[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]



 
  UPDATE ON COAST GUARD ACQUISITION PROGRAMS AND MISSION BALANCE AND 
                             EFFECTIVENESS

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

                                (115-50)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 24, 2018

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
             
             
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     Available online at: https://www.govinfo.gov/committee/house-
     transportation?path=/browsecommittee/chamber/house/committee/
                             transportation
                             
                             
                             
                         _________ 

            U.S. GOVERNMENT PUBLISHING OFFICE
                   
33-619 PDF           WASHINGTON : 2018      
                             
                             
                             
                             
                             
             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                             Columbia
FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
SAM GRAVES, Missouri                 ELIJAH E. CUMMINGS, Maryland
DUNCAN HUNTER, California            RICK LARSEN, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
JEFF DENHAM, California              ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky              JOHN GARAMENDI, California
MARK MEADOWS, North Carolina         HENRY C. ``HANK'' JOHNSON, Jr., 
SCOTT PERRY, Pennsylvania                Georgia
RODNEY DAVIS, Illinois               ANDRE CARSON, Indiana
MARK SANFORD, South Carolina         RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia                 DINA TITUS, Nevada
TODD ROKITA, Indiana                 SEAN PATRICK MALONEY, New York
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut, 
BRIAN BABIN, Texas                       Vice Ranking Member
GARRET GRAVES, Louisiana             LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia           CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina         JARED HUFFMAN, California
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
DOUG LaMALFA, California             DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas            ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania          BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan              MARK DeSAULNIER, California
JOHN J. FASO, New York               STACEY E. PLASKETT, Virgin Islands
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota
MIKE GALLAGHER, Wisconsin
                                ------                                

        Subcommittee on Coast Guard and Maritime Transportation

                  DUNCAN HUNTER, California, Chairman
DON YOUNG, Alaska                    JOHN GARAMENDI, California
FRANK A. LoBIONDO, New Jersey        ELIJAH E. CUMMINGS, Maryland
GARRET GRAVES, Louisiana             RICK LARSEN, Washington
DAVID ROUZER, North Carolina         JARED HUFFMAN, California
RANDY K. WEBER, Sr., Texas           ALAN S. LOWENTHAL, California
BRIAN J. MAST, Florida               STACEY E. PLASKETT, Virgin Islands
JASON LEWIS, Minnesota, Vice Chair   PETER A. DeFAZIO, Oregon (Ex 
BILL SHUSTER, Pennsylvania (Ex           Officio)
    Officio)
    
    
                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               WITNESSES

Vice Admiral Michael F. McAllister, Deputy Commandant for Mission 
  Support, U.S. Coast Guard:

    Oral statement...............................................     4
    Joint prepared statement of Vice Admiral McAllister and Vice 
      Admiral Abel...............................................     8
Vice Admiral Daniel B. Abel, Deputy Commandant for Operations, 
  U.S. Coast Guard:

    Oral statement...............................................     6
    Joint prepared statement of Vice Admiral Abel and Vice 
      Admiral McAllister.........................................     8
Marie A. Mak, Director of Contracting and National Security 
  Acquisitions, U.S. Government Accountability Office:

    Oral statement...............................................    10
    Prepared statement...........................................    12

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. John Garamendi of California................................     4


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  UPDATE ON COAST GUARD ACQUISITION PROGRAMS AND MISSION BALANCE AND 
                             EFFECTIVENESS

                              ----------                              


                         TUESDAY, JULY 24, 2018

                  House of Representatives,
          Subcommittee on Coast Guard and Maritime 
                                    Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:02 a.m. in 
room 2167, Rayburn House Office Building, Hon. Duncan Hunter 
(Chairman of the subcommittee) presiding.
    Mr. Hunter. The subcommittee will come to order. Before we 
start I would like to do a pause for a moment.
    July 24, 1998, was a Friday 20 years ago, a normal day in 
Congress, until an armed man entered the Capitol. Two heroic 
individuals, Police Officer Jacob Chestnut and Special Agent 
John Gibson, engaged the gunman and saved numerous Members, 
staff, and tourists in the building. Both brave men lost their 
lives that day.
    As we go about our daily lives, we may not always remember 
the dangerous situations first responders, police officers, 
firemen, our service men and women put themselves in when they 
go to work every day. By remembering Police Officer Chestnut 
and Special Agent Gibson, we honor their lives and sacrifice. 
It reminds us of the many officers and servicemembers who fall 
in the line of duty. It is important for us to remember it 
takes dedication, devotion, and selfless acts to protect their 
fellow citizens and their Nation.
    Let us pause for a moment of silence to remember Officer 
Chestnut and Special Agent Gibson.
    [A moment of silence was observed.]
    Mr. Hunter. Thank you. Now we will talk Coast Guard.
    The subcommittee is meeting today to review how the Coast 
Guard is integrating their acquisition, manpower, and 
maintenance plans to align to their mission needs and assure 
the Service has the assets, personnel, and expertise needed to 
carry out its missions.
    On June 1, 2018, Admiral Karl Schultz became the 26th 
Commandant of the Coast Guard. His guiding principles for the 
Service are: ready, relevant, and responsive. He said, ``These 
guiding principles frame my direction and will support the 
Department of Homeland Security, the Secretary of Defense and 
combatant commanders, and other national and global maritime 
interests.''
    Admiral Schultz and his senior leadership team are in the 
midst of reviewing the status of the Coast Guard and making 
changes to align the Service with those guiding principles. 
Today, we will hear from two members of that team, and look 
forward to better understanding their perspectives on the 
status of the Coast Guard.
    The ongoing recapitalization of the Service's cutters was 
planned two decades ago to address mission demands at that 
time. The world and the demands of the Coast Guard have since 
changed, and it is critical that the Service be ready to 
respond to the demands of today, as well as those that will 
exist in decades to come.
    It is also important that the Coast Guard is prepared to 
manage capability gaps that are occurring and likely to 
continue to occur as recapitalization continues.
    The decisions being made today will shape the Coast Guard 
of the future. The cutters being built today have a planned 30-
year service life and will probably serve much longer. And the 
final OPC [Offshore Patrol Cutter] in production is projected 
to be patrolling the seas until 2064.
    Like Admiral Schultz, Congress wants to ensure the Coast 
Guard is ready, relevant, and responsive for years to come. In 
order to do so, we need accurate information from the Service 
to determine whether current plans will provide the 
capabilities to meet future demands.
    Even more important than Coast Guard ships and aircraft are 
the people who operate them. The Coast Guard's Active Duty 
workforce is only slightly larger than that of the New York 
City Police Department and less than one-quarter the size of 
the next smallest U.S. Armed Force. Congress has encouraged the 
Coast Guard to better understand and articulate its workforce 
needs to meet current and emerging needs.
    Looking forward, it is likely that the Service will need to 
make tough strategic decisions regarding how Coast Guard 
personnel are allocated. Even before the advent of a new 
cybersecurity operating domain, the Coast Guard was struggling 
to meet mission demands. Creating a cybersecurity workforce 
while also conducting legacy operations poses an additional 
challenge that must be addressed immediately.
    In addition to our focus on Coast Guard assets and 
personnel, this subcommittee has continually pushed the Service 
to improve its shore infrastructure made up of approximately 
43,400 assets nationwide. Unfortunately, even after several 
years of us stressing the need for action, much of that 
property is in dire need of rebuilding or repair.
    While Coast Guard leaders consistently stress the 
importance of investing in shore infrastructure, the budgetary 
tradeoffs being made within the Coast Guard and the 
administration do not reflect a genuine commitment to address 
this need. For example, despite a shore infrastructure backlog 
of more than $1.5 billion, the Coast Guard's fiscal year 2019 
budget request only includes $30 million to address those 
projects.
    Shore infrastructure is critical to every Coast Guard 
mission: cutters need piers, aircraft need runways, inspectors 
need buildings, etc. And if the Service truly desires to remain 
ready, relevant, and responsive, it needs to find ways to 
address these critical needs.
    The Government Accountability Office, GAO, has issued a 
number of reports since 2012 reviewing Coast Guard acquisition 
programs and providing recommendations to improve those 
programs. Over the years the Coast Guard has agreed with many 
of these recommendations, and agreed to take action on them. 
However, the new GAO report released today notes that the Coast 
Guard has not fully implemented those prior recommendations. 
Hopefully, today's hearing will help us understand why that is.
    A new senior leadership team brings new perspectives, new 
ideas, and new priorities. I look forward to hearing from our 
witnesses today on how they see the Coast Guard and how we can 
best position the Service for success going forward.
    I now yield to Ranking Member Garamendi.
    You are recognized.
    Mr. Garamendi. Once again, Mr. Chairman, thank you for the 
hearing. Thank you for your leadership on this, and your 
statement which covers most everything I was about to say.
    So I won't say it all, but I will ask that it go into the 
record. And so----
    Mr. Hunter. Without objection.
    Mr. Garamendi. Thank you. And then I will go on for the 
next 4\1/2\ minutes and cover some things.
    The bottom line of it is the Coast Guard has far more 
responsibilities than they have money to carry out those 
responsibilities. I think all of us believe that they are 
working hard to achieve the goal and make the most that they 
can with what they have available.
    But I am perplexed that in the time of extraordinary need 
for the Coast Guard to protect our Nation from immigrants, drug 
traffickers, the melting of the Arctic Ocean ice, China and 
Russia claiming not only access, but rights to the land beneath 
the ocean, the Arctic Ocean, that the House Appropriations 
Committee will tomorrow take up the Homeland Security 
appropriation bill and cut the Coast Guard by over $1 billion 
so that a border wall can be built, a big, beautiful border 
wall that the President so much wants.
    I find it very difficult to believe that the Appropriations 
Committee will actually do that. No, I believe they will do 
that: $1 billion--or more, actually--out of the Coast Guard 
budget for a big, beautiful wall.
    So my questions are going to be on that issue to the three 
witnesses today. What does it mean? I think we all need to be 
aware of what it means.
    Also, the money for the icebreakers was eliminated. My 
question to us, really--not to the Coast Guard so much, but to 
us--is what in the hell are we doing here, that we are so 
incorrect in our prioritization of issues? Yes, we make 
choices. This is a particularly bad choice being made by the 
Appropriations Committee.
    Mr. Garamendi. So with that, I yield back. And you know 
where I am going to go in this hearing.
    [Mr. Garamendi's prepared statement follows:]
                                 
        Prepared Statement of Hon. John Garamendi of California
    Thank you, Mr. Chairman, I am looking forward to this morning's 
update on the status of several important Coast Guard acquisition 
programs. Allow me to welcome our witnesses from the Coast Guard and 
the Government Accountability Office.
    I am interested in learning what the Coast Guard has done to better 
integrate its acquisition programs with its workforce levels and its 
performance measures.
    As we all know, the Coast Guard is in the middle of the most 
expensive and far-reaching recapitalization of its offshore fleets of 
cutters and airframes in the history of the Service. Fortunately, from 
what we know the new assets delivered thus far, while expensive, have 
more than demonstrated their worth in terms of increased capability.
    Unlike the other armed services, however, the Coast Guard was hurt 
by the mandatory funding cuts imposed under the Budget Control Act. And 
while I am certainly pleased with the increased funding levels provided 
in the Coast Guard's fiscal year 2018 appropriation, we would be 
foolish to expect such increases to be maintained in the face of the 
ballooning budget deficit.
    It remains critical then, that the Coast Guard correctly balance 
the integration of new assets with the new demands placed upon the 
Service. Yet, within this calculus, it also remains critical that the 
Coast Guard not allow its traditional missions, such as marine safety 
inspections and environmental law enforcement, to be neglected or 
allowed to wither.
    It is incumbent upon this subcommittee to make sure that the Coast 
Guard is indeed striking the correct balance. And if not, we must be 
prepared to take whatever appropriate actions necessary to make sure 
that the Coast Guard is applying its resources to address its missions' 
needs.
    Again, I thank Chairman Hunter for convening this morning's hearing 
and look forward to the discussion.

    Mr. Hunter. I thank my friend from California.
    Today we are going to hear from Vice Admiral Michael 
McAllister, Deputy Commandant for Mission Support of the Coast 
Guard; Vice Admiral Daniel Abel, Deputy Commandant for 
Operations of the Coast Guard; and Ms. Marie Mak, Director of 
Contracting and National Security Acquisitions with the GAO.
    Admiral McAllister, you are recognized to give your 
statement.

