Deepwater or Troubled Water? Principal–Agent Theory and Performance-Based Contracting in the Coast Guard’s Deepwater Modernization Program

In the mid-1990s, the United States Coast Guard began planning a modernization effort known as the Deepwater program to replace an aging inventory of cutters, aircraft, and small boats. This effort involved a consortium of corporations to develop a “system of systems” to meet performance-based requirements and build the new equipment. This article examines the Deepwater program through the lens of multilayered principal–agent theory and...