Coast Guard Shore Infrastructure: Applying Leading Practices Could Help Better Manage Project Backlogs of at Least $2.6 Billion

The Coast Guard, within the Department of Homeland Security (DHS), owns or leases more than 20,000 shore facilities, such as piers, docks, boat stations, air stations, and housing units, at more than 2,700 locations. In June 2017, the Coast Guard testified to Congress that it had a $1.6 billion recapitalization backlog for its shore infrastructure, which had a replacement value of about $20 billion.

GAO was asked to review the Coast Guard's management of its shore infrastructure. This report examines: (1) what is known about the condition and costs of managing the Coast Guard's shore infrastructure, and (2) the extent to which the Coast Guard's process for managing its shore infrastructure meets leading practices.

To answer these questions, GAO reviewed relevant laws and Coast Guard annual reports on its shore infrastructure, analyzed Coast Guard data, and interviewed Coast Guard officials. GAO also compared Coast Guard policies and procedures, and actions taken during fiscal years 2012 through 2018 to manage its shore infrastructure, against the leading practices that GAO previously identified for managing public sector maintenance backlogs.

About 45 percent of the Coast Guard's shore infrastructure is beyond its service life, and its current backlogs of maintenance and recapitalization projects, as of 2018, will cost at least $2.6 billion to address, according to Coast Guard information. The deferred maintenance backlog included more than 5,600 projects, with an estimated cost of $900 million. The recapitalization and new construction backlog had 125 projects, with an estimated cost of at least $1.77 billion as of 2018 (see figure). GAO's analysis of Coast Guard data found that as of November 2018 there were hundreds of recapitalization projects without cost estimates—the majority of recapitalization projects. Coast Guard officials told GAO that these projects are in the preliminary stages of development.

The Coast Guard's process for managing its shore infrastructure did not fully meet 6 of 9 leading practices that GAO previously identified. Of the nine leading practices, the Coast Guard met three, partially met three, and did not meet three. For example, the Coast Guard generally has not employed models for predicting the outcome of maintenance investments and optimizing among competing investments, as called for in leading practices. In one instance, the Coast Guard used a model to optimize maintenance for its aviation pavement and, according to Coast Guard officials, found that it could save nearly $14 million by accelerating investment in this area (e.g., paving runways) sooner rather than deferring such maintenance. Coast Guard officials told us that such modeling could be applied within and across all of its shore infrastructure asset types, but the Coast Guard did not implement the results of this model and does not require their use. Without requiring the use of such models, the Coast Guard could be missing opportunities to achieve cost savings and better manage its maintenance backlogs.

GAO is making six recommendations, which DHS agreed to implement, including that the Coast Guard align its management of its shore infrastructure backlogs with leading practices by requiring the use of models for predicting the outcome of, and optimizing among, competing investments for maintenance projects.

The United States Coast Guard, within the Department of Homeland  Security, is the principal federal agency charged with ensuring the  security and safety of the waters subject to U.S. jurisdiction and enforcing  laws which prevent death, injury, and property loss in the maritime  environment. To help carry out these and other missions, the Coast  Guard owns or leases more than 20,000 shore facilities, such as piers,  docks, boat stations, air facilities, and housing units at more than 2,700  locations. This infrastructure is often positioned along the nation’s  coastlines where it can be vulnerable to damage from extreme weather.  All Coast Guard missions begin and end at a shore facility, and over 80  percent of Coast Guard personnel work onshore, according to the Coast  Guard. In June 2017, Coast Guard officials testified that the agency had  a $1.6 billion backlog of projects for recapitalization of its shore  infrastructure, as well as new construction. The replacement value of this  infrastructure was about $20 billion as of 2017. Being located along the  U.S. coastlines has resulted in some facilities requiring unexpected repair  and recapitalization, such as those impacted by superstorm Sandy, and  hurricanes Harvey, Irma, Maria, and Matthew. In July 2018, we reported  that the Coast Guard had not been able to address shore infrastructure  projects, primarily due to lack of funding, longstanding acquisition  management challenges, and that previous Coast Guard leadership  prioritized the acquisition of new operational assets to replace aging ships  and aircraft, over maintaining and repairing shore infrastructure.

According to the National Research Council (NRC), public sector  buildings are assets acquired through the investment of tax dollars, and  underfunded maintenance can affect public health and safety, reduce  productivity, and cause long-term financial losses. In 2003, we added the  management of federal real property to our high-risk list of the  longstanding challenges the government faces. We have previously  reported on leading practices for managing public infrastructure  maintenance and repair backlogs, such as having clear maintenance and  repair investment objectives, conducting condition assessments as a  basis for establishing appropriate expenditure levels, aligning real  property portfolios with mission needs, disposing of unneeded assets,  and identifying the types of risks posed by the lack of timely investment.

We have also reported that public assets require adequate maintenance,  repair, and recapitalization—which can include replacing systems at the  end of their useful life—to keep them in good condition.

You asked us to review the condition of and costs associated with the  Coast Guard’s management of its shore infrastructure. This report  examines (1) what is known about the condition and costs of managing  the Coast Guard’s shore infrastructure, and (2) the extent to which the  Coast Guard’s process for managing its shore infrastructure meets  leading practices for managing public maintenance backlogs.

To identify what is known about the condition and costs of managing the  Coast Guard’s shore infrastructure, we reviewed Coast Guard annual  reports on its shore infrastructure. We also reviewed Coast Guard  documentation and data on its shore infrastructure inventory to describe  the condition and costs of managing these assets. We examined the  Coast Guard’s shore Acquisition, Construction, and Improvements (AC&I)  backlog of projects the Coast Guard has identified as necessary to fulfill  its missions (i.e., its Shore Facilities Requirements List) from fiscal years  2012 through 2018, as well as its depot-level maintenance backlog as of  March 2018. We also reviewed planning and budget documents such as  (a) the Coast Guard’s annual Unfunded Priorities List, which identifies  projects the Coast Guard would undertake if funding were available, and  (b) its Congressional Budget Justifications, to examine how the Coast  Guards’ reported Procurement, Construction, and Improvements (PC&I)  backlog has changed over time. We interviewed officials from Coast  Guard headquarters as well as personnel from all six Coast Guard Civil  Engineering Units (CEU) with responsibilities for categorizing the  condition of infrastructure, among other things, to obtain their field-level  perspectives on the condition of Coast Guard shore infrastructure.

To evaluate the extent to which the Coast Guard’s process for managing  its shore infrastructure met leading practices for managing public sector  maintenance backlogs, we analyzed Coast Guard plans, policies,  procedures, and related laws for managing, maintaining, and repairing  shore infrastructure. We identified and analyzed Coast Guard guidance  on its process for prioritizing projects for maintenance and repair of its  shore infrastructure, and we assessed Coast Guard practices against the  leading practices for managing maintenance backlogs that we identified in  our prior work. We also compared Coast Guard practices with the Office  of Management and Budget’s (OMB) program evaluation and capital  programming guidance. We used the following scale to evaluate the  Coast Guard’s management of its shore infrastructure deferred  maintenance and repair against the leading practices:

Met—The Coast Guard properly considered the leading practice and  demonstrated with documentary evidence that it had fully applied it.

