Homeland Security: Challenges Facing the Coast Guard as it Transitions to the New Department (02/12/2003, GAO-03-467T}

-------------------------Indexing Terms-------------------------
REPORTNUM:   GAO-03-467T
    TITLE:   Homeland Security: Challenges Facing the Coast Guard as it Transitions to the New Department
     DATE:   02/12/2003



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2003.



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Testimony:



Before the Subcommittee on Oceans, Atmosphere, and Fisheries, Committee 

on Commerce, Science, and Transportation, U.S. Senate:



United States General Accounting Office:



GAO:



For Release on Delivery Expected at 2:30 p.m. EST Wednesday, February 

12, 2003:



Homeland Security:



Challenges Facing the Coast Guard as it Transitions to the New 

Department:



Statement of JayEtta Z. Hecker, Director

Physical Infrastructure:



GAO Highlights:



Highlights of GAO-03-467T, a testimony before the Subcommittee on 
Oceans, 

Atmosphere, and Fisheries, Senate Committee on Commerce, Science, and 

Transportation



Why GAO Did This Study:



The Coast Guard is one of 22 agencies being placed in the new 
Department 

of Homeland Security. With its key roles in the nationï¿½s ports, 

waterways, and coastlines, the Coast Guard is an important part of 

enhanced homeland security efforts. But it also has non-security 

missions, such as search and rescue, fisheries and environmental 

protection, and boating safety. GAO has conducted a number of reviews 

of the Coast Guardï¿½s missions and was asked to testify about the Coast 

Guardï¿½s implementation challenges in moving to this newly created 

Department.



What GAO Found:



The Coast Guard faces major challenges in effectively implementing its 

operations within the Department of Homeland Security. GAO has 

identified critical success factors for reorganizing and restructuring 

agencies, and its recent work in reviewing the Coast Guard has focused 

on challenges dealing with six of these factorsï¿½strategic planning, 

communications and partnership-building, performance management, human 

capital strategy, information management and technology, and 
acquisition 

management.  



The Coast Guard faces challenges in all of these areas. The difficulty 

of meeting these challenges is compounded because the Coast Guard is 
not 

just moving to a new parent agency: it is also substantially 
reinventing 

itself because of its new security role. Basically, the agency faces a 

fundamental tension in balancing its many missions. It must still do 
the 

work it has been doing for years in such areas as fisheries management 

and search and rescue, but now its resources are deployed as well in 

homeland security and even in the military buildup in the Middle East. 

The Coast Guardï¿½s expanded role in homeland security, along with its 

relocation in a new agency, have changed many of its working 
parameters, 

and its adjustment to this role remains a work in process. Much work 

remains. Some of the work is strategic in nature, such as the need to 

define new missions and redistribute resources to meet the wide range 

of missions. Others include accommodating a sudden surge of new 

positions or trying to ensure that its most ambitious acquisition 

projectï¿½the Deepwater Projectï¿½remains viable.



What GAO Recommends:



GAO is not making new recommendations in this testimony, but past 

reports have made specific recommendations aimed at some of these 

implementation challenges, such as developing a long-term strategy 

for how its resources will be used among its various missions.



www.gao.gov/cgi-bin/getrpt?GAO-03-467T.



To view the full report, including the scope

and methodology, click on the link above.

For more information, contact JayEtta Hecker at (202) 512-2834 or 

[email protected].



[End of section]



GAO-03-467T:



Madame Chair and Members of the Subcommittee:



I am pleased to be here today to discuss key implementation challenges 

facing the Coast Guard as it transitions into the newly created 

Department of Homeland Security (DHS). Creating this new department 

means merging disparate organizational structures, cultures, and 

systems into a cohesive working unit. The newly created DHS represents 

one of the largest reorganizations and consolidations of government 

agencies, personnel, programs, and operations in recent history. The 

department and agencies within it must deal with a myriad of 

organizational, human capital, process, technology, and environmental 

challenges that must be addressed and resolved at the same time that 

the new department is working to maintain readiness. For these and 

other reasons, we have designated the implementation and transformation 

of DHS as a high-risk area.[Footnote 1]



