Hydrographic Surveying: NOAA Needs Better Cost Data and a Strategy for Expanding Private Sector Involvement in Data Collection
Published: 2017-06-15T00:00:00

Fast Facts:
NOAA collects hydrographic data on the depth and bottom configuration of water bodies to create nautical charts. The agency prepares an annual report comparing the cost of collecting data using its own fleet to the cost of procuring it from the private sector.
However, we found that NOAA didn't report complete cost data from fiscal years 2006 through 2016 in these reports. It also hasn't developed a strategy to expand its use of the private sector in its hydrographic survey program, as required by law.
We recommended that the agency fully track and report its cost data and develop a strategy for increasing its use of the private sector.

Highlights:
section_title: Why GAO Did This Study
paragraphs: NOAA is responsible for collecting hydrographic data—that is, data on the depth and bottom configuration of water bodies—to help create nautical charts. NOAA collects data using its fleet and also procures data from the private sector. The Hydrographic Services Improvement Act of 1998 requires NOAA to acquire such data from the private sector “to the greatest extent practicable and cost-effective.”
GAO was asked to review NOAA efforts to collect hydrographic data. This report examines (1) how NOAA determines its hydrographic survey priorities, (2) NOAA's efforts to compare the costs of collecting its own survey data to the costs of procuring such data from the private sector, and (3) the extent to which NOAA has developed a strategy for private sector involvement in hydrographic data collection.
GAO analyzed relevant laws and agency procedures, NOAA cost comparison reports from fiscal years 2006 through 2016, and other NOAA information, such as hydrographic survey program priorities. GAO also interviewed NOAA officials and the eight survey companies that currently have contracts with NOAA.
section_title: What GAO Found
paragraphs: The Department of Commerce's National Oceanic and Atmospheric Administration (NOAA) uses a three-step process to determine its hydrographic survey priorities, according to agency documents and officials. NOAA first identifies areas in greatest need of surveying by analyzing data such as seafloor depth, shipping tonnage, and the time elapsed since the most recent survey. Second, the agency evaluates the availability of funding resources as well as the availability and capability of NOAA and private sector hydrographic survey vessels. Third, NOAA develops an annual hydrographic surveying plan that identifies survey priorities. To help inform the first step in this process, NOAA is developing a model to take advantage of new mapping technologies.
NOAA prepares an annual report comparing the cost of collecting its own hydrographic survey data to the cost of procuring data from the private sector but does not include all costs in its cost comparisons. Under its standard operating procedure, NOAA is to report the full cost of the hydrographic survey program, including equipment, maintenance, and administrative costs. GAO's review of NOAA's cost comparison reports from fiscal years 2006 through 2016, however, found that NOAA did not in all instances report complete or accurate cost data. For example, NOAA did not include the acquisition of a $24 million vessel in 2012, and in some cases it did not report certain costs in the year to which those costs should be assigned. NOAA officials said they recognized the need to improve the agency's tracking of costs, and they identified actions they intend to take but did not always provide information about specific steps to carry out these actions or associated time frames. For example, NOAA officials said they planned to implement an improved process in fiscal year 2019 for tracking the costs of capital assets such as vessels but did not identify specific steps to do so. They also said they plan to develop a system to better track maintenance costs but did not provide specific details or a time frame to do this. Without ensuring that its efforts to improve its cost comparison reports include actions to fully track asset and maintenance costs, NOAA may be unable to prepare cost comparison reports that reflect the full cost of its survey program, as specified in the agency's standard operating procedure.
NOAA has taken steps to increase private sector involvement in its hydrographic data collection program but has not developed a strategy for expanding such involvement as required by law. For example, NOAA moved to a centralized process for competing and awarding contracts, which NOAA officials said reduced administrative costs and contract award time and allowed NOAA to increase the number of private sector firms under contract from five to eight. However, NOAA did not develop a strategy for expanding its use of the private sector to minimize duplication and take maximum advantage of private sector capabilities, as required by law. NOAA officials said the agency intends to develop such a strategy but must first make improvements in its approach to comparing its own hydrographic survey costs to those of the private sector. However, NOAA officials did not provide specific information about how they intend to develop the strategy, what elements it will contain, or when it will be completed. Without developing such a strategy, NOAA may have difficulty minimizing duplication and taking advantage of private sector capabilities.
section_title: What GAO Recommends
paragraphs: GAO recommends that NOAA (1) ensure that its efforts to improve its cost comparison reports include actions to fully track asset and maintenance costs and (2) develop a strategy for expanding private sector involvement in the hydrographic survey program. NOAA agreed with GAO's recommendations.

section_title: Letter
paragraphs: Each year, the United States’ maritime transportation system moves  2 billion tons of freight in and out of our nation’s ports. The National  Oceanic and Atmospheric Administration (NOAA) within the Department  of Commerce is responsible for collecting hydrographic data—that is,  data on the depth and bottom configuration of water bodies. Such data  support the creation of nautical charts, which, according to NOAA  documents, are the foundation of safe ocean transportation of people and  goods for commercial and recreational purposes. Within NOAA, the Office  of Coast Survey collects hydrographic survey data using NOAA’s  hydrographic survey fleet and also procures and oversees hydrographic  surveying and related services from the private sector. NOAA conducts  hydrographic surveys in U.S. territorial waters and the U.S. Exclusive  Economic Zone, which generally extends 3 to 200 nautical miles  offshore—an area of about 3.4 million square nautical miles.
