Coast Guard: Observations on the Fiscal Year 2010 Budget and Related Performance and Management Challenges
Released: 2009-07-07T00:00:00

Letter

Background

A component of DHS, the Coast Guard is a multimission military service that serves as the principal federal agency responsible for maritime safety, security, and environmental stewardship. In addition to being one of the five Armed Services of the United States, the Coast Guard serves as a law enforcement and regulatory agency with broad domestic authorities. In its most recent Posture Statement, the Coast Guard reported having nearly 49,900 full-time positions—about 42,600 military and 7,300 civilians. In addition, the service reported that it has about 8,100 reservists who support the national military strategy or provide additional operational support or surge capacity during times of emergency, such as natural disasters. The Coast Guard also reported that it utilizes the services of approximately 29,000 volunteer auxiliary personnel who conduct a wide array of activities, ranging from search and rescue to boating education. The Coast Guard has responsibilities that fall under two broad mission categories—homeland security and non-homeland security. Within these categories, the Coast Guard’s primary activities are further divided into 11 statutory missions, as shown in table 1.

For each of these 11 missions, the Coast Guard has developed performance measures to communicate agency performance and provide information for the budgeting process to Congress, other policymakers, and taxpayers. Each year, the Coast Guard undergoes a process to assess performance and establish performance targets for the subsequent year. In May 2009, the Coast Guard published its most recent performance report, which presents the service’s accomplishments for fiscal year 2008.

To help carry out its missions, the Coast Guard has a large-scale acquisition program, called Deepwater, under way to modernize its fleet.

The Deepwater program now includes projects to build or modernize five classes each of vessels and aircraft, as well as to procure other capabilities such as improved command, control, communications, computer, intelligence, surveillance, and reconnaissance systems. To carry out these acquisitions, the Coast Guard awarded a contract in June 2002 to Integrated Coast Guard Systems (ICGS), a joint venture formed by Lockheed Martin Corporation and Northrop Grumman Ship Systems, to serve as a systems integrator. However, in April 2007, the Coast Guard acknowledged it had relied too heavily on contractors. This reliance, among other concerns, contributed to an inability to control costs. As a result, the Coast Guard initiated several major changes to the acquisition approach to Deepwater, the key one being that the Coast Guard would take over the lead role in systems integration from ICGS.

Coast Guard Budget Request for Fiscal Year 2010 Is 4.2 Percent Higher than the Previous Year’s Enacted Budget, but Long-Term Budget Outlook Remains Uncertain

The Coast Guard’s budget request for fiscal year 2010 is $9.73 billion, which is approximately $393 million (or 4.2 percent) more than the service’s enacted budget for fiscal year 2009 (see table 2). These calculations do not include either the supplemental funding of $242.5 million that the Coast Guard reported receiving in fiscal year 2009 or the $240 million provided by the Recovery Act (discussed below). When the supplemental and the Recovery Act funding are taken into account and added to the fiscal year 2009 enacted budget, the calculations reflect a decrease of about 1 percent from fiscal year 2009 to fiscal year 2010.

Of the $9.73 billion requested for fiscal year 2010, about $6.6 billion, or approximately 67 percent, is for operating expenses (OE). The OE account is the primary appropriation that finances the Coast Guard’s activities, including operating and maintaining multipurpose vessels, aircraft, and shore units. In comparing the 2010 budget request to the 2009 enacted budget, funding for the OE account represents an increase of $361 million (or about 6 percent). The next two largest accounts in the fiscal year 2010 budget request—each with funding at about $1.4 billion—are the acquisition, construction, and improvements account (AC&I) and the retired pay account. Collectively, these two accounts represent about 28 percent of the Coast Guard’s total budget request for fiscal year 2010. In terms of percentage increases in comparing the 2010 budget request to the 2009 enacted budget, the retired pay account reflects the highest percentage increase (about 10 percent) of all accounts.

