Coast Guard Acquisitions:

Better Information on Performance and Funding Needed to Address Shortfalls

GAO-14-450: Published: Jun 5, 2014. Publicly Released: Jun 18, 2014.

Additional Materials:

Contact:

Michele Mackin
(202) 512-4841
mackinm@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

The selected Coast Guard assets that GAO reviewed are generally demonstrating improved performance—according to Coast Guard operators—but GAO found that they have yet to meet all key requirements. Specifically, two assets, the HC-144 patrol aircraft and Fast Response Cutter, did not meet all key requirements during operational testing before being approved for full-rate production, and Department of Homeland Security (DHS) and Coast Guard guidance do not clearly specify when this level of performance should be achieved. Additionally, the Coast Guard changed its testing strategy for the Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) system and, as a result, is no longer planning to test the system's key requirements. Completing operational testing for the C4ISR system would provide the Coast Guard with the knowledge of whether this asset meets requirements.

As acquisition program costs increase across the portfolio, consuming significant amounts of funding, the Coast Guard is farther from fielding its planned fleet today than it was in 2009, in terms of the money needed to finish these programs. In 2009, GAO found that the Coast Guard needed $18.2 billion to finish its 2007 baseline, but now needs $20.7 billion to finish these assets.

The Total Cost of and Cost to Complete the Coast Guard's Original 2007 Baseline in 2009 and 2014 The Total Cost of and Cost to Complete the Coast Guard's Original 2007 Baseline in 2009 and 2014 img  data-cke-saved-src=

To inform Congress of its budget plans, the Coast Guard uses a statutorily required 5-year Capital Investment Plan, but the law does not require the Coast Guard to report the effects of actual funding levels on individual projects and, thus, it has not done so. For example, the Coast Guard has received less funding than planned in its annual budgets, but has not reflected the effects of this reduced funding in terms of increased cost or schedule for certain projects. Without complete information, Congress cannot know the full cost of the portfolio.

The Coast Guard has repeatedly delayed and reduced its capability through its annual budget process and, therefore, it does not know the extent to which it will meet mission needs and achieve desired results. This is because the Coast Guard does not have a long-term fleet modernization plan that identifies all acquisitions needed to meet mission needs over the next two decades within available resources. Without such a plan, the Coast Guard cannot know the extent to which its assets are affordable and whether it can maintain service levels and meet mission needs.

Why GAO Did This Study

The Coast Guard is managing a multi-billion dollar effort to modernize aging assets, including ships, aircraft, and information technology to provide new capabilities to conduct missions ranging from marine safety to defense readiness. GAO has reviewed the Coast Guard's acquisitions since 2001 and has found it faces challenges managing its portfolio. In 2007, the Coast Guard established a cost baseline of $24.2 billion for 13 assets. GAO was asked to examine the Coast Guard's current and planned acquisition portfolio.

This report assesses: (1) operational performance and testing of selected assets; (2) the current cost of the Coast Guard's portfolio and funding plans; and (3) the extent to which the Coast Guard is experiencing capability gaps, if any, given known affordability issues. To conduct this work, GAO analyzed the operational performance and test reports for all 4 newly fielded assets that the Coast Guard planned to test and the costs and capabilities of its major system acquisition portfolio. GAO also interviewed Coast Guard, DHS, and Navy officials.

What GAO Recommends

Congress should consider requiring the Coast Guard to include additional information in its Capital Investment Plan. In addition, the Secretary of DHS should clarify when minimum performance standards should be achieved, conduct C4ISR testing, and develop a long-term modernization plan. DHS concurred with the recommendations, but its position on developing a long-term plan does not fully address GAO's concerns as discussed in the report.

For more information, contact Michele Mackin at (202) 512-4841 or mackinm@gao.gov.

Matter for Congressional Consideration

  1. Status: Open

    Comments: Thus far no action has been taken on this Matter. We will continue to follow up with relevant congressional committees.

    Matter: To help ensure that it receives accurate information on the full effect of funding decisions on acquisition programs, Congress should consider amending the law that governs the 5-year Capital Investment Plan to require the Coast Guard to submit cost and schedule information that reflects the impact of the annual President's budget request on each acquisition across the portfolio--in addition to the current practice of reporting the cost and schedule estimates in current program baselines.

Recommendations for Executive Action

  1. Status: Open

    Comments: DHS has yet to implement this recommendation. We will continue to follow up on this recommendation through our assessment of selected Department of Homeland Security acquisition programs.

