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74–218 PDF 2012

CREATING AMERICAN JOBS AND ASSURING THE 

SAFETY AND SECURITY OF AMERICA’S 

WATERWAYS: A REVIEW OF THE COAST GUARD’S 

5-YEAR CAPITAL IMPROVEMENT PLAN 

(112–86) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MAY 16, 2012 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

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

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

FRANK C. GUINTA, New Hampshire 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

FRANK A. LOBIONDO, New Jersey, Chairman 

DON YOUNG, Alaska 

HOWARD COBLE, North Carolina 

ANDY HARRIS, Maryland 

FRANK C. GUINTA, New Hampshire 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

JEFFREY M. LANDRY, Louisiana, 

Vice Chair 

JOHN L. MICA, Florida (Ex Officio) 

RICK LARSEN, Washington 

ELIJAH E. CUMMINGS, Maryland 

CORRINE BROWN, Florida 

TIMOTHY H. BISHOP, New York 

MAZIE K. HIRONO, Hawaii 

MICHAEL H. MICHAUD, Maine 

NICK J. RAHALL II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

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

TESTIMONY 

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

United States Coast Guard ................................................................................. 4 

PREPARED STATEMENT SUBMITTED BY WITNESS 

Vice Admiral John P. Currier ................................................................................. 15 

SUBMISSION FOR THE RECORD 

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

United States Coast Guard, responses to questions from Hon. Rick Larsen, 

a Representative in Congress from the State of Washington ........................... 23 

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(1) 

CREATING AMERICAN JOBS AND ASSURING 

THE SAFETY AND SECURITY OF AMERICA’S 

WATERWAYS: A REVIEW OF THE COAST 

GUARD’S 5-YEAR CAPITAL 

IMPROVEMENT PLAN 

WEDNESDAY, MAY 16, 2012 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COAST GUARD AND

MARITIME TRANSPORTATION, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

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

2167, Rayburn House Office Building, Hon. Frank LoBiondo 

(Chairman of the subcommittee) presiding. 

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

order. The subcommittee is meeting today to review the Coast 

Guard’s major acquisition programs and its 5-year capital improvement plan. The Coast Guard’s acquisition programs have suffered 

through some very, very dark days. And this subcommittee has 

been vigilant to ensure that the Service has the capability, capacity, and motivation to reform its acquisition process. 

I want to applaud the improvements made by both Admiral Papp 

and his predecessor, Admiral Allen. They both made acquisition reform a priority and focused on the end result: building new assets 

in a timely, cost-effective manner. 

However, I fear—and sometimes it seems, like it does now—that 

for every two steps forward, we may be taking one step back. I 

can’t tell you how concerned that I am—and I believe I speak for 

the committee—about the recent discovery that the Coast Guard 

Cutter Stratton, the third newest National Security Cutter, is in 

need of an emergency drydock to fix a leaky hull plating. 

I know there is an investigation into what caused this steel to 

fail. But again, I can’t tell you how extremely troubling it is to see 

the newest ship in the fleet, and the most expensive cutter in Coast 

Guard history, needing emergency repairs. I just sort of can’t get 

my brain around this one. 

I am also very upset to hear there is a shortage of spares for the 

Maritime Patrol Aircraft. Due to what appears to be very poor 

planning and budgetary short-sightedness, the brand new fleet of 

MPAs will face flight hour restrictions for the foreseeable future, 

further exasperating the MPA’s patrol hour gap. Again, I just hope 

we can get some answers to this, because nothing is making sense. 

2 

The failure to adequately budget for critical spare parts points to 

larger problems with the budget request and the sustainability of 

the capital improvement plan. The administration’s decision to cut 

the Service’s acquisition budget by 19 percent over the current year 

has left it scrambling to reprioritize limited funding, forcing the 

termination of critical acquisition programs and the reduction in 

vital capabilities for certain assets. 

Trying to squeeze a $2.5 billion annual need into a $1.2 billion 

annual program is just not going to work. Trade-offs will undermine the Service’s missions effectiveness, and costs will increase in 

the outyears. And all this on the heels of what we thought were 

a number of years of finally making some progress, and we are 

sliding back down that hill that we pushed so hard to get up very 

rapidly. 

I also continue to be very concerned with the findings by the 

GAO and others with questions—the Service’s assertions that new 

assets are providing increased capability. 

For instance, after 10 years, and nearly $4 billion appropriated 

by Congress, the National Security Cutter and the C4ISR program 

still have not met promised capabilities. How much patience are we 

to have? What else can we do? The three National Security Cutters 

operating today still lack enhanced small boats, extended aerial 

surveillance capability, or a crewing plan to increase patrol days. 

