The following is the July 10, 2023, Congressional Research Service report, Coast Guard Cutter Procurement: Background and Issues for Congress.
From the report
The Coast Guard’s program of record (POR), which dates to 2004, calls for procuring 8 National Security Cutters (NSCs), 25 Offshore Patrol Cutters (OPCs), and 65 Fast Response Cutters (FRCs) as replacements for 90 aging Coast Guard high-endurance cutters, medium-endurance cutters, and patrol craft.
National Security Cutters are the Coast Guard’s largest and most capable general-purpose cutters; they are replacing the Coast Guard’s 12 Hamilton-class high-endurance cutters. NSCs have an estimated average procurement cost of about $670 million per ship. Congress has fully funded the procurement of 11 NSCs—three more than the 8 in the Coast Guard’s POR—including the 10th and 11th in FY2018, which (like the 9th NSC) were not requested by the Coast Guard. The Coast Guard’s proposed FY2024 budget requests $17.1 million in procurement funding for the NSC program for post-delivery activities for the 10th and 11th NSCs, and for class-wide activities. Nine NSCs have entered service; the 10th is scheduled for delivery in 2023.
Offshore Patrol Cutters are intended to replace the Coast Guard’s 29 aged medium-endurance cutters. Coast Guard officials describe the OPC program and the Polar Security Cutter (PSC) program (which is covered in another CRS report) as the service’s highest acquisition priorities. The first four OPCs are being built by Eastern Shipbuilding Group (ESG) of Panama City, FL. The Coast Guard held a full and open competition for a new contract to build the next 11 OPCs (numbers 5 through 15). On June 30, 2022, the Coast Guard announced that it had awarded a fixed-price incentive (firm target) contract to Austal USA of Mobile, AL, to produce up to 11 offshore patrol cutters (OPCs). The Coast Guard’s proposed FY2024 budget requests $579.0 million in procurement funding for the construction of the sixth OPC, the procurement of long lead time materials (LLTM) for the seventh OPC, and other program costs.
One oversight issue for Congress concerns substantial cost growth and schedule delays in the OPC program. A June 2023 Government Accountability Office (GAO) report on the OPC program states: “The OPC’s total acquisition cost estimate increased from $12.5 billion to $17.6 billion between 2012 and 2022. The program attributes the 40 percent increase to many factors, including restructuring the stage 1 contract [for OPCs 1 through 4] and recompeting the stage 2 requirement [for OPCs 5 through 15] in response to a disruption caused by Hurricane Michael, and increased infrastructure costs for homeports and facilities, among other things. In addition, the program incurred a 1.5-year delay in the delivery of the first four OPCs due to Hurricane Michael and issues related to manufacturing the cutter’s propulsion system. GAO also found indicators that the shipbuilder’s significant level of complex, uncompleted work may lead to further delays.”
Fast Response Cutters are considerably smaller and less expensive than OPCs; they are replacing the Coast Guard’s 49 aging Island-class patrol boats. The Coast Guard’s FY2020 budget submission estimated the total acquisition cost of the 58 cutters intended for domestic use at $3.748 billion, or an average of about $65 million per cutter. A total of 65 FRCs have been procured through FY2023. As of July 10, 2023, 52 FRCs have been commissioned into service. The Coast Guard’s proposed FY2024 budget requests $20.0 million in procurement funding for the FRC program; this request does not include funding for procuring any additional FRCs. The Coast Guard’s FY2024 Unfunded Priorities List (UPL) includes, as one of its items, an unfunded priority for procuring four more FRCs (which would be the 66th through 69th in the program) for a combined procurement cost of $400.0 million, or an average of $100 million per cutter, to provide increased Coast Guard presence and engagement with allied and partner countries in the Indo-Pacific region.
Download the document here.