April 13, 2011

Subcommittee Panel Holds Hearing on Improving and Streamlining the Coast Guard’s Acquisition Program

Washington, D.C. – The House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation today held an oversight hearing on the status of the U.S. Coast Guard’s current acquisition programs, as well as the policies and procedures the Service uses to determine mission needs requirements and the assets needed to meet those requirements.

The Subcommittee received testimony from the following witnesses: Vice Admiral John Currier, Deputy Commandant for Mission Support, United States Coast Guard; and Mr. John P. Hutton, Director of Acquisition and Sourcing Management, Government Accountability Office.

Below is the opening statement of U.S. Representative Rick Larsen (D-WA), Democratic Ranking Member of the Subcommittee on Coast Guard and Maritime Transportation, as prepared for delivery:

U.S. Representative Rick Larsen (D-WA), Democratic Ranking Member of the Subcommittee on Coast Guard and Maritime Transportation
Opening Statement at Hearing on
Subcommittee on Coast Guard and Maritime Transportation
“Improving and Streamlining the Coast Guard’s Acquisition Program”
April 13, 2011

Mr. Chairman, thank you for convening this morning’s hearing to continue the subcommittee’s oversight of the U.S. Coast Guard’s major acquisition programs and policies.  I appreciate the opportunity to examine the status of the Coast Guard’s acquisition activities and to assess current acquisition management challenges.

The Coast Guard is a multi-mission agency with a diverse portfolio of operations including vessel inspections, search and rescue, port security and oil spill response.  In short, our nation’s “Guardian of the Sea”, protects our coasts, ensures safe and efficient maritime commerce and supports hundreds of thousands of maritime jobs.

When the Coast Guard began its recapitalization program in 1996, it set out on a daunting task.  The Coast Guard intended to replace or modernize its aging fleet of over 90 cutters and some 200 aircraft – and it attempted to do so through an unproven procurement process using a single entity to fulfill its needs.

By the time the Deepwater contract was executed with Integrated Coast Guard Systems in June 2002, GAO and others had already raised concerns.

As was made painfully clear during the course of the subcommittee’s four oversight hearings on this issue during the 110th and 111th Congresses, the Coast Guard’s past oversight and management of its major system acquisitions – especially of the $27 billion Deepwater Program which was to procure these entirely new fleets of vessels and aircraft – was woefully insufficient and ineffective.

Regrettably, the Service’s inadequate oversight led to substantial cost overruns, design flaws, delays in the delivery of new assets, and perhaps worst of all, a diminution of the Coast Guard’s operational capabilities at sea and in the air.

The Government Accountability Office reaffirmed this determination through multiple analyses.  GAO has conducted no fewer than 15 audits and evaluations of the Deepwater Program since 2001.  I look forward to hearing this morning from John Hutton, GAO’s Director for Acquisitions and Management, as the GAO releases its latest update on the Coast Guard’s progress in reforming its acquisition process.

To provide the necessary course correction, the Congress included in Title IV of last year’s Coast Guard reauthorization legislation specific provisions to overhaul the Service’s acquisition policies.

New requirements were –

1. appointment of a Chief Acquisition Officer,

2. imposition of a system of acquisitions controls to ensure that operational requirements are well-defined before initiating acquisition efforts,

3. new requirements to ensure all acquired assets undergo thorough testing, and

4. the development and maintenance of an acquisition management career path within the Service.

I am very interested in hearing from Admiral Currier on the Coast Guard’s progress in implementing these reforms.

Mr. Chairman, acquisition policy is not just a function of process.  Our policies are also reflected in the budgetary resources we devote to programs.  At our budget oversight hearing on March 1, we heard a lot about doing “more with less.”  However, I believe that we also established that the more likely outcome of fewer resources is that the Coast Guard will be doing “less with less.”

While recent budget cuts have largely spared the Coast Guard, the massive cuts in discretionary spending in the budget resolution presented to the House and due on the floor Friday do not portend full funding of the Coast Guard’s asset replacement program.

The Coast Guard’s Acquisition, Construction, and Improvements Account average was $1.38 billion from fiscal year 2007 through the request for 2012.  However, the Coast Guard’s projected funding for fiscal years 2013 through 2016 average $1.9 billion annually – a $520 million annual increase.  This level greatly exceeds any historical levels and will likely need to be adjusted down.

We are past the time when we can discuss cuts in the abstract – these proposed cuts have consequences.  Can the Coast Guard respond to oil and other spills, can it respond to a tsunami on the West Coast, and can it perform all of the missions we place upon it?  I look forward to working with Admiral Currier and the Coast Guard in assessing the real impacts of the possible cuts. 

The subcommittee should also not overlook the critical importance of other ongoing Coast Guard acquisition programs such as Rescue 21, the Service’s sustainment programs for legacy assets that remain in service, and several unbudgeted acquisition needs, including the need for polar icebreakers.  It remains paramount that the subcommittee, GAO and other observers continue to shine a light on the Coast Guard as we move forward to ensure that its acquisition programs are mission-driven, cost-effective, and accountable.

Mr. Chairman, the Coast Guard and the men and women who serve need the capabilities to address the myriad demands we place upon them.

But we need to get this right.  History demonstrates that the Coast Guard will be relying on the assets it purchases today for many more years than anticipated.   We also need to be practical and recognize that a course correction of this magnitude simply does not happen overnight.