Coast Guard: Key Management and Budget Challenges for Fiscal Year
2005 and Beyond (07-APR-04, GAO-04-636T).
As the lead federal agency for maritime homeland security within
the Department of Homeland Security, the Coast Guard is facing
extraordinary, heightened responsibilities to protect America's
ports, waterways, and waterside facilities from terrorist
attacks. At the same time, the Coast Guard remains responsible
for many other programs important to the nation's interests, such
as conducting search and rescue and protecting important fishing
grounds. Its expanded responsibilities come at a time when budget
resources are increasingly constrained, making prioritization
among competing agencies and programs an even more critical
factor in congressional decision-making. This testimony
specifically addresses (1) the most recent trends in both
resource usage and performance results for the Coast Guard's
homeland security and non-homeland security programs; (2)
challenges the agency faces as it proceeds with its Deepwater
acquisition program to replace or modernize its key legacy
cutters and aircraft; and (3) an overview of the President's
fiscal year 2005 budget request for the Coast Guard, focusing on
several areas of particular congressional interest.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-636T
ACCNO: A09733
TITLE: Coast Guard: Key Management and Budget Challenges for
Fiscal Year 2005 and Beyond
DATE: 04/07/2004
SUBJECT: Agency missions
Budget activities
Counterterrorism
Deep water ports
General management reviews
Intercoastal waterways
Performance measures
Prioritizing
Terrorism
Budget requests
Homeland security
Coast Guard Deepwater Project
HH-65 Helicopter
HU-25C Aircraft
******************************************************************
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GAO-04-636T
United States General Accounting Office
GAO Testimony
Before the Subcommittee on Oceans, Fisheries, and Coast Guard, Committee
on Commerce, Science, and Transportation, U.S. Senate
For Release on Delivery Expected at 2:30 p.m. EDT Wednesday, April 7, 2004
COAST GUARD
Key Management and Budget Challenges for Fiscal Year 2005 and Beyond
Statement of Margaret T. Wrightson, Director Homeland Security and Justice
Issues
GAO-04-636T
Highlights of GAO-04-636T, a report to the Subcommittee on Oceans,
Fisheries, and Coast Guard, Committee on Commerce, Science, and
Transportation, U.S. Senate
As the lead federal agency for maritime homeland security within the
Department of Homeland Security, the Coast Guard is facing extraordinary,
heightened responsibilities to protect America's ports, waterways, and
waterside facilities from terrorist attacks. At the same time, the Coast
Guard remains responsible for many other programs important to the
nation's interests, such as conducting search and rescue and protecting
important fishing grounds. Its expanded responsibilities come at a time
when budget resources are increasingly constrained, making prioritization
among competing agencies and programs an even more critical factor in
congressional decision-making. This testimony specifically addresses (1)
the most recent trends in both resource usage and performance results for
the Coast Guard's homeland security and non-homeland security programs;
(2) challenges the agency faces as it proceeds with its Deepwater
acquisition program to replace or modernize its key legacy cutters and
aircraft; and (3) an overview of the President's fiscal year 2005 budget
request for the Coast Guard, focusing on several areas of particular
congressional interest.
www.gao.gov/cgi-bin/getrpt?GAO-04-636T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Margaret Wrightson at (415)
904-2200 or wrightsonm@gao.gov.
April 2004
COAST GUARD
Key Management and Budget Challenges for Fiscal Year 2004 and Beyond
Resource usage for Coast Guard assets-its cutters, boats, and aircraft-
was up almost 40 percent from the pre-September 11th baseline. Homeland
security programs, such as the ports, waterways, and coastal security
program, have been more likely to see increases in usage, while
nonhomeland security programs, such as living marine resources, remain
below pre-September 11th levels. Although resource usage changed
substantially for many of these programs, performance results generally
improved or remained largely the same. The stable or improved performance
results were attributed mainly to operational efficiencies (e.g., improved
technology, improved tactics, stronger partnerships, and improved
intelligence). However, the Coast Guard has limited data and no systematic
approach to explain or account for the effects of these factors. Without
such an approach and supporting data to link its resources and performance
results, the agency may be missing further opportunities to increase
productivity and efficiency to ensure best use of its funds.
Some of the Coast Guard's legacy Deepwater cutters, patrol boats, and
aircraft are increasingly unreliable and costly to maintain, and timely
and effective implementation of the agency's ongoing Deepwater acquisition
program to modernize these assets is crucial in order to reverse this
trend. However, the Coast Guard faces serious challenges to keep the
Deepwater program on schedule and within planned budget estimates. We
estimate that to return the program to its original 20-year completion
schedule will cost about $2.2 billion more than the Coast Guard estimated
when the program was implemented in 2002. Also, available program funding,
which has been less than the Coast Guard planned, may have to be used, in
part, to address critical maintenance needs of the legacy assets,
diverting funds otherwise intended for future Deepwater replacements and
upgrades. Moreover, recent GAO work raised serious concerns about the
management and oversight of the program, including the quality of the
Coast Guard's assessment of the program contractor's performance and the
uncertainty as to whether the Coast Guard would be able to effectively
control costs.
The President's fiscal year 2005 budget request of about $7.5 billion for
the Coast Guard represents about an 8 percent increase over last year. It
includes $5.2 billion in operating expenses and $943 million for its
capital acquisition budget. Most of the new initiatives outlined in its
operating expense budget are targeted for homeland security initiatives,
including $102 million for implementation of the Maritime Transportation
Security Act of 2002. Aside from the new initiatives, two other efforts in
the budget request may require further attention. The Coast Guard's
multi-mission stations are still experiencing a heavy workload for station
personnel because of increased homeland security responsibilities. Also,
the Coast Guard's Rescue 21 program, which will replace the Coast Guard's
current antiquated communication system, faces possible delays because of
software system development problems.
Madame Chair and Members of the Subcommittee:
I am pleased to be here today to discuss the President's fiscal year 2005
budget request for the Coast Guard and key management and operational
challenges the agency faces in this and future budgets. As the lead
federal agency for maritime homeland security within the Department of
Homeland Security (DHS), the Coast Guard is facing extraordinary,
heightened responsibilities to protect America's ports, waterways, and
waterside facilities from terrorist attacks and from becoming an avenue
for terrorists to bring weapons of mass destruction into the country. The
Coast Guard also remains responsible for many other programs important to
the nation's interests, such as helping stem the flow of illegal drugs and
illegal migration, protecting important fishing grounds, and responding to
marine pollution. These expanded responsibilities come at a time when
budget resources are increasingly constrained, making prioritization among
competing agencies and programs an even more critical factor in
congressional decision-making.
To help meet its increased homeland security responsibilities and restore
activity levels for its traditional programs, the Coast Guard received
substantial budget increases from fiscal years 2001 to 2004. This trend
continued with the President's fiscal year 2005 budget request for the
Coast Guard of about $7.5 billion, an 8 percent increase over the previous
year. Still, despite the large budget increases since September 11, there
is much congressional concern about whether the Coast Guard can continue
to meet all of its responsibilities, given both the increased emphasis on
and additional resources required for homeland security, and the agency's
heavy reliance on its fleet of larger ships and mainstay aircraft, many of
which are now aged and technologically obsolete. In addition, our past
work1 has shown that notwithstanding substantial increases in the Coast
Guard's budget to accommodate its increased responsibilities, the Coast
Guard's emphasis on homeland security reduced the level of resources
devoted to non-homeland security programs.
