[Senate Hearing 108-786]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-786

 COAST GUARD AND ITS TRANSITION TO THE DEPARTMENT OF HOMELAND SECURITY

=======================================================================

                                HEARING

                               before the

           SUBCOMMITTEE ON OCEANS, FISHERIES, AND COAST GUARD

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 12, 2003

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation


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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas                JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon                 BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois        RON WYDEN, Oregon
JOHN ENSIGN, Nevada                  BARBARA BOXER, California
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
                                     FRANK LAUTENBERG, New Jersey
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Robert W. Chamberlin, Republican Chief Counsel
      Kevin D. Kayes, Democratic Staff Director and Chief Counsel
                Gregg Elias, Democratic General Counsel
                                 ------                                

           SUBCOMMITTEE ON OCEANS, FISHERIES, AND COAST GUARD

                  OLYMPIA J. SNOWE, Maine, Chairwoman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
TRENT LOTT, Mississippi              JOHN F. KERRY, Massachusetts
KAY BAILEY HUTCHISON, Texas          DANIEL K. INOUYE, Hawaii
GORDON SMITH, Oregon                 JOHN B. BREAUX, Louisiana
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 12, 2003................................     1
Statement of Senator Breaux......................................    27
Statement of Senator Hollings....................................     3
    Prepared statement...........................................     3
Statement of Senator Lautenberg..................................    29
    Prepared statement...........................................    29
Statement of Senator Lott........................................    24
Statement of Senator Snowe.......................................     1

                               Witnesses

Collins, Admiral Thomas H., Commandant, U.S. Coast Guard.........     5
    Prepared statement...........................................     6
Hecker, JayEtta Z., Director, Physical Infrastructure, GAO.......     8
    Prepared statement...........................................    11

                                Appendix

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, prepared 
  statement......................................................    39
Response to written questions submitted to Admiral Thomas H. 
  Collins by:
    Hon. Maria Cantwell..........................................    57
    Hon. Ernest F. Hollings......................................    44
    Hon. Kay Bailey Hutchison....................................    43
    Hon. Daniel K. Inouye........................................    53
    Hon. Frank Lautenberg........................................    54
    Hon. Trent Lott..............................................    41
    Hon. Olympia J. Snowe........................................    39
Response to written questions submitted by Hon. Ernest F. 
  Hollings to JayEtta Z. Hecker..................................    58

 
 COAST GUARD AND ITS TRANSITION TO THE DEPARTMENT OF HOMELAND SECURITY

                              ----------                              


                      WEDNESDAY, FEBRUARY 12, 2003

                               U.S. Senate,
            Subcommittee on Oceans, Fisheries, and 
                                       Coast Guard,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:30 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Olympia J. 
Snowe, Chairwoman of the Subcommittee, presiding.

          OPENING STATEMENT OF HON. OLYMPIA J. SNOWE, 
                    U.S. SENATOR FROM MAINE

    Senator Snowe. The hearing will come to order. Before I 
begin, I want to express on behalf of the Committee our 
colleague and the Ranking Member of this Committee, Senator 
Kerry is undergoing surgery today, and we want to wish him a 
very speedy and full recovery. We are certainly looking forward 
to having him come back very soon.
    Admiral Collins and Ms. Hecker, I certainly want to thank 
you for being here today and for testifying at this critical 
hearing on the Coast Guard and its upcoming transition to the 
new Department of Homeland Security. This hearing could not 
come at a more appropriate time. Just last week, the Attorney 
General and Governor Ridge raised the Nation's terrorism threat 
level to orange, the second-highest level of threat, for only 
the second time since September 11, 2001, and the first time 
since the creation of the Homeland Security Department.
    Raising the threat level brings with it a dramatic increase 
in readiness across our Government and across the spectrum in 
terms of homeland security issues. As a member of the Select 
Committee on Intelligence, yesterday I attended an open session 
in which the Director of Central Intelligence, George Tenet, 
and the Director of the FBI, Robert Mueller, testified. 
According to Director Mueller the Al Qaeda threat is the most 
serious and immediate threat facing our country. According to 
Director Tenet, Al Qaeda is actively seeking chemical, 
biological weapons, as well as a radiological dispersion device 
commonly referred to as a dirty bomb.
    These individuals stated that these threats are based on 
specific intelligence and not just idle chatter. Just 
yesterday, a tape attributed to Osama bin Laden revealed he is 
exhorting his followers to rise up and support Saddam Hussein's 
fight against the United States. It is within this context that 
we are holding this Coast Guard hearing today. The Coast Guard 
is the Federal agency responsibility for protecting our ports 
and coastline. The Coast Guard's homeland security mission is 
ever so critical for our Nation's security. Last November, we 
passed the Homeland Security Act of 2002, which transfers the 
Coast Guard to the new Department on March 1, a date that is 
rapidly approaching. The legislation positions the Coast Guard 
as the cornerstone in the homeland defense, while also 
recognizing the multifaceted nature of the service.
    On that note, I want to thank Senator Stevens as well. He 
worked with me closely in ensuring the Coast Guard will remain 
a distinct entity, because they perform so many non-homeland 
security missions. Obviously we wanted to make sure the Coast 
Guard maintains the appropriate mission balance, and how we 
strike that balance will be the focus of a hearing that I will 
be convening next month.
    Today we are here to ascertain how a momentous and historic 
a transition for the Coast Guard will actually work, and to 
assess the challenges inherent in the Coast Guard's evolving 
maritime homeland security strategy. The fact is, the threats 
that we faced on September 11 have only increased in magnitude 
and, given that only 1 or 2 percent of the 6 million shipping 
containers from overseas are inspected each year, and 95 
percent of trade from outside North America comes to us through 
our 361 commercial seaports, can there be any question that 
securing our ports is a national imperative?
    As the most recent Hart-Rudman report stated, if an 
explosive device was loaded in a container and set off in a 
port, it would almost automatically raise concerns about the 
integrity of the 21,000 containers that arrive in U.S. ports 
each day. A 3- to 4-week closure of U.S. ports would bring the 
global container industry to its knees.
    Fortunately, we have made progress since we learned in a 
hearing back in October 2001 that a freighter could arrive at a 
U.S. port unannounced, and one of its containers could then 
travel by rail or truck clear across this country to its 
destination, before it was ever scrutinized. That is the reason 
that I had pressed for the 96-hour pre-arrival message 
requirement that the Coast Guard wisely implemented over the 
past year-and-a-half so we can identify and intercept potential 
threats before they reach the United States.
    The Coast Guard has also created the Sea Marshall program, 
is escorting high-risk ships, and is commissioning numerous 
maritime safety and security teams that will respond to 
maritime threats with a SWAT team capability.
    These are substantial steps in the right direction, but 
obviously, we must do more. I know the Coast Guard is currently 
drafting regulations to implement the Maritime Transportation 
Security Act, which was passed under the leadership, of Senator 
Hollings in the last Congress. It establishes local port 
security committees, mandates that our largest seaports undergo 
comprehensive port vulnerability assessments, requires 
comprehensive port security plans, and mandates additional 
cargo container screening by the Customs Service.
    I hope to hear today how this process is working, and learn 
more about how the port vulnerability assessments are 
progressing. At the same time, we must remember that secure 
ports should be our last line of defense, not our first, and 
that means building layered defense that pushes out our borders 
by pushing our forces out to sea to meet that threat. This will 
require better intelligence, mated with a technologically 
modern and even more capable Coast Guard that can locate and 
intercept potential threats hundreds of miles from our shores. 
That is why I believe that we need to accelerate the Deepwater 
Project and recapitalize the Coast Guard's assets, that in some 
instances date back to World War II.
    We also need improved coordination at the Federal, State, 
and local levels. 3 weeks ago, when we held the confirmation 
hearing for Asa Hutchinson to be the Under Secretary for Border 
and Transportation Security, we spoke at length of how the 
Coast Guard performs many of the functions under his purview, 
including securing our borders, territorial waters, ports, 
territories, waterways, and sea transportation systems, and I 
stressed then what I stress today.
    While the Coast Guard will report directly to the new 
Secretary, it is essential the efforts of the new Director of 
Border and Transportation Security be in accord with the 
strategic plan of the Coast Guard. On that note, I fully expect 
that you and the new Under Secretary, Admiral Collins, will 
work closely to ensure your efforts are synchronized.
    Finally, with the Coast Guard now supporting the Department 
of Defense overseas in its first war-time cutter deployment 
since the Vietnam War, with eight 110-foot Island Class patrol 
boats, including the Wrangell from Portland, Maine, as well as 
four port security units, it is apparent and that we need the 
Coast Guard now more than ever. Can there be any doubt as to 
the service's unique defense capabilities?
    The bottom line is, the multifaceted nature of the Coast 
Guard makes it both a unique and essential tool in providing 
safety and security along our Nation's borders and coastlines, 
and we must all work together to ensure that the Coast Guard 
remains ever ready and prepared to assume the new 
responsibilities that you will be transitioning to on March 1.
    Senator Hollings.

             STATEMENT OF HON. ERNEST F. HOLLINGS, 
                U.S. SENATOR FROM SOUTH CAROLINA

    Senator Hollings. I thank you, Madam Chairman, for holding 
this hearing, and I join with you in our good wishes to Senator 
Kerry with his surgery, and I will ask consent that my 
statement be included for the record.
    Senator Snowe. Without objection, so ordered.
    [The prepared statement of Senator Hollings follows:]

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina

    Good afternoon. I would like to thank Chairman Snowe for calling 
this hearing. Given the importance of the Coast Guard for the security 
of our nation's ports, for the safe enjoyment of our waters by private 
citizens, for fisheries enforcement, and for environmental protection, 
the Coast Guard's missions cannot be disrupted by the move to the new 
Department of Homeland Security. This is especially important in my 
home state, South Carolina, where being on the water is a way of life 
for more than 383,000 recreational boaters.
    The creation of this new department will be the largest 
reorganization of the federal government since 1947, when the War and 
Navy Departments were combined into the Defense Department. Twenty-two 
different federal agencies or programs will be merged together into an 
agency whose prime mission will be to protect the United States from 
terrorist attacks.
    The Coast Guard has unique civilian missions not covered by any 
other federal agency, that span the widest range of issues imaginable. 
It has the primary responsibility of carrying out drug interdiction at 
sea, safeguarding the lives and property of mariners through its search 
and rescue program, enforcing U.S. fisheries laws and deploying and 
maintaining aids to navigation.
    Since the terrible events of September 11, we have demanded 
exponentially more from the Coast Guard for homeland security at sea 
and along our coasts and inland waterways. Last year, Congress passed 
the Maritime Transportation Security Act, which I introduced with 
Senator Bob Graham of Florida, creating the first national system for 
securing U.S. maritime transport systems. The Coast Guard is on the 
front lines, having a leading role in implementing the MTSA.
    It is hard to imagine that moving the Coast Guard into the new 
Department won't take a toll on its ability to fulfill its critically 
important missions. Unlike other reorganizations of federal agencies, 
this one is taking place without all of the internal policies, lines of 
authority and other functions in place. Instead, the plan seems to be 
to move the twenty-two agencies and programs under the umbrella of the 
new Department, and then rationalize and harmonize lines of authority 
and resources over time. The approach is in stark contrast to the 
transfer of the Coast Guard from the Treasury Department to the 
Department of Transportation in 1967, as described in a Washington Post 
article: ``It's transfer from Treasury to Transportation in 1967 was an 
elegantly handled move in which details--down to the telephone books on 
employees' desks--had been worked out before DOT opened for business.'' 
(Washington Post, 2002). It's no wonder that a GAO report issued in 
January 2003 found the overall process of creating the new Department 
to be ``high risk''.
    I am particularly concerned that by moving the Coast Guard to the 
new Department, the Coast Guard's traditional missions will inevitably 
be shifted away from such things as search and rescue of stranded 
mariners. Such a shift could impact not only our citizens but also the 
wide variety of groups who rely on the Coast Guard, including other 
federal agencies such as NOAA, state and local governments and 
industry. We in South Carolina know only too well the tragic and 
needless loss of life that can result from gaps in our Coast Guard 
safety net. The fatal example of the MORNING DEW is something we do not 
ever want to repeat. We will need to keep a close watch on Coast 
Guard's ability to fulfill all of its many mandates.
    We also need to make sure that the Coast Guard gets the resources 
it needs to carry out all of its missions. Even before September 11th, 
the Coast Guard's resources were stretched. While the President's FY 
2004 budget request projects increased spending for all Coast Guard 
missions, it is far from clear how the funds will be allocated in 
reality. And the budget request does not tell the whole story--for 
example, the strain on Coast Guard personnel and resources from the 
recent increases in operating tempo. We need to make sure that the 
Coast Guard is provided with the resources it actually needs to get the 
job done.
    I look forward to hearing the testimony of Admiral Thomas Collins, 
Commandant of the Coast Guard, as to how the Coast Guard will avoid 
such disruptions. I also look forward to the testimony of Ms. JayEtta 
Hecker, Director of the Physical Infrastructure Section of the General 
Accounting Office.

    Senator Snowe. Our first witness here today is Admiral 
Collins, the Commandant of the United States Coast Guard. We 
welcome you, Admiral. We thank you for taking the time to 
testify today, and joining Admiral Collins is Ms. Hecker, who 
is the Director of the GAO Physical Infrastructure Team. I 
thank you as well, Ms. Hecker, for being here today, and I want 
to welcome you. We are looking forward to hearing your 
testimony as well.
    Admiral Collins.

STATEMENT OF ADMIRAL THOMAS H. COLLINS, COMMANDANT, U.S. COAST 
                             GUARD

    Admiral Collins. Thank you, Madam Chairman. It is a real 
pleasure to be with you and Senator Hollings to talk about our 
transition, and I am glad to be with my colleague, Ms. Hecker, 
who has been working the Coast Guard account for a number of 
years.
    I would like to begin my testimony by thanking you, 
thanking this Committee for their support on the Maritime 
Transportation Security Act of 2002 and the accompanying 
authorization bill, the first in 4 years that we have received, 
and along with, also, our budget support that has been 
increasing budget support for the last 2 years, and that the 
Coast Guard is growing in capacity and capability, I think 
which comes as welcome news to anyone with interest in our 
ability to conduct our many missions, and we look forward to 
the 2004 budget, which is part of a multiyear plan--budget 
plan--that emphasizes modernization, building out capabilities 
in homeland security missions, and sustaining the capability 
and capacity across all our missions.
    By the end of fiscal year 2004, we will have grown by 4,100 
people, over 10 percent, and by the end of 2004, our overall 
budget will have increased $1.6 billion, a 30 percent increase 
over 2002. In our operating expense account the growth is even 
bigger. Between 2002 and 2004, we will have grown 40 percent.
    President Bush, Secretary Mineta, and Secretary Ridge have 
been incredibly strong advocates for this growth plan. We are 
going to work very, very hard to keep their support, keep yours 
as well, through measurable performance.
    We are working very hard to make sure this transition goes 
smoothly. We have detailed, mostly on a temporary basis, more 
than two dozen of our finest people to help set up the new 
Department. Dozens more are members of various transition teams 
to ensure our preparations are in close alignment. They are 
busy identifying the full range of transition activities and 
integrating the efforts of Coast Guard headquarters to ensure 
unity of effort.
    Furthermore, I am very pleased that the Homeland Security 
Act of 2002 provides that the Coast Guard will remain a 
military, maritime, and multimission service, and one that will 
retain the full range of our missions in the new Department, 
and I must underscore that all transition planning for the 
Coast Guard has been completely consistent with the terms, 
conditions, and the intent of the act.
    As the lead Federal agency for maritime homeland security, 
the Coast Guard is shouldering a tremendous responsibility for 
enhancing the safety and security of the American public, and I 
want to assure you upfront that we are up to the task. We have 
been at the very center of the effort to devise a Maritime 
Homeland Security Strategy which is carefully integrated with 
the National Strategy for Homeland Security that was 
promulgated last summer, and as well is consistent with the 
national security strategy.
    The Maritime Security Strategy is a document that I am 
holding up, a document that was published this past December, 
and it will be ready for distribution this month, and we would 
be very, very pleased to share the key elements of this 
strategy in a detailed brief with your staff.
    The Maritime Transportation Security Act of 2002, which 
calls for us to implement a comprehensive security regime for 
ports, vessels, and facilities in close alignment with 
international standards, is a critical part of our overall 
strategy. We will have an interim rulemaking done--where is 
some wood? I will knock on wood--by June, and a final rule next 
November.
    I began my remarks to you by speaking about the importance 
of sustaining operational excellence as we make this 
transition. Let me clearly say that when I speak of operational 
excellence, I do so with respect to the full range of our 
missions, which extend well beyond the rigors of homeland 
security to include fisheries enforcement and search and rescue 
and aids to navigation, those issues that are important to the 
safety and quality of life of our citizens. We must be able to 
balance the rigors of homeland security with the demands of 
these other crucial missions. We can and we will.
    We will do it in part by maintaining a flexible 
multimission force structure and through the application of new 
and developing technology, such as that being produced by the 
Integrated Deepwater System and Rescue 21. These systems are 
absolutely crucial, absolutely crucial to us. It is important 
they get funding support so that we can replace our aging fleet 
and recapitalize, and to provide the kind of networkcentric 
capability that will help us mitigate against a very, very 
porous maritime border.
    Finally, let me assure you that our transition to the 
Department of Homeland Security is proceeding as smoothly and 
as quickly as possible. We remain firmly convinced that our 
impending transfer to the new Department is both timely and 
important for maritime security, and although we will be 
leaving the Department of Transportation after 36 years, our 
continued partnership with them on crucial maritime 
transportation safety and mobility issues will endure. We 
appreciate Secretary Mineta's dynamic and caring leadership, 
and that of his team, more than words can convey.
    During the transition, what will remain foremost in my mind 
as Commandant, even as I sit here before this esteemed 
Subcommittee, is the operational excellence of our service to 
America. That excellence depends not only on our place in 
Government, but also in having the right capacity and the right 
capability for the missions at hand. I look forward to working 
with you to that end.
    Thank you very much, and I would be pleased to answer any 
questions that you may have at the appropriate time.
    [The prepared statement of Admiral Collins follows:]

     Prepared Statement of Admiral Thomas H. Collins, Commandant, 
                            U.S. Coast Guard

    Good afternoon, Madam Chairman and distinguished Members of the 
Subcommittee. It is a pleasure to appear before you today to discuss 
the Coast Guard's operations across our full spectrum of missions and 
our smooth transition to the Department of Homeland Security.
    I am pleased to report that we are making excellent progress in 
this transition; and we look forward to becoming an integral member of 
the new Department of Homeland Security.

Coast Guard Role in the Department of Homeland Security
    The Coast Guard is the lead federal agency for Maritime Homeland 
Security and we have a well-defined strategy to protect America's 
waterways and ports. The Coast Guard's multi-mission assets, military 
role as an Armed Force, and maritime presence and authorities bridge 
security, safety, and response capabilities between federal, state, 
local and private organizations, and the other military services. We 
have been the leader in providing for the maritime security needs of 
our nation since 1790 . . . it was the reason we were formed almost 213 
years ago.
    The Coast Guard possesses extensive regulatory and law enforcement 
authorities governing ships, boats, personnel, and associated 
activities in our ports, waterways, and offshore maritime regions. We 
are a military service with around-the-clock command, control, 
communication, and response capability. We maintain, at the ready, a 
network of coastal small boats, aircraft, and deep-water cutters, and 
expert personnel to prevent and respond to safety and security 
incidents. We have geographic presence throughout the navigable waters 
of our country, both in large ports and small harbors, along the 
coasts, on the Great Lakes, and on the inland rivers. The Homeland 
Security Act of 2002 reaffirms the Coast Guard's status as a military 
service and branch of the armed forces of the United States, and it 
preserves the Secretary's role as a military service chief. The Coast 
Guard is now a statutory member of the national foreign intelligence 
community, and brings extensive intelligence gathering and coordination 
to the new department.
    We have established a long history of partnerships with other 
government agencies and the private sector to multiply our 
effectiveness. The Coast Guard remains the recognized leader in the 
world regarding maritime safety, security, mobility, and environmental 
protection issues. These multi-mission, military, and maritime 
attributes form the core of our organization and maximize our ability 
to prevent or respond to incidents.
    It is also important to recognize the threats to the security of 
our homeland extend beyond overt terrorism. Countering illegal drug and 
contraband smuggling, preventing illegal immigration via maritime 
routes, preserving living marine resources from domestic and foreign 
encroachment, preventing environmental damage and responding to spills 
of oil and hazardous substances are all critical elements of national 
and economic security and they are all Coast Guard responsibilities. As 
we transition to the new Department, we will accomplish our safety and 
security missions, both of which must be adequately funded to maintain 
our high standards of operational excellence in meeting America's 
future maritime needs.

Maritime Strategy for Homeland Security
    Our Maritime Strategy balances the Coast Guard's responsibility for 
upholding America's maritime security against terrorist threats while 
preserving our fundamental liberties and economic well-being. It 
defines the Coast Guard's lead role for Maritime Homeland Security, as 
a supporting agency to other designated lead federal agencies for 
specific events, or as a supporting or supported commander for military 
operations. The Coast Guard will pursue five strategic objectives to 
achieve the maritime strategy: prevent terrorist attacks within and 
terrorist exploitation of the U.S. Maritime Domain; reduce America's 
vulnerability to terrorist attacks within the U.S. Maritime Domain; 
protect population centers, critical infrastructure and key assets; 
protect the Marine Transportation System; and minimize damage and 
promote rapid recovery from attacks.
    Integral to the strategic elements of the Maritime Strategy for 
Homeland Security will be fulfilling the increased responsibilities of 
the Maritime Transportation Security Act of 2002 (MTSA). In particular, 
implementing and enforcing a security regime aligned with international 
standards is of paramount importance to port security. The Coast Guard 
is embarked on an accelerated implementation of the elements of MTSA. 
The Coast Guard recently held seven public meetings across the country 
to discuss the envisioned MTSA regulations. We will incorporate public 
feedback and continue to work with affected stakeholders.
    This strategic approach also places a premium on identifying and 
intercepting threats well before they reach U.S. shores by conducting 
layered, multi-agency, maritime security operations and by 
strengthening the port security posture of strategic economic and 
military ports. This is why an organic intelligence and command and 
control capability is so critically important. The Maritime Strategy 
also supports the Coast Guard's multimission responsibilities regarding 
the array of other dangerous threats in the U.S. Maritime Domain--drug 
smuggling, illegal migration, international organized crime, resource 
exploitation, infectious diseases, and environmental degradation.

Preparing for the Future
    With the increases in the President's fiscal year 2004 budget, the 
Coast Guard is well positioned to respond to the Nation's future 
maritime homeland security and safety needs.
    The Integrated Deepwater System project will re-capitalize the 
Coast Guard's aging cutters, aircraft, and offshore Command and Control 
network to help push out the U.S. borders and increase our Maritime 
Domain Awareness (MDA). It is a flexible program, able to meet emerging 
requirements for maritime security.
    Our Rescue 21 project will serve as a maritime 911 system that 
provides both a distress network, and an integrated coastal command and 
control system, which will aid communication among agencies responding 
jointly to emergencies. Further both Deepwater and Rescue 21 will be 
interoperable. We will soon award contracts to replace our small and 
medium response boats. These programs are at the heart of providing a 
ready Coast Guard with the competencies and capabilities to respond to 
both our traditional maritime safety missions and to our recently 
enhanced homeland security missions. Rescue 21 will be complete in FY 
2006.

