[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]

REVIEW OF THE RECAPITALIZATION OF THE
UNITED STATES COAST GUARD SURFACE, AIR,
IT, AND SHORESIDE ASSETS

=======================================================================

(118-25)

HEARING

BEFORE THE

SUBCOMMITTEE ON
COAST GUARD AND MARITIME TRANSPORTATION

OF THE

COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTEENTH CONGRESS

FIRST SESSION

__________

JULY 27, 2023

__________

Printed for the use of the
Committee on Transportation and Infrastructure

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation

__________

U.S. GOVERNMENT PUBLISHING OFFICE
53-883 PDF WASHINGTON : 2023

-----------------------------------------------------------------------------------

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

Sam Graves, Missouri, Chairman
Rick Larsen, Washington, Eric A. ``Rick'' Crawford,
Ranking Member Arkansas
Eleanor Holmes Norton, Daniel Webster, Florida
District of Columbia Thomas Massie, Kentucky
Grace F. Napolitano, California Scott Perry, Pennsylvania
Steve Cohen, Tennessee Brian Babin, Texas
John Garamendi, California Garret Graves, Louisiana
Henry C. ``Hank'' Johnson, Jr., Georgiavid Rouzer, North Carolina
Andre Carson, Indiana Mike Bost, Illinois
Dina Titus, Nevada Doug LaMalfa, California
Jared Huffman, California Bruce Westerman, Arkansas
Julia Brownley, California Brian J. Mast, Florida
Frederica S. Wilson, Florida Jenniffer Gonzalez-Colon,
Donald M. Payne, Jr., New Jersey Puerto Rico
Mark DeSaulnier, California Pete Stauber, Minnesota
Salud O. Carbajal, California Tim Burchett, Tennessee
Greg Stanton, Arizona, Dusty Johnson, South Dakota
Vice Ranking Member Jefferson Van Drew, New Jersey,
Colin Z. Allred, Texas Vice Chairman
Sharice Davids, Kansas Troy E. Nehls, Texas
Jesus G. ``Chuy'' Garcia, Illinois Lance Gooden, Texas
Chris Pappas, New Hampshire Tracey Mann, Kansas
Seth Moulton, Massachusetts Burgess Owens, Utah
Jake Auchincloss, Massachusetts Rudy Yakym III, Indiana
Marilyn Strickland, Washington Lori Chavez-DeRemer, Oregon
Troy A. Carter, Louisiana Chuck Edwards, North Carolina
Patrick Ryan, New York Thomas H. Kean, Jr., New Jersey
Mary Sattler Peltola, Alaska Anthony D'Esposito, New York
Robert Menendez, New Jersey Eric Burlison, Missouri
Val T. Hoyle, Oregon John James, Michigan
Emilia Strong Sykes, Ohio Derrick Van Orden, Wisconsin
Hillary J. Scholten, Michigan Brandon Williams, New York
Valerie P. Foushee, North Carolina Marcus J. Molinaro, New York
Mike Collins, Georgia
Mike Ezell, Mississippi
John S. Duarte, California
Aaron Bean, Florida
------ 7

Subcommittee on Coast Guard and Maritime Transportation

Daniel Webster, Florida, Chairman
Brian Babin, Texas Salud O. Carbajal, California,
Brian J. Mast, Florida Ranking Member
Jenniffer Gonzalez-Colon, John Garamendi, California
Puerto Rico Chris Pappas, New Hampshire
Jefferson Van Drew, New Jersey Jake Auchincloss, Massachusetts
Mike Ezell, Mississippi, Vice Mary Sattler Peltola, Alaska
Chairman Hillary J. Scholten, Michigan,
Aaron Bean, Florida Vice Ranking Member
Sam Graves, Missouri (Ex Officio) Rick Larsen, Washington (Ex
Officio)

CONTENTS

Page

Summary of Subject Matter........................................ v

STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Daniel Webster, a Representative in Congress from the State
of Florida, and Chairman, Subcommittee on Coast Guard and
Maritime Transportation, opening statement..................... 1
Prepared statement........................................... 3
Hon. Salud O. Carbajal, a Representative in Congress from the
State of California, and Ranking Member, Subcommittee on Coast
Guard and Maritime Transportation, opening statement........... 5
Prepared statement........................................... 6
Prepared Statement of Hon. Rick Larsen, a Representative in
Congress from the State of Washington, and Ranking Member,
Committee on Transportation and Infrastructure................. 37

WITNESSES

Vice Admiral Paul F. Thomas, Deputy Commandant for Mission
Support, U.S. Coast Guard, oral statement...................... 7
Prepared statement........................................... 9
Marie A. Mak, Director, Contracting and National Security
Acquisitions, U.S. Government Accountability Office, oral
statement...................................................... 12
Prepared statement........................................... 13

APPENDIX

Questions to Vice Admiral Paul F. Thomas, Deputy Commandant for
Mission Support, U.S. Coast Guard, from:
Hon. Mike Ezell.............................................. 39
Hon. Hillary J. Scholten..................................... 39
Hon. Rick Larsen on behalf of Hon. Patrick Ryan.............. 40
Questions to Marie A. Mak, Director, Contracting and National
Security Acquisitions, U.S. Government Accountability Office,
from:
Hon. Mike Ezell.............................................. 41
Hon. Hillary J. Scholten..................................... 42
Hon. Rick Larsen on behalf of Hon. Patrick Ryan.............. 42

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

July 21, 2023

SUMMARY OF SUBJECT MATTER

TO: LMembers, Subcommittee on Coast Guard and Maritime
Transportation
FROM: LStaff, Subcommittee on Coast Guard and Maritime
Transportation
RE: LSubcommittee Hearing on ``Review of the
Recapitalization of the United States Coast Guard Surface, Air,
IT, and Shoreside Assets''
_______________________________________________________________________

I. PURPOSE

The Subcommittee on Coast Guard and Maritime Transportation
of the Committee on Transportation and Infrastructure will meet
on Thursday, July 27, 2023, at 2:00 p.m. ET in 2253 Rayburn
House Office Building to receive testimony on the ``Review of
the Recapitalization of the United States Coast Guard Surface,
Air, IT, and Shoreside Assets.'' Members will receive testimony
on the United States Coast Guard's (Coast Guard or Service)
recapitalization efforts, specifically focusing on the
Service's efforts to modernize its surface assets, including
the Offshore Patrol Cutters (OPC) and Polar Security Cutters
(PSC), air assets, shoreside infrastructure, and Information
Technology (IT).

II. BACKGROUND

THE UNITED STATES COAST GUARD RECAPITALIZATION PROGRAM

Recognizing that many of its assets were nearing the end of
their service lives or were technologically insufficient, in
2007 the Coast Guard approved a program of record to modernize
its offshore assets and the communication systems that linked
those assets.\1\ The program of record has subsequently been
updated to reflect budget realities and other factors.\2\
However, the plan at the time failed to take into account IT
systems, shoreside assets or Polar icebreakers. The Coast Guard
is more than a decade into this recapitalization program and
significant problems exist. In 2017, the Coast Guard released a
new program of record that included Polar icebreakers and in-
service vessel sustainment but failed to incorporate long term
plans to recapitalize IT systems or shoreside assets.\3\
---------------------------------------------------------------------------
\1\ United States Gov't Accountability Off., GAO-17-654T, Coast
Guard Recapitalization: Matching Needs and Continued Resources To
Strain Acquisition Efforts (2017), available at https://www.gao.gov/
assets/690/685201.pdf.
\2\ Id.
\3\ Id.
---------------------------------------------------------------------------
The Coast Guard has successfully undertaken some of the
procurement steps outlined in its 2007 recapitalization vision,
such as the procurement and deployment of the Fast Response
Cutter (FRC) and the National Security Cutter (NSC).
Concerningly, however, other programs such as the OPC lag
behind, while the PSC, rotary wing aircraft, shoreside
infrastructure, and Information Technology (IT) still remain
largely unaddressed due to underfunding, mismanagement, poor
processes, and a lack of long-term planning on the part of the
Coast Guard.\4\ These shortcomings have created serious
capability gaps in the ability of the Service to field the
assets required to fulfill its mission demands.\5\
---------------------------------------------------------------------------
\4\ Id.
\5\ Id.
---------------------------------------------------------------------------
Most notably, in 2014, the Government Accountability Office
(GAO) estimated that a gap exists between the Coast Guard's
recapitalization needs and the President's budget request--a
trend that has continued in subsequent years.\6\ For example,
in 2018, an $800 million gap existed between the Coast Guard's
needs and the President's budget request. In an effort to
address the funding constraints it has faced annually, the
Coast Guard has been reactive, reducing its capability by
delaying new acquisitions but the Service does not have a plan
to realistically set forth affordable priorities.\7\ These
shortcomings have seriously jeopardized Coast Guard
capabilities across several vital areas, including shoreside
infrastructure and surface assets.
---------------------------------------------------------------------------
\6\ Id. at 12.
\7\ Id. at 13.
---------------------------------------------------------------------------

III. COAST GUARD SURFACE ASSET ACQUISITION

OFFSHORE PATROL CUTTER (OPC)

The Coast Guard has stated that the acquisition of the OPC
is its highest investment priority as it will be the work horse
of the Coast Guard's offshore presence.\8\ The Service intends
to replace its 29 medium-endurance Cutters, all of which have
far surpassed their planned service lives and are becoming
increasingly expensive to maintain and operate, with 25
OPCs.\9\
---------------------------------------------------------------------------
\8\ United States Coast Guard, Acquisition Directorate, Offshore
Patrol Cutter, available at https://www.dcms.uscg.mil/Our-Organization/
Assistant-Commandant-for-Acquisitions-CG-9/Programs/Surface-Programs/
Offshore-Patrol-Cutter/ [hereinafter Coast Guard Acquisition
Directorate]
\9\ Cong. Rsch. Serv., R42567, Coast Guard Cutter Procurement:
Background and Issues for Congress 1 (June 21, 2023), available at
https://crsreports.congress.gov/product/pdf/R/R42567/162 [hereinafter
Coast Guard Cutter Procurement].
---------------------------------------------------------------------------
The first four OPCs are being built by Eastern Shipbuilding
Group (ESG) of Panama City, Florida.\10\ Unable to meet the
terms of the contract signed in 2018, ESG sought a cash
infusion from the Coast Guard in order to maintain operations
at their yard.\11\ The Department of Homeland Security
subsequently authorized up to $659 million in relief for the
yard, including up to $65 million for costs not related OPC
construction, in order to shore up the yard's financial
position.\12\
---------------------------------------------------------------------------
\10\ Id. at 10.
\11\ Id. at 9-10.
\12\ United States Coast Guard, Offshore Patrol Cutters
Acquisition: Extraordinary Relief (FY 2022, Fourth Quarter) Rep. to
Cong. (Mar. 8, 2023) (on file with Comm.).
---------------------------------------------------------------------------
On June 30, 2022, the Coast Guard announced it had awarded
the phase-II fixed-price incentive contract to Austal USA of
Mobile, Alabama, to produce up to 11 OPCs.\13\ The Service's
proposed fiscal year (FY) 2024 budget requests $579.0 million
in procurement funding for the construction of the sixth OPC,
the procurement of long lead-time materials (LLTM) for the
seventh OPC, and other program costs.\14\
---------------------------------------------------------------------------
\13\ Id. at 13.
\14\ Id. at 1.
---------------------------------------------------------------------------
Although the OPC is labeled as a key priority for the Coast
Guard, serious program mismanagement has led to long delays,
cost overruns, and the emergence of a gap in the Coast Guard's
medium endurance capabilities. A June 2023 GAO report found
that the OPC's total acquisition cost estimate increased from
$12.5 billion to $17.6 billion between 2012 and 2022.\15\ The
program attributes the 40 percent increase to many factors,
including restructuring the stage one contract [for OPCs one
through four] and recompeting the stage two requirement [for
OPCs five through 15].\16\ In addition, the program incurred a
one and a half year delay in the delivery of the first four
OPCs issues related to manufacturing the Cutter's propulsion
system.\17\ GAO also found indicators that the shipbuilder's
significant level of complex, uncompleted work may lead to
further delays.\18\
---------------------------------------------------------------------------
\15\ United States Gov't Accountability Off., GAO-23-105805, Coast
Guard Acquisitions: Offshore Patrol Cutter Program Needs To Mature
Technology and Design 28 (June 2023), available at https://www.gao.gov/
assets/gao-23-105805.pdf.
\16\ Coast Guard Cutter Procurement, supra note 9, at 28.
\17\ Id. at 28.
\18\ Id. at 37.
---------------------------------------------------------------------------
The GAO attributed these delays and cost overruns to
fundamental flaws in the Coast Guard's design and construction
process.\19\ The GAO found that the Coast Guard used a high-
risk approach to the acquisition of the OPC that attempts to
concurrently overlap the acquisition phases of technology
development, design, and construction.\20\ While some overlap
is common in the industry, the Coast Guard has exceeded
industry standards.\21\ Specifically, the Coast Guard does not
require completion of basic and functional design, and maturity
of all critical technologies, nor does it require completion of
the design of distributive systems--systems that affect
multiple zones of the ship--prior to construction of the lead
ship.\22\ These approaches could, and likely will, result in
the need for significant design rework late in construction,
further increasing costs and delays.\23\ This will subsequently
extend the Coast Guard's dependence on its current fleet of
medium-endurance cutters, continuing to strain the Coast
Guard's budget with increased repair and maintenance costs.
---------------------------------------------------------------------------
\19\ Id. at 16.
\20\ Id. at 15.
\21\ Id. at 15.
\22\ Id. at 24.
\23\ Id. at 16.
---------------------------------------------------------------------------

POLAR SECURITY CUTTER (PSC)

The Coast Guard anticipates the need for enhanced Arctic
capabilities in the coming years to support United States
economic, security, and scientific interests.\24\ The Polar
Star is currently the Coast Guard's only operational heavy ice
breaker. Commissioned in 1976, the Polar Star has far surpassed
its regular service life and has been dependent on constant
service life extension programs to allow it to function--
heavily straining Coast Guard resources.\25\
---------------------------------------------------------------------------
\24\ United States Coast Guard, Acquisitions Directorate, Polar
Security Cutter, available at https://www.dcms.uscg.mil/Our-
Organization/Assistant-Commandant-for-Acquisitions-CG-9/Programs/
Surface-Programs/Polar-Icebreaker/ [hereinafter Polar Security Cutter
Acquisitions].
\25\ Id.
---------------------------------------------------------------------------
In 2019, the Coast Guard and United States Navy, operating
through an integrated program office, awarded VT Halter Marine
Inc. of Pascagoula, Mississippi, a fixed price incentive
contract for the detail, design and construction of the lead
PSC. The yard was subsequently purchased by Bollinger
Mississippi. Construction on the first PSC was planned to begin
in 2022, with contract delivery planned for the mid-2020s.\26\
The contract includes financial incentives for earlier
delivery. However, construction of the PSC has yet to begin due
to design delays that have plagued the program, and the Coast
Guard is unable to commit to a timeline for when the first PSC
will be mission ready.\27\
---------------------------------------------------------------------------
\26\ Id.
\27\ Review of Fiscal Year 2024 Budget Request for the Coast Guard:
Hearing Before the H. Subcomm. on Coast Guard and Maritime Transp.,
118th Cong. (2023) (response from Adm. Linda Fagan, Commandant of the
United States Coast Guard).
---------------------------------------------------------------------------

WATERWAYS COMMERCE CUTTER (WCC)

The Coast Guard maintains a fleet of inland water craft
responsible for maintaining more than 28,200 marine aids to
navigation throughout 12,000 miles of inland waterways, on
which 630 million tons of cargo move annually.\28\ The current
fleet of inland tenders has been in operation for an average of
more than 57 years, far exceeding their design service
life.\29\ The Coast Guard established the WCC Program after
Congress provided funds to replace the capability provided by
the inland tender fleet with 16 River Buoy Tenders, 11 Inland
Construction Tenders, and three Inland Buoy Tenders.\30\ To
increase efficiency, these vessels will be self-propelled
monohulls instead of the current tug-and-barge
configuration.\31\
---------------------------------------------------------------------------
\28\ United States Coast Guard, Acquisitions Directorate, Waterways
Commerce Cutter, available at https://www.dcms.uscg.mil/Our-
Organization/Assistant-Commandant-for-Acquisitions-CG-9/Programs/
Surface-Programs/WCC/.
\29\ Id.
\30\ Id.
\31\ Cong. Rsch Serv., IF11672, Coast Guard Waterways Commerce
Cutter (WCC) Program: Background and Issues for Congress (2023),
available at https://crsreports.congress.gov/product/pdf/IF/IF11672.
---------------------------------------------------------------------------
The Coast Guard has faced significant issues with the
acquisition process as it relates to small business
requirements. The initial contract was awarded to Birdon
America, Inc., located in Denver, Colorado, in October of 2022.
However, after the contract was awarded, challenges to the
contract award were made based on the small business set aside
requirements (FAR 52.219 14).\32\ Despite initially determining
that Birdon met its small business requirements during its pre-
decision evaluation, on May 26, 2023, the Small Business
Administration (SBA) informed the Coast Guard that Birdon,
under its WCC proposal, does not meet the status of a small
business. The Coast Guard's legal analysis concluded that a new
size determination does not prevent the Service from continuing
contract performance; however, the Coast Guard continues to
evaluate all potential options while the SBA proceedings
progress.\33\ As a result, the Service may be unable to count
the WCC construction against its small business set-aside
requirement.
---------------------------------------------------------------------------
\32\ United States Coast Guard Briefing to Congress, Waterways
Commerce Cutter (WCC) Contract Award Brief (June 21, 2023) (on file
with Comm.) [hereinafter Coast Guard Cutter Briefing].
\33\ Email from Earl Potter, Commander, United States Coast Guard,
to Subcomm. on Coast Guard and Maritime Transp. Staff (May 30, 2023,
17:07 EST) (on file with Comm.).
---------------------------------------------------------------------------

NATIONAL SECURITY CUTTER (NSC)

