Coast Guard
Key Management and Budget Challenges for Fiscal Year 2005 and Beyond Gao ID: GAO-04-636T April 7, 2004As the lead federal agency for maritime homeland security within the Department of Homeland Security, the Coast Guard is facing extraordinary, heightened responsibilities to protect America's ports, waterways, and waterside facilities from terrorist attacks. At the same time, the Coast Guard remains responsible for many other programs important to the nation's interests, such as conducting search and rescue and protecting important fishing grounds. Its expanded responsibilities come at a time when budget resources are increasingly constrained, making prioritization among competing agencies and programs an even more critical factor in congressional decision-making. This testimony specifically addresses (1) the most recent trends in both resource usage and performance results for the Coast Guard's homeland security and non-homeland security programs; (2) challenges the agency faces as it proceeds with its Deepwater acquisition program to replace or modernize its key legacy cutters and aircraft; and (3) an overview of the President's fiscal year 2005 budget request for the Coast Guard, focusing on several areas of particular congressional interest.
Resource usage for Coast Guard assets--its cutters, boats, and aircraft-- was up almost 40 percent from the pre-September 11th baseline. Homeland security programs, such as the ports, waterways, and coastal security program, have been more likely to see increases in usage, while nonhomeland security programs, such as living marine resources, remain below pre-September 11th levels. Although resource usage changed substantially for many of these programs, performance results generally improved or remained largely the same. The stable or improved performance results were attributed mainly to operational efficiencies (e.g., improved technology, improved tactics, stronger partnerships, and improved intelligence). However, the Coast Guard has limited data and no systematic approach to explain or account for the effects of these factors. Without such an approach and supporting data to link its resources and performance results, the agency may be missing further opportunities to increase productivity and efficiency to ensure best use of its funds. Some of the Coast Guard's legacy Deepwater cutters, patrol boats, and aircraft are increasingly unreliable and costly to maintain, and timely and effective implementation of the agency's ongoing Deepwater acquisition program to modernize these assets is crucial in order to reverse this trend. However, the Coast Guard faces serious challenges to keep the Deepwater program on schedule and within planned budget estimates. We estimate that to return the program to its original 20-year completion schedule will cost about $2.2 billion more than the Coast Guard estimated when the program was implemented in 2002. Also, available program funding, which has been less than the Coast Guard planned, may have to be used, in part, to address critical maintenance needs of the legacy assets, diverting funds otherwise intended for future Deepwater replacements and upgrades. Moreover, recent GAO work raised serious concerns about the management and oversight of the program, including the quality of the Coast Guard's assessment of the program contractor's performance and the uncertainty as to whether the Coast Guard would be able to effectively control costs. The President's fiscal year 2005 budget request of about $7.5 billion for the Coast Guard represents about an 8 percent increase over last year. It includes $5.2 billion in operating expenses and $943 million for its capital acquisition budget. Most of the new initiatives outlined in its operating expense budget are targeted for homeland security initiatives, including $102 million for implementation of the Maritime Transportation Security Act of 2002. Aside from the new initiatives, two other efforts in the budget request may require further attention. The Coast Guard's multi-mission stations are still experiencing a heavy workload for station personnel because of increased homeland security responsibilities. Also, the Coast Guard's Rescue 21 program, which will replace the Coast Guard's current antiquated communication system, faces possible delays because of software system development problems.
GAO-04-636T, Coast Guard: Key Management and Budget Challenges for Fiscal Year 2005 and Beyond
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Testimony:
Before the Subcommittee on Oceans, Fisheries, and Coast Guard,
Committee on Commerce, Science, and Transportation, U.S. Senate:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 2:30 p.m. EDT:
Wednesday, April 7, 2004:
COAST GUARD:
Key Management and Budget Challenges for Fiscal Year 2005 and Beyond:
Statement of Margaret T. Wrightson, Director
Homeland Security and Justice Issues:
GAO-04-636T:
GAO Highlights:
Highlights of GAO-04-636T, a report to the Subcommittee on Oceans,
Fisheries, and Coast Guard, Committee on Commerce, Science, and
Transportation, U.S. Senate
Why GAO Did This Study:
As the lead federal agency for maritime homeland security within the
Department of Homeland Security, the Coast Guard is facing
extraordinary, heightened responsibilities to protect America‘s ports,
waterways, and waterside facilities from terrorist attacks. At the same
time, the Coast Guard remains responsible for many other programs
important to the nation‘s interests, such as conducting search and
rescue and protecting important fishing grounds. Its expanded
responsibilities come at a time when budget resources are increasingly
constrained, making prioritization among competing agencies and
programs an even more critical factor in congressional decision-making.
This testimony specifically addresses (1) the most recent trends in
both resource usage and performance results for the Coast Guard‘s
homeland security and non-homeland security programs; (2) challenges
the agency faces as it proceeds with its Deepwater acquisition program
to replace or modernize its key legacy cutters and aircraft; and (3) an
overview of the President‘s fiscal year 2005 budget request for the
Coast Guard, focusing on several areas of particular congressional
interest.
What GAO Found:
Resource usage for Coast Guard assets”its cutters, boats, and aircraft”
was up almost 40 percent from the pre-September 11th baseline. Homeland
security programs, such as the ports, waterways, and coastal security
program, have been more likely to see increases in usage, while non-
homeland security programs, such as living marine resources, remain
below pre-September 11th levels. Although resource usage changed
substantially for many of these programs, performance results generally
improved or remained largely the same. The stable or improved
performance results were attributed mainly to operational efficiencies
(e.g., improved technology, improved tactics, stronger partnerships,
and improved intelligence). However, the Coast Guard has limited data
and no systematic approach to explain or account for the effects of
these factors. Without such an approach and supporting data to link its
resources and performance results, the agency may be missing further
opportunities to increase productivity and efficiency to ensure best
use of its funds.
Some of the Coast Guard‘s legacy Deepwater cutters, patrol boats, and
aircraft are increasingly unreliable and costly to maintain, and timely
and effective implementation of the agency‘s ongoing Deepwater
acquisition program to modernize these assets is crucial in order to
reverse this trend. However, the Coast Guard faces serious challenges
to keep the Deepwater program on schedule and within planned budget
estimates. We estimate that to return the program to its original 20-
year completion schedule will cost about $2.2 billion more than the
Coast Guard estimated when the program was implemented in 2002. Also,
available program funding, which has been less than the Coast Guard
planned, may have to be used, in part, to address critical maintenance
needs of the legacy assets, diverting funds otherwise intended for
future Deepwater replacements and upgrades. Moreover, recent GAO work
raised serious concerns about the management and oversight of the
program, including the quality of the Coast Guard‘s assessment of the
program contractor‘s performance and the uncertainty as to whether the
Coast Guard would be able to effectively control costs.
The President‘s fiscal year 2005 budget request of about $7.5 billion
for the Coast Guard represents about an 8 percent increase over last
year. It includes $5.2 billion in operating expenses and $943 million
for its capital acquisition budget. Most of the new initiatives
outlined in its operating expense budget are targeted for homeland
security initiatives, including $102 million for implementation of the
Maritime Transportation Security Act of 2002. Aside from the new
initiatives, two other efforts in the budget request may require
further attention. The Coast Guard‘s multi-mission stations are still
experiencing a heavy workload for station personnel because of
increased homeland security responsibilities. Also, the Coast Guard‘s
Rescue 21 program, which will replace the Coast Guard‘s current
antiquated communication system, faces possible delays because of
software system development problems.
www.gao.gov/cgi-bin/getrpt?GAO-04-636T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Margaret Wrightson at
(415) 904-2200 or wrightsonm@gao.gov.