Managing the Transition
    The Coast Guard maintains a complex web of interdependent and 
mutually beneficial functions with the Department of Transportation and 
its agencies that support national policy objectives. This complex 
relationship, built over the past 35 years, will change, but not end. 
As the Coast Guard moves to the Department of Homeland Security, 
interdependent functions will be sustained and strengthened in DOT, 
eliminated, or transferred to DHS. The Coast Guard has engaged in 
deliberate planning with DOT and others to ensure continuity of 
essential services to the Nation, while improving homeland security 
functions.

Conclusion
    The changes that I have described, although extensive, will not 
change the Coast Guard's essential character as a maritime, multi-
mission, military service. Instead, our role in the Department of 
Homeland Security will ensure the Coast Guard is capable of carrying 
out elements of the President's National Security Strategy and National 
Strategy for Homeland Security, while sustaining non-homeland security 
missions.
    Every single mission of the Coast Guard remains important. With 
your steadfast commitment and support, I am confident the Coast Guard 
will remain Semper Paratus, ``Always Ready.'' Thank you for the 
opportunity to discuss the Coast Guard's homeland security efforts with 
you today. I am pleased to answer any questions you may have.

    Senator Snowe. Thank you, Admiral Collins.
    Ms. Hecker.

      STATEMENT OF JayEtta Z. HECKER, DIRECTOR, PHYSICAL 
                      INFRASTRUCTURE, GAO

    Ms. Hecker. Thank you, Madam Chair.
    Madam Chair and Members of the Subcommittee, I am very 
pleased to be here today to discuss the significant 
implementation challenges that the Coast Guard faces as it 
transitions to the new Department. In my remarks, I will be 
focusing and summarizing my statement on six key areas or 
implementation challenges we have identified, but before I turn 
to those, I would like to just provide two quick points of 
context, both of which are very well-known to you. The first is 
about some overall points about the transition challenge for 
DHS as a whole, and the second is about the mission balancing 
issues under which that the Coast Guard operates under.
    On the first issue of the transition challenge for the 
Department, the GAO has found that, while there is likely to be 
considerable benefit over time from restructuring and 
consolidating homeland security functions, in the short term 
there are numerous complicated and significant challenges that 
need to be resolved, and they will take time and effort. This 
is based on a body of work and a comprehensive review of some 
of the challenges associated with complex mergers, 
acquisitions, and consolidations, both in Government and the 
private sector.
    Due to both the size and complexity of the challenge, as 
well as the dire consequences of a diminution of the 
performance of the Department, GAO has recently designated the 
implementation and transformation issues for the entire 
Department as a high-risk area. Basically, that means we think 
it is very important, we will be focusing on it, and we will be 
providing continuing support and oversight for the Congress. In 
addition, we are trying to articulate what the critical success 
factors are and how to play a constructive role in making 
transition implementation work. It is not a finding about a 
problem, it is a finding of what kinds of things need to be 
done to make it work.
    The second point about which you are all aware is clearly 
the overriding significance of the fundamental tension under 
which the Coast Guard operates in terms of balancing its 
missions. Clearly, on the one hand, the agency has done an 
extraordinary job trying to reinvent itself and assume what is 
a greatly expanded and urgent role in securing the Nation's 
ports and waterways.
    As you Madam Chair, have noted the reports in this area 
have consistently identified the vulnerability of our ports and 
the significant challenges from both the Coast Guard and other 
agencies in trying to make substantial progress in securing 
them.
    So on the one hand, you have this substantial security 
effort with significant growth and new activities that really 
did not exist prior to 9/11. On the other hand, of course, the 
Coast Guard still has to do the job in SAR, in fisheries 
enforcement, in marine environmental protection--areas where 
the workload and the challenge has really not abated and, in 
fact, some areas are emerging that have not been as active in 
the past.
    The one you mentioned, of course, is the military buildup. 
That has not been a mission the Coast Guard has performed since 
the Vietnam War and, in addition, as you may know. Also, I went 
up to District I, and discussed some of the challenges there 
with Coast Guard personnel, and they said it is a record-
breaking year in terms of icebreaking operations that is 
diverting resources as well.
    So there is challenge of balancing this new and urgent 
security mission with the traditional missions that continue to 
demand resources. In fact, you have some surges in these latter 
missions.
    Now, those two points are really contextual for discussing 
the implementation challenge that our work has identified. As I 
said, GAO has done comprehensive work both on Government 
reorganizations and Department alignments, as well as examining 
best practices and experiences of the private sector with 
respect to mergers and consolidations. We have identified a 
number of what we call critical success factors. These are the 
things that are in place when a merger or an integration works 
well.
    The six areas are strategic planning, communication and 
partnership--building, performance management, human capital, 
information management, and technology and acquisition 
management.
    Let me summarize the importance of each of these very 
briefly, and what our existing work says. We have not done new 
work on the challenges and the transformation and transition 
activities within the Coast Guard, but some of our past work 
basically has pointed out the challenges in each of these 
areas.
    The first one is strategic planning. A strategic plan is 
really the cornerstone of any organization being able to 
achieve its mission. It is defining its mission, it is having 
it clearly spelled out in terms of strategies, in terms of 
resource requirements and implementation timetables. But, the 
Coast Guard has not yet completed a strategic homeland security 
deployment plan.
    Now, it is not the same as the strategy that the Commandant 
has outlined, which is an important point. We are thinking 
about more detailed plan that outlines resources and time 
frames, and a strategy for balancing these multiple missions. 
So on strategic planning, the Coast Guard done some good work, 
it has a good record, and it is working on the right things, 
but it is not there yet.
    The second one is, communication and partnership-building. 
Again, a lot of good the Coast Guad has done work in this area, 
but the Coast Guard is going to be moving into a Department, as 
everyone knows, along with 21 other agencies, and while it is 
moving intact, and will report directly to the Secretary, the 
Coast Guard has missions and challenges--and I think, Madam 
Chair, you indicated this--that will require coordination and 
partnership not only with the Border and Transportation 
Security Directorate, but all other directorates and, in fact, 
all other areas of the Department as well.
    So, the Coast Guard will have a challenge to build the kind 
of communication links within the Department and with the 
existing Federal agencies that are still out of the 
Department--like DoD, like Interior and many others. also, the 
Coast Guad must continue the partnerships outside the 
organization with virtually every State and hundreds, if not 
thousands, of local governments and private firms. The 
importance of communication and partnership-building is 
something the Coast Guard has taken seriously, but there are 
new challenges to build effective relationships in the new 
Department and to have existing state and local relationships 
not disrupted by the effort to form Department-wide 
relationships.
    The third area is performance management. Again, this is 
another area that the Coast Guard takes seriously. There is 
leadership already in terms of thinking about performance 
indicators, focusing on more than inputs, and focusing on more 
than outputs. A critical part of this is achieving outcomes. 
One never knows if one is there if one has not defined it, and 
it is also an important part of fostering accountability. 
However, the Coast Guard does not yet have performance measures 
for its homeland security mission. There is a commitment to try 
to get there. There is an agreement that it is important. Such 
measures are not in place yet, so completely these remains a 
fundamental challenge.
    The fourth area is human capital strategy. Again, because 
there are 21 other agencies merging into the department, the 
Coast Guard is going to be challenged to adjust its own culture 
and work effectively within the Department if the Department is 
to be more than just the sum of the folks put in one 
Department. The point is to get some integration, to get some 
synergies. But it will require some adjustments, some 
compromise, and some balancing.
    At the same time, there is the challenge of, having the 
capacity to recruit and train and retain the over 4,000 people 
that the Coast Guard is bringing on to expand and better meet 
the new security mission.
    Information management and technology, fundamental for the 
new Department is the fifth area. The seamless flow of 
information and the effective and strategic use of technology 
is vital to any organization. Integrating the systems of the 22 
agencies will be substantial, but it is a heightened challenge 
because the Coast Guard, and most of the other agencies, are 
bringing with them not just separate systems, but systems that 
have problems, systems that do not work, systems that are not 
really anywhere near their capacity. That exacerbates the 
challenge that confronts both the Coast Guard and the 
Department in developing effective information technology 
systems.
    The last area is acquisition management. It is vital to the 
Department's and the Coast Guard's ability to managing its 
missions. You know about the importance of Deepwater and Rescue 
21. There are real challenges in effectively managing those 
acquisitions. Risks are presented by each of them, and the 
Coast Guard's move to integrate its acquisition policies with 
the Department may complicate some of the challenges, and 
clearly, these acquisitions need to be aligned with the overall 
mission and capital needs of the overall Department.
    In sum, the challenges are very substantial, in fact, 
daunting, but not insurmountable. The Coast Guard has a solid 
record, and a management capability and a flexibility that is 
admirable, but start-up problems are real, and being committed 
to good implementation and attention to transition does not 
resolve the fact that countless acquisition or management 
integration efforts fail, and they fail at the expense in the 
short run of losses of productivity and performance. And it is 
too risky here. That cannot happen, so the lengthy process has 
to be recognized, it has to be carefully managed. and focused 
on desired outcomes. This is absolutely essential.
    I apologize if I have gone over. I wanted to try to give 
you the flavor of this large issue, and we hope we can provide 
whatever support you find necessary.
    [The prepared statement of Ms. Hecker follows:]

          Prepared Statement of JayEtta Z. Hecker, Director, 
                      Physical Infrastructure, GAO
    Madam Chair and Members of the Subcommittee:

    I am pleased to be here today to discuss key implementation 
challenges facing the Coast Guard as it transitions into the newly 
created Department of Homeland Security (DHS). Creating this new 
department means merging disparate organizational structures, cultures, 
and systems into a cohesive working unit. The newly created DHS 
represents one of the largest reorganizations and consolidations of 
government agencies, personnel, programs, and operations in recent 
history. The department and agencies within it must deal with a myriad 
of organizational, human capital, process, technology, and 
environmental challenges that must be addressed and resolved at the 
same time that the new department is working to maintain readiness. For 
these and other reasons, we have designated the implementation and 
transformation of DHS as a high-risk area.\1\
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    \1\ Major Management Challenges and Program Risks: Department of 
Homeland Security (GAO-03-102, January 2003).
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    But the Coast Guard, even as a separate entity, was rapidly 
reinventing itself in many respects in the wake of the terrorist 
attacks of September 11th. After these attacks, the Coast Guard's 
priorities and focus had to shift suddenly and dramatically toward 
protecting the nation's vast and sprawling network of ports and 
waterways. The National Strategy for Homeland Security \2\ recognizes 
the important role the Coast Guard now plays in protecting the nation's 
borders and infrastructure. While homeland security has long been one 
of the Coast Guard's missions, the agency has for decades focused its 
efforts on other major national objectives, such as conducting search 
and rescue operations at sea, preventing and mitigating oil spills and 
other threats to the marine environment, protecting important fishing 
grounds, and stemming the flow of illegal drugs and migrants into the 
United States. September 11th drastically changed the Coast Guard's 
priorities, and it did so by adding to the agency's many 
responsibilities rather than by replacing responsibilities that were 
already in place. For example, the recently enacted Maritime 
Transportation Security Act \3\ made the Coast Guard responsible for 
numerous new port security functions that will likely require sizable 
personnel and hardware commitments.
---------------------------------------------------------------------------
    \2\ National Strategy for Homeland Security, The White House, 
Office of Homeland Security, July 16, 2002.
    \3\ Pub. L. 107-295, Nov. 25, 2002.
---------------------------------------------------------------------------
    My testimony today, which is based on a large body of work we have 
completed in recent years, both on governmental reorganization in 
general and the Coast Guard in particular, focuses on six key factors 
for implementation success: strategic planning, communication and 
partnership-building, performance management, human capital, 
information management and technology, and acquisition management. In 
prior reports and testimony before the Congress, we have identified 
these factors as among those that are critical to success in 
organizational change.\4\ Our recent work in reviewing the Coast Guard 
has focused on challenges the Coast Guard faces in dealing with these 
six success factors.
---------------------------------------------------------------------------
    \4\ Homeland Security: Proposal for Cabinet Agency Has Merit, But 
Implementation Will Be Pivotal to Success (GAO-02-886T, June 25, 2002). 
Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned 
for a Department of Homeland Security and Other Federal Agencies (GAO-
03-293SP, November 14, 2002). GAO has identified several other factors 
as important to success, including organizational alignment, knowledge 
management, financial management, and risk management. However, these 
factors, as they relate to the Coast Guard were not covered in the 
scope of completed GAO work.
---------------------------------------------------------------------------
    In summary, even though the Coast Guard has in many respects done a 
credible job of managing such things as strategic planning, 
partnershipbuilding, and aligning its work force with its missions, it 
now faces major challenges in implementing all six of the 
implementation success factors. Its expanded role in homeland security 
and its relocation in a new agency have changed many of its priorities 
and working parameters, and its adjustment to this new environment 
remains a work in process. Thus, there is much work to be done. Some of 
the work is strategic in nature, such as the need to better define its 
homeland security mission and the level of resources needed to meet not 
only its new security mission responsibilities but its existing 
missions as well. Others include accommodating a sudden surge of 
thousands of personnel that are being added and trying to ensure that 
its most ambitious acquisition project--the Deepwater Project to 
modernize its fleet of cutters and aircraft--is well managed and 
remains on track. Overlying these challenges is a fundamental tension 
that the agency faces in balancing its many missions. On the one hand, 
it must still do the job it has been doing for years in fisheries 
management, search and rescue work, ship inspections, marine 
environmental protection, and other areas. On the other hand, a sizable 
portion of its resources are now deployed in homeland security work. In 
addition, the Coast Guard is contributing to the military buildup in 
the Middle East. Effectively addressing these implementation challenges 
in the context of this overarching tension is a sizeable task.

                               Background

    The Coast Guard has a wide variety of missions, related both to 
homeland security and its other responsibilities. Table 1 shows a 
breakout of these missions--both security and non-security related--as 
delineated under the Homeland Security Act of 2002.\5\
---------------------------------------------------------------------------
    \5\ Pub. L. 107-296, Nov. 25, 2002.

    
    
    The Coast Guard has overall federal responsibility for many aspects 
of port security and is involved in a wide variety of activities. Using 
its cutters, boats, and aircraft, the Coast Guard conducts security 
patrols in and around U.S. harbors, escorts large passenger vessels in 
ports, and provides protection in U.S. waterways for DoD mobilization 
efforts. It also gathers and disseminates intelligence information, 
including gathering information on all large commercial vessels calling 
at U.S. ports; the agency monitors the movement of many of these 
vessels in U.S. territorial waters. It conducts port vulnerability 
assessments; helps state and local port authorities to develop security 
plans for protecting port infrastructure; and actively participates 
with state, local, and federal port stakeholders in a variety of 
efforts to protect port infrastructure and ensure a smooth flow of 
commerce. In international maritime matters, the Coast Guard is also 
active in working through the International Maritime Organization to 
improve maritime security worldwide. It has spearheaded proposals 
before this organization to implement electronic identification 
systems, ship and facility security plans, and the undertaking of port 
security assessments.
    The Coast Guard's homeland security role is still evolving; 
however, its resource commitments to this area are substantial and will 
likely grow. For example, under the recently enacted Maritime 
Transportation Security Act, the Coast Guard will likely perform 
numerous security tasks, such as approving security plans for vessels 
and waterside facilities, serving on area maritime security advisory 
committees, assessing antiterrorism measures at foreign ports, and 
maintaining harbor patrols. The Coast Guard has not yet estimated its 
costs for these activities; however, the President's fiscal year 2004 
budget request includes over $200 million for new homeland security 
initiatives, including new patrol boats, additional port security 
teams, and increased intelligence capabilities.
    To provide for the orderly transition of the Coast Guard to DHS on 
March 1, 2003, the Coast Guard established a transition team last year 
that identified and began addressing issues that needed attention. 
Coast Guard officials told us that they patterned their transition 
process after key practices that we identified as important to 
successful mergers, acquisitions, and transformations.\6\ The agency's 
transition team consists of top management, led by the Chief of Staff, 
and enlists the assistance of numerous staff expertise throughout the 
agency through matrixing. According to Coast Guard officials, the scope 
of transition issues spans a wide variety of topics, including 
administrative and support functions, strategy, outreach and 
communication issues, legal considerations, and information management. 
The transition team focuses on both DHS related issues and on issues 
related to maintaining an enduring relationship with the Department of 
Transportation (DOT). In addition to its own transition team, senior 
Coast Guard officials participated with OMB in developing the DHS 
reorganization plan late last year.\7\ Also, key Coast Guard officials 
participate on joint DHS and DOT transition teams that have been 
established to deal with transition issues in each department.
---------------------------------------------------------------------------
    \6\ Highlights of a GAO Forum: Mergers and Transformation: Lessons 
Learned for a Department of Homeland Security and Other Federal 
Agencies (GAO-03-293SP, November 14, 2002).
    \7\ Department of Homeland Security Reorganization Plan, November 
25, 2002. This plan, required by the Homeland Security Act of 2002, 
addresses (1) the transfer of agencies, personnel, assets, and 
obligations to DHS, and (2) any consolidation, reorganization, or 
streamlining of agencies transferred to DHS.
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The Coast Guard Faces Numerous Complex Implementation Challenges as It 
                          Transitions into DHS

    We have testified that, despite the complexity and enormity of the 
implementation and transformation of DHS, there is likely to be 
considerable benefit over time from restructuring homeland security 
functions.\8\ These benefits include reducing risk and improving the 
economy, efficiency, and effectiveness of these consolidated agencies 
and programs. In the short term, however, there are numerous 
complicated challenges that will need to be resolved, making 
implementation a process that will take considerable time and effort. 
Reorganizations frequently encounter start-up problems and 
unanticipated consequences, and it is not uncommon for management 
challenges to remain for some time. Our past work on government 
restructuring and reorganization has identified a number of factors 
that are critical to success in these efforts. Coast Guard officials 
now involved in transition efforts told us that they are aware of these 
factors and are addressing many of them as they prepare to move to DHS. 
Our testimony today focuses on six of these factors--strategic 
planning, communication and partnership-building, performance 
management, human capital strategy, information management and 
technology, and acquisition management--and, based on past work, some 
of the key challenges the Coast Guard faces in addressing and resolving 
them.
---------------------------------------------------------------------------
    \8\ Homeland Security: Proposal for Cabinet Agency Has Merit, But 
Implementation Will Be Pivotal to Success (GAO-02-886T, June 25, 2002).
---------------------------------------------------------------------------
Strategic Planning
    The strategic planning process involves assessing internal and 
external environments, working with stakeholders, aligning activities, 
processes, and resources in support of mission-related outcomes. 
Strategic planning is important within the Coast Guard, which now faces 
a challenge in merging past planning efforts with the new realities of 
homeland security. The events of September 11th produced a dramatic 
shift in resources used for certain missions. Cutters and patrol boats 
that were normally used offshore were quickly shifted to coastal and 
harbor security patrols. While some resources have been returned to 
their more traditional activities, others have not. For example, Coast 
Guard patrol boats in the nation's Northeast were still conducting 
security patrols many months later, reducing the number of fisheries 
patrols by 40-50 percent from previous years. Even now, the Coast Guard 
continues to face new security-related demands on its resources. Most 
notably, as part of the current military build-up in the Middle East, 
the Coast Guard has sent nine cutters to assist the DoD in the event of 
war with Iraq.\9\
---------------------------------------------------------------------------
    \9\ The Coast Guard is sending one 378-foot high endurance cutter 
and eight 110-foot patrol boats to the Middle East in support of DoD's 
Enduring Freedom, the Global War on Terrorism.
---------------------------------------------------------------------------
    While its greatly expanded homeland security role has already been 
merged into its day-to-day operations, the Coast Guard faces the need 
to develop a strategic plan that reflects this new reality over the 
long term. Where homeland security once played a relatively small part 
in the Coast Guard's missions, a new plan must now delineate the goals, 
objectives, strategies, resource requirements, and implementation 
timetables for achieving this vastly expanded role while still 
balancing resources among its various other missions. The agency is now 
developing a strategic deployment plan for its homeland security 
mission and plans to finish it sometime this year. However, development 
has not begun on a long-term strategy that outlines how it sees its 
resources--cutters, boats, aircraft, and personnel--being distributed 
across all of its various missions, as well as a timeframe for 
achieving desired balance among missions. We recommended in a recent 
report to this Subcommittee that the Coast Guard develop such a 
strategy to provide a focal point for all planning efforts and serve as 
a basis for spending and other decisions.\10\ The Coast Guard has taken 
this recommendation under advisement but has not yet acted on it.
---------------------------------------------------------------------------
    \10\ Coast Guard: Strategy Needed for Setting and Monitoring Levels 
of Effort for All Missions (GAO-03-155, November 12, 2002).
---------------------------------------------------------------------------
Communication and Partnership-Building
    There is a growing realization that any meaningful results that 
agencies hope to achieve are likely to be accomplished through matrixed 
relationships or networks of governmental and nongovernmental 
organizations working together. These relationships exist on at least 
three levels. First, they exist within and support the various internal 
units of an agency. Second, they include the relationships among the 
components of a parent department, such as DHS. Third, they are also 
developed externally, to include relationships with other federal, 
state, and local agencies, as well as private entities and domestic and 
international organizations. Our work has shown that agencies encounter 
a range of barriers when they attempt coordination across 
organizational boundaries.\11\ Such barriers include agencies' concerns 
about protecting jurisdictions over missions and control of resources, 
differences in procedures, processes, data systems that lack 
interoperability, and organizational cultures that may make agencies 
reluctant to share sensitive information.
---------------------------------------------------------------------------
    \11\ Managing for Results: Barriers to Interagency Coordination, 
(GAO/GGD-00-106, March 9, 2000).
---------------------------------------------------------------------------
    Specifically, our work has shown that the Coast Guard faces 
formidable challenges with respect to establishing effective 
communication links and building partnerships both within DHS and with 
external organizations. While most of the 22 agencies moving to DHS 
will report to under secretaries for the department's various 
directorates,\12\ the Coast Guard will remain a separate entity 
reporting directly to the Secretary of DHS. According to Coast Guard 
officials, the Coast Guard has important functions that will require 
coordination and communication with all of these directorates, 
particularly the Border and Transportation Security Directorate. For 
example, the Coast Guard plays a vital role with Customs, Immigration 
and Naturalization Service, the Transportation Security Administration, 
and other agencies that are organized in the Directorate of Border and 
Transportation Security. Because the Coast Guard's homeland security 
activities require interface with these and a diverse set of other 
agencies organized within several DHS directorates, communication, 
coordination, and collaboration with these agencies is paramount to 
achieve department-wide results.
---------------------------------------------------------------------------
    \12\ Most agencies within DHS are organized within one of the four 
directorates: Science and Technology, Information Analysis and 
Infrastructure Protection, Border and Transportation Security, and 
Emergency Preparedness and Response.
---------------------------------------------------------------------------
    Effective communication and coordination with agencies outside the 
department is also critical to achieving the homeland security 
objectives, and the Coast Guard must maintain numerous relationships 
with other public and private sector organizations outside DHS. For 
example, according to Coast Guard officials, the Coast Guard will 
remain an important participant in DOT's strategic planning process, 
since the Coast Guard is a key agency in helping to maintain the 
maritime transportation system. Also, the Coast Guard maintains 
navigation systems used by DOT agencies such as the Federal Aviation 
Administration. In the homeland security area, coordination efforts 
will extend well beyond our borders to include international agencies 
of various kinds. For example, the Coast Guard, through its former 
parent agency, DOT, has been spearheading U.S. involvement in the 
International Maritime Organization. This is the organization that, 
following the September 11th attacks, began determining new 
international regulations needed to enhance ship and port security. 
Also, our work assessing efforts to enhance our nation's port security 
has underscored the formidable challenges that exist in forging 
partnerships and coordination among the myriad of public and private 
sector and international stakeholders.\13\
---------------------------------------------------------------------------
    \13\ Container Security: Current Efforts to Detect Nuclear 
Materials, New Initiatives, and Challenges (GAO-03-297T, November 18, 
2002). Port Security: Nation Faces Formidable Challenges in Making New 
Initiatives Successful (GAO-02-993T, August 5, 2002).
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Performance Management
    A performance management system that promotes the alignment of 
institutional, unit, and individual accountability to achieve results 
is an essential component for organizational success. Our work has 
shown performance management is a key component of success for 
highperforming, results-oriented organizations. High-performing 
organizations have recognized that a key element of a fully successful 
performance management system is aligning individual employees' 
performance expectations with agency goals so that employees can see 
how their responsibilities contribute to organizational goals. These 
organizations (1) define clear missions and desired outcomes, (2) 
measure performance as a way of gauging progress toward these outcomes, 
and (3) use performance information as a basis for decision-making.\14\ 
In stressing these actions, a good performance management system 
fosters accountability.
---------------------------------------------------------------------------
    \14\ Executive Guide: Effectively Implementing the Government 
Performance and Results Act (GAO/GGD-96-118, June 1, 1996).
---------------------------------------------------------------------------
    The changed landscape of national security work presents a 
challenge for the Coast Guard's own performance management system. The 
Coast Guard has applied the principles of performance management for 
most of its missions, but not yet for homeland security. However, the 
Coast Guard has work under way to define its homeland security mission 
and the desired outcomes stemming from that mission. The Coast Guard 
expects to have such measures this year and begin collecting data to 
gauge progress in achieving them. Progress in this area will be key in 
the Coast Guard's ability to make sound decisions regarding its 
strategy for accomplishing its security mission as well as its various 
other missions.