The Legend-class National Security Cutter (NSC) is the most
capable cutter in the Coast Guard's fleet, capable of executing
challenging operations, including supporting maritime homeland
security and defense missions. The Coast Guard's Program of
Record (POR) originally called for eight NSCs to replace the
Service's fleet of 12 high endurance cutters.\34\ The NSCs were
originally intended to operate in excess of 185 days per year
to maximize operational capability, but based on crew and
maintenance concerns, the Coast Guard now intends to operate
the vessels for a maximum of 185 days per year.\35\ Congress
has funded 11 vessels. The tenth vessel is scheduled for
delivery later this year.\36\ As the NSC program winds down,
that opportunity to acquire additional NSCs has likely been
missed.
---------------------------------------------------------------------------
\34\ Coast Guard Acquisition Directorate, supra note 8.
\35\ United States Coast Guard, Report to Congress: Analyzing Cost
and Performance for National Security Cutter Operational Employment
(2023) (on file with Comm.).
\36\ Polar Security Cutter Acquisitions, supra note 24.
---------------------------------------------------------------------------

IV. COAST GUARD AIR ASSET ACQUISITION

MH-65 REPLACEMENT PROGRAM

The MH-65 currently makes up the majority of the Coast
Guard's rotary-wing fleet, and the Service is the largest
single operation of the platform in the world. However, in 2018
Airbus Helicopters announced it was ending production of the
civilian variant of the MH-65, impacting the supply chain and
resulting in shortages of critical parts for the fleet.\37\ The
Coast Guard is part of the Department of Defense's (DOD) Future
Vertical Lift (FVL) program, which is expected to reach initial
operating capability by the late 2030's and full operating
capability by the late 2040's.\38\ The Service Life Extension
Program (SLEP) for the MH-65 will not be able to cover this
gap, leaving the Coast Guard with a critical air capability
shortage.\39\
---------------------------------------------------------------------------
\37\ United States Coast Guard Briefing to Congress, Coast Guard
Rotary-Wing Fleet Transition (January 24, 2023) (on file with Comm.)
[hereinafter Coast Guard Rotary-Wing Briefing].
\38\ Id.
\39\ Id.
---------------------------------------------------------------------------
The Coast Guard intends to replace its existing fleet of
MH-65s with MH-60s, a platform which the Service currently
operates. Furthermore, the Coast Guard plans to replace them on
a basis of flight-hour parity.\40\ Due to the MH-60's higher
endurance in comparison to the MH-65, the Coast Guard believes
it can downsize its fleet without losing mission
capability.\41\ There is considerable risk, however, that
downsizing the fleet would dangerously limit the Coast Guard's
ability to respond to simultaneous emergencies or mass
causality events. At the same time, the introduction of a
folding-tail design, used on the Navy's variant, which is
needed accommodate the larger aircraft on Coast Guard surface
vessels, has the potential to introduce increased maintenance
and operational challenges.\42\
---------------------------------------------------------------------------
\40\ Id.
\41\ Id.
\42\ Id.
---------------------------------------------------------------------------

HC-130J ACQUISITION

The Coast Guard uses fixed wing assets to provide heavy air
transport and long-range maritime patrol capability.\43\ Each
aircraft is capable of serving as an on-scene command and
control platform or as a surveillance platform with the means
to detect, classify and identify objects, and share that
information with operational forces across multiple
domains.\44\
---------------------------------------------------------------------------
\43\ United States Coast Guard, Acquisitions Directorate, HC-130J
Long Range Surveillance Aircraft, available at https://
www.dcms.uscg.mil/Our-Organization/Assistant-Commandant-for-
Acquisitions-CG-9/Programs/Air-Programs/LRS-HC-130J/.
\44\ Id.
---------------------------------------------------------------------------
The Coast Guard is acquiring a fleet of 22 new, fully
missionized HC-130J aircraft to replace its legacy HC-
130Hs.\45\ Advances in engine and propeller technology
incorporated in the HC-130J provides a 20 percent increase in
speed and altitude, and a 40 percent increase in range compared
to the outgoing HC-130H platform.\46\ This will increase the
Coast Guard's ability to respond to emergencies, conduct long
range search and rescue, and counter illicit operations. H.R.
2741, The Coast Guard Authorization Act of 2023, which passed
out of the Committee on April 26, 2023, authorizes $138,500,000
for the acquisition or procurement of one missionized HC-130J
aircraft.\47\
---------------------------------------------------------------------------
\45\ United States Coast Guard Briefing to Congress, Quarterly
Acquisition Briefing (Feb. 2023) (on file with Comm.).
\46\ Coast Guard Cutter Briefing, supra note 32.
\47\ Coast Guard Authorization Act of 2023, H.R. 2741, 118th Cong.
(2023).
---------------------------------------------------------------------------

V. INFORMATION TECHNOLOGY (IT)

The Coast Guard requires enhancements to its shoreside and
cyber infrastructure to facilitate new assets and more complex
mission sets. Currently, limitations in existing physical and
data infrastructure have hindered newer platforms from
utilizing the full scope of their capabilities. H.R. 2741, The
Coast Guard Authorization Bill of 2023, authorizes $36,300,000
to modernize the Coast Guard's IT systems.\48\ The bill also
provides additional funds for the Coast Guard to update the
Merchant Marine Credentialing System, which will improve
recruitment and retention efforts for Merchant Mariners.\49\
---------------------------------------------------------------------------
\48\ Id.
\49\ Id.
---------------------------------------------------------------------------
Investment in IT capabilities will also allow the Service
to better support its members. On April 9, 2018, DOD announced
its intent to partner with the Coast Guard to deploy its
electronic health record (EHR) capability across the Service's
clinics and sick bays.\50\ On June 7, 2018, the Coast Guard and
the Defense Health Agency (DHA), the agency responsible for the
DOD's health care system, signed an Inter-Agency Agreement that
formally established the partnership to deploy MHS GENESIS.\51\
The Electronic Health Records Acquisition (EHRA) will modernize
the Coast Guard's health care data management by acquiring an
EHR solution in place of its primarily paper-based health
record system.\52\ Having an EHR capability will make patient
record retrieval easier and faster, reduce administrative
errors, and allow electronic information exchange with the DOD,
the Department of Veterans' Affairs, and commercial care
providers.\53\ The Coast Guard's EHR program, once fully
implemented, will service all Coast Guard clinics and sick
bays--ashore and afloat.
---------------------------------------------------------------------------
\50\ United States Coast Guard, Acquisitions Directorate,
Electronic Health Records, available at https://www.dcms.uscg.mil/Our-
Organization/Assistant-Commandant-for-Acquisitions-CG-9/Programs/C4ISR-
Programs/Electronic-Health-Records-Acquisition/ [hereinafter Electronic
Health Records Directive].
\51\ Id.
\52\ Id.
\53\ Id.
---------------------------------------------------------------------------
In November of 2021, the Coast Guard deployed the MHS
GENESIS electronic health records (EHR) system to 26 clinics
and 48 ashore sickbays within the Coast Guard Atlantic Area,
completing the first segment of EHR system implementation for
the service. With Segment A now complete, a total of 43 ashore
clinics and 67 ashore sick bays are using MHS GENESIS for EHR
management. The Pacific wave was completed earlier this fall.
The program will now move to the next segment of the deployment
strategy, known as Segment B. Segment B includes modernization
of the Coast Guard's entire medical and dental radiology
system. The Coast Guard is targeting completion for Segment B
for early summer 2024. The final segment, Segment C, will
extend an EHR capability to all afloat sickbays; that schedule
is still being determined.\54\
---------------------------------------------------------------------------
\54\ United States Coast Guard, Coast Guard launches electronic
health records system in Atlantic Area, available at https://
www.dcms.uscg.mil/Our-Organization/Assistant-Commandant-for-
Acquisitions-CG-9/Newsroom/Latest-Acquisition-News/Article/2838468/
coast-guard-launches-electronic-health-records-system-in-atlantic-
area/.
---------------------------------------------------------------------------

VI. SHORESIDE INFRASTRUCTURE

The Coast Guard owns or leases more than 20,000 shore
facilities, such as piers, docks, boat stations, air stations,
and housing units at more than 2,700 locations.\55\ Coast Guard
shoreside infrastructure is aging rapidly, with 40 percent of
its buildings being 50 years or older.\56\ These buildings and
infrastructure are also exposed to harsh environments, with
salt air, high winds, and water contributing to their
corrosion.\57\
---------------------------------------------------------------------------
\55\ United States Gov't Accountability Off., GAO-19-82 Coast Guard
Shore Infrastructure, available at https://www.gao.gov/assets/700/
697012.pdf.
\56\ Mike Gooding, ``USCG Commandant says infrastructure
`antiquated' and `crumbling','' 13NewsNow, (Feb. 20, 2020), available
at https://www.13newsnow.com/article/news/national/military-news/uscg-
commandant-says-infrastructure-antiquated-and-crumbling/291-80c90197-
1e82-4ecd-92f7-c6a9b07f954a.
\57\ Id.
---------------------------------------------------------------------------
The Coast Guard's Office of Civil Engineering sets agency-
wide civil engineering policy, which includes facility
planning, design, construction, maintenance, and disposal of
real property.\58\ The Service's Shore Infrastructure Logistics
Center (SILC), established in 2009, is tasked with the
management and coordination of infrastructure condition
assessments via six regional Civil Engineering Units (CEUs),
along with other divisions and offices, in addition to
implementing shore infrastructure policies.\59\ The condition
of individual shore infrastructure assets is determined by CEU
personnel and civil engineers in the field.\60\ According to
the Service, every facility is to be inspected by a CEU
representative every three years.\61\
---------------------------------------------------------------------------
\58\ Electronic Health Records Directive, supra note 50.
\59\ Id.
\60\ Id.
\61\ Id.
---------------------------------------------------------------------------
A 2019 GAO report stated that the Coast Guard has more than
a $2.6 billion backlog in deferred or overdue maintenance,
repair, and recapitalization work for its shoreside
infrastructure.\62\ Importantly, the Service estimates that
when factoring in recapitalization projects for which it has
not made cost estimates on, the recapitalization backlog likely
exceeds $3 billion.\63\ The 2023 Coast Guard Authorization Act
authorizes $400,000,000 for maintenance, construction, and
repairs for Coast Guard shoreside infrastructure.\64\
---------------------------------------------------------------------------
\62\ Id.
\63\ Id.
\64\ Coast Guard Rotary-Wing Briefing, supra note 37.
---------------------------------------------------------------------------

VII. WITNESSES

LVice Admiral Paul Thomas, Deputy Commandant for
Mission Support, United States Coast Guard
LMarie Mak, Director, Contracting and National
Security, United States Government Accountability Office

REVIEW OF THE RECAPITALIZATION OF THE UNITED STATES COAST GUARD
SURFACE, AIR, IT, AND SHORESIDE ASSETS

----------

Thursday, July 27, 2023

House of Representatives,
Subcommittee on Coast Guard and Maritime
Transportation,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 2:32 p.m. in
room 2253 Rayburn House Office Building, Hon. Daniel Webster
(Chairman of the subcommittee) presiding.
Mr. Webster of Florida. The Subcommittee on Coast Guard and
Maritime Transportation will come to order.
I ask for unanimous consent that the chairman be authorized
to declare a recess at any time during the hearing, and without
objection, show that ordered.
I also ask unanimous consent that Members who are not
members of the subcommittee be permitted to sit in the
subcommittee today and ask questions during the hearing.
Without objection, show that ordered.
As a reminder, if you have a document to submit, submit it
to the House also at DocumentsTI@mail.house.gov.
I now recognize myself for the purpose of an opening
statement for 5 minutes.

OPENING STATEMENT OF HON. DANIEL WEBSTER OF FLORIDA, CHAIRMAN,
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

Mr. Webster of Florida. Before we begin the discussion of
the hearing topic at hand, I want to commend the Coast Guard
for undertaking Operation Fouled Anchor, an investigation of
sexual assault and harassment incidents at the Coast Guard
Academy from the late 1980s to early 2000s. As a grandfather of
13 granddaughters, I was horrified by the report, and the
Service must use the data gleaned from this review to better
protect future cadets.
However, like many of my colleagues, I urge the Coast Guard
to share important Service oversight actions with Congress as a
routine matter of day-to-day operations, rather than being
forced to do it by some sort of press pressure.
Turning now to the topic at hand, today our subcommittee
will receive testimony on the Coast Guard's efforts to
recapitalize its surface, air, IT, and shoreside assets. I
would like to welcome our witnesses, Vice Admiral Paul Thomas,
Deputy Commandant of the Coast Guard for mission support, and
Marie Mak, Director of Contracting and National Security
Acquisitions at the United States Government Accountability
Office.
Ms. Mak, I understand, is retiring at the end of next
month, and this will probably be the last of the many
congressional hearings you have attended. This will be it. So,
I hope we will make it memorable, but not too memorable.
[Laughter.]
Mr. Webster of Florida. On behalf of the subcommittee, I
would like to thank you for your contributions over the last
decade to the subcommittee's oversight of Coast Guard
acquisition programs. Thank you so much. I appreciate that. In
the spirit of today's hearing, we all wish you fair winds and
following seas as you embark on your next chapter.
The Coast Guard is in the middle of a multidecade
recapitalization campaign to replace aging surface and air
assets. There have been many successes in this effort. The
Coast Guard is nearing completion of the 11-ship Bertholf class
National Security Cutters and the, at present, 64-ship Webber
class Fast Response Cutters.
The Coast Guard has acquired 15 C-130J long-range aircraft;
18 C0144s, and 14 C-27 mid-range aircraft, and reengined the
MH-65 rotary-wing aircraft. Are those still available? The
Service has also made significant investments in the shoreside
facilities necessary to homeport these new assets, but many
additional home port and hangar upgrades are needed.
Unfortunately, no administration of either party has
requested anything even approaching the resources necessary to
carry out this recapitalization in an efficient and cost-
effective manner. Congress has provided more resources than
those requested by multiple administrations, but Congress was
only able to go so far beyond the requested levels. These
paltry budgets dramatically stretch out timelines for these
programs.
The Coast Guard says that the timeline has moved to the
right. It has. It keeps moving. Program delays always raise
program costs. They delay the implementation of the next-in-
line programs. These delays also reduce the Coast Guard's
mission capability as legacy assets degrade. In addition, older
assets require greater maintenance and repair, and costs
increase.
Delays prevent the Service from maintaining its shoreside
assets, and they prevent the Coast Guard from meaningful
participation in the ongoing digital revolution. Throughout
this long saga--made longer by severely constrained budgets--
world and domestic events, new and evolving congressional and
executive branch policy priorities, and rapidly changing
maritime technology have all contributed to expanding the scope
and requirements of Coast Guard mission responsibilities.
In short, we expect the Coast Guard to do more without
giving them the resources to carry out their existing programs.
This committee has consistently produced bills that
authorized the amounts we believe are the minimum necessary to
keep the Service from falling behind. However, appropriations
and administration budget requests then leave the Coast Guard
at the dock, allowing mission capability creep downward while
increasing maintenance and construction backlogs.
Nonetheless, this subcommittee will continue to authorize
the procurement, construction, and improvement account at
levels that would at least keep the Coast Guard from losing
more ground. This is not to say that the Coast Guard doesn't
have acquisition problems of its own making. In the future, the
committee hopes that the Coast Guard will use proven parent
craft designs, and design first, then build.
The subcommittee looks forward to hearing today how the
Coast Guard will upgrade and replace aging shoreside
infrastructure and antiquated IT systems; build its largest,
most expensive single class of ships; and replace the rapidly
aging H-65s over the next 15 years.
So, this is a lot longer than I thought it would be, so, I
am going to stop there. That is plenty of stuff said already,
and we just appreciate this opportunity we have.
But I just wanted to say the subcommittee is deeply
concerned about the limited ability of the Service to access
data about the United States documented vessels. As the Federal
entity tasked with documenting vessels, that information should
be at your fingertips, and it isn't.
[Mr. Webster of Florida's prepared statement follows:]

