USCG Commandant Testifies on Deepwater Plan

WASHINGTON - The Commandant of the Coast Guard, Adm. Thomas H. Collins, testified on July 21, 2005, before the House Appropriations Subcommittee on Homeland Security regarding the Coast Guard's revised plan to replace its aging fleet of deepwater assets.

Collins's written statement follows.

"Good morning, Mr. Chairman and distinguished Members of the Subcommittee. Thank you for taking the time to meet again to discuss the Integrated Deepwater System’s revised implementation plan. It is the number one Coast Guard priority and the cornerstone of our maritime capabilities now and in the future.

As such, I appreciate very much the continued time and deliberation you have been willing to spend to examine all aspects of the acquisition. During the June hearing, you asked five questions to which I will strive to respond as forthrightly as possible today.

Which Deepwater plan is the Coast Guard going to use?

Subsequent to the June hearing, I provided a single implementation plan totaling $24 billion over 25 years. The plan provides a straightforward projected track line for the Coast Guard’s long-term and progressive sustainment, modernization, and recapitalization. Together with the other information we forwarded to the Subcommittee in recent weeks, it addresses the key issues that you and other Subcommittee members highlighted during last month’s Deepwater hearing, including the sustainment of air and surface legacy assets and the program’s overall performance standards and measurement. We fully recognize your need for a single long-range funding plan that addresses each dimension of Deepwater’s complex system of systems with as much clarity and definition as possible. The asset deployment schedule for this $24 billion plan shows the delivery timeline for each air and surface asset over 25 years.

How will Congress know if Deepwater is meeting the Coast Guard’s mission requirements?

The Coast Guard measures the performance of the Deepwater system at three levels—mission, system, and asset.

At the mission level Deepwater cutters, aircraft, and command and communications centers are key contributors to overall Coast Guard mission performance. For example, more than 90 percent of undocumented migrants interdicted at sea are stopped by Deepwater assets. Deepwater’s success can be measured through an assessment of the Deepwater system’s impact on the Coast Guard’s overall performance of its primary Deepwater missions - Ports, Waterways and Coastal Security; Drug Interdiction; Migrant Interdiction; Other Law Enforcement (Interdiction of Foreign Fishing Violating U. S. Exclusive Economic Zone); Defense Readiness; Search and Rescue; and Living Marine Resources.

The Coast Guard has developed a methodology to extract the actual performance data from the Coast Guard operational data systems if any part of the Deepwater system makes a contribution to that mission.

Deepwater system performance measures include: (1) Available Mission Hours on Annual Basis; (2) Surveillance of Nautical Square Miles; and (3) System Task Sequence (Surveil, Detect, Classify, Identify, and Prosecute) Measures.

Deepwater asset performance measures include: (1) Asset Development (Cost and Schedule Performance Indices); and (2) Asset Operational Performance (speed, endurance, range and availability, and other asset and logistics specific measurements). The Coast Guard measures performance of asset development by employing a "balanced score card" and Earned Value Management System (EVMS) that measures cost, schedule, and technical achievement throughout contract and work order execution.

The EVMS includes both a Cost Performance Index (CPI) and Schedule Performance Index (SPI). This approach is consistent with Department of Defense standards for tracking an acquisition program’s developmental cost and schedule requirements.

Each of the foregoing measurement approaches will enable us to evaluate the performance of our Deepwater system at the asset, system, and mission level during future years of program execution and operational employment. How will the Coast Guard decide on the number of ships and aircraft to buy in its Deepwater plan?

The final number of ships and aircraft in the Deepwater plan are stated in the $24 billion, 25-year revised Deepwater implementation plan.

1998Legacy Fleet 2002ContractBaseline $24B25-Year National Security Cutter 12 8 8 Offshore Patrol Cutter 32 25 25 Fast Response Cutter 49 58 58 Long-Range Interceptor 45 40 33 Short-Range Prosecutor 102 82 91 Long-Range Surveillance Aircraft (HC-130) 30 6 22 Medium Range Surveillance Aircraft (CN-235) 30 35 36 Medium-Range Recovery Helicopter (HH-60) 42 0 42 Multi-Mission Cutter Helicopter (HH-65) 95 93 95 VTOL Recovery & Surveillance Helo (AB-139) 0 34 0 VUAV 0 69 45 HAEUAV 0 7 4

If the final Deepwater implementation plan performance requirements remain unchanged, the following factors would influence any decision to make changes to the final number of ships and aircraft:

1. Technology upgrade opportunities;

2. Legacy asset capabilities and status;

3. The rate of the actual execution of the implementation plan; and

4. Updates to the performance projection derived from input from actual performance.

Initially, the Integrated Deepwater System was designed to perform at the level that the Coast Guard legacy Deepwater fleet performed at in 1998. The tragic events of 9/11 and the stand up of the Department of Homeland Security changed the performance requirements of the Coast Guard. Revisions to the original baseline began almost immediately after the contract was signed to reflect post-9/11 requirements and ensure that the assets had the capabilities to meet system requirements.

In response to this need for change, the Coast Guard engaged in a series of internal and external third party reviews of the Deepwater acquisition.

In 2003, the Center For Naval Analyses (CNA) completed a three-part study and the Coast Guard’s Performance Gap Analysis (PGA) were conducted. This was followed in 2004 by the RAND Study and the MITRE Corporation’s review of the PGA study, which it found to be "likely the most complete & comprehensive campaign level study conducted by any uniformed service in recent times." These studies informed the final force structure selected in the $24 billion, 25-year plan, helping the USCG and ICGS.

