Defense Inventory
Opportunities Exist to Improve Spare Parts Support Aboard Deployed Navy Ships Gao ID: GAO-03-887 August 29, 2003GAO is conducting a series of reviews in response to a congressional request to identify ways to improve the Department of Defense's (DOD's) availability of high-quality spare parts for ships, aircraft, vehicles, and weapons systems. This report focuses on the effectiveness of the U.S. Navy's spare parts support to deployed ships. It examines (1) the extent to which the Navy is meeting its spare parts supply goals, (2) the reasons for any unmet supply goals, and (3) the effects of spare parts supply problems on ship operations, mission readiness, and costs. To conduct the review, GAO looked at data on parts requisitions, maintenance work orders, and casualty reports for various Navy ship deployments between fiscal years 1999 and 2003.
In typical 6-month deployments at sea, Navy ships are generally unable to meet the Navy's supply performance goals for spare parts. GAO's analysis of data for 132,000 parts requisitions from ships in 6 Atlantic and Pacific battle groups deployed in fiscal years 1999 and 2000 showed that 54 percent could be filled from inventories onboard ship. This supply rate falls short of Navy's long-standing 65 percent goal. When parts were requisitioned, maintenance crews waited an average of 18.1 days to get the parts--more than 3 times the Navy's wait-time goal of 5.6 days for ships outside the continental United States. The Navy recognizes it has not met its supply goals for over 20 years. Two key problems contribute to the Navy's inability to achieve its supply goals. Its ship configuration records, which identify the types of equipment and weapons systems that are installed on a ship, are often inaccurate because they are not updated in a timely manner and because audits to ensure their accuracy are not conducted periodically. In addition, the Navy's historical demand data are often out-of-date, incomplete, or erroneous because supply crews do not always enter the right information into the ships' supply system databases or do not enter it on a timely basis. Because configuration-record and demand data are used in models to estimate what a ship needs to carry in inventory, inaccuracies in this information can result in a ship's not stocking the right parts for the equipment on board or not carrying the right number of parts that may be needed during deployment. While precise impacts are not always well defined, the Navy's spare parts supply problems can affect a deployed ship's operations, mission readiness, and costs. GAO's analysis of data on 50,000 work orders from 6 deployed battle groups showed that 58 percent could not be completed because the right parts were not available onboard. More complete reporting of work orders identified as critical or important would have resulted in a more complete assessment of ship mission readiness. In addition, the Navy expends substantial funds--nearly $25 million for six ships GAO reviewed--to maintain large inventories that are not requisitioned during deployments.
RecommendationsOur 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: Team: Phone:GAO-03-887, Defense Inventory: Opportunities Exist to Improve Spare Parts Support Aboard Deployed Navy Ships
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Report to the Chairman, Subcommittee on Defense, Committee on
Appropriations, House of Representatives:
United States General Accounting Office:
GAO:
August 2003:
Defense Inventory:
Opportunities Exist to Improve Spare Parts Support Aboard Deployed Navy
Ships:
Defense Inventory:
GAO-03-887:
GAO Highlights:
Highlights of GAO-03-887, a report to the Chairman, Subcommittee on
Defense, Committee on Appropriations, House of Representatives
Why GAO Did This Study:
GAO is conducting a series of reviews in response to a congressional
request to identify ways to improve the Department of Defense‘s
(DOD‘s) availability of high-quality spare parts for ships, aircraft,
vehicles, and weapons systems. This report focuses on the
effectiveness of the U.S. Navy‘s spare parts support to deployed
ships. It examines (1) the extent to which the Navy is meeting its
spare parts supply goals, (2) the reasons for any unmet supply goals,
and (3) the effects of spare parts supply problems on ship operations,
mission readiness, and costs.
To conduct the review, GAO looked at data on parts requisitions,
maintenance work orders, and casualty reports for various Navy ship
deployments between fiscal years 1999 and 2003.
What GAO Found:
In typical 6-month deployments at sea, Navy ships are generally unable
to meet the Navy‘s supply performance goals for spare parts. GAO‘s
analysis of data for 132,000 parts requisitions from ships in 6
Atlantic and Pacific battle groups deployed in fiscal years 1999 and
2000 showed that 54 percent could be filled from inventories onboard
ship. This supply rate falls short of Navy‘s long-standing 65 percent
goal. When parts were requisitioned, maintenance crews waited an
average of 18.1 days to get the parts”more than 3 times the Navy‘s
wait-time goal of 5.6 days for ships outside the continental United
States. The Navy recognizes it has not met its supply goals for over
20 years.
Two key problems contribute to the Navy‘s inability to achieve its
supply goals. Its ship configuration records, which identify the types
of equipment and weapons systems that are installed on a ship, are
often inaccurate because they are not updated in a timely manner and
because audits to ensure their accuracy are not conducted
periodically. In addition, the Navy‘s historical demand data are often
out-of-date, incomplete, or erroneous because supply crews do not
always enter the right information into the ships‘ supply system
databases or do not enter it on a timely basis. Because configuration-
record and demand data are used in models to estimate what a ship
needs to carry in inventory, inaccuracies in this information can
result in a ship‘s not stocking the right parts for the equipment on
board or not carrying the right number of parts that may be needed
during deployment. The Navy‘s reasons for unfilled requisitions are
shown in the figure below.
While precise impacts are not always well defined, the Navy‘s spare
parts supply problems can affect a deployed ship‘s operations, mission
readiness, and costs. GAO‘s analysis of data on 50,000 work orders
from 6 deployed battle groups showed that 58 percent could not be
completed because the right parts were not available onboard. More
complete reporting of work orders identified as critical or important
would have resulted in a more complete assessment of ship mission
readiness. In addition, the Navy expends substantial funds”nearly $25
million for six ships GAO reviewed”to maintain large inventories that
are not requisitioned during deployments.
What GAO Recommends:
GAO is recommending that the Navy (1) develop plans to conduct
periodic ship configuration audits and ensure that configuration
records are updated and maintained, (2) ensure that parts demand data
are entered into ship supply systems promptly and accurately as
required, (3) periodically purge unneeded spare parts from ship stocks
to reduce costs, and (4) ensure casualty reports are issued consistent
high-priority maintenance work orders as required. DOD concurred with
the first three recommendations and the intent of the fourth
recommendation.
www.gao.gov/cgi-bin/getrpt?GAO-03-887.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact William M. Solis at
(202) 512-8412 or solisw@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Deployed Ships' Supply Goals Go Unmet As Only About Half of Needed
Spare Parts Are Onboard:
Inaccurate Configuration and Demand Data Contribute to Unmet
Supply Goals:
Spare Parts Supply Problems Can Affect Ship Operations and Mission
Readiness and Increase Costs:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Navy Work Order Priority Code Descriptions:
Appendix III: Navy Reasons for Spare Parts Not Onboard Deployed Ships:
Appendix IV: Comments from the Department of Defense:
Tables:
Table 1: Navy Spare Parts Supply Rates for Six Selected Deployed Battle
Groups, Fiscal Years 1999-2000:
Table 2: Navy Spare Parts Average Wait-Times, in Days, for Six Selected
Deployed Battle Groups, Fiscal Years 1999-2000:
Table 3: Percentages of Parts Types and Quantities Allowed to Be
Stocked Onboard and the Parts Supply Effectiveness Rates for Lincoln
Battle Group Surface Ships during the First 90 Days of Deployment,
July-September 2002:
Table 4: Impact of Spare Parts Shortages on Completion of Maintenance
Jobs for Selected Fiscal Years 1999 to 2000 Deployments:
Table 5: Number of Different Types of Parts Carried Compared with Total
and Filled Requisitions for Lincoln Battle Group Surface Ships after
6 Months of Deployment, July-December 2002:
Figures:
Figure 1: Estimated Value of the Spare Parts Inventory Carried Onboard
and Actually Used during First 6 Months of Deployment on Lincoln Battle
Group Surface Ships, Fiscal Year 2002:
Figure 2: Spare Parts Requisitions Filled and Unfilled for Six Selected
Battle Groups, Fiscal Years 1999-2000, According to Reasons Identified
by the Navy:
Abbreviations:
3-M: Maintenance and Material Management:
CASREP: Casualty Report:
COSAL: Coordinated Shipboard Allowance List:
DOD: Department of Defense:
SORTS: Status of Resources and Training System:
United States General Accounting Office:
Washington, DC 20548:
August 29, 2003:
The Honorable Jerry Lewis
Chairman,
Subcommittee on Defense
Committee on Appropriations
House of Representatives:
Dear Mr. Chairman:
During deployments of U.S. Navy ships around the world, it is
inevitable that some of the equipment or weapons systems on board these
ships will break down and need repairs. To meet this eventuality, the
Navy stocks each ship with tens of thousands of spare parts to enable
the ship's crew to maintain and repair the equipment in a timely
manner. If the needed spare parts are not on board the ship, the repair
work could be delayed--and equipment disabled--while supply crews
obtain the parts from off-ship sources.[Footnote 1] During this delay,
the ship's operations and mission readiness may be compromised.
