Navy Shipbuilding: Policy Changes Needed to Improve the Post-Delivery Process and Ship Quality
Fast Facts
In 2013, we found that shipbuilders regularly deliver ships to the Navy with lots of defects. Are all of the significant defects corrected before the Navy provides these ships to the fleet?
We examined 8 Navy ships and found that all either entered or will likely enter the fleet with unfinished work and quality problems.
Also, Navy reports to Congress don't indicate if ships are truly complete or actually ready for operations when they enter the fleet.
We recommended the Navy take 4 actions to improve ships' quality when they enter the fleet, and provide more detailed information to Congress on the true status of ships.
Number of Defects at Delivery and at Time Ships in Our Sample Entered the Fleet
Bar chart showing numbers of defects at delivery lower, but still present, when ships entered fleet
Highlights
What GAO Found
GAO reviewed six ships valued at $6.3 billion that had completed the post-delivery period, and found they were provided to the fleet with varying degrees of incomplete work and quality problems. GAO used three quality assurance metrics, identified by Navy program offices, to evaluate the completeness of the six ships—LPD 25, LHA 6, DDG 112, Littoral Combat Ships (LCS) 3 and 4, and SSN 782—at delivery and also at the time each ship was provided to the fleet. Although the Navy resolved many of the defects by the end of the post-delivery period, as the table below shows, quality problems persisted and work was incomplete when the selected ships were turned over to the operational fleet.
Number of Quality Problems or Defects at the Beginning and End of the Post-Delivery Period across Six Selected Ships
|
At delivery |
At the time the Navy provided the ship to the fleet |
|
|
Significant construction deficiencies |
363 |
45 |
|
Systems not meeting minimal functional standard |
139 |
54 |
|
Significant deficiencies in mission-essential equipment |
N/Aa |
53 |
Source: GAO analysis of Navy documents and data. | GAO-17-418
aThis information is not evaluated at delivery
Fleet officials reported varying levels of concern with the overall quality and completeness of the ships, such as with unreliable equipment or a need for more intense maintenance than expected. For CVN 78 and DDG 1000, the Navy plans to complete significantly more work and testing during the post-delivery period than the other six ships GAO reviewed. As such, these ships are at a greater risk of being provided to the fleet at the end of their post-delivery periods with incomplete construction work and unknowns about quality.
The Navy's ship delivery policy does not facilitate a process that provides complete and quality ships to the fleet and practices do not comport with policy. The policy emphasizes that ships should be defect-free and mission-capable, but lacks clarity regarding what defects should be corrected and by when. Without a clear policy, Navy program offices define their own standards of quality and completeness, which are not always consistent. Further, because the Navy's Board of Inspection and Survey (INSURV) does not inspect ships at the end of the post-delivery period, it is not in a position to verify each ship's readiness for the fleet, as required by Navy policy. The Navy has not assessed the costs and benefits of ensuring INSURV does this. Addressing these policy concerns would improve the likelihood of identifying and correcting deficiencies before fleet introduction and increase consistency in how the Navy defines quality.
The Navy does not use consistent definitions for key milestones in its reports to Congress—such as delivery or Initial Operational Capability (IOC)—and, therefore, these milestones are not as informative as they could be regarding ship quality and completeness. For example, the Navy has routinely declared IOC on new ship classes without having demonstrated that ships are able to perform mission operations—contrary to Department of Defense (DOD) guidance, which, for nearly all acquisition models, generally states that IOC should be declared only after successful operational testing that demonstrates performance.
Why GAO Did This Study
The U.S. Navy spends at least $18 billion per year on shipbuilding—a portion of which is spent after ships are delivered. During the post-delivery period—after delivery from the shipbuilder and before the ships enter the fleet—Navy ships undergo a variety of tests, trials, and construction.
GAO was asked to assess the post-delivery period, including quality and completeness of ships when they are delivered to the fleet. The Senate Report on the National Defense Authorization Act for Fiscal Year 2017 included additional questions about ship status after delivery. This report assesses the extent to which the Navy (1) provides complete and quality ships to the fleet, (2) has a ship delivery policy that supports those efforts, and (3) reports ship quality and completeness to Congress. GAO reviewed a nongeneralizable sample of eight Navy ships, six of which have entered the fleet and two that recently began the post-delivery period. GAO reviewed program documentation and interviewed Navy officials.
