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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

April 2011: 

Coast Guard: 

Opportunities Exist to Further Improve Acquisition Management 
Capabilities: 

GAO-11-480: 

GAO Highlights: 

Highlights of GAO-11-480, a report to congressional committees. 

Why GAO Did This Study: 

The Coast Guard manages a broad $27 billion major acquisition 
portfolio intended to modernize its ships, aircraft, command and 
control systems, and other capabilities. GAO has reported extensively 
on the Coast Guard’s significant acquisition challenges, including 
project challenges in its Deepwater program. GAO’s prior work on the 
Coast Guard acquisition programs identified problems in costs, 
management, and oversight, but it also recognized several steps the 
Coast Guard has taken to improve acquisition management. 

In response to the Coast Guard Authorization Act of 2010, GAO (1) 
assessed Coast Guard capabilities to manage its major acquisition 
programs, and (2) determined the extent to which the Coast Guard 
leverages Department of Defense (DOD) and other agency contracts or 
expertise to support its major acquisition programs. 

GAO reviewed Department of Homeland Security (DHS) and Coast Guard 
acquisition documents, GAO and DHS Inspector General reports, and 
selected DOD contracts; and interviewed Coast Guard, DHS, and DOD 
officials. 

What GAO Found: 

The Coast Guard continues to strengthen its acquisition management 
capabilities by updating acquisitions management policies and reducing 
acquisition workforce vacancies, but significant challenges remain. In 
November 2010, the Coast Guard updated its acquisition policy to 
further incorporate best practices and respond to prior GAO 
recommendations, such as aligning independent testing requirements 
with DHS policies and formalizing the Executive Oversight Council to 
review programs and provide oversight. Additionally, the Coast Guard 
reduced acquisition workforce vacancies from 20 to 13 percent from 
April to November 2010, but shortfalls persist in hiring staff for 
certain key areas such as systems engineers, and some programs 
continue to be affected by unfilled positions. While the Coast Guard 
has increased its acquisition management capabilities, most Coast 
Guard major acquisition programs have ongoing cost, schedule, or 
program execution risks. Additionally, unrealistic budget planning for 
the Coast Guard’s acquisition portfolio exacerbates these challenges 
and will likely lead to more program cost and schedule issues. The 
Coast Guard has several actions under way to further improve 
acquisition policies and workforce shortfalls, as well as address 
budget planning issues, but it is too soon to tell whether the actions 
will be effective. 

The Coast Guard leveraged DOD contracts to purchase products and 
services or to gain expertise in support of major acquisition 
programs. The Coast Guard has entered into approximately 81 
memorandums of agreement and other arrangements primarily with DOD, 
which has experience and technical expertise in purchasing major 
equipment such as ships and aircraft, to support its major acquisition 
programs. Examples range from acquiring products and services from 
established DOD contracts to obtaining engineering and testing 
expertise from the Navy. According to the Coast Guard, leveraging DOD 
contracts has led to cost savings for Coast Guard acquisition 
programs. For instance, the Coast Guard received price discounts for C-
130J aircraft by coordinating contracting efforts with the Air Force 
rather than contracting directly with the aircraft manufacturer. In 
another example, Coast Guard officials used Navy cost estimators and 
contracting staff in the November 2010 production contract for the 
National Security Cutter. At this point, Coast Guard program managers 
rely on informal contacts to learn about the agreements in place to 
support program activities, thus potentially limiting staff knowledge 
of DOD resources available. Coast Guard contracting officials only 
recently recognized the need to make DOD agreements available to 
program staff, but due to limited attention to this issue, only about 
5 of the 81 agreements are currently accessible to program managers. 

What GAO Recommends: 

GAO recommends that the Coast Guard take steps to ensure program staff 
have access to interagency agreements with DOD. DHS concurred with the 
recommendation. 

View [hyperlink, http://www.gao.gov/products/GAO-11-480] or key 
components. For more information, contact John Hutton at (202) 512-
4841 or huttonj@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

The Coast Guard Continues to Improve Its Acquisition Management 
Capabilities, but Many Programs Face Challenges: 

Coast Guard Leverages DOD Contracts and Expertise to Support Programs, 
But Program Staff Could Benefit From Better Insight of Available 
Interagency Agreements: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Table: 

Table 1: Information on Coast Guard Major Acquisition Programs: 

Figures: 

Figure 1: Status of the Coast Guard's Acquisition Workforce Vacancies--
April 2010 and November 2010: 

Figure 2: Coast Guard Programs with Program Execution, Schedule, 
Resource, and Budget Planning Challenges as of December 2010: 

Abbreviations: 

Blueprint: Blueprint for Continuous Improvement: 

C4ISR: Command, Control, Communications, Computer, Intelligence, 
Surveillance, and Reconnaissance (C4ISR) Suite: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

NAVAIR: Naval Air Systems Command: 

NAVSEA: Naval Sea Systems Command: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

April 13, 2011: 

The Honorable John D. Rockefeller, IV: 
Chairman: 
The Honorable Kay Bailey Hutchison: 
Ranking Member: 
Committee on Commerce, Science, and Transportation: 
United States Senate: 

The Honorable John L. Mica: 
Chairman: 
The Honorable Nick J. Rahall, II: 
Ranking Member: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

The U.S. Coast Guard manages a broad $27 billion major acquisition 
portfolio intended to acquire capabilities to conduct missions that 
range from marine safety to defense readiness. We have reported 
extensively on the Coast Guard's significant acquisition challenges, 
including its Deepwater program, which currently constitutes the 
majority of its acquisition portfolio and was created to build and 
modernize ships, aircraft, and other capabilities. Our prior work on 
the Deepwater acquisition program identified problems in costs, 
management, and oversight that have led to delivery delays and other 
operational challenges for certain assets, but it also recognized 
several steps the Coast Guard has taken to improve Deepwater 
management. For example, beginning in 2007, the Coast Guard assumed 
the role of lead systems integrator for the Deepwater program. Another 
key step was to reorganize its acquisition function and update its 
business practices. Nonetheless, the Coast Guard has a well-documented 
history of workforce challenges, such as difficulty obtaining critical 
skills and defining appropriate staffing levels to achieve its 
missions. 

Section 402(a) of the Coast Guard Authorization Act of 2010 directed 
GAO to report on Coast Guard acquisition management for major 
programs.[Footnote 1] To satisfy the mandate, we (1) assessed Coast 
Guard acquisition management capabilities for its major acquisition 
programs, and (2) determined the extent to which the Coast Guard 
leverages Department of Defense (DOD) and other agency contracts or 
expertise to support its major acquisition programs. 

