GAO report highlights plight of USCG legacy fleet

JULY 31, 2012 — A new GAO report says the Coast Guard is setting unrealistic operating targets for its legacy fleet of of high endurance cutters, medium endurance cutters, and patrol boats. Though for the present and many years into the future, these vessels are responsible for conducting a wide range of missions, conditions of the vessels are poor and declining, says the report, which is entitled “Coast Guard: Legacy Vessels’ Declining Conditions Reinforce Need for More Realistic Operational Targets.”

The GAO says that management problems with the Coast Guard’s “Deepwater” acquisition program have seen the cost of replacement vessels rise by billions of dollars. Delivery schedules have slipped by several years, which will require the Coast Guard to operate its legacy vessels much longer than anticipated.

Selected findings of the report include:

Conditions of the legacy vessels are poor and declining. The physical condition of the legacy fleet—as measured by “operational percent of time free of major casualties”—has generally remained well below target levels during FY 2005-2011. This is especially true of high endurance cutters, which only achieved a level of about 44 percent as opposed to the target level of 72 percent. In addition, GAO’s review of vessel condition assessments, discussions with Coast Guard maintenance and operational personnel, and site visits, provided further evidence that the legacy fleet is in poor condition and continues to deteriorate. Maintenance managers for both high and medium endurance cutters noted that performance of these vessel’s critical systems has become increasingly unpredictable, and refurbishments of systems that have had a high rate of failure have brought limited returns on investments to improve them. The Coast Guard has had programs in place to extend the life of the medium endurance cutters (with limited upgrades) and the patrol boats (with major refurbishments), but both programs are coming to a close and the Coast Guard has not requested further funding to extend such programs.

Costs to maintain these vessels are increasing. Scheduled maintenance expenditures generally rose across all legacy vessels from FY 2007-2011. Some of these expenditures have been funded by supplemental appropriations, which may be coming to an end. In terms of unscheduled maintenance, the high endurance cutters have incurred the greatest share. Unscheduled maintenance consistently represents a greater portion of total maintenance expenditures than for the other legacy vessels. Expenditures have often exceeded the Coast Guard’s budgeted funds for depot-level maintenance—known as Standard Support Levels. Yet the Coast Guard has not updated the Standard Support Levels over the decades to reflect the rising costs to maintain the aging legacy fleet. For the medium endurance cutters and patrol boats, except for an inflation factor, the Standard Support Levels are still set where they were when the vessels first entered service, several decades ago. GAO found several ways that the Coast Guard could improve the way it estimates maintenance costs for legacy vessels. Costs are likely to continue rising as the legacy vessels continue to age, so it is important for the Coast Guard to develop reliable cost estimates for senior leadership and Congress to make informed budget decisions.

Performance is declining and will continue to deteriorate. While performance varied by class of legacy vessel, two key Coast Guard metrics—operational hours and lost cutter days—show that legacy vessels were unable to meet their operational targets and lost considerable planned mission time. In particular, the high endurance cutters did not meet operational hour targets in any year from FY 2005-2011. In addition, the number of lost cutter days for these vessels in the last three fiscal years has been nearly equivalent to three high endurance cutters being “out of service” (i.e., tied up at the dock) in each year. This declining operational capacity has been a prime contributor to Coast Guard’s declining ability to meet its mission needs and intercept threats beyond U.S. territorial waters. High endurance cutter hours spent on drug interdiction has declined 65 percent. Medium endurance cutter hours spent on migrant interdiction has declined 40 percent. In the longer term, the medium endurance cutter capacity gap will be the most severe, due to the long delays in the planned fielding of the replacement Offshore Patrol Cutter. Operational capacity gaps may be further exacerbated by the planned funding of only six (not eight) National Security Cutters to replace the original 12 high endurance cutters. Further, it is unclear if the Coast Guard will implement rotational crewing, needed to boost the operational hours of the 6 National Security Cutters to make them equivalent to the 12 legacy high endurance cutters.

GAO made two recommendations to the Coast Guard. First, that the Coast Guard improve its process to track and estimate vessel maintenance costs and budgets. Second, that the Coast Guard adjust its outdated and unrealistic operational hour targets, especially given the declining performance of the legacy vessels. In addition, the report contains detailed appendices which compare the capabilities of legacy vessels to the “Deepwater” replacement vessels, provide further details on the conditions and costs of the legacy vessels, an evaluation of the Coast Guard’s process for estimating maintenance costs, and related GAO reports.

Access the report HERE