Human Capital Strategy
    In any organization, people are its most important asset. One of 
the major challenges agencies face is creating a common organizational 
culture to support a unified mission, common set of core values, and 
organizationwide strategic goals. The Coast Guard, like the 21 other 
agencies moving to DHS, will have to adjust its own culture to work 
effectively within the department. The Coast Guard also faces other 
important new human capital challenges. For example, to deal with its 
expanded homeland security role and meet all of its other 
responsibilities, the Coast Guard expects to add thousands of new 
positions over the next 3 years. The Coast Guard acknowledges that such 
a large increase could well strain the agency's ability to hire, 
develop, and retain talent. Coast Guard officials acknowledge that 
providing timely training for the 2,200 new personnel it plans to bring 
on by the end of fiscal year 2003 and the additional 1,976 staff it 
plans to add by the end of fiscal year 2004 will likely strain its 
training capabilities. Compounding this challenge is that over the next 
decade, the Coast Guard is modernizing its entire fleet of cutters and 
aircraft with more modern, high technology assets that require a higher 
skill level to operate and maintain.

Information Management and Technology
    One factor that often contributes to an organization's 
ineffectiveness or failure is the lack of accurate, complete, and 
timely information. Sometimes this lack of information contributes to 
the failure of a system or to cumbersome systems that cannot be 
effectively coordinated. In other instances, however, it can relate to 
the institutional willingness to share information across 
organizational boundaries. Concerns about information management have 
been well chronicled in the discussions about establishing DHS. 
Programs and agencies will be brought together from throughout the 
government, each bringing its own systems. Integrating these diverse 
systems will be a substantial undertaking.
    The Coast Guard is among several agencies moving to DHS that will 
bring with it existing information technology problems. For example, 14 
years after legislation was passed requiring the Coast Guard to develop 
a vessel identification system to share vessel information, no such 
system exists, and future plans for developing the system are 
uncertain.\15\ Given today's heightened state of homeland security, 
such a system has even more potential usefulness. Coast Guard officials 
stated that law enforcement officials could use a vessel identification 
system to review all vessels that have been lost or stolen and verify 
ownership and law enforcement history.
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    \15\ Coast Guard: Vessel Identification System Development Needs to 
Be Reassessed. (GAO-02-477, May 24, 2002).
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Acquisition Management
    Sound acquisition management is central to accomplishing the 
department's mission. DHS is expected to spend billions annually to 
acquire a broad range of products, technologies, and services. Getting 
the most from this investment will depend on how well DHS manages its 
acquisition activities. Our reports have shown that some of the 
government's largest procurement operations need improvement.
    The Coast Guard has major acquisitions that pose significant 
challenges. The agency is involved in two of the most costly 
procurement programs in its history--the $17 billion Integrated 
Deepwater Project to modernize its entire fleet of cutters and 
aircraft, and the $500 million national response and distress system, 
called Rescue 21, to increase mariner safety. We have been reviewing 
the planning effort for the Deepwater Project for a number of years, 
and the agency's management during the planning phase was among the 
best of the federal agencies we have evaluated, providing a solid 
foundation for the project. While we believe the Coast Guard is in a 
good position to manage this acquisition effectively, the current phase 
of the project represents considerably tougher management challenges. 
The major challenges are:

    Controlling costs. Under the project's contracting 
        approach, the responsibility for the project's success lies 
        with a single systems integrator and its contractors for a 
        period of 20 years or more. This approach starts the Coast 
        Guard on a course potentially expensive to alter once funding 
        has been committed and contracts have been signed. Moreover, 
        this approach has never been used on a procurement of this size 
        or complexity, and, as a result, there are no models in the 
        Federal Government to guide the Coast Guard in developing its 
        acquisition strategy. In response to the concerns we and others 
        have raised about this approach, the Coast Guard developed 
        cost-related processes and policies, including establishing 
        prices for deliverables, negotiating change order terms, and 
        developing incentives.

    Stable sustained funding. The project's unique contracting 
        approach is based on having a steady, predictable funding 
        stream of $500 million in 1998 dollars ($544.4 million in 2003 
        dollars) over the next 2 to 3 decades. Significant reductions 
        in levels from planned amounts could result in reduced 
        operations, increased costs, and/or schedule delays, according 
        to the Coast Guard. Already the funding stream is not 
        materializing as the Coast Guard planned. The 2002 fiscal year 
        appropriation for the project was about $18 million below the 
        planned level. The fiscal year 2003 transportation 
        appropriations have not yet been signed into law; however, the 
        Senate appropriations committee has proposed $480 million for 
        the Deepwater Project, and the House appropriations committee 
        proposed $500 million.

    Contractor oversight. Because the contracting approach is 
        unique and untried, the challenges in managing and overseeing 
        the project will become more difficult. To address these 
        challenges, the Coast Guard's plans require the systems 
        integrator to implement many management processes and 
        procedures according to best practices. While these practices 
        are not yet fully in place, in May 2002, the Coast Guard 
        released its Phase 2 Program Management Plan, which establishes 
        processes to successfully manage, administer, monitor, 
        evaluate, and report contract performance.

    Unproven technology. Our reviews of other acquisitions have 
        shown that reliance on unproven technology is a frequent 
        contributor to escalated costs, schedule and delays, and 
        compromised performance standards. While the Coast Guard has 
        successfully identified technologies that are sufficiently 
        mature, commercially available, and proven in similar 
        applications for use in the first 7 years of the project, it 
        has no structured process to assess and monitor the potential 
        risk of technologies proposed for use in later years. 
        Specifically, the Coast Guard has lacked uniform and systematic 
        criteria, which is currently available, to judge the level of a 
        technology's readiness, maturity, and risk. However, in 
        response to our 2001 recommendation, the Coast Guard is 
        incorporating a technology readiness assessment in the 
        project's risk management process. Technology readiness level 
        assessments are to be performed for technologies identified in 
        the design and proposal preparation and procurement stages of 
        the project.

    For these and other reasons, our most recent series of Performance 
and Accountability Reports continues to list the Deepwater Project as a 
project meriting close management attention.\16\ We will continue to 
assess the department's actions in these areas.
---------------------------------------------------------------------------
    \16\ Major Management Challenges and Program Risks: Department of 
Transportation (GAO-03-108; January 30, 2003).
---------------------------------------------------------------------------
    The Coast Guard's move to DHS may complicate these challenges 
further. For example, central to the acquisition strategy for the 
Deepwater Project is a clear definition of goals, needs, and 
performance capabilities, so that a contractor can design a system and 
a series of acquisitions that can be carried out over 2 to 3 decades, 
while meeting the Coast Guard's needs throughout this time. These 
system goals and needs were all developed prior to September 11th. 
Whether the Coast Guard's evolving homeland security mission will 
affect these requirements remains to be seen. Properly aligning this 
program within the overall capital needs of DHS is critical to ensuring 
the success of the Deepwater Project. Also, the Homeland Security Act 
of 2002 requires the Secretary of DHS to submit a report to the 
Congress on the feasibility of accelerating the rate of procurement of 
the Deepwater Project. If the project is accelerated, even greater care 
would need to be exercised in managing a project that already carries 
numerous risks.
    In conclusion, these challenges are daunting but not 
insurmountable. The Coast Guard continues to do an admirable job of 
adapting to its new homeland security role through the hard work and 
dedication of its people, and it has the management capability to 
address the implementation issues discussed here as well. However, 
reorganizations frequently encounter startup problems and unanticipated 
consequences, and even in the best of circumstances, implementation is 
a lengthy process that requires a keen focus, the application of sound 
management principles, and continuous reexamination of challenges and 
issues associated with achieving desired outcomes. As the Coast Guard 
addresses these and other challenges in the future, we will continue to 
monitor its efforts as part of our ongoing work on homeland security 
issues, and we will be prepared to report to you on this work as you 
deem appropriate.
    Madame Chair, this concludes my testimony today. I would be pleased 
to respond to any questions that you or Members of the Subcommittee may 
have at this time.

Contacts and Acknowledgements
    For information about this testimony, please contact JayEtta Z. 
Hecker, Director, Physical Infrastructure, at (202) 512-2834, or 
[email protected]. Individuals making key contributions to this testimony 
include Christopher Jones, Sharon Silas, Stan Stenersen, and Randall 
Williamson.

                          Related GAO Products

    Major Management Challenges and Program Risks: Department of 
Transportation. GAO-03-108. Washington, DC: January 30, 2003.
    Major Management Challenges and Program Risks: Department of 
Homeland Security. GAO-03-102. Washington, DC: January 30, 2003.
    Homeland Security: Management Challenges Facing Federal Leadership. 
GAO-03-260. Washington, DC: December 20, 2002.
    Container Security: Current Efforts to Detect Nuclear Materials, 
New Initiatives, and Challenges. GAO-03-297T. New York, NY: November 
18, 2002.
    Highlights of a GAO Forum: Mergers and Transformation: Lessons 
Learned for a Department of Homeland Security and Other Federal 
Agencies. GAO-03-293SP. Washington, DC: November 14, 2002.
    Coast Guard: Strategy Needed for Setting and Monitoring Levels of 
Effort for All Missions. GAO-03-155. Washington, DC: November 12, 2002.
    National Preparedness: Technology and Information Sharing 
Challenges. GAO-02-1048R. Washington, DC: August 30, 2002.
    Homeland Security: Effective Intergovernmental Coordination Is Key 
to Success. GAO-02-1011T. Washington, DC: August 20, 2002.
    Port Security: Nation Faces Formidable Challenges in Making New 
Initiatives Successful. GAO-02-993T. Washington, DC: August 5, 2002.
    Homeland Security: Critical Design and Implementation Issues. GAO-
02-957T. Washington, DC: July 17, 2002.
    Managing for Results: Using Strategic Human Capital Management to 
Drive Transformational Change. GAO-02-940T. Washington, DC: July 15, 
2002.
    Homeland Security: Title III of the Homeland Security Act of 2002. 
GAO-02-927T. Washington, DC: July 9, 2002.
    Homeland Security: Intergovernmental Coordination and Partnerships 
Will Be Critical to Success. GAO-02-899T. Washington, DC: July 1, 2002.
    Homeland Security: New Department Could Improve Coordination but 
May Complicate Priority Setting. GAO-02-893T. Washington, DC: June 28, 
2002.
    Homeland Security: Proposal for Cabinet Agency Has Merit, But 
Implementation Will Be Pivotal to Success. GAO-02-886T. Washington, DC: 
June 25, 2002.
    Homeland Security: Key Elements to Unify Efforts Are Underway but 
Uncertainty Remains. GAO-02-610. Washington, DC: June 7, 2002.
    National Preparedness: Integrating New and Existing Technology and 
Information Sharing into an Effective Homeland Security Strategy. GAO-
02-811T. Washington, DC: June 7, 2002.
    Coast Guard: Vessel Identification System Development Needs to Be 
Reassessed. GAO-02-477. Washington, DC: May 24, 2002.
    National Preparedness: Integration of Federal, State, Local, and 
Private Sector Efforts Is Critical to an Effective National Strategy 
for Homeland Security. GAO-02-621T. Washington, DC: April 11, 2002.
    Coast Guard: Budget and Management Challenges for 2003 and Beyond. 
GAO-02-538T. Washington, DC: March 19, 2002.
    Homeland Security: Progress Made, More Direction and Partnership 
Sought. GAO-02-490T. Washington, DC: March 12, 2002.
    Homeland Security: Challenges and Strategies in Addressing Short-
and Long-Term National Needs. GAO-02-160T. Washington, DC: November 7, 
2001.
    Coast Guard: Actions Needed to Mitigate Deepwater Project Risks. 
GAO-01-659T. Washington, DC: May 3, 2001.
    Coast Guard: Progress Being Made on Deepwater Project, but Risks 
Remain. GAO-01-564. Washington, DC: May 2, 2001.
    Managing for Results: Barriers to Interagency Coordination. GAO/
GGD-00-106. Washington, DC: March 9, 2000.
    Executive Guide: Effectively Implementing the Government 
Performance and Results Act. GAO/GGD-96-118. Washington, DC: June 1, 
1996. (544065)

    Senator Snowe. I appreciate your comments, Ms. Hecker. No 
question, this is an ambitious endeavor, and I think all the 
more important to get off on the right track in terms of 
establishing a certain culture and institutionalizing a process 
with respect to the Coast Guard being integrated in our overall 
Homeland Security Department.
    Admiral Collins, let me begin by asking, what percentage of 
your operation is now devoted to homeland security? I know 
prior to September 11 that you had maybe 1 to 2 percent of your 
overall operations were associated with homeland-type security 
responsibilities, monitoring the coastline. Then obviously in 
the aftermath of the devastating events on September 11, it 
went upwards of 56 percent, then it declined to 25 percent. 
Where are you currently with respect to overall percentage as a 
part of your operation assigned to homeland security 
responsibilities?
    Admiral Collins. Clearly, there are a number of ways to 
look at this. You can look at it in terms of percent budget, 
you can look at it in terms of employment hours, where do you 
employ--what percentage of your aircraft, cutter, and boats are 
allocated to certain missions. If you look at--and I think it 
is incorporated in the 2004 budget that the Department of 
Homeland Security has submitted--it breaks out homeland 
security missions and non-homeland security missions in a 
little bit of a profile, and the non-homeland security missions 
are a little over 50 percent, and the homeland security 
missions are a little under 50 percent as a percent of the 
budget.
    And of course, what is important is, well, what do you 
include in those definitions and, of course, what is included 
is the definitions as reflected in the act which, as you 
recall, and I know you do, is the delineation between homeland 
security and non-homeland security.
    In terms of employment hours--and let me refer to a little 
chart I have in front of me. In terms of employment hours, by 
the end of--and employment hours means, again, how we use and 
plan to deploy our ships, our boats, and our aircraft. They are 
within--in terms of our enforce of laws and treaties mission, 
which includes counterdrugs, migrant interdiction, fisheries 
enforcement and the like, we will be within 7 percent of pre-9/
11 levels. By the end of 2004 budget, we will be within 5 
percent in terms of that particular mission area.
    The ports, waterways, coastal security component will take 
up roughly about 25 percent of our overall budget, and then if 
you add on migrant interdiction on top of that, and counterdrug 
activities on top of that, it gets you up into the 40 percent. 
By my definition, homeland security includes migrant 
interdiction and drugs, so it is about in the forties, mid-
forties when you add up all of that.
    And again, in terms of the employment hours, I think we are 
going in the right direction in terms of rebalancing those 
employment hours, so we are getting the right kind of 
distribution between the mission areas.
    Senator Snowe. What about port security? As you know, port 
vulnerability assessments are being conducted on the top 50 
over the next 5 years. I frankly think the pace of those 
assessments should be accelerated.
    Now we are operating under terrorist warning level code 
orange, the second-highest alert, it obviously raises questions 
about the level of security at ports when we are talking about 
95,000 miles of coastline. Based on the testimony provided by 
Director Tenet yesterday. Al Qaeda is a potent threat to the 
United States. As they indicated in their testimony, and other 
reports have indicated in the press, Al Qaeda may be closer to 
acquiring a dirty bomb and attempting to purchase chemical and 
biological weapons.
    What is our capacity to detect these types of threats at 
the ports, given the millions of containers that traverse the 
ocean to get to the United States every year? We are talking 
millions of containers, 11 million containers 10 times a year. 
What is our ability to detect these before they reach our 
shores?
    Admiral Collins. Well, clearly, the maritime environment 
remains a vulnerable one, and those combinations, I think, 
should cause us all a sense of urgency about moving ahead on 
many fronts on this issue.
    The port security assessment issue is proceeding. We have 
done 15 of 55 ports that we intend to do. We have learned a few 
things from that initial work. And again, I will be glad to--a 
lot of it is classified in terms of the specific findings. I 
would be glad to brief your staff in a classified way on those. 
There are certain things that we have learned, and we have 
folded those into ongoing dialogues within each captain of the 
port.
    In addition, each captain of the port has already conducted 
risk-based decision assessments within each--in advance of 
these formalized assessments, and they are already rolling 
those into discussion with the Port Security Committee, so the 
dialogue is going, and it is moving, so that assessment part, 
can it go faster, yes. I think it is going in the right 
direction.
    The other part, increased presence, is with the build-up of 
the United States Coast Guard between 2002, 2002 supp, 2003 and 
2004, we will have an increased presence in our waterways. That 
is good news. I can go into the details of that build-up.
    With the new security regime we are putting in place, the 
new rulemaking, that tightens up the planning end of the 
business in terms of having--based upon assessments, based upon 
risks and vulnerabilities, making prudent intervention 
strategies, developing the necessary plans and, of course, as 
you know, the act puts the Captain of the Port square in the 
middle of that in coordinating with local stakeholders to make 
a common sense, practical approach to that, and it will be 
reflected in our rulemaking, but it is rolling on while the 
rulemaking is going on.
    The container issue is another sliver of this whole port 
security problem and, as you know, the Customs Service has the 
lead on the container end of the security initiative. The 
container security is a primary imperative of the national 
Homeland Security Strategy that was promulgated last summer, 
and in that strategy, it said there were four basic criteria, 
four basic parts of the initiative, establish a criteria to 
identify high-risk containers, prescreen those containers, use 
technology to inspect high-risk containers, and develop smart 
and secure containers. That is all part of the grand, grand 
design.
    Customs has a number of initiatives that Customs has 
launched. We are an active participant. There is a container 
working group--a Federal container working group that we are a 
part of, Customs chairs, and part of their strategy they are 
rolling out they call the Container Security Initiative, which 
is establishing bilateral agreements with the megaports around 
the world. They have got 20 megaports in their sights for these 
bilateral agreements. They have negotiated with, it may be as 
high as--I know it is 16. It may have, over the last couple of 
weeks it may be 18 of the 20, already negotiated, all over the 
world, Singapore, Hong Kong, Halifax, Le Havre, Rotterdam and 
the like.
    What this does is allow Customs to go overseas and 
prescreen--work with and prescreen containers, part of the 
strategy. It is all about pushing the borders out so that you 
know what is coming at you, so that is a very, very important 
initiative.
    A second initiative is a trade partnership against 
terrorism with other Customs agencies, trade agencies and so 
forth, and I think they have over 50 partners signed up for 
that initiative.
    A third effort is a recent requirement that containers that 
if are inbound to the United States are in a foreign port, 24 
hours before they are loaded in a foreign port, the electronic 
manifest has to come into Customs before they can be loaded on 
the inbound ship to the United States, so that puts the onus--
again pushing the borders out, getting increased visibility and 
screening. It helps you winnow down what containers, how many 
containers you really have to look at.
    All of those things are tremendously positive progress, and 
it is going very, very quickly, and I can assure you it is one 
of Secretary Ridge's highest priorities, along with the 
information flow and analysis, and understanding the coming and 
going of people.
    So it is all about having visibility of platform, people, 
and cargo, and pushing your borders out with respect to those 
things, and all those agencies have a role to play in it, 
including the United States Coast Guard.
    Senator Snowe. Thank you. Senator Hollings.
    Senator Hollings. Thank you, Madam Chairman.
    I am glad, Admiral Collins, you are outlining the 
tremendous progress that has been made. The fact is that a lot 
of it has been made under the leadership of our distinguished 
colleague, Senator Breaux, who held field hearings all around 
with the Collector of the Customs, or whatever title he may 
have, Mr. Bonner, and Admiral Loy over the past year-and-a-half 
now.
    Ms. Hecker, you gave a very, very comprehensive rundown, 
and I guess that is the role of GAO, of acquisitions policy, 
strategic plans, performance measures, and everything else like 
that. Knowing what you know, what can this Committee do to help 
Admiral Collins?
    Ms. Hecker. Well, I think hearings like this are certainly 
appropriate--being interested in the progress, understanding 
the nature of the plan. I think the areas that we identified 
are ones that we do believe are critical, so I think following 
up is appreciate--looking for that kind of detail in a 
strategic deployment plan, looking for the detail begun to be 
illuminated today in terms of measures, what this new normalcy 
really means, and not just target numbers, but actual numbers, 
because the actuals vary.
    For example, this year, with the icebreaking in the 
Northeast, or with the Middle East deployment, all of those 
actual performance measures will change, from those original 
targets, so continuing to be interested in these issues is 
needed. They make a huge difference in the fundamental 
performance of an organization, so oversight and then support 
for what it takes to respond is really the key.
    Senator Hollings. Well, Admiral Collins, when we go in, and 
I would not be surprised, after the Friday report, if they went 
in on Saturday, this country has got to be prepared. We could 
easily go into Iraq by this time next week, and you have moved 
eight of the patrol boats to the gulf, and now I am thinking 
about the ports here. I mean, we used to say in the war about 
the MLR, the main line of resistance, the main line of 
resistance is not just the gulf and Iraq, it is Philadelphia.
    If I am Osama bin Laden, and I know I have got 10 ships 
that I own and another 10 that I control, and I know I have got 
crews for those ships, I do not even have to use one of my 
ships. I can get an Exxon tanker, and I can get my crews 
onboard. They got five-man crews on different planes to run 
into the World Trade and the Pentagon. So they can take over 
any one of those tankers, come right up the Delaware River, and 
blow it there at the tank farm at Philadelphia and close down 
the whole Eastern Seaboard for a year. That could happen, and 
you will not have the time to do all of these performance 
standards and measurements and acquisitions policies and all of 
those other things.
    Are you prepared for that, moving all your patrol boats 
out? Have you got all the ports protected?
    Admiral Collins. I think we have substantial presence in 
our ports. We have a process in place to identify risks and 
move to those risks. We have, as Senator Snowe mentioned, 96-
hour notice of arrival, where we vet cargo vessels and people 
through national data bases, and we react to those either 
unilaterally or in tandem with fellow law enforcement agencies.
    Senator Hollings. So you have got enough personnel and 
ships out there? Moving those eight patrol boats does not----
    Admiral Collins. It does not. I think that is a very 
reasonable approach to bringing our core competencies in 
partnership with the Navy. Maybe a little bit of background. I 
have worked very, very closely with the CNO----
    Senator Hollings. Right.
    Admiral Collins.--to partner with him on a two-way street 
where Navy assets flow to the Coast Guard, Coast Guard assets 
flow to the Navy where it makes sense, where we bring certain 
core competencies to bear in the national interest.
    Senator Hollings. Right.
    Admiral Collins. Let us avoid duplication. Let us put our 
collective competencies together and have a great partnership 
and a great team. That is what is happening with the deployment 
of those eight boats and with those PSU's----
    Senator Hollings. So you did not need those eight boats to 
protect our ports?
    Admiral Collins. Well, certainly they would have been fully 
employed in the United States, but there is also the need to 
put the best foot forward over there, and then over here, as 
mentioned, this two-way street, the United States Navy has 
given us tactical control of 11, that is three more than eight, 
11 PC-170s that we are currently employing in our ports and 
coastal waterways to give us homeland security. That is a 
pretty good deal.
    And in addition, they provide for HUMINT teams, human 
intelligence teams in our ports. They have supported us with 
explosive ordnance details. They provide gray hulls for our 
counterdrug efforts in the Caribbean, which I call homeland 
security. In fact, 74 percent of the seizures last year, 
cocaine seizures, and there was 72 tons of it, 74 percent of it 
was off gray hulls.
    Senator Hollings. I understand. Let us get back to Osama. 
If that port blows, the Captain of the Port, some 21-year-old 
little lieutenant is going to be in charge of the security, and 
he does not have all of those liaisons that you are talking 
about, and all of these other fancy things. I mean, is he 
alerted? Is he helped? Does he have enough help? That is my 
question. That is all I want to know.
    Admiral Collins. He will have--they tend to be Commanders 
and Captains, Senator, but----
    Senator Hollings. Well, move one to Charleston, will you?
    [Laughter.]
    Admiral Collins. Yes, sir. You have a Commander down there, 
sir.
    Senator Hollings. Yes.
    Admiral Collins. I think you have some great folks in 
Charleston.
    Senator Hollings. You have. Promote them.
    [Laughter.]
    Admiral Collins. Yes, sir. But they have at their disposal 
boats--patrol boats, many endurance cutters, Navy gray hulls, 
explosive ordnance details and other tools to deal with threat. 
When orange went up last Friday, we moved--in certain ports did 
certain things, moved certain assets, and we will continue to 
do that.
    I think we have shown since 9/11, and frankly I would say 
since 1790, I think we are an adaptable, flexible organization 
that has multimission platforms, multimission people who are 
capable----
    Senator Hollings. You are good at testifying. Let me ask a 
question. Who do you report to? Do you report to Secretary 
Mineta, or Governor Ridge, or Asa Hutchinson? I saw where Asa 
had some kind of responsibility about maritime issues. I am 
confused. Who do you report to?
    Admiral Collins. Well, until 1 March, Senator, I report to 
Secretary Mineta.
    Senator Hollings. And then on 1 March what happens?
    Admiral Collins. On 1 March I report to Secretary Ridge.
    Senator Hollings. And what is Asa Hutchinson? Does he have 
any responsibility over your Coast Guard or over maritime 
issues?
    Admiral Collins. Asa, of course, is the Under Secretary for 
Border and Transportation Security. Customs, INS, 
Transportation Security Administration, Border Patrol and 
others are in there. I am to report directly to the Secretary, 
organizationally on a par with the other Under Secretaries. 
That is the relationship.
    Senator Hollings. Thank you, Madam Chair.
    Senator Snowe. Thank you. Senator Lott.

