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IMPROVING AND STREAMLINING THE COAST 

GUARD’S ACQUISITION PROGRAM 

(112–25) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

APRIL 13, 2011 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

FRANK C. GUINTA, New Hampshire 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

STEPHEN LEE FINCHER, Tennessee 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

VACANCY 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

FRANK A. LOBIONDO, New Jersey, Chairman 

DON YOUNG, Alaska 

HOWARD COBLE, North Carolina 

ANDY HARRIS, Maryland 

FRANK C. GUINTA, New Hampshire 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

JEFFREY M. LANDRY, Louisiana, 

Vice Chair 

JOHN L. MICA, Florida (Ex Officio) 

RICK LARSEN, Washington 

ELIJAH E. CUMMINGS, Maryland 

CORRINE BROWN, Florida 

TIMOTHY H. BISHOP, New York 

MAZIE K. HIRONO, Hawaii 

MICHAEL H. MICHAUD, Maine 

NICK J. RAHALL II, West Virginia 

(Ex Officio) 

(II) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

Currier, Vice Admiral John P., Deputy Commandant for Mission Support, 

U.S. Coast Guard ................................................................................................. 5 

Hutton, John P., Director of Acquisition and Sourcing Management, Government Accountability Office .................................................................................. 5 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Currier, Vice Admiral John P. ................................................................................ 20 

Hutton, John P. ........................................................................................................ 31 

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(1) 

IMPROVING AND STREAMLINING THE COAST 

GUARD’S ACQUISITION PROGRAM 

WEDNESDAY, APRIL 13, 2011 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COAST GUARD AND

MARITIME TRANSPORTATION, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2167, Rayburn House Office Building, Hon. Frank LoBiondo 

(Chairman of the subcommittee) presiding. 

Mr. LOBIONDO. Good morning. The subcommittee will come to 

order. 

The subcommittee is meeting this morning to examine the status 

of the Coast Guard’s acquisition programs. In 2002, the Coast 

Guard signed the contract to begin the acquisition of the program 

formally known as the Integrated Deepwater System. Deepwater 

was supposed to provide a complete recapitalization and modernization of the Service’s larger aging assets as well as an outdated communications and information system over a 20-year period. Well, at least that is what we were promised. 

Now, nearly a decade later, the Service has less to show for their 

investment of over $7 billion in taxpayer money than it should. Although there has been some added capability with a few recapitalized assets delivered to date, the fact remains we are not where we 

should be. In fact, I don’t even think we are close. The program remains significantly over budget and several years behind schedule. 

In addition, serious questions remain about whether the assets 

being delivered meet expected capabilities. I will remind everyone, 

this was a big selling point with Deepwater, the capabilities aspect 

of this. The delays in the recapitalization program have put a tremendous strain on legacy assets which has resulted in increased 

operating costs, a rising number of operational failures, and large 

gaps in mission readiness and performance. 

One of the many examples of these problems is the National Security Cutter. To date, the Service has taken delivery of two National Security Cutters. Both vessels represent tremendous improvements over the 45-year-old vessels they are replacing. However, the program is currently 2 years behind schedule and 38 percent over the revised 2007 budget. In addition, both vessels will require substantial retrofits to meet expected service lives. That one 

is really hard for me to understand and accept. 

Furthermore, both vessels were designed to carry two classes of 

stern-launched small boats, each with different size and capability 

2 

to improve the cutter’s range and effectiveness. That was viewed 

as a very good thing. The larger of the two boats did not perform 

as required and the smaller boat had to be modified to perform correctly. The Service recently solicited industry for a solution to replace both classes of small boats. Meanwhile, the two NSCs operate 

without expected capabilities. You just don’t expect that from new 

assets, I am sorry. 

The NSC was also designed to carry up to four vertical takeoff 

unmanned aerial vehicles to extend the cutter’s range and effectiveness, but neither vessel is outfitted with the VUAVs. In fact, 

the Coast Guard abandoned its original plans to acquire VUAVs. 

Finally, the NSC was intended to operate for 225 days at sea, 

but the Coast Guard has yet to implement the crewing plan to 

make that a reality. 

As the chart on the screen indicates, the NSC is not alone in suffering from setbacks. Using the Coast Guard’s 2007 re-baseline as 

a guide, of the Coast Guard’s 17 large acquisition programs, 10 are 

over budget, 8 are behind schedule, 6 are both over budget and behind schedule. If we use the original Deepwater baseline as a 

guide, nearly all of these programs would be over budget and behind schedule. 

For the information of Members, the chart on the screen primarily uses the Service’s 2007 re-baseline as a point of comparison. 

The Service recently completed another effort to review the types 

and numbers of assets needed to meet mission requirements. This 

subcommittee has repeatedly requested this document—I reiterate, 

has repeatedly requested this document—because it has the potential to significantly increase costs and further delay asset deliveries. Unfortunately, the Service refused to provide it to us. 

Let that sink in for a minute. 

Meanwhile, delays in the Coast Guard’s recapitalization program 

have placed significant strains on legacy assets. The continued reliance on these assets, which have surpassed their planned service 

lives, are failing at increasing rates, has undermined mission readiness and performance. The Service estimates a 23,000 mission hour 

gap exists in the maritime patrol aircraft fleet, a 33,000 hour mission gap in the major cutter fleet, and a 103,000 hour mission gap 

in the patrol boat fleet. Furthermore, the cost to maintain legacy 

assets continues to grow at the expense of investment in new assets in what Admiral Allen used to call a ‘‘death spiral.’’ 

Finally, in order to pay for the Deepwater program, several sacrifices were made in the budgets of other critical acquisitions. As 

a result, the rehabilitation of dilapidated housing for our service 

men and women has been put off and needed investment in buoy 

tender and icebreaker fleets have been delayed. In fact, the Coast 

Guard has at least eight classes of assets where the need for an 

acquisition program can clearly be demonstrated, but no acquisition plan or budget even exists. 

The Coast Guard leadership we have here today was not here 10 

years ago and is not responsible for the past problems. We understand that. But I was here 10 years ago and I know what we were 

promised, and this is not it. And this is the biggest group of cheerleaders that you are going to have in the Congress of the United 

States that you are before here today, and all this that I am talkVerDate Aug 31 2005 16:08 Jan 11, 2012 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\CG\4-13-1~1\65721.TXT JEAN
3 

ing about that is going on is going to be absorbed by Members who 

are not paying the attention that we are, and it is not leading to 

a good thing. 

