COAST GUARD 

Legacy Vessels’ 

Declining Conditions 

Reinforce Need for 

More Realistic 

Operational Targets 

Report to Congressional Requesters

July 2012 

GAO-12-741 

United States Government Accountability Office

GAO 

On August 30, 2012, this report was revised to correct a 

number in the last sentence of the first paragraph on 

page 32.
United States Government Accountability Office

Highlights of GAO-12- , a report to 

congressional requesters 

741

July 2012 

COAST GUARD 

Legacy Vessels’ Declining Conditions Reinforce Need 

for More Realistic Operational Targets 

Why GAO Did This Study

The Coast Guard’s legacy vessels are 

either approaching or have exceeded 

their designed life expectancies. The 

Coast Guard is replacing these vessels 

with a more capable fleet; however, cost 

and management problems have led to 

delays in the delivery of new vessels. 

GAO was asked to study the conditions 

of the legacy fleet. This report addresses: 

(1) how the physical condition of the 

Coast Guard’s legacy vessels changed 

from fiscal years 2005 through 2011, and 

key actions the Coast Guard has taken 

related to the physical condition of its 

legacy fleet; (2) key annual maintenance 

expenditure trends for the legacy vessel

fleet, and the extent the Coast Guard’s 

cost-estimating process has followed 

established best practices; and (3) the

operational capacity of the legacy vessel

fleet and the extent the Coast Guard 

faces challenges in sustaining the legacy 

vessel fleet and meeting mission

requirements. GAO analyzed Coast 

Guard data from fiscal years 2005 

through 2011 on legacy vessels’

condition, cost, and operational 

performance. GAO visited five locations 

where vessels were based or undergoing 

maintenance. The results of these visits 

are not generalizable, but provided 

insights. 

What GAO Recommends

GAO recommends that the Department 

of Homeland Security (DHS) direct the 

Coast Guard to ensure its cost estimates 

conform to best practices and adjust 

legacy vessel fleet operational hour 

targets to levels that reflect actual 

capacity. DHS concurred with the first 

recommendation but did not concur with 

the second stating that reducing the 

operational hour targets would fail to fully 

utilize those assets not impacted by 

maintenance issues. GAO believes the 

recommendation remains valid as 

discussed in this report.

What GAO Found

From fiscal years 2005 through 2011, the physical condition of the Coast Guard’s 

legacy vessels was generally poor; and the Coast Guard has taken two key 

actions to improve the vessels’ condition: reorganizing its maintenance command 

structure and implementing sustainment initiatives for portions of its legacy 

vessel fleet. The Coast Guard’s primary measure of a vessel’s condition is the 

operational percent of time free of major casualties (a major casualty is a 

deficiency in mission essential equipment that causes the major degradation or 

loss of a primary mission). This measure shows that the 378-foot high endurance 

cutters (HEC), the 210-foot and 270-foot medium endurance cutters (MEC), and 

110-foot patrol boats generally remained well below target levels from fiscal 

years 2005 through 2011. To improve the condition of the vessel fleet, in 2009, 

the Coast Guard reorganized its maintenance command structure to focus on 

standardization of practices, and reported it was on schedule to complete 

sustainment initiatives by fiscal year 2014, which are intended to improve vessel 

operating and cost performance.

Annual maintenance expenditures for the legacy vessel fleet—such as those 

associated with scheduled maintenance costs—declined from fiscal years 2005

to 2007 and then rose from fiscal years 2007 to 2011; and the Coast Guard’s

maintenance cost estimating process does not fully reflect best practices.

Scheduled maintenance expenditures rose from $46.1 million to $85.2 million 

from fiscal years 2008 to 2009, an increase Coast Guard officials attributed to 

better identifying maintenance needs and receiving supplemental funding. GAO’s 

Cost Estimating and Assessment Guide states that a high-quality and reliable 

cost estimate includes best practice characteristics, three of which are relevant to 

the Coast Guard’s process: well-documented, comprehensive, and accurate. The 

Coast Guard’s process partially meets these characteristics. For example, it is

partially comprehensive because it defines the program, among other things, but

does not document all cost-influencing ground rules and assumptions (e.g., 

inflation rate). Annual cost estimates for legacy vessel fleet maintenance that 

incorporate established best practices would provide better information to inform 

the Coast Guard’s decisions in effectively allocating available resources in the 

constrained federal budget environment.

The operational capacity of the legacy vessel fleet generally declined from fiscal 

years 2005 through 2011, contributing to operational capacity targets becoming 

increasingly unrealistic. For example, the HECs and 210-foot MECs did not meet 

operational hour targets from fiscal years 2005 through 2011. Coast Guard

officials reported that declining operational capacity hindered mission 

performance. The Coast Guard uses operational hour targets to inform planning 

decisions, such as setting performance targets. Legacy vessel capacity is 

declining and expected to continue to decline; nevertheless, the Coast Guard has 

not revised operational hour targets. Coast Guard officials reported that adjusting 

operational hour targets would lower its mission performance targets; however, 

these targets have gone unmet because of declining legacy vessel capacity. 

Legacy fleet operational hour targets that reflect actual capacity, as evidenced by 

historic performance, could help the Coast Guard more effectively allocate its 

resources and ensure it sets achievable performance targets. 

View GAO-12-741.

 For more information, contact Stephen L. 

Caldwell at (202) 512-8777 or 

caldwells@gao.gov. 
Page i GAO-12-741 Coast Guard Legacy Vessels 

Letter 1 

Background 5

Legacy Vessel Fleet’s Condition Is Poor and Generally Declining 

despite Coast Guard Maintenance Efforts 10

Depot-Level Maintenance Expenditures for the Legacy Vessel Fleet 

Have Recently Increased, and the Coast Guard’s Process for 

Estimating Related Costs Does Not Fully Reflect Best Practices 19

Declining Condition of the Legacy Vessel Fleet Makes Operational 

Capacity Targets Increasingly Unachievable 29

Conclusions 43

Recommendations for Executive Action 44

Agency Comments and Our Evaluation 45

Appendix I Scope and Methodology 48

Appendix II Comparison of the Capabilities of the Coast Guard’s Legacy 

Vessels with Those of Their Replacements 51

Appendix III Further Information on Condition and Costs of the Coast Guard’s 

Legacy Vessel Fleet 56

Appendix IV Evaluation of the Coast Guard’s Process for Estimating Legacy Vessel 

Maintenance Costs 63

Appendix V Comments from the Department of Homeland Security 66

Appendix VI GAO Contact and Staff Acknowledgments 69

Related GAO Products 70

Contents
Page ii GAO-12-741 Coast Guard Legacy Vessels 

Tables

Table 1: Costs and Implementation Schedule for the MEPs 

Conducted for MECs and PBs, as of May 2012 17

Table 2: GAO Assessment of the Extent to Which the Coast Guard’s 

Annual Legacy Vessel Fleet Maintenance Cost Estimating 

Process Reflects Best Practices 26

Table 3: Comparison of Capabilities between the HEC and Its 

Replacement, the NSC 52

Table 4: Comparison of Capabilities of the 270-foot and 210-foot 

MECs and their Replacement, the OPC 53

Table 5: Comparison of Capabilities of the 110-foot PB and Its 

Replacement, the FRC 55

Table 6: HEC Fleet Top Five Major Mission Degraders and Top 

Cost Drivers and Associated Total Obligation Amounts, 

Fiscal Year 2011 56

Table 7: 210-Foot MEC Fleet Top Five Major Mission Degraders

and Cost Drivers and Associated Total Obligation 

Amounts, Fiscal Year 2011 58

Table 8: 270-Foot MEC Fleet Top Five Major Mission Degraders 

and Cost Drivers and Associated Total Obligation 

Amounts, Fiscal Year 2011 58

Table 9: 110-Foot PB Fleet Top Five Major Mission Degraders, Cost 

Drivers, and Associated Costs, Fiscal Year 2011 61

Table 10: Summary Assessment of the Coast Guard’s Cost 

Estimation Process Compared with Best Practices 64

Figures

Figure 1: Information on the Coast Guard’s Legacy Vessels, as of 

June 2012 6

Figure 2: Vessel Delivery Dates for the Final National Security 

Cutter, Offshore Patrol Cutter, and Fast Response Cutter 

Identified in the 2007 Deepwater and Revised Baselines 9

Figure 3: Condition of the High and Medium Endurance Cutters as 

Measured against the Coast Guard’s OpPOTF Target, 

Fiscal Years 2005 through 2011 11

Figure 4: Condition of the 110-Foot Patrol Boats as Measured 

against the Coast Guard’s OpPOTF Target, Fiscal Years 

2005 through 2011 12

Figure 5: Mission Effectiveness Project Upgrades on Medium 

Endurance Cutters 18
Page iii GAO-12-741 Coast Guard Legacy Vessels 

Figure 6: Scheduled and Unscheduled Depot-Level Maintenance 

Expenditures for the Legacy Vessel Fleet from Fiscal 

Years 2005 through 2011 20

Figure 7: The Coast Guard’s Process for Estimating Annual Legacy 

Vessel Maintenance Costs, by Product Line 25

Figure 8: Summary of the Legacy Vessels’ Operational Hour 

Performance Compared with Targets, Fiscal Years 2005 

through 2011 31

Figure 9: Lost Cutter Days for Legacy High and Medium Endurance 

Cutters, Fiscal Years 2006 through 2011 33

Figure 10: Comparison of the Projected End of Service Lives for 

the MEC Fleet with the Planned OPC Delivery Dates, as of 

May 2012 38

Figure 11: HEC Fleet Scheduled and Unscheduled Depot-Level 

Maintenance Expenditures Compared with Standard 

Support Levels (SSL), Fiscal Years 2005 through 2011 57

Figure 12: 270-Foot MEC Fleet Scheduled and Unscheduled DepotLevel Maintenance Expenditures Compared with 

Standard Support Levels, Fiscal Years 2005 through 2011 59

Figure 13: 210-Foot MEC Fleet Scheduled and Unscheduled 

Deport-Level Maintenance Expenditures Compared with 

Standard Support Levels, Fiscal Years 2005 through 2011 60

Figure 14: 110-Foot PB Fleet Scheduled and Unscheduled Depot 

Level Maintenance Expenditures Compared with 

Standard Support Levels, Fiscal Years 2005 through 2011 62
Page iv GAO-12-741 Coast Guard Legacy Vessels 

Abbreviations

DHS Department of Homeland Security

FRC Fast Response Cutter

HEC High Endurance Cutter

HTHM High Tempo/High Maintenance

MEC Medium Endurance Cutter

MEP Mission Effectiveness Project

NSC National Security Cutter

OMB Office of Management and Budget

OPC Offshore Patrol Cutter

OpPOTF Operational Percent of Time Free from Major Casualties

PB Patrol Boat

SFLC Surface Forces Logistics Center

SSL Standard Support Level

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Page 1 GAO-12-741 Coast Guard Legacy Vessels 

United States Government Accountability Office 

Washington, DC 20548

July 31, 2012

Congressional Requesters

The Coast Guard’s missions include, among others, protecting our 

nation’s ports, waterways, and coastal areas from security threats; 

interdicting illegal drugs and migrants; and conducting search and rescue 

operations. To accomplish these missions, the Coast Guard relies heavily 

on its legacy vessel fleet.1 These legacy vessels are capable of 

conducting operations in the Coast Guard’s deepwater area of 

operations, which may be far from the nation’s shores and in rough sea 

conditions.2

The Coast Guard is in the midst of a long-term recapitalization plan that

could cost more than $29 billion—the largest acquisition program in the 

Coast Guard’s history—to replace legacy vessels and aircraft with a 

However, these legacy vessels are either approaching or 

have exceeded their designated service life expectancies, with many of 

the vessels having entered service in the 1960s and 1970s. The Coast 

Guard reports these legacy vessels have become increasingly costly to 

maintain because of high rates of failure of major parts and systems, and 

the vessels’ degraded condition has negatively affected the Coast 

Guard’s operational capacity to meet mission requirements. For example, 

in the aftermath of the Haiti earthquake in 2010, the Coast Guard 

reported that it deployed 12 legacy vessels to Haiti to assist in 

humanitarian relief operations, and 10 of these vessels suffered severe 

failures of parts or systems, which diminished their availability to deliver 

emergency aid and perform medical evacuations.

 

1

For the purposes of this report, we use the term “legacy vessels” to refer to four legacy 

vessel classes, including the 378-foot high endurance cutters, the 210-foot and 270-foot 

medium endurance cutters, and the 110-foot patrol boats. 

2

The Coast Guard’s deepwater area of responsibility is defined as that area beyond the 

normal operating range of single-crewed shore-based small boats (generally more than 50 

miles from shore), where either extended on scene presence, a long transit or forward 

deployment is required to perform the missions.

 
 

Page 2 GAO-12-741 Coast Guard Legacy Vessels 

modernized and more capable fleet.3

Delays in delivery of the replacement vessels have created uncertainties 

regarding how the Coast Guard will sustain its legacy vessels while 

meeting its operational requirements. In particular, the Coast Guard 

projects that delays in the delivery of the replacement vessels will lead to 

increasingly greater operational capacity shortfalls that it expects to 

persist until the deliveries of the replacement vessels are completed—an 

event the Coast Guard’s most recent schedule projects will not be until 

2034. These operational shortfalls represent a formidable challenge as 

the Coast Guard must effectively balance resources between its 

increasingly expensive vessel recapitalization and the need to invest in 

keeping its legacy vessels operational for longer periods of time than 

originally planned.

However, since beginning the 

program in 1996, the Coast Guard has experienced problems in the areas 

of costs, management, and oversight that have led to considerable delays 

in the delivery of new vessels. For example, according to 2007 

Deepwater Acquisition Program Baseline projections, the Coast Guard 

was to have received four vessels—national security cutters—to replace 

its fleet of 378-foot high endurance cutters by the end of calendar year 

2011, but had received only three by that date. Delays in the delivery of 

the replacement vessels for the 210-foot and 270-foot medium endurance 

cutters—the offshore patrol cutter—are more substantial. For example, 

the planned delivery of the offshore patrol cutter has been delayed by 

13 years.

You expressed an interest in the conditions of, and costs for, maintaining 

the Coast Guard’s fleet of legacy vessels, and the challenges the Coast 

Guard faces in sustaining these vessels longer than planned in an effort 

to maintain operational readiness. In response to your request, this report 

evaluates those issues and, in particular, addresses the following three 

questions:

 

3

The Coast Guard’s asset recapitalization plan includes projects to build or modernize five 

classes each of vessels and aircraft, and procurement of other capabilities, such as 

improved command, control, communications, computers, intelligence, surveillance, and 

reconnaissance. This report focuses only on the legacy vessel fleet. For more information 

on the recapitalization effort as a whole, see GAO, Coast Guard: Action Needed As 

Approved Deepwater Program Remains Unachievable; GAO-11-743 (Washington, D.C.: 

July 28, 2011).
 

Page 3 GAO-12-741 Coast Guard Legacy Vessels 

• How has the physical condition of the Coast Guard’s fleet of legacy 

vessels changed from fiscal years 2005 through 2011, and what key 

actions has the Coast Guard taken related to the physical condition of 

its legacy fleet?

• What have been the key annual maintenance expenditure trends for 

the Coast Guard’s fleet of legacy vessels, and to what extent does the 

Coast Guard’s cost-estimating process follow established best 

practices?

• What is the operational capacity of the Coast Guard’s fleet of legacy 

vessels and to what extent does the Coast Guard face challenges in 

sustaining the legacy vessels and meeting mission requirements 

given delays in deploying replacement vessels?

To address the first question, we analyzed data the Coast Guard reported 

it used to determine and track the condition of its legacy fleet of vessels 

for fiscal years 2005 through 2011. The Coast Guard reported that 

Operational Percent of Time Free from Major Casualties (OpPOTF) was 

its primary measure for tracking, capturing, and communicating the 

condition of the legacy vessel fleet from fiscal years 2005 through 2011.

We compared vessel OpPOTF against established Coast Guard 

standards. We assessed the reliability of these data by reviewing the 

Coast Guard’s data management practices and questioning 

knowledgeable officials about the data and the systems that produced the 

data. On the basis of our assessments, we determined the data to be 

sufficiently reliable for the purposes of this report. We also interviewed 

relevant Coast Guard headquarters officials to obtain information on the 

physical condition of the legacy vessels and actions Coast Guard officials 

reported as key to improving the physical condition of the legacy vessel 

fleet. We also conducted site visits to five Coast Guard field locations 

where Coast Guard officials reported the legacy vessels were either 

homeported or undergoing maintenance, and therefore available for us to 

observe the condition of the legacy vessels and to interview cognizant 

maintenance officials, operational commanders, and crew members. 

Specifically, we visited the following Coast Guard locations: the Pacific 

Area Command in Alameda, California; the Atlantic Area Command in 

Portsmouth, Virginia; the Coast Guard Yard in Baltimore, Maryland; 

district and sector offices in Miami, Florida; and the Coast Guard’s district 

office and Naval Engineering Support Unit in Seattle, Washington. The 

results of these visits are not generalizable, but provided insights on key 

maintenance and operational issues.

