Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress

Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress

Updated November 19, 2024

Congressional Research Service

https://crsreports.congress.gov

RL34391

Congressional Research Service

SUMMARY

Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress

Required number of polar icebreakers. A 2023 Coast Guard fleet mix analysis concluded that the service will require a total of eight to nine polar icebreakers, including four to five heavy polar icebreakers and four to five medium polar icebreakers, to perform its polar (i.e., Arctic and Antarctic) missions in coming years.

Current operational polar icebreaker fleet. The operational U.S. polar icebreaking fleet currently consists of one heavy polar icebreaker, Polar Star, and one medium polar icebreaker, Healy. A second Coast Guard heavy polar icebreaker, Polar Sea. Polar Sea, suffered an engine casualty in June 2010 and has been nonoperational since then. Polar Star and Polar Sea entered service in 1976 and 1977, respectively, and are now well beyond their originally intended 30-year service lives. The Coast Guard plans to extend Polar Star’s service life until the delivery of at least the second Polar Security Cutter (PSC; see next paragraph).

Polar Security Cutter (PSC). The Coast Guard Polar Security Cutter (PSC) program aims to acquire four or five new PSCs (i.e., heavy polar icebreakers), to be followed at some later point by the acquisition of new Arctic Security Cutters (ASCs) (i.e., medium polar icebreakers). The Coast Guard in 2021 estimated PSC procurement costs in then-year dollars as $1,297 million (i.e., about $1.3 billion) for the first ship, $921 million for the second ship, and $1,017 million (i.e., about $1.0 billion) for the third ship, for a combined estimated cost of $3,235 million (i.e., about $3.2 billion). The PSC program has received a total of about $1,731.8 million in procurement funding through FY2024. The Coast Guard’s proposed FY2025 budget requests no procurement funding for the PSC program. One oversight issue concerns the accuracy of the PSC’s estimated procurement cost, given the PSC’s size and internal complexity as well as cost growth in other Navy and Coast Guard shipbuilding programs. If substantial cost growth occurs in the PSC program, it could raise a question regarding whether to grant some form of contract relief to the PSC shipbuilder. Another oversight issue concerns the delivery date for the first PSC: the Coast Guard originally aimed to have the first PSC delivered in 2024, but the ship’s estimated delivery date has been delayed repeatedly and the Coast Guard now expects it to be delivered in 2030.

Commercially available polar icebreaker (CAPI). The Coast Guard’s proposed FY2024 budget requested, and the FY2024 Department of Homeland Security (DHS) Appropriations Act (Division C of H.R. 2882/P.L. 118-47 of March 23, 2024) provided, $125.0 million in procurement funding for the purchase of an existing commercially available polar icebreaker (CAPI) that would be modified to become a Coast Guard medium polar icebreaker. The ship being purchased and modified is Aiviq, a U.S.-registered ship that was originally built to serve as an Arctic oil-exploration support ship, and which has an icebreaking capability sufficient for the ship to serve following modification as a Coast Guard medium polar icebreaker. The Coast Guard states that the ship will enter Coast Guard service by the end of calendar 2024. The Coast Guard’s proposed FY2025 budget requests no procurement funding for the CAPI program. The Coast Guard’s FY2025 Unfunded Priorities List (UPL) includes an item for $25.0 million in procurement funding for the ship.

Great Lakes icebreaker (GLIB). The Coast Guard’s FY2024 budget initiated a program for procuring a new Great Lakes icebreaker (GLIB) that would have capabilities similar to those of Mackinaw, the Coast Guard’s existing heavy GLIB. The FY2024 DHS Appropriations Act (Division C of H.R. 2882/P.L. 118-47 of March 23, 2024) provided $20.0 million in procurement funding for the GLIB program. The Coast Guard’s proposed FY2025 budget requests no procurement funding for the program. The Coast Guard’s FY2025 UPL includes an item for $25.0 million in procurement funding for the program.

RL34391

November 19, 2024

Ronald O'Rourke Specialist in Naval Affairs

Coast Guard Polar Security Cutter

Congressional Research Service

Contents

Introduction ..................................................................................................................................... 1 Background ..................................................................................................................................... 1

Missions of Coast Guard Polar Icebreakers .............................................................................. 1

Statutory Duties and Missions ............................................................................................ 1 Multiple Missions (Not Just Icebreaking) ........................................................................... 2

Polar (Not Just Arctic) Operations ...................................................................................... 2

Current Coast Guard Polar Icebreakers ..................................................................................... 3

Required Numbers of Coast Guard Polar Icebreakers .............................................................. 4 Coast Guard Polar Icebreaker Programs ................................................................................... 5

Polar Security Cutters (PSCs) ............................................................................................. 5

Commercially Available Polar Icebreaker (CAPI) ............................................................ 13

Service Life Extension for Polar Star .............................................................................. 14

Trilateral Polar Icebreaker Collaboration Effort (ICE Pact) ................................................... 15

July 2024 Announcement of ICE Pact .............................................................................. 15 November 2024 MOU ...................................................................................................... 16

Coast Guard Great Lakes Icebreakers ..................................................................................... 16

Current Fleet ..................................................................................................................... 16 New Great Lakes Icebreaker (GLIB) ................................................................................ 17

Issues for Congress ........................................................................................................................ 20

ICE Pact Implementation ........................................................................................................ 20 PSC Program: Cost Growth .................................................................................................... 22

Increase in Estimated Procurement Costs Since April 2019 Contract Award ................... 22

Factors that Could Further Increase Estimated Procurement Costs .................................. 22

CBO 2024 Cost Estimates ................................................................................................ 25

PSC Program: Schedule Delay ................................................................................................ 26

PSC Program: Technical Risk ................................................................................................. 28

Parent Design and PSC Design ......................................................................................... 28

May 2024 GAO Testimony ............................................................................................... 29

July 2023 GAO Testimony ............................................................................................... 29 July 2023 GAO Report ..................................................................................................... 31 April 2023 GAO Report.................................................................................................... 32

PSC Program: Contract with Options vs. Block Buy Contract ............................................... 33

PSCs and ASCs: Using a Common Design ............................................................................. 37

PSCs and ASCs: Using a Foreign Shipyard ............................................................................ 38

Overview ........................................................................................................................... 38

Laws Relating to Building Ships in Foreign Shipyards .................................................... 39

Trilateral Polar Icebreaker Collaboration Effort (ICE Pact) ............................................. 40

CAPI (Aiviq): Total Cost to Purchase and Modify .................................................................. 40

Legislative Activity for FY2025 .................................................................................................... 40

Summary of Appropriation Action on FY2025 Funding Request ........................................... 40

FY2025 DHS Appropriations Act (H.R. 8752) ....................................................................... 41

House ................................................................................................................................ 41

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Figures

Figure 1. Rendering of Halter Marine Design for PSC ................................................................... 7 Figure 2. Model of Halter Marine Design for PSC ......................................................................... 8 Figure 3. Rendering of Halter Marine Design for PSC ................................................................... 8 Figure 4. Rendering of Halter Marine Design for PSC ................................................................... 9 Figure 5. Rendering of Halter Marine Design for PSC ................................................................. 10 Figure 6. Rendering of SDC Concept Design for Polarstern II ..................................................... 11

Figure 7. Great Lakes Icebreaker Mackinaw ................................................................................. 17

Figure 8. CBO Cost Estimates for PSC Program .......................................................................... 26

Figure A-1. Polar Star and Polar Sea ........................................................................................... 43 Figure A-2. Polar Sea .................................................................................................................... 44

Figure A-3. Healy .......................................................................................................................... 44 Figure A-4. Nathaniel B. Palmer ................................................................................................... 46

Figure A-5. Laurence M. Gould .................................................................................................... 47 Figure A-6. Sikuliaq ...................................................................................................................... 47 Figure A-7. Commercial Ship Aiviq .............................................................................................. 49 Figure A-8. Commercial Ship Aiviq .............................................................................................. 49

Tables

Table 1. Estimated PSC Procurement Costs as of 2021 .................................................................. 6 Table 2. Procurement Funding for PSC Program Through FY2024 ............................................. 13 Table 3. Summary of Congressional Appropriations Action on FY2025 Procurement

Funding Request ......................................................................................................................... 41

Table A-1. Coast Guard and NSF Polar Ships ............................................................................... 48

Table B-1. Major Polar Icebreakers as of April 4, 2022 ................................................................ 51

Appendixes

Appendix A. Current U.S. Polar Icebreakers and Polar Research Ships ....................................... 42

Appendix B. Required Numbers of U.S. Polar Icebreakers .......................................................... 50

Contacts

Author Information ........................................................................................................................ 71

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Introduction

This report provides background information and issues for Congress three Coast Guard icebreaker acquisition programs:

• the Polar Security Cutter (PSC) program—a program for acquiring four to five new heavy polar icebreakers to be known as PSCs;

• the commercially available polar icebreaker (CAPI) program—a program to purchase an existing CAPI that would be modified to become a Coast Guard polar icebreaker; and

• the Great Lakes icebreaker (GLIB) program—a program to procure a new heavy GLIB to augment the Coast Guard’s current GLIB fleet.

The Coast Guard’s proposed FY2025 budget requests no procurement funding for the PSC, CAPI, and GLIB programs. The Coast Guard’s FY2025 Unfunded Priorities list (UPL) includes an item for $25.0 million in procurement funding for the CAPI program and another item for $25.0 million in procurement funding for the GLIB program.

The issue for Congress is whether to approve, reject, or modify the Administration’s procurement funding requests and acquisition strategies for the PSC, CAPI, and GLIB programs.

On May 7, 2024, CRS provided testimony on Coast Guard ship acquisition programs, particularly the PSC program, to the House Homeland Security Committee subcommittee on Transportation and Maritime Security.1 Separate CRS reports cover acquisition of general-purpose cutters for the Coast Guard2 and waterways commerce cutters for the Coast Guard.3 Another CRS report provides an overview of various issues relating to the Arctic.4

Background

Missions of Coast Guard Polar Icebreakers

Statutory Duties and Missions

The permanent statute that sets forth the Coast Guard’s primary duties—14 U.S.C. §102—states that among other things, the Coast Guard shall (emphasis added) “develop, establish, maintain, and operate, with due regard to the requirements of national defense, aids to maritime navigation, icebreaking facilities, and rescue facilities for the promotion of safety on, under, and over the high seas and waters subject to the jurisdiction of the United States,” and “pursuant to international agreements, develop, establish, maintain, and operate icebreaking facilities on, under, and over waters other than the high seas and waters subject to the jurisdiction of the United States.”5

1 CRS Testimony TE10100, Building the Fleet: Assessing the Department of Homeland Security’s Role in the United States Coast Guard’s Acquisitions Process, by Ronald O'Rourke.

2 CRS Report R42567, Coast Guard Cutter Procurement: Background and Issues for Congress, by Ronald O'Rourke.

3 CRS In Focus IF11672, Coast Guard Waterways Commerce Cutter (WCC) Program: Background and Issues for Congress, by Ronald O'Rourke.

4 CRS Report R41153, Changes in the Arctic: Background and Issues for Congress, coordinated by Ronald O'Rourke.

5 14 U.S.C. §102(4) and §102(5), respectively. This statute was previously 14 U.S.C. §2; it was renumbered as 14 (continued...)

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In addition, Section 888(a) of the Homeland Security Act of 2002 (H.R. 5005/P.L. 107-296 of November 25, 2002)—the law that established the Department of Homeland Security (DHS) and transferred the Coast Guard from the Department of Transportation to DHS—sets forth 11 specific missions for the Coast Guard (often referred to as the Coast Guard’s 11 statutory missions), including the mission of “ice operations.”6

Multiple Missions (Not Just Icebreaking)

The Coast Guard’s polar icebreakers do not simply break ice—they are multimission cutters7 that conduct a variety of other operations that are conducted in lower-latitude waters by the Coast Guard’s general-purpose cutters. U.S. polar ice operations conducted in large part by the Coast Guard’s polar icebreakers support 9 of the Coast Guard’s 11 statutory missions.8 The roles of U.S. polar icebreakers can be summarized as follows:

• conducting and supporting scientific research in the Arctic and Antarctic;

• defending U.S. sovereignty in the Arctic by helping to maintain a U.S. presence in U.S. territorial waters in the region;

• defending other U.S. interests in polar regions, including economic interests in waters that are within the U.S. exclusive economic zone (EEZ) north of Alaska;

• monitoring sea traffic in the Arctic, including ships bound for the United States; and

• conducting other typical Coast Guard missions (such as search and rescue, law enforcement, and protection of marine resources) in Arctic waters, including U.S. territorial waters north of Alaska.9

Polar (Not Just Arctic) Operations

The Coast Guard’s large icebreakers are called polar icebreakers rather than Arctic icebreakers because they perform missions in both the Arctic and Antarctic. Operations to support National Science Foundation (NSF) research activities in both polar regions account for a significant portion of U.S. polar icebreaker operations.

Supporting NSF research in the Antarctic focuses on performing an annual mission, called Operation Deep Freeze (ODF), to break through Antarctic sea ice so as to reach and resupply McMurdo Station, the large U.S. Antarctic research station located on the shore of McMurdo Sound, near the Ross Ice Shelf. The Coast Guard stated in 2018 that Polar Star, the Coast Guard’s only currently operational heavy polar icebreaker, “spends the [northern hemisphere]

U.S.C. §102 by Section 103 of the Frank LoBiondo Coast Guard Authorization Act of 2018 (S. 140/P.L. 115-282 of December 4, 2018). (Title I of P.L. 115-282, consisting of Sections 101-124, specified a general reorganization of Title 14.)

6 The 11 missions set forth in Section 888(a) are marine safety; search and rescue; aids to navigation; living marine resources (fisheries law enforcement); marine environmental protection; ice operations; ports, waterways and coastal security; drug interdiction; migrant interdiction; defense readiness; other law enforcement.

7 Cutters are commissioned Coast Guard vessels greater than 65 feet in length.

8 For a list of the 11 missions, see footnote 6. The two statutory missions not supported by polar ice operations are illegal drug interdiction and undocumented migrant interdiction. (Department of Homeland Security, Polar Icebreaking Recapitalization Project Mission Need Statement, Version 1.0, approved by DHS June 28, 2013, p. 10.)

9 This passage, beginning with “The roles of ... ,” originated in an earlier iteration of this CRS report and was later transferred by the Government Accountability Office (GAO) with minor changes to GAO, Coast Guard[:]Efforts to Identify Arctic Requirements Are Ongoing, but More Communication About Agency Planning Efforts Would Be Beneficial, GAO-10-870, September 2010, p. 53.

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winter [i.e., the southern hemisphere summer] breaking ice near Antarctica in order to refuel and resupply McMurdo Station. When the mission is complete, the Polar Star returns to dry dock [in Seattle] in order to complete critical maintenance and prepare it for the next ODF mission. Once out of dry dock, it’s back to Antarctica, and the cycle repeats itself.”10 In terms of the maximum thickness of the ice to be broken, the annual McMurdo resupply mission generally poses the greatest icebreaking challenge for U.S. polar icebreakers, though Arctic ice can frequently pose its own significant icebreaking challenges for U.S. polar icebreakers. The Coast Guard’s medium polar icebreaker, Healy, spends most of its operational time in the Arctic supporting NSF research activities and performing other operations.

Although polar ice is diminishing due to climate change, observers generally expect that this development will not eliminate the need for U.S. polar icebreakers, and in some respects might increase mission demands for them. Even with the diminishment of polar ice, there are still significant ice-covered areas in the polar regions, and diminishment of polar ice could lead in coming years to increased commercial ship, cruise ship, and naval surface ship operations, as well as increased exploration for oil and other resources, in the Arctic—activities that could require increased levels of support from polar icebreakers, particularly since waters described as “ice free” can actually still have some amount of ice.11 A 2007 National Research Council report stated that changing ice conditions in Antarctic waters had made the McMurdo resupply mission more challenging since 2000.12 The Coast Guard’s Arctic strategic outlook document, released in April 2019, states

In order to prosecute its missions in the Arctic, the Coast Guard must fully understand and operate freely in this vast and unforgiving environment. Effective capability requires sufficient heavy icebreaking vessels, reliable high-latitude communications, and comprehensive Maritime Domain Awareness. In order to respond to crises in the Arctic, our Nation must also muster adequate personnel, aviation, and logistics resources in the region. The Coast Guard is the sole provider and operator of the U.S. polar capable fleet but currently does not have the capability or capacity to assure access in the high latitudes. Closing the gap requires persistent investment in capabilities and capacity for polar operations, including the Polar Security Cutter.13

Current Coast Guard Polar Icebreakers

The operational U.S. polar icebreaking fleet currently consists of two ships—one heavy polar icebreaker, Polar Star (Figure A-1 and Figure A-2 in Appendix A), and one medium polar icebreaker, Healy (Figure A-3 in Appendix A). In addition to Polar Star, the Coast Guard has a second heavy polar icebreaker, Polar Sea. Polar Sea, however, suffered an engine casualty in June 2010 and has been nonoperational since then.

Polar Star and Polar Sea entered service in 1976 and 1977, respectively, and are now well beyond their originally intended 30-year service lives. The Coast Guard in recent years has invested millions of dollars to overhaul, repair, and extend the service life of Polar Star, but as a result of its advancing age, the ship’s material condition has nevertheless become increasingly

10 NyxoLyno Cangemi, “Coast Guard Icebreaker Crew Completes Second Arctic Mission; U.S. Interests in Arctic Domain Depends [sic] on Fleet Recapitalization,” DVIDS (Defense Visual Information Distribution System), October 19, 2018.

11 For more on changes in the Arctic due to diminishment of Arctic ice, see CRS Report R41153, Changes in the Arctic: Background and Issues for Congress, coordinated by Ronald O'Rourke.

12 National Research Council, Polar Icebreakers in a Changing World, An Assessment of U.S. Needs, Washington, 2007, pp. 6-7, 14, 63.

