[Senate Hearing 112-233]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-233
 
               THE U.S. COAST GUARD BUDGET AND OVERSIGHT

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

                                HEARING

                               before the

     SUBCOMMITTEE ON OCEANS, ATMOSPHERE, FISHERIES, AND COAST GUARD

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 23, 2011

                               __________

    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 TWELFTH CONGRESS

                             FIRST SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK L. PRYOR, Arkansas              JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri           ROY BLUNT, Missouri
AMY KLOBUCHAR, Minnesota             JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico                PATRICK J. TOOMEY, Pennsylvania
MARK WARNER, Virginia                MARCO RUBIO, Florida
MARK BEGICH, Alaska                  KELLY AYOTTE, New Hampshire
                                     DEAN HELLER, Nevada
                    Ellen L. Doneski, Chief of Staff
                   James Reid, Deputy Chief of Staff
                   Bruce H. Andrews, General Counsel
   Brian M. Hendricks, Republican Staff Director and General Counsel
            Todd Bertoson, Republican Deputy Staff Director
                Rebecca Seidel, Republican Chief Counsel
                                 ------                                

     SUBCOMMITTEE ON OCEANS, ATMOSPHERE, FISHERIES, AND COAST GUARD

                     MARK BEGICH, Alaska, Chairman
DANIEL K. INOUYE, Hawaii             OLYMPIA J. SNOWE, Maine, Ranking
JOHN F. KERRY, Massachusetts         JOHN ENSIGN, Nevada
BILL NELSON, Florida                 ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington           JOHNNY ISAKSON, Georgia
FRANK R. LAUTENBERG, New Jersey      JOHN BOOZMAN, Arkansas
AMY KLOBUCHAR, Minnesota             MARCO RUBIO, Florida
MARK WARNER, Virginia                KELLY AYOTTE, New Hampshire


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 23, 2011....................................     1
Statement of Senator Begich......................................     1
Statement of Senator Rockefeller.................................     3
    Prepared statement...........................................     4
Statement of Senator Ayotte......................................     5
Statement of Senator Lautenberg..................................     5
Statement of Senator Snowe.......................................    25

                               Witnesses

Admiral Robert J. Papp, Jr., Commandant, U.S. Coast Guard........     6
    Prepared statement...........................................     9

                                Appendix

Response to written questions submitted to Admiral Robert J. 
  Papp, Jr. by:
    Hon. John D. Rockefeller IV..................................    43
    Hon. Mark Begich.............................................    47
    Hon. Bill Nelson.............................................    49
    Hon. Olympia J. Snowe........................................    51
    Hon. Roger F. Wicker.........................................    53


               THE U.S. COAST GUARD BUDGET AND OVERSIGHT

                              ----------                              


                        THURSDAY, JUNE 23, 2011

                               U.S. Senate,
Subcommittee on Oceans, Atmosphere, Fisheries, and 
                                       Coast Guard,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:03 a.m. in 
room SR-253, Russell Senate Office Building, Hon. Senator 
Begich, Chairman of the Subcommittee, presiding.

            OPENING STATEMENT OF HON. MARK BEGICH, 
                    U.S. SENATOR FROM ALASKA

    Senator Begich. Good morning, we will have a couple members 
joining us momentarily. They are running a little late. But, as 
ships have to run on time, so should committees. So, thank you 
very much.
    I'll make a few comments, and depending on who makes it 
here on time, they will have an opportunity to say some 
comments, too.
    Again, good morning, and I welcome Admiral Robert Papp, the 
Commander, Commandant of the U.S. Coast Guard, and thank him 
for testifying before the Committee today.
    Since the very earliest days of our nation, the U.S. Coast 
Guard has safeguarded our maritime interests, and our ports, at 
sea, and our interior waterways, and on the Great Lakes, and 
around the globe. They protect the Nation's maritime economy 
and environment, defend our maritime borders, and save those in 
peril on our waters. They're Americans' maritime guardian, who 
is Semper Paratus--``always ready'' for the hazards and 
threats.
    Today the U.S. Coast Guard has nearly 42,000 men and women 
on active duty, and constitutes a unique multi-mission military 
maritime which carries out an array of civil and military 
responsibility, and touches almost every facet of the U.S. 
maritime environment.
    Last year the Coast Guard responded to more than 22,000 
search and rescue cases, and saved more than 4,000 lives; 
inspected over 250,000 vessels. The Coast Guard saved millions 
of dollars in property; seized hundreds of tons of cocaine; 
stopped thousands of undocumented migrants for illegally 
entering the country; identified 61 individuals associated with 
terrorism; and deployed forces overseas in support of our 
troops in Iraq and Afghanistan.
    The Coast Guard conducted humanitarian missions in Haiti, 
led the response to the Deepwater Horizon oil spill, and 
investigated thousands of other pollution incidences. Last year 
in Alaska alone, the Coast Guard in Alaska responded to 646 
search and rescue cases, saved 138 lives, and aided 932 persons 
in distress.
    In my state, we are proud to be the home of the nation's 
largest Coast Guard based in Kodiak. And with the cutters, air 
stations, and small boat stations throughout the state, we 
think of the Coast Guard as Alaska's navy.
    We should honor the every day service and sacrifice of its 
men and women by ensuring they have the tools they need to do 
all we ask of them, to make sure they're mission-ready. Last 
year, Congress took an important step toward this when it, in a 
bipartisan fashion--thanks in large part to the leadership of 
Chairman Rockefeller, our immediate past Chair of this 
subcommittee, Senator Cantwell, and all our full and 
subcommittee Ranking Members, Senators Hutchison and Snowe--we 
finally enacted updated authorizing legislation for the 
service.
    The Coast Guard Authorization Act of 2010 provide the Coast 
Guard with important statutory authorities they've needed for 
some time. The provisions will allow the service to modernize 
its command structure, improve its acquisition practices and 
financial management, and make a number of improvements to the 
lives of Coast Guard personnel and their families, all of which 
are integral to the 21st century Coast Guard.
    As Chairman of the Subcommittee on Oceans, Atmosphere, 
Fisheries, and Coast Guard, I'm looking forward to introducing 
and working on a new authorization bill that continues this 
progress toward a modern, more efficient, and highly agile 
Coast Guard.
    But there's more to the mission's readiness than 
modernization command structures and updated statutory 
authorities, and that's one of the reasons why I've called for 
this budget and oversight hearing. The President's request for 
Coast Guard's Fiscal Year 2012 budget represents a modest 
increase in funding of 1 percent. In a time when budgets are 
shrinking, and we are finding ways to tackle the nation's 
deficit, this is a victory.
    However, many issues remain unaddressed about how to 
sustain the Coast Guard's core capabilities at a time when we 
continually ask more of them. Case in point: I'm very concerned 
about the Coast Guard's mission readiness when we don't 
properly equip them. This is particularly true when we look at 
the Nation's icebreaker fleet. With one of its two heavy 
icebreakers slated for decommission this year, and the others 
not coming out of the shipyard and back into service until at 
least 2013, the Coast Guard finds itself in a serious 
operational gap. Having no heavy icebreaker capability for 2 
years or more limits our ability to safeguard our sovereignty 
and our interest in the polar regions--and that's putting it 
mildly.
    How can we expect the Coast Guard to conduct their varied 
maritime safety, security and stewardship roles in a remote 
area like the North Slope, when they lack the operational 
assets and the infrastructure to do so?
    Some have also expressed concerns that the Coast Guard is 
slowly losing some of the autonomy and latitude it needs to 
operate as a flexible, agile, and responsive multi-mission 
agency. The Department of Homeland Security, in which the Coast 
Guard currently operates, seems in recent years to have 
developed an expectation that the Coast Guard can and should 
operate just like any other department's subordinate agencies. 
I'm concerned that this reduced autonomy will impact the 
service's ability to operate effectively and deliver all that 
we have to come to expect.
    Admiral Papp, I look forward to hearing your testimony. I 
want to, before we start with your opening statement, I'm going 
to go ahead and ask the members here if they have any opening 
comments they'd like to make.
    Senator Rockefeller.

           STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    The Chairman. Thank you, Mr. Chairman, and I'm particularly 
happy to be with you, Admiral, and to be with you, Mr. 
Chairman. I just, whenever you're chairing a hearing, I just 
like to sort of being around to watch you operate.
    Senator Begich. That makes me nervous.
    [Laughter.]
    The Chairman. You're very good. You're calm, very 
thoughtful, very good.
    And I feel exactly the same way you did, or, do--what you 
said. I mean, it's this constant, this constant pull between 
needs, and how much attention is the Congress paying? And that 
goes back many, many years. And we, I think Chairman Begich and 
I would both feel that what we're trying to do is to upgrade--
and we have done--is upgrade the attention that was just paid 
to the Coast Guard, make people more aware of what it's done. I 
mean, save 4,300 lives, seize more than 90 metric tons of 
cocaine, interdicted more than 2,000 undocumented migrants. 
You're called on to do all things at all times, and people 
expect you will be there. You're kind of a safety net--a 
psychological and physical and actual safety net.
    And yet, we don't fund you properly. You're not a stark 
enough part of our vocabulary, of our subconscience. You are--
of those of us in here, Kelly Ayotte, Senator Ayotte, and 
Senator Begich and myself--but, it's discouraging. And now 
we're going into this period of downturn on budgets, and that's 
even more discouraging, because you've got a couple of 45-year-
old ships doing what they really can't do any longer--although 
global warming seems, I guess, is melting the ice a little bit, 
so, but I'm not sure that helps enough.
    So, I want to say two things. One is, I'm tremendously 
proud of your predecessor, I'm tremendously proud of you. 
Everything in a situation like that, where people feel at risk, 
or they feel unattended to financially and psychologically and 
otherwise by the funding body, depends on leadership. And you 
clearly have it, just like your predecessor had it. And so, I'm 
very grateful for you.
    I also want to profoundly apologize to the Chairman, who 
may or may not forgive me, because we're having in the Finance 
Committee, which started 10 minutes ago, we're going to decide 
what to do about entitlements on, in health care. And that is a 
viciously nasty and important subject. So, I will have to 
leave. But I didn't want to come over to the Hill without 
stopping in to pay my respects to you, to the work that your 
people do--you have 200 people tucked away in Huntington, West 
Virginia who are working all the time--and, you know, the 
difference that you make to Senator Begich's part of the world 
is just indescribable.
    So, I pay you my respects. I, we'll do our very, very best 
to get every single dime that we can for you, because the Coast 
Guard deserves it. Your men and women deserve it. You deserve 
it. And we're not in the habit of doing what we ought to be in 
the habit of doing.
    So, with that, Mr. Chairman, I conclude my remarks, and 
thank you for your chairmanship.
    [The prepared statement of Senator Rockefeller follows:]

             Prepared Statement of John D. Rockefeller IV, 
                    U.S. Senator from West Virginia

    Good morning. As one of our Nation's primary first responders, the 
Coast Guard is vital to our national security, economic security, 
public safety, and environment.
    When I turn on the television or read the paper, I often see the 
courageous acts of our Coast Guard men and women. Just last year they:

   saved more than 4,300 lives,

   seized more than 90 metric tons of cocaine bound for our 
        streets, and

   interdicted more than 2,000 undocumented migrants on the 
        high seas attempting to illegally cross our borders,

   in addition to countless other acts protecting and defending 
        our homeland.

    They did all of this last year, while leading the Federal response 
to the Deepwater Horizon oil spill, one of the worst environmental 
disasters in our Nation's history.
    Following the devastating earthquake in Haiti, the Coast Guard was 
the first on the scene- immediately provided rescue and relief, and 
again reinforced its motto of Semper Paratus, or ``Always Ready.'' 
These are truly remarkable accomplishments that underscore 
responsiveness, flexibility, and professionalism-all cornerstones of 
the U.S. Coast Guard.
    As a nation, we depend on the Coast Guard to keep us safe and 
secure, but their ability to do that rests on their access to resources 
and other support necessary to perform their missions.
    They can't do things like respond to the biggest oil spill in U.S. 
history and a massive earthquake in Haiti; conduct search and rescue 
operations, and countless other things--all on a shoestring budget.
    I am concerned that the Coast Guard does not have the necessary 
funding to do everything we expect them to do. An aging fleet of ships 
and aircraft need to be replaced, numerous shore units, including boat 
houses, are crumbling and the Coast Guard does not have the money to 
fix it.
    I share Chairman Begich's concerns that the Coast Guard's limited 
resources are affecting its operations in our polar regions, which are 
vital to our national security and its traditional search and rescue 
operations.
    I am concerned that the National Oceanic and Atmospheric 
Administration (NOAA), which is under the Subcommittee's jurisdiction, 
is also underfunded and unable to fulfill its obligations to monitor 
our polar regions, especially weather. This will not only affect 
Alaska, but every community in our country because we all depend on 
accurate weather data.
    The potential reorganization of the Department of Commerce has me 
deeply concerned that an agency as critical as NOAA will get lost in 
the shuffle and be placed in another department where it must compete 
for limited resources. Further, it will affect its ability to fulfill 
its vital mission.
    The Coast Guard Authorization Act of 2010, enacted this past 
October, provided the Coast Guard the essential tools to successfully 
carry out its missions by improving its organizational flexibility, 
updating its command structure, and reforming its acquisition 
practices. I am proud of this legislation. And I look forward to 
working across the aisle and sponsoring another Coast Guard 
Authorization bill that will give the Coast Guard the crucial resources 
it needs to carry out its missions successfully.
    Today, we welcome Admiral Robert Papp, Commandant of the U.S. Coast 
Guard. Thank you for your exceptional leadership in these challenging 
times.

    Senator Begich. Thank you very much, Senator Rockefeller.
    And, Senator Ayotte, do you have any opening that you would 
like to give?

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. I would just say thank you, Chairman 
Begich, for holding this hearing.
    And, thank you, Chairman Rockefeller, Senator Lautenberg.
    Admiral, I certainly just want to express my appreciation 
for your leadership, and our thanks to all the men and women 
who serve underneath you. And certainly, you have an important 
role to play in New Hampshire on our coastal waters, and with 
respect to our overall safety and national defense. So, thank 
you very much for coming before the Committee today, and I look 
forward to your testimony. And, thank you again for your 
service.
    Senator Begich. Senator Lautenberg.

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

    Senator Lautenberg. Thanks, Mr. Chairman.
    And thanks, Admiral Papp, for your service, and all of your 
colleagues in the Coast Guard.
    The motto of the Coast Guard, we need to be reminded, is 
Semper Paratus. It translates to ``Always Ready.'' And in this 
agency, one of five branches of the American armed services, 
lives up to its motto each day. Very often I will see it from 
the window of my apartment, which is on the Hudson River in the 
town of Cliffside Park, and it would be a long way to wave, but 
I always salute them when I see them passing by.
    Simply put, the men and women of the Coast Guard are 
America's eyes and ears on the seas, and the American people 
remain safe because of them.
    It goes beyond, way beyond that. I mean, the fact that we 
have the kind of marine system that permits private access to 
the waters, that protects them. They're there for rescue. 
They're there for every, each and every cause. And they play a 
critical role in protecting our shores, especially in my home 
state of New Jersey, which remains a tempting--said by the FBI, 
the most tempting--target for terrorist attack in our country. 
So, we're concerned about the ability of the Coast Guard to 
continue to do the things that it's capable of as, we make the 
resource less complete.
    So, it's not just that we're protecting the people there, 
the lives of the families. We have chemical plants. We've got 
all of these things. But, it also protects our economy. The 
Port of New York and New Jersey, the largest on the East Coast, 
handled more than $140 billion in cargo last year. So, make no 
mistake--the brave men and the women of the Coast Guard are 
always there when we need them, and they never let us down.
    Last year when a massive earthquake struck Haiti, the Coast 
Guard was there evacuating the injured, delivering supplies, 
and offering hope to victims. And when oil was gushing into the 
Gulf, the Coast Guard was there, working around the clock to 
contain the spill, clean up the mess, and save those 
communities.
    President Obama recognizes the value of the Coast Guard, 
and his proposed budget takes positive steps to maintain the 
Coast Guard's readiness, including funding to modernize its 
aging fleet and bolster its ability to respond to disasters.
    And I'm also pleased that the budget includes funding to 
rebuild the dilapidated Pier 4 at the Coast Guard's training 
center in Cape May, New Jersey. Now, this facility supports the 
patrol boats that protect our coastline, trains our Coast Guard 
recruits, and I hope that we can provide the resources the 
training center needs and deserves.
    The fact is, the Coast Guard is constantly put at the back 
of the line for resources, constantly forced to do more with 
less. There are always new assignments coming out--whether it's 
manifests, whether it's channel identities, whether it's there 
and searching for contraband, or trying to stem the tide of 
refugees trying to gain our shores--it doesn't matter. The 
Coast Guard's always there.
    And now what's happening, the House Republicans are trying 
to compound the problem by giving the Coast Guard even fewer 
resources. And I'd like to ask those in the House who represent 
districts in coastal states whether they'd like to individually 
see State X, Y, or Z with fewer Coast Guard personnel there. 
Well, I don't think it would pass the taste test.
    And we need to help the Coast Guard replace its aging 
fleet, the program that funds port security grants. We've got 
to fight as hard as we can to defeat those cuts. And I look 
forward to hearing from our distinguished Admiral, Admiral 
Papp, on these cuts that would affect the Coast Guard's ability 
to be Always Ready when we need it.
    And I wouldn't hold back if I was you, Admiral Papp. Thank 
you very much for your service.
    Senator Begich. Thank you, Senator Lautenberg.
    Admiral Papp, thank you very much, again, for joining us 
today, and having this opportunity to talk about your budget, 
and oversight on some of the needs that you have. Your opening 
statement.