The Hydrographic Services Improvement Act of 1998, which was  amended in 2002 and 2008, was intended to divide responsibility for  hydrographic services between NOAA and the private sector, according  to a House committee report. The act as amended requires NOAA to,  among other things, acquire hydrographic survey data through contracts  with private entities “to the greatest extent practicable and cost-effective”  and to issue standards for hydrographic data used by NOAA. In addition,  the Ocean and Coastal Mapping Integration Act, enacted in 2009,  required the NOAA Administrator to transmit a report to relevant  congressional committees by July 28, 2009, that described the agency’s  strategy for expanding contracting with the private sector to minimize  duplication and take maximum advantage of private sector capabilities in  fulfilling the agency’s mapping and charting responsibilities. According to  NOAA officials, the congressional committee reports accompanying  NOAA’s appropriations acts for fiscal years 2007 through 2016 provided  about $342 million of the agency’s appropriation for the Hydrographic  Survey Priorities/Contracts budget line item. According to NOAA officials,  the most recent contracts were awarded in June 2014 to eight private  sector hydrographic survey companies for a 5-year contract period.
You asked us to review NOAA’s efforts to collect hydrographic data,  including its use of the private sector in doing so. This report examines  (1) how NOAA determines its hydrographic survey priorities, (2) NOAA’s  efforts to compare the costs of collecting its own hydrographic survey  data to the costs of procuring such data from the private sector, and  (3) the extent to which NOAA has developed a strategy for private sector  involvement in hydrographic data collection.
To conduct our work, we reviewed relevant laws and agency procedures  and interviewed NOAA officials as well as stakeholders selected because  of their involvement in NOAA’s hydrographic survey program. The  stakeholders we interviewed were the eight hydrographic survey  companies that have contracts with NOAA as of the time of this report  and the chairman of the Hydrographic Services Review Panel, a federal  advisory committee that advises NOAA on matters related to  hydrographic surveying. For context, in April 2016, we also observed a  demonstration of the equipment used by one of the eight hydrographic  survey contractors.
To determine how NOAA sets its hydrographic survey priorities, we  reviewed and analyzed NOAA documents, including its most recent  management and strategic plan, prepared in 2015; standard operating  procedures for developing priorities; and NOAA reports that describe  previous and emerging survey priorities. We also interviewed officials  from NOAA’s Office of Coast Survey about the agency’s priority-setting  process.
To examine NOAA’s efforts to compare the costs of collecting its own  hydrographic survey data to the costs of procuring such data from the  private sector, we reviewed NOAA’s procedures for collecting and  reporting cost information, including NOAA’s standard operating  procedure for this activity. We also reviewed Office of Management and  Budget Circular A-76, which provides guidance on comparing public and  private sector costs, and reviewed reports prepared by the Department of  Commerce Inspector General and the Hydrographic Services Review  Panel on NOAA’s cost comparison methodologies. In addition, we  obtained and analyzed cost comparison reports prepared by NOAA for  fiscal years 2006 through 2016, which detail NOAA’s costs for  hydrographic surveys conducted by the agency and the private sector, to  determine the extent to which the reports complied with the agency’s  standard operating procedure. We also compared the information in the  reports to other NOAA information, including budget data from NOAA’s  Management Analysis and Reporting System and data on ship usage and  miles surveyed from NOAA’s Office of Marine and Aviation Operations, to  identify any discrepancies. In cases in which we identified possible errors  or discrepancies in the cost comparison reports, we interviewed officials  from NOAA’s Office of Coast Survey and Office of Marine and Aviation  Operations to obtain additional information. We determined that the  information contained in the cost comparison reports was not in all cases  complete or accurate, as described later in this report. We also  interviewed officials from NOAA’s Office of Coast Survey and Office of  Marine and Aviation Operations to obtain information on any agency  initiatives to improve cost data. We did not conduct a cost comparison  study to independently determine whether it is more cost-effective for  NOAA or the private sector to conduct hydrographic surveys because  such a study was not within the scope of our review.
To determine the extent to which NOAA has developed a strategy for  private sector involvement in hydrographic data collection, we reviewed  and analyzed requirements for such a strategy in the Ocean and Coastal  Mapping Integration Act. We also examined agency contracting policies  and strategic planning documents as well as agency documents  describing NOAA’s use of contractors in hydrographic surveying,  including the number of contractors and the amount of surveying  conducted. In addition, we interviewed officials from NOAA’s Office of  Coast Survey to obtain information on actions the agency has taken in  response to the Ocean and Coastal Mapping Integration Act’s  requirement to develop a strategy to expand contracting with the private  sector for NOAA’s mapping and charting responsibilities. We then  compared information contained in NOAA’s policies and strategic  planning documents, as well as actions taken by NOAA, to this  requirement.
We conducted this performance audit from January 2016 to June 2017 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: NOAA’s Office of Coast Survey provides navigational services intended to  ensure the safe and efficient passage of maritime commerce through  oceans and coastal waters within U.S. jurisdiction, and in the Great  Lakes. In this capacity, the Office of Coast Survey develops, updates, and  maintains more than 1,000 nautical charts—maps used for navigating  waterways—containing information about water depth, the shape of the  water body floor and coastline, the location of possible obstructions, and  other physical features within these water bodies. According to NOAA  documentation, nautical charts provide information critical to safe  navigation, such as symbols that inform ship captains or recreational  boaters if an area is shallow or has dangerous conditions that could  imperil navigation. Hydrography is the science that informs the surveying  methods for collecting the data used to create and update nautical charts.  In addition, information collected through hydrographic surveying  supports a variety of maritime functions such as port and harbor  maintenance, beach erosion and replenishment studies, management of  coastal areas, and offshore resource development.
NOAA operates four ships that predominantly support hydrographic  surveys: the Fairweather, Ferdinand R. Hassler, Rainier, and Thomas  Jefferson (see fig.1). The Hassler, commissioned in 2012, is the newest  of the four vessels.
NOAA also procures and oversees hydrographic surveying and related  services from the private sector. NOAA officials said the congressional  committee reports accompanying NOAA’s appropriations acts for fiscal  years 2007 through 2016 provided about $342 million of the agency’s  appropriation for the Hydrographic Survey Priorities/Contracts budget line  item. The most recent contracts were awarded in June 2014 to eight  hydrographic survey companies for a 5-year period and are valued at up  to $250 million over this contract period based on NOAA documents. In  addition, according to NOAA officials, NOAA works with other federal  agencies to collect hydrographic survey data. For example, the U.S. Army  Corps of Engineers provides such data for the federal harbor waterways  that support the U.S. port system.
