“The U.S. Navy-Coast Guard Partnership Is Heading For Trouble: Here’s How To Fix It” –Forbes

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BAHRAIN (Dec. 19, 2014) Helicopter Sea Combat Squadron (HSC) 26, Det. 1, conducts a vertical onboard delivery with the U.S. Coast Guard Cutter Maui (WPB 1304). HSC-26 is a forward deployed naval force asset attached to Commander, Task Force 53 to provide combat logistics and search and rescue capability throughout the U.S. 5th Fleet area of responsibility. (U.S. Navy photo by Mass Communication Specialist 1st Class Joan E. Jennings/Released)

Forbes points to growing strain in the Navy/Coast Guard relationship as defense focus shifts from counter terrorism to near peer conflict.

The author, Craig Hooper, points to limits on reimbursement of Coast Guard costs in support of DOD, limited Navy support for drug interdiction and law enforcement efforts, a push for more Coast Guard assets in the Western Pacific, a need to recapitalize the Coast Guard Yard as a national asset, and possible deployment of Navy personnel and assets, particularly rotary wing, to aid in the execution of missions.

“Reorienting the Coast Guard to address “new” state-based threats is a complex problem that will require patient investment and a lot of  preparatory work to be successful. The Coast Guard is part of America’s large National Fleet, and the tighter integration of Coast Guard forces—along with the U.S. Merchant Marine, NOAA’s research fleet and other Federal maritime assets—into the U.S. national security mission space merits thoughtful consideration…”

The topic raises a number of issues.

The Coast Guard is simply underfunded. If the Coast Guard’s defense related missions were properly recognized and funded as part of our very day missions, no reimbursement would be necessary. Certainly fisheries patrols in the US Western Pacific EEZ are a real everyday Coast Guard mission.

As cutters go increasingly into harms way, maybe they need to be better equipped for the possibility of combat.

Mobilization planning really should address how Navy Reserve Personnel and equipment, notably ASW helicopters, LCS mission modules, and ASW, EW, and Weapons operators and support personnel, could augment cutters and bring them up to a wartime compliment.

Coast Guard Cutter Procurement: Background and Issues for Congress, Updated May 22, 2019

Offshore Patrol Cutter future USCGC ArgusThe Congressional Research Service has once again updated their look at Coast Guard Cutter procurement.

I have quoted the summary below and will comment on some of the questions.

The Coast Guard’s 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 FY2020 budget requests a total of $657 million in procurement 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 $670 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 FY2019 has funded 11 NSCs, including the 10th and 11th in FY2018. Six NSCs have been commissioned into service. The seventh was delivered to the Coast Guard on September 19, 2018, and the eighth was delivered on April 30, 2019. The ninth through 11th are under construction; the ninth is scheduled for delivery in 2021. The Coast Guard’s proposed FY2020 budget requests $60 million in procurement funding for the NSC program; this request does not include 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 $421 million per ship. On September 15, 2016, the Coast Guard awarded a contract with options for building up to nine OPCs to Eastern Shipbuilding Group of Panama City, FL. The first OPC was funded in FY2018 and is to be delivered in 2021. The second OPC and long leadtime materials (LLTM) for the third were funded in FY2019. The Coast Guard’s proposed FY2020 budget requests $457 million in procurement funding for the third OPC, LLTM for the fourth and fifth, and other program costs.

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 56 have been funded through FY2019, including six in FY2019. Four of the 56 are to be used by the Coast Guard in the Persian Gulf and are not counted against the Coast Guard’s 58-ship POR for the program, which relates to domestic operations. Excluding these four, a total of 52 FRCs for domestic operations have been funded through FY2019. The 32nd FRC was commissioned into service on May 1, 2019. The Coast Guard’s proposed FY2020 budget requests $140 million in acquisition funding for the procurement of two more FRCs for domestic operations.

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

  •     whether to provide funding in FY2020 for the procurement of a 12th NSC;
  •  whether to fund the procurement in FY2020 of two FRCs, as requested by the Coast Guard, or some higher number, such as four or six;
  •  whether to use annual or multiyear contracting for procuring OPCs;
  •  the annual 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; and
  •     the planned procurement quantities for NSCs, OPCs, and FRCs.

Bertholf Class National Security Cutters (NSCs):

If there is going to be a 12th NSC, it almost certainly has to be funded this year. Future years will see the Polar Security Cutters and OPCs further crowding the budget. Frankly I see little to choose between the NSC and OPC for peacetime missions, but the replacement of the legacy fleet is becoming urgent and the price of the NSCs has decreased as funding became more regular, so a 12th might be reasonable. If we had started the OPC program earlier, it might have offered a lower cost alternative to additional NSCs, but we will not be ready to start multi-ship procurements of the OPCs until FY2021 and then only at the rate of two per year if we follow current planning.