How will the Coast Guard clearly identify the costs of sustaining legacy assets in its Deepwater plan?

The Coast Guard submitted an initial legacy asset maintenance report to Congress in April 2005. The legacy asset report will serve as the Coast Guard’s primary tool for ensuring that Congress is apprised of our legacy asset maintenance plans. It will be updated quarterly.

This initial report identifies legacy cutter and aviation Acquisition, Construction and Improvement (AC&I) projects that are included in the fiscal year 2006 budget request and that the Coast Guard anticipates requesting in future budget submissions. Deepwater legacy asset AC&I maintenance projects are grouped in the three categories; sustainment, enhancement, and conversion.

· Sustainment projects are designed to maintain existing legacy asset capabilities and ensure the reliability of these assets until they are replaced by their Deepwater counterparts. The Coast Guard’s legacy asset maintenance plan includes $338 million in sustainment projects, or approximately 1.5 percent of the total Deepwater acquisition cost. While this level of funding for sustainment projects was not part of the original Deepwater plan, it will be included in future Deepwater budget requests.

· Enhancement projects are designed to improve capabilities onboard legacy assets on an interim basis until they are replaced by their corresponding Deepwater platforms as projected in the revised implementation plan. The Coast Guard’s legacy asset maintenance plan includes $103 million in enhancement projects, or less than half of 1 percent of the total Deepwater acquisition cost. Requests for this funding will be included in future Deepwater budgets.

· Conversion projects are designed to renovate and upgrade existing legacy assets so they may be incorporated as part of the final IDS force structure. The Coast Guard’s legacy asset maintenance plan includes $1,504 million in conversion projects. Legacy conversions total approximately 6.25 percent of the overall Deepwater acquisition cost. Requests for this funding will be included in future Deepwater budgets.

When will the Coast Guard make clear decisions on key assets such as:

(a) the 110-foot patrol boat Service Life Extension Program (SLEP), The Coast Guard is working with its administration partners to evaluate the tradeoffs involved with the 110-foot SLEP, and will present its findings in a report to Congress, as required by House Report 109-16 accompanying H.R. 1268 (Making Emergency Appropriations for the Fiscal Year ending September 30, 2005).

A key component of the Deepwter program is the replacement of the Coast Guard’s 110’ Island Class Patrol Boat (WPB) fleet. The Island Class patrol boat is a Coast Guard multi-mission workhorse and is rapidly approaching the end of its serviceable life. Under the initial IDS proposal, the 49 110’ Island Class WPBs were scheduled to undergo a conversion to 123’ WPBs by 2010 as a bridging strategy. The 123’ WPBs would then be replaced by the Fast Response Cutter (FRC) starting in 2018. As the first eight 110’ to 123’ conversions were conducted, the Coast Guard found that the 110’ WPB hulls were in much worse condition than anticipated. This extended the conversion timeline and would have increased projected costs for conversions after the first eight (the first eight were negotiated under a firm-fixed-price contract). An operational analysis of the 123 WPBs also identified high risks in meeting mission needs, particularly in the post-9/11 environment. The Coast Guard recently decided to stop the conversion project following the first eight conversions. Instead, the Coast Guard plans to advance the FRC design and construction by ten years, and is analyzing alternatives methods for extending the life of the 110-foot fleet, as discussed above.

(b) fixed-wing aircraft? The Coast Guard’s fixed wing plan is described in the $24B plan. In order to meet a wide range of mission demands while transitioning from a legacy fleet to the Deepwater system, the Coast Guard will employ a variety of patrol aircraft including C130s, HU25 "Falcons", CASA CN-235-300Ms, and Unmanned Aerial Vehicles (UAVs). Each of these aircraft offers different performance advantages; together they form a critical part of the Deepwater system of systems. The Coast Guard fixed wing plan is based on providing critical capabilities now and in the future at a low total ownership cost.

The Coast Guard Performance Gap Analysis found that a total of 66,855 annual flight hours is required to meet all MPA mission needs. This plan proposes to restore the service to 1998 multi-mission fixed wing employment levels, and adds projected post 9-11 demands for maritime domain awareness, loss of critical counter-drug mission support from other agencies, and revised heavy lift requirements calculated based on the Deepwater Modeling and Simulation Master Plan and detailed Coast Guard ports and waterways planning efforts.

The original Deepwater baseline had 41 manned, fixed wing aircraft replacing the 1998 legacy fleet of 60 aircraft. The revised Deepwater baseline proposes 58 manned, fixed wing aircraft that provide 60,800 programmed flight hours in order to substantially close the MPA gap. Based on the deployment plan, the Coast Guard will remain below 1998 capacity levels until 2014 and the fixed wing fleet will be fully built out by 2017.

Conclusion

It is my earnest hope that the refinement of our revised Deepwater implementation plan, combined with the additional information we have provided in recent weeks to elaborate key aspects of the Subcommittee’s specific interest areas, fully satisfy your oversight needs and the Subcommittee’s direction to revise the program to meet the Department of Homeland Security’s new requirements with a clear, transparent plan and budget.

I greatly appreciate the Subcommittee’s patience and valuable recommendations over the past several months. The refinements we have made to Deepwater’s revised post-9/11 implementation plan will, with your support, allow the Coast Guard to restore readiness and safety through progressive sustainment, modernization, and recapitalization of our Deepwater fleet. With its enhanced capabilities and capacity, this post-9/11 plan will ensure that our men and women are provided with the modern, more-capable platforms and systems necessary to meet the full spectrum of Coast Guard mission requirements Thank your for the opportunity to testify before you today. I will be happy to answer any questions you may have."