Coast Guard: Observations on Agency Priorities in Fiscal Year
2006 Budget Request (17-MAR-05, GAO-05-364T).
The Coast Guard's budget has steadily increased in recent years,
reflecting the agency's need to address heightened homeland
security responsibilities while also addressing traditional
programs such as rescuing mariners in distress and protecting
important fishing grounds. The fiscal year 2006 budget request,
which totals $8.1 billion, reflects an increase of $570 million
over the previous year. GAO has conducted reviews of many of the
Coast Guard's programs in recent years, and this testimony
synthesizes the results of these reviews as they pertain to three
priority areas in the Coast Guard's budget: (1) implementing a
maritime strategy for homeland security, (2) enhancing
performance across missions, and (3) recapitalizing the Coast
Guard, especially the Deepwater program--an acquisition that
involves replacing or upgrading cutters and aircraft that are
capable of performing missions far out at sea. GAO's observations
are aimed at highlighting potential areas for ongoing
congressional attention.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-05-364T
ACCNO: A19617
TITLE: Coast Guard: Observations on Agency Priorities in Fiscal
Year 2006 Budget Request
DATE: 03/17/2005
SUBJECT: Agency missions
Budget administration
National defense operations
National preparedness
Organizational change
Performance measures
Program management
Risk management
Schedule slippages
Budget requests
Homeland security
Coast Guard Deepwater Project
Coast Guard Rescue 21 System
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GAO-05-364T
United States Government Accountability Office
GAO Testimony
Before the Subcommittee on Fisheries and Coast Guard, Committee on
Commerce, Science, and Transportation, U.S. Senate
For Release on Delivery
Expected at 10:00 a.m. EDT COAST GUARD
Thursday, March 17, 2005
Observations on Agency Priorities in Fiscal Year 2006 Budget Request
Statement of Margaret T. Wrightson, Director, Homeland Security and Justice
Issues
GAO-05-364T
[IMG]
March 17, 2005
COAST GUARD
Observations on Agency Priorities in Fiscal Year 2006 Budget Request
What GAO Found
The Maritime Transportation Security Act of 2002 charged the Coast Guard
with many maritime homeland security responsibilities, such as assessing
port vulnerabilities and ensuring that vessels and port facilities have
adequate security plans, and the Coast Guard has worked hard to meet these
requirements. GAO's reviews of these efforts have disclosed some areas for
attention as well, such as developing ways to ensure that security plans
are carried out with vigilance. The Coast Guard has taken steps to deal
with some of these areas, but opportunities for improvement remain.
The Coast Guard has three efforts under way that hold promise for
enhancing mission performance but also merit ongoing attention. One is a
new coastal communication system. The fiscal year 2006 budget request
includes $101 million to move the system forward. A successful system
would help almost all Coast Guard missions, but to develop it the Coast
Guard must build more than 300 towers along the nation's coasts, some of
them in environmentally sensitive areas. The second effort involves
restructuring the Coast Guard's field units-tying resources and command
authority closer together. This effort represents a major organizational
change, and as such, it may be challenging to implement successfully. The
third effort, enhancing readiness at the Coast Guard's stations for search
and rescue and other missions, remains a work in process.
The Deepwater program, which would receive $966 million under the budget
request, appears to merit the most ongoing attention. GAO reviews of this
program have shown that the Coast Guard clearly needs new or upgraded
assets, but the Coast Guard's contracting approach carries a number of
inherent risks that, left unaddressed, could lead to spiraling costs and
slipped schedules. The Coast Guard is taking some action in this regard,
but GAO continues to regard this approach as carrying substantial risk.
Some expansion of cost and slippage in schedule has already occurred.
Coast Guard Budget, Fiscal Years 2002-2006 (dollars in millions) 9,000
8,146
8,000
7,000
6,000
5,000
4,000 3,000 2,000 1,269
1,000
0 2002 actual 2003 actual 2004 actual 2005 enacted 2006 requested
Fiscal year
Total Coast Guard budget Acquisition, construction, and improvements
Operating expenses
Source: GAO analysis of Coast Guard data.
United States Government Accountability Office
Madame Chair and Members of the Subcommittee:
I am pleased to be here today to discuss the President's fiscal year 2006
budget request for the Coast Guard, focusing on three priority areas the
Coast Guard believes are critical to improving performance and reducing
vulnerabilities within the U.S. maritime domain. As you know, the Coast
Guard continues to face extraordinary, heightened responsibilities to
protect America's ports, waterways, and waterside facilities from
terrorist attacks, while also maintaining responsibility for many other
programs important to the nation's interests, such as helping stem the
flow of illegal drugs and illegal immigration, protecting important
fishing grounds, and responding to marine pollution. At the same time, the
Coast Guard is adjusting to its new home in the Department of Homeland
Security (DHS) and attempting to manage the largest acquisition in its
history, replacing or upgrading virtually all of its deepwater assets
(ships and aircraft capable of operating further out to sea). It is an
understatement to say that the Coast Guard has a lot going on. In
recognition of this, the Coast Guard has received substantial budget
increases since the terrorist attacks on September 11, 2001.
My testimony today provides a brief overview of the Coast Guard's budget
and performance information, and then discusses key Coast Guard programs
and activities within the context of a three-part framework that the Coast
Guard outlines in its fiscal year 2006 budget documents. The Coast Guard
believes that funding three priority areas-implementing the maritime
strategy for homeland security, enhancing mission performance, and
recapitalizing the Coast Guard-are essential to best position the agency
to implement the President's strategies and reduce vulnerabilities in the
U.S. maritime domain. My testimony is based on a number of reviews we have
conducted in recent years on several Coast Guard programs. (See app. II
for a listing of recent reports.) Our work for this testimony has been
conducted from February 2005 to March 2005 in accordance with generally
accepted government auditing standards. (See app. I for additional
information regarding our scope and methodology.)
In summary, the 2006 request reflects the continuing importance the
administration attaches to the Coast Guard's missions-especially those
that relate to homeland security. Our recent work indicates that funding
increases may be warranted, given the condition of the Coast Guard's aging
assets and the fact that the systems and processes the agency needs to
improve maritime domain awareness and security were either inadequate or
nonexistent prior to the terrorist attacks. Nevertheless, as our work also
has shown, dramatic infusions of money do not guarantee
success, but bring added responsibility to ensure that these large
investments of taxpayer dollars are wisely spent. The risk that an agency
may simply attempt to do too much and do it too quickly is increased when
an agency faces as many significant new heightened responsibilities as the
Coast Guard. We have not evaluated the Coast Guard's priorities or whether
the funding levels proposed are those needed to accomplish these
priorities. However, our work does show that in key areas the Coast Guard
has not always paid as much attention to program design and management as
it should. These design and management issues can often have implications
for how effectively money is spent. My testimony focuses on findings from
our recent work as they relate to each of the Coast Guard's three priority
areas, the recommendations we made, the progress that the Coast Guard has
made in addressing them, and the issues that remain. First, I would like
to put the fiscal year 2006 budget request in a historical context and
also provide some perspective on the Coast Guard's reported performance
results.
Funding Has The Coast Guard's 2006 budget request continues a trend of
increasing budgets that began in fiscal year 2002, as figure 1 shows.
Escalated in Recent Years, but Is Difficult to Link to Performance Results
Figure 1: Coast Guard Budget from Fiscal Year 2002 to Fiscal Year 2006 (dollars
in
millions)
9,000
8,000
7,000
6,000
5,602
5,000
4,000
8,146 7,576 7,0126,811
5,547
5,191 4,920 4,718
3,757
3,000
2,000
1,269
1,000
702
0 2002 actual 2003 actual 2004 actual 2005 enacted 2006 requested
Fiscal year
Total Coast Guard budget
Operating expenses
Acquisition, construction, and improvements Source: GAO analysis of Coast
Guard data.
