Case Study 14: From Coast Guard, GAO-11-743, July 28, 2011

The Deepwater Program—the largest acquisition program in the Coast Guard’s history—began in 1996 to recapitalize the Coast Guard’s operational fleet, including ships, aircraft, and other supporting capabilities. In 2007, the Coast Guard took over the lead systems integrator role from the Integrated Coast Guard Systems, establishing a $24.2 billion overall program baseline.

We reviewed key Coast Guard documents and applied criteria from the GAO Cost Guide. We found that the estimated total acquisition cost of the Deepwater Program, based on approved program baselines as of May 2011, could have been as much as approximately $29.3 billion, or about $5 billion more than the $24.2 billion baseline DHS approved in 2007. However, we also found that two factors precluded a solid understanding of the program’s true cost and schedule: (1) the Coast Guard had not yet developed revised baselines for all assets, including the Offshore Patrol Cutter—the largest cost driver in the program—and (2) the Coast Guard’s most recent capital investment plan indicated further cost and schedule changes not yet reflected in the asset baselines. We also found that the reliability of the cost estimates and schedules for selected assets were undermined because the Coast Guard did not follow key best practices for developing them.