GAO: Costs of Coast Guard modernization to soar by $2 billion

Projected costs have jumped from $24.2 billion to $26.3 billion, and could increase further, analyst tells lawmakers.

The Government Accountability Office estimated Tuesday the cost of the long-delayed Coast Guard Deepwater ship and aircraft construction program would rise again, jumping $2.1 billion from the $24.2 billion forecast two years ago.

Stephen Caldwell, director of GAO's Homeland Security and Justice Issues department, told the Senate Commerce Oceans, Atmosphere, Fisheries and Coast Guard Subcommittee there might be further "cost growth" beyond the new $26.3 billion estimate.

As a result, the higher costs might present the Coast Guard challenges involving potential tradeoffs in the program to upgrade its aging fleet, he said. But Coast Guard Commandant Thad Allen told the subcommittee the service is analyzing each project. "I think it will change -- hopefully, it will go down," he said.

Oceans, Atmosphere, Fisheries and Coast Guard Subcommittee Chairwoman Maria Cantwell, D-Wash., and ranking member Olympia Snowe, R-Maine, said they were concerned about the rising costs.

Overall, the costs of the Deepwater program are not only going up, but the completion goal is moving from 2018 to 2027 for dozens of ships and planes, Cantwell said.

Allen also told Cantwell he endorsed a pending bill reauthorizing Coast Guard functions for fiscal 2010 and fiscal 2011, including its proposed overhauls, such as creation of a high-level chief acquisition officer to monitor performance of programs and projects.

"The Coast Guard continues to face several management challenges," Caldwell said. As an example, he said the Coast Guard's proposed newest ship, the National Security cutter, has encountered delays that he said will "result in the loss of thousands of operational days for conducting missions through 2017."

But he added that the Coast Guard is taking steps to implement past GAO recommendations for improving the management of the construction program. The full Senate Commerce Committee is expected to mark up and approve the authorization bill Wednesday.