If the Coast Guard's full budget request is granted, its funding will have
increased by 45 percent in nominal terms in this 5-year period. A major
portion of this growth will have occurred in the acquisition,
construction, and improvements account, which grew 81 percent in nominal
dollars between the fiscal year 2002 actual funds and the fiscal year 2006
requested funds-a $568 million increase. Much of this increase can be
attributed to two major acquisition projects-Deepwater and Rescue 21.
Deepwater is the Coast Guard's largest-ever acquisition program. It
replaces or modernizes cutters, aircraft, and communications equipment for
missions that require mobility, extended presence on scene, and the
capability of being deployed overseas. Rescue 21, the Coast Guard's second
largest procurement in fiscal year 2006, will replace the Coast Guard's
current antiquated coastal communication system.
The fiscal year 2006 budget request shows a $570 million increase to $8.1
billion,1 which is an increase of about 11 percent in its discretionary
funding over the enacted budget for fiscal year 2005.2 The majority of the
total is for operating expenditures: $5.5 billion. Capital acquisition
accounts for another approximately $1.3 billion, and the remainder is
primarily for retired pay. (See app. III for more detail on the Coast
Guard's fiscal year 2006 budget accounts.) Much of the additional $570
million over and above the 2005 budget covers such things as mandatory pay
increases for current employees and operating expenses for existing
programs- many of which relate to homeland security functions. In
addition, more than $50 million of the increase would fund new or enhanced
initiatives, all of which relate to homeland security. For example, a
portion of this funding would be dedicated to increasing maritime patrol
aircraft operations, increasing the Coast Guard's presence in ports, and
providing enhanced security for liquefied natural gas transports. Of the
nearly $1.3 billion requested for capital projects, $966 million, or 76
percent, would be dedicated to the Deepwater acquisition, while $101
million would be dedicated to Rescue 21.
By comparison with the pattern of budget increases, performance
results-indicators that track a program's progress from year to year- have
been more mixed in terms of the number of performance targets met each
year.3 (See app. IV for a detailed discussion of the Coast Guard's
performance measures and results.) The Coast Guard has a key performance
target-the goal it aims to achieve each year-for 10 of its 11 programs. 4
For search and rescue, for example, its target is to save the lives of at
least 85 percent of mariners in distress. For the 8 programs with
1The $8.1 billion request for the Coast Guard represents 20 percent of the
Department of Homeland Security's budget request for fiscal year 2006.
2This calculation is based on the Coast Guard's discretionary funding and,
for comparison purposes, removes the fiscal year 2005 hurricane
supplemental ($33 million) and adds in the anticipated fiscal year 2006
reimbursements for polar icebreaking ($47.5 million) and research,
development, test and evaluation ($24 million).
3Pursuant to the Government Performance and Results Act of 1993 (Pub. L.
No. 103-62, 107 Stat. 285 (1993)), performance indicators are to be used
to assess relevant outputs, service levels, and outcomes of each program
activity. Performance targets or goals are defined as a set of annual
goals that establish the agency's intended performance, stating a
particular level of performance in either an absolute value or as a
targeted level of improvement.
4For homeland security (called ports, waterways, and coastal security),
performance measures are still under development.
performance results through fiscal year 2004,5 the Coast Guard met or
exceeded its targets in 4-a decline from the 2003 results, when the Coast
Guard met 6 of these targets (see fig. 2). Such changes can involve
relatively small shifts in results. For example, in fiscal year 2004, 96.3
percent of domestic fishermen were found to be in compliance with
regulations, compared with 97.1 percent the year before-but the percentage
for fiscal year 2004 was below the Coast Guard's target of 97.0 percent,
while the percentage for fiscal year 2003 was above it.
5According to the Coast Guard, performance results for fiscal year 2004
are not available for two programs. They are: (1) marine safety-fiscal
year 2004 performance results will not be available until spring 2005,
when the recreational boating data is reported; and (2) illegal drug
interdiction-fiscal year 2004 results will be calculated and released once
illegal drug flow information for fiscal year 2004 is known-sometime in
the spring of 2005.
Figure 2: Number of Coast Guard Performance Targets Met for the 8 Programs
with Performance Results between Fiscal Years 2001 and 2004
Number of performance targets met
7
6
6
5
4
3
2
1
0 2001 2002 2003 2004 Fiscal year
Source: GAO analysis of Coast Guard data.
Note: Only those performance results that were available for each fiscal
year between 2001 and 2004 were included in these results. As such,
performance results for marine safety, illegal drug interdiction, and
ports, waterways, and coastal security are not included in these figures.
As we have reported in the past, it is difficult to link spending and
resource allocations to performance and results, because many other
factors also are at work.6 For example, one of the Coast Guard's
measures-the number of incursions into U.S. fishing grounds by foreign
fishing vessels-is affected by oceanic and climatic shifts that can cause
fluctuations in the migrating patterns of fish. The number of foreign
vessels drawn to U.S. waters could be affected by these fluctuations. In
addition, the Coast Guard is still developing its performance measures and
targets for its primary homeland security program, so this major reason
for funding increases is not yet reflected in the results. These
complicating factors suggest caution in attempting to read too much into
the fiscal year
6GAO, Coast Guard: Key Management and Budget Challenges for Fiscal Year
2005 and Beyond, GAO-04-636T (Washington, D.C.: April 7, 2004); and Coast
Guard: Relationship between Resources Used and Results Achieved Needs to
Be Clearer, GAO-04-432 (Washington, D.C.: March 22, 2004).
Efforts Made on Coast Guard's Maritime Security Strategy Show Promise, but
Concerns Remain
o
2004 drop. Nevertheless, attention to these trends over the long term is
important, as a way to help ensure that taxpayer dollars are spent wisely.
One of the Coast Guard's fiscal year 2006 priorities involves implementing
a maritime strategy for homeland security. Major portions of this endeavor
are heavily influenced by the requirements of the Maritime Transportation
Security Act (MTSA) of 2002.7 We have reviewed the Coast Guard's response
to a number of these requirements, and our findings have implications for
several aspects of the budget request.
MTSA seeks to establish a comprehensive security regime for the nation's
ports-including planning, personnel security, and careful monitoring of
vessels and cargo-and charges the Coast Guard with lead responsibility for
implementing this regime. Since MTSA was enacted, the Coast Guard has
worked to address vulnerabilities by spurring the development of
meaningful security plans for thousands of facilities and vessels in the
nation's ports. The Coast Guard has taken many other actions as well,
including establishing area maritime security committees to improve
information sharing, increasing port presence through increased security
patrols, enhancing intelligence capabilities by establishing field
intelligence teams in ports, and beginning to implement an electronic
identification system for vessels in the nation's ports. As we have
reported, the Coast Guard deserves credit for taking fast action on so
many MTSA security provisions at once, especially with regard to MTSA's
aggressive requirement that regulated facilities and vessels have security
plans in place by July 2004.8 However, the combination of so many reforms
and an aggressive schedule posed a daunting challenge, and our review of
Coast Guard efforts to meet these requirements showed some areas for
improvement where we have made recommendations-most notably the following
three from reports issued in 2004.
Automatic Identification System (AIS) has potential for cost savings.
National development of this system, which identifies vessels traveling to
7Pub. L. No. 107-295, 116 Stat. 2064, (2002).
8GAO, Maritime Security: Partnering Could Reduce Federal Costs and
Facilitate Implementation of Automatic Vessel Identification System,
GAO-04-868 (Washington, D.C.: July 23, 2004); Maritime Security: Better
Planning Needed to Help Ensure an Effective Port Security Assessment
Program, GAO-04-1062 (Washington, D.C.: September 30, 2004); and Maritime
Security: Substantial Work Remains to Translate New Planning Requirements
into Effective Port Security, GAO-04-838 (Washington, D.C.: June 30,
2004).
or through U.S. waters, is an important step in the overall effort to
increase port safety and security. The Coast Guard faced several key
decisions to determine AIS's technical requirements, waterway coverage,
and vessels to be equipped with identification equipment. Estimates to
establish such a system, however, were well above funding levels. We
thought the goals of the system might be achieved more quickly and the
costs to the federal government reduced by pursuing cost-sharing options.