                 STATEMENT OF HON. TRENT LOTT, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Lott. Well, thank you, Madam Chairman, for having 
this hearing. It has been very interesting.
    Thank you, Admiral Collins, for what you do with the Coast 
Guard, and Ms. Hecker, thank you very much for being here.
    I was interested in Senator Hollings' last question. 
Senator Hollings knows exactly who you report to because he and 
Ted Stevens made sure that you report directly to the 
Secretary, rather than going through two or three layers, and 
so it is just like he planned it. I remember that discussion. 
It was one of the things that delayed homeland security, but 
you got it done, and I think it will work out fine.
    Senator Hollings. I know it. I wanted to make sure he knows 
it.
    [Laughter.]
    Senator Lott. Yes, you wanted to make sure he knew it. 
Okay, well, he reads the law.
    [Laughter.]
    Senator Lott. Two or three questions. One, I was going to 
ask a question about what was your level of deployment. I think 
that Senator Hollings has already addressed that. Did he say an 
eighth of your capability, or eight?
    Admiral Collins. We have eight patrol boats, 110-foot 
patrol boats, we have four port security units, two high-
endurance cutters and a buoy tender.
    Senator Lott. And they will be involved in securing ports 
where there is American naval activity?
    Admiral Collins. They will be over there securing EUCOM and 
CENTCOM in the standard areas of competency that we bring, 
marine intercept operations, boarding, escorts, port security. 
Those are the areas that we bring our competency in. Those are 
the areas we will----
    Senator Lott. But in that connection, and I am sorry 
Senator Hollings will not hear what I am going to ask you, 
because I think it refers to one of the questions he was 
pursuing you on, and that is, in my home town, Pascagoula, you 
have a Coast Guard cutter and three frigates and two cruisers 
at the naval station there. They are involved in the drug 
interdiction program in the Gulf. When that cutter is at sea it 
is actually under a unified command, correct?
    Admiral Collins. We are under a joint interagency task 
force East and West, Key West and Alameda that have tactical 
control of the counterdrug efforts in the Caribbean, if it is 
the counterdrug mission you are talking about, that is.
    Senator Lott. But those gray hulls, as you call them, can 
be involved in other surveillance and can kind of pick up some 
of the slack if you have that need in the Gulf, for instance, 
and I presume similar things occur on the East Coast and West 
Coast, too.
    Admiral Collins. As we said, we have tactical control of 11 
PC-170's, patrol boats, Navy manned, Navy funded, Navy 
maintained, Coast Guard boarding crews on board augmenting our 
Captain of the Ports in places like Charleston and other 
places, so it is a quid pro quo with the Navy in sharing assets 
to do the Nation's bidding.
    Senator Lott. Now, as you go into the Department of 
Homeland Security, one of the things that we are seeking is 
better communication and coordination between various agencies 
and entities that have quite often been competing, duplicating 
or not working with each other.
    I remember also in my home town one time we were having a 
ship loaded with drugs coming in, and it was a pretty good 
tussle between Coast Guard, Customs, DEA, State officials and 
local officials as to who was the lead dog. I was afraid we 
were going to blow the whole thing, because I was even aware of 
it, and you know, when a Senator is aware of something like 
that, that can really get out in the media and cause a problem.
    Are you working to do a better job of not trying to worry 
about who is getting credit, but some procedure to have 
somebody in charge of an operation where you have got three or 
four entities that are actually working on it?
    Admiral Collins. Yes, Senator. I think we have extensive 
relationships with most of the agencies coming in, and that 
relationship is getting better, and when we are all together 
under one roof, I think it will be even better.
    We are coordinating with Customs. Over the last 6 months to 
a year, I cannot tell you how many joint boardings--
cooperative, productive joint boardings we have done with INS, 
Customs, and FBI, responding to stowaway situations coming into 
the gulf and a whole host of--very, very productive 
coordination, and I just see that getting better and better.
    We are working very closely with Asa Hutchinson and his 
staff. We are in four work groups that he has got going within 
the Border Transportation Security Under Secretariat. We have 
Coast Guard members on those. We are building coordinating 
mechanisms. I think it is going to be a terrific arrangement.
    Senator Lott. All right. We are counting on that. The best 
news for the Coast Guard in a long time is Integrated Deepwater 
System program. Finally, we are going to modernize, upgrade the 
quality of your ships and aircraft and other surveillance 
capability. That was supposed to be a 20-year program at $500 
million a year for a total of $10 billion, but it looks to me 
like in only a year-and-a-half, you are already slipping behind 
that.
    I think the plan was, the Coast Guard was saying it might 
take as much as $600 million a year to keep up with inflation, 
and so forth. The target I think had been $500 million in FY98 
dollars, and in fact in the first year it looks like it is 
going to be $480 million in FY03 dollars. I am worried about 
that, because having a lot of experience with Navy contracts, I 
know what happens when you lose $20 million here and $40 
million there, and it slips and slips and slips, and a 20-year 
program becomes a 30-year program. You do not get the 
capability you need, and it just generally messes up plans.
    So I will just end with this question, then. What impact 
will the fiscal year 2003 appropriations shortfall have, and 
how is that going to affect your outyear capability if we do 
not keep up with how this is planned and budgeted?
    Admiral Collins. I will try to keep this short and 
uncomplex in answering the Senator, but the project started out 
with a notional level of funding, and we put boundary 
conditions around the three consortia that were bidding on this 
design, and we said, figure on $500 million capital funding a 
year in 1998 dollars, and figure $1 billion a year in operating 
costs, and deliver us a system within those boundary conditions 
with the highest level of performance. That was the metrics, so 
there was sort of a gist of planning factors to give them a 
level playing field to design and give us competitive proposals 
so we were comparing apples and apples.
    The contract structure and the acquisition strategy is 
flexible enough to absorb ups and downs of funding. We are not 
naive to think we are going to get exactly everything as 
initially in this notional plan. Yes, we have had a little bit 
less. In 2003, we asked for 500. What came back out of both 
marks was 480, I think, although the omnibus may be tinkering 
with that. I do not know the latest number.
    Senator Lott. Are you suggesting Ted Stevens might still 
tinker with that number a little bit?
    [Laughter.]
    Admiral Collins. No, sir. There are thoughtful 
considerations of the pros and cons at hand, sir, but I do not 
know the exact number, but it is going to be somewhere 
between--480 was the last formal number. We will have to make 
adjustments in the task numbers over time, as we have 
perturbations in funding, and the structure of the contract, 
the structure of the acquisition strategy and the contract 
vehicle allows for that to happen.
    Would we like a steady flow? Yes. Are we happy with $500 
million support in 2004 by the administration? Absolutely. That 
is a lot of money by Coast Guard standards. We are thrilled to 
have $500 million in 2004. We can make major progress with the 
national security cutter, which is the biggest ship, and major 
progress with vertical takeoff UAV, which in my mind is one of 
those real primo high return on investment components in the 
system, and that is where we are going to put our money, and if 
we have to jiggle around other things and push them, we will do 
that.
    Senator Lott. Thank you.
    Admiral Collins. Thank you, Senator.
    Senator Snowe. Thank you, Senator Lott. Senator Breaux.

               STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    Senator Breaux. Thank you, Madam Chair, and thank you, Ms. 
Hecker and Admiral Collins, welcome back to the Committee, and 
congratulations for all the good work that you all and your 
team are doing in this transition to the new agency.
    Let me ask a question that sort of is a pick-up from where 
I think Senator Hollings had left off with regard to the 
conflicts that may exist within this homeland security 
structural chart that we have. It seems to me that under the 
law establishing the Department of Homeland Security, it really 
provided that the Border and Transportation Security 
Directorate would be responsible for, among other things, 
number 2, securing the borders and territorial waters, ports, 
terminals, waterways, and air, land, and sea transportation 
systems of the United States.
    Now, your testimony is that the Coast Guard is in charge of 
maritime homeland security. It seems like the law setting it up 
talked about the Border, Transportation Security Directorate 
legally having the authority to do things on the oceans and 
territorial waters and waters of the United States. How has 
that been resolved, because I think it obviously should be in 
the Coast Guard. That is your expertise and your history, not 
the Border Patrol.
    Admiral Collins. I think there is a little bit of a shared 
responsibility, although in terms of driving the train, the 
engineer on the main engine, I think, is the United States 
Coast Guard when it comes to port, vessel, and facility 
security and coastal waterway security. I think the Maritime 
Transportation Security Act of 2002 goes a long way to 
codifying that when it designates the Coast Guard Captains of 
the Ports as the Federal Maritime Security Coordinator in the 
ports to head up the port security committees, to oversee all 
the planning, and all that. I think that is a very, very 
powerful signal about the coordinating oversight of this.
    In terms of trying to ensure we have good coordination and 
understand the division of labor between the respective 
organizations, I think we have made great progress on that. I 
have a great respect for Admiral Loy as my previous boss, and 
friend. We have a tremendous rapport. We have met numerous 
times to go through, understand the division of labor between 
the Transportation Security Administration----
    Senator Breaux. Is there anything you would like to have 
differently under the current set-up as to what the 
responsibilities are that is seemingly in place now?
    Admiral Collins. I think the Maritime Transportation 
Security Act of 2002 is a pretty specific document in terms of 
assigning responsibilities.
    Senator Breaux. I am just concerned that when it is in 
conflict with the legislation establishing the Department of 
Homeland Security, how do we resolve it, and I am wondering if 
there are any potential problems out there. I think it is 
pretty clear what Congress is talking about. I have a great 
deal of respect for the Border Patrol, but I mean, their 
expertise is not in the waterways of the United States and 
dealing with ships. That is your expertise, and so you are 
telling the committee that there are not any problems, or 
potential problems?
    Admiral Collins. I think we have got it in the right 
quadrant. I think there is some fine-tuning that can be done, 
most of which can be done between the agencies involved, and 
there is great collaboration, by the way, between Customs, 
Coast Guard, and TSA, particularly on this issue. I think the 
maritime--excuse me, the homeland security strategy that was 
promulgated last fall clearly identified the Coast Guard key 
role in the maritime component of homeland security.
    Admiral Loy clearly understands our pivotal and central 
role in maritime security strategy, the Department's liaison in 
coordination with IMO, et cetera, et cetera, so I think that 
there are enough boundary conditions where the individual 
agencies can deal with this in a collaborative way. Both 
Admiral Jim Loy and myself, again, have talked, and we expect 
to develop a memorandum of understanding between our two 
organizations that defines the divisions.
    Senator Breaux. I think it would be helpful for us to have 
a look at that memorandum when it is completed, because I think 
you have some very strong feelings in the Congress about who 
should be doing the waterways and the sea lanes and the ports 
and the sea terminals around the country.
    I mean, there is a role for Border Patrol. I am not trying 
to say it is all-or-nothing, but it is clear that this 
Committee, I think, and the Congress in general has pretty 
strong feelings about who should be in charge of the waterways 
and things that are wet in terms of security, and it is the 
Coast Guard, so we would like to see that memorandum of 
understanding.
    I was pleased that you had commented to Senator Lott about 
when he brought up the Deepwater Project. Is it, in your 
opinion, on schedule? Is it moving in the direction that we 
want it to move in, and if there are any problems, what are 
they?
    Admiral Collins. As Commandant of the United States Coast 
Guard, I would like to have all those things tomorrow. There is 
an incredible capability that this project will bring, just the 
kind of capability we need to have more positive control of our 
maritime borders.
    Having said that, I think we are going in the right 
direction. I appreciate the support of both the President and 
Secretary Ridge, Secretary Mineta, and OMB in supporting the 
2004 level as they have. I think we will make great progress 
with the national security cutter, great progress with the 
UAV's. I was just down in Lockport. We just delivered 110-foot 
patrol boat, the Matagorda, that was built in Lockport and is 
going back to be extended from 110 feet to 113 feet with stern 
launch and a whole bunch of----
    Senator Breaux. 123 feet.
    Admiral Collins. 123--excuse me, 123 feet, right.
    [Laughter.]
    Admiral Collins. Excuse me. But it was a great event, and 
really the first production start of Deepwater.
    Senator Breaux. It is really very important. I was in New 
Orleans on the 270-foot medium endurance cutter with Commander 
Mike Parks, who is in charge of it. He loves the ship and would 
die if he knew I was saying this, but that is an old boat. I 
mean, that thing really looks like it should be in a Third 
World country doing patrol work. That is not the type of ships 
we need in the United States Coast Guard.
    I mean, that thing was short-changed because of budget 
cuts. It was supposed to be, I think, 300-foot, and they ran 
out of money so they chopped the bow off of it. I mean 
literally. I mean, that thing, it does not look like it is 
seaworthy to me, and they are very proud of it. The men and 
women on that cutter are as proud as they can be and serving 
wonderfully, but that is not what we need in the United States 
Coast Guard in the year 2003, so this new Deepwater is very, 
very important to replace those type of ships in the Coast 
Guard.
    Thank you very much.
    Senator Snowe. Thank you. Senator Lautenberg.

              STATEMENT OF HON. FRANK LAUTENBERG, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Lautenberg. Thank you, Madam Chairman, and this is 
a first for me in my newly graduated to freshman status. It 
took me 18 years to get to be a freshman.
    [The prepared statement of Senator Lautenberg follows:]

             Prepared Statement of Hon. Frank Lautenberg, 
                      U.S. Senator from New Jersey

    Madam Chair, I thank you for giving me the opportunity to make a 
statement before the Subcommittee on this important topic.
    Let me also welcome the witnesses. Admiral Collins faces a large 
challenge in integrating the Coast Guard into the Homeland Security 
Department. We wish him well in this critical endeavor, and will 
provide whatever help he needs.
    The GAO's insights into this complicated process as always are 
welcome and I look forward to hearing the comments of Ms. Hecker.
    Of our many concerns about this transition, one is that we do not 
rob Peter to pay Paul. The homeland security missions of the Coast 
Guard have increased dramatically. But all of the Coast Guard's 
traditional important missions remain.
    Prior to 9/11, according to the Congressional Research Service, the 
Coast Guard already had been under-funded in relation to its expanding 
responsibilities. Although the Coast Guard is smaller than it was 
several years ago, over the last 25 years there has been a substantial 
growth in mission areas such as counter-drug operations, alien 
interception,pollution prevention, and fisheries enforcement.
    We also should not forget the Coast Guard's significant Department 
of Defense missions.
    Eight Coast Guard ships, including two from New Jersey, the 
Bainbridge Island and Adak, have been sent overseas. This is the first 
deployment of Coast Guard cutters in support of a wartime contingency 
since the Vietnam War.
    ``Coasties'' are working hard and making sacrifices for this 
country both near and far from our shores.
    As important as homeland security is, it should not come at the 
expense of security and safety of our waters, the security and safety 
of our mariners, and the security and preservation of our marine 
environment.
    For these reasons it is important that Congress do everything 
possible to help this transition to take place as smoothly as possible.
    If the Administration does not provide the resources to guarantee 
the balance is met between the ``old'' and ``new'' missions of the 
Coast Guard, Congress must step in to make sure the dollars are there 
to secure our shores and seas in every needed way.
    Madam Chairman, I have another concern relating to the reported 
reduction of Coast Guard non-homeland security missions in the 
Northeast. A recent GAO report found that boats used for fisheries 
patrols in the Northeast were reassigned to security patrols. As a 
result, fisheries patrols were 40-50 percent lower than in previous 
years.
    A November 2002 Coast Guard communication directed the Coast Guard 
groups in the Atlantic Area to cut back on non-homeland security 
missions in order ``to further compensate for the increased demands of 
the Coast Guard's Maritime Homeland Safety Mission.''
    These are worrisome developments.
    I would be interested to know more details about reductions in non-
homeland security missions in the Northeast and how we can work to 
restore the needed level of fisheries and other patrols.
    Admiral, I want to wish you the best of luck, and I offer my pledge 
to work with you to meet these challenges that we all face together.
    Thank you, Madam Chair.

