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COAST GUARD READINESS: EXAMINING CUTTER, 

AIRCRAFT, AND COMMUNICATIONS NEEDS 

(113–26) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

JUNE 26, 2013 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

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

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

DUNCAN HUNTER, California, Chairman 

DON YOUNG, Alaska 

HOWARD COBLE, North Carolina 

FRANK A. LOBIONDO, New Jersey 

PATRICK MEEHAN, Pennsylvania 

STEVE SOUTHERLAND, II, Florida, 

Vice Chair 

TOM RICE, South Carolina 

TREY RADEL, Florida 

MARK SANFORD, South Carolina 

BILL SHUSTER, Pennsylvania (Ex Officio) 

JOHN GARAMENDI, California 

ELIJAH E. CUMMINGS, Maryland 

CORRINE BROWN, Florida 

RICK LARSEN, Washington 

TIMOTHY H. BISHOP, New York 

JANICE HAHN, California 

LOIS FRANKEL, Florida 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

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

TESTIMONY 

PANEL 1 

Vice Admiral John P. Currier, Vice Commandant, United States Coast Guard 3 

PANEL 2 

Ronald O’Rourke, Specialist in Naval Affairs, Congressional Research Service 22 

Steven P. Bucci, Ph.D., Director, Douglas and Sarah Allison Center for Foreign Policy, The Heritage Foundation ................................................................ 22 

Lawrence Korb, Ph.D., Senior Fellow, Center for American Progress ................ 22 

PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS 

Hon. John Garamendi, of California ...................................................................... 32 

PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE 

RECORD SUBMITTED BY WITNESSES 

Vice Admiral John P. Currier: 

Prepared statement .......................................................................................... 33 

Answers to questions from Hon. Duncan Hunter, of California ................... 37 

Ronald O’Rourke, prepared statement ................................................................... 41 

Steven P. Bucci, Ph.D., prepared statement ......................................................... 52 

Lawrence Korb, Ph.D., prepared statement .......................................................... 57 

SUBMISSIONS FOR THE RECORD 

Vice Admiral John P. Currier, Vice Commandant, United States Coast Guard, 

responses to two requests for information from Hon. Rick Larsen, a Representative in Congress from the State of Washington .................................... 12 

Lawrence Korb, Ph.D., Senior Fellow, Center for American Progress, request 

to submit ‘‘Rebalancing Our National Security: The Benefits of Implementing a Unified Security Budget’’ .................................................................. †

ADDITION TO THE RECORD 

Lawrence Korb, Ph.D., Senior Fellow, Center for American Progress, request 

to submit ‘‘Building a U.S. Coast Guard for the 21st Century’’ ....................... ††

†Task Force on a Unified Security Budget, Center for American Progress, 

Rebalancing Our National Security: The Benefits of Implementing a Unified 

Security Budget (October 2012) can be found online at: http:// 

www.americanprogress.org/wp-content/uploads/2012/10/UnifiedSecurityBudget.pdf. 

††Lawrence J. Korb et al., Building a U.S. Coast Guard for the 21st Century 

(June 2010) can be found online at: http://www.americanprogress.org/wpcontent/uploads/issues/2010/06/pdf/coastlguard.pdf. 

iv 


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SUMMARY OF SUBJECT MATTER 

TO: 

FROM: 

RE: 

Members, Subcommittee on Coast Guard and Maritime Transportation 

Staff, Subcommittee on Coast Guard and Maritime Transportation 

Hearing on "Coast Guard Readiness: Examining Cutter, Aircraft, and 

Communications Needs" 

PURPOSE 

The Subcommittee on Coast Guard and Maritime Transportation will meet on 

Wednesday, June 26, 2013, at 10:00 a.m., in 2167 Rayburn House Office Building to 

receive testimony regarding the status of the Coast Guard's current acquisition program 

and examine the program's sustainability. The Subcommittee will hear from the United 

States Coast Guard, the Congressional Research Service, The Heritage Foundation, and 

the Center for American Progress. 

BACKGROUND 

Coast Guard Recapitalization 

The Coast Guard began a process of recapitalizing its aging vessels and aircraft in 

the late 1990's. The program's focus was to replace those assets that carry out missions 

farther than 50 miles from shore and to modernize information technology systems that 

the Service relies upon to coordinate its operations. The program was known as the 

Integrated Deepwater Systems (Deepwater). To manage the acquisition program, the 

Coast Guard engaged a Lockheed MartinINorthrop Grumman team, called the Integrated 

Coast Guard System (ICGS). 

Decpwater encountered significant quality and cost issues. It was the subject of 

several hearings and an investigation by the Committee. It is also the subject of 

continuing review by the Government Accountability Office (GAO). Although the ICGS 

accomplished some goals, such as delivering a reengined HH-65 helicopter, the Coast 

Guard terminated the contract with the lCGS in 2007 and is now performing the 
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acquisition functions in-house. The assets scheduled for recapitalization remain the 

same. 

Fiscal Year 2014 Budget Request for Coast Guard Acquisitions 

The President requests $909 million for the Acquisitions, Construction, and 

Improvements (AC&I) account in fiscal year (FY) 2014, $634.2 million (or 41 percent) 

less than the FY 2013 enacted level. The AC&I account funds the acquisition, 

construction, and physical improvements of Coast Guard owned and operated vessels, 

aircraft, facilities, aids to navigation, information management systems, and related 

equipment. 

The budget request includes approximately $830.9 million for the acquisition of 

aircraft, vessels, and command, control, communications, computer, intelligence, 

surveillance and reconnaissance (C4ISR) systems. This represents a reduction of $506.4 

million (or 38 percent) below the FY 2013 enacted level. The budget request includes: 

• $616 million to complete construction of the seventh National Security Cutter 

(NSC). No funding is included for Long Lead Time Materials for NSC #8, which 

will delay the production line and increase costs; 

• $75 million to acquire two Fast Response Cutters (FRC). The FRC is replacing 

the Coast Guard's nearly 30 year-old 110-foot Patrol Boats. The current contract 

requires the Coast Guard to acquire at least four FRCs each year. Acquiring two 

will delay the production ofFRCs and increase costs; 

• $25 million to continue the development of the Offshore Patrol Cutter (OPC). 

The OPC program, the largest cost-driver in the current recapitalization program, 

is supposed to replace the Service's aging 210-foot and 270-foot Medium 

Endurance Cutters (MEC); 

• $16 million for modernization and sustaimnent of the HC-130H Long Range 

Surveillance Aircraft fleet; 

• $12 million for the continued modemization and sustainment of the HH-65 

Dolphin helicopter fleet; 

• $59.9 million for C4ISR acquisition, program management, systems engineering 

and integration, and the Nationwide Automatic Identification System; and 

• $2 million to survey and design a new polar icebreaker. 

The Administration proposes to eliminate funding for the following acquisition 

programs in FY 2014: 

• HC-144A Maritime Patrol Aircraft: The Coast Guard's program of record for this 

procurement calls for the acquisition of 36 MP A to replace the obsolete HU-25 

Falcon aircraft and some HC-130H aircraft. To date, funding has been secured to 

acquire 18 MP A and 17 Mission System Pallets, which provide the MP A with the 

necessary avionics to support Coast Guard missions. Though the Service has not 

yet submitted a plan to make up lost patrol hours that come as a result of not 

2 
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fulfilling this acquisition, the Secretary of Homeland Security has requested at 

least 14, and as many as 21, C-27 Spartan aircraft being excessed by the Air Force 

be transferred to the Coast Guard. 

• Response Boat - Medium: The Coast Guard's program of record for this 

procurement calls for the acquisition of 180 Response Boat - Mediums (RB-M) to 

replace the aged, slow, and obsolete 41 foot utility boat. To date, funding has 

been secured to acquire 170 RB-Ms. Despite proposing to terminate the 

acquisition early, the Service has not amended the program of record to explain 

how the reduced buy will meet mission requirements. Terminating the acquisition 

early could impair small boat readiness, which could impact search and rescue 

mission effectiveness. 

• HH-60 Helicopter Conversion: The Coast Guard had planned to upgrade the 

helicopter's radar sensor system to improve the asset's ability to conduct search 

and rescue. The Service now proposes to delay these upgrades. 

The budget requests $120.2 million in other capital costs, 87.9 million (or 42 

percent) less than the FY 2013 enacted leveL This includes $115 million in personnel 

costs to execute AC&I programs and $5 million to construct shore facilities and aids to 

navigation. The Coast Guard currently has a backlog of 28 prioritized shore facility 

improvement projects with an estimated combined cost of nearly $500 million. 

Finally, no funding is included in the budget request to rehabilitate housing for 

Coast Guard servicemembers and their dependents. The account received $10 million in 

FY 2013 funding. Much of the Service-owned housing is decades old and in poor 

condition. The Coast Guard recently completed a survey of the condition of its 

servicemember housing to help the Service better direct investments. 

Issues 

Mission Need Statement 

In 1996, the Coast Guard developed a Mission Need Statement (MNS) to identifY 

how Deepwater would fill capability gaps in its missions and establish a baseline for the 

numbers, types, and capabilities of new and recapitalized assets that would be needed to 

meet the Service's mission requirements. In 2005, The Coast Guard revised the 1996 

MNS to accommodate additional capabilities needed to meet post-September 11 mission 

requirements. The 2005 MNS guided the creation of a new program of record approved 

in 2007 with a baseline of 20 to 25 years for construction and delivery of recapitalized 

assets at a total cost of $24.2 billion. 

In July 2011, the GAO released a report entitled "Action Needed As Approved 

Deepwater Program Remains Unachievable" (GAO-1l-743). The title refers to the 

GAO's finding that it will be impossible for the Coast Guard to complete its major 

3 
vii 


Insert offset folio 4 here 81676.004

acquisitions without breaching its 2007 baseline. Among other reasons for the breach, 

the GAO found that funding requested by current and past administrations has not been 

sufficient to meet acquisition timelines, and the Service has not conducted a 

comprehensive reanalysis of the current recapitalization program to examine tradeoffs 

between budget constraints, time lines, capabilities, and asset quantities. As a result, the 

GAO estimated it could take an additional 10 years to complete the current 

recapitalization program and the cost could increase by at least $5 billion. 

Since the publication of the GAO's report, the Coast Guard and the Department of 

Homeland Security (DHS) have released two studies that reassessed the large cutters 

being acquired under the current recapitalization program: the Fleet Mix Analysis Phase 

II (FMA II) and the Major Cutter Study. The purpose of the studies was to assess the 

current acquisition program and alternatives to determine the best mix of cutters to meet 

Coast Guard mission requirements laid out in the 2005 MNS. 

• Fleet Mix Analysis Phase II - The 2007 baseline calls for acquiring a mix 91 new 

cutters (8 NSCs, 25 OPCs, 58 FRCs). However, the Coast Guard estimates that 

after completing the acquisition of91 new cutters, the Service would still 

experience mission capability gaps in 6 of its II statutory missions. To examine 

the issue, the Coast Guard conducted its Fleet Mix Analysis Phase I (FMA I) 

which determined the number of cutters that would be needed to completely fill 

the Service's mission capability gaps. The objective fleet mix included in FMA I 

calls for a mix of 157 new cutters (9 NSCs, 57 OPCs, 91 FRCs). In November 

2011, the Coast Guard released its FMA II which applied budget constraints on 

the FMA I analysis. FMA II calls for the acquisition of 149 new cutters (9 NSCs, 

49 OPCs, 91 FRCs). 

• DHS Major Cutter Study - DHS released its Major Cutter Study in December 

2011. This study evaluated the anticipated mission effectiveness of the Coast 

Guard's current acquisition program of record for both the NSC and OPC against 

alternative fleet mixes. These mixes included varying numbers of both assets, as 

well as the possibility of substituting either a modernized 270 foot Medium 

Endurance Cutter or a Coast Guard variant of the Navy's Littoral Combat Ship for 

the OPC. DHS found that while some of the alternative mixes provided 

advantages in some mission areas, no alternative could match the program of 

record in every mission area. Additionally, those advantages would not be 

realized for several decades. As such, DHS concluded that the study validates the 

2007 program of record. 

In April 2013, DHS announced it would conduct a "comprehensive portfolio 

review" that will revise the programs of record and operational requirements for assets to 

be acquired under the recapitalization program to better meet projections of future years 

funding. 

4 
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Acquisition Delays 

Problems with Deepwater led to considerable delays in the delivery of new and 

refurbished assets. The Service does not expect to complete the current recapitalization 

program until the mid-2030's, approximately ten years behind schedule. In the 

meantime, the Service's legacy vessels and aircraft are either approaching, or have 

exceeded, their intended service lives. The age of the legacy assets, coupled with 

increased operations tempos, have led to increased rates of failure among the assets' parts 

and major systems. This, in tum, has increased scheduled and unscheduled maintenance 

costs and reduced patrol hours which have negatively impacted operational readiness and 

mission performance. 

In its August 2012 report entitled "Legacy Vessels' Declining Conditions 

Reinforce Need for More Realistic Operational Targets" (GAO-12-741), the GAO found 

that scheduled maintenance costs for legacy assets increased 32 percent from fiscal years 

2008 to 2011. The GAO also found that the Service's legacy fleet of vessels was not able 

to achieve operational targets for percent time free of casualty or operational hours. As a 

result of the failure of its legacy assets to operate at target levels, the Service reported that 

from fiscal years 2007 through 2010, it reduced the hours spent conducting drug 

interdiction activities by 65 percent.and the number of operational hours spent conducting 

alien interdiction activities declined by 40 percent. 

Unplanned Capital Needs 

Delays in the acquisition program have exacerbated existing capability gaps and 

created new ones. In addition, as the years have gone by, the new acquisition needs have 

been identified that the Service has yet to plan or budget for. For instance: 

• Medium Endurance Cutters - Under the Coast Guard's current recapitalization 

program, the 210 and 270 foot MECs will be in service into the mid-2030's before 

the fleet will be fully replaced by the new OPC. However, the recently completed 

Mission Etlectiveness Project for the MECs will not extend the service life of the 

MECs until that time. The Coast Guard has informed staff it is convening a Ship 

Structure Machinery Engineering Board to begin the process of evaluating the 

current condition ofthe MEC fleet and examine ways to extend the fleet's service 

life. 

• HH-60 and HH.-65 Helicopter Fleet - Under the Coast Guard's current 

recapitalization program, the Service's fleet of medium range HH-60 and short 

range HH-65 helicopters have undergone a series of upgrades to extend their 

service lives. However, both aircraft are expected to reach the end of their service 

lives in 10 to 15 years. The Service has not begun the process of planning for 

their replacements. 

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WITNESSES 

Panel I 

Vice Admiral John Currier 

Vice Commandant 

United States Coast Guard 

Panel II 

Ronald O'Rouke 

Specialist in Naval Affairs 

Congressional Research Service 

Dr. Steven Bucci 

Director, Douglas and Sarah Allison Center for Foreign Policy 

The Heritage Foundation 

Dr. Lawrence Korb 

Senior Fellow 

Center for American Progress 

6 
(1) 

COAST GUARD READINESS: EXAMINING CUTTER, AIRCRAFT, AND COMMUNICATIONS 

NEEDS 

WEDNESDAY, JUNE 26, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COAST GUARD AND MARITIME

TRANSPORTATION, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

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

2167, Rayburn House Office Building, Hon. Duncan Hunter (Chairman of the subcommittee) presiding. 

Mr. HUNTER. The subcommittee will come to order. 

The subcommittee is meeting today to review the Coast Guard’s 

major acquisitions programs. The Coast Guard’s effort to recapitalize its aircraft, vessels, and communications systems has suffered through some dark days. Fortunately, under the leadership 

of Admiral Papp and his predecessor, Admiral Allen, the program 

has turned the corner and the Service is finally taking delivery of 

new and improved assets in a cost-effective manner. 

Unfortunately, just as the men and women of the Coast Guard 

are finally getting the new and improved assets promised to them 

nearly 20 years ago, the President is proposing a budget that will 

set the program back another 15 to 20 years. The President guts 

the Coast Guard’s acquisition budget, cutting it by 42 percent 

below the current level. The President’s request proposes to terminate or delay the acquisition of critically needed replacement assets. This will increase acquisition costs for taxpayers, place further strain on the Service’s aging and failing legacy assets, exacerbate growing capability gaps, and seriously degrade mission effectiveness. 

As this subcommittee has continually highlighted, the Coast 

Guard currently operates tens and, in some cases, hundreds of 

thousands of hours short of its operational targets. This means assets are not there for the Service to conduct drug and migrant 

interdiction, protect our environment, secure our ports, or ensure 

the safety of our waterways. 

For instance, the Coast Guard reported that due largely to its 

failing legacy assets, it was forced to reduce hours spent conducting 

drug interdiction activities by 65 percent in recent fiscal years. The 

only way to reverse the decline in the Coast Guard’s mission performance is to make the necessary investments to acquire new and 

improved assets. 

2 

Unfortunately, based on the last couple of budget requests, it appears this administration refuses to make those investments. If 

that is the case, then it is time for the President to tell Congress 

what missions the Coast Guard will no longer conduct. It is simply 

irresponsible to continue to send our service men and women out 

on failing legacy assets commissioned over 50 years ago and expect 

them to succeed in their missions. 

I thank the witness for appearing today and look forward to your 

testimony. 

With that, I yield to Ranking Member Garamendi. 

Mr. GARAMENDI. Thank you, Chairman Hunter. 

And to all the witnesses that are appearing today, thank you 

very much for the testimony that you will soon be giving us. 

As we turn our attention this morning to focus once again on the 

status of the Coast Guard’s long-range program to recapitalize its 

aging fleets of surface ships and aircraft and to improve its communications and intelligence technology for the 21st century, we are 

keeping in mind the extraordinary budget challenges that we are 

facing—‘‘we’’ are facing. It is not just the administration. It is this 

Congress as well. 

As we discovered during the subcommittee’s April 16 hearing 

concerning the administration’s fiscal year 2014 budget request for 

the Coast Guard, we are simply not providing the Coast Guard 

with the resources it needs to fulfill its many missions. Failing 

that, it is folly for us to believe the Coast Guard will be able to adequately maintain operations and, importantly, sustain the progress 

in its $29 billion recapitalization strategy, the largest such initiative in the Coast Guard’s storied history. 

So the predicament we find ourselves in is not entirely the Coast 

Guard’s making, nor can it be attributed to any one factor. And as 

you, Admiral Currier, will soon be testifying, at least from your 

written testimony, the Coast Guard is doing its utmost to wisely 

utilize the resources that are appropriated by this Congress to address the most pressing problems and priorities that you have. 

But the fact remains, if we continue on the same course we will 

accomplish little but to hollow out the capabilities of our guardians 

of the sea. And the warning signals are there. We are approaching 

that tipping point, and it is abundantly clear. The fiscal year 2014 

budget requests for the acquisition construction improvement account is only $909 million. This is $600 million less than the funding levels authorized in last year’s Coast Guard Maritime Transportation Act and $1.1 billion less than the $2 billion funding level 

recommended for the ACI account by the Navy League of the 

United States in the 2013 maritime policy statement. 

Additionally, we are seeing certain acquisition programs prematurely terminated and the timetables for other programs pushed 

further into the future. Moreover, the Coast Guard now faces an 

imminent gap in operational capability as its aging legacy assets 

are pressed far beyond their service life. The new assets are going 

to be very late in arrival. 

Mr. Chairman, this is a very important hearing. I thank you for 

calling it. We have a lot of work to do. I look forward to the testimony. And I look forward to avoiding the hollowing out of the 

Coast Guard. Thank you. Yield back. 

3 

Mr. HUNTER. I thank the ranking member. 

Our first panel is one witness, Vice Admiral John Currier, Vice 

Commandant of the United States Coast Guard. 

Admiral, you are recognized for your statement. 

TESTIMONY OF VICE ADMIRAL JOHN P. CURRIER, VICE 

COMMANDANT, UNITED STATES COAST GUARD 

Admiral CURRIER. Thank you, Mr. Chairman, Mr. Garamendi, 

other members of the panel. I ask that my written testimony be entered into the record. 

Chairman Hunter, Ranking Member Garamendi, members of the 

subcommittee, good morning, and thank you for the opportunity to 

speak today. 

In our mission set, our men and women are amongst the most 

dedicated, well trained, and highly skilled in the world, and we owe 

them our very best efforts to continue to provide the support and 

the tools they need to execute maritime governance and sovereignty for our Nation. Not only do we owe the men and women 

of the Coast Guard the tools they need to do their job, we owe them 

an environment of trust. And I would like to take 1 minute just to 

talk about that. 

We have respect. We have core values. But most importantly, we 

have trust in our workforce. In our business, trust is a priceless attribute. I can tell you from years past, being a helicopter pilot, that 

the trust that the crew holds when you are out on a hazardous mission is absolutely priceless, and it is essential to the accomplishment of the mission. 

