The Navy has established a service life extension program to extend by 15 years the normal 30-year life of its four Forrestal Class aircraft carriers. The Navy has estimated that it will take 28 months to do the work on each carrier, and it plans to do the work between October 1980 and November 1989. The U.S.S. Saratoga is the first carrier scheduled for the extension program, and the Navy decided that the work on this carrier would be done by the Philadelphia Naval Shipyard at an estimated cost between $554 million and $569 million.

The Navy considered having a private firm do the work on contract and estimated that it would cost $539.1 million. Although the Navy concluded that for decisionmaking purposes the costs were about equal, it made the site selection decision on the basis of other factors. The Navy's methodology for estimating the various cost elements were reviewed for reasonableness and consistency and adjustments were made in the Navy's estimates where appropriate. The net effect of the inconsistencies and errors made by the Navy was that the estimated costs were understated for Philadelphia and overstated for the private firm. The revised estimates showed that the extension program would cost between $88.9 million and $l05.2 million less at the private firm. Additional costs should also have been considered, including the costs of hiring and training new personnel at Philadelphia.

Status Legend:

Review Pending-GAO has not yet assessed implementation status.

Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.

Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.

Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.

• Review Pending
• Open
• Closed - implemented
• Closed - not implemented

Recommendation for Executive Action

Recommendation: The Secretary of the Navy should reevaluate the decision to do the work on the U.S.S. Saratoga at the Philadelphia Naval Shipyard and should determine whether the decision can still be justified.

Agency Affected:

Status: Closed

Comments: Please call 202/512-6100 for additional information.