GAO: Early Focus on Sustainment Could Save Billions

The U.S. Government Accountability Office (GAO) has released an analysis of naval shipbuilding concluding that increasing focus on sustainment early in the acquisition process could save billions.

The GAO investigated every class of ships the Navy recently built and found 150 examples of systemic maintenance problems. “Sailors showed us things like failed engines, faulty electronics, and clogged toilets. These problems might have been prevented with some attention to future maintenance concerns when designing and building the ships,” states the GAO.

The Navy has delivered warships - such as aircraft carriers, destroyers, and submarines - to its fleet over the past 10 years that require more effort to sustain than initially planned. In assessing how these classes of ships are sustained, GAO found 150 examples of class-wide problems, such as unreliable ship systems. These problems stemmed from shipbuilding programs not identifying, evaluating, or mitigating sustainment risks during the acquisition process. GAO found that it would cost the Navy $4.2 billion to correct just the 30 percent of these problems for which the Navy had data on estimated repair costs.

Noting that about 70 percent of a ship’s lifecycle costs are operations and maintenance costs, the GAO says maintaining the Navy’s new ships will cost $130 billion more than planned.

The GAO found that shipbuilding programs' requirements for sustainment reflect weaknesses with how Department of Defense (DOD) policy defines these requirements for ships. “Sustainment requirements should influence acquisition decisions that determine the sustainability of a ship class, such as the ship's design. However, the Navy's sustainment requirements do not provide key information on how reliable and maintainable mission-critical systems should be and, therefore, cannot adequately inform acquisition decisions.”

The GAO also found that shipbuilding programs did not consistently address sustainment risks in acquisition planning documents. For example, the operating and support costs included in cost estimates did not capture all sustainment risks that could affect costs or evaluate sensitivity to changing sustainment assumptions, contrary to DOD and Navy cost estimating guidance. As a result, for six shipbuilding programs whose costs GAO could assess, the Navy had underestimated sustainment costs by $130 billion.

“The Navy has begun making some changes to its acquisition oversight process, such as developing sustainment program baselines and adding a sustainment oversight review. While positive, these changes focus on considering sustainment after key decisions are made early in the acquisition process.” 

The GAO also found that DOD is not required to provide detailed information about shipbuilding programs' sustainment cost growth to Congress. As such, Congress does not have full insight into the extent of shipbuilding programs' cost growth and why such growth occurred.

The GAO has made 11 recommendations to the Navy including that the Secretary of Defense should change its definition for setting operational availability for ships in its Joint Capabilities Integration and Development System policy by adding information that defines the operational availability requirement by mission area in addition to the ship level and includes all equipment failures that affect the ability of a ship to perform primary missions. 

The Secretary of Defense should also change its definition for setting materiel availability for ships in its Joint Capabilities Integration and Development System requirements policy to include all factors that could result in a ship being unavailable for operations, such as unplanned maintenance, unplanned losses, and training.

The GAO report is available here.