U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

21–672 PDF 2005

S. HRG. 109–121

COAST GUARD READINESS, MISSION BALANCE,

AND FISCAL YEAR 2006 BUDGET REQUEST

HEARING

BEFORE THE

SUBCOMMITTEE ON FISHERIES AND THE COAST 

GUARD

OF THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MARCH 17, 2005

Printed for the use of the Committee on Commerce, Science, and Transportation

(

(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

TED STEVENS, Alaska, Chairman 

JOHN MCCAIN, Arizona 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

GORDON H. SMITH, Oregon 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

DANIEL K. INOUYE, Hawaii, Co-Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

E. BENJAMIN NELSON, Nebraska 

MARK PRYOR, Arkansas 

LISA J. SUTHERLAND, Republican Staff Director 

CHRISTINE DRAGER KURTH, Republican Deputy Staff Director 

DAVID RUSSELL, Republican Chief Counsel 

MARGARET L. CUMMISKY, Democratic Staff Director and Chief Counsel 

SAMUEL E. WHITEHORN, Democratic Deputy Staff Director and General Counsel 

LILA HARPER HELMS, Democratic Policy Director 

SUBCOMMITTEE ON FISHERIES AND THE COAST GUARD 

OLYMPIA J. SNOWE, Maine, Chairwoman 

TED STEVENS, Alaska 

TRENT LOTT, Mississippi 

GORDON H. SMITH, Oregon 

JOHN E. SUNUNU, New Hampshire 

DAVID VITTER, Louisiana 

MARIA CANTWELL, Washington, Ranking 

DANIEL K. INOUYE, Hawaii 

JOHN F. KERRY, Massachusetts 

FRANK R. LAUTENBERG, New Jersey 

(III)

C O N T E N T S 

Page 

Hearing held on March 17, 2005 ............................................................................ 1

Statement of Senator Cantwell .............................................................................. 3

Statement of Senator Inouye .................................................................................. 4

Prepared statement .......................................................................................... 5

Statement of Senator Lautenberg .......................................................................... 52

Statement of Senator Snowe ................................................................................... 1

Statement of Senator Stevens ................................................................................ 42

WITNESSES

Collins, Admiral Thomas H., Commandant, U.S. Coast Guard ........................... 5

Prepared statement .......................................................................................... 7

Welch, Master Chief Franklin A., Master Chief Petty Officer, U.S. Coast 

Guard .................................................................................................................... 14

Prepared statement .......................................................................................... 16

Wrightson, Margaret T., Director, Homeland Security and Justice Issues, 

U.S. Government Accountability Office .............................................................. 19

Prepared statement .......................................................................................... 21

APPENDIX

Barnes, Joseph L., National Executive Secretary, Fleet Reserve Association, 

prepared statement .............................................................................................. 61

Lautenberg, Hon. Frank R., U.S. Senator from New Jersey, prepared statement ...................................................................................................................... 61

Response to written questions submitted to Admiral Thomas H. Collins by: ....

Hon. Maria Cantwell ........................................................................................ 76

Hon. Daniel K. Inouye ...................................................................................... 72

Hon. John F. Kerry .......................................................................................... 84

Hon. Frank R. Lautenberg ............................................................................... 89

Hon. Olympia J. Snowe .................................................................................... 66

Response to written questions submitted to Margaret T. Wrightson by: ...........

Hon. Olympia J. Snowe .................................................................................... 93

Hon. Frank R. Lautenberg ............................................................................... 93

(1)

THE COAST GUARD’S READINESS, MISSION 

BALANCE, AND FISCAL YEAR 2006 BUDGET 

REQUEST 

THURSDAY, MARCH 17, 2005

U.S. SENATE, 

SUBCOMMITTEE ON FISHERIES AND THE COAST GUARD, 

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10 a.m. in room 

SR–253, Russell Senate Office Building, Hon. Olympia J. Snowe, 

Chairwoman of the Subcommittee, presiding. 

OPENING STATEMENT OF HON. OLYMPIA J. SNOWE,

U.S. SENATOR FROM MAINE 

Senator SNOWE. The hearing will come to order. Now that we 

have the Chair and Ranking here, I think we can get going now. 

Good morning. Admiral Collins, Master Chief Welch, Ms. 

Wrightson, I’d like to thank all of you for being here this morning 

to testify on this critical hearing on the Coast Guard’s readiness, 

mission balance, and the Fiscal Year 2006 budget request. 

Today’s hearing will further examine the readiness concerns due 

to the overall degradation of the Coast Guard’s assets, to review 

the challenges the Coast Guard’s facing in balancing its homelandsecurity and traditional missions, and as well as to ensure that we 

provide the Coast Guard with the 2006 budget request to fulfill its 

many current and increasing responsibilities. 

As Chair of the Fisheries and Coast Guard Subcommittee, I 

strongly believe that the Coast Guard serves as a cornerstone of 

our Department of Homeland Security. It is uniquely positioned to 

perform a wide variety of missions critical to our nation’s domestic 

safety and security. Last year alone, the Coast Guard responded to 

more than 32,000 calls for assistance, and saved nearly 5,500 lives. 

These brave men and women risk their lives to defend our borders 

from drugs, illegal immigrants, acts of terror, and other nationalsecurity threats. 

In 2004, the Coast Guard prevented 376,000 pounds of marijuana and cocaine from crossing the borders. It also stopped more 

than 11,000 illegal migrants from reaching our shores, conducting 

more than 4,500 boardings to protect our vital fishery stocks, and 

responded to more than 24,000 pollution incidents. 

The Coast Guard also aggressively defended our homeland by 

conducting more than 36,000 port security patrols, and conducted 

19,000 security boardings. In accordance with the Maritime TransVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
2

portation Security Act, the Coast Guard has also reviewed and approved 9,580 domestic vessel security plans, and 3,119 domestic facility security plans. They also verified security-plan implementation for 8,100 foreign vessels. 

This is a tremendous record of success, and I cite these statistics 

because I think, again, it underscores the role that the Coast 

Guard plays on so many different levels. And this record of success 

is really, I think, extraordinary. 

I think, at the same time, we share the concern about the toll 

that such a high operational tempo is taking on the Coast Guard’s 

antiquated ships and aging aircraft, and ultimately on its personnel. 

So, Admiral Collins, it’s unfortunate—and we had this discussion 

yesterday, and repeatedly—that, again, we’re addressing this issue 

concerning the high OPTEMPO issue for the Coast Guard, but, at 

the same time, the deterioration of its equipment and the resources 

that has plagued the service repeatedly, year after year. 

I’m aware that the 110-foot patrol-boat fleet, a workhorse of the 

Coast Guard, in the past year has experienced 23 hull breaches requiring emergency dry docks. This simply is too unsafe for the men 

and women out there on the seas, it certainly poses a grave danger 

to them. 

Additionally, the 378-foot fleet experiences a main-space casualty 

each patrol. Again, an unacceptable safety record. 

The resultant total of unexpected maintenance days for mediumand high-endurance fleets has skyrocketed and endured a 400 percent increase from 1999. This averages to more than two lost cutters per year. With the missions assigned to the Coast Guard and 

the pace of the operation the service now endures, the Coast Guard 

and this nation cannot afford to lose 1 day of service, let alone 2 

years. So the time to act on this is obviously now, before we deepen 

the crisis. 

Today, we’re considering the Administration’s Fiscal Year 2006 budget request, which proposes $8.1 billion in funding for the Coast 

Guard, which is an 8 percent increase over the previous year. 

While these increases, on the surface, may appear to be sufficient, 

I am concerned that this is not enough, just as I was concerned last 

year, and expressed that, as well, repeatedly. 

Once more, as we delve into this budget request, we find it does 

not significantly increase funding for the Coast Guard’s Deepwater 

Project, even though the Coast Guard is clearly in desperate need 

of upgrading its legacy assets. More importantly, the Administration’s request places this program on a 20-plus-year timeline, which 

obviously does not allow the Coast Guard to fulfill its obligations 

that this nation requires of it. 

We cannot expect the Coast Guard to do its job with the resources that it currently has, and certainly those that are degrading and those that have become inoperative, in many respects. I 

will continue to fight for Deepwater acceleration, because it is the 

best and most cost-effective way to remedy the Coast Guard’s readiness problems and provide the Coast Guard with the tools it needs 

to carry out all of its missions. 

While these additional resources are desperately needed, a new 

reality requires the Coast Guard to operate more efficiently and 

3

smarter if it is also going to do its job successfully in fulfilling its 

traditional missions, as well. Maintaining a proper mission balance 

is a significant challenge for the Coast Guard, as I’m sure Ms. 

Wrightson will discuss. We have to balance the available resources 

with our expectations for mission performance. 

Admiral Collins, it is great to see you here again this morning. 

I look forward to discussing your agency’s budget request, as well 

as the other issues I have discussed and raised in our meeting yesterday. Our nation needs the Coast Guard today more than ever. 

I intend to ensure, as the Chair of this Subcommittee, that you 

have the essential resources to fulfill the agency’s homeland-security as well as non-homeland-security duties, as well. 

Master Chief Welch, I welcome you to the Senate, as well, and 

look forward to your testimony. The issues you confront are equally 

important to ensure that our men and women in uniform are treated fairly. You obviously have a unique perspective. You can provide 

the insights regarding the issues that affect our men and women 

in uniform on a daily basis. 

And, Ms. Wrightson, I thank you for being here today, and want 

to thank you for all the service that you have provided us in assisting the Coast Guard in their endeavors to meet and fulfill the responsibilities and how they can improve in doing so. And I thank 

you. And I’ve read your report, and I appreciate some of the recommendations you have made. And I know Admiral Collins does, 

as well. 

So, with that, I’ll recognize other Members of the Committee. 

Mr. Chairman? 

Senator STEVENS. Well, thank you very much. I’ll yield to my colleagues. I’ve got another appointment later. I’d just as soon wait 

and hear the testimony. 

Thank you. 

Senator SNOWE. OK. 

Senator Cantwell? 

STATEMENT OF HON. MARIA CANTWELL,

U.S. SENATOR FROM WASHINGTON 

Senator CANTWELL. Thank you, Madam Chair. Thank you. At 

this, our first hearing together, I would like to take an opportunity 

to let you know I look forward to working with you in the 109th 

Congress, as representative of states with strong maritime traditions from different corners of the country. I believe, though, we do 

share a common interest and perspective that we can blend together in creating good policy. 

Mr. Chairman, I’m pleased to hear that we are going to discuss 

the proposal for the Fiscal Year 2006 budget regarding the important role of the U.S. Coast Guard in maritime security, maritime 

safety, search and rescue of mariners, and a variety of other issues. 

In addition, the Coast Guard plays a critical role in protecting our 

oceans resource through fisheries enforcement and response to oil 

spills. 

The 13th Coast Guard District, encompassing Oregon, Idaho, and 

Montana, is headquartered in Seattle, and Washington has played 

a major role in maritime industries. The Port of Seattle is the 

third-largest container port in the nation and half of the nation’s 

4

large passenger ferry operations are in the State of Washington. So 

we thank you for your help and coordination with law enforcement 

throughout the country on that issue. 

Seattle is also the home port of many Coast Guard vessels, including the nation’s polar icebreaker fleet operated by the Coast 

Guard. And I plan to ask a few questions of Admiral Collins on 

that issue this morning, as it’s certainly a vital national resource 

to our country. 

Admiral Collins, we also had a chance to talk about the aging nature of the Coast Guard fleet and your related concerns. I look forward to talking about that this morning, and the issues of ship repair. 

Recently, an oil spill in Puget Sound coated miles of shoreline 

with heavy-grade industrial oil. The Coast Guard was able to respond and clean up that spill quickly with money from the Oil Spill 

Liability Trust Fund. Because liability for this spill has yet to be 

determined, money from the trust fund was critical for fast containment and cleanup. Incidents like the Dalco oil spill in Puget Sound 

are an example of why we need to ensure that the Oil Spill Liability Trust Fund exists beyond 2010. So we thank you for your quick 

response on that cleanup. 

The Coast Guard’s homeland-security activities are also vital to 

our nation’s well-being and prosperity. So are, I would argue, the 

traditional mission of the U.S. Coast Guard, including maritime 

safety and protection of natural resources. That’s why I am concerned about the Coast Guard effectively balancing new and old 

missions. We’ll have to work hard to meet the challenges as we 

move ahead. Effective operations of the Coast Guard is important 

for the nation, and I look forward to working with Senator Snowe 

and my colleagues here—the Ranking Member and the Chairman 

of the overall Committee—to make sure that we are ensuring both 

safety and lawful maritime operations. 

Thank you, Senator Snowe. 

Senator SNOWE. Thank you, Senator Cantwell. And I’m looking 

forward to working with you on this Subcommittee, because I know 

that we share a number of issues of mutual concern and interest. 

And so, I am looking forward to a very productive year. Thank you. 

Co-Chair Inouye? 

STATEMENT OF HON. DANIEL K. INOUYE,

U.S. SENATOR FROM HAWAII 

Senator INOUYE. Thank you, Madam Chair. I’d like to commend 

you, Madam Chairman and Ms. Cantwell, for focusing on the critical services of the Coast Guard as your first matter in the first 

Subcommittee hearing. 

Madam Chair, I have a full statement here, but, because of the 

immense importance of this hearing, may I submit it for the 

record? 

Senator SNOWE. Without objection, so ordered. 

[The prepared statement of Senator Inouye follows:]

5

PREPARED STATEMENT OF HON. DANIEL K. INOUYE,

U.S. SENATOR FROM HAWAII

I would like to commend Senators Snowe and Cantwell for choosing to focus on 

the critical services provided by the United States Coast Guard in their first Subcommittee hearing of the 109th Congress. 

The Coast Guard is critical to ensuring the safety and security of all coastal states 

and safeguarding our natural resources. The Coast Guard’s District 14, based in my 

home state of Hawaii, covers the largest geographical area in the U.S. We rely on 

the oceans and the ships that travel them for most of the goods that come to Hawaii. 

While I am pleased to see that the Administration has requested an increase in 

Coast Guard funding for Fiscal Year 2006, I do have some concerns as to whether 

this is adequate to cover both their security and non-security missions. Indeed, the 

Coast Guard has itself alerted us that the amount requested by the President is not 

sufficient, and has shared with Congress a list of unfunded priorities for FY 2006 

totaling $919 million. 

The list includes more than $100 million for maritime security efforts. While not 

the subject of this hearing, the Transportation Security Administration’s budget 

makes it very clear that we continue to focus more than 90 percent of our resources 

on aviation security. However, port security funding is also critical. We can buy all 

of the patrol boats the Coast Guard seeks, but we will still need to harden security 

at our ports. 

Nearly four years after 9/11, we are still struggling to find the right balance in 

funding and resource allocation to meet all of the Coast Guard’s important missions. 

We all know that homeland security is our highest priority, but we cannot neglect 

other key missions such as maritime safety and living resource management. 

I am particularly concerned with the fact that over the past five years, a total 

of 216 suspected illegal incursions of foreign fishing vessels were detected within the 

Western/Central Pacific Exclusive Economic Zone. The Coast Guard detected only 

three of these incursions. 

Perhaps the problem is that in District 14, we receive fewer assets than any other 

district in terms of personnel, aircraft, and cutters. 

I also have concerns about the Deepwater program. Costs are increasing, and yet 

the Administration’s budget request includes only $726 million for new Deepwater 

assets, essentially a flat budget over Fiscal Year 2005, and $240 million for maintaining existing ‘‘legacy’’ assets. The Coast Guard says that it needs an additional 

$637 million for Deepwater, as well as $63 million to maintain legacy assets. At the 

same time, the Administration has failed to provide us the revised Deepwater plan. 

I would like to assure the Commandant in saying that this is a room full of 

friends and if ever there was a time for frankness in your statements regarding the 

budget, that time is now. 

I look forward to the testimony of all of the witnesses.

Senator INOUYE. And I’d like to assure the Commandant that 

this room is filled with your supporters, so come out and tell us 

what you want. 

Admiral COLLINS. Thank you, sir. 

Senator SNOWE. Admiral Collins, please begin. 

STATEMENT OF ADMIRAL THOMAS H. COLLINS, 

COMMANDANT, U.S. COAST GUARD 

Admiral COLLINS. Well, thank you, Madam Chair. It’s terrific to 

be here with this distinguished Committee, and Members of this 

Committee, and discuss the budget for 2006 for the United States 

Coast Guard. 

Budget time is always important time. And, of course, one of my 

critical job elements is trying to put the best tools in the hands of 

our Coast Guard men and women to do the job for America. 

I think since 9/11 we’ve made great progress in securing America’s waterways. Still, no doubt, a great deal is left to be done to 

improve our security, but I think we’re getting better every day, 

and thanks, in large part, to the Administration, the Secretary, 

6

and, clearly, this Committee that has helped us plot the way forward in this very, very important work. 

The budget—the 2006 budget, I think, will help us continue this 

progress. The discretionary part of this budget is 6.9 billion, about 

an 11-percent increase over comparable 2005 funding levels. And 

the budget provides the necessary resources, as you’ve noted, to 

continue the recapitalization of the Coast Guard aging fleet, while 

building our maritime safety and security capabilities. 

Our overarching goal is to secure America’s maritime border by 

managing and ultimately reducing risk. Risk. We’ve heard the new 

Secretary talk a lot about risk. But that’s our focus. How do we reduce/mitigate risk in the maritime domain? And doing so requires 

that we identify and intercept threats well before they reach our 

shores by conducting layered multi-agency security operations 

while strengthening security posture of our strategic ports. And as 

we reduce risk, we continually balance each of the Coast Guard 

mission requirements to ensure no degradation in service to the 

American public. 

So, with that in mind, the 2006 budget has three critical priorities from our perspective: recapitalizing Coast Guard primarily 

through the Deepwater Program, implementing maritime security 

for the homeland, and enhancing mission performance. 

Now, Deepwater, clearly the issue of the day for the Coast 

Guard, it not only serves to recapitalize this service, but it’s also 

the foundation for, and the necessary precursor to, implementing 

the maritime security strategy for our nation and to enhance mission performance, across the board. 

I would be remiss if I failed to acknowledge the, I think, extremely dedicated service by the Coast Guard workforce over the 

past year, just terrific folks—auxiliarists, reservists, active duty, 

and civilian. What a team. And you’ve cited some of the accomplishments of the last year. And in—my written statement fully details some of these extraordinary accomplishments. 

I think our workforce is terrific, the young folks that have a commitment to selfless service. And I think they’re making progress, 

across the board, on every mission. I know the focus here is homeland security—has been and should be—but we’re not forgetting 

any of our missions. 

Let me just give you an example of several weeks ago. One 4-

day period, about two and a half weeks ago, in 152 cases, Coast 

Guard men and women saved the lives of 87 people, in a 4-day period. They protected our homeland, both on the East Coast and the 

West Coast, in 12 different cases. They interdicted a total of 308 

migrants from four different countries who were attempting to 

enter this country illegally. They investigated a Greek tanker carrying over 23 million gallons of crude oil which ran aground on the 

lower Mississippi. They detained four foreign flag vessels for failing 

to comply with the Maritime Transportation Security Act. And in 

two separate cases in the Caribbean, they interdicted more than 

6,000 pounds of cocaine in a 4-day period. This is the typical type 

of multi-mission performance that you’re getting out of our Coast 

Guard. 

And, again, my view is to ensuring they are properly compensated, that they have the environment to grow professionally. 

7

Probably my single-highest priority is a commitment to our men 

and women. 

I think this budget is about placing the right tools in their capable hands. And they keep showing, and they have shown time and 

time again, that they know just what to do with it when we put 

the tools in their hands. 

With your continued support, I’m confident that we will continue 

to deliver robust maritime safety and securities that America deserves and expects. 

Thank you for the opportunity to testify before this Committee, 

and I stand ready to answer any question that you might have. 

Thank you. 

[The prepared statement of Admiral Collins follows:]

PREPARED STATEMENT OF ADMIRAL THOMAS H. COLLINS, COMMANDANT,

U.S. COAST GUARD

Introduction 

Good morning Madam Chair and distinguished Members of the Subcommittee. It 

is a pleasure to be here today to discuss the Coast Guard’s FY 2006 budget request 

and the positive impact it will have on the Coast Guard’s ability to secure America’s 

maritime borders, aid persons in distress, and facilitate the safe and efficient flow 

of commerce. 

On 9/10/01, our primary maritime focus was on the safe and efficient use of America’s waterways. Since 9/11, we have made great progress in securing America’s waterways, while continuing to facilitate the safe and efficient flow of commerce. There 

is no doubt that work remains, but there is also no doubt that we continue to improve maritime homeland security each and every day—thanks in large part to the 

continued strong budgetary support of the administration, congress, and this committee. 

The Coast Guard’s FY 2006 budget continues that support, proposing discretionary budget authority of $6.9 billion, an eleven percent increase over the comparable 2005 funding level. The budget provides the resources necessary to continue 

recapitalizing the Coast Guard’s aging cutters, boats, aircraft, and supporting infrastructure, while building out maritime safety and security capabilities essential to 

meeting present and future mission demands. 

Getting Results 

The Coast Guard’s overarching goal is to manage, and ultimately reduce, terrorrelated risk in the Maritime Domain. Doing so requires identifying and intercepting 

threats well before they reach U.S. shores by conducting layered, multi-agency security operations; while strengthening the security posture of strategic economic and 

military ports. As we seek to reduce maritime risk, we continually strive to balance 

each of the Coast Guard’s mission requirements to ensure no degradation in service 

to the American public. Looking at their accomplishments, it is clear that Coast 

Guard men and women continue rising to the challenge and delivering tangible and 

important results across both homeland security and non-homeland security mission-programs. No amount of new technology or capability enhances security more 

than our personnel. They are the indispensable link in any strategy and I am continually impressed by their ingenuity, courage, and dedication. 

Coast Guard personnel have embraced these priorities, have integrated them in 

daily operations, and have achieved impressive results. In 2004, Coast Guard personnel:

• Prevented more than 376,000 pounds of illegal narcotics from reaching the U.S. 

including seizing over 241,000 pounds of cocaine, shattering the previous record 

of 138,000 pounds.

• Interdicted nearly 11,000 undocumented migrants attempting to enter the country illegally by sea.

• Dispatched several cutters, aircraft, and personnel for four months as part of 

U.S. efforts to stabilize Haiti after the departure of President Aristide.

• Aggressively conducted more than 36,000 port security patrols, 6,900 air patrols, and 19,000 security boardings; escorted 7,200 vessels; and maintained 

more than 115 security zones to reduce maritime risk.

8

• Provided humanitarian assistance and disaster relief, including 42 personnel, 

one 378-foot High Endurance Cutter (WHEC), and four C–130 aircraft, to the 

governments of Indonesia, Sri Lanka, and Thailand in the aftermath of the devastating tsunami of December 26, 2004.

• In support of Operation Iraqi Freedom the Coast Guard protected, safely secured, and escorted to sea over 200 military sealift departures at ten different 

major U.S. seaports, carrying over 25 million square feet of indispensable cargo.

• Deployed two additional patrol boats and two additional LEDETs to DoD’s Central Command joining four Coast Guard patrol boats, two LEDETs, one Port Security Unit (PSU), and supporting logistics and command and control support 

elements already participating in Operation Iraqi Freedom.

• In response to a maritime gap in national law enforcement and counter-terrorism (LE/CT) capability, they stood up an offensive force able to execute 

across the full spectrum of LE and CT response in support of homeland security 

and homeland defense objectives. This capability was a critical force addition in 

protecting the maritime boundaries of several National Special Security Events 

including the G8 Summit and Democratic and Republican National Conventions.

• Leveraged the Coast Guard’s 34,000 member Coast Guard Auxiliary workforce, 

receiving approximately 3 million volunteer hours of maritime safety and security services.

Before 9/11 we had no formal international or domestic maritime security regime 

for ports, port facilities, and ships—with the exception of cruise ships. Partnering 

with domestic and international stakeholders, we now have both a comprehensive 

domestic security regime and an international security convention in place. Both 

have been in force since July 1, 2004. In executing the requirements of the Maritime 

Transportation Security Act (MTSA) and the International Ship and Port facility Security (ISPS) code, the Coast Guard has:

• Reviewed and approved 9,580 domestic vessel security plans and 3,119 domestic 

facility security plans.

• Overseen the development of 43 Area Maritime Security Plans and Committees,

• Verified security plan implementation on 8,100 foreign vessels.

• Completed domestic port security assessments for 54 of the 55 militarily and 

economically strategic ports, with the last assessment in the final stages of completion.

• Visited 14 key foreign countries to assess the effectiveness of anti-terrorism 

measures and implementation of ISPS code requirements. An additional 21 

countries are scheduled for visits by June 2005.

Of course the Coast Guard has mission requirements beyond homeland security 

and once again thanks to the tremendous dedication of our personnel, last year provided more evidence of the superb contributions they make each and every day. In 

2004, Coast Guard personnel:

• Saved the lives of nearly 5,500 mariners in distress and responded to more than 

32,000 calls for rescue assistance.

• Conducted more than 115,800 recreational vessel safety checks.

• Conducted 10,000 foreign commercial vessel boardings.

• Boarded more than 4,500 fishing vessels to enforce safety and fisheries management regulations.

• Partnered with Federal and state agencies to enhance enforcement of Marine 

Protected Species regulations.

• Conducted more than 3,000 inspections aboard mobile offshore drilling units.

• Responded to nearly 24,000 reports of water pollution or hazardous material releases.

• Ensured more than 1 million safe passages of commercial vessels.

• Maintained more than 50,000 federal aids to navigation, responding to and correcting over 13,000 aids to navigation discrepancies.

• Provided 99.0 percent availability of Differential Global Positioning System coverage to over 95,000 miles of U.S. waterways.

With your support, the Coast Guard continues its tradition of operational excellence and exceptional service to the nation. I am proud of the tireless efforts of our 

personnel who continue to meet every challenge both at home and abroad. 

9

Reducing Maritime Risk 

Despite these accomplishments, there is still much to do. Today’s global maritime 

safety and security environment demands a new level of operations specifically directed against terrorism without degrading other critical maritime safety and security missions. Most importantly, the Coast Guard must implement capabilities necessary to mitigate maritime security risks in the post-9/11 world. In terms of threat, 

vulnerability, and consequence there are few more valuable and vulnerable targets 

than the U.S. maritime transportation system.

Threat: While the 9/11 commission notes the continuing threat against our aviation system, it also states that ‘‘opportunities to do harm are as great, or greater, in maritime or surface transportation.’’

Vulnerability: The maritime transportation system annually accommodates 6.5 

million cruise ship passengers, 51,000 port calls by over 7,500 foreign ships, at 

more than 360 commercial ports spread out over 95,000 miles of coastline. The 

vastness of this system and its widespread and diverse critical infrastructure 

leave the nation vulnerable to terrorist acts within our ports, waterways, and 

coastal zones, as well as exploitation of maritime commerce as a means of transporting terrorists and their weapons.

Consequence: Contributing nearly $750 billion to U.S. gross domestic product 

annually and handling 95 percent of all overseas trade each year—the value of 

the U.S. maritime domain and the consequence of any significant attack cannot 

be understated. Independent analysis and recent experiences on 9/11 and the 

west coast dock workers strike demonstrates an economic impact of a forced closure of U.S. ports for a period of only eight days in excess of $58 billion to the 

U.S. economy.

Since 9/11 the Department of Homeland Security (DHS) and the Coast Guard 

have made significant strides to secure our homeland. However, maritime safety 

and security gaps remain. These gaps present risks that we must work to reduce, 

and we continue that work within the FY 2006 budget. 

The Coast Guard continues to guide its efforts by implementing policies, seeking 

resources, and deploying capabilities through the lens of our maritime security 

strategy. However, continued risk reduction is contingent upon Coast Guard readiness and capacity. Without these basic building blocks, implementation of maritime 

security strategies will not be sustainable. 

With that in mind, the priorities of the FY 2006 budget are to recapitalize the 

Coast Guard as a necessary foundation to implementing the maritime security strategy, as well as ensuring we continually enhance mission performance across the entire suite of Coast Guard mission requirements. 

Recapitalize the Coast Guard 

The FY 2006 budget continues the urgently needed recapitalization of our cutters, 

boats, aircraft and support infrastructure to reverse declining readiness trends and 

enhance operational capabilities to meet today’s maritime safety and security 

threats. 

The majority of the Coast Guard’s operational assets will reach the end of their 

anticipated service lives by 2010, resulting in rising operating and maintenance 

costs, reduced mission effectiveness, unnecessary risks, and excessive wear and tear 

on our people. Listed below are some specific examples highlighting alarming system failure rates, increased maintenance requirements, and the subsequent impact 

on mission effectiveness:

• HH–65 helicopter in-flight engine power losses occurred at a rate of 329 mishaps per 100,000 flight hours in FY 2004. This is up from a FY 2003 rate of 

63 mishaps per 100,000 flight hours. The comparable Federal Aviation Administration acceptable standard for a mishap of this severity is approximately 1 per 

100,000 flight hours. The engine loss rate has resulted in flight and operational 

restrictions and high levels of risk to our aircrews. Re-engining the HH–65 will 

remain the Coast Guard’s highest legacy asset priority until complete.

• The 110-foot Patrol Boat fleet has experienced 23 hull breaches requiring emergency dry docks. The resultant loss in operational days is unsustainable, and 

risks to our personnel are unacceptable. By the end of 2005, the Coast Guard 

will have taken delivery of eight reconfigured 123-foot patrol boats, which are 

upgraded 110-foot patrol boats designed to sustain this cutter class until replacement with the Integrated Deepwater System’s Fast Response Cutter.

• Our high and medium endurance cutters are experiencing sub-system failures 

due to old and unserviceable systems. The 378-foot WHEC fleet averages one 

10

engine room casualty, with potential to escalate to a fire, on every patrol. Onequarter of our fleet have recently missed operations due to unscheduled maintenance required to repair failing sub-systems. The total number of unscheduled 

maintenance days for the major cutter (medium and high endurance cutters) 

fleet has skyrocketed from 85 days in FY 1999 to 358 days in FY 2004 (over 

a 400 percent increase). This loss of operational cutter days in 2004 equates to 

losing two major cutters, or 5 percent of our major fleet for an entire year. The 

2006 budget includes funding for six mission effectiveness projects to help sustain the medium endurance cutter fleet, and funds construction of the third National Security Cutter, the replacement for the Coast Guard’s high endurance 

cutter class.

These same Deepwater assets are integral to the Coast Guard’s ability to perform 

its missions, such as migrant and drug interdiction operations, ports waterways and 

coastal security, fisheries enforcement, and search and rescue. In 2004, deepwater 

legacy assets made invaluable contributions to America’s maritime safety and security:

• Operation ABLE SENTRY blanketed the coastline of Haiti with Coast Guard 

Deepwater assets, which interdicted over 1,000 illegal migrants during this operation and deterred many thousand more from taking to sea in unsafe boats.

• The 378-foot Coast Guard Cutter GALLATIN, and its Airborne Use of Force 

(AUF) capable helicopter seized more than 24,000 pounds of cocaine worth an 

estimated $768 million and detained 27 suspected smugglers in the span of 

seven weeks.

• The Coast Guard’s Deepwater cutters and aircraft patrolled over 28,000 hours 

in direct support of maritime homeland security missions. 110-foot patrol boats 

alone patrolled 13,000 hours supporting port and coastal security missions including, cruise ship escorts, critical infrastructure protection, and countless security boardings.

• Working in conjunction with the U.S. Secret Service during the national political conventions, 270-foot Medium Endurance cutters and 110-foot patrol boats 

provided maritime security, enforced security zones, and served as command 

and control platforms coordinating maritime traffic. Deepwater aircraft, 

equipped with the AUF package, provided air security and conducted maritime 

security patrols.

Despite spending increasing amounts to maintain operational assets, the Coast 

Guard is experiencing a continuing decline in fleet readiness. Legacy cutters are 

now operating free of major equipment casualties (equipment failures that significantly impact mission performance) less than 50 percent of the time, despite the investment per operational day increasing by over 50 percent over the last six years. 

The resulting ‘‘readiness gap’’ negatively impacts both the quantity and quality of 

Coast Guard ‘‘presence’’—critical to our ability to accomplish all missions. The FY 

2006 budget continues the urgently-needed Coast Guard fleet recapitalization to address this readiness gap. 

The Integrated Deepwater System is the enduring solution to both the Coast 

Guard’s declining legacy asset readiness concerns and the need to implement enhanced maritime security capabilities to reduce maritime risk in the post–9/11 

world. Continued implementation of the Deepwater program will recapitalize the 

Coast Guard fleet and introduce much needed surveillance, detection/clarification, 

intercept, interdiction and command and control capabilities. 

The President’s FY 2006 budget provides $966 million for the Integrated Deepwater System, taking aim on reversing the Coast Guard’s declining readiness trends 

and transforming the Coast Guard with enhanced capabilities to meet current and 

future mandates through system-wide recapitalization and modernization of Coast 

Guard cutters, aircraft, and associated sub-systems. 

This level of investment in the Integrated Deepwater System is paramount in providing the Coast Guard with the capability and capacity essential to meeting our 

nation’s maritime homeland security needs; providing a layered defense throughout 

ports, waterways, coastal regions and extending far offshore, as well as sustaining 

other mission area efforts, such as search and rescue and living marine resources. 

Funding included for legacy asset sustainment projects, such as HH–65 re-engining, 

and WMEC mission effectiveness projects, is absolutely critical to sustain capabilities today, while acquisition of new and enhanced Deepwater assets is vital to ensuring the Coast Guard has the right capabilities tomorrow. 

The Coast Guard’s deepwater assets are not the only capital assets in urgent need 

of recapitalization or replacement. The FY 2006 budget also includes funding for:

11

• Response Boat-Medium—replaces the aging 41-foot Utility Boat fleet with an 

enhanced platform better able to meet search and rescue and homeland security 

mission requirements.

• Shore Infrastructure Recapitalization—funds critical projects such as the Coast 

Guard Academy Chase Hall Barracks rehabilitation, Group/Marine Safety Office Long Island Sound building replacement, and construction of a breakwater 

to protect boats and mooring facilities at Coast Guard Station Neah Bay Breakwater. These projects will not only improve habitability and quality of life of our 

people, but also increase effectiveness of the various missions these facilities 

support.

• High Frequency (HF) Communications System Recapitalization—replaces unserviceable, shore-side, high power HF transmitters, restoring long-range communications system availability to enhance Coast Guard mission performance 

and help meet International Safety of Life at Sea (SOLAS) treaty HF emergency distress monitoring requirements.

• Rescue 21—continues implementation of Rescue 21, vastly improving coastal 

command and control and communications interoperability with other federal, 

state, and local agencies.

Recapitalizing the Coast Guard is the indispensable foundation of our ability to 

continue improving maritime security while facilitating the flow of commerce. It is 

on this foundation that the FY 2006 budget continues to build out Coast Guard capabilities necessary to reduce risk and implement the maritime strategy for homeland security. 

Implement the Maritime Strategy for Homeland Security 

Considering the vast economic utility of our ports, waterways, and coastal approaches, it is clear that a terrorist incident against our marine transportation system would have a disastrous impact on global shipping, international trade, and the 

world economy in addition to the strategic military value of many ports and waterways. 

The four pillars of the Coast Guard’s Maritime Strategy for Homeland Security are 

in direct alignment with the Department of Homeland Security’s strategic goals of 

Awareness, Prevention, Protection, Response and Recovery. These pillars guide our 

efforts to reduce America’s vulnerabilities to terrorism by enhancing our ability to 

prevent terrorist attacks and limit the damage to our nation’s ports, coastal infrastructure and population centers in the event a terrorist attack occurs. 

First, we seek to increase our awareness and knowledge of what is happening in 

the maritime arena, not just here in American waters, but globally. We need to 

know which vessels are in operation, the names of the crews and passengers, and 

the ship’s cargo, especially those inbound for U.S. ports. Global Maritime Domain 

Awareness is critical to separate the law-abiding sailor from the anomalous threat. 

Second, to help prevent terrorist attacks we have developed and continue to improve an effective maritime security regime—both domestically and internationally. 

Third, we seek to better protect critical maritime infrastructure and improve our 

ability to respond to suspect activities by increasing our operational presence in 

ports, coastal zones and beyond . . . to implement a layered security posture, a defense-in-depth. 

Finally, we are improving our ability to respond to and aid in recovery if there 

were an actual terrorist attack. 

Below is an overview of each of the four pillars of the Coast Guard’s Maritime 

Strategy for Homeland Security and supporting FY 2006 budget initiatives:

Enhance Global Maritime Domain Awareness (MDA). The core of our MDA efforts 

revolve around the development and employment of accurate information, intelligence, and targeting of vessels, cargo, crews and passengers—and extending this 

well beyond our traditional maritime boundaries. All DHS components are working 

to provide a layered defense through collaborative efforts with our international 

partners to counter and manage security risks long before they reach a U.S. port. 

The FY 2006 budget significantly advances our efforts to implement comprehensive 

MDA, including funding for:

• Automatic Identification System (AIS)—accelerates deployment of nationwide 

AIS throughout regional Coast Guard command centers.

• Maritime Patrol Aircraft (MPA)—provides additional MPA resources to fill documented flight hour gaps in support of detection, surveillance and tracking activities.

12

• Common Operational Picture (COP)—deploys COP throughout Coast Guard 

command centers to fuse surveillance and tracking information from MDA systems such as AIS, Rescue 21, and Ports and Waterways Safety System 

(PAWSS).

• Radiological-Nuclear (Rad/Nuc) Detection and Response—consistent with the 

President’s Proliferation Security Initiative (PSI), this initiative increases the 

ability of Coast Guard cutters and Maritime Safety and Security Teams to detect Rad/Nuc materials to prevent proliferation in support of terrorist operations; and respond to incidents involving release of these dangerous substances.