13 United States Coast Guard, Arctic Strategic Outlook, April 2019, p. 6.

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fragile, if not precarious. During its annual deployments to McMurdo Station in Antarctica, shipboard equipment frequently breaks, and shipboard fires have occurred.14 Replacements for many of the ship’s components are no longer commercially available. To help keep Polar Star operational, the Coast Guard is using Polar Sea as a source of replacement parts.

In February 2023, the Coast Guard issued a request for information (RFI) from companies interested in conducting a service life extension project (SLEP) for Healy that would begin in December 2025.15 Responses to the RFI were due by March 16, 2023.16

For additional background information on current U.S. polar icebreakers and polar research ships, see Appendix A.

Required Numbers of Coast Guard Polar Icebreakers

The Coast Guard testified in April, June, and November 2023 that a new Coast Guard fleet mix analysis concluded that the service will require a total of eight to nine polar icebreakers, including four to five heavy polar icebreakers and four to five medium polar icebreakers, to perform its polar (i.e., Arctic and Antarctic) missions in coming years.17 Prior to this new fleet mix analysis, the Coast Guard had stated that it would need at least six polar icebreakers, including three heavy polar icebreakers.

At a March 14, 2024, hearing before the Senate Armed Services Committee, Air Force General Gregory M. Guillot, the Commander of the U.S. Northern Command (USNORTHCOM), when asked to comment about numbers of U.S. icebreakers for supporting U.S. operations in the Arctic in a context, stated that “we’re severely outnumbered,” and that “we do appreciate that the Coast Guard is—is procuring more icebreakers. But even with those, we will be severely outnumbered. And that does limit our freedom of maneuver in that region.”18

For additional background information on required numbers of U.S. polar icebreakers, see Appendix B.

14 See, for example, Richard Read, “Meet the Neglected 43-Year-Old Stepchild of the U.S. Military-Industrial Complex,” Los Angeles Times, August 2, 2019; Melody Schreiber, “The Only Working US Heavy Icebreaker Catches Fire Returning from Antarctica,” Arctic Today, March 2, 2019; Calvin Biesecker, “Fire Breaks Out on Coast Guard’s Aging, and Only, Heavy Icebreaker,” Defense Daily, March 1, 2019.

15 The project is envisaged as being accomplished through five annual work periods, each beginning in December of a given year and ending in April of the following year, with the first period beginning in December 2025 and ending in April 2026, and the fifth period beginning in December 2029 and ending in April 2030.

16 See “Healy Service Life Extension Project (SLEP),” accessed November 19, 2024, at https://sam.gov/opp/ 63af5d5f7b9e492dbdc6b106210f5716/view.

17 Spoken testimony, as reflected in CQ hearing transcripts, of

• Admiral Linda L. Fagan, Commandant of the Coast Guard, at an April 18, 2023, hearing on the Coast Guard’s proposed FY2024 budget before the Coast Guard and Maritime Transportation subcommittee of the House Transportation and Infrastructure Committee, for the total figure of eight to nine polar icebreakers;

• Admiral Steven D. Poulin, Vice Commandant of the Coast Guard, at a June 21, 2023, hearing before the same subcommittee on the on the Coast Guard’s emerging challenges and statutory needs, again for the total figure of eight to nine polar icebreakers; and

• Vice Admiral Peter Gautier, Coast Guard Deputy Commandant for Operations, at a November 29, 2023, hearing before the House Homeland Security Committee on how U.S. Arctic strategy impacts homeland security, for both the total figure of eight to nine polar icebreakers and how that total includes four to five heavy polar icebreakers and four to five medium polar icebreakers.

18 CQ transcript of hearing. See also Ella Sherman, “The US Military Doesn’t Have the Icebreakers to Compete in the Arctic and Is ‘Severely Outnumbered’ by Russia, Commander Warns,” Business Insider, March 14, 2024.

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Coast Guard Polar Icebreaker Programs

Polar Security Cutters (PSCs)

Overview

The PSC program was initiated in the Coast Guard’s FY2013 budget submission, and envisages the acquisition of four to five new PSCs (i.e., heavy polar icebreakers), to be followed at some later point by the acquisition of new ASCs (i.e., medium polar icebreakers).

Program Name and Name of First Ship

The PSC program was previously known as the polar icebreaker (PIB) program. Changing the program’s name to the PSC program is intended to call attention to the fact that the Coast Guard’s polar icebreakers perform a variety of missions relating to national security, not just icebreaking.19 Although it is now called the PSC program, observers as a matter of convenience might refer to it as the polar icebreaker program.

On February 24, 2022, the Coast Guard announced that the first PSC will be named Polar Sentinel, and that the Coast Guard has candidate names in mind for the second and third PSCs.20

Home Port

On June 17, 2019, the Coast Guard announced that it intends to homeport its PSCs at Seattle, WA, where the Coast Guard’s current polar icebreakers are homeported.21

Coast Guard-Navy Integrated Program Office (IPO)

The PSC program is managed by a Coast Guard-Navy Integrated Program Office (IPO). A key aim in establishing the IPO was to permit the Navy to share its ship-procurement best practices with the Coast Guard so as to help the Coast Guard reduce the time and cost needed to design and procure the PSCs.

Lead Ship Delivery Date

The Coast Guard originally aimed to have the first PSC delivered in 2024, but the ship’s estimated delivery date has been delayed repeatedly, and the Coast Guard testified in November 2014 that it now expects the ship to be delivered in 2030.22

19 See, for example, Ben Werner and Sam LaGrone, “Coast Guard Renames New Icebreaker Program ‘Polar Security Cutter,’” USNI News, September 27, 2018. See also Sydney J. Freedberg Jr., “With Funding In Peril, Coast Guard Pushes Icebreaker as ‘Polar Security Cutter,’” Breaking Defense, October 29, 2018.

20 See, for example, Richard R. Burgess, “Commandant Names Future Polar Security Cutter ‘Polar Sentinel,’” Seapower, February 24, 2022.

21 See, for example, Ben Werner, “Coast Guard Polar Security Cutter Will Be Homeported in Seattle,” USNI News, June 17, 2019; Navy Times Staff, “Coast Guard Picks Homeport for New Icebreaker Fleet,” Navy Times, June 17, 2019.

22 See, for example, Malte Humpert, “Icebreaker ‘Aiviq’ to Join U.S. Coast Guard Before End of Year to Bolster Arctic Presence,” gCaptain, November 14, 2024; Cal Biesecker, “Coast Guard Expects DHS Approval Shortly To Begin Icebreaker Construction But Needs More Funding,” Defense Daily, November 14, 2024.

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Estimated Procurement Cost

As shown in Table 1, the Coast Guard in 2021 estimated PSC procurement costs in then-year dollars as $1,297 million (i.e., about $1.3 billion) for the first ship, $921 million for the second ship, and $1,017 million (i.e., about $1.0 billion) for the third ship, for a combined estimated cost of $3,235 million (i.e., about $3.2 billion).23 The shipbuilder’s contract-award costs for the ships, which relate to the shipbuilder’s portion of the total procurement cost of the ships, are discussed in the next section.

Table 1. Estimated PSC Procurement Costs as of 2021

(In millions of then-year dollars)

Cost element 1st PSC 2nd PSC 3rd PSC Total

Ship construction 899 612 605 2,116

Nonrecurring cost 155 0 0 155

Recurring cost 744 612 605 1,961

Other program costs, including GFE 322 232 333 887

Post-delivery costs 48 49 50 147

Costs for Navy-Type, Navy-Owned (NTNO) equipment 28 28 29 85

TOTAL 1,297 921 1,017 3,235

Source: U.S. Coast Guard email to CRS, March 26, 2024, which states that costs shown are from the PSC 2021 LCCE v3 (Life Cycle Cost Estimate, version 3). The Coast Guard stated in the email that the 2021 LCCE v3 is the Coast Guard’s current model for estimated PSC procurement costs. Notes: The nonrecurring cost of $155 million for the 1st PSC includes $118 million for detail design costs for the class and $37 million for initial spares and repair parts for the 1st PSC. GFE is government-furnished equipment, meaning equipment that the government procures directly from supplier firms, and then provides to the shipbuilder for incorporation into the ship.

Competition and Contract Award

On April 23, 2019, the Coast Guard-Navy Integrated Program Office for the PSC program awarded a $745.9 million fixed-price, incentive-firm contract for the detail design and construction (DD&C) of the first PSC to Halter Marine Inc. of Pascagoula, MS, a shipyard that was owned by Singapore Technologies (ST) Engineering. Halter Marine was the leader of one of three industry teams that competed for the DD&C contract; the other two bidders reportedly were Bollinger Shipyards of Lockport, Louisiana, and a partnership between Philly Shipyard of Philadelphia and Fincantieri/Marinette Marine, of Marinette, WI.24 The DD&C contract includes options for building the second and third PSCs. If both of these options are exercised, the total value of the contract would increase to $1,942.8 million (i.e., about $1.9 billion).25

23 A GAO report that was released on April 20, 2023, and that reports on the status of major DHS acquisition programs as of September 30, 2022, states that as of June 2022, the combined estimated procurement cost of the three PSCs was $2,789 million. (GAO, DHS Annual Assessment[:] Major Acquisition Programs Are Generally Meeting Goals, but Cybersecurity Policy Needs Clarification, GAO-23-106701, April 2023, p. 50.)

24 “Mississippi Shipyard Gets $746M Contract for Icebreaker,” Associated Press, April 23, 2019.

25 See Naval Sea Systems Command, “Polar Security Cutter Contract Awarded to Recapitalize Nation’s Arctic Capabilities,” April 23, 2019; Department of Defense, “Contracts for April 23, 2019” (Release No. CR-076-19); Sam LaGrone, “VT Halter Marine to Build New Coast Guard Icebreaker,” USNI News, April 23, 2019; Maria Armental, (continued...)

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The above figures of $745.9 million, $552.7 million, and $1,942.8 million cover only the shipbuilder’s portion of the PSCs’ total procurement cost; they do not include the cost of government-furnished equipment (or GFE, meaning equipment that the government purchases and then provides to the shipbuilder for incorporation into the ship), post-delivery costs, costs for Navy-specific equipment, or government program-management costs. On December 29, 2021, the Coast Guard exercised a $552.7 million fixed price incentive option to its contract with Halter Marine Inc. for the second PSC.26

In November 2022, ST Engineering sold Halter Marine to Louisiana-based Bollinger Shipyards. The former Halter Marine is now called Bollinger Mississippi Shipbuilding.27 The shipyard’s former name of Halter Marine occurs in the remainder of this report in connection with developments prior to November 2022.

Ship Design

Figure 1, Figure 2, Figure 3, Figure 4, and Figure 5 show renderings and a photograph of Halter Marine’s design for the PSC.

Figure 1. Rendering of Halter Marine Design for PSC

Source: Illustration accompanying Sam LaGrone, “UPDATED: VT Halter Marine to Build New Coast Guard Icebreaker,” USNI News, April 23, 2019, updated April 24, 2019. The caption to the illustration states “An artist’s rendering of VT Halter Marine’s winning bid for the U.S. Coast Guard Polar Security Cutter. VT Halter Marine image used with permission.”

“U.S. Orders First Heavy Icebreaking Vessel in Decades, as Rivals Expand Arctic Presence,” Wall Street Journal, April 23, 2019; “Mississippi Shipyard Gets $746M Contract for Icebreaker,” Associated Press, April 23, 2019.

26 U.S. Coast Guard, “Polar Security Cutter Integrated Program Office Exercises Option for Second Cutter,” U.S. Coast Guard, December 30, 2021; Department of Defense, “Contracts for December 29, 2021.”

27 See, for example, Sam LaGrone, “Bollinger Closes $15M Acquisition of Halter Marine, New Name: ‘Bollinger Mississippi Shipbuilding,’” USNI News, November 14, 2022; Cal Biesecker, “Bollinger Completes Acquisition of Halter Marine,” Defense Daily, November 14, 2022; Justin Katz, “Why a Small Shipyard Merger Could Signal Bigger Problems for the US Military,” Breaking Defense, November 14, 2022; Sam LaGrone, “Updated: Bollinger to Buy Halter Marine Shipyard, Oversee Coast Guard Polar Security Cutter Program,” USNI News, November 6, 2022.

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The PSC program is using the parent design approach, meaning that the design of the PSC is based on an existing icebreaker design. A key aim in using the parent design approach is to reduce cost, schedule, and technical risk in the PSC program.

Figure 2. Model of Halter Marine Design for PSC

(Photograph of model displayed at 2021 trade show)

Source: Cropped version of photograph accompanying Peter Ong, “USGC’s Polar Security Cutters to Receive Mark 38 Mod 4 Guns,” Naval News, April 21, 2022. The article credits the photograph to Naval News at the Sea Air Space exposition 2021.

Figure 3. Rendering of Halter Marine Design for PSC

Source: Illustration posted by Robert A. Socha, Senior Vice President, Halter Marine, which was accessed May 6, 2019, at https://www.linkedin.com/feed/update/urn:li:activity:6526621529113976832.

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An April 25, 2019, press report states that “the Coast Guard and Navy said VT Halter Marine’s winning design for the new PSC “‘meets or exceeds all threshold requirements’ in the ship specification” for the PSC program.28

Figure 4. Rendering of Halter Marine Design for PSC

Source: Technology Associates, Inc. (cropped version of rendering posted at http://www.navalarchitects.us/ pictures.html, accessed November 19, 2024). A similar image was included in Halter Marine press release, “VT Halter Marine Awarded the USCG Polar Security Cutter,” May 7, 2019, which was accessed November 19, 2024, at https://web.archive.org/web/20190513165621/http://www.vthm.com/public/files/20190507.pdf.

A May 7, 2019, press release from Halter Marine about its design for the PSC (which Halter Marine updated on May 29 to provide a corrected figure for the design’s full load displacement) stated the following:

VT Halter Marine is teamed with Technology Associates, Inc. [TAI] as the ship designer and, for over two years, has participated in the U.S. Coast Guard’s Heavy Polar Icebreaker Industry Study. The ship design is an evolution from the mature “Polar Stern II” [German icebreaker] currently in design and construction; the team has worked rigorously to demonstrate its maturity and reliability. During the study, TAI incrementally adjusted the design and conducted a series of five ship model tank tests to optimize the design. The vessels are 460 feet in length with a beam of 88 feet overall, a full load displacement of approximately 22,900 long tons at delivery. The propulsion will be diesel electric at over 45,200 horse power and readily capable of breaking ice between six to eight feet thick. The vessel will accommodate 186 personnel comfortably for an extended endurance of 90 days.

In addition to TAI, VT Halter Marine has teamed with ABB/Trident Marine for its Azipod propulsion system,29 Raytheon for command and control systems integration, Caterpillar for the main engines, Jamestown Metal Marine for joiner package, and Bronswerk for the

28 Rich Abott, “Polar Icebreaker Winner Meets Threshold Requirements, Has Incentives for Early Delivery,” Defense Daily, April 25, 2019.

29 ABB is ASEA Brown Boveri, a multinational corporation headquartered in Zurich, Switzerland, that is, among other things, a leading maker of electric-drive propulsion systems for ships. (ASEA is an acronym for Allmänna Svenska Elektriska Aktiebolaget [i.e., General Swedish Electrical Limited Company], which merged with Brown, Boveri & Cie [BBC] in 1988 to create ABB.) Azipod is ABB’s term for its azimuthing (i.e., swiveling) podded propulsors.

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HVAC system. The program is scheduled to bring an additional 900 skilled craftsman and staff to the Mississippi-based shipyard.30

Figure 5. Rendering of Halter Marine Design for PSC

Source: Photograph accompanying Connie Lee, “New Coast Guard Icebreaker Remains on Tight Schedule,” National Defense, May 21, 2020. The article credits the photograph to Technology Associated, Inc.

The German icebreaker design referred to in Halter Marine’s press release, Polar Stern II (also spelled Polarstern II) (Figure 6),31 is to be built as the replacement for Polarstern, Germany’s current polar research and supply icebreaker.32 A May 9, 2019, press report states that Polarstern

30 Halter Marine press release, “VT Halter Marine Awarded the USCG Polar Security Cutter,” May 7, 2019, updated May 29, accessed November 19, 2024, at https://web.archive.org/web/20201028114950/http://vthm.com/wp-content/ uploads/2019/05/Press-Release_USCG-PSC_Singapore-Exchange-FINAL_updatedMay29.pdf. The original (May 7) version of the press release stated that the design’s full load displacement at delivery would be approximately 33,000 tons.

31 Polarstern is the German word for Polar Star—coincidentally, the same name as the U.S. Coast Guard’s operational heavy polar icebreaker.

32 On February 14, 2020, the Alfred Wegener Institute (AWI), Helmholtz Centre for Polar and Marine Research, announced that “the [German] Federal Ministry of Education and Research (BMBF) today cancelled the Europe-wide call for tenders for the procurement of a new polar research vessel, Polarstern II, for legal reasons.” (Alfred Wegener Institute, Helmholtz Centre for Polar and Marine Research, “Call for Fender Procedure for the Construction of a Successor to the Icebreaker Polarstern Has Been Cancelled,” February 14, 2020.) On June 3, 2022, however, AWI stated that “now that the federal budget for 2022 was approved by the German Bundestag on 3 June 2022, the construction procurement procedure for Polarstern II can begin. The AWI plans to promptly launch the Europe-wide procurement procedure so that the competitive bidding can start promptly as the first step. The handover of the completed ship is slated for 2027.” (Alfred Wegener Institute, Helmholtz Centre for Polar and Marine Research, “Polarstern II: German Bundestag Greenlights the Construction of New Icebreaker,” June 3, 2022. See also Eurasia Review, “Polarstern II: German Bundestag Green-Lights Construction Of New Icebreaker,” Eurasia Review, June 4, 2022; Michael Wenger, “Germany’s ‘Pola[r]stern II’ Becomes Reality,” Polar Journal, June 6, 2022.)

