Navy Force Structure: Actions Needed to Ensure Proper Size and Composition of Ship Crews
Released: 2017-05-18T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: In 2001, the Navy began reducing crew sizes on surface ships through an initiative called optimal manning, which was intended to achieve workload efficiencies and reduce personnel costs. In 2010, the Navy concluded that this initiative had adversely affected ship readiness and began restoring crew sizes on its ships.

The conference report accompanying the National Defense Authorization Act for Fiscal Year 2016 included a provision that GAO review the Navy's reduced manning initiatives in the surface fleet. This report examines (1) any trends in ship operating and support costs and maintenance backlogs, (2) the extent to which the Navy's manpower requirements process accounts for ship workload, and (3) any manning challenges and implications for the future.

GAO analyzed and reviewed data from fiscal years 2000 through 2015 (the most current available) on crew sizes, operating and support costs, material readiness, and the Navy's manpower requirements determination process. GAO also interviewed Department of Defense (DOD) officials and ship crews to discuss workload, manning levels, enablers of smaller crew size, and implications for the future.

section_title: What GAO Found
paragraphs: Total ship operating and support costs—which include personnel and maintenance costs—and maintenance backlogs increased during the optimal manning period (2003–2012) and have continued to increase for most ship classes since the initiative ended. Since the implementation of optimal manning, the Navy reduced crew sizes, which decreased the associated personnel costs for most ship classes, even as crews were partially restored. However, increased maintenance costs offset the reductions in personnel costs, as shown below. Navy officials attributed maintenance cost increases to reduced crews, longer deployments, and other factors. GAO's analysis did not isolate the relative effects of reduced crews from these other factors. Maintenance backlogs also increased during the optimal manning period and have continued to grow.

The Navy's process to determine manpower requirements—the number and skill mix of sailors needed for its ships—does not fully account for all ship workload. The Navy continues to use an outdated standard workweek that may overstate the amount of sailor time available for productive work. Although the Navy has updated some of its manpower factors, its instruction does not require reassessing factors to ensure they remain valid or require measuring workload while ships are in port. Current and analytically based manpower requirements are essential to ensuring that crews can maintain readiness and prevent overwork that can affect safety, morale, and retention. Until the Navy makes needed changes to its factors and instruction used in determining manpower requirements, its ships may not have the right number and skill mix of sailors to maintain readiness and prevent overworking its sailors.

Moving forward, the Navy will likely face manning challenges as it seeks to increase the size of its fleet. The fleet is projected to grow from its current 274 ships to as many as 355 ships, but the Navy has not determined how many personnel will need to be added to man those ships. In addition, as the Navy has gained experience operating its new ship classes, their crew sizes have grown and may continue to do so. Without updating its manpower factors and requirements and identifying the personnel cost implications of fleet size increases, the Navy cannot articulate its resource needs to decision makers.

section_title: What GAO Recommends
paragraphs: GAO is making four recommendations that the Navy (1) reassess the standard workweek, (2) require examination of in-port workload, (3) require reassessment of the factors used to develop manpower requirements, and (4) identify the personnel costs needed to man a larger fleet. DOD concurred with each recommendation.

section_title: Letter
paragraphs: The Navy began an initiative in 2001—referred to as optimal manning—to  reduce crew sizes aboard various legacy surface and amphibious ships  by gradually reducing the required number of crew members. In  implementing this initiative, which was intended to achieve workload  efficiencies and drive down costs, the Navy reduced the number of sailors  required to operate the ships. In 2002, the Navy also made changes to its  manpower factors and assumptions, which contributed to reductions in  crew sizes. However, we found in 2010 that the Navy had implemented  these manning reductions without sufficient analysis. We recommended  that the Navy validate the factors and assumptions it used to calculate  manpower requirements. The Navy agreed with our recommendation, but  as of May 2017, has not fully implemented it.

In a 2010 review of the surface fleet, the Navy found that it had reduced  shipboard and shore-based manning to a level that was insufficient to  allow the surface fleet to meet minimal standards of material readiness.  Between 2010 and 2014, the Navy ended the optimal manning initiative  and partially restored crew sizes on its legacy ships. Although the Navy  had found that the optimal manning initiative had a detrimental effect on  the readiness of legacy ships, it designed its newest surface ship classes  to have smaller crews than predecessor ships. The Navy established  lower crew size goals for these ships and attempted to reduce their crew  sizes by relying to varying degrees on new technologies, automation, and  shore support to execute workloads normally completed by larger crews.

Conference Report 114-270, accompanying a bill for the National  Defense Authorization Act for Fiscal Year 2016, included a provision for  us to review matters related to the Navy’s reduced manning initiatives.

This report discusses (1) any trends in legacy ship operating and support  costs, including personnel and maintenance costs, and maintenance  backlogs, since the implementation of reduced manning initiatives; (2) the  extent to which the Navy’s manpower requirements process fully  accounts for ship workload; and (3) the challenges, if any, for manning  the surface fleet and implications for the future.

To describe trends in operating and support costs for legacy surface and  amphibious ships, and maintenance backlogs, we analyzed annual data  from fiscal years 2000 (1 year before the Navy began optimal manning)  through 2015 (the latest full year for which data were available at the time  of our review) from the Navy’s cost-reporting system. To describe trends  in maintenance and ship material condition, we analyzed data and  reviewed documentation on maintenance backlogs, casualty reports, and  inspection results from 2000 through 2015. We assessed the reliability of  these data and found them to be reliable for the purposes of describing  trends and making comparisons for ship crew sizes, operating and  support costs, shore support personnel, and ship material condition.  Specifically, we reviewed our prior work making use of these data, and  interviewed Navy officials with knowledge of the data and reviewed  documentation on the data and related systems. Where possible, we  also corroborated the data with other data sources. To describe the  Navy’s process for determining manpower requirements (the size and  composition of ship crews and shore-based support units), we analyzed  Navy policies and procedures for determining crew sizes on surface and  amphibious ships as well as various studies and reports on the Navy’s  manpower requirements process, including on its factors and  assumptions. We also interviewed officials from multiple Navy offices  and met with officers and enlisted personnel from two destroyers and two  amphibious transport dock ships, and with crew members from both  variants of the littoral combat ship, to discuss crew workload, size, and  composition. To describe the Navy’s challenges for manning the surface  fleet and implications for the future, we analyzed Navy plans and reports  and interviewed program officials and ship crews. Our scope and  methodology is described in detail in appendix I.

We conducted this performance audit from March 2016 to May 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
subsections: section_title: Ship Manpower Requirements and Manning
paragraphs: The Navy determines the number of sailors and the skills needed to  operate its ships through a standardized manpower requirements  process. The Navy then mans the ships by filling the required positions— to the extent that the number and type of positions are funded and the  trained and qualified personnel are available to fill them—as summarized  in figure 1.

This manpower requirements process is based primarily on the  documents that lay out a ship class’s required operational capabilities and  projected operational environment (i.e., the missions the ship will fulfill  and how it will operate to carry them out). The Navy Manpower Analysis  Center is the chief agent in determining manpower requirements by  validating a ship’s primary workload; applying allowances to account for  working conditions, among other factors; and computing the manpower  requirements—the number and mix of positions needed to meet the  Navy’s operational expectations. The Navy Manpower Analysis Center  develops manpower requirements for new ship classes either after a  ship’s first deployment or about 1 year after the ship has become  operational, and publishes the validated requirements in Ship Manpower  Documents. Navy Manpower Analysis Center officials reassess a ship’s  manpower requirements to ensure that they are up to date every 5 years  or after major capability upgrades, changes to allowances, or other  changes. After the manpower requirements are determined for a ship, the  Navy mans the ship by filling the required positions to the extent that the  number and type of positions are funded, and the trained and qualified  personnel are available to fill them. After the budgeting and sailor  distribution process, a ship’s manning level may be lower than the  manpower level that the manpower requirements process has determined  was needed. The process by which manpower requirements are  determined for shore-based personnel is described in appendix II.

section_title: Reduced Manning Initiatives
paragraphs: The Navy has tried several ways to reduce the size of ship crews in order  to reduce costs. The optimal manning initiative, introduced as a pilot  program on a cruiser and destroyer in 2001 and implemented fleet-wide  on other surface and amphibious ships beginning in 2003, was intended  to improve efficiency. Initially, optimal manning levels were often derived  by changing watchstanding requirements. As an example, the number  of watchstanders required to serve as battle station phone operators and  stretcher bearers was reduced, and, as a result, 10 positions were  removed from ships with these positions. Other watchstations were  consolidated or eliminated. Between 2003 and 2007, the Navy transferred  some administrative workload from ship to shore personnel, which further  reduced the size of ship crews. This corresponding effort, known as Pay  and Personnel Ashore, had the effect of moving two-thirds of the  personnel specialist positions responsible for these administrative  functions from ship crews to shore support units. To further drive down  ship crew sizes, the Navy changed workload assumptions and the  equation used to determine manpower requirements in 2002. For  example, it increased the Navy standard workweek from 67 to 70  productive hours per sailor, which further reduced shipboard manning by  up to 4 percent. A time line of reduced manning initiatives that were  implemented from 2001 to 2016 is included in figure 2.