And the C4ISR program has failed to deliver a common operating 

picture across all aspects—something we were told absolutely 

would take place. 

I look forward to hearing from the admiral on how these acquisitions are a good investment for the taxpayer, and how we are going 

to get the results that we were promised, and fix some of these 

problems and keep them from happening again. It seems like it is 

deja vu, we are getting promises of stuff, that it is going to get 

fixed, and then we are back here again with even worse news than 

we had in the prior occasion. 

Finally, while it is important to focus on how the Coast Guard 

intends to recapitalize its assets, we must not forget that the Service faces a half-a-billion dollar backlog in shoreside infrastructure. 

The administration’s decision to slash shoreside infrastructure 

funding by 86 percent and zero out funds to rehabilitation 

servicemember housing—extremely disappointing doesn’t come 

close to covering it. It is a total disregard for what priorities ought 

to be. 

We ask a lot of the men and women in the United States Coast 

Guard. And failing to provide them and their families with adequate housing is just unacceptable. It is totally wrong. 

Admiral, I hope you will be able to tell us when we can expect 

to receive the complete housing survey report, and what the Coast 

Guard is doing to ensure our servicemembers have the resources 

and support they need. 

Admiral, I thank you for appearing today. I congratulate you on 

your promotion to vice commandant. Please give our best wishes to 

Vice Admiral Sally Brice-O’Hara on her retirement. Please extend 

a thank-you from the committee for her 37 years of outstanding 

service to our Nation. 

3 

And before I turn over to Mr. Larsen, Admiral, we have tried to 

be your biggest cheerleaders. We have tried over the years to push 

back on the critics, to explain why and how the Coast Guard needs 

the programs that they need. You are making it very difficult. Not 

you, personally, but you are in the seat today. And we have got to 

get on a positive track here. 

Mr. Larsen? 

Mr. LARSEN. Thank you, Mr. Chairman, for convening this morning’s hearing to continue the subcommittee’s oversight of the U.S. 

Coast Guard’s major acquisition programs and policies. Your persistence in keeping the Coast Guard’s feet to the fire to ensure that 

their acquisition activities remain on track and on schedule is admirable, and essential. It is imperative we avoid any future delays 

and cost overruns if we hope to deliver the Coast Guard with the 

type of 21st-century surface air and communication assets that the 

agency needs. 

It is no exaggeration to say that when the Coast Guard set out 

in 1996 to recapitalize its aging fleets of cutters and aircraft, the 

need for this initiative was unassailable. Despite the past setbacks 

of the former deepwater program, since discontinued, recent evidence demonstrates the Coast Guard has moved smartly to fully internalize all major acquisition activities, and assume the role as 

lead system integrator. New and additional acquisition personnel 

have been hired. Stringent new policies have been adopted to ensure timely and effective oversight, both within the Coast Guard 

and the Department of Homeland Security. 

So, I want to commend Admiral Currier for the many positive actions taken by the Coast Guard to assume all system integrated responsibilities. We all recognize the magnitude of the challenge before you, and realize that this effort remains very much a work in 

progress. 

Notwithstanding this progress, however, significant impediments 

remain and must be overcome if we hope to maintain the Coast 

Guard’s operational capabilities at sea and in the air. Regrettably, 

the only conclusion I can reach after an assessment of the current 

circumstances is that the status of the Coast Guard’s major acquisition programs has now risen to nothing short of critical. 

Mr. Chairman, you will recall the Government Accountability Office has reported that the absence of baseline estimates for several 

major assets, especially the Offshore Patrol Cutter, might drive up 

the overall cost for the major system acquisitions to well over $29 

billion. The GAO also asserts that revised cost estimates and delivery schedules developed by the Coast Guard may be unreliable, because the Coast Guard has not adhered consistently with its own 

best management practices. 

The unreliability of the acquisition timetable was made even 

more acute by significant omissions from the Coast Guard’s fiscal 

year 2013 budget request, most notably the failure to request any 

funding for the final two National Security Cutters, or to account 

for future outyear requests to build a new Polar-class icebreaker. 

Cumulatively, these omissions will add hundreds of millions of 

dollars to future acquisition account requests. And nowhere does 

the budget take into account future outyear operational expenses 

4 

that the Coast Guard will assume when it initiates perpetual seasonal activities in the high North. 

More troubling within the current context of zero sum or declining Federal budgets, these unbudgeted priorities will almost certainly push out further to the right the timetables for other important acquisition or construction programs, and simultaneously also 

wrap up maintenance and operating costs for the Coast Guard’s 

legacy assets. 

