United States Government Accountability Office

GAO Report to Congressional Committees

UNITED STATES 

COAST GUARD 

Improvements Needed 

in Management and 

Oversight of Rescue 

System Acquisition 

May 2006 

 

GAO-06-623 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

May 2006

UNITED STATES COAST GUARD 

Improvements Needed in Management 

and Oversight of Rescue System 

Acquisition 

Highlights of GAO-06-623, a report to 

congressional committees 

Search and rescue—one of the 

United States Coast Guard’s

(USCG) oldest missions and 

highest priorities—involves 

minimizing loss of life, injury, and 

property damage by aiding people 

and boats in distress. In September

2002, USCG contracted to replace 

its search and rescue

communications system—installed 

in the 1970s—with a new system

known as Rescue 21. However, the 

acquisition and initial 

implementation of Rescue 21 has 

resulted in significant cost 

overruns and schedule delays. 

GAO’s objectives in reviewing the 

Rescue 21 program were to (1) 

assess the reasons for the 

significant cost overruns and 

implementation delays; (2) evaluate

the viability of the revised cost and 

schedule estimates; and (3) 

evaluate the impact of the

implementation delays. 

What GAO Recommends

GAO recommends that the 

Commandant of USCG ensure that

executive-level management 

oversees Rescue 21’s progress 

toward cost and schedule 

milestones and manages risks; 

establishes milestones to complete 

an integrated baseline review; and

develops revised cost and schedule 

estimates. The Department of

Homeland Security agreed with the 

recommendations and has begun to 

implement them; however, the 

department expressed concerns 

with selected aspects of the report. 

Key factors that contributed to Rescue 21 cost overruns and schedule delays 

were inadequacies in requirements management, project monitoring, risk 

management, contractor cost and schedule estimation and delivery, and 

executive-level oversight (see table). Accordingly, the estimated total 

acquisition cost for Rescue 21 has increased from $250 million in 1999 to 

$710.5 million in 2005, and the timeline for achieving full operating capability

has been delayed from 2006 until 2011. USCG officials agreed that 

improvements need to be made to the management of the Rescue 21 project, 

and they are taking steps to address some of these issues. 

USCG’s current acquisition cost estimate of $710.5 million is not viable. Our 

analysis of contractor performance trends indicates that additional overruns 

will likely bring the total acquisition cost to $872 million, unless critical 

changes are made. Additionally, USCG’s schedule is uncertain due to ongoing contract item renegotiations and pending decisions regarding vessel 

asset tracking functionality. Finally, further cost increases may result from 

the variability of costs for tower preparation and construction. To improve 

its current cost and schedule estimates, USCG plans to complete an 

integrated baseline review after contract items are renegotiated; however, a 

date for completing this review has not been established. 

The delays in deploying Rescue 21 could affect sites awaiting modernization. 

For example, key functionality, such as improved direction finding and 

improved coverage, will not be available for a significant period of time, and 

legacy equipment may fail, requiring costly repairs and upgrades to address 

coverage gaps and other operational issues. 

Key Factors in Rescue 21 Cost Overruns and Schedule Delays

Requirements 

management 

USCG did not follow a rigorous requirements management process 

and testing revealed incomplete and poorly defined requirements. 

Project monitoring USCG did not effectively use earned value management data to 

measure performance and take corrective action on negative trends.

Risk management USCG did not always effectively mitigate and communicate risks. 

Contractor cost and 

schedule estimation and 

delivery

The contractor created a schedule that underestimated the time 

required to complete key tasks, and development took longer than 

planned, which led to delays in testing. 

Executive-level oversight USCG stated that it had an executive-level oversight process that 

included semiannual and key decision point reviews. However, there 

is no evidence that these reviews of Rescue 21 occurred before 2005.

Source: GAO.

www.gao.gov/cgi-bin/getrpt?GAO-06-623.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David A. 

Powner at (202) 512-9286 or 

pownerd@gao.gov or Stephen L. Caldwell at 

(202) 512-9610 or caldwells@gao.gov. 
Contents 

Letter 1

Recommendations for Executive Action 4

Agency Comments and Our Evaluation 4 

Appendix I Briefing Slides 8 

Appendix II Comments from the Department of Homeland 

Security 48 

Appendix III GAO Contacts and Staff Acknowledgments 54 

Abbreviations 

DHS Department of Homeland Security 

EVM earned value management 

NDRS National Distress and Response System 

OMB Office of Management and Budget 

USCG United States Coast Guard 

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Page i GAO-06-623 Coast Guard's Rescue System
United States Government Accountability Office

Washington, DC 20548 

May 31, 2006

The Honorable Harold Rogers 

Chairman 

The Honorable Martin Sabo 

Ranking Member 

Subcommittee on Homeland Security, 

Committee on Appropriations 

House of Representatives 

The Honorable Olympia Snowe 

Chairman 

The Honorable Maria Cantwell 

Ranking Member 

Subcommittee on Fisheries and Coast Guard, 

Committee on Commerce, Science and Transportation 

United States Senate 

The United States Coast Guard (USCG) is currently replacing its 30-yearold search and rescue communications systems with a new system known 

as Rescue 21. Rescue 21 will be used not only for search and rescue, but it

will support other USCG missions, including those involving homeland 

security. However, Rescue 21 has had significant cost overruns and 

schedule delays. As a result of these delays, completion of Rescue 21 

deployment nationwide—originally scheduled for fiscal year 2006—has 

been delayed until fiscal year 2011, and its total acquisition cost has risen 

from $250 million in 1999 to its current estimate of $710.5 million.1

 In 

addition to the cost overruns and schedule delays, Rescue 21 may not be 

deployed with all of the functionality originally promised. For example, 

functionality for vessel asset tracking was not deployed as part of the 

initial operating capability due to the system’s inability to meet original 

requirements, and USCG is now considering alternative strategies for this 

functionality. Also, there has been a reduction in promised improvements 

to limit communications gaps; originally, Rescue 21 was intended to limit 

communications gaps to 2 percent—now the target is less than 10 percent.

 1

In April 2006, the Department of Homeland Security approved a new acquisition program 

baseline for Rescue 21 with a total acquisition cost of $730.2 million after decreasing 

certain functionality. 

Page 1 GAO-06-623 Coast Guard's Rescue System
This report responds to your request that we (1) assess the reasons for the 

significant implementation delay and cost overruns against the original 

Rescue 21 proposal, (2) evaluate the viability of the USCG’s revised cost 

and implementation schedule, and (3) evaluate the impact of Rescue 21’s 

implementation delay on USCG’s field units that are awaiting the 

modernization of antiquated communications equipment. 

