Coast Guard: Actions Underway to Develop Acquisition Plans that Reflect New Assets and Improve the Asset Allocation Process
Published: 2016-06-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Following the terrorist attacks of September 11, 2001, the Coast Guard has been charged with expanded security-related missions. Constrained budgets in recent years have underscored the importance of ensuring that the Coast Guard has the proper mix of assets and that it can effectively allocate these assets to achieve its missions. In recent years, the Coast Guard has begun to deploy new assets, and has taken actions to assess what assets it needs to carry out its missions and how to best allocate its current assets. However, the Coast Guard continues to face decisions about what assets it needs and how to best allocate these assets to meet its mission responsibilities.
This statement addresses the Coast Guard's (1) mission needs, and (2) process for allocating asset resource hours across missions and units. This testimony is based on GAO's May 2016 report on the Coast Guard's allocation of assets, and GAO's body of work over the past 6 years on Coast Guard major acquisitions, as well as selected updates obtained in May 2016. For the selected updates, GAO reviewed Coast Guard documentation and analyzed fiscal year 2015 data on Coast Guard asset resource hour utilization, which GAO found to be sufficiently reliable for the purposes of this testimony statement.
section_title: What GAO Found
paragraphs: Since the U.S. Coast Guard developed acquisition plans for its asset recapitalization program, many of the assumptions that initially informed these documents, including its 2005 Mission Needs Statement baseline, are no longer accurate. For example, in March 2015, GAO reported that the Coast Guard received an unexpected transfer of 14 C-27J aircraft from the Air Force, representing a significant change to its aircraft fleet mix. In addition, Congress recently provided the Coast Guard with funding for a ninth National Security Cutter—one more than it had planned for in 2005. Further, the Coast Guard has reduced the operational capacities of several assets to reflect more realistic and achievable operational targets. For example, the Coast Guard reduced the operational capacity of the Fast Response Cutter from 3,000 hours per vessel per year to 2,500 hours. GAO has also consistently found that there is a significant difference between the funding the Coast Guard estimates it needs for its major acquisitions and what it has traditionally requested and received. The Coast Guard's attempts to address this difference by establishing its future fleet's mission needs within reasonable budget constraints have been unsuccessful. GAO has made several recommendations for the Coast Guard to improve its recapitalization business case, including that the Coast Guard develop a 20-year fleet modernization plan that identifies all acquisitions needed to maintain the current level of service and the fiscal resources needed to acquire them. The Coast Guard concurred with the recommendation and has actions underway, but has not completed this plan. Given that key changes have taken place since 2005, the Coast Guard should continue to take steps to address GAO's recommendations.
GAO reported in May 2016 that the Coast Guard uses the Standard Operational Planning Process to annually allocate asset resource hours to field units for meeting missions, but the headquarters' Strategic Planning Directions used in this process do not provide field units with strategic, realistic goals. Rather, headquarters' Strategic Planning Directions allocate maximum resource hour capacities for each asset. These allocations have consistently exceeded actual asset resource hours used by field units. GAO recommended, among other things, that the Coast Guard more systematically incorporate field unit input to inform more realistic asset allocation decisions—in addition to asset maximum capacities currently used—in the annual Strategic Planning Directions to more effectively communicate strategic intent to field units. The Coast Guard concurred with GAO's recommendation and stated that it was taking actions to better incorporate field unit input for fiscal year 2017.
section_title: What GAO Recommends
paragraphs: GAO is not making any new recommendations in this statement.

