I have seen several references to how the FY2013 budget is “Responsibly rebuilding the fleet,” as if we might otherwise have gone off willy-nilly building ships we don’t really need because we haven’t done prior proper planning. In fact we have been in analysis–paralysis for two decades, since we finished the last 270 in 1990, without building replacements for ten WWII vintage ships that continued to serve.
In the last 22 years the Coast Guard has taken delivery of 21 ships (one WAGB, three WMSL, one WLBB, and 16 WLBs), less than one ship a year, while we should have averaged at least two ships a year (and should do so for the foreseeable future to maintain the current fleet and replace ships at what is generally recognized as the economical end of their useful lives at 30 years).
It gets worse. Over the last eight years, since 2004 the Coast Guard has take delivery of only four ships (one WLBB and three WMSL). We are now in a situation where it may be four years between delivery of NSC#3 and #4 (funded in 2006 and 2010 respectively).
Let’s take look a what will happen if more money is not allocated to the AC&I budget.
By the end of 2020 the Coast Guard can expect to loose the services of at least half the existing fleet of large patrol vessels, 20 ships (six 378s and 14 WMEC 210s). During that time, if there are no changes to current budget, we can expect no more than four new ships to be added (three “National Security Cutters” (NSC) already funded and one “Offshore Patrol Cutter” (OPC)). This will give the Coast Guard a fleet of 24 large patrol cutters (6 NSC, 3 WHECs, an OPC, the Alex Haley, and 13 WMEC 270s), down from 40 ship in the current fleet, and far less than the 33 ships in the “Program of Record.” Even this is probably overly optimistic in that it assumes all existing ships will be decommissioned only after 50 years of service, with three 378s still in service in 2020.
Unless there is a substantial increase in AC&I funds, and the Coast Guard builds only one OPC per year (the most we could possibly afford without a substantial AC&I increase–even that may be impossible) the situation will improve only slightly, if at all, through 2025. In fact the fleet will drop to a low of 22 ships by the end of 2021 through 2022. By 2025, the Coast Guard will have built five more ships, assuming one OPC per year, but will have lost Alex Haley and the last three 378s giving a total of 25 in the Fleet, still well below the 33 envisioned in the “program of record.”
If we are going to get to 33 ships (20 NSC/OPC and 13 WMEC 270s) by 2025 we will need to build eight additional ships. We can do that by restoring the two NSCs that had been planned for FY 2014 and 2015 and funding two OPCs a year beginning in 2016 or by funding 14 OPCs in six years (again beginning in FY2016). If we don’t fund the additional two NSCs but build two OPCs a year we could still get to 33 ships by 2026.
On the other hand, if we build only one OPC a year, we will not reach 33 ships until 2033, but then, almost immediately, we will see numbers drop again, down to as low as 28 in 2041, as 270s retire faster than they are replaced. We will not reach 33 again until 2046. Again this is assuming we can keep the WMEC 270s viable until they are 50 years old.
There is a look back at the size of the fleet here: “Is the Fleet Shrinking?” There is a history of Patrol Cutter construction here: “How We Got in this Mess-a Short History of CG Shipbuilding.”
I haven’t seen a clear explanation our intentions regarding the build plan for the Offshore Patrol Cutter, but we can draw some inferences from the FY 2013 Budget Justification provided to Congress. Looking at the “FY 2013-2017 Five Year Capital Investment Plan (CIP)” on page CG-AC&I-12 and CG-AC&I-25 through 27, provides this information as to OPC funding:
- FY 2004-2011 Funding Received: $85M
- 2012 Enacted Budget Authority: $25M
- FY 2013 Requested Budget Authority: 30M
- FY 2014 50M
- FY 2015 40M
- FY 2016 200M
- FY 2017 530M
- Total Acquisition Cost $8,098M
- Estimated Completion Date 2031
This gives an average cost of approximately $325M per unit, about half the cost of an NSC and about six times the cost of the Webber Class FRC. There is not enough money to fully fund a ship until FY2017, but it looks like the plan is still to award the contract for the first ship in FY2016 with the first ship delivered in 2020. The “Estimated Completion Date” of 2031 appears to be a delivery date for the last ship, rather than the last FY funding is provided. If we assume that is the case, then 25 ships would be delivered over 12 years from 2020 to 2031 or just over 2 ships a year.
The parsimony and stewardship of the public trust exercised by the Coast Guard cannot be in doubt.
The Coast Guard needs a substantial increase in AC&I, precisely because the account has been underfunded in the past. GAO still says this is “unachievable.” We will talk about that again soon.
There should be no doubt the Coast Guard needs to build new ships. The final number and the exact character of the ships may be up for discussion, but they have to come very soon. The question now should be what is the most economical way to build those ships to provide savings in the long run.
We will need to build at least two OPCs a year. The Navy’s LCS program demonstrated the advantages of using multi-ship, multi-year contracts. The first LCSs cost almost exactly the same as the first NSC, about $700M, but since then, while the NSC program has proceeded in fits and starts and the cost per ship has remained essential unchanged, the LCS program has gone on to include to multi-ship/multi-year contracts that dropped the price down to about $400M per ship. The OPCs should be substantially cheaper. We need to follow their example.