But the Coast Guard, even as a separate entity, was rapidly reinventing 

itself in many respects in the wake of the terrorist attacks of 

September 11th. After these attacks, the Coast Guardï¿½s priorities and 

focus had to shift suddenly and dramatically toward protecting the 

nationï¿½s vast and sprawling network of ports and waterways. The 

National Strategy for Homeland Security[Footnote 2] recognizes the 

important role the Coast Guard now plays in protecting the nationï¿½s 

borders and infrastructure. While homeland security has long been one 

of the Coast Guardï¿½s missions, the agency has for decades focused its 

efforts on other major national objectives, such as conducting search 

and rescue operations at sea, preventing and mitigating oil spills and 

other threats to the marine environment, protecting important fishing 

grounds, and stemming the flow of illegal drugs and migrants into the 

United States. September 11th drastically changed the Coast Guardï¿½s 

priorities, and it did so by adding to the agencyï¿½s many 

responsibilities rather than by replacing responsibilities that were 

already in place. For example, the recently enacted Maritime 

Transportation Security Act[Footnote 3] made the Coast Guard 

responsible for numerous new port security functions that will likely 

require sizable personnel and hardware commitments.



My testimony today, which is based on a large body of work we have 

completed in recent years, both on governmental reorganization in 

general and the Coast Guard in particular, focuses on six key factors 

for implementation success: strategic planning, communication and 

partnership-building, performance management, human capital, 

information management and technology, and acquisition management. In 

prior reports and testimony before the Congress, we have identified 

these factors as among those that are critical to success in 

organizational change.[Footnote 4] Our recent work in reviewing the 

Coast Guard has focused on challenges the Coast Guard faces in dealing 

with these six success factors.



In summary, even though the Coast Guard has in many respects done a 

credible job of managing such things as strategic planning, 

partnership-building, and aligning its work force with its missions, it 

now faces major challenges in implementing all six of the 

implementation success factors. Its expanded role in homeland security 

and its relocation in a new agency have changed many of its priorities 

and working parameters, and its adjustment to this new environment 

remains a work in process. Thus, there is much work to be done. Some of 

the work is strategic in nature, such as the need to better define its 

homeland security mission and the level of resources needed to meet not 

only its new security mission responsibilities but its existing 

missions as well. Others include accommodating a sudden surge of 

thousands of personnel that are being added and trying to ensure that 

its most ambitious acquisition project--the Deepwater Project to 

modernize its fleet of cutters and aircraft--is well managed and 

remains on track. Overlying these challenges is a fundamental tension 

that the agency faces in balancing its many missions. On the one hand, 

it must still do the job it has been doing for years in fisheries 

management, search and rescue work, ship inspections, marine 

environmental protection, and other areas. On the other hand, a sizable 

portion of its resources are now deployed in homeland security work. In 

addition, the Coast Guard is contributing to the military buildup in 

the Middle East. Effectively addressing these implementation challenges 

in the context of this overarching tension is a sizeable task.



Background:



The Coast Guard has a wide variety of missions, related both to 

homeland security and its other responsibilities. Table 1 shows a 

breakout of these missions--both security and non-security related--as 

delineated under the Homeland Security Act of 2002.[Footnote 5]



Table 1: Security and Non-Security Missions of the Coast Guard:



Mission area: Security Missions:; Activities and functions within each 

mission area: [Empty].



Mission area: Ports, waterway, and coastal security; Activities and 

functions within each mission area: Conducting harbor patrols, 

vulnerability assessments, intelligence gathering and analysis, and 

other activities to prevent terrorist attacks and minimize the damage 

from attacks that do occur..



Mission area: Drug interdiction; Activities and functions within each 

mission area: Deploying cutters and aircraft in high drug trafficking 

areas and gathering intelligence to reduce the flow of illegal drugs 

across maritime boundaries..



Mission area: Migrant interdiction; Activities and functions within 

each mission area: Deploying cutters and aircraft and conducting vessel 

inspections to eliminate the flow of undocumented migrants entering the 

United States by maritime routes..



Mission area: Defense readiness; Activities and functions within each 

mission area: Participating with the Department of Defense (DOD) in 

global military operations; deploying cutters and other boats and 

aircraft in and around harbors to protect DOD force mobilization 

operations..



Mission area: Non-Security Missions:; Activities and functions within 

each mission area: [Empty].



Mission area: Maritime safety; Activities and functions within each 

mission area: Setting standards and conducting vessel inspections to 

better ensure the safety of passengers and crew aboard cruise ships, 

ferries, and other passenger vessels and commercial and fishing 

vessels; partnering with states and boating safety organizations to 

reduce recreational boating deaths..



