The Challenge of Contracting for Large Complex Projects: A Case Study of the Coast Guard's Deepwater Program

The federal government now spends about 40 percent of its discretionary budget to buy everything from office supplies to weapon systems. When the government buys simple products, like paper clips, they can turn to well-established acquisition strategies and practices and apply them to richly competitive markets. When government agencies buy complex products, like weapon systems, conventional acquisition approaches are often insufficient and markets are more challenging. This report examines contracting for complex products by reviewing the U.S. Coast Guard's experience with its Deepwater Program. The Deepwater Program was a major "system of systems" acquisition to upgrade and integrate the Coast Guard's sea and air assets (such as boats and airplanes). Based on their analysis of the Coast Guard experience, the authors offer lessons for the future as the government continues to face the challenge of acquiring complex products.