COAST GUARD

Actions Underway to 

Develop Acquisition Plans 

that Reflect New Assets 

and Improve the Asset 

Allocation Process

Statement of Jennifer A. Grover, Director, 

Homeland Security and Justice

Testimony 

Before the Subcommittee on Coast 

Guard and Maritime Transportation, 

Committee on Transportation and 

Infrastructure, House of Representatives

For Release on Delivery 

Expected at 10:00 a.m. ET

Tuesday, June 14, 2016

GAO-16-633T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-633T, a testimony 

before the Subcommittee on Coast Guard and 

Maritime Transportation, Committee on 

Transportation and Infrastructure, House of 

Representatives 

June 2016

COAST GUARD

Actions Underway to Develop Acquisition 

Plans that Reflect New Assets and Improve the 

Asset Allocation Process

What GAO Found

Since the U.S. Coast Guard developed acquisition plans for its asset 

recapitalization program, many of the assumptions that initially informed these 

documents, including its 2005 Mission Needs Statement baseline, are no longer 

accurate. For example, in March 2015, GAO reported that the Coast Guard 

received an unexpected transfer of 14 C-27J aircraft from the Air Force, 

representing a significant change to its aircraft fleet mix. In addition, Congress 

recently provided the Coast Guard with funding for a ninth National Security 

Cutter—one more than it had planned for in 2005. Further, the Coast Guard has 

reduced the operational capacities of several assets to reflect more realistic and 

achievable operational targets. For example, the Coast Guard reduced the 

operational capacity of the Fast Response Cutter from 3,000 hours per vessel 

per year to 2,500 hours. GAO has also consistently found that there is a 

significant difference between the funding the Coast Guard estimates it needs for 

its major acquisitions and what it has traditionally requested and received. The 

Coast Guard’s attempts to address this difference by establishing its future fleet’s 

mission needs within reasonable budget constraints have been unsuccessful.

GAO has made several recommendations for the Coast Guard to improve its 

recapitalization business case, including that the Coast Guard develop a 20-year 

fleet modernization plan that identifies all acquisitions needed to maintain the 

current level of service and the fiscal resources needed to acquire them. The 

Coast Guard concurred with the recommendation and has actions underway, but

has not completed this plan. Given that key changes have taken place since 

2005, the Coast Guard should continue to take steps to address GAO’s 

recommendations.

Coast Guard’s National Security Cutter, Fast Response Cutter, and C-27J Aircraft

GAO reported in May 2016 that the Coast Guard uses the Standard Operational 

Planning Process to annually allocate asset resource hours to field units for 

meeting missions, but the headquarters’ Strategic Planning Directions used in 

this process do not provide field units with strategic, realistic goals. Rather, 

headquarters’ Strategic Planning Directions allocate maximum resource hour 

capacities for each asset. These allocations have consistently exceeded actual 

asset resource hours used by field units. GAO recommended, among other 

things, that the Coast Guard more systematically incorporate field unit input to 

inform more realistic asset allocation decisions—in addition to asset maximum 

capacities currently used—in the annual Strategic Planning Directions to more 

effectively communicate strategic intent to field units. The Coast Guard 

concurred with GAO’s recommendation and stated that it was taking actions to

better incorporate field unit input for fiscal year 2017. 

View GAO-16-633T. For more information, 

contact Jennifer A. Grover at (202) 512-7141 

or groverj@gao.gov.

Why GAO Did This Study

Following the terrorist attacks of 

September 11, 2001, the Coast Guard 

has been charged with expanded 

security-related missions. Constrained 

budgets in recent years have 

underscored the importance of 

ensuring that the Coast Guard has the 

proper mix of assets and that it can 

effectively allocate these assets to 

achieve its missions. In recent years, 

the Coast Guard has begun to deploy

new assets, and has taken actions to 

assess what assets it needs to carry 

out its missions and how to best 

allocate its current assets. However, 

the Coast Guard continues to face 

decisions about what assets it needs 

and how to best allocate these assets 

to meet its mission responsibilities. 

This statement addresses the Coast 

Guard’s (1) mission needs, and (2)

process for allocating asset resource 

hours across missions and units. This 

testimony is based on GAO’s May 

2016 report on the Coast Guard’s 

allocation of assets, and GAO’s body 

of work over the past 6 years on Coast 

Guard major acquisitions, as well as 

selected updates obtained in May 

2016. For the selected updates, GAO 

reviewed Coast Guard documentation

and analyzed fiscal year 2015 data on 

Coast Guard asset resource hour

utilization, which GAO found to be 

sufficiently reliable for the purposes of 

this testimony statement.

What GAO Recommends 

GAO is not making any new 

recommendations in this statement.
Letter

Page 1 GAO-16-633T 

Chairman Hunter, Ranking Member Garamendi, and Members of the 

Subcommittee:

Thank you for the opportunity to discuss our work on the Coast Guard’s 

mission needs and asset allocation process. The U.S. Coast Guard, 

within the Department of Homeland Security (DHS), is the principal 

federal agency responsible for maritime safety, security, and 

environmental stewardship. Following the terrorist attacks of September 

11, 2001, the Coast Guard was charged with expanded security-related 

mission responsibilities. The impact of balancing a broad array of Coast 

Guard missions, in conjunction with constrained budgets in recent years, 

have underscored the need for the Coast Guard to ensure it has the 

proper mix of assets and can effectively allocate them to achieve its 

mission responsibilities.1 In recent years, the Coast Guard has begun to 

deploy new assets, such as National Security Cutters and Fast Response 

Cutters, and has taken actions to assess what assets it needs to carry out 

its missions and how to best allocate its current assets. For example, in 

2008, it developed an annual planning process to allocate asset resource 

hours across its missions and units. Further, in 2016, the Coast Guard 

updated its Mission Needs Statement to provide an overview of its 

missions and the capabilities required within the context of the current 

and emerging strategic environment. We have reported extensively on 

the Coast Guard’s challenges in managing its multi-billion dollar major 

acquisition portfolio, intended to acquire assets and capabilities to 

conduct its various missions.2 In addition, in May 2016, we reported on 

the challenges that the Coast Guard faces in strategically allocating its 

assets to meet its strategic goals.3 The Coast Guard continues to face 

 1

For example, over the past 5 fiscal years, the Coast Guard’s total discretionary budget 

has declined overall—from almost $9.6 billion in fiscal year 2010 to about $9.0 billion in 

fiscal year 2015. In fiscal year 2016, the Coast Guard’s discretionary budget is estimated 

at over $9.9 billion. The discretionary budget amounts were not adjusted for inflation and 

include the gross discretionary budget authority that is provided in appropriation acts and 

require annual action by Congress and the President. This is separate from mandatory 

spending, which is not determined through annual appropriation acts.

2

For example, see GAO, Coast Guard Acquisitions: Better Information on Performance 

and Funding Needed to Address Shortfall, GAO-14-450 (Washington, D.C.: June 5, 2014); 

Coast Guard: Portfolio Management Approach Needed to Improve Major Acquisition 

Outcomes, GAO-12-918 (Washington, D.C.: Sept. 20, 2012); and Coast Guard: Action 

Needed as Approved Deepwater Program Remains Unachievable, GAO-11-743

(Washington, D.C.: July 28, 2011).

3

GAO, Coast Guard: Actions Needed to Improve Strategic Allocation of Assets and 

Determine Workforce Requirements, GAO-16-379 (Washington, D.C.: May 24, 2016).

