This pilot program began  in March 2011, and in March 2012, near the end of the pilot, the Navy  issued its Surface Force Readiness Manual, which details a new strategy  for optimizing surface force readiness throughout the Fleet Response  Plan. The strategy calls for integrating and synchronizing maintenance, training, and resources among multiple organizations such as Afloat  Training Groups and Regional Maintenance Centers. Data Indicate Differences in Material Readiness Between Ship Types, but Do Not Reveal Readiness Trends Due to Limitations in the Data

For the period from 2008 to 2012, available data show variations in  material readiness between different types of ships—such as material  readiness differences between amphibious warfare ships and surface  combatants—but data limitations prevent us from making any conclusions  concerning improvements or declines in the overall readiness of the  surface combatant and amphibious warfare fleet during the period. Through a variety of means and systems, the Navy collects, analyzes,  and tracks data that show the material condition of its surface ships—in  terms of both their current and life cycle readiness. However, the data sources can be viewed as  complementary and, when taken together, provide data on both the  current and life cycle material readiness of the surface force. Likewise,  cruisers have a lower material condition than that of destroyers. DRRS-N  data also show that there are readiness differences between the Navy’s  different types of ships but the precise differences are classified and  therefore are not included in this report. Casualty report data from January 2008 to March 2012 show that there is  a significant upward trend in the average daily number of casualty reports  per ship for both surface combatants and amphibious warfare ships,  which would indicate declining material readiness. Navy Has Acted to Improve Readiness but Not Assessed Risks to Achieving Full Implementation of Its Recent Strategy

The Navy has taken steps intended to improve the readiness of its  surface combatant and amphibious warfare ships. Navy Has Not Assessed Risks to Implementing its Strategy as Planned or Developed Alternatives

Certain factors could affect the Navy’s ability to fully implement its  strategy, but the Navy has not assessed the risks to implementation or  developed alternatives. As we have previously reported,assessment can provide a foundation for effective program management. High  operational tempos pose challenges because they could delay the entry  of some ships into the strategy as well as the movement of ships through  the strategy. Thus, ships with a high operational tempo that do not  enter the maintenance phase as planned will have lifecycle maintenance  activities deferred, which could lead to increased future costs. For example, Navy Afloat Training Group officials have identified the  staffing levels required to fully support the strategy, and reported that they  need an additional 680 personnel to fully execute the new strategy. As of  August 2012, the Navy plans to reflect its funding needs for 410 of the  680 personnel in its fiscal year 2014 budget request and for the remaining  270 in subsequent requests. The Navy has not undertaken a comprehensive assessment of the impact  of high operational tempos, staffing shortages, or any other risks it may  face in implementing its new readiness strategy, nor has it developed  alternatives to mitigate any of these risks. Full implementation of its new  strategy, however, may be delayed if the Navy does not account for the  risks it faces and devise plans to mitigate against those risks. Recommendations for Executive Action

To enhance the Navy’s ability to implement its strategy to improve surface  force material readiness, we recommend that the Secretary of Defense  direct the Secretary of the Navy to take the following two actions:
Develop a comprehensive assessment of the risks the Navy faces in  implementing its Surface Force Readiness Manual strategy, and  alternatives to mitigate risks. Therefore, we continue to believe that a  comprehensive risk assessment is needed. Appendix I: Scope and Methodology

To assess how the Navy evaluates the material readiness of its surface  combatant and amphibious warfare ships and the extent to which data  indicate trends or patterns in the material readiness of these ships, we  interviewed officials from the Commander Naval Surface Force, U.S.  Pacific Fleet, Commander Naval Surface Force, U.S. Atlantic Fleet, as  well as visiting a number of ships, to include the USS Leyte Gulf (CG 55),  USS Arleigh Burke (DDG 51), USS San Antonio (LPD 17), and USS  Higgins (DDG-76). We analyzed data from three of the primary data sources the Navy uses  to provide information on the material condition of ships: casualty reports;  Board of Inspection and Survey (INSURV) material inspection reports;  and the Defense Readiness Reporting System – Navy (DRRS-N) reports. We did this separately for surface combatant ships (cruisers, destroyers,  and frigates) and amphibious warfare ships. To determine the extent to which the Navy has taken steps intended to  improve the readiness of its surface combatant and amphibious warfare  ships including efforts to implement its recent strategy, we reviewed  relevant Navy instructions on Navy material readiness, including the  strategy—the Surface Force Readiness Manual—to identify the policies  and procedures required by the Navy to ensure its surface ships are  ready to perform their current mission requirements and reach their  expected service lives.
Why GAO Did This Study

