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Thursday, March 21, 2013

Coast Guard Cutter Procurement: Background and Issues for Congress

Ronald O'Rourke
Specialist in Naval Affairs

The Coast Guard’s program of record (POR) calls for procuring eight National Security Cutters (NSCs), 25 Offshore Patrol Cutters (OPCs), and 58 Fast Response Cutters (FRCs) as replacements for 90 aging Coast Guard cutters and patrol craft. The NSC, OPC, and FRC programs have a combined estimated acquisition cost of about $21.1 billion, and the Coast Guard’s proposed FY2013 budget requests a total of $852 million in acquisition funding for the three programs.

NSCs are the Coast Guard’s largest and most capable general-purpose cutters. They have an estimated average procurement cost of about $684 million per ship. The first three are now in service, and the fourth and fifth are under construction. The Coast Guard’s proposed FY2013 budget requests $683 million for the NSC program, including $658 million to complete the funding for the sixth NSC.

OPCs are to be smaller, less expensive, and in some respects less capable than NSCs. They have an estimated average procurement cost of about $484 million per ship. The first OPC is to be procured in FY2017. The Coast Guard’s proposed FY2013 budget requests $30 million for the OPC program.

FRCs are considerably smaller and less expensive than OPCs. They have an estimated average procurement cost of about $73 million per boat. A total of 18 have been funded through FY2012. The first entered service on April 14, 2012; the second was delivered to the Coast Guard on May 26, 2012; and the third is scheduled to be delivered by the end of FY2012. The Coast Guard’s proposed FY2013 budget requests $139 million for the FRC program.

Potential oversight issues for Congress regarding the NSC, OPC, and FRC programs include the following:

  • the absence of funding in the Coast Guard’s FY2013 five-year (FY2013-FY2017) capital investment plan for the seventh and eighth NSCs; 
  • hull corrosion and leaks in the third NSC; 
  • the Coast Guard’s proposal to restructure the use of FY2012 FRC acquisition funding so as to procure four FRCs in FY2012 rather than six, and to defer the procurement of the other two FY2012-funded FRCs to FY2013; 
  • delays, cost growth, and testing issues in the FRC program; 
  • the Coast Guard’s acquisition strategy for the OPC; 
  • the potential for using multiyear procurement (MYP) in acquiring new cutters; 
  • the adequacy of the Coast Guard’s planned NSC, OPC, and FRC procurement quantities; 
  • whether 8 NSCs, 25 OPCs, and 58 FRCs is the best mix of cutters that could be procured for roughly the same total amount of acquisition funding; and 
  • the adequacy of information available to Congress to support review and oversight of Coast Guard procurement programs, including cutter procurement programs.

Date of Report: March 15, 2013
Number of Pages: 66
Order Number: R42567
Price: $29.95

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