Letter
Page 2 GAO-16-633T 

decisions about what assets it needs and how to best allocate those 

assets to meet its mission responsibilities.

My testimony today addresses the Coast Guard’s mission needs and its 

annual Standard Operational Planning Process, used to allocate assets 

across missions. It is primarily based on our May 2016 report on the 

Coast Guard’s allocation of assets; as well as prior reports on the Coast 

Guard’s acquisition of assets,4 In addition, my statement includes 

selected updates from May 2016 on the Coast Guard’s efforts to reassess 

and update its mission needs, and fiscal year 2015 asset resource hour 

data. For our past work, among other methodologies, we analyzed Coast 

Guard guidance, data, and documentation, and interviewed Coast Guard 

officials at its headquarters and field units to determine how the Coast 

Guard allocated its assets, how data are used to make annual asset 

allocation decisions, and how the Coast Guard determines future 

resource needs. The products cited in this statement provide detailed 

information on our scope and methodology. To conduct the selected 

updates, we reviewed Coast Guard documentation and interviewed Coast 

Guard officials regarding the agency’s 2016 Mission Needs Statement 

and efforts to update acquisition plans. We also analyzed data on the 

Coast Guard’s asset resource hours used in fiscal year 2015 and found 

the data were sufficiently reliable for the purposes of this testimony. We 

determined this by reviewing agency documentation and testing for 

missing data, outliers, and obvious errors. We conducted this work in 

accordance with generally accepted government auditing standards. 

These standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions, based on our audit objectives.

 4

GAO-16-379; GAO, Coast Guard Aircraft: Transfer of Fixed-Wing C-27J Aircraft Is 

Complex and Further Fleet Purchases Should Coincide with Study Results, GAO-15-325

(Washington, D.C.: Mar. 26, 2015); GAO-14-450; GAO-12-918; GAO-11-743; and Coast 

Guard: Deepwater Requirements, Quantities, and Cost Require Revalidation to Reflect 

Knowledge Gained, GAO-10-790 (Washington, D.C.: July 27, 2010).
Page 3 GAO-16-633T 

The Coast Guard is responsible for 11 statutory missions that are divided 

into non-homeland security and homeland security missions, as shown in 

table 1.5 The Homeland Security Act of 2002 requires that the authorities, 

functions, and capabilities of the Coast Guard to perform all of its 

missions be maintained intact and without significant reduction, except as 

specified in subsequent acts.6 It also prohibits the Secretary of Homeland 

Security from reducing “substantially or significantly...the missions of the 

Coast Guard or the Coast Guard’s capability to perform those missions.”7

Table 1: Information on the Coast Guard’s 11 Missions

Mission Description

Non-homeland 

security missions

Marine safety Enforce laws which prevent death, injury, and property loss in the marine 

environment.

Marine environmental 

protection

Enforce laws which deter the introduction of invasive species into the maritime 

environment, stop unauthorized ocean dumping, and prevent and respond to oil 

and chemical spills.

Search and rescue Search for, and provide aid to, people who are in distress or imminent danger.

Aids to navigation Mitigate the risk to safe navigation by providing and maintaining more than 

51,000 buoys, beacons, lights, and other aids to mark channels and denote 

hazards.

Living marine resources Enforce laws governing the conservation, management, and recovery of living 

marine resources, marine protected species, and national marine sanctuaries 

and monuments.

Ice operations The Coast Guard is the only federal agency directed to operate and maintain 

icebreaking resources for the United States. This includes establishing and 

maintaining tracks for critical waterways, assisting and escorting vessels beset 

or stranded in ice, and removing navigational hazards created by ice in 

navigable waterways.

 5

6 U.S.C. § 468(a).

6

6 U.S.C. § 468(c).

7

6 U.S.C. § 468(e).

Background

The Coast Guard’s 

Missions and Assets
Page 4 GAO-16-633T 

Mission Description

Homeland

security missions

Ports, waterways, and 

coastal security

Ensure the security of the waters subject to the jurisdiction of the United States 

and the waterways, ports, and intermodal landside connections that comprise 

the marine transportation system and protect those who live or work on the 

water or who use the maritime environment for recreation.

Drug interdiction Stem the flow of illegal drugs into the United States. 

Migrant interdiction Stem the flow via maritime routes of undocumented alien migration and human 

smuggling activities. 

Defense readiness The Coast Guard maintains the training and capability necessary to 

immediately integrate with Department of Defense forces in both peacetime 

operations and during times of war. 

Other law enforcement Enforcement of international treaties, including the prevention of illegal fishing in 

international waters and the dumping of plastics and other marine debris. 

Source: U.S. Coast Guard. | GAO-16-633T

The Coast Guard utilizes aircraft and vessels to conduct its 11 missions. 

The Coast Guard operates two types of aircraft—fixed-wing (airplanes) 

and rotary-wing (helicopters), including its new C-27J aircraft–and two 

types of vessels–cutters and boats. A cutter is any vessel 65 feet in 

length or greater, having adequate accommodations for crew to live on 

board. Larger cutters (major cutters), over 179 feet in length, include the 

National Security Cutter and the High and Medium Endurance Cutters.8

Cutters from 65 to 175 feet in length include Patrol Cutters such as the 

Fast Response Cutter and the 110-foot Patrol Boat, among others. In 

contrast, all vessels less than 65 feet in length are classified as boats and 

usually operate closer to shore and on inland waterways. As of the end of 

fiscal year 2015, Coast Guard assets included 61 fixed-wing aircraft, 142 

rotary-wing aircraft, 40 major cutters, 205 cutters, and 1,750 boats. Figure 

1 shows three of the Coast Guard’s newest assets.

 8

The Training Barque is also a major cutter, but was not included in this report because it 

is used primarily as a training vessel. 
Page 5 GAO-16-633T 

Figure 1: The Coast Guard’s National Security Cutter, Fast Response Cutter, and C-27J Aircraft

Note: The U.S. Air Force transferred C-27J aircraft to the Coast Guard.

The Coast Guard began a 30-year recapitalization effort in the late 1990s 

to modernize its aircraft and vessel fleets by rebuilding or replacing 

assets. Figure 2 provides a timeline of key events and related acquisition 

studies and reports in this recapitalization program, which was formerly 

known as the Deepwater Program.9

 9

As of the fiscal year 2012 budget, DHS and the Coast Guard no longer use the term 

“Deepwater”; rather it is called the recapitalization program and includes many of the 

assets, such as the National Security Cutter, that made up the former Deepwater 

Program.

The Coast Guard’s 

Recapitalization Program, 

Mission Needs 

Determination, and Asset 

Allocation Process

Coast Guard Recapitalization 

Program and Mission Needs 

Determination
Page 6 GAO-16-633T 

Figure 2: Timeline of Key Events in the Coast Guard’s Recapitalization Program, 1996 to 2016

As part of its recapitalization effort, in 1998, the Coast Guard created the 

Deepwater Program baseline to reflect asset performance levels at that 

time and to serve as a basis for developing performance goals for the 

acquisition of new assets that were to replace certain legacy assets. 