• Integrated Deepwater System—Deepwater funding will continue C4ISR enhancements aboard legacy assets and development of the Common Operational 

Picture for new Deepwater platforms.

Create and Oversee Maritime Security Regime. This element of our strategy focuses on both domestic and international efforts and includes initiatives related to 

MTSA implementation, International Maritime Organization regulations such as 

the International Ship & Port Facility Security (ISPS) Code, as well as improving 

supply chain security and identity security processes. As I mentioned previously, the 

Coast Guard has made a critical first step in ensuring the security of our ports and 

protecting our nation’s economic prosperity by implementing the requirements set 

forth in the MTSA of 2002. The FY 2006 budget provides the resources necessary 

to continue robust enforcement of the MTSA, which includes:

• Continued verification of an estimated 3,100 domestic facility and 9,500 domestic vessel security requirements (plans must be revalidated every five years, 

upon a change of ownership, or significant change in operations), including 

working with vessel, company, and facility security officers.

• A robust Port State Control program to ensure compliance with international 

security requirements of over 8,100 foreign vessels calling on the U.S. annually.

• Development and continuous updates and improvements to the National and 43 

Area Maritime Security plans.

• Assessment of the anti-terrorism measures in place in approximately 140 foreign countries with which the U.S. conducts trade to ensure compliance with 

international standards.

Increase Operational Presence. Our collective efforts to increase operational presence in ports and coastal zones focus not only on adding more people, boats and 

ships to force structures but making the employment of those resources more effective through the application of technology, information sharing and intelligence support. The FY 2006 budget focuses resources toward increasing both the quantity and 

quality of Coast Guard operational presence by providing funding for:

• Airborne Use of Force (AUF) capability—deploys organic AUF capability to five 

Coast Guard Air Stations, increasing the ability to respond to maritime security 

threats.

• Enhanced Cutter Boat Capability—replaces existing obsolete and unstable cutter boats on the entire WHEC/WMEC fleet with the more capable Cutter Boat—

Over the Horizon and replaces aging, unsafe boat davit systems on 210-foot 

WMECs.

• Increase Port Presence and Liquefied Natural Gas (LNG) Transport Security—

provides additional Response Boat-Smalls and associated crews to increase presence to patrol critical infrastructure patrols, enforce security zones, and perform 

high interest vessel escorts in strategic ports throughout the nation. Provides 

additional boat crews and screening personnel at key LNG hubs such as Cove 

Point, MD and Providence, RI to enhance LNG tanker and waterside security.

• Enhanced Maritime Safety and Security Team (E–MSST)—Reallocates existing 

Coast Guard resources to immediately fill an existing gap in national maritime 

Law Enforcement and Counter-Terrorism (LE/CT) capability. Permanent establishment of E–MSST Chesapeake, VA will provide an offensive DHS force able 

to execute across the full spectrum of LE and CT response in support of homeland security and homeland defense objectives, including CT response capability 

for scheduled security events out to 50 nautical miles from shore and augments 

to interagency assets in high visibility venues such as National Special Security 

Events (NSSEs).

• Integrated Deepwater System—Continued investment in Deepwater will greatly 

improve the Coast Guard’s maritime presence starting at America’s ports, waterways, and coasts and extending seaward to wherever the Coast Guard needs 

13

to be present or to take appropriate maritime action. Deepwater provides the 

capability to identify, interdict, board, and where warranted seize vessels or 

people engaged in illegal or terrorist activity at sea or on the ports, waterways, 

or coast of America.

Improve Response and Recovery Posture. Understanding the challenge of defending 26,000 miles of navigable waterways and 361 ports against every conceivable 

threat at every possible time, we are also aggressively working to improve our response capabilities and readiness. While many of the increases in MDA and operational presence augment our collective response and recovery posture, the FY 2006 

budget funds initiatives that will increase our ability to adequately manage operations and coordinate resources during maritime threat response or recovery operations:

• High Frequency (HF) Communications System Recapitalization—replaces unserviceable, shore-side, high power HF transmitters to restore long-range communications system availability enhancing the Coast Guard’s ability to coordinate response activities.

• Continued Deployment of Rescue 21—the Coast Guard’s maritime 911 command, control and communications system in our ports, waterways, and coastal 

areas. This system provides Federal, state and local first responders with interoperable maritime communications capability, greater area coverage, enhanced 

system reliability, voice recorder replay functionality, and direction finding capability.

Enhance Mission Performance 

Lastly, we must continue to leverage the Coast Guard’s unique blend of authorities, capabilities, competencies and partnerships to enhance performance across the 

full suite of Coast Guard mission requirements. 

The Coast Guard is the Nation’s lead federal agency for maritime homeland security and fulfills a crucial role within the Department of Homeland Security as the 

Nation’s maritime first responder. The FY 2006 budget includes resources necessary 

to effectively execute all of our missions and meet associated performance goals. 

Every resource provided to the Coast Guard will contribute to a careful balance between our safety, security, mobility, protection of natural resources and national defense missions, all of which must be adequately resourced to meet the Coast Guard’s 

performance objectives. The FY 2006 budget advances several initiatives that will 

yield increased performance across multiple Coast Guard missions:

• Great Lakes Icebreaker (GLIB)—provides funding to operate and maintain the 

new GLIB scheduled to be commissioned in FY 2006, greatly enhancing the 

Coast Guard’s ability to conduct essential icebreaking activities and maintain 

aids-to-navigation to facilitate maritime commerce and prevent loss of life, personal injury, and property damage on the navigable waters of the Great Lakes.

• Maritime Law Enforcement School Co-location—enhances law enforcement 

training through co-location with the Federal Law Enforcement Training Center, increasing Coast Guard law enforcement training throughput and promoting better coordination among field activities with other federal, state, and 

local agencies.

• Polar Icebreaking Funding Transfer—shifts base funding for the two Polar 

Class icebreakers (USCGC POLAR SEA and USCGC POLAR STAR) and the 

USCGC HEALY to the National Science Foundation. The National Science 

Foundation is the resident agency with responsibility for the U.S. Antarctic Program and the current primary beneficiary of polar icebreaking services. Under 

this arrangement, the National Science Foundation will reimburse the U.S. 

Coast Guard for maintenance and operation of the polar icebreaking fleet.

Conclusion 

I appreciate your strong support over the past several years in providing the 

Coast Guard with the tools necessary to meet our multi-mission and military demands. I am extremely proud of our Coast Guard’s accomplishments since 9/11 as 

we strive to increase maritime homeland security while performing a myriad of critical maritime safety functions. 

We continue to focus on improving maritime security while facilitating safe use 

of the maritime transportation system for its many commercial, environmental, and 

recreational functions. But, much work remains to be done to reduce America’s 

vulnerabilities to terrorism and other maritime security threats. The FY 2006 budget includes the resources required to continue the multi-year effort to modernize the 

Coast Guard, reduce risks to maritime safety and security, and deliver capabilities 

14

and competencies necessary to enhance mission performance. The requested funding 

will positively impact our ability to deliver the maritime safety and security America demands and deserves by focusing resources toward three critical priorities:

• Recapitalize the Coast Guard. • Implement the Maritime Strategy for Homeland Security. • Enhance Mission Performance.

Finally, I would be remiss if I failed to acknowledge the outstanding service provided by the extremely dedicated Coast Guard workforce—a total team of uniformed 

active duty, Reserve, and Auxiliary personnel; dedicated civilian employees, and talented contractors. Looking at their accomplishments, it is clear that Coast Guard 

men and women continue to rise to the challenge and deliver tangible and important results across both homeland security and non-homeland security mission programs. Coast Guard men and women are unwavering in their commitment to their 

Service and country. Ensuring these same people are properly compensated and 

given the opportunity to grow both personally and professionally is my single highest priority. With Congressional and Administration support, we have done much 

in recent years, from pay raises, improved housing allowances to better medical 

care, to support our men and women. The FY 2006 budget builds upon those results 

and provides a pay raise and important funding for Coast Guard housing projects 

through the shore recapitalization request. 

Coast Guard members volunteer in order to serve, secure, and defend this great 

nation. Our personnel are faced on a daily basis with a daunting set of mission requirements and challenges. We owe them not only fair compensation and benefits; 

we owe them the capabilities and tools to get the job done. The FY06 budget is 

about placing the right tools in the capable hands of our personnel. They have 

shown time and again that they know just what to do with them. 

With the continued support of the Administration and Congress, and the tremendous people of the Coast Guard, I know that we will succeed in delivering the robust 

maritime safety and security America expects and deserves in its’ Coast Guard well 

into the 21st Century. 

Thank your for the opportunity to testify before you today. I will be happy to answer any questions you may have.

Senator SNOWE. Thank you, Admiral Collins. 

Master Chief Welch? 

STATEMENT OF MASTER CHIEF FRANKLIN A. WELCH, MASTER 

CHIEF PETTY OFFICER, U.S. COAST GUARD 

Chief WELCH. Good morning, Madam Chair and distinguished 

Members of the Subcommittee. 

Thank you so much for the opportunity to present my views in 

support of the servicemembers and their families that I am honored to represent. 

I am very proud of the national contributions made of our work 

force. And, with your support, we have benefited greatly from the 

reductions made between military and private-sector pay gaps of 

years past. The cumulative positive impact of military pay raises, 

coupled with significant reductions of housing expenses, has been 

both timely and well deserved. 

And despite increased personnel tempos experienced by all components of our work force, our recruiting and retention results continue to remain impressive. In Fiscal Year 2004, we slightly exceeded our active-duty recruiting mission, while making significant 

progress to further diversify our work force. Minority accessions totaled 36 percent of our overall recruiting efforts, representing an 

11 percent increase from Fiscal Year 2003. Our reserve accessions 

were equally successful. 

Retention rates also remain extremely high. The current retention rate within the enlisted work force is 89.6 percent, with 1.2 

percent of those accessing into our officer corps. While there are 

15

many factors contributing to our high retention, I view our successes as being key and measurable results of our Commandant’s 

commitment to our people. 

We have invested to nationally advertise and promote the roles 

and missions of the Coast Guard, and we have made great strides 

in providing our people with enhanced professional development 

opportunities. Recent accomplishments include the establishment 

of a command master-chief course, the introduction of a formal enlisted professional military education program, increased throughput of our leadership and management school, the establishment of 

a comprehensive unit leadership development program, and continued aggressive support of tuition assistance funding. 

We consider these human-capital investments key to the continued development of our existing work force and essential for us to 

remain attractive to those contemplating military service. 

We also remain ever mindful of the quality-of-life needs of our 

people. Housing remains a chief concern of our servicemembers and 

their families. While BAH reform has been successful in absorbing 

housing costs incurred by our people who reside in the private sector, we cannot claim total housing success until we can provide our 

people who reside in government-owned quarters with the same desirable and well-maintained housing found on the economy. To that 

end, we have begun privatization in Hawaii, and have privatization 

feasability studies underway in Alaska and Cape May, New Jersey. 

Childcare is also an expensive and problematic issue for our 

servicemembers with children. High childcare costs impact our 

work force throughout all geographical areas, but particularly those 

assigned to locations inaccessible to Coast Guard or Department of 

Defense childcare facilities. We have a childcare study ongoing to 

assess the needs of our people and to identify areas in which we 

may make appropriate interventions. 

Medical and dental-care concerns remain widespread. The majority of our concerns are due to the fact that most of our personnel 

are assigned well beyond the bounds of military treatment-facility 

catchment areas, thereby forcing our members to seek providers, 

which are becoming increasingly difficult to secure. I believe that 

the principal contributing factor to limited provider access is that 

of provider dissatisfaction with healthcare reimbursement rates. 

We continue to work with the Department of Defense to resolve 

these challenges, and we look forward to the implementation of the 

new TRICARE contract, which we hope will rectify some of the 

shortcomings experienced with TRICARE in the past. 

In addition to quality-of-life concerns, we also remain extremely 

committed to the needs of our people in the workplace; specifically 

and most critically, our responsibility to provide our 

servicemembers with safe, reliable, and effective cutters and aircraft from which to operate. Our front-line fleet of cutters continues 

to deteriorate, resulting in significantly degraded readiness capabilities and equally degraded crew morale. Fleet readiness issues 

are having an adverse impact on our presence in the maritime domain, affecting missions from domestic fisheries enforcement to the 

global war on terrorism, and causing our men and women to work 

even harder to overcome the deficiencies associated with our outdated fleet. In fact, if it weren’t for the ingenuity, the profesVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00019 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
16

sionalism, and the sacrifices made of our crews, our cutter fleet 

would not be in service today. 

The long-predicted demise of our fleet can no longer be overcome 

at the expense of our people, and we are very grateful for your support and understanding of the urgency of need for our Deepwater 

Recapitalization Initiative. 

In conclusion, your support of our efforts to transform the United 

States Coast Guard is greatly appreciated. We thank you for your 

service, and I thank you for the opportunity to speak with you 

today. I look forward to answering any questions that you may 

have. 

[The prepared statement of Chief Welch follows:]

PREPARED STATEMENT OF MASTER CHIEF FRANKLIN A. WELCH, MASTER CHIEF PETTY

OFFICER, U.S. COAST GUARD

Madam Chair and distinguished Members of this Subcommittee, I am once again 

very thankful for the opportunity to appear before you to present my views in support of the Coast Guard and the Coast Guard family that I am honored to represent. 

I am very proud of our service members and equally proud and thankful for the tremendous support provided by this Subcommittee during the 108th Congress. I look 

forward to continuing an equally supportive relationship with you and the 109th 

Congress as well. 

I am also grateful for House support of S. 2486, the Veteran’s Benefits Improvement Act of 2004, S. 2484, the Veterans Affairs Health Care Personnel Enhancement Act of 2004, and H.R. 3936, the Veterans Health Programs Improvement Act 

of 2004. Legislative support of these acts formally recognizes the sacrifice and dedication of our many veterans and I ask for your continued support in ensuring that 

the men and women who serve or have served our country, remain well-served by 

our country. 

The Coast Guard has accomplished much in the past year thanks to the dedication and unwavering support of Coast Guard men and women stationed throughout 

this country and assigned globally. I travel extensively to meet with our service 

members, to share information with them, and more importantly to listen to their 

ideas and concerns. These personal interactions enable me to better represent their 

needs and interests. One of the things I hear loud and clear from our troops is how 

they have benefited greatly from the reductions made between the military and private sector pay gaps. The cumulative positive impact of military pay raises coupled 

with significant reductions of out of pocket housing expenses has been well received 

and is certainly well deserved. I believe they are a big reason for our recent workforce retention trends being at record high levels. 

Despite increased operational and personnel tempos by all components of our 

service, our recruiting results continue to remain impressive. In FY 2004, we slightly exceeded (by nine) our active duty-recruiting mission of 3,800 enlisted accessions. 

In addition to meeting our numerical goal we also made significant progress in our 

efforts to further diversify our work force. FY 2004 minority accessions represented 

36 percent of the total. This represents an increase of 11 percent from FY 2003. We 

are enjoying similar success in our critical reserve component accessions. 

Retention rates also remain extremely high. The current retention rate of our enlisted work force is 89.6 percent, with 1.2 percent of those accessing to our officer 

corps. As we continue work force expansion, successful recruiting and retention efforts are mitigating many of the challenges associated with targeted growth endeavors. Growth has produced a temporary service issue that many people refer to as 

‘‘juniority.’’ This means that junior personnel are often filling senior positions, resulting in significant billet to pay grade mismatches. However, I prefer to define the 

situation as one of ‘‘opportunity’’ for the younger members of our Coast Guard, who 

continually impress me with their can-do attitudes and ability to accomplish the 

mission. 

There are many factors driving our high retention rates but I view our retention 

successes as being the key measurable result of our Commandant’s commitment to 

our people. With your budgetary support, he is fulfilling his vision, ‘‘The Coast 

Guard committed to our people... and our people committed to the Coast Guard.’’

There has never been a period during my career in which so many people-oriented 

initiatives have been realized, including: 

17

Raising the Visibility of the Coast Guard 

We have wisely invested in a modern, relevant and attractive branding campaign 

to nationally advertise and promote the roles and missions of the Coast Guard, as 

well as the opportunities afforded the men and women of our service. The Shield 

of Freedom campaign is vitally important in attracting a diverse workforce that will 

lead the Coast Guard in accomplishing its vital Homeland Security missions. 

Providing Professional Development Opportunities 

The Coast Guard is making every effort to better prepare our people for success. 

Recent accomplishments have placed a permanent senior enlisted cadre within the 

U.S. Coast Guard Academy Corps of Cadets for the purpose of providing enlisted 

perspective, mentorship and experienced practical guidance for our future officer 

corps. As I mentioned during last year’s hearing, we were working to establish a 

Command Master Chief course that would better prepare our senior enlisted leaders 

with tools to blend personnel representation and command advisory roles. We piloted that course last year and based on tremendously positive reviews we will continue with the course in FY 2005. The introduction of our much-anticipated Enlisted 

Professional Military Education Program has also been completed with equally positive feedback. We have also significantly increased student throughput for our Leadership and Management School; a course designed to increase the effectiveness of 

our mid-grade enlisted work force and our junior officers. In addition to expanding 

our resident training opportunities, our Leadership Development Center in New 

London, Connecticut, has designed a comprehensive Unit Leadership Development 

Program (ULDP) that is mandatory at the unit level. A subset to the ULDP is the 

first term-first unit requirement to complete an Individual Development Plan that 

was designed by our Command Master Chiefs in concert with our training branch 

at Coast Guard Headquarters. I am proud of collaborative efforts such as these, because they represent a renewed sense of alignment between those with oversight responsibilities and those charged with implementation. 

Providing Personal Development Opportunities. 

Recognizing the importance of continuing education for our people, the Coast 

Guard has continued its support of tuition assistance funding that defers the rising 

cost of education. In FY 2004, the Coast Guard authorized 22,212 courses at an expense of $12.2M. As of 7 January 2005, tuition assistance commitments already totaled $5.1M. We consider these human capital investments key to the development 

of our current work force, and critical to remaining an employer of choice for those 

contemplating Coast Guard service. It is imperative that we remain competitive 

with our sister services of the Department of Defense, thereby underscoring the importance of discretionary funding as provided for in the President’s FY 2006 budget. 

In addition to supporting our people who opt to pursue higher education, we remain 

committed to the health and well being of our Coast Guard men and women. To 

that end, we have mandated use of personal fitness plans for all of our service members as part of the Coast Guard fitness program. 

These initiatives serve to enhance the important sense of self worth of our people 

and I am proud of our focus. We have more to do, but these tangible work force 

enhancements are highly visible to our people and are indicative of our commitment 

to the workforce. Again, I appreciate this Subcommittee’s support that has enabled 

the Coast Guard to remain attractive as a service that values our most important 

asset—our people. 

With your support, the Coast Guard continues to increase its authorized end 

strengths. In the post 9/11 environment it is essential that the principal agency 

charged with maritime safety and security be adequately staffed to perform its 

many missions. We are thankful for the authority to increase work force end 

strengths and we are doing so in the most responsible and deliberate manner. In 

addition to ensuring that we are appropriately staffed to effectively meet our many 

responsibilities, we are also mindful of the many critical quality of life needs of our 

people. 

Military pay is the single-most important quality of life and compensatory issue 

that we face. Without question, the military pay raises of the past four years have 

been a key contributor to accession and retention success. We seek your continued 

support in enabling the armed services to remain competitive with the private sector in order for us to attract and retain the skilled and motivated work force that 

our country must rely upon. 

Housing remains a chief concern of our work force. As advertised, basic allowance 

for housing (BAH) reform has eliminated out of pocket expenses for housing in most 

areas throughout our country and reduced it in all areas; the aggregate impact of 

BAH reform has been to reduce uncompensated housing expenses by approximately 

18

20 percent. This effort is significant, commendable and appreciated by our service 

members and their families who reside in areas in which private sector housing is 

desirable and attainable. We must also remain mindful of the needs of our people 

who do not have access to this ideal housing situation. Throughout my personal engagements with our workforce, I have witnessed first-hand the poor materiel condition of government owned housing units that we mandate for many of our people. 

As this Subcommittee knows, the Coast Guard faces many challenges to address its 

shore infrastructure maintenance and recapitalization programs, and has deferred 

many projects, which is having direct and negative consequences to our service 

members and their families. It also negatively impacts the ability of our single and 

unaccompanied personnel to secure adequate housing because our owned unaccompanied personnel housing (UPH) is often in the same inadequate condition as our 

family housing. 

In an effort to enhance quality of life as it relates to deteriorating shore infrastructure we have expanded our availability of leased housing options to our service 

members who are E–4 and below assigned ashore with less than four years time 

in service. We are also pursuing privatization efforts, including the transfer of 318 

units located at Red Hill, Hawaii, to the U.S. Army. On October 1, 2004, the Army 

subsequently transferred maintenance of their Hawaii inventory (over 7,000 units) 

to Actus Land Leasing with full financial closing and property transfer. In the 

greater New Orleans area, we have entered into a limited partnership with Patrician C.G. LLC. As I have seen during visits to Department of Defense housing facilities, military housing privatization, provides substantial benefits for limited up-front 

government investment. 

We currently have privatization feasibility studies underway in Alaska and Cape 

May, New Jersey. These studies will provide us with an assessment of the ability 

to privatize housing in those locations. The Alaska study, which includes Kodiak, 

Valdez, Cordova (our worst), Sitka, Petersburg and Homer, is scheduled for completion by next spring. The Cape May study will follow closely behind the Alaska 

study. 

We have also deemed areas absent private sector and government owned housing 

as Critical Housing Areas (CHA’s). This designation enables our people to receive 

BAH rates higher than the locales that they are assigned to so that they can afford 

housing in these high demand areas. Although this initiative may encourage family 

separation, the alternative of forced financial hardship is unacceptable. The Coast 

Guard has twelve such CHA designated locations. They are: Eastern Shore, Virginia; Buxton, North Carolina; Montauk, New York; Cape May, New Jersey; Abbeville, Louisiana; Port O’Connor, Texas; Coastal Maine; Carrabelle and Marathon/

Islamorada, Florida; Provincetown, Massachusetts; Oxford, Maryland; and 

Marinette, Wisconsin. Additionally, any area designated as a CHA by the U.S. Navy 

applies to the Coast Guard. 

Child care is also an expensive and problematic issue for our service members 

with dependent children. High child care costs impact our workforce throughout all 

geographical areas but particularly those assigned to locations inaccessible to Coast 

Guard Child Development Centers and/or Department of Defense facilities. Due to 

the typically remote locations in which we serve, it is difficult, if not impossible to 

maintain parity with the other armed services in respects to providing our people 

with quality and affordable child care options. Recognizing the financial burdens 

placed upon our people, we have recently chartered a child care study to assess the 

needs of our work force and to identify areas in which we may make appropriate 

interventions. This is a key quality of life issue and we appreciate your understanding of the impact of the extremely high cost of child care nationwide. 

Medical and dental care issues remain chief and common concerns of our service 

members and their families. As I have testified in the past, these issues affect the 

Coast Guard in unique and sometimes difficult ways. The Coast Guard continues 

to work with the Department of Defense to resolve these challenges, and we are 

looking forward to the implementation of the new TRICARE contract, which we 

hope will help rectify some of the shortcomings we have experienced with TRICARE 

in the past. 

In addition to quality of life concerns and initiatives, we also remain ever mindful 

of the needs of our people in the workplace; specifically our responsibility to provide 

our service members with safe, reliable and effective platforms from which to operate. As I have testified during the past two years, our front-line fleet of cutters continues to deteriorate; resulting in significantly degraded readiness capabilities and 

equally degraded crew morale. It is important to note that during FY 1999, our 

Deepwater fleet experienced 267 unscheduled maintenance days. In FY 2004, the 

fleet had 742 unscheduled maintenance days. This increase does not represent a 

lack of crew effort, but is simply indicative of old cutters and old subsystems—getVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
19

ting even older. Fleet readiness issues are having an adverse impact on our presence in the maritime domain, and our men and women must work even harder to 

overcome the deficiencies associated with our fleet. If it weren’t for the ingenuity, 

professionalism and the sacrifices made of our crews, our cutter fleet would not be 

in service today, and that applies to every class of cutter that we have. The demise 

of our fleet can no longer be overcome at the expense of our people, and as this Subcommittee knows, our Deepwater recapitalization project is essential in order for us 

to meet the demands that face our service today. We are very grateful for your historical support and understanding of our Deepwater initiative and urge your support of the President’s $966M FY 2006 Deepwater request, which includes funds 

both for new vessels and for legacy medium-endurance cutter maintenance to help 

address the problem of our aging fleet. 

To conclude, let me again offer my sincere appreciation to this Subcommittee for 

affording me the opportunity to present my views before you. I trust that the American public is rapidly coming to know the broad range of missions that the Coast 

Guard is responsible for, as well as the global context in which we are involved. I 

could not be prouder of our Coast Guard men and women than I am today. Collectively, our active duty, reservists, civilians, auxiliarists, and their families alike continue to make endless sacrifices to ensure that our service remains ‘‘Always Ready,’’ 

and that our country remains always safe! Mr. Chairman, on behalf of the tens of 

thousands of people that I represent, I am thankful for your service in support of 

our nation’s Coast Guard and I look forward to your continued support as we aggressively transform our service. I welcome any questions that you or this Subcommittee may have.

Senator SNOWE. Thank you, Master Chief. We appreciate it. Urgency is the operative word, you’re correct. 

Chief WELCH. Yes, ma’am. 

Senator SNOWE. Thank you. 

Ms. Wrightson? 

STATEMENT OF MARGARET T. WRIGHTSON, DIRECTOR,

HOMELAND SECURITY AND JUSTICE ISSUES, U.S.

GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. WRIGHTSON. Thank you very much. 

I’m pleased to be here to discuss the President’s 2006 budget request for the Coast Guard. My testimony focuses on GAO’s work 

this past year pertaining to three areas of the budget the Coast 

Guard deems its most important priorities, which the Commandant 

mentioned. 

In summary, I would say the following. Carrying out the Coast 

Guard’s maritime security responsibilities continues to be a 

daunting challenge, one that cannot be ignored or shortchanged. 

Although the Coast Guard has worked hard to get MTSA off the 

ground and build its security presence and domain awareness, 

doing so has significantly impacted operations and strained mission 

capacity and capability. The Coast Guard is pursuing many initiatives that it believes will be force multipliers in these regards. 

However, by doing so much so fast, the Coast Guard has sometimes 

put dollars and programs at risk through less-than-effective design, 

management, and oversight. 

Turning to the most important details. If the Coast Guard’s 

budget request is granted, agency discretionary funding will have 

increased each year since 2002, for a total increase of 45 percent. 

The Coast Guard will now account for 20 percent of DHS’s budget. 

By comparison, the Coast Guard’s performance measures over 

this past period have been more mixed. For the eight mission areas 

where results are currently available, the Coast Guard met half. 

Some misses represent small differences, which I would be happy 

20

to talk about, but others are potentially more significant. In thinking about these year-to-year fluctuations, it is worth noting, as I 

did last year, the difficulties in directly linking resource allocation 

decisions and performance results. For example, to explain performance results for foreign fish, the Coast Guard points to oceanic 

and climatic shifts that alter fish migration patterns and draw foreign vessels into U.S. waters. At the same time, I know the Commandant agrees that there is no doubt that a proactive presence 

is essential. 

Rising budgets and fluctuating performance measures underscore 

how important it is for the Coast Guard to continue to improve its 

measures so they are as robust as possible. Also, the better the 

Coast Guard understands the relationship between resources it 

gets and the results it achieves, the more efficient and effective its 

decision-making will be. 

Regarding the Coast Guard’s efforts to implement an effective 

maritime security regime, since MTSA was enacted the Coast 

Guard has taken determined action to establish a meaningful regime, including reviewing and approving thousands of vessel and 

facility security plans, increasing its security presence at ports, and 

enhancing intelligence capabilities, to name just some. However, 

this past year we raised concerns in a number of areas. For example, whether the Coast Guard would be able to devote sufficient resources to its port security inspection program, and whether inspectors would be qualified, adequately trained, and provided proper guidance. 

Among other things, we urged the Coast Guard to conduct a formal evaluation after the first round of compliance inspections, and 

consider unannounced inspections and covert testing as part of its 

program. In response to this and other suggestions we made, the 

Coast Guard has a number of improvements ongoing. 

A second Coast Guard priority in the 2006 budget is to enhance 

mission performance. Three broad initiatives that deserve particular mention here are the new coastal communications system, 

called Rescue 21, a new field command structure, called sectors, 

and efforts to improve readiness of multi-mission boat stations, formerly known as small boat stations. All three carry risk. I will 

mention only the second. 

While there is no doubt that sectors would improve performance 

and efficiency at the Coast Guard, flexibility and attention to details will also be important. For example, I was in San Diego a couple of weeks ago, and it appears quite clear that that pilot is successful. But in San Diego—but the fact is that San Diego’s key 

units were already co-located, and there was a strong history of 

communication and partnership there. In other cases, commands 

are physically separated, and there is stovepipe culture between 

operations and marine-safety offices. Thus, a relatively easy transition in one case may not translate into a smooth transition in all. 

The third priority is recapitalizing the Coast Guard, but I will 

focus on just Deepwater. The Coast Guard is requesting nearly a 

billion dollars for this program this year. Last year, we reported 

that, well into the second year, key components needed to manage 

the program and oversee the contractor had not yet been effectively 

implemented. The Coast Guard also had not updated its master 

21

schedule, and costs were rising above original estimates. More recently, we have seen schedule slippages, such as for the nationalsecurity cutter, and emergency accelerations, such as for the HH–

65. Unobligated balances are also growing. Finally, we have also 

seen at least one instance of a serious performance problem, at 

least initially; this being the hull breaches on the first converted 

123-foot patrol boats. 

We have made numerous recommendations to improve the program’s management and oversight, and the Coast Guard has 

agreed with every one. In most cases, however, while actions are 

underway to address our concerns, management issues remain that 

will take some time to resolve. 

Additionally, there is uncertainty around the recently revised 

mission-needs statement, which will almost certainly increase costs 

and require further schedule adjustments once the implementation 

plan is approved. 

Finally, any look at the Coast Guard’s budget would be incomplete without a discussion of its legacy assets. As of Fiscal Year 

2005, the Coast Guard had requested 856 million in total, and this 

number could rise significantly. While we are not questioning the 

agency’s decisions about which projects should receive priority, we 

believe it is important for the Coast Guard to make Congress 

aware, very aware, of the magnitude of the potential funding needs 

and to provide greater transparency. This summer, we will issue a 

report to you, Madam Chairman, on this subject. 

In conclusion, the Coast Guard’s 2006 budget request reflects the 

continuing importance the Administration attaches to the Coast 

Guard’s missions, especially those related to the homeland security. 

Our recent work indicates that such funding increases may be warranted, given the condition of the Coast Guard’s aging assets and 

the fact that the systems needed to improve maritime domain 

awareness and security were either inadequate or nonexistent prior 

to September 11th. Nevertheless, as GAO’s work this past year 

bears out, dramatic infusions of money bring added risk that too 

much will be attempted too fast. 

We look forward to continuing with your Subcommittee to mitigate these risks through productive oversight and engagement with 

the Coast Guard. 

Thank you very much. 

[The prepared statement of Ms. Wrightson follows:]

PREPARED STATEMENT OF MARGARET T. WRIGHTSON, DIRECTOR, HOMELAND

SECURITY AND JUSTICE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

Madame Chair and Members of the Subcommittee: 

I am pleased to be here today to discuss the President’s Fiscal Year 2006 budget 

request for the Coast Guard, focusing on three priority areas the Coast Guard believes are critical to improving performance and reducing vulnerabilities within the 

U.S. maritime domain. As you know, the Coast Guard continues to face extraordinary, heightened responsibilities to protect America’s ports, waterways, and waterside facilities from terrorist attacks, while also maintaining responsibility for 

many other programs important to the nation’s interests, such as helping stem the 

flow of illegal drugs and illegal immigration, protecting important fishing grounds, 

and responding to marine pollution. At the same time, the Coast Guard is adjusting 

to its new home in the Department of Homeland Security (DHS) and attempting to 

manage the largest acquisition in its history, replacing or upgrading virtually all of 

its deepwater assets (ships and aircraft capable of operating further out to sea). It 

is an understatement to say that the Coast Guard has a lot going on. In recognition 

22

of this, the Coast Guard has received substantial budget increases since the terrorist attacks on September 11, 2001. 

My testimony today provides a brief overview of the Coast Guard’s budget and 

performance information, and then discusses key Coast Guard programs and activities within the context of a three-part framework that the Coast Guard outlines in 

its Fiscal Year 2006 budget documents. The Coast Guard believes that funding 

three priority areas—implementing the maritime strategy for homeland security, 

enhancing mission performance, and recapitalizing the Coast Guard—are essential 

to best position the agency to implement the President’s strategies and reduce 

vulnerabilities in the U.S. maritime domain. My testimony is based on a number 

of reviews we have conducted in recent years on several Coast Guard programs. 

(See app. II for a listing of recent reports.) Our work for this testimony has been 

conducted from February 2005 to March 2005 in accordance with generally accepted 

government auditing standards. (See app. I for additional information regarding our 

scope and methodology.) 

In summary, the 2006 request reflects the continuing importance the administration attaches to the Coast Guard’s missions—especially those that relate to homeland security. Our recent work indicates that funding increases may be warranted, 

given the condition of the Coast Guard’s aging assets and the fact that the systems 

and processes the agency needs to improve maritime domain awareness and security 

were either inadequate or nonexistent prior to the terrorist attacks. Nevertheless, 

as our work also has shown, dramatic infusions of money do not guarantee success, 

but bring added responsibility to ensure that these large investments of taxpayer 

dollars are wisely spent. The risk that an agency may simply attempt to do too 

much and do it too quickly is increased when an agency faces as many significant 

new heightened responsibilities as the Coast Guard. We have not evaluated the 

Coast Guard’s priorities or whether the funding levels proposed are those needed 

to accomplish these priorities. However, our work does show that in key areas the 

Coast Guard has not always paid as much attention to program design and management as it should. These design and management issues can often have implications 

for how effectively money is spent. My testimony focuses on findings from our recent 

work as they relate to each of the Coast Guard’s three priority areas, the recommendations we made, the progress that the Coast Guard has made in addressing 

them, and the issues that remain. First, I would like to put the Fiscal Year 2006 

budget request in a historical context and also provide some perspective on the 

Coast Guard’s reported performance results. 

Funding Has Escalated in Recent Years, but Is Difficult to Link to

Performance Results 

The Coast Guard’s 2006 budget request continues a trend of increasing budgets 

that began in Fiscal Year 2002, as figure 1 shows.

23

1The $8.1 billion request for the Coast Guard represents 20 percent of the Department of 

Homeland Security’s budget request for Fiscal Year 2006. 2This calculation is based on the Coast Guard’s discretionary funding and, for comparison 

purposes, removes the Fiscal Year 2005 hurricane supplemental ($33 million) and adds in the 

anticipated Fiscal Year 2006 reimbursements for polar icebreaking ($47.5 million) and research, 

development, test and evaluation ($24 million). 

If the Coast Guard’s full budget request is granted, its funding will have increased 

by 45 percent in nominal terms in this 5-year period. A major portion of this growth 

will have occurred in the acquisition, construction, and improvements account, 

which grew 81 percent in nominal dollars between the Fiscal Year 2002 actual funds 

and the Fiscal Year 2006 requested funds—a $568 million increase. Much of this 

increase can be attributed to two major acquisition projects—Deepwater and Rescue 

21. Deepwater is the Coast Guard’s largest-ever acquisition program. It replaces or 

modernizes cutters, aircraft, and communications equipment for missions that require mobility, extended presence on scene, and the capability of being deployed 

overseas. Rescue 21, the Coast Guard’s second largest procurement in Fiscal Year 

2006, will replace the Coast Guard’s current antiquated coastal communication system. 

The Fiscal Year 2006 budget request shows a $570 million increase to $8.1 billion, 1 which is an increase of about 11 percent in its discretionary funding over the 

enacted budget for Fiscal Year 2005. 2 The majority of the total is for operating expenditures: $5.5 billion. Capital acquisition accounts for another approximately $1.3 

billion, and the remainder is primarily for retired pay. (See app. III for more detail 

on the Coast Guard’s Fiscal Year 2006 budget accounts.) Much of the additional 

$570 million over and above the 2005 budget covers such things as mandatory pay 


317gao1.eps
24

3Pursuant to the Government Performance and Results Act of 1993 (Pub. L. 103–62, 107 Stat. 

285 (1993)), performance indicators are to be used to assess relevant outputs, service levels, and 

outcomes of each program activity. Performance targets or goals are defined as a set of annual 

goals that establish the agency’s intended performance, stating a particular level of performance 

in either an absolute value or as a targeted level of improvement. 4For homeland security (called ports, waterways, and coastal security), performance measures 

are still under development. 5 According to the Coast Guard, performance results for Fiscal Year 2004 are not available 

for two programs. They are: (1) marine safety—Fiscal Year 2004 performance results will not 

be available until spring 2005, when the recreational boating data is reported; and (2) illegal 

drug interdiction—Fiscal Year 2004 results will be calculated and released once illegal drug flow 

information for Fiscal Year 2004 is known—sometime in the spring of 2005.

increases for current employees and operating expenses for existing programs—

many of which relate to homeland security functions. In addition, more than $50 

million of the increase would fund new or enhanced initiatives, all of which relate 

to homeland security. For example, a portion of this funding would be dedicated to 

increasing maritime patrol aircraft operations, increasing the Coast Guard’s presence in ports, and providing enhanced security for liquefied natural gas transports. 

