After previous review and criticism of the U.S. Coast Guard’s progress in modernizing its fleet through the Offshore Patrol Cutter program, the Government Accountability Office said in a new report to lawmakers that the program still needs to “mature” both its technology and design.
The Offshore Patrol Cutter “will provide a capability bridge between the national security cutter, which patrols the open ocean in the most demanding maritime environments, and the fast response cutter, which serves closer to shore,” as described by the Coast Guard.
GAO said in a 2020 report that the Coast Guard needed to stabilize its design for the offshore patrol cutter before construction moved forward on the third vessel in its accelerated acquisition and build program that was “significantly disrupted” by 2018’s Hurricane Michael. After the storm, Eastern Shipbuilding Group was granted extraordinary contractual relief because of the damage to their facilities, workforce disruption, and capital depletion.
In addition to an unstable design that could result in construction delays to fix deficiencies, GAO said the OPC program schedule was mired in “significant deficiencies” including optimism on timetables that didn’t fully take into account the hurricane’s schedule impact and cost estimates that omitted key analyses. Cost estimates developed in March 2020 to support rebaselining the cost goals for stage 1 of the OPC program lacked a sensitivity analysis, lacked a risk and uncertainty analysis, were not informed by a current technical baseline document, and were not independently assessed, GAO said.
GAO made eight recommendations, four to DHS and four to the Coast Guard, including revising the OPC’s acquisition program baseline for stage 1 to include OPC’s delivery dates, ensuring the OPC design for stage 1 was stable prior to approval of construction start for OPC 3, ensuring the Coast Guard Component Acquisition Executive revised Coast Guard’s acquisition policy to include criteria and a methodology for demonstrating design maturity for shipbuilding programs that are aligned with shipbuilding best practices, and ensuring incorporation of better developed cost estimates and risk analyses. DHS concurred with all of the recommendations.
Since that time, GAO said in its latest report, the Coast Guard “continues its approach of progressing through the technology development, design, and construction phases concurrently, which increases risk and is contrary to leading practices.”
“The Coast Guard has not developed a plan to mature the stage 1 OPC’s critical technology—the davit (a crane that deploys and retrieves a cutter’s small boats). Nor has the program integrated and demonstrated the davit in a realistic environment. Without a plan to mature the davit and demonstrate it before delivery, the Coast Guard risks further delays and costly rework,” GAO said.
“In addition, the Coast Guard has not aligned its shipbuilding acquisition policy with shipbuilding leading practices,” the watchdog continued. “Specifically, the Coast Guard does not require completion of basic and functional design and maturity of all critical technologies, as GAO previously recommended. It also does not require completion of the design of distributive systems—systems that affect multiple zones of the ship—prior to construction of the lead ship. Significant rework can occur late in construction, resulting in subsequent cost growth and delays, if design of distributive systems are not completed prior to construction.”
At her State of the Coast Guard Address in March, Commandant Adm. Linda Fagan noted that many of the Medium Endurance Cutters, which will be replaced by the Offshore Patrol Cutters, are over 50 years old and “increasingly expensive to maintain”; USCG currently has a fleet of 28 MECs. The service is “excited” that the Offshore Patrol Cutters “are under construction now, with the first expected to go in the water this year,” she said.
“These new cutters will expand the Coast Guard’s capability to secure the U.S. maritime border and disrupt transnational criminal organizations,” Fagan said.
On Thursday, Fagan visited the Mobile, Ala., Austal USA shipyard to view where OPC construction will begin in mid-2024. In June 2022, Austal was awarded a contract for stage 2 of the program: the detail design and construction of up to 11 OPCs. Eastern Shipbuilding Group, which began the OPC program but saw their contract reduced to the first four OPCs under their post-hurricane relief, protested the award to Austal. That litigation is pending while Austal proceeds with design work.
“The Coast Guard plans to award a contract for OPCs 16 through 25 at a later date, which would result in additional costs for another detail design effort should the Coast Guard award to a different shipbuilder,” GAO noted.
In response to a House Transportation and Infrastructure Committee request to review the status of the OPC acquisition program and the Coast Guard’s plans for the MECs, GAO reported that “since the OPC acquisition’s inception in 2012, the program has incurred cost growth of over 40 percent and schedule delays of almost 1.5 years for delivery of the first four cutters.” Factors in the higher price tag include the impact of Hurricane Michael, costs incurred by switching to a different shipbuilder for stage 2 of the program, and increased infrastructure costs. “However, we found indicators that other problems also pose additional risk to OPC cost and schedule, such as delays stemming from issues with propulsion shafting segments not conforming to specifications, and the shipbuilder’s quantity of complex work remaining,” GAO said.
GAO warned that the Coast Guard “faces an operational gap between the MECs and OPCs, and it is likely that the delays in OPC deliveries will exacerbate that gap.”
“In a fleet mix analysis, published in 2023, the Coast Guard proposed a fleet size of 24 to 33 OPCs needed to sufficiently conduct operations… the Coast Guard’s current plan is to acquire a fleet of 25 OPCs. Coast Guard officials said their goal was to sequentially decommission legacy assets as they are replaced by OPCs to maintain adequate major cutter force strength through the recapitalization period,” said the report. “Given the delays in the OPC program, the Coast Guard projects to have a reduction in asset availability—or a reduction in the number of cutters available for operations—starting in 2024 and through 2039, which is the current projected date for when OPC 25 will be ready for operations.”
“The reduction of asset availability in the transition plan could be further exacerbated by the design and manufacturing issues for OPC stage 1, as well as delays in the award of OPC stage 2 and the subsequent bid protest that were not accounted for in the Coast Guard’s notional transition plan,” GAO added.
GAO recommends Congress consider “requiring the Coast Guard to update its acquisition policy to establish that all shipbuilding programs should mature critical technologies—including those that are developmental or that are novel in application or form, fit, and function—to a TRL 7 prior to a program’s contract award for detail design and construction” and ensure that USCG will “update its acquisition policy to establish that all shipbuilding programs should achieve 100 percent completion of basic and functional design prior to the start of lead ship construction.”
The Coast Guard received five recommendations from GAO: ensure that OPC program officials “develop a technology maturation plan for the davit prior to builder’s trials,” that an integrated prototype of the davit be tested in a realistic environment prior to stage 1 builder’s trials, that stage 2 of the program “follows shipbuilding leading practices by successfully demonstrating integrated prototypes of all critical technologies identified by the program or shipbuilder in a realistic environment no later than preliminary design review,” that acquisition policy be updated “to establish that all shipbuilding programs must complete the routing and design of major portions of all distributive systems that transit electricity, water, HVAC, and other utilities, as part of functional design prior to the start of lead ship construction,” and that the OPC stage 2 program “achieves a sufficiently stable design prior to the start of lead ship construction.”
DHS concurred with recommendations 1, 2, and 4 and identified actions they plan to take to address them, GAO said. DHS requested that recommendations 3 and 5 be considered implemented and closed by GAO.
“The program does not agree that the definition of sufficiently stable design includes 100 percent completion of basic and functional design, including routing of major distributive systems and transitive components that affect multiple ship zones,” DHS said in response to the final recommendation. “The Program Management Officer defines sufficiently stable design as achievement of stable/high confidence in functional design, and enough production design and drawings to ensure production can continue without reliance on contractual drawings.”