Argus Class Offshore Patrol Cutters (OPCs):

There is probably good reason to accelerate the OPC program beyond the two per year currently planned to begin in FY2021. If we maintain that rate, the last 210 foot WMEC will not be replaced until 2028, the last 270 not until 2034. I expect we may see some catastrophic failures that will result in either sidelining ships or unacceptably high repair costs, before the program of record is complete.

The Coast Guard should plan on expediting testing of the first OPC so that production could move from the current contract with options to a true Multi-Year contract as soon as the design has proven successful.

We probably will need more than 25 OPCs. The Coast Guard has operated more than 40 cutters of more than 1,000 tons for decades. It seems likely we are going to need more than 36 total NSCs and OPCs. (See the discussion about the Fleet Mix Study below.)

Webber Class Fast Response Cutters (FRCs):

We are nearing the end of the Webber class program with 52 of the 58 program of record vessels, plus four additional vessels for Patrol Forces South West Asia (PATFORSWA), already funded. Buying only two for FY2020 raises the unit costs of these vessels. Congress has consistently increased purchases to four or even six per year when only two have been requested. Adding the final two additional FRCs intended to replace the 110s assigned to PATFORSWA would bring the total buy to four. That would leave only four to be purchased in FY2021 which could wrap up the funding. The question is, will Congress stop the program at the 64 vessels total when there may be justification for more?

Impact of Hurricane Michael: 

The Coast Guard budget is not the place to provide disaster relief for businesses. Maybe they have insurance. Maybe the state or Federal Government wants to provide aid, but renegotiating the contract for OPCs is not the way to do it. No way should it come out of the Coast Guard budget.

If on the other had we do renegotiate the contract, it is not to late to make it a “Block Buy.”

One solution might be for the contract to be converted to a block buy, using purchase amounts no more than current contract with options. That would assure the contractor and its creditor that they would have a steady stream of work. The contract might even have options for production of additional ships at rates higher than two per year.

We Need a New Fleet Mix Study:

The number of OPCs and FRCs actually required to fulfill Coast Guard statutory missions was examined in a fleet mix study (see pages 19 and 20 of the report) that found that the Program of Record (8 NSCs, 25 OPCs, and 58 FRCs) fell far short of the number of vessels required to meet all statutory requirements. Phase One of the study (2009) found that the total “objective” requirement was 9 NSCs, 57 OPCs, and 91 FRCs. Phase Two found that only 49 OPCs would be required but found the same requirements for NSCs and FRCs (see page 22).

The problem is that the analysis is getting pretty old and its assumptions were wrong. The Coast Guard will have at least 11 NSCs. The FRCs appear to be more capable than anticipated. Perhaps most importantly, the study assumed the NSCs and OPCs would use the “Crew Rotation Concept,” resulting in an unrealistic expectation for days away from homeport. From my point of view, the study failed to even consider the requirement to be able to forcibly stop a medium to large size ship being used as a terrorist weapon. None of our ships are capable of doing that reliably, and even our ability to stop small fast highly maneuverable ships under terrorist control is far from assured, even if the objective fleet were available.

The Procurement, Construction, and Improvements FY2020 budget request is about $1.2B. Adding NSC #12 and a pair of FRCs using the costs in the CRS report ($670M/NSC plus 2x$58M/FRC) which are probably high for the current marginal costs, would still leave the PC&I budget under the $2B/year the Coast Guard has been saying they need and about $250M less than the FY2019 PC&I budget.

For the Future:

While we are thinking about cutters, with the FRC program coming to an end, it is not too early to think about the 87 foot WPB replacement. I think there might be a  window to fund them after the third Polar Security Cutter if we have our requirements figured out. That means preliminary contracts such as conceptual designs have to be done during the same period we are building PSCs, e.g. FY2022 and earlier. .

To avoid always being constantly behind the power curve, as we have been for the last two decades, we really need a 30 year shipbuilding plan. The Navy does one every year. There is no reason the Coast Guard should not be able to do one as well. The Congress has been asking for a 25 year plan for years now, but so far no product.

Thanks to Grant for bringing this to my attention. 

“Coast Guard Needs Congress for Budget Bailout” –National Defense

US Capital West Side, by Martin Falbisoner

National Defense reports that the Administration’s 2020 budget request makes deep cuts in the Coast Guard budget compared to recent years, but that there is a good chance Congress will make up at least some of the difference.

You can see a brief summary of the budget submission here.

We have Congress plus up the Coast Guard’s budget in the past, particularly in terms of increasing numbers of Webber class cutters funded. The 2020 budget includes only two. This is likely to be increased to four or even six.

Congress has also added three Bertholf class NSC to the program of record and there have been suggestions that a 12th is needed to fully replace the 378 foot WHECs. If we are to get a 12th NSC, it almost has to happen in FY2020 before we OPC construction goes to two per year and before we need to fund Polar Security Cutters 2-6.

