Navy Shipbuilding: Increasing Supervisors of Shipbuilding Responsibility Could Help Improve Program Outcomes
The Navy often accepts delivery of incomplete ships after significant delays in construction and considerable cost growth.
At major shipyards, the Navy has an onsite organization—the Supervisors of Shipbuilding, Conversion, and Repair—that's responsible for overseeing construction and managing shipbuilding contracts. The Supervisors' expertise provides foresight into shipbuilding problems, but we found the Navy isn't taking full advantage of it.
Among other things, we recommended ensuring that the Supervisors are consistently represented earlier in the shipbuilding process, starting before contracts are awarded.
A crane moves the lower stern into place on an aircraft carrier.
What GAO Found
Over the past decade, GAO found that the U.S. Navy has faced significant challenges in meeting its shipbuilding goals, experiencing years of construction delays, billions of dollars in cost growth, and frequent quality and performance shortfalls. The Supervisors of Shipbuilding, Conversion and Repair (SUPSHIP) serve as the Navy's on-site technical, contractual, and business authority for the construction of Navy vessels at major private shipyards. The SUPSHIPs are responsible for evaluating the construction and business practices of Navy shipbuilders, but face challenges in improving shipbuilding results (see figure).
Factors Limiting the Ability of the Navy's Supervisors of Shipbuilding, Conversion and Repair (SUPSHIP) to Help Improve Shipbuilding Program Results
These challenges impede the SUPSHIPs' effectiveness and accountability in a number of ways:
- Variation in quality requirements across Navy shipbuilding contracts hinders the SUPSHIPs' ability to provide consistent oversight of shipbuilding quality.
- Limited input from the SUPSHIPs prior to contract awards does not leverage their expertise to support well-informed decision-making.
- Omission of SUPSHIP reporting from the Navy's process for approving acceptance of ships from the shipbuilders reduces accountability and misses opportunities to ensure that independent SUPSHIP input on ship quality and readiness informs this key decision.
- The SUPSHIPs' position within the Naval Sea Systems Command and their accountability to different technical and acquisition organizations dilutes their ability to be a distinct, authoritative voice in decision-making for Navy shipbuilding programs. Congress passed legislation in December 2021 to establish a Deputy Commander dedicated to the SUPSHIPs, which should help improve their authority and accountability.
Why GAO Did This Study
Despite the efforts of the SUPSHIPs and others to assure construction quality and contract execution, Navy shipbuilding results have regularly fallen short of program expectations. These results have raised questions about the Navy's ability to effectively oversee shipbuilder performance throughout the construction of new ships.
Congress included a provision in a Senate report for GAO to review the SUPSHIPs' oversight efforts. GAO examined, among other objectives, the SUPSHIPs' role in assuring shipbuilding quality and any challenges that limit their ability to help improve shipbuilding program results.
To do this work, GAO reviewed federal regulations as well as policy, guidance, and reporting related to the SUPSHIPs' oversight activities and results. GAO also interviewed DOD and Navy officials about shipbuilding oversight and the SUPSHIPs' role in the execution of shipbuilding programs.
Recommendations
GAO is making five recommendations to the Navy, including that it take steps to ensure regular use of its quality program standard in shipbuilding contracts; provide the SUPSHIPs with direct representation in evaluation and decision-making processes prior to contract awards; and require the SUPSHIPs to report on the quality and readiness of each ship prior to the Chief of Naval Operations' approval decisions for ship acceptance. The Navy agreed with all five recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Navy | The Secretary of the Navy should determine if the Naval Sea Systems Command's Quality Program Standard for Construction of Naval Vessels requires any updates and then take steps to ensure regular use of the standard in Navy shipbuilding contracts. (Recommendation 1) |
The Department of the Navy concurred with this recommendation but, as of July 2022, has not yet demonstrated actions to implement it. The Navy stated that, by the end of 2022, the Naval Sea Systems Command will review the validity of the previously developed Quality Program Standard for Construction of Naval Vessels, make revisions if necessary, and distribute the standard with applicable Program Executive Offices for consideration in future contracts. We believe that the Navy's plans align with the intent of our recommendation, but we will continue to monitor implementation to ensure that the Navy's actions support regular use of a quality standard by its shipbuilding programs.
