Navy Shipbuilding: Increasing Focus on Sustainment Early in the Acquisition Process Could Save Billions
Fast Facts
About 70% of a ship’s lifecycle costs are operations and maintenance costs.
Maintaining the Navy’s new ships will cost $130 billion more than planned.
We investigated every class of ships the Navy recently built and found 150 examples of systemic maintenance problems. Sailors showed us things like failed engines, faulty electronics, and clogged toilets.
These problems might have been prevented with some attention to future maintenance concerns when designing and building the ships.
We made 11 recommendations to help the Navy focus on maintenance concerns earlier. We suggested that Congress consider enhancing its oversight in this area.
Protective Coating Falling Off a Virginia Class Submarine (missing coating colored red for emphasis)
Navy servicemembes working on a submarine floating on the surface of the water
Highlights
What GAO Found
The Navy has delivered warships—such as aircraft carriers, destroyers, and submarines—to its fleet over the past 10 years that require more effort to sustain than initially planned. In assessing how these classes of ships are sustained, GAO found 150 examples of class-wide problems, such as unreliable ship systems. These problems stemmed from shipbuilding programs not identifying, evaluating, or mitigating sustainment risks during the acquisition process. GAO found that it would cost the Navy $4.2 billion to correct just the 30 percent of these problems for which the Navy had data on estimated repair costs.
Problems Requiring More Sustainment Effort than Planned Across Multiple Ships in a Class
GAO found that shipbuilding programs' requirements for sustainment reflect weaknesses with how Department of Defense (DOD) policy defines these requirements for ships. Sustainment requirements should influence acquisition decisions that determine the sustainability of a ship class, such as the ship's design. However, the Navy's sustainment requirements do not provide key information on how reliable and maintainable mission-critical systems should be and, therefore, cannot adequately inform acquisition decisions.
GAO also found that shipbuilding programs did not consistently address sustainment risks in acquisition planning documents. For example, the operating and support costs included in cost estimates did not capture all sustainment risks that could affect costs or evaluate sensitivity to changing sustainment assumptions, contrary to DOD and Navy cost estimating guidance. As a result, for six shipbuilding programs whose costs GAO could assess, the Navy had underestimated sustainment costs by $130 billion, as shown below.
Operating and Support Cost Estimate Growth for Six Ship Classes
The Navy has begun making some changes to its acquisition oversight process, such as developing sustainment program baselines and adding a sustainment oversight review. While positive, these changes focus on considering sustainment after key decisions are made early in the acquisition process. GAO also found that DOD is not required to provide detailed information about shipbuilding programs' sustainment cost growth to Congress. As such, Congress does not have full insight into the extent of shipbuilding programs' cost growth and why such growth occurred.
Why GAO Did This Study
The U.S. Navy requested over $40 billion each of the last 3 years to build, operate, and sustain its fleet. Acquisition decisions made as ships are developed and built can have a long-term effect on sustainment costs and ship quality.
GAO was asked to assess the extent to which DOD considers and plans for sustainment when acquiring weapons. Among other objectives, this report assesses the extent to which: (1) Navy ship programs deliver ships to the fleet that can be sustained as planned; (2) the Navy develops and uses effective sustainment requirements during acquisition; (3) ship programs are effectively identifying and evaluating sustainment risks in planning documents; and (4) leadership considers programs' sustainment planning and outcomes. GAO reviewed DOD and Navy acquisition policy and guidance, evaluated acquisition plans, collected sustainment metrics, and conducted interviews with more than 100 organizations, including program office and fleet units. GAO assessed 11 classes of shipbuilding programs (all nine that delivered warships during the last 10 years, as well as two newer classes of ships).
Recommendations
GAO is making one matter for Congressional consideration to enhance oversight and 11 recommendations to help DOD and Navy improve ship sustainment. DOD concurred with 8 and partially concurred with 3 recommendations but did not describe specific actions, which GAO believes are necessary to improve sustainment outcomes.
