Military Personnel: Navy Actions Needed to Optimize Ship Crew Size and Reduce Total Ownership Costs
Published: 2003-06-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The cost of a ship's crew is the single largest incurred over the ship's life cycle. One way to lower personnel costs, and thus the cost of ownership, is to use people only when it is cost-effective--a determination made with a systems engineering approach called human systems integration. GAO was asked to evaluate the Navy's progress in optimizing the crew size in four ships being developed and acquired: the DD(X) destroyer, T-AKE cargo ship, JCC(X) command ship, and LHA(R) amphibious assault ship. GAO assessed (1) the Navy's use of human systems integration principles and goals for reducing crew size, and (2) the factors that may impede the Navy's use of those principles.
section_title: What GAO Found
paragraphs: The Navy's use of human systems integration principles and crew size reduction goals varied significantly for the four ships GAO reviewed. Only the DD(X) destroyer program emphasized human systems integration early in the acquisition process and established an aggressive goal to reduce crew size. The Navy's goal is to cut personnel on the DD(X) by about 70 percent from that of the previous destroyer class--a reduction GAO estimated could eventually save about $18 billion over the life of a 32-ship class. The goal was included in key program documents to which program managers are held accountable. Although the Navy did not set specific crew reduction goals for the T-AKE cargo ship, it made some use of human systems integration principles and expects to require a somewhat smaller crew than similar legacy ships. The two other ships--the recently cancelled JCC(X) command ship and the LHA(R) amphibious assault ship--did not establish human systems integration plans early in the acquisition programs, and did not establish ambitious crew size reduction goals. Unless the Navy more consistently applies human systems integration early in the acquisition process and establishes meaningful goals for crew size reduction, the Navy may miss opportunities to lower total ownership costs for new ships, which are determined by decisions made early in the acquisition process. For example, the Navy has not clearly defined the human systems integration certification standards for new ships. Several factors may impede the Navy's consistent application of human systems integration principles and its use of innovations to optimize crew size: (1) DOD acquisition policies and discretionary Navy guidance that allow program managers latitude in optimizing crew size and using human systems integration, (2) funding challenges that encourage the use of legacy systems to save near-term costs and discourage research and investment in labor-saving technology that could reduce long-term costs, (3) unclear Navy organizational authority to require human systems integration's use in acquisition programs, and (4) the Navy's lack of cultural acceptance of new concepts to optimize crew size and its layers of personnel policies that require consensus from numerous stakeholders to revise.

section_title: Letter
paragraphs: The cost of a ship’s crew is the single largest expense incurred over  a ship’s life cycle. As such, transitioning from the personnel- and  workload-intensive ships of the past to optimally crewed ships with  reduced workloads has tremendous potential to free up resources for the  Navy to use in recapitalizing the fleet. The Department of Defense’s (DOD)  planned procurement rate for fiscal years 2004-2008 is 7.4 ships per year, a  rate that supports a fleet of about 259 ships—below the 2001 Quadrennial  Defense Review goal of 310 and farther below the Navy’s desired fleet of  375 ships. In recognition of the budgetary challenges the Navy faces in  recapitalizing its fleet, House and Senate conferees have expressed an  interest in identifying ways to reduce these personnel expenses through  the acquisition of ships that would require smaller crews.
One way to lower costs associated with personnel is to use people only  when it is cost-effective to do so—determining this by using a systems  engineering approach known as human systems integration. In this  process, tasks and functions are systematically analyzed and assigned to  the most cost-effective solution—humans, software, or hardware. When  applied to ships early in their development and throughout their design,  human systems integration has the potential to substantially reduce  requirements for personnel, leading to significant cost savings.  Additionally, it can improve operational performance by enhancing  situational awareness and decision making; reduce human error, which  causes an estimated 80 percent of ship accidents; and reduce training  difficulty and cost. Human systems integration also has the potential to  improve shipboard habitability, reduce workload and fatigue, and  thereby improve a sailor’s quality of life—key enablers for recruiting  and retention.
Because the size of ship crews has such a significant impact on long-term  costs, you asked us to evaluate the Navy’s progress in optimizing the crew  size in four new ships that DOD was in the process of developing and  acquiring: the DD(X) destroyer, the T-AKE cargo ship, the recently  canceled JCC(X) command ship, and the LHA(R) amphibious assault ship.  During our review, three of these ships were in the early stages of  development while only one ship, the T-AKE, had entered acquisition  phase three, production and deployment. (App. II includes a description of  the ships’ missions and acquisition program history and status.) In this  report, we assess (1) the Navy’s use of human systems integration  principles and goals to reduce crew size on these four ships and (2) the  factors that may impede the Navy’s use of human systems integration  principles in developing new ships.
To assess the Navy’s use of human systems integration principles and  crew size reduction goals, we obtained and analyzed key program and ship  crewing documents as well as human systems integration plans and  analyses. We also assessed whether and to what extent human systems  integration principles and crew reduction goals were addressed in the first  two acquisition phases (concept and technology development and system  development and demonstration) and reflected in key acquisition  documents. To evaluate factors that may impede the Navy’s application  of human systems integration principles, we interviewed DOD officials,  contractors, and human systems integration experts and reviewed  acquisition guidance to determine the extent to which it discusses or  requires the use of human systems integration principles in ship programs.  We conducted our review from June 2002 through April 2003 in  accordance with generally accepted government auditing standards. The  scope and methodology used in our review are described in further detail  in appendix I.
subsections: section_title: Background
subsections: section_title: Total Ownership Costs Are Determined Early in a System’s Development
paragraphs: Decisions made in setting requirements very early in a ship’s development  have enormous impact on the total ownership costs. Total ownership  costs include the costs to research, develop, acquire, own, operate,  maintain, and dispose of weapon and support systems; the costs of other  equipment and real property; the costs to recruit, retrain, separate, and  otherwise support military and civilian personnel; and all other costs of  DOD’s business operations. Navy analyses show that by the second  acquisition milestone (which assesses whether a system is ready to  advance to the system development and demonstration phase), roughly  85 percent of a ship’s total ownership cost has been “locked in” by design,  production quantity, and schedule decisions while less than 10 percent of  its total costs has actually been expended. (See fig. 1.)
Figure 1 depicts the relative apportionment of research and development,  procurement, and operating and support costs over the typical life cycle  of a ship program (the complete life cycle of a ship, from concept  development through disposal, typically ranges from 40 to 60 years).  Research and development funds are spent at program initiation and  generally comprise only a small fraction of a new ship’s total ownership  costs. Then, in the next acquisition phase, procurement funds, comprising  about 30 percent of total ownership costs, are spent to acquire the  new ship. The vast majority of the total ownership costs, about 65 percent,  is comprised of operating and support costs and is incurred over the life of  the ship. Personnel costs are the largest contributor to operating and  support costs—approximately 50 percent.
section_title: Defense Acquisition Policy Requires Setting Goals to Optimize Performance and Minimize Cost
paragraphs: Recognizing that fiscal constraints pose a long-term challenge, DOD  policy states that total ownership costs of new military systems should  be identified and that DOD officials should treat cost as a military  requirement during the acquisition process. This approach, referred to as  treating cost as an independent variable, requires program managers to  consider cost-performance trade-offs in setting program goals.
During the acquisition process, program managers are held accountable  for making progress toward meeting established goals and requirements at  checkpoints, or milestones, over a program’s life cycle. (See app. III for a  discussion of the DOD acquisition process). These goals and requirements  are contained in several key documents. The first to be generated is a  mission need statement that describes a warfighting deficiency, or  opportunity to provide new capabilities, in broad operational terms and  identifies constraints such as crewing, personnel, and training that may  affect satisfying the need. These capabilities and constraints are examined  during the initial phase of the program in a second key document, a study  called the analysis of alternatives. This study assesses the operational  effectiveness and estimated costs of alternative systems to meet the  mission need. The analysis assesses the pros and cons of each alternative  and their sensitivity to possible changes in key assumptions. The analysis  should consider personnel as both a life-cycle cost and a design driver.  Systems engineering best practices dictate that the analysis of alternatives  should be supported by a front-end analysis and trade-off studies so that  better and more informed decisions can be made. Using the results of the  analysis of alternatives, program objectives are formalized in an  operational requirements document. This third key document specifies  those capabilities or characteristics (known as key performance  parameters) that are so significant that failure to meet them can be cause  for the system to be canceled or restructured. In establishing key  performance parameters, DOD officials specify both a threshold and an  objective value. For performance, the threshold is the minimum  acceptable value that, in the user’s judgment, is necessary to satisfy the  need. For schedule and cost, the threshold is the maximum allowable  value. The objective value is the value desired by the user and the value  the program manager tries to work with the contractor(s) to obtain.