We assessed Coast Guard acquisition management capabilities by 
evaluating its acquisition policies and practices, changes in its 
acquisition workforce, and the status of the Coast Guard's acquisition 
programs as measured through their cost, schedule, and performance. To 
do so, we reviewed key Coast Guard and DHS documentation such as the 
Major Systems Acquisition Manual, the Strategic Plan or Blueprint for 
Continuous Improvement, DHS Acquisition Management Directive102-01, 
acquisition decision memorandums for Coast Guard programs, Quarterly 
Progress Reports, and Quarterly Acquisition Reports to Congress and 
analyzed changes issued since our previous report in July 2010. 
[Footnote 2] We interviewed Coast Guard acquisition directorate 
officials, including program managers and contracting staff about the 
cost, schedule, and performance of Coast Guard programs as well as any 
instances in which DOD or other agencies provide support. We also 
interviewed DHS officials from the Acquisition Program Management 
Division concerning Coast Guard management of its acquisition 
portfolio. Further, we reviewed contract documents and identified the 
agencies Coast Guard most commonly used to support its major 
acquisition programs. On the basis of this analysis, we interviewed 
Coast Guard officials, as well as DOD, Navy, and Air Force officials 
about resources provided to support Coast Guard major acquisition 
programs. We also relied in part on our past work, including our July 
2010 report on the Deepwater Program, DHS Inspector General reports, 
and other assessments of the Coast Guard's major programs. We 
conducted this performance audit from January 2011 to April 2011 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. Appendix I 
provides additional details about our scope and methodology. We 
believe that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

The Coast Guard, a maritime military service within DHS, has a variety 
of responsibilities including port security and vessel escort, search- 
and-rescue, and polar ice operations. To carry out these and other 
responsibilities, the Coast Guard operates a number of vessels, 
aircraft, and information technology programs. The Coast Guard intends 
to further meet these responsibilities through ongoing efforts to 
modernize or replace assets through the Deepwater program. The Coast 
Guard's current acquisition portfolio, at $27 billion, includes 17 
major acquisition programs and projects and is managed by the Coast 
Guard Acquisition Directorate, CG-9. 

Major acquisitions--level I and level II--have life-cycle cost 
estimates equal to or greater than $1 billion (level I) or from $300 
million to less than $1 billion (level II). Major acquisition programs 
are to receive oversight from DHS's acquisition review board, which is 
responsible for reviewing acquisitions for executable business 
strategies, resources, management, accountability, and alignment to 
strategic initiatives. The board also supports the Acquisition 
Decision Authority in determining the appropriate direction for an 
acquisition at key acquisition decision events. At each Acquisition 
Decision Event, the Acquisition Decision Authority approves 
acquisitions to proceed through the acquisition life-cycle phases upon 
satisfaction of applicable criteria. Additionally, the Coast Guard and 
other DHS components have Component Acquisition Executives responsible 
in part for managing and overseeing their respective acquisition 
portfolios. DHS has a four-phase acquisition process: 

(1) Need phase--Define a problem and identify the need for a new 
acquisition; 

(2) Analyze/Select phase--Identify alternatives and select the best 
option; 

(3) Obtain phase--Develop, test, and evaluate the selected option and 
determine whether to approve production; and: 

(4) Produce/Deploy/Support phase--Produce and deploy the selected 
option and support it throughout the operational life cycle. 

Table 1 provides further information about the Coast Guard major 
acquisition programs. 

Table 1: Information on Coast Guard Major Acquisition Programs: 

Program: Coast Guard Logistics Information Management System (CG-LIMS); 
Description: CG-LIMS will replace or integrate legacy logistics 
business processes and their supporting information systems;
Acquisition level: Level II. 

Program: Command, Control, Communications, Computer, Intelligence, 
Surveillance, and Reconnaissance (C4ISR) Suite; 
Description: The Coast Guard is incrementally acquiring C4ISR 
capabilities, including upgrades to existing cutters and shore 
installations, acquisitions of new capabilities, and development of a 
common operating picture to provide operationally relevant information 
and knowledge across the full range of Coast Guard operations;
Acquisition level: Level I. 

Program: Fast Response Cutter (FRC); 
Description: The FRC, also referred to as the Sentinel class, is 
conceived as a patrol boat with high readiness, speed, adaptability, 
and endurance to perform a wide range of missions;
Acquisition level: Level I. 

Program: HC-130H Long-Range Surveillance Aircraft; 
Description: The HC-130H is the legacy Coast Guard long-range 
surveillance aircraft that the Coast Guard intends to update in 
multiple segments;
Acquisition level: Level I. 

Program: HC-130J Long-Range Surveillance Aircraft; 
Description: The HC-130J is a four-engine turbo-prop aircraft that the 
Coast Guard has deployed with improved interoperability, C4ISR, and 
sensors to enhance surveillance, detection, classification, 
identification, and prosecution;
Acquisition level: Level II. 

Program: HC-144A Maritime Patrol Aircraft (MPA); 
Description: The MPA is a transport and surveillance, fixed-wing 
aircraft intended to be used to perform search-and-rescue missions, 
enforce laws and treaties, and transport cargo and personnel;
Acquisition level: Level I. 

Program: HH-60 Medium Range Recovery Helicopter; 
Description: The HH-60 is a medium-range recovery helicopter designed 
to perform search-and-rescue missions offshore in all weather 
conditions. The Coast Guard has planned upgrades to the helicopter's 
avionics, sensors, radars, and command and control systems in multiple 
segments;
Acquisition level: Level I. 

Program: HH-65 Multi-mission Cutter Helicopter; 
Description: The HH-65 Dolphin is the Coast Guard's short-range 
recovery helicopter. It is being upgraded to improve its engines, 
sensors, navigation equipment, avionics, ability to land on the 
National Security Cutter, and other capabilities in multiple segments;
Acquisition level: Level I. 

Program: Interagency Operations Center (IOC); 
Description: IOC is intended to improve operational capabilities, 
situational awareness, tactical decision making and joint, coordinated 
emergency response;
Acquisition level: Level I. 

Program: Medium Endurance Cutter (MEC) Sustainment; 
Description: The MEC sustainment project is intended to improve the 
cutters' operating and cost performance by replacing obsolete, 
unsupportable, or maintenance-intensive equipment;
Acquisition level: Level I. 

Program: National Security Cutter; 
Description: The National Security Cutter is intended to be the 
flagship of the Coast Guard's fleet, with an extended on-scene 
presence, long transits, and forward deployment. The cutter and its 
aircraft and small-boat assets are to operate worldwide;
Acquisition level: Level I. 

Program: Nationwide Automatic Identification System (NAIS); 
Description: The Nationwide Automatic Identification System is a data 
collection, processing, and distribution system that provides 
information to enhance safety of navigation and improve maritime 
domain awareness;
Acquisition level: Level I. 

Program: Offshore Patrol Cutter (OPC); 
Description: The OPC is intended to conduct patrols for homeland 
security functions, law enforcement, and search-and-rescue operations. 
It will be designed for long-distance transit, extended on-scene 
presence, and operations with multiple aircraft and small boats;
Acquisition level: Level I. 

Program: Patrol Boat (PB) Sustainment; 
Description: The PB sustainment project is intended to improve the 
boats' operating and cost performance by replacing obsolete, 
unsupportable, or maintenance-intensive equipment;
Acquisition level: Level II. 