However, a performance gap analysis conducted in 2002 determined the 

revised asset mix, as designed by the recapitalization program, would 

have significant capability gaps in meeting emerging mission 

requirements following the September 11, 2001, terrorist attacks. As a 

result, the Coast Guard completed a Mission Needs Statement in 2005 to 

incorporate the additional capabilities and subsequently updated the 

annual resource hours needed to meet its increased mission demands.10

In 2007, based on the 2005 Mission Needs Statement, DHS approved a 

program of record for all of the Coast Guard’s major acquisition programs 

at an estimated cost of $24.2 billion. This program of record delineated 

the specific number of aircraft and vessels the Coast Guard planned to 

acquire to meet the annual resource hours outlined by the 2005 Mission 

Needs Statement baseline. Further, as part of its recapitalization efforts, 

 10The Coast Guard’s increased mission demands following the terrorist attacks of 

September 11, 2001, included incorporating improved capabilities to operate in conditions 

of chemical, biological, and radiological contamination; greater antiterrorism weaponry; 

development of airborne use of force capabilities; improved communications systems; and 

enhanced flight decks.
Page 7 GAO-16-633T 

the Coast Guard submits an annual 5-year Capital Investment Plan 

Report to Congress that includes, among other things, projected funding 

for capital assets in such areas as acquisition, construction, and 

improvements.

In 2016, the Coast Guard again revised its Mission Needs Statement in 

response to statutory requirements and committee report language, but, 

this revision states it was not intended to provide details on the specific 

assets the Coast Guard needs to meet its mission requirements.11

Further, according to the Coast Guard, the 2016 update to the Mission 

Needs Statement is to provide a foundation for long-term investment 

planning that is to culminate with detailed modeling scenarios to evaluate 

the effectiveness of various fleet mixes, and inform the Coast Guard’s 

Capital Investment Plan. Since the 2016 revision does not identify specific 

assets or resource hours necessary to meet the Coast Guard’s mission 

requirements, the 2005 Mission Needs Statement remains the baseline 

document outlining the Coast Guard’s mission needs and the resource 

hours per asset necessary to achieve them.

Since fiscal year 2008, the Coast Guard has used the Standard 

Operational Planning Process for annually developing and 

communicating strategic commitments and allocating resource hours, by 

asset type (i.e., aircraft, cutters, and boats), throughout its chain of 

command for meeting mission responsibilities.12 As part of the Standard 

Operational Planning Process, Coast Guard headquarters annually 

issues a Strategic Planning Direction, which is to be the primary 

mechanism for allocating asset resource hours and providing strategic 

 11See the Howard Coble Coast Guard and Maritime Transportation Act of 2014, Pub. L. 

No. 113-281, § 215, 128 Stat. 3022, 3034-35; H.R. Rep. No. 113-481 (2014); S. Rep. No. 

113-198 (2014), and the explanatory statement accompanying the Department of 

Homeland Security Appropriations Act, 2015, Pub. L. No. 114-4, 129 Stat. 39 (2014). 

12Strategic commitments are annual, up-front commitments of resources made at the 

headquarters level and are deemed by the Coast Guard as critical to the implementation 

of national, DHS, and Commandant strategic priorities. Among other things, strategic 

commitments specify the amount of time certain types of Coast Guard assets are to be 

operating in support of these activities, and these resource allocations serve as minimum 

levels of activity that field unit commanders are expected to provide.

The Coast Guard’s Process for 

Allocating Assets to Meet 

Mission Responsibilities
Page 8 GAO-16-633T 

direction to field commands.13 Resource hours are subsequently allocated 

by asset type at the Area, District, and Sector levels for meeting strategic 

commitments and executing the 11 statutory missions.14

After assets are deployed, field unit personnel are to record resource 

hours used by Coast Guard assets to accomplish missions, such as 

domestic ice breaking or marine environmental protection operations.15

These asset resource hours are input into one of two operational 

reporting databases–the Asset Logistics Maintenance Information System 

(ALMIS)16 or the Abstract of Operations System (AOPS).17 After the data 

have been entered, the Coast Guard Business Intelligence system is 

used to extract and combine asset resource hour and performance data 

each quarter to create Operational Performance Assessment Reports.

18

The historical and current-year data on asset operational hours used, by 

 13The two Area commanders—one for the Atlantic Area Command and one for the Pacific 

Area Command—are responsible for translating policy into operational objectives through 

theater plans for Coast Guard missions. The Coast Guard has nine districts that report to 

the Area Commands. The nine Coast Guard districts are supported by 37 sectors. The 

Strategic Planning Directions are annually disseminated to the two Area Commands that 

are then to disseminate their own Operational Planning Directions through their command 

levels, with each district command developing its own plan to cover its area of 

responsibility.

14To determine and plan for how assets are to be allocated, Coast Guard headquarters is 

to rely on mission priorities, data on historical and current-year mission performance, and 

operational and intelligence assessments.

15According to Coast Guard instructions, field units are to record at least one type of 

activity, such as one of the Coast Guard’s 11 statutory missions, per deployment within 24 

hours after an asset is deployed. Staff at the relevant field units are to review and certify 

that the data entered are accurate.

16ALMIS is a centralized system that provides aircraft and vessel logistics information and 

support for Coast Guard operations, mission scheduling and execution, maintenance, and 

other issues. Coast Guard field units are responsible for timely and accurate data entry 

and are to ensure the database is secure and that access is appropriately limited.

17Information from AOPS is used for documenting planning activities, such as tracking the 

number, locations, and missions of Coast Guard assets, among other things. According to 

operational reporting guidance, the Coast Guard is in the process of migrating AOPS data 

to ALMIS.

18Some performance data for the Operational Performance Assessment Reports are 

extracted from a third database—the Marine Information for Safety and Law Enforcement 

system—an operational activity case management system used to collect data on

activities concerning safety and law enforcement such as vessel inspections, and oil spill 

assistance.
Page 9 GAO-16-633T 

mission, from these reports, as well as Planning Assessments, are to be 

communicated back to Coast Guard headquarters and incorporated into 

the Standard Operational Planning Process to inform asset hour 

allocations in the Strategic Planning Direction for the following year.

Since the Coast Guard developed acquisition plans for its Deepwater 

recapitalization program, many of the assumptions that initially informed 

these plans, including the 2005 Mission Needs Statement baseline for 

those assets, have changed and are no longer accurate, as we reported 

in June 2014 and May 2015.19 While the Coast Guard is continuing to 

acquire and deploy new assets each year, the Coast Guard operated 

assets in fiscal year 2015 below the baseline level of resource hours 

outlined for these assets in the 2005 Mission Needs Statement. For 

example, in fiscal year 2015, a mix of new and legacy Patrol Cutters, 

including new Fast Response Cutters, used 82,233 resource hours of the 

174,000 resource hours specified in the 2005 baseline—a 52 percent 

difference.20 The asset resource hours used in fiscal year 2015 were 

below the 2005 baseline level, in part, because not all of the new assets 

planned as part of the 2005 baseline were deployed and fully operational 

by fiscal year 2015.21 In addition, as we have previously reported, the 

 19GAO, Coast Guard Acquisitions: As Major Assets Are Fielded, Overall Portfolio Remains 

Unaffordable (Washington, D.C., May 14, 2015) GAO-15-620T and GAO-14-450

20In fiscal year 2015, Patrol Cutters included 26,495 resource hours by 10 new Fast 

Response Cutters (WPC-154) and 56,738 resource hours by 29 – 110-foot Patrol Boats 

(WPB-110). 