Prepared Statement of Hon. Daniel Webster of Florida, Chairman,
Subcommittee on Coast Guard and Maritime Transportation
Before we begin discussion of the hearing topic at hand, I want to
commend the Coast Guard for undertaking Operation Fouled Anchor, an
investigation of sexual assault and harassment incidents at the Coast
Guard Academy from the late 1980's through the early 2000's. As a
grandfather of 13 granddaughters, I was horrified by the report, and
the Service must use the data gleaned from this review to better
protect future cadets.
However, like many of my colleagues, I urge the Coast Guard to
share important Service oversight actions with Congress as a routine
matter of day-to-day operations, rather than being forced to do so by
impending press coverage.
Turning now to our hearing topic, today our subcommittee will
receive testimony on the Coast Guard's efforts to recapitalize its
surface, air, IT, and shoreside assets. I'd like to welcome our
witnesses--Vice Admiral Paul Thomas, Deputy Commandant of the Coast
Guard for Mission Support, and Marie Mak, Director of Contracting and
National Security at the United States Government Accountability
Office.
Ms. Mak, I understand that you will be retiring at the end of next
month, and this will be the last of many Congressional hearings at
which you have testified for GAO. On behalf of the Subcommittee, I
would like to thank you for your contributions over the last decade to
the Subcommittee's ongoing oversight of Coast Guard acquisition
programs. In the spirit of today's hearing, we all wish you fair winds
and following seas as you embark on your next chapter.
The Coast Guard is in the middle of a multi-decade recapitalization
campaign to replace its aging surface and air assets. There have been
many successes in this effort. The Coast Guard is nearing completion of
the 11-ship BERTHOLF class National Security Cutters, and the, at
present, 64-ship WEBBER class Fast Response Cutters.
The Coast Guard has acquired 15 C-130J long range aircraft, 18 C-
144, and 14 C-27 medium range aircraft, and reengined the MH-65 rotary
wing aircraft. The Service has also made significant investments in the
shoreside facilities necessary to homeport these new assets, but many
additional homeport and hangar upgrades are needed.
Unfortunately, no administration of either party has requested
anything even approaching the resources necessary to carry out this
recapitalization in an efficient and cost-effective manner. Congress
has provided more resources than those requested by multiple
administrations, but Congress was only able to go so far beyond the
requested levels. These paltry budgets dramatically stretch out
timelines for these programs. The Coast Guard says, ``The timeline has
moved to the right,'' almost as often as it says ``Semper paratus.''
Program delays always raise program costs. They delay
implementation of the next-in-line programs. These delays also reduce
the Coast Guard's mission capability as legacy assets degrade. In
addition, older assets require greater maintenance and repair, and
costs increase.
Delays prevent the Service from maintaining its shoreside assets,
and they prevent the Coast Guard from meaningfully participating in the
ongoing digital revolution. Throughout this long saga, made longer by
severely constrained budgets, world and domestic events, new and
evolving Congressional and Executive Branch policy priorities, and
rapidly changing maritime technology have all contributed to expanding
the scope and requirements of Coast Guard mission responsibilities.
In short, we expect the Coast Guard to do more without giving them
the resources to carry out their existing programs. This committee has
consistently produced bills that authorized the amounts we believe are
the minimum necessary to keep the Service from falling behind. However,
appropriations and administration budget requests then leave the Coast
Guard at the dock, allowing mission capability creep downward while
increasing maintenance and construction backlogs.
Nonetheless, this subcommittee will continue to authorize the
Procurement, Construction and Improvement Account at levels that would
at least keep the Coast Guard from losing more ground. This is not to
say that the Coast Guard doesn't have acquisitions problems of its own
making. In the future, the Committee hopes the Coast Guard will use
proven parent craft designs, and design first, then build.
The Subcommittee looks forward to hearing today how the Coast Guard
will upgrade and replace its aging shoreside infrastructure and
antiquated IT systems, build its largest, most expensive single class
of ships, and replace its rapidly aging H-65s over the next 15 years.
While the Coast Guard must be commended for squeezing the most out
of its current assets, we owe the men and women of the Coast Guard--
from whom we expect so much and always get even more--the adequate
tools and resources to do their jobs effectively and safely. Efforts to
secure new Polar Security Cutters and Offshore Patrol Cutters are still
in relatively early stages. And work is also underway to replace the
Service's inland tender fleet.
The Committee looks forward to learning how these programs are
going to be completed.
We are particularly interested in whether the Department of
Homeland Security and the Office of Management and Budget support
building two Offshore Patrol Cutters each year. Without a two-a-year
strategy, which the Coast Guard has long advocated, current Medium
Endurance Cutters will age out before replacements are available.
Additionally, unless Polar Security Cutters come online by 2028,
the United States polar region presence will be maintained by the then
nearly 30-year-old HEALEY, a research icebreaker. Russia and China, not
even an Arctic Nation, will both have a significant polar operational
presence by then. We should not expect academic fishery biologists and
physical oceanographers, however talented they may be, to be the first
line of United States sovereignty in the Arctic.
A new fleet of Polar Security Cutters is critical to advancing our
Nation's sovereignty in the polar regions. The program is half a decade
behind its unrealistic original schedule. I am optimistic that new
leadership at the shipyard is moving the program forward. I look
forward to hearing from our witnesses on how the Coast Guard will
correct missteps in the procurement and contracting process.
Coast Guard aviation also needs to replace its no-longer-
manufactured MH-65s. While the MH-60 is more capable than the MH-65, I
oppose the plan to reduce the total number of aircraft. I am also
concerned about the proposed MH-60 modifications needed for sea
operations.
As the Coast Guard modernizes its aviation assets, hangars and
other ground assets also need to keep pace. The Committee will continue
to monitor progress as the Coast Guard builds a new hangar at Barbers
Point.
Finally, these assets, new and old, require IT and shoreside
support. The Coast Guard's IT infrastructure, including its merchant
mariner credentialling system, is antiquated and presents serious
limitations.
The Coast Guard Authorization Act of 2023, reported out by this
Committee, authorizes $36.3 million to modernize the Coast Guard's IT
systems, including $11 million for a new Merchant Mariner Credentialing
System. The Subcommittee is also deeply concerned about the limited
ability of the Service to access data about United States documented
vessels. As the federal entity tasked with documenting vessels, that
information should be at your fingertips.
To our witnesses--thank you for participating today. I look forward
to a candid discussion on how Congress can support the Coast Guard's
efforts to modernize its assets, systems, and facilities.

Mr. Webster of Florida. So, anyway, now I would like to
recognize Ranking Member Carbajal for an opening statement for
5 minutes.
You are recognized.

OPENING STATEMENT OF HON. SALUD O. CARBAJAL OF CALIFORNIA,
RANKING MEMBER, SUBCOMMITTEE ON COAST GUARD AND MARITIME
TRANSPORTATION

Mr. Carbajal. Thank you, Chairman Webster, and I will take
up the rest of your time that you don't want to take on.
[Laughter.]
Mr. Carbajal. So, today we are gathered here to discuss and
review the Coast Guard's acquisition programs for new cutters,
boats, airplanes, helicopters, shoreside infrastructure, and
information technology.
Prior to getting started, I would like to echo the concerns
expressed by Chairman Webster regarding the Coast Guard's
handling of sexual assault and harassment cases during the
1980s through the early 2000s. The investigation itself, dubbed
Operation Fouled Anchor, took place from 2014 through 2020.
After the conclusion of the investigation, the Coast Guard
then made the reprehensible and irresponsible decision to hide
the investigation--to hide the investigation--and its findings
from Congress and the American public, as well. Victim privacy
is a paramount concern, but choosing not to disclose to
Congress the existence of the investigation and purposely
hiding it from any reporting mechanism is shameful, to say the
least.
Earlier this week, Ranking Member Larsen, Vice Ranking
Member Scholten, and I sent a letter to the GAO requesting they
review the Coast Guard's handling of this investigation and
management of their Sexual Assault Prevention, Response, and
Recovery Program. I look forward to getting answers and
improving Coast Guard procedures.
To all the victims that never saw justice and went unheard
for years, we hear you and feel your pain. You were brave for
coming forward and deserve closure. We will do our best to
remedy this and prevent this from happening to other
servicemembers. I am sorry you have to relive this pain again.
Now, turning to the topic of this hearing, the Coast Guard
is in the middle of modernizing their fleet, and yet they
continue to operate ships that are well past their intended
service life. This is in part due to lack of funding from
Congress, but also due to delays in production of newer
cutters.
As we have learned from multiple GAO reports, the Coast
Guard's acquisitions typically come in delayed and over budget.
This is concerning. This is a concerning trend that I hope we
can get to the bottom of today, but it is not something that
can be fixed overnight.
Improving the acquisition program requires investing more
into the Coast Guard so that they can bolster their oversight.
It also requires investing more in U.S. shipbuilding to ensure
we have shipyards capable of building the assets we need. U.S.
shipyards depend on contracts from the Navy and Coast Guard to
support their business, but the Coast Guard is often outbid by
the size and value of Navy contracts.
We must bring on new cutters, shoreside infrastructure, and
IT systems quickly. Not only do modern assets mean improved
mission readiness, they also mean better quality of life for
our Coasties. Newer cutters mean better connectivity and
ability for Coasties to contact their families while at sea,
leading to improved mental health and higher retention rates.
Servicemembers want their families to live in the best
quality housing. That starts with investing more in shoreside
infrastructure and eliminating the estimated $3 billion
backlog.
Ultimately, our servicemembers deserve to live and work in
assets that aren't on the brink of failure. Congress and Coast
Guard leadership owe it to the personnel to deliver this. That
is why we cannot revert to fiscal year 2022 funding levels, and
we must fund the Coast Guard at a higher level than requested.
GAO has recognized that the funding typically requested by
the Coast Guard underestimates their needs for
recapitalization.
Before I conclude, I want to wish Ms. Mak congratulations
on a successful career in public service and wish you a happy
retirement. You and your team have done important oversight,
and I thank you for all your hard work.
With that, I yield back, Mr. Chair.
[Mr. Carbajal's prepared statement follows:]

Prepared Statement of Hon. Salud O. Carbajal of California, Ranking
Member, Subcommittee on Coast Guard and Maritime Transportation
Today, we're gathered here to discuss and review the Coast Guard's
acquisition programs for new cutters, boats, airplanes, helicopters,
shoreside infrastructure and information technology.
Prior to getting started, I would like to echo the concerns
expressed by Chairman Webster regarding the Coast Guard's handling of
sexual assault and harassment cases during the 1980's through early
2000's. The investigation itself, dubbed ``Operation Fouled Anchor,''
took place from 2014 through 2020.
After the conclusion of the investigation, the Coast Guard then
made the irresponsible decision to hide the investigation and its
findings from Congress and the American public.
Victim privacy is a paramount concern but choosing to not disclose
to Congress the existence of the investigation and purposely hiding it
from any reporting mechanism is shameful.
Earlier this week, Ranking Member Larsen, Vice Ranking Member
Scholten and I sent a letter to GAO requesting they review the Coast
Guard's handling of this investigation and management of their sexual
assault prevention, response and recovery program. I look forward to
getting answers and improving Coast Guard procedures.
To all the victims that never saw justice and went unheard for
years, I hear you and feel your pain. You were brave for coming forward
and deserve closure. We will do our best to remedy this and prevent
this from happening to other servicemembers. I am sorry you have to
relive this pain again.
Now, turning to the topic of this hearing. The Coast Guard is in
the middle of modernizing their fleet and yet they continue to operate
ships that are well past their intended service life. This is in part
due to lack of funding from Congress but also due to delays in
production of newer cutters.
As we've learned from multiple GAO reports, the Coast Guard's
acquisitions typically come in delayed and over budget. This is a
concerning trend that I hope we can get to the bottom of today but is
not something that can be fixed overnight.
Improving the acquisition program requires investing more into the
Coast Guard so that they can bolster their oversight. It also requires
investing more in U.S. shipbuilding to ensure we have shipyards capable
of building the assets we need. U.S. shipyards depend on contracts from
the Navy and Coast Guard to support their business, but the Coast Guard
is often outbid by the size and value of Navy contracts.
We must bring on newer cutters, shoreside infrastructure and IT
systems quickly. Not only do modern assets mean improved mission
readiness, they also mean better quality of life for our Coasties.
Newer cutters mean better connectivity and ability for Coasties to
contact their family while at sea, leading to improved mental health
and higher retention rates.
Servicemembers want their families to live in the best quality
housing and that starts with investing more in shoreside infrastructure
and eliminating the estimated $3 billion backlog.
Ultimately, our servicemembers deserve to live and work in assets
that aren't on the brink of failure. Congress and Coast Guard
leadership owe it to the personnel to deliver this. That is why we
cannot revert to fiscal year 2022 funding and must fund the Coast Guard
at higher levels than requested.
GAO has recognized that the funding typically requested by the
Coast Guard underestimates their needs for recapitalization.
Before I conclude, I want to wish Ms. Mak congratulations on a
successful career and wish you a happy retirement. You and your team
have done important oversight and I thank you for all of your hard
work.
With that, I yield back.

Mr. Webster of Florida. Now I would like to welcome our
witnesses and thank them for being here today.
Briefly, I would like to take a moment to explain our
lighting system. When the light is green, you can talk. When it
gets yellow, it is about time to wrap it up. And red means
stop. So, that is pretty much it.
I also ask unanimous consent that the witnesses' full
statements be included in the record.
Without objection, show that ordered.
As your written testimony is made a part of the record, the
committee asks that you limit your remarks to 5 minutes.
With that, Vice Admiral Thomas, you are recognized for 5
minutes for your testimony.

TESTIMONY OF VICE ADMIRAL PAUL F. THOMAS, DEPUTY COMMANDANT FOR
MISSION SUPPORT, U.S. COAST GUARD; AND MARIE A. MAK, DIRECTOR,
CONTRACTING AND NATIONAL SECURITY ACQUISITIONS, U.S. GOVERNMENT
ACCOUNTABILITY OFFICE

TESTIMONY OF VICE ADMIRAL PAUL F. THOMAS, DEPUTY COMMANDANT FOR
MISSION SUPPORT, U.S. COAST GUARD

Admiral Thomas. Good afternoon, Chairman Webster, Ranking
Member Carbajal, and distinguished members of the subcommittee.
Thank you for this opportunity to speak about our Coast Guard's
ongoing activities to recapitalize our surface and aviation
fleets, our C5ISR and information technology, and our shore
infrastructure. On behalf of the Commandant and our entire
Coast Guard workforce, I express my sincere appreciation for
your oversight and for your continuous support of our Service
and our servicemen and servicewomen.
While this hearing's focus is on Coast Guard
recapitalization efforts, I must address the recent reports
that you have mentioned of our failure to respond properly to
sexual assaults that occurred at the Coast Guard Academy
between 1988 and 2006.
As you are aware and have mentioned, in 2014, we launched
an extensive investigation into incidents alleged to have
occurred during that time. And while we took action in cases in
which we had jurisdiction, and we informed individual victims
of our findings, we did not disclose the investigation or its
findings to you, thereby depriving Congress of the opportunity
to conduct proper oversight.
I echo our Commandant's recent testimony in saying that was
a failure on the part of the Coast Guard, and we own it.
Our Service and our Academy have made much progress in our
Sexual Assault Prevention, Response, and Recovery Program. But
there is still work to do. This month, the Commandant directed
a 90-day accountability and transparency review of our Service,
led by a flag officer, and intended to ensure that we are doing
absolutely everything possible to provide a culture where
everyone is safe and valued.
We are committed to improving our prevention efforts, we
are committed to prompt and thorough investigations into
reports of sexual assault and harassment, and we are committed
to accountability for perpetrators, compassionate support to
victims, and full transparency with Congress, our crews, and
the American people. We are also committed to our mission and
our service to America. And with this subcommittee's continued
support, we have made tremendous progress across our portfolio
of acquisition programs and shore infrastructure projects.
However, we face tremendous challenges in this regard.
Lingering delays from COVID-19, continuing supply chain
restrictions, a shrinking labor pool and industrial base,
record inflation, and the sheer complexity of the ships,
aircraft, and systems that we are acquiring have resulted in
risk to cost and risk to schedule across our portfolio. These
challenges are not unique to the Coast Guard; our fellow
services, Federal partners, and the private sector are facing
them, as well.
To meet these challenges and advance the Service's
recapitalization efforts while properly planning for mission
execution, we must have stable, predictable funding. Our
Commandant has stated our Coast Guard must be a $20 billion
organization by 2033. That means a 3- to 5-percent annual
budget growth over inflation. Right now, increasing O&S costs
caused by inflation reduce our ability to invest in
recapitalization.
Simply put, most of our recent funding increases go to
running our Service, not to recapitalizing it.
Despite these challenges, we are operating or building our
fleet of the future, and delivering systems capability that
will double down on our return investment. Our Offshore Patrol
Cutter stage 1 contractor is poised to launch the first ship of
that class this fall and deliver next year. I visited the
shipyard and climbed aboard that ship. These will be tremendous
ships that have enduring value for our Nation for years to
come.
And alongside the Navy, we are working with the new Polar
Security Cutter contractor to accelerate detailed design and
ensure readiness for full-scale production. This month,
fabrication of the first prototype module will begin as we
prepare for full construction next year. And we are excited
that the design for the Waterways Commerce Cutter is
progressing well, and we are on track to begin construction
next year and deliver the first ship of that class in fiscal
year 2026.
We are also delivering new and recapitalized aviation
assets, including standardized missionization packages across
our fixed-wing fleet. And with your support, we are upgrading
and extending life on the 865 and the 860 helicopters while
moving to a fleet of all 860s as a bridge to the future
vertical-lift capability of the 2040s.
The Service continues to invest in home port upgrades to
strategically pair the delivery of new and recapitalized assets
with investments in our shore infrastructure. We are taking
steps to address the extensive backlog of shore infrastructure
projects, and we are committed to investing in these priorities
to ensure world-class infrastructure for the world's best Coast
Guard.
Thank you for your efforts to provide our women and men in
uniform with the mission capability they need to provide
mission excellence to our Nation.
I appreciate the opportunity to testify, and I look forward
to any questions you may have.
[Admiral Thomas' prepared statement follows:]