My testimony today, which is based on recently completed work, addresses
three topics: (1) the most recent trends in both resource usage and
performance results for the Coast Guard's homeland security and non
1U.S. General Accounting Office, Coast Guard: Relationship between
Resources Used and Results Achieved Needs to be Clearer, (GAO-04-432,
Washington, D.C.: Mar. 22, 2004); Coast Guard: Strategy Needed for Setting
and Monitoring Levels of Effort for All Missions, (GAO-03-155, Washington,
D.C.: Nov. 12, 2002).
homeland security programs; (2) challenges the agency faces as it proceeds
with its Deepwater acquisition program to replace or modernize its key
legacy cutters and aircraft; and (3) an overview of the President's fiscal
year 2005 budget request for the Coast Guard, focusing on several areas of
particular congressional interest. We conducted our work from March 2004
to April 2004 in accordance with generally accepted government auditing
standards.
In summary, our work shows the following:
o Resource usage-as measured by the number of hours the Coast Guard's
cutters, boats, and aircraft were used to perform its missions- were up
almost 40 percent from the pre-September 11 baseline. Resource hours for
homeland security programs benefited most, while hours for non-homeland
security programs generally declined. In contrast, performance results for
both homeland and non-homeland security programs generally improved or
remained largely unchanged. The Coast Guard believes that the lack of a
clear relationship between resource use and performance results is
attributable to both internally and externally driven factors. According
to the Coast Guard, the use of new technologies, better operational
tactics, improved intelligence, and stronger partnering efforts have
contributed to stable or improving performance results despite declines in
resource hours used for some programs. The Coast Guard also pointed to
external factors beyond the agency's control, such as a surge of
undocumented migrants attempting to enter the United States by maritime
routes, as affecting the results. Although our work lends some support to
these explanations, the Coast Guard has limited data and no systematic
approach to explain or account for the effects of these factors. Without
such an approach and supporting data to link its resources and performance
results, the agency may be missing further opportunities to increase
productivity and efficiency to ensure the best use of its funds.
o The most significant challenge the Coast Guard faces as it moves
forward with its Deepwater program is keeping the program on schedule and
within planned budget estimates through a well-managed and adequately
funded effort. Adding to the challenge is the fact that key legacy assets
are becoming increasingly unreliable and costly to maintain. This could
put the Coast Guard at risk of expending funds to repair deteriorating
legacy assets that otherwise had been planned for Deepwater modernization
initiatives. This action could potentially further delay the program and
increase total program costs. For example, the Coast Guard is using
Deepwater funds to address recent engine system problems on mainstay
helicopters used for search and
rescue, and law enforcement. More attention to contract management and
oversight, and stable funding will be needed if the Coast Guard is to
successfully manage these risks. During the first 2 years of the Deepwater
program, after the contract was signed, the Coast Guard did not get the
funding originally planned, and now the program is behind schedule. The
Coast Guard estimates that a sustained funding level of $795 million over
the remaining years of the program will be necessary to get the program
back onto its original 20-year schedule. In nominal dollars, this amount
represents about a $2.2 billion escalation in costs over the earlier $15
billion estimate. Aside from funding issues and problems with legacy
assets, our recent work has also raised concerns about the Coast Guard's
management of the program. Among the issues we identified were problems
with the quality of the Coast Guard's assessment of the contractor's
performance and the uncertainty as to whether the Coast Guard would be
able to effectively control costs.
o The President's fiscal year budget request for the Coast Guard
represents an 8 percent increase over last year, and new initiatives
continue to focus on the Coast Guard's homeland security programs. Of the
new initiatives outlined in its operating expense budget, for example,
about 90 percent of the funding was for homeland security initiatives. The
largest, totaling almost $102 million, is targeted for the cost of
implementing the Maritime Transportation Security Act of 2002. This money
would add about 500 new personnel (full-time-equivalent) to approve vessel
and facility security plans, ensure plans are being followed, and perform
various other inspection and intelligence activities. Aside from the new
initiatives, two other efforts may require special attention in the budget
request. One of these areas, the readiness of its multi-mission stations,
has been a congressional concern in recent years. Since 2002, the Congress
has earmarked additional funding to provide more personnel, equipment, and
training for multi-mission stations. While personnel have increased by
about 1,100 between fiscal years 2001 and 2003, the workload of these
stations is still a major concern. For example, station personnel are
currently averaging an 83-hour workweek, which is virtually unchanged from
2001, and well beyond the Coast Guard's standard of 68 hours per week.
Rescue 21, the Coast Guard's second largest procurement effort, will
replace the Coast Guard's current antiquated communication system that is
key to carrying out its search and rescue functions. This program, which
is estimated to cost $953 million, has encountered delays related to
software integration problems. Currently, Coast Guard officials are unsure
whether Rescue 21 will be completed on
time at the end of fiscal year 2006, but they do not anticipate any cost
escalation in the program.
Background Now a part of DHS, the Coast Guard has experienced substantial
budget growth since the terrorist attacks of September 11. The agency's
operating budget in fiscal year 2004 was $4.7 billion-an increase of 31
percent in nominal dollars over its fiscal year 2001 operating budget. The
Coast Guard spends the bulk of this money on 11 programs-5 related to its
homeland security mission and 6 related to its non-homeland security
mission. (See table 1.)
Table 1: Homeland Security and Non-Homeland Security Programs by Mission
Area (as of March 2004)
Missions and programs Activities and functions of each program
Homeland security mission
Ports, waterways, and coastal
Conducting harbor patrols, vulnerability assessments, intelligence
gathering and analysis, and other activities to prevent terrorist attacks
and minimize the damage from attacks that occur.
security
Illegal drug interdiction Deploying cutters and aircraft in high drug
trafficking areas and gathering intelligence to reduce the flow of illegal
drugs through maritime transit routes.
Undocumented migrant interdiction Deploying cutters and aircraft to reduce
the flow of undocumented migrants entering the United States by maritime
routes.
Defense readiness Participating with the Department of Defense (DOD) in
global military operations, deploying cutters and other boats in and
around harbors to protect DOD force mobilization operations.
Other law enforcement (foreign fish Protecting U.S. fishing grounds by
ensuring that foreign fishermen do not illegally harvest United
enforcement)a States fish stocks.
Non-homeland security mission
Search and rescue Operating multi-mission stations, and a national
distress and response communication system, conducting search and rescue
operations for mariners in distress.
Living marine resources Enforcing domestic fishing laws and regulations
through inspections and fishery patrols.
Aids to navigation Managing U.S. waterways and providing a safe,
efficient, and navigable marine transportation system; maintaining the
extensive system of navigation aids; monitoring marine traffic through
vessel traffic service centers
Ice operations Conducting polar operations to facilitate the movement of
critical goods and personnel in support of scientific and national
security activity and conducting domestic and international icebreaking
operations to facilitate year-round commerce.