When it comes to sexual assault, an issue that has received a lot 

of attention of late, we have been working this issue for a long 

time. It is a matter of trust in our workforce. I want to take the 

opportunity to assure you that the Commandant and I are wholeheartedly committed to eliminating the crime of sexual assault 

from the Coast Guard. It is our number one priority. 

But I know we are here today to talk about acquisition. Let me 

start by thanking you for the stalwart support of this subcommittee 

for our service and the accomplishments of our mission. The oversight and advocacy from this subcommittee has been essential to 

the remarkable progress we have made in our recapitalization efforts to date. The Coast Guard remains committed to sustaining 

our most critical frontline operations while funding our most needed acquisition projects. 

In the current fiscal environment, this requires difficult choices. 

With that in mind, we are balancing funding for our acquisition 

projects and operating budgets to address our highest strategic priorities in the areas we see as greatest risk. 

Our motivated men and women are already seeing the tangible 

benefits of our capabilities that have been introduced to the fleet 

through our recapitalization programs. A case in point, recently the 

crew of the Coast Guard cutter Bertholf employed a ship-based unmanned aerial vehicle to support the interdiction of a go-fast smuggling vessel. The Bertholf’s crew orchestrated a seamless aerial surveillance that involved MPA fixed-wing aircraft, a ScanEagle UAS 

that was undergoing prototype testing, handed off to an armed helicopter, who handed off to a Long Range Interceptor who actually 

4 

did the stop, the arrest, and the interdiction. Ended up yielding 

600 kilos of virgin cocaine. This is exactly how the system should 

work, and we are very gratified to see this. 

The level of interoperability was simply not available with our 

legacy assets. It demonstrates how we apply these updated capabilities to defeat the threats in the offshore environment. And I 

would underscore the offshore environment is our area of greatest 

risk. 

A key element to our layered security regime is persistent presence in the offshore to deter, detect, to interdict, and to neutralize 

threats before they reach our shorelines. 

Completing acquisition of the National Security Cutters and development of an affordable Offshore Patrol Cutter fleet are critical 

to the Coast Guard’s continued ability to address threats and protect national interests in the offshore maritime environment. Our 

mission set can be particularly challenging in some of the harsh environmental conditions in which we operate. Often the question can 

be asked, if not the Coast Guard, then who? 

We continue to enhance efficiency across the acquisition portfolio, 

building on our previous experience and incorporating lessons 

learned to minimize risk and maximize the affordability in our 

projects. We have achieved stability in cost and schedule across our 

largest programs, as evidenced by the recent fixed-price production 

contract on the sixth National Security Cutter, which was awarded 

at near the same price as NSCs four and five. This underscores the 

benefits of predictable funding and timely contract award. The ontime delivery of our six Fast Response Cutters, which are already 

successfully in service in the 7th District, the Miami/Caribbean 

AOR, is further testament to our focus on implementing best practices across the acquisition portfolio. 

In the aviation fleet, we have recently accepted the 15th Maritime Patrol Aircraft, the HC–144, on budget and on schedule. We 

continue to sustain and upgrade the legacy rotary-wing fleet with 

critical system enhancements that will equip aircrews with the capabilities necessary to execute our missions for the next decadeplus. Should they become available, we are very excited and poised 

to accept up to 21 C–27J aircraft from the Air Force. The business 

case for assimilating these aircraft in the Coast Guard inventory 

is strong, with a potential of $500 million to $800 million in cost 

avoidance depending on how many airframes are made available. 

We recently completed the rollout of the Rescue 21 communications system along our Atlantic, Pacific, and Gulf Coasts, as well 

as the Great Lakes, Hawaii and Puerto Rico. This provides digital 

selective calling and a digitally based communication system that 

includes radio signal location information for over 41,000 miles of 

our U.S. coastline. We are leveraging Rescue 21 capabilities to develop a system specifically tailored to the unique requirements of 

Alaska and our inland Western River System. The Coast Guard recently reached a milestone of 50,000 search and rescue cases using 

the Rescue 21 capability. 

We continue to improve and standardize our small boat fleet 

through the delivery of the Response Boat-Medium and Response 

Boat-Small and delivery of our new standard Over-the-Horizon-IV, 

or OTH class IV cutter boat as a common boat deployed on all our 

5 

cutters larger than the 110-foot patrol boat. Our strategy is to limit 

our ship-borne small boat assets to two, a 7-meter and an 11-meter 

RB for standardization and universal use across the cutter classes. 

I am very proud of the work of our acquisition professionals. 

They perform hard work and thankless work often on each day to 

efficiently acquire the assets and capabilities we need to serve the 

Nation. 

We continue to work hard to make necessary reforms and realize 

efficiencies within the acquisition programs. Despite the significant 

challenges, we must continue the work we started on acquisition 

and mission support reform and keep our eyes fixed on the horizon. 

Our goal, which was set in 2006, was to become a model 

midsized Federal agency for acquisition process and results, and I 

truly believe we have achieved that goal. I believe that with predictable funding we can acquire these needed capabilities efficiently. Your support and predictable funding of these projects is 

absolutely critical. 

Clearly, we have to make difficult decisions moving forward in 

this environment. We will continue to make the best use of our resources and abilities to provide safe and effective conduct of our operations in the areas that we see of greatest risk to the Nation. To 

the best of our ability, we will recapitalize our cutters, boats, and 

aircraft to address current and emerging threats, particularly in 

the area of greatest risk capabilities-wise, as I said, in the offshore 

environment. 

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

thank you for your steadfast support of our Coast Guard. I look forward to answering your questions. 

Mr. HUNTER. Thank you, Admiral, for your testimony. I am now 

going to recognize Members for questions, starting with myself. 

This subcommittee, I know before I came here, the previous 

chairman, Chairman LoBiondo, had hearings about Deepwater and 

about the acquisition system for years now, about the deplorable 

state of Coast Guard legacy assets, the negative impact that those 

old assets and the inability to recapitalize them has had on performance. The Inspector General, the GAO, and the Coast Guard 

have all testified over the last few years that the continued reliance 

on aging and failing legacy assets is robbing the Coast Guard of its 

ability to conduct its 11 statutory missions. The Commandant has testified that the Service needs over $2 

billion annually to rebuild its assets, to recapitalize. Over the last 

decade, Congress has worked closely with each administration to 

increase annual funding for the acquisition program in an effort to 

reach that goal, even working through the problems after Deepwater, getting those straightened out, and saying, OK, now we 

have a good way ahead. 

Unfortunately now this year, as we are finally, I would say, on 

a nice flat plain, making progress, the administration sends us a 

budget and capital investment plan that cuts our knees out from 

under us, that cuts the Coast Guard’s knees out from under it. If 

the administration is prepared to underfund and delay the recapitalization of the Coast Guard’s assets by another decade, then it 

needs to tell us, Congress, and it needs to tell you, the Coast 

Guard, which missions you will no longer be asked to do. 

6 

My question is, out of your 11 statutory missions, which ones will 

the Service no longer be able to accomplish if funding remains the 

way it was this year? Without Congress’ help, where you lose half 

of your recapitalization budget, and if your funding stays at $900 

million a year going forward, and we are unable to put that money 

back in there, which missions are you not going to do? 

I am sure the Coast Guard has looked at this because over the 

last few years every report that I have read, the end of it says, the 

Coast Guard needs to reexamine which missions it chooses to do 

based on the real life—and not the Coast Guard’s strategy but the 

real life and the reality of the lack of funding, things like the OPC. 

Do we need to look at the OPC? What does it really need to do? 

Does it need to be in sea state 5? Does it need to be a smaller 

NSC? Or can we get by with having it be less capable? So things 

like that. What has the Coast Guard determined that its missions 

can be with the lack of funding that it is going to receive over the 

next decade based on funding this year? 

Admiral CURRIER. Thank you for that question, Mr. Chairman. 

I would say this: The Coast Guard is statutorily charged with 11 

missions, 11 core missions. They aggregate into maritime safety, 

maritime security, protection of the environment. We site our requirements to perform to a level of capacity across that 11-mission 

set. Depending on the resources that we receive, from an operational perspective in the near term, we can adjust capacity around 

the 11 mission capabilities that we have. 

But there are two issues here: One is what we do today and the 

other one is what we do tomorrow. Because there is a long-term investment requirement to maintain the capacity to do capabilities in 

those 11 missions. So the two issues are: What are we doing today 

and how are we going to invest to ensure that we can do it tomorrow? 

I acknowledge the fact that there have been numerous reports, 

many of which have been oriented toward validation of the program of record that exists, and universally they have come out to 

date in support of the program of record as a reasonable approach. 

Given the economic times, the fiscal state of the economy, all the 

challenges that we are facing as a Nation, of which we fully recognize, we are not tone-deaf to that, we think that the current budget 

demands of us tough choices, tough choices on where we apply critical funds to the area we see as the highest level of risk. 

The highest level of risk has been identified in our portfolio as 

the offshore segment of our layered defense strategy. So we are 

driven to, we are required to make tough choices going into the future on what investments can we afford to and what will we make 

to maintain a capacity across our 11 missions into the future? 

Quite frankly, were the recapitalization funding level to remain 

as it is into the future or be decremented, then that would require 

tough choices that put us in a situation where we will have to go 

back and say, there are areas that we can’t perform in. And over 

multiple years, we will end up being a Coast Guard that looks different from today. 

Mr. HUNTER. Where are those areas? The ones that you just 

mentioned, your last sentence. 

7 

Admiral CURRIER. The administration and the Department this 

year—and the Department and Secretary Napolitano has been particularly supportive of us through this in our cutter recapitalization 

in particular—but what we have been asked to do is to accomplish 

a portfolio review which basically is to take what you described as 

the GAO findings and reassess where we are with our acquisition 

portfolio, apply it to our missions, and find out what we can do and 

what we can’t do. 

Because each one of those mission areas are statutorily mandated, I don’t feel that it is incumbent on us to say what we cannot 

do specifically capabilities-wise. Capacity-wise we can say we can 

only do so much. But this portfolio review is going to be designed 

to look at what we do mission-wise and look at how we are postured to provide that capacity both today and into the future. And 

I think the results of that portfolio review will start to answer the 

questions that you are asking. 

So it won’t be the Coast Guard saying, we won’t do this or we 

can’t do this. It will be a combination of the administration and the 

Department and the Coast Guard coming to a rigorous analysis of, 

given the realities of funding into the future, what can and what 

can’t we do? 

Mr. HUNTER. When is that about portfolio review going to be 

completed? 

Admiral CURRIER. It has started. We have had meetings with 

OMB and the Department. So the effort started. We haven’t totally 

agreed to when the product will come out. Part of it is dependent 

on the rigor that I described. We have models that we use that 

were the same models basically that set the force structure for 

Deepwater and our acquisition strategies to date. And we need to 

run the data through those models to come up with the effect on 

mission and the acquisition portfolio. 

So it is not just an arbitrary scan and cuts based on less than 

a rigorous analysis that is statistically based. It kind of goes back 

to what you were saying about, what do we really need for sea 

state 5? How many cutters do we need there? Show me the empirical case for that. And that is what we will be generating. 

Mr. HUNTER. Great. Would you come back after you have completed that rigorous analysis? 

Admiral CURRIER. Absolutely. Yes, sir. 

Mr. HUNTER. Thank you, Admiral. 

Mr. Garamendi is recognized. 

Mr. GARAMENDI. Mr. Chairman, following on your line of questions, if this budget scenario continues—this is, I think, the second 

year or maybe even the third year in which we have seen these 

kind of stresses placed on the budget, the acquisition budget, and 

now with sequestration on the operational budgets—we are going, 

this committee is going to have to seriously consider modifying the 

mission of the Coast Guard. And that is where this is headed. 

And you have raised that question, Mr. Chairman. And we really 

need to get into this in detail. The last question that you raised or 

the last few questions you have raised is imperative. I would hope 

it comes soon so that we can spend a good portion of our time in 

the remaining session this year to really get at that. 

8 

And we need to understand the implications of it. Just this week, 

the Senate is dealing with border security in the immigration bill. 

And they have approved or are about to approve an amendment— 

I think they did approve an amendment that would add $46.3 billion to border security on the Mexican border. We have a lot more 

border than Mexico. We have all of the maritime border, which is 

increasingly being used for immigrants. I think there are many 

cases that the Coast Guard can talk about. 

It seems to me that as we go through this immigration issue, and if, in fact, we are going to spend $46 billion on border security on 

the land, we need to think seriously about the rest of the border. 

And we also need to think seriously about threats to, let’s just call 

it nuclear threats. We are projected to spend some $5 billion on an 

east coast missile defense site which assumes that Iran is going to 

send a missile our way, which would then assume that Iran disappears from the map. 

However, the more likely event is to use the ports. If we are 

going to have a nuclear threat, it is not likely to come from a missile. It is likely to come from a container. So that brings us back 

to the role of the Coast Guard. 

Where I am headed here, Mr. Chairman, is that we, as the deciders—to use a word from the previous administration—as the people 

that are going to make these decisions, we need to think about this 

in a holistic way. The National Defense Authorization Act that 

passed off the floor of the House added $2.6 billion for unknown 

airplanes, materials, and supplies for the Afghan National Army. 

We would never let the Coast Guard have $2.6 billion without explaining to us in detail how they are going to spend it down to the 

last pencil and bolt. But we have allocated $2.6 billion to the Afghan National Army in unspecified use. 

The problem is here. The problem is among the 535 of us that 

are making, frankly, some very irrational decisions. And we need 

to really think seriously about how we are going to deal with this. 

Admiral, I think, to go back to you, beside my pontification here, 

you and the Coast Guard are going to have to explain to us how 

you are going to carry out the missions, the statutory missions that 

you are faced with given the fact that the Congress of the United 

States, together with the administration, is downsizing the Coast 

Guard. So what can be done? And we need to understand completely the implications of that. So when will you have that done? 

Admiral CURRIER. Sir, I think, as I said to the chairman, the 

portfolio review is going to reveal those answers. It is going to establish a position from the administration, the Department, and 

the Coast Guard on, given levels of funding, what we will be able 

to do and what we will not be able to do. 

I think a basic, if you don’t mind, just a very brief understanding 

of how we operate, especially in the context of the threat that you 

described, is probably important. We have developed post-9/11 a 

very sophisticated layered strategy for the defense of our coastline 

and ports. It doesn’t start 5 miles off the beach. It starts in foreign 

ports. It starts with IMO-type agreements on security regimes in 

foreign ports and our inspection of those ports. It depends on intelligence from all-source throughout the U.S. Government and international partners on what are the anomalies on a container? What 

9 

are the anomalies on a ship? And then it depends on a layered 

strategy for defense that starts offshore, because our goal would be 

to hold the threat away from our coast, to near shore, and to in 

the port. 

And I would tell you, in that layered strategy, which has proved 

to be quite effective, the weak link at this point is our offshore capability, and that translates to the NSC and OPC. So what we are 

saying is, we have laid out an acquisition strategy that has recapitalized successfully, and our in-the-port, to a large extent, our inthe-port capability, our near-shore coastal, and our overseas capability in partnership with other Government agencies and other nations is strong. It is the offshore capability that our ships present 

that are having the greatest decline in capacity and capability. 

Mr. GARAMENDI. So the bottom line of that is that the entire 

strategy has a serious flaw. That is, you are missing one of the key 

assets. 

Admiral CURRIER. Well, what it will show you, sir, is that as we 

are under fiscal duress like everyone else is in the Federal Government, we are going to make triage-like choices to go to that area 

of highest risk and spend the critical capital that we receive. And 

right now, that is why we are emphasizing the procurement of the 

NSCs and then the OPC follow-on. And we are fully, fully aware 

that the OPC program needs to be affordable. 

Mr. GARAMENDI. If I am not mistaken, for the National Security 

Cutters, the next one out is going to get delayed. Is that correct? 

Admiral CURRIER. We have long-lead funding for seven, and I 

have no information that there will be delays in follow-on cutters. 

Mr. GARAMENDI. So seven. How about eight? 

Admiral CURRIER. Eight? We don’t have long-lead funding identified for eight, which would, if that were to be the case, result in 

about a year’s delay and some cost increase. 

Mr. GARAMENDI. Given the way in which the budget is going, and 

without a significant change on our part and the administration’s, 

you are headed into a long-term budget that is headed down. Will 

you be able to in that budget provide for the eighth cutter? 

Admiral CURRIER. Yes, sir, I believe we will. But it is going to 

be at great cost. And it is, as I said, it is a triage exercise. 

Mr. GARAMENDI. Well, this goes back to what the chairman was 

saying in his statement, is that we need to fully understand what 

the future is going to be here, and we need to have that in detail. 

Admiral CURRIER. Yes, sir. 

Mr. GARAMENDI. Because we are basically operating on yesterday’s plan, which is not consistent with the current reality. And my 

point to us, the 535 of us, is that we are making choices here about 

where to allocate the resources available for the United States Government. And, frankly, in my view, some of those choices are nonsense. And I made two points, $2.6 billion this coming year for the 

Afghan National Army to buy something. Mostly, I think it is probably to open another account in Qatar for the Karzai government. 

Let’s move on. I yield back. 

Mr. HUNTER. Thank the ranking member. 

I would like to recognize the former chairman of the subcommittee, Mr. LoBiondo. 

Mr. LOBIONDO. Thank you, Mr. Chairman. 

10 

I have a couple of questions, Admiral, but before I do that I want 

to just say, after having the opportunity to chair this subcommittee 

for 12 years, the budget that was sent to us is so separated from 

reality. 

I am a little bit concerned. I am agreeing with Mr. Garamendi 

here. I don’t know how much we agree on. But this is so shortsighted. And this is out of your lane. You have got to take what 

comes down from the top. But for the record, do we not remember 

what happened on September 11? Do we not remember on September 10 the Coast Guard had no homeland security really to deal 

with? And on September 11, everything was ramped up and we 

knew that we had to have the Coast Guard prepared? And yet we 

are spending money in areas, as Mr. Garamendi said, that nobody 

can keep track of. And the few dollars extra that we could use for 

the Coast Guard to be prepared, the most underrecognized and 

underappreciated Service that there is, this is absurd. It is totally 

absurd. Almost a 50-percent cut in acquisitions, takes us back to 

the 1990s? What are we doing? When will we wake up? I had to 

get that off. 

Admiral, in the last session, Mr. Larsen and I teamed up together and saw reform of the Coast Guard acquisition, and we 

worked with the Service to really get things back on track. I think 

we have made a great deal of progress. But I remain concerned 

that a few of the assets delivered to date are still not performing 

anywhere close to expectations. For example, one of the reasons 

Deepwater proposed to replace 12 High Endurance Cutters with 

the National Security Cutters was that the Service would be able 

to get significantly more days away from the port with the NCS. 

Central to doing so was a crew rotation concept which the Service 

has yet to formalize. 

The Coast Guard and Maritime Transportation Act of 2012—Mr. 

Garamendi, this may answer one of your questions—prevents the 

sixth National Security Cutter from becoming ready for operations 

until the Service submits to Congress how the first three National 

Security Cutters will achieve the goal of 225 days away from home 

port. What is the plan for achieving 225 days away from home 

port? And when will you implement that plan? 

Admiral CURRIER. Thank you, Mr. LoBiondo, for that question. 

And also, thank you for your support over the years for our acquisition processes. You have been a great champion of our cause, and 

we truly appreciate that. 

To get to the crew rotation concept, which is what you are describing, the baseline of the legacy assets, the 378-foot cutter, was 

185 days away from home port. The goal of the new program, the 

National Security Cutter, was 225 in some documents, 230 in other 

documents for the goal of days away from home port. 

We bring new cutters on, a new class of cutters. We have had 

a few growing pains, but not anything that is out of the norm for 

the Navy’s experience or our previous experience. So where we are 

today is we will home port three cutters or we have home ported 

the first three cutters in Alameda, California. Those cutters are 

scheduled for dry dock availabilities over the next couple of years 

to do some configuration enhancements that were identified later 

in the class that need to be retrofitted, to do some maintenance, 

11 

and basically we will be in dry dock for a period of time. Those are 

the three cutters. 

Once those cutters are out of dry dock, we will have them in Alameda. We will marry up the extra crew. We will have the shore 

plant facility to run a full-scale evaluation on CRC. The goal of 

CRC is 230 days away from home port. In the interim, until then, 

the cutters that exist, the National Security Cutters will average 

across the fleet 210 days away from home port. So we are 20 days 

short of the eventual goal now. 

In the interim, until 2017, late 2017, which is when we will be 

able to fully implement the evaluation of CRC, we will be 210 days 

until then and then 230 days following. So the end of 2017 is when 

we will fully implement the 230-day crew or cutter requirement. 