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II was designed by Germany’s Ship Design & Consult (SDC), a firm based in Hamburg, Germany.33

Figure 6. Rendering of SDC Concept Design for Polarstern II

Source: Cropped version of SDC Ship Design & Consult GmbH, design SDC2187, 133m Research Vessel, accessed November 19, 2024, at http://www.shipdesign.de/html/index.php?navi=3&navi2=80&navi3=115. The image is enlarged at http://www.shipdesign.de/html/detail.php?id=396.

SDC states that its concept design for Polarstern II has a length of 133 meters (about 436.4 feet) long, a beam of 27 meters (about 88.6 feet), and a draft of 10.5 meters (about 34.4 feet), but does not provide the design’s displacement.34 A briefing on a preliminary version of the ship’s design stated that the design at that point was somewhat larger, with a length of 145 meters (about 476 feet), a beam of 27.3 meters (about 89.6 feet), a draft of about 11 meters (about 36.1 feet), and a displacement (including payload) of about 26,000 tons.35 These figures suggest that SDC’s somewhat smaller concept design for Polarstern II might have a displacement (including payload) of something less than 26,000 tons, and perhaps closer to 23,000 tons. The May 9, 2019, press report states that

VT Halter’s teammates on the PSC include ship designer Technology Associates, Inc. (TAI), which has been involved in the design for over two years and has made “a lot of modifications” in a number of areas to meet Coast Guard requirements, [Ronald Baczkowski, president and CEO of VT Halter Marine] said. The team went through six

33 Calvin Biesecker, “Long-Lead Funding in FY ‘20 for Second Polar Security Cutter Would Help with Planning, Shipbuilder Says,” Defense Daily, May 9, 2019.

34 SDC Ship Design & Consult GmbH, design SDC2187, 133m Research Vessel, accessed November 19, 2024, at http://www.shipdesign.de/html/index.php?navi=3&navi2=80&navi3=115.

35 Briefing entitled “Shipboard Polar Research, 32 Years Polarstern and the Requirement for Polarstern II,” accessed November 19, 2024, at http://www.ervo-group.eu/np4/np4/%7B$clientServletPath%7D/?newsId=43&fileName= Pr_sentation_Markterkundung_09.09.14_fin.pdf. The briefing is undated but includes a statement on one of its slides that refers in the past tense to an event that took place in January 2016.

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design spirals to refine the design and the major modifications include changes in the hull form to enhance the ship’s icebreaking capabilities and keep the ice clear from the propulsors and sensors, habitability improvements for comfort particularly in open water, easier access to different areas of the ship, and maintenance and endurance capabilities….

Raytheon [RTN] is the integrator for C5I capabilities36 on the ship and the main engines will be supplied by Caterpillar [CAT]. Switzerland-based ABB and Netherlands-based Trident are supplying the Azipod propulsion system, Florida-based Jamestown Metal Marine is supplying the joiner package, and Netherlands-based Bronswerk the heating, ventilation and cooling system.37

Halter Marine’s 22,900-ton design for the PSC is considerably larger than the Coast Guard’s current polar icebreakers. As shown in tons in Table A-1, the Coast Guard’s largest polar icebreaker, Healy, is 420 feet long and has a full load displacement of 16,000 tons. Halter Marine’s 460-foot design for the PSC is 40 feet longer than Healy, and its 22,900-ton displacement is about 43% greater than Healy’s.

The horsepower generated by the propulsion plant in Halter Marine’s design—more than 45,200, according to the earlier-quoted May 7, 2019 press release from Halter Marine—is roughly one- quarter less than the 60,000 shaft horsepower of the propulsion plant in the Coast Guard’s heavy polar icebreaker, Polar Star. As shown in Figure 1 and Figure 3, however, Halter Marine’s design includes a centerline shafted propeller flanked by two azimuthing (i.e., swiveling) podded propulsors—an arrangement that, along with other modern icebreaker hull design features, is expected to give Halter Marine’s design a capability for breaking ice comparable to that of Polar Star. A May 8, 2019, press report states the following:

“We picked the most modern icebreaker that was on the market, soon to be production- level design that roughly met the Coast Guard’s requirements, and we took it and modified it,” Baczkowski said.

“It has a contoured shape. The shape of the hull does the icebreaking. Instead of being a mass breaking ice, this actually slices the ice. The shape of the hull pushed the broken ice aside, so it doesn’t interfere with your propulsion systems, with your instrumentation that’s on the other side of the ship.”

The design of the cutter is optimized for seakeeping to support the long voyage from its homeport in Washington State to as far away as the Antarctic, he said.

“It’s an optimum design between icebreaking and seakeeping.”

“With the propulsors, with one fixed and two steerable, we were able to optimize the seakeeping capability so when you’re going on long transits from Washington to Antarctica the crew is not beat to a pulp or heavily fatigued because of the stability characteristics in open water.”38

Procurement Funding Through FY2024

As shown in Table 2, the PSC program has received a total of about $1,731.8 million in procurement funding through FY2024. This total reflects a rescission of $150.0 million in unobligated prior-year funding in the Coast Guard’s Procurement, Construction, and Improvements (PC&I) account that was made by Section 543(10) of the FY2024 DHS Appropriations Act (Division C of H.R. 2882/P.L. 118-47 of March 23, 2024). The Coast Guard

36 C5I stands for command, control, communications, computers, collaboration, and intelligence.

37 Calvin Biesecker, “Long-Lead Funding in FY ‘20 for Second Polar Security Cutter Would Help with Planning, Shipbuilder Says,” Defense Daily, May 9, 2019. Abbreviations for firm names in brackets as in original.

38 Sam LaGrone, “VT Halter Marine Details Coast Guard Icebreaker Bid,” USNI News, May 8, 2019.

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applied the rescission to the PSC program’s FY2021 PC&I account appropriation, reducing it from the originally enacted figure of $555.0 million to the figure shown in Table 2 of $405.0 million.

FY2025 Procurement Funding Request

The Coast Guard’s proposed FY2025 budget requests no procurement funding for the PSC program.

Table 2. Procurement Funding for PSC Program Through FY2024

(In millions of dollars)

Fiscal

year

Appropriated

Requested by

Coast Guard for that year

Coast Guard

funding Navy funding Total funding

FY13 7.609 7.609 8.0

FY14 2.0 2.0 2.0

FY15 0.0 0.0 6.0

FY16 36.0 36.0 4.0

FY17 25.0 150.0 175.0 147.6

FY18 19.0 150.0 169.0 19.0

FY19 675.0 675.0 750.0

FY20 135.0 135.0 35.0

FY21 405.0 405.0 405.0

FY22 80.0 80.0 170.0

FY23 47.2 47.2 167.2

FY24 0 0 170.0

Total 1,431.809 300.0 1,731.809 n/a

Source: U.S. Coast Guard and Navy budget data. Figures reflect post-enactment adjustments due to reprogramming actions or recissions. Notes: Coast Guard procurement funding shown in the table was provided through the PC&I account. (Prior to FY2019, the PC&I account was called the Acquisition, Construction, and Improvements [AC&I] account.) Navy procurement funding shown in the table was provided through the Shipbuilding and Conversion, Navy (SCN) account (i.e., the Navy’s shipbuilding account). All procurement funding requested over the years for the PSC program has been requested by the Coast Guard for the Coast Guard’s AC&I/PC&I account. The Navy procurement funding provided in FY2017 and FY2018 was not requested by the administration and was added by Congress in marking up the Navy’s proposed FY2017 and FY2018 shipbuilding budgets. The FY2016 figure of $36.0 million includes $30.0 million that was added after enactment through a reprogramming action, as noted in the Coast Guard’s FY2018 budget submission. Section 543(10) of the FY2024 DHS Appropriations Act (Division C of H.R. 2882/P.L. 118-47 of March 23, 2024) rescinded $150.0 million in unobligated prior-year funding for the Coast Guard’s Procurement, Construction, and Improvements (PC&I) account. The Coast Guard applied the rescission to the PSC program’s FY2021 PC&I account appropriation, reducing it from the originally enacted figure of $555.0 million to the figure shown in the table of $405.0 million.

Commercially Available Polar Icebreaker (CAPI)

The Coast Guard is purchasing an existing commercially available polar icebreaker (CAPI) and modifying it to become a Coast Guard medium polar icebreaker, so as to help augment the Coast

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Guard’s current polar icebreaking capacity until the new PSCs enter service, and to continue augmenting the Coast Guard’s polar icebreaking capacity after the PSCs enter service. The ship being purchased and modified is Aiviq, a U.S.-registered ship that was originally built to serve as an Arctic oil-exploration support ship, and which has an icebreaking capability sufficient for the ship to serve following modification as a Coast Guard medium polar icebreaker.39 The Coast Guard testified in November 2014 that the ship will enter Coast Guard service by the end of calendar 2024.40 On August 14, 2024, the Coast Guard announced that it plans to homeport the ship in Juneau, AK.41

Prior to 2021, the Coast Guard plans did not include the acquisition of such a ship. The Coast Guard’s FY2022 UPL, dated June 29, 2021, however, included a $150.0 million item for the lease or purchase of a commercially available vessel to provide polar icebreaking capability until the future delivery of PSCs.42 The following year, the Coast Guard as part of its proposed FY2023 budget requested $125.0 million in procurement funding for the purchase of an existing CAPI. Congress, in acting on the Coast Guard’s proposed FY2023 budget, denied the request. The Coast Guard once again requested the $125.0 million as part of its proposed FY2024 budget, and the FY2024 DHS Appropriations Act (Division C of H.R. 2882/P.L. 118-47 of March 23, 2024) approved the request. In addition to its acquisition cost, the Coast Guard expects to spend $25 million modifying the ship before it enters service.43 Whether there will be further modifications to the ship after it enters service, and what those modifications might cost, is uncertain. The Coast Guard’s proposed FY2025 budget requests no procurement funding for the CAPI program. The Coast Guard’s FY2025 UPL includes an item for $25.0 million in procurement funding for the program. The ship is discussed further in Appendix A.

Service Life Extension for Polar Star

The Coast Guard plans to extend the service life of Polar Star until the delivery of at least the second PSC.44 The Coast Guard estimated the cost of Polar Star’s service life extension work at

39 On March 1, 2024, the Coast Guard announced that it intended to solicit, on a sole-source basis, for a Firm-Fixed- Price contract to Offshore Service Vessels, LLC, for the purchase of the ship. See “Synopsis: USCG Intent to Sole Source Commercially Available Polar Icebreaker (Updated),” SAM.gov, accessed November 19, 2024, at https://sam.gov/opp/a12ad39d150d4df0ab6e4773d1cf17d0/view. See also Cal Biesecker, “Coast Guard Moves Closer to Acquiring Commercial Polar Icebreaker,” Defense Daily, March 4, 2024; Joseph Trevithick, “Coast Guard Poised to Buy Badly Needed Private Icebreaker,” The War Zone, March 4, 2024; Malte Humpert, “U.S. Coast Guard Looking to Acquire Commercial Icebreaker ‘Aiviq,’” gCaptain, March 5, 2024; Maritime Executive, “U.S. Coast Guard Plans to Buy Edison Chouest’s Icebreaker Aiviq,” Maritime Executive, March 5, 2024.

40 See, for example, Malte Humpert, “Icebreaker ‘Aiviq’ to Join U.S. Coast Guard Before End of Year to Bolster Arctic Presence,” gCaptain, November 14, 2024; Cal Biesecker, “Coast Guard Expects DHS Approval Shortly To Begin Icebreaker Construction But Needs More Funding,” Defense Daily, November 14, 2024.

41 U.S. Coast Guard, “U.S. Coast Guard Announces Juneau Homeporting for Future Icebreaker,” press release, August 14, 2024. See also Maritime Executive, “U.S. Coast Guard Closes In on Purchase of Icebreaker Aiviq,” Maritime Executive, August 14, 2024; Heather Mongilio, “Coast Guard Names Juneau as Home Port for New Icebreaker,” USNI News, August 15, 2024; James Brooks, “Coast Guard Confirms Plans to Buy Polar Icebreaker, Station It in Juneau,” Alaska Beacon, August 17, 2024.

42 U.S. Coast Guard, FY 2022 Unfunded Priorities List, Report to Congress, June 29, 2021, p. 3.

43 See, for example, Malte Humpert, “Icebreaker ‘Aiviq’ to Join U.S. Coast Guard Before End of Year to Bolster Arctic Presence,” gCaptain, November 14, 2024.

44 In February 2020, for example, the Coast Guard testified that

The Coast Guard also understands that we must maintain our existing heavy and medium icebreaking capability while proceeding with recapitalization.... Maintenance of POLAR STAR will be critical to sustaining this capability until the new PSCs are delivered. Robust planning efforts for a service life extension project on POLAR STAR are already underway and initial work

(continued...)

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$75 million, a sum that was funded at a rate of $15 million per year for five years, with the final $15 million increment being provided in FY2023. The funding was included in the vessels portion of the Coast Guard’s PC&I account, in a line item called “Polar Sustainment” that is separate from the line items for the PSC and CAPI programs.

Trilateral Polar Icebreaker Collaboration Effort (ICE Pact)

July 2024 Announcement of ICE Pact

On July 11, 2024, the leaders of the United States, Canada, and Finland announced a trilateral partnership on polar icebreakers, called the Icebreaker Collaboration Effort (ICE Pact), to implement a “collaborative effort to continue building best-in-class Arctic and polar icebreakers and other Arctic and polar capabilities in each of our respective countries by sharing expertise, information, and capabilities.” The joint statement announcing the partnership stated

As leaders of Arctic nations, Canada, Finland, and the United States, recognizing the enduring importance of the region to our collective economic, climate, and national security, we resolve to deepen our cooperation to ensure the polar and Arctic regions remain peaceful, cooperative, and prosperous. As part of this effort, we are announcing an enhanced trilateral partnership called the Icebreaker Collaboration Effort or ICE Pact.

Through ICE Pact, our governments will build on our longstanding and ongoing bilateral ties. As the first initiative under ICE Pact, we will commit to a collaborative effort to continue building best-in-class Arctic and polar icebreakers and other Arctic and polar capabilities in each of our respective countries by sharing expertise, information, and capabilities. Over the next six months, we also will jointly develop an implementation plan for this collaboration to build these highly complex and critical vessels for our allies and partners with interests and responsibilities in the Arctic and Antarctic regions.

This partnership will strengthen the shipbuilding industries in each nation with the goal of creating good-paying jobs in shipyards, marine equipment manufacturers, and many other related services across all three countries. In the Arctic, new, faster shipping lanes hold the potential to create new economic opportunities and drive down shipping costs. And in the Antarctic, our partnership can also foster increased scientific research and international collaboration.

This partnership is about more than the collective production of polar icebreakers and capabilities, including Arctic and polar-capable ships. It is about providing the capability for like-minded nations to uphold international rules, norms, and standards to sustain peace and stability in the Arctic and Antarctic regions for generations to come.45

for this project will begin in 2020, with phased industrial work occurring annually from 2021 through 2023. The end goal of this process will be to extend the vessel’s service life until delivery of at least the second new PSC. (Testimony of Admiral Charles W. Ray, Coast Guard Vice Commandant, on “Arctic Security Issues,” before the House Homeland Security Subcommittee on Transportation & Maritime Security, February 5, 2020, p. 9.)

45 White House, “Joint Statement on ICE Pact,” July 11, 2024. See also Justin Katz, “ICE Pact: Why the US Had to Recruit Help in Race with Russia, China for Arctic Icebreakers,” Breaking Defense, August 16, 2024; Rana Foroohar, “The New Maritime Statecraft,” Financial Times, August 12, 2024; Katy Buda, Gregory Sanders, and Cynthia Cook, “Recruiting Friends for the Polar Icebreaker Express: Viewing the ICE Pact Through Broader Defense Industrial Cooperation,” Center for Strategic and International Studies, August 1, 2024; Cal Biesecker, “Following ICE Pact, Canadian Shipbuilder Seeking to Partner in U.S.,” Defense Daily, July 29, 2024; Howard Altman, “Allied Pact Aims to Close Yawning Icebreaker Gap with Adversaries,” The War Zone, July 12, 2024; Eric Bazail-Eimil, Lee Hudson, and (continued...)

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November 2024 MOU

On November 13, 2024, officials from the three ICE Pact governments signed a memorandum of understanding (MOU) for implementing the ICE Pact. A November 13, 2024, DHS press release states,

Officials representing the Governments of the United States, Canada, and Finland today signed a Memorandum of Understanding (MOU) to begin working together to develop world-class Arctic and polar icebreakers through the exchange of knowledge, information, and resources in each of our countries….

Each of our nations recognizes the need to enhance our Arctic and polar icebreaking capabilities to assert our collective presence in the Arctic and Antarctic regions. Building these specialized vessels at a faster pace, on a larger scale, and at competitive costs is a shared priority as we uphold safety and security in these strategically important areas.

The ICE Pact includes four components: 1) enhanced information exchange between the United States, Canada, and Finland; 2) workforce development collaboration; 3) engagement with allies and partners, and; 4) research and development. Given the high costs of shipbuilding, long-term orders are essential for shipyard success in each of our countries. The collective investment in our domestic shipyards has the potential to scale production and reduce the cost of Arctic and polar icebreakers for our own use and for our allies and partners.

By leveraging our collective expertise and resources, the MOU will facilitate knowledge, information, and resource sharing with shipyards, with the potential to create high-quality manufacturing jobs in the maritime infrastructure industry.[The] ICE Pact will help provide the stability necessary to support the production of Arctic and polar icebreakers and strengthen our shipbuilding industries.46

Coast Guard Great Lakes Icebreakers

Current Fleet

The Coast Guard’s current Great Lakes icebreaker (GLIB) fleet consists of nine cutters:

• one heavy icebreaker—Mackinaw (WLBB-30), a 240-foot ship displacing 3,500 tons (Figure 7);

• six 140-foot Bay-class icebreaking tugs displacing 662 tons each; and

• two 225-foot Juniper-class seagoing buoy tenders displacing about 2,000 tons each that have a light icebreaking capability.47

Kyle Duggan, “US, Canada and Finland to Challenge Russia and China in the Arctic,” Politico Pro, July 11, 2024; Laura Dhillon Kane and Josh Wingrove, “US, Finland, Canada Forge Icebreaker Ship Pact to Counter Russia, China in Arctic,” Bloomberg, July 11, 2024; Lee Ferran, “US Teams with Canada, Finland on Polar Icebreakers to Chill Russian, Chinese Power Up North” Breaking Defense, July 11, 2024; Michael Martina, “US, Canada, Finland Launch Effort to Build Ice-Breaking Ships as China and Russia Cooperate in Arctic,” Reuters, July 11, 2024; Patrick Tucker, “US Agrees to Build Icebreakers with Canada, Finland,” Defense One, July 11, 2024.

