Defense Infrastructure: Actions Needed to Improve the Navy's Processes for Managing Public Shipyards' Restoration and Modernization Needs

DOD concurred with this recommendation and added that while the Navy recognizes the importance of strategic planning in development of recapitalization requirements, those plans have to be at a Regional and Installation level taking into account all Navy Missions within current funding constraints. As of September 2011, NAVSEA is developing a corporate shipyard strategic infrastructure plan, which includes the 7 essential elements as identified by GAO and will address future restoration and modernization needs. As of April 2012, the FY 2012 National Defense Authorization Act modified 10 USC 2476, which changed shipyard investment parameters, and delayed updating the infrastructure plans to reflect the 7 essential elements of a strategic plan. The 2012 NDAA also required the Navy to submit a plan to address the facilities and infrastructure requirements at each public shipyard by September 1, 2012. As of February 2013, NAVSEA has provided guidance to the shipyards that lays out the requirement for them to develop strategic plans that reflect the 7 essential elements of a comprehensive strategic planning framework.

DOD concurred with this recommendation. Through the Infrastructure Condition Assessment Program (ICAP), the Navy has a program in place to assess the condition of shipyard buildings and waterfront structures and have this information correctly reported in its relevant IT systems. Additionally, configuration will also be assessed and reported as necessary using the asset evaluation program. For example, as of September 2011, the Norfolk Naval Shipyard updated its assessment of property report cards, configuration ratings for Puget Sound Naval Shipyard were updated in 2012, and the Portsmouth Naval Shipyard configuration ratings asset evaluations were completed and waterfront inspections were conducted in July 2014. According to a Navy official, as of April 2012, the Naval Facilities Engineering Command's Business Management System processes 15.1 through 15.5, describes when condition ratings should be updated, how to update them, how to interpret condition ratings, and how to use condition rating information to support project development. Upon completion of a condition assessment or asset evaluation, ratings are updated in the Internet Naval Facilities Assets Data Store (iNFADS), which feeds other relevant Navy and DOD IT systems. Based on these actions, we believe that the Navy has more complete and accurate information to better estimate its shipyard restoration and modernization needs.

DOD concurred with this recommendation. The Navy had recently funded an effort to investigate the replacement unit cost factor (RUC) for dry-docks. The intent of the investigation is to ensure the quality of information of the specific inputs/components and ensure the RUC for dry docks is in-line with the rest of the DOD infrastructure. Also, the Navy is incorporating dry-docks into the condition assessment program to ensure they are accurately represented in data systems. As of September 2011, the Navy stated that in June 2011, the Commander Navy Installations Command (CNIC) initiated a review to update the replacement unit cost factor for drydocks. The study will examine worldwide drydock construction as well as historical Navy drydock construction and unique requirements of nuclear-capable drydocks. The draft report related to this effort is expected in November 2011. As of April 2012, the report on an updated RUC has been received by CNIC and is being analyzed. Based on the review, which is expected to be completed by June 1, 2012, the Navy will decide whether to recommend updating the RUC in the DOD Facilities Pricing Guide (UFC3-701-01). As of February 2013, upon thorough review of the report recommending an updated RUC for dry docks, CNIC has accepted the assessment and will recommend to Deputy Under Secretary for Installations and Environment that the RUC proposed in the report be accepted and incorporated into the next revision of the DOD Facilities Pricing Guide. The proposed RUC of $1,197.03 per square foot is approximately 85% higher than the FY 2011 published RUC of $646.05 per square foot.

DOD concurred with this recommendation. Navy configuration and condition ratings include an assessment of the impact of facilities on quality of life for the employees. These ratings are used in prioritization of facility investments.While we believe the Navy is making improvements in its configuration and condition ratings, these efforts could be enhanced by the Department developing a mechanism for systematically collecting information on the employees reported quality-of-life issues and documenting corrective action. As of March 2011, the Navy stated that its configuration and condition ratings include an assessment of the impact of facilities on the quality of life for the employees and are used in its process to prioritize its restoration and modernization projects.