The Commandant has been talking about maintenance backlogs recently. Unfortunately maintenance does not have the highly visible job creation impact of new construction, although the dollar for dollar impact may be as great. It seldom makes the evening news, so this may be a harder sell.

 

“Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress, Updated May 9, 2019”

The Congressional Research Service has updated their report on the Polar Security Cutter Program. This is the first revision since the award of the contract, so there are significant changes, including a section on the selected design found on pages 5-9.

Waterways Commerce Cutter Update

USCGC Smilax (WLIC-315), commissioned 1944

Here is a link to a power point style update on the Waterways Commerce Cutter apparently given at the Navy League’s Sea-Air-Space Exposition, 7 May, 2019.

They are hoping for initial operational capability for the new vessels in FY2024 and full operational capability (which I interpret as all the new vessels in commission FY2030.

Thanks to Lee for bring this to my attention. 

“Nearing a ‘tipping point,’ Coast Guard needs lasting change” –The Hill

Coast Guard Commandant Adm. Karl Schultz visits with Coast Guard crews stationed in New York City. U.S. Coast Guard photo illustration by Petty Officer 1st Class Jetta Disco.

The Commandant has an opinion piece in “The Hill” explaining the effects of continued short falls in the Coast Guard’s Operating budget.

Because of unplanned maintenance and supply shortages, we lost the operating equivalent of two major cutters and seven helicopters last year, adversely impacting mission performance. In addition, the Coast Guard has delayed shore infrastructure repairs to such a degree that we now have a $1.7 billion backlog of urgent projects. Simply put, cuts from within have hollowed Coast Guard readiness.

He points to what appears to be a misinterpretation of the Budget Control Act.

A less-recognized impact developed when the lower sequester spending limit took effect in 2013. The BCA originally established the two primary categories of discretionary spending as “security” and “non-security.” However, once sequestration was enacted, the categories automatically changed to “defense” and “non-defense.” This means that DHS, with a military service — the Coast Guard — in its arsenal and national security as its primary responsibility, is limited under an annual non-defense discretionary cap of roughly $49 billion and forced to compete with all other non-DOD agencies for funding. Yet, under a “security” classification, DHS would be included with DOD under budget caps that recently exceeded $600 billion.

He suggests a phased solution.

The fix seems simple, and it is. The near-term solution is to increase the Coast Guard’s share of Defense funding — without penalizing DHS’s budget cap — to more appropriately resource us with necessary equipment, training, people and operating funds. Phased increases of $200 million per year, or 0.0003 percent of DOD’s 2019 budget, would begin to close the gap between our current Defense funding and actual Defense contributions.

The long-term solution is to recognize the Coast Guard’s crucial role in maintaining our national security and fund us as a military service. The appropriations structure should return to the “security” and “non-security” classifications, the original and arguably “just” intent of the BCA. This would ensure the Coast Guard is funded in parity within the same category as all U.S. Armed Forces and allow for consolidated oversight of all national security spending.

My Take

Let us be frank. We are not taken seriously as an armed force. We should be. In terms of personnel and number of ships, the Coast Guard is larger than the Royal Navy. If we want the Congress and the Administration to see us as a Defense asset, we need to do more than talk the talk, we need to walk the walk. We need missions and weapons. We need to identify the threats, how we can compliment the Navy, and the additional capabilities we need, not just in the case of a terrorist attack, but also in case of a major conflict with a near peer adversary.

The capacity building which we do, and I believe is important, can be perceived as more law enforcement than defense. These operations may even be seen by some, as an indication we actually have more assets than we need, since we have taken on this extra task, which is outside our normal mission areas.

We seem to argue that we are funded for peacetime and our readiness for war comes as a free good. We need to change that argument and that perception, which we have unfortunately cultivated. Our Defense Readiness needs to be paid for.

On the other hand, we can argue that, unlike other armed services, the Coast Guard gives the country a double payback. When we are funded the Coast Guard’s readiness for war, the country also gets better results in peacetime. It means more capable platforms, better communications and intelligence, and more secure ports.

“Coast Guard Hopes to Have 3 Polar Security Cutters Fielded by 2028” –USNI

The US Naval Institute reported on the Commandant’s remarks from the service chiefs panel at the Navy League’s annual Sea Air Space conference regarding the Polar Security Cutter program.

“right now my sense is we enjoy support from the administration, we enjoy bipartisan, bicameral support” in Congress, he said

The first ship is supposed to deliver to the Coast Guard in 2023..The Commandant did not speculate on the future funding profile, saying only that he expected three PSCs operational by 2028. USNI noted,

…buying the second and third ships in FY 2021 and 2023, respectively – would allow for all three to be in the fleet by 2027 or 2028.

Chief of Naval Operations Adm. John Richardson also remarked on Freedom of Navigation Operations in the Arctic and the Navy’s intention to operate in the Arctic.