  STATEMENT OF ADMIRAL ROBERT J. PAPP, JR., COMMANDANT, U.S. 
                          COAST GUARD

    Admiral Papp. Thank you, Chairman Begich. It's always good 
to see you again.
    Senator Lautenberg, always a pleasure.
    I'm very honored that Senator Rockefeller came in to make a 
statement.
    And, Senator Ayotte, welcome to you, and I'll look forward 
to seeing Senator Snowe when she arrives.
    I want to thank you for the opportunity to be here today, 
and for your unwavering support of our United States Coast 
Guard--especially for our hardworking Coast Guard men and 
women. It continues to be my highest honor and privilege to 
lead these men and women, and represent them.
    It has been just over a year since I assumed my watch as 
the Commandant, so even though my appearance before the 
Subcommittee today is labeled as a budget hearing, I also want 
to use this opportunity to tell you what we've accomplished, 
what our challenges are, and to do my most important job, which 
is to tell you what the Coast Guard needs to continue 
performing all our challenging maritime missions.
    So, first, what we've accomplished: we've performed our 
most important service to the country by sustaining front line 
operations. Our citizens witnessed the Coast Guard in action 
like never before this year, responding to the Deepwater 
Horizon oil spill and explosion. While we were conducting that 
unprecedented response, thousands of other Coast Guardsmen were 
performing all our other persistent missions, just like they're 
doing today.
    The National Security Cutter Bertholf just completed her 
first Alaska patrol, a service which is vital to ensuring the 
sustainment of the Alaska commercial fishing industry, 
protection of its fishermen, and of our fishery stocks.
    As I speak, the medium icebreaker HEALY has loaded a NASA 
science team at Dutch Harbor, and is sailing on Thursday for a 
6-month patrol to study the impact of the changing conditions 
in the Arctic.
    In the Arabian Gulf, 700 Coast Guardsmen, including six 
patrol boats and a Port Security Unit, are protecting the oil 
platforms that provide nearly all of the revenue of the country 
of Iraq.
    And throughout the flood-ravaged Midwest, Coast Guardsmen 
are assisting to protect our citizens and their properties.
    Now, shifting gear from operations to authorizations, we've 
used the authority that you so generously provided us in the 
2010 Coast Guard Authorization Act to move forward with 
organizational realignment, acquisition reform, and mariner 
safety enhancement. We're continuing to steady the service by 
improving the way we deliver mission support to our operational 
forces; we've realigned headquarters directorates; we've 
established new logistics and service centers and base 
commands. These efforts will provide our operational forces 
with one-stop shopping for all their mission support needs.
    Our acquisition program has also made great strides. We 
have a well-trained workforce who now has taken on the 
responsibility of systems integrator for all our acquisition 
projects. And we continue to implement our Marine Safety 
Performance Plan. We're building capacity and competency by 
providing direct officer commissions to Maritime Academy 
graduates. In fact, on Monday we commissioned 13 new Kings 
Point graduates as Coast Guard officers.
    But there are challenges out there. As a prudent sailor, I 
have always kept a weather eye on the horizon, and today I see 
storm clouds forming. I'm well aware of our Nation's current 
economic and budget challenges, but our Coast Guard is also 
facing significant challenges.
    Our most pressing challenge is recapitalizing our major 
cutter fleet--the high endurance and medium endurance cutters. 
Ships that were designed to last a quarter century are now 
approaching a half century of service life--50 years of waves, 
wind, and salt spray; 50 years of performing concentrated, 
punishing at-sea operations has taken its toll. We're losing 
hundreds of patrol days each year due to constant breakdowns.
    When these legacy cutters are on patrol, they're less 
effective because they lack state-of-the-art systems. And, as a 
long-time ship captain, it greatly concerns me that we're 
asking our Coast Guard men and women to sail aboard ships that 
were basically World War II-era designs. They deserve better.
    Now, we've addressed block obsolescence of Coast Guard 
cutters before. Nearly 50 years ago, during a speech to a joint 
session of Congress, just a few hundred yards from where we sit 
today, President John F. Kennedy challenged our Nation to send 
an American to the moon. At the same time, Coast Guard naval 
engineers were busy designing the venerable 210-foot medium 
endurance cutters. The first of that class, the cutter 
Reliance, was commissioned just 3 years later.
    In March 1969, just 4 months before the heroes of Apollo 11 
landed on the moon, the Coast Guard commissioned the cutter 
Morgenthau--the eighth of our Hamilton Class high endurance 
cutters. Morgenthau's crew deployed a short time later to 
Vietnam. Forty-two years later, Morgenthau is still in service. 
But she struggles to serve our critical national security 
interests.
    The newest of our Hamilton Class cutters, Midgett, which is 
40 years old, recently entered a routine dock-side maintenance 
period. Excessive hull deterioration was discovered, so we're 
cropping out and replacing wasted steel throughout her hull 
just so she can be safe enough to sail. That's why we need at 
least eight National Security Cutters.
    But, because of your support, I have some good news to 
report. We're making steady progress in replacing our 12 
Hamilton Class cutters with eight National Security Cutters. 
Two of the planned eight NSCs--Bertholf and Waeshe--have been 
delivered. Builder's trials have started on the third--the 
cutter Stratton. And this Monday, the shipyard started cutting 
steel on the cutter number 4, the new Coast Guard Cutter 
Hamilton. And I expect to award the contract for the fifth NSC 
this summer.
    But our fleet of existing medium endurance cutters--those 
210s that I talked about, designed 50 years ago--by the time 
they're replaced, they're going to be 60 years old. This is why 
the Offshore Patrol Cutter is such an important project for our 
service. We're working to finalize the specifications on the 
Offshore Patrol Cutter and put out a request for preliminary 
design and construction proposals.
    This momentum must continue. Gaps in funding 
recapitalization are costly; they jeopardize our ability to 
protect the nation's high seas and sovereignty. That's why I'm 
requesting over $1.4 billion to continue our recapitalization 
effort, including funding for major cutters, fast response 
cutters, response boats, maritime patrol aircraft, and 
sustainment of our aging ships and aircraft.
    The ice diminishing Arctic also presents a major challenge. 
An entire new ocean is emerging, prompting an increase in human 
activity, including commercial vessel traffic, eco-tourism, and 
exploration activities. We're in the process of conducting a 
High Latitude Study to inform our future needs, but we need to 
ensure we are preparing to meet our responsibilities in this 
fifth ocean the same way we've done and met them in the other 
four.
    As I said in the beginning, my most important job is to 
tell you what I need. And today, I'm telling you that the 
Fiscal Year 2012 budget is the baseline budget for we need. We 
need every dollar, every ship, every plane, every shore station 
that it funds. I've made some tough tradeoffs in this budget. 
I've directed management efficiencies and administrative 
reductions totaling over $100 million. But I cannot afford to 
cut any more without jeopardizing our most valuable service to 
the nation--front line operations.
    So, thank you for this opportunity to come up here and tell 
you about our needs and our challenges, and I look forward to 
answering your questions.
    [The prepared statement of Admiral Papp follows:]

          Prepared Statement of Admiral Robert J. Papp, Jr., 
                      Commandant, U.S. Coast Guard

Introduction
    Good morning, Mr. Chairman and distinguished members of the 
Subcommittee. Thank you for the continuing support you have shown to 
the men and women of the United States Coast Guard.
    I am here today to discuss the Coast Guard's Fiscal Year (FY) 2012 
Budget Request. I would also like to take this opportunity to discuss 
the Coast Guard's value and role, some of our recent operations, 
including our response to the BP Deepwater Horizon Oil Spill, and the 
current budget environment.
    For more than 220 years, the U.S. Coast Guard has safeguarded the 
Nation's maritime interests and natural resources in our rivers and 
ports, along our coasts, and upon the high seas throughout the world. 
Over the past year, Coast Guard men and women--active duty, reserve, 
civilian and auxiliarists alike--continued to deliver premier service 
to the public. They saved over four thousand lives, protected our 
borders by stopping the flow of drugs and illegal migrants, and 
performed admirably in response to the Deepwater Horizon oil spill.
    The Coast Guard is an adaptable, responsive, military force of 
maritime professionals whose expansive legal authorities, geographic 
diversity, and robust partnerships enable it to perform a broad range 
of challenging maritime missions.
    The Coast Guard's value and role:

   We protect those on the sea: leading responses to maritime 
        disasters and threats, ensuring a safe and secure maritime 
        transportation system, preventing incidents, and rescuing those 
        in distress.

   We protect America from threats delivered by sea: enforcing 
        laws and treaties, securing our ocean resources, and ensuring 
        the integrity of our maritime domain from illegal activity.

   We protect the sea itself: regulating hazardous cargo 
        transportation, holding responsible parties accountable for 
        environmental damage and cleanup, and protecting living marine 
        and natural resources.

    The Coast Guard, working through DHS, led the Administration's 
response to the BP Deepwater Horizon oil spill, the first-ever Spill of 
National Significance. On the night Mobile Offshore Drilling Unit 
(MODU) Deepwater Horizon exploded, it was the Coast Guard who was first 
on scene, searching for those in distress and providing a Federal 
presence. Days later, when the oil began to gush from the damaged 
wellhead, the Coast Guard surged over 7,000 people, including members 
of the Coast Guard Reserve and Auxiliary, to combat the spill. Coast 
Guard members served in cutters and boats, in fixed and rotary-wing 
aircraft, and in the shore-side incident command system. The Coast 
Guard also leveraged its many partnerships to support the response. The 
Coast Guard's adaptive operational model allowed for the:

   Rapid establishment of a response organization to combat the 
        spill, resulting in the recovery of 34.7 million gallons of 
        oil-water mix, and in-situ burning of 11 million gallons of 
        oil. These efforts assisted in the protection of the shoreline 
        and wildlife.

   Deployment of 46 cutters and 22 aircraft. Surface assets 
        included Medium Endurance Cutters (210-ft and 270-ft), Sea-
        going and Coastal Buoy Tenders (225-ft and 175-ft), Ice 
        Breaking Tugs (140-ft) and Patrol Boats (179-ft, 110-ft and 87-
        ft). Air assets included Long and Medium-range Surveillance 
        Aircraft (HC-130 and HC-144A) and Short and Medium Range 
        helicopters (HH-60 and HH-65).
        
        
    While 2010 was another exceptional ``operational year'' by any 
standard, these operations further stressed existing aged and obsolete 
cutters, boats, aircraft and support infrastructure. Moreover, these 
extended surge operations strained workforce readiness due to increased 
op-tempo and deferred training. It is therefore imperative--even in the 
current fiscal environment--that we continue to invest in 
recapitalizing our fleet and enhancing support to our families.

FY 2012 Request
    In Fiscal Year 2012, the Coast Guard will focus resources to 
advance strategic priorities. Through tough decisions and resource 
trade-offs, the Coast Guard's FY 2012 budget leverages savings 
generated through management efficiencies and offsets, and allocates 
funding toward higher order needs that support front-line operations. 
These offsets and reductions will support implementation of the 
following FY 2012 budget priorities:

   Rebuild the Coast Guard

   Sustain Front-line Operations

   Enhance Maritime Incident Prevention and Response

   Support Military Families

    Highlights from our request are included in Appendix I.

Rebuild the Coast Guard
    The Coast Guard's FY 2012 budget requests $1.4 billion to continue 
recapitalization of cutters; boats; aircraft; Command, Control, 
Communications, Computers, Intelligence, Surveillance, and 
Reconnaissance (C4ISR) systems; and infrastructure to improve mission 
readiness by replacing aged, obsolete, and unreliable assets. The FY 
2012 budget requests funding for 40 Response Boats and six Fast 
Response Cutters, as well as a sizable investment in the renovation and 
restoration of shore facilities. This budget also provides resources to 
ensure that the Coast Guard's aviation fleet is mission-ready through 
the acquisition of two Maritime Patrol Aircraft, one HH-60 helicopter, 
and conversion and sustainment projects of multiple aircraft. 
Investment in Coast Guard recapitalization is essential to mission 
execution.



Sustain Front-line Operations
    To ensure the Coast Guard is able to meet the needs of the Nation, 
the FY 2012 budget balances resources between investments in capital 
assets, initiatives to sustain front-line operations, and measures to 
enhance mission execution. The FY 2012 budget requests $67.7 million to 
operate new assets delivered through recapitalization programs and 
provides funding to support personnel and in-service assets. Moreover, 
funding is included to operate CGC HEALY and support the operational 
reactivation of CGC POLAR STAR. The Coast Guard plans to decommission 
CGC POLAR SEA in FY 2011 and transition her crew to CGC POLAR STAR, 
enabling orderly transition to CGC POLAR STAR and facilitating her 
return to operations in FY 2013.

Enhance Maritime Incident Prevention and Response
    Coast Guard Marine Safety and Environmental Response personnel 
promote safe and efficient travel, facilitate the flow of commerce in 
the maritime domain, and protect our natural resources. The FY 2012 
budget requests $22.2 million to advance implementation of the Coast 
Guard's Marine Safety Performance Plan and Marine Environmental 
Response Mission Performance Plan.
    During the response to the Deepwater Horizon oil spill, Coast Guard 
incident responders established and executed the Incident Command 
System to lead an effective, unified effort. The Coast Guard will 
enhance these core competencies in FY 2012 to keep pace with an ever-
growing and evolving maritime industry and ensure continued proactive 
leadership to prevent disasters on the Nation's waters and remain ready 
to respond if they occur. Additionally, funding requested in the FY 
2012 budget will assist in meeting Coast Guard Authorization Act of 
2010 requirements regarding dockside examinations by adding examiners 
to improve fishing vessel safety.

Support Military Families
    The Administration is committed to improving the quality of life 
for military members and their families. The health and welfare of 
families is the heart of operational readiness. The FY 2012 budget 
includes $29.3 million to address critical housing shortfalls and 
improve access to affordable, quality childcare. These initiatives will 
ensure Coast Guard members are Semper Paratus for all hazards and all 
threats.

Conclusion
    The demands on the Coast Guard remain high. As we have for over 220 
years, we remain ready to meet the Nation's many maritime needs 
supported by the FY 2012 request. We will always fulfill our duties and 
obligations to the American people, true to our motto ``Semper Paratus, 
Always Ready.'' I request your full support for the President's FY 2012 
request. Again, thank you for the opportunity to testify before you 
today. I am pleased to answer your questions.
                                 ______
                                 
              Appendix I--Fiscal Year 2012 Budget Request

Rebuild the Coast Guard
Surface Assets
$642M (0 FTE)
    The budget provides $642 million for surface asset recapitalization 
and sustainment initiatives, including:

   National Security Cutter (NSC)--The NSC is replacing the 
        High Endurance Cutter class.

   Offshore Patrol Cutter (OPC)--Sustains initial acquisition 
        work and design of the OPC. The OPC will replace the Medium 
        Endurance Cutter class to conduct missions on the high seas and 
        coastal approaches.

   Fast Response Cutter (FRC)--Provides production funding for 
        six FRCs to replace the 110-ft Island Class Patrol Boat.

   Response-Boat Medium (RB-M)--Provides production funding for 
        40 boats.

   Medium Endurance Cutter (MEC)--Provides for operational 
        enhancement of five MECs at the Coast Guard Yard through the 
        Mission Effectiveness Program.

Air Assets
$289.9M (0 FTE)
    The budget provides $289.9 million for the following air asset 
recapitalization or enhancement initiatives, including:

   MH-60T--Replaces one Jayhawk lost in an operational crash in 
        2010.

   HC-144--Funds production of two Maritime Patrol Aircraft and 
        procurement of up to five Mission System Pallets and associated 
        spare parts to complete outfitting of the fleet.

   HH-60--Funds service life extension and component upgrades 
        for eight aircraft.

   HH-65--Funds sustainment of key components.

   HC-130H--Funds Avionics Upgrade and Center Wing Box (CWB) 
        replacements.

Asset Recapitalization--Other
$166.1M (0 FTE)
    The budget provides $166.1 million for the following equipment and 
services:

   Command, Control, Communications, Computers, Intelligence, 
        Surveillance, and Reconnaissance (C4ISR)--Deploys standardized 
        C4ISR capability to newly fielded NSCs and MPAs, and develops 
        C4ISR capability for the OPC. Interoperable and integrated 
        C4ISR is essential to the efficient and effective operation of 
        these assets.

   CG-Logistics Information Management System (CG-LIMS)--
        Continues development and prototype deployment to Coast Guard 
        operational assets and support facilities.

   Rescue 21--Completes deployment at Sectors Lake Michigan, 
        San Juan, PR, Honolulu, HI, Guam; and continues replacement of 
        legacy VHF systems in the Western Rivers.

   Interagency Operations Center (IOC)--Deploys Watchkeeper 
        Information Sharing capability to three IOC locations. 
        Commences deployment of the sensor management capability; 
        resulting in improved capability to see, understand, and share 
        tactical information critical to security and interagency 
        coordination in vulnerable ports and coastal areas.

Shore Units and Aids to Navigation (ATON)
$193.7M (0 FTE)
    The budget provides $193.7 million to recapitalize shore 
infrastructure for safe, functional and modern shore facilities that 
effectively support Coast Guard assets and personnel:

   Cape May, NJ--Replaces a condemned pier critical to 
        execution of patrol boat missions.

   Corpus Christi, TX--Implements Sector/Air Station Corpus 
        Christi consolidation in order to properly hangar, maintain, 
        and operate MPA and an enhance mission effectiveness.

   Chase Hall Barracks, New London, CT--Continues renovations 
        at the Coast Guard Academy by modernizing cadet barracks.

   Commences construction of the #3-6 FRC homeports, C4ISR 
        training facility, and continues modifications to Air Station 
        Miami to accommodate new MPA.

   Station Memensha Boathouse, Chilmark, MA--Replaces the 
        boathouse destroyed by a fire in July 2010 essential to 
        supporting coastal law enforcement, security and safety 
        operations.

   TRACEN Petaluma, CA Wastewater Treatment Plant--
        Recapitalizes and expands the capability of the Wastewater 
        Treatment Plant to ensure compliance with environmental 
        regulations.

   Station Fairport, Ohio--Recapitalizes multi-mission boat 
        station, originally constructed in 1918, to facilitate current-
        day operations.

   ATON Infrastructure -Improves short-range aids and 
        infrastructure to promote the safety of maritime 
        transportation.

Personnel and Management
$110.2M (794 FTE)
    The budget provides $110.2 million to provide pay and benefits for 
the Coast Guard's acquisition workforce. The budget includes additional 
resources to support the government-wide Acquisition Workforce 
Initiative to bolster the professional development and capacity of the 
acquisition workforce.
Sustain Front-line Operations
Pay & Allowances
$66.1M (0 FTE)
    The budget provides $66.1 million to maintain parity of military 
pay, allowances, and health care with the Department of Defense (DOD). 
As a branch of the Armed Forces of the United States, the Coast Guard 
is subject to the provisions of the National Defense Authorization Act 
(NDAA), which includes pay and personnel benefits for the military 
workforce.

Annualization of Fiscal Year 2011
$53.9M (194 FTE)
    The budget provides $53.9 million to continue new initiatives begun 
in the prior year, including increased counternarcotics enforcement 
through enhanced Law Enforcement Detachment (LEDET) capacity and 
follow-on funding for new assets (e.g., NSC, FRC, MPA, etc.).

Surface and Air Asset Follow-on
$50.8M (220 FTE)
    The budget provides a total of $50.8 million to fund operations and 
maintenance of cutters, boats, aircraft, and associated subsystems 
delivered through major cutter, aircraft, and associated C4ISR 
acquisition efforts. Funding is requested for the following assets:

   RB-M--Funding for maintenance, repair and operational costs.

   FRC--Operating and maintenance funding for FRCs #6-8 and 
        funding for crews #9-10. These assets will be homeported in 
        Miami and Key West, FL. Funding is also requested for shore-
        side maintenance personnel needed to support FRCs.

   NSC--Signals Intelligence Capability follow-on and Crew 
        Rotational Concept implementation for three NSCs located in 
        Alameda, CA.

   HC-144A MPA--Operating and maintenance funding for aircraft 
        #14; support and maintenance of Mission System Pallets 1-12.

   C4ISR Follow-on--Funding to maintain more than 200 C4ISR 
        systems deployed and delivered by the Coast Guard C4ISR 
        Program.

   Helicopter Systems--Funding to operate and maintain 
        communications and sensor systems for HH-60 and HH-65 
        helicopters.

   Asset Training System Engineering Personnel--Funding to 
        support NSC and FRC training requirements at Training Center 
        Yorktown.

Polar Icebreaking Program
$39M (180 FTE)
    The budget requests $39 million in polar icebreaking budget 
authority. Funding will support the operation and maintenance of CGC 
HEALY and prepare for the operational reactivation of CGC POLAR STAR. 
The Coast Guard plans to decommission CGC POLAR SEA in FY 2011 and 
transition her crew to CGC POLAR STAR, enabling efficient transition to 
CGC POLAR STAR and facilitating her return to operations in FY 2013.

Critical Depot Level Maintenance
$28.7M (0 FTE)
    The budget provides $28.7 million for critical depot level 
maintenance and asset sustainment for vessels, aircraft, and shore 
infrastructure. Funding will increase support levels for the 140-, 175-
, and 225-foot classes of cutters, restore aircraft spare parts and 
provide sustainment for aging shore infrastructure.

Distress Alerting Satellite System (DASS)
$6.3M (1 FTE)
    The budget provides $6.3 million to begin replacement of the Search 
and Rescue Satellite Aided Tracking (SARSAT) system with the Distress 
Alerting Satellite System (DASS). This multi-agency partnership also 
includes the National Aeronautics and Space Administration (NASA), the 
National Oceanic and Atmospheric Administration (NOAA), the U.S. Air 
Force (USAF). Recapitalization of the SARSAT system beginning in FY 
2012 is critical to ensure no loss of coverage in distress notification 
and life saving response during the planned deactivation of the legacy 
SARSAT system.