section_title: Letter
paragraphs: Thank you for the opportunity to discuss our work on the Coast Guard’s  mission needs and asset allocation process. The U.S. Coast Guard,  within the Department of Homeland Security (DHS), is the principal  federal agency responsible for maritime safety, security, and  environmental stewardship. Following the terrorist attacks of September  11, 2001, the Coast Guard was charged with expanded security-related  mission responsibilities. The impact of balancing a broad array of Coast  Guard missions, in conjunction with constrained budgets in recent years,  have underscored the need for the Coast Guard to ensure it has the  proper mix of assets and can effectively allocate them to achieve its  mission responsibilities. In recent years, the Coast Guard has begun to  deploy new assets, such as National Security Cutters and Fast Response  Cutters, and has taken actions to assess what assets it needs to carry out  its missions and how to best allocate its current assets. For example, in  2008, it developed an annual planning process to allocate asset resource  hours across its missions and units. Further, in 2016, the Coast Guard  updated its Mission Needs Statement to provide an overview of its  missions and the capabilities required within the context of the current  and emerging strategic environment. We have reported extensively on  the Coast Guard’s challenges in managing its multi-billion dollar major  acquisition portfolio, intended to acquire assets and capabilities to  conduct its various missions. In addition, in May 2016, we reported on  the challenges that the Coast Guard faces in strategically allocating its  assets to meet its strategic goals. The Coast Guard continues to face  decisions about what assets it needs and how to best allocate those  assets to meet its mission responsibilities.
My testimony today addresses the Coast Guard’s mission needs and its  annual Standard Operational Planning Process, used to allocate assets  across missions. It is primarily based on our May 2016 report on the  Coast Guard’s allocation of assets; as well as prior reports on the Coast  Guard’s acquisition of assets, In addition, my statement includes  selected updates from May 2016 on the Coast Guard’s efforts to reassess  and update its mission needs, and fiscal year 2015 asset resource hour  data. For our past work, among other methodologies, we analyzed Coast  Guard guidance, data, and documentation, and interviewed Coast Guard  officials at its headquarters and field units to determine how the Coast  Guard allocated its assets, how data are used to make annual asset  allocation decisions, and how the Coast Guard determines future  resource needs. The products cited in this statement provide detailed  information on our scope and methodology. To conduct the selected  updates, we reviewed Coast Guard documentation and interviewed Coast  Guard officials regarding the agency’s 2016 Mission Needs Statement  and efforts to update acquisition plans. We also analyzed data on the  Coast Guard’s asset resource hours used in fiscal year 2015 and found  the data were sufficiently reliable for the purposes of this testimony. We  determined this by reviewing agency documentation and testing for  missing data, outliers, and obvious errors. We conducted this work in  accordance with generally accepted government auditing standards.  These standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions, based on our audit objectives.
subsections: section_title: Background
subsections: section_title: The Coast Guard’s Missions and Assets
paragraphs: The Coast Guard is responsible for 11 statutory missions that are divided  into non-homeland security and homeland security missions, as shown in  table 1. The Homeland Security Act of 2002 requires that the authorities,  functions, and capabilities of the Coast Guard to perform all of its  missions be maintained intact and without significant reduction, except as  specified in subsequent acts. It also prohibits the Secretary of Homeland  Security from reducing “substantially or significantly…the missions of the  Coast Guard or the Coast Guard’s capability to perform those missions.”
The Coast Guard utilizes aircraft and vessels to conduct its 11 missions.  The Coast Guard operates two types of aircraft—fixed-wing (airplanes)  and rotary-wing (helicopters), including its new C-27J aircraft–and two  types of vessels–cutters and boats. A cutter is any vessel 65 feet in  length or greater, having adequate accommodations for crew to live on  board. Larger cutters (major cutters), over 179 feet in length, include the  National Security Cutter and the High and Medium Endurance Cutters.  Cutters from 65 to 175 feet in length include Patrol Cutters such as the  Fast Response Cutter and the 110-foot Patrol Boat, among others. In  contrast, all vessels less than 65 feet in length are classified as boats and  usually operate closer to shore and on inland waterways. As of the end of  fiscal year 2015, Coast Guard assets included 61 fixed-wing aircraft, 142  rotary-wing aircraft, 40 major cutters, 205 cutters, and 1,750 boats. Figure  1 shows three of the Coast Guard’s newest assets.
section_title: The Coast Guard’s Recapitalization Program, Mission Needs Determination, and Asset Allocation Process
subsections: section_title: Coast Guard Recapitalization Program and Mission Needs Determination
paragraphs: The Coast Guard began a 30-year recapitalization effort in the late 1990s  to modernize its aircraft and vessel fleets by rebuilding or replacing  assets. Figure 2 provides a timeline of key events and related acquisition  studies and reports in this recapitalization program, which was formerly  known as the Deepwater Program.