    TESTIMONY OF VICE ADMIRAL MICHAEL F. MCALLISTER, DEPUTY 
COMMANDANT FOR MISSION SUPPORT, U.S. COAST GUARD; VICE ADMIRAL 
 DANIEL B. ABEL, DEPUTY COMMANDANT FOR OPERATIONS, U.S. COAST 
 GUARD; AND MARIE A. MAK, DIRECTOR OF CONTRACTING AND NATIONAL 
  SECURITY ACQUISITIONS, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Admiral McAllister. Well, good morning, Chairman Hunter, 
Ranking Member Garamendi, distinguished members of the 
subcommittee. Thank you for the opportunity to highlight the 
key role of the mission support enterprise and your continued 
strong support of the Coast Guard and our people. And I request 
that our joint written testimony between Admiral Abel and 
myself be entered into the record.
    Mr. Hunter. Without objection.
    Admiral McAllister. I am pleased to have the opportunity to 
testify today alongside Ms. Mak, as well as my colleague, Vice 
Admiral Abel, to speak to the Coast Guard's activities to 
achieve readiness in the near term, as well as in the future.
    Admiral Abel and I have only been in our new positions a 
few weeks now, but already our focus areas are becoming clear. 
And I would like to share some of those with you today.
    By way of introduction, Coast Guard mission support is 
responsible for manning Coast Guard--managing Coast Guard 
assets--ships, aircraft, shore facilities, C4IT [command, 
control, communications, computers, and information technology] 
systems--from the day we initiate an acquisition until the day 
we decommission the asset.
    But I really want to start off by talking about a more 
important support mission. We are focused on recruiting, 
developing, supporting, and retaining the Service's most 
critical asset, our people, to be part of a mission-ready Coast 
Guard workforce. Attracting the best to our Service demands a 
focus on diversity, and I am proud to note that this year's 
entering class at the Coast Guard Academy, who was just sworn 
in a few weeks ago now, is one of the most diverse ever, with 
36 percent under-represented minorities and 40 percent women. 
And while the Coast Guard has among the highest retention rates 
of all the military services, we continue to focus on keeping 
our skilled, high-performing, and diverse workforce into the 
future.
    We are also committed to ensuring that Coast Guard women 
and men have the right knowledge and tools to successfully 
execute our challenging missions, and Admiral Schultz has 
focused on enhancing career development, closing gaps in 
training, and providing the right information technology to 
enhance performance in the field, among other initiatives.
    Recapitalization continues to be a Coast Guard priority. 
With the help of Congress, and particularly this subcommittee, 
we have made great progress in refining our acquisitions 
programs to deliver assets on time and on budget. We have seen 
both acquisition and operation success in National Security 
Cutters and Fast Response Cutters. And this week we will 
welcome the 28th Fast Response Cutter to the fleet in a 
ceremony in Alexandria: the Coast Guard cutter Nathan 
Bruckenthal, named in honor of a Coast Guard enlisted member 
who was killed in the line of duty while carrying out critical 
maritime security duties during the Iraq War.
    We are on track to award a contract for small, unmanned 
aircraft system capability for the National Security Cutter 
fleet this fiscal year. We expect to begin production of the 
first Offshore Patrol Cutter later this year, and we are well 
poised to award the detail design and construction contract in 
our heavy polar icebreaker program in fiscal year 2019. And we 
are continuing activities to recapitalize the inland waterways 
fleet.
    And while recapitalizing an aging fleet is critical, 
sustaining that fleet and the related shore infrastructure is 
also a priority. The Coast Guard needs to rebuild readiness 
with sound investments in our operations and maintenance 
accounts. While the other Armed Forces have begun to be made 
whole, your Coast Guard has not yet seen much relief. This 
results in deferred maintenance, fewer spare parts, and 
reliability and security concerns with our C4IT systems. For 
these reasons, ensuring our Service's readiness is one of 
Admiral Schultz's top priorities.
    I thank Congress for your support in fiscal year 2018, both 
in the omnibus appropriations and the recent supplemental 
funding to rebuild our shore infrastructure following last 
fall's catastrophic hurricanes.
    Admiral Abel and I took the opportunity just last week to 
visit some of our most impacted units in Puerto Rico and the 
Virgin Islands. We have amazingly resilient Coast Guard members 
there who, despite the impacts of the storms on their homes and 
their communities, are focused on rapidly restoring full Coast 
Guard mission capability. Our commitment is to ensure that we 
take care of our people, both in the near and long term, while 
we wisely rebuild with a focus on resiliency.
    In closing, I would like to recognize the oversight and 
strong support that this subcommittee continues to provide to 
your Coast Guard. Today, together it is our people and our 
assets that allow the Coast Guard, as our Commandant, Admiral 
Schultz says, and Chairman, as you noted before, to be ready, 
relevant, and responsive to our Nation's needs.
    As this subcommittee knows, a well-equipped and resourced 
Coast Guard is essential to ensure prosperity and national 
security.
    Thank you very much for the opportunity to testify, and I 
look forward to your questions, sir.
    Mr. Hunter. Thank you, Admiral McAllister.
    Admiral Abel, excuse me, you are recognized.
    Admiral Abel. Good morning, Chairman Hunter, Ranking Member 
Garamendi, distinguished members of the subcommittee. I thank 
you for the opportunity to testify on the U.S. Coast Guard 
mission balance and allocation of operational resources.
    I am pleased to appear alongside Ms. Mak, the Government 
Accountability Office, and Vice Admiral McAllister, my shipmate 
who does mission support.
    It is the strong support of the administration and Congress 
that enables the Coast Guard to be a ready, relevant, and 
responsive Service. Today's Coast Guard broad authorities and 
complementary capabilities align with national security, marine 
safety, as well as economic prosperity priorities like no other 
military service or Federal agency.
    On a daily basis, we balance our assets and crews across 
these national priorities, ensuring a strong and valuable $4.6 
trillion Maritime Transportation System: protecting our borders 
seaward, where transnational criminal organizations are the 
most vulnerable, eroding corrosive elements in Central American 
nations that serve as catalysts for migration, enforcing our 
Nation's sovereignty in the Arctic, and ensuring proper 
stewardship for the maritime and expanding into the vitally 
important maritime cyber domain.
    The Coast Guard Service objective is a balance of missions, 
so that limited resources are optimized and applied to the 
highest risks and threats. We confront and mitigate these risks 
and threats by leveraging a force package that incorporates 
intelligence, Maritime Patrol Aircraft, advanced cutters, 
airborne use-of-force helicopters, over-the-horizon boats, and, 
most importantly, highly trained Coast Guard women and men.
    Our allocational resources to meet these missions are 
nimble, adaptive, and well-integrated with our partners, 
domestic and international. Whether we are targeting illicit 
traffickers or responding to a large-scale natural disaster, 
the Coast Guard prides itself on applying its limited resources 
to the areas of highest risk.
    As you are aware, 2017 was a noteworthy year for your Coast 
Guard. During Hurricanes Harvey, Irma, and Maria, Coast Guard 
women and men in helicopters, boats, cutters, vehicles, and on 
foot rescued 11,300 people and over 1,500 pets. During 
Hurricane Harvey, Coast Guard helicopter crews started rescuing 
people around noon off of Corpus Christi, Texas, even before 
Hurricane Harvey had made landfall.
    For every one of these disasters, Coast Guard crews, Active 
Duty, Reserve, auxiliary and civilians, typically are the first 
Federal responders to reenter an impacted area to make rescues, 
assess damage, and to begin the recovery process. And they 
apply our cultural focus on on-scene initiative and a bias for 
action. As for context, in an average year the Coast Guard 
saves about 3,600 lives. The Coast Guard tripled that number in 
Harvey alone.
    In addition to search-and-rescue operations, the Coast 
Guard continued to deploy forces to impacted regions to restore 
ports and waterways, respond to pollution, provide security and 
additional law enforcement throughout the region, and 
protection of offshore petrochemical platforms. Within 5 weeks 
of Hurricane Harvey and Maria, which had affected over 2,500 
miles of coastline, the Coast Guard had responded to 1,200 aids 
to navigation discrepancies necessary to provide the relief of 
supplies and restore commerce, handled 290 pollution cases, 
targeted over 3,600 vessels aground, removing over 1,600 of 
them.
    The Coast Guard damage and recovery assistance teams were 
on scene within hours, determining port status, leveraging 
technology, including the employment of electronic aids to 
navigation to reopen the ports.
    Additionally, the Coast Guard excelled in our day-to-day 
mission. We interdicted more cocaine at sea in 2017 than all 
other law enforcement agencies combined: 223 metric tons, 
hitting in bulk where the transnational criminal organizations 
are the most vulnerable.
    More important, we referred over 600 suspected smugglers to 
the Department of Justice for prosecution, which bolsters a 
unified, all-of-Government approach to dismantle these 
networks.
    These operational examples demonstrate our Service's 
ability to leverage strategic planning process and maximize our 
limited resources to the greatest effects. Our strong sustained 
performance during periods of national and international crisis 
that demand a high operational tempo are the hallmark of our 
Coast Guard. And it is often accomplished by stretching our 
crews and taking measured risks in the application of our 
national assets.
    The resources you provide our Coast Guard are being put 
into good hands. When the citizens of our Nation are having 
their worst day, your Coast Guard is at its best.
    The National Security Cutters and Fast Response Cutters 
have yielded an effective, modernized, intel-driven Coast 
Guard, and we are eager to introduce the Offshore Patrol 
Cutter, Waterway Commerce Cutter, and the heavy polar 
icebreaker into our fleet mix. This mix of assets will ensure 
that your Coast Guard is semper paratus well into the future.
    Thank you, Mr. Chairman, Ranking Member, and members of 
this committee. I appreciate the opportunity to testify, and I 
look forward to your questions.
    [The joint prepared statement of Vice Admiral McAllister 
and Vice Admiral Abel follows:]
                                 
