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entitled 'Coast Guard: Better Logistics Planning Needed to Aid 
Operational Decisions Related to the Deployment of the National 
Security Cutter and Its Support Assets' which was released on July 17, 
2009. 

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Report to Congressional Committees: 

United States Government Accountability Office: 
GAO: 

July 2009: 

Coast Guard: 

Better Logistics Planning Needed to Aid Operational Decisions Related 
to the Deployment of the National Security Cutter and Its Support 
Assets: 

GAO-09-497: 

GAO Highlights: 

Highlights of GAO-09-497, a report to congressional committees. 

Why GAO Did This Study: 

As part of its more than $24 billion Deepwater program to replace aging 
vessels and aircraft with new or upgraded assets, the Coast Guard is 
preparing the National Security Cutter (NSC) for service. GAO 
previously reported on Deepwater assetsí deployment delays and the 
Coast Guardís management of the Deepwater program. GAO was 
legislatively directed to continue its oversight of the Deepwater 
program. As a result, this report addresses: (1) the operational 
effects, if any, of delays in the delivery of the NSC and its support 
assets of unmanned aircraft and small boats; (2) Coast Guard plans for 
mitigating any operational effects and any associated costs of these 
plans; and (3) the extent to which the Coast Guard has plans, to 
include cost estimates, for phasing in logistics support of the NSC 
while phasing out support for the High Endurance Cutter (HEC) it is 
replacing. GAOís work is based on analyses of the (1) operational 
capabilities and maintenance plans of the NSC and its support assets 
and (2) data on the HECsí condition; comparison of an NSC and HEC; and, 
interviews with Coast Guard officials. 

What GAO Found: 

Delays in the delivery of the NSC and the support assets of unmanned 
aircraft and small boats have created operational gaps for the Coast 
Guard that include the projected loss of thousands of days in NSC 
availability for conducting missions until 2018. Enhancements to the 
NSCís capabilities following the 9/11 terrorist attacks and the effects 
of Hurricane Katrina were factors that contributed to these delays. 
Given the delivery delays, the Coast Guard must continue to rely on 
HECs that are becoming increasingly unreliable. Coast Guard officials 
said that the first NSCís capabilities will be greater than those of an 
HEC; however, the Coast Guard cannot determine the extent to which the 
NSCís capabilities will exceed those of the HECs until the NSCís 
support assets are operational, which will take several years. 

To mitigate these operational gaps, the Coast Guard plans to upgrade 
its HECs and use existing aircraft and small boats until unmanned 
aircraft and new small boats are operational, but because the 
mitigation plans are not yet finalized, the costs are largely unknown. 
Also, the Coast Guard has not yet completed operational requirements 
for the unmanned aircraft or new small boats. As a result, the Coast 
Guard has not determined the cost of the HEC upgrade plan or the 
operational gap created by the delay in fielding new support assets for 
the NSC. 

The Coast Guardís logistics support plans for its transition to the NSC 
from the HEC are not finalized, and it has not yet fully determined 
transition costs. The contractor developed the initial NSC logistics 
plans, but Coast Guard officials said the plans lacked needed details, 
such as how the contractor would support the NSC after it becomes fully 
operational, and so, in 2007, the Coast Guard took over logistics 
planning. Coast Guard acquisition guidance states that an Integrated 
Logistics Support Plan should be completed by the time production of an 
asset is started. Although the first NSC has already been delivered, 
the Coast Guard has not yet finalized this plan, but expects to do so 
by October 2009. While the Coast Guard has developed an interim plan, 
it did not commit to including required logistics support documents to 
be used or time frames for completing them in the Integrated Logistics 
Support Plan because it is in the process of determining how to 
finalize the plan. Ensuring the plan includes these documents and time 
frames would better prepare the Coast Guard to support the NSC and aid 
it in making operational decisions given that the Coast Guard has not 
yet developed a deployment plan or completed cost estimates of the 
logistics transition from the HEC to the NSC. 

Figure: National Security Cutter - Bertholf: 

[Refer to PDF for image: photograph] 

Source: U.S. Coast Guard. 

[End of figure] 

What GAO Recommends: 

GAO recommends that as the Coast Guard finalizes the Integrated 
Logistics Support Plan, it should ensure that the plan includes the 
required logistics support documents to be used and the time frames for 
completing them. The Coast Guard concurred with GAOís recommendation 
and is taking action to respond to it. 

View [hyperlink, http://www.gao.gov/products/GAO-09-497] or key 
components. For more information, contact Steve Caldwell at (202) 512-
9610 or caldwells@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Delays in the Delivery of the NSC and Its Support Assets Have Created 
an Anticipated Loss of Operational Days and Will Result in the NSC 
Being Deployed without Certain Operational Capabilities: 

The Coast Guard Plans to Mitigate Identified Operational Gaps by 
Upgrading Certain High Endurance Cutters and Using Existing Support 
Assets, but the Success and Costs of These Plans Cannot Be Fully 
Determined: 

The Coast Guard Is Working to Finalize Its Key Logistics Plan by 
October 2009, but Complete Logistics Costs Cannot Yet Be Determined: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments: 

Appendix I: National Security Cutter Operations and Logistics 
Documents: 

Appendix II: Logistics Readiness Review Findings and the Coast Guard's 
Efforts to Address Identified Gaps: 

Appendix III: Comments from the Department of Homeland Security: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: HEC Operational Days Lost During Fiscal Years 2003 through 
2008: 

Table 2: Description of Key MSAM-required Logistics Plans: 

Table 3: Number and Status of the Coast Guard's Progress in Addressing 
Navy's Logistics Readiness Review Recommendations, by Total and High 
Priority: 

Table 4: Coast Guard Logistics Areas: 

Table 5: Information on the Coast Guard's Interim Support Plan's 
Compliance with MSAM Requirements: 

Table 6: List of NSC Operations and Logistics Documents/Analyses and 
Expected Completion Dates: 

Table 7: The Navy's Logistics Readiness Review Assessment of NSC 
Logistics Areas, as of May 2008: 

Table 8: NSC Logistics Readiness Review Assessment of Logistics Areas 
and the Coast Guard's Reported Progress: 

Figures: 

Figure 1: Comparison of Capabilities of the High Endurance Cutter and 
Its Replacement, the National Security Cutter: 

Figure 2: Percentage of Operational Hours Logged by Mission for High 
Endurance Cutters, Fiscal Years 1999 through 2008: 

Figure 3: Projected NSC Operational Day Gap Resulting from Delivery 
Delays, Calendar Years 2008 through 2018: 

Figure 4: Percent of Time Fully Mission Capable (PTFMC) for HEC Class, 
Fiscal Years 2004 through 2008: 

Figure 5: NSC-Bertholf Docked at the Pier, Alameda, California: 

Abbreviations: 

DHS: Department of Homeland Security: 

HEC: High Endurance Cutter: 

LRR: Logistics Readiness Review: 

MSAM: Major Systems Acquisition Manual: 

NSC: National Security Cutter: 

PTFMC: Percent of Time Fully Mission Capable: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

July 17, 2009: 

The Honorable Robert C. Byrd: 
Chairman: 
The Honorable George Voinovich: 
Ranking Member: 
Subcommittee on Homeland Security: 
Committee on Appropriations: 
United States Senate: 

The Honorable David E. Price: 
Chairman: 
The Honorable Harold Rogers: 
Ranking Member: 
Subcommittee on Homeland Security: 
Committee on Appropriations: 
House of Representatives: 

The Deepwater program is the largest acquisition program in Coast Guard 
history--estimated at more than $24 billion--and is intended to replace 
or modernize the Coast Guard's aging vessels, aircraft, and some 
communications systems. The first-in-class National Security Cutter 
(NSC) Bertholf is undergoing final trials as the Coast Guard prepares 
it for full operational service in 2010.[Footnote 1] We have earlier 
reported that the Coast Guard has experienced delays with the delivery 
of the NSC,[Footnote 2] and the estimated production costs of the NSC 
class have increased from about $3.5 billion in 2007 to about $4.7 
billion in 2009.[Footnote 3] The NSC delays and cost increases have 
raised questions about whether the Coast Guard will have all the 
operational capabilities needed to effectively perform its missions and 
the resources necessary for maintaining its aging High Endurance 
Cutters (HECs)--the vessels that the NSCs are to replace. 

The NSC is the first cutter class delivered to the Coast Guard under 
the Deepwater program, and, according to the Coast Guard, is to be the 
most technologically advanced class in the Coast Guard, with 
capabilities to aid the Coast Guard in performing missions worldwide-- 
to include drug interdiction and defense readiness,[Footnote 4] among 
others. Compared to the HEC, the NSC is to travel at higher sustained 
speeds and farther distances from shore for longer time periods and 
launch and recover upgraded small boats, helicopters, and unmanned 
aircraft in rough seas--all key attributes in enabling the Coast Guard 
to implement its increased national security responsibilities resulting 
from the events of September 11, 2001. 

A House Appropriations Committee report accompanying the Department of 
Homeland Security's fiscal year 2007 appropriations act directed us to 
continue our oversight of the Deepwater program.[Footnote 5] Based on 
this legislative direction, as well as more recent input from House and 
Senate Appropriations Committee staff, we assessed the Coast Guard's 
management, operation, and deployment of the NSC. Specifically, this 
report addresses: 

* What operational effects, if any, are anticipated based on delays in 
delivery of the NSC class and its accompanying support assets of 
unmanned aircraft and small boats? 

* What plans does the Coast Guard have for mitigating any identified 
operational effects, and what are the costs associated with these 
plans? 

* To what extent has the Coast Guard planned for phasing in logistics 
support of the NSC and phasing out support of the HEC, and what are the 
costs associated with this transition? 

In conducting our work, we reviewed studies, prior GAO and Department 
of Homeland Security Inspector General reports, and other relevant 
documents, such as Quarterly Acquisition Reports to Congress and the 
HEC 2008 Sustainment Conference Report covering the Deepwater program 
in general and the NSC and HEC specifically. To identify any 
operational effects from delays in the delivery of the NSC class, we 
reviewed the 2007 Deepwater Acquisition Program Baseline and the 2008 
NSC Acquisition Plan. We compared the 2007 and 2008 delivery schedules 
to measure the effects of delivery delays on the number of NSC 
operational days available to the Coast Guard over the next 9 years. We 
also analyzed Coast Guard data from fiscal years 2003 through 2008 to 
determine the number of HEC operational days available to the Coast 
Guard. To assess the reliability of the operational hour and vessel 
condition data obtained from the Coast Guard, we reviewed data systems 
manuals and directives to ensure that the systems included controls for 
maintaining the integrity of the data. We also interviewed officials 
knowledgeable about the data and the systems that produced them. On the 
basis of our assessments, we determined that the data were sufficiently 
reliable for the purposes of this report. We also reviewed Coast Guard 
documentation of the acquisition process for the NSC-based unmanned 
aircraft and small boats and the anticipated schedule for the 
acquisition of those assets. We toured NSC-Bertholf and HEC-Morgenthau 
while both were at their home port in Alameda, California, to compare 
and contrast the new vessel with one of the legacy vessels it is 
replacing. We also interviewed Coast Guard officials about HEC and 
planned NSC operational days and capabilities, including the aircraft 
and small boats that support these vessels. 

To address the Coast Guard's plans for mitigating any identified 
operational effects, we reviewed and analyzed the Coast Guard's 
mitigation plans contained in the Readiness Management Framework. We 
also interviewed Coast Guard officials about the Coast Guard's plans 
and their costs for maintaining and upgrading the HECs for use until 
the NSCs are delivered, and for using existing aircraft and small boats 
until new unmanned aircraft and small boats are acquired and deployed. 

To assess the extent to which the Coast Guard has plans for phasing in 
maintenance of the NSCs, we reviewed existing maintenance planning 
documents, including the Coast Guard's Major Systems Acquisition Manual 
(MSAM), and the Deepwater contract. We also reviewed a maintenance and 
logistical readiness study conducted for the Coast Guard by the U.S. 
Navy.[Footnote 6] Our analysis included reviewing the methodology, 
criteria, and assumptions of the study, and discussing the study's 
scope, assumptions, and conclusions with the Coast Guard. As a result 
of our review and analysis, we determined that the study and its 
results were reasonable for use in our report. To supplement our 
document reviews and analyses, we interviewed Coast Guard maintenance 
and logistics officials regarding the ongoing maintenance planning 
process and the estimated costs of this process. We also contacted 
officials representing the maintenance contractor that was originally 
to perform NSC maintenance for the Coast Guard to solicit their views 
on NSC maintenance planning. 

We conducted this performance audit from October 2008 to July 2009 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings 
based on our audit objectives. 

Background: 

The Coast Guard, an Armed Service of the United States housed within 
the Department of Homeland Security, is the principle federal agency 
responsible for maritime safety, security, and environmental 
stewardship through multimission resources, authorities, and 
capabilities. According to the Coast Guard, the greatest threat to 
mission performance is the deteriorating condition and increasing 
technological obsolescence of its legacy assets. According to the Coast 
Guard, its assets--such as vessels, aircraft, and shore facilities--are 
essential to its homeland security missions, as well as sustaining 
other mission areas, such as search and rescue, law enforcement, and 
environmental protection. Because many of the Coast Guard's assets were 
reaching the end of their expected service lives and were in 
deteriorating condition, the Coast Guard began the 25-year, more than 
$24 billion Deepwater program in the mid-1990s to upgrade or replace 
vessels and aircraft and to acquire other capabilities, such as 
improved communications systems. 

The Coast Guard's Deepwater Program Acquisition Strategy and Management 
Have Evolved: 

The Coast Guard has taken more direct responsibility for the Deepwater 
program acquisition strategy and management in recent years. At the 
start of the Deepwater acquisition, the Coast Guard chose a system-of- 
systems strategy that was to replace the legacy assets with an 
integrated package of assets,[Footnote 7] rather than using a 
traditional acquisition approach of replacing individual classes of 
legacy assets through a series of acquisitions. To carry out this 
acquisition, the Coast Guard awarded a competitive contract to a 
systems integrator, which for the Deepwater program was a contractor 
composed of two major companies--Lockheed Martin Corporation and 
Northrop Grumman Corporation. Acting as a joint venture called 
"Integrated Coast Guard Systems" (the contractor), these companies were 
responsible for designing, constructing, deploying, supporting, and 
integrating the various assets to meet projected Deepwater operational 
requirements. However, after experiencing a number of management 
challenges under the system-of-systems approach, the Coast Guard 
recognized that it needed to increase government oversight and 
transferred Deepwater system integration and program management 
responsibilities, including logistics planning, back to the Coast Guard 
in April 2007.[Footnote 8] Furthermore, when the Coast Guard assumed 
the lead role for Deepwater program management, it decided to consider 
future work and potential bids on these assets outside of the existing 
Deepwater contract. By taking this action, the Coast Guard in some 
cases decided to restart the planning and design of the individual 
assets. In addition, the Coast Guard took over logistics planning for 
some assets from the contractor. For example, the Coast Guard, rather 
than the contractor, is now developing the NSC logistics planning 
documents including the key logistics document--the Integrated 
Logistics Support Plan. 

