For the U.S. Coast Guard, it is the beginning of the end— and not in a good way—as it eyes a massive proposed cut to its long-struggling recapitalization efforts.
And for one major European aerospace company,, it also could be the second of a one-two punch from Washington this year that challenges its long-running desire to break into the top level of U.S. defense contractors.
Since the late 1990s, the fifth U.S. armed service—seemingly always the last to be considered when it comes to funding and recognition—has been struggling to design, buy and deploy a modernized fleet of aircraft, ships and other equipment to meet its wide-ranging mission requirements. Now U.S. officials appear to be all but abandoning their effort to overhaul the Coast Guard's aging fleets, proposing to cut a third of the funding for a five-year acquisition program that already was going to support only two-thirds of the service's missions, which range from homeland defense to fishing enforcement.
Worst of all, lawmakers seem resigned to going along. “It is time for the president to tell Congress what missions the Coast Guard will no longer conduct,” says House Coast Guard and maritime transportation subcommittee Chairman Duncan Hunter (R-Calif.). “It is simply irresponsible to continue to send our servicemen and women out on failing legacy assets commissioned over 50 years ago and expect them to succeed in their missions.”
Under the latest iteration of the five-year capital investment plan and its consequences, unveiled piecemeal this spring with the fiscal 2014 budget request, the service would receive a total of about $5.1 billion in acquisition funding, or around $2.5 billion less than the roughly $7.6 billion included in the version of the plan issued last year, according to Congressional Research Service (CRS) calculations.
“This is one of the largest percentage reductions in funding that I have seen a five-year acquisition account experience from one year to the next in many years,” says CRS naval affairs specialist Ronald O'Rourke. Nevertheless, there has been no change in the Coast Guard's strategic environment since last year that would suggest a significant reduction in its future missions, he testified June 26 to Hunter's panel.
But money was always an issue. To meet the existing plan, before the latest proposal, the Coast Guard needs about $2 billion in acquisition funding every year, according to its commandant, Adm. Robert Papp. The latest five-year plan averages $1.02 billion per year, compared to $1.53 billion per year under last year's version.
The vice commandant, Vice Adm. John Currier, told Hunter's panel that the Coast Guard and its parentare reviewing the acquisition portfolio, but that the service remains “committed to realizing a balanced force structure necessary to address future national interests in the maritime domain.”
While the results of the portfolio review, started in April, remain to be seen, the Coast Guard has not given up on gaining new equipment. Obama administration officials are looking at transferring at least 14 newly builttransports from the Air Force, which has controversially declared them “excess” to its needs. As CRS reported, if the Coast Guard were to receive 14 or more C-27s, it could stop procurement of EADS HC-144A maritime patrol aircraft (MPA) at the halfway point, with 18 aircraft, saving $887 million.
Already,CEO Sean O'Keefe has acknowledged that his unit will fall short of meeting a long-held goal of $10 billion in revenues from North America by 2020. The company's UH-72 Lakotas for the Army also have been eyed by officials as a source of funding for other needs.
Ironically, in June the HC-144A was selected as Homeland Security's Acquisition Program of the Year, a point EADS's U.S. spokesman underscores. “The HC-144A Ocean Sentry is an indispensable asset not just because it can do the mission, but because it is highly cost-effective to own, maintain and operate—a critical consideration for any asset the Coast Guard takes into its inventory,” spokesman Guy Hicks argues.
Whether the service will receive the C-27s is not clear, according to O'Rourke, as a recently enacted law allowing the transfer does not appear to guarantee this outcome. For Coast Guard advocates, the lack of transfer would be just one more quiet insult for a service well-known for doing more with less.
“The men and women of the Coast Guard's unofficial motto seems to be 'We can do more with less,'” testified Navy Capt. (ret.) Lawrence Korb, a senior fellow at the Center for American Progress. “Unfortunately, in today's bureaucratic culture, you get even less if you do more, unless you mount a large public relations effort.”