46 Department of Homeland Security, “United States, Canada, and Finland Sign MOU to Build Arctic and Polar Icebreakers,” press release dated November 13, 2024. See also Cal Biesecker, “U.S., Canada And Finland Formalize Effort On Polar Icebreaker Development And Production,” Defense Daily, November 13, 2024; Justin Katz, “US, Canada, Finland Ink Joint MOU, Latest Step in High North-Focused ICE Pact,” Breaking Defense, November 13, 2024; Aaron-Matthew Lariosa, “U.S. Signs Icebreaker Pact with Finland, Canada,” USNI News, November 13, 2024.

47 Source: U.S. Coast Guard, “Ninth Coast Guard District,” accessed November 19, 2024, at (continued...)

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Figure 7. Great Lakes Icebreaker Mackinaw

Source: U.S. Coast Guard, “USCGC Mackinaw,” accessed November 19, 2024, at https://www.atlanticarea.uscg.mil/Our-Organization/District-9/Ninth-District-Staff/Prevention-Division/Cutters/ MACKINAW/.

Although Mackinaw is referred to as a heavy icebreaker, the word heavy in this instance is being used in the context of Great Lakes icebreaking—Mackinaw is much larger and has more icebreaking capability than the eight other Great Lakes icebreaking ships listed above.48 Mackinaw would not, however, qualify as a heavy polar icebreaker, as it is much smaller and has much less icebreaking capability than a heavy polar icebreaker.49

New Great Lakes Icebreaker (GLIB)

Overview

Since at least 2009, some Members of Congress have expressed interest in bolstering the Coast Guard’s Great Lakes icebreaking fleet by procuring a second icebreaker with capabilities generally similar to those of Mackinaw.50 Prior to October 2021, the Coast Guard generally stated

https://www.atlanticarea.uscg.mil/Atlantic-Area/Units/District-9/Ninth-District-Units/. A total of 10 cutters are assigned to the Ninth District, which is responsible for the Great Lakes, the Saint Lawrence Seaway, and parts of the surrounding states. The 10th cutter assigned to the Ninth District is a 100-foot inland buoy tender whose primary missions do not include icebreaking.

48 At continuous speeds of 3 knots, Mackinaw can break ice up to 32 inches thick, the 140-foot icebreaking tugs can break ice up to 22 inches thick, and the 225-foot seagoing buoy tenders can break ice up to 14 inches thick.

49 As discussed earlier in this report, the Coast Guard’s two heavy polar icebreakers—the operational Polar Star and the nonoperational Polar Sea—are 399 feet long and displace about 13,200 tons each. Polar Star can break ice up to six feet (72 inches) thick at a continuous speed of 3 knots. The Coast Guard states that Mackinaw is equivalent to the Canadian Coast Guard ship Samuel Risley, a Great Lakes-homeported icebreaker and buoy tender that Canada classifies as a light icebreaker in a comparison conducted across its entire icebreaking fleet, including its Arctic icebreakers. (U.S. Coast Guard, Great Lakes Icebreaking Mission Analysis, Fiscal Year 2016 Report to Congress, August 30, 2016, p. 5.)

50 See, for example, H.R. 1747 of the 111th Cong., the Great Lakes Icebreaker Replacement Act, which was introduced on March 26, 2009, reported by the Committee on Transportation and Infrastructure on April 21, 2009 (H.Rept. 111- (continued...)

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that it did not view the procurement of additional GLIBs as an urgent near-term acquisition need, given the capabilities of the current Great Lakes icebreaking fleet, the relatively young age of Mackinaw (which entered service in 2006), service life extension work being done on the ice- breaking tugs that is designed to add 15 years to their service lives, and Canada’s own Great Lakes icebreaking capabilities.51 In October 2021, then-Commandant of the Coast Guard Admiral Karl Schultz expressed support for procuring an additional heavy GLIB as part of a budget reconciliation bill.52

The Coast Guard’s FY2024 budget initiated a program for procuring a new GLIB that would have capabilities similar to those of Mackinaw. The ship’s total acquisition cost, the Coast Guard estimates, might be roughly $350 million, depending in part on the exact design that is developed for the ship.53 (In January 2024, the Government Accountability Office [GAO] reported that the Coast Guard’s 2022 Mission Need Statement for domestic icebreaking estimated the procurement cost of a heavy domestic icebreaker at $216.3 million as of 2020.54)

March 1, 2024, Hearing

On March 1, 2024, the Oceans, Fisheries, Climate Change, and Manufacturing subcommittee of the Senate Commerce, Science, and Transportation Committee held a field hearing in Green Bay, WI, on the importance of Great Lakes icebreaking to the regional economy.55 At this hearing, Admiral Linda Fagan, Commandant of the Coast Guard, testified:

The Coast Guard recently completed a Fleet Mix Analysis which recommended a future fleet of in-kind capacity to replace [the Coast Guard’s] current [Great Lakes icebreaking]

81), and agreed to by the House by voice vote on April 27, 2009. A similar bill, S. 1024, was introduced in the Senate on May 12, 2009.

51 A 2016 Coast Guard report to Congress on the Great Lakes icebreaking mission, for example, stated the following:

The current mix of heavy and medium [Great Lakes] icebreakers is capable of managing priorities and requests for icebreaking in Tier 1 and 2 waterways. When a severe ice season stresses Coast Guard asset capabilities, the existing agreement and partnership with Canada fills the capability gap and brings in extra heavy-icebreaking resources to manage the ice.... [T]he 2014 and 2015 ice seasons were a 20-year anomaly, consuming almost twice as many cutter resource hours as in any other year since 2005. The Coast Guard cannot reliably predict the economic impact of maintaining a single heavy Great Lakes icebreaker. Additionally, given the extreme conditions when ice coverage exceeds 90 percent, it is not clear that shipping delays would be significantly mitigated by an increase in icebreaking capability. Delays can be associated with several factors such as slow transit speeds, availability of pilots, and simultaneous and competing demand signals for icebreaking services across the Great Lakes. (U.S. Coast Guard, Great Lakes Icebreaking Mission Analysis, Fiscal Year 2016 Report to Congress, August 30, 2016, p. 11. The report was required by S.Rept. 114-68 of June 18, 2015, the Senate Appropriations Committee’s report on S. 1619, the Department of Homeland Security Appropriations Bill, 2016 (see page 75).)

52 Admiral Schultz expressed support for procuring an additional heavy Great Lakes icebreaker as part of a budget reconciliation bill as part of his testimony at an October 19, 2021, hearing on Coast Guard oversight before the Oceans, Fisheries, Climate Change, and Manufacturing subcommittee of the Senate Commerce, Science, and Transportation Committee.

53 Source: Coast Guard email to CRS, May 1, 2024.

54 GAO, Coast Guard: Improved Reporting on Domestic Icebreaking Performance Could Clarify Resource Needs and Tradeoffs, GAO-24-106619, January 16, 2024, Table 1 on page 8. In a footnote to the table, GAO states that “the actual costs [for items shown in the table] are likely to be higher than reported because the estimates do not include other costs, such as shore infrastructure costs at port locations that the Coast Guard has not yet determined.”

55 For details on this hearing, see https://www.commerce.senate.gov/2024/3/importance-of-great-lakes-icebreaking-to- the-regional-economy.

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fleet. The results showed a need for another heavy domestic icebreaker to meet future service needs across the Great Lakes. The ability to achieve continued success in this mission and reliably facilitate navigation within the MTS [marine transportation system] year-round requires sustainment and modernization of the Coast Guard’s domestic icebreaking fleet, and I am committed to developing the next system of icebreaking assets.

Consistent with Congressional direction, we are focused on acquiring a second heavy domestic icebreaker, at least as capable as CGC [Coast Guard cutter] Mackinaw. We established a Great Lakes Icebreaking Program Management Office to analyze requirements for the next generation of domestic icebreaking capability and have completed pre-acquisition activities, readying the Service to advance upon receipt of an appropriation. The FY 2024 President’s Budget requests $55 million to fund initial acquisition activities and prepare for the purchase of long lead time materials for a second heavy domestic icebreaker. I look forward to continuing to work with Congress to support this acquisition.56

The FY2024 DHS Appropriations Act (Division C of H.R. 2882/P.L. 118-47 of March 23, 2024) provided $20.0 million in procurement funding for the GLIB program (i.e., $35 million less than the requested amount of $55.0 million mentioned in the above-quoted testimony from Admiral Fagan). The Coast Guard’s proposed FY2025 budget requests no procurement funding for the GLIB program. The Coast Guard’s FY2025 UPL includes an item for $25.0 million in procurement funding for the ship.

January 2024 GAO Report

A January 16, 2024, GAO report on U.S. domestic icebreaking performance stated

The Coast Guard conducts domestic icebreaking operations in three of its nine districts— the Great Lakes, New England, and the Mid-Atlantic.

In the Great Lakes, 55 percent of the regional economy is dependent on key shipping channels, according to the Coast Guard. In 2020, industries shipped 100 million tons of iron ore, limestone, coal, and other commodities through the Great Lakes, according to data from the Army Corps of Engineers Waterborne Commerce Statistics Center. Some industry stakeholders who rely on these shipping channels have raised questions about whether the Coast Guard has adequate icebreaking resources available to facilitate commerce.

Section 11212 of the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 [H.R. 7776/P.L. 117-263 of December 23, 2022] includes a provision for GAO to review Coast Guard icebreaking operations in the Great Lakes and examine proposed performance standards for the Coast Guard’s Great Lakes icebreaking program. This report discusses the associations between ice coverage on the Great Lakes and effects on certain economic indicators, the Coast Guard’s icebreaking resource needs, and the potential effects of the proposed standards on the Coast Guard’s icebreaking efforts.

Key Takeaways

• Great Lakes vessel-based commerce declines during the winter, primarily due to lock closures and weather conditions. We found that the amount of ice coverage on the Great Lakes was generally not associated with selected economic indicators we examined, such as regional unemployment rates and unfilled orders for steel

56 Testimony of Admiral Linda L. Fagan, Commandant, U.S. Coast Guard, on “The Importance of Great Lakes Icebreaking to the Regional Economy” before the Senate Committee on Commerce, Science, and Transportation Subcommittee on Oceans, Fisheries[,] Climate Change, and Manufacturing, March 1, 2024, p. 4.

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production. Industries may mitigate the effects of delays caused by ice coverage, such as stockpiling iron ore inventory to maintain steel production throughout the winter.

• The Coast Guard identified heavy icebreaking capability gaps and its reliance on an aging fleet as risks to its ability to conduct its domestic icebreaking mission. As a result, the Coast Guard anticipates needing at least $3 billion in lifecycle costs to replace and acquire new vessels for domestic icebreaking.

• The proposed standards for the Coast Guard’s domestic icebreaking program will largely not have an operational impact. The proposed standards may lead to improvements in data collection and reporting, which could help the Coast Guard better communicate its resource needs and tradeoffs. However, the data collection efforts may increase operating costs and information sharing needs with industry, according to the Coast Guard.

• We recommend that the Coast Guard, using data it already collects, report more complete information on its icebreaking performance to better articulate its resource needs and tradeoffs.57

Issues for Congress

ICE Pact Implementation

One issue for Congress concerns the implementation of the ICE Pact. Potential oversight questions for Congress include the following:

• What new legislative authorities, if any, are needed to implement the ICE Pact?

• What specific initiatives and activities will result from the ICE Pact?

• What is the timeline for negotiating and implementing these initiatives and activities?

• How, if at all, will these initiatives and activities affect • the PSC program,

• the follow-on ASC program,

• funding requirements for U.S. icebreaker modernization, and

• the U.S. shipbuilding industrial base, including shipyards, supplier firms, and ship-design capabilities (i.e., naval architects and marine engineers)?

An October 2, 2024, letter to President Biden from Senator Christopher S. Murphy, Senator Cindy Hyde-Smith, and Senator Patty Murray regarding the ICE Pact states in part

As work is underway with Canadian and Finnish counterparts to flesh out the Pact’s details, we want to ensure the initiative achieves its fullest potential—with strong coordination across the U.S. federal government. To this end, we respectfully request responses to the following questions no later than 45 days from today to inform Congress’s work on related authorization and funding issues:

1. What is the Pact’s anticipated long-term impact to U.S. shipbuilding capacity and how will collaboration with Canadian and Finnish shipbuilders improve the efficiency and resiliency of our shipbuilding industrial base?

57 GAO, Coast Guard: Improved Reporting on Domestic Icebreaking Performance Could Clarify Resource Needs and Tradeoffs, GAO-24-106619, January 16, 2024, pp. 1-2.

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2. How will ICE Pact impact the procurement plan and construction timeline for the Polar Security Cutter program, as well as other U.S. Coast Guard shipbuilding programs? What are the potential benefits of ICE Pact to furthering existing and future Coast Guard shipbuilding efforts?

3. How will the ICE Pact initiative align with NATO’s current icebreaker capability requirements, and will it be necessary to revise these targets in future budget cycles to encourage Allies and partners to purchase icebreakers built in American, Canadian, or Finnish shipyards?

4. What is the Administration’s plan to solicit and incorporate feedback from all relevant stakeholders—including but not limited to the U.S. shipbuilding industry, workforce representatives, the Coast Guard-Navy Integrated Program Office, the Coast Guard, and the Department of Homeland Security—throughout negotiations over ICE Pact implementation?

5. What, if any, regulatory and statutory changes does the Administration anticipate will be needed to support ICE Pact’s implementation—particularly in its workforce development and information sharing components?58

An August 28, 2024, blog post about the ICE Pact states in part

The deal [i.e., the ICE Pact] remains in its early stages; July’s announcement [of the pact] was merely a public commitment to begin negotiations toward a memorandum of understanding that will be announced by the end of the year….

While the ICE Pact so far shows promise, its path to success will require deft negotiation around several potential sticking points.

First, several top Finnish firms involved in icebreaker design and production have significant operations in China. Aker Arctic, a world leader in ice-class ship design based in Helsinki, played a critical role in design and testing for the development of China’s first domestically produced polar icebreaker, the Xue Long 2. Another major Finnish firm, Wartsila, helped build the ship’s power system.

Security-minded officials from the United States may be hesitant to partner with companies that are actively supporting the buildup of China’s polar capabilities. The risk of sensitive technology transfer to Beijing’s dual-use shipyards will likely prove a particularly strong point of concern.

Another possible stumbling block is the ongoing dispute between the United States and Canada over the latter’s claims to exclusive jurisdiction over vast swaths of Arctic waters along the critical Northwest Passage sea route, which connects the Atlantic and Pacific oceans through the islands of northern Canada. Until recently, the decades-old dispute— rooted in differing interpretations of the U.N. Convention on the Law of the Sea—had remained on the back burner. It has returned to the fore in recent years as politicians on both sides increasingly turn their attention to the Arctic’s rising importance to global trade and security. Addressing these roadblocks is critical to the ICE Pact’s long-term success.59

58 Letter dated October 2, 2024, to The Honorable Joseph R. Biden, Jr. President of the United States, from Senator Christopher S. Murphy, Senator Cindy Hyde-Smith, and Senator Patty Murray. The full text of the letter is posted at https://www.murphy.senate.gov/imo/media/doc/ice_pact_letter.pdf. A press release regarding the letter that includes the above link is posted at https://www.murphy.senate.gov/newsroom/press-releases/murphy-hyde-smith-murray-urge- swift-ice-pact-implementation-to-boost-us-shipbuilding-and-bolster-security-in-polar-regions. See also Justin Katz, “In New Letter to White House, Senators Drill Down for Info on ICE Pact,” Breaking Defense, October 2, 2024.

59 Matthew P. Funaiole and Aidan Powers-Riggs, “Can NATO Ice Out China and Russia in the Arctic? A New Pact Aims to Narrow the Gap between NATO Partners and Their Competitors in Icebreaker Production,” Foreign Policy, August 28, 2024.

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PSC Program: Cost Growth60

Another oversight issue for Congress concerns cost growth in the PSC program.

Increase in Estimated Procurement Costs Since April 2019 Contract Award

Coast Guard and Navy estimates of PSC procurement costs have increased about 39% since the April 2019 PSC program contract award:

• At a March 28, 2019, hearing on the Coast Guard’s proposed FY2020 budget, then-Coast Guard Commandant Admiral Karl Schultz testified that as of that date, the cost of the first PSC was estimated at $925 million to $940 million, and that the cost of the second and third PSCs would be in the range of $700 million each,61 producing an estimated three-ship total of about $2,325 million to $2,340 million (i.e., about $2.3 billion).

• As shown in Table 1, the most recent estimate provided by the Coast Guard to CRS is for the first PSC to cost $1,297 million (i.e., about $1.3 billion), the second PSC to cost $921 million, and the third PSC to cost $1,017 million (i.e., about $1.0 billion), producing an estimated three ship total $3,235 million (i.e., about $3.2 billion),62 a total that is about 39% higher than the total from the March 28, 2019, testimony.

Factors that Could Further Increase Estimated Procurement Costs

Even with the above 39% increase, PSC procurement costs still appear to still be significantly underestimated. At least five potential factors could increase estimated PSC procurement costs from the March 2019 figures to figures that are significantly above the current estimate:

The actual PSC design is larger than the government’s indicative design. The design chosen for the PSC is about 35% larger in terms of light-ship displacement than the indicative design (i.e., the government’s in-house notional design) that informed earlier Navy and Coast Guard cost estimating for the program. Adjusting for this larger design might incur an approximate 35% increase in estimated PSC procurement costs over the costs estimated at the time of the April 2019 PSC contract award.

