Inspector general sounds alarm on Coast Guard's risky Fast Response Cutter program.

• Author: Magnuson, Stew
• Position: Homeland Security News

* Faced with mounting pressures to replace its rapidly aging 110-foot ships, the Coast Guard embarked on an accelerated program to build a new fleet of Fast Response Cutters.

The Department of Homeland Security inspector general now says that gamble may end up costing the service and taxpayers more money than originally planned.

"The Coast Guard has executed an aggressive, schedule-driven strategy that allowed construction of the Fast Response Cutters to start before operational, design and technical risks were resolved," the IG report stated.

The Coast Guard awarded a fixed-price contract to Bollinger Shipyards LLC in 2008 to build the first of the new cutters for $88.2 million. Since then, the Coast Guard spent $597 million on contract options for an additional 12 cutters.

Six of those cutters under construction have already required rework totaling an extra 270 days for each ship, and an additional $7 million to rectify the problems, the IG said.

Work proceeded despite the fact that the first ship had not carried out a series of operational tests that could find potential problems, the report said.

"It is uncertain whether the Fast Response Cutters will perform as intended until it completes operational test and evaluation in actual maritime environments," the report said.

The Coast Guard took steps to mitigate the risk, the report acknowledged. The FRC was based on a proven design, the service followed the American Bureau of Shipping classification requirements, and there were in-design reviews and shore-based testing.

The IG suggested that the Coast Guard went against its own "Major System Acquisition Manual," which stated that production be minimally sustained until operational test and evaluation is completed.

There are two potential pitfalls as the program moves forward without sufficient operational tests, the IG cautioned.

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