To address the second question, we obtained Coast Guard data on the 

total annual depot-level legacy vessel maintenance expenditures, 
 

Page 4 GAO-12-741 Coast Guard Legacy Vessels 

including scheduled versus unscheduled expenditures, for maintaining 

the 378-foot high endurance cutters, the 210-foot and 270-foot medium 

endurance cutters, and the 110-foot patrol boats for fiscal years 2005 

through 2011. Senior Coast Guard officials in charge of legacy vessel 

maintenance confirmed that analyzing these data would be the best way 

to understand key maintenance expenditure trends. We also analyzed 

Coast Guard data on budgeted annual maintenance funds for these four 

vessel classes for the same period of time to identify cost trends and to 

determine how expendutures for the respective legacy vessel classes 

compared with planned costs. We interviewed cognizant officials to obtain 

their perspectives on data trends. We assessed the reliability of these 

data by reviewing the Coast Guard’s data management practices and 

interviewing knowledgeable officials about the data and the systems that 

produced the data. On the basis of our assessments, we determined the 

data to be sufficiently reliable for the purposes of this report. We 

compared the documentation that the Coast Guard uses to compute its 

annual legacy vessel maintenance cost estimates against criteria outlined 

in GAO’s Cost Estimating and Assessment Guide: Best Practices for 

Developing and Managing Capital Program Costs to determine the extent 

to which the Coast Guard’s process adhered to best practices.4

To address the third question, we analyzed Coast Guard vessel data and 

measures that the Coast Guard reported were key indicators of the 

relationship between vessel maintenance condition and operational 

performance—operational hours and lost cutter days—for fiscal years 

2005 through 2011. We compared operational hour data with Coast 

Guard targets for each legacy vessel class across each year. We 

assessed the reliability of these data by reviewing the Coast Guard’s data 

management practices and interviewing knowledgeable officials about the 

data and the systems that produced the data. On the basis of our

assessments, we determined the data to be sufficiently reliable for the 

purposes of this report. We also reviewed Coast Guard recapitalization 

and sustainment plans, and obtained evidence from Coast Guard officials 

that outlined challenges the Coast Guard faces in sustaining its legacy 

vessels and meeting mission requirements given delays in deploying the 

replacement vessels. We evaluated the Coast Guard’s actions against 

guidance in the Program Assessment Rating Tool Guidance Number

 

4

GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: Mar. 2, 2009).
 

Page 5 GAO-12-741 Coast Guard Legacy Vessels 

2007-2 from the Office of Management and Budget (OMB).5

We conducted this performance audit from September 2011 through July 

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.

Appendix I 

provides further details on our scope and methodology.

The Coast Guard, within the Department of Homeland Security (DHS), is 

the principal federal agency responsible for maritime safety, security, and 

environmental stewardship. According to the Coast Guard, its legacy 

vessel fleet is essential for meeting its homeland security missions—as 

well as sustaining other mission areas, such as search and rescue, law 

enforcement, and environmental protection—some of which are 

conducted more than 50 miles off the shore of the United States.

The Coast Guard’s legacy vessel fleet, as of June 2012, included a total 

of 77 vessels of various sizes and capabilities, including the 378-foot high 

endurance cutters (HEC), 270-foot and 210-foot medium endurance 

cutters (MEC), and 110-foot patrol boats (PB).6

 

5

Office of Management and Budget, Program Assessment Rating Tool Guidance Number 

2007-2, (Washington, D.C.: January 29, 2007).

These vessels are critical 

for Coast Guard missions, such as defense operations; search and 

rescue; enforcing fishing laws; securing ports, waterways, and coastal 

areas; and interdicting illegal drugs and migrants. While the HECs spend 

up to 30 days at sea without reprovisioning and the MECs spend up to 21 

days at sea without reprovisioning during these missions, the smaller PBs 

may be on-scene for a maximum of 5 days. Figure 1 provides more 

details on the four legacy vessel classes.

6

As of July 2012, the Coast Guard’s entire vessel fleet includes 245 vessels.

Background

The Coast Guard’s Legacy 

Vessel Fleet
 

Page 6 GAO-12-741 Coast Guard Legacy Vessels 

Figure 1: Information on the Coast Guard’s Legacy Vessels, as of June 2012

a

The Coast Guard operated a fleet of 12 HEC’s from 1972 until 2012.The Coast Guard 

decommissioned 3 of the 12 vessels during fiscal years 2011 and 2012. 

b

According to the Coast Guard, HECs can achieve a 14,000 nautical mile range only if they ballast 

their fuel tanks once the tanks are depleted, a procedure that is rarely undertaken. HECs have a 

range of 9,600 nautical miles under normal circumstances. 

c

The Coast Guard refurbished the fleet of 12 HECs through a service life extension program—known 

as the Fleet Renovation and Modernization Program—from 1987 to1992. According to Coast Guard 

documentation, the expected service life extension was 20 to 25 years. The Coast Guard performed a 

life service extension program on the 210-foot MECs through a program known as the Major 

Maintenance Availability between 1987 and 1998, for an expected service life extension of 15 years. 
 

Page 7 GAO-12-741 Coast Guard Legacy Vessels 

d

The 110-foot PB fleet originally included 49 vessels. The Coast Guard converted 8 of the 110-foot 

PBs to 123-foot PBs, but discontinued further conversions in 2005 and decommissioned the 123-foot 

PBs in 2007 because they were experiencing technical difficulties, such as hull buckling, and were 

not able to meet post-September 11, 2001 mission requirements. 

Most of the Coast Guard’s legacy vessels are nearing or past the end of 

their estimated service lives, as shown in figure 1, and as part of the 

largest acquisition in the Coast Guard’s history, the Coast Guard is in the 

process of acquiring new vessels to replace the four classes of legacy 

vessels. The Coast Guard’s new vessel fleet is to include national

security cutters (NSC), offshore patrol cutters (OPC), and fast response 

cutters (FRC), as follows:

• NSC: The NSC is to replace the HECs. The NSC is the flagship of the 

Coast Guard’s fleet, with an extended on-scene presence, and a 

capability for long transits and forward deployment. The vessel and its 

supporting aircraft and small boats are to operate worldwide. To date, 

the Coast Guard has commissioned three NSCs and is planning to 

receive three more by fiscal year 2017.

• OPC: The OPC is to replace the 270-foot and 210-foot MECs. The 

OPC is intended to conduct patrols for homeland security, law 

enforcement, and search and rescue missions. It is designed for 

extended on-scene presence, long transits, and operations with 

aircraft and small boats. The Coast Guard is conducting preacquisition design work and plans to award Preliminary & Contract 

Designs for the OPC in fiscal year 2013.

• FRC: The FRC is to replace the 110-foot PBs. The FRC is to have 

high readiness, speed, and adaptability, and the endurance to perform 

a wide range of missions. The Coast Guard received the first FRC in 

March 2012, and is planning to receive six more by the end of fiscal 

year 2013.

These new vessels are designed to perform the same missions as the 

legacy vessels they are replacing, but with greater capabilities.7

 

7

The Coast Guard plans for the NSC and the FRC to be able to perform marine safety 

missions that the 110-foot PB and HEC cannot perform. Also, the Coast Guard envisions 

the OPC as a flexible vessel that will be able to perform emergent missions that the MECs 

cannot perform.

For 

example, the NSC, unlike the HEC, has a secure information system for 

transmitting classified data. Also, the FRC is designed to operate in 

Replacement of the Coast 

Guard’s Legacy Vessel 

Fleet
 

Page 8 GAO-12-741 Coast Guard Legacy Vessels 

conditions with maximum 13-foot waves, while the PB is designed to 

operate in conditions with maximum 8-foot waves. Appendix II provides 

further information comparing each of the four legacy vessel classes with 

its replacement vessel class.

Since 2001, we have reported several times that the Coast Guard’s 

acquisition of replacement vessels for its legacy fleet has experienced 

serious performance and management problems, such as cost overruns 

and schedule slippages, despite the Coast Guard having taken more 

direct responsibility for the program’s acquisition strategy and 

management in recent years.8 At the start of the program, the Coast 

Guard chose a system-of-systems strategy that was to replace the legacy 

assets with an integrated package of assets rather than using a traditional 

acquisition approach of replacing individual classes of legacy assets 

through a series of acquisitions.9

 

8

Since 2001, we have reviewed the Coast Guard’s recapitalization program efforts and 

reported to Congress, DHS, and the Coast Guard on the risks and uncertainties inherent 

with this program. Recent reports include GAO, Coast Guard: Better Logistics Planning 

Needed to Aid Operational Decisions Related to the Deployment of the National Security 

Cutter and Its Support Assets, 

To carry out this acquisition, the Coast 

Guard awarded a competitive contract to a systems integrator (i.e., prime 

contractor) that was responsible for designing, constructing, deploying, 

supporting, and integrating the various assets to meet projected 

operational requirements of the recapitalization program. We informed 

Congress, DHS, and the Coast Guard of the risks and uncertainties 

inherent with such a system-of-systems approach and made 

recommendations to address them. In May 2007, the Coast Guard 

acknowledged that it had relied too heavily on contractors and that the 

government and industry had failed to control costs, and announced its 

GAO-09-497 (Washington, D.C.: July 17, 2009); Coast 

Guard: As Deepwater Systems Integrator, Coast Guard Is Reassessing Costs and 

Capabilities but Lags in Applying Its Disciplined Acquisition Approach, GAO-09-682 

(Washington, D.C.: July 14, 2009); GAO, Coast Guard: Deepwater Requirements, 

Quantities, and Cost Require Revalidation to Reflect Knowledge Gained, GAO-10-790 

(Washington, D.C.: July 27, 2010); and GAO-11-743 

9

The Coast Guard’s system-of-systems approach planned to integrate vessels, aircraft, 

and communication links together as a system to accomplish mission objectives. 

Replacement Vessel 

Program’s Cost and 

Schedule Problems
 

Page 9 GAO-12-741 Coast Guard Legacy Vessels 

intention to take over the role of systems integrator.10 At that time, the 

Coast Guard established a $24.2 billion program baseline that included 

schedule and performance parameters. The Coast Guard has since 

developed baselines for some assets, most of which have been approved 

by DHS, that indicate the estimated total acquisition cost could be as 

much as $29.3 billion, or about $5 billion over the $24.2 billion baseline.11

Figure 2: Vessel Delivery Dates for the Final National Security Cutter, Offshore Patrol Cutter, and Fast Response Cutter 

Identified in the 2007 Deepwater and Revised Baselines

Furthermore, the deliveries of the NSCs, OPCs, and FRCs to replace the 

legacy vessels are years behind schedule, as summarized in figure 2.

Notes: The Coast Guard established the 2007 Deepwater baseline—which included a revised 

delivery schedule for the NSCs, OPCs, and FRCs—after transferring program management 

responsibilities from the contractor back to the Coast Guard. Since 2007, the Coast Guard has 

developed revised baselines for these vessels that indicate that the delivery dates for these 

replacement vessels are years behind schedule. As we reported in July 2011, the revised baselines 

for the NSC and FRC may not reflect the most current data and additional delays are likely. See 

GAO-11-743. For example, according to the NSC Acquisition Program Baseline Breach Remediation 

Plan, the delivery of the final NSC may not occur until fiscal year 2020. 

 

10In March 2004, we recommended the Coast Guard address three broad areas of 

concern: improving program management and oversight, strengthening contractor 

accountability, and promoting cost control through greater competition among potential 

subcontractors. The Coast Guard concurred with GAO’s recommendations and has 

implemented many of them. See GAO, Contract Management: Coast Guard’s Deepwater 

Program Needs Increased Attention to Management and Contractor Oversight, 

GAO-04-380 (Washington, D.C.: Mar. 9. 2004). 

11GAO-11-743. 
 

Page 10 GAO-12-741 Coast Guard Legacy Vessels 

From fiscal years 2005 through 2011, the physical condition of the Coast 

Guard’s legacy vessel fleet, as evidenced by the Coast Guard’s primary 

vessel condition measure, was generally poor. Other evidence, such as 

our review of vessel condition assessments, shows that the condition of 

the legacy vessel fleet is also generally declining. The Coast Guard has 

implemented two key actions to improve the physical condition of the 

legacy vessel fleet: (1) reorganization of the maintenance command 

structure and (2) completion of a 10-year, almost half-billion-dollar set of 

sustainment projects to refurbish PBs and upgrade MECs.

From fiscal years 2005 through 2011, the physical condition of the Coast 

Guard’s legacy vessel fleet, as evidenced by the Coast Guard’s primary 

physical condition measure, was generally poor, with variations by vessel 

class. A primary Coast Guard summary measure of condition—the 

operational percent of time free of major casualties—shows the legacy 

fleet as a whole generally remained well below target levels during fiscal 

years 2005 through 2011.12 For example, the Coast Guard has an annual 

OpPOTF performance target of 72 percent for its major cutters—the 378-

foot HEC and the 210-foot and 270-foot MECs—and 86 percent for the 

110-foot PBs.13

 

12The Coast Guard maintains a variety of measures or metrics to track the physical 

condition or performance of the legacy vessel fleet, which it calls Naval Engineering 

Metrics. Officials responsible for maintaining the legacy vessels reported that OpPOTF is 

the key measure that conveys the overall condition of the legacy fleet. A casualty is a 

deficiency in mission-essential equipment; a major casualty causes the major degradation 

or loss of at least one primary mission. This measure captures the amount of planned 

operational time with which a vessel experienced a major casualty. The Coast Guard 

reports casualties on a scale ranging from 1 to 4, with category 3 and 4 reports considered 

major casualties. OpPOTF is the operational percent of time free from an open casualty 3 

or 4 report.

According to a yearly scorecard the Coast Guard uses to 

track vessel condition measures, the Coast Guard classifies performance 

below target levels as “poor.” As figure 3 shows, measured against these 

standards, the HECs and MECs were generally poor during fiscal years 

13The Coast Guard reports that these targets reflect the need of the major cutters to be 

ready to conduct all missions for 5 out of every 7 days deployed, and for the 110-foot PB 

to be available for 6 out of every 7 days deployed. According to Coast Guard guidance, 

the difference in performance targets is based on differing maintenance philosophies for 

the major legacy cutters versus the smaller 110-foot PB—and the cutters’ respective 

capability to repair casualties while deployed. For example, PBs must return to homeport 

for repairs and thus should have a higher OpPOTF since they will not continue to operate 

with major casualties. In contrast, the Coast Guard’s major cutters can remain at sea with 

serious casualties because they have the capability to perform repairs at sea.

Legacy Vessel Fleet’s 

Condition Is Poor and 

Generally Declining 

despite Coast Guard 

Maintenance Efforts

The Legacy Vessel Fleet 

Did Not Meet Key Physical 

Condition Targets
 

Page 11 GAO-12-741 Coast Guard Legacy Vessels 

2005 through 2011. In particular, the HECs and the 270-foot MECs were 

in the poorest condition, as evidenced by the HEC fleet remaining 

substantially below targets throughout this time period (averaging 

approximately 44 percent OpPOTF) and the 270-foot MEC class meeting 

targets in just 2 of the 7 years in the period (averaging approximately 59 

percent OpPOTF).

Figure 3: Condition of the High and Medium Endurance Cutters as Measured 

against the Coast Guard’s OpPOTF Target, Fiscal Years 2005 through 2011

Note: While remaining far below the target, HEC performance raised slightly during the time period 

with the exception of a steep drop in fiscal year 2009, which Coast Guard officials attributed to 

increased frequency of major casualties, particularly failures to main propulsion systems and diesel 

engines. Coast Guard officials reported that the steep decline in MEC performance between 2009 

and 2010 was due to major casualties experienced by 10 of 12 MECs deployed during response 

operations to the 2010 Haiti earthquake, including severe, mission-affecting casualties to main 

propulsion, propeller, and communications systems. 

Coast Guard data show the 110-foot PBs did not meet the 86 percent 

OpPOTF target in any year during fiscal years 2005 through 2011, as 

shown in figure 4. While remaining below target levels, Coast Guard data 

show the 110-foot PBs generally improved from fiscal years 2006 through 
 

Page 12 GAO-12-741 Coast Guard Legacy Vessels 

fiscal year 2010, with the OpPOTF rising from approximately 47 percent 

to 63 percent.14

Figure 4: Condition of the 110-Foot Patrol Boats as Measured against the Coast 

Guard’s OpPOTF Target, Fiscal Years 2005 through 2011

Note: This analysis includes Coast Guard data covering 35 of the 41 PBs currently in the PB fleet. It 

does not include 6 PBs that the Coast Guard has deployed overseas in support of Operation Iraqi 

Freedom. Coast Guard maintenance officials reported that they could not directly attributed the rise to 

one event, but noted that contributing factors may include improved consistency in maintenance 

practices and the effects of vessel sustainment projects, both of which we discuss later in this report. 

 

14Coast Guard maintenance officials attributed the respective variations in the OpPOTF of 

the legacy vessel fleet to two primary factors. First, officials reported that the HEC and 

MEC vessels were the oldest with respect to designated service life and thus in the 

poorest condition. Second, officials noted that the larger HECs and MECs have more 

numerous and complex operating systems vulnerable to casualty than do the 110-foot 

PBs. 
 

