Coast Guard: Arctic Strategy Is Underway, but Agency Could Better Assess How Its Actions Mitigate Known Arctic Capability Gaps

The retreat of polar sea ice in the Arctic, as reported by the U.S. National Snow and Ice Data Center, combined with an expected increase in human activity, has heightened U.S. interests in the Arctic region. To supplement U.S. Arctic policy, the White House and federal agencies have issued Arctic strategies and plans. Since the Arctic region has a substantial maritime domain, the Coast Guard plays a significant role in Arctic policy implementation and enforcement. GAO was asked to examine the Coast Guard's responsibilities, capabilities, and plans for the Arctic. This report discusses, among other things, the extent to which the Coast Guard has (1) reported progress in implementing its Arctic strategy, (2) assessed its Arctic capabilities and taken actions to mitigate any identified gaps, and (3) reported being able to carry out polar icebreaking operations. GAO reviewed relevant laws and policies and Coast Guard documents that detail its Arctic plans. GAO conducted a site visit to Alaska and interviewed officials from the Coast Guard, state and local government entities, native village corporations, and private or nonprofit organizations. These observations are not generalizable, but provided insights on Coast Guard activities.

The U.S. Coast Guard, within the Department of Homeland Security, reported making progress implementing its Arctic strategy . For example, the Coast Guard reported conducting exercises related to Arctic oil spill response and search and rescue, and facilitating the formation of a safety committee in the Arctic, among other tasks in its strategy. To track the status of these efforts, the Coast Guard is developing a web-based tool and anticipates finalizing the tool in mid-2016.

The Coast Guard assessed its capability to perform its Arctic missions and identified various capability gaps—including communications, infrastructure, and icebreaking, and has worked to mitigate these gaps with its Arctic partners, such as other federal agencies. Specifically, Coast Guard officials stated that the agency's actions to implement the various Arctic strategies and carry out annual Arctic operations have helped to mitigate Arctic capability gaps. However, the Coast Guard has not systematically assessed the extent to which its actions agency-wide have helped to mitigate these gaps. Coast Guard officials attributed this, in part, to not being able to unilaterally close the gaps. While mitigating these gaps requires joint efforts among Arctic partners, the Coast Guard has taken actions in the Arctic that are specific to its missions and therefore has responsibility for assessing the extent to which these actions have helped to mitigate capability gaps. By systematically assessing and measuring its progress, the Coast Guard will better understand the status of these gaps and be better positioned to effectively plan its Arctic operations.

The Coast Guard has been unable to fulfill some of its polar icebreaking responsibilities with its aging icebreaker fleet, which currently includes two active polar icebreakers. In 2011 and 2012, the Coast Guard was unable to maintain assured, year-round access to the Arctic and did not meet 4 of 11 requests for polar icebreaking services. With its one active heavy icebreaker—which has greater icebreaking capability—nearing the end of its service life, the Coast Guard initiated a program in 2013 to acquire a new one and is working to determine the optimal acquisition strategy. However, the Coast Guard's efforts to acquire an icebreaker, whether by lease or purchase, will be limited by legal and operational requirements. In addition, current projections show that the Coast Guard is likely to have a 3- to 6-year gap in its heavy icebreaking capability before a new icebreaker becomes operational, as shown below. The Coast Guard is developing a strategy to determine how to best address this expected gap.

Coast Guard's Heavy Icebreaker Availability and Expected Capability Gaps, Present until 2030

GAO recommends that the Coast Guard develop measures for assessing how its actions have helped to mitigate Arctic capability gaps, and design and implement a process to systematically assess its progress on this. DHS concurred with our recommendations.

The United States, with the state of Alaska extending above the Arctic  Circle, is one of eight Arctic nations. The retreat of polar sea ice in the  Arctic, as reported by the U.S. National Snow and Ice Data Center,  combined with an expected increase in human activity there, has  heightened U.S. and other nations’ interests in the Arctic region in recent  years. Diminishing sea ice has made some Arctic waters navigable for  longer periods and, as a result, may contribute to new economic  opportunities in commercial shipping, resource exploitation (i.e., oil and  gas exploration, mineral extraction), tourism, and commercial fishing.  Growth in these commercial activities in the Arctic could also increase the  risk of maritime accidents, such as ship collisions or oil spills. Growth in  Arctic activity is also expected to increase demand for services such as  search and rescue, and maritime navigation support, which can be a  challenge to provide given the harsh and unpredictable weather and vast  distances that responding agencies must travel to reach the Arctic. U.S.  interest in the Arctic was further heightened in anticipation of the United  States taking over the chairmanship of the Arctic Council—a voluntary  intergovernmental forum—in 2015. With this heightened focus, various  Arctic strategies and policies have been released by the White House and  other federal entities to supplement long-standing U.S. Arctic policy. For  example, the White House issued an Arctic national strategy in 2013 and  its corresponding implementation plan in 2014. The U.S. Coast Guard,  within the Department of Homeland Security (DHS), also plays a  significant role in U.S. Arctic policy and thus has issued its corresponding  Arctic strategy and implementation plan.

We have previously examined emerging issues and challenges for the  United States in the Arctic. For example, in 2010, GAO reported that the  Coast Guard faced several challenges operating in the Arctic—including  limited maritime domain awareness and a lack of communication  infrastructure—but was taking actions to address these challenges.  Additionally, in March 2014, we examined U.S. Arctic maritime  infrastructure and the actions taken by federal, state, and local  stakeholders to plan for future U.S. Arctic maritime infrastructure  investments. In that report, we analyzed the Committee on the Marine  Transportation System’s 2013 study which prioritized actions for  developing U.S. Arctic maritime infrastructure. Also in 2014, we  assessed U.S. involvement in the Arctic Council to help clarify the  direction of future U.S. participation and to position the United States for a  successful Arctic Council chairmanship, which began in 2015. In 2015,  we reported that the Department of Defense (DOD) expects to play a  supporting role to other federal agencies involved in the Arctic based on  its assessments of a low level of military threat. We also reported that  DOD is monitoring the security environment for changes, and is updating  its regional plans and conducting analysis to determine future capability  needs.

As a result of anticipated changes in the Arctic and the recent issuance of  additional Arctic strategies and plans, you asked us to examine the Coast  Guard’s responsibilities, capabilities, and plans for the Arctic. This report  discusses (1) the progress the Coast Guard reported toward  implementing its Arctic strategy, (2) the extent to which the Coast Guard  has assessed its Arctic capabilities and taken actions to mitigate any  identified gaps, (3) the factors that affect Coast Guard planning for Arctic  operations, and (4) the extent to which the Coast Guard reported being  able to carry out polar icebreaking operations, and what plans, if any, it  has for maintaining this capability.

To gather information for all four objectives, we reviewed relevant laws,  documents, and reports, and interviewed officials from various federal  entities and stakeholders in Alaska. Specifically, we reviewed a 2009  national security presidential directive, which reflects U.S. Arctic policy, as  well as other national strategies and policies that supplement this policy;  Coast Guard Arctic strategy and planning documents—including reports  on icebreaking capabilities and Arctic capabilities; GAO reports, and other  entities’ Arctic-related reports. We interviewed and obtained written  responses from DHS and Coast Guard headquarters officials as well as  field-based Coast Guard District and Sector officials responsible for all  Coast Guard operations in the Arctic to obtain their perspectives for our  objectives. We also interviewed federal officials from the Department of  Commerce’s National Oceanic and Atmospheric Administration (NOAA);  the Department of the Interior’s Bureau of Ocean Energy Management  and Bureau of Safety and Environmental Enforcement; DOD—including  the U.S. Navy; and the National Science Foundation. We selected these  federal agencies because of their involvement in Arctic activities, in  particular, those activities that involved coordination with the Coast  Guard. We interviewed these officials to obtain information regarding  Arctic priorities and strategies, coordination efforts with the Coast  Guard—including for icebreaking services—and Arctic activities and  trends, among other issues. We also visited Alaska, where, in addition to  Coast Guard field-based officials, we interviewed representatives from six  state and local government entities; three private or nonprofit  organizations representing various Arctic interests including those related  to commercial activity and resource extraction; and two native village  corporations. The results of our interviews are not generalizable to all  Arctic stakeholders, but they provided valuable information and  perspectives on maritime activities in the U.S. Arctic.

To determine the progress the Coast Guard has made in implementing its  Arctic strategy, in addition to the steps above, we reviewed the Coast  Guard’s Arctic Strategy and its implementation plan. We also reviewed  national strategies and plans that delineated Arctic-specific tasks to the  Coast Guard and which the Coast Guard also considers to be binding,  pursuant to available resources. As such, we analyzed the National  Ocean Policy Implementation Plan and the White House’s National  Strategy for the Arctic Region and its implementation plan. We also  interviewed the U.S. Department of State’s Special Representative for the  Arctic to discuss U.S. strategic priorities in the Arctic. To determine the  extent to which the Coast Guard has assessed its Arctic capabilities and  taken actions to mitigate any identified gaps, we reviewed federal agency  reports on capabilities, including the Coast Guard’s mission analysis  report and a joint DHS-DOD paper on Arctic capabilities—two key reports  identified by the Coast Guard as being currently relevant. In addition, we  compared how the Coast Guard monitors its efforts to help mitigate  capability gaps with best practices for agency monitoring as detailed in  Standards for Internal Control in the Federal Government. To determine  the extent to which the Coast Guard has utilized data to plan for Arctic  operations, and what, if any, challenges it faces, we analyzed Coast  Guard Arctic Shield planning documents, such as the annual Arctic Shield  operations orders and after-action reports (AAR) from 2012 to 2015—all  available reports since the Arctic Shield operation was formalized. To  determine the extent to which the Coast Guard is currently able to carry  out polar icebreaking operations, and what plans, if any, it has for  maintaining this capability, we analyzed the Coast Guard’s reports related  to mission needs in the Arctic and icebreaker acquisition and the number  of internal and interagency requests received and fulfilled for polar  icebreaking services. We also reviewed the statutes, presidential  directives, strategies, and interagency agreements on which the Coast  Guard’s polar icebreaking requirements are based.