Prepared Statement of Vice Admiral Paul F. Thomas, Deputy Commandant
for Mission Support, U.S. Coast Guard
Introduction
Good afternoon, Chairman Webster, Ranking Member Carbajal, and
distinguished members of the Subcommittee. Thank you for your continued
oversight and strong support of the Coast Guard. I am honored to appear
before you today to update you on our ongoing efforts to recapitalize
our aging surface and aviation fleets; Command, Control,
Communications, Computers, Cyber, Intelligence, Surveillance and
Reconnaissance (C5ISR) systems; and shore infrastructure.
We have never experienced a greater demand for Coast Guard
services, and we anticipate this demand to grow in the future. We are
focused on delivering capabilities to meet these demands and confront
the dynamic and complex challenges that our Coast Guard men and women
face. New and more capable Coast Guard cutters, aircraft, boats, and
C5ISR systems support mission execution domestically and in some of the
most challenging environments around the world, including the Polar
Regions, Indo-Pacific, and Persian Gulf.
Our Commandant has spoken about the need to adapt to the ever-
increasing pace of change and provide our Coast Guard men and women
with modern assets, systems, and infrastructure to support mission
execution. In line with this direction, the Service continues to invest
in acquisition programs that provide the assets and capabilities the
Service needs to execute our missions world-wide. Additionally, the
Coast Guard continues to prioritize investments in our shore
infrastructure, where every mission begins and ends: the facilities,
piers, runways, and buildings, which are as necessary for operations as
our ships, boats, aircraft, and C5ISR systems.
Indeed, recapitalization remains a top priority for the Commandant
and the Service, and today's efforts to invest in tomorrow's needs will
shape the Coast Guard and impact national security for decades. This
Subcommittee's continued support has helped us make tremendous
progress, and it is that critical we field assets that improve mission
execution and deliver the capabilities the Nation needs. Simply put, we
must act today to be prepared for tomorrow.
The Coast Guard Acquisition Enterprise
As the Chief Mission Support Officer of the Coast Guard, I lead a
talented team of professionals dedicated to building and maintaining a
modern force of assets, infrastructure, and systems that meet the needs
of the Service. Acquisitions require executable strategy which
considers the need to plan and scope acquisitions before work begins;
to oversee the design and production processes; and to prepare future
crews and the maintenance community for the delivery and future
operation of new capabilities.
To bolster acquisition oversight, the Coast Guard developed an
acquisition governance structure, pursued continued refinement of that
structure, strengthened processes, institutionalized the roles of our
technical authorities, and focused on recruiting and retaining a highly
capable and trained acquisition workforce. We continue to implement
initiatives to minimize acquisition risks and maximize affordability
within our programs. We leverage the experience and expertise of our
partners to perform key functions and guide Coast Guard decision-makers
throughout the acquisition life cycle.
Status of Key Acquisition Efforts
The Coast Guard continues to make progress in our efforts to
recapitalize the Coast Guard fleet and support systems. The Service is
taking delivery of new cutters, aviation assets, boats, C5ISR
capabilities, and upgraded shore infrastructure and investing in
critical mission-enabling service life extensions, major maintenance,
and key upgrades of the legacy surface and aviation fleet to enhance
mission readiness and performance.
Surface Programs:
With the strong support of this Subcommittee, we are moving forward
with the acquisition of the Nation's first new heavy polar icebreakers
in over four decades. Polar Security Cutter (PSC) design activities are
ongoing, and initial long lead-time material has been delivered to the
shipyard. Recognizing the critical need for these assets, the Service
is working closely with the prime contractor to mitigate schedule risks
and ensure production readiness. When fully operational, PSCs will
provide the global reach and icebreaking capability necessary to
project U.S. sovereignty and influence, conduct Coast Guard missions in
the high latitudes, and advance our national interests in the Arctic
and Antarctic regions.
The Offshore Patrol Cutter (OPC) remains a top acquisition priority
for the Service and is vital to recapitalizing the capability provided
by our legacy fleet of 210-foot and 270-foot Medium Endurance Cutters
(MEC). The program is progressing, with production of OPCs 1-4 underway
with the Stage 1 contractor. Additionally, the Service is continuing
with design activities on the Stage 2 contract, which will lead to the
future production of up to 11 additional OPCs. As a bridging strategy
to maintain mission capabilities until the OPCs are delivered, the
Coast Guard has undertaken a service life extension program (SLEP) that
will address key systems and component obsolescence on board the MECs,
many of which already exceed 50 years in service.
On October 5, 2022, the Coast Guard awarded the Waterways Commerce
Cutter (WCC) contract for the design and future production of the river
buoy tender and inland construction tender variants. The contract
includes options for production of up to 27 cutters, and a separate
effort is planned to deliver three inland buoy tenders to achieve a
total fleet of 30 WCCs.
The prime contractor began design activities earlier this year.
Investment in our inland fleet is critical to the continued operation
of the Nation's Marine Transportation System, which accounts for more
than $4 trillion in annual economic activity. The legacy fleet is
approaching obsolescence, maintenance costs are rising, and the vast
majority of these cutters do not support mixed-gender berthing.
Continued progress toward delivering these new assets and replacing the
legacy fleet, which has an average age of over 55 years, is critical to
maintaining the Coast Guard's capability to execute this important
mission.
The Service continues to deliver National Security Cutters (NSC)
and Fast Response Cutters (FRC) to the fleet, providing game changing
capabilities to operational commanders and supporting expanded mission
demands around the globe. The Coast Guard plans to take delivery of NSC
10, CGC Calhoun, later this year and has commissioned 52 FRCs into
service (out of a program of record of 65 cutters).
In concert with our efforts to acquire new assets, we are also
focused on sustaining and improving our existing fleet through the In-
Service Vessel Sustainment (ISVS) program. In recent years, the Coast
Guard has completed the SLEP for the 140-foot icebreaking tug class and
Coast Guard Cutter Eagle at the Coast Guard Yard in Curtis Bay,
Maryland. The Service is approaching the completion of Major
Maintenance Availability activities for the 225-foot seagoing buoy
tenders; the last cutter is scheduled to leave the Coast Guard Yard in
early 2024. After initiating two prototypes of a 270-foot MEC SLEP,
industrial work on production began earlier this month.
In addition, the ISVS program is overseeing continued SLEP work on
Coast Guard Cutter Polar Star, the Service's only operational heavy
polar icebreaker. The cutter recently began the third of five planned
annual work periods to enable continued operation of the aging cutter
and availability for the annual breakout of national facilities in
Antarctica's McMurdo Sound.
The Coast Guard is also making investments across the boat fleet,
producing the next generation of cutter boats to enhance interdiction
capabilities of parent cutters. Additionally, the Service initiated
efforts to recapitalize the 52-foot heavy weather boat, a special
purpose craft, and achieved Acquisition Decision Event One in April.
The Coast Guard is also performing SLEP activities to extend the useful
service life of the Service's 47-foot motor lifeboats by replacing
obsolete, unsupportable, or maintenance-intensive equipment, and
standardizing configuration across the fleet.
Aviation Programs:
The Service began production of new MH-60 hull components in March
2023 to support the ongoing SLEP and continued transition of the
rotary-wing fleets to a single airframe. When combined with structural
fitting and dynamic component replacements through the SLEP, the new
hulls will extend the service life of the Coast Guard's vertical lift
capability into the 2040s. Service life extension work also continues
on the H-65 fleet, including critical avionics upgrades. Nearly 70
upgraded MH-65Es are performing operations at 11 Coast Guard air
stations across the Nation.
Acquisition of new C-130J airframes and missionization of the
fixed-wing fleet (comprised of HC-130J long range surveillance aircraft
and HC-27J/HC-144B medium range surveillance aircraft) are
significantly enhancing the Coast Guard's capabilities to conduct
airborne surveillance, detection, classification, and identification of
vessels and other aircraft missions in coordination with the surface
fleet and shoreside facilities.
The Coast Guard is delivering standardized missionization packages
based on the U.S. Navy's Minotaur Mission System Suite that improve
system performance, address obsolescence concerns, improve cyber
security of the mission system, and increase compatibility with
Department of Defense and Department of Homeland Security assets and
systems.
Additionally, the Coast Guard continues to leverage the use of
unmanned aircraft system (UAS) capabilities to support the surveillance
and maritime domain awareness capabilities of the NSC fleet. All nine
operational NSCs have been equipped with UAS infrastructure and
equipment and routinely deploy with UAS capabilities as part of the
cutter's total force package.
C5ISR and Information Technology Programs:
The Coast Guard is acquiring C5ISR and Information Technology (IT)
systems that enhance the mission capabilities of new and recapitalized
Coast Guard assets to operate in challenging environments. The systems
provide standardized capability to major cutters and aircraft, enabling
assets to receive, evaluate and act upon information, and facilitate
interoperability and information sharing inside and outside the Coast
Guard. IT efforts like the Coast Guard Logistics Information Management
System (CG-LIMS) acquisition program and Cyber and Enterprise Mission
Platform address needs to replace and modernize obsolete support
systems to improve mission readiness and operational effectiveness.
Shore Infrastructure:
As the Commandant noted in her testimony before the Subcommittee,
shore facility maintenance and recapitalization are critical to mission
success. New, more capable assets must be paired with investments in
our infrastructure needs. With the support of this Subcommittee and
others, we are making progress towards addressing the extensive backlog
of shoreside infrastructure projects. The Coast Guard is committed to
taking a leading-edge approach to project planning and execution to
ensure the Service has the modern and resilient infrastructure required
to meet the operational demands of today and tomorrow.
Conclusion
Since 1790, the Coast Guard has safeguarded our Nation's maritime
interests and natural resources on our rivers, in our ports, on the
high seas, and around the world. Each day, the Coast Guard carries out
its missions to protect lives, protect the environment, secure our
maritime borders, and facilitate commerce. Our mission support and
acquisition enterprises are, likewise, working each day to plan and
deliver the assets and capabilities needed to support these critical
missions.
The cutters, aircraft, boats, C5ISR systems, and shoreside
infrastructure we acquire today will provide vital capability for
decades to come. We are committed to maximizing the Nation's return on
these important investments. Thank you for the opportunity to testify
before you today and for all you do for the women and men of the U.S.
Coast Guard. I look forward to answering your questions.

Mr. Webster of Florida. Thank you very much. So, next we
have Ms. Mak, and you are recognized for 5 minutes for your
testimony.

TESTIMONY OF MARIE A. MAK, DIRECTOR, CONTRACTING AND NATIONAL
SECURITY ACQUISITIONS, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

Ms. Mak. Good afternoon, Chairman Webster, Ranking Member
Carbajal, and members of the subcommittee. Thank you for your
kind words, and for inviting me here today to discuss Coast
Guard's recapitalization efforts, and for valuing GAO's work
over the years.
Thank you also to the Coast Guard for recognizing our role
and working with us to improve mission capabilities, how
mission capabilities are acquired and delivered.
I first testified before this committee on the same topic
back in June 2017. As I reflected back from then to now, there
are two constants: one, there is no doubt that these efforts to
recapitalize continue to be critical for the Coast Guard to
conduct its missions; two, unfortunately, the Coast Guard's
highest priority acquisition programs continue on without sound
business cases.
A sound business case balances the necessary resources and
knowledge needed to transform a chosen concept into a product.
Our most recent reports on the Offshore Patrol Cutter (OPC) and
Polar Security Cutter (PSC) indicate that the Coast Guard is
not on track to deliver new ships on time or at initial
estimated cost. This is because, without requisite knowledge,
they continue to make optimistic assumptions about what they
and their contractors can achieve.
The Coast Guard has time after time prioritized moving
quickly through the acquisition life cycle without obtaining
critical levels of knowledge at key points in the process, and
before making significant investments.
But the Coast Guard is not unique from other military
organizations when it comes to generally disappointing
acquisition results. Like many other military organizations,
the Coast Guard is driven to be overly optimistic, to
overpromise performance at unrealistic cost and schedule, and,
to put it simply, they do so to obtain funding. These
incentives are more powerful than the policies to follow
leading acquisition practices such as establishing sound
business cases.
The budget process also provides incentives for programs to
be funded before sufficient knowledge is available to make key
decisions. However, the impact of not taking the time to gain
the right knowledge at the right time is costly. The Coast
Guard uses the optimistic estimates of cost, schedule, and
design maturity to inform its planning and budgets. Then,
inevitably, as in most current acquisitions, when the ship's
design and construction face challenges that increase cost and
elongate schedules, the Coast Guard has to budget for these
overruns, and critical future efforts are pushed off to pay for
these overruns.
The lack of sound business cases is also showing up in
significant cost growth to sustain its existing assets. The
Coast Guard has spent hundreds of millions of dollars on
extending the older assets' service lives so that missions can
be performed while waiting for the new assets. If this
continues, affordability concerns will also continue.
The Coast Guard can continue to remain in this reactive
mode, delaying and reducing its capabilities slowly over time.
But this is not an optimum approach, to say the least. As the
Coast Guard continues modernizing its fleet and sustaining
existing assets for much longer than planned, it is important
that it develop sound business cases as part of a more
strategic and comprehensive approach to managing its
acquisition portfolio.
Congress also has a role in demanding realistic business
cases through the selection and timing of the programs it
chooses to authorize and fund. What Congress does with funding
sets the tone for what acquisition practices are acceptable.
Congress could consider putting requirements in place to drive
better acquisition behavior.
For example, it could require the Coast Guard to fully
complete design before shipbuilding construction starts, which
is now what the Navy is required to do. This culture of undue
optimism when starting programs really needs to shift away from
the unrealistic business cases, and instead focusing on sound
practices. Without this change, taxpayers are left holding the
bill, and operators must make do with aging assets when
acquisition programs fail to deliver as promised.
Chairman Webster, Ranking Member Carbajal, members of the
subcommittee, this completes my prepared statement. I would be
pleased to respond to any questions you may have. Thank you.
[Ms. Mak's prepared statement follows:]

Prepared Statement of Marie A. Mak, Director, Contracting and National
Security Acquisitions, U.S. Government Accountability Office
Coast Guard Recapitalization: Actions Needed to Better Manage
Acquisition Programs and Address Affordability Concerns
Highlights
Why GAO Did This Study
The U.S. Coast Guard, a component within the Department of Homeland
Security, employs a variety of vessels and aircraft, several of which
are approaching the end of their intended service lives. Consequently,
the Coast Guard plans to invest billions of dollars in two of its
highest priority programs--acquiring three heavy icebreakers, known as
PSCs, and a fleet of 25 OPCs, which are ships that conduct a variety of
missions in offshore waters.
This statement addresses (1) the capabilities provided by the newer
Coast Guard surface vessels, (2) the risks and consequences of not
establishing sound business cases for two of Coast Guard's highest
priority programs--the OPC and PSC, and (3) the overall affordability
of the Coast Guard's acquisition portfolio. This statement is largely
based on information from GAO-23-105805 and GAO-23-105949. Information
about the scope and methodology of prior work on which this statement
is based can be found in those products.
What GAO Recommends
GAO made seven recommendations in its 2023 reports on the OPC and
PSC to better align the Coast Guard's acquisition policy and the
programs' practices with shipbuilding leading practices. DHS and the
Coast Guard agreed with five recommendations. Overall, GAO has made 40
recommendations over the past decade, 14 of which remain open. GAO will
continue to monitor DHS's and the Coast Guard's progress in addressing
these recommendations.
What GAO Found
The Coast Guard is modernizing its vessels and aircraft, an effort
known as recapitalization. Its newest cutters--the Offshore Patrol
Cutter (OPC) and Polar Security Cutter (PSC)--are intended to deliver
greater capability--such as time a ship can spend at sea without
returning to port to resupply--than the legacy assets they will
replace.
GAO's prior work shows that successful shipbuilding programs use
solid, executable business cases to design and build ships. They attain
critical levels of knowledge--such as mature technologies, stable
designs, and realistic cost estimates--at key points in the
shipbuilding process before making significant investments. The Coast
Guard, however, continues to face cost growth and schedule delays in
some of its newer acquisitions because it has not obtained the right
knowledge at the right time.
Immature technologies. The critical technology of the first four
OPCs--the davit (a crane that deploys and retrieves a cutter's small
boats)--is still not matured. Without maturing the davit, the Coast
Guard risks delays and costly rework.
Unstable design. The PSC's design is not yet stable, which risks an
extended design phase and contributed to a 3-year schedule delay in the
shipyard, with the start of construction of the first cutter now
planned for March 2024. Starting ship construction without a stable
design risks costly rework.
Combined, these two programs are billions of dollars over their
initial cost estimates and are more than 2 years behind schedule,
increasing the risk of potential capability gaps and putting cost
pressure on the overall portfolio. For example, in June 2023, GAO
reported that the Coast Guard projects to have a reduced number of
cutters available for operation starting in 2024 and through 2039 due
to the OPC's delivery delays. Since 2010, the Coast Guard has invested
at least $850 million to maintain the aging Medium Endurance Cutters
and Polar Star. The Coast Guard is investing $250 million to extend the
service life for six cutters and $75 million to extend the service life
of the almost 50-year-old Polar Star until the delayed OPCs and PSCs,
respectively, are operational.
__________
Chairman Webster, Ranking Member Carbajal, and Members of the
Subcommittee:
I am pleased to be here today to discuss key challenges the U.S.
Coast Guard continues to face as it acquires new assets--such as
vessels and aircraft--an effort referred to as recapitalization, as
well as the overall affordability of the Coast Guard's acquisition
portfolio. The U.S. Coast Guard, within the Department of Homeland
Security (DHS), is the principal federal agency responsible for
maritime safety, security, and environmental stewardship in U.S. ports
and waterways, and supports other missions, such as drug and migrant
interdiction.
As part of its efforts to modernize its aging fleet of cutters, the
Coast Guard is acquiring four new vessels, including Offshore Patrol
Cutters (OPC), Polar Security Cutters (PSC), Fast Response Cutters
(FRC), and National Security Cutters (NSC). The Coast Guard intends for
these new cutters to provide additional capabilities above those
offered by the legacy ships. The two more recent acquisition programs--
the OPC and PSC--have faced and are continuing to face significant
schedule delays and cost increases, spurring concerns about capability
and affordability gaps.
My statement today will address (1) the capabilities provided by
the newer Coast Guard vessels, (2) the risks and consequences of not
establishing sound business cases for two of the Coast Guard's highest
priority programs--the OPC and PSC, and (3) the overall affordability
of the Coast Guard's acquisition portfolio. This statement is based on
our extensive body of work examining the Coast Guard's shipbuilding
acquisition efforts spanning the last decade, including our June 2023
report on the OPC and our July 2023 report on the PSC.\1\
---------------------------------------------------------------------------
\1\ GAO, Coast Guard Acquisitions: Offshore Patrol Cutter Program
Needs to Mature Technology and Design, GAO-23-105805 (Washington, D.C.:
June 20, 2023); Coast Guard Acquisitions: Polar Security Cutter Needs
to Stabilize Design Before Starting Construction and Improve Schedule
Oversight, GAO-23-105949 (Washington, D.C.: July 27, 2023).
---------------------------------------------------------------------------
For the reports cited in this statement, among other methodologies,
we analyzed Coast Guard guidance, data, and documentation, and
interviewed Coast Guard officials at its headquarters and field units
to determine the extent to which Coast Guard acquisition programs are
meeting their cost, schedule, and performance goals. Each of the
reports cited in this statement provide further detailed information on
our objectives, scope, and methodology for that work.
We conducted the work on which this statement is based in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
The Coast Guard's Newer Vessels Offer Greater Capability than Its
Legacy Fleet
The Coast Guard's newest vessels are intended to deliver greater
capability than the legacy vessels they will replace. Some examples of
capabilities include range and the time a ship can spend at sea. Table
1 details examples of key characteristics of new Coast Guard assets and
the respective legacy assets.

Table 1: Comparison of Coast Guard's Legacy and New Vessels

Legacy vessels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Medium Endurance Cutter
High Endurance Cutter ----------------------------------------------- Island Class Patrol Polar Star
210-foot 270-foot Boat
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number in fleet.................... 12.................... 14.................... 13................... 49................... 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year first-in class cutter 1967.................. 1964.................. 1983................. 1986................. 1976
commissioned.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Length............................. 378 feet.............. 210 feet.............. 270 feet............. 110 feet............. 399 feet
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum time at sea without 45 days............... 21 days............... 21 days.............. 5 days............... 80 days
reprovisioning.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Range.............................. 14,000 miles.......... 6,000 miles........... 9,900 miles.......... 1,900 miles.......... 21,500 miles
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operational tempo.................. 185 days away from 185 days away from 185 days away from 1,800 operational 185 days away from
home port per year. home port per year. home port per year. hours per year. home port per year.
--------------------------------------------------------------------------------------------------------------------------------------------------------

New vessels
----------------------------------------------------------------------------------------------------------------
National Security Offshore Patrol Fast Response Polar Security
Cutter Cutter Cutter Cutter
----------------------------------------------------------------------------------------------------------------
Number in fleet................. 11 planned (9 25 planned (not 65 planned (51 3 planned (not yet
operational). yet operational). operational). operational).
----------------------------------------------------------------------------------------------------------------
Year first-in class cutter 2008.............. Planned for 2024.. 2012.............. Planned for 2028
commissioned.
----------------------------------------------------------------------------------------------------------------
Length.......................... 418 feet.......... 360 feet.......... 154 feet.......... 460 feet
----------------------------------------------------------------------------------------------------------------
Maximum time at sea without 60 days........... 45 to 60 days..... 5 days............ 80 days
reprovisioning.
----------------------------------------------------------------------------------------------------------------
Range........................... 12,000 miles...... 8,500 to 9,500 2,500 miles....... 21,500 miles or
miles. more
----------------------------------------------------------------------------------------------------------------
Operational tempo............... 185 days away from 230 days away from 2,500 operational 3,300 operational
home port per home port per hours per year. hours per year.
year. year.
----------------------------------------------------------------------------------------------------------------
Source: GAO presentation of Coast Guard information. GAO-23-106948

Figure 1 depicts the Coast Guard's OPC and PSC, which are part of
this modernization effort.