According to the Coast Guard, some of the key initiatives for fiscal year 2010 include increasing the number of marine inspectors and investigative officers, and supporting financial management improvements, among others. Furthermore, as a result of the emergence of the U.S. Global Positioning System (a space-based system of satellites) as an aid to navigation, the long-range radio-navigation system known as LORAN-C (a terrestrial-based system operated by the Coast Guard) is expected to be terminated in fiscal year 2010. This termination, according to the Coast Guard, is projected to result in a savings of $36 million in fiscal year 2010 and additional savings of $154 million over the following 4 years.

Although the Coast Guard receives funding by appropriation account rather than by individual missions, the Coast Guard provides an estimated comparison of homeland security versus non-homeland security funding as part of its annual budget request. Based on these estimates, the Coast Guard’s fiscal year 2010 budget request for homeland security missions represents approximately 36 percent of the service’s overall budget, with the non-homeland security funding representing approximately 64 percent. However, as a multimission agency, the Coast Guard notes that it may conduct multiple mission activities simultaneously. For example, a multimission asset conducting a security escort is also monitoring safety within the harbor and could potentially be diverted to conduct a search and rescue case. As a result, it is difficult to accurately detail the level of resources dedicated to each mission. Figure 1 shows the Coast Guard’s estimated funding levels for fiscal year 2010 by each statutory mission.

In addition to the Coast Guard’s enacted budget for fiscal year 2009, the Coast Guard has received $240 million of funding under the Recovery Act. According to the Coast Guard, the service’s Recovery Act funds are to be allocated as follows: $142 million is to be used to fund bridge alteration projects in four states—the Mobile Bridge in Hurricane, Alabama; the EJ&E Bridge in Devine, Illinois; the Burlington Bridge in Burlington, Iowa; and the Galveston Causeway Railroad Bridge in Galveston, Texas. $88 million in Recovery Act funds is to support shore infrastructure projects—construction of personnel housing, boat moorings, and other improvements—in Alaska, Delaware, North Carolina, Oregon, Virginia, and Washington. $10 million is to help upgrade or replace worn or obsolete components on the Coast Guard’s fleet of 12 High Endurance Cutters. The 40-plus-year-old cutters benefiting from the Recovery Act-funded projects are based in Kodiak, Alaska; Alameda and San Diego, California; Honolulu, Hawaii; Charleston, South Carolina; and Seattle, Washington.

While the Coast Guard’s budget has increased considerably since 2003, the long-term budget outlook for the agency is uncertain. From fiscal year 2003 through fiscal year 2009, the Coast Guard’s budget increased an average of 5.5 percent per year. However, this administration’s current budget projections indicate that the DHS annual budget is expected to remain constant or decrease over the next 10 years. It is important to note that these budget projections are nominal figures, which are not adjusted or normalized for inflation. Thus, if inflationary pressures arise in future years, budgetary resources available to DHS could be further strained. Given the uncertainty of future budgets, it remains important for the Coast Guard to ensure that limited resources are utilized most effectively to successfully manage existing challenges and emerging needs. For example, as we reported in March 2008, affordability of the Deepwater program has been an ongoing concern for many years, and will continue to be a major challenge to the Coast Guard given the other demands upon the agency for both capital and operations spending. The increasing demand for Coast Guard resources in the arctic region also presents an emerging challenge that will need to be balanced against competing priorities. For example, two of the Coast Guard’s three polar icebreakers are more than 30 years old and, and in 2008 the Coast Guard estimated that it could cost between $800 million to $925 million dollars per ship to procure new replacement ships. Such needs could pose challenges to the Coast Guard in an era of increased budget constraints.

Coast Guard Reported on Several New Performance Measures for Fiscal Year 2008

Each year, the Coast Guard conducts a process of performance evaluation, improvement planning, and target setting for the upcoming year. According to the Coast Guard, this process helps ensure that the performance measures and associated targets adequately represent desired Coast Guard mission outcomes, are reflective of key drivers and trends, and meet applicable standards for federal performance accounting. In addition, as part of a larger DHS effort, the Coast Guard conducted a more comprehensive evaluation of its performance measures in fiscal year 2008. This evaluation process included input on potential improvements to the Coast Guard’s performance measures from the DHS Office of Program Analysis and Evaluation and us.

