What Frustrates Me? –an Apparent Lack of Transparent Long Term Planning

A reader recently asked me, “What frustrates you, Chuck? … what is the one or two key areas that you think the USCG needs?  A new ship design, up-arming, or missiles?”
My answer, actually it is the apparent failure to plan.

Rant to Follow

Maybe there is a plan, but if there is, it has not been shared with the Congress or the public. Consequently there has been no opportunity to build support for the plan.

Despite direction from Congress to provide a 25 year shipbuilding plan, none has been provided. Is the hold up in the Coast Guard or the Department? Who knows.

Our shipbuilding “Program of Record” (POR) was last baselined in 2005, as part of the defuncted “Deepwater” program. It was based not on need, but on expected funding.

An examination of need was made, in the form of an “Offshore and Aviation Fleet Mix Study.” A report was completed in 2009. It was reevaluated in 2011, resulting in lower requirements that still indicated that we needed assets far in excess of the program of record. Results were not made public until 2012.
There has been no reexamination of our needs since then, in spite of the fact that the Fleet Mix Study was based on an assumption of the use of the “Crew Rotation Concept” on the National Security Cutter and Offshore Patrol Cutter. It also anticipated deployment of shore based Unmanned Air Systems (UAS), large vertical take off ship based UAS, and networking that would provide a common tactical picture. So far, no land based UAS, only a much smaller less capable ship based UAS, and no real common tactical picture. The only pleasant surprise has been the utility of the Webber class cutters.
I have a half assed Operations Research background. It pains me to see that we are apparently not using the planning tools that are available.
When we present a well considered and fact based plan, the Congress has been responsive. They have supported the program of record, and are funding icebreakers in response to the High Latitude Study.
  • We sorely need an updated Offshore and Aviation Fleet Mix Plan.
  • From this and consideration of other needs we need to develop a 30 year Shipbuilding and Aviation Procurement Plan.
  • We need to update these planning tools on a regular basis. We can expect that they will get better with each iteration.
Normally the leadership changes every four years. It is reasonable that we have a planning cycle that follows this pattern. We can give the new Commandant and his staff a year to work with his predecessor’s planning products before initiating a new cycle. A year in he should initiate a new Fleet Mix Plan. Using it and other inputs, a new 30 year Shipbuilding and Aviation Procurement Plan should be completed well before the new Commandant is selected. 
Only tangentially related, but a budget document we seldom see, is the Coast Guard’s unfunded priority list. Almost three years ago, I did one of my own. Not much has changed.
Thanks to Peter for kicking off this line of thought. 

“Coast Guard releases draft statement of work for Offshore Patrol Cutter Program Industry Studies” –CG-9

OPC “Placemat”

The Acquisitions Directorate, CG-9, has issued a draft statement of work for Offshore Patrol Cutter Program Industry Studies.

The deadline for comments is short.

A draft statement of work (SOW) was released by the Coast Guard Nov. 22 in support of the Offshore Patrol Cutter (OPC) Program. The service is seeking industry feedback; responses to the draft SOW will be used to inform a future solicitation for industry studies to support OPC follow-on production.

The draft SOW can be found here.

The deadline to submit responses to this request is Dec. 6 at noon EST.

For more information: Offshore Patrol Cutter program page

Looking at the draft statement of work, one of the first things I noticed is that it describes the OPC as “360ft LOA and 4500LT.” I think that displacement should be full load. Even at that, it is significantly larger than previously stated. I had previously noted that dimensions and displacement did not seem to correspond, that the dimension for the OPC was larger than the Holland class OPV which are 3750 tons full load, but previous statements indicated that the ships would be 3730 tons full load. This was repeated in the Congressional Research Service Reports. If their full load displacement is actually 4500 tons, that means they are almost exactly the same size as the National Security Cutters which have been variously reported as 4500 or 4600 tons full load.

The draft SOW indicates, “The re-competed contract scope will be to complete the OPC Detail Design and to construct an initial OPC using that Detail Design, with options for constructing up to 10 additional OPCs.”

Section 2.2.2.2 does at least mention the possibility of a block buy.

 “The impact of block buys of OPCs as a cost reduction strategy shall be addressed in this section.”

The draft SOW states:

“References Available at Award.  The following references will be made available not later than award of the Industry Studies contract.

1. Updated draft OPC System Specification

2. List of Long Lead Time Materials (LLTM)

3. Selected Detail Design Deliverables for information only, including Functional Design artifacts, ABS design review information, Transitional (3D) Design artifacts, Production Design artifacts, Schedules, Test Procedures, and Test Reports.  The maturity of the Functional Design artifacts exceeds 95%.