As part of its recapitalization effort, in 1998, the Coast Guard created the  Deepwater Program baseline to reflect asset performance levels at that  time and to serve as a basis for developing performance goals for the  acquisition of new assets that were to replace certain legacy assets.  However, a performance gap analysis conducted in 2002 determined the  revised asset mix, as designed by the recapitalization program, would  have significant capability gaps in meeting emerging mission  requirements following the September 11, 2001, terrorist attacks. As a  result, the Coast Guard completed a Mission Needs Statement in 2005 to  incorporate the additional capabilities and subsequently updated the  annual resource hours needed to meet its increased mission demands.
In 2007, based on the 2005 Mission Needs Statement, DHS approved a  program of record for all of the Coast Guard’s major acquisition programs  at an estimated cost of $24.2 billion. This program of record delineated  the specific number of aircraft and vessels the Coast Guard planned to  acquire to meet the annual resource hours outlined by the 2005 Mission  Needs Statement baseline. Further, as part of its recapitalization efforts,  the Coast Guard submits an annual 5-year Capital Investment Plan  Report to Congress that includes, among other things, projected funding  for capital assets in such areas as acquisition, construction, and  improvements.
In 2016, the Coast Guard again revised its Mission Needs Statement in  response to statutory requirements and committee report language, but,  this revision states it was not intended to provide details on the specific  assets the Coast Guard needs to meet its mission requirements.  Further, according to the Coast Guard, the 2016 update to the Mission  Needs Statement is to provide a foundation for long-term investment  planning that is to culminate with detailed modeling scenarios to evaluate  the effectiveness of various fleet mixes, and inform the Coast Guard’s  Capital Investment Plan. Since the 2016 revision does not identify specific  assets or resource hours necessary to meet the Coast Guard’s mission  requirements, the 2005 Mission Needs Statement remains the baseline  document outlining the Coast Guard’s mission needs and the resource  hours per asset necessary to achieve them.
section_title: The Coast Guard’s Process for Allocating Assets to Meet Mission Responsibilities
paragraphs: Since fiscal year 2008, the Coast Guard has used the Standard  Operational Planning Process for annually developing and  communicating strategic commitments and allocating resource hours, by  asset type (i.e., aircraft, cutters, and boats), throughout its chain of  command for meeting mission responsibilities. As part of the Standard  Operational Planning Process, Coast Guard headquarters annually  issues a Strategic Planning Direction, which is to be the primary  mechanism for allocating asset resource hours and providing strategic  direction to field commands. Resource hours are subsequently allocated  by asset type at the Area, District, and Sector levels for meeting strategic  commitments and executing the 11 statutory missions.
After assets are deployed, field unit personnel are to record resource  hours used by Coast Guard assets to accomplish missions, such as  domestic ice breaking or marine environmental protection operations.  These asset resource hours are input into one of two operational  reporting databases–the Asset Logistics Maintenance Information System  (ALMIS) or the Abstract of Operations System (AOPS). After the data  have been entered, the Coast Guard Business Intelligence system is  used to extract and combine asset resource hour and performance data  each quarter to create Operational Performance Assessment Reports.  The historical and current-year data on asset operational hours used, by  mission, from these reports, as well as Planning Assessments, are to be  communicated back to Coast Guard headquarters and incorporated into  the Standard Operational Planning Process to inform asset hour  allocations in the Strategic Planning Direction for the following year.
