Category Archives: icebreaker

A Billion Dollar, Once in a Lifetime Opportunity

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I have been reading over Congressional Research Service’s Specialist in Naval Affairs Ronald O’Rourke’s prepared statement before the House Transportation and Infrastructure Committee’s Coast Guard and Maritime Transportation Subcommittee Hearing on The Status of Coast Guard Cutter Acquisition Programs, February 3, 2016. The implications are a bit startling.

By using Block Buy Contracting (BBC) and Multi-Year Procurement (MYP), the Coast Guard might save as much as $1.2B. This is an opportunity that may not come again for at least 30 years.  

This breaks down to about $100M on contracting for the remaining 26 Fast Response Cutters, $100M on a contract for two heavy icebreakers, and a whopping $1B over the life of the Offshore Patrol Cutter procurement.

We have never used these contracting methods before, but the Navy has with great success in their Burke class DDG, Virginia class submarine, and LCS programs.

The Congress has already granted authority to use Multi-Year Procurement (MYP) for the Offshore Patrol Cutter program, but because of the requirement of the law covering MYP a contract under these provisions probably could not be negotiated until at least FY2022 by which time the first five ships would have already been contracted for. Block Buy Contracting would require specific enabling legislation but could allow additional savings beginning in FY2018.

I would encourage reading the entire statement. There are only seven pages of testimony and ten pages of background appendices, but I’ll provide a “Reader’s Digest” version. Hopefully the author will forgive me for re-editing his work.

“The Coast Guard has used contracts with options in cutter acquisition programs. A contract with options may look like a form of multiyear contracting, but operates more like a series of annual contracts. Contracts with options do not achieve the reductions in acquisition costs that are possible with MYP and BBC.

“MYP can reduce the unit procurement costs of ships by roughly 10%, compared to unit procurement costs under the standard or default approach of annual contracting. BBC can reduce the unit procurement costs of ships by amounts comparable to those of MYP, if the authority granted for using BBC explicitly includes authority for making economic order quantity (EOQ) purchases (i.e., up-front batch purchases) of components. If the authority granted for using BBC does not explicitly include authority for making EOQ purchases, then the savings from BBC will be less—in the range of roughly 5%. EOQ authority comes automatically with MYP authority, but must be explicitly included in legislation granting BBC authority.

BBC, unlike MYP, can be used at the outset of a shipbuilding program, starting with the lead ship in the class. (emphasis applied–Chuck) MYP, in contrast, cannot be used until the lead ship has completed construction. Thus, for a class of ships that is procured at a rate of one ship per year and in which each ship takes five years to build, BBC can be a contracting option starting with the first ship in the class, and MYP can become a contracting option starting with the fifth or sixth ship in the class. This difference is due to the requirement under the statute governing MYP (10 U.S.C. 2306b) that a program must demonstrate design stability to qualify for MYP. In a shipbuilding program, design stability is typically demonstrated by completing the construction of the lead ship in the class.

“The Coast Guard wants to procure a total of 25 OPCs, and currently plans to use a contract with options for acquiring the first 9 to 11 ships in the program. The OPC program can be viewed as a candidate for instead using BBC for the initial ships in the program, and either BBC or MYP for later ships in the program. If using BBC and MYP were to reduce the acquisition costs of OPCs by about 10% (compared to costs under a contract with options), the savings would amount to roughly $1 billion. An alternate way to characterize such savings would be to say that using BBC or MYP would enable the Coast Guard to get about two and a half of the 25 OPCs for “free,” or to pay for the acquisition of a polar icebreaker.

“The Coast Guard plans to soon award a contract with options for acquiring the final 26 ships in the 58- ship FRC program. The final 26 ships in the program can be viewed as a candidate for instead using either MYP or BBC. If using MYP or BBC were to reduce the acquisition costs of OPCs by about 10% (compared to costs under a contract with options), the savings would amount to more than $100 million. An alternate way to characterize such savings would be to say that using MYP or BBC could enable the Coast Guard to get about two and a half of the 26 FRCs for “free.”