The Coast Guard has made great strides to turn the program 

around in recent years, and I commend them for that. But now it 

is time to deliver results for the taxpayer, and in particular for the 

men and women of the Coast Guard, who desperately need these 

assets to successfully conduct their missions. 

I hope, I sincerely hope our witnesses will explain what the Service intends to do to mitigate legacy asset failures and short side infrastructure backlogs while ensuring the upgraded assets and technology set to be delivered in the future meet the mission need requirements and come in on budget and on time. 

With that, I would like to yield to Mr. Larsen. 

Mr. LARSEN. Thank you, Mr. Chairman, and thank you for convening this morning’s hearing to continue the subcommittee’s oversight of the U.S. Coast Guard’s major acquisition programs and 

policies. I appreciate the opportunity to examine the status of the 

Coast Guard’s acquisition activities and to assess current acquisition management challenges. 

The Coast Guard is a multimission agency with a diverse portfolio of operations, including vessel inspections, search and rescue, 

port security, and oil spill response. In short, our Nation’s guardian 

of the sea protects our coasts, ensures safe and efficient maritime 

commerce, and supports hundreds of thousands of maritime jobs. 

So when the Coast Guard began recapitalizing in 1996, it set out 

a daunting task. The Coast Guard intended to replace or modernize 

its aging fleet of over 90 cutters and some 200 aircraft, and it attempted to do so through an unproven procurement process using 

a single entity to fulfill its needs. 

By the time the Deepwater contract was executed with the integrated Coast Guard systems in June 2002, GAO and others had already raised concerns. As was made painfully clear during a course 

of subcommittee oversight hearings on this issue during the 110th 

and 111th Congresses, the Coast Guard’s past oversight and management of its major system acquisition, especially of the $27 billion Deepwater program which was to procure these entirely new 

fleets of vessels and aircraft, was woefully insufficient and ineffective. 

Regrettably, the Service’s inadequate oversight at the time led to 

substantial cost overruns, design flaws, delays in delivery of new 

assets, and perhaps worst of all, a diminution of the Coast Guard’s 

operational capabilities at sea and in the air. The GAO reaffirmed 

this determination through multiple analyses. GAO has conducted 

no fewer than 15 audits and evaluations of the Deepwater program 

since 2001. 

So I look forward to hearing this morning from John Hutton, 

GAO’s Director for Acquisitions and Management, as the GAO releases its latest update on the Coast Guard’s progress in reforming 

this acquisition process. 

To provide the necessary course correction, the Congress included 

in title IV of last year’s Coast Guard reauthorization legislation 

specific provisions to overhaul the Service’s acquisition policies. 

New requirements were the appointment of a chief acquisition offiVerDate Aug 31 2005 16:08 Jan 11, 2012 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\CG\4-13-1~1\65721.TXT JEAN
4 

cer; imposition of a system of acquisition controls to ensure that 

operational requirements are well defined before initiating acquisition efforts; new requirements to ensure all required assets undergo thorough testing; and the development and maintenance of an 

acquisition and management career path within the Service. So I 

am very interested in hearing from Admiral Currier on the Coast 

Guard’s progress in implementing these reforms. 

Mr. Chairman, acquisition policy is not just a function of the 

process. Our policies are also reflected in budgetary resources we 

devote to programs. At our budget oversight hearing on March 1st 

we heard a lot about doing more with less. However, I believe that 

we have established that the more likely outcome of fewer resources for the Coast Guard is that it will be doing less with less. 

While recent budget cuts have largely spared the Coast Guard, 

the massive cuts in discretionary spending in the budget resolution 

presented to the House and due on the floor Friday do not portend 

full funding of the Coast Guard’s asset replacement program. 

The Coast Guard’s acquisition, construction and improvement ac- count average was $1.38 billion from fiscal year 2007 through the 

request for 2012. However, the Coast Guard’s projected funding for 

fiscal years 2013 through 2016 average $1.9 billion annually, a 

$520 million annual increase. This level greatly exceeds any historical levels and will likely need to be adjusted down unless Congress 

makes other choices. 

We are past the time when we can discuss cuts in the abstract. 

Proposed cuts will have consequences. Can the Coast Guard respond to oil and other spills? Can it respond to a tsunami on the 

West Coast? Can it perform all the missions we placed upon it? 

So I look forward to working with Admiral Currier and the Coast 

Guard in assessing the real impacts of possible cuts. 

The subcommittee also, Mr. Chairman, I think should not overlook the critical importance of other ongoing Coast Guard acquisition programs, such as Rescue 21, the Service’s sustainment programs for legacy assets that remain in service, and several 

unbudgeted acquisition needs, including the need, Mr. Chairman, 

not surprisingly hearing it from me, the need for polar icebreakers. 

It remains paramount that the subcommittee, the GAO and 

other observers continue to shine a light on the Coast Guard as we 

move forward to ensure that its acquisition programs are mission 

driven, cost-effective, and, most importantly, as you have pointed 

out so ably, Mr. Chairman, accountable. 

Mr. Chairman, the Coast Guard and the men and women who 

serve need the capabilities to address the myriad of demands we 

place upon them. But as you noted, we need to get this right. History demonstrates the Coast Guard will be relying on the assets it 

purchases today for many more years than anticipated. We also 

need to be practical and recognize that a course correction of this 

magnitude simply does not happen overnight. 

With that, Mr. Chairman, I yield back and look forward to our 

witnesses. 

Mr. LOBIONDO. Thank you, Mr. Larsen. 

Ms. Hirono, do you have a statement? 

Ms. HIRONO. Very briefly. Thank you, Mr. Chairman and Ranking Member Larsen. 

5 

I join my colleagues in reiterating our support for the Coast 

Guard. In Hawaii, particularly District 14, is the largest area that 

the Coast Guard has responsibility for. I know that members of 

District 14 were involved in helping with tsunami disaster relief in 

Japan and you were involved in the Deepwater disaster. So we 

know the good works that you do. But this committee is also very 

aware of the acquisition problems that you have had, and I sat in 

on hearings of the full committee regarding your Deepwater project 

problems. 

So, as we look at the scarce resources and the cuts that are coming down the pike, I really want to reiterate my support for what 

you are doing. We need to be assured of the accountability and the 

effectiveness of the operations that you are undertaking with the 

resources that you have and the reforms you have made, what you 

are implementing and putting in place to make sure you are able 

to do as good a job as possible for all the demands made only your 

service. 

