Late Deliveries of Large, Medium Speed Roll-On/Roll-Off Ships
NSIAD-97-150, Jun 16, 1997
GAO reviewed the Navy's progress in acquiring 19 large, medium speed roll-on/roll-off (LMSR) ships, focusing on: (1) the Navy's efforts to deliver LMSR conversion and new construction ships on schedule and the impact of any delays on the Army meeting its prepositioning afloat requirements; (2) the capability of the LMSR conversion ships to adequately perform their mission; (3) the level of crewing for the LMSR ships; and (4) increases in LMSR procurement costs.
GAO noted that: (1) as of May 1997, four of the five LMSR conversion ships were delivered 16 to 20 months late and the remaining ship is 24 months behind schedule; (2) the delays in conversion ships are due to both government and contractor problems; (3) late deliveries of the new construction ships are due to labor strikes and similar problems experienced in the conversions; (4) additionally, inadequate controls in the material management systems at all three shipyards could result in further schedule delays; (5) these delays will cause the Army to rely on smaller, less capable ships and to incur an estimated $18.5 million additional cost in operations and maintenance funds over 3 years ending fiscal year (FY) 1998; (6) the number of major deficiencies identified on the four delivered conversion ships has decreased since the first delivery; (7) the final performance issue, the inability of the cargo discharge system to remove water from cargo areas, was corrected and cleared by the Coast Guard after testing in mid-May 1997; (8) also, the Navy operational testers identified the inability of the first conversion ship to sustain a speed of 24 knots; it averaged a maximum speed of 23.665 knots; (9) Department of Defense (DOD) officials said that the older LMSR conversion ships would likely require increased maintenance; (10) the Military Sealift Command, through its ship manager, plans to crew the five conversion ships at the minimum levels required by the Coast Guard plus four additional crewmembers to manage and perform food service and housekeeping duties for a total of 26 crewmembers; (11) minimum crewing is a cost-saving measure several ship operating companies use, but it may not provide the crew levels necessary for adequate ship maintenance; (12) according to Military Sealift Command officials, the ship operating company will use industrial assistance workers to augment the permanent crew for ship maintenance and repair; (13) the LMSR conversion and new construction ships have had a net cost increase of about $131.5 million as result of schedule delays; (14) the five conversion ships have experienced a total cost increase of about $173.3 million; (15) the new construction ships have experienced a cost decrease of about $41.8 million, which can primarily be attributed to a change in price indexes issued by the Office of Management and Budget; and (16) despite the net increase, Navy cost projections show a downward trend in ship cost through delivery of the last ship in FY 2001.
- Review Pending
- Closed - implemented
- Closed - not implemented
Recommendations for Executive Action
Recommendation: The Defense Contract Audit Agency has identified long-standing deficiencies in the material management and accounting systems at all three LMSR shipyard contractors. It believes these system deficiencies could affect the delivery schedule for LMSR ships. While DOD officials acknowledge the deficiencies, they do not believe they have had an effect on the delivery schedule. Given that there is valid concern that these system deficiencies could affect the delivery schedule for the LMSR ships, the Secretary of Defense should direct the Secretary of the Navy to resolve these deficiencies expeditiously to minimize the potential for additional delays.
Agency Affected: Department of Defense
Status: Closed - Not Implemented
Comments: Efforts were made by shipyards to demonstrate compliance with material management for DCAA follow-up. DOD took no action and considers the case closed.
Recommendation: To minimize any potential operational impacts to DOD fulfilling its sealift requirements, the Secretary of Defense should direct the Secretary of the Navy to resolve the issue of the USNS Shughart's inability to maintain the required speed of 24 knots when loaded. The Secretary of the Navy should provide the results of this issue to the Army's logistics planners for use in developing their transportation plans.
Agency Affected: Department of Defense
Status: Closed - Implemented
Comments: This recommendation is being closed after extensive discussions with DOD which shows compliance.