Navy Maintenance

The Navy spent $1.3 billion on overseas ship maintenance in fiscal years 1987-91. Almost 85 percent of all repairs were done at three Navy-run facilities. Overseas ship maintenance costs are declining, and the Navy projects that overseas costs will total $1.1 billion in fiscal years 1992-98. If the Japan-based ships were returned to U.S. shipyards for long-term planned maintenance, the ships could not meet existing operational requirements because Navy policies require ships to stay in their homeports twice as long as they have been deployed. In addition, the cost for long-term planned maintenance for the Yokosuka-based ships at U.S. shipyards would range from $211.7 million to $741.6 million more for fiscal years 1992-98. Japan's labor-cost-sharing agreement with the United States significantly lowers costs in Japan. Japan will fund 100 percent of the labor costs for U.S. ship repairs by 1996. The Navy lacks enough controls to ensure that its overseas maintenance process complies with statutory limitations on overseas maintenance of U.S. homeported ships. Further, the Navy has not incorporated the legislative limitations on overseas ship repairs into Navy policy and procedures.

GAO found that: (1) between 1987 and 1991, Navy overseas ship maintenance costs totalled $1.3 billion, including $762 million for long-term planned maintenance and $544 million for corrective maintenance; (2) due to reductions in defense spending, a decreasing fleet size, and foreign labor cost agreements, maintenance costs between 1987 and 1991 decreased by 28 percent; (3) the Navy projected that 1992 to 1998 maintenance costs would total $1.1 billion; (4) 85 percent of all repairs were performed at three Navy-operated facilities; (5) returning Japan-based ships to U.S. shipyards would conflict with Navy separation and deployment policies which require ships to remain at homeports twice as long as they have been deployed; (6) long-term U.S. facility maintenance costs of Japan-based ships would increase from $211.7 million to $741.6 million; (7) Japan's labor cost sharing agreement reduced the total repair costs and, by 1996, Japan will fund 100 percent of the ship maintenance labor costs; and (8) the Navy lacked sufficient internal controls and data to ensure overseas maintenance processes comply with statutory limitations, and has not incorporated legislative limitations on overseas ship repairs into Navy policy and procedures.

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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