Realistic cost and budget targets needed

Called ‘Coast Guard: Legacy Vessels’ Declining Conditions Reinforce Need for More Realistic Operational Targets’, it comes from the US Government Accountability Office, which looked at the condition, costs, and performance of the Coast Guard’s legacy fleet, focusing on high endurance cutters, medium endurance cutters and patrol boats, which together form the backbone of a broad range of operations.

Due to management problems, replacement vessels’ costs have risen and delivery schedules have slipped by several years, which will require the Coast Guard to operate its legacy vessels much longer than anticipated.

However, the legacy fleet’s “operational percent of time free of major casualties” generally remained well below target levels between 2005 and 2011. This is especially true of high endurance cutters, which only achieved a level of about 44% as opposed to the target level of 72%. These ships have consistently taken the lion’s share of the maintenance budget through unscheduled repairs.

Maintenance managers for both high and medium endurance cutters noted that performance of these vessels’ critical systems has become increasingly unpredictable, and refurbishments of systems that have had a high rate of failure have brought limited returns. The Coast Guard has had programmes in place to extend the life of the medium endurance cutters (with limited upgrades) and the patrol boats (with major refurbishments), but both programmes are coming to a close.

Added to this, maintenance costs are increasing. Expenditures have often exceeded the Coast Guard’s budgeted funds for depot level maintenance, known as Standard Support Levels. Yet the Coast Guard has not updated the Standard Support Levels over the decades to reflect the rising costs to maintain the aging legacy fleet, says the report.

In short, performance is declining and will continue to deteriorate. In particular, the high endurance cutters did not meet operational hour targets in any year from FY 2005 – 2011. In addition, the number of lost cutter days for these vessels in the last three fiscal years has been nearly equivalent to three high endurance cutters being “out of service” in each year.

Two recommendations to the Coast Guard are made. First, that the Coast Guard improve its process to track and estimate vessel maintenance costs and budgets. Second, that the Coast Guard adjust its outdated and unrealistic operational hour targets, especially given the declining performance of the legacy vessels.

For the full copy of the report, visit GAO’s website www.gao.gov/cgi-bin/getrpt?GAO-12-741 and next to the word “Highlights,” click on “View Report (pdf).