On March 27, 2006, we provided your staff with a briefing on the results of 

our study. The slides from that briefing are included in this report as 

appendix I. The purpose of this report is to formally publish the briefing 

slides and officially transmit our recommendations to the Commandant of 

USCG. 

To assess the reasons for the implementation delay and cost overruns of 

Rescue 21, we analyzed current and previous program documents, 

including current and previous acquisition plans, cost estimates, status 

reports, schedules, promised functionality, earned value management 

(EVM)2

 data, and cost analyses. We also interviewed key officials and 

contractors. To evaluate the viability of the USCG’s revised cost estimate 

and implementation schedule, we analyzed program cost and schedule 

documents, cost estimating methodologies, and changes to development 

and deployment plans. To identify factors that could affect the program 

baseline in the future, we assessed the prime contractor’s performance 

related to cost and schedule. We applied established earned value analysis 

techniques to data from contractor cost performance reports that spanned 

a 26-month period—from October 2003 to December 2005—to show 

trends in cost and schedule performance and to estimate the likely costs at 

the completion of the prime contract. To evaluate the impact of Rescue 

21’s implementation delay, we reviewed reports on legacy system failures 

and anticipated failures and interviewed field officials responsible for 

overseeing legacy system operations at 11 field units, the Maintenance and 

Logistic Commands for the Pacific and Atlantic Areas, and Rescue 21 users 

at the two initial operating regions. 

 2

EVM is a project management tool that integrates the investment scope of work with

schedule and cost elements for investment planning and control. This method compares

the value of work accomplished during a given period with that of the work expected in the 

period. Differences in expectations are measured in both cost and schedule variances. The

Office of Management and Budget (OMB) requires agencies to use EVM as part of their 

performance-based management system for any investment under development or with 

system improvements under way. 

Page 2 GAO-06-623 Coast Guard's Rescue System
We performed our work at USCG headquarters and at selected field units 

and communications centers from December 2005 through March 2006, in

accordance with generally accepted auditing standards. 

In summary, we made the following major points in our briefing: 

• Key factors that contributed to Rescue 21 cost overruns and schedule 

delays were shortcomings in requirements management, project 

monitoring, risk management, contractor cost and schedule estimation 

and delivery, and executive-level oversight. Among the points we made 

were that USCG did not effectively use EVM data to measure performance 

and take corrective actions; USCG, while identifying, analyzing, and 

prioritizing risks, did not always mitigate and communicate risks; and 

USCG stated that it had an executive oversight process that included 

semiannual and key decision point reviews. However, there is no evidence 

that these reviews of Rescue 21 occurred before 2005. USCG agreed that 

improvements need to be made in the management of the Rescue 21

project, and it is taking steps to address some of these issues. 

• The USCG’s current acquisition cost estimate of $710.5 million is not 

viable: based on our analysis of contractor performance trends and the 

renegotiation of 91 contract items for site deployment, we forecast a cost 

overrun of approximately $161 million, which will likely bring total 

acquisition costs to $872 million, unless critical changes are made. Also, 

the USCG’s schedule is uncertain because of the continuing contract item 

renegotiations and decisions regarding vessel asset tracking functionality.

Finally, these additional factors may increase costs and delay schedules: 

(1) the variability of costs for tower preparation and construction and (2) 

site reorganization.3

 USCG realizes that it needs to improve its cost and 

schedule management and has plans to complete an integrated baseline 

review for the contract items as they are renegotiated; however, a date for 

completing this review has not been established.

• The delays in deploying Rescue 21 could have several effects: (1) key 

functionality, such as improved direction finding and improved coverage, 

will not be available for a significant period of time; (2) legacy equipment 

may fail, requiring costly repairs; and (3) legacy equipment may require

upgrades to address coverage gaps and other operational issues. For 

example, USCG instituted a moratorium on upgrades to the legacy system 

 3

USCG is currently reorganizing its field units into new, integrated, and standardized 

organizations referred to as sectors. 

Page 3 GAO-06-623 Coast Guard's Rescue System
because Rescue 21 was to replace the equipment. However, despite the 

moratorium, according to USCG officials, some field units have upgraded

their legacy systems to address operational challenges. Upgrades such as

these would result in higher costs, especially at field units scheduled for 

implementation at a later date. 

To more effectively manage the remaining development and deployment 

of Rescue 21, we recommend that the Commandant of USCG ensure that 

USCG executive-level management implements the following three 

recommendations: 

• Oversee the project’s progress toward cost and schedule milestones and 

management of risks. 

• Establish a milestone to complete Rescue 21’s integrated baseline review, 

to include all renegotiated contract items. 

• Use the results of this baseline review to complete a revised cost and 

schedule estimate. 

In providing written comments on a draft to this report, the Department of 

Homeland Security’s (DHS) Director of the Departmental GAO/Office of 

the Inspector General Liaison Office concurred with our recommendations 

and stated that USCG would continue to aggressively pursue the 

recommendations in the GAO report in order to ensure that Rescue 21 

provides critical life-saving capabilities and that the acquisition is 

effectively managed. DHS stated that it was currently addressing our 

recommendations and provided examples of efforts to date. Specifically, 

DHS and USCG increased oversight with quarterly flag officer/vice 

president-level program reviews and periodic DHS Joint Requirements 

Council and Investment Review Board reviews in October 2005 and plan to 

initiate monthly progress reviews of the project schedule beginning in 

June 2006. 

Regarding the cost of Rescue 21, DHS stated that it had recently revised its 

acquisition program baseline. The revised total acquisition cost for Rescue 

21 is $730.2 million, which was achieved by adjusting several performance 

parameters and terminating the contractor’s option to provide vessel 

subsystem components. DHS plans to achieve this capability through other 

means. However, we continue to stress the importance of our 

recommendation that calls for the completion of an integrated baseline 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 

Page 4 GAO-06-623 Coast Guard's Rescue System
review. If performed correctly, an integrated baseline review will provide 

insight into the risks associated with the $730.2 million estimate and the 

extent to which the estimate is achievable. 

DHS agreed that USCG has responsibilities for managing schedule delays 

and cost overruns in major acquisition projects and with our findings 

regarding the contractor’s inability to manage cost and schedule. DHS 

stated that the root cause for the systems deployment delays and costs 

overruns was poor estimates and failed performance by the contractor. 

The department, however, raised concerns with four of our findings 

regarding USCG management and oversight and provided us with some 

additional information regarding these findings that did not fully address 

our concerns. Therefore, we continue to believe that shortcomings in 

USCG’s management and oversight of Rescue 21 contributed to cost 

overruns and schedule delays. USGC concerns and our response 

associated with each of the four areas follows. 

