	The Coast Guard Develops Annual 5- year CIPs but Needs to Complete Long- Term Planning Document

		Previous 5-year CIPs’ Funding Projections Have Not Matched Annual Budget Requests

Since 2012, the Coast Guard has been legislatively required to submit a  CIP annually to certain Congressional committees, alongside its budget  proposal, that includes, among other things, projected funding for capital  assets in such areas as acquisition, construction, and improvements  needed for the upcoming 5 fiscal years. Furthering the affordability concern, the Offshore Patrol Cutter  procurement, for which planned acquisition costs are estimated at $12.1  billion through final delivery in 2034—making it the most expensive Coast  Guard acquisition program in its recapitalization effort—will create  additional strain on the Coast Guard’s acquisition budget. According to  the Commandant of the Coast Guard, the Offshore Patrol Cutter is its top  priority. Beginning in September 2018, the Offshore Patrol Cutter will absorb  roughly one half to about two-thirds of the Coast Guard’s annual  acquisition funding requests until 2032 if historic funding request levels  over the past 4 years continue to remain about the same. The Coast Guard is Developing a Long-Term Acquisition Planning Document, but Its Completion Date and Contents are Unknown

In 2014, we recommended that the Coast Guard develop a 20-year fleet  modernization plan that would identify all acquisitions necessary for  maintaining at least its current level of service and the fiscal resources  necessary to build these assets. DHS concurred with this  recommendation and the Coast Guard is in the process of developing this  document to guide and manage the affordability of its acquisition portfolio. Coast Guard officials report an  ongoing effort to produce a 20-year plan—which the Coast Guard refers  to as a 20-year CIP—but has not articulated a timeframe for when this  plan will be completed or what information it will include. Potential Risks Exist in the Coast Guard’s Accelerated Acquisition Schedule for Heavy Icebreakers and Coast Guard Plans to Mitigate Potential Icebreaking Capability Gap

		Coast Guard Has Initiated a New Acquisition for Heavy Icebreakers, but Accelerated Acquisition Schedule Poses Potential Risk

The Coast Guard initiated the acquisition of a new fleet of heavy polar  icebreakers in 2013, but now faces potential schedule and cost risks in  implementing an accelerated acquisition approach. In June 2016, we  reported that the Coast Guard’s heavy icebreaking fleet had been  operating at a reduced capacity after one of its ships, the Polar Sea,  suffered a catastrophic engine failure in 2010, rendering it inactive. As a  result, the Coast Guard reports that it has not been able to provide year- round access to both the Arctic and Antarctic regions. Further, the Navy and Coast Guard have established a preliminary cost  estimate of $1.15 billion for the lead heavy polar icebreaker, though they  are working to reduce this estimate. To meet its accelerated schedule, the program will need to be  fully funded in fiscal year 2019. This is an issue we will pursue in our ongoing  work on the acquisition of the polar icebreaker. Instead, Coast Guard officials stated  they are planning to conduct a limited service life extension of the Polar  Star to address key components and keep it operational until fiscal year  2025, when a second new heavy polar icebreaker is expected to be  delivered. According to officials, the Coast Guard is currently conducting  an assessment of the Polar Star to determine what systems would need  to be overhauled and replaced to meet this goal. An official cost estimate  for this effort has not been completed yet, but the fiscal year 2017 CIP  includes a total of roughly $75 million towards this effort in fiscal years  2019 through 2021. In conclusion, as the Coast Guard continues its recapitalization effort, it is  important that it plans for the affordability of its future portfolio so that it  can minimize the capability gaps that can occur when legacy assets  reach the end of their service lives before new assets become  operational.
Why GAO Did This Study

In order to meet its missions of maritime safety, security, and environmental stewardship, the Coast Guard, a component within the Department of Homeland Security (DHS), employs a variety of assets, several of which are approaching the end of their intended service lives. As part of its efforts to modernize its surface and air assets (known as recapitalization), the Coast Guard has begun acquiring new vessels and air assets. Concerns surrounding the affordability of this effort remain as the Coast Guard continues to pursue new acquisitions such as the polar icebreaker, while also acquiring the Offshore Patrol Cutter—which is estimated to cost $12.1 billion through 2032.
This statement addresses the (1) extent that the Coast Guard develops planning tools to guide its acquisition portfolio, and (2) potential risks the Coast Guard faces in its polar icebreaker acquisition. This statement is based on GAO's extensive body of published and ongoing work examining the Coast Guard's acquisition efforts over several years.

What GAO Found

In June 2014, GAO found that the Coast Guard lacked long-term planning to guide the affordability of its acquisition portfolio and recommended the development of a 20-year fleet modernization plan to identify all acquisitions necessary for maintaining at least its current level of service and the fiscal resources necessary to build and modernize its planned surface and aviation assets. Coast Guard officials stated that they are developing a 20-year Capital Investment Plan (CIP), but the timeframe for completion is unknown. The Coast Guard does, however, submit a 5-year CIP annually to Congress that projects acquisition funding needs for the upcoming 5 years. GAO found the CIPs do not match budget realities in that tradeoffs are not included. In the 20-year CIP, GAO would expect to see all acquisitions needed to maintain current service levels and the fiscal resources to build the identified assets as well as tradeoffs in light of funding constraints.
As GAO reported in June 2016, the Coast Guard's heavy icebreaker fleet was operating at a reduced capacity with only one heavy polar icebreaker in service, resulting in limited access to both the Arctic and Antarctic regions year-round. The Coast Guard's only active heavy icebreaker, the Polar Star , is approaching the end of its expected service life, and the Coast Guard plans to implement a limited service life extension to keep it operational until the new icebreaker is available. An official cost estimate has not been completed, but the Coast Guard estimates this extension will cost roughly $75 million.
Consequently, the Coast Guard expedited its acquisition of new heavy icebreakers with delivery of the first polar icebreaker scheduled in 2023. This delivery schedule poses potential risk as the required acquisition documents may not be completed in time to award the contract in 2019, as currently scheduled. Further, in order to meet this accelerated schedule, the first polar icebreaker would need to be fully funded in fiscal year 2019 with a preliminary cost estimate of $1.15 billion, alongside the Offshore Patrol Cutter acquisition. The Coast Guard has not articulated how it will prioritize its acquisition needs given its Offshore Patrol Cutter is expected to absorb half to two-thirds of its annual acquisition funding requests—based on recent funding history—starting in 2018.

What GAO Recommends

GAO is not making recommendations in this statement but has made them to the Coast Guard and DHS in the past regarding recapitalization, including that the Coast Guard develop a 20-year fleet modernization plan that identifies all acquisitions and the fiscal resources needed to acquire them. DHS agreed with this recommendation.