The heavy polar icebreaker program is the Coast Guard’s top unfunded priority in its FY ‘18t budget request and will top a list additional funding needs the service will soon submit to Congress in order to provide better clarity for the program going forward, Adm. Paul Zukunft, the service’s commandant, said on Wednesday.
“We will make icebreakers our top priority to see what we can’t squeeze into [fiscal year] ‘18, just because of the uncertainty that we go into each fiscal year,” Zukunft told Defense Daily in an interview in his office. “And are we going to have a budget at the very front end or are we going to languish through a continuing resolution that could potentially close the door” to get the program under contract in FY ’19.
Zukunft pointed out that the federal government has operated at different times under 16 continuing resolutions since 2010, which makes it difficult for departments and agencies to manage their spending. Under a continuing resolution, agencies are funded at prior year levels and no new program starts are allowed until a budget for a particular fiscal year is approved by Congress and signed into law by the president.
The Coast Guard’s plan, although there is no identified funding stream for construction, is to buy three heavy and three medium polar icebreakers, beginning with delivery of a heavy icebreaker in 2023. The service currently operates one heavy icebreaker nearing the end of its service life and a medium icebreaker that was commissioned in 1999.
“Plans are underway to develop a new fleet of heavy icebreakers but there is no formal cost estimate for that acquisition program at this time,” Marie Mak, director of Acquisition and Sourcing Management for the Government Accountability Office (GAO), on Wednesday told the House Transportation and Infrastructure Committee panel that oversees the Coast Guard.
Congress appropriated $150 million in FY ’17 for the polar icebreaker program and the Coast Guard is seeking $19 million in FY ’18. Although the service more than likely wants substantially more icebreaker funding in FY ’18, the Coast Guard competes with its sister components in the Department of Homeland Security for funding and the Trump administration is prioritizing security along the United States’ border with Mexico and immigration enforcement.
Zukunft said that the current and requested funding still keep the polar icebreaker program on the “glidepath” for delivery of the first vessel in 2023, if appropriate levels of funding are sought and provided in FY ’19. With current funding the Coast Guard plans to award a detailed design and construction contract for the heavy icebreaker in FY ’19. The commandant said the FY ’19 spending bill needs funding for the long-lead time material contract for the ship.
Last month, Zukunft told a House appropriations panel that he’d prefer that construction funding for the icebreaker be contained in the Coast Guard’s budget, although there was an effort by the Senate appropriators last year to fund the ship in the Navy’s budget. Zukunft is “agnostic” as to where the construction funds end up, “But I am adamant that we have to have a reliable appropriation process going forward.”
The Coast Guard and Navy have an integrated program office for the polar icebreaker program that is analyzing requirements and looking for ways to bring funding down. The frequently advertised price for a heavy icebreaker is $1 billion but the Coast Guard and Navy are working to get that cost down
In February, the Coast Guard awarded five study contracts to various shipbuilders to help refine requirements for the heavy icebreaker. Awards of $4 million each were made to Bollinger Shipyards, General Dynamics [GD], Huntington Ingalls Shipbuilding [HII], Singapore-based ST Engineering’s VT Halter Marine division, and a U.S. division of Italy’s Fincantieri.
The world’s polar ice caps are melting, opening sea lanes that either didn’t exist before, or are open for longer durations during the year, increasing the flow of vessel traffic in these regions that the Coast Guard operates in to help provide safe passage and if necessary, rescue operations. The service is also responding to an increased presence by other countries, notably Russia, which operates more icebreakers than the U.S. and in the next several years plans to introduce two armed-icebreaking corvettes into the Arctic.
The current heavy icebreaker Polar Star is suited for operations in both the Arctic and Antarctic regions while the medium icebreaker, the Healy, is best utilized in the Arctic where the ice isn’t as think as the southern polar region.
Inland Water Fleet
Zukunft said another key priority on the Coast Guard’s unfunded priorities list for FY ’18 is beginning to recapitalize its fleet of vessels that continuously mark shifting river channels for navigational purposes by commercial and pleasure craft along the nation’s network of inland waterways.
The service operates 35 inland water craft that are on average 52 years old, with the oldest hull more than 70 years in age. Zukunft put the rough cost per replacement vessel at $25 million, noting that the boats would likely be purchased off-the-shelf and require minor modifications.
About $4.5 trillion in annual commerce transits inland waterways in the U.S., Zukunft said, making the economic argument for recapitalizing the services inland fleet. He also said that as the U.S. looks to export more liquified natural gas, there will be increasing shipments of these products on the inland waterways and having reliable, safe channels in rivers is a must to help minimize any chances of accidents and potential spills.
