Budget Watch, “Focus on defense budgets leaves Coast Guard high and dry” –The Hill

“The Hill” has a plea for passing the Coast Guard’s 2019 budget rather than relying on continuing resolutions.

It makes a good point that time will be short.

“Unfortunately, the Coast Guard budget did not get reported to the House until Sept. 12, 2018.  This is an issue because the House and Senate now are out until Nov. 13. After the election, they will have only 12 workdays before the CR ends on Dec. 7, 2018 (Pearl Harbor Day).”

Considering there is likely to be a lot of churn, particularly in the House, those twelve days are likely to very busy. Hopefully the DHS budget will get passed.

“Coast Guard Cutter Procurement: Background and Issues for Congress” –Congressional Research Service


Mr. O’Rourke has been busy (as usual). Also on 26 Oct. 2018, the Congressional Research Service also Issued an updated version of his study of Coast Guard Cutter procurement programs, specifically for National Security Cutters (NSC), Offshore Patrol Cutters (OPC), and Fast Response Cutters (FRC). Again I have reproduced the summary here. I do think it is strange that we are still talking about initial testing of the NSCs more than ten years after the first of these was commissioned (see page 14).

The Coast Guard’s acquisition program of record (POR) 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 FY2019 budget requests a total of $705 million in acquisition funding for the NSC, OPC, and FRC programs.

NSCs are the Coast Guard’s largest and most capable general-purpose cutters; they are intended to replace the Coast Guard’s 12 aged Hamilton-class high-endurance cutters. NSCs have an estimated average procurement cost of about $682 million per ship. Although the Coast Guard’s POR calls for procuring a total of 8 NSCs to replace the 12 Hamilton-class cutters, Congress through FY2018 has funded 11 NSCs, including two (the 10th and 11th) in FY2018. Six NSCs are now in service, and the seventh, eighth, and ninth are scheduled for delivery in 2018, 2019, and 2020, respectively. The Coast Guard’s proposed FY2019 budget requests $65 million in acquisition funding for the NSC program; this request does not include additional funding for a 12th NSC.

OPCs are to be smaller, 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 program as the service’s top acquisition priority. OPCs have an estimated average procurement cost of about $391 million per ship. On September 15, 2016, the Coast Guard announced that it was awarding a contract with options for building up to nine ships in the class to Eastern Shipbuilding Group of Panama City, FL. The first OPC was funded in FY2018 and is to be delivered in 2021. The Coast Guard’s proposed FY2019 budget requests $400 million in acquisition funding for the OPC program for the construction of the second OPC (which is scheduled for delivery in 2022) and procurement of long leadtime materials (LLTM) for the third OPC (which is scheduled for delivery in 2023).

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 $58 million per boat. A total of 50 have been funded through FY2018. The 28th was commissioned into service on July 25, 2018. The Coast Guard’s proposed FY2019 budget requests $240 million in acquisition funding for the procurement of four more FRCs.

The NSC, OPC, and FRC programs pose several issues for Congress, including the following: 

  • whether to fully or partially fund the acquisition of a 12th NSC in FY2019;
  • whether to fund the acquisition of four FRCs in FY2019, as requested, or some other number, such as six, which is the maximum number that has been acquired in some prior fiscal years;
  • whether to use annual or multiyear contracting for procuring OPCs;
  • the procurement rate for the OPC program;
  • the impact of Hurricane Michael on Eastern Shipbuilding of Panama City, FL, the shipyard that is to build the first nine OPCs;
  • planned procurement quantities for NSCs, OPCs, and FRCs; and
  • initial testing of the NSC.

Congress’s decisions on these programs could substantially affect Coast Guard capabilities and funding requirements, and the U.S. shipbuilding industrial base. .

Sub-Committee Hearing, Coast Guard Modernization and Recapitalization: Status and Future, 26 Sept. 2018

Note, the hearing does not actually begin until time 20:30 on the video above. 

The House Subcommittee on Coast Guard and Maritime Transportation conducted a hearing on “Coast Guard Modernization and Recapitalization: Status and Future” on September 26, 2018.

