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Coast Guard Polar Icebreaker Modernization

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Coast Guard Polar Icebreaker Modernization Coast Guard Polar Security Cutter (Polar Icebreaker) Program: Background and Issues for Congress Updated September 15, 2021 Congressional Research Service https://crsreports.congress.gov 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 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 PSC program has received a total of $1,754.6 million (i.e., about $1.8 billion) in procurement funding through FY2021, including $300 million that was provided through the Navy’s shipbuilding account in FY2017 and FY2018. With the funding the program has received through FY2021, the first two PSCs are now fully funded. The Coast Guard’s proposed FY2022 budget requests $170.0 million in procurement funding for the PSC program, which would be used for, among other things, procuring long leadtime materials (LLTM) for the third PSC. The Navy and Coast Guard in 2020 estimated the total procurement costs of the 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 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, 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. Congressional Research Service Coast Guard Polar Security Cutter (Polar Icebreaker) Program Contents Introduction ................................................................................................................... 1 Background.................................................................................................................... 1 Missions of U.S. Polar Icebreakers ............................................................................... 1 Statutory Duties and Missions ................................................................................ 1 Multiple Missions (Not Just Icebreaking) ................................................................. 2 Polar (Not Just Arctic) Operations........................................................................... 2 Current U.S. Polar Icebreakers..................................................................................... 3 Required Numbers of U.S. Polar/Arctic Icebreakers ........................................................ 4 At Least Six Ships, Including Three Capable of Breaking Heavy Polar Ice .................... 4 June 9, 2020, Presidential Memorandum Concerning Polar Icebreakers ........................ 4 Additional Background Information ........................................................................ 5 Coast Guard Polar Security Cutter (PSC) Program .......................................................... 5 Overview ............................................................................................................ 5 Program Name..................................................................................................... 5 Coast Guard-Navy Integrated Program Office (IPO) .................................................. 5 Parent Design Approach ........................................................................................ 5 Program Schedule ................................................................................................ 5 Procurement Cost ................................................................................................. 5 Program Funding ................................................................................................. 6 Contract Award .................................................................................................... 6 Ship Design......................................................................................................... 7 Home Port......................................................................................................... 12 FY2022 Funding Request .................................................................................... 12 Service Life Extension for Polar Star ......................................................................... 12 Issues for Congress ....................................................................................................... 12 FY2022 Funding ..................................................................................................... 12 Potential Impact of COVID-19 Situation ..................................................................... 13 Reported Delay in Construction Start on First PSC ....................................................... 13 Technical, Schedule, and Cost Risk for PSC Program.................................................... 14 Parent Design and PSC Design ............................................................................. 14 February 2020 GAO Testimony ............................................................................ 14 Contract with Options vs. Block Buy Contract ............................................................. 16 Common Design for Heavy and Medium Polar Icebreakers............................................ 19 Funding Coast Guard Polar Icebreakers through Navy’s Shipbuilding Account ................. 22 Building Polar Icebreakers in Foreign Shipyards .......................................................... 24 Overview .......................................................................................................... 24 Laws Relating to Building Ships in Foreign Shipyards ............................................. 24 October 2017 Press Report .................................................................................. 25 July 10, 2020, Remarks by President Trump ........................................................... 26 June 9, 2020, Presidential Memorandum Concerning Polar Icebreakers ...................... 26 Funding for Purchasing or Leasing Foreign-Built Icebreakers ................................... 27 Legislative Activity for FY2022 ...................................................................................... 27 Summary of Appropriation Action on FY2022 Funding Request ..................................... 27 FY2022 DHS Appropriations Act (H.R. 4431) ............................................................. 28 House ............................................................................................................... 28 FY2022 DOD Appropriations Act (H.R 4432).............................................................. 28 Congressional Research Service Coast Guard Polar Security Cutter (Polar Icebreaker) Program House ............................................................................................................... 28 FY2022 National Defense Authorization Act (H.R. 4350) .............................................. 29 House ............................................................................................................... 29 Figures Figure 1. Rendering of VT Halter Design for PSC ................................................................ 8 Figure 2. Rendering of VT Halter Design for PSC ................................................................ 8 Figure 3. Rendering of VT Halter Design for PSC ................................................................ 9 Figure 4. Rendering of VT Halter Design for PSC ...............................................................
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