First, DHS stated that our findings on requirements management are not 

consistent with our previously reported 2003 findings that USCG did have 

a process for managing requirements and it cited various requirements 

management documents. Our current finding states that USCG did not 

follow rigorous requirements management processes for Rescue 21—not 

that the USCG did not have a process—and is therefore consistent with 

our previous report. DHS also stated that testing revealed that 

requirements were clearly defined. However, as stated in our briefing, a 

USCG usability and operability assessment of Rescue 21 stated that most 

of the operational advancements envisioned for the project were not 

achieved, and these problems could have been avoided by including user 

requirements in the contract. DHS’s response also cites software and 

hardware defects that can be attributed to shortcomings in requirements 

management, providing further support for our finding that USCG did not 

follow a rigorous requirements management process. 

Second, DHS disagreed with our finding that they did not effectively use 

EVM data to measure performance and take corrective actions. Evidence

showing USCG actions to address schedule delays from EVM data was not 

provided to us during our review. On May 8, 2006, 6 weeks after the 

briefing on March 27, 2006, DHS provided documentation showing that 

some actions were taken by USCG in 2004. However, this is nearly a year 

after the EVM data began showing schedule slippages in March 2003 and 

after the Rescue 21 project missed its initial operating capability date of

September 2003. Further, DHS stated that the contractor undertook a 

significant reorganization of its management structure in response to its 

Page 5 GAO-06-623 Coast Guard's Rescue System
concerns related to cost and schedule performance. Because this 

information was not mentioned to us during our discussions with either 

USCG or the contractor during our review, on May 15, 2006, we contacted

both the contractor’s Rescue 21 project manager and contract manager to 

clarify the reorganization statement. These individuals told us that changes 

in contracting personnel were due to internal movement between ongoing 

contracts and did not constitute a reorganization.

Third, DHS disagreed with our finding that risks were not always mitigated 

and communicated. DHS stated that there were various reports and 

meetings where risks were reported and discussed. Documentation for 

some of these reports and meetings was provided to us on May 8, 2006. 

Furthermore, as stated in the briefing, there were examples of risks that 

were not effectively mitigated or communicated. The Human System 

Interface (HSI) work group referred to in the agency’s response was 

established only in 2005, after Rescue 21 had shown significant HSI issues 

in its final operational testing and evaluation phase. Effective risk 

management would have identified and addressed risks earlier in the 

system life cycle. 

Finally, DHS disagreed with our finding that there was no evidence to 

support its statement that there was executive-level management oversight 

prior to 2005. During our review, DHS cited a list of semiannual and key 

decision point reviews, dating from 2002 to 2005; however, as stated in our 

briefing, it did not provide evidence of the pre-2005 briefings. On May 8, 

2006, DHS provided some evidence that these meetings occurred; 

however, based on our review of the documentation, it was unclear which 

executives attended these meetings and, therefore, whether the 

appropriate executives were in attendance. Furthermore, the department

did not provide evidence showing executive direction to mitigate risks or 

address problems. Finally, the department stated that it had increased 

oversight in October 2005 by establishing quarterly flag officer/vice 

president-level program reviews and periodic DHS Joint Requirements 

Council and Investment Review Board reviews. This additional oversight 

provides further support for our finding on the lack of executive level 

oversight prior to 2005. DHS also challenged our finding that executivelevel monitoring of the risk mitigation activities that resulted from the 

2005 meetings did not occur, citing various monitoring activities that 

occurred. However, it did not provide evidence of the monitoring 

activities. 

Page 6 GAO-06-623 Coast Guard's Rescue System
DHS also provided technical comments that were incorporated in this 

report where appropriate. DHS’s written comments are reprinted in 

appendix II.

We are sending copies of this report to the Secretary of Homeland 

Security, the Commandant of the United States Coast Guard, and other 

interested parties. We will make copies available to others on request. In 

addition, the report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

If you or your staff have any questions concerning this report, please 

contact David A. Powner at (202) 512-9286 or by e-mail at 

pownerd@gao.gov or Stephen L. Caldwell at (202) 512-9610 or by e-mail at 

caldwells@gao.gov. 

David A. Powner 

David A. Powner 

Director, Information Technology Management Issues 

Stephen L. Caldwell 

Acting Director, Homeland Security and Justice Issue

Page 7 GAO-06-623 Coast Guard's Rescue System
Appendix I: Briefing Slides Appendix I: Briefing Slides 

Management and Oversight Improvements

Needed for Coast Guard’s Rescue 21 Acquisition

Briefing for

the House Committee on Appropriations, Subcommittee on 

Homeland Security

and 

the Senate Committee on Commerce, Science and Transportation, 

Subcommittee on Fisheries and Coast Guard

March 27, 2006

Page 8 GAO-06-623 Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 9 GAO-06-623

2

Briefing Overview

Introduction

Objectives, Scope, and Methodology

Results in Brief

Background

Objective 1: Reasons for Cost Overruns and Schedule Delays

Objective 2: Revised Cost and Schedule Estimates

Objective 3: Delay in Implementation

Conclusions

Recommendations

Agency Comments

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 10 GAO-06-623

3

Introduction

Search and rescue is one of the United States Coast Guard’s (USCG) oldest missions and 

highest priorities. The search and rescue mission includes minimizing the loss of life, injury,

and property damage by aiding people and boats in distress. 

The National Distress and Response System (NDRS) is the legacy communications

component of USCG’s search and rescue program. However, the 30-year-old system has

several deficiencies and is difficult to maintain, according to USCG officials. In September

2002, the USCG contracted with General Dynamics Decision Systems (General Dynamics)

to modernize and replace the NDRS with a system called Rescue 21. 

In October 2005, due to significant cost increases and schedule delays associated with the 

Rescue 21 program, the Chairman and Ranking Member of the House Appropriations

Subcommittee on Homeland Security requested that we evaluate the Rescue 21 program.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 11 GAO-06-623

4

Objectives, Scope, and Methodology

As agreed, our objectives were to

 assess the reasons for the significant implementation delay and cost overruns against 

the original Rescue 21 proposal;

 evaluate the viability of the USCG's revised cost and implementation schedule; and 

 evaluate the impact of Rescue 21's implementation delay on the USCG's field units that

are awaiting the modernization of antiquated communications equipment.

To assess the reasons for the implementation delay and cost overruns of Rescue 21, we 

analyzed Rescue 21 documents, including current and previous acquisition plans, cost

estimates, status reports, schedules, promised functionality, earned value management

(EVM)1 data, and cost analyses. We also interviewed key officials and contractors involved 

in the development and deployment of Rescue 21.

