RM Program’s Implementation Progress

The Navy has made substantial progress in implementing the infrastructure streamlining objective of the RM Program through such efforts as establishing a management structure, a phased execution plan, and a process for realigning and reducing its maintenance infrastructure. Savings Have Not Been Achieved at Projected Levels

Through fiscal year 1996, 102 initiatives with projected savings of $944 million had been identified for the program. Of the 102, the Navy estimated that it would achieve net savings of $198 million through implementation of 55 initiatives during fiscal years 1994-97 and that these projects would continue to provide savings in fiscal years 1998-2001 amounting to $272 million, or a total of about $470 million (see table 1). It planned to implement 47 more between 1998 and 2001. The Navy’s accounting system, like all Department of Defense (DOD) accounting systems, tracks expenses and disbursements but not savings, and the Navy did not establish an independent system to track RM costs and related savings. Additional Opportunities for Future Substantial Savings

The Navy has many opportunities to build on its maintenance infrastructure streamlining progress. 2); that is, of the estimated $944 million its 102 initiatives are projected to save, $746 million would accrue during that period. The Navy has identified other potential regional maintenance opportunities that need to be studied. In addition, the Mid-Atlantic region, in its 1997 update to the fleet business plans, identified 29 new savings initiatives. 3.) The Navy recognizes that parochial and institutional resistance to the RM Program’s objectives and other issues will be difficult to resolve. The biggest barrier to overcome may be resistance to initiatives that eliminate organizations, reduce jobs and promotions, or reduce control over resources. Other barriers to integrating intermediate- with depot-level capabilities are (1) the lack of management visibility over all maintenance-related costs; (2) multiple, unconnected management information systems that do not provide adequate data for regional maintenance planning and decision-making; and (3) the large number of shore duty intermediate-level maintenance positions needed to support the Navy’s sea-to-shore rotation program compared to a lesser number needed to perform the work. Therefore, visible commitment by the CNO is critical to implementing the RM Program, as this involvement accelerates the provision of resources and the coordination needed for efficient and effective program implementation. Recommendations

We recommend that the Secretary of Defense direct the Secretary of the Navy to annually report on the RM Program initiatives identified, savings achieved that have been verified in Navy budget and accounting records, and the progress made to overcome the barriers to achieving infrastructure reductions and savings.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Navy Regional Maintenance (RM) Program, focusing on the: (1) progress made in implementing the program; (2) savings that have been achieved; (3) opportunities for additional savings; and (4) barriers that inhibit full implementation of the program and achievement of projected savings.

What GAO Found

GAO noted that: (1) the Navy has made progress in achieving its infrastructure streamlining objective, but it has not been as great as anticipated and challenges remain for accomplishing future plans; (2) to implement the infrastructure streamlining objective, the Navy established steering committees, initiated a phased execution plan, identified a regional structure, and developed business plans; (3) through fiscal year (FY) 1996, the Navy identified 102 initiatives, 55 of which had been started by the end of FY 1997, and 47 of which are to be implemented between FY 1998 and 2001; (4) the Navy projected that its 102 initiatives would save about $944 million, of which $198 million was expected to accrue during FY 1994 to 1997 and $746 million was expected to accrue during FY 1998 to 2001; however, some of the initiatives are not progressing as projected; (5) the Navy cannot identify actual savings achieved because its accounting system does not track RM Program costs and related savings, and the Navy did not establish an independent system to track these costs and related savings; (6) the Navy has opportunities to build on its progress by working to achieve the $746 million in expected savings during FY 1998 to 2001, moving more quickly to implement savings initiatives, and pursuing other opportunities with high potential for significant savings; (7) the Navy identified many of its savings initiatives as high risk because of barriers to implementation; (8) the Navy faces parochial and institutional resistance to the RM Program's objectives and has other complex issues to resolve; (9) the biggest hurdle to overcome may be resistance to initiatives that eliminate organizations, reduce jobs and promotions, or reduce a command's or organization's control over resources; (10) other barriers are: (a) the lack of management visibility over all maintenance related costs; (b) multiple, unconnected management information systems that do not provide adequate data for regional maintenance planning and decisionmaking; and (c) the large number of shore positions desired to support the sea-to-shore rotation program compared to the smaller number needed to perform the intermediate maintenance workload; and (11) visible commitment by the Chief of Naval Operations (CNO) is critical to overcome resistance, accelerate decisionmaking, and provide the necessary resources and coordination needed for efficient and effective program implementation.