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Few results in Coast Guard fleet upgrade

PASCAGOULA, Miss. -- Nearly a decade into a 25-year, $24.2 billion overhaul intended to add or upgrade more than 250 vessels in its aging fleet, the Coast Guard has only two new ships to show after spending $7 billion-plus.

Now it's facing an uphill battle persuading a budget-conscious Congress to keep pouring money into a project plagued by management problems and cost overruns.

"Congress wants to work with the Coast Guard to meet their needs for its myriad missions, but will not simply supply a blank check," said GOP Rep. Frank LoBiondo of New Jersey, chairman of the House Transportation and Infrastructure subcommittee that oversees the Coast Guard.

By now the Coast Guard was supposed to have at least eight new ships -- four 418-foot national security cutters and four 154-foot cutters -- either in the water or about to be delivered. Instead it has only two of the largest ships already in use, with two more ships on the way.

LoBiondo and others in Congress, including Rep. Bennie Thompson, the top Democrat on the House Homeland Security Committee, repeatedly have questioned the progress and scope of the fleet overhaul.

Government auditors have concluded that the Coast Guard still doesn't know the answers to those questions.

The two completed ships and two more under production have cost about $2 billion. Much of the remaining $5 billion has been spent on new contracts for at least 10 more ships and improvements to more than two dozen older ships.

The modernization effort that began in earnest in 2002 was designed to replace ships from World War II, Korea and Vietnam. But within the first year, as Congress started to dole out billions for newfound homeland security concerns after the Sept. 11 attacks, Coast Guard officials realized their blueprint wasn't exactly what was needed.

Budget-cutting in the 1990s had left the service with few experts on buying new ships and other equipment. So the project was turned over to Northrop Grumman and Lockheed Martin.

The program, known as Deepwater, appeared in trouble almost from the beginning. Early government audits criticized Coast Guard officials for a lack of oversight, which invariably led to early delays and cost increases. Hurricanes, including Katrina in 2005, led to delays at the Pascagoula shipyard where many new ships are being built.

The Coast Guard took over management of the Deepwater program in 2007. By then the new estimated price had risen from $17 billion to $24.2 billion.

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