Page 1 GAO-12-751R DHS and USCG Fleet Studies 

United States Government Accountability Office

Washington, DC 20548

May 31, 2012 

Congressional Committees

Subject: Observations on the Coast Guard’s and the Department of Homeland 

Security’s Fleet Studies

This letter transmits the enclosed briefing slides that we provided to you on April 20, 

2012. The Conference Report accompanying the Department of Homeland Security

(DHS) Appropriations Act, 2012, directed the Coast Guard to submit phases one and 

two of the Fleet Mix Analysis and the Cutter Fleet Mix Analysis, as specified in the 

Senate Report.1 The Senate Report directed GAO to provide an assessment of the 

results of these analyses.2 In response to the mandate, we addressed the following 

objectives: (1) What are the key results of the Coast Guard’s Fleet Mix Studies and 

DHS’s Cutter Study with respect to recapitalization and operations? (2) How useful 

are these studies to DHS, the Office of Management and Budget (OMB), and the 

Coast Guard for informing recapitalization decisions? 

To conduct our work, we obtained and analyzed Fleet Mix Phase One, Fleet Mix 

Phase Two, and the DHS Cutter Study to understand the key results. We reviewed 

Coast Guard appropriations from fiscal years 2008 through 2012 and the President’s 

budget request for fiscal year 2013 to analyze how fiscal assumptions in the studies 

compared with past appropriations. We interviewed Coast Guard, DHS, and OMB 

officials to discuss the studies’ results and primarily relied on agency officials to 

identify whether the studies were useful for informing recapitalization decisions. We 

obtained agency comments on the draft slides prior to the April 20, 2012 briefing. 

These comments were incorporated as appropriate and the agency comment letter is 

included as a part of the enclosed briefing slides. 

We conducted this performance audit from March 2012 to May 2012 in accordance 

with generally accepted government auditing standards. Those 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 the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 

1

H.R. Conf. Rep. No. 112-331, at 980 (2011). 2

S. Rep. No. 112-74, at 100 (2011).
Page 2 GAO-12-751R DHS and USCG Fleet Studies 

Background

We have reported extensively on the Coast Guard’s challenges managing its broad 

multi-billion dollar major acquisition portfolio, intended to acquire capabilities to 

conduct missions ranging from marine safety to defense readiness. The Coast Guard 

completed a two-phased Fleet Mix Analysis that intended to eliminate uncertainty 

surrounding the future mission performance of the Coast Guard’s fleet and produce a 

baseline for the acquisition of a majority of the Coast Guard’s assets. Fleet Mix 

Analysis Phase One assessed surface, air, and information technology capabilities 

and mission demands in an unconstrained fiscal environment. The Coast Guard then 

added cost constraints to Fleet Mix Analysis Phase One, resulting in Fleet Mix 

Analysis Phase Two. Seeking information to aid in making trade-offs, DHS, at the 

suggestion of OMB, commissioned a Cutter Study looking at potential trade-offs 

within the Coast Guard’s major cutter fleet, comprised of National Security Cutters 

(NSCs) and Offshore Patrol Cutters (OPCs).

Summary

Fleet Mix Phase One, which was not cost constrained, indicated that the planned 

program of record does not fully meet long-term strategic goals and found that, to 

meet these goals, the Coast Guard requires a fleet that could cost as much as $65 

billion to acquire, which is about $40 billion more than the $24.2 billion program of 

record. Coast Guard officials stated that the analysis supports the continued pursuit 

of the program of record. However, DHS Program Analysis & Evaluation (PA&E) and 

OMB officials told us that the analysis has limited utility without cost constraints and 

trade-offs. 

Fleet Mix Phase Two considered two different funding scenarios and indicated that 

there may be opportunities to improve the affordability of the program of record by 

reducing capability, while still enhancing performance over the current fleet. The 

study illustrated that by 2034, the performance of the planned fleet will be nearly 50 

percent higher than performance projections for the Coast Guard’s fleet in 2014. 

However, this level of performance will require an optimistic level of funding. The 

lower bound funding scenario used in the study, $1.2 billion (fiscal year 2009 dollars), 

is greater than the Coast Guard’s past 5 years of appropriations. The Coast Guard 

stated that the study’s results are useful because it found that if the Coast Guard 

receives less than $1.2 billion per year, they will not be able to buy the program of 

record before the next recapitalization begins. DHS PA&E officials stated that the 

usefulness of the Phase Two study is limited because it was based on the program of 

record. OMB officials added that the scenarios in the study were based on the 

program of record and only increase the total number of assets acquired. 