In addition to reducing crew sizes on legacy ships through the means  described, the Navy also designed its newest ship classes to operate with  smaller crew sizes, relying on new technologies, automation, and shore  support to enable these reductions. Profiles of new ship classes designed  to operate with reduced crew sizes are included in appendixes III, IV, V,  and VI.

section_title: Actions Taken in Response to Lessons Learned from Optimal Manning
paragraphs: As noted in the Navy’s 2010 Fleet Review Panel report, a primary lesson  of the optimal manning period is that using unvalidated assumptions to  reduce crews contributed to the erosion of the material condition of the  fleet. In response to these findings, the Navy has partially restored crew  sizes on its legacy ships and has increased the size of shore units to  better support its ships (see app. VII for information on shore support  personnel). In addition, the Navy took several other steps to address the  declining material condition of the surface fleet, such as the following:

Establishing the Surface Maintenance Engineering Planning Program  in 2010 to provide centralized life-cycle maintenance engineering for  surface ships, maintenance and modernization planning, and  management of maintenance strategies. The Navy also established  the Commander, Navy Regional Maintenance Centers (CNRMC) in  2010, to coordinate the depot- and intermediate-level maintenance of  its surface fleet. The goal of these efforts is to improve the material  condition and readiness of the surface fleet and to adhere to a more  disciplined deployment and maintenance schedule. Navy officials told  us that, as a result of these initiatives, the Navy has developed a  better understanding of its ships’ material condition and maintenance  needs, and maintenance requirements have generally increased.

Creating the Surface and Expeditionary Warfare Training Committee  in 2013, which is to inform leadership of surface manpower and  training investments, resourcing, acquisition, and execution. Officials  said that program offices for new ships are now required to annually  update manpower estimates and adjust manpower requirements  based on lessons learned.

Introducing a revised operational schedule known as the Optimized  Fleet Response Plan in 2014, which was intended, among other  things, to provide for the predictable scheduling of ship maintenance  tasks and ensure that ship crews were manned with a sufficient  number of sailors with the right qualifications.

section_title: Ship Operating and Support Costs and Maintenance Backlogs Have Continued to Increase for Most Legacy Ship Classes since Optimal Manning Ended
paragraphs: Ship operating and support costs—the total cost of operating,  maintaining, and supporting a ship, including personnel, operations,  maintenance, sustainment, and modernization—increased during the  optimal manning period and have continued to increase for most ship  classes, in part because increases in maintenance costs offset reductions  in personnel costs. Since the end of the optimal manning period around  2010, the Navy has partially restored crew sizes, and personnel costs  have increased for all ship classes. In addition, maintenance costs have  increased for some ship classes and decreased for others, although  maintenance costs are still above pre–optimal manning levels for all ship  classes. Navy officials attributed maintenance cost increases to reduced  crews, longer deployments, and other factors. Maintenance backlogs also  increased during the optimal manning period for the same reasons and  have continued to grow for most ship classes.
subsections: section_title: The Navy Has Partially Restored Crew Sizes since Optimal Manning Ended, and Personnel Costs Have Increased
paragraphs: During the optimal manning period—which varied among ship classes but  generally was around fiscal years 2004 to 2010—the Navy reduced  average crew sizes, as shown in figure 3, resulting in reductions in  personnel costs. Since the end of optimal manning, the Navy has  increased crew sizes, leading to increases in associated personnel costs.  However, the crews and associated personnel costs for all ship classes— with the exception of dock landing ships (LSD 41/49–classes)—are still  smaller than they were before the optimal manning initiative, in part  because the Navy has retained the longer 70-hour workweek component  for productive work that it had adopted during the optimal manning period,  which results in a requirement for fewer crew members.

section_title: Maintenance Costs Increased during Optimal Manning and Have since Continued to Increase for Some Ship Classes
paragraphs: Our analysis found that, at the same time that the Navy reduced crew  sizes and personnel costs, average maintenance costs per ship  increased for all ship classes. These increases more than offset the  decreases in personnel costs that were achieved during the optimal  manning period. Since the Navy ended the optimal manning initiative, the  change in maintenance costs has varied; maintenance costs continued to  increase for cruisers and destroyers, but have decreased for aircraft  carriers, amphibious assault ships, and dock landing ships. In all cases,  maintenance costs are above pre–optimal manning levels, as shown in  figure 4. Further, our analysis found that overall operating and support  costs increased for all classes during the optimal manning period and  have continued to increase for most ship classes since optimal manning  ended. This increase was driven in part by increases in maintenance  costs offsetting decreases in personnel costs.

Navy officials acknowledged that the reduced crew sizes during the  optimal manning period, along with reductions in shore support, may have  yielded short-term cost savings, but also increased maintenance costs  over the longer term, in part because reduced crew sizes resulted in  maintenance being deferred, which developed into more costly issues  that had to be addressed later. Navy officials also attributed increases in  maintenance costs to increased deployment lengths, increased reliance  on contractors to perform maintenance, and some class-specific  maintenance and modernization efforts. Other factors, such as the age of  a ship, may also affect maintenance costs. Our analysis does not isolate  the effects of these factors from the effect of the optimal manning  initiative.

section_title: Increased Reliance on Depot and Contractor Maintenance Increased Costs during and since Optimal Manning
paragraphs: Navy officials told us that shifts from organizational- and intermediate- level to depot-level maintenance increased overall maintenance costs. As  noted above, this change occurred in part because reduced crew sizes  resulted in minor maintenance being deferred, which developed into more  costly issues that had to be addressed later at the depot level. Our  analysis of Navy maintenance costs found that intermediate-level  maintenance costs increased for most classes during the optimal  manning period, and depot-level maintenance costs increased for all  classes, as shown in figures 5 and 6. Depot maintenance costs have  continued to increase for most classes and are above pre–optimal  manning levels for all classes as of fiscal year 2015.

Navy officials also acknowledged that reduced manning is enabled by an  increased reliance on outside entities, such as contractors, to perform  maintenance. Our analysis found that the cost of maintenance performed  by contractors and in private shipyards increased for all ship classes  during the optimal manning period and has continued to increase for most  ship classes since crew sizes were restored. However, increases in  contractor costs have been driven primarily by the increase in depot-level  maintenance. The Navy generally contracts with private shipyards and  other firms for the repair, maintenance, and modernization of nonnuclear  surface ships. Private shipyards and contractors are generally focused  on depot-level maintenance, and are responsible for most depot-level  maintenance. As a result, increases in depot-level maintenance have  driven increases in contractor maintenance costs. Contractor  maintenance costs at the intermediate level decreased for most classes  during the optimal manning period and have continued to decrease for  most classes in the period since.

section_title: Both Maintenance Backlogs and Equipment Malfunctions Increased during Optimal Manning and Have Continued to Increase
paragraphs: The Navy’s 2010 Fleet Review Panel found that reduced manning  prevented ship crews from performing the minimum required level of  preventive maintenance, resulting in a growing maintenance backlog—a  measure of the deferred maintenance for a particular ship—as well as  increased equipment malfunctions (i.e., casualty reports). Navy officials  have also acknowledged that the reduced crew sizes during the optimal  manning period, along with increased deployment lengths, contributed to  decreases in the material condition and readiness of ships. Our analysis  of Navy maintenance backlog data found that backlogs increased for all  ship classes during the optimal manning period, as shown in figure 7.  While increases in backlogs were occurring before the optimal manning  initiative, these increases accelerated during the optimal manning period  for most ship classes. Since optimal manning ended, backlogs have  continued to increase for most ship classes, but the rate of increase has  slowed for most classes. Although Navy officials told us that reductions in  manning can affect maintenance backlogs, they have not quantified the  magnitude of that relationship.

