CRS, “Coast Guard Cutter Procurement: Background and Issues for Congress Updated November 11, 2020”

It has been only four days since we last looked at this document, but Congressional Research Service’s Ronald O’Rourke has come out with another revision. (You can always find the latest edition in full here.) The latest revision added Senate action on the DHS Appropriations Act (H.R. 7669/S. XXXX). Unlike the House Appropriations Committee, the Senate Appropriations Committee would fund two rather than four Webber class FRCs (Providing $160M rather than $260M) and seems to close the door on the possibility of a twelfth Bertholf class NSC.

Table 2 (page 23) provides a Summary of Appropriations Action on FY2021 Procurement Funding Request. Figures are in millions of dollars, rounded to nearest tenth. HAC=House Appropriations Committee. SAC=Senate Appropriations Committee. No final action has been take as of publication. The table is reproduced below.

______________Request__HAC__SAC___Final
NSC program         31            31        31
OPC program      546           546      546
FRC program        20           260      160
TOTAL                 597           837      737

We are now eleven weeks into FY2021. The continuing resolution ran out 11 November. Hopefully we will see this move to final action soon.

I have reproduced the section regarding Senate Appropriations Committee action below. (From pages 23/24, there are some minor format changes.)


Senate

The Senate Appropriations Committee, in the explanatory statement for S. XXXX that the committee released on November 10, 2020, recommended the funding levels shown in the SAC column of Table 2.

The explanatory statement states (emphasis added):

Full-Funding Policy.—The Committee again directs an exception to the administration’s current acquisition policy that requires the Coast Guard to attain the total acquisition cost for a vessel, including long lead time materials [LLTM], production costs, and postproduction costs, before a production contract can be awarded. This policy has the potential to make shipbuilding less efficient, to force delayed obligation of production funds, and to require post-production funds far in advance of when they will be used. The Department should position itself to acquire vessels in the most efficient manner within the guidelines of strict governance measures. The Committee expects the administration to adopt a similar policy for the acquisition of the Offshore Patrol Cutter [OPC] and heavy polar icebreaker.

Domestic Content.—To the maximum extent practicable, the Coast Guard is directed to utilize components that are manufactured in the United States when contracting for new vessels. Such components include: auxiliary equipment, such as pumps for shipboard services; propulsion equipment, including engines, reduction gears, and propellers; shipboard cranes; and spreaders for shipboard cranes. (Pages 71-72)

The explanatory statement also states:

National Security Cutter [NSC].—The Committee is disappointed that the Coast Guard has not officially conveyed to the Committee a determination on whether a twelfth NSC is required; based on the lack of direct communication and the inclusion of a proposed rescission of funds provided in fiscal year 2020 in the budget request, the Committee infers that an additional vessel is not required at this time. While funding a twelfth NSC would undoubtedly allow the Coast Guard to better conduct its mission operations and likely result in the prevention of thousands of tons of contraband from reaching the United States, the Committee is not positioned to recommend funding for another vessel when faced with budgetary constraints and additional requests for vessel classes well short of the Coast Guard’s program of record. The Committee directs that the remainder of funding provided above the request in 2020 for this program shall support the NSC fleet.

Offshore Patrol Cutter [OPC].—The Committee notes that the Coast Guard has declared the OPC as its highest recapitalization priority and provides the requested amount of $546,000,000 to continue construction, procurement of LLTM, and related program management costs. While the Committee supports OPC procurements, the Committee remains concerned about costs for the program and continues the requirement directing the Coast Guard to brief the Committee within 1 week prior to taking any procurement actions impacting estimated costs for the OPC program.

Fast Response Cutter [FRC] Program.—In accordance with the Coast Guard’s  recapitalization plan, the Committee has supported the replacement of legacy 110-foot
Island Class patrol boats with FRCs that will operate similarly in the coastal zone. The
Committee is aware of the need for four additional FRCs to sustain the Coast Guard’s
critical mission in support of the Department of Defense in Patrol Forces Southwest Asia; however, the budget request did not include any funding for new FRCs. The Committee recommends an additional $140,000,000 for two additional FRCs and directs the Coast Guard to negotiate favorable pricing for each vessel. (Pages 72-73)

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