NOAA primarily uses two kinds of sonar for hydrographic surveying— multibeam and side scan. Multibeam sonar measures the depth of the  water by analyzing the time it takes sound waves to travel from a vessel  to the bottom of the water body and back and provides detailed  information about the water body floor. Multibeam sonar is generally used  in areas such as the northeast United States and Alaska, where the water  body floor is complex and often strewn with rocks. See figure 2 for an  illustration of a NOAA ship using multibeam sonar.
In contrast, in relatively shallow flat areas like those along the mid-Atlantic  coast, NOAA uses side scan sonar. Side scan sonar creates an image of  the water body floor but does not determine depths. If NOAA finds a  shipwreck or obstruction using side scan sonar, it will determine its depth  using multibeam sonar. See figure 3 for an illustration of a NOAA ship  using side scan sonar.
NOAA’s National Ocean Service is responsible for providing data, tools,  and services that support mapping, charting, and maritime transportation  activities, among other things. Within the National Ocean Service, the  Office of Coast Survey directs the agency’s hydrographic surveying  operations. In particular, it develops survey specifications, evaluates new  technologies, and implements procedures for acquiring hydrographic  survey data, processing the data, and producing nautical charts. Within  the Office of Coast Survey, the Hydrographic Surveys Division is  responsible for planning, managing, and supporting hydrographic  surveying operations. This includes compiling, verifying, and certifying  hydrographic data, as well as determining hydrographic survey priorities  and issuing an annual hydrographic survey prioritization report. The  Hydrographic Surveys Division coordinates with NOAA’s Office of Marine  and Aviation Operations to plan and schedule NOAA vessels for  hydrographic surveying. The Office of Marine and Aviation Operations  manages, operates, and maintains NOAA’s fleet of 16 ships, including the  4 ships that predominantly support hydrographic surveying. According to  NOAA officials, during fiscal years 2007 through 2016, NOAA expended  about $303 million for its in-house hydrographic survey program.
The Hydrographic Surveys Division also works with the Hydrographic  Services Review Panel, an external committee that advises NOAA on  matters related to hydrographic services, including surveying. The review  panel, which was required by the Hydrographic Services Improvement  Act Amendments of 2002, is composed of 15 voting members appointed  by the NOAA Administrator as well as several NOAA employees who are  nonvoting members. Voting members must be especially qualified in one  or more disciplines relating to hydrographic data and services, vessel  pilotage, port administration, coastal management, fisheries  management, marine transportation, and other disciplines as determined  appropriate by the NOAA Administrator. The NOAA Administrator is  required to solicit nominations for panel membership at least once a year;  voting members serve a 4-year term, and may be appointed to one  additional term. The Director of the Office of Coast Survey serves as the  designated federal officer.
NOAA’s standards for hydrographic surveying are contained in a  technical specifications document known as the Hydrographic Surveys  Specifications and Deliverables. The document is updated annually by  NOAA hydrographers and, according to NOAA officials, is also the  standard on which many other hydrographic survey entities base their  hydrographic surveying requirements. In addition, NOAA maintains a  quality assurance program for all hydrographic survey data submitted by  the private sector and NOAA hydrographers. The quality assurance  program includes three main review procedures intended to ensure that  hydrographic data submitted to NOAA meet quality standards: the Rapid  Survey Assessment, Survey Acceptance Review, and Final Survey  Review. See appendix I for additional information about NOAA’s data  quality standards and review process.
section_title: NOAA Uses a Three- Step Process to Determine Its Hydrographic Survey Priorities and Is Developing a Model Aimed at Better Assessing Hydrographic Risks
paragraphs: NOAA uses a three-step process to determine its hydrographic survey  priorities. In addition, in an effort to improve its priority setting, NOAA is  developing a model to better assess hydrographic risks to ships.
subsections: section_title: NOAA Uses a Three-Step Process that Considers Survey Needs and Resource Availability to Determine Hydrographic Survey Priorities
paragraphs: According to NOAA’s standard operating procedure and NOAA officials,  NOAA uses a three-step process to determine its hydrographic survey  priorities. Under this process, NOAA (1) identifies the areas in greatest  need of surveying, (2) evaluates resources, including funding and vessel  availability, and (3) develops an annual hydrographic surveying plan,  which identifies the resulting hydrographic survey priorities. The plan  specifies the locations, vessels, and schedules for NOAA hydrographic  survey projects and the locations and time frames for private sector  hydrographic survey projects. (See fig. 4.)
NOAA first identifies the areas the agency considers to be in the greatest  need of a hydrographic survey, using an approach it developed in 1994  called NOAA Hydrographic Survey Priorities, according to NOAA’s  standard operating procedure and NOAA officials. NOAA identifies areas  of “navigational significance” based on depth, draft of ships, and  potential for dangers to marine navigation. NOAA then determines which  of these navigationally significant areas are in greatest need of surveying  by considering (1) shipping tonnage and trends, (2) age and quality of  surveys in the area, (3) seafloor depth, (4) potential for unknown dangers  to navigation due to environmental or human influences, and (5) requests  for surveys from stakeholders such as pilot associations and the U.S.  Coast Guard, and requests received through NOAA’s regional navigation  managers. Through this process, NOAA designates high-priority areas  in any of four categories:
Critical areas. Areas that NOAA identified in 1994 as experiencing  such circumstances as high shipping traffic or hazardous material  transport or having a significant number of survey requests from  users.
Emerging critical areas. Areas in the Gulf of Mexico and Alaska that  NOAA identified after 1994 that met the critical area definition but that  NOAA chose to designate in a separate category from the 1994  critical areas for tracking purposes.
Resurvey areas. Areas that NOAA identified as requiring recurring  surveys because of changes to seafloors, use by vessel traffic, or  other reasons.