This report is one of a series of reviews that we are conducting in
response to your request that we identify ways to improve the
Department of Defense's (DOD's) availability of high quality spare
parts for aircraft, ships, vehicles, and weapons systems. In one of
these reviews, we found that the Navy's servicewide strategic plan does
not specifically address means to mitigate critical spare parts
shortages.[Footnote 2] This report focuses on the effectiveness of
spare parts support provided to deployed U.S. Navy ships. To address
this issue, we examined (1) the extent to which the Navy is meeting its
spare parts supply goals on deployed ships, (2) the reasons for any
unmet supply goals, and (3) the effects of spare parts supply problems
on ships' operations, mission readiness, and costs.
In performing our work, we examined a variety of data related to Navy
spare parts supply and ship maintenance. These data covered different
time periods between 1999 and 2003 and represented the most current or
accessible information available during the period of our analysis. As
part of our study, we analyzed spare parts requisitions from Navy ships
deployed in Atlantic and Pacific fleet battle groups,[Footnote 3]
amphibious readiness groups, and Marine Corps expeditionary forces for
varying periods during fiscal years 1999 to 2001. We also analyzed
maintenance work order and casualty report data from the 6-month
deployments of the Truman battle group (Atlantic Fleet) in fiscal year
2000, and spare parts carried and used by the Lincoln battle group
(Pacific Fleet) in fiscal year 2002. In addition, we reviewed
historical information from 1982 to 2000 on the Navy's ability to fill
onboard spare parts requests for both deployed and nondeployed ships.
We conducted our review from July 2002 to May 2003 in accordance with
generally accepted government auditing standards. Further details on
the scope and methodology we used in our work are found in appendix I.
Results in Brief:
During typical 6-month deployments at sea, Navy ships generally have
been unable to meet the goals that the Navy fleets use in assessing
spare-parts supply performance. Our analysis of data for ships in 6
battle groups from the Atlantic and Pacific fleets that deployed during
fiscal years 1999 and 2000 indicated that only about 54 percent of the
total of 131,855 requisitions could be filled from onboard ship stocks
and that the remainder had to be requested from off-ship sources.
This performance falls short of the average supply effectiveness
rate[Footnote 4] of 65 percent that the Navy fleets use as a goal for
filling spare parts requisitions from onboard stocks. When needed high-
priority parts were requisitioned, maintenance crews had to wait an
average of about 18.1 days to receive the parts--more than three times
the Navy's wait-time goal of 5.6 days for ships outside the continental
United States. Moreover, other Navy data suggest that these wait times
can even be longer. These unmet goals are not a new problem. The Navy
recognizes that its ship supply effectiveness performance has fallen
short of its goals for more than 20 years.
Our analysis identified two key problems that contribute to the
Navy's inability to achieve its supply goals for deployed ships. First,
the Navy's ship configuration records, which identify the kinds of
equipment or weapons systems installed on a ship, are often inaccurate.
These inaccuracies occur because configuration records are not always
captured or updated in a timely manner when new equipment is installed
aboard ship and because audits to ensure correct records are not
conducted periodically. Second, the Navy's historical demand data,
which reflect the failure rates of specific parts, are frequently out-
of-date, incomplete, or erroneous because the right information is not
always entered, or entered on a timely basis, into the supply system
databases as required. Because the Navy uses configuration records and
demand data in its allowance models to estimate what a ship needs to
carry in its inventory during deployment, inaccuracies in this data can
result in a ship's not stocking the right parts--or not carrying the
right number of parts--for the equipment or systems installed on board.
Thus, even though a ship may stock nearly all of the parts identified
on its allowance list, it may still fall short of meeting the Navy's
supply goals.
The Navy's spare parts supply problems can adversely affect a deployed
ship's operations and mission readiness because necessary repairs may
be delayed while equipment remains disabled, and they also can increase
costs. Our analysis of data on more than 50,000 maintenance work orders
opened during the deployments of 6 battle groups indicated that about
29,000, or 58 percent, could not be completed because the needed repair
parts were not available on board ship. The full impact of such
shortages on a ship's operations and mission readiness is not easily
determined because of discrepancies in the numbers of high-priority
maintenance work orders and casualty reports issued.[Footnote 5] An
inspection of data for one battle group showed that, although many of
the work orders were identified as high-priority because they affected
equipment critical for the ship's operations and mission readiness,
ship crews did not always issue the required casualty reports. Where
casualty reports were issued, these problems were generally reflected
in ship's readiness reporting. However, fuller casualty reporting would
have likely resulted in a more complete assessment of readiness. The
Navy's parts supply problems can also affect costs. Although the exact
amounts have not been quantified, Navy officials recognize that they
incur additional costs--when needed spare parts are not available on
board ship--to locate and transport the needed parts from off-ship
sources. The Navy also expends substantial funds--totaling nearly
$25 million for the 6 ships we reviewed--to maintain large inventories
that are not requisitioned during deployments because its efforts to
periodically identify and remove unneeded spare parts from ship
inventories are given low priority.
Given the critical nature of spare parts shortages and their impact on
ship operations and readiness, we are recommending that the Secretary
of Defense direct the Secretary of the Navy to (1) develop plans to
improve ship configuration records; (2) ensure that historical demand
data are recorded promptly and accurately as required, (3) periodically
identify and, when appropriate, purge unnecessary spare parts from its
ships' inventories to reduce costs; and (4) ensure that casualty
reports are issued consistent with high priority maintenance work
orders as required to determine clearly the impact of spare parts
shortages on ships' operations and mission readiness. DOD concurred
with the first three recommendations and concurred with the intent of
the fourth recommendation. DOD's comments and our evaluation of them
are on page 20 of this report.
Background:
The Chief of Naval Operations is responsible to the Secretary of the
Navy for the command, utilization of resources, and operating
efficiency of the operational forces of the Navy and of the Navy's
shore activities. The shore establishment provides support to the
operating forces (known as the fleet), including facilities for the
repair of machinery and electronics, ships, and aircraft, and for the
storage of spare parts. The Naval Supply Systems Command provides naval
forces with supplies and services through a worldwide, integrated
supply system. Its Naval Inventory Control Point exercises centralized
control over different line items of repair parts, components, and
assemblies for ships, aircraft, and other weapons systems.
Supplying spare parts to deployed ships requires coordination between
the supply command and the Naval operating forces. The operating forces
report to the Chief of Naval Operations and provide, train, and equip
naval forces. The operating forces also report to the appropriate
Unified Combatant Commanders. As units of the Navy enter one of the
designated worldwide areas of Naval responsibility, they are
operationally assigned to the appropriate numbered fleet. All Navy
units also have an administrative chain of command with the various
ships reporting to the appropriate ship type commander: aircraft
carriers, aircraft squadrons, and air stations are under the Commander,
Naval Air Force; submarines come under the Commander, Submarine Force;
and all other ships fall under the Commander, Naval Surface Forces.
Normally, the type commander controls the ship during its primary and
intermediate training cycles, and then it moves under the operational
control of a fleet commander.
The Navy determines what kinds of spare parts to carry on board
deployed ships by identifying the kinds of equipment that are installed
(the ship's configuration) and the types and quantities of repair parts
and any special tools, test equipment, or support equipment needed to
do preventive and corrective maintenance during extended and
unreplenished periods at sea. Specifically, the Navy identifies
maintenance requirements and uses them to develop a list of allowable
parts for the equipment. For parts on the list, the Navy uses predicted
failure rates, which it updates using actual demand for parts data in
inventory allowance models. The office of the Chief of Naval Operations
approves these models.