The Fleet Review Panel also noted that casualty reports increased during  the optimal manning initiative. Our previous work found that casualty  reports continued to increase following the end of optimal manning. In  2015, we found that casualty reports had nearly doubled for cruisers,  destroyers, and amphibious ships between January 2009 and July  2014. According to Navy officials, their initiatives to improve ship  material condition are beginning to make progress, and Navy  documentation we reviewed shows that the numbers of surface ship  casualty reports decreased between July 2014 and December 2016.  Another measure of ship material readiness, the Board of Inspection and  Survey’s Figure of Merit Scores, has generally improved since the Navy  ended the optimal manning initiative.

section_title: The Navy’s Manpower Requirements Process Does Not Account for All Ship Workload
paragraphs: The Navy has updated some of the factors it uses to determine the  manpower required on its ships, but its process does not fully account for  all ship workload. The Navy continues to use the workweek standard  adopted during the optimal manning period, which increased the hours for  productive work from 67 to 70 hours a week. This change was part of  what enabled the Navy to reduce crew sizes. However, a 2014 Navy  study indicated that this standard may be outdated. Although the Navy  has updated some manpower factors, its guidance on total force  manpower policies and procedures, Office of the Chief of Naval  Operations (OPNAV) Instruction 1000.16L, does not require that these  factors be reassessed to ensure that they remain current and that ship  crews are sized appropriately. Further, the Navy’s manpower  requirements process does not account for growing in-port workload,  which is distributed among fewer crew members than when ships are at  sea.
subsections: section_title: The Navy Has Updated Some Manpower Factors but Continues to Use an Outdated Workweek Standard
paragraphs: Since it ended the optimal manning initiative, the Navy has updated or is  in the process of updating several of the factors and allowances it uses to  determine manpower requirements on all ships, but it has not updated the  standard workweek. In 2012, the Navy Manpower Analysis Center  studied the “make ready / put away” allowance, which accounts for the  time needed to prepare and close out of a maintenance activity. The  center recommended increasing the allowance from 15 percent to 30  percent of the total preventive maintenance man hours on a ship, and the Navy began implementing this change in 2013. Navy manpower officials  found that, over the years, changes to regulations, instructions, and basic  safety requirements had increased the time it takes for sailors to perform  duties associated with this allowance. In addition, the Office of the Chief  of Naval Operations directed Navy manpower officials to update the  productivity allowance, which accounts for delays arising from fatigue and  work interruptions, among other factors. They increased the allowance  from a range between 2 and 8 percent of productive work requirements to  a range between 2 and 20 percent for selected ship classes. This  change to the productivity allowance accounts for a new measure of  mental fatigue associated with monitoring technology. The Navy is  examining other factors—the corrective maintenance allowance, ship  aging factors, and its pay-grade distribution model. Table 1 shows the  status of the factors in the Navy manpower requirements model.

Although the Navy has updated several of its manpower factors, it has not  made any changes to the standard workweek that it adopted during the  optimal manning period. In 2002, the Navy changed the portion of the  standard workweek allocated for sailors to perform productive work,  which is used, in part, to determine manpower requirements and calculate  the size of the crew. By increasing the time allotted for productive work  in a standard workweek, the Navy reduced the number of personnel on its  surface and amphibious ships. In 2010, we found that the Navy had  adjusted the workweek without sufficient analysis, and we recommended  that it reassess the standard workweek to assure that the Navy was  appropriately sizing ship crews. The Department of Defense (DOD)  agreed with our recommendation. In 2014, the Navy conducted a study of  the standard workweek and identified significant issues that could  negatively affect a crew’s capabilities to accomplish tasks and maintain  the material readiness of ships, as well as crew safety issues that might  result if crews sleep less to accommodate unaccounted for workload.

The Navy study found that sailors were on duty 108 hours a week,  exceeding their weekly on-duty allocation of 81 hours. This on-duty time  included 90 hours of productive work—20 hours per week more than the  70 hours that is allotted in the standard workweek. This, in turn, reduced  the time available for rest and resulted in sailors spending less time  sleeping than was allotted, a situation that the study noted could  encourage a poor safety culture. Figure 8 shows how sailors actually  spent their time compared to the time allotted for each component in the  Navy standard workweek, as reported in the Navy’s 2014 study.

An example of work that is not accurately accounted for in the workweek  is time spent by experienced personnel providing on-the-job training or  time spent by new arrivals receiving this training. Navy manpower  calculations do not include on-the-job training, and it is not accounted for  in the 7 hours allocated for training in the standard workweek. Navy  officials and crew members we interviewed told us that sailors often arrive  to their assigned ship without adequate skills and experience. Crew  members in 10 of the 12 crew interviews we conducted told us that more  experienced sailors routinely provide on-the-job training for less  experienced sailors, so the time doing this must come out of sleep,  personal time, or other allotted work time. In addition, Navy officials said  that the time allocated for administrative and other duties should be  greater, because it does not account for all of a sailor’s collateral duties.  Similarly, the 2014 Navy study concluded, among other things, that the  Navy lacked support for the time needed for some workweek  components, and recommended that they be better supported by  documentation.

However, as of February 2017, the Navy had not taken action to validate  the standard workweek, as we and its own study had recommended.  Navy officials said that they had not taken any action in response to the  2014 study’s recommendations because the study’s narrow scope of  three ships limited its applicability across the fleet. OPNAV Instruction  1000.16L specifies the total time available to accomplish the required  workload, which is a key element in the calculation of manpower  requirements. According to the Navy instruction, the process for  determining the manpower necessary to perform the required workload is  to be based on a validated and justifiable technique; that is, it should be  analytically based. Without an analytically based standard workweek that  accounts for all of the work that a sailor is expected to do, the Navy runs  the risk of negatively affecting the condition of the ship, overworking  sailors, and adversely affecting morale, retention, and safety.

The Navy instruction does not require the factors used to develop ship  manpower requirements to be reassessed periodically or when conditions  change. The effect of this absence is that inaccurate factors can persist  in developing manpower requirements. Factors and allowances are used  to calculate manpower requirements; thus, if these factors are inaccurate,  the resulting manpower requirement will be inaccurate. Our prior work  found that the changes the Navy made to several of these factors in 2002  were not substantiated with analysis. As a result, the Navy was using  these unsubstantiated factors for at least a decade without reassessment,  leading it to underestimate its manpower requirement and underman its  ships, and the Navy found that reductions in crew sizes over the optimal  manning period adversely affected ship condition. Prior to recent  reassessments of the make ready / put away allowance and productivity  allowance, some factors had not been reassessed and updated in  decades—even though there had been changes to how the Navy trains,  operates, and uses technology that affected the validity of these factors.  Navy officials told us that part of the reason they had not reassessed the  factors until directed to do so is that the relevant Navy instruction does  not require that they be reassessed periodically or when conditions  change, and they explained that having up-to-date factors would be  useful to ensure that sailor workload could be accurately captured. If  there was a requirement to reassess these factors, then the  unsubstantiated changes made to them in 2002 may have been corrected  sooner and some of the negative effects of the resulting undermanned  crews could have been curtailed or avoided. Additionally, a reassessment  requirement could prevent inaccurate factors like the standard workweek  from continuing to be used across the fleet. The Navy estimated in 2017  that if it were to revert to the analytically based standard workweek in  effect before 2002, more than 1,200 additional sailors would be required  across the surface fleet.

A memorandum from the Under Secretary of Defense for Personnel and  Readiness states that, when developing strategic manpower plans,  manpower officials shall assess how changes to roles, missions, and  management strategies will affect workloads and require a change to the  manpower, and that manpower officials shall be consulted concerning  manpower adjustments, including changes to missions, priorities, and  technologies. DOD Directive 1100.4 states that it is DOD policy that new  policy shall be evaluated before implementing to decide its effect on  manpower and personnel performance. The directive further states that  existing policies, procedures, and structures shall be periodically  evaluated to ensure efficient and effective use of manpower resources.  Unless the OPNAV instruction used by the Navy to develop its manpower  requirements requires that the factors be reassessed periodically or when  conditions change, the Navy manpower requirements model will not  reflect changes in training, technology, or regulations that occur over time  and that affect sailor workload. Requiring that these factors be  reassessed periodically or when conditions change would help ensure  that they are accurate and current, and result in more accurate manpower  requirements. Without accurate manpower requirements, the Navy risks  having ship crews that are not appropriately sized and composed to carry  out missions, maintain ship readiness, and prevent overwork of sailors.

section_title: The Navy’s Manpower Requirements Process Does Not Account for In- Port Workload
paragraphs: OPNAV Instruction 1000.16L calls for measuring only a ship’s at-sea  workload and not its in-port workload. The Navy has traditionally assumed  that at-sea workload is greater. However, we reported in 2010 that in-port  workload had increased for a number of reasons, including the addition of  new watchstanding requirements for Anti-Terrorism Force Protection.  We recommended that the Navy include the relative magnitude of in-port  and at-sea workload in its assessment of the underlying assumptions and  standards it uses to calculate manpower requirements, and DOD agreed  with this recommendation.

