Coast Guard
Observations on Agency Performance, Operations and Future Challenges Gao ID: GAO-06-448T June 15, 2006The Coast Guard's fiscal year 2007 budget request total $8.4 billion, an increase of 4 percent ($328 million) over the approved budget for fiscal year 2006 and a slowing of the agency's budget increases over the past 2 fiscal years. This testimony, which is based on both current and past GAO work, synthesizes the results of these reviews as they pertain to meeting performance goals, adjusting to added responsibilities, acquiring new assets (especially the Deepwater program--to replace or upgrade cutters and aircraft, and the Rescue 21 program--to modernize rescue communications), and meeting other future challenges.
According to the Coast Guard, the agency's fiscal year 2005 performance, as self-measured by its ability to meet program goals, was the highest since the terrorist attacks in September 2001. Even with the need to sustain new homeland security duties, respond to particularly destructive hurricanes, and cope with aging assets, the Coast Guard reported meeting or exceeding performance targets for 7 of 11 mission programs, and it anticipates meeting the target for 1 more program once final results for the year are available. In particular, based on our discussions with Coast Guard and other officials, as well as our review of pertinent documents, the Coast Guard's response to Hurricane Katrina highlighted three elements key to its mission performance: a priority on training and contingency planning, a flexible organizational structure, and the agency's operational principles. Three organizational changes appear to be helping the Coast Guard adjust to added responsibilities. First, according to agency officials, a realigned field structure will allow local commanders to manage resources more efficiently. Second, according to the Coast Guard, a new response team for maritime security is expected to provide greater counterterrorism capability. Finally, new and expanded partnerships inside and outside the federal government have the potential to improve operational effectiveness and efficiency. While some progress in acquisition management has been made, continued attention is warranted. Within the Deepwater program, additional action is needed before certain past recommendations can be considered as fully implemented. Also, the program recently had difficulties in acquiring Fast Response Cutters to replace aging patrol boats. For the Rescue 21 program, deficiencies in management and oversight appear similar to those that plagued the Deepwater program, leading to delays and cost overruns, and demonstrating that the Coast Guard has not translated past lessons learned into improved acquisition practices. Two additional future challenges also bear close attention: deteriorating buoy tenders and icebreakers that may need additional resources to sustain or replace them, and maintaining mission balance while taking on a new homeland security mission outside the agency's traditional focus on the maritime environment.
GAO-06-448T, Coast Guard: Observations on Agency Performance, Operations and Future Challenges
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GAO:
For Release on Delivery Expected at 10:30 a.m. EDT:
Thursday, June 15, 2006:
Coast Guard:
Observations on Agency Performance, Operations and Future Challenges:
Statement of Stephen L. Caldwell, Acting Director:
Homeland Security and Justice Issues:
GAO-06-448T:
Testimony before the Subcommittee on Fisheries and Coast Guard,
Committee on Commerce, Science, and Transportation, U.S. Senate:
GAO Highlights:
Highlights of GAO-06-448T, a testimony before the Subcommittee on
Fisheries and Coast Guard, Committee on Commerce, Science, and
Transportation, U.S. Senate.
Why GAO Did This Study:
The Coast Guard‘s fiscal year 2007 budget request totals $8.4 billion,
an increase of 4 percent ($328 million) over the approved budget for
fiscal year 2006 and a slowing of the agency‘s budget increases over
the past 2 fiscal years.
This testimony, which is based on both current and past GAO work,
synthesizes the results of these reviews as they pertain to the
following:
* meeting performance goals,
* adjusting to added responsibilities,
* acquiring new assets (especially the Deepwater program”to replace or
upgrade cutters and aircraft, and the Rescue 21 program”to modernize
rescue communications), and
* meeting other future challenges.
What GAO Found:
According to the Coast Guard, the agency‘s fiscal year 2005
performance, as self-measured by its ability to meet program goals, was
the highest since the terrorist attacks in September 2001. Even with
the need to sustain new homeland security duties, respond to
particularly destructive hurricanes, and cope with aging assets, the
Coast Guard reported meeting or exceeding performance targets for 7 of
11 mission programs, and it anticipates meeting the target for 1 more
program once final results for the year are available. In particular,
based on our discussions with Coast Guard and other officials, as well
as our review of pertinent documents, the Coast Guard‘s response to
Hurricane Katrina highlighted three elements key to its mission
performance: a priority on training and contingency planning, a
flexible organizational structure, and the agency‘s operational
principles.
Three organizational changes appear to be helping the Coast Guard
adjust to added responsibilities. First, according to agency officials,
a realigned field structure will allow local commanders to manage
resources more efficiently. Second, according to the Coast Guard, a new
response team for maritime security is expected to provide greater
counterterrorism capability. Finally, new and expanded partnerships
inside and outside the federal government have the potential to improve
operational effectiveness and efficiency.
While some progress in acquisition management has been made, continued
attention is warranted. Within the Deepwater program, additional action
is needed before certain past recommendations can be considered as
fully implemented. Also, the program recently had difficulties in
acquiring Fast Response Cutters to replace aging patrol boats. For the
Rescue 21 program, deficiencies in management and oversight appear
similar to those that plagued the Deepwater program, leading to delays
and cost overruns, and demonstrating that the Coast Guard has not
translated past lessons learned into improved acquisition practices.
Two additional future challenges also bear close attention:
deteriorating buoy tenders and icebreakers that may need additional
resources to sustain or replace them, and maintaining mission balance
while taking on a new homeland security mission outside the agency‘s
traditional focus on the maritime environment.
Figure: Coast Guard Helicopters Such as the HH-65 (left) and HH-60
(right) Shown Here Were Extensively Involved in the Rescues of Stranded
Persons Following Hurricane Katrina.
[See PDF for Image]
[End of Figure]
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-448T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Stephen L. Caldwell (202)
512-9610 or caldwells@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
2007 budget request for the Coast Guard--funding that the Coast Guard
believes is critical to improving its performance and reducing
vulnerabilities within the U.S. maritime domain. As you know, the Coast
Guard has faced many extraordinary challenges and new responsibilities
in recent years, including heightened responsibility for protecting
America's ports, waterways, and waterside facilities from terrorist
attacks, while maintaining responsibility for many other programs
important to the nation's interests, such as helping stem the flow of
illegal drugs and illegal immigration, protecting important fishing
grounds, and responding to marine pollution. Overall, the Coast Guard
has met these heightened responsibilities despite added challenges
posed by the declining condition of its aging assets and special surge
operations it has periodically experienced--such as responding to
Hurricane Katrina.
My testimony today provides (1) an overview of the Coast Guard's fiscal
year 2007 budget request and key performance information, (2) a
discussion of the changes and initiatives the Coast Guard has
implemented to meet growing responsibilities, (3) a status update on
some current acquisition efforts, and (4) a look at some future Coast
Guard challenges as it attempts to balance its various missions. My
testimony is drawn from a number of reports we have issued on Coast
Guard operations, as well as from work done specifically for this
hearing. In some cases our work is still ongoing and fuller results
will be reported once the engagements are completed. The scope of our
work did not include evaluating whether the proposed funding levels are
commensurate with the Coast Guard's stated needs. All of our work has
been conducted in accordance with generally accepted government
auditing standards. (See app. I for additional information regarding
our scope and methodology and see related GAO reports for a listing of
recent reports.)
Summary:
Although the Coast Guard's budget continues to grow, the agency's
fiscal year 2007 budget request indicates a more moderate growth than
that of previous years. Even with the need to sustain new homeland
security duties, respond to particularly destructive hurricanes, and
cope with aging assets, the Coast Guard reported that its fiscal year
2005 performance, as self-measured by its ability to meet performance
targets, was the highest since the terrorist attacks in September 2001.
The Coast Guard reported that it met or exceeded performance targets
for 7 of 11 programs, and anticipates meeting the target for 1
additional program once final results for the year are available. Coast
Guard officials attributed the missed targets to, among other factors,
the increased flow of migrants and staffing shortages for certain
security units within the defense readiness program. In particular, our
ongoing work found that the Coast Guard's response to Hurricane Katrina
highlighted three key elements that enabled the Coast Guard to provide
an unprecedented search and rescue response during Hurricane Katrina: a
priority on training and contingency planning, a flexible
organizational structure, and the agency's operational principles.
The Coast Guard has undertaken three organizational changes designed to
assist it in adjusting to its added responsibilities. First, it is
completing a realignment of its field structure, an effort that,
according to the Coast Guard, will allow a field level commanding
officer to manage operational resources more efficiently. Second, Coast
Guard officials expect that the development and implementation of a new
Maritime Security Response Team, modeled after Department of Defense
(DOD) counter-terrorism teams, will provide increased counterterrorism
capability to respond to threats in waters under Coast Guard
jurisdiction. Finally, new and expanded partnerships that cut across
both government and industry to address maritime security concerns also
have the potential to improve operational effectiveness and efficiency.
For instance, under requirements of the Maritime Transportation
Security Act of 2002 (MTSA), each Coast Guard Captain of the Port is
required to work in conjunction with a range of local partners to
develop a security plan for its port area to address security
vulnerabilities and respond to any incidents.[Footnote 1] Another
partnership that leverages governmental resources is the Coast Guard's
relationship with the National Oceanic and Atmospheric Administration
(NOAA). This partnership allows vessel tracking information obtained
with NOAA technology to be shared with the Coast Guard, thereby
assisting the Coast Guard with its enforcement of domestic fisheries
regulations.
Our recent reviews indicate that while the Coast Guard has made
progress in managing Deepwater acquisitions, further actions are needed
and the lessons learned from this effort have not been applied to other
ongoing acquisitions. In specific, the Coast Guard has successfully
implemented most of GAO's recommendations to improve the Integrated
Deepwater System, the largest, and most significant ongoing Coast Guard
acquisition initiative. However, further attention and action are
needed before all of our past recommendations for improving
accountability and program management can be considered fully
implemented. Despite these improvements in program management, the
Deepwater program has continued to encounter difficulties, most
recently in the acquisition of the Fast Response Cutters which are
scheduled to replace the Coast Guard's aging patrol boat fleet.
Meanwhile, the Rescue 21 program--an effort to replace antiquated
command, control, and communication infrastructure used to monitor
mariner distress calls and coordinate search and rescue operations--
continues to be of concern as the program has been plagued by delays,
technical problems, and cost escalation. Currently estimated
implementation costs have escalated from $250 million to more than
$710.5 million, and GAO's analysis, based on prior trends, indicates
that Rescue 21 costs could be as high as $872 million. In addition, the
program's originally proposed schedule for full implementation has
slipped by 5 years resulting in continuing performance challenges for
field units, and the potential for additional costs to keep the current
system functioning until it is replaced. These problems and the causes
underlying them have much in common with the issues we identified with
the Deepwater program which has also experienced management and
contractor oversight problems, schedule delays, and cost escalation. A
third acquisition effort, designed to provide the Coast Guard with the
capability to transmit and receive information to and from vessels
entering and leaving U.S. waters, is still early in its development,
limiting the Coast Guard's ability to identify and leverage potential
partners to share costs, according to Coast Guard officials. The Coast
Guard is taking steps to better manage these programs, but it cannot
lose sight of the need to address and resolve these ongoing acquisition
management concerns.