Although the Navy revised its instruction for determining spare parts
supply effectiveness in October 1999, it continues informally to use
the supply-system performance goals that were established in
1983.[Footnote 6] These performance goals measure a ship's ability to
fill all of the repair part requisitions that it receives. Two
important goals are: (1) that gross availability of 65 percent of
repair parts required by ships and aircraft carriers are to be filled
from onboard inventories[Footnote 7] and (2) that the average customer
wait-time for the delivery of high-priority parts from ships' supply
inventories and off-ship sources is to occur within 135 hours (or about
5.6 days) for ships outside of the continental United States. This
average customer wait-time is the supply system's response time from
the date an order for a required part is issued until it is received by
the customer. The Navy is in the process of revising its supply
performance goals but it has not yet completed this work.[Footnote 8]
The Navy's annual budgets contain about $750 million for ships' spare
parts, including about $200 million for initial spares and about
$525 million for replenishment spares. However, the Navy also
identifies requirements for spare parts that have not been funded. For
example, it identified $200 million in unfunded requirements in the
fiscal years 2002 to 2004 budgets to increase safety-level stock for
repairable items.
Deployed Ships' Supply Goals Go Unmet As Only About Half of Needed
Spare Parts Are Onboard:
Only about 54 percent of spare parts requisitions for ships in 6 battle
groups in the Atlantic and Pacific fleets deployed in fiscal years 1999
and 2000 could be filled from onboard sources--a supply effectiveness
rate that fell below the Navy's goal of 65 percent. When priority parts
were not on board, ships had to wait an average of 18.1 days, more than
3 times the Navy's wait-time goal of 5.6 days for ships outside the
continental United States. The Navy has fallen short of meeting its
ship supply performance goals for more than 20 years.
Ships Average 54 Percent Onboard Parts Supply Rates:
Our analysis of ships in 6 selected Atlantic and Pacific fleet battle
groups deployed in fiscal years 1999 and 2000 showed that on average
they were able to supply about 54 percent of the spare parts that were
requisitioned from onboard inventories. As table 1 shows, this average
supply effectiveness rate ranged from 51 to 61 percent for different
battle groups during that period. The rates fell short of the
Navy's supply system performance goal of 65 percent for surface ships
and aircraft carriers, which it has used informally since 1999.
Table 1: Navy Spare Parts Supply Rates for Six Selected Deployed Battle
Groups, Fiscal Years 1999-2000:
Atlantic Fleet:
Battle group (year deployed): Enterprise (1999)[B]; Total number of
requisitions: 33,346; Number filled onboard: 17,123; Supply rate[A]:
51; Number not filled onboard: 16,213; Percent not filled: 49.
Battle group (year deployed): Kennedy (1999); Total number of
requisitions: 35,992; Number filled onboard: 19,127; Supply rate[A]:
53; Number not filled onboard: 16,865; Percent not filled: 47.
Battle group (year deployed): Truman (2000); Total number of
requisitions: 22,253; Number filled onboard: 12,069; Supply rate[A]:
54; Number not filled onboard: 10,184; Percent not filled: 46.
Pacific Fleet:
Battle group (year deployed): Constellation (1999); Total number of
requisitions: 12,432; Number filled onboard: 7,556; Supply rate[A]: 61;
Number not filled onboard: 4,876; Percent not filled: 39.
Battle group (year deployed): Stennis (2000); Total number of
requisitions: 16,175; Number filled onboard: 9,668; Supply rate[A]: 60;
Number not filled onboard: 6,507; Percent not filled: 40.
Battle group (year deployed): Lincoln (2000); Total number of
requisitions: 11,657; Number filled onboard: 5,937; Supply rate[A]: 51;
Number not filled onboard: 5,720; Percent not filled: 49.
Battle group (year deployed): Total/average percent; Total number of
requisitions: 131,855; Number filled onboard: 71,490; Supply rate[A]:
54; Number not filled onboard: 60,365; Percent not filled: 46.
Source: GAO analysis of Navy data.
[A] The supply rate is the percentage of requisitions filled from parts
available on board ships.
[B] The Enterprise battle group deployed in October 1998, the first
month of fiscal year 1999.
[End of table]
These supply rates for the deployed battle groups are consistent with
fleetwide historical data available from Navy reports. These data show
that from 1982 to 2000 Navy ships in both deployed and nondeployed
status were, on average, able to fill about 55 percent of their parts
requisitions from onboard inventories. These rates have not varied much
over the past 20 years, indicating that little overall progress has
been made in meeting the Navy's 65 percent goal.
These findings were further reinforced by our analysis of Navy data for
Pacific Fleet surface ships in amphibious readiness groups and ships in
Marine Corps expeditionary forces. These groups, which included a total
of 42 ships, showed an average availability of about 54 percent of
spare parts requisitioned during deployments in calendar years 1999 to
2001, although individual ships reported a wide range of supply rates.
For example, a destroyer in one Marine expeditionary force group
reported an average supply rate of about 31 percent during deployment,
whereas a ship used to transport and land Marines and their equipment
and supplies in a deployed amphibious readiness group averaged
62 percent.
Average Wait-Times Exceed Navy Goal:
When requisitioned parts were not on board ship, the Navy maintenance
crew had to wait far longer than the Navy's stated wait-time goals to
obtain the needed parts from off-ship sources. The wait-time goal for
critical, high-priority items for ships outside the continental United
States is 5.6 days.[Footnote 9] The Navy's data for these ships, which
were deployed between fiscal year 2000 and February 2003, showed that
when needed high-priority parts were requisitioned, maintenance crews
had to wait an average of 18.1 days--more than 3 times the Navy's wait-
time goal--to receive the parts.[Footnote 10]
The average wait-times for all spare parts, not just priority items,
are even longer. For the six Atlantic and Pacific battle groups
deployed in fiscal years 1999 and 2000 that we analyzed, repair crews
experienced an overall average wait-time of about 25.6 days, with a
range of 16.2 to 32.5 days. Table 2 shows the wait-times for spare
parts supplied both from off-ship sources, as well as from
onboard supplies.
Table 2: Navy Spare Parts Average Wait-Times, in Days, for Six Selected
Deployed Battle Groups, Fiscal Years 1999-2000:
Atlantic Fleet:
Battle group (year deployed): Enterprise (1999)[A]; On-ship average
wait-time days: 7.2; Off-ship average wait-time days: 57.2; Overall
average wait-time days: 29.1.
Battle group (year deployed): Kennedy (1999); On-ship average wait-time
days: 9.3; Off-ship average wait-time days: 39.7; Overall average
wait-time days: 21.4.
Battle group (year deployed): Truman (2000); On-ship average wait-time
days: 9.6; Off-ship average wait-time days: 55.5; Overall average
wait-time days: 28.4.
Pacific Fleet:
Battle group (year deployed): Constellation (1999); On-ship average
wait-time days: 4.1; Off-ship average wait-time days: 39.1; Overall
average wait-time days: 16.2.
Battle group (year deployed): Stennis (2000); On-ship average wait-time
days: 17.7; Off-ship average wait-time days: 54.5; Overall average
wait-time days: 32.5.
Battle group (year deployed): Lincoln (2000); On-ship average wait-time
days: 10.6; Off-ship average wait-time days: 46.9; Overall average
wait-time days: 23.8.
Battle group (year deployed): Total average wait-time; On-ship average
wait-time days: 9.9; Off-ship average wait-time days: 49.6; Overall
average wait-time days: 25.6.
Source: GAO analysis of Navy data.
[A] The Enterprise battle group deployed in October 1998, the first
month of fiscal year 1999.
[End of table]
Navy supply officials said they are concerned about the lengthy average
wait-time data being reported and are analyzing how this response time
can be shortened. They were especially concerned that the number
of days required for getting the parts to do the repair work seemed
higher than what would be reasonable.
The best of the Navy's wait-time performance is for parts that are
needed to repair high-priority, mission-critical equipment. Navy supply
officials said that wait-times of about 12 to 14 days for these
critical parts are about the best the Navy is achieving because it uses
expeditors to locate the parts and it employs premium transportation to
deliver the parts to the ships. For example, a ship will send a
requisition for a critical part to a shore-based team whose job is to
determine quickly if the part is available anywhere in the military
supply system or elsewhere, and identify the fastest mode of
transportation available (usually commercial overnight delivery) to an
overseas point. The Navy will then pick up the part for final delivery
to the ship while it is either in port or at sea.
Inaccurate Configuration and Demand Data Contribute to Unmet
Supply Goals:
Our analysis identified two key problems that contribute to the Navy's
inability to achieve its supply goals for deployed ships: inaccurate
ship configuration records and incomplete, outdated, or erroneous
historical parts demand data. The Navy uses these data in models that
estimate the types of parts (range) and the number of each part (depth)
that should be stocked on board a ship during its deployment. However,
because of data inaccuracies, the ships may stock all of the parts they
are allowed to carry but still find they cannot fill a large number of
parts requisitions from onboard inventories, thus failing to meet the
Navy's supply performance goals.
