The Navy uses a multilevel approach to ship repair and maintenance that, depending on the type and complexity of work, places responsibility at three different levels: organizational, intermediate, and depot. Depot-level repairs are the most complex, requiring the capabilities and technical skills of naval or private shipyards. During fiscal year 1997, the Navy employed about 22,000 personnel at its four naval shipyards. The shipyards are the Portsmouth Naval Shipyard, Portsmouth, New Hampshire; the Norfolk Naval Shipyard, Portsmouth, Virginia; the Puget Sound Naval Shipyard, Bremerton, Washington; and the Pearl Harbor Naval Shipyard, Pearl Harbor, Hawaii. The shipyards are not directly funded, but are paid by their customers—primarily the Pacific and Atlantic Fleets. The fleets are provided depot maintenance funds from the Navy’s operations and maintenance appropriation. Funding for the Navy’s depot-level ship maintenance and repair program in fiscal year 1998 is $2.1 billion. The Navy schedules its planned ship repair work for a 7-year period and updates this schedule annually. In developing the schedule, the Navy considers various factors, including (1) its policy to perform work of 6 months or less in the ship’s homeport, (2) statutory requirements regarding the public/private sector workload distribution, (3) the capabilities and capacity of each shipyard, and (4) expected funding and personnel levels. The published schedule shows the depot-level ship repair work assigned to each naval shipyard and the workload to be performed by the private sector. The Navy also develops an historically derived estimate of the direct labor staff-days each naval shipyard will expend on unscheduled (emergent) ship repair work and adds it to the schedule to arrive at the planned shipyard workload. The final schedule includes both scheduled and unscheduled work that requires temporary duty (TDY) assignments. For fiscal years 1995-97, about 70 percent of the total work assigned to naval shipyards was for scheduled repair work. The Navy uses TDY assignments primarily to perform work at homeports not located near a naval shipyard. The Navy considers shipyard personnel temporarily excess when they are required for planned future requirements and the time and cost of reducing and reacquiring needed personnel justifies retention. In some cases, personnel are considered temporarily excess for more than a year. Since private sector repair capabilities may be available at these locations, questions have been raised regarding the cost-effectiveness of sending naval shipyard personnel TDY to perform the work. During fiscal years 1995-97 naval shipyards spent an estimated 580,000 direct labor staff-days, valued at an estimated $134.1 million, on TDY assignments. TDY travel, per diem, and other related travel costs amounted to an additional $59 million. About 5.5 percent of the shipyards’ total direct labor staff-days were spent on TDY assignments. The Navy cites two reasons for using TDY assignments. First, such assignments are required to perform work at locations where no local public or private sector shipyards have the required ship repair capabilities. Second, the Navy believes that using temporarily excess shipyard workers on temporary duty assignments is cost-effective, even when there is a local private sector capability. The Navy performs work at locations without a naval shipyard to comply with its homeporting policy and when it is not practical to perform the work at public or private shipyards. The amount of TDY assignments depends on several interrelated factors, including a shipyard’s proximity to homeported ships, the number and types of ships assigned to each homeport, the type of repair or maintenance needed, the ability of private shipyards at or near the homeport to perform required repairs, and the number of temporarily excess naval shipyard personnel. The naval shipyards’ financial and management information systems do not identify the purpose for specific TDY assignments, and the Navy could not provide the data needed to identify the exact number of TDY assignments for each reason. The Navy performs ship repair TDY work at locations where it believes the necessary capability to perform the work is not locally available. The Navy performs work at these locations primarily to comply with its homeporting policy and also when it is not practical to bring ships to the shipyard. For example, a substantial amount of TDY has been for nuclear submarine repair work at San Diego, where there is no local naval shipyard or private sector nuclear repair capability. Also, local capability is usually not considered when naval shipyard warranty work is involved and for advanced planning prior to a ship going to a naval shipyard for repairs. Because of data limitations, we could not identify the exact number of TDY assignments, but available data supports Navy officials’ judgments that most TDY assignments are performed because there is no local capability. For example, because San Diego does not have nuclear repair capability, all nuclear submarine repair work is