The naval shipyards are highly industrialized, large-scale operations that provide maintenance for ships and submarines. The naval shipyards are essential to national defense and fulfill the legal requirement for the Department of Defense to maintain a critical logistics capability that is government owned and operated to support an effective and timely response for mobilization, national defense contingency situations, and other emergency requirements. The naval shipyards were designed to build wind- and steam-powered ships, which reduces their efficiency in repairing today’s modern nuclear-powered ships. They range in age from 109 years to 250 years (see figure 1). The naval shipyards provide depot-level maintenance, which involves the most comprehensive and time-consuming maintenance work, including ship overhauls, alterations, refits, restorations, nuclear refuelings, and deactivations—activities crucial to supporting Navy readiness. This maintenance is performed during periods designated in the Navy’s Optimized Fleet Response Plan, a carefully orchestrated operational schedule of maintenance, training, and deployment periods for the entire fleet. It is designed to maximize the fleet’s operational availability to combatant commanders while ensuring adequate time for training and maintenance. We reported in 2016 that successful implementation of the Optimized Fleet Response Plan depends, in part, on the shipyards completing maintenance on time and that maintenance delays reduce the time that ships are available for training and operations. This means it is essential to the Navy’s ability to maintain readiness and support operational needs that the shipyards be as efficient as possible. Capital investment refers to expenditures for shipyard facilities and equipment, including the repair, construction, and maintenance of real property, among other activities. Capital investment projects at Navy facilities are funded primarily through Military Construction and Operation and Maintenance appropriations. Military Construction projects are construction, development, conversion, or extension projects of any kind, including repair work. Military Construction appropriations are used to fund projects costing more than $1 million, while Operation and Maintenance funds are used for projects costing less than $1 million. Special projects are restoration and modernization projects with funded costs exceeding $750,000 in which the portion of work that is classified as construction is under $1 million. Operation and Maintenance funds are used for special projects. Equipment projects are those associated with the installation of equipment in facilities. Where non-structural work—including the provision of the equipment—is required on real property, the project is financed with funds supporting the procurement of the equipment. Where structural changes are required, those costs are classified and funded as construction. The Navy acknowledges that there has been a history of under- investment in shipyard restoration and modernization needs. Recognizing this issue, Congress passed a law in fiscal year 2007 that requires the Secretary of the Navy to invest in the capital budgets of the Navy depots a total amount equal to not less than 6 percent of the average total combined maintenance, repair, and overhaul workload funded at all the Navy depots for the preceding three fiscal years. In fiscal year 2008, the Navy committed to increased capital investment to comply with the law and to improve the overall material condition of these facilities. In 2013, pursuant to a statutory mandate, the Navy developed a plan to improve its shipyard facilities and estimated that it would take 17 years (until fiscal year 2030) to resolve the backlog of maintenance and infrastructure repair that existed at the time. Since fiscal year 2007, total shipyard capital investment has increased by about 35 percent in inflation-adjusted 2016 dollars, as shown in figure 2. Capital investment at the shipyards has increased at a pace similar to that of overall shipyard funding, which has increased by about 34 percent over the same period, after adjusting for inflation. A number of Navy organizations have a role in determining the level of capital investment to be made in the shipyards (see figure 3). The Office of the Chief of Naval Operations (OPNAV) allocates the funding for overall capital investment in the shipyards. Naval Sea Systems Command (NAVSEA) determines which capital investment projects are most critical to enable the shipyards to continue operations. Those projects are planned by personnel from Naval Facilities Engineering Command (NAVFAC), using funds provided by the Commander, Navy Installations Command (CNIC). The projects then go through the Shore Mission Integration Group process, led by CNIC, where they compete against other Navy priorities for funding. The group reviews proposed shipyard projects to determine whether they are necessary and appropriate and then prioritizes them. After all the proposed projects have gone through this process, the result is a ranked list of approved projects; the Navy then allocates funds for those projects in priority order until it reaches the funding level set by OPNAV. Although the Navy has committed to increasing shipyard capital investment and implementing improvement plans, the physical condition of the shipyards’ facilities remains poor according to Navy data, and the cost to address restoration and modernization backlogs is increasing. For example, we estimate that it will take at least 19 years to clear the backlog (through fiscal year 2036), 6 years longer than the Navy estimated in 2013. Meanwhile, the shipyards’ drydocks also require restoration and modernization. The average age of capital equipment at the shipyards exceeds its expected useful life, and the overall condition of this equipment may be deteriorating. GAO’s analysis of data on Navy facilities found that the average rating for the overall condition of facilities at the Navy’s four shipyards remains poor. Specifically, the shipyards’ average condition rating—which measures the physical condition of a facility—has remained essentially flat and in the “poor” category, with an average rating of 71 in fiscal year 2013 and an average rating of 72 at the end of fiscal year 2016 on the 100 point scale used by the Navy (see figure 4). Moreover, in fiscal year 2016 the Navy rated about 25 percent of all shipyard facilities below 60, and therefore categorized them as being in failing condition. Furthermore, as of fiscal year 2016, the Navy categorized one in every five failing naval shipyard facilities as a facility that was critical to accomplishing the shipyard’s repair mission. Navy data also suggest that the shipyards may have about 1.2 million square feet of condemned, uninhabitable, or otherwise unusable facility space. According to Navy data, four dozen shipyard buildings across the four shipyards have been condemned or are unusable for ship repair activities, including some in prime waterfront locations that shipyard officials said could be used to improve the efficiency of ship repair processes. Navy shipyard officials noted that the shipyards were not designed for their current mission and that the layout, size of facilities, pier space, utilities, and safety systems contribute to reducing the efficiency of the shipyards for repair work. The Navy has reported that the inefficiencies of the current layout limit the yards’ abilities to improve their cost and schedule performance. For example, shipyard officials at Puget Sound stated that workers conducting ship repair work cannot traverse one shop building end-to-end without changing floors. The Navy has other measures it uses to assess facilities, in particular the facility configuration rating. This rating measures the facility’s suitability to function as intended or required for its mission. However, we did not assess the average configuration of the shipyard facilities, because the Navy had not resolved an issue concerning the reliability of the configuration data that we identified in 2011. Specifically, the configuration rating in the Navy’s database defaults to 100 when no rating has been entered into