Aircraft Carrier Dismantlement and Disposal:

Options Warrant Additional Oversight and Raise Regulatory Questions

GAO-18-523: Published: Aug 2, 2018. Publicly Released: Aug 2, 2018.

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Contact:

Shelby S. Oakley
(202) 512-4841
OakleyS@gao.gov

 

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(202) 512-4800
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Dismantling and disposing of the ex-USS Enterprise nuclear aircraft carrier may cost the Navy more than $1 billion.

We found that typical budget and reporting on dismantlement and disposal does not give enough information to support oversight for a project of this size and cost. We recommended the Navy provide additional budget information and reporting for the project.

We also found that using commercial industry to dismantle and dispose of the aircraft carrier may offer many benefits to the Navy. At present, a regulatory disagreement between agencies hampers this possibility. We suggested that Congress consider action to resolve this.

 

USS Enterprise (CVN-65) turns after launching an aircraft.

USS Enterprise (CVN-65) turns after launching an aircraft.

Additional Materials:

Contact:

Shelby S. Oakley
(202) 512-4841
OakleyS@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

The Navy is assessing two options to dismantle and dispose of its first nuclear-powered aircraft carrier—ex-USS Enterprise (also known as CVN 65). CVN 65 dismantlement and disposal will set precedents for processes and oversight that may inform future aircraft carrier dismantlement decisions.

Characteristics of the Navy's Potential CVN 65 Dismantlement and Disposal Options

 

Naval shipyard option

Full commercial option

General approach

Puget Sound Naval Shipyard dismantles a distinct section of the ship—the propulsion space section—that contains the 8 defueled reactors and all other nuclear-related material

Shipyard prepares reactor packages for transport and disposal at facility in Hanford, Washington

Commercial company dismantles and recycles or disposes of non-nuclear sections

Commercial company(ies) dismantles entire ship; potential companies and work locations yet to be determined

Nuclear-related dismantlement uses applicable industry work practices—may include cutting into smaller components for shipping; disposal site(s) yet to be determined

Commercial company recycles or disposes of non-nuclear portions

Navy preliminary cost estimate (dollars)

1.05 billion-1.55 billion

750 million-1.4 billion

Navy preliminary schedule estimate

10 years, 2034 start

About 5 years, 2024 start

Nuclear regulatory authority

Naval Reactors (Department of Energy)

Disagreement exists between Naval Reactors and Nuclear Regulatory Commission

Source: GAO analysis of Navy and Nuclear Regulatory Commission information. | GAO-18-523

The Navy could rely on its extensive regulatory experience for the naval shipyard option. However, the Navy's ability to effectively evaluate the full commercial option is hampered by a disagreement with the Nuclear Regulatory Commission (NRC), which oversees the commercial nuclear industry. Naval Reactors officials assert that NRC's regulatory authority should apply to the full commercial option. NRC disagrees with this position. Coordination between the two agencies to identify the applicable regulatory authority and craft a regulatory plan would help ensure accountability, solidify cost estimates, and facilitate a CVN 65 decision.

The budget documentation and reporting that the Navy typically uses for ship dismantlement and disposal projects will not enable adequate oversight of CVN 65—a multi-year project with a cost that may exceed $1 billion. The documents that support Navy budget requests for dismantlement and disposal funding do not provide data that decision makers can readily use to track dismantlement costs against an established baseline or to evaluate funding plans for future years. Further, the Navy has no reporting requirements to support accountability for CVN 65 activities. Large defense acquisition programs generally are required to submit more detailed budget information and report on cost, schedule, and performance. These practices could be adapted for CVN 65 to provide information that will facilitate oversight commensurate with the scale of the effort.

Why GAO Did This Study

The Navy is planning to dismantle and dispose of CVN 65 after 51 years of service. In 2013, the estimated cost to complete the CVN 65 work as originally planned increased to well over $1 billion, leading the Navy to consider different dismantlement and disposal options.

The Senate Report accompanying a bill for the National Defense Authorization Act for Fiscal Year 2018 included a provision for GAO to review the Navy's plans for CVN 65. This report addresses (1) dismantlement and disposal options under consideration; (2) nuclear regulatory authority considerations; and (3) funding and reporting practices.

GAO reviewed budget, cost, and schedule documentation, as well as applicable laws, regulations, executive orders, policies, and guidance. GAO interviewed officials from the Navy and commercial companies about the dismantlement and disposal options, and NRC and state agencies about regulatory considerations.

What GAO Recommends

Congress should consider requiring Naval Reactors to coordinate with NRC to identify the applicable regulatory authority for a CVN 65 commercial dismantlement and disposal. GAO is also making four recommendations, including that the Navy take action to provide additional budget information and reporting to facilitate improved transparency and accountability for the CVN 65 cost, schedule, and risks. The Department of Defense agreed with all four recommendations.