We conducted this performance audit from December 2014 to June 2016  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Diminishing Ice Opens Potential for Increased Activity in the Arctic

Scientific research on and projections of the changes taking place in the  Arctic vary, but there is a general consensus that the Arctic is warming  and sea ice is diminishing. The U.S. National Snow and Ice Data Center  reported that the annual Arctic minimum sea ice extent—which typically  occurs in September each year—for 2015 was the fourth lowest in the  satellite record, and 699,000 square miles less than the 1981 to 2010  average (see fig. 1). Further, it also reported that the 10 lowest  September ice extents on satellite record have all occurred in the last 10  years. While much of the Arctic Ocean remains ice-covered for a  majority of the year, most scientific estimates predict there will be an ice- diminished Arctic Ocean in the summer in the next 20 to 40 years.

Roll over the year to view recorded ice extent. See appendix I for the printable,non-interactive version. (in millions of square kilometers)

These Arctic environmental changes make maritime transit more feasible  and are increasing the likelihood of further expansion of human activity  including tourism, oil, gas, and mineral extraction, commercial shipping,  and fishing. Melting ice could increase the use of three trans-Arctic  routes—the Northern Sea Route, Northwest Passage, and Transpolar  Route—saving several thousands of miles and several days of travel  between major trading blocs. Increased trans-Arctic use of the Northern  Sea Route could particularly affect the U.S. Arctic because vessels may  pass through the Bering Strait, a body of water about 50 miles wide at its  narrowest point between Russia and the United States. Vessel data show  that transits through the Bering Strait increased from about 220 in 2008 to  about 540 in 2015, and Coast Guard officials stated that they anticipate  this number to increase annually.

Significant oil, gas, and mineral deposits in the Arctic, including an  estimated 13 percent of the world’s undiscovered oil, 30 percent of  undiscovered gas, and some $1 trillion worth of minerals including gold,  zinc, nickel, and platinum have also increased interest in exploration  opportunities in the region. Cruise line interests in exploring the Arctic  may also increase as evidenced by Crystal Cruise Lines’ planned 2016  Arctic voyage that is expected to be the largest cruise ship yet to traverse  the Northwest Passage, a dynamic ice area with thick ice hazards usually  present all summer.

National Strategic Guidance and Policies Govern Arctic Operations

Various strategic guidance and policies govern U.S. operations in the  Arctic region. These include overarching national policies as well as more  specific maritime policies and authorities. A 2009 national security  presidential directive reflects current U.S. Arctic policy and is key among  U.S. policies. The Coast Guard’s role in the Arctic was implicated in this  directive, which acknowledges the effects of climate change and  increased human activity in the Arctic region; lays out specific policy  objectives and federal partners; and addresses issues related to national  security, international governance, international scientific cooperation,  economic issues, environmental protection, and maritime transportation in  the Arctic region.

Additional White House national strategies and plans supplementing  existing Arctic policy have been issued since the 2009 presidential  directive on the Arctic region. Specifically, in May 2013, the White House  issued the National Strategy for the Arctic Region that articulates the  administration’s strategic priorities for the Arctic region and includes lines  of effort related to (1) advancing U.S. security interests, (2) pursuing  responsible Arctic region stewardship, and (3) strengthening international  cooperation. The White House released an implementation plan for the  National Strategy for the Arctic Region in January 2014 that sets forth the  methodology, process, and approach for executing the strategy. This  plan was superseded in March 2016 by the Implementation Framework  for the National Strategy for the Arctic Region which incorporated new  priorities, among other things. The Coast Guard and some other federal  agencies have also issued their own strategies for the Arctic. For  example, the Coast Guard issued its 10-year strategy in May 2013, which  seeks to support national policy with three key objectives of improving  awareness, modernizing governance, and broadening partnerships. The  Coast Guard issued its implementation plan for this strategy in December  2015. While encompassing more than the Arctic region, the White  House National Ocean Council issued the National Ocean Policy  Implementation Plan in April 2013 which specifically identifies Arctic  issues—such as the need for improvements to communications;  navigation; and oil spill prevention, containment, and response to provide  maritime safety and security in a changing Arctic.

In an effort to coordinate the actions of federal entities involved in the  Arctic, the White House established the Arctic Executive Steering  Committee (AESC) in January 2015 and tasked it with shaping priorities,  providing strategic direction, overseeing implementation of the National  Strategy for the Arctic Region, and ensuring coordination of federal  activities in the Arctic, among other things. In addition, since the Arctic  region has significant maritime domain area, existing U.S. strategic  guidance relating to maritime areas continues to apply, such as the  Maritime Security Policy issued by the President in December 2004.

The Coast Guard Is the Primary Federal Maritime Agency in the Arctic, but Multiple Stakeholders Have Arctic Responsibilities

Given the Arctic region’s extensive maritime domain, the Coast Guard  plays a significant role in Arctic policy implementation and enforcement.  The Coast Guard is a multimission, maritime military service that is  responsible for maritime safety and security, environmental protection,  and national defense, among other missions. The Coast Guard has  these same mission responsibilities in the Arctic Ocean as it does in other  oceans. Therefore, as more navigable ocean water has emerged in the  Arctic and human activity increases, the Coast Guard has faced, and will  continue to face, expanding responsibilities in the region. Other DHS  components and federal agencies—such as the Departments of Defense,  Interior, and Commerce, and the National Science Foundation—as well  as interagency groups, such as the AESC, also have responsibilities in  the Arctic, as detailed in Appendix II.

State and local governments, Alaska Native tribal governments, Alaska  Native corporations, and other Alaska Native entities, private industry,  and nonprofit groups are also important Arctic stakeholders. State  government is involved in, among other things, Arctic fishery  enforcement, oil spill planning and response, emergency management,  and economic development. Local governments, Alaska Native tribal  governments, and Alaska Native entities are in some cases the closest  stakeholders to activities taking place in the Arctic. Consequently, the  responsibility for responding to Arctic incidents often falls to local  governments. For example, the North Slope Borough, which  encompasses about 89,000 square miles of northern Alaska, maintains  its own search and rescue capabilities including fixed and rotary wing  aircraft designed for shore-based response and a small boat for on the  water response. Additionally, Alaska Native communities have inhabited  the Arctic region for thousands of years and are particularly sensitive to  changes in the environment due to a subsistence way of life and culture  revolving around marine ecosystems. Finally, private sector and nonprofit  groups are also important Arctic stakeholders, and they represent a wide  spectrum of interests, including resource extraction companies, cruise  lines, vessel tracking organizations, and conservation groups, among  others.

Presently, all of the Coast Guard’s permanent assets are based well  below the Arctic Circle, so Coast Guard operations above the Arctic Circle  are constrained by several factors, including the time required for surface  vessels and aircraft to travel vast distances to reach the Arctic Circle and  the scarcity of physical infrastructure to support operations. Figure 2  compares the state of Alaska to the lower 48 states to illustrate the large  distances between, for example, Kodiak (the Coast Guard’s northernmost  air station) and Point Barrow (the northernmost point of land in Alaska).

Within the Coast Guard, District 17 and Sector Anchorage have primary  responsibility for operations in the Arctic region. Since 2008, District 17  has conducted an annual operation in the Arctic (now known as  Operation “Arctic Shield”). Coast Guard officials stated that Arctic Shield  is a seasonal surge operation designed to help the Coast Guard learn  how to operate in this increasingly active area of responsibility. Arctic  Shield is intended to provide the Coast Guard with the opportunity to (a)  perform Coast Guard missions and activities, (b) advance maritime  domain awareness, (c) broaden partnerships in support of Coast Guard  Arctic operations, and (d) enhance and improve preparedness,  prevention, and response capabilities in the Arctic. It is also the primary  operation through which the Coast Guard carries out activities in the  Arctic region and includes the deployment of aircraft, cutters, and  personnel to the Arctic region. It is generally conducted between June  and October—although some planning and outreach activities may take  place before. The general area of operation for Arctic Shield each year is  smaller than the Coast Guard’s District 17 area of operation, see figure  3.

Under federal law, the Coast Guard has been responsible for carrying out  the nation’s polar icebreaking needs since 1965—when it assumed  primary responsibility for the nation’s polar icebreaking fleet. In addition,  the Coast Guard cites a variety of statutes, strategic policies, and  interagency agreements that drive the Coast Guard’s employment of  polar icebreakers. A summary of some of these provisions can be found  in Appendix III.

