Presidential Helicopter: Program is Meeting Cost Goals but Some Technical and Schedule Risks Remain

The mission of the presidential helicopter fleet is to provide safe, reliable, and timely transportation in support of the President. The Navy plans to acquire a fleet of 23 VH-92A helicopters to replace the current Marine Corps fleet which has been in use for more than 40 years. Delivery of production VH-92A helicopters is scheduled to begin in April 2021 and be completed in January 2023.

The National Defense Authorization Act of 2014 included a provision for GAO to report annually on the acquisition of the VH-92A helicopter. This report, GAO's sixth related to the provision, examines (1) the extent to which the program is meeting cost goals and (2) performance and schedule challenges that the program has experienced.

To conduct this work, GAO compared the Navy's April 2019 cost estimates for acquiring and maintaining the new helicopters and October 2019 program schedule information to its April 2014 acquisition baseline. GAO reviewed development test results and status reports from the program. GAO also interviewed officials from the program office, Navy test organizations, and the contractor.

GAO is not making any recommendations in this report.

The Navy estimates the cost to develop, procure, and maintain the VH-92A ® over its 40-year operational life to be just over $20.5 billion, or about 10 percent less than the Navy's 2014 baseline estimate (see table).

Navy and contractor officials worked to remain within the program's April 2014 cost baseline estimate, in part, by keeping program requirements stable, limiting design changes, and taking advantage of cost saving initiatives. The Navy also plans to use Navy personnel and facilities to perform depot-level maintenance for the VH-92A fleet, rather than sending the helicopters back to the contractor as is currently done.

The program has made progress addressing technical risks and performance challenges GAO discussed in prior reports; however, an April 2019 operational assessment confirmed several other risks that could affect the helicopter's ability to meet its reliability and availability requirements. For example, Navy officials stated that the assessment confirmed known limitations with the mission communications system. Upgraded software intended to address those limitations is to be evaluated during the initial operational test and evaluation scheduled to be conducted between June and September 2020. The results of that testing could impact the Navy's planned January 2021 decision to begin using the helicopters as part of the presidential helicopter fleet.

The Navy's VH-92A® program is to replace the aging presidential  helicopter fleet, which has been in service for several decades. The VH- 92A program is expected to provide new helicopters that ensure the safe,  reliable, and timely transportation of the President and other parties as  directed by the White House Military Office. The Navy plans to acquire a  fleet of 23 VH-92A helicopters to replace the Marine Corps’ existing fleet  of VH-3D and VH-60N helicopters. The Navy's acquisition strategy is to  integrate mature technologies and an executive interior into an existing in- production commercial helicopter while minimizing modifications to avoid  the technical challenges and cost overruns that led to the termination of  its predecessor program in 2009. Delivery of production VH-92A  helicopters is scheduled to begin in April 2021 with final delivery in  January 2023.

The National Defense Authorization Act of 2014 includes a provision for  GAO to report annually on the acquisition of the VH-92A presidential  helicopter until the Navy awards a contract for full-rate production. We  have previously issued five reports in response to this provision. This  report examines (1) the extent to which the program is meeting cost goals  and (2) performance and schedule challenges that the program has  experienced in developmental testing and plans for addressing them.

To evaluate the extent to which the program is meeting cost goals, we  identified and assessed changes in the program’s development,  production, and operation and support cost estimates by comparing the  program’s April 2014 approved program baseline estimates with  estimates developed in April 2019 that supported the program’s  production decision. These data were contained in defense acquisition  executive summary reports, selected acquisition reports, and briefings  provided by the program office and Sikorsky Aircraft Corporation, a  Lockheed Martin company (the prime contractor for the program). We  also examined and analyzed key acquisition documents, including  contractor monthly status reports and Defense Contract Management  Agency reports. We interviewed officials from the Office of Cost  Assessment and Program Evaluation (CAPE), the Navy’s Presidential  Helicopter Program Office to discuss the methodology used to develop  the independent cost estimate, and component cost position,  respectively. We also compared CAPE’s independent cost estimate to the  Navy’s component cost estimate to identify differences in the estimates.

To assess the challenges GAO previously identified and those recently  experienced in developmental testing and steps taken to address those  challenges, we examined May 2019 operational assessment reports on  the VH-92A Program prepared by the Navy’s Commander, Operational  Test and Evaluation Force and the Director, Operational Testing and  Evaluation; and contractor and Defense Contract Management Agency  status reports. We also interviewed representatives from the Navy’s  Presidential Helicopter Program office in Patuxent River, Maryland;  Sikorsky’s program office in Stratford, Connecticut; the Defense Contract  Management Agency; the Navy’s Commander, Operational Test and  Evaluation Force; and the offices of the Director, Operational Testing and  Evaluation, and Director, Developmental Test and Evaluation. To assess  whether the program is achieving schedule goals, we compared program  milestones established at the start of the program in April 2014 to the  program’s October 2019 Integrated Master Schedule.

We conducted this performance audit from May 2019 to April 2020 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit and 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.

The Marine Corps’ Marine Helicopter Squadron One (HMX-1) currently  uses a fleet of 23 helicopters to support the President in the national  capital region, the continental United States and overseas. In April 2002,  the Navy began developing a replacement helicopter later identified as  the VH-71. Schedule delays, performance issues, and a doubling of  estimated acquisition costs from $6.5 billion to $13 billion prompted the  Navy to terminate the VH-71 program in 2009. Our prior work found that  the VH-71 program’s failure to follow acquisition best practices was a  critical factor in the program’s poor performance that led to its ultimate  termination. In the case of the VH-71, the Navy had a faulty business  case, did not perform appropriate systems engineering analysis to gain  knowledge at the right times, and failed to make necessary trade-offs  between resources and requirements even after years of development.  Because of these failures, the program was unable to achieve a stable  design and experienced significant cost growth and schedule delays.

Although the prior replacement program was terminated, the need for a  replacement helicopter remained. As a result, the Navy initiated a follow- on replacement program in 2010. In April 2012, the Secretary of Defense  approved the Navy’s plan based on the modification of an in-production  helicopter to meet Navy requirements. The VH-92A is expected to provide  improved performance, survivability, and communications capabilities,  while offering increased passenger capacity when compared to legacy  helicopters.

In May 2014, the Navy competitively awarded a contract to Sikorsky to  develop the VH-92A, which included options for production. The $2.7  billion contract includes a fixed-price incentive (firm target) Engineering  and Manufacturing Development (EMD) phase and a firm-fixed price  production phase with options for three lots for 17 helicopters, spares and  support equipment. Under the EMD phase, Sikorsky has delivered two  development test helicopters which were used in an operational  assessment that was completed in April 2019. Additionally, Sikorsky has  delivered three of four System Demonstration Test Article (SDTA)  production representative helicopters that are being used in  developmental testing and that will also be used to evaluate the VH-92A’s  operational effectiveness and suitability during the program’s Initial  Operational Test and Evaluation (IOT&E). The fourth SDTA helicopter is  to be delivered in May 2020 and will also be used to conduct IOT&E.

In June 2019, the Assistant Secretary of the Navy, Research,  Development and Acquisition (RD&A) approved the program to begin  low-rate initial production of the helicopters and authorized the program to  exercise the contract options for the first two low-rate production lots.  Shortly thereafter, the Navy exercised the Lot l option for 6 helicopters,  initial spares, and support equipment for $542 million. Those helicopters,  initial spares and support equipment are all to be delivered in calendar  year 2021. In February 2020, the Navy exercised the Lot ll option for $471  million for 6 additional helicopters and associated support equipment. All  of these helicopters and support equipment will be delivered in calendar  year 2022.

The Navy had planned for two years of low-rate initial production of 6  helicopters each year followed by one year of full-rate production for the  remaining 5 helicopters. The Navy’s acquisition strategy in support of the  production decision included a change in that plan with the re-designation  of full-rate production as a third lot of low-rate production. A key reason  for the change is that the planned full-rate production run of 5 helicopters  was too small to achieve the potential cost benefits of full-rate production,  which typically involves purchasing a sufficient number of helicopters to  decrease unit cost. This revised strategy would also enable the Navy to  award the third production lot seven months earlier than the originally  planned May 2021. Before obligating the funding available for the second  lot, the program office had to brief the Assistant Secretary of the Navy  (RD&A) on various elements of the VH-92A’s performance. The program  office is required to obtain approval from the Assistant Secretary of the  Navy (RD&A) for the procurement of the last lot (Lot lll) with a decision  brief that includes, among other things, the status of IOT&E.

Building a VH-92A helicopter involves work at three facilities. To begin the  production process, Sikorsky takes an S-92A helicopter from its  commercial production line in Coatesville, Pennsylvania and flies it to a  dedicated VH-92A modification facility in Stratford, Connecticut. Once  there, Sikorsky removes some components, such as circuit breaker  panels, engines, and main and tail rotor blades and replaces them with  VH-92A components. Additionally, Sikorsky modifies the helicopter to  accommodate VH-92A specific subsystems, including racks and wiring for  a Navy-developed mission communications system (MCS). Sikorsky then  flies the helicopter to a dedicated facility in Owego, New York where it  integrates the MCS, installs the executive cabin interior, paints the  helicopter, and conducts final testing before delivering the helicopter to  the government. See figure 1 for a depiction of modifications of the  commercial S-92A helicopter to the VH-92A presidential helicopter.

