Recommendation: The NPO Cost Savings Program Manager should work with CNS to evaluate the remaining site reinvestment funds and develop and implement a plan for how best to aggregate and use them. (Recommendation 1)

Agency: Department of Energy: National Nuclear Security Administration
Status: Open

Comments: NNSA concurred with the recommendation. In comments on a draft of the report, DOE stated that NPO plans to work with CNS on a plan for the remaining reinvestment funds, with an estimated completion date of December 31, 2020.

Recommendation: The Associate Administrator for Acquisition and Project Management should gather data on and document an analysis of the Cost Savings Program, including its cost effectiveness, to determine whether it is exportable to existing or future contracts. (Recommendation 2)

Agency: Department of Energy: National Nuclear Security Administration
Status: Open

Comments: NNSA concurred, in principle, with the recommendation. In its comments on a draft of the report, NNSA stated that potential benefits of the cost savings program should be considered for future contracts, as applicable. NNSA stated that it believes this recommendation is closed with actions to address other recommendations. We disagree and continue to believe that NNSA should document an analysis of the cost savings program, including its cost effectiveness, to determine the exportability of the program to other contracts.

Recommendation: The NPO Cost Savings Program Manager should share relevant lessons learned with other NNSA sites so that those sites can determine if efficiencies CNS has achieved can be implemented at other sites. (Recommendation 3)

Agency: Department of Energy: National Nuclear Security Administration
Status: Open

Comments: NNSA concurred with the recommendation. In its comments on a draft of the report, NNSA stated that it plans to upload lessons learned into DOE's Corporate Lessons Learned Database so they can be considered by other sites by December 31, 2020.

Recommendation: The Associate Administrator for Acquisition and Project Management should evaluate whether to require all other sites to institute an Annual Controlled Baseline. (Recommendation 4)

Agency: Department of Energy: National Nuclear Security Administration
Status: Open

Comments: NNSA concurred with the recommendation. In its comments on a draft of the report, NNSA stated that it plans to evaluate whether to expand use of Annual Controlled Baselines to other sites by December 31, 2020.

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.