    Ready Reserve Force: Ship Readiness Has Improved, but Other Concerns
    Remain (Chapter Report, 11/08/94, GAO/NSIAD-95-24).

    Ships move about 90 percent of all dry cargo needed to support U.S.
    forces.  The Ready Reserve Force--a government-owned, inactive fleet of
    former commercial ships of various types--is the government's largest
    source of strategic sealift capability. During the Persian Gulf War, 75
    percent of the Ready Reserve Force ships could not be made ready by
    their specified deadlines, mainly because of the ships' poor conditions
    and because of crewing problems.  This report discusses whether (1)
    program changes to address these problems have improved the ships'
    overall readiness, (2) the readiness level of the highest priority ships
    exceeds that of other strategic mobility components, and (3) a further
    decline in the number of available U.S. merchant mariners would have a
    long-term effect on crewing Ready Reserve Force ships.

    --------------------------- Indexing Terms -----------------------------

     REPORTNUM:  NSIAD-95-24
         TITLE:  Ready Reserve Force: Ship Readiness Has Improved, but Other
                 Concerns Remain
          DATE:  11/08/94
       SUBJECT:  Defense contingency planning
                 Mobilization
                 Logistics
                 Emergency preparedness
                 Merchant marine
                 Military vessels
                 Military reserve personnel
                 Marine transportation operations
                 Combat readiness
                 Strategic forces
    IDENTIFIER:  Ready Reserve Force
                 Ready Reserve Fleet
                 Persian Gulf War
                 DOD Bottom-Up Review
                 DOD Mobility Requirements Study
                 Army Joint Logistics Over the Shore System
                 DOT Maritime Security Program

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    Cover
    ================================================================ COVER

    Report to the Chairman, Subcommittee on Readiness, Committee on Armed
    Services, House of Representatives

    November 1994

    READY RESERVE FORCE - SHIP
    READINESS HAS IMPROVED, BUT OTHER
    CONCERNS REMAIN

    GAO/NSIAD-95-24

    Ready Reserve Force

    Abbreviations
    =============================================================== ABBREV

      DOD - Department of Defense
      GAO - General Accounting Office
      MarAd - Maritime Administration
      ROS - reduced operating status
      RRF - Ready Reserve Force

    Letter
    =============================================================== LETTER

    B-256067

    November 8, 1994

    The Honorable Earl Hutto
    Chairman, Subcommittee on Readiness
    Committee on Armed Services
    House of Representatives

    Dear Mr.  Chairman:

    As requested, we reviewed the Ready Reserve Force program.  Our
    analysis included the ships' overall readiness, the required
    readiness level for the highest priority ships, and the long-term
    effect of the decline in the number of available U.S.  merchant
    mariners to crew the Ready Reserve Force ships.  This report contains
    recommendations to the Secretaries of Defense and Transportation.

    As agreed with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report until 30 days
    from the date of this letter.  At that time, we will send copies to
    interested parties and make copies available to others upon request.

    Please contact me on (202) 512-5140 if you or your staff have any
    questions regarding this report.  Other major contributors are listed
    in appendix III.

    Sincerely yours,

    Mark E.  Gebicke
    Director, Military Operations and
     Capabilities Issues

    EXECUTIVE SUMMARY
    ============================================================ Chapter 0

       PURPOSE
    ---------------------------------------------------------- Chapter 0:1

    Ships move about 90 percent of all dry cargo needed to deploy,
    sustain, and resupply U.S.  forces.  The Ready Reserve Force (RRF)--a
    government-owned, inactive fleet of former commercial ships of
    various configurations and capabilities--is the government's largest
    source of strategic sealift capability.  During the Persian Gulf War,
    75 percent of the RRF ships could not be made ready within their
    specified time frames principally because of the ships' poor
    condition and problems crewing the ships.  In 1992, the Department of
    Defense (DOD) recommended spending almost $4 billion over the next 7
    years to purchase more ships for the RRF and improve their readiness.
    However, the pool of U.S.  merchant mariners available to crew RRF
    ships has been steadily declining for several decades.