We have reported annually on the Navy’s effort to replace the current  fleet of presidential helicopters since 2011. Our reports highlighted, in  part, the extent to which the Navy used the lessons learned from the  failed VH-71 program—the need to balance requirements, costs, and  schedule and the importance of establishing a knowledge-based program  that is aligned with acquisition best practices—in its new effort. For  example, our 2011 report found that while the replacement program was  early in its development cycle, the Navy’s initial efforts appeared to reflect  the intent to pursue a best practices aligned knowledge-based  acquisition.

Following the program’s entry into the EMD phase of acquisition in April  2014, we found that the Navy’s reliance on mature technologies, selection  of an existing helicopter for use in the program, and award of a fixed-price  incentive type contract reduced risk. As to be expected with a major  system development effort, however, we found the program still faced a  number of technical challenges. In four reports issued from 2016 to 2019,  we found that the Navy continued making progress in developing the VH- 92A helicopter while managing design, integration and technical  challenges. Some key technical risk and challenges that we previously  identified are summarized in table 1. We discuss the current status of the  Navy’s efforts to address these challenges later in the report.

Estimated Program Costs Have Decreased by 10 Percent

In April 2019, the Navy estimated that the VH-92A would cost about $4.9  billion to develop and produce and about $15.6 billion to operate and  support the helicopters through fiscal year 2062. Overall, the Navy’s  $20.5 billion estimate reflects a 10-percent reduction from the program’s  2014 baseline estimate (see table 2).

The Navy and contractor officials worked together to remain within the  program’s April 2014 cost baseline, in part, by keeping requirements  stable, limiting the design changes, and taking advantage of cost saving  initiatives. For example, the Navy has not added any key performance  requirements to the fixed-price incentive contract since it was awarded in  2014. The Navy has, however, implemented a small number of design  changes to add an additional cockpit display and increase the height of  the upper portion of the forward aircraft door. Previously, we found that  cost saving initiatives included leveraging the Federal Aviation  Administration’s airworthiness certification process, optimizing work  processes, and reducing the movement of helicopters between contractor  sites.

In addition, the Navy attributes the reduction in cost to support the VH- 92A fleet to using a planned maintenance interval concept as the basis  for its April 2019 cost estimate. Program officials explained that the April  2014 baseline estimate was based on the approach used to maintain the  current fleet of VH-3D and VH-60N presidential helicopters. For these  helicopters, the contractor carries out depot-level maintenance by  disassembling, inspecting, and reassembling them at its maintenance  depot. However, for the VH-92A, the Navy intends to perform depot-level  maintenance itself through scheduled inspections at its own presidential  helicopter support facility, which was designed to support this approach.  As a result, the Navy expects to be able to support the VH-92A fleet in a  more cost-effective manner while ensuring the availability of the  helicopter to perform its mission.

Upcoming Initial Operational Test and Evaluation Will Demonstrate Extent to Which Technical Issues Have Been Addressed as Program Approaches End of Development

The program has made progress addressing technical risks and  performance challenges we discussed in prior reports and deficiencies  confirmed during the April 2019 operational assessment. According to  program officials, solutions for these performance shortfalls, except for  the landing zone suitability issue, have been developed and successfully  tested during integrated testing and will be evaluated during the 3-month  IOT&E test scheduled to begin in June 2020. The program is pursuing  options to achieve landing zone suitability that include possible changes  in operational procedures, helicopter design, and lawn surface  treatments. If design modifications are required, they will not be  implemented until after IOT&E. As a result, the Navy may not be able to  fully demonstrate that the VH-92A helicopter meets all its key  requirements until after the test program is complete. Further, IOT&E  results may also identify additional issues that may require additional  design or software changes. Depending on the severity of the issues, the  Navy may need additional time to test and incorporate changes into the  helicopter, including those helicopters currently in production.

VH-92A Program Is Addressing Performance Shortfalls Previously Identified in Testing

The program office has mitigated or reduced risk on some technical  issues we discussed in prior reports. For example, according to program  documents, the program has mitigated the risk in the following areas:  helicopter start procedures, electromagnetic environment effects/  electromagnetic pulse and cybersecurity. The Navy assessed these  capabilities during earlier developmental test and during the operational  assessment, which concluded in April 2019; subsequently, the Navy  approved the program to enter into production. However, the operational  assessment confirmed other known performance shortfalls—specifically  those associated with the MCS—that, if not corrected, could prevent the  program from meeting certain operational requirements.

The MCS replaces the communications suite currently used by the in- service fleet and provides VH-92A passengers, pilots, and crew with  simultaneous short- and long-range secure and non-secure voice and  data communications capabilities. As such, its performance is critical for  the VH-92A to meet its mission. To conduct its operational assessment,  the Navy used two development test helicopters and a developmental  version of MCS software with known performance and capability  limitations. The operational assessment confirmed these MCS-related  performance limitations, including dropped communication connections.  Navy officials noted that these and other MCS-related performance  shortfalls could, if not addressed, reduce the helicopter’s availability to  perform its transport mission and lower overall reliability, among other  operational requirements.

Overall, the operational assessment confirmed 24 MCS-related  performance limitations. According to program officials, they have  incorporated or identified fixes to 22 of the 24 issues, which they are now  testing on SDTA helicopters. In turn, these fixes are expected to be  incorporated into MCS software that will be tested during IOT&E.  According to program officials, the remaining two MCS issues are related  to bandwidth and an unreliable off-aircraft network configuration affecting  on-aircraft system performance. According to those officials, the VH-92A  is already equipped with a wide-band line-of-sight system that provides  high bandwidth, though with coverage limitations. The program is  conducting market research on how to provide the helicopter with  increased bandwidth with increased coverage.

The remaining two issues were assessed earlier as having a serious (but  not critical) impact to mission accomplishment. In addition to the MCS  deficiencies, the helicopter experienced problems with other components  during the April 2019 operational assessment. For example, the mission  and maintenance data computer repeatedly sent out false warning  alarms/notifications, which affected the reliability and required the aircrew  to spend extra time troubleshooting or switch to a backup helicopter. A  software update to help address this issue is planned for the computer  prior to IOT&E.

The program is also still working to demonstrate the ability of the  helicopter to meet a key system capability requirement to land the  helicopter without damaging landing zones (including the White House  South Lawn). For landing zone suitability, the program’s objective has  been to assess the downwash and exhaust effects on the landing zone.  In a September 2018 training event, the Navy found that VH-92A’s  exhaust damaged a landing zone. Program officials stated that the  training event did not represent a typical operational scenario since the  lawn was exposed to the helicopter’s exhaust for a longer period than it  would be under normal operating conditions. The program is studying  solutions to minimize risk of landing zone damage including possible  changes in operational procedures, helicopter design, and lawn surface  treatments. For example, the contractor developed a prototype design  change to the helicopter’s auxiliary power unit to deflect exhaust. Flight  testing of the prototype design change was conducted in March 2020 with  analysis of the results expected in April 2020. Navy officials stated the  contractor is also conducting testing to determine if changes in helicopter  and/or engine operating procedures can mitigate the risk of landing zone  damage. According to both program officials and contractor  representatives, a decision on potential solutions will be made prior to  IOT&E. If design modifications are required, they will not be implemented  until after IOT&E.

Program Schedule Has Slipped Further but Remains within the Original Approved Schedule Thresholds

Initial operational testing of the VH-92A, which will be used to evaluate  operational effectiveness and suitability of the helicopter, training system,  support equipment, upgraded MCS software and other changes  implemented to address previously identified issues, is now scheduled to  be conducted between June and September 2020. As such, IOT&E will  be conducted about 3 months later than we reported in 2019, but is  expected to be completed by the threshold (latest acceptable) date in the  Navy’s April 2014 baseline. Program officials attributed the 3-month delay  to the need to develop MCS hardware and software changes that are  currently being tested. Should IOT&E demonstrate that efforts to address  the MCS performance issues or other previously identified issues are  insufficient—or if the testing identifies new issues that result in the  program being unable to meet its operational requirements—then the  program may need to identify, test and incorporate changes into the VH- 92A’s design and into the helicopters already in production, further  delaying the program and increasing associated costs. As previously  noted, the first delivery of the helicopters ordered under the first  production option is scheduled to begin in April 2021.

As a result of the revised IOT&E test schedule, the program office has  also delayed the initial operational capability (IOC) milestone, which  clears the helicopter to enter service, by 3 months to January 2021. This  new date represents a total delay of 6 months from the original date but  still remains within the IOC threshold date established in April 2014.  Figure 2 compares the program’s 2019 schedule with the 2014 baseline  schedule and the 2018 schedule we reported on last year.

