The Congressional Research Service has again updated their report on Coast Guard cutter procurement. (The link will always take you to the most recent edition of the report.) I have reproduced the summary in full below. But first some comments.
Offshore Patrol Cutter:
From page 12–this could be a problem.
“On January 29, 2021, the Coast Guard released the RFP for the Stage 2 competition, with responses due by May 28, 2021. The Coast Guard plans to award the Stage 2 contract in the second quarter of FY2022. The contract is to be a Fixed Price Incentive Firm (FPIF) contract for detail design and construction of up to 11 OPCs, including Long Lead Time Materials (LLTM), as well as logistics, training, and life-cycle engineering. One observer stated on March 29, 2021, that,
“‘In the current 11-ship [Stage 2] proposal, the Coast Guard is giving interested shipyards an enormous amount of leeway to redesign the cutter’s innards, a tactic that, according to stakeholders, facilitates increased competition. Newly proposed ships must look generally the same [as ESG’s OPC design] from the outside, but almost everything “under the hood”—outside of a few major components—can be changed, shifted or modified.‘”
Whether 2004 Program of Record Should Be Updated:
There is a considerable discussion of the need for a reexamination of the program of record, including a new “Fleet Mix Study” on pages 12-19.
It also appears we have failed to complete a report “…required by Section 8261 of the Elijah E. Cummings Coast Guard Authorization Act of 2020 (Division G of P.L. 116-283), which is due to Congress no later than 90 days after the date of enactment.” (p.19)
Budget Request History:
There are a couple of interesting tables of budget requests for PC&I funding. Table 1 looks at requests for funding ships. Table B-1 includes the full PC&I request. (Approved budgets were generally different.)
- Table 1. Requested Funding in FY2013-FY2022 Budget Submissions (p.15)
- Table B-1. Requested Funding in PC&I Account in FY2013-FY2022 Budgets (p.34)
Unwavering Support for Our Coast Guard Act (S. 1845):
The Senate has introduced a bill that would require a new Fleet Mix Study. (p.25/26)
The phase “Fleet Mix Analysis” is used no less than 22 times in this CRS report; the term “Fleet Mix” no less than 48 times. I think Congress wants us to do this. Hopefully DHS will not prevent publication.
Summary: (Below is the one page summary contained in the report–Chuck)
The Coast Guard’s program of record (POR), which dates to 2004, calls for procuring 8 National Security Cutters (NSCs), 25 Offshore Patrol Cutters (OPCs), and 58 Fast Response Cutters (FRCs) as replacements for 90 aging Coast Guard high-endurance cutters, medium-endurance cutters, and patrol craft. The Coast Guard’s proposed FY2022 budget requests a total of $695.0 million in procurement funding for the NSC, OPC, and FRC programs, including $597 million for the OPC program.
NSCs are the Coast Guard’s largest and most capable general-purpose cutters; they are replacing the Coast Guard’s 12 Hamilton-class high-endurance cutters. NSCs have an estimated average procurement cost of about $670 million per ship. Although the Coast Guard’s POR calls for procuring 8 NSCs to replace the 12 Hamilton-class cutters, Congress through FY2021 has fully funded 11 NSCs, including the 10th and 11th in FY2018. In FY2020, Congress provided $100.5 million for procurement of long lead time materials (LLTM) for a 12th NSC, so as to preserve the option of procuring a 12th NSC while the Coast Guard evaluates its future needs. The Coast Guard’s proposed FY2022 budget requests $78.0million in procurement funding for activities within the NSC program; this request does not include further funding for a 12th NSC. The Coast Guard’s proposed FY2022 budget also proposes rescinding $65.0 million of the $100.5 million in FY2020 funding for LLTM for a 12th NSC, “allowing the Coast Guard to focus investments on building, homeporting, and crewing Polar Security Cutters and Offshore Patrol Cutters.” The
remaining $35.5 million appropriated in FY2020 for LLTM would be used to pay NSC program costs other than procuring LLTM for a 12th NSC. Nine NSCs have entered service; the ninth was commissioned into service on March 19, 2021.
OPCs are to be less expensive and in some respects less capable than NSCs; they are intended to replace the Coast Guard’s 29 aged medium-endurance cutters. Coast Guard officials describe the OPC and PSC programs as the service’s highest acquisition priorities. OPCs have an estimated average procurement cost of about $411 million per ship. The first OPC was funded in FY2018. The Coast Guard’s proposed FY2022 budget requests $597.0 million in procurement funding for the fourth OPC, LLTM for the fifth, and other program costs. On October 11, 2019, the Department of Homeland Security (DHS), of which the Coast Guard is a part, announced that DHS had granted extraordinary contractual relief to Eastern Shipbuilding Group (ESG) of Panama City, FL, the builder of the first four OPCs, under P.L. 85-804 as amended (50 U.S.C. 1431-1435), a law that authorizes certain federal agencies to provide certain types of extraordinary relief to contractors who are encountering difficulties in the performance of federal contracts or subcontracts relating to national defense. The Coast Guard is holding a full and open competition for a new contract to build OPCs 5 through 15. On January 29, 2021, the Coast Guard released a Request for Proposals (RFP) for this Stage 2 contract, as it is called. Responses to the RFP were due by May 28, 2021. The Coast Guard plans to award the Stage 2 contract in the second quarter of FY2022.
FRCs are considerably smaller and less expensive than OPCs; they are intended to replace the Coast Guard’s 49 aging Island-class patrol boats. FRCs have an estimated average procurement cost of about $65 million per boat. A total of 64 have been funded through FY2021, including four in FY2021. Six of the 64 are to be used by the Coast Guard in the Persian Gulf and are not counted against the 58-ship POR quantity for the program, which relates to domestic operations. Forty of the 64 have been commissioned into service, and others have been accepted by the Coast Guard and are awaiting commissioning. The Coast Guard’s proposed FY2022 budget requests $20.0 million in procurement funding for the FRC program; this request does not include funding for any additional FRCs