1EVM is a project management tool that integrates the investment scope of work with schedule and cost elements for investment planning and control. This method compares the value

of work accomplished during a given period with that of the work expected in the period. Differences in expectations are measured in both cost and schedule variances. OMB requires

agencies to use EVM as part of their performance-based management system for any investment under development or with system improvements under way.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 12 GAO-06-623

5

Objectives, Scope, and Methodology

To evaluate the viability of USCG’s revised cost estimate and implementation schedule, we

analyzed current program cost and schedule estimates, cost estimating methodologies,

and changes to development and deployment plans. To identify factors that could affect the 

program baseline in the future, we assessed the prime contractor’s performance related to

cost and schedule. We applied established earned value analysis techniques to data from 

contractor cost performance reports that spanned a 26-month period, from October 2003 to 

December 2005, to show trends in cost and schedule performance and to estimate the

likely costs at the completion of the prime contract.

To evaluate the impact of Rescue 21’s implementation delay, we reviewed reports on 

legacy system failures and anticipated failures as well as documentation from USCG sites

regarding problems associated with the system. We also interviewed field officials 

responsible for overseeing legacy system operations at 11 field units. We visited five of

these field units (Humboldt, California; San Francisco, California; New Orleans, Louisiana;

Mobile, Alabama; and Miami, Florida) and interviewed officials by telephone at six other 

locations (Honolulu, Hawaii; Guam, Territory of Guam; Detroit, Michigan; Valdez, Alaska;

Kodiak, Alaska; and Juneau, Alaska). These locations were selected based on coverage 

gaps previously identified and their significance to search and rescue and homeland

security operations. 

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 13 GAO-06-623

6

Objectives, Scope, and Methodology

We also interviewed Maintenance and Logistic Commands for the Pacific and Atlantic

Areas and Rescue 21 users at the initial operating sites at the Atlantic City and Eastern 

Shore communications centers. We compared planned Rescue 21 functionality with what

was actually delivered.

We performed our work at USCG headquarters and selected field units and 

communications centers from December 2005 through March 2006, in accordance with

generally accepted auditing standards.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 14 GAO-06-623

7

Results in Brief

Key factors that contributed to Rescue 21 cost overruns and schedule delays were 

shortcomings in requirements management, project monitoring, risk management,

contractor cost and schedule estimation and delivery, and executive-level oversight.

USCG agreed that improvements need to be made in these areas and is taking steps to

address these issues. 

The Coast Guard’s current acquisition cost estimate of $710.5 million is not viable: our 

analysis of contractor performance trends indicates that additional cost overruns will

likely bring total acquisition costs to $872 million unless critical changes are made. This

includes a significant number of contract items that have not been completed as planned 

and must now be renegotiated. Also, USCG’s schedule, which now shows full operating

capability in 2011—5 years behind the originally scheduled date of 2006—is not finalized

because of the continuing contract item renegotiations and decisions regarding vessel 

asset tracking functionality. Finally, these additional factors may increase costs: (1) the 

variability of costs for tower preparation and construction and (2) site reorganization.2

USCG realizes that it needs to be more effective in managing costs and schedule and

has plans to complete an integrated baseline review for the contract items as these are 

renegotiated; however, a date for completing this review has not been established. In

addition, USCG plans to begin monthly reviews of the project schedule and to

incrementally deploy to future Rescue 21 sites. 

2 USCG is in the process of reorganizing its field units into new integrated and standardized organizations, referred to as sectors.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 15 GAO-06-623

8

Results in Brief

The delays in deploying Rescue 21 could have several effects:

 key functionality, such as improved direction finding and improved coverage, will not be 

available for a significant period of time;

 legacy equipment may fail, requiring costly repairs; and 

 legacy equipment may require upgrades to address coverage gaps and other 

operational issues.

We are recommending that the Secretary of Homeland Security direct the Commandant

of the United States Coast Guard to ensure that executive-level management oversees

the project’s progress toward cost and schedule milestones and manages risks. In

addition, we recommend that executive-level management establish a milestone to

complete its integrated baseline review and revise its cost and schedule estimates.

In providing oral comments on a draft of this briefing, the Coast Guard Assistant

Commandant for Acquisition stated that the briefing fairly represented Rescue 21 risks

and ongoing activities to address program management and other issues. He also stated 

that this briefing would be used as input to take corrective actions to improve program 

management.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 16 GAO-06-623

9

Background

Rescue 21 Description

The NDRS is USCG’s primary VHF communications system, important to the USCG’s

search and rescue program as well as its homeland security mission. However, the USCG 

has reported that NDRS—much of which was installed in the 1970s—has several critical

deficiencies:

 numerous gaps in communications coverage—in some areas the Coast Guard cannot

hear calls from mariners in distress or communicate with other USCG vessels;

 limited direction-finding capabilities and no digital selective calling capabilities;

3

 no effective way to track USCG assets that conduct search and rescue;

 limited interoperability with other federal and state communications systems; and

 no means for protected communication.

Rescue 21’s primary functions are to provide USCG with communication for maritime

search-and-rescue functions—such as monitoring distress calls from boaters and 

coordinating the response or rescue. It is intended to replace NDRS, and will be a shortrange communications system reaching about 20 nautical miles. The system will include 

VHF-FM radios, communications towers, and hardware and software at USCG sites as well 

as on Coast Guard vessels. This system also, in addition to search and rescue, provides

support to homeland security missions. USCG’s acquisition directorate, under the Assistant

Commandant for Acquisition, is responsible for managing the Rescue 21 acquisition.

3 A digital selective calling radio has the ability to send a mayday signal that identifies the vessel and, when connected to a Global Positioning System, sends the vessel’s

location. This occurs on channel 70.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 17 GAO-06-623

10

Background

Rescue 21 Description

In September 2002, USCG awarded an indefinite delivery, indefinite quantity4 contract to

General Dynamics for developing and implementing Rescue 21. The contract and original 

schedule called for the following:

 two initial Coast Guard regions to operate the new system with full functionality—

referred to as initial operating capability—scheduled for September 2003 and

 continued deployment to additional locations through 2006.

According to the Coast Guard contract with General Dynamics, the Rescue 21 system is to

 allow continuous, uninterrupted communications on Channel 16;

5

 limit the number of communication coverage gaps to less than 10 percent in the 

United States (originally this was to less than 2 percent);

 provide direction finding and digital selective calling to locate boaters;

 allow USCG to track its mobile assets, such as vessels;

 allow communication with other federal and state systems;

 allow protected communication of sensitive information; and

 archive voice and data communications and make them instantly accessible. 

A table showing the capabilities of NDRS and Rescue 21 follows.

