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Eno Transportation Weekly

Coast Guard Updates Congress on Modernization, Recapitalization Efforts

September 27, 2018

Admiral Karl L. Schultz, 26th Commandant of the U.S. Coast Guard, updated the House Subcommittee on Coast Guard and Maritime Transportation Wednesday on the Coast Guard’s ongoing efforts to modernize agency operations and recapitalize its fleet.

The Coast Guard’s most recent modernization effort began in 2006 and is still ongoing. Under 23rd Commandant Admiral Thad Allen, the service began a process of updating its command structure, support systems, and business practices to ensure it can fulfill its traditional missions—such as fisheries law enforcement, maritime safety, and search and rescue—while also meeting emerging demands like port security and defense readiness.

At the same time, the Coast Guard is in the middle of an extensive recapitalization effort to replace its aging fleet and shore infrastructure; some of the ships are over 50 years old.

This summer, the Government Accountability Office (GAO) released a report that said the Coast Guard’s current approach to acquisitions has left the Guard with a buildup of near-term unfunded acquisitions. “Because the Coast Guard has managed its acquisitions with a short-term, asset-by-asset focus,” GAO reported, “it has at times lost sight of the balance and cost of its overall asset portfolio. For example, some high-priority acquisitions have been delayed.”

Among those high-priority acquisitions are the new offshore patrol cutters and polar security cutters, otherwise known as polar icebreakers. (A “cutter” is a Coast Guard vessel of at least 65 feet in length with accommodations for a crew to live aboard; learn more about the different types of Coast Guard vessels here.)

Adm. Schultz said at the hearing that the Guard welcomes GAO’s recommendations for improving its acquisitions processes, but otherwise described a “good news story” in outlining the many steps the Guard has taken toward recapitalization.

Since the 2006 modernization effort began, the Guard has added seven national security cutters and 30 of 58 fast response cutters, which Adm. Schultz said are “proving significantly more capable than those they’re replacing.”

Adm. Schultz echoed GAO’s assessment that the priorities for the fleet are now the offshore patrol cutters and the polar security cutters. He said they plan to announce this month a production award for the first offshore patrol cutter. Regarding the polar security cutters (the Guard plans to procure three), he informed Congress that they received the technical inputs in August and will receive the cost inputs in November.

“We have not built a large icebreaker in decades,” Adm. Schultz reminded the panel. “I believe we’re in a good place.”

Finally, Ranking Member John Garamendi (D-CA) asked about the waterway commerce cutters. Adm. Schultz said the Guard plans to replace a fleet of 35 small river tenders, barges, and construction tenders. Some in the fleet are over 70 years old; the average age is over 50.

Congress has already appropriated $26.1 million for the Guard to procure waterway commerce cutters, $25 million of which was in the 2018 omnibus. There may be $5 million more appropriated in FY19.

Recognizing Congress’s “desire to do this expediently,” Adm. Schultz said the Guard is talking to the Army Corps of Engineers and other agencies about what technologies they can “pull forward” to ensure they can get the waterway commerce cutters going as quickly as possible.

Holistic, Not Regional, Decision-Making

The recapitalization is just one part of a larger effort to modernize the U.S. Coast Guard. Adm. Schultz described a newly agile service that can look across needs and better spend limited funds on the most crucial projects.

Decisions are now made holistically, he said, not within each region, so that the Guard can figure out across a particular vessel type, “what has to be done today to put as many of those ships in the fight as many days as possible.”

“In the pre-modernized Guard, we would look through regional commanders… now we have a holistic look,” he said. “I think we make decisions that are enterprise decisions that… allow us to put finite dollars against the most pressing capital projects.”

He said the decision-making processes are more strategic than before, allowing the Guard to allocate taxpayer dollars “in a much more sophisticated and purposeful fashion.”

Money Transferred to ICE

At the same time that the Coast Guard is working with limited funds to procure several different types of ships, Ranking Member Garamendi asked Adm. Schultz about the Office of Management and Budget’s (OMB) decision to transfer over $32 million from the Coast Guard’s budget (specifically the research and development and the environmental compliance and restoration programs) to Immigration and Customers Enforcement (ICE) to fund what the ranking member called “highly controversial, if not inhumane, family separation and deportation activities on the southern border.”

Adm. Schultz conceded that the transfer was “absolutely not” without consequence to the Coast Guard’s budget but that “we have the maneuver space” to absorb the loss of funds. The transfer has resulted in some shortages on spare parts and less money for shore infrastructure recapitalization.

“There is consequence, but it’s manageable,” he said.

Reps. Randy Weber (R-TX) and Don Young (R-AK) also expressed interest in the movement of funds, though neither asked specifically about it.

“We haven’t funded you adequately… we give you more responsibility, but we haven’t funded you as we should, and it seems the money goes someplace else,” said Rep. Young.

Other topics covered at the hearing included the diversity of the Guard, hurricane response, and Coast Guard operations in the U.S. Caribbean and the U.S. arctic. Watch the hearing here.

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