	Introduction

During 1998, the Navy consolidated the Pearl Harbor Naval Shipyard and  the Naval Intermediate Maintenance Facility in Hawaii. Because of  concerns raised about certain aspects of the consolidation, the Navy  implemented a test project, commonly called the Pearl Harbor pilot, to  determine if integrating the management, operations, and funding of the  shipyard and the intermediate maintenance facility can result in greater  efficiency and lower overall ship maintenance costs. In September 1999, we  reported the Pearl Harbor pilot was not yet complete and preliminary  results were mixed, and we recommended that the Navy take steps to  address unresolved issues related to financial management of the  consolidated facility. Cost visibility and accountability for consolidated ship maintenance  operations. OSD concurred with the intent of  our recommendations to resolve financial management issues related to  the consolidation at Pearl Harbor and indicated that the Departments of  Defense and the Navy would correct them. Issues Related to the Financial Structure for Consolidations of Ship Maintenance Activities at Pearl Harbor and Elsewhere Are Still Not Resolved

As we discussed in our prior report, OSD and Navy officials differ still over  three key issues related to the financial structure for the consolidation of  ship maintenance activities at Pearl Harbor and other locations. Because of the consolidation, the Navy has reduced the maintenance  infrastructure at Pearl Harbor. The Navy has not yet generated  the rework figures for fiscal year 2000.
Why GAO Did This Study

In 1998, the Navy consolidated the Pearl Harbor Naval Shipyard and the Naval Intermediate Maintenance Facility in Hawaii. Because of concerns about some aspects of the consolidation, the Navy began a test project, commonly called the Pearl Harbor pilot, to determine if integrating the management, operations, and funding of the shipyard and the intermediate maintenance facility can result in greater efficiency and lower overall ship maintenance costs. In September 1999, GAO reported that the preliminary results of the ongoing Pearl Harbor pilot were mixed and recommended that the Department of Defense (DOD) and the Navy address unresolved issues related to the financial management of the consolidation as the Navy proceeds with similar consolidations in other locations. This report updates GAO's earlier report and discusses whether (1) the Navy has provided adequate cost visibility and accountability over the consolidation, (2) DOD and the Navy have resolved other issues related to the financial structure for consolidations at Pearl Harbor and elsewhere, and (3) the consolidation has generated greater efficiency and lower costs for ship maintenance at Pearl Harbor.

What GAO Found

GAO found that the Navy still has not provided adequate cost visibility and accountability over ship maintenance following the consolidation. DOD and the Navy have made little progress in resolving other issues related to the financial structure for the consolidation. GAO is unable to determine whether the consolidations have produced greater efficiency and lower costs for ship maintenance.