Program officials acknowledged that if there is a delay in the program that  results in the program breaching a schedule threshold established in its  acquisition baseline, they would need to submit a program deviation  report to the Assistant Secretary of the Navy (RD&A). In turn, the program  may need to keep certain staff in place longer than originally planned,  potentially increasing program costs. However, program officials told us  that the program can cover any additional costs with existing funding.  Further, Navy officials stated that should IOC be delayed, the Navy will  continue to use its existing fleet of presidential helicopters as the VH-92A  transitions into the HMX-1 fleet. Navy officials indicated that the transition  process will be gradual, and that the existing fleet is sufficiently funded  until HMX-1 completes the transition.

We are not making any recommendations in this report. We provided  DOD with a draft of this report. DOD provided technical comments, which  we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense and the Secretary of the Navy. 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) 512-4841 or DiNapoliT@gao.gov. Contacts points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix l.

Appendix l: GAO Contact and Staff Acknowledgments

In addition to the contact above, Bruce H. Thomas, Assistant Director;  Marvin E. Bonner; Bonita J.P. Oden; Alexander Webb; Peter Anderson;  Robin Wilson; and Marie Ahearn made key contributions to this report.

Presidential Helicopter: Program Continues to Make Development  Progress While Addressing Challenges. GAO-19-329. Washington, D.C.:  April 11, 2019.*  Presidential Helicopter: VH-92A Program Is Stable and Making Progress  While Facing Challenges. GAO-18-359. Washington, D.C.: April 30,  2018.*  Defense Acquisitions: Assessments of Selected Weapon Programs.  GAO-17-333SP. Washington, D.C.: March 30, 2017.*  Presidential Helicopter: Program Progressing Largely as Planned.  GAO-16-395. Washington, D.C.: April 14, 2016.*  Presidential Helicopter Acquisition: Program Established Knowledge- Based Business Case and Entered System Development with Plans for  Managing Challenges. GAO-15-392R. Washington, D.C.: April 14, 2015.*  Presidential Helicopter Acquisition: Update on Program’s Progress toward  Development Start. GAO-14-358R. Washington, D.C.: April 10, 2014.

Department of Defense’s Waiver of Competitive Prototyping Requirement  for the VXX Presidential Helicopter Replacement Program.  GAO-13-826R. Washington, D.C.: September 6, 2013.

Presidential Helicopter Acquisition: Program Makes Progress in  Balancing Requirements, Costs, and Schedule. GAO-13-257.  Washington, D.C.: April 9, 2013.

Presidential Helicopter Acquisition: Effort Delayed as DOD Adopts New  Approach to Balance Requirements, Costs, and Schedule.  GAO-12-381R. Washington, D.C.: February 27, 2012.

Defense Acquisitions: Application of Lessons Learned and Best Practices  in the Presidential Helicopter Program. GAO-11-380R. Washington, D.C.:  March 25, 2011. *GAO issued these reports on the VH-92A program in response to a provision in National  Authorization Defense Act of 2014.

The President relies on a fleet of military helicopters for transportation. The Navy plans to replace the more than 40-year-old fleet with 23 new VH-92A helicopters.

The VH-92A program remains generally on target with cost and schedule. The Navy now expects the total cost of buying and operating the aircraft for the next 40 years to be $20.5 billion. That’s about 10 percent lower than original estimates in 2014.

The Navy targeted January 2021 for deciding when to begin using the new helicopters, but some communications software issues still need to be resolved. Delays could defer the decision and postpone the helicopters’ addition to the fleet.


2017 Hurricane Season: Federal Support for Electricity Grid Restoration in the U.S. Virgin Islands and Puerto Rico

In 2017, Hurricanes Irma and Maria damaged much of the electricity grids' transmission and distribution systems in USVI and Puerto Rico. The hurricanes left most of USVI's 106,405 people and all of Puerto Rico's 3.3 million without power and resulted in the longest blackout in U.S. history.

Under the National Response Framework, electric utilities are responsible for repairing infrastructure and restoring service. They often use mutual assistance—voluntary partnerships with other electric utilities—to bring in additional resources to help restore electricity. Federal agencies provide financial assistance; help coordinate the federal response; and in severe emergencies, provide logistical support, such as assisting in damage assessments and location and transportation of repair crews and equipment.

GAO was asked to review the federal response to the 2017 hurricanes. This report provides information on federal support for restoring the electricity grids in Puerto Rico and USVI and factors affecting this support. GAO has ongoing work examining federal support to improve grid resilience in Puerto Rico.

GAO reviewed agency documents and funding data through July 20, 2018, the most recent data available; interviewed officials from FEMA, DOE, and USACE; and conducted site visits to Puerto Rico and USVI.

Federal agencies supported efforts to restore electricity in the U.S. Virgin Islands (USVI) and Puerto Rico through the types of support they traditionally provide following disasters and, in Puerto Rico, in some unprecedented ways.

USVI. Federal agencies provided traditional federal support to the electric utility's restoration efforts. For example, the Federal Emergency Management Agency (FEMA) provided financial assistance through its Public Assistance Program, and the Department of Energy (DOE) provided subject matter expertise to assist the local utility. In addition, the U.S. Army Corps of Engineers (USACE) provided generators for hospitals and other critical facilities. FEMA obligated about $795 million for these efforts as of July 20, 2018. According to the local utility, it took about 5 months for power to be restored to all customers with structures deemed safe for power restoration.

Puerto Rico. In addition to the traditional types of support, FEMA and USACE undertook unprecedented roles of helping to coordinate and directly assist with grid restoration in Puerto Rico. FEMA requested that USACE lead federal grid repair efforts because of the scale of the damage and because the Puerto Rico Electric Power Authority (PREPA) did not have the capacity to respond, according to FEMA officials. FEMA obligated about $3.2 billion for electricity restoration efforts as of July 20, 2018, and PREPA estimated that it took roughly 11 months for power to be restored to all customers with structures deemed safe for power restoration.

Various factors affected federal support for electricity grid restoration, according to officials GAO interviewed and documents reviewed. For example, getting the crews and materials needed to islands was more difficult and time-consuming than on the mainland. In Puerto Rico, PREPA was insolvent, which presented challenges for restoring the grid. For example, PREPA canceled its vegetation management program; this contributed to the destruction of the grid when the hurricane arrived, according to FEMA officials. In addition, FEMA did not anticipate or plan for the extensive federal role in grid restoration in Puerto Rico, and USACE did not have a contract in place to immediately initiate grid repair efforts, according to USACE officials. FEMA and USACE identified potential actions to address these challenges, such as reviewing advance contracts.

In 2017, Hurricanes Irma and Maria damaged much of the electricity  grids’ transmission and distribution systems in Puerto Rico and the U.S.  Virgin Islands, leaving millions without power and resulting in the longest  blackout in U.S. history. These hurricanes brought some of the heaviest  rain and strongest winds ever recorded to Puerto Rico and the U.S. Virgin  Islands, causing unprecedented damage and the costliest hurricane  season on record. Following the hurricanes, it took roughly 5 months for  power to be restored to all of the customers in the U.S. Virgin Islands,  which has an estimated population of 106,405 people, and roughly 11  months for power to be restored to all of the customers in Puerto Rico,  which has an estimated population of 3.3 million people. According to the  Virgin Islands Water and Power Authority (VIWAPA) and the Puerto Rico  Electric Power Authority (PREPA), power has been restored to all  customers with structures deemed safe for power restoration. This does  not mean that all pre-storm customers have power, as some structures  may not have been deemed safe for power restoration.

Under the federal government’s National Response Framework, which  describes how the federal government, states and localities, and other  public and private sector institutions should respond to disasters and  emergencies, electric utilities are responsible for repairing damaged  electricity infrastructure and restoring services. Electric utilities often use  mutual assistance—voluntary partnerships with other electric utilities—to  bring in additional resources beyond those of the affected utility to help  restore electricity. Under the National Response Framework, when  appropriate, federal agencies provide financial assistance for response and recovery activities, help coordinate the response, gather and share  information, and communicate with key stakeholders and the public. Also,  in severe emergencies, federal agencies can provide some logistical  support, such as assisting in damage assessments and locating and  transporting repair crews and equipment.

The National Response Framework designates the Federal Emergency  Management Agency (FEMA), a component of the Department of  Homeland Security, to lead the coordination of federal disaster response  efforts. The framework’s 14 emergency support functions are the federal  government’s primary coordinating structure for building, sustaining, and  delivering response capabilities during an emergency. For each of the 14  emergency support functions, a federal department or agency serves as  the designated coordinator. The framework designates the Department of  Energy (DOE) as the coordinating agency for federal efforts in the energy  sector, which includes electricity. In this role, DOE is responsible for  coordinating with FEMA and other relevant federal agencies, such as the  U.S. Army Corps of Engineers (USACE), and for collaborating with critical  infrastructure owners and operators to prioritize and coordinate federal  efforts. USACE is the coordinating agency for the public works and  engineering emergency support function under the framework, which  includes providing support for temporary emergency power, among other  things.