During our review, DOD was revising its acquisition guidance. On October  30, 2002, the Deputy Secretary of Defense canceled three key DOD  documents governing the defense acquisition process and issued  interim guidance in a memorandum. DOD officials expect to issue a new  acquisition guidance in the near future. The Deputy Secretary’s interim  guidance retains the basic acquisition system structure and milestones,  emphasizes evolutionary acquisition, modifies the requirements  documents, and makes several other changes. For example, the mission  need statement and the operational requirements document are replaced  by three new documents: (1) the initial capability document replaces the  mission need statement at milestone A, (2) the capability development  document replaces the operational requirements document at milestone B,  and (3) the capability production document replaces the operational  requirements document at milestone C. (See app. III for a discussion of the  acquisition process and milestones.)
section_title: Human Systems Integration Has Potential to Optimize Ship Crew Size and Reduce Costs for New Systems
paragraphs: Human systems integration is a systems engineering approach to optimize  the use of people. Optimized crewing for ships refers to the minimum  crew size consistent with the ship’s mission, affordability, risks, and  human performance and safety requirements. When initiated from the  outset of a new ship acquisition (during concept exploration and prior to  establishing key performance parameters) and continued through ship  design, human systems integration has the potential to reduce workload  leading to smaller, optimized crews; reduced operating and support costs;  and improved operational performance. According to human systems  integration experts, for Navy ship acquisitions, human systems integration  may begin with a top-down requirements analysis that examines the ship’s  functions and mission requirements and determines whether human or  machine performance is required for each task. By reevaluating which  functions humans should perform and which can be performed by  technology, human systems integration minimizes personnel requirements  while maximizing gains from technological applications. A human systems  integration approach also ensures that a person’s workload and other  concerns, such as personnel and training requirements, safety, and health  hazards, are considered throughout the acquisition process. In a recent  memorandum, the Assistant Secretary of the Navy for Manpower and  Reserve Affairs stated, “failure to incorporate HSI [human systems  integration] approaches can only lead to increasing manpower costs in the  future that will threaten the ability of the Department to sustain the  transformation, readiness and investment priorities we have established.”
Human systems integration has been used successfully in military and  commercial settings. MANPRINT, the Army’s human systems integration  program, reports that the Comanche helicopter program, when fielded,  will avoid $3.29 billion in operating and support costs ($2.67 billion of  which resulted from personnel reductions) due to the application of  human systems integration. Human systems integration has also been  used in airplane cockpit design, aircraft maintenance, and in rear-center  automobile brake lights design. Additionally, foreign navies’ efforts, such  as those to develop British Type 23 and Dutch M-Class Frigates, achieved a  30 to 40 percent reduction in crew size relative to the previous generation  of ships by employing a human systems integration approach.
DOD’s acquisition policy for using human systems integration is general in  nature but requires program managers to develop a human systems  integration approach early in the acquisition process to minimize total  ownership costs. The Navy’s acquisition guidance requires that human  systems integration costs and impacts be adequately considered along  with other engineering and logistics elements beginning at program  initiation, but the guidance does not provide for specific procedures and  metrics.
section_title: Navy’s Use of Human Systems Integration to Optimize Crew Size and Efforts to Establish Crew Size Goals Vary Considerably Across Ship Programs
paragraphs: Despite the potential of human systems integration to optimize crew size  and reduce total ownership costs, the Navy’s use of human systems  integration and goals to reduce crew size varied considerably across the  four new ship acquisition programs we examined. Only the DD(X)  destroyer program used human systems integration extensively to  optimize crewing during the concept and technology development phase  of the acquisition. In doing so, the program developed a comprehensive  plan that describes the human systems integration objectives, strategy,  and scope and mandated its use by means of key program documents.  The T-AKE cargo ship program was required to apply human systems  integration principles to the ship’s design, but not to the ship’s primary  mission of intership underway replenishment. In contrast, the JCC(X)  command ship and LHA(R) amphibious assault ship programs had not  emphasized human systems integration early in the acquisition process or  developed a comprehensive human systems integration approach. The  Navy’s crew size reduction goals for the four ships range from an  aggressive goal of about 60 to 70 percent on the DD(X) destroyer, to a lack  of any formal reduction goal on the JCC(X) command ship and the LHA(R)  amphibious assault ship. The inconsistent use of human systems  integration to optimize ship crews and the lack of formal crew size  reduction goals for three of the four programs we examined represent a  missed opportunity to potentially achieve significant savings in total  ownership costs.
subsections: section_title: DD(X) Program Has Aggressive Crew Size Reduction Goals and Uses Human Systems Integration Extensively
paragraphs: From the inception of the program through the selection of a design agent  in 2002, the DD(X) program has had a significant crew size reduction goal  and has used human systems integration to identify potential ways to  achieve this goal. Requirements for using human systems integration and  crew size goals were included in the key acquisition documents to which  program managers are held accountable. The program began human  systems integration activities in the first acquisition phase—concept and  technology development—by inviting industry to develop conceptual  designs to meet these goals and produce a human systems integration  plan. Subsequently, the Navy restructured the program in November 2001  and is reevaluating the ship’s operational requirements, including crew  size. However, the Navy’s contract with the design agent continues to  specify a significant crew size reduction calling for a crew of between  125 and 175. These revised crew size requirements still represent a  greater than 50 percent reduction when compared to the legacy ship it  is replacing.
From the earliest stages of the program and continuing through award of  the design agent contract, the program maintained a focus on optimizing  crew size. For example:    The 1993 mission need statement directed “the ship must be automated  to a sufficient degree to realize significant manpower reductions.” The  document also required a human systems integration-type analysis, to  recommend options to exploit technology to reduce crewing, personnel,  and training requirements and directed that trade-offs to reduce these  requirements be favored during design and development.
The 1998 cost and operational effectiveness analysis (currently known as  the analysis of alternatives) included an analysis of the ship crew and  personnel requirements for the various alternatives that ultimately  influenced the Navy’s decision to initially establish an aggressive crew size  goal of 95 and identify human systems integration requirements to be  included in the operational requirements document. This goal represents a  greater than 70 percent reduction in crew size from that of the Arleigh  Burke-class destroyers developed in the 1980s.  In 1997, the DD(X) operational requirements document specified a crew  size goal of between 95 and 150 as a key performance parameter. It also  required that human systems integration be used to minimize life-cycle  costs and maximize performance effectiveness, reliability, readiness, and  safety of the ship and crew.  In 1997, the program also established a ship crewing/human systems  integration integrated process team whose charter requires a top-down  functional analysis, the analytical centerpiece of the Navy’s human  systems integration approach, in the early phases to obtain a major  reduction in personnel.  In 1998, the Under Secretary of Defense for Acquisition and Technology  continued to hold DD(X) destroyer program managers accountable for  achieving an aggressive crew size reduction when he required validation  that the DD(X) crew size will meet the key performance parameter  threshold before ship construction begins.
The Phase 1 solicitation issued in 1998 for trade studies and analyses and  development of two competitive system concept designs required that  both contractors provide a human systems integration plan.
The design agent contract awarded in 2002 requires the contractor to  develop and demonstrate a human systems integration engineering effort  that addresses the crewing, personnel, training, human performance,  sailor survivability, and quality of life aspects of the DD(X) design. It also  relaxed the original crew size goal, stating that crewing requirements shall  not exceed 175.
To achieve the proposed reductions, the DD(X) program plans to employ  human-centered design and reasoning systems, advances in ship cleaning  and preservation, a new maintenance strategy, and remote support from  shore-based facilities for certain administrative and personnel services.  For example, cleaning requirements are expected to be reduced by a ship  design that capitalizes on commercial shipping practices such as  cornerless spaces and maintenance-free deck coverings. The ship will also  rely on an integrated bridge system that provides computer-based  navigation, planning and monitoring, automated radar plotting, and  automated ship control.
DD(X) program officials stated that their experience in using the human  systems integration engineering approach, establishing an aggressive  crew size reduction goal early in the acquisition process, and including  this goal as a key performance parameter in the operational requirements  document has been critical in maintaining a focus on reducing crew size.  Moreover, these practices led to examining innovative approaches from  the beginning and holding program managers accountable during program  reviews. Program officials anticipate that the emphasis on reducing crew  size will help to minimize DD(X) operating and support and total  ownership costs once the ship is built and enters the fleet. For illustrative  purposes, we calculated that the Navy could avoid personnel-related costs  of about $600 million per ship over a 35-year service life if it achieves a  crew of 150 sailors rather than requiring the 365 sailors needed to operate  its legacy ship, the Arleigh Burke-class destroyer. This could potentially  save more than $18 billion for a class of 32 ships (both amounts are in  fiscal year 2002 dollars). See appendix V for a comparison of crew  functions and workload on the DDG 51 Arleigh Burke-class destroyer and  those proposed for the DD(X).