Mr. LOBIONDO. Well, 2017 is a long ways off. 

Mr. Chairman, I have another related question from the Inspector General. But recognizing my time, I will wait for round two. 

Mr. HUNTER. Thank the gentleman. 

Mr. Larsen is recognized for 5 minutes. 

Mr. LARSEN. Thank you. 

Admiral, section 220 of the Coast Guard Maritime Transportation Act of 2012 requires the Commandant to maintain the approved program of record for the acquisition of 180 RB–Ms unless 

the Commandant transmits to the committee documentation justifying a smaller acquisition. And as you know, the budget outlines 

a smaller acquisition, but we haven’t received the justification for 

that smaller acquisition, the one that we specifically asked for. 

So have we missed that? Has the Coast Guard submitted the justification as it requires? And if we have not, when will we receive 

that written justification? 

Admiral CURRIER. Thank you, Mr. Larsen, for that question, and 

also for your support over the years as well. 

As you know, the RB–M program is fantastically successful for 

us. It had a long developmental—— 

Mr. LARSEN. I would argue right now it is only 17⁄18 successful. 

Admiral CURRIER. Say again? I am sorry. 

Mr. LARSEN. It is only 17⁄18 successful. That is, you have stopped 

acquisition at 170 when we told you 180. 

Admiral CURRIER. Yes, sir. I will be happy to answer that. 

Mr. LARSEN. Yeah. 

Admiral CURRIER. We have gone back and we have revalidated, 

because of the capabilities of this small boat, against our in-shore 

threats and vulnerabilities. And we feel that due to the capabilities 

and capacities of this boat, which far exceed what we expected, 

that we feel, given the tough choices we are forced to make in this 

budget environment, that 170 is the proper number. That has been 

agreed to by our Assistant Commandant for operations, who sets 

the requirements for the Service. That will be coming forth in the 

acquisition program baseline review for the RB–M, which is in 

process now. 

Mr. LARSEN. When do we expect to see that, though? 

Admiral CURRIER. I will have to get back to you for the record 

on that, sir. 

[The information follows:] 

12 

The revised Response Boat-Medium (RB–M) Acquisition 

Program Baseline Review is in internal routing/clearance 

within the Coast Guard with approval and forwarding expected during the fourth quarter of 2013. 

Mr. LARSEN. And I appreciate it. You and your team, it has been 

great working with the subcommittee here over the last several 

years to get things in order. And I do appreciate that. It just seems 

to me that if we don’t get that justification report that we had 

asked for in the 2012 act until after you have fully completed the 

acquisition of 170 and terminated the program, that starting the 

program over again to get the additional 10—or more if the committee so decides—we will have all the startup costs, again, adding 

more to the program. So it can be seen in my eyes that you are 

terminating a program before we get the justification report, and 

then it is too late to go to 180. Do you see how I can see that? 

Admiral CURRIER. Yes, sir. I see that. And I could do two things. 

First of all, get back for the record, and you in particular, on the 

projected delivery of the acquisition program baseline change. And 

then I will get you preliminary documentation from our operations 

directorate that states the clear justification for 170. So you can review that in advance. 

Mr. LARSEN. The sooner the better. 

Admiral CURRIER. Yes, sir. 

[The information follows:] 

The Coast Guard has reanalyzed the Response Boat-Medium (RB–M) fleet size and determined that 170 boats will 

be sufficient to meet the operational need. A revised RB– 

M Acquisition Program Baseline (APB) is in routing within 

the Coast Guard with approval and forwarding expected 

during the fourth quarter 2013. 

Mr. LARSEN. Great. Thanks. 

On the Arctic, with regards to the Arctic policy strategy that you 

released last month, indicates a need for increasing maritime domain awareness in the Arctic. And what sort of resources does the 

Coast Guard plan on acquiring to improve that domain awareness 

in the Arctic? 

Admiral CURRIER. Domain awareness in the Arctic is going to be 

a partnership effort. There is not going to be any unilateral organization service agency that is going to be able to come up with the 

resources to exert domain awareness or a realtime picture of what 

is going on in the Arctic. But in combination with the State of Alaska, with NOAA, with our partner component agencies, and the Department of Defense, I am confident—and I can’t discuss it higher 

than the M-class level—but I am confident that we can demonstrate today a high level of maritime domain awareness in the 

Arctic. So I think we are on a good track with that. 

Mr. LARSEN. Now that you have the strategy, I know that the 

DOD has its strategy. In my office, we are going to put more time 

into looking at what it takes to implement that strategy. And we 

look forward to working with you on that. 

13 

Then finally on Offshore Patrol Cutter, OPC, can you give me yet 

and the committee yet an exact date when you will down-select 

from eight to three? 

Admiral CURRIER. Yes. We will down-select to three by the end 

of this fiscal year. The target is the end of this fiscal year. And 

then that will be for a preliminary design contract. 

Mr. LARSEN. Right. 

Admiral CURRIER. And then there will be another year or so before we do the actual selection of the single cutter that will be the 

OPC. 

Mr. LARSEN. Right. 

Admiral CURRIER. So the end of the fiscal year will be the contract down-select for three candidates that will produce preliminary 

contract design. And then a year later—and that is a softer date— 

will be the actual award of the contract for the Offshore Patrol Cutter. 

Mr. LARSEN. So if I may, Mr. Chairman, so the end of the fiscal 

year is a hard date? 

Admiral CURRIER. It is a target, sir. 

Mr. LARSEN. OK. 

Admiral CURRIER. And it is in good faith. I can’t tell you it is a 

hard and fast date. But indications are at this point that we will 

meet that target. 

Mr. LARSEN. Yeah. OK. Thank you. 

Thank you, Mr. Chairman. 

Mr. HUNTER. Thank the gentleman. 

I would like to welcome and recognize the newest member of the 

subcommittee, from South Carolina, Mr. Sanford. 

Mr. SANFORD. No questions. 

Mr. HUNTER. No questions. 

Ms. Hahn is recognized for 5 minutes. 

Ms. HAHN. Thank you, Mr. Chairman, Ranking Member 

Garamendi. Really appreciated the remarks that have been coming 

out of this committee this morning. I, of course, am one of those, 

since I represent the Port of Los Angeles, which is right next to the 

Port of Long Beach, the largest port complex in this country, I have 

long said the Coast Guard is certainly, you know, the line of defense when it comes to our Nation’s coasts and waters. 

But for me, particularly, the port complex, I still am one, which 

I will always go on record saying, I believe our Nation’s ports are 

still one of our more vulnerable entryways into this country. I have 

never been happy with the fact that, even though Congress passed 

a law after 9/11 to inspect our containers 100 percent, we are nowhere close to that. We have now all sort of just decided to accept 

the fact that we are inspecting 2 to 3 percent of our containers. 

And we are more of this at-risk, the layered strategy of defense, 

which makes me uncomfortable. We have 5,000 men and women 

that work on our docks on a daily basis. There are about close to 

a million people probably just close to the proximity of Long Beach 

and the L.A. ports. If there was something to happen at that port, 

loss of lives, but certainly would absolutely disrupt this Nation’s 

economy and potentially the global economy if something happened. 

14 

So I am all about really completely, I hope we can increase the 

funding for our Coast Guard men and women who we really do depend on to protect us. 

You know, last time we had a committee hearing with my friend 

Peter Neffenger, vice admiral—he used to be the captain of the 

Port at Los Angeles—he testified that the Coast Guard’s cutter 

fleet was approaching between 40 and 50 years. And because of its 

age, it was becoming less reliable and suffering more casualties, 

forcing the Coast Guard to cut down on its patrol hours over the 

last 5 years. In fact, according to a report by the Inspector General 

of the Department of Homeland Security, patrol and flight hours 

have decreased somewhere between 8 and 12 percent. 

So can you talk to this committee a little bit about your aging 

fleet and how that has reduced the Coast Guard’s operational capacity and how sequestration might, on top of that, added to that 

problem, and how does that impact you? 

And I will throw in my other question. You know, I am very concerned about the Panga boats that are a huge threat, certainly out 

on the west coast. Unfortunately, we lost a great Coast Guard 

member when the Halibut was rammed by a Panga boat, Chief 

Petty Officer Terrell Horne. I am really worried about that. I am 

worried about that from a security standpoint, its human trafficking potentials, drug potential. And let me know, if you can tell 

this committee what our strategy is in light of everything to address that issue. 

So both those. Your aging fleet, sequestration, and can you give 

us some comfort on your strategy for the very dangerous Panga 

boat epidemic that is rising. 

Admiral CURRIER. Thank you for those questions, ma’am. 

I will start with the aging fleet. We have three classes of cutter, 

basically. We have a patrol boat which is being replaced by the 

FRC. The OPC Medium Endurance Cutter class, and then the larger class of cutter, the offshore, the National Security Cutter. And 

where our gaps are, as I have explained, really are tiered. We are 

in good shape in shore with the patrol boats. And you see that 

every day in Los Angeles, L.A./Long Beach. We are in OK shape 

for now for our medium class of cutter, which the OPC is designed 

to replace. 

Where our gap is in our larger ships, the ones that patrol the 

Bering Sea, offshore CONUS, the eastern Pacific, the western Caribbean, drug engagement, migrant engagement. This is where our 

most serious gap is at this point. 

Our aviation fleet is in reasonable shape. And I will hopefully 

talk later a little bit about the C–27 and what that might mean 

to us. 

As we move into the budget environment that we are in, we continue to focus on our greatest area of risk from a capabilities perspective, and that is the National Security Cutter, funding that 

ship, which is a fundamental enhancement. It is 8 ships for 12 

ships, the older ones that we are laying up, but it is a huge enhancement in capability. As I explained before, the Bertholf’s case 

with the UAV and the helicopter and the fast interdiction boat the 

Over-the-Horizon RB, and the C4 capability is just something we 

have never had before. It enhances our effectiveness. 

15 

But that is where the gap is. The gap is in the offshore. And the 

National Security Cutter is the key to that. The Offshore Patrol 

Cutter will be the next critical acquisition, and we have talked a 

little bit about that. 

Sequestration effect on mission. I would never tell you that sequestration would have an effect of being a drop in missions, like 

we are going along fine and then all of a sudden we are not doing 

a mission. It is an erosive effect. All right? 

I will give you an example. While we will never compromise our 

ability to do search and rescue and the most critical law enforcement missions, there is a reduction in our ability to put steel on 

target for certain areas like counternarcotics in the eastern Pacific. 

We have less ship days, less aircraft days, fewer days down there. 

And they are part of a system, they are intertwined, because you 

have to have a surface asset to do the interdiction. 

My concern over the long term in sequestration is that that erosive effect will start to get to some of those missions that we have 

been doing and we will see a reduction in our ability to interdict 

drugs and criminal activity and even migrants to a certain extent. 

To get to southern California, our number one operational priority now is an operation called Baja Tempestad, which is run between L.A. to San Diego, OK, because that is where we see the 

Panga threat. That Panga threat actually you have seen landings 

as far north as Monterey, which is amazing considering it is an 

open boat. So what we have done is, we have put a block down 

there with our assets in leadership of component agencies like Border Patrol, Customs and Border Protection, the local, State, and 

Federal law enforcement agencies down there, and I think that 

focus is showing great yield. We are interdicting. We are stopping. 

Some are getting through. But I think Baja Tempestad is a real 

success story, and it shows not only our agility but the agility of 

the Department of Homeland Security to put a block in place 

where there is an emerging crisis. 

As they become more effective in shutting down the land border, 

you are going to see the end run in the maritime because there is 

little resistance to that. And it is incumbent on us to make sure 

that we allocate resources accordingly to do the block there. And 

it also is the case on the Texas side, to be perfectly honest, Brownsville. 

So I don’t think sequestration to this point has affected Baja 

Tempestad, but it is affecting our overarching ability to put steel 

on target for some of these mission areas. 

I hope that answers your question. 

Mr. HUNTER. The gentlelady’s time has expired. 

Like to recognize Mr. Young for 5 minutes. 

Mr. YOUNG. Thank you, Mr. Chairman. I will make this short. 

And I do apologize for being late. 

Admiral, I see in your budget you have got $8 million acquisition 

funding to initiate a survey and design activity for a new polar icebreaker. But that was in 2013. Now in 2014, I see there is only $2 

million. It is my understanding the Coast Guard’s 5-year capital investment plan included an additional $852 million for fiscal year 

2014 for acquiring the ship. I was told that the Coast Guard anticipated awarding a construction contract for that ship within the 

16 

next 5 years and taking delivery of the ship within a decade. Are 

we still on the track for the 5-year program? 

Admiral CURRIER. Yes, sir, we are. And I would say that the acquisition construction of an icebreaker first of class, only of class 

likely is a very complex undertaking. 

Mr. YOUNG. Don’t take too long to answer these questions. I 

want to ask you a question. Admiral Papp and I have discussed 

this for years. 

Admiral CURRIER. Yeah, we are on track. 

Mr. YOUNG. In 1980, we had the last study about leasing the vessel. Because I still don’t think Congress is going to appropriate a 

billion dollars, approximately a billion dollars to build an icebreaker. I mean, that is something I would like to have a request, 

maybe I will request the Coast Guard to look into the possibility 

of leasing a vessel that is American built, because we need those 

icebreakers in the Arctic. You know, we had the Operation Arctic 

Shield. You did what you had. Less iron on the ground. 

But the Arctic is the future. And we are way behind. I can’t get 

people to understand that. But I can see this Congress at this time 

and a later time appropriating a billion dollars to build an icebreaker. We did this once 38 years ago with the Polar Star and I 

think the Polaris and the Healy. Which reminds me, Admiral, where is the status of the Polaris 

and the Polar Star now? Are they totally scrapped? Or are they 

going to be fixed? Are they going to be operational? 

Admiral CURRIER. Polar Star is underway as we speak. Just finished refit. It is fit for sea and is actually going to the ice to get 

some experience for the crew in the northern tier before they deploy to McMurdo next year. The Polar Sea is in caretaker status. 

It is cold iron, we would call it called, tied to a pier in Seattle, and 

we are trying to determine what the future is for that ship. The 

Healy is a full-up midlife ship. It is a science ship, as you know, 

and is executing its scheduled missions. 

Mr. YOUNG. Well, again, have you looked, has the Coast Guard 

looking at the refitting cost of the—I believe it is the Polaris— 

versus waiting now, according to this, 15 years before we have an 

icebreaker at sea? 

Admiral CURRIER. Well, we have—the Healy is midlife. We have 

got a long-term availability for her. The Polar Sea or the Polar 

Star is—got 7 to 10 years of life left in her, and the Polar Sea— to refit the Polar Sea, I think that was one of your questions. 

Mr. YOUNG. Yes. 

Admiral CURRIER. Would be about 3 years and about $100 million to bring that from coal iron back to a 7- to 10-year life left. 

Mr. YOUNG. What I am trying to get across, according to the 

schedule, the 5-year schedule and a decade, that is 15 years, at 

least, and that is probably optimistic if you build a new ship, and 

I would like to have the Coast Guard look at the possibility of getting all three of the older icebreakers operational so they can be 

dispersed in the Arctic, and secondly, look at the cost-benefit ratio 

of a icebreaker that could be leased at a cheaper rate, I believe, 

than you can getting one built and get it in the field sooner. Because I really think, China is all up there, as you know, and Russia 

is up there. Everybody is fooling around in the Arctic but the 

17 

United States, and I just think it is time that—and it is our responsibility to fund you, but I think it is time that the Coast Guard 

maybe think out of the box a little bit, take those three ships, get 

them operational, and make sure they can do the job until, if you 

are going to build one and we appropriate the money for it, or you 

lease or it, or whatever it is, so we can have a full force of Arctic 

activity up there, because like I say, China is up there. 

I don’t know whether you have done this or not. I am about out 

of time. Have you looked at the type of vessels now are trespassing 

across that Arctic area in the Northwest Passage, what they are 

carrying? 

Admiral CURRIER. Yes, sir. We have a pretty good awareness of 

what is going on up there. On the Russian side, the North Sea 

route they call it, there is all kinds of activity over there. On our 

side, it has been generally to mineral exploitation in Alaska or the 

offshore drilling. But there is also cruise ships and some other 

things that are going on up there, ecotourism, and we have full visibility of that. 

Mr. YOUNG. All right. My time is up, but just, you know, I would 

appreciate it if we maybe think out of the box and I know I have 

had this argument with every admiral for the last 40 years. I know 

you like to own steel, but sometimes it is not very efficient. 

Thank you, Mr. Chairman. 

Mr. HUNTER. Thank the gentleman from Alaska. 

Mr. Garamendi is recognized for 5 minutes. 

Mr. GARAMENDI. I have great confidence in the gentleman from 

Alaska taking care of the ice cutter—the icebreakers. If only we 

could give you a opportunity for a, maybe—yes, we would have to 

change the rules, wouldn’t we, so that you could have your own little program up there. 

Mr. YOUNG. Oh, I am willing to secede from the Union right now 

for an earmark. 

Mr. GARAMENDI. And then you could be emperor of the North. 

I would like to move to the aircraft issue, and specifically, most 

of us on this committee also serving on the Armed Services Committee, so the issue of the C–27 comes up, and if we could have a 

discussion about the C–27, the acquisition for the Maritime Patrol 

Aircraft program seems to be moving from acquiring a new plane 

to acquiring the C–27s. 

Where are you with the C–27s? What is the status of these negotiations with the Air Force? We can probably have something to do 

with that if you are basing this whole program on the C–27s. Let’s 

talk about it. 

Admiral CURRIER. OK, sir. At the risk of giving too long an answer, I apologize in advance, but—— 

Mr. GARAMENDI. Take your time. 

Admiral CURRIER. Our program of record was for the HC–144, 

which is a CASA is the name of the aircraft. We have 18 of them 

funded. We have 15 delivered, and we are—we have funding for 18 

aircraft, 17 mission pallets, so you have got basically a cargo aircraft that in it has a very sophisticated sensor package. We were 

forced—would be forced to take a strategic pause in that acquisition in fiscal year 2014, and subsequently we would have to re-exVerDate Aug 31 2005 14:54 Jan 08, 2014 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\CG\6-26-1~1\81676.TXT JEAN
18 

amine the affordability of the aircraft, vis-a-vis, the whole acquisition portfolio. 

What became available or likely will become available is the C– 

27J, which is a cargo aircraft that the Air Force operates that is— 

there are 14 in existence and 7 being delivered. The NDAA, last 

year, carved out seven for the Forest Service for firefighting activity, and we feel that leaves 14 of these aircraft potentially available 

for the Coast Guard, and it would be a mil-to-mil transfer. In other 

words, it is not like transferring to a civilian agency. It is much 

easier. You sign basically a form, and it transfers to our Service. 

It comes, they are very low time airframes, actually was a finalist candidate for the MPA originally, OK. It comes with SATCOM, 

radar, some of the things that we need to do our jobs. There are 

a couple of minor—some sensors that would have to be added to 

the aircraft, but we will be able to use it right away. So this is 14 

aircraft that, depending on how many we get, could be up to $750 

to $800 million cost avoidance if we are able to execute this deal. 

Where it is now, it is in the Air Force’s court. We are on record. 

The Secretary Napolitano talked to Secretary Hagel. We are on 

record for 14 to 21. If we took all of those aircraft on, we would 

probably stop our acquisition of the MPA, focus on operationalizing 

these aircraft and have that class of aircraft bought out, so—— 

Mr. GARAMENDI. The current acquisition program is for what 

kind of plane? 

Admiral CURRIER. The current—— 

Mr. GARAMENDI. And who makes it? 

Admiral CURRIER. It is called a CASA the generic term for it, 

HC–144, twin-engine transport-type aircraft with an embedded 

sensor package. The original program of record was 36. 

Mr. GARAMENDI. Right. 

Admiral CURRIER. We bought or funded for 18. 

Mr. GARAMENDI. Basically halfway there. 

Admiral CURRIER. So we would stop at halfway, we would take 

on the C–27 to complete that capabilities requirement. 

Mr. GARAMENDI. Right. 

Admiral CURRIER. What it would give us is two classes of aircraft 

in the medium range. 

Mr. GARAMENDI. Where I am going, I understand, you would 

have two different airplanes you would have to maintain, so you 

have got some issues having to do maintenance and so forth. There 

is going to be a kickback from whoever is manufacturing that 

plane, the CASA. Who manufactures the CASA? 

Admiral CURRIER. It is made by a company called Alenia, and 

they are an overseas company, but—— 

Mr. GARAMENDI. It is a foreign company that is manufacturing 

the CASA. 

Admiral CURRIER. Oh, no, CASA, the original aircraft is made by 

a European company. I thought you were asking about the C–27J. 

