Navy Ship Maintenance:

Allocation of Ship Maintenance Work in the Norfolk, Virginia, Area

NSIAD-99-54: Published: Feb 24, 1999. Publicly Released: Feb 24, 1999.

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Pursuant to a congressional request, GAO reviewed the Navy's declining ship maintenance workload, focusing on: (1) the Navy's policies and procedures for allocating ship maintenance work to public and private facilities in the Norfolk area; (2) ship maintenance and modernization funding obligated to the Norfolk Naval Shipyard and private ship repair companies during the fiscal years (FY) 1994 through 1998; and (3) the extent to which the Atlantic Fleet's ship maintenance program has been affected by the movement of funds out of the ship depot maintenance program since FY 1994.

GAO noted that: (1) the Navy's allocation of ship maintenance workload in the Norfolk, Virginia area, is guided by legislative requirements and established policy objectives, such as retaining a certain level of public sector capability, allowing sailors to remain at their home ports when shorter repairs are being done, and achieving economic and efficient public depot maintenance operations; (2) during FY 1994 through FY 1998, private shipyards and repair companies in the Norfolk, Virginia, area received proportionately more funding for ship maintenance work than the Navy's Norfolk Naval Shipyard; (3) among the private sector activities, Newport News Shipbuilding and Drydock Company has received the largest portion of ship maintenance funding in the Norfolk area; (4) funding obligated to other smaller shipyards and repair companies has fluctuated from year to year, with the greatest change occurring in FY 1998 when these companies received proportionately much less of the annual ship maintenance funding than in other years and also received less than initially scheduled by the Navy; (5) this was largely because: (a) the conventional workload that traditionally goes to these companies is declining; (b) scheduled maintenance and operational requirements changed during FY 1998; and (c) four conventional maintenance projects originally scheduled to go to the private sector were reassigned to the Norfolk Naval Shipyard to stabilize and achieve more economical and efficient operations at that public shipyard; (6) the Navy did move appropriated funds from its ship depot maintenance account during FY 1994 through FY 1998; (7) however, the Atlantic Fleet received a slight increase over the amount budgeted for its ship depot maintenance program during this period; and (8) consequently, the movement of ship depot maintenance funds did not reduce the amount of funds provided to the public and private sectors in the Norfolk, Virginia, area.

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