The Deepwater program represents the largest acquisition in the Coast 
Guard's history, and the program has experienced some serious 
performance and management problems, such as cost overruns, schedule 
slippages, and assets designed and delivered with significant defects. 
Since 2001, we have reviewed the Deepwater program and informed 
Congress, the Department of Homeland Security, and the Coast Guard of 
the risks and uncertainties inherent with the system-of-systems 
approach.[Footnote 9] In March 2004, we made recommendations to the 
Coast Guard to address three broad areas of concern: improving program 
management and oversight, strengthening contractor accountability, and 
promoting cost control through greater competition among potential 
subcontractors.[Footnote 10] In April 2006, June 2007, and March 2008, 
we issued follow-on reports describing the Coast Guard's efforts to 
address these recommendations and provided information on the status of 
various Deepwater assets, including that the Coast Guard's increased 
management and oversight of the Deepwater acquisition had resulted in 
improvements to the program.[Footnote 11] In June 2008, we reported on 
additional changes in Deepwater management and oversight that resulted 
in improvements to the program and that the Coast Guard's mitigating 
strategies for the loss of patrol boats were achieving results in the 
near term.[Footnote 12] 

Since the Coast Guard took over the acquisition and management 
responsibilities for the Deepwater program from the contractor in 2007, 
it has realized that its knowledge of how the various proposed assets 
would work together to help meet mission needs were limited because the 
contractor, in some cases, had developed the plans for these assets 
without using all of the input from the Coast Guard. In 2001, the 
contractor completed a study documenting the capabilities, types, and 
mix of assets the Coast Guard needed to fulfill its Deepwater missions, 
referred to as the Fleet Mix Study. The Coast Guard has initiated a 
follow-on study to update the work originally completed by the 
contractor. The goals of this study include validating mission 
performance requirements and revisiting the number and mix of assets to 
be procured. The results of this study are expected in the summer of 
2009, at which time Coast Guard leadership will assess the results and 
plan for future asset procurement decisions. According to Coast Guard 
officials, the Coast Guard plans to update the Fleet Mix Study every 4 
years and, as a result, the Deepwater program may change in terms of 
the numbers and types of specific assets needed. 

While the final number may change as a result of the Fleet Mix Study, 
the Coast Guard currently is projected to take delivery of a total of 
eight NSCs between 2008 and 2017. In May 2008, the contractor delivered 
the first-in-class NSC, Bertholf, to the Coast Guard. The Bertholf is 
undergoing testing and is planned to be fully operational in the fourth 
quarter of fiscal year 2010. According to the Coast Guard, as of May 
2009, the second NSC, Waesche, was 83 percent complete and is scheduled 
to be delivered in late 2009, while the third NSC, Stratton, was 11 
percent complete and is scheduled for a late 2011 delivery. The Coast 
Guard plans to have each NSC fully operational once testing--which 
ranges from less than 1 year to 2 years after delivery--is completed. 
Coast Guard officials stated that the Coast Guard has awarded the 
contract to begin purchasing materials for the fourth NSC, but the 
Coast Guard has not awarded a contract for construction of the fourth 
NSC. Neither materials purchases nor production has begun on the fifth 
through eighth NSCs because funds for these cutters have not yet been 
appropriated. 

Comparison of National Security Cutter and High Endurance Cutter 
Capabilities and Operations: 

According to the Coast Guard, the NSC is designed to be capable of 
helping it execute the most challenging of maritime security mission 
needs and represents a giant leap forward in capability for the Coast 
Guard's vessel fleet. The Coast Guard further states that the NSC is to 
be the largest and most technologically advanced class of cutter in the 
Coast Guard, with robust capabilities for maritime homeland security, 
law enforcement, and defense readiness missions. The NSC class is to 
replace the Coast Guard's aging HEC class and is to provide several 
capabilities that the HECs do not have, such as the ability to collect, 
analyze, and transmit classified information; carry, launch, and 
recover unmanned aircraft, thereby increasing the cutter's surveillance 
capabilities and range; more easily and safely launch small boats from 
and return them to the cutter; and travel away from shore for longer 
time periods. 

In 2007, the Commandant of the Coast Guard stated that the NSC will be 
the most sophisticated and capable cutter the Coast Guard has ever 
operated, with vastly improved capabilities over legacy HECs. The more 
capable NSCs, for example, are designed to enable the Coast Guard to 
screen and target vessels faster, and more safely and reliably before 
they arrive in U.S. waters. As a result of the increased capabilities 
of the NSCs, the Coast Guard plans to replace 12 HECs with 8 NSCs. 
Figure 1 provides a comparison of some key operational capabilities 
between the HEC and its replacement, the NSC. 

Figure 1: Comparison of Capabilities of the High Endurance Cutter and 
Its Replacement, the National Security Cutter: 

[Refer to PDF for image: illustrated table] 

The table contains 2 photographs: 
High Endurance Cutter; 
National Security Cutter. 

Capability: Number in fleet; 
High Endurance Cutter: 12; 
National Security Cutter: 8 planned[A]. 

Capability: Year first-in-class cutter commissioned; 
High Endurance Cutter: 1967; 
National Security Cutter: 2008; 

Capability: Crew size; 
High Endurance Cutter: 166 (19 officers, 147 crew); 
National Security Cutter: 108 (14 officers; 94 crew). 

Capability: Length; 
High Endurance Cutter: 378 feet; 
National Security Cutter: 418 feet. 

Capability: Days away from homeport; 
High Endurance Cutter: 185 days per year; 
National Security Cutter: 230 days per year[B]. 

Capability: Maximum time at sea without re-provisioning; 
High Endurance Cutter: 45 days; 
National Security Cutter: 60 days. 

Capability: Range; 
High Endurance Cutter: 9,600 nautical miles at an average speed of 15 
knots; 
National Security Cutter: 12,000 nautical miles at an average speed of 
12 knots. 

Capability: Maximum speed; 
High Endurance Cutter: 29 knots[C]; 
National Security Cutter: 28 knots. 

Capability: Patrol speed; 
High Endurance Cutter: 12 knots; 
National Security Cutter: 15 knots. 

Capability: Draft[D]; 
High Endurance Cutter: 19 feet; 
National Security Cutter: 22 feet. 

Capability: Intelligence gathering; 
High Endurance Cutter: On-board intelligence gathering facility (cannot 
transmit classified data); Helicopter; 
National Security Cutter: Secure information system for transmitting 
classified data (planned); Unmanned aircraft (planned); Helicopters[E]. 

Capability: Weapons; 
High Endurance Cutter: 76 millimeter weapon system; 
National Security Cutter: 57 millimeter weapon system with computer 
programmable projectiles and an optical sight. 

Capability: Ability to withstand a biological or chemical attack; 
High Endurance Cutter: No; 
National Security Cutter: Yes. 

Capability: Aircraft command capabilities; 
High Endurance Cutter: No comprehensive aircraft launch and recovery 
control center; 1 aircraft hangar; Partially automated helicopter 
recovery system; 
National Security Cutter: Comprehensive aircraft launch and recovery 
control center; 2 aircraft hangers; Fully automated helicopter recovery 
system (planned). 

Capability: Small boat capabilities; 
High Endurance Cutter: Carries 2 small boats; 2 side-mounted small boat 
recovery systems; 
National Security Cutter: Carries 3 small boats; 1 side-mounted small 
boat recovery system for 1 small boat; 1 stern-mounted small boat 
recovery system for 2 small boats. 

Source: GAO analysis of Coast Guard data; Photographs courtesy of the 
Coast Guard. 

[A] The Coast Guard is in the process of conducting a fleet mix 
analysis--expected to be completed in 2009--that is to reevaluate the 
optimal number of each Deepwater asset (including the NSC) the Coast 
Guard should acquire. 

[B] To achieve 230 days away from homeport, the Coast Guard plans to 
use a "crew rotational concept" whereby the Coast Guard plans to have 
four crews staff and operate three cutters on a rotating basis. 

[C] According to the Coast Guard, the age and condition of the HECs, 
coupled with renovation and modernization modifications made to these 
vessels over the years, make many HECs unable to achieve a maximum 
speed of 29 knots. 

[D] Draft is the depth of water needed to float the vessel. 

[E] According to the Coast Guard, HEC flight deck is certified to 
accommodate a multimission helicopter, while the NSC flight deck is 
certified to accommodate a multimission helicopter and the larger 
medium-range recovery helicopter. 

[End of figure] 

In addition to the capabilities described in figure 1, according to the 
Coast Guard, the NSC also has the following capabilities that go beyond 
those of an HEC: 

* NSC's engine and propulsion systems are more efficient than the 
HEC's; allowing the NSC to transit faster while burning less fuel; 

* the higher transit speed of the NSC allows it to maximize the time 
that it operates inside of the mission area; 

* the NSC has the ability to conduct missions in rougher seas than the 
HEC; and: 

* the NSC has more comfortable accommodations for the crew, with larger 
sleeping and living areas that include many modern conveniences, such 
as computers, entertainment systems, and exercise facilities. 

The primary missions the Coast Guard assigns to its HECs include drug 
interdiction, fisheries patrols, and defense readiness. Together these 
missions account for over 70 percent of HEC mission assignments. 
Although the NSC is a multimission cutter that is to help the Coast 
Guard conduct its full range of missions, the Coast Guard plans to 
assign the NSC the same mission assignments as the HEC. Figure 2 shows 
the percentage of time the HEC conducted Coast Guard missions for 
fiscal years 1999 through 2008. 

Figure 2: Percentage of Operational Hours Logged by Mission for High 
Endurance Cutters, Fiscal Years 1999 through 2008: 

[Refer to PDF for image: pie-chart] 

Drug Interdiction: Deployment of assets to reduce the flow of illegal 
drugs: 43%; 
Living Marine Resources: Enforcement of domestic fishing laws and 
regulations: 20%; 
Defense Readiness: Participation with the Department of Defense in 
global military operations: 11%; 
Support: Training; public affairs; and cooperation with federal, state, 
and local agencies: 9%; 
Other Law Enforcement: Protection of U.S. fishing grounds from illegal 
harvest by foreign fishermen: 7%; 
Other: Migrant interdiction; ports, waterways, coastal security; search 
and rescue; and marine environmental protection: 10%. 

Source: GAO analysis of Coast Guard data. 

Notes: While this chart shows the percentage of total operational hours 
logged by the HECs over a 10-year period, there can be significant year-
to-year variation in operational hour totals because of shifting 
mission priorities, the use of other vessels in filling certain 
missions, and other factors. 

In conducting missions, Coast Guard vessels log the amount of 
operational hours deployed by mission while on patrol. However, the 
Coast Guard's system for tracking operational hours captures hours 
logged in support of the primary mission that a vessel conducts while 
on patrol; thus, any secondary missions that may have been performed on 
a patrol by these multimission vessels would not necessarily be 
reflected in the operational hour data. 

Prior to fiscal year 2005, the Other Law Enforcement mission area 
contained the Enforcement of Laws and Treaties-Other employment 
category which captured those law enforcement activities that did not 
fall under drug interdiction, fisheries enforcement, or migration 
interdiction operations. 

[End of figure] 

There are currently 12 HECs in the Coast Guard, with 2 of them based on 
the East Coast and another 10 on the West Coast and in Hawaii. To 
accomplish its missions, cutters like the HEC typically deploy and 
operate with support assets that aid the cutter in performing its 
mission requirements. These may include small boats, cutter-based air 
assets (such as helicopters), or land-based aircraft (such as fixed- 
wing aircraft or helicopters). According to the Coast Guard officials, 
pairing support assets with a cutter increases its surveillance and 
intelligence gathering range and improves its search and rescue 
capabilities. 

To maximize the time that the NSC can operate at sea each year without 
requiring its crews to be away from their home port more than allowed 
with the HEC, the Coast Guard plans to use a "crew rotational concept." 
Under this concept, the Coast Guard plans to have four crews staff and 
operate three cutters on a rotating basis. By using the crew rotational 
concept, the Coast Guard hopes that each NSC will be able to provide 
230 days away from home port per year as compared to the 185 days away 
from home port per year provided by each HEC. Days away from home port 
is a Coast Guard measure that reflects the level of operations for a 
cutter. The measure represents the days the cutter is not at the port 
where it is based, including days the cutter is en route to and 
conducting missions. For purposes of this report, we refer to days away 
from home port as operational days. 

Delays in the Delivery of the NSC and Its Support Assets Have Created 
an Anticipated Loss of Operational Days and Will Result in the NSC 
Being Deployed without Certain Operational Capabilities: 

Delays in the delivery of the NSC and its associated support assets-- 
primarily unmanned aircraft and small boats--have created an 
anticipated loss of cutter operational days and delays in achieving 
certain other operational capabilities. Enhancements to the NSC's 
capabilities following the 9/11 terrorist attacks, as well as damage to 
the shipyard and the exodus of workers as a result of Hurricane 
Katrina, contributed to these delays. These delays will require the 
Coast Guard to continue to rely on its aging HECs to provide cutter 
operational days and to use existing aircraft and small boats to 
support the new NSC. Also, certain systems on NSC-Bertholf are 
currently not functioning as planned, but the Coast Guard plans to 
resolve these deficiencies before NSC-Bertholf is certified as fully 
operational, scheduled for the fourth quarter of fiscal year 2010. 
Because the Coast Guard plans to deploy the first NSC without the 
planned unmanned aircraft and new small boats, and because on-board 
deficiencies still exist, the NSC will not initially operate with the 
full complement of its originally-planned capabilities. As a result, 
the Coast Guard cannot determine the extent to which the NSC's final 
capabilities will exceed those of the HECs at this time and it may take 
several years before some of these capabilities are realized. 

