Congress urged to put Coast Guard on short leash with budget-busting Deepwater project

Introduction

The Coast Guard’s chronic overspending and mismanagement of its Deepwater fleet modernization program mean that it’s time for Congress to withhold funding unless the service submits prompt quarterly reports assessing the risks of all its major projects, the Government Accountability Office says.

The Deepwater project to build new ships and aircraft could wind up $5 billion over its $24.2 billion baseline budget, but that may be only the tip of the iceberg, the GAO said. That’s because the Coast Guard has yet to revise its cost estimate for a new offshore patrol cutter, and to incorporate extra costs and schedule changes. A $24.2 billion cost baseline set in 2007 for Deepwater is “no longer… achievable“ and the reliability of cost estimates is in question, the report said.

“Congress should consider enacting a permanent statutory provision that requires the Coast Guard to submit a quarterly report within 15 days of the start of each fiscal quarter on all major Coast Guard acquisition projects and require the report to rank for each project the top five risks,” the GAO said. To ensure timely reports, Congress could withhold the Coast Guard’s acquisition budget until “after the 15th day of any quarter of any fiscal year until the report is submitted.”

In 2007, the Coast Guard took back managing the Deepwater project from Northrop Grumman and Lockheed Martin, saying it had relied too heavily on contractors to do the work of the government. The Coast Guard then set a $24.2 billion cost baseline, which an earlier GAO study found was exceeded by $3.8 billion as of last year.

After its latest inquiry, the GAO made 10 recommendations for the Coast Guard to improve its management of the costly Deepwater project. The recommendations included requiring the Coast Guard to submit quarterly reports to Congress detailing the risks of each major ship or aircraft acquisition “including those that may have future budget implications such as spare parts.”

The Coast Guard said it concurred with all recommendations.

FAST FACT: The Coast Guard launched its Deepwater modernization project in 1996. To date, it has taken delivery of 18 cutters, replaced obsolete equipment on 13 patrol boats, and acquired about 17 airplanes to perform search and rescue missions or surveillance missions.