4 An indefinite-delivery, indefinite-quantity contract provides for an indefinite quantity, within stated limits, of supplies or services during a fixed period of time. The government schedules

deliveries or performance by placing orders with the contractor. 48 C.F.R. §16.504 5According to USCG officials, Channel 16, which is analogous to 911, is the channel designated for the use of distressed boaters to gain assistance in an emergency.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 18 GAO-06-623

11

Background

Rescue 21 Planned Capabilities

Coordinate

response

activities

Geographic display no yes

Full coverage protected communications no yes

Public safety interoperability no yes

Data communications (between vessels and stations) no to be determined

Automatic vessel asset tracking no to be determined

90-98% coverage to 20

nautical miles from the

shore

Unknown; numerous 

gaps

Communications coverage

Monitor

distress calls

Number of simultaneous communications channels 1 6

Channel 70 digital selective calling and no yes

direction finding

Alert response

assets

Continuous, uninterrupted no yes

Channel 16 Guard

Capabilities Res Existing NDRS cue 21

Comparison of Rescue 21 Capabilities with Legacy System

Source: U.S. Coast Guard.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 19 GAO-06-623

12

Background 

Rescue 21 Components

Key components of Rescue 21—some of which appear in the following diagram—are

 communications centers (46) that contain operator workstations and electronic

equipment;

 antenna towers (322);

 other equipment and/or infrastructure that could be used on vessels or remote

facilities, including communication lines and radio equipment; and 

 disaster recovery assets (not pictured). A disaster recovery asset is a smaller antenna

tower and equipment similar to a remote facility. It is portable so that it can be moved

to locations as needed.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 20 GAO-06-623

13

Background 

Rescue 21 Components

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 21 GAO-06-623

14

Background 

Previous GAO Work

In September 2003, we reported that USCG’s original schedule for reaching initial

operating capability by September 2003 had been postponed and that it had yet to finalize

a new schedule.

5 This postponement was due, in part, to the development of the system

taking longer than planned.

We also determined that USCG postponed key tests and the initial operating capability

because of the delays in software development, and we highlighted risks associated with

its plan to compress and overlap key tests as a result of the delays. In addition, schedules

for key tests and deliverables, including test plans, were still not complete. 

We recommended that the Secretary of the Department of Homeland Security direct the

Commandant of the United States Coast Guard to

 establish a new schedule for critical testing phases and initial operating capability and

 ensure that milestones were established for completing test plans for formal 

qualifications testing, system integration testing, and operational testing and 

evaluation and that test plans address all requirements for the system.

Following our report, key test schedules were revised and milestones and test plans were 

developed.

5 GAO, Coast Guard: New Communications System to Support Search and Rescue Faces Challenges, GAO-03-1111 (Washington, D.C.: Sept. 30, 2003).

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 22 GAO-06-623

15

Background 

Rescue 21 Schedule Delays

However, further delays occurred during testing.6 For example,

 Formal qualification testing, originally expected to begin in February 2003 and end in 

March 2003, actually began in January 2004 and ended in June 2004—15 months

behind schedule. At that time, only 4 of the 235 allocated requirements were validated 

and performance issues in several areas, including fault management, archive/restore,

and channel performance, were found that required additional work. Formal qualification 

testing was repeated in June 2004, at which time the remaining 231 allocated 

requirements were validated.

 System integration testing, originally expected to begin in April 2003 and end in May

2003, actually began in August 2004 and ended in December 2004—19 months behind 

schedule. Additional software defects were found during this time and USCG decided to 

have the contractor concurrently fix the system integration testing problems while going 

into the operational test and evaluation phase.

6 Rescue 21 tests include: formal qualification testing, which demonstrates that the system meets contract performance specifications; system integration testing, which demonstrates

that the system is fully functional at USCG stations; and operational testing and evaluation, which is conducted by the USCG and ensures that the system satisfies contract performance 

requirements and is ready to be deployed at other USCG locations.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 23 GAO-06-623

16

Background 

Rescue 21 Schedule Delays

 Operational test and evaluation, originally intended to begin in July 2003 and to end in 

August 2003, actually began in January 2005 and ended March 2005—19 months

behind schedule. Further software defects were found, and USCG also requested 

additional changes to the human systems interface based on operator comments. The 

changes to the human systems interface were prioritized into three builds, the first of

which was required by USCG before it would approve initial operating capability. The 

remaining two builds are being negotiated with the contractor and represent additional

development. Finally, it was determined that the vessel portion of Rescue 21 did not

meet performance requirements.

Because of the delays in development and testing, the date for initial operating capability

was delayed from September 2003 to December 2005. Full operating capability, which 

was originally scheduled for fiscal year 2006, was delayed to fiscal year 2011. 

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 24 GAO-06-623

17

Background 

Rescue 21 Schedule Delays

Development and Implementation Schedule

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 25 GAO-06-623

18

Background

Rescue 21 Cost Growth

Rescue 21’s total acquisition cost estimate has increased from $250 million to $710.5 million

over a 6-year period, as shown in the following chart.

Source: U.S. Coast Guard Acquisition Project baseline data.

250

300

526

710.5

0

100

200

300

400

500

600

700

800

April '99 November '99 March '02 June '05

Acquisition Cost Totals

Millio

n

s of D

ollarss

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 26 GAO-06-623

19

Background

Rescue 21 Appropriations

Source: U.S. Coast Guard data.

Rescue 21 has been appropriated a total of $382.9 million for development since award of

the contract in fiscal year 2002.

42

78.9

117.2

94

50.8

0

20

40

60

80

100

120

140

FY 02 FY 03 FY 04 FY 05 FY 06

Fiscal Year Appropriations

Millio

n

s of D

ollar

s

s

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 27 GAO-06-623

20

Background 

Rescue 21 Current Status

Rescue 21 was deployed on December 20, 2005, with an initial operating capability7 and is

being used at two regions (Atlantic City, New Jersey, and Chincoteague, Virginia). The 

deployment included all the station functionality and equipment that

 allowed continuous, uninterrupted communications on Channel 16;

 limited the number of communication coverage gaps;

 provided direction finding and digital selective calling to locate boaters;

 allowed radio communication with other federal and state officials;

 allowed protected communication of sensitive information; and

 archived voice and data communications and made them accessible in real time.

However, functionality for vessel asset tracking and data transfer plus an expanded vessel 

communications suite was not delivered as planned. This was deferred because the

contractor could not meet the original contract requirements for simultaneous

communications. In January 2006, a stop work order was issued on the vessel tracking and 

data transfer functionality for 90 days. USCG and the Department of Homeland Security

(DHS) are currently determining whether Rescue 21 should complete development of the 

vessel functionality or consider other sources for that functionality.