Program: Rescue 21; 
Description: Rescue 21 is an advanced command, control, and 
communications system intended to improve the Coast Guard's Search and 
Rescue mission by leveraging direction-finding technology to more 
accurately locate the source of distress calls;
Acquisition level: Level I. 

Program: Response Boat-Medium (RB-M); 
Description: The RB-M is intended to replace the aging 41' utility 
boats and other medium nonstandard boats;
Acquisition level: Level I. 

Program: Unmanned Aircraft System (UAS); 
Description: The Coast Guard is exploring the use of Unmanned Aircraft 
Systems to augment the service's cutter-and land-based aviation 
capabilities;
Acquisition level: Level I. 

Source: GAO analysis of Coast Guard information. 

[End of table] 

Since 2001, we have reviewed Coast Guard acquisition programs and have 
reported to Congress, DHS, and the Coast Guard on the risks and 
uncertainties inherent in its acquisitions. In our June 2010 report on 
selected DHS major acquisitions, we found that acquisition cost 
estimates increased by more than 20 percent in five of the Coast 
Guard's six major programs we reviewed.[Footnote 3] For example, the 
National Security Cutter's acquisition cost estimate grew from an 
initial figure of $3.45 billion to $4.75 billion from 2006 to 2009--a 
38 percent increase. Moreover, five of six programs faced challenges 
due to unapproved or unstable baseline requirements, and all six 
programs experienced schedule delays. The Rescue 21 search-and-rescue 
program, for example, had both unapproved or unstable baseline 
requirements and schedule delays. 

Several of our reports have focused on the Coast Guard's Deepwater 
acquisition program. Most recently, in our July 2010 report on the 
program, we found that the Coast Guard had generally revised its 
acquisition management policies to align with DHS directives, was 
taking steps to address acquisition workforce needs, and was 
decreasing its dependence on the Integrated Deepwater Systems 
contractor by planning for alternate vendors for some assets, and to 
award and manage work outside of the Integrated Coast Guard Systems 
contract for other assets.[Footnote 4] We also have ongoing work on 
the status of the Deepwater program that is related but complementary 
to this report and will result in a separate published report later 
this year. 

The Coast Guard Continues to Improve Its Acquisition Management 
Capabilities, but Many Programs Face Challenges: 

Coast Guard Updates of Policies and Processes for Major Acquisition 
Programs Better Reflect Best Practices and Respond to Prior GAO 
Recommendations: 

The Coast Guard updated its overarching acquisition policy since we 
last reported in July 2010 to better reflect best practices and 
respond to our prior recommendations, and to more closely align its 
policy with the DHS Acquisition Management Directive Number 102-01. 
[Footnote 5] For example, in November 2010, the Coast Guard revised 
its Major Systems Acquisition Manual, which establishes policy and 
procedures, and provides guidance for major acquisition programs. 
[Footnote 6] Revisions included: 

* a list of the Executive Oversight Council's roles and 
responsibilities; 

* aligning roles and responsibilities of independent test authorities 
to DHS standards, which satisfied one of our prior recommendations; 
[Footnote 7] 

* a formal acquisition decision event before a program receives 
approval for low-rate initial production, which addresses one of our 
prior recommendations;[Footnote 8] and: 

* a requirement to present an acquisition strategy at a program's 
first formal acquisition decision event. 

The Coast Guard's Blueprint for Continuous Improvement (Blueprint) was 
created after the Coast Guard began realigning its acquisition 
function in 2007 and is designed to provide strategic direction for 
acquisition improvements. The Blueprint uses GAO's Framework for 
Assessing the Acquisition Function at Federal Agencies and the Office 
of Federal Procurement Policy's Guidelines for Assessing the 
Acquisition Function as guidance, but also includes quantitative and 
qualitative measures important to the acquisitions process. Through 
these measures, the Coast Guard plans to gain a clearer picture of its 
acquisition organization's health. The Blueprint was revised in 
October 2010 to formalize the acquisition directorate's integration 
with the Coast Guard's mission support structure and includes plans to 
annually evaluate the Blueprint's measures. 

The Coast Guard developed the Blueprint as a top-level planning 
document to provide acquisition process objectives and strategic 
direction as well as to establish action items, but DHS's Inspector 
General expressed concern that the agency did not prioritize action 
items and consider the effects of delayed completion of action items 
on subsequent program outcomes. For example, the 2010 Inspector 
General report found that by the end of fiscal year 2009, 23 percent 
of assigned action item completion dates slipped without determining 
the effect on acquisition improvements.[Footnote 9] In response to the 
Inspector General's report, the Coast Guard has taken steps to 
prioritize its action items; however, it is too soon to tell the 
outcome of these actions. 

These policies were updated to align with DHS guidance and reflect 
best practices. Coast Guard officials also attribute acquisition 
reforms to the Coast Guard's efforts to assume responsibilities for 
all major acquisition programs. We previously reported in 2009 that 
the Coast Guard acknowledged its need to define systems integrator 
functions and assign them to Coast Guard stakeholders as it assumed 
the systems integrator role.[Footnote 10] As a result, the Coast Guard 
established new relationships among its directorates to assume control 
of key systems integrator roles and responsibilities formerly carried 
out by the contractor. For example, according to Coast Guard 
officials, the Coast Guard formally designated certain directorates as 
technical authorities responsible for establishing, monitoring, and 
approving technical standards for all assets related to design, 
construction, maintenance, logistics, C4ISR, life-cycle staffing, and 
training. In addition, the Coast Guard is developing a Commandant's 
Instruction to further institutionalize the roles and responsibilities 
for Coast Guard's acquisition management. 

Beyond updating its major acquisition policies and guidance, the Coast 
Guard Acquisition Directorate also increased the involvement of its 
Executive Oversight Council to facilitate its acquisition process. 
Coast Guard officials stated that the council, initially established 
in 2009 with an updated charter in November 2010, provides a 
structured way for flag-level and senior executive officials in the 
requirements, acquisition, and resources directorates, among others, 
to discuss programs and provide oversight on a regular basis. As the 
Coast Guard began assuming the system integrator function from the 
Deepwater contractor in 2007, it believed it needed a forum to make 
trade-offs and other program decisions especially in a constrained 
budget environment; according to officials, the council was 
established in response to that need. Coast Guard officials noted that 
major programs are now required to brief the formalized council 
annually, prior to milestones, and on an ad hoc basis when major risks 
are identified. According to Coast Guard documentation, from fiscal 
year 2010 through the first quarter of fiscal year 2011, the council 
met over 40 times to discuss major programs. For example, the council 
held more than five meetings to discuss the Offshore Patrol Cutter's 
life-cycle costs and system requirements, among other issues. The 
discussions are captured at a general level in meeting minutes and 
sent to the Coast Guard Acquisition Directorate for approval. 

