See  figure 1 for the Coast Guard’s active icebreakers. If the lead ship is  delivered later than planned in this scenario, the potential gap could be  more than 3 years. The  corresponding acquisition decision memorandum was signed in March  2018. The Coast Guard Did Not Assess Design Maturity or Technology Risks Prior to Setting the Polar Icebreaker Program’s Baselines

The Coast Guard set the HPIB’s acquisition program baselines at ADE  2A/2B without conducting a preliminary design review to assess the  design maturity of the ship or a technology readiness assessment to  determine the maturity of key technologies. As a result, the Coast Guard will be committing resources to the  HPIB program without key elements of a sound business case, increasing  the risk that the program will exceed its planned costs and schedule. The Coast Guard has yet to conduct a preliminary design review for the  HPIB program because DHS’s current acquisition policy does not require  programs to do so until after ADE 2A/2B. Holding a preliminary design  review after ADE 2A/2B is consistent with DHS policy. DHS concurred with  this recommendation and stated that it planned to initiate a study to  assess how to better align its processes for technical reviews and  acquisition decisions. As a result, the shipbuilder’s design  will be different from the indicative design. By not conducting a technology readiness assessment and identifying,  assessing, and maturing its critical technologies prior to setting the  HPIB’s program baselines and prior to awarding the detail design  contract, the Coast Guard is underrepresenting the program’s technical  risks and understating its cost, schedule, and performance risks. We also found the HPIB  schedule was not informed by a realistic assessment of the work  necessary to construct the ship. Rather, the schedule was driven by the  potential gap in icebreaking capabilities once the Coast Guard’s only  operating HPIB reaches the end of its service life. Polar Icebreaker Program’s Cost Estimate Substantially Met Best Practices but Is Not Fully Reliable Because It Does Not Include Full Range of Possible Costs

We found that the lifecycle cost estimate used to inform the HPIB  program’s baselines substantially adheres to most cost estimating best  practices; however, the estimate is not fully reliable. The cost estimate  only partially met best practices for being credible primarily because it did  not quantify the range of possible costs over the entire life of the program. Comprehensive. Accurate. According to the request  for proposals, the winning shipbuilder will examine schedule risks while  preparing an integrated schedule. The National Defense Authorization Act for Fiscal Year 2018 authorized  procurement of one Coast Guard heavy polar icebreaker vessel. By setting the program’s baselines prior to obtaining sufficient  knowledge in the design, technologies, cost, and schedule of the HPIB,  DHS, the Coast Guard, and the Navy are not establishing a sound  business case for investing in the HPIB nor putting the program in a  position to succeed. Recommendations for Executive Action

We are making six recommendations total to the Coast Guard, DHS, and  the Navy:
The Commandant of the Coast Guard should direct the polar  icebreaker program to conduct a technology readiness assessment in  accordance with best practices for evaluating technology readiness,  identify critical technologies, and develop a plan to mature any  technologies not designated to be at least TRL 7 before detail design  of the lead ship begins. (Recommendation 1)
The Commandant of the Coast Guard, in collaboration with the  Secretary of the Navy, should direct the polar icebreaker program and  NAVSEA 05C to update the HPIB cost estimate in accordance with  best practices for cost estimation, including (1) developing risk bounds  for all phases of the program lifecycle, and on the basis of these risk  bounds, conduct risk and uncertainty analysis, as well as sensitivity  analysis, on all phases of the program lifecycle, and (2) reconciling  the results with an updated independent cost estimate based on the  same technical baseline before the option for construction of the lead  ship is awarded. We  obtained data on these programs’ construction schedules from program  documentation, such as acquisition program baselines, Navy selected  acquisition reports, and Navy and Coast Guard budget documentation.
Why GAO Did This Study

To maintain heavy polar icebreaking capability, the Coast Guard and the Navy are collaborating to acquire up to three new heavy polar icebreakers through an integrated program office. The Navy plans to award a contract in 2019. GAO has found that before committing resources, successful acquisition programs begin with sound business cases, which include plans for a stable design, mature technologies, a reliable cost estimate, and a realistic schedule.
Section 122 of the National Defense Authorization Act for Fiscal Year 2018 included a provision for GAO to assess issues related to the acquisition of the icebreaker vessels. In addition, GAO was asked to review the heavy polar icebreaker program's acquisition risks. This report examines, among other objectives, the extent to which the program is facing risks to achieving its goals, particularly in the areas of design maturity, technology readiness, cost, and schedule. GAO reviewed Coast Guard and Navy program documents, analyzed Coast Guard and Navy data, and interviewed knowledgeable officials.

What GAO Found

The Coast Guard—a component of the Department of Homeland Security (DHS)—did not have a sound business case in March 2018, when it established the cost, schedule, and performance baselines for its heavy polar icebreaker acquisition program, because of risks in four key areas:
Design. The Coast Guard set program baselines before conducting a preliminary design review, which puts the program at risk of having an unstable design, thereby increasing the program's cost and schedule risks. While setting baselines without a preliminary design review is consistent with DHS's current acquisition policy, it is inconsistent with acquisition best practices. Based on GAO's prior recommendation, DHS is currently evaluating its policy to better align technical reviews and acquisition decisions.
Technology. The Coast Guard intends to use proven technologies for the program, but did not conduct a technology readiness assessment to determine the maturity of key technologies prior to setting baselines. Coast Guard officials indicated such an assessment was not necessary because the technologies the program plans to employ have been proven on other icebreaker ships. However, according to best practices, such technologies can still pose risks when applied to a different program or operational environment, as in this case. Without such an assessment, the program's technical risk is underrepresented.
Cost. The lifecycle cost estimate that informed the program's $9.8 billion cost baseline substantially met GAO's best practices for being comprehensive, well-documented, and accurate, but only partially met best practices for being credible. The cost estimate did not quantify the range of possible costs over the entire life of the program. As a result, the cost estimate was not fully reliable and may underestimate the total funding needed for the program.
Schedule. The Coast Guard's planned delivery dates were not informed by a realistic assessment of shipbuilding activities, but rather driven by the potential gap in icebreaking capabilities once the Coast Guard's only operating heavy polar icebreaker—the Polar Star —reaches the end of its service life (see figure).
GAO's analysis of selected lead ships for other shipbuilding programs found the icebreaker program's estimated construction time of 3 years is optimistic. As a result, the Coast Guard is at risk of not delivering the icebreakers when promised and the potential gap in icebreaking capabilities could widen.

What GAO Recommends

GAO is making six recommendations to the Coast Guard, DHS, and the Navy. Among other things, GAO recommends that the program conduct a technology readiness assessment, re-evaluate its cost estimate and develop a schedule according to best practices, and update program baselines following a preliminary design review. DHS concurred with all six of GAO's recommendations.