The DHS Cutter Study primarily demonstrated that the performance of the Coast 

Guard’s future fleet is dependent upon the “effective presence” of the assets, which, 

according to the Coast Guard, means having the right assets and capabilities at the 

right place at the right time. For example, the study showed that the OPC will be able 

to launch small boats and helicopters in rougher waters than the current medium 

endurance cutter, which will increase the Coast Guard’s ability to be effectively 
Page 3 GAO-12-751R DHS and USCG Fleet Studies 

present in all operating areas. However, the study did not fully consider how often 

the Coast Guard needs to operate in these rougher waters. The Cutter Study also 

examined the Coast Guard’s defense readiness mission and found that defense 

readiness is a key factor in determining the quantity of NSCs to purchase. Coast 

Guard officials stated that the Cutter Study supports the continued pursuit of the 

program of record. DHS PA&E and OMB have so far used the Cutter Study to inform 

the fiscal year 2013 budget. For example, DHS PA&E officials stated that the Cutter 

Study provided information that DHS and OMB used, in conjunction with other 

information sources, to inform the decision to not include the last two NSC hulls—

hulls 7 and 8—in the FY2013-2017 capital investment plan. 

We are not making any new recommendations for agency action. In July 2010, 

following the completion of Fleet Mix Phase One, we recommended that the Coast 

Guard present a comprehensive review of the Deepwater Program that clarifies the 

overall cost, schedule, quantities, and mix of assets required to meet mission needs, 

including trade-offs in light of fiscal constraints.3 DHS concurred, but has not yet 

implemented this recommendation. In 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 to identify cost, capability, and quantity trade-offs that 

would produce a program of record that fits within expected budget parameters.4

DHS concurred, but has yet to implement this recommendation. 

Agency Comments

DHS and the Coast Guard provided technical comments that we incorporated into 

this letter as appropriate.

We are sending copies of this report to the appropriate congressional committees. 

We are also sending copies to the Secretary of the Department of Homeland Security 

and the Commandant of the Coast Guard. This report will also be available at no 

charge on our website at http://www.gao.gov. Should you or your staff have 

questions concerning this report, contact John Hutton at (202) 512-4841 or 

huttonj@gao.gov or Stephen Caldwell at (202) 512-9610 or caldwells@gao.gov. 

 

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

Knowledge Gained, GAO-10-790 (Washington, D.C: July 27, 2010). 4 GAO, Coast Guard: Action Needed As Approved Deepwater Program Remains Unachievable, GAO11-743 (Washington, D.C.: July 28, 2011).
Page 4 GAO-12-751R DHS and USCG Fleet Studies 

Contact points for our Offices of Congressional Relations and Public Affairs may be 

found on the last page of this report. Key contributors to this report were Katherine 

Trimble, Assistant Director; Jonathan Bachman, Laurier Fish, and Molly Traci. 

John Hutton

Director, Acquisition and Sourcing Management 

Stephen Caldwell

Director, Homeland Security and Justice 

Enclosure: Briefing with our observations of the Coast Guard’s and DHS’s Fleet 

Studies
Page 5 GAO-12-751R DHS and USCG Fleet Studies 

List of Requesters:

The Honorable Mary Landrieu

Chairman 

The Honorable Dan Coats

Ranking Member 

Subcommittee on Homeland Security

Committee on Appropriations

United States Senate 

The Honorable Robert B. Aderholt

Chairman 

The Honorable David E. Price 

Ranking Member 

Subcommittee on Homeland Security

Committee on Appropriations

House of Representatives 

(121069)
Observations on the Coast Guard’s a

D t t f H l d S it Depar

tmen

t o

f

Homelan

d

Securit

Fleet Studies

Briefing for Congressional Commi

April 20

, 2012

For more information, contact John Hutton at (202) 512-4841 or huttonj@gao.gov, or Stephen Caldwell at (202) 512-9610 or caldwells
Introduction

• The Coast Guard manages a broad multi-billion dolla

acquisition portfolio intended to acquire capabilities to acquisition portfolio intended to acquire capabilities to 

missions that range from marine safety to defense re

• We have reported extensively on the Coast Guard’s s

acquisition challenges and found that the $24 2 billion acquisition challenges and found that the $24.2 billion 

Program, as envisioned in 2007, is no longer achievaof cost and schedule.