Figure 1: The Coast Guard's Offshore Patrol Cutter and Polar Security
Cutter
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Source: Eastern Shipbuilding Group (left image), Bollinger Mississippi
Shipbuilding (right image).
GAO-23-106948

As I will discuss in my testimony, delays in delivering these
vessels have required the Coast Guard to invest hundreds of millions of
dollars, if not more, in trying to maintain and extend the life of its
legacy fleet. Further delays in these two programs will increase the
risk that the Coast Guard will not have a sufficient number of vessels
available to conduct its missions.
Failures to Establish Sound Business Cases and Follow Leading Practices
Continue to Result in Significant Schedule Delays and Cost Increases
Our prior work has found that successful programs start out with
solid, executable business cases before setting program baselines and
committing resources.\2\ For the Coast Guard, this would be when a
program sets its initial program baseline that establishes cost,
schedule, and performance goals. A sound business case requires balance
between the concept selected to satisfy user needs and the resources--
technologies, design knowledge, funding, and time--needed to transform
the concept into a product. At the heart of a robust business case is a
knowledge-based approach.
---------------------------------------------------------------------------
\2\ GAO, Weapon System Requirements: Detailed Systems Engineering
Prior to Product Development Positions Programs for Success, GAO-17-77
(Washington, D.C.: Nov. 17, 2016); Best Practices: High Levels of
Knowledge at Key Points Differentiate Commercial Shipbuilding from Navy
Shipbuilding, GAO-09-322 (Washington, D.C.: May 13, 2009); and Defense
Acquisitions: Realistic Business Cases Needed to Execute Navy
Shipbuilding Programs, GAO-07-943T (Washington, D.C.: July 24, 2007).
---------------------------------------------------------------------------
For shipbuilding programs in particular, we have found that
successful programs attain critical levels of knowledge at key points
in the shipbuilding process before significant investments are made. We
found that key enablers of a good business case include mature
technologies and plans for a stable design, reliable cost estimates,
and realistic schedule targets, among other things.\3\ Figure 2 depicts
a leading practice of developing technology and maturing design prior
to construction--as part of a sound business case--and the increased
risks for not maintaining a sound business case throughout the
acquisition life cycle.
---------------------------------------------------------------------------
\3\ For the purposes of that review, we did not assess the extent
to which the PSC's requirements are firm and feasible. In April 2018,
we found that prior to setting program baselines for the PSC, DHS and
the Coast Guard revised the program's operational requirements
document--a key acquisition document that provides the key performance
parameters the program must meet--to make the heavy polar icebreakers
more affordable, and the revisions included adjusting the range of
operating temperatures; reducing science and survey requirements; and
adding space, weight, and power reservations for Navy equipment. GAO,
Coast Guard Acquisitions: Status of Coast Guard's Heavy Polar
Icebreaker Acquisition, GAO-18-385R (Washington, D.C.: Apr. 13, 2018).
---------------------------------------------------------------------------

Figure 2: A Sound Business Case Reduces Risk in Acquisition Programs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Source: GAO depiction of notional acquisition process. GAO-23-106948

The Coast Guard's shipbuilding programs--specifically the OPC and
PSC programs--have struggled with achieving elements for a good
business case. As a result of neither maturing technologies nor
achieving design stability when called for by leading practices, both
programs are well behind schedule. In addition, both programs' cost
estimates have increased by billions of dollars for several reasons,
including that their initial estimates were either not comprehensive or
not well-informed.
Technology maturity and design stability. The Coast Guard's OPC and
PSC programs did not follow shipbuilding leading practices with regards
to conducting, demonstrating, and achieving technology readiness and
design stability. Shipbuilding leading practices state that critical
technologies should be proven prior to the award of the detail design
and construction contract.\4\ Shipbuilding leading practices also state
that programs should not proceed with construction with immature
technology and design instability. When programs proceed into
construction without maturing and addressing outstanding technology and
design challenges, they increase the risk of completing out-of-sequence
construction and rework, which can result in increased costs and
schedule delays.
---------------------------------------------------------------------------
\4\ In the case of OPC, the detail design contract award is the
point when the Coast Guard down-selected to one shipbuilder. Generally,
detail design includes generating work instructions that show detailed
system information and also guidance for subcontractors and suppliers
needed to support construction, including installation drawings,
schedules, material lists, and lists of prefabricated materials and
parts.
---------------------------------------------------------------------------
Years after we first identified these deficiencies with the OPC and
PSC programs, the Coast Guard still has not gained the requisite
knowledge for its technologies and designs:
OPC: In October 2020, we found that the Coast Guard did
not mature a critical technology--the davit, a crane that lowers and
raises a cutter's small boats--before starting construction.\5\ We
recommended that the Coast Guard stabilize the OPC's design, including
that it mature the davit to a technology readiness level (TRL) of 7--
demonstrating it in a realistic environment--prior to the start of
construction on OPC 3, and the Coast Guard concurred.\6\ However, the
Coast Guard has since started construction on OPC 3 and OPC 4 without
maturing the technology, and as of June 2023, the davit remains
immature and unproven.\7\
---------------------------------------------------------------------------
\5\ GAO, Coast Guard Acquisitions: Opportunities Exist to Reduce
Risk for the Offshore Patrol Cutter Program, GAO-21-9 (Washington,
D.C.: Oct. 28, 2020).
\6\ A TRL is a measurement of maturity for each critical
technology, numbered 1 through 9 from least to most mature based on
demonstrations of increasing fidelity and complexity.
\7\ GAO-23-105805.
---------------------------------------------------------------------------
In October 2020, we also found that the Coast Guard failed to
complete basic and functional design prior to the start of lead ship
construction, contrary to leading practices.\8\ We recommended that
program complete basic and functional design prior to the start of
construction on OPC 3, and update its acquisition policy to follow
shipbuilding leading practices. However, in June 2023, we found that
the Coast Guard had not sufficiently updated its acquisition policy,
and the OPC program still had not completed functional design prior to
the start of construction on OPC 4.\9\ Further, we found that
significant portions of the design related to distributive systems--
systems like water, heating, and cooling that affect multiple zones of
the ship--still remained incomplete.
---------------------------------------------------------------------------
\8\ Basic design includes establishing the hull form, general
arrangements of compartments, and outlining significant ship steel
structure. Some routing of major equipment and related major
distributive systems, including electricity, water, and other utilities
is done. It also ensures the ship will meet the performance
specifications, informs overall ship cost, facilitates shipbuilders'
development of responsive proposals, and identifies major equipment and
components that must be purchased in advance. Functional design
includes providing a further iteration of the basic design, such as
size and positioning of structural components, information on the
positioning of major piping and other distributive systems, and
outfitting in each block--or basic building unit for a ship. See GAO-
23-105805.
\9\ GAO-23-105805.
---------------------------------------------------------------------------
We made a second recommendation that the Coast Guard update
its policy in this area--specifically in relation to completing the
design of distributive systems prior to construction--so that programs
follow shipbuilding leading practices for stabilizing design.\10\ The
Coast Guard has not fully implemented this recommendation. We also went
further to recommend that the Coast Guard complete the routing of
distributive systems prior to starting construction on stage 2 ships.
While the Coast Guard concurred with our June 2023 recommendation to
update its policy, it did not concur with our recommendation to apply
this leading practice to the OPC program.
---------------------------------------------------------------------------
\10\ GAO-23-105805.

PSC: In September 2018, we found that the Coast Guard did
not conduct a technology readiness assessment of PSC's key
technologies, nor did it hold a preliminary design review, prior to
approving its program baselines.\11\ Coast Guard officials said that a
technology readiness assessment was not necessary because the
technologies they plan to employ had been proven on other ships.
However, according to leading practices, such technologies can still
pose risks when applied to a different program or operational
environment. The program subsequently conducted a technology readiness
assessment and established revised baselines in May 2021 after holding
its preliminary design review in response to our recommendations.
---------------------------------------------------------------------------
\11\ GAO, Coast Guard Acquisitions: Polar Icebreaker Program Needs
to Address Risks before Committing Resources, GAO-18-600 (Washington,
D.C.: Sept. 4, 2018).
---------------------------------------------------------------------------
As of March 2023, the PSC program reported that the
functional design was considerably below the desired levels that
officials expect to inform a decision to proceed with construction. As
of April 2023, program officials said they anticipate holding the
production readiness reviews to evaluate design maturity by March 2024.
However, since September 2021, with about 49 percent functional design
completed, our analysis indicated that the shipyard is completing, on
average, approximately three percent of functional design every 6
months. This means that it would take the shipyard approximately 8
years to complete 100 percent of functional design. Therefore, to reach
the program's goal of completing functional design completed prior to
March 2024, the shipyard would need to increase its design completion
rate significantly. Coast Guard officials said that design completion
is further along than the metrics show because the metrics do not
factor in progress made on design components that are not complete.
We also found that the program is experiencing challenges
with the design.\12\ According to program officials, the design
challenges are related to (1) U.S. industry's general lack of
experience designing and building icebreakers, (2) the complexity of
PSC's design, and (3) significant changes from the original design,
among other things. Given that there are still portions of the design
that are immature, we recommended that the Coast Guard complete
functional design prior to approving construction for the lead ship, in
line with our recommendation to OPC and Coast Guard policy, as a whole.
The Coast Guard concurred with the recommendations, and we will monitor
its progress in addressing them.
---------------------------------------------------------------------------
\12\ GAO-23-105949.

Cost. Both the OPC and PSC have incurred cost growth above their
initial estimates, in part because the programs initially
underestimated costs.
OPC: OPC's acquisition cost estimate increase increased
from $12.5 billion to $17.6 billion between the program's 2012 and 2022
life-cycle cost estimates. The Coast Guard attributes the increase to
many factors, including restructuring the stage 1 contract--for OPCs 1
through 4--and recompeting the requirement for stage 2--OPCs 5 through
25--in response to a disruption caused by Hurricane Michael, and
increased infrastructure costs for homeports and facilities, among
other things.\13\ While there are instances of unforeseen costs, there
were some costs that were either based on unrealistic assumptions or
not fully accounted for in the Coast Guard's initial cost estimate.
Specifically, OPC's facilities acquisition cost estimate--including
homeports and shore facilities--increased from $431 million to $1.4
billion from 2012 to 2022 because Coast Guard officials said they
originally assumed that the Coast Guard could utilize existing Navy
bases to homeport the OPC, which did not come to fruition.\14\ In
addition, the OPC's initial acquisition cost estimate increased by
about $1 billion, most of which happened after the program settled
which Navy-provided combat system equipment would go on the OPC.
Lastly, the OPC's initial acquisition cost estimate did not include
costs for some outfitting and post-delivery work that includes the
sensitive compartmented information facility on the cutter, the Combat
System Equipment Guide, and technical manuals. The sensitive
compartmented information facility accounted for about 98 percent of a
$1 billion increase in the estimate for outfitting and post-delivery
work.
---------------------------------------------------------------------------
\13\ Following significant disruption caused by Hurricane Michael
in October 2018, the Acting Secretary of Homeland Security determined
that the OPC is essential to the national defense and authorized up to
$659 million in extraordinary contractual relief to the shipbuilder
pursuant to Public Law 85-804 for the design and construction of up to
four OPCs, an effort the Coast Guard refers to as stage 1. As part of
this determination, the Acting Secretary also directed the Coast Guard
to recompete the requirement for the remaining 21 cutters.
\14\ Facilities acquisition costs are funded by the Coast Guard's
Major Acquisition Systems Infrastructure Program and the Office of
Civil Engineering.

PSC: From 2018 to 2021, the program's total life-cycle
cost estimate increased by about 35 percent, from $9.8 billion to $13.3
billion. Most of the cost increase was driven by increased operations
and maintenance costs, resulting from the increased ship size and use
of additional historical data to reevaluate projected annual
maintenance costs in the later estimate. The program's additional
analysis of historical maintenance costs in its January 2021 cost
estimate addressed, in part, a recommendation we made in 2018 to update
the cost estimate in accordance with leading practices in cost
estimating. Specifically, in September 2018, we found that the PSC's
life-cycle cost estimate that informed the program's $9.8 billion cost
baseline substantially met GAO's leading practices for being
comprehensive, well-documented, and accurate, but only partially met
leading practices for being credible.\15\ The cost estimate did not
quantify the range of possible costs over the entire life of the
program. As a result, the cost estimate was not fully reliable and may
have underestimated the cost. Consequently, the Coast Guard may have
provided decision makers with incomplete data to make a decision on
total funding needed for the program.
---------------------------------------------------------------------------
\15\ GAO-18-600.

Schedule. The Coast Guard relied on optimistic schedules for both
the PSC and OPC programs, and both have experienced schedule delays of
2 years or more (see fig. 3). The two programs' schedule challenges
have been exacerbated by a lack of reliable schedule data from the
contractors responsible for building these ships.

Figure 3: Delivery Delays with the Lead Ship in the Polar Security
Cutter and Offshore Patrol Cutter Programs, as of 2023
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Source: GAO analysis of U.S. Coast Guard and Department of Homeland
Security documentation.
GAO-23-106948

OPC: In October 2020, we found that prior to the
construction award for OPC 1, the OPC contractor's schedule contained
deficiencies that were contrary to GAO-identified leading practices for
developing schedules. Further, we found the revised post-hurricane
delivery dates for the first four OPCs were optimistic and did not
fully incorporate schedule risks, increasing the likelihood that the
OPCs will not be delivered when promised. In a review of the
shipbuilder's schedule, the Defense Contract Management Agency and the
Coast Guard found deficiencies, such as that the shipbuilder could not
produce a valid critical path--or the path of longest duration through
the sequence of activities. We recommended that the Coast Guard fully
address the deficiencies identified in the contractor's schedule. As of
July 2023, the recommendation remains open. In June 2023, we found that
the schedule is still optimistic given that the program is still
addressing a manufacturing issue with shafting and delays with
development of the davit.\16\ In total, the program is experiencing at
least a 2.5-year delay in delivery of the lead ship.
---------------------------------------------------------------------------
\16\ GAO-23-105805.

PSC: In September 2018, we found that the PSC's planned
delivery dates were not informed by a realistic assessment of
shipbuilding activities. Instead, the schedule was driven by the
potential gap in icebreaking capabilities once the Coast Guard's only
operating heavy polar icebreaker--the Polar Star--reaches the end of
its service life.\17\ We recommended that the program develop a
schedule in accordance with leading practices for project schedules to
set realistic schedule goals for all three PSCs before the lead ship
contract option was awarded. However, we closed the recommendation as
not implemented because the program proceeded with the award in April
2019 without developing a realistic schedule. In July 2023, we found
the program had yet to establish a realistic schedule.\18\ The
program's current schedule estimates that delivery of the lead ship
will occur in 2027, which is 3 years later than its previous estimate,
but this could further slip after the contractor reassesses and revises
its schedule.
---------------------------------------------------------------------------
\17\ GAO-18-600.
\18\ GAO-23-105949.

Without a sound business case, acquisition programs are at risk of
breaching the cost, schedule, and performance baselines set when the
program was initiated--in other words, experiencing cost growth,
schedule delays, and reduced capabilities. Even after a program has
established its acquisition program baseline, information about the
soundness of a program's business case is helpful for Congress as the
Coast Guard requests funding through the acquisition life cycle.
Schedule Delays Increase the Risk of Capability Gaps and Affordability
Concerns
The delays in the OPC and PSC programs have increased the
likelihood of operational capability gaps. Further, it has forced the
Coast Guard to invest at least $325 million to extend the life of its
legacy assets, the Medium Endurance Cutters (MEC) and the Polar Star,
in addition to the $850 million it has spent to maintain them over the
last decade.\19\ Further, the Coast Guard is confronted with a costly
backlog of shore infrastructure projects--such as piers, docks, boat
stations, air stations, and housing units--but has requested funding
that falls short of its estimated infrastructure needs. The
affordability of the Coast Guard's surface fleet is in jeopardy, given
the increasing costs to maintain legacy assets, costs for the OPC and
PSC acquisition programs, and the overall infrastructure needs to
support Coast Guard assets.
---------------------------------------------------------------------------
\19\ These expenditures include Medium Endurance Cutter depot-level
maintenance costs from 2010 through 2021, and depot-level maintenance
costs for the Polar Star from 2014 through 2017. The Polar Star's
expenditures are calculated from 2014 to 2017 since it was in a
reactivation period prior to 2014 and was not operational, and we have
not reported on depot-level maintenance expenditures since 2017.
---------------------------------------------------------------------------
Capability Gaps Are Exacerbated by Delays in Acquisition Programs
Since April 2017, we have reported that full operational capability
dates have been delayed for several Coast Guard acquisition programs.
For example, the OPC's full operational capability (FOC) date has been
delayed until at least 2039 due to the ongoing issues with design and
construction. See table 2 for initial FOC dates for the Coast Guard's
recapitalization programs, 2017 updates, and current estimates.

