JUST IN: Coast Guard Cutter Program Isn't Cutting It, Watchdog Says (UPDATED)
The U.S. Coast Guard’s $12 billion program to acquire 25 new cutters is taking on risk by constructing ships before finalizing the design and some of the critical technologies on the new ship, according to a government watchdog report.
The Offshore Patrol Cutter, or OPC, program began stage 1 construction with an “unstable design,” according to a 2020 Government Accountability Office report. Despite this, the Coast Guard further continued its efforts with this program, simultaneously “progressing through the technology development, design and construction phases,” according to a June 20, 2023, GAO report, “Coast Guard Acquisitions: Offshore Patrol Cutter Program Needs to Mature Technology and Design.”
The GAO determined the Coast Guard does not have a plan in place to ensure the new cutters — which are to replace the service’s aging fleet of 28 medium endurance cutters — will have a fully developed crane, or davit, that can deploy and retrieve a cutter’s small boats before a ship is constructed. “Nor has the program integrated and demonstrated the davit in a realistic environment. Without a plan to mature the davit and demonstrate it before delivery, the Coast Guard risks further delays and costly rework,” the report stated.
Meanwhile, the GAO stated the Coast Guard has not aligned its shipbuilding acquisition policy with leading shipbuilding practices. The Coast Guard is not requiring completion “of basic and functional design and maturity of all critical technologies,” and is employing a high-risk, concurrent approach to shipbuilding — which the GAO flagged in its 2020 report. “Since then, the Coast Guard began construction of OPCs 3 and 4, again without maturing its critical technology or achieving a stable design,” according to the latest report.
“We previously found that, in general, concurrency or overlap between the technology development, design, and construction phases of shipbuilding typically results in poor acquisition outcomes, including cost growth and schedule delays that disrupt multiple ships in the class,” the GAO stated.
The OPC program is in fact behind schedule and over budget, according to the report. The program’s cost estimate increased by $5.1 billion, or 40 percent, between 2012 and 2022. The delivery of the first four cutters has also been delayed by one-and-a-half years due to Hurricane Michael in 2018 and problems in manufacturing the cutter’s propulsion system, the report stated.
Controversy has long surrounded the Offshore Patrol Cutter program, as National Defense has previously reported. The Coast Guard originally awarded Eastern Shipbuilding Group of Panama City, Florida, a contract to build the first nine ships based on the company’s 2016 design. However, after Hurricane Michael, the Department of Homeland Security granted Eastern Shipbuilding Group $659 million in contract relief and rebid the contract for ships five through 25.
Last year, the Coast Guard issued a second-stage contract to Austal USA to construct up to 11 ships. Eastern Shipbuilding Group filed a bid protest with the U.S. Court of Federal Claims over the $3.3 billion award. The case is still pending, the GAO noted.
Furthermore, the OPCs are intended to replace the Medium Endurance Cutters, or MEC, which have all exceeded their service lives. The Coast Guard has started a $1.86 billion acquisition program to extend six of the cutters’ service lives, however, if there are any further delays in the OPC program — which is quite likely due to the amount of uncompleted work — this could lead to failure for the MEC fleet as they age, the GAO noted.
The GAO highlighted its October 2020 recommendations and made five additional ones in the latest report.
The GAO recommended that the Coast Guard come up with a technology maturation plan for the davit and establish a go/no go date to pursue alternate technologies; demonstrate the davit technology in a realistic environment; demonstrate integrated prototypes of critical technologies in realistic environments by preliminary design review for stage 2; update acquisition policy to require future programs to “complete routing and design of major portions of distributive systems” — electricity, water, other utilities — design prior to lead ship construction; and ensure that OPC stage 2 “achieves a sufficiently stable design prior to the start of lead ship construction.”
The Department of Homeland Security concurred with recommendations one, two and four and did not concur with three and five, according to the GAO.
In response to the first two recommendations, the Department of Homeland Security said the Coast Guard has developed a technology maturation plan for the davit that would require a first article test and endurance testing prior to delivery to the shipyard. If an operational davit is not provided by the builder’s trials, the Coast Guard will implement an alternative solution. The current estimated completion date for these davits is December 29, 2023, according to the report.
In its rejection of the third recommendation, “DHS stated that the program does not agree that the definition of a sufficiently stable design includes completion of basic and function design, including routing of major distributive systems and Coast Guard Acquisitions transitive components that affect multiple ship zones,” the GAO stated.
In response to the Department of Homeland Security’s rejection of two of the recommendations, the GAO was raising the matter to Congress.
“In the coming years, Coast Guard will ask Congress to appropriate funding for OPC’s stage 2 ships, as well as other programs like the Polar Security Cutter,” the GAO stated. “Without a policy in place that requires the Coast Guard to achieve design stability that follows shipbuilding leading practices, Congress will likely not have assurance that the Coast Guard is minimizing risk and the department is making sound investments.”
Correction: a previous version of this article had a typo in Austal USA.