Coast Guard Network Security
$8.6M (0 FTE)
    The budget provides funding for the Coast Guard to transition from 
its commercially provided Internet Access Points (IAPs) to DOD IAPs via 
the Defense Information Systems Agency (DISA) to ensure security of 
vital networks and meet cyber security requirements.
Enhance Maritime Incident Prevention and Response

Marine Safety Enhancement
$10.7M (53 FTE)
    The budget provides $10.7 million and 105 personnel to implement 
the next segment of the Marine Safety Performance Plan by investing in 
Marine Safety Inspectors, Investigators, and Fishing Vessel Safety 
Examiners at Coast Guard Sectors. This initiative furthers the Coast 
Guard's efforts to achieve an appropriate mix of military and civilian 
personnel with the necessary skill-sets and experience to perform 
Marine Safety inspections and investigations.

Marine Environmental Response Enhancement
$11.5M (44 FTE)
    The budget provides $11.5 million and 87 personnel to enhance 
Marine Environmental Response (MER) capacity. This initiative supports 
the Marine Environmental Protection Mission by providing funding for an 
MER Incident Management and Assist Team (IMAT) and increasing technical 
expertise and strengthening MER career paths at Coast Guard Sectors and 
Strike Teams. The request is the initial investment in the Coast 
Guard's initiative to improve mission performance in accordance with 
the MER Mission Performance Plan.

Support Military Families
Child Development Services
$9.3M (6 FTE)
    The budget provides $9.3 million to increase access to child care 
services for Coast Guard families with dependents under the age of 12, 
better aligning the Coast Guard with the Department of Defense (DOD) 
child care standards. Additionally, this request funds 12 new positions 
critical to ensuring continued accreditation of the Coast Guard's nine 
child development centers by the National Association for the Education 
of Young Children.

Military Housing
$20.0M (0 FTE)
    The budget provides $20.0 million to build family housing units at 
Sector Columbia River and recapitalize the Air Station Cape Cod 
Unaccompanied Personnel Housing, the highest priority housing projects, 
critical to the well-being of military personnel and their families 
assigned to these geographic regions.

Decommissionings, Efficiencies, and Savings
High Endurance Cutter Decommissioning
-$6.7M (-92 FTE)
    As part of its long-term recapitalization plan, the Coast Guard is 
decommissioning HECs as NSCs are delivered and made operational. The 
average age of the HEC fleet is 43 years and these assets are failing 
at an increased rate resulting in lost operational days and increased 
maintenance costs. The Coast Guard will decommission one High Endurance 
Cutter (HEC) in FY 2012.

PC-179 Patrol Coastal Decommissioning
-$16.4M (-108 FTE)
    The three remaining 179-foot Patrol Coastal (PC) vessels will be 
decommissioned per a January, 2007 Memorandum of Agreement (MOA) with 
the U.S. Navy. These vessels will be returned to the U.S. Navy in FY 
2012.

Standard Workstation Help Desk consolidation
-$6.9M (0 FTE)
    Consolidates computer workstation support into two regional 
centers, eliminating 56 contractors.

Program Support Reduction
-$13.6M (0 FTE)
    Reduction in programmatic support across the Coast Guard including 
support reductions for: small boat replacement, reservist and contract 
support for audit remediation, innovation program funding, recruiting, 
and training opportunities.

Administrative Savings Initiatives
    In FY 2012 the Coast Guard will seek efficiencies and make targeted 
reductions in order to sustain front-line operational capacity and 
invest in critical recapitalization initiatives.

Management Efficiencies
-$61.1M (0 FTE)
    Consistent with the Secretary of Homeland Security's Efficiency 
Review and building upon efforts in previous Fiscal Years, efficiencies 
will be generated by leveraging centralized purchasing and software 
licensing agreements, reductions in printing and publications, 
reductions in shipping and the transportation of things, reductions in 
advisory and assistance contracts, minimizing purchases of supplies and 
materials, office equipment consolidation, implementing automation and 
energy conservation/savings measures, and limiting government usage of 
commercial facilities.

Professional Services Reduction
-$15.2M (0 FTE)
    A reduction in professional services contracts for enterprise-wide 
mission support and operational support activities.

Non-Operational Travel Reduction
-$10.0M (0 FTE)
    A 25 percent reduction in Coast Guard-wide non-operational travel, 
including travel for training, professional development, conferences, 
and international engagement.

    Senator Begich. Thank you very much, Admiral Papp.
    What we'll do on this first round of questioning is do 
about 5 minutes each. And we'll, if I can start with a couple.
    And, I guess the first is the broader question--First, just 
a side note on, because I didn't have this in any of my notes, 
and you made me think of something here. Can you tell me again, 
the mission in Iraq, what the Coast Guard has there? Just so I 
understand that mission.
    Admiral Papp. Yes, sir. The initial mission was to provide 
coastal patrol boats to guard the Iraqi oil platforms.
    There are two platforms that sit very close to the border 
with Iran. They are, they have been--in fact, we lost one Coast 
Guard member in an attack on those oil platforms. The oil 
platforms provide about 90 percent of the revenue for the 
country of Iraq, so they can't afford to lose them.
    Iraq, after the war, did not have the capacity to protect 
them, so we've been in the process of providing patrol boats, 
and the Navy and the Marine Corps were providing people on the 
platforms themselves. The Iraqis are transitioning to taking 
over the protection of the oil platforms, and Navy Central 
Command has asked us to continue to provide the patrol boats.
    We've received overseas contingency funding for that 
through the Navy, to sustain that. And we intend at this point 
to continue meeting the Navy's needs over there, because they 
don't have the capacity, or the types of boats that are 
necessary for this.
    Senator Begich. You, your second part of that answer was 
exactly where I was headed, was--and it sounds like the Navy's 
contingency money is utilized to help offset your costs. Is 
that right?
    Admiral Papp. Yes, sir. And it has been transferred to us 
two different ways. It has come either directly from the Navy--
last year it was actually put in our budget. The OCO funding 
was put in our appropriation.
    Senator Begich. Good. Let me ask you some general 
questions, if I can. First, I understand, and, on the POLAR 
SEA, which will be decommissioned this year, and the POLAR STAR 
won't come out until 2013, is there any advantage in putting 
the POLAR SEA in kind of a warm status while we're in this 
process of trying to get to 2013?
    Admiral Papp. Mr. Chairman, the entire budget is a 
balancing act, trying to sustain capabilities, trying to 
recapitalize. There's good news and bad news about this 
icebreaker situation. The bad news has been, the Coast Guard 
didn't have the money in our budget to sustain the icebreakers, 
and I think that's part of the reason we find ourselves where 
we are.
    The good news is, we're getting the money back in our 
budget, but the President's proposed budget only gives us money 
to sustain POLAR STAR--the one that's in reactivation right 
now--and HEALY, our medium icebreaker, which is fully active. 
We had to make some very tough decisions within the limited 
amount of money we have, and in my judgment, the best thing is 
to decommission POLAR SEA, and devote all our resources into 
POLAR STAR, so that we can get another, hopefully, 10 years at 
least out of POLAR STAR until we come up with a long-term 
solution to our Nation's icebreaker solution.
    Senator Begich. If you had the resources, would there be a 
value with the POLAR SEA, to put it in a warm status, or at 
least have a capacity?
    Admiral Papp. I----
    Senator Begich. Or, is it just too far gone that it's not--
--
    Admiral Papp. Oh, no, sir. POLAR SEA is in a sound 
condition right now, with the exception of her engines. There 
was a major engine overhaul that was done which failed. So 
right now, rather than invest in Polar Sea to restore all those 
engines, we're transferring that money and funding over to 
POLAR STAR because we think--I think that's the best investment 
at this time.
    Senator Begich. OK.
    Admiral Papp. In an unconstrained resource environment, I'd 
love to have the money to keep POLAR SEA going as well. The 
hull is sound. The engines need to be overhauled, and I think, 
at a minimum, I believe at a minimum--this is my personal 
opinion--the country needs at least two heavy icebreakers. 
Studies show us, varying numbers, that the Nation should have. 
If I had all the money I wanted to have, I would certainly keep 
POLAR SEA going. But I'm faced to make some tough decisions in 
this budget.
    Senator Begich. Could you at some point--not right now, but 
maybe get me an analysis of what that would take, to take the, 
next, as for engines?
    Admiral Papp. Yes, sir.
    [The information requested follows:]

    Approximately $14-15 million non-recurring funding to complete the 
necessary Hull, Mechanical & Electrical (HM&E) work and an additional 
$30 million annual recurring funding for crewing and asset Operations & 
Maintenance (O&M) are required to return POLAR SEA to operational 
status. Operational status is defined as the ability of the cutter to 
deploy for a polar mission. Based on the most recent long lead time 
parts delivery dates, it is estimated that this work would 
approximately 24 months to complete from the receipt of funding.
    Required HM&E work to return POLAR SEA to operational status would 
entail:

   Main Diesel Engine Repairs: $4.5 million

   Machinery Control And Monitoring System Upgrade: $1.0 
        million

   Central Hydraulic System Removal and Cargo Crane Renewal: 
        $4.0 million

   Miranda Davit Install: $1.5 million

   Open Loop CPP System Conversion: $3.16 million

    Bringing POLAR SEA to operational status would also have 
significant impacts to the current POLAR STAR reactivation project due 
to limited supply of critical parts and long production timelines for 
diesel engine parts that would have to be allocated across both assets. 
Additionally, the specialized workforce necessary to reconfigure the 
engines would also have to be balanced across both assets. The required 
work listed above would return POLAR SEA to operational status but 
would not significantly enhance reliability. POLAR SEA's projected end 
of service life would remain at the end of 2014, which means escalation 
of reliability concerns and maintenance costs would continue unless a 
Service Life Extension Project (SLEP) was performed.

    Senator Begich. OK. Also, you have done, or, you, the Coast 
Guard has done a High Latitude Study, basic, for Alaska. Can 
you tell me the status and where that's at? I know there's 
great debate, and I know you've done surveying and so forth, 
and some testing up in the north. Can you tell us what the 
status of that is, and when we might see that report?
    Admiral Papp. We're----
    Senator Begich. Or, will we see that report? Let me ask you 
that.
    Admiral Papp. Yes, sir.
    Senator Begich. Good.
    Admiral Papp. I'm very optimistic right now. If you'd asked 
me a couple months ago, perhaps not as optimistic. But, right 
now, we're working with the administration, developing a cover 
letter that will go on all three volumes. And I expect that 
that will be released sometime before the fall so that we can 
fully analyze it.
    Senator Begich. Let me end there with my questions. I have 
some more, so maybe on the second round. But, I want to let you 
know, in the state legislature in Alaska, they've allocated I 
think just shy of $2 million. We'll see if the Governor vetoes 
it or not. But, if it stays it, it is to start examining 
deepwater ports up in the northern region, which I think could 
be complementary to the efforts that you want to do, and maybe 
some local dollars to assist. So, I just want to flag that. I 
told them the same thing. Based on the study, we may want to 
explore some opportunities with their resource, too.
    Admiral Papp. Yes, sir. I'd love to talk more about Arctic 
infrastructure. Yes, sir.
    Senator Begich. Excellent. That's my second round comment, 
so don't worry.
    Senator Ayotte.
    Senator Ayotte. Thank you, Mr. Chairman.
    Admiral, I had a brief follow-up on the mission that you're 
conducting in Iraq right now, of providing security for the oil 
platforms that are critical to the Iraq economy.
    I also serve on the Armed Services Committee, and from the 
testimony we've had before that committee from our military 
leaders over the last several months, there has been concern 
expressed about the withdrawal date at the end of December for 
our military.
    Do you know, would you be included in that withdrawal date 
in terms of Coast Guard operations of guarding those platforms?
    Admiral Papp. We would not be included. That doesn't 
include all military. Central Command--and I've talked to 
General Mattis about this. They have an ongoing need for our 
niche capabilities.
    The Iraqis--there are two levels of defense. There's the 
people on the platforms themselves; then there are the patrol 
boats that, they guard the perimeter. And while the Iraqis have 
bought patrol boats, their crews have not been trained to the 
level where they're able to take it over right now. So, the 
Central Command has sustained their request, or, kept their 
request going for us to keep our patrol boats over there to 
fill that niche. And I expect that that funding will keep, 
continue coming.
    Senator Ayotte. So, you would anticipate, Admiral, that the 
important security function that the Coast Guard is performing 
would actually go. Because, as you know, the agreement we have 
with the Iraqi government, which, I think there have been some 
discussions about perhaps extending, because we've heard on 
several fronts that they're--not just in this area, but in 
other areas, they're just not quite ready in some instances to 
take over their own security. So, in your opinion, your mission 
would extend, regardless of those agreements?
    Admiral Papp. Yes, ma'am. That's true. The Central Command, 
even though we're pulling forces out of Iraq, the Central 
Command, of course, has ongoing missions there in the Arabian 
Gulf region----
    Senator Ayotte. OK. Thank you very much, Admiral. I 
appreciate that.
    And then, the other follow-up I had is, I appreciate that 
the Coast Guard falls underneath the Department of Homeland 
Security, as opposed to the Department of Defense. The 
President announced not too long ago that he was going to ask 
Secretary Gates, and now Secretary Panetta, to look at--as you 
know, Secretary Gates undertook an efficiency initiative, just 
as you've described that you've done in the Coast Guard 
budget--that he would be looking at, perhaps, as much as $400 
billion of additional cuts.
    Has there been discussion of whether the Coast Guard would 
be part of that analysis? Or would you be separate? I didn't 
know if you had already been asked to look at that. Because 
it's obviously a pretty significant level of cuts to our 
Defense over the 10-year period.
    Admiral Papp. Senator, that's a great question. And this is 
where people like you, that maintain these relationships 
between Armed Services and our authorization committee are very 
important. Because a lot of people don't understand that the 
National Defense Authorization Act, which governs military pay, 
benefits, et cetera, applies to the Coast Guard as well. And 
sometimes people forget that as we go along. So, there are 
impacts on the Coast Guard budget that are determined by 
decisions made by the Armed Services Committee.
    The good thing is that--and this is one of the beautiful 
things about the Coast Guard--is, we provide a bridge between 
the Department of Homeland Security and the Department of 
Defense. I sit in on all the Joint Staff meetings. I was over 
there on Tuesday sitting in with all the service chiefs, 
Chairman Mullen, and the combatant commanders, and addressing 
these efficiencies that are being developed, and analyzing the 
impacts on the Coast Guard as well--and also being mindful of 
what the Department of Defense may not be able to provide back 
to Homeland Security in the future, as we go through these 
budget reductions over the next dozen years or so.
    Senator Ayotte. Well, I do appreciate that you are being 
included in those discussions, because you obviously perform a 
very important defense function for our nation as well. And 
thank you for providing that insight on the relationship 
between what we are doing in the NDAA and the Coast Guard.
    One of the things I look forward to hearing from you going 
forward, serving on both committees, is, I also am the Ranking 
Member on the Readiness Subcommittee on the Armed Services 
Committee. I just want to make sure that we don't get in a 
position that we have been in, in prior times in our Nation's 
history, where, when we are drawing down, for example, from 
Iraq and Afghanistan, that we don't hollow out the forces in a 
way that jeopardizes our readiness for protecting our country.
    So, these are issues that I look forward to continuing to 
talk with you about. I'm very glad that you're being included 
in those discussions.
    Admiral Papp. Yes, ma'am. Thank you.
    Senator Ayotte. Thank you.
    Senator Begich. Senator Lautenberg.
    Senator Lautenberg. Mr. Chairman, and Admiral, if I can 
stop the coughing, I'll finish my questioning. But if I don't, 
I'll ask you to respond to my questions via the 
communications----
    Admiral Papp. Yes, sir.
    Senator Lautenberg.--list and respond that way.
    It's peculiar for me to be talking about the aging ships 
that are only 40 years old.
    [Laughter.]
    Senator Lautenberg. And we had the privilege of 
inaugurating the services of the, I think one of the last 
cutters built in Rhode Island at the very famous yard there. My 
daughter and I gave a present to the Seaman of the Year that is 
on a constant basis. But, anyway, I've got the Semper, but I'm 
not sure I've got the Paratus today.
    So, House Republicans dangerously slashed funding that 
would support port securities by 55 percent below this year's 
level. According to the FBI, New Jersey, as I mentioned, is 
most at-risk, the most at-risk area for a terrorist attack in 
the United States.
    What kind of an impact would cuts to port security grants 
have on security efforts at high risk ports, like the Port of 
New York and New Jersey?
    Admiral Papp. Well, as you know, Senator, I don't control 
the money for the port security grants. That ultimately ends up 
with FEMA. But, we do have a chance to comment on those at our 
Captain of the Port level. As the ports prepare their proposals 
for funding through the grants, our Captain of the Ports add 
comments to that, and sort of rank order them as they go along.
    I know there's some concern, particularly in the Port of 
New York--I just got a letter from Commissioner Kelly that I'm 
responding to right now. He has some concerns about the 
shortfalls there.
    What I can say is that, I think, part of the strength is 
that we are all working together. We all are communicating 
together. Our Captain of the Port up there meets with the Area 
Maritime Security Committee, brings all those people together. 
And increasingly, as we go along in these constrained budget 
times, we're going to have to rely upon our partnerships to be 
force multipliers up there. And I think the Port of New York, 
in particular, has a very strong partnership. And I'm 
comfortable where we're at in terms of the resources for 
providing security there.
    Senator Lautenberg. All right. I just don't want cuts to 
impair the vigilance that's required there.
    So, we noted that reports discovered at Osama bin Laden's 
compound reveal that al-Qa'ida discussed plans to attack oil 
tankers bound for U.S. ports. Now, what does the Coast Guard do 
to respond with additional measures to secure our ports in 
light of these new threats?
    Admiral Papp. Well, sir, we use a layered security effort. 
It starts overseas. We have--the three layers are basically, 
regulatory, and cooperation with other countries 
internationally, and placing inspectors from the Coast Guard 
that inspect the security efforts' compliance with an 
international ship and port security code in the ports if they 
are going to trade with our country. That's our first layer of 
defense--making sure that other countries are applying the 
right security efforts overseas.
    Then you have an intermediate layer, which are our major 
cutters--the high endurance, medium endurance cutters that I 
was talking about--that can range out to the limits of our 
exclusive economic zone, intercept ships coming in, and provide 
escorts or boardings for security before the ships arrive at 
our ports.
    And then finally, the last layer is our coastal patrol 
boats, our stations, our deployable specialized forces that we 
can move around from port to port, that provide the security 
within the ports themselves.
    The first and third layer I'm comfortable, confident with, 
and we have, I think, resourced properly. The challenge we face 
are those ships that should be out there with a persistent 
presence that are now approaching 40 years old. And I 
understand your comment, sir. And oftentimes we throw this 
thing about them being 40 years old or 50 years old out there, 
and most Americans, they don't have a context for understanding 
there.
    Senator Lautenberg. Absolutely.
    Admiral Papp. And what they need to know is that 
engineering-wise, these ships were designed to go about a 
quarter century, and we've far exceeded that. The example I 
like to use is, my home, which I bought 20 years ago, and I'm 
replacing heating systems, I'm replacing air conditioners, I'm 
replacing wiring, and other things that--and a roof, because of 
20 years of use. Well, these ships have had 40 years of hard 
use in a very unforgiving environment, doing some very 
challenging things, and now we're losing effectiveness, 
efficiency. They're falling apart. And we need better tools for 
our people to provide that intermediate layer of security.
    Senator Lautenberg. Are you prepared, if asked, to give 
specifics, situations, that would really cause an impairment in 
your ability to provide the services that are requested? There 
are always new things, whether it's oil spills, trash dumping--
so many things that they, get--Mr. Chairman, that the Coast 
Guard is asked to do. And they do it courageously, they do it 
skillfully. And it's just a question of how much juice you can 
squeeze out of a melon, without it, not having anything left.
    And I want your people to understand one thing: They carry 
enormous pride for our country, though not as visible as some 
of the other services. But the fact that you are really Semper 
Paratus, that you're there, always ready. And it amazes me 
that, whatever the crisis is, somehow or other the Coast Guard 
finds a way to get there. And I salute you, and I ask, tell 
your people that, keep up the good work, and let's us try and 
do what we can to provide you with the resources that are 
necessary.
    Thank you very much for being here.
    Admiral Papp. Thank you, Senator.
    Senator Begich. Thank you very much, Senator Lautenberg.
    I'm going to ask just a couple quick questions, and then 
I'm going to turn it over to the Ranking Member for her opening 
statement and questions that she may have.
    So, Admiral Papp, I have one--I'm sitting here as you were 
commenting to Senator Ayotte, you know, I sit on Homeland 
Security, I'm here in Commerce, and Department of Defense Armed 
Services. So, it's kind of an interesting--you're right. You 
are a kind of a bridge between all this. And it's interesting 
to see that.
    Let me, you know, Homeland Security in their budget--and 
I'm not going to, I don't want to put you too much in a box 
here--but, if feel uncomfortable answering, just tell me. But, 
they've asked for another $5 million in their 2012 budget to 
study icebreakers, the need of icebreakers.
    You know, what I've learned about the Federal Government--
we study a lot of stuff, and then we usually, 5 years later, we 
study it again, because we got, the study is old, and we didn't 
implement it. So, my gut tells me it's not worth the money; we 
should put that into what we know. We know we need a minimum, 
as you stated--and I think you're right on, I think minimum is 
the right word--at least two operational, large-scale 
icebreakers, at minimum.
    Is it wise to put, to do another study on what our need is? 
I understand--and I don't want to, you know, I don't want to 
get you in any trouble here with Homeland Security, but I'm 
just, it just seems like, there's $5 million sitting there to--
I know it's not a lot in the big picture, but $5 million to the 
Coast Guard is a lot of hard cash you could put to operational 
resources.
    Admiral Papp. Well, Senator, I think when you see the High 
Latitude Study, it's going to offer a range of options. And 
oftentimes when you array the range of options, particularly 
within a constrained budget time, it causes a lot of people to 
choke. I mean, I've never seen any study over the course of my 
career, which now spans about four decades, that does not call 
for more Coast Guard.
    Senator Begich. Right.
    Admiral Papp. So, let's just accept the fact, or, I accept 
the fact that we don't have enough Coast Guard to do everything 
that we do. But, on the other hand, we have to be good stewards 
of our country's money, as well. And it's tough to live within 
the constraints that we have.
    Having said that, I think the High Latitude Study will show 
a need for a range of icebreakers.
    Senator Begich. Yes.
    Admiral Papp. Now you've got to decide--OK, what can the 
country afford, what do we want to build, and who's going to 
operate them? And so, I think the $5 million is probably well 
spent if there is a focus for where that report would go. And--
--
    Senator Begich. So would--if I can interrupt you for a 
second. Very good. That's why you're the Commandant. And, let 
me say, the Latitude Study, which is in process now, and just 
really about to be released, can I say this, from what you've 
just stated--that once we see that, it will draw multiple 
conclusions and pathways, some small, some medium, some large, 
where policymakers need to make a determination. Then the 
question is, utilizing that $5 million to get it going, 
whatever that pathway is, is really of a high value.
    Now, I'm not going to use the word ``study'' here, because 
what I am hearing you carefully say is that the High Latitude 
Study will tell us a lot about icebreaker needs. At varying 
pathways. The question is, then, in these limited dollars we 
have, how do we utilize it? And our job here--and I'll just 
say, is that 5 million worth an additional study to got one 
step further? Or is it to say, this is the pathway, let's start 
putting some money toward it and go down the track?
    Admiral Papp. I think the----
    Senator Begich. Is that a fair----
    Admiral Papp. I think you're exactly right, sir.
    Senator Begich. OK.
    Admiral Papp. Clearly delineating where that money would 
go, and what the end result should be, which is a clear and 
definitive answer, what this Nation wants to do in terms of 
recapitalizing its icebreaker fleet, or a decision that we're 
not going to do it. But----
    Senator Begich. Understood.
    Admiral Papp.--we're behind the power curve right now in 
terms----
    Senator Begich. Absolutely.
    Admiral Papp.--of taking action.
    Senator Begich. And I know you've done this for my staff. 
It's--or, one of your folks, some time ago. And I'm wondering 
if you could do this for the Committee. And my bet is, I'm a 
sure a committee staff will lean over and say, ``We have that 
already.'' But, just in case, I'll just echo it again. As 
you've talked about all the different ship needs you have, is 
there a simple spreadsheet, you know, an Excel spreadsheet, or 
some sort of spreadsheet that says, here's what we have, here's 
what's going to replace, and here's what we need, which is 
going to show a gap, is my bet. And if that hasn't been 
produced, maybe that's a later discussion. But, at least those 
first two columns by class, and then how long it takes. Because 
I know on one of them there is a lay of the land of how it 
looks long-term. But, the real question is that next column. 
And I know that's one that, knowing--I've worked in the 
administration before, not the Presidential here, but in the 
mayor's office when I was mayor, we always do that last column. 
It doesn't necessarily show up in the legislative body process, 
because OMB takes it off and says, don't talk about that. So, 
can you do at least those two? And maybe the third we could 
have a discussion on at some point?
    Admiral Papp. Oh, absolutely. And I think----
    Senator Begich. You understand what I'm asking for.
    Admiral Papp. Yes, sir. I certainly do.
    Senator Begich. OK.
    Admiral Papp. And, column 1 and column 2 are very easy to 
come up with. Column 1--column 2 is going to be less than what 
column 1 is.
    Senator Begich. Yes.
    Admiral Papp. And certainly, column 3 would be much more.
    Senator Begich. Right.
    Admiral Papp. And, I think that's the challenge. We've 
done, in fact, we're in the midst right now, the Department has 
asked us to do a cutter study to sort of refocus the balance of 
ships that we're building right now. And it's one of those 
things, and once again, even if you give it to a third party, 
the numbers that you come up with to have the Coast Guard do 
all of its jobs all the time----
    Senator Begich. Right.
    Admiral Papp.--are something to choke on.
    Senator Begich. Yes. I----
    Admiral Papp. And I think that's why we have a hard time 
gaining traction, getting these reports forward. They always 
come back showing we need more.
    Senator Begich. Right.
    Admiral Papp. So, the challenge I'm faced with is, I've got 
a top line at the end of the day that I've got to fall within, 
and we're doing our best top meet that. And that's why we need 
sustained funding in our acquisitions.
    Senator Begich. Well, if you could do that, I'd love the 
third column. And then, if OMB harasses you or whatever, you 
can say we asked for it.
    Admiral Papp. Yes, sir.
    Senator Begich. Because I really, I think that's, for us 
it's important to see that. Now, it may not mean we ever get 
there. But if we don't know what that--to do what you're 
required to do, as Senator Lautenberg laid out, we need to know 
what resources you need, and then we have to make a broader 
policy discussion in our budgets of what's the right 
allocation. But if we don't know what that end is, we don't 
know if we're really fully, if we're at 70 percent of your 
mission, 60 percent, 80 percent. So, if you could provide that 
to the Committee, that would be great.
    Admiral Papp. Yes, sir.
    [The information requested follows:]