[End of section]
Madame Chair and Members of the Subcommittee:
I am pleased to be here today to discuss the President's fiscal year
2005 budget request for the Coast Guard and key management and
operational challenges the agency faces in this and future budgets. As
the lead federal agency for maritime homeland security within the
Department of Homeland Security (DHS), the Coast Guard is facing
extraordinary, heightened responsibilities to protect America's ports,
waterways, and waterside facilities from terrorist attacks and from
becoming an avenue for terrorists to bring weapons of mass destruction
into the country. The Coast Guard also remains responsible for many
other programs important to the nation's interests, such as helping
stem the flow of illegal drugs and illegal migration, protecting
important fishing grounds, and responding to marine pollution. These
expanded responsibilities come at a time when budget resources are
increasingly constrained, making prioritization among competing
agencies and programs an even more critical factor in congressional
decision-making.
To help meet its increased homeland security responsibilities and
restore activity levels for its traditional programs, the Coast Guard
received substantial budget increases from fiscal years 2001 to 2004.
This trend continued with the President's fiscal year 2005 budget
request for the Coast Guard of about $7.5 billion, an 8 percent
increase over the previous year. Still, despite the large budget
increases since September 11, there is much congressional concern about
whether the Coast Guard can continue to meet all of its
responsibilities, given both the increased emphasis on and additional
resources required for homeland security, and the agency's heavy
reliance on its fleet of larger ships and mainstay aircraft, many of
which are now aged and technologically obsolete. In addition, our past
work[Footnote 1] has shown that notwithstanding substantial increases
in the Coast Guard's budget to accommodate its increased
responsibilities, the Coast Guard's emphasis on homeland security
reduced the level of resources devoted to non-homeland security
programs.
My testimony today, which is based on recently completed work,
addresses three topics: (1) the most recent trends in both resource
usage and performance results for the Coast Guard's homeland security
and non-homeland security programs; (2) challenges the agency faces as
it proceeds with its Deepwater acquisition program to replace or
modernize its key legacy cutters and aircraft; and (3) an overview of
the President's fiscal year 2005 budget request for the Coast Guard,
focusing on several areas of particular congressional interest. We
conducted our work from March 2004 to April 2004 in accordance with
generally accepted government auditing standards.
In summary, our work shows the following:
* Resource usage--as measured by the number of hours the Coast Guard's
cutters, boats, and aircraft were used to perform its missions--were up
almost 40 percent from the pre-September 11 baseline. Resource hours
for homeland security programs benefited most, while hours for non-
homeland security programs generally declined. In contrast, performance
results for both homeland and non-homeland security programs generally
improved or remained largely unchanged. The Coast Guard believes that
the lack of a clear relationship between resource use and performance
results is attributable to both internally and externally driven
factors. According to the Coast Guard, the use of new technologies,
better operational tactics, improved intelligence, and stronger
partnering efforts have contributed to stable or improving performance
results despite declines in resource hours used for some programs. The
Coast Guard also pointed to external factors beyond the agency's
control, such as a surge of undocumented migrants attempting to enter
the United States by maritime routes, as affecting the results.
Although our work lends some support to these explanations, the Coast
Guard has limited data and no systematic approach to explain or account
for the effects of these factors. Without such an approach and
supporting data to link its resources and performance results, the
agency may be missing further opportunities to increase productivity
and efficiency to ensure the best use of its funds.
* The most significant challenge the Coast Guard faces as it moves
forward with its Deepwater program is keeping the program on schedule
and within planned budget estimates through a well-managed and
adequately funded effort. Adding to the challenge is the fact that key
legacy assets are becoming increasingly unreliable and costly to
maintain. This could put the Coast Guard at risk of expending funds to
repair deteriorating legacy assets that otherwise had been planned for
Deepwater modernization initiatives. This action could potentially
further delay the program and increase total program costs. For
example, the Coast Guard is using Deepwater funds to address recent
engine system problems on mainstay helicopters used for search and
rescue, and law enforcement. More attention to contract management and
oversight, and stable funding will be needed if the Coast Guard is to
successfully manage these risks. During the first 2 years of the
Deepwater program, after the contract was signed, the Coast Guard did
not get the funding originally planned, and now the program is behind
schedule. The Coast Guard estimates that a sustained funding level of
$795 million over the remaining years of the program will be necessary
to get the program back onto its original 20-year schedule. In nominal
dollars, this amount represents about a $2.2 billion escalation in
costs over the earlier $15 billion estimate. Aside from funding issues
and problems with legacy assets, our recent work has also raised
concerns about the Coast Guard's management of the program. Among the
issues we identified were problems with the quality of the Coast
Guard's assessment of the contractor's performance and the uncertainty
as to whether the Coast Guard would be able to effectively control
costs.
* The President's fiscal year budget request for the Coast Guard
represents an 8 percent increase over last year, and new initiatives
continue to focus on the Coast Guard's homeland security programs. Of
the new initiatives outlined in its operating expense budget, for
example, about 90 percent of the funding was for homeland security
initiatives. The largest, totaling almost $102 million, is targeted for
the cost of implementing the Maritime Transportation Security Act of
2002. This money would add about 500 new personnel (full-time-
equivalent) to approve vessel and facility security plans, ensure plans
are being followed, and perform various other inspection and
intelligence activities. Aside from the new initiatives, two other
efforts may require special attention in the budget request. One of
these areas, the readiness of its multi-mission stations, has been a
congressional concern in recent years. Since 2002, the Congress has
earmarked additional funding to provide more personnel, equipment, and
training for multi-mission stations. While personnel have increased by
about 1,100 between fiscal years 2001 and 2003, the workload of these
stations is still a major concern. For example, station personnel are
currently averaging an 83-hour workweek, which is virtually unchanged
from 2001, and well beyond the Coast Guard's standard of 68 hours per
week. Rescue 21, the Coast Guard's second largest procurement effort,
will replace the Coast Guard's current antiquated communication system
that is key to carrying out its search and rescue functions. This
program, which is estimated to cost $953 million, has encountered
delays related to software integration problems. Currently, Coast Guard
officials are unsure whether Rescue 21 will be completed on time at the
end of fiscal year 2006, but they do not anticipate any cost escalation
in the program.
Background:
Now a part of DHS, the Coast Guard has experienced substantial budget
growth since the terrorist attacks of September 11. The agency's
operating budget in fiscal year 2004 was $4.7 billion--an increase of
31 percent in nominal dollars over its fiscal year 2001 operating
budget. The Coast Guard spends the bulk of this money on 11 programs--
5 related to its homeland security mission and 6 related to its non-
homeland security mission. (See table 1.):
Table 1: Homeland Security and Non-Homeland Security Programs by
Mission Area (as of March 2004):
Missions and programs: Homeland security mission;
Ports, waterways, and coastal security;
Activities and functions of each program: Conducting harbor patrols,
vulnerability assessments, intelligence gathering and analysis, and
other activities to prevent terrorist attacks and minimize the damage
from attacks that occur.
Missions and programs: Homeland security mission;
Illegal drug interdiction;
Activities and functions of each program: Deploying cutters and
aircraft in high drug trafficking areas and gathering intelligence to
reduce the flow of illegal drugs through maritime transit routes.
Missions and programs: Homeland security mission;
Undocumented migrant interdiction;
Activities and functions of each program: Deploying cutters and
aircraft to reduce the flow of undocumented migrants entering the
United States by maritime routes.
Missions and programs: Homeland security mission;
Defense readiness;
Activities and functions of each program: Participating with the
Department of Defense (DOD) in global military operations, deploying
cutters and other boats in and around harbors to protect DOD force
mobilization operations.
Missions and programs: Homeland security mission;
Other law enforcement (foreign fish enforcement)[A];
Activities and functions of each program: Protecting U.S. fishing
grounds by ensuring that foreign fishermen do not illegally harvest
United States fish stocks.
Missions and programs: Non-homeland security mission;
Search and rescue;
Activities and functions of each program: Operating multi-mission
stations, and a national distress and response communication system,
conducting search and rescue operations for mariners in distress.
Missions and programs: Non-homeland security mission;
Living marine resources;
Activities and functions of each program: Enforcing domestic fishing
laws and regulations through inspections and fishery patrols.
Missions and programs: Non-homeland security mission;
Aids to navigation;
Activities and functions of each program: Managing U.S. waterways and
providing a safe, efficient, and navigable marine transportation
system;
maintaining the extensive system of navigation aids;
monitoring marine traffic through vessel traffic service centers.