Thank you. 

Mr. LOBIONDO. Thank you. 

Our witnesses today include Coast Guard Vice Admiral John 

Currier, the Deputy Commandant for Mission Support, and Mr. 

John P. Hutton, Director of Acquisition and Sourcing Management 

for the GAO. 

I also would like to thank Admirals Atkins, Taylor and Rabago, 

who lead the Coast Guard’s Capabilities, Budget and Acquisition 

Directorates for attending today. I would like to welcome our witnesses and thank them for being here. 

Admiral Currier, please proceed. 

TESTIMONY OF VICE ADMIRAL JOHN P. CURRIER, DEPUTY 

COMMANDANT FOR MISSION SUPPORT, U.S. COAST GUARD; 

AND JOHN P. HUTTON, DIRECTOR OF ACQUISITION AND 

SOURCING MANAGEMENT, GOVERNMENT ACCOUNTABILITY 

OFFICE 

Admiral CURRIER. Thank you, Mr. Chairman. 

Chairman LoBiondo, Ranking Member Larsen and members of 

the subcommittee, I thank you for the opportunity to update you 

today on Coast Guard acquisition programs and the outlook of our 

ongoing and much needed recapitalization portfolio. I have prepared a full written statement and ask for its inclusion in the 

record, sir. 

Mr. LOBIONDO. Without objection, so ordered. 

Admiral CURRIER. Thank you. 

In recent years, the Coast Guard has made noteworthy improvements in the acquisition program. The creation of the Deputy Commandant for Mission Support, assumption of systems integrator responsibilities for all major acquisition programs, creation of a disciplined capabilities development and the strengthened oversight 

by Coast Guard technical authorities better positions the Service to 

manage its acquisitions with greater efficiency and be prepared to 

make tough trade-offs when it is due in the challenging fiscal environment that we face today. 

These changes would not have been possible without the leadership and effective oversight of this subcommittee through the enVerDate Aug 31 2005 16:08 Jan 11, 2012 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\CG\4-13-1~1\65721.TXT JEAN
6 

actment of the Coast Guard authorization bill of 2010. This act, 

built on several initiatives that we had started in the Coast Guard 

and sought to implement, provided us with critical new authorities 

to strengthen our acquisition workforce. 

In my new role as Deputy Commandant for Mission Support, formerly Chief of Staff, I would also like to take this opportunity to 

personally thank you for your contributions, continued support and 

oversight. 

The Commandant and the administration consider recapitalization one of our service’s highest priorities. The administration recognizes the urgent need by proposing the largest AC&I request in 

Coast Guard history. However, the deteriorating state of our legacy 

cutters, aircraft, boats and shore facilities are impacting the ability 

of our men and women in the field to achieve mission success. 

We find ourselves in a state of block obsolescence, with many of 

our assets, including aircraft and vessels, simultaneously reaching 

the end of their service lives. Our aging legacy fleet is both increasingly unreliable and increasingly expensive to maintain effectively. 

We need to replace these ships and aircraft as soon as possible. 

Our acquisition program is designed to provide these necessary assets and capabilities at the best value to the American taxpayer. 

Despite the opportunities and challenges that we continue to 

face, the Coast Guard is achieving mission success right now with 

our newly delivered assets, our capabilities and our infrastructure. 

The National Security Cutters Bertholf and Waesche are operational today. Bertholf recently interdicted more than 12,500 kilograms of cocaine. Her commanding officer reported that Bertholf 

easily prosecuted and tracked multiple targets, including go-fast 

boats, using the cutter’s full electronic suite of sensors and communications gear. They were able to coordinate small boat, maritime 

patrol aircraft and helicopter end game tactics to achieve mission 

success. 

Air Station Miami, the HC–144 maritime patrol aircraft, or MPA, 

successfully identified and helped interdict two vessels attempting 

to smuggle drugs into the U.S. and accomplished one search and 

rescue mission in a single 14-hour patrol, something that we would 

never have been able to oh do with our previous assets. 

A response boat medium stationed in San Juan was recently 

credited with intercepting 95 bales of cocaine. These boats are providing thousands of hours of effective search and rescue and port 

security operations around the Nation. 

Our Rescue 21 program has resulted in over 200 lives saved in 

28,000 rescue missions due to its enhanced capabilities. 

We are planning to launch the Fast Response Cutter this month. 

The project is on budget, and the fiscal year budget request contains a request for six more of these vessels in a fixed price environment. 

Our general transition to fixed price contract structures represent itself growing maturity in the stability of our acquisition 

programs the Coast Guard has awarded directly to prime contractors for the National Security Cutter, maritime patrol aircraft and 

other assets in our relationship with ICGS as it ends and we closely integrate our technical authorities at all stages of the acquisition 

and sustainment process. 

7 

All of our acquisition project managers are certified currently at 

the highest levels of DHS certification levels. These actions have 

enabled the Coast Guard to generate more predictable costs and 

stabilized requirements at decreased risk to the government. 

We are faced with many challenges, managing a multiyear, 

multibillion-dollar acquisition portfolio in today’s constrained fiscal 

environment. At the same time, our legacy asset fleet is expensive 

to maintain and less reliable to operate. 

Our program of record represents a mix of assets necessary to 

carry out our statutory missions. We are replacing a larger number 

of legacy assets with fewer, more capable aircraft and cutters. We 

have put in place a program of rigorous and ongoing analysis of 

Coast Guard mission requirements to define our acquisition needs. 

We are constantly making trade-offs to better balance our performance and will continue to do so in the future. 

The fiscal year 2012 budget request and the capital investment 

plan represent our service priorities and reflect our commitment to 

the Department and the administration rebuilding the Coast 

Guard. 

We are acquiring an enduring versatile capability in this fleet 

that will protect American lives, property and resources over the 

next several decades. The Coast Guard is 5 years into a long journey to rebuild its acquisition enterprise, integrate mission support, 

introduce rigor into requirements generation, and strengthen our 

capabilities in contracting to create a regime where costs are predictable, program risk is identified and schedules are met. 

I can attest today that we have begun to demonstrate marked return on investments as we recapitalize the Coast Guard. I look forward to further discussing these endeavors and stand ready to answer any questions you may have. 

Thank you, Mr. Chairman. 

Mr. LOBIONDO. Thank you, Admiral. 

Mr. Hutton, please. 

Mr. HUTTON. Thank you, Chairman. 