the system. Our analysis of the Navy’s fiscal year 2016 configuration data showed that 928 of 1300, or 71 percent, of the facilities had ratings of 100. Shipyard officials told us that most of these ratings were likely the result of a default rating and did not represent actual assessments. As we previously described, this use of a default rating creates a false result that suggests these facilities are perfectly configured, when in reality their status has not been assessed or recorded in the Navy’s database. This false result also has the effect of underestimating shipyard restoration and modernization costs, since the configuration ratings are used to inform these estimates. Given these concerns about the reliability of the configuration ratings, we did not determine trends in the average configuration of shipyard facilities since the Navy began implementing its 2013 facilities plan. We recommended in 2011 that the Navy develop a plan to ensure the accuracy of its condition and configuration data, but as of July 2017 the Navy’s plan had not corrected the issue with the configuration data. We believe our earlier recommendation remains valid. The shipyard facilities’ restoration and modernization backlog has continued to grow over the past 5 fiscal years. The Navy defines its restoration and modernization backlog as the estimated costs to restore facilities degraded by inadequate sustainment, excessive age, natural disaster, fire, or accident, among other things; to renovate or replace existing facilities to implement new or higher standards or accommodate new functions; or to replace building components that typically last more than 50 years. According to CNIC estimates, the funding required to eliminate the facilities restoration and modernization backlog at the four shipyards increased by 41 percent between fiscal year 2011 and fiscal year 2016, from a $3.45 billion backlog to a $4.86 billion backlog. For comparison, CNIC officials told us that the entire Navy facilities restoration and modernization backlog over the same period increased at a slower pace of about 14 percent, from a backlog of $37.45 billion in fiscal year 2011 to a backlog of $42.87 billion in fiscal year 2016. Given the current average funding levels for capital facilities that the shipyards have received from the Navy of approximately $260 million per year, we calculated that it would take the Navy at least 19 years (through fiscal year 2036) to eliminate the $4.86 billion backlog of facilities restoration and modernization that the shipyards faced at the end of fiscal year 2016. This contrasts with the estimated 17 years (through fiscal year 2030) that the Navy estimated it would take to eliminate the shipyards’ restoration and maintenance backlog at the time it published its shipyard improvement plan in 2013. Further, NAVSEA officials told us that addressing this restoration and modernization backlog does not build additional shipyard capacity and capability—it only allows the shipyards to remain at their present levels of capacity and capability. Any new or emergent mission requirements would further increase the time required to clear the shipyards’ facilities restoration and maintenance backlog, according to NAVSEA officials. We found that the shipyards’ drydocks have a number of unaddressed restoration and modernization needs. Maintenance personnel use drydocks to safely access the underside of ships and submarines, and drydocks are among the most critical facilities at the shipyards. The shipyards rely on 18 aged drydocks to perform maintenance on the Navy’s current fleet of aircraft carriers and submarines. Our analysis of Navy data shows that the average age of Navy drydocks is about 89 years. The oldest drydock in current use was completed in 1891 and the newest was completed in 1962. Aging drydocks pose risks to the shipyards’ ability to perform their depot repair mission uninterrupted and ultimately to the Navy’s ability to provide required aircraft carrier and submarine presence to combatant commanders. These risks result from flooding and seismic vulnerabilities and the potential for aging drydocks to deteriorate, among other things. Examples of key drydock shortcomings identified by the Navy include obsolescence, flooding vulnerabilities, and seismic vulnerabilities. Workarounds for Drydock Obsolescence Three of Puget Sound’s six drydocks and one of Norfolk’s five drydocks require the use of superflooding as a workaround to service the Navy’s current fleet of submarines. Superflooding forces water into the drydock to raise the water level higher than the tides to obtain the necessary clearance for the submarine to move into the dock. According to shipyard officials at Puget Sound, superflooding can result in the flooding of drydocks’ electrical and service galleries (shown below), which were not designed to be flooded and therefore have to be repaired because of rust and seawater corrosion. Drydock obsolescence. Several of the shipyards’ drydocks are not able to support existing submarine classes, including the Los Angeles-class attack submarine. Other drydocks can support vessels only when assisted by particular equipment or environmental conditions such as tidal schedules (see sidebar). Our analysis shows that as the Navy retires existing aircraft carriers and submarines and replaces them with newer classes, the shipyards will become increasingly constrained in scheduling and performing maintenance using their existing drydocks. Only 11 of the 18 drydocks in use are configured to perform maintenance on the newer ship and submarine classes being procured by the Navy, such as the larger Ford-class aircraft carrier and the Virginia-class submarine (see figure 5). According to a June 2017 draft drydock study from the Navy, without making new investments in drydocks, the shipyards will increasingly encounter scheduling delays waiting for access to the 11 drydocks that are configured for the newer classes. Additionally, Drydock 1 at Portsmouth Naval Shipyard and Drydock 3 at Pearl Harbor require buoyancy assistance equipment to provide additional lift to reduce the submarine’s waterborne draft to move it into the drydock. In its 2017 draft drydock study, the Navy reports that, without the use of buoyancy assistance equipment, these two drydocks could no longer dock any of the Navy’s current submarines. While this workaround allows the shipyards to repair some current classes of submarines, the Navy’s study says it will not be sufficient in the future for newer classes. Additionally, shipyard officials said that Drydock 3 at Puget Sound can move Los Angeles class submarines in or out only after they have had several tons of weight removed and only during a high tide. This drydock is primarily used for submarine reactor compartment disposal. Flooding vulnerabilities. Four of Norfolk’s 5 drydocks face flooding threats from extreme high tides and storm swells and average one major flooding event per year. According to officials, drydock flooding during certain delicate depot maintenance tasks risks personnel safety, catastrophic damage to the ships being repaired, and potential environmental impacts. For example, the Navy reported in 2009 that a drydock at Norfolk required emergency repairs to prevent flooding while the USS Tennessee (SSBN-734) was undergoing maintenance. According to a 2009 Navy incident report, several days of high tides and winds, coupled with multiple leaks in the drydock’s granite block joints, resulted in the drydock flooding at an estimated rate of 3,000 gallons per minute before workers could repair it. Seismic vulnerabilities. The Navy’s drydocks were not designed to accommodate the risks posed by seismic events. For example, at Puget Sound Naval Shipyard—located in an area identified by the U. S. Geological Survey as a “High Seismic Hazard Zone”—a 7.0 magnitude or greater earthquake could damage or ruin the only drydock on the west coast that is capable of performing maintenance on aircraft carriers. As recently as 2001, the Puget Sound region experienced a 6.8 magnitude earthquake. According to Navy documentation, shipyards’ capital equipment is aging beyond its expected service life and its overall condition appears to be