Coast Guard: Observations on Agency Performance, Operations and Future Challenges
Published: 2006-06-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Coast Guard's fiscal year 2007 budget request total $8.4 billion, an increase of 4 percent ($328 million) over the approved budget for fiscal year 2006 and a slowing of the agency's budget increases over the past 2 fiscal years. This testimony, which is based on both current and past GAO work, synthesizes the results of these reviews as they pertain to meeting performance goals, adjusting to added responsibilities, acquiring new assets (especially the Deepwater program--to replace or upgrade cutters and aircraft, and the Rescue 21 program--to modernize rescue communications), and meeting other future challenges.
section_title: What GAO Found
paragraphs: According to the Coast Guard, the agency's fiscal year 2005 performance, as self-measured by its ability to meet program goals, was the highest since the terrorist attacks in September 2001. Even with the need to sustain new homeland security duties, respond to particularly destructive hurricanes, and cope with aging assets, the Coast Guard reported meeting or exceeding performance targets for 7 of 11 mission programs, and it anticipates meeting the target for 1 more program once final results for the year are available. In particular, based on our discussions with Coast Guard and other officials, as well as our review of pertinent documents, the Coast Guard's response to Hurricane Katrina highlighted three elements key to its mission performance: a priority on training and contingency planning, a flexible organizational structure, and the agency's operational principles. Three organizational changes appear to be helping the Coast Guard adjust to added responsibilities. First, according to agency officials, a realigned field structure will allow local commanders to manage resources more efficiently. Second, according to the Coast Guard, a new response team for maritime security is expected to provide greater counterterrorism capability. Finally, new and expanded partnerships inside and outside the federal government have the potential to improve operational effectiveness and efficiency. While some progress in acquisition management has been made, continued attention is warranted. Within the Deepwater program, additional action is needed before certain past recommendations can be considered as fully implemented. Also, the program recently had difficulties in acquiring Fast Response Cutters to replace aging patrol boats. For the Rescue 21 program, deficiencies in management and oversight appear similar to those that plagued the Deepwater program, leading to delays and cost overruns, and demonstrating that the Coast Guard has not translated past lessons learned into improved acquisition practices. Two additional future challenges also bear close attention: deteriorating buoy tenders and icebreakers that may need additional resources to sustain or replace them, and maintaining mission balance while taking on a new homeland security mission outside the agency's traditional focus on the maritime environment.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the President’s fiscal year 2007  budget request for the Coast Guard—funding that the Coast Guard  believes is critical to improving its performance and reducing  vulnerabilities within the U.S. maritime domain. As you know, the Coast  Guard has faced many extraordinary challenges and new responsibilities  in recent years, including heightened responsibility for protecting  America’s ports, waterways, and waterside facilities from terrorist attacks,  while maintaining responsibility for many other programs important to the  nation’s interests, such as helping stem the flow of illegal drugs and illegal  immigration, protecting important fishing grounds, and responding to  marine pollution. Overall, the Coast Guard has met these heightened  responsibilities despite added challenges posed by the declining condition  of its aging assets and special surge operations it has periodically  experienced—such as responding to Hurricane Katrina.
My testimony today provides (1) an overview of the Coast Guard’s fiscal  year 2007 budget request and key performance information, (2) a  discussion of the changes and initiatives the Coast Guard has implemented  to meet growing responsibilities, (3) a status update on some current  acquisition efforts, and (4) a look at some future Coast Guard challenges  as it attempts to balance its various missions. My testimony is drawn from  a number of reports we have issued on Coast Guard operations, as well as  from work done specifically for this hearing. In some cases our work is  still ongoing and fuller results will be reported once the engagements are  completed. The scope of our work did not include evaluating whether the  proposed funding levels are commensurate with the Coast Guard’s stated  needs. All of our work has been conducted in accordance with generally  accepted government auditing standards. (See app. I for additional  information regarding our scope and methodology and see related GAO  reports for a listing of recent reports.)
subsections: section_title: Budget Request Reflects Moderate Growth, While Overall Program Performance Improved
paragraphs: The Coast Guard’s fiscal year 2007 budget request shows continued  growth but at a more moderate pace than that of the past 2 years. The  current budget request reflects a proposed increase of about $328 million,  compared to increases for each of the past 2 budget years that exceeded  $500 million for each year. (See fig. 1.) About $5.5 billion, or more than   65 percent of the total funding request of $8.4 billion, is for operating  expenditures. The acquisition, construction, and improvements (AC&I)  account amounts to another $1.2 billion, or about 14 percent, and the  remainder is primarily for retiree pay and healthcare fund contributions.  (See app. II for more detail on the Coast Guard’s fiscal years 2002-2007  budget accounts.)
If the Coast Guard’s total budget request is granted, overall funding will  have increased by more than 50 percent since fiscal year 2002, an increase  of $2.82 billion. According to Coast Guard officials, much of the additional  $328 million in this fiscal year’s budget request, which is about 4 percent  over and above the fiscal year 2006 budget of $8.1 billion, covers such  things as salary and benefit increases and maintenance. In addition, more  than $57 million of this increase is to establish a permanent National  Capital Region Air Defense program to enforce the National Capital  Region no-fly zone, a program previously conducted by U.S. Customs and  Border Protection (CBP). By comparison, the increases for the AC&I  account for this time period have been even greater than the overall  funding increase, growing by 66 percent since fiscal year 2002. However,  the fiscal year 2007 AC&I budget request of almost $1.2 billion represents  little change in funding from the Coast Guard’s fiscal year 2006 enacted  AC&I budget.
subsections: section_title: Coast Guard Reported Progress Made in Meeting Program Performance Targets
paragraphs: Even with sustained homeland security responsibilities, aging assets, and a  particularly destructive hurricane season stretching resources across the  agency, in fiscal year 2005 the Coast Guard reported that 7 of its   11 programs met or exceeded program performance targets. In addition,  the agency reported that it anticipates meeting the target for 1 additional  program when final results become available in July 2006, potentially  bringing the total met targets to 8 out of 11 programs. According to Coast  Guard documents, the agency missed targets for three programs— undocumented migrant interdiction, defense readiness, and living marine  resources—in fiscal year 2005, as it had in some previous years. Coast  Guard officials attributed these missed targets to, among other factors, the  increased flow of migrants and staffing shortages for certain security units  within the defense readiness program. (See app. III for more detailed  information on each program.) If the Coast Guard meets 8 performance  targets as it predicts, the results would represent the greatest number of  performance targets met in the last 4 years. (See fig. 2.) The preliminary  results of our ongoing work reviewing the Coast Guard’s six non- homeland security performance measures suggests that, for the most part,  the data used for the measures are reliable and the measures themselves  are sound. That is, they are objective, measurable, and quantifiable as well  as cover key program activities. However, given the DHS policy of  reporting only one main performance measure per program and the limits  on how comprehensive a single measure is likely to be, there may be  opportunities to provide additional context and information to  decisionmakers about Coast Guard performance results. We will provide  final results on this work in a report to be published later this summer.