Coast Guard Has Continued Progress in Reducing Its Acquisition 
Workforce Vacancies, Although Shortfalls Remain: 

The Coast Guard has made progress in reducing its acquisition 
workforce vacancies since April 2010. As of November 2010, the 
percentage of vacancies dropped from about 20 percent to 13 percent or 
from 190 to 119 unfilled billets out of 951 total billets. Acquisition 
workforce vacancies have decreased, but program managers have ongoing 
concerns about staffing program offices. For example, the HH-65 
program office has funded and filled 10 positions out of an identified 
need for 33 positions. Although the program has requested funding for 
an additional 8 billets for fiscal year 2012, due to the timing of the 
request, the funding outcome is unknown as of April 2011. Similarly, 
the Interagency Operations Center program is another office affected 
by acquisition workforce shortages. According to the Coast Guard, as 
of March 2011, the program office has funded and filled 11 positions 
out of the 27 needed. For some of these positions, the Interagency 
Operations Center program uses staff from the Coast Guard's Command, 
Control, and Communications Engineering Center for systems engineering 
support; however, workforce shortages remain. Program officials may 
face additional challenges in hiring staff depending on the location 
of the vacancies within the program's management levels. For example, 
a program official stated that vacant supervisory positions must be 
filled first before filling remaining positions because lower-level 
positions would not have guidance for their activities. Figure 1 shows 
the status of the Coast Guard's acquisition workforce vacancies as of 
November 2010. 

Figure 1: Status of the Coast Guard's Acquisition Workforce Vacancies--
April 2010 and November 2010: 

[Refer to PDF for image: illustrated line graph] 

Total billets: 951. 

Vacancies: 
April 2010: 190 unfilled (20%); 
November 2010: 119 unfilled (13%). 

Source: GAO analysis of Coast Guard data. 

[End of figure] 

We reported in January 2010 that the Coast Guard faces difficulty in 
identifying critical skills, defining staffing levels, and allocating 
staff to accomplish its diverse missions.[Footnote 11] An official 
Coast Guard statement from 2009 partially attributed the challenge of 
attracting staff for certain positions to hiring competition with 
other federal agencies. In February 2010, we reported on the Coast 
Guard's long-standing workforce challenges and evaluated the agency's 
efforts to address these challenges.[Footnote 12] For example, we 
reported that while the Coast Guard developed specific plans to 
address its human capital challenges, the plans fell short of 
identifying gaps between mission areas and personnel needed. 

The Coast Guard has taken steps to outline specific areas of workforce 
needs, including developing a human-capital strategic plan and 
commissioning a human-capital staffing study published in August 2010, 
but program managers continue to state concerns with the Coast Guard's 
ability to satisfy certain skill areas. For example, the August 2010 
human-capital staffing study stated that program managers reported 
concerns with staffing adequacy in program management and technical 
areas. To make up for shortfalls in hiring systems engineers and other 
acquisition workforce positions for its major programs, the Coast 
Guard uses support contractors. As of November 2010, support 
contractors constituted 25 percent of the Coast Guard's acquisition 
workforce. While we have stated the risks in using support 
contractors, we reported in July 2010 that the Coast Guard 
acknowledged the risks of using support contractors and had taken 
steps to address these risks by training its staff to identify 
potential conflicts of interest and by releasing guidance regarding 
the role of the government and appropriate oversight of contractors 
and the work that they perform.[Footnote 13] 

The Coast Guard has also made progress ensuring that program 
management staff received training and DHS certifications to manage 
major programs. For example, according to Coast Guard officials, in 
December 2010, the Coast Guard was 100 percent compliant with DHS 
personnel certification requirements for program-management positions. 
We have previously reported that having the right people with the 
right skills is critical in ensuring that the government achieves the 
best value for its spending.[Footnote 14] 

Most of the Coast Guard's Major Acquisition Programs Continue to 
Experience Challenges Exacerbated in Part by Unrealistic Budget 
Planning: 

Most of the Coast Guard's major acquisition programs continue to 
experience challenges in program execution, schedule, and resources. 
For program execution, the Coast Guard reported in December 2010 that 
12 of its 17 major programs face moderate to significant risk in one 
or more execution metrics such as technical maturity or logistics, 
which required management attention.[Footnote 15] Of these, seven 
programs have carried these risks for 1 year or more. For example, the 
HC-130J program has reported logistics-assessment risks requiring 
management attention for 3 years. Regarding schedule challenges, the 
Coast Guard reported in December 2010 that 10 of its 12 major programs 
with approved acquisition program baselines[Footnote 16] exceeded 
schedule objective or threshold parameters.[Footnote 17] For example, 
the Maritime Patrol Aircraft HC-144A program exceeded its schedule 
because it delayed a production decision in order to complete initial 
operational testing and evaluation per a DHS acquisition review board 
decision. As this program was already 4 years behind schedule, added 
schedule delays may require the Coast Guard to extend a legacy 
aircraft's service life, which may incur additional costs to sustain 
it. Major Coast Guard programs also face resource risks.[Footnote 18] 
As of December 2010, 12 of the Coast Guard's 17 major programs face 
moderate to significant risk in project resource metrics such as 
budgeting and funding. For 9 of these programs, risks have been 
reported for more than 1 year. In addition, four Coast Guard programs, 
HC-130H aircraft, Nationwide Automatic Identification System, C4ISR, 
and HH-60 helicopter, have notified DHS of acquisition program 
baseline breaches.[Footnote 19] 

The Coast Guard's unrealistic acquisition budget planning also 
exacerbates the challenges Coast Guard acquisition programs face. We 
have previously reported that the Coast Guard faced risks from 
unrealistic funding levels and that its reliance on sustained high 
funding levels in an environment of budget constraints puts program 
outcomes at risk if projected funds are not received.[Footnote 20] In 
December 2010, the Coast Guard reported that 8 of the 17 major program 
offices were updating their acquisition program baselines due in part 
to reduced funding in the fiscal year 2011-2015 Capital Investment 
Plan.[Footnote 21] According to Coast Guard acquisition officials, 
when a Capital Investment Plan has funding levels that are lower than 
what a program planned to receive, then the program is more likely to 
have schedule breaches and other problems. For example, in November 
2010 the HC-130H program reported a schedule breach to DHS due in part 
to reduced Capital Investment Plan funding projections for fiscal 
years 2011-2015 and had to revise its schedule parameters to reflect 
the lower projected funding levels. This also occurred in the 
Nationwide Automatic Identification System major acquisition program. 
The program had an estimated cost growth of approximately $32 million 
due to reduced out-year funding in the fiscal year 2009-2013 plan, and 
after further funding reductions in the fiscal year 2011-2015 plan, 
the program subsequently deferred efforts to update the program 
baseline. According to Coast Guard officials, the Coast Guard is 
currently reevaluating the program's system requirements and 
associated project cost, schedule, and performance objectives. In 
2011, DHS acquisition oversight officials informed the Coast Guard 
that future breaches in other programs would be almost inevitable as 
funding resources decrease. Figure 2 illustrates Coast Guard major 
acquisition programs facing execution, schedule, resource, and budget 
planning challenges as of December 2010. 

