Naval Shipyards:

Management of Borrowed Labor Can Be Enhanced by Stronger Internal Controls

NSIAD-87-188: Published: Sep 23, 1987. Publicly Released: Oct 28, 1987.

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In response to a congressional request, GAO reviewed naval shipyards' use of borrowed labor to determine: (1) the extent to which shipyards borrowed from one another; (2) whether the shipyards prepared adequate documentation to justify borrowing; and (3) whether internal controls concerning guidance and oversight of borrowed labor were adequate.

GAO found that: (1) the total cost for borrowed labor for fiscal years 1983 through 1986 was $119.3 million; (2) shipyards generally did not perform cost comparisons of the alternatives for temporary shortages; (3) the Navy had no written guidance on managing borrowed labor; and (4) the Navy eliminated its borrowed-labor reporting requirement because it did not use the data and did not consider them useful.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: Based on this recommendation, the Navy, on August 24, 1988, reissued NAVSEA Instruction 12460.1A, which sets forth the policy and procedures regarding the borrowing and loaning of personnel between naval shipyards to meet temporary skill shortages.

    Recommendation: The Secretary of the Navy should direct the Commander, Naval Sea Systems Command, to issue guidance on how naval shipyards should relieve temporary labor shortages at the least cost to the government, setting out: (1) criteria for using various labor resources, including borrowing labor; (2) documentation requirements, including cost comparisons, justifying their use; and (3) data collection and reporting requirements.

    Agency Affected: Department of Defense: Department of the Navy


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