DD(X) program officials also stated that, even with sustained early  emphasis on crew size reduction and the use of human systems integration  for crew optimization, achieving such an aggressive crew size goal remains  a significant technological challenge as the program is relying on a number  of immature labor-saving technologies, such as those required to conduct  damage control and run the ship’s computers. Program officials stated that  informal goals or those established later in the acquisition process would  not have been nearly as effective in getting the program to focus on  achieving significant personnel reductions. However, in recognition of the  technological challenge of achieving the crew size goal and several other  technological challenges, the Navy restructured the DD(X) program in  November 2001 to better manage the program’s risk. As such, it adopted  an acquisition strategy consisting of multiple capability increments, or  “flights.” The newly restructured program relaxed the crew size goals to  between 125 and 175, which still represents a greater than 50 percent  reduction below legacy ship levels, for the first of three planned DD(X)  flights. While briefings prepared by Navy officials retain the original crew  size goals for the third DD(X) flight, it is unclear whether these goals will  be retained as key performance parameters in the operational  requirements document currently under revision.
section_title: T-AKE Cargo Ship Program Used Human Systems Integration in Some Aspects of Ship Design, Expects Crew Size Reductions, but Did Not Establish Specific Crew Size Goals
paragraphs: In developing the T-AKE cargo ship, which is in procurement and is  expected to become operational in 2005, elements of human systems  integration were used to streamline intraship cargo handling and to refine  the requirements for civilian mariners and active-duty personnel.  However, human systems integration was not applied to the process of  intership underway replenishment, the transfer of cargo between ships  while at sea. Moreover, early acquisition documents for the T-AKE cargo  ship program did not establish specific goals for reducing crew size,  although they required the use of civilian mariners or Merchant Marines  instead of active-duty Navy personnel and mandated the examination of  cargo handling innovations to reduce crew workload. Use of Merchant  Marines or Military Sealift Command personnel generally results in a  smaller crew because these organizations employ more experienced  seamen, have reduced watchstanding requirements, and use a different  maintenance and training philosophy. The T-AKE will be operated by the  Military Sealift Command, and its projected crew will be between 5 and  20 percent smaller than the crew of the command’s legacy ships and about  60 percent smaller than the legacy ships previously operated exclusively  with Navy sailors.
The following examples illustrate the strengths and limitations of  the program’s use of human systems integration early in the acquisition  process.
The 1992 mission need statement lacked a direct reference to human  systems integration, although it does indicate that the ship’s size will  be the result of various trade-offs, including cost and crew size, and  required that the ship’s design incorporate modern propulsion, auxiliary,  and cargo handling systems to minimize operating and maintenance  personnel requirements.
The 2001 operational requirements document stated that “human  engineering principles and design standards shall be applied to the design  of all compartments, spaces, systems, individual equipment, workstations  and facilities in which there is a human interface.” However, this  document also required the T-AKE cargo ship to use U.S. Navy standard  underway replenishment equipment because of the need to interface with  other U.S. Navy and allied ships, the lack of any equivalent commercial  system, and the costs to redesign existing Navy equipment and maintain  nonstandard equipment. As a result, human systems integration was  not applied to one of the main drivers of crew size—the number of  crewmembers required to perform connected replenishment at each  replenishment station.
Program officials indicated that, because intership underway  replenishment involves the interface between the T-AKE cargo ship and all  other ship classes requiring replenishment at sea, redesign of the Navy’s  process of underway replenishment was not within their purview and,  therefore, was not addressed in the program’s human systems integration  analyses. Instead, the program’s focus was to ensure that the T-AKE cargo  ship’s design met the current requirements for performing underway  replenishment and had the flexibility for future equipment modification.  To address underway replenishment across ship platforms, in 2000 the  Navy established a naval operational logistics integrated product team  whose mission is to establish policy and doctrine for future operational  systems and ensure the integration of operational logistics systems  across ships.
Since reexamining intership underway replenishment was beyond the  scope of the ship program, program personnel said they focused on  identifying ways to reduce crew workload. In the first acquisition phase,  four contractors prepared trade studies on the integration of cargo  handling functions on the ship. In the second acquisition phase, one of  the contractors, National Steel and Shipbuilding Company, was awarded  the contract to design and construct the ship. Ultimately, labor-saving  innovations such as item scanners; an automated, rather than paper-based,  warehouse management inventory system; and safer and easier to operate  elevator doors were adopted.
Although the T-AKE cargo ship is expected to require fewer personnel  than its legacy ships, early acquisition documents did not establish a  specific crew size goal as a key performance parameter and thus did not  hold the program manager accountable for specific reductions. Rather, the  operational requirements document required that the T-AKE be crewed  largely by U.S. Merchant Marines or Military Sealift Command civilian  mariners. The Navy currently estimates that the T-AKE will be crewed by  172 individuals: 123 civilian mariners, 13 active-duty sailors in the military  department who perform cargo management/inventory functions, and  36 active-duty sailors in the aviation detachment who perform intership  cargo transfer using a helicopter (vertical replenishment).
The T-AKE cargo ship’s projected crew size of 172 personnel will be  somewhat smaller than that of its Military Sealift Command legacy ships,  the T-AE 26 Kilauea-class ammunition ships and the T-AFS 1/8 Mars-class  and Sirius-class combat stores ships, which have crews of 182-215  personnel and also use civilian mariners. The T-AKE’s crew size is  significantly smaller than when these legacy ships were crewed by  active-duty personnel. When crewed entirely by active Navy personnel,  these ships had crews of 435 and 508 sailors, respectively. Despite the  smaller crew size, the T-AKE will have a greater carrying capacity for dry  and refrigerated cargo than its legacy ships. Each T-AKE ship will be able  to carry at least 63 percent of the combined cargo capacity of a T-AFS 1  and T-AE 26.
Although the ship program did not perform the top-down analyses  recommended by human system integration experts to optimize crewing,  it did use elements of the approach to finalize staffing requirements.  To finalize the requirement for civilian mariners, program personnel  performed a functional analysis (which identified ship functions and their  crew size requirements) and ultimately determined that the initial crew  size estimate developed by the Navy could be reduced by 12, resulting  in a final requirement for 123 civilian mariners. The size of the military  department is based on an analysis that projects workload and personnel  requirements for every ship function during the most labor-intensive  operational scenarios and then allocates the workload and personnel  requirements to the minimum number of billets and skill levels.
section_title: JCC(X) Command Ship Program Made Limited Use of Human Systems Integration and Had No Formal Goals to Reduce Crew Size
paragraphs: The recently canceled JCC(X) command ship program made very limited  use of human systems integration to optimize crew size and planned to  wait until preliminary design in the next acquisition phase to begin human  systems integration activities. The program also did not hold program  managers accountable for reducing crew size below that of the legacy  command ships. The following are examples.
The mission need statement did not require the use of human systems  integration. Instead, the document required that the ship “be automated  wherever practical to reduce workload and manpower requirements”  and directed that operation by Military Sealift Command personnel be  considered for selected functions rather than Navy personnel. However,  the document stated that “changes to manpower requirements are not  expected.”
The analysis of alternatives examined crew sizes ranging from 60 percent  smaller to 50 percent larger than those of current command ships and  using civilian mariners to perform JCC(X) crew functions to reduce crew  size. The analysis found that using a mix of military and civilian personnel  rather than all military personnel would reduce personnel costs by nearly  a third, saving $2.3 billion for four ships over a 40-year service life.  However, the analysis did not include a full human systems integration  assessment of each design alternative.
At the time of its cancellation, the program had not received approval of  its operational requirements document, which would have established key  performance parameters.
Program officials stated that although achieving crew size reduction was  not included in key program documents, they expected to achieve some  crew size reductions on the JCC(X) when compared to existing command  ships through the use of modern, more reliable equipment, for example,  diesel propulsion instead of steam propulsion. Yet, despite the program’s  informal interest in reducing the size of the crew needed to operate the  ship, the analysis of alternatives did not examine optimizing via human  systems integration one of the main drivers of crew size—the size of the  embarked command staff. The total crew size of the JCC(X) equals the  sum of the embarked joint command staff and the crew needed to operate  the ship and perform basic ship functions. Navy analyses show that the  crew size needed to operate the ship depends upon the joint command  staff size and the mission equipment that is to be maintained by the crew.  Yet, all of the Navy analyses examined joint command staff alternatives,  ranging from 500 to 1,500 staff, which were larger than the fleet  commander’s staff of 285 to 449 currently embarked on existing command  ships. None of the analyses used human systems integration to determine  the optimal size of the joint command staff. “The HSI  team was not part of a larger JCC(X) System  Engineering effort, as would be expected in a full-up proposal or system development  activity. The HSI  team also did not have contact with potential  JCC(X) users or with Navy/Joint HSI  Team members, as  would be expected and desired in a normal system acquisition environment. This was due  to the unique nature of a very limited scope manning study with very limited funds.”
The study also urged the program to adopt a human systems integration  approach stating that “a human-centered design approach, implemented at  the front-end and as part of an integrated system engineering process, will  yield an optimal crew size.” The study also stated that the same human  systems integration tools could be effectively used to optimize the size for  the embarked command staff.
JCC(X) command ship program officials stated that the program planned  to employ human systems integration to optimize crew size in the next  acquisition phase by contracting with industry to perform a functional  analysis. However, according to Navy officials, the program was canceled  before these efforts began, in part because of the unacceptably high crew  size estimated for the program.
section_title: LHA(R) Amphibious Assault Ship Made Limited Use of Human Systems Integration and Had No Formal Goals to Reduce Crew Size
paragraphs: The LHA(R) program has not yet developed a comprehensive human  systems integration strategy to outline the program’s human systems  integration objectives and guide its efforts. In addition, officials told us  that very little human systems integration work was done early in the  acquisition process because officials plan to begin human systems  integration activities during preliminary design in the next acquisition  phase, called system development and demonstration. Also, early  acquisition documents for the LHA(R) amphibious assault ship program  did not establish formal goals to reduce the number of personnel required  to operate the ship. The following are examples.
