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Highlights

GAO reviewed the Navy's practice of providing government-furnished material (GFM) to contractors for use in the construction, overhaul, and repair of its ships, airplanes, and missiles.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Navy 1. The Secretary of the Navy should direct the systems commands and other applicable organizations to bring the Navy's QDR systems into agreement with Department of Defense (DOD) Directive 4155.1 and Defense Acquisition Regulations.
Closed - Implemented
The Naval Material Command (NAVMAT) had responsibility for implementation action. Since NAVMAT disestablishment, the Naval Sea Systems Command (NAVSEA) has been given overall responsibility and has established a unified product deficiency reporting system.
Department of the Navy 2. The Secretary of the Navy should direct the systems commands and other applicable organizations to develop a system for maintaining overall financial and logistical data that will provide the management visibility needed to identify the nature and magnitude of the problems with defective GFM.
Closed - Implemented
NAVSEAINST 4855.7A, which standardizes reporting across NAVSEA, was issued.
Department of the Navy 3. The Secretary of the Navy should direct the systems commands and other applicable organizations to ensure the consistency and compatibility of the various Navy QDR systems with each other and with other DOD components.
Closed - Implemented
Major system commands have established compatibility requirements for deficiency reporting.
Department of the Navy 4. The Secretary of the Navy should direct the systems commands and other applicable organizations to use the data developed by QDR systems to hold vendors accountable, either by having them take corrective action or by preventing future purchasing from them. Alternative sources should be developed if a sole-source vendor does not improve the quality of its products.
Closed - Implemented
Directions have been given to all procurement contracting officers in all system commands to use historical data to monitor performance and vendor analysis reports to identify problems. Contractor indoctrination seminars were held.
Department of the Navy 5. The Secretary of the Navy should establish a focal point within his office to oversee the accomplishment of these recommendations.
Closed - Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

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