Navy Ship Construction Contracts

T-NSIAD-88-9: Published: Dec 8, 1987. Publicly Released: Dec 8, 1987.

Additional Materials:


Office of Public Affairs
(202) 512-4800

GAO discussed selected Navy ship construction contracts, focusing on whether the: (1) Navy could actually execute the contracts within its funding limits; (2) awards would result in future claims against the government; (3) Navy planned to take any action to address current and future claims against it; and (4) Navy provided effective contract oversight. GAO found that: (1) although the Navy's competitive procurement policy generally resulted in lower prices, it also resulted in cost overruns because of poor labor productivity and inefficiencies at some shipyards; (2) the Navy projected cost overruns of about $1.4 billion for 19 of the 22 contracts reviewed, of which it would have to fund about $706 million; (3) optimistic bidding and unrealistic production and low labor estimates were the principal causes of overruns; and (4) the Navy implemented claims avoidance or prevention programs to track contractor performance. GAO also found that: (1) although shipbuilders are generally in favor of competitive procurement and fixed-price contracts, they believe that the process could adversely affect the already weak shipbuilding industry because it forces them to bid aggressively; and (2) although the Navy emphasized price in evaluating the contracts, it did consider technical and management factors.

Mar 13, 2018

Feb 28, 2018

Feb 16, 2018

Feb 15, 2018

Feb 6, 2018

Jan 31, 2018

Jan 18, 2018

Jan 10, 2018

Looking for more? Browse all our products here