Ship Configuration Records Are Often Inaccurate:
Navy headquarters and fleet officials acknowledge that the accuracy
of ship configuration data is a serious concern. Specifically, they
said that (1) ship configuration records are not always updated in a
timely manner when equipment or weapons systems are modified and
(2) required configuration audits are not conducted regularly to ensure
that configuration data correspond with the equipment or weapons
systems on board. The Navy identifies current and accurate
configuration data as the cornerstone of logistics support to its
ships. Configuration records provide a detailed description of the
characteristics, including dimensions and technical information, of
each piece of equipment or weapon system on board the ship. This
information is used in allowance models to prepare a Coordinated
Shipboard Allowance List (COSAL). The allowance list identifies the
individual spare parts related to each piece of equipment or weapon
system on board. Ships depend on accurate configuration records to
ensure that, among other things, the right spare parts and special
tools, along with the proper manuals and other documentation, are
available on board ship.
Navy officials said that while it is difficult to attribute any one
cause to spare parts shortages on board, inaccurate ship configuration
records are a major problem. If inaccurate configuration records are
used in allowance models, the resulting allowance lists may identify
some parts that should be stocked but that do not match the equipment
that is actually on board. As a result, repair crews could requisition
a part for a failed piece of equipment but find that the part is not on
the allowance list and, thus, not in stock. The requisitions data from
our sample of 6 battle group deployments showed that about 17.3 percent
of the 60,365 unfilled requisitions were for parts that were not on the
ships' allowance parts lists (see app. III).
One reason that ship configuration records are not current or accurate
is that they are not updated or changed, as required, when equipment or
systems are installed, removed, or modified. This problem can occur on
both new and older ships. According to Navy supply and fleet officials,
the allowance lists for new ships are often based on the configuration
of the first ship to be built in the production line, and subsequent
changes to follow-on ships' configurations are not always documented.
Thus, a ship's actual configuration could change--and the records not
be modified--even before the ship is delivered from the shipbuilder. On
older ships, the equipment and systems are frequently upgraded or
replaced without properly updating configuration data because the
procedures in place to change configuration records as equipment is
changed are not always followed. For example, when equipment is
installed, removed, or modified by contractors, ship personnel do not
always promptly or accurately enter these changes into the ship's
configuration database in order that the spare parts required to
support the altered equipment can be ordered.
Moreover, the Navy has not performed the configuration audits it has
identified as needed to ensure that configuration data for equipment
and weapons systems on board are accurate.[Footnote 11] According to
Navy officials, these audits are supposed to be done periodically but
none were conducted between 1995 and 2000 because of budget
constraints. Officials said they are beginning to perform configuration
audits again and are developing an audit program, but its
implementation will depend on the funding available and whether funding
is earmarked specifically for audits. The officials estimated that a
viable program might cost about $500,000 a year. Without these audits,
the extent of the configuration records' accuracy will remain unclear.
While audits have not been conducted for a period of time, validations-
-which are more in-depth than audits--of ships' configuration data have
revealed problems with their accuracy. The Navy performs validations to
establish the precise configuration of critical systems and equipment
that is experiencing problems and corrects the configuration data
(e.g., items are added or deleted) to reflect what is actually found on
board the ships. Seven Pacific Fleet validations completed between
October 2002 and January 2003 identified inaccuracies averaging
37 percent of the records reviewed. For example, Navy Pacific Fleet
officials provided us with information about a configuration record
validation of a new ship delivered to the fleet. The validation
identified 901 errors (588 added and 313 deleted records) in the
selected systems and equipment, or about 39 percent of the 2,337
configuration records that were reviewed. On an older aircraft carrier,
a January 2003 validation identified 3,712 errors (1,790 added and
1,922 deleted records) in the selected systems and equipment, or about
43 percent of 8,555 configuration records reviewed.
Parts Demand Data Are Frequently Incomplete and Out-of-Date:
In addition to inaccurate ship configuration information, the Navy
frequently uses incomplete, outdated, or erroneous historical demand
data in its parts allowance models. This can lead to incorrect
estimates of the number of parts needed during a deployment period and
result in unmet supply goals. Historical parts demand data provides the
projected failure rates or actual replacement rates for spare parts
over a long period of time. Each repair part listed on the allowance
list is expected to fail at some point in normal ship operations during
deployment and is a potential allowance item. However, only those parts
with sufficiently high projected failure rates or actual replacement
rates, along with items required for planned maintenance or for safety
measures, will normally be authorized as onboard repair parts.
According to Navy officials, data on parts' failure rates are supposed
to be accurately, promptly, and continuously updated, but this updating
does not always happen. In some cases, ship or shore personnel may not
report that a particular spare part has been used and, thus, the
information does not get into the supply system database. As a result,
the Navy's parts allowance list will be based on incomplete, outdated,
or erroneous historical failure-rate data and the ship will stock too
few or too many spare parts of a particular type.
Our analysis of the requisitions on board deployed battle group ships
revealed that about 38 percent of the 60,365 unfilled requisitions were
mainly for parts that were on the allowance list, but were not in stock
when requisitioned (see app. III). Navy officials told us that this
problem could result partly from inaccuracies in the demand data that
are used to develop allowance lists. Officials also suggested that it
could stem from the inability of a ship's crew to obtain a
high percentage of the spare parts on their allowance lists prior to
deployment. However, our analysis showed that, at deployment, Navy
ships generally are stocked with a high percentage of the types of
parts (range) and the quantities of parts (depth) that are on their
allowance lists. Supply officials from the Navy's Pacific Fleet told us
that their goal for surface ships was to stock 93 percent of the range
and 90 percent of the depth identified on their allowance lists and
that deploying ships, which were usually given a high funding priority,
generally deployed with percentages higher than these.
As table 3 shows, our analysis of data for the Lincoln battle group
(Pacific Fleet) deployed in fiscal year 2002 indicated that the ships
were stocked with an average of 98.1 percent of the different types of
parts (range) and an average of 93.1 percent of the quantities of each
part (depth) that were on their allowance lists, which included the
parts expected to be needed during the first 90 days of deployment
(July to September 2002). In contrast, during this period, an average
of only 58.3 percent of the ships' requisitions were filled from parts
carried on board. This assessment shows that, although these ships
carried a high percentage of the types and quantities of allowed items,
they continued to fall short of meeting the Navy's supply effectiveness
rate goal of 65 percent.
Table 3: Percentages of Parts Types and Quantities Allowed to Be
Stocked Onboard and the Parts Supply Effectiveness Rates for Lincoln
Battle Group Surface Ships during the First 90 Days of Deployment,
July-September 2002:
Lincoln battle group ships: Camden; Percent of types allowed (range):
97.9; Percent of quantities allowed (depth): 96.4; Supply rate[A]:
53.0.
Lincoln battle group ships: Fletcher; Percent of types allowed (range):
97.5; Percent of quantities allowed (depth): 83.4; Supply rate[A]:
37.2.
Lincoln battle group ships: Mobile Bay; Percent of types allowed
(range): 97.0; Percent of quantities allowed (depth): 96.5; Supply
rate[A]: 59.0.
Lincoln battle group ships: Paul Hamilton; Percent of types allowed
(range): 99.1; Percent of quantities allowed (depth): 98.8; Supply
rate[A]: 78.7.
Lincoln battle group ships: Reuben James; Percent of types allowed
(range): 98.9; Percent of quantities allowed (depth): 87.8; Supply
rate[A]: 56.6.
Lincoln battle group ships: Shiloh; Percent of types allowed (range):
98.6; Percent of quantities allowed (depth): 95.2; Supply rate[A]:
60.1.
Lincoln battle group ships: Average; Percent of types allowed (range):
98.1; Percent of quantities allowed (depth): 93.1; Supply rate[A]:
58.3.
Source: GAO analysis of Navy data.
[A] The supply rate is the percentage of parts requisitions that could
be filled from stocks on board ship.
[End of table]
Spare Parts Supply Problems Can Affect Ship Operations and Mission
Readiness and Increase Costs:
The Navy's spare parts supply problems can delay the completion
of needed maintenance and repair jobs on deployed ships and can
affect their operations and mission readiness, although their precise
impacts are not always well defined. Our analysis of data on more than
50,000 maintenance work orders for 6 battle group deployments in 1999
and 2000 indicated that about 58 percent were delayed because the
needed repair parts were not available on board ship. Our closer
analysis of maintenance work orders and casualty reports for one battle
group indicated a discrepancy in reporting the extent to which
equipment failures occurred and, thus, the extent to which these
problems were reflected in readiness assessments is unclear. The Navy's
supply problems also have an impact on costs. Although the exact
amounts have not been quantified, Navy officials recognize that they
incur substantial costs to obtain needed parts from off-ship supply
sources. The Navy also expends substantial funds--totaling nearly
$25 million for the six ships we reviewed--to maintain large
inventories that are not requisitioned during deployments because it
has given low priority to identifying and purging unneeded spare parts
from ship inventories.