The Navy has frequently underestimated lead ship costs. As detailed by the Congressional Budget Office (CBO)63 and the Government Accountability Office (GAO),64 the costs of lead ships in Navy shipbuilding programs have exceeded the Navy’s estimates. Cost growth on Navy lead ships, CBO analysis shows, has ranged from a few percent to about 150%, with the weighted average figure for the 19 ship classes examined by CBO being 25%, and the unweighted average

60 This section is adapted from CRS Testimony TE10100, Building the Fleet: Assessing the Department of Homeland Security’s Role in the United States Coast Guard’s Acquisitions Process, by Ronald O'Rourke.

61 Source: CQ transcript of the hearing.

62 Source: U.S. Coast Guard email to CRS, March 26, 2024, which stated that costs shown are from the PSC 2021 LCCE v3 (Life Cycle Cost Estimate, version 3). The Coast Guard stated in the email that the 2021 LCCE v3 is the Coast Guard’s current model for estimated PSC procurement costs.

63 See CBO, An Analysis of the Navy’s Fiscal Year 2024 Shipbuilding Plan, October 2023, p. 34 (Figure 10).

64 See Government Accountability Office, Navy Shipbuilding[:] Past Performance Provides Valuable Lessons for Future Investments, GAO-18-238SP, June 2018, p. 8.

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being 40%.65 Many of these 19 cases involve lead ships whose light-ship displacements were not underestimated, meaning that the cost growth resulted from factors other than the one described in the previous bullet point.

Recent inflation in shipbuilding. Shipbuilding, like other sectors of defense procurement and the U.S. economy in general, has experienced significant inflation since the start of the COVID-19 pandemic due to supply chain disruptions and other impacts. The Navy states that “the residual effects of inflationary pressures of the past few years, workforce challenges, plus increased labor and supply costs across the defense enterprise, all drove costs associated with our shipbuilding account up roughly 20% over the last couple of years.”66 This inflation has increased the estimated procurement costs of multiple Navy shipbuilding programs. Within Coast Guard shipbuilding, the estimated unit procurement cost of an FRC has increased from $60 million in the Coast Guard’s enacted FY2021 appropriation to $100 million in the Coast Guard’s FY2024 unfunded requirements list and FY2025 budget submission, although not all of the increase is necessarily due to the recent inflation in shipbuilding.

Potential need for additional increases in worker wages and benefits. Shipyards and associated supplier firms face challenges in recruiting and retaining new workers, in part because wages and benefits in service and retail jobs have grown more in recent years than have wages and benefits at shipbuilders and supplier firms.67 As a result, workers are now more likely to choose service and retail jobs, where the work, while paying less than shipbuilding work, is more likely to be done in air-conditioned indoor settings, involve less heavy lifting or risk of serious injury, and take place in locations offering easier daily commutes.68 Reestablishing a larger differential in wages and benefits between shipbuilding jobs and service and retail jobs could require substantially increasing total wages and benefits for shipbuilding workers. Such a change could, in turn, substantially increase procurement costs for ships such as the PSC, since shipyard labor can account for roughly 40% of a military ship’s total procurement cost. Increases in worker wages and benefits could also result from shipyards along the Gulf Coast competing against one another for available shipbuilding workers.69

65 See CBO, An Analysis of the Navy’s Fiscal Year 2024 Shipbuilding Plan, October 2023, p. 34 (Figure 10).

66 Department of the Navy, Highlights of the Department of the Navy FY 2025 Budget, 2024, page 1-12.

67 See, for example, Paul McLeary and Lee Hudson, “Navy Shipyards Compete with Fast Food, and Are Losing,” Politico Pro, April 9, 2024.

68 Ibid.

69 A January 22, 2024, press report states

Rear Adm. Chad Jacoby, the assistant commandant of the Coast Guard for acquisition, said this month workforce challenges—specifically, needing more highly trained welders and design engineers—are contributing to delays on the Polar Security Cutter program at Bollinger Mississippi, formerly VT Halter Marine. “If you look across all of our construction programs, every shipyard says they’re going to hire 1,000 or 2,000 more people prior to executing the contracts that we have in place. They all happen to be on the Gulf Coast, so if you add up all those numbers, it’s probably physically impossible for every one of those individual shipyards to hire 2,000 more people” to support on-time ship deliveries, Jacoby said on a Jan. 11 panel at the Surface Navy Association annual conference. He told Defense News after the panel he is specifically concerned about Bollinger Mississippi in

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Labor hours and absorption of fixed overhead costs. Construction delays due to lower-than-anticipated shipyard worker productivity, supply chain issues, or other causes could increase the cost of the PSC because of the ship requiring a larger-than-anticipated number of labor hours to build (if worker productivity is an issue), and because the ship would absorb a portion of the shipyard’s monthly fixed overhead costs for an increased number of months (an effect somewhat like the meter in a taxi continuing to run even when the taxi is stuck in traffic).

A simple (not compounded) sum of the potential percentage cost increases described in the first three bullet points above (using the 25% and 40% figures from the second bullet) comes to a potential percentage cost increase, if all three factors were to come fully into play, of 80% to 95% above the March 2019 figures.

Increasing the March 2019 figures by 80% would result in an estimated cost of $1,665 million to $1,692 million (i.e., about $1.7 billion) for the lead ship and $1,260 million (i.e., about $1.3 billion) each for the second and third ships, producing an estimated three-ship total of $4,185 million to $4,212 million (i.e., about $4.2 billion). This total is about 30% higher than the currently estimated total of $3,235 million.

Increasing the March 2019 figures by 95% would result in an estimated cost of $1,804 million to $1,833 million (i.e., about $1.8 billion) for the lead ship and $1,365 million (i.e., about $1.4 billion) each for the second and third ships, producing an estimated three-ship total of $4,534 million to $4,563 million (i.e., about $4.5 billion to $4.6 billion). This total is about 40% higher than the currently estimated total of $3,235 million.

The cost figures in the two previous paragraphs do not include any increases cost resulting from the factors outlined in the fourth and fifth bullet points above.

Percentage increases in estimated ship procurement costs comparable to the potential 80%-95% increase discussed above have recently occurred in certain Navy shipbuilding programs. The estimated procurement cost of the lead ship in the Navy’s TAGOS-25 ocean surveillance ship program increased about 82% between the Navy’s FY2023 and FY2024 budget submissions;70 the estimated procurement cost of the lead ship in the Navy’s medium landing ship (LSM) program increased 43% between the Navy’s FY2024 and FY2025 budget submissions;71 and the estimated procurement cost of the lead ship in the Navy’s light replenishment oiler (TAOL) program increased 202% between the Navy’s FY2024 and FY2025 budget submissions. An April 2024 CBO report on the procurement costs of LSMs estimates that LSMs will cost roughly 127% to 187% more than the Navy estimates.72

Pascagoula and its Polar Security Cutter; Eastern Shipbuilding Group in Panama City, Florida, which is building the first four Offshore Patrol Cutters; Austal USA in Mobile, Alabama, which will build the next 11 OPCs; and Birdon America, a Denver-based company that will build the Waterways Commerce Cutters with a number of Louisiana- and Alabama-based companies. “It is one workforce across many states,” the admiral said of the Gulf Coast region. “As each shipyard says they’re going to hire people, they’re definitely competing against each other.” (Megan Eckstein, “Coast Guard Ship Programs Facing Delays amid National Worker Shortage,” Defense News, January 22, 2024.)

70 For more on the TAGOS-25 program, see CRS In Focus IF11838, Navy TAGOS-25 Ocean Surveillance Shipbuilding Program: Background and Issues for Congress, by Ronald O'Rourke.

71 For more on the LSM program, see CRS Report R46374, Navy Medium Landing Ship (LSM) (Previously Light Amphibious Warship [LAW]) Program: Background and Issues for Congress, by Ronald O'Rourke.

72 Congressional Budget Office, Acquisition Costs of the Navy’s Medium Landing Ship, April 2024, p. 1. For further (continued...)

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A procurement cost for the first PSC that is closer to $2 billion than to $1 billion would be comparable to the procurement cost of a Navy LPD-17 Flight II class amphibious ship, which is about $2.0 billion. The LPD-17 Flight II design a little larger than the PSC design and has more expensive combat system equipment than the PSC.73

The Coast Guard could respond to potential PSC program cost growth by granting contract relief to the PSC shipbuilder, Bollinger Mississippi Shipbuilding, through a request for equitable adjustment (REA) or pursuant to P.L. 85-804 (as done for the builder of the first four OPCs, Eastern Shipbuilding Group).74

CBO 2024 Cost Estimates

May 2024 CBO Testimony

At a May 7, 2024, hearing on Coast Guard ship acquisition programs, particularly the PSC program, before the House Homeland Security Committee subcommittee on Transportation and Maritime Security, the Congressional Budget Office (CBO) estimated that, in constant FY2024 dollars, the procurement cost of the first PSC would be $1.9 billion, and the procurement costs of subsequent PSCs would be about $1.6 billion each. Given these estimates, CBO testified that “the procurement cost of three PSCs would be about $5.1 billion. That amount is 60 percent greater than the Coast Guard’s most recent publicly released estimate for the procurement cost of three heavy icebreakers, which was provided to CBO by the Coast Guard in March 2024.”75

August 2024 CBO Report

A CBO report on the cost of the PSC program released on August 21, 2024, provided the same cost estimates as those in CBO’s May 7, 2024, testimony; extended the estimates to include a PSC program of up to nine ships; and discussed the PSC program and CBO’s costs estimates in further detail.76 Figure 8 presents the table in the CBO report that summarizes CBO’s cost estimates for the program.

discussion, see CRS Report R46374, Navy Medium Landing Ship (LSM) (Previously Light Amphibious Warship [LAW]) Program: Background and Issues for Congress, by Ronald O'Rourke.

73 Another consideration in comparing cost estimates for the first PSC and the LPD-17 Flight II design is that the first PSC is at the top of the learning curve for building the PSC design, while the cost of the LPD-17 Flight II design reflects learning curve benefits from producing earlier LPD-17 Flight I class ships. For more on the LPD-17 Flight II class program, see CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship Programs: Background and Issues for Congress, by Ronald O'Rourke.

74 For more on P.L. 85-804 and the contract relief granted in the OPC program to Eastern Shipbuilding Group under that law, see CRS Report R42567, Coast Guard Cutter Procurement: Background and Issues for Congress, by Ronald O'Rourke.

75 Eric J. Labs, The Cost of the Coast Guard’s Polar Security Cutter, Congressional Budget Office, Testimony Before the Subcommittee on Transportation and Maritime Security Committee on Homeland Security, U.S. House of Representatives, April 30, 2024 (for hearing of May 7, 2024), p. 2 (PDF page 3 of 4).

76 CBO, The Cost of the Coast Guard’s Polar Security Cutter, August 2024, 9 pp.

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Figure 8. CBO Cost Estimates for PSC Program

Table from August 2024 CBO report on PSC program

Source: Congressional Budget Office, The Cost of the Coast Guard’s Polar Security Cutter, August 2024, p. 6 (Table 2).

PSC Program: Schedule Delay77

Another oversight issue for Congress concerns schedule delay in the PSC program. The Coast Guard originally aimed to have the first PSC delivered in 2024, but the ship’s estimated delivery date has been delayed repeatedly and, as mentioned earlier, the Coast Guard testified in November 2014 that it now expects the ship to be delivered in 2030.

A principal cause of the delay has been the time needed to achieve design maturity (i.e., to complete the detail design of the ship). The parent design strategy used for the PSC program (i.e., the strategy of creating the PSC design by modifying the design of an existing polar-capable ship) was intended by the Coast Guard and Navy to reduce the PSC’s design time. Five years after contract award, the expected reduction in design time does not appear have been realized. The time needed to mature the PSC design suggests that the parent design used for the PSC program—the design for the new German polar icebreaker Polar Stern II—might now more closely resemble a parent design in name only (PDINO).78 In this regard, the PSC program appears somewhat similar to the Navy’s Constellation (FFG-62) class frigate program, which the Navy initiated as a program that would use a parent design, but which observers might now characterize as having moved over time toward a PDINO situation.79 Limited numbers of

77 Parts of this section are adapted from CRS Testimony TE10100, Building the Fleet: Assessing the Department of Homeland Security’s Role in the United States Coast Guard’s Acquisitions Process, by Ronald O'Rourke.

78 The phrase parent design in name only (with the resulting acronym PDINO) is only one possible shorthand way of referring to the situation. One possible way to pronounce the acronym PDINO would be pa-DEE-no.

79 For more on the FFG-62 program, see CRS Report R44972, Navy Constellation (FFG-62) Class Frigate Program: Background and Issues for Congress, by Ronald O'Rourke. On the issue of the FFG-62’s parent design strategy, the report states

An April 2, 2024, press report states: “At one point the Constellation design shared about 85 percent commonality with the original [Italian-French] FREMM [Fregata Europea Multi-Missione parent] design, but the alterations [incorporated into the FFG-62 design] have brought that

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available naval architects and design engineers within the United States also appear to have contributed to delays in maturing the PSC design.80

A principal option for substantially accelerating the construction of polar icebreakers for the Coast Guard would be to complete the maturation of the PSC design; begin building PSCs at the program’s current shipbuilder, Bollinger Mississippi Shipbuilding; and at some later point introduce a second shipbuilder to build additional PSCs in parallel to those being built by Bollinger. As mentioned earlier, the Coast Guard has testified that its most recent fleet mix analysis calls for a total of eight to nine polar-capable icebreakers, including four to five heavy polar icebreakers (i.e., PSCs), and four to five medium polar icebreakers. Given these figures and Bollinger’s current contract to build up to three PSCs, one possible approach might be to introduce a second shipbuilder to build the fourth and fifth PSCs while Bollinger completes the first three. Another possible approach would be to have Bollinger build all four or five PSCs while accelerating the start date of the timeline for designing and building the medium polar icebreakers. This second approach could accelerate the date for completing the larger total of eight to nine heavy and medium polar icebreakers. These two alternatives are not the only possible approaches.

A January 22, 2024, press report states

Rear Adm. Chad Jacoby, the assistant commandant of the Coast Guard for acquisition, said this month workforce challenges—specifically, needing more highly trained welders and design engineers—are contributing to delays on the Polar Security Cutter program at Bollinger Mississippi, formerly VT Halter Marine.

“If you look across all of our construction programs, every shipyard says they’re going to hire 1,000 or 2,000 more people prior to executing the contracts that we have in place. They all happen to be on the Gulf Coast, so if you add up all those numbers, it’s probably physically impossible for every one of those individual shipyards to hire 2,000 more people” to support on-time ship deliveries, Jacoby said on a Jan. 11 panel at the Surface Navy Association annual conference.

He told Defense News after the panel he is specifically concerned about Bollinger Mississippi in Pascagoula and its Polar Security Cutter; Eastern Shipbuilding Group in Panama City, Florida, which is building the first four Offshore Patrol Cutters [OPCs]; Austal USA in Mobile, Alabama, which will build the next 11 OPCs; and Birdon America, a Denver-based company that will build the Waterways Commerce Cutters with a number of Louisiana- and Alabama-based companies.

“It is one workforce across many states,” the admiral said of the Gulf Coast region. “As each shipyard says they’re going to hire people, they’re definitely competing against each other.”81

A March 20, 2024, press report states

commonality down to under 15 percent, a person familiar with the changes told USNI News.” If the FFG-62 design shares less than 15% commonality with the FREMM design, then some observers might characterize the FFG-62 program as having moved over time toward what might be termed a parent design in name only (PDINO) design approach.

80 The January 22, 2024, press report quoted in footnote 69 mentions states (emphasis added): “Rear Adm. Chad Jacoby, the assistant commandant of the Coast Guard for acquisition, said this month workforce challenges— specifically, needing more highly trained welders and design engineers—are contributing to delays on the Polar Security Cutter program at Bollinger Mississippi, formerly VT Halter Marine.”

81 Megan Eckstein, “Coast Guard Ship Programs Facing Delays amid National Worker Shortage,” Defense News, January 22, 2024.

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The Coast Guard is currently working with the shipbuilder, Bollinger Shipyards, to “rebaseline [the program],” which will result in a new program schedule that is expected to be completed “later this year and will be critical to informing future budget requests,” a service spokesperson wrote in an email….

… the reevaluation of the program means that the entire program schedule will be revamped, and that schedule will not be made available until later this year, the service said.82

See also the comments about the first ship’s delivery date from the GAO testimony and reports discussed in the following section.

PSC Program: Technical Risk

Another potential oversight issue for Congress concerns technical risk in the PSC program.

Parent Design and PSC Design

One potential aspect of the issue of technical risk in the PSC program relates to the parent design for the PSC design. Some observers have questioned the value of using parent designs in military shipbuilding programs. A 2015 journal article, for example, states

The U.S. Navy has experimented with many approaches to design and build its ships. Using an existing design as the “parent” design, also referred to as “modified-repeat” design, is on its face an attractive option. Many acquisition executives, program managers and some ship design engineers believe that a design based on a parent has fewer technical risks than a new “clean sheet of paper” design and therefore the time and cost to design and build it will be reduced. They assume early in the ship acquisition program that “the design is mature” and because of that fewer problems will be encountered in completing the design and savings will thus be accrued. Yet, a number of naval ships based on a parent design have in fact experienced unanticipated cost and schedule growth during construction as well as technical problems during their in-service life. The authors will examine some of these ship designs which were based on an existing design and/or prototypes and highlight the fallacies of such beliefs and assumptions.83

Potential oversight questions for Congress include the following:

• How fully developed was Polarstern II’s design at the time that it was adopted as the parent design for developing the PSC design? How much of Polarstern II’s detail design and construction plan was completed at that time?

• To what degree has Polarstern II’s design in practice served as the parent design for the PSC design? In developing the PSC’s design, how many changes have been made from Polarstern II’s design? What technical, schedule, and cost risks, if any, might arise for the PSC program as a result of differences between the PSC’s design and Polarstern II’s design?