In 2010, the Navy concluded that decisions it made to increase efficiencies of its surface force had adversely affected ship readiness and service life. To improve ship readiness the Navy developed a new strategy, which includes several initiatives. House Report 112-78, accompanying a proposed bill for the Fiscal Year 2012 National Defense Authorization Act (H.R.1540), directed GAO to review the recent Navy initiatives. GAO assessed 1) how the Navy evaluates the material readiness of its surface combatant and amphibious warfare ships and the extent to which data indicate trends or patterns in the material readiness of these ships, and 2) the extent to which the Navy has taken steps to improve the readiness of its surface combatant and amphibious warfare ships, including implementing its new readiness strategy. GAO analyzed Navy policies, material and readiness data from January 2008two years prior to the release of the Navys 2010 report on the degradation of surface force readinessthrough March 2012, two years after the release of the report, and interviewed headquarters and operational officials and ship crews.

What GAO Found

Recent data show variations in the material readiness of different types of ships, but do not reveal any clear trends of improvement or decline for the period from 2008 to 2012. The Navy uses a variety of means to collect, analyze, and track the material readiness of its surface combatant and amphibious warfare ships. Three data sources the Navy uses to provide information on the material readiness of ships are: casualty reports, which reflect equipment malfunctions; Defense Readiness Reporting System-Navy (DRRS-N) reports; and Board of Inspection and Survey (INSURV) material inspection reports. These data sources can be viewed as complementary, together providing data on both the current and life cycle material readiness of the surface force. INSURV and casualty report data show that the material readiness of amphibious warfare ships is lower than that of frigates and destroyers. However, there is no clear upward or downward trend in material readiness across the entire Navy surface combatant and amphibious warfare ships. From 2010 to March 2012, INSURV data indicated a slight improvement in the material readiness of the surface combatant and amphibious warfare fleet, but over that period casualty reports from the ships increased, which would indicate a decline in material readiness. DRRS-N data also show differences in material readiness between ship types, but the precise differences are classified and therefore are not included in this report.
The Navy has taken steps to improve the readiness of its surface combatant and amphibious warfare ships, including a new strategy to better integrate maintenance actions, training, and manning, but it faces risks to fully implementing its strategy and has not assessed these risks or developed alternatives to mitigate them. In March 2012, near the end of a year-long pilot, the Navy issued its Surface Force Readiness Manual, which calls for integrating and synchronizing maintenance, training and manning among multiple organizations. The Navy expects this strategy to provide a standard, predictable path for ships to achieve and sustain surface force readiness, but certain factors, such as high operational tempos and supporting organizations staffing levels, could delay the entry of some ships into the strategy and the execution of the strategy. For example, one supporting organization reported needing an additional 680 personnel to fully execute the strategy. As of August 2012, the Navy plans to reflect its funding needs for 410 personnel in its fiscal year 2014 budget request and the remaining 270 in subsequent requests. Also, due to high operational tempos the phased implementation of some ships into the strategy may be delayed. Furthermore, ships that do not execute the strategys maintenance periods as planned will have lifecycle maintenance actions deferred. GAO has previously reported that risk assessment can inform effective program management by helping managers make decisions about the allocation of finite resources, and alternative courses of action. However, the Navy has not undertaken a comprehensive assessment of risks to the implementation of its strategy, nor has it developed alternatives to mitigate its risks. GAO believes operational tempo, supporting organizations staffing levels, and other risks may hinder the Navys full implementation of its surface force readiness strategy. If not addressed, this could lead to deferrals of lifecycle maintenance, which have in the past contributed to increased maintenance costs, reduced readiness, and shorter service lives for some ships.

What GAO Recommends

GAO recommends that the Navy conduct a comprehensive assessment of the risks the new strategy faces and develop alternatives to mitigate these risks. DOD partially concurred, but felt that current assessments sufficiently identify risks. GAO continues to believe that a comprehensive assessment that takes into account the full range of risk to the overall strategy is needed.