They are also made—— 

Mr. GARAMENDI. No. They are on the ground or flying, one or the 

other. I just wondered where the kickback comes. When somebody 

loses 18 aircraft, we hear about it, but it is a foreign company that 

does that. Thank you. 

19 

So you are going to save some $700 to $800 million if we carry 

this out. 

Admiral CURRIER. It could be $500 to $750 million or so. 

Mr. GARAMENDI. OK. And what we need—what I need to know 

and perhaps the committee also is, is that is this moving slowly or 

are there speed bumps or other problems that might cause this to 

go off track? 

Admiral CURRIER. I don’t foresee any at this point. The decision 

has to be made by the Secretary of the Air Force basically and with 

the concurrence of the Secretary of Defense. We have signaled 

strongly that we are ready to accept them at any time. 

Mr. GARAMENDI. My personal opinion, it is a really good idea to 

acquire those, and whatever modifications are necessary, put those 

into the budget so that gets done. 

Admiral CURRIER. Yes, sir. 

Mr. GARAMENDI. Potential savings of three-quarters of a billion 

dollars is significant, and I know there is going to be some kickback coming from whoever doesn’t have that contract to manufacture the remaining 18. I think we can handle that. So, if you will 

let us know. I know that, I don’t know, four of us that are up here 

on the Armed Services Committee, and I think we are aware of the 

potential problems here. 

I have no further questions. 

Mr. HUNTER. Mr. LoBiondo is recognized for 5 minutes. 

Mr. LOBIONDO. Thanks again, Mr. Chairman. I have a followup 

question, Admiral, tagging onto the first one, but before I do, I am 

just—I am sorry. I got to continue my rant a little bit about this 

budget. 

What I don’t think most people understand is in addition to the 

acquisition problem that we have, that we are decimating the 

Coast Guard’s leadership for the future. I have the honor of representing the only Coast Guard recruit training center in the Nation. For years and years and years, the throughput was about 

5,000 recruits. If I’m not mistaken, I think this year it is going to 

be about 2,000. I think it is damaging morale, and I think the officer corps that we rely on for the experience and the expertise and 

the motivation for the younger ones is just going to be gutted here, 

so from every aspect we look at this these are intangibles that you 

can’t measure. These are intangibles that you can’t read on a 

spreadsheet somewhere about what it is going to mean, so I don’t 

know what we can do about this, but I am pretty cranked up over 

it and I am—so it won’t be the last I have to say. 

Admiral, the second part of the question, the first part was about 

the days at sea. Both the DHS Inspector General and the GAO 

have raised concerns that the National Security Cutters delivered 

to date do not meet planned capability. 

Now, when we talked about how these would be laid out, we focused a lot on capability because we knew we would have one shot 

at doing this right. They have noted that without Unmanned Aircraft Systems on the National Security Cutters, the National Security Cutters are no more capable than the 40-year-old High Endurance Cutters that they are replacing. 

20 

So, as we are squeezed down with acquisitions, it is important 

that what we do have out there in acquisitions have the maximum 

capability. 

What is the status of the Service’s plans to acquire UAS or other 

capability for the National Security Cutter and fill the current capability gap and when will the National Security Cutter be outfitted with UAS? 

Admiral CURRIER. Thank you, sir, for that question. Specifically 

to the National Security Cutter, we have UAS on board the 

Bertholf now. We are running a test. That is the ScanEagle. It is 

a small lightweight but very capable UAS that is being tested 

today as we speak. Earlier, I described a case where they had great 

success. 

The second UAS that might conceivably be used with a National 

Security Cutter is the Navy Fire Scout program, which we are very 

close to. As you know, sir, originally we had our own program for 

UAS for the National Security Cutter, but about 6 years ago we decided to go with the Navy to let them do the science on this thing. 

They have proved the concept of this thing in Afghanistan and in 

theater in the Persian Gulf, and I hold great promise that as it is 

developed we will be able to adapt it to the National Security Cutter. I don’t have a time for you because we don’t control the program. In the interim, we will use that small, lightweight, highly capable UAS package on the National Security Cutter and it will fill 

probably 70 percent of the mission that we would have—we will 

eventually use Fire Scout for. 

The third thing we are doing UAS-wise is the Guardian Predator 

project we have going with CBP. We are supporting them. General 

Atomics makes that aircraft. I have met with them, their chief engineer, to talk about what marinerzation means and what tailoring 

that aircraft would require for Coast Guard use, very productive 

meeting, and I think that we are eventually going to have that 

class of UAS supporting the cutter offshore as well. So, there is 

progress being made, sir. 

Mr. LOBIONDO. Mr. Chairman, if I could, I think that the capability component of these National Security Cutters is key and I 

just hope that the Coast Guard isn’t using the Navy, sort of, to 

slow walk what we are able to do here. There ought to be some way 

we can try to have some inquiries or get this jacked up, because 

if you have no idea, then that means we are years away, and I just 

don’t think that is acceptable. 

But I thank you and I yield back. 

Mr. HUNTER. Thank the gentleman. I have a question for the 

record, and I will just, just if you could update us on the Response 

Boat-Smalls, that program, we talked about having a 7-— you 

talked about an 11-foot RB and a smaller RB; is that right? 

Admiral CURRIER. Well, sir, we are talking about a little bit of 

two different things, OK. The 7- and 11-meter RBs are the cutter 

boats. 

Mr. HUNTER. Meter RBs. 

Admiral CURRIER. They go on the ships, and we are going to go 

to two classes of them for all kinds of reasons, economy, effectiveness of maintenance and all that. The RB–S is actually the in-port 

boat, and we are evaluating the fleet size on them and we are reVerDate Aug 31 2005 14:54 Jan 08, 2014 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\CG\6-26-1~1\81676.TXT JEAN
21 

capitalizing them as is required. Twenty-five feet long, very successful, you see them everywhere in the United States. So there are 

two distinct classes of boats. 

Mr. HUNTER. Is that program being cut significantly, the Response Boat-Small program? 

Admiral CURRIER. The Response Boat-Small program is not being 

cut as a result of budgetary pressure. We are reevaluating our need 

for the number of those boats based on our experience post-9/11 on 

what we really need to do the port security job, so adjustments to 

that fleet size will be based on operation requirements, not budgetary pressure. 

Mr. HUNTER. OK. Admiral, thank you. Thank you for your service and thank you for your time. There are no further—oh, Ms. 

Hahn you have more questions? I would like to recognize Ms. 

Hahn. We do have a second panel we need to get through as well. 

Ms. HAHN. OK. Thank you. I will be brief. Just a quick change 

of subject because you did touch on it in your statement, and as 

you know, the ineffective handling of sexual assault cases has 

plagued the military recently and there has been a huge push to 

make some major reforms in this area, so obviously, sitting here 

looking at all the men showing up for this hearing, has the Coast 

Guard made any changes to how it deals with sexual assault cases? 

And could you tell us what specific policies has the Coast Guard 

implemented? 

Admiral CURRIER. Yes, ma’am. We recognized this problem about 

a year ago and it became the object of focus for the Service. Subsequent to that, there is a film called ‘‘The Invisible War,’’ which I 

am sure you are familiar with. It has become a banner headline, 

but I will tell you that we have a Service-level strategy, a senior 

executive working group that tiers down into working groups. We 

have overhauled our training, we have overhauled our messaging, 

we have overhauled our system of accountability for not only perpetrators but for commanders that have environments that are perhaps permissive. They are held accountable as well. We are in lockstep with the Department of Defense and the other military services, and we are cooperating with Congress and the Department 

and the administration. Universally, this was held as a problem. 

This behavior is a crime, it is a breach of trust, and we are committed to eradicating this behavior from the Service because it is 

a matter of trust, and as I said in my opening statement, that is 

a priceless attribute that we have in the military. 

Ms. HAHN. Thank you. 

Mr. HUNTER. Does the gentlelady yield back? 

Ms. HAHN. Yes. 

Mr. HUNTER. OK. Admiral, thank you for your time and your testimony and your service. 

Admiral CURRIER. Thank you, Mr. Chairman. 

Mr. HUNTER. I would like the second panel to come forward, 

please. 

Our second panel of witnesses include Mr. Ronald O’Rourke of 

the Congressional Research Service; Dr. Steven Bucci. Did I say 

that right? 

Mr. BUCCI. Bucci. 

22 

Mr. HUNTER. Bucci. Director for Douglas and Sarah Allison Center for Foreign Policy of the Heritage Foundation; and Dr. Lawrence Korb, Senior Fellow at the Center for American Progress. 

Mr. O’Rourke, you are now recognized. 

TESTIMONY OF RONALD O’ROURKE, SPECIALIST IN NAVAL AFFAIRS, CONGRESSIONAL RESEARCH SERVICE; STEVEN P. 

BUCCI, PH.D., DIRECTOR, DOUGLAS AND SARAH ALLISON 

CENTER FOR FOREIGN POLICY, THE HERITAGE FOUNDATION; AND LAWRENCE KORB, PH.D., SENIOR FELLOW, CENTER FOR AMERICAN PROGRESS 

Mr. O’ROURKE. Chairman Hunter, Ranking Member Garamendi, 

distinguished members of the subcommittee, thank you for the opportunity to testify today on Coast Guard acquisition. Chairman 

Hunter, with your permission, I would like to submit my statement 

for the record and summarize it here in a few brief remarks. 

The Coast Guard’s fiscal year 2014 5-year acquisition plan has 

about one-third less funding than last year’s plan. That is the largest reduction in a 5-year plan that I have seen in many years, and 

it has occurred in the absence of any change in the Coast Guard’s 

strategic environment that might substantially reduce Coast Guard 

mission demands. The plan’s average funding level of $1 billion a 

year will likely require the Coast Guard to reduce procurement 

rates, which would increase unit costs, lengthen replacement times 

and possibly compel the Coast Guard to further extend the lives of 

aging platforms. The likely eventual result would be a smaller and/ 

or older Coast Guard with less mission capacity than called for in 

the program of record. 

In this sense, the plan raises a fundamental question for Congress about the Coast Guard’s ability to recapitalize its assets in 

a timely manner and adequately perform its statutory missions in 

coming years. It also raises a potential oversight question for Congress concerning year-to-year stability in DHS budget planning and 

the reliability of DHS budget projections. 

In assessing the Coast Guard’s future needs, it can be noted as 

a starting point that although the program of record force would 

have considerably more capacity than the legacy force, the Coast 

Guard has estimated that the program of record force would nevertheless have substantial capacity gaps for performing six of the 

Coast Guard’s 11 statutory missions in coming years. If funding 

limits lead to a Coast Guard that is smaller and/or older than the 

program of record force, these mission gaps would be greater still. 

It is not clear that past annual amounts of Coast Guard acquisition funding are necessarily the most appropriate guide to what the 

funding level should be in coming years since the Coast Guard has 

entered a period during which it is seeking to replace multiple 

classes of assets that in past budget years were not yet in need of 

replacement. 

A reliance on past funding levels as the sole guide to future funding levels could short-circuit the policymaking process, limit options available to policymakers and hamper their ability to alter 

the composition of Federal spending over time to meet changing 

Federal needs. 

23 

In seeking potential alternative guides to future Coast Guard acquisition funding, comparisons with the Navy are potentially illuminating. These comparisons suggest that if the Coast Guard’s acquisition account were made proportionate to Navy procurement 

funding, the account might total about $3.5 billion a year. That figure might be discounted to account for the expensive platforms procured by the Navy. Discounting it by a third or a half, for example, 

would produce a figure of $1.7 to $2.3 billion a year for the AC&I 

account. The Coast Guard for its own part has testified that recapitalizing the Service’s assets on a timely basis would require up to 

$2.5 billion a year. A level of $1 billion a year, the Coast Guard 

has testified, would almost create a death spiral. 

The Navy makes substantial use of multiyear procurement and 

block buy contracting to reduce ship and aircraft procurement 

costs. The Coast Guard, in contrast, is not using these contracting 

mechanisms. The difference between the Navy’s substantial use of 

multiyear procurement and block buy contracting and the Coast 

Guard’s nonuse of these mechanisms is striking. The nonuse of 

these mechanisms by the Coast Guard in past years may in some 

cases represent lost opportunities for reducing Coast Guard acquisition costs. 

Moving forward, current Coast Guard programs that might be 

considered candidates for multiyear procurement or block buy contracting include the NSC program, the OPC program and the FRC 

program. 

These points lead to a number of potential options for Congress. 

I will just mention four. One would be to encourage or direct DHS 

to program a certain minimum amount of funding each year into 

the AC&I account. Another would be to provide the Coast Guard 

with greater autonomy from DHS in determining the funding level 

for the AC&I account. A third would be to encourage or direct DHS 

and the Coast Guard to use multiyear procurement and block buy 

contracting where appropriate, and fourth would be to reduce the 

Coast Guard’s statutory missions to narrow the future potential 

gap between Coast Guard mission requirements and projected 

Coast Guard capacity for performing them. 

These options underscore the point made earlier, that the fiscal 

year 2014 plan raises a fundamental question for Congress about 

the Coast Guard’s ability to recapitalize its assets in a timely manner and adequately perform its statutory missions in coming years. 

Mr. Chairman, this concludes my statement. Thank you again for 

the opportunity to testify, and I look forward to the subcommittee’s 

questions. 

Mr. HUNTER. Thank the gentleman. 

Dr. Bucci is recognized. 

Mr. BUCCI. Mr. Chairman, Mr. Ranking Member, Members, I 

thank you for having me here. I will let you know the comments 

I make are my own and not to be construed as official positions of 

the Heritage Foundation. 

Prior to joining the Heritage Foundation, I did spend 30 years as 

a military officer in the Army Special Forces and then was a Deputy Assistant Secretary of Defense for Homeland Defense where I 

was DOD’s plug into the Department of Homeland Security and 

worked extensively with the Coast Guard. 

24 

I really want to thank you for the opportunity to be here, and 

I am not going to be redundant with my colleagues on some of the 

specifics, and I believe the committee is probably just as expert as 

I am on many of these details, but I have to tell you, the Coast 

Guard is a key natural security asset. It is not a secondary force. 

It is one of the key players in defending our country, and right 

now, regardless of what we say or do here, they are being given an 

expanding mission set in the midst of contracting assets and resources. 

The Coast Guard, to their credit, uses imagination and innovation to accomplish the mission on a pretty regular basis. They also 

have not yet learned how to work the Washington system, asking 

for twice as much as you think you need because you know you are 

only going to get half of that. They actually ask for what they think 

they might be able to get by with and then it still gets cut in half. 

The Coast Guard is never more in character as a military organization than at budget time. They get their orders, they are given 

their assets, they salute and then they go out and try and do their 

mission or die trying, and I think it is incumbent on the Congress, 

particularly, because unfortunately, I think the administration 

doesn’t seem to get this. There is a lot of precious young men and 

women out there who are putting their lives on the line in vessels 

and aircraft that are in many cases older than they are, and while 

that may be OK in some situations, the ones the Coast Guard goes 

into, that is not an acceptable situation. 

I will touch on one specific thing, not to pile on with Mr. Young 

too much, but with the icebreaker fleet. The Coast Guard study 

says for them to operate in the Arctic and in Antarctica, they need 

three medium and three heavy icebreakers. Right now they have 

got the one medium and the two heavies, which frankly, don’t 

work. I think we should go beyond his idea of leasing icebreakers 

and give them an exemption to the Jones Act and let them lease 

some standing icebreakers that are not U.S. made because we really need to have this capability. It is embarrassing, not too different 

than riding on the Russian’s rocket ships to get up into space now, 

that we have to ride behind Russian icebreakers to resupply the 

McMurdo Research Station in Antarctica. I just find that somewhat 

ironic. 

Right now, Congress, if it does not act to correct the chronic 

underfunding of the Coast Guard’s fleet revitalization plan, we are 

going to continue to ask those young men and women to put their 

lives at risk while they protect our country. The maintenance costs 

of this aging fleet are getting way out of hand and are going to 

suck the air out of the very small revitalization funding we already 

have, and that has to be turned around. 

The Coast Guard continues to perform its missions admirably, 

and they will find it increasingly difficult to keep up that pace as 

their assets begin to deteriorate further. So I would ask the Congress to fulfill its constitutional responsibility to provide for the 

common defense by making a commitment, and I think this committee is making that commitment, to fund them at a level that 

meets the needs of the Service, in some cases in excess of what the 

Service itself is asking for. 

Thank you, and I look forward to your questions. 

25 

Mr. HUNTER. Thank you. Dr. Korb is recognized for 5 minutes. 

Mr. KORB. Thank you very much, Mr. Chairman, Ranking Member Garamendi. I appreciate the opportunity to come. I also appreciate the opportunity, sir, to be on a panel with such other distinguished people. 

My association with the Coast Guard goes back to the 1960s 

when I worked with them as a naval officer off the coast of Vietnam. The interesting thing, they still have a lot of same ships that 

they had back then. I also spent 4 years teaching at the Coast 

Guard Academy. Admiral Papp was there, but he didn’t take a 

course from me, so I guess that is probably one reason why he got 

ahead. 

And I worked with them when I was in the Reagan administration on the War on Drugs and a couple of times when I went to 

Iraq and I saw them working there, and I think that is a key thing. 

People forget just how much they do. They don’t realize that they 

have all of these missions. 

Now, and it has become clear to me that over the years, one of 

their problems is their motto theoretically is ‘‘Always Prepared,’’ 

but their unofficial motto seems to be, ‘‘We can do more with less.’’ 

And if you go back and you take a look, for example, when sequestration came up, Secretary of Defense Panetta said that, if we have 

sequestration, the Navy will be back where it was before World 

War I. If you ask the Coast Guard, they will say, well, give us less 

money, we will just do the best we can. They don’t really, I think, 

make it clear to the Congress and the public the jeopardy they are 

in. 

Now, it has become clear in the testimony today that the Coast 

Guard has some management problems, but they pale in comparison to the Department of Defense. I have in my written testimony, 

which I would like to put into the record, an article by Senator 

McCain on April 26th of this year, and in it he said the Pentagon 

turns ‘‘billions of taxpayer dollars into weapons systems that are 

consistently delivered late, flawed, and vastly over budget—if, that 

is, these systems are delivered at all.’’ He mentions the fact that 

the Air Force alone canceled a weapons system, the Expeditionary 

Combat Support System, after spending a billion dollars. That is 

larger than the whole Coast Guard acquisition budget. 

So what are we going to do? We all agree that they need more 

money. What we need is a unified national security budget. The 

Coast Guard has to be taken into account when the executive and 

legislative branches decide where to allocate scarce resources for 

national security. 

For example, as has been mentioned by Congresswoman Hahn 

and Mr. Garamendi, the whole question about port security versus 

missile defense. If you take a look, what we spent on missile defense since I was in Government, is over $200 billion, and a lot of 

scientists tell us it still does not even work very well. What are we 

spending on port security? And, as Congressman Garamendi mentioned, if I am going to send a nuclear weapon to the United 

States, it is much less likely that I am going to launch a missile 

with a return address. It is much more likely that I am going to 

bring it in through the port. But yet, we take a look at what the 

Coast Guard budget is compared to the Department of Defense, you 

26 

1 ‘‘Rebalancing Our National Security: The Benefits of Implementing a Unified Security Budget,’’ by the Task Force on a Unified Security Budget of the Center for American Progress, can 

be found online at: http://www.americanprogress.org/wp-content/uploads/2012/10/ 

UnifiedSecurityBudget.pdf. 

take a look and you compare the Coast Guard budget to that of the 

Navy in terms of the number of people plus what we spent on procurement. 

The Littoral Combat Ship, which Senator McCain also criticizes 

in this article, it costs more than your National Security Cutters 

and has one-third the range, and yet we don’t get an opportunity 

to make those tradeoffs between the Coast Guard and the other 

armed services. I would like to, with the committee’s consent, to 

put our unified national security budget into the record because we 

go over that over every year to show you could do those things. 1

Now, let me conclude with two other things that the Coast Guard 

needs to do in addition to making these tradeoffs. Number one, the 

Commandant needs to be a member of the Joint Chiefs of Staff. 

When you had the hearing on sexual assault, I noticed he was at 

the table. Get him at the table all the time. They have all of these 

national security missions. You have just added the head of the 

National Guard to the Chiefs, put the Commandant there, too. 

The other thing is, they are going to need the equivalent of a 

Service Secretary in the Department of Homeland Security, someone like the Secretary of the Army, Navy, or Air Force who can 

come here and speak up for them. 

And then the final thing I would say is, Secretary Panetta and 

Secretary Hagel both asked Armed Services Committees to do 

something about the escalating cost of personnel benefits. 

Well, the committees have not done anything about that this 

year, but they also impact the Coast Guard because they have to 

go along with whatever the Department of Defense does. Thank 

you very much. 