The Coast Guard also faces two additional challenges in managing its
assets and balancing its various missions. Our ongoing work for this
committee found that some of the Coast Guard's buoy tenders and
icebreakers are deteriorating and may need additional resources to
sustain or replace them. Like the Deepwater assets, many of these types
of assets are approaching or have exceeded their initial design service
lives, and our preliminary observations indicate that the Coast Guard's
key measure of their condition shows a decline for some assets of both
types. Although the Coast Guard has identified the need to sustain or
replace these assets, no funds have been budgeted to carry out this
project. A second challenge the Coast Guard faces is the addition of a
new mission, defending the air space surrounding the nation's capital,
which falls outside its traditional focus on the maritime environment
and therefore represents further growth in its responsibilities. While
groundwork has been laid through the request of fiscal year 2007 funds
to purchase the equipment necessary to carry out this new
responsibility, it is likely to require additional personnel and
training.
Budget Request Reflects Moderate Growth, While Overall Program
Performance Improved:
The Coast Guard's fiscal year 2007 budget request shows continued
growth but at a more moderate pace than that of the past 2 years. The
current budget request reflects a proposed increase of about $328
million, compared to increases for each of the past 2 budget years that
exceeded $500 million for each year.[Footnote 2] (See fig. 1.) About
$5.5 billion, or more than 65 percent of the total funding request of
$8.4 billion, is for operating expenditures.[Footnote 3] The
acquisition, construction, and improvements (AC&I) account amounts to
another $1.2 billion, or about 14 percent, and the remainder is
primarily for retiree pay and healthcare fund contributions. (See app.
II for more detail on the Coast Guard's fiscal years 2002-2007 budget
accounts.)
If the Coast Guard's total budget request is granted, overall funding
will have increased by more than 50 percent since fiscal year 2002, an
increase of $2.82 billion. According to Coast Guard officials, much of
the additional $328 million in this fiscal year's budget request, which
is about 4 percent over and above the fiscal year 2006 budget of $8.1
billion, covers such things as salary and benefit increases and
maintenance. In addition, more than $57 million of this increase is to
establish a permanent National Capital Region Air Defense program to
enforce the National Capital Region no-fly zone, a program previously
conducted by U.S. Customs and Border Protection (CBP).[Footnote 4] By
comparison, the increases for the AC&I account for this time period
have been even greater than the overall funding increase, growing by 66
percent since fiscal year 2002. However, the fiscal year 2007 AC&I
budget request of almost $1.2 billion represents little change in
funding from the Coast Guard's fiscal year 2006 enacted AC&I budget.
Figure 1: Coast Guard Budget from Fiscal Year 2002 to Fiscal Year 2007:
[See PDF for image]
[End of figure]
Notes: In order to provide greater year-to-year consistency for budget
comparisons, the fiscal years 2005 and 2006 enacted amounts do not
include supplemental appropriations. The supplemental amounts were
largely for unforeseen events. According to a Coast Guard budget
official, in fiscal year 2005 the Coast Guard received supplemental
appropriations of $34 million for Operation Iraqi Freedom and $195
million for hurricane and tsunami relief efforts, and in fiscal year
2006 the Coast Guard received supplemental appropriations of $100
million for Operation Iraqi Freedom and $206 million for Hurricane
Katrina relief efforts.
The total Coast Guard budget is a sum of operating expenses;
AC&I; and other accounts such as environmental compliance and
restoration; alteration of bridges; retired pay; research, development,
testing and evaluation; oil spill recovery; boat safety; and Medicare-
eligible healthcare fund contributions. Operating expenses and the AC&I
accounts are almost 80 percent of the total Coast Guard's budget
request for fiscal year 2007, and are shown because they are of primary
interest for this analysis. Detailed information on all of these
accounts is in app. II.
Coast Guard Reported Progress Made in Meeting Program Performance
Targets:
Even with sustained homeland security responsibilities, aging assets,
and a particularly destructive hurricane season stretching resources
across the agency, in fiscal year 2005 the Coast Guard reported that 7
of its 11 programs met or exceeded program performance
targets.[Footnote 5] In addition, the agency reported that it
anticipates meeting the target for 1 additional program when final
results become available in July 2006, potentially bringing the total
met targets to 8 out of 11 programs.[Footnote 6] According to Coast
Guard documents, the agency missed targets for three programs--
undocumented migrant interdiction, defense readiness, and living marine
resources--in fiscal year 2005, as it had in some previous years. Coast
Guard officials attributed these missed targets to, among other
factors, the increased flow of migrants and staffing shortages for
certain security units within the defense readiness program. (See app.
III for more detailed information on each program.) If the Coast Guard
meets 8 performance targets as it predicts, the results would represent
the greatest number of performance targets met in the last 4 years.
(See fig. 2.) The preliminary results of our ongoing work reviewing the
Coast Guard's six non-homeland security performance measures suggests
that, for the most part, the data used for the measures are reliable
and the measures themselves are sound. That is, they are objective,
measurable, and quantifiable as well as cover key program activities.
However, given the DHS policy of reporting only one main performance
measure per program and the limits on how comprehensive a single
measure is likely to be, there may be opportunities to provide
additional context and information to decisionmakers about Coast Guard
performance results. We will provide final results on this work in a
report to be published later this summer.
Figure 2: Number of Performance Targets the Coast Guard Met, or
Anticipates Meeting, for the Coast Guard's 11 Programs for Fiscal Years
2002 through 2005:
[See PDF for image]
Notes: Fiscal year 2005 data includes the illegal drug interdiction
program for which final data are not yet available. Data for this
program are not available because the performance measures are based,
in part, on data from other agencies that are not reported until later
in the fiscal year. However, based on past data trends and performance
data collected to date, the Coast Guard anticipates meeting the
performance target for this program.
For fiscal year 2002 the Coast Guard had performance measures and
targets for 9 of its 11 programs--the two programs without measures and
targets were the marine safety and ports, waterways, and coastal
security programs. For fiscal years 2003 and 2004, the Coast Guard had
performance measures and targets for 10 of its 11 programs--the one
program without a measure and target during this time was the ports,
waterways, and coastal security program.
[End of figure]
Overall Progress Came Despite Additional Demands Posed by Hurricane
Katrina:
This overall progress came in a year when the Coast Guard faced
significant additional demands brought on by Hurricane Katrina. As it
had to do when it implemented MTSA and when it conducted heightened
port security patrols immediately after the September 2001 terrorist
attacks, the Coast Guard found itself operating at an increased
operational tempo for part of fiscal year 2005. Although the Hurricane
Katrina response period was relatively brief for some missions, such as
search and rescue, Coast Guard officials told us that the sheer
magnitude of the response made it unique, and responding to it tested
the agency's preparedness and ability to mobilize large numbers of
personnel and assets within a short time. In this effort, the Coast
Guard had several responsibilities during and immediately following the
hurricane: to conduct search and rescue;
to direct the closing and re- opening of ports in cooperation with
stakeholders,(such as shipping companies, harbor police, DHS, CBP, and
local fire and police departments), to ensure safety and facilitate
commerce, thereby lessening the economic impact of the storm on the
nation;
and to monitor pollution clean up of the many oil spills that occurred
in the wake of the flooding. For the purposes of this testimony, I
would like to focus on the Coast Guard's search and rescue response. We
are conducting a more complete review of the Coast Guard's role and
response to Hurricane Katrina across several mission areas under the
authority of the Comptroller General, and expect to provide additional
information later this summer. So far, however, this work is showing
that three factors appear to have been key to the Coast Guard's
response to Hurricane Katrina:
* The Coast Guard was prepared to respond to search and rescue needs.
Although the magnitude of Hurricane Katrina required substantial
response and relief efforts, the Coast Guard was well prepared to act
since it places a priority on training and contingency planning. First
and foremost, the missions the Coast Guard performed during Hurricane
Katrina were the same missions that the Coast Guard trains for and
typically performs on a day-to-day basis. The Coast Guard's mission
areas include, among others, search and rescue, law enforcement,
regulatory functions, and, most recently, homeland security
responsibilities, allowing the Coast Guard to respond and act in a
myriad of situations. However, with regard to Hurricane Katrina, the
magnitude of the Coast Guard's mission activity appears noteworthy. For
example, for all of 2004, according to the Coast Guard's Fiscal Year
2005 Report, the Coast Guard responded to more than 32,000 calls for
rescue assistance and saved nearly 5,500 lives. By comparison, in 17
days of Hurricane Katrina response, Coast Guard officials reported
conducting over 33,500 rescues, including rescuing 24,135 people by
boat and helicopter and evacuating 9,409 people from hospitals. Coast
Guard officials we spoke to underscored the importance of the planning,
preparation, and training that they regularly conduct that allowed them
to complete the many challenging missions presented by Katrina.
* The Coast Guard's organizational structure and practices facilitated
the agency's response. In terms of the Coast Guard's organizational
structure, the Coast Guard has personnel and assets throughout the
United States, which allows for more flexible response to threats. In
terms of Coast Guard practices, according to the hurricane and severe
weather plans we reviewed for Coast Guard Districts 7 (Florida region)
and 8 (Gulf region), and discussions we had in Washington, D.C.,
Virginia, Florida, Alabama, and Louisiana with Coast Guard officials
responsible for implementing those plans, the Coast Guard tracks the
likely path of an approaching storm, anticipates the necessary assets
to address the storm's impact, and repositions personnel and aircraft
out of harm's way, with a focus on reconstituting assets to respond to
local needs once it is safe to do so. Given the magnitude of Hurricane
Katrina, the Coast Guard took a more centralized approach to prioritize
personnel and assets to respond, but the operational command decisions
remained at the local level. That is, the Coast Guard's Atlantic Area
Command played a key role in identifying additional Coast Guard
resources, and worked with District Commands to quickly move those
resources to the affected Gulf region, while local operational
commanders directed personnel and assets to priority missions based on
their on-scene knowledge.
* The Coast Guard's operational principles facilitated the agency's
actions. Throughout our field work, Coast Guard officials referred to
the principles of Coast Guard operations that guide the agency's
actions. Coast Guard officials identified these principles, which
ranged from the importance of having clear objectives and flexibility
to managing risks and exercising restraint, as instrumental in their
preparation for Hurricane Katrina.[Footnote 7] The Coast Guard prides
itself on these operational principles that collectively form the
foundation of Coast Guard culture and actions during operations. These
principles set an expectation for individual leadership in crisis, and
personnel are trained to take responsibility and action as needed based
on relevant authorities and guidance. For example, during the initial
response to Hurricane Katrina, a junior-level pilot, who first arrived
on-scene in New Orleans with the planned mission of conducting an
environmental inspection flight, recognized that search and rescue
helicopters in the area could not communicate with officials on the
ground, including those located at hospitals and at safe landing areas.