Priority 1-5 areas. Areas that do not fall into any of the three  categories above are subdivided into five priority areas based on the  date of the most recent survey and the level of usage by vessels.
Until 2012, according to NOAA’s standard operating procedure, NOAA  used the results of its approach for identifying areas most in need of  surveying to publish annual hydrographic survey prioritization reports—a  component of the overall hydrographic surveying plan. However, NOAA  officials said they found this approach increasingly outdated because it  did not reflect changing ocean and shipping conditions or take advantage  of available technology. These officials said they are in the process of  developing a new methodology (described later in this report) to help  identify areas that need surveys. According to NOAA officials, they have  continued to update computerized mapping files and reports related to  hydrographic survey priorities since 2012 but have not published new  hydrographic survey prioritization reports. However, these officials said  they will provide information to the public upon request.
According to NOAA’s standard operating procedure and NOAA officials,  once NOAA identifies its highest priority areas, the agency compares its  priorities to those identified by external stakeholders through NOAA’s  navigation managers and its Integrated Ocean and Coastal Mapping  program. NOAA officials said this input helps them understand potential  economic and safety issues, among other things, that may affect  hydrographic survey priorities. NOAA officials said they look to find areas  of intersection between areas identified through the NOAA Hydrographic  Survey Priorities process and those compiled by NOAA’s navigation  managers and external stakeholders. NOAA’s standard operating  procedure states that when determining which areas to survey, NOAA  generally gives precedence to survey areas identified through the NOAA  Hydrographic Survey Priorities process, but stakeholder input may shape  survey priorities in unusual cases, such as when hurricane-related  requests indicate the need for an immediate resurvey.
subsections: section_title: Evaluating Resource Availability
paragraphs: According to NOAA’s standard operating procedure and NOAA officials,  NOAA estimates the amount of funds it expects to be available to conduct  surveys and develops a preliminary survey plan that seeks to maximize  in-house and contractor resources. Once funds are appropriated, NOAA  modifies its preliminary plan to reflect the amounts available for NOAA  fleet operations and survey contracting. NOAA also evaluates survey  requirements and in-house and contractor ship availability and capability.  As NOAA obligates funds for in-house surveys and for contracts, it refines  and finalizes the actual amount of surveying to be conducted by both in- house and contractor hydrographers.
section_title: Developing and Approving Plan
paragraphs: According to NOAA’s standard operating procedure and NOAA officials,  based on an evaluation of the identified hydrographic survey needs,  available funding, and vessel availability and capability, NOAA develops a  hydrographic surveying plan for the coming year. NOAA evaluates the  mix of available NOAA and private sector vessels to meet the highest- ranked survey needs with available funding. NOAA also engages offices  within NOAA to coordinate hydrographic survey ship schedules to  accommodate other agency projects and plans. For example, NOAA  officials said they may use hydrographic survey ships to accommodate  the testing of new types of equipment, such as unmanned surface  vehicles. Once the surveying plan is developed, it is submitted to the  Chief of the Hydrographic Surveys Division for approval, according to  NOAA’s standard operating procedure.
When we began our review, NOAA officials told us they did not have  written procedures documenting how the Hydrographic Surveys Division  is to develop its annual hydrographic surveying plan. In response to our  review, NOAA issued a standard operating procedure in September 2016  documenting how the division is to develop the plan.
section_title: NOAA is Developing a Model to Better Assess Hydrographic Risks to Help Inform Prioritization Decisions
paragraphs: NOAA is developing a model intended to better assess hydrographic risks  as part of its effort to identify areas most in need of hydrographic  surveys—the first step in NOAA’s process for creating the hydrographic  surveying plan. According to NOAA officials, the model is aimed at  addressing several limitations they found with the agency’s existing  approach for identifying areas most in need of surveys. For example, they  said the existing approach does not account for such changes as:  the emergence of new ports and subsequent changes in waterway  traffic patterns;  seafloor changes from weather and oceanic processes, and the  resulting need for some areas to be surveyed more often than others;  and  sizes and capabilities of ships, with many of them having deeper  drafts since NOAA developed its plan in 1994.
In addition, NOAA officials noted that the existing approach has focused  on large container ships and oil tankers and not the many smaller vessels  (e.g., fishing vessels and recreational boats) that also rely on NOAA  hydrographic survey data to navigate safely.
According to NOAA documents, the new model—which NOAA refers to  as a “hydrographic health” model—will help NOAA identify survey needs  by taking advantage of new technologies and more precise information  about weather and oceanic processes. For example, agency officials said  that with the advent of a Global Positioning System-based technology  known as the Automatic Identification System, NOAA has data on the  actual paths of vessels equipped with this technology, including when and  where vessels have travelled as well as their length, width, and draft.  The new model also analyzes information that is similar to what NOAA  currently uses, such as (1) areas of shallow seafloor depth,  (2) unsurveyed areas, (3) known or reported discrepancies on the  nautical chart for an area, (4) reported accidents, (5) stakeholder  requests, and (6) established national priorities.
NOAA officials said they completed a test of the new hydrographic health  model in 2016 for coastal waters in the southeastern United States— including coastal Alabama, Florida, and Georgia—and solicited feedback  on the model from internal stakeholders. NOAA also presented the model  at an international hydrographic conference in May 2016 and began using  the model in the second quarter of fiscal year 2017. NOAA officials said  the agency is preparing to submit a paper describing this model to an  international hydrographic journal for peer review in the second quarter of  fiscal year 2018. NOAA officials said they will incorporate the peer review  feedback into the model in the third quarter of fiscal year 2018. NOAA  also plans to release periodic reports describing the state of the  hydrographic health of the nation’s waters after the model is fully  implemented, according to the standard operating procedure.
section_title: NOAA’s Annual Report Compares the Cost of Collecting Its Own Survey Data to the Cost of Procuring Data from the Private Sector but Does Not Include All Costs
paragraphs: NOAA prepares an annual report that compares the cost of collecting its  own hydrographic survey data to the cost of procuring such data from the  private sector. According to NOAA’s standard operating procedure for  conducting this cost analysis, the purpose of the analysis is to track and  report the full cost of the hydrographic survey program, detailing costs for  all activities that directly or indirectly contribute to the program.  Specifically, NOAA’s standard operating procedure for preparing the  annual cost comparison report states that the report should include, by  fiscal year, all costs that directly or indirectly contribute to conducting  hydrographic surveys, regardless of funding sources.