Lack of Spare Parts Can Delay Needed Ship Repairs:
Shortages of required parts can often delay the completion of
needed maintenance and repair jobs. Our analysis of more than
50,000 maintenance work orders opened during 6 recent battle
group deployments indicates that about 29,000 (almost 58 percent of
the total) could not be completed because one or more needed repair
parts were not on board ship. Table 4 summarizes this information.
Table 4: Impact of Spare Parts Shortages on Completion of Maintenance
Jobs for Selected Fiscal Years 1999 to 2000 Deployments:
Atlantic Fleet:
Battle group (year deployed): Enterprise (1999)[A]; Total number
of jobs: 12,607; Number of jobs completed with all parts onboard:
4,727; Percent of jobs completed with all parts onboard: 37.5; Number
of jobs requiring off-ship parts: 7,880; Percent of jobs requiring
off-ship parts: 62.5.
Battle group (year deployed): Kennedy (1999); Total number of jobs:
13,362; Number of jobs completed with all parts onboard: 5,256; Percent
of jobs completed with all parts onboard: 39.3; Number of jobs
requiring off-ship parts: 8,106; Percent of jobs requiring off-ship
parts: 60.7.
Battle group (year deployed): Truman (2000); Total number of jobs:
9,553; Number of jobs completed with all parts onboard: 4,118; Percent
of jobs completed with all parts onboard: 43.1; Number of jobs
requiring off-ship parts: 5,435; Percent of jobs requiring off-ship
parts: 56.9.
Pacific Fleet:
Battle group (year deployed): Constellation (1999); Total number
of jobs: 4,501; Number of jobs completed with all parts onboard: 2,318;
Percent of jobs completed with all parts onboard: 51.5; Number of jobs
requiring off-ship parts: 2,183; Percent of jobs requiring off-ship
parts: 48.5.
Battle group (year deployed): Stennis (2000); Total number of jobs:
5,557; Number of jobs completed with all parts onboard: 2,823; Percent
of jobs completed with all parts onboard: 50.8; Number of jobs
requiring off-ship parts: 2,734; Percent of jobs requiring off-ship
parts: 49.2.
Battle group (year deployed): Lincoln (2000); Total number of jobs:
4,780; Number of jobs completed with all parts onboard: 2,123; Percent
of jobs completed with all parts onboard: 44.4; Number of jobs
requiring off-ship parts: 2,657; Percent of jobs requiring off-ship
parts: 55.6.
Battle group (year deployed): Total/average; Total number of jobs:
50,360; Number of jobs completed with all parts onboard: 21,365;
Percent of jobs completed with all parts onboard: 42.4; Number of jobs
requiring off-ship parts: 28,995; Percent of jobs requiring off-ship
parts: 57.6.
Source: GAO analysis of Navy data.
[A] Deployed in October 1998.
[End of table]
Navy fleet officials told us that a maintenance job is generally not
started until all the needed parts are on board ship. This delay is due
to the time and labor involved in tearing down equipment and possibly
losing parts if equipment is left partially disassembled awaiting
repair.
Data Unclear on Impact of Spare Parts Shortages on Ship Operations and
Mission Readiness:
A complete picture of the impact of the Navy's spare part shortages,
however, is unclear because the Navy's two forms of reporting on the
extent to which significant equipment malfunctions affect a ship's
operations and mission readiness are inconsistent. The two forms of
reporting are high-priority maintenance work orders and casualty
reports. The Navy uses four priority codes for maintenance work,
with priorities 1, 2, and 3 considered high priority.[Footnote 12] High
priority work is defined as critical, extremely important, or important
to a ship's essential equipment and systems, operations, or mission
(see app. II for complete definitions of these codes). Navy maintenance
reporting instructions require that any maintenance job with one of
these three priority codes should generate a casualty report. According
to Navy guidance on casualty reports, they are directly related to a
unit's readiness reporting and identify the ship's equipment status and
impact on the ship's operations and mission readiness.[Footnote 13]
Where casualty reports are issued, these problems are to be reflected
in a ship's readiness reporting. Our review of about 4,000 casualty
reports issued for deployed Pacific Fleet ships from 1999 to 2001
indicated that they generally resulted in degraded ship readiness, as
reported by the Status of Resources and Training System
(SORTS).[Footnote 14] SORTS is used DOD-wide to report the degree to
which a unit is capable of undertaking its assigned wartime missions.
However, our analysis of ship maintenance work orders and casualty
reports for one battle group (Truman) in the Atlantic Fleet deployed in
fiscal year 2000 showed a discrepancy between the number of work orders
with priority 1, 2, or 3 and the number of casualty reports that were
filled out when a job was assigned one of these priority codes. The
work orders indicated that, of 5,435 total maintenance jobs, 2,635 were
identified as priority 1, 2, or 3. Although there should have been a
similar number of casualty reports, only 906, or one-third of the
2,635, were issued for these ships during this period of time. One must
assume that a more complete reporting of casualty reports, as required
for high priority maintenance work orders, would provide the basis for
a more complete assessment of readiness.
A similar discrepancy occurred between the number of high-priority
work orders and casualty reports issued for maintenance jobs on surface
ships in the Pacific Fleet between fiscal years 1995 and 2002.
According to a Pacific Fleet maintenance analyst, of about 1 million
surface ship maintenance jobs coded with priority 1, 2, or 3, only
about 50,000 casualty reports, or about 5 percent, were issued.
Although Navy guidance calls for up-to-date and accurate casualty
reports, Navy officials said that the final decision on whether to
submit a casualty report is left to the judgment of the ships'
commanders and is based on their perception of the importance of the
degraded equipment to the ships' assigned missions and the status of
redundant equipment that the ships carry. Navy officials said that the
number of casualty reports that are issued should be higher, but they
suggested that commanders' concerns that a high number of such reports
could reflect negatively on their leadership may limit the number of
reports that are issued. For example, we were told that casualty
reports are usually not generated when ships are getting ready to
deploy; if too many are generated, it might be seen as a failure of the
ships' command leadership.
Some ships that issued only a few minor casualty reports were found,
on closer inspection, to have significant ship operations and mission
readiness problems. For example, Navy ships are required to have
periodic inspections to determine if they are fit for further service
and to identify any conditions that limit their capability to carry out
assigned missions.[Footnote 15] Inspection reports we reviewed
identified various deficiencies,[Footnote 16] such as the failure of
equipment to meet performance and safety requirements or the need for
excessive maintenance resources. During an inspection in February 2002
of a destroyer forward-deployed in Yokosuka, Japan, which had issued 16
low-priority casualty reports prior to the inspection, inspectors gave
the ship an unsatisfactory rating--the lowest possible rating--in the
areas of self-defense, full power, and steering tests; they also found
that it had significant material deficiencies and equipment operational
capabilities discrepancies. Inspectors told us such discrepancies
between casualty reporting and the actual conditions found during the
inspections of the ships were not uncommon.
Navy Incurs Substantial Costs to Obtain Off-Ship Parts and Maintain
Large Inventories:
Another effect of the Navy's spare parts supply problems is increased
costs. The Navy expends additional funds to obtain needed spare parts
from off-ship sources. To get these parts, it must identify where they
are available (e.g., from a shore-based Navy supply center or a
commercial vender) and then transport them to the ship.
The Navy also incurs substantial costs to carry large parts inventories
that are not requisitioned. Our analysis of data for six ships in the
Lincoln battle group (Pacific Fleet) during deployment in 2002 showed
that the ships requisitioned only a small percentage of the different
types of parts carried on board. As shown in table 5, the ships carried
a total of 62,727 different types of parts. By the end of 6 months, the
supply crews had received 10,471 requisitions for spare parts and
filled 6,549 of them from onboard stocks. This number (6,549)
represented 10.4 percent of the total part types carried on board. Navy
fleet officials acknowledged that ships generally carry many times more
parts than are requisitioned during their deployments and indicated
that there are opportunities to reduce inventories without adversely
affecting ship operations if more accurate data was available.