section_title: Overall Progress Came Despite Additional Demands Posed by Hurricane Katrina
paragraphs: This overall progress came in a year when the Coast Guard faced  significant additional demands brought on by Hurricane Katrina. As it had  to do when it implemented MTSA and when it conducted heightened port  security patrols immediately after the September 2001 terrorist attacks,  the Coast Guard found itself operating at an increased operational tempo  for part of fiscal year 2005. Although the Hurricane Katrina response  period was relatively brief for some missions, such as search and rescue,  Coast Guard officials told us that the sheer magnitude of the response  made it unique, and responding to it tested the agency’s preparedness and  ability to mobilize large numbers of personnel and assets within a short  time. In this effort, the Coast Guard had several responsibilities during and  immediately following the hurricane: to conduct search and rescue; to  direct the closing and re-opening of ports in cooperation with  stakeholders,(such as shipping companies, harbor police, DHS, CBP, and  local fire and police departments), to ensure safety and facilitate  commerce, thereby lessening the economic impact of the storm on the  nation; and to monitor pollution clean up of the many oil spills that  occurred in the wake of the flooding. For the purposes of this testimony,   I would like to focus on the Coast Guard’s search and rescue response.   We are conducting a more complete review of the Coast Guard’s role and  response to Hurricane Katrina across several mission areas under the  authority of the Comptroller General, and expect to provide additional  information later this summer. So far, however, this work is showing that  three factors appear to have been key to the Coast Guard’s response to  Hurricane Katrina:    The Coast Guard was prepared to respond to search and rescue needs.
Although the magnitude of Hurricane Katrina required substantial  response and relief efforts, the Coast Guard was well prepared to act  since it places a priority on training and contingency planning. First  and foremost, the missions the Coast Guard performed during  Hurricane Katrina were the same missions that the Coast Guard trains  for and typically performs on a day-to-day basis. The Coast Guard’s  mission areas include, among others, search and rescue, law  enforcement, regulatory functions, and, most recently, homeland  security responsibilities, allowing the Coast Guard to respond and act  in a myriad of situations. However, with regard to Hurricane Katrina,  the magnitude of the Coast Guard’s mission activity appears  noteworthy. For example, for all of 2004, according to the Coast  Guard’s Fiscal Year 2005 Report, the Coast Guard responded to more  than 32,000 calls for rescue assistance and saved nearly   5,500 lives. By comparison, in 17 days of Hurricane Katrina response,  Coast Guard officials reported conducting over 33,500 rescues,  including rescuing 24,135 people by boat and helicopter and evacuating  9,409 people from hospitals. Coast Guard officials we spoke to  underscored the importance of the planning, preparation, and training  that they regularly conduct that allowed them to complete the many  challenging missions presented by Katrina.
The Coast Guard’s organizational structure and practices facilitated  the agency’s response. In terms of the Coast Guard’s organizational  structure, the Coast Guard has personnel and assets throughout the  United States, which allows for more flexible response to threats. In  terms of Coast Guard practices, according to the hurricane and severe  weather plans we reviewed for Coast Guard Districts 7 (Florida region)  and 8 (Gulf region), and discussions we had in Washington, D.C.,  Virginia, Florida, Alabama, and Louisiana with Coast Guard officials  responsible for implementing those plans, the Coast Guard tracks the  likely path of an approaching storm, anticipates the necessary assets to  address the storm’s impact, and repositions personnel and aircraft out  of harm’s way, with a focus on reconstituting assets to respond to local  needs once it is safe to do so. Given the magnitude of Hurricane  Katrina, the Coast Guard took a more centralized approach to prioritize  personnel and assets to respond, but the operational command  decisions remained at the local level. That is, the Coast Guard’s  Atlantic Area Command played a key role in identifying additional  Coast Guard resources, and worked with District Commands to quickly  move those resources to the affected Gulf region, while local  operational commanders directed personnel and assets to priority  missions based on their on-scene knowledge.
The Coast Guard’s operational principles facilitated the agency’s  actions. Throughout our field work, Coast Guard officials referred to  the principles of Coast Guard operations that guide the agency’s  actions.  Coast Guard officials identified these principles, which ranged  from the importance of having clear objectives and flexibility to  managing risks and exercising restraint, as instrumental in their  preparation for Hurricane Katrina. The Coast Guard prides itself on  these operational principles that collectively form the foundation of  Coast Guard culture and actions during operations. These principles  set an expectation for individual leadership in crisis, and personnel are  trained to take responsibility and action as needed based on relevant  authorities and guidance. For example, during the initial response to  Hurricane Katrina, a junior-level pilot, who first arrived on-scene in  New Orleans with the planned mission of conducting an environmental  inspection flight, recognized that search and rescue helicopters in the  area could not communicate with officials on the ground, including  those located at hospitals and at safe landing areas. This pilot took the  initiative while on-scene—an operational principle—to redirect her  planned mission, changing it from an environmental flight to creating  the first airborne communication platform in the area. Doing so helped  ensure that critical information was relayed to and from helicopter  pilots conducting search and rescue so that they could more safely and  efficiently continue their vital mission. When we consulted her  commanding officer about these actions, he supported her decision and  actions and noted that Coast Guard personnel generally have the  flexibility to divert from their intended mission to accomplish a more  important mission, without obtaining advance supervisory approval. He  indicated that this was not only common practice, but it was supported  by a written directive at his unit.
While acknowledging the importance of these operational principles, it  is equally important to note that the response to Hurricane Katrina also  hinged on discipline and adherence to critical plans. For example,  multiple aircraft were operating in a confined space with little  separation, thus adhering to critical search and rescue plans, as well as  using experience and judgment, resulted in numerous rescues despite  these difficult circumstances. While the Hurricane Katrina search and  rescue effort was unprecedented, sustaining this effort might have been  much more difficult if it had gone on for a much longer period.  Combining a longer-term catastrophic response with the continuing  needs of the agency’s day-to-day missions would be more challenging  for a small service such as the Coast Guard. Relative to other military  services, the Coast Guard is small, and when resources are shifted to  any one specific mission area, other mission areas may suffer. For  example, Coast Guard units in Florida sent many air and surface assets  to the Gulf region to respond to Hurricane Katrina. While the assets  were deployed to the Gulf region, the Coast Guard noticed a spike in  the level of illegal migration activity off of the Florida coast. However,  once Coast Guard assets returned to the Florida region, the Coast  Guard initiated a more intensive air and sea patrol schedule to  markedly announce their return to the area, and focus on interdicting  illegal migrants.
section_title: The Coast Guard Continues with Organizational Changes and Expanded Partnerships to Meet Growing Responsibilities
paragraphs: Coast Guard organizational changes and expanded partnerships have  helped to alleviate some resource pressures posed by added  responsibilities or further deterioration of assets, as well as help  accomplish its mission responsibilities. I would like to highlight three of  these efforts: a revised field structure that consolidates decision-making  processes at the operational level into a single command, a new resource  for confronting and neutralizing terrorist activity, and new and stronger  partnerships both within and outside DHS.