Marine environmental protection Preventing and responding to marine oil
and chemical spills; preventing the illegal dumping of plastics and
garbage in U.S. waters and preventing biological invasions by aquatic
nuisance species.
Marine safety Setting standards and conducting vessel inspections to
better ensure the safety of passengers and crew aboard commercial vessels,
cruise ships, ferries, and other passenger vessels and partnering with
states and boating safety organizations to reduce recreational boating
deaths.
Source: Coast Guard.
aForeign fish enforcement is a key subset of the Coast Guard's other law
enforcement program. For this report, we consider only the resource hours
and performance results associated with the foreign fish aspect of the
other law enforcement program. We subsequently refer to this program as
foreign fish enforcement.
To carry out these responsibilities, , the Coast Guard had almost 44,500
full-time military and civilian positions at the end of fiscal year 2003-
about 9 percent more than it had in fiscal year 2001.2 Also, the Coast
Guard operates a fleet of more than 200 cutters and patrol boats, about
1,600 smaller boats, and almost 200 aircraft-mainly helicopters. Several
efforts are under way to replace, modernize, or add to these assets. The
major one, the Deepwater program, was begun in 1996, to replace or
modernize the Coast Guard's existing ships and aircraft, as well as make
use of innovative technology such as satellites and improved detection
capabilities to carry out its varied mission responsibilities. Deepwater
involves the modernization and replacement of over 90 ships and 200
aircraft used for missions that generally occur beyond 50 miles from
shore.
The Deepwater program has been in development for a number of years.
Between 1998 and 2001, three industry teams competed to identify and
provide Deepwater assets needed to transform the Coast Guard. In June
2002, the Coast Guard awarded a contract to Integrated Coast Guard Systems
(ICGS) as the system integrator for the Deepwater program to develop and
deliver an improved, integrated system of ships, aircraft, unmanned aerial
vehicles, command, control, communications, computer, intelligence,
surveillance, and reconnaissance, and supporting logistics. During the
first 3 years of the program (fiscal years 2002-2004), the Congress
appropriated about $1.5 billion for the program.
2These numbers include about 38,000 military and 6,200 civilian personnel.
In addition, the Coast Guard has about 7,900 reservists, as well as about
36,000 volunteer auxiliary personnel who help with activities ranging from
search and rescue to boating safety education.
Resource Hours Have Changed Substantially for Many Programs, While Performance
Results Have Largely Remained Stable
Total Coast Guard resource hours devoted to its various programs have
increased by 39 percent since the September 11 terrorist attacks.3 Among
the various Coast Guard programs, however, there is a marked difference in
the degree to which resource levels rose or declined. Of the various
programs, the ports, waterways, and coastal security program saw by far
the largest increase-more than 1,200 percent. Before the September 11
attacks, this program was a small component of the Coast Guard, accounting
for less than 4 percent of total resource hours. By the end of fiscal year
2003, the program accounted for 34 percent. As figure 1 shows, resource
hours were up in 4 programs and down in 5. Homeland security programs have
been more likely to see increases in hours, while nonhomeland security
programs have been more likely to see decreases.
3Resource hours, which are the number of hours that Coast Guard ships,
boats, and aircraft are used in each Coast Guard program, provide a basis
for assessing levels of effort in 9 of the Coast Guard's 11 programs. We
used resource hours for cutters, boats, and aircraft as an activity
measure because the Coast Guard does not have a system that tracks how its
personnel spend their time by program. The Coast Guard calculated a
resource hour baseline from which the change in resource hours since the
September 11 attacks can be estimated. This baseline is an average of the
eight fiscal year quarters preceding September 11, 2001 multiplied by four
to put it in terms of a full fiscal year. For the purposes of this report,
we refer to this calculation as the pre-September 11 baseline or as
pre-September 11 levels. According to Coast Guard officials, there is no
special significance to this baseline period, other than it represents the
historical mission activity of the Coast Guard at that period in time.
Although the Coast Guard tracks resource hours for all 11 of its programs,
2 of the 11 are carried out substantially without the use of cutters,
boats, and aircraft. These two are marine safety (such as conducting ship
inspections in port) and marine environmental protection (such as
responding to oil or chemical spills).
Figure 1: Percentage Change in Resource Hours, by Program, Pre-September 11
Baseline to Fiscal Year 2003
Ports, waterways, and coastal security
(19,291 to 254,640 hours)
Defense readiness
(6,446 to 39,853 hours)
Undocumented migrant interdiction
(29,642 to 53,559 hours)
Ice operations
(11,935 to 17,217 hours)
Aids to navigation
(112,148 to 110,456 hours)
Foreign fish enforcement
(7,953 to 6,712 hours)
Search and rescue
(82,689 to 64,383 hours)
Living marine resources
(91,255 to 67,576 hours)
Illegal drug interdiction
(122,694 to 69,268 hours)
Percent change
Up 1,220
Down -44
-200 -100 1,300
Programs with decreasing Programs with increasing resource hours resource
hours
Source: GAO analysis of Coast Guard resource hour data.
Homeland security programs
Non-homeland security programs
While resource hours changed substantially for many of these programs,
their corresponding performance results did not necessarily reflect the
direction of these changes. Most Coast Guard programs have key
indicators-such as the percentage of distressed mariners' lives saved-
that the Coast Guard uses to report program performance. Seven of the 9
programs we reviewed had information on these indicators over the 3-year
period.4 Of these, only 1-defense readiness-showed a consistent
relationship between resources and performance results. (See table 2.) For
that program, resources increased and performance results improved. For
4The Coast Guard had not yet established performance measures for the
ports, waterways, and coastal security program, and fiscal year 2003
measures for the illegal drug interdiction program were not yet available
at the time of our review.
the others, performance either remained stable despite changes in
resources, or they actually improved even though resources decreased.5
Table 2: Comparison of Trends in Resource Hours and Performance Results,
by Program
Increase or decrease in General trend in performance resource hours,
pre-September results, comparing fiscal year
Programa 11 baseline to fiscal year 2003 2001 with fiscal year 2003b
Programs with an inconsistent relationship between resources and
performance results
Undocumented migrant interdiction Increase Stable
Ice operations Increase Stable
Search and rescue Decrease Stable
Living marine resources Decrease Stable
Foreign fish enforcement Decrease Improved
Aids to navigation Stable Improved
Program with a consistent relationship between resources and performance
results
Defense readiness Increase Improved
Programs with incomplete information on trends
Illegal drug interdiction Decrease Data not yet available for 2003
Source: GAO analysis of Coast Guard resource hour and performance data.
aCoast Guard has not yet established performance measures for the ports,
waterways, and coastal security program. Consequently, it is not included
in this table.
bFor this report, we were most interested in comparing performance results
for fiscal year 2001 with the most currently available results-from fiscal
year 2003. As a result, we defined programs as "stable" or "improved"
based on the known results for these 2 years. All programs defined as
"stable" showed a differential of less than 4 percentage points when
comparing fiscal year 2001 and fiscal year 2003 results.
Another way that the Coast Guard assesses its performance is by
determining whether programs have achieved their performance targets each
year. These targets-which represent the goals that the programs aim to
achieve each year-were met in fiscal year 2003 by 5 of the 8 programs we
reviewed.6 (See app. III for a detailed summary of performance targets.)