Consequently, the Coast Guard initiated a number of changes to its performance reporting for fiscal year 2008 to better capture the breadth of key mission activities and the results achieved. Our review of the Coast Guard’s performance reporting for fiscal year 2008 indicates that the Coast Guard revised or broadened several existing measures. As a result, the Coast Guard reported on a total of 21 primary performance measures for fiscal year 2008—3 homeland security mission measures and 18 non- homeland security mission measures. This represents a substantial change from previous years, in which the Coast Guard reported on a single performance measure for each of the service’s 11 statutory missions (see app. I for a list of the primary performance measures and reported performance results for fiscal years 2004 through 2008). One of the principal changes involved the disaggregation of existing measures into several distinct component measures. For example, in prior years, the marine safety mission was assessed using one primary measure—the 5- year average annual mariner, passenger, and recreational boating deaths and injuries. However, the Coast Guard reported on six different measures for the marine safety mission in fiscal year 2008—annual deaths and injuries for each of three separate categories of individuals (commercial mariners, commercial passengers, and recreational boaters) as well as 5- year averages of each of these three categories.

As indicated in table 3, the Coast Guard reported meeting 15 of its 21 performance targets in fiscal year 2008.

Also, table 3 shows that the Coast Guard reported meeting all performance targets for 5 of the 11 statutory missions—ports, waterways, and coastal security; drug interdiction; marine environmental protection; other law enforcement; and ice operations. Regarding the drug interdiction mission, for example, the fiscal year goal was to achieve a removal rate of at least 28 percent for cocaine being shipped to the United States via non- commercial means. The Coast Guard reported achieving a removal rate of 34 percent.

For another 3 of the 11 statutory missions—aids to navigation, search and rescue, and marine safety—the Coast Guard reported partially meeting performance targets. For each of these missions, the Coast Guard did not meet at least one performance target among the suite of different measures used to assess mission performance. For example, regarding the search and rescue mission, which has two performance goals, the Coast Guard reported that one goal was met (saving at least 76 percent of people from imminent danger in the maritime environment), but the other goal (saving at least 87 percent of mariners in imminent danger) was narrowly missed, as reflected by a success rate of about 84 percent.

For the other 3 statutory missions—defense readiness, migrant interdiction, and living marine resources—the Coast Guard reported that it did not meet fiscal year 2008 performance targets. However, for these missions, the Coast Guard reported falling substantially short of its performance target for only one mission—defense readiness. Although performance for this mission rose slightly—from 51 percent in fiscal year 2007 to 56 percent in fiscal year 2008—the Coast Guard’s goal was to meet designated combat readiness levels 100 percent of the time. However, the Coast Guard remains optimistic that the relevant systems, personnel, and training issues—which are being addressed in part by the Deepwater acquisition program—will result in enhanced capability for all missions, including defense readiness. Yet, the Coast Guard further noted in its annual performance report that it is reviewing the defense readiness metrics to determine what potential changes, if any, need to be made.

In comparison, the Coast Guard met targets for 6 of its 11 statutory missions in fiscal year 2007. The overall reduction in the number of missions meeting performance targets in fiscal year 2008 is largely because of the inability of the Coast Guard to meet its performance target for the migrant interdiction mission. However, this may be attributed, in part, to the new measure used for the migrant interdiction mission for fiscal year 2008. Regarding the three statutory missions whose performance targets were not met, the Coast Guard’s reported performance generally remained steady in fiscal year 2008 compared with previous years, and the Coast Guard was relatively close to meeting its performance targets. For example, for the migrant interdiction and living marine resources missions, the Coast Guard reported achieving over 96 and 98 percent of the respective performance targets.