Table 5: Number of Different Types of Parts Carried Compared with Total
and Filled Requisitions for Lincoln Battle Group Surface Ships after
6 Months of Deployment, July-December 2002:
Lincoln battle group ships: Camden; Number of all part types carried:
7,797; Total requisitions: Number: 1,443; Total requisitions: Range
(percent): 18.5; Requisitions filled from onboard stocks:
Number: 843; Requisitions filled from onboard stocks: Percent of all
part types used: 10.8.
Lincoln battle group ships: Fletcher; Number of all part types carried:
11,744; Total requisitions: Number: 1,717; Total requisitions: Range
(percent): 14.6; Requisitions filled from onboard stocks:
Number: 689; Requisitions filled from onboard stocks: Percent of all
part types used: 5.9.
Lincoln battle group ships: Mobile Bay[A]; Number of all part types
carried: 12,291; Total requisitions: Number: 2,167; Total requisitions:
Range (percent): 17.6; Requisitions filled from onboard
stocks: Number: 1,637; Requisitions filled from onboard stocks: Percent
of all part types used: 13.3.
Lincoln battle group ships: Paul Hamilton; Number of all part types
carried: 11,815; Total requisitions: Number: 1,652; Total requisitions:
Range (percent): 14.0; Requisitions filled from onboard
stocks: Number: 1,322; Requisitions filled from onboard stocks: Percent
of all part types used: 11.2.
Lincoln battle group ships: Reuben James; Number of all part types
carried: 7,573; Total requisitions: Number: 1,733; Total requisitions:
Range (percent): 22.9; Requisitions filled from onboard
stocks: Number: 1,018; Requisitions filled from onboard stocks: Percent
of all part types used: 13.4.
Lincoln battle group ships: Shiloh; Number of all part types carried:
11,507; Total requisitions: Number: 1,759; Total requisitions: Range
(percent): 15.3; Requisitions filled from onboard stocks:
Number: 1,040; Requisitions filled from onboard stocks: Percent of all
part types used: 9.0.
Lincoln battle group ships: Total; Number of all part types carried:
62,727; Total requisitions: Number: 10,471; Total requisitions: Range
(percent): 16.7; Requisitions filled from onboard stocks:
Number: 6,549; Requisitions filled from onboard stocks: Percent of all
part types used: 10.4.
Source: GAO analysis of Navy data.
[A] The Mobile Bay data overstate the number of onboard requisitions
filled because the ship filed 452 individual requisitions for bulk
issue items (light bulbs) that should have been included on a smaller
number of requisitions for larger quantities, according to type command
supply officials.
[End of table]
Furthermore, the Navy spent far more to carry this inventory of spare
parts than it spent for the parts that it actually used during the
Lincoln battle group's 6-month deployment in 2002. Using available Navy
data on the value of the six ships' onboard inventories, we estimated
the value of the inventory carried onboard ship be about $27.6 million
and the value of the used inventory to be about $2.9 million. See
figure 1.
Figure 1: Estimated Value of the Spare Parts Inventory Carried Onboard
and Actually Used during First 6 Months of Deployment on Lincoln Battle
Group Surface Ships, Fiscal Year 2002:
[See PDF for image]
[End of figure]
According to Navy supply officials, to minimize the inventory of
unneeded spare parts carried on board ships, ships could purge their
existing inventories periodically and revise the allowance parts lists
based on accurate configuration records, demand data, and allowance
models. The revised allowance would identify both shortages of needed
parts and excesses of unneeded parts. They said that allowance lists
used to be reviewed and updated periodically, but these reviews are no
longer performed. Although officials acknowledged that the inventory of
unneeded parts should be minimized, they said a higher priority has
been placed on correcting the shortages of needed spare parts because
of their impact on ships' operations and mission readiness. They said
that the existing inventories of unneeded parts have already been
purchased, and the costs cannot be recouped.
Conclusions:
The Navy's long-standing failure to meet its spare parts supply
performance goals has led to shortages of needed parts on board
ships and some degradation in ships' operations and mission readiness
during long deployments at sea. These shortages stem from the Navy's
inability to determine, in a reliable way, what types of spare parts
and how many of each type need to be stocked on board ship. The Navy
uses inaccurate, out-of-date, or incomplete ship configuration and
historical demand information to develop the parts allowance lists that
identify what repair parts, manuals, and other related items a ship
should carry in its onboard inventory. Even though a ship may stock
almost all of the parts on the allowance list, it is likely to fall
short of meeting the Navy's supply performance goals because the data
used to develop the allowance lists are inaccurate. When needed parts
are not available on board, a large number of repair jobs are delayed
and equipment is not functional--sometimes for weeks or months--until
the ships' crews can obtain the parts from off-ship sources. Moreover,
the Navy may not have a complete picture of the actual impact that
equipment downtime has on the ships' operations and mission readiness
because of discrepancies in the reporting systems the Navy uses to
monitor these problems.
The Navy's spare parts supply problems also substantially increase
costs. Because of inaccuracies in the information the Navy uses to
develop its allowance lists, it often stocks the wrong types or the
wrong quantities of parts on board ships. As a result, the Navy has to
spend additional money to obtain the parts it needs from off-ship
sources, often incurring high expenses to locate the parts and
transport them to the ships. It also expends substantial funds to
maintain large inventories on board its ships that are not
requisitioned during deployments. However, the Navy has given low
priority to purging unneeded parts from its ships' inventories and,
instead, has focused on purchasing additional spare parts to avoid
future shortages.
Until the reliance on poor ship configuration records and historical
demand information to identify what spare parts should be carried on
board is broken, the Navy's deployed ships will continue to experience
critical spare parts shortages that undermine their ability to fulfill
their missions at sea.
Recommendations for Executive Action:
In order to improve supply availability, enhance operations and mission
readiness, and reduce operating costs for deployed ships, we recommend
the Secretary of Defense direct the Secretary of the Navy to:
* develop plans to conduct periodic ship configuration audits and to
ensure that configuration records are updated and maintained in order
that accurate inventory data can be developed for deployed ships;
* ensure that demand data for parts entered into ship supply systems
are recorded promptly and accurately as required to ensure that onboard
ship inventories reflect current usage or demands;
* periodically identify and purge spare parts from ship inventories to
reduce costs when parts have not been requisitioned for long periods of
time and are not needed according to current and accurate configuration
and parts demand information; and:
* ensure that casualty reports are issued consistent with high priority
maintenance work orders, as required by Navy instruction, to provide a
more complete assessment of ship's readiness.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD concurred with three
recommendations and concurred with the intent of the fourth
recommendation, but not its specific action. DOD's written comments are
reprinted in their entirety in appendix IV.
In concurring with our first recommendation, DOD said that, although
the Navy has an audit plan to look at current ship configurations and
provide updated allowance listings, the Navy needs to be more
aggressive in following up on configuration changes to ensure that the
configuration records on board ship match those in the Navy's main
configuration database. At the time of our review, the procedures had
not been validated and reconciled, for example, with the high
percentages of inaccuracies identified during validations done to
identify and correct problems; moreover, sufficient funding to
implement the program was not assured. DOD also noted that the Navy
recently set up a Maritime Allowancing Working Group that is
undertaking a comprehensive review of its current inventory and
allowance practices, including ship configuration management. However,
at the time of our review, the Navy had not established time frames for
reporting on this effort.
Although DOD concurred with our second recommendation, it asserted that
our report does not adequately substantiate our claim about the
accuracy of demand data. In our report, however, we cited Navy
officials who told us that spare parts' failure rates, which rely on
demand data, are not always updated promptly or accurately. Moreover,
60,000 requisitions for spare parts were not on ships in 6 battle
groups deployed in fiscal years 1999 and 2000 either because they were
not on allowance parts lists or were on these lists but were not in
stock when requisitioned (see app. III). Navy officials told us that
such shortages occur in part from relying on inaccurate demand data.
DOD pointed out that many items on the lists do not qualify for
allowances. They said that these parts are not stocked on board because
of a ship's designated repair capability, the results of the readiness
optimization calculation used in the sparing model, and the forecast
for demand falling below the sparing threshold. However, these
determinations also rely on accurate and timely demand data.
In concurring with our third recommendation, DOD said that the Navy
needs to undertake a more comprehensive program to identify and,
when appropriate, purge excess spare parts from ship inventories, but
it added that such efforts should not be based solely on parts demand
history. In our recommendation, we said that decisions to remove spare
parts from ship inventories should be based on both demand data and
current and accurate ship configuration information. DOD correctly
noted that critical items related to safety requirements and readiness
optimization should not be removed because they could jeopardize a
ship's safety and mission. We support the Navy's plan to focus
initially on identifying and purging those spare parts that support
systems that are no longer installed on board ships.