    Admiral, you know I am a long-time friend of the Coast 
Guard because I think the Coast Guard serves us so well, and I, 
from my earliest days here, noted that the Coast Guard got more 
assignments. I did not know where the next one was going to 
come from, but they always found more assignments to give the 
Coast Guard, often accompanied by less money. It was quite an 
act that you folks developed, that is doing more with less, but 
I think finally the realization has come that we cannot afford 
that kind of negative luxury--that we cannot do more with less. 
If we are going to do more, we have to give more, and I am 
concerned about several things.
    I could not help but notice that around this table, Madam 
Chairman, that as we talk to the Coast Guard, that there are 
four States that do a lot of boat-building, so Admiral, just 
remember, I am a friend of the Coast Guard.
    [Laughter.]
    Senator Lautenberg. Anyway, the assignment now of giving 
aid to the military sector of the Coast Guard's 
responsibilities, Senator Hollings asked about that, whether 
there was any diminution of capability as a result of putting 
the eight boats in the gulf, and I wondered what branch of the 
nonsecurity assignment that you have do you think runs the risk 
of not getting the level of attention that you or we would like 
to see, because again, I do not think you can constantly do 
more with less.
    By the time you get the retrofitting of the ships that you 
need and so forth, it is going to be a long time out, but when 
you go through the assignments, whether it is the vessel 
inspections, or pollution control, or migration problems, there 
is always the emergency response function that the Coast Guard 
does so well and so importantly. Where do you think you might 
be taxed if we give the kind of service that you are going to 
be obliged to give to homeland security as well as the military 
component?
    Admiral Collins. Well, of course, everything being equal, 
the wild card is what happens here at home, what kind of 
incidents you have in our ports and waterways. That is really a 
wild card.
    In terms of the planned resources, the planned resources in 
2003 and 2004 are fairly close on all the non-homeland security 
areas. They are fairly close, like enforcement of laws and 
treaties mission area, within 5 percent of pre-9/11 areas. That 
is because of the capacity and capability build-up that we 
appreciated through the 2002 supplemental and 2003 and 2004 
budget, and in terms of the eight patrol boats going over, we 
can make up those with increased OPTEMPO.
    We have 115 patrol boats in the United States, 4,900 10-
foot boats. The rest are coastal patrol boats, 87-foot. We can 
increase the OPTEMPO by 20 percent or so, that means the number 
of deployed hours on the remaining boats, and we could make up 
for the eight boats that left, plus we have, of course, as I 
mentioned, 11 Navy vessels that are employed in our service, so 
on net, I think we can mitigate the impact, and the deployment 
overseas represents about 2.6 percent of our force structure, 
so a relatively small part of our force structure.
    If we have an incident here at home, obviously, or several 
incidents, those are the wild cards, and that will put 
incredible pressure on many of our law enforcement missions if, 
in fact, we had a couple of incidents. Clearly, as we did in 9/
11, we surged back into the ports and coastal areas with our 
ships out of the deep Caribbean and other law enforcement 
missions to provide that momentary several months, about 4 or 5 
months' worth of high OPTEMPO port security mission, and then 
we have tapered off, and I would expect the same kind of thing 
would happen.
    So yes, we have a 2003 and 2004 program that gets us back 
to normal almost, just about back to normal on our missions. 
The wild card is additional home security, and we will surge to 
that, as we should.
    One thing that we will not back off on is our search and 
rescue posture around the country. You know, as you know better 
than anyone, we have certain search and rescue standards, 
readiness standards for our helicopters, boats, and our 
stations around the country to provide search and rescue 
response. We are not walking away from that one iota, and that 
will be maintained.
    Senator Lautenberg. So you do have to prioritize those 
functions that you go to first, the things like fishery 
inspections, to make sure that the rules are maintained. While 
it looks relatively unimportant among those things that we just 
detailed, search and rescue and so forth, they have long-range 
impact if we do not pay attention to those fishing 
requirements, or strictures.
    The next thing that was discussed briefly here is, where do 
you report, how do you report, and the question is whether or 
not the homeland security sector is going to be part of the 
review, Madam Chairman, of the budgetary requirements. Where 
does the Coast Guard go?
    I do not know, Ms. Hecker, whether you want to answer that. 
Where do they go to seek the funding that they need, and seek 
rules changes that they need? Does it continue to go to 
Commerce, or does it go directly to Homeland Security?
    Admiral Collins. There is some lack of clarity on some of 
that for me, as both the House and the Senate work through 
those issues I think, and my understanding is on the House 
side, there have been some adjustments in the Appropriations 
Subcommittee staff in terms of allocating the oversight of 
Homeland Security, and there is a Select Committee on Homeland 
Security that will oversee the elements of the reorg bill, but 
the original committees of jurisdiction, i.e., for us, the 
Transportation Infrastructure Committee in the House will still 
have policy programmatic oversight of the Coast Guard, but it 
will be----
    Senator Lautenberg. You are going to have to sort it out as 
time goes by as I see it.
    Admiral Collins. We are going to have to sort that out.
    Senator Lautenberg. Well, thank you very much, Admiral, and 
good luck to you and your corps. They do excellent work. We are 
proud of you, and we want you to continue. We want to make sure 
you have the tools to do the job.
    Admiral Collins. Thank you, and we will worry about even 
fish. I was mentioning to Senator Snowe in the Portland Press 
Herald on Monday, we made the front page about working with the 
shrimping industry in Maine about protecting the shrimp opening 
in Maine, and we are going to be there and continue doing that.
    Senator Lautenberg. In Maine they do not call them shrimp, 
they call them lobsters.
    [Laughter.]
    Senator Snowe. Well, that is why the Coast Guard is a 
multifaceted agency.
    In response to what Senator Lautenberg raised. As I 
understand, the Senate, is going to maintain the normal 
jurisdiction, as in the past, between the Appropriations and 
Authorizing Committees for your budget, and for your 
authorization.
    I would like to follow up on some of the other issues that 
I raised earlier and that had been also expressed by Senator 
Hollings and Senator Lott and others here regarding port 
security. Back in September, the Coast Guard found radioactive 
readings on a vessel that was in the Harbor of New York. The 
vessel was moved out of port until the source of the 
radioactivity could be located. I gather it was related to some 
ceramic tile.
    It was important to discover the radioactive reading, but 
the point is, the vessel was already in the port when it was 
discovered, which could have been too late. Can you explain to 
us the procedures and how we can avoid that kind of occurrence 
in the future, particularly with this high level of risk?
    Second, as you know, on February 7, the same day that the 
Attorney General and Governor Ridge elevated the alert to Code 
Orange, there was a group of four armed Cuban Border Guard 
defectors that sailed out of Cuba and entered Key West, walked 
two blocks into Key West until they were discovered by 
policemen because they were dressed in camouflage. A week 
earlier with fishermen that were able, again to be able to come 
into Florida undetected.
    It makes it all the more alarming because, these are 30-
foot boats, high-speed, that can blend in with the local 
traffic, and again it exposes a vulnerability in our port 
security system. Could you address that, because I think that 
given these incursions we have to understand what the 
vulnerabilities are, and how the Coast Guard is addressing 
these particular issues and vulnerabilities. Obviously, some 
ports are more vulnerable than others, but what steps is the 
Coast Guard taking to better screen the traffic on our coasts?
    Admiral Collins. In terms of--well, let me take the first 
one. The vessel coming in with ceramics that were giving off--
we did not know what we had, but were giving off something, and 
detected in our ports, we did an off-shore boarding on that. 
That was a 96 notice of arrival. We were looking for--we had 
some intel on a certain classification of ships. We did some 
screening and sorting. That was one of the things that popped 
up; we wanted to take a look at. We did an off-shore boarding.
    We looked at the vessel. We checked out the documentation, 
we checked out the people on board. It is tough to get into 
containers at sea. You make sure everything else is in check, 
then we cleared it for the port. The boarding crew thought they 
heard voices coming from some of the container areas, and they 
thought, well, maybe we have some stowaways, a stowaway issue, 
so they did not clear the vessel to be unloaded, but directed 
it to the dock to do a more comprehensive boarding on the 
containers.
    There just happened to be some Department of Energy folks 
on with some sophisticated gear in the Port of New York at that 
time. They said, why don't you come and do the boarding with 
us, and it was an opportunity to practice cooperation, 
collaboration and those kinds of things.
    In the course of that dockside boarding, that is when they 
detected some emissions, and they could not ascertain exactly 
what it was, and there was an element of uncertainty. There is 
a lot of art as much as science to this in terms of reading 
radiation, and so as a matter of prudence and risk-mitigation 
we directed that vessel off shore, and then went through 
additional readings and finally ascertained--now, what the 
story is, the story is off-shore boarding is good, screening is 
good.
    I would submit that we have got to put mechanisms in place 
where you understand as much about people, cargo, vessel, as 
far away from your borders as possible. That is why the 
Container Security Initiative by Customs is very, very 
important. That is why foreign port assessment that we are 
going to do is very, very important. That is why the supply 
chain management that the trade agreement, the Association 
Against Terrorism is looking at. It is looking at the entire 
supply chain, so you have visibility when the goods are loaded 
into the container, the container is properly sealed, it is 
electronically tracked throughout its transit.
    That is when we will have all the pieces in place. It is 
all about visibility; visibility to the cargo people and 
vessels, and we are building that competency over time. I think 
it is going in the right direction. I think Customs has made 
incredible progress with the container security issue.
    In terms of the boats, I have a picture, if I could just 
pass it around. That is a picture of the boat that came ashore. 
That is about a 30-foot boat. There is not a lot of markings on 
it. It was in the middle of the night, coming across from Cuba, 
across the Straits, no lights. We received that--middle of the 
night we received--we have fairly good communications with the 
Cuban Border Guard, have had for a number of years. A lot of 
the migrants and the drugs we interdict in the Florida Strait 
are based on cued information coming from the Cuban Border 
Guards to us that we act on.
    This case they reported, hey, there is a go-fast, we think 
southbound. They did not identify it, and we have not been able 
to correlate it, whether that telex that we got was for this 
boat. We launched a Falcon jet out of Miami and a patrol boat, 
and we scoured the area. We did not see it. We did not find it, 
and it came ashore. Those kind of targets are incredibly 
difficult. The State of Florida, we have over 1,500 miles in 
that arc of coastal area, and we do not have a--you know, it is 
not like they are getting through a picket line or something 
like that, or that we have sophisticated sensors.
    The fact of the matter is that we have a very porous 
maritime border, and we do not have the technology and the 
sensor systems to help us. The technology can be a big help 
here. That is why things like Deepwater are so terribly 
important. If you put a Deepwater package--when we ultimately 
get a Deepwater package, with the cutter, the helicopter, the 
UAV, and the Global Hawk, you have the eyes, the ears, and the 
sensor capability to detect these kinds of things.
    We do not have--as I mentioned in my oral statement there 
is a capacity and capability issue for us, and for us to do our 
missions, that is what we have got to solve.
    Senator Snowe. Well, that is what concerns me, because the 
Deepwater Project will take 20 years at the minimum. If it 
continues to be consistently underfunded every fiscal year, 
then we are talking about 30 years. I included an amendment in 
the homeland security legislation to have an evaluation of 
accelerating that program to 10 years. Obviously, you are going 
to need to increase the funding in order to accomplish that. 
But it does concern me to have these gaping holes along our 
coastline in America. That really does mean that we have a 
vulnerability that we have not adequately addressed.
    You are right, I can see the difficulties inherent in this 
kind of detection, but it is one that we have to do everything 
that we can to identify and prevent against. What can we do 
more immediately?
    One of the issues is going to be accelerating the Deepwater 
program for the whole recapitalization of new ships so you get 
all the technology and equipment along with it. But the 
question is, what can we do more immediately to detain the kind 
of technology that will assist you in this deterrence?
    Admiral Collins. Of course, intelligence, sensors, 
communication, networkcentric platforms are all part of that. 
That is all part of the buildout strategy that we have.
    The good news is that we catch about 4,000 of those people 
crossing the Florida Straits up from the Windward Pass every 
year, and even in 2001, when we had to relocate a lot of our 
assets into the ports, we still were up around 3,950 in terms 
of migrants interdicted, and in 2002, it was a little over 
4,100, and that compares favorably with, in 2000 there was 
about 4,000, so in terms of, we are, in fact, interdicting a 
lot of migrants. Just in the last 2 days, we have interdicted 
160, and we are interdicting a couple of hundred a week, so, in 
fact, we have presence. We are putting metal on target. We are 
interdicting.
    Unfortunately, we do not have a zero-defect system in force 
laydown, and we do not have positively controlled and sealed 
maritime borders and, quite frankly, it would be very, very 
expensive to get that across the Nation, so it is quite a 
dilemma on how you prioritize where you focus, understand the 
threat factors, and try to put the resources there to make a 
difference.
    Senator Snowe. I appreciate the exceptional job the Coast 
Guard is doing without question. I have always said that we 
always asking you to do more with less, and so we want to 
assist you in every way possible. I guess it really does mean 
identifying the key priorities and determining what we can do 
now, because there is a sense of urgency in addressing this new 
normalcy.
    Constant vigilance is going to be the norm, and so I think 
we will have to help in every way possible to identify those 
vulnerabilities and determining what we can do in the more 
immediate future to redress those gaps in the system. I 
certainly understand the burdens that you are facing and the 
multifaceted nature of your responsibilities.
    Senator Lautenberg.
    Senator Lautenberg. You provoked a thought in my head. I 
spent some time out on the water before I was in the United 
States Senate. I did call upon the Coast Guard to give me a 
hand in when the halyard and the sail was torn and the engine 
stopped, and now I would not dare--I would never let it be said 
that a United States Senator got preference being pulled out of 
the ocean just because he was who he was, and not because he 
was a bad sailor, but I wonder, is there such a thing as the 
equivalent of a transponder--you know what transponders are--
that could be required for American waters? They are not 
expensive, and I do not know what the difficulty is of emitting 
a signal from the water surface.
    Admiral Collins. There is a part of the Maritime 
Transportation Security Act of 2002, and part of--I headed up 
an international delegation to IMO last December. One hundred 
eight nations agreed on an international protocol for SOLIS 
amendments and for an ISPSC, an International Ship to Port 
Security Code to support various initiatives that dovetailed 
with our domestic legislation.
    It is an unprecedented accomplishment, I think, in my mind, 
but part of those adjustments under the SOLIS amendments out of 
IMO was the acceleration of AIS, automatic identification 
system, which is a transponder system required for commercial 
vessels entering on international voyages. That was accelerated 
over 4 years, and to go into effect December 2004, to require 
all commercial vessels to carry these identification systems, 
gives the positioning information and other key information, 
and that we will automatically poll, and that will drive into a 
Rescue 21 system and drive into our VTS systems.
    So I think that is a real step forward, and our intention 
is to have additional carriage requirements beyond the 500 
gross tons for the international, but require it for smaller 
vessels as well in our domestic, so we are working on that 
right now. There is a rulemaking underway on that.
    Senator Lautenberg. Those are not high-cost items, either, 
and I wrote legislation to put them into airplanes, to insist 
that every airplane that flies in crowded air space has a 
transponder, and the pilots got mad at me, but I think it 
helped safety overall.
    Admiral Collins. Yes, sir. Technology can be a tremendous 
help here in gaining greater awareness of the maritime 
environment, absolutely.
    Senator Lautenberg. Absolutely.
    Senator Snowe. Yes, that is why in the legislation last 
year, there was an attempt to include, I think it was Senator 
Feinstein and Senator Kyl's legislation, which I had supported 
regarding radioactive pagers. On the borders, the Inspectors 
would be able to detect radiation when they are reviewing cargo 
and so on. It is another technology that would be useful in the 
process.
    Admiral Collins. Madam Chairman, we are working with other 
agencies to see what kind of equipment enhancement for our off-
shore boarding teams, so when our off-shore boarding teams, 
they vet the vessels, that is the one to go look at before it 
comes in. They go out, they go out fully packed, they go out 
with the right gear on that can winnow down threats, so we are 
working on that to have better equipment there, and we are also 
working to have canine teams.
    Now, we are going to put dogs at sea. We have an initial 
pilot program with the University of Auburn. At Auburn 
University, they have a little canine school down there, and we 
have got a bunch of labs, Australian labs--I just got briefed 
on this today--that will be part of those boarding teams, and 
part of those maritime safety and security teams. They can go 
aboard, smell for drugs and smell for explosives, and that is 
all about pushing the border out, understanding as much as you 
can as far out as you can, so we are excited about low-tech as 
well as high-tech.
    Senator Snowe. That is great. Anything else, Senator 
Lautenberg? Thank you. I thank you.
    Just a couple of questions, Ms. Hecker. Given your 
evaluation of the new mandates that have been vested in the 
Coast Guard and also the transition to the Homeland Security 
Department, do you have any type of timetable that you would 
recommend for producing a strategic plan for implementation? I 
mean the sooner the better.
    Ms. Hecker. We have not set a specific time frame. In our 
report to you in November, it was an outstanding 
recommendation. We do not actually have an official response 
from the Coast Guard about what their time frame is, what they 
think makes sense.
    Senator Snowe. Admiral Collins, do you have a timetable for 
this strategic plan? I mean, inherent in all of this, merging 
cultures and various missions and responsibilities there is 
going to be an adjustment period. What do you envision for a 
timetable based on what Ms. Hecker has said?
    Admiral Collins. I think we have it in various forms. Of 
course, the higher-level document is this document I referred 
to earlier, which is the maritime strategy for homeland 
security, and it talks about some strategic elements and 
objectives; concepts we are trying to drive to, and of course, 
what is being mentioned here is the next-lower-down plan that 
says here is how, in fact, you deploy that strategy in terms of 
resources and people and program emphasis.
    We have it in various parts right now. I mean, Deepwater 
is, in fact, part of our deployment plan in many respects. 
Rescue 21 is part of it. Our budget in 2004 is part of it. If 
you look at the 2004 budget, there is a great correlation to 
the 2003 budget. If you look at the 2003 budget, there is a 
great correlation with the 2002 supp.
    So we have had a multiyear budget growth plan in certain 
areas to build out the security elements that we talk about 
here. We talk about increasing a presence in our ports. We talk 
about building what we call maritime domain awareness, which is 
intel buildout and sensor system, so I think we have got the 
major pieces of it. We can work with GAO and maybe get a 
clearer idea of what the deployment plan needs to look like.
    Clearly, we also have to work within the administration in 
the context of outyear budgets as well.
    Senator Snowe. I think it is important to have the 
objectives and the goals and the timetable for this 
implementation so that you can measure the results. Merging, as 
we know in the private sector, merging cultures can be very 
difficult, and sometimes you see a reduction in productivity 
and output in the immediate aftermath of the merger. I think it 
is critical to be able to be focused on specific goals and 
objectives and the time table for accomplishing that.
    Admiral Collins. Let me consult with our comrades at GAO 
and my staff, and I will communicate to you by letter what our 
game plan is and what timetable we will be working for.
    Senator Snowe. I appreciate that, and again I also want to 
look at this whole timetable for the Deepwater Project, as 
others have indicated that the more funding that we can provide 
for this project I think the more it will enhance our homeland 
security. I think without question that is true.
    You have the oldest fleet in the world, and what Senator 
Breaux was referring to earlier. I think we clearly have to 
place this on a very accelerated timetable, certainly sooner 
than the 20 years. Given where we are going on the funding it 
could be even longer than that, and I do not think that is 
acceptable, particulary with the missions and responsibilities 
that we have now vested in the Coast Guard.
    Admiral Collins. We have a report we owe you, Madam Chair, 
and it is in preparation, and it will be forwarded here at the 
end of the month.
    Senator Snowe. I thank you, Admiral Collins, and I thank 
all the men and women who serve us in the Coast Guard, and 
their outstanding commitment and dedication to this country, 
and thank you, Ms. Hecker.
    This hearing is adjourned.
    [Whereupon, at 4:00 p.m., the Subcommittee adjourned.]

                            A P P E N D I X

 Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii
    Ms. Chairman, thank you for holding this hearing.

    Admiral Collins, thank you for appearing before the Subcommittee. 
You are leading the United States Coast Guard during a critical time. 
The Coast Guard is being transferred from the Department of 
Transportation to the Department of Homeland Security. It is being 
asked to undertake new responsibilities required by the Marine 
Transportation Security Act of 2002. It continues the Deepwater 
recapitalization efforts. And throughout this massive reorganization 
and revamping of its assets, the Coast Guard must continue to ensure 
our nation's maritime security.
    I voiced concerns over the creation of a Department of Homeland 
Security while the legislation was being considered, and many of the 
concerns I and numerous of my colleagues raised were not addressed 
prior to the final passage of the bill. Now that the legislation has 
passed, we must all work diligently together to ensure that the 
transition of 22 existing agencies and programs into the new Department 
is transparent to all.
    Hawaii is dependent on the Coast Guard for many services, from port 
security to the protection of natural resources, and the message I have 
been hearing is that your presence and attention have diminished in 
your non-homeland security traditional missions. We are a maritime 
nation, and Hawaii is an island state; we depend heavily upon the sea 
for shipping of goods, food, and recreation. It should not be forgotten 
that the nation's homeland security effort is also to provide the 
assurance that our way of life continues in as uninterrupted a manor as 
can be permitted within the scope of protecting our citizens and 
country. Part of this assurance is the continuation of traditional 
Coast Guard services that we have all come to depend on, such as drug 
interdiction, fisheries enforcement, aids to navigation, safeguarding 
of life and property, search and rescue, deployment and maintenance of 
weather buoys, and protection of the marine environment from pollution.
    The looming question before the Coast Guard is how it will 
reconcile its traditional missions, the new homeland security missions, 
and the implementation of the Maritime Transportation Security Act of 
2002 within currently allocated resources. I am particularly concerned 
about how the traditional missions of the Coast Guard will fair under 
the new Department. Over the past year and a half we have seen 
increased funding for these traditional missions, yet they are still 
generally below the pre-9/11 levels. The President's Fiscal Year 2004 
budget requests increased spending, yet a clear plan for allocation of 
those funds has yet to be released. It was evident after 9/11 that the 
Coast Guard was stretched thin, but even with an increase in funding, 
the addition of new missions and mandates places a strain on existing 
resources. Evidence of this is seen in the November 2002 Coast Guard 
internal communication to cut back on non-homeland security missions in 
order ``to further compensate for the increased demands of the Coast 
Guard's Maritime Homeland Security Mission.''
    I am concerned that the diminished capacity of the Coast Guard to 
fulfill its non-security missions will eventually impact a wide array 
of stakeholders, including other federal agencies, state and local 
governments, industry, and private citizens. It is my hope that in your 
testimony today you will address the Coast Guard's efforts to continue 
to fulfill its non-security missions.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Olympia J. Snowe to
                       Admiral Thomas H. Collins

Effect of Stevens' Language
    Question. My colleague, Senator Stevens, and I drafted Section 888 
of the Homeland Security Bill which ensures the Coast Guard is 
transferred to the new Department as an intact entity and its non-
homeland security missions are protected. In drafting these provisions, 
we had to strike a balance between ensuring the Coast Guard's mission 
flexibility and preserving its non-homeland security. How has this 
language protected Coast Guard non-homeland security missions? Has this 
language prevented Coast Guard assets and personnel from being shifted 
out of the Coast Guard? Has this language proven to be too rigid and is 
it preventing the Coast Guard from carrying out its missions? If so, 
how? Is it impeding cooperation with the other agencies in Homeland 
Security? Do you think modifications to this language will be needed? 
If so, what types of changes and when do you think recommendations will 
be submitted to Congress?
    Answer. Section 888 of the Homeland Security Bill provides the 
Coast Guard with the authority to carry out both its homeland security 
and traditional non-homeland security missions, as well as the 
flexibility to continue to adjust to respond to mission demands.

    The Coast Guard transferred to the Department of Homeland Security 
intact, as required by the legislation, retaining all traditional 
missions and responsibilities. As such, the Coast Guard continues to 
carry out all our missions while balancing resources across many 
demands. To maintain this balance, the Coast Guard is partnering with 
each of the Directorates within the Department of Homeland Security as 
well as other federal, state, and local organizations to develop 
synergies and leverage capabilities of each entity. At this point, the 
Department of Homeland Security is in its formative stages, with no 
decisions on organizational change or mission priorities that would 
bring conflict with the provisions of Sec. 888.
Department of Homeland Security (DHS) Regions
    Question. Each of the agencies being transferred to the Directorate 
of Border and Transportation Security as well as the Coast Guard bring 
different organizational and regional structures which could hamper 
coordination and complicate cooperation with state and local agencies. 
Additionally each of these agencies operate their own command centers. 
Obviously this will need to be better synchronized if we are going to 
improve coordination. What plans are there for establishing common 
regional boundaries for the various agencies? If so, how will this 
affect the Coast Guard's organizational structure? Will we see 
Districts and Groups go away or become new entities? Will there be 
common command or operation centers? Will they have operational control 
over other agencies' assets?
    Answer. Secretary Ridge, in his testimony before the Senate 
Judiciary Committee, and in submission of the Department of Homeland 
Security (DHS) Fiscal Year 2004 Budget In Brief references the creation 
of a DHS regional structure to bring about unity of purpose and enhance 
overall accountability and efficiency. However, the constraint of the 
region, in terms of geographic size and organizational structure, 
remains under development. Accordingly, we cannot speculate on the 
final design of the Regions or the potential implications for the Coast 
Guard. However, given that the Coast Guard remains intact, and as a 
direct report to the Secretary, it is likely that the Districts and 
Groups will remain within the future organizational structure of the 
Department.

Port Vulnerability Assessments
    Question. As the Coast Guard begins the process of implementing the 
Maritime Transportation Security Act of 2002, we must find and rectify 
our port vulnerabilities. How many Port Vulnerability Assessments have 
been completed? How many are in progress? And how many remain to be 
conducted? Can this process be accelerated? What is preventing the 
Coast Guard from conducting these vulnerabilities sooner rather than 
later? I understand that some of these assessments have been contracted 
out. Has the Coast Guard been able to ensure that adequate quality 
control standards are in place to ensure these assessments are 
accurate? I understand that in some instances, the Coast Guard has been 
unable to share the results of port vulnerability assessments with the 
local ports due to security classification problems. Is this true?
    Answer. Port Security Assessments (PSAs) have been carried out on 
13 of the 55 militarily and economically strategic ports to date, 
including five in coordination with the Defense Threat Reduction Agency 
(DTRA). Four of the 13 reports are complete and all will be complete by 
May 2003. The Coast Guard plans to conduct four additional PSAs in 
fiscal year 2003. This leaves 38 ports from the list of 55 remaining to 
be assessed.