You can see the “Summary of Subject Matter” that was prepared for the Congressmen here.

This is the first hearing for both Representative Brian Mast (R-FL) as subcommittee chair and Admiral Karl L. Schultz as Commandant. What I saw looked promising.

The Commandant’s prepared remarks has some items of interest. 

The Commandant announced that he would soon issue a Coast Guard “Strategic Plan 2018-2022”

He referenced the new icebreakers as “Polar Security Cutters.”

This past March, we released a request for proposal (RFP), setting the stage for award of a Detail Design and Construction (DD&C) contract in FY 2019 for the construction of up to three heavy Polar icebreakers. We are as close as we have ever been to recapitalizing our Polar icebreaking fleet; continued investment now is vital to solidify our standing as an Arctic nation and affirms the Coast Guard’s role in providing assured, year-round access to the Polar regions for decades to come.

This seems to be a part of an effort to broaden the appeal of the icebreaker program as discussed in a recent USNI post, “Coast Guard Renames Icebreaker Program ‘Polar Security Cutter.'”. Their “…hull designation will be WMSP. W is the standard prefix for Coast Guard vessels, and MSP stands for Maritime Security-Polar, Brian Olexy, a Coast Guard spokesman, told USNI News.”

Apparently we are working toward a fleet of 64 Webber class WPCs rather than the 58 in the Program of Record. The first two additional to replace six Island class WPBs currently assigned to Patrol Force South West Asia have already been funded.

“…Earlier this summer, we exercised the second option under the Phase II contract to begin production of six more FRCs. The FY 2018 appropriation also included funding for two additional FRCs, beyond our domestic program of record of 58 hulls (emphasis applied–Chuck), to initiate the vital replacement of our six patrol boats supporting long-term U.S. Central Command missions in southwest Asia.”

Q&A. Topics discussed during the question and answer period included:

Civil Engineering/Shore infrastructure. $1.6B backlog.

40:00 possibility of a 12th NSC

42:30 Where is the $34M taken out of the FY2018 budget will be coming from–reprogramming within the Department.

44:30 Closures of the Potomac

54:00 Diversity within the service.

1:14:40 Need for larger Reserve Force

1:18:00 Icebreaker program

1:20:00 Waterways commerce cutters

In addition response to the recent Hurricanes seemed to be very much on the minds of Representatives and was referred to repeatedly.

New Coast Guard Sub-Committee Chair

Member of the U.S. House of Representatives
from Florida’s 18th district

The new chairman of the House sub-committee with oversite of the Coast Guard has been announced.

House Committee on Transportation and Infrastructure Chairman Bill Shuster (R-PA) has named U.S. Rep. Brian Mast (R-FL) to serve as Chairman of the Subcommittee on the Coast Guard and Maritime Transportation for the remainder of the 115th Congress.

Representative Mast’s background may be significant. From his Wikipedia entry:

After graduating from South Christian High School in 1999, Mast enlisted in the United States Army Reserve in May 2000 and went to become a combat engineer. In 2006, he transitioned to the active U.S. Army and became an explosive ordnance disposal technician. Mast later joined the 28th Ordnance Company. He served in Afghanistan as part of Operation Enduring Freedom. On September 19, 2010, while clearing a path for United States Army Rangers in Kandahar, Mast took a wrong step into an IED along the road. The explosion resulted in the amputation of both his legs and one of his fingers.

Mast and his family were the recipients of a custom ADA-compliant home awarded to them by the non-profit organization Helping a Hero.

After being honorably discharged from the U.S. Army, Mast was hired as an explosives specialist for the United States Department of Homeland Security. While recovering from his injuries at Walter Reed Army Medical Center, Mast provided explosive and counter-terrorism expertise to the Office of Emergency Operations at the National Nuclear Security Administration from July 2011 to February 2012 and as an instructor of Home Made Explosives for the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Update on Coast Guard Acquisition Programs and Mission Balance and Effectiveness–Coast Guard and Maritime Transportation of the House Committee on Transportation & Infrastructure

This is not going to flow well, I apologized for the mishmash. The video above is of a House Sub-Committee hearing that occurred on July 24. I think it is still worth a look. The video does not actually begin until just before time 19:55

Before watching the video, I would suggest a look at the “Summary of Subject Matter.” This is what the Congressional Representatives are looking at.

