Surface Ships: Navy Needs to Revise Its Decommissioning Policy to Improve Future Decision Making

In today s fiscally constrained environment, the Navy must balance short- and long-term costs and risks. In February 2012, although it had concerns that its battle force was below the number of ships needed, the Navy announced plans to decommission nine ships. Congress mandated that GAO review the Navy s methodology and analysis that supported its decommissioning decision. This report evaluates 1 the extent to which the Navy followed its policy when deciding to decommission nine ships before the end of their service lives, and 2 the extent to which the Navy s policy incorporates federal standards for internal control. To evaluate these issues, GAO obtained evidence and interviewed officials about the process the Navy used to develop its decommissioning decision. GAO also analyzed the Navy s decommissioning policy, and compared its requirements to federal standards for internal control. GAO recommends that the Navy follow its policy to document its early decommissioning decisions and also update its policy to incorporate key federal standards for internal control including engaging external stakeholders and evaluating performance measures, such as risks. DOD partially agreed with both recommendations. DOD agreed that it should follow its policy but questioned the importance of updating the policy to incorporate certain internal control elements. GAO believes that these recommendations remain valid as discussed in the report.