National Security Cutter:

Enhanced Oversight Needed to Ensure Problems Discovered during Testing and Operations Are Addressed

GAO-16-148: Published: Jan 12, 2016. Publicly Released: Jan 12, 2016.

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What GAO Found

The U.S. Navy, the Coast Guard's independent test agent, completed initial testing for the National Security Cutter (NSC) in April 2014 and rated the NSC as operationally effective and suitable. Still, testing revealed 10 major deficiencies (some are shown in figure). Initial testing is an event designed to verify performance of critical systems to ensure assets are capable of meeting mission requirements. The event tests critical operational issues and key performance parameters. The NSC fully met 12 of 19 key performance parameters. Tests of one key performance parameter, as well as other critical systems, were deferred to follow-on testing. The Coast Guard and the U.S. Navy disagree on the NSC's requirements for cutter boat operations. Without clear requirements the Navy and Coast Guard will not have a basis for determining actions to resolve any performance issues. Coast Guard officials acknowledged that clarifying these requirements would be beneficial.

The Coast Guard plans to begin follow-on testing in fall 2016. It must submit corrective action plans to the U.S. Navy to close any deficiencies. According to Coast Guard documentation, it may choose not to correct all deficiencies due to the cost of changes. Department of Homeland Security (DHS) acquisition guidance does not specify the timing of follow-on testing or the actions to be taken in response to the findings. Without a definite time frame DHS risks encountering the same problems as the NSC program experienced with future acquisitions and fielding assets without knowing the full capabilities.

During operations, the NSC has experienced performance issues that were not identified during initial testing, and the Coast Guard has planned design changes to some of the cutters' equipment (some are shown in figure). However, the Coast Guard has not yet found the causes for problems affecting the NSC's propulsion systems. As a result of these and other equipment failures, the NSC has been operating in a degraded condition in some mission areas. DHS has no plans for additional acquisition review boards for the NSC, which would provide oversight going forward. Continued management-level oversight by DHS would help ensure that problems identified during testing and operations are addressed.

Examples of National Security Cutter Equipment That Have Encountered Problems in Testing or Operations

Examples of National Security Cutter Equipment That Have Encountered Problems in Testing or Operations

Why GAO Did This Study

As part of the decades-long, multi-billion-dollar effort to replace aging Coast Guard vessels, aircraft, and information technologies, the Coast Guard developed the NSC to replace its High Endurance Cutter fleet. The Coast Guard conducted initial testing—a key acquisition event designed to ensure an asset is capable of meeting its mission prior to approving full-rate production—in 2014 after seven of eight planned NSCs had already been placed under contract and three were operational. In June 2014, GAO found that the Coast Guard continues to address design changes required for the NSC fleet that were identified prior to IOT&E.

GAO was asked to review the NSC's initial testing event. This report examines (1) the performance of the NSC and its systems during that test, (2) the Coast Guard's plans for follow-on testing, and (3) the performance of the NSC during regular operations. GAO analyzed NSC requirements and test reports, post operational reports, and Coast Guard and DHS policies. GAO also interviewed officials with the Coast Guard, DHS, and NSC operators.

What GAO Recommends

GAO recommends that DHS ensure that the NSC's cutter boat requirements are clarified, that guidance address the timing of follow-on testing, and that further oversight is conducted as the Coast Guard works to remedy issues revealed in testing and operations. DHS agreed with the recommendations and provided timeframes for actions to address them.

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

Recommendations for Executive Action

  1. Status: Open

    Comments: The Coast Guard requirements office is working with the National Security Cutter program manager to determine the best course of action to address the operational testers concerns with the cutter boat key performance parameters. Once a decision is made the Coast Guard will brief DHS PARM on their plans.

    Recommendation: To address different interpretations of cutter boat requirements, the Commandant of the Coast Guard should direct the NSC program office to clarify the NSC's key performance parameters for the cutter boat operations (specifically the launch and recovery of cutter boats).