    Recommendation: To ensure that the Coast Guard's C4ISR system meets mission needs, the Commandant of the Coast Guard should assess the operational effectiveness and suitability of the C4ISR system by fully integrating this assessment into other assets' operational test plans or by testing the C4ISR program on its own.

    Agency Affected: Department of Homeland Security: United States Coast Guard

  2. Status: Open

    Comments: Based on this recommendation, Congress has requested that the Coast Guard develop a 20-year plan that identifies all acquisitions needed to maintain the Coast Guard's current level of service and the financial commitment necessary to achieve this plan. The Coast Guard is currently re-assessing its planned fleet and, in doing so, is working toward completing a 20-year plan as recommended. Coast Guard officials stated that they are working toward submitting such a plan in conjunction with the fiscal year 2018 President's Budget Request.

    Recommendation: To help the Coast Guard improve the long-term outlook of its portfolio, the Commandant of the Coast Guard should develop a 20-year fleet modernization plan that identifies all acquisitions needed to maintain the current level of service and the fiscal resources necessary to build the identified assets. The plan should also consider trade-offs if the fiscal resources needed to execute the plan are not consistent with annual budgets.

    Agency Affected: Department of Homeland Security: United States Coast Guard

  3. Status: Closed - Implemented

    Comments: In May 2015, the Coast Guard issued an update to their Major Systems Acquisition Manual policy that clarifies that a full-rate production decision is made through an accumulation of program knowledge using results of analyses, inspection, demonstrations, and testing during development and initial production, culminating in operational test and evaluation using production systems in realistic operating environments.

    Recommendation: To ensure that Congress and other decision makers are properly informed regarding the status of programs, the Secretary of Homeland Security and the Commandant of the Coast Guard should revise their acquisition guidance by specifying when minimum performance standards should be met, such as prior to entering into full-rate production.

    Agency Affected: Department of Homeland Security

  4. Status: Closed - Implemented

    Comments: In May 2015, the Coast Guard issued an update to their Major Systems Acquisition Manual policy that clarifies that a full-rate production decision is made through an accumulation of program knowledge using results of analyses, inspection, demonstrations, and testing during development and initial production, culminating in operational test and evaluation using production systems in realistic operating environments.

    Recommendation: To ensure that Congress and other decision makers are properly informed regarding the status of programs, the Secretary of Homeland Security and the Commandant of the Coast Guard should revise their acquisition guidance by specifying when minimum performance standards should be met, such as prior to entering into full-rate production.

    Agency Affected: Department of Homeland Security: United States Coast Guard

  5. Status: Closed - Implemented

    Comments: In May 2015, the Coast Guard issued an update to their Major Systems Acquisition Manual policy that clarifies that a performance breach occurs when a program either determines it cannot physically achieve the stated performance parameter or when the Coast Guard determines the performance parameter is not affordable and will no longer pursue achieving it. The policy states that key performance parameters in the acquisition program baseline are normally expected to be demonstrated and met before a full-rate production decision, and that failure to demonstrate achievement of the performance parameter during initial or subsequent operational testing will become cause for notification of a breach.

    Recommendation: To ensure that Congress and other decision makers are properly informed regarding the status of programs, the Secretary of Homeland Security and the Commandant of the Coast Guard should revise their acquisition guidance by clarifying the performance data that should be used to assess whether or not minimum performance criteria have been met, prior to full-rate production, to determine whether a performance breach has occurred.

    Agency Affected: Department of Homeland Security

  6. Status: Closed - Implemented

    Comments: In May 2015, the Coast Guard issued an update to their Major Systems Acquisition Manual policy that clarifies that a performance breach occurs when a program either determines it cannot physically achieve the stated performance parameter or when the Coast Guard determines the performance parameter is not affordable and will no longer pursue achieving it. The policy states that key performance parameters in the acquisition program baseline are normally expected to be demonstrated and met before a full-rate production decision, and that failure to demonstrate achievement of the performance parameter during initial or subsequent operational testing will become cause for notification of a breach.

    Recommendation: To ensure that Congress and other decision makers are properly informed regarding the status of programs, the Secretary of Homeland Security and the Commandant of the Coast Guard should revise their acquisition guidance by clarifying the performance data that should be used to assess whether or not minimum performance criteria have been met, prior to full-rate production, to determine whether a performance breach has occurred.

    Agency Affected: Department of Homeland Security: United States Coast Guard

 

Explore the full database of GAO's Open Recommendations »

Sep 22, 2016

Sep 21, 2016

Sep 15, 2016

Sep 14, 2016

Sep 13, 2016

Sep 12, 2016

Sep 7, 2016

Looking for more? Browse all our products here