4. Selected Construction Deliverables for information only, including: Equipment Configuration List, Test results, Engineering Change documents, and schedules

5. Selected Non-Proprietary Management Planning Deliverables for information only

6. USCG Notional OPC Detail Design and Construction (DD&C) Schedule

7. Placemat summarizing OPC Functional Design “

Frankly, I don’t see how you could bid on the contract without having this information first.

The notional schedule does not appear to have changed, meaning, if followed, the contract will not be awarded until the end of FY2022, and the first ship (OPC#5) will not be delivered until near the end of FY2026 and the last ship of the class will not be delivered until near the end of FY2037, three years after the previous plan. At that time the youngest 270 would be 56 years old. We will not have fourteen OPCs to replace the 210s until 2032, by which time the youngest 210 will be 63 years old. This is starting to look ridiculous, but it does looks like there may be some flexibility.

“Contractors will evaluate the referenced design artifacts and propose their most cost effective and schedule efficient plan to transition the Functional Design into a Production Design and to construct OPCs per the contract scope described above. “

This has to be very frustrating. We already went through a year of proposal evaluations, a year of competing preliminary designs, and a year of detail design, and now it looks like we are starting over almost from ground zero.

I anticipate these ships are going to cost considerably more than the original Eastern contract or the original benchmark cost. That, and the considerable delay, are a good argument for funding a 12th NSC in FY2020.

Hopefully the contractors would offer options that would depart from the notional timeline and allow earlier completion of the program as a cost reduction strategy.

On the other hand, if we are going to take this much time, maybe we could make the  ship a bit faster and better armed, since it appears we are firmly back in the great power competition mode.

“Maslow’s “Hierarchy of Needs” Rule and the Coast Guard During a Lapse in Appropriation” –USNI

U.S. Coast Guard photo by Petty Officer 1st Class Matthew S. Masaschi.

US Naval Institute has a short article discussing how delay of pay can undermine our efforts to inspire and retain good people, written by an active duty USCG commander.

This comes at a time when neither the DHS FY2020 budget nor legislation to guarantee continued pay for the Coast Guard in case of a government shutdown has been passed.

“Coast Guard Cutter Procurement: Background and Issues for Congress” –CRS, October 21, 2019, A New Version Reflects RFI

Congressional Research Service has again updated their review of the Coast Guard’s Cutter acquisition programs. (Again only five days after the previous update) The changes reflect the Request for Information (RFI) issued Oct. 18, 2019. You can see the new CRS report here.

The significant changes begin on page 11, and continues through page 14 with quotes from the RFI, and in the “Issues for Congress” section, beginning on page 18 under “Follow-On Competition,” continuing through page 20.

It still seems strange to me that Eastern’s team is not being required to complete the detail design and that the Coast Guard would take the time to develop a second detail design.

As I understand, it the design team is Vard. They should not have been significantly  effected by the hurricane that struck Eastern. Have they been unable to complete a detail design? Shouldn’t they be able to complete one before the re-compete contracts for design studies, evaluates design studies, awards another contract, and completes a second detail design? That the Coast Guard is considering this course make be suspicious that that something is terribly wrong within the Eastern team. I hope I am wrong.

It is gratifying to note that two posts from this blog are referenced in the report:

First Look at new OPC Acquisition Strategy, “Coast Guard Issues RFI for Offshore Patrol Cutter” –MarineLink

Thanks to MarineLink for bringing this to my attention.

The Coast Guard apparently wants a rapid response, “Responses to this RFI must be received no later than 11:00 a.m. eastern time (ET) November 6, 2019,” but otherwise we are not in such a big hurry, as I will explain below.

I will replicate the RFI at the end, but the notional schedule tells us a lot about the currently envisioned acquisition strategy.

Notional Schedule:

You can find the Notional Schedule here. Attachment_1-Notional_Schedule.pdf  Basically it looks like a restart from ground zero.

  • There is to be an Industry Studies RFP Released in mid FY2020
  • Draft Spec are to be released third quarter of FY2020 (don’t we already have not just draft specs but detailed specs?)
  • Draft DD&C RFP at the beginning of FY 2021
  • Detailed Design &Construction RFP Released Second Quarter FY2021
  • Award for Detail Design & Lead Ship Construction does not happen until late FY2022.
  • Again we expect to only build one ship per year for the first three ships before transitioning to two ship a year.
  • The final to OPC would not be delivered until the fourth quarter of FY2037

It appears there are 33 months between the issuance of this RFI and award for Detail Design & Lead Ship Construction and 45 months between the RFI and start of construction of OPC#5. After as much planning and effort has gone into the design of these ships, that has got to be wrong.