5For specific program indicators, as well as for results by fiscal year,
see app. II.
6The ports, waterways, and coastal security program does not yet have
established performance targets. In addition, the marine environmental
protection program also met its performance target in fiscal year 2003 but
was not included in our analysis. Since the marine safety program does not
yet have performance results for fiscal year 2003, discussing its target
is not relevant here.
Coast Guard officials acknowledged the apparent disconnect between
resource hours expended and performance results achieved and offered two
explanations for it. The first involved operational efficiencies-Coast
Guard-driven strategies that essentially allowed the agency to accomplish
the same or greater results with fewer resources. These efficiencies were
of four main types-improved technology, improved tactics, stronger
partnerships, and improved intelligence. Table 3 contains an example of
each type.
Table 3: Selected Examples of Operational Efficiencies Cited by Coast
Guard Officials
Improved technology New ships. The recapitalization of the buoy tender
fleet offers a number of improvements, including greater transit speed,
reducing travel time, and allowing more work to be done in a day; a larger
buoy deck allowing the completion of more work during a single deployment
and fewer trips back to base; and improved navigation systems, enabling
safer navigation with fewer people.
Improved tactics Use of armed helicopters. The Coast Guard reported that
the Helicopter Interdiction Tactical Squadron (HITRON) provides personnel,
training, and resources necessary to employ armed helicopters in support
of counter drug operations. Prior to November 2002, the Coast Guard used
two armed helicopters simultaneously with two cutters when responding to
drug interdiction operations. The Coast Guard has since changed its
tactics to use one HITRON with one cutter per operation and has seen no
degradation in the effectiveness of this drug interdiction tactic.
Stronger partnerships Interagency flight schedules. In Miami, the Coast
Guard and another DHS agency, the Immigration and Customs Enforcement
Office, have developed a combined flight schedule to integrate patrol
schedules and assets, which has led to less overlap in response efforts,
saving time and resources for both agencies.
Improved intelligence Intelligence-sharing arrangements. In 2001, the
Coast Guard joined the U.S. Intelligence Community (IC), a federation of
executive branch agencies and organizations that work separately and
together in intelligence-gathering activities. According to Coast Guard
officials, this step greatly enhances the agency's access to information.
Source: Coast Guard.
The Coast Guard's second explanation involved external events or
developments that were largely beyond the Coast Guard's control but had an
influence on the amount of work the Coast Guard had to confront. In fiscal
year 2003, these events and developments included such things as "surge"
demands related to the Iraq War, a large increase in the number of
undocumented migrants attempting to enter the United States by maritime
routes, and poor weather conditions that, for example, increased
icebreaking needs. According to Coast Guard officials, these externalities
had a negative effect on performance results-that is, they made it more
difficult for the Coast Guard to meet its goals, even when more resources
were added. For example, according to Coast Guard officials, while the
percentage of migrants interdicted showed an overall increase from fiscal
years 2002 to 2003, a large increase in illegal immigrants seeking to
enter
the United States by sea during fiscal year 2003 reduced the performance
results percentage from fiscal year 2002 levels.
While the factors cited by the Coast Guard likely have an effect on
mission performance, the extent of that effect is largely unknown. The
Coast Guard does not have a mechanism in place to systematically determine
the extent to which these factors affect performance. For instance, the
Coast Guard does not have data on search and rescue cases handled by local
responders; as a result, it cannot determine the extent to which this
assistance has reduced the Coast Guard's own search and rescue workload.
Coast Guard officials agree on the value of taking a more systematic
approach to assessing performance, including better understanding of the
effects of internal and external factors that affect their performance,
and they have begun a number of steps directed at improving various
aspects of performance assessment. For example, they are developing a
procedure for capturing operating costs on a program-by-program basis, as
well as a system for assessing the agency's ability to respond to mission
requirements. These steps are still in their early stages, and while they
represent a good beginning, it is not yet clear when they will be
completed and whether they will tie together to address the weaknesses we
have identified. Without a clear understanding of this linkage or a
timeframe to ensure that it gets completed, the agency is at risk of
misdirecting resources and missing further opportunities to increase
productivity and efficiency to ensure the best use of its funds. A clear
understanding is also needed to better allow the Congress to make informed
budget decisions for the Coast Guard.
In discussions with us, the Coast Guard has not clearly articulated a
strategy for how these various efforts will weave together. However, Coast
Guard officials told us that more information regarding these efforts will
be included in the agency's strategic blueprint, which has yet to be
finalized.
Reliability and Cost Issues Under the Deepwater program, the Coast Guard's
legacy assets are Associated with Key expected to remain in service until
they are replaced or modernized Deepwater Assets through the Deepwater
acquisition program. The maintenance costs to
keep many of these assets operational have been more than the
amountsHeighten Program Funding the Coast Guard budgeted for these
repairs, and the gap between theseand Management two is widening.
Challenges
Coast Guard Reports Increasing Problems and Rising Costs with Assets
As early as the mid-1990s, the Coast Guard identified problems with its
aging fleet and cited the need to upgrade or replace many of its cutters
and aircraft. The deteriorating condition of some of its deepwater assets
has resulted in increasing operational problems and limitations,
escalating maintenance needs and downtime of assets, and increasing
maintenance costs over the past few years.
Increased Operational Problems and Limitations for Some Deepwater Legacy
Assets
One key indicator of the deterioration of the Coast Guard's legacy assets
is the increasing lost operational days-that is, days in which Coast Guard
cutters could not conduct their normal mission activities. Although the
Coast Guard was unable to provide complete historical data for this trend
among all of its deepwater assets, it could provide data for some of its
major deepwater cutters operating in the Atlantic region.7 As figure 2
shows, between fiscal year 2000 and fiscal year 2003, there is an increase
in lost operational days-from 60 to 165 lost days-between fiscal year 2002
and fiscal year 2003 for these key deepwater assets.8
7Only limited data were available for Pacific region deepwater assets. The
data that were provided indicated that there were 118 lost cutter days in
fiscal year 2003 for the same deepwater assets as identified in the
Atlantic region data. In fiscal year 2004, there have been 137 lost cutter
days as of April 2004.
8It is important to note, however, that 46 of these days were the result
of delays at the Coast Guard yard.
Figure 2: Lost Operational Days for Atlantic Region Cutters by Fiscal Year
Lost operational days
180
160
140
120
100
80
60
40
20
0 FY 2000 FY 2001 FY 2002 FY 2003
Source: GAO analysis of Coast Guard data on Atlantic Area lost operational
days.