Figure 2: Coast Guard Programs with Program Execution, Schedule, 
Resource, and Budget Planning Challenges as of December 2010: 

[Refer to PDF for image: illustration] 

Major programs by asset type: 

Aviation: 

HC-130H: HC-130H Long-Range Surveillance Aircraft. 
HC-130J: HC-130J Long-Range Surveillance Aircraft. 
MPA: HC-144A Maritime Patrol Aircraft.
HH-60: HH-60 Medium Range Recovery Helicopter. 
HH-65: HH-65 Multi-mission Cutter Helicopter. 
UAS: Unmanned Aircraft System. 

Surface: 

FRC: Fast Response Cutter. 
MEC: Medium Endurance Cutter Sustainment. 
NSC: National Security Cutter. 
OPC: Offshore Patrol Cutter.
PB: Patrol Boat Sustainment. 
RB-M: Response Boat-Medium. 

Information Technology: 

CG-LIMS: Coast Guard Logistics Information Management System. 
C4ISR: Command, Control, Communications, Computer, Intelligence, 
Surveillance, and Reconnaissance Suite. 
IOC: Interagency Operations Center. 
NAIS: Nationwide Automatic Identification System. 
Rescue 21: Rescue 21. 

Program risks: 

Resource and Schedule risks: 
HH-65; 
MEC. 

Schedule and Execution risks: 
HH-60[A]. 

Execution risks: 
HC-130J. 

Resource and Execution risks: 
CG-LIMS; 
IOC; 
NAIS[A]; 
OPC. 

Resource, Schedule, and Execution risks: 
PB[A]; 
C4ISR[A]; 
HC-130H[A]; 
HC-144A MPA[A]; 
NSC; 
Rescue 21[A]. 

[A] Programs experiencing instability due to reduced projected funding 
levels. 

Source: GAO analysis of Coast Guard data. 

[End of figure] 

The Coast Guard developed several action items in its October 2010 
update to its Blueprint for Continuous Improvement to address budget 
planning challenges. According to Coast Guard acquisition officials, 
the most important step is for Coast Guard leadership to establish a 
priority list for the major programs based on actual acquisition 
budgets received in prior years, and then to make trade-offs between 
programs to fit within historical budget constraints. The Coast Guard 
developed an action item to assess the percentage of program funding 
profiles that fit into the Capital Investment Plan. Specifically, the 
Blueprint indicates that the Coast Guard will establish and implement 
a process to compare and report the extent to which each individual 
program's funding fits into the Capital Investment Plan funding 
parameters. Further, the Coast Guard plans to analyze and regularly 
report gaps in these funding profiles to the Coast Guard's acquisition 
leadership. The Coast Guard also identified the need to promote 
funding stability in the Capital Investment Plan and intends to 
evaluate that effort by establishing a mechanism and baseline to 
measure Capital Investment Plan stability by comparing project funding 
against previous, current, and future 5-year Capital Investment Plans. 
However, while the Coast Guard officials stated their intention to use 
these metrics to elevate the priority and funding issues to 
leadership, it is too soon to tell the outcome of these steps. In a 
separate ongoing review, we are further assessing the Coast Guard's 
management of program costs and other budget issues. 

Coast Guard Leverages DOD Contracts and Expertise to Support Programs, 
But Program Staff Could Benefit From Better Insight of Available 
Interagency Agreements: 

Coast Guard Major Acquisition Programs Have Benefited from Leveraging 
DOD Expertise and Contracts: 

According to the Coast Guard, it currently has 81 interagency 
agreements, memorandums of agreement, and other arrangements in place 
primarily with DOD agencies to support its major acquisition programs. 
Each of the 17 major Coast Guard acquisition programs leverages DOD 
support, primarily from the Navy. According to Coast Guard officials, 
they rely on DOD experience and technical expertise because they both 
procure similar major equipment, including ships and aircraft. 
Examples range from acquiring products and services from established 
DOD contracts to using engineering and testing expertise from the 
Navy. Some major programs also receive assistance from other DHS 
components or other agencies on a more limited basis. For example, the 
Rescue 21 program partnered with the Federal Aviation Administration 
at two sites to use its land and towers to install search and rescue 
capabilities. 

The Secretary of Homeland Security is authorized to enter into 
agreements with other executive agencies and to transfer funds as 
required. This authority has been delegated to the Commandant of the 
Coast Guard.[Footnote 22] Interagency agreements include a description 
of the general terms and conditions that govern the relationship 
between agencies, and specific information on the requesting agencies' 
requirement to establish a need and to authorize the transfer of 
funds. According to Coast Guard officials, Coast Guard interagency 
agreements with DOD typically include a memorandum of agreement or a 
memorandum of understanding with a DOD agency. A memorandum of 
agreement is a document that defines the responsibilities of, and 
actions to be taken by, each of the parties so that their goals will 
be accomplished. A memorandum of understanding is a document that 
describes broad concepts of mutual understanding, goals, and plans 
shared by the parties. Interagency agreements also are typically 
funded by military interdepartmental purchasing requests in which the 
requiring agency must include a description of the end items purchased 
and the funding data for acquiring these supplies or services. 
Interagency agreements can be for direct, assisted, or other than 
assisted acquisitions. In direct acquisitions, the requesting agency 
places orders against another agency's indefinite-delivery contracts, 
such as task and delivery order contracts, while assisted acquisitions 
use the acquisition services of a servicing agency. Other than 
assisted acquisitions utilize the internal expertise of a servicing 
agency. 

In 2001, the Chief of Naval Operations and the Commandant of the Coast 
Guard agreed to build a national fleet that combines Navy and Coast 
Guard forces to maximize effectiveness across all naval and maritime 
missions. More than 50 of the Coast Guard's agreements with DOD 
leverage support from the Department of the Navy. Moreover, Coast 
Guard and Navy officials have noted an increase in Navy involvement to 
support the Coast Guard's major acquisition programs since the Coast 
Guard assumed the Deepwater lead systems integrator role in 2007. 
Examples of updated support agreements in place with Navy entities 
include the following: 

* A 2011 interagency agreement with the Naval Sea Systems Command 
(NAVSEA) to support Coast Guard acquisition programs in program 
management, design, technical assistance, cost estimating, and other 
support. 

* A 2010 memorandum of agreement with the Navy's Commander, 
Operational Test and Evaluation Forces, allows the Coast Guard to 
request the Navy to serve as the operational test authority for Coast 
Guard major acquisition programs. 

* Two memorandums of agreement/interagency agreements in 2009 with the 
Naval Air Systems Command (NAVAIR), which allow Coast Guard major 
acquisition programs to leverage Navy services and aviation program 
office assistance including: planning, technical assistance, cost 
estimation, warfare modeling and analysis, requirements definition, 
risk management, and integrated logistics support. 

* A 2009 memorandum of agreement with the Navy's Space and Naval 
Warfare Systems Command Pacific that allows Coast Guard programs to 
request and obtain technical and other support services for the 
research and development, design, engineering, integration, 
acquisition, test and evaluation, installation, and life-cycle support 
of Coast Guard systems. 