The Coast Guard’s polar icebreaking fleet comprises three polar  icebreakers—the Polar Star, Polar Sea, and Healy—of which, the Polar  Star and Healy are currently active. See figure 4 for photographs of the  Coast Guard’s active icebreakers.

Commissioned in 1976 and 1978, respectively, the Polar Star and the  Polar Sea are heavy polar icebreakers and the world’s most powerful  non-nuclear icebreakers. The third icebreaker, the Healy, is a medium  icebreaker that primarily supports Arctic research. Although the Healy is  capable of carrying out a wide range of activities, it cannot operate  independently in the ice conditions in the Antarctic or ensure timely  access to some Arctic areas in the winter. Figure 5 details the history of  the Coast Guard’s current icebreaking fleet, including commission dates,  expected service life, and re-activation dates.

The Coast Guard Reported Progress Implementing its Arctic Strategy

The Coast Guard has reported making progress implementing its Arctic  strategy and addressing tasks in its implementation plan. The Coast  Guard’s May 2013 strategy aims to ensure safe, secure, and  environmentally responsible maritime activity in the Arctic, while the  related implementation plan, issued in December 2015, is intended to  operationalize this strategy—within existing resources. The  implementation plan also incorporates tasks assigned to the Coast Guard  from the National Strategy for the Arctic Region, its implementation plan,  and the National Ocean Policy (see App. IV and V for more on these  strategies and plans). According to the Coast Guard, these national  strategies and plans, as well as key presidential directives, executive  orders, and other national strategies guided the development of its  strategy. In addition, Coast Guard officials stated that they factored in  findings and recommendations from other studies into their strategy, such  as the Committee on the Marine Transportation System’s report on the  Arctic Marine Transportation System. For example, the Coast Guard  included tasks such as completing a study on the Bering Strait port  access route in its Arctic Strategy, which was also included in the  committee report. According to the Coast Guard’s implementation plan,  the document is to be updated as new information is learned, and  according to Coast Guard officials, expected timeframes for completion  can be adjusted given funding and resources.

The Coast Guard’s implementation plan includes 13 tasks (or initiatives)  and identifies lead Coast Guard components for each initiative. Many of  the tasks require the Coast Guard to research, coordinate, and evaluate  Arctic issues—an indication that many of the Arctic efforts are planning- oriented and are to help agency officials better understand Arctic issues,  and prepare the Coast Guard for increased Arctic operations. Coast  Guard officials stated that the tasks in its strategy generally included  actions that the Coast Guard was already planning to take in the Arctic,  and new tasks were only agreed upon if resources permitted. The Coast  Guard’s implementation plan also states that appropriate metrics are to  be applied to each of the tasks and associated next steps to ensure that  they are on schedule and properly tailored for the operational and  resource environments faced by the Coast Guard and the nation.  Specifically, the implementation plan states that Coast Guard component  leads for each task are to specify the desired outcomes to define success  for each task and develop supporting plans that specify the scope,  timeline, and resources needed across the 10-year plan, and highlight  significant challenges. However, this information was not included in the  implementation plan and according to Coast Guard officials, it was not  included because they anticipate that the plan will be updated annually,  and as such, they wanted to keep the plan flexible to such change. Coast  Guard officials stated that each lead component has drafted plans that  specify the desired outcome for success, scope, timeline, and resources  needed, and anticipate finalizing them in August 2016. Officials also  stated that they wanted to wait for the White House to release its March  2016 revised implementation plan for the national strategy before  finalizing these efforts. The revised national implementation plan  incorporated new priorities, and Coast Guard officials stated that better  prioritization will help the Coast Guard in making decisions about what it  needs to achieve in the Arctic given its limited resources.

Coast Guard officials stated that they have made some progress on the  13 tasks established in the Coast Guard’s implementation plan, as  described in more detail in table 1.

To track its progress on the 13 tasks, the Coast Guard is in the process of  developing a web-based site for its components to enter and track the  status of implementation plan tasks, as well as the status of its Arctic- related responsibilities under other national strategies, presidential  directives, and service directives. Information on this site is to include the  responsible component, milestones, status, and percentage toward  completion for each task or responsibility. The Coast Guard expects that  the web-based site will be updated continually as tasks are completed to  ensure the most accurate reporting. Coast Guard officials stated that they  delayed finalizing this tool until they saw the revised implementation plan  for the national strategy. Officials also stated that they anticipate finalizing  the tool by mid-year 2016, but that system integration and resource  constraints could create delays.

The Coast Guard Has Assessed Its Arctic Capabilities and Taken Actions to Mitigate Gaps but Has Not Systematically Assessed its Progress

The Coast Guard Assessed Its Capabilities in the Arctic and Identified Capability Gaps

In addition to taking actions to implement its Arctic strategy, the Coast  Guard assessed its capability to perform its missions in the Arctic and  identified various capability gaps, primarily through two key studies.  Specifically, a November 2011 Coast Guard study identified both the  Coast Guard’s Arctic requirements and Arctic capability and capacity  gaps.  Another study, issued by the DOD–DHS Arctic Capabilities  Assessment Working Group in March 2012, consolidated the needed  capabilities identified in various federal agency studies on the Arctic, and  is intended to guide both departments’ investment priorities. According  to this study, the identified gaps lend themselves to further evaluation and  investment consideration. The capability gaps identified in these two key  reports include the following:

Communications: including the lack of communications architecture.

Harsh weather conditions, high latitude disturbances, and  geomagnetic storms combine to make communications in the Arctic  difficult.

Arctic maritime domain awareness: including limited nautical charting,  inadequate navigation systems, and insufficient surveillance.  Extremely limited operational assets and support infrastructure in the  Arctic, as well as the harsh operating environment make achieving  maritime domain awareness a challenge.

Infrastructure: including limited aircraft infrastructure on the North  Slope and limited logistical support. Facilities located below the Arctic  Circle, and even those within Alaska, provide limited capability to  support Arctic missions due to the long transits to the Arctic region.

No deepwater ports currently exist on the North Slope or near the  Bering Strait that are capable of refueling and re-provisioning polar  capable cutters. This forces polar capable cutters to expend  significant time transiting long distances to and from replenishment  ports. Development of infrastructure to support operations is  challenging, in part, due to the high cost of transporting materials to  the Arctic and short construction seasons.

Icebreaking: including limited icebreaking capacity given the Coast  Guard’s existing active inventory of one medium and one heavy polar  icebreaker, as discussed later in this report.

Training and exercise opportunities: including a limited pool of Arctic- trained and experienced Coast Guard personnel, and limited training,  exercise, and educational opportunities to enhance Arctic skills  among staff. According to Coast Guard officials, few opportunities  exist to train in the Arctic, in part, because of limited Coast Guard  icebreaking capacity.

Coast Guard officials confirmed that the capability gaps identified in these  reports remain relevant today, and are highlighted in the Coast Guard’s  Arctic strategy.

According to Coast Guard officials, some of the gaps are complex and  more long-term than its 10-year Arctic strategy, and some are not the sole  responsibility of the Coast Guard to mitigate or do not impact its  operations. For example, rather than building permanent infrastructure,  which its current Arctic strategy does not support given existing  resources, the strategy relies on the seasonal use of mobile assets to  support current demand. In addition, the Coast Guard does not have sole  responsibility for addressing all of the gaps identified in the two reports.  For example, although the Coast Guard’s Arctic strategy identifies  nautical charting as a gap and one of the Coast Guard’s critical enablers  for future success, NOAA has lead responsibility for charting U.S. coastal  waters, including those in the Arctic. Further, Coast Guard officials stated  that the capability gaps identified above do not completely impair or  eliminate the ability to perform operations. For example, while  communications can be a challenge in remote regions, the risk of lost  communications can be mitigated by, for example, using multiple assets  working together to mitigate risk if lost communications are anticipated. In  addition, Coast Guard officials stated that lack of infrastructure and  logistical and communications challenges have been mitigated through  the use of offshore cutter-based command and control platforms, shore- based mobile command and control platforms, and seasonal air and  communications capabilities through leased facilities and deployable  assets.

Coast Guard officials stated that, given its current activity levels, its Arctic  presence being mobile and seasonal, and its ability to leverage partners’  resources, it has had sufficient resources to fulfill current Arctic  responsibilities. Specifically, according to Coast Guard officials,  partnerships are key to achieving agency goals in the Arctic. For  example, the North Slope Borough provides the Coast Guard with  additional search and rescue capabilities year round, and DOD  counterparts have provided the use of a DOD base to extend Coast  Guard aircraft ranges during Arctic operations. However, all 11 of the  Arctic stakeholders we interviewed in Alaska—who represented state and  local governments, Alaska Native Corporations, private industry, and non- profits—expressed concerns that the Coast Guard lacks resources in the  Arctic. Specifically, three stakeholders stated concerns about the Coast  Guard’s ability to respond to its usual missions elsewhere in Alaska when  its assets were deployed for Arctic operations. Coast Guard officials  stated they will reassess their approach as Arctic activity and resulting  mission requirements change over time, but if Arctic activity continues to  increase, as anticipated, they may have insufficient resources to meet  expanded Arctic requirements with current funding levels. Coast Guard  officials also stated that federal efforts are underway to better understand  capabilities and these efforts often include tasking or decision making  outside of the Coast Guard. For example, Coast Guard officials stated  that until national priorities are better articulated by the AESC, the Coast  Guard will not be able to identify all of its Arctic requirements. However,  the Coast Guard’s Arctic strategy states that the agency is to continue to  monitor evolving Arctic activities, and re-invest, where funding allows, to  overcome potential gaps and shortfalls.