Mission area: Search and rescue; Activities and functions within each 

mission area: Operating small boat stations and a national distress and 

response communication system; conducting search and rescue operations 

for mariners in distress..



Mission area: Living marine resources; Activities and functions within 

each mission area: Protecting our nationï¿½s fishing grounds from foreign 

encroachment; enforcing domestic fishing laws and regulations through 

inspections and fishery patrols..



Mission area: Environmental protection; Activities and functions within 

each mission area: Preventing and responding to marine oil spills; 

preventing the illegal dumping of plastics and garbage into our 

nationï¿½s waters..



Mission area: Aids to navigation; Activities and functions within each 

mission area: Maintaining an extensive system of navigation aids in our 

waterways; monitoring marine traffic through vessel traffic service 

centers..



Mission area: Ice operations; Activities and functions within each 

mission area: Conducting polar operations to facilitate the movement of 

critical goods and personnel in support of scientific and national 

security activity; conducting domestic icebreaking operations to 

facilitate year-round commerce..



Source: U.S. Coast Guard.

:



[End of table]



The Coast Guard has overall federal responsibility for many aspects of 

port security and is involved in a wide variety of activities. Using 

its cutters, boats, and aircraft, the Coast Guard conducts security 

patrols in and around U.S. harbors, escorts large passenger vessels in 

ports, and provides protection in U.S. waterways for DOD mobilization 

efforts. It also gathers and disseminates intelligence information, 

including gathering information on all large commercial vessels calling 

at U.S. ports; the agency monitors the movement of many of these 

vessels in U.S. territorial waters. It conducts port vulnerability 

assessments; helps state and local port authorities to develop security 

plans for protecting port infrastructure; and actively participates 

with state, local, and federal port stakeholders in a variety of 

efforts to protect port infrastructure and ensure a smooth flow of 

commerce. In international maritime matters, the Coast Guard is also 

active in working through the International Maritime Organization to 

improve maritime security worldwide. It has spearheaded proposals 

before this organization to implement electronic identification 

systems, ship and facility security plans, and the undertaking of port 

security assessments.



The Coast Guardï¿½s homeland security role is still evolving; however, 

its resource commitments to this area are substantial and will likely 

grow. For example, under the recently enacted Maritime Transportation 

Security Act, the Coast Guard will likely perform numerous security 

tasks, such as approving security plans for vessels and waterside 

facilities, serving on area maritime security advisory committees, 

assessing antiterrorism measures at foreign ports, and maintaining 

harbor patrols. The Coast Guard has not yet estimated its costs for 

these activities; however, the Presidentï¿½s fiscal year 2004 budget 

request includes over $200 million for new homeland security 

initiatives, including new patrol boats, additional port security 

teams, and increased intelligence capabilities.



To provide for the orderly transition of the Coast Guard to DHS on 

March 1, 2003, the Coast Guard established a transition team last year 

that identified and began addressing issues that needed attention. 

Coast Guard officials told us that they patterned their transition 

process after key practices that we identified as important to 

successful mergers, acquisitions, and transformations.[Footnote 6] The 

agencyï¿½s transition team consists of top management, led by the Chief 

of Staff, and enlists the assistance of numerous staff expertise 

throughout the agency through matrixing. According to Coast Guard 

officials, the scope of transition issues spans a wide variety of 

topics, including administrative and support functions, strategy, 

outreach and communication issues, legal considerations, and 

information management. The transition team focuses on both DHS-related 

issues and on issues related to maintaining an enduring relationship 

with the Department of Transportation (DOT). In addition to its own 

transition team, senior Coast Guard officials participated with OMB in 

developing the DHS reorganization plan late last year.[Footnote 7] 

Also, key Coast Guard officials participate on joint DHS and DOT 

transition teams that have been established to deal with transition 

issues in each department.