Mr. HUNTER. Thank you, Doctor. Thank all of you for being here 

today. Let me ask you, Mr. O’Rourke. Why do you think they 

haven’t done multiyear procurements if they are authorized to do 

so? 

Mr. O’ROURKE. It is a good question, Mr. Chairman. I have asked 

that myself. It is not clear to me why it is not happening. One possible contributor might simply be a lack of awareness of the mechanism. The use of multiyear procurement and block buy contracting 

has grown in DOD in recent years and it could simply be that the 

Coast Guard has not caught up with that. 

Mr. HUNTER. Most shipbuilders do multiyear procurement. 

Mr. O’ROURKE. That is right. In fact, all three of the Navy’s yearto-year shipbuilding procurement programs are now under either 

multiyear procurement contracting or block buy contracting, all 

three of them, and so, as I said in my testimony, the difference between the Navy’s substantial use of these mechanisms and the 

Coast Guard’s nonuse of them is striking. 

Multiyear procurement can save upwards of 10 percent on the 

cost of what you are buying, and especially if we are going into a 

tighter budget environment there is more reason than ever to perhaps consider using them. 

27 

Now, there are reasons why you might not want to use multiyear 

procurement or block buy contracting, and you have to consider 

carefully whether you want to do it or not, but if you decide that 

it is appropriate, it can offer savings at a time when apparently the 

Coast Guard needs those savings more than ever. 

Mr. HUNTER. You also noted that the Coast Guard can successfully, or if it wants to successfully conduct all of its missions, then 

it needs to have—it needs to acquire more boats, more assets. So 

the question then is, if they don’t get the money to acquire more 

assets, what does that mean for its ability to conduct its mission 

and in what way do you think the Coast Guard should change its 

mission set? 

Mr. O’ROURKE. That is right. In fact, I think it is worth remembering, as I mention in my opening statement, that the program of 

record force itself is not capable of fully performing all the Coast 

Guard’s statutory missions as the Coast Guard has estimated. The 

force that would be needed to do that could require up to 60 percent more cutters and up to 90 percent more aircraft than what is 

included in the program of record force. So the POR force is already 

somewhere short of what the Coast Guard has calculated would be 

needed to perform the Service’s statutory missions in coming years. 

If you fall short of the POR force, you are only making those mission shortfalls even greater. Multiyear procurement and block buy 

contracting can, at the margin at least, help the cost Coast Guard 

afford a larger force for a given amount of money. For example, the 

OPC program is currently estimated at $12.1 billion. If you are 

able to save somewhere between 5 and 10 percent of the procurement costs on that program, then you are looking at saving somewhere between $600 million and $1.2 billion, which can go some 

way toward buying OPCs or other platforms that the Coast Guard 

is interested in getting. 

Mr. HUNTER. Thank you, Mr. O’Rourke. 

Mr. Garamendi is recognized. 

Mr. GARAMENDI. Mr. O’Rourke, in your written testimony, you 

spent some time on the C–27. The thing that I am curious about 

is that there is a potential savings here of some three-quarters of 

a billion dollars. Is that savings—and this is a question, I think, 

more for us on our side, but it seems to me that any savings are 

not going to be plowed back into the other acquisition programs for 

the Coast Guard but rather disappear into the black hole of the 

larger budget for the U.S. Government. 

Mr. O’ROURKE. As I look at the Coast Guard’s 5-year acquisition 

plan, it appears to me that the Coast Guard’s budget already banks 

on receiving those C–27s. They have already taken the credit for 

it. You will have an avoided cost if you don’t buy the remaining 18 

HC–144s, so that is like a $40 million or $50 million airplane, so 

that is several hundred million dollars in avoided procurement 

costs, but the Coast Guard’s 5-year acquisition plan already appears to take credit for that by zeroing out the HC–144 line for the 

remainder of the program. The Coast Guard is referring to it as a 

pause, and it is a pause in the sense that they are waiting to see 

whether they get the 14 to 21 C–27s. If they don’t, that requirement rolls back into the Coast Guard’s 5-year plan and you are 

28 

looking at another bill for several hundred million dollars that currently is not reflected in the 5-year plan. 

Mr. GARAMENDI. Thank you. I understand that, and even more 

completely because of your answer, but where I wanted to go is 

that it appears to me that the Coast Guard is getting no credit, 

that is, does not have the ability to repurpose, reuse that $700-plus 

million to fund its other programs. It looks to me like they are simply taking a short—the budget is coming up short even though they 

are shaving $700 million, potentially saving $700 million. 

Mr. O’ROURKE. The removal of the money for the HC–144s represents about one-third of the total reduction in funding that we 

see in this plan versus the 5-year plan from last year. 

Mr. GARAMENDI. Here is—— 

Mr. O’ROURKE. It is about $900 million that they have taken 

away. 

Mr. GARAMENDI. For those of us on the policy side of this, it 

seems to me that we need to provide a significant incentive, in this 

case, for the Coast Guard and perhaps also for other services that 

if they are able to, in this as we see here, find a way to save threequarters of a billion, then they ought to be able to take that threequarters of a billion and apply it to other acquisition programs that 

are short of money. It appears to me that is not the case here and 

therefore there is little incentive, even though the Coast Guard 

seems to be doing it, to find those kinds of savings. 

Just something for us to consider and for you to ponder, given 

your role, so that there is this incentive built into the system that 

save money and then you can use it elsewhere. 

I will let it go at that. 

And I think this is again for the members of this committee that 

serve on the Armed Services Committee, is to make sure that those 

planes are transferred. I mean, we can do that. We have that 

power, transfer the planes, shut up, get on with it, and I would recommend that we do that. 

I want to go to Mr. Korb and your question about a unified budget, which has been the subject of much of what I talked about here, 

is that we are not considering the overall defense or national security. We are looking at it in a segmented and disjointed way, and 

it seems to me to be two ways to get at that. You are suggesting 

one of them, which is the placement of a member of the Coast 

Guard in the Department of Defense’s program; that is, sitting 

there with the other generals and admirals. Good idea. 

There is also another problem, and that is the organization of the 

House of Representatives and perhaps the Senate, which you didn’t 

talk to. This committee—the Coast Guard is specifically in the T&I 

Committee, Transportation and Infrastructure, and therefore disconnected in policy and similarly disconnected in the appropriation 

process. 

Now, we can send a Coast Guard admiral to sit over at the Joint 

Chiefs of Staff, but unless you take the next step, which is the organization of the House of Representatives, it ain’t going to count 

much. 

So, I guess more than anything else, I am really talking about 

us in almost everything I have said today. It is how we view the 

world. 

29 

Mr. Korb, would you care to comment? You chose not to do that, 

and I appreciate your deference to us, but—— 

Mr. KORB. I think both the administration and the Congress 

need to do it. Before we unified the Department of Defense, you 

used to have a committee that dealt with the Navy and another the 

War Department and then you created Armed Services. I think the 

administration needs to take the lead in this through OMB by having a unified national security budget that looks at, if you will, offense, which is the Department of Defense, defense, which is Homeland Security, and development, which is State Department; it 

needs to look at them all together. And we have done it for the last 

8 years. We have taken the amount that the Bush administration 

and now the Obama administration says it wants for all 3, and we 

show how you can get more bang for the buck, if you will, by looking at these things together. And I would suggest that if they take 

the lead, then the Congress, like you have a Budget Committee, 

would have a national security committee that looks at all of those 

things together and suggests some of the trade-offs, some of which 

we have discussed today. And you are not going to go over your 

budget. In other words, we take whatever amount that you put in 

your budget and we say this is a way you can get more security. 

For the money, the average age of Navy ships is like one-third 

of that of the Coast Guard, so at some point you might sit down 

and say, well, maybe we ought to give the Coast Guard a newer 

ship and the Navy one less ship, or you take an aircraft out or 

whatever, whatever it might be, and I think that would help, we 

would get more security for whatever amount the money that you 

are willing to spend. 

Mr. GARAMENDI. Thank you for that. Mr. Bucci, you are from an 

organization known to be fiscally conservative. Could you comment 

on this issue? 

Mr. BUCCI. Well, I—— 

Mr. GARAMENDI. Recognizing that you are not speaking for the 

organization. 

Mr. BUCCI. I do. While I agree in the general principle, I think 

probably a good interim step might be to look at the Department 

of Homeland Security’s budget, which has gone up recently while 

the Coast Guard, which frankly, no offense to any of the other wonderful organizations within DHS, the Coast Guard is by far the 

most efficient and useful and necessary for national defense of any 

of the constituent parts of DHS, their budget has consistently gone 

down. So perhaps before we try and merge the budgets of the Department of Defense with chunks of DHS, we get DHS to sort of 

synchronize their own budget internally and give a little bit more 

of the assets to one of their parts that is really pulling a lot more 

weight than they might otherwise do. 

Mr. GARAMENDI. Just, Mr. Chairman, you have been very generous with my time, but just one final comment. If we would look 

at the Department of Homeland Defense budget, it is boots on the 

ground that seem to be far more important than ships on the sea. 

Am I correct? 

Mr. BUCCI. Right now, given the debate we have been having for 

the last couple of weeks, Congressman, I would say you are absolutely right. 

30 

Mr. GARAMENDI. I yield back the 3 minutes and 6 seconds beyond 

the 5 minutes, Mr. Chairman. 

Mr. HUNTER. Ms. Hahn is recognized for 5 minutes. 

Ms. HAHN. Thank you, Mr. Chairman. 

Mr. Korb, you are speaking obviously, you know, a theme that 

I have been talking about since 9/11, which I think our ports are 

very underfunded when it comes to our homeland security and you 

mention in your testimony that the likelihood of a nuclear weapon 

being smuggled through an American port by an unfriendly nation 

is much greater than facing a nuclear launch from one of these 

countries simply because they don’t want to have a return address 

for fear of a severe response. 

But instead of allocating more resources to our port security, 

Congress increased funding for an east coast missile defense system most experts have described as being wasteful and has cut 

critical port security programs. The Port Security Grant program 

has been cut by 75 percent since 2009, and the Coast Guard saw 

a $300 million cut in the latest Homeland Security appropriations 

bill from its 2013 enacted level. 

You have touched on this a little bit. Just again for this committee and all those who are listening, what are the consequences? 

Not just to our ports, but to our country and possibly to the global 

economy if we fail to adequately address our Nation’s port security? 

I just want to hear it one more time. 

Mr. KORB. Well, as I put in, the consequence would be severe if 

in fact you have someone—it is not just a nation with nuclear 

weapons like an Iran or North Korea. A violent extremist group, 

you know, that could smuggle one in that they got because we 

didn’t control nuclear proliferation, the consequences to the country 

would be severe and then everybody would be saying, well, gee, 

why don’t you do anything about port security. And our point—and 

we have been doing this, you know, since 2004, said look, you just 

tell us how much money you are willing to spend on national security, OK. It was higher, and then after sequestration might be 

lower. Let’s—you can’t buy perfect security but let’s do some costbenefit analysis to make sure that we, you know, get the most bang 

for whatever buck we are going to spend. 

And I understand people are concerned, they want east coast 

missile sites. Well, the head of the Strategic Command is saying, 

well, we don’t need them. Well, if you are going to put money into 

that, why don’t you, instead of putting it into that, put it more into 

port security. I mean, that is the type of thing that we are trying 

to do. And again, because the Coast Guard itself, and you know, 

doesn’t come up, they don’t have a political spokesman like Secretary Panetta saying, oh, my goodness, you got sequestration, we 

will be back to where we were in 1916, nobody pays attention to 

that. They need someone to get out and make the point that you 

are, somebody like a Secretary Panetta or something that can say, 

look, ladies and gentlemen, let me tell you, of course, you have cut 

this by this amount which you just mentioned. This is what you 

are risking. Then I think they would get more political support for 

it, but in my association with them over the years, they don’t do 

that. It is always we can do more with less. 

31 

Well, I told them what I used to teach there, that is what you 

are going to get, and you have got to be more, more dramatic about 

it. And so I think that is what I would urge them to do, and again, 

it is not just the Congress, the administration should do that before 

they send their budget up. Even if you don’t have a national security committee, there should be OMB or someone looking at those 

things together much like we look at the, you know, the four military services together. 

Ms. HAHN. Well, thank you. I know we are always looking at how 

to fund things and trying to find extra or dedicated revenue 

stream. One of the things that, Mr. Chairman, I have suggested 

and something I think we could at least look at is the customs 

money, customs fees that comes into the customs districts. It is 

based on containers and because it is about commerce, but I would 

argue that every container that comes into our ports certainly represents commerce, but they also represent risk. They represent risk 

to security, they represent risk to our environment, they represent 

risk to the infrastructure, whether it is the terminals and the 

wharves or the highways and the bridges when they are being carried to their final destination. We have been using that money, obviously, for other things, just like we have been using the harbor 

maintenance tax for other purposes, but I think we ought to look 

at where this money is actually coming in to our ports, why it is 

being collected and whether or not we might look at trying to redirect some of those funds back to the ports where they are collected 

for the purpose of securing and certainly maintaining the infrastructure for our national security. 

I yield back my time. Thank you. 

Mr. HUNTER. I thank the gentlelady, and also, I would throw in 

there that it is probably, if you are checking cargo on American soil 

it is probably too late. You have got to have this cargo checked at 

its ports as they leave port of origin to come to the United States. 

If there are no further questions, does the gentlelady have any 

further questions? Then I thank the witnesses for their testimony 

and the Members for their participation, and this subcommittee 

stands adjourned. 

[Whereupon, at 11:50 a.m., the subcommittee was adjourned.] 

32 


Insert offset folio 7 here 81676.007

Rep, John Garamendi 

Opening Statement 

House Subcommittee on Coast Guard and Maritime Transportation Hearing 

"Coast Guard Readiness: Examining Cutter, Aircraft, and Communications Necds" 

June 26, 2013 

Mr. Chairman, the subcommittee turns its attention this morning to focus onec 

again on thc status of the Coast Guard's long term program to rccapitalize its aging fleets 

of surface ships and aircraft and to improve its communication and intelligence 

technologies for the challenges of the 21 st Century. 

As we discovered during the subcommittee's April 16 hearing concerning the 

administration's Fiscal Year 2014 budget request for the Coast Guard, we simply arc not 

providing the Coast Guard with the resourccs it needs to fulfill its many missions. 

Failing that, it is folly lor us to believe that the Coast Guard will bc ablc to adequately 

maintain operations, and importantly, to sustain progress in its $29 billion recapitalization 

strategy - the largest such initiative ill the Coast Guard's storied history. 

The prcdicamcnt we find ourselves in is not entirely ofthe Coast Guard's making. 

Nor can it be attributed to anyone nlctOr. And as Admiral Curricr will soon testify, the 

Coast Guard is doing its utmost to wisely utilize the resources appropriated by the 

Congress to address the 1110st pressing prioritics to ensure that the Coast Guard remains, 

Sell/pel' Parallls, always ready. 

But the fact remains, if we continue 011 the samc course we will accomplish little 

but to hollow Ollt the capabilities of our Guardians of the Sea. And the warning signs 

signaling that we are approaehing a tipping point me abundantly clear. 

The Fiscal Year 2014 budget request for the Acquisition, Construction and 

Improvements Accollnt is only $909 million. This amount is $600 million less than thc 

funding level authorized in last year's Coast Guard and Maritime Transportation Act, and 

is $l.t billion less than the $2 billion funding level recommended for the AC&I account 

by the Navy Leaguc of the Unitcd States in their 2013 Maritime Policy Statement. 

Additionally, we are seeing certain acquisition programs prematurely terminated. 

and the timetables lor other programs pushed further out into the future. Moreover, the 

Coast Guard now Hlccs an immincnt gap in operational capability as its aging legacy 

asscts are pressed tllr beyond their service lite expectancies and lIew assets are late in 

delivery. 

MI'. Chairman, this is an important hearing, pcrhaps the most important hearing 

you will convene all year, The prospect of a "hollow" Coast Guard should be motivation 

enough to act. 1 Jookr(OJ;lward to hearing from ollr this morning on how wc 

might best ayoid sllchicl!l 11llclesirab)e outcome. 

',II II 

/

." .. .f; , . > {-' 
33 


Insert offset folio 8 here 81676.008

U. S. Department of 

Homeland Secul1ty 

United States 

Coast Guard 

Commandant 

United States Coast Guard 

TESTIMONY OF 

VICE ADMIRAL JOHN P. CURRIER 

VICE COMMANDANT 

ON 

"COAST GUARD READINESS: 

2100 Second Street. S.W. 

Washington. DC 20593-0001 

Staff Symbol: CG-0921 

Phone: (202) 372-3500 

FAX: (202) 372-2311 

EXAMINING CUTTER, AIRCRAFT, AND COMMUNICATIONS NEEDS" 

BEFORE THE 

HOUSE TRANSPORTATION AND INFRASTRUCTURE 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION 

JUNE 26, 2013 

INTRODUCTION 

Good morning Chainnan Hunter, Ranking Member Garamendi and distinguished members of 

the Subcommittee. On behalf of the men and women of the U.S. Coast Guard, I thank you for 

your oversight of and advocacy for the Coast Guard. I am honored to appear before you today, 

as I did a year ago, to update you on our continued efforts to recapitalize our aging cutters, small 

boats, aircraft, and Command, Control, Communications, Computers, Intelligence, Surveillance 

and Reconnaissance (C4ISR) systems. 

Over the last year, we have laid the keel on the fourth National Security Cutter (NSC), begun 

construction on the fifth NSC, and awarded the production contract of the sixth NSC. We 

delivered the first six Fast Response Cutters, awarded production of the Over the Horizon Mark 

IV Boat, awarded the contract for the Long Range Interceptor Mark II Boat, and accepted 33 

additional Response Boats Medium (RB-Ms), bringing the total to 133 RB-Ms. Within the 

aviation domain, we accepted the 15th HC-144A aircraft, awarded contract options for two 

additional aircraft, and completed initial Operational Test and Evaluation. We awarded the 

production of three C-130J aircraft and completed the first C-130H avionics upgrade and center 

wing box installation. Additionally, we completed Discrete Segment Three on HH-65s and are 

approximately halfway through completing Discrete Segment Four on the fleet of 99 aircraft. 

We completed Rescue 21 deployments in the continental United States and marked the 51,OOOth 

Search and Rescue (SAR) case completed leveraging this system. We continue to deploy 

Nationwide Automatic Identification System and Watchkeeper to key ports throughout the 

country and are installing a new C41SR baseline on NSCs. 

As I discussed when I last testified before this Subcommittee, the Coast Guard is committed to 

allocating available resources to address today's greatest maritime safety and security needs 

while making the necessary investment in recapitalization to ensure the viability of the Coast 

Guard well into the future. The condition and serviceability of the Coast Guard's surface fleet, 

the aging of fixed and rotary wing air assets, and the projected timelines to replace these assets 

require the Coast Guard to continue investment in recapitalization to maintain the capability 

necessary to operate in areas strategically important to our Nation. 
34 


Insert offset folio 9 here 81676.009

We will continue to instill a culture of efficiency so that every dollar is used to its best 

advantage. We will ensure that our people remain Semper Paratus-"always ready"-and are 

properly equipped with reliable and capable assets to carry out our most pressing missions. We 

are committed to realizing a balanced force structure necessary to address future national 

interests in the maritime domain. 

THE COAST GUARD ACOUISITIONS ENTERPRISE 

With the establishment of the Acquisition Directorate in 2007, the Coast Guard consolidated its 

portfolio of major and minor acquisition projects, contracting and procurement functions, 

research and development programs, logistics support and transition to sustainment functions, 

and other elements of acquisition support under a single command. Further, the Service 

established an acquisition governance structure, strengthened our processes, and built and 

maintained a highly capable and trained acquisition workforce. These improvements have been 

codified in the most recent revision to the Coast Guard's Major Systems Acquisition Manual 

(MSAM), which was released this past January, and are guided by the principles and 

requirements under the Department of Homeland Security (DHS) - Homeland Security 

Acquisition Manual (HSAM) and Federal Acquisition Regulations (FAR). We continue to 

implement reforms to minimize acquisition risks and maximize affordability within our projects. 

We leverage the experience and expertise of our partners to perform key functions and guide 

Coast Guard decision-makers throughout the acquisition life cycle. To better balance the 

acquisition and budget processes, DHS and the Coast Guard are conducting an acquisition 

portfolio review. The portfolio review initiated in 2013 will help develop acquisition priorities 

and inform the appropriate asset mix to achieve operational requirements within the funding 

projections. 

As a result of these ongoing efforts, Coast Guard acquisition personnel were recognized as 

recipients of four 2012 DHS Acquisition Awards, including Acquisition Professional of the 

Year, Program Manager of the Year, DHS Program of the Year, and Component Acquisition 

Executive Team of the Year. The Coast Guard also received four DHS Competition and 

Excellence in Acquisition Awards this year recognizing the efforts of our contracting and 

procurement teams in supporting the full scope of acquisition portfolio. Most importantly, we 

continue to deliver operational capability on-cost, on or ahead of schedule, and in a controlled 

risk environment. 