82 Allyson Park, “Coast Guard Reevaluating Polar Security Cutter Schedule,” National Defense, March 20, 2024.

83 Robert G. Keane Jr. and Barry F. Tibbitts, “The Fallacy of Using a Parent Design: ‘The Design Is Mature,’” Transactions (Society of Naval Architects and Marine Engineers [SNAME]), 2015, No. 1 (January): 91-104, with additional discussion from the authors and other commentators on pages 105-122. The quoted passage appears at the start of the article, on page 91, where it forms part of an abstract or summary for the article.

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May 2024 GAO Testimony

May 7, 2024, GAO testimony to the Transportation and Maritime Security subcommittee of the House Homeland Security Committee regarding Coast Guard ship acquisition stated

The U.S. Coast Guard manages its major shipbuilding programs—generally those with cost estimates of $1 billion or greater—using the Department of Homeland Security’s (DHS) acquisition framework. GAO’s prior work found that the Coast Guard continues to face challenges in its highest priority shipbuilding acquisition programs—the Offshore Patrol Cutter and the Polar Security Cutter.

Design instability. The shipbuilders have yet to stabilize their designs, which has contributed to schedule delays and cost growth for both programs. For example, the Offshore Patrol Cutter program began ship construction without a matured critical technology, which led to redesign of portions of the ship and contributed to delays of the lead ship by almost 4 years. GAO recommended in June 2023 that the program mature this same critical technology before moving forward through design on the next set of ships. DHS did not concur. GAO closed this recommendation in April 2024 after the Coast Guard approved a design review without maturing the critical technology. However, GAO stands by the intent of the recommendation to minimize risk to the program.

Program oversight. Both programs lack key milestones in their acquisition program baselines—a document that sets the program’s cost, schedule, and performance goals—to ensure adequate program oversight and accountability. For example, the Coast Guard did not include the delivery date of the last Polar Security Cutter in its acquisition program baseline. If included as a key event, failure to meet this date would trigger a formal assessment by DHS. In July 2023, GAO recommended that DHS and the Coast Guard include this delivery date in the acquisition program baseline, and the department concurred. Coast Guard officials told GAO they plan to include ship delivery dates in its revised baseline….

In May 2024, GAO identified leading practices in ship design, such as using iterative design to accelerate design maturity and employing robust in-house ship design capabilities and tools. These practices build on previous leading practices that GAO identified in product development and shipbuilding. Over the past decade, GAO has recommended numerous actions to the Coast Guard and DHS reflecting those practices—such as attaining design stability and developing solid business cases—to achieve successful shipbuilding outcomes.84

July 2023 GAO Testimony

July 27, 2023, GAO testimony to the Coast Guard and Maritime Transportation subcommittee of the House Transportation and Infrastructure Committee regarding the PSC program and the Coast Guard’s OPC program85 states

The Coast Guard’s shipbuilding programs—specifically the OPC and PSC programs— have struggled with achieving elements for a good business case. As a result of neither maturing technologies nor achieving design stability when called for by leading practices, both programs are well behind schedule. In addition, both programs’ cost estimates have

84 Government Accountability Office, Coast Guard Acquisitions[:] Opportunities Exist to Improve Shipbuilding Outcomes, Testimony Before the Subcommittee on Transportation and Maritime Security, Committee on Homeland Security, House of Representatives, Statement of Shelby S. Oakley, Director, Contracting and National Security Acquisitions, GAO-24-107488, May 7, 2024, highlights page.

85 For more on the OPC program, see CRS Report R42567, Coast Guard Cutter Procurement: Background and Issues for Congress, by Ronald O'Rourke.

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increased by billions of dollars for several reasons, including that their initial estimates were either not comprehensive or not well-informed.

Technology maturity and design stability. The Coast Guard’s OPC and PSC programs did not follow shipbuilding leading practices with regards to conducting, demonstrating, and achieving technology readiness and design stability….

Years after we first identified these deficiencies with the OPC and PSC programs, the Coast Guard still has not gained the requisite knowledge for its technologies and designs:…

PSC: In September 2018, we found that the Coast Guard did not conduct a technology readiness assessment of PSC’s key technologies, nor did it hold a preliminary design review, prior to approving its program baselines. Coast Guard officials said that a technology readiness assessment was not necessary because the technologies they plan to employ had been proven on other ships. However, according to leading practices, such technologies can still pose risks when applied to a different program or operational environment. The program subsequently conducted a technology readiness assessment and established revised baselines in May 2021 after holding its preliminary design review in response to our recommendations.

As of March 2023, the PSC program reported that the functional design was considerably below the desired levels that officials expect to inform a decision to proceed with construction. As of April 2023, program officials said they anticipate holding the production readiness reviews to evaluate design maturity by March 2024. However, since September 2021, with about 49 percent functional design completed, our analysis indicated that the shipyard is completing, on average, approximately three percent of functional design every 6 months. This means that it would take the shipyard approximately 8 years to complete 100 percent of functional design. Therefore, to reach the program’s goal of completing functional design completed prior to March 2024, the shipyard would need to increase its design completion rate significantly. Coast Guard officials said that design completion is further along than the metrics show because the metrics do not factor in progress made on design components that are not complete.

We also found that the program is experiencing challenges with the design. According to program officials, the design challenges are related to (1) U.S. industry’s general lack of experience designing and building icebreakers, (2) the complexity of PSC’s design, and (3) significant changes from the original design, among other things. Given that there are still portions of the design that are immature, we recommended that the Coast Guard complete functional design prior to approving construction for the lead ship, in line with our recommendation to OPC and Coast Guard policy, as a whole. The Coast Guard concurred with the recommendations, and we will monitor its progress in addressing them.

Cost. Both the OPC and PSC have incurred cost growth above their initial estimates, in part because the programs initially underestimated costs….

PSC: From 2018 to 2021, the program’s total life-cycle cost estimate increased by about 35 percent, from $9.8 billion to $13.3 billion. Most of the cost increase was driven by increased operations and maintenance costs, resulting from the increased ship size and use of additional historical data to reevaluate projected annual maintenance costs in the later estimate. The program’s additional analysis of historical maintenance costs in its January 2021 cost estimate addressed, in part, a recommendation we made in 2018 to update the cost estimate in accordance with leading practices in cost estimating. Specifically, in September 2018, we found that the PSC’s life-cycle cost estimate that informed the program’s $9.8 billion cost baseline substantially met GAO’s leading practices for being comprehensive, well-documented, and accurate, but only partially met leading practices for being credible.15 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

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have underestimated the cost. Consequently, the Coast Guard may have provided decision makers with incomplete data to make a decision on total funding needed for the program.

Schedule. The Coast Guard relied on optimistic schedules for both the PSC and OPC programs, and both have experienced schedule delays of 2 years or more…. The two programs’ schedule challenges have been exacerbated by a lack of reliable schedule data from the contractors responsible for building these ships….

PSC: In September 2018, we found that the PSC’s planned delivery dates were not informed by a realistic assessment of shipbuilding activities. Instead, the schedule was 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. We recommended that the program develop a schedule in accordance with leading practices for project schedules to set realistic schedule goals for all three PSCs before the lead ship contract option was awarded. However, we closed the recommendation as not implemented because the program proceeded with the award in April 2019 without developing a realistic schedule. In July 2023, we found the program had yet to establish a realistic schedule. The program’s current schedule estimates that delivery of the lead ship will occur in 2027, which is 3 years later than its previous estimate, but this could further slip after the contractor reassesses and revises its schedule.86

July 2023 GAO Report

A GAO report on the PSC program that was released on July 27, 2023, similarly states

The Polar Security Cutter’s (PSC) design is not yet mature, which has led to an extended design phase and contributed to a 3-year schedule delay in the shipyard, with construction of the first cutter now planned for March 2024. Coast Guard officials attribute the extended design phase to various challenges. For example, icebreaking hulls require thick steel—up to twice as thick as a non-icebreaker—and a dense framing structure that has been challenging to plan for the PSC. Additionally, Coast Guard officials stated that U.S.-based shipbuilders have limited expertise designing and building heavy polar icebreakers….

Starting construction with an immature design is contrary to leading practices. In another ongoing Coast Guard program, GAO found that construction started before the design was mature, resulting in costly rework and schedule delays.

The PSC program likely has unreliable schedule and cost estimates. The primary reasons are:

• The acquisition program baseline includes a delivery date for the first PSC but not for the third PSC. At a minimum, without a delivery date for the third cutter, the Department of Homeland Security (DHS) may have fewer opportunities for oversight if the program experiences schedule delays in the years before the program is expected to be declared fully operational.

• Key shipyard business systems that track labor hours, costs, and schedule performance were determined not to be acceptable for use, which affects the reliability of data. The Coast Guard and shipyard are taking steps to address the data limitations and GAO will continue to monitor progress.

The Coast Guard intends for its sole remaining, almost 50-year-old heavy polar icebreaker, the Polar Star, to be available until at least the second PSC is operational. The Coast Guard has efforts underway to maintain and extend the life of this cutter. However, the Polar

86 GAO, Coast Guard Recapitalization[:] Actions Needed to Better Manage Acquisition Programs and Address Affordability Concerns, Statement of Marie A. Mak, Director, Contracting and National Security Acquisitions, Testimony Before the Subcommittee on Coast Guard and Maritime Transportation, Committee on Transportation and Infrastructure, House of Representatives, July 27, 2023, GAO 23-106948, pp. 6-12.

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Star’s deteriorating systems present challenges, with top issues related to propulsion and electrical systems. The Coast Guard’s assessments of the hull found it in good structural condition.87

April 2023 GAO Report

A GAO report that was released on April 20, 2023, and which reports on the status of major DHS acquisition programs as of September 30, 2022, states the following about the PSC program:

Key Findings

• Schedule. The program no longer considers a May 2025 delivery date for the lead ship realistic. However, the program does not have enough information from the shipbuilder to determine a new delivery date or whether schedule goals will likely be breached.

• Design and construction. Design immaturity and the shipbuilder’s inexperience working with the specialized steel needed for hull construction remain the program’s top risks, according to program officials. To help train the shipbuilder’s workforce, the program is planning for an early production phase prior to completion of the design, contrary to GAO leading practices. The critical design review, scheduled for December 2022, will likely need to be postponed given the status of design progress.

• Management. Oversight of the program is hampered. The shipbuilder’s deficient business systems are not producing reliable accounting, schedule, and cost data. The Coast Guard is working with the shipbuilder to address these challenges....

Cost and Schedule Status

In 2021, DHS approved PSC’s revised acquisition program baseline (APB), which reflected a delayed schedule and higher life-cycle costs than the previously approved 2018 APB. However, as of August 2022, Coast Guard officials stated that they do not have reliable schedule information from the shipbuilder, Halter Marine, Inc., to determine whether it is likely to breach the schedule goals. For example, the contract delivery date for the lead ship is May 2025, which is 1 year later than initially planned. However, officials stated that May 2025 is no longer realistic because of challenges such as COVID- 19 effects and the shipbuilder’s inexperience with large government acquisitions. The program does not have enough information to determine and assess a new delivery date until Halter Marine, Inc., develops a new schedule, anticipated by March 2023. The program requested an adjustment to its schedule goals due to the effects of COVID-19 and is awaiting DHS approval.

According to Coast Guard officials, the program’s top schedule risks are PSC’s design immaturity, Halter Marine, Inc.’s inexperience with shaping the specialized steel needed for the hulls, and Halter Marine, Inc.’s contractor labor challenges. Coast Guard officials stated they are mitigating some of these risks by conducting studies on the specialized steel and planning for an early production phase. This phase will allow the shipbuilder to start constructing up to eight (out of 85) selected modules of the ship deemed to be low-risk prior to completing the ship’s design. While this approach is intended to train the shipbuilder’s workforce in working with the steel, starting construction prior to completing design is contrary to shipbuilding leading practices identified by GAO. If design changes are discovered after the modules are already constructed, the program may face costly rework and schedule delays.

Coast Guard officials stated that the program’s main tool in mitigating cost risks is the contract type for design and construction of the cutters—fixed-price incentive (firm-target)

87 GAO, Coast Guard Acquisitions[:] Polar Security Cutter Needs to Stabilize Design Before Starting Construction and Improve Schedule Oversight, GAO 23-105949, July 2023, highlights page.

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with economic price adjustment. This type of contract provides the shipbuilder with an incentive to control costs.

Performance and Testing

Design maturity continues to be a top risk identified by the program. Coast Guard officials stated that, as of August 2022, Halter Marine, Inc., had completed about 41 percent of the overall design. The program had planned to conduct a critical design review by December 2022 to further evaluate design maturity. However, Coast Guard officials stated that given the design progress, they will likely postpone the review to anywhere from May to December 2023. Coast Guard officials stated that they do not plan to authorize Halter Marine, Inc., to enter into the early production phase until after an initial critical design review and designs for the selected modules are mature.

Coast Guard officials stated that the program conducted a cyber resilience early operational assessment in May 2022 and deemed the results as sensitive. Coast Guard officials established two working groups to address cybersecurity issues, and cyber risks are managed as part of the program’s risk management team.

Program Management

The Coast Guard established an integrated program office and ship design team with the Navy. The Coast Guard also established a project residence office at the shipbuilder’s facility in Pascagoula, Mississippi, to provide oversight of shipbuilding efforts. However, the shipbuilder’s deficient business systems are hindering the Coast Guard’s oversight of the program. In June 2022, an independent audit found that Halter Marine, Inc.’s accounting system had significant deficiencies that affected the reliability of billing and pricing information produced. Further, in July 2022, an independent compliance review found that Halter Marine, Inc.’s earned value management system had significant deficiencies that hampers the program’s ability to monitor cost and schedule progress and develop a reliable schedule. Coast Guard officials stated that they are working with Halter Marine, Inc., to address these deficiencies.

In September 2018, GAO made six recommendations to DHS, the Coast Guard, and the U.S. Navy to address risks identified with the PSC program. As of September 2022, two of the six recommendations remain open. For additional information, see [GAO report] GAO-18-600.88

Program Office Comments

We provided a draft of this assessment to the program office for review and comment. The program office provided technical comments, which we incorporated where appropriate. According to the program office, the PSC is the first heavy polar icebreaker built in the U.S. in over 40 years and will be one of the most complex vessels ever built by the Coast Guard. Program officials stated that they have worked closely with the shipbuilder to mature the design of the ship and mitigate production risk. Officials added that ongoing challenges with supply chain disruptions and COVID-19 have affected this effort.89

PSC Program: Contract with Options vs. Block Buy Contract

Another potential issue for Congress is whether to use a contract with options or a block buy contract to acquire at least some of the PSCs. The detail design and construction (DD&C) contract that the Coast Guard awarded to Halter Marine (now Bollinger Mississippi Shipbuilding)

88 GAO, Coast Guard Acquisitions[:] Polar Icebreaker Program Needs to Address Risks before Committing Resources, GAO-18-600, September 2018, 68 pp.

89 GAO, DHS Annual Assessment[:] Major Acquisition Programs Are Generally Meeting Goals, but Cybersecurity Policy Needs Clarification, GAO-23-106701, April 2023, pp. 50-51.

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is a contract with options. Coast Guard and Navy officials, however, have expressed openness to the idea of using a block buy contract to acquire at least some of the ships (particularly the second and third PSCs), and requested information on the possibility of using block buy contracting as part of the request for proposals (RFP) for the PSC program that the Coast Guard released on March 2, 2018. Section 311 of the Frank LoBiondo Coast Guard Authorization Act of 2018 (S. 140/P.L. 115-282 of December 4, 2018) provides permanent authority for the Coast Guard to use block buy contracting with economic order quantity (EOQ) purchases (i.e., up-front batch purchases) of components in its major acquisition programs. The authority is now codified at 14 U.S.C. §1137.

Although a contract with options covers multiple years, it operates more like a form of annual contracting, and it does not generate the kinds of savings that are possible with a block buy contract. Compared with a contract with options, a block buy contract would reduce the government’s flexibility regarding whether and when to acquire the second and third ships, and what design to build them to,90 and in return reduce the combined acquisition cost of the ships covered by the contract. The Navy has used block buy contracts to reduce procurement costs of Virginia-class attack submarines and (in more recent years) Littoral Combat Ships (LCSs) and John Lewis (TAO-205) class oilers.91 Compared to costs using a contract with options, using a block buy contract that included EOQ purchases (i.e., up-front batch purchases) of materials and components for three heavy polar icebreakers could reduce the combined acquisition cost of three PSCs by a few or several percent.

A congressionally mandated July 2017 National Academies of Sciences, Engineering, and Medicine (NASEM) report on acquisition and operation of polar icebreakers states the following (emphasis as in original):

3. Recommendation: USCG should follow an acquisition strategy that includes block buy contracting with a fixed price incentive fee contract and take other measures to ensure best value for investment of public funds.

Icebreaker design and construction costs can be clearly defined, and a fixed price incentive fee construction contract is the most reliable mechanism for controlling costs for a program of this complexity. This technique is widely used by the U.S. Navy. To help ensure best long-term value, the criteria for evaluating shipyard proposals should incorporate explicitly defined lifecycle cost metrics....

A block buy authority for this program will need to contain specific language for economic order quantity purchases for materials, advanced design, and construction activities. A block buy contracting program with economic order quantity purchases enables series

90 Stated more fully, from a congressional perspective, trade-offs in using block buy contracting include the following:

—reduced congressional control over year-to-year spending, and tying the hands of future Congresses; —reduced flexibility for making changes in Coast Guard acquisition programs in response to unforeseen changes in strategic or budgetary circumstances (which can cause any needed funding reductions to fall more heavily on acquisition programs not covered by multiyear contracts); —a potential need to shift funding from later fiscal years to earlier fiscal years to fund economic order quantity (EOQ) purchases (i.e., up-front batch purchases) of components; —the risk of having to make penalty payments to shipbuilders if multiyear contracts need to be terminated due to unavailability of funds needed to the continue the contracts; and —the risk that materials and components purchased for ships to be acquired in future years might go to waste if those ships are not eventually acquired.