Comparison of the 2007 and 2008 Delivery Schedules Shows an Anticipated 
Loss of Over 3,000 National Security Cutter Operational Days: 

Delays in deployment of the NSCs between the 2007 and 2008 delivery 
schedules show an anticipated loss of thousands of NSC operational 
days. Comparing the 2007 and 2008 delivery schedules shows that the 
first NSC will likely be 1 year behind schedule when it is certified as 
fully operational, now scheduled for the fourth quarter of fiscal year 
2010[Footnote 13]. Further, the eighth and final NSC was to be fully 
operational in 2016, but is currently projected to be fully operational 
by the fourth quarter of calendar year 2018. 

The first NSC was initially projected for delivery in 2006, but slipped 
to August 2007 after the 9/11 requirements changes.[Footnote 14] New 
requirements made after 9/11 to enhance the NSC's capabilities also 
contributed to these delays and include the following: 

* expanded interoperability with the Department of Defense, DHS, and 
local first responders; 

* increased self-defense and survivability, including chemical, 
biological, and radiological measures; 

* increased flight capability via a longer and enhanced flight deck; 

* upgraded weapon systems; and: 

* improved classified communication capabilities. 

In addition to the delays brought about by post-9/11 requirements 
changes and the associated enhancements to NSC capabilities, delivery 
of the NSC was further delayed until May 2008 because of substantial 
damage to the shipyard and an exodus of some of the experienced 
workforce as a result of Hurricane Katrina. 

If the Coast Guard maintains its 2008 acquisition schedule, the most 
recent acquisition schedule available to us, it will face a projected 
loss of thousands of cutter operational days available from the NSC 
class for calendar years 2009 through 2017 from what was originally 
planned. Specifically, as shown in figure 3, in comparing the number of 
operational days that were expected to be available from the NSC fleet 
in the 2007 schedule to what is expected based on the updated 2008 
schedule delivery schedule,[Footnote 15] there is a cumulative 
projected loss of 3,080 operational days (an "operational gap"). 
[Footnote 16] 

Figure 3: Projected NSC Operational Day Gap Resulting from Delivery 
Delays, Calendar Years 2008 through 2018: 

[Refer to PDF for image: combined stacked vertical bar and line graph] 

Calendar year: 2008; 
2007 delivery schedule: 0 days; 
2008 delivery schedule: 0 days; 
Projected gaps (total projected gap: 3,080 days): 0 days. 

Calendar year: 2009; 
2007 delivery schedule: 185 days; 
2008 delivery schedule: 0 days; 
Projected gaps (total projected gap: 3,080 days): 185 days;. 

Calendar year: 2010; 
2007 delivery schedule: 460 days; 
2008 delivery schedule: 185 days; 
Projected gaps (total projected gap: 3,080 days): 275 days. 

Calendar year: 2011; 
2007 delivery schedule: 460 days; 
2008 delivery schedule: 370 days; 
Projected gaps (total projected gap: 3,080 days): 90 days. 

Calendar year: 2012; 
2007 delivery schedule: 920 days; 
2008 delivery schedule: 460 days; 
Projected gaps (total projected gap: 3,080 days): 460 days. 

Calendar year: 2013; 
2007 delivery schedule: 1150 days; 
2008 delivery schedule: 690 days; 
Projected gaps (total projected gap: 3,080 days): 460 days. 

Calendar year: 2014; 
2007 delivery schedule: 1380 days; 
2008 delivery schedule: 920 days; 
Projected gaps (total projected gap: 3,080 days): 460 days. 

Calendar year: 2015; 
2007 delivery schedule: 1610 days; 
2008 delivery schedule: 1150 days; 
Projected gaps (total projected gap: 3,080 days): 460 days. 

Calendar year: 2016; 
2007 delivery schedule: 1840 days; 
2008 delivery schedule: 1380 days; 
Projected gaps (total projected gap: 3,080 days): 460 days. 

Calendar year: 2017; 
2007 delivery schedule: 1840 days; 
2008 delivery schedule: 1610 days; 
Projected gaps (total projected gap: 3,080 days): 230 days. 

Calendar year: 2018; 
2007 delivery schedule: 1840 days; 
2008 delivery schedule: 1840 days; 
Projected gaps (total projected gap: 3,080 days): 0 days. 

Source: GAO analysis of Coast Guard data. 

Notes: HEC cutter operational days are not included in this analysis. 
The planned number of operational days per year assumes each NSC is 
operated 185 days per year with a single crew and 230 days per year 
when the crew rotational concept is employed. 

NSCs are expected to be fully operational 1 to 2 years after delivery. 

[End of figure] 

Figure 3 represents the loss of operational capabilities as a result of 
delivery delays with the NSC, but does not directly translate into lost 
cutter operational days for the Coast Guard as a whole because it does 
not take into account any operational days that the Coast Guard 
anticipates can be provided through continued use of its HECs. Coast 
Guard officials emphasized that it plans for the HECs to continue to 
serve until the NSCs become operational. As a result, the Coast Guard 
officials state that they do not anticipate a gap in operational days, 
even though they acknowledge that the HECs have fewer capabilities than 
the NSCs. 

While continued operation of the HECs should at least partially 
mitigate the operational gap shown in figure 3, we believe that this 
analysis is useful to demonstrate the amount of time that the Coast 
Guard will be without the enhanced operational capabilities that the 
NSCs are expected to provide once they are deployed with their full 
complement of support assets. The Coast Guard is unable to quantify the 
gap in operational capabilities that it will actually experience, 
though, because it has not yet completed the HEC decommissioning 
schedule, which, according to Coast Guard officials, is to be completed 
in late 2009 at the earliest. The Coast Guard is also not able to 
estimate the impact of these lost operational days on specific future 
missions. However, given the enhanced capabilities that NSCs have over 
the HECs, a loss in NSC operational days could negatively impact the 
Coast Guards' ability to more effectively conduct missions, such as 
migrant and drug interdiction, enforcement of domestic fishing laws, 
and participation in Department of Defense operations. 

Delays in Delivery of the National Security Cutters Require the Coast 
Guard to Continue to Rely on Its Aging High Endurance Cutters: 

Delays in delivery of the NSCs have required the Coast Guard to develop 
plans to rely on its aging fleet of HECs to continue to perform 
missions that the NSCs were to take over. However, Coast Guard metrics 
show that the HECs are becoming increasingly unreliable and, as a 
fleet, have not met their target number of cutter operational days in 
each of the past 6 fiscal years. Specifically, the fleet of 12 HECs 
lost a cumulative total of 118 to 390 operational days each fiscal year 
from 2003 through 2008. This accounts for 5 to 18 percent of the Coast 
Guard's annual target of 2,220 days for the HEC fleet. According to the 
Coast Guard, this loss occurred because of a combination of unscheduled 
maintenance and additional planned maintenance beyond the 143 
maintenance days allotted for each HEC annually, and averaged about 260 
lost operational days per year. Coast Guard officials told us that this 
additional maintenance was the result of the HECs' deteriorating 
condition. Table 1 shows the actual operational days provided by the 
HECs from fiscal years 2003 through 2008, and the gap between the days 
provided and the Coast Guard's annual target of 2,220 days. 

Table 1: HEC Operational Days Lost During Fiscal Years 2003 through 
2008: 

Fiscal year: 2003; 
HEC actual operational days: 1,956; 
HEC operational days lost[A]: 264; 
Days lost as a percent of 2,220-day target: 12. 

Fiscal year: 2004; 
HEC actual operational days: 2,012; 
HEC operational days lost[A]: 208; 
Days lost as a percent of 2,220-day target: 9. 

Fiscal year: 2005; 
HEC actual operational days: 2,102; 
HEC operational days lost[A]: 118; 
Days lost as a percent of 2,220-day target: 5. 

Fiscal year: 2006; 
HEC actual operational days: 1,830; 
HEC operational days lost[A]: 390; 
Days lost as a percent of 2,220-day target: 18. 

Fiscal year: 2007; 
HEC actual operational days: 1,959; 
HEC operational days lost[A]: 261; 
Days lost as a percent of 2,220-day target: 12. 

Fiscal year: 2008; 
HEC actual operational days: 1,879; 
HEC operational days lost[A]: 341; 
Days lost as a percent of 2,220-day target: 15. 

Source: GAO analysis of Coast Guard data. 

[A] The Coast Guard sets an annual target of 185 operational days per 
cutter each year for a total of 2,220 operational days (12 cutters x 
185 days per cutter) for the HEC fleet. 

[End of table] 

Another measure of the condition of the HEC fleet is the percent of 
time [it is] fully mission capable (PTFMC). This metric reflects the 
percentage of time that the cutters operate without a major equipment 
failure or loss in mission capabilities. For example, a PTFMC of 50 
percent indicates that the cutter had one or more major equipment 
failures (or casualties) that degraded or forced the termination of 
missions for half of the cutter's operational days in a given year. 
From fiscal years 2004 through 2008, the HECs' PTFMC was 59 percent or 
less, while the Coast Guard's PTFMC goal for the HEC class was 86 
percent. Figure 4 shows the PTFMC for the HECs during that period. 

Figure 4: Percent of Time Fully Mission Capable (PTFMC) for HEC Class, 
Fiscal Years 2004 through 2008: 

[Refer to PDF for image: stacked line graph] 

Fiscal year: 2004; 
Actual: 26.4%; 
Goal: 86%; 
Operational gap: 59.6%. 

Fiscal year: 2005; 
Actual: 48.2%; 
Goal: 86%; 
Operational gap: 35.8%. 

Fiscal year: 2006; 
Actual: 41%; 
Goal: 86%; 
Operational gap: 45%. 

Fiscal year: 2007; 
Actual: 50.8%; 
Goal: 86%; 
Operational gap: 35.2%. 

Fiscal year: 2008; 
Actual: 58.2%; 
Goal: 86%; 
Operational gap: 27.8%. 

Source: Coast Guard. 

[End of figure] 

Coast Guard officials said that because of the age and condition of the 
HECs, they anticipate that the maintenance needs of the cutters will 
continue to increase over time. According to Coast Guard officials, the 
loss of cutter operational days and the gap between the actual PTFMC of 
the HEC class and the Coast Guard's goal of 86 percent would negatively 
impact their drug interdiction, defense readiness, alien migrant 
interdiction, and living marine resource missions. The HECs were 
commissioned during 1967 to 1972 and have an estimated service life of 
about 40 years, affected in part by a rehabilitation and service life 
extension program that began in the late 1980s and ended in 1992. As 
part of this program, each cutter received an overhaul, costing from 
$70 million to $90 million per cutter. Many major propulsion and hull 
systems, however, were overhauled but not upgraded or replaced, and 
these systems are now at or near the end of their useful service life. 

The First National Security Cutter Will be Deployed without Planned 
Support Assets: 

The Coast Guard plans to deploy the first NSC, scheduled to become 
fully operational in the fourth quarter of fiscal year 2010, without 
its planned support assets of unmanned aircraft and new small boats. In 
addition, based on our review of a Coast Guard study, future NSCs may 
begin missions without the originally-planned unmanned 
aircraft.[Footnote 17] The Coast Guard plans to draft operational 
specifications for the unmanned aircraft in 2010, and to acquire new 
small boats that will be deployed with the first NSC by the end of 
calendar year 2010. As a result, because Coast Guard has not determined 
the needed specifications, the extent of the operational gap created by 
the lack of these assets is not known at this time. In particular, a 
Coast Guard acquisition official said that the Coast Guard has not yet 
selected the type of unmanned aircraft that is to be deployed with the 
NSC, but plans to do so by the third quarter of fiscal year 2012. After 
the unmanned aircraft is selected, the Coast Guard must contract for 
the acquisition and production of the aircraft, accept delivery of it, 
and test its capabilities before deploying it with the NSC--activities 
that can take several years. 

The NSCs are designed to be deployed with the following combinations of 
support aircraft: 

* 2 helicopters[Footnote 18] or: 

* 1 helicopter and 2 unmanned aircraft or: 

* 4 unmanned aircraft. 

The helicopter may be used for surveillance, rescue operations, or 
airborne use of force, whereas the unmanned aircraft is intended to 
increase the NSC's surveillance capabilities. In addition to the 
support aircraft, the NSC is intended to be deployed with three new 
small boats, rather than the two small boats on the HECs, and, 
according to the Coast Guard, will be able to launch and recover small 
boats in rougher seas than the HEC. The small boats are designed to 
assist the Coast Guard in conducting vessel boardings, pursuing and 
interdicting vessels suspected of unlawful behavior, and conducting 
search and rescue operations. The Coast Guard currently operates the 
helicopters that can be deployed with the NSC, but has restarted the 
acquisition of the small boats and is in a pre-acquisition process for 
the unmanned aircraft because the operational requirements for the 
unmanned aircraft and small boats, as set forth by the contractor, did 
not meet the Coast Guard's needs. These support assets are to provide 
the NSC with surveillance and other capabilities beyond those of the 
HECs. However, until operational requirements are completed and the 
unmanned aircraft and small boats are delivered, these increased 
capabilities of the NSC will not be realized by the Coast Guard. Coast 
Guard officials acknowledged that the lack of unmanned aircraft would 
create a gap between the NSC's actual and planned capabilities, but 
noted that deployment of existing small boats with the NSC would 
mitigate any capability gap created by the absence the new small boats, 
as discussed later in this report. 

Unmanned Aircraft: 

The Coast Guard has not finalized the operational requirements or 
acquisition schedule for the unmanned aircraft to be deployed with an 
NSC, making it difficult for the Coast Guard to quantify the expected 
operational gap. Acquisition of the unmanned aircraft was discontinued 
by the Coast Guard in 2007. According to Coast Guard officials, the 
Coast Guard discontinued this acquisition because the technology was 
unproven and the projected costs were greater than those originally 
planned.[Footnote 19] According to a Coast Guard acquisition official, 
the Coast Guard will assess alternative aircraft platforms and plans to 
select one by the third quarter of fiscal year 2012 for acquisition. 
Having assumed responsibility for the acquisition of the unmanned 
aircraft from the contractor, the Coast Guard is to follow the 
processes set forth in its acquisition guidance. However, because the 
acquisition program is in its early stages, the Coast Guard has not yet 
determined a date for the deployment of an NSC-based unmanned aircraft. 