RECENT ACOUISITION SUCCESSES 

As the Commandant testified earlier this year, the Coast 

Guard has made great strides in our efforts to recapitalize 

the Coast Guard fleet and support systems over the past 

year. The Service continues to accept delivery of new 

cutters, aviation assets, small boats, and C4ISR 

capabilities bolstering our mission readiness and 

performance. 

Last month, the Coast Guard accepted delivery of the 

sixth Fast Response Cutter (FRC), which will complete 

the complement ofFRCs scheduled to be based at Sector FRC6(USCGCPAULCLARK)delivered-May2013 

2 
35 


Insert offset folio 10 here 81676.010

Miami. With our next delivery, scheduled for August, we will begin the process of outfitting our 

second homeport, Sector Key West, with deliveries to Sector San Juan set to follow in early 

2015. The FRC project recently conducted Initial Operational Test and Evaluation (IOT&E) 

aboard the USCGC RICHARD ETHERIDGE with final results expected shortly. 

Our National Security Cutter (NSC) project also 

achieved several key milestones during the past year, 

including the first deployment of an NSC to the 

Arctic as a part of Operation Arctic Shield, 2012. 

Through the experience gained during the 

construction of the first three hulls and a shift to a 

fixed price construct, the NSC project controlled risk 

and achieved stability in cost and schedule. The 

project recently laid the keel for the fifth NSC, 

USCGC JAMES, and is preparing for the christening 

of the fourth NSC, USCGC HAMILTON this fall. 

Steel plate bearing the initials of the cutters sponsor to The Coast Guard also recently awarded contracts for 

authenticate the keel ofNSe 5 (fAMES) as "truly and production of the sixth NSC, USCGC MUNRO, and 

fairly laid" - May 2013 Long Lead Time Materials for the seventh NSC. The 

contract for production ofNSC six was awarded for nearly the same price as the fourth and fifth. 

NSCs are proving very successful at providing Area Commanders the requisite capabilities to 

perfonn the full range of Coast Guard missions in the offshore environment. 

The Offshore Patrol Cutter (OPC) project will be 

governed by the MSAM from initiation to completion. 

Last year following continued consultation with 

industry, the Coast Guard released the Request for 

Proposal with an emphasis on competition and 

afford ability . 

Following open competitions, the Coast Guard awarded 

fixed-price production contracts in 2012 for two 

standardized cutter boat classes, the II-meter Long LRI-II perfunns tests during OT&E _ fan 2013 

Range Interceptor II (LRI-II) and 7-meter Over the 

Horizon IV (OTH-IV). The lead production boat of each class has been delivered, and each has 

successfully completed Operational Test and Evaluation (OT&E). The LRI-II recently was 

credited with its first interdiction of illegal drugs while conducting operational testing in 

conjunction with USCGC BERTHOLF. The Service also continues to oversee the production of 

the Response Boat-Medium (RB-M) and the Response Boat-Small II (RB-S II), currently being 

delivered to Coast Guard stations nationwide. 

The Coast Guard has initiated several pre-acquisition activities to support the acquisition of a 

new Polar Icebreaker to maintain Coast Guard mission capabilities in the high latitude regions. 

These efforts are complemented by ongoing consultation and coordination with the Canadian 

Coast Guard as they continue requirements and a design for a heavy icebreaker. 

3 
36 


Insert offset folio 11 here 81676.011

H-60 helicopters undergoing enhancements as part of the 

transition to the MH-60Tmodel at the Aviation Logistic 

Center, Elizabeth City, N.C. 

Within the aviation domain, the Coast Guard 

recently accepted delivery of the fifteenth 

Maritime Patrol Aircraft (MPA) and awarded 

contracts for one additional MP A, five Mission 

System Pallets (MSP), and three HC-130J Long 

Range Surveillance aircraft. Additionally, 

ongoing conversion and sustainment projects will 

equip our H-60 and H-65 helicopter fleets with 

enhanced avionics and sensors, as well as the 

commencement of avionics enhancement and 

structural improvements aboard our legacy HC130H fleet. 

We continue to work with the U.S. Navy and U.S. Customs and Border Protection to leverage 

their existing programs to develop cutter and land-based Unmanned Aerial Systems (UAS) to 

supplement manned aircraft to meet maritime surveillance requirements. Last year, the Coast 

Guard began a series of evaluations of a cutter-based small UAS. This included a series of 

operations in conjunction with our National Security Cutters, including the first time a Coast 

Guard UAS played an integral role in a drug interdiction. At the end of May, while embarked 

aboard cutter BERTHOLF, the cutter-based small UAS relieved an MPA that had spotted a 

suspected go-fast. The UAS maintained surveillance and subsequently handed off pursuit to 

BERHOLF's deployed armed helicopter and Long-Range Interceptor. The result was the 

successful interdiction of nearly 600 kilograms of cocaine. 

Finally, we continue to deploy command and control systems, such as Rescue 21, WatchKeeper, 

and the Nationwide Automatic Identification System to save lives and enhance maritime 

awareness in our ports and on the inland and coastal waterways. Our C4ISR systems remain 

critical for maintaining secure interoperability among our many resources and missions. The 

Coast Guard is making good progress deploying baseline C4ISR upgrades aboard our NSC fleet, 

further enhancing NSC capabilities. C4ISR equipment and software provide situational 

awareness, data processing and information awareness tools required to modernize and 

recapitalize our shore sites, surface and aviation assets. 

CONCLUSION 

Since 1790, the Coast Guard has safeguarded our Nation's maritime interests and natural 

resources on our rivers, in the ports, on the high seas, and in theaters around the world. Each 

day, the Coast Guard conducts countless operations to protect those on the sea, protect the 

Nation from threats delivered by the sea, and to protect the sea itself. Our acquisition workforce 

is, likewise, working each day to acquire and deliver the assets and capabilities needed to support 

those critical operations. 

Thank you for the opportunity to testify before you today and for all you do for the men and 

women of the U.S. Coast Guard. I look forward to answering your questions. 

4 
37 


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Qnestion#: I 

Topic: 400RB-S 

Hearing: Coast Guard Readiness: Examining Cutter, Aircraft, and Communications Needs 

Primary: The Honorable Duncan D. Hunter 

Committee: TRANSPORTATION (HOUSE) 

Name: Vice Admiral John Currier - USCG Vice Commandant 

Organization: U.S. Department of Homeland Security 

Question: Admiral Currier, I am concerned with information that has been shared with 

me regarding the U. S. Coast Guard's acquisition strategy for the procurement of 

Response Boat-Small (RB-S) vessels that support U.S. Coast Guard ("USCG") 

operations nation-wide. 

In November 20 II, the USCG awarded an ID/IQ contract for the procurement of up to 

470 RB-S boats for the USCG, up to 20 boats for the Customs and Border Protection 

(CBP) service, and up to 10 boats for the Department of the Navy. The value of the 

contract is set at $192 million, and represents one of the largest boat buys in the history of 

the USCG. 

It is my understanding that the contract award reflected the USCG's best planning to 

replace RB-S boats that have reached the end of their service life, satisfy USCG 

operational requirements, ensure timely deliveries, maintain cost, and guarantee quality 

boats. This strategy, with a procurement of up to 470 RB-S vessels, appeared 

straightforward. 

As you may know, the USCG is currently funding the procurement ofRB-S via the Coast 

Guard's Operating Expenses (OE) budget and not through the Acquisition, Construction 

and Improvements (ACI) budget. As such, there is very little transparency within the U.S 

Government or industry regarding the procurement strategy, and the manufacturer has no 

predictability or certainty on the number ofRB-S boats the USCG intends to procure in a 

given year, or in succeeding years. 

Based on the 8-year contract (February 2011-February 2019) awarded by the USCG, and 

related discussions with program staff, it seemed clear that to successfully meet the 

program requirements of replacing the legacy RB-S, 40 to 65 boats would have to be 

manufactured per year. However, yearly procurement orders from the USCG have barely 

reached 50 percent of the actual stated requirement. For example, the USCG ordered 38 

RB-S boats the first year of the contract (FYI I), 25 boats the second year of the contract 

(FY12), and intends to order only 20 boats in FY13. 

I ask that you provide me with a detailed response on how the USCG intends to 

recapitalize the approximate 400 RB-S vessels currently in the USCG fleet? 
38 


Insert offset folio 13 here 81676.013

Question#: I 

Topic: 400 RB-S 

Hearing: Coast Guard Readiness: Examining Cutter, Aircraft, and Communications Needs 

Primary: The Honorable Duncan D. Hunter 

Committee: TRANSPORT A TION (HOUSE) 

Name: Vice Admiral John Currier - USCG Vice Commandant 

Organization: U.S. Department of Homeland Security 

Response: The Coast Guard awarded a contract to Metal Shark Aluminum Boats of 

Jeanerette, LA in 2011 to produce the Response Boat - Small. This IDIQ contract will be 

used to replace an older version of the RB-S boat that is currently in service. The Coast 

Guard's boat fleet consists of I ,875 boats from a 15 foot ice skiff to the 47 foot selfrighting Motor Life Boat. The fleet's boat quantity and boat type is very complex and 

varies on numerous factors including; mission requirements, boat performance, and 

management techniques. An IDIQ contract was selected for the RB-S replacement due to 

this complexity and possibility of future changes to the RB-S fleet. 

The Coast Guard closely monitors the requirements for and viability of the current RB-S 

fleet to ensure proper stewardship. The Coast Guard found efficiencies within the boat 

fleet that necessitate a smaller RB-S fleet and orders have reflected the reduced 

requirements. The Coast Guard will continue to execute responsibilities set forth in the 

RB-S IDIQ contract with Metal Shark Aluminum Boat, LLC and has ordered 99 RB-S 

boats (28% of the RB-S fleet) as of November 2013. Future purchases ofRB-S boats 

will occur as fleet conditions warrant. 
39 


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Question#: 2 

Topic: RBS 

Hearing: Coast Guard Readiness: Examining Cutter, Aircraft, and Communications Needs 

Primary: The Honorable Duncan D. Hunter 

Committee: TRANSPORTATION (HOUSE) 

Question: Previous RBS were procured with OE funding and therefore have a 10-year 

funded service life for maintenance and support. How does the USCG intend to replace 

those RB-S boats reaching the end of their 10-year service life under your current 

underfunded plan? 

Additionally, if the overall number of new RB-S vessels to be procured is less than 400, 

please provide your personal explanation of why the USCG is reducing the requirement 

and what, if any, additional risk the USCG is incurring on our waterways by reducing the 

RB-S recapitalization below existing fleet levels and below the anticipated contract level? 

Response: The Coast Guard is in the process of replacing its RB-S boat fleet, to date, 99 

boats have been ordered off an IDIQ contract with Metal Shark Aluminum Boats. The 

Coast Guard continually reviews operational asset performance, mission need and 

resource availability to meet the Nation's maritime needs as efficiently as possible. This 

ongoing review process will ensure the Coast Guard acquires RB-S replacements as 

needed to execute statutory missions. 

Working with field commanders, the Coast Guard identified opportunities to reduce boat 

system redundancies, and reduce the RB-S fleet size, and meet mission requirements. 
40 


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Question#: 3 

Topic: OE funds 

Hearing: Coast Guard Readiness: Examining Cutter, Aircraft, and Communications Needs 

Primary: The Honorable Duncan D. Hunter 

Committee: TRANSPORTATION (HOUSE) 

Question: Please comment on recent reports that the USCG is tapping OE funds to equip 

Cutters with Over the Horizon (OTH) capabilities? Why is OE funding being used for an 

ACNI funded program? 

Does the USCG plan to reprogram funds to restore OE funding intended for RBS 

procurement? 

Response: CB-OTH boats are procured with both AC&I and OE Funds. A cutter's 

initial boat is incorporated in the cutter's acquisition and funded through the AC&I 

appropriations. Replacement boats are purchased with OE appropriations, ifthe unit cost 

is less than $700,000 but does not exceed $31 M annually. 
41 


Insert offset folio 16 here 81676.016

NOT FOR PUBLICATION 

UNTIL RELEASED BY 

HOUSE TRANSPORTATION AND INFRASTRUCTURE COMMITTEE 

STATEMENT OF 

RONALD O'ROURKE 

SPECIALIST IN NAVAL AFFAIRS 

CONGRESSIONAL RESEARCH SERVICE 

BEFORE THE 

HOUSE TRANSPORTATION AND INFRASTRUCTURE COMMITTEE 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION 

HEARING ON 

COAST GUARD READINESS: EXAMINING CUTTER, AIRCRAFT, AND 

COMMUNICATIONS NEEDS 

NOT FOR PUBLICATION 

UNTIL RELEASED BY 

JUNE 26, 2013 

HOUSE TRANSPORTATION AND INFRASTRCTURE COMMITTEE 
42 


Insert offset folio 17 here 81676.017

Chairman Hunter, Ranking Member Garamendi, distinguished members of the subcommittee, thank you 

for the opporttmity to appear before you today to discuss the Coast Guard's FY2014 Five Year Capital 

Investment Plan (CIP) and Coast Guard acquisition programs. 

Overview of Funding Levels in FY2014 Five Year CIP 

1 

The Coast Guard's FY2014 Five Year (FY2014-FY2018) CIP includes a total of about $5.1 billion in 

acquisition funding, which is about $2.5 billion, or about 33%, less than the total of about $7.6 billion that 

was included in the Coast Guard's FY2013 Five Year (FY2013-FY2017) CIP. (In the four common years 

ofthe two plans-FY2014-FY2017-the reduction in funding from the FY2013 CIPto the FY2014 CIP 

is about $2.3 billion, or about 37%.) This is one of the largest percentage reductions in funding that I have 

seen a five-year acquisition account experience from one year to the next in many years. 

About twenty years ago, in the early 1990s, Department of Defense (DOD) five-year procurement plans 

were reduced sharply in response to the end of the Cold War-a large-scale change in the strategic 

environment that led to a significant reduction in estimated future missions for U.S. military forces. In 

contrast to that situation, there has been no change in the Coast Guard's strategic environment since last 

year that would suggest a significant reduction in estimated future missions for the Coast Guard. 

One factor that has changed for the Coast Guard since last year is the emergence of a possibility for 

transferring newly built Air Force C-27 transport aircraft to the Coast Guard. The possible transfer of 

these aircraft, which the Air Force has judged to be excess to its needs, is addressed by Section 1091 of 

the FY2013 National Defense Authorization Act (H.R. 43101P.L. 112-239 of January 2,2013), which sets 

forth conditions for transferring certain excess DOD aircraft to the Forest Service and Coast Guard.' 

C-27s transferred to the Coast Guard could be used by the Coast Guard as Medium Range Surveillance 

(MRS) aircraft, obviating the need for the Coast Guard to procure new HC-144A aircraft for this role. The 

Coast Guard has testified this year that it would need to receive at least 14 of the Air Force's 21 C-27s for 

the transfer to make economic sense for the Coast Guard, since 14 is the minimum number that the Coast 

Guard would need to equip multiple Coast Guard air stations.l If the Coast Guard were to receive 14 or 

more of the C-27s, the Coast Guard could stop HC-144A procurement at the current total of 18, and 

forego procuring the 18 additional HC-144As that the Coast Guard had planned to acquire. 

Whether the Coast Guard will receive at least 14 of the C-27s is not clear-the tenus of Section 1091 of 

H.R. 43101P.L. 112-239 do not appear to guarantee this outcome. The Coast Guard's FY2014 CIP, 

however, appears to bank on this outcome by almost zeroing out funding for the HC-144A program: The 

FY2014 CIP includes $36 million for the HC-144A program-$887 million, or 96%, less than the $923 

million that was included for the program in the FY2013 CIP. (The reduction in HC-144A funding in the 

four common years ofFY2014-FY2017 was $844 million, or once again 96%.) 

Setting aside the $887 million reduction in HC-144A funding, the remaining reduction in the FY2014 

ClP's total funding compared to the total funding level in the FY2013 ClP becomes about $1.6 billion-a 

reduction of about 22% from the level in the FY20 13 CIP. (In the four common years ofthe two plans, 

the other-than-HC-144A reduction is $1.5 billion, or about 23%.) This percentage reduction, though 

smaller than the 33% figure (37% in the four common years) cited above, is still quite large in the absence 

ofa large-scale reduction in the Coast Guard's estimated future missions. The other-than-HC-144A 

funding reduction of$1.6 billion would be enough to procure roughly one and a half polar icebreakers, or 

two National Security Cutters (NSCs), or a few Offshore Patrol Cutters (OPCs), or more than two dozen 

Fast Response Cutters (FRCs). 

1 See, for example, the remarks of Admiral Robert Papp, the Commandant of the Coast Guard, before this subcommittee on April 

16,2013. 
43 


Insert offset folio 18 here 81676.018

2 

The FY2014 CIP averages about $1.02 billion per year, compared about $1.53 billion per year under the 

FY2013 CIP. A Coast Guard acquisition funding level of about $1 billion per year would likely require 

the Coast Guard to reduce annual procurement rates of new platforms, such as FRCs or OPCs, below 

rates that previous Coast Guard plans have anticipated. Reduced procurement rates would increase unit 

procurement costs, lengthen the time needed for new cutters to replace old ones (and thus the time needed 

to achieve desired improvements in Coast Guard mission capabilities and capacity), and possibly compel 

the Coast Guard to continue operating existing aged cutters even longer than now planned, which could 

lead to increased cutter operation and support costs, potentially leaving still less funding available for 

procuring new platforms. If Coast Guard acquisition funding were to continue at about $1 billion per year, 

the likely eventual result would be a smaller andlor older Coast Guard with less mission capability and 

capacity than called for in the Coast Guard's program of record (POR). 

In this sense, the FY2014 CIP raises a fundamental question for Congress about the Coast Guard's ability 

to recapitalize its assets in a timely manner and adequately perform its statutory missions in coming years. 

The large change in the FY20 14 CIP compared to the FY2013 CIP raises an additional potential oversight 

question for Congress concerning year-to-year stability of Department of Homeland Security (DHS) 

budget planning and the reliability ofDHS budget projections for future fiscal years. 

Table 1 shows percentage changes in funding in the FY20 14 CIP compared to the FY2013 CIP. As shown 

in the table, compared to the FY20 13 CIP, the FY20 14 CIP reduces funding for all categories, particularly 

aircraft (in large part because of the reduction to the HC-144A program) and Shore and ATON (aids to 

navigation). In terms of individual line items, the FY2014 CIP increases funding for the NSC program (to 

acquire NSCs 7 and 8), the Unmanned Aircraft System (UAS) program, and C4ISR2 systems, while 

reducing funding, in some cases quite deeply, for several other line items, including In-Service Vessel 

Sustainment, the FRC program, the polar icebreaker, the HC-144A program (in apparent anticipation of 

the C-27 transfer), the HH-65 Conversion/Sustainment program, the CH-130HlJ program, the line item 

for Major Shore, Military HousingATON and S&D (survey and design) projects, and Major Acquisition 

Systems Infrastructure. 

2 C4lSR is command and control, communications, computers, intelligence, surveillance, and reconnaissance. 
44 


Insert offset folio 19 here 81676.019

Table I. FY20 14 CIP: Percentage Changes in Funding Compared to FY20 13 CIP 

Figures rounded to nearest percent 

category or line item 

Ve ... ls 

Aircraft 

Other 

Shore and ATON 

Personnel and Management 

TOTAL 

In~Service Vessel Sustainment 

NSC 

OPe 

fRC 

Polar icebreaker 

MPA (HC-I44A) 

HH-65 Conversion/Sustainment 

LRS (C-130HIJ) 

Unmanned Aircraft System (UAS) 

C41SR 

Major Shore, MilitlI.ry Housing ATON and S&D 

Major Acquisition Systems Infrastructure 

Percentage change in 

S-year funding (FY20 14-

FY20 18 compared to 

FY20IJ-FY2017) 

-15% 

..!I 1% 

-14% 

-72% 

~3% 

-33% 

-16% 

+106% 

+47% 

-67% 

-73% 

-96% 

-21% 

,.g6% 

+100% 

+17% 

-70% 

-78% 

Source: Table prepared by CRS based on FY2013 and mOl4 CIPs. 

Percentage change In 4 

common years of 

FY20 14-FY20 17 

-14% 

-83% 

-IS% 

-76% 

-4% 

-37% 

-35% 

+$1.364 billion (se. notes) 

no change 

-72% 

..!IS% 

~96% 

-21% 

-89% 

+100% 

+15% 

-76% 

-81% 

3 

Notes: ATON is aids to navigation. The increase for the NSC in the 4 common years is shown as a dollar increase rather 

than a percentage increase because the 4~year dollar total under the FY20 13 CIP was zero, and dividing by zero gives an 

undefined answer for percentage change. 