The Coast Guard Has Taken Actions to Help Mitigate Capability Gaps but Has Not Systematically Assessed Its Progress in this Effort

The Coast Guard has worked with its Arctic partners—such as other  federal agencies—to carry out actions to help mitigate Arctic capability  gaps; however, it has not systematically assessed how its actions, across  the agency, have helped to mitigate these gaps. According to Coast  Guard officials, through the agency’s role in implementing the tasks from  the various Arctic strategies and implementation plans, the Coast Guard  has taken actions, along with its Arctic partners, that have helped to  mitigate capability gaps. For example, the Coast Guard is the lead  agency for implementing the strategies’ tasks related to enhancing Arctic  maritime domain awareness—a capability gap identified in the previously  noted reports. In another example, the National Ocean Policy directs the  Coast Guard to work with other federal agencies to identify, analyze,  rank, and implement the most cost-effective options to reduce  communication gaps, and it has taken action that could affect these gaps.  In addition, as discussed later in this report, the Coast Guard is also  taking action to address the icebreaking capacity gap.

In addition to the implementing tasks from the Arctic strategies that can  help mitigate capability gaps, Coast Guard officials reported that they  utilize Arctic Shield as the primary operational method to better  understand agency capabilities and associated gaps in the Arctic and to  take actions to help mitigate them. The Coast Guard Research,  Development, Test, and Evaluation Program has also helped to test  Arctic capabilities, such as navigation systems—in part through Arctic  Shield operations. The Coast Guard reported that upon the publication of  the Coast Guard’s Arctic Strategy, it aligned its Arctic Shield operations  with the strategy’s objectives. According to our review of the Coast  Guard’s Arctic Shield operational planning documents and AARs, among  other actions, the Coast Guard executed select Coast Guard missions;  tested a variety of equipment, technologies, and processes; conducted  internal training exercises; and improved maritime domain awareness by  conducting operations, research, and outreach to partners. For example,  during Arctic Shield 2015, the Coast Guard tested communications  equipment belonging to DOD, extending communications capabilities  further north than previously possible. During Arctic Shield 2014, the  Coast Guard tested response equipment and communications systems to  assess capabilities and refine Arctic resource requirements. According to  Coast Guard officials, they will continue with mobile and seasonal  operations, which will provide them with opportunities to continue  assessing and testing operational capabilities.

Although the Coast Guard has reported that these various actions have  improved its Arctic capabilities, it has not systematically assessed the  extent to which these actions have helped mitigate the identified  capability gaps. Standards for Internal Control in the Federal Government  provide that ongoing monitoring should occur in the course of normal  operations and should help ensure that the findings of reviews, such as  the capability gaps identified in the previously mentioned reports, are  resolved. This monitoring should be built into the Coast Guard’s  operations, performed continually, and be responsive to change.  Standards for Internal Control in the Federal Government also calls for  management to establish performance measures and indicators that help  ensure that management’s directives are carried out. Coast Guard  officials stated that they have not systematically assessed their progress  in mitigating capability gaps, or developed measures for them, because  the Coast Guard cannot unilaterally mitigate these gaps, not all of them  are easily measurable, and because not enough is known about them.  However, while taking actions to help mitigate these capability gaps  requires joint efforts among Arctic partners, the Coast Guard has taken  actions in the Arctic that are specific to its missions and therefore has  responsibility for assessing the extent to which its actions have helped to  mitigate its part of these capability gaps. Assessing relevant information  on how its actions have helped to mitigate these gaps could also increase  agency knowledge about capabilities.

Coast Guard officials also stated that they track some of their Arctic  activities through various mechanisms, but do not assess how these  actions have helped to mitigate capability gaps. For example, the Coast  Guard’s AARs for Arctic Shield document information on activities that the  Coast Guard has conducted during each annual operation, as well as any  lessons learned, key observations, best practices, challenges, and  recommendations. In addition, the Coast Guard reported it has efforts  underway to track its progress in implementing the national and Coast  Guard Arctic strategies which will help it to more systematically track  Arctic activities, as discussed previously. But, it does not plan to assess  how the completion of these activities will affect capability gaps. While the  Coast Guard’s various tracking efforts may inform the Coast Guard about  its overall status in conducting Arctic activities, it does not provide a  systematic assessment, across the agency, of how these actions have  helped to mitigate the capability gaps—efforts which also help it  determine resource needs. Systematically assessing the impact of its  actions agency-wide—including using measures for gauging its progress,  when feasible—is critical for the Coast Guard to be able to fully assess  the status of its efforts to help mitigate the various Arctic capability gaps.  By systematically assessing its own progress, the Coast Guard will better  understand the status of the gaps and be better positioned to effectively  plan its Arctic operations, including its allocation of resources and  prioritization of activities to help mitigate them.

Several Factors Affect Planning for Arctic Shield Activities

Coast Guard officials stated several factors affect their Arctic Shield  planning, including data limitations, uncertainty surrounding future Arctic  activity, and limited resources. To carry out Arctic Shield, the Coast  Guard manages a year-round process to plan, execute, and evaluate this  annual operation. The Coast Guard also reported that this operation is to  be scalable to match the level and type of threats and risks, opportunities,  and mission responsibilities in the Arctic each year, and flexible to  accommodate varying needs for Coast Guard services and the availability  of resources. As part of its year-round planning process, Coast Guard  officials hold a series of planning meetings with internal and external  stakeholders, during which they finalize operational documents.  According to the Coast Guard’s Arctic strategy implementation plan,  outreach activities conducted during this planning process are to include  regular engagement with tribal communities to ensure the operation does  not interfere with tribal rights, interests, or subsistence activities. In  addition, following each year’s Arctic Shield operation, Coast Guard  officials assess the operation, develop lessons learned, and propose  changes for the next year’s operation. The Coast Guard also produces an  AAR each year, which describes the activities conducted during Arctic  Shield that year and discusses challenges encountered and lessons  learned.

Coast Guard officials stated that when planning the size and scope of  Arctic Shield operations they use information learned from prior  operations, as well as review a wide variety of external sources that  analyze present conditions and forecast future conditions. Specifically,  these officials stated that they review commercial trends analyses, ice  and weather forecasting, vessel tracking data, information on local fish  stocks and subsistence hunting times, and law enforcement intelligence.  Because commercial activity is the primary determinant of Arctic maritime  activity levels, Coast Guard officials stated that they also review analyses  that predict trends in oil and gas, mining, tourism, shipping, and other  commercial sectors. Coast Guard officials reported that they discuss  this information with various federal, state, industry, academic, and not- for-profit entities.

Although Coast Guard officials reported using these data, they also stated  that one factor affecting their planning for Arctic operations is the limited  amount of data on regional activity, which they attributed to various  factors. For example, because Arctic activity is limited, changes in year- to-year data do not always provide useful statistics. Further, the Coast  Guard cannot always access some companies’ proprietary information on  Arctic commercial trends, which also limits the robustness of the Coast  Guard’s data sources. In addition, Coast Guard officials stated that recent  commercial marine traffic in the Arctic has been variable rather than  trending predictably, providing inconsistent data trends. As a result, Coast  Guard officials stated that there are limited data to help them make  planning decisions and as a result they are taking steps to improve their  data collection on their own operations and as well as continuing to  develop partnerships to collect external data. For example, during the  course of our review, the Coast Guard began collecting data on its aircraft  and cutter resource hours expended on 2015 Arctic Shield activities to  improve its mission management and resource allocation. The Coast  Guard also established an Arctic Information Fusion Center as part of its  2015 Arctic Shield operation, which helped to track the number of  deployed Coast Guard personnel. Further, Coast Guard officials reported  that they are working toward more systematically documenting AAR  information—including lessons learned, best practices, and  recommended improvements—to better track the Coast Guard’s Arctic  activities. Specifically, Coast Guard officials stated that they are starting  to accomplish this through their Contingency Preparedness System, the  Coast Guard’s web-based data management tool that links, among other  items, after action reporting and corrective actions. Although the Coast  Guard designed the Contingency Preparedness System as a tracking tool  for discrete exercises, not large operations like Arctic Shield which  incorporate multiple exercises, Coast Guard officials stated that they are  determining how to best use this system—and have begun to enter  data—to better track Arctic Shield activities and increase their senior  leadership’s awareness of Arctic challenges and opportunities. Coast  Guard officials reported that they are also identifying ways to work with  other agencies to better collect data. For example, Coast Guard officials  stated they participate in conference calls with Arctic stakeholders that  provide information on subsistence hunting activities to help with their  planning. Coast Guard officials stated they continue to look for  opportunities to gain better information on Arctic activities.