subsections: section_title: New Field Command Structure Aimed at Improving Operational Efficiency
paragraphs: In conducting our work for this hearing, we followed up with the Coast  Guard to obtain an update on the implementation of a new field command  structure that unifies previously disparate Coast Guard units, such as air  stations, groups, and marine safety offices into integrated commands. As  we reported to you last year, the Coast Guard began making this change to  improve mission performance through better coordination of Coast Guard  command authority with operational resources such as boats and  aircraft. Under the previous field structure, for example, a marine safety  officer who had the authority to inspect a vessel at sea or needed an aerial  view of an oil spill as part of an investigation would often have to  coordinate a request for a boat or an aircraft through a district office,  which would obtain the resource from a group or air station. Under the  realignment, these operational resources are to be available under the  same commanding officer—allowing for more efficient operations. This  revised structure involves dividing operations into 35 geographic “sectors.”  Coast Guard officials stated that all 35 sectors have been established as of  May 2006. According to Coast Guard personnel, the realignment is  particularly important for coordinating with other federal, state, and local  agencies, as well as meeting new homeland security responsibilities and  preparing for the challenge of protecting the United States against terrorist  attacks.
section_title: New Maritime Security Response Team to Provide Additional Security Capability
paragraphs: Another initiative to protect the United States against terrorist attacks is  the Coast Guard’s development and implementation of a Maritime Security  Response Team (MSRT)—a prototype team similar to DOD’s counter- terrorism teams. The Coast Guard, in cooperation with DOD and other  federal law enforcement agencies, plans to outfit the MSRT with  specialized tactical equipment and train the team to conduct high-risk  boardings of vessels and perform other offensive counter-terrorism  activities within the maritime environment. The Coast Guard’s $4.7 million  request for fiscal year 2007 would provide the team with chemical,  biological, radiological, nuclear, and explosive detection equipment;  improve the Coast Guard’s Special Missions Training Center facility; and  provide additional personnel and operating capacity for a third 60-member  unit, building the team toward 24/7 response capabilities. Coast Guard  officials said that once the MSRT is fully developed, it will provide active  counter-terrorism and advanced interdiction operations and address  capacity and capability gaps in national maritime counter-terrorism  response.
section_title: New and Evolving Coast Guard Partnerships Designed to Improve Operational Effectiveness and Efficiency
paragraphs: In addition to partnering efforts associated with the development of the  first MSRT, the Coast Guard is developing other partnerships, both  internal and external to DHS, designed in part to improve operational  effectiveness and efficiency. For example, the Coast Guard is currently  developing a pilot program to increase operational efficiencies between  the Coast Guard and CBP aimed at pushing potential threats away from  U.S. ports. This offshore operation, currently in a pilot stage, includes the  integration of each agency’s vessel targeting efforts, unifies their boarding  operations, and includes professional exchange opportunities. Although  this effort is only being tested within the Pacific Area Command of the  Coast Guard, according to a senior Coast Guard official, the Pacific  Command intends to send its results to Coast Guard headquarters so the  agency can determine how to best implement the program across the  Coast Guard at a later date.
In addition to partnering with other federal agencies, the Coast Guard has  also initiated partnerships with both government and industry. Under  regulations implementing MTSA, a Coast Guard Captain of the Port must  develop an Area Maritime Security Plan in consultation with an Area  Maritime Security Committee. These committees are typically composed  of members from federal, local, and state governments; law enforcement  agencies; maritime industry and labor organizations; and other port  stakeholders that may be affected by security policies. The security plan  they develop is intended to provide a communication and coordination  framework for the port stakeholders and law enforcement officials to  follow in addressing security vulnerabilities and responding to any  incidents. Stakeholders in two ports we visited identified their Area  Maritime Security Committees as an invaluable forum for port partners.  For example, they said meetings of these committees serve as an  opportunity for members of the port community to network with one  another, build relationships, address various maritime-related issues, and  coordinate security planning efforts.
The Coast Guard has expanded its partnership with NOAA to enforce  domestic fisheries regulations. NOAA operates a technology-based system,  called the vessel monitoring system, to track and monitor fishing vessels.  This system offers real-time data on a ship’s course and position, where  the ship has requested to fish, the type of fishing requested, and the  number of days the ship has been out of port. The Coast Guard uses this  information to assist with its enforcement of domestic fisheries  regulations by identifying vessels that may not be in compliance with  domestic fisheries regulations. For example, the monitoring information  will show if fishing vessels are operating within a restricted area.  According to Coast Guard officials, the information shared from this  partnership has allowed Coast Guard assets to be used more efficiently in  checking on potentially noncompliant vessels and enforcing fishing laws.
section_title: Progress Made with Ongoing Acquisition Efforts, but Continued Attention Is Warranted
paragraphs: Our recent reviews indicate that while the Coast Guard has made progress  in managing the Deepwater program, further actions are needed and the  lessons learned from this effort have not been applied to other ongoing  acquisitions. For example, even with the Coast Guard’s improved  management and oversight of its Deepwater program, further steps are  needed before all of our past recommendations for improving  accountability and program management can be considered fully  implemented. In addition, the acquisition of Fast Response Cutters has  recently experienced setbacks. Meanwhile, the Rescue 21 program  continues to be of concern as the program has been plagued by delays,  technical problems, and cost escalation—issues that parallel the problems  encountered in the early years of the Deepwater program. Another  program, the Nationwide Automatic Identification System, is still in early  development stages and specific technical system requirements remain  undefined. As a result, according to Coast Guard officials, this has affected  the Coast Guard’s efforts to respond to our recommendation that the  agency cultivate potential partnerships in order to leverage resources  toward implementing the system. Because all of these programs are  important for the Coast Guard in meeting growing operational demands,  they bear close monitoring to help ensure they are delivered in an efficient  and effective manner.
subsections: section_title: Progress Continues in Making Recommended Improvements to Deepwater Program Management, but Some Recommendations Are Not Yet Fully Implemented
paragraphs: One of the largest and most significant acquisitions that the Coast Guard  has undertaken is the upgrade and replacement of its Deepwater assets, an  acquisition approach that has raised a number of management and  accountability concerns over the past 8 years. The Coast Guard has  devoted considerable attention to concerns that we and others raised, in  particular to implementing recommendations for improvement. Our past  concerns about the Deepwater program have been in three main areas— ensuring better program management and oversight, ensuring greater  accountability on the part of the system integrator, and creating sufficient  competition to help act as a control on costs—and to address these  concerns, we made a total of 11 recommendations. Table 1 provides an  overview of the 11 recommendations, including their current status. In  short, five recommendations have been fully implemented, five have been  partially implemented, and one has not been implemented. Three of the  five partially implemented recommendations appear close to being fully  implemented, in that the actions taken appear to be sufficient but results  are not yet known or final procedural steps (such as issuing a policy  currently in draft form) are not complete. The remaining two partially  implemented recommendations, both of which deal with effective program  management and contractor oversight, remain somewhat more  problematic, and these are discussed further below. In both cases,  however, the steps needed to fully implement these recommendations are  relatively straightforward.