Joint Prepared Statement of Vice Admiral Michael F. McAllister, Deputy 
Commandant for Mission Support, and Vice Admiral Daniel B. Abel, Deputy 
              Commandant for Operations, U.S. Coast Guard
    Good morning, Chairman Hunter, Ranking Member Garamendi, and 
distinguished members of the subcommittee. We appreciate the 
opportunity to testify today and thank you for your enduring support of 
the United States Coast Guard.
    As the world's premier, multi-mission, maritime service, the Coast 
Guard offers a unique and enduring value to the Nation. The only branch 
of the U.S. Armed Forces within the Department of Homeland Security 
(DHS), a Federal law enforcement agency, a regulatory body, a first 
responder, and a member of the U.S. Intelligence Community--the Coast 
Guard is uniquely positioned to help secure the maritime border, combat 
transnational criminal organizations (TCOs), facilitate and safeguard 
commerce on America's waterways, and protect our nation's interests in 
the Polar Regions.
    The Department's efforts to secure our borders and execute the 
Administration's direction ``to deploy all lawful means to secure the 
Nation's southern border'' \1\ relies on the Coast Guard to support 
this comprehensive security strategy. The Coast Guard protects the U.S. 
maritime border--not just by operating in U.S. territorial waters, but 
by extending out our nation's borders by conducting operations off the 
coasts of South and Central America. Employing an interdiction package 
consisting of air and surface assets, specialized personnel, and broad 
authorities, the Coast Guard is positioned to disrupt illicit 
trafficking ventures and threats to our nation far from our shores, and 
where they are most vulnerable--at sea.
---------------------------------------------------------------------------
    \1\ Executive Order on Border Security and Immigration Enforcement 
Improvements, 25 January 2017.
---------------------------------------------------------------------------
    Leveraging nearly 30 multilateral and bilateral agreements and 
working with a host of U.S. and foreign government organizations, the 
Coast Guard's long-term counter-TCO efforts promote stability and 
strengthen the rule of law throughout the Western Hemisphere. Improved 
governance and regional stability decreases TCO-driven violent crime 
and increases economic opportunities--factors that will result in a 
reduction in illegal immigration into our Nation.
    Working with U.S. Government interagency partners, the Coast Guard 
seized 223 metric tons of cocaine and detained and transferred 606 
smugglers for criminal prosecution in fiscal year 2017. Beyond the 
important task of removing cocaine from the illicit trafficking system 
that delivers drugs to U.S. streets, prosecuting smugglers facilitates 
a deeper understanding of TCOs and helps bolster a unified, all-of-
government approach to dismantle these organizations.
    The Coast Guard is at all times an Armed Service \2\ that advances 
national security objectives in ways no other military service can. Our 
combination of broad authorities and complementary capabilities 
squarely align with the President's national security and economic 
prosperity priorities. Appropriately positioned in DHS, the Coast Guard 
is also an important part of the modern Joint Force \3\ and offers 
trusted access to advance mutual interests and preserve U.S. security 
and prosperity.
---------------------------------------------------------------------------
    \2\ 14 U.S.C. Sec.  1; 10 U.S.C. Sec.  101.
    \3\ In addition to the Coast Guard's status as an Armed Force (10 
U.S.C. Sec.  101), see also Memorandum of Agreement Between the 
Department of Defense and the Department of Homeland Security on the 
Use of Coast Guard Capabilities and Resources in Support of the 
National Military Strategy, 02 May 2008, as amended 18 May 2010.
---------------------------------------------------------------------------
    As one of the five Armed Forces, the Coast Guard serves as a force 
multiplier for the Department of Defense (DOD) and deploys worldwide to 
execute our statutory defense operations mission in support of national 
security priorities. On any given day, 11 cutters, two maritime patrol 
aircraft, five helicopters, two specialized boarding teams, and an 
entire Port Security Unit are supporting all geographic DOD Combatant 
Commanders, as well as U.S. Cyber Command, on all seven continents. In 
the Middle East, our squadron of six patrol boats and crews continue to 
police the waters of the Northern Arabian Gulf in close cooperation 
with the U.S. Navy, promoting regional peace and stability. Likewise, 
as one of the principal Federal agencies performing detection and 
monitoring in the southern maritime transit zone, the Coast Guard 
provides more than 4,000 hours of maritime patrol aircraft support and 
2,000 major cutter days to U.S. Southern Command each year.
    We are also the nation's ``maritime first responder.'' Our bias for 
action, and ability to rapidly surge resources in response to emerging 
threats, as most recently demonstrated during last fall's devastating 
hurricane season, are hallmark traits of our Service. Over a 5-week 
period, Hurricanes HARVEY, IRMA, MARIA, and NATE impacted over 2,540 
miles of shoreline and Coast Guard men and women in helicopters, boats, 
cutters, vehicles and on foot rescued over 11,300 people. In addition 
to vital search and rescue operations, the Coast Guard also facilitated 
the rapid reopening of affected portions of the country's Marine 
Transportation System (MTS), opening critical ports and waterways for 
relief supplies and minimizing impacts to the flow of commerce.
    Coast Guard mission readiness relies on the ability to 
simultaneously execute our full suite of missions, while also being 
ready to respond to contingencies. Your Coast Guard prides itself on 
being Semper Paratus--Always Ready--and predictable and sufficient 
resources are necessary to maintain Service readiness in the future. 
Prudence demands we continue investing in a modernized Coast Guard. 
Indeed, recapitalization remains a top priority, and today's efforts 
will shape your Coast Guard and impact national security for decades. 
Your support has helped us make tremendous progress, and it is critical 
we buildupon our successes to field assets that meet cost, performance, 
and schedule milestones.
    With the support of the Administration and Congress, we are making 
significant progress toward building new Polar icebreakers. This past 
March, we released a request for proposal (RFP) as a full and open 
competition, setting the stage for award of a Detail Design and 
Construction (DD&C) contract in fiscal year for the construction of up 
to three heavy Polar icebreakers. We are as close as we have ever been 
to recapitalizing our Polar icebreaking fleet; continued investment now 
is vital to solidify our standing as an Arctic nation and affirms the 
Coast Guard's role in providing assured, year-round access to the Polar 
Regions for decades to come.
    Later this year, we will start to cut steel on the first Offshore 
Patrol Cutter (OPC). The OPC will provide the tools to effectively 
enforce Federal laws, secure our maritime borders, disrupt TCOs, and 
respond to 21st century threats. Continued progress on this acquisition 
is absolutely vital to recapitalizing our aging fleet of Medium 
Endurance Cutters (MECs), some of which have already been in service 
for over a half century. We are in advanced planning to extend the 
service life of a portion of our MEC fleet as a bridge until OPCs are 
delivered, beginning in 2021. In concert with the extended range and 
capability of the National Security Cutter (NSC) and the enhanced 
coastal patrol capability of the Fast Response Cutter (FRC), OPCs will 
be the backbone of the Coast Guard's strategy to project and maintain 
offshore presence.
    We continue to deliver the fleet of new FRCs on budget and on 
schedule. Later this summer we plan to exercise the second option under 
the Phase II contract to begin production of six more FRCs. The fiscal 
year appropriation included funding for two additional FRCs, beyond our 
domestic program of record of 58 hulls, to initiate the 
recapitalization of our six patrol boats supporting enduring U.S. 
Central Command missions in southwest Asia.
    The Service continues efforts to accelerate recapitalization of our 
long-overlooked fleet of 35 river, construction, and inland buoy 
tenders, with an average age of over 52 years. Replacing this aging 
fleet with Waterways Commerce Cutters (WCC), for a modest cost, is 
critical to sustaining the overall safety of our nation's MTS, which 
contributes $4.6 trillion annually to our Gross Domestic Product.
    We are also making progress with fielding unmanned aircraft 
systems, and are working toward awarding a service contract to operate 
small Unmanned Aircraft Systems (sUAS) on our NSC fleet. During the 
proof of concept testing aboard STRATTON, sUAS capabilities enhanced 
effectiveness of the cutter by providing real-time surveillance and 
detection imagery while assisting the embarked helicopter and law 
enforcement teams with interdiction operations. Further, we are 
exploring options for a land-based UAS program to enhance intelligence, 
surveillance, and reconnaissance (ISR), improve maritime domain 
awareness, and increase cued intelligence that our surface assets rely 
on to close illicit pathways in the maritime transit zone. While long-
term requirements are still being finalized, we are moving quickly to 
field this much-needed capability.
    The Coast Guard is also currently seeking statutory authority, 
along with a number of other DHS Operational Components, to acquire and 
operate capabilities to counter illicit use of UAS when such use 
threatens the security of the United States. Although the Coast Guard 
already possesses limited authority to counter UAS's under DOD 
authority, the additional authority that would be provided in this new 
authorization will enable the Coast Guard to more effectively conduct 
its broad range of homeland security missions.
    In concert with efforts to acquire new assets, we are focused on 
improving the existing fleet of cutters and aircraft through 
sustainment programs. The current work being conducted at the Coast 
Guard Yard in Curtis Bay, Maryland, includes a Service Life Extension 
Project (SLEP) to enhance mission readiness and extend the service life 
of icebreaking tugs by approximately 15 years. We are also continuing 
the Midlife Maintenance Availability (MMA) on sea-going buoy tenders to 
address obsolescence of critical ship components and engineering 
systems. The work on these two platforms is vital to sustaining current 
mission performance and essential to maritime commerce.
    In addition to vessel sustainment projects, work continues at the 
Aviation Logistics Center in Elizabeth City, North Carolina, where 
centralized, world-class depot maintenance has been crucial to 
sustaining the mission performance of our rotary and fixed-wing 
aviation assets. The Coast Guard has initiated efforts to extend the 
service life of our aging helicopter fleet until the mid----2030's, 
when we plan to recapitalize these assets in conjunction with DOD's 
Future Vertical Lift program.
    We are also mindful of the condition of our aging shore 
infrastructure and the adverse effects it has on readiness across all 
mission areas. The Coast Guard currently has a $1.6 billion shore 
infrastructure construction backlog that includes piers, sectors, 
stations, aviation facilities, base facilities, training centers, and 
military housing units. We appreciate the tremendous support of 
Congress for supplemental funding appropriated in fiscal year to 
rebuild our damaged shore infrastructure to resilient, modern-day 
standards after a series of devastating hurricanes. Continued 
investment in shore infrastructure is vital to modernizing the Coast 
Guard and equipping our workforce with the facilities they require to 
meet mission.
    While readiness and modernization investments improve current 
mission performance, our Service's greatest strength is undoubtedly our 
people. We are incredibly proud of our 48,000 Active Duty and Reserve 
members, 8,500 civilians, and over 27,000 volunteer members of the 
Coast Guard Auxiliary. Coast Guard operations require a resilient, 
capable workforce that draws upon the broad range of skills, talents, 
and experiences found in the American population. Together with modern 
platforms, our proficient, diverse, and adaptable workforce maximizes 
the Coast Guard's capacity to respond effectively to an increasingly 
complex operating environment.
    History has proven that a ready, relevant, and responsive Coast 
Guard is an indispensable instrument of national security. With the 
continued support of the Administration and Congress, we will preserve 
momentum for our existing acquisition programs and employ risk-based 
decisions to balance readiness, modernization, and force structure with 
the evolving demands of the 21st century. Thank you for the opportunity 
to testify before you today and for all that you do for the men and 
women of the Coast Guard. We look forward to your questions.

    Mr. Hunter. Thank you, Admiral.
    Ms. Mak, you are recognized.
    Ms. Mak. Good morning, Chairman Hunter, Ranking Member 
Garamendi, and members of the subcommittee. Thank you for 
inviting me here today to discuss the Coast Guard's 
recapitalization efforts. These efforts are critical, given 
that many of its legacy assets are beyond their service life 
and are costing a great deal to keep operational.
    However, our most recent report on recapitalization, which 
issued today, continues to indicate that the Coast Guard is 
facing several key challenges with its acquisition portfolio 
management approach.
    Despite better efforts to request what it needs in the 
fiscal year 2019 Capital Investment Plan, or CIP, and the 
unfunded priorities list, the Coast Guard continues to take the 
short-term focus for planning and prioritizing, and it is not 
addressing the long-term affordability of its portfolio. This 
results in where we are today, of having to recapitalize so 
many assets simultaneously.
    The two areas that I would like to highlight today are, 
first, how this planning process impacts the current 
acquisition of its heavy polar icebreaker; and, second, how it 
is driving the Coast Guard to operate and sustain certain aging 
assets longer than expected.
    We found, as far back as 2014, and in our report issued 
today, that the Coast Guard's annual budget-driven tradeoff 
approach creates constant churn, often resulting in capability 
and cost being pushed into the future. Further, we found that 
the Coast Guard's 5-year CIP continues to demonstrate a pattern 
of ineffective planning practices. By not articulating the 
tradeoffs that are made in the acquisition programs, and not 
showing the effects of those annual decisions, it makes it 
difficult for Congress and other stakeholders, such as DHS 
[Department of Homeland Security] and OMB [Office of Management 
and Budget], to fully understand the alternatives and risks.
    Based on our ongoing work, we have found that the Coast 
Guard's short-term planning has driven the acquisition of its 
heavy polar icebreaker program to its current situation, where 
it has not established a sound acquisition business case. For 
shipbuilding programs to be successful, a sound business case 
is essential, which means attaining critical levels of 
knowledge at key points in the process before significant 
investments are made.
    We found that the schedule for delivering the new heavy 
icebreaker is optimistic. It is based on when the Coast Guard's 
only operational heavy icebreaker, the Polar Star, may no 
longer be operational, rather than building a schedule based on 
knowledge, such as using historical lead ship construction 
times. This puts the program at risk of missing its delivery 
dates, and potentially widening the icebreaking capability gap.
    Second, with regards to sustainment, the short-term 
acquisition management approach has driven both the Polar Star 
and the Medium Endurance Cutters to operate well beyond their 
design service lives. While it is not unusual for the Coast 
Guard to operate assets well beyond what was originally 
planned, both of these assets are requiring a larger amount of 
time and resources just to keep their current operational 
capacity.
    Specifically, the Polar Star is requiring additional time 
for its annual maintenance. Although the Coast Guard plans for 
a service life extension for this icebreaker, it is unclear how 
the Coast Guard will be able to complete this work as planned 
during the already-extended maintenance timeframes and continue 
meeting its annual Antarctica mission.
    With the Medium Endurance Cutters, obsolescence of parts is 
a significant issue, and maintenance costs continue to rise. At 
this time, the Coast Guard has yet to determine how many of 
these cutters will undergo a service life extension program 
before the Offshore Patrol Cutters become operational.
    The bottom line is that the Coast Guard cannot continue to 
use its annual budgets to plan for the long-term affordability 
of its major acquisitions. The Coast Guard is in a position 
where it faces some difficult and complex decisions with 
potentially significant costs and mission implications. As 
maritime conditions and threats continue to change, it is not 
ideal timing to have any capability gap with icebreakers or 
Medium Endurance Cutters. As a result, it is vitally important 
for the Coast Guard to develop a more strategic and 
comprehensive approach for managing its acquisition portfolio.
    Chairman Hunter, Ranking Member Garamendi, members of the 
subcommittee, this completes my prepared statement. I would be 
pleased to respond to any questions that you may have. Thank 
you.
    [Ms. Mak's prepared statement follows:]
                                 