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should consider developing an oversight mechanism for evaluating shipbuilding programs' sustainment cost estimate growth during the acquisition process, with requirements for the Navy to: (1) report sustainment cost estimate growth information to Congress and (2) reassess shipbuilding programs that are experiencing a high level of sustainment cost estimate growth. | In January 2021, Congress passed the William H. (Mac) Thornberry National Defense Authorization Act (NDAA) for fiscal year 2021 which set forth several changes to planning, execution, and oversight of life cycle sustainment activities (Pub L. No. 116-283, § 802, 134 Stat. 3388, 3731 (Jan. 1, 2021)). Among other things, the NDAA requires all covered systems to have an approved life cycle sustainment plan with performance goals, a product support strategy, and affordability constraints on each covered programs' operating and support costs. The NDAA also established critical cost growth parameters of 25 and 50 percent that, if surpassed, will require the program to develop a remediation plan. The NDAA provides the oversight mechanism that will, along with other services, require the Navy to evaluate and report on sustainment cost growth. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense |
Priority Rec.
The Secretary of Defense should change its definition for setting operational availability for ships in its Joint Capabilities Integration and Development System policy by adding information that defines the operational availability requirement by mission area in addition to the ship level and includes all equipment failures that affect the ability of a ship to perform primary missions. (Recommendation 1) |
The Department of Defense (DOD) agreed with GAO's March 2020 recommendation, and officials said they planned to include revisions to the operational availability requirement in a forthcoming update to the Joint Capabilities Integration and Development System policy, which was expected to be completed in 2024. Navy officials told us this has been completed but as of February 2025 we have yet to receive documentation to verify that DOD and Navy's actions meet the recommendation. GAO remains in consistent contact with the Navy and will continue to monitor DOD's efforts. In the meantime, the Vice Chairman of the Joint Chiefs of Staff issued interim guidance in January 2023 directing the Navy to rely on factors other than category 4 casualty reports when establishing the basis for shipbuilding programs' operational requirements. As we found in our March 2020 report, the use of such casualty reports was one of the reasons the requirements did not effectively account for all equipment failures that could affect a ship's ability to perform primary missions.
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| Department of Defense | The Secretary of Defense should change its definition for setting materiel availability for ships in its Joint Capabilities Integration and Development System requirements policy to include all factors that could result in a ship being unavailable for operations, such as unplanned maintenance, unplanned losses, and training. (Recommendation 2) |
The Department of Defense (DOD) agreed with GAO's March 2020 recommendation, and officials said they planned to include revisions to the material availability requirement in a forthcoming update to the Joint Capabilities Integration and Development System policy, which was expected to be completed in 2024. In February 2025, Navy officials told us this has been completed but we have yet to receive documentation to verify that DOD and Navy's actions meet the recommendation. GAO remains in consistent contact with the Navy and will continue to monitor DOD's efforts. In the meantime, the Vice Chairman of the Joint Chiefs of Staff issued interim guidance in January 2023 directing the Navy to rely on factors other than category 4 casualty reports when establishing the basis for shipbuilding programs' operational requirements. As we found in our March 2020 report, the use of such casualty reports was one of the reasons the requirements did not effectively account for all equipment failures that could affect a ship's ability to perform primary missions.
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| Department of the Navy | The Secretary of the Navy should direct the ASN (RD&A) and the CNO, once DOD requirements setting policy is revised, to update existing operational availability requirements for ongoing shipbuilding programs. When revising these requirements, the Navy should set operational availability requirements that: (1) are based on failures that affect the ability of a ship to perform primary missions and (2) are set at the mission level instead of ship level. (Recommendation 3) |
The Department of Defense (DOD) agreed with GAO's March 2020 recommendation, and officials said they planned to include revisions to the operational availability requirement in a forthcoming update to the Joint Capabilities Integration and Development System policy, which was expected to be completed in 2024. In February 2025, Navy officials told us this has been completed but we have yet to receive documentation to verify that DOD and Navy's actions meet the recommendation. GAO remains in consistent contact with the Navy and will continue to monitor DOD's efforts to implement this recommendation and any subsequent Navy action.