According to NOAA’s standard operating procedure, to create the report,  NOAA annually obtains data on survey costs for the previous fiscal year  from the various NOAA offices involved in collecting hydrographic survey  data. These offices collect cost data from staffing and financial data  systems and enter the information into a spreadsheet, according to NOAA  officials and NOAA’s standard operating procedure. NOAA  documentation indicates these data include direct costs NOAA incurs to  collect hydrographic data using its own ships; these direct costs include  equipment and maintenance, labor, and fuel. In addition, according to  NOAA officials and NOAA’s standard operating procedure, NOAA obtains  data on indirect costs, such as administrative costs apportioned to the  hydrographic survey program and amounts paid to the private sector for  conducting surveys.
In 2005, NOAA began reporting hydrographic survey costs in an annual  cost comparison report in response to a 2003 recommendation from the  Department of Commerce Office of Inspector General that NOAA track  and report the full costs of its survey program. In addition, in 2005, the  Hydrographic Services Review Panel recommended that NOAA use  actual costs rather than estimates and “reasonably follow” Office of  Management and Budget Circular A-76 guidelines to calculate the cost  comparison; these guidelines state, among other things, that capital  assets should be depreciated in cost estimates.
Based on our review of NOAA’s cost comparison reports for fiscal years  2006 through 2016, NOAA did not in all instances report complete or  accurate cost data for its hydrographic survey program. Specifically,  NOAA did not include the complete cost of the hydrographic survey  program for the following activities:
Vessel acquisition. NOAA did not include the 2012 acquisition cost  of a NOAA survey vessel (the Hassler) in its cost comparison reports  from fiscal years 2012 through 2016. According to NOAA  documentation, this vessel cost $24.3 million, and NOAA officials  agreed that they should include the acquisition cost of NOAA vessels  in cost comparison reports and that such costs should be  depreciated. NOAA officials said they have not included such costs  in annual cost comparison reports because depreciation costs are  tracked in NOAA’s property management system but not in NOAA’s  budget tracking system. These officials said they are uncertain  whether these two systems can be linked because they are separate  databases managed by different NOAA offices.
Major vessel maintenance. NOAA did not include the cost of major  maintenance performed in 2010 on the hydrographic survey vessel  Rainier in its cost comparison reports from fiscal years 2010 through  2016. According to NOAA officials, the agency spent $13.7 million in  support of maintenance for the Rainier. NOAA officials acknowledged  that such costs should be reflected in NOAA’s cost comparison  reports and that such costs should be depreciated. NOAA officials  explained that they allocate annual maintenance and repair costs  associated with the hydrographic survey program according to the  number of days a ship is at sea conducting surveys. In this case, they  said because the Rainier was in port the entire year undergoing  repairs, they did not include these capital improvement costs in the  cost comparison report.
Contract administration for private sector hydrographers. NOAA  did not include in its cost comparison reports for fiscal years 2006  through 2016 contract administration costs for managing private  sector hydrographers working under contract to the agency. NOAA’s  standard operating procedure for conducting the annual cost analysis  specifies that the agency should include the costs associated with  contract management and monitoring. NOAA officials said these costs  were not included in the reports in part because they did not have the  software to track contract administration costs. NOAA officials  acknowledged that they should include such costs in the cost  comparison report.
In addition to incomplete costs for some activities, we also noted that  NOAA did not accurately report certain costs of the hydrographic survey  program in the year to which those costs should be assigned.
Equipment, repair, and maintenance costs. NOAA includes  equipment, repair, and maintenance costs in the hydrographic survey  cost comparison report for the year in which such costs are reported  in NOAA’s financial system. However, as with major vessel  maintenance costs previously discussed, NOAA officials  acknowledged that these costs should be depreciated. As a result of  this practice, NOAA’s hydrographic survey costs may appear  artificially high during years in which NOAA incurs large equipment,  repair, and maintenance costs. NOAA officials said they recognize  that reporting equipment, repair, and maintenance costs in the year  they are incurred does not accurately represent agency costs.
Cost and performance data for survey work conducted by the  private sector. NOAA does not track cost data in a way that allows  the agency to link the cost for private sector surveys to the amount of  survey work conducted. For example, in the cost comparison report  for fiscal year 2014, NOAA included funds that were obligated for two  contractors to conduct survey work, but the report showed that these  contractors did not survey any nautical miles during that year. NOAA  officials explained that they obligated funds in fiscal year 2014 to pay  for the contract survey work, but the contractors did not begin the  work until fiscal year 2015. These officials stated that they record  contractor costs in the year in which the obligation occurs, and they  record the miles surveyed in the year in which the surveying occurs.  However, the 2014 cost per square nautical mile may appear  artificially high because costs were recorded without including  corresponding mileage surveyed. In contrast, the 2015 cost per  square nautical mile may appear artificially low because survey miles  were recorded, but the costs for conducting those surveys were not  included in the 2015 report. NOAA officials acknowledged that their  current method for tracking contractor costs and work performed  needs improvement. They explained that the data inaccuracies arise  in part from NOAA’s current process for tracking contractor cost and  performance through manual entry of data into multiple spreadsheets.