The Ongoing Modernization Program, Workforce Planning Issues, and Large-Scale Acquisitions Present Management Challenges

The Coast Guard faces a number of different management challenges that we have identified in prior work. Highlighted below are four such challenges that the Coast Guard faces as it proceeds with efforts to modernize its organization, address shifting workforce needs, manage the Deepwater acquisition program, and mitigate operational issues caused by delays in the Deepwater program.

The Coast Guard Has an Ongoing Modernization Program, but Work Remains to Develop Performance Metrics

The Coast Guard is currently undertaking a major effort—referred to as the modernization program—which is intended to improve mission execution by updating the service’s command structure, support systems, and business practices. The modernization program is specifically focused on transforming or realigning the service’s command structure from a geographically bifurcated structure into a functionally integrated structure—as well as updating mission support systems, such as maintenance, logistics, financial management, human resources, acquisitions, and information technology.

The Coast Guard has several efforts under way or planned for monitoring the progress of the modernization program and identifying needed improvements. For example, the Coast Guard has established timelines that identify the sequencing and target dates for key actions related to the modernization program consistent with project management principles. Our prior work has shown that such action-oriented goals along with associated timelines and milestones are critical to successful organizational transformation efforts and are necessary to track an organization’s progress toward its goals. However, as we reported in June 2009, the Coast Guard’s efforts to develop applicable performance measures to evaluate results of the modernization program remain in the early stages. For example, the Coast Guard has begun to identify key internal activities and outputs required for mission execution within the realigned organizational structure. This effort, expected to be completed in summer 2009, is intended as a preliminary step before identifying associated business metrics that can be used to evaluate how the modernization program has impacted the delivery of core services and products. However, Coast Guard officials were still in the process of developing a specific time frame for the estimated completion of this next step. As outlined in the Government Performance and Results Act of 1993 and Standards for Internal Control in the Federal Government, performance measures are important to reinforce the connection between long-term strategic goals and the day-to-day activities of management and staff.

In April 2008, to evaluate aspects of the modernization program and identify potential improvements, the Coast Guard engaged the National Academy of Public Administration (NAPA) to conduct a third-party, independent review. After completing its review, NAPA provided a report to the Coast Guard in April 2009. The report recognized that the Coast Guard’s planned organizational realignment “makes logical sense” and that the service’s leadership “is collectively engaged” to improve mission execution and support-related business processes. NAPA cautioned, however, that the Coast Guard remains in the early stages of its organizational transformation. To help mitigate potential implementation risks and facilitate a successful modernization process, NAPA recommended, among other steps, that the Coast Guard develop a clear quantifiable business case for modernization, measurement tools, and a process of metrics assessment to track modernization progress and the effects on mission execution.

Similar to GAO’s findings, NAPA concluded that one of the key challenges faced by the Coast Guard is the development of adequate measures to assess the progress and outcomes of the modernization program. NAPA noted that such measures are important to ensure that the impacts of modernization are aligned with intended objectives and that they provide an opportunity to “course-correct” as necessary. NAPA further noted that the development of appropriate measurement tools will help to provide quantifiable support for the modernization business case and facilitate stakeholder buy-in. After receiving NAPA’s report, the Coast Guard established a new organizational entity—the Coast Guard Enterprise Strategy, Management and Doctrine Oversight Directorate. Among other functions, this directorate is to be responsible for strategic analysis, performance management, and ongoing coordination of change initiatives within the modernization effort and beyond.

Workforce Planning Presents Challenges for the Coast Guard

Generally, it has been noted by Congress and supported by our past reviews that the Coast Guard faces significant challenges in assessing personnel needs and providing a workforce to meet the increased tempo of maritime security missions as well as to conduct traditional marine safety missions such as search and rescue, aids to navigation, vessel safety, and domestic ice breaking. Workforce planning challenges are further exacerbated by the increasingly complex and technologically advanced job performance requirements of the Coast Guard’s missions. Workforce planning challenges include managing the assignments of military personnel who are subject to being rotated among billets and multiple missions. As we have previously reported, rotation policies can affect, for example, the Coast Guard’s ability to develop professional expertise in its personnel and to retain qualified personnel as they progress in their careers.

