	Overview

		Key Findings From Investment Options Analysis

The Navy can maintain a 12-carrier force for less cost than that projected in the Bottom-Up Review (BUR) and the Navy’s Recapitalization Plan by using one of several options that consider cost and employment levels. The least expensive investment option that also maintains employment levels at or above minimum levels authorizes building the CVN-76 in fiscal year 1995 and then transitions to a conventional carrier construction program. This option costs approximately 25 percent less than the BUR and the Navy’s Recapitalization Plan options. Building CVN-76 in fiscal year 1995, as proposed by the BUR, the Navy’s Recapitalization Plan, and other options in our report (see table 1.1), stops the downward trend in Newport News Shipbuilding employment at about the minimum sustaining level of 10,000 employees. Options to delay building the carrier result in a continuing decline to about 7,500 employees. However, in the long term the employment levels in the BUR and the Navy’s Recapitalization Plan also fall below 10,000 employees. In addition, options that include building CVN-76 in fiscal year 1995 require building carriers sooner than they are needed for force structure purposes and therefore incur expenses sooner than necessary. Moreover, the option to build nuclear carriers at the historical rate of one every 3 years maintains stable employment levels but costs about 40 percent more than options in the BUR and the Navy’s Recapitalization Plan. Options for using carriers for their full service lives (options 1A and 1B) are less expensive than those in the BUR and the Navy’s Recapitalization Plan, especially if the force transitions to a conventional carrier construction program. However, in the near term, the employment levels fall below the Navy’s estimated critical minimum sustaining level of 10,000 employees. Since affordability of the future force is an important concern, a transition to constructing conventionally powered carriers would save the largest amount of investment resources (see table 1.1). Other considerations include the availability and location of homeports and nuclear-capable shipyards for maintenance and repairs and other supporting infrastructure, such as for training; the effect of out-of-homeport maintenance on the amount of time personnel are away from their homeport; and the disposal of nuclear materials and radioactively contaminated materials. 3. 4. 2.7). 2.9).
Why GAO Did This Study

GAO reviewed the Navy's aircraft carrier program, focusing on: (1) the budget implications of the options for meeting the Department of Defense's Bottom-Up Review (BUR) force structure requirement for 12 carriers; and (2) each option's effect on the shipbuilding contractor's employment levels.

What GAO Found

GAO found that: (1) there are several available options for maintaining the 12-carrier force at less cost than projected in the BUR and the Navy Recapitalization Plan; (2) the least expensive option maintains employment levels at or above minimum levels, authorizes building the proposed nuclear carrier in fiscal year 1995, switches to construction of conventionally powered carriers in later years, and would cost 25 percent less than the BUR and Navy Recapitalization Plan options; (3) options to build CVN-76 in fiscal year 1995 would stop the downward trend in employment at about the minimum sustaining employment level of 10,000 employees, require building carriers sooner than they are needed for force structure purposes, and incur expenses sooner than necessary; (4) options to delay building the carrier would result in a continuing decline in employment to about 7,500 employees; (5) in the long term the employment levels in the BUR and the Navy Recapitalization Plan also fall below 10,000 employees; (6) the option to build nuclear carriers at the historical rate of one every 3 years maintains stable employment levels but costs about 40 percent more than the options in the BUR and the Navy Recapitalization Plan; (7) options for using carriers for their full service lives are less expensive than those in the BUR and Navy Recapitalization Plan, but in the near term the employment levels fall below the minimum sustaining level; (8) a transition to constructing conventionally powered carriers would save the largest amount of investment resources; and (9) criteria for comparing nuclear and conventional carriers include affordability, operational effectiveness, potential utilization, availability of homeports and shipyards for maintenance, and supporting infrastructure such as training and disposal of nuclear materials.