You asked us to review the federal government’s response to the 2017  hurricanes. Our objective in this report was to describe federal support  provided to help restore the electricity grids in Puerto Rico and the U.S.  Virgin Islands in response to the 2017 hurricane season and the factors  that affected this support. This is our first report related to electricity  infrastructure in response to your request; we have ongoing work  examining federal support to improve grid resilience in Puerto Rico.

To conduct this work, we reviewed documentation related to federal  agency support to help restore electricity grids in response to the 2017  hurricane season in Puerto Rico and the U.S. Virgin Islands. Specifically,  we reviewed the National Response Framework; FEMA mission  assignment documents; and agency reports identifying lessons learned,  such as FEMA’s 2017 Hurricane Season FEMA After-Action Report,  DOE’s after action report for the 2017 hurricane season, and USACE’s  2018 Remedial Action Program Senior Leader Briefing. We also reviewed  documents related to FEMA’s Public Assistance Program including  FEMA’s Public Assistance Program and Policy Guide and FEMA’s Public  Assistance Alternative Procedures (Section 428) Guide for Permanent  Work in Puerto Rico.

We reviewed FEMA data on obligations for electricity restoration efforts in  Puerto Rico and the U.S. Virgin Islands as of July 20, 2018, the most  recent data available at the time of our review. FEMA officials compiled  obligations related to electricity restoration from two databases, the  Emergency Management Mission Integrated Environment and the  Enterprise Coordination and Approvals Processing System. To assess  the reliability of these data, we reviewed existing information about the  data and discussed data quality control procedures with FEMA officials.  We determined that the data we used from these systems were  sufficiently reliable for the purposes of this report. To identify USACE  contract obligations for grid restoration in Puerto Rico, we reviewed  Federal Procurement Data System-Next Generation (FPDS-NG) data  through June 30, 2018, the most recent data available at the time of our  review. We assessed the reliability of FPDS-NG data by reviewing  existing information about the FPDS-NG system and the data it collects,  and compared FPDS-NG data to the contract files in our review. We  determined that the FPDS-NG data were sufficiently reliable for the  purposes of this report. We also reviewed PREPA’s data on the number  of lineworkers working on grid restoration efforts in Puerto Rico. We  assessed the reliability of PREPA’s lineworker data by interviewing  PREPA officials on how the data were collected and maintained, and we  also discussed the reliability of the data with FEMA, USACE, and DOE  officials. We found these data to be sufficiently reliable for our purposes.

We interviewed federal officials from FEMA, DOE, and USACE and  representatives from two relevant industry organizations—the Edison  Electric Institute and the American Public Power Association. We also  conducted site visits to Puerto Rico and the U.S. Virgin Islands to  interview representatives of local government agencies; the electric  utilities, PREPA and VIWAPA; and utility commissions.

To identify any factors that affected federal support for the restoration of  electricity grids in Puerto Rico and the U.S. Virgin islands, we  summarized officials’ and representatives’ views on any factors that  affected federal support for the restoration of the electricity grids. We  included those factors that were most often cited in interviews and  documents we reviewed.

We conducted this performance audit from February 2018 to April 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.

This section provides information on the electricity provider, impact of  2017 hurricanes, and status of electricity restoration in Puerto Rico and  the U.S. Virgin Islands. Also, it describes FEMA’s Public Assistance  Program.

Electricity provider. PREPA is a public power utility owned by the  Commonwealth of Puerto Rico and a monopoly supplier of electricity in  the commonwealth. It is also one of the nation’s largest public power  utilities, serving approximately 1.5 million customers. PREPA was  approximately $9 billion in debt prior to Hurricanes Irma and Maria, and  its electric power infrastructure was known to be in poor condition, largely  due to underinvestment and poor maintenance practices. In May 2018,  we found that inadequate management of PREPA’s financial condition  contributed to Puerto Rico’s persistent deficits. Specifically, PREPA did  not update or improve its electric generation and transmission systems,  which hampered their performance and led to increased costs of  producing electricity that it did not fully pass on to consumers. In addition,  Puerto Rico’s economy is in a prolonged period of economic contraction,  and according to U.S. Census Bureau estimates, its population declined  from a high of approximately 3.8 million people in 2004 to 3.3 million  people in 2017, a decline of 12.8 percent. Along with the declining  population, demand for electricity declined 18 percent from 2007 to 2017,  according to PREPA.

Impact of 2017 hurricanes. Hurricanes Irma and Maria in September  2017 left Puerto Rico’s entire electricity grid inoperable, according to the  economic and disaster recovery plan for Puerto Rico. According to a  report by a working group that included utilities and national laboratories,  among others, because of the extended and unprecedented damage, a  significant portion of the generation, transmission, and distribution system  must be rebuilt, including high-voltage transmission lines that often  survive lower category hurricanes. While Puerto Rico’s population had  already been declining, the migration of people from Puerto Rico  accelerated following the hurricanes, according to PREPA.

Status of electricity restoration. According to PREPA, it took roughly 11  months for power to be restored to all of the customers able to receive  power safely in Puerto Rico following the hurricanes. A PREPA official  told us that PREPA’s estimates of customers with power restored are  based on the number of meters that it knows are served by a given power  line and on the number of meters it can read currently. Power has been  restored to 100 percent of customers that are able to receive power  safely, but this does not mean that all pre-storm customers have power  restored, as some structures may not have been deemed safe for power  restoration, according to PREPA officials. Figure 1 shows the percentage  of customers with electricity restored in Puerto Rico beginning in January  2018 when PREPA was able to start estimating this information.

Although PREPA estimates that electricity had been restored to all  customers by August 2018, in some instances electricity service has been  supported by temporary generators, and outages have continued. For  example, as of December 11, 2018, USACE was supporting seven  generators that were supporting micro grids for the island municipalities of  Vieques and Culebra. These islands had previously been served by an  undersea transmission line connecting the islands to PREPA’s main grid  on Puerto Rico. According to the U.S. Energy Information Administration,  total electricity sales in Puerto Rico returned to pre–Hurricane Maria  levels as of April and May 2018, although residential electricity sales  appear to continue to lag historical levels, reflecting some continued  outages.

Electricity provider. VIWAPA, a public utility, is a monopoly provider of  electric power services in the U.S. Virgin Islands and serves  approximately 55,000 customers throughout the territory. Like PREPA,  VIWAPA faced financial challenges before the hurricanes. The USVI  Hurricane Recovery and Resilience Task Force Report noted that  VIWAPA has a 17 percent non-payment rate across its customer base, a  significant unfunded pension liability, and long-term debt commitments of  $265 million. In addition, the report states that the U.S. Virgin Island’s  energy system faces many challenges that have led to higher rates and a  historically unreliable grid. These include an aging, inefficient, and  oversized infrastructure and heavy reliance on imported fossil fuels. The  report also says that peak demand declined 18 percent from 2011  through 2017, driven by a variety of factors, including population decline.  In addition, the report says that VIWAPA’s high energy rates and  reliability issues have led some customers— particularly larger  commercial and industrial ones—to leave the grid.

Impact of 2017 hurricanes. Hurricanes Irma and Maria damaged more  than 90 percent of VIWAPA’s aboveground power lines and over 20  percent of VIWAPA’s generation capacity, according to the USVI  Hurricane Recovery and Resilience Task Force Report. Specifically, the  hurricanes damaged more than 20,000 poles and 1,100 miles of  transmission and distribution lines, according to the report. Although 90  percent of VIWAPA’s above ground power lines were damaged, this was  far fewer than the miles of transmission and distribution lines damaged in  Puerto Rico.

Electricity status. According to VIWAPA, following the hurricanes, it took  roughly 5 months for power to be restored to all of the eligible customers  in the U.S. Virgin Islands. Eligible customers were those whose homes  were safely able to receive power. Some homes had suffered substantial  damage to their electrical infrastructure from the hurricanes and were not  able to receive power safely until their electrical equipment was repaired.  VIWAPA’s estimates of customers with power restored are based on the  number of meters that VIWAPA knows are served by a given power line,  as VIWAPA’s automated system for determining the percentage of  customers without power was destroyed and is still being restored,  according to a FEMA official. Although electricity service has been  restored, electricity demand has not recovered to prestorm levels.  According to the USVI Hurricane Recovery and Resilience Task Force  Report, VIWAPA’s peak demand—the maximum energy load consumed  by customers at any point in a year—was approximately 107 megawatts  before the storms, but as of May 2018 it was 66 megawatts. The report  says that demand will likely rebound to some degree as the territory  rebuilds and recovers; however, it is unclear how quickly or by how much.