Chairman LoBiondo, Ranking Member Larsen and members of 

the subcommittee, thank you for inviting me to discuss the Coast 

Guard’s efforts to improve its management of its major acquisition 

programs. 

Drawing from our new report that we released today, I will highlight some of the Coast Guard’s recent efforts to improve its acquisition management as well as some of the program challenges. 

Then, based on some ongoing work, I will provide an update on the 

Coast Guard’s efforts to address a recommendation we made last 

year for them to complete an analysis that clarifies the quantities, 

mix, and costs of Deepwater assets considering the fiscal constraints. 

The Coast Guard continues to take steps to improve its acquisition management. Specifically, the Coast Guard has updated its 

policies and processes, increased its in-house acquisition workforce 

capacity, leveraged DOD agreements to support its major acquisition programs, and to further leverage DOD expertise, we recommend in today’s report that the Coast Guard take some additional steps to help better ensure that its program staffs have 

8 

ready access to the 80-plus interagency agreements and other arrangements with DOD. 

Now, while the steps the Coast Guard continues to take are positive, most major programs experience some challenges in program 

execution, resources and/or schedule. The report we are issuing 

today covers these challenges in more detail. However, I would like 

to focus on one particular challenge, and that is unrealistic budget 

planning, which has contributed to program breaches and will likely lead to future breaches. 

When a current 5-year capital investment plan reflects funding 

levels that are significantly lower than initially planned, that program is prone to fall behind. In fact, several major acquisition programs reported a baseline breach due at least in part to funding 

profile changes resulting from the 2011 capital investment plan. 

More breaches may occur if the Coast Guard continues to conduct 

long-term planning based on funding levels that are much higher 

than past appropriated or requested levels. For example, the Coast Guard plans on $2.35 billion in acquisition funding in fiscal year 2015. That is an amount that will include construction of three major surface assets, the National Security Cutter, the Offshore Patrol Cutter and the Fast Response Cutter. But the Coast Guard has not received more than $1.5 billion 

for its acquisitions in any recent year, and with the rapidly building fiscal pressures facing our government, this unrealistic budget 

planning exacerbates the challenges the Coast Guard programs 

face. 

To its credit, the Coast Guard has acknowledged that it needs to 

establish some priorities among their major programs and make 

these trade-offs between programs to ensure that the budget planning fits with historical budget constraints. The key will be whether and how the Coast Guard makes such trade-offs. 

This is a key moment in time, and it is important that the Coast 

Guard does not push trade-off decisions to tomorrow. This, of 

course, brings me to my last point, the Coast Guard’s Deepwater 

fleet mix analysis, which began in October 2008, and our July 2010 

recommendation that the Coast Guard assess their costs, capabilities and quantity trade-offs within the Deepwater program in light 

of the program cost increases. 

Last July, we reported that the Coast Guard initiated a second 

phase of its fleet mix analysis because the first phase, which was 

completed in December 2009, was not cost constrained. Since that 

time, we received and have been reviewing the phase one analysis 

and continue to do so. 

The first phase assessed asset capabilities and mission demands 

to identify a fleet mix that would help meet the Coast Guard’s 

long-term mission performance goals. The result was what the 

Coast Guard termed an objective fleet that was about twice the size 

of the current Deepwater program of record, and the analysis indicated, and this is a Coast Guard analysis, an estimated acquisition 

cost of as much as $65 billion. The analysis also assessed other 

fleet mixes that fell between the program of record as indicated in 

the current 2007 DHS-approved baseline and the objective fleet, 

but did not consider any fleet mixes smaller than the baseline program. 

9 

While the second phase of the analysis includes cost constraints, 

they appear to be unrealistic given the level of past appropriations 

and the current fiscal challenges facing our Nation. The upper 

bound is about $1.7 billion per year. That is more than Congress 

has enacted for the entire Coast Guard’s acquisition portfolio in recent years. More importantly, we understand that the Coast Guard 

does not plan to assess any fleet mixes smaller than the program 

of record, a step that would help them better prepare for and make 

any tradeoff decisions, given our Nation’s fiscally constrained environment. 

Mr. Chairman, this concludes my prepared statement. I would be 

happy to respond to any questions you have. 

Mr. LOBIONDO. OK. I thank you. 

Mr. Hutton, if any of us are oblivious to the pressures, the budget pressures and the fiscal crisis we are in, I don’t know where you 

have been, so most of the people in here understand it. But what 

do you consider the greatest risk if the Coast Guard doesn’t get 

their act together? 

Mr. HUTTON. Well, first of all, as we have noted, I think one of 

the important things is that you want to have a program that the 

acquisition directorate can execute. To do that, you have to make 

sure that your planned resources are going to marry up with the 

acquisition strategy. If you don’t have that, you are going to have 

situations where every year you start changing your programs to 

compensate for this unrealistic planning. I think that is a big part 

of trying to address this issue. I think it is a good thing that they 

are doing their fleet mix analyses. It is a continuous effort, I believe, on their part. 

What we have been talking about here though is in the current 

fiscal constraints, it seems reasonable that you would also consider 

some of the trade-offs and scenarios if you don’t get the money you 

need, so you can start looking ahead and thinking how you will 

react. 

As Admiral Currier mentioned, he said it is very expensive to 

keep the legacy fleet operating, and you have to constantly make 

those trades between sustaining the old and acquiring the new. 

And I think the budget and the connection with the acquisition 

strategy is a key component of that. 

Mr. LOBIONDO. Thank you. 

Admiral Currier, Chairman Mica and I requested the fleet mix 

analysis 14 months ago and we still haven’t received it. At our 

hearing last month, Admiral Papp promised us he would provide 

a timetable on when we would receive the document. We have not 

received the timetable. 

When will we receive the cost constrained fleet mix analysis? 

Admiral CURRIER. Thank you for that question, Mr. Chairman. 

The phase one of the fleet mix analysis that was just mentioned 

by Mr. Hutton, which is basically a survey from a threshold to an 

objective of what our fleet could be, and supports, by the way, the 

program of record, has been submitted to the Department for review. Phase two of that will be completed this summer. Phase two 

is the overlay that gives the costed aspects of the fleet so that we 

can develop a more complete picture of what our needs might be. 

10 

But I want to reiterate, fleet mix analysis number one, much of 

the data of which is in the GAO report that was delivered today, 

shows a threshold which is the program of record out to an objective which expands the Coast Guard asset base to more completely 

satisfy the 11 statutory missions that we are charged with. 