Program of Record Force Relative To Future Coast Guard Missions 

In assessing the operational implications of a future Coast Guard with less mission capability and capacity 

than called for in the Coast Guard POR, it can be noted, as a starting point, that the POR force itselffalls 

considerably short of the force of cutters and aircraft that the Coast Guard has calculated would be needed 

to fully perfOlID the Coast Guard's statutory missions in coming years. For example, the Coast Guard has 

calculated that fully perfonning its missions in coming years would require 9 NSCs, 49 OPCs, and 91 
45 


Insert offset folio 20 here 81676.020

4 

FRCs (149 cutters in total), or about 64% more than the 8 NSCs, 25 OPCs, and 58 FRCs (91 cutters in 

total) that are included in the POR force. Although the POR force would have considerably more mission 

capability and capacity than the Coast Guard's legacy force, the Coast Guard has estimated that the POR 

force would nevertheless have capability or capacity gaps for performing six of the Coast Guard's II 

statutory missions in coming years-search and rescue; defense readiness; counter-drug operations; ports, 

waterways, and coastal security; protection of living marine resources; and alien migrant interdiction 

operations. The Coast Guard has judged that some of these mission performance gaps would be "high 

risk" or "very high risk." The mission performance gaps of the POR force, which have not been 

emphasized in public discussions of Coast Guard planning and budgeting, are discussed in some detail in 

the CRS report on Coast Guard cutter procurement.3 If limits on Coast Guard acquisition funding lead to a 

future Coast Guard with fewer andlor older platforms than called for under the POR, the mission 

performance gaps noted above will be greater still. 

How Much Acquisition Funding Should the Coast Guard Receive Each 

Year? 

Although the annual amounts of acquisition funding that the Coast Guard has received in recent years are 

one potential guide to what Coast Guard acquisition funding levels might or should be in coming years, it 

is not clear that they should be the sole guide, since other potential guides are conceivable. Nor is it clear 

that past annual amounts of acquisition funding would be the most appropriate guide, since the Coast 

Guard has entered a period during which it is seeking to replace multiple classes of assets that in past 

budget years were not yet in need of replacement. A reliance on past funding levels as the sole guide to 

future funding levels could short-circuit the policymaking process, limit options available to 

congressional and executive branch policymakers, and hamper the ability of congressional and executive 

branch policymakers to alter the composition of federal spending over time to meet changing federal 

needs. 

In seeking other potential guides for determining how much acquisition funding the Coast Guard should 

receive each year, comparisons with procurement funding levels for the nation's other maritime military 

service-the Navy-are potentially illuminating, particularly in terms of assessing whether Coast Guard 

funding for acquisition is appropriately sized in relation to other parts of the Coast Guard's budget and 

Coast Guard end strength. In comparing the Coast Guard's budget to the Navy's budget, some initial 

observations that might be made include the following: 

In the FY2014 budget for the Department of the Navy (DoN), which includes the Navy 

and Marine Corps, funding for procurement (about $43.5 billion) is about 39% as large as 

all other DoN funding (about $112.3 billion). If the same 39% figure were applied to the 

Coast Guard's Acquisition, Construction, and Improvements (AC&I) account, the AC&I 

account for FY2014 would be about $3.4 billion, or more than three times the average of 

$1.02 billion per year under the FY2014 CIP. 

If per capita Coast Guard acquisition funding (i.e., acquisition funding per uniformed 

person) were set equal to per capita DoN procurement funding under the FY2014 budget, 

then the Coast Guard's AC&I account for FY2014 would be about $3.5 billion. 

• If per capita Coast Guard acquisition funding for vessels were set equal to per capita 

Navy shipbuilding funding in the FY2014 budget, then the vessels portion of the Coast 

Guard's AC&I account would be about $1.8 billion, or more than twice the average of 

about $731 million per year for vessels under the FY2014 CIP. 

3 See the section entitled "Adequacy of Planned NSC, OPC, and FRC Procurement Quantities" in CRS Report R42567, Coost 

Guard Cutter Procurement: Background and Issues for Congress, by Ronald O'Rourke. 
46 


Insert offset folio 21 here 81676.021

If per capita Coast Guard acquisition funding for aircraft were set equal to per capita 

DoN aircraft procurement funding, then the aircraft portion of the Coast Guard's AC&I 

account would be about $1.5 billion, or more than 20 times the average of about $64 

million per year for aircraft under the FY2014 CIP. 

5 

DoN performs a set of missions different from that of the Coast Guard. Consequently, DoN's procurement 

portfolio includes certain items that are not included in the Coast Guard's acquisition portfolio, such as 

nuclear-powered submarines and aircraft carriers, amphibious ships and craft, high-performance tactical 

aircraft, complex ship and aircraft combat systems, and sophisticated missiles. Conversely, the Coast 

Guard's acquisition portfolio includes certain items that are not included in DoN's procurement portfolio, 

including polar and Great Lakes icebreakers, seagoing and coastal buoy tenders, and numerous patrol 

boats, rescue craft, and inland waterway craft. The implied funding figures in the above bullets might be 

discounted to take into account the higher-cost items in the Navy's procurement account that are not 

present in the Coast Guard's acquisition portfolio. 

If, for example, the implied funding figures of$3.5 billion, $1.8 billion, and $1.5 billion, respectively, in 

the second; third, and fourth bullets above were discounted by one-third or one-half (an arbitrary 

discounting range that is used here simply for illustrative purposes), then the implied funding figure for 

the Coast Guard's AC&I account would become roughly $1. 75 billion to $2.3 billion, the implied funding 

figure for the vessels portion of the AC&I account would become roughly $900 million to $ J.2 billion, 

and the implied funding figure for the aircraft portion of the AC&! account would become roughly $750 

million to $1 billion. 

One might argue that whatever the discounting factor used for the implied funding figures in the second, 

third, and fourth bullets, the $3.4 billion implied funding figure in the first bullet might not need to be 

discounted as deeply, because the items in DoN's procurement portfolio that cost more to procure also 

frequently cost more to operate and support, which drives up the $112.3 billion figure for nonprocurement funding that is used to calculate the 39% figure on which the $3.4 billion figure in the first 

bullet is based. Comparisons of the DoN and Coast Guard budgets present many apples-vs.-oranges 

issues, but may nevertheless be of value in providing one cross check in assessing whether Coast Guard 

funding for acquisition is appropriately sized in relation to other parts of the Coast Guard's budget and 

Coast Guard end strength. 

The Coast Guard on occasion has offered its own views on how much acquisition funding would be 

needed each year to recapitalize the Coast Guard's assets on a timely basis. At an October 4, 2011, 

hearing before this subcommittee, for example, Admiral Robert Papp, the Commandant of the Coast 

Guard, stated: 

If you look at our complete portfolio, the things that we'd like to do, when you look at the shore 

infrastructure that needs to be taken care of. when you look at renovating our smaller icebreakers and other 

ships and aircraft that we have, we've done some rough estimates that it would really take close to about $25 

billion a year, if we were to do all the things that we would like to do to sustain our capitai plant.'~ 

At a May 9, 2012, hearing before the Homeland Security subcommittee of the Senate Appropriations 

Committee, Admiral Papp stated: "I've gone on record saying that I think the Coast Guard needs closer to 

$2 billion dollars a year [in acquisition funding] to recapitalize-[to] do proper recapitalization.'" 

An April 18, 2012, blog entry ststed: 

If the Coast Guard capital expenditure budget remains unchanged at less than $1.5 billion annually in the 

coming years, it will result in a service in possession of only 70 percent of the assets it possesses today, said 

Coast Guard Rear Adm. Mark Butt. 

4 Transcript of hearing. 

S Transcript of hearing. 
47 


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Butt, who spoke April 17 [2012J at laJ panel [discussion] during the Navy League Sea Air Space conference 

in National Harbor, Md., echoed Coast Guard Commandant Robert Papp in stating that the service really 

needs around $2.5 billion annually for procurement' 

At a May 14,2013, hearing before the Homeland Security subcommittee of the Senate Appropriations 

Committee, Admiral Papp stated that an acquisition funding level of $1 billion per year "almost creates a 

death spiral for the Coast Guard .... '" 

Multiyear Procurement (MYP) and Block Buy Contracting As Options 

For Reducing Coast Guard Acquisition Costs 

6 

The Navy makes substantial use of multiyear procurement (MYP) and block buy contracting to reduce 

ship and aircraft procurement costs. Indeed, the Navy now uses these two forms of mUltiyear contracting 

for all three of its year-to-year ship procurement programs (the Virginia class submarine program, the 

DDG-51 destroyer program, and Littoral Combat Ship [LCS] program). The Navy also uses or has 

recently used MYP for a number of it aircraft procurement programs, including FI A-18EIF strike fighters 

and EA-18G electronic attack aircraft, V-22 tilt rotor aircraft, E-2C airborne early warning aircraft, and H60 helicopter variants. Compared with estimated costs under annual contracting, estimated savings for 

DOD programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on 

the particulars of the program in question, with many estimates falling in the range of 5% to 10%. 

Potential savings under block buy contracting can be less than those under MYP, but can still amount to 

several percent. 

MYP and block buy contracting are discussed in detail in a CRS report. 8 There are various factors to 

weigh in considering whether to use MYP or block buy contracting in an acquisition program, including 

some potential reasons for not using them, and the statute that governs MYP (10 U.S.c. 2306b) sets forth 

specific requirements that a program must meet to qualiJy for MYP. Use ofMYP or block buy contracting 

must be approved in each instance by Congress. 

6 David Perera, "The Coast Guard Is Shrinking," FierceHomelandSecurity.com, April 18,2012, accessed June 19,2013, at 

http1Iwww.fiercehomelandsecurity.com!story/coast-guard-shrinking/2012-04-18. 

'When asked to discuss 1I1e difference in Coast Guard acquisition funding under the Coast Guard's proposed FY2014 budget 

compared to the level of funding in the FY20J3 budget, he stated: 

Well, Madam Chairman, [the difference 01] $500 million-a half a billion dollars-is real money for the 

Coast Guard. So, clearly. we had $1.5 billion in the '13 budget. It doesn't get everything I would like, but itit gave us a good start, and it sustained a number of projects that are very important to us, 

When we go down to the $1 billion level this year, it gets my highest priorities in there, but we have to either 

tenninate or reduce to minimum order quantities for a11 the other projects that we have going. 

If we're going to stay with our program of record, things that have been documented that we need for our 

service, we're going to have to just stretch everything out to the right. And when we do that, you cannot order 

in economic order quantities. It defers the purchase. Ship builders. aircraft companies-they have to figure in 

their costs, and it inevitably raises the cost when you're ordering them in smaller quantities and pushing it off 

to the right. 

Plus, it almost creates a death spiral for the Coast Guard because we are forced to sustain older assets-older 

ships and older aircraft-which ultimately cost us more money, so it eats into our operating funds, as well, as 

we try to sustain these older things. 

So, we'll do 1I1e best we can within the budget. And the president and the secretary have addressed my highest 

priorities, and we'll just continue to go on the--on an annual basis seeing what we can wedge into the budget 

to keep the other projects going. 

(Transcript of hearing.) 

8 CRS Report R41909, Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and 

Issues for Congress, by Ronald O'Rourke and Moshe Schwartz. 
48 


Insert offset folio 23 here 81676.023

7 

10 U.S.C. 2306b makes MYP available with congressional approval not only to DOD, but to other 

government departments, including DHS, the parent department of the Coast Guard.9 Similarly, Congress 

could grant the Coast Guard the authority to use block buy contracting for specific ship or aircraft 

acquisition programs, just as Congress granted the Navy the authority to use block buy contracting for the 

first four Virginia class submarines and for ships 5 through 24 in the LCS program. 

Although MYP is explicitly available to the Coast Guard through 10 U.S.c. 2306b and block buy 

contracting is implicitly available to the Coast Guard through the example of the Virginia class submarine 

and LCS programs, the Coast Guard is not using MYP or block buy contracting for any of its ship or 

aircraft acquisition programs. (The Coast Guard does use contracts with options, but such contracts are 

not the same as MYP or block buy contracts and do not offer the types of savings possible with MYP and 

block buy contracts.) The difference between the Navy's substantial use ofMYP and block buy 

contracting and the Coast Guard's non-use of these contracting mechanisms is striking. The non-use of 

MYP and block buy contracting for Coast Guard acquisition programs in past years may in some cases 

represent lost opportunities for reducing Coast Guard acquisition costs. 

Current Coast Guard acquisition programs that might be considered candidates for MYP or block buy 

contracting include but are not necessarily limited to the NSC program (an MYP contract for NSCs 7 and 

8), the OPC program (block buy contracting at first, followed by MYP), and the FRC program (MYP). If 

the polar icebreaker program were expanded to include a second new ship, it could become a potential 

candidate for block buy contracting. A May 10, 2013, press report quotes Michael Petters, the CEO of 

Huntington Ingalls Industries (the builder ofNSCs), as stating: 

We basically have proposed that if we really want to save some money, we should do multiyears [Le., an 

MYP contract] on [the] National Security Cutter. We've not had any commitment to that from the Congress, 

and so those [contracts] are one ship at a time, 10 

Cutter Acquisition Programs 

National Security Cutter 

The FY2013 CIP did not include funding for acquiring NSCs 7 and 8. The FY2014 CIP reinstates funding 

for acquiring the two ships in FY2014 and FY2015. Although the FY2014 CIP includes full funding for 

NSC 8 in FY2015, it does not include any funding in FY2014 for procurement ofiong lead time materials 

(LLTM) for NSC 8. Providing this funding-which might amount to about $77 million, based on the 

amount of LLTM funding provided in FY20 12 for NSC 6-wouJd improve the construction sequence for 

NSC 8 and tbereby reduce its total acquisition cost by $30 million to $35 million, tbe Coast Guard 

estimates.!! As noted above, acquisition costs for NSCs 7 and 8 might be furtber reduced by using an 

MYP contract for NSCs 7 and 8. 

Offshore Patrol Cutter 

Compared to the FY20J3 CIl'; the FY2014 CIP in effect shifts $25 million in OPC acquisition funding 

from FY2014 to FY2015. The Coast Guard states that this change in the funding profile reflects a refined 

estimate of the cost of the work to be done on the OPC program in FY2014 and FY2015, and does not 

change the program's schedule. 12 

, 10 U.S.c. 2306b(b)(2)(B). 

10 Michael Fabey, "HI!: U.S. Non-Nuclear Shipbuilding Facing More Uncertainty Than Nuclear," Aerospace Daily & Defense 

Report, May 10,2013: 4. 

II Source: Coast Guard briefing to CRS, June 14,2013. 

12 Source: Coast Guard briefing to CRS, June 14, 2013. 
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8 

The Coast Guard wants to procure OPCs at an eventual rate of two per year. If the Coast Guard's AC&I 

account is funded at about $1 billion per year in coming years, the Coast Guard may find it difficult to do 

that while adequately funding other acquisition priorities. To help visualize the potential challenge of 

funding two OPCs per year in a $1 billion AC&l account while also adequately funding other acquisition 

priorities, it can be noted that since OPCs are to cost, very roughly, half as much as an NSC, a $1 billion 

AC&I account that includes funding for two OPCs would be broadly similar, in terms of funding 

available for acquisition priorities other than major cutters, to the proposed FY20 14 AC&! account, which 

totals $951 million and includes $616 million in funding for one NSC, leaving $335 million for all other 

acquisition priorities. 

As the Coast Guard has testified, if constraints on Coast Guard acquisition funding limit OPC 

procurement to one ship per year, the first OPC would eventually undergo its mid-life overhaul before the 

last one is built. 13 The Coast Guard might attempt to compensate for a slowed buildup in OPC numbers by 

further extending the service lives of its 21 O-foot medium endurance cutters, but even with such life 

extensions, the Coast Guard's major cutter force could still fall short of the POR force in terms of mission 

capability and capacity.14 Acquiring OPCs at a rate of one per year rather than two per year would also 

increase OPC unit procurement costs: A general rule of thumb for procurement of U.S. Navy shi~s is that 

reducing the annual procurement rate by half will increase unit procurement cost by about 10%.1 

As noted earlier, OPC acquisition costs might be reduced by using block buy contracting for the first 

several ships, followed by MYP contracting for subsequent ships in the program. The combined effect of 

annnal procurement rate and contracting strategy could make a substantial difference in OPC unit 

procurement costs: Based on the 10% figure above relating to annual procurement rates and the figures 

provided earlier for the potential savings from using MYP or block buy contracting, OPCs procured at a 

rate of two per year under an MYP or block buy contract might have a unit procurement cost roughly 15% 

to 20% less than that of OPCs procured at a rate of one per year without use of MYP or block buy 

contracting. 

Fast Response Cutter 

FRCs in recent years have been procured at a rate of 4 to 6 ships per year, which is consistent with the 

Coast Guard's contract with Bollinger Shipyards for building FRCs, which includes annual options for 

building 4 to 6 FRCs per year through FY2014. The FY20 14 ClP reduces the FRC procurement rate to 

two ships per year. As many observers have noted this year, procuring fewer rather than more FRCs per 

year increases FRC unit procurement costs and lengthens the time needed to achieve a patrol craft force 

capable of supporting desired levels of operational hours per year. Reducing the FRC procurement rate to 

less than four per year in FY2014 would require renegotiating the fmal year of the FRC contract with 

Bollinger. The Coast Guard might attempt to compensate for a slowed buildup in FRC numbers by further 

extending the service lives of its 1I0-foot patrol craft, but even with such life extensions, the Coast 

Guard's patrol craft force could still fall short of the POR force in terms of mission capability and 

capacity.16 As noted earlier, FRC acquisition costs might be reduced by shifting to MYP contracting. 

13 See Admiral Papp's May 14,2013, testimony to the Homeland Security subcommittee of the Senate Appropriations 

Committee. 

14 Source: Coast Guard briefing to CRS, June 14,2013. 

15 Mark V. Arena, et ai, Why Has the Cost of Navy Ships Risen? A Macroscopic Examination oflhe Trends in Us. Naval Ship 

Costs Over the Past Several Decades, Santa Monica (CA), RAND Corporation, 2006, p. 45. (Report MG-484) 

16 Source: Coast Guard briefing to CRS, June 14,2013. 
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9 

Polar Icebreaker 

The FY2013 CIP included a total of $860 million for a new polar icebreaker. The FY2014 CIP includes a 

total of $230 million-a reduction of $630 million, or 73%. (The reduction in the 4 common years of the 

two plans is $722 million, or 85%.) The FY2013 CIP included $120 million for the ship in FY20l4; the 

FY20 14 CIP reduces that to $2 million-a reduction of $118 million, or 98%. The Coast Guard states that 

these funding reductions do not materially change the schedule for acquiring the ship, for two reasons. 

First, the prohibition on new program starts that was in place under the continuing resolution (CR) that 

funded government operations from October 1,2012, until March 26, 2013 (R,J.Res 1I71P.L. 112-175 of 

September 28, 2012) will prevent the Coast Guard from fully using the $8 million in FY2013 funding that 

was provided for the program, permitting the unused portion to be carried over into FY2014. This carriedover funding, combined with the $2 million requested for FY2014, will be enough, the Coast Guard 

states, to fund FY2014 activities for the program. Second, and more generally, the Coast Guard states that 

it now has a more fully developed understanding of the schedule for the polar icebreaker project and that 

much of the funding for the ship included in the FY2013 CIP can now be viewed, in retrospect, as having 

been put into the plan ahead of need." 

As discussed in some detail in the CRS report on Coast Guard polar icebreaker modernization, studies on 

Coast Guard requirements for polar icebreakers have concluded that there are mission needs for multiple 

heavy polar icebreakers. IS As noted earlier, if the polar icebreaker program were expanded to include a 

second new ship, the cost of the two ships might be reduced through use of block buy contracting. 

Potential Options for Congress 

Potential options for Congress arising from this discussion include the following: 

• requesting information from the Coast Guard on the impact on funding for other 

programs in the CIP if 14 or more C-27s are not transferred to the Coast Guard and 

funding for continued RC-144A procurement cousequently needs to be put back into the 

CIP;19 

• directing the Coast Guard to provide 20-year projections of vessel and aircraft force 

levels by ship class and aircraft type, and resulting mission capabilities and capacities, if 

the Coast Guard's AC&1 account continued to be funded, in FY2013 dollars, at levels of 

$1 billion per year, $1.5 billion per year, $2 billion per year, and $2.5 billion per year; 

• encouraging or directing DRS to program a certain minimum amount of funding each 

year into the AC&1 account in the budget before the Congress and in the accompanying 

Five Year CIP; 

• providing the Coast Guard with greater autonomy from DRS in determining the funding 

level for the AC&I account in the budget before the Congress and in the accompanying 

Five Year CIP; 

• encouraging or directing DRS and the Coast Guard to use MYP and block buy 

contracting in Coast Guard ship and aircraft acquisition programs where appropriate, and 

to seek Navy technical assistance if necessary to facilitate this; and 

17 Source: Coast Guard briefing toCRS, June 14, 2013. 

" See CRS Report RL34391, Coast Guard Polar Icebreaker Modernization: Backgraund and Issuesfor Congress, by Ronald O!Rourke. 

