The design, schedule and estimated costs of the Coast Guard’s top acquisition program, the Offshore Patrol Cutter (OPC), are challenged, creating potential mission gaps and putting program deliveries and costs at risk, warns a new report by a government auditing agency.

The Government Accountability Office report on the medium-endurance cutter program prompted a bipartisan concern from the House committee that oversees the Coast Guard’s authorities.

“GAO concerns about the OPC design process and procurement, the initial capability of the winning bidder to fulfill the contract, and DHS’s decision to provide extraordinary relief to the shipbuilder to carry out the original contract underscore bipartisan committee concerns,” Rep. Sam Graves (R-Mo.), the ranking member on the Transportation and Infrastructure Committee, said in a statement. “It is my hope that the Coast Guard learns from these mistakes as the construction and recompete processes move forward. They must also work constructively with the committee to address the mission gap caused by these delays.”

The Coast Guard in 2016 awarded Eastern Shipbuilding Group (ESG) the design and construction contract for up to nine OPCs against the service’s requirement of 25 vessels. However, Hurricane Michael in October 2018 slammed into the company’s Florida-based shipyard, forcing ESG to seek contract relief.

In October 2019, the Department of Homeland Security granted financial and schedule relief, adding up to $659 million in financial help and delaying deliveries of the first four ships by eight to 12 months and initial operational testing by 21 months. However, under the modified contract, ESG will only build up to the first four OPCs before the Coast Guard recompetes the program, a process that is underway.

The total estimated cost for the OPC program has grown from a $12.5 billion estimate in 2012 to $17 billion currently, with $2.8 billion of the increase coming after Hurricane Michael, GAO says.

The report says that the Coast Guard authorized construction of the first two ships before a stable design was in place, which could lead to costly rework if changes are needed later. It says that a July 2018 review by the service, done several months before the hurricane, “identified seven technical risks that pertained to the ship’s structural design and distributive systems, including the electric plant, cableways, and auxiliary system, that increased the likelihood of construction rework.”

The GAO also says the post-hurricane delivery dates for the first four ships don’t include all schedule risks and that the program’s latest cost goals exclude “key analyses called for in best practices for developing cost estimates.”

GAO makes eight recommendations, all agreed to by DHS, including revising the acquisition program baseline for the first four ships to include delivery dates and have an acquisition program baseline in place when the department awards the contract for the recompeted phase of the OPC.

GAO also says that the OPC design must be stable before a construction contract is awarded for the third ship. So far, the Coast Guard has awarded the construction contracts to ESG for the first two ships.