Partially Met—The Coast Guard properly considered and  demonstrated with some documentary evidence that it had applied the  leading practice to some extent.

Not Met—The Coast Guard did not properly consider or apply the  leading practice and had no documentary evidence verifying that it  had applied it.

We interviewed officials from Coast Guard Headquarters, the Shore  Infrastructure Logistics Center, the Coast Guard’s two operational  commands (Atlantic Area Command and Pacific Area Command), and  the six CEUs to obtain their perspectives on the process for maintaining  and repairing shore infrastructure, and to assess the extent to which  Coast Guard actions align with leading practices for managing federal  agencies’ deferred maintenance and repair backlogs. For both objectives,  we conducted data reliability assessments, including interviewing agency  officials and reviewing documentation, to ensure that the data used in our  analyses were sufficiently reliable for our purposes. While we identified  limitations with some of the data, as discussed later in our report, we  determined that the data are sufficiently reliable for the purposes of  reporting on the Coast Guard’s overall portfolio of shore infrastructure  assets, and reporting on the minimum amount of money the Coast Guard  identified as needed to complete deferred repair and Procurement,  Construction and Improvements projects. See Appendix I for additional  details on our scope and methodology.

We conducted this performance audit from November 2017 to February  2019 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.

Coast Guard’s Organizational Approach to Managing Its Shore Infrastructure Portfolio

Coast Guard shore infrastructure includes buildings and structures,  which it has organized into 13 asset types, known as asset lines. Table  1 provides information on Coast Guard asset lines, including examples of  assets, the number within each asset line in 2017, and the Coast Guard’s  estimated replacement value of each asset line in 2017—the most recent  value available at the time of our review.

The Coast Guard’s Office of Civil Engineering sets Coast Guard-wide civil  engineering policy, which includes facility planning, design, construction,  maintenance, and disposal. The Coast Guard’s Shore Infrastructure  Logistics Center, established in 2009, is to manage and coordinate  infrastructure condition assessments via six regional Civil Engineering  Units (CEUs), along with other divisions and offices. The condition of  individual shore infrastructure assets is determined by CEU personnel  and civil engineers in the field. According to Coast Guard officials, every  Coast Guard facility, such as a base or boat station, is to be inspected by  a CEU representative every 3 years. The representative is to conduct a  facility condition assessment of all shore infrastructure assets—buildings  and structures—located at that facility. According to Coast Guard CEU  officials, the representative is to identify if any new maintenance-related  deficiencies exist at the facility and add them to the backlog of projects,  review the previous backlog, and verify that the Coast Guard’s shore  facilities’ inventory records are correct. This process is intended to help  define the current conditions of assets and identify maintenance needs.

According to Coast Guard guidance, the Shore Infrastructure Logistics  Center also establishes project priorities for the acquisition, programmed  depot maintenance, major repair, and modification of Coast Guard shore  facilities, and implements shore infrastructure policies. Among other  things, the Shore Infrastructure Logistics Center is to (1) assure that all  Coast Guard facilities meet their operational and functional requirements,  (2) take corrective action before advanced deterioration requires major  repairs, (3) ensure preventative maintenance is performed on a routine  schedule, and (4) prevent over-maintenance and under-maintenance. In  addition, this guidance states that all Coast Guard property must have a  documented, standardized system of maintenance for facilities by  designated personnel familiar with, and properly trained on, the  maintenance system in place to support its shore infrastructure.

Coast Guard’s Civil Engineering Program Has a Requirements-Based Budget to Determine Funding Needs

In 2016, the Coast Guard’s civil engineering program began using  requirements-based budget planning to determine shore infrastructure  funding needs. According to the Coast Guard, a requirements-based  budget is an estimate of the cost to operate and sustain the Coast  Guard’s shore infrastructure portfolio of assets over the lifecycle of the  asset, from initial construction or capital investment through divestiture or  demolition. Coast Guard budgeting for shore infrastructure distinguishes  between procurement and acquisitions and recurring and non-recurring  maintenance, among other things. Procurement and acquisitions  encompasses major projects to alter, acquire, or build new  infrastructure—for example, modifying the bay doors on a boat garage so  that larger boats can be accommodated. In contrast, there are two types  of maintenance for shore infrastructure. Routine recurring maintenance,  known as Organizational-Level Maintenance (OLM), includes tasks such  as clearing moss and debris from a rooftop drain or applying caulk to seal  a building. Non-recurring maintenance, known as Depot-Level  Maintenance (DLM), consists of major maintenance tasks that are beyond  the capability of an individual unit, such as replacing exterior doors and  windows.

The Coast Guard uses three accounts for its shore infrastructure.  Amounts in the Procurement, Construction and Improvements (PC&I)  account are used for the acquisition, procurement, construction,  rebuilding, and improvement of shore facilities and are directed to specific  projects. Amounts in the shore OLM account are used for routine  recurring maintenance, and amounts in the DLM account are used for  major maintenance and repair of Coast Guard real property. See Table  2 for additional information about these accounts.

Coast Guard Utilizes Planning Boards to Prioritize Shore Infrastructure Projects

The Coast Guard makes decisions regarding the allotment of resources  for shore infrastructure through PC&I, regional DLM, and central DLM  planning boards, which meet twice annually to prioritize Coast Guard  shore infrastructure needs on the basis of expected appropriations and  other factors, such as damage caused by natural disasters. These boards  are responsible for evaluating potential shore infrastructure projects that  have been identified by managers who are responsible for evaluating,  ranking, and recommending projects to the boards within their specified  product line. For example, aviation asset line managers are responsible  for aviation-related shore infrastructure projects, such as runways,  landing areas, and hangars. Table 3 provides specific information on  these planning board responsibilities and members.

Figure 1 shows how the planning boards are to prioritize shore  infrastructure projects. Additional details about the planning boards’  processes, including the extent to which they are documented and align  with leading practices, are described later in this report.

Coast Guard Is Required to Report Unfunded Shore Infrastructure Priorities

The Coast Guard is statutorily required to provide a list of each unfunded  priority, including unfunded shore infrastructure priorities, to certain  committees of Congress to support the President’s budget, and its 5- year Capital Investment Plan (CIP). The term ‘unfunded priority’ means  a program or mission requirement that (1) has not been selected for  funding in the applicable proposed budget, (2) is necessary to fulfill a  requirement associated with an operational need, and (3) the  Commandant would have recommended for inclusion in the applicable  proposed budget had additional resources been available, or had the  requirement emerged before the budget was submitted.

Almost Half of the Coast Guard’s Shore Infrastructure is Beyond Its Service Life, and Project Backlogs Will Cost at Least $2.6 Billion to Address

Coast Guard Reported that 45 Percent of Its Shore Infrastructure Is Beyond Its Service Life

As of 2017, the Coast Guard’s annual report on shore infrastructure  stated that 45 percent of Coast Guard assets have exceeded their service  lives. The Coast Guard also reported that its overall shore inventory has  a 65-year service life. For example, the Coast Guard’s 2017 shore  infrastructure report identified at least 65 percent of aviation pavements,  60 percent of aviation fuel facilities, and at least 53 percent of piers—all of  which the Coast Guard has identified as mission-critical assets—as being  past their service lives. Coast Guard officials told us that the agency had  changed their service life standard from 50 years to service lives linked to  each asset’s assigned category code, based on Department of Defense  (DOD) standards, before they reported service life calculations in their  2017 annual report on shore infrastructure. As a result of this change,  some shore infrastructure that has been in service 50 to 65 years, which  would previously have been identified as past its service life, will be  characterized by the Coast Guard as within its service life—a better  condition than the Coast Guard would have reported under its 50-year  standard.