This pilot took the initiative while on-scene--an operational
principle--to redirect her planned mission, changing it from an
environmental flight to creating the first airborne communication
platform in the area. Doing so helped ensure that critical information
was relayed to and from helicopter pilots conducting search and rescue
so that they could more safely and efficiently continue their vital
mission. When we consulted her commanding officer about these actions,
he supported her decision and actions and noted that Coast Guard
personnel generally have the flexibility to divert from their intended
mission to accomplish a more important mission, without obtaining
advance supervisory approval. He indicated that this was not only
common practice, but it was supported by a written directive at his
unit.
* While acknowledging the importance of these operational principles,
it is equally important to note that the response to Hurricane Katrina
also hinged on discipline and adherence to critical plans. For example,
multiple aircraft were operating in a confined space with little
separation, thus adhering to critical search and rescue plans, as well
as using experience and judgment, resulted in numerous rescues despite
these difficult circumstances. While the Hurricane Katrina search and
rescue effort was unprecedented, sustaining this effort might have been
much more difficult if it had gone on for a much longer period.
Combining a longer-term catastrophic response with the continuing needs
of the agency's day-to-day missions would be more challenging for a
small service such as the Coast Guard. Relative to other military
services, the Coast Guard is small,and when resources are shifted to
any one specific mission area, other mission areas may suffer.[Footnote
8] For example, Coast Guard units in Florida sent many air and surface
assets to the Gulf region to respond to Hurricane Katrina. While the
assets were deployed to the Gulf region, the Coast Guard noticed a
spike in the level of illegal migration activity off of the Florida
coast. However, once Coast Guard assets returned to the Florida region,
the Coast Guard initiated a more intensive air and sea patrol schedule
to markedly announce their return to the area, and focus on
interdicting illegal migrants.
The Coast Guard Continues with Organizational Changes and Expanded
Partnerships to Meet Growing Responsibilities:
Coast Guard organizational changes and expanded partnerships have
helped to alleviate some resource pressures posed by added
responsibilities or further deterioration of assets, as well as help
accomplish its mission responsibilities. I would like to highlight
three of these efforts: a revised field structure that consolidates
decision-making processes at the operational level into a single
command, a new resource for confronting and neutralizing terrorist
activity, and new and stronger partnerships both within and outside
DHS.
New Field Command Structure Aimed at Improving Operational Efficiency:
In conducting our work for this hearing, we followed up with the Coast
Guard to obtain an update on the implementation of a new field command
structure that unifies previously disparate Coast Guard units, such as
air stations, groups, and marine safety offices into integrated
commands.[Footnote 9] As we reported to you last year, the Coast Guard
began making this change to improve mission performance through better
coordination of Coast Guard command authority with operational
resources such as boats and aircraft.[Footnote 10] Under the previous
field structure, for example, a marine safety officer who had the
authority to inspect a vessel at sea or needed an aerial view of an oil
spill as part of an investigation would often have to coordinate a
request for a boat or an aircraft through a district office, which
would obtain the resource from a group or air station. Under the
realignment, these operational resources are to be available under the
same commanding officer--allowing for more efficient operations. This
revised structure involves dividing operations into 35 geographic
"sectors." Coast Guard officials stated that all 35 sectors have been
established as of May 2006. According to Coast Guard personnel, the
realignment is particularly important for coordinating with other
federal, state, and local agencies, as well as meeting new homeland
security responsibilities and preparing for the challenge of protecting
the United States against terrorist attacks.
New Maritime Security Response Team to Provide Additional Security
Capability:
Another initiative to protect the United States against terrorist
attacks is the Coast Guard's development and implementation of a
Maritime Security Response Team (MSRT)--a prototype team similar to
DOD's counter-terrorism teams. The Coast Guard, in cooperation with DOD
and other federal law enforcement agencies, plans to outfit the MSRT
with specialized tactical equipment and train the team to conduct high-
risk boardings of vessels and perform other offensive counter-terrorism
activities within the maritime environment. The Coast Guard's $4.7
million request for fiscal year 2007 would provide the team with
chemical, biological, radiological, nuclear, and explosive detection
equipment; improve the Coast Guard's Special Missions Training Center
facility; and provide additional personnel and operating capacity for a
third 60-member unit, building the team toward 24/7 response
capabilities. Coast Guard officials said that once the MSRT is fully
developed, it will provide active counter-terrorism and advanced
interdiction operations and address capacity and capability gaps in
national maritime counter-terrorism response.
New and Evolving Coast Guard Partnerships Designed to Improve
Operational Effectiveness and Efficiency:
In addition to partnering efforts associated with the development of
the first MSRT, the Coast Guard is developing other partnerships, both
internal and external to DHS, designed in part to improve operational
effectiveness and efficiency. For example, the Coast Guard is currently
developing a pilot program to increase operational efficiencies between
the Coast Guard and CBP aimed at pushing potential threats away from
U.S. ports. This offshore operation, currently in a pilot stage,
includes the integration of each agency's vessel targeting efforts,
unifies their boarding operations, and includes professional exchange
opportunities. Although this effort is only being tested within the
Pacific Area Command of the Coast Guard, according to a senior Coast
Guard official, the Pacific Command intends to send its results to
Coast Guard headquarters so the agency can determine how to best
implement the program across the Coast Guard at a later date.
In addition to partnering with other federal agencies, the Coast Guard
has also initiated partnerships with both government and industry.
Under regulations implementing MTSA, a Coast Guard Captain of the Port
must develop an Area Maritime Security Plan in consultation with an
Area Maritime Security Committee. These committees are typically
composed of members from federal, local, and state governments;
law enforcement agencies; maritime industry and labor organizations;
and other port stakeholders that may be affected by security policies.
The security plan they develop is intended to provide a communication
and coordination framework for the port stakeholders and law
enforcement officials to follow in addressing security vulnerabilities
and responding to any incidents. Stakeholders in two ports we visited
identified their Area Maritime Security Committees as an invaluable
forum for port partners. For example, they said meetings of these
committees serve as an opportunity for members of the port community to
network with one another, build relationships, address various maritime-
related issues, and coordinate security planning efforts.
The Coast Guard has expanded its partnership with NOAA to enforce
domestic fisheries regulations. NOAA operates a technology-based
system, called the vessel monitoring system, to track and monitor
fishing vessels. This system offers real-time data on a ship's course
and position, where the ship has requested to fish, the type of fishing
requested, and the number of days the ship has been out of port. The
Coast Guard uses this information to assist with its enforcement of
domestic fisheries regulations by identifying vessels that may not be
in compliance with domestic fisheries regulations. For example, the
monitoring information will show if fishing vessels are operating
within a restricted area. According to Coast Guard officials, the
information shared from this partnership has allowed Coast Guard assets
to be used more efficiently in checking on potentially noncompliant
vessels and enforcing fishing laws.
Progress Made with Ongoing Acquisition Efforts, but Continued Attention
Is Warranted:
Our recent reviews indicate that while the Coast Guard has made
progress in managing the Deepwater program, further actions are needed
and the lessons learned from this effort have not been applied to other
ongoing acquisitions. For example, even with the Coast Guard's improved
management and oversight of its Deepwater program, further steps are
needed before all of our past recommendations for improving
accountability and program management can be considered fully
implemented. In addition, the acquisition of Fast Response Cutters has
recently experienced setbacks. Meanwhile, the Rescue 21 program
continues to be of concern as the program has been plagued by delays,
technical problems, and cost escalation--issues that parallel the
problems encountered in the early years of the Deepwater program.
Another program, the Nationwide Automatic Identification System, is
still in early development stages and specific technical system
requirements remain undefined. As a result, according to Coast Guard
officials, this has affected the Coast Guard's efforts to respond to
our recommendation that the agency cultivate potential partnerships in
order to leverage resources toward implementing the system. Because all
of these programs are important for the Coast Guard in meeting growing
operational demands, they bear close monitoring to help ensure they are
delivered in an efficient and effective manner.
Progress Continues in Making Recommended Improvements to Deepwater
Program Management, but Some Recommendations Are Not Yet Fully
Implemented:
One of the largest and most significant acquisitions that the Coast
Guard has undertaken is the upgrade and replacement of its Deepwater
assets, an acquisition approach that has raised a number of management
and accountability concerns over the past 8 years.[Footnote 11] The
Coast Guard has devoted considerable attention to concerns that we and
others raised, in particular to implementing recommendations for
improvement. Our past concerns about the Deepwater program have been in
three main areas--ensuring better program management and oversight,
ensuring greater accountability on the part of the system integrator,
and creating sufficient competition to help act as a control on costs-
-and to address these concerns, we made a total of 11
recommendations.[Footnote 12] Table 1 provides an overview of the 11
recommendations, including their current status. In short, five
recommendations have been fully implemented, five have been partially
implemented, and one has not been implemented.[Footnote 13] Three of
the five partially implemented recommendations appear close to being
fully implemented, in that the actions taken appear to be sufficient
but results are not yet known or final procedural steps (such as
issuing a policy currently in draft form) are not complete. The
remaining two partially implemented recommendations, both of which deal
with effective program management and contractor oversight, remain
somewhat more problematic, and these are discussed further below. In
both cases, however, the steps needed to fully implement these
recommendations are relatively straightforward.
Table 1: Status of GAO Recommendations to the U.S. Coast Guard
Regarding Management of the Deepwater Program:
Areas of concern: Key components of management and oversight are not
effectively implemented;
Recommendations to the U.S. Coast Guard: Put in place a human capital
plan to ensure adequate staffing of the Deepwater program;
Recommendation status: Implemented.
Recommendations to the U.S. Coast Guard: Improve integrated product
teams responsible for managing the program by providing better
training, approving charters, and improving systems for sharing
information between teams;
Recommendation status: Partially implemented.
Recommendations to the U.S. Coast Guard: Provide field personnel with
guidance and training on transitioning to new Deepwater assets;
Recommendation status: Partially implemented.
Areas of concern: Procedures for ensuring contractor accountability are
inadequate;
Recommendations to the U.S. Coast Guard: Develop measurable award fee
criteria consistent with guidance from the Office of Federal
Procurement Policy;
Recommendation status: Implemented[A].
Recommendations to the U.S. Coast Guard: Provide for better input from
Coast Guard technical representatives;
Recommendation status: Implemented.
Recommendations to the U.S. Coast Guard: Hold the system integrator
accountable for improving effectiveness of the integrated product
teams[B];
Recommendation status: Implemented.
Recommendations to the U.S. Coast Guard: Establish a baseline for
determining whether the acquisition approach is costing the government
more than the tradition asset replacement approach;
Recommendation status: Will not be implemented.
Recommendations to the U.S. Coast Guard: Establish a time frame for
putting steps in place to measure contractor's progress toward
improving operational effectiveness;
Recommendation status: Partially implemented.
Recommendations to the U.S. Coast Guard: Establish criteria to
determine when to adjust the project baseline and document the reasons
for change;
Recommendation status: Partially implemented.