The mission need statement required the use of human systems  integration to optimize manning. However, it also stated that no changes  to Navy personnel requirements were expected. Currently, the program  plans only to not exceed the crew size of the older ships that perform  similar missions. These legacy LHA 1 class ships have a crew of about  1,230 to operate the ship and can embark about 1,700 Marines.
The analysis of alternatives stated that in order for the LHA(R) to achieve  major reductions in personnel, significant new technology and research  and development funds to integrate this technology into the LHA(R)  design would be required as well as changes in culture (organization and  procedures) to adapt reduced crew size practices of the commercial sector  to the naval environment.
At the time of our review, the operational requirements document for the  LHA(R) had not been developed.
The Navy’s plans for the LHA(R) are not in concert with the Chief of Naval  Operations’ desire for major reductions in the personnel levels for all new  shipbuilding programs. In August 2002, the Chief of Naval Operations  commented on the size of the LHA-1 (the legacy ship that the LHA(R) is  replacing) saying, “I don’t want any more ships like that. The more low  technology systems that are on it, the more people we will need. And we  will need more crewmembers for support services. It [the LHA-1’s  replacement] will be built from the keel up to support the type of striking  capability that you need in your aviation arm. It is going to be a totally  different ship.”
Program officials offered two major reasons for not conducting human  systems integration early in the acquisition process: (1) they believed it  was not appropriate to start human systems integration during the very  early phases of the acquisition program (i.e., in concept and technology  development) and (2) the program lacked funding to conduct human  systems integration activities in the first acquisition phase. Program  officials plan to conduct human systems integration efforts during the  system development and demonstration acquisition phase when the  program begins preliminary design efforts. Some of these efforts,  scheduled to begin in February 2003, are to include a top-down  requirements analysis and a total ship manpower assessment.
In contrast to the opinions of LHA(R) program officials, the Navy’s human  systems integration experts stated that human systems integration is a  critical part of planning and design in the early stages of acquisition,  including the concept and technology development phase. In addition,  experience with the DD(X) program shows that the potential personnel- related cost savings resulting from the application of human systems  integration early on in a program can be significant. Moreover, experts  stated that every program, regardless of its funding levels or its reliance on  legacy systems, can benefit from a comprehensive human systems  integration approach, especially those developing crew-intensive  platforms such as the LHA(R).
section_title: Several Factors Contribute to the Inconsistent Application of Human Systems Integration and May Impede the Navy’s Ability to Optimize Crew Size
paragraphs: The program managers and the human systems integration experts we  spoke to identified four factors that inhibit the Navy’s ability to  consistently implement human systems integration across programs.  These factors are (1) neither DOD nor Navy acquisition policies establish  specific requirements for using human systems integration, such as its  timing and whether the approach should be addressed in the key  acquisition documents; (2) funding challenges often result in decisions to  defer human systems integration activities and use legacy subsystems  when acquiring new ships to save near-term costs instead of investing in  research and development to reduce costs over the long term; (3) DOD  and Navy oversight of human systems integration activities is limited and  the Naval Sea Systems Command’s role in certifying that ships delivered to  the fleet have optimum crew sizes is unclear; and (4) the Navy lacks an  effective process to change its long-standing culture and the extensive  network of policies and procedures that have institutionalized current  manning practices. As a result, some programs we examined set goals not  to exceed the crew size of 30-year old ships, waited until preliminary  design in the second acquisition phase to begin human systems integration  efforts, and excluded primary and secondary ship functions from a  rigorous analysis. In recognition of these impediments, the Navy has taken  steps to resolve some of these issues.
subsections: section_title: Lack of Specific Navy Requirements to Use Human Systems Integration Results in Inconsistent Implementation Across Programs
paragraphs: Recent DOD and Navy acquisition guidance provides program managers  with latitude about the timing and extent of human systems integration  activities and whether the approach should be addressed in key  acquisition documents. DOD guidance on the role of human systems  integration in acquisition is contained in two documents, the Defense  Acquisition memorandum and the Interim Defense Acquisition  Guidebook, issued by the Deputy Secretary of Defense, both dated October  30, 2002. Compliance with the Defense Acquisition memorandum is  mandatory; compliance with the Interim Defense Acquisition Guidebook  is discretionary. Both documents state that program managers will  develop a human systems integration strategy early in the acquisition  process to minimize total ownership cost. Neither document, however,  specifies how early in the process these efforts should begin or requires  that human systems integration analyses be performed on the various  alternatives considered in the formal analysis of alternatives.
The Navy’s main acquisition instruction requires that human systems  integration costs and impacts be adequately considered along with other  engineering and logistics elements beginning at program initiation but  does not provide for specific procedures. The Navy’s section of the  acquisition deskbook provides more detailed guidance on human  systems integration (such as providing a format for the human systems  integration plan and discussing the contents of a human systems  integration program). However, because these sources provide only broad  guidelines or are discretionary, a program manger can decide when, how,  and to what extent they will use human systems integration in their  acquisition program.
The Navy also has developed other guidance on using human systems  integration, but its use is also discretionary. For example, human systems  integration experts developed a guide for the Office of the Chief Naval  Operations, which states that a human systems integration assessment  and trade-off of design alternatives should be conducted during the first  acquisition phase. The Surface Warfare Program Manager’s Guide to  Human Systems Integration also states that human systems integration  cost, schedule, and design risk areas for each alternative concept should  be identified and evaluated. The guidance also recommends that human  systems integration assessments should be conducted at each milestone  decision review.
Because of the wording of DOD guidance and the discretionary nature of  some Navy guidance, new ship program managers vary in when they use  human systems integration during ship development. For example, the  DD(X) program specified using the approach in the mission need  statement and the analysis of alternatives further specified human systems  integration requirements be included in the operational requirements  document. In contrast, the program managers for both the JCC(X)  command ship and the LHA(R) amphibious assault ship told us that they  planned to begin their human systems integration efforts during  preliminary design after the design alternative has been selected in the  next acquisition phase--system development and demonstration. Neither  program conducted human systems integration analyses of the alternative  designs during the analysis of alternatives. As such, program officials  lacked information on how each of the alternatives compared with respect  to their proposed crew size and how their crew size would affect total  ownership costs.
section_title: Challenges in Funding Acquisition Programs Discourage Investment in Labor-Saving Technology
paragraphs: Both JCC(X) and LHA(R) program officials cited challenges in funding a  new acquisition program as a barrier to using human systems integration  to optimize crew size and therefore reduce total ownership cost. These  challenges affect whether programs conduct crew-optimizing human  systems integration activities in the earliest phases of acquisition and  whether the program will choose to invest in labor-saving technologies.
JCC(X) program officials told us that achieving personnel reductions and  using human systems integration to optimize crew size could increase  acquisition costs. The Navy’s human systems integration experts stated  that program managers have long been incentivized to hold down  acquisition costs without considering how such choices may affect  operating and support costs, such as personnel-related costs, over the life  of the ship. According to the Navy’s human systems integration experts,  labor-saving technology may add to the acquisition cost of a ship but may  also reduce the operating and support costs incurred over the ship’s  service life. Whether to use technology or sailors to perform a function  should be determined by a systematic analysis of costs and capabilities  performed as part of the human systems integration functional analysis— an effort not undertaken by the JCC(X) command ship program.
Similarly, at the time the LHA(R) program was initiated in 2001, the Navy  decided not to invest in human systems integration activities and research  and development on new labor-saving technologies for the ship. The  program plans to capitalize, where appropriate, on systems already in  development for other ships such as the DD(X) destroyer and the CVN(X)  aircraft carrier but has not yet identified any labor-saving technologies or  processes that might be adapted from these programs. Program officials  said the program was not resourced to develop new technologies, having  received only $20 million in research and development funds from  program initiation through fiscal year 2002. However, the up-front savings  of not investing in research and development and human systems  integration activities must be weighed against the higher operating and  support costs incurred over the life of the ship and the foregone capability  and quality of life improvements that can accompany new technology and  human-centered design. For illustrative purposes, we calculated that a  nominal 25 percent reduction in a 1,245-person crew could provide a  personnel cost avoidance of nearly $1 billion over the service life of a ship,  or nearly $4 billion for a 4-ship class. In addition, DD(X) destroyer  program officials were uncertain about the extent to which programs now  in development outside the DD(X) destroyer family of ships will be able to  leverage its new technology, citing the costs associated with adapting  technology to new platforms that perform different missions. Rather,  DD(X) program officials told us that it is imperative for the new ship  programs to use human systems integration to inform such decisions.
section_title: DOD and Navy Offices Have Limited or Unclear Authority to Require Human Systems Integration Activities for Ship Programs
paragraphs: Several offices within DOD and the Navy have an advisory role regarding  the implementation of human systems integration, although they lack the  authority to require that it be used to optimize crew size and that it be  addressed in specific acquisition documents or at each acquisition  milestone. The Offices of the Secretary of Defense, Personnel and  Readiness, and the Chief of Naval Operations (Acquisition Division)  Acquisition and Human Systems Integration Requirements Branch both  review new program acquisition documents and provide guidance on  human systems integration policy. Additionally, the Office of the  Secretary of Defense, Personnel and Readiness, assists in the development  of human systems integration policy and addresses policy issues at  meetings of defense acquisition executives. The Office of the Assistant  Secretary of the Navy (Research, Development, and Acquisition) Chief  Engineer, uses human systems integration in its “system of systems”  examination of capability above the individual ship level to ensure  that systems can function together across various ships to perform  the mission.