91 See CRS Report R41909, Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for Congress, by Ronald O'Rourke; CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress, by Ronald O'Rourke; and CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress, by Ronald O'Rourke.

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construction, motivates competitive bidding, and allows for volume purchase and for the timely acquisition of material with long lead times. It would enable continuous production, give the program the maximum benefit from the learning curve, and thus reduce labor hours on subsequent vessels....

If advantage is taken of learning and quantity discounts available through the recommended block buy contracting acquisition strategy, the average cost per heavy icebreaker is approximately $791 million, on the basis of the acquisition of four ships.92

Section 8111 of the Elijah E. Cummings Coast Guard Authorization Act of 2020 (Division G of FY2021 National Defense Authorization Act [H.R. 6395/P.L. 116-283]) states

SEC. 8111. POLAR ICEBREAKERS.

(a) IN GENERAL.—Section 561 of title 14, United States Code, is amended to read as follows:

‘‘§ 561. Icebreaking in polar regions

‘‘(a) PROCUREMENT AUTHORITY.—

‘‘(1) IN GENERAL.—The Secretary may enter into one or more contracts for the procurement of—

‘‘(A) the Polar Security Cutters approved as part of a major acquisition program as of November 1, 2019; and

‘‘(B) 3 additional Polar Security Cutters.

‘‘(2) CONDITION FOR OUT-YEAR CONTRACT PAYMENTS.—A contract entered into under paragraph (1) shall provide that any obligation of the United States to make a payment under the contract during a fiscal year after fiscal year 2019 is subject to the availability of appropriations or funds for that purpose for such later fiscal year.

‘‘(b) PLANNING.—The Secretary shall facilitate planning for the design, procurement, maintenance, deployment, and operation of icebreakers as needed to support the statutory missions of the Coast Guard in the polar regions by allocating all funds to support icebreaking operations in such regions, except for recurring incremental costs associated with specific projects, to the Coast Guard.

‘‘(c) REIMBURSEMENT.—Nothing in this section shall preclude the Secretary from seeking reimbursement for operation and maintenance costs of the Polar Star, Healy, or any other Polar Security Cutter from other Federal agencies and entities, including foreign countries, that benefit from the use of those vessels.

‘‘(d) RESTRICTION.—

‘‘(1) IN GENERAL.—The Commandant may not—

‘‘(A) transfer, relinquish ownership of, dismantle, or recycle the Polar Sea or Polar Star;

‘‘(B) change the current homeport of the Polar Sea or Polar Star; or

‘‘(C) expend any funds—

‘‘(i) for any expenses directly or indirectly associated with the decommissioning of the Polar Sea or Polar Star, including expenses for dock use or other goods and services;

92 National Academies of Sciences, Engineering, and Medicine, Division on Earth and Life Studies and Transportation Research Board, Acquisition and Operation of Polar Icebreakers: Fulfilling the Nation’s Needs, Letter Report, with cover letter dated July 11, 2017, pp. 14, 15.

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‘‘(ii) for any personnel expenses directly or indirectly associated with the decommissioning of the Polar Sea or Polar Star, including expenses for a decommissioning officer;

‘‘(iii) for any expenses associated with a decommissioning ceremony for the Polar Sea or Polar Star;

‘‘(iv) to appoint a decommissioning officer to be affiliated with the Polar Sea or Polar Star; or

‘‘(v) to place the Polar Sea or Polar Star in inactive status.

‘‘(2) SUNSET.—This subsection shall cease to have effect on September 30, 2022.

‘‘(e) LIMITATION.—

‘‘(1) IN GENERAL.—The Secretary may not expend amounts appropriated for the Coast Guard for any of fiscal years 2015 through 2024, for—

‘‘(A) design activities related to a capability of a Polar Security Cutter that is based solely on an operational requirement of a Federal department or agency other than the Coast Guard, except for amounts appropriated for design activities for a fiscal year before fiscal year 2016; or

‘‘(B) long-lead-time materials, production, or postdelivery activities related to such a capability.

‘‘(2) OTHER AMOUNTS.—Amounts made available to the Secretary under an agreement with a Federal department or agency other than the Coast Guard and expended on a capability of a Polar Security Cutter that is based solely on an operational requirement of such Federal department or agency shall not be treated as amounts expended by the Secretary for purposes of the limitation under paragraph (1).

‘‘(f) ENHANCED MAINTENANCE PROGRAM FOR THE POLAR STAR.—

‘‘(1) IN GENERAL.—Subject to the availability of appropriations, the Commandant shall conduct an enhanced maintenance program on the Polar Star to extend the service life of such vessel until at least December 31, 2025.

‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—The Commandant may use funds made available pursuant to section 4902(1)(A), to carry out this subsection.

‘‘(g) DEFINITIONS.—In this section:

‘‘(1) POLAR SEA.—The term ‘Polar Sea’ means Coast Guard Cutter Polar Sea (WAGB 11).

‘‘(2) POLAR STAR.—The term ‘Polar Star’ means Coast Guard Cutter Polar Star (WAGB 10).

‘‘(3) HEALY.—The term ‘Healy’ means Coast Guard Cutter Healy (WAGB 20).’’.

(b) CONTRACTING FOR MAJOR ACQUISITIONS PROGRAMS.—Section 1137(a) of title 14, United States Code, is amended by inserting ‘‘and 3 Polar Security Cutters in addition to those approved as part of a major acquisition program on November 1, 2019’’ before the period at the end.

(c) REPEALS.—

(1) COAST GUARD AND MARITIME TRANSPORTATION ACT OF 2006.—Section 210 of the Coast Guard and Maritime Transportation Act of 2006 (14 U.S.C. 504 note) is repealed.

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(2) COAST GUARD AND MARITIME TRANSPORTATION ACT OF 2012.—Section 222 of the Coast Guard and Maritime Transportation Act of 2012 (Public Law 112–213) is repealed.

(3) HOWARD COBLE COAST GUARD AND MARITIME TRANSPORTATION ACT OF 2014.—Section 505 of the Howard Coble Coast Guard and Maritime Transportation Act of 2014 (Public Law 113–281) is repealed.

(4) FRANK LOBIONDO COAST GUARD AUTHORIZATION ACT OF 2018.—Section 821 of the Frank LoBiondo Coast Guard Authorization Act of 2018 (Public Law 115–282) is repealed.

PSCs and ASCs: Using a Common Design

Another potential issue for Congress is whether to procure the Coast Guard’s envisioned fleet of PSCs (i.e., heavy polar icebreakers) and ASCs (i.e., medium polar icebreakers) to a common basic design. A congressionally mandated July 2017 report from NASEM on the acquisition and operation of polar icebreakers concluded that notional operational requirements for new medium polar icebreakers would result in ships that would not be too different in size from new heavy polar icebreakers. (As shown in Table A-1, the Coast Guard’s current medium polar icebreaker, Healy, is actually somewhat larger than the Coast Guard’s heavy polar icebreaker, Polar Star.) Given what it concluded as the probable similarity in size between future U.S. heavy and medium polar icebreakers, the NASEM report recommended building a single medium polar icebreaker to the same common design as three new heavy polar icebreakers. This approach, the report concluded, would reduce the cost of the medium icebreaker by avoiding the cost of developing a new design and by making the medium polar icebreaker the fourth ship on an existing production learning curve rather than the first ship on a new production learning curve.93 If policymakers were to decide to procure a second new ASC or a third new ASC, the same general approach recommended by the NASEM report could be followed—a second ASC and third ASC could be built to the same common design used for the three new PSCs and the first new ASC.

At a November 29, 2023, hearing before the House Homeland Security Committee on how U.S. Arctic strategy impacts homeland security, Vice Admiral Peter Gautier, Coast Guard Deputy Commandant for Operations, stated that the Coast Guard in coming years will need to have “a

93 National Academies of Sciences, Engineering, and Medicine, Division on Earth and Life Studies and Transportation Research Board, Acquisition and Operation of Polar Icebreakers: Fulfilling the Nation’s Needs, Letter Report, with cover letter dated July 11, 2017, pp. 2, 4-6. See also Calvin Biesecker, “Coast Guard Leaving Options Open for Future Polar Icebreaker Fleet Type,” Defense Daily, April 12, 2018. Section 8108 of the Elijah E. Cummings Coast Guard Authorization Act of 2020 (Division H/Division G of FY2021 National Defense Authorization Act [H.R. 6395/P.L. 116-283]) states

SEC. 8108. POLAR SECURITY CUTTER ACQUISITION REPORT. Not later than 1 year after the date of the enactment of this Act, the Commandant shall submit to the Committees on Transportation and Infrastructure and Armed Services of the House of Representatives, and the Committees on Commerce, Science, and Transportation and Armed Services of the Senate a report on— (1) the extent to which specifications, key drawings, and detail design for the Polar Security Cutter are complete before the start of construction; (2) the extent to which Polar Security Cutter hulls numbers one, two, and three are science ready; and (3) what actions will be taken to ensure that Polar Security Cutter hull number four is science capable, as described in the National Academies of Sciences, Engineering, and Medicine’s Committee on Polar Icebreaker Cost Assessment letter report entitled ‘‘Acquisition and Operation of Polar Ice breakers: Fulfilling the Nation’s Needs’’ and dated July 11, 2017.

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mix of heavy icebreakers like the Polar Star and the Polar Security Cutters that we’re building now, and medium icebreakers like the Healy that have shallower drafts and can get into tighter spaces and shallower areas.”94 Procuring ASCs as ships that have shallower drafts than PSCs for getting into tighter spaces and shallower areas could make it difficult or impossible for PSCs and ASCs to be built to the same common design: A ship’s draft is a basic design characteristic, and it might be difficult or impossible to reduce the PSC design’s draft enough to meet the Coast Guard’s desire to have ASCs be able to get into tighter spaces and shallower areas without making changes to the PSC design that would effectively make it a different design.

PSCs and ASCs: Using a Foreign Shipyard

Overview

Another potential issue for Congress concerns the possibility of building polar icebreakers for the U.S. Coast Guard in a foreign shipyard. Shipyards in Finland, for example, reportedly have expressed interest in building polar icebreakers for the U.S. Coast Guard.95 Some observers believe the acquisition cost of Coast Guard PSCs could be reduced, perhaps substantially, by building them in a foreign shipyard, such as a shipyard in Finland or in one of the other Nordic countries that is experienced in building icebreakers. Other observers question whether icebreaker designs offered by foreign shipbuilders would meet (or be a cost-effective way of providing) the Coast Guard’s desired capabilities for PSCs, which include capabilities for performing Coast Guard missions other than icebreaking. An October 9, 2017, press report states

Finland, the world leader in icebreaker design and construction, could help pull the United States out of its icebreaker crisis, a diplomat said at a business conference in Anchorage last week.

“The U.S. is now in dire straits about its own icebreaker fleet. They only have two and they are both seriously outdated. We can help,” Stefan Lindstrom, Finland’s Los Angeles-based consul general, said in a presentation at last week’s Arctic Ambitions conference held by the World Trade Center of Alaska....

If the U.S. makes a decision to buy a replacement from overseas, Finnish shipbuilders could respond quickly, Lindstrom said.

In Finland, a shipyard can build and deliver a polar-class icebreaker within 24 months after a contract is signed—a sharp contrast, Lindstrom said, to the extended discussions that the U.S. Coast Guard and Congress have had over planning for potential new icebreakers.

And the costs for a Finnish-designed and Finnish-built polar-class icebreaker is about 200 million to 220 million Euros ($235 [million] to [$]258 million), he said. That’s far lower than the price tag being discussed in the US.

“I have serious difficulties, however, understanding how you can pay a billion for an icebreaker that costs one-fifth of it if you order it from abroad,” Lindstrom said. “But I'm not going to go into those political situations.”96

It is unclear from the above-quoted remarks whether the €220-million polar-class icebreaker being referred to would qualify as a heavy, medium, or light polar icebreaker, or to what degree it

94 CQ transcript of hearing.

95 See, for example, Yereth Rosen, “Can the U.S. Benefit from Finland and Russia’s Icebreaker Expertise?” Arctic Now, October 9, 2017. See also Jim Paulin, “Finland Wants In on US Icebreaker Investment,” Alaska Dispatch News, September 8, 2015.

96 Yereth Rosen, “Can the U.S. Benefit from Finland and Russia’s Icebreaker Expertise?” Arctic Now, October 9, 2017.

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would meet the Coast Guard’s desired capabilities for PSCs, which include capabilities for performing Coast Guard missions other than icebreaking. Of the six Russian heavy polar icebreakers shown in Table B-1 (all of which are nuclear-powered), four were built in Russia, while the other two—sister ships named Taymyr and Vaygach that entered service around 1989 and 1990—were mostly built in Finland and then moved to a Russian shipyard for the installation of their nuclear reactors. All other Finnish-built icebreakers shown in Table B-1 (whether operated by Finland or other countries) could be considered, based on their brake horsepower (BHP), to be medium or light polar icebreakers.

Laws Relating to Building Ships in Foreign Shipyards

Some observers have suggested that a U.S. law known as the Jones Act prevents the U.S. Coast Guard from buying or operating a foreign-built polar icebreaker. The Jones Act, however, does not prevent the U.S. Coast Guard from buying or operating a foreign-built polar icebreaker.97 Two other laws, however, are of note in connection with the idea of building a U.S. Coast Guard polar icebreaker in a foreign shipyard. One is 14 U.S.C. §1151, which states the following:

§1151. Restriction on construction of vessels in foreign shipyards

(a) Except as provided in subsection (b), no Coast Guard vessel, and no major component of the hull or superstructure of a Coast Guard vessel, may be constructed in a foreign shipyard.

(b) The President may authorize exceptions to the prohibition in subsection (a) when the President determines that it is in the national security interest of the United States to do so. The President shall transmit notice to Congress of any such determination, and no contract may be made pursuant to the exception authorized until the end of the 30-day period beginning on the date the notice of such determination is received by Congress.

The other is 10 U.S.C. §8679, which states the following:

§8679. Construction of vessels in foreign shipyards: prohibition

(a) Prohibition.-Except as provided in subsection (b), no vessel to be constructed for any of the armed forces,98 and no major component of the hull or superstructure of any such vessel, may be constructed in a foreign shipyard.

97 The Jones Act (Section 27 of the Merchant Marine Act of 1920, P.L. 66-261) applies to vessels transporting “merchandise” from one U.S. point to another U.S. point. It requires that such transportation be performed in U.S.-built vessels owned by U.S. citizens and registered in the United States; U.S. registration, in turn, requires that crew members be U.S. citizens. Merchandise is defined to include “merchandise owned by the U.S. Government, a State, or a subdivision of a State; and valueless material” (46 U.S.C. §55102). Merchandise is further defined at 19 U.S.C. §1401(c) to mean “goods, wares, and chattels of every description.” It is the waterborne transportation of merchandise domestically that triggers the Jones Act. A vessel wishing to engage in such transportation would apply to the U.S. Coast Guard for a “coastwise endorsement.” Thus, an icebreaker strictly performing the task it is designed for and not transporting cargo from one U.S. point to another would not be subject to the Jones Act. The federal agency in charge of deciding what kind of maritime activity must comply with the Jones Act, U.S. Customs and Border Protection (CBP), has confirmed that icebreaking is not one of those activities. In a 2006 ruling, which appears to be its most recent ruling on the subject, CPB informed Alcoa, Inc. that it could use foreign-built and foreign- flagged vessels for icebreaking on the Hudson River in New York State. CBP reasoned that the transporting of equipment, supplies, and materials used on or from the vessel in effecting its service is not coastwise trade, provided that these articles are necessary for the accomplishment of the vessel’s mission and are usually carried aboard the vessel as a matter of course. The 2006 ruling cited earlier rulings in 1974, 1985, and 2000 as precedent.

98 14 U.S.C. §101, which establishes the Coast Guard, states the following: “The Coast Guard, established January 28, 1915, shall be a military service and a branch of the armed forces of the United States at all times.”

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(b) Presidential Waiver for National Security Interest.-(1) The President may authorize exceptions to the prohibition in subsection (a) when the President determines that it is in the national security interest of the United States to do so.

(2) The President shall transmit notice to Congress of any such determination, and no contract may be made pursuant to the exception authorized until the end of the 30-day period beginning on the date on which the notice of the determination is received by Congress.

(c) Exception for Inflatable Boats.-An inflatable boat or a rigid inflatable boat, as defined by the Secretary of the Navy, is not a vessel for the purpose of the restriction in subsection (a).

Trilateral Polar Icebreaker Collaboration Effort (ICE Pact)

A potential oversight issue for Congress is how, if at all, the possibility of building polar icebreakers for the U.S. Coast Guard in a foreign shipyard might be affected by the July 2024 trilateral polar Icebreaker Collaboration Effort (ICE Pact) discussed earlier.

CAPI (Aiviq): Total Cost to Purchase and Modify

Another potential issue for Congress concerns the total cost to purchase Aiviq and modify it for use as a Coast Guard polar icebreaker under the CAPI program. Potential oversight questions for Congress include the following:

• How does the purchase price of Aiviq compare to the $125.0 million in FY2024 procurement funding provided for the CAPI program?

• In addition to its acquisition cost, how much additional funding does the Coast Guard anticipate needing to complete all modifications needed for Aiviq to meet the Final Operational Capability (FOC) requirements for the ship?

As mentioned earlier, the Coast Guard’s FY2025 UPL includes an item for $25.0 million in procurement funding for the CAPI program “for survey and design activities, modifications, and integrated logistics support required to advance towards full operational capability.”99

Legislative Activity for FY2025

Summary of Appropriation Action on FY2025 Funding Request

Table 3 summarizes congressional appropriation action on the Coast Guard’s FY2025 procurement funding requests for icebreakers.