Furthermore, we found that NOAA uses a single measure—cost per  square nautical mile surveyed—to compare its own survey costs to those  of its contractors. However, in 2005, the Hydrographic Services Review  Panel concluded that a single cost measure, such as the cost per square  nautical mile, should not be used as the primary factor to determine the  relative cost-effectiveness of NOAA and private sector efforts to collect  hydrographic data. The panel recommended that NOAA consider a wider  variety of measures to help provide additional insight. NOAA officials  acknowledged that the cost per square nautical mile was not a  comprehensive measure of cost-effectiveness and that having additional  measures would improve the accuracy of cost comparisons to account for  factors such as region and water depth.
As a result of the concerns we identified, during our review, NOAA  officials began identifying actions they would take to improve NOAA’s  cost data. In some instances, officials identified specific steps and  associated time frames to carry out these actions. For example, NOAA  officials said they started using new project management software in  fiscal year 2017 to help track contract administration costs for inclusion in  future cost comparison reports. In addition, to allow NOAA to better link  the costs for private sector surveys to the amount of survey work  conducted, NOAA officials said they plan to develop a new database by  March 2018; this database would help eliminate the need for manual data  entry and allow NOAA to track survey cost and performance data for  various time frames and regions. To improve NOAA’s ability to compare  its own survey costs to those of contractors, NOAA officials said they  were in the process of developing additional survey measures beyond  cost per square nautical mile that could include a new “survey complexity  rating” designed to account for factors such as region and water depth.
Officials said they expect to have these additional measures in place by  October 2018.
However, NOAA officials could not yet identify the steps or associated  time frames for carrying out other actions to improve the completeness  and accuracy of cost data. For example, to help improve NOAA’s process  for tracking depreciation costs of capital assets—such as vessel  acquisition or equipment, repair, and maintenance—NOAA officials said  they planned to implement an improved process in fiscal year 2019 but  did not identify the specific steps to implement this process. In addition, to  account for ships that are in port undergoing major maintenance, NOAA  officials said they plan to develop a tracking system to help ensure such  maintenance costs are included in NOAA’s cost comparison reports, but  they did not provide additional specific details or identify when they intend  to implement such a system. For these recently identified actions, NOAA  officials explained that it was uncertain how NOAA would proceed  because identifying and implementing certain steps requires the  coordination of multiple offices within NOAA such as the Office of Coast  Survey, Office of Marine and Aviation Operations, and Office of the Chief  Administrative Officer. Without ensuring that its efforts to improve its cost  comparison reports include actions to fully track capital asset depreciation  costs and account for ships in port undergoing major maintenance, NOAA  may be unable to prepare cost comparison reports that reflect the full cost  of its hydrographic survey program, as called for in the agency’s standard  operating procedure.
section_title: NOAA Has Taken Steps to Increase Private Sector Involvement in Data Collection, but Has Not Developed a Strategy for Expanding Such Involvement as Required by Law
paragraphs: NOAA has taken steps aimed at increasing private sector involvement in  its hydrographic data collection program, such as streamlining its  contracting process and increasing communication with contractors.  However, NOAA has not developed a strategy for expanding its use of  the private sector as required by a 2009 law.
subsections: section_title: NOAA Has Taken Several Steps to Increase Private Sector Involvement in Data Collection
paragraphs: According to NOAA officials, NOAA has taken several steps to increase  private sector involvement in its hydrographic data collection program.  For example, NOAA developed a centralized process for competing and  awarding contracts in 2003, which NOAA officials said reduced  administrative costs and contract award time. Before this change, NOAA  awarded contracts to individual contractors at the regional level, which  required expending resources to process each individual contract. As a  result of implementing a centralized process for competing and awarding  contracts, NOAA officials said they increased the number of private sector  firms under contract, from five during the 2003-2008 contract period to  eight during the current 2014-2019 contract period. However, NOAA  officials said they have not awarded task orders for surveys to all eight  private sector firms in the same fiscal year because of NOAA’s  appropriation, which has remained mostly flat during the current contract  period.
NOAA also took steps to increase communication with contractors,  according to NOAA officials. For example, starting in 2005, NOAA has  invited hydrographic survey contractors to its annual field procedures  workshop, which brings together officials from NOAA’s headquarters, field  offices, and quality assurance processing branches, among others. The  purpose of the workshop is to discuss updates to hydrographic survey  requirements and new hydrographic survey technologies. Also, since  2005, according to NOAA officials, contracting officer representatives  have improved their communication with contractors through the various  stages of the contract and survey activities by answering contractors’  questions regarding project requirements, expected deliverables, data  processing, and unanticipated challenges that may occur when  conducting surveys.
In addition, NOAA officials said that in 2010, the agency implemented  procedures for obtaining contractor input on changes to its hydrographic  survey technical specifications document, the Hydrographic Surveys  Specifications and Deliverables. The document is updated annually, and  contractors are asked to provide input through their respective contracting  officer representatives. Staff review input to determine whether to include  the recommended action in the annual technical specifications update.  According to NOAA officials, participants discuss recommended changes  at meetings held during the annual field procedures workshop.
section_title: NOAA Has Not Developed a Strategy for Expanding Its Use of the Private Sector in Data Collection
paragraphs: NOAA has not developed a strategy for expanding its use of the private  sector in its hydrographic survey data collection program, as required by  law. Specifically, the Ocean and Coastal Mapping Integration Act required  the NOAA Administrator to transmit a report to relevant congressional  committees by July 28, 2009, that described the agency’s strategy for  expanding contracting with the private sector to minimize duplication and  take maximum advantage of private sector capabilities in fulfilling NOAA’s  mapping and charting responsibilities. NOAA officials could not provide us  any documentation indicating what information the agency provided to  Congress in response to this statutory requirement.
In 2010, NOAA issued its Ocean and Coastal Mapping and Contracting  Policy, which states that the policy was developed in response to the  act. However, rather than describing a strategy for expanding  contracting with the private sector, as required by the 2009 law, the policy  states that it is NOAA’s intent to contract with the private sector for ocean  and coastal mapping services when the agency determines it is cost- effective to do so and funds are available. NOAA officials acknowledged  that the contracting policy does not meet the statutory requirement that  the agency develop a strategy for expanding contracting with the private  sector.
