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This week, the Coast Guard finally gave up on its outsourcing strategy for the Deepwater modernization program, opting to take over itself as lead systems integrator on the project. Lockheed Martin Corp. and Northrop Grumman Corp. who had been managing Deepwater since 2002 through a joint venture called Integrated Coast Guard Systems, have acknowledged that they are the targets of a Justice Department investigation.

In that context, it's worth remembering that as far back as April 2004, GovExec's Jason Peckenpaugh was reporting that Deepwater was "being tested by spiraling maintenance needs, mounting homeland security missions and cultural adjustments." Many of those issues, Peckenpaugh noted, "surfaced during the Deepwater overhaul of the Matagorda, a 110-foot patrol boat based in Key West, Fla." Here's what he wrote about how that went:

In February, 2003, the Matagorda limped into Bollinger, a subcontractor for ICGS. Almost immediately, metal workers received a surprise: Nearly a third of the ship's hull plating was corroded, the result of the relentless pace of patrols in the Caribbean. Many pipes were coated with rust. "If you leaned on them, they'd break right off," recalls Bobby Arnold, a Coast Guard representative at Bollinger. Because of the scale of repairs, the Matagorda redesign wasn't finished until March 2004, five months behind schedule.

Refurbishing the Matagorda was the first test of how the Coast Guard-ICGS partnership would work in the field, where some employees still puzzle over the division of labor between both parties. "When you figure it out, let me know," says a Coast Guard maintenance chief. "A lot of people are still confused by ICGS," says a mid-level Lockheed Martin official who has been working on Deepwater for ten months. "They think it's a civilian contractor, and it's not. It's a joint venture that Coast Guard people have entered into with the two companies." Not so, says the Coast Guard's [deputy chief Gregory] Giddens. "ICGS is a commercial entity, a joint venture between Northrop Grumman and Lockheed Martin. We have an oversight responsibility for what they're doing, but we're not managing their effort."