End of Service Lives for Medium Endurance Cutters (MEC) with Planned Offshore Patrol Cutter (OPC) Delivery Dates:

Check out the charts on page 2. The second chart shows “End of Service Lives for Medium Endurance Cutters (MEC) with Planned Offshore Patrol Cutter (OPC) Delivery Dates.” It illustrates the risks and loss of capacity that appears likely, if OPCs are funded at the planned rate of no more than two ships a year. It is unclear why the WMECs are to be retired in the order intended since it is not the order of their completion. Presumably it is based on an assessment of the condition of the ships, but it is very clear that they will all be well over aged. The 210s will retire first. The youngest retirement would be at age 53 and some would qualify for Social Security before replacement.  (Diligence, 66)

How they arrived at the expected service life shown is hard to understand, because every 210 is going to be 53 years old or older at the end of projected service life plus 15 year life extension. The 210s were, of course, substantially reworked during a “Major Maintenance Availability” 1986 to 1990, but no further life extension work is apparently planned based on the testimony in the video.

It may appear we are in much better shape with respect to the 270s, but these more complex ships may actually be harder to keep operational. We saw this in the number of breakdown experienced after the Haitian Earthquake eight years ago. They were commissioned between 1983 and 1991 and are expected to be replaced between 2130 and 2135. Legare, second to newest, is planned to be the first replaced, and would be “only” 40 years old. Harriet Lane one of the earliest completed is expected to be one of the last replaced and would be 50 years old. The rest fall within that range. SLEP for 270s beginning 2021, but it is not certain it will be applied to all 13 ships. 

Because ships are not being replaced as quickly as they were originally built, we see a growing gap between the end of the ship’s projected service life, even with a 15 year service life extension, and the projected date of replacement.

Cutter Capability (by operating hour):

See also Appendix A, which illustrates the current shortfall in cutter hours available compared to the “Legacy Fleet” the recapitalization program was intended to replace. The “Legacy Fleet” is based on 12 WHECs, 29 WMECs, and 49 island class WPBs. (Not sure why they used 29 WMECs, since we had 32 as recently as 2001.)

There are two charts, the first includes WPBs and Webber class WPCs as well as WHECs, WMECs, NSCs, and OPCs. The second considers on the only the larger vessels, excluding WPCs and WPBs. 

The first chart shows that we are currently down 20,450 hours (8.6%) relative to the legacy fleet, but that when the recapitalization is complete the total will be 31,970 hours (13.4%) greater than the legacy fleet. This increase is all due to the greater number Webber class and the greater number of hours each is expected to operate annually compared to 110s.

The second chart looks only at the larger ships, leaving aside the Webber and Island class WPCs and WPBs. It shows we are currently down 13,950 op hours (10%) and further, that when the program is completed, we will be down 15,030 hours (10.7%)reflecting the smaller number of large patrol cutters. If we could view this as a chart of actual cutter available on a yearly basis, it suggest that we will never be down by more than the 10.7% that shows upon completion of the program. Actually that is unlikely to be the case. The aging fleet means a higher probability of unplanned maintenance and even catastrophic failure that may result in WMECs being decommissioned prematurely and becoming parts donors like the Polar Sea.

The saving grace may be that the Webber class have proven capable of performing some WMEC like duties and they are coming on line very rapidly. In all probability, the 58 cutters in the FRC program of record will all be delivered by the end of 2024.

At some point Coast Guard leadership is going to have to tell Congress the ugly truth that we have started the OPC/WMEC replacement program much too late, and we need to double down on the production rate. As soon as the first ship is completed and tested we need to issue a Multi-Year Procurement contract and it should include building up to four ships a year, at least until all sixteen 210s are replaced and at least three ships a year until all the WMECs are replaced.