Consequently, we recommended that the Coast Guard seek and take advantage
of partnerships with organizations willing to develop AIS systems at their
own expense.
o Port security assessments could be more useful. The port security
assessment program is intended to assess port vulnerabilities and security
measures in the nation's 55 most economically and militarily strategic
ports. Our review showed that while some improvements were made, the Coast
Guard risked producing a system that was not as useful as it could have
been because its approach lacked a defined management strategy, specific
cost estimates, and a clear implementation schedule. A major factor of the
program-a computer-based geographic information system that would provide
information to personnel in charge of port security- was developed in such
a way that gaps in port security postures could be overlooked. We
recommended that the Coast Guard define and document the functional
requirements for this computer system and develop a longterm project plan
for the system and for the port security assessment program as a whole.
o The Coast Guard's strategy for conducting oversight and compliance
inspections of facilities and vessels could be improved. Because the
program was new, we recommended that the Coast Guard undertake a formal
evaluation after the first round of inspections and use the results to
improve the program. The evaluation was to include the adequacy of
security inspection staffing, training, and guidance. To improve the
program strategy, we also recommended that the Coast Guard clearly define
the minimum qualifications for inspectors and link these qualifications to
a certification process, as well as consider unscheduled and unannounced
inspections, and covert testing as a way to ensure that the security
environment at the nation's seaports met the nation's expectations.
The Coast Guard agreed with many of our recommendations and has made
progress in implementing some of them, but the remaining issues have
implications for the availability of funds or the effectiveness with which
available funds are spent.
o AIS. Coast Guard officials have taken a number of steps to encourage
stakeholder participation, although they have not formally sought AIS
partners to date. For example, the Coast Guard has a contract with
PETROCOMM (a provider of communications services in the Gulf of Mexico) to
provide locations, maintenance, and data services for several AIS base
stations on offshore platforms in the Gulf of Mexico.9 The Coast Guard
believes that it is too early to consider partnerships beyond these
initial efforts, because the Coast Guard is still developing operational
requirements for AIS systems and vetting these requirements with
stakeholders and Coast Guard field units. However, Coast Guard officials
also reported that in their discussions with private parties, these
parties have shown little interest in shouldering any of the financial
burden associated with achieving AIS capability. The Coast Guard estimates
that the installation of AIS nationwide could cost nearly $200 million.
The fiscal year 2006 budget requests $29.1 million for this project, in
addition to the $48 million previously enacted ($24 million per year in
fiscal years 2004 and 2005)-leaving a substantial sum to be financed.
Port security assessments. Coast Guard officials said they are working
with the Department of Homeland Security to determine the focus and scope
of the fiscal year 2006 port assessments and are taking into consideration
the progress being made by ports to identify shortcomings and improve
security. However, the Coast Guard continues to move forward with the
overall program, as well as the geographic information system, without a
plan that clearly indicates how the program and its information component
will be managed, what they are expected to cost, or when the various work
steps should be completed. The lack of a plan, in our view, increases the
risk that the program will be unsuccessful. In response to our
recommendation, the Coast Guard has indicated that it will develop a
long-term plan for the port security assessment program but they did not
indicate when this effort will begin or when they expect a plan to be
completed.
9The other instances are (1) The Coast Guard has a contract with the Port
Graham Development Corporation (an Alaskan Native corporation) in
partnership with the Marine Exchange of Alaska to deploy and manage a
network of AIS receivers at 11 locations in Alaska; (2) the Volpe
Transportation Systems Center approached the Coast Guard to offer its
assistance in facilitating partnerships. (This was done in response to
GAO-04-868.) The Coast Guard entered into an agreement with Volpe for the
provision of a variety of support for AIS services, including its help in
setting up AIS capability in areas where partnerships may be of
assistance.
Three Efforts to Enhance Mission Performance Bear Watching
o Strategy for ensuring facility and vessel compliance. The Coast Guard
has taken a number of actions but has not focused its resources on doing
unscheduled or unannounced spot checks to verify whether domestic vessels
are complying with requirements.10 We continue to believe that without
unscheduled inspections, vessel owners and operators can mask security
problems by preparing for the annually announced inspections in ways that
do not represent the normal course of business. Unannounced inspections
are a way of ensuring that planning requirements translate into
security-conscious behavior.
A second Coast Guard priority is to enhance mission performance. Many
Coast Guard personnel and assets are involved in performing multiple
missions. For example, Coast Guard cutters and crews may be involved with
fisheries patrols, distress calls, oil spills, stopping and boarding
vessels of interest, and many other tasks. In fiscal years 2005 and 2006,
the Coast Guard plans to continue developing several initiatives that
agency officials believe will yield increased performance across multiple
Coast Guard missions over time. Three initiatives, in particular, deserve
mention. These are a new coastal communication system, called Rescue 21; a
new field command structure, called Sectors; and efforts to improve
readiness at multimission stations that conduct search and rescue as well
as other missions. All three efforts carry some risk and will merit close
attention.
o Rescue 21. The Coast Guard has resolved some initial development
problems that delayed the implementation of this new coastal command and
control communication system and is now poised to move forward again, with
a fiscal year 2006 budget request of $101 million. According to Coast
Guard officials, Rescue 21 can improve coastal command and control
communications and interoperability with other agencies, helping to
improve not only search and rescue efforts but also other missions such as
illegal drug and migrant interdiction. The program is composed of
veryhigh-frequency-FM radios, communication towers, and communication
centers. Rescue 21 was originally scheduled to be ready for operational
testing by September 2003, but this was delayed because of problems in
developing system software. Operational testing of this software has been
10 Agency officials reported that they are focusing resources on making
the initial inspection of the nearly 10,000 vessels subject to MTSA
requirements. Coast Guard officials say the agency is using unscheduled or
unannounced spot checks for facilities, and for foreign vessels. However,
we have not assessed the extent to which this has occurred.
completed.11 The program is now set-once additional Coast Guard and DHS
approvals are obtained-to move into its next phase of production, and the
Coast Guard anticipates that the program will be operational by the end of
2007.
According to the Coast Guard, one risk that remains in moving ahead with
Rescue 21 involves locating sites for about 330 towers that must be built.
The Coast Guard must locate these towers in accordance with the
requirements of the National Environmental Policy Act of 1969 (NEPA), as
amended, which requires federal agencies to prepare an environmental
impact statement for major federal actions that may significantly affect
the quality of the human environment.12 Towers can have environmental
effects; for example, when they are built in migratory bird locations,
birds can fly into the towers or their supporting wires. Additionally, for
effective communications, each tower must be placed in a way that one
tower's coverage meets the next tower's coverage without interference.
Thus, if one tower must be moved for environmental reasons, neighboring
towers may also have to be moved-leading to a potential for schedule
slippage, if additional sites must be identified and developed. The NEPA
process represents the Rescue 21 program's greatest risk, according to a
program
13
official.
o Sectors. This is a new field command structure that will unify
previously disparate Coast Guard units such as air stations, groups, and
marine safety offices into integrated commands. This effort is a budget
neutral effect in the fiscal year 2006 request, but it bears attention for
operational effectiveness reasons. The Coast Guard is making this change
to improve mission performance through better coordination of Coast Guard
command authority and resources such as boats and aircraft. Under the
previous field structure, for example, a marine safety officer who had the
authority to inspect a vessel at sea or needed an aerial view of an oil
spill
11As a result of these delays, $40 million in fiscal year 2005 funds were
reprogrammed within the Coast Guard from Rescue 21 to other purposes, and
an additional $16 million was rescinded.
