The Ready Reserve Force (RRF) is a government-owned, inactive fleet of former commercial ships of various configurations and capabilities that should be ready to sail within 4, 5, 10, or 20 days in response to national emergency sealift requirements. The RRF was organized in 1976 with 30 ships drawn from the 360 ships in the National Defense Reserve Fleet, which was created in 1946 to be able to respond to national emergencies.During fiscal year 1994, the RRF consisted of 108 ships. The fleet is expected to increase to 142 ships by 1999 in accordance with the Department of Defense’s (DOD) Mobility Requirements Study and defense plans. The Department of Transportation, through the Maritime Administration (MarAd), manages and maintains RRF ships, and DOD directs and controls operations once the ships have been activated. The Military Sealift Command, under the Transportation Command, carries out DOD’s oversight and operational control responsibilities. RRF ships are berthed at Reserve Fleet sites located in James River, Virginia; Beaumont, Texas; Suisun Bay, California; and other locations in the United States and overseas. MarAd contracts with ship managers, who are responsible for activating, maintaining, crewing, operating, and deactivating the ships as directed. The American Bureau of Shipping and the U.S. Coast Guard conduct periodic limited inspections of the ships for compliance with marine safety regulations. The ship managers are required to ensure that the ships are fully operational once MarAd notifies them to activate the ships. The Military Sealift Command designates a ship as being fully operational when, among other things, a complete crew has been provided, all required regulatory certificates have been obtained, and sea trials have been performed. Of the 96 ships that were in the RRF in August 1990, 78 were called upon to support the Persian Gulf War. This was the first large-scale activation and employment of the RRF since it was separated from the National Defense Reserve Fleet. These ships transported nearly one-fifth of the dry cargo deployed. However, ship activations were not as timely as planned—only 25 percent of the activated ships met their assigned readiness goals. Although insufficient fiscal year 1990 maintenance funding has been cited as a major reason for many late activations, a Department of Transportation Inspector General report attributed ships’ mechanical and crewing problems as the primary reasons the RRF ships were not able to meet specified activation times. Mechanical problems were attributed to (1) the poor condition of the ships when they were purchased for the RRF, (2) the age of the ships’ equipment, (3) improper steps taken to deactivate the ships, (4) the ships’ lack of use, (5) shipyard repairs and upgrades not being tested upon completion, and (6) uncorrected deficiencies identified during the periodic Coast Guard inspections and during specified fleet maintenance procedures. The Transportation Inspector General reported that 45 of the 79 ships activated for the Persian Gulf War had not been operated since their acquisition and acceptance into the RRF. The Transportation Inspector General also reported that mariners must be onboard the activating ships at specified times and should be knowledgeable of the ships and their operating systems. They are responsible for testing and operating all components and systems required to make the ships operational. Crewing problems during the war were caused by crew members that arrived late, lacked knowledge of the specific ship and operating systems, or had to be replaced because of crew turnover. The Chairman, Subcommittee on Readiness, House Committee on Armed Services, asked us to evaluate whether RRF ships would be ready within specified time frames in the event of a large-scale contingency. Specifically, we determined whether (1) the changes implemented to address problems encountered during war activations have improved the ships’ overall readiness, (2) the readiness level of the highest priority ships exceeds that of other strategic mobility components, and (3) a further decline in the number of available U.S. merchant mariners would have a long-term effect on crewing the force. To determine whether the overall readiness of the RRF had improved since the Persian Gulf War, we compared selected ships’ 1990 and 1993 activation performance. The selected ships included those activated in 1993 for purposes other than testing post-war repairs. We reviewed MarAd, Military Sealift Command, Coast Guard, and American Bureau of Shipping records, as well as related external studies, to determine the length of activation, significant machinery failures, and costs. We identified and reviewed program modifications initiated since the war. We visited ships on the East, Gulf, and West Coasts; interviewed officials from the Military Sealift Command, the U.S. Coast Guard, the American Bureau of Shipping, MarAd, the Merchant Marine Academy, and unions, as well as RRF crew members and ship managers; and reviewed studies and documents to assess the relative benefits of these program changes. We examined the status and effect of post-war repair expenditures, changes in MarAd’s policies for maintaining and preserving the