In October 2008, the Coast Guard received congressional direction to develop a workforce plan that would identify the staffing levels necessary for active duty and reserve military members, as well as for civilian employees, to carry out all Coast Guard missions. The workforce plan is to include (1) a gap analysis of the mission areas that continue to need resources and the type of personnel necessary to address those needs; (2) a strategy, including funding, milestones, and a timeline for addressing personnel gaps for each category of employee; (3) specific strategies for recruiting individuals for hard-to-fill positions; and (4) any additional authorities and resources necessary to address staffing requirements. In response, the Coast Guard plans to provide Congress with a workforce plan this summer. As part of our ongoing work for the House Transportation and Infrastructure Committee, we plan to review the Coast Guard’s workforce plan. The scope of our work includes assessing whether the Coast Guard’s workforce plan comports with the parameters set out by DHS guidanceand contains the elements that we previously reported as being essential for effective workforce plans. Our scope will also include assessing the Coast Guard’s related workforce initiatives, such as the Sector Staffing Model and the Officer Specialty Management System.

As an example of its workforce planning challenges, the Coast Guard cites continued difficulties in hiring and retaining qualified acquisition personnel—challenges that pose a risk to the successful execution of the service’s acquisition programs. According to Coast Guard human capital officials, the service has funding for 855 acquisition-program personnel (military and civilian personnel) but has filled 717 of these positions, leaving 16 percent of the positions unfilled, as of April 2009. The Coast Guard has identified some of these unfilled positions as core to the acquisition workforce, such as contracting officers and specialists, program management support staff, and engineering and technical specialists.

In addition, the Coast Guard has begun to address several workforce planning challenges raised by Congress related to its marine safety mission. In November 2008, the Coast Guard published the U.S. Coast Guard Marine Safety Performance Plan FY2009-2014, which is designed to reduce maritime casualties, facilitate commerce, improve program processes and management, and improve human resource capabilities. The Coast Guard recognized that marine safety inspectors and investigators need increased competency to fulfill this mission. The plan sets out specific objectives, goals, and courses of action to improve this competency by building capacity of inspectors and investigators, adding civilian positions, creating centers of expertise specific to marine safety, and expanding opportunities for training in marine safety. As noted, the challenge for the Coast Guard is to successfully implement this plan, along with the others we have described above.

The Coast Guard Has Taken Steps to Become the Deepwater Systems Integrator, but Some Concerns Remain Regarding Procurement Processes and Cost Reporting

In addition to workforce planning challenges, the Coast Guard faces other acquisition-related challenges in managing the Deepwater program. The Coast Guard has taken steps to become the systems integrator for the Deepwater program and, as such, is responsible for planning, organizing, and integrating the individual assets into a system-of-systems to meet the service’s requirements. First, the Coast Guard has reduced the scope of work performed by ICGS and has assigned those functions to Coast Guard stakeholders. For example, in March 2009, the Coast Guard issued a task order to ICGS limited to tasks such as data management and quality assurance for assets currently under contract with ICGS. The Coast Guard has no plans to award additional orders to ICGS for systems integrator functions when this task order expires in February 2011. Second, as part of its system integration responsibilities, the Coast Guard has initiated a fundamental reassessment of the capabilities, number, and mix of assets it needs to fulfill its Deepwater missions by undertaking a “fleet mix analysis.” The goals of this study include validating mission performance requirements and revisiting the number and mix of all assets that are part of the Deepwater program. According to the Coast Guard, it hopes to complete this study later this summer. Third, at the individual Deepwater asset level, the Coast Guard has improved and begun to apply the disciplined management process found in its Major Systems Acquisition Manual, which requires documentation and approval of acquisition decisions at key points in a program’s life-cycle by designated officials at high levels. However, as we reported in April 2009, the Coast Guard did not meet its goal of complete adherence to this process for all Deepwater assets by the second quarter of fiscal year 2009. For example, key acquisition management activities—such as operational requirements documents and test plans—are not in place for assets with contracts recently awarded or in production, placing the Coast Guard at risk of cost overruns or schedule slippages. In the meantime, as we reported in April 2009, the Coast Guard continues with production of certain assets and award of new contracts in light of what it views as pressing operational needs.