12Pub. L. No. 91-190, 83 Stat. 852 (1970) (environmental impact statements
provision found at 42 U.S.C. S: 4332(2)(c)).
13To help address these concerns, the Coast Guard has agreed to support
U.S. Fish and Wildlife Service's studies examining what can be done to
prevent birds from hitting the towers or supporting wires. In response to
the Fish and Wildlife Service's concerns, the Coast Guard has adapted the
night lighting on the towers to make the towers more visible for the birds
and has used towers that do not require support wires.
as part of an investigation would often have to coordinate a request for a
boat or aircraft through a district office, which would obtain the
resource
from a group or air station. Under the Sector realignment, these
operational resources will be available under the same commanding
officer. To date, 8 sectors have been established, with approximately 28
to
be established by the end of 2006.14 According to Coast Guard personnel,
the realignment is particularly important for meeting new homeland
security responsibilities, and will facilitate the Coast Guard's ability
to
manage incidents in close coordination with other federal, state, and
local
agencies.
While the establishment of Sectors appears to be an important step that
could positively affect the Coast Guard's mission performance, the Coast
Guard is likely to face a number of implementation challenges that it will
need to overcome to help ensure success. First, Sectors change a
longstanding cultural divide within the agency. This divide has separated
those personnel who typically operate aircraft and boats from those
personnel who typically enforce marine safety, security, and environmental
protection laws. Second, it has implications for alignment above the field
operations level as well. Realignment is likely to be needed at the
district office and headquarters levels to help ensure that management
misalignments among these levels do not pull the field reorganization off
track. Third, it will likely require training, such as taking steps to
ensure that senior commanders are aware of key issues critical for
decision making across the various Coast Guard mission areas. Coast Guard
officials acknowledge these challenges but believe that the culture
challenge will be overcome in time as a result of increased familiarity
and training. They also acknowledged that further realignments at the
district and headquarters levels are likely to be needed over time and
that efforts are under way to implement training changes.
o Multimission stations. Another area where the Coast Guard has an
opportunity to improve mission performance involves its 188 multimission
stations. These stations located along the nation's coastlines and
interior waterways have been the mainstay of one of the Coast Guard's
oldest missions-finding and rescuing mariners in danger. In 2001, after a
series of search and rescue mishaps, the Coast Guard began efforts to
improve station readiness, which had been declining for more than 20
years. This
14Sectors will be organized along existing Captain of the Port zones. The
eight established sectors as of March 1, 2005, are in Boston, Baltimore,
San Diego, Honolulu, Miami, Key West, San Juan (Puerto Rico), and Guam.
included reconfiguring operations and bolstering resources in four areas-
staffing, training, boats, and personal protection equipment used by
personnel during operations, such as life vests and survival suits. This
effort was complicated by the new and increased homeland security
responsibilities that stations assumed after the terrorist attacks of
September 11.
Today, 4 years after efforts began to improve station readiness, there
have been operational improvements in staffing, training, boats, and
personal protection equipment, as well as increases in resource levels at
stations. However, even though readiness concerns have been mitigated to
some extent, the stations have still been unable to meet standards and
goals relating to staffing, boats, and equipment, which indicates that the
stations are still significantly short of desired readiness levels in some
areas. For example, even though station staffing has increased 25 percent
since 2001, station personnel continue to work significantly longer hours
than are allowed under the Coast Guard's work standards.
To address continued readiness concerns, actions are needed in two areas,
and the Coast Guard says that it has such efforts underway. Currently, the
Coast Guard does not have an adequate plan in place for achieving and
assessing readiness in its new post-September 11 operating environment.
The Boat Forces Strategic Plan-the Coast Guard's strategy for maintaining
and improving essential multimission station capabilities over the next 10
years-is the agency's main tool for measuring progress in meeting station
readiness requirements, but it has not been updated to reflect increased
homeland security responsibilities. However, Coast Guard officials
recently reported that they will update the plan to reflect its homeland
security mission and identify actions taken and results achieved. Second,
the Coast Guard is operating under interim homeland security guidelines,
which establish recommended security activities for field units according
to each maritime security threat level. Coast Guard officials said they
would incorporate measurable station readiness goals into the plan. The
Coast Guard plans to complete these efforts in the next 6-9 months.
Important but Costly Programs for Maintaining and Recapitalizing Deepwater
Assets Need Careful Monitoring
The third Coast Guard priority involves the single largest and most
complex acquisition program in the agency's history-a project designed to
improve the mission performance of the range of cutters and aircraft that
currently conduct the agency's offshore missions. We have previously
reported on the risky approach for this acquisition,15 and although
progress has been made to address our past recommendations, the risks
still remain substantial. As it undergoes a transformation to these new or
upgraded assets, the Coast Guard is also faced with sustaining its legacy
assets16 to ensure that they can continue to perform the Coast Guard's
missions until new or upgraded assets are in place. Revisions to the Coast
Guard's mission requirements for Deepwater, slippages in the acquisition
schedule, and limited information about the condition of and likely costs
for maintaining the legacy assets all highlight the need for continued
attention to this area.
Deepwater Acquisition Involves a Major Recapitalization of the Coast Guard
In 1996, the Coast Guard initiated a major recapitalization effort-known
as the Integrated Deepwater System-to replace or modernize the agency's
deteriorating aircraft and cutters. These legacy assets are used for
missions that require mobility, extended presence on scene, and the
capability of overseas deployment. Examples of such missions include
interdicting illegal drug shipments or attempted landings by illegal
aliens, rescuing mariners in difficulty at sea, protecting important
fishing grounds, and responding to marine pollution. The Deepwater fleet
consists of 187 fixed-wing aircraft and helicopters, and 88 cutters of
varying lengths. As currently designed, the Deepwater program replaces
some assets (such as deteriorating cutters) with new ones while upgrading
other
15GAO,Coast Guard's Acquisition Management: Deepwater Project's
Justification and
Affordability Need to Be Addressed More Thoroughly, GAO/RCED-99-6
(Washington, D.C.: October 26, 1998); GAO, Coast Guard: Progress Being
Made on Deepwater Project, but Risks Remain, GAO-01-564 (Washington, D.C.:
May 2, 2001); and GAO, Contract Management: Coast Guard's Deepwater
Program Needs Increased Attention to Management and Contractor Oversight,
GAO-04-380 (Washington, D.C.: March 2004).
16For purposes of this testimony, we use the term "legacy assets" to refer
to the existing fleet of deepwater aircraft and cutters. These legacy
assets include the HC-130, HU-25, HH60, and HH-65 aircraft and the
378-foot high-endurance cutters, the 210-foot and 270-foot
medium-endurance cutters, and the 110-foot and 123-foot patrol boats. We
did not include the 213-foot Acushnet, the 230-foot Storis, or the
282-foot Alex Haley as part of our analyses of the deepwater legacy assets
because they are one-of-a-kind vessels.
assets (such as some types of helicopters) so that all of the assets can
meet new performance requirements.17
In an effort to maintain its existing assets until the Deepwater assets
are in place, the Coast Guard is conducting extensive maintenance work.
Notwithstanding extensive overhauls and other upgrades, a number of the
cutters are nearing the end of their estimated service lives. Similarly,
while a number of the deepwater legacy aircraft have received upgrades in
engines, operating systems, and radar and sensor equipment since they were
originally built, they too have limitations in their operating
capabilities. For example, the surface search radar system on the HC-130
long-range surveillance aircraft is subject to frequent failures and is
quickly becoming unsupportable. Flight crews use this radar to search for
vessels in trouble and to monitor ships for illegal activity, such as
transporting illicit drugs or illegal immigrants. When the radar fails,
flight crews are reduced to looking out the window for targets, greatly
reducing mission efficiency and effectiveness. A flight crew in Kodiak,
Alaska, described this situation as being "like trying to locate a boat
looking through a straw." We have been reviewing the condition of Coast
Guard Deepwater assets for a number of years, and our work has shown that
a need exists for substantial replacement or upgrading.18 We have
additional work underway this year regarding the status of Deepwater
assets, and will be testifying on this work next month.
