Navy Relocation:

Transfer of the Naval Explosives Development Engineering Department

NSIAD-89-176BR: Published: Aug 17, 1989. Publicly Released: Aug 25, 1989.

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Pursuant to a congressional request, GAO reviewed the Navy's studies supporting the proposed transfer of the Naval Explosives Development Engineering Department (NEDED) from the Naval Weapons Station in Yorktown, Virginia, to the Naval Ordnance Station in Indian Head, Maryland.

GAO found that the Navy: (1) cited business consolidation and improved leadership and supervision as the primary reasons for its May 1987 decision to relocate NEDED; (2) estimated potential savings of about $10.3 million over 30 years resulting from the cancellation of some military construction projects, reduced capital equipment purchases, increased productivity, and reduced personnel and base operating costs; (3) expected to incur about $2.3 million in building renovation and moving costs; (4) agreed that it had accomplished most of its main objectives through an administrative transfer in June 1988, but continued to plan to complete the physical move during fiscal year 1993, after awarding a $300,000 architectural and engineering contract; (5) did not always use the best available source data for its cost effectiveness analysis, since an analysis using the best available data identified potential savings of about $7.1 million; (6) based $3.2 million of its projected savings on the construction of a continuous processing facility, although low prioritization and fiscal constraints made such construction unlikely; and (7) did not consider options involving maintaining separate operations at each location or leaving NEDED at Yorktown, as a detachment of Indian Head.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Navy plans to award an architectual and engineering contract in June 1990. The scope of this study has been reduced from the "full design" study cited in the report. This "concept study" is expected to cost about $30,000. Towards the end of the year, after this study is completed, the Navy should decide if NEDED operations, in whole or part, will be relocated to Indian Head, Maryland.

    Recommendation: In view of lower estimated potential savings, likely fiscal constraints, and the resulting uncertainty that the physical move will take place, the Secretary of the Navy should reconsider the need for awarding an architectural and engineering contract to study the costs involved in moving NEDED to Indian Head until the likelihood of a move is more certain.

    Agency Affected: Department of Defense: Department of the Navy


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