In 2004, we reported that the integrated product teams (IPTs), the Coast  Guard’s primary tool for managing the Deepwater program and overseeing  contractor activities, were struggling to carry out their missions because  of four major issues: (1) lack of timely charters to provide authority  needed for decision making, (2) inadequate communication among team  members, (3) high staff turnover, and (4) insufficient training. Despite  progress in addressing these four issues, we do not consider this  recommendation to be fully implemented. There are indications that the  IPTs are still not succeeding in developing sufficient collaboration among  subcontractors. Coast Guard officials recently reported that collaboration  among the subcontractors continues to be problematic and that the system  integrator wields little influence to compel decisions among them. For  example, when dealing with proposed design changes for assets under  construction, the system integrator has submitted the changes as two  separate proposals from both first-tier subcontractors rather than  coordinating the separate proposals into one coherent plan. According to  Coast Guard performance monitors, because the two proposals often carry  a number of overlapping work items, this approach complicates the Coast  Guard’s review of the needed design change. Several improvements  designed to address these problems are under way, but it is too early to  determine if these will effectively eliminate the problems.
subsections: section_title: Providing Field Personnel with Guidance and Training on Transitioning to New Deepwater Assets
paragraphs: In 2004, we reported the Coast Guard had not effectively communicated  decisions on how new Deepwater and existing assets are to be integrated  during the transition and whether Coast Guard or contractor personnel   (or a combination of the two) will be responsible for maintenance of the  Deepwater assets. For example, Coast Guard field personnel, including  senior-level operators and naval engineering support command officials,  said they had not received information about how they would be able to  continue meeting their missions using existing assets while also being  trained on the new assets. Since that time the Coast Guard has placed  more emphasis on outreach to field personnel, including surveys, face-to- face meetings, and membership in IPTs. Despite these efforts, there are  indications that the actions are not yet sufficient to consider the  recommendation to be fully implemented. In particular, our review of  relevant documents and discussions with key personnel make clear that  field operators and maintenance personnel are still concerned that their  views are not adequately acknowledged and addressed, and have little  information about maintenance and logistics plans for the new Deepwater  assets. For example, though the first National Security Cutter is to be  delivered in August 2007, field and maintenance officials have yet to  receive information on plans for crew training, necessary shore facility  modifications, or how maintenance and logistics responsibilities will be  divided between the Coast Guard and the system integrator. According to  Coast Guard officials, many of these decisions need to be made and  communicated very soon in order to allow for proper planning and  preparation in advance of the National Security Cutter’s delivery.
section_title: Design Risks Have Delayed Delivery of the Fast Respose Cutter
paragraphs: Despite improvements in Deepwater program management, the Coast  Guard has encountered difficulties in the conversion and acquisition of  one Deepwater asset—its Fast Response Cutter (FRC). Under the original  2002 Deepwater Implementation Plan, all 49 of the Coast Guard’s 110-foot  patrol boats were to be converted into 123-foot patrol boats, with  increased capabilities, as a bridging strategy until a replacement vessel,  the 140-foot FRC, came on line beginning in 2018. The Coast Guard  converted 8 of the 110-foot patrol boats to 123-foot boats, but discontinued  further conversions because the patrol boats were experiencing technical  difficulties, such as hull buckling, and were not able to meet post- September 11, 2001 mission requirements. This prompted the Coast Guard  to revise this part of the Deepwater program. The 2005 Revised Deepwater  Implementation Plan reflected the Coast Guard’s cancellation of further  patrol boat conversions and acceleration of the design and delivery of the  FRC, which was being designed to use composite materials in the hull,  decks and bulkheads. Under the 2005 revised plan, the first FRC was  scheduled to come on line in 2007—11 years earlier than originally  planned.
In late February 2006, the Coast Guard suspended design work on the FRC  because of risks with the emerging design. In particular, an independent  design review by third-party consultants preliminarily demonstrated,  among other things, that the FRC would be far heavier and less efficient  than a typical patrol boat of similar length. As a result, the Coast Guard is  now pursuing three strategies for moving forward with the FRC  acquisition. The first strategy involves Integrated Coast Guard Systems,  the prime contractor, purchasing design plans for and building an “off-the- shelf” patrol boat that could be adapted for Coast Guard use as a way to  increase patrol hours until the FRC design could be finalized. The Coast  Guard issued a request for information in April 2006 to assess the off-the  shelf options. The second strategy is to revise the requirements of the FRC  in order to allow for modifications to the current FRC design. Concurrent  with the first two strategies, the Coast Guard’s third strategy is to have a  third party reassess the analyses used in the decision to use composite  materials for the FRC to determine if the use of composite materials will,  in fact, reduce total ownership costs. The result of the Coast Guard  pursuing these strategies is that the Coast Guard would end up with two  classes of FRCs. The first class of FRCs would be based on an adapted  design from a patrol boat already on the market, to expedite delivery, and  a follow-on class that would be based on revisions made to address the  problems identified in the original FRC design plans.  Pursuant to these  three strategies, Coast Guard officials now estimate that the first FRC will  likely not be delivered until late fiscal year 2009, at the earliest. GAO plans  to release a report in late June 2006 providing updated information on the  status of FRC design efforts.
section_title: Rescue 21 Continues to Be of Concern as It Enters Implementation Phase
paragraphs: The Rescue 21 acquisition program—the Coast Guard’s effort to replace its  antiquated command, control and communication infrastructure used  primarily to monitor mariner distress calls, and coordinate search and  rescue operations—continues to be of concern as the program has been  plagued by numerous delays, technical problems, and cost overruns.  GAO’s recently released report shows that the program is about 5 years  behind its originally proposed schedule for full implementation in 2006,   as a result primarily of delays in development and testing of the system.  In addition, these delays have raised the Coast Guard’s estimated costs for  bringing Rescue 21 up to full operating capability from $250 million to  $710.5 million. Moreover, our analysis of contractor performance trends,  including a significant number of contract items not completed as   planned and requiring renegotiation, indicates that total acquisition cost  overruns will continue, and implementation costs could reach as high as  $872 million.
These delays, technical problems, and cost overruns are the result of  deficiencies in Coast Guard acquisition management and contractor  oversight—deficiencies similar to those that we identified earlier in the  Deepwater program. Such a pattern is of concern because it suggests that  the Coast Guard has not translated the lessons learned from Deepwater to  its overall acquisition management. In particular, deficiencies in the  Rescue 21 program include common problems of acquisition management  and oversight including ineffective project monitoring and risk  management, poorly defined user requirements, unrealistic schedule and  cost estimates developed by the contractor, and limited executive-level  oversight. And although the Coast Guard has developed the high-level  requirements for Rescue 21, it has relied solely on the contractor to  manage these requirements.
As discussed, we found similar problems in the Deepwater program with  comparable adverse impacts on cost, schedule and results.  For example,  at the start of the program we identified a number of risks that would need  to be addressed for the program to be successful—including ensuring that  procedures and personnel are in place for managing and overseeing the  contractor, and taking steps to minimize potential problems in developing  new technology.  Since that time, we have made numerous specific  recommendations to the Coast Guard based on the deficiencies uncovered  by our audits.
The delays in implementing Rescue 21 mean that field units will continue  to face limitations in their ability to hear boaters in distress and the agency  will be subject to cost and performance challenges to maintain the legacy  equipment. For example, as a result of Rescue 21’s delay, some field units  will likely continue to experience coverage gaps, limiting their ability to  monitor mariners in distress and some will continue to be at risk of  performing larger and potentially more costly searches due to the legacy  system’s more limited capabilities. In addition, because the legacy  equipment is over 30 years old, it is at high risk for failure, a factor which  could result in costly repairs. Moreover, although the Coast Guard  previously issued a moratorium on upgrades to the legacy system, delays  in the Coast Guard’s implementation of Rescue 21 may require units to  upgrade or install new equipment for the legacy system. This would result  in further costs, and in fact, this has already occurred at some units.
