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

 
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Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress
[link to fas.org (secure)]
olar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress
Updated August 7, 2019
Congressional Research Service
[link to crsreports.congress.gov (secure)] RL34391

Coast Guard Polar Security Cutter (Polar Icebreaker) Program
Summary
The Coast Guard Polar Security Cutter (PSC) program is a program to acquire three new heavy polar icebreakers, to be followed years from now by the acquisition of up to three new medium polar icebreakers. The Coast Guard estimates the total procurement costs of the three heavy polar icebreakers as $1,039 million (i.e., about $1.0 billion) for the first ship, $792 million for the second ship, and $788 million for the third ship, for a combined estimated cost of $2,619 million (i.e., about $2.6 billion). Within those figures, the shipbuilder’s portion of the total procurement cost is $746 million for the first ship, $544 million for the second ship, and $535 million for the third ship, for a combined estimated shipbuilder’s cost of $1,825 million (i.e., about $1.8 billion).
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 VT Halter Marine of Pascagoula, MS, a shipyard owned by Singapore Technologies (ST) Engineering. VT Halter was the leader of one of three industry teams that competed for the DD&C contract. The first PSC is scheduled to begin construction in 2021 and be delivered in 2024, though the DD&C contract includes financial incentives for earlier delivery.
The DD&C contract includes options for building the second and third PSCs. If these options are exercised, the total value of the contract would increase to $1,942.8 million (i.e., about $1.9 billion). The figures of $745.9 million and $1,942.8 million cover only the shipbuilder’s costs; they do not include the cost of government-furnished equipment (GFE), which is equipment for the ships that the government purchases and then provides to the shipbuilder for incorporation into the ship, or government program-management costs. When GFE and government program- management costs are included, the total estimated procurement cost of the first PSC is between $925 million and $940 million, and the total estimated procurement cost of the three-ship PSC program is about $2.95 billion.
The PSC program has received a total of $1,034.6 million (i.e., about $1.0 billion) in procurement funding through FY2019, including $300 million provided through the Navy’s shipbuilding account in FY2017 and FY2018. The Coast Guard’s proposed FY2020 budget requests $35 million in procurement funding for the PSC program, which is enough to cover the PSC program’s FY2020 government program-management costs. The Coast Guard’s FY2019 budget submission had projected that a total of $125 million in procurement funding would be requested for the PSC program in FY2020.
The operational U.S. polar icebreaking fleet currently consists of one heavy polar icebreaker, Polar Star, and one medium polar icebreaker, Healy. 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 1978, respectively, and are now well beyond their originally intended 30-year service lives. The Coast Guard is using Polar Sea as a source of spare parts for keeping Polar Star operational.
Issues for Congress for the PSC program include, inter alia, whether to approve, reject, or modify the Coast Guard’s FY2020 procurement funding request for the program; whether to use a contract with options or a block buy contract to procure the ships; whether to continue providing at least some of the procurement funding for the PSC program through the Navy’s shipbuilding account; technical, schedule, and cost risk in the PSC program; and whether to procure heavy and medium polar icebreakers to a common basic design.
Congressional Research Service

Coast Guard Polar Security Cutter (Polar Icebreaker) Program
Introduction
This report provides background information and issues for Congress on the Polar Security Cutter (PSC) program—the Coast Guard’s program for acquiring new polar icebreakers. The PSC program has received a total of $1,034.6 million (i.e., about $1.0 billion) in procurement funding through FY2019. The Coast Guard’s proposed FY2020 budget requests $35 million in procurement funding for the PSC program, which is enough to cover FY2020 program- management costs.
The issue for Congress is whether to approve, reject, or modify the Administration’s FY2020 procurement funding request for the PSC program, and, more generally, whether to approve, reject, or modify the Coast Guard’s overall plan for procuring new polar icebreakers. Congress’s decisions on this issue could affect Coast Guard funding requirements, the Coast Guard’s ability to perform its polar missions, and the U.S. shipbuilding industrial base.
For a brief discussion of the Coast Guard’s Great Lakes icebreakers, see Appendix E. A separate CRS report covers acquisition of general-purpose cutters for the Coast Guard.1 Another CRS report provides an overview of various issues relating to the Arctic.2
Background
Missions of U.S. 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....”3
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.”4
1 CRS Report R42567, Coast Guard Cutter Procurement: Background and Issues for Congress, by Ronald O'Rourke. 2 CRS Report R41153, Changes in the Arctic: Background and Issues for Congress, coordinated by Ronald O'Rourke.
3 14 U.S.C. 102(4) and 102(5), respectively. This statute was previously 14 U.S.C. 2; it was renumbered as 14 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.)
4 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.
Congressional Research Service 1