Recommendations
The Navy should revise its ship delivery policy to identify what kinds of defects should be corrected and by when and study how to best ensure that INSURV verifies ships. Also, the Navy should reflect in its reports to Congress key milestones and consistent definitions in line with DOD policy. DOD did not concur with two recommendations, partially concurred with a third, and fully agreed with a fourth. GAO stands by its recommendations, which will help ensure that complete and quality ships are provided to the fleet and that Congress is provided with meaningful information on ship status.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense |
Priority Rec.
The Secretary of Defense should direct the Secretary of the Navy to revise the Navy's ship delivery policy to clarify what types of deficiencies need to be corrected and what mission capability (including the levels of quality and capability) must be achieved at (1) delivery and (2) when the ship is provided to the fleet (at the obligation work limiting date (OWLD)). In doing so, the Navy should clearly define what constitutes a complete ship and when that should be achieved. |
DOD did not initially agree with this recommendation but has since changed its position to partially agree. As of February 2024, Navy officials stated that the Navy plans to review and update its ship delivery policy by September 2024 to improve its clarity. Officials stated that when updating the policy, the Navy would consider this recommendation, as well as feedback from Navy users of the policy. However, officials noted that the Navy believes it would be impractical to fully define in its ship delivery policy what constitutes a complete ship and by when ship completion should be achieved, as GAO recommended. We maintain that because the Navy's ship delivery policy is the primary policy governing quality standards for Navy ships at delivery, it must clearly describe the level of quality and completeness required for Navy ships at key points in the shipbuilding process. Fully implementing our recommendation and making other clarifications in response to stakeholder feedback would increase the Navy's likelihood of identifying and correcting deficiencies before fleet introduction and reduce the Navy's risk of providing incomplete and deficient ships to the fleet.
|
| Department of Defense |
Priority Rec.
The Secretary of Defense should direct the Secretary of the Navy to reconcile policy with practice to support INSURV's role in making a recommendation for fleet introduction. Accomplishing this may require a study of the current timing of ship trials, and the costs and benefits associated with adding an INSURV assessment prior to providing ships to the fleet. |
DOD initially disagreed with our recommendation, but in December 2022, DOD changed its position to partially concur. The Office of the Secretary of Defense (OSD) stated it did not believe a study was needed to assess and potentially adjust the timing of INSURV's ship trials, as the Navy's ship delivery policy already provides INSURV with the option to request a Special Trial before fleet introduction if a ship has unresolved significant deficiencies. INSURV officials confirmed the Navy has significantly increased the use of Special Trials, with every ship that had a final contract trial in fiscal year 2022 also undergoing a subsequent Special Trial or retrial to allow INSURV to conduct an additional inspection before fleet introduction. The Navy's increased use of Special Trials before fleet introduction meets the intent of our recommendation. We note that the Navy plans to update its ship delivery policy to codify the criteria for conducting Special Trials. We will continue to monitor the Navy's ongoing efforts to revise its ship delivery policy through a related recommendation.
|
| Department of Defense | The Secretary of Defense should direct the Secretary of the Navy to reflect additional ship milestones in Selected Acquisition Reports to Congress, including OWLD and readiness to deploy. |
DOD partially concurred with this recommendation. DOD agreed to include obligation work limiting dates (OWLD) in its Selected Acquisition Reports to Congress and has included OWLD since December 2018. DOD did not agree to include a readiness to deploy date because the information is considered too sensitive to document in the SAR. Since DOD did meet the spirit of the recommendation, we are closing it as implemented.
|
| Department of Defense | The Secretary of Defense should direct the Secretary of the Navy to, in Selected Acquisition Reports to Congress, ensure that the criteria used to declare IOC aligns with DOD guidance, and reflect the definition of this milestone in the reports. |
DOD concurred with this recommendation. For shipbuilding programs that have not yet achieved initial operational capability (IOC), the Navy will include the IOC definition in its Selected Acquisition Reports to Congress and, as of December 2018, has begun reporting this information for some programs. The department does not plan to revisit existing IOC definitions, as these definitions have already been approved by department leadership. However, for new shipbuilding programs going forward, the department plans to develop improved IOC definitions in line with the findings of our report, as it has done for its new guided missile frigate program. The IOC definitions for these new programs will be focused on ships' demonstrated operational capability, rather than the achievement of schedule milestones. We have determined that these actions meet the intent of our recommendation.
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