    The Chairman, Subcommittee on Readiness, House Committee on Armed
    Services, asked GAO to evaluate whether RRF ships would be ready
    within specified time frames in the event of a large-scale
    contingency.  Specifically, GAO determined whether (1) program
    changes implemented to address problems encountered during the
    Persian Gulf War have improved the ships' overall readiness, (2) the
    readiness level of the highest priority ships exceeds that of other
    strategic mobility components, and (3) a further decline in the
    number of available U.S.  merchant mariners would have a long-term
    effect on crewing RRF ships.

       BACKGROUND
    ---------------------------------------------------------- Chapter 0:2

    RRF ships are maintained in a readiness status such that they can be
    activated for service within 4, 5, 10, or 20 days after DOD requests
    them.  The Department of Transportation, through the Maritime
    Administration (MarAd), manages and maintains the RRF ships, and DOD
    directs and controls operations once the ships have been activated.
    DOD's Transportation Command is responsible for DOD's RRF oversight
    and operational control.

    In August 1990, the RRF consisted of 96 ships, 78 of which were
    activated to support the Persian Gulf War.  The problems encountered
    while activating the ships for the war included numerous equipment
    deficiencies caused by improper deactivations when the ships were
    acquired into the RRF, inconsistent preservation techniques, weak
    ship manager controls, and the lack of detailed records to track
    maintenance activities within the fleet.

    DOD's 1992 Mobility Requirements Study recommended that by 1999 the
    RRF consist of 142 ships, 63 of which would be kept in a
    high-priority readiness status.  Of these 63 ships, 36 would need to
    be able to activate in 4 days and 27 would have to be ready in 5
    days.

       RESULTS IN BRIEF
    ---------------------------------------------------------- Chapter 0:3

    MarAd has made significant progress addressing problems it
    encountered while activating RRF ships for the Persian Gulf War.  It
    has identified and corrected equipment deficiencies, instituted more
    uniform and comprehensive specifications for the deactivation and
    preservation of RRF ships, strengthened ship manager controls by
    expanding and clarifying the manager's contractual responsibilities,
    and developed and implemented automated information systems for
    tracking maintenance repairs.  MarAd has also implemented new
    strategies for maintaining high-priority ships.  Recent testing has
    indicated that RRF ships can be made ready to sail within specified
    time frames.  However, the success of these activations has resulted
    largely from maintenance and repairs performed during and after the
    war.

    MarAd's ability to activate ships within 4 or 5 days exceeds the
    current readiness level of other strategic mobility components.  The
    Army's ability to get unit equipment (e.g., tanks and helicopters)
    from key Army installations to seaports is still constrained by
    deteriorated facilities.  Although the Army plans to increase its
    capability to reach seaports more quickly, most projects will not be
    completed by the 1999 time frame set in DOD's mobility study, when 63
    RRF ships will be expected to be ready to activate within 4 or 5
    days.  Further, the study's recommendation to maintain 63 ships in
    this high state of readiness is not justified by DOD's model.

    The decline in the number of available mariners should not
    immediately affect MarAd's ability to crew RRF ships.  However, if
    the decline continues, MarAd's future ability to adequately crew
    these ships is questionable.  Alternatives to resolve this situation,
    such as a civilian reserve program, have been proposed, but none have
    been adopted.

       PRINCIPAL FINDINGS
    ---------------------------------------------------------- Chapter 0:4

          RRF READINESS HAS IMPROVED
    -------------------------------------------------------- Chapter 0:4.1

    MarAd's changes to the RRF program have addressed problems identified
    during the Persian Gulf War.  In 1993, DOD requested, without prior
    notice, that MarAd activate six RRF ships to verify their readiness.
    The ships performed excellently:  all six were activated either on
    time or earlier and experienced fewer equipment failures than during
    their activations for the war.  However, the activations were
    requested, on average, only 7 months after the ships had been
    deactivated from their service in the war and after almost $30
    million had been spent on them.

    MarAd has initiated several strategies to maintain the current
    readiness levels of the RRF's high-priority ships.  For example, in
    1993, MarAd began assigning permanent, nucleus crews to the highest
    priority ships and planned to activate them every year for testing.
    Also, MarAd began assigning two-person crews to the other
    high-priority ships and planned to activate them biennially for
    testing.  The cost to sustain this high readiness status is much
    greater than the amount spent before the war--$3 million per ship
    annually compared with about $800,000 per ship annually.  MarAd's
    ability to continue the RRF's current high readiness status depends
    largely on future maintenance and repair funding levels.