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| Department of the Navy | The Secretary of the Navy should direct the ASN (RD&A) and the CNO, once DOD requirements setting policy is revised, to update the materiel availability requirements for ongoing shipbuilding programs. When developing or revising these requirements, the Navy should set materiel availability requirements that fully capture all factors that could preclude a ship from being ready when needed. (Recommendation 4) |
The Department of Defense (DOD) agreed with GAO's March 2020 recommendation, and officials said they planned to include revisions to the material availability requirement in a forthcoming update to the Joint Capabilities Integration and Development System policy, which was expected to be completed in 2024. In February 2025, Navy officials told us this has been completed but we have yet to receive documentation to verify that DOD and Navy's actions meet the recommendation. GAO remains in consistent contact with the Navy and will continue to monitor DOD's efforts to implement this recommendation and any subsequent Navy action.
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| Department of the Navy | The Secretary of the Navy should direct the ASN (RD&A) and the CNO, once the Navy revises its sustainment requirements, to ensure that shipbuilding programs report operational availability and materiel availability requirements in Selected Acquisition Reports, and alternatives to the Selected Acquisition Reports, for Congress. (Recommendation 5) |
The Department of Defense (DOD) agreed with GAO's March 2020 recommendation, and officials said they planned to include revisions to the operational and material availability requirement in a forthcoming update to the Joint Capabilities Integration and Development System policy, which was expected to be completed in 2024. In February 2025, Navy officials told us this has been completed but we have yet to receive documentation to verify that DOD and Navy's actions meet the recommendation. GAO will continue to monitor DOD's efforts to revise the operational availability and materiel availability requirements in its policy and the Navy's subsequent efforts to update the Selected Acquisition Reports (and future alternatives to the Selected Acquisition Reports), as appropriate.
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| Department of the Navy | The Secretary of the Navy should direct the Commander of Naval Sea Systems Command to ensure that cost estimators follow current guidance and GAO-identified best practices and conduct sensitivity analyses and other analyses to improve their assessment of cost risk in the O&S costs in shipbuilding programs' life-cycle cost estimates. (Recommendation 6) |
The Navy agreed with GAO's March 2020 recommendation. In January 2023, Navy officials reiterated their agreement that using risk and sensitivity analyses can help ensure shipbuilding programs' estimates of operating and support (O&S) costs are credible and defensible, and they identified several DOD and Navy policies and guides that require the use of such analyses when developing life-cycle cost estimates. As of March 2023, GAO had reviewed one recent life-cycle cost estimate for a shipbuilding program that incorporated O&S risk and sensitivity analyses, and the Navy was in the process of providing GAO with additional documentation demonstrating their implementation of O&S cost estimating guidance. GAO will continue to monitor the Navy's efforts to implement this recommendation as more information becomes available.
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| Department of the Navy |
Priority Rec.
The Secretary of the Navy should direct the ASN (RD&A) to ensure all shipbuilding programs develop and update LCSPs, in accordance with DOD policy, that demonstrate how a ship class can be affordably operated and maintained while meeting sustainment requirements, including associated business case analyses and identifying sustainment risk. (Recommendation 7) |
The Navy agreed with our recommendation and, in April 2022, updated its acquisition policy to reiterate that all large acquisition programs--such as shipbuilding programs--were required to develop and regularly update a life-cycle sustainment plan (LCSP). The updated policy also clarified which Navy officials were responsible for drafting and approving the LCSP. Additionally, according to existing DOD policy and guidance, LCSPs should include business case analyses and discussions of sustainment risks. Officials stated the Navy plans to update the LCSPs for all of its shipbuilding programs and ensure they include all required elements, as we recommended. However, given the number of LCSPs that need to be updated, officials estimate it will take the Navy several years to complete this effort. As of February 2025, officials stated the Navy was developing a schedule for updating shipbuilding programs' LCSPs. GAO will continue to monitor the Navy's plan to update all shipbuilding program's LCSPs and its actions to ensure any new or revised LCSPs align with policy requirements.