Areas of concern: Control of future costs through competition remains
at risk because of weak oversight;
Recommendations to the U.S. Coast Guard: For subcontracts over $5
million awarded by the system integrator to the two major
subcontractors, require notification to the Coast Guard about decision
to perform the work in-house rather than contracting it out;
Recommendation status: Implemented[A].
Recommendations to the U.S. Coast Guard: Develop a comprehensive plan
for holding the system integrator accountable for ensuring adequate
competition among suppliers;
Recommendation status: Partially implemented.
Source: GAO analysis of Coast Guard data.
[A] Determined to be implemented during work performed in 2005 for
GAO's report, Coast Guard: Progress Being Made on Addressing Deepwater
Legacy Asset Condition Issues and Program Management, but Acquisition
Challenges Remain, GAO-05-757 (Washington, D.C.: July 22, 2005).
[B] Integrated product teams are responsible for overall program
planning and management, asset integration, and overseeing delivery of
specific Deepwater assets. They are generally chaired by a
subcontractor representative and consist of members from subcontractors
and the Coast Guard.
[End of table]
Strengthening Integrated Product Teams:
In 2004, we reported that the integrated product teams (IPTs), the
Coast Guard's primary tool for managing the Deepwater program and
overseeing contractor activities, were struggling to carry out their
missions because of four major issues: (1) lack of timely charters to
provide authority needed for decision making, (2) inadequate
communication among team members, (3) high staff turnover, and (4)
insufficient training. Despite progress in addressing these four
issues, we do not consider this recommendation to be fully implemented.
There are indications that the IPTs are still not succeeding in
developing sufficient collaboration among subcontractors. Coast Guard
officials recently reported that collaboration among the subcontractors
continues to be problematic and that the system integrator wields
little influence to compel decisions among them. For example, when
dealing with proposed design changes for assets under construction, the
system integrator has submitted the changes as two separate proposals
from both first-tier subcontractors rather than coordinating the
separate proposals into one coherent plan. According to Coast Guard
performance monitors, because the two proposals often carry a number of
overlapping work items, this approach complicates the Coast Guard's
review of the needed design change. Several improvements designed to
address these problems are under way, but it is too early to determine
if these will effectively eliminate the problems.
Providing Field Personnel with Guidance and Training on Transitioning
to New Deepwater Assets:
In 2004, we reported the Coast Guard had not effectively communicated
decisions on how new Deepwater and existing assets are to be integrated
during the transition and whether Coast Guard or contractor personnel
(or a combination of the two) will be responsible for maintenance of
the Deepwater assets. For example, Coast Guard field personnel,
including senior-level operators and naval engineering support command
officials, said they had not received information about how they would
be able to continue meeting their missions using existing assets while
also being trained on the new assets. Since that time the Coast Guard
has placed more emphasis on outreach to field personnel, including
surveys, face-to-face meetings, and membership in IPTs. Despite these
efforts, there are indications that the actions are not yet sufficient
to consider the recommendation to be fully implemented. In particular,
our review of relevant documents and discussions with key personnel
make clear that field operators and maintenance personnel are still
concerned that their views are not adequately acknowledged and
addressed, and have little information about maintenance and logistics
plans for the new Deepwater assets. For example, though the first
National Security Cutter is to be delivered in August 2007, field and
maintenance officials have yet to receive information on plans for crew
training, necessary shore facility modifications, or how maintenance
and logistics responsibilities will be divided between the Coast Guard
and the system integrator. According to Coast Guard officials, many of
these decisions need to be made and communicated very soon in order to
allow for proper planning and preparation in advance of the National
Security Cutter's delivery.
Design Risks Have Delayed Delivery of the Fast Response Cutter:
Despite improvements in Deepwater program management, the Coast Guard
has encountered difficulties in the conversion and acquisition of one
Deepwater asset--its Fast Response Cutter (FRC). Under the original
2002 Deepwater Implementation Plan, all 49 of the Coast Guard's 110-
foot patrol boats were to be converted into 123-foot patrol boats, with
increased capabilities, as a bridging strategy until a replacement
vessel, the 140-foot FRC, came on line beginning in 2018. The Coast
Guard converted 8 of the 110-foot patrol boats to 123-foot boats, but
discontinued further conversions because the patrol boats were
experiencing technical difficulties, such as hull buckling, and were
not able to meet post-September 11, 2001 mission requirements. This
prompted the Coast Guard to revise this part of the Deepwater program.
The 2005 Revised Deepwater Implementation Plan reflected the Coast
Guard's cancellation of further patrol boat conversions and
acceleration of the design and delivery of the FRC, which was being
designed to use composite materials in the hull, decks and
bulkheads.[Footnote 14] Under the 2005 revised plan, the first FRC was
scheduled to come on line in 2007--11 years earlier than originally
planned.
In late February 2006, the Coast Guard suspended design work on the FRC
because of risks with the emerging design. In particular, an
independent design review by third-party consultants preliminarily
demonstrated, among other things, that the FRC would be far heavier and
less efficient than a typical patrol boat of similar length. As a
result, the Coast Guard is now pursuing three strategies for moving
forward with the FRC acquisition. The first strategy involves
Integrated Coast Guard Systems, the prime contractor, purchasing design
plans for and building an "off-the-shelf" patrol boat that could be
adapted for Coast Guard use as a way to increase patrol hours until the
FRC design could be finalized. The Coast Guard issued a request for
information in April 2006 to assess the off-the shelf options. The
second strategy is to revise the requirements of the FRC in order to
allow for modifications to the current FRC design. Concurrent with the
first two strategies, the Coast Guard's third strategy is to have a
third party reassess the analyses used in the decision to use composite
materials for the FRC to determine if the use of composite materials
will, in fact, reduce total ownership costs. The result of the Coast
Guard pursuing these strategies is that the Coast Guard would end up
with two classes of FRCs. The first class of FRCs would be based on an
adapted design from a patrol boat already on the market, to expedite
delivery, and a follow-on class that would be based on revisions made
to address the problems identified in the original FRC design plans.
Pursuant to these three strategies, Coast Guard officials now estimate
that the first FRC will likely not be delivered until late fiscal year
2009, at the earliest. GAO plans to release a report in late June 2006
providing updated information on the status of FRC design efforts.
Rescue 21 Continues to Be of Concern as It Enters Implementation Phase:
The Rescue 21 acquisition program--the Coast Guard's effort to replace
its antiquated command, control and communication infrastructure used
primarily to monitor mariner distress calls, and coordinate search and
rescue operations--continues to be of concern as the program has been
plagued by numerous delays, technical problems, and cost overruns.
GAO's recently released report shows that the program is about 5 years
behind its originally proposed schedule for full implementation in
2006, as a result primarily of delays in development and testing of the
system.[Footnote 15] In addition, these delays have raised the Coast
Guard's estimated costs for bringing Rescue 21 up to full operating
capability from $250 million to $710.5 million.[Footnote 16] Moreover,
our analysis of contractor performance trends, including a significant
number of contract items not completed as planned and requiring
renegotiation, indicates that total acquisition cost overruns will
continue, and implementation costs could reach as high as $872
million.[Footnote 17]
These delays, technical problems, and cost overruns are the result of
deficiencies in Coast Guard acquisition management and contractor
oversight--deficiencies similar to those that we identified earlier in
the Deepwater program. Such a pattern is of concern because it suggests
that the Coast Guard has not translated the lessons learned from
Deepwater to its overall acquisition management.[Footnote 18] In
particular, deficiencies in the Rescue 21 program include common
problems of acquisition management and oversight including ineffective
project monitoring and risk management, poorly defined user
requirements, unrealistic schedule and cost estimates developed by the
contractor, and limited executive-level oversight. And although the
Coast Guard has developed the high-level requirements for Rescue 21, it
has relied solely on the contractor to manage these requirements.
As discussed, we found similar problems in the Deepwater program with
comparable adverse impacts on cost, schedule and results. For example,
at the start of the program we identified a number of risks that would
need to be addressed for the program to be successful--including
ensuring that procedures and personnel are in place for managing and
overseeing the contractor, and taking steps to minimize potential
problems in developing new technology. Since that time, we have made
numerous specific recommendations to the Coast Guard based on the
deficiencies uncovered by our audits.[Footnote 19]
The delays in implementing Rescue 21 mean that field units will
continue to face limitations in their ability to hear boaters in
distress and the agency will be subject to cost and performance
challenges to maintain the legacy equipment. For example, as a result
of Rescue 21's delay, some field units will likely continue to
experience coverage gaps, limiting their ability to monitor mariners in
distress and some will continue to be at risk of performing larger and
potentially more costly searches due to the legacy system's more
limited capabilities. In addition, because the legacy equipment is over
30 years old, it is at high risk for failure, a factor which could
result in costly repairs. Moreover, although the Coast Guard previously
issued a moratorium on upgrades to the legacy system, delays in the
Coast Guard's implementation of Rescue 21 may require units to upgrade
or install new equipment for the legacy system. This would result in
further costs, and in fact, this has already occurred at some
units.[Footnote 20]
The importance of resolving acquisition management problems is
underscored by the operational benefits that are expected to be
realized from system implementation, and some of these benefits have
already been achieved in a few locations where the Rescue 21 system has
been used. For example, following Hurricane Katrina, the Coast Guard
took advantage of Rescue 21's capabilities to address communications
challenges through an early deployment of a portable antenna to
Louisiana in September 2005 to provide communications capabilities that
had been lost due to the storm. In another case, the direction-finding
capability of the Rescue 21 system helped the Coast Guard to rescue
some stranded boaters who had inaccurately identified their location to
the Coast Guard.
Coast Guard in Early Phase of Developing the Nationwide Automatic
Identification System:
The Coast Guard is at an early phase in developing the Nationwide
Automatic Identification System (NAIS)--an important step in the
overall effort to increase port safety and security by collecting,
integrating, and analyzing information on vessels operating within or
bound for U.S. waters--and is pursuing partnership opportunities that
could potentially accomplish NAIS installation goals more quickly and
reduce installation costs to the federal government. According to the
Coast Guard, NAIS will allow the Coast Guard to both receive and
transmit information to vessels entering and leaving U.S. waters,
supporting both MTSA and the National Plan to Achieve Maritime Domain
Awareness.[Footnote 21] In July 2004, we recommended that the Coast
Guard seek and take advantage of opportunities to partner with
organizations willing to develop systems at their own expense as part
of the acquisition process.[Footnote 22] In response, according to
Coast Guard officials, the agency has begun to develop partnerships.
However, officials noted that because the project and technology are
still in the early stages of development, these partnerships remain
limited. For example, Coast Guard officials said that because the Coast
Guard still does not know all of the specific technical system
requirements, they do not yet know of all the potential partners that
could enable the Coast Guard to leverage resources. In addition, system
requirements may change as the technology is further developed, and as
a result, some current partnerships may be short-term.