    The PSA schedule could be accelerated with additional funding. The 
President's fiscal year 2004 budget request includes additional funding 
within the Information Analysis and Infrastructure Protection (IAIP) 
Directorate of DHS to complete PSAs.
    Note: Subsequent to this hearing, the FY03 War Time Supplemental 
appropriated $38M of additional funds for the Coast Guard to complete 
the Port Security Assessments in 55 U.S. ports in calendar year 2004.
    Several measures are in place to ensure the accuracy and quality of 
the PSA reports.

    At least 2 Coast Guard Headquarters Port Security staff 
        members accompany each assessment team into the field to 
        liaison with the local Captain of the Port (COTP), supervise 
        the team, and ensure consistent requirements are being met 
        during the assessment.

    The responsible COTP and assessment team liaisons review 
        each PSA draft before the final report is written. The 
        contractor is required to provide a log of corrections made 
        based on CG comments/corrections.

    Initial reports have been distributed to various agencies/
        offices for review and comment, including the Defense Threat 
        Reduction Agency, the Transportation Security Administration, 
        IAIP, and the Coast Guard Intelligence Coordination Center.

    Difficulties in sharing classified information are being addressed 
by using a ``Sensitive Security Information (SSI)'' classification. 
While some portions of the assessments are classified (usually 
pertaining to military facilities in the port), the vast majority of 
the report is designated SSI and available to be shared with the 
appropriate port stakeholders.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Trent Lott to
                       Admiral Thomas H. Collins

Deepwater Funding Levels Using RFP Planning Factor
    Question. Admiral Collins, the Deepwater RFP used annual funding 
for the program of $500 million in FY 1998 dollars. What would the FY 
2003 and FY 2004 funding levels be if the RFP planning factor was to be 
provided for those years?
    Answer. Industry teams used a notional annual planning funding 
stream of $300 million in fiscal year 2002 and $500 million from fiscal 
year 2003 in fiscal year 1998 dollars until project completion. In 
addition to the Request for Proposal (RFP) notional annual funding 
level, Deepwater estimates $30 million per year for government program 
management to administer the program. The adjusted notional annual 
funding amounts, using OMB/USCG Non-pay Inflation Factors and 
government program management amounts for fiscal year 2003 and fiscal 
year 2004, are shown below.


 
----------------------------------------------------------------------------------------------------------------
                                      Inflation
                FY                     Factor              RFP          Program  Management         Total
----------------------------------------------------------------------------------------------------------------
2003                               1.8%            $540,224,000         $28,000,000          $568,224,000
2004                               1.7%            $549,408,000         $34,000,000          $538,408,000
----------------------------------------------------------------------------------------------------------------
Note: Fiscal Year 99-Fiscal Year 02 Inflation factors are 1.7%, 1.0%, 1.5%, 1.8%

    The $500 million plus inflation was only a notional plan to be used 
for contract bidding. The Integrated Deepwater Systems (IDS) 
contracting strategy was chosen based on its flexibility. The 
Acquisition Plan states that the strategy gives the ``Coast Guard the 
flexibility to choose precise quantities identified in the contractor's 
implementation plan or make adjustments depending on budget 
variances.'' Funding below notional annual planning funding levels will 
impact the time and cost necessary to fully implement the Deepwater 
solution.

Affect of FY03 Funding on IDS Plans for FY03-05
    Question. Admiral Collins, the Deepwater prime contractor, 
Integrated Deepwater Systems (IDS), developed a system concept and 
milestone plan based on the RFP planning factor of $500 million in FY 
1998 dollars. Under that plan, during FY's 2003-05, IDS planned to (1) 
begin the conversion of 110' patrol boats to 123' patrol boats 
(complete 18 of 49); (2) commence construction of the first National 
Security Cutter; (3) commence acquisition of the maritime patrol 
aircraft (buy 9 of 35); (4) complete C4ISR Increment 1; and (5) begin 
the retirement of legacy HU-25 (retire 7 of 27) and HC-130H (retire 1 
of 24) aircraft. If Deepwater program funding remains as appropriated 
for FY03, with $500M in appropriated year dollars provided in each of 
FY's 2004 and 2005, how will this affect the IDS plan for FY's 2003-05?
    Answer. The fiscal year 2003 Omnibus Appropriation provided $478 
million for the Integrated Deepwater Systems (IDS). The Integrated 
Deepwater Systems (IDS) contracting strategy was chosen based on its 
flexibility. The Acquisition Plan states that the strategy gives the 
``Coast Guard the flexibility to choose precise quantities identified 
in the contractor's implementation plan or make adjustments depending 
on budget variances.'' Funding below notional annual planning funding 
levels will impact the time and cost necessary to fully implement the 
Deepwater solution.

Time and Cost of IDS at $500 Million per Year
    Question. Admiral Collins, IDS estimated that the total Deepwater 
program cost over its 20-year plan would be $10B in FY1998 dollars. If 
Deepwater program funding remains at $500M in appropriated year dollars 
for the life of the program, and the acquisition schedule is stretched 
out accordingly, what is the Coast Guard's estimate of how many years 
the Deepwater acquisition would have to be funded to acquire the same 
assets included in IDS's 20-year plan? How much does the Coast Guard 
estimate the total program cost would increase (in FY1998 dollars) if 
program funding remains at $500M in appropriated year dollars for the 
life of the program?
    Answer. With a funding profile of $500 million annually in 
``appropriated-year dollars'' vs. $500 million in fiscal year 1998 
dollars adjusted for inflation, a rough order of magnitude estimate of 
at least 27 years will be needed to acquire the assets included in the 
Integrated Deepwater Systems (IDS) implementation plan. Although the 
overall acquisition cost to build out the system is relatively similar 
in fiscal year 1998 dollars, a longer implementation schedule dictates 
legacy assets remain in operation for an extended period and well 
beyond most of their programmed service life. Maintenance and support 
costs to operate, maintain and support legacy surface and air platforms 
will continue to escalate as the existing condition of legacy assets 
continues to deteriorate. Assets, such as the HH-60J medium range 
search helicopter and 270-foot Medium Endurance cutter, may require 
major service life extension projects (SLEPs). Others, such as the 110-
foot WPB fleet, may require unplanned maintenance in order to maintain 
readiness and operate safely. As such, more capital improvement funding 
will be needed to sustain legacy assets and less funding will be 
available for acquiring new assets, further extending the acquisition 
time line past 27 years and increasing total costs to fully implement 
the IDS plan.

Required Changes to Complete IDS by Fiscal Year 2022
    Question. Admiral Collins, I am concerned that the Congress may 
find it difficult to increase the Deepwater program's annual funding to 
account for inflation, as the RFP planning factor considered. Assuming 
program funding remains as appropriated for FY03, what amount of level 
funding (constant appropriated year dollar level) would be required, 
commencing in FY04, to complete IDS's 20-year plan by FY 2022? I 
understand that the declining value of constant appropriated year 
dollars would require an annual figure significantly above $500M and 
would shift much of the acquisition schedule from later years to 
earlier years. How would this change the IDS schedule for FY's 2003-
2005 described in question #2?
    Answer. The President's Fiscal Year 2004 request for the Integrated 
Deepwater System (IDS) is $500 million and funds critical initiatives 
such as the acquisition of the Coast Guard's first National Security 
Cutter, conversion of 110- to 123-foot patrol boats and continued 
development and initial installation of logistics systems and C4ISR 
architecture at shore sites.

    The IDS contracting strategy was chosen based on its flexibility. 
The Acquisition Plan provides ``Coast Guard the flexibility to choose 
precise quantities identified in the contractor's implementation plan 
or make adjustments depending on budget variances.'' As such, the IDS 
contract can adjust to accommodate variable funding levels. Consistent 
with the 20.5 year plan provided in the 7 March 2003 Report to Congress 
on the Feasibility of Accelerating the IDS, the estimated funding level 
(constant appropriated year dollar level) required to complete the 
acquisition of IDS's 20-year plan by fiscal Year 2022 is approximately 
$830 million. Increased funding to this level would advance the IDS 
implementation schedule and introduce new assets earlier.

Homeporting at Naval Station Pascagoula
    Question. Admiral Collins, the IDS plan envisions a final 
complement of 8 National Security Cutters (NSC's), 25 Offshore Patrol 
Cutters (OPC's), and 58 fast response Cutters (FRC's). The increasing 
importance of homeland security and national security missions for 
these assets will require improved interoperability with the U.S. Navy. 
Would the co-location of some of these vessels and U.S. Navy ships at 
the same homeports, such as Naval Station Pascagoula, MS, provide the 
potential for improved interoperability? Would the homeporting of NSC's 
or OPC's at Naval Station Pascagoula, next-door to where they will be 
built, provide the potential for reduced maintenance costs for these 
vessels?
    Answer. Interoperability with the U.S. Navy is a key component of 
the Integrated Deepwater System (IDS) and the Coast Guard's efforts to 
meet the increasing demands of our homeland and national security 
missions. Networking with the Department of Defense and fellow 
Department of Homeland Security agencies is vital in defending and 
securing our country.
    Interoperability between Coast Guard and U.S. Navy vessels is 
linked to compatibility of equipment, command and control systems, 
weapons management systems, training, and doctrine. Co-location with 
the U.S. Navy does offer potential for improved interoperability and 
reduced costs based on common systems and logistics support, e.g., 
availability of Navy training facilities and technical representatives. 
Other factors, such as co-location with similar class Coast Guard 
cutters and a cutter's proximity to its operational area, will also 
improve interoperability and reduce overall costs. All these factors 
regarding homeporting and co-location opportunities will be assessed as 
IDS matures.

Additional Analysis of VTUAV
    Question. Admiral Collins, last year, our staffs discussed the 
decision by the Coast Guard and IDS to proceed with the prototyping and 
evaluation of the Bell-Textron Eagle Eye VTUAV. At the time, the Coast 
Guard cited concern that the Navy had not committed to funding the 
Northrup Grumman Fire Scout VTUAV as one of the reasons that it was 
proceeding with developing only the Eagle Eye. Recently, the Coast 
Guard approved the acquisition of three Eagle Eye VTUAV's. The 
Administration's FY04 budget request includes funding for the Navy to 
continue its evaluation of the Fire Scout, with particular application 
to the Navy's Littoral Combat Ship, a vessel similar in size to the new 
Coast Guard cutters planned by IDS. Will the Coast Guard conduct a more 
thorough analysis of the respective capabilities and costs of these two 
VTUAV platforms prior to making a decision to proceed with acquiring 
production version VTUAV's?
    Answer. The Bell Helicopter Textron HV-911 Eagle Eye VTUAV, as 
proposed by the Coast Guard's System Int egrator, provides the best 
value and performance to the Coast Guard. As such, the Coast Guard is 
proceeding with the development of the HV-911 Eagle Eye. The current 
Delivery and/or Task Order (DTO) schedule does not include an 
additional analysis of Fire Scout. The Coast Guard is working with the 
Navy to ensure that our systems are interoperable.

    Below is a comparison between the characteristics of the Bell 
Helicopter and the Fire Scout:

 
------------------------------------------------------------------------
                                    Bell Helicopter
                                        HV-911            Fire Scout
------------------------------------------------------------------------
Type (Helicopter or Tilt Roter)   Tilt Rotor          Helicopter
Maximum Continuous Cruise Speed   220                 125
 (knots)
Maximum Endurance (hours)         5.9                 7.0
Maximum Range (nautical miles)    832                 470
Payload (pounds)                  389.3               380.3
------------------------------------------------------------------------

                                 ______
                                 
Response to Written Questions Submitted by Hon. Kay Bailey Hutchison to
                       Admiral Thomas H. Collins

HH-65 Safety Concerns
    Question. The U.S. Coast Guard has documented more than 60 life-
threatening incidents in the past couple of years in which the HH-65 
helicopter's Honeywell LTS-101 engine has suddenly lost power during 
flight. What particular safety concerns does the Coast Guard have with 
the Honeywell LTS-101 engine and what steps are you taking to remedy 
those concerns?
    Answer. HH-65 engine safety and reliability are the most critical 
issues facing Coast Guard Aviation today. Since 1997, there have been 
77 documented in-flight power losses/engine failures in the HH-65. The 
in-flight power loss trend for first half of fiscal year 20Y03 (6 
months) is nearly twice the rate of the previous 6 years.



    Reported Inflight Loss of Power Mishap Rates FY97-FY03 thru 25 Mar 
03 (source G-WKS-1 database)
    The LTS-101 engines are controlled with an outdated, inefficient, 
and increasingly unreliable/maintenance intensive, pneumatic engine 
control system. This obsolete system's unreliability is the HH-65's 
most prevalent mission degrader. Further, the HH-65 has a documented 25 
percent engine power deficit, partially due to a 17 percent weight 
growth attributed to mission enhancement installations, since its 
introduction in 1984.
    The Coast Guard continues to work with Honeywell to improve the 
safety, reliability, and power of the LTS-101 engine while also 
considering any other alternatives to remedy these critical issues and 
meet emergent mission requirements.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Ernest F. Hollings to
                       Admiral Thomas H. Collins

Sustaining Missions Under DHS
    Question. The Coast Guard is in the middle of reinventing itself to 
take on new responsibilities for homeland security, such as those under 
MTSA, even as it moves to DHS. Doesn't the move to DHS create 
additional risks in terms of the ability of the CG to keep all of its 
missions on track?
    Answer. The Coast Guard is not reinventing itself as much as it is 
demonstrating its value to the nation as a military, multi-mission, 
maritime service. The Coast Guard is able to adapt to the new Homeland 
Security environment while maintaining a balanced portfolio of services 
to meet the maritime mission requirements of the nation. The ``new'' 
mission areas of maritime Homeland Security, and additional 
requirements of Maritime Transportation Security Act of 2002 build upon 
the Coast Guard's core competency in maritime law enforcement, and 
maritime port safety and security. These new requirements pose 
significant challenges in terms of updating and extending new mission 
capabilities and expanding Coast Guard capacity (i.e. move people, 
operational assets and new technologies) to meet higher mission 
expectations. In many ways, transition to the Department of Homeland 
Security (DHS) will assist in that process as many of our partner 
agencies reside in the same department where the DHS focus is very 
strongly on operational mission accomplishment. Providing the 
additional resources requested in the President's Fiscal Year 2004 
Budget Request will enable us to meet these challenges successfully.

Resource Hours
    Question. While the FY2004 budget request indicates an increase of 
resources for search and rescue and fisheries enforcement, there have 
been indications that resources (on an hourly basis) for these missions 
are being diverted for port security duties in certain districts if not 
nationally, and that resources are below pre 9/11 levels. Is this 
accurate?
    Answer. The increase of resources for search and rescue and 
fisheries enforcement in the fiscal year 2004 budget request is based 
on the projected usage of Coast Guard assets. The baseline, or resource 
hour projection for each asset, is used to develop out-year budget 
estimates for each mission area. The baseline is predicated on 
historical usage of assets and was adjusted in 2002 for the increased 
port security operations.

    Port security is a current national priority and that is evidenced 
by the allocation of Coast Guard resources to achieve Maritime Security 
(MARSEC) level two in critical ports. The baseline does not reflect the 
resource hours necessary for maintaining MARSEC level two. Although 
some Coast Guard resources have been diverted to the ongoing conflict 
overseas, the Coast Guard has received resource assistance from the 
Navy for the port security mission. Given that there are finite Coast 
Guard resources, some missions, such as fisheries enforcement, are 
currently receiving fewer resource hours due to higher national 
priorities. Coast Guard activity levels dedicated to the fisheries 
mission are based on ensuring adequate compliance with management 
measures implemented to recover and sustain healthy fish stocks. 
Mission emphasis fluctuates as the Coast Guard responds to national 
priorities, program policies and other external factors.
    The Search and Rescue mission remains as the Coast Guard's number 
one priority alongside protecting America's ports and waterways from a 
future terrorist attack. The Search and Rescue mission, as a demand-
driven mission, will continue to receive full funding and resource 
hours necessary to meet the demand.
    While resource hours for each mission will fluctuate based on 
current threats, this is only part of the Coast Guard's measure of 
effectiveness. Performance measures are critical to assessing the 
success of the Coast Guard in meeting demands in each mission area. For 
example, the Coast Guard improved performance in the Search and Rescue 
mission for the second consecutive year in fiscal year 2002 by saving 
84.4 percent of mariners in distress, just shy of the national goal of 
85 percent. Initiatives like Rescue 21 will help to improve our 
performance in this area as it is designed to take the search out of 
Search and Rescue. While resource hours dedicated to fisheries 
enforcement may be down, I am encouraged by the reduction in maritime 
fatalities on fishing vessels. This is an indication that our 
prevention measures are working. I will continue to evaluate Coast 
Guard mission performance using resource hours as an indication of 
effort and results as a measure of performance and effectiveness.

Rescue 21 Deployment Schedule
    Question. The Coast Guard is in the middle of upgrading its 
National Distress System, which it has sorely needed to ensure that 
communication gaps for carrying out rescues of mariners are filled. 
Will the move to DHS speed up this upgrade, slow it down, or not affect 
it at all? When will the National Distress System upgrade be done?
    Answer. The Coast Guard's transition to the Department of Homeland 
Security is not expected to alter Rescue 21's rollout schedule. Rescue 
21 remains on schedule to meet the Congressionally established 
deployment goals of Initial Operating Capability in fiscal year 2003, 
35 percent of the regions complete in fiscal year 2004, 70 percent 
complete in fiscal year 2005, and 100 percent complete in fiscal year 
2006. Please refer to the attached deployment graphic for specific 
deployment schedule details.

    DIAGRAMS & TABLES

    Rescue 21 Deployment Schedule



Coordination Between Border & Transportation Security and the Coast 
        Guard
    Question. The law establishing DHS provides that the new Border and 
Transportation Security Directorate will be responsible for ``(2) 
securing the borders, territorial waters, ports, terminals, waterways, 
and air, land, and sea transportation systems of the United States''. 
Yet the testimony from the Coast Guard states the Coast Guard ``is the 
lead federal agency for Maritime Homeland Security.'' How does the 
Coast Guard intend to resolve this conflict?
    Answer. The roles and responsibilities of the Coast Guard and the 
Border and Transportation Security Directorate are complementary not 
contradictory. As the lead federal agency for maritime homeland 
security and the federal maritime security coordinator, the Coast Guard 
shares in border and transportation security (BTS) responsibilities. 
The Coast Guard, the BTS Bureaus of Customs and Border Protection 
(BCBP), and Bureau of Immigrations and Customs Enforcement (BICE) must 
work collaboratively with complementary authorities and capabilities to 
attain the objectives established by the president and the secretary. 
Senior Coast Guard officials are working in the BTS directorate or 
actively engaged in work groups chartering our relationships and 
policies. These members are focused on developing operational and 
policy doctrine to recognize the unique responsibilities and 
authorities of the various agencies responsible for securing our 
borders. Some overlap in authorities is beneficial--provided each 
agency's responsibilities and roles are completely understood. Our 
enhanced working relationships with our BTS partners will allow us to 
mitigate potential conflicts in this area.

Relationship With TSA
    Question. Is the Coast Guard actively negotiating a memorandum of 
understanding with the Transportation Security Administration--which 
will be housed in the Border directorate--on the authority of each with 
respect to maritime security? Will legislation be necessary to address 
these conflicts? What is the status of negotiations of an MOU between 
the Coast Guard and TSA to clarify the responsibilities of each agency? 
Wouldn't the transportation security needs of the country be best 
served by a system where the Coast Guard works in conjunction with TSA 
to provide a security system that provides consistent results across 
all modes?
    Answer. The Coast Guard and the Transportation Security 
Administration (TSA) are committed to developing a Memorandum of 
Understanding (MOU) between the two agencies that will address, among 
other things, respective roles and responsibilities. Some initial but 
important work in this regard had already been done during both 
agencies' tenure in the Department of Transportation, and the parties 
will continue to work together to jointly agree to the framework on 
which that MOU will be constructed. Our overarching goal is to define 
our strategic relationship with an aim towards identifying and 
leveraging our respective core competencies, capabilities, resources, 
and authorities to enhance the transportation security of the United 
States, and to achieve national performance goals for ports, waterways, 
and coastal security. No new legislation is required.

    The agencies enjoy a close partnership, with high level officials 
of each agency meeting on a biweekly basis to discuss issues and 
concerns of mutual interest to ensure that national security and public 
safety are preserved. Staffs also work together on a daily basis. As an 
example of this partnership, the Coast Guard, together with TSA and 
other agencies, jointly hosted several public meetings at strategic 
locations around the country to get public input on our regulatory 
approach to implementing the requirements of the Maritime 
Transportation Security Act of 2002. Furthermore, TSA and the Maritime 
Administration recently detailed employees to the Coast Guard to 
continue development of those regulations.

Relationships With State and Local Authorities; IMO
    Question. The Coast Guard has an intricate network of relationships 
with state and local authorities, yet the new department will establish 
a separate office for coordination with state and local authorities. 
How will potential conflicts be resolved? How will other potential 
conflicts of authority be resolved, such as between the Coast Guard's 
role in the International Maritime Organization, and the new 
international office within DHS?
    Answer. The Coast Guard does not see the potential for conflict, 
rather the opportunity to establish mutually supportive and productive 
relationships within the Department of Homeland Security (DHS). In many 
cases, DHS will enhance coordination in a particular area while the 
Coast Guard remains the Executive Agent, as demonstrated in the recent 
transfer and sharing of Port Security Assessments (PSA) 
responsibilities.

    All our local operations and relationships contribute directly to 
the overall safety, security and economic viability of the nation. The 
transition to DHS allows us to develop interconnected and complementary 
systems among federal, state and local agencies that are reinforcing 
rather than duplicative and that ensure essential requirements are met.
    In the international arena, through our position as the lead 
federal agency for Maritime Homeland Security, we will embrace 
cooperation and unity of effort to represent the concerns of all DHS 
agencies, as well as our other interagency partners (DOT, DOS, DOJ, 
etc), at international maritime organizations such as IALA and IMO.

Overseas Conflict
    Question. In recent memory, have we ever sent this many Coast Guard 
vessels to serve in an overseas conflict? What are these vessels doing? 
When are they coming back? Will we be sending more? If war is declared, 
and the Coast Guard comes under the authority of the Navy, what happens 
to the Coast Guard's role in port security, homeland security, and 
other key functions? With the domestic Terror Alert system on High, how 
can you defend sending key assets to the Persian Gulf ? What is the 
Coast Guard's plan for filling the gaps they have left? What is the 
long-term impact of increased operating tempo on assets left behind?
    Answer. Yes, during the Vietnam conflict, the Coast Guard 
dispatched twenty six 82 foot patrol boats, eight consecutive 
deployments of 3-5 high endurance cutters totaling 32 ships, and four 
buoy tenders to Vietnam at Department of Defense (DoD) request (see 
attachment). Since then, we have continued to support DoD requirements. 
In Grenada, a high endurance cutter was part of the initial military 
forces and several patrol boats and a 140' tug were part of the post 
hostilities stabilization force. In the 1994 military deployment to 
Haiti, a high endurance cutter, buoy tender, two patrol boats, and port 
security units were part of the force.

