Coast Guard Acquisitions: Actions Needed to Address Longstanding Portfolio Management Challenges

GAO-18-454 Published: Jul 24, 2018. Publicly Released: Jul 24, 2018.
Jump To:
Fast Facts

The Coast Guard is spending billions of dollars to replace aging ships, aircraft, and other assets.

Because the Coast Guard has managed its acquisitions with a short-term, asset-by-asset focus, it has at times lost sight of the balance and cost of its overall asset portfolio. For example, some high-priority acquisitions have been delayed.

Also, the Coast Guard continues to operate its fleets for longer than originally planned, placing risk on its ability to accomplish its missions.

We recommended, among other things, that the Coast Guard annually assess the long-term affordability and balance of its acquisition portfolio.

The Offshore Patrol Cutter is the Coast Guard's highest acquisition priority

This is a photo of the Coast Guard's Offshore Patrol Cutter.

This is a photo of the Coast Guard's Offshore Patrol Cutter.

Skip to Highlights

What GAO Found

The Coast Guard, a component within the Department of Homeland Security (DHS), continues to manage its acquisitions through its annual budget process and the 5-year Capital Investment Plan (CIP)—congressionally mandated and used for oversight. This management approach creates constant churn as program baselines must continually re-align with budget realities instead of budgets being formulated to support program baselines. Further, Coast Guard officials said the CIP reflects the highest priorities of the department—such as the Offshore Patrol Cutter, which is the Coast Guard's highest priority—and that trade-off decisions are made as part of the annual budget process. However, the effects of these decisions, such as which acquisitions would take on more risk so others can be prioritized and adequately funded, are not communicated in the CIP to key decision makers, because including such information is not statutorily required. Over the years, this approach has left the Coast Guard with a build up—or bow wave—of near-term unfunded acquisitions, negatively affecting recapitalization efforts and limiting the effectiveness of long-term planning. Including the effects of these trade-offs in the CIP would align with GAO's cost estimating best practices. Until it does so, the Coast Guard limits its ability to manage its acquisition portfolio in the long-term, beyond the time covered in the 5-year CIP.

The Coast Guard's Offshore Patrol Cutter

a  data-cke-saved-name=

In response to a September 2012 GAO recommendation, the Coast Guard updated the Executive Oversight Council's (EOC)—a cross-directorate group that oversees major acquisition programs—charter in 2014 to require annual reviews of the acquisition portfolio collectively. However, EOC officials said that these annual reviews never occurred, and GAO found that the annual review requirement was removed from the charter in 2017. Thus, the Coast Guard is without a senior-level group charged to collectively review and ensure affordability of its acquisition portfolio. The Office of Management and Budget's Capital Programming Guide states that a senior-level executive committee should be responsible for reviewing the agency's entire asset portfolio and for making decisions on the proper composition of assets needed to achieve strategic goals within budget constraints.

Why GAO Did This Study

The Coast Guard spends billions of dollars on its major acquisition programs to meet its missions. GAO's prior work has identified the Coast Guard's reliance on its annual budget process to manage its acquisition portfolio as a challenge.

GAO was asked to review the recapitalization of the Coast Guard's acquisition portfolio. This report assesses, among other topics, the extent to which the Coast Guard has made changes to how it manages its acquisition portfolio.

GAO assessed Coast Guard's major acquisition programs to determine changes since GAO's 2014 portfolio review. GAO analyzed program baselines and interviewed Coast Guard officials. GAO analyzed the CIP for fiscal years 2014 through 2018, and reviewed the EOC's documentation.

Skip to Recommendations


GAO recommends that the annual CIPs reflect acquisition trade-off decisions and their effects, and that the EOC review the overall acquisition portfolio and its affordability annually. DHS concurred with the CIP recommendation. DHS did not concur with the EOC recommendation. It noted that other existing Coast Guard bodies are responsible for evaluating and prioritizing funding. However, DHS stated that the EOC charter will be updated to require it to review the overall acquisition portfolio, including long-term planning. If this long-term planning accounts for budget realities for the acquisition portfolio, GAO believes the intent of the recommendation will be met.

Recommendations for Executive Action

Agency Affected Recommendation Status
United States Coast Guard The Commandant of the Coast Guard should work with Congress to include in the Coast Guard's annual 5-year CIP a discussion of the acquisition programs it prioritized that describes how trade-off decisions made could affect other acquisition programs, such as by delaying recapitalization efforts or needing to conduct Service Life Extension Projects for legacy assets. (Recommendation 1)
The Coast Guard agreed with this recommendation and in August 2019 officials reported that the Coast Guard was working with DHS to include additional information that addresses how trade-off decisions made could affect other major acquisition programs in future CIP reports. In the FY 2021-2025 CIP, the Coast Guard included information in the background section explaining how the it uses the annual budget process to consider trade-offs within existing acquisition programs to ensure the long-term affordability of the acquisition portfolio. The new information included in the background of the CIP outlines a process, however there is no evidence of implementation of that process. Later, in December 2020, Coast Guard officials explained that the CIP might not be the best avenue to show trade-offs since trade-offs are discussed throughout the CIP review process and showing them in the final product would be difficult. The officials explained that the Coast Guard has quarterly acquisition briefings where it could show the trade-offs that are being discussed. GAO received 2 quarterly acquisition briefings in late March 2021, but neither briefing contained a discussion of trade-offs considered.
United States Coast Guard The Commandant of the Coast Guard should require the Executive Oversight Council, in its role to facilitate a balanced and affordable acquisition portfolio, to annually review the acquisition portfolio collectively, specifically for long-term affordability. (Recommendation 2)
The Coast Guard disagreed with this recommendation stating that other bodies within the Coast Guard--such as the Investment Board, Deputies Council, and Investment Review Board--are responsible for making decisions regarding out-year funding, while the Executive Oversight Council works outside of the annual budget process. DHS also stated that, to meet the spirit of our recommendation, the Coast Guard will update the Executive Oversight Council's charter to require a review of the collective acquisition portfolio, specifically evaluating long-term planning. We believe that updating the Executive Oversight Council's charter to include long-term-planning is a positive step. However, we continue to believe that in addition to long-term planning, the Executive Oversight Council should include the major acquisition portfolio's budget realities faced by the Coast Guard in its reviews, or long-term affordability. If the planning accounts for long-term funding considerations to achieve the Coast Guard's acquisition goals and objectives, we believe the intent of our recommendation would be met. The Coast Guard expected to complete the update of the EOC charter by by late summer 2020, but as of November 2020 the EOC charter has not been updated. In December 2020 Coast Guard officials explained that the members of the SIT and EOC are largely the same. So by making updates to the SIT's charter to require it to review the portfolio, the Coast Guard is directing the appropriate officials to discuss trade-offs of the portfolio. We responded to the Coast Guard in March 2021 and told the Coast Guard that while we would still like to see how the Coast Guard is considering the long-term affordability of the portfolio, we also realize that GAO has been prevented from receiving longer term outlooks beyond the 5 year window of the CIP. Given that, if the Coast Guard can show GAO that trade-offs are being documented on a regularly basis then it would place the Coast Guard on a good path towards closing the recommendation.

Full Report

GAO Contacts