Page 13 GAO-12-741 Coast Guard Legacy Vessels 

Our review of vessel physical condition assessments, discussions with 

Coast Guard maintenance and operational personnel, and site visits to 

various Coast Guard field units further point to a Coast Guard legacy 

vessel fleet that is in overall poor condition and is generally declining. For 

example, Coast Guard vessel condition assessments provide details 

regarding the legacy fleet’s deteriorating and obsolete systems and 

equipment. The Coast Guard conducts a variety of assessments and 

inspections of the legacy fleet’s condition as part of its efforts to identify 

and address maintenance needs and guide vessel decommissioning 

decisions. According to these condition assessments, critical operating 

systems on the legacy vessels have been increasingly prone to missiondegrading casualties. For example, the Coast Guard’s Surface Forces 

Logistics Center and Office of Naval Engineering have tracked the annual 

major mission degraders and cost drivers for each of the legacy vessel 

fleet classes.15 Among the list of fiscal year 2011 top five mission 

degraders and cost drivers were main gas turbines for the 378-foot HECs 

and, as a mission degrader, the Reverse Osmosis Desalination Plant for 

the 210-foot and 270-foot MECs.16

In addition, Coast Guard senior maintenance officials and vessel crew we 

interviewed at the five locations we visited where legacy vessels were 

homeported or undergoing maintenance noted the increased 

maintenance challenges facing the legacy vessels because of their age. 

In particular, the maintenance managers for both the HECs and MECs 

reported that with the vessels past or nearing the end of their estimated 

service lives, the performance of critical systems has become 

increasingly unpredictable, and refurbishments of systems that have had 

a relatively high rate of failure have brought limited returns on 

investments. For example, according to these program managers, in 

2009 and 2010, the Coast Guard spent about $200,000 per vessel to 

rebuild several HEC main diesel engines. However, these officials said 

While the list of key mission degraders 

and cost drivers varies by vessel class, main diesel engines were listed 

as common top major mission degraders and cost drivers across the 

legacy fleet in fiscal years 2010 and 2011.

 

15Coast Guard maintenance officials reported that these lists are prepared by the Surface 

Forces Logistics Center on a yearly basis and are summarized by the Office of Naval 

Engineering to (1) track vessel condition; (2) identify, prioritize, and address maintenance 

needs; and (3) guide planning and budgetary decisions. 

16A Reverse Osmosis Desalination Plant converts seawater to freshwater. See appendix 

III for a list of fiscal year 2011 legacy vessel key mission degraders and cost drivers.

Other Evidence Shows the 

Legacy Vessel Fleet’s 

Condition Is Declining
 

Page 14 GAO-12-741 Coast Guard Legacy Vessels 

that some of these diesel engines broke down within a short period of 

time because other parts of the engines that were not included in the 

rebuild failed. These officials told us that investing in main diesel engine 

replacements—because the engines are outdated, are failing at high 

rates, and have obsolete parts—would be important to sustaining the 

aging HECs and MECs. However, the officials told us that main diesel 

engine replacements for the HECs and MECs may be too costly in the 

current fiscal environment given the need for the Coast Guard to balance 

legacy vessel maintenance needs with its ongoing acquisition of 

replacement vessels. Consequently, for the HECs and MECs, Coast 

Guard maintenance program managers reported that they expect the 

main diesel engines in these vessels will continue to fail at high rates until 

the cutters are replaced by the NSCs and OPCs, respectively.

Maintenance officials and vessel crew members we interviewed at the 

five locations we visited also reported that they have had to devote 

increasing amounts of time and resources to troubleshoot and resolve 

maintenance issues on the legacy vessels. In particular, these officials 

said that because the systems and parts are outdated compared with 

current technology and equipment, it can be challenging and time 

consuming to diagnose a maintenance issue and find parts or determine 

what corrective actions to take. According to maintenance program 

managers, some parts needed to maintain the legacy vessels are 

obsolete and, as a result, the Coast Guard has had to reengineer these 

parts or find a supplier who can manufacture the obsolete parts—efforts 

that can be time consuming and costly. For example, during our tour of 

the HEC Midgett, the vessel’s engineering officer discussed challenges 

he had faced in diagnosing and replacing a failed small boat davit system 

component—which he attributed to the time Coast Guard engineers 

needed to troubleshoot, identify, and procure a replacement system from 

a vendor.17

The Coast Guard has implemented two key actions to improve the 

condition of the legacy vessel fleet: (1) reorganization of the maintenance 

command structure and (2) completion of the Mission Effectiveness 

Projects (MEP), a 10-year, almost half-billion-dollar set of sustainment 

projects to refurbish PBs and upgrade MECs.

 

17A davit is a mechanical system used for launching and recovering small boats.

The Coast Guard Has 

Taken Actions to Improve 

the Condition of the 

Legacy Vessel Fleet
 

Page 15 GAO-12-741 Coast Guard Legacy Vessels 

Reorganization of the maintenance command structure. In 2009, the 

Coast Guard reorganized its maintenance command structure with a 

focus on standardization of practices. Previously, Coast Guard vessel 

maintenance was overseen by one of the Coast Guard’s two area 

Maintenance and Logistics Commands, and management of a vessel was 

generally determined by whether its homeport location was in the Coast 

Guard’s Atlantic or Pacific Area Command rather than by its class. Under 

this reorganization, the Coast Guard eliminated its two Maintenance and 

Logistics Commands and replaced them with a centralized command 

structure—the Surface Forces Logistics Center (SFLC)—whereby a 

single manager oversees the maintenance of an entire class of vessels.18

For example, a single manager now oversees maintenance of all 27 

MECs, whereas previously maintenance responsibility was decentralized 

amongst the area commands and the vessel operators. Coast Guard 

SFLC officials reported that this change was made to enable better 

oversight of the condition of entire classes of the vessel fleet, reduce the 

workload on vessel crews by providing centralized support for 

procurement of replacement parts, and implement centralized 

maintenance plans to address commonly occurring casualties.19 A key 

part of this effort is a prioritization of preventive maintenance practices by 

completing scheduled maintenance in a timely manner and better 

identifying maintenance trends—which officials said could ultimately help 

the Coast Guard better predict maintenance and funding needs.20

 

18The Coast Guard established the SFLC under which Coast Guard vessels are grouped 

into five product lines whose mission support, maintenance procedures, priorities, and 

funds are overseen by a single product line manager. The product lines are the (1) Long 

Range Enforcer (which includes the HEC and NSC), (2) Medium Endurance Cutter; (3) Ice 

Breaker, Buoy Tender and Construction Tender; (4) Patrol Boat (which includes the PB 

and FRC); and (5) Small Boat.

19According to the Coast Guard, vessel crews themselves had previously been 

responsible for managing procurement of replacements for minor casualties. According to 

officials, doing so could be time consuming for crews. Under the reorganization, the SFLC 

manages a greater share of the procurement of replacement parts and systems to both 

reduce the workload of crews and provide better oversight across the vessel fleet. 

Additionally, the new organization is structured to provide a single point of accountability 

(the Product Line Manager) for all maintenance, system upgrades, and supply functions 

for an asset class. 

20Although we interviewed Coast Guard officials, it was outside the scope of this review to 

assess the impact the reorganization has had to date on Coast Guard maintenance 

practices and costs.
 

Page 16 GAO-12-741 Coast Guard Legacy Vessels 

Completion of MEPs. The Coast Guard is nearing completion of the 

MEPs for its MECs and PBs. Begun in fiscal year 2005 and scheduled for 

completion in fiscal year 2014, these sustainment projects are intended to 

improve the legacy vessels’ operating and cost performance by replacing 

obsolete, unsupportable, or maintenance-intensive equipment that had 

been key sources of degraded performance. The project scope of 

sustainment work varies considerably for the PB and MEC classes, with 

the PBs being overhauled and the MECs having far more limited 

upgrades. For example, the Coast Guard is almost completely 

refurbishing those PBs included in the MEP, which includes 17 of the 41 

PBs in the fleet. For the PBs going through the MEP, the Coast Guard is 

removing major portions of the interior and replacing them with new and 

upgraded equipment, such as overhauled main diesel engines, a new 

generator and electrical systems, and also identifying and correcting 

structural deterioration in the vessels’ hulls. In contrast, for the MECs, the 

MEP includes the entire fleet of 270-foot and 210-foot MECs, and 

constitutes an upgrade of selected systems rather than the almost 

complete overhaul that the PBs received. For example, MEC work 

includes replacement of primary sources of degraded equipment, such as 

the main propulsion control and monitoring system, small boat davits, and 

air conditioning systems, but does not involve replacement of main diesel 

engines. As of July 2012, Coast Guard officials reported the Coast Guard 

was on schedule for the MEP and had completed work on all 14 210-foot 

MECs.21 The Coast Guard estimates total costs for the MEC and PB 

projects to be $453.5 million.22 Table 1 provides an overview of the MEPs’ 

costs and completed work as of May 2012.

 

21The Coast Guard completed the MEP for the 210-foot MEC class in fiscal year 2010, 

expects to complete work on the final PB in July 2012, and plans to complete the 

remainder of the 270-foot MEC class by the end of fiscal year 2014. 

22The Coast Guard reported that total MEP costs covering both the 270-foot and 210-foot 

MECs are projected to be $279.75 million and 110-foot PB costs are projected to be 

$163.5 million for a total cost of $443.25 million for the fiscal years 2005 through 2014 

projects. These projections do not include the Coast Guard’s fiscal year 2013 budget 

request for MEP, which was an additional $13 million to complete work on the 270-foot 

MECs. 
 

Page 17 GAO-12-741 Coast Guard Legacy Vessels 

Table 1: Costs and Implementation Schedule for the MEPs Conducted for MECs and PBs, as of May 2012

Vessel class Work status

Actual or expected 

completion date

Average

Cost per hull

Total

expenditures 

Total 

appropriations

210-foot MEC 14 of 14 completed September 2010 $7.2 million $101.27 million $279.75 milliona

270-foot MEC 6 of 13 

completedb August 2014 $14.1 million $105.9 million

PB 16 of 17 completed July 2012 $8.4 million $137.2 million $163.5 million

Total 37 of 44 $443.25 million

Source: GAO analysis of Coast Guard data.

a

As of May 2012, the Coast Guard had received a total of $279.75 million for completing MEP work 

on both 210-foot and 270-foot MECs. These funds were appropriated as a lump sum and not per 

MEC class. These projections do not include the Coast Guard’s fiscal year budget request for MEP, 

which was an additional $13 million to complete work on the 270-foot MECs. 

b

This number includes only 270-foot MECs that have completed their entire 11-month availability for 

MEP, or—if done in phases—6 to 7-month availabilities.’ 

Figure 5 shows selected photographs of an MEC undergoing a MEP.
 

Page 18 GAO-12-741 Coast Guard Legacy Vessels 

Figure 5: Mission Effectiveness Project Upgrades on Medium Endurance Cutters

Note: The top photograph is of an MEC undergoing an upgrade at the Coast Guard Yard. The bottom 

left photograph shows an old propulsion control console from an MEC and the photograph on the 

bottom right shows the propulsion control console installed on a 270-foot MEC during an upgrade. 
 

Page 19 GAO-12-741 Coast Guard Legacy Vessels 

The Coast Guard’s expenditures to maintain its legacy vessels declined 

from fiscal year 2005 to fiscal year 2007, and then rose from fiscal year 

2007 to fiscal year 2011. The Coast Guard’s process for estimating 

related legacy vessel maintenance costs does not fully reflect relevant 

best practices, which state that cost estimates should be comprehensive, 

well documented, and accurate.

Expenditures for the two key types of legacy vessel annual depot level 

maintenance—scheduled and unscheduled maintenance—declined from 

fiscal year 2005 to fiscal year 2007, and then rose from fiscal year 2007 

to 2011.23 While scheduled maintenance activities are planned and are 

based on the historical maintenance needs of the vessel class, 

unscheduled maintenance activities are performed in response to 

mission-limiting equipment or system casualties (i.e., failures). Figure 6 

shows how the scheduled and unscheduled maintenance expenditures 

changed across the four legacy vessel classes from fiscal years 2005 

through 2011. See appendix III for more specific maintenance 

expenditure information for the HECs, MECs, and PBs.24

 

23Depot-level maintenance is vessel maintenance that is beyond the capability of the 

operating units. This report analyzes depot-level maintenance funds spent through the 

Naval Engineering Allotment Fund Control Code, which represents 85 to 95 percent of all 

legacy vessel maintenance expenditures from fiscal years 2005 through 2011. 

24In fiscal year 2010, the Coast Guard developed a new metric called Maintenance Cost 

per Operational Hour. According to senior Coast Guard maintenance officials, this metric 

will enable the Coast Guard to make a long-range comparison of vessel costs and may be 

used for budgeting decisions once the Coast Guard has acquired 4 years-worth of data.

Depot-Level 

Maintenance 

Expenditures for the 

Legacy Vessel Fleet 

Have Recently 

Increased, and the 

Coast Guard’s Process 

for Estimating

Related Costs Does 

Not Fully Reflect Best 

Practices

Depot-Level Expenditures 

to Maintain the Legacy 

Vessels Rose from Fiscal 

Years 2007 to 2011
 

Page 20 GAO-12-741 Coast Guard Legacy Vessels 

Figure 6: Scheduled and Unscheduled Depot-Level Maintenance Expenditures for 

the Legacy Vessel Fleet from Fiscal Years 2005 through 2011

Note: Scheduled and unscheduled depot level maintenance expenditure data have been adjusted for 

inflation and are stated in fiscal year 2012 dollars. 

Coast Guard data show that scheduled annual maintenance expenditures 

generally rose across all legacy vessel classes from fiscal years 2007 to 

2011. For example, scheduled maintenance expenditures rose from 

$46.1 million in fiscal year 2008 to $85.2 million in fiscal year 2009—an 

increase of 85 percent—and then dropped to approximately $69 million in 

both fiscal years 2010 and 2011. Senior Coast Guard vessel maintenance 

officials attributed the rise in scheduled maintenance expenditures to two 

primary factors. First, the SFLC implemented new maintenance practices 

since its establishment in fiscal year 2009, which officials report have 

allowed the Coast Guard to better identify maintenance needs for the 

vessel fleet, as well as place a higher priority on completing 100 percent 

of scheduled maintenance each year. Second, the Coast Guard received 

supplementary funding to support rising maintenance costs. For example, 
 

Page 21 GAO-12-741 Coast Guard Legacy Vessels 

in fiscal years 2010 and 2011, the Coast Guard dedicated $93.85 million 

of supplemental funding from Congress to the maintenance of legacy 

vessels.25 The officials noted that this funding has been critical in enabling 

the Coast Guard to better address maintenance items that would 

otherwise have to be deferred.26

While unscheduled maintenance expenditures varied by vessel class 

from fiscal years 2005 through 2011, Coast Guard data show that the 

HEC fleet incurred the greatest share of unscheduled maintenance 

expenditures. Of the four legacy vessel classes, the Coast Guard 

consistently spent more on unscheduled maintenance for the HECs than 

for any of the other three legacy vessel classes. For example, in fiscal 

year 2011, the Coast Guard spent $8.5 million of the $18.4 million 

unscheduled maintenance funds (or 46 percent) on the HECs. In 

comparison, in fiscal year 2011, the Coast Guard spent $4.0 million for 

the 270-foot MECs, $4.6 million for the 210-foot MECs, and $1.3 million 

for the 110-foot PBs. Further, unscheduled maintenance consistently 

represented a greater portion of total maintenance expenditures for the 

HECs than for any of the other legacy vessel classes. For example, in

fiscal year 2011, unscheduled maintenance represented 41 percent of 

total maintenance expenditures for the HECs. In comparison, in fiscal 

year 2011, unscheduled maintenance expenditures represented 20 

percent of total maintenance expenditures for the 270-foot MECs, 24 

percent for the 210-foot MECs, and 5 percent for the PBs. Coast Guard 

officials reported that the comparatively high unscheduled maintenance 

expenditures for the HECs were generally due to the HECs being the 

For example, in fiscal year 2009 deferred 

maintenance for the legacy vessels was $68.5 million, which then 

declined to $39.2 million in fiscal year 2011.

 

25In fiscal year 2010, the Coast Guard was appropriated $10 million of supplemental 

funding for maintenance of the HECs and dedicated $19.75 million of additional 

supplemental funding, available through fiscal year 2012, to the legacy vessel fleet. See 

Pub. L. No. 111-32, 123 Stat. 1859, 1881 (2009); Pub. L. No. 111-212, 124 Stat. 2302, 

2315 (2010). The Coast Guard also reported receiving $25.2 million in fiscal year 2010 

and $38.9 million in fiscal year 2011 of Overseas Contingency Operations funding for 

maintenance of HECs and PBs, and the occasional 270-foot MECs assigned to the 

Department of Defense’s Africa Command. 

26Deferred maintenance is the amount of scheduled maintenance on a vessel that must 

be postponed in order to pay for unscheduled maintenance. Such deferrals can occur 

when the Coast Guard does not have enough money to absorb unexpected maintenance 

expenditures and still perform all of its scheduled maintenance, thus creating a backlog. 
 

Page 22 GAO-12-741 Coast Guard Legacy Vessels 

oldest and largest legacy vessels in the fleet, and thus having the 

greatest number of systems prone to failure.27

Budgeted depot level maintenance funds. From fiscal years 2005 

through 2011, annual depot-level maintenance expenditures often 

exceeded the Coast Guard’s budgeted funds for depot-level 

maintenance—known as Standard Support Levels—for the legacy 

vessels. The Standard Support Levels have generally remained 

unchanged over decades and do not reflect the rising costs to maintain 

the legacy vessels as they have aged.28 According to Coast Guard data, 

annual depot-level maintenance expenditures exceeded Standard 

Support Levels for all legacy vessel classes in fiscal year 2005, and from 

fiscal years 2009 through 2011. Furthermore, in the case of the HECs 

and PBs, actual depot-level maintenance expenditures far exceeded 

Standard Support Levels each year from fiscal years 2005 through 2011. 

