Navy auxiliary ships provide underway replenishment to Navy combatant ships worldwide thereby allowing combatant ships to remain at sea for extended periods. These ships deliver cargo and provide services such as towing and salvage operations. Navy auxiliary ships are crewed either by active duty military personnel or civil service mariners. Those ships crewed by civil service mariners also have a small detachment of active duty Navy personnel aboard to provide communications, ordnance handling, supply support, and technical support. As of May 1997, the Navy’s auxiliary fleet consisted of 42 ships—15 oilers, 6 stores ships, 7 ammunition ships, 7 tugs, and 7 multiproduct ships. One additional multiproduct ship of a new class is currently under construction. The Navy has delegated operational control of 27 of these ships to MSC, the military’s single manager for sealift, to better support Navy fleet operations. MSC crews these 27 ships with civil service mariners. The Navy’s remaining 15 auxiliary ships are crewed by military personnel. Under current policy, the Navy will not permit the use of commercial crews on any auxiliary ships because it considers their mission purely military in nature. As of May 1997, the Navy had MSC operating 27 of its 42 auxiliary ships with civil service crews. The type and number of auxiliary ships operated by MSC with civil service crewing and the crew size for each ship are shown in table 1. This table also shows the size of the military detachment on these ships. Under current policy, the Navy will not permit any auxiliary ships to be crewed with commercial mariners. In an April 1995 letter to the American Maritime Officers union, the Under Secretary of the Navy stated that the mission of its auxiliary ships was purely military in nature and not considered commercial-type operations. Therefore, according to the Under Secretary, auxiliary ships would only be crewed with government employees, even if the use of commercial employees was cost-effective. In an April 1996 letter to the same union, the Assistant Secretary of the Navy for Research, Development, and Acquisition reiterated this policy, stating that the Navy’s auxiliary ships would be crewed by civil service mariners due to the special nature of the auxiliary ships’ operation. As of May 1997, Navy officials confirmed that this policy was still in effect. As of May 1997, the Navy was continuing to crew 15 auxiliary ships with military personnel. The types of ships are shown in table 2. The Navy plans to (1) turn over the operation of the three ammunition ships to MSC for crewing with civil service mariners and (2) decommission the five oilers in fiscal year 1999, replacing them with four oilers built to commercial standards that are currently in reduced operating status or deactivated. These latter ships would also be crewed with civil service mariners. The Navy has not decided on whether to turn over the operation of the seven multiproduct auxiliary ships to MSC. Some Navy officials believe that multiproduct ships should continue to be crewed with military crews because they are the auxiliary ships that can maintain battle group speeds and operate within the battle group formations. However, MSC officials stated that they have studied what it would take to operate the multiproduct ships and are willing to accept the transfer because they believe MSC civil service crews can operate these ships. Our work and prior studies have shown that the Navy could achieve savings by using civil service crews on auxiliary ships. According to November 1996 data, the most current available, the Navy’s annual cost to operate a multiproduct ship (AOE-1 class), built in the 1960s, is $54 million compared to MSC’s estimated cost of $37 million to operate the ship using a civil service crew. The savings of nearly $18 million are primarily attributable to differences in crew sizes. MSC operates its ships with a smaller crew because it hires skilled mariners, whereas Navy crews are often recruits that must be trained to replace more skilled sailors. The Navy operates this ship with 600 crewmembers while MSC would use about 247 crewmembers. Similar differences apply to the multiproduct ship (AOE-6 class), built in the 1990s, which is a smaller, modified version of the earlier ship. The Navy operates this ship for $48 million annually, with 580 crewmembers. MSC’s estimated cost to operate this ship is $31 million annually with 229 crewmembers. The savings of over $17 million are also primarily attributable to differences in crew sizes. The differences in annual operating costs between the Navy and MSC to operate the two classes of multiproduct ships are shown in table 3. Using the Navy’s data of the cost to operate the two classes of multiproduct ships, we estimated that if the Navy turned over the operation of the seven multiproduct ships to MSC for civil service crewing, it could save $122.5 million annually. Table 4 shows these potential