Additionally, in 2017, the Coast Guard rated its overall shore  infrastructure condition as a C- based on criteria it derived from  standards developed by the American Society of Civil Engineers. Some  asset lines, such as aviation, whose assets are generally mission-critical,  are rated lower. For example, the Coast Guard rated its industrial asset  line as a D, in part because 8 of the 9 assets which comprise the Coast  Guard Yard—the only Coast Guard facility that can perform drydock  maintenance on large Coast Guard ships—are more than 5 years beyond  their service life. Table 4 shows additional detail about Coast Guard  asset lines, including the rate at which the Coast Guard reported these  assets were functioning past their service life, and the condition grades  assigned by the Coast Guard for fiscal year 2017.

According to Coast Guard officials, the demand placed on the Coast  Guard’s shore infrastructure in recent years has increased because of the  new ships and aircraft the Coast Guard has acquired. For example, a  senior Coast Guard official told us that the agency has recently needed to  upgrade some of its hangars with liquid oxygen storage facilities in order  to support the Coast Guard’s new HC-27A aircraft. Another official told  us that because the Coast Guard’s National Security Cutters—which the  Coast Guard began operating in 2010—are 40 feet longer than the High  Endurance Cutters they are replacing, the Coast Guard has had to either  build new piers or lengthen existing ones.

Coast Guard’s Data Indicate that Project Backlogs of Shore Infrastructure Will Cost At Least $2.6 Billion to Address, as of 2018

Coast Guard data show that it will cost at least $2.6 billion to address its  two project backlogs—(1) recapitalization and new construction, and (2)  deferred maintenance. Given the level at which the Coast Guard has  been requesting such funding, it will take many years for the agency to  address the backlogs. For example, the Coast Guard estimated that  based on its fiscal year 2017 appropriation it would take 395 years to  address its current $1.77 billion PC&I recapitalization and new  construction backlog, assuming that funding would continue at this level.  This time frame estimate does not include the Coast Guard’s deferred  DLM maintenance backlog, which the Coast Guard estimated to be nearly  $900 million in fiscal year 2018. Table 5 provides information on the  Coast Guard’s two shore infrastructure backlogs as of August 2018.

However, the number of projects in the Coast Guard’s backlogs and the  associated cost for addressing them is incomplete. In July 2018, Coast  Guard officials told us that the majority of the projects on the PC&I  backlog do not yet have associated cost estimates, and thus have not  been factored into the backlog cost estimates they have previously  reported to Congress. In November 2018, the Coast Guard told us there  were 205 projects on the PC&I backlog without cost estimates. Officials  explained that they have not prepared cost estimates for these projects  because they are in the preliminary stage of development and cost  estimates would not be accurate. Figure 2 shows the number of projects  with cost estimates and the estimated value of its PC&I backlog for fiscal  years 2012 through 2018. See appendix II for additional details.

In addition to the estimated $2.6 billion backlogs of PC&I recapitalization  and new construction and DLM deferred maintenance projects, the Coast  Guard carries out routine and recurring maintenance and repairs  (maintenance) through OLM funding. However, Coast Guard officials  stated that funding for maintenance projects cannot be disaggregated  from overall OLM funding. The Coast Guard’s 2017 shore infrastructure  annual report states that industry studies establish that the most effective  maintenance organizations spend about 17 percent of their staff labor  effort on corrective maintenance (i.e., repairs) and 83 percent on  preventative maintenance (e.g., activities such as changing buildings  systems’ filters and oil, resealing pavement surfaces, or repainting  buildings). However, Coast Guard’s analysis of OLM records indicated  that 66 percent of their facilities’ staff labor effort was used for corrective  maintenance. This imbalance indicates that fewer funds are available for  preventative maintenance than industry studies suggest, which could  increase costs and affect service lives if preventative maintenance cannot  be performed to the extent necessary. The annual report further stated  that the significant investment needed for corrective maintenance reflects  the state of the Coast Guard’s aging infrastructure and the strain it places  on maintenance personnel. Moreover, Coast Guard officials testified to  Congress in June 2017 that aging infrastructure adversely affects  operational efficiency. Further, in July 2018 Congressional testimony by  the Coast Guard Deputy Commandant for Mission Support stated that the  agency needs to rebuild shore infrastructure readiness with sound  investments in operations and maintenance, but budget realities result in  deferred maintenance, fewer spare parts, and infrastructure reliability and  security concerns.

The Coast Guard’s Process for Managing Its Shore Infrastructure Does Not Fully Meet 6 of 9 Leading Practices, Resulting in Management Challenges

The Coast Guard’s process to manage its shore infrastructure  recapitalization and deferred maintenance backlogs does not fully meet 6  of 9 leading practices we have previously identified for managing public  sector maintenance backlogs. Specifically, of the nine leading practices,  the Coast Guard met three, partially met three, and did not meet three, as  shown in Table 6. We, as well as others, have identified that deferring  maintenance and repair backlogs can lead to higher costs in the long  term and pose risks to safety and agencies’ missions.

Coast Guard Met 3 of 9 Leading Practices for Managing Public Maintenance Backlogs

The Coast Guard met 3 of 9 leading practices for managing public  maintenance backlogs by identifying the types of risks posed by not  making timely investments in its shore facilities; identifying the types of  assets, such as buildings, that are mission-critical; and by establishing  guidance that identifies the primary methods to be used for delivering  maintenance and repair activities, among other things. We have  previously found that these three practices are an important step toward  increased transparency and more effective management of maintenance  backlogs.

Identify the Types of Risks Posed By Lack of Timely Investment

According to leading practices, agencies should identify the types of risks  posed by not investing in deteriorating facilities, systems, and  components because this is important for providing more transparency in  the decision-making process, and for communicating with staff at all  organizational levels. The Coast Guard has a process to identify,  document and report risks in its annual shore infrastructure reports for  fiscal years 2015 through 2017. These reports identified the types of  risks the Coast Guard faces in not investing in its facilities, including  financial risk, capability risk, and operational readiness risk, but did not  specifically measure these risks. The Coast Guard met this leading  practice because the leading practice requires agencies to identify risk in  general terms—for example, in terms of increased lifecycle costs, or risk  to operations. The leading practice does not require the agency to  quantify or measure this risk by, for example, calculating the probability  that a building or structure will fail and impair the Coast Guard’s  operations.