For example, actual depot-level maintenance expenditures for the HECs 

were 3.6 times higher than Standard Support Levels in fiscal years 

2009—$55.5 million compared with $15.5 million. Senior Coast Guard 

vessel maintenance officials cited this funding gap as a management 

challenge, noting that supplemental funding had been critical to enable 

the Coast Guard to fund necessary maintenance for the legacy vessel 

fleet. Appendix III includes a further comparison of depot-level 

maintenance expenditures with Standard Support Levels for each legacy 

vessel class, which shows the widespread discrepancy between the 

Standard Support Levels and the actual expenditures for the HECs and 

PBs in particular.

 

27Coast Guard officials told us that major casualties on three HECs—the Chase, Dallas

and Gallatin—contributed disproportionately to these expenditures in fiscal years 2010 

and 2011. The Coast Guard has since decommissioned the Chase and Dallas. 

28According to the Coast Guard, Standard Support Levels are established when a vessel 

class enters service or undergoes a service life extension program. For example, the 

Coast Guard reset the Standard Support Level for the HECs after conducting a service life 

extension program between 1987 and 1992—the Fleet Renovation and Modernization 

Program—but has not reset the Standard Support Levels for the MECs or PBs. The Coast 

Guard indicated that it increases Standard Support Levels using non-pay inflation, but it 

has not done so every year. Standard Support Level data in this report have been 

adjusted for inflation and are stated in fiscal year 2012 dollars.
 

Page 23 GAO-12-741 Coast Guard Legacy Vessels 

Cost estimates are a vital factor for sound management decision making 

and they aid in the formation of a project’s budget. The Coast Guard uses 

cost estimates, in part, to justify Operations and Expenses budget 

requests and determine whether vessel maintenance projects can 

proceed. Coast Guard vessel maintenance officials told us that they 

estimate vessel maintenance costs following a set process, as 

summarized below.

Scheduled maintenance. The Coast Guard uses maintenance plans for 

each cutter class to document (1) scheduled maintenance items, (2) who 

should perform them, and (3) the frequency at which they should be 

performed.29 The Coast Guard also uses these maintenance plans to 

develop a vessel-specific list of maintenance items to be accomplished 

during a designated period.30 The Coast Guard imports the maintenance 

items from this vessel-specific list into the Fleet Logistics System 

database, which assigns rough cost estimates to each maintenance 

item.31 Project managers are then to review the rough cost estimate for 

each maintenance item and adjust these estimates, if necessary, using 

project-specific knowledge. Once the Coast Guard is ready to move a 

scheduled maintenance item into the acquisition phase, a naval engineer 

is to construct a detailed cost estimate.32

Unscheduled maintenance. The Coast Guard cannot assign cost 

estimates specific to unscheduled maintenance items within the Fleet 

Logistics System because it cannot know which maintenance items will 

 

29These plans are called Class Maintenance Plans.

30These vessel-specific lists are called Naval Engineering Project Lists.

31These rough cost estimates are derived from historical costs documented in Contract 

Workbook, a database that tracks costs for each ongoing or completed maintenance 

contract.

32These detailed cost estimates are referred to as Independent Government Estimates.

The Coast Guard’s Process 

for Estimating Annual 

Legacy Vessel Maintenance 

Costs Does Not Fully 

Reflect Best Practices 

The Coast Guard’s Process for 

Estimating Legacy Vessel 

Maintenance Costs
 

Page 24 GAO-12-741 Coast Guard Legacy Vessels 

occur in a given year. Consequently, Coast Guard maintenance officials 

plan for unscheduled maintenance needs using funds budgeted for 

casualty repairs by the relevant SFLC product line. The amount of funding 

is based on historical costs for casualty repairs and is equal to 

approximately 20 percent of each product line’s total budget. Once the 

Coast Guard is ready to perform unscheduled maintenance, it develops a 

more specific cost estimate. For unscheduled maintenance that is 

expected to cost more than $150,000, naval engineers are to construct a 

detailed cost estimate. For unscheduled maintenance under this 

threshold, naval engineers are to ensure that the estimated costs are 

reasonable.33

The cost estimates from the Fleet Logistics System for scheduled 

maintenance and the historical costs of casualty repairs for unscheduled 

maintenance comprise estimated legacy vessel maintenance costs for 

each product line. SFLC product line managers are to use this estimate—

along with estimates of overhead, electronics, and reimbursable costs 

related to vessel maintenance—to produce a budget request for each 

product line. Figure 7 provides a graphical summary of this process.

 

33Naval engineers ensure the cost estimates are reasonable by completing what is 

referred to as a market research form. The Coast Guard uses a market research form to 

document market research in a manner appropriate to the size, complexity, and urgency 

of an acquisition. It can include information such as research techniques and information 

sources, relevant products and companies, a description of the commercial marketplace, 

prevalent business practices, and pricing and market issues.
 

Page 25 GAO-12-741 Coast Guard Legacy Vessels 

Figure 7: The Coast Guard’s Process for Estimating Annual Legacy Vessel 

Maintenance Costs, by Product Line 

The Coast Guard’s process for estimating annual legacy vessel 

maintenance costs reflects some features of best practices, but it does 

not fully reflect best practices. The ability to generate reliable cost 

estimates is a critical function that is necessary to support OMB’s capital 

programming process. GAO’s Cost Estimating and Assessment Guide

states that a high-quality and reliable cost estimate includes best practice 

characteristics—it should be (1) well documented, (2) comprehensive, 

and (3) accurate.34 Following these best practices is a key step in 

successfully managing a project within cost and affordability guidelines. 

Moreover, GAO’s cost guide establishes 10 steps that, if followed, should 

result in high-quality cost estimates.35

 

34

As shown in table 2, the Coast 

GAO-09-3SP. Since the cost estimate is for the maintenance of Coast Guard legacy 

vessels rather than an acquisition type cost estimate, we have determined that the fourth 

best practice characteristic identified in GAO’s Cost Estimating and Assessment Guide—

”credible”— is not appropriate for this assessment.

35Since we determined that the fourth best practice characteristic—”credible”—is not 

appropriate for this assessment, we did not assess two steps related to the “credible” 

characteristic as identified in GAO’s Cost Estimating and Assessment Guide. 

The Coast Guard’s Cost 

Estimating Process Does Not 

Fully Reflect Best Practices 
 

Page 26 GAO-12-741 Coast Guard Legacy Vessels 

Guard’s process for estimating the annual costs for maintaining its legacy 

vessel fleet partially meets the three characteristics for producing a highquality, reliable cost estimate as established by best practices. Appendix

IV shows the relationship between these best practice characteristics and 

each step of a high-quality cost estimate, and also provides more details 

on the extent to which the Coast Guard’s cost estimating process meets 

the three best practices characteristics.

Table 2: GAO Assessment of the Extent to Which the Coast Guard’s Annual Legacy Vessel Fleet Maintenance Cost 

Estimating Process Reflects Best Practices 

Best practice Best practice description Assessment

Comprehensive Cost estimates should include government and contractor costs over the program’s full life 

cycle, from program inception through design, development, deployment, and operation and 

maintenance to retirement. They should provide an appropriate level of detail to ensure that 

cost elements are not omitted or double counted and document all cost-influencing ground 

rules and assumptions.

Partially met

Well documented Cost estimates should have clearly defined purposes and be supported by documented 

descriptions of key program or system characteristics. The estimates should capture in 

writing such things as the source data used and their significance, the calculations 

performed and their results, and the rationale for choosing a particular estimating method. 

Moreover, this information should be captured in such a way that the data used to derive the 

estimate can be traced back to, and verified against, their sources. The cost estimate should 

be reviewed and accepted by management.

Partially met

Accurate Cost estimates should provide for results that are unbiased and not overly conservative or 

optimistic. The estimates should be updated regularly to reflect material changes in the 

program, and steps should be taken to minimize mathematical mistakes and their 

significance. The estimate should be grounded in a historical record of cost estimating and 

actual experiences on comparable programs.

Partially met

Source: GAO analysis of U.S. Coast Guard information.

Note: “Not met”: The Coast Guard provided no evidence that satisfies any portion of the criterion. 

“Minimally met”: The Coast Guard provided evidence that satisfies a small portion of the criterion. 

“Partially met”: The Coast Guard provided evidence that satisfies about half of the criterion. 

“Substantially met”: The Coast Guard provided evidence that satisfies a large portion of the criterion. 

“Met”: The Coast Guard provided evidence that completely satisfies the criterion. 

Our assessment showed that the Coast Guard’s legacy vessel 

maintenance cost estimating process partially met the three

characteristics, as follows:

Partially comprehensive. The Coast Guard’s process for estimating 

costs is partially comprehensive because it defines the program, reflects 

the current schedule, is technically reasonable, is product-oriented, is 

traceable to the statement of work and objectives, and contains an 

appropriate level of detail to ensure that cost elements are not omitted or 
 

Page 27 GAO-12-741 Coast Guard Legacy Vessels 

double-counted. However, the process is not fully comprehensive 

because it does not document all cost-influencing ground rules and 

assumptions, such as the inflation rate used in the cost estimate.36 Unless 

ground rules and assumptions are clearly defined, the cost estimate will 

not have a basis to identify and mitigate areas of potential risk. Further, 

the Coast Guard did not provide documentation showing a link between 

the work breakdown structure and costs.37

Partially well documented. The Coast Guard’s process for estimating 

costs is partially well documented because it discusses the technical 

baseline description and the data in the baseline are consistent with the 

estimate. However, the process is not fully well documented because the 

Coast Guard did not provide documentation that discusses how the data 

were normalized or the reliability of the cost estimate data.

Doing so would allow the 

program to track costs by defined deliverables, which in turn allows a 

program manager to more precisely identify which components are 

causing cost overruns and to more effectively mitigate the root cause of 

the overruns.

38

 

36Ground rules are a set of estimating standards that provide guidance and minimize 

conflicts in definitions. Assumptions are judgments about past, present, or future 

conditions that may affect the estimate. 

Further, the 

Coast Guard did not provide documentation that (1) verifies the validity of 

the estimating approach or the link between the primary cost-estimating 

data sources and actual cost estimate, or (2) describes step by step how 

the cost estimate was constructed. For example, although the Coast 

Guard has guidance that outlines how to implement the maintenance 

process, develop budgets, and allocate resources within the SFLC, Coast 

Guard officials told us that similar guidance does not exist for how to 

construct cost estimates. Specifically, Coast Guard officials told us that 

cost estimation processes for unscheduled maintenance items are 

undocumented. Without developing a well-documented cost estimate, 

37A work breakdown structure shows the requirements and what must be accomplished to 

develop a program and provides the basis for identifying resources and tasks for 

developing a program cost estimate. It provides a basic framework for estimating costs, 

developing schedules, identifying resources, determining where risks may occur, and 

providing the means for measuring program status.

38The purpose of data normalization is to make a given data set consistent with and 

comparable to other data used in the estimate. Since data can be gathered from a variety 

of sources, they are often in different forms and need to be adjusted before being used for 

comparison analysis or as a basis for projecting future costs.
 

Page 28 GAO-12-741 Coast Guard Legacy Vessels 

management and oversight organizations do not have reasonable 

assurance that the cost estimate is reliable, supporting data will not be 

available for creating a historical database, questions about the approach 

or data used to create the estimate cannot be answered, lessons learned 

and a history for tracking why costs changed cannot be recorded, and the 

scope of the analysis cannot be thoroughly defined. Further, unless the 

estimate is well documented, analysts unfamiliar with the program will not 

be able to replicate the estimate.

Partially accurate. The Coast Guard’s process for estimating costs is 

partially accurate because it contains few, if any, minor mathematical 

mistakes and is regularly updated to reflect significant changes in the 

program so that it reflects the current status. However, the cost estimate 

is not considered fully accurate because although Coast Guard officials 

told us that the data they provided to us incorporated an inflation index of 

3 percent for all years based on the consumer price index, they could not 

provide us with documentation explaining why the Coast Guard chose to 

use this inflation rate or how it was applied to the data. Applying inflation 

indexes is an important step in cost estimating because, in the 

development of an estimate, cost data must be expressed in the same 

terms. If a mistake is made or the inflation amount is not correct, cost 

overruns can result. Also, although the cost estimate is based on an 

average of historical, actual contractor bids for the maintenance project, 

the Coast Guard was unable to provide documentation that would allow 

us to assess the reliability of the historical data used, the accuracy of the 

calculations, the relationship of the data to the historical contractor bids, 

or the final estimates for all maintenance costs. While having access to 

historical data can provide the cost estimator with insights into actual 

costs on similar programs, the utility of the Coast Guard’s historical cost 

estimate data is uncertain because of the limited documentation 

mentioned above.

According to GAO’s 2009 Cost Estimating and Assessment Guide, 

endorsed by OMB and DHS, cost estimates are integral to determining 

and communicating a realistic view of likely cost outcomes that can be 

used to plan the work necessary to develop, produce, and support a 

program. 39

 

39

Senior Coast Guard officials responsible for legacy vessel 

maintenance acknowledged over the course of our review that, although 

GAO-09-3SP. 
 

Page 29 GAO-12-741 Coast Guard Legacy Vessels 

they thought that the Coast Guard had been following cost-estimating 

best practices, upon close examination, they realized that the Coast 

Guard had not fully incorporated these best practices into its costestimating process. Ensuring that its annual-depot level cost estimates for 

legacy vessel fleet maintenance incorporate established best practices 

would better position the Coast Guard to use its cost estimates to more 

effectively allocate available resources in the constrained federal budget 

environment.

The operational capacity of the Coast Guard’s legacy vessel fleet 

declined from fiscal years 2006 through 2011. In particular, while 

performance varied across the legacy vessel classes, two key Coast 

Guard metrics—operational hours and lost cutter days—show that the 

legacy vessels did not meet their operational capacity targets and lost 

considerable planned operational time. Coast Guard headquarters 

officials reported that the declining operational capacity of its legacy 

vessel fleet—particularly the HECs and MECs—has been a prime 

contributor to the Coast Guard’s declining ability to meet its mission 

needs. Coast Guard officials reported that delays in the delivery of 

replacement vessels will require the Coast Guard to continue to operate 

its legacy vessels beyond their remaining service lives and result in a 

widening capacity gap.

The operational capacity of the Coast Guard’s legacy vessel fleet 

declined from fiscal years 2006 through 2011, as shown by key Coast 

Guard performance data. While performance varied across the legacy 

vessel classes, two key Coast Guard metrics—operational hours and lost 

cutter days—show that legacy vessels did not meet their operational 

capacity targets and lost considerable planned operational time, which 

Coast Guard officials attributed to the legacy vessel fleet’s degraded 

condition and increased maintenance needs. According to the Coast 

Guard, the reduced operational capacity of its legacy vessel fleet is a 

prime contributor to the Coast Guard’s declining ability to fully meet its 

missions. 

Coast Guard data show that the operational capacity of the legacy vessel 

fleet overall, as measured by operational hours, has fluctuated over the 

last 7 fiscal years, with a general decline since 2005. For example, in 

fiscal year 2011, the legacy vessel fleet’s cumulative target for operational 

hours was 222,740, yet the actual number of operational hours achieved 

was 180,202—about 23 percent less. Specifically, as shown in figure 8, 

Declining Condition 

of the Legacy Vessel 

Fleet Makes 

Operational Capacity 

Targets Increasingly 

Unachievable

Legacy Vessel Fleet’s 

Declining Condition Has 

Reduced Operational 

Capacity

Operational Hours Have 

Generally Declined 
 

Page 30 GAO-12-741 Coast Guard Legacy Vessels 

Coast Guard operational hour data show a decrease in the HECs’ 

operational capacity in recent years with the HECs accounting for the 

largest decline in the legacy vessel fleet’s operational capacity. In 

particular, the HEC fleet did not meet the Coast Guard’s operational hour 

target in any year from fiscal year 2005 through 2011. HEC operational 

hours declined by about 32 percent, or over 12,170 hours, from fiscal 

year 2008 to 2011.40 Moreover, the MEC fleet also generally did not meet 

its operational hour targets, with only the 270-foot MECs meeting their 

targets in fiscal year 2008 and the total operational hours of the 270-foot 

and 210-foot MEC classes combined declining nearly 21 percent (17,500 

hours) from fiscal year 2007 to fiscal year 2011.41 Over the last 5 fiscal 

years, 270-foot MECs accounted for the largest loss in MECs’ operational 

hours, declining by 39 percent, or nearly 18,000 hours, since last meeting 

their operational hour target in fiscal year 2008. In comparison, while the

210-foot MECs did not meet the operational hours target in any year 

between fiscal years 2005 through 2011, the fleet’s operational hours 

fluctuated, declining from fiscal years 2007 through 2009, before 

improving in fiscal years 2010 and 2011.42 Finally, the 110-foot PB fleet 

did not meet operational hour targets in 5 of the last 7 fiscal years.43

 

40Coast Guard headquarters officials reported that two HEC hulls were decommissioned 

in fiscal year 2011 for a total reduction of 3,330 HEC operational hours in comparison with 

operational hours for the previous fiscal year.