We need to tell the Congress this as soon as possible, because bad news does not get better with age. Unfortunately it did not happen in this hearing. In fact when asked about the possibility of accelerating OPC production, time 1:10:00, VAdm McAllister seemed to dismiss the possibility saying we had other higher priorities. This was the wrong answer. You don’t always get to decide how money is spent. If we should get the opportunity to accelerate OPC construction, as has happened with the FRCs, we should welcome it.

Mission Needs Statement:

You can see the “Mission Needs Statement” referred to here. It is 70 pages plus about 45 pages of Appendices, but as noted, “…  it does not identify asset gaps or a material solution to meet Coast Guard’s mission needs.”

GAO findings, failure to plan long term:

The GAO has taken the Coast Guard to task because their acquisition portfolio planning has been limited to apparently short term planning using the annual budget and five year Capital Investment Plan (CIP). That this has resulted a bow wave of unfunded requirements being pushed progressively further into the future.

“When you are up to your ass in alligators, it is difficult to remember that your initial objective was to drain the swamp.”

I have to think GAO has a point here.

We still have not provided a 20 year acquisition plan that the Coast Guard said they would provide in 2014, much less the 30 year plan I have suggested that would parallel the Navy’s planning process.

We have only done one fleet mix study. It was completed in 2007 and included the apparent assumption of applying the now rejected Crew Rotation Concept to both the NSCs and OPCs. Even so, it is still being used as a basis for critiquing the program of record that was last re-baselined in 2005. Things change, we now have better information about how our assets actually function. It is long past time for updated planning.

The Video: 

Witnesses were:

  • Vice Admiral Daniel Abel, Deputy Commandant for Operations, United States Coast Guard | Written Testimony
  • Vice Admiral Michael McAllister, Deputy Commandant for Mission Support, United States Coast Guard | Written Testimony
  • Ms. Marie A. Mak, Director of Acquisition and Sourcing Management, Government Accountability Office | Written Testimony

Here is a brief outline of the topic discussed. Video actually begins 19:55.

23:00 Administration and CG leadership priorities do not demonstrate a commitment to rebuild infrastructure.

42:00 Appropriation deleted $1.4B including $750M for the Heavy Polar Icebreaker and the rest from an account to repair of replace hurricane damaged infrastructure.

46:00 Icebreaker schedule is overly optimistic.

47:00 WMEC gap.

49:00 No service life extension program for 210s. Some, but not all 270s, will have 10 year life extension.

51:00 Capabilities vs hours.

55:30 WMECs are operating at higher than anticipated tempo. Anticipate catastrophic failures within in the WMEC fleet. 5 out or 14 WMEC 210s are at high risk.

59:30 Maintenance backlog.

1:08:00 Still no 20 year plan has been provided since it was requested in 2014.

1:10:00 accelerate OPC procurement?

1:12:30 OPC homeports, of the first four, two will go to Kodiak and two to LA

1:14:00 Great Lakes icebreaking,  Mackinaw replacement? SLEP of 140′

1:15:45 Will be doing a fleet mix study for the Great Lakes.

1:17:00 Inland fleet. Doing alternatives analysis.

1:20:00 Homeport for icebreakers has not been decided. Working on homeport decisions for the entire fleet.

1:23:00 UAS

1:24:00 Counter UAS capability. The six WPBs in CENTCOM have some capability.

1:25:00 Manpower analysis

—-

Opening Statement of the Sub-Committee Chair:

The Subcommittee is meeting today to review how the Coast Guard is integrating their acquisition, manpower, and maintenance plans to align to their mission needs and assure the Service has the assets, personnel, and expertise needed to carry out its missions.