section_title: The Coast Guard’s Acquisition Plans Do Not Reflect Its New Assets and Current Funding Levels
subsections: section_title: The 2005 Mission Needs Statement Baseline Does Not Reflect the Coast Guard’s Planned Assets and Capacities
paragraphs: Since the Coast Guard developed acquisition plans for its Deepwater  recapitalization program, many of the assumptions that initially informed  these plans, including the 2005 Mission Needs Statement baseline for  those assets, have changed and are no longer accurate, as we reported  in June 2014 and May 2015. While the Coast Guard is continuing to  acquire and deploy new assets each year, the Coast Guard operated  assets in fiscal year 2015 below the baseline level of resource hours  outlined for these assets in the 2005 Mission Needs Statement. For  example, in fiscal year 2015, a mix of new and legacy Patrol Cutters,  including new Fast Response Cutters, used 82,233 resource hours of the  174,000 resource hours specified in the 2005 baseline—a 52 percent  difference. The asset resource hours used in fiscal year 2015 were  below the 2005 baseline level, in part, because not all of the new assets  planned as part of the 2005 baseline were deployed and fully operational  by fiscal year 2015. In addition, as we have previously reported, the  Coast Guard continues to operate many of its legacy assets, which do not  always achieve their expected operational capacities. Specifically, some  legacy cutters are up to 50 years old and are expected to be in operation  for several more years until the replacement cutters can be deployed.  We have also reported that the Coast Guard has experienced delays in  acquiring some of its planned assets and some of the Coast Guard’s  new assets that have been deployed have faced operational challenges.  Nevertheless, because of changes in the assumptions underlying the  2005 Mission Needs Statement baseline, it may not accurately reflect the  Coast Guard’s current needs, specifically (1) the planned fleet mix of  aircraft and vessels has changed, and (2) the planned operational  capacities of these new assets have, in some cases, been revised  downward. See Appendix I for more information on the Coast Guard  asset baselines and actual resource hours used in fiscal year 2015, as  well as changes to its planned fleet mix and operational capacities over  time.
subsections: section_title: Changes in the Coast Guard’s Planned Fleet Mix
paragraphs: The Coast Guard’s planned aircraft and vessel fleet mix has changed  since the 2005 Mission Needs Statement baseline was developed. For  example, in 2005, the Coast Guard planned for the acquisition of HC-144  and HC-130 aircraft for its fixed-wing aircraft fleet. However, we reported  in March 2015 that the unexpected transfer of C-27J aircraft from the  Department of Defense in December 2013 represented a significant  change to this aircraft fleet mix. As a result of this change, the Coast  Guard decreased its planned acquisition of HC-144 aircraft. In another  example, with regard to its aircraft fleet, the Coast Guard initially planned  for fixed-wing Unmanned Aerial Vehicles and Vertical Take-Off and  Landing Unmanned Air Vehicles in the 2005 baseline, but, as of May  2016, Coast Guard officials stated these unmanned assets have not yet  been acquired. For the major cutter fleet, the Coast Guard had planned  for 8 National Security Cutters and 25 Offshore Patrol Cutters to replace  the legacy fleet of High and Medium Endurance Cutters in its 2005  Mission Needs Statement baseline. However, Congress recently provided  the Coast Guard with funding for a ninth National Security Cutter as part  of the Consolidated Appropriations Act, 2016, representing an  unanticipated addition to its planned major cutter fleet.
section_title: Reductions in New Assets’ Planned Operational Capacities
paragraphs: The expected operational capacities planned for assets in the 2005  Mission Needs Statement baseline have, in several cases, been  subsequently revised downward to reflect more realistic and achievable  operational targets. For example, regarding fixed-wing aircraft, the Coast  Guard originally planned for each HC-144 aircraft to operate 1,200 flight  hours per year. However, we reported in March 2015 that the Coast  Guard had decided to reduce the HC-144 flight hours from 1,200 hours to  1,000 hours per year due primarily to the high cost of maintaining the  aircraft at the 1,200-hour per year pace. For patrol cutters, the 2005  Mission Needs Statement baseline planned for each Fast Response  Cutter to operate for 3,000 hours per year. However, the Coast Guard’s  April 2016 report to Congress on its capital investments states that the  planned resource hours for each Fast Response Cutter is 2,500 hours per  year—a reduction of 500 hours per cutter from the 2005 baseline.  Further, for major cutters, the Coast Guard’s 2005 baseline planned for  each National Security Cutter and Offshore Patrol Cutter to operate at  4,140 resource hours per year—equivalent to 230 days away from home  port—using a crew rotation concept. However, in March 2015, we  reported that because of certain risk factors, uncertainty exists regarding  the Coast Guard’s ability to achieve this operational capacity. We  recommended that the Coast Guard specify mitigation actions to  effectively address risk factors identified in the report, such as when and  how National Security Cutter maintenance requirements could be  completed within the 135 days allocated under the crew rotational  concept. DHS concurred with the recommendation and, in March 2016, it  stated that the Coast Guard was developing various testing plans and  would submit a final crew rotation concept plan to Congress by December  2017, in response to requirements in the Coast Guard and Maritime  Transportation Act of 2012. Moreover, we noted in our March 2015  report that these same risk factors may also affect the planned  operational capacity of the Offshore Patrol Cutters, which are still under  development.
