Navy Shipbuilding: Increasing Supervisors of Shipbuilding Responsibility Could Help Improve Program Outcomes
Fast Facts
The Navy often accepts delivery of incomplete ships after significant delays in construction and considerable cost growth.
At major shipyards, the Navy has an onsite organization—the Supervisors of Shipbuilding, Conversion, and Repair—that's responsible for overseeing construction and managing shipbuilding contracts. The Supervisors' expertise provides foresight into shipbuilding problems, but we found the Navy isn't taking full advantage of it.
Among other things, we recommended ensuring that the Supervisors are consistently represented earlier in the shipbuilding process, starting before contracts are awarded.
A crane moves the lower stern into place on an aircraft carrier.
Highlights
What GAO Found
Over the past decade, GAO found that the U.S. Navy has faced significant challenges in meeting its shipbuilding goals, experiencing years of construction delays, billions of dollars in cost growth, and frequent quality and performance shortfalls. The Supervisors of Shipbuilding, Conversion and Repair (SUPSHIP) serve as the Navy's on-site technical, contractual, and business authority for the construction of Navy vessels at major private shipyards. The SUPSHIPs are responsible for evaluating the construction and business practices of Navy shipbuilders, but face challenges in improving shipbuilding results (see figure).
Factors Limiting the Ability of the Navy's Supervisors of Shipbuilding, Conversion and Repair (SUPSHIP) to Help Improve Shipbuilding Program Results
These challenges impede the SUPSHIPs' effectiveness and accountability in a number of ways:
- Variation in quality requirements across Navy shipbuilding contracts hinders the SUPSHIPs' ability to provide consistent oversight of shipbuilding quality.
- Limited input from the SUPSHIPs prior to contract awards does not leverage their expertise to support well-informed decision-making.
- Omission of SUPSHIP reporting from the Navy's process for approving acceptance of ships from the shipbuilders reduces accountability and misses opportunities to ensure that independent SUPSHIP input on ship quality and readiness informs this key decision.
- The SUPSHIPs' position within the Naval Sea Systems Command and their accountability to different technical and acquisition organizations dilutes their ability to be a distinct, authoritative voice in decision-making for Navy shipbuilding programs. Congress passed legislation in December 2021 to establish a Deputy Commander dedicated to the SUPSHIPs, which should help improve their authority and accountability.
Why GAO Did This Study
Despite the efforts of the SUPSHIPs and others to assure construction quality and contract execution, Navy shipbuilding results have regularly fallen short of program expectations. These results have raised questions about the Navy's ability to effectively oversee shipbuilder performance throughout the construction of new ships.
Congress included a provision in a Senate report for GAO to review the SUPSHIPs' oversight efforts. GAO examined, among other objectives, the SUPSHIPs' role in assuring shipbuilding quality and any challenges that limit their ability to help improve shipbuilding program results.
To do this work, GAO reviewed federal regulations as well as policy, guidance, and reporting related to the SUPSHIPs' oversight activities and results. GAO also interviewed DOD and Navy officials about shipbuilding oversight and the SUPSHIPs' role in the execution of shipbuilding programs.
Recommendations
GAO is making five recommendations to the Navy, including that it take steps to ensure regular use of its quality program standard in shipbuilding contracts; provide the SUPSHIPs with direct representation in evaluation and decision-making processes prior to contract awards; and require the SUPSHIPs to report on the quality and readiness of each ship prior to the Chief of Naval Operations' approval decisions for ship acceptance. The Navy agreed with all five recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Navy | The Secretary of the Navy should determine if the Naval Sea Systems Command's Quality Program Standard for Construction of Naval Vessels requires any updates and then take steps to ensure regular use of the standard in Navy shipbuilding contracts. (Recommendation 1) |
The Department of the Navy concurred with this recommendation. In May 2024, the Navy stated it is working on an update to the Quality Program Standard for Construction of Naval Vessels with anticipated completion in fiscal year 2025.
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| Department of the Navy | The Secretary of the Navy should evaluate whether opportunities exist for additional targeted oversight by the SUPSHIPs of critical government-furnished equipment away from the shipyards to support improvements to overall shipbuilding results. (Recommendation 2) |
The Department of the Navy concurred with this recommendation. In May 2024, the Navy shared that a working group developed to evaluate the need for additional oversight determined no additional actions are needed despite several quality issues with critical government furnished equipment that have occurred since this report was issued. However, as of September 2024 the Navy has yet to provide documentation of this determination. We will continue to monitor the Navy's efforts to respond to our recommendation.
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| Department of the Navy | The Secretary of the Navy should ensure that, prior to contract award decisions, the Naval Sea Systems Command evaluates the extent to which awarding a shipbuilding contract to a prime contractor that is not the shipbuilder presents additional government risk related to contractor business systems compliance and determine options, as needed, to mitigate the risk. (Recommendation 3) |
The Department of the Navy concurred with this recommendation. In May 2024, the Navy stated that it provided guidance on the importance of evaluating the extent to which awarding a contract to a prime contractor that is not the shipbuilder may present additional government risk related to contractor business system. However, as of September 2024 the Navy has yet to provide this guidance documentation. We will continue to monitor the Navy's efforts to respond to our recommendation.
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| Department of the Navy | The Secretary of the Navy should ensure that Naval Sea Systems Command Instruction 5450.36C, Mission, Functions, and Tasks of the Supervisors of Shipbuilding, Conversion and Repair, United States Navy, is updated to provide the SUPSHIPs direct representation in the evaluation and decision-making processes for all shipbuilding programs, beginning with the pre-contract award stages of requirements development and ship design. (Recommendation 4) |
The Department of the Navy concurred with this recommendation. In May 2024, the Navy stated it had created a joint working group to develop a strategy for more proactive SUPSHIP involvement in the acquisition strategy. Work is ongoing and the anticipated completion date for these activities is in fiscal year 2025.
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| Department of the Navy | The Secretary of the Navy should require that, in coordination with the Commander of Naval Sea Systems Command, the SUPSHIPs' Deputy Commander provide a report to the Chief of Naval Operations that attests to the quality and readiness of each ship prior to the approval of ship acceptance. (Recommendation 5) |
The Department of the Navy concurred with the intent of this recommendation, but not the proposed method. In May 2024, the Navy stated work is ongoing to address this recommendation and anticipates completion in fiscal year 2025.
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