Recommendation: The Administrator of General Services should ensure that the Commissioner of the Public Buildings Service develops a strategy that outlines the steps needed to routinely collect information on and monitor the time frames for finalizing construction contract changes at the headquarters level. The strategy could address issues such as the types of construction contract changes that should be included, when the measurement of the contract change process should begin, and the information systems that will be affected. (Recommendation 1)

Agency: General Services Administration
Status: Open

Comments: GSA agreed with this recommendation. In September 2019, GSA told us that it will set up a cross functional team with officials from the Public Building Service offices of Acquisitions and Design and Construction, and the GSA Office of Government-wide Policy, to develop a strategic plan to address the recommendation. In July 2020, GSA told us that the final action step for this recommendation was due to be completed on August 31, 2020. We will continue to monitor implementation of this recommendation as we receive more information on steps taken.

Recommendation: The Secretary of the Army should direct the Chief of Engineers and Commanding General of the U.S. Army Corps of Engineers to develop a strategy to expand on existing data and systems to routinely collect information on and monitor the time frames for finalizing construction contract changes at the headquarters level. (Recommendation 2)

Agency: Department of Defense: Department of the Army
Status: Open

Comments: DOD agreed with this recommendation. In July 2020, DOD officials told us that it has developed a corrective action plan to address the recommendation, which is estimated to be completed at the end of August 2020. We will continue to monitor progress once we receive the corrective action plan.

Recommendation: The Secretary of Defense should direct the Secretary of the Navy to revise the Navy's ship delivery policy to clarify what types of deficiencies need to be corrected and what mission capability (including the levels of quality and capability) must be achieved at (1) delivery and (2) when the ship is provided to the fleet (at the obligation work limiting date (OWLD)). In doing so, the Navy should clearly define what constitutes a complete ship and when that should be achieved.

Agency: Department of Defense
Status: Open
Priority recommendation

Comments: DOD disagreed with our recommendation to clarify the Navy's ship delivery policy and stated that other existing policies help ensure the completion and capability of ships at delivery. However, as of August 2020, Navy officials stated that they are working on a new response based on ongoing discussions with GAO and they expect to develop a new proposal for responding to this recommendation by December 2020. We maintain that the Navy's ship delivery policy is a key instruction for ensuring that complete, mission-capable ships are provided to the fleet and should be revised in line with our recommendation.

Recommendation: The Secretary of Defense should direct the Secretary of the Navy to reconcile policy with practice to support INSURV's role in making a recommendation for fleet introduction. Accomplishing this may require a study of the current timing of ship trials, and the costs and benefits associated with adding an INSURV assessment prior to providing ships to the fleet.

Agency: Department of Defense
Status: Open

Comments: DOD and the Navy did not concur with this recommendation, noting that the current timing of Navy Board of Inspection and Survey (INSURV) trials provides the Navy with an opportunity to ensure contractual obligations have been met and identify construction deficiencies for correction during the post-delivery period. DOD and the Navy also stated that adding another INSURV trial at the end of the post-delivery period would not be cost-effective and could delay ship deployment schedules. However, we found that most of the significant construction deficiencies identified prior to delivery were not corrected until the post-delivery period and, therefore, INSURV generally did not have an opportunity to inspect these corrections before ships were provided to the fleet. Given this, we maintain that the Navy should re-assess the timing of its post-delivery trials in support of INSURV's responsibility to make recommendations for fleet introduction. As of August 2020, DOD officials stated that they are working on a proposal to address this recommendation based on ongoing discussions with GAO and they expect to complete this proposal by December 2020.

Recommendation: The Secretary of Defense should direct the Secretary of the Navy to reflect additional ship milestones in Selected Acquisition Reports to Congress, including OWLD and readiness to deploy.

Agency: Department of Defense
Status: Open

Comments: DOD partially concurred with this recommendation. DOD and the Navy agreed to report obligation work limiting dates (OWLD) in its Selected Acquisition Reports to Congress, and, as of December 2018, has implemented this portion of the recommendation. The department added the OWLDs for all ships that have yet to achieve this milestone to its Selected Acquisition Reports and plans to continue reporting this information in all subsequent Selected Acquisition Reports. However, DOD did not agree to report ready-to-deploy dates in the Selected Acquisition Reports to Congress, noting that operational factors outside of acquisition concerns can affect the timing of this milestone. While we agree that readiness to deploy is a fleet determination, we continue to believe that this date is important for Congressional oversight, as it remains the best milestone for determining when a ship has achieved a sufficient level of completeness to operate, under the Navy's current framework for ship delivery. As of August 2020, DOD and Navy officials stated that they are working on a new proposal for addressing the recommendation based on ongoing discussions with GAO and they expect to complete this proposal by December 2020.

Recommendation: To better assess OBO's performance, the Secretary of State should finalize the mechanisms OBO will use to centrally manage project management data (to include project cost and schedule information), currently termed the Ideal Operational State, and document through appropriate policies, procedures, or guidance.

Agency: Department of State
Status: Open

Comments: As of January 2020, OBO reported the development of an Integrated Master Schedule template that will serve as a single source for project schedule information for all new capital projects, from inception to occupancy. OBO also reported a bureau-wide effort to develop a holistic Data Management Strategy, including project management data among additional categories of data such as portfolio, program, property, and human capital. GAO continues to monitor State's efforts to implement this recommendation.