Prepared Statement of Marie A. Mak, Director, Contracting and National 
         Security Acquisitions, Goverment Accountability Office
    Chairman Hunter, Ranking Member Garamendi, and members of the 
subcommittee:
    I am pleased to be here today to discuss key challenges the Coast 
Guard faces as it seeks to modernize its aging assets, a process 
referred to as Coast Guard recapitalization, including the management 
of the overall Coast Guard acquisition portfolio. The Coast Guard 
continues to rely on the annual budget process and its 5-year Capital 
Investment Plan (CIP) for long-term acquisition planning, processes 
which we found have contributed to capability gaps and funding 
shortfalls.\1\ For example, as the Coast Guard continues this short-
sighted approach, it is currently experiencing a gap in its polar 
icebreaking capability, because the Coast Guard does not have assets 
available to conduct its missions in both the Arctic and Antarctic 
regions year round. The Coast Guard identified a need for three heavy 
and three medium icebreakers in 2010, but to date it has only one 
active heavy and medium icebreaker. Exacerbating this capability gap is 
the condition of the Coast Guard's only operating heavy polar 
icebreaker, the Polar Star, which we found has experienced longer than 
expected maintenance periods in 2016 and 2017 to prepare for its annual 
mission to Antarctica.\2\
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    \1\ GAO, Coast Guard Acquisitions: Actions Needed to Address 
Longstanding Portfolio Management Challenges, GAO-18-454 (Washington, 
DC.: July 24, 2018); Coast Guard Acquisitions: Limited Strategic 
Planning Efforts Pose Risk for Future Acquisitions, GAO-17-747T 
(Washington, DC.: July 25, 2017); Coast Guard Recapitalization: 
Matching Needs and Resources Continue to Strain Acquisition Efforts, 
GAO-17-654T (Washington, DC.: June 7, 2017); Coast Guard Acquisitions: 
Better Information on Performance and Funding Needed to Address 
Shortfalls, GAO-14-450 (Washington, DC.: June 5, 2014); Coast Guard: 
Portfolio Management Approach Needed to Improve Major Acquisition 
Outcomes, GAO-12-918 (Washington, DC.: September 20, 2012); Coast 
Guard: Actions Needed as Approved Deepwater Program Remains 
Unachievable, GAO-11-743 (Washington, DC.: July 28, 2011).
    \2\ GAO-18-454.
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    My statement today will address challenges in the (1) management of 
the overall Coast Guard acquisition portfolio, and (2) sustainment of 
certain aging assets. This statement is based on our extensive body of 
work examining the Coast Guard's acquisition efforts spanning the past 
several years, including our report on Coast Guard acquisitions 
released today in conjunction with this statement.\3\ We also include 
preliminary information based on our ongoing review of the Coast 
Guard's heavy polar icebreaker acquisition.
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    \3\ For examples of past work see: GAO-18-454; Homeland Security 
Acquisitions: Leveraging Programs' Results Could Further DHS's Progress 
to Improve Portfolio Management, GAO-18-339SP (Washington, DC.: May 17, 
2018); GAO-17-747T; GAO-17-654T; GAO-14-450.
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    For the reports cited in this statement, among other methodologies, 
we analyzed Coast Guard guidance, data, and documentation, and 
interviewed Coast Guard officials at its headquarters and field units 
to determine the total cost of the Coast Guard's acquisition portfolio 
and how the Coast Guard manages its acquisition portfolio. Further 
detailed information on our scope and methodology can be found in the 
reports cited in this statement. For our ongoing work on the polar 
icebreaker, we assessed the status of the Coast Guard's efforts to 
recapitalize its heavy polar icebreaking fleet.
    We conducted the work on which this statement is based in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe the 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
 coast guard faces challenges in effectively managing its acquisition 
                               portfolio
            Short-term Prioritization through the Annual Budget Process 
                    and the 5-Year Capital Investment Plan Limit 
                    Effective Planning
    We found in September 2012, and in our July 2018 review, that the 
Coast Guard's approach of relying on the annual budget process and the 
5-year CIP to manage portfolio affordability does not provide the best 
basis for making decisions to develop a more balanced and affordable 
portfolio in the long term.\4\ Further, in June 2014, we found that 
there is no evidence that short-term budget decisions will result in a 
good long-term strategy, and the Coast Guard's annual budget-driven 
tradeoff approach creates constant churn as program baselines must 
continually realign with budget realities instead of budgets being 
formulated to support program baselines.\5\ This situation results in 
tradeoff decisions between capability and cost being pushed into the 
future. For example, since 2010, the Coast Guard has a stated 
requirement for three medium polar icebreakers, but it has only one 
operational medium icebreaker, the Healy, which has an expected end of 
service life--the total period for which an asset is designed to 
operate--in 2029. Despite the requirement for three medium polar 
icebreakers, Coast Guard officials said they are not currently 
assessing acquisition of the medium polar icebreakers because they are 
focusing on the heavy icebreaker acquisition and plan to assess the 
costs and benefits of acquiring medium polar icebreakers at a later 
time.
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    \4\ GAO-18-454 and GAO-12-918.
    \5\ GAO-14-450.
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    As required by statute, the Coast Guard has, since 2012, prepared a 
5-year CIP that it is required to update and submit annually with the 
administration's budget request.\6\ The 5-year CIP is the Coast Guard's 
key acquisition portfolio planning tool. However, in our July 2018 
review,we found that shortcomings of that plan that limit its 
effectiveness.\7\ Specifically, we found that the Coast Guard's 5-year 
CIPs continue to demonstrate a pattern of certain ineffective planning 
practices, such as not identifying priorities or tradeoffs between 
acquisition programs and not providing information about the effect of 
current decisions on the overall affordability of the acquisition 
portfolio.
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    \6\ 14 U.S.C. Sec.  2902. Since 2012, the Coast Guard has been 
required to submit its CIP with the President's budget in any given 
year. The CIP is approved by DHS and the Office of Management and 
Budget and, as we have reported in the past, is subject to significant 
change each year.
    \7\ GAO-18-454.
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    These shortcomings limit the Coast Guard's ability to manage the 
affordability of its acquisition portfolio. Coast Guard officials said 
the CIP reflects the highest priorities of the department within the 
given top funding level and that prioritization and tradeoff decisions 
are made as part of the annual budget cycle. However, the reasoning 
behind these decisions, and the resulting impacts on affected programs, 
are not articulated in the CIPs. While the Coast Guard is not required 
under statute to identify the effects of tradeoff decisions in the CIP, 
failing to show which acquisitions would take on more risk--such as 
delays to certain recapitalization efforts--so other acquisitions can 
be prioritized and adequately funded within budget parameters also 
makes it difficult for Congress and other stakeholders, such as 
Department of Homeland Security (DHS) and the Office of Management and 
Budget (OMB), to understand any other options the Coast Guard 
considered. GAO's Cost Estimating and Assessment Guide states that 
comparative analyses showing facts and supporting details among 
competing alternatives, such as budget priorities, should consider 
tradeoffs needed to identify solutions and manage risk.\8\ In the 
report we issued today, we recommended that the Coast Guard work with 
Congress to include a discussion of the acquisition programs it 
prioritized and describe how tradeoff decisions made could affect other 
acquisition programs in the Coast Guard's annual 5-year CIP.\9\ DHS 
agreed with our recommendation and plans to include additional 
information in future CIP reports to address how tradeoff decisions 
could affect other major acquisition programs. The Coast Guard plans to 
implement this recommendation by March 2020.
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    \8\ GAO, GAO Cost Estimating and Assessment Guide: Best Practices 
for Developing and Managing Capital Program Costs, GAO-09-3SP 
(Washington, DC.: March 2009).
    \9\ GAO-18-454.
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    In June 2014, we found that the Coast Guard needed to take a more 
strategic approach in managing its acquisition portfolio.\10\ We 
recommended that the Coast Guard develop a 20-year fleet modernization 
plan that would identify all acquisitions necessary for maintaining at 
least its current level of service and the fiscal resources necessary 
to build these assets. DHS concurred with this recommendation and the 
Coast Guard is in the process of developing a 20-year Long-Term Major 
Acquisitions Plan to guide and manage the affordability of its 
acquisition portfolio, but DHS has not yet approved the plan. Such an 
analysis would facilitate a fuller understanding of the affordability 
challenges facing the Coast Guard while it builds the Offshore Patrol 
Cutter, among other major acquisitions.
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    \10\ GAO-14-450.
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    The lack of a long-term plan and continuing to determine priorities 
and make tradeoff decisions based on the annual budget have rendered 
the Coast Guard's acquisition planning reactive. We found that reactive 
planning and the Coast Guard's constrained budget environment have 
created a bow wave of near-term unfunded acquisitions, negatively 
affecting future acquisition efforts and potentially affecting future 
operations.\11\ This bow wave consists of new acquisition programs and 
recapitalization efforts, as well as high-cost maintenance projects 
that use the same acquisition construction and improvements account, 
which continue to put pressure on available resources. These projects 
include some that are not currently identified in the 5-year CIP. For 
instance, the Coast Guard's 87-foot patrol boats are forecast to 
require recapitalization beginning in 2023. Additionally, the ocean-
going 175-foot coastal buoy tenders are past the point in their service 
lives when a midlife maintenance availability would normally have been 
conducted.\12\ In July 2018, we found that that the Coast Guard has 
historically operated vessels well past their expected end of service 
life, and it will likely need to do so with these assets given limited 
available acquisition funding.\13\
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    \11\ According to GAO's schedule assessment guide and cost 
estimating and assessment guide, bow wave refers to a large amount of 
funding that will be required in the future to complete an acquisition 
due to deferred or delayed work. Often the funding required at the peak 
of a bow wave is unrealistic. See GAO, Schedule Assessment Guide: Best 
Practices for Project Schedules, GAO-12-12OG (Washington, DC.: May 
2012) and GAO-09-3SP.
    \12\ Midlife maintenance availabilities occur near the midpoint of 
a cutter's life and are intended to correct system obsolescence issues 
and maintain asset reliability and supportability throughout the 
remainder of a cutter's service life.
    \13\ GAO-18-454.
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            Executive Oversight Council Has Not Conducted Annual 
                    Reviews of All Acquisitions Collectively
    The Coast Guard has a management body--the Executive Oversight 
Council--in place to conduct oversight of its major acquisition 
programs; however, this management body has not conducted oversight 
across the entire acquisition portfolio using a comprehensive, 
collective approach.\14\ Among the Coast Guard's three cross-
directorate groups that have roles in the acquisition process, we found 
in July 2018 that the Executive Oversight Council is best positioned to 
oversee the portfolio collectively and has the potential to implement 
key portfolio-wide management practices, including conducting formal 
reviews and issuing reports. This council has cross-directorate senior-
level management representation, access to information on acquisition 
programs, and support from the other two cross-directorate groups (the 
Systems Integration Team and the Resource Councils). However, this 
council has not carried out these portfolio-wide practices.
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    \14\ According to OMB guidance, portfolio-wide management should 
collectively prioritize capital assets, such as the Coast Guard's major 
acquisition programs.
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    In 2014, the Coast Guard updated the Executive Oversight Council's 
charter, in response to our September 2012 recommendation, adding the 
responsibility for portfolio-wide oversight to include conducting an 
annual review to assess and oversee acquisitions collectively. However, 
in our July 2018 review, we found that the Coast Guard revised the 
council's charter in June 2017, removing this responsibility.\15\ 
According to Executive Oversight Council officials, this responsibility 
was removed from the 2017 charter because the council did not conduct 
these annual reviews. Instead, Executive Oversight Council officials 
indicated that the council facilitates a balanced and affordable 
portfolio of acquisition programs through the individual program-level 
reviews. Best practices states that successful organizations assess 
product investments in aggregate, rather than as independent projects 
products or programs.\16\ For example, by considering the requirements, 
acquisition, and budget processes collectively, it helps organizations 
prioritize their product investments.
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    \15\ GAO-18-454.
    \16\ GAO, Best Practices: An Integrated Portfolio Management 
Approach to Weapon System Investments Could Improve DOD's Acquisition 
Outcomes, GAO-07-388 (Washington, DC.: Mar. 30, 2007).
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    Further, we found that the Executive Oversight Council has not 
engaged in overseeing or reporting on the acquisition portfolio 
collectively and annually. OMB's 2017 Capital Programming Guide 
outlines a capital programming process, including how agencies should 
effectively and collectively manage a portfolio of capital assets.\17\ 
This OMB guidance states that a senior-level executive review committee 
should be responsible for reviewing the agency's entire capital asset 
portfolio on a periodic basis and for making decisions or priorities on 
the proper composition of agency assets needed to achieve strategic 
goals and objectives within the budget limits. In the case of the Coast 
Guard, only the Executive Oversight Council has members at the senior-
level executive level and has the responsibility for oversight of its 
major acquisition programs. Without conducting comprehensive, 
collective portfolio reviews at the senior management level, the Coast 
Guard does not have sufficient cross-directorate information to 
determine needed tradeoffs in the major acquisitions realm, considering 
budget realities. It is also limiting its ability to make strategic 
decisions on future requirements and capability gaps in a timely manner 
within the acquisition portfolio. In our July 2018 report on Coast 
Guard recapitalization efforts, we recommended that the Commandant of 
the Coast Guard should require the Executive Oversight Council, in its 
role to facilitate a balanced and affordable acquisition portfolio, to 
annually review the acquisition portfolio collectively, specifically 
for long-term affordability.\18\ DHS disagreed with our recommendation 
stating that other bodies within the Coast Guard, such as the 
Investment Board, Deputies Council, and Investment Review Board--are 
responsible for making decisions regarding out-year funding, while the 
Executive Oversight Council works outside of the annual budget process. 
DHS also stated that, to meet the spirit of our recommendation, the 
Coast Guard will update the Executive Oversight Council's charter to 
require a review of the collective acquisition portfolio, specifically 
evaluating long-term planning. We believe that updating the Executive 
Oversight Council's charter to include long-term-planning is a positive 
step. However, we continue to believe that in addition to long-term 
planning, the Executive Oversight Council should include the major 
acquisition portfolio's budget realities faced by the Coast Guard in 
its reviews, or long-term affordability. If the planning accounts for 
long-term funding considerations to achieve the Coast Guard's 
acquisition goals and objectives, we believe the intent of our 
recommendation would be met.
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    \17\ OMB's 2017 Capital Programming Guide, Supplement V 3.0 OMB 
Circular A-11, Planning, Budgeting, and Acquisition of Capital Assets.
    \18\ GAO-18-454.
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            Coast Guard's Heavy Polar Icebreaker Program's Optimistic 
                    Schedule Is Driven by Capability Gap Rather Than 
                    Knowledge-Based Analysis
    The Coast Guard's short-term planning focus has, in part, driven 
the acquisition of its heavy polar icebreaker program to its current 
situation--trying to meet a highly optimistic schedule. The heavy polar 
icebreaker program is intended to field three new icebreakers to 
replace the Coast Guard's sole operational heavy polar icebreaker, the 
Polar Star. The Polar Star is expected to reach the end of its service 
life between 2020 and 2023 while the first heavy polar icebreaker is 
expected to be delivered in fiscal year 2023, with the second and third 
icebreakers expected to be delivered in 2025 and 2026, respectively. 
Figure 1 shows the potential icebreaking capability gap.

    Figure 1: The Coast Guard's Potential Heavy Polar Icebreaker 
Capability Gap and Planned Delivery of New Heavy PolarIcebreakers