Small Boats: 

The capabilities of the small boats that are to be deployed with the 
NSCs are also not currently defined. According to Coast Guard 
officials, the original small boat capabilities as planned by the 
contractor were not realistic. For example, Coast Guard officials told 
us that operational requirements--such as the inclusion of gun mounts, 
a top speed of 45 knots, and communication suite requirements--may have 
been achievable individually, but were not feasible when taken 
together. Coast Guard officials said that they do not yet know what the 
new operational requirements will be, but that they plan for the new 
small boats to have greater capabilities than the legacy small boats, 
which will further enhance the capabilities of the NSC. The Coast Guard 
planned to finalize the operational requirements by summer 2009, and 
Coast Guard officials anticipate deployment of the small boats by the 
end of calendar year 2010. However, until these operational 
requirements and a determined delivery schedule are in place, the Coast 
Guard is unable to quantify the operational gap that will be created by 
the absence of the new small boats that were to have been deployed on 
the NSC. 

The Coast Guard Is Addressing National Security Cutter Onboard 
Deficiencies: 

In addition to the gaps created by lost operational days and the 
absence of the unmanned aircraft and small boats, the Coast Guard has 
identified several operational deficiencies onboard NSC-Bertholf that 
it plans to address by the end of calendar year 2010. In particular, 
according to Coast Guard officials, three deficiencies are to be 
addressed before the cutter is certified as fully operational in the 
fourth quarter of fiscal year 2010. Details on these three deficiencies 
are as follows: 

* First, NSC-Bertholf currently lacks a shipboard sensitive 
compartmented information facility required for participation in 
certain Department of Defense missions and exercises. Coast Guard 
officials told us that building such a facility was a post-9/11 
requirement the manufacturer did not have time to integrate into NSC- 
Bertholf. This facility is to improve communication of sensitive and 
classified information with other Coast Guard and Department of Defense 
assets and shore facilities. Work on the facility is underway and the 
Coast Guard plans to complete the installation and testing in February 
2010. According to Coast Guard officials, the Coast Guard will also be 
responsible for installing similar facilities on the future NSCs, as 
they will not be installed by the contractor during construction for 
security reasons. 

* Second, full installation of technology that aids the movement of 
helicopters into the NSC's two hangars is not yet complete, because the 
helicopters that are to be deployed with the NSC have not yet been 
modified to use this technology. NSC-Bertholf is equipped with a system 
designed to automatically secure helicopters after landing and then 
move them into a hangar. According to Coast Guard officials, this 
system reduces the number of crew members needed to assist in landing 
the helicopter and increases the safety of the landing process. The 
system has been installed on NSC-Bertholf, but the Coast Guard has not 
yet completed the modification of the helicopters to enable them to 
integrate with the system. Therefore, the Coast Guard plans to manually 
tie down and move the helicopters until the modification is complete, 
which, according to Coast Guard officials, is planned for March 2010. 
Coast Guard officials stated that the system is to be included during 
construction of all future NSCs. 

* Third, the functionality of the stern ramp and doors used to launch 
small boats on NSC-Bertholf is limited. Coast Guard officials reported 
that the doors do not open and close as expected and that the doors are 
safe to operate only when the NSC is moving at speeds of 5 knots or 
less, because sections of the doors protrude into the water at the edge 
of the cutter when they are opened. The stern launch system facilitates 
the launch and recovery of small boats and requires fewer crew to 
operate than traditional side-launch systems that rely on cranes to 
both lower the small boats into the water and then raise them on to the 
cutter when their missions are completed. Replacement doors have been 
designed that angle up, away from the water, and are equipped with a 
mechanism that will better handle their weight to enable them to 
operate more reliably and safely. According to the Coast Guard, the new 
doors are to be retrofitted to NSC-Bertholf when the cutter goes in for 
a maintenance period, planned for March 2010, and are to be installed 
on future NSCs during their construction. 

Until these onboard deficiencies are addressed and the NSC's unmanned 
aircraft and new small boats are delivered, the NSC will be operating 
without planned assets that would enhance its capabilities over those 
of an HEC. Coast Guard officials stated, though, that even without the 
planned unmanned aircraft and new small boats, NSC-Bertholf's 
capabilities will be greater than those of an HEC when it is certified 
as fully operational at the end of fiscal year 2010. In particular, the 
officials stated that, among other things, the NSC will have improved 
habitability, increased transit speeds, better fuel efficiency, and a 
superior weapons system. However, some of these improvements have not 
been fully tested and the NSC will initially not have other key 
capabilities, such as the unmanned aircraft, which will require several 
years of construction and testing after its initial selection in 2010. 

The Coast Guard Plans to Mitigate Identified Operational Gaps by 
Upgrading Certain High Endurance Cutters and Using Existing Support 
Assets, but the Success and Costs of These Plans Cannot Be Fully 
Determined: 

To mitigate the operational gaps identified to date that have been 
created by delays in deployment of the NSC and its associated support 
assets, the Coast Guard plans to keep the HECs operational and to use 
existing air assets and small boats until new assets are acquired. 
However, the costs of these plans and the extent to which these plans 
will successfully mitigate gaps caused by delivery delays cannot be 
fully determined at this time. 

The Coast Guard Plans to Perform Upgrades and Maintenance on the High 
Endurance Cutters to Help Mitigate Lost Cutter Operational Days, but 
Complete Costs Cannot Be Determined: 

The Coast Guard plans to perform a series of upgrades and maintenance 
procedures on its HECs to help mitigate the loss of NSC operational 
days, but the complete costs of these improvements cannot be determined 
because the Coast Guard has not finalized its plans for completing 
these tasks, nor has funding been provided. The Coast Guard has also 
begun a management initiative to increase the number of operational 
days available from the HECs, given delays in deploying the NSCs. 
However, because these plans have not yet been finalized and the Coast 
Guard could not provide estimated completion dates, the extent to which 
these plans will help mitigate the loss of cutter operational days 
faced by the Coast Guard cannot be fully determined at this time. More 
specifically, the Coast Guard's mitigation plans include three key 
elements, as follows: 

* First, the Coast Guard plans to overhaul or replace equipment on 
selected HECs through an HEC sustainment program. According to Coast 
Guard officials, the purpose of the program is to replace obsolete or 
increasingly unsupportable parts and equipment to lower the cost of 
future HEC maintenance and increase the number of days that the HECs 
are able to operate each year. Depending on the state of each 
individual HEC, the sustainment program could include repairs or 
upgrades to the hull and propulsion machinery, fire alarm systems, air- 
conditioning and refrigeration systems, or other equipment that has 
become difficult to maintain. According to Coast Guard officials, they 
do not expect that all of the HECs will receive these upgrades; rather, 
the selection of the cutters to be upgraded is to be based on an 
analysis of their condition. Coast Guard officials stated that the 
analysis of the condition of the HECs is expected to begin in 2011, and 
that the work to overhaul the selected cutters is to begin in 2015, 
with work on the first selected HEC to be completed in 2016. Based on 
these time frames, there will be a loss of cutter operational days 
resulting from the deteriorating condition of the HECs for at least the 
next 7 years, until 2016. During the years in which the Coast Guard 
carries out the sustainment program, the operational gap created by 
lost cutter operational days could widen because each HEC selected for 
upgrade is to be taken out of service for 1 year while the necessary 
work is completed. Coast Guard officials noted that this is required in 
order for HECs to continue operations until the NSCs are deployed and 
that they intend to coordinate the HEC upgrades, the HEC 
decommissioning schedule, and the deployment of the NSCs to ensure that 
a combination of 12 HECs and NSCs are available for operations while 
HECs are removed from service for upgrades. The Coast Guard officials 
said that they have drafted the sustainment program proposal, but it 
was not finalized at the time of our review and the Coast Guard does 
not have an estimated date for when it will be completed. The officials 
added that they could not predict whether this program would be funded. 

* Second, in 2007, the Coast Guard implemented a management initiative 
to (1) clearly define HEC maintenance goals, (2) enumerate tasks to 
achieve those goals, (3) assign personnel responsible for each goal, 
and (4) provide a means of measuring whether the goal had been 
achieved, in order to improve the readiness of the HECs based on the 
West Coast and Hawaii.[Footnote 20] For example, the Coast Guard 
personnel responsible for the HECs' maintenance were assigned the goal 
of improving HEC engineering equipment readiness, including tasks such 
as reducing the time taken to address failures in essential equipment 
to less than 15 days. Similarly, the commanding officers of each HEC 
were assigned the goal of improving scheduled preventive maintenance 
completion rates and to keep records to measure how much of this 
maintenance was completed. Through regular analysis of the measures 
associated with each goal or task, the responsible personnel are to 
identify issues that may impact mission readiness, develop and 
implement corrective actions, and evaluate the effectiveness of those 
actions. While this management initiative is still ongoing, Coast Guard 
officials stated that they believe it has been successful. For example, 
the officials told us that from 2006--the year before the initiative 
began--through 2008, the number of HEC equipment failures that impacted 
missions declined by over 50 percent. 

* Third, in advance of the HEC sustainment program, the Coast Guard 
intended to increase funding for HEC maintenance by $10 million during 
fiscal year 2010. However, Coast Guard officials reported that their 
request for the funding--intended to enable the Coast Guard to complete 
HEC maintenance that had been deferred over time and address the near- 
term maintenance needs of the HECs until the sustainment program 
begins--was not included in the fiscal year 2010 budget.[Footnote 21] 

The Coast Guard Plans to Address Operational Gaps Caused by Delays in 
the Delivery of Unmanned Aircraft and Small Boats with Existing Assets, 
Thus Costs May Not Increase: 

According to the Coast Guard, operational gaps caused by delays in the 
delivery of unmanned aircraft and small boats are to be addressed 
through the use of existing aircraft and small boats and thus, it 
likely would not incur new costs. The unmanned aircraft is intended to 
increase the NSC's surveillance capabilities, while the small boats are 
designed to assist the Coast Guard in conducting vessel boardings, 
pursuing and interdicting other vessels, and conducting search and 
rescue operations. The Coast Guard has not yet finalized the 
operational requirements of these assets; therefore, it is not yet able 
to quantify the gap in aircraft surveillance and small boat missions 
created by their absence. 

Manned aircraft currently provide surveillance support to the HECs and 
other Coast Guard vessels and could be assigned to support NSC 
missions, as needed. While existing aircraft would provide the NSCs 
with a level of air support comparable to that currently provided to 
the HECs, a Coast Guard study found that manned aircraft cannot provide 
the same level of surveillance capabilities that would be provided by a 
cutter-based unmanned aircraft.[Footnote 22] Because the NSCs are to 
replace decommissioned HECs, Coast Guard officials told us that the 
level of support provided by the manned aircraft to the NSCs is not 
expected to be greater than that currently provided to the HECs. 
Therefore, the Coast Guard would, theoretically, not incur new costs in 
assigning existing air assets to the NSC as the HECs are decommissioned 
and no longer need air support. 

According to Coast Guard officials, the Coast Guard plans to deploy the 
first NSC with existing small boats until new small boats are acquired. 
During its operational testing period, NSC-Bertholf is using a 
prototype small boat delivered by the contractor, as well as small 
boats used on the HEC class. According to Coast Guard officials, there 
is no additional cost to use these small boats beyond the funds already 
allocated for small boat operations. Furthermore, Coast Guard officials 
told us that the configuration of the small boats on the NSC will 
enhance its small boat capabilities relative to the HECs. In 
particular, the NSC will be equipped with three small boats, rather 
than the two small boats on the HECs, and will be able to launch and 
recover small boats in rougher seas than the HEC. Nevertheless, the 
lack of operational requirements and a delivery schedule for new small 
boats precludes the Coast Guard from quantifying the gap between the 
capabilities of the existing small boats and those that it intends to 
acquire. As a result, the Coast Guard has not determined the extent to 
which existing small boats will help mitigate the operational gap 
between the existing small boats that will be initially deployed on the 
NSC and the new small boats with which the NSC will deploy in the 
future. 

The Coast Guard Is Working to Finalize Its Key Logistics Plan by 
October 2009, but Complete Logistics Costs Cannot Yet Be Determined: 

The Coast Guard has begun planning for the logistics support transition 
to the NSC from the HEC, and is working to finalize its key NSC 
logistics support plan by October 2009, but the Coast Guard cannot 
determine the complete logistics transition costs. While the Coast 
Guard is generally following the process established in its acquisition 
guide and is developing logistics plans to support the NSC, the key 
logistics support plan has not been finalized and approved within 
required time frames. In particular, to meet the near term logistics 
needs of NSC-Bertholf, the Coast Guard has developed and is using an 
interim support plan, but this plan does not include the requisite 
descriptions of the detailed documents that the Coast Guard plans to 
use to provide logistics support to the NSC or time frames for 
completing these documents. Further, according to its acquisition 
guide, the Coast Guard's key logistics support plan--the Integrated 
Logistics Support Plan--for the NSC should have been finalized prior to 
the start of production on the first NSC in June 2004; but the Coast 
Guard has not finalized or approved this plan. Further, the Coast Guard 
cannot fully estimate the costs of the transition from the HECs to its 
NSCs. 

The Coast Guard Is Developing Required Logistics Plans for the National 
Security Cutter, but the Key Logistics Plan Has Not Been Completed and 
Approved, as Required: 

The Coast Guard is developing logistics plans to support the NSC as 
required by its Major Systems Acquisition Manual (MSAM), but the key 
plan has not been finalized and approved in accordance with the time 
frames required by the MSAM. The Coast Guard is required to follow the 
MSAM when designing and producing new assets. Specifically, the MSAM 
requires a management approach that begins with the identification of 
deficiencies in overall Coast Guard capabilities and then proceeds 
through a series of structured phases and decision points to: (1) 
identify requirements for performance, (2) develop and match these 
requirements with a proposed solution (e.g., asset needed), (3) 
demonstrate the feasibility of the proposed asset, and (4) produce the 
desired asset. The MSAM process provides a number of benefits that have 
the potential to improve acquisition outcomes, such as ensuring that 
the new systems and equipment are optimally supportable and the 
necessary logistics support resources are in place and acquired at an 
optimal cost. Primarily, it requires event-driven decision making by 
high-ranking Coast Guard acquisition personnel at a number of key 
points in an asset's life cycle. At each decision point, or 
"milestone," the MSAM requires the Coast Guard to prepare certain 
documents or plans that capture the information needed for decision 
making and approval of acquisition activities. The MSAM-required 
documents or plans also guide the transition to a new asset (e.g., NSC) 
from a legacy asset (e.g., HEC), and the MSAM provides criteria for the 
Coast Guard to follow when preparing each of these documents. 

