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Naval Shipyards: Actions Needed to Improve Poor Conditions that Affect Operations

GAO-17-548 Published: Sep 12, 2017. Publicly Released: Sep 12, 2017.
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What GAO Found

Although the Navy committed to increased capital investment and developed an improvement plan in 2013, the shipyards' facilities and equipment remain in poor condition. GAO's analysis of Navy shipyard facilities data found that their overall physical condition remains poor. Navy data show that the cost of backlogged restoration and maintenance projects at the shipyards has grown by 41 percent over five years, to a Navy-estimated $4.86 billion, and will take at least 19 years (through fiscal year 2036) to clear. Similarly, a Navy analysis shows that the average age of shipyard capital equipment now exceeds its expected useful life.

Partly as a result of their poor condition, the shipyards have not been fully meeting the Navy's operational needs. In fiscal years 2000 through 2016, inadequate facilities and equipment led to maintenance delays that contributed in part to more than 1,300 lost operational days—days when ships were unavailable for operations—for aircraft carriers and 12,500 lost operational days for submarines (see figure). The Navy estimates that it will be unable to conduct 73 of 218 maintenance periods over the next 23 fiscal years due to insufficient capacity and other deficiencies.

Shipyard Maintenance Delays, Fiscal Years 2000–2016

Shipyard Maintenance Delays, Fiscal Years 2000–2016

Note: Aircraft carrier data are incomplete for fiscal year 2016, and submarine data are incomplete for fiscal years 2014 through 2016. Both will likely be higher once these data are complete.

Though the Navy has developed detailed plans for capital investment in facilities and equipment at the shipyards that attempt to prioritize their investment strategies, this approach does not fully address the shipyards' challenges, in part because the plans are missing key elements. Missing elements include analytically-based goals and metrics, a full identification of the shipyards' resource needs, regular management reviews of progress, and reporting on progress to key decision makers and Congress. For example, the Navy estimates that it will need at least $9.0 billion in capital investment over the next 12 fiscal years, but this estimate does not account for all expected costs, such as those for planning and modernizing the shipyards' utility infrastructure. Unless it adopts a comprehensive, results-oriented approach to addressing its capital investment needs, the Navy risks continued deterioration of its shipyards, hindering its ability to efficiently and effectively support Navy readiness over the long term.T

Why GAO Did This Study

The Navy's four public shipyards—Norfolk Naval Shipyard, Portsmouth Naval Shipyard, Puget Sound Naval Shipyard and Intermediate Maintenance Facility, and Pearl Harbor Naval Shipyard and Intermediate Maintenance Facility—are critical to maintaining fleet readiness and supporting ongoing operations involving the Navy's nuclear-powered aircraft carriers and submarines. The condition of these facilities affects the readiness of the aircraft carrier and submarine fleets. Senate Report 114-255, accompanying a bill for the National Defense Authorization Act for Fiscal Year 2017, included a provision for GAO to examine the capital investment in and performance of the Navy's shipyards. GAO evaluated (1) the state of the naval shipyards' capital facilities and equipment, (2) the extent to which shipyard capital facilities and equipment support the Navy's operational needs, and (3) the extent to which the Navy's capital investment plans for facilities and equipment are addressing shipyard challenges. GAO reviewed data from fiscal years 2000 through 2016 on shipyard capital investment and performance and the age and condition of facilities and equipment; reviewed Navy guidance; visited the shipyards; and interviewed Navy and shipyard officials.