During our current review, we found that in-port workload is still not  captured in the process and is a persistent problem for crews, who must  complete this workload with fewer sailors than when at sea, and whose  time is also in demand for addressing other in-port priorities. The Navy  has not measured in-port workload and therefore cannot determine the  manpower requirements needed to execute this workload. Navy  operational capability documents describe the in-port period as the time  for the crew to accomplish required maintenance; take maximum  advantage of training; and be provided the maximum opportunity for rest,  leave, and liberty. Officers and enlisted personnel from all 12 of the crew  interviews we conducted told us that sailors were overworked in port.  Sailors consistently said that there were fewer crew members in port than  during deployment, because sailors were attending training and taking  leave, or because the Navy was prioritizing the manning of ships on  deployment over ships in port. For example, one ship department had 5  crew members while in port compared with 10 to 12 crew members  during deployment, so workload had to be redistributed among the  remaining sailors. In addition, sailors from a supply department said that  their workloads on the ship were the same when in-port and when on  deployment, but there were fewer sailors available in port to execute the  workloads. As in our 2010 review, crew members cited Anti-Terrorism  Force Protection watchstanding requirements as creating additional  training and work demands on them, and added that standing these  watches in port comes at the expense of their other work. Both officers  and enlisted personnel told us that ship crews are stressed and  overburdened during in-port periods because they must stand watch and  cover the workload of multiple sailors. Crew members told us that when  they returned from deployment, this additional workload placed a strain  on them and their families, affecting crew member morale.

During the course of our review, in December 2016, Navy manpower  officials began a study on the nature and amount of in-port workload; they  are scheduled to complete this study in July 2017. The Navy directed the  in-port workload study to inform development of its new training initiative,  known as Ready Relevant Learning, to begin implementation in fiscal  year 2017. However, Navy officials are still uncertain how this new  approach to training will be managed, and officials have expressed  concerns about its potential effects on in-port workload and the effects of  having sailors who are not fully trained arrive for duty on their assigned  ships.

Although the Navy is currently in the process of measuring in-port  workload, officials said that there are no efforts planned to use the study  results to translate in-port workload into manpower requirements, and that  a future determination will be made as to the implementation of any  results of the study. OPNAV Instruction 1000.16L requires that the Navy  determine at-sea manpower requirements, but does not require the Navy  to determine—nor does it have a formal process or protocol to model—in- port manpower requirements. Without identifying the manpower needed  to execute in-port workload, the Navy risks overworking its sailors during  in-port periods and having this workload executed without the appropriate  number and mix of sailors, which in turn may affect ship readiness,  safety, and sailor morale.

section_title: The Navy May Be Challenged to Man Its Growing Fleet
paragraphs: Moving forward, the Navy will likely face manning challenges, especially  given its current difficulty in filling authorized positions, as it seeks to  increase the size of its fleet as much as 30 percent over its current size.  Moreover, new ship classes being introduced now are sometimes  requiring more personnel than originally estimated as the Navy gains  experience with the ships. Navy officials stated that even with manpower  requirements that accurately capture all workload, the Navy will be  challenged to fund these positions and fill them with adequately trained  sailors at current personnel levels.
subsections: section_title: Increasing Fleet Size May Exacerbate Manning Challenges
paragraphs: Even with the reduced personnel authorized since optimal manning, the  Navy has had difficulty filling authorized personnel slots, called “billets” in  the Navy. The Navy’s commands responsible for manning, equipping,  and training the surface fleet have cited the lack of personnel available to  be distributed to ships as their primary challenge. Unfilled positions on  ship crews and in shore support positions result in workload that must be  redistributed among the remaining crew and also represent skills and  abilities that are absent from a crew, exacerbating the risks associated  with smaller authorized crews. Officials said that it is not uncommon for  billets to remain unfilled for 6 months or more and that shore commands  are more likely to experience such “gapped billets” for even longer  periods.

A 2014 Naval Audit Service report examined critical gapped billets, based  on a concern that shortfalls among senior enlisted personnel made it  impossible to meet shipboard manning requirements. The report found  that the Navy has taken actions to reduce gapped billets, but the issue  persists. As a result, gapped billets continue to exist, sailors may be  required to work longer hours to make up for gapped billets, and junior  sailors may not be receiving needed supervision. The report concluded,  among other things, that unless the Navy increases enlisted personnel,  recurring gaps will not be corrected.

Given the continued demand for ships to support combatant  commanders, the Navy plans to increase its fleet from 274 ships (as of  March 7, 2017) to 308 ships by 2021. As of March 2017, the Navy had an end strength of 323,197 active-duty personnel. According to the Navy,  this number is expected to remain largely flat through 2021, even though  an increasing number of ships are entering the fleet. Navy officials have  expressed concern about the growing gap between end strength and ship  numbers, and said that the Navy would have to increase its end strength  in order to adequately man its ships. Figure 9 shows the Navy’s projected  end strength and fleet size.

The Navy has also identified the need for an even larger fleet, which  would add to personnel needs and costs. Specifically, the Navy released  an updated Force Structure Assessment in late 2016 that called for a  355-ship fleet to meet global threats—a 15 percent increase from the  previous 308-ship goal and a 30 percent increase from the size of its  current fleet. In a February 2017 report, the Congressional Research  Service estimated the additional shipbuilding costs that would be needed  over a 30-year period based on the Force Structure Assessment, but  added that these additional shipbuilding funds are only part of what would  be needed to achieve and maintain a 355-ship fleet instead of 308-ship  fleet. According to DOD, operating and support costs—which include  personnel and maintenance costs—have traditionally constituted about  70 percent of a ship’s total life-cycle costs. Our analysis has shown that  personnel costs were the largest share of total operating and support  costs for surface ship classes between fiscal years 2000 to 2015 (see  app. VIII for total ship operating and support costs).

The underlying cause for this apparent ship–personnel mismatch is that  the Navy is seeking to grow its fleet but is not fully assessing the  personnel implications of the growth. Navy officials told us that it mans its  ships and all other positions within its approved end strength, but has not  determined the number or cost of personnel needed to man the  increasing number of ships or made concrete plans for adding the needed  personnel. The personnel needs will be significant. The Congressional  Research Service estimated that about 15,000 additional sailors and  aviation personnel might be needed to man the 47 additional ships above  the previous 308-ship plan. Plans to grow the fleet further to 355  ships—and our findings that manpower validation processes are based  on questionable assumptions that likely understate personnel needs— could further exacerbate the mismatch. However, the Navy has not fully  assessed whether the service will need increased end strength and, if so,  how much. Navy officials told us that if overall Navy end strength is not  increased, the billets would likely have to be taken from other  organizations as new ships are delivered, potentially continuing to  perpetuate the gapped billets challenge.