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    We are currently conducting a review of the heavy polar icebreaker 
acquisition, and, preliminarily, we have found that the Coast Guard set 
an optimistic schedule baseline for the delivery dates for new polar 
icebreakers based on the ice-breaking capability gap rather than an 
analysis of what is realistic and feasible. Rather than building a 
schedule based on knowledge--such as determining realistic schedule 
targets and analyzing how much time to include in the schedule to 
buffer against potential delays, and comprehensively assessing schedule 
risks--the Coast Guard used the estimated end date of the Polar Star's 
service life as the primary driver to set the lead icebreaker's 
objective (or target) delivery date of September 2023 and threshold 
(latest acceptable) delivery date of March 2024. Design study 
information provided by several shipbuilders estimated that it could 
take up to 3.5 years to build the lead icebreaker, but the Coast Guard 
is planning for a more optimistic estimate of 2.5 years for the 
delivery date.\19\ Our best practices for developing project schedules 
state that estimating how long an activity takes should be based on the 
effort required to complete the activity and the resources available 
and not driven by a specific completion date.\20\
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    \19\ In February 2017, the Coast Guard contracted with five 
shipbuilders to conduct design studies to examine major design cost 
drivers and technology risks for the heavy polar icebreaker program.
    \20\ GAO, GAO Schedule Assessment Guide: Best Practices for Project 
Schedules, GAO-16-89G (Washington, DC.: Dec. 2015).
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    In addition, preliminary findings indicate the Coast Guard did not 
conduct analysis to identify a reasonable amount of margin or time to 
include in the program schedule baseline to account for any delays in 
the program. The current heavy polar icebreaker's schedule includes 
only 6 months of margin between the Coast Guard's target and latest 
acceptable delivery dates. However, our analysis of recent shipbuilding 
acquisitions shows that longer schedule delays, whether they are in the 
program's control or not, should be expected. For example, among the 12 
selected shipbuilding acquisition programs active in the last 10 years 
that we analyzed, the Navy and the Coast Guard have delayed delivery of 
all but one lead ship from their original planned delivery dates, with 
delays ranging from 9 to 75 months. We have found in our past 
shipbuilding work that delays have resulted from a number of issues, 
including redesign work to address discoveries during predelivery 
testing, and key system integration problems, and design quality issues 
among others.\21\ However, Coast Guard officials told us such risks are 
not accounted for in the Heavy Polar Icebreaker schedule. We plan to 
issue a report on the Coast Guard's heavy polar icebreaker acquisition 
this summer. In addition, we will continue to review this program in 
our annual assessment of major acquisition programs.
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    \21\ GAO-18-339SP; Defense Acquisitions: Assessments of Selected 
Weapon Programs, GAO-17-333SP (Washington, DC.: March 30, 3017); 
Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-15-
342SP (Washington, DC.: Mar. 12, 2017); Homeland Security Acquisitions: 
DHS Could Better Manage Its Portfolio to Address Funding Gaps and 
Improve Communications with Congress, GAO-14-332 (Washington, DC.: Apr. 
17, 2014).
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  coast guard faces sustainment challenges for the polar star and 270-
                     foot medium endurance cutters
    We found in July 2018 that the Coast Guard's heavy polar icebreaker 
Polar Star and the Medium Endurance Cutters are currently either 
approaching or operating beyond the end of their design service 
lives.\22\ These cutters are in need of major maintenance overhauls--or 
Service Life Extension Projects (SLEP)--in order to continue providing 
capabilities to operators. According to Coast Guard officials, SLEPs 
are necessary because the Coast Guard does not have the funds available 
to initiate a new major acquisition program to recapitalize these 
assets in the short term, or because a significant amount of 
maintenance work is required to keep these assets operational until 
replacements are fielded. These planned SLEPs involve several risks 
including scheduling and funding.
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    \22\ GAO-18-454.
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            Heavy Icebreaker Polar Star has Required More Maintenance 
                    than Planned to Remain Operational
    After being placed in a nonoperational status in 2006 due to 
equipment problems, the Coast Guard conducted reactivation work on the 
Polar Star from 2010 to 2013, and the icebreaker resumed its primary 
mission for the annual deployment to the National Science Foundation's 
McMurdo Research Facility in Antarctica in 2014. Further, our July 2018 
review indicated that the Coast Guard is planning a SLEP on the Polar 
Star to keep it operational until the first and second new heavy polar 
icebreakers are delivered in order to bridge a potential operational 
gap. This approach, according to Coast Guard officials, would allow the 
Coast Guard to operate a minimum of two heavy icebreakers once the 
first polar icebreaker is delivered and provide the Coast Guard with a 
self-rescue capability--the ability for one icebreaker to rescue the 
other if it became incapacitated while performing icebreaking 
operations.
    However, we found that the Coast Guard's plans to conduct this SLEP 
during its annual depot-level maintenance periods--that is, maintenance 
that is beyond the capability of the crew of a cutter or other asset--
may not be feasible given the amount of maintenance already required on 
the cutter. Specifically, the Polar Star's mission capable rating (an 
asset's availability to conduct operations) has been decreasing in 
recent years and reached a low point of 29 percent--well below the 
target of 41 percent--from October 2016 to September 2017. Based on 
mission capable data, we found this was mostly due to additional time 
spent in depot-level maintenance, which has increased in recent years 
from about 6 months in 2015 to more than 8 months in 2017. 
Additionally, the Polar Star has required extensions of about 3 months 
for its annual dry dock periods--the period of time when a cutter is 
removed from the water so that maintenance can be conducted--in 2016 
and 2017 to complete required maintenance activities. These dry docks 
were originally planned to last between 2\1/2\ months and 4 months. We 
found in July 2018 that these delays and extensions are likely to 
continue as the cutter ages.\23\ According to Coast Guard officials, 
the Polar Star's SLEP work will be conducted during the annual dry dock 
periods by adding an additional 1 or 2 months to the annual dry docks. 
However, if the work is unable to be completed during this timeframe, 
it could force the Coast Guard to miss its commitment to conduct its 
annual Antarctica mission.\24\ Coast Guard maintenance officials stated 
that until the Polar Star completes the SLEP, its repairs will likely 
continue to get more expensive and time consuming.
---------------------------------------------------------------------------
    \23\ GAO-18-454.
    \24\ The Coast Guard was previously unable to conduct the annual 
mission to the McMurdo Research Facility from 2010 to 2013 due to both 
heavy icebreakers being inoperable. During that time, the National 
Science Foundation leased a commercial icebreaker to open a channel for 
resupply ships.
---------------------------------------------------------------------------
    As we found in July 2017, the Polar Star SLEP effort has a rough-
order cost estimate of $75 million, which is based on the reactivation 
work completed in 2013.\25\ However, we found this estimate may be 
unrealistic based on assumptions the Coast Guard used, such as that it 
would continue to use parts from the Coast Guard's other heavy polar 
icebreaker, the Polar Sea, which has been inactive since 2010.\26\ The 
Coast Guard's recent assessment of the Polar Star's material 
condition--the physical condition of the cutter, which includes the 
hull structure, habitability, major equipment systems, and spare parts 
availability--was completed in January 2018.\27\ The material 
assessment stated that many of the available parts from the Polar Sea 
have already been removed and installed on the Polar Star. As a result 
of the finite parts available from the Polar Sea, the Coast Guard may 
have to acquire new parts for the Polar Star that could increase the 
$75 million SLEP estimate. The Polar Star's recent material assessment 
will form the basis to determine which systems will be overhauled 
during the SLEP and for a more detailed cost estimate. The Coast Guard 
expects the Polar Star SLEP to begin by June 2020, at which time the 
Polar Star could reach the end of its current useful service life 
(currently projected to be between 2020 to 2023). This timeline 
contains risk that the Polar Star could be rendered inoperable before 
the cutter is able to undergo a SLEP. We will continue to monitor the 
Polar Star's SLEP through our annual review of DHS programs.
---------------------------------------------------------------------------
    \25\ GAO-17-747T.
    \26\ The Polar Sea is the sister ship to the Polar Star and has 
been inactive since experiencing a major engine casualty in June 2010.
    \27\ The Ship Structure and Machinery Evaluation Board is the prime 
source of information on the material condition and remaining service 
life of the cutter classes. This information allows the Coast Guard to 
formulate cutter acquisition plans and modernization alternatives. A 
fundamental step in this planning cycle is to periodically evaluate the 
remaining service life of each cutter and standard boat class and 
compare this against the future mission requirements. The board 
thoroughly evaluates the material condition of the cutter or standard 
boat class and determines its remaining service life.
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            Coast Guard Is Developing Plans to Extend Medium Endurance 
                    Cutters' Service Lives
    The Coast Guard operates two fleets of Medium Endurance Cutters 
(270-foot and 210-foot cutters) and both are either approaching or have 
exceeded their design service lives. According to Coast Guard 
officials, there are no plans to extend the service lives of the 210-
foot Medium Endurance Cutters due to the age of the vessels (some of 
the cutters will be over 60 years old when they are expected to be 
removed from service). However, we found in July 2018 that, according 
to Coast Guard maintenance officials, the primary problem facing the 
270-foot Medium Endurance Cutters is obsolescence of parts.\28\ The 
cutters have several systems that are no longer manufactured, and in 
many cases the original manufacturer no longer makes parts for the 
systems, such as the generators, fire pumps, and main diesel engines. 
To sustain the 270-foot Medium Endurance Cutters until the replacement 
cutters--the Offshore Patrol Cutters--are delivered, the Coast Guard is 
planning to conduct a SLEP. Coast Guard officials stated they are 
evaluating how many of the 13 270-foot cutters will undergo the SLEP.
---------------------------------------------------------------------------
    \28\ GAO-18-454.
---------------------------------------------------------------------------
    According to Coast Guard officials, the Offshore Patrol Cutter 
acquisition program is on track to meet its cost and schedule goals. 
The Coast Guard is in the process of completing the design of the 
cutter before starting construction, which is in-line with GAO-
identified shipbuilding best practices. In addition, Coast Guard 
officials stated that the program is using state-of-the-market 
technology that has been proved on other ships as opposed to state-of-
the-art technology, which lowers the risk of the program. The Coast 
Guard expects to start construction of the first Offshore Patrol Cutter 
in fiscal year 2019 and procure a total of 25 ships, with plans to 
initially fund one cutter per year and eventually two cutters per year 
until all 25 cutters are delivered. Further, Coast Guard officials have 
stated that if the Offshore Patrol Cutter program experiences any 
delays, it will likely decrease the Coast Guard's operational capacity 
because the legacy Medium Endurance Cutters will likely require 
increased downtime for maintenance and other issues, reducing their 
availability. As we indicated earlier, short-term planning limits the 
Coast Guard's ability to identify and consider tradeoffs with its 
acquisition portfolio.
    The Coast Guard is evaluating how long the 270-foot Medium 
Endurance Cutters should remain in service. According to Coast Guard 
officials, this decision is at least partially dependent on the 
delivery of the Offshore Patrol Cutters--specifically the shipbuilder's 
ability to deliver two cutters per year, which is expected to start in 
fiscal year 2024 with the fourth and fifth cutters. Officials stated 
that the Coast Guard does not plan to operate any Medium Endurance 
Cutters once all 25 Offshore Patrol Cutters are operational, yet the 
fiscal year 2018 through 2022 CIP report indicates that 7 of the 270-
foot Medium Endurance Cutters will still be in service when all 25 
Offshore Patrol Cutters are delivered and operational. Officials said 
this is a contingency plan in case not all Offshore Patrol Cutters are 
delivered on time. Figure 2 shows the planned delivery dates for the 
Offshore Patrol Cutters and the proposed decommissioning dates for the 
legacy Medium Endurance Cutters.
    Figure 2: Comparison of the End of the Useful Life for the 
Legacy Medium Endurance Cutter and the Planned Offshore Patrol 
Cutter Delivery Dates

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


Note: The fiscal year 2018 Capital Investment Plan does not 
specifically list when each hull will be decommissioned, but 
lists the number of hull to be decommissioned each year. We 
notionally went in order of the oldest to the newest cutters as 
provided by the Coast Guard.
The Coast Guard plans to have two Offshore Patrol Cutters 
delivered per year starting in 2024, but the full operational 
date is 2 years later due to the need for post-delivery work.
The Coast Guard conducted a Midlife Maintenance Availability on 
the 210-foot Medium Endurance Cutters between 1987 and 1998 
that added 15 years to their service lives. The end of service 
life shown represents this 15-year extension.

                                 

    The fiscal year 2018 through 2022 CIP shows that there is 
little, if any, gap between when the 210-foot and 270-foot 
Medium Endurance Cutters will be removed from service and when 
the Offshore Patrol Cutters will be operational. However, both 
Medium Endurance Cutter classes will be well past their end of 
service lives by the time they are decommissioned. For 
instance, in our July 2012 report, we found that the 210-foot 
Medium Endurance Cutter Dependable reached its end of service 
life in 2006.\29\ Nevertheless, based on the fiscal year 2018 
through 2022 CIP, we found that the Coast Guard plans for the 
cutter to operate for an additional 23 years (until 2029) 
without any major sustainment work to extend its service life. 
While it is not unusual for the Coast Guard to operate cutters 
for longer than originally planned, the lack of a more 
comprehensive, collective portfolio management approach, in 
part, will result in some of the Medium Endurance Cutters 
operating over 60 years, which is 30 years beyond their 
original design service lives.
---------------------------------------------------------------------------
    \29\ GAO, Coast Guard: Legacy Vessels' Declining Conditions 
Reinforce Need for More Realistic Operational Targets, GAO-12-741 
(Washington, DC.: July 31, 2012).
---------------------------------------------------------------------------
    In addition, the Coast Guard's own assessments indicate 
likely challenges. For instance, the Coast Guard's February 
2017 Sustainability Assessment of the 210-foot Medium Endurance 
Cutters, it rated 5 of the 14 cutters as a high risk for 
sustainability, which reflects either a poor material condition 
or high maintenance costs.\30\ Moreover, the most recent 
material condition assessments for the Medium Endurance 
Cutters, completed in 2015, found that
---------------------------------------------------------------------------
    \30\ Sustainability Assessments are annual assessments that rank 
each cutter's ability to be affordability sustained.
---------------------------------------------------------------------------
      210-foot Medium Endurance Cutters cannot be 
expected to meet operational requirements using the normal 
depot-level maintenance funding levels due to the time required 
to complete maintenance and the increased maintenance costs in 
recent years; and
      mission effectiveness of the 270-foot Medium 
Endurance Cutters will continue to degrade without a near-
continuous recapitalization of older sub-systems.
    In July 2012, we found that as assets age beyond their 
design service lives, they can negatively affect the Coast 
Guard's operational capacity to meet mission requirements as 
the cutters require more maintenance.\31\
---------------------------------------------------------------------------
    \31\ GAO-12-741.
---------------------------------------------------------------------------
    We will continue to monitor the Medium Endurance Cutters' 
SLEP and the Offshore Patrol Cutter acquisition in our annual 
review of major acquisition programs.
    In conclusion, as the Coast Guard continues modernizing its 
fleet and sustaining existing assets for longer than planned, 
it is important that it develops a more strategic and 
comprehensive approach for managing its portfolio so that 
future requirements and capability gaps can be addressed in a 
timely manner. The Coast Guard has a history of using its 
annual budgets to plan its acquisition portfolio, which leads 
to ever changing priorities and creates deferred acquisitions 
and a bow wave of future funding requirements. This bow wave 
has begun and the Coast Guard will continue to add to it until 
it begins to have a longer term focus, such as with the 
creation of the 20-year Long Term Major Acquisition Plan that 
we recommended in 2014. The Coast Guard has an opportunity with 
this plan to lay the foundation for the success of the future 
acquisition portfolio by showing what assets are needed and how 
much it is expected to cost, and it will position itself to 
provide decisionmakers with critical knowledge needed to 
prioritize its constrained acquisition funding. In the 
meantime, the Coast Guard would benefit from describing in the 
5-year CIP how the annual tradeoff decisions that are made 
could affect other acquisition programs. This would help 
decisionmakers understand the needs of the Coast Guard so that 
they can know how to better allocate taxpayer dollars as they 
invest in new more capable Coast Guard assets.
    Chairman Hunter, Ranking Member Garamendi, and members of 
the subcommittee, this concludes my prepared statement. I would 
be pleased to respond to any questions.