Specifically to your point, fleet mix analysis one is in review at 

the Department. We are using all of our capabilities to ensure that 

it is expeditiously reviewed and that it is provided to you, sir. I am 

unable to do that directly at this time. 

Fleet mission analysis two, phase two costed, will be completed 

this summer and submitted this summer to the Department for review as a complete package. 

Mr. LOBIONDO. Well, thank you, and I appreciate that. But here 

is a little tip: When a request is made and 14 months go by and 

we really don’t hear anything, this is not a good thing. And when 

the Commandant makes a statement and we still don’t have what 

the Commandant told us we would get, that is a problem. So there 

needs to be at the very least an improved level of communications 

so that we can understand what you are doing or why we are not 

getting something. We are trying not to be unreasonable here, but 

from our perspective, we are your biggest cheerleaders, it appears 

we are being ignored. 

A couple more questions before I turn it over to Mr. Larsen. Assuming the fiscal year 2011 appropriations become available as we 

expect they will be at the end of this week, when will the Coast 

Guard sign a contract for NSC number 5? 

Admiral CURRIER. Sir, if the appropriation is approved and we 

receive the money, we could award the contract for NSC 5, the production contract for NSC 5, in the fourth quarter this summer, the 

fourth quarter of the fiscal year this summer, late in the summer. 

We have the proposal in hand and we have already started close 

review. 

Mr. LOBIONDO. Thank you. The NSC was designed and built to 

carry out as many as four vertical takeoff and unmanned aerial vehicles. We talked about that. It was expected to extend the range 

and effectiveness. We talked about that. A variety of other things 

it was designed to replace and enhance the capabilities. 

How do you justify the cost of the National Security Cutter if, according to the Inspector General, it is only providing a similar level 

of capability as the vessel it is replacing? 

Admiral CURRIER. Thank you for that question, sir. 

Plain talk, National Security Cutter is much more capable in its 

current state than the High Endurance Cutter ever was. Its ability 

to carry an H–60 aircraft plus H–65s, its ability to carry two H– 

65 aircraft when required, its electronics detection suite, its radars, 

all of its detection and electronics suite, make this ship much more 

effective, much more effective than the current assets that we 

have. 

We won’t achieve full potential of this ship until we get unmanned aerial vehicles in a proper regime of maritime patrol overhead to maximize the capabilities of the ship. But currently, as it 

sits in the water, it is significantly more capable than the High Endurance Cutters that we have today. 

Mr. LOBIONDO. Thank you, Admiral. 

11 

Mr. Larsen. 

Mr. LARSEN. Thank you, Mr. Chairman. Rather than jump to a 

different issue, I will just stick with the theme on this particular 

issue, the security cutter, and the unmanned vertical aerial vehicles. 

What is the status of the effort to develop one and how is the 

Coast Guard collaborating with the DOD to adapt already proven 

technology for the Coast Guard’s own use? 

Admiral CURRIER. Sir, I will give you just a bit of history on this 

thing. The unmanned aerial vehicle, we originally entered an endeavor through our commercial systems integrator that we previously had a contract relationship with. We didn’t see this as coming to fruition. It was leading science, it was expensive and it was 

high risk. 

We changed our philosophy, our approach to this, and went with 

DOD. The Coast Guard is a midsized Federal agency and is very 

capable, but it has no business leading science in something as 

complex as unmanned aerial vehicles, particularly rotary wing. 

We have partnered closely with the Naval Air Systems Command. As a matter of fact, I had a discussion yesterday with its 

Commander, talking about our partnership on unmanned aerial vehicles. We are closely watching their Fire Scout Program. We think 

when they bring that home, that will satisfy many of our mission 

requirements and be a great fit for the National Security Cutter. 

But, as I said before, to manage costs, manage risks with this 

leading of science type enterprise, we chose to change directions 

and closely ally with Navy through Naval Air Systems. 

Mr. LARSEN. I don’t mind that you changed direction to partner 

with the Navy. I am just interested in the status. As you have 

noted, having the capability of the National Security Cutter to the 

extent that we want it likely would include having the ability to 

have the unmanned aerial vehicle. So getting to that point is important. I need to move on. 

This issue with regards to the ACI account and the projected 

budget, what you have projected, versus what historically you have 

received, that is troubling to me because it tells me that a man’s 

reach should exceed his grasp. Robert Frost, right? But you have 

never been able to grab it in the budget. So how is the Coast Guard 

going to approach that? 

Admiral CURRIER. Well, sir, first of all, we are caught in a difficult position, recapitalizing the entire asset base of the Service, 

our major assets in the Service. We are looking at a two to three 

decade recapitalization process, the life cycles of these assets. They 

are all coming due at the same time. And as the Chairman mentioned, you don’t need to hear from me what an austere fiscal environment this is. 

But our requirements are our requirements. We have to budget 

to the minimum level that we feel we can achieve that will allow 

us to continue this recapitalization, because if we don’t do it in an 

expeditious manner, one of the maxims of acquisition is delays 

equal cost. So if we are not aggressive about pushing forward with 

this recapitalization, we can only expect more expensive legacy assets and more expensive new assets because of the delays that 

were incurred. 

12 

I understand the tensions here. I understand that we are asking 

more than we have gotten before. But I believe, sir, that we have 

proved our value to the Nation, and it is really up to Congress and 

the will of the people if they are willing to make that investment 

in their Coast Guard. I think it is justified. 

Mr. LARSEN. Does the fleet analysis include an analysis of your 

sustainment budgets as well and how those fit into your legacy assets to be sure those can continue while you get to the point where 

you are actually putting new assets online? 

Admiral CURRIER. Sir, I believe the fleet mix analysis is forward 

looking. I think it defines requirements for fleet mix of the future. 

There may be some mention in the phase two of this, in the costed 

portion of the cost of legacy assets and the offset of the new assets. 

But its focus is forward looking. 

Mr. LARSEN. Well, let me ask then retrospectively how you are 

thinking about your sustainment budget to the extent you discuss 

block obsolescence. Does that sustainment budget, sustainment approach you are taking, does it anticipate that you are going to be 

shedding assets? You are prioritizing within your legacy assets as 

well, I assume, putting sustainment dollars into things that you 

think can stretch out. 