The fourteenth OPC will not replace the last 210 until fourth quarter FY2032. That 210 will be over 63 years old. The last 270 decommissioned will be at least 48 years old. I’m sorry, that is ludicrous.

Something is terribly wrong here. Why are we paying for multiple detail designs? This will mean we will have at least two class, even if they may look alike. Did Eastern never complete the detail design as they were contracted to do? Why not demand the detail design as a condition of contract relief? These ships are long overdue. Where is the sense of urgency?

The RFI below does seem to open some additional possibilities including awarding contracts for construction to more than one yard, construction of more than two ships per year, and block buy contracting.

The possibility of multiple detail designs from multiple shipyards, “…the USCG intends to release a solicitation for multiple-award, Government-funded Industry Studies to prospective prime Shipbuilders for an OPC Detail Design and Construction (DD&C) contract” is troubling and raises the possibility of a proliferation of detail designs within the class that is certainly undesirable.

If we persist in this slow approach to construction of the rest of the class, perhaps we should make them faster, quieter, and better armed so they would make better warships if we have to engage in a major naval conflict in the future.

——

Request For Information:

Solicitation Number: RFI-USCG-OPC-2020-1
Notice Type: Special Notice
Synopsis:
Added: Oct 18, 2019 12:01 pm

This Request for Information (RFI) issued by the United States Coast Guard (USCG) is for information and planning purposes only. It does not constitute a Request for Proposal (RFP) or a promise to issue an RFP in the future. No contract award will be made based on any responses to this notice. The Government is not responsible for any costs associated with providing information in response to this RFI and no reimbursement will be made for any cost associated with effort expended in responding to this notice.

Submission of proprietary information is not requested, and respondents shall refrain to the maximum extent practical from providing proprietary information in response to this RFI. If respondents volunteer to provide proprietary information, clearly mark such proprietary information appropriately and separate it from the unrestricted information as an appendix.

Responses to this RFI must be received no later than 11:00 a.m. eastern time (ET) November 6, 2019. Respondents shall email responses to the following email address: OPC@uscg.mil. Please direct any questions regarding the posting of this RFI to the attention of the Offshore Patrol Cutter (OPC) Program at OPC@uscg.mil. To assist the Government with tracking responses, please reference “Offshore Patrol Cutter (OPC)” and company’s name in the subject line. Telephonic responses will not be accepted. Follow-up discussions may be conducted with respondents.

Purpose

On October 10, 2019, the U.S. Department of Homeland Security approved and granted extraordinary relief to Eastern Shipbuilding Group, Inc., on its OPC contract, for up to four hulls as a result of the impact of Hurricane Michael (DHS & USCG press releases are available at the following links: https://www.dcms.uscg.mil/Our-Organization/Assistant-Commandant-for-Acquisitions-CG-9/Newsroom/Latest-Acquisition-News/Article/1987279/department-of-homeland-security-approves-limited-extraordinary-relief-for-offsh/ and https://www.dhs.gov/news/2019/10/11/dhs-extends-contract-relief-offshore-patrol-cutter).

The USCG is now working to further develop and finalize its acquisition strategy for completing the OPC Program of Record of 25 hulls. The purpose of this RFI is to obtain feedback on a notional OPC acquisition approach and schedule for completing the OPC Program of Record as soon as possible.

Notional Approach & Schedule

Attachment 1 is a notional schedule that outlines a high-level acquisition approach where multiple Government-funded Industry Studies contracts may be awarded to assist in the refinement and completion of the existing OPC Detail Design and the development of a Detail Design and Construction (DD&C) solicitation to facilitate delivery of affordable OPCs to the fleet as quickly as possible, while reducing program risk over the course of the Program of Record. Under this approach, it is anticipated that upon completion of Industry Studies, the USCG would award one or more competitive contract(s) for completing the Detail Design and Construction (DD&C) of OPCs (emphasis applied–Chuck) in a continued effort to fulfill the USCG’s Program of Record requirements for 25 OPCs.

In order to meet the OPC Program’s operational fleet needs, it is assumed that Shipbuilders would utilize the mature parts of the existing OPC functional design (emphasis applied–Chuck)– to the maximum extent possible – and mature any incomplete aspects of the detail design. The existing functional design, including selected 2D design drawings, calculations, and diagrams, will be made available for Industry Studies contract awardees and will not be warranted by the Government. While schedule is a major driver, program affordability must remain a constant consideration.