Identify Types of Facilities or Specific Buildings that Are Mission-Critical and Mission- Supportive

Leading practices state that agencies should identify buildings as  mission-critical and mission-supportive to help establish where  maintenance and repair investments should be targeted, to ensure that  funds are being used effectively. Since at least 2012, the Coast Guard  has documented its process to classify all of its real property under a tier  system and established minimum investment targets by tier as part of its  central DLM planning boards. These tiers—mission-critical versus  mission-supportive—were incorporated into the guidance that Coast  Guard decision-makers are to follow in their deliberations about project  funding and to help them determine how to target funding more  effectively. For example, the Coast Guard’s PC&I planning board  guidance for fiscal years 2019 through 2023 prioritized expenditures on  shore infrastructure-supporting front line operations such as piers or  runways over shore infrastructure providing indirect support to front line  operations such as administrative buildings.

Identify the Primary Methods to Be Used for Delivering Maintenance and Repair Activities

Identification of the primary methods of delivery for maintenance and  repair activities is intended to help agencies determine the level of  resources that should be allocated to each type of maintenance activity  and to repair projects, according to leading practices. The Coast Guard’s  Civil Engineering Manual and other guidance documents detail how the  maintenance and repair program is structured and how budget accounts  are to be utilized. For example, the manual defined how projects should  be classified and funded—e.g., DLM or OLM—which has helped to  determine the Coast Guard units responsible for carrying out these  maintenance or repair activities.

Coast Guard Partially Met 3 of 9 Leading Practices for Managing Maintenance Backlogs

The Coast Guard partially met 3 of 9 leading practices for managing  public sector maintenance backlogs, including conducting condition  assessments, establishing performance goals and measures, and  aligning property portfolios with mission needs and disposing of  unnecessary assets.

Conduct Condition Assessments as a Basis for Establishing Appropriate Levels of Funding Required to Reduce, If Not Eliminate, Any Deferred Maintenance and Repair Backlog

Conducting periodic condition assessments are an effective approach for  facility management as identifying condition deficiencies can inform  budgeting decisions, according to leading practices. Under the Coast  Guard’s process, facility condition assessments are to be used to  evaluate the condition of infrastructure and identify deficiencies. These  assessments are to lead to the creation of the maintenance and  recapitalization projects that then compose the Coast Guard’s deferred  maintenance backlogs. However, the Coast Guard partially met this  leading practice because it has not issued specific guidance on how  these assessments are to be conducted, nor do the six CEUs follow a  standardized or consistent process for conducting their assessments,  according to Coast Guard field and headquarters officials. Further,  Coast Guard officials at 5 of the 6 CEUs told us that some or all of the  officials who conduct facility condition assessments serve on a rotational  basis. As a result, the level of familiarity inspectors have with the facilities  they inspect may vary, which could lead to differences in the  assessments they produce. Moreover, while inspectors at 3 of the 6  CEUs are to use checklists when conducting their inspections, all of these  checklists are different, and the other three CEUs do not currently use  checklists. We found that these differences have contributed to  inconsistencies in the information collected. For example, assessment  results we analyzed used different scales for prioritizing maintenance  projects, such as letter grades or red/amber/green scales. One  assessment we reviewed listed both DLM and OLM projects, and  provided the unit commander with detailed instructions accompanied by  pictures explaining how to address these issues, whereas other  assessments only identified DLM projects or “items of concern.” One  senior official acknowledged that the Coast Guard did not have  standardized assessments, and that developing them had not been the  highest priority among numerous guidance documents the Coast Guard is  trying to complete. Without standardized assessments, the Coast Guard’s  ability to systematically compare projects for prioritization is limited, and  this could directly impact its ability to establish appropriate levels of  funding for addressing the backlog, as identified in this leading practice.

Coast Guard officials told us they intend to issue guidance to standardize  facility condition assessments, but they could not provide a date for  completing the guidance that would be issued. Moreover, according to the  Coast Guard, it began to modernize its shore infrastructure civil  engineering management in 2006, and it has been working to develop its  current asset management model, including updating guidance, since  2013. By executing plans for a standardized facility condition assessment  process and developing a plan with milestones and timeframes for  standardizing the process, the Coast Guard will be better positioned with  more consistent data to prioritize and plan its shore infrastructure  projects.

Establish Performance Goals, Baselines for Performance Outcomes, and Performance Measures

According to leading practices, establishing performance goals, baselines  for performance outcomes, and performance measures allows agencies  to track the effectiveness of maintenance and repair investments, provide  feedback on progress, and indicate where investment objectives,  outcomes, or procedures require adjustment. According to Coast Guard  guidance, the Chief of the Office of Civil Engineering and the Shore  Infrastructure Logistics Center are to identify and promulgate  performance metrics annually. The Coast Guard partially met this leading  practice by documenting and tracking facility condition information using a  letter grade system and reporting this in its annual reports from 2015  through 2017. However, the Coast Guard has not set performance goals  for improving an asset’s grade, or established baselines to indicate where  investments require adjustment, because it continues to revise the  formula it uses to calculate the letter grades. Consequently, the letter  grades from fiscal years 2015 through 2017 are not comparable year to  year to measure performance.

Definitions of Performance Management  Common Terms  Performance goal - a target level of  performance expressed as a tangible,  measurable objective against which actual  achievement can be compared, including a  goal expressed as a quantitative standard,  value, or rate. A performance goal is  comprised of a measure, a time frame, and a  target.   Performance measure - a tabulation,  calculation, recording of activity or effort, or  assessment of results compared to intended  purpose, that can be expressed quantitatively  or in another way that indicates a level or  degree of performance.   Performance target - quantifiable or  otherwise measurable characteristic typically  expressed as a number that tells how well or  at what level an agency or one of its  components aspires to perform.   Baselines for Performance Outcomes- a  quantifiable point at which an effort began and  from which a change in outcomes can be  measured and documented.

In 2017, the Coast Guard reported a new performance measure for its  maintenance efforts, called Average Condition Index, which reflects the  average condition of the assets weighted by their replacement value. The  Coast Guard set targets for this measure, but it did not establish what  actions it would take to meet these targets. Limitations with the Coast  Guard’s performance measures for its shore infrastructure are not a new  issue, as they were also identified in 2015 by an external study  commissioned by the Coast Guard. Specifically, the study reported that  the Coast Guard’s condition index, which was more than 15 years old at  the time, was not defensible because it lacked trend data and analysis  capabilities. This study recommended that the Coast Guard develop key  performance measures, among other things, for managing its shore  infrastructure.

Coast Guard officials told us that it has collected data and drafted some  performance measures, but they have not yet implemented the  recommendations from the 2015 study or set a time frame for doing so  because they had not identified it as a priority. Establishing goals,  measures, and baselines would better position the Coast Guard to assess  their effectiveness and take appropriate actions to improve the condition  of its shore infrastructure.

