Request To Fully Fund Two Nuclear Aircraft Carriers in Fiscal Year 1983

Pursuant to a congressional request, GAO reviewed the Navy's proposal for fully funding two nuclear aircraft carriers in fiscal year (FY) 1983 to determine if their projected delivery schedule and cost avoidance estimate are achievable. According to the Navy, fully funding both carriers in FY 1983 will result in a delivery date for each which will be about 2 years earlier than would be possible if the single ship annual approach is used. Also, the Navy believes that, by fully funding both ships in the same fiscal year, it can achieve a cost avoidance of $754 million, a savings of about 10 percent. Navy officials stated that the improved delivery schedule is the critical factor. The savings in both time and money are based on comparing the full funding of two carriers in FY 1983 versus full funding for one in FY 1984 and one in FY 1986.

GAO found that the improved delivery schedule is reasonable under the assumptions used by the Navy and can be achieved if certain events happen as planned. The Navy must award: (1) sufficient research and development funds to the contractor in spring 1982 for planning purposes; (2) a long-lead contract in October 1982; and (3) the basic construction contract by January 1983. Additionally, the contractor must: (1) deliver a carrier already under construction earlier than the February 1988 contract delivery date; and (2) quickly begin and then effectively implement the planning necessary to phase in the two new carriers to achieve optimum labor, material, and work flow and to optimize facilities used. GAO concluded that, if one or more of these events do not occur, the projected delivery dates of the two carriers could slip, thus negating the cost avoidance projection.