The Coast Guard intends to use the fiscal year 2007 budget request of
$11.2 million, along with past unobligated project funding, to award a
NAIS contract in fiscal year 2007 for initial design, logistics, and
deployment in strategic ports and critical coastal areas of the
country. According to the Coast Guard, officials are performing market
research as part of the development phase of the Coast Guard and DHS
major acquisition processes, and the project office is analyzing this
information to determine capabilities within the market to satisfy NAIS
requirements and to establish an optimal acquisition strategy. Coast
Guard officials we spoke with noted that NAIS is currently in the
initial stage of a major acquisition project. As such, the acquisition
project plans for costs, schedule, and performance have not yet been
established. The Coast Guard expects these project plans to be
determined later this year and stated that both the baseline costs and
current completion schedule are early estimates and subject to revision
as final requirements mature.
Coast Guard Faces Future Challenges as It Balances Missions:
The Coast Guard also faces two additional challenges in managing its
assets and balancing its various missions. The first challenge is to
find the resources to replace some additional assets, not included in
the Deepwater program, for its non-homeland security missions. Our
ongoing work found that some of the Coast Guard's existing buoy tenders
and icebreakers are approaching or have exceeded their initial design
service lives. The second challenge the Coast Guard faces is the
addition of a new mission, defending the air space surrounding the
nation's capital, which falls outside its traditional focus on the
maritime environment. While groundwork has been laid through the
request of fiscal year 2007 funds to purchase the equipment necessary
to carry out this new responsibility, it is likely to require
additional personnel and training.
Some ATON and Icebreaking Assets Show Decline and May Need Additional
Resources to Sustain Capabilities:
To facilitate maritime mobility through its aids-to-navigation (ATON)
and icebreaking missions, the Coast Guard uses a variety of assets,
such as buoy tenders and icebreakers. Like the Deepwater legacy assets,
many of these types of assets are approaching or have exceeded their
initial design service lives. We are currently conducting work for this
committee to look at the condition and the Coast Guard's actions to
upgrade or better manage these assets. While this work is still
ongoing, our preliminary observations indicate that some of these
assets are experiencing maintenance issues that may require additional
resources in order to sustain or replace their capabilities.
Coast Guard's Condition Measures Show Decline in Some ATON and
Icebreaking Assets:
From 2000 to 2004, the Coast Guard's key condition measures show a
decline for some ATON and icebreaking assets.[Footnote 23] For ATON and
icebreaking cutter assets,[Footnote 24] the key summary measure of
condition--percent of time free of major casualties[Footnote 25]--
fluctuated but generally remained below target levels[Footnote 26] for
some asset types. According to Coast Guard officials, even though it
did not have a centralized tracking system for the condition of its
ATON small boat assets during this time period, the Coast Guard's
overall assessments of these smaller assets indicated that most of the
asset types were in fair to poor condition. According to Coast Guard
officials and documents, the reasons for their condition include the
fact that many of the asset types are beyond their expected service
lives and the general workload of the assets has increased to carry out
other missions, such as maritime security after September 11, 2001, or
providing disaster response after events such as the recent hurricanes
on the Gulf Coast.
Increasing Amount of Maintenance on ATON and Domestic Icebreaking
Assets Is Being Performed:
Coast Guard personnel reported to us that crew members have had to
spend increasingly more time and resources to troubleshoot and resolve
maintenance issues on the older ATON and domestic icebreaking assets.
The Coast Guard personnel we met with indicated that because the
systems and parts are outdated compared with the technology and
equipment available today, it can be challenging and time consuming to
diagnose a maintenance issue and find parts or determine what
corrective action to take. For example, the propulsion control system
on the 140-foot icebreaking tugs uses circuit cards that were state-of-
the-art when the tugs were commissioned in the late 1970s to 1980s but
are no longer manufactured today and have been superseded by computer
control systems. According to the Coast Guard personnel we met with,
the lack of a readily available supply of these parts has forced
maintenance personnel to order custom made parts or refurbish the
faulty ones, increasing the time and money it takes to address
maintenance problems. The personnel also told us that because such
equipment is outdated, finding knowledgeable individuals to identify
problems with the equipment is difficult, which further complicates the
maintenance of the assets. Crews of other assets we visited also
confirmed the difficulty of diagnosing problems and obtaining
replacement parts for other critical subsystems such as the main diesel
engines.
Aware of such issues, the Coast Guard completed a mission needs
analysis for ATON and domestic icebreaking assets, and developed an
approach to renovate or recapitalize these assets. This analysis, which
was completed in 2002, looked at the condition of the existing assets
and their ability to support mission needs. The analysis concluded that
all of the assets suffered in varying degrees with respect to safety,
supportability, environmental compliance, and habitability, and would
need replacement or rehabilitation to address these issues. In response
to this analysis, the Coast Guard developed a plan to systematically
replace or renovate the assets. Program officials at the Coast Guard
indicated that current estimates place the total cost to carry out this
plan at about $550 million. According to a Coast Guard official,
although resource proposals to carry out this project had been made
during the budget planning processes for fiscal years 2004, 2005, 2006,
and 2007, those proposals were either deferred or terminated by DHS or
the Office of Management and Budget from inclusion in the final budget
requests.
Polar Class Icebreaking Assets Are in Need of Significant Maintenance:
Preliminary observations from our review of the Coast Guard's polar
icebreaking assets revealed similar challenges for the Coast Guard to
perform the maintenance needed to sustain the capabilities of these
assets. As with the other older ATON and domestic icebreaking assets,
the two Polar Class icebreakers that are used for breaking the channel
into the Antarctic research station are reaching the end of their
design service lives of 30 years.[Footnote 27] According to Coast Guard
officials, the icebreakers' age combined with recent harsh ice
conditions and increased operational tempo have left the Polar Class
icebreakers unable to continue the mission in the long term without a
substantial investment in maintenance and equipment renewal. These
officials also told us that while the hull structures are sound,
critical systems such as the main gas turbine controls and the
controllable pitch propeller systems have become unreliable.
Corroborating this account of the icebreakers' condition, an interim
report issued in December 2005 by the National Research Council of the
National Academies also found that the icebreakers have become
inefficient to operate because substantial and increasing maintenance
is required to keep them operating and that significant long-term
maintenance had been deferred over the past several years.[Footnote 28]
Given the age and obsolescence of the Polar Class icebreakers, funding
for maintenance and repair has been and will likely continue to be a
challenge. Coast Guard officials indicated that the cost of maintenance
activity for the icebreakers required that additional funding be
transferred from other Coast Guard asset maintenance accounts in
previous years in order to carry out this maintenance. For fiscal years
2005 and 2006, the Coast Guard also obtained additional funds for
maintenance from the National Science Foundation (NSF).[Footnote 29]
The Coast Guard has considered undertaking a project to extend the
service lives of the existing assets by refurbishing or replacing those
systems that have reached the end of their service lives. The Coast
Guard estimates that this extension project could provide an additional
25 years of service for the existing assets. The cost to carry out this
project for both Polar Class icebreakers is estimated between $552 and
$859 million. Coast Guard capital planning documentation indicates that
failure to fund this project could leave the nation without heavy
icebreaking capability and could jeopardize the investment made in the
nation's Antarctic Program. According to Coast Guard officials, the
agency has identified these needs but has not yet requested funds in
part, because other agencies have taken financial responsibility for
funding polar icebreaking assets.[Footnote 30]
The Coast Guard Is Undertaking New Responsibility beyond Typical
Maritime Missions:
While the Coast Guard continues to face the challenge of performing the
diverse array of responsibilities associated with its many missions,
the fiscal year 2007 budget request includes initial funding for a new
Coast Guard responsibility of enforcing a no-fly zone in the national
capital region. The scope of the mission--intercepting slow and low
flying aircraft--falls outside of the Coast Guard's typical mission of
protecting and preserving the nation's ports and waterways. According
to Coast Guard officials, DHS agreed to this mission through a
memorandum of understanding with DOD and subsequently determined that
the Coast Guard was the best suited agency within DHS to perform the
mission.[Footnote 31] Coast Guard officials also said, the agency will
officially take over these responsibilities from CBP in late fiscal
year 2006. However, despite previous experience performing air
intercept activities, according to Coast Guard officials, the new
homeland security mission has required additional training and
assets.[Footnote 32] The Coast Guard's $57.4 million fiscal year 2007
budget request, the first year of a planned 2-year project, would
provide funding to acquire five of the seven HH-65C helicopters needed
for the mission, and, according to Coast Guard officials, update
infrastructure at Air Station Atlantic City, as well as upgrade
equipment at Reagan National Airport. Officials added that efforts to
train Coast Guard pilots have already been underway. While groundwork
has been laid through the request of fiscal year 2007 funds to purchase
the equipment necessary to carry out this new responsibility, it is
likely to require additional personnel and training.
Concluding Observations:
Several of the developments we are reporting on today are good news.
Despite many demands, the Coast Guard continues to make progress in
meeting its performance targets, and its successful search and rescue
work in responding to Hurricane Katrina is one positive aspect of what
largely otherwise appears to be an ongoing tragedy. Certainly, if one
measure of organizational excellence is performance in crisis,
Hurricane Katrina shows that the Coast Guard is well along on that
scale. Excellence must also be demonstrated in more mundane ways,
however, such as how an organization manages its acquisitions. In this
case, the Coast Guard needs to consistently, and from the beginning,
employ widely known best practices for its acquisition management
processes particularly with respect to developing requirements, project
and risk management, and ensuring proper executive level oversight.
Although the Coast Guard is to be complimented for its willingness to
make improvements after our audits have identified problems, such as
with the Deepwater program, its acquisition management would be better
if the agency employed the lessons once learned and translated them
into generally-improved practices. Better overall practices would help
to ensure that future projects will not repeat past problems and will
be completed on time and at cost.
The Coast Guard has clearly been at the vortex of many of the most
sweeping changes in the federal government's priorities over the past
several years. "Homeland security" carries a much different tone, as
well as budgetary significance, in the national consciousness after
September 11, 2001. However, dramatic infusions of money are no
guarantee of success;
rather they bring added responsibility to ensure that large investments
of taxpayer dollars are wisely spent. Our work has shown that the Coast
Guard continues to face some challenges in balancing all of its
missions and in keeping a sustained focus on managing its significant
capital acquisition programs. Continued efforts are needed to sustain
the progress that has been made thus far.
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.
GAO Contacts and Staff Acknowledgments:
For information about this testimony, please contact Stephen L.
Caldwell, Acting Director, Homeland Security and Justice Issues, at
(202) 512-9610, or caldwells@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this statement. Individuals making key contributions to this
testimony include Joel Aldape, Nancy Briggs, Lisa Canini, Christopher
Conrad, Adam Couvillion, Christine Davis, Josh Diosomito, Michele
Fejfar, Kathryn Godfrey, Christopher Hatscher, Dawn Hoff, Lori Kmetz,
Julie Leetch, Josh Margraf, Dominic Nadarski, Jason Schwartz, and Stan
Stenersen.
[End of section]
Appendix I: Objectives, Scope, and Methodology:
To provide a strategic overview of the President's fiscal year 2007
budget request for the Coast Guard, we analyzed the Coast Guard's
budget justification and other financial documents provided by the
Coast Guard, focusing on several areas of particular congressional
interest. We also interviewed Coast Guard headquarters officials
familiar with the Coast Guard's budget and acquisition processes.
