Table 1  provides characteristics of the two options that the Navy is considering for  CVN 65 dismantlement and disposal. Budget Documentation and Reporting Does Not Include Sufficient Information to Facilitate Transparency and Oversight for CVN 65

The Navy’s approach typically used to budget for and report on ship  dismantlement and disposal does not provide sufficient information to  support decision makers’ oversight of CVN 65—a multi-year project that  may require more than $1 billion to complete. We found the Navy is not  required to provide detailed budget information or report dismantlement  and disposal cost, schedule, and programmatic information to decision  makers. The bulk of the Navy’s past  dismantlement and disposal work is comprised of comparatively low-cost  projects—particularly submarines—with limited resource demands  compared to a nuclear-powered aircraft carrier like CVN 65, a multi-year  project with a cost that will potentially exceed $1 billion. While some of the SCN budget exhibit  elements are not applicable to dismantlement and disposal, others could  be adapted and used in an OMN budget exhibit for CVN 65 to provide  information that would enable better oversight, such as work activities planned and performed by fiscal year; prior years’ funding data;  future years’ funding plans;  cost to complete dismantlement;  schedule of key events; and  information on the contractor(s), contract type, and contract award  and completion dates. For the naval shipyard option, the Navy  suggested no plans for an independent cost estimate as it continues to  refine the current cost estimate prior to a decision for CVN 65. The Navy’s Evaluation of CVN 65 Dismantlement and Disposal Options Is Hampered by a Regulatory Authority Disagreement

The regulatory authority determines the rules, procedures, and oversight  that will guide the dismantlement and disposal process for CVN 65. Coordination between Naval Reactors and NRC to identify the applicable  regulatory authority and establish a regulatory plan for the CVN 65 full  commercial option would help ensure accountability for safe  dismantlement and disposal of CVN 65 under the full commercial option. It would also enable the Navy and commercial companies to effectively  estimate costs. Congress should consider requiring Naval Reactors to coordinate with the  Nuclear Regulatory Commission for any CVN 65 dismantlement and  disposal performed commercially to identify the applicable regulatory  authority. Both  DOD and NRC agreed with the draft report and its findings, and DOD  concurred with the four recommendations we directed to the department. Appendix I – Objectives, Scope, and Methodology

This report (1) describes the differences between the dismantlement and  disposal options under consideration, including cost and schedule as well  as workload and facilities; (2) evaluates the Navy’s funding and reporting  practices for dismantlement and disposal activities; and (3) assesses the  effect that nuclear regulatory authority considerations have on  dismantlement and disposal options for CVN 65. We interviewed officials from Naval  Reactors and the Program Executive Office for Aircraft Carriers. To determine the effect that nuclear regulatory authority considerations  have on dismantlement and disposal for CVN 65, we examined applicable  laws, regulations, executive orders, policies, and guidance documents  related to nuclear-powered ships.
Why GAO Did This Study

The Navy is planning to dismantle and dispose of CVN 65 after 51 years of service. In 2013, the estimated cost to complete the CVN 65 work as originally planned increased to well over $1 billion, leading the Navy to consider different dismantlement and disposal options.
The Senate Report accompanying a bill for the National Defense Authorization Act for Fiscal Year 2018 included a provision for GAO to review the Navy's plans for CVN 65. This report addresses (1) dismantlement and disposal options under consideration; (2) nuclear regulatory authority considerations; and (3) funding and reporting practices.
GAO reviewed budget, cost, and schedule documentation, as well as applicable laws, regulations, executive orders, policies, and guidance. GAO interviewed officials from the Navy and commercial companies about the dismantlement and disposal options, and NRC and state agencies about regulatory considerations.

What GAO Found

The Navy is assessing two options to dismantle and dispose of its first nuclear-powered aircraft carrier—ex-USS Enterprise (also known as CVN 65). CVN 65 dismantlement and disposal will set precedents for processes and oversight that may inform future aircraft carrier dismantlement decisions.
Characteristics of the Navy's Potential CVN 65 Dismantlement and Disposal Options
Source: GAO analysis of Navy and Nuclear Regulatory Commission information. | GAO-18-523
The Navy could rely on its extensive regulatory experience for the naval shipyard option. However, the Navy's ability to effectively evaluate the full commercial option is hampered by a disagreement with the Nuclear Regulatory Commission (NRC), which oversees the commercial nuclear industry. Naval Reactors officials assert that NRC's regulatory authority should apply to the full commercial option. NRC disagrees with this position. Coordination between the two agencies to identify the applicable regulatory authority and craft a regulatory plan would help ensure accountability, solidify cost estimates, and facilitate a CVN 65 decision.
The budget documentation and reporting that the Navy typically uses for ship dismantlement and disposal projects will not enable adequate oversight of CVN 65—a multi-year project with a cost that may exceed $1 billion. The documents that support Navy budget requests for dismantlement and disposal funding do not provide data that decision makers can readily use to track dismantlement costs against an established baseline or to evaluate funding plans for future years. Further, the Navy has no reporting requirements to support accountability for CVN 65 activities. Large defense acquisition programs generally are required to submit more detailed budget information and report on cost, schedule, and performance. These practices could be adapted for CVN 65 to provide information that will facilitate oversight commensurate with the scale of the effort.

What GAO Recommends

Congress should consider requiring Naval Reactors to coordinate with NRC to identify the applicable regulatory authority for a CVN 65 commercial dismantlement and disposal. GAO is also making four recommendations, including that the Navy take action to provide additional budget information and reporting to facilitate improved transparency and accountability for the CVN 65 cost, schedule, and risks. The Department of Defense agreed with all four recommendations.