Navy Can Improve Management of Shipyard Labor Resources Through Better Work Measurement Practices

NSIAD-84-96: Published: Apr 24, 1984. Publicly Released: Apr 24, 1984.

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GAO reviewed the adequacy of the Navy shipyard work measurement and cost accounting systems.

GAO has previously reported that the Navy needed to improve its work measurement and cost accounting systems to effectively control rising labor costs. Although the Navy has taken some corrective action, GAO found that, overall, the Navy has given work measurement and labor costing low priority. As a result, many problems still exist, including: (1) improper documentation of labor standards; (2) lack of justification by shipyard planners for increased work time allowances; and (3) incorrect application of standards for determining estimated job costs. Further, personnel responsible for monitoring employee labor-charging activities have not been able to determine the extent of time mischarged, and individuals administering work measurement and cost accounting activities have not been held fully accountable for their performance. The Naval Sea Systems Command (NAVSEA) has issued instructions emphasizing the need to implement effective work measurement systems and ensure accurate time charges for shipyards and has initiated programs to identify problems with estimating procedures and labor charging. However, progress toward these goals has been impeded by various problems, including the lack of a firm commitment by management to operating and maintaining a viable work measurement system and a lack of staff to effectively administer work measurement activities. GAO stated that, although it is difficult to estimate the impact of these weaknesses on labor costs, studies have shown that millions of dollars can be lost through low productivity.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Numerous initiatives were taken to improve work planning and execution. They include: (1) issuance of work sampling policies; (2) increasing industrial engineering resources; and (3) providing work measurement training.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSEA, to: (1) establish an improved work measurement system by ensuring that labor standards are properly set, supported, and used in calculating "should cost" allowances; (2) identify and provide the staff required to effectively administer work measurement programs and to do work measurement studies; and (3) develop training policies and plans which improve the skills required of those who administer, develop, and upgrade shipyard labor standards.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: NAVSEAINST 7510.2 was issued to provide policy and guidance on labor verification. It calls for labor checks, internal reviews, and reporting to NAVSEA.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSEA, to implement stronger controls to validate the accuracy of labor-charging practices by making sure that labor checks are done more frequently, are done in the prescribed format, and are used to help management correct problems, such as those relating to rework and lost time.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: The Department of Defense (DOD) agreed that organizational goals and objectives are needed, but does not agree that mandatory performance elements are required. GAO continues to believe that those who administer, develop, and upgrade labor standards should be held accountable for their performance.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSEA, to set organizational goals and objectives which address the quality of work measurement activities, and include these activities in designing and incorporating mandatory entries on performance evaluations to measure the effectiveness of shipyard employees involved.

    Agency Affected: Department of Defense: Department of the Navy

 

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