Recommendation: In order to help ensure that DOD and the military departments are providing timely and consistent information on privately financed construction projects to Congress under DOD Instruction 7700.18, the Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness--in collaboration with any other relevant DOD stakeholders--to identify the categories of privately financed construction projects, including gifts of major construction, that should be reported through the process outlined in DOD Instruction 7700.18; revise DOD Instruction 7700.18 and any other related policies, as appropriate, to clarify which project types are to be included in and excluded from this reporting process; and require that the military departments update their relevant policies to incorporate the revised policy.

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation, and stated that it will make clarifications in the next revision of DOD Instruction 7700.18 to clarify the types of privately financed major construction projects that should be reported through the process outlined in the instruction. In July 2020 an official from the Office of the Deputy Assistant Secretary of Defense (Military Community and Family Policy) said that DOD had completed a draft update of the instruction that included language implementing GAO's recommendation. The official also stated that DOD Instruction 7700.18 is interrelated with other DOD guidance which is also being updated. DOD plans to complete the updates to all the relevant policies by June 2021.

Recommendation: In order to ensure that Congress receives all desired information on all gifts of major construction in a timely manner, the Secretary of Defense--in collaboration with any other relevant DOD stakeholders--should identify the lead organization(s) within DOD that will be responsible for developing DOD-wide policy for reporting gifts of major construction that are not reported through the process outlined in DOD Instruction 7700.18, as appropriate.

Agency: Department of Defense
Status: Open

Comments: DOD did not concur with this recommendation, stating that there was already an official, the Under Secretary of Defense for Acquisition, Technology, and Logistics, responsible for developing policies related to gifts of real property, including major construction. However, DOD has not formally assigned responsibility to the Under Secretary (now the Under Secretary for Acquisition and Sustainment) for developing DOD-wide policy on reporting gifts of major construction not covered by the process outlined in DOD Instruction 7700.18. As of July 2020, the department had not taken action to address this recommendation, according to a representative of the Office of the Under Secretary of Defense for Acquisition and Sustainment.

Recommendation: In order to ensure that Congress receives all desired information on all gifts of major construction in a timely manner, the Secretary of Defense--in collaboration with any other relevant DOD stakeholders--should establish DOD-wide policy, as appropriate, on congressional notification of gifts of major construction to cover all such gifts that are not to be reported to Congress through the process outlined in DOD Instruction 7700.18, and require that the military departments update their gift acceptance policies--and any other relevant policies--to incorporate procedures to support DOD's notification requirements.

Agency: Department of Defense
Status: Open

Comments: DOD did not concur with this recommendation, stating that Congress has provided a statutory framework for the department to accept gifts, including gifts of construction, without stipulating any reporting requirements. However, this is inconsistent with DOD Instruction 7700.18, which states that construction projects funded by donations are subject to reporting to Congress. The military departments have been accepting gifts of major construction and reporting some of them to Congress while not reporting others. If DOD does not take action to clarify its policy on reporting such gifts, Congress is likely to continue receiving inconsistent and incomplete information, and to lack an explanation of the scope of the information it is receiving. This in turn may impair Congressional oversight over such projects and their potential effects on future maintenance funding requirements since some projects will not be brought to Congress' attention. As of July 2020, the department had not taken action to address this recommendation, according to a representative of the Office of the Under Secretary of Defense for Acquisition and Sustainment.

Recommendation: To improve the use of warranties and guarantees in Navy shipbuilding, the Secretary of the Defense should direct the Secretary of the Navy, for future ship construction contracts, to determine whether or not a warranty as provided in the FAR, provides value and document the costs, benefits, and other factors used to make this decision. To inform this determination, the Navy should begin differentiating the government's and shipbuilder's responsibility for defects and track the costs to correct all defects after ship delivery.

Agency: Department of Defense
Status: Open
Priority recommendation

Comments: DOD partially concurred with this recommendation in February 2016 by committing to study policy changes with regard to warranties, but disagreed that additional cost data were needed to inform these decisions, and questioned whether warranties are suitable for ship acquisitions. In February 2017, a Navy-funded study found that the Navy had no policy to collect data, and that the little data available were not useful for determining when warranties are suitable. In response to the study, the Navy agreed that, by December 2017, it would make some policy and contractual changes to collect data, but it continued to maintain that warranties are likely not suitable for ship contracts. In January 2018, the Navy issued guidance to help contracting officers determine when and how to use a warranty or guarantee, but the Navy has collected only one warranty cost proposal from one shipbuilder for a contract for a single ship and, going forward, Navy officials stated that they do not have plans to systematically collect such data. In August 2019, we recommended in GAO-19-512 that the Navy collect warranty pricing on its new class of frigates, as the Navy initially did not include warranty pricing as part of its request for proposals for the ship class. However, as of August 2020, the Navy has not made meaningful efforts to gain pricing data for warranties and has stated that the department does not plan to take any further action. To fully implement this recommendation, the Navy needs to collect additional data in order to determine cases in which warranties could contribute to improvements in the cost and quality of Navy ships.