The Coast Guard Faces Numerous Complex Implementation Challenges as It 

Transitions into DHS:



We have testified that, despite the complexity and enormity of the 

implementation and transformation of DHS, there is likely to be 

considerable benefit over time from restructuring homeland security 

functions.[Footnote 8] These benefits include reducing risk and 

improving the economy, efficiency, and effectiveness of these 

consolidated agencies and programs. In the short term, however, there 

are numerous complicated challenges that will need to be resolved, 

making implementation a process that will take considerable time and 

effort. Reorganizations frequently encounter start-up problems and 

unanticipated consequences, and it is not uncommon for management 

challenges to remain for some time. Our past work on government 

restructuring and reorganization has identified a number of factors 

that are critical to success in these efforts. Coast Guard officials 

now involved in transition efforts told us that they are aware of these 

factors and are addressing many of them as they prepare to move to DHS. 

Our testimony today focuses on six of these factors--strategic 

planning, communication and partnership-building, performance 

management, human capital strategy, information management and 

technology, and acquisition management--and, based on past work, some 

of the key challenges the Coast Guard faces in addressing and resolving 

them.



Strategic Planning:



The strategic planning process involves assessing internal and external 

environments, working with stakeholders, aligning activities, 

processes, and resources in support of mission-related outcomes. 

Strategic planning is important within the Coast Guard, which now faces 

a challenge in merging past planning efforts with the new realities of 

homeland security. The events of September 11th produced a dramatic 

shift in resources used for certain missions. Cutters and patrol boats 

that were normally used offshore were quickly shifted to coastal and 

harbor security patrols. While some resources have been returned to 

their more traditional activities, others have not. For example, Coast 

Guard patrol boats in the nationï¿½s Northeast were still conducting 

security patrols many months later, reducing the number of fisheries 

patrols by 40-50 percent from previous years. Even now, the Coast Guard 

continues to face new security-related demands on its resources. Most 

notably, as part of the current military build-up in the Middle East, 

the Coast Guard has sent nine cutters to assist the DOD in the event of 

war with Iraq.[Footnote 9]



While its greatly expanded homeland security role has already been 

merged into its day-to-day operations, the Coast Guard faces the need 

to develop a strategic plan that reflects this new reality over the 

long term. Where homeland security once played a relatively small part 

in the Coast Guardï¿½s missions, a new plan must now delineate the goals, 

objectives, strategies, resource requirements, and implementation 

timetables for achieving this vastly expanded role while still 

balancing resources among its various other missions. The agency is now 

developing a strategic deployment plan for its homeland security 

mission and plans to finish it sometime this year. However, development 

has not begun on a long-term strategy that outlines how it sees its 

resources--cutters, boats, aircraft, and personnel--being distributed 

across all of its various missions, as well as a timeframe for 

achieving desired balance among missions. We recommended in a recent 

report to this Subcommittee that the Coast Guard develop such a 

strategy to provide a focal point for all planning efforts and serve as 

a basis for spending and other decisions.[Footnote 10] The Coast Guard 

has taken this recommendation under advisement but has not yet acted on 

it.



Communication and Partnership-Building:



There is a growing realization that any meaningful results that 

agencies hope to achieve are likely to be accomplished through matrixed 

relationships or networks of governmental and nongovernmental 

organizations working together. These relationships exist on at least 

three levels. First, they exist within and support the various internal 

units of an agency. Second, they include the relationships among the 

components of a parent department, such as DHS. Third, they are also 

developed externally, to include relationships with other federal, 

state, and local agencies, as well as private entities and domestic and 

international organizations. Our work has shown that agencies encounter 

a range of barriers when they attempt coordination across 

organizational boundaries.[Footnote 11] Such barriers include 

agenciesï¿½ concerns about protecting jurisdictions over missions and 

control of resources, differences in procedures, processes, data 

systems that lack interoperability, and organizational cultures that 

may make agencies reluctant to share sensitive information.



Specifically, our work has shown that the Coast Guard faces formidable 

challenges with respect to establishing effective communication links 

and building partnerships both within DHS and with external 

organizations. While most of the 22 agencies moving to DHS will report 

to under secretaries for the departmentï¿½s various 

directorates,[Footnote 12] the Coast Guard will remain a separate 

entity reporting directly to the Secretary of DHS. According to Coast 

Guard officials, the Coast Guard has important functions that will 

require coordination and communication with all of these directorates, 

particularly the Border and Transportation Security Directorate. For 

example, the Coast Guard plays a vital role with Customs, Immigration 

and Naturalization Service, the Transportation Security 

Administration, and other agencies that are organized in the 

Directorate of Border and Transportation Security. Because the Coast 

Guardï¿½s homeland security activities require interface with these and a 

diverse set of other agencies organized within several DHS 

directorates, communication, coordination, and collaboration with 

these agencies is paramount to achieve department-wide results.