Admiral CURRIER. Absolutely. Yes, sir. And to be truthful, as we 

bring these major new assets on board, it is unrealistic for us to 

expect to maintain a constant level of service because of the requirement to retire legacy assets. This would be just like buying a 

new car and holding the old car so that you never miss anything. 

It just doesn’t work that way. 

We are going to have gaps in operational capability, full well 

knowing that we are going from a fleet of 44 major cutters to 33 

major cutters. But we feel that with the asset base as laid down 

and as designed to be employed, that we will be better off. We will 

actually enhance our capabilities into the future. There will be a 

dip in operational effectiveness and capability and operational 

hours though as we transition. 

Mr. LARSEN. Mr. Chairman, I will have more questions. 

Mr. LOBIONDO. Thank you. Ms. Hirono. 

Ms. HIRONO. Thank you. Admiral, I am very gratified that the 

14th District will be receiving four new helicopters to replace aging 

ones. That is really good news. On the other hand, I am sure that 

there are a lot of other places that are waiting, clearly from your 

testimony, for replacing aging assets. 

So I am wondering, in your testimony you noted that you have 

established a senior level governance body known as an Executive 

Oversight Council. Is this the entity that determined that the 14th 

District should get the four helicopters? Is this council working to 

use your assets in the best way possible? 

Admiral CURRIER. Well, ma’am, thank you for that question. I 

think I will answer it in two quick very brief ways. 

First of all, our operational force layout is determined by our 

operational commanders in concert with that Executive Oversight 

Council through our Capabilities Directorate headed by Admiral 

Atkins here today. So that is an operational question of where the 

assets go. 

13 

How the assets are recapitalized is certainly the purview of the 

Executive Oversight Committee, and that body I am particularly 

proud of. For the first time, it integrates the supporters, the 

acquirers, the requirers and the resource people into a body where 

discussions are held on capabilities, costs and technical 

achievability, a great step forward for the Coast Guard. 

So thanks for the question. Hopefully that provides you an answer. 

Ms. HIRONO. Well, it is pretty clear that the retiring of the legacy 

assets and replacement of these assets with new assets, that the 

new assets have to be able to do a lot more, the technology involved 

has to be vastly improved. So who oversees your contractors or 

whoever is coming up with the designs for you to approve so that 

your capacity and capability is increased even as you have fewer 

numerical assets? 

Admiral CURRIER. Well, the design is—first of all, our requirements are mandated. We come up with the requirements. We go 

out to industry for design. They have to meet those requirements. 

That is where the technology refresh happens. The governance of 

that process is this Executive Oversight Council. But it is a normal 

acquisition process on how we upgrade. It meets our concept of operations, our requirements, the attributes we get from industry 

when we put out a proposal, and all of that is governed through 

the headquarters Executive Oversight Council. 

Ms. HIRONO. Is that oversight council working a lot better than 

the times that you have regarding your Deepwater project and all 

of the overruns and problems you have with that? Is this council 

doing what it needs to do to prevent the kind of problems you have 

with your Deepwater project? 

Admiral CURRIER. Yes, it is, Congresswoman. I was part of acquisitions back in 2006 and was one of the architects of what is now 

our transformation into the new acquisition enterprise, which, by 

the way, just isn’t acquisition. It integrates support, technical authority, resources and requirers on one group for the first time. I 

think this is a model for government. I think we are on the cusp 

at this time of showing true return on investment through the 

processes that we have put in place as we continue the recapitalization of the Coast Guard. 

Ms. HIRONO. One last question. Mr. Hutton, you have heard the 

Admiral talk about this council and some of the processes that they 

have put in place to enable them to do a much better job. Are you 

in agreement that these are important and significant steps? 

Mr. HUTTON. Specific to the council, I would agree that that is 

the first time, as the Admiral stated, where they are trying to 

bring the logistics and the requirements people together and the 

acquisition people and the resource people, and if the thorny issues 

are brought up to that council in a transparent way and are discussed, then you have the opportunity to make good decisions. But 

it always comes down to the decisions you make. 

And I think it is also, whether it be for the fleet mix analysis, 

whether it be for the resource discussion, it is hard sometimes for 

us, and we have ongoing work right now, to really figure out where 

we might see a disconnect, are they decisions driven within the 

14 

Coast Guard, at the department level, or through discussions between the OMB and DHS and things like that. 

But with respect to the EOC, it has met at least 40 times I think 

over the last 15 months. They are dealing with issues such as OPC, 

some of the real emerging issues, and I think there is a lot of promise for that. 

Ms. HIRONO. Thank you, Mr. Chairman. I yield back. 

Mr. LOBIONDO. Admiral, just a little heads up. We are probably 

going to schedule a hearing in September on the cost constrained 

fleet mix analysis. So that is a little bit of a heads up there. 

Admiral, on the cutter boats, the NSC was built to carry two 

classes of stern-launched small boats, each with a different size 

and capability to improve their range and effectiveness. The larger 

of the two, the long-range interceptor, did not perform as required, 

and the smaller boat, the over-the-horizon, had to be modified to 

perform correctly. The Service recently solicited industry for a solution to replace both classes of small boats. Meanwhile, the NSC 

cannot operate at full capability, especially without the long-range 

interceptor. 

When does the Coast Guard anticipate going to full production 

for both classes of cutter boats and when will the NSC be outfitted 

with these boats? 

Admiral CURRIER. Thank you, sir, for that question. 

I think that this actually is a success story of not only modernization, but our setup with our integrated Acquisition Directorate. Whereas we had three classes of cutters produced by three 

different manufacturers or builders, we were going to have likely 

three different kinds of small boats, or more. 

What we have done is we have consolidated requirements and we 

have come up with a plan to only acquire a 7-meter cutter boat and 

an 11-meter cutter boat. The 11-meter cutter boat will be the longrange interceptor that is on the National Security Cutter. The 7- 

meter cutter boat will fit the National Security Cutter, the Offshore 

Patrol Cutter, and the Fast Response Cutter. We think this makes 

perfect sense from a logistics perspective on commonality of parts 

and support. 

In the interim, with the National Security Cutters that are currently underway, they have a complement of boats. We have a 

Mark 4 interceptor boat, a short range boat that is on board there, 

that is very similar to what we use in our 270-foot cutters, and we 

have an additional interceptor boat that came from the 123, the 

123-foot cutters that, as you know, have been decommissioned. 