Of the nearly $1.3 billion requested for capital projects, $966 million, or 76 percent, 

would be dedicated to the Deepwater acquisition, while $101 million would be dedicated to Rescue 21. 

By comparison with the pattern of budget increases, performance results—indicators that track a program’s progress from year to year—have been more mixed in 

terms of the number of performance targets met each year. 3 (See app. IV for a detailed discussion of the Coast Guard’s performance measures and results.) The 

Coast Guard has a key performance target—the goal it aims to achieve each year—

for 10 of its 11 programs. 4 For search and rescue, for example, its target is to save 

the lives of at least 85 percent of mariners in distress. For the 8 programs with performance results through Fiscal Year 2004, 5 the Coast Guard met or exceeded its 

targets in 4—a decline from the 2003 results, when the Coast Guard met 6 of these 

targets (see fig. 2). Such changes can involve relatively small shifts in results. For 

example, in Fiscal Year 2004, 96.3 percent of domestic fishermen were found to be 

in compliance with regulations, compared with 97.1 percent the year before—but the 

percentage for Fiscal Year 2004 was below the Coast Guard’s target of 97.0 percent, 

while the percentage for Fiscal Year 2003 was above it. 

25

6GAO, Coast Guard: Key Management and Budget Challenges for Fiscal Year 2005 and Beyond, GAO–04–636T (Washington, DC: April 7, 2004); and Coast Guard: Relationship between 

Resources Used and Results Achieved Needs to Be Clearer, GAO–04–432 (Washington, DC: 

March 22, 2004). 7Pub. L. 107–295, 116 Stat. 2064, (2002). 

As we have reported in the past, it is difficult to link spending and resource allocations to performance and results, because many other factors also are at work. 6

For example, one of the Coast Guard’s measures—the number of incursions into 

U.S. fishing grounds by foreign fishing vessels—is affected by oceanic and climatic 

shifts that can cause fluctuations in the migrating patterns of fish. The number of 

foreign vessels drawn to U.S. waters could be affected by these fluctuations. In addition, the Coast Guard is still developing its performance measures and targets for 

its primary homeland security program, so this major reason for funding increases 

is not yet reflected in the results. These complicating factors suggest caution in attempting to read too much into the Fiscal Year 2004 drop. Nevertheless, attention 

to these trends over the long term is important, as a way to help ensure that taxpayer dollars are spent wisely. 

Efforts Made on Coast Guard’s Maritime Security Strategy Show Promise, 

but Concerns Remain 

One of the Coast Guard’s Fiscal Year 2006 priorities involves implementing a 

maritime strategy for homeland security. Major portions of this endeavor are heavily influenced by the requirements of the Maritime Transportation Security Act 

(MTSA) of 2002. 7 We have reviewed the Coast Guard’s response to a number of 

these requirements, and our findings have implications for several aspects of the 

budget request. 

MTSA seeks to establish a comprehensive security regime for the nation’s ports—

including planning, personnel security, and careful monitoring of vessels and 

cargo—and charges the Coast Guard with lead responsibility for implementing this 

regime. Since MTSA was enacted, the Coast Guard has worked to address 

vulnerabilities by spurring the development of meaningful security plans for thousands of facilities and vessels in the nation’s ports. The Coast Guard has taken 


317gao2.eps
26

8GAO, Maritime Security: Partnering Could Reduce Federal Costs and Facilitate Implementation of Automatic Vessel Identification System, GAO–04–868 (Washington, DC: July 23, 2004); 

Maritime Security: Better Planning Needed to Help Ensure an Effective Port Security Assessment 

Program, GAO–04–1062 (Washington, DC: September 30, 2004); and Maritime Security: Substantial Work Remains to Translate New Planning Requirements into Effective Port Security, GAO–04–838 (Washington, DC: June 30, 2004). 9The other instances are (1) The Coast Guard has a contract with the Port Graham Development Corporation (an Alaskan Native corporation) in partnership with the Marine Exchange of 

Alaska to deploy and manage a network of AIS receivers at 11 locations in Alaska; (2) the Volpe 

Transportation Systems Center approached the Coast Guard to offer its assistance in facilitating 

many other actions as well, including establishing area maritime security committees to improve information sharing, increasing port presence through increased security patrols, enhancing intelligence capabilities by establishing field intelligence 

teams in ports, and beginning to implement an electronic identification system for 

vessels in the nation’s ports. As we have reported, the Coast Guard deserves credit 

for taking fast action on so many MTSA security provisions at once, especially with 

regard to MTSA’s aggressive requirement that regulated facilities and vessels have 

security plans in place by July 2004. 8 However, the combination of so many reforms 

and an aggressive schedule posed a daunting challenge, and our review of Coast 

Guard efforts to meet these requirements showed some areas for improvement 

where we have made recommendations—most notably the following three from reports issued in 2004. 

• Automatic Identification System (AIS) has potential for cost savings. National 

development of this system, which identifies vessels traveling to or through U.S. 

waters, is an important step in the overall effort to increase port safety and security. The Coast Guard faced several key decisions to determine AIS’s technical requirements, waterway coverage, and vessels to be equipped with identification equipment. Estimates to establish such a system, however, were well 

above funding levels. We thought the goals of the system might be achieved 

more quickly and the costs to the Federal Government reduced by pursuing 

cost-sharing options. Consequently, we recommended that the Coast Guard seek 

and take advantage of partnerships with organizations willing to develop AIS 

systems at their own expense.

• Port security assessments could be more useful. The port security assessment 

program is intended to assess port vulnerabilities and security measures in the 

nation’s 55 most economically and militarily strategic ports. Our review showed 

that while some improvements were made, the Coast Guard risked producing 

a system that was not as useful as it could have been because its approach 

lacked a defined management strategy, specific cost estimates, and a clear implementation schedule. A major factor of the program—a computer-based geographic information system that would provide information to personnel in 

charge of port security—was developed in such a way that gaps in port security 

postures could be overlooked. We recommended that the Coast Guard define 

and document the functional requirements for this computer system and develop a long-term project plan for the system and for the port security assessment program as a whole.

• The Coast Guard’s strategy for conducting oversight and compliance inspections 

of facilities and vessels could be improved. Because the program was new, we 

recommended that the Coast Guard undertake a formal evaluation after the 

first round of inspections and use the results to improve the program. The evaluation was to include the adequacy of security inspection staffing, training, and 

guidance. To improve the program strategy, we also recommended that the 

Coast Guard clearly define the minimum qualifications for inspectors and link 

these qualifications to a certification process, as well as consider unscheduled 

and unannounced inspections, and covert testing as a way to ensure that the 

security environment at the nation’s seaports met the nation’s expectations.

The Coast Guard agreed with many of our recommendations and has made 

progress in implementing some of them, but the remaining issues have implications 

for the availability of funds or the effectiveness with which available funds are 

spent.

• AIS. Coast Guard officials have taken a number of steps to encourage stakeholder participation, although they have not formally sought AIS partners to 

date. For example, the Coast Guard has a contract with PETROCOMM (a provider of communications services in the Gulf of Mexico) to provide locations, 

maintenance, and data services for several AIS base stations on offshore platforms in the Gulf of Mexico. 9 The Coast Guard believes that it is too early to 

27

partnerships. (This was done in response to GAO–04–868.) The Coast Guard entered into an 

agreement with Volpe for the provision of a variety of support for AIS services, including its 

help in setting up AIS capability in areas where partnerships may be of assistance. 10 Agency officials reported that they are focusing resources on making the initial inspection 

of the nearly 10,000 vessels subject to MTSA requirements. Coast Guard officials say the agency 

is using unscheduled or unannounced spot checks for facilities, and for foreign vessels. However, 

we have not assessed the extent to which this has occurred. 11 As a result of these delays, $40 million in Fiscal Year 2005 funds were reprogrammed within the Coast Guard from Rescue 21 to other purposes, and an additional $16 million was rescinded.

consider partnerships beyond these initial efforts, because the Coast Guard is 

still developing operational requirements for AIS systems and vetting these requirements with stakeholders and Coast Guard field units. However, Coast 

Guard officials also reported that in their discussions with private parties, these 

parties have shown little interest in shouldering any of the financial burden associated with achieving AIS capability. The Coast Guard estimates that the installation of AIS nationwide could cost nearly $200 million. The Fiscal Year 

2006 budget requests $29.1 million for this project, in addition to the $48 million previously enacted ($24 million per year in Fiscal Years 2004 and 2005)—

leaving a substantial sum to be financed. 

Port security assessments. Coast Guard officials said they are working with the 

Department of Homeland Security to determine the focus and scope of the Fiscal 

Year 2006 port assessments and are taking into consideration the progress being 

made by ports to identify shortcomings and improve security. However, the Coast 

Guard continues to move forward with the overall program, as well as the geographic information system, without a plan that clearly indicates how the program 

and its information component will be managed, what they are expected to cost, or 

when the various work steps should be completed. The lack of a plan, in our view, 

increases the risk that the program will be unsuccessful. In response to our recommendation, the Coast Guard has indicated that it will develop a long-term plan 

for the port security assessment program but they did not indicate when this effort 

will begin or when they expect a plan to be completed.

• Strategy for ensuring facility and vessel compliance. The Coast Guard has taken 

a number of actions but has not focused its resources on doing unscheduled or 

unannounced spot checks to verify whether domestic vessels are complying with 

requirements. 10 We continue to believe that without unscheduled inspections, 

vessel owners and operators can mask security problems by preparing for the 

annually announced inspections in ways that do not represent the normal 

course of business. Unannounced inspections are a way of ensuring that planning requirements translate into security-conscious behavior. 

Three Efforts to Enhance Mission Performance Bear Watching 

A second Coast Guard priority is to enhance mission performance. Many Coast 

Guard personnel and assets are involved in performing multiple missions. For example, Coast Guard cutters and crews may be involved with fisheries patrols, distress calls, oil spills, stopping and boarding vessels of interest, and many other 

tasks. In Fiscal Years 2005 and 2006, the Coast Guard plans to continue developing 

several initiatives that agency officials believe will yield increased performance 

across multiple Coast Guard missions over time. Three initiatives, in particular, deserve mention. These are a new coastal communication system, called Rescue 21; 

a new field command structure, called Sectors; and efforts to improve readiness at 

multimission stations that conduct search and rescue as well as other missions. All 

three efforts carry some risk and will merit close attention.

• Rescue 21. The Coast Guard has resolved some initial development problems 

that delayed the implementation of this new coastal command and control communication system and is now poised to move forward again, with a Fiscal Year 

2006 budget request of $101 million. According to Coast Guard officials, Rescue 

21 can improve coastal command and control communications and interoperability with other agencies, helping to improve not only search and rescue efforts but also other missions such as illegal drug and migrant interdiction. The 

program is composed of very-high-frequency-FM radios, communication towers, 

and communication centers. Rescue 21 was originally scheduled to be ready for 

operational testing by September 2003, but this was delayed because of problems in developing system software. Operational testing of this software has 

been completed. 11 The program is now set—once additional Coast Guard and 

DHS approvals are obtained—to move into its next phase of production, and the 

28

12Pub. L. No. 91–190, 83 Stat. 852 (1970) (environmental impact statements provision found 

at 42 U.S.C. § 4332(2)(c)). 13To help address these concerns, the Coast Guard has agreed to support U.S. Fish and Wildlife Service’s studies examining what can be done to prevent birds from hitting the towers or 

supporting wires. In response to the Fish and Wildlife Service’s concerns, the Coast Guard has 

adapted the night lighting on the towers to make the towers more visible for the birds and has 

used towers that do not require support wires. 14Sectors will be organized along existing Captain of the Port zones. The eight established 

sectors as of March 1, 2005, are in Boston, Baltimore, San Diego, Honolulu, Miami, Key West, 

San Juan (Puerto Rico), and Guam.

Coast Guard anticipates that the program will be operational by the end of 

2007. 

According to the Coast Guard, one risk that remains in moving ahead with Rescue 

21 involves locating sites for about 330 towers that must be built. The Coast Guard 

must locate these towers in accordance with the requirements of the National Environmental Policy Act of 1969 (NEPA), as amended, which requires federal agencies 

to prepare an environmental impact statement for major federal actions that may 

significantly affect the quality of the human environment. 12 Towers can have environmental effects; for example, when they are built in migratory bird locations, 

birds can fly into the towers or their supporting wires. Additionally, for effective 

communications, each tower must be placed in a way that one tower’s coverage 

meets the next tower’s coverage without interference. Thus, if one tower must be 

moved for environmental reasons, neighboring towers may also have to be moved—

leading to a potential for schedule slippage, if additional sites must be identified and 

developed. The NEPA process represents the Rescue 21 program’s greatest risk, according to a program official. 13

• Sectors. This is a new field command structure that will unify previously disparate Coast Guard units such as air stations, groups, and marine safety offices 

into integrated commands. This effort is a budget neutral effect in the Fiscal 

Year 2006 request, but it bears attention for operational effectiveness reasons. 

The Coast Guard is making this change to improve mission performance 

through better coordination of Coast Guard command authority and resources 

such as boats and aircraft. Under the previous field structure, for example, a 

marine safety officer who had the authority to inspect a vessel at sea or needed 

an aerial view of an oil spill as part of an investigation would often have to coordinate a request for a boat or aircraft through a district office, which would 

obtain the resource from a group or air station. Under the Sector realignment, 

these operational resources will be available under the same commanding officer. To date, 8 sectors have been established, with approximately 28 to be established by the end of 2006. 14 According to Coast Guard personnel, the realignment is particularly important for meeting new homeland security responsibilities, and will facilitate the Coast Guard’s ability to manage incidents in close 

coordination with other federal, state, and local agencies. 

While the establishment of Sectors appears to be an important step that could 

positively affect the Coast Guard’s mission performance, the Coast Guard is likely 

to face a number of implementation challenges that it will need to overcome to help 

ensure success. First, Sectors change a longstanding cultural divide within the agency. This divide has separated those personnel who typically operate aircraft and 

boats from those personnel who typically enforce marine safety, security, and environmental protection laws. Second, it has implications for alignment above the field 

operations level as well. Realignment is likely to be needed at the district office and 

headquarters levels to help ensure that management misalignments among these 

levels do not pull the field reorganization off track. Third, it will likely require training, such as taking steps to ensure that senior commanders are aware of key issues 

critical for decision making across the various Coast Guard mission areas. Coast 

Guard officials acknowledge these challenges but believe that the culture challenge 

will be overcome in time as a result of increased familiarity and training. They also 

acknowledged that further realignments at the district and headquarters levels are 

likely to be needed over time and that efforts are under way to implement training 

changes.

• Multimission stations. Another area where the Coast Guard has an opportunity 

to improve mission performance involves its 188 multimission stations. These 

stations located along the nation’s coastlines and interior waterways have been 

the mainstay of one of the Coast Guard’s oldest missions—finding and rescuing 

mariners in danger. In 2001, after a series of search and rescue mishaps, the 

Coast Guard began efforts to improve station readiness, which had been declinVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00032 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
29

15GAO, Coast Guard’s Acquisition Management: Deepwater Project’s Justification and Affordability Need to Be Addressed More Thoroughly, GAO/RCED–99–6 (Washington, DC: October 26, 

1998); GAO, Coast Guard: Progress Being Made on Deepwater Project, but Risks Remain, GAO–

01–564 (Washington, DC: May 2, 2001); and GAO, Contract Management: Coast Guard’s Deepwater Program Needs Increased Attention to Management and Contractor Oversight, GAO–04–

380 (Washington, DC: March 2004). 16For purposes of this testimony, we use the term ‘‘legacy assets’’ to refer to the existing fleet 

of deepwater aircraft and cutters. These legacy assets include the HC–130, HU–25, HH–60, and 

HH–65 aircraft and the 378-foot high-endurance cutters, the 210-foot and 270-foot medium-endurance cutters, and the 110-foot and 123-foot patrol boats. We did not include the 213-foot 

Acushnet, the 230-foot Storis, or the 282-foot Alex Haley as part of our analyses of the deepwater 

legacy assets because they are one-of-a-kind vessels. 

ing for more than 20 years. This included reconfiguring operations and bolstering resources in four areas—staffing, training, boats, and personal protection equipment used by personnel during operations, such as life vests and survival suits. This effort was complicated by the new and increased homeland security responsibilities that stations assumed after the terrorist attacks of September 11.

Today, 4 years after efforts began to improve station readiness, there have been 

operational improvements in staffing, training, boats, and personal protection equipment, as well as increases in resource levels at stations. However, even though readiness concerns have been mitigated to some extent, the stations have still been unable to meet standards and goals relating to staffing, boats, and equipment, which 

indicates that the stations are still significantly short of desired readiness levels in 

some areas. For example, even though station staffing has increased 25 percent 

since 2001, station personnel continue to work significantly longer hours than are 

allowed under the Coast Guard’s work standards. 

To address continued readiness concerns, actions are needed in two areas, and the 

Coast Guard says that it has such efforts underway. Currently, the Coast Guard 

does not have an adequate plan in place for achieving and assessing readiness in 

its new post-September 11 operating environment. The Boat Forces Strategic Plan—

the Coast Guard’s strategy for maintaining and improving essential multimission 

station capabilities over the next 10 years—is the agency’s main tool for measuring 

progress in meeting station readiness requirements, but it has not been updated to 

reflect increased homeland security responsibilities. However, Coast Guard officials 

recently reported that they will update the plan to reflect its homeland security mission and identify actions taken and results achieved. Second, the Coast Guard is operating under interim homeland security guidelines, which establish recommended 

security activities for field units according to each maritime security threat level. 

Coast Guard officials said they would incorporate measurable station readiness 

goals into the plan. The Coast Guard plans to complete these efforts in the next 6–

9 months. 

Important but Costly Programs for Maintaining and Recapitalizing

Deepwater Assets Need Careful Monitoring 

The third Coast Guard priority involves the single largest and most complex acquisition program in the agency’s history—a project designed to improve the mission 

performance of the range of cutters and aircraft that currently conduct the agency’s 

offshore missions. We have previously reported on the risky approach for this acquisition, 15 and although progress has been made to address our past recommendations, the risks still remain substantial. As it undergoes a transformation to these 

new or upgraded assets, the Coast Guard is also faced with sustaining its legacy 

assets 16 to ensure that they can continue to perform the Coast Guard’s missions 

until new or upgraded assets are in place. Revisions to the Coast Guard’s mission 

requirements for Deepwater, slippages in the acquisition schedule, and limited information about the condition of and likely costs for maintaining the legacy assets all 

highlight the need for continued attention to this area. 

Deepwater Acquisition Involves a Major Recapitalization of the Coast Guard 

In 1996, the Coast Guard initiated a major recapitalization effort—known as the 

Integrated Deepwater System—to replace or modernize the agency’s deteriorating 

aircraft and cutters. These legacy assets are used for missions that require mobility, 

extended presence on scene, and the capability of overseas deployment. Examples 

of such missions include interdicting illegal drug shipments or attempted landings 

by illegal aliens, rescuing mariners in difficulty at sea, protecting important fishing 

grounds, and responding to marine pollution. The Deepwater fleet consists of 187 

fixed-wing aircraft and helicopters, and 88 cutters of varying lengths. As currently 

designed, the Deepwater program replaces some assets (such as deteriorating cutVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00033 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
30

17 Current plans call for the Coast Guard to replace all of its deepwater legacy cutters and 

patrol boats, beginning with the 378-foot cutters. The Coast Guard also plans to replace the 

HU–25 aircraft, but will upgrade the existing HC–130 aircraft, and HH–60 and HH–65 helicopters to extend their service lives. 18GAO–01–564 and GAO–04–636T. 19GAO–01–564 and GAO/RCED–99–6. 20GAO–04–636T. 21GAO–04–380. 

ters) with new ones while upgrading other assets (such as some types of helicopters) 

so that all of the assets can meet new performance requirements. 17

In an effort to maintain its existing assets until the Deepwater assets are in 

place, the Coast Guard is conducting extensive maintenance work. Notwithstanding 

extensive overhauls and other upgrades, a number of the cutters are nearing the 

end of their estimated service lives. Similarly, while a number of the deepwater legacy aircraft have received upgrades in engines, operating systems, and radar and 

sensor equipment since they were originally built, they too have limitations in their 

operating capabilities. For example, the surface search radar system on the HC–130 

long-range surveillance aircraft is subject to frequent failures and is quickly becoming unsupportable. Flight crews use this radar to search for vessels in trouble and 

to monitor ships for illegal activity, such as transporting illicit drugs or illegal immigrants. When the radar fails, flight crews are reduced to looking out the window 

for targets, greatly reducing mission efficiency and effectiveness. A flight crew in 

Kodiak, Alaska, described this situation as being ‘‘like trying to locate a boat looking 

through a straw.’’ We have been reviewing the condition of Coast Guard Deepwater 

assets for a number of years, and our work has shown that a need exists for substantial replacement or upgrading. 18 We have additional work underway this year 

regarding the status of Deepwater assets, and will be testifying on this work next 

month. 

Deepwater Contracting Approach Remains Risky 

While we agree that the case for replacing and upgrading the Coast Guard’s legacy assets is compelling, the contracting strategy the agency is using to conduct this 

acquisition carries a number of inherent risks. This strategy relies on a contractor—

called the system integrator—to identify and deliver the assets needed to meet a 

set of mission requirements the Coast Guard has specified, using tiers of subcontractors to design and build the actual assets. The resulting program is designed 

to provide an improved, integrated system of aircraft, cutters, and unmanned aerial 

vehicles to be linked effectively through systems that provide command, control, 

communications, computer, intelligence, surveillance, reconnaissance, and supporting logistics. However, from the outset, we have expressed concern about the 

risks involved with this approach because of its heavy reliance on a steady funding 

stream over several decades and the potential lack of competition to keep contracting costs in line. 19

These risks have had tangible effects, including rising costs and slipped schedules. 

Early on in our reviews of the program, we expressed concern that the Coast Guard 

risked schedule slippages and cost escalation if project funding fell short of planned 

funding levels. These concerns materialized in the first 2 years of the program, 

when appropriated funding was $125 million less than planned for. And, although 

funding in the fourth year of the program (Fiscal Year 2005) exceeded the Coast 

Guard’s request by about $46 million, the early shortfalls, according to the Coast 

Guard, resulted in schedule slippage and led to increases in the total projected costs 

for the program. As of spring 2004, it was estimated that an additional $2.2 billion 

(in nominal dollars) would be needed to return the program to its original implementation schedule. 20 In addition, there is clear evidence that the asset delivery 

schedule has also slipped. For example, under Deepwater’s original schedule, the 

first major cutter, the National Security Cutter was due to be delivered in 2006; the 

current schedule indicates that it will now not be delivered until 2007. Similarly, 

the first nine Maritime Patrol aircraft were due to be delivered in 2005; now only 

two will be delivered in 2007. 

When we reviewed the Deepwater program again last year, we found that, on 

many fronts, the Coast Guard was not doing enough to mitigate these risks. For example, we found that well into the contract’s second year, key components needed 

to manage the program and oversee the system integrator’s performance had not 

been effectively implemented. 21 We also reported that the degree to which the program was on track could not be determined, because the Coast Guard was not upVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00034 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
31

22GAO, Coast Guard: Deepwater Program Acquisition Schedule Update Needed, GAO–04–695 

(Washington, DC: June 14, 2004).

dating its schedule. 22 We detailed needed improvements in a number of areas, 

shown in table 1. 

The Coast Guard agreed with nearly all of our recommendations and has since 

made progress in implementing some of them. In most cases, however, while actions 

are under way to address these concerns, management challenges remain that may 

take some time to fully address. Here are some examples.

• Strengthening integrated product teams. These teams, the Coast Guard’s primary tool for managing the program and overseeing the contractor, consist of 

members from subcontractors and the Coast Guard. In 2004, we found these 

teams often lacked training and in several cases lacked charters defining clearly 

what they were to do. Most now have charters setting forth the team’s purpose, 

authority, and performance goals, among other things, and more training is now 

being provided. However, roles and responsibilities in some teams continue to 

be unclear, and about one-third of team members have yet to receive entry-level 

training. 

Holding the systems integrator accountable for competition. The Coast Guard has 

taken a number of steps to improve cost control through competition. For example, 

to improve competition among second-tier suppliers, Coast Guard officials said they 

will incorporate an assessment of the steps the system integrator is taking to foster 

competition at the major subcontractor level as one of the factors they take into account in deciding whether to award the first contract option. 

Besides the risks noted in table 1, the program also bears careful watching because it is still being affected in midcourse by the Coast Guard’s additional homeland security responsibilities. Planning for the Deepwater program had been set in 

motion before the terrorist attacks of September 11, and while the initial program 

included consideration of homeland security responsibilities, these responsibilities 

have grown considerably in the interim. In March 2004, the Coast Guard developed 

a revised mission needs statement (MNS) that indicated that current specifications 

for Deepwater assets lacked some functional capabilities needed to meet mission requirements. The MNS was approved by DHS in January 2005. 

According to the Coast Guard, some of the functional capabilities now deemed to 

be required include the following:

• Rotary wing airborne use of force and vertical insertion/vertical delivery capability;

• Greater speed, a larger flight deck, and automated defensive and weapons systems for the National Security Cutter and Offshore Patrol Cutter classes;


317gao3.eps
32

23 According to the MNS, the original estimated acquisition, construction, and improvement costs were bracketed at between $7.5 billion to $15 billion in Fiscal Year 1998 dollars. It then 

notes that current Deepwater projections show an approximately $16 billion cost for a 20-year 

implementation plan. However, GAO reported in April 2004 that the costs for the Deepwater 

program would reach $17 billion under the funding stream that the Coast Guard projected that 

it would need to complete the program in 20 years. 24GAO–04–695. 25 Not maintaining a current and integrated schedule lessens the Coast Guard’s ability to 

monitor the system integrator’s performance and take early action to resolve risks that could 

become problems later. Maintaining such a schedule is an industry best practice; the Department of Defense is required to do so in order to be able to report any breaches in cost, schedule, 

or performance targets. Deepwater performance monitors (the contracting officers’ technical representatives who represent the contracting officer in monitoring the contractor’s performance) 

have likewise expressed concern that the Coast Guard lacks adequate visibility to scrutinize 

schedules for component-level items which prevents reliable forecasting and risk analysis. 

• A common operating picture (COP) for the entire Coast Guard (and maritime 

ports of a unified Department of Homeland Security COP), an interoperable network to improve performance in all mission areas, and a Secure Compartmentalized Information Facility for improved intelligence capabilities; and

• Chemical, biological, radiological defense and decontamination capability for selected Deepwater assets.

While we have not conducted an analysis of the likely cost and schedule impact 

of the revised MNS requirements, they undoubtedly will have an effect on cost and 

schedule. The Coast Guard’s own estimates identified in the March 2004 MNS show 

an increased acquisition cost for the original 20-year acquisition of about $1 billion. 23 According to the Coast Guard, the revised MNS requirements and associated 

cost and schedule information have been forwarded to the Department of Homeland 

Security (DHS) and the Office of Management and Budget for approval. As of this 

time, the implementation plan has not been approved. 

These issues point to the need for continued and careful monitoring of the Deepwater acquisition program both internally and externally. One positive development 

in this regard involves the Coast Guard’s efforts to update the Deepwater acquisition schedule—action that we suggested in our June 2004 report. 24 The original 

2002 schedule had milestone dates showing when work on an asset would begin and 

when delivery would be expected, as well as the integrated schedules of critical linkages between assets, but we found that the Coast Guard was not maintaining an 

updated and integrated version of the schedule. 25 As a result, the Coast Guard 

could not demonstrate whether individual components and assets were being integrated and delivered on schedule and in critical sequence. While as late as October 

2004 Deepwater performance monitors likewise expressed concern that the Coast 

Guard lacked adequate visibility into the project’s status, the Coast Guard has since 

taken steps to update the outdated schedule, and has indicated that it plans to continue to update the schedule—monthly for internal management purposes, and 

semi-annually to support its budget planning efforts. We think this is an important 

step toward improving the Coast Guard’s management of the program because it 

provides a more tangible picture of progress, as well as a baseline for holding contractors accountable. And, as we have said in the past on numerous occasions, we 

will continue to work closely with the Coast Guard to monitor how risks are mitigated. 

Attention Also Needed to Planned Transition and Phase out of Legacy

Assets 

Although the Coast Guard expects to upgrade a number of its legacy assets for 

use in the Deepwater program, a substantial portion of its legacy assets—particularly cutters—are scheduled to be replaced. Until their replacements are available, 

however, many of the cutters will need to be kept in service so that the Coast Guard 

can continue to perform its missions. Our visits to field locations and conversations 

with Coast Guard operations and maintenance personnel clearly indicated that the 

maintenance of these assets is already taking increasingly more time and effort. For 

example, air station maintenance personnel indicated that aircraft are being subjected to additional corrosion-related problems. To address these problems, air station maintenance personnel at the locations we visited said they have instituted additional measures, such as washing and applying fluid film to the aircraft prior to 

each deployment. Similar accounts were told by personnel working on cutters. For 

example, officers of the 270-foot cutter Northland told us that because of dated 

equipment and the deteriorating condition of the vessel’s piping and other subsystems, crewmembers have to spend increasingly more time and resources while 

in port to prepare for the cutter for the next deployment. While we could not verify 

33

26The Pacific Area Command is responsible [0] for operations covering 74 million square 

miles, ranging from South America, to the Arctic Circle and west to the Far East. 

these increases in time and resources because of limitations in the Coast Guard’s 

data, the need for increasing amounts of maintenance was a message we consistently heard from operations and maintenance personnel. 

The Coast Guard is aware that keeping these legacy assets mission capable will 

likely require an additional infusion of funds for some assets that are scheduled to 

be replaced. Since 2002, the Coast Guard has annually created a compendium that 

consolidates information about projects needed to maintain and sustain legacy assets. The Coast Guard uses this compendium as a tool for setting priorities and 

planning budgets. The most recent compendium (for Fiscal Year 2006), lists more 

than $1 billion worth of upgrades to the Deepwater legacy assets. The planned upgrades identified in the compendium that have been approved and received initial 

funding account for an estimated $856 million the Coast Guard anticipates it will 

need to complete those projects. In addition, the compendium lists another estimated $409 million in sustainment projects for the other legacy assets for which 

funding has not been requested. If the condition of these assets continues to deteriorate or replacement assets are further delayed, this additional funding will likely 

be needed. 

We are not questioning the Coast Guard’s decisions about which projects within 

the compendium should receive priority. We believe it is important, however, for the 

Coast Guard to make Congress aware of the magnitude of the potential funding 

needs for sustaining the assets that are eventually scheduled for replacement. Given 

the schedule slippages we have seen and the continued possibility that Deepwater 

requirements may yet change, this information will be important to determine a 

thoughtful and accurate estimate of future maintenance budget needs. 

One planning effort under way within the Coast Guard illustrates the kinds of 

considerations that may be needed with regard to these assets. This effort is being 

undertaken by the Coast Guard’s Pacific Area Command, which to accomplish its 

missions, relies on 378-foot cutters—the first asset scheduled to be replaced under 

the Deepwater program. 26 Under the original Deepwater proposal, the final 378-foot 

cutter was to be decommissioned in 2013, but by 2005, that date had slipped to 

2016. To help keep these cutters running through 2016, Pacific Area Command officials are considering such strategies as designating some of the 378-foot cutters as 

capable of performing only certain missions, rather than attempting to keep them 

all fully capable of performing all missions. Even so, the Pacific Area Commander 

told us that in order for the 378-foot cutters to be properly maintained until their 

replacements become operational; the Coast Guard will have to provide more focused funding. So far, the Coast Guard’s budget plans and requests do not address 

this potential need. 

Concluding Observations 

Over the past several years, the Coast Guard has been in the vortex of the nation’s response to homeland security concerns. It has been charged with many new 

responsibilities related to ports and to marine security in general, and from the outset, we have often used the word ‘‘daunting’’ to describe the resulting tasks. In addition, expectations continue that the Coast Guard will be able to rescue those in distress, protect the nation’s fisheries, keep vital marine highways operating efficiently, 

and respond effectively to marine accidents and natural disasters. Congress has acknowledged that these added responsibilities carry a price tag and has, through the 

appropriations process, provided substantially more money for the job. 

As these efforts begin to move into a more mature phase, allowing lessons that 

can already be learned to better inform judgments about the future, it is increasingly important to explore ways to enhance mission effectiveness while stretching 

taxpayer dollars for maximum effectiveness. This is particularly true in the current 

budget climate. While we have found the Coast Guard to be a willing participant 

in such efforts, the agency’s focus on achieving all of its missions can make it difficult to carry through with the many intermediate steps that may be needed to 

keep management problems to a minimum. We think the issues we have highlighted 

are potential areas for ongoing congressional attention, and we will continue to work 

with the Coast Guard on them. 

Madame Chair and Members of the Subcommittee, this completes my prepared 

statement. I would be happy to respond to any questions that you or other Members 

of the Subcommittee may have at this time. 

34

APPENDIX I: OBJECTIVES, SCOPE AND METHODOLOGY

To provide a strategic overview of the President’s Fiscal Year 2006 budget request 

for the Coast Guard, focusing on several areas of particular congressional interest, 

we reviewed the Coast Guard’s Congressional-stage budget and other financial documents provided by the Coast Guard. We also interviewed Coast Guard headquarters 

officials familiar with the Coast Guard’s budget and acquisition processes. 

To determine the status of the Coast Guard’s performance measures and results, 

we reviewed Coast Guard performance data and performance documentation. We 

also obtained confirmation from knowledgeable Coast Guard officials that the performance data sources and the systems that produced them have not changed since 

our 2003 data reliability analysis. We determined that Coast Guard performance 

measures are sufficiently reliable for the purposes of this testimony. 

To determine the status of key outstanding Coast Guard recommendations, we reviewed past GAO reports and testimonies related to the Coast Guard and identified 

the GAO recommendations contained in those reports. In addition, we consulted 

with GAO staff who performed the work that resulted in the recommendations and 

interviewed Coast Guard headquarters officials regarding the status of the recommendations—including any progress made to implement them. We also obtained 

and reviewed relevant documents from the Coast Guard. 

To assess the Coast Guard’s recapitalization efforts, we analyzed data and condition measures used by the Coast Guard for determining Deepwater legacy assets’ 

condition, reviewed Coast Guard actions to maintain and upgrade the legacy assets, 

and assessed the improvements the Coast Guard is making in its management of 

the Deepwater acquisition. We will be following up this testimony with a written 

report that will contain detailed information related to the condition of Deepwater 

legacy assets, and the actions the Coast Guard is taking to maintain and upgrade 

them. As part of the follow-on report we will also provide more detailed information 

on the Coast Guard’s management of the Deepwater program. 

This testimony is based on published GAO reports and briefings, as well as additional audit work that was conducted in accordance with generally accepted government auditing standards. We conducted our work for this testimony between February and March 2005. 

APPENDIX II: RELATED GAO PRODUCTS

Coast Guard: Station Readiness Improving, but Resource Challenges and Management Concerns Remain (GAO–05–161, January 31, 2005). 

Maritime Security: Better Planning Needed to Help Ensure an Effective Port Security Assessment Program (GAO–04–1062, September 30, 2004). 

Maritime Security: Partnering Could Reduce Federal Costs and Facilitate Implementation of Automatic Vessel Identification System (GAO–04–868, July 23, 2004). 

Maritime Security: Substantial Work Remains to Translate New Planning Requirements into Effective Port Security (GAO–04–838, June 30, 2004). 

Coast Guard: Deepwater Program Acquisition Schedule Update Needed (GAO–04–

695, June 14, 2004). 

Coast Guard: Station Spending Requirements Met, but Better Processes Needed to 

Track Designated Funds (GAO–04–704, May 28, 2004). 

Coast Guard: Key Management and Budget Challenges for Fiscal Year 2005 and 

Beyond (GAO–04–636T, April 7, 2004). 

Coast Guard: Relationship between Resources Used and Results Achieved Needs to 

Be Clearer (GAO–04–432, March 22, 2004). 

Contract Management: Coast Guard’s Deepwater Program Needs Increased Attention to Management and Contractor Oversight (GAO–04–380, March 9, 2004). 

Coast Guard: New Communication System to Support Search and Rescue Faces 

Challenges (GAO–03–1111, September 30, 2003). 

Maritime Security: Progress Made in Implementing Maritime Transportation Security Act, but Concerns Remain (GAO–03–1155T, September 9, 2003). 

Coast Guard: Actions Needed to Mitigate Deepwater Project Risks (GAO–01–659T, 

May 3, 2001). 

Coast Guard: Progress Being Made on Deepwater Project, but Risks Remain 

(GAO–01–564, May 2, 2001). 

Coast Guard’s Acquisition Management: Deepwater Project’s Justification and Affordability Need to Be Addressed More Thoroughly (GAO/RCED–99–6, October 26, 

1998). 

35

1 According to the Coast Guard, performance results for all four Fiscal Years (2001 to 2004) 

are not available for three programs. They are: (a) marine safety—Fiscal Year 2004 performance 

results will not be available until spring 2005, when the recreational boating data is reported; 

(b) illegal drug interdiction—Fiscal Year 2004 results will be calculated and released once illegal 

drug flow information for Fiscal Year 2004 is known—sometime in the spring of 2005; and (c) 

ports, waterways, and coastal security—performance measures are still under development.

APPENDIX III: BREAKDOWN OF THE COAST GUARD’S FISCAL YEAR 2006 REQUEST

In addition to operating expenses and acquisition, construction, and improvements, the remaining Coast Guard budget accounts include areas such as environmental compliance and restoration, reserve training and oil spill recovery. (See table 

2 below.)