On June 1, 2018, Admiral Karl Schultz became the 26th Commandant of the Coast Guard.  His guiding principles for the Service are: Ready, Relevant, and Responsive.  He said, “These guiding principles frame my direction and will support the Department of Homeland Security, the Secretary of Defense and Combatant Commanders, and other national and global maritime interests.”  Admiral Schultz and his senior leadership team are in the midst of reviewing the status of the Coast Guard and making changes to align the Service with those guiding principles.  Today, we will hear from two members of that team, and look forward to better understanding their perspectives on the status of the Coast Guard.

The ongoing recapitalization of the Service’s cutters was planned two decades ago to address mission demands at that time.  The world and the demands on the Coast Guard have since changed and it is critical that the Service be ready to respond to the demands of today, as well as those that will exist in decades to come. It is also important that the Coast Guard is prepared to manage capability gaps that are occurring and likely to continue to occur as recapitalization continues.

The decisions being made today will shape the Coast Guard of the future.  The cutters being built today have a planned 30-year service life and will probably serve longer, and the final OPC is projected to be patrolling the seas until 2064. Like Admiral Schultz, Congress wants to ensure the Coast Guard is Ready, Relevant, and Responsive for years to come.  In order to do so, we need accurate information from the Service to determine whether current plans will provide the capabilities to meet future demands.

Even more important than Coast Guard ships and aircraft are the people who operate them.  The Coast Guard’s active duty workforce is only slightly larger than that of the New York City police department and less than ¼ the size of the next smallest U.S. Armed Force.  Congress has encouraged the Coast Guard to better understand and articulate its workforce needs to meet current and emerging needs. Looking forward, it is likely that the Service will need to make tough, strategic decisions regarding how Coast Guard personnel are allocated.  Even before the advent of a new cybersecurity operating domain, the Coast Guard was struggling to meet mission demands; creating a cybersecurity workforce while also conducting legacy operations poses an additional challenge that must be addressed immediately.

In addition to our focus on Coast Guard assets and personnel, this Subcommittee has continually pushed the Service to improve its shore infrastructure made up of approximately 43,400 assets nationwide.  Unfortunately, even after several years of us stressing the need for action, much of that property is in dire need of rebuilding or repair.  While Coast Guard leaders consistently stress the importance of investing in shore infrastructure, the budgetary trade-offs being made within the Coast Guard and the Administration do not reflect a genuine commitment to address this need.  For example, despite a shore infrastructure backlog of more than $1.5 billion, the Coast Guard’s Fiscal Year 2019 budget request only includes $30 million to address those projects.

Shore infrastructure is critical to every Coast Guard mission – cutters need piers, aircraft need runways, inspectors need buildings, etc. – and if the Service truly desires to remain Ready, Relevant, and Responsive, it needs to find ways to address these critical needs.

The Government Accountability Office (GAO) has issued a number of reports since 2012 reviewing Coast Guard acquisition programs and providing recommendations to improve those programs.  Over the years, the Coast Guard has agreed with many of those recommendations and agreed to take action on them.  However, the new GAO report released today notes that the Coast Guard has not fully implemented those prior recommendations.  Hopefully, today’s hearing will help us understand why that is.

A new senior leadership team brings new perspectives, new ideas, and new priorities.  I look forward to hearing from our witnesses today on how they see the Coast Guard and how we can best position the Service for success going forward.

National Defense Authorization Act, 2019 Authorizes Six Icebreakers

USCGC Polar Sea

The National Defense Authorization Act has been passed and forwarded to the President. It is too early for anyone to get too excited about this, since it is an authorization rather than an approved budget, but it does authorize up to six polar icebreakers.