Effective communication and coordination with agencies outside the 

department is also critical to achieving the homeland security 

objectives, and the Coast Guard must maintain numerous relationships 

with other public and private sector organizations outside DHS. For 

example, according to Coast Guard officials, the Coast Guard will 

remain an important participant in DOTï¿½s strategic planning process, 

since the Coast Guard is a key agency in helping to maintain the 

maritime transportation system. Also, the Coast Guard maintains 

navigation systems used by DOT agencies such as the Federal Aviation 

Administration. In the homeland security area, coordination efforts 

will extend well beyond our borders to include international agencies 

of various kinds. For example, the Coast Guard, through its former 

parent agency, DOT, has been spearheading U.S involvement in the 

International Maritime Organization. This is the organization that, 

following the September 11th attacks, began determining new 

international regulations needed to enhance ship and port security. 

Also, our work assessing efforts to enhance our nationï¿½s port security 

has underscored the formidable challenges that exist in forging 

partnerships and coordination among the myriad of public and private 

sector and international stakeholders.[Footnote 13]



Performance Management:



A performance management system that promotes the alignment of 

institutional, unit, and individual accountability to achieve results 

is an essential component for organizational success. Our work has 

shown performance management is a key component of success for high-

performing, results-oriented organizations. High-performing 

organizations have recognized that a key element of a fully successful 

performance management system is aligning individual employeesï¿½ 

performance expectations with agency goals so that employees can see 

how their responsibilities contribute to organizational goals. These 

organizations (1) define clear missions and desired outcomes, (2) 

measure performance as a way of gauging progress toward these outcomes, 

and (3) use performance information as a basis for decision-

making.[Footnote 14] In stressing these actions, a good performance 

management system fosters accountability.



The changed landscape of national security work presents a challenge 

for the Coast Guardï¿½s own performance management system. The Coast 

Guard has applied the principles of performance management for most of 

its missions, but not yet for homeland security. However, the Coast 

Guard has work under way to define its homeland security mission and 

the desired outcomes stemming from that mission. The Coast Guard 

expects to have such measures this year and begin collecting data to 

gauge progress in achieving them. Progress in this area will be key in 

the Coast Guardï¿½s ability to make sound decisions regarding its 

strategy for accomplishing its security mission as well as its various 

other missions.



Human Capital Strategy:



In any organization, people are its most important asset. One of the 

major challenges agencies face is creating a common organizational 

culture to support a unified mission, common set of core values, and 

organization-wide strategic goals. The Coast Guard, like the 21 other 

agencies moving to DHS, will have to adjust its own culture to work 

effectively within the department. The Coast Guard also faces other 

important new human capital challenges. For example, to deal with its 

expanded homeland security role and meet all of its other 

responsibilities, the Coast Guard expects to add thousands of new 

positions over the next 3 years. The Coast Guard acknowledges that such 

a large increase could well strain the agencyï¿½s ability to hire, 

develop, and retain talent. Coast Guard officials acknowledge that 

providing timely training for the 2,200 new personnel it plans to bring 

on by the end of fiscal year 2003 and the additional 1,976 staff it 

plans to add by the end of fiscal year 2004 will likely strain its 

training capabilities. Compounding this challenge is that over the next 

decade, the Coast Guard is modernizing its entire fleet of cutters and 

aircraft with more modern, high technology assets that require a higher 

skill level to operate and maintain.



Information Management and Technology:



One factor that often contributes to an organizationï¿½s ineffectiveness 

or failure is the lack of accurate, complete, and timely information. 

Sometimes this lack of information contributes to the failure of a 

system or to cumbersome systems that cannot be effectively coordinated. 

In other instances, however, it can relate to the institutional 

willingness to share information across organizational boundaries. 

Concerns about information management have been well chronicled in the 

discussions about establishing DHS. Programs and agencies will be 

brought together from throughout the government, each bringing its own 

systems. Integrating these diverse systems will be a substantial 

undertaking.



The Coast Guard is among several agencies moving to DHS that will bring 

with it existing information technology problems. For example, 14 years 

after legislation was passed requiring the Coast Guard to develop a 

vessel identification system to share vessel information, no such 

system exists, and future plans for developing the system are 

uncertain.[Footnote 15] Given todayï¿½s heightened state of homeland 

security, such a system has even more potential usefulness. Coast Guard 

officials stated that law enforcement officials could use a vessel 

identification system to review all vessels that have been lost or 

stolen and verify ownership and law enforcement history.