deteriorating, negatively affecting ship and submarine repair work. Capital equipment includes items such as shipyard cranes, sheet metal rollers, plasma cutters, and furnaces. In September 2016, an internal NAVSEA analysis showed that the average age of capital equipment at the four shipyards had risen to 22 years, which is beyond the 15-year average expected useful life that the Navy has calculated for capital equipment. We also observed aging equipment at all four shipyards, including submarine shaft lathes at Puget Sound that had entered service in the 1930s and a plate roller at Portsmouth that was built in the 1950s. This equipment was still being used to support maintenance on modern nuclear submarines and at times has created impediments to efficiently and effectively completing repair work, according to shipyard officials. Equipment that is beyond its useful life can be inefficient and unreliable, affecting the shipyards’ ability to conduct repair work. Our analysis of data on the repair of Navy equipment found that the number of requests for repair of shipyard equipment is trending upward, from about 13,400 in fiscal year 2008 to about 17,100 in fiscal year 2016, an increase of about 28 percent. This indicates that the shipyards may be incurring costs— such as additional labor hours and repair materials—associated with aging equipment. Moreover, the actual need for repairs may be greater than the number of repair requests indicates, according to shipyard officials, because shop level employees are reluctant to submit repair requests when there is little hope of obtaining funding for a repair. Unreliable equipment can also result in increased costs and re-work. For example, after it was discovered in 2015 that the analog controls on a furnace used to heat-treat submarine parts to withstand deep sea pressure were reading inaccurately, Norfolk officials were required to re- inspect 10 years’ worth of parts made in that furnace to ensure that they met stringent submarine safety requirements. The shipyards’ capital facilities and equipment are not fully meeting the Navy’s operational needs, in part due to their condition. Maintenance delays partially attributable to inadequate facilities and equipment at the shipyards have led to thousands of lost operational days for submarines and aircraft carriers over the last 16 fiscal years. In addition, the Navy estimates that its future needs will be increasingly affected by the capacity and capability limitations of the drydocks, even without factoring in the increase in fleet size—18 additional attack submarines and 1 additional aircraft carrier—called for in the Navy’s 2016 Force Structure Assessment. We found that the naval shipyards are not fully meeting the Navy’s current operational needs, in part due to the condition of their facilities and equipment. The shipyards’ ability to meet operational needs is measured by their ability to complete maintenance on time and adhere to the maintenance schedule laid out in the Navy’s Optimized Fleet Response Plan. As we previously reported, completing ship and submarine maintenance on time is essential to the Navy’s readiness. Maintenance availabilities that last longer than planned reduce the number of days ships are available for training or operations. When ships stay in the shipyards longer than anticipated, it can lead to a negative cyclic effect that affects other vessels in the fleet (see figure 6). Our analysis shows that facilities and equipment in poor condition can contribute to maintenance delays. Navy shipyard officials noted that there are numerous reasons why the maintenance on ships may be delayed— factors such as parts shortages, labor difficulties, changes in the planned maintenance work, and weather—but agreed that the condition of facilities and equipment is one of those reasons. Our analysis of Navy data shows that, in fiscal years 2000 through 2016, the shipyards completed maintenance periods on schedule only 47 percent of the time for aircraft carriers and 24 percent of the time for submarines (see figure 7). These overruns in maintenance periods resulted in at least 1,300 lost operational days—days that a ship is not available for operations—for aircraft carriers and about 12,500 days for submarines during fiscal years 2000 through 2016 (see figure 7). Our analysis of Navy maintenance data shows that delays in maintenance periods that began in fiscal year 2015 caused more than a year’s worth of lost operational days for aircraft carriers—the equivalent of losing the use of an aircraft carrier for more than a year. In addition to hindering efficient ship repair, inadequate facilities cost the Navy in other ways. The Navy reports that it has purchased or rented a large number of temporary facilities at every shipyard to provide them enough space to complete their mission, and the need for such temporary facilities is growing, according to shipyard officials. In its 2013 facilities improvement plan, the Navy identified 650 temporary shipyard structures across the four shipyards, comprising 561,466 square feet. As recently as February of 2017, Puget Sound Naval Shipyard alone reported that it had over 224,000 square feet of relocatable facilities onsite, including approximately 300 temporary trailers. Some “temporary” facilities at the shipyards have been used for decades, and others are double stacked because of a lack of space (see figure 8 for an example). We observed at Pearl Harbor and Puget Sound that the piers used for repair work can also be crowded, and personnel told us that they leave equipment outside because there is no covered storage space available. For example, shipyard officials at Puget Sound told us they currently have a storage space deficit of approximately 400,000 square feet. They reported that, as a result, they store millions of dollars’ worth of equipment and material outside around the shipyard, sometimes uncovered and exposed to the elements. Shipyard officials said this can reduce the lifespan of the equipment, particularly when it is exposed to the saltwater air, which increases the rate of corrosion. According to a 2017 draft Navy study, the current capacity and capability of the shipyards’ drydocks will not support future operational needs. The Navy projects that the shipyards will be unable to support 73—or about one-third—of 218 maintenance periods planned for the shipyards over the next 23 years, including 5 aircraft carrier and 50 submarine maintenance periods. However, this estimate identifies only maintenance periods missed as a result of drydock capacity and capability issues for the planned fleet of 11 carriers and 70 submarines through fiscal year 2040. NAVSEA officials said that other factors that contribute to missed maintenance periods, such as shipyard workload, workforce, or requirements growth, were not accounted for in this estimate. In its 2017 draft drydock study, the Navy reports that it currently has very little drydock capacity to surge depot-level work or deal with national security contingencies or unanticipated accidents, such as the USS Greeneville’s (SSN-772) collision with a Japanese fishing ship. This is because of the high demand for drydock space, which leaves the Navy with little time between scheduled maintenance periods to do other work. In its 2016 Force Structure Assessment, the Navy released a new force structure goal that called for achieving and maintaining a fleet of 355 ships—up from the previous goal of 308 ships in its 2015 assessment and the current inventory of 276. This assessment calls for increasing the number of planned aircraft carriers from 11 to 12 and the number of attack submarines from 48 to 66 (a 38 percent increase). This proposed increase in fleet size will aggravate shortfalls in drydock capacity, since an increase in the number of ships will lead to an increase in the volume of maintenance the shipyards must perform. In its 2017 draft drydock study, the Navy identified several key drydock shortfalls that hinder the shipyards’ ability to support future operational needs, as previously discussed. For example, none of the existing drydocks can support repairs for the new Ford-class aircraft carrier as the drydocks are currently