In recognition of the need for an organization within the ship community  to “lead the effort to institutionalize humans systems integration…,” the  Navy, in October 2002, created the Human Systems Integration Directorate  within the Naval Sea Systems Command whose missions include  establishing human systems integration policy and standards for the  Naval Sea Systems Command;  ensuring the implementation of human systems integration policy,  procedures, and best practices;  assisting program offices in developing and sustaining human systems  integration plans; and  certifying that ships and systems delivered to the fleet optimize  ship crewing, personnel, and training and promote personnel safety,  survivability, and quality service.
Because of its role as the certifying authority for human systems  integration within the Naval Sea Systems Command, the directorate  may have more authority than the previously mentioned organizations to  ensure that human systems integration is implemented. However, the  memorandum establishing the directorate and the instruction specifying  its functions do not specify how certification will be accomplished, the  acquisition stage at which it will be required, or consequences of  noncompliance.
section_title: Navy Policies and Culture May Impede Introduction of Labor-Saving Technologies and Approaches
paragraphs: Navy acquisition officials also identified the layers of Navy policies,  procedures, and instructions that affect ship crew levels and cultural  resistance to novel concepts as impediments to optimizing ship crews.  They told us that even when human systems integration is used in the  early stages of an acquisition program to identify ways to reduce crew  size, it is difficult to achieve a consensus among numerous stakeholders  within the Navy to change long-standing policies and practices so that  labor-saving approaches or technologies can be implemented. To facilitate  this process, the DD(X) destroyer program established a forum to evaluate  policy barriers to proposed innovations and facilitate needed changes.  However, this effort was limited to selected ships. Other programs such as  the LHA(R) amphibious assault ship and the JCC(X) command ship had  not established a similar forum to resolve the policy barriers to optimize  crewing on these ships. As a result, the Navy currently lacks an ongoing  process to facilitate examination of outmoded policies and procedures  that may impede optimizing crewing in all new ship acquisition programs.
subsections: section_title: Policy and Cultural Impediments
paragraphs: Navy officials explained that changing policies and procedures is a  complex and time-consuming task because the current way of doing  business has been incorporated in instructions at all levels in the Navy,  ranging from the Secretary of the Navy to commanders of the Atlantic and  Pacific Fleets, and across a number of areas, such as recruiting, retention,  training, quality of life, and the environment. In addition, new ways of  doing business, such as those envisioned for the DD(X) destroyer, will  affect and require modifications to Navy doctrine, tactics, and operational  requirements. Furthermore, proposed changes must be evaluated for  compliance with governing statutes in such areas as compensation,  occupational safety and health, and aviation. As such, any change involves  numerous stakeholders who must be consulted and grant approval.  For example, DD(X) officials told us that it took about 18 months to  coordinate with numerous stakeholders to change applicable policies to  reduce the number of crewmembers required during flight operations from  48 to 15. Moreover, officials told us that this change is just the beginning  since the DD(X) destroyer program has identified numerous Navy policies  and procedures across a wide spectrum of topics that need to be changed  in order to adopt the innovations proposed by industry to meet the  DD(X)’s cost and capability requirements.
Officials with the other programs we examined also viewed Navy policies  as a barrier to optimized crewing. JCC(X) command ship program officials  reported that current Navy policy and practice would have been a barrier  to implementing potential crew size reductions had this program gone  forward. Two examples cited by program officials are bridge  watchstanding and main propulsion machinery monitoring. At present,  Navy practice for bridge watch requires approximately 11 personnel in  contrast to commercial practice, which requires 1 person on watch and  1 on stand by. Similarly, Navy practice for machinery monitoring requires  personnel in the machinery space at all times to ensure that power is  available. This contrasts with commercial practice, which permits putting  machinery on automatic and using sensors with alarms routed to a  watchstanders’ stateroom during certain hours. Officials stated that  implementing these commercial practices would have required evaluating  their appropriateness for a Navy operating environment and, if approved,  would have required modifying existing policies and procedures.  Furthermore, the LHA(R) analysis of alternatives concluded that  significant changes in organization and procedures are crucial to achieving  a substantial reduction in crew size. Cultural change is a particular  challenge for the LHA(R) program because the amphibious mission is  complex and both Navy and Marine organizations would be involved in  developing and implementing changes.
Navy officials stated that current funding practices in which personnel  costs are funded from centralized accounts and not out of the operating  fleets’ budget do not foster an awareness of the true cost of having sailors  on board ships and encourage viewing sailors as a “free resource.”  Additionally, because traditional, time-tested methods and crewing have  proven successful in the past, officials told us that Navy commanders have  little incentive to assume the risks associated with adopting new ways of  accomplishing shipboard tasks with fewer crewmembers, especially when  they lack awareness of and accountability for personnel costs.
section_title: Navy Lacks a Process to Systematically Address Impediments to Innovation in All New Ship Programs
paragraphs: Because of the magnitude of changes needed to reduce and optimize  crewing on the DD(X) destroyer, the program established an effort  to identify and resolve policy barriers to implementing labor-saving  approaches that conflict with current policy, statutes, or practice. This  effort includes (1) reaching out to Navywide personnel development and  training organizations and to Atlantic and Pacific Fleet commanders and  (2) establishing the DD(X) Policy Clearinghouse Web-based tool to  facilitate collaboration with multiple stakeholders and resolve policy  impediments to implementing innovations planned for the DD(X)  destroyer. The DD(X) clearinghouse was recently transferred to the  Naval Sea Systems Command’s Human Systems Integration Directorate.  However, there are currently no requirements for this forum to address  the policy barriers to optimizing crewing encountered in all new  ship acquisitions.
section_title: Conclusions
paragraphs: Given the Navy’s recapitalization challenges, efforts to control personnel  costs and minimize total ownership costs are becoming increasingly  important. Applying human systems integration principles to optimize  crew size has the potential to result in a host of cost and operational  benefits, including saving billions of dollars by reducing total ownership  costs and increasing operational performance and ship maintainability.  The experience to date in the DD(X) destroyer program shows that  requiring human systems integration from the earliest stages of a program  (during concept and technology development) and using the results to  establish a crew size reduction goal as a key performance parameter are  effective strategies to holding program managers accountable during  program reviews for making significant progress toward reducing crew  size. The DD(X) experience also shows that even when these practices are  followed, the program will still face challenges to achieving these  goals and encounter pressures to relax the goals as the system design  progresses, thereby supporting human systems integration experts’ view  that human systems integration plans and activities should receive  continued review and focus throughout the acquisition process. In  contrast, programs such as the JCC(X) and LHA (R) that do not use human  systems integration early and do not hold program managers accountable  during program reviews for crew size reduction are less likely to achieve  the meaningful reduction in crew size. Unless the Navy more consistently  applies human systems integration early in the acquisition process and  establishes meaningful goals for crew size reduction, the Navy may miss  opportunities to lower total ownership costs for new ships, which are  determined by decisions made early in the acquisition process.
The Navy’s varied approach to applying human systems integration has  occurred partly because Navy guidance allows program managers  considerable discretion in determining the extent to which they apply  human systems integration principles in developing new systems. In the  absence of clear requirements that human systems integration programs  will be a key feature of all future acquisition programs, efforts to optimize  crew size will continue to vary due to the competing pressures placed on  program managers, and the Navy is likely to continue to miss  opportunities to reduce personnel requirements for future ships. As a  result, the Navy’s funding challenges may be exacerbated, and it may not  be able to build or support the number of ships it believes are necessary to  support the new defense strategy. Although the Navy’s recent efforts to  establish a focal point for human systems integration policy within the  Naval Sea Systems Command is a positive step, the success of this office  will depend on its authority to influence acquisition programs in their  initial stages. Because the instruction establishing this office does not  clearly explain the process this office will use to certify that ships  delivered to the fleet will have optimized crews, there is a risk that the  office may not have sufficient leverage to influence new programs in their  early stages and that this may result in missed opportunities to reduce  crew size and achieve long-term cost savings.
