The idea of bringing smaller yards into the industrial base has been one of the positives to come out of the discussions of Distributed Maritime Operations and its call to have a lot of small and unmanned ships in the fleet: more companies can compete for these types of ships, bringing fresh ideas and a larger industrial base for the Navy to work with.
However, if the large yards see a decline in business, it’s unclear what that will mean for the yard and their workers. For example, there is only one yard that builds destroyers, which may be in less demand under the upcoming force structure assessment, still being reviewed by the Pentagon.
The concern over the capacity of the handful of public and private US shipyards and the increasing time it takes them to do scheduled maintenance work has been top of the Navy’s leadership’s to-do-list as it struggles to plan.
One answer could be to bring in smaller commercial shipyards that haven’t traditionally worked with the Navy, while bringing a number of large shipbuilding companies into the fold to begin performing repair and overhaul work.
“There are shipyards that maybe don’t think they’re into overhaul mode but they probably need to be. They should be available or trying to make themselves available for overhaul work. There’s capacity there that hasn’t been tapped yet.”
A number of small, commercial shipyards could build the kinds of smaller manned and unmanned vessels the Navy and Pentagon leadership are looking at as part of the revamped 30-year shipbuilding plan, and much-delayed force structure assessment.
Work on destroyers and amphibious ships – while certainly not in jeopardy of going away altogether – could see reduced demand as the Navy and Marine Corps eye smaller combatants like a frigate, and a Light Amphibious Warship (LAW) and small amphib in lieu of the traditional ships Ingalls has built for decades.
Many shipbuilders not only work on Navy warships but auxiliaries, foreign military sales ships and commercial ships. These yards would all be set up well to compete for small or unmanned ships for the Navy, but they might be going up against large yards if they find themselves needing the work, too.
“Not knowing what the force structure analysis is going to tell us we need, it’s hard to say at this point, because the big yards could flex, absolutely. Are they better aligned at the moment to build the larger ships that they’re building? Yes. We’ll just have to see how the [FSA] plays out.”
Navy has indicated that, in a time of war, small repair yards could be called upon to help build ships; and they suggested that large yards could look to repair work to supplement any lost shipbuilding work – highlighting the predicament the entire enterprise finds itself in, with capacity and capability not necessarily matching up to needs and budgets.
“We’re not as effective or efficient — we have so much to be proud of — but we can’t get ships delivered on time with the predictability we need today.”
US will be hard-pressed to repair ships quickly enough during uptempo operations, underscoring concerns recently put forth by the Marine Corps
acknowledging that “replacing ships lost in combat will be problematic,”
Because the US “industrial base has shrunk while peer adversaries have expanded their shipbuilding capacity. In an extended conflict, US will be on the losing end of a production race.”
The commandant of the Marine Corps talked about the concern he has regarding the ability of the Navy shipbuilding industrial base and ship repair industrial base to restore or rebuild the fleet in the face of losses that might occur in a conflict.
The commandant also indicated that this is an element of deterrence: if you don’t have the ability to sustain a fight, a protracted fight, then perhaps your adversaries think they can wait you out or just push through and eventually you’ll get to the point where you can no longer continue the combat.”
Some of the questions asked during this planning effort were how shipbuilders could rapidly deliver ships nearing the end of their construction and how they could accelerate construction of hulls still in early phases of work.
Noting that submarine builders take on submarine overhauls to supplement their construction work, there are shipyards that maybe don’t think they’re back into overhaul mode, but they probably need to. For example, one of the yards is able to do overhauls and new construction at the same time.
In the past, Yards have been swayed against doing repair work because, depending how the contract is structured, it could be a financially risky venture, especially given how common it is for growth work to appear once an overhaul is started.
There is capacity there that hasn’t been tapped yet. It’s tried in the past, and just because someone said no in 2018 doesn’t mean they’re going to say no in 2021.
It’s no secret that the Navy’s four public shipyards have prioritized attack submarines last, instead of focusing the yards’ limited resources on aircraft carrier maintenance and ballistic missile submarine refuelings.
But even though the SSBN refuelings are drawing to an end, which should free up resources for SSN maintenance, the time SSNs will sit idle waiting for maintenance work to begin will actually continue to increase for the next two years. The problem has been in both the number of subs sitting idly and the duration that each sub is waiting for its turn in the repair yard.
The backlogs will be increasingly difficult to push through, as Pentagon budgets are likely to remain flat in coming years, pinching shipbuilding and repair budgets as the Navy moves out on its new Columbia-class submarine effort at the same time it undertakes a major overhaul of many Virginia-class subs.