Missions and programs: Non-homeland security mission;
Ice operations;
Activities and functions of each program: Conducting polar operations
to facilitate the movement of critical goods and personnel in support
of scientific and national security activity and conducting domestic
and international icebreaking operations to facilitate year-round
commerce.
Missions and programs: Non-homeland security mission;
Marine environmental protection;
Activities and functions of each program: Preventing and responding to
marine oil and chemical spills;
preventing the illegal dumping of plastics and garbage in U.S. waters
and preventing biological invasions by aquatic nuisance species.
Missions and programs: Non-homeland security mission;
Marine safety;
Activities and functions of each program: Setting standards and
conducting vessel inspections to better ensure the safety of passengers
and crew aboard commercial vessels, cruise ships, ferries, and other
passenger vessels and partnering with states and boating safety
organizations to reduce recreational boating deaths.
Source: Coast Guard.
[A] Foreign fish enforcement is a key subset of the Coast Guard's other
law enforcement program. For this report, we consider only the resource
hours and performance results associated with the foreign fish aspect
of the other law enforcement program. We subsequently refer to this
program as foreign fish enforcement.
[End of table]
To carry out these responsibilities, the Coast Guard had almost
44,500 full-time military and civilian positions at the end of fiscal
year 2003--about 9 percent more than it had in fiscal year
2001.[Footnote 2] Also, the Coast Guard operates a fleet of more than
200 cutters and patrol boats, about 1,600 smaller boats, and almost 200
aircraft--mainly helicopters. Several efforts are under way to replace,
modernize, or add to these assets. The major one, the Deepwater
program, was begun in 1996, to replace or modernize the Coast Guard's
existing ships and aircraft, as well as make use of innovative
technology such as satellites and improved detection capabilities to
carry out its varied mission responsibilities. Deepwater involves the
modernization and replacement of over 90 ships and 200 aircraft used
for missions that generally occur beyond 50 miles from shore.
The Deepwater program has been in development for a number of years.
Between 1998 and 2001, three industry teams competed to identify and
provide Deepwater assets needed to transform the Coast Guard. In June
2002, the Coast Guard awarded a contract to Integrated Coast Guard
Systems (ICGS) as the system integrator for the Deepwater program to
develop and deliver an improved, integrated system of ships, aircraft,
unmanned aerial vehicles, command, control, communications, computer,
intelligence, surveillance, and reconnaissance, and supporting
logistics. During the first 3 years of the program (fiscal years 2002-
2004), the Congress appropriated about $1.5 billion for the program.
Resource Hours Have Changed Substantially for Many Programs, While
Performance Results Have Largely Remained Stable:
Total Coast Guard resource hours devoted to its various programs have
increased by 39 percent since the September 11 terrorist
attacks.[Footnote 3] Among the various Coast Guard programs, however,
there is a marked difference in the degree to which resource levels
rose or declined. Of the various programs, the ports, waterways, and
coastal security program saw by far the largest increase--more than
1,200 percent. Before the September 11 attacks, this program was a
small component of the Coast Guard, accounting for less than 4 percent
of total resource hours. By the end of fiscal year 2003, the program
accounted for 34 percent. As figure 1 shows, resource hours were up in
4 programs and down in 5. Homeland security programs have been more
likely to see increases in hours, while non-homeland security programs
have been more likely to see decreases.
Figure 1: Percentage Change in Resource Hours, by Program, Pre-
September 11 Baseline to Fiscal Year 2003:
[See PDF for image]
[End of figure]
While resource hours changed substantially for many of these programs,
their corresponding performance results did not necessarily reflect the
direction of these changes. Most Coast Guard programs have key
indicators--such as the percentage of distressed mariners' lives saved-
-that the Coast Guard uses to report program performance. Seven of the
9 programs we reviewed had information on these indicators over the 3-
year period.[Footnote 4] Of these, only 1--defense readiness--showed a
consistent relationship between resources and performance results. (See
table 2.) For that program, resources increased and performance results
improved. For the others, performance either remained stable despite
changes in resources, or they actually improved even though resources
decreased.[Footnote 5]
Table 2: Comparison of Trends in Resource Hours and Performance
Results, by Program:
Program[A]: Programs with an inconsistent relationship between
resources and performance results; Undocumented migrant interdiction;
Increase or decrease in resource hours, pre-September 11 baseline to
fiscal year 2003: Programs with an inconsistent relationship between
resources and performance results: Increase;
General trend in performance results, comparing fiscal year 2001 with
fiscal year 2003[B]: Programs with an inconsistent relationship between
resources and performance results: Stable.
Program[A]: Programs with an inconsistent relationship between
resources and performance results; Ice operations;
Increase or decrease in resource hours, pre-September 11 baseline to
fiscal year 2003: Programs with an inconsistent relationship between
resources and performance results: Increase;
General trend in performance results, comparing fiscal year 2001 with
fiscal year 2003[B]: Programs with an inconsistent relationship between
resources and performance results: Stable.
Program[A]: Programs with an inconsistent relationship between
resources and performance results; Search and rescue;
Increase or decrease in resource hours, pre-September 11 baseline to
fiscal year 2003: Programs with an inconsistent relationship between
resources and performance results: Decrease;
General trend in performance results, comparing fiscal year 2001 with
fiscal year 2003[B]: Programs with an inconsistent relationship between
resources and performance results: Stable.
Program[A]: Programs with an inconsistent relationship between
resources and performance results; Living marine resources;
Increase or decrease in resource hours, pre-September 11 baseline to
fiscal year 2003: Programs with an inconsistent relationship between
resources and performance results: Decrease;
General trend in performance results, comparing fiscal year 2001 with
fiscal year 2003[B]: Programs with an inconsistent relationship between
resources and performance results: Stable.
Program[A]: Programs with an inconsistent relationship between
resources and performance results; Foreign fish enforcement;
Increase or decrease in resource hours, pre-September 11 baseline to
fiscal year 2003: Programs with an inconsistent relationship between
resources and performance results: Decrease;
General trend in performance results, comparing fiscal year 2001 with
fiscal year 2003[B]: Programs with an inconsistent relationship between
resources and performance results: Improved.
Program[A]: Programs with an inconsistent relationship between
resources and performance results; Aids to navigation;
Increase or decrease in resource hours, pre-September 11 baseline to
fiscal year 2003: Programs with an inconsistent relationship between
resources and performance results: Stable;
General trend in performance results, comparing fiscal year 2001 with
fiscal year 2003[B]: Programs with an inconsistent relationship between
resources and performance results: Improved.
Program[A]: Program with a consistent relationship between resources
and performance results; Defense readiness;
Increase or decrease in resource hours, pre-September 11 baseline to
fiscal year 2003: Programs with an inconsistent relationship between
resources and performance results: Increase;
General trend in performance results, comparing fiscal year 2001 with
fiscal year 2003[B]: Programs with an inconsistent relationship between
resources and performance results: Improved.
Program[A]: Programs with incomplete information on trends; Illegal
drug interdiction;
Increase or decrease in resource hours, pre-September 11 baseline to
fiscal year 2003: Programs with an inconsistent relationship between
resources and performance results: Decrease;
General trend in performance results, comparing fiscal year 2001 with
fiscal year 2003[B]: Programs with an inconsistent relationship between
resources and performance results: Data not yet available for 2003.
Source: GAO analysis of Coast Guard resource hour and performance data.
[A] Coast Guard has not yet established performance measures for the
ports, waterways, and coastal security program. Consequently, it is not
included in this table.
[B] For this report, we were most interested in comparing performance
results for fiscal year 2001 with the most currently available results-
-from fiscal year 2003. As a result, we defined programs as "stable" or
"improved" based on the known results for these 2 years. All programs
defined as "stable" showed a differential of less than 4 percentage
points when comparing fiscal year 2001 and fiscal year 2003 results.