Required logistics support documents include the Integrated Logistics 
Support Plan, the Logistics Readiness Review, and the NSC Deployment 
Plan. The Integrated Logistics Support Plan, which should have been 
finalized and approved by the time production of the first NSC was 
started in June 2004, is expected to be completed by October 2009. 
According to Coast Guard officials, the Coast Guard contracted for the 
Logistics Readiness Review and the Coast Guard expects to complete the 
Deployment Plan within the time frames required by the MSAM, which is 
2012. Table 2 describes and provides the status of these plans for the 
NSC acquisition. Appendix I includes a list of the Coast Guard 
documents necessary for NSC operations and logistical support, as well 
as the status of the documents. 

Table 2: Description of Key MSAM-required Logistics Plans: 

Logistics plan: Logistics Readiness Review; 
Description: Assesses the logistics readiness level of a ship, 
identifies gaps in support, and recommends remediation for identified 
gaps; 
Status: Completed in May 2008. At the time the Coast Guard contracted 
for this review, it was not an MSAM requirement. 

Logistics plan: Integrated Logistics Support Plan; 
Description: Serves as the final master logistics plan used after the 
asset is fully operational that incorporates any changes identified 
while the asset undergoes testing with the Interim Support Plan in 
place; 
Status: In progress and expected to be completed by October 2009. 
According to the MSAM, the final plan should have been completed by the 
time production was started on the first NSC in June 2004. 

Logistics plan: Deployment Plan; 
Description: Ensures that all required personnel and facilities are 
identified and provided to operate and sustain the new asset when it 
arrives at the deployed location; 
Status: Not yet started, but expected to be completed by 2012, in 
accordance with MSAM requirements.[A] 

Source: GAO analysis of Coast Guard documents. 

[A] Coast Guard officials stated that some parts of the Deployment Plan 
are under development, but the Coast Guard has not begun work on the 
Deployment Plan itself. 

[End of table] 

The Navy's Logistics Readiness Review Found Some Logistics Plans Are 
Incomplete: 

In 2007, the Coast Guard contracted with the Department of the Navy to 
conduct a Logistics Readiness Review of NSC logistics, which identified 
gaps in logistics planning and recommended corrective actions that the 
Coast Guard has begun to address. The Deepwater contractor developed 
the initial NSC logistics plans, but in 2007, the Coast Guard assumed 
responsibility for NSC logistical planning because, according to Coast 
Guard officials, the contractor's plans were deficient. Coast Guard 
officials stated that they were concerned that the contractor was not 
completing NSC logistics plans quickly enough and the plans had 
insufficient detail. For example, Coast Guard officials said that the 
contractor's logistics plans did not include the necessary details, 
such as how the contractor would support the NSC after it becomes fully 
operational. As part of the logistics shift from the contractor to the 
Coast Guard, in 2007, the Coast Guard contracted with the Department of 
the Navy to assess the logistics readiness level of NSC-Bertholf. While 
not required by the MSAM at the time the review was contracted for, 
Coast Guard officials said that the review helped them focus on areas 
where logistics planning for the NSC were lacking. Coast Guard 
officials added that the review proved to be very useful for logistics 
planning and, as a result, they revised the MSAM to now require this 
review before new assets transition to fully operational status. 

Published in May 2008, the Logistics Readiness Review focused on nine 
areas of logistics readiness and identified logistics gaps in those 
areas. The areas of logistics readiness included the adequacy of the 
spare parts and supplies available to support NSC-Bertholf, the 
adequacy of technical support document and plans, and the adequacy of 
the NSC logistical support facilities, among others. In total, the Navy 
identified 34 gaps within the 9 logistics areas and developed 
recommendations on how the Coast Guard could take appropriate action to 
address those gaps. The Navy identified 18 of the 34 gaps as "high 
priority," which means that the gap introduces significant risk to near-
term supportability and workarounds either do not exist or they 
introduce additional risk. For example, the review found that the Coast 
Guard had not conducted a sufficient number of analyses to determine 
NSC crew training needs. According to Coast Guard officials, the Coast 
Guard generally agreed with the Logistic Readiness Review's findings 
and has made some progress in addressing the recommendations 
identified. According to Coast Guard officials, the Coast Guard plans 
to address 31 of the 34 recommendations. However, according to Coast 
Guard officials, the Coast Guard has decided not to address three 
recommendations because the costs of addressing these recommendations 
outweighed the benefits. For example, the review found that the lifting 
capability of the crane used to hoist items from the pier onto the NSC 
was insufficient and made a recommendation to address this deficiency. 
Coast Guard officials stated the Navy's finding was based on the 
projected capability of the crane and countered that its actual lift 
capabilities are sufficient to meet the needs of the NSC. 

Coast Guard officials stated that the NSC logistics transition from the 
contractor to the Coast Guard either created or increased the 
significance of several of the gaps identified. For example, under the 
contractor-supported model, the Coast Guard would have been responsible 
for a limited amount of NSC maintenance. However, because the Coast 
Guard now plans to support the NSC with its own staff, it must train 
personnel and upgrade facilities. Appendix II provides more detail on 
the review's findings and the status of the Coast Guard's progress in 
implementing the recommendations made to address the gaps identified. 
Coast Guard officials noted that the Navy does not plan to validate the 
actions the Coast Guard has taken. Table 3 shows the Coast Guard's 
assessment of the status of the 34 gaps identified by the Navy's 
review. 

Table 3: Number and Status of the Coast Guard's Progress in Addressing 
Navy's Logistics Readiness Review Recommendations, by Total and High 
Priority: 

Status: Work completed/addressed; 
Number of recommendations: 6; 
Number of recommendations pertaining to high priority gaps: 4. 

Status: Work in progress; 
Number of recommendations: 22; 
Number of recommendations pertaining to high priority gaps: 12. 

Status: Work not started; 
Number of recommendations: 3; 
Number of recommendations pertaining to high priority gaps: 2. 

Status: Recommendation will not be addressed; 
Number of recommendations: 3; 
Number of recommendations pertaining to high priority gaps: 0. 

Status: Total; 
Number of recommendations: 34; 
Number of recommendations pertaining to high priority gaps: 18. 

Source: Coast Guard. 

[End of table] 

According to the Coast Guard officials, the Coast Guard has completed 
work to address six recommendations, such as revising the NSC 
Configuration Management Plan, which the Navy found to be inadequate 
and considered a high-priority gap.[Footnote 23] Regarding the 25 
recommendations in process or not yet started, Coast Guard officials 
stated the Coast Guard has made some progress in addressing these 
recommendations. For example, one high-priority gap cited the lack of 
training for Coast Guard personnel who will be supporting NSC-Bertholf, 
so, according to Coast Guard officials, the Coast Guard is training 
these personnel as needs arise. Despite progress, more work needs to be 
done. For example, the review concluded that facility budgets are 
insufficient and are not aligned with asset deliveries, and that the 
Coast Guard has not developed plans for either home ports or facilities 
for all NSCs.[Footnote 24] The review recommended developing these 
documents to address these high-priority gaps. Coast Guard officials 
stated that the Coast Guard is in the process of addressing the home 
port recommendation, but has not started to address the facility 
recommendation. 

The National Security Cutter's Integrated Logistics Support Plan Has 
Not Been Completed and Approved, as Required: 

The NSC's Integrated Logistics Support Plan--the key logistics planning 
document that is to describe the necessary logistics support 
activities--has not been completed and approved as required by the 
MSAM. The MSAM requires that this plan assign responsibility to a Coast 
Guard unit for the planning of each logistics area and establish a 
schedule with time frames for completing these activities. According to 
the MSAM, each of the 10 logistics areas should have a section in the 
Integrated Logistics Support Plan that identifies and describes the 
detailed documents the Coast Guard intends to use to support the 
project in each logistics area with the details to be provided 
separately. Moreover, the plan is to identify what details will be 
provided, who will provide them, and when. Table 4 describes the 10 
logistics areas. 

Table 4: Coast Guard Logistics Areas: 

Logistics area: 1; Design interface; 
Description: Determines the inherent supportability of a system. 
Purpose is to: (1) ensure that logistical support considerations are a 
part of the design process; and (2) ensure that changes in a system 
design during the various design and construction phases are reviewed 
for impact on logistical support. 

Logistics area: 2; Maintenance planning; 
Description: The analytical methodology used to establish the 
maintenance philosophy of a system; answers questions such as: What can 
go wrong? Who will fix it? Where will it be fixed? How will it be 
fixed? And how often will it need to be fixed? 

Logistics area: 3; Manpower and personnel; 
Description: The identification and acquisition of personnel (military 
and civilian) with skills and grades required to operate, support, and 
maintain a system over its life cycle. 

Logistics area: 4; Supply support; 
Description: All the management actions, procedures, and techniques 
necessary to acquire, catalog, receive, store, transfer, issue and 
dispose of secondary items (piece and repair parts below the major 
system level). 

Logistics area: 5; Support equipment; 
Description: All equipment required to support the operation and 
maintenance of a system. 

Logistics area: 6; Technical data; 
Description: The information needed to translate system and equipment 
design requirements into discrete engineering and logistics 
considerations, such as manual and maintenance procedures. 

Logistics area: 7; Training and training support; 
Description: The processes, procedures, techniques, training devices, 
equipment, and materials used by personnel to operate and support a 
system throughout its life cycle. 

Logistics area: 8; Computer resources support; 
Description: The internal and external facilities, hardware, software, 
personnel, and other resources needed to support software intensive 
systems. 

Logistics area: 9; Packaging, handling, storage, and transportation; 
Description: The requirements, resources, processes, procedures, design 
considerations, and methods necessary to ensure that all systems, 
equipment, and support items are preserved, packaged, handled, stored, 
and transported properly. 

Logistics area: 10; Facilities; 
Description: The real property assets required for the support of a 
system; includes conducting studies that define facilities and facility 
improvement, locations, space needs, equipment, and others. 

Source: GAO analysis of Coast Guard documents. 

[End of table] 

According to the MSAM, the Coast Guard is to prepare and approve the 
Integrated Logistics Support Plan before production is started on the 
first asset in a class. Although the NSC acquisition passed this phase 
in June 2004, as of May 2009, the Coast Guard has not completed and 
approved this plan. Coast Guard officials said that the Coast Guard 
initially required the contractor to develop the Integrated Logistics 
Support Plan, but when the Coast Guard assumed responsibility for NSC 
logistics in 2007, it determined that the contractor's plan did not 
meet the Coast Guard's needs and began to update it. According to Coast 
Guard officials, they expect to complete the plan by October 2009. 

To meet the near term logistics needs of the NSC and guide logistics 
planning until the Coast Guard completes the Integrated Logistics 
Support Plan, it developed an Interim Support Plan. According to the 
Coast Guard, the interim plan is to provide information about how the 
Coast Guard would sustain NSC-Bertholf and to identify the personnel 
responsible for maintaining the NSC. Our review of the Interim Support 
Plan, however, found that while the plan assigns responsibility to a 
Coast Guard unit for activities in all 10 logistics areas, it does not 
provide the level of detail that would be required by the MSAM for an 
NSC Integrated Logistics Support Plan. In particular, as shown in table 
5, we found that 5 of the 10 areas covered in the Interim Support Plan 
do not contain a planning section that describes the detailed documents 
the Coast Guard plans to use to support the NSC in each logistics area. 
In addition, none of the 10 logistics areas contain detailed time 
frames for when the planning information is to be developed and 
finalized. For example, while the interim plan makes note of the 
"Training" logistics area, the plan does not contain any dates to guide 
the Coast Guard's planning of this area. Further, five areas, such as 
"Maintenance Planning" and "Supply Support" do not contain a planning 
section and, therefore, do not have required time frames for completing 
documents. 

Table 5: Information on the Coast Guard's Interim Support Plan's 
Compliance with MSAM Requirements: 

Logistics area: Maintenance planning; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Empty]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Supply support; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Empty]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Training; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Check]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Support and test equipment; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Empty]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Manpower and personnel; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Check]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Packaging, handling, storage, and transportation; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Check]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Facilities; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Check]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Computer resources support; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Empty]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty] 

Logistics area: Technical data;
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Check]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Design interface; 
Responsibility assigned to appropriate Coast Guard offices: [Check]; 
Planning section present in the Interim Support Plan: [Empty]; 
Documentation of time frames present in the Interim Support Plan: 
[Empty]. 

Logistics area: Totals; 
Responsibility assigned to appropriate Coast Guard offices: 10; 
Planning section present in the Interim Support Plan: 5; 
Documentation of time frames present in the Interim Support Plan: 0. 

Source: GAO analysis of Coast Guard data. 

[End of table] 

According to Coast Guard officials, while the Interim Support Plan was 
developed using the MSAM-mandated Integrated Logistics Support Plan 
structure as a guide, they acknowledged that the interim plan does not 
meet MSAM requirements. Further, Coast Guard officials did not commit 
to including all the required items, such as details of documents to be 
used and time frames for completing these documents, when revising the 
final Integrated Logistics Support Plan because they are still in the 
process of determining how to proceed with finalizing the plan. 
Including these details and time frames for the completion of logistics 
planning documents could strengthen the Coast Guard's efforts to 
support the NSC in the 10 logistics areas by providing a roadmap to 
guide its personnel regarding actions to take and when to take them. 
For example, the interim plan lacks MSAM-required details on 
maintenance planning and supply support--which are critical in 
determining the number of people and supplies for supporting the NSC. 
In addition, providing details and time frames for the other logistics 
areas, as noted in table 5, would help ensure such actions are 
conducted in accordance with management's directives and better 
position the Coast Guard to more effectively support the NSCs as they 
are deployed. 

The Coast Guard Continues to Develop Required Components of the 
National Security Cutter Deployment Plan: 

The Coast Guard has made some progress in developing a deployment plan 
that is to address the logistics transition from the HEC to the NSC and 
some of the costs of this transition and expects to complete this plan 
by 2012, as required by the MSAM. Specifically, the MSAM requires the 
Coast Guard to develop an asset deployment plan that includes items 
such as the timing of deliveries, the decommissioning of legacy assets, 
and the selection of locations where the new assets will be based. In 
addition, the Deployment Plan is to identify any costs that will be 
incurred as part of (1) NSC deployment, (2) new or modified facilities 
requirements, (3) staffing issues, and (4) plans for disposal of HECs. 
For the NSC, the MSAM requires an approved plan be in place by 2012, 
prior to full production. The Coast Guard anticipates it will complete 
the NSC Deployment Plan to satisfy this requirement within the time 
frame established by the MSAM. Some parts of the Deployment Plan 
currently under development include the following: 

* Delivery schedule: The Coast Guard has developed an NSC delivery 
schedule. The first NSC was delivered in 2008 and the final NSC is 
expected to be delivered in 2017. 