The GAO’s Mak said at the House hearing that the Coast Guard’s annual acquisition budget continues to fall short of its needs, pointing to a situation that will likely worsen as the service’s top acquisition priority, the Offshore Patrol Cutter (OPC), begins its ramp up of production funding in FY ’18.
“Since 2014 we have found there are funding gaps between what the Coast Guard estimates it needs and what it traditionally requests and received,” Mak said. “The affordability of the Coast Guard’s portfolio will only worsen once it starts funding the Offshore Patrol Cutter. The OPC will absorb half to two-thirds of Coast Guard acquisition funding annually beginning in 2018 through 2032 while it is being built.”
Eastern Shipbuilding is under contract for the first nine of a planned buy of 25 OPCs. The company is expected to receive a contract later this year for long-lead materials for the first OPC. Construction funding for the first ship is being requested in the FY ’18 budget along with the long-lead items for the second vessel.
Zukunft has said repeatedly this year that he wants at least $2 billion in acquisition funding annually so that he can better manage the competing priorities the Coast Guard has for recapitalizing its surface, air and shore-based assets. The service is requesting $1.2 billion for its acquisition account in FY ’18, an amount that is likely significantly lower than it asked for internally before the White House Office of Management and Budget chopped away at it.
Mak also pointed to a looming gap in the Coast Guard’s offshore patrol operations as retirements of existing medium endurance cutters are expected to outpace the production ramp of the OPC. Vice Adm. Sandra Stosz, deputy commandant for Mission Support, told the panel that the Coast Guard won’t let a gap form and will extend the service life of some of its medium endurance cutters if that’s what it takes to keep the necessary assets patrolling the seas.
Rep. Duncan Hunter (R-Calif.), chairman of the Transportation and Infrastructure Coast Guard Subcommittee, told Coast Guard officials at a hearing on the service’s budget and operating needs that the service needs to fight harder for its needs. Hunter, who also sits on the Armed Services Committee, said the Army, Air Force, Navy and Marines aren’t shy about driving home their must-haves as Congress considers the funding needs of the Armed Forces.
“You don’t do that,” Hunter said. “In fact, you’re highly censored by your overseers at OMB so you’re not even able to come in and say, ‘Here’s all the things the Coast Guard really needs. OMB, can go to hell.’”
Hunter also said that there is a “disconnect” about what President Donald Trump says he wants in terms of accomplishing in the area of homeland security and what the Coast Guard’s budget request is.
NSC, FRC Engine Woes
Mak also pointed to troubles on two of the Coast Guard’s marquis surface recapitalization efforts that are well underway, engine troubles on the high-endurance National Security Cutter (NSC) and the Fast Response Cutter (FRC) patrol boats, which has meant more time receiving depot maintenance. She said that in March GAO found that the two vessels are not meeting minimum availability rates, “resulting in lost operational days.”
“The engines for both these vessels have been problematic despite ongoing efforts by the Coast Guard,” Mak said. She said the NSC’s engines are overheating when they operate in waters above 74 degrees, “which makes up a significant portion of the NSC’s operating area given that they are intended to be deployed worldwide.”
She said 20 of the FRCs engines have had to be replaced, noting that these are covered by warranty provisions.
“Until these issues are resolved, operations will likely continue to be negatively impacted,” Mak said.
Bollinger builds the FRCs and HII the NSCs. The engines for both vessels are supplied by MTU, which is part of Britain’s Rolls-Royce, and has operations worldwide. The NSCs are each powered by two MTU 20V 1163 main diesel engines and the each FRC is powered by two MTU 20V 400 M93L main diesel engines.
Mak did acknowledge that both the FRC and NSC are providing the Coast Guard with more capability and then vessels they are replacing, noting that the NSC’s increased endurance and improved handling has led to more drug interdictions.
The Coast Guard plans to buy 58 FRCs and is currently budgeted for nine NSCs. Congress is provided funding for long-lead materials for a 10th NSC although the Coast Guard’s FY ’18 request doesn’t seek production funding for this vessel. The original program of record was for eight NSCs but Sen. Thad Cochran (R-Miss.), the top Senate appropriator, has pledged to fight for funding for 12 NSCs.
The unfunded priorities list is expected to be delivered to Congress by the end of June, along with a five-year investment plan and a more comprehensive 20-year investment plan. Hunter said his subcommittee will reconvene in July to examine these documents with Coast Guard personnel.