The Coast Guard provided the following examples of these problems and
restrictions:
o An increasing number of in-flight safety-related incidents for the
HH-65 helicopter.9 These incidents have resulted in the Coast Guard
placing increased restrictions on the HH-65's operations, including a
reduced flight range and a reduced passenger/crew level to help reduce
safety risks for these assets and the personnel flying them.
o A large number of hull incidents on a class of key Coast Guard patrol
boats. To date, 20 of the Coast Guard's 110-foot patrol boats have
experienced significant levels of deterioration that have resulted in hull
breaches requiring emergency repairs. To repair these hull breaches, each
of these vessels were removed from service for an average of 3 months.
o An increasing need to implement special safety response measures
aboard the fleet of 378-foot high endurance cutters. These ships-the
largest of the Coast Guard's offshore cutters-have had to regularly
9A total of 32 incidents were reported in fiscal 2003; for the first 5
months of fiscal year 2004, almost 70 incidents have been reported.
implement fire team response procedures when on patrol due to numerous
fuel or lube oil leaks. These procedures entail having the crew perform
critical safety and fire response actions, such as evacuating the
engineering space, donning firefighting gear, and investigating the cause
of the engineering casualty, while the ship's systems are shut down and
the cutter is "dead in the water"-for a period of time.
Concerns about Unscheduled Maintenance
In addition to lost operational days, unscheduled maintenance days are
also a concern. That is, when a cutter is undergoing unscheduled
maintenance, it is also likely to be out of operation as well. However,
Coast Guard officials noted that unscheduled maintenance days do not
always result in lost operational days because they are sometimes able to
schedule additional operational days for another cutter to make up for
lost days from the cutter undergoing unscheduled maintenance. As figure 3
shows, the cumulative number of unscheduled maintenance days for the Coast
Guard's mainstay cutters and a key patrol boat (the 210-foot, 270foot, and
378-foot cutters and the 110-foot patrol boat)-have increased since fiscal
year 2002.10
10The increase in overall unscheduled maintenance days is being driven by
unscheduled maintenance days for the 110-foot patrol boats.
Figure 3: Unscheduled Maintenance Days for Selected Coast Guard Cutter
Assets, Fiscal Years 2000-2003
Number of unscheduled maintenance days
700
600
500
400
300
200
100
0 FY 2000 FY 2001 FY 2002 FY 2003
Source: GAO analysis of Coast Guard data on unscheduled maintenance days.
The Coast Guard provided us with examples of some of the more significant
unscheduled maintenance events that its legacy cutters have experienced in
recent years that resulted in lost operational days for the affected
cutters. Because these cutters are typically scheduled to operate on
average about 175 to185 days per year, a loss of 20 or more days in a year
can be significant. These examples included:
o Twenty-eight lost operational days in fiscal year 2003 for the 36-year
old high endurance cutter, Chase, due to main engine and boiler
casualties; 84 lost operational days so far in fiscal year 2004 due to
additional mechanical problems.
o Twenty-four lost operational days in fiscal year 2003 for the 36-year
old high endurance cutter, Gallatin, due to a shaft coupling failure.
Increasing Maintenance Costs for Cutters and Patrol Boats
Unscheduled maintenance costs have also increased significantly over the
past few years. According to our analysis of Coast Guard data on some of
its major cutters and patrol boats, these maintenance expenditures have
increased 79 percent-from about $522,000 to almost $934,000 per
vessel-between fiscal year 2000 and fiscal year 2003. As a result, the
Coast Guard is finding that in recent years it has spent much more on
maintaining its aging assets, than it had planned. To determine how much
to budget for asset maintenance, the Coast Guard determines what is known
as the "standard support level" (SSL) for each of its vessels when they
are commissioned. This budgetary estimate is equal to the amount of
funding provided each year for vessel casualty support and maintenance
needs, according to a Coast Guard official. The estimate is increased each
year based on certain cost of living adjustments, and the support level
can vary according to the estimated operating days for the class of the
vessel. According to the Coast Guard, when maintenance expenditures exceed
the SSL for a class of vessels, a budget deficit is created that must be
filled with funds from other vessels, or from outside sources. In fiscal
year 2003, the gap between the Coast Guard's planned and actual
maintenance expenditures for key legacy assets was about almost $500,000
per vessel. (See fig. 4.)
Figure 4: Actual Maintenance Expenditures (EXP) over Budgeted Standard
Support Level (SSL)
Constant dollars 1,000,000
900,000
800,000 In fiscal year 2003, EXP 700,000 exceeded SSL by almost 600,000
$500,000 per vessel.
500,000
400,000
300,000
200,000
100,000
0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
1999 2000 2001 2002 2003
Fiscal year
Source: Coast Guard.
Note: This figure includes expenditures for four classes of cutters: the
378-foot high endurance cutters, the 270-foot medium endurance cutters;
the 210-foot medium endurance cutters, and the 110-foot patrol boats.
Escalating maintenance costs and their effects are evident in the
following examples:
o In fiscal year 2002, the Coast Guard removed from service two of its
210-foot medium endurance cutters because, according to Coast Guard
officials, they had become too costly to maintain. According to a
knowledgeable Coast Guard official, these two cutters were both over 35
years old, and the Coast Guard estimated that it would have cost about $1
million per year, per vessel to keep them in service, if they had not been
decommissioned.
o Returning from a 2-month patrol on a 20-year old 270-foot medium
endurance cutter, the ship's commander reported that even after completing
$1 million in repairs and maintenance in the past year, the vessel still
had a tremendous backlog of critical maintenance that continued to grow
exponentially. In addition, the commander reported that during this
particular patrol, the cutter had experienced numerous debilitating vessel
maintenance problems-or casualties-resulting in 5 lost cutter days. He
also noted that the cutter would require 30 or more days of repair upon
its return. The commander further reported
Coast Guard Is Facing Serious Challenges to Keep the Program on Schedule
and within Budget Projections
that he believed the vessel casualties encountered on this patrol
foreshadowed the long-term impact that continued deferral of major
maintenance actions would have on overall operational readiness.
The Coast Guard was unable to attribute specific mission performance
deterioration to these types of incidents; however, reduced operating
availability time and increasing maintenance downtime for these assets
would likely adversely affect mission performance results in the future.
Given these maintenance costs and reliability problems, it is unclear what
the actual service life might be for some of these assets, particularly
the cutters and the HU-25 fixed wing aircraft, according to Coast Guard
officials. And certainly, decisions to overhaul or upgrade assets would
affect their longevity as well. However, Coast Guard officials said that
it is unclear at this time as to when these Deepwater assets will become
so costly to maintain that the Coast Guard would have no other logical
choice but to retire them. This type of analysis would be valuable to the
Coast Guard and the Congress in determining the priority order for future
asset replacements and upgrades.
The Coast Guard's Deepwater program-which uses a unique contracting
approach requiring steady funding over 20 years-is facing serious
challenges to keep the program on schedule and within budget estimates.
Now, almost 2 years after the contract for the Deepwater program was
awarded, cost estimates to complete the program have increased by about
$2.2 billion in nominal terms, and key components necessary to manage the
program effectively have not been rigorously implemented. In addition, new
homeland security requirements, which have not yet been defined or
approved, and necessary major modifications to key legacy assets make
keeping the program on track that much harder.
Under current funding plans, the Coast Guard continues to face potential
cost increases in its $17 billion Deepwater program. The Coast Guard chose
a unique contracting approach that requires steady funding for the program
over its 20-year life. Under this approach, the Coast Guard has started on
a course potentially expensive to alter and one that carries some risks.