19 As a related option, Congress might also request infonnation from the Coast Guard on the impact, if any, on unit procurement 

costs for the 19" and subsequent HC-144As of breaking the HC-144A production learning curve after the IS" aircraft--that is, of 

stopping HC-144A procurement after the 18" aircraft and men restarting HC-144A procurement at a later point. 
51 


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• reducing the Coast Guard's statutory missions to narrow the future potential gap between 

Coast Guard mission requirements and projected Coast Guard capability and capacity for 

performing those missions. 

10 

Regarding the final option above, if the Coast Guard's statutory missions are reduced, a follow-on issue 

would be whether the missions no longer assigned to the Coast Guard would be transferred to another 

agency, or simply not performed. If they are transferred to another agency, the question might then 

become whether that agency would have sufficient resources to perform the newly assigned missions, and 

if so, whether the agency could perform them more cost effectively than the Coast Guard. If the missions 

no longer assigned to the Coast Guard are simply not performed, the question might then become what 

the impact the non-performance of those missions might have on public safety, the economy, natural 

resources and the environment, and national security. Discussion of questions like these would underscore 

a point made earlier in this statement-that the FY20 14 CIP raises a fundamental question for Congress 

about the Coast Guard's ability to recapitalize its assets in a timely manner and adequately perform its 

statutory missions in coming years. 

Mr. Chairman, this concludes my statement. Thank you again for the opportunity to testifY, and I look 

forward to the subcommittee's questions. 
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214 Massachusetts Avenue, NE· Washington DC 20002· (202) 546-4400· heritage.org 

CONGRESSIONAL TESTIMONY 

The U.S. Should Recommit to 

Supporting Coast Guard 

Operations 

Testimony before 

Committee on Transportation and 

Infrastru cture 

United States House of Representatives 

June 26, 2013 

Steven P. Bucci, Ph.D. 

Director, Douglas and Sarah Allison Center for 

Foreign Policy Studies 

The Heritage Foundation 
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My name is Dr. Steven P. Bucci. I am the Director of the Douglas and Sarah Allison 

Center for Foreign Policy Studies at The Heritage Foundation. The views I express in this 

testimony are my own, and should not be construed as representing any official position 

of The Heritage Foundation. 

My responsibilities at The Heritage Foundation involve leading research and analysis for 

the foundation's public policy work concerning defense and homeland security issues. 

Prior to coming to The Heritage Foundation I served as an Army Special Forces officer 

for three decades and led deployments to eastern Africa, South Asia, and the Persian 

Gulf. I also served as Deputy Assistant Secretary of Defense for Homeland Defense, 

where I facilitated cooperation between the Department of Defense and the Department 

of Homeland Security. 

Thank you for the opportunity to appear before the committee and address this vital 

subject. 

The United States Coast Guard provides critical security to America's coastal regions, 

waterways, and ports. With missions ranging from search and rescue to ice operations, 

the Coast Guard responds to numerous threats in myriad environments. As a federal law 

enforcement agency, the sea service also performs critical missions such as drug 

interdiction, marine safety, migrant interdiction, and protecting living marine resources. 

Facing Growing Threats 

U.S. citizens and interests face daily threats within America's territorial waters. Last year 

The New York Times recounted an incident where the sea service interdicted an illegal 

semisubmersible vessel smuggling cocaine from Colombia. U.S. security forces have 

long combated smugglers bringing drugs and other contraband into the country via the 

Gulf Coast; however, semisubmersible and fully submerged vessels are emerging as a 

preferred means of transportation for these shipments, as it improves the smugglers' 

chances of going undetected. 

In the most recent run-in with these illegal vessels, the Coast Guard Cutter Mohawk 

utilized information from an interagency intelligence effort to locate the submersible and 

then pursued it with its deck-launched helicopter and fast boat. Though the smugglers 

were able to sink their vessel before the Coast Guard could salvage most of the cargo, 

this effort is considered a success both for the joint preparatory work performed in 

locating the smugglers and the proficiency the Mohawk crew showed in executing their 

interdiction mission. 

While the Coast Guard has successfully performed many similar operations, the sea 

service's role in the Caribbean and elsewhere will be increasingly burdened by an aging 

and shrinking fleet. The Mohawk is the newest of the Famous-class medium endurance 

cutters, commissioned in 1991. Many in this class are reaching the end of their 30-year 

service lives and will likely require extensions to fill mission gaps. According to the 
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Government Accountability Office, the Coast Guard's high- and medium-endurance 

cutters have been falling below performance expectations for a number of years. The 

bottom line: These vessels need replacement. 

Yet the Obama Administration is taking action to undermine this overhaul rather than 

accelerate it. The Offshore Patrol Cutter-the Coast Guard's intended replacement for 

both the Famous fleet and the Reliance-class Medium Endurance Cutters-is currently in 

limbo due to recent budget uncertainty. The National Security Cutter, the replacement for 

the extremely old Hamilton-class High Endurance Cutter, will shrink to a fleet of just six 

vessels under the President's fiscal year 2013 budget request, well below the original 

requirement of 16. 

This comes as a time when the Arctic is drawing intense international interest. The Coast 

Guard has recognized this trend and is pursuing more presence in the region, but will its 

resources be able to keep up with rapidly increasing traffic? 

Rear Admiral Thomas P. Ostebo, commander of the 17th District of the U.S. Coast 

Guard, recently testified before Congress during a field hearing about Arctic issues and 

the sea service's exercise "Arctic Shield 2012." 

Ostebo explained the purpose of the exercise, the lessons learned, and what new assets 

and capabilities they brought to the region. While the exercise is considered a success, the 

Coast Guard requires more resources to make these capabilities a reality. 

Notably at Arctic Shield, the Coast Guard stationed two helicopters in Barrow, Alaska 

(the northernmost point in the U.S.), to afford the sea service increased presence, 

situational awareness, and reach within the Arctic Circle. The USCGC Bertholf, the firstin-class of the National Security Cutter (NSC) fleet, also deployed to the region, marking 

an important milestone for a cutter class intended to provide increased range and 

presence farther from the coast. 

Both of these firsts indicate that the Coast Guard is aware of growing interests in the 

Arctic for natural resources such as hydrocarbons and fisheries, expanding sea lanes, and 

tourism. In spite of Arctic Shield's success, the Coast Guard may have trouble keeping up 

with real-world increased traffic in northern U.S. waters while executing its various other 

missions. 

The sea service has already been operating with old and overused equipment, particularly 

in its High Endurance Cutter fleet. The Hamilton-class fleet has been sailing since the 

1960s and has extended well beyond its intended service life. The NSC, intended to 

replace this fleet, has been cut from a requirement of 16 vessels to just eight. 

Sadly, the Coast Guard is having trouble meeting even that reduced requirement. The 

Department of Homeland Security's (DHS) FY 2014 budget followed through on 

requesting the seventh NSC, an improvement over the previous year, but makes no 

2 
55 


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mention of the eighth. The House of Representatives rectified this by adding advanced 

funding for the eighth NSC. 

Other fleet priorities include two other cutters replacing old, worn-out legacy fleets: the 

Fast Response Cutter and the Offshore Patrol Cutter. The Coast Guard intends to build a 

total of 58 Fast Response Cutters. This year's DRS budget request called for only two 

FRCs to be built rather than the four that had previously been planned. The Offshore 

Patrol Cutter was similarly halved, receiving in FY 2014 $25 million in developmental 

funding instead of the $50 million in FY 2013. 1 Congress shoul<l investigate further the 

consequences ofthese reductions before deciding how to fund the two critical cutter 

programs. 

Critical to Coast Guard missions in the Arctic is America's icebreaking capability. 

Regrettably, the Coast Guard has fallen below its icebreaker requirements as well. The 

sea service's own "high latitude study" concluded that, to accomplish all its polar 

missions, the Coast Guard requires three heavy-duty and three medium icebreakers. 

Currently, the service sails one medium icebreaker and is keeping two heavy-duty 

icebreakers afloat (though neither is operational). Funding has been received to restore 

the heavy-duty Polar Star to working order for an additional seven to 10 years, though it 

is well past its planned service life. 

One can look to McMurdo Station, Antarctica, to witness the effect this depleted force is 

having. The U.S. has had to rely on Russian icebreakers to clear the way for U.S. supplies 

to the station. The Coast Guard is called upon to operate in both polar regions on opposite 

ends of the world with just one moderately capable and one barely operational icebreaker. 

This is unacceptable. 

A new heavy-duty icebreaker would cost nearly a billion dollars and take a decade to 

build. This year the Department of Homeland Security requested $2 million in 

developmental funding to this end. With an overall recapitalization budget of $743 

million in FY 2014 for all of its vessels, the Coast Guard would have to direct a huge 

portion of its total budget just to fund the icebreaker. Rather than waste money trying to 

develop an increasingly unachievable vessel, the Coast Guard should instead seek to 

lease existing foreign commercial icebreakers to provide the primary capabilitybreaking ice-at least until it develops a more feasible and cost-effective plan. This in 

tum would require a waiver to the Jones Act, a protectionist law which restricts foreign 

built vessels from serving in certain capacities in U.S. waters. 

Maintaining Maritime Security Through Support of the Coast Guard 

If Congress does not act to correct the chronic underfunding of the Coast Guard's fleet 

revitalization, the sea service must continue to operate in aging craft. As they require 

I Ronald O'Rourke, "Coast Guard Cutter Procurement: Background and Issues for Congress," 

Congressional Research Service Report/or Congress, June 7, 2013, 

http://www.fas.org/sgp/crsiweapons/R42567.pdf(accessed June 24, 2013). 

3 
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increasing maintenance with age and mileage, these vessels will continue to incur greater 

costs for maintenance and repair, thus steering resources away from the more capable 

replacements that the Coast Guard needs. One can see the downward spiral this creates. 

While the Coast Guard continues to perform its missions admirably, they will find it 

increasingly difficult to keep up the pace with insufficient resources and equipment. 

Congress, in fulfilling its constitutional responsibility to provide for the common defense, 

should make a commitment to the Coast Guard to protect America's seas and waterways. 

******************* 

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4 
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Testimony of Lawrence Korb Before the Subcommittee on Coast Guard and Maritime 

Transportation Regarding "Coast Guard Readiness: Examining Cutter, Aircraft and 

Communications Needs" 

June 26, 2013 

Chairman Hunter and Ranking Member Garamendi, I appreciate the opportunity to appear before you 

today to discuss the critical subject "Coast Guard Readiness: Examining Cutter, Aircraft, and 

Communications Needs." 

It is also an honor to appear with Vice Admiral John Currier, the longest serving Coast Guard Aviator, 

Ronald O'Rourke, who has done such great work on these issues over the years for the Congressional 

Research Service, and retired Army Colonel Steven Bucci, who served the country for three decades, 

most of it in the Special Forces. 

My associations with and respect for the nation's oldest continuous maritime service date back to the 

1960s. It began during my time as a naval officer working with Coast Guard people patrolling off the 

coast of Vietnam in the late 1960s, continued during my four years as an instructor at the U.S. Coast 

Guard Academy in the 1970s, and carried on through my five years in the Pentagon in the 1980s when I 

was Secretary Weinberger's point man on the war on drugs. Most recently, I observed the Coast Guard's 

contributions to the war in Iraq during my three trips to the country. I might also add that on more than 
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one occasion the long range aids to navigation (Loran) facility they maintained in the Western Pacific 

kept my patrol planes from becoming helplessly lost. 

Over the years of my association with and appreciation for the Coast Guard, one aspect of the culture 

has troubled me. The men and women of the Coast Guard's unofficial motto seems to be "we can do 

more with less." Unfortunately, in today's bureaucratic culture, you get less even if you do more, unless 

you mount a large public relations effort. 

Compare the reactions of the other military services to sequestration to that of the Coast Guard. 

According to the Navy, sequestration will return it to where it was before World War I. The Army and Air 

Force have painted similarly apocalyptic scenarios. But the Commandant of the Coast Guard was much 

more restrained when he told you, on April 16, 2013 that, "much like the weather and the seas we face 

on a daily basis, the Coast Guard cannot control the environment in which we operate. We will make 

the best use of the resources you provide to safely and efficiently conduct operations in the area of 

greatest risk to the nation." This is a noble line befitting the best traditions of the service. But it is time 

we stopped letting the Coast Guard face these storms alone. 

As Senator John McCain(R-AZ) pointed out in an article he wrote for Foreign Policy on April 26, 2013, the 

nation's other military services have more of a management problem than a monetary problem. Senator 

McCain argued that: 

"We have to acknowledge an inconvenient fact: Sequestration has occurred, in part, because of a 

growing public frustration with the culture of waste and inefficiency at the Defense Department {which] 
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went unaddressed for too long. During my time in the Senate, I have witnessed the emergence of a 

military-industrial-congressional complex that has corrupted and crippled the defense acquisition 

process. This system can now be said to be successful only in one respect: turning billions of toxpayer 

dollars into weapons systems that are consistently delivered late, flawed, and vastly over budget - if 

that is, these systems are delivered at all." 

"For example, there was the Expeditionary Combat Support System, which the Air Force had to cancel 

last year after wasting roughly $1 billion and receiving no combat capability. The Littoral Combat Ship 

already costs nearly twice as much per ship as planned. A recent study found that from 2004 to 2010 

cancelled programs consumed an average of 35-45 percent of the Army's annual budget for research, 

development, testing, and evaluation (RDT&E). The Joint Strike Fighter, which will become the first 

trillion-dollar weapon system in history, is being purchased before being properly tested, which drives up 

costs enormously. And even now the system is still not fully proven. These chronic cost overruns even 

extend to our military basing; the estimated cost of realigning U.S. force posture in the Asia-Pacific 

region had nearly tripled before the Senate Armed Services Committee intervened and effectively 

demanded a new plan. " 

"If Republican internationalists want to save our military from this sequester and future sequesters, we 

will have to demand a lot more from the Defense Department. This means insisting that they "buy 

smart" -focusing their limited resources on systems ond services that promise a return on investment. It 

means ensuring that the Defense Department is as good at buying defense programs as industry is at 

selling them. It means encouraging real competition for contracts, setting realistic program goals, and 

managing them aggressively in ways that encourage innovation and productivity. It means making hard, 
60 


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unpopular chaices to limit the spiraling growth of personnel and health care casts that are devouring the 

defense budget. And on overseas military force posture, it means moving away from expensive 

permanent basing arrangements in favor of less costly rotational deployments, possibly co-located in 

host nation facilities. Absent real changes like these, public pressure will only build to cut defense more 

and more." 

But unlike the other military services, the Coast Guard has a serious money problem. In FY 2006, the 

base defense budget was $410 billion; by FY 2012 it had grown to $526 billion, an increase of $116 

billion or 28 percent. During that same period the Coast Guard budget grew from $8.9 billion to only 

$10.4 billion, an increase of only $1.5 billion or under 17 percent. The total investment budget of the 

Coast Guard for FY 2014 is less than $1 billion and will remain at that level for the next five years. This is 

less than the cost of procuring one Virginia class submarine. By way of contrast the Pentagon's 

investment budget is: 

"$167.6 billion for equipment, systems, reseorch, technology development, and weapons for FY 2014. Of 

this amount, $67.6 billion is for RDT&E efforts, and $99.3 billion for Procurement of equipment (also, an 

additional $0.7 billion is budgeted for other Investment related expenses). Of this amount, 40 percent 

($69.4 billion) is being budgeted for the Major Defense Acquisition Programs (MDAP) efforts, to include 

primarily war fighting weapon systems. ,,1 

The Coast Guard request for FY 2014 is $9.7 billion, while the Navy's request is $155.7 billion. This 

means that the Navy wants 16 times more money than the Coast Guard, even though the Navy has only 

8 times more people than the Coast Guard and the average age of Coast Guard ships is three times that 
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of the Navy. Meanwhile, the Navy will spend $16 billion on RDT&E', nearly double the Coast Guard's 

entire budget. 

The obvious answer to the Coast Guard's modernization needs is to provide it more funding, as the 

House Appropriations Committee recently noted: 

"Over the last several years, the Department has continually requested a substantial reduction in funding 

that wauld degrade the Coast Guard's operational capabilities and military workforce without proposing 

a compensatory propasal to rebuild the depleted capacity in the long term by investing in recapitalized 

assets. Those proposals had obvious, adverse implications for the Coast Guard's critical statutory 

missions of maritime safety, coastal security, and drug interdiction; ignored current threat activity and 

the ramifications for the Department's broader security and response efforts; and were resoundingly 

rejected by Congress. 

The fiscal year 2014 proposal is even more egregious, and gives the impression that this Administration 

does not appropriately value the work of the Coast Guard. It includes the lowest level of drug interdiction 

effectiveness in the past five years and reduces recapitalization funding to unsustainable levels. Over the 

past decade when our Nation has called for help, the Coast Guard has responded: they responded on the 

morning of 9/11 by helping untold numbers of people evacuate the devastation of lower Manhattan; 

they responded during the aftermath of Katrina by saving survivors stranded on rooftops; they 

responded by being the first to arrive in Haiti after an earthquake hit the country and killed thousands; 

and more recently, they responded ta the worst oil spill in the history of our Nation. 
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If the country intends for the Coast Guard of tomorrow to be as effective as the Coast Guard we have 

today, and have depended on for decades, these reductions must be resoundingly rejected. Within the 

recommendation, the Cammittee has made targeted increases to address the inadequacy of the 

Deportment's request-adding capacity to the Coast Guard for today and for tomorrow. H 

In my view, as we pointed out in our report Building a Coast Guard for the 21" Century, the Coast Guard 

budget should be at least $15 billion. The question is: where the money will come from in this period of 

austerity? 

The obvious answer is for the Administration and Congress to develop a Unified National Security 

Budget, as a number of defense experts have long advocated, which would allow the executive and 

legislative branches to make trade-offs between all the military services, not just those in the 

Department of Defense. For example, if we are concerned about a nuclear threat from Iran, should we 

build East Coast missile sites, at a cost of several hundred million dollars and without much 

demonstrated success, or give that money to the Coast Guard for port security? Are the Iranians or any 

country more likely to launch a missile with a return address, knowing we could launch an overwhelming 

response, or are they more likely to try to smuggle it in through one of our vulnerable ports? 

Other steps that could be taken include making the Commandant a voting member of the Joint Chiefs of 

Staff (the head of the National Guard was just added) and apPOinting a high level civilian equivalent to a 

service secretary to become an advocate for the Coast Guard within the Department of Homeland 

Security. 
63 


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In conclusion let me say that the Coast Guard is, always has been, and always will be one of America's 

great bargains. While its budget pales in comparison with that of the other military services, the 

functions it performs for the country rival those of the other military services. But unlike the other 

services, for too long it has been content to embrace its unofficial motto of doing more and more with 

less and less. This must change. 

It is time for the Coast Guard and the nation to fully embrace its official motto, semper paratus - always 

ready. The Coast Guard needs to continue fulfilling the security responsibilities thrust upon it since the 

September 11th terrorist attacks and must deal with the problems caused by climate change. As such, 

its baseline budget should increase immediately by $S billion to about $15 billion a year, and it should 

remain at that level in real terms for at least five more years, so that the Coast Guard can manage its 

acquisition programs rationally. This level of funding would still be far less than that allocated to many 

individual programs in the Department of Defense, let alone any of the nation's four other armed 

services. In addition, it must make the organization and administrative changes that I have already 

outlined. 

If it does not receive the additional funds and make these changes, the consequences for the nation 

could be severe. To take just one example: if Iran, North Korea, or a violent extremist is able to smuggle 

a nuclear weapon into this country in a shipping container because the Coast Guard did not have the 

manpower or equipment to stop it, the results could be catastrophic. The responsibility falls on the 
64 

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Insert offset folio 39 here 81676.039

Administration and Congress to ensure that the Coast Guard can make the organizational changes and 

acquire the resources necessary to always be ready. 

1 Source: United States Department of Defense Fiscal Year 2014 Budget Request Overview: 

http:// com ptroller .defense.gov /defbudget/fy2014/FY2014 _ Budget_Request_ Overview _ Book. pdf 

'Information Paper: http://www.finance.hq.naw.mil/fmb/14pres/FY 2014 PB Overview. pdf