The Coast Guard also faces inherent uncertainty surrounding drivers of  future Arctic maritime activity and the potential corresponding increase in  commercial activity in the region. These drivers of activity include the  pace and effects of climate change in the Arctic and economic trends,  and could affect the need for Coast Guard services. Many projections  about future Arctic activity look forward only 2 to 3 years because of this  uncertainty. According to Coast Guard officials, the uncertainty of these  drivers of maritime activity render long-term planning beyond the 10-year  time frame particularly difficult, and as a result, the Coast Guard must  remain flexible to adjust its planning as conditions change.

Limited resources is another factor that Coast Guard officials have  reported affecting their Arctic planning process. Coast Guard officials  stated that they must make tradeoffs on how to best deploy limited  resources and among potential courses of action. Further, officials  noted that funding uncertainty has also affected Coast Guard planning  and operations for Arctic Shield. For example, the Coast Guard was not  able to establish its forward operating base in the preferred location  because funding for Arctic Shield 2015 had not been secured before a  private entity leased that space. As a result, the Coast Guard stationed  aircraft for monitoring Arctic activity at an alternate location farther from  active oil rigs, which increased its travel time to sites being monitored.  Coast Guard officials stated that despite these challenges, they have  received support from Coast Guard leadership and were able to achieve  Arctic Shield objectives.

Coast Guard Has Been Unable to Fulfill All Polar Icebreaking Operations and Is Taking Steps to Begin Icebreaker Acquisition

The Coast Guard Has Been Unable to Reliably Fulfill Polar Icebreaking Responsibilities with Current Fleet

Various requirements drive the Coast Guard’s icebreaking mission  responsibilities, and since 2010 the Coast Guard has been unable to fulfill  some of these responsibilities. The Coast Guard’s icebreaking  responsibilities are based in statute, presidential directive, strategies, and  interagency agreements. Under statutory law, the Coast Guard has  responsibility for operating the nation’s polar icebreaker fleet, which  supports the Coast Guard in carrying out its missions. For example, the  Coast Guard’s icebreaker fleet supports scientific research as part of its  Ice Operations mission and promotes maritime security as part of its  Defense Readiness mission, according to a 2013 Coast Guard report. In  addition, the goals and activities set forth in the National Strategy for the  Arctic Region and the 2009 presidential directive on the Arctic region  drive the Coast Guard’s need to maintain the ability to project a sovereign  presence in the Arctic—a standard which requires the use of a polar  icebreaker at certain times when seasonal ice covers large portions of the  Arctic region. The Coast Guard’s icebreaking responsibilities are also  derived from interagency agreements that commit it to providing  icebreaking services to other departments and agencies in support of  various strategic and scientific missions, including national defense. For  example, the Coast Guard assumed responsibility for the Navy’s  icebreaker fleet in1965 and a memorandum of agreement first signed in  2008 identifies how the Coast Guard’s icebreakers would be used to  support DOD. More recently, Coast Guard officials stated that the  President’s September 2015 announcement about national priorities in  the Arctic further emphasized the importance of the nation’s capability for  year-round access to this region. Appendix III provides a selection of the  laws and policies that are cited as sources for the Coast Guard’s need to  maintain polar icebreaking capability.

Coast Guard officials reported being able to minimally complete agency  polar icebreaking responsibilities, that is, carrying out the annual  McMurdo Station resupply in the Antarctic region and scientific research  in the Arctic, with two functional icebreakers. However, when neither the  Polar Sea nor the Polar Star was active in 2011 and 2012, the Coast  Guard did not maintain assured, year-round access to both the Arctic and  Antarctic, as the Healy cannot reach ice-covered areas with more than 4  ½ feet of ice. For these years, and in prior and subsequent years, the  National Science Foundation chartered foreign icebreakers to support the  resupply of the McMurdo Station, although National Science Foundation  officials reported that this was challenging. Coast Guard officials stated  that a short-term charter would not meet the Coast Guard’s needs in the  Antarctic region because a sovereign U.S. presence can only be  established by a vessel that is available year-round, able to fly the U.S.  flag, and perform Antarctic treaty inspections. Further, the Coast Guard  has set a target of meeting 100 percent of its internal and interagency  requests for polar icebreaking, and it annually calculates its success rate  in meeting this target. In the last 6 years of available data (fiscal years  2010 through 2015), the Coast Guard reported that it failed to attain this  target for 3 years—primarily when neither heavy icebreaker was  operational. Specifically, the Coast Guard was unable to complete 5 out  of 26 requests for polar icebreaking, including 4 out of 11 requests in  2011 and 2012 when both heavy icebreakers were unavailable. These  unfulfilled requests included support for the resupply of McMurdo Station,  Arctic Shield activities, and an Arctic science deployment, some of which  would have required weeks or months of icebreaker use. See Table 2  below for specific results.

The Coast Guard reported in acquisition documentation that the addition  of one heavy icebreaker would allow it to maintain current icebreaking  capacity by replacing the Polar Star after its useful service life ends in 4 to  7 years. However, the Coast Guard reported that increased heavy  icebreaking capacity is needed to fully meet requirements in the Arctic  and Antarctic regions. Although record lows for recent summer and early  autumn sea ice extent have made seasonal maritime navigation more  feasible in the Arctic, the Coast Guard reported that polar icebreakers can  still be necessary during these seasons to conduct research or to assist  other vessels. Winter sea travel is also still severely limited due to  extensive ice coverage across the Arctic region, necessitating heavy  icebreaker assistance. Furthermore, although slightly decreased in 2015,  the maximum ice extent in the Antarctic has expanded in recent years.  The Coast Guard reported that a medium icebreaker, like the Healy, can  complete many of the Coast Guard’s Arctic missions, but cannot operate  independently in the presence of thick ice. Even with melting Arctic ice,  Coast Guard officials noted that it would be risky to assume that a  medium icebreaker would be sufficient to provide year-round access to  the Arctic. In addition, Coast Guard officials anticipate that heavy  icebreaking capability may continue to be necessary in an operating  environment with much less ice overall because ice sometimes piles up,  creating thicker ice. Because only heavy polar icebreakers can provide  assured, year-round access to both polar regions, the Coast Guard  maintains that it must have heavy icebreaking capability to fully meet its  responsibilities as outlined above and in Appendix III.

A 2010 Coast Guard-commissioned study found an even greater need for  icebreakers, if the Coast Guard were to fully accomplish all of its polar  icebreaking responsibilities. Specifically, this study determined that at  least six icebreakers—three heavy and three medium—would be required  to carry out the Coast Guard’s statutory missions. To carry out its  statutory missions as well as fulfill all interagency responsibilities for  defense readiness, the report states that the Coast Guard would need  four to six heavy and two to four medium icebreakers depending on  various operational factors, such as whether the Coast Guard employs  multiple crewing models and where the Coast Guard homeports the  icebreakers. Recognizing the fiscal challenges posed by such a request,  Coast Guard officials have stated that obtaining a minimum of two heavy  icebreakers is needed to at least maintain the fleet’s self-rescue capability  in the event one vessel became beset in ice—a capability the Coast  Guard does not currently have. In addition, without two or more heavy  icebreakers, the Coast Guard reports that it may not be able to: (1)  complete its polar icebreaking missions if one vessel suffered a disabling  casualty, (2) conduct the McMurdo Station resupply and also ensure the  continued ability to operate in the Arctic, or (3) conduct the McMurdo  Station resupply if the mission required more than one icebreaker as it did  in prior years.

The Coast Guard Has Initiated an Icebreaker Acquisition Program and Is Considering Various Strategies

To maintain polar icebreaking capability after the Polar Star’s projected  service life ends between 2020 and 2023, the Coast Guard initiated a  program in 2013 to acquire a new heavy icebreaker and is currently  working to determine the optimal acquisition strategy. From fiscal years  2013 to 2016, Congress directed that $16 million of appropriated funds  were for the Coast Guard to conduct early acquisition activities, and the  President’s budget has since requested $150 million to continue pre- acquisition and design activities over multiple years starting in fiscal year  2017. As of May 2016, the acquisition program was in the Analyze/Select  phase, during which the Coast Guard was establishing asset  requirements, evaluating the feasibility of alternatives, and developing a  cost estimate for the preferred acquisition strategy. As part of this  phase, the Coast Guard reports that it will identify the optimal acquisition  strategy and will consider several options including new construction,  parent craft, and parent craft design, as well as leasing arrangements.

The President’s fiscal year 2017 budget request outlined plans to  accelerate the acquisition process, so that production activities  commence by 2020.

The Coast Guard expects a new heavy icebreaker to cost approximately  $1.09 billion, according to a 2013 preliminary estimate, which included  development, procurement, and Coast Guard facilities improvements for  one vessel. Although they have yet to complete a more detailed cost  estimate, Coast Guard officials stated that they believe the primary  construction cost drivers are likely to be the icebreaker’s size, weight, and  horsepower. While the Coast Guard’s icebreaker fleet supports other  federal agencies and departments, Coast Guard officials—as well as  other federal officials—stated that these other agencies and departments  do not require specific operational capabilities that would significantly  increase the overall acquisition cost of an icebreaker. Coast Guard  officials also noted that it would be unreasonable to build an icebreaker  that could operate in the Arctic but not the Antarctic because that would  limit the type of operations it could conduct.

