The Fleet Modernization Program:

Still Room for Improvement

PLRD-82-65: Published: Jun 14, 1982. Publicly Released: Jun 14, 1982.

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In response to a congressional request, GAO evaluated the Navy's fleet modernization program.

The Navy often fails to follow its guidelines concerning the management of its fleet modernization program. As a result, many ship alterations are deferred and data for cost estimates are not available. In addition, the Navy does not always properly order material for the program, resulting in unnecessary procurements. GAO determined that the Navy deferred about 35 percent of its fiscal year 1980 congressionally budgeted alterations. Over half of these occurred because ship overhauls were rescheduled, and the rest were deferred because: funds were needed to perform unscheduled emergency alterations, onhand material was insufficient, and plans and drawings were late. Since program managers frequently did not follow the guidelines, critical milestones were missed, some alterations had to be deferred while still in the planning stage, and data for cost estimates were not always available. GAO believes that the Navy could improve its budget cost estimates if it would use the actual costs for previous alterations to assess the reasonableness of shipyards' cost estimates. The Navy is taking steps to improve the visibility of ship alteration material at the wholesale and shipyard levels. However, more could be done to improve the effectiveness of material management and to reduce material costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should direct shipyard managers to provide supply system managers with visibility over shipyard assets and direct the use of these assets to avoid expensive direct delivery procurements.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should direct shipyard commanders to: (1) emphasize the importance of using assigned planned requirement numbers because of the overstated requirements and unnecessary procurements that result; (2) instruct material managers not to order material before alteration plans and drawings are sufficiently developed to define material requirements; and (3) direct material managers to cancel requisitions on the supply system when they initiate commercial procurement actions.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should require that budget developers use actual cost information from previously completed alterations when developing alteration cost estimates.

    Agency Affected: Department of Defense: Department of the Navy

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should more strictly enforce the requirement that both public and private shipyards submit ship departure reports within the required 60 days after overhaul completion.

    Agency Affected: Department of Defense: Department of the Navy

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should direct the Commander of the Naval Sea Systems Command to establish a system of exception reporting for alterations which do not meet development milestones.

    Agency Affected: Department of Defense: Department of the Navy

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should institute controls to ensure that program managers follow Naval instructions on alteration development milestones and program only those alterations which can be fully developed to support scheduled installations.

    Agency Affected: Department of Defense: Department of the Navy

  7. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should direct shipyard managers to release, for systemwide and immediate use, assets which will not be needed in the near future and which can readily be replaced.

    Agency Affected: Department of Defense: Department of the Navy

 

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