Since the establishment of the $24.2 billion baseline estimate for the Deepwater program in 2007, the anticipated cost, schedules, and capabilities of many of the Deepwater assets have changed, in part because of the Coast Guard’s increased insight into what it is buying. Coast Guard officials stated that the original baseline was intended to establish cost, schedule, and operational requirements as a whole, which were then allocated to the major assets comprising the Deepwater program. As a result, the baseline figure did not reflect a traditional cost estimate, which generally assesses costs at the asset level, but rather the overall anticipated costs as determined by the contractor. However, as the Coast Guard has assumed greater responsibility for management of the Deepwater program, it has begun to improve its understanding of costs by developing its own cost baselines for individual assets using traditional cost estimating procedures and assumptions. As a result of these revised baselines, the Coast Guard has determined that some of the assets it is procuring may cost more than anticipated. As we reported in April 2009, information showed that the total cost of the program may grow by $2.1 billion. As more baselines for other assets are approved by DHS, further cost growth may become apparent. These cost increases present the Coast Guard with additional challenges involving potential tradeoffs associated with quantity or capability reductions for Deepwater assets. In addition, our April 2009 testimony noted that while the Coast Guard plans to update its annual budget requests with asset-based cost information, the current structure of its budget submission to Congress does not include certain details at the asset level, such as estimates of total costs and total numbers to be procured.

In our previous reports on the Deepwater program, we have made a number of recommendations to improve the Coast Guard’s management of the program. The Coast Guard has implemented or is in the process of implementing these recommendations.

Problems in Deepwater Management and Oversight Have Led to Delivery Delays and Other Operational Challenges That the Coast Guard Is Working to Overcome

Other management challenges associated with the Deepwater program have operational or mission performance implications for the Coast Guard. Our prior reports and testimonies have identified problems with management and oversight of the Deepwater program that have led to delivery delays and other operational challenges for certain assets— particularly (1) patrol boats and their anticipated replacements, the Fast Response Cutters and (2) and the National Security Cutters. The Coast Guard is working to overcome these issues, as discussed below.

As we reported in June 2008, 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 their replacement vessel (the Fast Response Cutter) became operational. Conversion of the first eight 110-foot patrol boats proved unsuccessful, however, and effective November 2006, the Coast Guard decided to remove these vessels from service and accelerate the design and delivery of the replacement Fast Response Cutters. The removal from service of the eight converted patrol boats in 2006 created operational challenges by reducing potential patrol boat availability by 20,000 annual operational hours. For example, fewer patrol boats available on the water may affect the level of deterrence provided as part of homeland security missions and reduce the Coast Guard’s ability to surge during periods of high demand, such as may occur during missions to interdict illegal drugs and undocumented migrants.

To mitigate the loss of these patrol boats and their associated operational hours in the near term, the Coast Guard implemented a number of strategies beginning in fiscal year 2007. For example, the Coast Guard began using the crews from the eight patrol boats removed from service to augment the crews of eight other patrol boats, thereby providing two crews that can alternate time operating each of the eight patrol boats (i.e., double-crewing). According to Coast Guard officials, additional strategies employed by the Coast Guard that are still in use include increasing the operational hours of 87-foot patrol boats and acquiring four new 87-foot patrol boats, among others. To help fill the longer-term patrol boat operational gap, Coast Guard officials are pursuing the acquisition of a commercially available Fast Response Cutter. The first of these cutters is scheduled to be delivered in early fiscal year 2011, and the Coast Guard intends to acquire a total of 12 by early fiscal year 2013. While the contract is for the design and production of up to 34 cutters, the Coast Guard plans to assess the capabilities of the first 12 Fast Response Cutters before exercising options for additional cutters.