Even when the Navy uses a disciplined human systems integration process  early in an acquisition program to identify ways to optimize crew size,  implementation of new technologies and procedures is often hindered by  the Navy’s culture and traditions, which are institutionalized in a wide  array of policies and procedures affecting personnel levels, maintenance  requirements, and training. In recognition of these barriers, the DD(X)  program and the operational logistics community have established  processes to address these barriers for their particular ship or community.  However, not all new ship acquisition programs have developed or have  access to such a forum to facilitate removing barriers to optimized  manning to ensure that costly outdated policies and procedures are  systematically reexamined as new innovations are developed.
section_title: Recommendations for Executive Action
paragraphs: To ensure that the nation’s multibillion-dollar investment in Navy ships  maximizes military capability and sailor performance at the lowest  feasible total ownership cost, we recommend that the Secretary of the  Navy develop and implement mandatory policies on human systems  integration requirements, standards, and milestones. Specifically, for each  new system the Navy plans to acquire, the Secretary of the Navy should  require that  a human systems integration assessment be performed as concepts for the  system are developed and alternative concepts are evaluated;    human systems integration analyses, including trade-off studies of design  alternatives, be used to establish an optimized crew size goal that will  become a key performance parameter in the program’s requirements  document; and    human systems integration assessments be updated prior to all  subsequent milestones.
To strengthen the Naval Sea Systems Command’s role in promoting the  use of human systems integration for new ship systems, we recommend  that the Secretary of the Navy require the command to clarify the Human  Systems Integration Directorate’s role in and process for certifying that  ships and systems delivered to the fleet optimize ship crewing.
To facilitate the review of possibly outdated policies and procedures as  new labor-saving innovations are identified through human systems  integration efforts, we recommend that the Secretary of the Navy require  that the Naval Sea Systems Command’s Human Systems Integration  Directorate establish a process to evaluate or revise existing policies and  procedures that may impede innovation in all new ship acquisitions.
section_title: Agency Comments and Our Evaluation
paragraphs: In commenting on a draft of this report, DOD agreed with our  recommendations and indicated that actions were underway or planned  to implement them. DOD stated that actions taken in response to our  recommendations would only enhance ongoing human systems integration  initiatives; ensure more consistent application of human systems  integration processes across all ship acquisition programs; and lead to  optimized ship crews, increased system performance, and reduced life- cycle costs. The Navy intends to implement our recommendation that it  require ship programs to use human systems integration to establish crew  size goals and help achieve them, in part, by developing a new program  called SEAPRINT (Systems Engineering, Acquisition and PeRsonnel  INTegration), modeled after the Army’s MANPRINT program that we cite  in our report. The Navy’s SEAPRINT program will develop Navywide  policy that identifies, mandates, and establishes accountability for human  systems integration analyses. This policy will mandate that human systems  integration is to be addressed in  a specific plan before the acquisition’s earliest milestone,  the initial capabilities document (formerly called the mission needs  statement),  the capabilities development document (formerly called the operational  requirements document), and  assessments performed as part of concept exploration and development  and updated prior to all subsequent milestones.
DOD also stated that it endorses a manpower-related key performance  parameter for all new ship acquisition programs. In response to our  recommendation that the Navy clearly define human systems integration  certification standards for new ships, DOD stated that the Navy is  developing technical human systems integration criteria and metrics that  will be used for measuring and certifying that ships and ship systems meet  human systems integration standards. With regard to our recommendation  that the Navy formally establish a process to examine and facilitate the  adoption of labor-saving technologies and best practices across Navy  systems, DOD stated that the Navy has established a new human systems  integration clearinghouse, implemented a pilot study using the  clearinghouse, and involved stakeholders from across the Navy. DOD also  provided technical comments, which we incorporated where appropriate.  DOD’s comments are included in appendix VI of this report.
We are sending copies of this report to interested congressional  committees; the Secretary of Defense; the Secretary of the Navy; and the  Director, Office of Management and Budget. We will make copies  available to others upon request. In addition, the report will be available at  no charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please call me at  (202) 512-4402 or e-mail me at stlaurentj@gao.gov. Key staff members that  contributed to this report were Roderick Rodgers, Jacquelyn Randolph,  Suzanne Wren, Mary Jo LaCasse, Charles Perdue, and Jane Hunt.
section_title: Appendix I: Scope and Methodology
paragraphs: To assess the Navy’s use of human systems integration principles to  optimize crews and goals to reduce crew size on the four new ship  programs we were asked to review, we obtained and analyzed key  acquisition documents such as mission need statements, analyses of  alternatives, and operational requirements documents as well as human  systems integration plans and analyses. We also interviewed Naval Sea  Systems Command and Military Sealift Command officials who are  responsible for the DD(X), T-AKE, JCC(X), and LHA(R) programs to  discuss the use of human systems integration and crew size goals. We  obtained current ship crewing documents from the Navy’s Manpower  Analysis Center and the Military Sealift Command and compared the crew  size goals for the four ship programs we reviewed to the crew size levels  for older ships that perform similar missions. We also obtained data from  the Naval Sea Systems Command on the Arleigh Burke-class destroyer  program on crew sizing and workload to compare with the contractor’s  crew size estimate for the DD(X). To understand the extent to which the  T-AKE’s primary mission of underway replenishment affects crew size, we  interviewed (1) experts from the Underway Replenishment Department at  the Naval Surface Warfare Center (Port Hueneme Division) and the  National Steel and Shipbuilding Company (which designed and will build  the T-AKE) and (2) a subject matter expert on Navy underway  replenishment. To gain an understanding of operational logistics and cargo  storage and warehousing, we interviewed officials from the Chief of Naval  Operations (Strategic Mobility/Combat Logistics) and St. Onge Company  (a subcontractor for the T-AKE ship program) and visited the Defense  Distribution Depot Susquehanna, Pennsylvania, one of the Department of  Defense’s (DOD) largest and most automated distribution centers. To  obtain information on the Navy’s methods of calculating total ownership  costs, we interviewed officials from the Naval Center for Cost Analysis and  the Center for Naval Analyses. To calculate the ship crewing cost  avoidance potential for the DD(X) and LHA(R) programs, we used data  from the Navy’s Cost of a Sailor study for capturing comprehensive  personnel costs and converted the data to fiscal year 2002 dollars.
To evaluate factors that may impede the Navy’s use of human systems  integration principles, we obtained and analyzed DOD, Joint Staff, and  Navy systems acquisition directives, instructions, and guidance (e.g.,  the internet-based Defense Acquisition Deskbook and the Program  Management Community of Practice). We reviewed the interim defense  acquisition guidance as it pertains to the acquisition process, human  systems integration, and total ownership cost. We did not assess the ship  programs’ compliance with the several prior versions of DOD and Navy  acquisition guidance, but we did evaluate the extent to which human  systems integration was applied and whether crew size goals were  established. We also obtained and reviewed numerous articles on  military and civilian applications of human systems integration. To  obtain information on the formulation and oversight of human systems  integration policy and guidance, we met with officials from the offices of  the Secretary of Defense; the Assistant Secretary of the Navy for Research  Development and Acquisition; the Assistant Secretary of the Navy, Chief  Engineer; and the Chief of Naval Operations (Acquisition and Human  Systems Integration Requirements Branch). To obtain additional  information on the benefits of human systems integration and best  practices, we interviewed subject matter experts with the Naval Sea  Systems Command’s Human Systems Integration Directorate, the DD(X)  Program Office, the Army’s Office of the Deputy Chief of Staff for  Personnel, Manpower and Personnel Integration (MANPRINT)  Directorate, Carlow International Incorporated, and the Office of Naval  Research’s Human Systems Science and Technology Department, and we  attended the American Society of Naval Engineers Conference on Human  Systems Integration. To gain insight on labor-saving technologies and  changes to policies and procedures required to implement these  innovations, we met with officials from the Naval Sea Systems Command’s  SMARTSHIP Program Office; met with officials and toured the Office of  Naval Research’s Afloat Lab in Annapolis, Maryland; and met with officials  responsible for the DD(X) Policy Clearinghouse and the Naval Sea  Systems Command’s Human Systems Integration Directorate. We  discussed the funding for human systems integration with the Naval Sea  Systems program managers for the four ship programs we reviewed.
We conducted our review from June 2002 through April 2003 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: Ships Included in Our Evaluation
subsections: section_title: DD(X) Destroyer
paragraphs: In 1995, the Navy established the 21st Century Surface Combatant  program to develop the next generation of surface combatants that would  replace retiring destroyers and frigates on a timely basis. In November  2001, the Navy restructured this program from one intended to develop a  single ship class of 32 ships into its current form known as the DD(X). The  new program aims to develop and acquire three new classes of surface  combatants to include the DD(X) as the centerpiece, a cruiser called  CG(X), and a smaller littoral combat ship.
The first DD(X) destroyer is to be procured in fiscal year 2005 and enter  service in fiscal year 2011. The initial DD(X) is viewed as a “test bed” for  the host of new technologies under development. The Navy plans to  employ a spiral acquisition strategy for the ship class in which new  technology will be phased in over three distinct ship flights.
Plans call for the DD(X) destroyer to have a number of new features and  technologies, including  an advanced electric-drive/integrated power system for propelling the ship  that could become the basis for applying electric-drive technology more  widely throughout the fleet,   labor-saving technologies that may permit the ship to be operated with a  crew of 125 to 175 people instead of the more than 350 needed to operate  current Arleigh Burke-class (DDG-51) destroyers,   a new hull design for reduced detectability,   two new 155-mm Advanced Gun Systems for supporting Marine forces  ashore, and   128 vertical-launch tubes for Tomahawk cruise missiles and  other weapons.