Our prior work has shown that identifying needed resources and  investments is a key characteristic that helps to establish a  comprehensive, results-oriented management framework to guide  implementation of plans and strategies. This activity includes identifying  what a strategy will cost and the sources and types of resources and  investments associated with the strategy. According to Navy officials, in  order to compensate for the lack of distributable personnel who would be  needed to fill all manpower requirements within the current end strength,  they currently prioritize which positions to fill and which to keep unfilled in  order to maintain a permissible level of risk and readiness in the surface  fleet. As the Navy continues to update ship manpower requirements  based on recent changes to the factors and allowances used to calculate  them, these requirements are likely to increase. Already-strained  manpower resources will be even more stressed as the Navy  commissions increasing numbers of ships without a commensurate  increase in personnel. Unless it updates its manpower factors and  requirements, and identifies the personnel cost implications associated  with any planned increases in the fleet size, the Navy will not be  positioned to accurately articulate internally within DOD or externally to  Congress the personnel needs of the Navy.

section_title: Crew Sizes on Recently- Inducted Ship Classes Have Grown as the Navy Gains Experience Operating Them
paragraphs: In addition to using the outdated standard workweek and not accounting  for in-port workload, the Navy developed estimates of manpower  requirements and crew size targets for its new ships based on  assumptions that technologies would enable smaller crews. However,  crew sizes on most new ship classes have grown over time as anticipated  workload reductions from new technologies have not materialized and the  Navy gains more experience operating the new ships. These  technologies include networks that integrate ship systems to allow for  remote monitoring, redesigned propulsion systems on some ships, and  extensive use of automation to relieve crews of some manual work;  however, some of these technologies are still not fully developed, tested,  or fielded and remain immature. As a result, crew sizes have grown to  allow sailors to do this manual work.

For example, crew sizes for the Littoral Combat Ship (LCS), Zumwalt- class destroyer (DDG 1000), and San Antonio–class Amphibious  Transport Dock (LPD 17) have increased since these ships entered  service, as shown in table 2, and LCS and DDG 1000 have reached the  upper limits for crew size as laid out in their acquisition strategies. Navy  officials acknowledged that LCS and DDG 1000 crew sizes have grown  due to the inadequacy of the original manpower assumptions coupled  with additional mission requirements to support ship operations. The new  Ford-class aircraft carrier (CVN 78) has not yet entered service, and its  crew size so far remains within the Navy’s targets—currently 663 sailors  below that of legacy Nimitz-class carriers. However, some planned  features of the ship that were expected to reduce workload have been  canceled, and delays in developing and testing some of the new  technologies on the ship create unknowns about their ability to enable a  smaller crew. See appendixes III, IV, V, and VI for specific information on  each new ship class.

The LCS program illustrates how crew size can grow over time as the  Navy gains operational experience with the ship class and its new  technology. The Navy originally designed and built these ships to  accommodate a total crew size of 75, but gradually increased the ships’  crews as it gained more experience operating them, and has since had to  redesign the ships to accommodate 98 sailors—a 31 percent increase. As  of March 2017, three of the Navy’s nine LCS ships have been deployed  overseas. Automation and the use of condition-based maintenance have  not decreased workload as they were intended to do, and the unreliability  of shipboard systems has led to major equipment failures and  unanticipated corrective maintenance. Officers and enlisted crew  members told us that the LCS’s minimally sized crews are challenged to  complete their workload. In 2014, we found that the LCS program had a  number of manning challenges and that without validating the crew size  and composition for all LCS crews and without accounting for the full  scope and distribution of work performed by sailors across all ship  departments, the Navy risked that crew fatigue would exceed Navy  standards and could negatively affect crew members’ performance as  well as morale, retention, safety, and ultimately the operational readiness  of the ship class.

In response to LCS manning and other challenges, the Navy conducted a  program review in 2016 and announced changes to the ships’ crewing  and other operational concepts that are now being implemented across  the program. LCS officials told us that some of the program changes are  meant to alleviate the heavy workload of LCS sailors. Specifically, the  Navy has formed LCS maintenance execution teams to assist with heavy  in-port workload, build organic expertise, decrease dependence on  maintenance contractors, and serve as a pool of qualified sailors who can  fill in for unplanned losses in LCS crews. Officials responsible for  implementing program changes told us that they are in the process of  determining the composition of LCS integrated crews, and are using all  available inputs and information to determine the best mix of sailors.  However, Navy manpower officials have yet to validate these changes to  the LCS crewing concept, and delays in LCS mission module  development and testing do not allow for them to validate needed crew  size and composition since the modules are immature.

Navy officials told us they validate manpower requirements for new ship  classes after testing is complete and the first ship of the class has been  deployed. Most new ship classes have unvalidated manpower  requirements due to lack of operational experience or system immaturity.  Table 3 summarizes the status of manpower requirement validation for  new ship classes with reduced crews.

As noted above, crew sizes on three of the Navy’s four new ship classes  have grown partly because the technologies in use have not led to the  expected reductions in workload. In the case of LCS and LPD 17, the lack  of physical space limits the ability of the crews to grow further without  significant redesign of ship interiors. The DDG 1000 crew has reached its  upper crew size target, but program officials have said that the ship could  accommodate additional sailors as the ship gains more operational  experience—if it is determined that they are necessary. CVN 78 crews  may also grow until technologies meant to reduce workload and crew  sizes mature. Until technologies on new ships are mature and  demonstrate their ability to decrease workload, crew sizes on new ships  may continue to grow, placing further pressure on the Navy’s resources.

section_title: Conclusions
paragraphs: During the optimal manning period of the early 2000s, the Navy made  changes to its manpower requirements process that were intended to  drive down crew sizes and thus save on personnel costs. However, these  changes were not substantiated with analysis. The result was that with  fewer sailors operating and maintaining surface ships, the material  condition of the ships declined, and this effect ultimately contributed to  increased overall operating and support costs. The Navy has reassessed  and reversed some of the changes it made during the optimal manning  period, but it continues to use a workweek standard that does not reflect  the actual time sailors spend working, and the Navy still does not account  for in-port workload—both of which may be leading to sailors being  overworked and creating a readiness and safety risk. In addition, the  Navy’s guidance does not require that the factors used to calculate  manpower requirements be reassessed periodically or when conditions  change to ensure that these factors remain valid and crews are  appropriately sized. A requirement to reassess these factors would help  ensure that they stay current and analytically based, and would provide  the Navy a sound basis for its manpower requirements. Looking to the  future, the Navy plans to grow its fleet as much as 30 percent but has not  determined how many personnel will be needed to man the larger fleet or  what these personnel will cost. As the number of ships increases—and if  crew sizes continue to grow on new ship classes—the Navy will be  challenged to distribute its sailors across the fleet without an increase in  personnel. Unless it identifies the personnel needs and costs associated  with a larger fleet size, the Navy runs the risk of buying ships that it  cannot fully man, potentially repeating the mistakes associated with the  optimal manning period and resulting in degraded surface fleet readiness  and increased maintenance costs.

section_title: Recommendations for Executive Action
paragraphs: To ensure that the Navy’s manpower requirements are current and  analytically based and will meet the needs of the existing and future  surface fleet, we recommend that the Under Secretary of Defense for  Personnel and Readiness direct the Secretary of the Navy to have the  Navy take the following four actions:  conduct a comprehensive reassessment of the Navy standard  workweek and make any necessary adjustments; update guidance to require examination of in-port workload and  identify the manpower necessary to execute in-port workload for all  surface ship classes; develop criteria and update guidance for reassessing the factors used  to calculate manpower requirements periodically or when conditions  change; and  identify personnel needs and costs associated with the planned larger  Navy fleet size, including consideration of the updated manpower  factors and requirements.

section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD for review and comment. In its  comments, reproduced in appendix IX, DOD concurred with our  recommendations, citing its commitment to ensuring that the Navy’s  manpower requirements are current and analytically based and will meet  the needs of the existing and future surface fleet. DOD also provided  technical comments, which we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees; and to the Secretary of Defense; the Under Secretary of  Defense for Personnel and Readiness; and the Secretary of the Navy. In  addition, the report is available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-3489 or pendletonj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix X.

section_title: Appendix I: Scope and Methodology
paragraphs: To describe trends in Navy crew sizes and operating and support costs  on its legacy ships, we analyzed annual data from fiscal years 2000  through 2015 (the most current data available at the time of our review)  from the Navy’s Visibility and Management of Operating and Support  Costs (VAMOSC) system. We included all classes and flights of surface  ships that were (1) in service during the optimal manning period, (2)  subject to crew size reductions during that period, and (3) still in service  as of fiscal year 2015. The following ship classes and flights were  included in our analysis:

Nimitz-class (CVN 68) Aircraft Carriers;

Arleigh Burke–class (DDG 51) Destroyers (including Flights I, II, and

Ticonderoga-class (CG 47) Cruisers;

Wasp-class (LHD 1) Amphibious Assault Ships; and

Whidbey Island– (LSD 41) and Harpers Ferry–class (LSD 49) Dock  Landing Ships.

