Strategic Mobility

This report evaluates the Navy's progress in acquiring 19 Large, Medium Speed Roll-On/Roll-Off ships to preposition Army equipment and add to surge sealift capacity. To fulfill its sealift requirements, the Defense Department is converting five used commercial container ships and will build 14 ships. GAO discusses (1) the Navy's efforts to deliver the converted ships and new vessels on schedule and the impact any delays would have on the Army's ability to meet its prepositioning and afloat requirements, (2) the capability of the converted ships to adequately carry out their mission, (3) crew levels for the ships, and (4) increases in procurement costs for the ships.

GAO noted that: (1) as of May 1997, four of the five LMSR conversion ships were delivered 16 to 20 months late and the remaining ship is 24 months behind schedule; (2) the delays in conversion ships are due to both government and contractor problems; (3) late deliveries of the new construction ships are due to labor strikes and similar problems experienced in the conversions; (4) additionally, inadequate controls in the material management systems at all three shipyards could result in further schedule delays; (5) these delays will cause the Army to rely on smaller, less capable ships and to incur an estimated $18.5 million additional cost in operations and maintenance funds over 3 years ending fiscal year (FY) 1998; (6) the number of major deficiencies identified on the four delivered conversion ships has decreased since the first delivery; (7) the final performance issue, the inability of the cargo discharge system to remove water from cargo areas, was corrected and cleared by the Coast Guard after testing in mid-May 1997; (8) also, the Navy operational testers identified the inability of the first conversion ship to sustain a speed of 24 knots; it averaged a maximum speed of 23.665 knots; (9) Department of Defense (DOD) officials said that the older LMSR conversion ships would likely require increased maintenance; (10) the Military Sealift Command, through its ship manager, plans to crew the five conversion ships at the minimum levels required by the Coast Guard plus four additional crewmembers to manage and perform food service and housekeeping duties for a total of 26 crewmembers; (11) minimum crewing is a cost-saving measure several ship operating companies use, but it may not provide the crew levels necessary for adequate ship maintenance; (12) according to Military Sealift Command officials, the ship operating company will use industrial assistance workers to augment the permanent crew for ship maintenance and repair; (13) the LMSR conversion and new construction ships have had a net cost increase of about $131.5 million as result of schedule delays; (14) the five conversion ships have experienced a total cost increase of about $173.3 million; (15) the new construction ships have experienced a cost decrease of about $41.8 million, which can primarily be attributed to a change in price indexes issued by the Office of Management and Budget; and (16) despite the net increase, Navy cost projections show a downward trend in ship cost through delivery of the last ship in FY 2001.

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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