Important initiatives such as the construction of Fast Response 

Cutters and maritime patrol craft, completion of the approved program of record for response boat, or the renovation of Coast Guard 

housing and construction of new shore infrastructure will be delayed, prematurely terminated, or left to languish without these 

funds. Additionally, the GAO has raised concerns about the viability of the Coast Guard ever achieving a system of systems capability. It now appears that the new generation of command and 

control and communication technologies once promised will not be 

delivered. 

And so, we have reached a critical threshold. Admiral Papp, in 

his first State of the Coast Guard address, openly acknowledged 

the Coast Guard does not have the resources to perform 100 percent in every one of its statutory missions on every given day. That 

is a somber warning, and something that—which every Member of 

Congress needs to take seriously. 

After all, our Nation is, first and foremost, a maritime Nation. 

Ninety-five percent of our foreign trade arrives or is shipped by 

sea. The maritime transportation system accounts for nearly $700 

billion of the U.S. gross domestic product, and provides roughly 51 

million jobs for U.S. workers. Our Nation’s economy and its security depend upon safe and reliable maritime commerce, and our 

Coast Guard is the indispensable tool that protects and facilitates 

that commerce. 

Mr. Chairman, unless we are willing to see the gaps in this capability expressed by Admiral Papp be—unless we are willing to see 

these gaps become chronic, we need to break from the current deficit-driven mindset. If the Coast Guard could find the means—I am 

sorry, if Congress could find the means to recapitalize the Coast 

Guard during the depths of the Great Depression, we could find the 

resources today to provide the Coast Guard with the type of modern, capable, multimission High Endurance Cutters and aircraft 

that the Coast Guard deserves. Few things are as important. 

With that, I yield back. 

Mr. LOBIONDO. Thank you, Mr. Larsen. 

Our witness today is Coast Guard Vice Admiral John Currier, 

deputy commandant for mission support. 

Admiral, you are recognized for a statement. 

TESTIMONY OF JOHN CURRIER, DEPUTY COMMANDANT FOR 

MISSION SUPPORT, UNITED STATES COAST GUARD 

Admiral CURRIER. Thank you, Chairman LoBiondo, Ranking 

Member Larsen. Good morning, and thank you for the opportunity 

to provide an update on the Coast Guard’s ongoing recapitalization 

program. I have submitted a written statement for the record, sir. 

5 

On behalf of the commandant and the men and women of the 

Coast Guard, thank you for your strong support of our Service. 

Your oversight and advocacy have been essential to the Coast 

Guard’s many successes. 

We in the Coast Guard as well as you in the subcommittee are 

well aware that the Nation is facing a challenging fiscal environment. The Coast Guard understands the pressures faced by our 

Nation. And I can assure you that we are committed to maintaining a disciplined and effective acquisition process, and to best allocate our resources to address our most urgent operational risks. We 

are making responsible investments to build capabilities that this 

Nation needs now and will for the next half-century. 

We are mindful of the subcommittee’s concerns regarding affordability. We have worked very hard to optimize the balance between 

investment and recapitalization and current operations within our 

top line. We have done this in a way that preserves the Coast 

Guard’s viability well into the future, while still responding to today’s essential mission demands. Our fiscal year 2013 to 2017 capital investment plan shows that at our projected outyear funding 

levels, we can achieve our recapitalization goals. We may not be 

able to reach these as fast as we all would like, particularly with 

respect to the baselines developed in the expanding budget environments of the past, however we can continue to make intelligent 

trade-offs to address our most urgent risks. 

We are in the process now of updating our plans to reflect the 

constraints of the current fiscal environment, and we are committed to working with this subcommittee to successfully replace 

our aging assets. We know this is the right course, because the 

operational need for our acquisition assets has been validated several times over, notably by our fleet mix analyses one and two, and 

by the DHS cutter study. 

In the past, the Coast Guard briefed the subcommittee regarding 

our acquisitions. In some cases, not always great stories. Today, I 

am very proud of the achievement of the Coast Guard acquisition 

directorate, and the mission support infrastructure that is behind 

it. I appreciate how effective your oversight in our collective efforts 

have paid dividends. Today we are delivering capable assets that 

are serving the Nation, prosecuting missions, and saving lives 

along our shores this day and every day. Given this transformation, 

we are able to migrate—or mitigate our highest operational risks 

while we remain—which remain in our offshore regions. 

Our major cutter fleet is obsolete and increasingly less effective. 

For example, our 43-year-old High Endurance Cutters are achieving 70 percent of their programmed days away from home port, 

and sailing 50 percent of the time with mission-degrading casualties. This places our crews in an unacceptable position. It jeopardizes our ability to refuse threats, protect mariners, secure our borders, and be ready to mount capable response to any contingency. 

We need to replace these assets now. We have the ability today to 

do just that. 