Coast Guard Polar Security Cutter (Polar Icebreaker) Program
Multiple Missions (Not Just Icebreaking)
The Coast Guard’s polar icebreakers do not simply break ice—they are multimission cutters5 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.6 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.7
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 states that Polar Star, the Coast Guard’s only currently operational heavy polar icebreaker, “spends the [northern hemisphere] 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.”8 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
5 Cutters are commissioned Coast Guard vessels greater than 65 feet in length.
6 For a list of the 11 missions, see footnote 4. 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.)
7 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 Government Accountability Office, 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.
8 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.
Congressional Research Service 2

Coast Guard Polar Security Cutter (Polar Icebreaker) Program
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.9 Changing ice conditions in Antarctic waters have made the McMurdo resupply mission more challenging since 2000.10
The Coast Guard’s strategy document for the Arctic region, released on May 21, 2013, states that “The United States must have adequate icebreaking capability to support research that advances fundamental understanding of the region and its evolution,” and that “The Nation must also make a strategic investment in icebreaking capability to enable access to the high latitudes over the long-term.”11
Current U.S. Polar Icebreakers
The operational U.S. polar icebreaking fleet currently consists of one heavy polar icebreaker, Polar Star, and one medium polar icebreaker, Healy. 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 1978, 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 fragile, if not precarious. During its annual deployments to McMurdo Station in Antarctica, shipboard equipment frequently breaks, and shipboard fires sometimes occur.12 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.
For additional background information on current U.S. polar icebreakers and polar research ships, see Appendix A.
Required Numbers of U.S. Polar Icebreakers
For background information on required numbers of U.S. polar icebreakers, see Appendix B.
9 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.
10 National Research Council, Polar Icebreakers in a Changing World, An Assessment of U.S. Needs, Washington,
2007, pp. 6-7, 14, 63.
11 United States Coast Guard Arctic Strategy, Washington, May 2013, p. 35; accessed May 24, 2013, at [link to www.uscg.mil]
12 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.
Congressional Research Service 3

Coast Guard Polar Security Cutter (Polar Icebreaker) Program
Coast Guard Polar Security Cutter (PSC) Program Overview
The PSC program was initiated in the Coast Guard’s FY2013 budget submission, and envisages the acquisition of three new heavy polar icebreakers, to be followed years from now by the acquisition of up to three new medium polar icebreakers. The Coast Guard wants to begin construction of the first new heavy polar icebreaker in 2021 and have it enter service in 2024.
Program Name
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.13 Although it is now called the PSC program, many observers, as a matter of convenience, may continue to refer to it as the polar icebreaker program.
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.
Parent Design Approach
The PSC program is using the parent design approach, meaning that the design of the PSC will be 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.
Program Schedule
The PSC program’s schedule calls for delivering the three PSCs at 12-month intervals, at the end of the third quarters of FY2024, FY2025, and FY2026, respectively.
Procurement Cost
As shown in Table 1, the Coast Guard estimates the total procurement costs of the three heavy polar icebreakers as $1,039 million (i.e., about $1.0 billion) for the first ship, $792 million for the second ship, and $788 million for the third ship, for a combined estimated cost of $2,619 million (i.e., about $2.6 billion). As also shown in Table 1, within those figures, the shipbuilder’s portion of the total procurement cost is $746 million for the first ship, $544 million for the second ship, and $535 million for the third ship, for a combined estimated shipbuilder’s cost of $1,825 million (i.e., about $1.8 billion). The shipbuilder’s contract-award cost for the first ship is $745.9 million, with options for the second and third ships that, if exercised, would increase the total value of the contract to $1,942.8 million (i.e., about $1.9 billion).
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