Deepwater Contracting Approach Remains Risky
While we agree that the case for replacing and upgrading the Coast Guard's
legacy assets is compelling, the contracting strategy the agency is using
to conduct this acquisition carries a number of inherent risks. This
strategy relies on a contractor-called the system integrator-to identify
and deliver the assets needed to meet a set of mission requirements the
Coast Guard has specified, using tiers of subcontractors to design and
build the actual assets. The resulting program is designed to provide an
improved, integrated system of aircraft, cutters, and unmanned aerial
vehicles to be linked effectively through systems that provide command,
control, communications, computer, intelligence, surveillance,
17Current plans call for the Coast Guard to replace all of its deepwater
legacy cutters and patrol boats, beginning with the 378-foot cutters. The
Coast Guard also plans to replace the HU-25 aircraft, but will upgrade the
existing HC-130 aircraft, and HH-60 and HH-65 helicopters to extend their
service lives.
18GAO-01-564 and GAO-04-636T.
reconnaissance, and supporting logistics. However, from the outset, we
have expressed concern about the risks involved with this approach because
of its heavy reliance on a steady funding stream over several decades and
the potential lack of competition to keep contracting costs in line.19
These risks have had tangible effects, including rising costs and slipped
schedules. Early on in our reviews of the program, we expressed concern
that the Coast Guard risked schedule slippages and cost escalation if
project funding fell short of planned funding levels. These concerns
materialized in the first 2 years of the program, when appropriated
funding was $125 million less than planned for. And, although funding in
the fourth year of the program (fiscal year 2005) exceeded the Coast
Guard's request by about $46 million, the early shortfalls, according to
the Coast Guard, resulted in schedule slippage and led to increases in the
total projected costs for the program. As of spring 2004, it was estimated
that an additional $2.2 billion (in nominal dollars) would be needed to
return the program to its original implementation schedule.20 In addition,
there is clear evidence that the asset delivery schedule has also slipped.
For example, under Deepwater's original schedule, the first major cutter,
the National Security Cutter was due to be delivered in 2006; the current
schedule indicates that it will now not be delivered until 2007.
Similarly, the first nine Maritime Patrol aircraft were due to be
delivered in 2005; now only two will be delivered in 2007.
When we reviewed the Deepwater program again last year, we found that, on
many fronts, the Coast Guard was not doing enough to mitigate these risks.
For example, we found that well into the contract's second year, key
components needed to manage the program and oversee the system
integrator's performance had not been effectively implemented.21 We also
reported that the degree to which the program was on track could not be
determined, because the Coast Guard was not updating its schedule.22 We
detailed needed improvements in a number of areas, shown in table 1.
19GAO-01-564 and GAO/RCED-99-6.
20GAO-04-636T.
21GAO-04-380.
22GAO, Coast Guard: Deepwater Program Acquisition Schedule Update Needed,
GAO-04-695 (Washington, D.C.: June 14, 2004).
Table 1: Summary of Deepwater Areas Needing Management Attention as
Reported by GAO
Area of concern Recommendations to the U.S. Coast Guard
Key components of management and Improve integrated product teams
responsible for managing the program by providing oversight not
effectively implemented better training, approving charters, and improving
systems for sharing information between teams
Ensure adequate staffing of the Deepwater program
Provide field personnel with guidance and training on transitioning to new
Deepwater assets
Update the original acquisition schedule to support future budget
requests, starting with the fiscal year 2006 request
Procedures for ensuring contractor Develop measurable award fee criteria
consistent with guidance from the Office of accountability are inadequate
Federal Procurement Policy
Provide for better input from technical representatives
Hold system integrator accountable for improving effectiveness of
integrated project teams
Establish a time frame for putting steps in place to measure contractors'
progress toward improving operational effectiveness
Establish a baseline for determining whether the acquisition approach is
costing the government more than a traditional asset replacement approach
Establish criteria to determine when to adjust the project baseline and to
document the reasons for change
Control of future costs through competition Develop a comprehensive plan
for holding the system integrator accountable for remains at risk because
of weak oversight ensuring adequate competition among suppliers
For subcontracts over $5 million awarded by the system integrator to the
two major subcontractors, require notification to the Coast Guard about
decisions to perform the work in-house rather than contracting it out
Source: Developed by GAO from our reports, GAO-04-380, and GAO-04-695. .
The Coast Guard agreed with nearly all of our recommendations and has
since made progress in implementing some of them. In most cases,
however, while actions are under way to address these concerns,
management challenges remain that may take some time to fully address.
Here are some examples.
o Strengthening integrated product teams. These teams, the Coast Guard's
primary tool for managing the program and overseeing the contractor,
consist of members from subcontractors and the Coast Guard. In 2004, we
found these teams often lacked training and in several cases lacked
charters defining clearly what they were to do. Most now have charters
setting forth the team's purpose, authority, and performance goals, among
other things, and more training is now being provided. However, roles and
responsibilities in some teams continue to be unclear, and about one-third
of team members have yet to receive entry-level training.
o Holding the systems integrator accountable for competition. The Coast
Guard has taken a number of steps to improve cost control through
competition. For example, to improve competition among second-tier
suppliers, Coast Guard officials said they will incorporate an assessment
of the steps the system integrator is taking to foster competition at the
major subcontractor level as one of the factors they take into account in
deciding whether to award the first contract option.
Besides the risks noted in table 1, the program also bears careful
watching because it is still being affected in midcourse by the Coast
Guard's additional homeland security responsibilities. Planning for the
Deepwater program had been set in motion before the terrorist attacks of
September 11, and while the initial program included consideration of
homeland security responsibilities, these responsibilities have grown
considerably in the interim. In March 2004, the Coast Guard developed a
revised mission needs statement (MNS) that indicated that current
specifications for Deepwater assets lacked some functional capabilities
needed to meet mission requirements. The MNS was approved by DHS in
January 2005.
According to the Coast Guard, some of the functional capabilities now
deemed to be required include the following:
o Rotary wing airborne use of force and vertical insertion/vertical
delivery capability;
o Greater speed, a larger flight deck, and automated defensive and
weapons systems for the National Security Cutter and Offshore Patrol
Cutter classes;
o A common operating picture (COP) for the entire Coast Guard (and
maritime ports of a unified Department of Homeland Security COP), an
interoperable network to improve performance in all mission areas, and a
Secure Compartmentalized Information Facility for improved intelligence
capabilities; and
o Chemical, biological, radiological defense and decontamination
capability for selected Deepwater assets
While we have not conducted an analysis of the likely cost and schedule
impact of the revised MNS requirements, they undoubtedly will have an
effect on cost and schedule. The Coast Guard's own estimates identified in
the March 2004 MNS show an increased acquisition cost for the original
20-year acquisition of about $1 billion.23 According to the Coast Guard,
the revised MNS requirements and associated cost and schedule information
have been forwarded to the Department of Homeland Security (DHS) and the
Office of Management and Budget for approval. As of this time, the
implementation plan has not been approved.