Most Coast Guard major acquisition programs leverage Navy expertise, 
in some way, to support a range of testing, engineering, and other 
program activities. For example, the Fast Response Cutter program used 
Naval Surface Warfare Center Dahlgren services to help with topside 
design and electromagnetic testing. In another instance, the Coast 
Guard used Naval Surface Warfare Center Carderock division to test and 
evaluate boats and provide technical expertise for the Response Boat-
Medium program. According to Coast Guard officials, the Coast Guard 
also collaborated with Navy cost estimators and contracting staff to 
prepare for negotiations to award the November 2010 production 
contract for the fourth National Security Cutter. In another instance, 
the Navy provided engineering and technical support for the Coast 
Guard's MH-60 helicopter program. Further, the Navy's Operational Test 
and Evaluation Command is currently supporting testing activities for 
11 Coast Guard programs. 

According to Coast Guard and DOD officials, the Coast Guard has 
achieved cost savings from using DOD contracts through quantity 
discounts and reduced unit prices when Coast Guard orders are combined 
with orders from other DOD departments. Additional benefits include 
reductions in contracting administrative costs, and expedited 
processing times. According to Coast Guard officials, examples include 
the following: 

* The Coast Guard's HC-130J program coordinated C-130J contracting 
efforts through the Air Force acquisition office's contract rather 
than contracting directly with the aircraft manufacturer and benefited 
from discounts in ordering along with other DOD agencies. In addition, 
by using the standard configuration of the C-130J common among U.S. 
government users, the Coast Guard benefited from cost savings in 
aircraft sustainment. 

* The Coast Guard obtained Navy systems, such as the SPQ-9B Radar, at 
a reduced cost for Coast Guard cutter programs. 

* The National Security Cutter program used Navy contracts to provide 
and install ultra high frequency radios and electronic warfare systems. 

* The Rescue 21 program placed search-and-rescue sensors on Army, Air 
Force, Navy, and Marine Corps facilities, which reduced recurring 
Coast Guard costs. 

* The HH-65 program office reduced procurement costs by approximately 
12 percent or $25,000 by purchasing a range of subsystems and 
components, such as a cockpit display unit, from an Army contract. 

The Coast Guard has also identified opportunities to further leverage 
DOD resources. In 2009, the Navy and Coast Guard conducted a 
commonality study that identified, among other things, 17 commonality 
opportunities with near term potential for mutual benefit that 
required little or no up-front investment to execute. Typically they 
require only the modification of a policy document. Key opportunities 
identified included the following: 

* Acquisition personnel exchanges with NAVSEA to promote collaboration 
and leveraging of cross-service capabilities in the acquisition 
community. 

* Leveraging existing Navy logistics management systems during the 
development of the Coast Guard Logistics Information Management System 
to reduce developmental costs. 

DOD Resources Available to Support Major Acquisition Programs May Not 
Be Transparent to Coast Guard Program Staff: 

Coast Guard program managers largely rely on informal contacts to 
learn about the agreements in place with DOD to support program 
activities. Many Coast Guard program managers we met with indicated 
that they became aware of DOD resources that could be leveraged for 
their programs through contacts with their DOD counterparts or by 
other means. According to Coast Guard officials, program managers also 
learn about another agency's expertise or resources through word of 
mouth, market research, head of contracting activity discussions, 
conferences, or networking channels. While this interaction has led to 
Coast Guard programs successfully leveraging DOD resources, Navy 
officials told us that in the past Navy leadership was not always 
fully aware of support being provided to the Coast Guard, and as such 
was unable to ensure that the right Navy entities were conducting the 
work and that the results provided to the Coast Guard met Navy 
standards. NAVAIR and NAVSEA have each established a liaison assigned 
to the Coast Guard to facilitate information and knowledge sharing 
about Navy capabilities and contracts available to Coast Guard 
programs. For example, NAVAIR and NAVSEA liaisons serve as Coast Guard 
on-site experts, engage in dialogue with Coast Guard, and work to 
increase Coast Guard awareness of Navy resources. However, without 
current knowledge of existing interagency agreements, Coast Guard 
program managers may not be aware of the liaisons and their role in 
working with the Navy. 

Relying on informal contacts may also present missed opportunities for 
greater cooperation and leveraging of DOD resources. For example, the 
Coast Guard has 50 or more agreements with the Navy, some of which are 
broad agreements with major Navy commands such as NAVSEA or NAVAIR, 
while others are specific agreements with Navy agencies such as the 
Naval Ordnance Safety and Security Office, Naval Surface Warfare 
Center Dahlgren Division, and the Naval Supply Systems Command. 
Interagency agreements may call for a designated point of contact for 
Coast Guard program managers to contact, but program managers do not 
have a systematic way to gain insight into the details of the 
agreements. 

According to Coast Guard contracting officials, the Coast Guard has 
recently begun to develop a database of interagency agreements with 
DOD and other agencies that Coast Guard programs can leverage to 
support acquisition activities. However, due to limited attention 
devoted to this issue, Coast Guard officials noted that only 5 of the 
approximately 81 interagency agreements are in a data system 
accessible to program staff. These officials also noted that a 
database is needed to avoid duplicative efforts and to ensure program 
staff are aware of existing agreements, including the latest versions 
of agreements specifying updated products and services available. 

Conclusions: 

The Coast Guard has continued to make progress in strengthening its 
capabilities to manage its acquisition portfolio by updating 
acquisition policies and practices as well as reducing vacancies in 
the acquisition workforce. As the Coast Guard improves its acquisition 
management capabilities, it may find that adjustments and changes will 
be necessary in light of how well its major acquisition programs are 
progressing. The Coast Guard has leveraged DOD contracts to help 
support its major acquisition programs, but reliance on informal 
contacts may also present missed opportunities for greater cooperation 
and leveraging of DOD resources to help save scarce resources, manage 
programs risks, and support positive acquisition outcomes. 

Recommendation for Executive Action: 

To provide Coast Guard program management staff with greater access to 
updated information about agreements in place with DOD to facilitate 
leveraging support for major acquisition programs, we recommend that 
the Commandant of the Coast Guard take steps to ensure all interagency 
agreements are captured in a database or other format and make this 
information readily accessible to program staff. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Coast Guard, DHS, and DOD. 
DHS provided oral comments stating that it concurred with the 
recommendation. The Coast Guard and DOD provided technical comments, 
which we incorporated into the report as appropriate. 

We are sending copies of this report to interested congressional 
committees, the Secretary of Homeland Security, the Secretary of 
Defense, and the Commandant of the Coast Guard. This report will also 
be available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report or need 
additional information, please contact me at (202) 512-4841 or 
huttonj@gao.gov. Contact points for our Offices of Congressional 
Relations and Public: 

Affairs may be found on the last page of this report. Staff 
acknowledgments are provided in appendix II. 

Signed by: 

John P. Hutton: 
Director: Acquisition and Sourcing Management: 

[End of section] 

Appendix I: Scope and Methodology: 

The Coast Guard Authorization Act of fiscal year 2010, as amended, 
specified that "Within 180 days after the date of enactment of the 
Coast Guard Authorization Act for fiscal year 2010, the Comptroller 
General of the United States shall transmit a report to the 
appropriate congressional committees that--(1) contains an assessment 
of current Coast Guard acquisition and management capabilities to 
manage Level 1 and Level 2 acquisitions; (2) includes recommendations 
as to how the Coast Guard can improve its acquisition management, 
either through internal reforms or by seeking acquisition expertise 
from the Department of Defense (DOD); and (3) addresses specifically 
the question of whether the Coast Guard can better leverage Department 
of Defense or other agencies' contracts that would meet the needs of 
Level 1 or Level 2 acquisitions in order to obtain the best possible 
price." 

