Report to Congress on Coast Guard Polar Security Cutter

The following is the Aug. 30, 2022, Congressional Research Service report, Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress. From the report The Coast Guard Polar Security Cutter (PSC) program is a program to acquire three new PSCs (i.e., heavy polar icebreakers), to be followed years from now by the […]

The following is the Aug. 30, 2022, Congressional Research Service report, Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress.

From the report

The Coast Guard Polar Security Cutter (PSC) program is a program to acquire three new PSCs (i.e., heavy polar icebreakers), to be followed years from now by the acquisition of up to three new Arctic Security Cutters (ASCs) (i.e., medium polar icebreakers). The procurement of the first two PSCs is fully funded; the Coast Guard says the first PSC is to be delivered to the Coast Guard in the spring of 2025.

The Coast Guard’s proposed FY2023 budget requests $167.2 million in continued procurement funding for the PSC program, which would be used for, among other things, program management and production activities associated with the PSC program’s Detail Design and Construction (DD&C) contract, long leadtime materials (LLTM) for the third PSC, and government-furnished equipment (GFE), logistics, and cyber-security planning costs.

The Coast Guard’s proposed FY2023 budget also requests $125.0 million in procurement funding for the purchase of an existing commercially available polar icebreaker that would be used to augment the Coast Guard’s polar icebreaking capacity until the new PSCs enter service. Under the Coast Guard’s proposal, the Coast Guard would conduct a full and open competition for the purchase, the commercially available icebreaker that the Coast Guard selects for acquisition would be modified for Coast Guard operations following its acquisition, and the ship would enter service 18 to 24 months after being acquired.

The Navy and Coast Guard in 2020 estimated the total procurement costs of the three PSCs in then-year dollars as $1,038 million (i.e., about $1.0 billion) for the first ship, $794 million for the second ship, and $841 million for the third ship, for a combined estimated cost of $2,673 million (i.e., about $2.7 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 Halter Marine Inc. (formerly VT Halter Marine) of Pascagoula, MS, a shipyard owned by Singapore Technologies (ST) Engineering. Halter Marine was the leader of one of three industry teams that competed for the DD&C contract. On December 29, 2021, the Coast Guard exercised a $552.7 million fixed price incentive option to its contract with Halter Marine Inc. for the second PSC.

The DD&C contract includes options for building the second and third PSCs. If both of 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 portion of the PSCs’ total procurement cost; they do not include the cost of government-furnished equipment (or GFE, meaning equipment for the ships that the government purchases and then provides to the shipbuilder for incorporation into the ship), post-delivery costs, costs for Navy-specific equipment, or government program-management costs.

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 plans to extend the service life of Polar Star until the delivery of at least the second PSC. The Coast Guard is using Polar Sea as a source of spare parts for keeping Polar Star operational.

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