Acquisition Management:



Sound acquisition management is central to accomplishing the 

departmentï¿½s mission. DHS is expected to spend billions annually to 

acquire a broad range of products, technologies, and services. Getting 

the most from this investment will depend on how well DHS manages its 

acquisition activities. Our reports have shown that some of the 

governmentï¿½s largest procurement operations need improvement.



The Coast Guard has major acquisitions that pose significant 

challenges. The agency is involved in two of the most costly 

procurement programs in its history--the $17 billion Integrated 

Deepwater Project to modernize its entire fleet of cutters and 

aircraft, and the $500 million national response and distress system, 

called Rescue 21, to increase mariner safety. We have been reviewing 

the planning effort for the Deepwater Project for a number of years, 

and the agencyï¿½s management during the planning phase was among the 

best of the federal agencies we have evaluated, providing a solid 

foundation for the project. While we believe the Coast Guard is in a 

good position to manage this acquisition effectively, the current phase 

of the project represents considerably tougher management challenges. 

The major challenges are:



* Controlling costs. Under the projectï¿½s contracting approach, the 

responsibility for the projectï¿½s success lies with a single systems 

integrator and its contractors for a period of 20 years or more. This 

approach starts the Coast Guard on a course potentially expensive to 

alter once funding has been committed and contracts have been signed. 

Moreover, this approach has never been used on a procurement of this 

size or complexity, and, as a result, there are no models in the 

federal government to guide the Coast Guard in developing its 

acquisition strategy. In response to the concerns we and others have 

raised about this approach, the Coast Guard developed cost-related 

processes and policies, including establishing prices for deliverables, 

negotiating change order terms, and developing incentives.



* Stable sustained funding. The projectï¿½s unique contracting approach 

is based on having a steady, predictable funding stream of $500 million 

in 1998 dollars ($544.4 million in 2003 dollars) over the next 2 to 3 

decades. Significant reductions in levels from planned amounts could 

result in reduced operations, increased costs, and/or schedule delays, 

according to the Coast Guard. Already the funding stream is not 

materializing as the Coast Guard planned. The 2002 fiscal year 

appropriation for the project was about $18 million below the planned 

level. The fiscal year 2003 transportation appropriations have not yet 

been signed into law; however, the Senate appropriations committee has 

proposed $480 million for the Deepwater Project, and the House 

appropriations committee proposed $500 million.



* Contractor oversight. Because the contracting approach is unique and 

untried, the challenges in managing and overseeing the project will 

become more difficult. To address these challenges, the Coast Guardï¿½s 

plans require the systems integrator to implement many management 

processes and procedures according to best practices. While these 

practices are not yet fully in place, in May 2002, the Coast Guard 

released its Phase 2 Program Management Plan, which establishes 

processes to successfully manage, administer, monitor, evaluate, and 

report contract performance.



* Unproven technology. Our reviews of other acquisitions have shown 

that reliance on unproven technology is a frequent contributor to 

escalated costs, schedule and delays, and compromised performance 

standards. While the Coast Guard has successfully identified 

technologies that are sufficiently mature, commercially available, and 

proven in similar applications for use in the first 7 years of the 

project, it has no structured process to assess and monitor the 

potential risk of technologies proposed for use in later years. 

Specifically, the Coast Guard has lacked uniform and systematic 

criteria, which is currently available, to judge the level of a 

technologyï¿½s readiness, maturity, and risk. However, in response to our 

2001 recommendation, the Coast Guard is incorporating a technology 

readiness assessment in the projectï¿½s risk management process. 

Technology readiness level assessments are to be performed for 

technologies identified in the design and proposal preparation and 

procurement stages of the project.



For these and other reasons, our most recent series of Performance and 

Accountability Reports continues to list the Deepwater Project as a 

project meriting close management attention.[Footnote 16] We will 

continue to assess the departmentï¿½s actions in these areas.



The Coast Guardï¿½s move to DHS may complicate these challenges further. 