Coast Guard data show that since exceeding its target in fiscal year 2006, 

the PB fleet has faced an increasing capacity gap over the last 5 fiscal 

41Coast Guard officials attributed declines in MEC capacity primarily to increased 

unscheduled maintenance. However, they also reported that because MECs were taken 

out of service on a rotating basis to undergo MEP, doing so may have also decreased 

MEC operational hours by as much as 9,900 hours annually. The 210-foot MECs 

underwent the MEP from fiscal years 2008 through 2010 and 270-foot MECs began the 

MEP from fiscal year 2005 and are scheduled to run through fiscal year 2014. 

42Coast Guard maintenance officials attributed the improved 210-foot MEC operational 

hour performance to completion of the MEP for that class in 2010. However, they also 

said that completion of the MEP does not guarantee improved capacity long-term because 

the MEP replaced only select systems and many aging parts and systems were not 

included. For example, the officials cited the case of the MEC Northland, which completed 

its MEP in March 2011, yet suffered two consecutive major casualties in 2011 that 

resulted in a loss of 396 operational hours.

43Our analysis of PB operational hour data included both 123-foot and 110-foot PBs. 

Coast Guard officials reported that, prior to decommissioning the 123-foot PBs in fiscal 

year 2007, both vessel classes were categorized within the Coast Guard’s PB fleet for the 

purposes of setting operational hour targets and data analysis.
 

Page 31 GAO-12-741 Coast Guard Legacy Vessels 

years—losing an average of 13,856 operational hours each year across 

the fleet, or about 16 percent below PB targets.44

Figure 8: Summary of the Legacy Vessels’ Operational Hour Performance Compared with Targets, Fiscal Years 2005 through 

2011 

Coast Guard data also show that the legacy vessel fleet lost a 

considerable number of planned operational days because of 

unscheduled maintenance. For example, for the HECs and MECs, the 

 

44Coast Guard officials attributed this decline in PB capacity to an overall increase in the 

maintenance needs of PBs given their age and deteriorating hull conditions. 

Lost Cutter Days Are Generally 

Rising
 

Page 32 GAO-12-741 Coast Guard Legacy Vessels 

Coast Guard tracks lost cutter days, which are the number of planned 

operational days that a vessel was unavailable to conduct operations, 

typically because of maintenance.45 Coast Guard officials said that lost 

cutter days are a primary indicator of operational readiness. Specifically, 

Coast Guard data show the HECs and MECs collectively averaged about 

618 lost cutter days per year from fiscal years 2006 through 2011.46

As shown in figure 9, HECs accounted for the largest share of lost cutter 

days, averaging 465 lost cutter days each year from fiscal years 2006 

through 2011.47 Further, the number of lost cutter days for the HEC fleet 

rose rapidly beginning in fiscal year 2008, peaking at 654 lost cutter days 

in fiscal year 2010. Moreover, for each of the last 3 fiscal years, the 

number of lost HEC cutter days has been nearly equivalent to three HECs 

being out of service each year.48

In addition, MEC lost cutter days more than doubled from fiscal year 2006 

to fiscal year 2010, peaking at 276 lost cutter days for both 210-foot and 

270-foot MECs combined. Coast Guard officials attributed the peak in 

MEC lost cutter days to their deployment to Haiti for humanitarian 

operations. Coast Guard officials said that, because of their age, all 10 

MECs deployed to Haiti suffered severe, mission-affecting casualties, 

which limited their capacity to conduct the mission. According to the 

maintenance manager for the MEC fleet, the Haitian earthquake 

deployment was a wakeup call for the Coast Guard because it 

demonstrated that the Coast Guard’s legacy vessel fleet had been 

operating with a false sense of readiness because, prior to that incident, 

the legacy fleet had not been recently challenged to surge assets. 

 

45The Coast Guard tracks lost cutter days for HECs and MECs because they are 

deployed for up to 3 months at a time. The Coast Guard measures PBs’ performance in 

hours since they are deployed for no more than 5 days at a time. 

46The Coast Guard did not have MEC lost cutter day data available for fiscal year 2005. 

47According to Coast Guard guidance, HECs and MECs are expected to operate 185 days 

away from home port each year to conduct missions, which equals 3,330 operational 

hours. See Commandant Instruction 3100.5B (June 29, 2007). 

48Coast Guard officials attributed the majority of HEC lost cutter days to propulsion system 

casualties. For example, the Coast Guard reported that catastrophic engine failure 

rendered the HECs Dallas, Chase, and Gallatin inoperative for 1 year, 1 year and 5 

months, and 2 years, respectively, during this time period. The Coast Guard 

decommissioned the Chase on May 13, 2011, and the Dallas on March 30, 2012. 
 

Page 33 GAO-12-741 Coast Guard Legacy Vessels 

Figure 9: Lost Cutter Days for Legacy High and Medium Endurance Cutters, Fiscal Years 2006 through 2011

Coast Guard headquarters officials reported that the declining operational 

capacity of its legacy vessel fleet—particularly the HECs and MECs—has 

been a prime contributor to the Coast Guard’s declining ability to meet its 

mission needs and to intercept threats beyond U.S. territorial waters. 

Specifically, Coast Guard headquarters officials reported that the HEC 

fleet has become increasingly unreliable and has degraded the Coast 

Guard’s capacity to conduct missions, particularly drug interdiction 

missions.49

 

49Coast Guard headquarters officials reported that the total amount of drugs interdicted 

depends on various factors, such as estimated drug flow rate and vessel operational 

hours and availability. The decline in cocaine interdicted by HECs was parallel to the 

decline in counter-drug mission hours completed from fiscal years 2007 through 2010.

For example, according to Coast Guard headquarters 

officials, the number of hours the HEC fleet spent on drug interdiction 

missions declined 65 percent, or nearly 13,000 hours, from fiscal year 

2007 to fiscal year 2010 largely as a result of increased unscheduled 

Reduced Operational Capacity 

Hinders Mission Performance
 

Page 34 GAO-12-741 Coast Guard Legacy Vessels 

maintenance. Coast Guard headquarters officials also noted that the 

decreased operational capacity of the HEC has decreased HEC 

availability to conduct missions in Alaska. Coast Guard headquarters 

officials noted that the HECs and their replacement NSCs are the only 

vessels in its fleet capable of safely launching and recovering small boats 

and aircraft in the Bering Sea. As a result, lost HEC operational capacity 

has led the Coast Guard to reassign HECs, as well as three MECs, from 

missions in other geographic areas to provide additional coverage to 

missions in Alaska.

Coast Guard headquarters officials stated that the decline in MEC 

operational hours has most significantly affected the Coast Guard’s ability 

to conduct its alien interdiction mission because the MEC fleet is the 

primary platform for carrying out this mission. For example, Coast Guard 

data show the MECs’ operational hours in the alien interdiction mission 

declined 40 percent, or 12,000 hours, from fiscal years 2007 to 2011. 

Further, Coast Guard headquarters officials reported that the number of 

migrants interdicted by the MEC fleet declined from 2,200 to 1,200 during 

this period and noted that increased unscheduled maintenance had been 

a key contributing factor.

Coast Guard officials reported that delays in the delivery of replacement 

vessels will require the Coast Guard to continue to operate its legacy 

vessels beyond their remaining service lives and result in a widening 

capacity gap.50

 

50The Naval Engineering Manual defines “remaining service life” as the time period during 

which no major expenditures will be required for hull and structural repairs or 

modernizations, or for machinery or system modernizations based solely on the vessel’s 

capability to meet existing mission requirements.

The officials added that as the legacy vessels operate 

further past their service lives, they expect these vessels to become 

increasingly unreliable, have increasingly diminished operational capacity, 

and be increasingly costly and challenging to maintain. Coast Guard 

acquisition documents, assessments, and maintenance managers have 

noted that past sustainment efforts have shown little correlation between 

large maintenance expenditures and extended improvements in 

operational capacity or reduction in maintenance costs. Nonetheless, 

Coast Guard officials said that the significant delays in delivering some 

replacement vessels, and the declining condition and capacity of its 

legacy vessel fleet, warrant further action to ensure the legacy vessels 

The Operational Capacity 

Gap is Expected to Widen
 

Page 35 GAO-12-741 Coast Guard Legacy Vessels 

remain operational until their decommissioning so that the Coast Guard 

can better achieve its missions. Coast Guard officials reported that they 

are determining potential future actions, including additional 

refurbishment of MEC vessels, which we discuss later in this report. The 

Coast Guard reported, and our analysis of Coast Guard documents 

confirms, that the MEC fleet will be most affected by delays in delivery of 

replacement vessels. In particular, according to current plans, some of 

the 270-foot MECs are to remain in service as late as 2033—up to 21 

years beyond their expected service lives—before they are replaced by 

OPCs.

In the next few years, the operational capacity gap that exists for the HEC 

and PB fleets is expected to increase because of actions the Coast Guard 

plans to take to reduce legacy fleet expenditures in an effort to better 

balance the needs of the legacy fleet with the acquisition of replacement 

vessels. For example, to reduce legacy fleet maintenance expenditures, 

the Coast Guard plans to decommission the next two most degraded and 

costly HECs in fiscal year 2013 and anticipates that this will allow it to 

save about $17 million.51

In addition to accelerating the pace of the decommissioning of some 

HECs, the Coast Guard also did not request funds for its “High 

Tempo/High Maintenance” (HTHM) program for fiscal year 2013 to save 

$33.5 million. HTHM was designed to mitigate the loss of 8 PBs to hull 

A senior maintenance official reported that 

decommissioning these HECs may also reduce maintenance 

expenditures in the long term. Coast Guard officials acknowledged that 

this accelerated HEC decommissioning will result in operational capacity 

gaps in the near term, but noted that the delivery of the fourth NSC in 

fiscal year 2014 and the fifth NSC in fiscal 2016 would mitigate these 

gaps.

 

51By decommissioning 2 HECs in fiscal year 2013, the Coast Guard will have 

decommissioned a total of 5 of 12 HECs before their replacements have fully entered into 

service. 

Near Term Increase in Capacity 

Gap Expected for the HEC and 

PB Fleets
 

Page 36 GAO-12-741 Coast Guard Legacy Vessels 

failure and 6 to deployment to Bahrain (14 PBs total)52

While the delivery of replacement vessels is ongoing to help mitigate the 

operational capacity gap that exists for the legacy HEC and PB fleets, the 

significant delay in the delivery of the OPC will result in a longer-term 

operational capacity gap for the legacy MEC fleet. According to Coast 

Guard documents, the combined MEC fleet, with 27 vessels, is the 

largest class of major cutters in terms of numbers of vessels and— 

because of its size and versatility—is relied upon to conduct a wide 

variety of missions far from shore. Coast Guard officials stated that the 

role of the MEC fleet has become even more important in recent years 

given the declining condition of the HEC fleet. In particular, Coast Guard 

officials report increasingly using MECs to recover lost HEC capacity. For 

example, the officials reported shifting MEC operational hours from 

alien/migrant interdiction missions to drug interdiction missions. According 

to these Coast Guard officials, a loss of MEC capability puts performance 

goals at risk. Specifically, the Coast Guard officials reported that the 

continued decline of legacy fleet operational hours would, among other 

things, likely result in more cocaine and illegal migrants reaching U.S. 

by doubling the 

operational hour output of 8 PBs through the use of double crews and 

increased maintenance over the last 5 fiscal years. Coast Guard officials 

reported that all 8 HTHM PBs will return to their pre-HTHM operational 

tempo on HTHM’s termination at the end of fiscal year 2012. Coast Guard 

officials stated that termination of the HTHM program is to coincide with 

the commissioning of seven FRCs, thus mitigating any lost PB capacity. 

However, our analysis shows that without HTHM, a capacity gap 

equivalent to the operational hours of 10 PBs will remain even after the

seventh FRC is commissioned, which is projected to occur at the end of 

fiscal year 2013. This is because after the commissioning of the seventh 

FRC, the capacity gap would decrease equivalent to the operational 

hours of 7 PBs—but because the Coast Guard also plans to 

decommission 3 PBs in fiscal year 2013, the capacity gap would grow to 

be equivalent to the operational hours of 10 PBs. 

 

52As we reported in June, 2008, the Coast Guard decommissioned all eight 123-foot PBs 

in fiscal year 2007 due to structural failure of their hulls as a result of their conversion from 

110-foot to 123-foot PBs. In addition, beginning in March 2003, six 110-foot patrol boats 

have contributed to the joint U.S. Navy and Coast Guard National Fleet Policy and the 

Coast Guard’s general defense mission by operating in the Persian Gulf. See GAO, Coast 

Guard: Strategies for Mitigating the Loss of Patrol Boats Are Achieving Results in the Near 

Term, but They Come at a Cost and Longer Term Sustainability Is Unknown, GAO-08-660 

(Washington, D.C.: June 23, 2008).

Longer-Term Capacity Gap 

Expected for the MEC Fleet
 

Page 37 GAO-12-741 Coast Guard Legacy Vessels 

shores and a decreased capability to protect U.S. waters and fish stocks 

from the encroachment of foreign fishing vessels.

The Coast Guard also reported that the MECs’ engineering systems are 

becoming increasingly obsolete, expensive, and difficult to maintain, 

which will continue to challenge mission performance. For example, 

according to a Coast Guard senior commander, because of expectations 

of diminished capacity of the MEC fleet, the Coast Guard—which relies 

heavily on the MEC for conducting missions—will need to make difficult 

choices regarding mission prioritization.

Figure 10 shows that the MECs are rapidly approaching or already have 

passed the end of their expected service lives and, because of delays in 

the delivery of the replacement OPCs, the capacity gap will continue to 

grow. As previously discussed, the Coast Guard is refurbishing every 

MEC through a MEP with a goal to increase the MECs’ reliability and 

reduce longer-term maintenance costs. Senior Coast Guard officials 

responsible for the project reported that the MEP may also provide up to 

15 years of additional service life to the MEC fleet. Third-party 

assessments show that the MEP has improved the performance of MECs 

that have completed the project;53

 

53The Coast Guard has contracted with the Department of Transportation, Research and 

Innovative Technology Administration’s Volpe National Transportation Systems Center to 

conduct annual assessments of the effectiveness of the MEP.

however, the Coast Guard 

acknowledges that the MEP will not entirely bridge the gap between the 

estimated end of MEC service life and the projected OPC deliveries. 

Since fiscal year 2007, the expected delivery dates for the OPCs have 

slipped by 13 years and are now well outside the MEC class’s designed 

service life or any ancillary service life gains that might be achieved by 

the MEP. Specifically, as a result of OPC delays, some of the 270-foot 

MECs are now to remain in operation until 2033, up to 21 years beyond 

their remaining service lives. Even if the most optimistic projections were 

to be true and the MEP were to extend MECs’ service lives by 15 years, 

the MECs would remain in service increasingly beyond the end of their 

service lives before full recapitalization by the OPC fleet. The largest 

MEC capacity gap would occur from fiscal years 2026 through 2033. 

Coast Guard officials estimate that MEP upgrades may extend each 

vessel’s service life up to 15 years, but they noted that this estimate is 

optimistic and has no basis in firm engineering studies. Therefore, figure 
 

Page 38 GAO-12-741 Coast Guard Legacy Vessels 

10 shows MECs’ end of service lives if the MEP were to provide 5, 10, or 

15 years of additional service. 

Figure 10: Comparison of the Projected End of Service Lives for the MEC Fleet with the Planned OPC Delivery Dates, as of 

May 2012 

Note: This analysis is based on the Coast Guard’s existing fleet of 27 MECs, each of which is 

identified by class and name. Coast Guard officials also reported that there is no correlation between 

the end of a vessel’s service life and its decommissioning date. 

According to senior Coast Guard planners, MEC operating requirements 

will be unachievable given fiscal and resource constraints without the 

Coast Guard undertaking a service life extension project in the future. For 

example, a senior Coast Guard maintenance official estimated that the 
 

Page 39 GAO-12-741 Coast Guard Legacy Vessels 

Coast Guard would need to raise annual depot-level maintenance funding 

for the MEC class by 300 percent for the Coast Guard to be able to 

maintain the MECs until their projected decommissioning dates. Coast 

Guard officials reported that a further refurbishment of the MECs will be 

necessary to meet operational requirements and that the Coast Guard is 

in the early stages of developing plans for addressing the expected gap 

between remaining MEC fleet service lives and the delivery of the OPC 

replacements. Officials from the Office of Naval Engineering reported that 

MEC condition is to be assessed over the next 2 fiscal years and that 

they plan to use MEC assessments to develop alternatives and present 

their recommendations to the Cutter Resource Council for approval. 

Because the Coast Guard is in the early stages of developing this plan, it

is too soon evaluate it.