We are delivering assets on schedule at a well-negotiated price, 

introducing tremendous capability to our fleet. We are reaping the 

benefits of efficient shipyard processes, experienced shipbuilders, 

and stable production. Last year, the production contract for the 

6 

fifth NSC was awarded at a price that was virtually the same as 

that of the fourth. Recently we awarded the contract for long leadtime materials for the sixth NSC, and that was awarded at a lower 

price than the long lead material for number five. 

The first Fast Response Cutter was delivered, commissioned, and 

certified ready for sea. We look forward, sir, to showing this cutter 

off to anyone who is interested, certainly the subcommittee members, while it is here in DC, on the waterfront. 

These are the same processes that allowed us to react quickly 

when a problem was discovered aboard Stratton that you mentioned. We were able to rapidly identify the issue, and verify that 

our other cutters, the first two, are not impacted. I want to be crystal clear that this is not a classwide issue. Most importantly, the 

close work amongst our acquisition contractor, maintenance, and 

shipyard personnel ensured that the problem will be permanently 

fixed, and she will put to sea ready to perform all missions in short 

order. 

These assets are serving the public in a manner that we planned 

and expected. Even in the face of new threats that were not anticipated during the conception of the deepwater program, our current 

acquisitions are able to meet those threats. 

A recent operational case highlights the effective mix of our assets. Last March, a Medium Endurance Cutter, a 110-foot patrol 

boat, and a new HC–144 aircraft spotted a self-propelled, semi-submersible drug boat in the Caribbean Basin. The aircraft used its 

onboard sensors to pinpoint the vessel, while both cutters were able 

to effectively launch small boats and arrive on scene, preventing 

tons of cocaine from crossing the southwest border of the United 

States and reaching our streets. This case involved a new asset 

with improved sensors, a Medium Endurance Cutter that had undergone a successful MEP, and a legacy asset soon to be replaced 

by a Fast Response Cutter, but all still operating because of the 

highly effective maintenance programs that we have in place. 

This type of success story the Coast Guard hopes to keep telling, 

but would not be possible while at the persistent offshore presence 

in the areas where threats exist. And that is supported by shoreside activities that have been modernized. This is why we must 

continue to build new assets such as the sixth National Security 

Cutter as quickly as possible. 

Now is the time to deliver these assets cost effectively, and to ensure the Coast Guard is capable of interdicting offshore threats for 

the next half-century. The Service’s future depends on our ability 

to recapitalize an aging fleet. We do not have the discretion to stop 

and wait for a more favorable budget environment, if we are to remain semper paratus. 

Thank you again for the opportunity to testify today, sir. Thank 

you for your steadfast support. I look forward to answering your 

questions. 

Mr. LOBIONDO. Thank you, Admiral Currier. On the Stratton, I 

think we have been your biggest cheerleaders for the newer assets 

and demonstrating the need and the efficiencies to be realized. But 

we still don’t have an answer on the 123s. I know it is a sore subject, but at some point in time there has to be an answer for the 

taxpayers about how these things get screwed up. 

7 

So, Stratton is going into drydock when, in June? 

Admiral CURRIER. Late May, June, yes. Yes, sir. 

Mr. LOBIONDO. Late May, June? 

Admiral CURRIER. Mm-hmm. 

Mr. LOBIONDO. And I guess right now it just means it is tied up 

somewhere, right? It can’t be doing anything, right? 

Admiral CURRIER. Well, it has moved to its home port, and it is 

able to get underway with operational restrictions. But the repairs 

have been made. 

If I could, sir, I would like to run through this, just to put it into 

context. 

Mr. LOBIONDO. Go ahead. 

Admiral CURRIER. About a month ago we started to see—we got 

a report from the crew that there was a limited amount of seawater in void spaces on Stratton, which really surprised everyone. 

So we did an underwater hull survey, and we found in the aft section of the ship areas of concentrated corrosion that actually had 

penetrated the hull with small cracks and some pitting. This was 

confounding to us. We did a comprehensive underwater inspection 

of the hull. We found what looked like corrosion. 

We have started a comprehensive engineering analysis. And I am 

not prepared to give answers on causal factors at this point. But 

I can tell you what I know, and I really feel I need to do that. 

First of all, this is not a classwide issue. We inspected in detail 

the other two National Security Cutters and found no evidence of 

corrosion like this. 

Second of all—— 

Mr. LOBIONDO. Excuse me. 

Admiral CURRIER. Yes, sir. 

Mr. LOBIONDO. Evidence of corrosion at all, or—— 

Admiral CURRIER. Yes, sir. 

Mr. LOBIONDO. OK. 

Admiral CURRIER. Nothing that would not be expected of a 

ship—— 

Mr. LOBIONDO. OK, nothing that would not be considered normal. 

