By Calvin Biesecker
The Coast Guard needs an annual appropriation of about $2 billion for acquisition projects to properly recapitalize its assets, the service’s acquisition chief said last week.
“We probably need close to $2 billion to recapitalize the Coast Guard at the speed we’re seeing our assets deteriorate,” Rear Adm. Gary Blore, assistant commandant for Acquisition, told Defense Daily in an interview last Friday.
The Coast Guard’s acquisition budget for FY ’09 is $1.5 billion, which is for 22 projects. The majority of the budget, a tad over $1 billion, is for the Deepwater modernization program that consists of 15 projects to upgrade the air, sea and C4ISR assets of the Coast Guard.
A key reason for the Coast Guard needing about $500 million more a year for its acquisition budget is the fact that its legacy assets, in particular its fleet of High Endurance Cutters, are “wearing out faster than we anticipated,” Blore said. He cited “serious mechanical and wastage issues” that need to be addressed with these vessels.
One of the “best ways” to address the problems with the legacy assets is to be able to fund some of the new procurements at a faster pace, Blore said.
Right now the acquisition budget only permits the purchase of one 418-foot National Security Cutter (NSC) annually. The Coast Guard is preparing to let a proposal to Northrop Grumman [NOC] for the fourth NSC, which is expected to come in over the current $353.7 million construction budget for that vessel in FY ’09.
The Coast Guard plans to purchase eight NSCs and then begin acquiring medium-endurance vessels called the Offshore Patrol Cutter (OPC). The service plans to buy 25 OPCs.
Given that there are five more NSCs to build at one a year, and then probably being able to afford at most two OPCs per year, that’s another 17 years to recapitalize the surface fleet, Blore said.
“That’s a long time to keep the legacy assets running,” Blore said.
If Blore had the $2 billion to manage, he said he would keep NSC production on time and possibly even finish the program a year sooner, and then move right into OPC production. The minimum production rate on the OPCs would be two per year, he said.
One top of all that, Blore said he likes the idea of building six Fast Response Cutters per year. Last month the Coast Guard awarded a contract to Bollinger Shipyards for the construction of the first 153-foot Sentinel class FRC (Defense Daily, Sept. 29). The potential $1.5 billion contract contains options for building four to six patrol boats per year for between 24 and 34 vessels.
A bigger acquisition budget would make it easier to build six FRCs per year, or to buy more HC-144 Ocean Sentry maritime patrol aircraft sooner, Blore said. “So there’s a lot of benefits,” he noted of increased acquisition funding. The HC-144 medium-range surveillance aircraft is supplied by the European Aeronautic Defence and Space Co. and then missionized by Lockheed Martin [LMT].
Blore didn’t say if the Coast Guard will be making a pitch for a larger acquisition budget in the FY ’10 funding request.
The service’s acquisition budget has been creeping up the past few years but Blore indicated that in addition to the higher than expected costs needed to maintain legacy assets, other costs are rising too. The Coast Guard cites higher labor and commodity prices, as well as a weak dollar in the United States versus the euro, for why the fourth NSC will cost more than planned (Defense Daily, Oct. 7).