[End of table]
Another way that the Coast Guard assesses its performance is by
determining whether programs have achieved their performance targets
each year. These targets--which represent the goals that the programs
aim to achieve each year--were met in fiscal year 2003 by 5 of the 8
programs we reviewed.[Footnote 6] (See app. III for a detailed summary
of performance targets.):
Coast Guard officials acknowledged the apparent disconnect between
resource hours expended and performance results achieved and offered
two explanations for it. The first involved operational efficiencies--
Coast Guard-driven strategies that essentially allowed the agency to
accomplish the same or greater results with fewer resources. These
efficiencies were of four main types--improved technology, improved
tactics, stronger partnerships, and improved intelligence. Table 3
contains an example of each type.
Table 3: Selected Examples of Operational Efficiencies Cited by Coast
Guard Officials:
Improved technology; New ships. The recapitalization of the buoy tender
fleet offers a number of improvements, including greater transit speed,
reducing travel time, and allowing more work to be done in a day; a
larger buoy deck allowing the completion of more work during a single
deployment and fewer trips back to base; and improved navigation
systems, enabling safer navigation with fewer people.
Improved tactics; Use of armed helicopters. The Coast Guard reported
that the Helicopter Interdiction Tactical Squadron (HITRON) provides
personnel, training, and resources necessary to employ armed
helicopters in support of counter drug operations. Prior to November
2002, the Coast Guard used two armed helicopters simultaneously with
two cutters when responding to drug interdiction operations. The Coast
Guard has since changed its tactics to use one HITRON with one cutter
per operation and has seen no degradation in the effectiveness of this
drug interdiction tactic.
Stronger partnerships; Interagency flight schedules. In Miami, the
Coast Guard and another DHS agency, the Immigration and Customs
Enforcement Office, have developed a combined flight schedule to
integrate patrol schedules and assets, which has led to less overlap in
response efforts, saving time and resources for both agencies.
Improved intelligence; Intelligence-sharing arrangements. In 2001, the
Coast Guard joined the U.S. Intelligence Community (IC), a federation
of executive branch agencies and organizations that work separately and
together in intelligence-gathering activities. According to Coast Guard
officials, this step greatly enhances the agency's access to
information.
Source: Coast Guard.
[End of table]
The Coast Guard's second explanation involved external events or
developments that were largely beyond the Coast Guard's control but had
an influence on the amount of work the Coast Guard had to confront. In
fiscal year 2003, these events and developments included such things as
"surge" demands related to the Iraq War, a large increase in the number
of undocumented migrants attempting to enter the United States by
maritime routes, and poor weather conditions that, for example,
increased icebreaking needs. According to Coast Guard officials, these
externalities had a negative effect on performance results--that is,
they made it more difficult for the Coast Guard to meet its goals, even
when more resources were added. For example, according to Coast Guard
officials, while the percentage of migrants interdicted showed an
overall increase from fiscal years 2002 to 2003, a large increase in
illegal immigrants seeking to enter the United States by sea during
fiscal year 2003 reduced the performance results percentage from fiscal
year 2002 levels.
While the factors cited by the Coast Guard likely have an effect on
mission performance, the extent of that effect is largely unknown. The
Coast Guard does not have a mechanism in place to systematically
determine the extent to which these factors affect performance. For
instance, the Coast Guard does not have data on search and rescue cases
handled by local responders; as a result, it cannot determine the
extent to which this assistance has reduced the Coast Guard's own
search and rescue workload.
Coast Guard officials agree on the value of taking a more systematic
approach to assessing performance, including better understanding of
the effects of internal and external factors that affect their
performance, and they have begun a number of steps directed at
improving various aspects of performance assessment. For example, they
are developing a procedure for capturing operating costs on a program-
by-program basis, as well as a system for assessing the agency's
ability to respond to mission requirements. These steps are still in
their early stages, and while they represent a good beginning, it is
not yet clear when they will be completed and whether they will tie
together to address the weaknesses we have identified. Without a clear
understanding of this linkage or a timeframe to ensure that it gets
completed, the agency is at risk of misdirecting resources and missing
further opportunities to increase productivity and efficiency to ensure
the best use of its funds. A clear understanding is also needed to
better allow the Congress to make informed budget decisions for the
Coast Guard.
In discussions with us, the Coast Guard has not clearly articulated a
strategy for how these various efforts will weave together. However,
Coast Guard officials told us that more information regarding these
efforts will be included in the agency's strategic blueprint, which has
yet to be finalized.
Reliability and Cost Issues Associated with Key Deepwater Assets
Heighten Program Funding and Management Challenges:
Under the Deepwater program, the Coast Guard's legacy assets are
expected to remain in service until they are replaced or modernized
through the Deepwater acquisition program. The maintenance costs to
keep many of these assets operational have been more than the amounts
the Coast Guard budgeted for these repairs, and the gap between these
two is widening.
Coast Guard Reports Increasing Problems and Rising Costs with Assets:
As early as the mid-1990s, the Coast Guard identified problems with its
aging fleet and cited the need to upgrade or replace many of its
cutters and aircraft. The deteriorating condition of some of its
deepwater assets has resulted in increasing operational problems and
limitations, escalating maintenance needs and downtime of assets, and
increasing maintenance costs over the past few years.
Increased Operational Problems and Limitations for Some Deepwater
Legacy Assets:
One key indicator of the deterioration of the Coast Guard's legacy
assets is the increasing lost operational days--that is, days in which
Coast Guard cutters could not conduct their normal mission activities.
Although the Coast Guard was unable to provide complete historical data
for this trend among all of its deepwater assets, it could provide data
for some of its major deepwater cutters operating in the Atlantic
region.[Footnote 7] As figure 2 shows, between fiscal year 2000 and
fiscal year 2003, there is an increase in lost operational days--from
60 to 165 lost days--between fiscal year 2002 and fiscal year 2003 for
these key deepwater assets.[Footnote 8]
Figure 2: Lost Operational Days for Atlantic Region Cutters by Fiscal
Year:
[See PDF for image]
[End of figure]
The Coast Guard provided the following examples of these problems and
restrictions:
* An increasing number of in-flight safety-related incidents for the
HH-65 helicopter.[Footnote 9] These incidents have resulted in the
Coast Guard placing increased restrictions on the HH-65's operations,
including a reduced flight range and a reduced passenger/crew level to
help reduce safety risks for these assets and the personnel flying
them.
* A large number of hull incidents on a class of key Coast Guard patrol
boats. To date, 20 of the Coast Guard's 110-foot patrol boats have
experienced significant levels of deterioration that have resulted in
hull breaches requiring emergency repairs. To repair these hull
breaches, each of these vessels were removed from service for an
average of 3 months.
* An increasing need to implement special safety response measures
aboard the fleet of 378-foot high endurance cutters. These ships--the
largest of the Coast Guard's offshore cutters--have had to regularly
implement fire team response procedures when on patrol due to numerous
fuel or lube oil leaks. These procedures entail having the crew perform
critical safety and fire response actions, such as evacuating the
engineering space, donning firefighting gear, and investigating the
cause of the engineering casualty, while the ship's systems are shut
down and the cutter is "dead in the water"--for a period of time.
Concerns about Unscheduled Maintenance:
In addition to lost operational days, unscheduled maintenance days are
also a concern. That is, when a cutter is undergoing unscheduled
maintenance, it is also likely to be out of operation as well. However,
Coast Guard officials noted that unscheduled maintenance days do not
always result in lost operational days because they are sometimes able
to schedule additional operational days for another cutter to make up
for lost days from the cutter undergoing unscheduled maintenance. As
figure 3 shows, the cumulative number of unscheduled maintenance days
for the Coast Guard's mainstay cutters and a key patrol boat (the 210-
foot, 270-foot, and 378-foot cutters and the 110-foot patrol boat)--
have increased since fiscal year 2002.[Footnote 10]
Figure 3: Unscheduled Maintenance Days for Selected Coast Guard Cutter
Assets, Fiscal Years 2000-2003:
[See PDF for image]
[End of figure]
The Coast Guard provided us with examples of some of the more
significant unscheduled maintenance events that its legacy cutters have
experienced in recent years that resulted in lost operational days for
the affected cutters. Because these cutters are typically scheduled to
operate on average about 175 to185 days per year, a loss of 20 or more
days in a year can be significant. These examples included:
* Twenty-eight lost operational days in fiscal year 2003 for the 36-
year old high endurance cutter, Chase, due to main engine and boiler
casualties; 84 lost operational days so far in fiscal year 2004 due to
additional mechanical problems.