SEC. 153. AUTHORITY TO PROCURE ADDITIONAL POLAR-CLASS ICEBREAKERS. Section 122 of the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115–91) is amended— (1) in the section heading, by striking ‘‘ICE-BREAKER VESSEL’’ and inserting ‘‘AUTHORIZA-TION TO PROCURE UP TO SIX POLAR-CLASS ICEBREAKERS’’;  (2) by striking subsections (a) and (b); (3) by inserting before subsection (c) the following new subsection: ‘‘(a) AUTHORITY TO PROCURE ICEBREAKERS.—The Secretary of the department in which the Coast Guard is operating may, in consultation with the Secretary of the Navy, enter into a contract or contracts for the procurement of up to six polar-class icebreakers, including— ‘‘(1) polar-class heavy icebreakers; and ‘‘(2) polar-class medium icebreakers.’’; (4) by redesignating subsections (c) and (d) as subsections (b) and (c), respectively; and (5) in paragraph (1) of subsection (b), as redesignated by paragraph (4) of this section, by striking ‘‘subsection (a)(1)’’ and inserting ‘‘subsection (a)’’.

The bill also provides for a Selected Reserve end strength of 7000 Coast Guard Reservists, almost $40.9M for Coast Guard weapons, $40.7M for other Electronic support, $24.1M for Mobilization Support, $165M for Coast Guard mobilization support (presumably PATFORSWA?). There may actually be more that I may have missed. The bill is huge. I just used the “Control F” function to search for Coast Guard.

Thanks to the Bryant’s Maritime Consulting Blog for bringing this to my attention.

Report to Congress on U.S. Coast Guard Polar Icebreaker Program, July 9, 2018

USCGC Polar Star. An old USCG photo, note the HH-52.

The Congressional Research Service has issued a new edition of its Report to Congress on U.S Coast Guard Polar Icebreaker Program by specialist in naval affairs Ronald O’Rourke, this one dated July 9, 21018. You can see it here. 

I have reproduced the summary immediately below.  

The Coast Guard polar icebreaker program is a program to acquire three new heavy polar icebreakers, to be followed years from now by the acquisition of up to three new medium polar icebreakers. The Coast Guard wants to begin construction of the first new heavy polar icebreaker in FY2019 and have it enter service in 2023. The polar icebreaker program has received about $359.6 million in acquisition funding through FY2018, including $300 million provided through the Navy’s shipbuilding account and $59.6 million provided through the Coast Guard’s acquisition account. The Coast Guard’s proposed FY2019 budget requests $750 million in Coast Guard acquisition funding for the program.

The acquisition cost of a new heavy polar icebreaker had earlier been estimated informally at roughly $1 billion, but the Coast Guard and Navy now believe that three heavy polar icebreakers could be acquired for a total cost of about $2.1 billion, or an average of about $700 million per ship. The first ship will cost more than the other two because it will incorporate design costs for the class and be at the start of the production learning curve for the class. When combined with the program’s $359.6 million in prior-year funding, the $750 million requested for FY2019 would fully fund the procurement of the first new heavy polar icebreaker and partially fund the procurement of the second.

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 has used Polar Sea as a source of spare parts for keeping Polar Star operational.

A Department of Homeland Security (DHS) Mission Need Statement (MNS) approved in June 2013 states that “current requirements and future projections … indicate the Coast Guard will need to expand its icebreaking capacity, potentially requiring a fleet of up to six icebreakers (3 heavy and 3 medium) to adequately meet mission demands in the high latitudes….”

The current condition of the U.S. polar icebreaker fleet, the DHS MNS, and concerns among some observers about whether the United States is adequately investing in capabilities to carry out its responsibilities and defend its interests in the Arctic, have focused policymaker attention on the question of whether and when to acquire one or more new heavy polar icebreakers as replacements for Polar Star and Polar Sea.

On March 2, 2018, the U.S. Navy, in collaboration with the U.S. Coast Guard under the polar icebreaker integrated program office, released a request for proposal (RFP) for the advance procurement and detail design for the Coast Guard’s heavy polar icebreaker, with options for detail design and construction for up to three heavy polar icebreakers.

Issues for Congress for FY2019 for the polar icebreaker program include, inter alia, whether to approve, reject, or modify the Coast Guard’s FY2019 acquisition funding request; whether to use a contract with options or a block buy contract to acquire the ships; whether to continue providing at least some of the acquisition funding for the polar icebreaker program through the Navy’s shipbuilding account; and whether to procure heavy and medium polar icebreakers to a common basic design.