The importance of resolving acquisition management problems is  underscored by the operational benefits that are expected to be realized  from system implementation, and some of these benefits have already  been achieved in a few locations where the Rescue 21 system has been  used.  For example, following Hurricane Katrina, the Coast Guard took  advantage of Rescue 21’s capabilities to address communications  challenges through an early deployment of a portable antenna to Louisiana  in September 2005 to provide communications capabilities that had been  lost due to the storm.  In another case, the direction-finding capability of  the Rescue 21 system helped the Coast Guard to rescue some stranded  boaters who had inaccurately identified their location to the Coast Guard.
section_title: Coast Guard in Early Phase of Developing the Nationwide Automatic Identification System
paragraphs: The Coast Guard is at an early phase in developing the Nationwide  Automatic Identification System (NAIS)—an important step in the overall  effort to increase port safety and security by collecting, integrating, and  analyzing information on vessels operating within or bound for U.S.  waters—and is pursuing partnership opportunities that could potentially  accomplish NAIS installation goals more quickly and reduce installation  costs to the federal government. According to the Coast Guard, NAIS will  allow the Coast Guard to both receive and transmit information to vessels  entering and leaving U.S. waters, supporting both MTSA and the National  Plan to Achieve Maritime Domain Awareness. In July 2004, we  recommended that the Coast Guard seek and take advantage of  opportunities to partner with organizations willing to develop systems at  their own expense as part of the acquisition process. In response,  according to Coast Guard officials, the agency has begun to develop  partnerships. However, officials noted that because the project and  technology are still in the early stages of development, these partnerships  remain limited. For example, Coast Guard officials said that because the  Coast Guard still does not know all of the specific technical system  requirements, they do not yet know of all the potential partners that could  enable the Coast Guard to leverage resources. In addition, system  requirements may change as the technology is further developed, and as a  result, some current partnerships may be short-term.
The Coast Guard intends to use the fiscal year 2007 budget request of   $11.2 million, along with past unobligated project funding, to award a  NAIS contract in fiscal year 2007 for initial design, logistics, and  deployment in strategic ports and critical coastal areas of the country.  According to the Coast Guard, officials are performing market research as  part of the development phase of the Coast Guard and DHS major  acquisition processes, and the project office is analyzing this information  to determine capabilities within the market to satisfy NAIS requirements  and to establish an optimal acquisition strategy. Coast Guard officials we  spoke with noted that NAIS is currently in the initial stage of a major  acquisition project. As such, the acquisition project plans for costs,  schedule, and performance have not yet been established. The Coast  Guard expects these project plans to be determined later this year and  stated that both the baseline costs and current completion schedule are  early estimates and subject to revision as final requirements mature.
section_title: Coast Guard Faces Future Challenges as It Balances Missions
paragraphs: The Coast Guard also faces two additional challenges in managing its  assets and balancing its various missions. The first challenge is to find the  resources to replace some additional assets, not included in the  Deepwater program, for its non-homeland security missions.  Our ongoing  work found that some of the Coast Guard’s existing buoy tenders and  icebreakers are approaching or have exceeded their initial design service  lives. The second challenge the Coast Guard faces is the addition of a new  mission, defending the air space surrounding the nation’s capital, which  falls outside its traditional focus on the maritime environment. While  groundwork has been laid through the request of fiscal year 2007 funds to  purchase the equipment necessary to carry out this new responsibility, it is  likely to require additional personnel and training.
subsections: section_title: Some ATON and Icebreaking Assets Show Decline and May Need Additional Resources to Sustain Capabilities
paragraphs: To facilitate maritime mobility through its aids-to-navigation (ATON) and  icebreaking missions, the Coast Guard uses a variety of assets, such as  buoy tenders and icebreakers. Like the Deepwater legacy assets, many of  these types of assets are approaching or have exceeded their initial design  service lives. We are currently conducting work for this committee to look  at the condition and the Coast Guard’s actions to upgrade or better  manage these assets. While this work is still ongoing, our preliminary  observations indicate that some of these assets are experiencing  maintenance issues that may require additional resources in order to  sustain or replace their capabilities.
subsections: section_title: Coast Guard’s Condition Measures Show Decline in Some ATON and Icebreaking Assets
paragraphs: From 2000 to 2004, the Coast Guard’s key condition measures show a  decline for some ATON and icebreaking assets. For ATON and  icebreaking cutter assets, the key summary measure of condition— percent of time free of major casualties—fluctuated but generally  remained below target levels for some asset types. According to Coast  Guard officials, even though it did not have a centralized tracking system  for the condition of its ATON small boat assets during this time period, the  Coast Guard’s overall assessments of these smaller assets indicated that  most of the asset types were in fair to poor condition. According to Coast  Guard officials and documents, the reasons for their condition include the  fact that many of the asset types are beyond their expected service lives  and the general workload of the assets has increased to carry out other  missions, such as maritime security after September 11, 2001, or providing  disaster response after events such as the recent hurricanes on the Gulf  Coast.
section_title: Increasing Amount of Maintenance on ATON and Domestic Icebreaking Assets Is Being Performed
paragraphs: Coast Guard personnel reported to us that crew members have had to  spend increasingly more time and resources to troubleshoot and resolve  maintenance issues on the older ATON and domestic icebreaking assets.  The Coast Guard personnel we met with indicated that because the  systems and parts are outdated compared with the technology and  equipment available today, it can be challenging and time consuming to  diagnose a maintenance issue and find parts or determine what corrective  action to take. For example, the propulsion control system on the 140-foot  icebreaking tugs uses circuit cards that were state-of-the-art when the tugs  were commissioned in the late 1970s to 1980s but are no longer  manufactured today and have been superseded by computer control  systems. According to the Coast Guard personnel we met with, the lack of  a readily available supply of these parts has forced maintenance personnel  to order custom made parts or refurbish the faulty ones, increasing the  time and money it takes to address maintenance problems. The personnel  also told us that because such equipment is outdated, finding  knowledgeable individuals to identify problems with the equipment is  difficult, which further complicates the maintenance of the assets. Crews  of other assets we visited also confirmed the difficulty of diagnosing  problems and obtaining replacement parts for other critical subsystems  such as the main diesel engines.
Aware of such issues, the Coast Guard completed a mission needs analysis  for ATON and domestic icebreaking assets, and developed an approach to  renovate or recapitalize these assets. This analysis, which was completed  in 2002, looked at the condition of the existing assets and their ability to  support mission needs. The analysis concluded that all of the assets  suffered in varying degrees with respect to safety, supportability,  environmental compliance, and habitability, and would need replacement  or rehabilitation to address these issues. In response to this analysis, the  Coast Guard developed a plan to systematically replace or renovate the  assets. Program officials at the Coast Guard indicated that current  estimates place the total cost to carry out this plan at about $550 million.  According to a Coast Guard official, although resource proposals to carry  out this project had been made during the budget planning processes for  fiscal years 2004, 2005, 2006, and 2007, those proposals were either  deferred or terminated by DHS or the Office of Management and Budget  from inclusion in the final budget requests.
section_title: Polar Class Icebreaking Assets Are in Need of Significant Maintenance
paragraphs: Preliminary observations from our review of the Coast Guard’s polar  icebreaking assets revealed similar challenges for the Coast Guard to  perform the maintenance needed to sustain the capabilities of these  assets. As with the other older ATON and domestic icebreaking assets, the  two Polar Class icebreakers that are used for breaking the channel into the  Antarctic research station are reaching the end of their design service lives  of 30 years. According to Coast Guard officials, the icebreakers’ age  combined with recent harsh ice conditions and increased operational  tempo have left the Polar Class icebreakers unable to continue the mission  in the long term without a substantial investment in maintenance and  equipment renewal. These officials also told us that while the hull  structures are sound, critical systems such as the main gas turbine  controls and the controllable pitch propeller systems have become  unreliable. Corroborating this account of the icebreakers’ condition, an  interim report issued in December 2005 by the National Research Council  of the National Academies also found that the icebreakers have become  inefficient to operate because substantial and increasing maintenance is  required to keep them operating and that significant long-term  maintenance had been deferred over the past several years.