section_title: The Coast Guard Continues to Recapitalize Assets without a Solid Business Case that Matches Its Needs and Resources
paragraphs: In its simplest form, a business case requires a balance between the  concept selected to satisfy mission needs and the resources needed to  transform the concept into a set of products, in this case aircraft and  vessels. For the past 6 years, we have consistently found that there is a  significant difference between the funding the Coast Guard estimates it  needs to carry out its program of record for its major acquisitions and  what it has traditionally requested and received through annual  appropriations. To date, the Coast Guard’s attempts to address this  difference by establishing its future fleet’s mission needs within  reasonable budget constraints have been unsuccessful. For example, in  September 2012, we reported that the Coast Guard had completed two  efforts (Fleet Mix Phases One and Two) to reassess the mix of assets  that comprised its former Deepwater program, but both efforts used its  2005 Mission Needs Statement and 2007 program of record as the basis  of the analysis and did not consider realistic fiscal constraints. In  particular, the Coast Guard began Fleet Mix Phase One in 2008 that  considered the 2007 program of record to be the “floor” for asset  capabilities and quantities and did not impose cost constraints.  Consequently, the results were not used as a basis for trade-off  decisions. In the second effort, Fleet Mix Phase Two, the Coast Guard  analyzed how long it would take to buy the program of record under two  different funding constraints: (1) an upper bound of $1.64 billion per year  and (2) a lower bound of $1.2 billion per year. However, both scenarios  are greater than the Coast Guard’s last four budget requests, indicating  the upper bound funding level is unrealistic and the lower bound is  optimistic. Further, the analyses did not assess options lower than the  current program of record. Therefore, neither of these analyses prepared  the Coast Guard to make the trade-offs required to develop a solid  business case that matched its needed capabilities with anticipated  resources.
Instead of developing a solid business case, we reported in June 2014  that the Coast Guard is shaping its asset capabilities through the budget  process. As the Coast Guard has faced fiscal constraints in recent  years, this has led to asset capability gaps. As a result, the Coast Guard  does not have a long-term plan that demonstrates how it will maintain  today’s service level and meet identified needs. For example, the Coast  Guard has already experienced a gap in heavy icebreaking capability and  is falling short of meeting current and future major cutter operational  hours. While some of these operational capability gaps are being filled  through Congressional appropriations that exceed Coast Guard budget  requests and transfers of assets from other agencies, the Coast Guard is  likely to continue to face similar shortfalls and gaps while the Offshore  Patrol Cutter fleet, estimated to absorb about two-thirds of the Coast  Guard’s acquisition funding from 2018 until 2034, is being built. During  this time, the Coast Guard faces other recapitalization needs—such as  rebuilding the 87-foot patrol boat fleet, the MH-60 and MH-65 helicopter  fleets, and possibly extending the service lives of the 270-foot Medium  Endurance Cutters, among many other projects—that it may not be able  to fund with its remaining budget. Office of Management and Budget,  Department of Homeland Security, and Coast Guard efforts are underway  to address these funding gaps, but to date, these efforts have not led to  the difficult trade-off decisions needed to create a solid business case  and improve the affordability of the Coast Guard’s proposed fleet mix. We  recommended in June 2014, that the Coast Guard develop a 20-year fleet  modernization plan that identifies all acquisitions needed to maintain the  current level of service—aircraft and vessels—and the fiscal resources  needed to buy the identified assets. We further recommended that the  plan should consider trade-offs if the fiscal resources needed to execute  the plan are not consistent with annual budgets. The Coast Guard  concurred with our recommendation, but its response did not fully  address our concerns or set forth an estimated date for completion. As  of June 2016, the Coast Guard has yet to complete this plan. Without  such a plan, it will remain difficult for the Coast Guard to fully understand  the extent to which future needs match the current level of resources and  its expected performance levels—and capability gaps—if funding levels  remain constant.
