OOH, PRIVATIZATION! The Coast Guard has lost eight patrol boats. Eight expensive patrol boats. Coast Guard Commandant Thad Allen announced this morning that the boats would be decommissioned because of hull cracks and other problems. The boats are part of the Deepwater program, which was intended to substantially modernize the entire Coast Guard fleet. As a series by Eric Lipton in The New York Times detailed a few months ago, the Deepwater program has been plagued by cost overruns, design problems, and serious issues with contractors. The initial arrangement, as David Axe details, gave significant latitude to a partnership between Lockheed Martin and Northrup Grumman in assigning secondary contracts. That arrangement has ended, and the Coast Guard has resumed its oversight role.
It would be tempting and all too easy to blame the problems of Deepwater on a misplaced mania for the privatization of critical government functions. Accordingly, I'll do just that. The principle-agent problems associated with essentially handing the henhouse to the fox should have been obvious from the beginning. "Iron Triangle" dynamics have made the situation worse, as retired Coast Guard officers slide easily into jobs with top contractors. Even minimal hopes for oversight get quashed, and tremendous waste predictably results.
Let's hope that the project can be righted. The Coast Guard plays an important and oft-overlooked role in U.S. defense, and its fleet is in need of an update.
--Robert Farley