* Twenty-four lost operational days in fiscal year 2003 for the 36-year
old high endurance cutter, Gallatin, due to a shaft coupling failure.
Increasing Maintenance Costs for Cutters and Patrol Boats:
Unscheduled maintenance costs have also increased significantly over
the past few years. According to our analysis of Coast Guard data on
some of its major cutters and patrol boats, these maintenance
expenditures have increased 79 percent--from about $522,000 to almost
$934,000 per vessel--between fiscal year 2000 and fiscal year 2003. As
a result, the Coast Guard is finding that in recent years it has spent
much more on maintaining its aging assets, than it had planned. To
determine how much to budget for asset maintenance, the Coast Guard
determines what is known as the "standard support level" (SSL) for each
of its vessels when they are commissioned. This budgetary estimate is
equal to the amount of funding provided each year for vessel casualty
support and maintenance needs, according to a Coast Guard official. The
estimate is increased each year based on certain cost of living
adjustments, and the support level can vary according to the estimated
operating days for the class of the vessel. According to the Coast
Guard, when maintenance expenditures exceed the SSL for a class of
vessels, a budget deficit is created that must be filled with funds
from other vessels, or from outside sources. In fiscal year 2003, the
gap between the Coast Guard's planned and actual maintenance
expenditures for key legacy assets was about almost $500,000 per
vessel. (See fig. 4.):
Figure 4: Actual Maintenance Expenditures (EXP) over Budgeted Standard
Support Level (SSL):
[See PDF for image]
Note: This figure includes expenditures for four classes of cutters:
the 378-foot high endurance cutters, the 270-foot medium endurance
cutters; the 210-foot medium endurance cutters, and the 110-foot patrol
boats.
[End of figure]
Escalating maintenance costs and their effects are evident in the
following examples:
* In fiscal year 2002, the Coast Guard removed from service two of its
210-foot medium endurance cutters because, according to Coast Guard
officials, they had become too costly to maintain. According to a
knowledgeable Coast Guard official, these two cutters were both over 35
years old, and the Coast Guard estimated that it would have cost about
$1 million per year, per vessel to keep them in service, if they had
not been decommissioned.
* Returning from a 2-month patrol on a 20-year old 270-foot medium
endurance cutter, the ship's commander reported that even after
completing $1 million in repairs and maintenance in the past year, the
vessel still had a tremendous backlog of critical maintenance that
continued to grow exponentially. In addition, the commander reported
that during this particular patrol, the cutter had experienced numerous
debilitating vessel maintenance problems--or casualties--resulting in
5 lost cutter days. He also noted that the cutter would require 30 or
more days of repair upon its return. The commander further reported
that he believed the vessel casualties encountered on this patrol
foreshadowed the long-term impact that continued deferral of major
maintenance actions would have on overall operational readiness.
The Coast Guard was unable to attribute specific mission performance
deterioration to these types of incidents; however, reduced operating
availability time and increasing maintenance downtime for these assets
would likely adversely affect mission performance results in the
future. Given these maintenance costs and reliability problems, it is
unclear what the actual service life might be for some of these assets,
particularly the cutters and the HU-25 fixed wing aircraft, according
to Coast Guard officials. And certainly, decisions to overhaul or
upgrade assets would affect their longevity as well. However, Coast
Guard officials said that it is unclear at this time as to when these
Deepwater assets will become so costly to maintain that the Coast Guard
would have no other logical choice but to retire them. This type of
analysis would be valuable to the Coast Guard and the Congress in
determining the priority order for future asset replacements and
upgrades.
Coast Guard Is Facing Serious Challenges to Keep the Program on
Schedule and within Budget Projections:
The Coast Guard's Deepwater program--which uses a unique contracting
approach requiring steady funding over 20 years--is facing serious
challenges to keep the program on schedule and within budget estimates.
Now, almost 2 years after the contract for the Deepwater program was
awarded, cost estimates to complete the program have increased by about
$2.2 billion in nominal terms, and key components necessary to manage
the program effectively have not been rigorously implemented. In
addition, new homeland security requirements, which have not yet been
defined or approved, and necessary major modifications to key legacy
assets make keeping the program on track that much harder.
Under current funding plans, the Coast Guard continues to face
potential cost increases in its $17 billion Deepwater program. The
Coast Guard chose a unique contracting approach that requires steady
funding for the program over its 20-year life. Under this approach, the
Coast Guard has started on a course potentially expensive to alter and
one that carries some risks. In a 2001 report[Footnote 11], we
expressed concern that the Coast Guard risked schedule slippages and
cost escalation if project funding fell short of planned funding
levels.[Footnote 12] Now, very early in the program our concerns are
being realized. Program funding in the first 2 years was less than the
agency planned by about $125 million. This resulted in delays in the
scheduled delivery of key deepwater assets, such as the maritime patrol
aircraft. The Congress appropriated more than the requested funding in
fiscal year 2004, and if the agency receives the $678 million funding
level requested in the fiscal 2005 budget proposal, the Deepwater
program will have cumulatively received $46 million more than planned
levels for the first 4 years. However, according to the Coast Guard,
the program's acquisition schedule has been lengthened and higher
funding levels, ($795 million per year over the remaining years of the
program), will be needed to restore this schedule to its original 20-
year completion pace.
Currently, Coast Guard officials believe that a continuing stream of
funding at $795 million (adjusted for inflation) would put the project
back onto its original 20-year time schedule. However, on this funding
schedule, total costs for the Deepwater program, assuming no additional
changes, would reach $17 billion--in nominal terms--about $2.2 billion
more than the Coast Guard's earlier estimate.[Footnote 13] Because of
time constraints for completing work for this statement, we could not
assess the reasons for the cost escalation. Coast Guard officials
attributed the increased costs, so early in the program, to the
following factors.
* Under-funding in the first 2 years put the program behind schedule
and resulted in lost efficiency and flexibility that they believe would
have been realized by acquiring multiple assets in a more coordinated
way. They believe that this coordinated approach would have offered
efficiencies. For example, they said that acquiring multiple assets
simultaneously or in their planned sequence would allow for more
efficient logistical support with respect to training, and
infrastructure planning for such things as facility and pier space for
personnel and assets. However, they believe that these efficiencies
were lost when these assets could not be purchased simultaneously.
* The maintenance costs associated with sustaining legacy assets have
increased more than anticipated as these assets deteriorated faster
than expected. As a result, available future funding may have to be
used, in part, to address critical maintenance needs of the legacy
Deepwater assets, diverting funds otherwise intended for future
Deepwater replacements and upgrades. In addition, Coast Guard officials
indicated that maintenance schedules for some vessels were perhaps not
kept according to plan in anticipation of these assets being replaced
or overhauled through the Deepwater program.
* Delays have resulted in increased costs due to normal price
inflation. Because the contract for acquiring Deepwater assets has a
price adjustment factor that allows asset prices to be adjusted for
inflation, costs for these assets have increased over time.
* Due to revised homeland security requirements, some redesign of the
national security cutter has occurred. These modifications, made to
ensure the vessel would accommodate DHS needs included such things as
lengthening the vessel to accommodate DHS aircraft, installing an
onboard intelligence center, and making modifications to allow
sustainability in an environment tainted by chemical, biological and
radiological agents. According to Coast Guard officials, these
modifications resulted in additional costs for the Deepwater program.
In recent discussions with Coast Guard officials about the Deepwater
program, they were not able to explain in more detail the reasons for
the escalation in the program costs and did not provide additional
information to us before we completed our work. However, officials
indicated that they would provide additional information in the future.