To move forward with the acquisition process, the Coast Guard would  need to receive funding and ensure that a U.S.-based commercial  shipyard would be able to build the vessel. However, the Coast Guard’s  annual acquisition budget—which averaged $1.5 billion from fiscal year  2012 to fiscal year 2016—has primarily been allocated to other projects,  such as the National Security and Fast Response cutters. The Coast  Guard’s fiscal year 2016 acquisition budget was $1.945 billion— approximately 60 percent higher than the prior year, largely due to the  addition of a ninth National Security Cutter for which the Coast Guard had  not planned. We previously found when reviewing the Coast Guard’s  acquisition portfolio in 2014 that the Coast Guard was further from fielding  its planned fleet in 2014 than it was in 2009, in terms of the funding  needed to complete these programs.

The Coast Guard reported that it believes that the U.S. shipbuilding  industry—which must be used to build all Coast Guard vessels unless the  President has authorized a national security exception—is capable of  building a heavy icebreaker. Specifically, the Coast Guard reported that  several U.S. shipyards responded to a March 2013 market survey and  indicated that they have the ability or could make necessary infrastructure  upgrades to build a vessel similar to the Polar Star. Coast Guard officials  told us that the selected shipyard or shipyards would likely need to  upgrade their facilities because of the size, weight, and complexity of an  icebreaker and that facility upgrades represent a calculated risk on the  part of the shipyard, particularly if the Coast Guard only orders one  vessel. The Coast Guard met with industry representatives in March 2016  to learn about industry capabilities.

Prior GAO work on Navy and Coast Guard shipbuilding indicates that new  icebreaker construction is likely to be an expensive and lengthy process  because of cost growth associated with lead ships—that is, the first ship  constructed in a class of ships, which the Coast Guard icebreaker would  be. In September 2014, we identified cost growth that totaled over 150  percent for the first two lead ships of the Navy’s Littoral Combat Ship.  We also reported in May 2009 that lead ships often experience schedule  delays, such as the Navy’s first San Antonio-class ship which was  delivered 52 months late, and in June 2008 we reported that the lead  ship of the Coast Guard’s National Security Cutter was delayed by  approximately 2 years. Thus, the potential for costly delays on lead  ships has some precedent. The Coast Guard reported in 2015 that it will  begin to plan for the acquisition of additional heavy icebreakers in line  with the President’s September 2015 announcement.

Several Factors Affect the Coast Guard’s Options for Maintaining Icebreaking Capacity

Various factors limit the options available to the Coast Guard to maintain,  or increase, its icebreaker capacity, and the Coast Guard has reported  that the long-term lease of a polar icebreaker is unlikely to result in cost  savings when compared with a purchase. Specifically, as figure 6 depicts,  two key factors limiting the Coast Guard’s options are the lack of an  available icebreaker for lease that meets agency and legal requirements,  and the total cost associated with leasing.

Availability. The Coast Guard reported in October 2015 that no existing  icebreakers were available to lease or purchase that met both its legal  and operational requirements. First, with respect to legal requirements,  the Coast Guard would need to either purchase or demise charter an  icebreaker, as legal requirements associated with several Coast Guard  missions prohibit a short-term lease. Specifically, under federal law, to be  capable of conducting all of its statutory missions, the Coast Guard must  use a public vessel, which federal law defines as one that the United  States owns or demise charters. For example, federal law states that  the Coast Guard’s Ports, Waterways, and Coastal Security Mission may  be carried out with public vessels or private vessels tendered gratuitously  for that purpose. Similarly, for the Coast Guard to employ its law  enforcement authorities in the conduct of certain missions, the icebreaker  would need to operate as a warship, and warships are necessarily  sovereign immune, public vessels, according to Coast Guard officials.

In addition, federal law also provides that no Coast Guard vessel may be  constructed in a foreign shipyard. According to the Coast Guard,  besides the Polar Star and the Polar Sea, the only existing icebreakers  that are powerful enough to meet the Coast Guard’s operational  requirements were built in and are owned by Russia, and, thus, would not  comply with this legal requirement. As a result of these constraints, that  is, the lack of a U.S.-built icebreaker available to purchase or demise  charter with sufficient horsepower to conduct all of the Coast Guard’s  missions, the Coast Guard’s only procurement options are for a U.S.- based shipyard to agree to build a new icebreaker for the Coast Guard to  lease or purchase outright. However, the Coast Guard has also reported  that the long-term lease of a polar icebreaker built expressly for the Coast  Guard is likely to be more costly than purchasing an icebreaker for  several reasons.

Budgeting and Total Cost. Office of Management and Budget (OMB)  guidelines require federal agencies to acquire assets in the manner least  costly overall to the government. For a large acquisition like a heavy  icebreaker, OMB Circular A-94 requires the Coast Guard to conduct a  lease-purchase analysis based on total lifecycle costs. To then proceed  with a lease, the Coast Guard would need to show that leasing is  preferable to direct government purchase and ownership. The purpose of  this requirement is to promote efficient resource allocation through well- informed decision-making by the federal government. Budget  scorekeepers—specifically, OMB, the Congressional Budget Office, and  the House and Senate Budget Committees—score purchases and capital  leases at the outset of the acquisition. Based on scoring rules, the long- term lease of a polar icebreaker would not qualify as an operating lease,  which is intended for short-term needs and would allow the costs to be  recognized over time. As a result, whether the Coast Guard purchased  or leased an icebreaker, it would need full funding up front to enter into a  legal obligation with a shipbuilder, unless the Coast Guard uses  incremental funding, as was authorized in the Coast Guard Authorization  Act of 2015. With incremental funding authority, the Coast Guard would  be able to proceed with the acquisition with only part of the estimated  costs of a capital acquisition. However, we have previously discouraged  the use of incremental funding, except in cases with especially high  research and development costs, because incremental funding erodes  future fiscal flexibility and limits cost transparency.

The Coast Guard has also reported that the total cost of a long term lease  is likely to exceed the total cost of a purchase. A 2011 preliminary cost  analysis prepared for the Coast Guard indicated that the lease option  would be more costly to the federal government over an icebreaker’s  expected 30-year service life. According to this analysis, the prospective  ship owner’s profit rate would increase the overall expense as this profit  rate is priced into the lease, such that government ownership would be  less costly in the long run. Moreover, because a demise charter requires  the lessee to operate and maintain the vessel, the Coast Guard would not  be able to outsource crewing or maintenance activities, actions which we  previously reported could reduce ongoing operating costs. According to  a subsequent 2012 report prepared for the Coast Guard, legal and  operational requirements render additional cost-benefit analysis of leasing  unnecessary. Nevertheless, Coast Guard officials stated that they will  consider leasing as a possible acquisition strategy in a forthcoming  report, as directed by language in committee reports accompanying the  fiscal year 2014 DHS appropriations bill.

Previous GAO work on the question of leasing versus buying an  icebreaker identified important assumptions in comparing the costs to the  federal government and suggests that outright purchase could be a less  costly alternative than a long-term vessel lease. Assuming that the cost  of building and operating the vessel was the same under both the buy  and the lease scenarios, the cost advantage to government purchase  over leasing in our previous work was based on two factors. First, the  costs of private sector financing under a lease arrangement—which were  higher than the government’s borrowing costs—could be expected to be  passed on to the federal government in lease payments, thereby  increasing the vessel’s financing costs over what they would be under  outright government purchase. Second, under a lease arrangement, an  additional profit would accrue to the lessor for services related to its  retained ownership of the vessel. Separately, in multiple other reports we  found that when other agencies sought to enter into long-term lease  arrangements, they did so for reasons unrelated to cost, such as  acquiring already-built aircraft sooner, and these explanations are not  pertinent in this case.

The Coast Guard Is Developing a Bridging Strategy to Address Expected Heavy Icebreaker Service Gap

Anticipating a likely gap in heavy icebreaker capability between the end of  the Polar Star’s service life and the deployment of a new icebreaker, the  Coast Guard is developing a bridging strategy, as required by law, to  determine how to address this expected gap. Based on current  projections, if the Coast Guard’s icebreaker acquisition proceeds on  schedule, the Coast Guard will likely lack heavy icebreaker capability for  several years. Currently, the Coast Guard estimates that the Polar Star’s  service life will likely extend until 2020 to 2023, while the Coast Guard’s  2016 timeline for a new icebreaker indicates that it would not achieve its  operational requirements until fiscal year 2026, leaving a potential gap in  heavy icebreaking capability of 3 to 6 years. See Figure 7.

The Coast Guard has not determined the cost-effectiveness of  reactivating the Polar Sea, and reported that it was conducting a Bridging  Strategy Alternatives Analysis that will assess and make  recommendations on whether to reactivate the Polar Sea and whether to  further extend the service life of the Polar Star. Coast Guard officials said  that they have not established a completion date for this report, but do not  anticipate a final decision on the Polar Sea before fiscal year 2017, after  which they will evaluate the cost-effectiveness of extending the Polar  Star’s life, if necessary.