Admiral CURRIER. That is absolutely correct. 

Mr. LOBIONDO. OK, OK. 

Admiral CURRIER. We are going back with this engineering analysis on Stratton now because we are extremely interested in causal 

factors on this. There is a spectrum of possibilities on how this 

could be caused. 

On the one end—and this is speculation on my part, but somewhat informed speculation from years of maintenance and engineering experience—on the one end, it could be a quality of steel 

issue, but we don’t have indications to that. 

On the other end, there was some local repairs done on this ship 

through a welding process after there was a bump of the pier. So 

there was a localized repair done to Stratton before it was commissioned by the First Lady. This damage is consistent with what we 

have seen before in ships when the welding procedure is not performed properly. If it is an electric weld and the welding is not 

grounded properly, you can see degradation in welds and cracks 

open in steel structure on ships. 

8 

I am not suggesting at this point that is the cause. What I am 

suggesting is this is—what I am saying, categorically, is this is not 

a classwide issue. We don’t have strong indications that this was 

a quality issue in the build of the ship. But we won’t have a clear 

answer on the forensics for about another 6 weeks. In the meantime, the ship will go into drydock, will be fully repaired, and put 

back into service as quickly as we can, likely within 30 to 45 days. 

That is what we know today on Stratton. This is, in my opinion, sir, not reflective on either the acquisition 

process or the quality of the shipyard in building the ship. 

Mr. LOBIONDO. So, it is way too early to tell whether the rust 

protection system, the cathodic protection system was—there is 

something flawed there? I guess we just have to wait to find out? 

Admiral CURRIER. We looked at the cathodic protection system 

on this ship. There was a quality issue in a wiring—in one of the 

wiring bundles. But that was, in the opinion of our engineers, not 

sufficient to contribute materially to this problem. It was a quality 

issue that was corrected. We looked at the cathodic protection systems on the first two National Security Cutters and saw no discrepancies whatsoever. 

Mr. LOBIONDO. So I guess whether this is coming under the 

ship’s warranty is something that is just going to have to wait? 

Admiral CURRIER. Yes, sir. I am not prepared to discuss warranty issues at this point, because we don’t have a solid causal factor. 

Mr. LOBIONDO. OK. Let’s move on to the shortage of the spare 

parts for the Maritime Patrol Aircraft. The Coast Guard informed 

the subcommittee this month that, due to budget constraints, there 

are not a sufficient number of spare parts for the fleet to support 

full operational readiness when it initiates operations in Cape Cod 

this fall. 

We have any idea of what it is going to take to correct this, how 

much money it is going to cost to acquire the needed spare parts? 

Admiral CURRIER. First of all, sir, I am not sure I agree with 

that characterization that your staff was provided. I have gone 

back through both the operations directorate and the support directorates in the Coast Guard. We had a meeting to discuss this. I am 

an aviator, so I take this very close to heart. 

First of all, this is a longstanding systems acquisition. It is 

stretched out over years. It is certainly not the way we would want 

to do it. But we are buying two—one, two, three, sometimes—airframes a year. Along with that, we are buying, to a model, sparing 

for these aircraft. We are also buying mission pallets, as you are 

aware of. So there are three main pieces in the acquisition. 

As we progress these airframes, we are incrementally buying 

spares. The characterization that we are going to limit flight hours 

or stand up Cape Cod with inadequate spares is not today true. 

That is not true. In fiscal year 2012 we plan to buy 2 airframes, 

16 and 17. We plan to buy five mission pallets. These will be the 

first mission pallets that are bought by the Coast Guard, not under 

the aegis of ICGS. And spares in the fiscal year 2012 funding profile. 

When we definitize the cost of the mission pallets, we will know 

how much money we have left for spares. That decision needs to 

9 

be made. But we will stand up Cape Cod late this year and early 

the year after. They will be adequately spared to fly 1,200 flight 

hours. There are no current plans to reduce flight hours or to slow 

down the deployment of these aircraft. 

Mr. LOBIONDO. Do you anticipate the shortage in funds that we 

are experiencing in some of these issues to affect the scheduled acquisitions for 2013? 

Admiral CURRIER. 2013, our current plan—and it is a solid 

plan—is to buy airframe number 18 with the funds that are available. I would say that, in an ideal situation—we are in a fiscal environment where tough choices are required, and we are making 

those tough choices. What we will do is buy airframe 18, and with 

fiscal year 2012 money ensure that we have spares adequate to run 

those aircraft out to 1,200 flight hours. That is the way it looks 

today, sir. And if this changes, I will get back through my staff to 

your committee staff. But at the current time we have no plans to 

reduce flight hours. 

Mr. LOBIONDO. Well, that is really good news, Admiral, because 

somehow there was a miscommunication or misunderstanding. 