Increased Management and Oversight Attention Needed to Successfully
Complete the Deepwater Program:
While expeditiously completing the Deepwater program is important to
the ability of the Coast Guard to effectively fulfill its
responsibilities in the future, the agency must also be diligent in
managing the contract, and ensuring necessary competition among
contractors to prevent additional cost increases in the program. As we
have recently reported we have concerns regarding the management and
oversight of the project to date.[Footnote 14] Almost 2 years after the
contract was awarded for implementation of the Deepwater program, the
key components needed to manage the program and oversee the system
integrator's performance[Footnote 15] have not been effectively
implemented in the following areas:
* The effectiveness of the Integrated Project Teams--established as the
main tool for managing the program and overseeing the contractor--has
been weakened due to changing membership, understaffing, insufficient
training, lack of authority for decision making, and inadequate
communication among members.
* Although delivery of some of the first assets is imminent, the Coast
Guard has not effectively communicated to its operational personnel
decisions on how new and old assets will be integrated and how
maintenance responsibilities will be divided between government and
contractor personnel.
* The Coast Guard has not developed quantifiable metrics or adhered to
effective procedures for holding the system integrator accountable for
its ongoing performance, resulting in a process for assessing
performance that lacked rigor.
* The Coast Guard has not yet begun to measure the system integrator's
performance on the three overarching goals of the Deepwater program--
operational effectiveness, minimizing total ownership cost, and
customer satisfaction. This information will be essential to the Coast
Guard's decision about whether to extend the system integrator's
contract after the first 5 years.
* We have concerns about the Coast Guard's efforts to measure the
extent of competition among the suppliers of Deepwater assets, or hold
the system integrator accountable for doing so to achieve this
competition. The Coast Guard's "hands-off" approach in this area raises
questions about whether the government will be able to control costs in
the Deepwater program. Concerns about the Coast Guard's ability to rely
on competition as a means to control future costs contributed to our
description of the Deepwater program in 2001 as "risky." Three years
later, these concerns remain.
Unplanned Legacy Asset Modifications and Updated Deepwater Requirements
Pose Potential Additional Challenges:
In addition to funding and contract management concerns, there are
other, as yet relatively unknown, but potentially significant factors
that could affect the Coast Guard's Deepwater program. Recent
discoveries about the condition of some legacy assets, and
corresponding actions taken, combined with anticipated updates in the
Coast Guard's mission requirements, may give the Coast Guard additional
reasons to re-think its prioritization for obtaining or upgrading
certain Deepwater assets.
In recent years, the Coast Guard has had to make major unplanned
upgrades on some of its Deepwater assets. Most recently, the Coast
Guard decided to replace its HH-65 helicopter engines because of
serious safety and reliability issues with that aircraft. Modernization
of this helicopter is planned as part of the Deepwater program
beginning in 2007, but for safety and reliability reasons, the existing
engine on this helicopter needed to be replaced much sooner.[Footnote
16] The HH-65 is the Coast Guard's mainstay helicopter, serving such
missions as search and rescue, drug and migrant interdiction, and
homeland security. Problems with the current engine and related
components have been occurring for a number of years, affecting the
amount of power available for hovering, lifting, and other operations.
To address these problems, the Coast Guard plans to take action along
two tracks. First, until the replacement engines are installed, they
plan to upgrade the existing engines. Second, they plan to install new
engines in the entire HH-65 fleet within 24 months. However, there are
potential consequences for the Deepwater acquisition process associated
with this early replacement decision. Funds to pay for the replacement
engine are to be diverted from other Deepwater projects--a factor that
could exacerbate further schedule delays. Also, the alignment between
deepwater requirements--which have not yet been finalized--and those
for the replacement engine cannot be determined. If the requirements
are not in alignment, the Coast Guard faces significant cost and
schedule risks because another engine replacement could be required to
meet new mission requirements. Irrespective of these concerns, the
Coast Guard's decision to re-engine these helicopters, in and of
itself, provides reason for the agency to reassess its planned schedule
for upgrading this asset under the Deepwater program.
Coast Guard officials also anticipate that updated agency requirements-
-engendered by homeland security needs that were not known and,
therefore, not factored into the original mission requirements
developed prior to the September 11 attacks--also need to be
considered. According to Coast Guard officials, they are currently in
the process of re-examining the agency's Deepwater mission requirements
to ensure that they align with DHS' strategic goals, and that the
agency is able to meet increased mission demands and higher performance
targets in a post September 11 environment. The Coast Guard's review of
its Deepwater mission needs statement is expected to be completed by
April or May 2004 and submitted to DHS for approval at that time.
This continually evolving information flow challenges the Coast Guard
even further to ensure that funds are wisely spent. As a result, as
interim asset decisions, discoveries, and evolving mission priorities
are identified, it becomes even more imperative that the Coast Guard
continually updates its acquisition schedule and decision making to
ensure that choices are made based on timely and accurate information.
Overview of Fiscal Year 2005 Budget and Funding for Several Areas of
Particular Congressional Interest:
The President's fiscal year budget request for the Coast Guard of
nearly $7.5 billion represents an increase of about $534 million, or
about 8 percent in nominal dollars over the enacted budget for fiscal
year 2004.[Footnote 17] It includes almost $5.2 billion in operating
expenses and $943 million for its capital acquisition budget. The
majority of the increase covers pay increases for current and retired
employees or continues certain programs already underway, such as
follow-on funding for construction projects at Coast Guard shore-side
facilities, the Great Lakes Icebreaker construction, and information
technology projects. About $115 million of the increase would fund new
initiatives, about 90 percent of which relate to homeland security. The
most significant new initiative at $102 million would be used to
implement the Maritime Transportation Security Act (MTSA) of
2002.[Footnote 18]
This funding would be used to add about 500 new personnel (full-time-
equivalent) who will perform various security-related and other
functions.[Footnote 19] An additional $2.2 million is being requested
to fund a new initiative for increasing maritime domain awareness--
another homeland security function.[Footnote 20]
One area of particular interest to the Congress over the last several
years is the readiness of its multi-mission stations. In September
2001, the Department of Transportation, Office of Inspector General,
reported that readiness at multi-mission stations was
deteriorating.[Footnote 21] For example, staff shortages at most
stations required crews to work an average of 84 hours per week, well
above the standard (68 hours maximum) established to limit fatigue and
stress among personnel. Subsequently, the Congress appropriated funding
totaling about $50 million for fiscal years 2002-2004 specifically to
pay for increased staff, training, and equipment at stations and
command centers. However, the degree that readiness has improved, if
any, is unclear. For example, according to the Coast Guard, the average
workweek at the multi-mission stations is still about 83 hours per
week, even though about 1,100 personnel were added between fiscal years
2001 and 2003. According to a Coast Guard official, one main reason for
this high work week, is that these stations have taken on a major
homeland security role since September 11, resulting in a heavier
workload for station personnel carrying out functions, such as vessel
escorts and port security patrols.
Of the $943 million requested for capital projects, $839 million, or 89
percent, would be dedicated to two projects--the Deepwater program
($678 million) and Rescue 21 ($161 million). Rescue 21, the Coast
Guard's second largest acquisition program, provides for the
modernization of the command, control, and communication infrastructure
of the National Distress and Response System. The current system
suffers from aging equipment, limited spare parts, and limited
interoperability with other agencies. Of particular concern to the
Coast Guard and the maritime community are the current system's
coverage gaps, which can result in missed maritime distress calls. The
Congress mandated the completion of the new system by the end of fiscal
year 2006. The fiscal year 2005 request for $161 million is aimed to
keep the project progressing; however, technical problems with software
development have delayed implementation of the first elements of the
system that were scheduled for last summer, and it is unclear to agency
officials whether these issues will prevent the agency from completing
implementation of the program on time. In recent discussions with Coast
Guard officials, they said that they do not yet know whether Rescue 21
will be completed on time at the end of fiscal year 2006, but they
currently do not anticipate any cost escalation in the program, which
is presently estimated to cost $953 million.