• The Coast Guard intended the Deepwater Program to 

term replacement or modernization of certain existing assets, many p of which are at or approaching the end 

projected service lives.
Introduction (continued)

• While the Department of Homeland Security (DHS) and the Coa

lon

g p er use the term “Dee

pwater” for the 

p g ro

gram aimed at recap 

surface, air, and information technology capacity, both organizacompleted studies examining the mix of Deepwater assets:1

• C t G d’ Fl t Mi Ph 1 Coas

t

Guard’s Flee

t Mix Phase 

1: I t d d t dd 

In

ten

d

e

d

to address unce

surrounding future mission performance and produce a basDeepwater acquisition

• Coast Guard Coast Guard s’ Fleet Mix Phase 2 Fleet Mix Phase

2: Conducted as a follow : Conducted as

a follow

-on 

on 

add cost constraints

• DHS’s Cutter Fleet Study (Cutter Study): Conducted to eva

an alternative cutter fleet mix could improve the Coast Guar

perf hil i t i i i iti t f th 

formance while main

t

aining acquisition cos

ts o

f the prog

at the time of the study. DHS Program Analysis and Evaluathe analysis with contractor support including the Center for 

( ) CNA

).

1 DHS’s fiscal year 2012 budget request to Congress included a proposal to eliminate the term “Integrated Deepwater System” from t

appropriation.
Congressional Mandate and GAO Obje

The Conference Report accompanying the Department 

Security Appropriations Act 2012 directed the CoasSecurity Appropriations Act, 2012, directed the Coas

submit phases one and two of the Fleet Mix Analysis Cutter Fleet Mix Analysis, as specified by the Senate 

The Senate Report directed GAO to provide an asseThe Senate Report directed GAO to provide an asse

the results of these analyses.

3

In response to the mandate, we addressed the following 

1. What are the key results of the Coast Guard’s Fl

Studies and DHS Studies and DHS s’ Cutter Study with respect to Cutter Study with respect to

recapitalization and operations? 

2. How useful are these studies to DHS, Office of M

and Budget and the Coast Guard for informing and Budget, and the Coast Guard for informing

recapitalization decisions? 

2 H.R. Conf. Rep. No. 112-331, at 980 (2011). 3 S. Rep. No. 112-74, at 100 (2011).
Scope and Methodology

• To conduct our work, we:

• obtained and anal

yzed Fleet Mix Phase 1, Fleet Mix Phase 2, an

Study to understand the key results;

• informed our analysis of the studies by reviewing past work;• reviewed Coast Guard appropriations from fiscal years 2008-201

President President s’ budget request for fiscal year 2013 to analyze how fi

budget request for fiscal year 2013 to analyze how fi

in the studies compared with past appropriations; and 

• interviewed officials from the Coast Guard, DHS, and the Office o

and Budget (OMB) to discuss the key results of these analyses a

relied on officials to identify whether the studies were useful for irelied on officials to identify whether the studies were useful for i

recapitalization decisions.

• We conducted this 

p p erformance audit from March 2012 to A

pril 2012 

with generally accepted government auditing standards. Those standawe plan and perform the audit to obtain sufficient, appropriate evidencreasonable basis for our findings and conclusions based on our audit believe the evidence obtained 

p 

rovides a reasonable basis for our find

conclusions based on our audit objectives, which is required by the st
Background

• The Deepwater Program of Record was based on the Coast Guard’s mission re

in the DHS-approved 2004 Deepwater Mission Need Statement. As seen in Ta

of Record included 13 acquisitions of Record included 13 acquisitions.