Given the heightened interest in the Arctic, the Coast Guard has taken  actions to implement its Arctic strategy, and conduct Arctic operations— both of which may help the Coast Guard better understand and mitigate  identified Arctic capability gaps. In addition, the Coast Guard is tracking,  or has plans to track, its various activities in the Arctic. For example, the  Coast Guard reports on activities it conducts during its annual Arctic  Shield operation in an AAR each year, and is in the process of the  developing a system that will track its Arctic actions taken to implement  the various strategies and directives. However, the Coast Guard has not  systematically assessed how its actions have helped to mitigate Arctic  capability gaps. Such an assessment—which includes developing  measures for gauging its progress, when feasible—is critical for the Coast  Guard to be fully informed about its own progress in helping to mitigate  these gaps. By systematically assessing and measuring how its actions  have helped to mitigate capability gaps, the Coast Guard will better  understand the status of these gaps and be better positioned to  effectively plan its Arctic operations, including its allocation of resources  and prioritization of activities to target the gaps.

To better position the Coast Guard to effectively plan its Arctic operations,  we recommend that the Commandant of the Coast Guard take the  following two actions: develop measures, as appropriate, for gauging how the agency’s  actions have helped to mitigate the Arctic capability gaps; and design and implement a process to systematically assess the extent  to which actions taken agency-wide have helped mitigate the Arctic  capability gaps for which it has responsibility.

We provided a draft of this report to the Departments of Homeland  Security, Commerce, Defense, and Interior and the National Science  Foundation for comment. DHS provided written comments, which are  summarized below and reproduced in full in appendix VI. In addition,  components within the Departments of Commerce and Interior provided  technical comments, which we incorporated as appropriate.

In its written comments, DHS concurred with and described actions it has  planned to address our recommendation that the Coast Guard develop  measures and design and implement a process for systematically  assessing the extent to which its actions have helped to mitigate Arctic  capability gaps. Specifically, DHS stated that the Coast Guard plans to  develop specific measures for some of its Arctic activities which will be  tracked on the web-based site that it has under development. DHS further  stated that these measures will be used as part of the Coast Guard’s  annual review of its implementation plan for its Arctic strategy. Through  this annual review, the Coast Guard plans to systematically assess how  its actions have helped to mitigate the capability gaps for which the Coast  Guard is the lead agency, per the Implementation Framework for the  National Strategy for the Artic Region. According to DHS, this review will  begin in December 2016 and continue throughout calendar year 2017.  We believe that these actions will help the Coast Guard better understand  the status of these capability gaps and better position it to effectively plan  its Arctic operations. However, we continue to believe that it is important  for the Coast Guard to also systematically assess how its actions affect  Arctic capability gaps for which it is not the lead as well. Although the  Coast Guard may not be the lead for these gaps, its Arctic missions can  still be affected by them, and thus, it remains important for the Coast  Guard to be aware of its own progress in helping to mitigate its part of  these gaps.

As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  committees and federal agencies. In addition, the report will be available  at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-7141 or groverj@gao.gov. Contact points for our Office  of Congressional Relations and Public Affairs may be found on the last  page of this report. Key contributors to this report are listed in appendix  VII.

Appendix I: Summer Minimum Ice Extent from 2004 to 2015, Compared with the 1981–2010 Median Minimum Ice Extent

Appendix II: Selected Federal Stakeholders and Interagency Groups with Arctic Responsibilities

Appendix II: Selected Federal Stakeholders  and Interagency Groups with Arctic  Responsibilities Examples of Arctic responsibilities  The U.S. Coast Guard is a multimission, maritime military service within the Department of  Homeland Security that has responsibilities including maritime safety, security,  environmental protection, and national defense, among other missions. Other  departmental components also have Arctic responsibilities. For example, the National  Protection and Programs Directorate protects critical infrastructure, and the Federal  Emergency Management Agency has responsibility for disaster assistance that could  increase with climate change.

The Department of Commerce’s National Oceanic and Atmospheric Administration  provides information on Arctic oceanic and atmospheric conditions, issues warnings for  hazardous weather, issues weather and ice forecasts, provides fisheries management  and enforcement, develops and maintains nautical charts, provides scientific support in  the event of oil or other hazardous material spills, and operates the Search and Rescue  Satellite Aided Tracking System, among other responsibilities. The National  Telecommunications and Information Administration under the Department of Commerce  is responsible for the telecommunication infrastructure in the Arctic.

The Department of Defense is responsible in the Arctic and elsewhere for securing the  United States from direct attack; securing strategic access and retaining global freedom of  action; strengthening existing and emerging alliances and partnerships; and establishing  favorable security conditions.

The Department of the Interior is responsible for management and regulation of resource  development in the U.S. Arctic region and coordinates with the Coast Guard on safety  compliance inspections of offshore energy facilities and in the event of a major oil spill.  Specifically, within the Department, the Bureau of Ocean Energy Management is  responsible for managing development of offshore resources, and the Bureau of Safety  and Environmental Enforcement enforces safety and environmental regulations.

The Department of State is responsible for formulating and implementing U.S. policy on  international issues concerning the Arctic and Antarctic, leading the domestic interagency  Arctic Policy Group, and leading U.S. participation in the Arctic Council. The department  has also established a senior-level representative for the Arctic region to support efforts  on increasing engagement with international partners.

The Department of Transportation and its component agency, the Maritime  Administration, is involved in marine transportation and shipping issues in the Arctic and  elsewhere, among other things.

The National Science Foundation is responsible for funding U.S. Arctic research— including research on the causes and effects of climate change––and providing  associated logistics and infrastructure support to conduct this research. The National  Science Foundation and Coast Guard also coordinate on the use of the Coast Guard’s  icebreakers for scientific research.

Other federal departments and agencies also have a role in U.S. Government efforts in  the Arctic, but were not discussed in this report. They include the Environmental  Protection Agency, Department of Energy, Department of Health and Human Services,  Federal Communications Commission, and National Aeronautics and Space  Administration, among others.

Examples of Arctic responsibilities  The Arctic Executive Steering Committee provides guidance to federal departments and  agencies and coordinates implementation of national Arctic policies and plans, such as  the National Strategy for the Arctic Region and its implementation plan. The steering  committee is chaired by the Director of the Office of Science and Technology Policy and  consists of representatives from over 20 federal departments, agencies, and offices.

The Arctic Policy Group is an informal interagency group led by the Department of State  that shares Arctic-related information and oversees implementation of U.S. Arctic policy.  The group consists of officials from numerous federal agencies and the state of Alaska  Governor’s and Lieutenant Governor’s offices.

The Committee on the Marine Transportation System is a federal interagency coordinating  committee that assesses the adequacy of the marine transportation system and  coordinates and makes recommendations on federal policies that affect the marine  transportation system. The Coast Guard and the National Oceanic and Atmospheric  Administration co-chair the Committee’s Arctic Integrated Action Team with the Maritime  Administration.

The Interagency Arctic Research Policy Committee helps set priorities for future Arctic  research, works with the Arctic Research Commission to develop and establish national  Arctic research policy, and promotes federal interagency coordination on Arctic research  activities, among other things. The committee is chaired by the National Science  Foundation and consists of representatives from over 15 departments, agencies, and  offices, including the Department of Defense.

The Interagency Coordinating Committee on Oil Pollution Research coordinates federal oil  pollution research activities and establishes oil pollution research priorities. The  Committee is chaired by the Coast Guard with the National Oceanic and Atmospheric  Administration, the Bureau of Safety and Environmental Enforcement, and the  Environmental Protection Agency serving as rotating Vice Chairs.

The Interagency Working Group on Coordination of Domestic Energy Development and  Permitting in Alaska, led by the Department of the Interior, coordinates federal oversight of  the development of energy resources and associated infrastructure in Alaska.

The National Ocean Council consists of representatives from 27 federal agencies,  departments, and offices and is responsible for implementation of the National Ocean  Policy.

The U.S. Arctic Research Commission is responsible for, among other things, developing  and establishing an integrated national Arctic research policy that guides federal agencies  in developing and implementing their Arctic research programs. The commission consists  of representatives from the National Science Foundation, academic and research  institutions, private industry, and indigenous residents of the U.S. Arctic.

The Extended Continental Shelf Task Force, led by the Department of State, coordinates  the collection and analysis of relevant data and prepares the necessary documentation to  establish the limits of the U.S. continental shelf in accordance with international law.

Appendix III: Selected Polar Icebreaking Authorities and Mandates

Table 3 identifies selected laws and policies that cite polar icebreaking  capability.  .

Appendix IV: Coast Guard-Led Actions to Implement the National Strategy for the Arctic Region

The May 2013 National Strategy for the Arctic Region seeks to integrate  the work of federal departments and agencies with the activities already  underway in Alaska and at the international level. The Coast Guard is the  lead for 7 of the 36 total tasks (or objectives) in the January 2014  implementation plan, and DHS and the Coast Guard support another 19.  Each task also has various, actionable next steps. According to Coast  Guard officials, the agency is responsible for coordinating the completion  of tasks for which it has been identified as the lead agency, as funding  and resources allow. To complete its tasks, the Coast Guard must  coordinate with other agencies. As described in the implementation plan,  federal departments and agencies are to report on their progress on the  tasks, and the plan is to be revisited after 5 years to ensure that it still  meets the intent and priorities of the nation. The implementation plan  includes timeframes for some, but not all, next steps, and Coast Guard  officials stated that tasks are being completed as resources permit.  According to a March 2016 White House report describing federal  agencies’ progress on Arctic strategy tasks, the Coast Guard, along with  supporting agencies, has taken action toward implementing all the  strategy tasks for which the Coast Guard is assigned as the lead, as  detailed in table 4.