configured. Specifically, Drydock 8 at Norfolk Naval Shipyard and Drydock 6 at Puget Sound Naval Shipyard—the two drydocks currently capable of supporting existing Nimitz-class aircraft carriers—require upgrades in salt water cooling utilities to support maintenance on the new Ford-class aircraft carriers, because the Ford- class carriers are larger and have different equipment. The Navy has plans to begin addressing this issue at Norfolk in fiscal year 2022 and at Puget Sound in fiscal year 2023. Navy officials told us that the Navy has not yet defined its needs for drydocks capable of supporting Ford-class aircraft carriers, but it will need at least one on each coast. Newer versions of the Virginia-class submarines will limit the number of drydocks able to perform maintenance in the future, thereby reducing the capacity available to the fleet. According to the 2017 draft Navy analysis, 17 of the shipyards’ 18 existing drydocks can support maintenance on the current Los Angeles-class attack submarine, and 14 of the 18 can accommodate the current versions of the Virginia-class attack submarine. However, only 11 of the 18 drydocks, in their current state, will be able to accommodate future versions of the Virginia-class submarine with the Virginia Payload Module because of its increased length and loading size. This drydock shortfall caused by the addition of this module is exacerbated at Pearl Harbor Naval Shipyard, where there is a drydock that can be divided in two to support simultaneous maintenance of either two Los Angeles-class or two current Virginia-class submarines. Future Virginia-class submarines with the module are so long that they require the full length of the drydock, thereby reducing the space available for maintenance at Pearl Harbor. Shipyard officials noted that this capability is regularly used to respond to immediate, short-term notice events, such as ships in need of emergency repairs. Though the Navy has developed detailed plans for capital investment in facilities and equipment at the shipyards that attempt to prioritize their investment strategies, this approach does not fully address the shipyards’ challenges, in part because the plans are missing key elements. Specifically, the Navy’s plans are missing capital investment goals that would help guide long-term planning, an accounting of all relevant costs, metrics that would allow an assessment of the effectiveness of capital investment spending, and regular management reviews to assess progress. Our previous work has shown that a comprehensive, results- oriented management approach that includes these elements can help organizations remain operationally effective, efficient, and capable of meeting future requirements. DOD has previously used approaches of this kind to address complex, long-standing management challenges, and the Navy’s plans have already incorporated some elements of this approach, such as a well-defined mission statement and a detailed discussion of the issues the plans are intended to address. However, without adopting a management approach for its capital investment needs that includes key results-oriented elements, the Navy risks continued deterioration at its shipyards, hindering its ability to efficiently and effectively support Navy readiness over the long term. Over the last several years, the Navy has developed three capital investment plans intended to help improve the state of the facilities and equipment at the shipyards. In 2013, the Navy released a plan to guide its capital investment for shipyard facilities. The plan discusses eliminating the restoration and modernization backlog of facilities projects and centralizing maintenance operations, among other things. Similarly, the Navy issued a plan to guide its investment in capital equipment in 2015. This plan was intended to identify and address all capital equipment needs. Finally, the Navy is currently working on a draft drydock plan that is intended to help prioritize the drydocks projects the Navy feels are necessary to meet upcoming scheduling challenges. That plan is still in draft form, though officials have told us that they expect it to be released this year. Though the Navy’s capital investment approach has resulted in the development of three capital investment plans, those plans are missing key elements, including the development of analytically-based goals that would help guide long-term planning, a full identification of the shipyards’ resource needs, metrics that would allow the Navy to assess the effectiveness of its capital investment spending in supporting the ability of the shipyards to meet operational needs, regular management reviews of progress, and reporting on progress to key Navy decision makers and Congress. Without incorporating these key results-oriented elements into their approach, the Navy may not be able to address the shipyards’ challenges, namely their poor condition, aging equipment, and mounting facility maintenance backlogs. The Navy’s capital investment plans for shipyard facilities and equipment do not include analytically-based results-oriented goals sufficient to support long-term planning. For example, the 2013 facilities improvement plan stated that it was designed to bring the condition of shipyard facilities up to an average condition rating of 75, to match the average Navy condition rating for facilities. However, the Navy chose this goal based on budget expectations rather than an engineering or operational analysis to determine the condition and configuration the shipyards needed to efficiently and effectively address current and future operational needs. Navy officials also told us that there are no Navy or DOD criteria for determining what constitutes effective and efficient shipyard facilities, although such criteria are available for more typical installation facilities, such as barracks or dining facilities. The Navy’s 2015 capital investment plan for equipment identified a desired outcome—to address “all” shipyard equipment requirements—but this desired outcome was not based on an analysis of what the shipyards needed to support the Navy’s operational goals. Navy officials stated that the goal of the plan was to reduce the average age of capital equipment by replacing older equipment with newer, modern versions. Over time, this would reduce the average age of capital equipment to better reflect the average expected service life of about 15 years. However, this goal was not provided in the plan, and there was no mention of alternate methods of assessing equipment condition to determine when it would require replacement. Similar to the 2013 facilities plan, the 2015 equipment plan focuses on financial inputs necessary to achieve improvements, instead of relying on an analytically-based objective, and does not specify when the objective of the plan will be fulfilled. We found no analytical basis to suggest that attaining the goals in the 2013 facilities plan and the 2015 equipment plan would allow the shipyards to efficiently and effectively support current or future operational needs. A results-oriented management approach calls for goals in order for the organization and any additional stakeholders to know what end-state they are trying to reach. These goals also inform other elements, such as the development of metrics to assess progress and the identification of necessary resources. Shipyard officials told us that the plans in place could be characterized as lists of projects desired, rather than effective end-state goals. In a results-oriented management approach, identifying a specific analytically-based goal or end state is essential for accurately determining the costs of achieving that goal, because different end-states could require different shipyard configurations—which in turn would require different facilities and equipment. These differing end states would also likely require different funding levels and timelines. According to the Navy, completing the projects identified to date would allow it to maintain current shipyard capabilities in a steady state. However, completion of these projects would not add to existing shipyard capacity or capability, aside from improvements identified as needed to accommodate new hull