Coast Guard efforts to sustain its legacy vessel fleet and meet mission 

requirements until the replacement vessels are delivered are also 

challenged by uncertainties in two areas. First, the future mix of vessels 

(fleet mix) is uncertain. The Coast Guard’s fiscal years 2013-to-2017 5-

year Capital Investment Plan does not allocate funds for the acquisition of 

the last two replacement NSCs, as called for by the program of record.54

If funds are not requested for these replacement vessels or their 

deliveries are delayed, it is unclear how this could affect the 

decommissioning schedule of the HECs, the last of which the Coast 

Guard currently plans to decommission in fiscal year 2023. Second, it is 

unclear if the Coast Guard will implement a rotational crew concept for 

the replacement NSCs. The Coast Guard’s program of record assumes 

that the new NSC fleet will achieve more operational capacity than the 

legacy HEC fleet (230 versus 185 days away from homeport each year), 

but this assumption is predicated on implementation of a crew rotation 

concept in which the Coast Guard would have four sets of crew staff and 

operate three NSCs on a rotating basis to increase the vessels’ 

operational time. However, we reported in May 2012 that the Coast 

Guard is reevaluating this rotational crewing concept because initial 

analysis indicates it may be difficult and too costly to achieve.55

 

54The Capital Investment Plan projects Coast Guard’s acquisition priorities for the next 5 

years assuming the limits of budgetary growth set by the Budget Control Act of 2011, P.L. 

112-25. We reported in July 2011 that the Capital Investment Plan is subject to change 

annually (see 

Coast 

GAO-11-743). 

55GAO, Homeland Security: Observations on the Coast Guard’s and the Department of 

Homeland Security’s Fleet Studies, GAO-12-751R (Washington, D.C.: May 31, 2012).

Uncertainties Further 

Challenge Sustainment Efforts
 

Page 40 GAO-12-741 Coast Guard Legacy Vessels 

Guard officials reported that even if the NSCs are not able to achieve 230 

operational days away from homeport, the Coast Guard does not plan to 

keep the HECs in service longer than current decommissioning schedules 

show.56 However, should the NSCs be unable to achieve 230 days away 

from homeport and given its historic reliance on HECs to conduct certain 

missions, including the drug interdiction and Alaska missions, it is 

uncertain how the Coast Guard would be able to fully meet its mission 

goals without a delay in HEC decommissioning that would necessitate 

further HEC sustainment.57

As previously noted, the Coast Guard has established operational hour 

targets for the number of hours its vessels are expected to conduct 

operations or missions each fiscal year. Coast Guard headquarters 

officials reported that the Coast Guard uses these targets to inform 

operational planning and force management decisions, such as setting 

mission performance targets and corresponding resource allocations.58

Specifically, senior Coast Guard officials from the Office of the Deputy 

Commandant for Operations told us that they set overall mission 

performance targets on an annual basis. These officials also reported 

that, in collaboration with the area commands, headquarters issues 

guidance prescribing the operational hours that Coast Guard commands 

are to achieve within each mission area.59

 

56However, Coast Guard headquarters officials also reported that the agency is in the 

midst of a 3-year, $4 million study—to be completed in 2013—to develop potential 

maintenance and sustainment strategies based on assessments and engineer design 

analyses on the HECs. The officials added that the study results are to inform 

development of maintenance availability packages, and development and implementation 

of engineering changes to improve HEC reliability until decommissioning.

According to these officials, 

this guidance serves as a projection of the forces necessary to achieve 

the performance targets within each mission area and is based on 

57The Coast Guard recently revised the HEC decommissioning schedule to delay the 

decommissioning of the last HEC from 2020 to 2023 in its fiscal years 2013-2017 Capital 

Investment Plan. 

58Coast Guard headquarters officials also reported that vessels’ operation hour targets 

form the basis of their funding levels and Coast Guard fuel models.

59Coast Guard statutory missions are (1) Ports, Waterways, and Coastal Security; (2) 

Drug Interdiction; (3) Migrant Interdiction; (4) Living Marine Resources; (5) Other Law 

Enforcement; (6) Marine Safety; (7) Search and Rescue; (8) Marine Environmental 

Protection; (9) Defense Readiness; (10) Aids to Navigation; and (11) Ice Operations.

Operational Hour Targets for 

Legacy Vessels Are Unrealistic 
 

Page 41 GAO-12-741 Coast Guard Legacy Vessels 

budgeted operational capacity for each asset.60

Senior Coast Guard headquarters officials reported that when setting 

overall mission performance targets, they consider various factors 

including continuous improvements and initiatives, expected asset 

capability, past performance, and external factors. However, they also 

stated that when setting these targets they assume that if assets achieve 

their planned operational hour targets, the Coast Guard should generally 

meet or exceed its performance targets for each mission. For example, 

senior officials from the Office of the Deputy Commandant for Operations 

reported on multiple occasions that the Coast Guard adjusts its mission 

performance targets annually based on each vessel class’s capacity with 

the assumption that each vessel will operate at 100 percent of its planned 

operating time. Similarly, area commanders also reported allocating their 

resources based on the assumption that their assets will achieve 100 

percent of their operational hour targets.

Operational commanders 

reported also using this guidance to allocate their resources by 

determining the number of operational hours that the assets under their 

command must achieve (i.e., targets) within each mission area. 

However, the legacy fleet has increasingly fallen below operational hour 

targets in recent years. The annual target for the HECs and MECs is 

3,330 operational hours; however, these legacy vessel classes have 

consistently fallen short of this target in each of the last 5 to 7 fiscal years. 

Moreover, in March 2012 the Commandant of the Coast Guard testified 

before Congress that HECs are achieving only 70 percent of their 

operational hour targets and are sailing with major debilitating casualties 

more than 50 percent of the time.61

 

60Coast Guard officials stated that Coast Guard areas may request adjustments to 

headquarters’ operational hour guidance based on intelligence, achieved performance to 

date, or the emergence or disappearance of threats. 

In addition, Coast Guard officials at 

headquarters and in both area commands reported that the decline in 

legacy vessel operational capacity has challenged the Coast Guard’s 

ability to meet its mission performance targets. Coast Guard operational 

commanders reported taking actions to mitigate the effect of declining 

legacy vessel capacity, such as diverting vessels tasked to other missions 

61U.S. Coast Guard Fiscal Year 2013 Budget: Hearing Before Senate Committee on 

Commerce, Science and Transportation, Subcommittee on Oceans, Atmosphere, 

Fisheries, and Coast Guard, 2,112th Congress (March 7, 2012) (Oral Testimony of 

Admiral Robert J. Papp, Jr., Commandant, U.S. Coast Guard).
 

Page 42 GAO-12-741 Coast Guard Legacy Vessels 

to help complete operations. For example, an operational planner from 

the Coast Guard’s Pacific Area Command said that legacy vessels have 

been temporarily deployed outside his command on a recurring basis to 

mitigate the effect of legacy vessel casualties on higher-priority missions 

elsewhere. In these instances, he said that he was challenged to meet 

certain mission performance targets.

The Coast Guard has not revised the operational hour guidance for its 

HEC, MEC, or PB classes in at least 8 years, despite declining 

operational capacity and expectations that capacity will continue to 

decline in the future. As a result, legacy vessel operational hour targets 

are not realistic. In addition, because the Coast Guard’s overall mission 

performance targets are based, at least in part, on these vessels 

operational hour targets, the Coast Guard faces increased risk to its 

ability to meet these performance targets. OMB guidance states that 

agencies should set performance targets that are ambitious and 

achievable given program characteristics and should consider 

circumstances, including past performance, and may annually adjust 

targets as these factors change.62

 

62OMB, Program Assessment Rating Tool Guidance Number 2007-2, (Washington, D.C.: 

January 29, 2007).

Coast Guard officials reported that they 

were cognizant of OMB guidance and have considered the merits of 

changing the operational hour targets, but have elected not to do so 

because the targets are the foundation of the Coast Guard’s mission 

requirements baseline. In this way, officials said, altering legacy vessel 

operational targets would (1) lower the mission performance and planning 

standards that must be met to ensure that the Coast Guard achieves its 

missions, (2) reduce the funding available to support legacy vessels 

because budget models are based on resource hour targets, and (3) 

diminish the Coast Guard’s ability to effectively conduct trend analysis of 

past performance because of shifting baselines and targets. However, our 

analysis of performance data and testimonial evidence from senior Coast 

Guard officials shows that the Coast Guard’s mission performance and 

planning standards have gone unmet because of declining legacy vessel 

operational capacity. For example, operational commanders reported 

routinely missing mission performance targets because of legacy vessel 

casualties.
 

Page 43 GAO-12-741 Coast Guard Legacy Vessels 

Because it sets mission performance targets and allocates resources on 

the assumption that legacy vessels will achieve 100 percent of 

operational hour targets, the Coast Guard’s allocation of resources is not 

realistic. Coast Guard guidance states that, in accordance with OMB 

guidance, one should not expect to achieve every target every year. 63

However, because the Coast Guard uses vessels’ operational hour 

targets as an input for setting agency-wide performance targets and to 

allocate area resources, consistent achievement of its performance 

targets is at increased risk. The Coast Guard could choose to adjust its 

legacy fleet targets for annual planning purposes, but retain the 

underlying assumptions of its budget and fuel models to ensure that the 

operational and maintenance needs of its legacy vessel fleet are still met.

Finally, we have previously reported that the Coast Guard has adjusted 

legacy vessel operational hour targets in the past for its PB fleet. For 

example, in June 2008, we reported that the Coast Guard had revised PB 

operational hour targets in 2004 to account for its greater mission 

responsibilities since the terrorist attacks of September 11, 2001.64 By 

adjusting legacy fleet operational hour targets annually to reflect their 

actual capacity as evidenced by historic performance and not desired 

capacity, the Coast Guard would be better able to set achievable and 

realistic performance targets and plan how to execute its mission by 

ensuring it allocates legacy vessel operational hours more realistically.

In each of the past 2 fiscal years, the Coast Guard has received 

supplemental funding to address its growing legacy vessel fleet 

maintenance needs. Unrealistically low Standard Support Levels have 

been one factor contributing to this need. However, in the current, 

constrained fiscal environment, there are no guarantees that such 

supplemental funding will continue to be available to meet the Coast 

Guard’s legacy vessel fleet maintenance expenditures, which are likely to 

continue to rise as vessel conditions continue to decline. Thus, it is 

especially important for the Coast Guard to develop high-quality and 

reliable cost estimates that clearly convey to decision makers the 

potential risk of costs exceeding funding levels so that senior Coast 

Guard leadership and Congress can make more informed funding 

 

63U.S. Coast Guard, Standard Operational Planning / Global Force Management Process 

Guide.

64See GAO-08-660. 

Conclusions
 

Page 44 GAO-12-741 Coast Guard Legacy Vessels 

decisions. In particular, the Coast Guard’s annual vessel maintenance 

cost estimation process could be strengthened by better conforming to 

cost estimating best practices, particularly with respect to 

comprehensiveness, documentation, and accuracy.

The operational capacity of the legacy vessel fleet has been in decline, as 

highlighted by the Coast Guard’s generally failing to meet operational 

hour targets for these vessels over the past 7 fiscal years. Further, delays 

in deploying some of the replacement vessels will lead to a growing 

operational capacity gap that could persist for some years to come. 

Despite the growing operational capacity gap, the Coast Guard has not 

revised legacy vessel operational hour targets to reflect this diminishing 

capacity. As a result, the Coast Guard’s legacy vessel fleet operational 

hour targets—which are used to inform the Coast Guard’s mission 

planning processes—are not realistic. In addition, because the Coast 

Guard’s mission performance targets are based, in part, on operational 

hour targets, they risk not being achievable, as called for by OMB 

guidance. Given historic performance trends and expectations of a 

widening capacity gap, it is important that the Coast Guard realistically 

assess the operational capacity of its legacy vessel classes to ensure the 

operational performance goals and missions are achievable. By adjusting 

legacy vessel fleet operational hour targets annually to reflect actual 

capacity, as evidenced by historic performance, the Coast Guard would 

be better able to plan its missions by ensuring it allocates legacy vessel 

operational hours more realistically.

We recommend that the Secretary of Homeland Security direct the 

Commandant of the Coast Guard to take the following two actions:

To strengthen the comprehensiveness, documentation, and accuracy of 

the Coast Guard’s annual depot-level maintenance cost estimates for its 

legacy vessel fleet, ensure that the Coast Guard’s annual depot-level 

maintenance cost estimates conform to cost-estimating best practices.

To help ensure that the Coast Guard’s planning processes result in the 

effective allocation of available resources and to better ensure it sets 

achievable performance goals, adjust legacy vessel fleet operational hour 

targets to reflect actual capacity, as appropriate by class.

Recommendations for 

Executive Action
 

Page 45 GAO-12-741 Coast Guard Legacy Vessels 

We requested comments on a draft of this report from the Secretary of 

Homeland Security and the Coast Guard. In its written comments, 

reprinted in appendix V, DHS concurred with the first recommendation, 

but the actions DHS reported that the Coast Guard has taken or plans to 

take may not fully address the intent of this recommendation. DHS did not 

concur with the second recommendation. In addition to the DHS letter, 

the Coast Guard provided technical comments that we have incorporated, 

as appropriate. 

DHS concurred with the first recommendation, but the actions DHS 

reported that the Coast Guard has taken or plans to take may not fully 

address the intent of this recommendation. Specifically, in its letter, DHS 

raises three issues that could limit the Coast Guard’s implementation of 

the recommendation. The first issue concerns DHS’s position that cost 

estimating best practices are most applicable to new asset acquisitions.

We disagree. We assessed the Coast Guard’s vessel maintenance cost 

estimating process using the three best practices from our cost estimating 

guide that are intended to be applicable to programs and assets in all 

stages of their life cycles, including maintenance and support. The 

second issue DHS raised is that although sustainment and maintenance 

costs for individual vessels are uncertain and challenging to estimate, the 

Coast Guard mitigates these uncertainties through centralized 

management. We believe that even given the Coast Guard’s centralized 

management of funding, it is especially important in the face of such 

uncertainty to follow cost estimating best practices. Following these best 

practices can help ensure that cost estimates are comprehensive and 

accurate, which in turn can help ensure that funds will be available when 

needed. The third issue DHS raised is that, given current fiscal 

constraints, the Coast Guard will focus on improvements that do not 

require additional resources. While we agree that federal resources are 

limited, aligning the cost estimating process for legacy vessel 

maintenance with best practices would not necessarily require a large 

investment of resources. In fact, having a well documented cost 

estimating process and using accurate historical data should enable the 

Coast Guard to operate more efficiently. 

DHS did not concur with the second recommendation that the Coast 

Guard adjust legacy vessel fleet operational hour targets to reflect actual 

capacity, as appropriate by class. DHS stated that the Coast Guard has 

already taken actions to meet the maintenance challenges associated 

with its aging vessel fleet and strives to meet the annual operational 

targets associated with those vessels. DHS added that while the legacy 

vessel fleet has not been able to meet operational hour targets because 

Agency Comments 

and Our Evaluation
 

Page 46 GAO-12-741 Coast Guard Legacy Vessels 

of maintenance challenges, reducing the operational hour targets would 

fail to fully utilize those assets not impacted by maintenance issues. We 

disagree. As noted in this report, while senior Coast Guard officials 

reported that the Coast Guard adjusts its mission performance targets 

annually, it does not adjust legacy vessel operational hour targets 

annually. These officials also stated that Coast Guard’s mission 

performance targets are based on each vessel class’s capacity, with the 

assumption that each vessel will operate at 100 percent of its planned 

operating time. We do not believe that reducing the operational hour 

targets would result in a failure by the Coast Guard to fully utilize assets 

not impacted by maintenance challenges. Moreover, as noted in this

report and as DHS acknowledges in its letter, the legacy vessel fleet has 

not been able to meet operational hour targets in recent years. Despite 

declining operational capacity and expectations that capacity will continue 

to decline in the future, the Coast Guard has not revised the operational 

hour guidance for its legacy vessel fleet in at least 8 years. Given that (1) 

OMB guidance states that agencies should set targets that are 

achievable, (2) operational decisions are being made on the assumption 

that legacy vessels will achieve 100 percent of operational hour targets, 

and (3) the Coast Guard has adjusted legacy vessel operational hour 

targets in the past, we continue to believe that this recommendation has 

merit.

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

Security and the Commandant of the Coast Guard. This report is also 

available at no charge on GAO’s web-site http://www.gao.gov.

If you or your staff have any questions, please contact me at 

(202) 512-9610 or caldwells@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Staff acknowledgments are provided in appendix VI. 