After the hearing, we will make an attempt to find out where the 

gap in information was. And I am absolutely thrilled with your assessment that operational readiness is not affected, and whatever 

is happening is relatively minor compared to what we thought that 

it would be. 

So, I am going to hold for now and go to Mr. Larsen. 

Mr. LARSEN. Admiral Currier, I noted a story this morning that 

the—it is possible that the House Appropriations Defense Subcommittee will ask the Air Force to continue the purchase of C– 

27s. However, there has been some discussion about the Coast 

Guard’s interest in acquiring the C–27. Has the Coast Guard completed its business case analysis for that proposal? 

Mr. LOBIONDO. Yes, sir, we have. We have instituted or conducted a business case analysis, and I received a pre-brief on it the 

other day. We are waiting to brief the commandant, who, as you 

probably know, has recently had a health issue. 

Mr. LARSEN. Right. 

Admiral CURRIER. So we are a little bit behind in catching him 

up. But it is teed up for him to be briefed. I can tell you that my 

interpretation of it is that if we were—if these planes were made 

available to us—and I want to be clear they have not as yet been 

made available—— 

Mr. LARSEN. Right. 

Admiral CURRIER [continuing]. But were they to be made available, we feel there is significant capitalization cost avoidance likely 

available to us, were we to get 21 of these airframes from DOD at 

no cost. 

Now, there will be—we will have to come back to Congress and 

this subcommittee if that is made available to us and talk about 

upfront funds that might be required to integrate those aircraft. 

Because, rather than the C–144 program, which would be stretched 

out over many years—— 

Mr. LARSEN. Right. 

Admiral CURRIER [continuing]. We conceivably could receive 21 

airframes in very short order. 

10 

Mr. LARSEN. Right. 

Admiral CURRIER. So that would require an adjustment on our 

OE money and potential AC&I money. 

This plane, interestingly enough, was actually looked at as a candidate for our MRS asset, the HC–144. But at that time the 144 

was chosen. It was chosen by ICGS. We think if the planes are 

made available, that there is a likely potential that we would be 

able to achieve significant cost avoidance by bringing them on 

board. 

Mr. LARSEN. Thank you. So the current baseline $24.2 billion for 

the former deepwater program was adopted in 2007. And since assuming full control as the lead system integrator, the Coast Guard 

has made progress in approving APBs for each acquisition project 

on an asset-by-asset basis. Yet the GAO reports that the overall 

baseline is now estimated to be $29 billion. What factors have contributed to this increased—16 percent estimated cost increase in 

just 5 years? 

Admiral CURRIER. Sir, I think—I need to take you back just a 

second and talk about deepwater. With ICGS, we had a system of 

systems. They made some projections on total program cost that 

were very immature and very early in the program. As this program was stretched out, the fidelity of our cost estimates have increased. 

We disaggregated deepwater, as you know. We broke it down 

into component acquisition buys. So to compare the original cost 

figure and estimate to today’s potential cost estimate for the aggregate program is almost an apples-to-oranges comparison. 

The truth of the matter is, with an organization as asset-intense 

as the Coast Guard, we are never going to get out of the acquisition 

business. So to try to put a deadline on the end of our major systems acquisition probably is unrealistic. 

Our aircraft—our helicopters, in particular, which are a major 

component of the Coast Guard—will come to service life end in the 

2025 to 2027 range. So we can’t really say we are going to stop systems acquisition there. This is an ongoing process. 

I can provide to you specifics on cost estimates for the 

disaggregated component pieces. But I really don’t think there is 

great utility, or can I produce a figure with great fidelity for what 

used to be deepwater but now is the way we are buying these systems. 

Mr. LARSEN. So last year the GAO emphasized that the Coast 

Guard’s 17 major acquisition programs, though, continued to experience challenges and in program execution, schedule, and resources. Further, the GAO said that the Coast Guard’s own estimates contained in its capital investment plan recommends funding levels through the fiscal year 2016 that are unrealistic—that is 

GAO’s words—given the historical pattern of appropriations for the 

AC&I. 

Has the Coast Guard done anything to adjust cost estimates contained in the CIP to reflect the present fiscal climate in DC? 

Admiral CURRIER. Yes, sir. We are mindful of resources available 

and, as I said in the opening statement, the pressures that the 

country and Congress are under. We take every opportunity to control costs. I would cite the OPC, the upcoming OPC, as an example. 

11 

We have taken a year where Admiral Salerno, the DC of—deputy 

commandant for operations and myself have had our staffs in a 

room, scrubbing the requirements to get to thresholds that are the 

least expensive that will do the mission. 