types in drydocks. Absent analytically-based goals defining the desired end state, there is no support that the current plan goals will efficiently and effectively meet the Navy’s operational needs. The Navy has not fully identified the resources necessary to achieve even the desired results expressed in its 2013 facilities plan and 2015 equipment plan. The Navy estimated funding needs for shipyard facilities, equipment, and drydocks in its 2013 facility plan, its 2015 equipment plan, and its 2017 draft drydock study. Altogether, these plans estimate that the Navy will need a total of at least $9.0 billion over the next 12 years—fiscal years 2018 through 2029—to improve the average condition of its shipyard facilities, address drydock needs, and begin to recapitalize its equipment (see figure 9). However, as we have discussed, these estimates are not derived from an analysis of what the shipyards require to efficiently and effectively meet current and future operational needs. We also found that the Navy’s estimates of its shipyard capital investment needs do not account for several potentially costly items, including planning costs and utilities modernization. In addition, the limited resources devoted to planning for shipyard improvements, combined with the generally poor condition and historic status of the shipyards, mean that even the existing estimates may be under stated. Identifying the necessary resources is essential in order to acquire and prioritize the use of those resources. Without identifying the full resources required to address the shipyard’s relevant needs and reach analytically-based goals, decision makers will lack the information needed to support deliberations and determine an appropriate level of resources to allocate to the naval shipyards. The Navy has estimated $3.6 billion in funding needs, or an average of $304 million per year, to address shipyard facility needs and bring shipyard facilities up to an average condition rating of 75, which is still considered “poor.” This amount exceeds the shipyards’ average yearly allotment for facilities of about $260 million by $44 million (a 17 percent increase). The Navy also estimates that it will need $2.0 billion over the next 12 years (or an average of $167 million per year) for capital equipment. This exceeds the average yearly capital equipment funding of about $50 million by about $117 million (a 234 percent increase). Finally, the Navy has estimated $3.4 billion in needs over the next 12 years ($4.1 billion total over 15 fiscal years) to begin mitigating its drydock shortfalls, but the amounts needed per year vary because of the need to accommodate ship maintenance schedules and complete large amounts of work in specific fiscal years. However, these estimates may under state some potentially costly elements. Planning costs have not been fully identified: The Navy has accounted for planning costs for some of its largest projects—those involving its drydocks—but has not calculated similar costs for the remainder of its future capital investment needs. According to Navy officials, in-depth planning and engineering are required to repair and modernize industrial facilities while allowing ongoing shipyard operations to proceed, ensuring that adequate preparations are made to support facility improvements and that the necessary utilities are in place, addressing potential historic or regulatory considerations, and ensuring that the location can support the project. The Navy projects that the planning costs associated with its drydock improvements will be at least $284 million over the 12 years—roughly 8 percent of the total project costs—although shipyard officials have noted that planning costs can easily exceed 10 percent of a project’s total cost. This suggests that the planning costs for the $3.6 billion in facilities projects identified by the Navy could increase the total cost of these projects by several hundred million dollars. Utilities modernization costs have not been not fully identified: NAVFAC has identified about $190 million in additional utilities projects through fiscal year 2023 that are not already in one of the other Navy plans, but it has not identified the improvements needed beyond fiscal year 2023. The Navy’s 2013 plan did not include the cost of modernizing utilities, though it noted that efforts were under way to develop cost estimates for their recapitalization. The Navy previously reported in its 2013 facilities plan that shipyards experienced unscheduled utility outages that can disrupt maintenance schedules and lead to increased fuel and labor costs. Navy officials acknowledge the ongoing need to modernize utilities and other wired systems at the shipyards. For example, the fire alarm systems at the shipyards continue to rely on the same bare-wire telegraph technology that was used in the 1800’s and early 1900’s, which is easily damaged and regularly elicits false alarms. However, according to officials, they have not determined the full amount of investment that would be required to modernize utilities at the shipyards to provide a stable electrical supply at the proper voltages with fewer unplanned outages. Regulatory compliance costs may be under stated: Shipyard facilities are subject to a variety of regulatory requirements, stemming from both DOD and statutory sources. Like other military installations, shipyards must comply with anti-terrorism, force protection, seismic, and building code requirements. However, given the limited resources devoted to planning, current plans to improve shipyard facilities, equipment, and drydocks do not address the effect of some of these statutory and regulatory requirements. Anti-terror and force protection, seismic, building codes, and other requirements to improve the health and safety of shipyard personnel can increase the amount of funding required to complete capital investment projects, particularly when compliance efforts overlap. For example, DOD regulations require that when the cost of a project reaches 30 percent of the replacement value of the facility, seismic assessments must be conducted, and if a project’s cost exceeds 50 percent of the facility’s replacement value, anti-terror and force protection measures must be included in the project. According to shipyard officials, the DOD requirements that must be met after a project exceeds the 30 percent threshold are sometimes costly enough to make it exceed the 50 percent threshold, and the results of overlapping requirements can be difficult to predict. This can result in the cost of relatively simple projects increasing significantly, as indicated by the example in figure 10, illustrating an actual project at Norfolk Naval Shipyard developed between fiscal years 2010 and 2015. Building 30 at Norfolk Naval Shipyard is used for engineering, and is over 120 years old. The costs to bring it up to modern building code were significant. This example may not be representative of the potential growth of project costs, but the age of shipyard facilities, the extent of historic designations, and the Navy’s acknowledged history of under investment at the shipyards highlight the potential for other shipyard facilities to encounter similar issues. This suggests that the Navy’s estimated restoration and modernization backlog of $4.86 billion may actually be under stated. Historic preservation costs may be under stated: Our analysis and Navy documents show that dealing with historic facilities also adds cost and complexity to planning for their restoration. The preservation, restoration, or demolition of historic buildings requires additional time and cost to plan, gain necessary approvals, and execute. In its 2013 facility plan, the Navy reported that approximately 70 percent of the shipyard infrastructure was designated as historic; all four shipyards have historic facilities, some because of the age of the facilities and some because of events that took place there. For example, the attack on Pearl Harbor during World War II has resulted in the designation of approximately 3 million square feet of its facilities as historic; this means that the footprint of the historic part of the shipyard exceeds that of its non-historic facilities. Shipyard