Navy Regional Maintenance:

Substantial Opportunities Exist to Build on Infrastructure Streamlining Progress

NSIAD-98-4: Published: Nov 13, 1997. Publicly Released: Nov 13, 1997.

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Pursuant to a congressional request, GAO reviewed the Navy Regional Maintenance (RM) Program, focusing on the: (1) progress made in implementing the program; (2) savings that have been achieved; (3) opportunities for additional savings; and (4) barriers that inhibit full implementation of the program and achievement of projected savings.

GAO noted that: (1) the Navy has made progress in achieving its infrastructure streamlining objective, but it has not been as great as anticipated and challenges remain for accomplishing future plans; (2) to implement the infrastructure streamlining objective, the Navy established steering committees, initiated a phased execution plan, identified a regional structure, and developed business plans; (3) through fiscal year (FY) 1996, the Navy identified 102 initiatives, 55 of which had been started by the end of FY 1997, and 47 of which are to be implemented between FY 1998 and 2001; (4) the Navy projected that its 102 initiatives would save about $944 million, of which $198 million was expected to accrue during FY 1994 to 1997 and $746 million was expected to accrue during FY 1998 to 2001; however, some of the initiatives are not progressing as projected; (5) the Navy cannot identify actual savings achieved because its accounting system does not track RM Program costs and related savings, and the Navy did not establish an independent system to track these costs and related savings; (6) the Navy has opportunities to build on its progress by working to achieve the $746 million in expected savings during FY 1998 to 2001, moving more quickly to implement savings initiatives, and pursuing other opportunities with high potential for significant savings; (7) the Navy identified many of its savings initiatives as high risk because of barriers to implementation; (8) the Navy faces parochial and institutional resistance to the RM Program's objectives and has other complex issues to resolve; (9) the biggest hurdle to overcome may be resistance to initiatives that eliminate organizations, reduce jobs and promotions, or reduce a command's or organization's control over resources; (10) other barriers are: (a) the lack of management visibility over all maintenance related costs; (b) multiple, unconnected management information systems that do not provide adequate data for regional maintenance planning and decisionmaking; and (c) the large number of shore positions desired to support the sea-to-shore rotation program compared to the smaller number needed to perform the intermediate maintenance workload; and (11) visible commitment by the Chief of Naval Operations (CNO) is critical to overcome resistance, accelerate decisionmaking, and provide the necessary resources and coordination needed for efficient and effective program implementation.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Follow-up work on this recommendation is or will be accomplished through current and future audits of various RMC Program issues.

    Recommendation: The Secretary of Defense should direct the Secretary of the Navy to annually report on the RM Program initiatives identified, savings achieved that have been verified in Navy budget and accounting records, and the progress made to overcome the barriers to achieving infrastructure reductions and savings.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: Follow-up work on this recommendation is or will be accomplished through current and future audits of various RMC Program issues.

    Recommendation: The Secretary of Defense should direct the Secretary of the Navy to establish program implementation plans and tie them to milestones, with regular reporting to the Chief of Naval Operations.

    Agency Affected: Department of Defense

 

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