Stephen L. Caldwell

Director

Homeland Security and Justice
 

Page 47 GAO-12-741 Coast Guard Legacy Vessels 

List of Congressional Requesters

The Honorable Susan M. Collins

Ranking Member

Senate Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Lisa Murkowski

United States Senate

The Honorable John L. Mica

Chairman

House Committee on Transportation and Infrastructure

House of Representatives

The Honorable Frank A. LoBiondo

Chairman

Subcommittee on Coast Guard and Maritime Transportation

House Committee on Transportation and Infrastructure

House of Representatives

The Honorable Candice S. Miller

Chairwoman

Subcommittee on Border and Maritime Security

House Committee on Homeland Security

House of Representatives 
Appendix I: Scope and Methodology

Page 48 GAO-12-741 Coast Guard Legacy Vessels 

To determine how the condition of the Coast Guard’s fleet of legacy 

vessels changed from fiscal years 2005 through 2011, and to identify the 

key actions the Coast Guard has taken to improve the condition of the 

legacy fleet, we analyzed data the Coast Guard reported it used to 

determine and track the condition of its legacy fleet of vessels over each 

of these fiscal years. Of the four measures and supporting data the Coast 

Guard provided, the Coast Guard’s Office of Naval Engineering reported 

that it considers Operational Percent of Time Free from Major Casualties 

(OpPOTF) to be primary measure for tracking, capturing, and 

communicating the condition of the legacy vessel fleet from fiscal years 

2005 through 2011. We compared vessel OpPOTF against established 

Coast Guard standards. We assessed the reliability of these data by 

reviewing the Coast Guard’s data management practices and questioning 

knowledgeable officials about the data and the systems that produced the 

data. We determined the data to be sufficiently reliable for the purposes 

of this report. We also interviewed relevant Coast Guard headquarters 

officials responsible for maintaining the legacy cutter fleet to obtain 

information on the physical condition of the legacy vessels and actions 

the Coast Guard reported as key actions to improve the physical 

condition of the legacy fleet, including officials from the Coast Guard’s 

Office of Naval Engineering and Office of Cutter Forces. We also 

conducted site visits to five Coast Guard field locations where Coast 

Guard officials reported the legacy vessels were either homeported or 

undergoing maintenance and therefore available for us to observe the 

condition of the legacy vessels and to interview cognizant maintenance 

officials, operational commanders, and crew members. Specifically, we 

visited (1) the Pacific Area Command in Alameda, California; (2) the 

Atlantic Area Command in Portsmouth, Virginia; (3) the Coast Guard Yard 

in Baltimore, Maryland; (4) district and sector offices in Miami, Florida; 

and (5) the Coast Guard’s district office and Naval Engineering Support 

Unit in Seattle, Washington. The results of these visits are not 

generalizable to all Coast Guard field locations, but they did provide 

valuable insights on key maintenance and operational issues. We also 

reviewed relevant standards and program documentation, such as the 

Coast Guard’s Cutter Employment Standards and Acquisition Program

Baselines for legacy vessel sustainment programs.

To determine the key annual maintenance expenditure trends for the 

Coast Guard’s fleet of legacy vessels from fiscal years 2005 through 

2011, we obtained Coast Guard data on the total annual legacy vessel 

maintenance expenditures, including scheduled versus unscheduled 

expenditures, for maintaining the 378-foot high endurance cutters, the 

210-foot and 270-foot medium endurance cutters, and the 110-foot patrol 

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 49 GAO-12-741 Coast Guard Legacy Vessels 

boats. Senior Coast Guard officials in charge of legacy vessel 

maintenance confirmed that analyzing these data was the best way to 

understand key expenditure trends. We also obtained and analyzed 

Coast Guard data on budgeted annual maintenance funds for these four 

vessel classes for the same period of time to further identify any 

expenditure trends and to determine how expenditures for the respective 

legacy vessel classes compared with budgeted funds. We interviewed 

cognizant officials from Coast Guard headquarters and Atlantic and 

Pacific Commands to obtain their perspectives on data trends. We 

assessed the reliability of these data by reviewing the Coast Guard’s data 

management practices and interviewing knowledgeable officials about the 

data and the systems that produced the data. We determined the data to 

be sufficiently reliable for the purposes of this report. To determine the 

extent to which the Coast Guard’s cost-estimating process follows 

established best practices, we analyzed documentation, such as the 

guidance the Coast Guard uses to conduct legacy vessel maintenance 

and to compute its annual legacy vessel maintenance budget, and 

compared the documentation with criteria for cost estimating best 

practices outlined in GAO’s Cost Estimating and Assessment Guide: Best 

Practices for Developing and Managing Capital Program Costs.

1

To determine the operational capacity of the Coast Guard’s legacy fleet 

and the extent to which the Coast Guard faces challenges in sustaining 

its legacy vessels and meeting mission requirements given delays in 

fielding the replacement vessels, we analyzed Coast Guard vessel data 

and measures that the Coast Guard reported were key indicators of the 

relationship between vessel maintenance condition and operational 

performance. These included operational hours and lost cutter days. For 

the operational hour data, we compared the documented performance 

with established Coast Guard targets for each legacy vessel class across 

each of the fiscal years. We assessed the reliability of these data by 

reviewing the Coast Guard’s data management practices and interviewing 

knowledgeable officials about the data and the systems that produced the 

data. On the basis of our assessments, we determined the data to be 

sufficiently reliable for the purposes of this report. We interviewed 

Finally, 

we interviewed cognizant Coast Guard officials to obtain information 

about the Coast Guard’s legacy vessel maintenance cost estimating 

methods.

 

1

GAO-09-3SP. 
Appendix I: Scope and Methodology

Page 50 GAO-12-741 Coast Guard Legacy Vessels 

cognizant Coast Guard headquarters officials, including maintenance 

officials from the Coast Guard’s Office of Naval Engineering, as well as 

officials responsible for budgeting and resources and for assessing and 

developing operational requirements for the legacy vessels. As previously 

noted, we conducted site visits to Coast Guard field locations to interview 

cognizant maintenance officials and operational commanders. We 

analyzed Coast Guard reports and recapitalization plans, including the 

Deepwater Implementation Plan, Cutter Capital Asset Management Plan, 

and various assessments of vessel condition. We evaluated the Coast 

Guard’s actions against Program Assessment Rating Tool Guidance

Number 2007-2 from the Office of Management and Budget.2

We conducted this performance audit from September 2011 through July 

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.















































 

2

OMB, Program Assessment Rating Tool Guidance Number 2007-2, (Washington, D.C.: 

January 29, 2007).
Appendix II: Comparison of the Capabilities of 

the Coast Guard’s Legacy Vessels with Those 

of Their Replacements 

Page 51 GAO-12-741 Coast Guard Legacy Vessels 

This appendix provides further details on how the capabilities of the Coast 

Guard’s legacy vessels compare with the planned capabilities of the 

replacement vessels.1 According to the Coast Guard, the replacement 

vessels are designed to perform the same missions as the legacy 

vessels, but with greater capabilities.2 Specifically, this appendix provides 

further details on how the high endurance cutters (HEC) compare with the 

national security cutters (NSC), how the medium endurance cutters 

(MEC) compare with the offshore patrol cutters (OPC), and how the 110-

foot patrol boats (PB) compare with the fast response cutters (FRC).

The Coast Guard plans to replace the HEC with the NSC. Coast Guard 

officials indicated that better aircraft command and communication 

capabilities are especially notable when comparing the NSC with the 

HEC. Table 3 provides a comparison of operational capabilities between 

the HEC and its replacement, the NSC.

 

1

None of the replacement vessels have completed initial operational test and evaluation, a 

major test event that identifies deficiencies by evaluating operational effectiveness during 

the execution of simulated operational missions. In advance of this testing, the Coast 

Guard has completed preliminary tests for the NSC and FRC, such as operational 

assessments, which the Coast Guard is using to mitigate risk and address problems 

during asset development prior to initial operational test and evaluation.

2

The Coast Guard plans for the NSC and the FRC to be able to perform marine safety 

missions that the 110-foot PB and HEC cannot. Also, the Coast Guard envisions the OPC 

as a flexible vessel that will be able to perform emergent missions.

Appendix II: Comparison of the Capabilities 

of the Coast Guard’s Legacy Vessels with 

Those of Their Replacements

The HEC and the NSC
Appendix II: Comparison of the Capabilities of 

the Coast Guard’s Legacy Vessels with Those 

of Their Replacements 

Page 52 GAO-12-741 Coast Guard Legacy Vessels 

Table 3: Comparison of Capabilities between the HEC and Its Replacement, the NSC 

Capability HEC NSC

Number in fleet Originally 12, now 9a 8 plannedb

Year first-in-class cutter commissioned 1967 2008 

Crew size 166 109 

Length 378 feet 418 feet 

Days away from homeport 185 days per year Up to 230 days per yearc

Maximum time at sea without 

reprovisioning 

45 days 60 days 

Range 14,000 nautical milesd 12,000 nautical miles 

Maximum speed 29 knotse 28 knots 

Patrol speed 12 knots 15 knots 

Draftf 19 feet 22 feet 

Seakeeping capabilities for normal 

operations 

Up to 13-foot seas Up to 13-foot seas

Intelligence gathering On-board intelligence gathering facility 

(cannot transmit classified data) and 

helicopter 

Secure information system for transmitting 

classified data, unmanned aircraft 

(planned), and helicopters 

Weapons Gun weapon system and close-in weapon 

system, four machine guns, and two 

countermeasure launching systems

Gun weapon system and close-in weapon 

system, six machine guns, and two 

countermeasure launching systems 

Ability to withstand a biological or chemical 

attack 

Yes Yesg

Aircraft command capabilities No comprehensive aircraft launch and 

recovery control center, one aircraft 

hangar, partially automated helicopter 

recovery system

Comprehensive aircraft launch and 

recovery control center, two aircraft 

hangars, partially automated helicopter 

recovery systemh

Small boat capabilities Carries two small boats and has two small 

boat recovery systems

Carries three small boats, and has one 

side-mounted small boat recovery system 

for one small boat and one stern-mounted 

small boat recovery system for two small 

boats

Source: GAO analysis of information provided by the Coast Guard.

a

The high endurance cutter fleet originally included 12 vessels, but the Coast Guard has 

decommissioned 3 since fiscal year 2011. 

b

As of July 2012, the Coast Guard had commissioned three NSCs. The Coast Guard’s fiscal year 

2013-2017 5-year Capital Investment Plan does not allocate funds for the acquisition of NSCs 7 and 

8, as called for by the program of record. 

c

To achieve 230 days away from homeport, the Coast Guard plans to use a “crew rotational concept” 

in which four crews staff and operate three cutters on a rotating basis. 

d

According to the Coast Guard, HECs can achieve a 14,000 nautical mile range only if they ballast 

their fuel tanks once the tanks are depleted, a procedure that is rarely undertaken. HECs have a 

range of 9,600 nautical miles under normal circumstances. 
Appendix II: Comparison of the Capabilities of 

the Coast Guard’s Legacy Vessels with Those 

of Their Replacements 

Page 53 GAO-12-741 Coast Guard Legacy Vessels 

e

According to the Coast Guard, the age and condition of the HECs, coupled with renovation and 

modernization modifications made to these vessels over the years, make many HECs unable to 

achieve a maximum speed of 29 knots. 

f

Draft refers to the depth of water needed to float the vessel. 

g

NSCs are outfitted with a Collective Protective System, which should allow continued operations in a 

contaminated environment. 

h

According to the Coast Guard, the HEC flight deck is certified to accommodate a multimission (HH65) helicopter, while the NSC flight deck is certified to accommodate a multimission helicopter and 

the larger medium-range recovery (HH-60) helicopter. 

The Coast Guard plans to replace the 210-foot and 270-foot MECs with 

the OPC. While the OPCs are in the initial stages of design, Coast Guard 

officials told us that they anticipate that the OPC’s speed, seakeeping, 

small boat capabilities, and ability to operate in a full spectrum of climate 

and environmental conditions will be especially notable in comparison 

with those of the MECs. Table 4 provides a comparison of operational 

capabilities between the 270-foot and 210-foot MECs and their 

replacement, the OPC.

Table 4: Comparison of Capabilities of the 270-foot and 210-foot MECs and their Replacement, the OPC 

Capability 210-foot MEC 270-foot MEC OPC 

Number in fleet 14 13 25 planned

Year first-in-class cutter 

commissioned 

1964 1983 2020 planned

Crew size 76 100 90 to 104, with additional 

detachments for aviation and 

intelligence support. Maximum 

accommodation for 120-126 

people.

Length 210 feet 270 feet To be determined

Days away from homeport 185 185 Up to 230 days per year 

Maximum time at sea without 

re-provisioning

21 days 21 days 45 days to 60 days 

Range 6,100 nautical miles at 13 knots 9,900 nautical miles at 12 knots 8,500 to 9,500 nautical miles at 

14 knots 

Maximum speed 18 knots 19.5 knots 22 to 25 knots 

Patrol speed 6 to 8 knots 12 knots 10 knots 

Draft 11 feet 6 inches 14 feet To be determined

Seakeeping Launch and recover boats in up 

to 8-foot seas. Launch and 

recover helicopters in up to 4-

foot seas

Launch and recover boats in up 

to 8-foot seas. Launch and 

recover helicopters in up to 8-

foot seas

Launch and recover boats and 

helicopters in up to 13-foot seas

The MECs and the OPC
Appendix II: Comparison of the Capabilities of 

the Coast Guard’s Legacy Vessels with Those 

of Their Replacements 

Page 54 GAO-12-741 Coast Guard Legacy Vessels 

Capability 210-foot MEC 270-foot MEC OPC 

Intelligence gathering Secure information system for 

transmitting classified data

Prototype carry-on signals 

exploitation system aboard 

limited number of vessels and 

secure information system for 

transmitting classified data

Carry-on signals exploitation 

system (objective), secure 

information system for 

transmitting classified data, and 

unmanned aircraft

Ability to withstand a biological 

or chemical attack

No Yes Yes

Weapons Three machine guns and small 

arms 

Gun weapon system, fire control 

radar, decoy launching system; 

four machine guns, and small 

arms 

Gun weapon systems, multimode radar (objective) electrooptical sighting system, decoy 

launching system, and two 

stabilized small arm mounts 

with small arms

Aircraft command capabilities Helicopter capture system, no 

hangar

Helicopter capture system and 

one hangar for an MH-65 

helicopter

One hangar for a H-65 

helicopter (threshold) or H-60/H65/H60R helicopter (objective) 

and a future unmanned aircraft 

system space/weight/power 

(threshold) 

Small boat capabilities Two side-launching dual point 

davits for the two small boatsa One side-launching dual point 

davit starboard side for one 

small boat and one articulated 

single point davit on the port 

side of the stern for a second 

small boat

Two side-launched small boats 

(threshold) or three sidelaunched small boats (objective)

Source: GAO analysis of information provided by the Coast Guard.

a

A davit is the mechanical system used to lower a vessel’s small boat into the water. 

The Coast Guard plans to replace the 110-foot PB with the FRC. Coast 

Guard officials told us that the better seakeeping, communications, and 

small boat capabilities are especially notable when comparing the FRC 

with the PB. Table 5 provides a comparison of operational capabilities 

between the 110-foot PB and its replacement, the FRC.

The PB and the FRC
Appendix II: Comparison of the Capabilities of 

the Coast Guard’s Legacy Vessels with Those 

of Their Replacements 

Page 55 GAO-12-741 Coast Guard Legacy Vessels 

Table 5: Comparison of Capabilities of the 110-foot PB and Its Replacement, the FRC

Characteristic 110-foot PB FRC

Number in fleet 41a 58 plannedb

Year first-in-class cutter commissioned 1986 2012

Crew size 16 24 

Length 110 feet 154 feet

Operational tempo/days away from 

homeport

1,800 operational hours per year 2,500 operational hours per year

Maximum time at sea without 

reprovisioning

5 days 5 days

Range 1,900 nautical miles at 15 knots 2,500 nautical miles at 15 knots

Maximum speed 28 knots 28 knots

Patrol speed 15 knots 18 knots

Draft 7.5 feet 10 feet

Seakeeping capabilities for operations Up to 8-foot seas Up to 13-foot seas

Intelligence gathering No No

Weapons One cannon crew-served weapon and two 

machine guns

One cannon gyro-stabilized remote 

operated weapon with an optical targeting 

sensor and four machine guns

Ability to withstand a biological or chemical 

attack

No No

Aircraft command capabilities Not flight deck equipped Not flight deck equipped

Small boat capabilities One 18-foot rigid hull inflatable boat with 

seating for 8 crew, 28 knots maximum 

speed, handheld communications, and a 

single point davit launch system

One small boat with seating for 11 crew, 40 

knots maximum speed, communications, 

stern ramp launch and recovery, integrated 

radar and electronic charting, and 200 

nautical miles range capable for over-thehorizon operations

Source: GAO analysis of information provided by the Coast Guard.

a

The 110-foot PB fleet originally included 49 vessels. The Coast Guard converted 8 of the 110-foot 

PBs to 123-foot PBs, but discontinued further conversions in 2005 and decommissioned the 123-foot 

PBs in 2007 because they were experiencing technical difficulties, such as hull buckling, and were 

not able to meet post-September 11, 2001 mission requirements. 

b

As of May 2012, the Coast Guard has commissioned one FRC. 
Appendix III: Further Information on Condition 

and Costs of the Coast Guard’s Legacy Vessel 

Fleet 

Page 56 GAO-12-741 Coast Guard Legacy Vessels 

This appendix provides further details on the condition and costs of the 

Coast Guard’s HEC, MEC, and PB fleet of legacy vessels from fiscal 

years 2005 through 2011. In particular, this appendix summarizes 

condition and cost information for each legacy vessel class using Coast 

Guard data on top mission degraders, cost drivers, and associated costs; 

and compares scheduled and unscheduled depot-level maintenance 

expenditures with the vessels’ Standard Support Levels (SSL).1

As stated earlier, the condition of the HEC fleet is poor. Coast Guard 

officials attributed the poor performance of the HEC fleet to the increased 

frequency of major casualties. Each year the Coast Guard’s Office of 

Naval Engineering compiles a list of the top five mission degraders and 

cost drivers and their total obligated amounts. Table 6 provides that 

information for the HEC fleet for fiscal year 2011.