Industry Studies Contracts: In early FY20, the USCG intends to release a solicitation for multiple-award, Government-funded Industry Studies to prospective prime Shipbuilders for an OPC Detail Design and Construction (DD&C) contract. (emphasis applied–Chuck) It is anticipated that the Government will award Industry  Studies contracts to Shipbuilders able to build (i.e., with a certified launch facility), design (i.e., Shipbuilders with in-house design capability or a designer as a team member), and have the capacity to deliver (i.e., within the shipyard’s current build schedule) OPCs featuring Command and Control, Navigation, Aviation, and Navy-furnished Combat systems no later than the dates included in the notional schedule below. As part of the Industry Studies solicitation, the Government may provide a draft OPC System Specification, technical data package, and draft DD&C Statement of Work. This data describes a basic OPC functional design, which has completed a Critical Design Review. Shipbuilders may be required to use this non-warranted data as the basis for completing an affordable Detail Design of the OPC on an accelerated delivery timeline. An overview (placemat) of this functional design will also be provided to Industry Study awardees. As part of Industry Studies, the Government is interested in understanding how the 2D functional design will be transitioned and incorporated into a final 3D production design for OPC construction at each Shipbuilder’s facility. It is anticipated that each Shipbuilder will conduct several cost, schedule, capability and technical studies to support validation and refinement of its proposed OPC Detail Design and transition to a production design. The results of the Industry Studies will further inform a Government RFP for an OPC DD&C contract.

Detail Design and Construction (DD&C) Contract(s): The Program intends to release an RFP, through separate full and open competition, leading to award of Long Lead Time Material (LLTM) and DD&C for OPCs in an effort to complete the OPC Program of Record of 25 hulls.

The OPC Program seeks industry feedback on the notional program schedule (Attachment 1) as well as industry feedback on how construction of OPCs could be further accelerated and how acceleration would affect program risk and cost.

 Requested Information from Industry

Acquisition Strategy Feedback

1. Given the publicly-available information and description provided above on the status of the OPC program, please provide a recommended contracting approach for the USCG to obtain Long Lead Time Material (LLTM), Detail Design, and Construction of OPCs in an effort to complete its Program of Record of 25 hulls. Describe perceived risks, impediments to competition, and opportunities available to the USCG to incentivize robust industry interest and competition and maintain program affordability. Examples of other input being sought includes, but is not limited to, contract type, Industry Studies scope of work, performance incentives, evaluation criteria, source selection approach, etc.

2. Identify risks with the notional approach described in this RFI, suggest measures to mitigate risk, and identify potential opportunities to accelerate the notional schedule, while maintaining program affordability.

3. Provide a notional plan of action and milestones for how your company would meet or accelerate the delivery dates depicted in the notional schedule provided in this RFI, while maintaining program affordability.

4. Identify how your company would approach using a Government-provided, non-warranted functional design to construct one or more OPCs. Discuss any potential technical risks associated with refining/completing an existing design from industry’s perspective. Describe your company’s preferred approach to completing an OPC production design, based on the notional schedule outlined in this request, and how your company views a requirement to utilize a non-warranted functional design data package.

5. Provide input on the potential use of a block buy contracting approach (emphasis applied–Chuck) during the course of the program and recommendations for incorporation of such an approach if your company deems that block buy contracting is feasible. Also, if your company deems that block buy contracting is not feasible, explain the rationale against using this approach.

6. Indicate if constructing two hulls per year is feasible and provide your company’s expected shipbuilding capacity with respect to constructing multiple hulls per year. (emphasis applied–Chuck) Any recommendations or input on the overall production schedule are encouraged.

Respondent Company Information

7. Please provide the current status of the DFARS-based certifications or approvals of your company’s: 1) Accounting System (DFARS 252.244-7006); 2) Earned Value Management System (DFARS 252.234-7002); 3) Purchasing System (DFARS 252.244-7001); and 4) Estimating System (DFARS 252.215-7002).

8. Aspects of this program will require access to Secret material. Please address your company’s ability to meet personnel and facility security requirements.

9. Provide one recent example of your company’s experience in delivering ships featuring C5ISR, Navigation, Aviation, and Combat Systems, and identify major subcontractors used to manage development, construction, and/or integration of those systems. (emphasis applied, not going with any inexperienced shipyard this time. Eastern will not have delivered such a ship when this submission is required and may disqualify them from the recompete –Chuck)

10. Provide a yard-loading schedule that demonstrates your company’s expected shipbuilding capacity to support the OPC program and its planned serial, multiple-hull build approach.