NOAA officials said the agency is limited in its ability to expand private  sector contracting because of congressional direction on the use of the  agency’s appropriations. Specifically, NOAA’s hydrographic survey  program is supported by two separate funding elements, known as  “Programs, Projects, and Activities” (PPA), within NOAA’s Operations,  Research, and Facilities appropriation account. One PPA is for private  sector hydrographic data collection, and the other is for general  operations, maintenance, and repair of NOAA’s entire fleet of ships,  including the hydrographic survey vessels. According to NOAA officials,  the agency has limited authority to reprogram funds between these two  PPAs without congressional notification and agreement that such  reprogramming is warranted. To propose a reprogramming of funds,  NOAA officials said they would need to evaluate the prioritization of all  fleet missions. In addition, NOAA officials said they would have to  continue to fund fixed operational costs and agency expenses for NOAA’s  entire fleet even if operations funds were reprogrammed to hydrographic  data acquisition contracts.
NOAA officials said the agency intends to develop a strategy describing  how it plans to expand private sector involvement in the hydrographic  data collection program—which the Ocean and Coastal Mapping  Integration Act required the agency to submit in a report to relevant  congressional committees in 2009—and it will use the 2010 Ocean and  Coastal Mapping and Contracting Policy to guide this effort. These  officials said the agency must first implement its planned improvements in  collecting both NOAA and private sector hydrographic survey costs; once  NOAA has a more accurate basis on which to compare costs, the agency  will assess the extent to which it can expand its use of the private sector  and develop a strategy accordingly. These officials said that if their  analysis indicates the agency should expand its use of the private sector  beyond what is currently possible given agency appropriations, the  agency will request changes to its appropriations to allow it more flexibility  in expanding its use of the private sector. However, NOAA officials did not  provide specific information about how they intend to develop the  strategy, what elements it will contain, or when it will be completed.  Without developing such a strategy, NOAA may have difficulty minimizing  duplication and taking maximum advantage of private sector capabilities  in fulfilling NOAA’s mapping and charting responsibilities.
section_title: Conclusions
paragraphs: Recognizing the importance of nautical charts to help ensure safe  passage of people and goods through the nation’s waterways, NOAA has  taken steps to improve its ability to set priorities for collecting  hydrographic data. NOAA also prepares annual reports that compare the  costs of NOAA conducting its own hydrographic surveys to the costs of  contracting for such surveys. NOAA’s standard operating procedure  requires the agency to track and report all costs for the hydrographic  survey program. However, NOAA has not determined how it will track  depreciation costs of capital assets or established time frames to improve  its tracking of major maintenance costs for vessels. Without ensuring that  its efforts to improve its cost comparison reports include actions to fully  track capital asset depreciation costs and account for ships in port  undergoing major maintenance, NOAA may be unable to prepare cost  comparison reports that reflect the full cost of its hydrographic survey  program, as called for by the agency’s standard operating procedure. In  addition, NOAA was required by law to develop a strategy for expanding  its use of the private sector in its hydrographic survey program, but it has  not done so and has not provided specific information on how and when it  will. Without such a strategy, NOAA may have difficulty minimizing  duplication and taking maximum advantage of private sector capabilities  in fulfilling NOAA’s mapping and charting responsibilities.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Commerce direct the NOAA  Administrator to take the following two actions: ensure that NOAA’s efforts to improve its cost comparison reports  include actions to fully track capital asset depreciation costs and  account for ships in port undergoing major maintenance in  accordance with its standard operating procedure, and develop a strategy for expanding NOAA’s use of the private sector in  its hydrographic survey program, as required by law.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Department of Commerce for  review and comment. NOAA, responding on behalf of Commerce, stated  in its written comments (reproduced in app. II) that it agreed with our two  recommendations. Regarding our recommendation related to improving  NOAA’s cost comparison reports, NOAA agreed that its cost estimates  should include the depreciation costs of new vessels once they are  operational and stated that it will work to obtain an accurate depreciation  schedule. NOAA also stated that it will take steps to improve its tracking  and reporting of depreciation costs for equipment and repair and  maintenance, including its accounting for ships in port undergoing major  maintenance. Regarding our recommendation that NOAA develop a  strategy for expanding its use of the private sector in hydrographic  surveying, NOAA stated that the agency will develop such a strategy  once it improves its approach for comparing its hydrographic survey costs  to those of the private sector. NOAA also provided one technical  comment, which we incorporated.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Commerce, and other interested parties. In  addition, the report is available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff members have any questions regarding this report,  please contact me at (202) 512-3841 or fennella@gao.gov. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this report. GAO staff who made key  contributions to the report are listed in appendix III.
section_title: Appendix I: National Oceanic and Atmospheric Administration Hydrographic Data Quality Standards and Review Process
paragraphs: The National Oceanic and Atmospheric Administration (NOAA) has  issued standards—known as the Hydrographic Surveys Specifications  and Deliverables (HSSD)—for all hydrographic survey data collected by  both private sector contractors and NOAA staff. NOAA maintains a quality  assurance program for these data that includes three main review  procedures (described below). The HSSD standards for conducting  hydrographic surveys are based in part on the International Hydrographic  Organization’s Standards for Hydrographic Surveys. These standards  pertain to hydrographic surveys that are intended for harbors, harbor  approach channels, inland navigation channels, and coastal areas of high  commercial traffic density, and they generally pertain to shallower areas  less than 100 meters in depth.