ships, changes to MarAd’s contractual agreement with ship manager companies, and new automated maintenance management systems. We also assessed MarAd’s plans for maintaining the readiness of the RRF and the consequences of reduced funding. To determine the appropriate readiness status for the RRF, we obtained and analyzed data on several strategic mobility factors that may diminish the need for RRF ships to be maintained in a high-priority status. We analyzed the Mobility Requirements Study’s volume I and II reports, using the Middle East scenario, to determine the times specific types of ships first loaded, the ports that were assumed to be loading cargo within the first 30 days, and the locations and readiness goals set in the study. We discussed our analysis with Joint Chiefs of Staff officials. We reviewed the Army’s Strategic Mobility Program’s Management Plan to identify funding and plans for improvement to the continental United States infrastructure that would increase the mobility of selected military units to their seaports of embarkation. We discussed the status of these improvements with Army headquarters, Forces Command, Transportation Command, and Military Traffic Management Command officials. To determine the current and future availability of crews, we reviewed Persian Gulf War RRF activation data, RRF crewing requirements, and labor availability estimates. We sponsored a workshop on April 5, 1994, to discuss the impact of the declining merchant marine pool on U.S. sealift capability, identify impediments in crewing RRF ships, and reach consensus among the participants on how to address the issues discussed. We issued a report, that provided a summary of views expressed at the workshop. We have issued several other products on issues related to the RRF. In our testimony, we discussed several issues related to U.S. mobility capabilities that need to be resolved, including the Army’s current ability to get cargo to the ports. In our letter to the Maritime Administrator (GAO/NSIAD-94-96R, Jan. 7, 1994), we provided information on the latest selection of 12 roll-on/roll-off ships for the RRF. We stated that these ships would provide 1.6 million square feet of additional deck space for surge requirements, thereby increasing the fleet’s roll-on/roll-off cargo capacity by 40 percent. Three of the ships have been upgraded to U.S. specifications, and the other nine ships are expected to be completed by November 1994. Two of these ships are serving as Army prepositioning ships. A complete list of related GAO products appears on the last page of this report. We conducted our review between August 1993 and June 1994 in accordance with generally accepted government auditing standards. MarAd has made significant progress in implementing changes to address problems encountered while activating RRF ships for the Persian Gulf War. It identified and corrected equipment deficiencies, instituted more uniform and comprehensive specifications for the deactivation and preservation of RRF ships, strengthened ship manager controls by expanding and clarifying the manager’s contractual responsibilities, and developed and implemented automated information systems for tracking maintenance repairs. MarAd also initiated programs, such as assigning permanent, nucleus crews onboard high-priority ships to help maintain the RRF’s material condition achieved after the war and alleviate crewing concerns. Total RRF program expenditures between fiscal years 1990 and 1993 were more than $1 billion when Persian Gulf War activation and deactivation costs are included. Recent activations of the RRF have demonstrated the ships’ ability to meet readiness requirements and operate with fewer mechanical failures. These successful activations resulted largely from maintenance and repairs made during and after the war. In fact, activations without prior notice occurred an average of only 7 months after the ships had been deactivated from the war. However, continuing the present high readiness status of the RRF ships depends on MarAd’s future budgets and maintenance strategies. MarAd spent more than $1 billion to resolve mechanical, management, and crewing problems encountered during Persian Gulf War activations. Problems targeted were the poor condition of the ships upon entry to the force; improper deactivation, as well as insufficient preservation and maintenance techniques; insufficient monitoring of ship manager companies; unknown, deferred, or unreported equipment deficiencies; and inadequate crewing. MarAd has made significant progress toward solving those problems. The war experience enabled MarAd to identify and repair equipment deficiencies at an average cost of $5.5 million per ship. These repairs had been deferred because many of the ships had been laid up since being acquired for the RRF. Many ships had been added to the RRF with many known and unknown machinery deficiencies, and MarAd lacked the funding at that time to activate, fully inspect, and repair many of the ships. In fact, prior to the war, only 34 ships had been activated since entering the RRF. Improper deactivation and inconsistent preservation maintenance techniques for RRF ships contributed to mechanical problems encountered during war activations.