APPENDIX IV: COAST GUARD PERFORMANCE RESULTS, FISCAL YEARS 2001–2004

Table 3 shows a detailed list of performance results for the eight programs for 

which the Coast Guard has Fiscal Year 2001 through 2004 data. 1 Shaded entries 

in the table indicate those years that the Coast Guard reported meeting its target; 

unshaded entries indicate those years that the Coast Guard reported not meeting 

its target. The table also shows that there are three programs for which performance results are pending and data is not available across the four-year period. Each 

program is discussed in more detail below. 


317gao4.eps
36


317gao5.eps
37

2Pursuant to the 1976 Magnuson-Stevens Fishery Conservation and Management Act, as 

amended, the EEZ for the U.S. is an area within 200 nautical miles of U.S. shores in which 

the U.S. has sovereign rights to natural resources such as harvesting rights to fish stocks. 

Pub.L. 94–265, 90 Stat. 333 (1976). 3GAO, Coast Guard: Relationship between Resources Used and Results Achieved Needs to Be 

Clearer, GAO–04–432 (Washington, DC: March 22, 2004).

Programs Not Meeting Targets in Fiscal Year 2004

• Foreign fish enforcement. The performance results for foreign fish enforcement, 

which indicate the number of foreign vessel incursions into the United States 

Exclusive Economic Zone (EEZ), 2 has experienced fluctuations from 152 incursions to 250 incursions in the last 4 years. Such fluctuations can be due to oceanic and climatic shifts that affect the migratory patterns of important fish 

stocks, and limited Coast Guard assets, which the Coast Guard believes are unable to cover the entire 3.4 million square mile EEZ. We reported previously 

that performance measures for foreign fish may not reflect agency efforts. 3 Because EEZ encroachments can be affected by oceanic and climatic shifts that 

can cause significant fluctuations in the migratory patterns of fish, they could 

increase (or decrease) as fishermen follow their intended catch across EEZ 

boundaries. According to Coast Guard officials, this type of migratory factor can 

influence the number of encroachments in a given year. Consequently, the 

Coast Guard has added two additional measures to foreign fish that focus on 

interception and interdiction. These two submeasures are not reflected in the 

Coast Guard’s foreign fish performance goal. However, the Coast Guard believes 

that they help it to better distinguish between those incursions that it is able 

to identify (for example, with a C–130 it can identify a foreign fishing vessel 


317gao6.eps
38

4 According to Coast Guard information, the C–2 level is defined as the level at which a unit 

possesses the resources and is trained to undertake most of the wartime missions for which it 

is organized or designed. 5 According to Coast Guard officials, the undocumented migrant interdiction performance target was set at 87 percent based on a study done to incorporate deterrence as a measure of Coast 

Guard performance.

incursion) and those incursions that it can actually respond to (for example, 

378-foot cutter can interdict a stray foreign fishing vessel). 

• Living marine resources. The performance measure for living marine resources—defined as the percentage of fishermen complying with federal regulations—has varied from 96.3 percent to 98.6 percent between Fiscal Years 2001 

to 2004. According to Coast Guard performance documents, the agency missed 

the Fiscal Year 2004 target because of poor economic conditions in the U.S. 

shrimp fisheries, which appear to have made U.S. fishermen in the Southeast 

region more willing to violate regulations in order to maintain operations. However, the Coast Guard reported that while the number of fishermen in compliance decreased slightly, its total number of fishery boardings (4,560) was the 

highest number of boardings since 2001.

• Ice operations. To meet this performance target, the Coast Guard’s ice operations program must keep winter waterway closures under 8 days per year for 

severe winters and under 2 days per year for average winters. In Fiscal Year 

2004, the Coast Guard reports missing its target for an average winter with 4 

days of waterway closures instead of 2 or less. The Coast Guard reports that 

it extended the ice-breaking season for an additional 10 days and because of 

worsened winter conditions within that period, its icebreaking assets were challenged to provide services in nine critical waterways of the Great Lakes. In Fiscal Year 2006, the Coast Guard plans to complete the construction of the Great 

Lakes Icebreaker, which will significantly improve icebreaking on the Great 

Lakes.

• Defense readiness. Defense readiness, as measured by the percentage of time 

units that meet combat readiness status at a C–2 level, 4 improved from 67 percent to 78 percent during Fiscal Years 2001 to 2003 but decreased to 76 percent 

in Fiscal Year 2004 due to a personnel shortage according to the Coast Guard. 

The Coast Guard identified its need to supply personnel for the war in Iraq as 

the main reason for failing to meet this performance target. To support Fiscal 

Year 2004 efforts in Iraq, the Coast Guard provided personnel for six patrol 

boats, one patrol boat support unit, one port security unit, four law enforcement 

detachments, as well as two ships and cutters. 

Programs Meeting Fiscal Year 2004 Performance Targets 

• Undocumented migrant interdiction. The Coast Guard reported that it achieved 

its Fiscal Year 2004 performance goal of interdicting or deterring 87 percent of 

undocumented aliens attempting to enter the United States. The undocumented 

migrant interdiction performance measure assesses the percentage of migrants 

interdicted or deterred on maritime routes. 5 In 2004, the Coast Guard identified 4,761 successful arrivals out of an estimated threat of 37,000 migrants. In 

Fiscal Year 2003, the Coast Guard missed this target, interdicting or deterring 

85.3 percent of migrants. Since 2001, the greatest percentage of migrants deterred or interdicted—88.3 percent—was achieved in Fiscal Year 2002. 

• Search and rescue. The Coast Guard’s performance in this area, as measured 

by the percentage of mariners’ lives saved from imminent danger, was 86.8 percent, above the goal of 85 percent for Fiscal Year 2004. The Coast Guard identified continuing improvements in response resources and improvements made in 

commercial vessel and recreational boating safety as the main reasons for meeting the target.

• Marine environmental protection. The Coast Guard measures the marine environmental protection target as the 5-year average of oil and chemical spills 

greater than 100 gallons per 100 million tons shipped. Since Fiscal Year 2001, 

the reported average number of oil and chemical spills has dropped from 40.3 

to 22.1 in Fiscal Year 2004. The Coast Guard identified its prevention, preparedness, and response programs—including industry partnerships and incentive programs—as reasons for the drop.

• Aids to navigation. The aids to navigation program performance measure—

which assesses the total number of collisions, allisions, and groundings—improved to 1,876 in Fiscal Year 2004, more than a 6 percent improvement over 

39

6The Coast Guard defines allisions as vessel collisions with fixed objects, as distinguished 

from collisions, which are vessel collisions with movable objects. 7The illegal drug interdiction performance measure includes only cocaine, because cocaine has 

an analyzed flow rate and is the preponderant illegal drug.

Fiscal Year 2003’s total of 2,000, and below the target of 1,923. 6 (Since the aim 

is to prevent these accidents, a lower number than the target represents attaining the goal). The number has varied from year to year, but has remained below 

or at the target in each of the 4 years. The Coast Guard attributes this success 

to a multifaceted system of prevention activities, including radio aids to navigation, communications, vessel traffic services, dredging, charting, regulations, 

and licensing. 

Programs with Pending Results 

• Marine safety. The marine safety measure, a 5-year average of passenger and 

maritime deaths and injuries, decreased from 1,651 in Fiscal Year 2001 to 1,307 

in Fiscal Year 2003. The Coast Guard is currently waiting on the states to supply recreational boating numbers in order to release their total performance result for calendar year 2004. Coast Guard officials identified ongoing inspection, 

investigation, prevention, and response programs, as well as work with industry, states, and volunteers to promote boating safe operations, as factors in reducing the number of deaths.

• Illegal drug interdiction. The illegal drug interdiction performance measure 7— the rate at which the Coast Guard seizes cocaine—is currently being modified 

by the Coast Guard. The Coast Guard expects their performance results will be 

available in April 2005. 

• Ports, waterways, and coastal security. The Coast Guard is currently developing 

a performance measure for ports, waterways, and coastal security.

Senator SNOWE. Thank you, Ms. Wrightson, for your testimony 

and also for your evaluation of the current challenges facing the 

Coast Guard with respect to Deepwater, and also the sustainment 

of the legacy assets, as well, and we’ll get into that in a moment. 

Let me begin with you, Admiral Collins. I think, first and foremost, obviously, of concern, as we discussed yesterday—and I know 

it’s a mutual concern—is the issue of the Deepwater Recapitalization Program and where it currently stands. And I know we can 

expect a rebaselining report. Is that going to be forthcoming, you 

said, on March 25th? 

Admiral COLLINS. March 25th is the date that has been discussed on the House side that we’re committed to providing the report. And it’s, again, the final tuning of that report and consensusbuilding within the Administration on the out-year dimensions of 

that plan being finalized, as we speak, and a full expectation that 

we will meet that deadline. 

Senator SNOWE. Well, I think it is going to be critical that we do 

so, because that, obviously, is going to run concurrent with the 

budgetary considerations and what we can expect from that rebaselining in terms of projected increases. And so, I think it’s going to 

be absolutely paramount that we see that sooner rather than later, 

and hopefully that you can meet that deadline of March 25th in 

order to submit it to the Committees. 

Admiral COLLINS. Absolutely. And it’ll forecast in detail the 

five—the next 5 years, and then summarize the balance over the 

course of the entire project, and it’ll give detailed information about 

the capability adjustments, asset by asset, that we have incorporated into this new baseline, based upon two factors, primarily. 

One, the post–9/11 environment and what that means to the Deepwater requirement that was developed back in 1998, and what adjustments need. And then, second, the impact of the current state 

40

of our legacy systems, the current fleet, and what that means. 

Those drive the—the former drives a lot of capability adjustments 

that you put in each system, and the latter impacts which ones you 

do first, second, and third, because of the condition of the current 

asset. So those are the variables, and the rebaseline will delineate 

all those issues. 

Senator SNOWE. Have you seen the RAND studies?——

Admiral COLLINS. Absolutely. That——

Senator SNOWE.—in that regard of post-9/11 evaluation? 

Admiral COLLINS. The course of events here in developing this 

new baseline was direction from me, as soon as I got aboard in the 

new Department, by the Secretary—Deputy Secretary, ‘‘We want to 

take a re-look at Deepwater, based upon 9/11. The fact that you’re 

a new department, 9/11, please review the bidding, in terms of the 

requirement.’’ We had an effort by RAND to look at that issue, by 

CNA, Center for Naval Analysis, to take a look at that issue, and 

then we had our own internal assessment, which we called a Performance Gap Analysis. And so, we had, sort of, triangulated lines 

of position, if you will, on the issue. And the mission needs statement that we have put forth to the Department, a revised mission 

needs statement, which is, of course, part of the formal acquisition 

process, was submitted to the Department and approved last January, that details all those new capabilities, based on the collection 

of these multiple analyses. 

Senator SNOWE. Well, suffice it to say, I think, the deep concern 

that we all have is the proposed schedule for the recapitalization 

of the Deepwater Project and fleet readiness. And I know that 

you’ve mentioned in your statement that the Coast Guard is experiencing a continuing decline in fleet readiness; and it goes to the 

point that Master Chief Welch mentioned, in terms of the impact 

on the ground, and as Ms. Wrightson mentioned, on schedule slippages. And even with the increase proposed by the Administration, 

it doesn’t put us even on a 20-year schedule. That concerns me. 

You know, we’re close to being behind schedule by 10 years. Would 

you agree with that? 

Admiral COLLINS. Well, clearly, the—you know, the one thing 

that has—you know, we forecasted, back in 1998, you know, the 

condition of the legacy fleet and how it would deteriorate over time. 

And we had a certain curve plotted—a negative slope, obviously, 

over time. That is steeper and more negative than we anticipated. 

And so, that fleet is eroding in front of our eyes. You can expect 

that when you have ships that range anywhere from, you know, 30 

to 60 years old. And so, you see, in this request—and we’ve talked 

about it, Madam Chair—the fact that the legacy systems are taking more money out of the pot to keep them going while we replace. 

So that is a balancing act that we have to continue to juggle. 

One of the things I should note in the 2006 budget, Deepwater 

request, which, incidentally, that request is simpatico with the new 

mission needs statement. Everything that’s in that Deepwater request is consistent with the new capability adjustments. And even 

in the timing adjustments—you’ll note, in that 2006 request, two 

design works going on—108 million for the middle cutter, the offshore patrol cutter, and design work for the patrol boat. That’s 

much advance of the initial Deepwater baseline. Initially, the offVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
41

shore patrol cutter was supposed to be, like, a 2012 phenomenon, 

and the response cutter, the new patrol boat, the ultimate patrolboat replacement, like, at 2018. We’re designing them in 2006. And 

because that’s some of the adjustment—those are the two parts of 

our fleet that are wearing out the most, and we need to get the 

new things designed quicker. 

So, there’s a reflection of our urgency—I guess what I’m saying 

is that 2006—a reflection of our urgency to get design work done, 

the up-front engineering done, so we can prepare to go to production for those two aspects of the fleet. 

Senator SNOWE. No, I understand that, I think the bottom line 

is, we’re unacceptably behind schedule on the Deepwater recapitalization. When you’re talking about your oldest ships being 30 years 

old, 40 years old, and the maintenance requirements is taking two 

cutters per year out—since 1999, maintenance increased, as I said 

in my opening statement, 400 percent. This is unacceptable, it’s unconscionable. I’ve suggested maybe some members of the OMB 

should be on some of those Coast Guard cutters, in treacherous waters when you’re having to perform your missions, to get an understanding of what we’re dealing with here. 

And so here we are, we’re 20 years-plus to get this program fully 

underway, let alone sustaining all the rest of the fleet—20 yearsplus, that is where we are right now. We’re behind schedule. I don’t 

know if the realities are permeating downtown. Is there anybody 

understanding the conditions of the fleet? 

Admiral COLLINS. I think that there’s a clear——

Senator SNOWE. Does anyone understand the degradation of this 

fleet? 

Admiral COLLINS.—I think there is a clear support for this issue. 

No one’s questioning the requirement. And——

Senator SNOWE. Well, I know, but I think it’s reconciling the requirements with reality. I mean, it’s not enough to send up a budget that doesn’t reflect the true reality, the grim reality that, really, 

ultimately, men and women’s lives are at stake here. 

Admiral COLLINS. We are pleased——

Senator SNOWE. It does not make sense. And It’s unconscionable 

we’re at this point that there has been no adjustments made to this 

score. We have said it repeatedly, as Members of this Committee. 

Admiral COLLINS. We are pleased——

Senator SNOWE. And I can’t believe that they’re not understanding it. 

Admiral COLLINS. We are pleased that the level is close to a billion dollars, because the budget did come up. It’s the highest it’s 

been. 

Senator SNOWE. It’s not doing what it needs to do. 

Admiral COLLINS. I think——

Senator SNOWE. That’s great, but it’s not doing what it needs to 

do. We know that. If the requirement is so much greater to get 

some of these ships onboard now—to do it now—your oldest ship 

is, what, 65? What is it, 62, 65? 

Admiral COLLINS. The Storis—the venerable Storis, up in Kodiak, is approaching 65. 

Senator SNOWE. Sixty-five years old. Great age, right? 

[Laughter.] 

42

Admiral COLLINS. I think the key—we’re pleased—in a nutshell, 

I think we’re pretty pleased with the 2006 budget. We’re pleased 

that we’ve got this level. And the key, going forward, is the outyear budgets. 

Senator SNOWE. That’s right, The point is, we’re still looking at 

20-plus years. That’s the point. It’s not moving anything. The need 

is so great. 

Admiral COLLINS. The consequence, of course, is, depending on 

the rate at which we replace these assets—has a direct bearing on 

the amount of money we pour into the maintenance and the 

sustainment of the existing fleet. So the direct—there’s a direct relationship, a balance, between those two things. And you’ll see the 

legacy sustainment curve costs go up. And it—you can look at 

every asset we have, and that’s the curve. 

Senator SNOWE. Thank you. And I will get to the other panelists 

in a moment. I’ll move to Senator Cantwell, and hopefully you can 

respond. Thank you. 

Senator CANTWELL. Madam Chairman, did you want to recognize 

the Chairman of the full Committee? 

STATEMENT OF HON. TED STEVENS,

U.S. SENATOR FROM ALASKA 

Senator STEVENS. I would like to go forward, thank you. 

I do hope, Senator, that we’ll keep things in perspective. Senator 

Inouye and I, on the Appropriations Committee, have seen to it 

that this budget’s been increased every year. We put 168 million 

more in 2004 bill. We put 724 million into the Deepwater in 2005. 

And we now have a 242 million increase over 2005, and up to almost a billion dollars in 2006. That’s a total of almost 2.4 billion 

in the last 3 years on this Deepwater side alone. The problem is 

that because of the homeland-defense missions, these ships, planes, 

and helicopters are being used, I am told, at 40 percent higher levels than scheduled in the plan that was for 20 years. 

Now, I—you know, we have half the coastline of the United 

States, and the Admiral and I are old friends, and I’m inclined to 

be more realistic, I think. There’s no possibility of going much further than we’ve gone right now. And the question is, How can we 

improve, really, the utilization of the funds that we have available? 

I would like to go into some of the—we all have available the 

GAO reports. What has really happened is that the Deepwater 

funds have been used for—increasingly, for maintenance and repair 

and restoration of existing facilities, and not for modernization. 

That’s not the Coast Guard’s fault. It’s not anyone’s fault. It’s the 

result of 9/11 and of the change of the society. 

Now, Admiral, have you reshaped your—do I understand—is 

that what I understand? You’re going to get a——

Admiral COLLINS. Yes, sir. On the 25th, you’ll see the new revised plan that’ll—new timeline and some of the changes and when 

each asset starts to appear—you know, the sequence of them. And, 

as I mentioned, for example, we have adjusted the ship schedules 

of the two—the there’s classes of ships—the two lower classes, 

we’ve moved that schedule to the left, or we’ve advanced that design schedule, given the current condition of the legacy systems. So 

the idea is to get those new ones starting to come onboard sooner, 

43

rather than later, so we can reduce the amount of money we have 

to invest in the maintenance. 

Senator STEVENS. Well, I appreciate that. I mean, we are going 

to some smaller ships. I was told the other day the Chinese are 

building a ship now that’s got 45 knots on it, and it’s the size of 

our small destroyers from World War II. Most of the navies of the 

world are going to smaller, faster ships. Are you going to do the 

same thing? 

Admiral COLLINS. Yes, sir. Of course, we’ve been in the—you 

know, below the frigate category forever, building smaller vessels. 

That’s where we are. Those three classes of ships are, I think, well 

conceived. The lowest one, the smaller one, the patrol-boat replacement, Senator, is a—we’re very excited about it—it’s a composite 

technology design. And the advantage of that is that it has double 

the life of a steel hull, less—a lower life-cycle maintenance to it. 

And that’s going to be—we’re going to—presently designing that, 

and have a sort of a proof of concept, the prototype, that Northrop 

will be building down in Pascagoula. That’s being designed as part 

of the 2006 budget. So that’s great use of—that’s innovation to extend the life of these five forms, to reduce the maintenance and the 

maintenance burden on the crews, and so forth. So we’re excited 

about that. 

The other thing we’re doing——

Senator STEVENS. Let me interrupt. 

Senator LAUTENBERG. What size is that vessel? 

Admiral COLLINS. It’s—really, it’s conceptual design right now, 

Senators, but 140 feet. 

Senator STEVENS. Do you want to comment, Ms. Wrightson? 

Ms. WRIGHTSON. Yes, I would, thank you. 

I have two things I’d like to add to the discussion which I think 

might help. Number one, we have work ongoing now on the condition of legacy assets, and we will be issuing that report this summer. Work to date suggests that, while it takes a fair amount of 

digging and qualitative data to show it, the Coast Guard’s assets 

really do have significant condition problems. But it’s important to 

distinguish between their aircraft and their cutters in this regard. 

And when you think of aircraft and cutters and how much of the 

resources in Deepwater are being pulled away to take care of aging 

assets, we did an analysis for this hearing that I thought would be 

helpful. And it’s nothing that I haven’t spoken to Admiral Stillman 

about or that he doesn’t agree with. We think there needs to be 

more transparency in this situation. For example, there’s a figure 

that’s touted, 25 percent of the Deepwater 2006 is going to take 

care of legacy assets, but if you take—break that out by Deepwater 

legacy assets that are really hybrid assets and are going to be part 

of the Deepwater solution, such as the HC–130, the HH–65, and 

the HH–60, which are their helicopters and fixed-wing, you see 

that 20.9 percent of 2006 is for those; whereas, for cutters, which 

is truly the sustainment part of the picture, it’s only 3.9 percent. 

Even the contract management is 4.1 percent. 

So we’re not seeing the resources sucked away in the way that’s 

being discussed. And, in fact, I would argue, as I did to Admiral 

Stillman, that accelerating the HH–65 represents a prudent decision and an investment. 

44

So it’s important to have that kind of transparency in the—in 

looking at it, without at all discounting the cost of maintenance 

that you mentioned, Senator, are rising exponentially. That is true. 

They’re in different accounts——

Senator STEVENS. Thank you. I want to get to another subject——

Ms. WRIGHTSON. Yes, thank you. 

Senator STEVENS.—Admiral. Senator Cantwell mentioned the Oil 

Spill Recovery Fund. That started as a Trans–Alaska Pipeline Liability Fund, and we changed it into a general tax on refined crude 

oil. It’s paid at the refinery, and it’s got a cap of a billion dollars. 

Now, it’s my understanding that, currently, according to the 

briefing you gave our staff, that funding will run out something 

like 2010, and, for the first time, it’s gone down below a billion dollars. But we’re consuming more and more oil every year, and it’s 

a fixed fee of five cents a barrel. Tell me, why are we dipping below 

the cap right now? Why do you predict that it will be—it would be 

a net loss of 200 million a year? 

Admiral COLLINS. Of course, the tax is no longer in effect. I 

think—I want to say—looking at Senator Lautenberg—I think it 

was 1994 or 1995 that was—that tax stopped. And so, there is 

that—incoming source isn’t—doesn’t—is not there. That tax is no 

longer in—that’s no longer in existence. 

And so, what we’ve had since—we’ve had since the mid-1990’s is 

about 19 spill cases, where the spill exceeded, you know, the liabilities of the spiller, and so forth, and the spill had to be underwritten by the fund. 

So our projection is that continuing negative drain on this fund 

is about 200—projected to be about 200 million. 

Senator STEVENS. Admiral, I’ve got to tell you, the statute says 

no tax applies if the unobligated balance in the fund exceeds a billion dollars. But you’re—you brought it down below a billion dollars 

last year. The tax should go back into effect. I want to make sure 

we find out what’s going on here, because I don’t want to see a request for money to be appropriated to go into that fund. It is a fund 

that is charged against both domestically produced and imported 

oil at the refinery. So, under the circumstances, it should be going 

back into effect if it has, in fact, dropped down. And I am told it 

did drop down below a billion dollars, in terms of the net in the 

fund as of the end of last year. 

Admiral COLLINS. Let me consult with my fund center, National 

Pollution Fund Center, and my staff on the details of that. But my 

brief was that that source is no longer available. 

Senator STEVENS. But the fund is still there. It does not exceed 

a billion dollars anymore. And, under the statute, it’s supposed to 

go back into effect when the fund drops below a billion dollars. So 

I think you ought to have your people check it. 

Admiral COLLINS. We will, sir. And, of course, there’s categories 

within the fund for spill response, and there may be some relationship there. Let me consult with my experts on that. But, again, I’ve 

been repeatedly briefed——

Senator STEVENS. We’ll consult with the Finance Committee, 

also. But it does seem to me—Madam Chairman, I do hope we’ll 

look into the question of how the money is being used. We have 

45

had an annual increase over your request for—and it has been for 

the Deepwater Program. But because of the circumstances of the 

Administration and the Department, they have taken, from the 

Deepwater Program, the moneys for operation and maintenance of 

your existing assets, as I understand it. Now, I think we’d better 

have some conversation about that with the Department as a 

whole, because I don’t see that we can continue to increase, at the 

rate we’re increasing right now and the period we’re in—we have 

the same problem with airplanes in the military. We have the same 

problem with almost every single agency of the Federal Government because of 9/11. 

Admiral COLLINS. Right. 

Senator STEVENS. 9/11. 

Admiral COLLINS. The point that Ms. Wrightson made, I think, 

is right on target. I mean, she said that it’s—you’ve got to look at 

that money that we’ve called legacy sustainment. A good chunk of 

that portion, sir, is really an investment in Deepwater, because 

the—give you an example. The best example is the HH–65 reengining. The HH–65 is not an asset that’s going to be replaced by 

Deepwater. It’s going to be one of the new Deepwater assets, because it’s going to be transformed into new engines, new gearbox, 

and so forth. So it is, in fact——

Senator STEVENS. Well, let me close with this. I’m using too 

much of my—we fought putting the Coast Guard in Homeland Security for just this reason. The moneys have been taken for homeland security from the basic funding for the Coast Guard in Deepwater. Now, that’s not homeland security out in Deepwater, necessarily. But what you’re spending on, basically, is—40 percent increase in deterioration of your assets, is within the 50 miles offshore. We’re talking about further than 50 miles offshore, as I understand it, in terms of Deepwater, right? 

Admiral COLLINS. Sir, Deepwater goes from our ports and out, 

it’s—they’re very versatile assets, and they can cover that whole 

range. The other part—but, again, let me reiterate, without abusing this point—but the—a lot of that legacy sustainment category 

is, in fact, ultimate Deepwater assets. So it really is an investment 

in the replacement. Not only the helicopters, sir, but the part of—

you’ll see the new baseline report, coming up, and it will propose 

doing a service-life extension on the C–130’s, doing a service-life extension on the H–60s——

Senator STEVENS. Thank you very much. I look forward to——

Senator SNOWE. Well, I agree with—and let me just say, to the 

Chairman’s point, because it’s a good one—we need to separate out. 

Because if 25 percent of the Deepwater recapitalization funds are 

being used for legacy sustainments, we have to make the distinction, in terms of what is going to be continuing ongoing equipment, 

as opposed to total replacement. So if we’re investing in ongoing 

equipment, that’s one thing. It’s quite another if that equipment 

needs to be replaced. And so, we have to make those distinctions. 

And I’d appreciate it if you could submit to the Committee a cataloging of that by aircraft——

Admiral COLLINS. We would be——

Ms. WRIGHTSON. Actually, I was just——

Senator LAUTENBERG. Madam Chairman? 

46

Senator SNOWE. Yes. 

Senator LAUTENBERG. Before Senator Stevens leaves, it is my understanding that the tax is not reinstated once the trust fund balance falls below a billion dollars. That was an all-time cap; that, 

at a billion dollars, the tax would stop being collected. Is there any 

staff question about that? Do you know, Commandant? 

Admiral COLLINS. Again, I’ve been briefed that that source is no 

longer available——

Senator LAUTENBERG. Yes. 

Admiral COLLINS.—Senator, that the mechanism is no longer 

available to support——

Senator LAUTENBERG. Right. 

Admiral COLLINS.—that spill fund. 

Senator LAUTENBERG. Right. That’s our understanding. 

Senator STEVENS. We examined the statute before we came in. 

We’ve got it right here. You can look at it right here. It says it resumes when it drops below a billion dollars. Now, whether it has 

or not——

Senator LAUTENBERG. Well, it hasn’t, but, OK, we’ll—thank you. 

Senator SNOWE. Yes, we need to clarify that. 

Senator Cantwell? 

Senator CANTWELL. Thank you, Madam Chairman. And, obviously, we’re very interested—given the oil spill in Puget Sound for 

which liability has yet to be determined—we certainly want to continue the program. And so, we’ll look for clear resolution of that 

issue and whether the fund automatically starts up again or not. 

It sounds like there is some confusion about that, but it is my understanding that it doesn’t automatically startup again. 

Senator LAUTENBERG. That it does? 

Senator CANTWELL. That it doesn’t. But hopefully we will get this 

resolved and get the commitment. I think we’re at least all heading 

in the same direction, even if we don’t have agreement yet on the 

current statute language. 

I’d like to turn to the issue of the polar icebreakers. Part of the 

Administration proposal is that the Coast Guard no longer be responsible for the operation and maintenance of the three polar icebreakers. I don’t know if you know why the Administration has 

made the proposal to transfer maintenance and operation responsibility to NFS, but I’m very interested. Don’t you think that this creates a certain amount of uncertainty regarding the stream of funding, if responsibility is transferred to NSF? How can we be sure 

that the funding needed for the program is maintained if responsibility is transferred out of the Coast Guard? I think the Coast 

Guard’s Ice Breaker Budget is something like 47.5 million, and I 

think estimates are that closer to 75 million is needed. So aren’t 

we already, with this proposal, short-changing the operations and 

maintenance of this program? 

Admiral COLLINS. Senator, the current thinking in that proposal 

in the 2006 was that the requirement owner—in this case, the National Science Foundation—as the customer for this service, should 

have the funding base for the icebreakers, the three icebreakers—

the Healy, the Polar Sea, and the Polar Star—in their appropriation, and then allow them to articulate the requirement and justify 

the requirement to their approp’s committees. And then they would 

47

reimburse us for services provided. We would still operate and 

maintain. They would be the customer, justifying the money and 

providing the money to us. So that is the theory—that is the theory 

of it. 

The problem here, of course, is that, not only—the 47 was the existing icebreaker base of funding, historical base of funding, for the 

three breakers. The issue is a funding problem relative to the 

short-term operation, the continued operation of those vessels, and 

then follow-on long term. Our engineers estimate that, from 2006 

to—well, actually 2005 through 2008—that there is an additional 

requirement—and we keep those vessels running—of another $14 

million per year above that $47 million base. And that has a lot 

to do with this legacy-system curve we talked about. It has to do 

with—they’re approaching 30 years old, they have been running 

very hard. The last several years, we’ve had—except this year—the 

previous several years, we’ve had two icebreakers down in the ice 

because of the severity of the ice. They’re older vessels, and they 

require money to keep them going. 

So that’s the fundamental dilemma. And then in the post-2009—

if you could keep them going to 2009, how do you sustain the operation? How do you have a capability for this nation in the polar regions beyond that timeframe? How do you sustain this for the long 

haul? 

So you’ve got a short-term problem of keeping the existing platforms alive, and you’ve got a longer-term problem of, How do you 

sustain the nation’s ability to exert its influence in the Arctic and 

Antarctic from now into the future? 

There is a——

Senator CANTWELL. Admiral, how can you maintain your operations of those facilities when someone who’s determining what it 

takes to maintain those operations isn’t even operating those facilities and is somewhere else? 

Admiral COLLINS. We then—we have to communicate—it is—

there’s a communications challenge. We’ve got to communicate to 

them each year, as they prepare their budget, what the next year’s 

requirement is. They have to put it in their budget. They have to 

justify it to their appropriations staff. Then they have to, again, reimburse us that amount so we can provide the operation. 

Senator CANTWELL. Just so I can be clear: they’re not involved 

in the operations and maintenance at all? 

Admiral COLLINS. No. So it is—part of the direction was for us 

to develop a memorandum of agreement with NSF on the mechanics of this arrangement and how it would—how it would play out. 

I have to be candid with you that I have some level of anxiety 

about how efficient this process will be over time and the difficulties of being coordinated and having everyone on the same sheet 

of music. So, it will be a challenge. 

In terms of the long-range planning for the—What is this nation 

going to do with polar icebreakers in the future?—we’re responding 

to congressional direction to conduct a strategic study, in partnership with the National Academy of Sciences. And there is a deliverable that’ll happen in September. It looks like it will be an interim 

report, and then a final report the following, I want to say, spring. 

But it will project the strategic requirement in the future for these. 

48

So we’ve got, again, to make a long story short, a short-term 

problem about keeping these existing—Polar Sea, Polar Star alive 

and then a longer term problem, How are we going to maintain 

this capability for the nation? It’s the only breakers that this nation has. 

Senator CANTWELL. Are you concerned that this change will 

eliminate that capacity for the future? 

Admiral COLLINS. Yes, I am. I think that—my personal opinion 

is, this nation—I think the ultimate study is going to say—we’ve 

done these studies before. We did one in—10 years or so ago that 

said this nation needs at least three polar icebreakers. And I think 

this—I would—I don’t want to presume what this next study’s 

going to say, but I would—if I was a betting man, I would bet some 

money that it would say, ‘‘This nation needs polar icebreakers. 

There is strategic importance to this nation to have an ability to 

exert a presence in the Arctic and the Antarctic.’’ I think that’s 

what it will—would say. And I—but we have to, of course, do the 

study. And we will. 

But I am concerned that this very unique capability—there’s only 

two—the Healy is an Arctic research vessel, really not a fullfledged powerful polar breaker. Only two. And they—at the end of 

their service life. We’re at a very critical juncture of keeping them 

alive for the next couple of years, and then replacing them, ultimately—either extending their life or replacing them. 

Senator CANTWELL. Admiral, before my time runs out in this 

first round, we’ve had a lot of discussion from my colleagues already about the Deepwater Program, in general. And one of the 

concerns that I have is how you maintain that expertise, from a 

workforce perspective, in shipbuilding. You mentioned something 

about the new level of manufacturing in shipbuilding relating to 

composites. That’s near and dear to the Northwest, because composites are playing a larger role in airplane manufacturing. It already played a pretty large role in commercial boat-building, so 

we’re glad to see it transfer to the Coast Guard side. 

But one of the questions that I think would be important for 

Members to know is how many of these assets right now are being 

built by foreign companies? 

Admiral COLLINS. How much of the Deepwater? 

Senator CANTWELL. Yes. 

Admiral COLLINS. Of course, all the Deepwater is consistent with 

Buy America and all the necessary constructs on that end of the 

business. There are portions of a given system that are foreign. For 

example, the two major cutters—the national-security cutter—the 

high-end cutter and the middle cutter—their engines are Mercedes 

engines that are going in. That was determined to be the best 

value and the best fit for the design of that ship. The whole ship 

is made in Pascagoula. But portions of it could be foreign. 

The HH–65 engine replacement that we’re proceeding with right 

now—replacing engines for almost 100 helicopters, a little less than 

100 helicopters—that’s a Turbomeca engine, and—but it’s assembled in the United States and installed in Texas, and then installed 

at our air—our aircraft repair facility in North Carolina. And 

there’s potential for a second line in Columbus, Mississippi. 

49

So, Deepwater is an interesting thing. It’s got contractors and 

subcontractors, systems and subsystems, and suppliers span—I 

think the latest count was 35 states. There are subcontractors, suppliers, and contractors in 35 states across the country that are supplying for Deepwater. 

The one aircraft, fixed wing, the CASA, which is also a Deepwater asset, that is—EADS CASA is Spanish aircraft manufactured in Spain, final assembly and configuration in the United 

States. That’s a Deepwater component. So, it’s kind of mixed, consistent with acquisition rules and Buy America, and a lot of players 

involved. 

Senator CANTWELL. Thank you, Madam Chairman. I see my time 

is expired. 

Senator SNOWE. Thank you, Senator Cantwell. 

Co–Chair Inouye? 

Senator INOUYE. Thank you very much. 

I’d like to change the pace. Most Americans, Admiral, would look 

up on the Coast Guard as an agency to guard the coastline of 

America—intercepting smugglers and rescuing fishermen. But we 

know that, all during World War II and every war since then, the 

Coast Guard has received assignments in war zones. What sort of 

assets are now in war-zone assignments? 

Admiral COLLINS. Thank you for that question, Senator. And 

you’re absolutely right, we’ve been in every major war or confrontation this country’s had since 1790. And we played a role—at the 

height of Operation Iraqi Freedom, we had about 1200 men and 

women and 11 ships, some in the Eastern Med.—supporting Navy 

ops in the Eastern Med.—the bulk in the Northern Arabian Gulf, 

even including a buoy tender from Hawaii that supported operations in the approach to Umm Qasr, in terms of aids to navigation. 

Currently, we have six patrol boats there. They’re working in 

tandem with four Navy patrol boats in a unified squadron. The 

commodore of that squadron is a Coast Guard Captain working out 

of Bahrain. And their mission is marine intercept operations, intercepting ships going back, boarding them, and also providing security for the very valuable offshore oil platforms for Iraq. 

The Master Chief and I just got back from a trip where we got 

out and—got offshore, got a little wet and sloppy and went out—

staged off the Duluth, the Navy vessel Duluth, took an 11-meter 

RIB and visited all our patrol boats underway providing such security. And there, it’s a year deployment for each one of those crews, 

Senator. So six vessels. 

Senator INOUYE. Are your people also in the Philippine and 

China Seas? 

Admiral COLLINS. There is a—periodically, Senator, we participate in—if you’re familiar with CARAT, which is Cooperation 

Afloat for Readiness and Training. It’s a PACOM engagement 

strategy in the Pacific Rim, mil-to-mil training and so forth. We, 

every other year, participate in that. 

We had the MUNRO—Coast Guard Cutter MUNRO—that—a 

high-endurance cutter that was involved in the tsunami relief with 

the seventh—under the seventh—the PACOM in the 7th Fleet, and 

provided—worked in that theater, and now proceeded on—that’s 

50

another—quite another vessel—we have it working with the Navy 

in the Med.—excuse me, in the Arabian Gulf. 

Senator INOUYE. And your ships were assigned to the tsunami 

relief effort, also, weren’t they? 

Admiral COLLINS. Yes. We had a 378 that moved thousands and 

thousands of pounds and tons of relief material, and we had two 

C–130s from Barber’s Point that also provided relief, flying into Sri 

Lanka, the Maldives, Indonesia, with relief supplies. So we’re a 

full-fledged armed-force partnership. We have transparent operations with our counterparts, the Department of Defense—transparent, meaning very highly coordinated, effective operations—to 

this day. 

Senator INOUYE. So your assignments and your services are very 

similar to those of the Navy? 

Admiral COLLINS. We are interoperable with the Navy, Senator. 

We’ve spent a lot of time working—Vern Clark and I engage a lot, 

plan a lot, and develop our fleets so they are simpatico. In other 

words, non-duplicative, but complementary capability built into our 

fleet. 