DOD concurred with the intent of our fourth recommendation that called
for the Navy to ensure that casualty reports are issued consistent with
high priority maintenance work orders as required by Navy instruction,
to provide a more complete assessment of ship's readiness. We based our
recommendation on the Navy's current maintenance instruction that calls
for casualty reports to be issued for certain high-priority maintenance
actions according to the level of importance that the failed equipment
has on a ship's operations and mission. DOD said that casualty reports
and maintenance orders are inherently different in purpose, and the
instructions should be updated to ensure that casualty reports are
generated when deemed appropriate to get the attention required from
the logistics system. We believe that, while the instruction may need
to be updated or revised, the maintenance data that are gathered under
the current instruction are both relevant and important to the Navy's
ability to assess fully a ship's operations and mission readiness. In
its response, DOD said the Navy has emphasized the need to use
standardized reporting procedures and that fleet commanders have asked
their commanding officers to report on ship status accurately and in a
timely manner through the Status of Resources and Training System
report.
We are sending this report to other interested congressional
committees; the Secretary of Defense; the Secretary of the Navy; and
the Director, Office of Management and Budget. We will also make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at http://www.gao.gov/.
Please contact me on (202) 512-8412 if you or your staff has any
questions concerning this report. Key staff members who contributed to
this report were Allan Roberts, Lionel Cooper, Gary Kunkle, Joel
Aldape, Odilon Cuero, Dale Yuge, Jean Orland, and Nancy Benco.
Sincerely yours,
William M. Solis
Director, Defense Capabilities and Management:
Signed by William M. Solis:
[End of section]
Appendix I: Scope and Methodology:
To identify the extent of spare parts shortages on deployed Navy ships,
we focused on spare parts requisitions by deployed battle groups in the
Atlantic and Pacific fleets during fiscal years 1999-2002. We analyzed
the Navy's goal and supply effectiveness data from its Maintenance and
Material Management (3-M) Database Open Architectural Retrieval System
by identifying supply requisitions for repair parts that were either
filled or not filled from inventories on board deployed ships. We
reviewed reports regarding the Navy's overall ability to fill onboard
spare parts requisitions on deployed ships between 1982 and 2001 in
order to identify any long-term trends. We also reviewed the Navy's
goals and data on the average customer wait-time for critical and
noncritical parts on deployed ships during fiscal years 1999 and 2002.
To determine the reasons for spare parts shortages, we analyzed Navy
data on unfilled requisitions for 6 battle groups deployed during
fiscal year 1999-2000. We analyzed and categorized the reasons for
parts shortages based on the reported data. We also examined Navy
policies and procedures regarding ships' spare parts, including the
need for accurate data and the impact of inaccurate data on the allowed
parts carried on deployed ships. We examined and discussed with Navy
officials the procedures that are used to ensure that accurate ship
configuration and demand data records are maintained and the
circumstances that can affect this accuracy. Moreover, we analyzed the
reasons for the differences between the spare parts provisions, (e.g.,
the range and depth) and the amounts that are actually used to fill
spare parts requisitions in order to gain a better understanding of why
the Navy's provisioning process does not more effectively and
efficiently meet the deployed ships' spare parts requirements.
To examine the impact of spare parts shortages on deployed ships'
operations and mission readiness, we analyzed data on maintenance work
orders and requests for spare parts that were not available on board
the 6 battle groups during selected fiscal year 1999-2000 deployments.
Also, we reviewed the Navy's criteria for assessing the effects of
failed equipment on a ship's ability to accomplish its mission,
particularly the standards for determining what maintenance work orders
result in casualty reports. We then applied the criteria to maintenance
work orders for the Truman (Atlantic Fleet) battle group deployed in
fiscal year 2000 to identify those that should have resulted in
casualty reports reflecting ship operations and mission readiness. We
compared the results of this analysis with data on Navy casualty
reporting to determine if the number of failed equipment items meeting
the criteria for reporting mission readiness degradation were reported
in accordance with Navy criteria, policies, and procedures. We also
reviewed data on casualty reports and SORTS data submitted by deployed
Pacific Fleet surface ships during calendar years 1999, 2000, and 2001
to determine if the casualty reports were reflected in SORTS equipment
readiness reporting. In addition, for six ships in the Lincoln (Pacific
Fleet) battle group deployed in fiscal year 2002, we identified the
total number of parts carried, both range and depth, and compared this
to the number of requisitions submitted and filled from onboard
inventories. We compared the Navy's data on the estimated value of the
onboard inventory with the estimated value of the inventory actually
used in order to gain insight into the dollar impacts of carrying parts
that are not used during ships' deployments. We discussed the results
of this analysis with Navy headquarters and fleet officials.
We reviewed Navy briefings and prior GAO reports regarding the effects
of parts shortages on Navy supply and maintenance actions, and we
discussed the Navy's goals and initiatives intended to assess the
effects of parts shortages on ships' operations and military readiness
with Navy officials at the various locations we visited. These
locations included the Naval Warfare Assessment Station, Corona,
Calif.; the Fleet Technical Support Center, the Naval Air Force, and
the Naval Surface Force, U.S. Pacific Fleet, San Diego, Calif.; the
headquarters, U.S. Pacific Fleet and the Submarine Force, U.S. Pacific
Fleet, Pearl Harbor, Hawaii; the Naval Supply Systems Command, its
Naval Inventory Control Point, and the Naval Sea Logistics Center,
Mechanicsburg, Pa.; and Naval Sea Systems Command and the office of the
Chief of Naval Operations, Washington D.C.
We performed our work from July 2002 to May 2003 in accordance with
generally accepted government auditing standards.
[End of section]
Appendix II: Navy Work Order Priority Code Descriptions:
According to Navy maintenance reporting instructions, Navy ship crews
are required to identify maintenance work order priorities.[Footnote
17] High-priority (Priority 1, 2, and 3) work orders affect equipment
that is critical, extremely important, or important for a ship's
operation. Any maintenance job with one of these three priority codes
is required to generate a casualty report (CASREP). Casualty reports
are directly related to a unit's readiness reporting and identify the
ship's equipment status and impact on the ship's operations and mission
readiness.[Footnote 18]
Priority 1--Mandatory: Critical safety or damage control item.
Required for performance of ship's mission. Required to sustain
bare minimum acceptable level of human needs and sanitation. C-4 CASREP
(Casualty Report) on equipment.
Priority 2--Essential: Extremely important safety or damage control
item. Required for sustained performance of ship's mission. Required to
sustain normal level of basic human needs and sanitation. Required to
maintain overall integrity of ship or a system essential to ship's
mission. Will contribute so markedly to efficient and economical
operation and maintenance of a vital ship system that the pay-off in
the next year will overshadow the cost to accomplish. Required for
minimum acceptable level of preservation and protection. C-3 CASREP on
equipment.
Priority 3--Highly Desirable: Important safety or damage control
item. Required for efficient performance of ship's mission. Required
for normal level of human comfort. Required for overall integrity of
equipment or systems that are not essential, but are required as
backups in case of primary system failure. Will contribute so markedly
to efficient and economical operation and/or maintenance of a vital
ship system that the payoff in the next year will at least equal the
cost to accomplish. Will effect major reduction in future ship
maintenance in an area or system that presently cannot be maintained
close to acceptable standards. Required to achieve minimum acceptable
level of appearance. C-2 CASREP on equipment.
Priority 4--Desirable: Some contribution to efficient performance. Some
contribution to normal level of human comfort and welfare. Required for
overall integrity of other than an essential system or its backup
system. Will contribute to appearance in an important area.
Will significantly reduce future maintenance.
[End of section]
Appendix III: Navy Reasons for Spare Parts Not Onboard Deployed Ships:
Our analysis of the 60,365 unfilled requisitions from the deployments
of six battle groups in fiscal years 1999 and 2000 showed that there
are a number of reasons why the Navy might not stock needed parts on
board ship (see fig. 2). These unfilled requisitions represented
46 percent of all 131,855 requisitions submitted during these
deployments. Our analysis of the reasons identified in the Navy's
database showed that:
* about 17.3 percent (10,472) of the unfilled requisitions were for
parts that were not on the allowance parts list;
* about 44.4 percent (26,787) of the unfilled requisitions were for
parts that were on the allowance parts list but the Navy decided not to
carry them on board; and:
* about 38.3 percent (23,106) of the unfilled requisitions were for
parts that were on the allowance parts list, the Navy decided to carry
them, but they were not in stock when needed.