We have entered in, as we have released specifications to industry—preliminarily, draft specifications—we have been in a robust 

dialogue with industry specifically to find out how we can accomplish our operational requirements at a reduced cost. We are—cost 

is a true variable in the OPC. We have tried to reflect that back 

through others. 

For instance, NSC 4, National Security Cutter four, between four 

and five there was virtually no price difference in the construction 

contracts. That is a success story. We just contracted long lead material for number five at less money than we contracted long lead 

material for four. So this is kind of emblematic of what we are able 

to do with these acquisition processes if we receive stable funding. 

So hopefully that answers your question, sir. 

Mr. LARSEN. Well, it doesn’t, but introduces the OPC into the 

discussion further. What is the lineup on the calendar of the OPC’s 

operational—initial operating capability, or as the DOD term— 

whatever term Coast Guard uses—— 

Admiral CURRIER. Right. 

Mr. LARSEN [continuing]. What is that timeline versus the completion of your MEPs and the potential additional MEPs on the 

210s and the 270s? 

Admiral CURRIER. OK, sir. The 210s have completed the MEP 

process. They are 40-year-old ships, but they have—and the MEP, 

as you know, is not a SLEP, it is not a service life extension. It 

is a—basically a treatment of the hull, mechanical engineering at 

the highest readiness degraders. The 210s have been completed. 

fiscal year 2013 we have requested funds to complete the last two 

270s, 270-foot cutters. That puts us in a fairly good position for 

them to have about 7 to 10—maybe more—years’ service life. 

Now, that doesn’t mean that these are pushed out and forgotten 

about. The modernized maintenance practices that we are doing, 

the computerized maintenance, the preventative maintenance, we 

are going to watch these ships carefully. But I don’t at this time, 

nor does the commandant, anticipate that we are going to have a 

service life extension or an additional MEP program in the MEC 

fleet. We deliver the first—notionally, we deliver the first OPC in 

the 2020 timeframe, and then we will deliver one per year, and it 

will hopefully pick up to a two-per-year delivery construction. 

We feel that we can get our MEP fleet into that timeframe, as 

long as we don’t have further delays in the OPC, and only treat on 

a case-by-case basis the maintenance that the ships need. So we 

don’t anticipate another major mid-life program for these ships. We 

think that we can get them to the point where they will be replaced 

by the OPC. And as we are doing with the HECs, there will be reduced spending on these ships near the end of their service life, but 

we will keep them in service. 

Mr. LARSEN. So who in the Coast Guard, then, over the next several years is responsible for tracking the success of the MEP on the 

210s and 270s, to ensure that they live that long? 

12 

Admiral CURRIER. The 270 MEP was funded and managed by our 

acquisition directorate. But now the ships are in service they come 

under our engineering directorate. They have modernized practices. 

Quite frankly, many of them were based on our successful aviation 

maintenance programs that now applied to the ships. CG4 it is 

called, our engineering directorate, will have direct authority and 

responsibility for overseeing the material condition and operational 

availability on those ships. 

Mr. LARSEN. Of all of them? 

Admiral CURRIER. Yes, sir. 

Mr. LARSEN. So it won’t be ship by ship, it will—they are responsible for all of them? 

Admiral CURRIER. Well, they have—they are responsible for all 

of them, but they view it on a ship-by-ship basis. 

Mr. LARSEN. Right, yes, I got it. I understand. 

Admiral CURRIER. They have a product line that does that. 

Mr. LARSEN. Yes. Right, right. Thank you, Mr. Chairman. I yield 

back. 

Mr. LOBIONDO. Admiral Currier, I appreciate your explanations, 

I think we have some information gaps here, but I have to tell you 

that I am still terribly troubled by how these decisions are being 

made, and the priorities. And I can’t help but come back to some 

things that the Coast Guard is making decisions on. And this may 

be a sore subject, but there is going to be about $25 million that 

it is going to cost to move to St. Elizabeths. The promise that the 

Coast Guard would not be moving out there alone appears to be 

forgotten. 

I don’t know how we look Coast Guard men and women in the 

eye with housing problems and some of these other things, and we 

apparently have not done everything we can, or we don’t have all 

the answers. The administration proposed budget cuts here and 

what they mean to the Coast Guard overall, which is not your 

fault, and I understand that you somehow have to carry the water, 

toe the line, whatever we are going to see. But I just want to let 

you know to pass to headquarters that I am so concerned about 

this and that I intend on having a conversation with Peter King. 

Since the Department of Homeland Security does not appear to 

be concerned with this subcommittee because of our lack of jurisdiction over certain of their aspects, and they have sort of made 

that clear to us, I am going to have a conversation with Peter King 

and we will pass on to you, if I can convince Peter to take up this 

gauntlet. Because I just have a serious concern about what this 

means for our overall posture of the Coast Guard in the future. So 

just sort of an idea of where my head is on this, because I think 

we have got big problems here that aren’t being answered. 

