Skip to main content

Coast Guard Acquisitions: Offshore Patrol Cutter Program Needs to Mature Technology and Design [Reissued with revisions on Aug. 1, 2023]

GAO-23-105805 Published: Jun 20, 2023. Publicly Released: Jun 20, 2023.
Jump To:

Fast Facts

The U.S. Coast Guard plans to spend over $12 billion to acquire 25 Offshore Patrol Cutters—ships that conduct search and rescue operations, among other missions. But the Coast Guard continues taking a risky approach of constructing these ships before the design and technology are ready.

For example, the Coast Guard doesn't have a plan to ensure that the ship's critical technology—a crane that suspends, lowers, and retrieves the cutter's small boats—is fully developed before the ship is constructed. Consequently, the Coast Guard risks having to make substantial repairs later.

We recommended that the Coast Guard address this issue.

An Offshore Patrol Cutter under Construction

A Coast Guard shipin port with cranes and construction equipment

Reissued with Revisions Aug 01, 2023
Revised on August 1, 2023 to reflect shipbuilder’s correct percentage construction completion as of October 2022. Correction is on report page 37.
Skip to Highlights

Highlights

What GAO Found

In October 2020, GAO found that the Offshore Patrol Cutter (OPC) program started construction on the lead ship with an unstable design. In this report, GAO found that the Coast Guard continues its approach of progressing through the technology development, design, and construction phases concurrently, which increases risk and is contrary to leading practices.

Offshore Patrol Cutter Program Continues Risky Approach of Overlapping Acquisition Phases

Offshore Patrol Cutter Program Continues Risky Approach of Overlapping Acquisition Phases

The Coast Guard has not developed a plan to mature the stage 1 OPC's critical technology—the davit (a crane that deploys and retrieves a cutter's small boats). Nor has the program integrated and demonstrated the davit in a realistic environment. Without a plan to mature the davit and demonstrate it before delivery, the Coast Guard risks further delays and costly rework.

In addition, the Coast Guard has not aligned its shipbuilding acquisition policy with shipbuilding leading practices. Specifically, the Coast Guard does not require completion of basic and functional design and maturity of all critical technologies, as GAO previously recommended. It also does not require completion of the design of distributive systems—systems that affect multiple zones of the ship—prior to construction of the lead ship. Significant rework can occur late in construction, resulting in subsequent cost growth and delays, if design of distributive systems are not completed prior to construction.

The OPC's total acquisition cost estimate increased from $12.5 billion to $17.6 billion between 2012 and 2022. The program attributes the 40 percent increase to many factors, including restructuring the stage 1 contract and recompeting the stage 2 requirement in response to a disruption caused by Hurricane Michael, and increased infrastructure costs for homeports and facilities, among other things. In addition, the program incurred a 1.5-year delay in the delivery of the first four OPCs due to Hurricane Michael and issues related to manufacturing the cutter's propulsion system. GAO also found indicators that the shipbuilder's significant level of complex, uncompleted work may lead to further delays.

Further, the Coast Guard faces an operational gap between the OPCs and the Medium Endurance Cutters (MEC), which the OPCs are replacing. This gap could worsen should the OPC program fall further behind schedule. All 28 MECs have exceeded their design service lives. The Coast Guard started a $1.86 billion acquisition program to extend the service life of six MECs, but the fleet faces risks of failure due to age and obsolescence.

Why GAO Did This Study

The Coast Guard plans to acquire a fleet of 25 OPCs—four ships in stage 1, 11 ships in stage 2, and 10 ships in a later effort—from at least two different shipbuilders. This is the component's highest investment priority. The OPCs will help ensure a variety of missions in offshore waters once the current fleet of aging MECs is decommissioned.

GAO was asked to review the OPC acquisition program's status and the Coast Guard's plans for the MECs. This report examines the extent to which (1) the OPC's design and construction practices are consistent with shipbuilding leading practices, (2) the OPC is meeting cost and schedule goals, and (3) a gap exists between the decommissioning of the MEC fleet and the deployment of the OPCs. GAO analyzed Coast Guard program documents and data, and interviewed Coast Guard officials and shipbuilder representatives.



Reissued with revisions on Aug. 1, 2023

Revised on August 1, 2023 to reflect shipbuilder’s correct percentage construction completion as of October 2022. Correction is on report page 37.

Recommendations

GAO continues to believe that its October 2020 recommendations have merit. GAO is making five new recommendations to the Coast Guard, including that it develop a technology maturation plan for the davit; demonstrate the davit in a realistic environment; and update its acquisition policy to require programs to complete routing of distributive systems as part of functional design prior to lead ship construction. DHS concurred with three of five recommendations, and did not concur with two. GAO has raised to the attention of Congress two matters for its consideration, as discussed in the report.