For more information, contact Shelby S. Oakley at (202) 512-4841 or OakleyS@gao.gov.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Congress responded to this matter on August 13, 2018, as part of the Fiscal Year 2019 National Defense Authorization Act. Specifically, the act requires the Secretary of the Navy to submit a report to the congressional defense committees with a description of the regulatory framework applicable to the management of radioactive materials in connection with the dismantlement and disposal of nuclear-powered aircraft carriers. This report is to include, in cases in which the Navy intends to have another government entity serve as the regulatory enforcement authority a certification from that entity of its agreement to serve as the regulatory enforcement authority and a description of the legal basis for the authority of that entity to serve as the regulatory enforcement authority.

    Matter: Congress should consider requiring Naval Reactors to coordinate with the Nuclear Regulatory Commission for any CVN 65 dismantlement and disposal performed commercially to identify the applicable regulatory authority. In the event that an entity other than Naval Reactors will serve as the regulatory authority, Naval Reactors should submit to Congress a plan that identifies the regulatory authority for CVN 65 activities, and includes acknowledgement from that regulatory entity of its agreement with Naval Reactors and the legal basis for its authority. If the regulatory entity is an agreement state, such acknowledgment should be coordinated with the Nuclear Regulatory Commission. (Matter 1)

Recommendations for Executive Action

  1. Status: Open

    Comments: The Department of Defense agreed with this recommendation, stating that the Navy would develop and submit additional cost, schedule, and contract information to supplement existing budget exhibits and continue this reporting through completion of the CVN 65 dismantlement and disposal. Congress subsequently addressed our recommendation to the department as part of the Fiscal Year 2019 National Defense Authorization Act enacted on August 13, 2018. Specifically, the act requires the Secretary of the Navy to include information on each dismantlement and disposal of a nuclear-powered aircraft carrier occurring or planned to occur during the period of the future years defense program submitted to Congress with that budget. For each ship, this includes (1) a summary of activities and significant developments in connection with the dismantlement and disposal; (2) a detailed description of cost and schedule performance against the baseline for the dismantlement and disposal, including a description of and explanation for any variance from such baseline; and (3) a description of the funding amounts requested, or expected to be requested, for the dismantlement and disposal for prior, current, and future fiscal years. The Navy currently anticipates making a decision on its CVN 65 dismantlement and disposal plans in 2023. We will continue to monitor the Navy's activities in order to document any action taken to implement this recommendation.

    Recommendation: The Secretary of Defense should ensure that the Navy provides additional information in the annual President's budget exhibits associated with CVN 65 dismantlement and disposal to facilitate improved transparency and accountability. Additions should, at a minimum, include the CVN 65 funding estimate across the Future Years Defense Program, activities planned or performed for applicable fiscal years, tracking of total cost and high level changes in cost and schedule from the prior year with explanations for changes, and if applicable, contract type, awardee, award value, and award and completion date estimates. (Recommendation 1)

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: The Department of Defense agreed with this recommendation and stated that the Navy would obtain independent cost estimates through the Office of Cost Analysis and Program Evaluation for both the naval shipyard and full commercial CVN 65 dismantlement and disposal options before a final decision is made on which option the Navy will pursue. The Navy anticipates that a decision on the CVN 65 dismantlement and disposal approach will be made in 2023 following the completion of an environmental impact statement. We will continue to monitor the status of independent cost estimate activities for CVN 65 until the estimates have been completed.

    Recommendation: The Secretary of Defense should require the Navy to obtain an independent cost estimate, performed by DOD's Office of Cost Analysis and Program Evaluation or the Naval Center for Cost Analysis, for both the naval shipyard and full commercial options before choosing a dismantlement and disposal approach for CVN 65. (Recommendation 2)

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: The Department of Defense agreed with this recommendation and stated that the Navy would prepare a risk management plan for the CVN 65 dismantlement and disposal before the award of a contract or the provision of funds. The Navy anticipates that a decision on the CVN 65 dismantlement and disposal approach will be made in 2023 following the completion of an environmental impact statement. We will continue to monitor the Navy's efforts to complete a risk management plan as the department works toward a decision for the CVN 65 dismantlement and disposal.

    Recommendation: The Secretary of Defense should require the Navy to complete a risk management plan prior to beginning the CVN 65 dismantlement and disposal. (Recommendation 3)

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: The Department of Defense agreed with this recommendation and stated that the Navy would prepare and approve a cost and schedule baseline for the CVN 65 dismantlement and disposal before the award of any contract or the provision of funds for the effort. Congress subsequently addressed our recommendation to the department on August 13, 2018, as part of the Fiscal Year 2019 National Defense Authorization Act. Specifically, the act requires the Secretary of the Navy to provide a report to the congressional defense committees that provides a cost and schedule baseline for the dismantlement and disposal of nuclear powered aircraft carriers approved by Navy leadership. The Navy currently anticipates making a decision on its CVN 65 dismantlement and disposal plans in 2023. We will continue to monitor the Navy's activities in order to document any action taken to implement this recommendation.

    Recommendation: The Secretary of Defense should require the Navy to approve a cost and schedule baseline prior to beginning the CVN 65 dismantlement and disposal. (Recommendation 4)

    Agency Affected: Department of Defense

 

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