The Coast Guard, a maritime military service within DHS, has a variety of responsibilities including port security and vessel escort, search-and- rescue, and polar ice operations. To carry out these and other responsibilities, the Coast Guard operates a number of vessels, aircraft, and information technology programs. The Coast Guard intends to further meet these responsibilities through ongoing efforts to modernize or replace assets through the Deepwater program. The Coast Guard’s current acquisition portfolio, at $27 billion, includes 17 major acquisition programs and projects and is managed by the Coast Guard Acquisition Directorate, CG-9. Major acquisitions—level I and level II—have life-cycle cost estimates equal to or greater than $1 billion (level I) or from $300 million to less than $1 billion (level II). Major acquisition programs are to receive oversight from DHS’s acquisition review board, which is responsible for reviewing acquisitions for executable business strategies, resources, management, accountability, and alignment to strategic initiatives. The board also supports the Acquisition Decision Authority in determining the appropriate direction for an acquisition at key acquisition decision events. At each Acquisition Decision Event, the Acquisition Decision Authority approves acquisitions to proceed through the acquisition life-cycle phases upon satisfaction of applicable criteria. Additionally, the Coast Guard and other DHS components have Component Acquisition Executives responsible in part for managing and overseeing their respective acquisition portfolios. DHS has a four-phase acquisition process: (1) Need phase—Define a problem and identify the need for a new acquisition; (2) Analyze/Select phase—Identify alternatives and select the best option; (3) Obtain phase—Develop, test, and evaluate the selected option and determine whether to approve production; and (4) Produce/Deploy/Support phase—Produce and deploy the selected option and support it throughout the operational life cycle. Table 1 provides further information about the Coast Guard major acquisition programs. Since 2001, we have reviewed Coast Guard acquisition programs and have reported to Congress, DHS, and the Coast Guard on the risks and uncertainties inherent in its acquisitions. In our June 2010 report on selected DHS major acquisitions, we found that acquisition cost estimates increased by more than 20 percent in five of the Coast Guard’s six major programs we reviewed. For example, the National Security Cutter’s acquisition cost estimate grew from an initial figure of $3.45 billion to $4.75 billion from 2006 to 2009—a 38 percent increase. Moreover, five of six programs faced challenges due to unapproved or unstable baseline requirements, and all six programs experienced schedule delays. The Rescue 21 search-and-rescue program, for example, had both unapproved or unstable baseline requirements and schedule delays. Several of our reports have focused on the Coast Guard’s Deepwater acquisition program. Most recently, in our July 2010 report on the program, we found that the Coast Guard had generally revised its acquisition management policies to align with DHS directives, was taking steps to address acquisition workforce needs, and was decreasing its dependence on the Integrated Deepwater Systems contractor by planning for alternate vendors for some assets, and to award and manage work outside of the Integrated Coast Guard Systems contract for other assets. We also have ongoing work on the status of the Deepwater program that is related but complementary to this report and will result in a separate published report later this year. The Coast Guard updated its overarching acquisition policy since we last reported in July 2010 to better reflect best practices and respond to our prior recommendations, and to more closely align its policy with the DHS Acquisition Management Directive Number 102-01. For example, in November 2010, the Coast Guard revised its Major Systems Acquisition Manual, which establishes policy and procedures, and provides guidance for major acquisition programs. Revisions included a list of the Executive Oversight Council’s roles and responsibilities; aligning roles and responsibilities of independent test authorities to DHS standards, which satisfied one of our prior recommendations; a formal acquisition decision event before a program receives approval for low-rate initial production, which addresses one of our prior recommendations; and a requirement to present an acquisition strategy at a program’s first formal acquisition decision event. The Coast Guard’s Blueprint for Continuous Improvement (Blueprint) was created after the Coast Guard began realigning its acquisition function in 2007 and is designed to provide strategic direction for acquisition improvements. The Blueprint uses GAO’s Framework for Assessing the Acquisition Function at Federal Agencies and the Office of Federal Procurement Policy’s Guidelines for Assessing the Acquisition Function as guidance, but also includes quantitative and qualitative measures important to the acquisitions process. Through these measures, the Coast Guard plans to gain a clearer picture of its acquisition organization’s health. The Blueprint was revised in October 2010 to formalize the acquisition directorate’s integration with the Coast Guard’s mission support structure and includes plans to annually evaluate the Blueprint’s measures. The Coast Guard developed the Blueprint as a top-level planning document to provide