These issues point to the need for continued and careful monitoring of the
Deepwater acquisition program both internally and externally. One positive
development in this regard involves the Coast Guard's efforts to update
the Deepwater acquisition schedule-action that we suggested in our June
2004 report.24 The original 2002 schedule had milestone dates showing when
work on an asset would begin and when delivery would be expected, as well
as the integrated schedules of critical linkages between assets, but we
found that the Coast Guard was not maintaining an updated and integrated
version of the schedule.25 As a result, the Coast Guard could not
demonstrate whether individual components and assets were being integrated
and delivered on schedule and in critical sequence. While as late as
October 2004 Deepwater performance monitors likewise expressed concern
that the Coast Guard lacked adequate visibility into the project's status,
the Coast Guard has since taken steps to update the outdated schedule, and
has indicated that it plans to continue to update the schedule-monthly for
internal management purposes, and semi-annually to support its budget
planning efforts. We think this is an important step toward improving the
Coast Guard's management of the program because it provides a more
tangible picture of progress, as well as a baseline for holding
contractors accountable. And, as we have said in the past on
23According to the MNS, the original estimated acquisition, construction,
and improvement costs were bracketed at between $7.5 billion to $15
billion in fiscal year 1998 dollars. It then notes that current Deepwater
projections show an approximately $16 billion cost for a 20-year
implementation plan. However, GAO reported in April 2004 that the costs
for the Deepwater program would reach $17 billion under the funding stream
that the Coast Guard projected that it would need to complete the program
in 20 years.
24GAO-04-695.
25Not maintaining a current and integrated schedule lessens the Coast
Guard's ability to monitor the system integrator's performance and take
early action to resolve risks that could become problems later.
Maintaining such a schedule is an industry best practice; the Department
of Defense is required to do so in order to be able to report any breaches
in cost, schedule, or performance targets. Deepwater performance monitors
(the contracting officers' technical representatives who represent the
contracting officer in monitoring the contractor's performance) have
likewise expressed concern that the Coast Guard lacks adequate visibility
to scrutinize schedules for component-level items which prevents reliable
forecasting and risk analysis.
numerous occasions, we will continue to work closely with the Coast Guard
to monitor how risks are mitigated.
Attention Also Needed to Planned Transition and Phase out of Legacy Assets
Although the Coast Guard expects to upgrade a number of its legacy assets
for use in the Deepwater program, a substantial portion of its legacy
assets-particularly cutters-are scheduled to be replaced. Until their
replacements are available, however, many of the cutters will need to be
kept in service so that the Coast Guard can continue to perform its
missions. Our visits to field locations and conversations with Coast Guard
operations and maintenance personnel clearly indicated that the
maintenance of these assets is already taking increasingly more time and
effort. For example, air station maintenance personnel indicated that
aircraft are being subjected to additional corrosion-related problems. To
address these problems, air station maintenance personnel at the locations
we visited said they have instituted additional measures, such as washing
and applying fluid film to the aircraft prior to each deployment. Similar
accounts were told by personnel working on cutters. For example, officers
of the 270-foot cutter Northland told us that because of dated equipment
and the deteriorating condition of the vessel's piping and other
subsystems, crewmembers have to spend increasingly more time and resources
while in port to prepare for the cutter for the next deployment. While we
could not verify these increases in time and resources because of
limitations in the Coast Guard's data, the need for increasing amounts of
maintenance was a message we consistently heard from operations and
maintenance personnel.
The Coast Guard is aware that keeping these legacy assets mission capable
will likely require an additional infusion of funds for some assets that
are scheduled to be replaced. Since 2002, the Coast Guard has annually
created a compendium that consolidates information about projects needed
to maintain and sustain legacy assets. The Coast Guard uses this
compendium as a tool for setting priorities and planning budgets. The most
recent compendium (for fiscal year 2006), lists more than $1 billion worth
of upgrades to the Deepwater legacy assets. The planned upgrades
identified in the compendium that have been approved and received initial
funding account for an estimated $856 million the Coast Guard anticipates
it will need to complete those projects. In addition, the compendium lists
another estimated $409 million in sustainment projects for the other
legacy assets for which funding has not been requested. If the condition
of these assets continues to deteriorate or replacement assets are further
delayed, this additional funding will likely be needed.
We are not questioning the Coast Guard's decisions about which projects
within the compendium should receive priority. We believe it is important,
however, for the Coast Guard to make Congress aware of the magnitude of
the potential funding needs for sustaining the assets that are eventually
scheduled for replacement. Given the schedule slippages we have seen and
the continued possibility that Deepwater requirements may yet change, this
information will be important to determine a thoughtful and accurate
estimate of future maintenance budget needs.
One planning effort under way within the Coast Guard illustrates the kinds
of considerations that may be needed with regard to these assets. This
effort is being undertaken by the Coast Guard's Pacific Area Command,
which to accomplish its missions, relies on 378-foot cutters-the first
asset scheduled to be replaced under the Deepwater program.26 Under the
original Deepwater proposal, the final 378-foot cutter was to be
decommissioned in 2013, but by 2005, that date had slipped to 2016. To
help keep these cutters running through 2016, Pacific Area Command
officials are considering such strategies as designating some of the
378foot cutters as capable of performing only certain missions, rather
than attempting to keep them all fully capable of performing all missions.
Even so, the Pacific Area Commander told us that in order for the 378-foot
cutters to be properly maintained until their replacements become
operational; the Coast Guard will have to provide more focused funding. So
far, the Coast Guard's budget plans and requests do not address this
potential need.
Concluding Over the past several years, the Coast Guard has been in the
vortex of the nation's response to homeland security concerns. It has been
charged with
Observations many new responsibilities related to ports and to marine
security in general, and from the outset, we have often used the word
"daunting" to describe the resulting tasks. In addition, expectations
continue that the Coast Guard will be able to rescue those in distress,
protect the nation's fisheries, keep vital marine highways operating
efficiently, and respond effectively to marine accidents and natural
disasters. Congress has acknowledged that these added responsibilities
carry a price tag and has, through the appropriations process, provided
substantially more money for the job.
26The Pacific Area Command is responsible [0]for operations covering 74
million square miles, ranging from South America, to the Arctic Circle and
west to the Far East.
As these efforts begin to move into a more mature phase, allowing lessons
that can already be learned to better inform judgments about the future,
it is increasingly important to explore ways to enhance mission
effectiveness while stretching taxpayer dollars for maximum effectiveness.
This is particularly true in the current budget climate. While we have
found the Coast Guard to be a willing participant in such efforts, the
agency's focus on achieving all of its missions can make it difficult to
carry through with the many intermediate steps that may be needed to keep
management problems to a minimum. We think the issues we have highlighted
are potential areas for ongoing congressional attention, and we will
continue to work with the Coast Guard on them.
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.
For information about this testimony, please contact Margaret Wrightson,
Director, Homeland Security and Justice Issues, at (415) 904-2200, or
[email protected]. Other individuals making key contributions to this
testimony include Joel Aldape, Jonathan Bachman, Steve Calvo, Christopher
Conrad, Adam Couvillion, Michele Fejfar, Barbara Guffy, Geoffrey Hamilton,
Christopher Hatscher, Samuel Hinojosa, Dawn Hoff, Julie Leetch, Dawn
Locke, Michele Mackin, Sara Margraf, Stan Stenersen, and Randall
Williamson.
Contacts and Acknowledgements
Appendix I: Objectives, Scope and Methodology
To provide a strategic overview of the President's fiscal year 2006 budget
request for the Coast Guard, focusing on several areas of particular
congressional interest, we reviewed the Coast Guard's Congressional-stage
budget and other financial documents provided by the Coast Guard. We also
interviewed Coast Guard headquarters officials familiar with the Coast
Guard's budget and acquisition processes.
To determine the status of the Coast Guard's performance measures and
results, we reviewed Coast Guard performance data and performance
documentation. We also obtained confirmation from knowledgeable Coast
Guard officials that the performance data sources and the systems that
produced them have not changed since our 2003 data reliability analysis.
We determined that Coast Guard performance measures are sufficiently
reliable for the purposes of this testimony.
To determine the status of key outstanding Coast Guard recommendations, we
reviewed past GAO reports and testimonies related to the Coast Guard and
identified the GAO recommendations contained in those reports. In
addition, we consulted with GAO staff who performed the work that resulted
in the recommendations and interviewed Coast Guard headquarters officials
regarding the status of the recommendations-including any progress made to
implement them. We also obtained and reviewed relevant documents from the
Coast Guard.
