Coast Guard Cutter Procurement: Background and Issues for Congress

The Coast Guard's acquisition 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 Coast Guard's proposed FY2017 budget requests a total of $467 million in acquisition funding for the NSC, OPC, and FRC programs. NSCs are the Coast Guard's largest and most capable general-purpose cutters. They have an estimated average procurement cost of about $695 million per ship. The first five are now in service. The sixth was delivered on December 16, 2016, and was scheduled to be commissioned into service on April 1, 2017. The seventh and eighth are under construction and scheduled for delivery in 2018 and 2019, respectively. A ninth NSC, which was not requested by the Coast Guard, was funded by Congress in FY2016; the Coast Guard awarded a production contract for the ship on December 30, 2016. The Coast Guard's proposed FY2017 budget requests $127 million in acquisition funding for the NSC program for postdelivery activities on NSCs 4 through 8, program close-out, follow-on test and evaluation, program support, and procurement of small unmanned aerial systems (UAS) for NSCs. OPCs are to be smaller, less expensive, and in some respects less capable than NSCs. They have an estimated average procurement cost of about $421 million per ship. The first OPC is to be procured in FY2018. Three shipyards-Bollinger Shipyards of Lockport, LA, Eastern Shipbuilding Group of Panama City, FL, and General Dynamics Bath Iron Works (GD/BIW) of Bath, ME-were competing for the contract to build the first 9 to 11 ships in the class. On September 15, 2016, the Coast Guard announced that it was awarding the contract to Eastern Shipbuilding. The Coast Guard's proposed FY2017 budget requests $100 million in acquisition funding for the OPC program for technical review of detail design (DD) deliverables and procurement of long lead time material (LLTM) for the first ship. FRCs are considerably smaller and less expensive than OPCs. They have an estimated average procurement cost of about $65 million per boat. A total of 38 have been funded through FY2016. The 19th was commissioned into service on November 19, 2016. The Coast Guard's proposed FY2017 budget requests $240 million in acquisition funding for the FRC program for the construction of four more FRCs. The NSC, OPC, and FRC programs pose several issues for Congress, including the following: whether to fund the acquisition of a 10th NSC in FY2017; whether to fund the acquisition of four FRCs in FY2017, as requested, or some other number, such as six, which was the number projected for FY2017 under the Coast Guard's FY2016 budget submission; whether to use annual or multiyear contracting for procuring FRCs; whether to use annual or multiyear contracting for procuring OPCs; planned procurement quantities for NSCs, OPCS, and FRCs; the cost, design, and acquisition strategy for the OPC; initial testing of the NSC; and rotational crewing of the NSC. Congress's decisions on these programs could substantially affect Coast Guard capabilities and funding requirements, and the U.S. shipbuilding industrial base.