House appropriators will “address” a shortfall in the Coast Guard’s budget request for its acquisition account in FY ’17, a Democrat on the committee said on Thursday.
Rep. David Price (N.C.) noted that the Coast Guard’s $1.1 billion request to buy new vessels and upgrade legacy air and marine assets is $808 million less than Congress appropriated in FY ’16.
“I don’t anticipate that we’ll be able to absolutely match the current year [acquisition] appropriation in the fiscal year ’17 bill but the request level is lower than what we would usually hope to see and we’re going to have to address that,” Price said in a House Appropriations Homeland Security Subcommittee (HAC-HS) hearing that examined the Coast Guard’s FY ’17 budget request for $8.4 billion in discretionary spending.
The biggest reason for a big uptick in the Coast Guard’s acquisition budget in FY ’16 is the inclusion of $640 million for construction of a ninth National Security Cutter (NSC), one more than the service’s program of record. The additional NSC was funded courtesy of Senate Appropriations Committee Chairman Thad Cochran (R-Miss.), whose campaign for re-election in 2014 included funding four more NSCs beyond the program of record to get a one-for-one replacement of the 12 Hamilton-class high endurance cutters coming out of service.
Huntington Ingalls Shipbuilding [HII] builds the high endurance NSCs for the Coast Guard at its Ingalls Shipbuilding division in Mississippi.
While the HAC-HS panel acquiesced to Cochran’s proposal for a ninth NSC in FY ‘16, the committee seems disinclined to do so, given their concerns over the costs to build, operate and outfit additional vessels.
Rep. John Carter (R-Texas), chairman of the subcommittee, said the NSCs “are a tremendous asset and are performing well above expectations” but are also expensive, adding the vessels are just one of a number of important tools in the Coast Guard’s overall toolkit needed to accomplish its missions.
“I’m concerned there may be a growing misperception that adding more National Security Cutters and foregoing other recapitalizations like the OPC (Offshore Patrol Cutter) would better serve the Coast Guard,” Carter said.
Asked by Carter if the service needs more NSCs to execute its missions, Coast Guard Commandant Adm. Paul Zukunft replied that the number one acquisition priority now is the OPC, which he said is on track to move into the detailed design phase later this fiscal year with the downselect to a single contractor. The service wants to buy 25 medium-endurance OPCs.
Zukunft praised the subcommittee for protecting the final design funds for the OPC in the FY ’16 budget when it agreed to include the ninth NSC, saying the new medium endurance cutter “is the platform that we really need to move out on because I look at one, affordability, and I also look at what the out year costs are of adding these newer platforms onto our base. The shore infrastructure costs alone are $140 million to homeport that ship and the annual operating expenses including salaries, fuel, and expenditures is another $45 million.”
The plan for eight NSCs, 25 OPCs, and 58 Fast Response Cutter (FRC) patrol boats is the right one in the force mix analysis, Zukunft said. With the ninth NSC the service is reviewing that analysis, he said.
Without any relief to the Coast Guard’s acquisition budget, which Zukunft has said previously needs to be at least $1.5 billion annually just to keep its various programs moving forward, adding a 10th NSC doesn’t give him “the latitude to build the Offshore Patrol Cutter, finish out the Fast Response Cutter program, and now look at building new icebreakers as well. So something would have to give if we were to look at a 10th National Security Cutter. And so that would jeopardize our other programs within the funding climate I see going forward.”
Zukunft said he is “loath” to delay the OPC program, noting that when the first ship is delivered in 2021 the ships it will replace will have about 55 years of service if none have to be decommissioned. He said any delays in the program “will impact front line operations.”
The Coast Guard is requesting $150 million to begin design activities for a new heavy polar icebreaker. The plan is to award a construction contract in FY ’19 and achieve full operational capability in eight years. No heavy icebreaker has been built in the United States in the last 40 years but the American Shipbuilding industry says it can build the new vessel, Zukunft said. It’s possible that the new icebreaker would be based on an existing parent craft, he said, which would be a foreign design.
Zukunft also said the Coast Guard is in “very emotional negotiations” to agree on the costs for the award of a contract to build the remaining 26 FRCs. Bollinger Shipyards is the contractor for the first 32 patrol boats and is the only bidder on a recompete of the FRC.
The requirements are steady as is the unit cost so the Coast Guard knows “what a fair and reasonable price is,” Zukunft said. He said the parties need to come to terms within two months to move forward, “otherwise, and I’ll just leave this vague, we will have to explore options.”
Zukunft said he is “encouraged” that the FRC negotiations will be closed.
The Coast Guard is seeking funds for four FRCs in FY ’17. This is two fewer than desired as the service needs to complete the build-out of the program by 2023 to free up funds to begin full-rate production of the OPC, Zukunft said.
“We can go at risk this year with four, but part of this is driven by a $1.1 billion” acquisition budget but the Coast Guard needs to get back to six FRCs a year, Zukunft said.