    The missions of Coast Guard forces currently dispatched overseas 
are in support of port security/harbor defense, coastal sea control, 
maritime interception, force protection, environmental response and 
port opening operations.
    Coast Guard assets will return to the U.S. when the Secretary of 
Defense determines their mission is complete.
    There are no pending requests from the DoD for additional Coast 
Guard assets to be deployed. The necessity to rotate forces is still 
under study.
    If the Coast Guard is transferred to the Department of the Navy it 
comes as a complete entity with all of its current statutory 
authorities and responsibilities. The Coast Guard will continue to 
execute its role in port security, homeland security, and other key 
functions here at home.
    The Coast Guard has carefully weighed the commitment of forces 
overseas in support of longstanding agreements with DoD and the force 
requirements necessary to perform our homeland security requirements. 
The current overseas commitment represents less than three percent of 
the Coast Guard's overall capability, yet Coast Guard forces are a 
critical element of the Combatant Commander's war plan. Coast Guard 
forces offer complementary, non-redundant capability not readily 
available in the Navy. Together, the Navy and Coast Guard have built 
one naval force capable of meeting the spectrum of Combatant Commander 
requirements.
    The Coast Guard has completed in-depth planning to address homeland 
security requirements and is taking significant steps to enhance our 
security posture, including; mobilizing thousands of Coast Guard 
reservists, increasing the operational tempo of cutters, small boats 
and aircraft, and rebalancing between missions to address heightened 
security requirements associated with changes in the Homeland Security 
Advisory System. We also have eleven USN Patrol Craft under the 
Tactical Control of the Coast Guard for domestic duties. Additionally, 
the Coast Guard has partnered with federal, state and local agencies 
and industry stakeholders to enhance security in our nation's ports. We 
are also working closely with the U.S. Northern Command and the Navy to 
jointly develop operations plans and identify additional unique DoD 
capabilities that can support Coast Guard homeland security 
requirements.
    The Coast Guard will continuously assess the impact of increased 
operating tempo on units and equipment. The duration of operations will 
greatly influence the overall impact. Extensive operations require 
increased consumables and acceleration of maintenance tied to usage of 
equipment. The Coast Guard requested, through the Administration, a 
fiscal year 2003 supplemental for Operations Iraqi Freedom and Liberty 
Shield to help address these costs.

EIGHTY-TWO PATROL BOATS ASSIGNED TO COAST GUARD SQUADRON One
DIVISION 11 TURNOVER
    USCGC POINT BANKS (WPB 82327) 26 May 1970
    USCGC POINT CLEAR (WPB 82315) 15 September 1969
    USCGC POINT COMFORT (WPB 82317) 17 November 1969
    USCGC POINT GARNET (WPB 82310) 16 May 1969
    USCGC POINT GLOVER (WPB 82307) 14 February 1970
    USCGC POINT GREY (WPB 82324) 14 July 1970
    USCGC POINT MARONE (WPB 82331) 15 August 1970
    USCGC POINT MAST (WPB 82316) 16 June 1970
    USCGC POINT YOUNG (WPB 82303) 16 March 1970
DIVISION 12
    USCOC POINT ARDEN (WPB 82309) 14 February 1970
    USCGC POINT CAUTION (WPB 82301) 29 April 1970
    USCGC POINT DUME (WPB 82325) 14 February 1970
    USCGC POINT ELLIS (WPB 82330) 9 December 1969
    USCGC POINT GAMMON (WPB 82328) 11 November 1969
    USCGC POINT LOMAS (WPB 82321) 26 May 1970
    USCGC POINT ORIENT (WPB 82319) 14 July 1970
    USCGC POINT WELCOME (WPB 82329) 29 April 1970
DIVISION 13 TURNOVER DATE
    USCGC POINT CYPRESS (WPB 82326) 15 August 1970
    USCGC POINT GRACE (WPB 82323) 16 June 1970
    USCGC POINT HUDSON (WPB 82322) 11 December 1970
    USCGC POINT JEFFERSON (WPB 82306) 21 February 1970
    USCGC POINT KENNEDY (WPB 82320) 16 March 1970
    USCGC POINT LEAGUE (WPB 82304) 16 May 1969
    USCGC POINT PARTRIDGE (WPB 82305) 27 March 1970
    USCGC POINT SLOCUM (WPB 82313) 11 December 1969
    USCGC POINT WHITE (WPB 82308) 12 January 1970
HIGH ENDURANCE CUTTERS ASSIGNED TO COAST GUARD SQUADRON THREE May 4, 
        1967 to January 31, 1972
FIRST DEPLOYMENT
    USCGC BARATARIA (WHEC 381) 4 May 67-25 Dec 67
    USCGC HALF MOON (WHEC 378) 4 May 67-29 Dec 67
    USCGC YAKUTAT (WHEC 380) 4 May 67-1 Jan 68
    USCGC GRESHAM (WHEC 387) 4 May 67-28 Jan 68
    USCGC BERING STRAIT (WHEC 382) 4 May 67-18 Feb 68
SECOND DEPLOYMENT
    USCGC ANDROSCOGGIN (WHEC 68) 4 Dec 67-4 Aug 68
    USCGC DUANE (WHEC 33) 4 Dec 67-28 Jul 68
    USCGC CAMPBELL (WHEC 32) 14 Dec 67-12 Aug 68
    USCGC MINNETONKA (WHEC 67) 5 Jan 68-29 Sep 68
    USCGC WINONA (WHEC 65) 25 Jan 68-17 Oct 68
THIRD DEPLOYMENT
    USCGC BIBB (WHEC 31) 4 Jul 68-28 Feb 69
    USCGC INGHAM (WHEC 35) 16 Jul 68-3 Apr 69
    USCGC OWASCO (WHEC 39) 23 Jul 68-21 Mar 69
    USCGC WACHUSETT (WHEC 44) 10 Sep-1 Jun 69
    USCGC WINNEBAGO (WHEC 40) 20 Sep 68-19 Jul 69
FOURTH DEPLOYMENT
    USCGC SPENCER (WHEC 36) 11 Feb 69-30 Sep 69
    USCGC MENDOTA (WHEC 69) 28 Feb 69-3 Nov 69
    USCGC SEBAGO (WHEC 42) 2 Mar 69-16 Nov 69
    USCGC TANEY (WHEC 37) 14 May 69-31 Jan 70
    USCGC KLAMATH (WHEC 66) 7 Jul 69-3 Apr 70
FIFTH DEPLOYMENT
    USCGC HAMILTON (WHEC 715) 1 Nov 69-25 May 70
    USCGC DALLAS (WHEC 716) 3 Nov 69-19 Jun 70
    USCGC CHASE (WHEC 718) 6 Dec 69-28 May 70
    USCGC MELLON (WHEC 717) 31 Mar 70-2 Jul 70
    USCGC PONTCHARTRAIN (WHEC 70) 2 Apr 1970-25 Oct 1970
SIXTH DEPLOYMENT
    USCGC SHERMAN (WHEC 720) 22 Apr 70-25 Dec 70
    USCGC BERING STRAIT (WHEC 382) 17 May 70-31 Dec 70* **
    USCGC YAKUTAT (WHEC 380) 17 May 70-31 Dec 70*
SEVENTH DEPLOYMENT
    USCGC RUSH (WHEC 723) 28 Oct 70-15 Jul 71
    USCGC MORGENTHAU (WHEC 722) 6 Dec 70-31 Jul 71
EIGHTH DEPLOYMENT
    USCGC CASTLE ROCK (WHEC 383) 9 Jul 71-21 Dec 71*
    USCGC COOK INLET (WHEC 384) 2 Jul 71-21 Dec 71*

    *Turned over to the Government of South Vietnam
    **Second deployment
OTHER COAST GUARD CUTTERS IN SOUTH VIETNAM
BUOY TENDERS
    USCGC BASSWOOD (WLB 388)
    USCGC BLACKHAW (WLB 390)
    USCGC IRONWOOD (WLB 297)
    USCGC PLANETREE (WLB 307)

Coast Guard's Relationship With DOT
    Question. I understand that the Coast Guard has been working on 
some 80 different memoranda of understanding with DOT to address the 
various program areas where each will continue to have a role. Can you 
describe some of the more important areas of cooperation? Will all of 
these MOUs been finalized by March 1? The Coast Guard has identified 
approximately 180 different relationships and service with DOT. What 
types of services formerly provided by DOT will Coast Guard absorb? 
What are the resource impacts of this shift?
    Answer. There were approximately 170 ``relationships'' between the 
Coast Guard and the Department of Transportation (DOT). These were 
generally categorized as maritime, legal, administration, finance, 
logistics, or personnel issues. Of these, 29 new or revised Memoranda 
of Agreement (MOA) or Reimbursable Agreements were signed and dated 
February 28, 2003 or earlier, to ensure continuity of services between 
Coast Guard and DOT. Of the 29, one agreement addressed the 
continuation of approximately 40 different support services.

    These agreements essentially formalized the enduring relationship 
between the Coast Guard and DOT following the transfer of the Coast 
Guard to the new Department of Homeland Security (DHS) on March 1, 
2003. Many other relationships will continue based on existing 
agreements which remained in place after the Coast Guard transferred.
    Examples of these agreements include:

    Reimbursable Agreement for services already provided by the 
        DOT's Working Capital Fund to the USCG; for example, parking 
        management, motor pool, mail and library services, and building 
        security.

    MOA between the Coast Guard and the U.S. Maritime 
        Administration for the USCG to continue to provide data 
        required by the Merchant Marine Licensing and Documentation 
        System (MMLD).

    MOA between the Coast Guard and DOT for the USCG to 
        continue to provide expertise to assist in development of 
        accessibility standards for passenger vessels.

    To the extent that DOT and the Coast Guard entered into agreements 
for continuation of particular services, those agreements govern the 
scope, duration, and reimbursement.
    Because of the enduring nature of the various Coast Guard--DOT 
``relationships'', the transfers and realignments were accomplished at 
minimal resource costs or savings to the Coast Guard and DOT. The long 
term future costs or savings that may or may not result as DHS becomes 
the service provider are unknown.

Priority of Coast Guard Security Missions
    Question. Admiral Collins, your only reference to the traditional 
missions of the Coast Guard in your written statement casts them as 
important for security. That already is a warning sign to me that Coast 
Guard missions must be linked to ``security'' to have any priority in 
DHS. Can you comment on that? If a major domestic security incident 
occurs, will Coast Guard resources be diverted away from other 
missions? If this is a sustained shift in resources, how can the Coast 
Guard realistically carry out its non-homeland security missions in an 
adequate manner?
    Answer. Secretary Ridge has affirmed many times that all Coast 
Guard missions--both homeland security and non-homeland security, will 
remain among the mission priorities. The continual emphasis upon search 
and rescue and other non-homeland security missions are evident in the 
budgetary requests for initiatives within fiscal year 2003 and the 
fiscal year 2004 budgets.

    The Coast Guard's maritime, military, and multi-mission nature 
provides us with the flexibility to respond to the full range of Coast 
Guard missions. In times of crisis, the Commandant along with the Area 
Commanders will divert resources to the very most critical tasks for 
preserving the safety and security of the Nation's maritime.

Non-HLS Missions: Stakeholder Support
    Question. The Coast Guard has a wide variety of stakeholders that 
rely on the Coast Guard, including other federal agencies such as NOAA, 
state and local governments, industry, and private citizens. If the 
Coast Guard can't carry out its missions, should we be looking to these 
other entities to take on those duties? Didn't the recent communication 
to the North Atlantic commands in fact call on them to do just that?
    Answer. All Coast Guard missions will remain a priority in the new 
Department of Homeland Security (DHS). The Coast Guard's historic 
ability to quickly adapt to the dynamic demand for services will allow 
it to balance maritime homeland security and non-homeland security 
requirements to accomplish all missions and maintain operational 
excellence. This will be done through: maintenance of a flexible, 
multi-mission force structure; application of new and developing 
technologies; enhancement of working relationships with fellow DHS 
agencies, as well as state and local governments; and continued 
recruiting and retention of quality Coast Guard personnel

    Recent communications in the field regarding the re-prioritization 
of some missions represented a short-term workload reduction adjustment 
to compensate for the increased demands of an elevated homeland 
security threat. However, the fiscal year 2003 and the fiscal year 2004 
budget request provide additional capabilities (i.e. MSSTs) and 
increased capacity (i.e. additional small boats and crews) to perform 
maritime homeland security missions and restore non-homeland security 
missions.

Coast Guard Integration Into the Department of Homeland Security
    Question. Is statutory language in the DHS law that protects 
traditional missions affecting the Coast Guard's ability to integrate 
into DHS? How? Does the Coast Guard have concerns with this language? 
What exactly are the concerns? What would be the alternative to assure 
that traditional missions are not sacrificed?
    Answer. The statutory language in the Homeland Security Act of 2002 
is not affecting the Coast Guard's ability to integrate into the 
Department of Homeland Security (DHS). The Coast Guard is in the 
process of fully integrating with the DHS in accordance with the 
Homeland Security Bill. The legislation provides the Coast Guard with 
the authority to carry out both its homeland security and non-homeland 
security missions, as well as the flexibility to continue to adjust to 
respond to mission demands.

DHS Procurement Policy Impacts on Deepwater
    Question. The new DHS is adopting department-wide administrative 
policies that will alter how the Coast Guard has done business in the 
past. For example, I understand that a DHS policy on procurement is in 
progress. How will such a policy impact one of Coast Guard's major 
initiatives--its $17 billion Deepwater acquisition project? A recent 
GAO report on the Deepwater Program identified serious concerns 
regarding the Coast Guard's ability to (1) keep costs down through 
ample competition opportunities and (2) conduct appropriate oversight 
of this largest, complex acquisition in Coast Guard's history. Please 
respond to these concerns. Could the new DHS policy have any impacts on 
the method being used for the Deepwater Procurement--which uses a 
single ``Systems Integrator'' for subcontracting rather than having the 
Coast Guard compete out contracts over the expected 30 year life of the 
program?
    Answer. New Department of Homeland Security (DHS) polices are not 
anticipated to impact the Integrated Deepwater Systems (IDS) 
procurement. The IDS acquisition strategy revolves around the 
overarching objectives of maximizing operational effectiveness while 
minimizing total ownership cost and has flexibility to adapt to 
changes.

    In the General Accounting Offices' (GAO) May of 2001 report, GAO 
expressed concern over the Coast Guard's ability to maintain 
competition and effectively conduct oversight of the IDS program. This 
report was completed prior to releasing the IDS Request for Proposal 
(RFP). In response to this report, the Coast Guard worked with GAO to 
incorporate improvements into the RFP to address and mitigate these 
concerns.
    Competition and competitive pricing are vital to controlling costs. 
The IDS contract includes annual and award term incentives for the 
Systems Integrator that reward these principles. The annual incentives 
include an Incentive Subcontracting Program and the Annual Award Fee. 
The annual Award Fee is based on the accomplishments of the Small 
Business Subcontracting Plan.
    The Award Term Incentive is an additional award term of up to five 
years based on the contractor's performance in meeting the overarching 
objectives of maximizing operational effectiveness and minimizing total 
ownership cost. Integral to achieving these objectives is obtaining 
competition and competitive pricing.
    Additionally, the Integrated Coast Guard Systems (ICGS), 
Deepwater's system integrator, has adopted the proprietary Lockheed 
Martin Open Business Model to obtain competition and competitive 
pricing. The Open Business Model discourages up-front agreements with 
subcontractors that guarantee certain percentages of future work. The 
Open Business Model promotes continual reevaluation of proposed 
requirement solutions to provide state of the market technology at a 
competitive price.
    Contract incentives coupled with the Open Bus iness Model will 
promote competition and competitive pricing in order to control costs 
at acceptable levels. Additionally, the Coast Guard will carefully 
monitor these concerns.
    GAO's concerns regarding the appropriate oversight of the IDS 
program were addressed by establishing the Department Of Transportation 
(DOT) IDS Governance Council to provide additional governance. The 
Department of Homeland Security (DHS) has indicated Departmental 
oversight of IDS will continue. Additionally, the IDS program has 
established a peer group with the Internal Revenue Service and the U.S. 
Customs to review large capital programs in the Federal Government 
outside of the Department of Defense (DoD). Further, the IDS program 
continues to complete self-assessments and exchange staff members with 
DoD to provide insights on other organizations management of large, 
complex acquisitions such as the Navy's Littoral Combat Ship Program.
    In recent testimony before the Subcommittee on Oceans, Atmosphere, 
and Fisheries, Committee on Commerce, Science, and Transportation, U.S. 
Senate, GAO commented the Coast Guard's management of IDS during the 
planning phase was among the best of the federal agencies evaluated, 
providing a solid foundation for the project.

Security Plan Implications
    Question. Admiral Collins, I am very concerned about implementation 
of the port security bill. Last year, we passed the most significant 
legislation ever directed at coordinating security policy at our 
seaports. I had attempted to secure a dedicated source of revenue to 
help our ports and state and local municipalities comply with the new 
federal security mandate. I was dismayed when the Presidents' Budget 
indicated that there were no major funds to address grants to help 
comply with the requirements of security plans.

    When we get security plans up and running will it lessen 
        some of the responsibility that faces the Coast Guard with 
        respect to security?

    Is the Coast Guard going to be prepared to close down 
        certain ports or waterfront facilities, that do not have 
        adequate security plans?

    It is my understanding that the Coast Guard has done some 
        preliminary estimates on the costs of complying with the 
        planning requirements. What are those estimates--including for 
        Coast Guard resources? If we do not have a federal source to 
        help reimburse facilities, do you think that you will be able 
        to mandate compliance with the highest levels of security?

    Answer. The Maritime Transportation Security Act of 2002 (MTSA) and 
the required security plans do not decrease the Coast Guard's 
responsibilities with respect to security, in fact, MTSA increases it. 
However, when the plans are implemented, it will provide a substantial 
and consistent security regime across the waterfront.

    The Coast Guard is actively engaging stakeholders to ensure they 
develop and implement adequate security plans for vessels, facilities, 
and ports in a timely fashion as required under the MTSA and recent 
SOLAS amendments. However, we will be prepared to limit or possibly 
prohibit operations that would place vessels or facilities at risk, 
particularly at heightened threat levels or MARSEC conditions, if those 
vessel or facilities are not implementing adequate security measures in 
accordance with the MTSA.
    The Coast Guard conducted a preliminary estimate of industry costs 
to implement the Maritime Transportation Security Act of 2002 (MTSA) 
and the amendments to the International Convention for the Safety of 
Life at Sea (SOLAS), which were published in the December 30, 2002 
Federal Register for public comment. The estimated cost to industry is 
$1.4 billion in the first year and $6.0 billion over the next ten years 
(2003-2012). The cost estimates are being refined based on input 
received and new estimates will be published during the summer of 2003 
in conjunction with the Interim Final Rules (IFR).
    These measures will be mandatory for vessels and facilities in 
international trade under SOLAS. The Coast Guard will issue the IFR 
requiring these measures, as well as those that we believe are prudent 
and necessary for vessels and facilities in domestic trade for each of 
the respective Maritime Security Threat Levels, this summer as mandated 
by the MTSA. This rulemaking process is expected to mandate the highest 
level of security required under different levels of threat.
    The Coast Guard diverted resources in fiscal year 2003 to ensure 
the regulatory process for MTSA remains on course. We are developing 
alternatives for plan review and approval after the IFR is published in 
July 2003 per the MTSA requirements.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to
                       Admiral Thomas H. Collins

MHLS Strategy Implementation Plan
    Question. Admiral Collins, you testified before the Commerce 
Committee previously that the Coast Guard is implementing a three-year 
plan to return to a ``new normalcy.'' When can we expect to see this 
plan, and will it detail the differences between pre- and post-9/11 
normalcy?
    Answer. The Coast Guard has focused on a Strategic Deployment Plan 
(SDP) for implementing the Maritime Strategy for Homeland Security. 
Base lining Maritime Strategy for Homeland Security requirements will 
help balance our other missions. Various components of our Maritime 
Security Strategy Deployment Plan are under development, with the first 
component to be completed in April/May of 2003, and the full plan by 
the end of fiscal year 2003.

    These Maritime Strategy for Homeland Security requirements will 
roll into a comprehensive blueprint to achieve overall mission balance. 
Our existing strategic planning process and performance plans will 
serve as the cornerstone of an integrated approach emphasizing three 
general areas of effort: Preserving Non-HLS missions, Conducting HLS 
missions, and maintaining military readiness to conduct Defense 
Operations when tasked. The planning process provides the ability to 
detail the difference between pre and post-9/11 levels of effort and 
performance in missions.

HLS & Non-HLS Mission Balance
    Question. As of March 1st, the Coast Guard will begin operating 
under the new umbrella of the Department of Homeland Security. How will 
the Coast Guard internally monitor and the General Accounting Office 
externally monitor the already belabored Coast Guard non-homeland 
security missions, such as fisheries enforcement and oil spill response 
effort, to ensure that they progress?
    Answer. The Coast Guard continues to monitor mission levels on a 
quarterly basis through the Abstract of Operations (AOPS) database. 
This information is reviewed throughout the Coast Guard chain of 
command and information will also be provided to Congress as part of a 
newly required quarterly report. The first of these quarterly reports 
was delivered to Congress on 14 April 2003.

    The Coast Guard continues to monitor resource hour levels in all 
missions, conduct risk-based assessments, and allocate resources 
accordingly to meet the highest threats. The Coast Guard is committed 
to balancing missions in all areas; Homeland Security, and non-Homeland 
Security.

Cost of MTSA
    Question. Recommendations to fund the security requirements of the 
MTSA are due within six months of enactment, how are those plans 
coming?
    Answer. The Coast Guard will provide input to the initial Report of 
Security Funding and Compliance required of the Secretary of 
Transportation by the Maritime Transportation Security Act of 2002 
(MTSA). The Coast Guard has conducted an initial assessment of the 
ports to determine those vessels and facilities posing a high risk of 
being involved in a transportation security incident. In addition, the 
Coast Guard continues to conduct Port Security Assessments for the 55 
strategic ports.

    One way the Coast Guard is working on closing some of the 
vulnerabilities is with a Rulemaking implementing MTSA. The Federal 
Register notice of public meetings published cost estimates to the 
private sector of $1.3 billion in the first year and $6.0 billion over 
10 years for industry. These estimates will be refined as part of the 
rulemaking process and updated with the announcement of the Interim 
Final Rules in June.

Port Security Committees
    Question. Have all the local security committees been established? 
What problems, if any, have arisen in the establishment of these 
committees?
    Answer. Security committees have been established for all Captain 
of the Port (COTP) zones. This covers all U.S. ports.

    One of the challenges will be continuing to motivate and coordinate 
participation of key industry representatives on the Port Security 
Committee. The success of the multi-lateral planning effort is tied 
directly to the participation of individual industry representatives.
VMS System for Fisheries
    Question. The Coast Guard has touted the Vessel Monitoring System 
(VMS) program for fisheries enforcement to offset the reduction of on 
the water patrol. Yet, according to some, it is a tool to supplement 
existing enforcement efforts that will not replace the need for ship 
and aircraft patrols. How will the Coast Guard reconcile these 
differences?
    Answer. The Coast Guard agrees that the Vessel Monitoring System 
(VMS) will not replace the need for at-sea surface and air patrols. 
However, VMS will allow the Coast Guard to more effectively employ its 
cutters, aircraft and boats in the enforcement of fisheries regulations 
as VMS reduces the requirement to use cutters and aircraft to detect 
incursions of closed areas. The Coast Guard still needs its resources 
to respond to the incursions of closed areas detected by VMS and to 
take appropriate enforcement action. Furthermore, VMS does not detect 
safety, gear, species, or catch violations.

    The capability VMS provides to monitor and track fishing vessels 
will enable the Coast Guard to allocate enforcement resources more 
efficiently to ensure adequate compliance with management measures 
implemented to recover and maintain healthy fish stocks.

