Strategic Sealift:

Part of the National Defense Reserve Fleet Is No Longer Needed

NSIAD-92-3: Published: Oct 7, 1991. Publicly Released: Oct 7, 1991.

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Pursuant to a congressional request, GAO reviewed the National Defense Reserve Fleet's (NDRF) viability and the Maritime Administration's (MARAD) management of the fleet, focusing on: (1) the Reserve Fleet's changing character; (2) its contribution in deploying and sustaining U.S. troops during the Persian Gulf crisis; (3) the revenue implications of the domestic and foreign scrapping of Reserve Fleet ships; and (4) MARAD maintenance and management of the fleet's older, less ready vessels.

GAO found: (1) during the 1980s, the Department of Defense spent over $7 billion to improve, increase, and expand government-owned or -controlled sealift assets; (2) during deployment to the Persian Gulf, Non-Ready Reserve Force (non-RRF) ships were not used to assist in the transportation of the 10 million tons of cargo because there would not be enough time to activate the ships, the ships' relatively small size, slow transit speeds, long off-loading times compared with other ships, and the ready availability of U.S. and foreign flag commercial ships; (3) legislation has been introduced that would require that all Reserve Fleet ships built prior to 1946 be scrapped domestically; however, under present scrap market conditions, domestic ship scrappers have bid much less than foreign firms because of various economic, environmental, and safety factors that result in higher costs to U.S. firms; and (4) MARAD cannot ensure that non-RRF ships can be relied on as viable sealift assets because of ineffective dehumidification systems, inadequately controlled spare parts, doubtful availability of sufficient crews, unavailable ship condition documentation, and lack of written criteria and procedures for ship disposal.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: MARAD is scrapping obsolete NDRF ships as GAO has recommended. GAO believes this recommendation is no longer applicable.

    Matter: GAO did not estimate the additional costs that would be necessary to better maintain those ships; however, Congress will need to consider the likely impact on the overall Reserve Fleet's budget. Without a budget increase, additional funds spent improving the non-RRF ships will likely reduce the resources available to the RRF. If Congress chooses to continue with gradual 10-year phaseout of the non-RRF ships, consideration should be given to directing that the Maritime Administrator improve the ships' maintenance and management by following the specific steps outlined in GAO recommendations.

  2. Status: Closed - Not Implemented

    Comments: Bills have been introduced in both houses directing MARAD to scrap the NDRF ships within 5 years. The House bill passed in early 1992. The Senate bill has not been acted upon and is expected to be reintroduced if necessary. In the interim, MARAD has sold most of the Victory ships in NDRF. MARAD has complied with the intent of the recommendation by its continued sales of NDRF ships for scrap. The new DOD Mobility Requirements Study--Bottom-Up Review Update, is expected to be published in late 1994 and will apparently recommend that selected ships be downgraded from the Ready Reserve Force to NDRF. MARAD should continue to scrap all remaining ships in NDRF.

    Matter: GAO believes that the likelihood of the future need for the non-RRF ships is extremely remote. Those ships are neither technologically suitable nor able to be activated and operated efficiently enough to justify their continued retention. Therefore, Congress should consider directing the Maritime Administrator to scrap all of the non-RRF ships, not being held for RRF upgrade or other purposes, as soon as practicable and use the sale proceeds to enhance RRF.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Ships are being scrapped therefore the recommendation is no longer applicable.

    Recommendation: The Maritime Administrator should direct that current non-RRF ship condition information be maintained and that this data be required as a basis for identifying specific ships for upgrade to the RRF or for scrapping.

    Agency Affected: Department of Transportation: Maritime Administration

  2. Status: Closed - Not Implemented

    Comments: Ships are being scrapped therefore the recommendation is no longer valid.

    Recommendation: The Maritime Administrator should establish a formal plan for crewing non-RRF ships, providing assurance that crews would be available when needed. Under this plan, MARAD would: (1) include non-RRF crew requirements in future Reserve Fleet mobilization exercises; and (2) periodically review or test mariners' availability and willingness to crew the entire sealift Reserve Fleet.

    Agency Affected: Department of Transportation: Maritime Administration

  3. Status: Closed - Not Implemented

    Comments: MARAD plans on scrapping these ships and has only 14 Victory ships left to scrap as of August 1994. MARAD and EPA have agreed to stop scrapping NDRF ships until MARAD and EPA can agree on the applicability of specific environmental laws concerning exporting PCB.

    Recommendation: The Maritime Administrator should establish managerial practices that ensure: (1) recommendations of various studies and reports on the non-RRF ships receive prompt attention; (2) ships are preserved and maintained in accordance with existing regulations; and (3) spare parts inventories are complete, current, accurate, and based on established requirements, including proper controls over parts cannibalization.

    Agency Affected: Department of Transportation: Maritime Administration

  4. Status: Closed - Implemented

    Comments: A revision of the Logistics Management Manual was published in the spring of 1992.

    Recommendation: The Maritime Administrator should ensure that policies and procedures are established to ensure removal of needed equipment and parts prior to disposal of Reserve Fleet ships.

    Agency Affected: Department of Transportation: Maritime Administration

 

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