The Navy is now reevaluating many of the ship’s operational requirements  and cost estimates (which were determined and approved under the  earlier DD-21 program) and may make substantial changes to the originally  envisioned capabilities, including relaxing the crew size and detectability  goals, changing the type of gun and amount of munitions carried, and  reducing the number of vertical launch tubes.
Previously, the Navy projected the unit procurement cost for the DD-21  destroyer to be not more than $750 million in fiscal year 1996 dollars  (the equivalent of about $795 million in fiscal year 2001 dollars)— somewhat less than the $950 million unit procurement cost of today’s  Arleigh Burke-class destroyers. The DD-21 was also envisioned to have an  operating and support cost of not more than $6,000 per hour—about  one-third less than that of the Arleigh Burke-class, in large part resulting  from the smaller crew planned for the future destroyer. In April 2002, the  Navy selected Northrop Grumman Ship Systems as the design agent for  the DD(X) and the program entered detailed design.
section_title: T-AKE Cargo Ship
paragraphs: The T-AKE cargo ship is the new combat logistics force ship to be  operated by the Military Sealift Command. The ship’s primary mission is  to shuttle food, ammunition, repair parts, supplies, and limited quantities  of fuel to station ships and combatants. The new ship will replace T-AE 26  Kilauea-class ammunition ships and T-AFS 1/8 Mars-class and  Sirius-class combat stores ships in the Military Sealift Command.  The ship’s secondary mission is to operate with an oiler (T-AO 187  Kaiser-class) to provide logistics support to a carrier battle group. In this  capacity, the T-AKE will replace AOE 1 Sacramento-class ships.
The ship program initiated development in 1995 and began procurement in  October 2001. The Navy has purchased 3 of the 12 planned ships for a total  of almost $1 billion, with delivery expected in fiscal years 2005 and 2006.  Current plans are to purchase the 4th through 12th ships between fiscal year  2003 and 2007 for delivery between fiscal year 2006 and 2010. Once all are  purchased and delivered, T-AKE cargo ships will represent 41 percent of  the recapitalized combat logistics force fleet (at full operating status).
Military Sealift Command officials mentioned several factors—mission  requirements and personnel policies—that explain why, in comparison to  the Navy, they are able to operate combat logistics force ships with  smaller crews. Logistics ships in the Military Sealift Command have fewer  missions and therefore can operate with smaller crews. For example,  unlike Navy ships, Military Sealift Command logistics ships do not carry  weapons and therefore their crews do not require weapon operators.  Military Sealift Command ships also incorporate several other crew  reduction practices, including an unattended engine room, minimal bridge  watch by use of integrated bridge system technology, self-service laundry  facilities and food service initiatives. Command officials also said that  because of their personnel policies, civilian mariners are more  experienced than their Navy counterparts. Specifically, because there are  no personnel policies requiring job rotation or that individuals leave the  service if they are not promoted (“up or out”), civilian mariners are more  likely to have been in their current job longer than active-duty Navy  personnel. Command officials said that these personnel policies result in a  workforce that is more experienced than their Navy counterparts.
The Military Sealift Command’s operating policies also enable it to operate  cargo ships with smaller crews than the Navy. For example, command  officials said that their policy requires 9 crewmembers per underway  replenishment station and that the Navy requires 20 per station. The  Military Sealift Command also does not assign a safety officer to each  underway replenishment station as the Navy does.
section_title: JCC(X) Command Ship
paragraphs: In November 1999, the Navy established the Joint Command and Control  (Experimental) or JCC(X) program to replace the Navy’s four aging  command ships built in the late 1960s and early 1970s. In addition, the  JCC(X) was intended to provide an afloat platform for performing joint  command and control functions, such as those performed by a joint force  commander without the need to obtain permission from host countries to  establish a land-based headquarters operation.
By November 2001, the Navy had received the Office of the Secretary of  Defense’s endorsement for an afloat command capability and completed  its formal analysis of alternatives. This analysis showed that the assigned  Navy crew (the ship’s operators) would account for roughly half the  life-cycle cost for a JCC(X). It also showed that a mix of Navy sailors and  civilian mariners would be capable of performing the crew functions at  two-thirds of the personnel cost, saving about $2 billion for four ships over  a 40-year service life. The analysis further estimated that a newly designed  ship sized for an embarked command staff of about 800 (these people are  in addition to the ship’s crew) would cost about $1 billion for a lead ship in  fiscal year 2006 and $850 million for a follow-on ship if three were built.  Subsequent to this analysis, the Navy’s draft 2004 budget plan eliminated  funding for the JCC(X) and instead directed another ship program, the  Maritime Prepositioning Force (Future), to study developing joint  command and control modules or variants.
section_title: LHA(R) Amphibious Assault Ship Replacement
paragraphs: In 2001, the Navy established the Amphibious Assault Ship, General  Purpose (Replacement) or LHA(R) program to replace its five aging LHA 1  Tarawa-class amphibious assault ships. These ships are primarily  designed to move large quantities of Marines, their equipment, and  supplies onto any shore during hostilities.
The first LHA ship will be replaced by a Wasp-class amphibious assault  ship, the LHD-8, in approximately fiscal year 2007, and the remaining  ships will be replaced by a modified version of the LHD 8 no later than  fiscal year 2024. The modified variant will be made longer and wider to  accommodate the larger and heavier aircraft the Marines are developing,  the MV-22 Osprey and the Joint Strike Fighter.
The Navy estimates the cost for the first ship to be about $3 billion with  the three successor ships costing about $2.1 billion each. The ship’s  annual operating and support cost is estimated to be about $111 million.  The LHA(R) program is currently in the first acquisition phase called  concept technology and development.
section_title: Appendix III: Defense Acquisition
paragraphs: Although its regulatory structure is undergoing change, the Department of  Defense’s (DOD) complex process to deliver a new ship class to the  fleet occurs in three steps. First, the Navy’s requirements community  establishes requirements for a new system. Second, the Navy’s acquisition  organizations and contractors design and produce the ship. Finally, after  building the ship, the warfighter assumes responsibility for operating and  maintaining the ship. DOD’s policy is to acquire weapons systems using a  disciplined systems engineering process designed to optimize total  system performance and minimize total ownership costs. The regulation,  requirements, and design aspects of the acquisition process are discussed  below.
subsections: section_title: Defense Acquisition Regulatory Structure Is Undergoing Change
paragraphs: Weapons systems acquisition is governed by a complex regulatory  structure ranging from public laws to nonmandatory policies, practices,  and guidance. Until recently, three major DOD regulatory documents  guided the management of Defense acquisition: DOD Directive 5000.1,  “The Defense Acquisition System;” DOD Instruction 5000.2,  “The Operation of the Defense Acquisition System;” and DOD Regulation  5000.2-R, “Mandatory Procedures for Major Defense Acquisition Programs  (MDAPs) and Major Automated Information Systems (MAIS) Acquisition  Programs.” On October 30, 2002, the Deputy Secretary of Defense  canceled all three documents and by memorandum issued interim  guidance. On an interim basis, the DOD 5000.2-R was reissued as a  guidebook, Interim Defense Acquisition Guidebook, to be used for best  practices, lessons learned, and expectations; but its guidance is not  mandatory. Additional, supporting, discretionary best practices; lessons  learned; and expectations are posted on DOD’s internet Web site, DOD  5000 Series Resource Center. The interim DOD guidance retains the basic  acquisition system structure (i.e., no new phases), emphasizes  evolutionary acquisition, modifies the requirements generation  documents, and makes several other changes. Policies and procedures for  developing and approving requirements for new systems are also  under revision.
section_title: The Acquisition Process Contains Several Checkpoints for Assessing Progress
paragraphs: DOD’s acquisition process, as outlined in its interim guidance issued  October 30, 2002, provides an ordered structure of tasks and activities  to bring a program to the next major checkpoint. These checkpoints,  called milestones, are the points at which a recommendation is made and  approval sought regarding starting or continuing an acquisition program  into one of three phases: concept and technology development, system  development and demonstration, and production and deployment  (see fig. 2). The phases are intended to provide a logical means of  progressively translating broadly stated mission needs into well defined  system-specific requirements and ultimately into effective systems. A  fourth phase, operations and support, follows the system acquisition. This  phase represents the ownership period of the system when a unit, in this  case a ship, is fielded and operated by sailors for a period of 30 to 50 years.  A program’s progress toward established program goals, or key  performance parameters, is assessed at milestones.
The concept and technology development phase has two major efforts:  concept exploration and technology development. This phase begins with  a milestone A decision to enter concept and technology development.  Entrance into this phase depends upon a validated and approved initial  capability document . Concept exploration  typically consists of competitive, parallel, short-term concept studies  guided by the initial capability document (mission need statement). The  focus of these studies is to refine and evaluate the feasibility of alternative  solutions to the initial concept and to provide a basis for assessing the  relative merits of these solutions. Analyses of alternatives are used to  facilitate comparisons. A project may enter technology development  when a solution for the needed capability has been identified. This effort  intends to reduce technology risk and to determine the appropriate set  of technologies. A project exits technology development when an  affordable increment of militarily-useful capability has been identified,  the technology for that increment has been demonstrated in a relevant  environment, and a system can be developed for production within a short  time frame (normally less than 5 years). During technology development,  the user is required to prepare the capability development document   to support subsequent program  initiation. An affordability determination is made in the process of  addressing cost as a military requirement and included in the capability  development document , using  life-cycle cost or, if available, total ownership cost.
