Coast Guard Meets with Lockheed, Northrop

Wednesday, January 24, 2007
U.S. Coast Guard Commandant Adm. Thad Allen met last week with chief executive officers from Lockheed Martin Corp. (LMT) and Northrop Grumman Corp. (NOC) to discuss his agency's $24b modernization program, which has struggled with rising costs and technical difficulties. Lockheed Martin CEO Robert Stevens and Northrop Grumman CEO Ron Sugar met with Allen to talk about the Deepwater program's new management plan, the Coast Guard said.

The Deepwater program is a 25-year effort to replace a wide variety of aging ships and aircraft. Costs have ballooned from the original $17b estimate, and critics have said the program's shipbuilding troubles show that the Coast Guard isn't equipped to manage such a big project. But the companies say much of the project has gone well, and they attribute the higher cost estimates to changes in the Coast Guard's requirements.

Allen has made a series of changes in recent months to beef up oversight, through new independent cost reviews and reinforced technical supervision. He also is set to add a new procurement chief next month, when he unveils a larger vision for the Coast Guard's future.

Integrated Coast Guard Systems, the joint venture in charge of the Deepwater contract, said the meeting is part of an overall good relationship with the Coast Guard. Source: Marketwatch

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