1. Maintenance Delays Result in Challenges to Rebuild Readiness
The Navy continues to face persistent and substantial maintenance delays that affect the majority of its maintenance efforts and hinder its attempts to restore readiness. From fiscal year 2014 to the end of fiscal year 2019, Navy ships have spent over 33,700 more days in maintenance than expected. The Navy was unable to complete scheduled ship maintenance on time for about 75 percent of the maintenance periods conducted during fiscal years 2014 through 2019, with more than half of the delays in fiscal year 2019 exceeding 90 days. When maintenance is not completed on time, fewer ships are available for training or operations, which can hinder readiness.
2. Actions to Address Main Factors Causing Maintenance Delays
The ability of the Navy’s four shipyards to complete aircraft carrier and submarine maintenance on time directly affects military readiness because maintenance delays reduce the amount of time aircraft carriers and submarines are available to perform their missions and protect our national security. The Navy’s four shipyards have continued to face chronic and substantial delays in over half of aircraft carrier and more than three-quarters of submarine maintenance periods, and the Navy has experienced substantial growth in idle time for submarines awaiting the start of maintenance periods.
The Navy has recognized the factors associated with maintenance delays and has begun focusing upon the unplanned work and workforce factors that are contributing to most aircraft carrier and submarine maintenance delays. However, even though the Navy has taken steps, such as attempting to more accurately project the duration and resource requirements for planned maintenance on aircraft carriers and submarines, continuing to routinely and consistently use overtime to meet planned maintenance is untenable.
Shipyard Performance to Plan initiative may help NAVSEA and shipyard leadership better understand factors contributing to maintenance delays and inform decisions to address them. However, NAVSEA has not developed over half of its metrics for measuring the impact of the unplanned work and workforce factors or implemented related goals, action plans, milestones, and a monitoring process to improve the timely completion of maintenance.
Set of metrics would help the Navy better address the main causes of maintenance delays, metrics on their own would not resolve those issues. Unless NAVSEA uses the key elements of a results-oriented management approach to address factors contributing to maintenance delays such as unplanned work and workforce issues at the Navy shipyards, delays in maintenance periods and idle time are likely to persist. Completing these actions as soon as possible could increase the overall availability of aircraft carriers and submarines to perform needed training and operations in support of their various missions and improve readiness
3. Challenges in Measuring Performance/Planning of Maintenance Work
The Army and Marine Corps operate large industrial depots to maintain, overhaul, and upgrade numerous weapon systems and equipment. The depots play a key role in sustaining readiness by completing maintenance on time and returning refurbished equipment to warfighting customers. Army is recommended to develop procedures to ensure depot input on metrics, develop guidance for depot customers, and analyze the causes of maintenance changes; and that the Marine Corps develop a complete baseline
Both services are also improving their performance metrics in order to better manage depot maintenance. The Army’s initiative to develop a new performance metrics framework shows promise, but Army depot officials told us that they have significant concerns about how and whether AMC is factoring in their input when developing the new metrics. It is particularly important that AMC develop procedures to ensure that it will incorporate depot stakeholder input into the new metrics framework for the Army’s organic industrial base through iterative and ongoing processes.
Doing so will allow the Army to develop maintenance-related metrics that are beneficial for helping officials at all levels—AMC, LCMC, and depot—to assess and improve depot performance. Moreover, the Marine Corps does not yet have a complete baseline to accurately measure the effectiveness of its planning for depot maintenance. Establishing a complete baseline will allow the Marine Corps to better assess how well it has planned its depot maintenance work by comparing this plan against actual performance.
Both the Marine Corps and the Army have taken steps to plan and execute depot maintenance more efficiently and effectively. The Marine Corps has undertaken several efforts to revise its depot maintenance planning process, and to analyze and address the reasons for changing customer needs. The Army has taken steps to synchronize its depot planning timelines to better align resources and requirements. However, developing guidance for depot customers to synchronize these timelines would better position Army depots to make decisions based on the most accurate information possible, as early as possible. Additionally, systematically analyzing the causes of changing customer needs would help the Army identify why its depots experience such variability in their workload. This, in turn, would better position the Army to identify specific solutions for reducing such unplanned changes
4. Depot Maintenance Backup Inventory Reserve Sustain Readiness The Navy and Marine Corps provide operational units with replacement aircraft or vehicles, known as backup aircraft and DMFA, to maintain readiness levels when a unit’s aircraft or vehicle undergo depot maintenance, modification, or repair. We reviewed the backup aircraft for the F/A‑18 aircraft, T‑45 aircraft, and MH‑60 helicopter and the DMFA for the Assault Amphibious Vehicle, Light Armored Vehicle, and Mine Resistant Ambush Protected vehicle. The on‑hand quantity of backup aircraft and depot maintenance float vehicles can change daily due to fluctuations in depot workload.