officials told us that there are several facilities that might be used to more effectively support shipyard operations but that either they cannot be altered because they have been designated as historic or that alterations would require lengthy negotiations over the facilities’ historic designation. For example, officials at Pearl Harbor Naval Shipyard discussed a number of modernization efforts that might be undertaken to improve Navy capabilities in the Pacific but that cannot be completed because the facilities have been designated as historic. The Navy lacks metrics that would help determine the effectiveness of its capital investment plans to help guide long-term planning. With a comprehensive, results-oriented management approach, relevant metrics allow an organization to assess whether it is making progress toward meeting its goals. Our previous work has shown that a suite of metrics can help organizations to assess complicated issues, where one metric may be insufficient or may not capture all relevant information. Our work shows that the Navy tracks the performance of its shipyards in completing ship maintenance on budget and on time but not how facilities and equipment are supporting the shipyards’ performance. Specifically, we found that the shipyards’ primary performance metrics are tied to ship maintenance—for example, how quickly a ship is repaired, how much overtime is used, and cost and schedule overruns—and do not provide a sufficient basis for measuring the effect of capital investments on shipyard performance. The Navy also collects data on its facilities, including the aforementioned configuration and condition assessments, along with data on repairs, utilities outages, and maintenance response times. However, this information is not used to assess the efficacy of the capital investment program. For example, according to NAVSEA officials, the Navy does not monitor when facility or equipment issues contribute to schedule delays or increase maintenance costs (such as when equipment failures prevent work) or the costs associated with deferring investment (e.g., foregone efficiencies, costs to repair obsolete equipment, costs of workarounds, or temporary facility costs). However, we found that deferring investment can lead to decreased efficiency in other areas. For example, our analysis of equipment repair data found that equipment repair requests have been increasing and that this increase could reflect the effect of deferred maintenance. Alternatively, investments in modern equipment or facilities can increase efficiency, reduce costs, and improve morale (see sidebar). Until the Navy establishes appropriate metrics and other measures of progress for the shipyards, it will not know if it is reaching its previously developed goals. We found that the Navy does not conduct regular management reviews of activities and metrics that would measure progress toward meeting the goals of its various capital investment plans and encourage accountability and coordination among the stakeholders involved in planning for these capital investments. The Navy conducts annual assessments of capital investment projects as part of its normal budgeting and prioritization processes. However, officials state that they do not regularly review the implementation status of the 2013 facilities plan or the 2015 equipment plan. NAVSEA is responsible for identifying and prioritizing capital investment projects and overseeing the implementation of the 2013 facilities plan. However, according to NAVSEA officials, there is no formal requirement or system to actively manage the implementation of the 2013 facilities plan or to coordinate with shipyard stakeholders such as CNIC or NAVFAC. Officials state that they coordinate with stakeholders as necessary when projects associated with the capital investment plans experience problems but do not report to higher-level Navy decision makers and Congress on the progress in achieving specific objectives in capital investment plans, such as reducing the facilities restoration and modernization backlog, improving the condition and configuration of the shipyards, recapitalizing capital equipment, and reducing the effect that unimproved facilities and equipment have on maintenance delays. Progress is assessed annually during the programming and budgeting process, with emphasis on ensuring that the Navy meets its minimum capital investment requirements (the “6 Percent Rule”) under 10 U.S.C. § 2476. According to officials, lack of coordination between the shipyards and local NAVFAC personnel also can delay equipment upgrades if the utilities or facilities infrastructure fails to support the equipment (e.g., if equipment requires reinforced flooring or increased electrical supply). Some of the equipment being installed at shipyards can require extensive modifications to the facilities. For example, we observed a foundation being prepared for a new piece of equipment at Norfolk Naval Shipyard, shown in figure 11. We have found that, with a results-oriented management approach, regular management review allows an organization to assess progress by reviewing metrics, ensure that all stakeholders are working together effectively, and respond to implementation challenges. Given the need to coordinate stakeholders such as NAVSEA, CNIC, NAVFAC, Navy Regional Installation Commanders, utility providers, State Historic Preservation Offices, regulatory entities, and Navy leadership, regular management reviews of activities and metrics could help the Navy to measure progress toward attaining its capital investment goals for the shipyards. In addition, the Navy does not regularly provide information to its key DOD decision makers or to Congress on the progress it is making to reduce its facilities restoration and modernization backlog, improve the condition and configuration of the shipyards, recapitalize its capital equipment or reduce the effect that the condition of facilities and equipment have on maintenance delays. It is also not providing information on the challenges that prevent the shipyards from making such progress. Standards for Internal Control in the Federal Government notes that management should communicate quality information to external parties to help the agency achieve its goals and address risk. As a result, key decision makers and Congress lack the information they would need to assess the effectiveness of the Navy’s capital investment program at the shipyards. Regular management review and reporting on progress to decision makers is critical to ensure that all stakeholders are represented and held accountable for results, and that opportunities for adjustment are identified and used. Over the last few months, Navy officials and Congress have both taken steps to help address some of the problems outlined in this report. For example, Navy officials have said that they are beginning a more comprehensive review of the shipyards that will involve, among other things, improving cooperation among various stakeholders, developing capital investment metrics that are tied to shipyard performance, and changing the expectations around capital investment. However, this process is still in a very early stage and its timeframes are not yet developed. Until the Navy develops an approach that addresses these missing elements, the result will be a continuation of the same processes that have led the shipyards to their current state, which have already proved to be inadequate. To help address the naval shipyards’ capital investment challenges, House Report 115-200 accompanying a bill for the Fiscal Year 2018 National Defense Authorization Act directed the Secretary of the Navy to provide a report to the congressional defense committees, by March 1, 2018, on a comprehensive plan to address shortfalls in the public shipyard enterprise. Specifically, the House Report directs the Navy to, among other things, identify current infrastructure deficiencies at U.S. naval shipyards and prepare a detailed master plan for each shipyard that includes a list of specific infrastructure projects, scope of work, cost estimates, and schedule associated with the current and 30-year force structure projections. The Secretary of the Navy is also