In a 2001 report11, we expressed concern that the Coast Guard risked
schedule slippages and cost escalation if project funding fell short
11U.S. General Accounting Office, Coast Guard: Progress Being Made on
Deepwater Project, but Risks Remain (GAO-01-564, May 2, 2001).
of planned funding levels.12 Now, very early in the program our concerns
are being realized. Program funding in the first 2 years was less than the
agency planned by about $125 million. This resulted in delays in the
scheduled delivery of key deepwater assets, such as the maritime patrol
aircraft. The Congress appropriated more than the requested funding in
fiscal year 2004, and if the agency receives the $678 million funding
level requested in the fiscal 2005 budget proposal, the Deepwater program
will have cumulatively received $46 million more than planned levels for
the first 4 years. However, according to the Coast Guard, the program's
acquisition schedule has been lengthened and higher funding levels, ($795
million per year over the remaining years of the program), will be needed
to restore this schedule to its original 20-year completion pace.
Currently, Coast Guard officials believe that a continuing stream of
funding at $795 million (adjusted for inflation) would put the project
back onto its original 20-year time schedule. However, on this funding
schedule, total costs for the Deepwater program, assuming no additional
changes, would reach $17 billion-in nominal terms-about $2.2 billion more
than the Coast Guard's earlier estimate.13 Because of time constraints for
completing work for this statement, we could not assess the reasons for
the cost escalation. Coast Guard officials attributed the increased costs,
so early in the program, to the following factors.
o Under-funding in the first 2 years put the program behind schedule and
resulted in lost efficiency and flexibility that they believe would have
been realized by acquiring multiple assets in a more coordinated way. They
believe that this coordinated approach would have offered efficiencies.
For example, they said that acquiring multiple assets simultaneously or in
their planned sequence would allow for more efficient logistical support
with respect to training, and infrastructure planning for such things as
facility and pier space for personnel and assets. However, they believe
that these efficiencies were lost when these assets could not be purchased
simultaneously.
o The maintenance costs associated with sustaining legacy assets have
increased more than anticipated as these assets deteriorated faster than
expected. As a result, available future funding may have to be
12This $2.2 billion estimate assumes completion of the Deepwater contract
in a total of 20 years.
13The earlier estimate called for completing the Deepwater program in 22
years with a continuing stream of funding at $530 million (adjusted for
inflation).
Increased Management and Oversight Attention Needed to Successfully
Complete the Deepwater Program
used, in part, to address critical maintenance needs of the legacy
Deepwater assets, diverting funds otherwise intended for future Deepwater
replacements and upgrades. In addition, Coast Guard officials indicated
that maintenance schedules for some vessels were perhaps not kept
according to plan in anticipation of these assets being replaced or
overhauled through the Deepwater program.
o Delays have resulted in increased costs due to normal price inflation.
Because the contract for acquiring Deepwater assets has a price adjustment
factor that allows asset prices to be adjusted for inflation, costs for
these assets have increased over time.
o Due to revised homeland security requirements, some redesign of the
national security cutter has occurred. These modifications, made to ensure
the vessel would accommodate DHS needs included such things as lengthening
the vessel to accommodate DHS aircraft, installing an onboard intelligence
center, and making modifications to allow sustainability in an environment
tainted by chemical, biological and radiological agents. According to
Coast Guard officials, these modifications resulted in additional costs
for the Deepwater program.
In recent discussions with Coast Guard officials about the Deepwater
program, they were not able to explain in more detail the reasons for the
escalation in the program costs and did not provide additional information
to us before we completed our work. However, officials indicated that they
would provide additional information in the future.
While expeditiously completing the Deepwater program is important to the
ability of the Coast Guard to effectively fulfill its responsibilities in
the future, the agency must also be diligent in managing the contract, and
ensuring necessary competition among contractors to prevent additional
cost increases in the program. As we have recently reported we have
concerns regarding the management and oversight of the project to date.14
Almost 2 years after the contract was awarded for implementation of the
Deepwater program, the key components needed to manage the program
14U.S. General Accounting Office, Contract Management: Coast Guard's
Deepwater Program Needs Increased Attention to Management and Contractor
Oversight
(GAO-04-380, Mar. 9, 2004).
and oversee the system integrator's performance15 have not been
effectively implemented in the following areas:
o The effectiveness of the Integrated Project Teams-established as the
main tool for managing the program and overseeing the contractor- has been
weakened due to changing membership, understaffing, insufficient training,
lack of authority for decision making, and inadequate communication among
members.
o Although delivery of some of the first assets is imminent, the Coast
Guard has not effectively communicated to its operational personnel
decisions on how new and old assets will be integrated and how maintenance
responsibilities will be divided between government and contractor
personnel.
o The Coast Guard has not developed quantifiable metrics or adhered to
effective procedures for holding the system integrator accountable for its
ongoing performance, resulting in a process for assessing performance that
lacked rigor.
o The Coast Guard has not yet begun to measure the system integrator's
performance on the three overarching goals of the Deepwater
program-operational effectiveness, minimizing total ownership cost, and
customer satisfaction. This information will be essential to the Coast
Guard's decision about whether to extend the system integrator's contract
after the first 5 years.
o We have concerns about the Coast Guard's efforts to measure the extent
of competition among the suppliers of Deepwater assets, or hold the system
integrator accountable for doing so to achieve this competition. The Coast
Guard's "hands-off" approach in this area raises questions about whether
the government will be able to control costs in the Deepwater program.
Concerns about the Coast Guard's ability to rely on competition as a means
to control future costs contributed to our description of the Deepwater
program in 2001 as "risky." Three years later, these concerns remain.
15The prime contractor, known as the "system integrator," is responsible
for overall program planning and management, asset integration, and
overseeing the delivery of specific Deepwater assets.
Unplanned Legacy Asset Modifications and Updated Deepwater Requirements
Pose Potential Additional Challenges
In addition to funding and contract management concerns, there are other,
as yet relatively unknown, but potentially significant factors that could
affect the Coast Guard's Deepwater program. Recent discoveries about the
condition of some legacy assets, and corresponding actions taken, combined
with anticipated updates in the Coast Guard's mission requirements, may
give the Coast Guard additional reasons to re-think its prioritization for
obtaining or upgrading certain Deepwater assets.
In recent years, the Coast Guard has had to make major unplanned upgrades
on some of its Deepwater assets. Most recently, the Coast Guard decided to
replace its HH-65 helicopter engines because of serious safety and
reliability issues with that aircraft. Modernization of this helicopter is
planned as part of the Deepwater program beginning in 2007, but for safety
and reliability reasons, the existing engine on this helicopter needed to
be replaced much sooner.16 The HH-65 is the Coast Guard's mainstay
helicopter, serving such missions as search and rescue, drug and migrant
interdiction, and homeland security. Problems with the current engine and
related components have been occurring for a number of years, affecting
the amount of power available for hovering, lifting, and other operations.
To address these problems, the Coast Guard plans to take action along two
tracks. First, until the replacement engines are installed, they plan to
upgrade the existing engines. Second, they plan to install new engines in
the entire HH-65 fleet within 24 months. However, there are potential
consequences for the Deepwater acquisition process associated with this
early replacement decision. Funds to pay for the replacement engine are to
be diverted from other Deepwater projects-a factor that could exacerbate
further schedule delays. Also, the alignment between deepwater
requirements-which have not yet been finalized-and those for the
replacement engine cannot be determined. If the requirements are not in
alignment, the Coast Guard faces significant cost and schedule risks
because another engine replacement could be required to meet new mission
requirements. Irrespective of these concerns, the Coast Guard's decision
to re-engine these helicopters, in and of itself, provides reason for the
agency to reassess its planned schedule for upgrading this asset under the
Deepwater program.