21According to Coast Guard’s 2007 program of record, full operational capability—that is, 

the date the last asset was to be delivered to the Coast Guard—was planned to occur in 

fiscal year 2017 for fixed wing aircraft (HC-130s and HC-144s), fiscal year 2019 for rotary 

wing aircraft (H-60s and H-65s), fiscal year 2021 for major cutters (National Security 

Cutters and Offshore Patrol Cutters), and fiscal year 2016 for patrol cutters (Fast 

Response Cutters).

The Coast Guard’s 

Acquisition Plans Do 

Not Reflect Its New 

Assets and Current 

Funding Levels

The 2005 Mission Needs 

Statement Baseline Does 

Not Reflect the Coast 

Guard’s Planned Assets 

and Capacities
Page 10 GAO-16-633T 

Coast Guard continues to operate many of its legacy assets, which do not 

always achieve their expected operational capacities.22 Specifically, some 

legacy cutters are up to 50 years old and are expected to be in operation 

for several more years until the replacement cutters can be deployed.23

We have also reported that the Coast Guard has experienced delays in 

acquiring some of its planned assets24 and some of the Coast Guard’s 

new assets that have been deployed have faced operational challenges.25

Nevertheless, because of changes in the assumptions underlying the 

2005 Mission Needs Statement baseline, it may not accurately reflect the 

Coast Guard’s current needs, specifically (1) the planned fleet mix of 

 22For example, in July 2012, we reported on the declining operational capacity and 

increasing unreliability of the Coast Guard’s legacy vessels. GAO, Coast Guard: Legacy 

Vessels’ Declining Conditions Reinforce Need for More Realistic Operational Targets 

[Reissued on August 30, 2012], GAO-12-741 (Washington, D.C.: July 31, 2012). Further, 

the Coast Guard Commandant testified before a congressional subcommittee in February 

2015 that the Coast Guard’s mission demands continue to grow and evolve and that given 

the age and condition of some of its legacy assets, the success of future missions relies 

on the continued recapitalization of Coast Guard aircraft, cutters, boats, and infrastructure. 

See Zukunft, Paul, F., Commandant of the U.S. Coast Guard, Coast Guard, Fiscal Year 

2016 Budget Request, testimony before the House Coast Guard and Maritime 

Transportation Subcommittee, 114th Cong., 1st sess., February 25, 2015.

23In April 2016, the Coast Guard reported that the last High Endurance Cutter is 

scheduled to be decommissioned in 2020, the last 210’ Medium Endurance Cutter is to be 

decommissioned in 2028, and the last 282’ Medium Endurance Cutter is to be 

decommissioned in 2022. 

24For example, we reported in May 2015 that based on the plans at that time, the Coast 

Guard expected that the first Offshore Patrol Cutters—which are to replace the Medium 

Endurance Cutters—would not be delivered until 2022 because of procurement delays, 

including a bid protest. See GAO-15-620T.

25GAO, Coast Guard: Timely Actions Needed to Address Risks in Using Rotational Crews

GAO-15-195 (Washington, D.C.: March 6, 2005). For example, in 2012, the Coast Guard 

decided to complete needed structural enhancements to the hulls of the first two National 

Security Cutters, thus limiting the number of major cutter resource hours available during 

an estimated 2-year timeframe beginning in fiscal year 2017. During the design phase, the 

National Security Cutters’ hull was found, as confirmed by a U.S. Navy study, to be 

unlikely to meet the 30-year service life expectations because of fatigue. Fatigue is 

physical weakening because of age, stress, or vibration. At the time the structural 

deficiencies were confirmed, the Coast Guard could not make the design changes 

because it held only an advisory role in making technical decisions under the Deepwater 

Program structure. The Coast Guard ultimately decided to correct the structural 

deficiencies for the first two National Security Cutters at scheduled points after 

construction was completed to avoid stopping the production lines, and to incorporate 

structural enhancements into the design and production for future ships. See also GAO, 

Homeland Security Acquisitions: DHS Has Strengthened Management, but Execution and 

Affordability Concerns Endure, GAO-16-338SP (Washington, D.C.: Mar. 31, 2016).
Page 11 GAO-16-633T 

aircraft and vessels has changed, and (2) the planned operational 

capacities of these new assets have, in some cases, been revised 

downward. See Appendix I for more information on the Coast Guard 

asset baselines and actual resource hours used in fiscal year 2015, as 

well as changes to its planned fleet mix and operational capacities over 

time.

The Coast Guard’s planned aircraft and vessel fleet mix has changed 

since the 2005 Mission Needs Statement baseline was developed. For 

example, in 2005, the Coast Guard planned for the acquisition of HC-144 

and HC-130 aircraft for its fixed-wing aircraft fleet. However, we reported 

in March 2015 that the unexpected transfer of C-27J aircraft from the 

Department of Defense in December 2013 represented a significant 

change to this aircraft fleet mix.26 As a result of this change, the Coast 

Guard decreased its planned acquisition of HC-144 aircraft.27 In another 

example, with regard to its aircraft fleet, the Coast Guard initially planned 

for fixed-wing Unmanned Aerial Vehicles and Vertical Take-Off and 

Landing Unmanned Air Vehicles in the 2005 baseline, but, as of May 

2016, Coast Guard officials stated these unmanned assets have not yet 

been acquired.28 For the major cutter fleet, the Coast Guard had planned 

for 8 National Security Cutters and 25 Offshore Patrol Cutters to replace 

 26In December 2013, the National Defense Authorization Act for Fiscal Year 2014 required 

the Department of Defense to transfer 14 of its unwanted C-27J aircraft to the Secretary of 

Homeland Security for the use of the Coast Guard. Pub. L. No. 113-66, §1098(e), 127 

Stat. 672, 884 (2013). See GAO-15-325. 

27In October 2014, DHS leadership first directed the Coast Guard to restructure its HC144A acquisition program to accommodate 14 C-27J aircraft from the U.S. Air Force and 

designated this combined acquisition the Medium Range Surveillance Aircraft program. By 

October 2015, the Coast Guard had received four C-27J aircraft from the U.S. Air Force. 

Coast Guard officials plan to submit an Acquisition Program Baseline to DHS leadership 

after the Coast Guard completes a mission needs analysis of its fixed wing aircraft. The 

Coast Guard expects to complete this analysis in fiscal year 2016. See GAO-16-338SP.

28The unmanned aerial vehicle system was envisioned as a key component of the 

Deepwater system that would enhance surveillance capability on board the National 

Security Cutter and Offshore Patrol Cutter and also from land. Congress has appropriated 

over $100 million since 2003 to develop an unmanned aerial vehicle, but the Coast Guard 

terminated the program due to cost increases and technical risks in June 2007. See 

GAO-11-743. See also GAO-16-338SP. We reported in March 2016 that the Coast Guard 

had not yet procured an unmanned aircraft system for the National Security Cutter and 

that it is unclear when the Coast Guard would actually demonstrate the National Security 

Cutter can meet its unmanned aircraft requirements. In June 2016, DHS officials stated 

that the Coast Guard is scheduled to equip a National Security Cutter with unmanned 

aerial vehicle capability by the end of fiscal year 2016.

Changes in the Coast Guard’s 

Planned Fleet Mix
Page 12 GAO-16-633T 

the legacy fleet of High and Medium Endurance Cutters in its 2005 

Mission Needs Statement baseline. However, Congress recently provided 

the Coast Guard with funding for a ninth National Security Cutter as part 

of the Consolidated Appropriations Act, 2016,29 representing an 

unanticipated addition to its planned major cutter fleet.