7USCG also uses the term “ground sub-system” for the functionality and equipment deployed to the stations in the initial operating capability regions. The functionality and equipment

that was to be deployed to the vessels associated with these stations, which was not delivered as scheduled, is referred to as the “vessel sub-system”.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 28 GAO-06-623

21

Background 

Rescue 21 Current Status

The current schedule calls for the deployment of Rescue 21 to four low-rate initial 

production sites during 2006.8 In addition, according to USCG officials, they are currently

revalidating implementation plans for the first 15 of the remaining 40 sites. These first 15 of

the remaining 40 sites are approved for deployment and are currently scheduled to be 

completed by fiscal year 2009. Completion of the remaining 25 sites with full operating 

capability is currently scheduled for fiscal year 2011.

However, some development activity remains. First, there are two remaining builds of

enhancements to the human systems interface, with the second build scheduled for 

completion in October 2006 and the third in March 2007. Second, a decision is pending on 

how to implement vessel asset tracking and data transfer functionality.

8 USCG intends to use these low-rate initial production sites to test Rescue 21 capabilities in various geographical climates.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 29 GAO-06-623

22

Objective 1

Reasons for Cost Overruns and Schedule Delays

Key factors that contributed to Rescue 21 cost overruns and schedule delays were 

shortcomings in requirements management, project monitoring, risk management,

contractor cost and schedule estimation and delivery, and executive-level oversight. USCG

agreed that improvements need to be made in these areas and is taking steps to address

these issues.

To effectively manage major IT programs, organizations should use sound acquisition and 

management practices to minimize risks and thereby maximize a project’s ability to be 

delivered on time, within budget, and with promised functionality. Such practices have been 

identified by leading organizations, such as the Software Engineering Institute, the Chief

Information Officer’s Council, and in our prior work analyzing best practices in industry and 

government.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 30 GAO-06-623

23

Objective 1

Reasons for Cost Overruns and Schedule Delays

Requirements management

Requirements management includes processes for eliciting, documenting, verifying and validating, and 

managing requirements through the system life cycle.

The Coast Guard did not have a rigorous requirements management process. Although the 

USCG developed high-level requirements for Rescue 21, it relied solely on the contractor

to manage these requirements. According to USCG acquisition officials, they took this

approach because of the performance-based contract vehicle. However, our experience in 

reviewing major systems acquisitions has shown that it is important for government

organizations to exercise strong leadership in managing requirements, regardless of the

contracting vehicle.

In addition to not effectively managing requirements, testing revealed numerous problems 

linked back to incomplete and poorly defined user requirements. For example:

 A USCG usability and operability assessment of Rescue 21 stated that most of the

operational advancements envisioned for the system were not achieved and 

concluded that these problems could have been avoided by including user 

requirements in the contract.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 31 GAO-06-623

24

Objective 1

Reasons for Cost Overruns and Schedule Delays

Requirements management (continued)

 A key requirement stated, “Provide a consolidated regional geographic display.” The 

contractor provided a capability based on that statement, but during testing the USCG

operators felt the maps did not display sufficient detail. Such discrepancies led to an

additional statement of work defining required enhancements to the system interface 

(e.g., screen displays).

After these initial problems, USCG recognized the need for an orderly process to review 

changes that could have a significant impact to cost, schedule, and performance.

Specifically, in October 2005, USCG established a Configuration Control Board to control 

changes to Rescue 21 requirements.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 32 GAO-06-623

25

Objective 1

Reasons for Cost Overruns and Schedule Delays

Project monitoring

A key project monitoring activity uses earned value management (EVM) techniques to track the progress of

work completed against project cost and schedule estimates.

USCG did not effectively use EVM data in order to measure performance and take

corrective action. The Coast Guard has received EVM cost performance reports that

identified problems on a regular basis from Booz Allen Hamilton.

9 However, USCG did not

take action on these reports. For example, the March 2003 report indicated that, given the

number of slipped tasks and small remaining time, it was unlikely that the contractor would 

be able to recover the schedule deadlines; the September and October 2003 reports

described the contractor’s performance as rapidly worsening. Nevertheless, USCG did not

take action in response to these reports. 

9 USCG contracted Booz Allen Hamilton to assist with program management for Rescue 21.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 33 GAO-06-623

26

Objective 1

Reasons for Cost Overruns and Schedule Delays

Risk management

An effective risk management process identifies potential problems before they occur, so that risk-handling 

activities may be planned and invoked as needed across the life of the product and project in order to 

mitigate adverse impacts on achieving objectives. Key activities include identifying and analyzing risks, 

assigning resources, developing risk mitigation plans and milestones for key mitigation deliverables, 

briefing senior-level managers on high-priority risks, and tracking risks to closure.

USCG’s management process includes identifying, analyzing, and prioritizing risks;

establishing mitigation strategies; and assigning responsibility for addressing risks.

However, USCG did not always mitigate and communicate risks. For example:

 In 2003, USCG identified software development as a high risk to Rescue 21’s

schedule. However, despite early acknowledgment of this risk, it was not mitigated 

and ultimately became one of the primary drivers for the increase in costs.

 USCG did not communicate risks to partners when applicable. During our review, the

contractor stated that it was unaware of the items in the USCG risk list that related to

the contractor’s performance.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 34 GAO-06-623

27

Objective 1

Reasons for Cost Overruns and Schedule Delays

Contractor cost and schedule estimation and delivery

The contractor underestimated the time for development and testing of Rescue 21 and 

established an integrated project schedule that it could not meet.

 Development took longer than planned, which led to delays in testing. Subsequently, 

testing phases were not completed on schedule.

 Additionally, the initial estimate for completing a regional site deployment was 12 

months. The new estimate of 24 months is considered to be more realistic for 

executing the same tasks.

The contractor did not always provide personnel in a timely manner or with the knowledge 

and skills required to complete the project.

 According to USCG information, it took longer than expected to obtain developers and 

subcontractors for Rescue 21.

 According to USCG documentation, support personnel involved in initial site surveys

were minimally qualified and had limited civil engineering and environmental analysis

skills.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 35 GAO-06-623

28

Objective 1

Reasons for Cost Overruns and Schedule Delays

Executive oversight and governance

Office of Management and Budget and GAO guidance call for agencies to establish IT investment 

management boards comprised of key executives to regularly track the progress of major systems 

acquisitions. These boards should have documented policies and procedures for management oversight of

IT projects and systems and should be able to adequately oversee the project’s progress toward cost and

schedule milestones and their risks. The board should also employ early warning systems that enable it to

take corrective actions at the first sign of cost, schedule, and performance slippages.

USCG told us that it had an executive oversight process that included semi-annual and key

decision point reviews. However, there is no evidence that these reviews of Rescue 21

occurred before 2005.

