GAO Report Reveals Massive Waste in Navy’s $3.7B Cruiser Modernization Program

The U.S. Navy’s ambitious modernization program for its Ticonderoga-class guided-missile cruisers has largely failed to meet its objectives, resulting in billions in wasted taxpayer dollars, according to a new Government Accountability Office (GAO) report.

Since 2015, the Navy has invested approximately $3.7 billion in modernizing seven cruisers, but the program’s outcomes have fallen dramatically short of expectations. Of these vessels, only three will complete the modernization process, with none achieving the intended five-year service life extension.

“The Navy wasted $1.84 billion modernizing four cruisers that have now been divested prior to deploying,” states the GAO report. The program has been particularly marred by a case involving the USS Vicksburg, where contractors performed substandard work on the vessel’s sonar dome, a crucial component for anti-submarine warfare capabilities.

The report joins other recent GAO assessments critical of Navy and Coast Guard modernization and expansion programs. 

According to the GAO, the root of these issues lies in inadequate planning, which led to an overwhelming 9,000 contract changes and subsequent cost overruns. Compounding these problems, the Navy’s leadership made controversial decisions that weakened quality control measures. In 2018, they restricted the ability to impose monetary penalties on contractors, and by 2020, they had reduced vital inspections by nearly 50 percent.

The Navy contracts with private shipyards to maintain and modernize its non-nuclear surface ships.

The modernization program’s troubled history dates back to 2012-2013 when Congress rejected the Navy’s initial proposal to retire several cruisers due to budget constraints. Instead, Congress provided funding for modernization, aiming to extend the service life of 11 cruisers by five years while upgrading their combat capabilities.

In response to these findings, the GAO has issued six recommendations, focusing on the need for the Navy to analyze the root causes of unplanned work and implement stronger quality assurance measures. The Navy has agreed to all recommendations, though the impact of these failures on naval readiness and taxpayer resources remains a significant concern.

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