* Home port locations: According to Coast Guard officials, the Coast 
Guard plans to base the first three NSCs in Alameda, California and 
continues to develop home port plans for the other five cutters and 
determine the facilities upgrades needed at these ports. According to 
the MSAM, both the home port and facility plans are to be completed by 
2012, and Coast Guard officials stated the Coast Guard is on track to 
meet this requirement for both plans. Specifically, Coast Guard 
officials stated that the Coast Guard expects to decide the home port 
locations for the fourth through sixth NSCs by the end of fiscal year 
2009, and it plans to decide the home port locations for the seventh 
and eighth NSCs by fiscal year 2011. According to Coast Guard 
officials, facility planning is to begin after home port locations are 
determined. 

* Decommissioning Schedule: Coast Guard officials stated that they 
continue to work on a decommissioning schedule and have determined that 
the Coast Guard will decommission HEC-Hamilton shortly after NSC- 
Bertholf becomes fully operational. According to Coast Guard officials, 
the order in which the other HECs are to be decommissioned is to be 
determined in 2009, although the order may change after the completion 
of an analysis of the condition of HECs. A critical component of this 
analysis is an assessment of HEC hulls. According to Coast Guard 
officials, saltwater corrodes a cutter's hull over time, and the 
studies are to determine the extent to which the hulls are degraded on 
HECs. Studies of two HEC hulls have been completed, and the Coast Guard 
expects to complete five more in 2009, and then complete the remaining 
five by 2011. Ultimately, the Coast Guard plans to use these studies to 
inform its decision about which HECs to decommission first and which to 
sustain longer. According to Coast Guard officials, the time frames the 
Coast Guard develops to implement its HEC sustainment plan may also 
impact the decommissioning schedule, as the Coast Guard may delay the 
decommissioning of an HEC until it completes sustainment upgrades on 
another HEC to minimize any operational gaps. To further minimize any 
operational gaps, Coast Guard plans to schedule HEC decommissioning 
dates to coincide with NSCs becoming operational. 

Coast Guard Continues to Develop Logistics Transition Cost Estimates: 

The Coast Guard has incurred some costs and developed cost estimates 
related to the logistics transition from the HEC to the NSC, such as 
NSC maintenance personnel salaries at Alameda, but other costs related 
to this transition, such as facilities upgrades for ports other than 
Alameda, cannot be fully determined at this time. According to Coast 
Guard officials, the primary cost drivers of the logistics transition 
are: (1) maintenance planning, (2) maintenance training, (3) facilities 
upgrades, and (4) maintenance execution. These officials stated that 
the cost drivers they identified contained both transition and life- 
cycle logistics costs, and that it was difficult to differentiate 
between these costs. For example, Coast Guard officials stated that the 
maintenance execution cost driver--the actions taken to maintain an 
asset--does not distinguish between transition and life-cycle costs. A 
discussion of the transition component of each cost driver, the costs 
incurred to date, and any estimated future costs follows. 

Maintenance Planning: 

Coast Guard officials said that the first cost driver for the logistics 
transition from HECs to NSCs is the development of maintenance planning 
documents and schedules. According to Coast Guard officials, most 
maintenance planning is complete, and as of May 2009, the Coast Guard 
has spent an estimated $2.5 million on these efforts. More 
specifically, the Coast Guard spent about $1.1 million on contracting, 
primarily for maintenance plan development and management, while the 
remaining $1.4 million represents the amount paid to Coast Guard 
personnel working on maintenance planning. Coast Guard officials 
estimated that as of May 2009, the Coast Guard had completed at least 
90 percent of the needed NSC maintenance planning. 

Maintenance Training: 

Coast Guard officials stated that the second cost driver for the 
logistics transition from HECs to NSCs is the preparation of the crew 
and shore-side maintenance personnel to support the NSC. As of June 
2008, the Coast Guard estimated that it needed about $7 million for 
training. According to Coast Guard officials, the Coast Guard continues 
to develop training programs and further work remains to be done. For 
example, the Logistics Readiness Review recommended completing 
additional training analyses on 30 equipment systems unique to the NSC, 
but Coast Guard officials stated that as of February 2009, only 4 
analyses of these systems were under way. Additionally, the Coast Guard 
has not decided the extent to which it will develop its own training 
courses--which require more upfront costs--as opposed to contracting 
with equipment manufacturers for the training. The costs incurred for 
this driver as well as the overall logistics transition costs may 
increase if the Coast Guard decides to develop more training. 

Facility Upgrades: 

Coast Guard officials told us that the third cost driver for the 
logistics transition from HECs to NSCs includes the modifications to 
the port and its associated buildings to accommodate the new NSCs. By 
June 2008, the Coast Guard had completed about $12.5 million of the 
facility upgrades needed at the Alameda, California port where at least 
three NSCs are to be based. These modifications included pier upgrades 
to accommodate the larger NSC as well as dredging the channel to 
accommodate the NSC's deeper draft.[Footnote 25] Because of these 
logistics improvements, the Coast Guard port at Alameda can now 
accommodate NSC-Bertholf, as shown in figure 5. 

Figure 5: NSC-Bertholf Docked at the Pier, Alameda, California: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

While certain facility upgrades have been completed in Alameda, other 
upgrades have not been completed. For example, the Coast Guard believes 
it will need a building to house those crew members who are part of the 
new rotational crewing concept for the NSC, but as of June 2009, 
construction of the estimated $22.4 million facility has not started. 
According to Coast Guard officials, the Coast Guard also has not begun 
facility upgrades at other locations because the Coast Guard has not 
finalized the NSC Home Port Plan. Coast Guard officials stated that the 
Coast Guard expects to decide the home port locations for the fourth 
through sixth NSCs by the end of fiscal year 2009, and it plans to 
decide the home port locations for the seventh and eighth NSCs by 
fiscal year 2011. Coast Guard officials stated that the Coast Guard may 
select home ports for NSCs in locations that could require more 
significant upgrades than Alameda, an outcome that would increase 
costs. 

Maintenance Execution: 

Coast Guard officials said that the fourth cost driver for the 
logistics transition from HECs to NSCs is maintenance activities to 
support the NSCs and include (1) the cost of purchasing agreements and 
other commercial contracts to supply and maintain the NSCs and (2) 
salaries for Coast Guard shore-side maintenance personnel. According to 
Coast Guard officials, as of May 2009, the Coast Guard had spent 
$550,000 on purchasing agreements it developed with equipment 
manufacturers to help bridge the gap between contractor-supported and 
Coast Guard-supported logistics and plans to allocate $5.6 million for 
these agreements from 2008 through 2011. Coast Guard officials stated 
the Coast Guard has used these agreements to purchase parts and extend 
equipment warranties, among other things. Additionally, Coast Guard 
officials stated that the Coast Guard plans to enter into other 
commercial contracts for NSC maintenance from 2008 through 2011, but 
cannot estimate the costs of those contracts because it does not have 
historical maintenance data on the NSC's new equipment that are needed 
to estimate the frequency of equipment failures and the costs of 
repairing them. Coast Guard officials stated that the Coast Guard 
currently has a 5-year study underway to develop more accurate 
maintenance cost estimates. 

Regarding maintenance personnel salaries, Coast Guard officials said 
that separating the personnel costs for the logistics transition from 
HECs to NSCs is difficult because maintenance execution costs are 
determined based on the service life of the cutters and transition 
costs are not accounted for separately. As such, these officials could 
not estimate the maintenance personnel cost component of the logistics 
transition. Although the Coast Guard has estimated shore side 
maintenance costs for NSCs that are to use Alameda as a home port, 
Coast Guard officials stated that they have not determined how quickly 
the support needs for HECs will diminish as NSCs begin conducting 
missions and HECs are decommissioned. With this in mind, Coast Guard 
officials stated that the Coast Guard plans to phase out personnel 
positions currently dedicated to supporting HECs and replace them with 
personnel dedicated to support NSCs. According to Coast Guard 
officials, the Coast Guard currently has 79 maintenance personnel 
positions in Alameda to support four HECs and could not estimate the 
cost for these positions. These officials stated the Coast Guard has 
added 11 NSC maintenance positions in Alameda, at a cost of $940,000 
per year, and estimate that it will need 108 additional maintenance 
personnel to support the first three NSCs at a cost of about $9 million 
per year for all three combined. Furthermore, Coast Guard officials 
stated that they expect the maintenance execution cost estimates to 
change after the Coast Guard completes a study to determine the number 
of shore-side personnel needed to support the NSC--the lack of that 
study was identified in the Logistics Readiness Review as high 
priority. 

Conclusions: 

The NSC, the first cutter class delivered to the Coast Guard under the 
Deepwater program, is to be instrumental in carrying out the Coast 
Guard's missions as it replaces the aging and increasingly unreliable 
HEC class. Although the Coast Guard assumed responsibility for NSC 
logistical planning in 2007 because it believed that the contractor's 
plans did not contain sufficient details, the Coast Guard has yet to 
complete the Integrated Logistics Support Plan, as required by the 
MSAM. The Coast Guard has developed an interim support plan to guide 
logistics planning for the NSC until the Integrated Logistics Support 
Plan is finalized, but the interim plan lacks MSAM-required details, 
such as maintenance planning and supply support that are critical in 
determining the number of people and supplies the Coast Guard will need 
to support the NSC. Further, while the Coast Guard expects to complete 
the Integrated Logistics Support Plan by October 2009, the plan may not 
include the required details of logistics support documents to be used 
and time frames for completing them because the Coast Guard is still 
determining how to proceed with finalizing the plan and did not commit 
to including these details. Identifying these details and time frames 
for the completion of logistics planning documents could strengthen the 
Coast Guard's efforts to support the NSC in the 10 logistics areas by 
providing a roadmap to guide its personnel of actions to take and when 
to take them, better position the Coast Guard to more effectively 
transition to the NSC, better ensure that the Coast Guard's cost 
estimates are reasonable, and reduce uncertainties for the Coast Guard 
(which must budget for such costs in advance) and Congress (which must 
appropriate the funds). 

Recommendation for Executive Action: 

To meet MSAM requirements and aid the Coast Guard in making operational 
decisions, GAO recommends that the Commandant of the Coast Guard ensure 
that as the Coast Guard finalizes the Integrated Logistics Support Plan 
for the NSC, that the plan includes the required logistics support 
documents to be used and the time frames for completing them. 

Agency Comments: 

In June 2009, we requested comments on a draft of this report from the 
Department of Homeland Security and the Coast Guard. The Coast Guard 
provided technical comments, which we have incorporated into the 
report, as appropriate. In addition to the technical comments, the 
Department of Homeland Security and the Coast Guard jointly provided an 
official letter for inclusion in this report. In the letter, the 
agencies noted that they generally concur with our findings and 
recommendation. A copy of this letter can be seen in appendix III. 

We are providing copies of this report to the Secretary of DHS, the 
Commandant of the U.S. Coast Guard, and interested congressional 
committees. In addition, the report will also be made available at no 
charge on GAO's Web site at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-9610, or caldwells@gao.gov. Contact points for 
our Office of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major contributions 
to this report are listed in appendix IV. 

Signed by: 

Stephen L. Caldwell: 
Director, Homeland Security and Justice Issues: 

[End of section] 

Appendix I: National Security Cutter Operations and Logistics 
Documents: 

This appendix lists the Coast Guard's National Security Cutter (NSC) 
operations and logistics documents that are incomplete or under 
development. The Coast Guard uses many documents to guide the 
acquisition and logistical support of its assets. The Coast Guard 
documents relative to the NSC, their expected completion dates, and 
purpose are listed in table 6. 

Table 6: List of NSC Operations and Logistics Documents/Analyses and 
Expected Completion Dates: 

Document/analysis: Small Boats Concept of Operations; 
Expected completion date: Spring 2009; 
Purpose: Outlines the specific uses and missions of small boats 
integrated with the NSC. 

Document/analysis: Fleet Mix Analysis; 
Expected completion date: Summer 2009; 
Purpose: Determines the appropriate number of Deepwater assets, 
including NSCs. 

Document/analysis: Small Boats Operational Requirements Document; 
Expected completion date: Summer 2009; 
Purpose: Provides the performance specifications of small boats. 

Document/analysis: NSC Test and Evaluation Master Plan; 
Expected completion date: July 2009; 
Purpose: Serves as the "top-level" planning document for all NSC 
testing and evaluation. Guides verification of technical performance 
parameters, operational effectiveness, and operational suitability. 

Document/analysis: NSC Logistics Support Plan; 
Expected completion date: October 2009; 
Purpose: Serves as the master logistic support planning document and is 
an integral part of the total project planning effort. Describes the 
necessary logistics support activities including assigning 
responsibility for those activities and establishing the schedule for 
completing those activities. 

Document/analysis: Project Management Plan; 
Expected completion date: October 2009; 
Purpose: Establishes procedures for the overall management of the 
approved acquisition project. Provides the framework to define the 
activities/tasking, responsibilities, and the sequence of events, and 
is the Project Manager's blueprint for project management. 

Document/analysis: Mission Enhancement Project--Plus Plan; 
Expected completion date: 2009; 
Purpose: Documents High Endurance Cutter sustainment process that will 
replace aging and obsolete systems to reduce maintenance costs and 
operational days lost because of unplanned maintenance. 

Document/analysis: HEC Decommissioning Schedule; 
Expected completion date: Late 2009; 
Purpose: Determines the order in which the Coast Guard will 
decommission HECs. 

Document/analysis: Crew Rotational Concept; Concept of Operations; 
Expected completion date: 2010-2011; 
Purpose: Provides specifics on how the Coast Guard will implement 
rotational crewing. Needed to estimate the number of shore-side NSC 
maintenance personnel--a key cost of the maintenance transition. 

Document/analysis: Unmanned Aircraft System Study; 
Expected completion date: 2010; 
Purpose: Document which identifies the most effective unmanned aircraft 
system to operate off the Coast Guard's National Security Cutter. 

Document/analysis: High Endurance Cutter Hull Inspections; 
Expected completion date: 2011; 
Purpose: Provides information to support the HEC decommissioning 
schedule. 

Document/analysis: NSC Home Port Plan; 
Expected completion date: 2011[A]; 
Purpose: Determines home port for each of the eight NSCs. 