To assess the Coast Guard's recapitalization efforts, we analyzed data and
condition measures used by the Coast Guard for determining deepwater
legacy assets' condition, reviewed Coast Guard actions to maintain and
upgrade the legacy assets, and assessed the improvements the Coast Guard
is making in its management of the Deepwater acquisition. We will be
following up this testimony with a written report that will contain
detailed information related to the condition of deepwater legacy assets,
and the actions the Coast Guard is taking to maintain and upgrade them. As
part of the follow-on report we will also provide more detailed
information on the Coast Guard's management of the Deepwater program.
This testimony is based on published GAO reports and briefings, as well as
additional audit work that was conducted in accordance with generally
accepted government auditing standards. We conducted our work for this
testimony between February and March 2005.
Appendix II: Related GAO Products
Coast Guard: Station Readiness Improving, but Resource Challenges and
Management Concerns Remain (GAO-05-161, January 31, 2005).
Maritime Security: Better Planning Needed to Help Ensure an Effective Port
Security Assessment Program (GAO-04-1062, September 30, 2004).
Maritime Security: Partnering Could Reduce Federal Costs and Facilitate
Implementation of Automatic Vessel Identification System (GAO-04-868, July
23, 2004).
Maritime Security: Substantial Work Remains to Translate New Planning
Requirements into Effective Port Security (GAO-04-838, June 30, 2004).
Coast Guard: Deepwater Program Acquisition Schedule Update Needed
(GAO-04-695, June 14, 2004).
Coast Guard: Station Spending Requirements Met, but Better Processes
Needed to Track Designated Funds (GAO-04-704, May 28, 2004).
Coast Guard: Key Management and Budget Challenges for Fiscal Year 2005 and
Beyond (GAO-04-636T, April 7, 2004).
Coast Guard: Relationship between Resources Used and Results Achieved
Needs to Be Clearer (GAO-04-432, March 22, 2004).
Contract Management: Coast Guard's Deepwater Program Needs Increased
Attention to Management and Contractor Oversight (GAO-04380, March 9,
2004).
Coast Guard: New Communication System to Support Search and Rescue Faces
Challenges (GAO-03-1111, September 30, 2003).
Maritime Security: Progress Made in Implementing Maritime Transportation
Security Act, but Concerns Remain (GAO-03-1155T, September 9, 2003).
Coast Guard: Actions Needed to Mitigate Deepwater Project Risks
(GAO01-659T, May 3, 2001).
Coast Guard: Progress Being Made on Deepwater Project, but Risks Remain
(GAO-01-564, May 2, 2001,).
Coast Guard's Acquisition Management: Deepwater Project's Justification
and Affordability Need to Be Addressed More Thoroughly
(GAO/RCED-99-6, October 26, 1998).
Appendix III: Breakdown of the Coast Guard's Fiscal Year 2006 Request
In addition to operating expenses and acquisition, construction, and
improvements, the remaining Coast Guard budget accounts include areas such
as environmental compliance and restoration, reserve training and oil
spill recovery. (See table 2 below.)
Table 2: Coast Guard Funding Accounts by Fiscal Year
Dollars in millions
Fiscal year Fiscal year Fiscal year Fiscal year Fiscal year 2002 2003 2004
2005 2006 actual actual actual enacted request
Operating $3,757 $4,920 $4,718 $5,191 $5,547
expenses
Acquisition, $702 $720 $1,007 $1,000 $1,269
construction, and
improvements
Environmental $17 $17 $17 $17 $12
compliance and
restoration
a
Alteration of $15 $17 $19 $16
a
bridges
Retired pay $876 $889 $1,020 $1,085 $1,014
Reserve training $83 $86 $94 $113 $119
Research, $20 $22 $15 $19 b
development, test
and evaluationb
Oil spill recovery $68 $75 $57 $71 $121
Boat safety $64 $65 $64 $64 $64
Source: Coast Guard Fiscal Year 2005 Report.
aNo funds have been requested for the alteration of bridges account for
fiscal year 2006.
bAccording to the Coast Guard, the research, development, test, and
evaluation account has been consolidated within the Department of Homeland
Security Science and Technology Directorate (S&T) in order to maximize
effective use of research and development resources and minimize
redundancies. S&T will continue its relationship with the Coast Guard's
Research and Development Center in fiscal year 2006 to ensure that the
on-going research needs of the Coast Guard are met.
Appendix IV: Coast Guard Performance Results, Fiscal Years 2001-2004
Table 3 shows a detailed list of performance results for the eight
programs for which the Coast Guard has fiscal year 2001 through 2004
data.1 Shaded entries in the table indicate those years that the Coast
Guard reported meeting its target; unshaded entries indicate those years
that the Coast Guard reported not meeting its target. The table also shows
that there are three programs for which performance results are pending
and data is not available across the four-year period. Each program is
discussed in more detail below.
Table 3: Performance Targets by Program from Fiscal Year 2001 through Fiscal
Year 2004 Performance results by fiscal year
Fiscal year Program Performance measure 2001 2002 2003 2004 2004 targeta
Programs that did not meet their 2004 targets
Defense readiness Percentage of time units meet combat readiness level at
C-2 leveld 67% 70% 78% 76% 100%
Programs that met their 2004 targets
1According to the Coast Guard, performance results for all four fiscal
years (2001 to 2004) are not available for three programs. They are: (a)
marine safety-fiscal year 2004 performance results will not be available
until spring 2005, when the recreational boating data is reported; (b)
illegal drug interdiction-fiscal year 2004 results will be calculated and
released once illegal drug flow information for fiscal year 2004 is
known-sometime in the spring of 2005; and (c) ports, waterways, and
coastal security-performance measures are still under development.
Performance results by fiscal year
Fiscal year Program Performance measure 2001 2002 2003 2004 2004 targeta
Total targets met for the eight programs with 2001 to
2004 performance results 4 4 6 4
Programs with pending resultse
Illegal drug interdiction Percentage of cocaine removed out of total
estimated cocaine entering the United States through maritime meansg NAh
NA NA TBD > 15
Ports, waterways, and Under development
coastal security NA NA NA NA TBD
Source: GAO analysis of Cost Guard performance data.
Performance targets met
Performance targets not met
Note: NA Not available.
aThe target level for some performance measures has changed over time as
the Coast Guard seeks to improve its performance. For example, the target
level for aids to navigation has decreased between fiscal years 2002 and
2004 from 2,098 to 1,923 collisions, allisions, and groundings. (The Coast
Guard defines an allision as a vessel collision with a fixed object.)
b Pursuant to the 1976 Magnuson-Stevens Fishery Conservation and
Management Act, as amended, the EEZ for the U.S. is an area within 200
nautical miles of U.S. shores in which the U.S. has sovereign rights to
natural resources such as harvesting rights to fish stocks. Pub.L.No.
94-265, 90 Stat. 333 (1976).
cThe target for ice operations noted here is for domestic icebreaking
only, and the target level varies according to the index of severity of
the entire winter. Thus, for those winters designated as severe, the
target is 8 or fewer closure days. For winters designated as average, the
target is 2 or fewer closure days. Because 2002 and 2004 were designated
as average winters, the 7 days of closures did not meet the target.
dAccording 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.
o
Programs Not Meeting Targets in Fiscal Year 2004
eAccording to the Coast Guard, performance results for all four fiscal
years (2001 to 2004) are not available for three programs and are,
therefore, not included in the fiscal year 2001 to 2004 figures. They are:
(a) marine safety-fiscal year 2004 performance results will not be
available until spring 2005, when the recreational boating data is
reported; (b) illegal drug interdiction-fiscal year 2004 results will be
calculated and released once flow information for fiscal year 2004 is
known-sometime in the spring of 2005; and (c) ports, waterways, and
coastal security-performance measures are still under development.
fThe marine safety program did not have target measures in fiscal years
2001 and 2002; therefore we are unable to indicate whether the program did
or did not meet its targets. However, the Coast Guard established and met
a performance target in fiscal year 2003.
gAccording to the Coast Guard, the illegal drug interdiction measure and
targets were revised to cocaine removal rate beginning in fiscal year
2004. Consequently, performance results on cocaine removal for fiscal
years 2001, 2002, and 2003 are not available.
hAccording to the Coast Guard, the illegal drug interdiction performance
measure includes only cocaine, as cocaine has an analyzed flow rate and it
constitutes the preponderance of illegal drugs entering the United States
through maritime means (that is, cocaine shipments are measured in tons,
while heroin, marijuana, and other illegal drugs are measured in pounds).