    The information requested is provided in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                                               Quantity Planned
   Legacy Assets Before      Quantity at the    Current Quantity  Major Replacement  Assets   When Deepwater  is
Deepwater  Program Started    End of FY 2001    as of June 2011              (A)                Completed (B)
----------------------------------------------------------------------------------------------------------------
                                                     Surface
----------------------------------------------------------------------------------------------------------------
          High Endurance                  12                 10          National Security                    8
                        Cutter (378)                                                      Cutter (NSC)
----------------------------------------------------------------------------------------------------------------
        Medium Endurance                   1                  1
                        Cutter (282)
-----------------------------------------------------------------
        Medium Endurance                  13                 13
                        Cutter (270)
-----------------------------------------------------------------
        Medium Endurance                   1                  0           Offshore Patrol Cutter             25
                        Cutter (230)                                                   (OPC)
-----------------------------------------------------------------
        Medium Endurance                   1                  0
                        Cutter (213)
-----------------------------------------------------------------
        Medium Endurance                  16                 14
                        Cutter (210)
----------------------------------------------------------------------------------------------------------------
       Patrol Boat (110)                  49                 41             Fast Response Cutter             58
                                                                                       (FRC)
----------------------------------------------------------------------------------------------------------------
                                                    Aviation
----------------------------------------------------------------------------------------------------------------
                                                                                         HC-130H Long-
                                                             22         Range Surveillance
                       HC-130H            30                                      Aircraft                 22 (C)
                                              ----------------------------------------------
                                                                                         HC-130J Long-Range
                                                              6      Surveillance Aircraft
----------------------------------------------------------------------------------------------------------------
                                                                              HH-60 Medium
                   HH-60                  40                 40             Range Recovery                   42
                                                                                Helicopter
----------------------------------------------------------------------------------------------------------------
                   HH-65                  93                101        HH-65 Multi-mission                  102
                                                                                          Cutter Helicopter
----------------------------------------------------------------------------------------------------------------
                   HU-25                  41                 13            Maritime Patrol                   36
                                                                            Aircraft (MPA)
----------------------------------------------------------------------------------------------------------------
                                                                           Unmanned Aerial                  TBD
                                                                              System (UAS)
----------------------------------------------------------------------------------------------------------------
Notes:
(A) Does not include Mission Effective Projects (MEP) for the Medium Endurance Cutters/Patrol Boats and Cutter
  Boats.
(B) Based on Acquisition Project Baselines (APB).
(C) Combined LRS program of record--final mix of C-130H/C-130J TBD.


    Senator Begich. Thank you.
    Senator Snowe.

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

    Senator Snowe. Thank you. Thank you, Mr. Chairman.
    And, welcome, Admiral Papp. I am sorry that I wasn't here 
for the opening of the Subcommittee session. Unfortunately, I 
was called to testify on regulatory reform, and that was 
important.
    I appreciate, Mr. Chairman, your leadership, and for 
convening this hearing to discuss the future of our nation's 
most versatile branch, the Coast Guard.
    And I welcome you, Admiral Papp, and your leadership.
    As you know, from your visit there last year, prior to your 
confirmation, I came from a state truly reliant on the ocean 
for commercial and recreational uses. And so, the Coast Guard 
becomes paramount in that regard.
    You probably have already had a very frank discussion about 
the administration's acquisition budget, which seeks 8 percent 
less than in 2010, and an operations budget reflecting a 3.9 
percent increase over last year, and whether or not that's 
adequate to meet both the anticipated, as well as the 
unpredictable, needs and requirements of an increasingly 
complex maritime world. The Coast Guard is tasked with sweeping 
mandates, and, as we well know.
    In 2010 we were reminded again of the tremendous range of 
the Coast Guard's capacity as it patrolled the nearly 3.4 
million square miles of the exclusive economic zone. Last year 
alone, the Coast Guard saved over 4,000 lives, inspected over 
21,600 shipping containers, interdicted over 2,000 illegal 
migrants, and prevented 300,000 pounds of illegal drugs and 
millions of gallons of oil from reaching our shores.
    And despite the Coast Guard's numerous successes, the 
agency continues to confront the challenge of doing more with 
less. And so, it is reminiscent of the past in so many 
instances, where we've had to discuss the fact that the Coast 
Guard has been asked to do so many things with a budget that's 
truly constrained.
    This budget reflects some significant points of concern, 
including a $115 million reduction in the acquisition budget, a 
$15 million reduction in defense readiness. In these 
increasingly difficult economic times, government programs must 
strive for maximum efficiency, but, hopefully, not at the 
expense of the safety and security of our Nation.
    Two thirds of the 2012 budget request would support 
operating expenses, but the fact is, we have an aging fleet, so 
long-term capital spending cannot be overlooked. The high 
endurance cutters'--one of which would be decommissioned under 
this budget proposal--the average age is 40 years.
    In the future, the Coast Guard assets and personnel are 
likely to be more often in demand, rather than less. Whether 
it's piracy, environmental disasters, and growing security 
responsibility in the Arctic, there are ongoing threats that 
must be factored into the budget decisions. While the Coast 
Guard has continued to fulfill these missions, we cannot expect 
them to operate indefinitely with vessels approaching 30, 40, 
and in some cases, even 50 years of service. I am sure you have 
already touched upon this today, as well: for example, in the 
Arctic, increasing shipping traffic, search and rescue 
responsibilities, and resource exploration is demanding more of 
the Coast Guard. Yet, polar ice breaking capacity has been 
reduced to just one vessel, the HEALY, which was commissioned 
in 1999--a vessel primarily intended to support scientific 
research, rather than provide a heaviest ice breaking support 
in the polar regions.
    Admiral Papp, your agency's budget request appears to 
strike a balance, meeting the Coast Guard's critical 
operational requirements while reducing costs through 
administrative efficiencies and offsets. But this committee 
also needs to understand specifics from you regarding the 
tradeoffs that also have been made in that regard. For example, 
further delay in the delivery of the High Latitude Study means 
more time will elapse before we're able to provide you with the 
tools that you will require to respond to emerging issues, such 
as resource claims and new passageways in the Arctic.
    Painting that clear picture will also allow us to better 
set priorities in how scarce resources are going to be spent. 
Earlier this week, a Department of Homeland Security Inspector 
General report outlined a series of violations that occurred 
between 2004 and 2009 in the Response Boat- Medium acquisition 
program. While it was a positive indication that the Coast 
Guard detected the issue and initiated action in response, and 
recognizing that these problems occurred prior to your watch, 
Admiral, I raise this issue to underscore the point that, in 
this budget climate, it becomes even more imperative that we 
consider the impact of every dollar.
    The common theme emerging is that for years we've asked the 
Coast Guard to save American lives and natural resources on a 
shoestring budget. The level of service we have received in 
return for our investment, from the unprecedented response to 
last year's oil spill, to the safety net of security that 
blankets our nation's port, has been nothing short of heroic. 
So, we cannot continue to heap mission upon mission onto the 
Coast Guard without increasing its resources, and expect those 
critical tasks to be carried out with the same degree of 
effectiveness upon which we rely and depend.
    So, I appreciate, Commandant, your leadership, and those of 
the men and women in the Coast Guard, because they truly are a 
remarkable force. And I appreciate all that you are doing.
    Senator Snowe. Let me just follow up with a first question 
on this report that was issued by the Inspector General. Can 
you respond to it? We have had this issue in the past, prior to 
your tenure, and I think it's very important to make sure that 
we get this acquisition program on the mark. With the Coast 
Guard Reauthorization Act, we did try to address many of the 
issues that had occurred in the previous acquisition process.
    I understand the acquisition workforce vacancies had been 
reduced from 20 to 13, from April to November 2010. In April 
2011, a GAO report found that within your agency, program 
managers were concerned about not only the ability to fund 
these positions, but also the ability to fill vacancies 
depending on where they fall in the management structure.
    Has this been addressed? And does it affect the acquisition 
process for the Response Boat-Medium fleet?
    Admiral Papp. Yes, ma'am. The analogy I like to make about 
our acquisition workforce is, if you go back to the mid-90s, 
where we were going through constant budget reductions every 
year, part of the thing we did was, we gutted our acquisition 
workforce. There wasn't the work for them to do, first of all, 
and we couldn't afford to maintain them. We were only getting a 
couple of hundred million dollars a year for acquisitions back 
then.
    After September 11, or, September 11, 2001, occurred, all 
of a sudden we started building up, going up to three quarters 
of a billion dollars, then over $1 billion. And so, it was like 
trying to overhaul an engine in a race car while you're in the 
middle of a race. We're bringing on new people, we're trying to 
fill vacancies. And at the same time, every other agency in the 
Washington, D.C. area was trying to hire acquisition 
professionals, because everybody else was building up, as well.
    It was a hard job for us. We know we made mistakes along 
the way. Part of the reason we've done better is because of the 
oversight of this subcommittee in putting the pressure on us to 
make sure that we comply. And, as I sit before you here today, 
I will tell you, I am very proud of our acquisition workforce. 
I've seen the growth and development.
    Five years ago, I was Chief of Staff of the Coast Guard. We 
brought in then Rear Admiral John Currier, who headed up our 
acquisitions. He got with the Defense Acquisition University. 
We brought in experts. We hired people away from NAVSEA and 
brought them in to--civilians--to bolster up our program. And 
we're seeing the benefits of that right now.
    Part of the, the down side of those benefits of getting a 
professional workforce is, you start discovering things that 
you did wrong. And we self-reported on this ADA violation 
because it's the right thing to do. We took corrective action 
on it, and I'm hopeful that it will not happen again. But, as I 
talk to some of our old professionals that have been with us 
for a long time, they say, wow, I did that years ago, and I 
never got caught on it, or, I never knew I was doing it.
    It's all a process of educating, getting a better educated 
and trained acquisition workforce, and we've been working very, 
very hard at that--to the point now where I'm very proud that 
we uncover the problems before other people do. Of course, 
there are reporting requirements that we have to comply with. 
We've done that. The IG has investigated it. We have squared 
away that situation. People have been let go. And we're moving 
on now.
    Senator Snowe. And so, how many vacancies do you have 
currently in the program?--
    Admiral Papp. Ma'am, I'm sorry, but I don't know the exact 
number of vacancies. But we're continuing to hire and, in fact, 
in this budget we continue to open up a number of other 
positions as well. Our vacancy rate is very low now. But, I'd 
like to get the exact number to you for the record.
    [The information requested follows:]

    As of June 23, 2011, the Coast Guard Acquisition Workforce vacancy 
rate was 13.0 percent. This equates to 131 vacant positions out of a 
total of 940 positions within the workforce.