Rescue 21 oversight meetings commenced in 2005, but executive management did not

take action in response to the risks and problems presented. For example, briefings given 

to the USCG Acquisition Review Council and the Department of Homeland Security (DHS) 

Investment Review Board for key decision point 3 approval identified numerous high-level 

and moderate risks and DHS officials requested additional actions, but executive-level 

monitoring to ensure the adequacy and completion of risk mitigation activities did not occur.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 36 GAO-06-623

29

Objective 1

Reasons for Cost Overruns and Schedule Delays

Recent Efforts by USCG to Improve Rescue 21 Management

USCG has recently begun to address several of the key factors that led to cost overruns and schedule 

slippages. 

According to the Assistant Commandant for Acquisition, the USCG plans to improve the capabilities of

the Acquisition Office by obtaining more technical assistance to help manage requirements, monitor 

project performance, and mitigate risks, among other things. For example, USCG intends to begin

monthly reviews of the project schedule in June 2006 to track actual against planned milestones and to

use earned value management data to improve its oversight of cost and schedule performance. 

Regarding contractor performance, USCG stated that it was difficult to manage the project effectively 

from headquarters and that the distance between USCG and the contractor delayed decisions. As a 

result, in November 2005, USCG established a Project Resident Office adjacent to the contractor’s

facility. This office’s responsibilities include overseeing nationwide regional site implementation;

monitoring contractor performance; managing risks; establishing closer communication and coordination 

with the contractor to minimize contract changes and control cost growth; and monitoring shipping and 

delivery of Rescue 21 equipment. 

USCG has also increased the visibility of Rescue 21 at the executive level by establishing quarterly

meetings between the USCG Assistant Commandant for Acquisition and the vice president of the

contractor. These meetings may facilitate greater executive-level involvement in Rescue 21.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 37 GAO-06-623

30

Objective 2

Revised Cost and Schedule Estimates

Coast Guard’s current acquisition cost estimate of $710.5 million is not viable. Our analysis 

of contractor performance trends indicates that there will likely be additional cost overruns

that will bring the total acquisition cost to $872 million unless critical changes are made.

This includes a significant number of contract items that have not been completed as

planned and must now be renegotiated. Also, USCG’s schedule is uncertain and will likely

change due to the continuing contract item renegotiations and decisions regarding vessel

functionality. Negotiations for contract items for the first 15 full-rate production regions 

continues and is expected to be completed by June 2006. Subsequently, contract items to

deploy Rescue 21 to the remaining 25 full-rate production regions must also be 

renegotiated.

Finally, additional factors may increase costs, such as the variability of costs for tower

preparation and construction and site reorganization.10

10 USCG is in the process of reorganizing its field units into new integrated and standardized organizations, referred to as sectors.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 38 GAO-06-623

31

Objective 2

Revised Cost and Schedule Estimates

As of June 2005, the current acquisition cost estimate to reach full operational capability in 

2011 for Rescue 21 is $710.511 million.

Based on our analysis of contractor performance trends (using contractor EVM data12), we

forecast a cost overrun of approximately $161 million. The total acquisition costs could be

as high as $872 million.

The current cost estimate does not take into account contract items that are being 

renegotiated. There are 91 contract items for site deployment that have expired and have

to be renegotiated. According to USCG, based on their experience with the cost overruns

at the IOC sites, costs for each of the contract item listed below will increase:

 regional implementation plans

 regional infrastructure preparation

 regional system installation

Coast Guard officials agreed with our analysis of projected cost overruns.

11 This estimate reflects only the acquisition component and does not include operations & maintenance. The total life cycle cost estimate is approximately $1.6 billion.

12 We used contractor-provided data that reflected work from October 2003 to December 2005.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 39 GAO-06-623

32

Objective 2

Revised Cost and Schedule Estimates

USCG’s schedule is also uncertain and will likely change.

 The current project schedule is uncertain because of the 91 contract items that must

be renegotiated. USCG estimates that this renegotiation will be completed for its first

15 full-rate production regions in June 2006. Contract items for the remaining full-rate

production regions—intended to be addressed in two additional groups—are to be

negotiated at a later date.

 There is also uncertainty regarding Rescue 21 vessel functionality. Initial plans for

Rescue 21 included functionality to allow USCG to track its vessels and to allow data

transfer between vessels and group communications centers plus an expanded 

vessel communications suite. This functionality is now being deferred while USCG

and DHS decide whether to complete development of its contractor-developed 

solution or use a different solution such as the Automatic Identification System13 for

asset tracking and data transfer on vessels. This decision is currently expected by the

end of April 2006.

13The Automatic Identification System is a Coast Guard project to develop a new system that will be used to monitor and track vessels traveling to and through US waters.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 40 GAO-06-623

33

Objective 2

Revised Cost and Schedule Estimates

Additional issues may also contribute to further cost overruns and schedule delays.

Variability in infrastructure preparation costs. According to USCG officials, there is

significant variation in total costs for antenna towers. Additional costs can be incurred in 

building a tower and significant schedule delays can occur. Further, environmental 

concerns may further delay tower construction. For these reasons, there is significant

potential for cost overruns and schedule slippages in tower construction.

Site reorganization. New site command centers are to be established throughout USCG,

based on a new standard organization model. There is no guarantee that current sites will

have the same functions that they have now. For example, the Eastern Shore group will

become a site with the communication center at Hampton Roads. The equipment at the

Eastern Shore GCC will be moved to Hampton Roads and sites will be reconfigured to the 

new arrangement. Therefore, rework may be needed when the site centers are finalized.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 41 GAO-06-623

34

Objective 2

Cost and Schedule Management

USCG has plans to improve its cost and schedule management in the future. For example: 

 USCG intends to conduct an integrated baseline review of the contractor’s cost and 

schedule estimates after it completes renegotiation of expired contract items for the

deployment to the first 15 full-rate production regions. This baseline review is currently

expected to begin in the June 2006 time frame and is supposed to validate the 

accuracy of the Rescue 21 schedule. However, there is no completion date for the 

baseline review. USCG also intends to complete another baseline review of the 

schedule once the contracts for the remaining 25 full-rate production sites are 

renegotiated.

 USCG intends to conduct full-rate production site deployment incrementally as it

expects this gradual deployment to improve its ability to manage cost and schedule.

The contracts for the first group of 15 regions are currently being negotiated; contracts

for the second set of 11 regions and third set of 14 regions will be addressed 

afterwards.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 42 GAO-06-623

35

Objective 3

Delay in Implementation

The effects of the delays in deploying Rescue 21 include (1) key functionality, such as 

improved direction finding and improved coverage, will not be available; (2) potential failure

of legacy equipment requiring costly repairs; and (3) potential for further upgrades to the

legacy system and resulting costs, despite a moratorium on upgrades. 