savings. A fourth AOE-6 class ship is under construction at the National Steel and Shipbuilding Company in San Diego, California, and is scheduled for delivery in early 1998. If the Navy chooses to include this ship with the rest of the multiproduct ships turned over to MSC, an additional $17.1 million annually would be saved, for a total annual savings of $139.6 million. According to MSC unofficial estimates, these savings would be offset by a one-time cost of $45 million for an AOE-1 and $30 million for an AOE-6 to convert these ships to Coast Guard standards, which differ from Navy standards, that is, $180 million for all four AOE-1 ships and $120 million for all four AOE-6 ships, or $300 million for all eight ships. However, such an investment would seem advantageous considering the annual estimated savings of $139.6 million. In a 1990 study of civilian manning of auxiliary ships, the Center for Naval Analyses found that the Navy would save $265 million annually if the Navy turned over 42 support ships and tenders to MSC. The study attributed the annual savings to much smaller crew sizes on MSC ships. It reported, for example, that civil service crews on a Navy oiler would be half the crew size the Navy used on those ships. In 1993, the Institute for Defense Analyses found that the Navy could save considerable cost and personnel positions by operating more of its auxiliary ships with civil service mariners. The Institute reported that a civilian operation saves on cost by reducing the total crew size by about half for a similar ship. It concluded that the Navy could save $4 million to $15 million a year per ship, depending on the type, by reducing the number of sea-going personnel positions on auxiliary ships and crewing them with civilians. A 1994 Naval Audit Service report also found that significant cost benefits could be achieved if Navy auxiliary ships were crewed by civil service mariners. The report, which covered 45 ships, stated that by turning over the ships to MSC, crewing could be reduced 52 percent, from 19,440 crewmembers to 9,264 crewmembers. Depending on the cost method applied, the Navy could save $3.7 billion or $4.3 billion over a 5-year period. The Naval Audit Service recommended that the Navy turn over the 45 auxiliary ships to MSC for civil service crewing. Another advantage of turning over the Navy multiproduct ships to MSC is, as Navy and MSC officials pointed out, that MSC ships do not have the constraints on operating days per ship and on days at sea per crewmember that Navy ships do. It is Navy policy to assign a sailor to a ship for 3 years and not to have the sailor spend more than 6 consecutive months each year at sea, whereas MSC policy is to have MSC crews spend about 9 months out of every 12 months at sea. According to these officials, an MSC ship can operate more days per year than a comparable Navy ship—resulting in fewer MSC ships being needed to conduct underway replenishment. Further, these officials agree that additional savings could be realized because some ships could be retired, decommissioned, or deactivated. The Navy is currently conducting a study to determine whether it is more cost-effective to continue the operation of the multiproduct auxiliary ships under Navy control or turn over the operation of these ships to MSC. The objectives of the study are to (1) determine the Navy minimum crewing level, (2) compare the proposed reduced Navy crewing level with comparable MSC crewing, and (3) recommend a course of action based on a comparison of MSC and Navy crewing levels. Navy officials estimate that this study should be completed by the end of 1997. Although the Navy’s current policy is not to use commercial crews, we compared the cost of crewing auxiliary ships with commercial and civil service crews. Based on our analysis, we found that crewing with commercial mariners costs more. In addition, we calculated an increase in the merchant mariner pool that could be available to crew ready reserve fleet ships in time of conflict. Historically, the United States has relied on the private sector for combat support elements in time of war or national emergency. In 1972, a joint U.S. Navy-Maritime Administration project used the SS Erna Elizabeth to test the feasibility of using commercial mariners to conduct underway replenishment. The SS Erna Elizabeth steamed about 13,000 miles and refueled 40 ships at sea. In another 1972 test, the SS Lash Italia delivered food and other consumable items to the Sixth Fleet in the Mediterranean. During Operations Desert Shield and Storm, a contract-operated tanker, the MV Lawrence H. Giannella operated by a commercial crew, provided fuel to Navy combatant ships while at sea. To analyze the annual costs between civil service and commercial crews, we obtained crewing levels and wage rates from two commercial mariner unions and MSC for the operation of a Kaiser class oiler, the most commonly used ship in the MSC fleet.