Figure 2: Spare Parts Requisitions Filled and Unfilled for Six Selected
Battle Groups, Fiscal Years 1999-2000, According to Reasons Identified
by the Navy:
[See PDF for image]
Note: Because of rounding, percentages may not add to 100.
[End of figure]
[End of section]
Appendix IV: Comments from the Department of Defense:
DEPUTY UNDER SECRETARY OF DEFENSE FOR LOGISTICS AND MATERIEL READINESS
3500 DEFENSE PENTAGON WASHINGTON, DC 20301-3500:
August 18, 2003:
Mr. William M. Solis:
Director, Defense Capabilities and Management U.S. General Accounting
Office:
441 G Street, N.W. Washington, DC 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO draft
report, "DEFENSE INVENTORY: Opportunities Exist to Improve Spare Parts
Support Aboard Deployed Navy Ships," dated July 18, 2003, (GAO Code
350210/GAO-03-887).
The Department concurs with recommendations one through three, while
concurring with the intent of recommendation four. An explanation of
the DoD position is enclosed. The Department appreciates the
opportunity to comment on the draft report.
Sincerely,
Diane K. Morales:
Enclosure: As stated:
Signed by Diane K. Morales:
GAO DRAFT REPORT - DATED JULY 18, 2003 GAO CODE 350210/GAO-03-887:
"DEFENSE INVENTORY: OPPORTUNITIES EXIST TO IMPROVE SPARE PARTS SUPPORT
ABOARD DEPLOYED NAVY SHIPS ":
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct the Secretary of the Navy to develop plans to conduct periodic
ship configuration audits and to ensure that configuration records are
updated and maintained in order that accurate inventory data can be
developed for deployed ships. (p.25/GAO Draft Report):
DoD RESPONSE: Concur. Configuration accuracy is a critical element in
providing accurate spare parts support. Navy does have an audit plan
that looks at the current configuration of a ship and provides updated
allowance listings via automated files based on the latest
configuration data. Navy does agree that it needs to be more aggressive
in following up on these configuration changes to ensure the
configuration files on board the ship match those on file in the main
configuration database.
In addition to the ongoing efforts regarding the configuration
management audit plan, a Maritime Allowancing Working Group (MAWG) was
established in 2002 at the Fleet's request to perform a comprehensive
review of the current inventory strategy and allowance processes
including Configuration Management.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Secretary of the Navy to ensure that demand data for parts
entered into ships supply systems are recorded promptly and accurately
as required to ensure that onboard ship inventories reflect current
usage or demands. (p.25/GAO Draft Report):
DoD RESPONSE: Concur. Good demand reporting is essential but this
report does not adequately substantiate the assertion regarding demand
data accuracy.
Regarding the 38% of the unfilled requisitions contained on the
allowance list but not in stock, the report appears to assume this is
due entirely to inaccurate data reporting. This is not always the case
and many items listed on Allowance Parts Listings (APLs) do not qualify
for allowances for the following reasons: The ship's designated repair
capability; results of the readiness optimization calculation used in
the sparing model; and the forecasted demand falling below the sparing
threshold.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
direct the Secretary of the Navy to periodically identify and purge
spare parts from ship inventories when they have not been requisitioned
for long periods of time and are not needed according to current and
accurate configuration and parts demand information. (p.25/GAO Draft
Report):
DoD RESPONSE: Concur. It is agreed that a more comprehensive effort
must be applied to identifying excess material, and when deemed
appropriate, purge those items from the ship's inventory.
We do not agree that the criteria for purging material should be based
solely on demand history. Processes currently exist that judiciously
remove parts based on several factors, to include demand, criticality,
safety, and cost. There is currently an automated process that
automatically triggers removal of the spare based on configuration
changes. Typically, many items are onboard in support of safety
requirements and readiness optimization, and although some have little
or no demand history, removal of these critical items could jeopardize
the safety of our sailors and the operational mission of the ships. The
Navy will focus its attention and initial efforts on identifying and
purging those spares parts that support systems no longer installed on
ships.
RECOMMENDATION 4: The GAO recommended that the Secretary of Defense
direct the Secretary of the Navy to ensure that casualty reports are
issued consistent with high priority maintenance work orders, as
required by Navy instruction, to provide a more complete assessment of
ship's readiness. (p. 25/GAO Draft Report):
DoD RESPONSE: Concur with intent. It is agreed that that the Navy's
current maintenance instruction needs to be updated to ensure that
Casualty Reports are generated only when deemed appropriate to ensure
they get the level of attention required of the logistics system. It is
not agreed that casualty reports should be issued consistent with
maintenance orders as discussed on page 19 of this report.
Casualty Reports and maintenance orders are inherently different in
purpose. Critical repairs completed within 48 hours are generally not
to be reported on a casualty report, and there is little correlation
between casualty report severity and maintenance order priority as
suggested by the draft report. Specifically, a priority 1 maintenance
order might qualify as a C2 vice C3/C4 Casualty Report if the
degradation applies to secondary mission equipment. Similarly, a
primary mission system requiring maintenance may or may not justify a
C2 Casualty Report depending on the amount of redundancy within that
system. That being said, the Navy has emphasized that standardized
reporting procedures must be adhered to and the Fleet Commanders have
notified their Commanding Officers to ensure they report the status of
their ships accurately and on time via the Status of Resources and
Training System (SORTS) report.
[End of section]
FOOTNOTES
[1] Off-ship sources include shore-based suppliers, such as Navy and
Defense Logistics Agency warehouses and commercial vendors, and other
ships in the fleet where needed spare parts may be obtained.
[2] U.S. General Accounting Office, Defense Inventory: Navy Logistics
Strategy and Initiatives Need to Address Spare Parts Shortages, GAO-03-
708 (Washington, D.C.: June 27, 2003).
[3] Battle groups generally consist of 8 to 12 ships and include an
aircraft carrier and 1 or more cruisers, destroyers, frigates,
submarines, and supply ships.
[4] Supply effectiveness rates refer to gross availability, or the
percentage of parts that were in stock on the ship when requisitioned.
[5] According to Navy guidance, each high-priority maintenance work
order (with priority codes 1, 2, and 3) filled out by a ship's crew is
supposed to generate a casualty report (CASREP). Casualty reports are
directly related to a unit's readiness reporting; they identify a
ship's equipment status and its impact on ship operations and mission
readiness. Appendix II shows the relationship between these two
reporting systems, according to Navy maintenance reporting guidance.
[6] These goals were defined in the Navy instruction OPNAVINST
4441.12B, dated May 1983, Retail Supply Support of Naval Activities and
Operating Forces.
[7] While the Navy's supply effectiveness goals vary, the goal is
65 percent for surface ships and aircraft carriers, not including the
aircraft.
[8] OPNAVINST 4441.12D, Apr. 29, 2003, Retail Supply Support of Naval
Activities and Operating Forces.
[9] The Navy has used a wait-time goal of 135 hours, or about 5.6 days,
for supplying high-priority parts to ships outside the continental
United States. This number is based on an average of the times needed
to fill parts requisitions from both onboard ship inventories and off-
ship sources. It assumes that 65 percent of all requisitions are filled
from onboard inventories within 2 hours and the remaining 35 percent
are filled from off-ship sources within 16 days.
[10] These are parts needed for immediate maintenance-related use.
[11] The Navy Sea Systems Command has set a goal of 95 percent accuracy
in its configuration data for ships. Ships can have 35,000 to 125,000
configuration records each. An audit entails examining a randomly
selected sample of configuration records and actual equipment installed
onboard and comparing them with each other for accuracy.
COMNAVSURFLANT/COMNAVSURPAC Instruction 4400.1J, dated Aug. 17, 2000.
[12] Ships' Maintenance and Material Management (3-M) Manual, OPNAV
Instruction 4790.4C, Nov. 7, 1994.
[13] Operational Reports NWP 1-03.1, (Formerly NWP 10-1-10, letter of
promulgation Nov. 1987).
[14] Status of Resources and Training System (SORTS), NWP 10-1-11
(Rev. A).
[15] Title 10 U.S.C. Section 7304 requires a board of Naval officers to
conduct a material inspection of all naval ships at least once every
3 years, if practicable, and to report when, as a result of a material
inspection, a ship is found unfit for further service.
[16] A deficiency is an item that requires corrective action to bring
the material condition of the ship into compliance with required
standards.
[17] Ships' Maintenance and Material Management (3-M) Manual, OPNAV
Instruction 4790.4C, Nov. 7, 1994.
[18] Operational Reports NWP 1-03.1 (formerly NWP 10-1-10, letter of
promulgation Nov. 1987).
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