performed by naval shipyard workers at San Diego. The total submarine work of 145,000 staff-days represents about 25 percent of the total TDY staff-days for fiscal years 1995-97. In some cases, the Navy believes it is cost-effective to send shipyard workers that are considered temporarily excess on TDY assignments to locations where there is a local private sector capability. The Navy reasons that the excess workers would have to be paid whether or not they are working and that the cost of travel and per diem is the only additional cost of using the excess workers. The travel and per diem costs are generally less than local private sector labor rates. Shipyard workers become temporarily excess when there is a reduction in the naval shipyards’ originally scheduled and budgeted workload for such reasons as ship deployment extensions, reductions in the scope of the projected ship repairs, force level changes, and funding reductions. In some cases, expected future workloads are used to justify retaining some excess shipyard personnel. Excess personnel are retained when the Navy determines that the excess is temporary and that the time and cost of reducing and reacquiring the needed personnel justifies retention. This is especially true when workload reductions take place during the fiscal year in which the work is scheduled to be performed. In such cases, naval shipyard personnel levels are set for the year, and according to the Navy, it is very difficult to make major adjustments to personnel levels due to Civil Service regulations. For example, during the latest reductions in force at the four naval shipyards, the reductions took about 12 months to complete, from initial planning to the time the employees were actually removed from the shipyards’ payrolls. The Navy’s policy to perform all ship repair work of 6 months or less at the ship’s homeport substantially increased the amount of TDY ship repair work performed in locations without a naval shipyard. Because crews remain with their ships when the ships need maintenance and repairs, the policy is to improve crew retention and the quality of life by reducing time away from homeports. Since many of the Navy’s 23 ship homeports are not located near one of the four naval shipyards, the work is often performed by naval shipyard personnel on TDY assignments. Figure 1 shows the location of the four naval shipyards and some U.S. homeports. The number and type of ships located at each of the Navy’s 23 homeports is shown in appendix I. As shown in table 1, a large number of ships are homeported at or near the Norfolk and Pearl Harbor Naval Shipyards and provide each with a large potential workload for which temporarily excess shipyard personnel can be effectively used. The temporarily excess personnel can work on ships homeported in the area without being on TDY status. The two shipyards, however, also use the personnel to do some work that requires TDY assignments. On the other hand, relatively few ships are homeported near the Portsmouth and Puget Sound Naval Shipyards. As a result, these shipyards perform more work that requires TDY. Table 2 shows, by shipyard, the percent of total direct labor staff-days each naval shipyard spent on TDY assignments during fiscal years 1995-97. As table 2 shows, Portsmouth and Puget Sound Naval Shipyards used about 480,000 direct labor staff-days, or about 83 percent of the estimated 580,000 direct labor staff-days naval shipyards used on TDY assignments during fiscal years 1995-97. Table 3 shows, by shipyard, the reported direct labor costs of TDY assignments and the related travel costs for fiscal years 1995-97. Portsmouth and Puget Sound Naval Shipyards expended about $164.6 million of the $193.1 million, or about 85 percent of the total TDY costs (direct labor costs plus travel costs). As noted earlier, available data indicates that most TDY assignments are based on the rationale that no local capability exists. In those cases where there is a local private sector capability, the cost-effectiveness rationale for TDY assignments is valid to the extent that naval shipyard personnel are temporarily excess. There is excess capacity and personnel in some naval shipyards. The Navy is retaining the excess personnel to meet anticipated future requirements. Meanwhile, the Navy is using TDY assignments and is reallocating work from the private sector to the naval shipyards to make maximum use of the excess shipyard personnel. The Navy states that most TDY assignments are made because the required ship repair capabilities do not exist locally. In these cases, the Navy reasons that cost-effectiveness is not an issue because there is no practical alternative. As noted earlier, the Navy cites the use of TDY assignments to perform nuclear submarine repairs at San Diego as an example where no local private shipyard has nuclear repair capability. We agree that there may not be a practical alternative to some TDY assignments, but the Navy does not identify the rationale for each of its TDY assignments or provide the basis for any determination that there is no other practical alternative.