To report on the Coast Guard's progress in meeting its performance
targets, we reviewed Coast Guard data and documentation addressing the
status of performance targets between fiscal years 2002 and 2005. In
reporting the performance results, we did not assess the reliability of
the data or the credibility of the performance measures used by the
Coast Guard. Previous GAO work indicates that the Coast Guard data are
sufficiently reliable for the purposes of reporting on general
performance, but we have not examined the external sources of data used
for these measures. In addition, we are currently involved in ongoing
work looking at the reliability of the data and credibility of
performance measures for the Coast Guard's six non-homeland security
programs.
To determine the status of key outstanding Coast Guard recommendations,
we interviewed Coast Guard headquarters officials regarding the status
of the recommendations--including any progress made to implement them.
We also obtained and reviewed relevant documents from the Coast Guard.
To discuss the Coast Guard's response to Hurricane Katrina, we relied
on our ongoing work regarding Hurricane Katrina, with particular focus
on the Coast Guard's preparation, response, and recovery to Katrina
with respect to search and rescue, pollution response, and facilitation
of maritime missions. To obtain a more detailed understanding of the
Coast Guard's response to Hurricane Katrina, we interviewed officials,
reviewed documents, and conducted site visits at two Coast Guard
Districts, the Atlantic Command, and Coast Guard headquarters. We also
interviewed city and state officials in areas impacted by Hurricane
Katrina and assisted by the Coast Guard.
To determine the Coast Guard's progress in implementing our prior
recommendations related to its Deepwater program, we drew from ongoing
work, which included extensive reviews and analyses of documentation
provided by the Coast Guard. We supplemented our document reviews and
analyses with extensive discussions with officials at the Deepwater
Program Executive Office, as well as with interviews with key Coast
Guard operations and maintenance officials, contract monitors, and
representatives of the system integrator.
To report on the status and cost of Coast Guard's Rescue 21 program, we
drew from our work examining (1) the reasons for significant
implementation delays and cost overruns against Rescue 21's original
2002 proposal; (2) the viability of the Coast Guard's revised cost and
implementation schedule that is projected to reach full operational
capability in 2011; and (3) the impact of Rescue 21's implementation
delay upon the Coast Guard's field units which are awaiting
modernization of antiquated communications equipment. This work has
involved reviewing acquisition plans, implementation schedules and cost
estimates for Rescue 21, as well as documentation regarding problems
associated with the antiquated communications equipment. We also
interviewed Coast Guard field personnel at units using the antiquated
equipment and at the two sites where Rescue 21 has been deployed.
We also drew from our ongoing work to report on Coast Guard's ATON and
icebreaking assets. Specifically, this work is examining (1) the recent
trends in the amount of time ATON and domestic icebreaking assets have
spent performing various missions and the impact of these trends on
their primary missions; (2) the condition of the ATON and domestic
icebreaking assets and the impact of their condition on performing
their primary missions; and (3) the actions the Coast Guard has taken
to upgrade or better manage its ATON and domestic icebreaking assets or
use alternatives to carry out their missions. While conducting this
work, we have interviewed Coast Guard program and maintenance officials
at headquarters, area commands, and selected districts to obtain
information on the missions these assets carry out, the condition of
the assets, and the past and estimated future costs to maintain and
deploy them. We also interviewed these officials and reviewed documents
about the Coast Guard's plans to maintain or replace these assets. We
also analyzed Coast Guard data from 2000 to 2004 on condition tracking
measures, resources spent to operate the assets, and the number of
hours the assets spent on Coast Guard missions. Finally, we interviewed
crew members of various assets, selected by nonprobability sample--to
provide diversity among asset types and locations--to obtain their
views on the condition and maintenance of their assets and any impact
the assets' condition may have had on their ability to carry out their
missions.[Footnote 33]
This testimony is based on published GAO reports and briefings, as well
as additional audit work that was conducted in accordance with
generally accepted government auditing standards. We conducted our work
for this testimony from July 2005 through May 2006.
[End of section]
Appendix II: Breakdown of the Coast Guard's Fiscal Year 2007 Request:
Appendix II provides a breakdown of the Coast Guard's fiscal year 2007
budget request. In addition to operating expenses and acquisition,
construction, and improvements, the remaining Coast Guard budget
accounts include areas such as environmental compliance and
restoration, reserve training, and oil spill recovery. (See table 2.)
Table 2: Coast Guard Funding Accounts by Fiscal Year:
Dollars in millions (in nominal terms):
Operating expenses;
FY 2002: actual: $3,757;
FY 2003: actual: $4,920;
FY 2004: actual: $4,718;
FY 2005: enacted: $5,066;
FY 2006: enacted: $5,231;
FY 2007: request: $5,519.
Acquisition, construction, and improvements;
FY 2002: actual: 702;
FY 2003: actual: 720;
FY 2004: actual: 1,007;
FY 2005: enacted: 1,065;
FY 2006: enacted: 1,220;
FY 2007: request: 1,170.
Environmental compliance and restoration;
FY 2002: actual: 17;
FY 2003: actual: 17;
FY 2004: actual: 17;
FY 2005: enacted: 17;
FY 2006: enacted: 12;
FY 2007: request: 12.
Alteration of bridges;
FY 2002: actual: 15;
FY 2003: actual: 17;
FY 2004: actual: 19;
FY 2005: enacted: 16;
FY 2006: enacted: 15;
FY 2007: request: 0.
Retired pay;
FY 2002: actual: 876;
FY 2003: actual: 889;
FY 2004: actual: 1,020;
FY 2005: enacted: 1,085;
FY 2006: enacted: 1,014;
FY 2007: request: 1,063.
Reserve training;
FY 2002: actual: 83;
FY 2003: actual: 86;
FY 2004: actual: 94;
FY 2005: enacted: 113;
FY 2006: enacted: 118;
FY 2007: request: 124.
Research, development, testing, and evaluation;
FY 2002: actual: 20;
FY 2003: actual: 22;
FY 2004: actual: 15;
FY 2005: enacted: 19;
FY 2006: enacted: 18;
FY 2007: request: 14.
Oil spill recovery;
FY 2002: actual: 68;
FY 2003: actual: 75;
FY 2004: actual: 57;
FY 2005: enacted: 71;
FY 2006: enacted: 168;
FY 2007: request: 127.
Boat safety;
FY 2002: actual: 64;
FY 2003: actual: 65;
FY 2004: actual: 64;
FY 2005: enacted: 64;
FY 2006: enacted: 101;
FY 2007: request: 115.
Medicare-Eligible Retiree Healthcare Fund Contribution[A];
FY 2002: actual: NA;
FY 2003: actual: NA;
FY 2004: actual: NA;
FY 2005: enacted: 237;
FY 2006: enacted: 261;
FY 2007: request: 279.
Source: GAO analysis of Coast Guard data.
Note: NA not available.
[A] Fiscal year 2005 funding for the Medicare-Eligible Retiree
Healthcare Fund Contribution was accounted for within the Operating
Expenses appropriation, but it is displayed here for fiscal year 2005
separately for presentation purposes. Beginning in fiscal year 2006,
the contribution was officially re-allocated from the Operating
Expenses appropriation to the Medicare-Eligible Retiree Healthcare Fund
Contribution appropriation.
[End of table]
[End of section]
Appendix III: Additional Information on Specific Coast Guard Program
Results:
Appendix III provides a detailed list of Coast Guard performance
results for the Coast Guard's 11 programs from fiscal year 2002 through
2005. Shaded entries in table 3 indicate those years that the Coast
Guard reported meeting its target;
unshaded entries indicate those years that the Coast Guard reported not
meeting its target. Each program is discussed in more detail below.
Table 3: Performance Results by Program from Fiscal Year 2002 through
Fiscal Year 2005:
Program: Programs meeting 2005 targets;
Performance target for FY 2005: [Empty].
Program: U.S. Exclusive Economic Zone Enforcement;
Program performance measure: Number of detected Exclusive Economic Zone
incursions by foreign fishing vessels;
Performance results by FY: 2002: 250;
2003: 152;
2004: 247;
2005: 174;
Performance target for FY 2005: 200.
Program: Ice operations (domestic icebreaking);
Program performance measure: Number of waterway closure days;
Performance results by FY: 2002: 7;
2003: 7;
2004: 4;
2005: 0;
Performance target for FY 2005: 2[A].
Program: Search and rescue;
Program performance measure: Percentage of distressed mariners' lives
saved;
Performance results by FY: 2002: 84.4%;
2003: 87.7%;
2004: 86.8%;
2005: 86.1%;
Performance target for FY 2005: 86%.
Program: Aids to navigation;
Program performance measure: Number of collisions, allisions, and
groundings;
Performance results by FY: 2002: 2,098;
2003: 2,000;
2004: 1,876;
2005: 1,825;
Performance target for FY 2005: 1,831.
Program: Ports, waterways, and coastal security;
Program performance measure: Reduce homeland security risk in the
maritime domain;
Performance results by FY: 2002: NA;
2003: NA;
2004: NA;
2005: 14%;
Performance target for FY 2005: NA[B].
Program: Marine environmental protection;
Program performance measure: Average of oil and chemical spills greater
than 100 gallons per 100 million tons shipped;
Performance results by FY: 2002: 35.1;
2003: 29.4;
2004: 22.1;
2005: 18.5;
Performance target for FY 2005: 20.
Program: Marine safety;
Program performance measure: Average of maritime injuries and
fatalities;
Performance results by FY: 2002: 1,332[E];
2003: 1,307;
2004: 1,299;
2005: 1,311;
Performance target for FY 2005: 1,317.
Program: Program expected to meet 2005 target;
Program performance measure: [Empty];
Performance results by FY: 2002: [Empty];
2003: [Empty];
2004: [Empty];
2005: [Empty];
Performance target for FY 2005: [Empty].
Program: Illegal drug interdiction;
Program performance measure: Percentage of cocaine removed out of total
estimated cocaine entering the U.S. through maritime means[D];
Performance results by FY: 2002: Not reported;
2003: Not reported;
2004: 30.7%;
2005: TBD[C];
Performance target for FY 2005: 19%.
Program: Programs not meeting 2005 targets;
Program performance measure: [Empty];
Performance results by FY: 2002: [Empty];
2003: [Empty];
2004: [Empty];
2005: [Empty];
Performance target for FY 2005: [Empty].
Program: Defense readiness;
Program performance measure: Percentage of time units meet combat
readiness level at C-2 level;
Performance results by FY: 2002: 70%;
2003: 78%;
2004: 76%;
2005: 67%;
Performance target for FY 2005: 100%.
Program: Living marine resources;
Program performance measure: Percentage of fisherman found in
compliance with regulations;
Performance results by FY: 2002: 97.3%;
2003: 97.1%;
2004: 96.3%;
2005: 96.4%;
Performance target for FY 2005: 97%.
Program: Undocumented migrant interdiction;
Program performance measure: Percentage of interdicted illegal migrants
entering the U.S. through maritime means;
Performance results by FY: 2002: 88.3%;
2003: 85.3%;
2004: 87.1%;
2005: 85.5%;
Performance target for FY 2005: 88%.