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| Department of the Navy | The Secretary of the Navy should direct the Commander of Naval Sea Systems Command to evaluate and implement changes to the ILA in order to position the ILA to effectively identify key sustainment risks and make recommendations for risk mitigation, which may include existing Navy proposals to change the ILA process. (Recommendation 8) |
The Navy agreed with GAO's March 2020 recommendation and, as of February 20245 officials stated the Navy was taking several steps to improve the ILA process so that such assessments can be used more effectively to identify and mitigate sustainment risks during the acquisition process. For example, officials stated that the Navy is in the process of revising its ILA policies, guidance, and handbook to address deficiencies in the current ILA process. The Navy also plans to update its training to help ensure sustainment performance is more consistently and adequately assessed during ILAs. In addition, officials stated the Navy is developing a database to track deficiencies identified in an ILA until they are resolved. The Navy planned to complete these actions by October 2024 and is in the process of submitting an update. GAO will continue to monitor the Navy's completion of these actions.
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| Department of the Navy | The Secretary of the Navy should direct the ASN (RD&A) and the CNO to ensure sustainment-related briefing topics prescribed by the Navy's acquisition policy are consistently discussed at Gate reviews. (Recommendation 9) |
The Navy agreed with GAO's March 2020 recommendation and, as of March 2023, officials stated the Navy had begun taking steps to address the intent of the recommendation. For example, the Navy established a Deputy Assistant Secretary of the Navy for Sustainment to help ensure sustainment is considered in acquisition decisions, including Gate reviews. The Navy also updated its acquisition policy to implement a new sustainment Gate review at the end of the acquisition process and reiterated existing requirements in the policy for sustainment topics to be discussed during all other Gate reviews. As of March 2023, GAO found that the Navy was more consistently considering sustainment topics during recent Gate reviews. However, all of these recent Gate reviews were for programs already in the late stages of the acquisition process. Since it is critical to consider long-term sustainment planning during the early stages of the acquisition process, as GAO noted in its 2020 report, GAO maintains that the Navy needs to demonstrate a commitment to discussing sustainment at all Gate reviews, including the Gate reviews early in the acquisition process. GAO will continue to monitor the Navy's actions to carry out Gate reviews in alignment with its policy and to confirm that sustainment topics are being discussed during early Gate reviews.
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| Department of the Navy | The Secretary of the Navy should direct the ASN (RD&A) and the CNO to implement the sustainment program baseline initiative for shipbuilding programs and, in so doing, develop a mechanism that ensures that sustainment outcomes are a factor in shipbuilding programs' decision-making during the acquisition process. (Recommendation 10) |
The Navy agreed with GAO's March 2020 recommendation and in April 2022, the Navy updated its acquisition policy to include new direction on the use of sustainment program baselines. According to the updated policy, the sustainment program baseline is a comprehensive tool for continually assessing and managing a program's life-cycle sustainment plans and it contains information on the program's sustainment requirements, funding profile, and risks. However, the Navy's policy does not establish the sustainment program baseline as a requirement for shipbuilding programs, instead categorizing it as a best practice. In July 2023, Navy officials said that 2 of its shipbuilding programs had chosen to use sustainment program baselines but several other programs had chosen not to do so. In February 20245 officials agreed to reconsider making the sustainment program baseline a requirement but had yet to make any further changes to the Navy's acquisition policy. GAO maintains that sustainment program baselines have the potential to increase Navy leadership's insight into programs' sustainment planning and outcomes, and that such baselines should be used from the beginning of the acquisition process by all shipbuilding programs.
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| Department of the Navy | The Secretary of the Navy should revise SECNAVINST 5000.2 and other associated guidance to ensure PSMs are assigned to shipbuilding program offices in time to inform early acquisition decisions, including development of the program's sustainment requirements and LCSPs. (Recommendation 11) |
The Navy agreed with GAO's March 2020 recommendation and in April 2022, the Navy revised its acquisition policy to ensure product support managers would be assigned early in the acquisition process for new shipbuilding programs. According to the updated acquisition policy, product support managers must be appointed at the materiel development decision, which is when the Navy first identifies that a materiel solution is necessary to meet a requirement and it initiates a new program in the acquisition process. The Navy's updated policy will help ensure that product support managers are involved in the acquisition process early enough to influence critical decision making that impacts how a ship will be sustained.
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