So both National Security Cutters that are underway have a 

complement of boats, but they are not the complement of boats that 

we will provide to them once we achieve the standard cutter boats 

in the 7- and 11-meter class. The 7-meter class will be tested this 

summer, we look for a contract award late this fiscal year, and the 

11-meter small boat will be tested, further tested in the fall of this 

year. So we are very close to achieving commonality in cutter boats 

across the classes. 

Mr. LOBIONDO. Thank you. Only 3 of the Service’s fleet of 10, 

378-foot High Endurance Cutters, is currently operational. The 

fleet is only achieving 75 percent of their targeted days away from 

home port and at the same time its operating costs are more than 

15 

300 percent over budget. The Service originally spent more than $4 

million to complete emergency repairs to two of these vessels and 

the Coast Guard has not budgeted for an HEC sustainment program for the next 5 years. 

Two years ago, the Coast Guard assured this subcommittee it 

was conducting a condition survey of the HEC fleet. Can you tell 

me if I am wrong in that no survey was ever conducted? Was a survey ever conducted? 

Admiral CURRIER. Yes, sir, a survey was conducted. 

Mr. LOBIONDO. It was conducted. 

Admiral CURRIER. Yes, sir. If I could just explain that one second. There are various levels of engineering survey that have taken 

place. A basic engineering survey of the HEC fleet took place to 

start to determine which cutters would be taken out of service first. 

An engineering study with more fidelity is currently ongoing. 

But our strategy with the HEC is this: We are going to maintain 

that cutter to the minimal level that it is safe to operate. The cost 

curves on the HEC, as you have pointed out, are going exponential 

on us. This is a 40-year-old ship, it is very complex, and we have 

used it hard. We are going to maintain this ship until we replace 

it with our NSCs, but we are going to do it to a level that it is safe 

to operate and effective to operate, but no more than that. I think 

that is the best answer for the taxpayer. 

Mr. LOBIONDO. I appreciate that. That is kind of good news and 

bad news. It is good news you did the survey. It is bad news, because we have a communications problem. We need to find out. I 

would like you to check into this and see when that was given to 

the committee and how it might have been communicated to the 

committee, because we are sort of operating in the dark that we 

have ever received it. 

Admiral CURRIER. Yes, sir, will do. 

Mr. LOBIONDO. One other question before I turn it back over to 

Mr. Larsen. On the maritime patrol aircraft, to date the Coast 

Guard has taken delivery of 11 HC–144 maritime patrol aircraft 

and 12 mission system pallets. The Service plans to acquire a total 

of 36 aircraft. The program is currently 30 percent over budget and 

5 years behind schedule. In addition, even though the Service has 

taken delivery of a third of its planned buy, the Service has not yet 

begun operational testing and evaluation of the maritime patrol 

aircraft. 

Can you tell us why the Service has acquired nearly half of its 

planned maritime patrol aircraft and has still not begun an operational test and evaluation phase, or are we wrong and you have 

conducted it? 

Admiral CURRIER. Well, sir, the maritime patrol aircraft was 

originally initiated, the contracting was initiated through our lead 

systems integrator that we have replaced. Organically we are the 

lead systems integrator. There was a shift in contracting. There 

was a shift. Now we buy directly from the manufacturer with a direct contract. 

That shift caused a price increase in that how we consider costing that aircraft as we got more fidelity with actuals and we added 

other things in, like the logistics tail that hadn’t been adequately 

considered by the previous LSI, it drove a cost increase. We are not 

16 

seeing per se a unit cost increase in the price of the aircraft. We 

have just recosted it to adequately treat logistics. I think that is 

an explainable cost bump in what you have seen in our projections 

in the outyears. 

As far as operational test and evaluation, from the first aircraft 

we received we started operational assessment. Now, we have been 

in limited rate production and we went to the Department with a 

production decision and it was decided that we needed to complete 

a fuller OT&E prior to getting to the decision level three or full 

rate production decisions. So we have been in limited rate production, but we have had an ongoing operational assessment for the 

whole life of this asset. I think we have shown how effective it is. 

Deepwater Horizon, the case I described in Miami in my opening 

statement. 

So our plan is this: We are in limited rate production. We will 

complete a formal OT&E, operational test and evaluation period, 

this summer, and then we will go back for a full production decision in the fall, an ADE–3 we call it, and will be in full production 

status. 

I don’t anticipate a problem in OT&E because of the scope of the 

operational assessment that has taken place to the delivery and 

implementation of the first airframes. 

Mr. LOBIONDO. Well, I hope you are right, because if you switch 

seats and you are on the subcommittee up here and you are hearing that there is no test, no formal test and evaluation, and you 

have bought a whole lot of assets, and something isn’t right down 

the line, we had a situation in the past that didn’t go so well with 

assets that were purchased and then there is litigation and all 

kinds of stuff. I mean, I hope you are right. 

Admiral CURRIER. Sir, the operational test that has gone on, I 

can attest to you that the fidelity of the operational assessment 

from an operational perspective shows this aircraft with great 

promise. And throughout the entire scope of this assessment, there 

have been changes and upgrades and modifications to the mission 

pallet system at the expense of the contractor that have brought 

this thing to a mature state. What will be further testing in formal 

OT&E are the logistics, maintenance and all the peripheral things 

that go with it as a system. I don’t anticipate a problem there. 

Mr. LOBIONDO. Mr. Larsen. 

Mr. LARSEN. Mr. Hutton, you have had the opportunity to reassess Coast Guard’s performance in assuming responsibility for the 

acquisition, this movement we made from an outside LSI to internal, them having an acquisition workforce to support that. 

What is your assessment of the Coast Guard’s progress on that, 

as well within the context of your testimony that states that support contractors make up 25 percent of the Coast Guard’s acquisition workforce? Can you kind of relate those two and give us an 

assessment of the progress of the workforce? 

Mr. HUTTON. Absolutely. Overall, I would say since the 2007 and 

2008 timeframe as the Coast Guard started assuming the lead system integrator responsibilities, the Acquisition Directorate in particular has been very responsive to our recommendations. They 

have brought their acquisition management process pretty much in 

line with the departmental process, which is good. They have been 

17 

responsive when we have made recommendations. You asked a 

question earlier about the low-rate initial production. We had a recommendation that said there ought to be a decision event there because you don’t want to be buying too many before you do the operational testing. That is now in there. 

So on the process side, I think they have been very good. It is 

always about execution, however. On the personnel side, it has 

been a challenge. But it is a governmentwide challenge. As many 

of us probably know—— 

Mr. LARSEN. Do you mean to say when you say it is a governmentwide challenge, just finding enough people to fill acquisition 

spots? 