In March 2016, the White House issued the Implementation Framework  for the National Strategy for the Arctic Region which is to supersede its  2014 implementation plan. The AESC led the efforts to develop the  revised framework, which updates the 2014 implementation plan by (1)  incorporating the Administration’s new priorities into the existing lines of  efforts, particularly placing greater importance on community  sustainability and resilience; (2) removing actions listed in the 2014  implementation plan that have been completed, or are no longer  considered an actionable priority; (3) including factors to improve  efficiency by reducing redundancies and closing interagency coordination  gaps; and (4) increasing the importance of science by incorporating the  entire Interagency Arctic Research Policy Committee Arctic Research  Plan by reference into the Pursuing Responsible Arctic Region  Stewardship line of effort. In addition, the revised framework assigned an  overall coordination lead for each line of effort from the national strategy.  The 2016 framework includes 28 tasks that encompass various next  steps and, unlike the 2014 plan, assigned a lead agency to each next  step rather than to the overarching task. The Coast Guard was assigned  to lead next steps that fall within 8 of the 28 tasks—7 of which it was also  assigned as the lead in the 2014 plan. For the additional 2016 task, the  Coast Guard has the lead for one of the next steps, which involves the  analysis and monitoring of illegal, unreported, and unregulated fishing in  the Arctic. The 2016 framework is to be revisited in 5 years; however, the  framework states that because the Arctic is undergoing changes, the  AESC may make adjustments before then. According to Coast Guard  officials, the AESC’s efforts to update the implementation plan’s priorities  are important because the tasks in the national strategy need to be  balanced with new priorities announced by the President—some of which  may be difficult to accomplish because they are evolving and may be  planned further into the future than the 10-year national strategy.  Further, Coast Guard officials stated that better prioritization of the  national efforts will help the Coast Guard in making decisions about what  it needs to achieve in the Arctic given its limited resources.

Appendix V: Coast Guard-Involved Actions to Implement the National Ocean Policy

The April 2013 National Ocean Policy Implementation Plan and its  appendix—developed by the National Ocean Council—identify the Arctic  as one of nine key objectives and include tasks for federal agencies  consistent with their existing missions and activities. Although the plan  does not assign designated leads for each task, the Coast Guard is  charged with helping to implement three Arctic-specific tasks—which  include various next steps. The National Ocean Council developed and  maintains a U.S. government-authorized, web-based site for federal  agencies to report the status of the tasks under the National Ocean  Policy. The Coast Guard, along with supporting agencies, has taken  steps toward implementing all three of its assigned tasks, as detailed in  table 5. For example, the National Ocean Council reported that the Coast  Guard and its partners completed one task in its entirety, and that the two  other tasks and related next steps were from 55 to 95 percent complete,  as of December 2015. All of the Coast Guard’s tasks were to have been  completed in either 2013 or 2014, but the Coast Guard reported to the  National Ocean Council that funding and resource constraints challenged  their ability to complete the tasks in their entirety.

Appendix VI: Comments from the Department of Homeland Security

Appendix VII: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Dawn Hoff (Assistant Director),  Tracey Cross (Analyst-in-Charge), Jillian Schofield, Linda Collins, Eric  Warren, Susan Hsu, Tracey King, Chuck Bausell, Jan Montgomery,  Michele Fejfar, Eric Hauswirth, Katherine Trimble, Laurier Fish, Carol  Henn, and John Crawford made key contributions to this work.

Question: What did the US Coast Guard report on their Arctic action?

Answer: The U.S. Coast Guard, within the Department of Homeland Security, reported making progress implementing its Arctic strategy .

Question: What specific actions has the Coast Guard reported?

Answer: For example, the Coast Guard reported conducting exercises related to Arctic oil spill response and search and rescue, and facilitating the formation of a safety committee in the Arctic, among other tasks in its strategy.

Question: How does the Coast Guard track their efforts?

Answer: To track the status of these efforts, the Coast Guard is developing a web-based tool and anticipates finalizing the tool in mid-2016.

The Coast Guard Reported Progress Implementing its Arctic Strategy

Question: What is the status of the Coast Guard's improvement of its Arctic missions?

Answer: The Coast Guard assessed its capability to perform its Arctic missions and identified various capability gaps—including communications, infrastructure, and icebreaking, and has worked to mitigate these gaps with its Arctic partners, such as other federal agencies. Specifically, Coast Guard officials stated that the agency's actions to implement the various Arctic strategies and carry out annual Arctic operations have helped to mitigate Arctic capability gaps.

Question: How has the Coast Guard failed in their attempts to mitigate Arctic gaps?

Answer: However, the Coast Guard has not systematically assessed the extent to which its actions agency-wide have helped to mitigate these gaps.

Question: Why does the Coast Guard believe their attempts have failed?

Answer: Coast Guard officials attributed this, in part, to not being able to unilaterally close the gaps.

Question: What authority does the Coast Guard have to assess their actions?

Answer: While mitigating these gaps requires joint efforts among Arctic partners, the Coast Guard has taken actions in the Arctic that are specific to its missions and therefore has responsibility for assessing the extent to which these actions have helped to mitigate capability gaps.

Question: What would be the benefits of this self-assessment?

Answer: By systematically assessing and measuring its progress, the Coast Guard will better understand the status of these gaps and be better positioned to effectively plan its Arctic operations.

The Coast Guard Has Assessed Its Arctic Capabilities and Taken Actions to Mitigate Gaps but Has Not Systematically Assessed its Progress

The Coast Guard Assessed Its Capabilities in the Arctic and Identified Capability Gaps

The Coast Guard Has Taken Actions to Help Mitigate Capability Gaps but Has Not Systematically Assessed Its Progress in this Effort

Question: In what responsibilities has the Coast Guard fallen short?

Answer: The Coast Guard has been unable to fulfill some of its polar icebreaking responsibilities with its aging icebreaker fleet, which currently includes two active polar icebreakers.

Question: What history of incomplete tasks are there for 2011 and 2012?

Answer: In 2011 and 2012, the Coast Guard was unable to maintain assured, year-round access to the Arctic and did not meet 4 of 11 requests for polar icebreaking services.

Question: Why is the Coast Guard attempting to procure a new icebreaker?

Answer: With its one active heavy icebreaker—which has greater icebreaking capability—nearing the end of its service life, the Coast Guard initiated a program in 2013 to acquire a new one and is working to determine the optimal acquisition strategy.

Question: Why would this be limited?

Answer: However, the Coast Guard's efforts to acquire an icebreaker, whether by lease or purchase, will be limited by legal and operational requirements.

Question: What will be the result of this need for an icebreaker?

Answer: In addition, current projections show that the Coast Guard is likely to have a 3- to 6-year gap in its heavy icebreaking capability before a new icebreaker becomes operational, as shown below.

Question: How will the Coast Guard address this issue?

Answer: The Coast Guard is developing a strategy to determine how to best address this expected gap.

Coast Guard Has Been Unable to Fulfill All Polar Icebreaking Operations and Is Taking Steps to Begin Icebreaker Acquisition

The Coast Guard Has Been Unable to Reliably Fulfill Polar Icebreaking Responsibilities with Current Fleet

The Coast Guard Has Initiated an Icebreaker Acquisition Program and Is Considering Various Strategies

Several Factors Affect the Coast Guard’s Options for Maintaining Icebreaking Capacity

The Coast Guard Is Developing a Bridging Strategy to Address Expected Heavy Icebreaker Service Gap

Question: Why has US interest in the Arctic increased?

Answer: The retreat of polar sea ice in the Arctic, as reported by the U.S. National Snow and Ice Data Center, combined with an expected increase in human activity, has heightened U.S. interests in the Arctic region.

Question: What actions has the federal government taken?

Answer: To supplement U.S. Arctic policy, the White House and federal agencies have issued Arctic strategies and plans.

Question: What is the relationship between the Coast Guard and the Arctic?

Answer: Since the Arctic region has a substantial maritime domain, the Coast Guard plays a significant role in Arctic policy implementation and enforcement.

Question: What was GAO asked to review?

Answer: GAO was asked to examine the Coast Guard's responsibilities, capabilities, and plans for the Arctic.

Question: What does this report cover?

Answer: This report discusses, among other things, the extent to which the Coast Guard has (1) reported progress in implementing its Arctic strategy, (2) assessed its Arctic capabilities and taken actions to mitigate any identified gaps, and (3) reported being able to carry out polar icebreaking operations.

Question: What materials did the GAO use for this review?

Answer: GAO reviewed relevant laws and policies and Coast Guard documents that detail its Arctic plans. GAO conducted a site visit to Alaska and interviewed officials from the Coast Guard, state and local government entities, native village corporations, and private or nonprofit organizations.

Question: To what extent are these findings generalizable?

Answer: These observations are not generalizable, but provided insights on Coast Guard activities.

Diminishing Ice Opens Potential for Increased Activity in the Arctic

National Strategic Guidance and Policies Govern Arctic Operations

The Coast Guard Is the Primary Federal Maritime Agency in the Arctic, but Multiple Stakeholders Have Arctic Responsibilities

Several Factors Affect Planning for Arctic Shield Activities