The expected operational capacities planned for assets in the 2005 

Mission Needs Statement baseline have, in several cases, been 

subsequently revised downward to reflect more realistic and achievable 

operational targets. For example, regarding fixed-wing aircraft, the Coast 

Guard originally planned for each HC-144 aircraft to operate 1,200 flight 

hours per year. However, we reported in March 2015 that the Coast 

Guard had decided to reduce the HC-144 flight hours from 1,200 hours to 

1,000 hours per year due primarily to the high cost of maintaining the 

aircraft at the 1,200-hour per year pace.30 For patrol cutters, the 2005 

Mission Needs Statement baseline planned for each Fast Response 

Cutter to operate for 3,000 hours per year.31 However, the Coast Guard’s 

April 2016 report to Congress on its capital investments states that the 

planned resource hours for each Fast Response Cutter is 2,500 hours per 

year—a reduction of 500 hours per cutter from the 2005 baseline.32

Further, for major cutters, the Coast Guard’s 2005 baseline planned for 

each National Security Cutter and Offshore Patrol Cutter to operate at 

4,140 resource hours per year—equivalent to 230 days away from home 

 29Pub. L. No. 114-113 (2016).

30GAO-15-325.

31According to the Coast Guard, the assumptions of 3,000 operational hours were for the 

originally proposed Fast Response Cutters with a hull made of composite materials (FRCA). Because of technical risks, the Coast Guard discontinued design work on the 

composite hull and transitioned to the steel hull for the Fast Response Cutter (FRC-B). As 

a result of this change, the annual operational hours programmed for each Fast Response 

Cutter were reduced from 3,000 to 2,500 hours.

32Department of Homeland Security, U.S. Coast Guard. USCG FY 2017 Capital 

Investment Plan, Fiscal Year 2016 Report to Congress (Washington, D.C.: Apr. 13, 2016). 

The Coast Guard’s capital investment plan is a 5-year plan presented to Congress that 

includes acquisition, construction and improvements. The Coast Guard updates the 

capital investment plan annually, and it represents the Coast Guard’s submission for the 

President’s Budget in any given year. 

Reductions in New Assets’

Planned Operational 

Capacities
Page 13 GAO-16-633T 

port—using a crew rotation concept.33 However, in March 2015, we 

reported that because of certain risk factors, uncertainty exists regarding 

the Coast Guard’s ability to achieve this operational capacity.34 We 

recommended that the Coast Guard specify mitigation actions to 

effectively address risk factors identified in the report, such as when and 

how National Security Cutter maintenance requirements could be 

completed within the 135 days allocated under the crew rotational 

concept. DHS concurred with the recommendation and, in March 2016, it 

stated that the Coast Guard was developing various testing plans and 

would submit a final crew rotation concept plan to Congress by December 

2017, in response to requirements in the Coast Guard and Maritime 

Transportation Act of 2012.35 Moreover, we noted in our March 2015 

report that these same risk factors may also affect the planned 

operational capacity of the Offshore Patrol Cutters, which are still under 

development.36

 33According to Coast Guard officials, a planning factor of 18 hours per day per vessel is 

used to convert days away from home port into resource hours. Thus, 230 days away 

from home port multiplied by 18 hours per day equals 4,140 resource hours per year per 

vessel.

34GAO-15-195.

35Pub. L. No. 112-213, § 221(b), 126 Stat. 1540, 1560 (2012). This statute states that the 

Coast Guard Commandant may not certify a sixth National Security Cutter as ready for 

operations before the Commandant has submitted to the Committee on Commerce, 

Science, and Transportation of the Senate and the Committee on Transportation and 

Infrastructure of the House of Representatives program execution plans detailing, among 

other things, how the first 3 National Security Cutters will achieve the goal of 225 days 

away from home port in fiscal years following the completion of the structural 

enhancements (formally called Structural Enhancement Dry-Dock Availability) of the first 2 

National Security Cutters. In November 2014, Coast Guard officials estimated the sixth 

National Security Cutter would be ready for operations in December 2017. According to 

Coast Guard officials, because the statute specified that the National Security Cutters 

were to achieve the goal of 225 days away from home port, the planned operational hours 

for the National Security Cutter was adjusted accordingly to 4,050 hours per year per 

vessel (i.e., 225 multiplied by a planning factor of 18 hours per day). 

36In an April 2016 report to Congress, the Coast Guard stated that the Offshore Patrol 

Cutters were to operate 185 days away from home port, or 3,330 hours per year per 

vessel. According to Coast Guard officials, they were still considering the use of the crew 

rotational concept for these cutters. See Department of Homeland Security, U.S. Coast 

Guard. USCG FY 2017 Capital Investment Plan, Fiscal Year 2016 Report to Congress. 

See GAO-15-195.
Page 14 GAO-16-633T 

In its simplest form, a business case requires a balance between the 

concept selected to satisfy mission needs and the resources needed to 

transform the concept into a set of products, in this case aircraft and 

vessels. For the past 6 years, we have consistently found that there is a 

significant difference between the funding the Coast Guard estimates it 

needs to carry out its program of record for its major acquisitions and 

what it has traditionally requested and received through annual 

appropriations. To date, the Coast Guard’s attempts to address this 

difference by establishing its future fleet’s mission needs within 

reasonable budget constraints have been unsuccessful. For example, in 

September 2012, we reported that the Coast Guard had completed two 

efforts (Fleet Mix Phases One and Two) to reassess the mix of assets 

that comprised its former Deepwater program, but both efforts used its 

2005 Mission Needs Statement and 2007 program of record as the basis 

of the analysis and did not consider realistic fiscal constraints.37 In 

particular, the Coast Guard began Fleet Mix Phase One in 2008 that 

considered the 2007 program of record to be the “floor” for asset 

capabilities and quantities and did not impose cost constraints. 

Consequently, the results were not used as a basis for trade-off 

decisions. In the second effort, Fleet Mix Phase Two, the Coast Guard 

analyzed how long it would take to buy the program of record under two 

different funding constraints: (1) an upper bound of $1.64 billion per year 

and (2) a lower bound of $1.2 billion per year. However, both scenarios 

are greater than the Coast Guard’s last four budget requests, indicating 

the upper bound funding level is unrealistic and the lower bound is 

optimistic. Further, the analyses did not assess options lower than the 

current program of record. Therefore, neither of these analyses prepared 

the Coast Guard to make the trade-offs required to develop a solid 

business case that matched its needed capabilities with anticipated 

resources.

Instead of developing a solid business case, we reported in June 2014 

that the Coast Guard is shaping its asset capabilities through the budget 

process.38 As the Coast Guard has faced fiscal constraints in recent 

years, this has led to asset capability gaps. As a result, the Coast Guard 

does not have a long-term plan that demonstrates how it will maintain 

today’s service level and meet identified needs. For example, the Coast 

 37See GAO-12-918.

38See GAO-14-450. 