Mr. HUTTON. I think governmentwide. Having the full complement of acquisition workforce people is an issue that a lot of 

Federal agencies are dealing with, particularly when you get into 

some of the real technical skills like system engineers and cost estimators. We could always talk more about what is going on I think 

at the departmental level as well as at the Coast Guard. 

But I would say my general assessment is they are building their 

acquisition workforce. When we keep going back in and looking, 

they are closing the gap between what they say they need and 

what they have. Of course, one aspect of that is they may know 

what they need, but then do they have the budgeted billets for 

that. That would be for the Coast Guard to request—they could 

probably talk about that more than I. But that is certainly a facet. 

Using contractors, we have observed that, yes, they use contractors. Others like DOD use contractors for certain technical things. 

The issue, however, is what are you asking contractors to do? Is it 

a reoccurring long-term activity that you would rather have a government person do it? Well, maybe you need them in the short 

term, but what is your plan to eventually have a government person do that work? What kind of oversight are you providing the 

contractor? 

If they are doing certain acquisition-related activities, those are 

things that closely support an inherently governmental decision. It 

is very critical then you understand what you are asking contractors to do and what enhanced oversight you might be providing. 

We have observed in the past that the Coast Guard was using 

contractors, and we started asking more about the oversight. We 

were getting good indications that they understand the risks and 

that they are trying to make sure that the taxpayers’ interests are 

protected and they are not losing control and accountability for decisionmaking. 

So we see on the personnel side that the gap is narrowing. But 

I don’t foresee a situation where they won’t be using contractors, 

because in some circumstances, particularly if it is a short-term 

need, that might be the proper solution. 

Mr. LARSEN. And has the Coast Guard made improvements in its 

developmental and operational testing? 

Mr. HUTTON. A great question. That was another recommendation. We had some issues, I think it was covered in last year’s report, maybe the year before, where we were starting to talk with 

the Coast Guard about what is exactly an independent test authority. At the time, I think some Coast Guard sentiment was that if 

18 

it is part of the Capabilities Directorate, that is independent 

enough. We felt well, it should be more independent than that. And 

as we noted in our report today, they now start to leverage the 

Navy as the independent test authority, and we think that is prudent. 

Mr. LARSEN. Admiral, to the issue of Rescue 21, and we have 

talked about some of these other assets and other platforms, but 

to the issue of Rescue 21 noted in the Chairman’s chart, we had 

37 sectors for planned and delivered to 26 sectors. Can you discuss 

your plan to deploy Rescue 21 to these other areas, Great Lakes, 

Hawaii, any place where it is not deployed, as well as the Gulf of 

Alaska and Alaska as a whole? 

Admiral CURRIER. Yes, sir. Certainly. Thanks for that question. 

Our contract on Rescue 21 is completed in fiscal year 2012. The 

deployment to the Western Rivers, Puerto Rico, Hawaii, the places 

that you mentioned, absent the Gulf of Alaska, will be completed 

by 2012. 

Actually, I might have misspoken a little. Let me correct the 

record here. The places that are planned in the original contract 

will be completed by the end of fiscal 2012. Western Rivers, because it doesn’t require the full suite and capabilities of Rescue 21 

on our river, will be recapitalized organically by the Coast Guard 

as they switch from analog to digital radios. So the effect of reliability and those good things from Rescue 21 will be achieved in 

Western Rivers, but the Coast Guard could do it much more less 

expensively organically. 

I was involved in Rescue 21 early, and this was one of the triggers that caused us to reform ourselves acquisition-wise, because 

we were dealing with this contract early on. We decided at that 

time when we reviewed the prime contractor’s look at Alaska, that 

they had no clue on what the cost and risk was involved in going 

there. Their cost estimates were unrealistically low. 

We looked at it. We are experts in the area, we are the ones who 

have maintained the infrastructure up there for years, and felt that 

we could do it again organically as we switch and add incrementally to the capability up there, but do it better from a government 

organization perspective than through our prime contractor. 

So, when those decisions were made, they were tough decisions, 

and I believe the subcommittee has been advised of those in the 

past. I stand by them. I think they make good business sense. But 

for the original contract, we will finish in fiscal year 2012. 

Mr. LARSEN. So you finish in fiscal year 2012, but, again, is there 

a timeframe then for Alaska, or not? 

Admiral CURRIER. Sir, at this time, as I said, this isn’t a complete conversion of Alaska from legacy systems to Rescue 21. It is 

an incremental change. As equipment fails, we will service the site. 

We likely will upgrade the site at that time. So this is going to be 

a longer term. 

Mr. LARSEN. And will the approach you take to that, like you 

take to the Western Rivers, will that be organic, or is that going 

to be built into your acquisition, your ACI? 

Admiral CURRIER. We are looking at that closely now. But the 

current plan is to maintain the system that is there, do incremental improvements under our maintenance funding scheme, 

19 

with some minor AC&I for planning purposes as we go forward 

with this. 

To be perfectly honest, we don’t have a rock solid plan at this 

point for Alaska. We can maintain Alaska to the current capabilities with our current funding base. But if we look to recapitalize 

Alaska or add sites beyond the operational requirement that was 

originally established, we will have to look at an acquisition program that is AC&I funded. Currently, we have no plans to do that. 

Mr. LARSEN. Mr. Hutton, I asked the Admiral earlier about 

sustainment budgets for the Coast Guard, sustainment for the legacy assets. And has GAO looked at the sustainment budget for the 

Coast Guard and whether or not it is adequate, how it fits into supporting the Coast Guard mission, how it fits into supporting the 

movement to new assets? And do you have an assessment of it? 

Mr. HUTTON. While I am responsible for the acquisition side, I 

have a colleague that often looks at the operational issues. I believe 

they did some work last year. I don’t have all the details. But we 

would be happy to close the loop with you on that and see how we 

could fill in the details. 

Mr. LARSEN. Thanks. Thank you, Mr. Chairman. 

Mr. LOBIONDO. Admiral Currier, Mr. Hutton, I would like to 

thank you very much for being here today. This was informative. 

Admiral Currier, I have got good news. We are going to be spending a lot more time together in the future. It is only bad news if 

we can’t meet some of these benchmarks. So thank you all very 

much. The meeting is adjourned. 

[Whereupon, at 11:05 a.m., the subcommittee was adjourned.] 

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