GAO recommends that the Navy develop a comprehensive plan to guide shipyard capital investment, conduct regular management reviews, and report to Congress on progress in addressing the shipyards' needs. DOD concurred with all 3 recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Navy
Priority Rec.
The Secretary of the Navy should develop a comprehensive plan for shipyard capital investment that establishes (1) the desired goal for the shipyards' condition and capabilities; (2) an estimate of the full costs to implement the plan, addressing all relevant requirements, external risk factors, and associated planning costs; and (3) metrics for assessing progress toward meeting the goal that include measuring the effectiveness of capital investments. (Recommendation 1)
The Navy concurred with this recommendation and said it would take steps to develop and implement a comprehensive plan. Naval Sea Systems Command produced a Shipyard Infrastructure Optimization Plan in February 2018 to guide the overhaul and improvement of the naval shipyards. (1) The plan includes some goals for the desired shipyard condition and capabilities including to: recover almost 70 maintenance periods over the next 20 years, modernize capital equipment to industry standards, optimize facilities, and reduce travel time and movement for personnel and materiel during the maintenance process. (2) The report includes a preliminary cost estimate, but work is underway to determine the full costs to address all relevant requirements, risk factors, and planning costs (see GAO-20-64). The plan identifies risks that could increase costs, but does not identify solutions to address those risks. Program officials said they will develop plans to address the risks in subsequent phases of the planning effort. The risks Navy officials identified included historical preservation, environmental regulations, and the need for extra capacity. (3) As of February 2023, the SIOP program office has developed a number of metrics that it intends to use in developing its individual shipyard plans. These included broad attributes such as enhancing mission readiness, providing a safe environment, and enhancing workforce support. They also included more detailed metrics, such as length of maintenance, change in labor days, and amount of travel reduced. The SIOP program office used these metrics to determine its preferred course of action for the Pearl Harbor-specific infrastructure plan, and officials have stated that the program office plans to use these same metrics in all its shipyard-specific plans. This is an encouraging sign, and if the other shipyard-specific plans include these or similar metrics as well, the Navy will be well positioned to implement this recommendation. As of February 2024, the Navy was developing a document that would establish the goals of the SIOP program. They anticipate completing this in September 2024. Additionally, the Navy is developing shipyard-specific plans to guide project development. However, these plans will not be complete until 2026. As a result, the Navy estimates that it will not complete implementation of this recommendation until the end of fiscal year 2026.
Department of the Navy
Priority Rec.
The Secretary of the Navy should conduct regular management reviews that include all relevant stakeholders to oversee implementation of the plan, review metrics, assess the progress made toward the goal, and make adjustments, as necessary, to ensure that the goal is attained. (Recommendation 2)
Closed – Implemented
The Navy concurred with this recommendation and said it would take steps to conduct regular management reviews. To address this recommendation, the Navy issued NAVSEA Notice 5450 in June 2018. This notice established a new program management office responsible for planning, developing, scheduling, budgeting, and sustaining the Shipyard Infrastructure Optimization Plan. In addition, the Assistant Secretary of the Navy for Research, Development, and Acquisition, in September 2018, required this new program office to provide regular updates to an Executive Oversight Council. According to Navy officials, the goal of that council is to have collective semi-annual meetings with all relevant stakeholders. The Navy held their first such meeting in October 2019, which included leadership from the Office of the Secretary of the Navy, Office of Naval Operations, Naval Sea Systems Command, Naval Facilities Command, and Navy Installations Command. In addition, in April 2020, the Vice Chief of Naval Operations issued a memo that required the Shipyard Infrastructure Optimization Plan to provide semiannual briefings on its progress to a Resources and Requirements Review Board, which would review the plan's requirements, resources, and execution. Navy officials held the first of these board meetings in June 2020. Its second meeting was postponed by COVID, but eventually held in January 2021. By creating the program office and requiring regular briefings to the Executive Oversight Council and Resources and Requirements Review Board, the Navy has taken meaningful steps to implement a framework of regular management reviews for the plan. We believe that these actions meet the intent of this recommendation.
Department of the Navy
Priority Rec.
The Secretary of the Navy should provide regular reporting to key decision makers and Congress on the progress the shipyards are making to meet the goal of the comprehensive plan, along with any challenges that hinder that progress, such as cost. This may include reporting on progress to reduce their facilities restoration and modernization backlogs, improve the condition and configuration of the shipyards, and recapitalize capital equipment. (Recommendation 3)
Closed – Implemented
The Navy concurred with this recommendation and said it would take steps to provide regular reporting to key decision makers and Congress. DOD officials stated in October 2018 that the Shipyard Infrastructure Optimization Plan, along with the creation of the Readiness Reform Oversight Council, began to address this recommendation. The Navy provided additional reports to Congress in February and June of 2020, describing specific efforts, such as military construction and capital equipment that would be needed for the Shipyard Infrastructure Optimization Plan. Finally, a mandate in the Fiscal Year 2021 National Defense Authorization Act required the Navy to submit biannual reports to Congress on the status of the Shipyard Infrastructure Optimization Plan through Fiscal Year 2025. The Navy provided an initial status update pursuant to this mandate in September 2020, with a second to follow in May/June 2021. Given the statutory nature and five-year timeframe of this mandate, GAO believes that this meets the intent of this recommendation.

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Equipment maintenanceFacility maintenanceFacility repairsInvestment planningMilitary aircraftMilitary forcesNaval aircraftNavy shipsNaval facilitiesRisk factorsSchedule slippagesShipyardsStrategic planningSubmarinesCost estimates