The insufficient quantity of available backup aircraft occurred because the squadrons and training wings used the backup inventory to transition squadrons to newer models and replace training aircraft that were damaged to the extent that repair was uneconomical or impractical. also extended the service life of the F/A‑18 and T‑45 aircraft. Although pilots were receiving the required amount of training before a deployment, a Navy official stated it was a problem because pilots were barely meeting the minimum requirement. In addition, the Navy and Marine Corps could experience a future shortfall of trained pilots, potentially impacting mission readiness if aircraft shortages continue
5. Carryover Metric Provides Quality Information on Funded Unfinished Work
DoD allows carryover from one fiscal year to the next to ensure the smooth flow of maintenance work performed at depots. DoD has reported that approximately 6 months of carryover is optimal. Excess carryover (i.e., more unfinished work than allowed) may reflect an inefficient use of resources and tie up funds that could be used for other priorities. Congress directed DoD to report on its current DoD carryover metric and consider alternatives.
DoD’s report discussed three carryover metrics: the current DoD carryover metric, an Office of the Secretary of Defense-proposed carryover metric, and an Army-proposed carryover metric. DoD’s historical carryover and the metrics presented by DoD have been reviewed. This report, among other things, (1) describes the total carryover for fiscal years 2007 through 2018, and the reasons for it; (2) evaluates the carryover metrics DOD presented in its report to Congress and whether they would provide quality information; and (3) describes private industry and foreign military policies for determining allowable carryover
DoD allows depots to carry over billions of dollars of funded unfinished work from one fiscal year to the next to facilitate the smooth flow of work. While some carryover of work is appropriate, excessive carryover may reflect an inefficient use of resources that otherwise might be redirected to other priorities. DoD considered three metric options for calculating depot maintenance carryover; however, the metrics do not fully address key attributes of providing quality information that is reliable, complete, consistent, and appropriate and have varied depot management implications.
Ensuring that the carryover metric meets key attributes for providing quality information would improve decision-makers' ability to assess whether depots are managed as efficiently and effectively as possible, and determine the amount of carryover sufficient to support smooth operations from year to year. Until DoD adopts a carryover metric that addresses the attributes for providing quality information, decision makers may not know if the billions of dollars invested for work performed at depots are being used efficiently or might be redirected for other purposes.
DoD identified three metrics for calculating allowable carryover in its report to Congress. However, the three metrics identified do not fully meet all key attributes—reliability, completeness, consistency, and appropriateness—for providing quality information to decision makers, although the Office of the Secretary of Defense-proposed carryover metric meets the most attributes.
6. Contract Type Program Outcomes Evaluation Informs Schedule Decisions
The Navy spends billions annually in maintaining this fleet. In 2015, the Navy changed how it contracts for such maintenance work, aiming to better control costs and improve quality. The new approach, called MAC-MO, generally uses firm-fixed-price contract delivery orders for individual ship availabilities competed among pre-qualified contractors at Navy regional maintenance centers.
Since shifting to the Multiple Award Contract-Multi Order (MAC-MO) contracting approach for ship maintenance work in 2015, the Navy has increased competition opportunities, gained flexibility to ensure quality of work, and limited cost growth, but schedule delays persist.
Although the MAC-MO strategy appears to have stabilized the cost and quality components, completing maintenance availabilities within allotted schedules continues to elude the Navy. The Navy has taken steps to more readily accommodate growth work needs as they emerge, however these likely cannot completely eliminate the Navy’s need for upward obligations. The Navy has pointed to the low cost threshold and upward obligations approval process, as provided for in statute, as not providing it with the agility it needs to fund growth work on a schedule that minimizes disruption to an availability.
Recently, Congress enacted legislation which establishes an OPN-funded pilot program and provides the Navy a platform to potentially demonstrate that it can meet its MAC-MO schedule goals when freed from the time intensive process of upward obligations. Nonetheless, every pilot program should be thought out before it starts, including consideration of what data need to be collected and how the data will be analyzed. Otherwise, the pilot could be poorly run or could miss opportunities to gain information and lessons learned. Such planning for the OPN-funded pilot could enhance the quality, credibility, and usefulness of the pilot program.