    Senator Snowe. I appreciate that. And so, all the remedial 
action has been taken on the 20 deficiencies that were cited in 
the report?
    Admiral Papp. Yes, ma'am.
    Senator Snowe. Thank you. Last year, as you know, in 
Congress we passed the Coast Guard Reauthorization Act which 
addressed some ongoing concerns about the acquisition 
management process. The reforms, I know, are ongoing in your 
agency, and have been over a period of time, to address what 
happened to the National Security Cutter.
    One of the issues is this full-funding requirement rule by 
the OMB. How does the inability to expend funds for long lead 
materials for the National Security Cutter. How is that going 
to affect the process? Have you discussed that here today?
    Admiral Papp. We haven't discussed it. It presents us with 
a challenge, because in past years we have received, for 
instance, funding for long lead materials.
    What we do know is that, as much money as you can put up 
front, it reduces your long-term costs in terms of getting 
these things built. The longer you press things off to the 
right, the more expensive these things are going to be able to 
build. And trying to order one unit at a time, having all the 
funding in 1 year, presents us with a challenge, because then 
the shipbuilder, to cover itself, will increase its prices in 
order to take care of that uncertainty of perhaps not having a 
follow-on ship as well.
    So, part of the challenge that we faced--I wanted to put 
NSC number 6 in the 2012 budget, but when we finally negotiated 
our fixed-price contract for numbers 4 and number 5, we had to 
ask for additional money in this year, which would not have 
allowed us to fit all of the money for number 6 in this budget 
year.
    I'm very grateful to the Congress for providing all the 
money in the 2011 budget so that we could award NSC number 5 
this summer. But now, unfortunately, it looks like we'll be 
delayed in follow-on orders for 6, number 6, until the 2013 
budget.
    Senator Snowe. Until the 2013. So, you'll be off by one or 
2 years on that scale?
    Admiral Papp. Well, one from where I wanted to be right 
now. So, and of course, you probably incur some additional 
costs as well, as you move that further to the right.
    Senator Snowe. Yes, I know. That is one of the things we 
tried to resolve with the Deepwater acquisition program 
reforms, was to make sure you received the money in a given 
year so that you can move forward.
    Where does the recapitalization of the medium endurance 
cutter stand? Those are vessels are approaching 50 years of 
age. And you also have included $25 million for the pre-
acquisition of the Offshore Patrol Cutter in this year's 
budget?
    Admiral Papp. Yes.
    We're getting into the design--we've put out the request 
for proposals for the preliminary design right now. We'll be 
looking at multiple preliminary designs. So, this money covers 
the review of those, and then ultimately we down-select to one 
design 2 years from now, and then hopefully have money in the 
budget 3 years from now to start construction.
    Senator Snowe. So, the commissioning is still scheduled for 
2014?
    Admiral Papp. No, ma'am. We won't see that in 2014. It 
would be probably 2015 before we actually award and start 
cutting steel. But that may even slip into 2016, depending upon 
the progress we make with the National Security Cutter. 
Obviously, we have to get the National Security Cutter out of 
the way so we can make room for the OPC.
    Senator Snowe. How does that affect your mission 
requirements?
    Admiral Papp. Well, it affects my mission requirements, or 
because the, we're losing effectiveness of the ships that are 
in existence. Two things----
    Senator Snowe. You're having to do the, all the 
maintenance?
    Admiral Papp. Exactly. We're getting about 75 percent of 
the desired days out of our high endurance cutters now because 
of breakdowns. And when we do have breakdowns, because the 
equipment is old, sometimes companies have to re-manufacture 
parts that they don't, they no longer hold in stock. It costs 
us more and more each year.
    So, we talked about the 1 percent increase in our budget, 
and I'm certainly grateful that the President gave us a 1 
percent increase. But, all our expenses are going up at a much 
higher rate than that to keep these old ships going. So, the 
longer we hold onto them, the more they cost us. The longer we 
wait to construct the new ships, the more they cost. So, I'm in 
this vicious cycle that I find myself caught in.
    Senator Snowe. Yes. It is regrettable, because this is one 
of the things we tried to avoid in the past, knowing exactly 
that all these aging vessels require spending tremendous 
resources for maintenance and upkeep, not to mention risk to 
those who serve on these ships. They're very old, so there can 
be a lot of issues finding the parts which can drive up the 
costs, both for maintaining a fleet that clearly isn't going to 
be of longstanding use, and then, of course, delaying the new 
vessels that should come online. It's amazing and remarkable 
that you do with what you have, to be honest with you. I've 
said this time and again, given the age of the vessels.
    Senator Begich. Admiral Papp, and what we'll do here, we've 
done this before, the Ranking Member and I, we just kind of go 
back and forth with questions as, until we exhaust each other, 
or exhaust you.
    [Laughter.]
    Senator Begich. But, what happens is, you----
    Senator Snowe. That's hopeful for him.
    [Laughter.]
    Senator Begich. That's hopeful for you. But, we end up 
adding to each other's commentary, because I think, you know, 
we're trying to figure out what's the right approach to some of 
these things.
    First off, on the, if I can go to real quick, on the GAO 
report on the 20 deficiencies, is there something you could, 
again, provide to the Committee, kind of, that list of 20, and 
here's what you've been able to do on those? Just kind of a, 
you know, bullet--not right now, obviously. But, at a later 
date. Would you mind doing that?
    Admiral Papp. No, that----
    Senator Begich. Just kind of how you succeeded, and kind of 
where you're at? Just kind of a----
    Admiral Papp. We want to be completely transparent. Because 
if we're not, that just leaves a cloud over my acquisition 
folks.
    Senator Begich. Of course.
    Admiral Papp. And, quite frankly, I'm proud of them 
discovering this, and then taking the action----
    Senator Begich. Excellent.
    Admiral Papp.--themselves. And I want to make sure that 
everybody understands that we are self-correcting.
    Senator Begich. Excellent. So, if you wouldn't mind doing 
that, that would be great for us.
    [The information requested follows:]

    The Coast Guard has been very conscientious in working to comply 
with all facets of financial/contracting laws and regulations. In the 
summer/fall of 2009, the Coast Guard was reviewing the approach and 
structure for the funding of an upcoming major fixed-price contract. 
Recognizing the need to reserve funds for antecedent liabilities for 
this contract, reviews of existing contracts were conducted to ensure 
adequate funds had been similarly reserved for other fixed-price 
contracts. Once the potential for non-compliance was realized, the 
Coast Guard immediately sought legal advice and conducted further 
contract reviews to assess the situation for all major fixed-price 
contracts, there was the potential for a deficiency for the Response 
Boat-Medium (RB-M) contract. As a consequence, the Department of 
Homeland Security (DHS) Office of the Inspector General (OIG) was 
notified of the Coast Guard's self-identified potential deficiency 
related to the RB-M contract and asked to conduct an independent 
review. The DHS OIG started the review in August 2010.
    The DHS OIG concluded their review and reported in OIG Report 11-
82, dated May 10, 2011, that the Coast Guard incurred 20 Anti-
Deficiency Act (ADA) violations totaling approximately $6.7 million. 
These discrepancies were the result of using funds from later Fiscal 
Years to fund changes to contract line items that were initially funded 
from an earlier fiscal year.
    Once there was a realization that ADA violations were possible in 
the summer/fall of 2009, the Coast Guard took the following actions.
    Upon review of the RB-M contract funding, immediate action was 
taken to correct transactions as much as possible. As a result and as 
noted by the OIG (pgs 3-4 of their report), the Coast Guard reduced the 
deficiency from approximately $7.8 million to $6.7 million. The Coast 
Guard also immediately initiated policy and process changes within the 
Acquisition Directorate to prevent future ADA violations.

   On October 23, 2009, the Acquisition Directorate (CG-9) 
        instituted a business process change, via memo, for funding 
        fixed-price contracts. This process was further defined in CG-9 
        Standard Operating Procedure (SOP) #9-21 (version 3.4) issued 
        on 2 March 2010, and was modified as published on 1 June 2011.

   Appropriations Law training for the CG-9 Funds Managers is 
        required to be completed as soon as possible after hiring and 
        in no less than every 3 years thereafter. This requirement is 
        also outlined in CG-9 SOP #9-21, and was also made a 
        requirement for the project Business Managers upon discovery of 
        this issue.

     Four days of appropriations law training for Business 
            Managers was

   Internal controls were reviewed and modified to ensure 
        separation of duties, verification of appropriate funds usage, 
        and compliance with this process.

    These actions along with other information were provided to the DHS 
OIG for their report 11-82 which listed two recommendations for the 
Coast Guard. The DHS OIG concluded the report by stating:

        ``The Coast Guard's corrective actions satisfy the intent of 
        the recommendation(s), and we consider it resolved and 
        closed.''

    Senator Begich. And then, you noted it--and I guess this 
will lead to the question--and that is, the acquisition 
timetable, and when you have to move something off, when you 
have to not get, maybe, instead of two ships, or three ships, 
you're doing two, and the contractor then has to readjust 
pricing, and if they do a fixed price on the first two, the 
third one's going to be more expensive because you pushed it 
off.
    Would a multi-year--I think I know the answer to this, but 
I'm going to want it for the record--a multi- year 
authorization on capitalization be helpful the get these 
longer-term kind of agreements, so you get the maximum value? I 
mean----
    Admiral Papp. I----
    Senator Begich. Now, hold that thought--with understanding 
that we have an obligation to put the cash in. But, if the two 
meld, I'm just assuming that if you could tell a shipbuilder, 
OK, we need eight of these ships--I'm using the gross number 
here--over a period of time, that they're going to give you a 
much better fixed price than, we'll take two this year, and 
maybe a third one next year, maybe the year after.
    Admiral Papp. Absolutely, sir. You know, I, there are days 
that I feel sorry for our shipbuilders--I mean, not real sorry, 
because they're getting a lot of my money. But----
    [Laughter.]
    Senator Begich. Yours, and the Navy, and NOAA, and----
    Admiral Papp. But, they are, like any other businessman.
    Senator Begich. Yes.
    Admiral Papp. If they can order six engines instead of two, 
they're going to get an economic order discount, which 
ultimately ends up costing me less money, which ultimately ends 
up costing the taxpayer less money. So, yes sir. Having multi-
year authorizations is a good start. As you correctly identify, 
it's the multi-year appropriations that are really the bottom 
line, that we need to get. But, any predictable, steady source 
of funding is going to help us in keeping the costs down, 
because they'll be able to, they'll have the confidence to 
order.
    And these are good people. I meet with----
    Senator Begich. Right.
    Admiral Papp. I met with Mr. Petters from HII. And they 
want to build ships. They want to keep the costs down. And 
they've been very reasonable in their negotiations with us. 
But, they have no guarantees that we're going to go beyond 
five, or six, or seven. And what we need to do is definitively 
say, we're going to build eight National Security Cutters, and, 
and so that they can have that, and then come up with a 
predictable, steady source of funding.
    Senator Begich. Very good. I'll switch topics here, because 
I want to hit a few minutes in, just on the Arctic, and the 
needs up there. We've talked a little bit about the High 
Altitude Study, which, it sounds like, as we move to the end of 
summer, first of fall, we should see something in regards to 
that. And that will give us kind of a pathway in, kind of, the 
issues that are up there.
    Second, your overall view of our readiness--I mean, here's 
my concern. And, I know, we have a great debate around here, 
always about oil and gas development and OCS. My bigger 
concern, to be very frank with you, is ships that are moving 
back and forth that are not oil and gas related. They just 
happen to have oil or diesel operating them, and they're cargo 
ships from some country. We have no clue what their safety 
standards are; they run aground. And that to me seems to be the 
bigger concern. Because we know the way we operate with the oil 
and gas industry, at least in the Arctic--I can't speak to the 
Gulf--but, in the Arctic, and the work we do in the North 
Slope, we're very conscientious of what they need, and what 
their requirements are.
    Can you give me some, just some thoughts on the Arctic? And 
then, I think, there's no question in my mind, we need a 
deepwater port up there--not only for the industry, but for the 
Coast Guard, and oil spill technology. And these ships that are 
just cruising, you know, at some point--when I way cruising by, 
I'm exaggerating. They're not, like--but, they're going to be 
up there, and they already are. And I don't know what they're 
made out of, and what, they're going to run aground in shallow 
water up there. Any comments on that?
    Admiral Papp. Well, sir, you know, I could spend my entire 
existence as Commandant preoccupied with the day-to- day issues 
that are going on. But, what I've, one of the things I've 
chosen to look at in terms of needs of our country for the 
future is the Arctic. And I appreciate you going up there with 
me last summer when I made my visit. I visited Barrow, Kotzebue 
and Nome. And actually, it was a revisit, because I had served 
up there as an ensign 35 years ago. And so it was good to get 
back up there and see the changes.
    But what has not changed is the infrastructure up there. 
And I think that we have to have a robust discussion on the 
infrastructure needed to support what is no doubt going to be 
an increase in human activity up there, off the north coast of 
Alaska.
    Icebreakers, I think, are important, but they cloud the 
discussion of the other needs that we have up there. And, I 
think we've focused too much on icebreakers over the last few 
years, even though they are important----
    Senator Begich. Right.
    Senator Begich.--and needed. But, right now, if we were to 
have to mount a response like we did in the Gulf of Mexico--I 
sent 3,000 people down for Deepwater Horizon. You know how many 
hotels are available in Barrow.
    Senator Begich. That's right.
    Admiral Papp. We have no place to put people up there. We 
have no hangers for aircraft. We have no piers, no Coast Guard 
boats. So, my immediate pressing concern is, as human activity 
occurs, as you have that ship that goes through that--first of 
all, we'll assure safety standards, because no matter where 
ships operate in the world, we are involved in their safety 
standards. But, if an accident happens, how do we respond?
    And right now we've got zero capability to respond in the 
Arctic right now. And we've got to do better than that. That, 
when people ask me, what keeps me awake at night--an oil spill, 
a collision. A ship sinking in the Arctic keeps me awake at 
night, because we have nothing to respond. Or, if we respond, 
it's going to take us weeks to get there.
    Senator Begich. Right.
    Admiral Papp. So, a seasonal air station, seasonal boats. 
We have a full range of Coast Guard capabilities that we need 
to be placing up there.
    And also, it provides an opportunity for the interagency to 
be able to--if we have an infrastructure that's in place, the 
interagency that would be involved and needed for a response to 
some sort of disaster would have the ability to station up 
there, as well.
    Senator Begich. Let me end on this comment, and I'll turn 
back to the Ranking Member. And that is, you hit where, you 
know, you're right. We talked, it kind of gets the attention, 
the icebreaker, which is a big ticket item, so, we're--but, you 
get where I'm really interested in, and that's what I call core 
infrastructure. It may be, like you said, seasonal runways, 
seasonal facilities. Or, even long-term deepwater port access 
to the area, that you can move in and out very rapidly, and/or 
be stationed there permanently. And I think that's the biggest 
challenge.
    And I know, from this committee's perspective, this is one 
area that we're going to concentrate on because the frontier, 
the opportunity up there, is unbelievable from the oil and gas, 
to mineral, the fishing, transportation components, it has so 
much--and you're right. No matter what happens, where we think 
it is, where we stand on the political spectrum, there is going 
to be increased--and I'll use your phrase, because I think it's 
a great phrase--human activity up there. Period. And it doesn't 
matter what spectrum you sit on. And if we're not preparing--
and infrastructure is part of it. The onshore infrastructure is 
a critical piece of it.
    So, I appreciate you emphasizing that. Because I know we 
get wrapped around sometimes the icebreaker a lot, which is, 
you know, and, like you said, we don't want to diminish the 
importance of that, because it is. But, this other 
infrastructure is critical for year-around, or increased 
activity that may occur up there.
    Admiral Papp. Yes, sir. And, what I owe you is a concept of 
Coast Guard operations up there. And thank you. I understand 
you're on the schedule for the Arctic Symposium that was held 
earlier this week. I spoke on the first day.
    What I owe the administration and the Congress is a Concept 
of Operations on how we carry out the full spectrum of 
responsibilities up there.
    I faced almost the opposite situation when I was the Ninth 
District Commander on the Great Lakes, because people thought, 
once the lakes freeze over, you don't have anything to do up 
there. The fact of the matter is, you've got a lot to do and--
--
    Senator Begich. You have a lot.
    Admiral Papp.--you need the special capabilities to be able 
to do that. Well, we've always thought the Arctic is a place we 
don't have to worry about, because it's covered with ice. But, 
now we've got all that open water--the Coast Guard authorities, 
Coast Guard responsibilities exist there. The challenge is, we 
don't have the resources to apply against them. And I need to 
come up with a consolidated plan on how I will address that, 
and put the resource proposals forward so that we have 
transparency for everybody to see, so we can start working 
toward it.
    Senator Begich. Well, we'll work with you on that.
    Let me turn back to the Ranking Member and see if she has 
some additional questions.
    Senator Snowe. I just have a couple questions. Admiral 
Papp, in terms of the National Security Cutter and the Offshore 
Patrol Cutter, how do the numbers square with your mission 
requirements?
    Admiral Papp. Well, this goes--the mission-needs statement 
goes back to 1994, when we started working on this. And then, 
during the late 1990s, when we finally decided on the numbers 
of ships, and, as we all know, the numbers of missions have 
increased since then.
    And I think a studied review of where we are right now 
would probably--and, as I mentioned earlier in the hearing 
here, every review I've seen always says, you need more ships. 
You need more than what you're asking for. And that's probably 
true. But we're having a hard time just getting to our 
acquisition baseline that we've asked for right now. So, it 
makes the discussion almost fruitless, because we're having a 
hard time just getting to the 8 and 25. So, that's where we've 
put our focus.
    Frankly, if I get the 8 and 25, we will find ways of 
covering all the bases that we need to do. And, if at some 
point in time somebody thinks we need more to do that, I'm 
always grateful to get that sort of support. But, right now I'm 
focused on the 8 and 25.
    Senator Snowe. Unfortunately, yes, it was a significant 
setback. As you know, the Deepwater acquisition process set the 
program----
    Admiral Papp. Yes, ma'am.
    Senator Snowe.--back a number of years.
    Do you have an age breakdown of the ships in your fleet?
    Admiral Papp. Well, for our major cutters, on average, the 
high endurance cutters, the Hamilton class, are about 40 years 
old, a little beyond that. The 210-foot medium endurance 
cutters on average are above 40. And then, the, I say, it's 
positive, but the 270-foot medium endurance cutters which were 
built a little bit later, they're, across the board, I think 
it's an average of 23 years right now. So, they're at the 
limits of their originally designed service life, and we're 
going to need to get, probably, another 10 or 15 years out of 
them.
    Senator Snowe. Thank you.
    Admiral Papp. But we can get you a more precise breakdown 
for the record.
    [The information requested follows:]


----------------------------------------------------------------------------------------------------------------
              Class                  # of Assets Today     Original Designed Service Life        Average Age
----------------------------------------------------------------------------------------------------------------
                    WMSL-418                      2                                30                     2
----------------------------------------------------------------------------------------------------------------
                         WHEC-378                10                                30                    42
----------------------------------------------------------------------------------------------------------------
                    WAGB-420                      1                                30                    12
----------------------------------------------------------------------------------------------------------------
                    WAGB-399                      2                                30                    35
----------------------------------------------------------------------------------------------------------------
                         WMEC-270                13                                30                    24
----------------------------------------------------------------------------------------------------------------
                         WMEC-210                14                                30                    44
----------------------------------------------------------------------------------------------------------------
                         WMEC-282                 1                                30                    40
----------------------------------------------------------------------------------------------------------------
                       EAGLE                      1                               N/A                    75
----------------------------------------------------------------------------------------------------------------
                     WPB-110                     41                                20                    22
----------------------------------------------------------------------------------------------------------------
                      WPB-87                     73                                25                     9
----------------------------------------------------------------------------------------------------------------
                        WLBB                      1                                30                     5
----------------------------------------------------------------------------------------------------------------
                         WLB                     16                                30                    10
----------------------------------------------------------------------------------------------------------------
                         WLM                     14                                30                    13
----------------------------------------------------------------------------------------------------------------
                        WTGB                      9                                30                    30
----------------------------------------------------------------------------------------------------------------
                        WYTL                     11                                30                    48
----------------------------------------------------------------------------------------------------------------
                         WLI                      4                                30                    57
----------------------------------------------------------------------------------------------------------------
                         WLR                     18                                30                    43
----------------------------------------------------------------------------------------------------------------
                         WLIC                    13                                30                    45
----------------------------------------------------------------------------------------------------------------
                      TOTALS                    244
----------------------------------------------------------------------------------------------------------------