FEMA, in leading the coordination of federal disaster response efforts,  provides assistance through its Public Assistance Program to state,  territorial, local, and tribal governments and certain types of private  nonprofit organizations to assist them in responding to and recovering  from major disasters or emergencies. FEMA Public Assistance Program  funds can be provided for emergency work, such as for emergency protective measures that  must be done immediately to protect public health and safety; permanent work, which includes the restoration of disaster-damaged management costs, which include indirect costs, administrative  expenses, or other expenses that are not directly chargeable to a  specific project and that a recipient or subrecipient incurs in  administering and managing Public Assistance awards.

Generally, emergency work takes place for about 6 months following a  disaster, while permanent work can take place over a decade, according  to FEMA officials. FEMA can provide grants for both emergency and  permanent work, and it can also provide direct federal assistance for  emergency work. Under direct federal assistance, federal agencies  directly perform or contract for the emergency work. FEMA’s Public  Assistance Program allows for the federal government to provide direct  assistance at the request of the state, territorial, and local governments  when the impact of an incident is so severe that the state, territorial, and  local governments lack the capability to perform or contract eligible  emergency work. Under the Public Assistance Program and the Stafford  Act, FEMA may mission assign—issue a work order that directs another  federal agency, such as DOE or USACE to utilize its authorities and the  resources granted to it under federal law—in support of this direct  assistance to state, local, and territorial governments.

The Community Disaster Loan program provides loans to local  governments that have suffered substantial loss of tax and other revenue  in areas included in a major disaster declaration. The loan funding may  be used for existing essential municipal functions and expanded functions  required to meet disaster-related needs, but not for capital improvements  or repair or restoration of damaged public facilities.

The Federal Role in Electricity Grid Restoration Was Unprecedented in Puerto Rico, and Various Factors Affected the Support Provided in Puerto Rico and the U.S. Virgin Islands

Federal agencies provided traditional support to restore electricity in  response to Hurricanes Irma and Maria in both Puerto Rico and the U.S.  Virgin Islands—such as providing temporary power for critical facilities.  They also provided unprecedented support in Puerto Rico by helping to  coordinate efforts to repair Puerto Rico’s electricity grid rather than  primarily supporting the local utility’s efforts. Factors that affected the  electricity grid restoration efforts in Puerto Rico and the U.S. Virgin  Islands included logistical constraints, availability of materials, the  financial condition of local utilities, and the unprecedented and extensive  role of federal agencies. Appendix I provides timelines of federal and  other efforts to support electricity grid restoration in Puerto Rico and the  U.S. Virgin Islands after the 2017 hurricane season.

Federal Support Provided to Restore Electricity in Puerto Rico and the U.S. Virgin Islands in Response to the 2017 Hurricanes Included an Unprecedented Role for the Federal Government

Federal agencies assisted in the restoration of electricity after Hurricanes  Irma and Maria in a variety of ways. FEMA provided billions in grants and  direct federal assistance for electricity restoration. DOE provided subject  matter expertise and coordination assistance. USACE provided  temporary emergency power in Puerto Rico and the U.S. Virgin Islands.  In addition, FEMA and USACE undertook unprecedented roles to help  coordinate and directly assist with grid restoration in Puerto Rico.

Grants, direct federal assistance, and loans from FEMA. FEMA  provided billions in grants and direct federal assistance to support  electricity restoration in Puerto Rico and the U.S. Virgin Island through its  Public Assistance Program. As public utilities, both PREPA and VIWAPA  are eligible applicants for federal assistance through FEMA’s Public  Assistance Program for the repair, restoration, and replacement of public  facilities damaged or destroyed by a major disaster. As of July 20, 2018,  FEMA had obligated approximately $3.2 billion for direct federal  assistance through mission assignments and Public Assistance grant  funds for electricity restoration in Puerto Rico and approximately $795  million for the U.S. Virgin Islands. This includes $2 billion that FEMA  obligated for direct federal assistance through mission assignments to  USACE for temporary emergency power and grid restoration efforts in  Puerto Rico. In the U.S. Virgin Islands, FEMA obligated $63 million for  direct federal assistance related to electricity restoration, most of which  was obligated to USACE and DOE. Table 1 shows FEMA funding  obligations for electricity restoration efforts in Puerto Rico and the U.S.  Virgin Islands.

In addition, FEMA provided $75 million to VIWAPA through the  Community Disaster Loan program as of July 20, 2018, according to  FEMA officials. FEMA officials said that the most common use for  Community Disaster Loan funds is payroll, and other examples of eligible  uses include employee benefits, facilities maintenance costs, and normal  operating materials.

Coordination and technical assistance from DOE. DOE received  mission assignments from FEMA and deployed staff from its  headquarters, site offices, and power marketing administrations to  provide subject matter expertise and technical assistance in support of  electricity grid damage assessments and power restoration efforts in both  Puerto Rico and the U.S. Virgin Islands. According to DOE officials,  DOE’s primary role in the response efforts on Puerto Rico and the U.S.  Virgin Islands was coordination and provision of subject matter experts,  as is typical for DOE’s role as the lead agency for the energy sector  emergency support function. In Puerto Rico, however, DOE provided  more advisors for a longer period of time than would be typical because  of the extent of the damage to the electricity grid in Puerto Rico and  PREPA’s limited capacity to respond, according to DOE officials.  Specifically, DOE staffed up to 12 project support advisors to Puerto Rico  from October 18, 2017, to August 8, 2018, and one supply chain support  advisor from December 18, 2017, to March 16, 2018. These advisors  provided subject matter expertise to USACE by reviewing construction  plans and providing recommendations for prioritization, and scheduling  and assisting in inventory management for incoming electrical grid  equipment, among other things, according to DOE. In addition, in the U.S.  Virgin Islands DOE deployed a team of 36 people from the Western Area  Power Administration along with trucks and materials to help rebuild the  electricity grid through a FEMA mission assignment. DOE officials told  us that the department is also providing ongoing support on how to  improve grid resilience as part of grid restoration and recovery efforts in  both Puerto Rico and the U.S. Virgin Islands.

Temporary power from USACE. USACE provided temporary  emergency power for critical facilities in Puerto Rico and the U.S. Virgin  Islands. These temporary emergency power missions provided and  maintained generators to deliver electricity to critical public facilities, such  as hospitals and relief centers. After receiving a FEMA mission  assignment to provide temporary emergency power in Puerto Rico,  USACE deployed its Emergency Power Planning and Response Team,  USACE government employees, soldiers from the 249th Engineer  Battalion, and contractors. USACE installed a record number of  emergency electric generators in Puerto Rico—over 2,300—through the  end of May 2018. The previous record was 310 emergency generators  installed in response to Hurricane Katrina. On May 17, 2018, FEMA  approved the extension of the USACE mission assignment for emergency  power to November 30, 2018. This extension permitted USACE to  continue its support for the more than 700 generators still in use  throughout Puerto Rico at that time. FEMA later extended the mission  assignment until April 8, 2019. As of December 11, 2018, USACE was  supporting 24 generators in Puerto Rico, seven of which were supporting  micro grids for the island municipalities of Vieques and Culebra. In the  U.S. Virgin Islands, USACE installed 180 generators as a part of its  temporary emergency power mission. USACE’s temporary emergency  power mission for the U.S. Virgin Islands was completed in February  2018, and USACE is no longer supporting generators there.

Unprecedented Roles by FEMA and USACE in Puerto Rico. In  addition to the typical roles federal agencies undertake in restoration  activities, FEMA and USACE undertook unprecedented roles in Puerto  Rico because of the severe and widespread impacts of Hurricane Maria  and PREPA’s limited capacity. For the first time in its history, FEMA  undertook the role of helping to coordinate major electricity grid  restoration because PREPA did not have the necessary capability,  capacity, or structure to respond, according to FEMA officials. FEMA  officials also noted that PREPA’s workers were not only engaged in  restoration work but were also victims dealing with the same post- hurricane effects as the rest of the population.

As part of its response, FEMA mission assigned USACE to lead federal  efforts to repair Puerto Rico’s electricity grid—a role USACE had not  played in the past during a domestic disaster response. Specifically, on  September 30, 2017, the FEMA Administrator tasked USACE with  leading the planning, coordination, and integration of the grid restoration.  FEMA assigned USACE to lead federal efforts and provide direct support  for grid restoration because PREPA was overwhelmed and had liquidity  issues and USACE had the structures in place to award contracts with  and bring in grid restoration crews, according to FEMA officials. In order  to carry out its mission assignment, USACE issued contracts to bring  lineworkers and materials to Puerto Rico to support the reinstallation and  repair of transmission and distribution lines, among other power  restoration activities. As of June 30, 2018, USACE had obligated  approximately $1.5 billion on these contracts. Figure 2 shows USACE  and its contractors working to restore electricity in Puerto Rico. USACE’s  grid restoration mission assignment from FEMA ended on May 18, 2018,  because, according to FEMA officials, power had been restored to  approximately 98 percent of customers and PREPA, with its remaining  contractors, had adequate capability to do the remaining work.

In addition to the federal response, PREPA issued its own contracts to  bring in additional lineworkers, received assistance from the New York  State Utility Contingent, and requested and received mutual assistance  from other utilities. PREPA did not initially reach out for mutual  assistance. About 6 weeks following Hurricane Maria, on October 31,  2017, PREPA formally requested aid from other utilities on the mainland  through the American Public Power Association and the Edison Electric  Institute. The electric power industry sent two individuals to Puerto Rico  on November 3, 2017 and they began assessing storm damage and  working with PREPA, FEMA, USACE, and DOE officials to develop a  restoration plan. On November 22, 2017, the Governor of Puerto Rico  appointed one of these individuals as Power Restoration Coordinator to  oversee the multipronged restoration effort. According to the Power  Restoration Coordinator, as a first step he worked to create an incident  command structure, and incident management teams began arriving in  December. Once the incident command structure was in place, the  industry deployed additional crews, equipment and materials in January  to accelerate the ongoing restoration efforts across the island. As  discussed previously, local utilities are typically responsible for restoring  service, with federal agencies providing financial and other support. In  contrast, approximately half of the lineworkers working to restore the  electricity grid in Puerto Rico were USACE or USACE contractors at the  peak of restoration efforts in February 2018, as shown in figure 3.

FEMA established a unified command structure to coordinate efforts of  federal agencies, PREPA, PREPA’s contractors, the New York State  Utility Contingent, and utilities providing mutual assistance to PREPA, to  help target priority work, ensure that crews could get to the work, and  identify needed materials. Figure 4 shows the unified command structure.

Logistical Challenges and Other Factors Affected Federal Support to Restore Electricity

According to documents we reviewed and our interviews with officials and  representatives, the most commonly cited factors that affected federal  electricity grid restoration efforts in Puerto Rico and the U.S. Virgin  Islands included (1) logistical challenges, (2) availability of materials, (3)  financial condition of local utilities and poor condition of existing  infrastructure, and (4) the extensive and unprecedented role of federal  agencies.

Logistical challenges. Responding to disasters on islands presents  a number of logistical challenges. Specifically, according to federal  officials, getting the crews, equipment, and materials needed to  support restoration efforts to an island was more difficult and time- consuming than doing so on the mainland. This includes  prepositioning assets, such as generators, and delivering equipment  and materials in advance of a storm. The difficulties were greater in  the days following the hurricanes since neither the ports nor the  airports in Puerto Rico and the U.S. Virgin Islands had power, which  prevented the delivery of materials to the islands. In Puerto Rico, the  Port of San Juan reopened for daylight operations 3 days after  Hurricane Maria made landfall; every airport and seaport had limited  capacity after reopening for approximately 7 days post-landfall,  according to FEMA’s 2017 Hurricane Season After-Action Report.  Federal officials in the U.S. Virgin Islands told us that they faced  further delays locating key supplies because of inadequate labelling of  shipping containers at the port. For example, some containers were  marked only as disaster supply equipment, which did not sufficiently  identify the contents within them. According to USACE’s 2018  Remedial Action Program Senior Leader Briefing, USACE lacked the  expertise and capabilities to manage the large operational logistics  requirements to support the Puerto Rico and U.S. Virgin Islands  response.

Availability of materials. The sequence of three hurricanes making  landfall in the United States in 2017 and the need to restore electricity  service in Texas, Florida, and elsewhere, in addition to Puerto Rico  and the U.S. Virgin Islands, complicated the restoration effort in the  two territories. Since utilities in all affected areas were acquiring  materials to restore electricity service, demand for these materials  increased and available supplies were generally low; in some  instances materials were only available as they were manufactured.  Few, if any, materials were stockpiled locally on Puerto Rico. In  addition, some of the equipment used in Puerto Rico was not  standard in the continental United States and required ordering of  specialized materials, resulting in delays in the restoration process.  The U.S. Virgin Islands also faced supply issues, which became  worse once grid recovery work in Puerto Rico began.

Financial condition of local utilities and poor condition of  existing infrastructure. Electric utilities in both Puerto Rico and the  U.S. Virgin Islands were insolvent, which led to a lack of maintenance  and presented its own challenges for restoring the grids after the  storms. Specifically, PREPA was approximately $9 billion in debt  before the 2017 hurricane season, with annual costs that exceeded its  revenues. Puerto Rico’s electric power infrastructure was in poor  condition before the 2017 hurricane season largely because of  PREPA’s underinvestment and poor maintenance practices. For  example, PREPA canceled its vegetation management program  because of its financial situation; this contributed to the destruction of  transmission and distribution lines when the hurricane arrived,  according to FEMA officials.

Similarly, in the U.S. Virgin Islands, financial challenges contributed to  the extent of the damage to grid infrastructure. Specifically, VIWAPA  officials told us that VIWAPA’s financial challenges prevented certain  infrastructure improvements and a large proportion of the electricity  poles were at or above their weight capacity, increasing the likelihood  and extent of wind damage during the hurricanes. According to  VIWAPA officials, VIWAPA was aware that there were too many lines  and heavy transformers on old poles, but was not in a position to  address this concern prior to the hurricanes.

Extensive and unprecedented role of federal agencies. FEMA did  not anticipate or plan for the extensive role that it and USACE played  in grid restoration in Puerto Rico. According to FEMA’s after action  report for the 2017 hurricane season, FEMA’s planning assumptions  for a hurricane, earthquake, or tsunami striking Puerto Rico and the  U.S. Virgin Islands underestimated the actual requirements. As  discussed above, prior to Hurricane Maria in Puerto Rico, USACE had  never worked on a large-scale power restoration as part of a domestic  disaster response and did not have expertise in this area, according to  USACE officials. This affected grid restoration efforts. For example,  USACE did not have a grid restoration contract in place to  immediately initiate grid repair efforts, according to USACE officials.  Rather, USACE issued an order off of a pre-existing contract that it  had under its public works and engineering support function to bring  electric utility lineworkers to Puerto Rico. According to USACE  officials, a bid protest against one of USACE’s contracts delayed its  ability to increase the contract to bring more lineworkers to Puerto  Rico. In addition, the contract review and approval process USACE  used to obtain supplies took longer than it would typically take utilities  to get supplies, according to FEMA officials we interviewed.  According to USACE officials, USACE followed federal acquisition  regulations, which is a slow process compared to private party  purchases. USACE officials said that USACE is considering looking at  what would be needed to create an advance grid restoration contract.

FEMA, USACE, and DOE identified potential actions to address these  challenges. According to its after action report, FEMA plans to establish a  standing interagency Power Task Force to coordinate with DOE, USACE,  and state and local governments and provide crisis planning for the  energy sector emergency support function to support the restoration of  power during future national response efforts. USACE’s 2018 Remedial  Action Program Senior Leader Briefing made recommendations to  improve contingency contracting and operational logistics, among other  things. Specifically, recommendations included that USACE review  existing and planned advance contracts and make adjustments as  necessary to increase capacity and improve capabilities, and that USACE  work with FEMA to convene an interagency logistics planning team and  identify logistics contracting gaps and propose government and private  sector solutions. DOE’s after action report for the 2017 hurricane season  says that the lessons learned from the response to Hurricane Maria may  prompt some programmatic improvements to the energy sector  emergency support function roles and responsibilities related to island  response, among other potential improvements. In addition, the report  states that because of the extensive damage to grid infrastructure and the  length of the restoration and recovery, there is an increasing need to  incorporate resilience and hardening into restoration, recovery, and  mitigation planning and execution.

We provided a draft of this report to the Department of Defense (DOD),  the Department of Homeland Security (DHS), DOE, and the governments  of Puerto Rico and the U.S. Virgin Islands for review and comment. In its  comments, reproduced in appendix II, DHS indicated that a top priority of  DHS, FEMA and the entire federal government has been to provide life  safety and life-sustaining resources to Puerto Rico and the U.S. Virgin  Islands, including efforts to restore power and stabilize critical  infrastructure. DHS, DOD, and DOE also provided technical comments,  which we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, the Secretary of Energy, the  Secretary 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 ruscof@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix III.

Appendix I: Timelines of Federal and Other Efforts to Support Electricity Grid Restoration

See figures 5 and 6 for a timeline of federal and other efforts to support  electricity grid restoration in Puerto Rico and the U.S. Virgin Islands after  the 2017 hurricane season.

Appendix II: Comments from the Department of Homeland Security

Appendix III: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Quindi Franco (Assistant  Director), Marya Link (Analyst in Charge), Janice Ceperich, William  Gerard, Cindy Gilbert, Joseph Maher, David Marroni, Bolko Skorupski,  Sheryl Stein, and Jarrod West made key contributions to this report.

In 2017, Hurricanes Irma and Maria damaged much of the electricity transmission and distribution systems in the U.S. Virgin Islands and Puerto Rico. This resulted in the longest blackout in U.S. history—about 11 months in Puerto Rico.

Federal agencies usually support local utilities in disaster responses. In Puerto Rico, agencies took unprecedented direct roles in grid restoration efforts. This was in part because the Puerto Rico electric utility, which was in debt before the storms, did not have the capacity to fully respond. The Federal Emergency Management Agency provided about $3.2 billion for electricity restoration as of July 2018.


National Biodefense Strategy: Opportunities and Challenges with Early Implementation

GAO has reported on the inherent fragmented nature of the federal and nonfederal resources needed to protect the nation from potentially catastrophic biological threats. GAO called for a strategic approach to help the federal government better leverage resources and manage risk The White House issued the National Biodefense Strategy and the Presidential Memorandum on the Support for National Biodefense to promote a more efficient and coordinated biodefense enterprise.

The National Defense Authorization Act for Fiscal Year 2017 included a provision that GAO review the strategy. This testimony highlights key findings from our February 2020 report, which analyzed the extent to which the Strategy and related implementation efforts are designed to allow an enterprise-wide approach.

Issued in September 2018, the National Biodefense Strategy (Strategy) and implementation plan, along with National Security Presidential Memorandum-14 (NSPM-14), are designed to enhance national biodefense capabilities. NSPM-14 established a governance structure composed of relevant federal agencies and chaired by the Secretary of Health and Human Services (HHS) to guide implementation. It also required federal agencies with biodefense responsibilities to collect and assess data on their biodefense activities to, among other things, identify gaps.

There are a number of challenges, however, that could limit long-term implementation success. Among other things, there was no documented methodology or guidance for how data are to be analyzed to help the enterprise identify gaps and opportunities to leverage resources, including no guidance on how nonfederal capabilities are to be accounted for in the analysis.

Agency officials were also unsure how decisions would be made, especially if addressing gaps or opportunities to leverage resources involved redirecting resources across agency boundaries. Although HHS officials pointed to existing processes and directives for interagency decision making, GAO found there are no clear, detailed processes, roles, and responsibilities for joint decision-making, including how agencies will identify opportunities to leverage resources or who will make and enforce those decisions. As a result, questions remain about how this first-year effort to catalogue all existing activities will result in a decision-making approach that involves jointly defining and managing risk at the enterprise level. Without clearly documented methods, guidance, processes, and roles and responsibilities for enterprise-wide decision-making, the effort runs the risk of failing to move away from traditional mission stovepipes toward a strategic enterprise-wide approach that meaningfully enhances national capabilities.

In the February 2020 report, GAO made four recommendations to the Secretary of HHS, including working with other agencies to document methods for analysis and the processes, roles, and responsibilities for enterprise-wide decision making. HHS concurred with all the recommendations and described steps to implement them.

We are pleased to be here today to discuss our recently issued work on  the National Biodefense Strategy. Catastrophic biological threats  highlight the inextricable link between security and public health  concerns. These threats—whether naturally-occurring, intentional, or  accidental—have the potential to cause loss of life and sustained damage  to the economy, societal stability, and global security. The vast and  evolving biological threat landscape includes threats of naturally-occurring  infectious diseases, bioterrorism, and safety and security lapses at  facilities that house biological threat agents. For example, the  unpredictable nature of naturally-occurring disease, such as the novel  coronavirus (COVID-19), poses a threat to humans. As of March 5, 2020,  COVID-19 has spread from China to nearly 80 countries, including the  United States, which has over 150 cases and nearly a dozen deaths  associated with the virus. This novel virus poses a public health and  economic threat, and may eventually be declared a pandemic, as seen  with severe acute respiratory syndrome (SARS) in 2003. Infectious  diseases, such as coronaviruses, can be transmissible from animals to  humans, demonstrating how our relationships with animals may increase  the risk of disease transmission among people, pets, livestock, and  wildlife.

Since March 2011, we have called for a more strategic approach to  guiding the systematic identification of risks, assessing resources needed  to address those risks, and prioritizing and allocating investments across  the biodefense enterprise. At that time, we said the biodefense  enterprise would benefit from institutionalized leadership with sufficient  time, responsibility, authority, and resources needed to promote efficiency  and accountability. Similarly, so that leadership can help to ensure that  federal programs are well coordinated, and that gaps and duplication in  capabilities are avoided, we called for a strategy that would help ensure  that plans and actions across various biodefense functions are cohesive,  compatible, and mutually reinforcing.

Signed into law in December 2016, the National Defense Authorization  Act for Fiscal Year 2017 (NDAA) required the departments of Defense  (DOD), Health and Human Services (HHS), Homeland Security (DHS),  and Agriculture (USDA) to jointly develop a national biodefense strategy  and associated implementation plan. In September 2018, the White  House issued the National Biodefense Strategy (Strategy) and  characterized it as a new direction to protect the nation against biological  threats, stating that its implementation would promote a more efficient,  coordinated, and accountable biodefense enterprise. At the same time,  the President issued the Presidential Memorandum on the Support for  National Biodefense/National Security Presidential Memorandum-14  (NSPM-14), which details a governance structure and implementation  process to achieve the Strategy’s goals. For example, it established two  governing bodies: the Biodefense Steering Committee—chaired by the  Secretary of HHS—and the Biodefense Coordination Team to support the  efforts of the Steering Committee.

Our testimony today highlights key findings from our February 2020  report, which analyzed the extent to which the Strategy and related  implementation efforts are designed to allow an enterprise-wide  approach. We made four recommendations to HHS in our report, aimed  at improving the Strategy’s implementation. HHS concurred with our  recommendations.

For our February 2020 report, we evaluated the early Strategy  implementation efforts of HHS, DOD, USDA, and DHS; the departments  of State, Justice (specifically the FBI), and Veterans Affairs (VA); and the Environmental Protection Agency (EPA). We analyzed the Strategy and  associated plans, reviewed agency products created in response to  requirements set forth in NSPM-14, and solicited perspectives from key  officials in the eight agencies named above. More information on our  scope and methodology can be found in the report. The work on which  this statement is based was performed from October 2018 to February  2020 in accordance with generally accepted government auditing  standards.

The Biodefense Strategy Provides Opportunity to Create an Enterprise-Wide Approach, but Implementation Challenges Remain

We found that the National Biodefense Strategy and associated plans  bring together all the key elements of federal biodefense capabilities,  which presents an opportunity to identify gaps and consider enterprise- wide risk and resources for investment trade-off decisions. However,  challenges with planning to manage change; limited guidance and  methods for analyzing capabilities; and lack of clarity about decision- making processes, roles, and responsibilities while adapting to a new  enterprise-wide approach could limit the success of the Strategy’s  implementation.

Framework Created to Assess Enterprise-Wide National Biodefense Capabilities

The National Biodefense Strategy and its associated plans bring together  the efforts of federal agencies with significant biodefense roles,  responsibilities, and resources to address naturally-occurring, accidental,  and intentional threats. The Strategy and plans also provide processes for  collecting and analyzing comprehensive information across the  enterprise, an important step toward the kind of enterprise-wide strategic  decision-making we have called for. The Strategy defines the term  “biothreat” broadly to include all sources of major catastrophic risk,  including naturally-occurring biological threats, the accidental release of  pathogens, and the deliberate use of biological weapons. Officials we  interviewed noted that this is the first time that the federal government  has identified activities across the whole biodefense enterprise and  assessed resources and gaps to address multiple sources of threat  regardless of source.

The Strategy also outlines high-level goals and objectives to help define  priorities. NSPM-14, which was issued to support the strategy,  established a structure and process by which federal agencies can  assess enterprise-wide biodefense capabilities and needs, and  subsequently develop guidance to help inform agency budget  submissions. NSPM-14 lays out, in broad strokes, a process to identify  biodefense efforts and assess how current resources support the  Strategy, how existing programs and resources could better align with the  Strategy, and how additional resources, if available, could be applied to  support the goals of the Strategy. As shown in figure 1, this process  begins through a data call with participating agencies documenting all  biodefense programs, projects, and activities within their purview in a  biodefense memorandum.

In interviews, officials from participating agencies stated that the NSPM- 14 processes constitute a new approach to identifying gaps and setting  budget priorities for biodefense, and that they viewed the approach as  generally well designed. Additionally, agency officials said that the  assessment and joint policy guidance development process outlined in  NSPM-14 offered some promise for helping agencies identify the  resources necessary to achieve the Strategy’s goals. Nevertheless,  officials from all of the agencies we interviewed, even those with the most  optimistic views on the leadership and governance structure design,  tempered their responses with the caveat that implementation is in such  early stages that it remains to be seen how effective these structures will  actually be once tested.

In our February 2020 report, we also identified challenges that if not  addressed could hinder enterprise-wide biodefense efforts. Specifically,  although the Strategy and associated plans establish the foundation for  enterprise risk management, we and biodefense agency officials  identified multiple challenges that could affect the Strategy’s  implementation. These include challenges individual agencies faced  during the initial data collection process as well as a lack of planning and  guidance to support an enterprise-wide approach. In our analyses and  interviews, we found that parts of the process in the first year were  underdeveloped, raising questions about (1) the plans to support change  management practices and ensure that early-implementation limitations  do not become institutionalized in future years’ efforts; (2) guidance and  methods for meaningfully analyzing the data; and (3) the clarity of  decision-making processes, roles, and responsibilities.

Challenges adapting to new procedures. During our interviews, agency  officials reported challenges they faced in the first-year’s data collection  effort. These challenges may have led to incomplete data collection, but  are not wholly unexpected given they occurred in the context of the  individual agencies and officials adapting to new procedures and a  broader cultural shift from how they have approached their biodefense  missions in the past. Officials told us that because of the learning involved  the first time through the process, agencies may not have submitted  complete or detailed information about their biodefense programs. Some  officials we interviewed voiced concern that this first-year effort could set  a poor precedent for these activities in future years if the challenges are  not acknowledged and addressed. For example, an official noted that  committing to the first-year’s results as the “baseline” for future years of  the Strategy’s implementation could compound or institutionalize the  issues encountered in the first year. Officials from HHS and Office of  Management and Budget staff stressed that this process will be iterative,  with the first year being primarily about outlining the existing biodefense  landscape.

Our prior work on organizational transformations states that incorporating  change management practices improves the likelihood of successful  reforms and notes that it is important to recognize agency cultural factors  that can either help or inhibit reform efforts. However, the agencies  involved in implementing the Strategy do not have a plan that includes  change management practices that can help prevent these challenges  from being carried forward into future efforts, and help reinforce  enterprise-wide approaches, among other things. To address this issue,  we recommended the Secretary of HHS direct the Biodefense  Coordination Team to establish a plan that includes change management  practices—such as strategies for feedback, communication, and  education—to reinforce collaborative behaviors and enterprise-wide  approaches and to help prevent early implementation challenges from  becoming institutionalized. HHS concurred with this recommendation.

Guidance and methods for analyzing data. We found a lack of clear  procedures and planning to help ensure that the Biodefense Coordination  Team is prepared to analyze the data, once it has been collected, in a  way that leads to recognition of meaningful opportunities to leverage  resources in efforts to maintain and advance national biodefence  capabilities. In particular, HHS (1) has not documented guidance and  methods for analyzing the data, including but not limited to methods and  guidance for how to account for the contribution of nonfederal capabilities;  and (2) does not have a resource plan for staffing and sustaining ongoing  efforts. Specifically, we found that the processes for the Biodefense  Coordination Team to analyze the results of all the individual agency data  submissions and identify priorities to guide resource allocation were not  agreed upon or documented prior to the agency efforts and continue to  lack specificity and transparency. In our interviews, officials from four  agencies said they were uncertain about fundamental elements of the  implementation process, including how information gathered will be used  to identify gaps and set priorities. Additionally, the initial effort to collect  information on all programs, projects, and activities focused on existing  federal activities and did not include a complete assessment of  biodefense capabilities at the nonfederal level ̶ capabilities needed to  achieve the goals and objectives outlined in the Strategy.

Officials we interviewed also expressed concern about the resources that  the Biodefense Coordination Team had available to it, both in the first  year and on an ongoing basis. The officials told us that not all agencies  were able to provide a full-time detailee to help support the team. We  have previously reported that agencies need to identify how interagency  groups will be funded and staffed. However, officials from multiple  agencies told us that the initial planning for the staffing and  responsibilities for the Biodefense Coordination Team had not been  finalized. Without a plan to help ensure sufficient resources and mitigate  resource challenges for ongoing efforts, the Biodefense Coordination  Team risks not having the capacity it needs to conduct meaningful  analysis, which would undermine the vision created by the Strategy and  NSPM-14. To address these issues, we recommended the Secretary of  HHS direct the Biodefense Coordination Team to (1) clearly document  guidance and methods for analyzing the data collected from the agencies,  including ensuring that nonfederal resources and capabilities are  accounted for in the analysis, and (2) establish a resource plan to staff,  support, and sustain its ongoing efforts. HHS concurred with both  recommendations.

Roles and responsibilities for joint decision-making. The governing  bodies overseeing the National Biodefense Strategy’s implementation— the Biodefense Steering Committee and Biodefense Coordination  Team—did not clearly document key components of the assessment  process and roles and responsibilities for joint decision-making in the first  year of NSPM-14 implementation. This raises questions about how these  bodies will move from an effort to catalog all existing activities to decision- making that accounts for enterprise-wide needs and opportunities. For  example, officials from multiple agencies were not certain how the  governing bodies would make joint decisions regarding priority-setting  and the allocation of resources, how they would assign new biodefense  responsibilities if gaps were identified, and to what extent the Biodefense  Steering Committee could enforce budgetary priorities, if at all.

We also found a lack of shared understanding and agreement about how  the interagency process would work to align resources toward any  identified gaps and reconfigure resources for any identified redundancies  or inefficiencies. Additionally, we found that Presidential memorandums  guiding the process did not detail specific decision-making principles or  steps for reaching consensus or even for raising decision points about  how to best leverage or direct resources across the enterprise in  response to any gaps or inefficiencies. Similarly, agency officials we  interviewed were not clear how this process would work, how decisions  would be made, or how agencies would agree to take on new  responsibilities to bridge gaps to achieve the Strategy’s goals.

Further, the governing bodies have not fully defined the roles and  responsibilities for making enterprise-wide decisions that affect individual  agency budgets and for enforcing enterprise-wide budget priorities. As  with other parts of the NSPM-14 implementation process, the details  regarding specific roles and responsibilities for directing and enforcing  budget decisions lack detail and specificity. Additionally, officials from four  agencies stated that the charter for the Biodefense Coordination Team  has not been finalized, further delaying the articulation of roles and  responsibilities and the ability to establish a shared agenda and common  operating picture. As a result, some officials remain skeptical of the  effectiveness of any decisions made.

We previously reported that effective national strategies should help  clarify implementing organizations’ relationships in terms of leading,  supporting, and partnering. In the context of the Strategy, that includes  how enterprise-wide decisions about leveraging or directing resources to  fill gaps and reduce inefficiency will be made and by whom. Similarly, our  previous work has found that articulating and agreeing to a process for  making and enforcing decisions and clarifying roles and responsibilities  can improve the clarity surrounding a shared outcome, and that  articulating these agreements in formal documents can strengthen  agency commitment to working collaboratively and provide the overall  framework for accountability and oversight. Uncertainty around the  mechanisms to identify enterprise-wide priorities along with the lack of  clearly documented and agreed upon processes, roles, and  responsibilities for joint decision-making jeopardize the Strategy’s ability  to enhance efficiency and effectiveness of the nation’s biodefense  capabilities. To address this issue, we recommended that the Secretary  of HHS direct the Biodefense Coordination Team to clearly document  agreed upon processes, roles, and responsibilities for making and  enforcing enterprise-wide decisions. HHS concurred.

In conclusion, the current COVID-19 outbreak demonstrates that  responding to the ever-changing nature and broad array of biological  threats is challenging. The National Biodefense Strategy calls for the  need to improve state, local, tribal, territorial, private sector, federal,  regional, and international surveillance systems and networks to contain,  control and respond to biological incidents. As the current coronavirus  outbreak continues to cross regional and international borders, the federal  government must take necessary steps to protect the American public.

At the same time, we must not lose sight of the next threat. The National  Biodefense Strategy and NSPM-14 put in place a framework to be able to  assess threats and make difficult decisions about how to apply limited  resources to achieve the best benefit. However, the Strategy is only as  good as its implementation. Taking the necessary steps to address the  recommendations we have made regarding managing this cultural  change, analyzing data, ensuring sufficient resources to maintain  implementation efforts, and clearly articulating roles and responsibilities  for joint decision-making will better position our nation for the threats we  face today and in the future.

Chairwoman Maloney, Ranking Member Jordan, and Members of the  Committee, this concludes our prepared statement. We would be happy  to respond to any questions you may have at this time.

If you or your staff has any questions concerning this testimony, please  contact Christopher P. Currie at (404) 679-1875, CurrieC@gao.gov or  Mary Denigan-Macauley at (202) 512-7114,  DeniganMacauleyM@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. Individuals making key contributions to this statement  include Kathryn Godfrey (Assistant Director), Susanna Kuebler (Analyst- In-Charge), Michele Fejfar, Eric Hauswirth, Tracey King, and Jan  Montgomery. Key contributors for the previous work that this testimony is  based on are listed in each product.

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Biological threats can be manmade biological weapons, naturally occurring diseases such as novel coronavirus COVID-19, and more.

The National Biodefense Strategy, issued in 2018 along with implementation guidance, spells out the nation’s plan to address these threats. It calls for a joint effort by multiple agencies and private sector partners.

We testified about how well the strategy has worked so far. We found there are no clear processes, roles, or responsibilities for joint decision making. In February, we made 4 recommendations, including that Health and Human Services (the lead agency for the strategy) clearly document these factors.