Source: GAO analysis of Coast Guard performance data.
Performance targets met:
Performance targets not met:
Note: TBD, to be determined; NA, not available.
[A] The target for ice operations noted here is for domestic
icebreaking only, and the target level varies according to the index of
severity for an entire winter. Thus, for those winters designated as
severe, the target is 8 or fewer closure days. For winters designated
as average, the target is 2 or fewer closure days. Because 2002 and
2004 were designated as average winters, the 7 and 4 days of closures
did not meet the target.
[B] The ports, waterways, and coastal securities program did not have a
numeric target for the program's performance measure because this was
the first year this performance measure was used and a numeric baseline
had not been established. However, according to the Coast Guard, in the
absence of a numeric target, the program used, and met, a target of
fully implementing all planned activities geared toward lowering the
risk due to terrorism in the maritime domain.
[C] Complete data are not yet available for the illegal drug
interdiction program, however, the Coast Guard anticipates meeting the
performance target for this program based on past performance.
[D] The performance measure for the illegal drug interdiction program,
the percent of cocaine removed, was revised in fiscal year 2004 from
the percent of cocaine seized in order to more accurately report the
impact Coast Guard counter-drug activities have on the illicit drug
trade. As a result, the cocaine removal rates for fiscal years 2002-
2003 are not available.
[E] The Coast Guard did not have a performance target for the marine
safety performance measure in fiscal year 2002. Therefore, we were
unable to determine whether marine safety program results met a
performance target for fiscal year 2002.
[End of table]
Programs Meeting Fiscal Year 2005 Performance Targets:
* U.S. Exclusive Economic Zone Enforcement.[Footnote 34] The Coast
Guard reported that in fiscal year 2005, it met the performance target
for U.S. exclusive economic zone enforcement--defined as the number of
foreign vessel incursions into the U. S. Exclusive Economic Zone, by
detecting 174 foreign vessel incursions, within the performance target
of 200 or less incursions. This represents a more than 30-percent
decrease in foreign vessel incursions since fiscal year 2004, when the
Coast Guard detected 247 incursions. Coast Guard officials attributed
this decrease in incursions to many factors, including the agency's
efforts in combating incursions, such as an increased number of air and
water patrols, and the likelihood that some Mexican fleets known to
cross into U.S. waters were damaged during the 2005 hurricane season.
* Ice operations. To meet this performance target, the Coast Guard's
ice operations program must keep winter waterway closures to 8 days or
fewer for severe winters and less than 2 days per year for average
winters. According to Coast Guard documents, the agency met its target
for an average winter with 0 days of waterway closures during the 2005
ice season.
* Search and rescue. The Coast Guard reported that performance in this
area, as measured by the percentage of mariners' lives saved from
imminent danger, was 86.1 percent, just above the target of 86 percent
for fiscal year 2005. This result is similar to the fiscal year 2004
result of saving 86.8 percent of lives in imminent danger. The Coast
Guard identified continuing improvements in response resources and
improvements made in commercial vessel and recreational boating safety
as the main reasons for continuing to meet the target.
* Aids to navigation. According to Coast Guard reports, the aids to
navigation program performance measure--that is, the 5-year average
number of collisions, allisions, and groundings--improved in fiscal
year 2005 by dropping to 1,825 incidents from 1,876 incidents in fiscal
year 2004. The fiscal year 2005 total was also below the target of
1,831. The Coast Guard attributes this continued decrease to a
multifaceted system of prevention activities, including radio aids to
navigation, communications, vessel traffic services, dredging,
charting, regulations, and licensing.
* Ports, waterways, and coastal security. In fiscal year 2005, the
Coast Guard began using a new measure of program performance--the
percent reduction of terrorism-related risk in the maritime
environment. According to Coast Guard officials, this measure is based
on an assessment of the total amount of maritime risk under the Coast
Guard's authority. At the end of each fiscal year the Coast Guard
calculates the amount of this total risk that has been reduced by the
program's activities throughout the fiscal year. Officials added that
because of the dynamic and changing nature of risk, the total amount of
maritime risk under the Coast Guard's authority--the baseline level of
risk--is recalculated annually. Because this was the first year the
agency used the measure, there was no previous performance baseline to
establish a numeric annual target. However, according to the Coast
Guard, in the absence of a numeric target, the program used, and met a
target of fully implementing all planned activities geared toward
lowering the risk due to terrorism in the maritime domain.
* Marine environmental protection. The marine environmental protection
measure of performance is the 5-year average annual number of oil and
chemical spills greater than 100 gallons per 100 million tons shipped.
According to Coast Guard reports, since fiscal year 2002, the reported
average number of oil and chemical spills has dropped from 35.1 to 18.5
in fiscal year 2005. The Coast Guard identified its prevention,
preparedness, and response programs--including industry partnerships
and incentive programs--as reasons for the drop.
* Marine safety. The marine safety measure--a 5-year average of
passenger and maritime deaths and injuries--achieved its fiscal year
2005 performance target of 1,317. During fiscal year 2005 there were
1,311 incidents, a slight increase from 1,299 incidents in fiscal year
2004. Beginning in fiscal year 2006, the Coast Guard will use a revised
version of this measure that includes injuries of recreational boaters
as well, representing a broader and more complete view of marine
safety.
Program Expected to Meet Fiscal Year 2005 Target:
* Illegal drug interdiction. While complete results for the illegal
drug interdiction performance measure--the rate at which the Coast
Guard removes cocaine bound for the U.S. via non-commercial maritime
transport--are not yet available, the Coast Guard anticipates exceeding
the fiscal year 2005 target of removing 19 percent or more of cocaine
bound for the U.S. According to Coast Guard officials, in fiscal year
2005 the Coast Guard removed a record 137.5 metric tons of cocaine
bound for the U.S. Coast Guard officials believe that this record
amount of cocaine removed will result in exceeding the fiscal year 2005
performance target. Final program results are due to be published in
July 2006.
Programs Not Meeting Targets in Fiscal Year 2005:
* Defense Readiness. Defense readiness is measured by the percent of
time that units meet combat readiness status at a C-2 level.[Footnote
35] The Coast Guard reported that the overall level of performance for
the defense readiness program decreased for the second consecutive year
from a high of 78 percent in fiscal year 2003, to 76 percent in fiscal
year 2004, and 67 percent in fiscal year 2005. According to Coast Guard
officials, this decline in recent years was because of staffing
shortages for certain security units within the defense readiness
mission. According to Coast Guard officials, the agency intends to
solve these staffing problems by offering incentives for participation
as well as making participation mandatory instead of voluntary, as it
was previously.
* Living marine resources. The Coast Guard reported that the
performance measure for living marine resources--defined as the
percentage of fishermen complying with federal regulations--was 96.4
percent, just below the target of 97 percent for fiscal year 2005. This
result is similar to the fiscal year 2004 result of 96.3 percent.
According to Coast Guard officials, the agency missed the fiscal year
2005 target because of a variety of economic conditions and variables
beyond Coast Guard control, such as hurricane damage, high fuel costs,
fewer days-at-sea allocations, and lucrative seafood prices in some
fisheries--which created greater incentives for fishermen to violate
fishery regulations. The Coast Guard conducted 6,076 fisheries
boardings in fiscal year 2005, an increase of more than 30 percent
since fiscal year 2004. However, it is important to note that the
compliance rate is a conservative estimate of agency performance
because the Coast Guard targets vessels for boarding, thereby making it
more likely that they will find vessels that are not in compliance with
fishery regulations. According to Coast Guard officials, a key
contributor to targeting vessels is the vessel monitoring system, which
has enhanced the agency's ability to target vessels by providing more
timely information.
* Undocumented migrant interdiction. According to Coast Guard reports,
in fiscal year 2005 the Coast Guard did not meet its performance target
of interdicting or deterring at least 88 percent of undocumented aliens
from Cuba, Haiti, the Dominican Republic, and China attempting to enter
the U.S. through maritime routes. The Coast Guard identified 5,830
successful arrivals out of an estimated threat of 40,500 migrants
yielding an interdiction and deterrence rate of 85.5 percent, a
decrease from the fiscal year 2004 result of 87.1 percent. According to
the Coast Guard, program performance decreased because the flow of
migrants was higher than in previous years, increasing from almost
22,000 in fiscal year 2002, to more than 40,000 in fiscal year 2005.
Coast Guard officials said that the agency is developing a new measure
to better account for both the Coast Guard's efforts and the migrant
flow to more accurately report program performance. This new measure
will include migrants of all nationalities that successfully arrive in
the U.S. through maritime routes.
[End of section]
Related GAO Products:
United States Coast Guard: Improvements Needed in Management and
Oversight of Rescue System Acquisition. GAO-06-623. Washington, D.C.:
May 31, 2006.
Coast Guard: Changes in Deepwater Acquisition Plan Appear Sound, and
Program Management Has Improved, but Continued Monitoring Is Warranted.
GAO-06-546. Washington, D.C.: April 28, 2006.
Coast Guard: Progress Being Made on Addressing Deepwater Legacy Asset
Condition Issues and Program Management, but Acquisition Challenges
Remain. GAO-05-757. Washington, D.C.: July 22, 2005.
Coast Guard: Preliminary Observations on the Condition of Deepwater
Legacy Assets and Acquisition Management Challenges. GAO-05-651T.
Washington, D.C.: June 21, 2005.
Maritime Security: Enhancements Made, but Implementation and
Sustainability Remain Key Challenges. GAO-05-448T. Washington, D.C.:
May 17, 2005.
Coast Guard: Preliminary Observations on the Condition of Deepwater
Legacy Assets and Acquisition Management Challenges. GAO05-307T.
Washington, D.C.: April 20, 2005.
Coast Guard: Observations on Agency Priorities in Fiscal Year 2006
Budget Request. GAO-05-364T. Washington, D.C.: March 17, 2005.
Coast Guard: Station Readiness Improving, but Resource Challenges and
Management Concerns Remain. GAO-05-161. Washington, D.C.: January 31,
2005.
Maritime Security: Better Planning Needed to Help Ensure an Effective
Port Security Assessment Program. GAO-04-1062. Washington, D.C.:
September 30, 2004.
Maritime Security: Partnering Could Reduce Federal Costs and Facilitate
Implementation of Automatic Vessel Identification System. GAO-04-868.
Washington, D.C.: July 23, 2004.
Maritime Security: Substantial Work Remains to Translate New Planning
Requirements into Effective Port Security. GAO-04-838. Washington,
D.C.: June 30, 2004.
Coast Guard: Deepwater Program Acquisition Schedule Update Needed. GAO-
04-695. Washington, D.C.: June 14, 2004.
Coast Guard: Station Spending Requirements Met, but Better Processes
Needed to Track Designated Funds. GAO-04-704. Washington, D.C.: May 28,
2004.
Coast Guard: Key Management and Budget Challenges for Fiscal Year 2005
and Beyond. GAO-04-636T. Washington, D.C.: April 7, 2004.
