Coast Guard:

Budget Challenges for 2001 and Beyond

T-RCED-00-103: Published: Mar 15, 2000. Publicly Released: Mar 15, 2000.

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Pursuant to a congressional request, GAO discussed the challenges that the Coast Guard faces in its fiscal year 2001 and future budget requests, focusing on: (1) the Coast Guard's progress in justifying and managing its Deepwater Capability Replacement Project; and (2) opportunities for improving the Coast Guard's operating efficiencies.

GAO noted that: (1) GAO's prior report on the Deepwater project questioned its justification and affordability; (2) the Coast Guard is addressing many of GAO's concerns regarding the justification for the project by gathering additional data on the condition of its existing ships and aircraft; (3) however, the Coast Guard plans to request significant funds before the planning phase of the project is completed and without having other key issues resolved; (4) the Coast Guard will ask Congress to approve funding for the program before it has developed and proven the effectiveness of new technologies, such as the development of software used in communications equipment, and received assurance that the contractor can successfully produce a product on time and at cost; (5) experience has shown that when projects are undertaken before major uncertainties like these are resolved, cost, schedule, and performance risks increase; (6) how the Coast Guard manages risks in the acquisition process is critical to the success of the program; (7) the Coast Guard has opportunities to improve the efficiency and cost-effectiveness of its operations; (8) past studies by GAO and others have recommended various cost-cutting measures; (9) the Coast Guard has not taken action on many of these recommendations, although it is working on systems to improve the management of its spare parts inventories; (10) GAO identified another area that would save money for the federal government, although not have a major effect on the Coast Guard's budget; (11) it involved the potential conversion of commissioned officer positions in administrative and support positions to civilian positions; and (12) the Coast Guard has agreed to examine whether conversions of the military officer positions that GAO identified are possible.

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