11. Indicate your company’s interest in participating in the potential future Industry Studies and DD&C contracts.

 

“Coast Guard Cutter Procurement: Background and Issues for Congress” –CRS, October 16, 2019, A New Version Only Five Days After the Last

Congressional Research Service has again updated their review of the Coast Guard’s Cutter acquisition programs and the changes are significant. You can see it here.

Again the significant changes begin on page 8, with the section labeled “October 2019 Announcement of Contractual Relief and Follow-on Competition.” It looks at the authority for contract relief. It goes on to discuss the “60-Day Congressional Review Period That Started on October 11” on page 9. This is followed by quotation of various press reports about the decision through page 11. Discussion of the OPC resumes on page 14 in the “Issues for Congress” section under the title, “Contractual Relief and Follow-on Competition for OPC Program.” These include questions that might be asked during the 60 day Congressional Review period. This continues through page 16

It quotes the Commandant as saying, “the first ship now delayed 10 to 12 months and the three subsequent ships about nine to 10 months each from that point,” and that “If DHS decided to reopen the competition immediately, that would probably mean a three year delay before a new vendor delivers the first OPC.” (I expect a minimum of four years.) and “If another vendor is selected through a re-competition, it’s unlikely the new shipbuilder would be tasked with building multiple ships per year immediately, Schultz said.”

The Coast Guard’s rights to Eastern’s OPC design data are discussed. My position would be that relief should be granted only if Eastern conveyed rights to all design data to the Coast Guard upon final grant of contract relief. 

The possibility of procuring a twelfth National Security as a means of ameliorating the effects of the delays to the OPCs program was discussed on page 17. (It is not addressed here, but delays in the OPC program also argue strongly for fully funding the FRC fleet to 64 units.)

The form of the follow-on contract, either annual or multi-year, was discussed on page 17 and 18. (A block buy could encourage more competition, offering stable work and to a degree offsetting Eastern’s learning curve edge in a re-compete, possibly resulting savings that might approach $1B.)

OPC procurement rate is addressed on pages 18 and 19. This question was raised in all previous editions of the report, but may gain additional urgency because of the delays associated with contract relief and because the program was supposed to transition from one ship per year to two ships per year with OPC #4 and #5 in FY2021.

If I had my druthers, we would fund NSC#12 in addition to OPC#3 in FY2020, then in FY2021 award two block buy contracts for ten ships each over five years (1, 2, 2, 2, 3) to two different shipyards. Assuming award near the end of FY2021 we might have all 20 plus the four currently planned from Eastern by the end of FY2029, five years earlier than previously planned. That could mean the last 270 would only be 38 years old when decommissioned, and we might not need to do as much work on old ships to keep the operational. That would give us 36 large ships (12 NSCs and 24 OPCs), more than the original Program of Record. That would mean funding three OPCs in FY2021, one to Eastern and one to each of the two new shipyard contracts.

“Appendix E. Impact of Hurricane Michael on OPC Program at Eastern Shipbuilding Group (ESG)” provides additional background on the decision to provide contract relief.

Incidentally, on page 20, the House Appropriations Committee is reported to have recommended funding five FRCs in FY2020 and on page 21 the Senate Appropriations Committee is reported to have recommended funding four FRCs instead of the two requested by the administration.

“Coast Guard Cutter Procurement: Background and Issues for Congress” –CRS, October 11, 2019

Busy as always, the Congressional Research Service has already updated their examination of the Coast Guard’s cutter procurement program to reflect the results of the contract relief extended to Eastern Shipbuilding Group (ESG) and the intention to re-compete for contracts to construct OPC#5 and later. You can see the new report here. 

Significant changes are found on pages 8-10 under the title “October 2019 Announcement of Contractual Relief and Follow-on Competition,” and pages 13-15 under the title “Issues for Congress–Contractual Relief and Follow-on Competition for OPC Program.”

Delays in the execution of the OPC program might be seen as justification for NSC#12 particularly if it is seen as a trade-off for a future OPC.

Not new to this edition, but looking at “Table 1. NSC, OPC, and FRC Funding in FY2013-FY2020 Budget Submissions” on page 13, raises a question about how many Webber class FRCs are to be built. The Program of Record is 58, but this did not include replacements for the six vessels assigned to Patrol Forces SW Asia. Adding six for PATFORSWA should bring the total to 64. So far 56 Webber class have been funded, including four to replace 110 foot patrol boats assigned PATFORSWA. There is $140M in the FY 2020 budget request, which would fund two more, but there are insufficient funds in the out years to fund even a single additional FRC. This appears to mean the program will end with a total of 58 vessels unless Congress steps in.