Title: U.S. Coast Guard's Offshore Patrol Cutters Efforts Are Delayed And More Expensive Than Planned Description: The U.S. Coast Guard plans to acquire 25 Offshore Patrol Cutters to help continue its mission--patrolling for homeland security, law enforcement, and search and rescue operations. But construction of these ships faces delays, increasing costs and other hurdles. We'll learn more from GAO's Marie Mak. Related GAO Work: GAO-23-105805, Coast Guard Acquisitions: Offshore Patrol Cutter Program Needs to Mature Technology and Design Released: June 2023 [Marie Mak:]: Without addressing our acquisition concerns in policy, the Coast Guard increases the risk that they will not meet cost, schedule, and performance goals. [Music] [Holly Hobbs:] Welcome to GAO's Watchdog Report. Your source for fact-based, nonpartisan news and information from the U.S. Government Accountability Office. I'm your host, Holly Hobbs. The U.S. Coast Guard plans to acquire 25 Offshore Patrol Cutters to help continue its mission--patrolling for homeland security, law enforcement, and search and rescue operations. But construction of these ships faces delays, increasing costs, and other hurdles. We'll learn more from Marie Mak, an expert here at GAO on the Coast Guard's acquisitions. Thanks for joining us. [Marie Mak:]: Thank you for having me, Holly. [Holly Hobbs:] So, Marie maybe we can start with this--what is an Offshore Patrol Cutter and why does the Coast Guard want 25 of them? [Marie Mak:]: The Offshore Patrol Cutter, or OPC, is a 360 foot ship that the Coast Guard plans to use to conduct a variety of missions. It is intended to replace the existing fleet of medium endurance cutters, which all have been operating for over 30 years, which is how long they were designed to operate. The oldest one now has been in service for 56 years. [Holly Hobbs:] So the first of these new ships was scheduled to be delivered in June of this year. But the Coast Guard has told us that's no longer happening. Do we know why? [Marie Mak:] Actually the June 2023 date is not the first scheduled slip. The Coast Guard originally expected the first one to be delivered in September of 2021. And now it isn't even expected until July of 2024. Several things have happened. In 2018, Hurricane Michael decimated the contractor's shipyard in Panama City, Florida. The other two things that really contributed to the scheduled delays are the cutters' design maturity and then a manufacturing issue with the shaft. When it comes to design maturity, our shipbuilding's leading practices indicate that 100% of the design should be completed prior to construction. The shipbuilder actually only completed 97% of the design before they started construction in 2016. And you may wonder what is that issue? 97% of the design is pretty good. Well, the problem is that 3% is super critical since it included key parts of the design like heating and air conditioning, piping, electrical wires. And all those span multiple compartments throughout the ship. Not getting those things done before beginning construction typically leads to rework, and rework requires more scheduled delays and cost increases. [Holly Hobbs:] Marie, you also mentioned that the shaft was an issue. What exactly is a shaft, and what's the issue there? [Marie Mak:] When it comes to the actual shaft, it is the component that drives the propellers to move the ship--obviously key to operate. The shaft segments didn't align during construction on that lead ship, and addressing the cause of that misalignment has added at least another year delay to the delivery. [Holly Hobbs:] In addition to construction delays, the estimated total cost of these ships has also gone up. How much has it gone up and do we know why? [Marie Mak:] There's a few reasons that acquisition cost estimate has increased. It has increased about $3.4 billion since 2018. And the top ones are primarily because, as I mentioned earlier, Hurricane Michael. But then there was a re-compete effort, and unplanned facility and home port costs, among other things. But the largest increase occurred when the shipbuilder decided that it could no longer perform the contract--the terms of the actual contract--after Hurricane Michael. The program was divided into these two phases. The first phase of the acquisition is where the existing shipbuilder is responsible for delivering four cutters and then the second phase, the Coast Guard would award additional contracts for the remaining cutters. And then what happened was in 2022, a new contract was actually awarded. Whenever programs take on a new shipbuilder, there's always cost increases for design and construction--given the expected learning curve and even if some of the technical data is shared from the first one, the cost and schedule always will go up. [Holly Hobbs:] So we looked into the design and construction of these ships and we also found some issues there, too, right? [Marie Mak:] Absolutely. We found that the shipbuilder did not mature a critical technology prior to design and construction. This technology is called a davit. Its role is to raise and lower small boats from the deck. This is a system that already exists on some Coast Guard cutters and is available commercially. But the OPC shipbuilder decided to go with a novel design that has not been tested or demonstrated. The Coast Guard and the shipbuilder should have ensured that they completed development before moving forward with design and construction, which they didn't. Maturing technology is another shipbuilding leading practice. When we don't mature critical technologies, programs face significant costs and schedule risk. [Holly Hobbs:] So the Coast Guard is waiting on these new ships while it's also trying to decommission the old ones. Does it have a plan to do that? [Marie Mak:] Yeah, the Coast Guard actually has a decommissioning schedule, and it's for those medium endurance cutters that I said are really beyond their operational stage. But that reschedule changes routinely based on the condition of each vessel, the maintenance cycles, and the cost of maintenance. The Coast Guard also has to weigh these factors with the delivery schedule of the OPCs. So a lot of moving parts, to say the least. Ideally, the Coast Guard would not decommission a cutter without a new one coming online. But this is at risk because they won't be able to do that as the OPCs become further delayed. [Holly Hobbs:] What's the impact of all this on the Coast Guard's ability to do its job? [Marie Mak:] This is really the critical question. Right now they are okay in the sense that the medium endurance cutters are still largely operational. But they are older than they were designed to operate for. So with each year, they have to keep them operational, the risk continue to go up. So once a ship or its components can't be repaired or it becomes too expensive to maintain, the Coast Guard will have to figure out a way to mitigate its potential reduction in its fleet. But again, the most important thing at this point is to get the OPC acquisition done correctly. [Holly Hobbs:] So Marie just told us that the Coast Guard's efforts to acquire 25 new Offshore Patrol Cutters are behind schedule, over their estimated costs, and likely going to be further delayed because of design and construction issues. Marie moving forward, what more do we think the Coast Guard could be doing? [Marie Mak:]: They really need to follow our shipbuilding leading practices to improve the acquisition outcomes. This means revising its policies to ensure that programs are maturing their critical technologies and completing key aspects of the design prior to construction. And those are a few of the recommendations we've made in our report. [Holly Hobbs:] And last question, what's the bottom line of this report? [Marie Mak:] These 25 OPC's are critical for the Coast Guard to continue conducting its mission, particularly in law enforcement and search and rescue efforts. Without addressing our acquisition concerns in policy and in execution of the program, the Coast Guard increases the risk that they will not meet cost, schedule, and performance goals, and ultimately not have the necessary cutters to meet mission requirements. [Holly Hobbs:] That was Marie Mak talking about GAO's new report on Coast Guard's Offshore Patrol Cutter program. Thanks for your time, Marie. [Marie Mak:] Thanks for having me, Holly. [Holly Hobbs:] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts, Spotify, or wherever you listen and make sure to leave a rating and review to let others know about the work we're doing. For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at GAO.gov.