Senator INOUYE. And may I now ask the Master Chief, How does 

your housing compare with naval housing? 

Chief WELCH. Senator, I think the Coast Guard’s governmentowned housing is comparable to DoD housing, carte blanche, sir. 

We have done wonderful work for our people who reside on the 

economy by increasing significantly the basic allowances for housing that they receive. Those people, throughout the country, for the 

most part now have reduced their out-of-pocket housing expenses 

to zero. That’s significant. Around a 20-percent increase over the 

course of the past 4 years. 

Government-owned quarters, in the case of the Coast Guard, sir, 

faces the dilemma of deferred maintenance; in some cases, 10-year 

maintenance deferrals. And we, as the Coast Guard, have decided 

to pursue privatization, to the extent it makes sense and that it is 

possible. 

But, categorically speaking, government quarters in the Coast 

Guard—Cordova, Alaska, being probably the worst of our worst—

is in poor shape. And it is my opinion that we either privatize the 

housing or divest the housing altogether, particularly from a business case, sir. 

Senator INOUYE. Are you suggesting to me that the quality-of-life 

programs that you have are just as good as those of the Navy or 

the Army or the Air Force? 

Chief WELCH. I think the programs, Senator, are on par with the 

rest of the Department of Defense. Where the Coast Guard, however, has challenges is that most of our people are assigned far beyond the bounds of the facilities offered by the Department of Defense, and, in many cases, the facilities offered by our Coast Guard. 

We are typically in remote, high-cost, rural sorts of areas. So we 

have significant challenges to provide parity with respect to DoD 

quality-of-life programs, but we do our very best to see that that 

happens, Senator. 

Senator INOUYE. Thank you, Master Chief. 

Chief WELCH. Thank you, sir. 

51

Senator INOUYE. Admiral, I will be submitting a question on the 

Coast Guard station on Maui, something we discussed earlier. And, 

if I may, I’d like to have a written response to that. 

Admiral COLLINS. Yes, sir. We will be glad to. But that’s the 

issue where we’re looking at the adequacy of that boat to deal with 

the current weather conditions and operational profile of that station. And I think we’ve come to the conclusion we’ve got a mismatch between the operational conditions there and the size of the 

boat we have. And so, we will provide some options. We’re working 

through some options to fix that, and we’ll clearly communicate 

that to your staff. 

Senator INOUYE. My last question, if I may, Madam Chair. District 14 has responsibility for the largest geographical area. That’s 

correct, isn’t it? 

Admiral COLLINS. It sure is, sir. 

Senator INOUYE. However, it has the smallest billet of personnel. 

Is that correct? 

Admiral COLLINS. It’s one of our smaller districts, absolutely. 

Senator INOUYE. Smallest number of cutters? 

Admiral COLLINS. Um——

Senator INOUYE. I think I’m correct. 

Admiral COLLINS. You’re probably correct. 

Senator INOUYE. And the smallest number of aircraft. How do 

you explain the largest area having the smallest number of personnel and assets? 

Admiral COLLINS. I think you’ve got to look beyond the numbers 

and look what the capability that we build into those ships that 

we—the ships that are there, as you know, are high-endurance cutters, they’re very capable cutters. They have long legs, longer legs. 

And the C–130s have long legs. That’s a reason C–130’s are in—

at Barber’s Point and sustained there. So what we’re trying to do 

is put—and we’ve got, of course, three brand-new buoy tenders that 

we’ve put in—so, in terms of the workload, the aids-to-navigation 

workload relative to buoy tenders, for—to give you an example—

is a pretty good match. So we’re trying to match capability and 

workload with the type of assets. And I think we—other than—

and, of course, we’ve got a new coastal patrol boat there—other 

than Maui, I think we’ve got a pretty good match between workload, capability, and the type of assets. 

Senator INOUYE. So you have sufficient assets to carry out your 

mission? 

Admiral COLLINS. To optimize every mission, probably not. To be 

able to respond to, on a risk basis—allocate to the highest risk, 

that’s what we do—I think we’re—this budget clearly will help us 

continue to do that. 

Senator INOUYE. I thank you very much, sir. 

Admiral COLLINS. Thank you, Senator. 

Senator INOUYE. Thank you, Madam Chairman. 

Senator SNOWE. Thank you, Senator Inouye. 

Senator Lautenberg?

52

STATEMENT OF HON. FRANK R. LAUTENBERG,

U.S. SENATOR FROM NEW JERSEY 

Senator LAUTENBERG. Thanks, Madam Chairman. 

And, first, I want to say to our two uniformed friends at the table 

that we’re proud of your service, both individually and collectively. 

And I would also tell you that I don’t remember seeing as many 

hash marks, Chief, as you’ve got there. I don’t know whether 

they’re putting lights on or what, but there are a lot of them. They 

signify a lot of service. And thank you for your excellent testimony. 

Admiral, you and I have known each other for some time. But 

hearing your report is really significant, and it was just a very good 

idea to make your statement here. 

Madam Chairman, you said something before. You talked about 

reality—What’s the reality here? When we look at the Coast Guard 

we realize, as you know, that the assignments have changed so 

radically. It’s my view that the combat theater for the war on terror has moved from Iraq and Far East to the internal boundaries 

of the United States. As a consequence, you’re on a lifesaving mission every day, whether—and I’m not just talking about search and 

rescue, I’m talking about this constant high-tempo, on-guard mode 

that you’re in. I’m on the Hudson River, and—funny enough—you 

had not only bi-coastal representation here, to use the expression, 

but you also had—before my two colleagues left, you had 240 years 

of mankind. All three of——

[Laughter.] 

Senator LAUTENBERG.—all three of us are veterans of World War 

II, and I think we’re the only ones remaining in the Senate who 

were in the combat theater. 

And so, when I looked at the assignment, Madam Chairman and 

colleagues on the Committee, it’s extremely difficult and, Ms. 

Wrightson, you do a great job, and your report was excellent, but 

I take exception with it, not to the extent that we ought to correct 

what it is that we’re not doing well, in terms of the Administration’s effort but even farther, we ought to try to catch up. Without 

looking at this thing in its global context—and I’m not talking 

about the Earth—I’m talking about where Coast Guard used to be 

as a service and what the missions were and NAVAIDs and buoys 

and, you know—I was a bit of a sailor, and—all those things are 

important. We built a gigantic marine industry that only one country has in its entirety, and that’s America. And the Coast Guard 

helped build this by being out there to help when mariners are in 

distress and by making sure that the navigation obstacles are identified, and so forth. But the list of assignments just kept getting 

bigger and bigger and bigger. 

I would ask you, What was the maximum population of people 

in uniform, Admiral, at any time in the history—recent history of 

the Coast Guard? 

Admiral COLLINS. Well, World War II, we had 240,000 people in 

the United States Coast Guard. That, of course—it was a wartime 

footing. 

Senator LAUTENBERG. What would you say, post-World War II? 

Admiral COLLINS. We’re—we are starting to approach the level 

that we were at in the late 1960’s—was probably the high point, 

53

in terms of the population of the Coast Guard. I can give you—I 

can get you some historical data on that. 

Senator LAUTENBERG. It’s just general reference. Because I listen—and this is not just for Ms. Wrightson’s benefit, but just anybody who might hear what we’re discussing—and that is, not only 

has the personnel reduction been significant over the years, but the 

legacy equipment, all of that—my daughter had the privilege of 

swinging the bottle of whatever was in there at the—I think the 

cutter Mohawk, if I’m not mistaken. And that was thought to be 

new and—and when we talk about ships that are 60 years old, or 

50 years old, or 40 years old, and just know what the maintenance 

requirements are like, we’re not being realistic. So we have larger 

assignments, more assignments—and the question about oil spill 

came up with Senator Stevens. The oil spill that we recently had 

in the Delaware River is—it’s going to cost substantially over $100 

million. The liability limit for the carrier is $45 million. So, there 

it is. And we’ve had these massive spills. One of the biggest ones 

was probably Exxon Valdez. And we’re still paying a price for that 

spill. We had someone down from Alaska who picked up a rock on 

the beach—no depth to it—inches—and there’s still an oil pool 

below—just below the surface, or right at the surface, left over 

from 15 years ago. 

So, I’m concerned about the breadth and the expansion of the 

Coast Guard’s assignments, and the depth of their responsibilities. 

When I look out the Hudson River from where I live, and where 

I used to be able to see the World Trade Centers very clearly, the 

empty space now is a constant reminder of what happened on 9/

11. And I see a couple of fellows out there—it looks like either rubber or fiber little tenders out there, with the blue light and the machine gun, and I see the Coast Guard is out there. That can’t be 

very interesting duty, but they’re out there doing it, and doing it 

diligently. Wherever we look, we always want to know that the 

Coast Guard is nearby. Maybe that comes from my ‘‘on-water’’ days 

as a recreational sailor, but it is still true for many Americans. 

So, I start and end with a commendation of the Coast Guard, the 

services that you bring, and to say that we’ve got to face up to the 

lack of serious response by our government, in terms of maintaining a fleet that doesn’t require so much of its energy, so much of 

its resource expended on keeping things going that should have 

been retired. Now, I look in the mirror sometimes, and I say the 

same thing about me. But——

[Laughter.] 

Senator LAUTENBERG.—the fact of the matter is that it takes a 

fair amount of maintenance to keep these old——

[Laughter.] 

Senator LAUTENBERG.—old ships afloat. 

I forgot about—I’m reminded that Senator Warner and Akaka 

also served in uniform, World War II. 

So, one thing I want to ask you before I close up here. The Coast 

Guard’s report, Admiral, on the Oil Pollution Act of 1990, we’re 

still waiting. What’s the status of that report. Can you tell me? 

Admiral COLLINS. We’re looking at the—an April timeframe, no 

later than the end of April, to get that report. It’s in the final 

54

stages of review, and that’s the timeframe we’re looking at now, 

Senator. 

Senator LAUTENBERG. It’s really critical. And the debate that we 

had about whether or not the trust fund gets replenished is something we have to sort out, because we don’t think that there is the 

provision that automatically kicks in to replenish the base. 

Ms. Wrightson, do you have any knowledge of that? 

Ms. WRIGHTSON. You know, while that discussion was going on, 

I was thinking to myself that, if it would be of assistance, we would 

ask our GAO lawyers to take a look at it and get the Committee——

Senator LAUTENBERG. Yes, that——

Ms. WRIGHTSON.—an answer. 

Senator LAUTENBERG.—it would be very——

Ms. WRIGHTSON. Absolutely. 

Senator LAUTENBERG.—very helpful. 

And the—one of the things that concerns us is the fact that the 

IG has found major problems with port-security funding, because 

the funds, largely, are not based on security risk at the ports. Now, 

does the Coast Guard have a role in deciding which ports get special attention, particular attention? Do you have the liberty of assigning resources to these places? Or is that coming from the Secretary’s office? 

Admiral COLLINS. Sir, our—the extent of our involvement is, sort 

of, as a expert witness. We provide, both at the field level—our 

Captain of the Ports will review the grant applications, from a 

maritime-security perspective and their knowledge of the port and 

the port vulnerability assessment that has been conducted in the 

port, and so forth, and makes some comment about the merits of 

that particular application. And then that goes up at the national 

level, and there is another interagency body that reviews that. But 

the ultimate decision is at the Secretary level, sir. 

Senator LAUTENBERG. And, Ms. Wrightson, will the GAO look at 

the problem about this——

Ms. WRIGHTSON. We actually have work ongoing for a different 

Committee on the Coast Guard’s efforts, which I would—I don’t 

want to be premature, but our, sort of, leading edge in using riskbased management in resource-allocation decisions——

Senator LAUTENBERG. But we——

Ms. WRIGHTSON.—the—we will, and it will probably be issued in 

the early summer. I’ll make sure you get a copy. 

Senator LAUTENBERG. All right. Because if we leave the Coast 

Guard out of it, the——

Ms. WRIGHTSON. Oh, we’re——

Senator LAUTENBERG.—the generic question——

Ms. WRIGHTSON. Right. We’re looking at it from the DHS perspective, as well. 

Senator LAUTENBERG. Madam Chairman, thank you very much. 

And I commend you for having called this hearing——

Senator SNOWE. Thank you. 

Senator LAUTENBERG.—and for your conduct of it. It really got—

we got to the nub, I think, of things today. 

Senator SNOWE. Thank you, Senator Lautenberg, and thank you 

for your contributions here this morning. They certainly are invaluVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00058 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
55

able to the goal that we all share and want to accomplish as a result of this hearing. 

I just have a couple of questions. And the remainder we will submit for your responses. 

Admiral Collins, I wanted you to respond to Ms. Wrightson and 

the GAO with respect to the schedule slippages. I understand that 

it could be well exacerbated with the rebaselining. And I would like 

to have you address that question. Have you been able to resolve 

those issues for the future? 

Admiral COLLINS. In terms of the GAO audit on the project and 

the project management, I think there was a—Ms. Wrightson, correct me if I’ve got the number wrong—I think it was 11 different 

issues that were cited. And we’ve been working collaboratively with 

GAO to address each and every one of those. And some have been 

a check next to them that they’ve been addressed, others are still 

work in progress, as Ms. Wrightson has noted. And we feel that 

they’re very valuable contributions or recommendations that 

they’ve made, whether it’s how we coordinate the project teams, 

how we ensure cost competitiveness, and the like, were the recommendations, and we take them very, very seriously, and we’re 

working hard to put them into effect. 

Some of the schedule slippage, you know, is a function—overall, 

in the project management perspective—is a function of what—

when you get the dollars, you know, and what level of dollars you 

get, relative to the initial schedule implementation. You know, 

that—it required a certain amount of dollars, the implementation 

plan, as designed. We said, ‘‘We need X amount of dollars, adjusted 

for inflation on this timeline to keep this schedule.’’ In the first several years of Deepwater, we did not get those levels. And so, that 

directly impacted the schedule. 

Other cases, we’ve taken a breather on a system or subsystem 

because we thought we—we had some issues that had to be dealt 

with, and, before launching forward, we wanted a pause. An example is the conversion of the 110 to 123. It has some initial structural problems—the MATAGORDA is the name of the vessel—and 

we needed to totally evaluate that, make the appropriate adjustments, and do operational evaluation on it before we made an additional commitment for additional hulls. I think that was the right 

thing to do. And so, every one, I think, has been a prudent decision. 

But the real driver on schedule, it all comes down to cash-flow. 

I mean, I—and hopefully there—we will minimize schedule slippage based on management problems. We want to minimize that. 

And with the help of GAO, we’ll continue to refine and improve 

that, to eliminate that, or reduce that as a cause of this slip. But 

there’s, again, certainly variables in there. 

Senator SNOWE. Ms. Wrightson, do you have anything to add on 

that particular question? 

Ms. WRIGHTSON. Well, I would concur that—you know, that 

we’ve had a constructive engagement with the Coast Guard in this. 

And in the next month or so, I plan to meet with Admiral Stillman 

and go over the list again. 

I want to make one compliment to the Coast Guard, and one caution on this. We had an issue last year with the Coast Guard’s not 

updating its master schedule. And in an acquisition of this kind, 

56

it’s very important for them to understand the relationship between the subcontracts the first year, and so on. They have done 

that now, and it should give them a much better visibility into 

where they are with each particular part of the acquisition, and 

that should help. 

Other things, though, are well beyond their control. And just 

speeding up the dollars won’t do it. HH–65, good example, doubled 

the money the Coast Guard wanted. The Coast Guard is probably 

not going to make a 24-month implementation schedule. If they try 

to do it, they could be at risk for paying premiums to the contractors who do the work. They could be at risk of taking too many assets out of service. 

So, we want to be cautious. I appreciate the admonition to be 

kind to the Coast Guard, as Senator Lautenberg said. But I think 

our relationship with the Coast Guard is just right, and we’re continuing to work the issue. 

Thanks. 

Senator SNOWE. Yes, that’s certainly been my perception. And 

you work very well together, and I appreciate that, because it benefits everybody. So, it’s a very constructive relationship, and a cooperative one, so it makes it work, and we thank you for that, and 

we applaud you, as well. 

Would you be evaluating this rebaselining report, as well? 

Ms. WRIGHTSON. Absolutely. We continue to monitor Deepwater——

Senator SNOWE. OK. 

Ms. WRIGHTSON.—and provide our comments to the Committee 

and others and the Coast Guard. 

Senator SNOWE. Thank you. 

Master Chief Welch, I want to ask you a couple of questions. One 

is on a very high retention rate. What accounts for that? Do bonuses help? An 89.5 percent retention rate is amazing, I really applaud you, Admiral Collins, and all the men and women of the 

Coast Guard. I think that’s astounding. 

Chief WELCH. Yes, Madam Chair. As you know, there are many 

variables that impact retention, whether in the Coast Guard or externally. But I believe that, as a result of our Commandant’s sincere and productive efforts to improve, not only the quality of life, 

but the quality of work for our work force, is probably the singlemost important governing factor. 

Never during the course of my career has there been a 3-year period in which so many people initiatives have been delivered to our 

work force. Tuition assistance has been significant, in terms of 

helping our people pursue their education. It’s also a very effective 

retention tool. We have made significant investments to provide 

our people with other personal and professional-development opportunities, some of which I mentioned during my verbal statement. 

We have a senior enlisted command master-chief course. We have 

enlisted cadre in with the core cadets at the Coast Guard Academy. 

We’ve expanded our leadership school throughput. We’ve introduced an enlisted professional military education program. We’ve 

revised our Class A School training curriculum. 

Our mission also drives high retention, because the whole notion 

of being a humanitarian service with full-time employment in 

57

peace and at war and at the same time has a great deal of positive 

feel to it. 

And, last, Madam Chair, I would like to say that also at no point 

during my 25-year career have I heard the word ‘‘patriotism’’ by 

the young men and women of our service as I have in the course 

of the past 3 years. 

Thank you. 

Senator SNOWE. That says it all. And we deeply appreciate that, 

and we’re profoundly grateful. I know I’ve seen them on the front 

lines, and I just think they’re extraordinary. Thank you. 

Chief WELCH. Thank you. 

Senator SNOWE. Thank you. 

Senator Cantwell? 

Senator CANTWELL. Thank you, Madam Chairman. And thank 

you, Master Chief, for that last comment. We had a celebration in 

Seattle at Maritime Days where we had members of the Coast 

Guard and various National Guard services back from Iraq who 

helped with the deployment of goods in Basra. It was exciting to 

see the interagency involvement and the success of that operation 

of both public- and private-sector individuals and various agencies 

working together to make that mission successful. 

Admiral Collins, I had a question for you that is in regards to 

the security mission of the Coast Guard. And I know you have a 

list of over $100 million in additional funding requests for security 

on the unfunded priority list, for needs not in the budget. Does that 

mean we have serious gaps? That’s an awfully big number for an 

unfunded list, and it leaves one questioning where that leaves us. 

Admiral COLLINS. Right. This was the—as you may know, Senator, this is the first year that the Coast Guard has submitted such 

a list, that this was prior—this was a tradition for the other services to their committees to provide this type of mission and the information, and then the guidance last year in legislation called for 

me to do this. 

Basically, this represents—you know, if you had the next dollar, 

beyond the President’s budget, you know, where would it fall? 

What are your highest priorities beyond the President’s budget? 

Clearly, the President’s budget, as submitted, reflects the highest 

priorities of the United States Coast Guard. And this is if there 

was additional resources, where would you put it, and why? And 

it’s listed in priority order, that list. And it’s very consistent with 

our priorities in the 2006 budget, because the number-one item is 

Deepwater, over $600 million of that total. The next one is legacy 

asset sustainment, or current-day readiness. We’re managing future readiness with Deepwater, and current readiness with legacy 

sustainment. Those are our two top priorities, and they absorb the 

vast percentage of that request. So I think it reads very consistent 

with the 2006 budget, very consistent with the dialog we’ve had in 

this Committee this morning. And it would help, obviously—we’re 

the subject of macroeconomics and budget tradeoffs and all those 

things that happen, and we’re thankful for the support in the 2006 

budget from the Administration and the Secretary, and these just 

represent the next increment that would allow us to move out a little more sharply——

58

Senator CANTWELL. Well, Admiral, would you say that you have 

enough assets, particularly, say, at District 13 in the Northwest, to 

implement security protocols if the maritime threat level is elevated? 

Admiral COLLINS. I think so. And we’ll continue to refine and 

look at that—dynamic process, not a static one. We’ve added new 

patrol boats, we’ve added new—we’ve got a contract that would—

with Safeboat, from up there—for—they’re terrific boats, by the 

way, Senator—that are outfitting across the Coast Guard that—the 

perfect boat for coastal port security. And we’ve rolled those in. 

We’ve created 13 new commands called Maritime Safety and Security Teams around the country, one of which is in Seattle—I believe, the first one is in Seattle that we put—and those are—

that’s—those are huge accomplishments. And in the 2006 budget, 

we have the enhanced Maritime Safety and Security Team, which 

even a—sort of, even a higher-end assault capability team that we 

have available now, as well. 

So, we’re building out at a pace that makes sense, I think, and 

we’re building it out at a pace that we can manage, I think. And 

it would—so, I’m pleased where we are. I’m pleased where the 2006 

budget supports continued progress in this area. 

Senator CANTWELL. With the majority of the nation’s car/passenger ferries in the Northwest, where do you think we are in implementing security requirements for that system? Since 9/11 this 

Committee has frequently discussed security implementation as it 

relates to air transportation, most recently in a security bill, and 

rail transportation, yet we have millions of Americans transported 

back and forth on this ferry system. Where do you think we are 

on implementing security plans with respect to Washington State 

ferries? 

Admiral COLLINS. Our focus—it’s subject to the Maritime Transportation Security Act and the regulation that we’ve promulgated. 

The ferry system is included in the MARSEC, Maritime Security, 

condition 1, 2, and 3, and some of the things we do in each phase 

of that. And Seattle is our—one of our primary focuses, Puget 

Sound, because our focus is on high-capacity ferries, ferries with—

and those are—we define as people—over 500 passengers. And 

you—and Seattle, Puget Sound area, is the largest is the operator 

of high-capacity ferries, by far, in the country—22 of them, over 

500 people. 

And we—although there’s no specific threat that says, ‘‘This is 

going to happen at this time,’’ the general vulnerabilities and risks 

associated with that kind of transportation, with that kind of people carrying—in the particular case of Puget Sound, carrying vehicles—it is the vehicle-carrying ferry system. And, you know, the—

one of the major tactics of terrorist organizations and terrorists is 

using vehicles to carry explosives. And so, that whole—all those 

variables together means we’ve really got to pay attention to this 

as a—from the state, local, and federal perspective. 

What we’ve tried to do is collaborate—and we’ve had enumerable 

discussion with Washington State ferry folks—and how we put this 

together—that provides you the kind of deterrence you need and 

the transparency of potential threats, while not adversely impacting the flow of—which is commuter system—the flow, and not imVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00062 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
59

pinging on anyone’s rights. And so, we’ve—there’s a careful balance 

to put that all together. And I think we’re striking the—we’ve 

struck the right balance. 

I refrain from talking about the actual screening levels, because 

they’re—that’s classified. But I’d—pleased to give you a classified 

brief on that. But I think we’ve set screening levels that are—we’ve 

done it collaboratively, and that make sense for the environment. 

We’ll continue to tweak that. 

Senator CANTWELL. So you’re satisfied with the direction that 

we’re going today, and you have no concerns about this unfunded 

priority list, as it relates to the ferry system? 

Admiral COLLINS. No, I’m pleased where we’re going with the 

ferry. If the question is—the ferries—I’m pleased where we’re going 

with that. We’re going to—again, it’s a—again, continue to evaluate 

the risks, the threats, and the consequence type of an assessment 

of that. We have funded over—I want to say $1.6 million, as I recall, in R&D funding to look at the study of vehicle-borne explosives, relative to carriage in ferries and all that. We’ve looked at—

tried to take a systems look, and look at what the technology of 

that—the vulnerabilities of that, and the threats of—the consequences of those kind of threats. And we’ll continue to do that. 

And as—work with the stakeholders involved to make adjustments 

over time, as required. 

But I’m really happy where we are. We just had, about, I want 

to say, a month ago, a meeting in Coast Guard headquarters of all 

the major ferry operators in the country, including the Washington 

State system, and it was—we were very successful in getting the 

right classification to all the private sector, so they had secret classification. We could talk very detailed classified information. I 

think that was the first time that we had private sector together 

to do that. I think we’re leading the way, and have been collaborative, detailed conversations. And the whole construct of Maritime 

Transportation Security Act is a collaborative enterprise. You 

know, we’ve learned from—I think we’ve learned from the Oil Pollution Act of 1990 and that infrastructure we created, and we’ve 

created a similar type of thing with area maritime security committees, where all the stakeholders from port are—can participate and 

get their views on the table and get a common view, a collaborative 

view. 

So, a lot more work to be done, but I’m happy with where we are. 

I’m appreciative of the support of this Committee. For instance, 

we’ve added over 500 billets in the 2004–2005 timeframe for—2005 

mostly, to—additional capacity and force structure within our maritime security to implement the—force, maritime security force—to 

implement the Maritime Transportation Security Act. So——

Senator CANTWELL. Well, thank you. Thank you, Admiral. 

And thank you, Chairwoman Snowe, for holding this hearing. I 

don’t think there is an agency that has a bigger challenge in carrying out such a diverse set of missions than the Coast Guard 

under this new Homeland Security regime as well as continuing 

day-to-day security and non-security missions. This is particularly 

true in the Northwest, where you have a major port with major 

traffic, issues of oil spill, issues on the border relating to moving 

illegal drugs and trying to stop and intervene that traffic. We also 

60

have the larger security mission of the ferry system and the complexity associated with agencies like NSF tied to the Coast Guard 

budget through the Polar Icebreaker. I can’t imagine a more complex job. Maybe Admiral Collins would volunteer for an extension 

of his command to get us through this new period. 

[Laughter.] 

Senator CANTWELL. I certainly appreciate the hard work of the 

Coast Guard in these challenging times. 

Admiral COLLINS. Thank you, Senator. 

Senator SNOWE. I Couldn’t agree more. I certainly share the sentiments expressed by Senator Cantwell. I concur. And having seen 

what the men and women do, and all of you who provide the extraordinary leadership, we thank you and we commend you. 

I also wanted to followup on the Oil Spill Liability Fund. It was 

funded by five-dollar tax back in 1990. And if the fund fell below 

one billion prior to 1995, the tax would reactivate. After 1995, the 

tax can only be reinstated by legislation. Is that your understanding? 

Admiral COLLINS. That’s what—that’s how I’ve been briefed, Senator, that it no longer is operative after the mid 1990’s. 

Senator SNOWE. OK. 

Admiral COLLINS. Without legislation. 

Senator SNOWE. Without legislation, exactly. 

Well, thank you, again. Thank you for your patience. Thank you 

for your testimony. And we’ll be following up on some of these key 

matters. 

Thank you, again. 

Admiral COLLINS. Thank you, Senator. 

[Whereupon, at 11:45 a.m., the hearing was adjourned.] 

(61)

APPENDIX

PREPARED STATEMENT OF HON. FRANK R. LAUTENBERG,

U.S. SENATOR FROM NEW JERSEY

Mr. Chairman, we often say that the world changed on September 11, 2001. And 

that is certainly true for the United States Coast Guard. The Coast Guard has always been a multi-mission agency with a broad and expanding range of responsibilities. Since 9/11, however, significant new Homeland Security demands have been 

placed on the Coast Guard. Prior to that tragic day, only two percent of the Coast 

Guard’s operating budget was devoted to security activities. 

This year’s budget request for security activities represents 28 percent of the Coast 

Guard’s total budget—and an $81 million increase over last year. And that might 

not be enough. More than $100 million in additional security needs are included in 

the Coast Guard’s list of ‘‘unfunded priorities.’’ I take a great interest in the security 

mission of the Coast Guard, as I’m sure all my colleagues do. New Jersey lost 700 

citizens on 9/11... and since then, several warnings have indicated that we are 

at high risk for another attempted attack. 

The security mission of the Coast Guard is critical... but we can’t neglect the 

Guard’s other responsibilities. Last fall, I offered an amendment to restore $100 million that was authorized by Congress for non-security operations, to ensure that the 

Coast Guard has the resources it needs to perform all of its missions. 

I am particularly concerned with the Coast Guard’s activities that protect our waterways from pollution. Just a few months ago we had an oil spill on the Delaware 

River that resulted in a single-hull ship dumping 265,000 gallons of crude oil into 

that important shipping channel and environmental habitat. Under the oil spill protection scheme established in 1990 the liability limit of the company that caused 

the spill was only $45 million. Now the cleanup cost has grown to more than $100 

million, and the Federal Government has taken it over. 

That spill alone will cost between $150–$200 million in the end. But the Oil Spill 

Liability Trust Fund only has about $800 million, and will be empty by 2010. I am 

interested in introducing legislation shortly to address some of these problems, including getting rid of single-hull vessels. 

I look forward to hearing the views of our witnesses today. 

PREPARED STATEMENT JOSEPH L. BARNES, NATIONAL EXECUTIVE SECRETARY, FLEET

RESERVE ASSOCIATION

Certificate of non-receipt of federal funds 

Pursuant to the requirements of the House Rule XI, the Fleet Reserve Association 

has not received any federal grant or contract during the current fiscal year or either of the two previous fiscal years. 

Introduction 

Madame Chairman and distinguished Members of the Subcommittee, the Fleet 

Reserve Association (FRA) appreciates the opportunity to present its recommendations on the United States Coast Guard’s FY 2006 Budget. Celebrating its 80th Anniversary, the Association is a Congressionally Chartered non-profit organization 

representing the interests of U.S. Coast Guard, Navy, and Marine Corps personnel 

with regard to compensation, health care, benefits, and quality of life programs. 

Prior to addressing these issues, FRA wishes to thank Congress for the generous 

pay, health care and benefit enhancements enacted in recent years. Of special importance are the targeted pay increases for senior enlisted personnel, health care 

access improvements, higher housing allowances and additional benefits for Reserve 

personnel. The Association is also grateful for the passage of legislation authorizing 

the Commandant of the Coast Guard the authority to express his or her personal 

opinion, if asked, while testifying before Congress. 

62

Coast Guard parity with DoD personnel programs remains a high priority for FRA 

with regard to the Coast Guard. 

Pay 

Congress has for the past few years improved compensation that, in turn, enhanced the recruitment and retention of quality personnel in an all-volunteer environment. Adequate and targeted pay increases for middle grade and senior petty 

and noncommissioned officers have contributed to improved morale and readiness. 

With a uniformed community that is more than 50 percent married, satisfactory 

compensation helps relieve much of the tension brought on by demanding operational and personal tempos. 

For FY 2006, the Administration has recommended a 3.1 percent across the board 

basic pay increase for members of the Armed Forces. This is commensurate with 

the 1999 formula to provide increases of 0.5 percentage point greater than that of 

the previous year for the private sector. With the addition of targeted raises authorized by Congress in FY 2001, the formula has reduced the pay gap with the private 

sector from 13.5 percent to 5.2 percent following the January 1, 2005, pay hike. 

FRA, however, is disappointed that no targeted pay increases are recommended 

for FY 2006, particularly for mid-grade and more senior enlisted personnel. FRA, 

the 9th Quadrennial Review of Military Compensation (9thQRMC), and even the 

Department of Defense have advocated the necessity for additional targeted pays. 

In spite of the targeted pay increases authorized in recent years, the pay of our noncommissioned and petty officers remains compressed, a situation that has existed 

since the advent of the all-volunteer force. 

FRA has recommended the House and Senate Armed Services Personnel Subcommittees adopt a targeted pay table for FY 2006, at least proportionate to that 

of January 1, 2004, and urges this Subcommittee to support the initiative as it 

would greatly benefit Coast Guard personnel and their families. 

Health Care 

Due in large part to the unique range of geographic locations in which they are 

assigned, Coast Guard personnel and their families often struggle to find medical 

providers who accept the TRICARE Standard benefit. While implementation of 

TRICARE Prime Remote alleviated many of these problems, the standard benefit 

fee for service option’s low reimbursement rates can still make finding health care 

providers a daunting task. Unfortunately, Coast Guard personnel who choose to receive care at Military Treatment Facilities (MTFs) may have to travel long distances 

to receive care. FRA is concerned that low reimbursement rates will continue to 

make health care access a challenge for Coast Guard personnel stationed in remote 

locations. 

Dental costs and associated reimbursement rates are also challenging for Coast 

Guard personnel. For example, the orthodontic benefit is capped at $1,500 thereby 

causing substantially increased personal expenses to Coast Guard personnel, especially in high cost areas. 

Reserve Health Care—FRA is grateful to Congress for including in the FY 2005 

National Defense Authorization Act language allowing Reservists to continue receiving TRICARE coverage for up to 180 days following separation from active duty. 

While the new provision will aid many Reservists who experience a lapse in coverage following demobilization, more needs to be done. Some Reservists have coverage through private employers, others through the Federal Government, and still 

others have no coverage. Reserve families with employer-based health insurance 

must, in some cases, pick up the full cost of premiums during an extended activation. Although TRICARE ‘‘kicks in’’ at 30 days activation, many Reserve families 

prefer continuity of care through doctors and their own health insurance. 

Disenrollment from private sector coverage as a consequence of extended activation 

adversely affects family morale and military readiness and is a disincentive for Reservists to reenlist. FRA recommends that Congress authorize legislation granting 

permanent authority for cost-share access to TRICARE for all members of the Selected Reserve and their families in order to ensure medical readiness and provide 

continuity of health insurance coverage. 

Like their active duty colleagues, many Reserve families live in locations where 

it is difficult or impossible to find providers who will accept new TRICARE Standard 

patients. In 2001, DoD recognized this problem and announced a policy change 

under which DoD would pay the premiums for the Federal Employee Health Benefit 

Program (FEHBP) for DoD Reservist-employees activated for extended periods. 

Since the current program only benefits about ten percent of the Selected Reserve 

Force, FRA urges expanding this program to include the authority for federal payVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00066 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
63

ment of civilian health care premiums (up to the TRICARE limit) for dependents 

of mobilized Coast Guard Reserve personnel. 

Housing Standards and Allowances 

FRA supports revised housing standards that are more realistic and appropriate 

for each pay grade. Many enlisted personnel are unaware of the standards for their 

respective pay grade and assume they are entitled to a higher standard than authorized. Enlisted members, for example, are not eligible to receive BAH for a threebedroom single-family detached house until achieving the rank of E–9—representing 

only one percent of the enlisted force—yet many personnel in more junior pay 

grades do in fact reside in detached homes. As a minimum, the BAH standard (single-family detached house) should be extended over several years to qualifying service members beginning in grade E–8 and subsequently to grade E–7 and below as 

resources allow. 

FRA is pleased that the Administration’s FY 2006 budget request includes full 

funding for Coast Guard military pay and benefits. The Coast Guard also continues 

to receive strong support for benefit parity with DoD and is on par with DoD benefits including requirements to collect Hazardous Duty Incentive Pay (HDIP). 

The Association appreciates Congressional support for increased BAH rates for 

Coast Guard personnel and enactment of a plan to eliminate average out of pocket 

housing costs over several years. The President’s FY 2006 budget includes funding 

to support these improvements. BAH rates allow Coast Guard members and their 

families to maximize housing choices in communities where adequate housing exists, helping alleviate the need for government housing. That said, with a large 

number of Coast Guard personnel stationed in high cost areas, the issue of ensuring 

that average out of pocket costs housing expenses are eliminated needs to be 

tracked closely. 

FRA also appreciates enactment of Coast Guard Housing Authorities legislation, 

to improve government housing. As a result of this legislation, the Coast Guard is 

proactively exploring the Public Privatization Venture (PPV) program with the 

hopes of replicating the successes DoD has experienced. It transferred 318 units in 

Red Hill, Hawaii to the U.S. Army, which subsequently transferred more than 7,000 

units to Actus Land Leasing in October 2004. The Coast Guard has also entered 

into a similar venture with the Navy in New Orleans, and privatization feasibility 

studies are currently underway in Alaska and Cape May, New Jersey. 

Permanent Change of Station (PCS) Reform Initiatives 

FRA commends Congress for authorizing the Families First Program, which upon 

full implementation will usher in much needed reforms to the Permanent Change 

of Station (PCS) process including the full reimbursement of the cost of lost or damaged household goods. The Association strongly supports full funding for the program in FY 2006. 

Dislocation Allowance—Relocating on government orders is costly and throughout a military career, service members undergo a number of permanent changes of 

station. Each move usually requires additional expenses for relocating to a new area 

far removed from the service members’ current location. 

Dislocation allowances are authorized for military-ordered moves. To aid service 

members in defraying these additional costs, Congress in 1955 adopted the payment 

of a special allowance—termed ‘‘dislocation allowance’’—to recognize that duty station changes and resultant household relocations reflect personnel management decisions of the armed forces and are not subject to the control of individual members. 

Odd as it may appear, service members preparing to retire from the Armed Services are not eligible for dislocation allowances, yet many are subject to the same additional expenses they experienced when effecting a permanent change of station 

during the 20 or more years of active duty spent earning the honor to retire. In either case, moving on orders to another duty station or to retire are both reflective 

of a management decision. Retiring military personnel after completing 20 years of 

service is advantageous to the Armed Services. It opens the ranks to much younger 

and healthier accessions. 

FRA recommends amending 37 U.S.C. § 407, to authorize the payment of dislocation allowances to members of the armed forces retiring or transferring to an inactive duty status who perform a ‘‘final change of station’’ move of 50 or more miles, 

and urges the Subcommittee to support such an amendment. 

Weight Allowances—FRA also recommends modifying PCS household goods 

weight allowance tables for personnel in pay grades E–7, E–8 and E–9 to coincide 

with allowances for officers in grades 0–4, 0–5, and 0–6, respectively. These allowances were recently increased for grades E–1 through E–4, but weight allowance inVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00067 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
64

creases are also needed for service members in other grades, to more accurately reflect the normal accumulation of household goods over the course of a career. 