Align Real Property Portfolios with Mission Needs and Dispose of Unneeded Assets

Leading practices state that agencies should efficiently employ available  resources, limit construction of new facilities, adapt existing buildings to  new uses, and transfer ownership of unneeded buildings to other public  or private organizations to align real property with mission needs. In  addition, facilities that are functionally obsolete, not needed to support an  agency’s mission, not historically significant, or not suitable for transfer or  adaptive reuse should be demolished whenever it is cost effective to do  so, under this leading practice. We have previously reported that the eventual need to address deferred maintenance and repair could  significantly affect an agency’s future budget resources. The Coast  Guard has made limited progress and partially met this leading practice  by disposing of some unneeded assets, but it has not consistently or  extensively aligned its property and mission needs. For example, in 2017,  the Coast Guard’s Civil Engineering Units and facility engineers reviewed  all projects on its $1.77 billion PC&I project backlog and removed 132  projects from it because, according to officials, they were either no longer  valid as a result of mission changes, a non-PC&I alternative/solution was  found to be more beneficial, or the need was met through another  project. This validation effort was a positive step toward aligning  property and mission needs, but it raises questions about whether and to  what extent the PC&I backlog is routinely and consistently managed to  ensure that projects reflect mission needs.

The Coast Guard made some progress aligning property and mission  needs through the sale of some assets. For example, in 2017, it sold 189  of its 2,961 housing assets through use of an initiative to divest itself of  some housing assets—an effort which garnered $26.8 million in total  sales proceeds over the life of the program. However, the Coast  Guard’s ability to dispose of unneeded assets has been limited in some  instances. For example, in 2013, the Coast Guard identified 18  multimission stations with duplicative coverage that could be permanently  closed, using a process based on criteria that reflected mission needs. In  October 2017, we reported that closing these stations could potentially  generate $290 million in cost savings over 20 years; however, as of  September 2018, the Coast Guard had taken no action to close these  stations or establish time frames for their closure, although Coast Guard  agreed with our recommendation that they do so. Moreover, our  analysis of Coast Guard planning documents found that 5 of the 18  multimission stations recommended for closure in 2013 have projects on  the Coast Guard’s current PC&I backlog. For example, Station Shark  River, in New Jersey, was recommended for recapitalization in fiscal year  2017, despite Coast Guard recommendations to close the station in 1988,  1996, 2007, and 2013. Notably, the Coast Guard has made multiple  attempts in previous years to close stations that it deemed suitable for  closure but was unable to close them due to congressional intervention,  and subsequent legislation prohibiting closures. Given the Coast  Guard’s competing acquisition, operational, and maintenance needs, and  PC&I backlog that will cost at least $1.77 billion to address, difficult trade- off decisions to align real property needs by disposing of unneeded  assets may help to mitigate some resource challenges.

Coast Guard Did Not Meet 3 of 9 Leading Practices for Managing Shore Infrastructure Backlogs

The Coast Guard did not meet 3 of 9 leading practices for managing  shore infrastructure backlogs, including establishing clear maintenance  and repair investment objectives, employing models for predicting the  outcomes of investments and analyzing trade-offs, and structuring  budgets and related information to address maintenance backlogs.

Establish Clear Maintenance and Repair Investment Objectives and Set Priorities among Outcomes to Be Achieved

Agencies with maintenance and repair responsibilities should determine  what outcomes are most important to achieve and set priorities among  them, according to leading practices. Coast Guard provided guidance for  central DLM planning boards, which calls for stakeholders to identify  which projects will be reviewed by the planning boards, for board  members to consider project trade-offs and to make recommendations on  which projects to fund, and for stakeholders to then review the results.  However, Coast Guard headquarters did not provide documented  guidance to the six CEUs responsible for administering regional DLM  planning boards—a process intended to establish clear objectives or  priorities among outcomes to be achieved for approximately 70 percent of  the Coast Guard’s DLM funds. Coast Guard headquarters officials told  us that they instead rely on each CEU to hold their respective regional  planning boards in accordance with locally established practices.  However, only 1 of the 6 CEUs has developed and implemented written  guidance for its DLM planning board process, and it is not clear how  these boards set objectives or priorities among outcomes to be  achieved.

The Coast Guard provided some documentation detailing how regional  DLM planning board inputs and subsequent decisions were linked to  decision-making criteria for one regional DLM planning board meeting  hosted by one of its nine Districts. Table 7, among other things, shows  the limited extent of documentation to substantiate Coast Guard  decisions. However, the Coast Guard did not meet this leading practice  because it could not demonstrate, with documentation, how decisions  were linked to criteria for its PC&I planning board meetings, central DLM  planning board meetings, or any other regional DLM planning board  meeting. Without the full range of information on which planning board  decisions were made, neither we, nor the Coast Guard, could  substantiate the extent to which the Coast Guard followed its processes  or evaluate whether its processes for managing shore infrastructure  projects were sound.

OMB guidance calls for agencies to use information to support decision- making, such as whether an asset is continuing to meet business needs  and contribute to goals, and whether there are smarter or more cost  effective ways to deliver the function. This guidance is comparable to  the leading practice discussed above, which calls for agencies to  establish clear maintenance and repair investment objectives and set  priorities among outcomes to be achieved. Additionally, according to  OMB, agencies are to have a plan for periodic, results-oriented  evaluations of program effectiveness, and agencies should discuss the  results of these evaluations when proposing reauthorizations.  Establishing guidance for planning boards to document project  prioritization decision-making, as well as the impact of trade-off decisions,  would allow agency decision makers, and Congress, to better understand  Coast Guard priorities and how shore infrastructure project priorities  might potentially affect other priorities. The Coast Guard was unable to  provide documentation showing how it prioritized projects for a number of  reasons, including that they didn’t have written guidance, documentation  to verify the use of standardized meeting inputs such as presentations,  and meeting minutes. Furthermore, officials could not explain why certain  documentation was not maintained to demonstrate how the Coast Guard  had made and prioritized funding decisions. Such documentation may  allow the Coast Guard to show, for example, why repairing a station they  previously wanted to close is a higher priority than fixing a station they  appear to need to perform maintenance on certain assets (see fig. 3).

To ensure that investment decisions are aligned with agency missions  and goals, agencies should employ models to predict the future condition  and performance of its facilities as a portfolio, according to leading  practices. Performance-prediction models predict the deterioration of  building components over time and are important because certain facility  components are particularly prone to deterioration or failure, thus  requiring more frequent maintenance or repairs. A 2015 review of the  Coast Guard’s asset management framework identified the benefit of  analyzing tradeoffs between reactive and preventative maintenance and  described how preventative maintenance efforts could translate into cost  savings.

Coast Guard officials provided one example of its efforts to model  outcomes, but it did not meet this leading practice because it has not  properly used the results of this model to optimize competing investments  for that asset line or any other asset line or provided documentary  evidence verifying that it properly applied it. In December 2017, a Coast  Guard Aviation Pavement Study employed a model that found that the  Coast Guard could more efficiently prioritize investment in aviation  pavement. It also identified strategies to achieve a long-term sustainable  pavement condition. A proposed fiscal year 2018 to 2020 Coast Guard  aviation pavement maintenance and recapitalization plan proposed using  the study results and recommended actions that it said could save the  Coast Guard $13.8 million by accelerating investment in aviation  pavement sooner rather than deferring such maintenance and  recapitalization. According to Coast Guard officials, the analytical  approach outlined in its 2017 study could be applied to all 13 of its shore  infrastructure asset lines. However, the Coast Guard has not properly  implemented a maintenance and recapitalization strategy based on the  results of its aviation pavement plan, nor has it applied the analytical  approach from this plan to other asset lines. Coast Guard officials told us  they have not fully acted on the aviation pavement plan nor developed  models for other asset lines. Specifically, a Coast Guard official described  actions the agency is taking as piecemeal; 1 of 5 PC&I projects identified  by their plan has been prioritized and funded. According to Coast Guard  officials, the other pavement projects continue to be a priority for the  asset line, but funding decisions have been deferred due to resource  constraints and other competing priorities. As a result of not properly  implementing its plan, it is unclear if the Coast Guard will achieve the cost  savings it projected. By not employing similar models across its asset  lines for predicting the outcome of investments, analyzing trade-offs, and  optimizing decisions among competing investments, the Coast Guard is  missing opportunities to potentially identify and achieve cost savings  across other asset lines.

