Guard acquisitions (not just Deepwater) and all phases of an acquisition.

Coast Guard capital expenditures are funded through Congressional appropriations. The total appropriation for this purpose in Fiscal Year 2009 is about $1.5 billion-an increase of 33 percent over last year.

The single largest acquisition program is Deepwater, which received over $1 billion in the Omnibus spending bill this year. The Deepwater program is a multi-year acquisition to upgrade or replace the Coast Guard's surface and air assets, as well as modernize command and control technology systems. Deepwater, as well as other acquisition programs, have been plagued by a series of procurement failures, are hundreds of millions of dollars over budget and badly behind schedule.

 

Cost

Assuming appropriation of the necessary amounts, CBO estimates that the Coast Guard would spend less than $5 million over the next two or three years. Enactment of the bill would not affect direct spending or revenues.

Additionally, the reforms required by H.R. 1665 could result in lower procurement expenditures in the future, but CBO cannot estimate the likely size of cost savings from improving procurement practices or clearly identify what proportion of such savings would be attributable to the legislation and what share would result from changes that the Coast Guard is already implementing under current law.