“The Offshore Patrol Cutter (OPC) program and the polar icebreaker (PIB) program can be viewed as candidates for using BBC, and the Fast Response Cutter (FRC) program can be viewed as a candidate for using either MYP or BBC. Using MYP and BBC for all three of these programs might produce savings totaling about $1.2 billion, an amount roughly equivalent to the average annual funding level in the Coast Guard’s Acquisition, Construction, and Improvements (AC&I) account. In considering whether to grant authority for using MYP or BBC for these programs, Congress may weigh the potential savings of these contracting mechanisms against the tradeoffs…From a congressional perspective, tradeoffs in making greater use of MYP and BBC include the following:  reduced congressional control over year-to-year spending, and tying the hands of future Congresses;  reduced flexibility for making changes in Coast Guard acquisition programs in response to unforeseen changes in strategic or budgetary circumstances (which can cause any needed funding reductions to fall more heavily on acquisition programs not covered by MYP or BBC contracts);  a potential need to shift funding from later fiscal years to earlier fiscal years to fund EOQ purchases of components;  the risk of having to make penalty payments to shipbuilders if multiyear contracts need to be terminated due to unavailability of funds needed for the continuation of the contracts; and  the risk that materials and components purchased for ships to be procured in future years might go to waste if those ships are not eventually procured.”

There seems little doubt we will need all the ships currently planned. The commitment is only a minuscule percentage of the Federal Budget, and therefore constitutes an extremely small risk. Use of Block Buy and Multi-Year Procurement could bring stability to the Coast Guard’s AC&I funding and result savings equal to an entire year’s worth of AC&I funding.

Thoughts on State of the CG, 2016

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You can read the Commandant’s State of the Coast Guard speech here (pdf). It is only eight pages.

The Commandant continues to hammer on themes he has addressed in the past–the Arctic Strategy in response to the opening of a new ocean and the Western Hemisphere Strategy in response to lawlessness in Central America and the resulting immigration crisis (plus the ships needed to employment the strategies–OPCs and Icebreakers in particular), and duty to our people (the Human Capital Strategy). While the topics are familiar, his tone is more optimistic.

The Coast Guard budget for FY2016 included the largest acquisitions, construction, and improvements (AC&I) budget in its history and the Commandant appears to believe this will not be a flute.

The Commandant has chosen his battles and is doing well in terms of conveying what he sees as the critical narrative. Now it sounds like he is about to expand his objectives.

The Commandant has promised an analysis of Coast Guard personnel requirements.

Most people have seen the great American cinema classic Jaws. In it, Police Chief Brody, when he first lays eyes on the 30-foot Great White shark attacking New England beachgoers, says to his colleague, “You’re going to need a bigger boat.” It is a great line that lives on as an expression to state the obvious.
We’ll let me nuance that a bit. Looking at the challenges we’re facing in the world today: ladies and gentlemen, you’re going to need a bigger Coast Guard….As required by our 2015 Authorization Act, I am directing a Coast Guard Manpower Requirements Plan to formally establish a force size informed by strategy, analysis and risk management.

Allow me to look even further down the road,

The world seems to becoming an increasingly dangerous place. The brief window when the US ruled a mono-polar world is closed. It may be time for the Coast Guard to reemphasize its military character. If you look at long term trends, the size of the Coast Guard, in terms of personnel has generally been stable or growing, while the still much larger, Navy has continued to shrink. When I was commissioned in 1969, the Navy was about 21 times larger than the Coast Guard and the Marine Corps was over eight times as large. Now the Navy is less than eight times the size of the Coast Guard, and the Marine Corps is less than five times as large. In terms of personnel the Coast Guard is already larger than the British or French Navy. This suggest that its potential as a significant naval force should not be ignored. 

The Coast Guard now seems poised to have a future fleet of nine frigate sized National Security Cutters and 25 corvette (or light frigate) sized Offshore Patrol Cutters. That is 34 surface combatants, not an insignificant number when you consider the Navy has and will have only about 120 cruisers, destroyers frigates and LCS. While the cutters quality as warships is far below that of DDG, they are not far removed from that of an LCS and in some respects, particularly endurance, they are superior. We really need to look at what we could do, for relatively small marginal costs, to make these ships effective contributions to the National Fleet. In a similar fashion we need to look at how other elements of the Coast Guard could strengthen national defense.

The Coast Guard may be the US’s secret naval edge, unrecognized by our enemies and by our own government, the Navy and many of our own people, but risking the stealthy nature of our contribution to national defense, a more formalized and recognized military tasking could justify continued expansion that could also improve performance in other mission areas, and give us the bigger Coast Guard the Commandant think we need.

 

Chilean Icebreaker/Supply Vessel, plus Other News From Chile

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ChileanIcebreaker

Photo: New Chilean Icebreaker/Antarctic Supply Vessel.  