Asset Portfolio Quantity in progr

National Security Cutter (NSC) Surface 8 cutters

Off h P t l C tt (OPC) S f 25 tt

Table 1: Deepwater Program of Record

Offshore Patrol Cutter (OPC) Surface 25 cutters

Fast Response Cutter (FRC) Surface 58 cutters

Medium Endurance Cutter Sustainment Surface 27 legacy cuttersPatrol Boat Sustainment Surface 17 legacy boats

Cutter Small Boats Surface 27 boatsHC-144A Maritime Patrol Aircraft Aircraft 36 aircraft with mis

HC-130J Long-Range Surveillance Aircraft Aircraft 8 aircraft

HC-130H Long-Range Surveillance Aircraft Aircraft 16 aircraft upg 

rade

HH-65 Multi-mission Cutter Helicopter Aircraft 102 aircraft upgradHH-60 Medium Range Recovery Helicopter Aircraft 42 aircraft upgradeUnmanned Aircraft System Aircraft To be decidedCommand Control Communications Computers Information Technology 8 segmentsCommand, Control, Communications, Computers, 

Intelligence, Surveillance and Reconnaissance (C4ISR)

Information Technology 8 segments

Source: GAO presentation of Coast Guard data.
Background (continued)

Table 2: Overview of Coast Guard’s Fleet Mix Studies and DHS Cutte

Stud

y Or

ganization Com

pleted Ke

y p As

pects of the Studies

Fleet MixPhase 1

Coast Guard December 

2009

• Assessed surface, air, and information technol

and mission demands in an unconstrained fiscidentify a fleet that would meet long-term strate

(objective fleet mix) (objective fleet mix). 

• Developed, based on risk metrics, incremental 

bridge the objective fleet mix and the program 

Fleet Mix 

Phase 2

Coast Guard May 

2011

• Primarily assessed the rate at which the Coas

Phase

2 2011 acquire the program of record within acquire the program of record within a high an

a high an

annual acquisition cost constraints.

Cutter Study

DHS August

2011

• Developed alternative cutter fleets that equaled 

cost, at the time of the analysis, of the cutter fl

record.

• Assessed the expected performance of these 

compared to the program of record. 

Source: GAO analysis of Coast Guard data.
Background (continued)

• The Coast Guard identified performance metrics for 7 statutory mission

si

g ( nificant effort from offshore assets (see table 3). These 

performance 

commonly used in each of the three studies to compare fleets.

Mission Performance Metric

Table 3: Overview of 7 Coast Guard Missions and the Related Performance Metrics

Drug Interdiction Percentage of cocaine seizedAlien Migrant Interdiction Migrant interdiction rateLiving Marine Resources Boarding rate for high-threat and low-threat fisheriesOther Law Enforcement Exclusive economic zone interdiction rateSearch and Rescue Percentage of lives savedPort, Waterways, and Coastal Security Intelligence driven security boarding rateDefense Operations Planned out of hemisphere deployment fill rate

Source: GAO presentation of Coast Guard data.

Defense Operations Planned out of hemisphere deployment fill rate
Background (continued)

• In addition, Deepwater assets contribute to maritime 

awareness intelligence exploitation general law enfoawareness, intelligence exploitation, general law enfo

and heavy airlift. 

• D t i i i ff ti 

Deepwa

ter mission success requires effective presen

means having the right assets and capabilities at the the right time. 

• For example, the DHS Cutter Study defines effective p

major cutter time-on-station, capable of launching and aircraft and small boats.
Objective 1 Summary: Key Results of the Co

Guard’s Fleet Studies and DHS Cutter Stud

y

• Key results from the three studies provide some insig

recapitalization and operations under different modelrecapitalization and operations under different model

scenarios.

• Fleet Mix Phase 1: provides insight into the relative perform

program of record and larger fleets program of record and larger fleets

• Fleet Mix Phase 2: provides insight into 

• Length of time it will take to acquire the program of reco

different fundin

g , constraints,

• Performance of fleets at different points in time,• Performance of fleets using different days away from ho

assumptions (rotational crewing)

• DHS Cutter Study: provides insight into characteristics that 

determining the quantity and capability of surface assets
Fleet Mix Phase 1 Provides Insight Into Perfo

Pro

g g ram of Record and Lar

ger Fleets

• Phase 1 analysis was not cost constrained and identified t

Guard s’ objective fleet mix that would meet long objective fleet mix that would meet long

-term stra

term stra

within each deepwater mission. 

• The Coast Guard estimated the total acquisition costs ass

the objective fleet mix could be as much as $65 billion the objective fleet mix could be as much as $65 billion

—a

a

billion higher than the approved $24.2 billion program of re

• The analysis also identified that the planned program of re

meet these long meet these long

-term strategic goals term strategic goals.