directed to identify the additional funding and any legislative authority needed to achieve an end state, as quickly as practicable, of the elimination of all ship maintenance backlogs and a return to predictable, sustainable, and affordable ship maintenance availabilities, including for the anticipated growth in Navy force structure. The shipyards are critical to maintaining the Navy’s readiness, but they are struggling to meet the Navy’s current needs with inadequate facilities, aging equipment, poorly configured drydocks, a growing restoration and modernization backlog, and an incomplete management approach for addressing these issues. The Navy recognizes these challenges, but to date the plans it has developed to address them have failed to gain ground against the poor condition of the facilities or the backlog of restoration and modernization needs. Continuing the current approach to capital investment seems unlikely to address the Navy’s struggles with lost operational days and drydock availability. Without the key characteristics of a results-oriented management approach for guiding, measuring, and tracking the progress of its capital investment program, the Navy cannot be certain that its capital investment efforts are providing the facilities and equipment needed to support the nuclear depot repair mission or that it is providing Congress with adequate information on which to base decisions about appropriations. The lack of a results- oriented management approach could lead to ineffective investment, resulting in missed opportunities for improvement that could affect shipyard cost and schedule performance. Further, if the shipyards are unable to maintain their facilities and equipment, they risk not being able to support Navy readiness over the long term. Because the shipyards are essential to maintaining readiness for the fleet of U.S. aircraft carriers and submarines and providing emergent repairs on an as-needed basis, ineffective management of capital investment in the shipyards can put Navy readiness at risk. On July 6, 2017, the House Armed Services Committee released report 115-200 accompanying a bill for the National Defense Authorization Act for Fiscal Year 2018. The committee’s report directs the Secretary of the Navy to report to congressional defense committees on a comprehensive plan to address shortfalls in the public shipyards. Identified elements to be included in the plan include aspects of a results-oriented management approach—namely a comprehensive plan to address shortfalls in the public shipyard enterprise, end-state goals for the shipyards, and the funding needed to achieve this end-state—that we’ve identified as missing from the shipyard development plans we analyzed. We believe, however, that the Navy’s implementation of the House direction could be further strengthened. The Navy’s prior planning efforts have not fully established metrics for assessing progress, held regular management reviews with all relevant stakeholders to oversee the plans’ implementation and coordinate efforts, or reported on progress to key decision makers and Congress to inform resource decisions and provide accountability. Without fully incorporating these key elements, the Navy will not be positioned to guide the continued improvement of the condition and ability of the shipyards to meet the operational needs of the Navy. We are making the following three recommendations to the Navy. The Secretary of the Navy should do the following: Develop a comprehensive plan for shipyard capital investment that establishes the desired goal for the shipyards’ condition and capabilities; an estimate of the full costs to implement the plan, addressing all relevant requirements, external risk factors, and associated planning costs; and metrics for assessing progress toward meeting the goal that include measuring the effectiveness of capital investments. (Recommendation 1) Conduct regular management reviews that include all relevant stakeholders to oversee implementation of the plan, review metrics, assess the progress made toward the goal, and make adjustments, as necessary, to ensure that the goal is attained. (Recommendation 2) Provide regular reporting to key decision makers and Congress on the progress the shipyards are making to meet the goal of the comprehensive plan, along with any challenges that hinder that progress, such as cost. This may include reporting on progress to reduce their facilities restoration and modernization backlogs, improve the condition and configuration of the shipyards, and recapitalize capital equipment. (Recommendation 3) We provided a draft of this report to DOD for review and comment. In written comments on behalf of DOD provided by the Navy (reproduced in appendix III), DOD concurred with our recommendations and noted planned actions to address each recommendation. The Navy also provided technical comments, which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretary of Defense, 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 questions about this report, please contact me at merrittz@gao.gov or (202) 512-5257. GAO staff who made key contributions to this report are listed in appendix IV. Prior to 1998, the Navy used two different funding mechanisms to fund its maintenance activities, depending on the level of maintenance a ship was receiving. The shipyards, which provided depot-level maintenance, were managed through a working capital fund. The working capital fund relied on payments from Navy forces—such as a ship—for services at a shipyard. This funding approach was intended to (1) generate sufficient resources to cover the full costs of the shipyards’ operations and (2) operate on a break-even basis over time—that is, neither make a gain nor incur a loss. The Department of Defense (DOD) directed Navy funds to the Navy forces seeking the repairs, and those forces acted as customers and paid for the maintenance they received from the shipyards (see figure 12). The Navy’s intermediate maintenance facilities, which provided intermediate-level maintenance, were funded via direct funding. Under the direct funding mechanism, the Navy allotted a portion of the money appropriated to it by Congress to fund the shipyards (see figure 12). In 1997, the Navy began to integrate its intermediate maintenance facilities with its shipyards in an attempt to improve workforce flexibility and reduce maintenance infrastructure. To achieve this, the Navy decided to standardize the funding mechanism. The Navy moved the shipyards to a direct funding mechanism, in part because the shipyard’s largest customer—the Pacific Fleet—was already funded in that manner and Navy officials believed that adopting a direct funding approach for shipyard maintenance would be simpler than changing the Fleet’s funding mechanism. Pearl Harbor Naval Shipyard shifted from working capital funding to direct funding on October 1, 1998 as a pilot program. The Navy conducted this pilot for two years and concluded that shipyard metrics generally either improved or stayed the same over that time. As a result, Puget Sound Naval Shipyard followed and changed funding mechanisms on October 1, 2003. Congress briefly paused the funding transition process for the East Coast shipyards in order to have the Navy provide a report on the effectiveness of the transition at Puget Sound. After the Navy submitted its report, the transition continued, and Portsmouth Naval Shipyard and Norfolk Naval Shipyard transitioned to the direct funding mechanism on October 1, 2006, the earliest transition date that Congress had allowed. In previous reports, both we and the Congressional Budget Office noted that there were potential advantages and disadvantages to both funding mechanisms. However, we did not suggest that the Navy should prefer one method over the other; rather, we recommended that the Navy take steps to ensure financial transparency at the shipyards after the transition to direct funding. Since the two remaining shipyards transitioned to a direct funding mechanism at the beginning of fiscal year 2007, capital investment at the shipyards has been higher than the 6 percent minimum mandated by Congress and has increased at about the same pace as overall shipyard