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093044 1 (1970-12-08)

handle is hein.gao/gaobacwxy0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE ' i WASHINGTON, D.C. 20548 CIVIL DIVISION 17 Dear Admiral Bender: The General Accounting Office has examined into the effectiveness of the Coast Guard's efforts to reduce the cost of its vessel construc- tion and repair activities through the use of value engineering studies received from the Department of the Navy. We did not make an overall evaluation of the Coast Guard's value engineering program. Value engineering (VE) has been defined as a systematic study of systems requirements, equipment, facilities, procedures, and supplies to achieve essential functions at the lowest cost. The Coast Guard recognizes that benefits can be realized through an effective VE pro- gram. For the construction and repair of its vessels, the Coast Guard encourages private shipbuilders, by the terms of their contracts, to develop acceptable VE studies which would promote cost savings to be shared by both parties. The in-house development of VE studies is likewise encouraged. A large volume of VE studies are developed each year in connection with the construction and repair of the Navy's vessels. Navy regula- tions provide that copies of these studies be forwarded to other inter- ested Government agencies, including the Coast Guard. The Coast Guard had not established written procedures for the review and evaluation of the Navy studies. In many instances, Navy studies received by the Coast Guard had not been reviewed by officials responsible for the vessel construction program, and in those instances where the studies were reviewed, the Coast Guard's evaluation and dis- position of the studies was accomplished in an informal manner. The Navy circulated some of its studies to both Coast Guard Headquarters and to the Coast Guard Yard at Curtis Bay, Maryland; however, a substantial number of studies generated by commercial shipbuilders under Navy contracts were forwarded by the Navy only to the Yard. In the absence of formal review procedures, there was an apparent misunderstanding between Headquarters and the Yard concerning how the studies were to be reviewed and evaluated. Yard officials stated that

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