Adm. Thad W. Allen, the commandant of the Coast Guard, said the service’s $24.2 billion Deepwater acquisition program could end up being more expensive and take longer to complete than had been previously estimated.
A Government Accountability Office report from July says costs could increase by as much as $2.7 billion for the program, which aims to overhaul the Coast Guard’s fleet by 2027.
In a wide-ranging interview, Allen discussed with National Defense the cost of the Deepwater program, funding challenges and plans to create a more sustainable Coast Guard. He also said that maintenance costs for aging ships have risen substantially in recent years and that the government’s fiscal crisis will likely mean these ships have to remain in service longer than anticipated.
“It’s very difficult to deal with increased maintenance costs to our legacy fleet and build a new class of cutters at the same time,” he said. “At some point we’re going to be forced to decommission these ships because we can’t afford to operate them.”
The Coast Guard has now rolled what used to be 15 Deepwater programs into one acquisition directorate, which also oversees seven other major programs. Deepwater’s flagship project, deploying the new national security cutters, reached a milestone earlier this month. The service accepted the second of eight new ships — a 418-foot cutter named the Waesche.
“The third cutter, the Stratton, will be launched here very shortly,” Allen said. “We’re dealing with a very complex world with transnational threats, and the demand for our services has never been greater.” It’s possible, he added, that these projects could extend beyond the original 2027 ending date.
Two-and-a-half years ago, Coast Guard officials scrapped Deepwater’s lead contractor, a Lockheed Martin-Northrop Grumman consortium, and began transferring management of the program to its own acquisition shop. GAO said a higher price tag for Deepwater is likely because the contractor team may have underestimated the cost. By bringing the program in-house, the Coast Guard probably will be able to come up with a more realistic — and maybe higher — cost estimate, GAO said. Revised cost and timeline figures will be released in the next six to 12 months, Allen said.
“There used to be a rollup estimate for the entire system, and that included all the cutters, aircraft and sensors that we were buying,” he said. “We’re now taking each component … apart, and we’re doing an acquisition baseline of each. That’s going to provide a check to us of whether we’ve got the right estimates and where cost is going.
“It’s liable to change,” he added. “But we’re going to break this procurement apart and openly compete each one of the assets, so we should get best value.”
The GAO report also says the service has struggled to fill acquisition positions with qualified workers as it moves those jobs from the private sector to the government. In April, the report says, 16 percent of those slots were unfilled. Now, according to data the Coast Guard provided National Defense, 12 percent remain unfilled.
In addition to developing an acquisition work force and upgrading its fleet, the Coast Guard has plans for several technology programs, including sustainability projects and two unmanned aerial vehicle systems. The first system is planned in conjunction with the Navy and will focus on vertical-launch UAVs that could take off from national security cutters and offshore patrol cutters.
The second system is in conjunction with Customs and Border Protection. Already, Allen said, a Coast Guard pilot has been certified through the Department of Homeland Security to fly Predator UAVs. The pilot, Lt. Scott Bennett, was at the Coast Guard conference to discuss the service’s UAV programs. He said in an interview that he participated in an eight-week course in Grand Forks, N.D. He now spends most of his time training at Ft. Huachuca, in Ariz., where he works with Customs UAV pilots to support border-patrol missions.
“It’s a difficult transition,” said Bennett, who has flown helicopters for the past 16 years. “By no means is flying the unmanned aircraft easier.”
This month, Allen said, the Coast Guard will begin evaluating the Predators’ performance in maritime missions during test flights in Florida.
Allen, a 38-year Coast Guard veteran whose four-year term as commandant ends this year, said his not-yet-named successor will face a variety of challenges: balancing the unmanned aviation programs and other technology priorities with the need to create a more sustainable fleet, even as maintenance costs for existing ships increase and financial resources are spread thinner than ever before.
The service, he said, has launched a number of projects that try to cut down on energy costs. For instance, it now powers a training facility in California partly with solar energy and is in discussions to build wind turbines at several of its East Coast facilities. Also, a Coast Guard shipyard in Baltimore, Md., is powered in part by methane gas from a nearby landfill. This project had an up-front cost of $14 million but now saves the service $2 million each year, said Capt. John J. Hickey, commanding officer at the Coast Guard’s integrated-support base in Honolulu, Hawaii.
“Climate change is becoming a bigger and bigger issue,” added Hickey, who oversees the service’s energy projects. “We’re putting a lot more into it and getting funding from many different sources.”
Allen said that a more efficient Coast Guard would free the service from the constraints of unpredictable hikes in gas prices. “We have a lot of prototypes going on across the country on renewable energy,” he said. “The external environment is going to require us to seriously look at how we spend our money and manage our assets.”
Overall, he added, the Coast Guard must find ways to cope as its mission requirements increase at a faster pace than its funding levels. Asked whether the service could be forced to decommission a ship without adding a replacement, he responded, “We would rather not do that.”