Summary

The U.S. Coast Guard is currently undertaking a major effort to update its command structure, support systems, and business practices. This effort, referred to as the modernization program, is intended to better position the service to fulfill not only traditional missions--such as ensuring the safety and security of commercial shipping, safeguarding U.S. fisheries, interdicting the smuggling of illicit drugs, and conducting search and rescue operations--but also homeland security responsibilities that expanded after September 11, 2001 (9/11). The modernization program is specifically focused on modifying the Coast Guard's command and control structure--including the establishment of four new organizational entities--as well as updating mission support systems, such as maintenance, logistics, financial management, human resources, acquisitions, and information technology. The proposed changes will have a major impact on a variety of functions servicewide, including management of Deepwater--the long-term, multibillion-dollar program to upgrade the Coast Guard's aging fleet of water vessels and aircraft. The conceptual framework for the modernization program is reflected in 10 Commandant Intent Action Orders, which were issued by the Commandant of the Coast Guard in 2006. Subsequently, congressional direction accompanying the Coast Guard's fiscal year 2008 appropriations required the Coast Guard to submit a report describing and assessing each of the 10 action orders. In August 2008, the Coast Guard submitted its report on the modernization program to the Senate and House Appropriations Committees. In accordance with the congressional direction and as discussed with Congressional offices, this report assesses the Coast Guard's modernization program. Specifically this report answers the following primary research questions: (1) What is the genesis for the Coast Guard's modernization program? (2) To what extent has the Coast Guard conducted efforts to monitor the progress of its modernization program and evaluate the results?

The Coast Guard's modernization program--while inherently reflecting the judgment and prerogatives of the service's leadership--derives from multiple sources that collectively encompass a time frame from the mid-1980s to the present. These sources include internal and external studies or reports that identified deficiencies in the Coast Guard's command and control structure, the acquisition and logistics systems, and other aspects of the service's operations and capabilities, including the financial management system. Coast Guard officials also cited lessons learned from emergencies, such as the terrorist attacks of 9/11, and major natural disasters, such as Hurricane Katrina. According to officials, these events highlighted the need for greater standardization of policies and procedures, which the new command structure is intended to address. As an overarching cause for action, Coast Guard officials also stressed a need for positioning the service to be more responsive to 21st century demands and challenges by eliminating existing geographic command boundaries and establishing a more functionally based organizational structure. The Coast Guard has several efforts under way or planned for monitoring the progress of the modernization program and identifying needed improvements; however, development of applicable performance measures to evaluate results remains in the early stages. Consistent with project management principles and our previous work on organizational transformation, the Coast Guard has established implementation timelines to help guide the overall modernization program, which include key actions and milestones. The Coast Guard has reported that all interim key actions have been completed on schedule, including the implementation of several new organizational components. However, the Coast Guard has requested additional statutory authorities designed to fully establish the new command structure and associated senior leadership positions, currently envisioned to be in place in June 2009. For some of the organizational components established to date, the Coast Guard has also developed business plans that further identify key goals, activities, and specific milestones. In addition, the Coast Guard has initiated efforts to conduct external and internal assessments of various aspects of the modernization program. For example, the Coast Guard engaged the National Academy of Public Administration (NAPA) to conduct a third-party, independent review of the Coast Guard's overall modernization efforts. This review--which began in April 2008 and was completed in April 2009--was conducted to identify the strengths, weaknesses, opportunities, and risks involved in the current modernization approach and make recommendations for improvements and risk mitigation. Internally, the Coast Guard is conducting a series of process reviews intended to identify the key internal activities and outputs required for mission execution within the new structure. These process reviews--currently scheduled for completion during the summer of 2009--are also intended to generate inputs folonger-term effort to identify and develop applicable performance metrics for assessing the results of the modernization program. As the new organizational components and command elements are further implemented, the development of relevant performance metrics will become increasingly important to help ensure that the purported benefits from modernization are realized.