“Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress” –CRS, October 19, 2021

Photo of a model of Halter Marine’s Polar Security Cutter seen at Navy League’s Sea-Air-Space Exhibition have surfaced. Photo credit Chris Cavas.

The Congressional Research Service has once again updated their look at the Polar Security Cutter (heavy icebreaker) program. (See the latest version here.) My last look at this evolving document was in regard to the September 15, 2021 revision.

The one page summary, which has not changed, is reproduced below, but first I will point out what appears to have changed since the September 15 edition.

The Senate Appropriations Committee recommended funding for Long Lead Time items for the third Polar Security Cutter be deferred. (See Table 2 on page 28.) They also recommended additional support for acquisition of a Great Lakes icebreaker. (see below)

If approved, this will mean that the FY2022 ship building budget will be extremely low. The reasons are logical and valid, but generally GAO and Congress like to see consistency from one year to the next. I hope this does not set a pattern.

On the other hand, this could make room on the top line for increases in infrastructure and operations funding. If that results in an improved pattern for these accounts, it could be a good thing.

Or, we could use about $120M to exercise an existing option and buy two more Webber class FRCs to meet a recognized need for a Coast Guard presence in the South Pacific. Spending a little more could buy three Webber class FRCs that could be based in Pago Pago, American Samoa and provide an essentially continuous 24/7/365 underway Coast Guard presence in the South Pacific.

From pages 28/29:

Senate

The Senate Appropriations Committee, in the explanatory statement it released on October 18, 2021, for the FY2022 DHS Appropriations Act (S. XXXX), recommends the funding level shown in the SAC column of Table 2. The explanatory statement states:

Polar Ice Breaking Vessel.—The Committee recognizes the value of heavy polar icebreakers in promoting the national security and economic interests of the United States in the Arctic and Antarctic regions. Due to delays that are consistent with complex, first-in-class surface acquisition programs as well as management delays exacerbated by the global pandemic, the schedule projects that the amount requested for LLTM for the third heavy polar icebreaker is not necessary in fiscal year 2022. Therefore, the recommendation does not include $120,000,000 from the request. (PDF page 69 of 160; see also PDF page 145 of 160)

Regarding the Coast Guard’s Operations and Support (O&S) account, funding for which is not shown in Table 2, the explanatory statement states:

Great Lakes Icebreaking [GLIB] Program Management Office.—The recommendation includes $5,500,000, $3,500,000 above the request for pre-acquisition activities, for a new Great Lakes icebreaker that is as capable as USCGC MACKINAW. (PDF page 65 of 160)


Summary

The Coast Guard Polar Security Cutter (PSC) program is a program to acquire three new PSCs (i.e., heavy polar icebreakers), to be followed years from now by the acquisition of up to three new Arctic Security Cutters (ASCs) (i.e., medium polar icebreakers). The PSC program has received a total of $1,754.6 million (i.e., about $1.8 billion) in procurement funding through FY2021, including $300 million that was provided through the Navy’s shipbuilding account in FY2017 and FY2018. With the funding the program has received through FY2021, the first two PSCs are now fully funded.

The Coast Guard’s proposed FY2022 budget requests $170.0 million in procurement funding for the PSC program, which would be used for, among other things, procuring long leadtime materials (LLTM) for the third PSC.

The Navy and Coast Guard in 2020 estimated the total procurement costs of the PSCs in then year dollars as $1,038 million (i.e., about $1.0 billion) for the first ship, $794 million for the second ship, and $841 million for the third ship, for a combined estimated cost of $2,673 million (i.e., about $2.7 billion). Within those figures, the shipbuilder’s portion of the total procurement cost is $746 million for the first ship, $544 million for the second ship, and $535 million for the third ship, for a combined estimated shipbuilder’s cost of $1,825 million (i.e., about $1.8 billion).

On April 23, 2019, the Coast Guard-Navy Integrated Program Office for the PSC program awarded a $745.9 million fixed-price, incentive-firm contract for the detail design and construction (DD&C) of the first PSC to VT Halter Marine of Pascagoula, MS, a shipyard owned by Singapore Technologies (ST) Engineering. VT Halter was the leader of one of three industry teams that competed for the DD&C contract. The first PSC is scheduled to begin construction in 2021 and be delivered in 2024, though the DD&C contract includes financial incentives for earlier delivery.

The DD&C contract includes options for building the second and third PSCs. If these options are exercised, the total value of the contract would increase to $1,942.8 million (i.e., about $1.9 billion). The figures of $745.9 million and $1,942.8 million cover only the shipbuilder’s costs; they do not include the cost of government-furnished equipment (GFE), which is equipment for the ships that the government purchases and then provides to the shipbuilder for incorporation into the ship, post-delivery costs, costs for Navy-specific equipment, or government program-management costs.

The operational U.S. polar icebreaking fleet currently consists of one heavy polar icebreaker, Polar Star, and one medium polar icebreaker, Healy. In addition to Polar Star, the Coast Guard has a second heavy polar icebreaker, Polar Sea. Polar Sea, however, suffered an engine casualty in June 2010 and has been nonoperational since then. Polar Star and Polar Sea entered service in 1976 and 1978, respectively, and are now well beyond their originally intended 30-year service lives. The Coast Guard plans to extend the service life of Polar Star until the delivery of at least the second PSC. The Coast Guard is using Polar Sea as a source of spare parts for keeping Polar Star operational

 

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