subsections: section_title: Past GAO Recommendations
paragraphs: In addition to the 20-year fleet modernization plan, we have made several  recommendations in recent years for the Coast Guard to improve its  recapitalization business case by, among other things, identifying the  cost, capabilities, and quantity and mix of assets needed; as well as the  trade-offs necessary to meet fiscal constraints. Specific  recommendations include the following:  In March 2015, we recommended that the Coast Guard inform  Congress of the time frames and key milestones for publishing  revised annual flight hour needs for fixed-wing aircraft, as well as the  corresponding changes to the composition of its fixed-wing fleet to  meet these needs.
In September 2012, we recommended that the Commandant of the  Coast Guard conduct a comprehensive portfolio review to develop  revised baselines that reflect acquisition priorities and realistic funding  scenarios.
In July 2011, we recommended that the Secretary of Homeland  Security develop a working group that includes participation from DHS  and the Coast Guard’s capabilities, resources, and acquisition  directorates to review the results of multiple studies—including Fleet  Mix Phases One and Two and DHS’s cutter study—to identify cost,  capability, and quantity trade-offs that would produce a program that  fits within expected budget parameters.
The Coast Guard concurred with these recommendations, but is still in  the process of addressing all recommendations, except the 2011  recommendation that they chose not to implement. For example, the  Coast Guard is currently conducting a fleet-wide analysis—including  aircraft, vessels, and information technology—intended to be a  fundamental reassessment of the capabilities and mix of assets the Coast  Guard needs to fulfill its missions. The Coast Guard is undertaking this  effort consistent with direction from Congress and expects to have it  completed to inform the fiscal year 2019 President’s Budget.
section_title: Legislative Requirements and Congressional Mandates
paragraphs: Coast Guard officials stated that their efforts will help them to respond to  a number of recent legislative mandates, which include the following:
Fixed-Wing Aircraft Fleet Mix Analysis: This is to include a  revised fleet analysis of the Coast Guard’s fixed-wing aircraft and is  due in September 2016.
Rotary-wing Contingency Plan: This plan is to address the  planned or unplanned losses of rotary wing airframes; to reallocate  resources as necessary to ensure the safety of the maritime public  nationwide; and to ensure the operational posture of Coast Guard  units. This plan is due in February 2017.
Long-Term Acquisition Plan: This plan is to be a 20-year Capital  Investment Plan that describes for the upcoming fiscal year and for  each of the 20 fiscal years thereafter, such information as the  numbers and types of legacy aircraft and vessels to be  decommissioned; the numbers and types of aircraft and vessels to be  acquired; and the estimated level of funding in each fiscal year  required to acquire the cutters and aircraft, as well as related  command, control, communications, computer, intelligence,  surveillance, and reconnaissance systems and any changes to  shoreside infrastructure. These plans are to be produced every other  year to provide an update on the status of all major acquisitions.
Mission Needs Statement: On the date on which the President  submits to Congress a budget for fiscal year 2019 and every 4 years  thereafter, the Commandant is to submit an integrated major  acquisition need statement which, among other things, is to identify  current and projected gaps in Coast Guard capabilities using specific  mission hour targets and explain how each major acquisition program  addresses gaps identified in Capital Investment Plan reports to be  provided to Congress.