I recently had an exchange of emails with Andrés Tavolari, a lawyer and Chilean Marine Reserve Officer, who wrote one of our most popular posts, Three Nations Share German OPV Design.

He tells me Chile is building an icebreaker/supply ship. In terms of horsepower, it will be more powerful than the old Wind class icebreakers and only slightly less powerful than the Glacier. Our resident icebreaker expert, Tups, talked about this ship in a comment on an earlier post.

VARD is designing an icebreaker for the Chilean Navy:

http://www.marinelink.com/news/icebreaker-antarctic404371.aspx

One thing that puzzles me is the performance. 14.5 MW for 2 knots in 1 m ice? I mean, the bigger South African research vessel S. A. Agulhas II can do 5 knots with just 9 MW propulsion power (12 MW installed power).

My initial comment was that “Some times they just call out the minimum contract specs. Does not mean they might not be capable of more.” While that might be the case, there is an alternate possibility, perhaps the hull will not be strong enough to break heavier ice or to break one meter of ice at a faster rate. If you look at where Chile has their Antarctic stations, they are all about as far from the Pole as you can get and still be in Antarctica. Perhaps they do not need great icebreaking performance to accomplish their mission. Shaping very thick steel plate is undoubtably difficult and one of the more demanding aspects of building an icebreaker. Perhaps lighter plate is seen as a reasonable compromise.

512px-Antarctica_CIA_svg

Antarctic claims. This chart from Wikipedia Commons. 

Chile’s current icebreaker is the former Canadian Icebreaker CCGS Norman McLeod Rogers, which entered service originally in 1969.

Also of interest, the Chilean Navy magazine has published a special edition with some nice pictures regarding several naval and maritime activities. The text is written in Spanish, but it is mostly pictures and graphics. So the language doesn’t preclude understanding much of it.

Andres pointed out, on pages 36 and 37, there is a graphic with the ships and aircraft of the Navy. Among others there are 3 OPVs, 18 Protector class boats, 4 Grumete / Dabur class boats, 26 Archangel boats and 15 Defender boats, and 3 C-295 Persuader MPA and 8 HH-65 Dolphin helicopters. All in all, there are 22.000 men and women in the navy, including some 2.800 marines. The icebreaker is illustrated on page 44.

On page 45 there is some information regarding the OPVs project called “Danubio”. This is a continuation of the OPV project Andres posted about earlier.

Andres also sent along some information about their Navy’s Shipyard, in the form of a power point presentation including some pictures of the damage suffered by the 2010 tsunami, and its reconstruction (slides 19 – 26). Slide 39 covers the icebreaker.

We also talked a little about the organization of Chile’s Coast Guard counterpart, DIRECTEMAR. It is a part of the Navy organization. While heads of DIRECTEMAR have gone on to head the Navy, these officers have not come up through the ranks in DIRECTEMAR, they have been regular Navy officers.

DIRECTEMAR’s counterpart to our WPBs are the 16 Danubio Class, delivered 1999-2004.

  • 125 tons fl
  • 25 knots
  • 33.1×6.6×1.9 meters or 109x22x6.2 feet
  • one 12.7mm
  • 2 MTU 16V2000 M90 diesels 3,200HP
  • 2 off, 8 enlisted
Many of DIRECTEMAR’s small boats will look familiar. They have a number of USCG type boats procured through Foreign Military Sales, which have proven effective in countering illegal fishing activities.

Document Alert: Coast Guard Cutter Procurement: Background and Issues for Congress

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Samsung

Photo: USCGC Steadfast, one of the newer 210 class, now about 48 years old. We don’t expect her replacement for at least another ten years.

The US Naval Institute has published the Congressional Research Services latest version of Coast Guard Cutter Procurement: Background and Issues for Congress, by their Naval Affairs Specialist, the ever prolific Ronald O’Rourke.

It is not quite up to date, because it does not reflect funding for a ninth National Security Cutter, but otherwise it nicely defines the issues the program has been faced with, most notably inadequate funding.

It also raises the question, should multi-year or block buy funding, with its potential for substantial savings, be pursued? We really should be doing this for the Webber class, which is a proven, mature design, approved for full rate production. In fact, we should have been doing this for a couple of years now.

The thing I found most disturbing was that the first Offshore Patrol Cutter (OPC) will not be funded until FY2018, although it looks like the detail design will be funded in FY2017. I am beginning to wonder if we will see the first OPC before 2022.