As noted in our report, the years of the optimal manning period varied  among ship classes. To determine the optimal manning period for each  class, we analyzed Navy documentation and data on crew levels for each  ship class. Based on this analysis, we defined the optimal manning period  as the following for each class, and used these years in our analyses of  changes during the optimal manning period:

Nimitz-class (CVN 68) Aircraft Carriers: fiscal years 2005–2012;

Arleigh Burke–class (DDG 51) Destroyers (including Flights I, II, and  IIA): fiscal years 2004–2010;

Ticonderoga-class (CG 47) Cruisers: fiscal years 2003–2010;

Wasp-class (LHD 1) Amphibious Assault Ships: fiscal years 2005–

Whidbey Island– (LSD 41) and Harpers Ferry–class (LSD 49) Dock  Landing Ships: fiscal years 2006–2010.

For our analysis, we used the following elements in the VAMOSC  database:

Crew size: “Number of Personnel—Navy.”

Total operating and support costs: all cost elements.

Personnel costs: all cost elements within “Unit-Level Manpower.”

Maintenance costs: all costs elements within “Maintenance”:

Organizational-level maintenance: “Consumable Materials and  Repair Parts” and “Depot Level Repairables.”

Intermediate-level maintenance: all cost elements within  “Intermediate Maintenance.”

Depot-level maintenance: all costs elements within “Depot  Maintenance.”

Maintenance performed by private shipyards and contractors:  “Intermediate-Level Contractor Maintenance,” all cost elements for  private shipyards within “CNO-Scheduled Depot Maintenance,”  and all cost elements for private shipyards within “Fleet Depot  Maintenance.”

Other operating and support costs: all costs elements within “Unit  Operations,” “Sustaining Support,” and “Continuing System  Improvements.”

We reviewed trends in these elements for each ship class in our scope.  We also calculated the change in each element during and since the  optimal manning period, as well as the total change since the beginning  of the optimal manning period, for each ship class in our scope, as  described below:  change during optimal manning period is calculated as the change in  dollars and percent from the pre–optimal manning level and the last  year of optimal manning for a ship class;  change since optimal manning period is calculated as the change in  dollars and percent from the last year of optimal manning for a ship  class and fiscal year 2015; and  total change since start of optimal manning period is calculated as the  change in dollars and percent from the pre–optimal manning level for  a ship class and fiscal year 2015.

To describe maintenance and ship material condition trends, we analyzed  maintenance backlog, casualty report, and inspection result data from  2000 through 2015, as specified below:

For maintenance backlog data, we requested data on the number of  maintenance backlog items for each ship in our scope and calculated  class and type averages of the number of maintenance backlog items  as of September 30 of each fiscal year. To analyze the change in  maintenance backlogs in the pre–optimal manning, optimal manning,  and post–optimal manning periods, we compared the average annual  rate of change in the number of backlog items for each ship type  during each period, as defined above for each ship class.

For casualty report data, we reviewed Navy reports and other  documentation, as well as our prior work, which reported on trends in  casualty reports during the optimal manning and post–optimal  manning periods.

For inspection report data, we compared average scores for the  Board of Inspection and Survey’s Figure of Merit for the optimal  manning and post–optimal manning periods for each ship type.  According to board officials, changes to the inspection criteria in 2003  resulted in an increase in scores from 2004 onward. As a result, we  did not compare Figure of Merit scores from before the optimal  manning period to those during the optimal manning period.

We assessed the reliability of the Navy’s VAMOSC, maintenance  backlog, casualty report, and inspection report data and found them to be  reliable for the purposes of describing trends and making comparisons  over time in ship crews, operating and support costs, shore support  personnel, and material conditions. Specifically, we reviewed prior GAO  reports making use of these data, interviewed Navy officials with  knowledge of the data, and reviewed documentation on the data and  related systems. Where possible, we also corroborated the data with  other data sources.

To analyze trends in shore support personnel, we requested that officials  from the Office of the Chief of Naval Operations’ Expeditionary Warfare  (N95), Surface Warfare (N96), and Air Warfare (N98) directorates identify  those shore support units that provided support specific to amphibious  ships, surface combatants, and aircraft carriers. We then analyzed data  from VAMOSC on trends in the number of full-time-equivalent military  personnel assigned to these units from fiscal years 2002 to 2015. As part  of this analysis, we also analyzed trends in units responsible for training  as well as trends in units that are associated with Navy regional  maintenance centers.

To assess the extent to which the Navy’s manpower requirements  process fully accounts for ship workload, we examined the factors and  assumptions used in determining crew sizes for surface and amphibious  ships, and we analyzed various Navy documents and instructions related  to determining crew sizes, including Office of the Chief of Naval  Operations Instruction 1000.16L, Navy Total Force Manpower Policies  and Procedures, in order to identify the steps required in the Navy’s  process to determine crew sizes. Furthermore, we reviewed prior GAO  work on shipboard and shore-based manpower requirements  determination, as well as previous Navy studies on the process,  including on the sufficiency of its factors. We also interviewed Navy  officials to discuss their process in determining manpower requirements,  changes to the process (including its factors and allowances) since the  end of optimal manning, current studies under way, and the status of the  newest ship classes.

We also conducted group discussions with crews from six ships, having  separate discussions with officers and enlisted personnel from each ship  for a total of 12 group discussions. We met with crews from two  destroyers, two amphibious transport dock ships, and both variants of the  littoral combat ships (LCS) to discuss crew size, composition, and  workload. We selected these ship classes for their years of operational  experience as well as their representation of ships subject to different  reduced manning initiatives: (1) optimal manning initiative (DDG 51), (2)  minimal manning construct (LCS), and (3) reduced crew size targets from  their predecessor ship classes (LPD 17). Specifically, we visited ship  classes homeported in both the Pacific and Atlantic Fleet, which included  the USS Higgins (DDG 76), USS Bainbridge (DDG 96), LCS Crew 101,  LCS Crew 203, USS Anchorage (LPD 23), and USS Arlington (LPD 24).  For each visit, we requested to speak with a cross section of personnel  from each ship department and carried out group discussions with the  officers and enlisted personnel available.

We interviewed officials or obtained documentation at the following  locations:

Office of the Secretary of Defense

Cost Assessment and Program Evaluation

Defense Manpower Data Center

Office of the Chief of Naval Operations

Force Manpower and Assessments Branch

U.S. Fleet Forces Command

Commander, Naval Surface Force, U.S. Atlantic Fleet

Command Manpower Analysis Team

Board of Inspection and Survey

Commander, Naval Surface Force, U.S. Pacific Fleet

Commander, Littoral Combat Ship Squadron One

Naval Sea Systems Command

Cost Engineering and Industrial Analysis Division

Program Executive Office Aircraft Carriers

Program Executive Office Littoral Combat Ships

Program Executive Office Ships

Surface Maintenance Engineering Planning Program

Commander, Navy Regional Maintenance Center

Naval Center for Cost Analysis

Naval Education and Training Command

Bureau of Naval Personnel

Navy Manpower Analysis Center  To determine the challenges, if any, for manning the surface fleet and  implications for the future, we analyzed the Navy’s 2017 30-year  Shipbuilding Plan, 2016 Force Structure Assessment, and 2017  Department of Navy budget. We also reviewed and analyzed reports on  manpower and manning by the Center for Naval Analyses, Naval Audit  Service, Congressional Research Service, and GAO. We also analyzed  acquisition, manpower, and operational documents to determine the crew  size goals and current crew sizes for new ship classes. We interviewed  program and other Navy officials to discuss the status of new  technologies, manning challenges, and crew sizes growth on new ships.  We also interviewed Navy officials and ship crews to discuss fleet-wide  manpower and manning challenges.

We conducted this performance audit from March 2016 to May 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.

section_title: Appendix II: Shore Support Manpower Requirements Process
paragraphs: The Navy has a decentralized process for determining its shore support  manpower requirements. Each of the 20 major shore commands is the  primary agent for determining and approving the scope of their activities,  whether they are personnel, training, and maintenance functions or  activities like research and development. The major shore commands  cover multiple warfighting enterprises and providers, such as U.S. Fleet  Forces Command, U.S. Pacific Fleet, Naval Sea Systems Command, and  others. This process is illustrated in figure 10.