The Coast Guard 

Continues to Recapitalize 

Assets without a Solid 

Business Case that 

Matches Its Needs and 

Resources
Page 15 GAO-16-633T 

Guard has already experienced a gap in heavy icebreaking capability and 

is falling short of meeting current and future major cutter operational 

hours. While some of these operational capability gaps are being filled 

through Congressional appropriations that exceed Coast Guard budget 

requests and transfers of assets from other agencies, the Coast Guard is 

likely to continue to face similar shortfalls and gaps while the Offshore 

Patrol Cutter fleet, estimated to absorb about two-thirds of the Coast 

Guard’s acquisition funding from 2018 until 2034, is being built. During 

this time, the Coast Guard faces other recapitalization needs—such as 

rebuilding the 87-foot patrol boat fleet, the MH-60 and MH-65 helicopter 

fleets, and possibly extending the service lives of the 270-foot Medium 

Endurance Cutters, among many other projects—that it may not be able 

to fund with its remaining budget. Office of Management and Budget, 

Department of Homeland Security, and Coast Guard efforts are underway 

to address these funding gaps, but to date, these efforts have not led to 

the difficult trade-off decisions needed to create a solid business case 

and improve the affordability of the Coast Guard’s proposed fleet mix. We 

recommended in June 2014, that the Coast Guard develop a 20-year fleet 

modernization plan that identifies all acquisitions needed to maintain the 

current level of service—aircraft and vessels—and the fiscal resources 

needed to buy the identified assets. We further recommended that the 

plan should consider trade-offs if the fiscal resources needed to execute 

the plan are not consistent with annual budgets. The Coast Guard 

concurred with our recommendation, but its response did not fully 

address our concerns or set forth an estimated date for completion.39 As 

of June 2016, the Coast Guard has yet to complete this plan. Without 

such a plan, it will remain difficult for the Coast Guard to fully understand 

the extent to which future needs match the current level of resources and 

its expected performance levels—and capability gaps—if funding levels 

remain constant.

In addition to the 20-year fleet modernization plan, we have made several 

recommendations in recent years for the Coast Guard to improve its 

recapitalization business case by, among other things, identifying the 

cost, capabilities, and quantity and mix of assets needed; as well as the 

 39GAO-14-450.

Past GAO Recommendations
Page 16 GAO-16-633T 

trade-offs necessary to meet fiscal constraints.40 Specific 

recommendations include the following:

• In March 2015, we recommended that the Coast Guard inform 

Congress of the time frames and key milestones for publishing 

revised annual flight hour needs for fixed-wing aircraft, as well as the 

corresponding changes to the composition of its fixed-wing fleet to 

meet these needs.41

• In September 2012, we recommended that the Commandant of the 

Coast Guard conduct a comprehensive portfolio review to develop 

revised baselines that reflect acquisition priorities and realistic funding 

scenarios.42

• In July 2011, we recommended that the Secretary of Homeland 

Security develop a working group that includes participation from DHS 

and the Coast Guard’s capabilities, resources, and acquisition 

directorates to review the results of multiple studies—including Fleet 

Mix Phases One and Two and DHS’s cutter study—to identify cost, 

capability, and quantity trade-offs that would produce a program that 

fits within expected budget parameters.43

The Coast Guard concurred with these recommendations, but is still in 

the process of addressing all recommendations, except the 2011 

recommendation that they chose not to implement. For example, the 

Coast Guard is currently conducting a fleet-wide analysis—including 

aircraft, vessels, and information technology—intended to be a 

fundamental reassessment of the capabilities and mix of assets the Coast 

Guard needs to fulfill its missions. The Coast Guard is undertaking this 

effort consistent with direction from Congress and expects to have it 

completed to inform the fiscal year 2019 President’s Budget.

Coast Guard officials stated that their efforts will help them to respond to 

a number of recent legislative mandates, which include the following:

 40GAO-15-325; GAO-14-450; GAO-12-918; GAO-11-743; and GAO-10-790.

41GAO-15-325. 

42GAO-12-918.

43GAO-11-743.

Legislative Requirements and 

Congressional Mandates
Page 17 GAO-16-633T 

• Fixed-Wing Aircraft Fleet Mix Analysis:44 This is to include a 

revised fleet analysis of the Coast Guard’s fixed-wing aircraft and is 

due in September 2016.

• Rotary-wing Contingency Plan:45 This plan is to address the 

planned or unplanned losses of rotary wing airframes; to reallocate 

resources as necessary to ensure the safety of the maritime public 

nationwide; and to ensure the operational posture of Coast Guard 

units. This plan is due in February 2017.

• Long-Term Acquisition Plan:46 This plan is to be a 20-year Capital 

Investment Plan that describes for the upcoming fiscal year and for 

each of the 20 fiscal years thereafter, such information as the 

numbers and types of legacy aircraft and vessels to be 

decommissioned; the numbers and types of aircraft and vessels to be 

acquired; and the estimated level of funding in each fiscal year 

required to acquire the cutters and aircraft, as well as related 

command, control, communications, computer, intelligence, 

surveillance, and reconnaissance systems and any changes to 

shoreside infrastructure. These plans are to be produced every other 

year to provide an update on the status of all major acquisitions.

• Mission Needs Statement:47 On the date on which the President 

submits to Congress a budget for fiscal year 2019 and every 4 years 

thereafter, the Commandant is to submit an integrated major 

acquisition need statement which, among other things, is to identify 

current and projected gaps in Coast Guard capabilities using specific 

mission hour targets and explain how each major acquisition program 

addresses gaps identified in Capital Investment Plan reports to be 

provided to Congress.

• Concept of Operations:48 This document is to be used in conjunction 

with the Mission Needs Statement as a planning document for the 

 44See Pub. L. No. 114-120, § 204(d).

45See Pub. L. No. 114-120, § 208(b).

46See Pub. L. No. 114-120, § 204(e) (codified at 14 U.S.C. § 2903(e)).

4714 U.S.C. § 569.

48See explanatory statement accompanying Department of Homeland Security 

Appropriations Act, 2015, Pub. L. No. 114-4, 129 Stat. 39 (2014).
Page 18 GAO-16-633T 

Coast Guard’s recapitalization needs. It is to determine the most costeffective method of executing mission needs by addressing (1) gaps 

identified in the Mission Need Statement, (2) the funding requirements 

proposed in the 5-year Capital Investment Plan, and (3) options for 

reasonable combinations of alternative capabilities of aircraft and 

vessels, to include icebreaking resources and fleet mix. This 

document is due in September 2016.

In May 2016, we reported that Coast Guard headquarters does not 

provide field units with realistic goals for allocating assets, by mission.49

Rather, headquarters’ allocations of assets in the annual Strategic 

Planning Directions that we reviewed for fiscal years 2010 through 2016 

were based on assets’ maximum performance capacities. For example, 

the Strategic Planning Directions allocated each Hercules fixed-wing 

aircraft 800 hours per year, each Jayhawk helicopter 700 hours per year, 

and each 210-foot or 270-foot Medium Endurance Cutter 3,330 hours per 

year, irrespective of the condition, age, or availability of these assets.50 As 

a result, we found that, as shown in figure 3, the asset resource hours 

allocated in the Strategic Planning Directions have consistently exceeded 

 49GAO-16-379.

50According to Coast Guard officials, the hours allocated to the Medium Endurance 

Cutters is calculated by using the Coast Guard’s cutter employment standard of 185 days 

away from home port multiplied by a planning factor of 18 hours per day, which equals an 

estimated 3,330 hours of underway operational hours per year.

