Why It Matters

A program projected to exceed $200 billion over more than half a century, with no standing requirement for the Navy to report consolidated cost, schedule, or risk data to Congress, is experiencing a major oversight gap according to a new Government Accountability Office (GAO) report.

The report, published Sept. 25, notes that without a structured reporting mechanism, lawmakers have no consolidated, standardized baseline of total costs, schedule performance, or risk analysis against which to assess whether the Shipyard Infrastructure Optimization Program (SIOP) is on track or accumulating unaddressed risks.

The Navy's four public shipyards are the backbone of its nuclear-powered fleet, responsible for maintaining and modernizing aircraft carriers and submarines essential to warfighting readiness. That makes SIOP not just a construction program, but a program to sustain its most strategically sensitive vessels. Shipyard conditions and capability gaps have affected fleet readiness, according to the Navy's own rationale for launching the program in 2018.

The Big Picture

The Navy launched SIOP in 2018 to address persistently poor shipyard conditions and capability gaps, and GAO has previously reported that early SIOP cost estimates were understated by billions of dollars. Developing the plans and cost estimates to rebuild the four shipyards has taken the Navy years longer, and will cost much more, than originally anticipated.

Environmental issues, for example, led to additional projects and more extensive work affecting project plans and costs, including at Puget Sound Naval Shipyard, where seismic risks were also identified. Those site-specific complications, including environmental issues that led to additional projects and more extensive work, have affected project plans and costs across the shipyards.

The joint explanatory statement accompanying the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2024 includes a provision directing GAO to report on SIOP oversight and management, signaling congressional concern about the program's trajectory.

The oversight framework the Navy established draws on tools typically used for major defense acquisition programs (MDAPs), such as those governing missiles, aircraft, or ships, but it does not include steps to reevaluate program objectives and resources as SIOP progresses over the coming decades. Unlike MDAPs, which are required to provide annual program status reports with detailed metrics including total costs to date, cost and schedule baselines, and risks, SIOP has no comparable reporting requirement to Congress.

The Navy also created several organizations to manage SIOP projects and challenges, including bodies for project oversight and program integration, but has not fully documented those organizations' roles and responsibilities. Without documented roles and responsibilities, the Navy risks undermining the organizations' ability to effectively implement essential projects and maintain continuity of critical shipyard operations throughout the program's extended timeline.

The Bottom Line

GAO is recommending that Congress consider requiring the Navy to annually report consolidated, standardized status updates for SIOP, covering total expenditures to date, original and current cost and schedule estimates, and associated risk analysis, for the full duration of the program. GAO is also making recommendations directly to the Navy: to build periodic reevaluations of program requirements and resources into its oversight framework, and to formally document the roles and responsibilities of the key organizations managing shipyard projects and risks.

The Navy agreed with the recommendations and outlined planned steps to implement them. Nonetheless, the Navy has no requirement to provide Congress with consolidated, standardized annual reporting on SIOP costs, risks, and progress for a program that, based on GAO's analysis of Navy plans, will take over 50 more years to execute.

Lawmakers and the public can track legislative activity related to naval shipyard funding and oversight at Legis1.com.

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