Strategic Sealift

The National Defense Reserve Fleet is divided into two components. One component--the Ready Reserve Force (RRF)--includes 96 ships that are routinely maintained so that they could be activated in 5, 10, or 20 days. The other component (the non-RRF) consists of 71 Victory-class ships built during World War II and 45 others of varying age and time in reserve status. These ships receive far less maintenance than RRF ships and would require much longer activation times--between 30 and 120 days. The Maritime Administration spends about $2 million to retain these ships, some of which are being held for upgrade to the RRF or for other programs. Often referred to as "rust buckets," they were not used during the Persian Gulf War, even though U.S. sealift capabilities were severely strained. These ships are no longer needed, given the availability and capability of other, quicker-response sealift assets, including the ships in the RRF. Scrapping the obsolete Reserve Fleet ships could (1) save about $10 million in direct maintenance costs during the next 10 years and (2) generate an estimated $38 million to $42 million to improve the RRF if the ships were sold for scrap. Despite the non-RRF ships' physical appearance, they could probably be activated. However, they need to be better maintained and managed if they are to be relied on as viable sealift assets.

GAO found: (1) during the 1980s, the Department of Defense spent over $7 billion to improve, increase, and expand government-owned or -controlled sealift assets; (2) during deployment to the Persian Gulf, Non-Ready Reserve Force (non-RRF) ships were not used to assist in the transportation of the 10 million tons of cargo because there would not be enough time to activate the ships, the ships' relatively small size, slow transit speeds, long off-loading times compared with other ships, and the ready availability of U.S. and foreign flag commercial ships; (3) legislation has been introduced that would require that all Reserve Fleet ships built prior to 1946 be scrapped domestically; however, under present scrap market conditions, domestic ship scrappers have bid much less than foreign firms because of various economic, environmental, and safety factors that result in higher costs to U.S. firms; and (4) MARAD cannot ensure that non-RRF ships can be relied on as viable sealift assets because of ineffective dehumidification systems, inadequately controlled spare parts, doubtful availability of sufficient crews, unavailable ship condition documentation, and lack of written criteria and procedures for ship disposal.

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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