Structure Budgets to Identify Funding Allotted (1) for Routine Maintenance and Repair and (2) to Address Any Backlog of Deferred Maintenance and Repair Deficiencies Because Insufficient Levels of Such Funding Can Cause Agencies’ Backlogs to Increase

According to leading practices, agencies should structure maintenance  and repair budgets to differentiate between funding allotted for routine  maintenance and repairs, and funding allotted to addressing maintenance  and repair backlogs, to help ensure that underfunding does not affect the  health and safety or reduce the productivity of employees, among other  things. We found that Coast Guard budget requests did not provide  Congress with accurate information about its funding needs. Specifically,  we found that the Coast Guard did not meet this leading practice as its  budget requests (1) have not clearly identified funding allotted for routine  shore infrastructure maintenance needs, and (2) have not generally  addressed deferred maintenance and repair deficiencies, resulting in  increases to its backlogs. In addition, the Coast Guard has not included  information in its Unfunded Priorities Lists and other related reports that  clearly articulated trade-offs, or aligned with its requirements-based  budget targets for shore infrastructure. Coast Guard officials were not  able tell us why they have not requested maintenance and repair funding  to adequately address their shore infrastructure backlog of deferred  maintenance and repair deficiencies.

First, we found that Coast Guard budget requests did not clearly identify  funding allotted for routine shore infrastructure maintenance needs to  address backlogs. Specifically, we found that budget requests related to  shore infrastructure for fiscal years 2012 through 2019 did not provide  Congress with required and complete information, as previously noted,  necessary to inform decision-makers of the risks posed by untimely  investments in maintenance and repair backlogs. While major  maintenance and repair funding can be tracked within the Coast Guard’s  budget, funding for routine recurring maintenance for shore infrastructure  is embedded in a budget account that is used for both maintenance and  operational expenses. As a result, the Coast Guard could not  disaggregate expenditures from this account or determine how much  funding goes towards routine maintenance.

Second, we found that Coast Guard budget requests did not generally  identify funding to address any backlogs of deferred maintenance or  recapitalization, except for one fiscal year—2012—when the Coast Guard  requested $93 million to recapitalize deteriorated/obsolete facilities and  address the highest priority Shore Facilities Requirements List backlog  items. The 2012 budget request also noted that the health and  maintenance of its shore facilities are foundational for the safe and  effective execution of Coast Guard missions. However, the Coast Guard  reported on some challenges to completing maintenance projects. For  example, Coast Guard officials we interviewed stated that the annual  Congressional Budget cycle has contributed to infrastructure  management challenges because they are prohibited from signing  contracts for maintenance projects during continuing resolutions. For  example, since the fiscal year 2018 budget was not passed until March  2018, they had to rush during the summer, their busiest time of year, to  establish contracts and work orders to ensure projects were funded  before the end of the fiscal year on September 30th.

Third, we found that the Coast Guard’s annual Unfunded Priorities Lists  and other reports, including their 5-Year CIP, did not clearly describe  trade-offs. In July 2018, we reported that by continuing to manage its  operational asset acquisitions through its annual budget process and 5- year CIP, the Coast Guard creates constant churn as program baselines  must continually realign with budget realities, instead of budgets being  formulated to support program baselines. Coast Guard officials said that  prioritization and trade-off decisions are made as part of the annual  budget cycle, and that the shore infrastructure projects on its Unfunded  Priorities List reflect the highest priorities for the department within the  given top level funding. However, the annual Unfunded Priorities List  does not clearly articulate prioritization decisions, including information  about trade-offs among competing project alternatives, as well as the  impacts on missions conducted from shore facilities in disrepair that had  not been prioritized in previous years. According to Coast Guard officials,  and as we previously reported, such information is not included in the 5- Year CIP or Unfunded Priorities List because it is not statutorily  required. These information shortcomings are consistent with previous  findings and recommendations that the DHS Office of Inspector General  has made.

Finally, we found that Coast Guard budget requests have not been  aligned with its requirements-based budget targets for shore  infrastructure. For example, we found that Coast Guard budget requests  have not identified appropriations sufficient to meet its DLM maintenance  and repair targets, which call for annual expenditures equal to two  percent of plant replacement value. According to the Coast Guard,  meeting its target for DLM would require allocating about $260 to $392  million annually for these repairs. Coast Guard officials told us that they have made difficult decisions to postpone necessary facility maintenance  and construction projects in order to address other competing priorities  related to mission execution, such as maintaining, operating, and  recapitalizing its aging surface and air fleets. Between fiscal years 2012  and 2017, the Coast Guard reported that it expended an average of $208  million per year on DLM, and officials stated that the Coast Guard never  met its target during this time period. Similarly, Coast Guard budget  requests have not been in alignment with its PC&I targets for  recapitalization. For example, Coast Guard recapitalization targets show  a far greater need for funding than the allotments from the appropriations  it requested between fiscal years 2012 and 2019. Specifically, Coast  Guard targets for recapitalization of shore assets indicate that $290 to  $392 million in PC&I funding is needed annually. However, the Coast  Guard budget requests for fiscal years 2012 through 2018 have ranged  between about $5 million and about $99 million annually, as shown in  Table 8.

Notwithstanding the mismatch between Coast Guard budget requests  and its requirements-based budget targets, allotments for Coast Guard  shore PC&I from its appropriations in fiscal years 2016 through 2018  exceeded the Coast Guard’s requests. For example, in fiscal year 2016,  the Coast Guard’s allotment of $130 million was almost three times the  nearly $47 million requested. In 2018, the almost $45 million allotted was  more than four times the $10 million requested. Explanatory materials on  the annual appropriations act for fiscal year 2018 indicated that the  appropriated funding above requested amounts was to be used for  modernization and recapitalization of facilities, and facility improvements,  among other things. Without accurate and transparent information about  the Coast Guard’s budgetary requirements, Congress will lack critical  information that could help to prioritize funding to address the Coast  Guard’s shore infrastructure backlogs.

