The U.S. Coast Guard’s Office of International Programs just closed the books on an extremely busy 2012, during which the office executed $72 million in new projects. Reflecting on these accomplishment and some of the challenges that were overcome in the process, office chief Tod Reinert discussed the benefits his small team of professionals has brought to the Service by managing its own portfolio of Foreign Military Sales (FMS) and related projects.
“The total value of projects we undertook during calendar year 2012 represents the third largest annual total that we have ever had,” Reinert said during a recent interview. “We delivered 33 assets – the third-largest total number of deliveries that we have ever seen in a single calendar year. These efforts have a significant, positive impact on the Coast Guard in that they help to ensure quality and hold down costs for the Service’s own procurements by supporting a broader, more competitive industrial base.”
The Office of International Programs is part of the Acquisition Directorate and works in close partnership with the Head of Contracting Activity and other agencies, such as the Departments of Defense and State. Its portfolio includes FMS, Excess Defense Articles (EDA) and appropriated funds procurement projects under direction and authority provided by Congress for International Security Assistance Programs (Section 1206) in annual National Defense Authorization Acts.
The Coast Guard benefits from these efforts because they help to extend the production lines for assets already in or being procured for the Coast Guard’s inventory, as well as ensuring the availability of spare parts, which are therefore less expensive than if they were out of production. Another benefit is that international programs help to sustain a robust and competitive vendor base for future Coast Guard acquisitions.
“For example, we are buying boats from SafeBoats, Metal Shark, Willard Marine, Zodiac, and Marinette Marine,” Reinert said. “There is demand internationally for products from all of those vendors. So, even when Coast Guard acquisition projects are completed – such as the first model Response Boat-Small, for example – there still is international interest, which keeps vendors productive and available for the next time the Coast Guard goes out for a competitive solicitation. Competition is good for everyone; and it drives down costs from a procurement standpoint.”
Last year, the Coast Guard handled 58 letters of offer and acceptance and amendments to letters of offer and acceptance. That total is significant because each of those defines a new project or some kind of substantive change to an existing project, leading to some type of contracting action. That total is the most by far that the International Programs Office has dealt with in any year.
The programs resulted in 33 deliveries of assets to foreign partners, including deliveries to Mexico of the final three of four CN235 maritime patrol aircraft, which are based on the HC-144A platform, between February and April. Additionally, the program office achieved a milestone in May with the delivery of its 300th asset since the office’s formation in 1997: a law enforcement boat to Dominica.
Also in May, the Coast Guard completed the ship transfer of the ex-Coast Guard Cutter Dallas, a high endurance cutter to the Philippine Navy. The Dallas transfer illustrates how complex these projects can be for the International Programs Office’s relatively small cadre of contracting, engineering, and project management personnel. The Coast Guard completed transfer paperwork for Dallas in May and now, more than 10 months later, the cutter is preparing to depart for Manila in March 2013. Dallas and several sister ships in the Secretary-class (such as ex-Chase to Nigeria last year) are in the process of being transferred to foreign recipients. The Coast Guard is replacing these cutters with the new National Security Cutter class.
“We are still doing the post-transfer maintenance and outfitting, so Dallas hasn’t departed for the Philippine Navy yet,” Reinert said. “These EDA transfers of the former WHECs are among the most challenging of our projects, involving a number of crucial steps and the continued involvement of engineering, contracting and project management staff for approximately one year.”
The Coast Guard is developing a similar transfer agreement for the ex-Jarvis to the Bangladesh Navy, which is expected to be complete late this year.
Some of the Coast Guard’s international procurement projects are accomplished through Department of Defense or State Department authority using funds that expire within one fiscal year, challenging project managers to move through the procurement process fairly quickly.
“Every year, we have a certain amount of funding that is appropriated under the authority of Section 1206 of the National Defense Authorization Act,” Reinert explained. “Those funds have to be executed within that same fiscal year. We have to put out competitive solicitations, which take time. For example, last year we received funding authority for three projects in late June and early July. The funds expired on Sept. 30. If you look at the process that the Coast Guard’s contracting officers typically follow for competitive, commercially procured contracts, it takes 102 days. We actually had less than 90 days. So, that’s a real challenge.”Despite the time constraints, the Coast Guard managed to deliver a record number of small boats, cutters, maritime patrol aircraft, and a helicopter last year. Each of these projects has supported the United States’ security assistance policies, strengthened relationships with U.S. allies in strategic locations abroad, and contributed to an industrial base that benefits the Coast Guard’s recapitalization effort.