• In July 2010, following the completion of Fleet Mix Phase 

recommended that the Coast Guard present a comprehen

the Deepwater Program that clarifies the overall cost schethe Deepwater Program that clarifies the overall cost, sche

quantities, and mix of assets required to meet mission neetrade-offs in light of fiscal constraints.4 DHS concurred, bu

im

plemented this recommendation.

4 GAO, Coast Guard: Deepwater Requirements, Quantities, and Cost Require Revalidation to Reflect Knowledge Gained, GAO-10-7

D.C: July 27, 2010). 
Fleet Mix Phase 2 Provides Insight into Recap

Timeframes Under Two Funding Scenarios

• The Coast Guard found that by using the upper bound cost consbillion/year), it could acquire the program of record 5 years sooneFigure 1: Key Recapitalization Timeframes Under Two Funding Scenarios in billion/year), it could acquire the program of record

5 years soone

the lower bound cost constraint ($1.2 billion/year).

5

Program of record acquired under upper bound ($1.64 billion/year)

Program of record acquired under lower bound ($1.2 billion/year)

Recapitaunder the 

FY2029 FY2034 FY20

U d b d th t d i di t th C t U

n

der upper 

boun

d, the stu

dy indicates the 

Coast

Guard could acquire from FY2029 to FY2034:

• 1 additional NSC (for a total of 9),• 11 additional OPCs (for a total of 36), and • 33 additional FRCs (for a total of 91).

( )

Source: GAO Presentation of Coast Guard data.

5 Constant FY2009 dollars. We previously reported that the Coast Guard did not document its methodology for establishing these constraints and the

about their genesis. See GAO, Coast Guard: Action Needed As Approved Deepwater Program Remains Unachievable, GAO-11-743 (Washington, 
Fleet Mix Phase 2 Found that Under the Lower Boun

Constraint Performance Improves Prior to AchievinP fR d rogram o

f

Recor

d

• Phase 2 assessed performance based on the number of prosecutions a

of time.

6 According to officials, diminishing legacy asset performance ov

accounted for in this study which would likely affect fleet performance.

Figure 2: Number of Prosecutions Over Time, Assuming $1.2 billion/year Until Progra

is Acquired in FY2034

Source: GAO Anal

ysis of Coast Guard data.

Note: For FY2007, FY2014, and FY2029, the study assumes the major cutters are operating 185 days away from homeport. Th

the program of record—assumes the major cutters are operating 230 days away from homeport.

6 A prosecution occurs when a Coast Guard service member engages with a target of interest during the following missions: migrant in

interdiction, living marine resources, and other law enforcement, as well as non-violator traffic. 
Fleet Mix Phase 2 Found that Increasing Day

from Home

p p ort Im

proves Performance 

• Fleet Mix Phase 2 demonstrates that operating the NSCs 

230 days away from homeport per the planned program o230 days away from homeport per the planned program o

opposed to the current fleet’s 185 days, increases perform

• However, Coast Guard officials told us that the Coast Gua

reevaluating its planned rotational crewing policy reevaluating its planned rotational crewing policy

—four cre

four cre

hulls to achieve 230 days away from homeport. Coast Guabeing conducted separate from Fleet Mix Phase 2 indicateda

yy p q s awa

y from home

port, with its re

quisite rotational crew

may be difficult and/or costly to achieve.

• Coast Guard officials noted that the analysis in Fleet Mix P

not look at the effect of rotational crewin

g g, g 

 on training, lo

gis

side billets, and other factors.

