Cost Growth and Delivery Delays in Submarine Construction at Electric Boat Are Likely To Continue

Gao ID: MASAD-82-29 April 19, 1982

GAO was asked to evaluate the ability of the General Dynamics Corporation's Electric Boat Division to build submarines in a timely and cost-effective manner. GAO was also asked to review other aspects concerning Electric Boat and its submarine construction program.

GAO noted that it was too early to accurately assess Electric Boat's upgraded quality assurance program, but the new procedure could provide greater assurance that quality submarines are constructed by Electric Boat. Weaknesses in implementing inspection procedures and in obtaining and verifying timely corrective actions could lead to quality-related problems similar to those experienced in the past. The Naval Sea Systems Command has identified weaknesses in the quality assurance program which should ensure that contractual requirements are met, and these weaknesses have not been entirely corrected by actions which were intended to remedy them. Cost growth will continue at Electric Boat because the direct labor budgets, despite revisions, do not reflect all the hours needed to complete the SSN-688 and the Trident submarine programs. The Navy believes that the pricing structures and target costs for these contracts are reasonable. Six SSN-688's and one Trident were delivered in 1981. In achieving these deliveries, the company concentrated its labor force on these submarines at the expense of the remaining submarines under construction. Unless Electric Boat takes immediate action to reverse unfavorable productivity trends, some scheduled SSN-688 and Trident delivery dates may not be met. In the Navy's testimony before a congressional subcommittee, Electric Boat was criticized for its shoddy construction and poor quality control and was held responsible for high costs and delivery delays. Electric Boat defended its position by refuting the Navy's criticisms.

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.

Director: Donald E. Day Team: General Accounting Office: Mission Analysis and Systems Acquisition Division Phone: (202) 275-3468


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