Shipment of Privately Owned Vehicles—Expanding the number of privately 

owned vehicles a military family can ship during a PCS from one to two for personnel assigned to Alaska and Hawaii is another FRA supported initiative which 

falls into the category of family readiness as well as PCS reform. This is an issue 

of particular concern to Coast Guard personnel stationed in these locations as it is 

becoming increasingly difficult to commute to the workplace of the now common, 

two working adults, and would greatly benefit from the Subcommittee’s support. 

Family Readiness 

It is often said that the military recruits the service member, but retains a family. 

As our nation asks its all-volunteer force, at least 50 percent of whom are married, 

to deploy into harms way, family readiness has never been more important. 

FRA wholeheartedly supports initiatives to enhance survivor benefits to include 

increasing the death gratuity to $100,000 and the amount of Service members 

Group Life Insurance (SGLI) coverage from $250,000 to $400,000 at no additional 

cost to the service member. The Association also maintains that eligibility for death 

benefit enhancements should include dependents of any service member who dies 

in the line of duty regardless of whether or not the death was combat related. 

Another effective method of maintaining a high level of family readiness is 

through the effective and consistent communication of existing programs and resources available to active and Reserve personnel and their families. The increased 

use of Reserve units to serve along side active duty components has caused considerable challenges for certain individual Reservists. Not only has their mobilization 

placed a strain on employment and income, but on the family as well. 

Benefits information, spouse employment assistance, options for child care and 

guidance on utilizing the TRICARE benefit are just a few issues that are constantly 

being updated, creating a need for easily accessible and current information. DoD 

services have worked to enhance the lines of communication via its Military One 

Source web sites, and the Coast Guard provides family members with a multitude 

of resources on its Personnel Service Center’s web site ( http://www.uscg.mil/hq/

psc/ ). Online resources combined with a strengthened Ombudsman program will 

help Coast Guard family members stay up to date on their benefits. 

Availability and Affordability of Child Care—The availability and accessibility of affordable childcare is a very important quality of life issue for Coast Guard 

personnel and their families. There are approximately 700 children in Coast Guard 

childcare facilities and the program operates under the same standards for care as 

that of DoD. 

High cost childcare can often be attributed to the fact that most of the unit locations preclude access to DoD and Coast Guard child development centers. As in the 

past, FRA stresses the importance of adequately funding this important program. 

The Coast Guard continues to explore ways to defer childcare costs to members 

in remote, high cost areas. This includes exploring possible partnerships with GSA 

and private industry. FRA strongly supports these initiatives and encourages timely 

research and implementation for the benefit of personnel and their families. 

Education Benefits 

Increased funding for personnel benefits in the President’s FY 2006 budget will 

enable the Coast Guard to adequately support its education programs, specifically 

the Tuition Assistance Program. This enables the service to maintain parity with 

DoD. Tuition Assistance is a high priority for the active and Reserve forces and is 

a key element associated with successful recruiting initiatives. Enhancements to 

this program and Montgomery GI Bill (MGIB) have significantly impacted recruiting and retention efforts. 

FRA advocates the creation of a benchmark for the MGIB so its benefits will keep 

pace with the cost of an average four year college education. Even with the October 

1, 2004 increases in basic rates, the MGIB only covers about 60 percent of current 

tuition expenses. 

Coast Guard personnel are among the 61,000 senior enlisted personnel who entered service during the Veterans Education Assistance Program (VEAP) era (1977–

1985), and have not had the opportunity to sign up for the MGIB. FRA urges authorization of an open enrollment period giving enlisted leaders the opportunity to 

sign up for increased educational benefits provided by the GI Bill. 

The Montgomery GI Bill is often characterized as a form of compensation or as 

a ‘‘recruiting tool.’’ However, FRA would argue that it would be more appropriate 

to consider the benefit an investment in our nation’s future. Military personnel can 

use the MGIB on active duty to aid in their professional development, giving them 

65

the tools to become better leaders, mentors and representatives of their respective 

service. Many veterans who leave the military and use the GI bill to further their 

education have become more productive members of our society. From the offensive 

backfield of the Denver Broncos to the halls of Congress to several Fortune 500 

Companies to small businesses in Main Street, America, there are college graduates 

who used the MGIB stipend to help pay for their education. These veterans pay 

taxes, returning more in revenue to the Treasury than what they might have contributed without a degree. (Persons with Bachelor Degrees earn 70 percent more on 

average than those with a high school diploma.) 

Our nation has a responsibility to ensure the MGIB investment remains a relevant supplement to completing one’s education. We must give our veterans the 

tools to excel in an academic environment. 

MGIB–SR—The Selected Reserve MGIB has failed to maintain a creditable rate 

of benefits with those authorized in Title 38, Chapter 30. Other than cost-of-living 

increases, only two improvements in benefits have been approved since 1985. In 

that year MGIB rates were established at 47 percent of active duty benefits. This 

past October 1, the rate fell to 27 percent of the Chapter 30 benefits. While the allowance has inched up by only 7 percent since its inception, the average cost of tuition at a 4-year university increased by 10.5 percent in the 2004–2005 school year 

alone. 

FRA stands four square in support of the Nation’s Reservists. To provide an incentive for young citizens to enlist and remain in the Reserves, FRA recommends 

that Congress enhance the MGIB–SR rates to the intended level for those who 

choose to participate in the program. 

Academic Protection for Reservists—There are cases where Reservists, attending higher institutions of learning, called to active duty in the defense of the 

Nation and its citizens, lose credits or prepaid tuition costs because they did not 

complete the course of instruction. FRA believes Congress should adopt legislation 

requiring colleges and universities to retain and reactivate the credits and prepaid 

costs for the Reservists upon demobilization. 

Other Reserve Initiatives 

Eliminate BAH II—To ensure Reservists’ compensation reflects the duties our 

Nation has asked them to perform, FRA recommends a policy change authorizing 

Reservists activated 30 days or more to become eligible for locality based Basic Allowance for Housing (BAH). Current policy requires Reservists serving less than 140 

days to receive ‘‘BAH–II,’’ which is generally a flat-rate amount based on pay grade 

and marital status rather than the market-influenced, geographically driven allowance that active duty personnel receive. 

Training and End Strengths 

FRA fully supports the Coast Guard’s professional development enhancements including the placement of a senior enlisted cadre within the U.S. Coast Guard Academy Corps of Cadets for the purpose of providing an enlisted perspective, 

mentorship and experienced physical guidance. Other initiatives include the successful launch of an Enlisted Professional Military Education Program, increased 

participation in the Coast Guard’s Leadership and Management School for mid 

grade enlisted personnel, and the development of a comprehensive Unit Leadership 

Development Program (ULDP) for unit-level training. 

The Coast Guard’s focus on developing opportunities for, and encouraging participation in, professional development is a clear indicator of the service’s commitment 

to retaining quality personnel. Not only does it better prepare enlisted and commissioned leaders for negotiating an oftentimes rigorous operations tempo, but it helps 

the Coast Guard continue to define itself as an ‘‘employer of choice’’ for prospective 

recruits. 

Recruiting and Retention 

FRA is pleased that the President’s FY 2006 budget fully supports all Coast 

Guard recruiting initiatives and incentives. The Coast Guard exceeded its active 

duty recruiting mission and the current retention rate within its enlisted workforce 

is at impressive 89.6 percent. Increased visibility and a robust recruiting system 

coupled with enlistment bonuses is enabling the Coast Guard to maintain a steady 

flow of new recruits. 

The Coast Guard has also opened new recruiting offices to target diversity rich 

communities. Increased opportunities for advancement, improved sea pay and selected reenlistment bonuses contributed to the aforementioned retention rates. 

Recent officer continuation legislation as well as steadily increased promotion selection opportunities for mid-grade officers has also helped contribute to a better ofVerDate 0ct 09 2002 10:15 Nov 21, 2005 Jkt 021672 PO 00000 Frm 00069 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\21672.TXT JACK PsN: JACKF
66

ficer retention rate. The Coast Guard continues the always-difficult recruiting challenge to meet the diversity and skill sets required to best fill the future workforce. 

USSBP Reform 

With an average age of 68 on its membership roll, reform of the Uniformed Services Survivor Benefit Plan (USSBP) remains a legislative priority for the Association. The FRA commends Congress for passing legislation to eliminate the social security offset, ending an unfair policy that adversely affected nearly 1.7 military retirees and survivors alike, and views changing the effective date for paid-up coverage from 2008 to 2005 as the next step in reforming the plan. 

There are three compelling reasons to amend the Plan. One, the cost of participating in USSBP has increased from 60 percent for the military retiree to more 

than 80 percent allowing the Department of Defense to renege on its original charge 

to provide 40 percent of the cost. Two, the USSBP was fashioned from the survivor 

program for retired federal employees, yet the military retiree on the average will 

pay more for participating in his or her Plan. Three, the military retiree on the average will pay into the USSBP over a longer period than the federal retiree. Although Congress has adopted a time for USSBP participants to halt payments of 

premiums (when payments of premiums equal 30 years and the military retiree is 

70 years of age) the date is more than three years away. Military retirees enrolling 

on the initial enrollment date (1972) will this September be paying premiums for 

33 years, by 2008, thirty-six years. FRA recommends and urges Congress to restore 

the value of participating in the program by adopting legislation to change the date 

2008 to 2005. 

Exchange/MWR Programs 

The Coast Guard relies heavily on vital non-pay compensation programs to provide for the health and well-being of its personnel and their dependents, and to ensure good morale as well as mission readiness. 

The Coast Guard’s Morale, Welfare, and Recreation (MWR) program and the 

Coast Guard Exchange System (CGES) provide important services to members and 

their families. Proceeds from CGES sales generate funds for MWR programs including retail stores, fitness centers, gymnasiums, libraries, and child development centers. All indirectly support the Coast Guard’s mission while helping ease the challenges and rigors of often demanding duty assignments. 

FRA is closely tracking the development of DoD’s Unified Exchange Task Force’s 

proposal for shared services among military exchanges, and asks that Congress provide appropriate funding support for CGES and MWR programs to ensure the wellbeing and morale of all Coast Guard personnel and their families. 

Conclusion 

Madame Chairman, FRA appreciates the opportunity to submit its views for the 

record on pay, health care and other programs important to Coast Guard personnel. 

The Association salutes you and Members of your distinguished Subcommittee for 

effective oversight of our Nation’s all-important fifth Armed Service, and for your 

untiring commitment to the men and women serving so proudly in our United 

States Coast Guard. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

ADMIRAL THOMAS H. COLLINS

Mission Balance 

Question. What checks and performance goals have you established to ensure the 

Coast Guard effectively maintains its traditional missions as well as its expanded 

homeland security role? Of particular concern to myself and several Members of this 

Committee as you know is fisheries enforcement and also commercial fishing vessel 

safety (the recent tragedies in New England alone has cost the lives of 10 fishermen 

in recent months). 

Answer. The Coast Guard continues to implement the President’s Management 

Agenda (PMA). 

Consistent with the PMA and PART, the Coast Guard has established performance targets and long-term goals for each of the 11 Coast Guard missions, as defined in Section 888 of the Homeland Security Act of 2002. The Coast Guard monitors and tracks performance within each of these missions, and documents results 

in an annual report. The Coast Guard continues to strive toward meeting performance targets across the entire spectrum of Coast Guard missions. In Fiscal Year 

2004 the Coast Guard met or exceeded Fiscal Year 2001 performance levels in five 

of its six non-homeland security missions and met 2004 performance targets for 

67

Search and Rescue, Migrant Interdiction, Aids-to-Navigation, and Marine Environmental Protection. Specifically, in Fiscal Year 2004 the Coast Guard:

• Rescued 86.8 percent of all mariners in imminent danger, exceeding the performance goal of 85 percent.

• Prevented illegal entry into the U.S. of 10,899 illegal migrants—the highest 

level in 10 years—meeting the performance target to interdict or deter at least 

87 percent of illegal migrants entering the U.S. through maritime means.

• Continued to safely and efficiently manage America’s waterways, meeting Aids 

to Navigation mission performance targets, reducing the number of distinct collisions (down to 218 from 280), allisions (down to 616 from 738), and grounding 

events (down 709 from 802) by 15 percent from 1,820 in FY03 to 1,543 in FY04.

• Protected the marine environment by reducing the five-year average of oil and 

chemical spills greater than 100 gallons per 100 million tons shipped to 22.1 

from 29.4 in Fiscal Year 2003 and well below the Marine Environmental Protection mission performance target of 41.

• Continued to focus on improving maritime safety, reducing the number of maritime worker and passenger injuries and deaths from 597 in 2003 to 582 in 2004, 

well below the program sub-target of 771. (Full calculation of program performance includes recreational boating fatalities, which depends on state data which 

will not be available until later this Spring).

• Broke previous counter drug seizure records, seizing 241,713 pounds (previous 

record was 138,393 pounds) of cocaine and removing over 350,000 pounds of cocaine from the marketplace. (Full calculation of the Coast Guard’s counter drug 

performance (Removal Rate) depends on flow rate data which will be provided 

by the Interagency Assessment of Cocaine Movement later this Spring).

• Continued to achieve high Ice Operations and Living Marine Resources mission 

performance levels, despite just missing performance targets. Efforts in connection with the Ice Operations mission-program resulted in four days of waterways closures (target was two days or less). The Living Marine Resources mission achieved a compliance rate of 96.3 percent vice a goal of 97 percent—although the total number of fisheries boardings soared to 4,560, the highest total 

since Fiscal Year 2001.

The Coast Guard also employs several readiness standards to ensure mission performance. For example, all units with primary Search and Rescue responsibility 

(most notably, multi-mission small boat stations and rotary wing air stations) are 

required to be able to respond within a set time frame to a distress call. Compliance 

with these types of readiness standards helps to ensure desired performance outcomes (e.g. save 85 percent of mariners in distress) are achieved. The President’s Fiscal Year 2006 budget requests an increase of $570 million over 

Fiscal Year 2005 funding levels, ensuring the Coast Guard is adequately funded and 

prepared to meet its mission demands, reduce maritime risk and improve performance across all missions. 

In addition to sustaining current levels of operational funding, the Coast Guard’s 

Fiscal Year 2006 budget funds several recapitalizing initiatives (e.g. Deepwater, 

Rescue 21, Response Boat-Medium, High Frequency Communications Recapitalization), critical to restoring readiness to Coast Guard operational assets and subsystems—the very foundation of Coast Guard operational capability and capacity. 

The enhanced capabilities delivered through these major acquisition projects will ensure readiness and contribute to improved performance in all Coast Guard missions 

and activities, including fisheries enforcement and commercial fishing vessel safety. 

The Fiscal Year 2006 budget continues aggressive implementation of Maritime Security Strategy to increase Maritime Domain Awareness (MDA), operational presence, and response posture with the ultimate goal of reducing maritime risk. Fiscal 

year 2006 initiatives include implementing the Common Operational Picture, continuing the nationwide deployment of the Automatic Identification System, increasing maritime patrol aircraft flight hours, enhancing radiological and nuclear detection capabilities, equipping organic helicopters with Airborne Use of Force capability, replacing obsolete cutter small boats with more capable Cutter Boats—Over 

the Horizon, and providing additional Response Boat-Small allowances. These initiatives will enhance MDA and operational presence—improving maritime security and 

the Coast Guard’s ability to perform all Coast Guard missions. 

Future Port Security Grants 

Question. How would port and facility operators be assured that port security 

funds would be available to carry out the federally-mandated security plan requirements if a single grant program was established? 

68

Answer. The Office of State and Local Government Coordination and Preparedness (SLGCP) and the Coast Guard are currently working together to design a coordinated risk management planning process that builds on and compliments work 

already accomplished under the Maritime Transportation Security Act (MTSA). The 

port-wide planning process will be prototyped during Fiscal Year (FY) 2005 and implemented as a program requirement during FY 2006. Development of this process 

will ensure that the security needs of our ports are documented and addressed 

through a risk-based framework consistent with the decision information needs of 

the Targeted Infrastructure Protection Program (TIPP) program. 

DHS is committed to providing the resources needed to secure our Nation’s critical infrastructure, including seaports and port facilities. The TIPP proposed in the 

President’s FY 2006 budget would consolidate grants to protect critical infrastructures such as seaports, mass transit, railways and energy facilities into a single, 

comprehensive program based on risk. The President’s FY 2006 budget request for 

TIPP also represents an increase of approximately $235 million above the FY 2005 

appropriated level for all infrastructure protection, including port security, mass 

transit security, and buffer zone protection efforts among others. 

Proposal of RDT&E Consolidation 

Question. The budget request proposes to consolidate the Coast Guard’s research 

and development efforts within the Department of Homeland Security’s (DHS) 

Science and Technology Directorate. Section 888 of the Homeland Security Act requires the Coast Guard to remain intact within DHS, and Congress rejected this 

proposal last year. Could you inform the Committee as to why the Department once 

again makes this proposal when it is contrary to Section 888 of the Homeland Security Act and it was rejected by the Congress last year? 

Answer. The intent of this proposal is not to consolidate or eliminate Coast Guard 

Research and Development (R&D) functions. Rather, it is focused on consolidating 

R&D funding to maximize efficiencies and effective use of R&D funding across the 

entire Department while eliminating redundant R&D efforts. The Coast Guard and 

the Department of Homeland Security’s Science and Technology Directorate (S&T) 

are proposing to continue a productive collaborative relationship in 2006 through reimbursable agreements. As presented in the budget, the Coast Guard anticipates receiving $24 million from the S&T directorate in FY 2006 as reimbursement for the 

R&D projects it will execute. 

The Coast Guard will work in close coordination with DHS S&T to ensure R&D 

programs address known capability gaps and scarce resources are most effectively 

leveraged to the Nation’s best advantage. 

Availability of RDT&E Funding 

Question. Under the budget proposal, it is estimated that the Service’s Research and Development Center could receive up to $24 million in Fiscal Year 2006 for the 

research and development efforts of the center. Is it also possible that the Coast 

Guard could receive no funds under this consolidation scenario? 

Answer. No. The Coast Guard and the Department of Homeland Security’s Directorate of Science and Technology (DHS S&T) will continue a productive and collaborative relationship. The Coast Guard anticipates receiving $24 million in Research 

and Development (R&D) reimbursable funds from DHS S&T, including funding to 

operate the Coast Guard R&D Center. Throughout the remainder of the year the 

Coast Guard can also compete for additional Departmental R&D in accordance with 

DHS S&T prioritization protocols. 

Communications Interoperability 

Question. What efforts is the Coast Guard taking to insure the full communications interoperability among its own assets, and between those assets and other federal, state and local emergency responders that allows for information within the 

maritime domain to be shared? 

Answer. The Coast Guard currently has communications interoperability between 

its assets; primarily with voice communications and some data communications capabilities. The Deepwater and Rescue 21 acquisitions will provide enhanced voice 

and data communications interoperability among Coast Guard assets. In addition, 

the Coast Guard is working closely with the DHS Wireless Management Office 

(WMO) and the Office of Interoperability and Compatibility (OIC) to develop seamless communications interoperability between the Coast Guard, DHS, and other federal, state, and local emergency responders to allow information within the maritime domain to be shared. Through the DHS Wireless Management Office, DHS is 

coordinating all wireless initiatives (e.g. Rescue 21, Project SAFECOM, Integrated 

Wireless Network) to ensure interoperability with Federal, State, and local emergency responders. 

69

The Coast Guard remains focused on technology to integrate or make communications more interoperable. The Coast Guard recently revised the Integrated Deepwater System (IDS) Mission Need Statement (MNS) to outline the C4ISR Architecture Framework and provide uniform methods for describing information systems 

and their performance in context with mission and functional effectiveness. The 

C4ISR suite on each IDS asset will collect and transmit raw data to an operations 

center that uses the data to produce a Common Operational Picture which in turn 

is sent back to assets for their use. The Common Operational Picture is being designed to ensure seamless interoperability with Coast Guard units, DHS, DoD, 

Navy, and other agencies—a true force multiplier in the fullest sense. When Deepwater is fully implemented, Coast Guard cutters and aircraft will have improved capabilities to receive information from a wide array of mission-capable platforms and 

sensors—enabling them to share a Common Operating Picture as part of a networkcentric force operating in tandem with other cutters, boats, and both manned aircraft and unmanned aerial vehicles. 

The Coast Guard is also updating our short-range communications systems 

through the Rescue 21 acquisition to be compatible with the Association of Public 

Safety Communications Officials (APCO P25) standard. For example, Rescue 21 provides the capability to ‘‘patch’’ our communications systems to other responders’ 

communications infrastructure so that our mobile assets will be able to exchange 

sensitive but unclassified (SBU) information with non-Coast Guard mobile assets. 

This standard was established to improve interoperability between federal, state, 

and local emergency responders. Rescue 21 is updating the shore-based National 

Distress System and numerous small vessel types. 

Rescue 21 Status 

Question. Could you please update the Committee as to where the Rescue 21 program stands now? What level of funding would you anticipate needing in the out 

years to complete full implementation of Rescue 21? 

Answer. Rescue 21 completed Operational Testing and Evaluation (OT&E) on 

February 25, 2005. The results have been evaluated and the Coast Guard is developing a plan to address OT&E issues in order to achieve Initial Operating Capability (IOC) as soon as possible. Approval of Key Decision Point (KDP) 3, currently 

scheduled for May 2005, will allow the project to complete installation within the 

first 21 regions and design for an additional 11 regions. The FY06 budget request 

of $101 million is critical to keep the project on track to complete installation at 

the next 11 regions and complete design of the final 14 regions. 

The Coast Guard’s Capital Investment Plan (CIP) includes $100M in FY 2007 to 

complete the project. 

Coast Guard and DoD BRAC 

Question. What role is the USCG playing in the DoD’s BRAC process? 

Answer. The United States Coast Guard (CG) does not have a formal role in the 

Department of Defense (DoD) Base Realignment and Closure (BRAC) process. The 

CG is potentially impacted, however, due to co-locations, shared resources and support agreements. In locations where the Coast Guard is potentially impacted, the 

DoD services have afforded the CG to provide input into their process. 

The CG has and will continue to share concerns with DoD regarding sites where 

CG operations and/or facilities are co-located and where CG/DoD service agreements 

exist. 

The CG will work with DoD to develop mitigation strategies for impacted units 

and services. 

Pay Gap 

Question. Do you believe there is more progress to be made [in] the area concerning pay gaps? Is the gap still too large in your opinion for comparable civilian 

occupations? 

Answer. Military compensation has improved significantly in the areas of Basic 

Pay, Basic Allowance for Housing (BAH), and Basic Allowance for Subsistence 

(BAS). As a result, Military Basic Pay raises have greatly contributed to the reduction of the gap between equivalent military and civilian compensation levels. According to DoD—including the proposed 2006 Basic Pay increase, military compensation is within an estimated 93 percent overall comparability with similar civilian compensation levels. BAH is now a market-based allowance that provides an allowance to offset the cost of median rental housing for Coast Guard members. BAS 

benefits all enlisted personnel and is appropriately indexed to the actual cost of food 

(as measured by USDA market basket indices). For enlisted ranks, I believe more 

attention is needed at the mid-grade (E5) and lower senior grade (E7) levels. 

70

Educating Members on Non-Pay Benefits 

Question. What efforts does the Coast Guard undertake to educate its members 

on the value of the other, non-pay compensation benefits of serving? 

Answer. Non-pay benefits are a critical part of the overall compensation of Coast 

Guard members. Recognizing the impact non-pay benefits have on member morale 

and retention, the Coast guard strives to take advantage of every opportunity to 

educate its members of those benefits—beginning with initial indoctrination during 

the recruiting process and continually throughout a member’s career to ensure they 

are kept abreast of any changes to the benefits. 

Recruiters explain non-pay benefits to potential recruits and their families. Below 

is a list of the non-pay benefits covered during recruiting activities:

• Available Work-Life services (e.g., divorce, marital, & bereavement counseling, 

etc.) • Morale, Welfare and Recreation (MWR) benefits • Commissary and exchange privileges (Non-Tax) • Coast Guard owned housing opportunities • Medical and dental benefits • Legal assistance • Tuition assistance • Mutual assistance • Veterans Administration benefits (home buying, educational, retirement) 

• Coast Guard spouses clubs

During a member’s career, the Coast Guard employs various communication mediums through which current benefits and any new changes are explained. Examples 

of some of the main communication vehicles are as follows:

• ALCOAST messages (sent to all Coast Guard units)

• Navy Times/Coast Guard Magazine/Reservist Magazine articles

• Flag Voices (notifications from the Assistant Commandant for Human Resources Coast Guard field units)

CG Biggest Challenge 

Question. If you had to pick just one item, what would you say is the biggest concern facing your men and women? What is their biggest challenge? 

Answer. The biggest challenge facing our Coast Guard men and women is having 

the resources and time to do their best work, and balancing that work with family 

and life goals. Data shows that our people see that we have made progress in providing the resources they need and the time necessary to do their best work, but 

we still have more to do in these areas. Those with families have the challenge of 

how best to balance their duties to their country and family. Those looking to start 

a family are concerned about how they will deal with this challenge. 

The Coast Guard uses the U.S. Office of Personnel Management’s Organizational 

Assessment Survey (OAS) to gauge the perceptions of the Active Duty, Selected Reserve, and Civilian workforces. Coast Guard OAS results are used by leadership to 

gain a better understanding of the issues and concerns affecting members/employees 

and to determine the Coast Guard’s success in addressing these issues and concerns. 

Denied Privileges from Other Services Installations 

Question. Have there been any instances where members of the Coast Guard have 

been denied privileges from other services or their respective military installations? 

Answer. To the Coast Guard’s knowledge, no Coast Guard personnel have been 

denied privileges from other services or their respective military installations. 

Military Families Military Health Care System Concerns 

Question. Is the military health care system broke in your opinion? I understand 

that many military families experience extreme difficulties with simple tasks like 

making routine appointments or scheduling well-baby checks . . . is this true? 

Answer. The Military Healthcare System, while it needs improvement, is not broken. Based on current customer survey results, the overall satisfaction rate with 

TRICARE is good. While some individuals may experience difficulties making appointments, most of these problems are resolved expeditiously when the customer 

contacts either a TRICARE Service Center or a Coast Guard Health Benefits Advisor. The Coast Guard has not received reports of individuals experiencing extreme 

difficulties. Reported difficulties are relatively minor in nature and are due, in part, 

to the recent change in TRICARE Regional Contractors along with revised operating 

guidelines under the new contracts. As beneficiaries, providers, and the TRICARE 

Regional Contractors gain more experience, the frequency of even minor difficulties 

71

is expected to decline. Military Treatment Facilities (MTFs) and the TRICARE contractors monitor their performance in making appointments and arranging referrals. 

TRICARE has access-to-care standards that must be adhered to by the MTFs and 

civilian providers. Alternate health care source referrals are made when these 

standards can not be met. Military families experiencing extreme difficulties may 

contact a TRICARE Service Center (usually co-located with a military clinic) or contact the Health Benefits Advisor assigned to the military clinic. In addition, the 

Coast Guard Maintenance and Logistics Commands, located on both the East and 

West coasts, operate a toll-free Health Benefits Advisor call line (1–800–9HBA–

HBA) to assist our members and their families who are unable to resolve their 

health care problems locally. 

Benefits of Having a Reserve Force 

Question. Can you share some of the benefits of having a reserve force and the 

challenges you experienced in attempting to integrate reserve and active forces? 

Answer. The U.S. Coast Guard (CG) must be prepared to respond to a wide range 

of contingencies at home and abroad in accordance with the authorities and responsibilities vested in the Service by law. The proper training and use of the CG Reserve component is vital to accomplishing the CG’s contingency missions. The CG 

Reserve is fully organized and integrated within the CG’s Active Duty component 

force structure. 

Benefits of the CG Reserve:

• The CG Reserve component exists for contingency mobilization, while providing 

a cost-effective peacetime augmentation force.

• The CG Reserve component is available to dramatically expand the CG’s active 

duty force at an annual cost of less than 2 percent of the Service’s budget.

• The Reserve forces provide a critical ‘‘flex’’ factor in the CG’s ability to respond 

immediately to contingency requirements.

• Reservists can be called up on short notice to respond to natural disasters/national emergencies, and then stood down as conditions stabilize.

• Augmentation (on-the-job) training supports CG operational missions and requirements, thereby adding substance to the total force and supporting day-today operations. Mobilization readiness, however, is always the paramount consideration when implementing a mobilization training program during normal 

drills and two-week annual active duty periods.

• The CG continues its effective mission performance by leveraging technology 

and optimizing the employment of all its human resources.

• CG Reserve forces provide a visible and exercised relationship between the CG 

and DoD, as well serve as a link to the public.

• These benefits have a tremendous impact on the CG’s ability to perform its missions. Most recently, they have been exercised extensively in the implementation of the Maritime Transportation Security Act (MTSA) as well as contributing to operations in support of the Global War on Terrorism. Without its Reserve component, it would have been impossible for the CG to implement MTSA 

on schedule, support overseas operations or the domestic military outloads in 

support of those operations.

Challenges facing the CG Reserve:

• Identifying the highest priority use of the Reserve Force in a post-September 

11th environment, given the vast amount of contingency requirements.

• Ensuring augmentation performed by Reservists directly relates to their mobilization assignments.

• Educating the Active Duty component regarding the nuances, unique polices, 

and employer issues specific to the CG Reserve.

• Assuring that a strong focus remains on the Reserve force so that Reservists 

are fully ready to mobilize to respond to a wide variety of contingencies on short 

notice.

• Sustaining an effective Reserve recruiting effort to meet the needs of the service.

• Maintaining the specialty skill sets needed to meet Reserve component workforce requirements.

72

Administrative and Processing Nightmares 

Question. What measures have been put into place to ensure that Coast Guard 

members do not suffer from the administrative and processing nightmares that we 

continue to read and hear about with members from other services? 

Answer. The Coast Guard has made it a priority to minimize pay and personnel 

issues resulting from reserve mobilization/demobilization while cumulatively recalling 6,813 Reservists since September 11th, representing 84 percent of the 8,100 

member reserve workforce, the highest percentage of any of the military services. 

Coast Guard efforts to quickly address pay and personnel issues focused on execution of a very aggressive plan that mobilized teams of senior-level pay and personnel 

experts to regions where the largest recall processing requirements existed. 

In conjunction with lessons learned since September 11th, the Coast Guard chartered the Reserve Strategic Assessment Team (RSAT) to conduct a review of the Reserve program. The RSAT review identified 84 corrective actions that address administrative and procedural problems experienced by Reservists and their families 

during mobilization and demobilization. An action plan was developed to correct 

these problems over the next three years. 

Morale or Retention Negative Effects of CG Assets 

Question. Do you believe the condition of the Coast Guard’s assets is having a 

negative effect on the morale or retention of enlisted personnel? 

Answer. The Coast Guard does not have data that indicates a relationship between the condition of its assets and morale or retention. 

Enlisted Personnel Safety Concerns 

Question. Have enlisted personnel ever expressed concerns to you about their safety while they are on Coast Guard assets? 

Answer. Among the military services, the Coast Guard has an enviable safety 

record. There has not been a Coast Guard fatality resulting from an operational accident in over four years. Through the adoption and use of operational risk management programs, a web-based accident reporting system, and other web-based, standalone safety risk management systems, the Coast Guard has been able to dramatically reduce risk to personnel and equipment. 

Both formal and informal processes are in place within the Coast Guard for individuals to address safety questions and concerns. Specific figures regarding the perception of safety among Coast Guard enlisted service members were provided in the 

2004 Organizational Assessment Survey (OAS). Unit-specific OAS results were provided to unit commanding officers, enabling them to focus their leadership efforts 

on any areas that needed attention and/or improvement. Seventy-two percent of enlisted respondents to the OAS agreed with the statement that they are ‘‘protected 

from health and safety hazards on the job,’’ while only 10 percent disagreed. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DANIEL K. INOUYE TO

ADMIRAL THOMAS H. COLLINS

Is the Coast Guard’s Budget Adequate 

Question. It is unclear whether the budget request for security missions is adequate. Over $100 million in additional funding for security is included in the Coast 

Guard’s ‘‘unfunded priorities’’ list. This includes $31 million for maritime domain 

awareness, and $70 million for enhanced maritime safety and security teams. The 

Coast Guard has indicated that it does not have sufficient assets to implement its 

own security protocols at District 14 and elsewhere when the maritime security 

level is elevated due to threats. 

Is the budget request for security missions adequate? Why is over $100 million 

additional funding for security included in the Coast Guard’s ‘‘unfunded priorities’’ 

list, and not in the budget? 

Answer. Increased resources provided by the Congress over the past several years 

have significantly enhanced the Coast Guard’s ability to continue performing traditional missions while considerably improving maritime security. For example, the 

Fiscal Year 2005 enacted budget represents 51 percent growth in funding authority 

since September 11, 2001. This increased funding by enabling the Coast Guard to 

establish 13 Maritime Safety and Security Teams across the nation, deploy over 80 

new small boats and accompanying crews, expand our intelligence capabilities, and 

implement the 2002 Maritime Transportation Security Act (MTSA). Each of these 

initiatives, among many others, have been critical to allowing the Coast Guard to 

meet post 9/11 mission demands, while ensuring no degradation in other performance areas. 

73

The President’s Fiscal Year 2006 budget request represents an 11 percent increase over the comparable Fiscal Year 2005 discretionary funding levels, and demonstrates extremely strong commitment by the Administration to ensure the Coast 

Guard is adequately funded. The resources contained in the budget continue to aggressively implement the core elements of the Department’s Maritime Security 

Strategy. 

For the Fiscal Year 2006 budget, more specifically, robust implementation of organic Airborne Use of Force capability, replacement of obsolete cutter small boats 

with more capable Cutter Boats—Over the Horizon, additional Response Boat-Small 

allowances, and continued replacement of aging 41-foot utility boats with the more 

capable Response Boat-Medium will greatly improve the Department’s maritime 

operational presence and response posture. The President’s budget also includes several maritime domain awareness initiatives; such as implementing the Common 

Operational Picture, continuing the nationwide deployment of the Automatic Identification System, increasing maritime patrol aircraft flight hours, and enhancing radiological and nuclear detection capabilities. Finally, the Fiscal Year 2006 budget 

requests $966 million in Deepwater funding (a $242 million increase over Fiscal 

Year 2005) to recapitalize the Coast Guard’s aging fleet of cutters and aircraft, delivering new/modernized assets equipped with post-9/11 capabilities critical to reducing maritime security risk and enhancing the Coast Guard’s ability to execute all 

its missions. 

The initiatives contained in the Fiscal Year 2006 budget represent the Coast 

Guard’s highest priorities and are the necessary next steps in the Coast Guard’s 

multi-year plan to implement its Maritime Security Strategy. 

Insufficient Assets for Security Protocols in the 14th District 

Question. The Coast Guard has indicated that it does not have sufficient assets 

to implement its own security protocols at District 14 and elsewhere when the maritime security level is elevated due to threats. How does the budget request address 

these gaps? 

Answer. The 2006 Budget continues to improve the Coast Guard’s maritime homeland security capabilities and reduce maritime risk. Specifically, it provides for critical Maritime Domain Awareness (MDA) initiatives and increased or enhanced 

Coast Guard operational presence, both critical components of the Coast Guard’s 

maritime security strategy and posture. 

The 2006 Budget furthers efforts to improve MDA by:

• Continuing deployment of a nationwide Automatic Identification System (AIS) 

infrastructure throughout regional Coast Guard command centers;

• Providing additional Maritime Patrol Aircraft (MPA) resources to fill documented flight hour gaps in support of detection, surveillance, and tracking activities;

• Deploying a Common Operational Picture (COP) through Coast Guard command centers nationwide. The COP will help fuse surveillance and tracking information from systems such as AIS, Rescue 21, and the Ports and Waterways 

Safety System (PAWSS);

• Increasing the capability of Coast Guard cutters and Maritime Safety and Security Teams (MSSTs) to detect Rad/Nuc materials, intercept suspect ships, and 

respond to incidents involving the release of Rad/Nuc substances.

In addition, the 2006 Budget further increases and enhances the Coast Guard’s 

operational presence by:

• Accelerating deployment organic Airborne Use of Force (AUF) capability to five 

Coast Guard Air Stations, increasing the ability to respond to maritime security 

threats;

• Replacing existing obsolete and unstable cutter boats on the High Endurance 

Cutter (WHEC) and Medium Endurance Cutter (WMEC) fleet with the more capable Cutter Boat—Over the Horizon (CB–OTH). This platform nearly doubles 

the speed of the existing cutter boat, increases secure communication capabilities, and when used in conjunction with AUF capability has a 98 percent success rate in stopping suspicious vessels;

• Providing 14 additional Response Boat-Smalls (RB–S) and associated crews to 

provide vessel escorts, and enforce security zones near critical infrastructure including enhancing the LNG tanker and waterside security;

• Reallocating existing Coast Guard resources to immediately fill an existing gap 

in national maritime Law Enforcement and Counter-Terrorism (LE/CT) capability. The permanent establishment of the Coast Guard’s Enhanced MSST (E–

74

MSST) will provide an offensive DHS force able to operate across the full spectrum of LE and CT response in support of homeland security and homeland defense objectives, including CT response capability for scheduled security events 

out to 50 nautical miles from shore and augments interagency assets in high 

visibility venues such as National Special Security Events (NSSEs).

IDS Implementation Plan 

Question. The budget requests $996 million for the Coast Guard’s Deepwater re- capitalization program, yet $240 million of this is for legacy assets. It is unclear 

whether the budget request is adequate. Quite telling is the fact that the Coast 

Guard’s ‘‘unfunded priorities’’ list includes an additional $637 million of money for 

Deepwater, and an additional $63 million for maintaining existing ‘‘legacy’’ assets. 