Concept of Operations: This document is to be used in conjunction  with the Mission Needs Statement as a planning document for the  Coast Guard’s recapitalization needs. It is to determine the most cost- effective method of executing mission needs by addressing (1) gaps  identified in the Mission Need Statement, (2) the funding requirements  proposed in the 5-year Capital Investment Plan, and (3) options for  reasonable combinations of alternative capabilities of aircraft and  vessels, to include icebreaking resources and fleet mix. This  document is due in September 2016.
section_title: Use of Asset Capacities Limit the Strategic Effectiveness of the Asset Allocation Process, but the Coast Guard Is Taking Steps to Improve the Process
subsections: section_title: Coast Guard Headquarters’ Strategic Planning Directions Reflect Asset Maximum Capacities Rather Than Achievable Goals
paragraphs: In May 2016, we reported that Coast Guard headquarters does not  provide field units with realistic goals for allocating assets, by mission.  Rather, headquarters’ allocations of assets in the annual Strategic  Planning Directions that we reviewed for fiscal years 2010 through 2016  were based on assets’ maximum performance capacities. For example,  the Strategic Planning Directions allocated each Hercules fixed-wing  aircraft 800 hours per year, each Jayhawk helicopter 700 hours per year,  and each 210-foot or 270-foot Medium Endurance Cutter 3,330 hours per  year, irrespective of the condition, age, or availability of these assets. As  a result, we found that, as shown in figure 3, the asset resource hours  allocated in the Strategic Planning Directions have consistently exceeded  the asset resource hours actually used by Coast Guard field units during  fiscal years 2010 through 2015. For example, in fiscal year 2015, the  Strategic Planning Direction allocated a total of 1,075,015 resource hours  for field unit assets whereas the actual asset resource hours used was  804,048 hours, or about 75 percent of the allocated hours for that year.
Coast Guard field unit officials we spoke with, and Coast Guard planning  documents we reviewed for our May 2016 report, indicated that the Coast  Guard is not able to achieve the resource hour allocation capacities set  by the headquarters’ Strategic Planning Directions for several reasons,  including the declining condition of legacy assets and unscheduled  maintenance. Further, we also reported that our review of Coast Guard  planning documents and discussions with field unit officials showed that  Operational Planning Directions developed by field unit commands can  differ from headquarters’ Strategic Planning Directions. For example,  officials from one district told us on the basis of their analyses, they  determined that their district could realistically use only about two-thirds of  the performance capacity hours allocated by the Strategic Planning  Direction for boats for one mission.
In response to our findings, we recommended that the Coast Guard more  systematically incorporate field unit input to inform more realistic asset  allocation decisions—in addition to asset maximum capacities currently  used—in the annual Strategic Planning Directions to more effectively  communicate strategic intent to field units. The Coast Guard concurred  with our recommendation and stated that it was taking actions to better  incorporate field unit input for fiscal year 2017. If implemented as  planned, this would meet the intent of this recommendation.
section_title: The Coast Guard Does Not Document the Extent to Which Risk Assessments Affect Asset Allocation Decisions
paragraphs: In May 2016, we also reported that the Coast Guard does not maintain  documentation on the extent to which risk factors have affected the  allocation of asset resource hours to missions through its Strategic  Planning Directions. For example, Coast Guard officials told us that the  Coast Guard conducts a National Maritime Security Risk Assessment  every 2 years to inform its asset allocations; however, the Coast Guard  does not document how these risk assessments have affected asset  allocation decisions across its missions. Coast Guard officials stated  that changes made to Strategic Planning Directions’ asset allocations, by  mission, are discussed in verbal briefings but it is not their practice to  maintain documentation on the extent to which risk factors affect asset  allocation decisions. Without documenting this, the Coast Guard lacks a  record to help ensure that its decisions are transparent and the most  effective ones for fulfilling its missions given existing risks. We  recommended that the Coast Guard document how risk assessments  conducted are used to inform and support annual asset allocation  decisions. The Coast Guard concurred with our recommendation and  stated that it will begin to document these decisions in its fiscal year 2017  Strategic Planning Direction. If implemented as planned, this would meet  the intent of this recommendation.