Given the age and obsolescence of the Polar Class icebreakers, funding for  maintenance and repair has been and will likely continue to be a  challenge. Coast Guard officials indicated that the cost of maintenance  activity for the icebreakers required that additional funding be transferred  from other Coast Guard asset maintenance accounts in previous years in  order to carry out this maintenance. For fiscal years 2005 and 2006, the  Coast Guard also obtained additional funds for maintenance from the  National Science Foundation (NSF). The Coast Guard has considered  undertaking a project to extend the service lives of the existing assets by  refurbishing or replacing those systems that have reached the end of their  service lives. The Coast Guard estimates that this extension project could  provide an additional 25 years of service for the existing assets. The cost  to carry out this project for both Polar Class icebreakers is estimated  between $552 and $859 million. Coast Guard capital planning  documentation indicates that failure to fund this project could leave the  nation without heavy icebreaking capability and could jeopardize the  investment made in the nation’s Antarctic Program. According to Coast  Guard officials, the agency has identified these needs but has not yet  requested funds in part, because other agencies have taken financial  responsibility for funding polar icebreaking assets.
section_title: The Coast Guard Is Undertaking New Responsibility beyond Typical Maritime Missions
paragraphs: While the Coast Guard continues to face the challenge of performing the  diverse array of responsibilities associated with its many missions, the  fiscal year 2007 budget request includes initial funding for a new Coast  Guard responsibility of enforcing a no-fly zone in the national capital  region. The scope of the mission—intercepting slow and low flying  aircraft—falls outside of the Coast Guard’s typical mission of protecting  and preserving the nation’s ports and waterways. According to Coast  Guard officials, DHS agreed to this mission through a memorandum of  understanding with DOD and subsequently determined that the Coast  Guard was the best suited agency within DHS to perform the mission.  Coast Guard officials also said, the agency will officially take over these  responsibilities from CBP in late fiscal year 2006. However, despite  previous experience performing air intercept activities, according to Coast  Guard officials, the new homeland security mission has required  additional training and assets. The Coast Guard’s $57.4 million fiscal year  2007 budget request, the first year of a planned 2-year project, would  provide funding to acquire five of the seven HH-65C helicopters needed for  the mission, and, according to Coast Guard officials, update infrastructure  at Air Station Atlantic City, as well as upgrade equipment at Reagan  National Airport. Officials added that efforts to train Coast Guard pilots  have already been underway. While groundwork has been laid through the  request of fiscal year 2007 funds to purchase the equipment necessary to  carry out this new responsibility, it is likely to require additional personnel  and training.
section_title: Concluding Observations
paragraphs: Several of the developments we are reporting on today are good news.  Despite many demands, the Coast Guard continues to make progress in  meeting its performance targets, and its successful search and rescue  work in responding to Hurricane Katrina is one positive aspect of what  largely otherwise appears to be an ongoing tragedy. Certainly, if one  measure of organizational excellence is performance in crisis, Hurricane  Katrina shows that the Coast Guard is well along on that scale. Excellence  must also be demonstrated in more mundane ways, however, such as how  an organization manages its acquisitions. In this case, the Coast Guard  needs to consistently, and from the beginning, employ widely known best  practices for its acquisition management processes particularly with  respect to developing requirements, project and risk management, and  ensuring proper executive level oversight. Although the Coast Guard is to  be complimented for its willingness to make improvements after our  audits have identified problems, such as with the Deepwater program, its  acquisition management would be better if the agency employed the  lessons once learned and translated them into generally-improved  practices. Better overall practices would help to ensure that future  projects will not repeat past problems and will be completed on time and  at cost.
The Coast Guard has clearly been at the vortex of many of the most  sweeping changes in the federal government’s priorities over the past  several years. “Homeland security” carries a much different tone, as well  as budgetary significance, in the national consciousness after September  11, 2001. However, dramatic infusions of money are no guarantee of  success; rather they bring added responsibility to ensure that large  investments of taxpayer dollars are wisely spent. Our work has shown that  the Coast Guard continues to face some challenges in balancing all of its  missions and in keeping a sustained focus on managing its significant  capital acquisition programs. Continued efforts are needed to sustain the  progress that has been made thus far.
Madame Chair and Members of the Subcommittee, this completes my  prepared statement. I would be happy to respond to any questions that you  or other Members of the Subcommittee may have at this time.
section_title: GAO Contacts and Staff Acknowledgments
paragraphs: For information about this testimony, please contact Stephen L. Caldwell,  Acting Director, Homeland Security and Justice Issues, at (202) 512-9610,  or caldwells@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this  statement. Individuals making key contributions to this testimony include  Joel Aldape, Nancy Briggs, Lisa Canini, Christopher Conrad, Adam  Couvillion, Christine Davis, Josh Diosomito, Michele Fejfar, Kathryn  Godfrey, Christopher Hatscher, Dawn Hoff, Lori Kmetz, Julie Leetch, Josh  Margraf, Dominic Nadarski, Jason Schwartz, and Stan Stenersen.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: To provide a strategic overview of the President’s fiscal year 2007 budget  request for the Coast Guard, we analyzed the Coast Guard’s budget  justification and other financial documents provided by the Coast Guard,  focusing on several areas of particular congressional interest. We also  interviewed Coast Guard headquarters officials familiar with the Coast  Guard’s budget and acquisition processes.
To report on the Coast Guard’s progress in meeting its performance  targets, we reviewed Coast Guard data and documentation addressing the  status of performance targets between fiscal years 2002 and 2005. In  reporting the performance results, we did not assess the reliability of the  data or the credibility of the performance measures used by the Coast  Guard. Previous GAO work indicates that the Coast Guard data are  sufficiently reliable for the purposes of reporting on general performance,  but we have not examined the external sources of data used for these  measures. In addition, we are currently involved in ongoing work looking  at the reliability of the data and credibility of performance measures for  the Coast Guard’s six non-homeland security programs.
To determine the status of key outstanding Coast Guard  recommendations, we interviewed Coast Guard headquarters officials  regarding the status of the recommendations—including any progress  made to implement them. We also obtained and reviewed relevant  documents from the Coast Guard.
To discuss the Coast Guard’s response to Hurricane Katrina, we relied on  our ongoing work regarding Hurricane Katrina, with particular focus on  the Coast Guard’s preparation, response, and recovery to Katrina with  respect to search and rescue, pollution response, and facilitation of  maritime missions. To obtain a more detailed understanding of the Coast  Guard’s response to Hurricane Katrina, we interviewed officials, reviewed  documents, and conducted site visits at two Coast Guard Districts, the  Atlantic Command, and Coast Guard headquarters. We also interviewed  city and state officials in areas impacted by Hurricane Katrina and assisted  by the Coast Guard.