7 The program of record includes 33 new vessels—8 NSCs and 25 OPCs to replace 40 legacy vessels—12 High Endurance Cutters 

Endurance Cutters, respectively.
DHS Cutter Study Examined Alternative 

of Surface Assets of Surface Assets

• In the Cutter Study, DHS looked at the following options, which equaled 

cost of the cutter fleet program of record at the time of the analysis:

• Varying the combination of NSCs and OPCs in the program of reco• Developing and buying a modernized version of the Coast Guard’s 

cutter instead of acquiring the OPC, and

• Substituting the Navy Substituting the Navy s’ Littoral Combat Ship (LCS) for some planne

Littoral Combat Ship (LCS) for some planne

Asset

Program of record Fleet 1 Fleet 2 Fleet 3 Fleet 4 Fleet 5 Fleet 6 Fl

Table 4: Overview of Fleet Mixes in DHS’s Cutter Study

NSC 8 5 7 9 5 7 8 OPC 25 30 26 23 0 0 0 Mod-270

0

0

0

0 41 37 34

LCS 0 0 0 0 0 0 0 FRC 58 58 62 59 60 58 58 

8 The OPC modeled in the DHS Cutter Study is the objective capability—or the optimum performance—per the OPC’s operational requ

Source: DHS Cutter Study.
DHS Cutter Study: Presence is Key to 

Increasing Cutter Fleet Performance Increasing Cutter Fleet Performance

• The DHS Cutter Study found that speed, seakeeping, range, and endur

factors that contribute to effective 

presence.p

9 The stud

y also states that 

ways to increase presence operationally, for example by basing cutters operating areas.

• While the number of cutters improves presence, presence is reduced if 

perf ti i t t fi form operations in sea s

t

a

te five.

Figure 3: Percentage of Time Cutters Can Operate 

• As seen in Figure 3, a sea 

state 5 OPC improves 

presence in all regions presence in all regions

compared to a sea state 4 modernized 270-foot cutter.

9 Seakeeping refers to a vessel’s ability to withstand harsh sea states. Sea states refer to the height, period, and character of waves o

large body of water. Sea state 5 correlates to wave heights of 8.2 to 13.1 feet and sea state 4 correlates to wave heights of 4.1 to 8.2 

Source: GAO presentation of DHS data.
DHS Cutter Study: LCS is Not Well-Suited fo

Guard Missions

• DHS’s Cutter Study determined that the LCS is not well-suited for Coas

missions. For example, while the planned LCS has a higher speed than 

OPC, its limitations include

• Limited range—requires more frequent refueling than the planned 

its available mission time)

• Inability to maintain effective presence Inability to maintain effective presence

—cannot operate boats or a

cannot operate boats or a

a sea state 

OPC 

Table 5: Comparison of Key Capabilities between the Planned OPC and LCS

Speed 22-25 knots Greater 

Range 8,500-9,500 nautical miles at 17 knots 4,500 nautic

Endurance ( ) days 45-60 

Boat maximum launch limit Through Sea State 5 (13.1’ waves) Through Mid-SHelo maximum launch limit Through Sea State 5 (13.1’ waves) Almost through S

Source: DHS Cutter Study and OPC Operational Requirements Document.
DHS Cutter Study Indicates that a 

Mid

-Capability OPC May Provide the Be

Capability OPC May Provide the Be

• In the Cutter Study, the Center for Naval Analysis (CNA) recommends 

additional fleet mix options, including looking at a mid-capability OPC.

• The mid-capability OPC would reduce the speed and range of the obje

otherwise maintain its presence capabilities including an ability to opera

• A CNA official res

p y onsible for the anal

ysis stated that other characteris

capability OPC could include removing or reducing the following from thwithout affecting presence:

• Sensitive Compartmentalized Information Facility

• Air Search and Fire Control Radars (acquire the positions of tar

these data to a ship's command and control and weapon system

• Electronic Warfare Support Measures 

• B thi (114 i t d f 122) Berthing space (114 ins

tea

d o

f 122)

• Weapons suite (e.g., 25mm gun instead of 57mm)

• The CNA official also stated that CNA has not studied whether these ch

obj ti OPC ld th i ff t i i f bjective OPC would otherwise affec

t mission performance.
DHS Cutter Study Found that Defense Opera

Ke

y g Factor in Determinin

g Quantit

y of NSCs 

• In all three studies, the defense readiness mission is fully 

before other mission areas are assessed.10 before other mission areas are assessed. In doing so, de

In doing so, de

operations is the highest priority mission, only to be met thof NSCs. 

• As a result, the DHS Cutter Study found that a yearly avai

As

a result, the DHS Cutter Study found that

a yearly avai

NSCs is necessary to meet the defense operations presenrequirement.

• In reality Coast Guard officials told us they do not give sp

In reality, Coast Guard officials told us they do not give sp

preeminent priority over any assets and actual mission plaprimarily determined through an analysis of the expected res

p yp y onsibilit

y to res

pond to all statutory missions.