Document/analysis: Deployment Plan; 
Expected completion date: 2012; 
Purpose: Addresses all areas of asset deployment related to the 
acquisition. Ensures that all required resources (e.g., personnel and 
facilities) are identified and provided to operate and sustain the new 
asset or capability when it arrives at the deployed location. 

Document/analysis: Integrated Training Plan; 
Expected completion date: No estimate available; 
Purpose: Formalizes both NSC crew and shore-side personnel training 
curricula. 

Document/analysis: Manpower Requirements Analysis for shore-side 
commands; 
Expected completion date: No estimate available; 
Purpose: Details the shore-side requirements--including billets--needed 
for NSC maintenance. Completion is dependent on the crew rotational 
concept (CRC) concept of operations (CONOPS). 

Document/analysis: Class Facilities Plan; 
Expected completion date: No estimate available; 
Purpose: Determines what changes are necessary in selected homeports to 
accommodate NSCs. Completion is dependent on the NSC Home Port Plan. 

Source: GAO Analysis of Coast Guard information. 

[A] Coast Guard officials stated that the first three NSCs will be 
located in Alameda, California. According to these officials, the Coast 
Guard expects to decide the home port locations for the fourth through 
sixth NSCs by the end of fiscal year 2009, and it plans to decide the 
home port locations for the seventh and eighth NSCs by fiscal year 
2011. 

[End of table] 

[End of section] 

Appendix II: Logistics Readiness Review Findings and the Coast Guard's 
Efforts to Address Identified Gaps: 

This appendix describes the results of the Navy's Logistics Readiness 
Review (LRR) and the Coast Guard's efforts to address identified gaps, 
as of May 2009. The MSAM requires the completion of a LRR as a part of 
the acquisition process. The Coast Guard contracted with the Department 
of the Navy to conduct a LRR, which assessed the adequacy of the Coast 
Guard's readiness to support the NSC based on logistics plans provided 
by the contractor. Specifically, the LRR determined the logistics 
readiness level of NSC-Bertholf, identified gaps in support, assessed 
potential impacts on mission performance, and recommended remediation 
for identified gaps. This appendix provides details on the review's 
findings and the status of the recommendations made to address the gaps 
identified. 

Navy Review of National Security Cutter Logistics Areas Identified 
Gaps: 

The LRR focused on nine areas of logistics readiness, including supply 
support, technical documents, facilities, and aviation, among others. 
[Footnote 26] Table 7 provides the review's findings in the nine areas. 

Table 7: The Navy's Logistics Readiness Review Assessment of NSC 
Logistics Areas, as of May 2008: 

Logistics areas: 1; Support equipment; 
Assessment of progress made: Inoperative; 
Number of gaps: 2; 
Number of gaps that introduce significant risk[A]: 1. 

Logistics areas: 2; Configuration management; 
Assessment of progress made: The working level details in the draft 
Configuration Management Plan are inadequate to support the NSC; 
Number of gaps: 1; 
Number of gaps that introduce significant risk[A]: 1. 

Logistics areas: 3; Capstone documentation; 
Assessment of progress made: Capstone documents need to be updated, or 
in some cases developed; 
Number of gaps: 4; 
Number of gaps that introduce significant risk[A]: 3. 

Logistics areas: 4; Manpower, personnel, and training; 
Assessment of progress made: Minor Problems; 
Number of gaps: 6; 
Number of gaps that introduce significant risk[A]: 3. 

Logistics areas: 5; Aviation and small boats; 
Assessment of progress made: Minor Problems (aviation)/moderate 
problems (small boats); 
Number of gaps: 3; 
Number of gaps that introduce significant risk[A]: 0. 

Logistics areas: 6; Technical documentation; 
Assessment of progress made: Moderate problems; 
Number of gaps: 6; 
Number of gaps that introduce significant risk[A]: 4. 

Logistics areas: 7; Supply support; 
Assessment of progress made: Moderate problems; 
Number of gaps: 5; 
Number of gaps that introduce significant risk[A]: 5. 

Logistics areas: 8; Facilities; 
Assessment of progress made: Moderate problems; 
Number of gaps: 6; 
Number of gaps that introduce significant risk[A]: 0. 

Logistics areas: 9; Maintenance planning; 
Assessment of progress made: Not reviewed[B]; 
Number of gaps: 1; 
Number of gaps that introduce significant risk[A]: 1. 

Logistics areas: Total; 
Number of gaps: 34; 
Number of gaps that introduce significant risk[A]: 18. 

Source: GAO analysis of data compiled by the U.S. Navy. 

[A] The Logistics Readiness Review identified some gaps as "Priority 
1," which the Navy defined as the gaps that introduce significant risk 
to near-term supportability and workarounds either do not exist or 
introduce significant risk. 

[B] Prior to the start of the Navy's review, the Coast Guard determined 
that the maintenance procedures delivered by the contractor were 
deficient. As a result, the Navy did not review this logistics area and 
assessed it has a gap that introduced significant risk to logistics 
readiness. 

[End of table] 

The LRR identified 34 gaps within the 9 logistics. Details on the 
Navy's assessment for each of these logistics areas are as follows: 

Support Equipment: 

Support equipment is all the required equipment needed to support the 
operation and maintenance of a system, including: tools; ground support 
equipment such as generators and service carts; and calibration 
equipment, among others. Systems include such areas as propellers, 
guns, and the rudder. A review of 197 NSC systems identified incomplete 
and inconsistent support equipment documentation. For example, 22 
percent of the items needed to support the NSC systems had complete 
support equipment data while the remaining 78 percent had either 
partial or no data. Additionally, numerous support equipment items were 
referenced multiple times for the same systems. For example, a system 
that should require only one 2,000 pound chain hoist had documents that 
listed a 2,000 pound chain hoist 15 times. 

Configuration Management: 

Configuration management is the process used to understand the 
important components of an asset and to manage any changes to these 
components that might be made over the asset's service life. This 
process includes identifying components that require management; 
controlling changes to these components; and recording changes made to 
components. The LRR concluded that there was limited capacity within 
the Coast Guard to address near-term configuration management processes 
and that the working-level details in the draft configuration 
management plan were not adequate to support the NSC. For example, the 
Navy identified more than 13,700 NSC equipment and system records from 
databases and site inspections, but the contractor's databases included 
only 5,600 records. 

Capstone Documentation: 

The Navy identified NSC Capstone documents, which are the documents 
normally required for major milestone decisions. The Navy found that 
several logistics documents needed to be updated, such as the 
Configuration Management Plan and the Interim Logistics Support Plan. 
The Configuration Management Plan provides the process the Coast Guard 
uses to control changes to NSC components, while the Logistics Support 
Plan serves as the master logistics support document. Other documents-
-including the Home Port Plan and Facilities Plan--need to be 
developed. The Home Port Plan is to outline where all eight NSCs are to 
be permanently stationed and the Facilities Plan is to describe the 
necessary changes to those homeports needed to accommodate NSCs. 

Manpower, Personnel, and Training: 

Manpower and personnel is the identification and acquisition of 
personnel (military and civilian) with skills and grades required to 
operate, support, and maintain a system over its life cycle. Training 
is the processes, procedures, techniques, training devices, equipment, 
and materials used by personnel to operate and support a system 
throughout its life cycle. Overall, the Navy found that this area had 
minor problems, but identified some areas of concern. For example, the 
personnel evaluation identified several administrative findings the 
Coast Guard needed to resolve, including filling three vacant NSC- 
Bertholf crew positions. Additionally, the training evaluation found 
that NSC training requirements are "significantly greater" than for 
legacy cutters and determined that 137 systems require additional 
formal training. For example, the LRR found that the average number of 
training days needed for an HEC crewmember is 23, but NSC crew members 
need an average of 61 days of training. 

Aviation and Small Boats: 

The aviation logistics area was found to have minor problems and the 
small boats area was categorized as having moderate problems. The 
review identified two aviation Priority 3 gaps and found, for example, 
that the wind indicating system pilots use to land helicopters on the 
NSC was inadequate. According to the LRR, the NSC does not have a 
system certified by the Navy, but Coast Guard officials stated that the 
Coast Guard has received interim approval from the Navy to use the 
current system. The review also found that the Coast Guard had not made 
a final decision regarding the small boat package required for the NSC. 
The review recommended conducting a small boat LRR once the Coast Guard 
decided on the small boat package. 

Technical documentation: 

Technical documentation is the information needed to translate system 
and equipment design requirements into discrete engineering and 
logistics considerations, such as manual and maintenance procedures. 
The Navy compared technical documentation data from different Coast 
Guard sources and found that there were a number of technical 
documentation discrepancies. The baseline documentation lists were 
inconsistent and did not provide the desired level of logistics 
information as compared with documentation found on other vessel 
classes. For example, the review identified about 300 document 
duplications and discrepancies in Coast Guard data. Moreover, the 
review determined that the Coast Guard was unable to effectively 
identify and track these documents. 

Supply support: 

Supply support is all the management actions, procedures, and 
techniques necessary to acquire, catalog, receive, store, transfer, 
issue and dispose of secondary items (piece and repair parts below the 
major system level). The review found that the contractor did not 
include maintenance requirements in the spares determination process; 
out of the 316 items the Navy reviewed, 55 items had sufficient spares 
ordered, 127 items had insufficient spares, and 134 items had either 
incomplete or no data. 

Facilities: 

The review also examined all planned, ongoing, and completed shoreside 
facility projects to gauge the potential impact on the delivery of NSC- 
Bertholf to the Coast Guard's Alameda, California location. The review 
found numerous logistics gaps--such as an expired certification for a 
crane used to maintain NSC small boats--but none introduced significant 
risk to the near-term supportability of the NSC. 

Maintenance planning: 

Maintenance planning is the analytical methodology used to establish 
the maintenance philosophy of a system and answers questions such as: 
What can go wrong? Who will fix it? Where will be fixed? How will it be 
fixed? And how often will it need to be fixed? The LRR for the NSC did 
not review the detailed maintenance procedures needed to support the 
hull, mechanical, electrical, and communications systems because Coast 
Guard officials told the Navy that the procedures in place at the time 
of the LRR did not contain the information needed. The review 
identified the inadequacy of maintenance procedures as a significant 
gap. 

The Coast Guard Reports Making Progress in Addressing Gaps Identified 
by the Logistics Readiness Review: 

The Coast Guard has addressed some of the gaps identified by the 
Logistics Readiness Review. The Navy categorized the gaps it identified 
in the LRR and developed recommendations to address those gaps. The 
Navy ranked the gaps it identified in the LRR as Priority 1, 2, or 3. 
Priority 1 gaps are defined as those that introduce significant risk to 
near-term supportability, and workarounds either do not exist or 
introduce additional risk. Priority 2 gaps do not introduce significant 
risk to near-term supportability, and workarounds are likely to 
increase the cost or reduce the efficiency of maintenance or 
operations. Priority 3 gaps do not introduce significant risk to near- 
term supportability, and workarounds exist that do not introduce 
additional risk. Of the 34 gaps, the Navy identified 18 as Priority 1, 
8 as Priority 2, and 8 as Priority 3. As of May 2009, Coast Guard 
officials stated that the Coast Guard had addressed 7 recommendations 
(3 of which pertain to priority 1 gaps), was in the process of 
addressing 21 (13 of which pertain to priority 1 gaps), had not started 
3 (2 of which pertain to priority 1 gaps), and had decided not to 
address 3 gaps (none of which pertain to priority 1 gaps). Table 8 
provides a list of the 34 gaps the LRR identified and the progress the 
Coast Guard has made in addressing these gaps. 

Table 8: NSC Logistics Readiness Review Assessment of Logistics Areas 
and the Coast Guard's Reported Progress: 

Logistics Gaps: 

Priority 1 Gap: NSC-Bertholf will not receive Navy standard Engineering 
Operational Sequencing System (EOSSS) documents; 
Status: Completed. 

Priority 1 Gap: Training requirements requested in CG-1 resource 
proposals require validation; 
Status: Completed. 

Priority 1 Gap: Limited capacity to address near-term configuration 
management processes and status accounting; 
Status: Completed. 

Priority 1 Gap: Hull, Maintenance and Electrical and Command, Control, 
Communications, Computers, Intelligence, Surveillance, and 
Reconnaissance (C4ISR) maintenance procedures inadequate; 
Status: Completed. 

Priority 1 Gap: NSC-Bertholf will not receive Navy standard Combat 
Systems Operational Sequencing System (CCOSS) documents; 
Status: In progress. 

Priority 1 Gap: No locally prepared combat systems operating 
procedures; 
Status: In progress. 

Priority 1 Gap: Procurement of recommended C4ISR spares incomplete; 
Status: In progress. 

Priority 1 Gap: Minimal deep insurance spares; 
Status: In progress. 

Priority 1 Gap: Baseline technical documentation lists are 
inconsistent; 
Status: In progress. 

Priority 1 Gap: Support equipment documentation is incomplete and 
inconsistent; 
Status: In progress. 

Priority 1 Gap: No integrated training plan captures non-billet 
specific or shore support training requirements; 
Status: In progress. 

Priority 1 Gap: There are NSC Class-unique systems that require a front 
end analysis; 
Status: In progress. 

Priority 1 Gap: Home port requirements continue to evolve; no home port 
plan for hulls beyond the first three; 
Status: In progress. 

Priority 1 Gap: Transition to Coast Guard support of C4ISR suite; 
Status: In progress. 

Priority 1 Gap: Original Source, Maintenance, and Recoverability coding 
should be updated; 
Status: In progress. 

Priority 1 Gap: No formal Provisioning Technical Documentation for 
C4ISR; 
Status: In progress. 

Priority 1 Gap: Facility requirements are not definitive and continue 
to evolve; 
Status: Not started. 

Priority 1 Gap: Manpower Requirements Analysis for the shore commands 
is not complete; 
Status: Not started. 

Priority 2 Gap: Alameda port security issues; 
Status: Completed. 

Priority 2 Gap: Support equipment requirements for the LM2500 engine 
are unknown; 
Status: Completed. 

Priority 2 Gap: Naval Engineering Support Unit is scheduled to receive 
25 additional billets over next 3 fiscal years and may need office 
space; 
Status: In progress. 

Priority 2 Gap: No facility currently exists to store shore power cable 
reels at Alameda; 
Status: In progress. 

Priority 2 Gap: No plan currently exists to maintain the new shore 
power infrastructure; 
Status: In progress. 

Priority 2 Gap: Certification of overhead crane expired; 
Status: Will not be addressed. 