16U.S. General Accounting Office, Coast Guard: Replacement of HH-65
Helicopter Engine (GAO-04-595, Mar. 24, 2004).
Coast Guard officials also anticipate that updated agency requirements-
engendered by homeland security needs that were not known and, therefore,
not factored into the original mission requirements developed prior to the
September 11 attacks-also need to be considered. According to Coast Guard
officials, they are currently in the process of re-examining the agency's
Deepwater mission requirements to ensure that they align with DHS'
strategic goals, and that the agency is able to meet increased mission
demands and higher performance targets in a post September 11 environment.
The Coast Guard's review of its Deepwater mission needs statement is
expected to be completed by April or May 2004 and submitted to DHS for
approval at that time.
This continually evolving information flow challenges the Coast Guard even
further to ensure that funds are wisely spent. As a result, as interim
asset decisions, discoveries, and evolving mission priorities are
identified, it becomes even more imperative that the Coast Guard
continually updates its acquisition schedule and decision making to ensure
that choices are made based on timely and accurate information.
Overview of Fiscal Year 2005 Budget and Funding for Several Areas of Particular
Congressional Interest
The President's fiscal year budget request for the Coast Guard of nearly
$7.5 billion represents an increase of about $534 million, or about 8
percent in nominal dollars over the enacted budget for fiscal year 2004.17
It includes almost $5.2 billion in operating expenses and $943 million for
its capital acquisition budget. The majority of the increase covers pay
increases for current and retired employees or continues certain programs
already underway, such as follow-on funding for construction projects at
Coast Guard shore-side facilities, the Great Lakes Icebreaker
construction, and information technology projects. About $115 million of
the increase would fund new initiatives, about 90 percent of which relate
to homeland security. The most significant new initiative at $102 million
would be used to implement the Maritime Transportation Security Act (MTSA)
of 2002.18
17This calculation does not include supplemental appropriations but does
include the fiscal year 2004 rescissions.
18The Maritime Transportation Security Act is comprehensive legislation
that implements security standards that would apply to all foreign vessels
seeking to enter the United States.
This funding would be used to add about 500 new personnel
(full-timeequivalent) who will perform various security-related and other
functions.19 An additional $2.2 million is being requested to fund a new
initiative for increasing maritime domain awareness-another homeland
security function.20
One area of particular interest to the Congress over the last several
years is the readiness of its multi-mission stations. In September 2001,
the Department of Transportation, Office of Inspector General, reported
that readiness at multi-mission stations was deteriorating.21 For example,
staff shortages at most stations required crews to work an average of 84
hours per week, well above the standard (68 hours maximum) established to
limit fatigue and stress among personnel. Subsequently, the Congress
appropriated funding totaling about $50 million for fiscal years 2002-2004
specifically to pay for increased staff, training, and equipment at
stations and command centers. However, the degree that readiness has
improved, if any, is unclear. For example, according to the Coast Guard,
the average workweek at the multi-mission stations is still about 83 hours
per week, even though about 1,100 personnel were added between fiscal
years 2001 and 2003. According to a Coast Guard official, one main reason
for this high work week, is that these stations have taken on a major
homeland security role since September 11, resulting in a heavier workload
for station personnel carrying out functions, such as vessel escorts and
port security patrols.
19Prior to fiscal year 2005, 480 Coast Guard reservists were handling MTSA
implementation. The Coast Guard reported that authority to call up
reservists will expire in fiscal year 2005; therefore it has requested
almost 500 active duty personnel (full-time-equivalent) to take over these
activities. Rather than approving implementation plans as was done by the
reservists in fiscal year 2004, the new personnel in fiscal year 2005
will, for example, approve vessel and facility security plans, ensure
operators are in compliance with their plans, and perform inspection
activities on foreign vessels.
20According to the Coast Guard, Maritime Domain Awareness is an initiative
that will provide visibility into events, conditions, and trends in the
maritime domain to give national leaders, operational commanders, and
maritime stakeholders the information and knowledge they need for both
operational and policy decisions. Coast Guard information explains that
this will help offset the physical impossibility of patrolling the entire
U.S. maritime domain simultaneously or inspecting, certifying, and
validating all travelers and cargoes.
21Audit of the Small Boat Station Search and Rescue Program. MH-2001-94
(Washington, D.C., Sept. 14, 2001).
Of the $943 million requested for capital projects, $839 million, or 89
percent, would be dedicated to two projects-the Deepwater program ($678
million) and Rescue 21 ($161 million). Rescue 21, the Coast Guard's second
largest acquisition program, provides for the modernization of the
command, control, and communication infrastructure of the National
Distress and Response System. The current system suffers from aging
equipment, limited spare parts, and limited interoperability with other
agencies. Of particular concern to the Coast Guard and the maritime
community are the current system's coverage gaps, which can result in
missed maritime distress calls. The Congress mandated the completion of
the new system by the end of fiscal year 2006. The fiscal year 2005
request for $161 million is aimed to keep the project progressing;
however, technical problems with software development have delayed
implementation of the first elements of the system that were scheduled for
last summer, and it is unclear to agency officials whether these issues
will prevent the agency from completing implementation of the program on
time. In recent discussions with Coast Guard officials, they said that
they do not yet know whether Rescue 21 will be completed on time at the
end of fiscal year 2006, but they currently do not anticipate any cost
escalation in the program, which is presently estimated to cost $953
million.
Madame Chair and Members of the Subcommittee, this completes my prepared
statement. I would be happy to respond to any questions that you or other
Members of the Subcommittee may have at this time.
Contacts and For information about this testimony, please contact Margaret
Wrightson, Director, Homeland Security and Justice Issues, at (415)
904-2200, or
Acknowledgments wrightsonm@gao.gov. Other individuals making key
contributions to this testimony include Dawn Hoff, Joseph Kile, Dawn
Locke, Stan Stenersen, and Randall Williamson.
Appendix I: Scope and Methodology
To determine the most recent trends in both resource usage and performance
results for the Coast Guard's homeland security and nonhomeland security
programs and the implication of these trends for Coast Guard management
and accountability, we summarized findings from a recent GAO report.1
To determine the challenges the agency faces as it proceeds with its
program to modernize its Deepwater cutters and aircraft, we summarized
briefings prepared in 2004 by the Coast Guard for the Congress and for
internal use on the Deepwater program and the HH-65 helicopters. We also
interviewed Coast Guard staff at headquarters to determine the potential
impacts of deteriorating Deepwater assets. In addition, we used current
maintenance expenditure data provided by the Coast Guard to perform an
historical analysis of maintenance costs. To assess the reliability of
these data, we interviewed knowledgeable Coast Guard officials and
reviewed existing documentation about the data and the systems that
produced them. We determined that the data were sufficiently reliable for
the purposes of this report.