The Coast Guard’s inventory of shore infrastructure assets is vast, aging,  and vulnerable to damage from extreme weather. Many of these assets  are also critical to the Coast Guard’s operational mission performance.  The Coast Guard has taken some steps to manage this infrastructure by  implementing 3 of 9 leading practices for managing public sector  maintenance backlogs—including identifying assets that are mission- critical, identifying risks posed by untimely investments, and identifying  the primary methods for delivering maintenance and repair activities.  However, significant work remains if the Coast Guard is going to make  headway on reducing its backlog of at least $2.6 billion. Fully  implementing the three leading practices that the Coast Guard now  partially meets could help ensure that it benefits from establishing  timeframes for and enhancing its guidance, establishing its performance  metrics, baselines, and targets, and shedding unneeded assets.  Additionally, fully implementing the leading practices that it does not  meet—including implementing new approaches for documenting its  project prioritization decisions, developing models that could help identify  cost savings, and providing Congress with transparent and requirements- based budget requests that clearly identify alternatives and trade-offs— could help the Coast Guard more efficiently manage existing resources  and better position the Coast Guard and Congress to address the shore  infrastructure challenges.

We are recommending the following six actions to the Coast Guard:

The Commandant of the Coast Guard should direct the program  managers to develop a plan with milestones and time frames for  standardizing Coast Guard’s facility condition assessments.  (Recommendation 1)

The Commandant of the Coast Guard should direct program  managers to establish shore infrastructure performance goals,  measures, and baselines to track the effectiveness of maintenance  and repair investments and provide feedback on progress made.  (Recommendation 2)

The Commandant of the Coast Guard should work with Congress to  develop and implement a process to routinely align Coast Guard’s  shore infrastructure portfolio with mission needs, including by  disposing of all unneeded assets. (Recommendation 3)

The Commandant of the Coast Guard should establish guidance for  planning boards to document inputs, deliberations, and project  prioritization decisions for infrastructure maintenance projects.  (Recommendation 4)

The Commandant of the Coast Guard should employ models for its  asset lines for predicting the outcome of investments, analyzing trade- offs, and optimizing decisions among competing investments.  (Recommendation 5)

The Commandant of the Coast Guard should include supporting  details about competing project alternatives and report trade-offs in  Congressional budget requests and related reports.  (Recommendation 6)

We provided a draft of this report to DHS for review and comment. In its  comments, reproduced in appendix III, DHS concurred with our  recommendations. DHS, through the Coast Guard, also provided  technical comments, which we incorporated as appropriate.

DHS concurred with our first recommendation that the Commandant of  the Coast Guard direct program managers to develop a plan with  milestones and time frames for standardizing the Coast Guard’s facility  condition assessments. DHS stated that the Coast Guard plans to  complete a standardized facility condition assessment by December  2019. However, to fully implement the recommendation, the Coast Guard  needs to ensure that it standardizes the process for conducting facility  assessments—action that goes beyond completing a singular  standardized facility assessment.

DHS concurred with our second recommendation that the Commandant  of the Coast Guard direct program managers to establish shore  infrastructure performance goals, measures, and baselines to track the  effectiveness of maintenance and repair investments and provide  feedback on progress made. DHS stated that the Coast Guard plans to  develop initial shore infrastructure measures with associated goals and  baselines during its annual strategic planning process and expects to  complete this process in March 2020.

DHS concurred with our third recommendation that the Commandant of  the Coast Guard work with Congress to develop and implement a process  to routinely align the Coast Guard’s shore infrastructure portfolio with  mission needs, including by disposing of all unneeded assets. DHS stated  that the Coast Guard plans to establish, by June 2020, a process to  assess current and projected operational and mission support needs to  identify and recommend disposal of unneeded land, buildings, and  structures. The Coast Guard reported that in the interim it will continue to  communicate with Congress about unneeded assets through its required  annual Conveyance of Coast Guard Real Property Report. The Coast  Guard reported that in the interim it will continue to communicate with  Congress about unneeded assets through its required annual  Conveyance of Coast Guard Real Property Report.

DHS concurred with our fourth recommendation that the Commandant of  the Coast Guard establish guidance for planning boards to document  inputs, deliberations, and project prioritization decisions for infrastructure  maintenance projects. DHS stated that the Coast Guard plans to review  existing guidance and issue updates as necessary and that promulgation  of this guidance for its next planning boards will be completed by  December 2019. To fully implement this recommendation, the Coast  Guard needs to ensure that its guidance requires that inputs,  deliberations, and project prioritization decisions for these boards are all  fully documented.

DHS concurred with our fifth recommendation that the Commandant of  the Coast Guard employ models for its asset lines for predicting the  outcome of investments, analyzing trade-offs, and optimizing decisions  among competing investments. DHS stated that the Coast Guard plans to  assess the use of modeling tools used by the Department of Defense as  well as other alternatives to enhance its real property asset management  capability. DHS stated that the Coast Guard expects to complete its initial  identification of alternatives in December 2019 and complete its  examination of alternatives in December 2020.

DHS concurred with our sixth recommendation that the Commandant of  the Coast Guard include supporting details about competing project  alternatives and report trade-offs in Congressional budget requests and  related reports. DHS stated that the Coast Guard plans to submit future  budget proposals based on OMB guidance and will include additional  information in its Congressionally-mandated future Unfunded Priorities  Lists. To fully implement this recommendation, the Coast Guard needs to  ensure it includes supporting details about competing project alternatives  and report on trade-offs, as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of the Department of Homeland Security, and  other interested parties. In addition, the report is 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) 512-3841 or AndersonN@gao.gov. GAO staff who made key  contributions to this report are listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

The objectives of this report are to evaluate (1) what is known about the  condition and costs of managing the Coast Guard’s shore infrastructure,  and (2) the extent to which the Coast Guard’s process for managing its  shore infrastructure meets leading practices for managing public  maintenance backlogs.

To identify what is known about the condition and costs of managing the  Coast Guard’s shore infrastructure, we reviewed three Coast Guard  annual reports on shore infrastructure, issued for 2015 through 2017.  We also reviewed Coast Guard documentation and data on its shore  infrastructure inventory to describe the condition and costs of managing  these assets. To measure the size of the Coast Guard’s total backlog, we  examined the Coast Guard’s shore Acquisition, Construction, &  Improvements (AC&I)  backlog of projects the Coast Guard has  identified as necessary to fulfill its missions (i.e., its Shore Facilities  Requirements List) from fiscal years 2012 through 2018, as well as its  depot-level maintenance backlog as of March 2018. We also reviewed  planning and budget documents to determine how the backlog has  changed over time. To identify the appropriation targets the Coast Guard  identified as needed to address these backlogs, we reviewed guidance  and budget data for the three appropriations related to shore  infrastructure, reviewed planning and budget documents such as Coast  Guard’s annual Unfunded Priorities List—which are lists of projects the  Coast Guard would undertake if funding were available—and the Coast  Guard’s annual Congressional Budget Justifications for fiscal years 2012  through 2019, to demonstrate how the backlog has changed over time  relative to budgeted funds. We also interviewed Coast Guard officials at  headquarters and in the field to obtain their perspectives on the  appropriation targets and budget formulation process.

To obtain additional information about the condition of the Coast Guard’s  infrastructure in different parts of the country, we interviewed officials from  each of the Coast Guard’s six geographically-organized Civil Engineering  Units (CEUs), which are responsible for implementing both District and  Headquarters directives. We also interviewed officials from the Coast  Guard’s two geographically-defined Area Commands—Pacific Area  (PACAREA) and Atlantic Area (LANTAREA), who vote on the  Procurement, Construction and Improvements (PC&I) and central DLM  planning boards. To review the Coast Guard’s longer-term planning  process for its shore infrastructure, we reviewed the Coast Guard’s 5-year  Capital Investment Plan and interviewed agency officials.