    Mr. Hunter. Thank you, Ms. Mak. I am now going to start 
recognizing Members for questions, starting with myself. And we 
are going to start with the appropriations.
    The appropriators cut $1.4 billion. That is slightly more 
than half of what the subcommittee is seeking to authorize. 
About $750 million of that was the icebreaker that they cut, 
and the rest was, I think, shoreside infrastructure, mostly. Is 
that correct, Admirals?
    Admiral McAllister. Yes, sir. My understanding was the 
largest portion of that was certainly the $750 million that the 
President proposed for the polar icebreaker program.
    Mr. Hunter. But they also cut another $700 million past 
that, and that was mostly going toward shoreside 
infrastructure?
    Admiral McAllister. Sir, I don't have the details of--but I 
know the polar icebreaker was the biggest portion of that.
    Mr. Hunter. OK, so at least $400 million of that was 
shoreside, and the other stuff might have been broken up. So 
can you just walk us through what the appropriators 
appropriated, compared to what we authorized, and what, if any, 
gaps, critical gaps, and problems you see with that?
    Admiral McAllister. I believe the most critical gap there 
is certainly the polar icebreaker. You know, we certainly 
appreciate the support of both the administration and Congress 
for our polar icebreaker recapitalization program, and we are 
hopeful that the fiscal year 2019 appropriations, once enacted, 
will fund that program so that we can continue on schedule, 
take advantage of the significant industry interest that is 
currently sparked by that program, keep that program on 
schedule.
    And as Ms. Mak has already testified, you know, we have got 
a challenge with the Polar Star, which is our, you know, only 
current heavy icebreaker, and keeping her operating. And any 
delays in the schedule of the new heavy icebreaker will put our 
ability to field critical icebreaking capability to protect our 
national sovereignty at risk.
    Mr. Hunter. Let me--how do you expect to--and Ms. Mak, you 
can answer this, too. Can you stay on track, if they only--if 
they cut it by $750 million? How can you possibly stay on track 
with that kind of a cut?
    Admiral McAllister. Yes, sir. I think certainly the 
schedule is going to be at risk if we do not get the $750 
million in fiscal year 2019.
    Mr. Hunter. Right, so the current schedule is off if that 
appropriations cut goes through.
    Admiral McAllister. As it is structured now, our intention 
is to not only award detailed design and construction in fiscal 
year 2019, but do the purchase of a variety of different 
elements under that contract, which could include long lead-
time materials to buy into the second. We are not going to be 
able to do that without that $750 million in fiscal year 2019, 
sir.
    Mr. Hunter. OK, thank you.
    Ms. Mak, do you concur?
    Ms. Mak. Yes, I concur. They can do the detailed design 
contract with the money they already have. But without the $750 
million, there is no way they can purchase the construction or 
contract for the construction of the lead ship in 2019. And we 
already have concerns with the schedule, even as it is.
    The Coast Guard did not buffer any timeframes in the 
schedule, other than the 6 months between the target date and 
the baseline date of when the lead ship should be delivered. 
There are a number of issues that usually occur in contracts 
for major acquisitions that have optimistic schedules, such as 
funding delays, equipment deliveries, and rework based on 
testing. None of that is incorporated in their schedule 
baseline.
    So our concern is that the schedule is already very 
optimistic, and that is with the assumption that the Coast 
Guard will receive that funding.
    Admiral Abel. Mr. Chairman, as the operator, I would add, 
too, that, like Admiral McAllister said, there is no wiggle 
room here. You know, our plans on the high latitudes north and 
south are, you know, modernize governance, domain awareness--
what is going on--and partnerships. You can't do any of that if 
you can't show up.
    We have no buddy system with the heavy icebreakers. And as 
the Polar Star gets older and older and older, she is more at 
risk. If something were to happen to her when she is at the 
high latitude, there is nothing with a U.S. flag that can come 
rescue her. So not only do we need the polar replacement 
quickly, but limping along the Polar Star continues to put the 
Coast Guard at risk.
    Mr. Hunter. Thank you. I have time for one more, one more 
quick question here.
    Going through the end-of-service lives from the Medium 
Endurance Cutters compared to when the OPC comes online, in the 
best-case scenarios there are still 4- or 5-year gaps. If you 
look at the--in 2028, 2029 to 2034, and then--and that is if 
the service life extensions go 15 years on the MECs [Medium 
Endurance Cutters], right? Not 5 or 10, but they all last for 
15. You have a best-case scenario at the end of 5 years, a 
best-case scenario of a year. That is the smallest amount.
    So that is my question. Do we wait to fix that until it 
becomes more pressing, or are we fixing it now? Or what is the 
plan? Or is it so far off we are just waiting?
    And then my second question is, going through the cutter 
capability gaps, based off--and I could give you this, if you 
need to see it, but I will try to explain it. This includes 
every vessel, including the NSCs [National Security Cutters], 
OPCs, FRCs [Fast Response Cutters], the medium endurance, et 
cetera. The legacy operational baseline is 20,000 hours, 
roughly, over the current operational capability. And the 
planned operational capability is way above the legacy baseline 
that we are not meeting right now. Does that make sense?
    That also goes for the MEC, HECs [High Endurance Cutters], 
NSCs, and just the OPCs. You have a gap right now that is 
roughly 14,000 hours under the legacy baseline, and a planned 
operational capability that is also lower than the old legacy 
baseline.
    So could you just elaborate on those two things?
    Admiral McAllister. Sir, I can certainly field the question 
on the Medium Endurance Cutter life expectancy and our plans to 
extend that. And then I think Admiral Abel might have some 
additional information that he can share with you on the kind 
of total capacity of the system.
    So our 210-foot cutters, which average about 50 years old, 
we do not plan on doing a service life extension program for 
those. Those would be the first that are decommissioned. And I 
think--I believe in the chart they show the last of those 
decommissioned in 2030--2029 to 2030.
    We do intend to do a service life extension program on the 
270-foot Medium Endurance class cutters. Those are between 27 
and 35 years old. We will do some condition-based assessments 
to determine which ones are the most likely to be able to 
continue service, as you indicate, well into the 2030s. And we 
have asked for money to plan that service life extension. That 
will add about 10 years to those cutters. I think we are 
planning to start that in 2021 or 2022, so that ought to get us 
through 2035, when the Offshore Patrol Cutters are through 
their production and in operation, sir.
    Mr. Hunter. So, to be clear, the 210-footers, you are not 
planning a service life extension on those.
    Admiral McAllister. That is correct, sir. Now, they will 
continue to go through depot-level maintenance. And I would 
submit to you, as is the case with many of our assets, you 
know, they are getting old, and it costs more to do the depot-
level maintenance there. And so that explains our current focus 
on the operations and maintenance money to restore readiness of 
the Coast Guard.
    Mr. Hunter. Thank you.
    Admiral Abel?
    Admiral Abel. Mr. Chairman, on the capability side, to echo 
what Mike said, you know, many of these Medium Endurance 
Cutters share their birth year with us, which is pretty old, 
candidly.
    But all cutter days and cutter hours are not created equal. 
A cutter that was built in the sixties does not have the 
capabilities, the technology, the sensors, and the return on 
investment and the bang for the buck that you get with a modern 
National Security Cutter, and we are hoping to get from the 
Offshore Patrol Cutter.
    So while day for day there may be a dip there, I can tell 
you that what we are doing with--there is nothing more powerful 
than a National Security Cutter right now in the transit zone 
for catching bad guys. And linked with the small UAS [unmanned 
aircraft system], you have got air cap that comes from the Navy 
and Customs and Border Protection. It has got an armed 
helicopter that will stop at multiple, over-the-horizon small 
boats. It has got the sensors, and now a UAS to finish off the 
game.
    So I can tell you that you are getting a lot more from the 
new assets than you have from the ones that are being 
sunsetted.
    Mr. Hunter. And Ms. Mak, because I have taken so much time, 
I am going to yield now to Mr. Garamendi. But if you could, 
when we get back to this again, I guess my question would be, 
then, it would be great to see your analytics on capability 
versus just hours. Right?
    I mean that--because that is all we--if you are just going 
by hours, it looks bad. If you are going by capability, 
probably it looks better than it did, right? But I don't think 
we have anything that shows an analysis of capability based on 
the assets capability, versus just hours spent in the ocean.
    Thank you. I yield to Mr. Garamendi.
    Mr. Garamendi. Thank you, Mr. Chairman. I am going to be 
relatively brief here. I have already talked about the 
Appropriations Committee and the damage that they are doing to 
the Coast Guard budget. It looks to be over $1 billion, maybe 
$1.2 billion, $1.4 billion.
    It is not clear if the Appropriations Committee intends to 
specify where those cuts are--for example, the icebreakers or 
the Offshore Patrol Cutters or shore maintenance and the like. 
I would appreciate immediately from the Coast Guard information 
on how those cuts would affect your ongoing programs, 
icebreaker, whatever. I intend to have a grand fight here with 
the Appropriations Committee; it would be helpful.
    I am often reminded that we can authorize, but we don't 
have the money. And at some point we are going to have to have 
a brawl with the Appropriations Committee, particularly when 
they intend to beef up border walls and diminish the Coast 
Guard and other activities.
    So, if you could provide that, that would be very helpful 
to us.
    I am not going to go further into the Arctic issue. I see 
Mr. Larsen is here, and he rightfully claims the Arctic issue 
to himself, since he has been at it some 16 years. But I will 
let him pick that up.
    The other issue that I would like--and the chairman, once 
again, went into a lot of the details about the operations--if 
you could also supply us with information on the shore 
facilities, the $700 million that was available for shore 
facilities, where that money is being spent, and what remains 
to be done after that money has been used to upgrade certain 
shore facilities--I know we went at this last time around.
    I am going to let it go at that. It is information 
received. I don't know--if you have it with you today, then go 
ahead. Otherwise, deliver it immediately. If you don't have it, 
then just say so and we will go from there.
    Admiral McAllister. Well, Congressman, I don't have all the 
details, but of course we would be pleased to provide that for 
the record.
    I assume that you are speaking of the hurricane 
supplemental funds, the $719 million that the Coast Guard has 
already started spending to repair many of our facilities. And 
we are putting together the more detailed plans for those 
facilities that are beyond repair that we will rebuild to a 
higher level of resiliency.
    I would offer to you that the facilities that the Coast 
Guard has rebuilt over the past 4 or 5 years, weathered those 
storms well. And so I think we can get this one right.
    We appreciate your focus, not only on infrastructure that 
was damaged, you know, through these hurricanes, but 
infrastructure writ large, and the people, Coast Guard women 
and men, that need to work out of those facilities. That is 
where every mission that we operate, that we do, you know, 
starts and ends.
    Admiral Abel. Congressman, I would also say that, in the 
trip we had last week we are mindful of the fact that the money 
you provided, provided some Band-Aids to get the folks back in 
the fight to immediately make mission.
    Then we are going to do some suturing--to continue the 
analogy here--to get us through the next couple years. Then 
eventually there are some permanent fixes, like Admiral 
McAllister mentioned, with hurricane resistance, new 
construction that is going to take time.
    But we are mindful of the fact that these folks need to 
make mission, their families need to have a place to live and 
work, and we are going to make sure that we do right by the 
folks in the near term, as well as looking out over the horizon 
for resilient facilities that will last for the next storm and 
the storm after that.
    Mr. Garamendi. Ms. Mak, any comment on this? Have you done 
an analysis? Have you been following it? If so, what do we need 
to know?
    Ms. Mak. With regards to the Medium Endurance Cutters, I 
will say that they have been operating at a higher operational 
tempo than what was intended. So therefore, there are going to 
be consequences because they are not doing all the planned 
depot maintenance that they usually have scheduled. And in a 
matter of time, that could lead to a catastrophic failure.
    In terms of whether these decommissioning dates in the 
Capital Investment Plan are realistic, I don't have any basis 
to make that call. But I will say even the Coast Guard's own 
studies have indicated that both the 210s and 270s are not in 
really good condition.
    For instance, the 210s, the study rated 5 out of their 14 
for high risk, for sustainability. For the 270s, for mission 
effectiveness, they are going to continue to degrade because 
according to Coast Guard's own report in 2015 on Material 
Condition Assessment, it said that they are nearly continuously 
replacing the older subsystems. So in the long term, it is just 
a matter of time before those ships experience failures.
    Mr. Garamendi. So a powerful argument to get on with the 
recapitalization of the ships. Fair enough.
    The C-27Js, the gift that keeps on taking, what is the 
status of them, the modernization of it, so forth?
    [No response.]
    Mr. Garamendi. Navy Minotaur systems, where are we with the 
C-27J aircraft?
    Admiral McAllister. So, Congressman, a couple of items of 
good news. We were able to award the last of five contracts to 
build our parts inventory. As you know, that was critical to 
restoring the reliability, particularly of the aircraft out in 
Air Station Sacramento.
    And so we have ordered about 80 percent of the parts that 
we need for Sacramento, about 60 percent, fleetwide. The rest 
of the aircraft are not yet missionized or at an active air 
station.
    And with respect to the Minotaur system, we have got the 
first prototype fielded, and so we are assessing the usefulness 
of that system. It is a DoD-based system that is also carried 
by CBP, so I think there is a good news story there, in terms 
of interoperability, both with DHS and DoD. We are confident 
that that system will be really valuable to us in the future.
    And in the meantime, again, to ensure that Air Station 
Sacramento has the capability it needs, we are putting an 
interim operational capability on board that has the EO/IR 
[electro-optical infrared] system and the communication system, 
the Satcom, so that we can missionize those in a more rapid 
sense while we are waiting for the Minotaur system to be, you 
know, fully tested and deployed to the C-27 fleet.
    Admiral Abel. From an operational perspective, 
missionizing, it can't be overstated, the importance there. I 
mean the value of this platform, in addition to being able to 
carry cargo, really is the fact it is a sensor.
    And as Admiral McAllister mentioned, the fact that this is 
a like system with Customs and Border Protection that does a 
lot of the high cap and the transit zone and the source zones 
down in the East Pac, Caribbean, as well as the fact it plugs 
