I would like to talk about an observation found here : “Coast Guard Cutter Procurement: Background and Issues for Congress” (pdf) Congressional Research Service, Ronald O’Rourke, July 20, 2012
“Another oversight issue for Congress concerns the adequacy of information available to Congress to support review and oversight of Coast Guard procurement programs, including cutter procurement programs. The Coast Guard has entered a period where, like the Navy, it is requesting significant funding each year from Congress to execute multiple ship procurement and modernization programs. Congress, however, lacks ready access to basic information exhibits on Coast Guard shipbuilding programs that are equivalent to those that support congressional review and oversight of Navy ship procurement programs.” (from p.32)
Could this be at least part of the reason, why we have such a problem selling our shipbuilding programs?
Quoting from p.34,
• “Although the Coast Guard’s annual budget submission includes a budget justification book, the entries in that book for the Coast Guard’s ship procurement programs do not present information as detailed and structured as that presented in the P-40, P-5, and P-27 exhibits. (note–the reference provides samples of these, see Appendix A–Chuck)
• “Reports on Coast Guard programs equivalent to DOD’s SAR reports are not readily available to Congress. (SAR=”Selected Aquisition Reports”–no sample of this–Chuck)
• “The Coast Guard’s POR (Program of Record–Chuck) is a statement of desired procurement quantities for certain procurement programs, but not a concise statement of the Coast Guard’s overall ship force structure objective, which would take into account continued service of existing ships that are not in need of immediate replacement. (Navy sample provided as Appendix C–Chuck)
• “The Coast Guard’s five-year capital investment plan shows annual funding amounts for individual programs, but not annual procurement quantities, and annual procurement quantities are not always easy to discern from annual funding amounts. (Sample in Appendix D–Chuck)
• “The Coast Guard’s budget submission does not include an equivalent of the Navy’s 30-year shipbuilding plan.” (Sample in Appendix D–Chuck)
This report is addressed to Congress, but there is no reason we should not consider its findings.
Why don’t we have a statement of what our force structure objective is?
How can we have a Five Year Procurement Plan and not include procurement quantities?
And lastly why don’t we have a 30 year shipbuilding program if that is what Congress expects?
When I first heard that the Navy had a 30 year shipbuilding program, I thought it was a little ridiculous, because It is a long way out, but maybe it is a way of building consensus on where we are going. It will provide a warning when increases will be required. Patrol ships, Patrol boats, Polar Icebreakers, Buoy tenders, Icebreaking tugs, Inland construction tenders, and major renovations all have to fit into the same budget. A long term road map is needed because experience has shown that the budget is not elastic.
Among the advantages claimed for the Navy’s way of doing this (from p.33) are:
- “identifying and evaluating cost growth and schedule delays in the execution of shipbuilding programs;
- “understanding the relationship between annual procurement rates and unit procurement cost;
- “evaluating whether programs are achieving satisfactory production learning curves over time;
- “evaluating whether proposed sequences of annual procurement quantities for programs would be efficient to execute from an industrial standpoint;
- “evaluating stability in Navy shipbuilding planning by tracking year-to-year changes in the five-year shipbuilding plan;
- “identifying potential financial and industrial-base linkages between shipbuilding programs that are being funded in overlapping years;
- “identifying and evaluating Navy assumptions concerning service lives and retirement dates for existing ships;
- “evaluating whether ship procurement needs are being pushed into the future, potentially creating an expensive ship procurement “bow wave” in coming years; and
- “understanding when the Navy will achieve its ship force level goals, and whether the Navy will experience ship inventory shortfalls relative to those goals that could affect the Navy’s ability to perform its missions in coming years.”
This all sounds like it should also apply to the Coast Guard.
The service is attempting to improve presentation of its programs, but even the planned improvements don’t address all these concerns. From a recent GAO report “COAST GUARD, Portfolio Management Approach Needed to Improve Major Acquisition Outcomes” (download the report, GAO-12-918 (.pdf)).
“Coast Guard acquisition officials told us that one way it is trying to address portfolio affordability is through an update to its Major Systems Acquisition Manual. According to draft language, the acquisition directorate’s Office of Resource Management will be required to maintain a chart to visually depict all competing acquisition program priorities within the capital investment plan at various points in time. Officials told us that each acquisition program will be required to include this chart in its required materials for future acquisition decision events. This update to the Coast Guard’s acquisition manual follows best practices outlined in GAO’s Cost Estimating and Assessment Guide with the exception that the guide notes the affordability assessment should, preferably, be conducted several years beyond the programming period. (emphasis applied) However, deferring costs could lead to what is commonly characterized as a bow-wave—or an impending spike in the requirement for additional funds—unless the Coast Guard proactively chooses to make some tradeoff decisions by re-examining requirements.
The Coast Guard has certainly encountered the “bow wave.” We need a way to address it now and avoid it in the future.
At the very least we need a “Force Structure Objective” and a 30 year shipbuilding (and disposal) Plan to identify how we intend to get there. ———————————————————————————————————-
While on the topic of selling a program the Naval Aviation has a fine example:
To view “Naval Aviation Vision, January 2012,” visit http://www.public.navy.mil/airfor/nae/Vision%20Book/Naval_Aviation_Vision.pdf.)