The major shore command or activity writes the mission, functions, and  tasks (MFT) statement, which is the primary document for identifying the  shore activity’s workload. Each major shore command provides its own  analysts with training to conduct manpower reviews for various activities.  These analysts draw from the MFT statement to develop a performance  work statement that identifies the work to be done. In determining  manpower requirements, analysts also consider maintenance  requirements and staffing standards, among other factors. In contrast to  shipboard manpower requirements, which are determined using a model,  each shore command establishes its own procedures and methodology to  determine and validate manpower requirements due to the variations  among the commands’ missions and workload. These procedures and  methodology are to be analytically proven, such as through industrial  engineering studies, mathematical models, and better business practices,  among others. Major shore commands develop manpower requirements  for peacetime and wartime scenarios separately, in which the workload  and thus manpower requirements could vary. Major shore commands  must review manpower requirements on a continuous basis to ensure  they support the MFT, and should determine manpower requirements  after major revisions to the MFT, new equipment changes, technology  adjustments to workflow, or other changing conditions.

After major shore commands determine and validate their manpower  requirements, the positions are filled based on budget and resource  allocation decisions. The major shore commands create a Program  Objective Memorandum, which informs the service’s, department’s, and  ultimately the President’s budget submission, which is subject to  congressional approval. Thus, changes to manpower requirements do not  result in immediate changes to shore personnel manning and,  furthermore, there may be a gap between the validated requirements and  the shore personnel manning due to funding and personnel inventory as  established by annual defense authorization and appropriation acts.

In January 2008, responding to a request from the Office of the Chief of  Naval Operations (OPNAV), the Center for Naval Analyses identified  challenges with the shore manpower determination process, including a  lack of standardization among similar activities and issues with staff  qualifications, among others, which echoed our previous findings in a  1997 report on Navy personnel. According to Navy officials, OPNAV is  chairing a project team to improve the process and deliver revised  direction for making shore activity plans and establishing training for  determining shore manpower requirements, due in fiscal year 2017. The  project team also plans to encourage major shore commands to measure  workload using standard methods of analysis for similar activities. In  September 2016, Fleet Forces Command launched a pilot training  program for analysts of other shore commands, intended to improve the  consistency in how various major shore commands conduct their  manpower reviews. In addition, Fleet Forces Command is working with  OPNAV to develop a model to predict changes in shore manpower  needs. (CVN 78)

CVN 78 ships are designed to  replace Nimitz-class (CVN 68)  aircraft carriers and operate with  nearly 700 fewer crew members.  Each ship in the new class is  expected to save $3.7 billion in  manpower costs and $2 billion in  maintenance costs over its 50-year  service life in comparison to Nimitz- class carriers.

Technology and automation:   Technologies and ship design initiatives are expected to reduce  watchstanding workload requirements and touch-labor required for some  tasks (e.g., redesigned nuclear reactor plant is expected to result in a 50  percent manning reduction). Some of these technologies are detailed in table 4.
subsections: section_title: Crew size
paragraphs: Nuclear propulsion and electric plant   system)
subsections: section_title: Goal: CVN 78 has manpower key performance parameters that reflect a reduction of 900 (objective) and 500 (threshold) positions compared to Nimitz-class carriers, which have a crew of 3,291 sailors.
paragraphs: Shore support:  CVN 78’s projected crew reductions do not depend on transferring  maintenance or other work ashore. Program officials said that manpower  reductions have been realized through the above technologies and design  efficiencies or through changing work processes.

Actual: CVN 78 crew size is  currently 2,628, a reduction of 663  sailors below the Nimitz class, and  within the threshold of 2,791.

Four of CVN 78’s 13 critical  technologies remain immature,  testing continues to reveal issues,  and ship delivery has been delayed  multiple times since 2014, with  expected delivery in 2017.

Crew size growth:   CVN 78 has not experienced crew size growth but has not yet entered active  service. The preliminary manpower requirement set in 2011 and  reestablished in 2017 called for 2,628 personnel, which is the current ship’s  force crew size. Technology schedule delays (e.g., advance weapons  elevators and dual band radar) have impacted the validation of preventive  maintenance or watchstanding assumptions, or both, but are not believed by  Navy officials to impact crew levels. Program officials noted that the crew  size can grow by an additional 163 positions and still remain within the  parameters. However, we have found that because of the lack of operational  data on key systems, these ships will likely require additional personnel, and  that the aircraft carrier can only accommodate a slight increase in personnel  without requiring significant ship redesign.

In August 2016, DOD  commissioned a review to  determine where system  dependencies pose risk to CVN 78  performance and to identify  alternatives for mitigating those  risks. The study concluded that it  would be too disruptive to make  any technological changes at this  point, but noted the ongoing risk.

Operating and Support Costs:   The Department of Defense (DOD) estimates that it will cost an average of  about $391 million to operate and support a CVN 78 ship per year, and  calculates the average annual cost for Nimitz-class aircraft carriers to be  about $490 million. There are not sufficient cost data available to determine  CVN 78 operating and support savings because this ship is not yet in active  service. (DDG 1000)

Compared to DDG 51 destroyers,  which have an average crew size  of 307 sailors, the DDG 1000 class  is meant to require fewer crew  members to carry out similar  functions for watchstations,  damage control, combat systems  maintenance, and turbines.

section_title: Crew size
paragraphs: peacetime applications into a single network and enables reduced  numbers of watchstanders.

Goal: DDG 1000 has manpower  key performance parameters for a  crew of 125 (objective) and 175  (threshold).

According to program officials, the ship’s efficient interior layout has also  made it possible to reduce crew size.

Actual: The ship’s current crew  size is 175 (this includes a ship’s  force of 147 and an aviation  detachment of 28).

Shore support:   DDG 1000’s shore-side support and maintenance are key elements that  enable a significant reduction in crew when compared with previous  destroyers, but shore-based maintenance will be accomplished through  existing infrastructure such as regional maintenance centers and shipyards,  while the training, logistics, and administrative assistance will be  accomplished using military, civilian, and contractor personnel from the  program office and class squadron.

Six of DDG 1000’s 11 critical  technologies remain immature. The  program reports that the ship’s  design is stable, but ongoing  development and shipboard testing  of technologies pose risk for design  changes. DDG 1000 was delivered  to the Navy in May 2016 and was  commissioned in October 2016.  The performance of DDG 1000’s  critical technologies and how they  will be implemented in the fleet will  not be known until all combat  systems have been installed on the  ship and it gains more operational  experience.

Crew size growth:   The preliminary manpower requirement set in 2012 called for a crew of 158,  and DDG 1000 has reached its crew size threshold of 175 personnel (crew  size growth of 11 per cent). According to program officials, crew size  increase was the result of lessons learned, and the crew approach was  developed and updated as the ship design matured and ship construction  progressed. Program officials suggested that crew size parameters should  be reassessed and, if additional personnel are needed on the ship, there is  space to accommodate them.  Based on the Navy’s ship delivery approach,  DDG 1000 entered service in 2016 without any of its combat systems tested  and sufficient time has not elapsed to evaluate the impact of the design and  new technologies on manpower and costs.  According to program officials,  due to the crew’s initial learning curve for new combat systems, ship  commanders may require more crew in the short term.

Operating and Support Costs:   The Department of Defense estimates that it will cost an average of about  $74 million to operate and support a DDG 1000 per year, and calculates the  average annual cost for DDG 51 ships to be about $33 million, so there is not  a cost savings expected. Since DDG 1000 has recently entered service,  there are not sufficient actual cost data available to compare against the  estimate.

Littoral Combat Ship (LCS)

The LCS class consists of two  different variants that are expected  to replace frigates, mine  countermeasures ships, and patrol  coastal ships. Each ship is to  undertake one of three missions:  antisubmarine warfare, surface  warfare, or mine countermeasures.  The use of minimal manning was  meant to lower operating and  support costs over the ships’ life  cycle, compared to legacy frigates  that had a crew size of 215.

Technology and automation:   The extensive use of automation and the overall design of the ship are meant  to reduce manning on LCS. The class relies on a condition-based  maintenance system wherein sensors and cameras remotely monitor  equipment and spaces, reducing watchstanding requirements and thus crew  sizes.

section_title: Crew size
paragraphs: Goal: LCS has manpower key  performance parameters for a core  crew of 15 (objective) and 50  (threshold).

Total LCS crew size has grown from 75 in 2003 to 98 personnel in 2016, a  31 per cent increase that is detailed in table 5. Following a program review in  2016, LCS core and mission crews were integrated into a 70-sailor unit.  There are 98 sailor berths within the ship; additional crew growth is not  possible without redesigning interior spaces to accommodate more sailors.

