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National Defense > Blog > Posts > Coast Guard Expo Opens with Service Facing Uncertainties
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10/24/2011 The Coast Guard’s annual "Innovation Expo" begins Oct. 25 with the service facing budget dilemmas that may sink its plans to fully modernize its fleets of ships and aircraft. Even in the best of times, when the nation homeland security and defense programs were growing in double digits, the Coast Guard was seen as chronically underfunded. Its medium-sized cutters are aging and showing the strains of being past their planned service lives. Deepwater, the 25-year, $24.2 billion program to modernize aircraft, ships and the communication backbone that ties them all together, suffered major setbacks during the past decade. Poor oversight on the part of the service led to cost overruns and canceled programs. The Coast Guard had to ultimately take more control of Deepwater and begin the long process of building up its expertise in managing contracts. Now, with the so-called deficit super committee looking to cut $1.2 trillion from the federal budget over the next 10 years, the service finds itself in an even more precarious position. As the super committee was meeting in early October, John P. Hutton, director of acquisition and sourcing management at the Government Accountability Office, testified before the House Committee on Transportation and Infrastructure’s subcommittee on Coast Guard and maritime transportation that the current Coast Guard modernization goals were “unachievable.” A May estimate that the program costs would grow by 20 percent to $29.3 billion may already be out of date, he suggested. “Additional cost growth is looming because the Coast Guard has yet to develop revised baselines for all assets, including the Offshore Patrol Cutter — the largest cost driver of the program,” Hutton said. Coast Guard Commandant Adm. Robert J. Papp Jr. said in an interview with National Defense that the service has worked hard to build up its acquisition work force so it can avoid the pitfalls of the past (See story here). “Our acquisition outlook is positive,” Papp said at the hearing. “We are on the path of continuous improvement. We have already completed and fielded several new assets, and they are already saving lives … We recognize that there are significant challenges that we must to continue to deliver these assets within the current fiscal environment.” The Offshore Patrol Cutter looks to be one of the service’s major challenges. It would like to deploy 25 of them, but work has not yet begun in earnest. The Coast Guard has released draft specifications for industry comment, but there has not been much progress beyond that. There are still questions as to how much they will cost if every draft requirement were met and whether all 25 can survive the budget battles. Congress and the press have focused attention during the past 10 years on the new National Security Cutters, the largest and most technically advanced ship in the Deepwater program. It suffered growing pains as the requirements changed after 9/11, but the Coast Guard has now taken delivery of three of the planed fleet of eight, and Papp has touted both their capabilities and his acquisition personnel’s ability to keep their costs down. Attention will now turn to the Offshore Patrol Cutters, which the GAO says will cost about $8 billion of the original $24.2 billion total Deepwater price tag. Joe Carnevale, senior advisor to the Shipbuilders Council of America, said in an interview that there may not be money in the budget to fund both the Offshore Patrol Cutters and to complete the National Security Cutter fleet. James Jay Carafano, a national security analyst at the Heritage Foundation, said the National Security Cutters, at $482 million each, are a fat target for the super committee. Hutton’s testimony certainly won’t help. A 2009 fleet mix analysis conducted by the Coast Guard showed that to build everything it needs would cost some $65 billion, a whopping $40 billion than the 2007 baseline. That analysis did not include cost constraints. The Coast Guard has completed work on a second analysis that includes cost constraints, but it has not been released yet, Hutton said. And the longer it takes to replace the aging ships, the more the Coast Guard has to spend on maintaining them, Hutton added. Meanwhile, the Coast Guard wants to put Deepwater behind it — at least the name. Papp said the service no longer wants to use the term. The “system of systems” connotation is no longer valid because each ship and aircraft is a separate acquisition program, he said. (Congress needs to approve the official name change, but hasn’t done so yet.) “System of systems” was a popular catch phrase in the military and homeland security acquisition field, but has fallen out of favor after several high profile programs using the approach ran into trouble, namely the Army’s Future Combat Systems, Custom and Border Protection’s Secure Border Initiative, and Deepwater. The concept calls for multiple platforms to be tied together in a seamless information technology, sensor and communications backbone. In the Coast Guard’s case, the National Security Cutter would be one hub where information could be shared between aircraft and small ships. Hutton’s testimony suggested that there might be more than a name change at work. Only 127 and surface assets, fewer than half of the planned 300, will have information technology systems that enable “full communication as envisioned,” he said.
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