To determine the Coast Guard's current management capabilities for its 
major acquisition programs, we evaluated the Coast Guard's acquisition 
policies and processes, status of its acquisition workforce, and 
execution of its major programs since we last reported on the Coast 
Guard's acquisitions and acquisition management in June and July 
2010.[Footnote 23] We reviewed Coast Guard acquisition governance, 
policy, and process documents such as the Coast Guard's Major Systems 
Acquisition Manual and Blueprint for Continuous Improvement that have 
been issued, implemented, or updated since July 2010. We also 
interviewed Coast Guard and other Department of Homeland Security 
(DHS) acquisition officials to analyze and explain the factors behind 
the acquisition governance changes as well as how changes have been 
implemented to date through review of meeting briefings, minutes, and 
subsequent decision memos. 

To evaluate the Coast Guard's status of its acquisition workforce, we 
reviewed Coast Guard information on government, contractor, and vacant 
positions to identify any progress made in reducing acquisition 
workforce vacancies and filling critical positions since July 2010 as 
well as any positions that continue to be challenging to fill. 
Additionally, we obtained and analyzed Coast Guard program staff 
information to determine specific programs experiencing staffing 
shortfalls and conducted interviews to supplement Coast Guard 
information and determine the extent to which staffing shortfalls 
affect program execution. 

To evaluate the Coast Guard's execution of its major programs we 
analyzed information on the status of those programs since July 2010 
through reviews of general acquisition status reports (e.g., Quarterly 
Acquisition Reports to Congress and Quarterly Performance Reports), 
program briefings, and acquisition process documents (e.g., 
Acquisition Program Baselines) to determine how many programs have 
cost, schedule, or performance issues based on criteria in the Major 
Systems Acquisition Manual. Further, we analyzed additional program 
performance, schedule, cost, and funding information from the Capital 
Investment Plan, breach memos, and acquisition decision memos to 
identify funding stability issues and the extent to which funding 
issues were factors leading to breaches in established program 
baselines. We also corroborated program information with interviews of 
Coast Guard program staff and interviews with external DHS 
stakeholders, such as acquisition oversight and cost analysis staff in 
the acquisition program management directorate. Moreover, we examined 
and identified best practices from prior GAO reporting on Coast Guard 
funding stability as a factor in program continuity and successful 
outcomes.[Footnote 24] 

To determine the extent to which the Coast Guard leverages DOD and 
other agency contracts or expertise to support its major acquisition 
programs, we examined the Coast Guard's interagency agreements and 
identified the agencies the Coast Guard most commonly used to support 
major acquisition programs. On the basis of this analysis, we 
interviewed Coast Guard officials, as well as DOD, Navy, and Air Force 
officials about resources provided to support Coast Guard major 
acquisition programs. We also discussed with Coast Guard officials any 
current efforts to update the agreements. Using this analysis, we 
identified examples of cost savings and other benefits for selected 
Coast Guard acquisitions. Further, we reviewed relevant GAO and DHS 
Inspector General reports. We corroborated testimonial information 
from interviews with Coast Guard acquisition and program staff by 
reviewing contracts, agreements, and other documents that show the 
amount of resources expended by the Coast Guard for DOD-provided goods 
and services and by interviewing DOD officials at the Naval Sea 
Systems Command, Naval Air Systems Command, Space and Naval Warfare 
Systems Commands, and the Department of the Air Force. 

We conducted this performance audit from January 2011 to April 2011 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

John P. Hutton, (202) 512-4841 or huttonj@gao.gov: 

Staff Acknowledgments: 

Other individuals making key contributions to this report were John 
Neumann, Assistant Director; William Russell; Jessica Drucker; Sylvia 
Schatz; Kenneth Patton; and Morgan Delaney Ramaker. 

[End of section] 

Related GAO Products: 

Coast Guard: Deepwater Requirements, Quantities, and Cost Require 
Revalidation to Reflect Knowledge Gained. [hyperlink, 
http://www.gao.gov/products/GAO-10-790]. Washington, D.C.: July 27, 
2010. 

Department of Homeland Security: Assessments of Selected Complex 
Acquisitions. [hyperlink, http://www.gao.gov/products/GAO-10-588SP]. 
Washington, D.C.: June 30, 2010. 

Coast Guard: Observations on the Requested Fiscal Year 2011 Budget, 
Past Performance, and Current Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-10-411T]. Washington, D.C.: February 
25, 2010. 

Coast Guard: Better Logistics Planning Needed to Aid Operational 
Decisions Related to the Deployment of the National Security Cutter 
and Its Support Assets. [hyperlink, 
http://www.gao.gov/products/GAO-09-497]. Washington, D.C.: July 17, 
2009. 

Coast Guard: As Deepwater Systems Integrator, Coast Guard Is 
Reassessing Costs and Capabilities but Lags in Applying Its 
Disciplined Acquisition Approach. [hyperlink, 
http://www.gao.gov/products/GAO-09-682]. Washington, D.C.: July 14, 
2009. 

Coast Guard: Observations on Changes to Management and Oversight of 
the Deepwater Program. [hyperlink, 
http://www.gao.gov/products/GAO-09-462T]. Washington, D.C.: March 24, 
2009. 

Coast Guard: Change in Course Improves Deepwater Management and 
Oversight, but Outcome Still Uncertain. [hyperlink, 
http://www.gao.gov/products/GAO-08-745]. Washington, D.C.: June 24, 
2008. 

Coast Guard: Status of Selected Assets of the Coast Guard's Deepwater 
Program. [hyperlink, http://www.gao.gov/products/GAO-08-270R]. 
Washington, D.C.: March 11, 2008. 

Coast Guard: Status of Efforts to Improve Deepwater Program Management 
and Address Operational Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-07-575T]. Washington, D.C.: March 8, 
2007. 

Coast Guard: Status of Deepwater Fast Response Cutter Design Efforts. 
[hyperlink, http://www.gao.gov/products/GAO-06-764]. Washington, D.C.: 
June 23, 2006. 

Coast Guard: Changes to Deepwater Plan Appear Sound, and Program 
Management Has Improved, but Continued Monitoring Is Warranted. 
[hyperlink, http://www.gao.gov/products/GAO-06-546]. Washington, D.C.: 
April 28, 2006. 

Coast Guard: Progress Being Made on Addressing Deepwater Legacy Asset 
Condition Issues and Program Management, but Acquisition Challenges 
Remain. [hyperlink, http://www.gao.gov/products/GAO-05-757]. 
Washington, D.C.: July 22, 2005. 

