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 8 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 FY2014 budget requests a total of $716 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, the fourth and fifth are under construction, and the sixth has been funded. The Coast Guard’s proposed FY2014 budget requests $616 million in acquisition funding for the seventh NSC; it does not request any funding for long lead time materials (LLTM) for the eighth NSC, which is scheduled to be procured in FY2015.

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 FY2014 budget requests $25 million in acquisition funding 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, and the first five had been delivered as of March 25, 2013. The Coast Guard’s proposed FY2014 budget requests $75 million in acquisition funding for two FRCs and associated program costs. Potential oversight issues for Congress regarding the NSC, OPC, and FRC programs include the following:

• the impact on the NSC, OPC, and FRC programs of the March 1, 2013, sequester on FY2013 funding; 
• the potential impact on the NSC, OPC, and FRC programs of a possible sequester on FY2014 funding that might occur in late 2013 or early 2014 under the terms of the Budget Control Act of 2011; 
• the adequacy of the Coast Guard’s planned NSC, OPC, and FRC procurement quantities; 
• the lack of a request in the Coast Guard’s proposed FY2014 budget for acquisition funding for long lead time materials (LLTM) to support the procurement of an eighth NSC in FY2015; 
• the Coast Guard’s FY2014 request for acquisition funding for two (rather than six) FRCs; 
• delays, cost growth, and testing issues in the FRC program; 
• the $25 million in acquisition funding requested for FY2014 for the OPC program, which is one-half of the $50 million that was projected for FY2014 under the Coast Guard’s FY2013 budget submission; 
• the Coast Guard’s acquisition strategy for the OPC;
• the potential for using multiyear procurement (MYP) in acquiring new cutters; 
• 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: June 7, 2013
Number of Pages: 57
Order Number: R42567
Price: $29.95

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