The purpose of the system development and demonstration phase is to  develop a system. This phase has two major efforts: system integration  and system demonstration. The entrance point is milestone B, which is  also the initiation of an acquisition program. The system integration effort  intends to integrate subsystems and reduce system-level risk. The system  can enter system integration when the program manager has a technical  solution for the system, but has not yet integrated the subsystems into a  complete system. The critical design review during system development  and demonstration provides an opportunity for mid-phase assessment of  design maturity. The system demonstration effort intends to demonstrate  the ability of the system to operate in a useful way consistent with the  validated key performance parameters. The program can enter system  demonstration when the program manager has demonstrated the system  with prototypes. This work effort ends when a system demonstrates  its capabilities in its intended environment using engineering development  models or integrated commercial items (in addition to several other  criteria).
The purpose of the production and deployment phase is to achieve an  operational capability that satisfies mission needs. The decision to  commit DOD to low-rate initial production takes place at milestone C.  Continuation into full-rate production results from a successful full-rate  production decision review. During this effort, units shall attain initial  operational capability.
Operations and support has two major efforts: sustainment and disposal.  The objectives of this activity are the execution of a support program that  meets operational support performance requirements and sustainment of  systems in the most cost-effective manner for the life cycle of the system.  When the system has reached the end of its useful life, it must be disposed  of in an appropriate manner.
section_title: Appendix IV: Summary of DD(X) Destroyer Gold Team Trade Studies
paragraphs: Trade studies are required to support decisions throughout the systems  engineering process. During a requirements analysis, requirements are  balanced against other requirements or constraints, including cost.  Requirements analysis trade studies examine and analyze alternative  performance and functional requirements to resolve conflicts and satisfy  customer needs. As part of the design competition for the DD(X)  destroyer, the competing contractors conducted trade studies and  analyses on their system concept designs and the related systems  requirements. Table 1 highlights some of the 23 trade studies conducted by  the winning design agent, Northrop Grumman Ingalls Shipyard and  Raytheon.
section_title: Appendix V: Comparison of DDG 51 and DD(X) Crew Sizes
paragraphs: Plans for the DD(X) destroyer envision significant reductions when  compared to previous destroyer ships in the number of crewmembers  required to man watches, provide support functions, and perform special  evolutions. For example, DD(X) plans call for 20 watchstations, requiring  60 billets, a significant reduction from the DDG 51 destroyer, which has  61 watchstations requiring 163 billets. Similarly, DD(X) ship crew sizing  studies project that 833 hours will be required per week for own unit  support functions such as administration, messing, and supply while the  DDG 51 requires 5,500 for the same functions. To achieve these proposed  reductions, the DD(X) plans to employ a new operational crewing  concept, human-centered design and reasoning systems, advances in ship  cleaning and preservation, a new maintenance strategy, an automated  damage control system, and “reach back” technologies and distance  support. Officials emphasized that the DD(X) plans will continue to evolve  as the program matures. In addition, changes to the DD(X) destroyer’s  operational requirements, which are currently being reevaluated, will  likely further affect these estimates.
subsections: section_title: DD(X) Operational Crew Size Concept
paragraphs: The approach to operational crewing on the DD(X) destroyer will differ  markedly from that employed on legacy ships. The older ship classes tend  to have legacy systems and watchstations that are “stovepiped,” meaning  that they maintain separate stations and databases for such things as  sensors, weapon systems, and logistics, which are not linked together and  which require people to be specially trained on these systems. This results  in an inflexible work environment in which commanders are unable to  level workload across watchstanders because they are trained in separate  disciplines. It requires extra people, with little increase in capability. The  DD(X) concept is to have watchstanders trained functionally across  warfare areas who can be flexibly employed as the situation demands.  This approach results in a more compact, flexible watch team, which  requires fewer augmentations and which is designed to flexibly respond to  a variety of tactical situations. Underpinning this concept is a strategy in  which crewmembers will be highly trained across multiple warfare areas  or maintenance tasks and advanced skills will apply across multiple  disciplines with specialized skills only being used periodically.
section_title: Human-Centered Design and Reasoning Systems
paragraphs: The DD(X) destroyer envisions reducing underway watchstanding through  greater use of human-centered design and reasoning systems such as  integrated bridge system technologies demonstrated in CG 47  Ticonderoga-class “smart ship” and many commercial ships that provide  computer-based navigation, planning and monitoring, automated radar  plotting, and automated ship control;  the integrated command environment that provides reduced combat  information center crewing by using “multi-modal watchstation” type  displays, the ability to monitor more than one watchstation at each  console, and the use of decision support systems to facilitate  instantaneous situational awareness;  computerized engineering control systems that are extensively used in the  commercial shipping industry and machinery space design that permits  zero underway crewing by using remote monitors and sensors; and  a flexible watch team-type organization.
section_title: Advances in Cleaning and Preservation
paragraphs: The DD(X) destroyer plans to use advances in ship cleaning and  preservation to free sailors from traditional maintenance and preservation  duties and privatizing the preservation work that cannot be engineered  away. Reliability-centered maintenance and condition-based maintenance  concepts will be employed on the DD(X) instead of the traditional planned  maintenance system currently used on DDG 51 destroyers. This change is  expected to reduce noncorrective type maintenance and significantly  reduce corrective maintenance induced by the planned maintenance  system. In addition, routine maintenance on the DD(X) is projected to be  reduced by increased equipment reliability and a strategy of replacing  failed components on board instead of repairing them at sea. Lastly,  cleaning is expected to be reduced by better ship design that capitalizes on  commercial shipping industry best practices such as cornerless spaces and  maintenance-free deck coverings.
section_title: DD(X) Maintenance Strategy
paragraphs: The DD(X) destroyer maintenance strategy focuses on allowing sailors  to concentrate on war-fighting tasks and skills rather than on ship  maintenance and preservation (i.e., “rust busting” skills). The DD(X)  maintenance strategy envisions no organizational level repair conducted  on the ship. As such, many repair watches have been eliminated. Three  key elements of the DD(X) maintenance strategy include  reducing maintenance requirements through improved system reliability  and redundancy and to leverage labor-saving advances in corrosion  control materials and technology,  improving maintenance work efficiency by conducting condition-based  maintenance instead of scheduled maintenance, and    using reach back and remote monitoring support while deployed.
section_title: Automated Damage Control System
paragraphs: The DD(X) destroyer will employ extensive automated damage  control systems, integrated with an optimally manned damage control  organization to quickly suppress and extinguish fires and control  their spread.
section_title: Use of Reach Back Technologies and Distance Support
paragraphs: The DD(X) destroyer plans to use “reach back” technologies and distance  support to reduce crew workload. “Tele-systems” initiatives are being  studied for ship crew reduction in the areas of medicine, personnel,  pay, training, and maintenance. DD(X) also envisions having real-time  collaboration between the ship and shore, and between ships. Ships would  access expertise from the systems commands, industry, and other  deployed ships on a year round, around the clock basis.
Table 2 compares the workload and crew composition for the DDG 51  Flight IIA and those proposed for the DD(X).
In addition to the daily shipboard routine of standing watches in the  various ship’s departments, designated crewmembers also have collateral  duties to support special events, referred to as special evolutions. These  evolutions involve activities such as underway replenishment of fuel, food  and ammunition transferred from either helicopters or other ships, flight  operations, small boat operations, and anchoring. The number of people  required and the estimated labor hours per week for these special  evolutions are other indicators of ship workload. Table 3 compares the  number of billets and weekly workload required for selected special  evolutions on the Arleigh Burke-class destroyer with those estimated for  the DD(X) destroyer. Table 3 compares the billets and labor hours  required per week for special evolutions on the DDG 51 Flight IIA and  those proposed for the DD(X).
section_title: Appendix VI: Comments from the Department of Defense
paragraphs: The following is GAO’s comment on the Department of Defense’s letter  dated May 12, 2003.
subsections: section_title: GAO’s Comment
paragraphs: 1.  We disagree that the tone of our report implies a lack of interest or  desire on the part of program managers to pursue manpower  reductions. Rather, our report notes that a number of factors, including  funding issues, create barriers that make it more difficult for program  managers to pursue manpower reductions and develop robust human  systems integration programs. Moreover, we agree that resourcing  human systems integration and supporting analyses at the earliest  stages of the program is a responsibility that does not wholly reside  with the program manager but is shared by the Navy staff. As our  report clearly points out, given the existing barriers and an absence of  specific requirements to implement a comprehensive human systems  integration approach, the JCC(X) and LHA(R) programs did not  identify or request resources for performing human systems  integration and related analyses to support the research and  development required to pursue advanced technology that could have  enabled workload and manpower reductions.