    Senator Begich. Just before you got here, we asked for a 
kind of a flow chart----
    Senator Snowe. Yes.
    Senator Begich.--of just what they have, what they're 
replacing, and then the most difficult channel, or, the last 
column is, what they really need, and so we can see these gaps. 
Because I think that's where your core question is coming from. 
Because some of these things are so darn old that, you know, 
you're going to be floating one day, and it's not going to be 
powered by anything other than, hopefully, a sail, you know.
    Admiral Papp. Well, one of the other challenges that we 
face is, many times people will say, Well, why don't you just 
buy some more Law Enforcement Detachments and put them on Navy 
ships? And when I talked about that to Admiral Roughead, he 
kind of laughed at me, because----
    [Laughter.]
    Admiral Papp.--he would make the case, he's not got enough 
Navy ships to do the things that he needs to do.
    Senator Snowe. Right.
    Admiral Papp. And, in fact----
    Senator Begich. Yes.
    Admiral Papp.--we're seeing less and less--particularly 
down in the drug interdiction mission, Wichata South--we're 
seeing fewer Navy ships. Our foreign partners--the British, who 
have been so reliable, and the Dutch--we're seeing less of them 
down there. We used to put Law Enforcement Detachments on them. 
So, allied support and our own Navy support is diminishing, and 
at the same time we're having a harder time keeping our cutters 
out there.
    Senator Snowe. I know. This issue is related to 
procurement, even in the Navy. We're far below the 300-ship 
Navy that was the original goal.
    Senator Begich. Right.
    Senator Snowe. I remember the days when they were talking 
about a 600-ship Navy, back in the early 1980s. So, you can see 
how far we've come. But, unfortunately, the level of 
procurement is never sustained. I used to be Chair of Sea Power 
in the late 1990s. And unfortunately, the level of procurement 
never sustained even a 300-ship Navy. And so, here we are today 
with a fleet down in the 270s.
    Admiral Papp. Yes, ma'am.
    Senator Snowe. So, again you are asked to do more with 
less, and being stretched thin, and the demands around the 
world are increasing.
    I wonder if there's any way of comparing the costs, in 
terms of looking at the maintenance costs--let alone the 
separate issue of getting the parts. That's another question. 
Because that does add astronomically to the costs, when you 
have to Rube Goldberg, you know, many of the parts in these 
boats.
    Admiral Papp. Well, it's the cost, and the reliability as 
well. We're just--we're for a high endurance cutter, if we, 
we're getting only about 75 percent of the days that we're 
programmed for with them right now. And it's affecting the 
other ships, as well.
    And, as I said before you came in, of our layered security 
that we do, the overseas people that we put to inspect in the 
ports, and then our conventional forces that are in our ports, 
we have this very important layer out there that provides a 
persistent presence offshore, that guards against migrants, can 
do search and rescue, can do drug interdiction. And, that's the 
layer that I'm most concerned about, because now it's the least 
reliable. Unfortunately, it's the most expensive to replace.
    But it's also the most versatile. On September 11, what did 
we do? We took one of our medium endurance cutters and actually 
put it in the Port of New York to serve as a command and 
control platform. Yet, we can send that same ship 2,000 miles 
offshore to interdict a threat vessel coming in, or perform 
search and rescue.
    We had the Morgenthau, which is 42 years old, that was sent 
well offshore to rescue four Venezuelan fishermen that were 
severely injured when their equipment crashed on them off the 
coast of, well off the coast of Colombia. And they sprinted out 
there and picked up the four crewmen, provided medical support, 
got them into Mexico, and, basically, on fumes, because they, 
we don't have the capability to ballast the ship and refuel it 
out there.
    So, they're still getting the job done, but at an 
increasing cost.
    Senator Snowe. One final question. As you know, the 2010 
Coast Guard authorization included significant changes to 
commercial fishing, inspection and safety requirements--you 
know, inspections are now mandatory for commercial fishing 
vessels and increased safety training will be required. These 
are all major issues important to the industry.
    But there is, there was a committee that was established in 
order to make sure that the fishing community was involved in 
the implementation. Where does that process stand?
    Admiral Papp. We're in the process of drafting up the 
regulatory package for that right now, and starting to work 
that through.
    The other thing is, it's another one of those jobs that's 
going to carry resource needs with it. We've been 
recapitalizing our marine safety and marine inspection forces 
over the last couple of years. This budget continues that 
process in putting people out there. We do have to designate 
some people and find people with the right competencies for 
fisheries inspections. And as we take on, as we're continuing 
to analyze what sort of workload this is going to be for us, I 
think we'll probably see, within the 2013 budget we'll start 
identifying some of those resources we need to beef up our 
fisheries inspection forces.
    Senator Snowe. So, the Committee for implementation for 
these safety measures has not yet been established?
    Admiral Papp. Okay. That's correct.
    Senator Snowe. Are you required by a certain time frame to 
accomplish that?
    Admiral Papp. I don't have the exact date at the tip of my 
fingers, but I can provide that for the record.
    [The information requested follows:]

    The Coast Guard is developing a rulemaking to fulfill our statutory 
responsibilities under the Coast Guard Authorization Act of 2010 for 
commercial fishing vessel safety requirements that took immediate 
effect.

    Senator Snowe. I think it's to make sure that the fishing 
community's involved in the process before these rules are 
implemented, given that they are such important stakeholders. 
This is why I was wondering about the timeline for 
implementation of these new rules.
    Admiral Papp. Oh, absolutely. Yes, ma'am.
    We do have a timeline. Unfortunately, I just can't----
    Senator Snowe. OK.
    Admiral Papp.--remember the specific dates. But we'll 
provide that for the----
    Senator Snowe. But, that will run--it will be run 
simultaneously with the Committee itself----
    Admiral Papp. Yes, ma'am.
    Senator Snowe.--that will involve the fishing industry.
    Admiral Papp. Yes, ma'am.
    Senator Snowe. It is important because in New England the 
commercial fishing industry continues to have the highest 
fatality rate of any occupation, which is deeply troubling.
    Admiral Papp. Yes, ma'am.
    Senator Snowe.--and so----
    Admiral Papp. The good news is--these regulations are long 
overdue. We're glad to have them. It's, the process now is just 
the implementation, and identifying the resources to carry it 
out.
    Senator Snowe. Thank you, Admiral Papp. Thank you very much 
for your exceptional work, and we appreciate it. Thank you.
    Thank you----
    Admiral Papp. Thank you, Senator.
    Senator Snowe.--Mr. Chairman.
    Senator Begich. Thank you, Admiral Papp.
    And I will have just a couple quick ones. And then we'll, 
unlike some committees, we'll end up early. This is good. So, 
we like that.
    Let me ask you very quickly one, it has a relationship to 
Alaska, and it's in regards to unmanned aircraft. And I know 
the Coast Guard is considering, that, when you deal with 
unmanned aircraft, there are a couple--I'm not sure how 
familiar you are with them--there's the Fire Scout, then 
there's the ScanEagle, there are a couple, and, the ScanEagle, 
which is being developed. And, I know, the University of Alaska 
at Fairbanks, is developing, it's a lower cost--they're working 
with NOAA right now very successfully.
    Has the Coast Guard looked at alternatives to the Fire 
Scout, which is more expensive alternative, to one that, for 
example, I know UAF is working with NOAA on? I don't know if 
that has been in your mix or not. If you don't have a direct 
answer for that now, I'd love that for the record, so I kind of 
get the sense of the budgetary constraints, and how you're 
looking at these types of issues, too.
    Admiral Papp. Well, you're right. The budgetary issue has 
been the problem for us with the other acquisitions and trying 
to fit them in.
    Our unmanned systems have gone unfunded so far. We need a 
long-range system similar to Predator to cover a broad area. 
The entire Deepwater System, as it was originally conceived, 
depended upon unmanned systems. And then you need a shipborne 
tactical UAV to use, as well.
    We've been streaming behind the Navy on this. The Navy has 
put their effort behind Fire Scout. Since we don't have the 
wherewithal or the funding to strike out on this, our own----
    Senator Begich. Right.
    Admiral Papp.--we've been following the Navy's progress. 
And if the Navy decides to go with it, it really does offer us 
long-term efficiencies in terms of logistic support, training, 
and other things that would save the Coast Guard money. So, 
sometimes we look toward our bigger sister service to provide 
the lead on this, because we can use common systems. But, we're 
certainly willing to look at what other systems are out there 
that might make sense for us. It's all a matter of, how can we 
do that efficiently?
    Senator Begich. Great. If you wouldn't mind just giving me, 
again, at a later time, just kind of a response, especially 
with the ScanEagle, and if that, even--you gave us a good 
argument here, because the Navy's already doing the Fire Scout, 
and therefore you've got a lot, you're kind of grabbing the 
tail and holding on to a lot of their volume, in essence--
volume of purchase, potentially, volume of training. And I know 
NOAA's kind of focused on the ScanEagle.
    But I'd be interested in your positives and negatives on 
the system.
    Admiral Papp. I will take a look at ScanEagle and give you 
an assessment back on that.
    [The information requested follows:]

    The Coast Guard is currently investigating the utility of several 
small Unmanned Aerial Systems (UAS), including Scan Eagle and the 
Navy's Small Tactical UAS program, as an interim step for a cutter-
based capability. Although relatively limited in payload capacity, the 
inherent simplicity of such smaller systems is they would allow the 
Coast Guard to evaluate much of its cutter-based UAS Concept of 
Operations, develop required skill sets, and support the acquisition 
effort at a reduced cost. With potential partnership opportunities, 
this methodology allows the Coast Guard to effectively and affordably 
evolve into the larger, objective systems while they continue to be 
developed.

    Senator Begich. Fantastic.
    The other one is, I, there's a huge--and we actually had a 
little bit of discussion--it's about our infrastructure, 
onshore infrastructure. Has, do you go through a process now, 
as the new Commandant, now you've been there a year--we expect 
everything from you now, after a year--but, have you done or 
started any process to kind of look at all the basing that 
occurs all across the Coast Guard, and determining, OK, can we 
consolidate? Are there better approaches? Is there better 
positioning of our onshore assets? Is that something that you 
would do on a normal, regular basis? Or, is that something that 
would be done just as a new Commandant?
    Admiral Papp. We----
    Senator Begich. Does that make sense? It's kind of like 
what we're doing on the military side, it's always the 
international BRAC, the domestic BRAC, we're always, kind of, 
turning----
    Admiral Papp. Oh, absolutely.
    Senator Begich. Yes.
    Admiral Papp. Yes, sir. I owe that to you. I owe it to my 
people to make sure that we're keeping it properly balanced.
    Part of this ``Steadying the Service'' theme that I used 
right from the start is stopping all the constant 
reorganization that we had been doing, and locking in, so that 
then we can properly resource and balance across all, the 
sector concept, making sure all our sectors are properly 
resourced, our district commands are properly resourced, and 
then getting our mission support side right. This is an ongoing 
process for us.
    We're looking at our deployable specialized forces--I'm 
doing what I call a stem-to-stern review on them, to make sure 
that we're using them optimally, and making sure they're 
properly trained.
    At the same time, we're also doing a boat force 
optimization program. I'm a believer that we've got too many 
boats out there, too many boat classes, and consequently, it 
provides us logistic challenges and training challenges at most 
of our boat stations. So, we're looking, we're reviewing all 
them with an eye toward reducing the number of boats that we 
have to maintain out there, while still maintaining operational 
efficiency--or, effectiveness, rather.
    Senator Begich. Great. And maybe, as you finish some of 
those analyses--the boat forces, the stem-to-stern--would you, 
maybe we can coordinate with your staff, and maybe those are 
opportunities for you or your staff to present to the Committee 
what you found, what can happen, what, you know, again, having 
an opportunity there.
    Admiral Papp. Yes, sir. Absolutely. I think what we will 
find, though, is, most places, we're under-resourced in terms 
of people. People is really the issue. And if I could just 
highlight that. We lost about 5,000 or 6,000 people in the mid-
90s when we went through a process called streamlining, which 
is just another name for--you're getting less money, so----
    Senator Begich. Budget-cutting.
    Admiral Papp. Right. We have grown over the last decade. 
But really, we're only back at the strength that we were at the 
early 1990s, and we have, clearly, more missions, more jobs to 
do. So, even though we've gained 6,000 people, they're fully 
employed.
    Senator Begich. Right.
    Admiral Papp. And the 2012 budget, I gave guidance when we 
developed our 2012 budget--I don't want to cut a single person. 
We need every person that we have. And we still need to give--
--
    Senator Begich. Right.
    Admiral Papp.--mission effectiveness, and deliver our 
services. And we need to recapitalize. And we're in a fine 
balance point right now with this budget. Not everything I want 
or need, but we're keeping it balanced.
    Senator Begich. Excellent.
    Admiral Papp. We start going below, and something's got to 
give--either we've got to stop buying more boats and ships, or 
I've got to start cutting people. I'm really at that point 
right now. And the last thing I want to do is cut people. But I 
think we're going to find ourselves backed into that position 
as we face further constraints on the budget.
    Senator Begich. Last question, and then I'll close off. And 
that is--and this is kind of a global question, and one that 
may be uncomfortable to answer. But, you know, you are now 
under Homeland Security, and, I guess the question is, being in 
that situation, where you're located now, does it create 
administrative challenges, or challenges that affect the 
potential for your readiness and ability to deal with some of 
the issues? And it may be, regulatory setting, or work that 
maybe is necessary to complete your mission.
    And I, why I'm asking this is, it's kind of a quirky 
question in the way I'm asking it, is, sometimes when you move 
an agency--and the Coast Guard kind of keeps, you know, moves 
here, and moves here--that, when you do that there are new 
processes that new agency has which, then, you have to adjust 
to. Or, sometimes it's faster, or slower.
    Can you give me your thoughts of, now you're under Homeland 
Security. Is that, you know, creating--does it give you the 
flexibility that you need to be, really, the Coast Guard that I 
think we all expect, and need, and desire? Does that--without 
putting you in an awkward--I don't want to put you in any 
position here. But I just, because part of our role is, I 
think, is to, we want you to be very effective in anything, and 
if there's process that are layered on top of you that are 
creating problems, we need to know that.
    Admiral Papp. Sir, I, first of all, you never make me 
uncomfortable.
    Senator Begich. Good.
    Admiral Papp. I'm going to be candid with you and----
    Senator Begich. Good.
    Admiral Papp.--tell you exactly what I feel. And I will 
tell you that I'm happy in the Department of Homeland Security. 
Is it perfect? No. But it wasn't perfect in the Department of 
Transportation, either.
    But, what I will say is, more of our mission sets fit 
within the Department of Homeland Security than when we were in 
the Department of Transportation. Yet, there are transportation 
issues that are still very important to me. We meet with the 
Department of Transportation all the time. Just like I talked 
about the bridge that we provide to the Department of Defense--
--
    Senator Begich. Right.
    Admiral Papp.--we also provide a bridge to the Department 
of Transportation. I'm meeting constantly with the Department 
of Justice, the Department of the Interior. The beauty of the 
Coast Guard is----
    Senator Begich. Right.
    Admiral Papp.--we provide those linkages across.
    The challenge I face in DHS is, it's still a new 
department, and consequently, we don't have the career 
bureaucrats--and I'm not saying that pejoratively--but, we 
don't have the career bureaucrats that understand the multi-
mission capabilities in what the Coast Guard does.
    Senator Begich. Yes.
    Admiral Papp. They are learning. But, the challenge is, in 
this new department, the leadership is very shallow. There's a 
lot of political appointees. So, consequently, there's 
turnover, and you have to re-educate.
    I will tell you that Secretary Napolitano is personally 
involved, going out visiting the Coast Guard, learning. I mean, 
for someone who didn't have much coastline as a Governor, she 
has done magnificently in terms of learning about what we do.
    Our Deputy Secretary, Jane Lute, has been marvelous. I meet 
with her every week. She is personally involved in working up a 
strategy which explains us better to OMB and other people on 
all these capabilities that we bring into the Department, that 
heretofore people said, What? Aids to navigation in Homeland 
Security? Oil spill response--well they understand oil spill 
response now----
    Senator Begich. Yes. They've got it now.
    Admiral Papp.--clearly. But, the Secretary and Deputy 
Secretary are believers.
    Senator Begich. Good.
    Admiral Papp. And they are both personally involved in 
convincing other people that need to understand the versatility 
and adaptability the Coast Guard brings to all the missions 
sets.
    We even had, at the beginning of the Department, we had, of 
our 11 missions, we had some that were considered homeland 
security, others that weren't. There were proposals to fund 
them at different levels. Now, both the Secretary and Deputy 
Secretary believe all 11 statutory missions have an impact on 
homeland security.
    So, back to the bottom line--I'm happy where I'm at. And 
it's not providing me an impediment.
    What it obligates me to do is make sure I continue to work 
with my Secretary to make sure she, or in the future, he, 
understands fully what we bring to the table.
    Senator Begich. Well, thank you, Admiral Papp. And let me 
just say that, in all the year here, and the time we spent on 
the plane in going up north, you've always been very candid. 
And it's always a pleasure to work with the Coast Guard in all 
aspects because, you have great needs, but also provide an 
incredible service. And the men and women that serve in the 
Coast Guard are unbelievable, and the families that support 
them.
    So, first, again, thank you for coming today.
    We're going to continue. We have some questions we'll 
submit for the record, and look forward to those answers. And 
then, the hearing record will be open for another 7 days for 
submission and comments by other members. But, again, we want 
to thank you for being here today, and doing what you do in the 
Coast Guard, because it is an incredible team of folks.
    Admiral Papp. Thank you, Mr. Chairman.
    And, thank you, Senator Snowe.
    Senator Begich. This meeting is adjourned.
    [Whereupon, at 11:35 a.m., the hearing was adjourned.]

                            A P P E N D I X

Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                     to Admiral Robert J. Papp, Jr.
    Question 1. While we understand that an engine overhaul alone will 
not bring the POLAR SEA back to operational status. How much would the 
engine overhaul cost?
    Answer. The cost to repair and overhaul POLAR SEA's 6 Main Diesel 
Engines and 2 Ship's Service Generators would be $4.5 million.

    Question 2. What is the cost (range) to bring the POLAR SEA back to 
operational status and what work would that entail?
    Answer. Approximately $14-15 million non-recurring funding to 
complete the necessary Hull, Mechanical & Electrical (HM&E) work and an 
additional $30 million annual recurring funding for crewing and asset 
Operations & Maintenance (O&M) are required to return POLAR SEA to 
operational status. Operational status is defined as the ability of the 
cutter to deploy for a polar mission. It is estimated that this work 
would take 12-16 months, with impacts to the POLAR SEA schedule, to 
complete from the receipt of funding.
    Bringing POLAR SEA to operational status would also have 
significant impacts to the current POLAR STAR reactivation project due 
to limited supply of critical parts and long production timelines for 
diesel engine parts that would have to be allocated across both assets. 
Additionally, the specialized workforce necessary to reconfigure the 
engines would also have to be balanced across both assets. The required 
work listed above would return POLAR SEA to operational status but 
would not significantly enhance reliability. POLAR SEA's projected end 
of service life would remain at the end of 2014, which means escalation 
of reliability concerns and maintenance costs would continue unless a 
Service Life Extension Project (SLEP) was performed.

    Question 3. How much would a 10-yr service life extension of the 
POLAR SEA likely cost?
    Answer. Approximately $40-68 million in non-recurring funding would 
be required to achieve a 10-yr service life extension for POLAR SEA as 
a bridging strategy until new construction. Additionally, $30 million 
of annual recurring funding will be required for crewing and Operation 
& Maintenance (O&M) costs.

    Question 4. Would the 10-yr service life extension include the 
necessary overhaul of the engines?
    Answer. Yes.