Madame Chair and Members of the Subcommittee, this completes my
prepared statement. I would be happy to respond to any questions that
you or other Members of the Subcommittee may have at this time.
Contacts and Acknowledgments:
For information about this testimony, please contact Margaret
Wrightson, Director, Homeland Security and Justice Issues, at (415)
904-2200, or wrightsonm@gao.gov. Other individuals making key
contributions to this testimony include Dawn Hoff, Joseph Kile, Dawn
Locke, Stan Stenersen, and Randall Williamson.
[End of section]
Appendix I: Scope and Methodology:
To determine the most recent trends in both resource usage and
performance results for the Coast Guard's homeland security and non-
homeland security programs and the implication of these trends for
Coast Guard management and accountability, we summarized findings from
a recent GAO report.[Footnote 22]
To determine the challenges the agency faces as it proceeds with its
program to modernize its Deepwater cutters and aircraft, we summarized
briefings prepared in 2004 by the Coast Guard for the Congress and for
internal use on the Deepwater program and the HH-65 helicopters. We
also interviewed Coast Guard staff at headquarters to determine the
potential impacts of deteriorating Deepwater assets. In addition, we
used current maintenance expenditure data provided by the Coast Guard
to perform an historical analysis of maintenance costs. To assess the
reliability of these data, we interviewed knowledgeable Coast Guard
officials and reviewed existing documentation about the data and the
systems that produced them. We determined that the data were
sufficiently reliable for the purposes of this report.
To give an overview of the President's fiscal year 2005 budget request
for the Coast Guard, focusing on several areas of particular
congressional interest, we obtained information on the average workweek
of personnel at the Coast Guard's multi-mission stations and
interviewed Coast Guard headquarters staff to determine how the fiscal
year 2005 budget will address MTSA implementation, Rescue 21, and
multi-mission stations. We also reviewed the Coast Guard's C-stage
budget and other financial documentation provided by the Coast Guard.
This testimony is based on published reports and briefings as well as
additional audit work that were conducted in accordance with generally
accepted government auditing standards.
[End of section]
Appendix II: Coast Guard Performance Results, Fiscal Years 2001-2003:
Table 4 shows a detailed list of performance results for the 8 programs
for which we obtained data. In a recent report, we compared performance
results for our baseline year--fiscal year 2001--with the most
currently available results--fiscal year 2003.[Footnote 23] As a
result, we defined programs as "stable" or "improved" based on the
known results for these 2 years. All programs defined as stable showed
a differential of less than 4 percentage points when comparing fiscal
year 2001 and fiscal year 2003 results.
Table 4: Performance Results, by Program, from Fiscal Years 2001
through 2003:
Program: Stable results;
Undocumented migrant interdiction;
Performance measure: Percentage of interdicted illegal migrants
entering the United States through maritime means;
Performance results by fiscal year: 2001: 82.5%;
Performance results by fiscal year: 2002: 88.3%;
Performance results by fiscal year: 2003: 85.3%.
Program: Stable results;
Ice operations;
Performance measure: Number of waterway closure days;
Performance results by fiscal year: 2001: 7;
Performance results by fiscal year: 2002: 7;
Performance results by fiscal year: 2003: 7.
Program: Stable results;
Living marine resources;
Performance measure: Percentage of fishermen found in compliance with
regulations;
Performance results by fiscal year: 2001: 98.6%;
Performance results by fiscal year: 2002: 97.3%;
Performance results by fiscal year: 2003: 97.1%.
Program: Stable results;
Search and rescue;
Performance measure: Percentage of mariners' lives saved;
Performance results by fiscal year: 2001: 84.2%;
Performance results by fiscal year: 2002: 84.4%;
Performance results by fiscal year: 2003: 87.7%.
Program: Improving results;
Foreign fish enforcement;
Performance measure: Number of detected Exclusive Economic Zone
(EEZ)[A] incursions by foreign fishing vessels;
Performance results by fiscal year: 2001: 219;
Performance results by fiscal year: 2002: 250;
Performance results by fiscal year: 2003: 153.
Program: Improving results;
Aids to navigation;
Performance measure: Number of collisions, allisions,[B] and
groundings;
Performance results by fiscal year: 2001: 1,677;
Performance results by fiscal year: 2002: 1,936;
Performance results by fiscal year: 2003: 1,523.
Program: Improving results;
Defense readiness;
Performance measure: Percentage of time units meet combat readiness
status at C-2 level.[C];
Performance results by fiscal year: 2001: 67%;
Performance results by fiscal year: 2002: 70%;
Performance results by fiscal year: 2003: 78%.
Program: Pending results;
Illegal drug interdiction;
Performance measure: Percentage of cocaine seized out of total
estimated cocaine entering the United States through maritime means.
[D];
Performance results by fiscal year: 2001: 11.7%;
Performance results by fiscal year: 2002: 10.6%;
Performance results by fiscal year: 2003: N/A[E].
Source: GAO analysis of Coast Guard performance data.
[A] The EEZ is defined by the 1976 Magnuson-Stevens Fishery
Conservation and Management Act as an area within 200 miles of U.S.
shores in which U.S. citizens have primary harvesting rights to fish
stocks.
[B] The Coast Guard defines an "allision" as a vessel collision with a
fixed object.
[C] According to Coast Guard information, the C-2 level is defined as
the level at which each unit possesses the resources and is trained to
undertake most of the wartime missions for which it is organized or
designed.
[D] The illegal drug interdiction performance measure only includes
cocaine as cocaine has an analyzed flow rate, and it constitutes the
preponderance of illegal drugs entering the United States through
maritime means (i.e., cocaine shipments are measured in tons while
heroin, marijuana, and other illegal drugs are measured in pounds).
[E] The illegal drug interdiction performance result for fiscal year
2003 will not be calculated until the Interagency Assessment of Cocaine
Movement (IACM) publishes its flow rate in spring of 2004.
[End of table]
[End of section]
Appendix III: Performance Targets for Fiscal Year 2003:
In a recent report, we showed that another way that the Coast Guard
assesses its performance is by determining whether programs have
achieved their performance targets each year.[Footnote 24] These
targets--which represent the goals that the programs aim to achieve
each year--were met in fiscal year 2003 by 5 of the 8 programs we
reviewed.[Footnote 25] (See table 5.) Two of the programs that did not
meet their performance targets were defense readiness and undocumented
migrant interdiction. Coast Guard officials reported that the defense
readiness program did not meet its target, in part, because of
equipment problems associated with operating aging ships and unit
training deficiencies, such as cutters not having sufficient training
time to perform gunnery exercises.[Footnote 26] As for the undocumented
migrant interdiction program, Coast Guard officials reported that they
consider their results to be a minimal decline, given the substantial
increase in the number of migrants they successfully interdicted during
the year.[Footnote 27] For example, of the key migrant populations
tracked by the Coast Guard, about 5,300 illegal migrants were
interdicted in fiscal year 2003 compared with about 2,400 in fiscal
year 2002, an increase of 120 percent.[Footnote 28] We could not
determine whether the remaining program, illegal drug interdiction, met
its performance target because the performance results for fiscal year
2003 were not yet available at the time we conducted our work.
Table 5: Performance Targets by Program for Fiscal Year 2003:
Program: Undocumented migrant interdiction;
Fiscal year 2003 performance targets: Interdict or deter at least 87
percent of illegal migrants entering the United States through maritime
means;
Fiscal year 2003 result: 85.3%;
Target met in fiscal year 2003? No.
Program: Illegal drug interdiction;
Fiscal year 2003 performance targets: Seize 20.7 percent or more of
cocaine entering the United States through maritime means;
Fiscal year 2003 result: To be determined[A];
Target met in fiscal year 2003? To be determined[A].
Program: Ice operations;
Fiscal year 2003 performance targets: Limit waterway closures to 8 days
during severe winters;
Fiscal year 2003 result: 7 days;
Target met in fiscal year 2003? Yes.
Program: Living marine resources;
Fiscal year 2003 performance targets: Raise percent of fishermen found
in compliance with regulations to 97 percent or above;
Fiscal year 2003 result: 97.1%;
Target met in fiscal year 2003? Yes.