For example, central to the acquisition strategy for the Deepwater 

Project is a clear definition of goals, needs, and performance 

capabilities, so that a contractor can design a system and a series of 

acquisitions that can be carried out over 2 to 3 decades, while meeting 

the Coast Guardï¿½s needs throughout this time. These system goals and 

needs were all developed prior to September 11th. Whether the Coast 

Guardï¿½s evolving homeland security mission will affect these 

requirements remains to be seen. Properly aligning this program within 

the overall capital needs of DHS is critical to ensuring the success of 

the Deepwater Project. Also, the Homeland Security Act of 2002 requires 

the Secretary of DHS to submit a report to the Congress on the 

feasibility of accelerating the rate of procurement of the Deepwater 

Project. If the project is accelerated, even greater care would need to 

be exercised in managing a project that already carries numerous risks.



In conclusion, these challenges are daunting but not insurmountable. 

The Coast Guard continues to do an admirable job of adapting to its new 

homeland security role through the hard work and dedication of its 

people, and it has the management capability to address the 

implementation issues discussed here as well. However, reorganizations 

frequently encounter startup problems and unanticipated consequences, 

and even in the best of circumstances, implementation is a lengthy 

process that requires a keen focus, the application of sound management 

principles, and continuous reexamination of challenges and issues 

associated with achieving desired outcomes. As the Coast Guard 

addresses these and other challenges in the future, we will continue to 

monitor its efforts as part of our ongoing work on homeland security 

issues, and we will be prepared to report to you on this work as you 

deem appropriate.



Madame Chair, this concludes my testimony today. I would be pleased to 

respond to any questions that you or members of the Subcommittee may 

have at this time.



Contacts and Acknowledgements:



For information about this testimony, please contact JayEtta Z. Hecker, 

Director, Physical Infrastructure, at (202) 512-2834, or 

[email protected]. Individuals making key contributions to this testimony 

include Christopher Jones, Sharon Silas, Stan Stenersen, and Randall 

Williamson.



[End of section]



Related GAO Products:



Major Management Challenges and Program Risks: Department of 

Transportation. GAO-03-108. Washington, D.C.: January 30, 2003.



Major Management Challenges and Program Risks: Department of Homeland 

Security. GAO-03-102. Washington, D.C.: January 30, 2003.



Homeland Security: Management Challenges Facing Federal Leadership. 

GAO-03-260. Washington, D.C.: December 20, 2002.



Container Security: Current Efforts to Detect Nuclear Materials, New 

Initiatives, and Challenges. GAO-03-297T. New York, NY: November 18, 

2002.



Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned 

for a Department of Homeland Security and Other Federal Agencies. GAO-

03-293SP. Washington, D.C.: November 14, 2002.



Coast Guard: Strategy Needed for Setting and Monitoring Levels of 

Effort for All Missions. GAO-03-155. Washington, D.C.: November 12, 

2002.



National Preparedness: Technology and Information Sharing Challenges. 

GAO-02-1048R. Washington, D.C.: August 30, 2002.



Homeland Security: Effective Intergovernmental Coordination Is Key to 

Success. GAO-02-1011T. Washington, D.C.: August 20, 2002.



Port Security: Nation Faces Formidable Challenges in Making New 

Initiatives Successful. GAO-02-993T. Washington, D.C.: August 5, 2002.



Homeland Security: Critical Design and Implementation Issues. GAO-02-

957T. Washington, D.C.: July 17, 2002.



Managing for Results: Using Strategic Human Capital Management to Drive 

Transformational Change. GAO-02-940T. Washington, D.C.: July 15, 2002.



Homeland Security: Title III of the Homeland Security Act of 2002. GAO-

02-927T. Washington, D.C.: July 9, 2002.



Homeland Security: Intergovernmental Coordination and Partnerships 

Will Be Critical to Success. GAO-02-899T. Washington, D.C.: July 1, 

2002.



Homeland Security: New Department Could Improve Coordination but May 

Complicate Priority Setting. GAO-02-893T. Washington, D.C.: June 28, 

2002.



Homeland Security: Proposal for Cabinet Agency Has Merit, But 

Implementation Will Be Pivotal to Success. GAO-02-886T. Washington, 

D.C.: June 25, 2002.



Homeland Security: Key Elements to Unify Efforts Are Underway but 

Uncertainty Remains. GAO-02-610. Washington, D.C.: June 7, 2002.



National Preparedness: Integrating New and Existing Technology and 

Information Sharing into an Effective Homeland Security Strategy. GAO-

02-811T. Washington, D.C.: June 7, 2002.