• For example, the first NSC commissioned, BERTHOL

on its second deployment in the Alaska operations aremissions other than defense operations.

10 To support its statutory defense readiness mission, the Coast Guard provides assets to the Department of Defense to support its mi
Objective Two Summary: Usefulness of Flee

to Inform Reca

pitalization Decisions 

• Each of the three studies has limitations that affect th

usefulness for informing recapitalization decisions usefulness for informing recapitalization decisions.

• The Coast Guard maintains that all three studies sup

continued pursuit of the program of record. However, Program Analysis and Evaluation (PA&E) and OMB aCutter Study to inform discussions about whether and program of record could be changed.
Fleet Mix Phase 1 was Not Cost Constrained

the Results Not Feasible• As we have previously reported, the Phase 1 analysis was not c

constrained. Coast Guard officials stated in 2010 that the

y do no

objective mix to be feasible due to cost and do not plan to use thprovide recommendations on a baseline for fleet mix decisions.1

• Despite not being a cost constrained analysis Coast Guard offic

Despite not being

a cost constrained analysis, Coast Guard offic

this analysis supports continued pursuit of the program of recordDHS PA&E and OMB officials told us that the Phase 1 analysis utilit

y without cost constraints and trade-offs. 

• We have previously reported that, given the cost growth, schedu

ex

p g p p , p pg ected chan

ges to 

planned ca

pabilities, the Dee

pwater 

pro

gra

unachievable.12 Without cost constraints, the Phase 1 analysis d

position the Coast Guard to make trade-off decisions in light of fconstraints.

11 GAO-10-790. 12 GAO-11-743.
Fleet Mix Phase 2 Used Optimistic 

Funding Scenarios Funding Scenarios• The upper bound constraint ($1.64 billion/year) used in Phase 2 is unrealistic wh

past Coast Guard appropriations and the President’s FY2013 budget request. B

comparison the lower bound ($1 2 billion/year) is optimistic comparison, the lower bound ($1.2 billion/year) is optimistic.

Figure 4: Fleet Mix Phase 2 Upper and Lower Bounds Compared to Appropriations and FY2013 President’s Budget Request (FY2009 d

• Coast Guard officials 

stated that, in the 

current fiscal climate current fiscal climate, 

the lower bound constraint is more likely and the upper bound scenario is not informing 

decision making.

Source: GAO Anal

ysis of Coast Guard and 

past appro

priations data.

y p

p

p

p

Table Note: The aviation funding level used in the analysis was $350 million/year for blower bound constraints.
Fleet Mix Phase 2 Does Not Examine 

Alternatives to the Program of Record Alternatives to the Program of Record

• In Fleet Mix Phase 2, the Coast Guard only looked at sce

on the 

p g ro

gram of record and the stud

y does not include a

analyses involving quantity or capability. Such an analysis prepare the Coast Guard to make the trade-offs that will bfiscal climate.

• Despite not looking at alternatives to the program of recor

Guard stated the study is useful because they found that Guard stated the study is useful because they found that 

Guard receives less than $1.2 billion/year, they will not be the program of record before the next recapitalization beg

• DHS PA&E stated that the usefulness of Fleet Mix Phase 

because it is based on the program of record. OMB added 

additional scenarios in the study based on the program of additional scenarios in the study based on the program of 

increased the total number of assets acquired.
DHS Cutter Study Focused on the Surface Fleet 

Not Examine Trade-offs Involving Aviation Asse• CNA recommended that DHS commission a similar study 

Guard aircraft because the Cutter Study did not consider cGuard aircraft because the Cutter Study did not consider c

number or mix of aviation assets, other than small adjustmbased aviation assets. 

• A CNA official responsible for leading the analysis sta

A CNA official responsible for leading the analysis sta

helicopters factor strongly in the mission performance 

• CNA noted that there may be opportunities for the Co

trade-off air and surface assets to maximize total 

perfo

• DHS PA&E stated that they have not implemented this rec

yet but have a working group to examine the number and yet, but have

a working group to examine the number and 

aviation assets across DHS’s portfolio.
DHS and OMB are Using DHS Cutter Study t

On

gg p oin

g Reca

pitalization Discussions

• DHS PA&E officials stated that the Cutter Study provides 

about surface fleet options and used the results to inform about surface fleet options and used the results to inform 

• with OMB on the FY2013 budget, including the decisio

include the last two NSC hulls—hulls 7 and 8—in the 

capital investment plan As we have noted in past worcapital investment plan. As we have noted in past wor

investment plan is subject to change each year.13

• at the OPC’s recent Acquisition Decision Event meetin

to continue to use it in assessing OPC affordability to continue to use it in assessing OPC affordability. 