Regarding National Security Cutters, the first vessel (National Security Cutter USCGC Bertholf) was initially projected for delivery in 2006, but slipped to August 2007 after design changes made following the terrorist attacks of September 11, 2001, and was again delayed until May 2008 because of damage to the shipyard caused by Hurricane Katrina. Based on the results of our ongoing review, the USCGC Bertholf will likely be 1 year behind schedule when it is certified as fully operational, scheduled for the fourth quarter of fiscal year 2010. Further, the eighth and final National Security Cutter was to be fully operational in 2016 but is currently projected to be fully operational by the fourth quarter of calendar year 2018. The Coast Guard has not yet acquired the unmanned aircraft and new small boats that are to support the National Security Cutters. The Coast Guard plans to draft operational specifications for the unmanned aircraft in 2010, and to acquire new small boats that are expected to be deployed with the first National Security Cutter by the end of calendar year 2010. After the unmanned aircraft is selected, the Coast Guard must contract for the acquisition and production of the unmanned aircraft, accept delivery of it, and test its capabilities before deploying it with the National Security Cutter—activities that can take several years. Delays in the delivery of the National Security Cutters and the associated support assets are expected to lead to a projected loss of thousands of anticipated cutter operational days for conducting missions through 2017, and may prevent the Coast Guard from employing the full capabilities of the National Security Cutters and the support assets for several years. Given the enhanced capabilities that the Coast Guard believes the National Security Cutters have over existing assets, a loss in operational days could negatively affect the Coast Guard’s ability to more effectively conduct missions, such as enforcement of domestic fishing laws, interdiction of illegal drugs and undocumented migrants, and participation in Department of Defense operations.

To address these potential operational gaps, the Coast Guard has decided to continue to rely on its aging fleet of High Endurance Cutters and to use existing aircraft and small boats to support the National Security Cutters. However, because the High Endurance Cutters are increasingly unreliable, the Coast Guard plans to perform a series of upgrades and maintenance procedures on selected vessels. However, before this work begins, the Coast Guard plans to conduct an analysis on the condition of the High Endurance Cutters and complete a decommissioning schedule. As a result, work on the first selected High Endurance Cutter is not scheduled for completion until 2016. Until the Coast Guard has acquired new unmanned aircraft and small boats, the Coast Guard plans to support the National Security Cutters with the small boats and manned aircraft it currently uses to support the High Endurance Cutter. We will continue to assess this issue as part of our ongoing work and plan to issue a report on the results later this summer.

Madam Chair and Members of the Subcommittee, this completes my prepared statement. I will be happy to respond to any questions that you or other Members of the Subcommittee may have.

GAO Contacts and Staff Acknowledgments

For information about this statement, please contact Stephen L. Caldwell, Director, Homeland Security and Justice Issues, at (202) 512-9610, or caldwells@gao.gov. Contact points for our Office of Congressional Relations and Office of Public Affairs may be found on the last page of this statement. Other individuals making key contributions to this testimony include Danny Burton, Christopher Conrad, Katherine Davis, Christoph Hoashi-Erhardt, Paul Hobart, Dawn Hoff, Lori Kmetz, Ryan Lambert, David Lutter, Brian Schwartz, Debbie Sebastian, and Ellen Wolfe.

Appendix I: Performance Results by Mission, Fiscal Years 2004 through 2008

This appendix provides a detailed list of performance results for the Coast Guard’s 11 statutory missions for fiscal years 2004 through 2008 (see table 4).

Related GAO Products

Coast Guard: Observations on the Genesis and Progress of the Service’s Modernization Program. GAO-09-530R. Washington, D.C.: June 24, 2009.

Coast Guard: Administrative Law Judge Program Contains Elements Designed to Foster Judges’ Independence and Mariner Protections Assessed Are Being Followed. GAO-09-489. Washington, D.C.: June 12, 2009.

Coast Guard: Update on Deepwater Program Management, Cost, and Acquisition Workforce. GAO-09-620T. Washington, D.C.: April 22, 2009.