The FY2016 budget was a pleasant surprise with the addition of funds to build a ninth National Security Cutter. If this near $2B funding level is seen as a new norm (as I would hope) there will be room in the FY2017 budget for another major acquisition. It might be a tenth NSC. That would not be an altogether bad thing, but it would be outside the needs identified in the Fleet Mix Study. Unless another major project is injected into the FY2017 budget, we will loose the momentum for a larger AC&I budget.

If the FY2017 NSC, OPC, and FRC funding is as indicated in the document (see pdf page 14, marked at page 10), most of the shipbuilding funds will go for what looks like five or six more Webber class. There are smaller amounts for the OPC and NSC programs for a total of only $557M. There may, however, be the opportunity to fund a big part of the new polar icebreaker, as the Commandant has suggested, if the AC&I budget remains at least equal to the FY2016 level.

Early Icebreaker Specs

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USCGC Polar Sea

USCGC Polar Sea

FedBizOpps.gov has published  a draft document that gives us a first look at possible specs for the proposed polar icebreaker,

Polar_Icebreaker_Replacement_Draft_Data_Package_13_J…(913.98 Kb)

This is different from what we saw on FedBizOpps only a few days ago.

There is a notional Polar Icebreaker Acquisition Schedule that anticipates contract award between Q4 FY 2018 and Q4 FY2019.

Some of the provisions/characteristics I found interesting were:

  • Sustained Speed, 15 knots.
  • Minimum range of 21,500 nautical miles at 12 kts
  • Capable of independently breaking though ice with a thickness ≥ 6 ft (threshold) / ≥ 8 ft (objective) at a continuous speed ≥ 3 kts.
  • Capable of independently breaking through ridged ice with a thickness of 21 ft.
  • Capable of breaking a single-pass channel to a width of at least 83 ft.
  • Three 9 ft x 35 ft buoys including associated buoy mooring equipment.
  • Six twenty foot equivalent units (TEU) with a maximum weight of 20 tons each.
  • Capable of underway replenishment.
  • Weapons limited to four .50 cal. and boarding party weapons.
  • Aviation facilities include hangaring two H-60s with blades folded.
  • Air-search radar.
  • Capacity to tow astern a vessel not exceeding an equivalent displacement to that of the PIB (Polar Icebreaker) (Not an overly ambitious spec,why don’t we just say 20,000 tons or specify bollard pull?–Chuck)

Again we have Bryant’s Maritime Consulting to thank for the link.

Icebreaker Requirements Published

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USCGC Polar Sea

USCGC Polar Sea

BreakingDefense.com has reported the Commandant has announced the release of  “a notional program schedule [and] notional Polar Icebreaker requirements” for two new heavy icebreakers today.

Details have been released to qualified contractors, but not the general public.

The reference to two icebreakers is a bit of a surprise. The source of the funding is not clear, but the Commandant suggest there is strong support in Congress and he sees some of it coming in 2017.

UPDATE: The additional details on the requirements from DefenseNews.

Specifically, the new ships need to be able to continuously push through up to six feet of ice — but preferably eight — going at least 3 knots.

In ice-free waters, it will need a sustained speed of 15 knots, or the speed at max horsepower.

The new icebreakers must also be able to:

  • Sail a range of 21,500 nautical miles at 12 knots.
  • Go 80 days underway without replenishment.
  • Run at least 3,300 operational hours a year.
  • Visually evaluate ice conditions for 12 nautical miles in each direction.
  • Land a range of military and federal helicopters.
  • Hangar two Coast Guard helicopters or future unmanned systems.

 

Coast Guard Outlook 2015-2016

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http://issuu.com/faircountmedia/docs/uscg15#embed

DefenseMediaNetwork has published an online version of the new “Coast Guard Outlook.” I have not read it all, there is a lot there, 164 pages. Fortunately, it allowed me to embed it above.

It includes an interview with the Commandant, a story about the 100 year history of Coast Guard Aviation, one about the Coast Guard in Vietnam, and another about the Offshore Patrol Cutter, along with several others.

When I first brought it up, the print was too small to read comfortably on my laptop, but you have two ways to get a larger view. Clicking on the page twice enlarges it (maybe too large). There is also a slider at the lower left that changes the size of the page you are viewing. Unfortunately neither adjustment is carried over when you go to the next page.

Thanks to Lee for bringing this to my attention.