Oil Spill Response
    Question. The Coast Guard is the federal on-scene coordinator for 
oil spill response in cooperation with state response agencies, 
scientific and technical assistance from NOAA, and the responsible 
party. How many spills of national significance exercises have you had 
since 9/11? How have these oil spill drills been impacted by 9/11? How 
many were planned or ordinarily would have occurred since then? Can 
such exercises be valuable in the national response to a terrorist 
attack on a tanker as to a marine accident?
    Answer. There has been one Spills of National Significance (SONS) 
exercise since 9/11 (SONS 2002 conducted in the Gulf of Mexico, April 
2). This exercise was impacted by the attacks of 9/11 because it was 
originally scheduled for September 2001. It was postponed and executed 
in April 2 on a smaller scale. SONS exercises are usually held 
biennially so no other exercises have been impacted. The Coast Guard is 
currently planning the fourth SONS exercise scheduled for Spring 2004 
in Southern California. Since participants in SONS 2004 include the 
same agencies that would respond to a large-scale release resulting 
from a terrorist attack, part of this exercise will explore issues 
related to intentional/terrorist attacks on tankers.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Frank Lautenberg to
                       Admiral Thomas H. Collins

Cutbacks in Non-HLS Security Missions in the Northeast
    Question. Cutbacks in Fisheries and Other Non-Homeland Security 
Missions in the Northeast--Admiral Collins, I was disturbed to learn 
that it appears there have been significant reductions of critical non-
homeland security missions in the Northeast. According to the GAO, of 
late patrol boats used for fisheries patrols in the Northeast have been 
reassigned to security patrols, and as a result fisheries patrols have 
been 40-50 percent lower than in previous years. Moreover, a November 
2002 Coast Guard internal communication directed the Coast Guard groups 
in the Atlantic Area to cut back on marine safety, enforcing 
environmental pollution requirements, and other non-homeland security 
missions in order ``to further compensate for the increased demands of 
the Coast Guard's Maritime Homeland Safety Mission.'' These are 
worrisome developments. Could you please provide more details in 
changes and reductions in non-homeland security missions in the 
Northeast. What plans do you have to restore the previous levels of 
operations?
    Answer. In fiscal year 2002, the Coast Guard saw a 40 percent drop 
in resource hours dedicated to fisheries enforcement in the Northeast. 
This was primarily due to Maritime Homeland Security surge activities 
during the first quarter (October, November, December) of fiscal year.

    Coast Guard activity levels dedicated to the fisheries mission are 
based on ensuring adequate compliance with management measures 
implemented to recover and sustain healthy fish stocks. Being a multi-
mission service allows Coast Guard units involved in dedicated homeland 
security patrols to conduct fisheries enforcement boardings. 
Additionally, the Coast Guard enjoys an excellent working relationship 
with NOAA Fisheries and many States' departments of natural resources. 
Through these relationships the Coast Guard has been able to maintain 
fisheries enforcement presence through joint operations and enforcement 
agreements with the States and through better utilization of NOAA 
Fisheries' Vessel Monitoring System (VMS) data. By allocating resources 
in this way, we have maintained surveillance without dedicating more 
Coast Guard assets, keeping them available to perform other vital Coast 
Guard missions. By using outcome measures, the Coast Guard can 
effectively measure the appropriate level of enforcement effort. Using 
such tools as joint State operations and VMS, the Coast Guard can 
allocate enforcement resources more efficiently across all missions to 
ensure adequate compliance and effective Coast Guard boardings.
    The Coast Guard also took advantage of partnerships it has 
developed with the States over the past 30 years in the boating safety 
program and made some changes in roles to fulfill our missions. The 
Coast Guard asked its State marine patrol partners, such as the Maine 
Department of Marine Resources and the Massachusetts Department of 
Fisheries, Wildlife & Environmental Law Enforcement, to assist in 
meeting our many mission requirements. Their response was outstanding 
and the States have been a tremendous help in enabling the Coast Guard 
to meet the demands of all Homeland and Non- Homeland Security 
missions.
    Coast Guard innovative enforcement and partnering with NOAA and the 
States is meant as a short-term strategy to ensure adequate fisheries 
enforcement. The long-term strategy remains increased capacity and 
capability for the Coast Guard to meet, and balance, all our mission 
needs. Administration and Congressional support of our fiscal year 2003 
appropriation, and Congressional support of the President's fiscal year 
2004 Coast Guard budget request, will ensure we acquire the added 
resources we need.

Resources to Conduct Extensive Assessments
    Question. The Maritime Transportation Security Act and the Coast 
Guard--Admiral Collins, the Maritime Transportation Security Act says 
the Coast Guard should take the lead on developing ``vulnerability 
assessments'' of not only ports and vessels, but also ``facilities on 
or adjacent to,'' U.S. waters. This broad mandate includes bridges, 
tunnels, and industrial facilities and nuclear power plants near the 
water. What resources will the Coast Guard use to conduct these 
extensive assessments? What assurances are there that the commitment of 
personnel and financial assets to this mission will not adversely 
affect the Coast Guard's non-homeland security missions?
    Answer. The Coast Guard is taking the lead on a multi-layered 
approach to addressing this broad mandate. Each layer addresses a 
portion of the Maritime Transportation Security Act of 2002 (MTSA) 
requirement and relies upon a different resource pool.

    Captains of the Port (COTPs) used the Port Security Risk Assessment 
Tool (PSRAT) to conduct an initial assessment of assets in their AORs.

    The PSRAT captures COTPs assessment of consequence, threat, 
        and vulnerabilities of specific attack scenarios against 
        assets/infrastructures.

    PSRAT results include assets/infrastructure not regulated 
        by the Coast Guard.

    COTP personnel carried out the original analysis, and 
        continue to update the results.

    Regulated facilities and vessels that may be involved in a 
transportation security incident will be required to conduct internal 
detailed vulnerability assessments under planned regulations.

    The MTSA permits the Secretary to ``accept an alternative 
        assessment conducted by or on behalf of an owner or operator of 
        the facility or vessel.''

    The Coast Guard is constructing regulations placing the 
        responsibility on the individual facility and vessel owner/
        operators to complete the detailed assessment.

    This approach is consistent with the international security 
        measures being developed by the International Maritime 
        Organization.

    The Coast Guard intends to provide guidance in the form of 
        checklists to assist the owner/operators in conducting these 
        assessments; however, the resources used to complete these 
        assessments will be provided by the owner/operators.

    Broader scope Port Security Assessments (PSAs) will be conducted at 
the nation's 55 military and economically strategic ports. These PSAs 
address elements pertaining to the security of the port as a whole; 
shared infrastructure, intermodal systems that impact the port, etc. 
They are designed to build upon local PSRAT results, TSA grant funded 
assessments, owner/operator assessments, and any other assessments 
carried out in the port.
    These assessments will be carried out in conjunction with the Coast 
Guard's non-Homeland Security missions. The Coast Guard will continue 
to balance all of its responsibilities to ensure it attends to non-
Homeland Security Missions.

Intelligence Cooperation Between USCG and USCS
    Question. Intelligence Coordination--Admiral Collins, there has 
been a large debate over intelligence sharing between the Homeland 
Security Department and other members of the intelligence community 
such as the CIA and FBI. It is frequently overlooked, however, that the 
Coast Guard and Customs Service have intelligence operations 
themselves. They have had some operational experience working together 
on the war on drugs. Are there plans to integrate these two 
``intelligence agencies'' that will be internal to the Homeland 
Security? Was their cooperation in counter-drug operations generally 
deemed successful?
    Answer. The Coast Guard will maintain an organic intelligence 
program to support all missions. Particularly as an Armed Force, the 
Coast Guard requires specialized intelligence capabilities to integrate 
with the other Armed Services' operations. Additionally, since the 
Coast Guard is a member of the National Intelligence Community, an 
organic capability is appropriate.

    The Coast Guard's broad array of intelligence capabilities supports 
all of the Coast Guard's missions; Homeland Security and non-Homeland 
Security. The Coast Guard continues to build these capabilities. 
Currently, two Maritime Intelligence Fusion Centers are being 
commissioned to support field commanders' intelligence requirements. 
Field Intelligence Support Teams are being established in key ports to 
collect and review port level intelligence. Additional analytical 
capability has been added to the Intelligence Coordination Center to 
support strategic production.
    The Coast Guard intelligence program will continue to work with 
Custom Service's intelligence program on counterdrug and other home 
land security threats, continuing our successful parntership. The Coast 
Guard works directly with Customs in High Intensity Drug Trafficking 
Areas, as partners in the regional combined law enforcement 
intelligence and investigative groups. Both the Coast Guard and Customs 
are Principal members of the El Paso Intelligence Center, sharing law 
enforcement intelligence on suspected drug trafficking and alien 
smuggling events. More recently, the partnership includes Custom's 
support to the Coast Guard's COASTWATCH program, seeking out threats to 
the homeland from those attempting to leverage international merchant 
shipping for terrorist or other criminal activity.
    Note: References to Customs Service need to be changed to BICE or 
BCBP of DHS.

Deepwater Acceleration
    Question. The Deepwater program--Admiral Collins, the deepwater 
program is important to the Coast Guard's future. It will buy dozens of 
new ships and aircraft and modernize existing assets, allowing the 
Coast Guard to fulfill its full spectrum of missions. The 
Administration is providing substantial support to the program in the 
FY04 budget, some $500 million. Even so, the program, originally 
scheduled to be implemented over 20 years, may now be stretched out. 
Given its importance, is it possible to accelerate the program? What 
levels of funding would be needed to complete it over 12-15 years?
    Answer. Yes, it is possible to accelerate the program. While we do 
not have specific figures on a 12-15 year acceleration, on 7 March 
2003, the Coast Guard, in response to the 2002 Homeland Security Act, 
released a Report to Congress on the Feasibility of Accelerating the 
Integrated Deepwater System (IDS) to 10 years. The report analyzes and 
addresses issues associated with accelerating IDS from an approximate 
20-year to a 10-year implementation schedule. This report provides the 
best estimate of funding levels to accelerate IDS.

    The report provides the following conclusions:

    A 10-year IDS implementation is feasible.

    Acceleration expedites improvements in capabilities and 
        multi-mission readiness.

    Acceleration increases the Coast Guard's Homeland Security 
        readiness through a layered maritime homeland defense strategy 
        and improved interoperability with Department of Defense and 
        other Department of Homeland Security agencies.

    Acceleration provides over 900,000 additional mission hours 
        over the 20-year plan for direct support of maritime homeland 
        security and other non-maritime Coast Guard missions (e.g., 
        search and rescue, fisheries enforcement).

    Executing the acceleration plan would come at significant 
        increased cost in initial procurement years.

    The IDS contracting strategy was chosen based on its flexibility 
and the contract can accommodate variable funding levels to advance the 
implementation plan from approximately 20 to 10 years. Below are the 
estimated capital acquisition funding levels needed to ``build out'' 
IDS in 10 years. These figures reflect ``then-year dollars''.

 
------------------------------------------------------------------------
                    FY                              10-Year ($M)
------------------------------------------------------------------------
02                                          320
03                                          478
04                                          500
05                                          1,892
06                                          1,663
07                                          1,506
08                                          1,472
09                                          1,428
10                                          1,226
11                                          988
------------------------------------------------------------------------

                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to
                       Admiral Thomas H. Collins

Search and Rescue Funding
    Question. Search and Rescue--Admiral, as I (Senator Cantwell) 
understand, the Pacific Northwest region is one of the busiest regions 
in the country for the Coast Guard. We are a region of ocean 
enthusiasts--and we enjoy recreational boating in vessels and water 
craft of all shapes and sizes. With the upcoming transition to the 
Department of Homeland Security, are you willing to commit today to 
increase operational funding for search and rescue missions in District 
13 to get us closer to the pre-9/11 levels?
    Answer. The Coast Guard will not sacrifice the Search and Rescue 
mission in any area or region of the country. The Search and Rescue 
mission and saving lives remains as the Coast Guard's number one 
priority alongside protecting America's ports and waterways from a 
future terrorist attack. The Search and Rescue mission will continue to 
receive full funding and resource hours necessary to meet mission 
demand. Continuing our strong SAR performance is anticipated from 
fiscal year 2003 and fiscal year 2004 budget initiatives including 
Rescue 21, Deepwater, and the Response Boat Small and Medium 
acquisition projects. From an exclusively Search and Rescue 
perspective, District 13 is already at pre-9/11 capabilities.

Sustained Emphasis on Vessel Safety Programs
    Question. Marine Safety--The Coast Guard has an important statutory 
mission to inspect vessels to ensure compliance with federal and 
international vessel safety standards. For example, the Coast Guard 
inspects ferry vessels on a regular basis. The Coast Guard also 
inspects commercial vessels in order to improve marine safety. Can you 
ensure that there will be no reductions in Coast Guard vessel safety 
programs in Region 13 this year?
    Answer. The Coast Guard, including the Thirteenth Coast Guard 
District, remains committed to performing all regulatory vessel safety 
inspections. There has been no change in Thirteenth District policy 
regarding regulatory vessel safety programs and there are no plans to 
change the scope of any vessel safety program there. This is 
demonstrated by the fact that the number of Thirteenth District 
inspections conducted in the first week of March 2003 (the first week 
since the transition to the Department of Homeland Security) is 
consistent with the number of inspections conducted during the same 
time frame for the previous three years.

Oil Spill Prevention in the Straits of Juan de Fuca
    Question. Oil Spill Prevention--The Strait of Juan de Fuca is a 
major transit corridor for tanker vessels containing petroleum products 
and other liquid cargo. Following the 1989 Exxon Valdez disaster, many 
in Washington State have expressed concern about the possibility of a 
major oil spill. With the loss of the Tanker Vessel Prestige off of the 
coast of Spain and the aging of the tanker vessel fleet, these concerns 
have grown. As you know, the State of Washington has taken a leading 
role among the states in working to avoid oil spills. In May 2001, 
Governor Locke entered into a memorandum of agreement with the Coast 
Guard to expand state and federal efforts in the areas of prevention 
and response. With the planned transfer to DHS, do you anticipate any 
delays or budget related slowdowns in efforts to move forward with oil 
spill prevention and response?
    Answer. No, the Coast Guard does not anticipate our transition into 
the Department of Homeland Security (DHS) to cause any delay in our 
efforts to improve pollution prevention within Puget Sound. As an 
aside, the fiscal year 2003 appropriation specifically provided $1.6 
million targeted for Puget Sound pollution prevention. The Captain of 
the Port (COPT) of Puget Sound has submitted recommendations that are 
still being cleared internally within the Coast Guard. Once final 
decisions are made regarding the most effective use of these funds, the 
Coast Guard will move quickly to execute the plan and provide the 
detailed spend plan to Congress.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Ernest F. Hollings to
                           JayEtta Z. Hecker

    Question 1. The Coast Guard is in the middle of reinventing itself 
to take on new responsibilities for homeland security--such as those 
under the new Maritime Transportation Security Act--even as it moves to 
DHS. Doesn't the move to DHS create additional risks in terms of the 
ability of the Coast Guard to keep all of its missions intact?
    Answer. Many of the 22 agencies transferred to DHS, including the 
Coast Guard, have missions that are directly related to homeland 
security and other missions that are not at all related to homeland 
security. For example, the Coast Guard's missions of protecting the 
marine environment and our domestic fishing grounds are not homeland 
security missions--although they are vitally important to the nation. 
The Congress has made it quite clear that it values all of the Coast 
Guard's missions and expects the Secretary of DHS to maintain these 
missions even as the department focuses on its primary mission of 
homeland security. However, there is always a risk that the Coast 
Guard's non-security missions may not receive adequate funding, 
attention, visibility, and support in a department that is under 
tremendous pressure to succeed in its primary mission. To mitigate this 
risk, the Congress may wish to take steps to better ensure that DHS 
dedicate sufficient management capacity and accountability to execute 
the Coast Guard's non-security missions. We have recommended that the 
Coast Guard adopt a comprehensive reporting framework that will allow 
the Congress to better oversee the execution of the agency's missions 
and provide a basis for sound budget and policy decisions.

    Question 2. While the FY 2004 budget request indicates an increase 
of the resources for search and rescue and fisheries enforcement, there 
have been indications that resources (on an hourly basis) for these 
missions are being diverted for port security duties in certain 
districts if not nationally, and that resources are below pre-9/11 
levels. Is this accurate?
    Answer. Activity levels (as of the quarter ending 12/31/02) for the 
search and rescue (SAR) mission were consistent with pre-9/11 levels. 
While some SAR personnel and boats were diverted to homeland security 
functions immediately after 9/11, they were returned to SAR activities 
within a few months. There was no discernable impact on search and 
rescue performance measures, since the terrorist attacks occurred after 
the recreational boating season had ended; thus, SAR activity was 
relatively low. The activity level for fisheries enforcement is down 
about one-third from its pre-9/11 levels. Part of this reason for this 
can be attributed to the diversion of Coast Guard cutters and aircraft 
being diverted to other activities related to homeland security. Also, 
the Coast Guard attributes past budget constraints to this decline as 
evidenced by the necessity to retire several cutters and aircraft in 
2001 and 2002.

    Question 3. The Coast Guard is in the middle of upgrading its 
National Distress System--which it has sorely needed to ensure that 
communication gaps for carrying out rescues of mariners are filled. 
Will the move to DHS speed up this upgrade, slow it down, or not affect 
it at all? When will the National Distress system upgrade be done?
    Answer. The Coast Guard plans to complete this project by the end 
of FY 2007 and is currently on track to do so. The future course of 
this procurement under DHS is unknown.

    Question 4. What is the Coast Guard's plan for filling the gaps 
left by sending assets to the Persian Gulf? What is the long-term 
impact of increased operating tempo on assets left behind?
    Answer. GAO has not seen the Coast Guard's plan, if one exists, for 
filling the mission gaps left by sending some of its assets to the 
Persian Gulf. We have recommended, most recently in a March 12, 2003 
testimony, that the Coast Guard, as part of developing a more 
comprehensive blueprint for managing and balancing its missions, 
develop contingency plans for accomplishing its ongoing mission 
responsibilities in the event that military or homeland security 
functions take precedence for a period of time. We pointed out in our 
November 12, 2002 report that the Coast Guard should devote more effort 
to establishing public and private partnerships as away of effectively 
and efficiently meeting its mission responsibilities.

    Question 5. The only reference in the Coast Guard's written 
testimony to the traditional missions of the Coast Guard casts them as 
important for security. That already is a warning sign to me that Coast 
Guard missions must be linked to ``security'' to have any priority in 
DHS. Can you comment on that?
    Answer. As we have said in numerous testimonies on this matter, 
there is always a risk that the Coast Guard's non-security missions may 
not receive adequate funding, attention, visibility, and support in a 
department that is under tremendous pressure to succeed in its primary 
mission. Again, to mitigate this risk, the Congress may wish to take 
steps to better ensure that DHS dedicate sufficient management capacity 
and accountability to execute the Coast Guard's non-security missions. 
We have recommended that the Coast Guard adopt a comprehensive 
reporting framework that will allow the Congress to better oversee the 
execution of the agency's missions and provide a basis for sound budget 
and policy decisions.

    Question 6. If a major domestic security incident occurs, will the 
Coast Guard resources be diverted away from other missions? If this is 
a sustained shift of resources, how can the Coast Guard realistically 
carry out its non-homeland security missions in an adequate manner?
    Answer. The degree to which Coast Guard assets would be diverted 
after a terrorist incident depends on the severity and nature of the 
incident. If it is severe and presents a threat to the ports throughout 
the country, as it was after the 9/11 attacks, there is little doubt 
that Coast Guard resources would be diverted, much like they were 
immediately after 9/11. If Coast Guard resources are diverted for 
homeland security functions for an extended time, this will, by 
definition, impact substantially on the Coast Guard's ability to carry 
out its responsibilities for non-security missions. The Coast Guard has 
only a finite set of deepwater resources, for example, and if its 
cutters and aircraft are performing homeland security functions, they 
cannot be also fulfilling their normal missions. Missions that would 
likely be most affected, if resources are diverted, are its law 
enforcement missions--drug and migrant interdiction and fisheries 
enforcement. Deepwater assets are used extensively for these missions. 
Through increased partnering efforts with other maritime stakeholders, 
the Coast Guard can mitigate the diminution of its non-security 
missions, but partnering alone may not be an enduring solution.

    Question 7. The Coast Guard has a wide variety of stakeholders that 
rely on the Coast Guard, including other federal agencies such as NOAA, 
state and local governments, industry, and private citizens. If the 
Coast Guard can't carry out its missions, should we be looking to these 
other entities to take on those duties? Didn't the recent communication 
to the North Atlantic commands in fact call on them to do just that?
    Answer. We and others have suggested that the Coast Guard devote 
more effort to partnering with the public and private sectors to 
accomplish its mission responsibilities. In a 1997 report to the 
Congress, for example, we recommended that the Coast Guard look at 
numerous options to more effectively and efficiently carry out its 
responsibilities, including privatizing some of its functions. To date, 
the Coast Guard has not actively pursued these recommendations, even 
though the recommendations are perhaps more relevant now than they were 
in 1997. As we testified in April 2003, the Coast Guard is operating in 
a new environment, and a candid acknowledgement--that it cannot be 
``all things to all people''--is a necessary first step in the process 
of partnering in earnest to share its responsibilities with other port 
stakeholders.

    Question 8. The new DHS is adopting department-wide administrative 
policies that will alter how the Coast Guard has done business in the 
past. For example, I understand that a DHS policy on procurement is in 
progress. How will such a policy impact one of the Coast Guard's major 
initiatives--its $17 billion Deepwater acquisition project?
    Answer. Because such a procurement policy is still being developed, 
it is not possible to know its potential effect on the Deepwater 
project. However, The National Strategy for Homeland Security 
recognizes the important role that the Coast Guard plays in protecting 
our nation's maritime borders and cites as one of the department's top 
priorities the continued support for Deepwater Project .

    Question 9. A recent GAO report on the Deepwater Program identified 
serious concerns regarding the Coast Guard's ability to (1) keep costs 
down through ample competition opportunities and (2) conduct 
appropriate oversight of this, the largest and most complex acquisition 
in Coast Guard's history. Please respond to these concerns.
    Answer. In a 2001 report and subsequent testimonies on the 
Deepwater project, GAO discussed a number of concerns with the project, 
namely the agency's ability to (1) control costs, especially using an 
untried and unique contracting approach never before used for a 
procurement of this type, (2) obtain a steady funding stream of $500 
million in 1998 dollars for the next 2 decades, (3) manage and oversee 
the contract, including ensuring that the government get the best value 
for its investment, and (4) ensure that proven technologies are 
incorporated into assets procured in the later years of the project. 
The Coast Guard has taken several key steps to address our concerns, 
and as the project proceeds, we will evaluate the project to see if all 
of our concerns have been satisfied.

    Question 10. Could the new DHS policy have any impacts on the 
method being used for the Deepwater Procurement--which uses a single 
``Systems Integrator'' for subcontracting rather than having the Coast 
Guard compete out contracts over the expected 30-year life of the 
program?
    Answer. The Deepwater contract with the systems integrator was 
signed last year for a period of 30 years. While the contract does 
contain provisions for terminating the contract under certain 
circumstances, such as non-performance, the Coast Guard does not 
anticipate that this will happen or that DHS acquisition policy would 
require changing the contract agreement or approach.

                                  
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