Partnerships for Fulfilling Arctic ResponsibilitiesPREPARED FOR THE ARTIC CIRCLE SHIPPING TASK FORCE AND THE UNIVERSITY OF ALASKA

Authors: Hon. Sean O’Keefe, Dr. David M. Van Slyke, Mr. Zachary S. Huitink – Syracuse University, and Dr. Trevor L. Brown – The Ohio State University

US Interests in the Arctic• Protecting and promoting US interests in the Arctic is a matter of national security

- President’s National Security Strategy, 2015

• US interests in the Arctic: - Sovereign

- Strategic

- Economic & Commercial - Environmental & Scientific

National Security Concerns• The President’s 2015 National Security Strategy emphasizes three key challenges relevant to the Arctic:

1. Access to Shared Spaces

2. Energy Security

3. Climate Change

* See the President’s National Security Strategy, 2015

Economic Imperatives• Economic imperatives in the Arctic:

- 30% of the world’s undiscovered natural gas- 13% of the world’s undiscovered oil- $1 trillion in minerals- 118 percent increase in maritime transit from 2008-2012- 1 million tons of cargo shipped in 2012

*Figures from the Coast Guard’s 2013 Arctic Strategy document

US Arctic Policy• US policy calls for a comprehensive national strategy toward the Arctic, along three lines of effort:

1. Advance US security interests

2. Pursue responsible Arctic region stewardship

3. Promote international cooperation

*See the US National Strategy for the Arctic Region, 2013

Need for Icebreaker Capabilities• Icebreaking capabilities are essential for fulfilling Arctic responsibilities • Icebreakers offer:

- Mobility- Interoperability- Resilience to harsh conditions

Icebreaker Capability Gap

Size of Icebreaker Fleet

*Source: US Coast Guard, Office of Waterways and Ocean Policy, 2014

Russia

Finland

Sweden

Canada

USA

Denmark

China

40

7

6

6

5

4

1

Size of Icebreaker Fleet(Currently Operational)

Current Acquisition Strategy• The current strategy involves a 10-year, $1B program to buy a new icebreaker with USCG appropriations

• Drawbacks to a “traditional procurement” strategy:- Considerable time for development and production - Unresponsive to changes in the operating environment- Cost prohibitive given demands on USCG acquisition budget- Potentially more expensive than an alternative approach, esp. if

USCG procured, crewed, and maintained

Alternative Acquisition Strategies

• Several examples demonstrate the feasibility and potential advantages of alternative strategies to acquire maritime assets

• Potential advantages of an alternative acquisition strategy:- Faster fielding time - More responsive to a changing operating environment- Potentially less expensive than a traditional procurement

Example Alternative StrategiesCanadian Coast Guard

The Canadian Coast Guard uses lease chartering to to acquire buoy tending and channel clearing services in the St. Lawrence Seaway.

National Science Foundation

NSF used a lease charter arrangement to acquire an ice-capable research vessel constructed to a detailed set of requirements and performance specifications.

Example Alternative StrategiesMilitary Sealift Command/OPDS

The Military Sealift Command (MSC) used a lease charter in to acquire a new offshore petroleum discharge system (OPDS) tanker built off a commercial platform.

SOCOM/Military Sealift Command

The US Special Operations Command (SOCOM) uses lease charters to acquire privately owned vessels that support highly demanding maritime security and defense missions.

Analysis of Alternatives Baseline Approach: Traditional Procurement Strategy Alternative #1: Retrofit Existing Asset Alternative #2: Lease Charter Alternative #3: Broader Intergovernmental Partnership Alternative #4: Bi-National Partnership

Analytical Framework

Acquisition Process

Asset Mix

Number of Acquirers

Evaluation Criteria- Technical feasibility - Agility- Mission scope/trade-offs - Life cycle cost- User efficacy - Budgetary considerations- Interoperability - Statutory permissibility- Value for money

Traditional Procurement

Potential Pros◦ - Mission scope and trade-offs◦ - User efficacy◦ - Interoperability◦ - Statutory permissibility◦ - Value for money

Potential Cons◦ - Technical feasibility◦ - Agility◦ - Life cycle cost◦ - Budgetary considerations

USCGC Polar Star

Number of Acquirers:One — USCG

Type of Process: Traditional – Buy New Asset

Asset Mix: Single Asset with Multi-Mission Functionality

Retrofit Existing Asset

Potential Pros◦ - Technical feasibility◦ - Life cycle cost◦ - Budgetary considerations◦ - Statutory permissibility

Potential Cons◦ - Mission scope and trade-offs ◦ - User efficacy◦ - Interoperability◦ - Agility◦ - Value for money

Offshore Patrol Cutter (OPC)

Fast Response Cutter (OPC)

Number of Acquirers:One — USCG

Type of Process: Traditional – Buy Retrofit Asset

Asset Mix: Single Asset with Multi-Mission Functionality (as permitted by a “parent craft” design) OR Multi-Asset Mix

Lease Charter Potential Pros

◦ - Technical feasibility◦ - User efficacy◦ - Agility◦ - Life cycle cost◦ - Value for money

Potential Cons◦ - Mission scope and trade-offs◦ - Interoperability◦ - Budgetary considerations

(OMB scoring rules?)◦ - Statutory permissibility

(restrictions on leasing?)

Nathaniel B. Palmer

Number of Acquirers:One – USCG

Type of Process: Non-Traditional –Lease Charter

Asset Mix:Single Asset with Multi-Mission Functionality OR Multi-Asset Mix

Bi-National Partnership Potential Pros

◦ - Technical feasibility◦ - User efficacy◦ - Budgetary considerations◦ - Statutory permissibility◦ - Value for money

Potential Cons◦ - Mission scope and trade-offs◦ - Interoperability ◦ - Agility◦ - Life cycle costCCGS John G.

Diefenbaker

Number of Acquirers:One –USCG

Type of Process:Traditional – Buy Asset based on Foreign Design

Asset Mix:Single Asset with Multi-Mission Functionality

Broader Intra-governmental Partnership

Potential Pros◦ - Mission scope and trade-

offs◦ - Interoperability◦ - Agility ◦ - Life cycle cost◦ - Value for money

Potential Cons◦ - Technical feasibility◦ - User efficacy◦ - Budgetary considerations◦ - Statutory permissibility

Number of Acquirers:One – USCGORMultiple –USCG, NSF, NOAA, USN, etc.

Type of Process:Non-traditional – Intra-Governmental PPP

Asset Mix: Single Asset with Multi-mission Functionality (as permitted by a “parent craft” design) OR Multi-Asset Mix

Analytical SummaryProcurement Retrofit Lease Charter Broader PPP Bi-National Partnership

Technical Feasibility X X

Mission Scope/Trade-Offs X X X

User Efficacy X X Interoperability X X X

Agility X X XLife Cycle Cost X X

Budgetary Considerations X X X

Statutory Permissibility X X

Value for Money X

Conclusion• Acquiring icebreakers to support US Arctic missions is increasingly a matter of national security

• Traditional procurement takes too long—alternative strategies are faster and may be less expensive (esp. given gov’t costs to crew, homeport, maintain, etc.)

• Not all Arctic missions—including ice operations—are inherently governmental

• Depending on mission priorities, there are several alternative ways to fulfill responsibilities in the Arctic