Coast Guard: Preliminary Observations on the Condition of Deepwater 
Legacy Assets and Acquisition Management Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-05-651T]. Washington, D.C.: June 21, 
2005. 

Coast Guard: Deepwater Program Acquisition Schedule Update Needed. 
[hyperlink, http://www.gao.gov/products/GAO-04-695]. Washington, D.C.: 
June 14, 2004. 

Contract Management: Coast Guard's Deepwater Program Needs Increased 
Attention to Management and Contractor Oversight. [hyperlink, 
http://www.gao.gov/products/GAO-04-380]. Washington, D.C.: March 9, 
2004. 

Coast Guard: Actions Needed to Mitigate Deepwater Project Risks. 
[hyperlink, http://www.gao.gov/products/GAO-01-659T]. Washington, 
D.C.: May 3, 2001. 

[End of section] 

Footnotes: 

[1] Section 402(a) of the Coast Guard Authorization Act of 2010, Pub. 
L. No. 111-281, as amended, which added section 566 to title 14 of the 
United States Code, directs GAO to "Within 180 days after the date of 
enactment of the Coast Guard Authorization Act for fiscal year 2010, 
the Comptroller General of the United States shall transmit a report 
to the appropriate congressional committees that--(1) contains an 
assessment of current Coast Guard acquisition and management 
capabilities to manage Level 1 and Level 2 acquisitions; (2) includes 
recommendations as to how the Coast Guard can improve its acquisition 
management, either through internal reforms or by seeking acquisition 
expertise from the Department of Defense; and (3) addresses 
specifically the question of whether the Coast Guard can better 
leverage Department of Defense or other agencies' contracts that would 
meet the needs of Level 1 or Level 2 acquisitions in order to obtain 
the best possible price." 

[2] See GAO, Coast Guard: Deepwater Requirements, Quantities, and Cost 
Require Revalidation to Reflect Knowledge Gained, [hyperlink, 
http://www.gao.gov/products/GAO-10-790] (Washington, D.C.: July 27, 
2010). 

[3] See GAO, Department of Homeland Security: Assessments of Selected 
Complex Acquisitions. [hyperlink, 
http://www.gao.gov/products/GAO-10-588SP] (Washington, D.C.: Jun. 30, 
2010). 

[4] [hyperlink, http://www.gao.gov/products/GAO-10-790]. 

[5] DHS Acquisition Management Directive no. 102-01, revision no. 1 is 
DHS's acquisition management directive, finalized in January 2010 that 
provides guidance on planning and executing acquisitions by providing 
a number of review points for senior acquisition officials to oversee 
investments and by linking DHS requirements, resourcing, and 
acquisition processes. 

[6] The Major Systems Acquisition Manual is the Coast Guard's manual 
by which it articulates its acquisition objectives for planning, 
coordinating, and executing its major programs. 

[7] See GAO, Coast Guard: As Deepwater Systems Integrator, Coast Guard 
Is Reassessing Costs and Capabilities but Lags in Applying Its 
Disciplined Acquisition Approach, [hyperlink, 
http://www.gao.gov/products/GAO-09-682] (Washington, D.C.: July 14, 
2009). 

[8] See GAO, Coast Guard: Change in Course Improves Deepwater 
Management and Oversight, but Outcome Still Uncertain, [hyperlink, 
http://www.gao.gov/products/GAO-08-745] (Washington, D.C.: June 24, 
2008). 

[9] DHS Office of the Inspector General, Coast Guard's Blueprint for 
Acquisition Reform Needs Improved Oversight, OIG-10-84 (Washington, 
D.C.: April 2010). 

[10] See [hyperlink, http://www.gao.gov/products/GAO-09-682]. 

[11] See GAO, Coast Guard: Service Has Taken Steps to Address Historic 
Personnel Problems, but It Is too Soon to Assess the Impact of These 
Efforts, [hyperlink, http://www.gao.gov/products/GAO-10-268R] 
(Washington, D.C.: Jan. 29, 2010). 

[12] See GAO, Coast Guard: Observations on the Requested Fiscal Year 
2011 Budget, Past Performance, and Current Challenges, [hyperlink, 
http://www.gao.gov/products/GAO-10-411T] (Washington, D.C.: Feb. 25, 
2010). 

[13] See [hyperlink, http://www.gao.gov/products/GAO-10-790]. 

[14] See GAO, Acquisition Workforce: Agencies Need to Better Define 
and Track the Training of Their Employees, [hyperlink, 
http://www.gao.gov/products/GAO-02-737] (Washington, D.C.: July 29, 
2002). 

[15] Program execution is a composite metric that includes the 
following factors: earned value management, performance assessment, 
logistics assessment, testing status, risk assessment, and technical 
maturity. 

[16] The acquisition program baseline formally summarizes the 
program's critical cost, schedule and performance parameters, 
expressed in measurable, quantitative terms that must be met in order 
to accomplish the program's goals. 

[17] Two of the remaining 5 Coast Guard programs are in the 
acquisition need phase and have not reached the point at which an 
acquisition performance baseline is required, and three programs are 
operating under the 2007 Deepwater baseline. 

[18] Project resources is a composite metric that includes several 
factors such as budgeting, funding, staffing, and contractor health, 
that is contractor personnel and facilities. 

[19] An Acquisition Program Baseline breach of cost, schedule, or 
performance is an inability to meet the threshold value of the 
specific parameter. 

[20] See [hyperlink, http://www.gao.gov/products/GAO-10-411T] and 
Coast Guard: Progress Being Made on Deepwater Project, but Risks 
Remain, [hyperlink, http://www.gao.gov/products/GAO-01-564] 
(Washington, D.C.: May 2, 2001). 

[21] The Coast Guard's capital investment plan is a 5-year plan that 
includes Acquisition, Construction and Improvements. The Coast Guard 
updates the capital investment plan annually, and it represents the 
Coast Guard's submission for the President's Budget in any given year. 

[22] The Secretary of Homeland Security is specifically authorized by 
14 U.S.C.§ 631 to confer or impose upon the Commandant of the Coast 
Guard any of the rights, privileges, or duties, in respect to the 
administration of the Coast Guard, vested in or imposed upon the 
Secretary by law. 

[23] See GAO, Department of Homeland Security: Assessments of Selected 
Complex Acquisitions, [hyperlink, 
http://www.gao.gov/products/GAO-10-588SP] (Washington, D.C.: June 30, 
2010), and Coast Guard: Deepwater Requirements, Quantities, and Cost 
Require Revalidation to Reflect Knowledge Gained, [hyperlink, 
http://www.gao.gov/products/GAO-10-790] (Washington, D.C.: July 27, 
2010). 

[24] See GAO, Coast Guard: Progress Being Made on Deepwater Project, 
but Risks Remain, [hyperlink, http://www.gao.gov/products/GAO-01-564] 
(Washington, D.C.: May 2, 2001), and Coast Guard: Observations on the 
Fiscal Year 2009 Budget, Recent Performance, and Related Challenges, 
[hyperlink, http://www.gao.gov/products/GAO-08-494T] (Washington, 
D.C.: Mar. 6, 2008). 

[End of section] 

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