The Honorable Rick Larsen
Opening Statement
Subcommittee on Coast Guard and Maritime Transportation
“Creating American Jobs and Assuring the Safety and Security of America’s Waterways: A Review of the Coast Guard’s 5-year Capital Improvement Plan”

May 16, 2012

Mr. Chairman, thank you for convening this morning’s hearing to continue the subcommittee’s oversight of the United States Coast Guard’s major acquisition programs and policies. 

Your persistence in keeping the Coast Guard’s feet to the fire to ensure that their acquisition activities remain on track and on schedule is both admirable and essential.  It is imperative that we avoid any future delays and cost overruns if we hope to deliver the Coast Guard with the type of 21st Century surface, air and communications assets that the agency desperately needs.

It is no exaggeration to say that when the Coast Guard set out in 1996 to recapitalize its aging fleets of cutters and aircraft, the need for this initiative was unassailable. 

Despite the past setbacks of the former Deepwater Program, since discontinued, recent evidence demonstrates that the Coast Guard has moved smartly to fully internalize all major acquisitions activities and assume the role as lead system integrator.  New and additional acquisition personnel have been hired.  Stringent new policies have been adopted to ensure timely and effective oversight both within the Coast Guard and the Department of Homeland Security. 

I commend Admiral Currier for the many positive actions taken thus far by the Coast Guard to assume all system integrator responsibilities.  We all recognize the magnitude of the challenge before you and realize that this effort remains very much a work in progress.

Notwithstanding this progress, however, significant impediments remain and must be overcome if we hope to maintain the Coast Guard’s operational capabilities at sea and in the air.  Regrettably, the only conclusion I can reach after an assessment of the current circumstances is that the status of the Coast Guard’s major acquisition programs has now risen to nothing short of critical.

Mr. Chairman, you will recall that the Government Accountability Office has reported that the absence of baseline estimates for several major assets – especially the Offshore Patrol Cutter – might drive up the overall cost for major system acquisitions to well over $29 billion. 

The GAO also asserts that revised cost estimates and delivery schedules developed by the Coast Guard may be unreliable because the Coast Guard has not adhered consistently with its own best management practices. 

The unreliability of the acquisition timetable was made even more acute by significant omissions from the Coast Guard’s Fiscal Year 2013 budget request, most notably, the failure to request any funding for the final two National Security Cutters, or to account for future out-year requests to build a new polar class icebreaker. 

Cumulatively, these omissions will add hundreds of millions of dollars to future acquisition account requests.  And nowhere does the budget take into account future out-year operational expenses that the Coast Guard will assume when it initiates perpetual seasonal activities in the High North.

More troubling, within the current context of zero-sum or declining Federal budgets, these unbudgeted priorities will almost certainly push out further to the right the timetables for other important acquisition or construction programs, and simultaneously, also ramp up maintenance and operating costs for the Coast Guard’s legacy assets.

Important initiatives, such as the construction of Fast Response Cutters and Maritime Patrol Aircraft, completion of the approved program of record for Response Boat-Medium, or the renovation of Coast Guard housing and construction of new shore infrastructure, will be delayed, prematurely terminated, or left to languish without funds.

Additionally, the GAO has raised concerns about the viability of the Coast Guard ever achieving a “System of Systems” capability. It appears now a certainty that the new generation of command, control and communication technologies, once promised, will never be delivered.

And so, we have reached a critical threshold. Admiral Papp in his first State of the Coast Guard address openly acknowledged that the Coast Guard does not have the resources to perform at 100% in every one of its statutory missions on every given day.  That is a somber warning, and something which every member of the Congress – Democrat or Republican – should take very seriously.

After all, our nation is, first and foremost, a maritime nation. 95% of our foreign trade arrives or is shipped by sea.  The Maritime Transportation System accounts for nearly $700 billion dollars of the U.S. gross domestic product and provides roughly 51 million jobs for U.S. workers. Our Nation's economy and its security depend upon safe and reliable maritime commerce.  And our Coast Guard is the indispensible tool that protects and facilitates that commerce.

Mr. Chairman, unless we are willing to see the gaps in capability expressed by Admiral Papp become chronic, we need to break from our current deficit-driven mindset. 

If the Congress could find the means to recapitalize the Coast Guard during the depths of the Great Depression, we can find the resources today to provide the Coast Guard with the type of modern, capable, multi-mission high-endurance cutters and aircraft that the Coast Guard deserves.  Few things are as important.  Thank you.