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

  2. Status: Closed - Implemented

    Comments: The Department of Homeland Security (DHS) issued an acquisition decision memorandum on April, 15 2016 that directed the Coast Guard to execute follow-on operational test and evaluation (FOT&E) for the National Security Cutter (NSC) in accordance with Management Directive 26-06, which is DHS's test and evaluation guidance. The ADM stated that FOT&E will address the unresolved cybersecurity critical operational issue (COI), evaluate remaining COIs as identified in the Test and Evaluation Master Plan (TEMP), verify the correction of major deficiencies, assess the ability of the NSC to meet the key performance parameters (KPP), and address any Operational Requirement Document clarifications or updates. Following FOT&E the operational test agent will submit a report no later than March 31, 2019.

    Recommendation: To help ensure that known issues with the program are addressed, the DHS Undersecretary for Management should, with respect to the NSC, specify the activities to be completed for Follow-on Operational Testing and Evaluation (FOT&E) to be considered concluded for the NSC, such as when the Coast Guard has addressed the specific actions from the October 2014 Acquisition Decision Memo.

    Agency Affected: Department of Homeland Security: Directorate of Management: Office of the Under Secretary

  3. Status: Closed - Implemented

    Comments: The Department of Homeland Security (DHS) issued an acquisition decision memorandum (ADM) on April 15, 2016 to the National Security Cutter (NSC) program that directed the Director, Operational Test and Evaluation (DOT&E) to issue a Letter of Assessment (LOA) following Follow-on Operational Test and Evaluation (FOT&E). If the FOT&E results depict no outstanding issues, then the ADM action item will be considered closed. If the FOT&E results depict outstanding issues, then the NSC program shall prepare a plan for addressing the outstanding FOT&E issues. The Coast Guard will present the plan to the Acquisition Review Board for consideration and guidance. The closure of this action by either a Letter of Assessment that determines no outstanding issues, or by the Coast Guard presentation to the Acquisition Review Board of the plan to address outstanding FOT&E issues, is due no later than June 30, 2019. The ADM also directed the Coast Guard to conduct a comprehensive root cause analysis of the NSC's propulsion system issues such as high engine temperatures and cracked cylinder heads, as well as the cause of overheated generator bearings that have occurred since NSC deployment. The studies shall determine the operational impact to Coast Guard missions due to asset availability as a result of the issues, and detail potential solutions to these issues, as well as the cost and schedule for implementing the solutions. The Coast Guard shall present to the Acquisition Review Board the results of the propulsion system studies as well as a plan to address the propulsion system issues. This action is due no later than December 31, 2017.

    Recommendation: To help ensure that known issues with the program are addressed, the DHS Undersecretary for Management should, with respect to the NSC, conduct one or more acquisition review boards to provide oversight and specify any further actions the NSC program should take (a) at the conclusion of FOT&E and (b) at the conclusion of the Coast Guard's studies related to the propulsion systems. In lieu of an acquisition review board, an acquisition decision memo documenting that no further action is required for either event, if that is the case, may be suitable.

    Agency Affected: Department of Homeland Security: Directorate of Management: Office of the Under Secretary

  4. Status: Open

    Comments: The Department of Homeland Security (DHS) issued an update to its Acquisition Management Instruction on March 9, 2016. This update included direction for Follow-on Operational Test and Evaluation (FOT&E) stating that if FOT&E is required it should be documented in a program's Acquisition Decision Event 3 memorandum along with any conditions that need to be established for FOT&E. A similar update is expected in DHS's test and evaluation guidance (26-06).

    Recommendation: As DHS updates its guidance on test and evaluation, to help ensure that future DHS acquisitions resolve issues from testing in a timely manner, the DHS Undersecretary for Management should require that the updated guidance establish factors to be considered when planning for FOT&E, including when test events will be concluded.

    Agency Affected: Department of Homeland Security: Directorate of Management: Office of the Under Secretary

  5. Status: Open

    Comments: In providing comments on this report, the agency concurred with this recommendation, but has not yet taken any actions necessary to implement it.

    Recommendation: As DHS updates its guidance on test and evaluation, to help ensure that future DHS acquisitions resolve issues from testing in a timely manner, the DHS Undersecretary for Management should require that the updated guidance require that a date be established and an acquisition review board held, if necessary, to provide oversight and specify any further actions programs should take following FOT&E.

    Agency Affected: Department of Homeland Security: Directorate of Management: Office of the Under Secretary

 

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