Key functionality to production sites will be delayed. Originally, Rescue 21 was to be 

deployed nationwide by fiscal year 2006. The current schedule shows full deployment in 

fiscal year 2011, five years behind schedule. This will result in a significant implementation

delay for many field units. Personnel at the two initial operating capability stations

acknowledged that Rescue 21 provides significantly improved functionality compared to the

legacy system. For example, according to these personnel, Rescue 21’s direction finding 

capability—which allows USCG to locate boaters in distress–is significantly more accurate

as well as more reliable than the legacy system. As a result, until Rescue 21 is deployed, 

field units with the legacy system will continue to be at risk of performing larger and 

potentially more costly searches due to limited direction finding capabilities. 

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 43 GAO-06-623

36

Objective 3

Delay in Implementation

Until Rescue 21 is deployed, field units will likely continue to experience communication 

coverage gaps, which limits their ability to hear boaters in distress. However, the impact of

coverage gaps varies depending on the availability of local partners to conduct search and 

rescue, or vessels to relay distress calls. Personnel at one field unit explained that they rely 

on a marine patrol unit to conduct searches in a coverage gap area, whereas at another

site, the USCG field unit is the only resource available to conduct search and rescue 

operations. Nevertheless, until Rescue 21 is fully deployed, missed mayday calls—and the 

potential for lives lost—creates uncertainty about the legacy system’s reliability and 

reduces operators’ confidence in the system.

Potential for failure of legacy equipment requiring costly repairs. The legacy system is

about 30 years old and is difficult to maintain. Until Rescue 21 is deployed, legacy 

equipment will continue to be at high risk for failure; these failures could result in costly

repairs. Some USCG maintenance officials questioned whether legacy equipment will 

continue to function until Rescue 21 is fully deployed, especially in field units scheduled for 

later implementation. Field units could also experience higher costs resulting from the need 

to replace equipment and reengineer parts that are no longer manufactured. In addition,

maintenance expertise needed to repair the antiquated equipment is limited and, as a

result, repairs are not always timely.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 44 GAO-06-623

37

Objective 3

Delay in Implementation

Further upgrades to the legacy system to address operational issues could occur,

despite a moratorium on upgrades. The USCG instituted a moratorium on upgrades to

the legacy system because Rescue 21 was to replace the equipment. However, with units

facing delays of up to 5 years, USCG may decide that the risk to its operations is

sufficiently high that it should upgrade or install new legacy equipment rather than wait to

receive the new system. In certain cases, this has already occurred, despite the 

moratorium. For example, USCG officials reported that they upgraded a console at one unit

to mitigate operational challenges, and installed a new antenna at a second unit to address

coverage gaps. Additional upgrades such as these would result in higher costs, especially

at field units scheduled for later implementation.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 45 GAO-06-623

38

Conclusions

Although USCG plans to improve its capabilities in a number of areas to better manage the 

remaining development and deployment of Rescue 21 by establishing executive-level

meetings with the prime contractor, it is imperative that key executives aggressively

monitor costs and schedule performance and mitigate risks so the remaining development

and deployment of Rescue 21 is effectively managed and delivered.

USCG’s current acquisition cost estimate is not viable and its schedule is uncertain and

likely to change. USCG has plans to complete an integrated baseline review, but it has not

established a target completion date. Without the results of this review, the cost and

schedule estimate cannot be completed.

If deployment of Rescue 21 continues to be delayed, Coast Guard sites and services will

be impacted in several ways. First, key functionality, such as improved direction finding and

improved coverage of coastal areas, will not be available as planned. Coast Guard 

personnel at these sites will continue to use outdated legacy communications systems for 

search and rescue operations and coverage of coastal regions will remain limited. In

addition, these delays could result in costly upgrades to the legacy system to address

communications coverage gaps as well as other operational concerns.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 46 GAO-06-623

39

Recommendations

To more effectively manage the remaining development and deployment of Rescue 21, we

recommend that the Commandant of the United States Coast Guard ensure that executivelevel management implements the following three recommendations:

 oversee the project’s progress toward cost and schedule milestones and manage 

risks,

 establish a milestone to complete Rescue 21’s integrated baseline review, to include 

all renegotiated contract items, and 

 use the results of this review to complete a revised cost and schedule estimate.

Coast Guard's Rescue System
Appendix I: Briefing Slides 

Page 47 GAO-06-623

40

Agency Comments

In providing oral comments on a draft of this briefing, the Coast Guard Assistant 

Commandant for Acquisition stated that the briefing fairly represented Rescue 21 risks and 

ongoing activities to address program management and other issues. He also stated that

this briefing would be used as input for them to take corrective actions to improve program 

management.

Regarding the status of the vessel asset tracking and data transfer functionality that was

deferred, the Assistant Commandant stated that he expects this functionality to be

addressed with the Automatic Identification System, rather than by Rescue 21. This

decision is pending Department of Homeland Security concurrence.

Coast Guard did not concur with our statements regarding executive oversight. They stated 

that, prior to 2005, there were briefings to executive management, such as the key decision

point and semi-annual meetings. However, as previously stated, there is no evidence that 

these executive-level meetings occurred.

The Coast Guard also provided specific technical comments, which we have incorporated 

into the briefing as appropriate.

Coast Guard's Rescue System
Appendix II: Comments from the Department Appendix II: Comments from the Department of Homeland Security

of Homeland Security 

Page 48 GAO-06-623 Coast Guard's Rescue System
Appendix II: Comments from the Department 

of Homeland Security

Page 49 GAO-06-623 Coast Guard's Rescue System
Appendix II: Comments from the Department 

of Homeland Security

Page 50 GAO-06-623 Coast Guard's Rescue System
Appendix II: Comments from the Department 

of Homeland Security

Page 51 GAO-06-623 Coast Guard's Rescue System
Appendix II: Comments from the Department 

of Homeland Security

Page 52 GAO-06-623 Coast Guard's Rescue System
Appendix II: Comments from the Department 

of Homeland Security

Page 53 GAO-06-623 Coast Guard's Rescue System
Appendix III: GAO Contacts and Staff Acknowledgments 

Page 54 GAO-06-623

Appendix III: GAO Contacts and Staff 

Acknowledgments 

David A. Powner, (202) 512-9286 

Stephen L. Caldwell, (202) 512-9610 

In addition to the contacts named above, Joel Aldape, Lisa Canini, Carol 

Cha, Nancy Glover, Dawn Hoff, Tonia Johnson, George Kovachick, Freda 

Paintsil, Karl Seifert, and Kim Zelonis made key contributions to this 

report. 

Coast Guard's Rescue System

GAO Contacts 

Staff 

Acknowledgments 

(310814) 
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