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GAO-15-510R 1 (2015-05-20)

handle is hein.gao/gaobaaixn0001 and id is 1 raw text is: GAOU.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 May 20, 2015 Congressional Committees Surface Ships: Status of the Navy's Phased Modernization Plan In March 2014, as part of the President's Budget for Fiscal Year 2015, the Navy proposed a Phased Modernization Plan that included placing 11 Ticonderoga-class cruisers (large surface combatants) and three dock-landing ships (amphibious ships) into a phased modernization and maintenance period to reduce near-term funding requirements and as a means to extend the life of the ships. House Report 113-446 accompanying the National Defense Authorization Act for Fiscal Year 2015 included a provision for GAO to review the costs, cost savings, benefits, and risks associated with the Navy's Phased Modernization Plan. This report (1) describes the implementation plans the Navy developed for phased modernization and (2) assesses the extent to which the Navy identified and analyzed alternatives for achieving the goals of phased modernization. In February 2015, as part of the President's Budget for Fiscal Year 2016, the Navy proposed a revised Phased Modernization Plan that significantly altered its original proposal. However, it was not until we completed our review that the Navy provided us with a limited amount of information about their revised phased modernization plans. We provided a briefing of our preliminary results to the House Armed Services Committee staff in March 2015. This report formally transmits an updated briefing regarding the final results of our work in response to the provision in House Report 113-446 (see the enclosure). To conduct our work, we evaluated relevant Navy documentation, such as briefing slides and planning documents. We also interviewed Navy headquarters and fleet officials and obtained testimonial evidence regarding the process the Navy followed in developing its Phased Modernization Plan and the alternatives it considered. To the extent that documentation was available, we corroborated the testimonial evidence and discussed any conflicting evidence with Navy officials. For example, we reviewed internal briefing slides and summary papers that Navy officials provided to us. We visited and spoke with experts on cruiser maintenance and modernization at two Navy shipyards in Norfolk, Virginia, and San Diego, California, where the Navy anticipates work will be performed on the ships included in phased modernization. We also interviewed Department of Defense (DOD) and Navy officials, including officials from the Office of the Secretary of Defense, Cost Assessment and Program Evaluation; Office of the Chief of Naval Operations; Naval Sea Systems Command; Fleet Forces Command; and Naval Surface Forces. We conducted our work from July 2014 to May 2015 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and GAO-1 5-51 OR Navy Phased Modernization Page 1

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