GAO Finds Unreliable Schedule and Cost Estimates for USCG Polar Cutters

The Government Accountability Office (GAO) issued a critical report on the U.S. Coast Guard’s Polar Security Cutter Program citing significant on-going delays in finalizing the design of the vessels and the lack of a revised program baseline. Completing a 15-month review of the program at the behest of the U.S. House Committee of Transportation and Infrastructure, the GAO concludes the “PSC program likely has unreliable schedule and cost estimates.” 

The GAO does not question the importance of building the new cutters acknowledging that they would be the first heavy polar icebreakers that any U.S. government agency has bought in almost 50 years. They cite the U.S. Coast Guard’s position that the two current icebreakers, Polar Star and Healy, are insufficient to meet the multifaceted mission in the polar regions. They cite the increase in ship traffic because of the reduced presence of sea ice opening new navigable seaways. They cite reports that found other countries are also making military investments to support the pursuit of hydrocarbon, mineral, and fishery claims, acknowledging the U.S. requires more of a presence in the region.

The Polar Security Cutter program awarded a fixed-price contract in 2019 to VT Halter Marine for detailed design and construction. The report outlines the complexity of the design saying it requires approximately 600 design drawings, over 300 of which will also need to be reviewed by the American Bureau of Shipping, as well as a data requirement list that contains nearly 400 items related to the design and engineering that the shipyard must provide.

The nature of the vessel requires specialized steel, thicker hull plating, and more internal structural framing to add strength. For example, in addition to the force of icebreaking, the hull will be subjected to temperature transitions near the waterline that can vary nearly 80 degrees from 28 degrees in seawater to minus 50 degrees in air while breaking ice.

The 2018 timeline estimated construction time of three years which the GAO calls “optimistic compared with selected lead ships from other shipbuilding programs.” The 2023 target delivery date they believe was not informed by a realistic assessment of required shipbuilding activities. 

“Our analysis indicates that the Coast Guard is not likely to meet the program’s projected date to hold the final production readiness review need to inform a production design on the lead cutter,” writes the GAO. The program originally called for the design to be fully matured by March 2021 but as of April 2023, program officials told the GAO that the earliest they expect the design to be matured is March 2024.

Among the factors delaying the design, the GAO cites U.S.-based designers and shipbuilders generally lack experience in polar icebreakers along with the complexity of the design. They, however, also report significant design changes during the project and the impacts of the COVID-19 pandemic. Also, the sale of VT Halter to Bollinger Shipyard last year slowed work from late 2021 to mid-2022.

“The shipyard (VT Halter) likely overestimated the extent to which it could leverage this original design and underestimated the magnitude of the design changes required to meet PSC requirements,” writes the GAO. The cutters needed to be shorter in length and the shipyard made errors in design calculations that required significant late design revisions. They cite that in May 2022 the shipyard identified that the height of the damage control deck needed to be moved and raised, also requiring resizing of tanks. It took the yard till November 2022 to make those changes. In September 2021, the shipyard and USCG also agreed to about 20 different changes to the design requirements.

The design is progressing slowly the GAO concludes despite Bollinger inserting its experts into the program after acquiring the yard. Since September 2021, they found on average approximately three percent of functional design and six percent of transitional design maturation was happening every six months. At that rate, the GCO says it would take the shipyard approximately eight years to complete functional design.

The Coast Guard told the GAO they are further along than the metrics show and that the design completion rate has begun to increase. The GAO highlights that they would have to increase design completion to almost 21 percent for each of the two remaining six-month periods to reach the March 2024 goal. As of March 2023, they access that about 50 percent of the design that has to go to ABS have been submitted and approximately 17 percent had been approved.

The GAO is concerned that the ability to hold reviews with completion is years away. The program indicated in July 2022 that the delivery date of May 2025 for the lead cutter and the program’s master schedule is no longer achievable. A review is underway and they expect to complete the formal program assessment in October 2023.

The GAO concludes the “design remains immature, progressing slowing,” saying the USCG faces several challenges that will delay progress if it does not act. The GAO is concerned that the program might attempt to start construction before the design is mature. They recommend to the Department of Homeland Security that it ensures design is mature before authorizing the lead cutter construction beyond the previously approved eight prototype units. They also call on the DHS Secretary to ensure that the third cutter is added into the program baseline as soon as practical. 

DHS reviewed the GAO recommendations and concurs. They respond that the design maturity is now targeted for September 30, 2024. They also cite the ongoing program review which they believe is critical to establishing new realistic schedule objective and threshold values which would permit the third cutter to be added to the baseline. They said this is scheduled to be completed by June 28, 2024.

All of this is happening as the Polar Star faces deteriorating condition and parts obsolescence. In 2017, the USCG found far-reaching material deficiencies and concerns with the Polar Star’s systems and has been undertaking a life extension program. The goal is to keep the Polar Star in service until the second PSC is ready for service.