Littoral Combat Ship: Unplanned Work on Maintenance Contracts Creates Schedule Risk as Ships Begin Operations

What GAO Found

The Littoral Combat Ship (LCS) is a class of small surface ships with two unique design variants. Both LCS variants carry smaller crews and rely more on contractors for maintenance than any other Navy ship. While this strategy was intended to reduce operating costs, it contributes to challenges in the Navy’s strategy for contracted maintenance. Specifically:

Contractor travel. U.S. law states that foreign contractors generally cannot conduct certain types of LCS maintenance. This results in the Navy paying for contractors to regularly travel overseas to perform routine maintenance. GAO’s sample of 18 delivery orders showed estimated travel costs for the orders reviewed ranged from a few thousand dollars to over $1 million.

Heavy reliance on original equipment manufacturers. LCS includes numerous commercial-based systems that are not used on other Navy ships. However, the Navy lacks sufficient manufacturer technical data to maintain many of these systems. This can lead to longer maintenance periods due to extra coordination needed for the manufacturers to assist with or complete the work.

Although the Navy is establishing teams of its personnel to take on routine maintenance, contractors will continue performing some of this work.

Littoral Combat Ship Variants under Maintenance

The Navy is beginning to implement contracting approaches for LCS maintenance in order to help mitigate schedule risk, while taking steps to avoid it in the future. GAO found in the 18 LCS maintenance delivery orders it reviewed that the Navy had to contract for more repair work than originally planned, increasing the risk to completing LCS maintenance on schedule. A majority of this unplanned work occurred because the Navy did not fully understand the ship’s condition before starting maintenance. The Navy has begun taking steps to systematically collect and analyze maintenance data to determine the causes of unplanned work, which could help it more accurately plan for maintenance. The Navy has also recently begun applying some contracting approaches to more quickly incorporate unplanned work and mitigate the schedule risk, such as (1) setting a price for low-dollar value unplanned work to save negotiation time and (2) procuring some materials directly instead of waiting for contractors to do so. Such measures will be important to control cost and schedule risks as additional LCS enter the fleet in the coming years.

Why GAO Did This Study

The Navy plans to spend approximately $61 billion to operate and maintain LCS, a class of small surface ships equipped with interchangeable sensors and weapons. With limited operations to date, these ships have entered the Navy’s maintenance cycle. Since 2005, GAO has reported extensively on LCS issues, including ships delivered late and with increased costs and less capability than planned. The Navy also encountered problems as LCS entered the fleet, including higher than expected costs for contractor maintenance and numerous mechanical failures. In 2020, GAO reported that major maintenance on other surface ships using the same contracting approach as LCS was 64 days late, on average. The Navy acknowledges the importance of reducing maintenance delays in order to improve the readiness of its surface fleet.

A House Report included a provision for GAO to review long-term contracting strategies and challenges for LCS repair and maintenance. This report (1) describes the effect of the LCS program’s acquisition and sustainment strategies on its contracted maintenance and (2) assesses the extent to which the Navy is using contracting approaches to address any cost and schedule risks in maintaining LCS. To conduct this assessment, GAO reviewed relevant Navy documentation, including a sample of 18 delivery orders for LCS maintenance from fiscal year 2018 through April 2020 selected to cover each availability type and each LCS variant. GAO also interviewed Navy officials and contractor representatives.

For more information, contact Shelby S. Oakley at (202) 512-4841 or OakleyS@gao.gov.