Foreign fish enforcement. The performance results for foreign fish
enforcement, which indicate the number of foreign vessel incursions into
the United States Exclusive Economic Zone (EEZ),2 has experienced
fluctuations from 152 incursions to 250 incursions in the last 4 years.
Such fluctuations can be due to oceanic and climatic shifts that affect
the migratory patterns of important fish stocks, and limited Coast Guard
assets, which the Coast Guard believes are unable to cover the entire 3.4
million square mile EEZ. We reported previously that performance measures
for foreign fish may not reflect agency efforts. 3 Because EEZ
encroachments can be affected by oceanic and climatic shifts that can
cause significant fluctuations in the migratory patterns of fish, they
could increase (or decrease) as fishermen follow their intended catch
across EEZ boundaries. According to Coast Guard officials, this type of
migratory factor can influence the number of encroachments in a given
year. Consequently, the Coast Guard has added two additional measures to
foreign fish that focus on interception and interdiction. These two
submeasures are not reflected in the Coast Guard's foreign fish
performance goal. However, the Coast Guard believes that they help it to
better distinguish between those incursions that it is able to identify
(for example, with a C-130 it can identify a foreign fishing vessel
incursion) and
2 Pursuant to the 1976 Magnuson-Stevens Fishery Conservation and
Management Act, as amended, the EEZ for the U.S. is an area within 200
nautical miles of U.S. shores in which the U.S. has sovereign rights to
natural resources such as harvesting rights to fish stocks. Pub.L.No.
94-265, 90 Stat. 333 (1976).
3GAO, Coast Guard: Relationship between Resources Used and Results
Achieved Needs to Be Clearer, GAO-04-432 (Washington, D.C.: March 22,
2004).
those incursions that it can actually respond to (for example, 378-foot
cutter can interdict a stray foreign fishing vessel).
o Living marine resources. The performance measure for living marine
resources-defined as the percentage of fishermen complying with federal
regulations-has varied from 96.3 percent to 98.6 percent between fiscal
years 2001 to 2004. According to Coast Guard performance documents, the
agency missed the fiscal year 2004 target because of poor economic
conditions in the U.S. shrimp fisheries, which appear to have made U.S.
fishermen in the Southeast region more willing to violate regulations in
order to maintain operations. However, the Coast Guard reported that while
the number of fishermen in compliance decreased slightly, its total number
of fishery boardings (4,560) was the highest number of boardings since
2001.
o Ice operations. To meet this performance target, the Coast Guard's ice
operations program must keep winter waterway closures under 8 days per
year for severe winters and under 2 days per year for average winters. In
fiscal year 2004, the Coast Guard reports missing its target for an
average winter with 4 days of waterway closures instead of 2 or less. The
Coast Guard reports that it extended the ice-breaking season for an
additional 10 days and because of worsened winter conditions within that
period, its icebreaking assets were challenged to provide services in nine
critical waterways of the Great Lakes. In fiscal year 2006, the Coast
Guard plans to complete the construction of the Great Lakes Icebreaker,
which will significantly improve icebreaking on the Great Lakes.
o Defense readiness. Defense readiness, as measured by the percentage of
time units that meet combat readiness status at a C-2 level,4 improved
from 67 percent to 78 percent during fiscal years 2001 to 2003 but
decreased to 76 percent in fiscal year 2004 due to a personnel shortage
according to the Coast Guard. The Coast Guard identified its need to
supply personnel for the war in Iraq as the main reason for failing to
meet this performance target. To support fiscal year 2004 efforts in Iraq,
the Coast Guard provided personnel for six patrol boats, one patrol boat
support unit, one port security unit, four law enforcement detachments, as
well as two ships and cutters.
4According to Coast Guard information, the C-2 level is defined as the
level at which a unit possesses the resources and is trained to undertake
most of the wartime missions for which it is organized or designed.
o
Programs Meeting Fiscal Year 2004 Performance Targets
Undocumented migrant interdiction. The Coast Guard reported that it
achieved its fiscal year 2004 performance goal of interdicting or
deterring 87 percent of undocumented aliens attempting to enter the United
States. The undocumented migrant interdiction performance measure assesses
the percentage of migrants interdicted or deterred on maritime routes.5 In
2004, the Coast Guard identified 4,761 successful arrivals out of an
estimated threat of 37,000 migrants. In fiscal year 2003, the Coast Guard
missed this target, interdicting or deterring 85.3 percent of migrants.
Since 2001, the greatest percentage of migrants deterred or
interdicted-88.3 percent-was achieved in fiscal year 2002.
o Search and rescue. The Coast Guard's performance in this area, as
measured by the percentage of mariners' lives saved from imminent danger,
was 86.8 percent, above the goal of 85 percent for fiscal year 2004. The
Coast Guard identified continuing improvements in response resources and
improvements made in commercial vessel and recreational boating safety as
the main reasons for meeting the target.
o Marine environmental protection. The Coast Guard measures the marine
environmental protection target as the 5-year average of oil and chemical
spills greater than 100 gallons per 100 million tons shipped. Since fiscal
year 2001, the reported average number of oil and chemical spills has
dropped from 40.3 to 22.1 in fiscal year 2004. The Coast Guard identified
its prevention, preparedness, and response programs-including industry
partnerships and incentive programs-as reasons for the drop.
o Aids to navigation. The aids to navigation program performance
measure-which assesses the total number of collisions, allisions, and
groundings-improved to 1,876 in fiscal year 2004, more than a 6 percent
improvement over fiscal year 2003's total of 2,000, and below the target
of 1,923. 6 (Since the aim is to prevent these accidents, a lower number
than the target represents attaining the goal). The number has varied from
year to year, but has remained below or at the target in each of the 4
years. The Coast Guard attributes this success to a multifaceted system of
prevention activities, including radio aids to navigation, communications,
vessel traffic services, dredging, charting, regulations, and licensing.
5According to Coast Guard officials, the undocumented migrant interdiction
performance target was set at 87 percent based on a study done to
incorporate deterrence as a measure of Coast Guard performance.
6The Coast Guard defines allisions as vessel collisions with fixed
objects, as distinguished from collisions, which are vessel collisions
with movable objects.
o
Programs with Pending Results
Marine safety. The marine safety measure, a 5-year average of passenger
and maritime deaths and injuries, decreased from 1,651 in fiscal year 2001
to 1,307 in fiscal year 2003. The Coast Guard is currently waiting on the
states to supply recreational boating numbers in order to release their
total performance result for calendar year 2004. Coast Guard officials
identified ongoing inspection, investigation, prevention, and response
programs, as well as work with industry, states, and volunteers to promote
boating safe operations, as factors in reducing the number of deaths.
o Illegal drug interdiction. The illegal drug interdiction performance
measure7-the rate at which the Coast Guard seizes cocaine-is currently
being modified by the Coast Guard. The Coast Guard expects their
performance results will be available in April 2005.
o Ports, waterways, and coastal security. The Coast Guard is currently
developing a performance measure for ports, waterways, and coastal
security.
7 The illegal drug interdiction performance measure includes only cocaine,
because cocaine has an analyzed flow rate and is the preponderant illegal
drug.
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