Case Study 15, 17: From Coast Guard Acquisitions, GAO-18-600, September 4, 2018

To maintain heavy polar icebreaking capability, the Coast Guard—a component of the Department of Homeland Security (DHS) — and the Navy are collaborating to acquire up to three new heavy polar icebreakers through an integrated program office. The Navy planned to award a contract in 2019. GAO has found that before committing resources, successful acquisition programs begin with sound business cases, which include plans for a stable design, mature technologies, a reliable cost estimate, and a realistic schedule.

GAO found that the Coast Guard did not have a sound business case in March 2018, when it established the cost, schedule, and performance baselines for its heavy polar icebreaker acquisition program, because of risks in four key areas:

Design. The Coast Guard set program baselines before conducting a preliminary design review, which put the program at risk of having an unstable design, thereby increasing the program’s cost and schedule risks. While setting baselines without a preliminary design review is consistent with DHS’s current acquisition policy, it is inconsistent with acquisition best practices. Based on GAO’s prior recommendation, DHS was currently evaluating its policy to better align technical reviews and acquisition decisions.

Technology. The Coast Guard intended to use proven technologies for the program, but did not conduct a technology readiness assessment to determine the maturity of key technologies prior to setting baselines. Coast Guard officials indicated such an assessment was not necessary because the technologies the program planned to employ had been proven on other icebreaker ships. However, according to best practices, such technologies can still pose risks when applied to a different program or operational environment, as in this case. Without such an assessment, the program’s technical risk was underrepresented.

Cost. The life cycle cost estimate that informed the program’s $9.8 billion cost baseline substantially met GAO’s best practices for being comprehensive, well documented, and accurate, but only partially met best practices for being credible. The cost estimate did not quantify the range of possible costs over the entire life of the program. As a result, the cost estimate was not fully reliable and may have underestimated the total funding needed for the program.

Schedule. The Coast Guard’s planned delivery dates were not informed by a realistic assessment of shipbuilding activities, but rather driven by the potential gap in icebreaking capabilities once the Coast Guard’s only operating heavy polar icebreaker—the Polar Star—reaches the end of its service life.

GAO’s analysis of selected lead ships for other shipbuilding programs found the icebreaker program’s estimated construction time of 3 years was optimistic. As a result, the Coast Guard was at risk of not delivering the icebreakers when promised and the potential gap in icebreaking capabilities could have widened.

GAO reported its findings on September 4, 2018 in Coast Guard Acquisitions: Polar Icebreaker Program Needs to Address Risks before Committing Resources, GAO-18-600.