To assess the reliability of the Coast Guard’s data discussed in this  report, we interviewed knowledgeable agency officials, reviewed  documentation, and electronically tested the data for obvious errors and  anomalies. Specifically, we interviewed Coast Guard officials and  discussed the mechanisms they use to assess the quality of their data  and the extent to which Coast Guard employs quality control  mechanisms, such as automated edit checks. Additionally, in August  2018, the Coast Guard informed us that its data on its shore infrastructure  may not be complete if field inspectors did not identify problems at the  facilities they inspected. Coast Guard officials also told us in July 2018  that not all projects on the Coast Guard’s PC&I backlog have cost  estimates. As a result, the amount of funding needed to address the  Coast Guard’s backlog of shore infrastructure projects could be  understated because the Coast Guard has not identified all deficiencies  that exist at its facilities nor estimated the cost to fix all of the deficiencies  it knows about. Despite these limitations, we determined that the Coast  Guard’s data are sufficiently reliable for the purposes of reporting on the  Coast Guard’s overall portfolio of shore infrastructure assets and the  minimum amount of money the Coast Guard identified as needed to  complete deferred repair and PC&I projects.

To identify leading practices for managing backlogs of deferred  maintenance projects, we reviewed our prior work and the literature on  deferred maintenance and repair as it pertains to federal real property  portfolios. In our prior work, we identified nine leading practices based on  studies conducted by the National Research Council (NRC) of the  National Academy of Sciences between 1998 and 2012. These  studies were (1) Stewardship of Federal Facilities: A Proactive Strategy  for Managing the Nation’s Public Assets (1998); (2) Investments in  Federal Facilities: Asset Management Strategies for the 21st Century  (2004); (3) Predicting Outcomes from Investments in Maintenance and  Repair for Federal Facilities (2012). As we previously reported, the nine  leading practices we employed were the ones we identified as being the  most relevant and appropriate to federal agencies managing their  deferred maintenance and repair backlogs, however these practices do  not represent all actions that federal agencies can employ to improve  management of their real property to include their real property  maintenance and repair backlogs.

To evaluate the extent to which the Coast Guard’s process for managing  its shore infrastructure met leading practices for managing public  maintenance backlogs, we analyzed Coast Guard plans, policies,  procedures, and related laws for managing, maintaining and repairing  shore infrastructure. We identified and analyzed Coast Guard guidance  on its decision-making process for determining maintenance and repair  decisions, and assessed Coast Guard practices against our main criteria,  the leading practice discussed above. We also compared Coast Guard  practices with the Office of Management and Budget’s (OMB) program  evaluation and capital programming guidance.

We used the following scale to evaluate the Coast Guard’s management  of its shore infrastructure deferred maintenance and repair:

Met—The Coast Guard properly considered the leading practice and  demonstrated with documentary evidence that it had fully applied it.

Partially Met—The Coast Guard properly considered and  demonstrated with some documentary evidence that it had applied the  leading practice to some extent.

Not Met—The Coast Guard did not properly consider or apply the  leading practice and had no documentary evidence verifying that it  had applied it.

To further our understanding of the Coast Guard’s process for prioritizing  PC&I and deferred maintenance projects and the extent to which Coast  Guard actions aligned with the aforementioned leading practices, we  interviewed knowledgeable Coast Guard officials with a role in making or  implementing decisions related to shore infrastructure to obtain their  perspectives. Specifically, we interviewed officials from Coast Guard units  to (1) obtain information about local conditions and maintenance  practices, and/or to (2) obtain information on the experiences these  officials had pertaining to the PC&I planning board, central DLM planning  board, and/or regional DLM planning board processes. We interviewed  officials from all six of the Coast Guard’s regional Civil Engineering Units  (CEU) which are responsible for assessing the condition of Coast Guard’s  shore infrastructure to obtain their perspectives on this topic and to  determine the extent to which data from one CEU is comparable to data  from another. We also interviewed officials from the Atlantic and Pacific  Areas in order to obtain a high-level regional perspective on  requirements, conditions, and planning efforts. To evaluate how Coast  Guard leadership assesses the condition of its infrastructure and makes  trade-offs between competing projects, we also interviewed officials from  Coast Guard headquarters units which oversee Coast Guard’s shore  infrastructure. These interviews included officials from the Office of Civil  Engineering, the Shore Infrastructure Logistics Center, the Facilities  Operations & Support Division, and the Office of the Assistant  Commandant for Capability.

To identify examples of (1) what is known about the condition and costs  of managing the Coast Guard’s shore infrastructure, and (2) obtain  information about the Coast Guard’s process for managing its shore  infrastructure, we conducted a site visit to Coast Guard Base Alameda in  Alameda, CA. The selection of Base Alameda for our site visit was based  on the concentration there of regional Coast Guard leadership and Coast  Guard facilities. Our findings from our Base Alameda site visit are not  generalizable to other Coast Guard facilities. Additionally, because the  Coast Guard personnel we interviewed were not necessarily performing  the same function or role, or even stationed in Alameda, for all years  covered by our review (2012-2018), our findings from these interviews are  not necessarily generalizable across time. Taken as a whole, however,  our site visit provided us with insights into the condition of the Coast  Guard’s shore infrastructure and into the processes the Coast Guard  uses to maintain, repair, and replace these assets.

We conducted this performance audit from November 2017 to February  2019 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 that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.

Appendix II: Characteristics of Coast Guard’s Shore Infrastructure Procurement, Construction, and Improvements Backlog

This appendix provides summary statistics for the Coast Guard’s  Procurement, Construction, and Improvements (PC&I) backlog as of  June, for 2012 through 2018. Table 9 provides details of individual shore  infrastructure projects on the PC&I backlog, table 10 provides details of  aids to navigation and projects that were grouped together by the Coast  Guard for planning purposes, and table 11 sums values in tables 9 and  10.

Appendix III: Comments from the Department of Homeland Security

Appendix IV: GAO Contact and Staff Acknowledgements

Nathan J. Anderson, (202) 512-3841 or andersonn@gao.gov.

In addition to the contact above, Dawn Hoff (Assistant Director), Andrew  Curry (Analyst-in-Charge), Michael Armes, John Bauckman, Chuck  Bausell, Rick Cederholm, Billy Commons, John Crawford, Michele Fejfar,  Peter Haderlein, Eric Hauswirth, Landis Lindsey, Michael Pinkham, Maria  Mercado, Jan Montgomery, Forrest Rule, Christine San, and Adam Vogt  made key contributions to this report.

There is a vast, aging Coast Guard infrastructure along the shore that includes piers, docks, and other facilities. The Coast Guard estimated that its backlog of construction and improvement projects would take $1.7 billion and 395 years to address. That doesn't include the Coast Guard's maintenance backlog, which would bring the total cost to at least $2.6 billion.

While the Coast Guard has a culture of “making do” with the resources it has, these backlogs pose financial, safety, and mission performance risks.

We made 6 recommendations to help the Coast Guard better manage its resources to address shore infrastructure challenges.