Table 2: Delays in Full Operational Capability (FOC) of Coast Guard
Recapitalization Programs
------------------------------------------------------------------------
Initial
DHS- FOC date (as Current
approved of January FOC date
FOC date 2017) \a\
------------------------------------------------------------------------
Offshore Patrol Cutter........... 2034 2035 2039
Fast Response Cutter............. 2022 2027 2027
National Security Cutter......... 2016 2020 TBD
Polar Security Cutter............ 2029 N/A 2031
Waterways Commerce Cutter \c\.... N/A N/A 2032
Medium Range Surveillance 2020 2025 2032
Aircraft (HC-144A/C-27J)........
Long Range Surveillance Aircraft 2017 2027 2030 \b\
(HC-130J).......................
Medium Range Recovery Helicopter N/A N/A TBD
(MH-60T) \c\....................
Short Range Helicopter (H-65).... 2020 2020 2024
------------------------------------------------------------------------
Source: GAO presentation of Coast Guard information. GAO-23-106948
Legend: DHS = Department of Homeland Security; TBD = to be determined;
N/A = not applicable
\a\ All dates are program estimates. The FOC date for the Offshore
Patrol Cutter is as of June 2023. FOC dates for the Waterways Commerce
Cutter, Medium Range Surveillance Aircraft, Long Range Surveillance
Aircraft, and MH-60T Aircraft are as of April 2023. The FOC date for
the Polar Security Cutter is as of December 2022. FOC dates for the
Fast Response Cutter, National Security Cutter, and H-65 Aircraft are
as of March 2022.
\b\ The Long Range Surveillance Aircraft program's acquisition program
baseline specifies a full operational capability date of 2033.
However, according to program officials, the program was able to
receive funding 3 years ahead of schedule, which has allowed for an
accelerated schedule.
\c\ As of April 2023, the Waterways Commerce Cutter program and MH-60T
program did not have official DHS approved baselines.

Specifically, with the surface assets, the risk of having an
operational gap increases as the new ships are delayed because the
legacy ships they are replacing continue to age and face increasing
risk of mechanical failure. For example, in June 2023, we reported that
given the delays in delivery of the OPC, the Coast Guard projects to
have a reduction in asset availability--or a reduction in the number of
cutters available for operations--starting in 2024 and through
2039.\20\ This operational gap is at risk of increasing if the OPC
delivery delays are realized and pushed further to the right.
---------------------------------------------------------------------------
\20\ GAO-23-105805.
---------------------------------------------------------------------------
See figure 4 for the Coast Guard's notional estimated
decommissioning dates for the MECs based on commissioning date compared
with the current OPC delivery schedule. While the MECs may not be
decommissioned in the order depicted depending on the condition of each
ship at the time, this figure helps depict the sequence of
commissioning of the OPCs and decommissioning of the MECs.

Figure 4: U.S. Coast Guard's Estimated Medium Endurance Cutter (MEC)
Service Life Dates Compared with Offshore Patrol Cutter (OPC) Delivery

Source: GAO analysis of Coast Guard documents. GAO-23-106948

The reduction of asset availability could be further exacerbated if
the Coast Guard does not effectively mitigate OPC schedule risks:
Design and manufacturing issues for OPC stage 1. The
program is experiencing ongoing delays due to a propeller shafting
manufacturing issue that requires remanufacturing of some of these
shafts.
Delays in the award of OPC stage 2. The program will
delay delivery of OPC stage 2 ships by at least 6 months due to the
delays of the contract award and subsequent bid protest. The stage 2
shipbuilder also needs to complete a detail design for the stage 2
ships, and the Coast Guard needs to approve the design, before the
shipbuilder can begin construction.\21\
---------------------------------------------------------------------------
\21\ Generally, detail design includes generating work instructions
that show detailed system information and also guidance for
subcontractors and suppliers needed to support construction, including
installation drawings, schedules, material lists, and lists of
prefabricated materials and parts.

Given these challenges, the Coast Guard will likely need to further
maintain and keep the MECs in service longer or otherwise face a
reduction of assets. Coast Guard officials told us that they do not
anticipate the need to employ alternative options to meet mission
requirements. However, officials stated that if the Coast Guard needs
to decommission cutters earlier than planned, they could reallocate
cutters to support emergent needs, employ other cutters to support
missions previously handled by MECs, or extend the date for other
planned decommissions to support continued operations.
Similarly, as noted earlier, according the PSC program schedule,
the delivery of the lead ship is now delayed until at least 2027--3
years behind the original plan in its 2018 schedule--and all three
ships are expected to be operational by at least 2031.\22\ In April
2023, a Coast Guard fleet mix analysis indicated that the service in
fact needed a mix of eight or nine heavy and medium polar icebreakers
to meet its projected requirements. The Coast Guard currently only has
one heavy polar icebreaker, the Polar Star, and one medium polar
icebreaker, the Healy, and therefore already has an operational gap.
The Polar Star is well beyond its planned operational service life and
has become more complicated and costly to maintain as it ages. Based
off the Coast Guard's fleet mix analysis, its icebreaker fleet will
remain in a deficit even after all three PSCs on the current contract
are delivered.
---------------------------------------------------------------------------
\22\ GAO-23-105949.
---------------------------------------------------------------------------
Service Life Extension Programs Will Help Relieve Some Pressure, but
Legacy Assets Are Expensive and Challenging to Maintain
To help mitigate the delays of the OPC and PSC, the Coast Guard
began two service life extension programs (SLEP) for its legacy
assets--the 270-foot Medium Endurance Cutters, and the Polar Star--for
an estimated $325 million. The Coast Guard initiated the MEC SLEP in
2018 and the Polar Star SLEP in 2021. They are aimed to extend the
service life of six MECs and the one Polar Star by 10 years and 4 to 5
years, respectively (see table 3).

Table 3: The Coast Guard's Current and Recent Maintenance History of the Medium Endurance Cutter and Heavy Polar
Icebreaker
----------------------------------------------------------------------------------------------------------------
Major maintenance
Vessel Design service life Average age history
----------------------------------------------------------------------------------------------------------------
270-foot 30 years............... 36 years............... The 270-foot Medium
Medium Endurance Cutters
Endurance completed a Mission
Cutter. Effectiveness Project
in 2014.This effort
was intended to
minimize maintenance
costs and maximize the
reliability of
critical systems, but
not increase the
service life of the
cutters. The Coast
Guard initiated
another program to
extend the service
life of six of the 13
270-foot Medium
Endurance Cutters.
This service life
extension project is
projected to cost $250
million, and intended
to extend service life
for up to 10 years and
close the gap in
capability until the
Offshore Patrol Cutter
is operational.
Heavy polar icebreaker: Polar Star... 30 years............... 46 years............... The Polar Star
completed a
reactivation
maintenance period in
2013 that was intended
to add an additional 7-
10 years to its
service life from the
time of reactivation.
The Coast Guard
initiated another
service life extension
program in 2021 to
span 5 years and focus
on upgrades or
replacements of
different systems. The
Coast Guard completed
the second year of
this 5-year program in
2022, and plans on
investing $75 million
in total to perform
work from fiscal years
2021 through 2025
toward this effort.
Ultimately, the
service life extension
program is intended to
extend the service
life of the Polar Star
by 4 to 5 years, or,
according to Coast
Guard officials, until
at least 2029 or 2030.
----------------------------------------------------------------------------------------------------------------
Source: GAO presentation and analysis of Coast Guard data. GAO-23-106948

In addition, we previously found that these legacy assets are
getting harder and more expensive to maintain. In July 2018, we found
that it is unclear how the Coast Guard will be able to fund planned
SLEPs on several aging assets in order to sustain them--that is, keep
them operating at acceptable levels--until replacement assets are
available.\23\ We found that several of the Coast Guard's aging cutters
have spent more on depot-level maintenance than was planned. Combined,
these cutters--the 210-foot and 270-foot MECs, and the Polar Star--
expended about $550 million, more than twice what was originally
estimated (standard support levels), from 2010 to 2017.\24\ In June
2023, we reported that depot-level maintenance costs for the MECs
totaled about $300 million from 2018 through 2021.\25\
---------------------------------------------------------------------------
\23\ GAO, Coast Guard Acquisitions: Actions Needed to Address
Longstanding Portfolio Management Challenges, GAO-18-454 (Washington,
D.C.: July 24, 2018).
\24\ The Polar Star's expenditures are calculated from 2014 to 2017
since it was in a reactivation period prior to 2014 and was not
operational.
\25\ GAO-23-105805.
---------------------------------------------------------------------------
In addition to increased maintenance costs, Coast Guard operators
have had to make do with deteriorating legacy assets.
MEC: The MECs have generally met or remained within
target levels for operational and materiel availability. However, we
found that maintenance being conducted was on significant systems that
were resulting in casualties for the cutters.\26\ For example, in
fiscal year 2021, MEC crews reported 317 casualties with their
propulsion system's main diesel engines, generators, and the hull. Some
of these casualties rendered the cutters disabled for multiple days. In
addition, habitability remains a concern for both 210-foot and 270-foot
MECs. Crews experience problems maintaining heating, venting, and air
conditioning (HVAC) systems and those HVAC inefficiencies have led to
high levels of condensation and mold in crew living spaces, such as
berthing areas. Coast Guard crews told us they try to address these
issues as they occur, but the number and frequency of maintenance
issues, in addition to their regular mission duties, make living in
these conditions a fact of life.
---------------------------------------------------------------------------
\26\ GAO-23-105805.

Heavy polar icebreaker: In July 2023, we found that the
Polar Star continues to face similar maintenance issues.\27\ From 2019
through 2021, the Coast Guard reported that some of the top cost
drivers for maintenance on the Polar Star included components like the
main diesel engines, engine cylinders, a propulsion shaft, and fuel
pumps. Electrical systems have also posed problems. For example, during
the Polar Star's 2019-2020 mission to Antarctica, the crew reported a
cutter-wide loss of power. Polar Star crew told us that a cutter-wide
loss of power can sometimes take an hour to fully resolve as they have
to manually reset each system since older systems lack centralized
digital controls. Further, during the 2021-2022 deployment, a
propulsion control failure placed the cutter at risk of colliding with
another vessel in Puget Sound.
---------------------------------------------------------------------------
\27\ GAO-23-105949.

The Polar Star SLEP, which began in 2021 and is conducted annually
during dry dock, has made upgrades to the Polar Star such as
improvements to its propulsion control system. However, habitability
remains a health concern for its crew. For example, annual assessments
of the cutter's condition noted the need to remove asbestos and lead
paint from compartments of the cutter, and a past assessment also found
that systems to produce fresh water and filter air for the crew were
barely functional. The Polar Star crew also told us that the heaters in
some operational spaces are inadequate to combat Antarctic
temperatures.
When combined with the challenges facing the acquisition portfolio
noted above, the Coast Guard will likely struggle to pay for the
maintenance of older assets, a situation that could lead to deferred
maintenance and lost operational capability.
Coast Guard Has Not Effectively Managed the Backlog of Shore
Infrastructure Projects
In February 2019, we found that the Coast Guard is confronted with
a costly backlog of shore infrastructure projects--such as piers,
docks, boat stations, air stations, and housing units--that is
contributing to concerns of affordability for its recapitalization and
related sustainment efforts.\28\ We found that 45 percent of the Coast
Guard's shore infrastructure was beyond its service life. For example,
at least 53 percent of piers--all of which the Coast Guard has
identified as mission-critical assets--were past their service lives as
of 2017.
---------------------------------------------------------------------------
\28\ GAO, Coast Guard Shore Infrastructure: Applying Leading
Practices Could Help Better Manage Project Backlogs of at Least $2.6
Billion, GAO-19-82 (Washington, D.C.: Feb. 21, 2019).
---------------------------------------------------------------------------
Also at this time, the Coast Guard rated its overall shore
infrastructure condition as mediocre. For example, the waterfront asset
line--which includes piers, wharfs, boathouses, and small boat lifts--
was rated as mediocre and showing signs of deterioration and
increasingly vulnerable to risk. The industrial asset line--which
includes maintenance shops, corrosion control facilities, and ship
lifts--was rated as poor to fair condition and mostly below standard.
This is in part because the eight of the nine assets that are part of
the Coast Guard Yard in Baltimore, Maryland--the only Coast Guard
facility that can perform dry dock maintenance on large Coast Guard
ships--are more than 5 years beyond their service life.
We also found that the Coast Guard had not provided accurate
information about its requirements-based budget targets for shore
infrastructure in its budget requests.\29\ According to the Coast
Guard, a requirements-based budget is an estimate of the cost to
operate and sustain its shore infrastructure portfolio of assets over
the life cycle of the asset, from initial construction or capital
investment through divestiture or demolition.\30\ We found that Coast
Guard targets for recapitalization of shore assets exceeded $290
million annually. However, its budget requests for fiscal years 2012
through 2021 ranged from about $5 million to about $99 million
annually, and allotments ranged from about $5 million to about $266
million annually (see fig. 5).
---------------------------------------------------------------------------
\29\ GAO-19-82.
\30\ According to Coast Guard officials, the Coast Guard's
requirements-based budget planning is based on industry standards and
aligns with the National Academy of Sciences benchmarks for sustainable
facility and infrastructure management. National Research Council of
the National Academy of Sciences, Stewardship of Federal Facilities: A
Proactive Strategy for Managing the Nation's Public Assets (Washington,
D.C.: National Academies Press, 1998).
---------------------------------------------------------------------------

Figure 5: Coast Guard's Allotments for Shore Procurement, Construction
and Improvements from Its Appropriations and Shore Infrastructure
Requirements-based Budget, Fiscal Years 2012 through 2021

Source: GAO analysis of Coast Guard documents. GAO-23-106948

Notes: Reported in current-year dollars. Beginning in fiscal year
2019, the President's budget requests refer to Procurement,
Construction and Improvements, which previously referred to
Acquisitions, Construction, and Improvements in the annual fiscal year
appropriations.

\a\ Beginning in 2016, the Coast Guard started using a requirements-
based budget to determine shore infrastructure budget needs and applied
it for the first time with its fiscal year 2017 submission. According
to this budgeting approach and Coast Guard officials, the Coast Guard's
targets for recapitalization of shore infrastructure exceeded $290
million annually as determined by the U.S. Coast Guard.

\b\ ``Amount requested'' represents the amount requested in the
President's budget, as identified in the Coast Guard's fiscal year
congressional justifications.

\c\ Values for 2013 reflect sequestration.

To address the backlog, we found that the Coast Guard could
increase budget transparency for shore infrastructure. Specifically, we
found the Coast Guard's budget requests had (1) not clearly identified
funding allotted for routine shore infrastructure maintenance needs,
and (2) not generally addressed deferred maintenance and repair
deficiencies, resulting in increases to its backlogs. In addition, the
Coast Guard had not included information in its Unfunded Priorities
Lists and other related reports that clearly articulated trade-offs
among competing project alternatives, as well as the impacts on
missions conducted from shore facilities in disrepair.\31\ This
information could help to inform decision makers of the risks posed by
untimely investments in maintenance and repair backlogs.
---------------------------------------------------------------------------
\31\ The term ``unfunded priority'' means a program or mission
requirement that (1) has not been selected for funding in the
applicable proposed budget; (2) is necessary to fulfill a requirement
associated with an operational need; and (3) the Commandant would have
recommended for inclusion in the applicable proposed budget had
additional resources been available, or had the requirement emerged
before the budget was submitted. 14 U.S.C. Sec. 5108.
---------------------------------------------------------------------------
We recommended that the Coast Guard include supporting details
about competing project alternatives and report trade-offs in
congressional budget requests and related reports. The Coast Guard
agreed with our recommendation, but noted that addressing this
recommendation is challenging due to limitations imposed by the Office
of Management and Budget and DHS. As of May 2023, the Coast Guard was
working toward publishing some related information on its website,
according to officials. Without such information about Coast Guard
budgetary requirements, Congress will lack critical information that
could help to prioritize funding to address the Coast Guard's shore
infrastructure backlogs.
Over the last decade, we have made 40 recommendations to DHS and
the Coast Guard on how to better manage the Coast Guard's acquisition
programs. Currently, we have 14 recommendations that remain open and
that the Coast Guard has not fully addressed--many discussed above--and
six others that have not been acted upon by the Coast Guard over
several years or overcome by events. Addressing the open
recommendations will help the Coast Guard better manage its
recapitalization efforts.
Additionally, we recommended two matters to Congress in June 2023.
Specifically, we recommended that you consider requiring the Coast
Guard to update its acquisition policy to establish that all
shipbuilding programs should (1) mature critical technologies--
including those that are developmental or that are novel in application
or form, fit, and function--to a TRL 7 (successfully demonstrating
critical technologies in a realistic environment) prior to a program's
contract award for detail design and construction; and (2) achieve 100
percent completion of basic and functional design, including the
routing of all distributive systems, prior to lead ship construction.
Doing so will help ensure that future Coast Guard acquisitions follow
leading practices and will help get these programs on a sound footing.
Chairman Webster, Ranking Member Carbajal, and Members of the
Subcommittee, this completes my prepared statement. I would be pleased
to respond to any questions that you may have at this time.