and plays with the Navy and DoD system is really going to be 
huge for the Coast Guard, and will be a like system, and all of 
our fixed-wing aircraft will have Minotaur.
    Mr. Garamendi. I thank you. Finally, back to the 
maintenance backlog. I think the committee would appreciate a 
detailed schedule of the maintenance programs, going forward: 
how are you going to spend the $700 million; what remains to be 
done for those particular facilities that were damaged; and 
then the other facilities out ahead of you.
    I know some of this has been presented in the past. An 
update would be appreciated.
    With that, I yield back.
    Mr. Hunter. I thank the gentleman. The gentleman from 
Louisiana is recognized, Mr. Graves.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman.
    Admirals, just at a 100,000-foot level, listening to some 
of the discussion that has been occurring over the last several 
minutes, you have got some major challenges with Medium 
Endurance Cutters and SLEP [service life extension program] and 
their service life. And when the OPC comes online you have got 
major problems with your acquisition strategy for heavy 
icebreakers.
    Can you just help me understand at a 100,000-foot level how 
we are going to address these problems over the long term? I 
don't understand how this strategy is compatible with the Coast 
Guard's mission, with your desire to increase manpower, to try 
and sustain some of the incredible capabilities that you are 
now charged with maintaining. It just seems like we are headed 
off a cliff.
    Admiral McAllister. Congressman, thanks very much for the 
question. You know, I look at our overall service readiness in 
kind of three buckets.
    The first is people. And, as I mentioned earlier, Admiral 
Schultz has us focused on trying to support our people better 
with better training, better tools. The second is sustainment 
of assets that we already have, and we have talked about the 
shortage of operations and maintenance money to be able to keep 
assets running long enough for us to properly replace them 
through the third bucket, which is really our acquisitions 
programs. And while we have made great strides there, as you 
know, there is a lot more left to do.
    As Ms. Mak said--I think I wrote it down--these are 
difficult and complex decisions for us, but each of those 
buckets requires some level of focus and some balance. And that 
is what we are trying to achieve in the Coast Guard to be able 
to meet mission needs.
    Mr. Graves of Louisiana. Well, look. Certainly, as the 
chairman noted, the appropriations issue is something that I 
think is incumbent upon Congress and for this subcommittee and 
others to work on addressing.
    But even under your own budget request, it is difficult to 
see how you achieve some of the objectives that you have 
outlined in the outyears, very concerning.
    Perhaps digging into that a little bit more, Ms. Mak noted 
that the Coast Guard fails to establish a sound business case 
for some acquisition programs, including icebreaker. How would 
you respond to that?
    Admiral McAllister. So, Congressman, as you know, we have, 
under the guidance of this subcommittee, made significant 
changes, improvements to our acquisition programs over many 
years.
    And, you know, GAO has been an excellent partner in helping 
us to continue to refine those processes and the issues that 
Ms. Mak notes we have taken to heart. And so, for many of the 
things that she and her folks have recommended, we are taking 
for action.
    I don't think that in any way diminishes our confidence nor 
the confidence that I hope that you have in us in being able to 
deliver the right assets for our people, affordable assets on 
time and on budget. And we will continue to focus on doing 
that.
    I would also add, you know, more particular to the question 
of balancing these needs, under the guidance of this 
subcommittee we now are submitting a Capital Investment Plan 
with additional information on tradeoffs. We have committed to 
continue to try to refine that product so that it is useful to 
you.
    And you have asked for and we now have given you, I think, 
a couple of years' worth of unfunded priority lists. And that 
helps us to reveal to you the tradeoff decisions that we have 
had to make in the process of fitting all of this work into 
budget guidance.
    Admiral Abel. And Congressman, I would say also--your 
question is how do we make it work. From an operational 
perspective, we try to maximize the resources we do have to the 
highest risks. And sometimes that does require taking risks in 
other areas.
    A good example would be Maritime Safety and Security Teams 
typically focus on national security events, but they can 
deploy down to a hurricane, because we don't have forces in 
garrison. Who responds when the Coast Guard needs to surge? 
Either we take it from operational missions or we take it from 
some special use MSSTs, MSRTs. They flow in there, and they are 
the extra capacity we have. But that accepts a little risk of 
what the MSST or MSRT would be doing normally.
    So we try to move the chess pieces around as the Nation 
needs them to the optimal impact, and make sure we are managing 
the risks for the Nation.
    Mr. Graves of Louisiana. But yes or no, Admiral. Would you 
concur that that is unsustainable, looking at your outyears?
    Admiral Abel. We are going to be challenged, absolutely, 
and----
    Mr. Graves of Louisiana. Let me just grab my time back. One 
more question.
    The transportation worker identification credential, the 
TWIC cards, you have a rule that is supposed to be going in 
place next month, I believe. There has been a lot of back-and-
forth in this subcommittee and private meetings and other 
places about that, and some DHS issues in regard to it, as 
well.
    I think a number of us have strong concerns about how blunt 
that rule was proposed, meaning that it is going to end up 
covering areas that don't have any business being within a 
secure TWIC-required area. I think you know that there is 
legislation moved to the House last week--I think it was last 
week--to address this. Without Senate concurring and this going 
to the President's desk, does the Coast Guard even have the 
ability to enforce this?
    Admiral Abel. Well, first of all, we----
    Mr. Graves of Louisiana. And, by the way, I know there was 
an updated rule that I still think is problematic, but----
    Admiral Abel. Yes, sir. Well, we fully endorse the fact--a 
universal identification card that is good nationwide, if you 
are in the transportation business, makes sense. So that you 
can show your credentials----
    Mr. Graves of Louisiana. And I think we all agree.
    Admiral Abel. As far as the most recent issue--and we put a 
notice of proposed rulemaking out the end of June. And the four 
areas that the TWIC card was going to kick in on the end of 
August, one was facilities to take over 1,000 passengers, 
large-capacity vessel. Everyone agrees that makes sense. 
Vessels that discharge or take on certain dangerous cargoes, it 
makes sense that you need to be credentialed. The other two, 
which are vessels that have certain dangerous cargoes but are 
not transporting them, or transferring them, as well as 
shoreside facilities that are not transferring them, those last 
two were problematic for the industry.
    And so what we did was we went out with this notice of 
proposed rulemaking and said we would like to wait on those 
last two for a number of years until we work with industry to 
make sure it is commonsense regulation for those particular 
facilities.
    So we are looking to be responsive with industry. But 
overall, we--there is value in a TWIC card, a universal ID that 
transportation workers use.
    Mr. Graves of Louisiana. Thank you.
    In closing, Mr. Chairman, I just want to say that, you 
know, certainly everyone up here supports maritime security. I 
think the challenge is that you have facilities that were not 
designed to have segregated secure areas, or isolated secure 
areas that have access to the waterside.
    And so now you are forcing these huge--tens of acres--
facilities to come in and entirely retrofit their facilities 
and start segregating different components that have access to 
water or waterside access, and others that don't--whatever the 
facilities--were never made that way. They were never designed 
to have that segregated component. And you may have a really 
integral part of the facility that is right up against the 
water. It creates huge problems.
    Certainly everyone here supports maritime security and the 
TWIC card, but I think that finding a way to be more surgical 
with the rule is something that is important.
    I apologize for going over. I yield back.
    Mr. Hunter. I thank the gentleman. Mr. Larsen is 
recognized.
    Mr. Larsen. Thank you, Mr. Chairman.
    Ms. Mak, you cited as one of the issues here the Coast 
Guard relying on a manual budget process, which we are not 
going to change. But this 5-year CIP, as well, for long-term 
planning, did--in your report--I didn't see it--did you 
recommend any specific changes to the statutory requirement 
that we have put in place to improve this situation? Or 
nonstatutory solutions?
    Ms. Mak. Thank you for that question. In our 
recapitalization report that we issued today we do make a 
recommendation, which Admiral McAllister mentioned, and they 
did concur that they will start showing the tradeoffs and the 
impacts in their Capital Investment Plan. So that is an 
important step.
    We still would like to see the recommendation that we made 
back in 2014 for a 20-year plan be implemented. But at least 
with the tradeoffs and the different impacts, if they show it 
consistently over time, I think we will be able to start seeing 
some of the risks and getting more information for Congress to 
be able to make better informed decisions.
    With the unfunded priorities list, we have some concerns 
right now, because it is just a menu of different projects that 
the Coast Guard could do if it received more funding. There is 
no prioritization. So, theoretically, Congress could fund a 
large portion of that list if there was money available. And 
the Coast Guard may not even still address the main gaps that 
we have been talking about, the sustainment of the Medium 
Endurance Cutters and the Polar Star.
    Mr. Larsen. Yes.
    Ms. Mak. So we would like to see more prioritization, we 
would like to see more impacts and tradeoffs over time. 
Although the CIPs are changing from year to year with the 
current budget year, the long-term impacts still could be laid 
out, and it should be consistent over the years.
    Mr. Larsen. Yes, thanks.
    Admiral McAllister, are you--you or Admiral Abel--the one 
to recommend a change in the statute, if necessary, to address 
this issue? And if so, have you--do you have any 
recommendations on that?
    Admiral McAllister. Well, Congressman, as Ms. Mak 
indicates, we have been trying to improve the value of the 
information that we provide to you, through both the 5-year 
Capital Investment Plan, the unfunded priority list, and the 
20-year long-range acquisition portfolio without the need for 
legislation.
    And we have taken the recommendations from GAO for action, 
working with our department and with the administration, again, 
to continue to refine those products, so that they are useful 
to you.
    Mr. Larsen. OK. Can I just shift gears to the OPC? I think 
probably for Admiral McAllister, if there was more money 
available, is there capacity in the system to move OPC 
availability--you know, acquisition--to the left to address 
this, as one measure to address the gap between the MEC and the 
OPC?
    Admiral McAllister. Well, Congressman, we are poised to 
award the OPC construction here within the next few months.
    Mr. Larsen. Right.
    Admiral McAllister. And so I would tell you there may be 
those opportunities, but I don't think you will find it shows 
up on our unfunded priorities list because there are other 
opportunities to accelerate things that are probably a higher 
priority, at least to the Coast Guard.
    And so, you know, I couldn't necessarily give you the 
details here, but I would be happy to assess that and provide 
it for the record.
    Mr. Larsen. Could you do that? But if you could do that it 
would be great. But what I hear you saying is that the service 
life extension for MEC is a better approach to take, rather 
than constructing the additional OPCs if the money was 
available.
    Admiral McAllister. I think--yes, sir. So I think service 
life extension, particularly for the 270, the younger of the 
MECs, is inevitable at this point.
    And I would just--I think this the Capital Investment Plan 
reflects this, but you know, there is a critical juncture--I 
believe it is at hulls 3 and 4, or 4 and 5--in the OPC 
contract, where we go from one a year to two a year, per year, 
and I think that is critical to ensuring that we minimize the 
risk in trying to extend the life of these 210s and 270s.
    Mr. Larsen. Yes, thanks. As well for Admiral McAllister on 
OPCs, the selection criteria the Coast Guard is using for home-
porting Offshore Patrol Cutters, can you cover those? And I 
will say I obviously have a bias here, but I just wanted to get 
it directly from you all.
    Admiral McAllister. Sir, if you don't mind, that process is 
actually run by our operations division as an operational 
requirement.
    Mr. Larsen. Great.
    Admiral Abel. Congressman, thanks for that question. I 
think you know that we have committed the first four Offshore 
Patrol Cutters--two will go to Kodiak and two will go into L.A.
    As far as looking beyond there, we only have a five-part 
test. Number one is logistics. Clustering ships is efficient, 
as far as shoreside detachments, sparing equipment that you 
need.
    The second one is operations. Is it close to where the ship 
is going to do its work? So you have reduced the transit time 
and you get more return on investment in away time.
    The next one is port and port facilities. Are you going to 
have to dredge, build pier face--all the things that you need.
    Vitally important, too, is the people. Is there housing, 
are there schools, child development centers, employment 
opportunities, housing, all those things that you need to make 
it--and the last one is any impact on the environment.
    So, as we look forward past the original first four, we 
will do that five-part test to try to decide where best to bed 
down these cutters.
    Mr. Larsen. And just finally, is there a timeline, then, 
for this next decision on home ports?
    Admiral Abel. I think we are just now starting to look at 
viable options, and starting to run them through the five-part 
test. So we are getting into the window right now to make those 
decisions. Yes, sir.
    Mr. Larsen. All right, thank you. And I yield back. I will 
be around for a second round. Thank you.
    Mr. Hunter. I thank the gentleman. Mr. Lewis is recognized.
    Mr. Lewis. Thank you, Mr. Chairman. Just a couple of quick 
questions on unfunded acquisitions as it pertains to my 
particular part of the country, Great Lakes, Minnesota.
    I do want to talk about icebreaking in the Great Lakes. We 
had plenty of--a pretty significant ice season last year--
surprise, surprise in Minnesota and Duluth and Superior, right? 
And the Coast Guard did a great job on ensuring the safety of 
the transportation of community there and across the lakes.
    However, the only cutter there is the Mackinaw, and it is 
beginning to get pretty old. I am interested in, first of all, 
talking a little bit about that, or looking at that, and 
whether the Coast Guard needs to continue to conduct these 
icebreaking missions up on the lakes, or the plans to do so, or 
are there plans for another icebreaker, and then move on to the 
inland waterways after that. But let me just open that up to 
the panel first.
    Admiral Abel. Sir, let me just start on the requirements in 
the Great Lakes, and then Mike may talk to the plans for the 
Mackinaw and some money we have for that.
    First of all, vitally important, of course, to make sure 
that that water is kept open for industry and trade, and it is 
a vital artery for all those States up there. We have done a 
number of things.
    One is we have partnered very, very well with the Canadians 
to make sure that that shared waterway--we are working together 