    Question 5. The Coast Guard performed admirably as head of the 
Federal response to the Deepwater Horizon oil spill, and the Service 
continues to do good work overseeing the cleanup of the Gulf. As we 
approach the one-year anniversary of the capping of the Deepwater 
Horizon well, what are some of the lessons the Coast Guard has learned 
from that historic response? What did we get right and what could we 
have done better?
    Answer. The Deepwater Horizon oil spill was the first incident in 
U.S. history to be declared a Spill of National Significance (SONS) and 
the first to designate a National Incident Commander (NIC). Despite the 
challenges of the first ever SONS declaration and NIC designation, many 
aspects of the response worked very well.
    The National Contingency Plan (NCP) served the Nation well and 
proved effective during the Deepwater Horizon response. The NCP 
provided a sound framework that allowed for the needed discretion and 
freedom of action to address contingencies that arose during the 
response.
    Although the NIC's role and function evolved through the course of 
the response, the NIC proved to be an effective command organization 
that served its intended purpose to promote unity of effort across the 
whole-of-government.
    After several near mishaps in the airspace above the oil spill 
response, the NIC, in coordination with U.S. Northern Command and the 
U.S. Air Force, established the Aviation Coordination Center (ACC) at 
Tyndall Air Force Base in Florida to establish command and control over 
the airspace. The ACC helped prevent midair collisions, improved 
situational awareness, validated oil trajectory monitoring, tracked 
skimmers and vessels of opportunity, and directed boom deployment to 
where it was most needed.
    The Coast Guard is conducting a review of the President's National 
Commission on the BP Deepwater Horizon Oil Spill and Offshore 
Drilling's findings, the National Incident Commander's (NIC) Report, 
Incident Specific Preparedness Review (ISPR) along with the other 
Deepwater Horizon reports that provide a body of observations, 
perspectives, and opinions. The Coast Guard is carefully reviewing 
these reports to identify areas of positive and effective preparedness 
improvements to develop effective and appropriate national 
implementation strategies. The Coast Guard has already taken several 
actions to address areas where planning and preparedness will be 
improved, including: directing Captains of the Port to review Oil Spill 
Response Plans for offshore facilities; requiring Area Committees to 
include Worst Case Discharge scenarios for offshore facilities in their 
respective Area Contingency Plans; increasing State, local, and tribal 
outreach and participation in Area Committee meetings and activities; 
participating in a Coast Guard, Federal Emergency Management Agency, 
and Environmental Protection Agency workgroup to develop 
recommendations to harmonize the National Contingency Plan and National 
Response Framework governance constructs. Additionally on July 7, 2011 
the Coast Guard issued a Federal Register Notice announcing an updated 
policy employing risk based targeting to prioritize inspections of 
foreign-flagged Mobile Offshore Drilling Units operating on the Outer 
Continental Shelf.

    Question 6. Congress has made few legislative fixes to address gaps 
in our spill prevention and response capabilities. Does the Service 
have the statutory authorities and flexibility it needs to respond to 
Deepwater Horizon-like events in the future?
    Answer. Broadly speaking, the statutory authorities vested in the 
Secretary of Homeland Security and the Commandant of the Coast Guard 
are sufficient. The Deepwater Horizon oil spill however, did expose the 
limitations of those powers when confronted with a spill of national 
significance--specifically, the ``per-incident'' limitation on 
expenditures from the Oil Spill Liability Trust Fund, the limitation on 
advances from the Fund for Federal removal activities, and the lack of 
an appropriation from the Fund for the extraordinary costs to 
administer the claims process. The Coast Guard is conducting a 
comprehensive review of the various Deepwater Horizon reports to 
identify areas of improvement and, from this viewpoint, the sufficiency 
of its authorities. Once this review is complete, the Department stands 
ready to work the Congress to identify appropriate remedies to 
identified limitations.
    Once this review is complete, the Department stands ready to work 
with Congress to identify appropriate remedies to identified 
limitations.

    Question 7. Do you envision the Coast Guard being more or less 
involved in inspecting offshore drilling systems and how do you think 
the Service and the successor agency to the Minerals Management Service 
should coordinate their inspection duties for offshore drilling 
systems?
    Answer. The Coast Guard shares foreign-flagged Mobile Offshore 
Drilling Unit (MODU) regulatory responsibilities with the Bureau of 
Ocean Energy Management, Regulation and Enforcement (BOEMRE). Each 
agency's areas of responsibility are outlined in a Memorandum of 
Understanding (MOU) OCS-01 signed September 30, 2004. This MOU outlines 
the inspection responsibilities of the two agencies. In general, the 
Coast Guard's primary responsibilities are related to vessel operations 
and safety systems including firefighting, lifesaving, electrical 
systems, and hull structures on MODU's. BOEMRE's primary responsibility 
is subsea operations and drilling systems. The Coast Guard does not 
oversee drilling systems, but the interface between subsurface and 
surface operations warrants very close coordination and collaboration 
between both agencies.
    The MODU Deepwater Horizon casualty primarily resulted from a well 
blowout. Although the blowout preventer and drilling systems fall under 
the authority and jurisdiction of BOEMRE, this incident and others have 
prompted the Coast Guard to review all operations and systems under its 
responsibility for potential improvements to both regulations and the 
inspection regime of foreign-flagged MODUs on the U.S. Outer 
Continental Shelf (OCS). To that end, the Coast Guard is developing 
improvements to enhance the safety of offshore operations and improving 
coordination with BOEMRE. Furthermore, Coast Guard and BOEMRE 
established a prevention working group to enhance alignment and 
consistency on how inspections are conducted.
    The Coast Guard recently announced, by publication in the Federal 
Register, an updated policy that Coast Guard marine inspectors will use 
to determine the risk posed by foreign-flagged MODUs operating on the 
U.S. OCS by examining accident history, past discrepancies, flag state 
performance and classification society performance to identify those 
vessels requiring additional oversight in addition to annual 
inspections undergone by all vessels. Risk based targeting allows more 
efficient use of Coast Guard resources and more frequent examinations 
of the highest risk MODUs.

    Question 8. Admiral Papp, at the annual State of the Coast Guard 
Address in February, you said the following:

        ``In order to achieve proficiency in our most needed activities 
        and capabilities, we may have to reduce our range of activities 
        and capabilities. This is acceptable.'' Let me repeat this--
        ``We may need to reduce the number and range of capabilities 
        we've added since 9/11, until properly resourced, and this will 
        be acceptable.''

    Admiral Papp, without the proper resourcing, which activity or 
capability will have to be reduced first?
    Answer. The biggest challenge the Coast Guard faces is sustaining 
front-line operations while simultaneously recapitalizing our fleet to 
stem declining readiness. The FY 2012 President's budget supports these 
priorities while making investments to enhance maritime incident 
prevention and response and support military families. The budget 
required tough choices in a constrained fiscal environment to fund 
these priorities. These are honest and necessary choices to sustain 
front-line operations and rebuild the Coast Guard.
    The Coast Guard is no different than other agencies across the 
Federal Government--just as the Nation is tightening its belt, we must 
focus our resources on the tasks that provide the Nation with maritime 
safety and security services in the most efficient manner.
    The Coast Guard will leverage technology and base resources to 
mitigate impacts of these reductions on Coast Guard readiness, 
operations, and the workforce.

    Question 9. Section 3316 of Title 46 of the United States Code 
grants the United States Coast Guard the ability to delegate the 
authority to perform certain Coast Guard functions to the American 
Bureau of Shipping and other ``recognized'' classification societies. 
This authority encompasses the performance of broad discretionary 
functions (review of plans and inspection of vessels to Coast Guard 
standards), the ability to approve or reject such plans or vessels on 
the Coast Guard's behalf, and the authority to issue vessel 
certificates required under U.S. and international law. These 
recognized classification societies perform these functions pursuant to 
memoranda of agreement (``MOAs'') executed between the society and the 
Coast Guard. These MOAs delineate which authority the Coast Guard is 
delegating to that particular society and the responsibilities of that 
society in carrying out these delegations. They make clear that 
approvals issued by the society will be accepted in the same manner as 
if approved by the Coast Guard. The MOAs also state that remuneration 
for delegated services carried out by the society will be charged 
directly to the party receiving such services and not the U.S. 
Government.
    Given the above, does the Coast Guard consider a classification 
society, when performing the functions as described under 46 USC 3316 
and the relevant MOA, to be an agent of the Coast Guard?
    Answer. Pursuant to 46 U.S.C.  3316, the Coast Guard may delegate 
to the American Bureau of Shipping (ABS) or another recognized 
classification society the authority to review plans, conduct 
inspections, and issue certificates of inspection. However, that same 
statute assigns special status to ABS by requiring each department, 
agency, and instrumentality of the United States to recognize ABS as 
its agent in classifying vessels owned by the Government, and in 
matters related to classification.

    Question 10. What is the Coast Guard's position regarding the 
propriety of allowing an organization which serves as an agent of the 
Islamic Republic of Iran on matters of marine safety and security to 
also serve in a similar capacity for the United States Coast Guard?
    Answer. The Coast Guard believes in the longstanding international 
axiom that class societies be permitted to operate in the interests of 
maritime safety and pollution prevention regardless of political/
nationalistic affiliations. Recognized class societies operate 
globally, providing impartial service to customers regardless of 
national affiliation. Moreover, it is this axiom that underpins the 
development of an important new Code for Recognized Organizations 
(Classification Societies) at the International Maritime Organization.

    Question 11. Section 3316 of Title 46 of the United States Code 
appears to give the Coast Guard broad discretionary authority regarding 
if, when or how it chooses to delegate any of its authority to any 
classification society. For example, while Section 3316(a) requires 
that U.S. Government agencies ``shall'' recognize the American Bureau 
of Shipping as its agent in classifying vessels owned by the Government 
and in matters related to classification, Section 3316(b) provides that 
the Coast Guard ``may'' delegate its authority to one or more 
societies, subject to certain reciprocity and recordkeeping 
requirements. Please explain the Coast Guard's position regarding its 
discretion to exercise its authority under Section 3316 of Title 46.
    Answer. The Coast Guard implemented section 3316 of Title 46 in 46 
CFR Part 8.
    The Coast Guard exercises its authority to evaluate a class society 
for participation as a recognized organization (RO) under 46 CFR Part 
8. The elements for accepting an RO under section 3316 can be broadly 
described using the terms ``track record'', breadth of customer base, 
technical proficiency, and reciprocity. However, the Coast Guard is 
limited to the criteria listed in 46 CFR Part 8; it may not create new 
criteria not listed without changing the regulation.

    Question 12. Does the Coast Guard ever consider that it is 
``required'' to grant any of its authority to any society under Section 
3316? If so, under what circumstances?
    Answer. The requirements for any class society's participation as a 
recognized organization (RO) acting on behalf of the Coast Guard is 
stated in both 46 U.S.C. 3316 and further refined in 46 CFR Part 8. 
Should a class society fail to meet the regulatory criteria required 
for participation, the Coast Guard is not compelled to recognize it 
under 46 U.S.C. 3316 and 46 CFR Part 8.

    Question 13. Section 8 of Title 46 of the Code of Federal 
Regulations provides the regulations for the implementation of the 
Coast Guard's authority under Section 3316 of Title 46 of the United 
States Code. 46 CFR 8 contains several conditions governing the 
delegation of its authority to classification societies which are not 
contained in 46 U.S.C. 3316, and which are not directly related to the 
performance of review/inspection services on behalf of the Coast Guard. 
For example, a class society wishing to receive a delegation from the 
Coast Guard must execute an agreement which, inter alia, allows the 
Commandant to participate in the development of that class society's 
rules; requires the class society to inform the Commandant of all 
proposed changes to its class rules; and requires the class society to 
provide the Commandant the opportunity to comment on any proposed 
changes to its class rules. Similarly, the Coast Guard criteria for 
recognition of class societies for delegation purposes contain several 
requirements not mentioned in 3316 (e.g., ``recognized'' class 
societies must have a total classed tonnage of at least 10 million 
gross tons; must have a classed fleet of at least 1,500 ocean-going 
vessels over 100 gross tons; and must employ a minimum of 150 exclusive 
surveyors).
    Please explain the Coast Guard's position regarding its latitude, 
absent direction from Congress, to establish (e.g., through a 
rulemaking process) additional criteria under which it will recognize a 
classification society and allow it to receive a delegation from the 
Coast Guard, including any criteria which ensures such societies are 
not engaged in activities which are inconsistent with United States law 
or policy.
    Answer. In accordance with the Administrative Procedure Act, the 
Coast Guard established regulations that comply with the law. This 
effort was undertaken to establish a construct that could ensure 
consistency and performance of recognized class societies in a manner 
that meets Coast Guard and International Maritime Organization (IMO) 
marine safety requirements.
    As those marine safety requirements evolve, the Coast Guard will 
endeavor to ensure class societies act not only to uphold the 
requirements of U.S. regulation, but also meet IMO criteria for the 
issuance of international certificates issued on behalf of the U.S.
    The Coast Guard does not believe that its criteria are inconsistent 
with U.S. law or policy.

    Question 14. Section 8.230(a)(23) of Title 46 of the Code of 
Federal Regulations provides that, ``In order to receive recognition by 
the Coast Guard a classification society must not be involved in any 
activities which could result in a conflict of interest.''
    Please provide the Coast Guard's position regarding whether the 
Coast Guard considers an entity acting on behalf of the United States 
in the performance of safety and security inspections, while 
simultaneously acting in a similar capacity for a foreign government 
which is the subject of U.S. sanctions, to be a ``conflict of 
interest'' and counter to the objectives of U.S. policy for purposes of 
46 CFR 8.230(a)(23).
    Answer. The Department of State (DOS) and the Office of Foreign 
Assets Control (OFAC) are the agencies charged with ensuring compliance 
with U.S. economic sanctions. While we defer to their expertise and 
encourage you to seek their views on the proposed legislation, we do 
believe that class societies should be permitted to operate in the 
interests of maritime safety and pollution prevention regardless of 
political/nationalistic affiliations.

    Question 15. The propriety of classification societies serving as 
agents of the U.S. Government while those same organizations also serve 
as agents of the Islamic Republic of Iran, or other sanctioned 
governments, arguably requires consultation with other agencies of the 
U.S. Government. Please provide the Coast Guard's position on the 
input, if any, required from other agencies, as well as a history of 
any previous discussion held with other agencies.
    Answer. No formal input has been required from the Coast Guard by 
other agencies.
    Several separate teleconferences between the Coast Guard and ABS, 
and between the Coast Guard and Department of State (DOS) and 
Treasury's Office of Foreign Asset Control (OFAC) culminated in a May 
2011 meeting with all of the above parties. An additional meeting with 
DOS, OFAC and the Coast Guard in June 2011 was held to provide a 
``Class Society 101'' instructional session to better acquaint staff 
with the work of class societies as ROs under 46 USC 3316. The Coast 
Guard recommends contacting DOS to obtain their official position.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Begich to 
                      Admiral Robert J. Papp, Jr.

    Question 1. I was pleased the Arctic Council recently ratified an 
international agreement on search and rescue (SAR) in the Arctic. What 
can you tell me about the Coast Guard's readiness to uphold America's 
responsibilities in this landmark agreement? What do we need in terms 
of personnel, assets, and infrastructure to comply with its terms and 
perform Arctic SAR?
    Answer. The Coast Guard realizes that with limited search and 
rescue (SAR) resources and with the increase in human activity in the 
Arctic (on land, in the maritime environment and with the increase in 
passenger aircraft on transpolar flights), international SAR 
coordination and cooperation in this region will become more crucial. 
The arctic SAR agreement will serve as the basis for future SAR 
cooperation and coordination with the other Arctic Council nations 
(e.g., Canada will host an arctic SAR exercise in October 2011; all 
eight Arctic Council nations have been invited to participate). In 
addition, the agreement highlighted the Coast Guard's already existing 
arctic SAR responsibilities and, with limited available resources, the 
Coast Guard's continued challenge in conducting arctic SAR.
    The agreement does not impose additional requirements on the 
Parties beyond those already required by international Convention.

    Question 2. The Coast Guard still has not released the Fleet Mix 
Analysis--an analysis of the types, numbers, and capabilities of assets 
it needs to meet mission requirements. This analysis contains important 
information Congress needs in order to make well informed spending 
decisions. What is the status of the Fleet Mix Analysis; what is 
delaying its release? When will Congress be able to see it?
    Answer. The Fleet Mix Analysis was delivered to Congress on July 
29, 2011.

    Question 3. The Coast Guard reported $1.5 billion backlog in shore 
infrastructure projects including century-old small boat stations in 
the Great Lakes that are crumbling and very expensive to maintain. Does 
there need to be a realignment of bases in the Great Lakes to 
consolidate small boat stations and how would this impact the Coast 
Guard's lifesaving mission there?
    Answer. At this time, realignment of Coast Guard boat stations on 
the Great Lakes is not needed. Changes to the Coast Guard's boat 
station footprint must be based on a clear understanding of maritime 
risks and operational requirements. The seasonal nature of the Great 
Lakes creates two distinctly different operating environments, each 
requiring unique mission capabilities and assets: cold weather and ice 
operations associated with frozen or ``hard'' water conditions, which 
impact commercial traffic and pose unique challenges with Search and 
Rescue, and warm weather or ``soft'' water conditions that result in a 
surge of recreational boating activity.
    Coast Guard stations in the Great Lakes play a critical role in 
meeting Coast Guard mission requirements along the 6,700 miles of 
coastline and 1,500 mile international border encompassed by the Great 
Lakes. Cutter capacity and capability is limited and used to the 
maximum extent possible to provide offshore presence and response.
    Certainly, new technologies and platforms improve our patrol and 
response capability. As Rescue 21 and the Response Boat-Medium are 
deployed in the Great Lakes, the Coast Guard will continue to evaluate 
those capabilities and any opportunities these new assets may provide 
relative to the location and number of our stations.

    Question 4. It has been a rough 3 years for the Coast Guard's 
aviation community with the loss of 14 Coast Guard aviators in 
accidents. Many of these accidents are still currently under 
investigation by the Coast Guard but I understand the Coast Guard is 
conducting a nose-to-tail safety assessment to evaluate the overall 
fitness of Coast Guard aviation. What have you learned in your 
investigations into these incidents so far; is there a common thread 
between these accidents? What lessons have been learned from the safety 
assessment and how do you evaluate the overall fitness of Coast Guard 
aviation?
    Answer. The ``nose to tail'' assessment of the aviation safety 
environment was completed earlier this year. Analysis of the study 
suggests that a number of factors combined to create an environment 
where complacency, rate of change, inadequate leadership, lack of focus 
on aviation professionalism and incomplete risk management undermined 
the overall safety posture of Coast Guard aviation. Common in each of 
the recent mishaps was a failure to adequately address risk factors 
when the perceived risk was low. There was also a sense of complacency, 
and an environment existed in which safety policies and safeguards were 
not effective in preventing mishaps.
    The Coast Guard Aviation Safety Assessment Action Plan (ASAAP) 
identified immediate action items to counter these negative 
environmental factors and provides a plan of action to prevent similar 
mishaps in the future. As a result of strong leadership at every level 
within the aviation community, a commitment to aviation 
professionalism, and immediate actions taken to adopt the ASAAP 
recommendations, one-year has passed since the last major aviation 
mishap. The Coast Guard will continue to emphasize that maintaining 
professionalism requires continual learning, mastery of the operations, 
and knowledge of policy, regulation and mission requirements.

    Question 5. Since September 11, 2001, Coast Guard aviation, 
specifically helicopters, has adopted new mission capabilities to 
support the service's new homeland security missions. Each new mission 
requires qualifications and training requirements for pilots and 
aircrew on top of traditional training. Despite these new 
responsibilities, the Coast Guard has the same number of aircraft and 
pilots as it did pre-9/11.
    Does the Coast Guard need more aircraft, pilots and aircrew to 
cover these new special missions? Are aircrews being overextended? Is 
the expertise and proficiency level being diluted as pilots train for 
these new special missions? Does Coast Guard Aviation even need to 
perform these new special missions?
    Answer. Coast Guard minimum aviation asset requirements are 
outlined in the FY 2010 Revised Deepwater Implementation Plan Review 
report to Congress. The Coast Guard balances its rotary wing training 
and resource needs for special missions through the use of existing 
assets and planned accomplishments in the FY 2012 President's Budget.
    The special missions that Coast Guard aircrews have absorbed since 
2001 have made adequate levels of proficiency a challenge. Managing 
multiple qualifications is accomplished by flying a higher percentage 
of mission hours for training.
    The Coast Guard performs the Rotary Wing Air Intercept mission as a 
military service in support of Department of Defense's OP NOBLE EAGLE 
air defense mission. The Coast Guard's Airborne Use of Force and Fast 
Roping capabilities were developed and utilized in our traditional Law 
Enforcement role in the late 1990s, and as the Maritime Security 
mission grew after September 11, 2001, the use of these latter two 
capabilities expanded.

