United States Coast Guard:

Improvements Needed in Management and Oversight of Rescue System Acquisition

GAO-06-623: Published: May 31, 2006. Publicly Released: May 31, 2006.

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Search and rescue--one of the United States Coast Guard's (USCG) oldest missions and highest priorities--involves minimizing loss of life, injury, and property damage by aiding people and boats in distress. In September 2002, USCG contracted to replace its search and rescue communications system--installed in the 1970s--with a new system known as Rescue 21. However, the acquisition and initial implementation of Rescue 21 has resulted in significant cost overruns and schedule delays. GAO's objectives in reviewing the Rescue 21 program were to (1) assess the reasons for the significant cost overruns and implementation delays; (2) evaluate the viability of the revised cost and schedule estimates; and (3) evaluate the impact of the implementation delays.

Key factors that contributed to Rescue 21 cost overruns and schedule delays were inadequacies in requirements management, project monitoring, risk management, contractor cost and schedule estimation and delivery, and executive-level oversight. Accordingly, the estimated total acquisition cost for Rescue 21 has increased from $250 million in 1999 to $710.5 million in 2005, and the timeline for achieving full operating capability has been delayed from 2006 until 2011. USCG officials agreed that improvements need to be made to the management of the Rescue 21 project, and they are taking steps to address some of these issues. USCG's current acquisition cost estimate of $710.5 million is not viable. Our analysis of contractor performance trends indicates that additional overruns will likely bring the total acquisition cost to $872 million, unless critical changes are made. Additionally, USCG's schedule is uncertain due to on-going contract item renegotiations and pending decisions regarding vessel asset tracking functionality. Finally, further cost increases may result from the variability of costs for tower preparation and construction. To improve its current cost and schedule estimates, USCG plans to complete an integrated baseline review after contract items are renegotiated; however, a date for completing this review has not been established. The delays in deploying Rescue 21 could affect sites awaiting modernization. For example, key functionality, such as improved direction finding and improved coverage, will not be available for a significant period of time, and legacy equipment may fail, requiring costly repairs and upgrades to address coverage gaps and other operational issues.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To more effectively manage the remaining development and deployment of Rescue 21, the Commandant of USCG should ensure that USCG executive-level management oversees the project's progress toward cost and schedule milestones and management of risks.

    Agency Affected: Department of Homeland Security: United States Coast Guard

    Status: Closed - Implemented

    Comments: The House Appropriations subcommittee on Homeland Security and Senate Commerce, Science and Transportation subcommittee on Fisheries and the Coast Guard requested that GAO review the management and effectiveness of the Coast Guard's efforts to modernize its national distress and response system, referred to as Rescue 21. GAO found that executive oversight of the Rescue 21 effort was not adequate and recommended that the Commandant of the Coast Guard ensure that USCG executive-level management oversee the project's progress toward cost and schedule milestones and management of risk. The Coast Guard concurred with this recommendation and has established multiple reviews that involve executive management for both USCG and the Department of Homeland Security (DHS), and that report progress toward the cost and schedule baselines laid out in the DHS Acquisition Program Baseline (APB) of April 2006. These new oversight initiatives include quarterly executive governance meetings and bi-weekly teleconferences between executives at USCG and the Vice President at the prime contractor for Rescue 21 that focus on the achievement of Rescue 21 deployment goals and establishment of a new executive oversight body, including DHS and Coast Guard executives, that meet regularly to discuss Rescue 21 progress. This group met for the first time June 19 and again August 23.

    Recommendation: To more effectively manage the remaining development and deployment of Rescue 21, the Commandant of USCG should ensure that USCG executive-level management establishes a milestone to complete Rescue 21's integrated baseline review, to include all renegotiated contract items.

    Agency Affected: Department of Homeland Security: United States Coast Guard

    Status: Closed - Implemented

    Comments: The House Appropriations subcommittee on Homeland Security and Senate Commerce, Science and Transportation subcommittee on Fisheries and the Coast Guard requested that GAO review the management and effectiveness of the Coast Guard's efforts to modernize its national distress and response system, referred to as Rescue 21. GAO found that a significant number of items in the acquisition would have to be renegotiated with the prime contractor as a result of delays in the development and deployment of the new system. The current cost estimate did not take these items into account. Therefore, GAO recommended that the Coast Guard establish a milestone for completing an Integrated Baseline Review (IBR) to include all renegotiated Rescue 21 items. By May of 2008, the IBR was completed for all Full Rate Production sites and cost and schedule revisions resulting from the IBR were approved by DHS.

    Recommendation: To more effectively manage the remaining development and deployment of Rescue 21, the Commandant of USCG should ensure that USCG executive-level management uses the results of this baseline review to complete a revised cost and schedule estimate.

    Agency Affected: Department of Homeland Security: United States Coast Guard

    Status: Closed - Implemented

    Comments: The House Appropriations subcommittee on Homeland Security and Senate Commerce, Science and Transportation subcommittee on Fisheries and the Coast Guard requested that GAO review the management and effectiveness of the Coast Guard's efforts to modernize its national distress and response system, referred to as Rescue 21. GAO found that a significant number of items in the acquisition would have to be renegotiated with the prime contractor as a result of delays in the development and deployment of the new system. The current cost estimate did not take these items into account. Therefore, GAO recommended that, once the IBR is completed, the Coast Guard use the information from the IBR to complete a revised cost and schedule estimate. The Coast Guard concurred with this recommendation and completed IBRs for all Full Rate Production sites. As a result of this, it submitted a revised cost and schedule estimate (acquisition program baseline) to the Department, which approved the new estimate.

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