• OMB officials agreed that the DHS Cutter Study was usefu

budget planning and added that the study’s conclusion tha

not it bl di d tt h l f l t a suit

able medium en

durance cutter was 

h

elp

f

ul.

• However, by keeping the cost of the cutter fleet program o

constant in the anal

y y sis, the stud

y does not illuminate trad

likely event they become necessary.

13 GAO-11-743.
How Studies Will Inform Program Decis

is Unclear is Unclear• In July 2011, we reported that it was unclear how D

Coast Guard would reconcile and use these multiplCoast Guard would reconcile and use these multipl

make trade-off decisions.14

• We recommended that the Secretary of Homeland 

d l ki h i l d i i i develop a working group t

hat inclu

des participation 

and the Coast Guard’s capabilities, resources, and directorates to review the results of multi

p 

le studies 

cost, capability, and quantity trade-offs that would pprogram of record that fits within expected budget pDH

S co cu ed, bu as o ye p e e ed s co

ncurred, but has n

ot yet im

ple

m

ented thi

s

recommendation. 

14 GAO-11-743.
Concluding Observations

• The Coast Guard completed Fleet Mix Phase 1 and 2 to examine its m

neither acknowledged the federal budget pressures facing our country, 

usef l f th t di f t d f

ulness o

f the s

t

udies 

for 

tra

de-off d i i ff

decisions. 

• Fleet Mix Phase 2 found that the Coast Guard’s performance will increa

acquires the program of record. However, whether that performance inaffordable is not addressed in the stud

y.

• More recently, DHS’s Cutter Study looked at trade-offs within the Coas

program of record and provides some useful information to decision maconsider OPC affordability and how many NSCs the Coast Guard need

the study indicates examining trade the study indicates, examining trade

-offs in the aviation portfolio could a

offs in the aviation portfolio could a

additional insights.

• DHS PA&E and OMB officials said they are using information in the Cu

inform discussions concerning the Coast Guard’s program of record, bu

whi h h ill b i l t d i t t k hi

c

h c

hanges will

be implemen

t

e

d is no

t ye

t

known. 

• Given that executing the program of record within original cost and sch

is unachievable, DHS and the Coast Guard need to identify trade-off debalance effectiveness with affordability, p y as 

previousl

y recommended.
Summary of Agency Comments

• DHS provided us with written comments on a draft of this briefing (attached

it works with the Coast Guard to prioritize investments and address afforda

example when the Coast Guard identifies progr example, when the Coast Guard identifies programs that deviate from origi

that deviate from origi

DHS holds an investment review board to re-baseline programs to fit within parameters. We reported in July 2011 that Coast Guard is managing a portincludes many revised baselines approved by DHS—that is expected to co

its annual budget will likely support its annual budget will likely support.15 As we noted in that report we believe 

15 As we noted in that report, we believe 

needs to be more proactive in addressing this mismatch of expected fundinfunding needs. As such, the Coast Guard needs to consider trade-offs withproduce a program of record that fits within expected budget parameters.

• DHS also stated that it did consider the results of the Coast Guard DHS also stated that it did consider the results of the Coast Guard s’ fleet m

fleet m

1 and the DHS Cutter Study when developing its fiscal year 2013 budget. Twith our finding that PA&E used the DHS Cutter Study to inform this year’s as we noted, some of these considerations are deferred to the later years i

2017 capital investment plan which is subject to change 2017 capital investment plan, which is subject to change. 

• DHS and Coast Guard also provided technical comments that we incorpora

briefing as appropriate. We also provided draft sections of the briefing to Oofficials, who provided us technical comments via e-mail; we incorporated t

appropriate.

15 GAO-11-743.


GAO on the Web

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441 G Street NW, Room 7149, Washington, D.C. 20548

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