    Question 6. You mentioned this disturbing trend in accidents in 
your State of the Coast Guard speech and said training needs to lead 
toward the higher level of proficiency and not just qualification. Can 
you give an example of what you are now doing in your training programs 
to achieve a higher level of proficiency? Will this require the Coast 
Guard to narrow its mission focus?
    Answer. For aviation, the Coast Guard has significantly modified 
the aircrew grading system to better stratify individual performance 
levels. The legacy grading system evaluated aircrew performance on a 
Pass or Fail basis. The stratification allows evaluators to provide 
more comprehensive feedback to pilots, improving proficiency.
    For tactical, high risk boarding teams, Special Missions Training 
Center (SMTC) in Camp Lejeune, NC, has revamped tactical and pursuit 
training based on the results of a comprehensive study. SMTC has been 
allocated new boats, allowing coxswains to be instructed on the same 
equipment they use during everyday operations at their home units. 
Prior to this initiative, coxswains were trained on dissimilar boats. 
The SMTC training program has been improved by adding remedial training 
options for basic tactical operator. Early returns show that this 
remediation training has increased graduation rates while meeting the 
same rigid standards for basic tactical operators. The study also 
indicated a need for increased preparation prior to attending the basic 
course and an increased/revised need for sustainment training at units 
following course attendance. The Coast Guard has initiated these 
changes at field units.
    For surf boats, a new four-week surfman course was instituted in an 
effort to increase the number of qualified surfman by providing fifty 
hours of operations in the surf. This course, coupled with the existing 
Standard Surfman Training Package, has substantially increased the 
number of qualified surfman in the Coast Guard through standardized 
proficiency training, resulting in fewer operational mishaps in the 
high-risk surfman community.
    These initiatives do not require the Coast Guard to narrow its 
mission focus.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                      Admiral Robert J. Papp, Jr.

    Question 1. Coast Guard personnel continue to staff the Gulf Coast 
Incident Management Team, performing standard cleanup operations such 
as manual removal of oily debris and mechanical recovery of oily marsh, 
and working on special operations such as the Submerged Oil Mats 
program. Response activities continue but have diminished substantially 
compared to the height of operations.
    The Coast Guard's response to the oil spill required a significant 
amount of resources from a Service that operates under a small budget, 
when compared to the other Armed Forces. Answers to these questions 
will hopefully highlight some concern within the Coast Guard, as to 
their ability to support future demand for their capabilities. Over the 
course of the oil spill, how much did Coast Guard spend on the 
response? To what extent do these funds come from the Oil Spill 
Liability Trust Fund? If a large spill occurred again given the current 
funding levels, would CG be able to mount an effective response?
    Answer. Over the course of the oil spill, the Coast Guard spent 
$400,640,847 (as of July 27, 2011). This value does not include Coast 
Guard directed payments from the Oil Spill Liability Trust Fund (OSLTF) 
to other government agencies. Of the aforementioned amount, 
$129,707,889 of that funding came from the OSLTF.
    The National Response System contains a series of plans that are 
used to respond to a spill and the resources required will vary for any 
given spill. However, recent experience with several complex oil spills 
including the M/V COSCO BUSAN, the T/V EAGLE OTOME, and DEEPWATER 
HORIZON underscore the importance of having proficient and readily 
deployable incident managers and pollution responders throughout the 
Coast Guard.
    The President's FY 2012 budget request addresses critical resource 
and capacity gaps in marine environmental response in two ways. First, 
the President's FY 2012 budget request seeks funding for Coast Guard 
military and civilian personnel to enhance the Service's marine safety 
and marine environmental response capacity through the establishment of 
a Coast Guard National Incident Management Assist Team. It also 
strengthens oil pollution research by funding a full-time Executive 
Director of the Interagency Coordinating Council for Oil Pollution 
Research.

    Question 2. I am increasingly concerned with the USCG's acquisition 
programs and how problems with it have contributed to your current 
operational hour gaps, meaning there are missions that the American 
people expect the Coast Guard to accomplish, but you're not able to. 
One such area is the patrol boat operational hour shortfall in the tens 
of thousands per year. What missions are not being met by your patrol 
boats? Are patrol boats the only place where you're seeing this 
operating hour gap? If not, where else do you have shortfalls? The 
House recently recommended stripping funding for 2 of your 6 Fast 
Response Cutters due to structural deficiencies . . . can you respond 
to that and what affect would that have on the operating hour 
shortfall?
    Answer. To establish a consistent baseline from which to measure, 
the patrol boat operational hour capacity of 99,400 hours is based on 
programmed operational hours available in 1998 with a full complement 
of 49 110-ft WPBs. In 2010 the 110-ft WPB fleet patrolled 70,065 hours 
resulting in an operational hour gap of 29,335 hours (29.5 percent 
short of the 1998 baseline). Both the hour and hull gaps are acutely 
manifested in the Coast Guard District Seven's area of responsibility, 
which is programmed for 47,400 hours (53 percent of all Coast Guard 
Patrol Boat hours). The below graph illustrates the patrol boat 
operational hour gap and the future projection to close the gap based 
on the Fast Response Cutter (FRC) delivery schedule:
Patrol Cutter Transition Schedule--FY 2012 President's Budget Request



    The primary missions of the 110-ft WPB are Counter-Drug, Alien 
Migration Interdiction Operations, Search and Rescue, Ports Waterways 
and Coastal Security and Living Marine Enforcement. All missions 
continue to be met by the patrol boat fleet but at a reduced 
operational capacity. This reduced capacity inhibits the Coast Guard's 
ability to patrol and enforce applicable laws/regulations and reduces 
overall effectiveness across the entire mission set.
    The patrol boat gap is projected to start closing in FY 2012 with 
the delivery of the first FRC in 2011. Each FRC is designed to be 
operated 2,500 hours annually. Following delivery, testing, and 
evaluation, these new cutters will immediately contribute toward 
mitigating shortages in WPB operational capacity. Specifically, the 
first 12 FRC hulls will be home-ported in Miami and Key West, FL, where 
the patrol boat gap is the most acute. Based on an out-year FRC 
delivery schedule of six FRC deliveries per year projected in the FY 
2012-2016 Capital Investment Plan, the 1998 baseline is anticipated to 
be met in FY 2016. Delivering four FRCs annually equates to a 5,000 
operational hour impact that would shift the attainment of the 1998 
baseline and closure of the patrol boat gap beyond 2020. To mitigate 
operational impacts of any delays in FRC delivery, the 110 ft WPBs, 29 
of 41 which are beyond their 20-year service life, would continue to 
operate until replaced by FRCs.

    Question 3. GAO recently testified that you have been working on a 
Fleet Mixed Analysis since October 2008 and still have not released its 
findings. GAO also said that the initial numbers you're holding onto 
are not feasible in the current fiscal climate. In May, House 
Appropriators claim you've been conducting this analysis since 2004 and 
have yet to submit its findings. This lack of transparency is 
concerning because if you have mission requirements, and don't have the 
resources to accomplish them, we as Congress need to know. When will 
the Fleet Mixed Analysis be ready? Are you getting some independent 
help with this analysis or has it been internal to the Coast Guard?
    Answer. The Fleet Mix Analysis was delivered to Congress on July 
29, 2011. The Coast Guard used a consultant to complete this study.

    Question 4. For your Deepwater acquisition programs, GAO reports 
$3.8B cost overruns when compared to your 2007 baseline and an overall 
35 percent overrun for programs that were re-base lined. In our current 
fiscal state, this is unacceptable and points to re-occurring issues in 
the way the USCG does business. How do you account for such cost growth 
and what is the Service doing to address the overarching problems with 
your acquisition processes?
    Answer. In 2007, the Coast Guard assumed responsibility as Lead 
System Integrator (LSI). Integrated Deepwater System acquisition 
projects were disaggregated into individual Acquisition Program 
Baselines, leveraging project estimates that were provided by ICGS 
under the legacy Deepwater construct. The projected total acquisition 
costs were $24.2 billion and the Life Cycle Cost Estimates (LCCE) were 
approximately $180 billion. Efforts to consolidate the Acquisition 
Directorate, assume Lead System Integrator responsibilities, and 
implement the Blueprint for Continuous Improvement have better equipped 
the Coast Guard to manage costs, schedules and contractor performance.
    Over the past four years, the Coast Guard has focused on improving 
cost management for all related projects and budget accounts, and 
significantly improved its ability to acquire in an integrated fashion 
with rigorous, coordinated participation from technical authorities and 
sponsors.
    As the Coast Guard assumed this role, our focus included a robust 
analysis of all cost estimates, partnering with the U.S. Navy and 
third-party technical experts.

    Question 5. With the permanent decommissioning of 1 of the Coast 
Guard's 2 heavy polar icebreakers, we're losing the ability to support 
national interests in the region, which is especially alarming since 
Russia maintains 8 heavy icebreakers. New shipping routes that were 
previously frozen and unnavigable are now being used by vessels to 
reduce transit times. You recently stated that, ``because of the 
condition of the icebreakers, we are rapidly losing the expertise, and 
we don't have the resources to respond up there to a major emergency.'' 
Is the Coast Guard equipped to properly handle this mission? What 
efforts are under way to ensure we maintain a good grip on our national 
interests in that region?
    Answer. The Coast Guard mission demand for icebreakers in the 
Arctic has been primarily in support of National Science Foundation, 
National Oceanic and Atmospheric Administration, and National 
Aeronautics and Space Administration science missions. As the ice cover 
diminishes, we can expect increased maritime activity, especially in 
the form of vessel transits and natural resource exploration. Coast 
Guard vessel presence and capability will become key factors for 
meeting national response requirements. While Coast Guard could 
potentially respond during extended open water periods of the summer 
using Alaska's buoy tenders, the Coast Guard only has one operational 
icebreaker (HEALY) that is able to work in ice-covered waters in summer 
and the shoulder seasons when Arctic sea ice covers much of the ocean. 
The Coast Guard's reactivation of POLAR STAR for full mission 
capability will be complete in 2013. DHS has proposed an icebreaker 
acquisition analysis in the 2012 President's Budget which will help 
define the long-term icebreaking solution well beyond the expected 
service life of the POLAR STAR.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                      Admiral Robert J. Papp, Jr.

    Question 1. The Coast Guard Authorization Act of 2010 outlined a 
consultation process for sharing of technical expertise between the 
U.S. Coast Guard and Department of Defense, with the objective of 
obtaining the Navy's acquisition program management expertise. Has the 
Coast Guard initiated the memorandum of understanding to facilitate 
technical expertise sharing? What is the status of that process?
    Answer. The Coast Guard presently has approximately 80 interagency 
agreements and memorandums of agreement, primarily with the DOD and 
U.S. Navy. Those agreements are primarily for acquisition management 
and technical expertise sharing. The GAO has verified this fact in 
their April 2011, report GAO-11-480. In this report, the GAO made a 
recommendation that the Coast Guard develop and maintain a repository 
for information on Federal partnerships and Memorandums of 
Understanding (MOUs). The Coast Guard is in the process of establishing 
this repository to ensure that the process for sharing of technical 
expertise between the U.S. Coast Guard and Department of Defense 
outlined in the Coast Guard Authorization Act of 2010 is implemented. 
Once established, the Coast Guard will assess if an additional 
Memorandum of Understanding to facilitate technical expertise sharing 
is necessary.

    Question 2. What are the differences in the acquisitions 
authorities of the U.S. Coast Guard and the Navy?
    Answer. The U.S. Coast Guard and Navy acquisition authorities are 
codified in the following three titles of the U.S. Code:

   Title 10 Armed Forces

   Title 14 Coast Guard

   Title 41 Public Contracts

    Implementation of the law is established in the Code of Federal 
Regulations (CFR) and most of the Coast Guard and the Navy acquisition 
authorities are located in two titles of the CFR:

   Title 41 Public Contracts and Property Management

   Title 48 Federal Acquisition Regulations System (FAR)

    Coast Guard acquisition authority is further defined in DHS and 
Coast Guard regulations, including the Department of Homeland Security 
(DHS) Homeland Security Acquisition Manual (HSAM), DHS Acquisition 
Management Directive 102-01 Revision 01 of 20 January 2010, and Coast 
Guard Major Systems Acquisition Manual (MSAM). Navy acquisition 
authority is further defined by the Defense Federal Acquisition 
Regulation Supplement (DFARS) which is part of the FAR. From the DFARS, 
the Navy acquisition authority is further refined in DOD and Navy 
regulations.
    In general, many of the Coast Guard and the Navy acquisition 
authorities are the same. There are, however, significant differences 
in the area of major acquisition programs, as that portion of Title 10 
applicable to Major Acquisition Programs (Chapter 144) is not 
applicable to the Coast Guard (the term ``major defense acquisition 
program'' means a Department of Defense acquisition program,'' 10 
U.S.C.  2430(a)). The Defense Acquisition Regulation Supplement also 
contains additional authorities that are DOD-specific.
    One other notable difference is that the Navy has well established 
multi-year/multi-ship authority. Multi-year/multi-ship contracts allow 
the procurement of known requirements for up to 5 years, even though 
the total funds ultimately to be obligated may not be available at the 
time of contract award.

    Question 3. The Coast Guard Authorization Act of 2010 set forth a 
number of changes that will affect fishing vessels operating in Federal 
waters, including new construction standards for vessels built after 
July 1, 2012. While the high fatality rates that plague the fishing 
industry are deeply troubling, the implementation of new training, 
classing and loadline requirements are of concern to the fishing 
industry, particularly those already enduring regulatory changes that 
stress their financial viability. When does the Coast Guard expect to 
promulgate rules on the implementation of new training requirements? 
How can the Coast Guard ensure that the new construction requirements 
will not deter the fishing industry from pursuing necessary upgrades or 
vessel replacements?
    Answer. The Coast Guard does not have discretion to modify or 
exempt the requirements for construction standards and classing of 
vessels as mandated by the Coast Guard Authorization Act (Act) of 2010. 
The new requirements may or may not deter the fishing industry from 
pursuing necessary upgrades or vessel replacements and impact their 
financial viability. However, the industry will be involved in 
developing new alternate safety compliance program requirements for 
older vessels and vessels altered after July 1, 2012, so that the 
impact of these requirements will be taken into consideration in the 
adoption of the final alternate safety program requirements.
    As set forth in the Act, construction standards apply to new 
vessels. Vessels built after January 1, 2010, are less than 50 feet 
overall in length, and operate beyond three nautical miles from the 
baseline, must at least meet the safety standards established for 
recreational vessels. Vessels built after July 1, 2012, are at least 50 
feet overall in length, and operate beyond three nautical miles from 
the baseline, must meet all survey and classification requirements 
prescribed by the American Bureau of Shipping or other similarly 
qualified organization. For instance, Det Norske Veritas (DNV), a 
similarly qualified organization, is currently developing rules for 
survey and classification of fishing vessels and hopes to have them 
completed by early 2012.
    Vessels that are upgraded through a significant alteration or a 
substantial change to its dimensions or type will have to meet 
standards of an alternate safety compliance program. This applies to 
vessels built before July 1, 2012 and altered after that date, are at 
least 50 feet overall in length, and operate beyond three nautical 
miles from the baseline. The alternate safety compliance program 
requirements will be developed by the Coast Guard in cooperation with 
the industry and consultation with and recommendations from the 
Advisory Committee, and must be implemented not later than January 1, 
2017. The alternate safety requirements may be developed for specific 
regions and fisheries. All vessels meeting the criteria above, whether 
altered or not, and are 25 years of age or older must comply with an 
alternate safety program after January 1, 2020.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Roger F. Wicker to 
                      Admiral Robert J. Papp, Jr.

    Question 1. A multi-year contract would save tax payer money and 
stabilize the industrial workforce by guaranteeing procurement beyond a 
single year. Now that the NSC design is mature, would you support 
multi-year contract authority for this program, recognizing that some 
changes in your current acquisition strategy may be required?
    Answer. We cannot execute the National Security Cutter (NSC) 
project under a multi-year procurement construct given the current NSC 
contract structure.

    Question 2. Assuming NSCs 6, 7, and 8 are contracted in FY 2013, 
2014, and 2015, respectively, can you quantify how much they would cost 
if contracted individually? Similarly, can you quantify the cost of 
these three NSCs if purchased with multiyear contract authority, 
assuming a Congressional funding commitment in FY 2013?
    Answer. Contracting individually for National Security Cutters 
(NSCs) 6, 7, & 8 are consistent with the current FY 2012-2016 NSC 
Capital Investment Plan (CIP) for single-year funding of each NSC. 
Under the assumptions of the CIP, the total planning cost for each NSC 
and related project costs are as follows:

----------------------------------------------------------------------------------------------------------------
                                                    Single-Year Funding  Appropriation
                     Segment                                      Amount                Year of Planned  Funding
----------------------------------------------------------------------------------------------------------------
NSC #6                                                                          $775M                      2013
----------------------------------------------------------------------------------------------------------------
NSC #7                                                                          $795M                      2014
----------------------------------------------------------------------------------------------------------------
NSC #8                                                                          $815M                      2015
----------------------------------------------------------------------------------------------------------------
Structural Enhancement for NSCs #1/#2                                            $38M                      2015
----------------------------------------------------------------------------------------------------------------
Project Close-out                                                                $45M                      2016
----------------------------------------------------------------------------------------------------------------

    With Multi-year contract authority, all three NSCs could be ordered 
together. It is possible that savings could accrue due to economic 
order quantities, increased productivity, and improved scheduling. 
Coast Guard estimates that the potential savings derived with Multi-
year contract authority could be approximately $85 million as shown 
below.

----------------------------------------------------------------------------------------------------------------
                   Coast Guard estimates for Single-Year and Multi-Year NSC Funding Scenarios
-----------------------------------------------------------------------------------------------------------------
                Segment                         Single-Year Funding                       Multi-Year
----------------------------------------------------------------------------------------------------------------
NSC #6                                                               $775M                                $750M
----------------------------------------------------------------------------------------------------------------
NSC #7                                                               $795M                                $765M
----------------------------------------------------------------------------------------------------------------
NSC #8                                                               $815M                                $785M
----------------------------------------------------------------------------------------------------------------
Structural Enhancement for NSCs #1/#2                                 $38M                                 $38M
----------------------------------------------------------------------------------------------------------------
Project Close-out                                                     $45M                                 $45M
----------------------------------------------------------------------------------------------------------------
Est. Reduction from Single-Year Funding                                                                    $85M
----------------------------------------------------------------------------------------------------------------

    Question 3. In light of the proposed decommissioning of Pascagoula, 
Mississippi-based ``Patrol Coastal'' Cutters, does the Coast Guard have 
a long range plan to replace these cutters in Pascagoula, and cover the 
potential mission gap in the Gulf of Mexico region?
    Answer. The return of the PC-179's to the Navy, which were 
originally transferred to the Coast Guard as part of a mitigation 
strategy for the patrol boat operational hour gap, results in a short-
term loss of patrol boat operational capacity in mission areas that 
include Counter-Drug (CD), Alien Migration Interdiction Operations 
(AMIO) and Living Marine Resources/Other Law Enforcement (LMR/OLE). 
This capacity will be filled by the delivery of Sentinel Class patrol 
boats beginning in early 2012, several of which will be homeported in 
the Gulf Coast region.

                                  
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