section_title: The Coast Guard is Taking Steps to Improve Its Asset Allocation Process
paragraphs: In May 2016, we reported that the Coast Guard is taking steps to improve  its asset allocation process. The actions include the following:  Improving data quality for resource hours assigned to each  mission: Coast Guard guidance states that its field units should  report at least one primary employment category, such as one of the  11 statutory missions, for the time an asset is deployed. Coast Guard  officials told us that data on resource hours, by mission, for all assets  may not be accurate because the Coast Guard does not have a  systematic way for field units to (1) record time spent on more than  one mission during an asset’s deployment or (2) consistently account  for time assets spend in transit to designated operational areas. For  example, officials from six of the nine Coast Guard districts we  interviewed told us that they generally record one mission per asset  deployment, even though each asset’s crew may have performed two  or more missions during a deployment. Officials from the remaining  three districts told us that if their assets’ crews perform more than one  mission per deployment, the crews generally apportion the number of  hours spent on each mission performed. Coast Guard officials stated  that the resource hour data were accurate enough for operational  planning purposes, and that they were in the process of determining  how best to account for time spent by assets on multiple missions and  in transit in order to obtain more accurate and complete data on the  time assets spend conducting each of its missions. For example, in  April 2014, the Coast Guard issued instructions to its field units to  provide definitions, policies, and processes for reporting their  operational activities and also established a council to coordinate  changes among the various operational reporting systems used by  different field units.
Tracking how increased strategic commitments affect resource  hours available: According to Coast Guard officials, the Strategic  Planning Directions’ allocations of certain asset hours in support of  strategic commitments have grown from fiscal year 2010 to fiscal year  2016. Headquarters and field unit officials we met with told us that it  has become increasingly difficult to fulfill these growing strategic  commitments when asset performance levels have generally  remained the same or declined in recent years. Further, in February  2015, the Coast Guard Commandant testified before a congressional  subcommittee that the Coast Guard’s mission demands continue to  grow and evolve and that given the age and condition of some of its  legacy assets, the success of future missions relies on the continued  recapitalization of Coast Guard aircraft, cutters, boats, and  infrastructure. To meet these challenges, the Coast Guard is taking  steps to provide more transparency regarding asset resource hours  needed to support strategic commitments and the remaining resource  hours available to field unit commanders. For example, starting in  fiscal year 2015, the Coast Guard began using a new data field to  track the time assets spent supporting its Arctic strategy.
In conclusion, given that many of the assumptions underlying the Coast  Guard’s acquisition plans have changed since 2005 and are no longer  accurate, and the importance of ensuring that limited acquisition  resources are invested as efficiently and effectively as possible, the Coast  Guard should continue to follow through with our recommendations to  identify the cost, capability, and quantity of its fleet mix, as well as the  trade-offs that would need to be made given fiscal constraints.  Furthermore, to ensure that assets are deployed consistent with Coast  Guard mission priorities, the Coast Guard should follow through with  implementing our prior recommendations to improve its annual resource  allocation process.
Chairman Hunter, Ranking Member Garamendi, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions that you may have at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: If you or your staff have any questions about this testimony, please  contact Jennifer Grover at (202) 512-7141 or groverj@gao.gov. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this statement. GAO staff who made key  contributions to this testimony are Christopher Conrad (Assistant  Director), Nancy Kawahara (Analyst-in-Charge), Bryan Bourgault, John  Crawford, Tracey Cross, Dominick Dale, Michele Fejfar, Laurier Fish, Eric  Hauswirth, Tracey King, Michele Mackin, and Katherine Trimble. Key  contributors for the previous work that this testimony is based on are  listed in each product.
section_title: Appendix I: Planned Operational Capacities and Fiscal Year 2015 Actual Asset Resource Hour Utilization
paragraphs: The following figures detail the (1) actual number of asset resource hours  utilized in fiscal year 2015 and (2) the expected, planned operational  capacity baseline in varying years by each major asset category (fixed- wing aircraft, rotary-wing aircraft, major cutters, and patrol cutters). The  2005 baseline was updated from the 1998 baseline to reflect the changes  in the Coast Guard’s mission as a result of the additional homeland  security missions it was tasked with after 9/11.
The actual number of asset resource hours utilized is generally lower than  the baselines for a variety of reasons; including, among other things, the  fact that not all assets were planned to be acquired and operational by  fiscal year 2015.