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    The Department of Energy (DOE) has made progress in cleaning up radioactive waste at the site of the West Valley Demonstration Project in New York State. In the 1960s and 1970s, a commercial facility at the site reprocessed spent (used) nuclear fuel into reusable nuclear material—creating various wastes that remained on-site after the facility closed in 1976. Since 2011, DOE has demolished 51 of 55 structures there and disposed of about 1.3 million cubic feet of low-level waste to off-site locations. It has also placed solidified high-level waste into interim on-site storage (see fig.). In addition, DOE has processed for interim on-site storage about 30,000 cubic feet of transuranic waste (which is contaminated with elements that have an atomic number greater than uranium). As of February 2020, DOE reported spending about $3.1 billion on contracted cleanup activities, but it cannot estimate the cleanup's final cost until it decides how it will address the remaining waste. High-Level Waste from the West Valley Demonstration Project in Interim On-Site Storage, March 2017 DOE has been unable to dispose of the high-level and transuranic wastes stored at West Valley because there are no facilities authorized to accept these wastes. DOE has identified two potential options for disposal of the transuranic waste: the federal Waste Isolation Pilot Plant in New Mexico and a commercial facility in Texas. However, the New Mexico facility is authorized to accept only waste from atomic energy defense activities, and DOE does not consider West Valley waste to be from atomic energy defense activities. Regarding the Texas facility, state regulations preclude disposal of the waste there. In 2017, DOE submitted to Congress a report on all disposal options, as required by the Energy Policy Act of 2005. Pursuant to this act, DOE must await action by Congress before making a final decision, and Congress has not yet acted. The West Valley Demonstration Project Act, enacted in 1980, requires DOE to assist with cleanup activities at the site of the nation's only commercial facility for reprocessing spent nuclear fuel. The site contained 600,000 gallons of liquid high-level waste, radioactively contaminated structures and soils, and buried radioactive waste. In 2011, DOE began the first phase of its decommissioning plan, which included demolishing above-ground structures and removing contaminated soils. The West Valley Reauthorization Act and the Senate Committee Report No. 116-48 included provisions for GAO to review progress on the cleanup at West Valley. GAO's report examines (1) the status of the cleanup and (2) DOE's options for disposing of the remaining radioactive waste. GAO reviewed DOE's data on cleanup costs and waste volumes and its decommissioning plans, as well as laws, regulations, and policies governing radioactive waste disposal. GAO also interviewed officials from DOE and the state of New York, as well as other stakeholders. Congress should consider taking action to provide a legal option for the disposal of West Valley's transuranic waste. For more information, contact Allison Bawden at (202) 512-3841 or BawdenA@gao.gov.
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    In Travel
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  • Deutsche Bank Agrees to Pay over $130 Million to Resolve Foreign Corrupt Practices Act and Fraud Case
    In Crime News
    Deutsche Bank Aktiengesellschaft (Deutsche Bank or the Company) has agreed to pay more than $130 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities fraud scheme.
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  • Secretary Blinken’s Call with Saudi Foreign Minister Faisal bin Farhan Al Saud
    In Crime Control and Security News
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  • Emotet Botnet Disrupted in International Cyber Operation
    In Crime News
    The Justice Department today announced its participation in a multinational operation involving actions in the United States, Canada, France, Germany, the Netherlands, and the United Kingdom to disrupt and take down the infrastructure of the malware and botnet known as Emotet. Additionally, officials in Lithuania, Sweden, and Ukraine assisted in this major cyber investigative action.
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    In Crime Control and Security News
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  • F-35 Sustainment: DOD Needs to Address Key Uncertainties as It Re-Designs the Aircraft’s Logistics System
    In U.S GAO News
    The Autonomic Logistics Information System (ALIS) is integral to supporting F-35 aircraft operations and maintenance. However, F-35 personnel at 5 locations GAO visited for its March 2020 report cited several challenges. For example, users at all 5 locations we visited stated that electronic records of F-35 parts in ALIS are frequently incorrect, corrupt, or missing, resulting in the system signaling that an aircraft should be grounded in cases where personnel know that parts have been correctly installed and are safe for flight. At times, F-35 squadron leaders have decided to fly an aircraft when ALIS has signaled not to, thus assuming operational risk to meet mission requirements. GAO found that DOD had not (1) developed a performance-measurement process for ALIS to define how the system should perform or (2) determined how ALIS issues were affecting overall F-35 fleet readiness, which remains below warfighter requirements. DOD recognizes that ALIS needs improvement and plans to leverage ongoing re-design efforts to eventually replace ALIS with a new logistics system. However, as DOD embarks on this effort, it faces key technical and programmatic uncertainties (see figure). Uncertainties about the Future F-35 Logistics Information System These uncertainties are complicated and will require significant planning and coordination with the F-35 program office, military services, international partners, and the prime contractor. For example, GAO reported in March 2020 that DOD had not determined the roles of DOD and the prime contractor in future system development and management. DOD had also not made decisions about the extent to which the new system will be hosted in the cloud as opposed to onsite servers at the squadron level. More broadly, DOD has experienced significant challenges sustaining a growing F-35 fleet. GAO has made over 20 recommendations to address problems associated with ALIS, spare parts shortages, limited repair capabilities, and inadequate planning. DOD has an opportunity to re-imagine the F-35's logistics system and improve operations, but it must approach this planning deliberately and thoroughly. Continued attention to these challenges will help ensure that DOD can effectively sustain the F-35 and meet warfighter requirements. The F-35 Lightning II is DOD's most ambitious and costly weapon system in history, with total acquisition and sustainment costs for the three U.S. military services who fly the aircraft estimated at over $1.6 trillion. Central to F-35 sustainment is ALIS—a complex system that supports operations, mission planning, supply-chain management, maintenance, and other processes. A fully functional ALIS is critical to the more than 3,300 F-35 aircraft that the U.S. military services and foreign nations plan to purchase. Earlier this year, DOD stated that it intends to replace ALIS with a new logistics system. This statement highlights (1) current user challenges with ALIS and (2) key technical and programmatic uncertainties facing DOD as it re-designs the F-35's logistics system. This statement is largely based on GAO's March 2020 report on ALIS ( GAO-20-316 ), as well as previous F-35 sustainment work. GAO previously recommended that DOD develop a performance-measurement process for ALIS, track how ALIS is affecting F-35 fleet readiness, and develop a strategy for re-designing the F-35's logistics system. GAO also suggested that Congress consider requiring DOD to develop a performance-measurement process for its logistics system. DOD concurred with GAO's recommendations and is taking actions to address them. For more information, contact Diana C. Maurer at (202) 512-9627 or maurerd@gao.gov.
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  • New York Man Pleads Guilty to Conspiring to File False Returns
    In Crime News
    A resident of Newburgh, New York, pleaded guilty today to conspiracy to defraud the United States, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
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  • Readout of Acting Attorney General Monty Wilkinson, FBI Director Christopher Wray and Assistant to the President for Homeland Security Dr. Elizabeth Sherwood-Randall from the Funeral of FBI Special Agent Laura Schwartzenberger
    In Crime News
    Acting United States Attorney General Monty Wilkinson, FBI Director Christopher Wray and President Joe Biden’s Homeland Security Advisor Dr. Elizabeth Sherwood-Randall led a United States Government delegation to Fort Lauderdale, Florida today that attended the funeral service for fallen FBI Special Agent Laura Schwartzenberger. 
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