What GAO found
Since switching to the Multiple Contract Multiple Order (MAC-MO) contracting approach for vessel maintenance work in 2015, the Navy has increased competitive opportunities, gained flexibility to ensure quality of work and limited cost growth, but schedule delays persist. During this period, 21 of the 41 vessel maintenance periods, called availabilities, for major repair work cost less than initially expected, and the average cost growth over the 41 availabilities was 5%. The schedule results were less positive and the performance of the Navy’s regional maintenance centers varied (see figure).
Program performances in regional naval maintenance centers
To alleviate these delays, the Navy identified and took action to implement lessons learned, including negotiating and funding undefined but expected increases in work at contract award. However, these actions did not resolve the delays resulting from the approval process that the Navy often has to use to obtain funds to complete this maintenance work. That is, if an availability spans a new fiscal year and requires more than $ 4 million in additional funding the previous year, Navy and Department of Defense approvals are required. GAO found this approval process to take between 26 and 189 days based on Defense Department data. In December 2019, Congress established a pilot program that would potentially allow the Navy to bypass this process. The main practices identified by GAO for pilot programs call for the development of an analysis plan to monitor implementation and performance and to assess end results. As the Navy begins to implement its pilot program, developing an analysis plan would provide it with a means of identifying opportunities to assess the results of the pilot program’s availability schedule, against the availability of the non-pilot program, and to document a process for evaluating lessons learned. of the pilot program. Such assessments would provide information to determine whether the pilot approach should expand to help resolve persistent scheduling issues.
Ship repair contractors now operating in the MAC-MO environment told GAO that two key considerations guide their decisions about investments in labor and facilities: visibility into the expected workloads at a given port. and their assessment of what part of that job they are most likely to win. In recognition of these considerations, Navy officials began to take steps to increase the predictability of workloads at each port. These officials predict that these measures, coupled with the increased workload in ports, will help increase contractors’ confidence in their ability to plan their share of future work.
Why GAO did this study
The Navy relies on its fleet of more than 150 surface ships to be ready to operate when needed in the defense of the United States. The Navy spends billions every year to maintain this fleet. In 2015, the Navy changed the way it contracts for this maintenance work, in an effort to better control costs and improve quality. The new approach, called MAC-MO, typically uses firm fixed price contract delivery orders for individual vessel availabilities competing among pre-qualified contractors at regional Navy maintenance centers.
House Report 115-676 included a provision for GAO to review the Navy’s implementation of the MAC-MO strategy. This report (1) examines the results within the framework of the strategy; (2) assesses actions taken by the Navy in relation to recent lessons learned; and (3) describes contractors’ considerations when planning hiring and facilities. GAO analyzed ship repair data as part of the MAC-MO; examined six case studies involving different types of availability, classes of vessels, maintenance centers and contractors; and interviewed Navy officials and contractors.