To determine the Coast Guard’s progress in implementing our prior  recommendations related to its Deepwater program, we drew from  ongoing work, which included extensive reviews and analyses of  documentation provided by the Coast Guard. We supplemented our  document reviews and analyses with extensive discussions with officials  at the Deepwater Program Executive Office, as well as with interviews  with key Coast Guard operations and maintenance officials, contract  monitors, and representatives of the system integrator.
To report on the status and cost of Coast Guard’s Rescue 21 program, we  drew from our work examining (1) the reasons for significant  implementation delays and cost overruns against Rescue 21’s original 2002  proposal; (2) the viability of the Coast Guard’s revised cost and  implementation schedule that is projected to reach full operational  capability in 2011; and (3) the impact of Rescue 21’s implementation delay  upon the Coast Guard’s field units which are awaiting modernization of  antiquated communications equipment. This work has involved reviewing  acquisition plans, implementation schedules and cost estimates for Rescue  21, as well as documentation regarding problems associated with the  antiquated communications equipment. We also interviewed Coast Guard  field personnel at units using the antiquated equipment and at the two sites  where Rescue 21 has been deployed.
We also drew from our ongoing work to report on Coast Guard’s ATON  and icebreaking assets. Specifically, this work is examining (1) the recent  trends in the amount of time ATON and domestic icebreaking assets have  spent performing various missions and the impact of these trends on their  primary missions; (2) the condition of the ATON and domestic icebreaking  assets and the impact of their condition on performing their primary  missions; and (3) the actions the Coast Guard has taken to upgrade or  better manage its ATON and domestic icebreaking assets or use  alternatives to carry out their missions. While conducting this work, we  have interviewed Coast Guard program and maintenance officials at  headquarters, area commands, and selected districts to obtain information  on the missions these assets carry out, the condition of the assets, and the  past and estimated future costs to maintain and deploy them. We also  interviewed these officials and reviewed documents about the Coast  Guard’s plans to maintain or replace these assets. We also analyzed Coast  Guard data from 2000 to 2004 on condition tracking measures, resources  spent to operate the assets, and the number of hours the assets spent on  Coast Guard missions. Finally, we interviewed crew members of various  assets, selected by nonprobability sample—to provide diversity among  asset types and locations—to obtain their views on the condition and  maintenance of their assets and any impact the assets’ condition may have  had on their ability to carry out their missions.
This testimony is based on published GAO reports and briefings, as well as  additional audit work that was conducted in accordance with generally  accepted government auditing standards. We conducted our work for this  testimony from July 2005 through May 2006.
section_title: Appendix II: Breakdown of the Coast Guard’s Fiscal Year 2007 Request
paragraphs: Appendix II provides a breakdown of the Coast Guard’s fiscal year 2007  budget request. In addition to operating expenses and acquisition,  construction, and improvements, the remaining Coast Guard budget  accounts include areas such as environmental compliance and restoration,  reserve training, and oil spill recovery. (See table 2.)
section_title: Appendix III: Additional Information on Specific Coast Guard Program Results
paragraphs: Appendix III provides a detailed list of Coast Guard performance results  for the Coast Guard’s 11 programs from fiscal year 2002 through 2005.  Shaded entries in table 3 indicate those years that the Coast Guard  reported meeting its target; unshaded entries indicate those years that the  Coast Guard reported not meeting its target. Each program is discussed in  more detail below.
subsections: section_title: Programs Meeting Fiscal Year 2005 Performance Targets
paragraphs: U.S. Exclusive Economic Zone Enforcement. The Coast Guard  reported that in fiscal year 2005, it met the performance target for U.S.  exclusive economic zone enforcement—defined as the number of  foreign vessel incursions into the U. S. Exclusive Economic Zone, by  detecting 174 foreign vessel incursions, within the performance target  of 200 or less incursions. This represents a more than 30-percent  decrease in foreign vessel incursions since fiscal year 2004, when the  Coast Guard detected 247 incursions. Coast Guard officials attributed  this decrease in incursions to many factors, including the agency’s  efforts in combating incursions, such as an increased number of air and  water patrols, and the likelihood that some Mexican fleets known to  cross into U.S. waters were damaged during the 2005 hurricane season.
Ice operations. To meet this performance target, the Coast Guard’s ice  operations program must keep winter waterway closures to 8 days or  fewer for severe winters and less than 2 days per year for average  winters. According to Coast Guard documents, the agency met its  target for an average winter with 0 days of waterway closures during  the 2005 ice season.
Search and rescue. The Coast Guard reported that performance in this  area, as measured by the percentage of mariners’ lives saved from  imminent danger, was 86.1 percent, just above the target of 86 percent  for fiscal year 2005. This result is similar to the fiscal year 2004 result of  saving 86.8 percent of lives in imminent danger. The Coast Guard  identified continuing improvements in response resources and  improvements made in commercial vessel and recreational boating  safety as the main reasons for continuing to meet the target.
Aids to navigation. According to Coast Guard reports, the aids to  navigation program performance measure—that is, the 5-year average  number of collisions, allisions, and groundings—improved in fiscal year  2005 by dropping to 1,825 incidents from 1,876 incidents in fiscal year  2004. The fiscal year 2005 total was also below the target of 1,831. The  Coast Guard attributes this continued decrease to a multifaceted  system of prevention activities, including radio aids to navigation,  communications, vessel traffic services, dredging, charting, regulations,  and licensing.
Ports, waterways, and coastal security. In fiscal year 2005, the Coast  Guard began using a new measure of program performance—the  percent reduction of terrorism-related risk in the maritime  environment. According to Coast Guard officials, this measure is based  on an assessment of the total amount of maritime risk under the Coast  Guard’s authority. At the end of each fiscal year the Coast Guard  calculates the amount of this total risk that has been reduced by the  program’s activities throughout the fiscal year. Officials added that  because of the dynamic and changing nature of risk, the total amount  of maritime risk under the Coast Guard’s authority—the baseline level  of risk—is recalculated annually. Because this was the first year the  agency used the measure, there was no previous performance baseline  to establish a numeric annual target. However, according to the Coast  Guard, in the absence of a numeric target, the program used, and met a  target of fully implementing all planned activities geared toward  lowering the risk due to terrorism in the maritime domain.
Marine environmental protection. The marine environmental  protection measure of performance is the 5-year average annual  number of oil and chemical spills greater than 100 gallons per 100  million tons shipped. According to Coast Guard reports, since fiscal  year 2002, the reported average number of oil and chemical spills has  dropped from 35.1 to 18.5 in fiscal year 2005. The Coast Guard  identified its prevention, preparedness, and response programs— including industry partnerships and incentive programs—as reasons  for the drop.