Mr. Webster of Florida. Thank you both for appearing, I
appreciate that. And now it turns to the time we ask questions.
I will start it off with 5 minutes' worth of questions.
And so, Admiral Thomas, can you provide an update on
programs toward a new hangar at Barbers Point to accommodate
the new C-130J aircraft?
Admiral Thomas. Thank you, Mr. Chairman, for the question,
and thanks for support, particularly at Barbers Point. I was
there recently, and we have a C-130 that can fit the nose in
the hangar and the tail is hanging out. That is suboptimal.
So, we do have about $46 million that's set aside for a
project for a hangar, and we have started that project to
install a membrane hangar that can hold two of our aircraft in
there, and we can do full maintenance. I don't know right now
if that is going to be enough money. We have to do an
environmental assessment. We do know there is PFAS on that
site. And as we get those results, we will be able to determine
how far that money will go. But we do appreciate continued
support on that project.
Mr. Webster of Florida. So, the Coast Guard has previously
communicated that it had all the resources it needed for the
construction of a new hangar. So, how would you explain that?
Admiral Thomas. Well, I think I mentioned in my statement
that the economic conditions that we see now are not what we
saw 4 years ago. There are all sorts of supply chain issues.
There are inflation issues that are driving the cost of
projects up across our portfolio and, as well, environmental
remediation is always a wild card that you can't really price
until you have stuck a shovel in the ground.
Mr. Webster of Florida. Compared to other programs, the
Waterways Commerce Cutter acquisition program has been on
track, which is very encouraging. Can you provide an update on
the milestones that program has achieved to date?
Admiral Thomas. Yes, thank you for the question.
So, we awarded that contract in October of last year. We
experienced some delays because of GAO protest, but we were
able to push ahead with the work on March 1st, or the notice to
proceed to the contractor, and they are proceeding well with
the detailed design. And as I mentioned in my statement, we
expect to begin construction next year.
Mr. Webster of Florida. So, are there milestones you are
trying to hit in the future that would keep it on track?
Admiral Thomas. Yes, sir, there are. Before we go to
construction, as Ms. Mak mentioned, we will do a design review,
final critical design review, and then we will do a production
readiness review. And we are on track to hit those milestones.
Mr. Webster of Florida. What would be the result or the
impact of operations and costs if the acquisition were delayed?
Admiral Thomas. Well, it depends on the nature of delay,
Congressman. If we were somehow caused to recompete this
contract, the delay would be about 2 years, the cost would be
about $150 million, and I would imagine we would be in the
exact same place we are today in 2 years, which, we would have
a contract award, and we would have appeals ongoing.
Mr. Webster of Florida. Ms. Mak, the Coast Guard appears to
have systemic issues in effectively executing major
acquisitions. Are there requirements placed on the Coast Guard,
either by regulation or statute, that impair the Coast Guard's
contracting and acquisition abilities and capabilities?
Ms. Mak. No requirements on legislation that I am aware of,
but I still think it is important that the Coast Guard focus on
doing the things the right way the first time around when it
comes to better business case and getting the design done
before construction, and figuring out where you are going to go
when it comes to what requirements, how you do that, and how
you manage the contractors, oversight.
Mr. Webster of Florida. So, is that happening?
Ms. Mak. I would say with the OPC and the PSC, based on our
recent reports, they could do a lot better when it comes to
design.
They are starting--OPC started construction for all four
ships, for the first four ships, well before the design. And we
are hoping--we have made recommendations to address for stage 2
that they complete that design because it is having a lot of
different challenges.
For instance, the davit, which is on the OPC, that is
critical. That is where they use the small boats to go down and
do their mission, and that--davits have found problems in terms
of, like, the electrical cabinet. It was supposed to fit on the
interior of the OPC, and now they can't fit that in the
interior, so, part of it has to go in the exterior and part of
it has to go in the interior. That is to power the davit.
So, if some of it is going to go outside instead of inside,
it has got a lot more weather, environmental issues that it has
got to address. So, it is better not to move on to stage 2
until you have those design issues addressed.
Mr. Webster of Florida. My time is expired. Thank you so
much for your answers, both of you, and I will turn it over to
Mr. Carbajal.
Mr. Carbajal. Thank you, Mr. Chairman.
Admiral Thomas, while there are several factors that have
contributed to the vessel acquisition issues that you are
having, shipyards' capacity and availability is certainly a
factor. That said, where would the Coast Guard vessel
procurement be without the Jones Act and the sustained
commercial business that the shipyards have?
Admiral Thomas. Thank you, Congressman, for the question.
I mean, the Coast Guard has long recognized the
significance of the Jones Act in ensuring our national security
in several different ways. One of those is ensuring we retain
an industrial base that can build and service our ships.
Our ships are getting larger. We are now in competition
with the Navy for drydocks. We need to invest in our own
capabilities at our Coast Guard Yard, but we certainly need the
Jones Act to remain in place so we retain that capability as a
Nation.
Mr. Carbajal. Thank you.
Ms. Mak, how can Congress better support the Coast Guard's
major acquisition programs moving forward?
Ms. Mak. I think, as I mentioned in my oral statement, that
programs generally tend to overpromise and underbid costs to
secure funding for the programs. To minimize that, Congress may
want to consider restricting or fencing off certain amounts of
funding until you see a sound, realistic business case.
Or Congress could require more information, which I know we
have talked about a little bit on the shore infrastructure
side, but it applies the same thing for acquisitions. They have
priorities for homeporting needs for the ongoing acquisitions
and recapitalization efforts such as the OPC, the PSC, the WCC,
and the information that is needed for Congress to provide the
appropriate information and funding is impacts to operations,
should the funding not be available.
And what are the timeframes? What are the impacts when you
don't get that funding? I think that is important for Congress
to be able to make better decisions.
Mr. Carbajal. Thank you. I have heard of underpromise and
overdeliver, but I have never really understood the opposite
approach, as you said takes place.
Admiral Thomas, the Army typically chooses to retire their
helicopters at 20,000 hours. Why does the Coast Guard refurbish
and use your helicopters well past the age?
And has the Coast Guard explored the option of purchasing
new helicopters?
Admiral Thomas. Well, thank you for the question. We are in
the midst of extending the service life on both our 65s and our
60s. We are able to do that organically at our Aviation
Logistics Center. We are able to take Navy hulls that don't
have many hours on them and put them into a Coast Guard
configuration.
While we haven't done the business case yet on purchasing
fully built-out helicopters or buying new hulls from the OEM,
and then we are changing them out ourselves, that is something
we would consider, although we are currently on a pace to
increase the size of our 60 fleet, which is about right for the
Service. It doesn't need to be accelerated.
Mr. Carbajal. Thank you.
Ms. Mak, do you have anything to add to that?
Ms. Mak. The largest concern about increasing their fleet
is going to come back to the infrastructure that is needed to
support that. There is definitely going to be expected growth
and significant investments in the facilities at both the
Aviation Logistics Center and at air stations. So, that needs
to be planned for and determined, what priorities when.
Mr. Carbajal. Thank you.
Mr. Chair, I am going to use my prerogative with my
remaining time to recognize my intern, Jasmine Oang, who is
here. She might be interested in the Coast Guard, so, she is
here checking you guys out, interviewing if you are the service
she might be interested in. So, I just want to recognize it.
Raise your hand, Jasmine.
Mr. Chair, with that I yield back.
Mr. Webster of Florida. Mr. Babin, you are recognized for 5
minutes.
Dr. Babin. Thank you, Mr. Chairman, I appreciate that. And
I also thank Admiral Thomas and Ms. Mak for being here.
My questions are going to be for you, Admiral Thomas.
But Ms. Mak, if you feel like you need to jump in, please
feel free.
In April of 2019, the Coast Guard issued a contract for the
construction of a new polar icebreaker. What is the status of
the design and construction of this vessel?
And are there outstanding issues with the proposed
propulsion system used for this vessel?
Please bring us up to speed, and give me your take on the
propulsion system issues.
Admiral Thomas. Thanks for your interest in our Polar
Security Cutter program. It is a significant program for our
Nation, as you well know.
We are 4 years into what was supposed to be a 1-year design
cycle on the Polar Security Cutter, and we are frustrated by
that. It is my top priority to get this project back on track.
We have a new primary contractor now, and I meet with the
senior leadership of that shipyard myself personally once a
week, along with my colleague from the Navy. Our focus is on
getting to design maturity and making sure the yard is ready
for production.
I was at the shipyard just recently to look at some of the
capital expenditures they had put in place in order to build
this ship. It is impressive, the robotic welding, the
preheating--just what it takes to bend the steel that thick.
At the end of the day, we need these ships, but we also
need the shipyard. It will bring tremendous capability to our
Nation. And as I mentioned, we have begun prototype
fabrication.
With regard to the propulsion system, I am not aware that
we have concerns. It will be a complex system. We are making
sure that we build the control systems ashore first so that we
can make sure it is fully integrated before we go on the ship.
But we have not yet identified specific concerns with our
propulsion system.
Dr. Babin. OK, thank you. I am also interested in
discussing some of the Coast Guard's air assets.
The Coast Guard is currently recapitalizing your vertical
lift platforms in addition to acquiring additional C-130s.
However, I am curious about the Coast Guard's lack of medium-
altitude, long-endurance assets such as the MQ-9. In my
district we proudly host the Air National Guard unit of the MQ-
9s, and they are extremely capable aircraft.
However, I recently found out that the MQ-9B, an upgraded,
all-weather and Maritime Domain-aware aircraft, is being
operated right now by the Japanese Coast Guard. These have the
capability to perform Maritime Domain Awareness, patrolling for
illegal shipping, drug interdiction, search and rescue, and
illegal trafficking.
I wanted to ask if the Coast Guard has any plans to
modernize its aviation fleet with assets such as the MQ-9
Reaper. And if not, why not, and is it simply a budgetary
issue?
Admiral Thomas. We are very much aware of the capabilities
of unmanned aerial systems. We employ them off of our National
Security Cutters. We intend to do the same off of our OPCs when
they are in the fleet, and we operate other MQ-9s with CBP.
We have just recently issued our unmanned systems strategy,
and that is the beginning of our efforts to build a program of
record that will bring capability like MQ-9s to the Coast
Guard. We do not yet have a program of record to do that.
Dr. Babin. OK, thank you very much. Last question: Can you
briefly mention the changes that you have made following the
Coast Guard's internal review of Operation Fouled Anchor?
We have got to protect our Coasties. And for our part, we
need to know the changes you have already implemented before
Congress starts developing any new recommendations. What
changes have you made?
How will you all do a better job of protecting Coasties
while ensuring that Congress is up to speed on important issues
and able to perform its oversight role?
Admiral Thomas. Thank you. We are very much focused, and
have been for a very long time, on improving the culture in the
Coast Guard and providing a safe environment for our members.
Thanks to the actions of Congress over the last several
years, and in concert with our sister services, we have been
focused on improvements to reporting processes, support to our
victims, investigation and accountability, and prevention
programs. And just quickly, some of the things we have done, we
have instituted a restricted and nonrestricted reporting
structure that gives options to victims on how they want to
report, we have taken care of what is called collateral
misconduct associated with sexual assaults, and we participate
in the DoD's CATCH program that allows us to identify repeat
offenders.
With regard to support to victims, we have professional
sexual assault response coordinators. We now have a sexual
assault prevention program office and program leadership. We
have volunteer and professional victims advocates in the field,
special victims councils out there to help through the legal
process, and we have a policy in place that allows members to
ask for a transfer if they or their spouses have been affected
by sexual violence.
Again, we have improved investigations and accountability.
Every single case of sexual assault must be investigated by our
Coast Guard Investigative Service.
And really, the key thing is to prevent these from
happening. And we have done a lot to build a culture of
prevention. We need to do more there. Other services have
thousands of people working for primary prevention in the
field. We have one at Coast Guard headquarters. We don't need
thousands, but we need dozens, and I am going to work hard to
get them in place.
Dr. Babin. Thank you, Admiral. I appreciate that very much.
I am out of time, Ms. Mak, and I am sorry you didn't get a
chance to say anything.
I yield back, Mr. Chairman.
Mr. Webster of Florida. OK. Well, the chair has been
notified that there is a vote series on the floor, and the
committee will stand in recess not subject to the call of the
chair, but we are going to call as soon as you get done. Don't
come back too giddy. It is not over yet.
[Laughter.]
Mr. Webster of Florida. But come back if you wanted to ask
questions.
So, we are in recess.
[Recess.]
Mr. Webster of Florida. I thank the witnesses for staying,
and now we are back at it again, and we will get done here.
Mr. Ezell, you are recognized for 5 minutes.
Mr. Ezell. Thank you, Mr. Chairman.
Vice Admiral Thomas and Ms. Mak, thank you for being here
today.
From protecting our ports and waterways to assisting our
communities during hurricanes, the Coast Guard is an
indispensable asset to southern Mississippi. I proudly
represent Port Security Guard 308, the Gulfport Coast Guard
Station, and the Coast Guard personnel at Pascagoula Naval
Station. I also take pride in representing the shipbuilders of
southern Mississippi that build many of the world-class vessels
the Coast Guard sails every day.
One of these vessels being constructed is the Polar
Security Cutter, which is essential to the project of our
sovereignty in the Arctic against our adversaries in China and
Russia. I have spoken with the shipyard in my district
constructing these vessels, and they have assured me they are
working diligently with the Coast Guard to expedite the
program. It brings me pride to say the workforce of southern
Mississippi will be responsible for building the most superior
and technologically advanced polar cutters in the entire world.
In addition, the Legend class National Security Cutters
utilized by the Coast Guard are built in my district at Ingalls
Shipbuilding. This cutter has been referenced as the most
capable and advanced cutter in the Coast Guard's fleet. Vice
Admiral Thomas, how vital has that Legend class cutter been in
the Coast Guard's operations?
Admiral Thomas. Well, thank you for your support of our
people in your home State and your district. I know they really
enjoy seeing you.
Look, the National Security Cutters have been game-
changing. They have been game-changing in our interdiction
missions, they have been game-changing in our missions in
competitive space with the Chinese and others. So, very, very
capable ships. We have been very happy with them. And we
really, really appreciate your support of that program.
Mr. Ezell. Yes, sir. Thank you, Admiral. I do have some
concerns regarding the MH-65 replacement program.
The Coast Guard plans to replace the MH-65 fleet with a
notably smaller number of MH-60s. This approach is centered on
the fact that the 60s are larger helicopters with a longer
range. However, I worry that downsizing the fleet would
dangerously limit the Coast Guard's ability to respond to
simultaneous emergencies like those that come after hurricanes.
Can you assure me that the new fleet of less MH-60s will
have the same response capabilities as the current mixed fleet?
Admiral Thomas. So, our current fleet of approximately 146
rotary-wing aircraft split between the 60s and 65s is roughly
one-third 60s and two-thirds 65s. We will transition to all 60s
at, at least, 127 aircraft. That number is not set. That is the
current program of record. We are currently required to do a
review of our aircraft laydown by the NDAA, and that work is
ongoing.
Mr. Ezell. Thank you. I also have some concerns with the
Coast Guard's intention to have that single model helicopter
fleet.
Last year, we saw the Army ground its entire fleet of
Chinook helicopters due to engine fire concerns. If an
unfortunate event like this were to happen with the 60s in the
future, the Coast Guard might be left with no helicopter
capabilities.
Moreover, I believe there are multiple air intercept
missions where a smaller helicopter would be a more practical
platform.
Vice Admiral, can you explain why you think a single model
helicopter fleet is advantageous for the Coast Guard?
Admiral Thomas. Yes. Again, thank you for the question.
I mean, there are a lot of advantages to operating a single
fleet. It is easier to maintain them, it is easier to train
people. You have full cross-decking of crews. I can't put a 65
qualified crewmember on a 60 right now. And the 60 is aircraft
that all of our sister services operate. There are thousands of
them in service. Our Airbus helicopters, we are the largest
operator of those helicopters right now.
So, we think the right thing to do is to move to a single
rotary-wing fleet. Thank you.
Mr. Ezell. Thank you, Admiral.
Mr. Chairman, I yield back.
Mr. Webster of Florida. Mr. Auchincloss, you are recognized
for 5 minutes.
Mr. Auchincloss. Thank you, Chairman.
Ms. Mak has laid forward in her written testimony, very
substantively and specifically, examples of the over-
concurrence of technology development, design, and construction
that seems to be a feature of the last 15 years in the Coast
Guard, and has, I think, been a primary driver--Ms. Mak, if you
would agree--in the cost overruns and delays.
Yet, Admiral, you have been mostly pointing to exogenous
factors--inflation, supply chain snarls, workforce--as being
the primary reason. Of course, everyone is facing those issues.
Would you accept that some of this is endogenous, that some of
this is because of Coast Guard decisionmaking and the over-
concurrence of those issues?
Admiral Thomas. What I would accept is the premise that if
you want to drive risk to cost and schedule during construction
to zero, you don't start until you have 100 percent design.
The problem is we have to manage more than just risk to
cost and schedule during construction. We have to manage the
operational risk. We have to manage the financial risk to the
contractor. And in both cases that Ms. Mak talked about, those
contractors would go broke if we were not able to begin
construction with a well-developed design, but not a fully
developed design.
Mr. Auchincloss. So, then, in particular, in her written
testimony, she has the example with the Offshore Patrol Cutter
that the GAO recommended that you wait until the davit gets to
TRL 7 before starting construction on OPC 3, and that the Coast
Guard actually concurred.
But now the Coast Guard has started construction on OPC 3,
and the davit is not at TRL 7. What explains that?
Admiral Thomas. Well, again, we would love to have all of
the critical technology at TRL 7 before we begin construction.
We have a mitigation plan for the davits, and we are
comfortable enough with that mitigation plan that we need to
move ahead with the construction.
The Nation needs these ships. Our----
Mr. Auchincloss [interrupting]. I agree that the Nation
needs the ships, but it sounds like the Nation is not getting
these ships partly because the technology development is
underdeveloped, relative to the design and construction
timeline. So, we are all in a hurry here, but it doesn't seem
like we are going--there is an old saying in the Marine Corps,
``Slow is smooth, smooth is fast.'' And it seems like we are
not being very smooth here, and hence we are not being very
fast.
Admiral Thomas. So, we are confident that the davit will be
at the right TRL level when we need it on the current
construction timeline.
Mr. Auchincloss. Ms. Mak, are you confident in that?
Ms. Mak. No, obviously not. That is why we made the
recommendation that we did.
I mean, in general, when it comes to acquisitions,
accelerating plans without the appropriate knowledge is going
to cause a lot of rework and extend your schedule anyway. It
does not equate to the ability to deliver on those plans.
Mr. Auchincloss. And has that rework leading to delays been
a feature since 2007 of the Coast Guard procurement plans?
Ms. Mak. I would say as far back as I have been looking at
them since 2017, yes.
Mr. Auchincloss. And now it seems like we are seeing the
same thing with the polar cutters here, where design is not yet
complete prior to construction for the lead ship in line with
the recommendation that you have made.
Admiral, what are the reasons why you are confident that,
even though you are more concurrent than has been recommended,
that you are going to be able to do it?
Admiral Thomas. Well, again, there are a lot of risks that
we are balancing.
I agree, if we want to drive risk to cost and schedule
during construction to zero, we would probably not begin
construction until we are 100 percent designed. But we have
mitigation measures in place. We have authorized a number of
special studies that have allowed the contractor to understand
what it is going to take to build this ship with this material
that they have never worked with before. We have helped them
with capital investments that will allow them to work with the
material, with things like robotic welders and induction
heaters for the material. And we are moving ahead with
prototype fabrication, prototype module fabrication, that will
allow them to continue their learning.
We have not yet begun construction on the polar cutter.
Mr. Auchincloss. Ms. Mak, do you think that these measures
are going to be sufficient?
Ms. Mak. At this point it is really hard to tell, because
the Polar Security Cutter--they are saying that it is going to
be delivered by 2027. But as of right now, the contractor does
not have sufficient business systems to be able to address the
schedule. So, it is optimistic.
We don't think the data is very accurate at this point. So,
until we get a little more accurate data, we don't know if they
are going to be able to meet that timeline, either. I mean,
back in 2018, when we looked at it, we were supposed to have an
icebreaker, a heavy polar icebreaker, by 2024.
Mr. Auchincloss. Right. Admiral, I would submit that it
seems like the Coast Guard is not fully internalizing the
lessons of the last 15 years. Is there a big learning that you
have taken forward from what has happened in the last 15 years
that you are going to adopt to do things differently?
Admiral Thomas. Well, let me just address the delivery
schedule.
We are currently doing the work with a new contractor to
re-baseline this project so that we can truly understand cost
and schedule, and we will have those numbers. There is no
question the schedule has slipped, probably into at least 2028,
and the costs will rise.
Mr. Auchincloss. But what is your biggest learning over the
last 15 years that you are going to do differently?
Admiral Thomas. I think Ms. Mak hit on what needs to be
done differently in terms of how funding comes to the services
for major acquisition, and----
Mr. Auchincloss [interrupting]. But why would we say more
money is the answer when part of the problem clearly is in the
concurrency of technology, development, design, and
construction that Ms. Mak has pointed out? That is not a money
problem. That sounds like a program management problem.
Admiral Thomas. Again, the issue of managing risk across
the entire acquisition as opposed to managing only risk
associated with cost and construction--or cost and schedule
during construction is the challenge.
Mr. Auchincloss. The chairman has been indulgent, I
appreciate it. Thank you.
Mr. Webster of Florida. The gentleman yields back. No one
else is here to ask a question, but I have got one, just one
more.
Turning to the Offshore Patrol Cutter program, the Coast
Guard has long stated that after completion of the initial ship
in the class, it must build two per year in order to limit the
loss of the mission capabilities as Medium Endurance Cutters go
offline. Fiscal year 2022-2023 capital improvement plans
envision that a full rate of production will happen. Is that
going to happen? That is the real question.
Admiral Thomas. Well, the full rate of production will
happen for stage 1, which will be delivering cutters on 1-year
centers. In stage 2, we will reach a full rate of production of
two per year. And from what I have seen of that particular
shipyard, they may actually produce more than that.
But your concern about the Medium Endurance Cutters is a
valid one. Last year, we lost about 3\1/2\ cutters' worth of
time due to unscheduled repairs, which is why it is so
important that we get the OPCs into our fleet.
Mr. Webster of Florida. Do you have anything to add to
that, Ms. Mak?
Ms. Mak. Nothing other than, yes, they need this as fast as
they can do it, but they've got to do it right the first time.
Before you build more OPCs on the stage 2, make sure you have
some of the design issues addressed.
I mean, like I mentioned, that electrical cabinet which is
in the davit, if you don't have that right, you are going to go
back and you are going to have to redo all the ones you have
already done. That is going to take more time, and it is going
to take a lot more money.
Mr. Webster of Florida. Thank you so much. Well, I don't
think there is any other testimony. Any other questions?
Do you have any other questions?
I gave you a little extra time [to Mr. Auchincloss].
[Laughter.]
Mr. Auchincloss. I just want to let the admiral one more
time--is the biggest learning of the last 15 years on your
design, tech development, and construction process really just
that you need more money? There is no other learning that you
want to present to Congress?
Admiral Thomas. I think the biggest learning that the Coast
Guard has had in our acquisition history has to do with the
system integrator and the use of system integrators, which we
tried and we will never do again.
Mr. Auchincloss. Thank you.
Mr. Webster of Florida. OK. Any other questions?
Thank you both for appearing. I appreciate your testimony,
and I ask unanimous consent that the record of today's hearing
remain open for such time as our witnesses have provided
answers to any questions that may be submitted to them in
writing.
Without objection, show that ordered.
I also ask unanimous consent that the record remain open
for 15 days for any additional comments or information
submitted by the Members or witnesses to be included in the
record of today's hearing.
Without objection, show that ordered.
The subcommittee stands adjourned.
[Whereupon, at 3:42 p.m., the subcommittee was adjourned.]