I have a couple more questions. When can we expect to receive 

the Coast Guard report on the condition of Coast Guard housing? 

Admiral CURRIER. OK, sir. That—first of all, we commissioned a 

national housing survey. We have three types of housing. And if 

you—by your leave, sir, I would like to give you a little bit of an 

explanation of where we are. 

We have leased housing, we have public-private venture housing 

that is handled in conjunction with DOD, we have Coast Guardowned housing. Quite frankly, we didn’t have—we had a regime 

13 

where it was managed locally by the districts. Under modernization 

we have pulled it under central control. But what we found is we 

didn’t have a good service-level view of either what we had, what 

our footprint was, or what our true requirements were. So we initiated this national housing survey that you are referring to. 

The national housing survey, I just received a brief on it, the 

commandant will be receiving a brief very shortly. After he sees it, 

I think we will—we should be able to make it available to your 

staff. What this does is it surveys all of our housing, all types we 

have. It cites the requirements, looks at where we need more, 

where we need enhanced because of material condition, where we 

need to divest, and it brings it all home to our central adjudications, so we can take these precious dollars that we have and best 

apply them to the benefit of our people. 

I guarantee you, sir, nobody is more impassioned with getting 

housing right than I am, or the commandant of the Coast Guard 

is. We are—we spent $20 million last year and it zeroed out in 

2013. We are bringing in the national housing survey, and we plan 

on focusing on housing in the next several fiscal years. 

Mr. LOBIONDO. OK. Admiral, I just want to come back to this 

spare shortage that we are talking about that is—apparently some 

kind of miscommunication. Conferring with staff, they are quite 

certain of what they were told about this. 

Admiral CURRIER. OK. 

Mr. LOBIONDO. So I will need from you in some rapid response 

fashion whether you are disagreeing with what they have apparently conveyed to our subcommittee staff. Because this really goes 

right at the heart of operational readiness and some other things 

that we are going to need to get settled as soon as possible. If I 

could have your assurance that you will work with us on that—— 

Admiral CURRIER. Absolutely, sir. The last thing I want is misinformation here. 

Mr. LOBIONDO. OK. 

Admiral CURRIER. And I will back through my staff to ensure you 

get an accurate read on this thing. 

Mr. LOBIONDO. OK. Anything else, Rick? 

Mr. LARSEN. Yes. 

Mr. LOBIONDO. Mr. Larsen? 

Mr. LARSEN. Admiral, the fiscal year 2013 budget includes $8 

million to start a survey and design process for acquiring a new 

Polar icebreaker. And I understand that that acquisition program 

certainly extends beyond the 5-year capital investment plan. First 

off, is that correct, that it extends past the 5-year acquisition plan? 

Admiral CURRIER. The—I’m sorry? 

Mr. LARSEN. The whole program, the acquisition program? 

Admiral CURRIER. Oh, yes, sir. 

Mr. LARSEN. Is it? 

Admiral CURRIER. Yes, sir. 

Mr. LARSEN. OK, good. Yes, right. 

Admiral CURRIER. Yes. 

Mr. LARSEN. So, when does the Coast Guard intend to complete 

the development of the mission requirements for this particular 

new vessel? 

14 

Admiral CURRIER. Sir, we have $8 million for survey and design. 

Basically, that will include the definition of requirements. We feel 

that—this is a national asset. We have a set of requirements. Obviously, NSF likely has a set of requirements. And there are other 

interagency governmental entities that have an interest in this, 

as—particularly as the Arctic opens up. 

So, we will start our definition of requirements. But I think I 

need to be clear that this is a major acquisition. This is not a minor 

ship acquisition. We really need to get this right. And we talk all 

the time about our modernized acquisition process. We need to take 

a disciplined approach to this. 

The $8 million is sufficient for us to come out of the chocks and 

start defining requirements and looking at designs. And we are 

talking with the Canadians, we are doing all the proper things. But 

this ship is likely an 8- to 10-year project. The first thing we need 

to do is establish a mission need and establish requirements. Unless we do that, we fall prey to all the bad things that happen in 

an acquisition process downstream. 

So, the long answer—I apologize—to a short question, but that 

$8 million was sufficient for us to start with a mission need, to survey the interagency for requirements, and then start to put together a clear requirements document for this ship. 

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

Mr. LOBIONDO. OK. Admiral Currier, I would like to thank you 

very much. We will obviously have some ongoing dialogue about 

where we go with all this. 

And the committee stands adjourned. 

[Whereupon, at 10:45 a.m., the subcommittee was adjourned.] 

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