Coast Guard: Vessel Identification System Development Needs to Be 

Reassessed. GAO-02-477. Washington, D.C.: May 24, 2002.



National Preparedness: Integration of Federal, State, Local, and 

Private Sector Efforts Is Critical to an Effective National Strategy 

for Homeland Security. GAO-02-621T. Washington, D.C.: April 11, 2002.



Coast Guard: Budget and Management Challenges for 2003 and Beyond. GAO-

02-538T. Washington, D.C.: March 19, 2002.



Homeland Security: Progress Made, More Direction and Partnership 

Sought. GAO-02-490T. Washington, D.C.: March 12, 2002.



Homeland Security: Challenges and Strategies in Addressing Short-and 

Long-Term National Needs. GAO-02-160T. Washington, D.C.: November 7, 

2001.



Coast Guard: Actions Needed to Mitigate Deepwater Project Risks. GAO-

01-659T. Washington, D.C.: May 3, 2001.



Coast Guard: Progress Being Made on Deepwater Project, but Risks 

Remain. GAO-01-564. Washington, D.C.: May 2, 2001.



Managing for Results: Barriers to Interagency Coordination. GAO/GGD-00-

106. Washington, D.C.: March 9, 2000.



Executive Guide: Effectively Implementing the Government Performance 

and Results Act. GAO/GGD-96-118. Washington, D.C.: June 1, 1996.



FOOTNOTES



[1] Major Management Challenges and Program Risks: Department of 

Homeland Security (GAO-03-102, January 2003). 



[2] National Strategy for Homeland Security, The White House, Office of 

Homeland Security, July 16, 2002.



[3] Pub. L. 107-295, Nov. 25, 2002.



[4] Homeland Security: Proposal for Cabinet Agency Has Merit, But 

Implementation Will Be Pivotal to Success (GAO-02-886T, June 25, 2002). 

Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned 

for a Department of Homeland Security and Other Federal Agencies 

(GAO-03-293SP, November 14, 2002). GAO has identified several other 

factors as important to success, including organizational alignment, 

knowledge management, financial management, and risk management. 

However, these factors, as they relate to the Coast Guard were not 

covered in the scope of completed GAO work. 



[5] Pub. L. 107-296, Nov. 25, 2002. 



[6] Highlights of a GAO Forum: Mergers and Transformation: Lessons 

Learned for a Department of Homeland Security and Other Federal 

Agencies (GAO-03-293SP, November 14, 2002).



[7] Department of Homeland Security Reorganization Plan, November 25, 

2002. This plan, required by the Homeland Security Act of 2002, 

addresses (1) the transfer of agencies, personnel, assets, and 

obligations to DHS, and (2) any consolidation, reorganization, or 

streamlining of agencies transferred to DHS.



[8] Homeland Security: Proposal for Cabinet Agency Has Merit, But 

Implementation Will Be Pivotal to Success (GAO-02-886T, June 25, 2002).



[9] The Coast Guard is sending one 378-foot high endurance cutter and 

eight 110-foot patrol boats to the Middle East in support of DODï¿½s 

Enduring Freedom, the Global War on Terrorism. 



[10] Coast Guard: Strategy Needed for Setting and Monitoring Levels of 

Effort for All Missions (GAO-03-155, November 12, 2002).



[11] Managing for Results: Barriers to Interagency Coordination, (GAO/

GGD-00-106, March 9, 2000).



[12] Most agencies within DHS are organized within one of the four 

directorates: Science and Technology, Information Analysis and 

Infrastructure Protection, Border and Transportation Security, and 

Emergency Preparedness and Response.



[13] Container Security: Current Efforts to Detect Nuclear Materials, 

New Initiatives, and Challenges (GAO-03-297T, November 18, 2002). Port 

Security: Nation Faces Formidable Challenges in Making New Initiatives 

Successful (GAO-02-993T, August 5, 2002). 



[14] Executive Guide: Effectively Implementing the Government 

Performance and Results Act (GAO/GGD-96-118, June 1, 1996).



[15] Coast Guard: Vessel Identification System Development Needs to Be 

Reassessed. (GAO-02-477, May 24, 2002).



[16] Major Management Challenges and Program Risks: Department of 

Transportation (GAO-03-108; January 30, 2003).