House panel holds hearing on Coast Guard acquisition problems

The Coast Guard's acquisition problems seem not to be as far behind it as might be hoped. domeThe House Subcommittee on Coast Guard and Maritime Transportation, chaired by U.S. Rep. Frank LoBiondo (R-NJ), today conducted a hearing to examine the status of the Coast Guard's major acquisition programs.  The Subcommittee received testimony from the U.S. Coast Guard and the Government Accountability Office on the service's management of its acquisition portfolio.

According to Chairman LoBiondo's office, Coast Guard acquisitions have suffered from delays, cost overruns and failures of certain new equipment at the design or prototype phase.  In 2002, the service began the Integrated Deepwater System, which was meant to provide an update of its larger assets over a period of 20 years; however, the program has faced many challenges that have significantly increased costs, delayed schedules, and sacrificed planned capability improvements in assets delivered to date. 

As a result of Deepwater's failures, the service has reformed the acquisitions management process, stood up an in-house acquisitions workforce, terminated its contract in 2007 with the private contractor that managed the program, and discontinued the use of the term "Deepwater,'"eferring to the program from that point on as "major systems acquisition." Despite these changes, more must be done in order to develop reliable and affordable long-term plans for updating vessels, aircraft and command and control systems. 

"Using the Coast Guard 2007 re-baseline as a guide, of the Coast Guard's 17 large acquisition programs 10 are over budget, eight are behind schedule, and six are both over budget and behind schedule.  If we used the original Deepwater baseline as a guide, nearly all of these programs would be over budget and behind schedule," Chairman LoBiondo said.

"Although there has been some added capability with the few recapitalized assets delivered to date, the fact remains, we are not where we should be," said Chairman LoBiondo.  "The program remains significantly over budget and several years behind schedule.  In addition, serious questions remain about whether the assets being delivered meet expected capabilities.

"One of the many examples of these problems is the National Security Cutter," Chairman LoBiondo continued.  "To date, the service has taken delivery of two NSCs.  Both vessels represent tremendous improvements over the 45 year old vessels they are replacing.  However, the program is currently two years behind schedule and 38 percent over the revised 2007 budget.  In addition, both vessels will require substantial retrofits to meet expected service lives.

"Delays in the Coast Guard's recapitalization program have placed significant strains on legacy assets.  The continued reliance on these assets, which have surpassed their planned service lives and are failing at increasing rates, has undermined mission readiness and performance," Chairman LoBiondo explained.  "The service estimates a 23,000 mission hour gap in the major cutter fleet and a 103,000 mission hour gap in the patrol boat fleet.  Furthermore, the cost to maintain legacy assets continues to grow at the expense of investment in new assets in what Admiral Allen used to call a 'death spiral'."

The Government Accountability Office provided testimony based on a report that was recently released on Coast Guard acquisition management for major acquisition programs.  GAO  determined that the majority of the Service's 17 major acquisition programs continue to face execution challenges, and the unrealistic budget planning is largely to blame.

"I was here ten years ago, and I know what we were promised, and this is not it," Chairman LoBiondo continued.  "The Coast Guard has made great strides to turn the program around in recent years and I commend them for that.  But now it is time to deliver results for the taxpayer and for the men and women of the Coast Guard who desperately need these assets to successfully conduct their missions."

Read the GAO report HERE

April 13, 2011

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