Matter for Congressional Consideration

Matter Status Comments
Congress should consider requiring the Coast Guard to update its acquisition policy to establish that all shipbuilding programs should mature critical technologies—including those that are developmental or that are novel in application or form, fit, and function—to a TRL 7 prior to a program's contract award for detail design and construction. This means that programs should successfully demonstrate the integrated prototypes of all critical technologies identified by the program or shipbuilder in a realistic environment.
Open
As of April 2024, Congress has not enacted legislation in response to this matter. We will continue to monitor Congress' efforts.
Congress should consider requiring the Coast Guard to update its acquisition policy to establish that all shipbuilding programs should achieve 100 percent completion of basic and functional design prior to the start of lead ship construction. This should include completing the routing of all distributive systems that transit electricity, water, HVAC, and other utilities, as part of functional design prior to the start of lead ship construction.
Open
As of April 2024, Congress has not enacted legislation in response to this matter. We will continue to monitor Congress' efforts.

Recommendations for Executive Action

Agency Affected Recommendation Status
United States Coast Guard The Commandant of the Coast Guard should ensure that OPC program officials develop a technology maturation plan for the davit prior to builder's trials. This plan should identify potential courses of action to address davit technical immaturity, including assessing technology alternatives should the current davit continue to face development challenges, and a date by which the Coast Guard will make a go/no-go decision to pursue such a technology alternative. (Recommendation 1)
Open
In October 2023, the Coast Guard provided a plan of action developed with the shipbuilder from July 2023. However, the plan of action did not detail specific steps toward maturity to a technology readiness level of 7, nor did the Coast Guard provide an assessment of technology alternatives and an off-ramp option. As of August 2023, the program told us that the davit design continues to have issues with rack and pinion mechanism and the electrical cabinet.
United States Coast Guard The Commandant of the Coast Guard should ensure that OPC program officials test an integrated prototype of the davit in a realistic environment prior to stage 1 builder's trials. (Recommendation 2)
Open
In December 2023, the Coast Guard stated that the davit's first article test, which will expose the davit to realistic forces and loads to simulate sea state 5, will be conducted starting in February 2024. In April 2024, the Coast Guard said they began first article testing in March 2024. The program said that the ship design team would update the technology readiness level after the testing is complete. If the Coast Guard adheres to this plan, the first article test will occur before builder's trials, now delayed until March 2025, which is consistent with our recommendation. We are keeping this recommendation open until these events occur.
United States Coast Guard The Commandant of the Coast Guard should ensure that the OPC stage 2 program follows shipbuilding leading practices by successfully demonstrating integrated prototypes of all critical technologies identified by the program or shipbuilder in a realistic environment no later than preliminary design review. (Recommendation 3)
Closed – No Longer Valid
In September 2023, the Coast Guard completed the stage 2 preliminary design review with the shipbuilder without demonstrating the maturity of the davit. As such, we closed this recommendation since it was not implemented.
United States Coast Guard The Commandant of the Coast Guard should ensure that the Coast Guard Component Acquisition Executive, prior to any contract awards for new shipbuilding programs, updates its acquisition policy to establish that all shipbuilding programs must complete the routing and design of major portions of all distributive systems that transit electricity, water, HVAC, and other utilities, as part of functional design prior to the start of lead ship construction. (Recommendation 4)
Closed – Implemented
In August 2023, the Coast Guard updated its standard operating procedure related to design maturity to better align with shipbuilding leading practices, including requiring shipbuilding programs to complete major portions of all distributive systems as part of functional design prior to the start of construction. This revision meets the intent of our recommendation.
United States Coast Guard
Priority Rec.
The Commandant of the Coast Guard should ensure that the OPC stage 2 program achieves a sufficiently stable design prior to the start of lead ship construction. In line with shipbuilding leading practices, sufficiently stable design includes 100 percent completion of basic and functional design, including routing of major distributive systems and transitive components that effect multiple zones of the ship. (Recommendation 5)
Open
The Coast Guard did not concur with this recommendation, stating that the design would be sufficiently stable but not 100 percent complete basic and functional design. We stand by this recommendation as it aligns with our leading practices in shipbuilding and a statutory requirement for Navy programs. In December 2023, the Coast Guard said that the critical design review and the production readiness review, which are conducted prior to the start of production, are scheduled for March and May 2024, respectively. As of February 2024, 70 percent of the functional design drawings were complete. We will continue to monitor the program's progress toward design completion.

Full Report

GAO Contacts

Media Inquiries

Sarah Kaczmarek
Managing Director
Office of Public Affairs

Public Inquiries

Topics

Acquisition costsAcquisition policyAcquisition programsBest practicesConstructionContractor performanceCost estimatesCritical technologiesHomeland securityManufacturingNational defenseNavy shipsSchedule slippagesShipbuildingShips