Coast Guard Acquisitions: Better Information on Performance and Funding Needed to Address Shortfalls
Highlights
What GAO Found
The selected Coast Guard assets that GAO reviewed are generally demonstrating improved performance—according to Coast Guard operators—but GAO found that they have yet to meet all key requirements. Specifically, two assets, the HC-144 patrol aircraft and Fast Response Cutter, did not meet all key requirements during operational testing before being approved for full-rate production, and Department of Homeland Security (DHS) and Coast Guard guidance do not clearly specify when this level of performance should be achieved. Additionally, the Coast Guard changed its testing strategy for the Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) system and, as a result, is no longer planning to test the system's key requirements. Completing operational testing for the C4ISR system would provide the Coast Guard with the knowledge of whether this asset meets requirements.
As acquisition program costs increase across the portfolio, consuming significant amounts of funding, the Coast Guard is farther from fielding its planned fleet today than it was in 2009, in terms of the money needed to finish these programs. In 2009, GAO found that the Coast Guard needed $18.2 billion to finish its 2007 baseline, but now needs $20.7 billion to finish these assets.
The Total Cost of and Cost to Complete the Coast Guard's Original 2007 Baseline in 2009 and 2014 
To inform Congress of its budget plans, the Coast Guard uses a statutorily required 5-year Capital Investment Plan, but the law does not require the Coast Guard to report the effects of actual funding levels on individual projects and, thus, it has not done so. For example, the Coast Guard has received less funding than planned in its annual budgets, but has not reflected the effects of this reduced funding in terms of increased cost or schedule for certain projects. Without complete information, Congress cannot know the full cost of the portfolio.
The Coast Guard has repeatedly delayed and reduced its capability through its annual budget process and, therefore, it does not know the extent to which it will meet mission needs and achieve desired results. This is because the Coast Guard does not have a long-term fleet modernization plan that identifies all acquisitions needed to meet mission needs over the next two decades within available resources. Without such a plan, the Coast Guard cannot know the extent to which its assets are affordable and whether it can maintain service levels and meet mission needs.
Why GAO Did This Study
The Coast Guard is managing a multi-billion dollar effort to modernize aging assets, including ships, aircraft, and information technology to provide new capabilities to conduct missions ranging from marine safety to defense readiness. GAO has reviewed the Coast Guard's acquisitions since 2001 and has found it faces challenges managing its portfolio. In 2007, the Coast Guard established a cost baseline of $24.2 billion for 13 assets. GAO was asked to examine the Coast Guard's current and planned acquisition portfolio.
This report assesses: (1) operational performance and testing of selected assets; (2) the current cost of the Coast Guard's portfolio and funding plans; and (3) the extent to which the Coast Guard is experiencing capability gaps, if any, given known affordability issues. To conduct this work, GAO analyzed the operational performance and test reports for all 4 newly fielded assets that the Coast Guard planned to test and the costs and capabilities of its major system acquisition portfolio. GAO also interviewed Coast Guard, DHS, and Navy officials.
Recommendations
Congress should consider requiring the Coast Guard to include additional information in its Capital Investment Plan. In addition, the Secretary of DHS should clarify when minimum performance standards should be achieved, conduct C4ISR testing, and develop a long-term modernization plan. DHS concurred with the recommendations, but its position on developing a long-term plan does not fully address GAO's concerns as discussed in the report.
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| To help ensure that it receives accurate information on the full effect of funding decisions on acquisition programs, Congress should consider amending the law that governs the 5-year Capital Investment Plan to require the Coast Guard to submit cost and schedule information that reflects the impact of the annual President's budget request on each acquisition across the portfolio--in addition to the current practice of reporting the cost and schedule estimates in current program baselines. | The Coast Guard has made progress to improve the Capital Investment Plan since 2014 that renders this matter overcome by events. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| United States Coast Guard | To ensure that the Coast Guard's C4ISR system meets mission needs, the Commandant of the Coast Guard should assess the operational effectiveness and suitability of the C4ISR system by fully integrating this assessment into other assets' operational test plans or by testing the C4ISR program on its own. |
The Coast Guard has repeatedly stated that there are no plans to test the C4ISR system.