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| Department of the Navy | The Secretary of the Navy should evaluate whether opportunities exist for additional targeted oversight by the SUPSHIPs of critical government-furnished equipment away from the shipyards to support improvements to overall shipbuilding results. (Recommendation 2) |
The Department of the Navy concurred with this recommendation but, as of July 2022, has yet to demonstrate actions to implement it. The Navy stated that, by the end of 2022, it intends to establish a working group led by Program Executive Offices to evaluate whether additional oversight of critical non-nuclear government-furnished equipment is required by the Supervisors of Shipbuilding, Conversion and Repair to improve shipbuilding results. The Navy also stated that it would implement actions resulting from the working group by the end of 2023. We believe that the Navy's plans align with the intent of our recommendation, but we will continue to monitor implementation to ensure that the Navy evaluates potential opportunities for additional targeted oversight for critical government-furnished equipment.
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| Department of the Navy | The Secretary of the Navy should ensure that, prior to contract award decisions, the Naval Sea Systems Command evaluates the extent to which awarding a shipbuilding contract to a prime contractor that is not the shipbuilder presents additional government risk related to contractor business systems compliance and determine options, as needed, to mitigate the risk. (Recommendation 3) |
The Department of the Navy concurred with this recommendation but, as of July 2022, has yet to demonstrate actions to implement it. The Navy stated that, by the end of 2022, Naval Sea Systems Command will ensure Program Managers and Contracting Officers are educated on the importance of evaluating the extent to which awarding a shipbuilding contract to a prime contractor that is not the shipbuilder presents additional government risk related to contractor business systems compliance and determining options, as needed, to mitigate the risk. The Navy stated that regularly-published communications will be used to raise awareness of this key acquisition planning consideration. We believe that the Navy's plans align with the intent of our recommendation, but we will continue to monitor implementation to ensure that the Navy's efforts support regular consideration of contractor business systems when awarding shipbuilding contracts to shipbuilders that are not prime contractors.
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| Department of the Navy | The Secretary of the Navy should ensure that Naval Sea Systems Command Instruction 5450.36C, Mission, Functions, and Tasks of the Supervisors of Shipbuilding, Conversion and Repair, United States Navy, is updated to provide the SUPSHIPs direct representation in the evaluation and decision-making processes for all shipbuilding programs, beginning with the pre-contract award stages of requirements development and ship design. (Recommendation 4) |
The Department of the Navy concurred with this recommendation but, as of July 2022, has yet to demonstrate actions to implement it. The Navy stated that, by the end of 2023, the Commander of Naval Sea Systems Command will publish an updated Instruction 5450.36C that will address new requirements for the Supervisors of Shipbuilding, Conversion and Repair to participate in acquisition planning and pre-award activities. The Navy added that the updated instruction will explicitly identify the benefit of participation by the Supervisors in all pre-contract award activities. We believe that the Navy's planned response aligns with the intent of our recommendation, but we will continue to monitor implementation to ensure that updates to the instruction support direct involvement by the Supervisors in requirements development and ship design efforts for shipbuilding programs prior to contract awards.
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| Department of the Navy | The Secretary of the Navy should require that, in coordination with the Commander of Naval Sea Systems Command, the SUPSHIPs' Deputy Commander provide a report to the Chief of Naval Operations that attests to the quality and readiness of each ship prior to the approval of ship acceptance. (Recommendation 5) |
The Department of the Navy concurred with this recommendation but, as of July 2022, has yet to demonstrate actions to implement it. The Navy stated that it intends to establish a working group in early 2023 to review the Naval Sea Systems Command's ship delivery process in order to ensure that it explicitly includes endorsement recommendations for each ship delivery from the Supervisors of Shipbuilding, Conversion and Repair. The Navy added that it plans to codify the results of the working groups and distribute them across the Program Executive Offices within the Naval Sea Systems Command by mid-2023. We believe that the Navy's plans align with the intent of our recommendation, but we will continue to monitor implementation to ensure that the Supervisors attest to the quality and readiness of each ship prior to the approval of ship acceptance.
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