NATIONAL HARBOR, Md.–To keep pace with its modernization needs, there will be times when the Coast Guard’s acquisition budget will need to rise above its desired $2 billion floor, Adm. Paul Zukunft, the service’s outgoing commandant, said on Tuesday.

The floor is $2 billion “and there might need to be some adjustments going forward,” Zukunft said, describing these as “spikes.”

Zukunft, who retires from service next month, has maintained that at least $2 billion is needed annually for the Coast Guard to buy the assets it needs to meet its modernization goals and 5 percent annual growth in its operations and support account to sustain its new and legacy equipment.

Coast Guard Commandant Adm. Paul F. Zukunft. Photo: U.S. Coast Guard
Coast Guard Commandant Adm. Paul F. Zukunft. Photo: U.S. Coast Guard

Congress in its recent Omnibus appropriations bill for fiscal year 2018 provided the Coast Guard with $2.7 billion for acquisition, a rare instance where that account climbed above the $2 billion floor. The driver behind the fulsome budget is $1.2 billion to build the 10th and 11th National Security Cutters (NSC), neither of which were requested.

The Coast Guard “punches above its weight class,” Zukunft said in a keynote address at the Navy League’s annual Sea-Air-Space exposition, noting that he has previously described funding for the service as being in the “featherweight class.” Now, with the healthy budget for this year and a strong-looking request for next year, Zukunft said the “good news is we are now a middleweight contender” and is “right where we need to be.”

The Coast Guard is seeking $1.9 billion in acquisition funds for fiscal year 2019, with that figure approaching $2 billion only because the Trump administration belatedly added $720 million for a new heavy polar icebreaker after Congress reached agreement on a two-year budget deal that boosts planned spending levels for defense and federal civilian departments in 2018 and 2019. However, the preliminary budget request for fiscal year 2020 is only for $1.4 billion for the acquisition account, an amount that is closer to typical for the Coast Guard.

There is a good chance the Coast Guard’s acquisition budget will be increased by Congress in fiscal year 2019 because of support for the NSC program within the Senate Appropriations Committee. The program originally was supposed to stop at eight vessels but Republican Sen. Thad Cochran, who chaired the committee until retiring from the Senate on April 1, successfully won additional funding to build the additional ships, arguing that an increasing mission requirement warrants a one-for-one replacement of the 12 aging Hamilton-class high-endurance cutters the NSC is replacing.

Cochran served the state of Mississippi, where the NSCs are built by Huntington Ingalls Industries [HII], and even though he has retired, his successor as the chairman of the appropriations panel is Sen. Richard Shelby (R-Ala.), who is also a strong supporter of the program. Thousands of Alabamians work at HII’s Ingalls Shipbuilding division, which isn’t far across the state line in Mississippi.

If a 12th NSC is added to the Coast Guard’s budget for FY ’19, the $500-plus million construction cost would boost the acquisition budget comfortably above $2 billion, unless Congress trims the request elsewhere.

After FY ’19, it’s unclear when the service will request funding for additional icebreakers. The Coast Guard has a requirement for three new heavy polar icebreakers and three new medium icebreakers, with the initial priority on the heavy ships. Cost estimates for acquiring all six vessels are in the billions of dollars.

Zukunft said the heavy icebreaker is the Coast Guard’s highest priority because the United States doesn’t have its own self-rescue capability should its one current, and aging, heavy icebreaker get stuck in the ice. The Polar Star was commissioned in the mid-1970s and will undergo a modest life extension program to remain operational at least until the first new icebreaker comes online in 2023.

Beyond the icebreaker, the Coast Guard shortly is expected to award its first construction contract to Eastern Shipbuilding for the first of a planned 25 Offshore Patrol Cutters (OPC). Congress appropriated $500 million for the OPC in FY ’18, which included the construction funds for the first ship and long-lead time materials for the second vessel.

In FY ’19, the Coast Guard is requesting $400 million to build the second OPC and procure long-lead time materials for the third vessels. The Coast Guard originally planned to buy two OPCs annually, and if it does so in the future at the same time it is funding construction of new icebreakers, those programs will likely put pressure on the service’s acquisition account to remain above $2 billion. If the funding remains below $2 billion, that would likely mean modernization is being slow-rolled.

Zukunft noted that from 2011 through 2017, the Coast Guard lost nearly $1 billion in operations and maintenance funding due to budget constraints. He said that maintaining 5 percent annual growth in this account will let the service keep up with the operations and support needs of its new assets.