Use of Asset 

Capacities Limit the 

Strategic 

Effectiveness of the 

Asset Allocation 

Process, but the 

Coast Guard Is 

Taking Steps to 

Improve the Process

Coast Guard 

Headquarters’ Strategic 

Planning Directions

Reflect Asset Maximum 

Capacities Rather Than 

Achievable Goals
Page 19 GAO-16-633T 

the asset resource hours actually used by Coast Guard field units during 

fiscal years 2010 through 2015.51 For example, in fiscal year 2015, the 

Strategic Planning Direction allocated a total of 1,075,015 resource hours 

for field unit assets whereas the actual asset resource hours used was 

804,048 hours, or about 75 percent of the allocated hours for that year.

 51This is based on asset resource hours used as reported in the Operational Performance 

Assessment Reports. Coast Guard officials stated that data in these reports represent a 

point in time and may change for a variety of reasons. For example, an asset could be out 

on a long transit when the Operational Performance Assessment Reports data are pulled 

from the system, and would not be entered until a later date. In addition, officials stated 

that there could be a lag time in when the data is entered.
Page 20 GAO-16-633T 

Figure 3: Comparison of Total Field Unit Asset Resource Hours Allocated in 

Strategic Planning Directions to the Actual Field Unit Asset Resource Hours Used 

Report in the Operational Performance Assessment Reports, Fiscal Years 2010 

through 2015

Notes: The hours for certain assets, such as deployable specialized forces, are not included because 

these assets have specialized capabilities, such as law enforcement and counterterrorism operations 

or hazardous materials response, and perform unique functions across a range of Coast Guard 

missions. The hours for all assets’ (aircraft, cutters, and boats) training and support activities, such as 

engineering and test functions, are included. The hours for assets used exclusively for training 

purposes are not included.

The fiscal year 2014 Strategic Planning Direction planned for lower asset resource hour use because 

of anticipated budget reductions as a result of sequestration. According to the Coast Guard, the 

number of boat resource hours allocated in the Strategic Planning Directions is relatively high and its 

actual use rate is relatively low, as compared to other assets.

Coast Guard field unit officials we spoke with, and Coast Guard planning 

documents we reviewed for our May 2016 report, indicated that the Coast 

Guard is not able to achieve the resource hour allocation capacities set 

by the headquarters’ Strategic Planning Directions for several reasons, 

including the declining condition of legacy assets and unscheduled 

maintenance. Further, we also reported that our review of Coast Guard 

planning documents and discussions with field unit officials showed that 

Operational Planning Directions developed by field unit commands can 

differ from headquarters’ Strategic Planning Directions. For example, 
Page 21 GAO-16-633T 

officials from one district told us on the basis of their analyses, they 

determined that their district could realistically use only about two-thirds of 

the performance capacity hours allocated by the Strategic Planning 

Direction for boats for one mission.

In response to our findings, we recommended that the Coast Guard more 

systematically incorporate field unit input to inform more realistic asset 

allocation decisions—in addition to asset maximum capacities currently 

used—in the annual Strategic Planning Directions to more effectively 

communicate strategic intent to field units. The Coast Guard concurred 

with our recommendation and stated that it was taking actions to better 

incorporate field unit input for fiscal year 2017. If implemented as 

planned, this would meet the intent of this recommendation.

In May 2016, we also reported that the Coast Guard does not maintain 

documentation on the extent to which risk factors have affected the 

allocation of asset resource hours to missions through its Strategic 

Planning Directions.

52 For example, Coast Guard officials told us that the 

Coast Guard conducts a National Maritime Security Risk Assessment 

every 2 years to inform its asset allocations; however, the Coast Guard 

does not document how these risk assessments have affected asset 

allocation decisions across its missions.53 Coast Guard officials stated 

that changes made to Strategic Planning Directions’ asset allocations, by 

mission, are discussed in verbal briefings but it is not their practice to 

maintain documentation on the extent to which risk factors affect asset 

allocation decisions. Without documenting this, the Coast Guard lacks a 

record to help ensure that its decisions are transparent and the most 

effective ones for fulfilling its missions given existing risks. We 

recommended that the Coast Guard document how risk assessments 

conducted are used to inform and support annual asset allocation 

decisions. The Coast Guard concurred with our recommendation and 

stated that it will begin to document these decisions in its fiscal year 2017 

 52GAO-16-379.

53The National Maritime Strategic Risk Assessment is a cross-program assessment which 

produces three main products: (1) a residual risk profile that estimates the expected 

societal loss remaining after the Coast Guard has performed all its prevention and 

response activities, (2) a Coast Guard risk reduction profile that estimates the amount of 

risk averted as a result of Coast Guard activities, and (3) a risk observations for 

management to be used to support performance management and decision-making. 

The Coast Guard Does 

Not Document the Extent 

to Which Risk 

Assessments Affect Asset 

Allocation Decisions
Page 22 GAO-16-633T 

Strategic Planning Direction. If implemented as planned, this would meet 

the intent of this recommendation.

In May 2016, we reported that the Coast Guard is taking steps to improve 

its asset allocation process.54 The actions include the following:

• Improving data quality for resource hours assigned to each 

mission: Coast Guard guidance states that its field units should 

report at least one primary employment category, such as one of the 

11 statutory missions, for the time an asset is deployed. Coast Guard 

officials told us that data on resource hours, by mission, for all assets 

may not be accurate because the Coast Guard does not have a 

systematic way for field units to (1) record time spent on more than 

one mission during an asset’s deployment or (2) consistently account 

for time assets spend in transit to designated operational areas. For 

example, officials from six of the nine Coast Guard districts we 

interviewed told us that they generally record one mission per asset 

deployment, even though each asset’s crew may have performed two 

or more missions during a deployment. Officials from the remaining 

three districts told us that if their assets’ crews perform more than one 

mission per deployment, the crews generally apportion the number of 

hours spent on each mission performed. Coast Guard officials stated 

that the resource hour data were accurate enough for operational 

planning purposes, and that they were in the process of determining 

how best to account for time spent by assets on multiple missions and 

in transit in order to obtain more accurate and complete data on the 

time assets spend conducting each of its missions. For example, in 

April 2014, the Coast Guard issued instructions to its field units to 

provide definitions, policies, and processes for reporting their 

operational activities and also established a council to coordinate 

changes among the various operational reporting systems used by 

different field units.

• Tracking how increased strategic commitments affect resource 

hours available: According to Coast Guard officials, the Strategic 

Planning Directions’ allocations of certain asset hours in support of 

strategic commitments have grown from fiscal year 2010 to fiscal year 

2016. Headquarters and field unit officials we met with told us that it 

 54GAO-16-379. 

The Coast Guard is Taking 

Steps to Improve Its Asset 

Allocation Process
Page 23 GAO-16-633T 

has become increasingly difficult to fulfill these growing strategic 

commitments when asset performance levels have generally 

remained the same or declined in recent years. Further, in February 

2015, the Coast Guard Commandant testified before a congressional 

subcommittee that the Coast Guard’s mission demands continue to 

grow and evolve and that given the age and condition of some of its 

legacy assets, the success of future missions relies on the continued 

recapitalization of Coast Guard aircraft, cutters, boats, and 

infrastructure.55 To meet these challenges, the Coast Guard is taking 

steps to provide more transparency regarding asset resource hours 

needed to support strategic commitments and the remaining resource 

hours available to field unit commanders. For example, starting in 

fiscal year 2015, the Coast Guard began using a new data field to 

track the time assets spent supporting its Arctic strategy.

In conclusion, given that many of the assumptions underlying the Coast 

Guard’s acquisition plans have changed since 2005 and are no longer 

accurate, and the importance of ensuring that limited acquisition 

resources are invested as efficiently and effectively as possible, the Coast 

Guard should continue to follow through with our recommendations to 

identify the cost, capability, and quantity of its fleet mix, as well as the 

trade-offs that would need to be made given fiscal constraints. 

