Information on U.S. Coast Guard's Decision To Purchase M/V Cowslip Vessel

CED-81-128: Published: Jun 25, 1981. Publicly Released: Jul 9, 1981.

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GAO reviewed a Coast Guard decision to purchase a buoy tender, as opposed to a second vessel that was available for purchase, to replace a Coast Guard vessel which sank. GAO utilized Coast Guard vessel inspection reports and purchase, renovation, and repair cost data in evaluating the relative merits of the two vessels and arriving at the purchase decision.

GAO found no basis to conclude that the purchase decision was improper. However, the Coast Guard relied on its own assessments of the relative conditions of both vessels. These assessments were not verified by a separate Coast Guard in-house assessment or by commercial vessel surveyors. Furthermore, cost comparisons developed by the Coast Guard and used in the purchase decision were based on cost estimates provided by the Coast Guard's Office of Engineering and were not independently verified. Both of the vessels in question had been Coast Guard vessels which the Coast Guard declared excess and transferred to the General Services Administration for disposal. The Coast Guard generally does not purchase used vessels and, therefore, did not have specified procedures for their inspection and purchase. Periodically, however, it determines the overall condition and remaining service life of its vessels. The Coast Guard did not complete the full prescribed inspections on the vessels. The inspection reports described the ship that was purchased as being in substantially better condition than the other ship. In addition, the Coast Guard could provide no detailed supporting worksheets to show how additional costs were determined. The fact that the purchased ship could be activated relatively quickly was a major factor in the purchase decision.

Recommendation for Executive Action

  1. Status: Closed

    Comments: GAO has no information on the actions taken by the agency.

    Recommendation: The Secretary of Transportation should require the Coast Guard, when it purchases used vessels, to complete a second, confirmatory inspection and cost estimate in its vessel assessment and cost estimating process. The assessments could be obtained by the Coast Guard's in-house capability or by a commercial surveyor.

    Agency Affected: Department of Transportation

 

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