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| United States Coast Guard | To help the Coast Guard improve the long-term outlook of its portfolio, the Commandant of the Coast Guard should develop a 20-year fleet modernization plan that identifies all acquisitions needed to maintain the current level of service and the fiscal resources necessary to build the identified assets. The plan should also consider trade-offs if the fiscal resources needed to execute the plan are not consistent with annual budgets. |
The agency concurred with this recommendation. Since the issuance of GAO's report, in February 2016, Congress directed the Coast Guard to develop a long-term plan to cover fiscal year 2017 and 20 years thereafter and that it should be updated every two years. In November 2017, officials told GAO that the Coast Guard was developing a 20-year long-term plan that specifically focused on the highest priority recapitalization and sustainment efforts for its assets and will focus on meeting the intent of the 2016 congressional mandate. However, as of June 2021, the Coast Guard has not had a 20-year plan approved by relevant agencies such that they could provide it to us. After 7 years, we do not believe this plan is imminent. Thus, while we are closing this recommendation, GAO will continue to monitor the Coast Guard's actions in completing its long-term plan given that GAO's recent work has found that the Coast Guard continues to pursue an unaffordable acquisition portfolio that is not likely to fully address all known and anticipated capability gaps.
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| Department of Homeland Security | To ensure that Congress and other decision makers are properly informed regarding the status of programs, the Secretary of Homeland Security and the Commandant of the Coast Guard should revise their acquisition guidance by specifying when minimum performance standards should be met, such as prior to entering into full-rate production. |
In May 2015, the Coast Guard issued an update to their Major Systems Acquisition Manual policy that clarifies that a full-rate production decision is made through an accumulation of program knowledge using results of analyses, inspection, demonstrations, and testing during development and initial production, culminating in operational test and evaluation using production systems in realistic operating environments.
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| United States Coast Guard | To ensure that Congress and other decision makers are properly informed regarding the status of programs, the Secretary of Homeland Security and the Commandant of the Coast Guard should revise their acquisition guidance by specifying when minimum performance standards should be met, such as prior to entering into full-rate production. |
In May 2015, the Coast Guard issued an update to their Major Systems Acquisition Manual policy that clarifies that a full-rate production decision is made through an accumulation of program knowledge using results of analyses, inspection, demonstrations, and testing during development and initial production, culminating in operational test and evaluation using production systems in realistic operating environments.
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| Department of Homeland Security | To ensure that Congress and other decision makers are properly informed regarding the status of programs, the Secretary of Homeland Security and the Commandant of the Coast Guard should revise their acquisition guidance by clarifying the performance data that should be used to assess whether or not minimum performance criteria have been met, prior to full-rate production, to determine whether a performance breach has occurred. |
In May 2015, the Coast Guard issued an update to their Major Systems Acquisition Manual policy that clarifies that a performance breach occurs when a program either determines it cannot physically achieve the stated performance parameter or when the Coast Guard determines the performance parameter is not affordable and will no longer pursue achieving it. The policy states that key performance parameters in the acquisition program baseline are normally expected to be demonstrated and met before a full-rate production decision, and that failure to demonstrate achievement of the performance parameter during initial or subsequent operational testing will become cause for notification of a breach.
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| United States Coast Guard | To ensure that Congress and other decision makers are properly informed regarding the status of programs, the Secretary of Homeland Security and the Commandant of the Coast Guard should revise their acquisition guidance by clarifying the performance data that should be used to assess whether or not minimum performance criteria have been met, prior to full-rate production, to determine whether a performance breach has occurred. |
In May 2015, the Coast Guard issued an update to their Major Systems Acquisition Manual policy that clarifies that a performance breach occurs when a program either determines it cannot physically achieve the stated performance parameter or when the Coast Guard determines the performance parameter is not affordable and will no longer pursue achieving it. The policy states that key performance parameters in the acquisition program baseline are normally expected to be demonstrated and met before a full-rate production decision, and that failure to demonstrate achievement of the performance parameter during initial or subsequent operational testing will become cause for notification of a breach.
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