Furthermore, to ensure that assets are deployed consistent with Coast 

Guard mission priorities, the Coast Guard should follow through with 

implementing our prior recommendations to improve its annual resource 

allocation process.

Chairman Hunter, Ranking Member Garamendi, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions that you may have at this time.

 55Zukunft, Paul, F., Commandant of the U.S. Coast Guard, Coast Guard, Fiscal Year 2016 

Budget Request, testimony before the House Coast Guard and Maritime Transportation 

Subcommittee, 114th Cong., 1st sess., February 25, 2015.
Page 24 GAO-16-633T 

If you or your staff have any questions about this testimony, please 

contact Jennifer Grover at (202) 512-7141 or groverj@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this statement. GAO staff who made key 

contributions to this testimony are Christopher Conrad (Assistant 

Director), Nancy Kawahara (Analyst-in-Charge), Bryan Bourgault, John 

Crawford, Tracey Cross, Dominick Dale, Michele Fejfar, Laurier Fish, Eric 

Hauswirth, Tracey King, Michele Mackin, and Katherine Trimble. Key 

contributors for the previous work that this testimony is based on are 

listed in each product.

GAO Contact and 

Staff

Acknowledgments
Appendix I: Planned Operational Capacities 

and Fiscal Year 2015 Actual Asset Resource 

Hour Utilization

Page 25 GAO-16-633T 

The following figures detail the (1) actual number of asset resource hours 

utilized in fiscal year 2015 and (2) the expected, planned operational 

capacity baseline in varying years by each major asset category (fixedwing aircraft, rotary-wing aircraft, major cutters, and patrol cutters).1 The 

2005 baseline was updated from the 1998 baseline to reflect the changes 

in the Coast Guard’s mission as a result of the additional homeland 

security missions it was tasked with after 9/11.

The actual number of asset resource hours utilized is generally lower than 

the baselines for a variety of reasons; including, among other things, the 

fact that not all assets were planned to be acquired and operational by 

fiscal year 2015.

 1

The fiscal year 2015 data are generated from the Coast Guard’s AOPS and ALMIS data 

systems.

Appendix I: Planned Operational Capacities 

and Fiscal Year 2015 Actual Asset Resource 

Hour Utilization
Appendix I: Planned Operational Capacities 

and Fiscal Year 2015 Actual Asset Resource 

Hour Utilization

Page 26 GAO-16-633T 

Figure 4: Planned Operational Capacity for the Coast Guard’s Fixed-Wing Fleet in 

1998, 2005, and 2015 and Actual Resource Hours Utilized in Fiscal Year (FY) 2015

a

The 44,400 hours is the expected annual operational capacity. However, the actual operational 

capacity for the fixed-wing fleet in 1998 was lower (39,517 hours).

b

The 2005 baseline represented the expected annual operational capacity hours and the full-time 

equivalent number of fixed-wing aircraft needed to achieve those hours. This is the number of assets 

that the Coast Guard planned to acquire, not what they actually had in 2005. When routine aircraft 

maintenance schedules are considered, the actual number of aircraft needed to achieve those hours 

would be greater.

c

GAO-15-325 did not include the unmanned air vehicle, as these assets were not part of the scope of 

the review. The GAO analysis includes the expected annual operational capacity and the full-time 

equivalent number of fixed-wing aircraft to achieve those hours. GAO-15-325 specifically reported on 

the total hours (43,200) and the underlying analyses includes the specific number of aircraft. This is 

the number of assets that the Coast Guard planned to have operational, not what they actually had at 

the time of the audit. When routine aircraft maintenance schedules are considered, more fixed-wing 

assets would be needed to achieve those hours.

d

The Coast Guard operated the full-time equivalent of this number of assets in FY 2015. By the end of 

FY 2015, the Coast Guard had 18 HC-144s and 28 HC-130s. Although the Coast Guard did not have 

any operational C-27s in fiscal year 2015, it did record some resource hours for training, which were 

not included in the figure above.
Appendix I: Planned Operational Capacities 

and Fiscal Year 2015 Actual Asset Resource 

Hour Utilization

Page 27 GAO-16-633T 

Figure 5: Planned Operational Capacity for the Coast Guard’s Rotary-Wing Fleet in 

1998 and 2005 and Actual Resource Hours Utilized in Fiscal Year (FY) 2015

a

The 80,000 hours is the expected annual operational capacity. However, the actual operational 

capacity for the H-65s and H-60s in 1998 was lower (75,135 hours).

b

The 2005 baseline represented the expected annual operational capacity hours and the full-time 

equivalent number of rotary-wing aircraft needed to achieve those hours. This is the number of assets 

that the Coast Guard planned to acquire, not what they actually had in 2005. When routine aircraft 

maintenance schedules are considered, the actual number of aircraft needed to achieve those hours 

would be greater.

c

The Coast Guard operated the full-time equivalent of this number of rotary-wing assets in FY 2015. 

By the end of FY 2015 the Coast Guard had 99 H-65s and 43 H-60s in its fleet.
Appendix I: Planned Operational Capacities 

and Fiscal Year 2015 Actual Asset Resource 

Hour Utilization

Page 28 GAO-16-633T 

Figure 6: Planned Operational Capacity for the Coast Guard’s Major Cutter Fleet in 

1998, 2005, and 2017 and Actual Resource Hours Utilized in Fiscal Year (FY) 2015

a

The 1998 major cutter baseline represents the operational capacity of the entire major cutter fleet, 

not the actual 1998 resource capacity.

b

The 2005 baseline represented the expected annual operational capacity of the major cutter fleet 

that the Coast Guard planned to acquire.

c

The FY 2017 to FY 2021 Capital Investment Plan represented the expected annual operational 

capacity of the major cutter fleet that the Coast Guard planned to acquire. According to Coast Guard 

officials, although this capacity for the Offshore Patrol Cutters is reported in the FY 2017 Capital 

Investment Plan, it is the minimum expected operational capacity for these cutters.

d

The Coast Guard operated three National Security Cutters in FY 2015. By the end of FY 2015, the 

Coast Guard had acquired five National Security Cutters. The legacy vessels are being 

decommissioned over time.
Appendix I: Planned Operational Capacities 

and Fiscal Year 2015 Actual Asset Resource 

Hour Utilization

Page 29 GAO-16-633T 

Figure 7: Planned Operational Capacity for the Coast Guard’s Patrol Cutter Fleet in 

1998, 2005, and 2017 and Actual Resource Hours Utilized in Fiscal Year (FY) 2015

a

The 1998 patrol cutter baseline represented the 2003 110-foot Patrol Boat (WPB) reclassification, 

not the actual 1998 resource capacity.

b

The 2005 baseline represented the expected annual operational capacity of the patrol cutter fleet 

that the Coast Guard planned to acquire.

c

The FY 2017 to FY 2021 Capital Investment Plan represented the expected annual operational 

capacity of the patrol cutter fleet that the Coast Guard planned to acquire as part of its 

recapitalization.

d

The Coast Guard operated 10 Fast Response Cutters (FRC) in FY 2015. By the end of FY 2015, the 

Coast Guard had acquired 14 FRCs. The 110-foot Patrol Boats are being decommissioned over time.

(100809)
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