Navy Can Improve Management of Shipyard Labor Resources Through Better Work Measurement Practices

GAO reviewed the adequacy of the Navy shipyard work measurement and cost accounting systems.

GAO has previously reported that the Navy needed to improve its work measurement and cost accounting systems to effectively control rising labor costs. Although the Navy has taken some corrective action, GAO found that, overall, the Navy has given work measurement and labor costing low priority. As a result, many problems still exist, including: (1) improper documentation of labor standards; (2) lack of justification by shipyard planners for increased work time allowances; and (3) incorrect application of standards for determining estimated job costs. Further, personnel responsible for monitoring employee labor-charging activities have not been able to determine the extent of time mischarged, and individuals administering work measurement and cost accounting activities have not been held fully accountable for their performance. The Naval Sea Systems Command (NAVSEA) has issued instructions emphasizing the need to implement effective work measurement systems and ensure accurate time charges for shipyards and has initiated programs to identify problems with estimating procedures and labor charging. However, progress toward these goals has been impeded by various problems, including the lack of a firm commitment by management to operating and maintaining a viable work measurement system and a lack of staff to effectively administer work measurement activities. GAO stated that, although it is difficult to estimate the impact of these weaknesses on labor costs, studies have shown that millions of dollars can be lost through low productivity.

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: John Landicho Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 275-6504