Coast Guard: Relationship between Resources Used and Results Achieved
Needs to Be Clearer. GAO-04-432. Washington, D.C.: March 22, 2004.
Contract Management: Coast Guard's Deepwater Program Needs Increased
Attention to Management and Contractor Oversight. GAO-04-380.
Washington, D.C.: March 9, 2004.
Coast Guard: New Communication System to Support Search and Rescue
Faces Challenges. GAO-03-1111. Washington, D.C.: September 30, 2003.
Maritime Security: Progress Made in Implementing Maritime
Transportation Security Act, but Concerns Remain. GAO-03-1155T.
Washington, D.C.: September 9, 2003.
Coast Guard: Actions Needed to Mitigate Deepwater Project Risks. GAO-
01-659T. Washington, D.C.: May 3, 2001.
Coast Guard: Progress Being Made on Deepwater Project, but Risks
Remain. GAO-01-564. Washington, D.C.: May 2, 2001.
Coast Guard: Strategies for Procuring New Ships, Aircraft, and Other
Assets. GAO/T-HEHS-99-116. Washington, D.C.: Mar. 16, 1999.
Coast Guard's Acquisition Management: Deepwater Project's Justification
and Affordability Need to Be Addressed More Thoroughly. GAO/RCED-99-6.
Washington, D.C.: October 26, 1998.
FOOTNOTES
[1] Pub. L. No. 107-295, 116 Stat. 2064 (2002).
[2] GAO's analysis of the Coast Guard's budget is presented in nominal
terms throughout this testimony.
[3] The $8.4 billion request for the Coast Guard represents about 20
percent of the Department of Homeland Security's (DHS) budget request
for fiscal year 2007.
[4] In addition to the $57.4 million request, the Coast Guard's fiscal
year 2007 budget request includes a $5 million transfer from CBP to
support the National Capital Regional Air Defense program.
[5] These seven programs are ice operations, search and rescue, marine
environmental protection, marine safety, aids to navigation, U.S.
exclusive economic zone enforcement, and ports, waterways, and coastal
security.
[6] The one additional program the Coast Guard anticipates meeting the
target for is the illegal drug interdiction program.
[7] The Coast Guard's seven operational principles include the
Principle of: (1) Clear Objective, (2) Effective Presence, (3) Unity of
Effort, (4) On-Scene Initiative, (5) Flexibility, (6) Managed Risk, and
(7) Restraint. U.S. Department of Transportation, Coast Guard
Publication 1, U.S. Coast Guard: America's Maritime Guardian,
(Washington DC, 2002).
[8] Consisting of approximately 39,000 active duty personnel, the Coast
Guard is a multi-mission agency with a longstanding federal leadership
role in protecting life and property at sea, such as directing search
and rescue operations. Furthermore, the Coast Guard is a military
service responsible for protecting U.S. ports and waterways. Other U.S.
military branches include: U.S. Army with approximately 488,900 active
duty personnel;
U.S. Navy with approximately 358,700 active duty personnel;
U.S. Air Force with approximately 351,700 active duty personnel;
and U.S. Marines with approximately 178,700 active duty personnel.
[9] A Coast Guard group is an operational unit that oversees station
operations and provides guidance on policy and administrative matters.
[10] GAO, Coast Guard: Observations on Agency Priorities in Fiscal Year
2006 Budget Request, GAO-05-364T (Washington, D.C.: Mar. 17, 2005).
[11] GAO, Contract Management: Coast Guard's Deepwater Program Needs
Increased Attention to Management and Contractor Oversight, GAO-04-380
(Washington, D.C.: Mar. 9, 2004).
[12] In June 2002, the Coast Guard contracted with Integrated Coast
Guard Systems to identify and deliver the assets needed to meet a set
of mission requirements specified by the Coast Guard. Integrated Coast
Guard Systems is a business entity jointly owned by Lockheed Martin
Corporation and Northrop Grumman Ship Systems, which act as first-tier
subcontractors and either provide Deepwater assets or award second-tier
subcontracts for providing the assets.
[13] The Coast Guard disagreed with and declined to implement a
recommendation that pertained to updating its cost baseline to
determine whether the Deepwater acquisition approach is costing more
than a conventional acquisition approach. While we stand behind our
original recommendation, we decided not to pursue it further because
the Coast Guard has decided not to take action on this issue.
[14] Composite materials, as used in shipbuilding, are typically fiber-
reinforced plastic laminates consisting of plies of various reinforcing
fabrics laminated together. Integrated Coast Guard Systems decided to
use composite materials for the FRC's hull after an analysis of
alternatives found that the use of such materials instead of steel
generally offers several advantages, such as lower maintenance and life
cycle costs, a longer service life, and reduced weight.
[15] GAO, United States Coast Guard: Improvements Needed in Management
and Oversight of Rescue System Acquisition, GAO-06-623 (Washington,
D.C.: May 31, 2006).
[16] In April 2006, the Department of Homeland Security approved a new
acquisition program baseline for Rescue 21 with a total acquisition
cost of $730.2 million after decreasing certain functionality.
[17] The Coast Guard's fiscal year 2007 budget request for Rescue 21 is
$40 million, a slight decrease from the $41 million Congress approved
for fiscal year 2006.
[18] Our concerns from past audits of the Deepwater acquisition focus
on the Coast Guard's overall ability to effectively and efficiently
manage its major acquisitions, oversee contractors, and translate
lessons learned from one program to another.
[19] GAO-05-757;
Coast Guard: Preliminary Observations on the Condition of Deepwater
Legacy Assets and Acquisition Management Challenges, GAO-05-651T
(Washington D.C.: June 21, 2005);
Coast Guard: Preliminary Observations on the Condition of Deepwater
Legacy Assets and Acquisition Management Challenges, GAO05-307T
(Washington D.C.: Apr. 20, 2005);
GAO-05-364T;
Coast Guard: Deepwater Program Acquisition Schedule Update Needed, GAO-
04-695 (Washington D.C.: June 14, 2004);
GAO-04-380; Coast Guard: Actions Needed to Mitigate Deepwater Project
Risks, GAO-01-659T (Washington, D.C.: May 3, 2001); Coast Guard:
Progress Being Made on Deepwater Project, but Risks Remain, GAO-01-564
(Washington D.C.: May 2, 2001); and Coast Guard: Strategies for
Procuring New Ships, Aircraft, and Other Assets, GAO/T-RCED-99-116
(Washington, D.C.: Mar. 16, 1999).
[20] Coast Guard officials reported that the agency upgraded a console
at one unit to mitigate operational challenges and installed a new
antenna at a second unit to address coverage gaps.
[21] The National Plan to Achieve Maritime Domain Awareness was
developed in October 2005 in support of the National Strategy for
Maritime Security, as directed by National Security Presidential
Directive-41/Homeland Security Presidential Directive-13. The plan
outlines national priorities for achieving maritime domain awareness,
including near-term and long-term objectives, required program and
resource implications, and recommendations for organizational or policy
changes.
[22] GAO, Maritime Security: Partnering Could Reduce Federal Costs and
Facilitate Implementation of Automatic Vessel Identification System,
GAO-04-868 (Washington, D.C.: July 23, 2004).
[23] The assets discussed here vary greatly in terms of their size,
age, and operating environment. In terms of size they range from a 420-
foot polar icebreaker to a 21-foot trailerable boat to service aids-to-
navigation. In terms of age, the range is 2 years for recently
commissioned seagoing buoy tenders to more than 60 years for inland
construction and buoy tenders. ATON assets are located on both East and
West Coasts, as well as the Gulf Coast and major Inland Rivers such as
the Mississippi while domestic icebreakers are located on the East
Coast and Great Lakes. The polar icebreakers operate in both Arctic and
Antarctic regions.
[24] The Coast Guard defines a cutter as any Coast Guard vessel 65 feet
in length or greater, having adequate accommodations for crew to live
on board. Boats are defined as those vessels under 65 feet in length
that usually operate near shore and on inland waterways.
[25] A casualty is a deficiency in mission essential equipment;
a major casualty causes the major degradation or loss of at least one
primary mission.
[26] The standard target level for the "percent of time free of major
casualties" is 72 percent, which is a Navy standard that has been
adopted by the Coast Guard.
[27] In addition to the two Polar Class icebreakers, the Coast Guard
acquired a third icebreaker, the Healy, in 2000. Unlike the Polar Class
icebreakers, the Healy was designed to be an Arctic scientific platform
and does not have the capabilities to break ice in the Antarctic under
most conditions. According to Coast Guard officials, although the Healy
also has maintenance issues, the condition and extent of maintenance
needed for the Polar Class icebreakers is more severe.
[28] National Research Council of the National Academies, Polar
Icebreaker Roles and U.S. Future Needs: A Preliminary Assessment, 2005.
The Council has been tasked to conduct an assessment of the current and
future roles of the Coast Guard's polar icebreakers. A final report is
expected to be released this summer in which it will provide a more
detailed analysis and evaluation of the assets and capabilities needed
to carry out the mission over the longer term.
[29] NSF is the lead agency responsible for supporting U.S. polar
research. As such, it is the primary user of the polar icebreakers to
provide logistical support and serve as research platforms in the polar
regions. Coast Guard officials told us that under the terms of a
memorandum of agreement, entered into in 1986 and updated in 1999, NSF
and other users of the icebreakers reimbursed the Coast Guard for some
of the operational costs.
[30] For fiscal year 2006, responsibility for funding the polar
icebreaking assets was transferred to NSF, with the Coast Guard
retaining custody of the assets to operate and maintain them. The
President's budget request for fiscal year 2007 proposes to continue
this arrangement. With this transfer of budget authority to NSF, Coast
Guard officials indicated that while the Coast Guard plays an advisory
role to NSF on the maintenance needs of the icebreakers, NSF is now
responsible for making funding requests for maintenance projects such
as the service life extension project.
[31] The Coast Guard's primary mission for the National Capital Region
Air Defense program will be to determine intent of, and compel, low and
slower moving aircraft to clear National Capital Region protected
airspace.
[32] The Coast Guard's previous experience with air intercept
activities includes responsibility for air intercept during planned
national security special events, such as the Democratic and Republican
national conventions and the Super Bowl, as well as performing some air
intercept activities as part of its illegal drug interdiction program.
[33] Nonprobability sampling is a method of sampling where observations
are selected in a manner that is not completely random, usually using
specific characteristics of the population as criteria. Results from
nonprobability samples cannot be used to make inferences about a
population because in a nonprobability sample some elements of the
population being studied have no chance or an unknown chance of being
selected as part of the sample.
[34] The exclusive economic zone is defined as an area within 200 miles
of U.S. shores in which U.S. citizens have primary harvesting rights to
fish stocks. The Coast Guard also refers to the U.S. exclusive economic
zone enforcement program as either the foreign fish enforcement program
or as other law enforcement.
[35] According to the Coast Guard, the C-2 combat readiness level is
defined as the level at which a unit possesses the resources and is
trained to undertake most of the wartime missions for which it is
organized or designed.
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