7. Sustainment Focus Early in the Acquisition Process Improves Budget The quantity and breadth of issues identified in this report—resulting in billions of dollars in unexpected costs, maintenance delays, and unreliable ships—suggest that existing policies and guidance have not ensured that new ships are reliable and can be sustained as planned. Recently, due to some of these problems, DoD and the Navy have recognized the importance of considering the requirements and costs of sustainment during the acquisition process, and Congress has passed legislation related to sustainment planning. This report, along with other DoD initiatives discussed in this review, demonstrate that the Navy needs to take many steps to infuse its acquisition decision-making with a greater focus on sustainment outcomes.
Systemic changes are needed to improve shipbuilding programs’ sustainment outcomes, including: 1) setting clear sustainment requirements that are useful for acquisition decision-making and reporting the results to Congress, 2) improving O&S cost estimates, sustainment planning, and logistics assessments, and 3) involving the PSM early in the acquisition process. However, these changes will only be successful if Navy leadership commits more time, attention, and resources to ensuring that sustainment is thoroughly considered throughout the acquisition process. Until the Navy resolves these issues, its shipbuilding programs will continue to pass costly sustainment risk to the fleet that results in ships and submarines that experience major sustainment problems.
8. Actions to Improve Poor Conditions of Facilities and Equipment that Affect Maintenance Timeliness and Efficiency
The condition of depot facilities and equipment directly affects the timeliness of maintenance and the readiness of the weapon systems they repair. The condition of facilities at a majority of DoD depots is poor and the age of equipment is generally past its useful life, but the services do not consistently track the effect that these conditions have on depot performance.
DoD and the services’ approach for managing investments to improve the efficiency and effectiveness of its depots lacks elements important to addressing key challenges. The services have efforts underway to complete their plans to address their depots’ facility and equipment needs. However, these plans are preliminary and will not include key elements, such as analytically-based goals; results-oriented metrics; a full accounting of the resources, risks, and stakeholders; and a process for reporting on progress.
9. Progress in Standardizing Designs for Facility Construction Centers’ various activities such as conducting value engineering and life-cycle cost studies to identify possible cost savings and analyze long-term costs of new facilities are consistent with key principles and concepts
Army does not have performance measures in place to assess the progress the Centers have made toward assuring consistent application of standards from the Centers’ program or monitoring the Centers’ execution to meet the overarching objectives and priorities of the AFSP and standardization process including, among other things, reducing design costs and time, construction costs and time, and change orders during construction. This hinders the Centers’ ability to determine how well they are supporting the objectives of both the Army Facility Standardization Program and DoD’s annual performance plans, as well as the Centers’ ability to demonstrate the extent to which they are achieving their objectives.
10. Assess Effectiveness of Workforce Initiatives to Maintain Critical Skills
DoD employs over 80,000 civilian personnel at its 17 major maintenance depots to maintain weapon systems such as aircraft, combat vehicles, and ships. The depot workforce has unique skills, and the depots must compete with the private sector for qualified personnel. Increasing numbers of depot workers have been retiring, and the number eligible to retire is expected to increase. Because it takes 5 years or more to become proficient in some occupations, DoD must systematically plan and prepare to hire, train and retain the workforce it needs to support its vital maintenance and repair mission.
Depots identified a variety of workforce challenges, such as hiring personnel in a timely manner and providing inexperienced personnel with the training necessary to become proficient in skilled occupations. According to DoD officials, these challenges contributed to delays in the maintenance of some weapon systems.
While the services have collected some data regarding these actions, the depots and the services do not know how effective they have been, because they have not assessed the results of these actions in helping the depots to hire, train, and retain skilled personnel—including determining whether the actions are cost effective. By assessing the cost and effectiveness of these actions, the services would be better able to identify the hiring, training, and retention actions that work, and identify those that are ineffective or cost prohibitive. This would allow them to better tailor their actions to ensure that the depots hire, train, and retain personnel for skilled occupations, and help ensure they are positioned to provide effective depot maintenance for DoD’s weapon systems.
Without conducting assessments of the actions the depots have taken, and are currently taking, the services will not know how effective those actions are in helping to maintain critical skills in the depot workforce, or if the actions are cost effective to pursue. By assessing the overall effectiveness of these actions, including the associated costs, the services will be able to identify the hiring, training, and retention actions that work well, as well as those actions that are not effective, or are cost prohibitive, and should not be used to help maintain the critical skills of the depot workforce. To ensure that the depots are using their resources most effectively, an assessment of these actions should be conducted.