Table 6: HEC Fleet Top Five Major Mission Degraders and Top Cost Drivers and Associated Total Obligation Amounts, Fiscal 

Year 2011

Major mission degraders Top cost drivers and total obligated amount 

1. Main diesel engines 1. Main gas turbine, $594,000

2. Ship’s service diesel generators 2. Main diesel engine, $294,800

3. Main gas turbine 3. SPS-73 surface search radar, $230,100

4. SPS-73 surface search radar 4. Propeller hub assembly, $189,800

5. Main reduction gear 5. Emergency gas turbine generator, $174,300

Source: GAO analysis of Coast Guard data.

Scheduled and unscheduled maintenance expenditures for the HEC fleet 

fluctuated from fiscal year 2005 through 2011, peaking in fiscal years 

2009 and 2010. Coast Guard officials told us that major casualties on 

three HECs contributed disproportionately to the unscheduled 

maintenance expenditures in fiscal years 2010 and 2011, and that they 

have since decommissioned two of these vessels. Depot-level 

maintenance expenditures for the legacy HEC fleet were 1.4 to 3.6 times 

greater than SSLs in each year from fiscal years 2005 through 2011.

Figure 11 shows the scheduled and unscheduled depot-level 

 

1

SSLs are the Coast Guard’s annual budgeted funds for depot-level maintenance for each 

of its vessel classes. Scheduled and unscheduled maintenance expenditures and SSLs 

have been adjusted for inflation, and are reported here in fiscal year 2012 dollars.

Appendix III: Further Information on 

Condition and Costs of the Coast Guard’s 

Legacy Vessel Fleet

The HEC Fleet
Appendix III: Further Information on Condition 

and Costs of the Coast Guard’s Legacy Vessel 

Fleet 

Page 57 GAO-12-741 Coast Guard Legacy Vessels 

maintenance expenditures for the legacy HEC class during fiscal years 

2005 through 2011, along with how these expenditures compared with 

the HEC fleet’s SSLs.

Figure 11: HEC Fleet Scheduled and Unscheduled Depot-Level Maintenance 

Expenditures Compared with Standard Support Levels (SSL), Fiscal Years 2005 

through 2011

As stated earlier, the condition of the Coast Guard’s fleet of 27 MECs is 

generally poor, although the 210-foot MECs were generally in better 

condition than the 270-foot MECs. Tables 6 and 7 provide information on 

the top five mission degraders and cost drivers and their total obligated 

amounts for the 210-foot and 270-foot MEC fleets, respectively, for fiscal 

year 2011.

The MEC Fleet
Appendix III: Further Information on Condition 

and Costs of the Coast Guard’s Legacy Vessel 

Fleet 

Page 58 GAO-12-741 Coast Guard Legacy Vessels 

Table 7: 210-Foot MEC Fleet Top Five Major Mission Degraders and Cost Drivers and Associated Total Obligation Amounts, 

Fiscal Year 2011

Major mission degraders Top cost drivers and total obligated amount

1. Machinery plant control and monitoring system 1. SPS-73 surface search radar, $134,700

2. Main diesel engine 2. Main diesel engine, $133,300

3. SPS-73 surface search radar 3. Reverse osmosis desalination plant, $50,100

4. Reverse osmosis water maker 4. Helicopter in-flight refueling hose, $46,500

5. P6 dewatering pump 5. Welin Lambie boat davit, $43,800

Source: GAO analysis of Coast Guard data.

Table 8: 270-Foot MEC Fleet Top Five Major Mission Degraders and Cost Drivers and Associated Total Obligation Amounts, 

Fiscal Year 2011

Major mission degraders Top cost drivers and total obligated amount 

1. Machinery plant control and monitoring system 1. MK39 gyrocompass, $693,100

2. Main diesel engine 2. SPS-73 surface search radar , $98,100

3. Reverse osmosis desalination plant 3. Main diesel engine, $72,200

4. Welin Lambie boat davit 4. Gallery oven, $57,500

5. Ship’s service diesel generator 5. Fuel transfer pump, $54,200

Source: GAO analysis of Coast Guard data.

Scheduled depot-level maintenance expenditures for the 270-foot MEC 

fleet fluctuated from fiscal year 2005 through 2011, while unscheduled 

depot-level maintenance expenditures for the 270-foot MEC fleet 

remained comparatively stable during this same time period. The depotlevel maintenance expenditures were less than SSLs for the 210-foot 

MEC fleet in fiscal years 2007 and 2008, but were 1.6 to 2.4 times greater 

than SSLs throughout the rest of this period. Figure 12 compares the 

scheduled and unscheduled depot-level maintenance expenditures for 

the 270-foot MECs during fiscal years 2005 through 2011 with the SSLs. 
Appendix III: Further Information on Condition 

and Costs of the Coast Guard’s Legacy Vessel 

Fleet 

Page 59 GAO-12-741 Coast Guard Legacy Vessels 

Figure 12: 270-Foot MEC Fleet Scheduled and Unscheduled Depot-Level 

Maintenance Expenditures Compared with Standard Support Levels, Fiscal Years 

2005 through 2011

As shown in figure 13, scheduled and unscheduled depot-level 

maintenance expenditures for the 210-foot MEC fleet fluctuated from 

fiscal years 2005 through 2011. The depot-level maintenance 

expenditures were less than SSLs for the 210-foot MEC fleet from fiscal 

years 2006 through 2008, and nearly equal in fiscal year 2010, but were 

1.5 to 2.2 times greater than SSLs throughout the rest of this period.
Appendix III: Further Information on Condition 

and Costs of the Coast Guard’s Legacy Vessel 

Fleet 

Page 60 GAO-12-741 Coast Guard Legacy Vessels 

Figure 13: 210-Foot MEC Fleet Scheduled and Unscheduled Deport-Level 

Maintenance Expenditures Compared with Standard Support Levels, Fiscal Years 

2005 through 2011

As stated earlier, the legacy PB fleet is generally in poor condition, but 

has improved some in recent years, which Coast Guard officials attribute 

to improved maintenance practices and the effects of vessel sustainment 

projects. Table 8 shows the Coast Guard’s top five mission degraders, 

cost drivers, and the associated costs for the legacy PB fleet for fiscal 

year 2011.

The PB Fleet
Appendix III: Further Information on Condition 

and Costs of the Coast Guard’s Legacy Vessel 

Fleet 

Page 61 GAO-12-741 Coast Guard Legacy Vessels 

Table 9: 110-Foot PB Fleet Top Five Major Mission Degraders, Cost Drivers, and Associated Costs, Fiscal Year 2011

Major mission degraders Top cost drivers and total obligated amount

1 Main diesel engine 1. Fin stabilizer hydraulic ram, $102,300

2. P-100 dewatering/firefighting pump 2. Reduction gear, $87,900

3. Ship’s service diesel generator 3. Main diesel engine, $76,700

4. Ship’s service diesel generator raw water pump 4. Propulsion shaft, $57,800

5. Air conditioning raw water pump 5. Gyro compass, $47,500

Source: GAO analysis of Coast Guard data.

Scheduled depot-level maintenance expenditures for the legacy PB fleet 

fluctuated from fiscal year 2005 through 2011, while unscheduled depot 

level maintenance expenditures for the fleet declined steadily during this 

period. Coast Guard officials reported that this decline was likely due to 

increased scheduled maintenance, which helped reduce casualties. 

Depot-level maintenance expenditures were 1.6 to 2.9 times greater than 

SSLs for the PB fleet in each year from fiscal years 2005 through 2011. 

Figure 14 compares the scheduled and unscheduled depot-level 

maintenance expenditures for the PB fleet during fiscal years 2005 

through 2011 with the SSLs.
Appendix III: Further Information on Condition 

and Costs of the Coast Guard’s Legacy Vessel 

Fleet 

Page 62 GAO-12-741 Coast Guard Legacy Vessels 

Figure 14: 110-Foot PB Fleet Scheduled and Unscheduled Depot Level Maintenance 

Expenditures Compared with Standard Support Levels, Fiscal Years 2005 through 

2011
Appendix IV: Evaluation of the Coast Guard’s 

Process for Estimating Legacy Vessel 

Maintenance Costs 

Page 63 GAO-12-741 Coast Guard Legacy Vessels 

This appendix provides information on the relationship between the three 

best practice characteristics and the 15 related steps of a high-quality 

cost estimate as established in GAO’s Cost Estimating and Assessment 

Guide.

1

In determining that the Coast Guard’s process for developing legacy 

vessel maintenance cost estimates does not fully reflect best practices, 

we evaluated the Coast Guard’s cost estimation process against GAO’s 

2009 Cost Estimating and Assessment Guide. This guide states that a 

high-quality and reliable cost estimate includes best practice 

characteristics—three of which are relevant to the Coast Guard’s 

estimating process. These characteristics are that the estimate is (1) well 

documented, (2) comprehensive, and (3) accurate. Moreover, the guide 

establishes 10 related steps that, if followed, should result in high-quality 

cost estimates.

In particular, this appendix provides more details on the extent to 

which the Coast Guard’s cost-estimating process meets the best 

practices characteristics and steps, and explains how we determined the 

overall assessment ratings.

2

• Not met: The Coast Guard provided no evidence that satisfies any 

portion of the criterion.

Because this report deals with only the maintenance of 

legacy Coast Guard vessels, we tailored our evaluation criteria, as shown 

in table 8. We applied the following scale across the categories of best 

practices and related steps:

• Minimally met: The Coast Guard provided evidence that satisfies a 

small portion of the criterion.

• Partially met: The Coast Guard provided evidence that satisfies 

about one-half of the criterion.

• Substantially met: The Coast Guard provided evidence that satisfies 

a large portion of the criterion.

• Met: The Coast Guard provided complete evidence that satisfies the 

entire criterion.

After reviewing the documentation that the Coast Guard submitted for its 

cost estimation process, conducting interviews with knowledgeable 

 

1

GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: Mar. 2, 2009).

2

Since we determined that the fourth best practice characteristic—”credible”—is not 

appropriate for this assessment, we did not assess two steps related to the “credible” 

characteristic as identified in GAO’s Cost Estimating and Assessment Guide. 

Appendix IV: Evaluation of the Coast Guard’s 

Process for Estimating Legacy Vessel 

Maintenance Costs
Appendix IV: Evaluation of the Coast Guard’s 

Process for Estimating Legacy Vessel 

Maintenance Costs 

Page 64 GAO-12-741 Coast Guard Legacy Vessels 

officials, and reviewing relevant source documents, we determined that 

the Coast Guard’s process partially meets three characteristics of a 

reliable cost estimate, as shown in table 9. We determined the overall 

assessment rating by assigning each individual assessment rating a 

number: Not met = 1, minimally met = 2, partially met = 3, substantially 

met = 4, and met = 5. We then took the average of the individual 

assessment ratings to determine the overall assessment rating for each 

characteristic. The resulting average becomes the overall assessment as 

follows: Not met = 1 to 1.4, minimally met = 1.5 to 2.4, partially met = 2.5 

to 3.4, substantially met = 3.5 to 4.4, and met = 4.5 to 5.0.

Table 10: Summary Assessment of the Coast Guard’s Cost Estimation Process Compared with Best Practices

Best practice

Overall 

assessment Step 

Individual 

assessment 

Comprehensive Partially met The cost estimate includes all life cycle costs Not applicable

The cost estimate completely defines the program, reflects the current 

schedule, and is technically reasonable.

Substantially met

The cost estimate work breakdown structure is product-oriented, 

traceable to the statement of work/objective, and at an appropriate level 

of detail to ensure that cost elements are neither omitted nor doublecounted.a

Substantially met

The estimate documents all cost-influencing ground rules and 

assumptions. 

Minimally met

Well documented Partially met The documentation captures the source data used, the reliability of the 

data, and how the data were normalized.b Partially met

The documentation describes in sufficient detail the calculations 

performed and the estimating methodology used to derive each 

element’s cost.

Partially met

The documentation describes step by step how the estimate was 

developed, so that a cost analyst unfamiliar with the program could 

understand what was done and replicate it.

Minimally met

The documentation discusses the technical baseline description and the 

data in the baseline is consistent with the estimate.

Substantially met

The documentation provides evidence that the cost estimate was 

reviewed and accepted by management.

Partially met

Accurate Partially met The cost estimate results are unbiased, not overly conservative or 

optimistic, and based on an assessment of most likely costs.

Minimally met

The estimate has been adjusted properly for inflation. Minimally met

The estimate contains few, if any, minor mistakes. Substantially met

The cost estimate is regularly updated to reflect significant changes in 

the program so that it always reflects the current status.

Substantially met

Variances between planned and actual costs are documented, 

explained, and reviewed. 

Minimally met
Appendix IV: Evaluation of the Coast Guard’s 

Process for Estimating Legacy Vessel 

Maintenance Costs 

Page 65 GAO-12-741 Coast Guard Legacy Vessels 

Best practice

Overall 

assessment Step 

Individual 

assessment 

The estimate is based on a historical record of cost estimating and 

actual experiences from other comparable programs. 

Partially met

Source: GAO analysis of Coast Guard information.

a

A work breakdown structure shows the requirements and what must be accomplished to develop a 

program, and provides the basis for identifying resources and tasks for developing a program cost 

estimate. It provides a basic framework for estimating costs, developing schedules, identifying 

resources, determining where risks may occur, and providing the means for measuring program 

status. 

b

The purpose of data normalization is to make a given data set consistent with and comparable with 

other data used in the estimate. Since data can be gathered from a variety of sources, they are often 

in different forms and need to be adjusted before being used for comparison analysis or as a basis for 

projecting future costs. 
Appendix V: Comments from the Department 

of Homeland Security

Page 66 GAO-12-741 Coast Guard Legacy Vessels 

Appendix V: Comments from the Department 

of Homeland Security
Appendix V: Comments from the Department 

of Homeland Security

Page 67 GAO-12-741 Coast Guard Legacy Vessels 
Appendix V: Comments from the Department 

of Homeland Security

Page 68 GAO-12-741 Coast Guard Legacy Vessels 
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 69 GAO-12-741 Coast Guard Legacy Vessels 

Stephen L. Caldwell, Director (202) 512-9610 or caldwells@gao.gov

In addition to the contact named above, Christopher Conrad (Assistant 

Director), Jason Berman, Chloe Brown, and Michael Lenington made key 

contributions to this report. Also contributing to this report were David 

Alexander, Jennifer Echard, Richard Eiserman, Eric Hauswirth, Anna 

Irvine, Tracey King, Dawn Locke, Lara Miklozek, Robin Nye, Joshua 

Ormond, Karen Richey, and Jack Smuck.

Appendix VI: GAO Contact and Staff 

Acknowledgments 

Staff Contact

Acknowledgments
Related GAO Products

Page 70 GAO-12-741 Coast Guard Legacy Vessels 

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

Security’s Fleet Studies. GAO-12-751R. Washington, D.C.: May 31, 2012.

Coast Guard: Observations on Arctic Requirements, Icebreakers, and 

Coordination with Stakeholders. GAO-12-254T. Washington, D.C.: 

December 1, 2011.

Coast Guard: Action Needed as Approved Deepwater Program Remains 

Unachievable. GAO-12-101T. Washington, D.C.: October 4, 2011.

Coast Guard: Action Needed As Approved Deepwater Program Remains 

Unachievable. GAO-11-743. Washington, D.C.: July 28, 2011.

Coast Guard: Observations on Acquisition Management and Efforts to 

Reassess the Deepwater Program. GAO-11-535T. Washington, D.C.: 

April 13, 2011.

Coast Guard: Opportunities Exist to Further Improve Acquisition 

Management Capabilities. GAO-11-480. Washington, D.C.: April 13, 

2011. 

Coast Guard: Deepwater Requirements, Quantities, and Cost Require 

Revalidation to Reflect Knowledge Gained. GAO-10-790. Washington, 

D.C.: July 27, 2010.

Department of Homeland Security: Assessments of Selected Complex 

Acquisitions. GAO-10-588SP. Washington, D.C.: June 30, 2010.

Coast Guard: Observations on the Requested Fiscal Year 2011 Budget, 

Past Performance, and Current Challenges. GAO-10-411T. Washington, 

D.C.: February 25, 2010.

Coast Guard: Better Logistics Planning Needed to Aid Operational 

Decisions Related to the Deployment of the National Security Cutter and 

Its Support Assets. GAO-09-497. Washington, D.C.: July 17, 2009.

Coast Guard: As Deepwater Systems Integrator, Coast Guard Is 

Reassessing Costs and Capabilities but Lags in Applying Its Disciplined 

Acquisition Approach. GAO-09-682. Washington, D.C.: July 14, 2009.

Coast Guard: Observations on Changes to Management and Oversight of 

the Deepwater Program. GAO-09-462T. Washington, D.C.: March 24, 

2009.

Related GAO Products
Related GAO Products

Page 71 GAO-12-741 Coast Guard Legacy Vessels 

Coast Guard: Change in Course Improves Deepwater Management and 

Oversight, but Outcome Still Uncertain. GAO-08-745. Washington, D.C.: 

June 24, 2008.

Coast Guard: Strategies for Mitigating the Loss of Patrol Boats Are 

Achieving Results in the Near Term, but They Come at a Cost and 

Longer Term Sustainability Is Unknown. GAO-08-660. Washington, DC: 

Jun 23, 2008.

Status of Selected Assets of the Coast Guard’s Deepwater Program. 

GAO-08-270R. Washington, D.C.: March 11, 2008.

(441001)
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