Aircraft Carrier Dismantlement and Disposal: Options Warrant Additional Oversight and Raise Regulatory Questions
Fast Facts
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.
Highlights
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
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Naval shipyard option |
Full commercial option |
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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 |
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Navy preliminary cost estimate (dollars) |
1.05 billion-1.55 billion |
750 million-1.4 billion |
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Navy preliminary schedule estimate |
10 years, 2034 start |
About 5 years, 2024 start |
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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.
Recommendations
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.
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| 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) |
Closed – Implemented
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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. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | 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) |
Open – Partially Addressed
The Department of Defense agreed with this recommendation but, as of August 2023, has yet to complete all actions to implement it. Congress addressed our recommendation to the department as part of the enacted National Defense Authorization Act for Fiscal Year 2019 by requiring that the Secretary of the Navy 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 for as part of the President's budgets submitted to Congress. 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's President's budget submission for fiscal year 2024 included a budget exhibit for CVN 65, which indicated that the inclusion of full cost information was pending a decision on the preferred dismantlement and disposal approach. In August 2023, a Naval Reactors official stated that required budgetary information on the CVN 65 dismantlement is anticipated to be provided beginning in the President's budget submission for fiscal year 2025. This timeline is contingent on the Navy finalizing the record of decision for the CVN 65 Environmental Impact Statement in fall 2023 as expected. We will continue to monitor the implementation of this recommendation until the Navy includes the full CVN 65 information in its budget submission.
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| Department of Defense | 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) |
Closed – Implemented
The Department of Defense agreed with this recommendation and stated that the Navy would obtain an independent cost estimate through the Office of Cost Assessment and Program Evaluation (CAPE) 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. In August 2023, a Naval Reactors official provided an assessment performed by CAPE of cost estimates for the naval shipyard and full commercial CVN 65 dismantlement and disposal options. The Naval Reactors official stated that these estimates and CAPE's assessment of them informed the Environmental Impact Statement and Record of Decision process for CVN 65's dismantlement and disposal. For the commercial option, CAPE assessed an independent cost estimate for the commercial dismantlement approach completed by the Center for Naval Analyses in conjunction with a nuclear dismantlement industry analysis firm. For the naval shipyard option, CAPE assessed an updated cost estimate from Puget Sound Naval Shipyard for dismantlement and disposal of CVN 65 by the naval shipyard. CAPE's assessment stated that the methodologies used for the cost estimates completed for both dismantlement and disposal options are consistent with best practices. The assessment also stated that once a final decision is made-anticipated in fall 2023-on whether CVN 65 will be dismantled and disposed of commercially or by the naval shipyard, CAPE will complete an independent cost estimate of the selected dismantlement and disposal approach. Since CAPE assessed both the commercial approach and the naval shipyard options , and plans to conduct an independent cost estimate for the dismantlement and disposal option the Navy selects for CVN 65, we believe the overall cost estimation approach used by CAPE and the Navy is consistent with the intent of our recommendation. As a result, we are closing this recommendation as implemented.
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| Department of Defense | 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) |
Open
The Department of Defense agreed with this recommendation but, as of July 2023, has yet to complete actions to implement it. In July 2023, a Naval Reactors official stated that a risk management plan cannot be completed prior to the final record of decision for the CVN 65 Environmental Impact Statement, which is anticipated in fall 2023. The official added that a risk management plan will be developed by the Navy's Program Executive Office for Aircraft Carriers once the final decision is reached for the dismantlement and disposal approach. The plan--estimated to be completed in 2024, or prior to contract solicitation--is expected to be informed by cost estimation efforts previously coordinated with the Office of Cost Assessment and Program Evaluation within the Office of the Secretary of Defense. The Naval Reactors official stated the plan is also expected to be informed by third party estimates supporting prior business case analysis work, industry information days, the final Environmental Impact Statement, public scoping and awareness events, and other cost and execution factors associated with risk management planning. We will continue to monitor the Navy's efforts to complete a risk management plan for the CVN 65 dismantlement and disposal.
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| Department of Defense | 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) |
Open
The Department of Defense agreed with this recommendation but, as of July 2023, has yet to complete actions to implement it. Congress addressed our recommendation to the department as part of the National Defense Authorization Act for Fiscal Year 2019 by requiring the Secretary of the Navy to provide a report to the congressional defense committees that includes a cost and schedule baseline for the dismantlement and disposal of nuclear powered aircraft carriers approved by Navy leadership. In July 2023, a Naval Reactors official confirmed that a cost and schedule baseline will be developed and approved prior to beginning the CVN 65 dismantlement and disposal. The official said that the cost and schedule baseline will be informed by the risk management plan that is expected to be finalized in 2024 and cost estimates coordinated with the Office of Cost Assessment and Program Evaluation within the Office of the Secretary of Defense. We will continue to monitor the Navy's efforts to approve a cost and schedule baseline prior to beginning the CVN 65 dismantlement and disposal.
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