Submissions for the Record

----------

Prepared Statement of Hon. Rick Larsen of Washington, Ranking Member,
Committee on Transportation and Infrastructure
Thank you, Chair Webster, for holding this important oversight
hearing.
Operation Fouled Anchor
Before we get into the substance of today's hearing, I want to take
a moment to address Operation Fouled Anchor.
In 2020, the Coast Guard completed a 6-year secret investigation
into sexual assaults at the Coast Guard Academy between 1990 and 2006.
The results and recommendations of Operation Fouled Anchor were hidden
from Congress, the public and not distributed widely within the Coast
Guard.
While I'm still parsing the details of the investigation and
awaiting documentation, the Coast Guard's lack of transparency is
unacceptable. Congress and, more importantly, members of the Coast
Guard cannot trust the system if these types of violent crimes are kept
behind closed doors.
Congress cannot conduct oversight and the Coast Guard cannot
improve its Sexual Assault Prevention Program when the results and
recommendations of a six year/20,000 hour operation are kept secret.
The Coast Guard can and must do better.
Coast Guard Cutter Acquisitions
Today's hearing is an opportunity for this Committee to receive an
update on the Coast Guard's now 16-year-old recapitalization plan which
was enacted in 2007. Included in this plan, and the subsequent update
in 2017, are National Security Cutters, Fast Response Cutters, Offshore
Patrol Cutters, Polar Security Cutters, Waterways Commerce Cutters, and
HC130J aircraft.
Several of these acquisition programs have gone well but others
have faced significant cost increases and delivery delays.
For instance, after awarding the Service's largest acquisition
contract to a shipyard that had never had a government contract, the
Coast Guard determined that the program was so far delayed and over
budget that it recompeted the contract and awarded the construction of
all but four cutters to another shipyard.
The Polar Security Cutter is facing similar issues. The original
projected delivery date was 2024 but the detailed design remains at 50
percent and the Coast Guard has been unable to commit to a delivery
date in this decade.
While it's appropriate to scrutinize the Coast Guard's decisions,
we in Congress must consider our own actions and the structural
impediments facing the Service. Inadequate resources and irregular
procurement programs result in cutting corners and inexperience.
We cannot deliver vessels without access to shipyards.
Diminished shipbuilding capacity as well as increased competition
from the Navy has left the Coast Guard with limited options--we must
all work together to resolve this shortage to keep our seas safe.
While I'm confident the Coast Guard will complete the ongoing
recapitalization effort, I am concerned that Congress and the
Administration are not providing the resources to support the women and
men who operate these vessels and aircraft.
Shoreside Infrastructure Backlog
The growing shoreside infrastructure backlog has real world
consequences for Coasties. During my recent visit to the Coast Guard
Academy, I saw firsthand the unacceptable living conditions of cadets.
No cadet should live in fear that moving their desk chair the wrong way
could scratch the floor and expose them to asbestos, but that is the
reality.
Now that Congress has funded the construction of assets, we need to
ensure that Coasties get the shoreside support they deserve. This
includes workstations, housing, health care, and childcare. We need to
do better.
Ms. Mak's Retirement and Closing
I'd like to end by recognizing Ms. Marie Mak testifying before us
today from the GAO. Your distinguished 37-year career in government
service has resulted in a stronger Navy, a stronger Coast Guard and a
better-informed Congress which has led to better laws. Thank you for
your service and I hope you enjoy your next chapter.
Thank you, Chairman Webster, and I look forward to today's
discussion.

Appendix

----------

Questions from Hon. Mike Ezell to Vice Admiral Paul F. Thomas, Deputy
Commandant for Mission Support, U.S. Coast Guard

Question 1. The PSU 308 is a deployable special forces unit that is
specifically equipped to provide support to any port in the world in
under 96 hours. However, they have been stationed in trailers on the
Stennis Airport grounds for the past ten years and there is uncertainty
on their ability to stay in this location in the future. Can you please
provide the Coast Guard's plan to rehouse this unit in a permanent
facility without interrupting the unit's mission?
Answer. The Coast Guard is conducting the planning required to
relocate Port Security Unit 308 into a permanent facility. The general
timeline to complete a project from concept, through planning,
budgeting, design, and execution is approximately eight years and
largely depends on the timing of Major Shore Procurement Construction &
Improvement funding.

Question 2. The Coast Guard's stated rotary-wing plan is to phase
out the standard shipboard-deployable, short range recovery helicopter
in favor of an all medium-range recovery helicopter fleet. The medium-
range recovery helicopter requires significant modifications and
additional equipment to deploy shipboard. Has the Coast Guard conducted
operational testing and evaluation to ensure it effectively operates
on, and in conjunction with, all USCG assets capable of supporting
rotary-wing aircraft and mission profiles? What were the results?
Answer. The Coast Guard can operate the MH-60T from seven of its 13
Famous Class Medium Endurance Cutters and from all its National
Security Cutters (NSC). Additionally, the Coast Guard designed its
newest medium endurance and polar ice-breaking cutters, the Offshore
Patrol Cutter (OPC), and the Polar Security Cutter, to enable MH-60T
operations. The Coast Guard successfully completed operational testing
and evaluation of blade-fold, tail-fold equipment and will configure
the entire MH-60T fleet to be blade-fold, tail-fold capable to ensure
that deployed MH-60Ts will fit into hangars on both the NSC and the
OPC.

Question 3. Has the Coast Guard explored new, more cost-effective
aircraft currently in production to improve budget challenges, rather
than continuing to reinvest in aging and costly legacy platforms? If
not, would the Coast Guard consider conducting an analysis of
alternatives of existing DoD inventory aircraft to enhance operational
capabilities and reduce current personnel and budget constraints?
Answer. The Coast Guard is actively exploring new rotary wing
aircraft in concert and lock step with the U.S. Department of Defense
Future Vertical Lift Program (FVL). The Service looks forward to FVL
aircraft joining our ranks and retiring aging and costly legacy
platforms.

Questions from Hon. Hillary J. Scholten to Vice Admiral Paul F. Thomas,
Deputy Commandant for Mission Support, U.S. Coast Guard

Question 2. Last year's Coast Guard authorization bill directed the
Coast Guard to establish and maintain a database on Great Lakes
icebreaking operations and commercial vessel and ferry voyages during
ice season. This has the potential to be a useful tool not only for the
Coast Guard, but also for organizations that rely on its capabilities,
such as our Lake Carriers. Where is the Coast Guard on establishing
this database?
Answer. The Coast Guard is actively working to develop and refine
the technical requirements of the database. As required by the Coast
Guard Authorization Act (CGAA) of 2022, the Coast Guard consulted
operators of Great Lakes commercial vessels to gather input on current
industry data collection, methodology used to assess the impact of
delays caused by ice conditions, and ways industry can contribute to
the Coast Guard data collection.
While the database development efforts started upon enactment of
the CGAA, the mild ice season this past winter/ice season (2022-2023)
did not afford the Coast Guard opportunities to collect or analyze the
necessary data to construct requirements based on industry's input.
Looking forward to the upcoming winter/ice season (2023-2024), the
Coast Guard will continue working with industry to collect required
data and use existing enterprise applications to refine the database's
technical requirements. This effort will assist in the future
acquisition of a sustainable database solution.

Questions from Hon. Rick Larsen on behalf of Hon. Patrick Ryan to Vice
Admiral Paul F. Thomas, Deputy Commandant for Mission Support, U.S.
Coast Guard

Question 1. How did the United States Coast Guard (USCG) come to
decide to redefine the boundaries of the Port of New York?
Answer. The Coast Guard did not redefine the Port of New York's
boundaries; it reaffirmed codified authorities and regulations. Since
the language in Marine Safety Information Bulletin (MSIB) 2015-14 was
unclear, the Coast Guard, via MSIB 2023-01, clarified the Port of New
York's definition and applicable regulations.

Question 2. How does the new definition fit into USCG's broader
responsibility to regulate anchoring in the Hudson in a way that
protects navigational safety for commercial vessels, the interests of
other waterway users, and the environment?
Answer. The Coast Guard did not redefine the Port of New York's
boundaries; it reaffirmed codified authorities and regulations. Section
8437 of the Elijah E. Cummings Coast Guard Authorization Act of 2020
suspended the establishment of new anchorage grounds on the Hudson
River between Yonkers, NY and Kingston, NY. As such, the Coast Guard
has no legal authority to establish new anchorage grounds in this
region.

Question 3. Why was this decision made when the Port and Waterway
Safety Assessment (PAWSA) in 2017 did not find that additional
commercial anchorages were needed for navigational safety?
Answer. The Coast Guard currently has no legal authority to
establish any new anchorages in this region. Section 8437 of the Elijah
E. Cummings Coast Guard Authorization Act of 2020 suspended the
establishment of new anchorage grounds on the Hudson River between
Yonkers, NY and Kingston, NY.
The Coast Guard published Marine Safety Information Bulletin (MSIB)
2023-01 to clarify the Port of New York's definition and applicable
regulations.

Question 4. How is the USCG working in collaboration with local
government and non-governmental organizations to ensure that its
activities in the region support the abundant and highly-prized natural
resources in the river that are critical to the economy and way of life
of waterfront communities and create a safe environment for all users
of the river?
Answer. To address issues that may include the safety, security,
mobility, and environmental protection of a port or waterway, the Coast
Guard leverages its Harbor Safety Committees to collaborate amongst and
with local and non-governmental organizations in the area. Membership
is open to all interested parties and typically comprised of
representatives of governmental agencies, maritime labor, industry
organizations, and public interest groups.
The Coast Guard collaborates extensively with the Hudson River
Safety Navigation and Operations Committee (HRSNOC) concerning the
safe, secure, and environmentally sound usage of the Hudson River. The
HRSNOC is a consensus-driven forum for coordination, collaboration, and
decision making among private and public stakeholders on the Hudson
River.

Question 5. In the Coast Guard's work with local government and
non-governmental organizations, how has it sought to balance the voices
of stakeholders to ensure that environmental and ecological goals in
the Hudson River are addressed?
Answer. The Coast Guard works extensively with the HRSNOC
concerning the safe, secure, and environmentally responsible usage of
the Hudson River. The HRSNOC is a consensus-driven forum for
coordination, collaboration and decision making among private and
public stakeholders on the Hudson River.

Question 6. What studies were conducted before the geographic
limits of the Port of New York were changed?
Answer. The Coast Guard did not redefine the Port of New York's
boundaries; it reaffirmed codified authorities and regulations. Since
the language in MSIB 2015-14 was unclear, the Coast Guard, via MSIB
2023-01, clarified the Port of New York's definition and applicable
regulations.

Question from Hon. Mike Ezell to Marie A. Mak, Director, Contracting
and National Security Acquisitions, U.S. Government Accountability
Office

Question 1. Section 11233 of the Don Young Coast Guard
Authorization Act of 2022 tasks the GAO with assessing USCG's past and
future efforts to upgrade or recapitalize its aviation fleets. Has GAO
begun the study, how is it progressing, and have there been any initial
findings shared with the USCG?
Answer. GAO began the review of the Coast Guard's aircraft
operational availability and modernization in late calendar year 2022.
We have completed much of our planned field work, and are now in the
early stages of developing a draft report. We have not shared our
initial findings with the Coast Guard. We plan to do so during our exit
conference with the Coast Guard this fall. Please contact Heather
MacLeod, Director in our Homeland Security and Justice team, if you
have any further questions about this topic area.

Questions from Hon. Hillary J. Scholten to Marie A. Mak, Director,
Contracting and National Security Acquisitions, U.S. Government
Accountability Office

Question 1. As we work to productively recapitalize assets and
modernize the Coast Guard's capabilities, it's incumbent upon Congress
to ensure American tax dollars are spent wisely so we set our Coast
Guard up for success for future generations. As a Michigander, I know
how much my state's economy and our nation's economy depends on safe
and sustainable Great Lakes.
Question 1.a. We have heard that the construction of a new heavy
Great Lakes icebreaker will take 10 years, yet the need is now. What
can Congress do to expedite the delivery of this much needed asset?
Question 1.b. To follow up, if Congress funds the additional $20
million for the Great Lakes icebreaker in the Coast Guard's Unfunded
Priorities List, would this help deliver this icebreaker faster than
just funding the $55 million in the budget request?
Answer to 1.a. & 1.b. In February 2019, we found that the annual
Unfunded Priorities List does not clearly articulate prioritization
decisions, including information about trade-offs among competing
project alternatives, as well as the impacts on missions conducted from
projects that had not been prioritized in previous years.\1\ According
to Coast Guard officials, and as we previously reported, such
information is not included in the Unfunded Priorities List because it
is not statutorily required.\2\ These information shortcomings are
consistent with previous findings and recommendations that the DHS
Office of Inspector General has made.\3\
---------------------------------------------------------------------------
\1\ GAO, Coast Guard Shore Infrastructure: Applying Leading
Practices Could Help Better Manage Project Backlogs of At Least $2.6
Billion, GAO-19-82 (Washington, D.C.: Feb. 21, 2019).
\2\ GAO, Coast Guard Acquisitions: Actions Needed to Address
Longstanding Portfolio Management Challenges, GAO-18-454 (Washington,
D.C.: July 24, 2018).
\3\ Department of Homeland Security Office of Inspector General,
Maintenance, Rehabilitation, and Upgrading of Shore Facilities in
Support of United States Coast Guard Missions, OIG-08-24 (Washington,
D.C.: February 14, 2008).
---------------------------------------------------------------------------
However, regardless of whether Congress funds the Great Lakes
icebreaker, the Coast Guard needs to provide a good business case,
which includes setting firm requirements. Further, the Coast Guard
needs to have the adequate knowledge to move through the acquisition
cycle--this means reducing concurrency between technology development,
design, and construction. If technologies are not fully developed and
the design stabilized prior to construction, this could lead to further
delays in the Coast Guard obtaining an icebreaker to meet mission needs
in the Great Lakes. Instead of funding the icebreaker, potentially
before other Coast Guard priorities, it might be beneficial for
Congress to consider requiring Coast Guard to complete these
activities, such as determining the requirements, by an established
timeframe.
The fiscal year 2023 National Defense Authorization Act included a
provision for GAO to review Coast Guard icebreaking operations in the
Great Lakes, including assessing proposed standards for icebreaking. We
plan to report on this topic around winter 2024. However, the Coast
Guard should be able to respond about its acquisition and construction
timelines, as well as the total costs associated with a new heavy
icebreaker. Please contact Heather MacLeod, Director in our Homeland
Security and Justice team, if you have any further questions about this
topic area.

Questions from Hon. Rick Larsen on behalf of Hon. Patrick Ryan to Marie
A. Mak, Director, Contracting and National Security Acquisitions, U.S.
Government Accountability Office

Question 1. How did the United States Coast Guard (USCG) come to
decide to redefine the boundaries of the Port of New York?
Answer. GAO has not conducted any audit work in this area, and
therefore cannot provide a response.

Question 6. What studies were conducted before the geographic
limits of the Port of New York were changed?
Answer. GAO has not conducted any audit work in this area, and
therefore cannot provide a response.

[all]