Program: Search and rescue;
Fiscal year 2003 performance targets: Save at least 85 percent of all
mariners in distress;
Fiscal year 2003 result: 87.7%;
Target met in fiscal year 2003? Yes.
Program: Foreign fish enforcement;
Fiscal year 2003 performance targets: Reduce number of detected EEZ
incursions by foreign fishing vessels to 202 or less;
Fiscal year 2003 result: 153 incursions;
Target met in fiscal year 2003? Yes.
Program: Aids to navigation;
Fiscal year 2003 performance targets: Reduce 5-year average of
collisions, allisions, and groundings (CAGs) to 2,010 or less;
Fiscal year 2003 result: 1,523 CAGs;
Target met in fiscal year 2003? Yes.
Program: Defense readiness;
Fiscal year 2003 performance targets: Maintain an overall combat
readiness status at C-2 level or better for 100 percent of assets;
Fiscal year 2003 result: 78%;
Target met in fiscal year 2003? No.
Source: GAO analysis of Coast Guard performance data.
[A] The illegal drug interdiction performance result for fiscal year
2003 will not be available until spring of 2004.
[End of table]
FOOTNOTES
[1] U.S. General Accounting Office, Coast Guard: Relationship between
Resources Used and Results Achieved Needs to be Clearer, (GAO-04-432,
Washington, D.C.: Mar. 22, 2004); Coast Guard: Strategy Needed for
Setting and Monitoring Levels of Effort for All Missions, (GAO-03-155,
Washington, D.C.: Nov. 12, 2002).
[2] These numbers include about 38,000 military and 6,200 civilian
personnel. In addition, the Coast Guard has about 7,900 reservists, as
well as about 36,000 volunteer auxiliary personnel who help with
activities ranging from search and rescue to boating safety education.
[3] Resource hours, which are the number of hours that Coast Guard
ships, boats, and aircraft are used in each Coast Guard program,
provide a basis for assessing levels of effort in 9 of the Coast
Guard's 11 programs. We used resource hours for cutters, boats, and
aircraft as an activity measure because the Coast Guard does not have a
system that tracks how its personnel spend their time by program. The
Coast Guard calculated a resource hour baseline from which the change
in resource hours since the September 11 attacks can be estimated. This
baseline is an average of the eight fiscal year quarters preceding
September 11, 2001 multiplied by four to put it in terms of a full
fiscal year. For the purposes of this report, we refer to this
calculation as the pre-September 11 baseline or as pre-September 11
levels. According to Coast Guard officials, there is no special
significance to this baseline period, other than it represents the
historical mission activity of the Coast Guard at that period in time.
Although the Coast Guard tracks resource hours for all 11 of its
programs, 2 of the 11 are carried out substantially without the use of
cutters, boats, and aircraft. These two are marine safety (such as
conducting ship inspections in port) and marine environmental
protection (such as responding to oil or chemical spills).
[4] The Coast Guard had not yet established performance measures for
the ports, waterways, and coastal security program, and fiscal year
2003 measures for the illegal drug interdiction program were not yet
available at the time of our review.
[5] For specific program indicators, as well as for results by fiscal
year, see app. II.
[6] The ports, waterways, and coastal security program does not yet
have established performance targets. In addition, the marine
environmental protection program also met its performance target in
fiscal year 2003 but was not included in our analysis. Since the marine
safety program does not yet have performance results for fiscal year
2003, discussing its target is not relevant here.
[7] Only limited data were available for Pacific region deepwater
assets. The data that were provided indicated that there were 118 lost
cutter days in fiscal year 2003 for the same deepwater assets as
identified in the Atlantic region data. In fiscal year 2004, there have
been 137 lost cutter days as of April 2004.
[8] It is important to note, however, that 46 of these days were the
result of delays at the Coast Guard yard.
[9] A total of 32 incidents were reported in fiscal 2003; for the first
5 months of fiscal year 2004, almost 70 incidents have been reported.
[10] The increase in overall unscheduled maintenance days is being
driven by unscheduled maintenance days for the 110-foot patrol boats.
[11] U.S. General Accounting Office, Coast Guard: Progress Being Made
on Deepwater Project, but Risks Remain (GAO-01-564, May 2, 2001).
[12] This $2.2 billion estimate assumes completion of the Deepwater
contract in a total of 20 years.
[13] The earlier estimate called for completing the Deepwater program
in 22 years with a continuing stream of funding at $530 million
(adjusted for inflation).
[14] U.S. General Accounting Office, Contract Management: Coast Guard's
Deepwater Program Needs Increased Attention to Management and
Contractor Oversight (GAO-04-380, Mar. 9, 2004).
[15] The prime contractor, known as the "system integrator," is
responsible for overall program planning and management, asset
integration, and overseeing the delivery of specific Deepwater assets.
[16] U.S. General Accounting Office, Coast Guard: Replacement of HH-65
Helicopter Engine (GAO-04-595, Mar. 24, 2004).
[17] This calculation does not include supplemental appropriations but
does include the fiscal year 2004 rescissions.
[18] The Maritime Transportation Security Act is comprehensive
legislation that implements security standards that would apply to all
foreign vessels seeking to enter the United States.
[19] Prior to fiscal year 2005, 480 Coast Guard reservists were
handling MTSA implementation. The Coast Guard reported that authority
to call up reservists will expire in fiscal year 2005; therefore it has
requested almost 500 active duty personnel (full-time-equivalent) to
take over these activities. Rather than approving implementation plans
as was done by the reservists in fiscal year 2004, the new personnel in
fiscal year 2005 will, for example, approve vessel and facility
security plans, ensure operators are in compliance with their plans,
and perform inspection activities on foreign vessels.
[20] According to the Coast Guard, Maritime Domain Awareness is an
initiative that will provide visibility into events, conditions, and
trends in the maritime domain to give national leaders, operational
commanders, and maritime stakeholders the information and knowledge
they need for both operational and policy decisions. Coast Guard
information explains that this will help offset the physical
impossibility of patrolling the entire U.S. maritime domain
simultaneously or inspecting, certifying, and validating all travelers
and cargoes.
[21] Audit of the Small Boat Station Search and Rescue Program. MH-
2001-94 (Washington, D.C., Sept. 14, 2001).
[22] U.S General Accounting Office, Coast Guard: Relationship between
Resources Used and Results Achieved Needs to Be Clearer (GAO-04-432,
Mar. 22, 2004).
[23] For complete information, see U.S. General Accounting Office,
Coast Guard: Relationship between Resources Used and Results Achieved
Needs to Be Clearer (GAO-04-432, Mar. 22, 2004).
[24] For complete information, see U.S. General Accounting Office,
Coast Guard: Relationship between Resources Used and Results Achieved
Needs to Be Clearer (GAO-04-432, Mar. 22, 2004).
[25] The marine environmental protection program also met its
performance target in fiscal year 2003 but was not included in our
analysis. Also, since the marine safety program does not yet have
performance results for fiscal year 2003, discussing its target is not
relevant here.
[26] According to Coast Guard information, the C-2 level is defined as
the level at which each unit possesses the resources and is trained to
undertake most of the wartime missions for which it is organized or
designed.
[27] The undocumented migrant interdiction performance measure
indicates the percentage of migrants interdicted or deterred from
entering the United States via maritime routes. Specifically, it is the
number of interdicted migrants divided by the estimated flow of
undocumented migrants (which includes the number of law enforcement
interdictions, known successful migrant arrivals, and the estimated
number of migrants deterred from leaving their countries of origin).
This estimate is prepared annually by the Coast Guard's Intelligence
Coordination Center.
[28] According to the Coast Guard, the 2002 and 2003 illegal migrant
numbers stated here include only those counted in the undocumented
migrant performance measure, which uses the following four migrant
populations: Haiti, Cuba, the Dominican Republic, and the People's
Republic of China. The total number of all migrants interdicted in
fiscal years 2002 and 2003 were 4,104 and 6,054, respectively.