funding. Shipyard officials have not identified any persistent problems as a result of the funding transition and were generally unable to identify any potential benefits of returning to a working capital fund mechanism. Between fiscal year 2007—the first year that all shipyards were completely supported by direct funding—and fiscal year 2017, total shipyard spending has increased by about 34 percent, in fiscal year 2016 constant dollars (see figure 13). Over that same time period, capital investment at the shipyards, in fiscal year 2016 constant dollars, has increased at about the same rate—35 percent—and has remained over the 6 percent minimum mandated by Congress (see figure 14). Navy officials at all four shipyards stated that they had not identified any significant concerns about the change from working capital to direct funding. For example, although the CBO report suggested that financial accountability might decrease under a direct funding mechanism, officials stated that working within the annual allotment of appropriated funds—as opposed to a constantly replenishing working capital fund—has forced shipyard officials to pay greater attention to costs than they had previously. In addition, officials at all four shipyards stated that after the initial transition was complete, the change in funding mechanisms had little effect on either the quality or the cost of the work being performed. Officials also noted that, under each funding mechanism, there are reasons that capital investment may remain relatively low. Shipyard capital investment (not including military construction) under the working capital mechanism was previously re-captured by the shipyards in the form of increased labor costs. They stated that, as a result, there was an incentive to keep capital investment low, so that the fleet would not defer maintenance and repair work in response to higher daily rates for labor. Under the direct funding mechanism, shipyard capital investment must compete with other projects Navy wide, which may also result in restraining investment. There are four Navy-operated shipyards: Norfolk Naval Shipyard, Portsmouth Naval Shipyard, Puget Sound Naval Shipyard and Intermediate Maintenance Facility, and Pearl Harbor Naval Shipyard and Intermediate Maintenance Facility. This appendix provides detailed information about each of these shipyards’ missions, issues, maintenance timeliness, facilities condition, capital investment, and facilities restoration and modernization backlog. In addition to the individual named above, key contributors to this report were Suzanne Wren (Assistant Director); Pat Donahue; Steve Donahue; Jaci Evans; James Lackey; Joanne Landesman; Amie Lesser; Felicia Lopez; Marc Molino; Leah Nash; Carol Petersen; Cody Raysinger; and John E. “Jet” Trubey. Agency Performance Plans: Examples of Practices That Can Improve Usefulness to Decisionmakers, GAO/GGD/AIMD-99-69 (Washington, D.C.: Feb. 26, 1999). Managing For Results: Enhancing Agency Use of Performance Information for Management Decision Making, GAO-05-927 (Washington, D.C.: Sept. 9, 2005). Depot Maintenance: Improvements Needed to Achieve Benefits from Consolidations and Funding Changes at Naval Shipyards, GAO-06-989 (Washington, D.C.: September 14, 2006). Results-Oriented Management: Strengthening Key Practices at FEMA and Interior Could Promote Greater Use of Performance Information, GAO-09-676 (Washington, D.C.: Aug. 17, 2009). Defense Infrastructure: Actions Needed to Improve the Navy’s Processes for Managing Public Shipyards’ Restoration and Modernization Needs, GAO-11-7 (Washington, D.C.: November 16, 2010). DOD’s 2010 Comprehensive Inventory Management Improvement Plan Addressed Statutory Requirements, But Faces Implementation Challenges, GAO-11-240R (Washington, D.C.: January 7, 2011). Managing For Results: Data-Driven Performance Reviews Show Promise But Agencies Should Explore How to Involve Other Relevant Agencies, GAO-13-228 (Washington, D.C.: Feb. 27, 2013). Standards for Internal Control in the Federal Government, GAO-14-704G. (Washington, D.C.: September 2014). Military Readiness: Progress and Challenges in Implementing the Navy’s Optimized Fleet Response Plan, GAO-16-466R (Washington, D.C.: May 2, 2016). Military Readiness: DOD’s Readiness Rebuilding Efforts May Be at Risk without a Comprehensive Plan, GAO-16-841 (Washington, D.C.: September 7, 2016). Department of Defense: Actions to Address Five Key Mission Challenges, GAO-17-369 (Washington, D.C.: June 15, 2017).

Summary: The Navy's four public shipyards—Norfolk Naval Shipyard, Portsmouth Naval Shipyard, Puget Sound Naval Shipyard and Intermediate Maintenance Facility, and Pearl Harbor Naval Shipyard and Intermediate Maintenance Facility—are critical to maintaining fleet readiness and supporting ongoing operations involving the Navy's nuclear-powered aircraft carriers and submarines. The condition of these facilities affects the readiness of the aircraft carrier and submarine fleets. Senate Report 114-255, accompanying a bill for the National Defense Authorization Act for Fiscal Year 2017, included a provision for GAO to examine the capital investment in and performance of the Navy's shipyards. GAO evaluated (1) the state of the naval shipyards' capital facilities and equipment, (2) the extent to which shipyard capital facilities and equipment support the Navy's operational needs, and (3) the extent to which the Navy's capital investment plans for facilities and equipment are addressing shipyard challenges. GAO reviewed data from fiscal years 2000 through 2016 on shipyard capital investment and performance and the age and condition of facilities and equipment; reviewed Navy guidance; visited the shipyards; and interviewed Navy and shipyard officials. Although the Navy committed to increased capital investment and developed an improvement plan in 2013, the shipyards' facilities and equipment remain in poor condition. GAO's analysis of Navy shipyard facilities data found that their overall physical condition remains poor. Navy data show that the cost of backlogged restoration and maintenance projects at the shipyards has grown by 41 percent over five years, to a Navy-estimated $4.86 billion, and will take at least 19 years (through fiscal year 2036) to clear. Similarly, a Navy analysis shows that the average age of shipyard capital equipment now exceeds its expected useful life. Partly as a result of their poor condition, the shipyards have not been fully meeting the Navy's operational needs. In fiscal years 2000 through 2016, inadequate facilities and equipment led to maintenance delays that contributed in part to more than 1,300 lost operational days—days when ships were unavailable for operations—for aircraft carriers and 12,500 lost operational days for submarines (see figure). The Navy estimates that it will be unable to conduct 73 of 218 maintenance periods over the next 23 fiscal years due to insufficient capacity and other deficiencies. Though the Navy has developed detailed plans for capital investment in facilities and equipment at the shipyards that attempt to prioritize their investment strategies, this approach does not fully address the shipyards' challenges, in part because the plans are missing key elements. Missing elements include analytically-based goals and metrics, a full identification of the shipyards' resource needs, regular management reviews of progress, and reporting on progress to key decision makers and Congress. For example, the Navy estimates that it will need at least $9.0 billion in capital investment over the next 12 fiscal years, but this estimate does not account for all expected costs, such as those for planning and modernizing the shipyards' utility infrastructure. Unless it adopts a comprehensive, results-oriented approach to addressing its capital investment needs, the Navy risks continued deterioration of its shipyards, hindering its ability to efficiently and effectively support Navy readiness over the long term.T GAO recommends that the Navy develop a comprehensive plan to guide shipyard capital investment, conduct regular management reviews, and report to Congress on progress in addressing the shipyards' needs. DOD concurred with all 3 recommendations.