Actual: Recent changes to the  LCS program have created an  integrated core and mission crew  of 70 sailors. Total number of ship  crew including an aviation  detachment and ensigns is 98.

Core crew  Mission crew (1 of 3):  Antisubmarine (ASW)  Surface warfare (SUW)  Mine countermeasure (MCM)
subsections: section_title: Sensors and other condition-based maintenance elements have functionality issues. Ship systems, including those in the propulsion plant that have recently experienced major casualties, indicate additional reliability issues. The Navy required LCS engineers to retrain following these major equipment failures, attributing some of them to human error. LCS personnel are concerned that these problems will continue with manning at current levels, even with the latest program changes.
paragraphs: Operating and support costs:   The Department of Defense estimates that it will cost an average of about  $55 million to operate and support an LCS per year.  Although the Navy has  described the LCS as a low-cost alternative to other surface ship classes, we  found in 2014 that the available data indicate that the costs of the LCS may  exceed or closely align with the costs of other multimission surface ships with  larger crews.  According to Navy officials, the recent restructuring of LCS  operational concepts demonstrates that reducing crew size does not  generate the cost savings or cost avoidance that the Navy had anticipated.

San Antonio–Class Amphibious Transport  Dock  (LPD 17)

These ships are designed to  transport Marines and their  equipment and allow them to land  using helicopters, landing craft, and  amphibious vehicles. This class  was designed to reduce crew sizes  from earlier LPDs but does not rely  upon new technologies,  automation, or shore support as do  newer ship classes.

Technology and automation:   Some system integration and automation was installed on the ship in part to  help reduce watchstanding workload and reduce crew sizes, including a  shipboard-wide network that integrates combat, navigation, and other  systems.

Shore support:   The ship class does not rely upon shore support for maintenance or other  activities more than other amphibious ships, and not to the extent of newer  platforms like the Littoral Combat Ship and DDG 1000.

section_title: Crew size
subsections: section_title: Actual: While there were about 14,000 crew members on antecedent ships, the LPD 17 class has a total crew size of less than 5,000, which falls within the 25 percent reduction target. There were no crew size target numbers or key performance parameters specified for LPD 17.
paragraphs: Crew size growth:   The preliminary manpower requirement set in 2003 called for a crew of 363,  and the ship’s current manpower requirement is 378 personnel, a 4 percent  increase. The average crew size of its antecedent ship class, LPD 4, was  364 sailors. Since the first ship of the class began construction in 2000, LPD  17 manpower requirements were adjusted through multiple iterations. The  increase in the average crew size was driven by additional manning  requirements related to system upgrades, and by manpower studies that  identified and subsequently corrected other manning deficiencies. Crew  members told us the ships do not have berthing spaces to accommodate  additional Navy personnel without infringing upon designated spaces for  Marines, who embark with the ship.

Operating and Support Costs:   Average annual LPD 17 operating and support costs are $42.8 million,  compared to $36.4 million for its antecedent ship, LPD 4, an average annual  per ship increase of $6.4 million.

section_title: Challenges
subsections: section_title: During interviews with the LPD crews, officers and enlisted crew members we interviewed from two ships of this class told us that they did not believe the manpower requirement was sufficient for carrying out all required operations. The Navy last validated the LPD 17 manpower requirement in 2011, and officials told us they are tentatively scheduled to update it in fiscal years 2018 or 2019.
paragraphs: GAO reported in 2016 that the Navy plans to build a replacement class of  amphibious ships based on LPD design but with no new critical technologies.  The Navy considers the LPD 17 design unaffordable and plans to remove  some LPD 17 features on its replacement. The program office would not  comment more about the planned replacement given its competition  sensitivity.

section_title: Appendix VII: Shore Support Personnel
paragraphs: As the Navy reduced crew sizes aboard its ships as part of optimal  manning and related initiatives beginning in 2001, it also reduced shore  support positions in units responsible for maintenance and training.  However, these positions have been mostly restored as of fiscal year  2015. From a peak in fiscal year 2006, the Navy reduced military  personnel in units supporting surface ships by about 1,800 full-time  equivalents (or about 24 percent) by fiscal year 2011. The Navy’s Fleet  Review Panel found that these reductions in shore support also  contributed to degraded material condition of the surface fleet, and Navy  officials told us they concluded that that the reductions in shore support  contributed to declines in readiness during optimal manning. As of fiscal  year 2015, the Navy has restored shore positions in units supporting  surface ships to approximately their previous peak in fiscal year 2006.

Within shore support, however, there is variation in the extent to which  positions have been restored. For example, positions in regional  maintenance centers—which are responsible for conducting and  overseeing intermediate-level maintenance on Navy ships—are about 19  percent above their prior peak in fiscal year 2006. Conversely, positions  in training units that support surface ships and their crews remain about  13 percent below their prior peak in fiscal year 2006.

section_title: Appendix VIII: Average Operating and Support Costs and Crew Sizes by Ship Class
paragraphs: Our analysis found that overall operating and support costs increased for  surface and amphibious ship classes during the optimal manning period  and have continued to increase for most classes since the end of the  optimal manning period. This increase was driven in part by increases in  maintenance costs offsetting decreases in personnel costs over this  period. In technical comments on a draft of this report, Navy officials cited  growth in entitlements and allowances as an additional contributing factor  to increasing personnel costs over this period. Navy officials also noted  that using different deployment models such as overseas homeporting  and rotational crewing can also drive significant differences in operating  and support costs even within a ship class, usually with the benefits of  increased time on deployment. However, as we found in 2015, these  approaches can also contribute to higher maintenance costs over the  long term. Specifically, we found that ships homeported overseas incur  higher operating and support costs than U.S.-homeported ships, and that  some of these ships have had consistently deferred maintenance that  resulted in long-term degraded material condition and increased  maintenance costs. Our 2015 analysis also showed that homeporting  ships overseas provides additional time in a forward area of operations  and additional deployed under way time compared to ships homeported  in the United States, but that the additional time provided was primarily  because training and maintenance periods are shorter than those  provided for U.S.-homeported ships. Trends in ship operating and support  costs for each ship class over this period are illustrated in figures 11 and  12.

section_title: Appendix IX: Comments from the Department of Defense

section_title: Appendix X: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact

section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Suzanne Wren, Assistant  Director; Steven Banovac; Kerri Eisenbach; Bonnie Ho; Joanne  Landesman; Amie Lesser; Shahrzad Nikoo; Daniel Ramsey; Michael  Silver; John Van Schaik; and Chris Watson made key contributions to this  report.


Question-summary annotations: questions: question: What trend have total ship operating and support costs been following?
answer: Total ship operating and support costs—which include personnel and maintenance costs—and maintenance backlogs increased during the optimal manning period (2003–2012) and have continued to increase for most ship classes since the initiative ended.
child_questions: question: Why do Navy officials believe maintenance costs increased?
answer: Navy officials attributed maintenance cost increases to reduced crews, longer deployments, and other factors.

question: Why did the Navy reduce crew sizes?
answer: Since the implementation of optimal manning, the Navy reduced crew sizes, which decreased the associated personnel costs for most ship classes, even as crews were partially restored.

questions: question: What does the Navy's process to determine manpower requirements not account for?
answer: The Navy's process to determine manpower requirements—the number and skill mix of sailors needed for its ships—does not fully account for all ship workload.
child_questions: question: Why are current manpower requirements important?
answer: Current and analytically based manpower requirements are essential to ensuring that crews can maintain readiness and prevent overwork that can affect safety, morale, and retention.

question: What may result from the Navy not having updated methods to determine manpower requirements?
answer: Until the Navy makes needed changes to its factors and instruction used in determining manpower requirements, its ships may not have the right number and skill mix of sailors to maintain readiness and prevent overworking its sailors.

question: Why is the Navy's outdated standard workweek a problem?
answer: The Navy continues to use an outdated standard workweek that may overstate the amount of sailor time available for productive work.

questions: question: What challenges will the Navy face moving forward?
answer: Moving forward, the Navy will likely face manning challenges as it seeks to increase the size of its fleet.

question: What has the Navy not yet determined?
answer: The fleet is projected to grow from its current 274 ships to as many as 355 ships, but the Navy has not determined how many personnel will need to be added to man those ships.
child_questions: question: Why might the Navy be unable to determine certain needs?
answer: Without updating its manpower factors and requirements and identifying the personnel cost implications of fleet size increases, the Navy cannot articulate its resource needs to decision makers.