Defense Acquisitions: Guidance Needed on Navy¿s Use of Investment Incentives at Private ShipyardsAs fiscal constraints increasingly shape Navy shipbuilding plans, the pressure to increase efficiency mounts. Modernizing facilities and equipment at shipyards that build Navy ships can lead to improved efficiency, ultimately reducing the cost of constructing ships. This report: (1) identified investments in facilities and equipment at privately-owned shipyards over the last 10 years; (2) determined the Navy's role in financing facilities and equipment investments at these shipyards; and (3) evaluated how the Navy ensures investments result in expected outcomes. The report analyzed shipyard investment data over the past 10 years; interviewed shipyard, corporate, and Navy officials; and reviewed contracts, investment business cases. Illustrations. |
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Accelerated depreciation achieve addition agreed aircraft carriers allowable analysis Appendix Appropriations approved audit Austal USA Bath Iron Block Block II build combatants complete construction contract retentions contractor Corporation cost of money Defense develop Dynamics early release Electric Boat equipment investments example expected outcomes facilities and equipment facilities capital cost Figure funds future Hurricane Katrina identified improve incentive fee incentivize includes interest investments in facilities Littoral Combat Ship Location maintain major shipyards mechanism million NASSCO Navy Investment Incentives Navy officials Navy shipbuilding Navy’s negotiations Newport Northrop Grumman Northrop Grumman Shipbuilding–Gulf objectives officials operates panel past percent perform plans Private Shipyards Product Line program office projects proposed rate of return receive reduce release of contract repair safeguard savings schedule shipbuilding ships special contract-incentive fee special incentive Standards types Ultra Hall units validate Virginia-class submarine