Estimates of Potential Savings by Retiring Two Aircraft Carriers Early

GAO discussed the estimated direct and indirect cost savings of a Department of Defense (DOD) proposal to retire two Navy aircraft carriers ahead of schedule. GAO found that calculations based on assumptions of: (1) negligible or no indirect cost savings, redistribution of deactivated aircraft, and continued fleet modernization and expansion produced an estimated $1.1 billion in budget authority savings and $950 million in outlay savings for fiscal years (FY) 1990 through 1997; (2) indirect costs which varied proportionally to direct costs, delayed ship procurement plans, and reassignment rather than early retirement of aircraft produced an estimated $2.6 billion in both budget authority and outlay savings; and (3) retirement of all deactivated wing aircraft, postponement of FY 1989 procurement plans for new ships and munitions, and indirect costs which decreased proportionally with direct costs produced an estimated $5.1 billion in budget authority savings and $4.9 billion in outlay savings. GAO also found that the proposal would: (1) delay until 1997 the goal of having 15 deployable aircraft carriers in the fleet; and (2) affect the Navy's ability to meet national security commitments.