Naval Shipyards

For the past several years, Congress has expressed concern over the rate at which maintenance costs for naval vessels have increased while the size of the fleet has decreased. In fiscal year 1972, the Navy spent about $1.4 billion to overhaul, modernize, convert, and repair a fleet of 654 ships. By 1976, the fleet had decreased to 476 while the cost of maintaining it increased to about $2 billion. When the ships' forces and the Navy's intermediate level maintenance activities cannot do the work, it is performed in naval or private shipyards.

Naval shipyards are to provide quick response industrial work in peacetime to support fleet needs and to provide sufficient capacity and capability to meet workload surges in a war or other emergency. Although the Navy has made broad wartime planning assumptions, it has not quantified its mobilization requirements. The Navy has no basis for knowing: the amount of work that shipyards could accomplish during mobilization, the number of skilled personnel required, how much of the work private shipyards could absorb, and at which shipyards modernization dollars could be optimally spent. The Navy has invested substantially in shipyard facilities and equipment without having developed a master plan to meet specific mobilization needs. Consequently, the Navy has no way of knowing if modernization funds are being directed to the shipyards that can best use them. Good estimating techniques are not used at several facilities, and a vital methods and standards program that once reported millions of dollars saved is not fully used.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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