The most recent baseline cost estimates prepared by the Coast Guard for its Deepwater modernization program show overall costs have jumped considerably over the past four years even though the service still hasn’t completed revising estimates for several assets, according to a recent report by the Government Accountability Office (GAO).

The revised Deepwater baseline completed in May pegs total acquisition cost estimates at $29.3 billion, 21 percent higher than the May 2007 baseline of $24.2 billion, GAO says in its report, Coast Guard: Action Needed as Approved Deepwater Program Remains Unachievable (GAO-11-743). Yet several Deepwater assets, notably the Offshore Patrol Cutter (OPC), which was baselined at $8.1 billion four years ago, have not had their expected program costs revised, the report says.

For all the programs that have had their expected costs updated, the revisions are higher, according to the GAO’s presentation of the Coast Guard’s data. This indicates that the overall Deepwater baseline cost estimate is expected to rise.

“But additional cost growth is looming because the Coast Guard has yet to develop revised baselines for all the Deepwater assets, including the Offshore Patrol Cutter–the largest cost driver in the Deepwater program,” GAO says. “In addition, the Coast Guard’s most recent 5-year budget plan, included in DHS’s fiscal year 2012 budget request, indicates further cost and schedule changes not yet reflected in the asset baselines.”

The original cost estimate for acquiring a single OPC was $320 million but budget plans submitted to Congress put the cost for the first vessel at $640 million, GAO says.

GAO also says that that the Coast Guard’s cost and schedule estimates for some assets are suspect because the service didn’t follow best practices in arriving at them. Moreover, the service agrees that the annual funding needed to support the cost estimates is unlikely to be achieved amid a constrained fiscal environment, the report says.

“This contributes to churn in program baselines when programs are not able to execute schedules as planned,” GAO warns.

Other Deepwater assets still lacking a revised baseline estimate include an unmanned aircraft system, which in 2007 was pegged to cost $503 million, small cutter boats, which are estimated at $110 million, and program management, estimated to cost $3.6 billion. The Coast Guard is not revising its program management cost estimates because it says a revision is unnecessary. While this cost includes design work and project management, still the “Coast Guard has identified affordability as a risk for this program,” GAO says.

Recent budget documents also show further delays in program completions, GAO says. For example, under the May 2011 revision, the eighth and final National Security Cutter is slated for delivery in FY ’16, yet budget plans submitted to Congress in February show that the final vessel won’t be delivered until FY ’18, according to the report.

The final HC-144A Maritime Patrol Aircraft, which was expected to be delivered in FY ’16 according to the 2007 baseline, slipped to FY ’20 under the most recent baseline, and again to FY ’25 according to the February budget documents, GAO says.

The estimated costs for 36 HC-144As have risen 41 percent to $2.4 billion from the $1.7 billion estimate in 2007, GAO says.

In addition to not always following best practices for arriving at life-cycle cost estimates, GAO says that contractors are not providing “reliable schedules for selected assets.”

The report also discloses initial results of a fleet mix analysis conducted by the Coast Guard between October 2008 and December 2009 to help make future capability requirements determinations. GAO says the analysis, which was not cost constrained, shows a need for 66 cutters beyond what is currently planned under Deepwater.

For example, instead of the planned 25 OPCs, the fleet mix analysis calls for up to 57. And for HH-65 search and rescue helicopters, which have a current program of record of 102 aircraft, the analysis calls for up to 223.

GAO says that the Coast Guard is undertaking a second stab at the fleet mix analysis that is cost constrained but within annual budget boundaries of $1.2 billion to $1.7 billion. The analysis won’t address whether the current mix of assets is appropriate and won’t look at smaller asset mixes. GAO notes that a $1.7 billion upper limit is unlikely given that Congress hasn’t appropriated that much for all the Coast Guard’s acquisition projects in any single year since 2007.

While the Coast Guard has been strengthening its acquisition management the past four years, it “needs to take broader actions to address the cost growth, schedule delays, and expected changes to planned capabilities that have made the Deepwater program, as presented to Congress, unachievable,” GAO concludes.