99 U.S. Coast Guard, FY 2025 Unfunded Priorities List, Report to Congress, March 11, 2024, p. 2.

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Table 3. Summary of Congressional Appropriations Action on

FY2025 Procurement Funding Request

(In millions of dollars)

Request HAC SAC Enacted

Polar Security Cutter (PSC) 0 0

Commercially available polar icebreaker (CAPI) 0* 0

Great Lakes icebreaker (GLIB) 0* 0

Source: Table prepared by CRS, based on Coast Guard’s FY2024 budget submission, HAC and SAC committee reports, and explanatory report on FY2025 DHS Appropriations Act. Notes: HAC is House Appropriations Committee; SAC is Senate Appropriations Committee. * The Coast Guard’s FY2025 Unfunded Priorities list (UPL) includes an item for $25.0 million in procurement funding for the CAPI program and another item for $25.0 million in procurement funding for the GLIB program.

FY2025 DHS Appropriations Act (H.R. 8752)

House

The House Appropriations Committee, in its report (H.Rept. 118-553 of June 14, 2024) on H.R. 8572, recommended the funding levels shown in the HAC column of Table 3. H.Rept. 118-53 states

The Coast Guard is directed to continue to brief the Committee quarterly on all major acquisitions. In particular, the Committee remains concerned about the cost and schedule of the Offshore Patrol Cutter (OPC) and Polar Security Cutter (PSC) programs and the briefing should include additional detailed information on the progress of these programs….

Polar Security Cutter.—The Committee remains supportive of the construction of the first PSC. The Committee notes that no funds are needed this fiscal year for the construction given appropriations designated in previous years for PSC. The Committee supports the Coast Guard using previously appropriated PSC funds for the construction of the first PSC….

Great Lakes Icebreaker.—The recommendation does not provide funding for a Great Lakes Icebreaker. The $20,000,000 provided in fiscal year 2024 will allow the Coast Guard to continue the analyze and select phase of the acquisition for a Great Lakes Icebreaker. The Committee notes that icebreaking technology has advanced since the acquisition of the CGC Mackinaw and urges the Coast Guard to consider innovative technologies and advances in ship design as the program management office works to complete the necessary pre-acquisition activities. A failure to capitalize on these advancements would be a lost opportunity. Additionally, the Committee urges the Coast Guard to consider the limitations in the CGC Mackinaw’s maneuverability and whether such limitations adversely impact the vessel’s capability. Further, in order for the Coast Guard to leverage the capacity of the Nation’s industrial base, including the Coast Guard’s organic vessel repair capacity at the Coast Guard Yard, the Committee encourages the Service to prioritize designs that would allow the vessel to be able to fully exit the Great Lakes. (Pages 53 and 54)

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Appendix A. Current U.S. Polar Icebreakers and Polar Research Ships

This appendix provides background information on current U.S. polar icebreakers and polar research ships.

Three Coast Guard Polar Icebreakers

Two Heavy Polar Icebreakers—Polar Star and Polar Sea

Polar Star (WAGB-10) and Polar Sea (WAGB-11),100 sister ships built to the same general design (Figure A-1 and Figure A-2), were acquired in the early 1970s as replacements for earlier U.S. icebreakers. They were designed for 30-year service lives, and were built by Lockheed Shipbuilding of Seattle, WA, a division of Lockheed that also built ships for the U.S. Navy, but which exited the shipbuilding business in the late 1980s.

The ships are 399 feet long and displace about 13,200 tons.101 They are among the world’s most powerful nonnuclear-powered icebreakers, with a capability to break through ice up to 6 feet thick at a speed of 3 knots. Because of their icebreaking capability, they are considered (in U.S. parlance) heavy polar icebreakers. In addition to a crew of 134, each ship can embark a scientific research staff of 32 people.

Polar Star was commissioned into service in 1976, and consequently is now more than 15 years beyond its originally intended 30-year service life. Due to worn-out electric motors and other problems, the Coast Guard placed the ship in caretaker status on July 1, 2006.102 Congress in FY2009 and FY2010 provided funding to repair Polar Star and return it to service for 7 to 10 years; the repair work, which reportedly cost about $57 million, was completed, and the ship was reactivated on December 14, 2012.103

Polar Sea was commissioned into service in 1977, and consequently is also more than 15 years beyond its originally intended 30-year service life. In 2006, the Coast Guard completed a rehabilitation project that extended the ship’s expected service life to 2014. On June 25, 2010, however, the Coast Guard announced that Polar Sea had suffered an engine casualty, and the ship was unavailable for operation after that.104 The Coast Guard placed Polar Sea in commissioned, inactive status on October 14, 2011. The Coast Guard transferred certain major equipment from Polar Sea to Polar Star to facilitate Polar Star’s return to service.105

100 The designation WAGB means Coast Guard icebreaker. More specifically, W means Coast Guard ship, A means auxiliary, G means miscellaneous purpose, and B means icebreaker.

101 By comparison, the Coast Guard’s new National Security Cutters—its new high-endurance cutters—are about 418 feet long and displace roughly 4,000 tons.

102 Source for July 1, 2006, date: U.S. Coast Guard email to CRS on February 22, 2008. The Coast Guard’s official term for caretaker status is “In Commission, Special.”

103 See, for example, Kyung M. Song, “Icebreaker Polar Star Gets $57 Million Overhaul,” Seattle Times, December 14, 2012.

104 “Icebreaker POLAR SEA Sidelined by Engine Troubles,” Coast Guard Compass (Official Blog of the U.S. Coast Guard), June 25, 2010. See also “USCG Cancels Polar Icebreaker’s Fall Deployment,” DefenseNews.com, June 25, 2010; Andrew C. Revkin, “America’s Heavy Icebreakers Are Both Broken Down,” Dot Earth (New York Times blog), June 25, 2010.

105 Source: October 17, 2011, email to CRS from Coast Guard Congressional Affairs office. Section 222 of the Coast (continued...)

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Figure A-1. Polar Star and Polar Sea

(Side by side in McMurdo Sound, Antarctica)

Source: Coast Guard photograph that was accessed on November 19, 2024, at https://web.archive.org/web/ 20080917122344/http://www.uscg.mil/pacarea/cgcpolarsea/history.asp. The photograph accompanies Kyung M. Song, “Senate Passes Cantwell Measure to Postpone Scrapping of Polar Sea Icebreaker,” Seattle Times, September 22, 2012, accessed November 19, 2024, at https://web.archive.org/web/20121116160404/http:// blogs.seattletimes.com/politicsnorthwest/2012/09/22/senate-passes-cantwell-measure-to-postpone-scrapping-of- polar-sea-icebreaker/.

Although the Coast Guard in recent years has invested millions of dollars to overhaul, repair, and extend the service life of Polar Star, the ship’s material condition, as a result of its advancing age, has nevertheless become increasingly fragile, if not precarious. During its annual deployments to McMurdo Station in Antarctica, shipboard equipment frequently breaks, and shipboard fires sometimes occur.106 Replacements for many of the ship’s components are no longer commercially available. To help keep Polar Star operational, the Coast Guard continues to use Polar Sea as a source of replacement parts.

Guard and Maritime Transportation Act of 2012 (H.R. 2838/P.L. 112-213 of December 20, 2012) prohibited the Coast Guard from removing any part of Polar Sea and from transferring, relinquishing ownership of, dismantling, or recycling the ship until it submitted a business case analysis of the options for and costs of reactivating the ship and extending its service life to at least September 30, 2022, so as to maintain U.S. polar icebreaking capabilities and fulfill the Coast Guard’s high latitude mission needs, as identified in the Coast Guard’s July 2010 High Latitude Study. The business case analysis was submitted to Congress with a cover date of November 7, 2013. For more on the High Latitude Study, see Appendix B.

106 See, for example, Richard Read, “Meet the Neglected 43-Year-Old Stepchild of the U.S. Military-Industrial Complex,” Los Angeles Times, August 2, 2019; Melody Schreiber, “The Only Working US Heavy Icebreaker Catches Fire Returning from Antarctica,” Arctic Today, March 2, 2019; Calvin Biesecker, “Fire Breaks Out on Coast Guard’s Aging, and Only, Heavy Icebreaker,” Defense Daily, March 1, 2019.

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Figure A-2. Polar Sea

Source: Coast Guard photograph that was accessed November 19, 2024, at https://web.archive.org/web/ 20160229010100/http://www.uscg.mil/pacarea/cgcpolarsea/img/PSEApics/FullShip2.jpg. The photograph accompanies Associated Press, “Reprieve for Seattle-Based Icebreaker Polar Sea,” KOMO News, June 15, 2012, accessed November 19, 2024, at https://komonews.com/news/local/reprieve-for-seattle-based-icebreaker-polar- sea.

One Medium Polar Icebreaker—Healy

Healy (WAGB-20) (Figure A-3) was funded in the early 1990s as a complement to Polar Star and Polar Sea, and was commissioned into service on August 21, 2000.

Figure A-3. Healy

Source: Coast Guard photograph accessed November 19, 2024, at https://www.history.uscg.mil/US-Coast- Guard-Photo-Gallery/igphoto/2002136680/.

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The procurement of Healy was funded largely (about 89%) through the Navy’s shipbuilding account (i.e., the Shipbuilding and Conversion, Navy, or SCN account).107

The ship was built by Avondale Industries, a shipyard located near New Orleans, LA, that built numerous Coast Guard and Navy ships, and which eventually became part of Huntington Ingalls Industries (HII). (HII subsequently wound down shipbuilding activities at Avondale, and the facility no longer builds ships.)

Although it is referred to (in U.S. parlance) as a medium polar icebreaker, Healy is actually larger than Polar Star and Polar Sea—it is 420 feet long and displaces about 16,000 tons. Compared to Polar Star and Polar Sea, Healy has less icebreaking capability (which is why it is referred to as a medium polar icebreaker rather than a heavy polar icebreaker), but more capability for supporting scientific research. The ship can break through ice up to 4½ feet thick at a speed of 3 knots, and embark a scientific research staff of 35 (with room for another 15 surge personnel and 2 visitors). The ship is used primarily for supporting scientific research and conducting other operations in the Arctic.

Three National Science Foundation (NSF) Polar Research Ships

Nathaniel B. Palmer

Nathaniel B. Palmer (Figure A-4) was built for the NSF in 1992 by North American Shipbuilding, of Larose, LA. Called Palmer for short, it is operated for NSF by Edison Chouest Offshore (ECO) of Galliano, LA, a firm that owns and operates research ships and offshore deepwater service ships.108 Palmer is 308 feet long and has a displacement of about 6,500 tons. It has a crew of 22 and can embark a scientific staff of 27 to 37.109 It was purpose-built as a single- mission ship for conducting and supporting scientific research in the Antarctic. It is capable of breaking ice up to 3 feet thick at speeds of 3 knots, which is sufficient for breaking through the ice conditions found in the vicinity of the Antarctic Peninsula, so as to resupply Palmer Station, a U.S. research station on the peninsula. The ship might be considered less an icebreaker than an oceanographic research ship with enough icebreaking capability for the Antarctic Peninsula.

107 The somewhat complicated funding history for the ship is as follows: The Coast Guard’s proposed FY1990 budget requested $244 million for the acquisition of an icebreaker. The FY1990 DOD Appropriations Act (H.R. 3072/P.L. 101-165 of November 21, 1989) provided $329 million for the ship in the SCN account. (See pages 77 and 78 of H.Rept. 101-345 of November 13, 1989.) This figure was then reduced by $4.2 million by a sequester carried out under the Balanced Budget And Emergency Deficit Control Act of 1985, also known as the Gramm-Rudman-Hollings Act (H.J.Res. 372/P.L. 99-177 of December 12, 1985). Another $50 million was rescinded by the Dire Emergency Supplemental Appropriations for Disaster Assistance, Food Stamps, Unemployment Compensation Administration, and Other Urgent Needs, and Transfers, and Reducing Funds Budgeted for Military Spending Act of 1990 (H.R. 4404/P.L. 101-302 of May 25, 1990). An additional $59 million for the ship was then appropriated in the FY1992 DOD Appropriations Act (H.R. 2521/P.L. 102-172 of November 26, 1991). Also, an additional $40.4 million in procurement funding for the ship was provided through a series of annual appropriations in the Coast Guard’s Acquisition, Construction, and Improvements (AC&I) account (as it was known prior to FY2019) from FY1988 through FY2001. The resulting net funding for the ship was thus $374.2 million, of which $333.8 million, or 89.2%, was DOD funding, and $40.4 million, or 10.8%, was Coast Guard procurement funding. (Source: Undated Coast Guard information paper provided to CRS by Coast Guard legislative liaison office, March 3, 2016.)

108 For more on ECO, see the firm’s website at http://www.chouest.com/.

109 Sources vary on the exact number of scientific staff that can be embarked on the ship. For some basic information on the ship, see http://www.nsf.gov/od/opp/support/nathpalm.jsp; http://www.usap.gov/vesselScienceAndOperations/ documents/prvnews_june03.pdfprvnews_june03.pdf; http://nsf.gov/od/opp/antarct/treaty/pdf/plans0607/15plan07.pdf; http://www.nsf.gov/pubs/1996/nsf9693/fls.htm; and http://www.hazegray.org/worldnav/usa/nsf.htm.

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Palmer’s icebreaking capability is not considered sufficient to perform the McMurdo resupply mission.

Figure A-4. Nathaniel B. Palmer

Source: Photograph accompanying Peter Rejcek, “System Study, LARISSA Takes Unique Approach for Research on Ice Shelf Ecosystem,” Antarctic Sun (U.S. Antarctic Program), September 18, 2009. A caption to the photograph states “Photo Courtesy: Adam Jenkins.”

Laurence M. Gould

Like Palmer, the polar research and supply ship Laurence M. Gould (Figure A-5) was built for NSF by North American Shipping. It was completed in 1997 and is operated for NSF on a long- term charter from ECO. It is 230 feet long and has a displacement of about 3,800 tons. It has a crew of 16 and can embark a scientific staff of 26 to 28 (with a capacity for 9 more in a berthing van). It can break ice up to 1 foot thick with continuous forward motion. Like Palmer, it was built to support NSF operations in the Antarctic, particularly operations at Palmer Station on the Antarctic Peninsula.

Sikuliaq

Sikuliaq (see-KOO-lee-auk; Figure A-6), which is used for scientific research in polar areas, was built by Marinette Marine of Marinette, WI, and entered service in 2015. It is operated for NSF by the College of Fisheries and Ocean Sciences at the University of Alaska Fairbanks as part of the U.S. academic research fleet through the University National Oceanographic Laboratory System (UNOLS). Sikuliaq is 261 feet long and has a displacement of about 3,600 tons. It has a crew of 22 and can embark an additional 26 scientists and students. The ship can break ice 2½ or 3 feet thick at speeds of 2 knots. The ship is considered less an icebreaker than an ice-capable research ship.

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Figure A-5. Laurence M. Gould

Source: Photograph accompanying Alchetron, “RV Laurence M. Gould,” updated August 25, 2018, accessed November 19, 2024, at https://alchetron.com/RV-Laurence-M.-Gould.

Figure A-6. Sikuliaq

Source: Photograph accompanying Lauren Frisch, “UAF Joins International Consortium of Icebreaker Operators,” UAF [University of Alaska Fairbanks] News and Information, February 6, 2018. A caption to the photograph states in part: “Photo by Mark Teckenbrock. The research vessel Sikuliaq navigates through Arctic ice in summer 2016.”

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Summary of Above Ships

Table A-1 summarizes the above six ships.

Table A-1. Coast Guard and NSF Polar Ships

Coast Guard NSF

Polar Star Polar Sea Healy Palmer

Laurence

M. Gould Sikuliaq

Currently operational? Yes No Yes Yes Yes Yes

Entered service 1976 1977 2000 1992 1997 2015

Length (feet) 399 399 420 308 230 261

Displacement (tons) 13,200 13,200 16,000 6,500 3,780 3,665

Icebreaking capability (ice thickness in feet) at 3 knots or other speed

6 feet 6 feet 4.5 feet 3 feet 1 foot at

continuous

forward

motion

2.5 or 3

feet at 2

knots

Icebreaking capability using back and ram (ice thickness in feet)

21 feet 21 feet 8 feet n/a n/a n/a

Operating temperature -60o Fahrenheit -60o

Fahrenheit

-50o

Fahrenheit

n/a n/a n/a

Crew (when operational) 155a 155a 85b 22 16 22

Additional scientific staff 32 32 35c 27-37 26 to 28d 26

Sources: Prepared by CRS using data from U.S. Coast Guard, National Research Council, National Science Foundation, DHS Office of Inspector General, and (for Palmer) additional online reference sources. Notes: n/a is not available. a. Includes 24 officers, 20 chief petty officers, 102 enlisted, and 9 in the aviation detachment.

b. Includes 19 officers, 12 chief petty officers, and 54 enlisted.

c. In addition to 85 crew members 85 and 35 scientists, the ship can accommodate another 15 surge personnel and 2 visitors.

d. Plus 9 more in a berthing van.

Commercial Ship Aiviq (Ship to Be Purchased Under CAPI Program)

In addition to the ships shown in Table A-1, another U.S.-registered polar ship with icebreaking capability—the 360-foot Arctic oil-exploration support ship Aiviq (Figure A-7 and Figure A-8)— was used by Royal Dutch Shell oil company to support an oil exploration and drilling effort (now ended) in Arctic waters off Alaska. The ship, which completed construction in 2012, was owned by ECO. It was used primarily for towing and laying anchors for drilling rigs, but is also equipped for responding to oil spills. As discussed earlier in this report, the Coast Guard, under the Commercially Available Polar Icebreaker (CAPI) program, is purchasing Aiviq and modifying it for use as a Coast Guard medium polar icebreaker.

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Figure A-7. Commercial Ship Aiviq

Source: AIVIQ - IMO 9579016,” Shipspotting.com, undated, accessed November 19, 2024, at https://www.shipspotting.com/photos/1523039. The photograph, dated March 24, 2012, is credited to PJBlackbird.

Figure A-8. Commercial Ship Aiviq

Source: Cropped version of photograph accompanying “Aiviq,” Wikipedia, accessed November 19, 2024, which states that the photograph is dated December 30, 2012, and credits the photograph to U.S. Coast Guard Petty Officer 3rd Class Chris Usher.