Priority 2 Gap: A comprehensive list of Coast Guard-required operations 
and tactical documentation is unavailable; 
Status: Will not be addressed. 

Priority 2 Gap: Alameda pier side crane lifting capability is 
insufficient; 
Status: Will not be addressed. 

Priority 3 Gap: Manpower requirements for crew need to be revised[A]; 
Status: In progress. 

Priority 3 Gap: Level III analysis will need to be revised once a new 
Front End Analysis (FEA) is performed[A]; 
Status: In progress. 

Priority 3 Gap: No logistical support for Aircraft/Shipboard Integrated 
Secure and Traverse System; 
Status: In progress. 

Priority 3 Gap: Wind Measuring and Indicating System is not a Naval Air 
Systems Command certified system; 
Status: In progress. 

Priority 3 Gap: Logistics Support Plan is incomplete; 
Status: In progress. 

Priority 3 Gap: Training and simulation support not aligned with watch 
standards qualification system and EOSS/CSOSS; 
Status: In progress. 

Priority 3 Gap: Damage control repair locker inventory process is 
inefficient; 
Status: In progress. 

Priority 3 Gap: No LRR for the Long Range Interceptor small boat; 
Status: Not started. 

Source: Coast Guard. 

[A] The Navy considered these gaps to be Priority 3, but the Coast 
Guard recategorized them as Priority 1. 

[End of table] 

[End of section] 

Appendix III: Comments from the Department of Homeland Security: 

U.S. Department of Homeland Security: 
Washington, DC 20528 

July 10, 2009: 

Mr. Stephen Caldwell: 
Director: 
Homeland Security and Justice Issues: 
United States Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Caldwell: 

Thank you for the opportunity to review and comment on the Government 
Accountability Office's (GAO's) Draft Report GAO-09-497, entitled Coast 
Guard Better Logistics Planning Needed to Aid Operational Decisions 
Related to the Deployment of the National Security Cutter and Its 
Support Assets. 

The United States Coast Guard (USCG) remains grateful for the work GAO 
has done to bring attention to issues within the Coast Guard's 
acquisition of the National Security Cutter (NCS) and concurs with the 
findings of this report. The commitment, the GAO has towards making the 
Deepwater program successful is appreciated and the Coast Guard values 
the opinion of the GAO. The Coast Guard benefits from this oversight 
and will use it to ensure improvement to our acquisition program in the 
future. Thank you for considering the Coast Guard's comments on these 
very important issues. 

Recommendation: "To meet MSAM requirements and aid the Coast Guard in 
making operational decisions, GAO recommends that the Commandant of the 
Coast Guard ensure that as the Coast Guard finalizes the Integrated 
Logistics Support Plan for the NSC, that the plan includes the required 
logistics support documents to be used and the time frames for 
completing them." 

Response: Concur - the USCG agrees with the Recommendation and is in 
the process of finalizing the NSC Integrated Logistics Support Plan. 

Thank you again for the opportunity to comment on this Draft Report and 
we look forward to working with you on future Homeland Security issues. 

Sincerely, 

Signed by: 

Jerald E. Levine: 
Director: 
Departmental GAO/OIG Liaison Office: 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Stephen L. Caldwell (202) 512-9610 or caldwells@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Christopher Conrad, Assistant 
Director, and Ellen Wolfe, Analyst-in-Charge, managed this review. 
Christoph Hoashi-Erhardt and Paul Hobart made significant contributions 
to the work. Geoffrey Hamilton provided legal and regulatory support; 
Adam Vogt provided assistance in report preparation; Michele Fejfar 
assisted with design, methodology, and data analysis; and Karen Burke 
helped develop the report's graphics. 

[End of section] 

Related GAO Products: 

Coast Guard: As Deepwater Systems Integrator, Coast Guard Is 
Reassessing Costs and Capabilities but Lags in Applying Its Disciplined 
Acquisition Approach. [hyperlink, 
http://www.gao.gov/products/GAO-09-682]. Washington, D.C.: July 14, 
2009. 

Coast Guard: Observations on the Fiscal Year 2010 Budget and Related 
Performance and Management Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-09-810T]. Washington, D.C.: July 7, 24, 
2009. 

Coast Guard: Observations on the Genesis and Progress of the Service's 
Modernization Program. [hyperlink, 
http://www.gao.gov/products/GAO-09-530R]. Washington, D.C.: June 24, 
2009. 

Coast Guard: Update on Deepwater Program Management, Cost, and 
Acquisition Workforce. [hyperlink, 
http://www.gao.gov/products/GAO-09-620T]. Washington, D.C.: April 22, 
2009. 

Coast Guard: Change in Course Improves Deepwater Management and 
Oversight, but Outcome Still Uncertain. [hyperlink, 
http://www.gao.gov/products/GAO-08-745]. Washington D.C.: June 24, 
2008. 

Coast Guard: Strategies for Mitigating the Loss of Patrol Boats Are 
Achieving Results in the Near Term, but They Come at a Cost and Longer 
Term Sustainability Is Unknown. [hyperlink, 
http://www.gao.gov/products/GAO-08-660]. Washington, D.C.: June 23, 
2008. 

Status of Selected Aspects of the Coast Guard's Deepwater Program. 
[hyperlink, http://www.gao.gov/products/GAO-08-270R]. Washington, D.C.: 
March 11, 2008. 

Coast Guard: Observations on the Fiscal Year 2009 Budget, Recent 
Performance, and Related Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-08-494T]. Washington, D.C.: March 6, 
2008. 

Coast Guard: Deepwater Program Management Initiatives and Key Homeland 
Security Missions. [hyperlink, 
http://www.gao.gov/products/GAO-08-531T]. Washington, D.C.: March 5, 
2008. 

Coast Guard: Challenges Affecting Deepwater Asset Deployment and 
Management and Efforts to Address Them. [hyperlink, 
http://www.gao.gov/products/GAO-07-874]. Washington, D.C.: June 18, 
2007. 

Coast Guard: Status of Efforts to Improve Deepwater Program Management 
and Address Operational Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-07-575T]. Washington, D.C.: March 8, 
2007. 

Coast Guard: Preliminary Observations on Deepwater Program Assets and 
Management Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-07-446T]. Washington, D.C.: February 
15, 2007. 

Coast Guard: Coast Guard Efforts to Improve Management and Address 
Operational Challenges in the Deepwater Program. [hyperlink, 
http://www.gao.gov/products/GAO-07-460T]. Washington, D.C.: February 
14, 2007. 

Homeland Security: Observations on the Department of Homeland 
Security's Acquisition Organization and on the Coast Guard's Deepwater 
Program. [hyperlink, http://www.gao.gov/products/GAO-07-453T]. 
Washington, D.C.: February 8, 2007. 

Coast Guard: Status of Deepwater Fast Response Cutter Design Efforts. 
[hyperlink, http://www.gao.gov/products/GAO-06-764]. Washington, D.C.: 
June 23, 2006. 

Coast Guard: Changes to Deepwater Plan Appear Sound, and Program 
Management Has Improved, but Continued Monitoring Is Warranted. 
[hyperlink, http://www.gao.gov/products/GAO-06-546]. Washington, D.C.: 
April 28, 2006. 

Coast Guard: Progress Being Made on Addressing Deepwater Legacy Asset 
Condition Issues and Program Management, but Acquisition Challenges 
Remain. [hyperlink, http://www.gao.gov/products/GAO-05-757]. 
Washington, D.C.: July 22, 2005. 

Coast Guard: Preliminary Observations on the Condition of Deepwater 
Legacy Assets and Acquisition Management Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-05-651T]. Washington, D.C.: June 21, 
2005. 

Coast Guard: Preliminary Observations on the Condition of Deepwater 
Legacy Assets and Acquisition Management Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-05-307T]. Washington, D.C.: April 20, 
2005. 

Coast Guard: Deepwater Program Acquisition Schedule Update Needed. 
[hyperlink, http://www.gao.gov/products/GAO-04-695]. Washington, D.C.: 
June 14, 2004. 

Coast Guard: Progress Being Made on Deepwater Project, but Risks 
Remain. [hyperlink, http://www.gao.gov/products/GAO-01-564]. 
Washington, D.C.: May 2, 2001. 

[End of section] 

Footnotes: 

[1] A group of ships of similar design is called a class. The Coast 
Guard's current plans call for the NSC class to include eight cutters, 
although this is under review. 

[2] The delivery delay is a result of problems the Coast Guard 
experienced during the construction of the first NSC, which caused 
delays with the deployment of the first and subsequent NSCs. 

[3] See GAO, Coast Guard: Update on Deepwater Program Management, Cost, 
and Acquisition Workforce, [hyperlink, 
http://www.gao.gov/products/GAO-09-620T] (Washington, D.C.: April 22, 
2009) and GAO, Coast Guard: Challenges Affecting Deepwater Asset 
Deployment and Management and Efforts to Address Them, [hyperlink, 
http://www.gao.gov/products/GAO-07-874] (Washington, D.C.: June 18, 
2007). 

[4] Defense readiness includes participating with the Department of 
Defense in global military operations. 

[5] H.R. Rep. No. 109-476 at 64 (2006). 

[6] Naval Sea Systems Command, Department of the Navy, Logistics 
Readiness Review (LRR): United States Coast Guard Cutter BERTHOLF 
(Maritime Security Cutter, Large, WMSL 750): Final Report (May 2, 
2008). 

[7] The Coast Guard's "system-of-systems" approach integrates vessels, 
aircraft, and communication links together as a system to accomplish 
mission objectives. 

[8] Coast Guard logistics encompasses support activities associated 
with developing, acquiring, testing, and sustaining the mission 
effectiveness of operating systems throughout their service lives. 

[9] Prior GAO reports on the Deepwater program are listed in the 
"Related GAO Products" section at the end of this report. 

[10] GAO, Contract Management: Coast Guard's Deepwater Program Needs 
Increased Attention to 

Management and Contractor Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-04-380] (Washington, D.C.: Mar. 9, 
2004). 

[11] GAO, Coast Guard: Changes to Deepwater Plan Appear Sound, and 
Program Management Has Improved, but Continued Monitoring Is Warranted, 
[hyperlink, http://www.gao.gov/products/GAO-06-546] (Washington, D.C.: 
Apr. 28, 2006); GAO, Coast Guard: Challenges Affecting Deepwater Asset 
Deployment and Management and Efforts to Address Them, [hyperlink, 
http://www.gao.gov/products/GAO-07-874] (Washington, D.C.: June 18, 
2007); and, GAO, Status of Selected Aspects of the Coast Guard's 
Deepwater Program, [hyperlink, http://www.gao.gov/products/GAO-08-270R] 
(Washington, D.C.: Mar. 11, 2008). 

[12] GAO, Coast Guard: Change In Course Improves Deepwater Management 
and Oversight, but Outcome Still Uncertain, [hyperlink, 
http://www.gao.gov/products/GAO-08-745] (Washington D.C.: June 24, 
2008) and GAO, Coast Guard: Strategies for Mitigating the Loss of 
Patrol Boats Are Achieving Results in the Near Term, but They Come at a 
Cost and Longer Term Sustainability Is Unknown, [hyperlink, 
http://www.gao.gov/products/GAO-08-660] (Washington, D.C.: June 23, 
2008). 

[13] According to the 2007 delivery schedule, the first NSC was to be 
certified as fully operational in calendar year 2009. 

[14] From 2005 to 2006, the Coast Guard worked to rebaseline the 
Deepwater program to reflect its post-9/11 mission. The Deepwater 
Acquisition Program Baseline, approved by the Department of Homeland 
Security (DHS) in May 2007, reflects those changes. 

[15] The actual delivery and certification of NSCs as fully operational 
may happen more quickly or more slowly than expected in these plans. 

[16] A cutter operational day is generally logged when the vessel 
completes at least 4 hours of operations in a given 24 hour period. 

[17] Deepwater Vertical Unmanned Aerial Vehicles (VUAV) Path Forward 
Study Group: Phase II Alternatives Analysis Report, United States Coast 
Guard Research and Development Center (August, 2007). 

[18] The helicopter the Coast Guard plans to deploy with the NSC is its 
HH-65 multimission helicopter. The NSC can also launch and recover 
medium-range recovery helicopters, but the NSC hangar is not large 
enough for this helicopter to be deployed with the NSC for long periods 
of time. 

[19] As we previously reported in 2008 [Coast Guard: Change In Course 
Improves Deepwater Management and Oversight, but Outcome Still 
Uncertain, [hyperlink, http://www.gao.gov/products/GAO-08-745] 
(Washington D.C.: June 24, 2008)], the Deepwater Implementation Plan 
initially included procurement of 45 cutter-based Vertical Unmanned 
Aerial Vehicles (VUAV) and associated control stations. In the fall of 
2006, the Coast Guard initiated a multiphase VUAV alternatives 
analysis. Phase I, completed in February 2007, recommended against 
proceeding with the VUAV effort because of developmental and cost 
concerns. Phase II, completed in August 2007, concluded that small, 
tactical, cutter-based Unmanned Aerial Systems (UAS) and long-
endurance, land-based UASs might fulfill most of the maritime 
surveillance performance gap if a maritime VUAV were not available. The 
Coast Guard received $3 million in the fiscal year 2009 budget to 
continue to study possible approaches going forward. 

[20] Readiness is the ability to execute mission requirements in 
keeping with Coast Guard standards. 

[21] The American Recovery and Reinvestment Act of 2009, Pub. L. No. 
111-5, 123 Stat. 115 (February 17, 2009) provided funds to the Coast 
Guard's acquisition account to help pay for HEC upgrades. 

[22] Deepwater Vertical Unmanned Aerial Vehicles (VUAV) Path Forward 
Study Group: Phase II Alternatives Analysis Report, United States Coast 
Guard Research and Development Center (August, 2007). 

[23] Configuration management is the process used to understand the 
important components of an asset and to manage any changes to these 
components that might be made over the asset's service life. This 
process includes identifying components that require management, 
controlling changes to these components, and recording changes made to 
components. 

[24] A home port is the port at which a vessel is based. 

[25] Draft is the depth of water needed to float the vessel. The draft 
of the NSC is 22 feet, compared to the 19 foot draft of an HEC. 

[26] At the time Coast Guard contracted for the NSC LRR, it was not an 
MSAM requirement. 

[End of section] 

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U.S. Government Accountability Office: 
441 G Street NW, Room 7125: 
Washington, D.C. 20548: 

Public Affairs: 

Chuck Young, Managing Director, youngc1@gao.gov: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: