Navy Has Revised Its Estimated Workforce Cost for Basing an Aircraft Carrier at Mayport, Florida
GAO-11-257R, Mar 3, 2011
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This report responds to House Report 111-491 to accompany a bill for the National Defense Authorization Act for Fiscal Year 2011 (H.R. 5136). The House Report noted that according to the environmental impact statement for the proposed homeporting of additional ships at Naval Station, Mayport, Florida, homeporting of a nuclear-powered aircraft carrier would result in temporary surges of maintenance employees associated with the 3-year depot-level maintenance cycle for the aircraft carrier. The homeporting of the aircraft carrier at Mayport is projected to begin in fiscal year 2019. Also, the House report raised questions about the potential impact that the additional depot-level workload would have on the sustainability, efficiency, capabilities, and stability of the maintenance employees who would travel from Navy depots to Mayport to perform the maintenance. To examine these issues, the House report directed GAO to provide an assessment of the readiness and cost impacts of the aircraft carrier homeporting and maintenance at Mayport on the Navy's traveling workforce. In response, our objectives were to determine the extent to which (1) the Navy has identified potential workforce-related costs associated with the planned move and used cost-estimating best practices to do so and (2) the readiness of the traveling workforce may be affected by having an aircraft carrier homeported in Mayport, and any mitigation measures the Navy has planned and implemented to address any potential impact.
In 2010, the Navy revised its original (2008) estimate of annualized workforce-related costs from about $18 million to $8.2 million. The Navy revised its estimate as a result of discussing its estimate with us and identifying more correct and complete assumptions than had been used to develop the original estimate. For example, the original estimate used the more expensive travel rates for San Diego instead of Mayport. To assess the validity of the revised estimate, we also developed an independent cost estimate. Our independent, risk-adjusted, annualized estimate for the workforce-related recurring costs is about $10.6 million at the 65 percent confidence interval, which means that there is a 65 percent probability the actual cost will be $10.6 million or less. We also estimated that these risk-adjusted costs could range from $5.5 million to $14.1 million. The difference is attributable in part to our estimate being based on a risk analysis while the Navy's was not. Our assessment of the Navy's cost-estimating procedures found that the Navy's procedures met best practices to various degrees. For example, the Navy's procedures met the requirements to comprehensively include both types of workforce-related costs (traveling and permanently stationed employees' costs) involved in the move. However, the Navy's procedures minimally met the credible criteria because they did not, among other things, include risk and sensitivity analyses or an independent cost estimate. The Navy has not begun to identify or document potential effects on readiness that might occur as a result of the proposed move nor has it identified workforce-related mitigation strategies because the move is years away. However, Navy officials indicated that the "U.S. Navy Depot Maintenance Strategic Plan" outlines strategies that will be used to address potential risks to readiness. Also, they indicated that they will begin to implement these strategies 4 to 5 years before moving the aircraft carrier to Mayport. We found that the Navy has processes to manage the workforce that include depot workers traveling to other locations to perform aircraft carrier maintenance. While the move to Mayport will result in increased travel for the workforce, Navy officials told us that they currently meet workforce travel requirements while staffed almost entirely by workers who voluntarily elect to travel. Navy officials do not anticipate any challenges in identifying a sufficient number of workers with the appropriate skills to perform maintenance work at Mayport. Further, Navy officials have indicated that the performance of the traveling workforce conducting remote aircraft carrier depot maintenance slightly exceeds that of workers requiring no travel. We are not making any recommendations in this report because we are issuing another report in March 2011 that addresses and makes recommendations to improve the Navy's overall costs of moving an aircraft carrier to Mayport.