Coast Guard: Observations on Changes to Management and Oversight of the Deepwater Program. GAO-09-462T. Washington, D.C.: March 24, 2009.

Maritime Security: Vessel Tracking Systems Provide Key Information, but the Need for Duplicate Data Should Be Reviewed. GAO-09-337. Washington, D.C.: March 17, 2009.

Coast Guard: Change in Course Improves Deepwater Management and Oversight, but Outcome Still Uncertain. GAO-08-745. Washington, D.C.: June 24, 2008.

Coast Guard: Strategies for Mitigating the Loss of Patrol Boats Are Achieving Results in the Near Term, but They Come at a Cost and Longer Term Sustainability Is Unknown. GAO-08-660. Washington, D.C.: June 23, 2008.

Status of Selected Aspects of the Coast Guard’s Deepwater Program. GAO-08-270R. Washington, D.C.: March 11, 2008.

Coast Guard: Observations on the Fiscal Year 2009 Budget, Recent Performance, and Related Challenges. GAO-08-494T. Washington, D.C.: March 6, 2008.

Coast Guard: Deepwater Program Management Initiatives and Key Homeland Security Missions. GAO-08-531T. Washington, D.C.: March 5, 2008.

Maritime Security: Coast Guard Inspections Identify and Correct Facility Deficiencies, but More Analysis Needed of Program’s Staffing, Practices, and Data. GAO-08-12. Washington, D.C.: February 14, 2008.

Maritime Security: Federal Efforts Needed to Address Challenges in Preventing and Responding to Terrorist Attacks on Energy Commodity Tankers. GAO-08-141. Washington, D.C.: December 10, 2007.

Coast Guard: Challenges Affecting Deepwater Asset Deployment and Management and Efforts to Address Them. GAO-07-874. Washington, D.C.: June 18, 2007.

Coast Guard: Observations on the Fiscal Year 2008 Budget, Performance, Reorganization, and Related Challenges. GAO-07-489T. Washington, D.C.: April 18, 2007.

Port Risk Management: Additional Federal Guidance Would Aid Ports in Disaster Planning and Recovery. GAO-07-412. Washington, D.C.: March 28, 2007.

Coast Guard: Status of Efforts to Improve Deepwater Program Management and Address Operational Challenges. GAO-07-575T. Washington, D.C.: March 8, 2007.

Maritime Security: Public Safety Consequences of a Terrorist Attack on a Tanker Carrying Liquefied Natural Gas Need Clarification. GAO-07-316. Washington, D.C.: February 22, 2007.

Coast Guard: Preliminary Observations on Deepwater Program Assets and Management Challenges. GAO-07-446T. Washington, D.C.: February 15, 2007.

Coast Guard: Coast Guard Efforts to Improve Management and Address Operational Challenges in the Deepwater Program. GAO-07-460T. Washington, D.C.: February 14, 2007.

Homeland Security: Observations on the Department of Homeland Security’s Acquisition Organization and on the Coast Guard’s Deepwater Program. GAO-07-453T. Washington, D.C.: February 8, 2007.

Coast Guard: Condition of Some Aids-to-Navigation and Domestic Icebreaking Vessels Has Declined; Effect on Mission Performance Appears Mixed. GAO-06-979. Washington, D.C.: September 22, 2006.

Coast Guard: Non-Homeland Security Performance Measures Are Generally Sound, but Opportunities for Improvement Exist. GAO-06-816. Washington, D.C.: August 16, 2006.

Coast Guard: Observations on the Preparation, Response, and Recovery Missions Related to Hurricane Katrina. GAO-06-903. Washington, D.C.: July 31, 2006.

Maritime Security: Information-Sharing Efforts Are Improving. GAO-06-933T. Washington, D.C.: July 10, 2006.

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 to Deepwater 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: 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.

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: Comprehensive Blueprint Needed to Balance and Monitor Resource Use and Measure Performance for All Missions. GAO-03-544T. Washington, D.C.: March 12, 2003.

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