However, it is difficult to evaluate the budget request or this statement of additional 

needs because the Coast Guard has not provided Congress with its revised Deepwater plan—requested by Congress last year. Moreover, it is unclear that the Coast 

Guard is adequately planning for its shore-based infrastructure needs as Deepwater 

assets are delivered. 

We have been expecting a revised plan for the Coast Guard’s Deepwater program, 

but have not received such a plan. Given the increasing costs and the post-9/11 environment, is the amount requested adequate? When do you anticipate providing us 

with the plan? 

Answer. The Deepwater Revised Implementation Plan was delivered to Congress 

on March 25, 2005. Further information requested by Congress is under development and will be submitted shortly. 

Deepwater Unfunded Priorities 

Question. The ‘‘unfunded priorities’’ list includes an additional $637 million of money for Deepwater, plus another $63 million for maintaining existing ‘‘legacy’’ assets. Is that, plus the $966 million the amount Coast Guard thinks is needed as part 

of the new plan? Answer. The Coast Guard’s Fiscal Year 2006 budget requests $966 million for the 

Integrated Deepwater System to fund the Coast Guard’s highest priority Deepwater 

recapitalization and modernization initiatives:

• Production of the third National Security Cutter,

• Design and long lead materials for the first Offshore Patrol Cutter,

• Six legacy Medium Endurance Cutter mission effectiveness projects,

• Acquisition of the third Vertical Take Off and Landing Unmanned Aerial Vehicle,

• Design and demonstration of the first Fast Response Cutter,

• Re-engining the operational fleet of 84 HH–65 helicopters to eliminate safety 

and reliability issues and restore operational effectiveness of these critical aircraft,

• Enhanced legacy fixed and rotary wing aircraft capabilities through recapitalization of avionics and radar systems,

• Continued development of the command and control system, common operating 

picture, and integrated logistics system.

As discussed in the transmittal letter that accompanied the Coast Guard’s list of 

‘‘unfunded priorities,’’ to the extent that provisions of the Act requiring the list (Public Law 108–334), including section 514, called for submission of legislative recommendations to the Congress, the executive branch construed such provisions in 

a manner consistent with the President’s constitutional authority to supervise the 

unitary executive branch and to recommend for the consideration of the Congress 

such measures as the President judged as necessary and expedient. However, the 

Commandant of the Coast Guard provided the ‘‘unfunded priorities’’ list to Congress 

as a matter of comity. 

Coast Guard staff and managers are available to discuss the contents of the ‘‘unfunded priorities’’ list. 

Foreign Fishing Vessel Incursions 

Question. During Fiscal Year 2000 to Fiscal Year 2004, the Coast Guard reported 

a total of 216 suspected illegal incursions of foreign fishing vessels within the Western/Central Pacific Exclusive Economic Zone. Coast Guard assets detected only 

three of these incursions. All other incursions during this five-year time period were 

reported from other national or industry sources. None of the 24 incursions detected 

in 2004 were interdicted, and it is unclear whether any of the incursions in previous 

years were interdicted. 

75

Over the past five years, only 3 of 216 suspected illegal foreign fishing incursions 

into the Western/Central Pacific Exclusive Economic Zone were observed by the 

Coast Guard during the Fiscal Years 2000 through 2004. Isn’t this part of Coast 

Guard’s responsibility? Why aren’t the C130s or cutters spotting these incidents? 

Answer. The Coast Guard is responsible for patrolling the 1.3 million square nautical miles of ocean comprising the Western/Central Pacific (WCP) Exclusive Economic Zones (EEZ). Recognizing the surveillance challenges for such a vast ocean 

area, in 1993 the Coast Guard entered into a MOU with the Secretaries of Defense 

and Commerce for the use of all source intelligence assets to monitor, collect and 

report vessels that may be in violation of U.S. and international fisheries law. This 

federal agency partnership has improved U.S. fisheries surveillance capability in the 

WCP. 

From 2000 to 2004, the Coast Guard dedicated over 6,900 cutter hours and 908 

aircraft hours to patrol the WCP EEZ. The vastness of the WCP EEZ, combined 

with the limited number of Coast Guard assets with long-range capabilities to patrol 

this area, makes detecting illegal fishing activity solely by Coast Guard assets difficult. For example, a 10 hr C–130 surveillance patrol may result in only 2 hrs of 

on scene EEZ patrol time due to the lengthy transit time and involves forward deployment of a C–130 to Guam to patrol the EEZs of Guam, Wake and the Commonwealth of the Northern Marianas Islands. It takes 1-week for a high endurance cutter to transit to the scene of suspected illegal activity; by then the suspect vessel 

has usually departed. The Coast Guard relies on federal agency and fishing industry 

partnerships to overcome these gaps in capability and capacity to monitor this vast 

ocean area. Improved maritime domain awareness and asset capability, such as unmanned aerial vehicles acquired through the Coast Guard’s Fiscal Year 2006 Integrated Deepwater System budget request, will improve surveillance and monitoring 

of not only the WCP but all high threat EEZ areas. The Coast Guard’s Fiscal Year 

2006 budget also includes funding for additional C–130H and C–130J flight hours, 

a portion of which will help increase patrols in Coast Guard District 14, which includes the WCP EEZ. 

Successfully Interdicted Incursions 

Question. How many of the 216 incursions detected were successfully interdicted? 

Answer. None of the 216 detected incursions from 2000 to 2004 were interdicted. 

The vastness of the 1.3 million square nautical miles of ocean comprising the Western/Central Pacific (WCP) Exclusive Economic Zones (EEZ), combined with the limited number of Coast Guard assets with long-range capabilities to patrol this area, 

makes intercepting illegal fishing activity difficult. For example, it takes approximately 1 week for a high endurance cutter to transit to the scene of suspected illegal 

activity. For a C–130 to respond to suspected illegal activity in the EEZs of Guam, 

Wake and the Commonwealth of the Northern Marianas Islands, it requires a longrange flight to Guam to re-fuel, then another flight to the location of suspected activity. If the suspect vessel departs the U.S. EEZ before a Coast Guard unit arrives 

on scene to establish hot pursuit or document the violation for flag state enforcement, the Coast Guard lacks legal authority under international law to interdict the 

vessel. 

District 14 Maritime Patrol Aircraft 

Question. There is approximately $34 million being requested for improvements 

and expansion of the use of maritime patrol aircraft (MPA). How much of the new 

resources, both in terms of actual aircraft and flight time, are being allocated to District 14? 

Answer. The referenced MPA budget request reflects a collation of multiple requests focused on the build up and support of the Coast Guard’s MPA capabilities. 

Initiatives included are:

(1) C–130H maintenance and sensor personnel, flight hour augments; 

(2) C–130J flight hours and missionization; 

(3) Contract logistics flight services to free up existing MPA airframes; 

(4) Personnel and logistics support for the stand-up of the first three EADS 

CASA C–235Ms due for initial delivery in Fiscal Year 2007.

Within these requests, at least one 100-hour C–130H augment is planned for Air 

Station Barbers Point, including funding for operating expenses and 3 additional enlisted aviation personnel for maintenance. 

76

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. MARIA CANTWELL TO

ADMIRAL THOMAS H. COLLINS

Operations and Maintenance Cost Responsibility for Polar Ice Breakers 

Question. Admiral Collins, why is the Administration proposing that the Coast 

Guard no longer be responsible for the operations and maintenance costs of the 

three polar icebreakers? 

Answer. The Budget proposes to transfer funding for the Polar Icebreaking Program to the National Science Foundation to better align resources with those who 

benefit from the program. While the Coast Guard will continue to operate the polar 

icebreaking fleet on a reimbursable basis in FY 2006, the National Science Foundation will ultimately be responsible for the long-range planning required to refurbish 

or replace the ships, as necessary, which are nearing the end of their serviceable 

lives. 

Funding Uncertainties for Polar Ice Breaking Capability 

Question Admiral Collins, won’t this approach lead to significant uncertainty in 

funding streams needed to maintain these vessels? Are any other Coast Guard assets maintained solely through funding from other agencies? How likely is it that 

this move could eliminate our nation’s polar icebreaker capacity? 

Answer. The Coast Guard is working closely with the NSF to address maintenance of the nation’s polar icebreakers and pay for the Coast Guard personnel who 

operate them. The agencies are developing a new Memorandum of Understanding 

(MOU) that will detail the responsibilities of both parties. 

The Coast Guard does not operate any other assets solely through reimbursement 

from other agencies. The intent of this arrangement is to align funding responsibilities with the benefiting agency in the short-term in order to maintain existing polar 

icebreaker capabilities. With several studies planned and/or ongoing, including a 

National Academies of Sciences study, we anticipate further policy decisions will be 

forthcoming regarding our nation’s future polar icebreaker capacity. 

NSF Contracting for Ice Breaking Services 

Question Admiral Collins, does anything prevent NSF from contracting with icebreakers from other countries, such as Russia, which they did this year while the 

Polar Sea was undergoing repairs? 

Answer. There are no restrictions stated explicitly; however this approach is inconsistent with existing policy decisions such as the 1990 Presidential Decision on 

U.S. polar icebreaker requirements and the 1996 Presidential Decision (PDD/NSC–

26) on U.S. Antarctic Policy. These documents envision only U.S. owned and operated ice breakers for the Arctic and Antarctic missions. 

American Interest for Polar Ice Breaking 

Question. Admiral Collins, how would the loss of our nation’s only polar 

icebreaking fleet affect American interests in the Arctic and Antarctica? 

Answer. In general terms, the loss of our nation’s polar icebreaker fleet would severely limit our nation’s ability to project sovereignty and influence in the polar regions. The specific long-term affects on American interests will be addressed by the 

ongoing National Academies of Sciences polar icebreaker study, which is on schedule 

to provide an interim report by September 2005 and a final report by July 2006. 

Resource Hours on Non-Homeland Security Missions 

Question. Admiral Collins, are resource hours that Coast Guard spends on nonsecurity missions still lower than their pre-9/11 levels? 

Answer. Coast Guard operational efforts will continue to be focused to meet the 

performance targets of all our eleven mission-programs. Adherence to specific target-levels of activity for particular mission areas is detrimental to achieving performance targets in a multi-mission service. We must allocate resources based on 

the greatest need as dictated by the changing risk picture within the maritime domain. This risk-based decision-making by local commanders will continue to be the 

driving factor in how the Coast Guard manages towards an effective mission balance, not striving toward historical resource-hour totals that don’t fully reflect effort 

or the current threat environment.

Total Non-Security mission hours in 2004 were 297,106. 

Total Non-Security mission hours in 2001 were 344,113.

Per Section 888 of the Homeland Security Act of 2002 (Pub.L. 107–296), the Coast 

Guard’s activities are categorized within eleven missions. As summarized below, five 

of these missions are considered homeland security, while the other six are considered non-homeland security missions.

77

Homeland Security Missions Non-Homeland Security Missions 

Ports, Waterways & Coastal Security Marine Safety 

Drug Interdiction Search and Rescue 

Migrant Interdiction Aids to Navigation 

Defense Readiness Living Marine Resources 

Other law enforcement Marine Environmental Protection 

Ice Operations 

In Fiscal Year 2004, the Coast Guard met its performance targets for six of the 

ten mission-programs that have performance measures. In particular, the Coast 

Guard met performance targets for four of its six non-homeland security missionprograms: Search and Rescue, Marine Safety, Aids to Navigation, and Marine Environmental Protection. 

The remaining two non-homeland security missions nearly met their performance 

targets for Fiscal Year 2004. Efforts in connection with the Ice Operations missionprogram resulted in four days of waterways closures while the target was two days 

or less. The Living Marine Resources mission achieved a compliance rate of 96.3 

percent vice a goal of 97 percent—although the total number of fisheries boardings 

soared to 4,560, the highest total since Fiscal Year 2001. 

Furthermore, it is important to understand that several of our mission-programs 

such as Marine Safety and Marine Environmental Protection are performed with 

very little use of the boats, ships or aircraft that figure into resource hour summaries. This is another reason the Coast Guard focuses on the outcomes represented 

by our performance targets rather than the outputs of resource hours. 

District 13 Resource Hours on Non-Homeland Security Missions 

Question. Is this also the case in District 13 (Washington State/Oregon/Idaho/

Montana)? Please provide specific examples. 

Answer. The Coast Guard manages performance on a nationwide level by empowering local Coast Guard operational commanders from the District Commander 

down to the local Station Commanding Officer to use their specialized knowledge 

and understanding of regional conditions as additional factors in making risk-based 

decisions regarding employment of operational assets to effectively balance mission 

activities. 

Through local management of operations, the Coast Guard is able to target use 

of personnel and operational assets to best respond to local threats. For example, 

in areas where there is a large volume of oil cargo traffic and/or commercial fishing 

activity (e.g. District 13, District 17), local operational commanders are able to allocate the appropriate amount of resources to perform Marine Environmental Protection and Living Marine Fisheries activities to meet these regional threats and meet 

mission performance goals. 

Coast Guard operational efforts will continue to be focused upon simultaneously 

meeting the performance targets of all our eleven mission-programs at the national 

level. Adherence to specific target-levels of activity for particular mission areas is 

detrimental to achieving performance targets in a multi-mission service. The Coast 

Guard will continue to allocate resources based on the greatest need as dictated by 

the changing risk picture within the maritime domain. This risk-based decisionmaking by local commanders will continue to be the driving factor in how the Coast 

Guard manages towards an effective mission balance, not striving toward historical 

resource-hour totals that don’t fully reflect effort. 

In Fiscal Year 2004, the Coast Guard met its performance targets for six of the 

ten mission-programs that have performance measures. In particular, the Coast 

Guard met performance targets for four of its six non-homeland security missionprograms: Search and Rescue, Marine Safety, Aids to Navigation, and Marine Environmental Protection. 

Non-Homeland Security Missions and Fewer Resource Hours 

Question. Although the Coast Guard claims that it can do ‘‘more with less,’’ it 

seems that only the non-homeland security missions are suffering from fewer resources. Is that a fair statement? 

Answer. The Coast Guard continues to strive toward meeting performance targets 

across the entire spectrum of Coast Guard missions. In Fiscal Year 2004 the Coast 

Guard met or exceeded Fiscal Year 2001 performance levels in five of its six nonhomeland security missions and met 2004 performance targets for Search and Rescue, Migrant Interdiction, Aids-to-Navigation, and Marine Environmental Protection. Specifically, in Fiscal Year 2004 the Coast Guard:

78

• Rescued 86.8 percent of all mariners in imminent danger, exceeding the performance goal of 85 percent.

• Continued to safely and efficiently manage America’s waterways, meeting Aids 

to Navigation mission performance targets, reducing the number of distinct collisions (down to 218 from 280), allisions (down to 616 from 738), and grounding 

events (down 709 from 802) by 15 percent from 1,820 in Fiscal Year 2003 to 

1,543 in Fiscal Year 2004.

• Protected the marine environment by reducing the five-year average of oil and 

chemical spills greater than 100 gallons per 100 million tons shipped to 22.1 

from 29.4 in Fiscal Year 2003 and well below the Marine Environmental Protection mission performance target of 41.

• Continued to focus on improving maritime safety, reducing the number of maritime worker and passenger injuries and deaths from 597 in 2003 to 582 in 2004, 

well below the program sub-target of 771. (Full calculation of program performance includes recreational boating fatalities, which depends on state data which 

will not be available until later this Spring).

Efforts in connection with the Ice Operations mission-program resulted in four 

days of waterways closures while the target was two days or less. The Living Marine Resources mission achieved a compliance rate of 96.3 percent vice a goal of 97 

percent—although the total number of fisheries boardings soared to 4,560, the highest total since Fiscal Year 2001. 

The President’s Fiscal Year 2006 budget requests an increase of $570 million over 

Fiscal Year 2005 funding levels, ensuring the Coast Guard is adequately funded and 

prepared to meet its mission demands, reduce maritime risk and improve performance across all missions. 

Insufficient Assets for Security Patrols in the 13th District 

Question 1. The Coast Guard has indicated in staff briefings that it does not have 

sufficient assets to implement its own security protocols at District 13 and elsewhere when the maritime security level is elevated due to threats. How does the 

President’s Fiscal Year 2006 budget request address these gaps? 

Answer. The 2006 Budget continues to improve the Coast Guard’s maritime homeland security capabilities and reduce maritime risk. Specifically, it provides for critical Maritime Domain Awareness (MDA) initiatives and increased or enhanced 

Coast Guard operational presence, both critical components of the Coast Guard’s 

maritime security strategy and posture. 

The 2006 Budget furthers efforts to improve MDA by:

• Continuing deployment of a nationwide Automatic Identification System (AIS) 

infrastructure throughout regional Coast Guard command centers;

• Providing additional Maritime Patrol Aircraft (MPA) resources to fill documented flight hour gaps in support of detection, surveillance, and tracking activities;

• Deploying a Common Operational Picture (COP) through Coast Guard command centers nationwide. The COP will help fuse surveillance and tracking information from systems such as AIS, Rescue 21, and the Ports and Waterways 

Safety System (PAWSS);

• Increasing the capability of Coast Guard cutters and Maritime Safety and Security Teams (MSSTs) to detect Rad/Nuc materials, intercept suspect ships, and 

respond to incidents involving the release of Rad/Nuc substances.

In addition, the 2006 Budget further increases and enhances the Coast Guard’s 

operational presence by:

• Accelerating deployment of organic Airborne Use of Force (AUF) capability to 

five Coast Guard Air Stations, increasing the ability to respond to maritime security threats;

• Replacing existing obsolete and unstable cutter boats on the High Endurance 

Cutter (WHEC) and Medium Endurance Cutter (WMEC) fleet with the more capable Cutter Boat—Over the Horizon (CB–OTH). This platform nearly doubles 

the speed of the existing cutter boat, increases secure communication capabilities, and when used in conjunction with AUF capability has a 98 percent success rate in stopping suspicious vessels;

• Providing 14 additional Response Boat-Smalls (RB–S) and associated crews to 

provide vessel escorts, and enforce security zones near critical infrastructure including enhancing liquefied natural gas and waterside security;

79

• Reallocating existing Coast Guard resources to immediately fill an existing gap 

in national maritime Law Enforcement and Counter-Terrorism (LE/CT) capability. The permanent establishment of the Coast Guard’s Enhanced MSST (E–

MSST) will provide an offensive DHS force able to operate across the full spectrum of LE and CT response in support of homeland security and homeland defense objectives, including CT response capability for scheduled security events 

out to 50 nautical miles from shore and augmenting interagency assets in high 

visibility venues such as National Special Security Events (NSSEs).

Question 2. Admiral Collins, what is the Coast Guard’s role in protecting sensitive 

facilities, such as the Bangor Naval Submarine Station in Silverdale, Washington? 

Does the Coast Guard have adequate resources to fully implement this responsibility at all such facilities nationwide? 

Answer. In accordance with Homeland Security Presidential Directive-7 (HSPD–

7)—Critical Infrastructure Identification, Prioritization and Protection, each federal 

department and agency is responsible for the protection of its own physical and 

cyber critical infrastructure and key resources, including sensitive facilities. Primary 

protection responsibility for the Bangor Naval Submarine Station in Silverdale, 

Washington rests with the U.S. Navy (Department of Defense). The Coast Guard 

works with DoD to supplement security in those areas where the Coast Guard is 

better situated to provide the necessary expertise or resources. The Coast Guard’s 

most direct role in supporting security for sensitive DoD assets is to provide armed 

escort for certain high-value Navy and DoD vessels such as submarines, aircraft carriers, and military supply vessels while transiting U.S. ports and waterways, and 

providing waterside security during military outload operations at commercial port 

terminals. Generally, the Coast Guard relies upon its Reserve Forces to bolster security operations in support of military outloads. The Coast Guard has not been called 

upon to implement similar measures at all sensitive DoD facilities, but applies resources as needed to address the greatest risks. 

Resources Needed to Protect LNG Terminals 

Question. Interest in building Liquid Natural Gas (LNG) facilities is increasing 

around the country. The Coast Guard is familiar with the risks to such facilities as 

well as the transportation infrastructure for LNG delivery. How is the Coast Guard 

addressing these risks as LNG development expands? What new resources will the 

Coast Guard need to protect any new LNG terminals? 

Answer. Recognizing the surging interest in LNG importation in the U.S. over the 

past 24 months, the Coast Guard entered into an Interagency Agreement with the 

Federal Energy Regulatory Commission (FERC) in February 2004. The FERC is the 

federal agency that authorizes the construction of shore side LNG terminals. Under 

this agreement, the Coast Guard works with the FERC to ensure that both land 

and marine security issues are addressed in a coordinated and comprehensive manner. In particular, the interagency agreement requires the FERC to address maritime security related issues in the Environmental Impact Statement (EIS) process 

required under the National Environmental Policy Act (NEPA), and disclose this information to the public to the extent permitted by law. 

The FERC is processing 13 applications for new shore side LNG terminals in the 

U.S., and there are an additional 10 potential sites being contemplated. The Coast 

Guard is now in the process of finalizing policy guidance on the scope of waterway 

security assessments that need to be conducted as part of the FERC’s EIS process, 

as well as timelines to be met. This comprehensive guidance will be based in part 

on the consequence distances and risk mitigation measures discussed in the December 2004 Sandia National Labs report, and will provide a nationally uniform risk 

assessment process that yields port specific security recommendations. The Coast 

Guard’s Fiscal Year 2006 budget request resources for additional Response BoatSmalls and screening personnel to provide increased security for LNG facilities in 

Cove Point, MD and Everett, MA. Once the port specific waterway security assessments have been completed for subsequent LNG facilities, precise Coast Guard resource requirements can then be determined based upon the specific security measures that have been recommended. 

DW Budget Adequacy/Asset Mix/Plan Submission Date 

Question. Admiral Collins, the Coast Guard has not provided Congress with a revised Deepwater plan that reflects its needs for capital improvements in the post9/11 environment, despite direction from this Committee and the Appropriations 

Committee to do so. Thus, it is unclear whether the budget request of $966 million 

for Fiscal Year 2006 is adequate, or if the mix of assets covered by this amount are 

appropriate. When can we expect this plan? 

80

Answer. The Deepwater Revised Implementation Plan was delivered to Congress 

on March 25, 2005. Further information requested by Congress is under development and will be submitted shortly. 

Why is the Revised Deepwater Plan Only Five Years Long? 

Question. The Coast Guard presented its original Deepwater plan covering all of 

the 20 years of the program; why is a revised plan covering all of the future years 

of Deepwater not forthcoming, particularly when Congress, in asking for such a plan 

in the Coast Guard Authorization Act of 2004, and in the DHS Appropriations bill 

for Fiscal Year 2005, did not limit its request to the next five year term of the program? 

Answer. Further information covering all years of the program is under development and will be submitted shortly. 

Long-Term Revised Plan for Deepwater 

Question. How can Congress scrutinize the Fiscal Year 2006 budget request and 

understand what it will cover, and whether it is sufficient, if we are not provided 

with the long-term plans for Deepwater? 

Answer. The Deepwater Revised Implementation Plan was delivered to Congress 

on March 25, 2005. Further information requested by Congress is under development and will be submitted shortly. 

Additional Funding for DW on Unfunded Priorities List 

Question. The ‘‘unfunded priorities’’ list that the Coast Guard provided to Congress includes an additional $637 million of money for Deepwater and an additional 

$63 million for legacy assets. Do these amounts bring Deepwater in line with the 

Coast Guard’s post-9/11 plan? 

Answer. The revised Deepwater implementation plan delivered on March 25, 2005 

articulates the Coast Guard’s post-9/11 plan for the Deepwater program. Consistent 

with the revised Deepwater implementation plan, the Coast Guard’s Fiscal Year 

2006 budget requests $966 million for the Integrated Deepwater System to fund the 

Coast Guard’s highest priority Deepwater recapitalization and modernization initiatives:

• Production of the Third National Security Cutter,

• Design and long lead materials for the first Offshore Patrol Cutter,

• Six legacy Medium Endurance Cutter mission effectiveness projects,

• Acquisition of the third Vertical Take Off and Landing Unmanned Aerial Vehicle,

• Design and demonstration of the first Fast Response Cutter,

• Re-engining the operational fleet of 84 HH–65 helicopters to eliminate safety 

and reliability issues and restore operational effectiveness of these critical aircraft,

• Enhanced legacy fixed and rotary wing aircraft capabilities through recapitalization of avionics and radar systems,

• Continued development of the command and control system, common operating 

picture, and integrated logistics system.

As discussed in the transmittal letter that accompanied the Coast Guard’s list of 

‘‘unfunded priorities,’’ to the extent that provisions of the Act requiring the list (Public Law 108–334), including section 514, called for submission of legislative recommendations to the Congress, the executive branch construed such provisions in 

a manner consistent with the President’s constitutional authority to supervise the 

unitary executive branch and to recommend for the consideration of the Congress 

such measures as the President judged as necessary and expedient. However, the 

Commandant of the Coast Guard provided the ‘‘unfunded priorities’’ list to Congress 

as a matter of comity. Coast Guard is available to discuss the contents of the ‘‘unfunded priorities list.’’

GAO Audit Management Concerns—CG Response 

Question. Last year, GAO provided a report that was critical of the Coast Guard’s 

management and oversight of the Deepwater program. How have these concerns 

been addressed? 

Answer. Since its March 2004 report was issued, we have updated GAO regularly 

on the implementation of these improvements through four detailed reports and a 

day-long conference in January 2005. We have taken specific actions to improve program management efforts to measure and evaluate cost, schedule, and performance; 

81

improve communications, and to encourage future cost control through rigorous 

competition. 

In short, the Coast Guard has aggressively implemented the GAO report recommendation. Its 11 recommendations were grouped by three categories: program 

management, contractor accountability, and cost controls through competition. Action has been taken by the Coast Guard on all of these recommendations, GAO has 

closed 2 of the 11 recommendations as completed by the Coast Guard, and we anticipate further closures shortly. 

Response Boat-Medium Contract 

Question. When do you expect the contract for the Response Boat-Medium to be 

awarded? 

Answer. The Coast Guard anticipates awarding the limited rate production contract in the 4th Quarter of Fiscal Year 2005. Should the proposal evaluation require 

discussion with the offerors, contract award may not occur until early Fiscal Year 

2006. 

The OSLTF Balance is Declining 

Question. The Coast Guard testified that the Oil Spill Liability Trust Fund 

(OSTLF) will run out of funding by 2010. Does the Fiscal Year 2006 budget address 

this issue? Describe steps that the Administration is planning to address this projected decline. 

Answer. The Fiscal Year (FY) 2006 Budget does not address this issue. The Coast 

Guard and Maritime Transportation Act of 2004 requires the Coast Guard to submit 

a report on the health of the Oil Spill Liability Trust Fund (OSLTF), which was provided to Congress in April. 

The OSLTF has now assumed full financial responsibility for the T/V Athos I spill 

response in Philadelphia, PA. Due to projected expenses from this and other spills 

exceeding revenues by approximately $250 million per year over the next two years, 

the Coast Guard now anticipates that the OSLTF to be exhausted by the start of 

FY 2008. Additional major oil spills like that involving the ATHOS I will only accelerate exacerbate the rate of decline of the Fund. 

Based on the findings contained in the OSLTF report to Congress discussed 

above, the Coast Guard is working with the Department of Homeland Security and 

the Administration to develop a plan to address the projected decline in OSLTF balances. 

Changing OPA Liability Limits 

Question. Why has the Administration not raised the liability caps for responsible 

parties, as it is required to do under the Oil Pollution Act of 1990? 

Answer. The Coast Guard is currently seeking the authority under the provisions 

in Oil Pollution Act of 1990 (OPA 90) to increase liability limits to reflect significant 

increases to the Consumer Price Index (CPI). The President delegated that authority in section 4 of Executive Order 12777 to various agency heads (Administrator, 

Environmental Protection Agency, Secretary of the Interior, Secretary of Transportation) in respect to various classes of facilities and vessels. Certain authorities 

transferred from the Secretary of Transportation to the Secretary of Homeland Security when the Department of Homeland Security was created and we are currently requesting this authority be delegated further to the Coast Guard. 

In anticipation of the Secretary of Homeland Security further delegating this authority to the Coast Guard, the Coast Guard is proceeding with a rulemaking 

project to make CPI based adjustments for vessels through regulation. The Coast 

Guard anticipates that with notice and comment and required reviews it may take 

more than a year to finalize the required rulemaking. 

Polar Texas Spill in Puget Sound 

Question. According to a March 23, 2005 article in the Seattle Post Intelligencer, 

‘‘the Coast Guard said a ConocoPhillips ship, the POLAR TEXAS, was the likeliest 

culprit in a crude oil spill in Puget Sound.’’ Please provide the context and analysis 

that resulted in this determination by the Coast Guard. Do you feel that under the 

status quo a Puget Sound oil spill is likely in the next decade? What can be done 

to further minimize this risk? 

Answer. The oil analysis conducted by the Coast Guard for the October 2004 

Dalco Passage oil spill is part of an ongoing investigation and is currently not releasable. However, this analysis, performed by the Coast Guard’s Marine Safety 

Laboratory (MSL), indicates that the oil spilled matches with oil from the tank vessel POLAR TEXAS. The MSL, a forensic laboratory for oil pollution, draws upon 

four analytical methods to measure different chemical properties of an oil to match 

spilled oil to source oil. 

82

It is impossible to predict with any degree of certainty the likelihood of an oil spill 

occurring in any particular location. However, prevention measures, especially those 

measures enacted as part of the Oil Pollution Act of 1990 have greatly reduced the 

number and size of marine oil spills in the United States. 

Active continuation of existing prevention measures provides a significant protection against potential future marine oil spills. Such prevention measures, however, 

can not provide complete protection from incidents that may involve terrorism, severe weather, human error, and/or mechanical failure. 

Coast Guard R&D Funding With New DHS Process 

Question. Admiral Collins, the budget proposes no money directly to the Coast 

Guard for research and development, which in the past has funded a variety of important initiatives for both security and non-security missions. Is the Coast Guard 

assured of getting this money within the proposed new Department process? Answer. As presented in the budget, the Coast Guard anticipates receiving $24 

million in Research and Development (R&D) reimbursable funds from the DHS 

Science and Technology directorate (S&T) in FY 2006. The Coast Guard and the Department of Homeland Security’s Directorate of Science and Technology (DHS S&T) 

have established and will continue a productive and collaborative relationship 

wherein S&T ensures that Department-wide R&D priorities are being met and the 

Coast Guard Research and Development program proposes and executes R&D programs that are important for the Coast Guard. Throughout the fiscal year the Coast 

Guard can also compete for additional Departmental R&D funding in accordance 

with DHS S&T prioritization protocols. 

Strait of Juan de Fuca Vulnerabilities to Spills 

Question. Admiral Collins, the outer coast of Washington and the western Strait 

of Juan de Fuca are vulnerable to oil spills from the high volume of marine traffic 

carrying large quantities of oil as cargo and fuel. As you may know, since the late 

1990s a dedicated rescue tug has been established in Neah Bay, WA to be able to 

respond to emergency maritime situations. Please describe the Coast Guard historic 

involvement and use of resources towards this effort. 

Answer. The Coast Guard provided limited support for a dedicated rescue tug in 

Neah Bay in 1999. 

A Coast Guard sponsored regulatory assessment considered a dedicated rescue 

tug alternative alongside 200 other potential risk reducing measures as a part of 

the ‘‘Use of Tugs to Protect Against Oil Spills in the Puget Sound Area’’ assessment 

conducted in 1999. This analysis supported the use of the International, private-sector Tug of Opportunity System (ITOS) as the most cost effective risk reducing measure. This system employs the use of transponders on a fleet of voluntary tugs of opportunity that are monitored by both U.S. Coast Guard and Canadian Vessel Traffic 

Services. This provides trans-boundary decision makers with the awareness essential to direct a tug that is closest to a potential threat. 

The low probability of drift groundings compared to other types of accident limits 

the cost effectiveness of rescue tugs. In fact, a substantial portion of the potential 

pollution averted by the rescue tug is attributable to its use as an escort for laden 

tank vessels. While the use of pre-positioned rescue tugs would reduce the risk of 

drift groundings in specific high traffic areas, the ITOS provides a more cost effective means to prevent pollution throughout the Strait of Juan de Fuca. 

Federal Funding for Tug Boats in WA State 

Question. Admiral Collins, the State of Washington maintains that the Federal 

Government should provide funding for future tug deployments based upon the following premises:

• The Federal Government is a trustee of natural resources in the area including 

the Olympic National Marine Sanctuary, Olympic National Park, and the coastal national wildlife refuges;

• The Federal Government has designated certain species found in the area as 

threatened and endangered. These species and their habitats would be affected 

by major oil spills;

• The Federal Government has a responsibility to protect the treaty rights of 

Puget Sound tribes in their usual and accustomed fishing areas;

• Washington is meeting a regional energy supply need. The north Puget Sound 

marine transportation corridor contains a regional crude oil refining center and 

is a conduit of refined petroleum products to other western states;

• The Strait of Juan de Fuca conveys more tonnage of cargo to and from Pacific 

Rim ports than any other west coast waterway;

83

• Puget Sound is homeport for a large portion of the nation’s strategic naval fleet 

which also poses a risk of major spills; and

• There is potential for international tension with Canada should a major 

transboundary oil spill occur in this waterway.

I would appreciate hearing your response to each of these potential federal obligations and what role you feel the Coast Guard should play in meeting these responsibilities. 

Answer. The Coast Guard recognizes the federal responsibilities outlined above, 

but does not agree that a rescue tug is required to meet those responsibilities. The 

Coast Guard has a vigorous program in place to prevent oil spills in the Strait of 

Juan de Fuca. This program includes:

Northwest Area Contingency Plan.

International Tug of Opportunity System, paid for by industry fees collected 

through Puget Sound Marine Exchange,

• Participating tugs have transponders to make them readily identifiable by 

Vessel Traffic Services Puget Sound radar and the Marine Exchange.

• Allows for quicker identification & dispatch of tugs.

The US-Canadian Joint Coordination Group established a 3-5 year strategic 

plan to formally link our radar and communications networks across the border, 

synchronize training, and jointly embed our operational processes.

• Annual exercise of CANUSPAC Spill Response Plan involves deployment of 

equipment and joint training on behalf of both countries; including annual 

exercise of joint emergency procedures

The Cooperative Vessel Traffic Service (CVTS), established in 1979 by international agreement between U.S. and Canada and

• Partnership between the United States and Canada to manage vessel traffic in the shared waters of the Strait of Juan de Fuca and the connecting 

waterways.

• The CVTS assists in preventing collisions, groundings, and other maritime 

casualties, dividing the region into several zones each managed from one 

of several vessel traffic centers (Tofino, Victoria, and Seattle.)

A Traffic Separation Scheme, adopted by the International Maritime Organization.

A Coast Guard sponsored regulatory assessment considered a dedicated rescue 

tug alternative alongside 200 other potential risk reducing measures as a part of 

the ‘‘Use of Tugs to Protect Against Oil Spills in the Puget Sound Area’’ assessment 

conducted in 1999. This analysis supported the use of the International, private-sector Tug of Opportunity System (ITOS) as the most cost effective risk reducing measure. 

The low probability of drift groundings compared to other types of accident limits 

the cost effectiveness of rescue tugs. In fact, a substantial portion of the potential 

pollution averted by the rescue tug is attributable to its use as an escort for laden 

tank vessels. While the use of pre-positioned rescue tugs would reduce the risk of 

drift groundings in specific high traffic areas, the ITOS provides a more cost effective means to prevent pollution throughout the Straight of Juan de Fuca. 

Moving Coast Guard Headquarters to St. Elizabeth Hospital 

Question. Admiral Collins, why is the Administration requesting $38 million with 

a view to moving the Coast Guard headquarters to the St. Elizabeth Hospital West 

Campus in DC, when no studies have apparently been done on the costs to the 

Coast Guard of such a move, or of alternative locations? Are such studies forthcoming? 

Answer. The Coast Guard submitted its requirements for a Coast Guard Headquarters facility to the General Services Administration (GSA) last year. 

In the GSA Public Buildings Service Federal Buildings Fund for Fiscal Year 2006, 

GSA requested $24.9 million for Coast Guard Consolidation in response to the Coast 

Guard requirements and $13 million to redevelop the St Elizabeth’s West Campus 

Infrastructure. 

GSA is the project lead for the Coast Guard headquarters move and would also 

be the lead for any studies. 

84

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN F. KERRY TO

ADMIRAL THOMAS H. COLLINS

Northern Edge Marine Casualty Investigation 

Question. Five crew members of the Northern Edge fishing vessel died after their 

boat capsized off the coast of Nantucket in December 2004. While the Coast Guard 

personnel acted bravely in their Search and Rescue (SAR) effort, the operation faced 

difficulties including equipment failure. This incident, while hopefully isolated, highlighted concerns that I and others have expressed over funding for Coast Guard 

SAR operations and its aging infrastructure. On January 26, I sent you a letter outlining these concerns. I have your responses, however several questions still remain. 

In my letter I asked the Coast Guard to investigate the incident. Your letter 

states that you have investigated the cause of the mechanical failures and that the 

Coast Guard will conduct a Marine Casualty Investigation, which is not a formal 

internal investigation. 

Will the informal Marine Casualty Investigation be released to the public after 

it is completed? 

Answer. Yes, the Marine Casualty Investigation will be available to the public as 

soon as it is completed. 

Formal Investigation of Northern Edge SAR Case 

Question. Will the Coast Guard conduct a formal investigation into the Northern 

Edge incident in addition to the Marine Casualty Investigation? If not, why? 