with their icebreaking capability, as well as ours.
    Also, the 140-foot--the smaller icebreakers that are 
distributed around the coast there, vitally important. We are 
making a huge investment in the service life extension of 
those. Very innovative ships that have a bubbler that pushes 
forced air out the hull to help it slide up. Very effective for 
doing icebreaking. So we are working that, as well.
    And we are also looking at the future requirements, as far 
as what it could take, going forward.
    I will defer to Admiral McAllister on the plans for the 
Mackinaw.
    Admiral McAllister. So, sir, as Admiral Abel had indicated, 
we are using the money that you had provided us, that Congress 
had appropriated to us, to do, essentially, a fleet mix 
analysis on the Great Lakes to see what assets we might need, 
moving forward, and to assess where we are today, both for the 
Mackinaw and for our 140s, in terms of maintenance practices 
and how we can include those in future planning for whatever 
assets are needed on the lakes.
    I would also offer we are right in the middle of a service 
life extension program for the 140s. I was on board those 
assets that are in our Coast Guard yard right now just the 
other day, and you would be impressed as to how much work we 
are doing on those assets to update them and ensure that their 
continued ready for service moving forward here.
    Mr. Lewis. Ms. Mak?
    Ms. Mak. We did not look at the Mackinaw in our 
recapitalization work. But I will say that if it is undergoing 
any service life extension, it is the same funding type that is 
used for all of these other service life extension programs, as 
well as the major acquisition programs that we have been 
talking about.
    So like the Medium Endurance Cutters, the icebreakers, it 
goes back to this bow wave of acquisition programs that aren't 
funded fully to be able to replace them.
    Mr. Lewis. In the fiscal year 2019 budget you are talking 
about there is not enough acquisition funding?
    Ms. Mak. In the long term, the Coast Guard does not have 
enough to cover everything it needs to acquire or replace, so 
it needs to prioritize.
    Mr. Lewis. OK. Let me talk quickly about inland waterways a 
little bit. The eastern part of my district is the Mississippi 
out of the Twin Cities, and navigating--maintaining, I should 
say--those inland waterways are absolutely critical to the free 
flow of commerce. It is a huge piece of our commercial 
endeavors in the upper Midwest.
    So some of the oldest vessels in active Government service 
are in those inland waterways. What is our update on 
recapitalization of those vessels?
    Admiral McAllister. So, Congressman, as you had mentioned, 
those assets are critical, not only to the western rivers, but 
to a variety of other areas. As an example, during the 
hurricane we surged assets to the Port of Houston to open it as 
rapidly as we could. So I appreciate your recognition of the 
importance of those.
    We are actually doing the alternatives analysis right now 
for establishing a Waterway Commerce Cutter to replace up to 35 
existing vessels. That alternative analysis, we are engaging 
with the Army Corps of Engineers, who runs similar vessels 
through their maritime design center. We have gone out with 
some requests for information to the industry to understand the 
state of the market, shipyard capabilities. And so we are in 
that process of identifying the best way to move forward on 
that acquisition.
    Mr. Lewis. Anyone else? That is good. All right, thank you. 
I yield back.
    Mr. Hunter. I thank the gentleman. We are now in our second 
round of questioning. Mr. Larsen is recognized.
    Mr. Larsen. Now to the icebreakers. Can you enlighten me 
about the current planning on connecting the shore 
infrastructure with the people with the icebreaker plan, 
especially with the focus on the Arctic? Obviously, we have 
been agitating and advocating for icebreaker construction. But 
the shore infrastructure, having the people, and our support 
efforts in the Arctic are critical, as well.
    So I think it is important to hear that, as well as can you 
tell us where in the budget that exists, if it exists at all 
right now?
    Admiral Abel. Well, Admiral McAllister mentioned, when it 
comes to the home porting decision, that that kind of lives in 
the operator's lane. But it balances a bunch of decisions, as 
far as sustainment of the people, logistics. Does it make sense 
from an engineering and a port standpoint?
    As you know, Congressman, these are large vessels that go 
long distances for long times.
    Mr. Larsen. Yes.
    Admiral Abel. So, obviously, seeking a port that is a 
little bit closer when you are talking--you are gone for 6 
months, there may be advantages to being a little further away 
from the operating area, but that makes sense if it is better 
for logistics, and the port can support it, as well.
    We have not gotten far enough along in the polar 
acquisition to even talk about where it would be home-ported. 
So I will leave it to Admiral McAllister to talk about how, 
typically, when that happens, MASI, which is the money we use, 
how that is applied to the shoreside of the vessel when it 
shows up.
    Mr. Larsen. Yes.
    Admiral McAllister. So the MASI that Admiral Abel referred 
to is our major acquisitions system infrastructure account, and 
that is where we ask for the piers, the maintenance facilities. 
In the case of aviation, it might include hangars, the training 
facilities. And so that would be part of our 5-year Capital 
Investment Plan.
    Occasionally you will find those items on our unfunded 
priorities list, if we can't fit it within the budget 
constraints that we have. But as Admiral Abel had indicated, we 
have not yet laid those into our plan for the polar 
icebreakers, because we haven't yet quite got to that point in 
the development of the ship, itself, that it is warranted.
    Mr. Larsen. So how long is that time lag, then? Will it be 
5 years out, 6 years out, depending on the delivery of the 
first----
    Admiral McAllister. Yes, sir. So it is typically 4 to 5 
years out, depending on this--the scope of the infrastructure 
needs. So this is the time that we would start putting that--
and you would--start being reflected in the Capital Investment 
Plan. So we appreciate your question, and that is part of our 
current workload.
    Admiral Abel. Congressman, I would also say the Coast Guard 
is also looking--as we begin the decisions on where Fast 
Response Cutters go, Offshore Patrol Cutters go, the new 
icebreakers, there is a compounding effect, and we may end up 
with a megaport that we go, ``How did we get here?'' because we 
are making individual decisions.
    So the Commandant has asked us to take a holistic picture 
and say, if you were to fast forward out 10 or 15 years, does 
it make sense, where there is a large presence of Coast Guard 
and Coast Guard families, and does it make sense, as far as 
logistics support and the way that we maintain all the shore 
infrastructure?
    So we are doing a heat map, which basically is looking at 
potentials to make sure it is a deliberate evolution. And as we 
work all these acquisitions in parallel, it makes sense and it 
is logical and deliberate, where we put the cutters. And we 
will all be proud of the fact where we put them 10, 15 years 
from now.
    Mr. Larsen. Yes. And then, finally, UAS and counter-UAS. 
Obviously, I am on the Aviation Subcommittee. Therefore, we 
have got some interest in the DHS and DOJ [Department of 
Justice] requests to get authorities similar to what DoD has, 
but also with a concern that FAA [Federal Aviation 
Administration] is supposed to be regulating the airspace, and 
we don't want to nickel-and-dime--slice up the airspace in such 
a way that we are giving other agencies the ability to do 
things that then interfere with what you might say legacy users 
of the airspace, including general aviation.
    How is the Coast Guard thinking through that, as you are 
part of the DHS's request to get counter-UAS authorities?
    Admiral Abel. Well, first of all, the Coast Guard is 
getting big into using unmanned aerial systems. We mentioned 
the Stratton twice has deployed. We have gotten about 400 hours 
on those assets. We have ended up with nine intercepts and 
actually caught about 7,000 pounds of narcotics through that. 
That is the small system, and last month we have awarded a 
contract.
    We are taking a lead from the Navy. Contractor-owned, 
contractor-operated, candidly, puts a risk on the contractor 
without us buying a 50-year asset. So that is the goal that we 
are going with, as far as the approach to fielding that.
    Large UAS, real quick, the MQ-12----
    Mr. Larsen. I am sorry, I want to be clear. You are talking 
about the counter-UAS?
    Admiral Abel. Counter-UAS.
    Mr. Larsen. Yes.
    Admiral Abel. Yes, sir. We are familiar with that. Recently 
we have gotten some authority to protect some Coast Guard 
facilities with the same authorities of some other high-valued 
assets in the Nation.
    Some of our cutters over in the Persian Gulf--the six 110s 
at the classified level have some capabilities that I can 
certainly share with you, if you would like, at a classified 
venue.
    Mr. Larsen. That would be great. But maybe including in 
that--and I will yield back in a moment--including in that 
the--your counter-UAS, your force protection here in CONUS 
[continental United States].
    Admiral Abel. Yes, sir. We are looking at whether that 
particular system would be adaptable in a large metropolitan 
area where there is other things you have to worry about----
    Mr. Larsen. Yes.
    Admiral Abel [continuing]. Than over working for a Central 
Command in a war zone.
    Mr. Larsen. Great. Well, I will look forward to hearing 
back from you on that. Thank you.
    Thank you, Mr. Chairman, and I yield back.
    Mr. Hunter. I thank the gentleman. I have got one last 
question here.
    You did your modernization, you changed where the districts 
are, and that kind of thing, but there was no manpower staffing 
plan to accompany. Wouldn't that help? Do you not need one?
    Admiral McAllister. Sir, I think we would all say we need 
to do our manpower requirements analysis. And I know we 
submitted a report to you recently, and I guess I am not 
surprised that you might have found that it wasn't fully 
complete.
    The fact is we have only done about 50 percent of our 
organization thus far with the most rigorous manpower 
requirements analysis. We are doing that as part of our new 
force planning construct. And so I think, as you see further 
versions of the report to Congress, you will see a continued 
maturation of that process over time.
    The conclusion that we did come to--and we included in the 
report--was that our initial observations are that the Coast 
Guard is under-resourced, from a manpower perspective, to do 
our everyday missions, no less the surge requirements that we 
have from time to time, like hurricane response.
    Admiral Abel. But Congressman, I would also say that 
doesn't imply that modernization wasn't successful. When we 
showed up in 1983 or 1984 as ensigns, we had a bifurcated Coast 
Guard. The port had a marine safety office that did all the 
prevention, and you had the response, which worked for the 
group. It confused the Coast Guard, it confused industry, it 
confused the local officials in the port. You had some 
redundancies there.
    So creating the sectors was a very good thing for unity of 
effort, efficiency, unity of command. So that was a win, as far 
as getting better and not having to grow people to get better.
    Mr. Hunter. Thank you. I just want to stress this one last 
time. Your fiscal year 2018 acquisition budget was $2.6 
billion. And if everything stays as planned, your fiscal year 
2019 acquisition budget will be $1.43 billion. That is a 
massive cut, right? A massive cut.
    So I guess, Ms. Mak, beyond just the commentary on it, at 
what point of the Coast Guard not having the acquisition 
dollars that they requested and that this subcommittee 
requested, at what point does the buck stop? Meaning at what 
point do you look at these different extensions and the SLEPs 
for whatever, and you say, ``Wait a minute, we are off. This is 
over, game over. It is--we have--we don't have enough now and 
we are falling so far behind that we have to relook at 
everything, including the missions again that the Coast Guard 
has''?
    Ms. Mak. I would say, if you look at our funnel chart that 
is in our recap report that we issued today, we are there 
already. There is only so much funding. That is why we keep 
pushing for the need to prioritize. At a certain point, likely 
in the mid-2020s, the Coast Guard's continuing acquisition of 
the polar icebreaker and the OPCs getting two at a time, there 
is not enough funding to do all of that simultaneously along 
with several service life extension programs. And all the 
programs that are at the top of the funnel are important, but 
there is no funding for it.
    That is why we keep focusing on the need for the Coast 
Guard to prioritize and to prioritize consistently from year to 
year, so that we can figure out what are the implications and 
what are the risks. If there is no money for them to do certain 
things, then the Coast Guard needs to at least identify those 
risks, have those discussions, and make it known that these are 
the risks they will have to take, as a result of the particular 
budget from that year.
    So we are at that point now.
    Mr. Hunter. Does that make sense, or do you disagree with 
that, gentlemen?
    Admiral Abel. Well, from a capability standpoint, I think 
Ms. Mak is absolutely right. We are trying to limp some assets 
along, older assets that are expensive that bring near-term 
capability while we wait for some assets. Fast Response Cutters 
have been phenomenal. National Security Cutters, phenomenal. We 
just need to get to the new assets, absolutely. So we are 
trying to limp, near term. But what we are getting, certainly, 
is more return, more capability, and higher return for the 
Nation.
    Admiral McAllister. Chairman, I agree that, you know, we 
are going to need additional resources to produce the Coast 
Guard that the Nation is demanding, that you are demanding.
    You know, we do try to make those risk tradeoffs, as we 
have indicated a couple times during the hearing here, among 
sustainability, new acquisitions, personnel costs, and so 
forth.
    Our previous Commandant and our new Commandant are both--
you know, made it very clear that we are going to need some 
additional resources to build the Coast Guard of the future.
    Mr. Hunter. Do you sense any mixed signals? I mean the 
President of the United States, your Commander in Chief, our 
Commander in Chief, has stressed border security, interdiction 
of immigrants, interdiction of drugs, and not just border 
security, but homeland security. And the Coast Guard is the 
first line of defense. The first line of defense isn't the 
border wall, even though it is awesome. The first line of 
defense is you, in South America, or you in the Western 
Pacific, right? That is the first line of defense.
    So when you see your budget cut by over $1 billion out of a 
small acquisition budget to begin with, how do you match that 
up with what the President says he needs a Coast Guard to do 
and what is important for him and the country?
    Admiral Abel. Well, we would agree with you that certainly 
a comprehensive border strategy includes land and water, and we 
are with you as far as push the border out, get it at the 
transit zone and the source zones.
    I would rather catch a 10-pound bowling ball than 10 pounds 
of BBs, which is what happens once it hits the beach and then 
gets distributed to all these cities and municipalities, the 
smaller packages of drugs, absolutely.
    And your comment about Central and South America, we need 
to go after the push factor. The corrosive elements of these 
transnational criminal organizations are driving folks to leave 
their home and come to the United States. So it is the away 
game, and that is what the Coast Guard seeks to do.
    Mr. Hunter. If there's no further questions, I thank the 
witnesses for their testimony and Members for participation.
    The subcommittee stands adjourned. Thank you.
    [Whereupon, at 11:13 a.m., the subcommittee was adjourned.]