To give an overview of the President's fiscal year 2005 budget request for
the Coast Guard, focusing on several areas of particular congressional
interest, we obtained information on the average workweek of personnel at
the Coast Guard's multi-mission stations and interviewed Coast Guard
headquarters staff to determine how the fiscal year 2005 budget will
address MTSA implementation, Rescue 21, and multi-mission stations. We
also reviewed the Coast Guard's C-stage budget and other financial
documentation provided by the Coast Guard.
This testimony is based on published reports and briefings as well as
additional audit work that were conducted in accordance with generally
accepted government auditing standards.
1U.S General Accounting Office, Coast Guard: Relationship between
Resources Used and Results Achieved Needs to Be Clearer (GAO-04-432, Mar.
22, 2004).
Appendix II: Coast Guard Performance Results, Fiscal Years 2001-2003
Table 4 shows a detailed list of performance results for the 8 programs
for which we obtained data. In a recent report, we compared performance
results for our baseline year-fiscal year 2001-with the most currently
available results-fiscal year 2003.1 As a result, we defined programs as
"stable" or "improved" based on the known results for these 2 years. All
programs defined as stable showed a differential of less than 4 percentage
points when comparing fiscal year 2001 and fiscal year 2003 results.
Table 4: Performance Results, by Program, from Fiscal Years 2001 through 2003
Performance results by Program Performance measure fiscal year
2001 2002 2003
Stable results
Percentage of interdicted
Undocumented migrant illegal migrants entering the
United States
interdiction through maritime means. 82.5% 88.3% 85.3%
Ice operations Number of waterway closure days 7 7
Living marine resources Percentage of fishermen found in 98.6% 97.3% 97.1%
compliance with regulations.
Search and rescue Percentage of mariners' lives 84.2% 84.4% 87.7%
saved.
Improving results Pending results
Foreign fish Number of detected Exclusive
enforcement Economic Zone (EEZ)a incursions by
foreign fishing vessels. 219 250 153
Aids to navigation Number of collisions, allisions, b 1,677 1,936 1,523
and groundings.
Defense readiness Percentage of time units meet combat 67% 70% 78%
readiness status at C-2 level.c
Illegal drug interdiction Percentage of cocaine seized out of total
estimated cocaine entering the
d
United States through maritime means. 11.7% 10.6% N/Ae
Source: GAO analysis of Coast Guard performance data.
aThe EEZ is defined by the 1976 Magnuson-Stevens Fishery Conservation and
Management Act as an area within 200 miles of U.S. shores in which U.S.
citizens have primary harvesting rights to fish stocks.
bThe Coast Guard defines an "allision" as a vessel collision with a fixed
object.
cAccording to Coast Guard information, the C-2 level is defined as the
level at which each unit possesses the resources and is trained to
undertake most of the wartime missions for which it is organized or
designed.
1For complete information, see U.S. General Accounting Office, Coast
Guard: Relationship between Resources Used and Results Achieved Needs to
Be Clearer (GAO-04-432, Mar. 22, 2004).
dThe illegal drug interdiction performance measure only includes cocaine
as cocaine has an analyzed flow rate, and it constitutes the preponderance
of illegal drugs entering the United States through maritime means (i.e.,
cocaine shipments are measured in tons while heroin, marijuana, and other
illegal drugs are measured in pounds).
eThe illegal drug interdiction performance result for fiscal year 2003
will not be calculated until the Interagency Assessment of Cocaine
Movement (IACM) publishes its flow rate in spring of 2004.
Appendix III: Performance Targets for Fiscal Year 2003
In a recent report, we showed that another way that the Coast Guard
assesses its performance is by determining whether programs have achieved
their performance targets each year.1 These targets-which represent the
goals that the programs aim to achieve each year-were met in fiscal year
2003 by 5 of the 8 programs we reviewed.2 (See table 5.) Two of the
programs that did not meet their performance targets were defense
readiness and undocumented migrant interdiction. Coast Guard officials
reported that the defense readiness program did not meet its target, in
part, because of equipment problems associated with operating aging ships
and unit training deficiencies, such as cutters not having sufficient
training time to perform gunnery exercises.3 As for the undocumented
migrant interdiction program, Coast Guard officials reported that they
consider their results to be a minimal decline, given the substantial
increase in the number of migrants they successfully interdicted during
the year.4 For example, of the key migrant populations tracked by the
Coast Guard, about 5,300 illegal migrants were interdicted in fiscal year
2003 compared with about 2,400 in fiscal year 2002, an increase of 120
percent.5 We could not determine whether the remaining program, illegal
drug interdiction, met its performance target because the performance
results
1For complete information, see U.S. General Accounting Office, Coast
Guard: Relationship between Resources Used and Results Achieved Needs to
Be Clearer (GAO-04-432, Mar. 22, 2004).
2The marine environmental protection program also met its performance
target in fiscal year 2003 but was not included in our analysis. Also,
since the marine safety program does not yet have performance results for
fiscal year 2003, discussing its target is not relevant here.
3According to Coast Guard information, the C-2 level is defined as the
level at which each unit possesses the resources and is trained to
undertake most of the wartime missions for which it is organized or
designed.
4The undocumented migrant interdiction performance measure indicates the
percentage of migrants interdicted or deterred from entering the United
States via maritime routes. Specifically, it is the number of interdicted
migrants divided by the estimated flow of undocumented migrants (which
includes the number of law enforcement interdictions, known successful
migrant arrivals, and the estimated number of migrants deterred from
leaving their countries of origin). This estimate is prepared annually by
the Coast Guard's Intelligence Coordination Center.
5According to the Coast Guard, the 2002 and 2003 illegal migrant numbers
stated here include only those counted in the undocumented migrant
performance measure, which uses the following four migrant populations:
Haiti, Cuba, the Dominican Republic, and the People's Republic of China.
The total number of all migrants interdicted in fiscal years 2002 and 2003
were 4,104 and 6,054, respectively.
for fiscal year 2003 were not yet available at the time we conducted our
work.
Table 5: Performance Targets by Program for Fiscal Year 2003
Target met in
fiscal year
Program Fiscal year 2003 Fiscal year 2003?
performance targets 2003 result
Interdict or deter at least 85.3% No
Undocumented migrant 87 percent of illegal
interdiction migrants entering the
United States through
maritime means.
Illegal drug Seize 20.7 percent or To be To be
interdiction more of cocaine entering determineda determineda
the United States through
maritime means.
Limit waterway closures Yes
Ice operations to 8 days during 7 days
severe winters.
Raise percent of
Living marine fishermen found in 97.1% Yes
resources compliance
with regulations to 97
percent or above.
Search and rescue Save at least 85 percent 87.7% Yes
of all mariners in
distress.
Foreign fish Reduce number of detected 153 incursions Yes
enforcement EEZ incursions by
foreign fishing vessels
to 202 or less.
Reduce 5-year average of 1,523 CAGs Yes
Aids to navigation collisions, allisions,
and groundings (CAGs) to
2,010 or less.
Maintain an overall
Defense readiness combat readiness status 78% No
at
C-2 level or better for
100 percent of assets.
Source: GAO analysis of Coast Guard performance data.
aThe illegal drug interdiction performance result for fiscal year 2003
will not be available until spring of 2004.
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