According to NOAA officials, the HSSD has been reviewed annually since  its initial publication in 2000, and NOAA has procedures in place to obtain  suggestions from private sector contractors regarding changes to the  HSSD. For example, at its annual field procedures workshop, NOAA  conducts a session on data quality review standards and practices, and it  solicits recommendations for changes to the HSSD from both NOAA staff  and private sector hydrographers. According to NOAA officials,  contractors submitted fewer than 10 recommendations in 2016 but  submitted more than 30 recommendations in 2017. All recommended  changes to the HSSD are reviewed by the Office of Coast Survey’s  Hydrographic Surveys Division, Operations Branch. Recommendations  are then forwarded to the Office of Coast Survey Board of Hydrographers  for review, and the survey board submits its recommendations to the  Chief of the Hydrographic Surveys Division for final approval. NOAA’s  hydrographers test the feasibility of many significant changes to the  HSSD before they are put into practice by private sector hydrographers.  In June 2016, NOAA approved a new position specifically to oversee and  coordinate efforts related to hydrographic specifications, recommended  procedures, and training. According to NOAA officials, they intend to fill  the position in August 2017.
NOAA officials said the HSSD is also the standard on which many other  international hydrographic entities base their hydrographic surveying requirements and is widely utilized by the hydrographic mapping  community. According to NOAA officials, examples of uses of HSSD are:
The hydrographic specifications section of the National Society of  Professional Surveyors/Hydrographic Society of America certified  hydrographer exam is based in part on the HSSD.
The University Oceanographic Laboratory System Multibeam  Advisory Committee references the HSSD in its specifications for  multibeam sonar calibrations.
The only two U.S. universities with graduate programs in  hydrography—the University of New Hampshire and the University of  Southern Mississippi—rely on the HSSD as part of their programs.
In addition, NOAA officials said the Office of Coast Survey has worked  with different entities to help ensure that data collected by these entities  meet HSSD specifications so that the data can be used on NOAA’s  nautical charts. For example, officials said the office has worked with:  the New Jersey Department of Transportation since 2014 on survey  data the department is collecting for all New Jersey coastal waters;
Coastal Carolina University since 2015 on survey data the university  is collecting for the Bureau of Ocean Energy Management, an agency  within the Department of the Interior; and  the University of South Florida since 2016 on survey data the  university is collecting for a significant portion of western Florida’s  coastal waters.
NOAA’s quality assurance program includes three main review  procedures intended to ensure that hydrographic data submitted to NOAA  meet quality standards: the Rapid Survey Assessment, Survey  Acceptance Review, and Final Survey Review.
Rapid Survey Assessment. NOAA’s hydrographic survey data  processing branches located in Seattle, Washington, and Norfolk,  Virginia, are responsible for initiating a hydrographic survey data “rapid  survey assessment” within 5 working days of survey data being delivered  to NOAA by private sector contractors and NOAA staff. According to  NOAA documentation, the assessment, which should be completed within  2 working days, is intended to improve data quality by quickly identifying  significant deficiencies in hydrographic survey data products. The  assessment helps ensure the survey data meet HSSD technical  requirements and project-specific instructions that are issued at the start  of each survey project. If the assessment finds significant deficiencies,  NOAA’s assessment team may make corrections itself or may return the  survey to the hydrographer for rework and resubmission. The  hydrographic data processing branches take several factors into  consideration when deciding whether to return a survey for rework, such  as whether the hydrographers are capable of fixing the error, whether  there is value in returning a survey for the purpose of educating the  hydrographers to prevent future similar errors, and whether it is faster and  more efficient for the processing branch to make corrections. According to  NOAA documentation, even if no deficiencies are found, passing the data  through this initial assessment does not preclude the processing branch  from returning the survey to the field hydrographers for rework and  resubmission later in the quality assurance process if significant  deficiencies are subsequently found.
Survey Acceptance Review. The survey acceptance review is a detailed  evaluation and acceptance of hydrographic survey data conducted by the  data processing branches in Seattle, Washington, and Norfolk, Virginia.  According to NOAA documentation, the survey acceptance review  process includes: (1) accepting the survey data from the field  hydrographers, (2) evaluating the data and products delivered by  hydrographers for deficiencies and deviations from the guidance  documents, (3) conducting an internal review of the survey acceptance  review process to validate that process, and (4) outlining the findings from  the survey acceptance review process and transferring responsibility for  the integrity and maintenance of the survey data from the field  hydrographer to the processing branch.
The survey acceptance review involves several compliance checks and is  intended to confirm that the survey data are accurate and to highlight the  strengths and weaknesses of the data. A key element of the survey  acceptance review is performing quality assurance checks on the survey  data to ensure the survey was performed to the standards required in  guidance documents, including the HSSD, NOAA’s hydrographic field  procedures manual, and any hydrographic survey project-specific  instructions. Upon completion of the survey acceptance review, an  internal review is conducted to verify that the survey acceptance review  was completed in accordance with relevant standard operating  procedures, and that any issues outlined in the review documentation are  consistently delineated. After the internal review is completed and  approved, the completed documentation is forwarded to the Processing  Branch Chief for review. The final output of the review process includes  an acceptance letter to the Hydrographic Surveys Division Chief through  the Processing Branch Chief outlining any findings from the review and  releasing the field hydrographers from further responsibility for the data.  Figure 5 illustrates the survey acceptance review process.
Final Survey Review. The NOAA contracting officer’s representative is  responsible for the final quality assurance review for each hydrographic  survey project. According to NOAA officials, this is a critical stage, as the  contracting officer’s representative has been involved at every stage of  the survey, from planning and technical evaluation to survey monitoring,  including at least one inspection visit with the contractor during the survey  time frame. The contracting officer’s representative is the primary point of  contact when the contractor seeks guidance to resolve technical issues.  During the final review, the contracting officer’s representative reviews the  survey to ensure it is complete—this is the last stage of quality assurance  review before the data are archived and made available to the public.
section_title: Appendix II: Comments from the Department of Commerce
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Steve Gaty (Assistant  Director), Leo Acosta (Analyst-in-Charge), Martin (Greg) Campbell,  Patricia Farrell Donahue, Timothy Guinane, Benjamin Licht, J. Lawrence  Malenich, Ty Mitchell, Guisseli Reyes-Turnell, Danny Royer, Jeanette  Soares, and Arvin Wu made key contributions to this report.