Marine safety. The marine safety measure—a 5-year average of  passenger and maritime deaths and injuries— achieved its fiscal year  2005 performance target of 1,317. During fiscal year 2005 there were  1,311 incidents, a slight increase from 1,299 incidents in fiscal year  2004. Beginning in fiscal year 2006, the Coast Guard will use a revised  version of this measure that includes injuries of recreational boaters as  well, representing a broader and more complete view of marine safety.
subsections: section_title: Program Expected to Meet Fiscal Year 2005 Target
paragraphs: Illegal drug interdiction. While complete results for the illegal drug  interdiction performance measure—the rate at which the Coast Guard  removes cocaine bound for the U.S. via non-commercial maritime  transport—are not yet available, the Coast Guard anticipates exceeding  the fiscal year 2005 target of removing 19 percent or more of cocaine  bound for the U.S. According to Coast Guard officials, in fiscal year  2005 the Coast Guard removed a record 137.5 metric tons of cocaine  bound for the U.S. Coast Guard officials believe that this record  amount of cocaine removed will result in exceeding the fiscal year 2005  performance target. Final program results are due to be published in  July 2006.
section_title: Programs Not Meeting Targets in Fiscal Year 2005
paragraphs: Defense Readiness. Defense readiness is measured by the percent of  time that units meet combat readiness status at a C-2 level. The Coast  Guard reported that the overall level of performance for the defense  readiness program decreased for the second consecutive year from a  high of 78 percent in fiscal year 2003, to 76 percent in fiscal year 2004,  and 67 percent in fiscal year 2005. According to Coast Guard officials,  this decline in recent years was because of staffing shortages for  certain security units within the defense readiness mission. According  to Coast Guard officials, the agency intends to solve these staffing  problems by offering incentives for participation as well as making  participation mandatory instead of voluntary, as it was previously.
Living marine resources. The Coast Guard reported that the  performance measure for living marine resources—defined as the  percentage of fishermen complying with federal regulations—was   96.4 percent, just below the target of 97 percent for fiscal year 2005.  This result is similar to the fiscal year 2004 result of 96.3 percent.  According to Coast Guard officials, the agency missed the fiscal year  2005 target because of a variety of economic conditions and variables  beyond Coast Guard control, such as hurricane damage, high fuel  costs, fewer days-at-sea allocations, and lucrative seafood prices in  some fisheries—which created greater incentives for fishermen to  violate fishery regulations. The Coast Guard conducted 6,076 fisheries  boardings in fiscal year 2005, an increase of more than 30 percent since  fiscal year 2004. However, it is important to note that the compliance  rate is a conservative estimate of agency performance because the  Coast Guard targets vessels for boarding, thereby making it more likely  that they will find vessels that are not in compliance with fishery  regulations. According to Coast Guard officials, a key contributor to  targeting vessels is the vessel monitoring system, which has enhanced  the agency’s ability to target vessels by providing more timely  information.
Undocumented migrant interdiction. According to Coast Guard  reports, in fiscal year 2005 the Coast Guard did not meet its  performance target of interdicting or deterring at least 88 percent of  undocumented aliens from Cuba, Haiti, the Dominican Republic, and  China attempting to enter the U.S. through maritime routes. The Coast  Guard identified 5,830 successful arrivals out of an estimated threat of  40,500 migrants yielding an interdiction and deterrence rate of 85.5  percent, a decrease from the fiscal year 2004 result of 87.1 percent.  According to the Coast Guard, program performance decreased  because the flow of migrants was higher than in previous years,  increasing from almost 22,000 in fiscal year 2002, to more than 40,000  in fiscal year 2005. Coast Guard officials said that the agency is  developing a new measure to better account for both the Coast Guard’s  efforts and the migrant flow to more accurately report program  performance. This new measure will include migrants of all  nationalities that successfully arrive in the U.S. through maritime  routes.
section_title: Related GAO Products
paragraphs: United States Coast Guard: Improvements Needed in Management and  Oversight of Rescue System Acquisition. GAO-06-623. Washington, D.C.:  May 31, 2006.
Coast Guard: Changes in Deepwater Acquisition Plan Appear Sound,  and Program Management Has Improved, but Continued Monitoring Is  Warranted. GAO-06-546. Washington, D.C.: April 28, 2006.
Coast Guard: Progress Being Made on Addressing Deepwater Legacy  Asset Condition Issues and Program Management, but Acquisition  Challenges Remain. GAO-05-757. Washington, D.C.: July 22, 2005.
Coast Guard: Preliminary Observations on the Condition of Deepwater  Legacy Assets and Acquisition Management Challenges. GAO-05-651T.  Washington, D.C.: June 21, 2005.
Maritime Security: Enhancements Made, but Implementation and  Sustainability Remain Key Challenges. GAO-05-448T. Washington, D.C.:  May 17, 2005.
Coast Guard: Preliminary Observations on the Condition of Deepwater  Legacy Assets and Acquisition Management Challenges. GAO05-307T.  Washington, D.C.: April 20, 2005.
Coast Guard: Observations on Agency Priorities in Fiscal Year 2006  Budget Request. GAO-05-364T. Washington, D.C.: March 17, 2005.
Coast Guard: Station Readiness Improving, but Resource Challenges and  Management Concerns Remain. GAO-05-161. Washington, D.C.: January  31, 2005.
Maritime Security: Better Planning Needed to Help Ensure an Effective  Port Security Assessment Program. GAO-04-1062. Washington, D.C.:  September 30, 2004.
Maritime Security: Partnering Could Reduce Federal Costs and  Facilitate Implementation of Automatic Vessel Identification System.  GAO-04-868. Washington, D.C.: July 23, 2004.
Maritime Security: Substantial Work Remains to Translate New  Planning Requirements into Effective Port Security. GAO-04-838.  Washington, D.C.: June 30, 2004.
Coast Guard: Deepwater Program Acquisition Schedule Update Needed.  GAO-04-695. Washington, D.C.: June 14, 2004.
Coast Guard: Station Spending Requirements Met, but Better Processes  Needed to Track Designated Funds. GAO-04-704. Washington, D.C.: May  28, 2004.
Coast Guard: Key Management and Budget Challenges for Fiscal Year  2005 and Beyond. GAO-04-636T. Washington, D.C.: April 7, 2004.
Coast Guard: Relationship between Resources Used and Results Achieved  Needs to Be Clearer. GAO-04-432. Washington, D.C.: March 22, 2004.
Contract Management: Coast Guard’s Deepwater Program Needs  Increased Attention to Management and Contractor Oversight.   GAO-04-380. Washington, D.C.: March 9, 2004.
Coast Guard: New Communication System to Support Search and  Rescue Faces Challenges. GAO-03-1111. Washington, D.C.: September 30,  2003.
Maritime Security: Progress Made in Implementing Maritime  Transportation Security Act, but Concerns Remain. GAO-03-1155T.  Washington, D.C.: September 9, 2003.
Coast Guard: Actions Needed to Mitigate Deepwater Project Risks.   GAO-01-659T. Washington, D.C.: May 3, 2001.
Coast Guard: Progress Being Made on Deepwater Project, but Risks  Remain. GAO-01-564. Washington, D.C.: May 2, 2001.
Coast Guard: Strategies for Procuring New Ships, Aircraft, and Other  Assets. GAO/T-HEHS-99-116. Washington, D.C.: Mar. 16, 1999.
Coast Guard’s Acquisition Management: Deepwater Project’s  Justification and Affordability Need to Be Addressed More Thoroughly.  GAO/RCED-99-6. Washington, D.C.: October 26, 1998.
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