Answer. The Coast Guard is using the informal rather than the formal investigation process in this case. By using a single officer, the investigation will proceed 

more efficiently, and enable the Coast Guard to share findings with the public more 

quickly. Given the findings from the preliminary investigation, the existence of only 

one survivor, and the inability to complete an extensive post-casualty vessel examination, we believe that in this case, a formal investigation would not reveal any 

more information than would a comprehensive informal investigation. 

Coast Guard Overall Preparedness 

Question. You recently presented Congress with a list of the Coast Guard’s unfunded priorities totaling nearly $1 billion. If the Congress does not provide the 

needed funding, what will you do to maintain overall preparedness, including in 

SAR? 

Answer. The Coast Guard continues to maintain high overall preparedness as evidenced by consistently strong performance in all mission areas. The Coast Guard 

met its 2004 performance targets for Search and Rescue, Migrant Interdiction, Aidsto-Navigation, and Marine Environmental Protection. Specifically, in Fiscal Year 

2004 the Coast Guard:

• Rescued 86.8 percent of all mariners in imminent danger, exceeding the performance goal of 85 percent.

• Prevented illegal entry into the U.S. of 10,899 illegal migrants—the highest 

level in 10 years—meeting the performance target to interdict or deter at least 

87 percent of illegal migrants entering the U.S. through maritime means.

• Continued to safely and efficiently manage America’s waterways, meeting Aids 

to Navigation mission performance targets, reducing the number of distinct collisions (down to 218 from 280), allisions (down to 616 from 738), and grounding 

events (down 709 from 802) by 15 percent from 1,820 in Fiscal Year 2003 to 

1,543 in Fiscal Year 2004.

• Protected the marine environment by reducing the five-year average of oil and 

chemical spills greater than 100 gallons per 100 million tons shipped to 22.1 

from 29.4 in Fiscal Year 2003 and well below the Marine Environmental Protection mission performance target of 41.

• Continued to focus on improving maritime safety, reducing the number of maritime worker and passenger injuries and deaths from 597 in 2003 to 582 in 2004, 

well below the program sub-target of 771. (Full calculation of program performance includes recreational boating fatalities which depend on state data which 

will not be available until later this Spring).

• Broke previous counter drug seizure records, seizing 241,713 pounds (previous 

record was 138,393 pounds) of cocaine and removing over 350,000 pounds of cocaine from the marketplace. (Full calculation of the Coast Guard’s counter drug 

performance (Removal Rate) depends on flow rate data which will be provided 

by the Interagency Assessment of Cocaine Movement later this Spring).

85

The President’s Fiscal Year 2006 budget requests an increase of $570 million over 

Fiscal Year 2005 funding levels, demonstrating extremely strong commitment by the 

Administration to ensure the Coast Guard is adequately funded and prepared to 

meet its mission demands and improve operational performance. 

In addition to sustaining current levels of operational funding, the Coast Guard’s 

Fiscal Year 2006 budget funds several recapitalizing initiatives (e.g. Deepwater, 

Rescue 21, Response Boat-Medium, High Frequency Communications Recapitalization), critical to restoring readiness to Coast Guard operational assets and subsystems—the very foundation of Coast Guard operational capability and capacity. 

The Fiscal Year 2006 budget continues aggressive implementation of Maritime Security Strategy to increase Maritime Domain Awareness, operational presence, and 

response posture with the ultimate goal of reducing maritime risk. Fiscal year 2006 

initiatives include implementing the Common Operational Picture, continuing the 

nationwide deployment of the Automatic Identification System, increasing maritime 

patrol aircraft flight hours, enhancing radiological and nuclear detection capabilities, equipping organic helicopters with Airborne Use of Force capability, replacing 

obsolete cutter small boats with more capable Cutter Boats—Over the Horizon, and 

providing additional Response Boat-Small allowances. 

The Coast Guard’s Fiscal Year 2006 budget also provides operation and maintenance funding for the new Great Lakes Icebreaker, scheduled to be commissioned 

in 2006. This cutter will replace the less capable Coast Guard Cutters ACACIA and 

MACKINAW resulting in improved Aids-to-Navigation and Ice Operations performance on the Great Lakes. 

The funding provided in the Coast Guard’s Fiscal Year 2006 budget funds the 

Coast Guard’s highest priority initiatives and represents the resources necessary to 

meet Fiscal Year 2006 performance goals. 

SAR Aircraft in Ready Status for Northern Edge SAR Case 

Question. In my January 26 letter, I also expressed concern that Coast Guard protocol in District 1 requires only one rescue helicopter to be in Bravo (ready) status. 

Your letter provides the readiness rate for the H–60 helicopters based in Cape Cod 

but does not respond to this specific concern that a single helicopter in Bravo state 

is inadequate to respond to fishing, commerce, recreation, and security needs. Will 

the Coast Guard increase the number of aircraft required to be in ready status for 

SAR in District 1? If not, explain the Coast Guard readiness strategy. 

Answer. The Coast Guard maintains one Bravo–0 (B–0) HH–60J and one B–0 

HU–25A at Air Station Cape Cod. Additionally, the southern portion of the First 

District is also supported by a B–0 HH–65A maintained at Air Station Atlantic City. 

These aircraft are on search and rescue (SAR) standby. This response posture has 

been steady for several decades, and was not altered after September 2001. 

The SAR case load and SAR resource hours for Air Station Cape Cod (Both HH–

60 and HU–25 aircraft) are listed in the table below. The figures reflect a relatively 

consistent workload in the SAR program for the Air Station over the past four 

years.

FY01 FY02 FY03 FY04

# SAR Cases 248 318 262 271

SAR Resource Hours 688 808 768 770

As outlined in the Coast Guard’s March 11, 2005 letter, the problems with the 

aircraft response to the fishing vessel NORTHERN EDGE incident were mechanical 

in nature. They were not related to the availability of aircraft or B–0 response 

crews. All four HH–60J’s at Air Station Cape Cod were available, and the helicopter 

ready crew responded through the four of them. 

The SAR readiness requirements for the First District are met with the existing 

number of B–0 aircraft. Barring extensive mechanical failures, this posture has been 

sufficient to provide a search and rescue response even in the most severe weather 

and sea conditions encountered in the North Atlantic. 

Search and Rescue and Traditional Mission Preparedness 

Question. In your response to my inquiry, you point out that the Coast Guard met 

its SAR program goals as they relate to the 2004 Government Accountability Office 

report. However, that same report found that resources allocated to traditional missions such as foreign fishing enforcement and SAR are still down considerably from 

pre-9/11 levels. Please outline for the Committee the Coast Guard’s preparedness for 

SAR and other traditional missions. Explain any shortcomings in the Coast Guard’s 

preparedness related to funding or any other issue. 

86

Answer. While the Coast Guard recognizes the difference between the baseline resource hours and the actual Search and Rescue (SAR) activity level, we emphasize 

that performance is our primary concern, and in Fiscal Year 2004, the Coast Guard 

rescued 86.8 percent of all mariners in imminent danger, exceeding our performance 

goal of 85 percent. SAR will continue to receive all of the resource hours required 

to meet mission demand and there has been no reduction in the SAR readiness posture at any Coast Guard units. 

Baseline resource hours for all cutters, aircraft and boats represent estimated 

mission employment based on historical information. SAR by its very nature is an 

‘‘on demand’’ mission. Due to the complexity of maritime distress cases and their 

varied resource requirements, it is difficult to precisely predict SAR activity levels 

beyond our baseline estimates. 

While mission performance remains our primary concern, the decrease in SAR 

hours can be attributed to a myriad of factors. Some of these factors include: improvements in technology for system reporting and vessel identification, success 

from recreational boating safety efforts, and a rise in commercial towing and salvage 

enterprises. 

In broader terms, the Coast Guard continues to strive toward meeting performance targets across the entire spectrum of Coast Guard missions. In Fiscal Year 

2004 the Coast Guard met or exceeded Fiscal Year 2001 performance levels in five 

of its six non-homeland security missions (as defined in Section 888 of the Homeland Security Act of 2002) and met 2004 performance targets for several of these 

non-homeland security missions (e.g. Search and Rescue, Migrant Interdiction, Aidsto-Navigation, and Marine Environmental Protection) while continuing to successfully prosecute homeland security missions. Specifically, in Fiscal Year 2004 the 

Coast Guard:

• Rescued 86.8 percent of all mariners in imminent danger, exceeding the performance goal of 85 percent.

• Continued to safely and efficiently manage America’s waterways, meeting Aids 

to Navigation mission performance targets, reducing the number of distinct collisions (down to 218 from 280), allisions (down to 616 from 738), and grounding 

events (down 709 from 802) by 15 percent from 1,820 in Fiscal Year 2003 to 

1,543 in Fiscal Year 2004.

• Protected the marine environment by reducing the five-year average of oil and 

chemical spills greater than 100 gallons per 100 million tons shipped to 22.1 

from 29.4 in Fiscal Year 2003 and well below the Marine Environmental Protection mission performance target of 41.

• Continued to focus on improving maritime safety, reducing the number of maritime worker and passenger injuries and deaths from 597 in 2003 to 582 in 2004, 

well below the program sub-target of 771. (Full calculation of program performance includes recreational boating fatalities which depend on state data which 

will not be available until later this Spring).

• Broke previous counter drug seizure records, seizing 241,713 pounds (previous 

record was 138,393 pounds) of cocaine and removing over 350,000 pounds of cocaine from the marketplace. (Full calculation of the Coast Guard’s counter drug 

performance (Removal Rate) depends on flow rate data which will be provided 

by the Interagency Assessment of Cocaine Movement later this Spring).

• Prevented illegal entry into the U.S. of 10,899 illegal migrants—the highest 

level in 10 years—meeting the performance target to interdict or deter at least 

87 percent of illegal migrants entering the U.S. through maritime means.

• Although the Coast Guard did not meet target levels for its Ice Operations and 

Living Marine Resources missions, performance remained high. Efforts in connection with the Ice Operations mission-program resulted in four days of waterways closures while the target was two days or less. The Living Marine Resources mission achieved a compliance rate of 96.3 percent vice a goal of 97 percent—although the total number of fisheries boardings soared to 4,560, the 

highest total since Fiscal Year 2001.

The Coast Guard will continue seeking the appropriate balance among all its mission-programs while relentlessly pursuing stated performance goals. In so doing, the 

Coast Guard will continue to focus not only on activity levels (hours), but most importantly on achieving the desired outcomes from those levels. The ability to achieve 

desired outcomes and performance goals has been significantly enhanced through 

improved technology, tactics and procedures. Risk-based decision-making by local 

commanders will continue to be the primary driving factor behind the specific activity levels (hours) accrued in the course of Coast Guard operations. 

87

Increased Costs of Deepwater Program 

Question. The Coast Guard operates an aging fleet of cutters and helicopters, and 

the costs of the Deepwater program have been higher than anticipated. Why are the 

costs higher than predicted? 

Answer. The original Deepwater Integrated Coast Guard System (ICGS) implementation plan was developed around a set of assumptions about the service life 

and materiel condition of the Coast Guard’s legacy assets. This plan includes investment in legacy sustainment during the recapitalization effort to maintain capability 

until the assets could be recapitalized. It has become very apparent that our legacy 

fleet was in even worse shape than we understood. Compounding this, increased operating tempo required to meet homeland security mission demands has resulted in 

accelerated degradation of the Coast Guard’s legacy assets. 

Revised DW Implementation Plan 

Question. When will the Coast Guard issue a revised plan of the Deepwater program’s projected mix of assets and their costs? 

Answer. The Deepwater Revised Implementation Plan was delivered to Congress 

on March 25, 2005. Further information requested by Congress is under development and will be submitted shortly. 

Coast Guard Loran 

Question. What is the Administration’s or the Coast Guard’s official policy regarding the Loran system? When will the Loran-C modernization process be accomplished? 

Answer. Consistent with the 2001 Federal Radionavigation Plan and an April 

2003 Memorandum of Agreement between the Coast Guard, the Federal Aviation 

Administration and Department of Transportation, the Coast Guard will plan to disestablish the Loran system by the end of Fiscal Year 2008, with appropriate public 

notice, if a national policy is not established that requires Loran-C as a multi-modal 

backup to the Global Positioning System (GPS). 

As part of the Loran-C modernization, the FAA transfers funds (which were not 

requested by the Coast Guard) from its budget to the Coast Guard. At the current 

rate of transfer, the modernization of the 20 continental U.S. Loran facilities will 

be completed by August 2005. If funds continue to be transferred from the FAA, the 

Alaskan Loran facility modernization would extend beyond 2008. Those facilities 

would be modernized at the rate of one a year, starting with LORSTA Kodiak this 

year and finishing with LORSTA Port Clarence in 2010. 

Question. The Coast Guard is one of several federal agencies that have jurisdiction over port security. Port Authorities, shippers, ocean carriers, and other maritime interests are looking to the government for a contingency plan in the event of 

a terrorist incident at a U.S. port. What is the status of the contingency planning? 

Answer. The Coast Guard has developed the National Response Options Matrix 

(NROM) for use by Coast Guard senior leadership following a Transportation Security Incident (TSI) or when credible intelligence information indicates that a TSI is 

imminent. The emphasis of the NROM is to provide pre-planned and pre-agreed 

upon options to focus the maritime industry’s Maritime Security level posture and 

the Coast Guard’s Ports, Waterways and Coastal Security activities in the nation’s 

non-affected ports to help prevent further attacks and to protect the remaining U. 

S. Marine Transportation System, maritime critical infrastructures and key assets, 

and population centers. Recognizing the utility of making NROM an inter-agency 

tool; Customs and Boarder Patrol has joined the Coast Guard in development of a 

DHS inter-agency NROM to include initial short-term response and recovery options, protocols and priorities for re-opening ports, while facilitating the continued 

flow of legitimate maritime commerce and use of the marine environment. 

In addition, the President has signed a maritime security policy directive outlining his vision for a fully coordinated U.S. Government effort to protect U.S. interests in the maritime domain. This document, the Maritime Security Policy National 

Security/Homeland Security Presidential Directive (NSPD/HSPD), reiterates the 

President’s commitment to maritime security and aims to integrate and align all 

U.S. Government maritime security programs and initiatives into a comprehensive 

and cohesive national effort involving appropriate Federal, State, local and private 

sector entities. One of several specific actions, the NSPD/HSPD directs the development, in consultation with key industry stakeholders, of recommended minimum 

Federal standards for maritime recovery operations, and a comprehensive national 

maritime infrastructure recovery standards and a plan, complementary to the national preparedness goals and standards required by HSPD–8. 

88

Criteria Used to Re-Open Ports After an Attack 

Question. What criteria will be used to re-open a port after a terrorist incident? 

Answer. Due to the wide range of threats, conveyances, cargo and infrastructure 

in the Maritime Transportation System, a list of specific criteria universally applicable to any incident can not be established. Instead, the Coast Guard, in close cooperation with other government agencies and the private sector, has developed decision making processes that guide decision makers through the factors applicable 

to each incident. 

The Coast Guard has developed the National Response Options Matrix (NROM) 

for use by Coast Guard senior leadership following a Transportation Security Incident (TSI) or when credible intelligence information indicates that a TSI is imminent. The emphasis of the NROM is to provide pre-planned and pre-agreed upon 

options to focus the maritime industry’s Maritime Security level posture and the 

Coast Guard’s Ports, Waterways and Coastal Security activities in the nation’s nonaffected ports to help prevent further attacks and to protect the remaining U.S. Marine Transportation System, maritime critical infrastructures and key assets, and 

population centers. Recognizing the utility of making NROM an inter-agency tool, 

Customs and Border Protection has joined the Coast Guard in development of a 

DHS inter-agency NROM to include initial short-term response and recovery options, protocols and priorities for re-opening ports, while facilitating the continued 

flow of legitimate maritime commerce and use of the marine environment. 

The National Maritime Security Plan (NMSP) will function as the capstone of the 

three-tiered system of domestic maritime security plans required by MTSA: The National Maritime Security Plan; Area Maritime Security Plans prepared by Federal 

Maritime Security Coordinators; and Vessel and Facility Security Plans prepared by 

owners and operators. The NMSP will establish processes for: setting incident specific national priorities, restoration of cargo flow and recovery of maritime infrastructure. 

Area Maritime Security Plans outline priorities and procedures for re-opening the 

port at the local port level. Generally the Captain of the Port/Federal Maritime Security Coordinator (FMSC) will work with Area Maritime Security Committee 

(AMSC) members and other appropriate stakeholders to develop an incident specific 

strategy for re-opening the port. The AMSC advises the FMSC on potential priorities or conflicts with respect to re-opening strategies. The FMSC retains final decision making authority with respect to re-opening all or a section of the port. 

Who’s in Charge After an Attack? 

Question. Who will be in charge at our major ports in the event of a terrorist attack? 

Answer. The National Response Plan (NRP) and its directed implementation of 

the National Incident Management System (NIMS) serves as standing guidance for 

the coordination and execution of interagency responses at the federal, state, and 

local level. The Coast Guard is the lead federal agency for maritime security. The 

Coast Guard will work closely with the Transportation Security Administration 

(TSA), as other modes of transport are also involved in the routine operations of 

ports, including pipelines, trucking, and rail. The Coast Guard Captain of the Port 

(COTP), who is also designated as the Federal Maritime Security Coordinator 

(FMSC) for their zone of responsibility, is in charge of ensuring the safety and security of port operations, and for coordinating protective, mitigation, and recovery activities within the port following a terrorist incident. To successfully carry out this 

mission, the COTP/FMSC works in a unified command setting with other federal, 

state, and local agencies with authority, responsibility and jurisdiction to respond 

to the event. These officials, under the leadership of the COTP/FMSC, execute preplanned strategies developed in the Area Maritime Security Plans or develop and 

execute incident specific strategies and action plans in response to the incident. The 

COTP/FMSC also oversees the maritime industry response actions outlined in vessel 

and facility security plans to protect individual vessels and facilities within the port. 

Since the Federal Bureau of Investigation (FBI) is the lead agency with respect to 

investigating and responding to the actual terrorist event, port level protection and 

mitigation actions are also coordinated with the FBI’s response and investigation activities. These protocols and actions are also coordinated with the Special Agent in 

Charge of the local ICE Office of Investigations, as ICE is the largest investigative 

body of the Department of Homeland Security, and our partner in the war on terrorism. 

Expectations on Industry and Foreign Governments 

Question. What, in general, will be expected from the commercial maritime industry and from foreign governments in the event of a terrorist attack at a major port? 

89

Answer. The United States commercial maritime industry facility and vessel owners and operators will be expected to implement the transportation security incident 

response measures as indicated in their Coast Guard approved security plans as 

mandated by the Maritime Transportation Security Act (MTSA) of 2002. Maritime 

industry security plan holders are also expected to respond to changes in the Maritime Security (MARSEC) level by implementing measures outlined in their plans. 

Additionally, members of industry would be called upon to assist senior Coast 

Guard decision makers at the national level with strategies and priorities to restore 

cargo flow. Foreign governments that are party to the International Maritime Organization would be expected to implement measures outlined in their maritime security plans under the International Ship and Port Facility Security (ISPS) Code to 

help secure global commerce systems. Foreign governments might also be called 

upon to assist in restoring cargo flow, such as implementing screening or inspection 

procedures deemed necessary to mitigate the identified threat vectors for cargo 

bound for the United States. Foreign flagged and owned entities in U.S. territorial 

waters must also abide by the declared MARSEC conditions. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. FRANK R. LAUTENBERG TO

ADMIRAL THOMAS H. COLLINS

The OSLTF Balance is Declining 

Question. The Oil Spill Liability Trust Fund is running out of money. Under current projections, when will it be bankrupt? Will the Administration ask Congress 

for general appropriations to pay for oil spill cleanup costs if the trust fund is depleted? 

Answer. The balance of the Oil Spill Liability Trust Fund (OSLTF) at the end of 

Fiscal Year (FY) 2004 was approximately $842 million. Due to projected expenses 

exceeding revenues by approximately $250 million per year over the next two years, 

the Coast Guard expects the OSLTF to be exhausted by the start of FY 2008. This 

projection takes into account that the OSLTF assumed full financial responsibility 

for the T/V Athos I spill response in Philadelphia, PA. Additional major oil spills 

like the ATHOS I will only accelerate the rate of decline of the OSLTF. 

The Coast Guard and Maritime Transportation Act of 2004 requires the Coast 

Guard to prepare a report on the health of the OSLTF. That report was submitted 

to the Congress on May 12, 2005. 

Based on the findings contained in the OSLTF report to Congress discussed 

above, the Coast Guard is working with the Department of Homeland Security and 

the Administration to develop a plan to address the projected decline in OSLTF balances. 

Inspector General Findings: Port Security Grant Program 

Question. The Inspector General found major problems with the port security 

grant program, mainly that funds are not being distributed on the basis of security 

risk. Please describe the Coast Guard’s role in deciding which projects should get 

funded at which ports? 

Answer. Within the risk management framework of the National Infrastructure 

Protection Plan (NIPP), the Coast Guard is an active partner in the Port Security 

Grant program conducting field level reviews of applications to make risk-based recommendations to the multi-agency national review board. The Coast Guard also 

sends two representatives to the National Review Board which makes final recommendations to the Executive Review Board. The Office of State and Local Government Coordination and Preparedness (SLGCP), as the Port Security Grant program administrator, is working with the Coast Guard, Transportation Security Administration, Customs and Border Protection, Information Analysis and Infrastructure Protection, and the Maritime Administration to reevaluate aspects of the program to ensure that funds are allocated to the highest port security priorities based 

on risk factors, ensuring the majority of grants are directed to the Nation’s highest 

risk ports. Other objectives include: identifying specific risk-based factors to guide 

funding distribution and identifying a limited set of high-risk ports based on the 

Coast Guard’s listing of militarily and economically strategic ports and other port 

criticality and threat data. 

In support of the proposed Targeted Infrastructure Protection Program (TIPP), 

the process will be further refined in Fiscal Year 2006 to create a port-wide risk 

management plan by combining elements of existing security models used by 

SLGCP and the Coast Guard. Future plans involve requiring recipients of funding 

to participate in a port-wide security planning process through each Area Maritime 

Security Committee (AMSC’s are chaired by Coast Guard Captains of the Port). As 

90

part of this approach, emphasis will be placed on port-wide security enhancements 

based on risk reduction. To achieve this strategy, each AMSC will be required to 

develop a port-wide risk management plan based on previously completed Coast 

Guard and AMSC risk assessments and security plans as well as risk methodologies 

used by SLGCP. The AMSC will inform the office of Information Analysis and Infrastructure Protection on the results of this port-wide risk management plan. 

Balance Between Homeland Security and Non-Homeland Security Missions 

Question. It’s been well-documented that since 9/11, the Coast Guard’s security effort has increased massively, at the expense of resource hours for traditional missions. Do you have specific plans to restore some balance to the homeland security 

and non-homeland security missions of the Coast Guard? 

Answer. The Coast Guard continues to achieve consistently strong performance in 

all mission areas. The Coast Guard met its 2004 performance targets for several 

non-homeland security missions (e.g. Search and Rescue, Migrant Interdiction, Aidsto-Navigation, and Marine Environmental Protection) while continuing to achieve 

high performance in several homeland security missions. Specifically, in Fiscal Year 

2004 the Coast Guard:

• Rescued 86.8 percent of all mariners in imminent danger, exceeding the performance goal of 85 percent.

• Prevented illegal entry into the U.S. of 10,899 illegal migrants—the highest 

level in 10 years—meeting the performance target to interdict or deter at least 

87 percent of illegal migrants entering the U.S. through maritime means.

• Continued to safely and efficiently manage America’s waterways, meeting Aids 

to Navigation mission performance targets, reducing the number of distinct collisions (down to 218 from 280), allisions (down to 616 from 738), and grounding 

events (down 709 from 802) by 15 percent from 1,820 in Fiscal Year 2003 to 

1,543 in Fiscal Year 2004.

• Protected the marine environment by reducing the five-year average of oil and 

chemical spills greater than 100 gallons per 100 million tons shipped to 22.1 

from 29.4 in Fiscal Year 2003 and well below the Marine Environmental Protection mission performance target of 41.

• Continued to focus on improving maritime safety, reducing the number of maritime worker and passenger injuries and deaths from 597 in 2003 to 582 in 2004, 

well below the program sub-target of 771. (Full calculation of program performance includes recreational boating fatalities which depend on state data which 

will not be available until later this spring).

• Broke previous counter drug seizure records, seizing 241,713 pounds (previous 

record was 138,393 pounds) of cocaine and removing over 350,000 pounds of cocaine from the marketplace. (Full calculation of the Coast Guard’s counter drug 

performance (Removal Rate) depends on flow rate data which will be provided 

by the Interagency Assessment of Cocaine Movement later this Spring).

The President’s Fiscal Year 2006 budget requests an increase of $570 million over 

Fiscal Year 2005 funding levels, demonstrating extremely strong commitment by the 

Administration to ensure the Coast Guard is adequately funded and prepared to 

meet its mission demands and improve operational performance. 

In addition to sustaining current levels of operational funding, the Coast Guard’s 

Fiscal Year 2006 budget funds several recapitalizing initiatives (e.g. Deepwater, 

Rescue 21, Response Boat-Medium, High Frequency Communications Recapitalization), critical to restoring readiness to Coast Guard operational assets and subsystems—the very foundation of Coast Guard operational capability and capacity. 

The Fiscal Year 2006 budget continues aggressive implementation of Maritime Security Strategy to increase Maritime Domain Awareness, operational presence, and 

response posture with the ultimate goal of reducing maritime risk. Fiscal year 2006 

initiatives include implementing the Common Operational Picture, continuing the 

nationwide deployment of the Automatic Identification System, increasing maritime 

patrol aircraft flight hours, enhancing radiological and nuclear detection capabilities, equipping organic helicopters with Airborne Use of Force capability, replacing 

obsolete cutter small boats with more capable Cutter Boats—Over the Horizon, and 

providing additional Response Boat-Small allowances. 

The Coast Guard’s Fiscal Year 2006 budget also provides operation and maintenance funding for the new Great Lakes Icebreaker, scheduled to be commissioned 

in 2006. This cutter will replace the less capable Coast Guard Cutters ACACIA and 

MACKINAW resulting in improved Aids-to-Navigation and Ice Operations performance on the Great Lakes. 

91

Additional Funding Needed to Conduct MTSA Assessments 

Question. How much of the additional funding for the homeland security mission 

in the President’s request will be needed to conduct the vulnerability assessments 

required by the Maritime Transportation Security Act? When will these assessments 

be completed? 

Answer. There is no additional Coast Guard funding requested in the 2006 Budget for vulnerability or port security assessments. The Coast Guard has completed 

port security assessments at the 55 U.S. ports previously identified as militarily and 

economically strategic. While efforts are underway to augment these assessments 

with specialized needs such as assessments of specific infrastructure as well as analyses of specific vulnerabilities, no additional funding beyond that currently available 

is being requested at this time. 

Intelligence Operations 

Question. It is frequently overlooked that the Coast Guard and Customs Service 

have intelligence operations. They have had some operational experience working 

together on the war on drugs. Are there plans to integrate these two intelligence 

operations? Was their cooperation in counter-drug operations generally successful? 

Answer. The Department of Homeland Security (DHS) is currently examining all 

of its intelligence activities to ensure alignment and also assess whether certain intelligence support and other functions should be integrated. However, there are no 

current plans to integrate the operations of the Coast Guard Intelligence Program 

(CGIP), which is a designated member of the Intelligence Community, with the intelligence activity that is part of U.S. Customs and Border Protection (CBP). The 

CGIP does however, work closely with CBP intelligence and U.S. Immigration and 

Customs Enforcement (ICE) intelligence program. 

Wherever law enforcement intelligence requirements are similar and where ICE 

and other-agency analysts are located, the CGIP works collaboratively with the 

other federal agencies involved. The CGIP has military requirements that go beyond 

law enforcement because the Coast Guard is not only a law enforcement agency, but 

one of the five branches of the Armed Forces. Additionally, The Coast Guard operates in many places—in domestic ports and coastal waters, offshore regions, and 

even in foreign ports—where other U.S. Government agencies, including CBP and 

ICE, typically are not present. This access affords Coast Guard personnel the opportunity to collect intelligence that supports not only Coast Guard missions, but other 

important national security objectives as well. Coast Guard collectors and analysts 

also have significant expertise in the maritime regions and functions that is acquired through performing Coast Guard missions. Finally, Coast Guard intelligence 

specialists are best able to understand, prioritize and support the myriad of Coast 

Guard operational commanders’ intelligence requirements. 

While full integration of the Coast Guard and CBP intelligence operations is not 

desirable, the Coast Guard routinely coordinates intelligence efforts with DHS and 

DHS components, including CBP and ICE, as well as with the other Intelligence 

Community members. These coordination efforts are designed to develop new 

sources, improve analytical processes, and provide actionable (timely and accurate) 

intelligence to operational and tactical units. 

Coast Guard staff can provide Congress with specific examples of counterdrug intelligence efforts in an appropriate setting, since that information is classified. 

CG Analysis of Maintenance Costs by Accelerating DW Program 

Question. Has the Coast Guard performed an analysis on how much in maintenance costs could be saved by accelerating the Deepwater program? 

Answer. The Coast Guard has conducted some informal assessments as to the potential cost savings and cost avoidance if the Deepwater assets were provided sooner. To date, our assessments have identified the following potential savings:

• Contract Performance Management: If Deepwater were to be completed sooner, 

total project cost of system integrator and government contract management 

personnel could be reduced. Additionally, a shorter contract term will lessen the 

number of performance award fee determinations paid out contributing to further future years savings. These award fees typically average approximately 

$5M.

• Legacy Cutter Maintenance Costs: Legacy cutters could be retired much sooner. 

Due to increasing age and continued high op tempo, legacy cutter maintenance 

costs have been increasing at an increasing rate, much faster than estimated 

in our Deepwater pre-9/11 baseline planning. The early retirement of these assets will stop these increasing costs sooner. It will also reverse the disturbing 

92

trend of increasing lost days due to unscheduled maintenance to repair casualties.

However, as GAO has recently testified, acceleration of a program as complex as 

Deepwater carries with it significant inherent risks of concurrent cost acceleration 

and schedule disruptions. In total, the Administration believes the best approach for 

the Deepwater program is to implement the Revised Deepwater Plan, as proposed 

in the FY 2006 budget. 

Increasing Funding for Port Security 

Question. There is a great need for increasing funding for port security. In the 

ports of New Jersey and New York, three million containers are moved annually, 

and the Coast Guard estimates we need more than seven billion dollars to improve 

port security. Given the President’s budget cuts and fiscal restraints, how are we 

going to effectively protect our ports? 

Answer. Protecting our ports requires a continued emphasis on executing a broad 

range of strategies to implement a system of layered defenses. Port security cannot 

start and end within the confines of any particular port. A goal line defense is no 

defense at all and thus public and private investments must be balanced across all 

appropriate layers and prioritized on the basis of risk. Port security plans and strategies also acknowledge that protecting the foundations of American’s free society requires the recognition that risk cannot be totally eliminated. A transportation system as vital and thriving as the marine transportation system cannot become hermetically sealed. As a result the Coast Guard, as the lead DHS agency for maritime 

security, will continue refining its understanding of maritime and port risks and 

champion the flow of private resources (e.g., grants) and public capabilities (Coast 

Guard Cutters, aircraft, boarding teams, etc) toward the highest risks; recognizing 

also that resources will always be finite. 

The Department of Homeland Security (DHS) has awarded over $560 million in 

grants for port security, funding more than 1,100 security enhancement projects in 

some of the Nation’s most critical port facilities. These funds have been used for 

projects like lighting, fencing and surveillance systems to name a few. In Fiscal 

Year 2005 an additional $150 million will be targeted by DHS to enhance the security of the nation’s ports. For Fiscal Year 2006, port security will continue to be addressed as part of the $600 million requested by the President as part of the Targeted Infrastructure Protection program. As the program owner, the Department’s 

Office of State and Local Government Coordination and Preparedness (SLGCP), in 

coordination with the Coast Guard and the Information Analysis and Infrastructure 

Protection Directorate (IAIP) will continue to ensure that port security priorities are 

set, needs identified and resources brought to bear to effectively secure our ports. 

The 2006 budget also continues to improve the Coast Guard’s maritime homeland 

security capabilities and reduce maritime risk. Specifically, it provides for critical 

Maritime Domain Awareness (MDA) initiatives and increased or enhanced Coast 

Guard operational presence, both critical components of the Coast Guard’s maritime 

security strategy and posture. 

The 2006 budget furthers efforts to improve MDA by:

• Continuing deployment of a nationwide Nationwide Automatic Identification 

System (AIS) infrastructure throughout regional Coast Guard command centers;

• Providing additional Maritime Patrol Aircraft (MPA) resources to fill documented flight hour gaps in support of detection, surveillance, and tracking activities;

• Deploying a Common Operational Picture (COP) through Coast Guard command centers nationwide. The COP will help fuse surveillance and tracking information from systems such as AIS, Rescue 21, and the Ports and Waterways 

Safety System (PAWSS);

• Increasing the capability of Coast Guard cutters and Maritime Safety and Security Teams (MSSTs) to detect Rad/Nuc materials, intercept suspect ships, and 

respond to incidents involving the release of Rad/Nuc substances.

In addition, the 2006 budget further increases and enhances the Coast Guard’s 

operational presence by:

• Accelerating deployment of organic Airborne Use of Force (AUF) capability to 

five Coast Guard Air Stations, increasing the ability to respond to maritime security threats;

• Replacing existing obsolete and unstable cutter boats on the High Endurance 

Cutter (WHEC) and Medium Endurance Cutter (WMEC) fleet with the more capable Cutter Boat—Over the Horizon (CB–OTH). This platform nearly doubles 

93

the speed of the existing cutter boat, increases secure communication capabilities, and when used in conjunction with AUF capability has a 98 percent success rate in stopping suspicious vessels;

• Providing 14 additional Response Boat-Smalls (RB-S) and associated crews to 

provide vessel escorts, and enforce security zones near critical infrastructure including enhancing liquefied natural gas and waterside security;

• Reallocating existing Coast Guard resources to immediately fill an existing gap 

in national maritime Law Enforcement and Counter-Terrorism (LE/CT) capability. The permanent establishment of the Coast Guard’s Enhanced MSST (E–

MSST) will provide an offensive DHS force able to operate across the full spectrum of LE and CT response in support of homeland security and homeland defense objectives, including CT response capability for scheduled security events 

out to 50 nautical miles from shore and augmenting interagency assets in high 

visibility venues such as National Special Security Events (NSSEs). 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

MARGARET T. WRIGHTSON

Question 1. What troubles me about the current time frame for the Deepwater 

program is by the time we have finished the program twenty something years down 

the road we will most likely have to immediately embark on another wholesale replacement of Coast Guard assets. What has the Coast Guard done to project how 

long the Deepwater assets will continue to be useful before another acquisition program is required? 

Answer. We have not reviewed the Coast Guard’s strategy for determining how 

long the replacement Deepwater assets will last before they themselves would need 

to be replaced. However, information about the expected useful life of any asset that 

the government may wish to purchase is a critical piece of information for effective 

and efficient acquisition management, so this is a reasonable question for the Coast 

Guard to answer. 

Question 2. In your opinion, would the Coast Guard be able to manage Deepwater 

if it was accelerated? If not, what does the Coast Guard have to do in order to successfully manage it? 

Answer. My answer here is not a simple one. Although the Coast Guard is making 

progress on our recommendations, the recommendations have yet to be fully addressed. Moreover, over the past year we have seen schedule slippages, growing unobligated balances, and at least one instance of performance problems. The Coast 

Guard has just started using the Integrated Master Schedule that we recommended 

last year so it remains to be seen whether this will translate into better Coast 

Guard visibility into the program. Finally, the revised mission needs statement 

(MNS) and new implementation plan add to these uncertainties. However, I will say 

this. If the Coast Guard successfully implements our recommendations, we would 

be a lot more comfortable than we are today with a more aggressive schedule. I 

would also add that we would look more favorably on acceleration for assets after 

they are proven, that is after they have been built, fielded and tested so that identified improvements can be made in follow-on assets. Accelerating the production of 

proven replacement assets is a lot less risky than accelerating unproven assets. In 

saying this, I would also add the caveat that in making a determination about the 

advisability of accelerating a particular asset, one would also need to consider potential industrial base, manpower, and training implications as part of the decision. 

Question 3. Have you looked at the feasibility of accelerating Deepwater to either 

a 15 year or 10 year implementation plan? Are you aware of any costs involved in 

accelerating Deepwater? How much would it cost each year to accelerate it to 15 

years? 10 years? 

Answer. We have not looked at the feasibility of accelerating Deepwater. This past 

year we worked with the Coast Guard in an effort to ascertain the relative costs 

of replacement versus sustainment, but the Coast Guard was unable to provide the 

data we required for an accurate analysis. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. FRANK R. LAUTENBERG TO

MARGARET T. WRIGHTSON

Question. Will GAO be studying the problems with the port security grant program identified by the Inspector General and the Administration’s efforts to address 

them? 

94

Answer. GAO is studying the port security grant program. Our examination of the 

grant program involves determining the extent to which risk management approaches are used to compare and prioritize grant applications across port locations. 

It is part of a broader effort that is looking at risk management practices at the 

Coast Guard as well as the role that the Information Analysis and Infrastructure 

Protection (IAIP) Directorate of the Department of Homeland Security is playing in 

setting uniform policies and guidelines on risk management so that it can compare 

and prioritize critical infrastructure across various sectors, such as transportation 

and energy. We are doing this work in response to a request from Representative 

Henry A. Waxman, Ranking Minority Member, Government Reform Committee, 

House of Representatives; and Representatives C.A. Dutch Ruppersberger and 

George Miller. We plan to issue our report this summer.

Æ