acquisition process objectives and strategic direction as well as to establish action items, but DHS’s Inspector General expressed concern that the agency did not prioritize action items and consider the effects of delayed completion of action items on subsequent program outcomes. For example, the 2010 Inspector General report found that by the end of fiscal year 2009, 23 percent of assigned action item completion dates slipped without determining the effect on acquisition improvements. In response to the Inspector General’s report, the Coast Guard has taken steps to prioritize its action items; however, it is too soon to tell the outcome of these actions. These policies were updated to align with DHS guidance and reflect best practices. Coast Guard officials also attribute acquisition reforms to the Coast Guard’s efforts to assume responsibilities for all major acquisition programs. We previously reported in 2009 that the Coast Guard acknowledged its need to define systems integrator functions and assign them to Coast Guard stakeholders as it assumed the systems integrator role. As a result, the Coast Guard established new relationships among its directorates to assume control of key systems integrator roles and responsibilities formerly carried out by the contractor. For example, according to Coast Guard officials, the Coast Guard formally designated certain directorates as technical authorities responsible for establishing, monitoring, and approving technical standards for all assets related to design, construction, maintenance, logistics, C4ISR, life-cycle staffing, and training. In addition, the Coast Guard is developing a Commandant’s Instruction to further institutionalize the roles and responsibilities for Coast Guard’s acquisition management. Beyond updating its major acquisition policies and guidance, the Coast Guard Acquisition Directorate also increased the involvement of its Executive Oversight Council to facilitate its acquisition process. Coast Guard officials stated that the council, initially established in 2009 with an updated charter in November 2010, provides a structured way for flag-level and senior executive officials in the requirements, acquisition, and resources directorates, among others, to discuss programs and provide oversight on a regular basis. As the Coast Guard began assuming the system integrator function from the Deepwater contractor in 2007, it believed it needed a forum to make trade-offs and other program decisions especially in a constrained budget environment; according to officials, the council was established in response to that need. Coast Guard officials noted that major programs are now required to brief the formalized council annually, prior to milestones, and on an ad hoc basis when major risks are identified. According to Coast Guard documentation, from fiscal year 2010 through the first quarter of fiscal year 2011, the council met over 40 times to discuss major programs. For example, the council held more than five meetings to discuss the Offshore Patrol Cutter’s life-cycle costs and system requirements, among other issues. The discussions are captured at a general level in meeting minutes and sent to the Coast Guard Acquisition Directorate for approval. The Coast Guard has made progress in reducing its acquisition workforce vacancies since April 2010. As of November 2010, the percentage of vacancies dropped from about 20 percent to 13 percent or from 190 to 119 unfilled billets out of 951 total billets. Acquisition workforce vacancies have decreased, but program managers have ongoing concerns about staffing program offices. For example, the HH-65 program office has funded and filled 10 positions out of an identified need for 33 positions. Although the program has requested funding for an additional 8 billets for fiscal year 2012, due to the timing of the request, the funding outcome is unknown as of April 2011. Similarly, the Interagency Operations Center program is another office affected by acquisition workforce shortages. According to the Coast Guard, as of March 2011, the program office has funded and filled 11 positions out of the 27 needed. For some of these positions, the Interagency Operations Center program uses staff from the Coast Guard’s Command, Control, and Communications Engineering Center for systems engineering support; however, workforce shortages remain. Program officials may face additional challenges in hiring staff depending on the location of the vacancies within the program’s management levels. For example, a program official stated that vacant supervisory positions must be filled first before filling remaining positions because lower-level positions would not have guidance for their activities. Figure 1 shows the status of the Coast Guard’s acquisition workforce vacancies as of November 2010. We reported in January 2010 that the Coast Guard faces difficulty in identifying critical skills, defining staffing levels, and allocating staff to accomplish its diverse missions. An official Coast Guard statement from 2009 partially attributed the challenge of attracting staff for certain positions to hiring competition with other federal agencies. In February 2010, we reported on the Coast Guard’s long-standing workforce challenges and evaluated the agency’s efforts to address these challenges. For example, we reported that while the Coast Guard developed specific plans to address its human capital challenges, the fell short of identifying gaps between mission areas and personn plans el needed.