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GAO report: Navy could take lessons from commercial shipbuilding industry

NEWPORT NEWS, Va. — The Navy could look to the commercial shipbuilding industry for ways to reduce problems in the construction and delivery of U.S. warships, a government watchdog report says.

Commercial ship buyers "establish clear lines of accountability" and employ roaming patrols and impromptu inspections to spot problems before a ship is delivered, the U.S. Government Accountability Office said in a November report.

In response, the Navy agreed or partially agreed with several recommendations in the report. It also noted – and GAO agreed – that the number of serious problems that show up when ships are delivered has generally dropped over the past few years.

The report looked at ships delivered to the Navy from 2004 to 2012, including the aircraft carrier USS George H.W. Bush, built at Newport News Shipbuilding. Thanks to a Navy "Back To Basics" initiative launched in 2009, the number of on-delivery problems has dropped.

"Even so, the Navy still accepts some ships with large numbers of open deficiencies," the report states.

Among the post-delivery problems for the Bush were malfunctioning toilets, which led desperate sailors to relieve themselves in bottles, sinks and showers. The problem was blamed on non-flushable items being forced into the system. Still, the GAO report said the system, while "technically sound," was easily disabled. The problem was eventually corrected by adding a component to catch unwanted items before they could become a problem.

Why did GAO look at commercial shipyards? The industry places a premium on delivering ships that are problem-free from the outset.

For example, an offshore drilling ship could be leased to an oil or gas company during the construction process. The company leasing the ship expects it to be on site by the contracted date. Any delay means lost revenue, which for some drill ships can amount to $600,000 per day.

Also, new cruise ships are expected to begin generating revenue weeks or days after being delivered.

"Royal Caribbean officials told us that they had a full cruise three days after taking delivery of the Celebrity Solstice in October 2008," the GAO report states.

In all, GAO made five recommendations for action by the Secretary of Defense. That includes providing a better link between two Navy agencies key to the shipbuilding process: SUPSHIP, the organization responsible for overseeing ship construction processes, and the directorate within Naval Sea Systems Command responsible for logistics, maintenance and industrial operations.

The Defense Department said it plans to form a "quality team" within NAVSEA to link up with SUPSHIP at the shipyard level.

The department partially agreed with another GAO recommendation to clarify Navy policy when it comes to accepting ships with defects. Because the number of defects is dwindling, the Navy said it would agree to consider whether future revisions to the policy are needed.

However, GAO said the policy should be clearer, citing a "lack of consensus" on whether contractor-responsible problems should be corrected before ships are delivered.

The department also partially agreed with GAO's suggestion that random and "in-process" inspections would be beneficial. While those inspections are needed, the Defense Department said the correct balance "should be left to individual ship programs."
 

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