          RRF READINESS LEVEL EXCEEDS
          OTHER DEPLOYMENT COMPONENTS
    -------------------------------------------------------- Chapter 0:4.2

    Maintaining today's RRF ships in a relatively high readiness status,
    as recommended by DOD's 1992 mobility study report, is not consistent
    with the current readiness level of other strategic deployment
    components.  For example, the Army's ability to move unit equipment
    from key installations to seaports is currently hampered because of
    deteriorated rail facilities.  The Army has identified an estimated
    $550 million in military construction and operations and maintenance
    funding through fiscal year 2001 for various projects that are
    expected to increase its capability to transport equipment to ports
    more quickly.  However, at current funding levels, some of these
    projects will take 15 to 20 years to complete and therefore do not
    yet provide the rapid deployment capability assumed in DOD's mobility
    study.

    The mobility study's specific recommendation to maintain 63 RRF ships
    in a 4- or 5-day, high-readiness status was not supported by DOD's
    detailed analysis.  For example, in the specific scenario used to
    justify the overall study's recommendations, the computer model
    assumed that only 14 RRF ships would need to be ready to load cargo
    by the 5th day.  DOD officials could not explain the large
    discrepancy between the number of ships used in its model and the
    number it recommended be kept in a high readiness status in the
    study's final report.  However, they did state that the overall
    requirement to maintain 63 RRF ships in a high-priority readiness
    status was still valid.  Transportation Command officials are
    currently reviewing the RRF's size, composition, and readiness status
    to meet surge sealift requirements in the year 2001 as part of a new
    DOD mobility study, which is expected to be released in January 1995.

          LONG-TERM CREWING
          INITIATIVES NEED TO BE
          DEVELOPED FURTHER
    -------------------------------------------------------- Chapter 0:4.3

    The continuing declining pool of available, qualified U.S.  mariners
    may affect MarAd's future ability to adequately crew RRF ships.  DOD
    and MarAd have conducted numerous studies on this issue and have
    proposed alternative ways to improve the likelihood that RRF ships
    will be adequately crewed.  These alternatives include the creation
    of a civilian merchant marine reserve and the expansion of the
    existing Naval Merchant Marine Reserve.  However, DOD, MarAd, and
    others involved in this issue have thus far been unable to reach
    consensus on a crewing alternative.

       RECOMMENDATIONS
    ---------------------------------------------------------- Chapter 0:5

    GAO recommends that the Secretary of Defense direct the Commander in
    Chief, Transportation Command, to annually review RRF ship readiness
    requirements provided to MarAd and ensure that they are in line with
    current military deployment capabilities.

    GAO also recommends that the Secretary of Transportation direct the
    Maritime Administrator to annually assess whether an adequate number
    of experienced U.S.  merchant mariners would be available to crew RRF
    ships within DOD's specified time frames.  If these assessments
    indicate that the number of qualified mariners may not be sufficient,
    the Secretary should propose a specific merchant marine crewing
    alternative to the Congress.

       AGENCIES COMMENTS
    ---------------------------------------------------------- Chapter 0:6

    Both DOD and the Department of Transportation commented on GAO's
    draft report (see apps.  I and II).  DOD concurred with the
    recommendation to the Secretary of Defense and stated that RRF
    readiness requirements are being reviewed annually in cooperation
    with MarAd as part of the budget review.  DOD noted that readiness
    levels are also being examined as part of the ongoing Mobility
    Requirements Study Bottom-Up Review.

    Transportation partially concurred with the recommendation to
    annually assess the number of qualified U.S.  mariners available to
    crew RRF ships and, if necessary, report crewing options.
    Transportation stated that it maintains maritime workforce statistics
    on the size and the composition of U.S.  merchant mariners.  It does
    not report this information to the Congress in conjunction with
    defense requirements.  GAO believes that MarAd's assessment would be
    an appropriate first step to define the effect that the declining
    U.S.  merchant marine pool has on national security.

    Transportation said that the recommendation should focus on the need
    for reemployment rights legislation for U.S.  merchant mariners if
    called upon to serve during a war or national emergency.  It pointed
    out that reemployment rights were discussed in GAO's report.\1 GAO
    disagrees with Transportation.  GAO has advised the Congress that the
    passage of reemployment rights for mariners equivalent to the rights
    and benefits provided any member of a reserve component of the Armed
    Forces is a fair and equitable measure.\2 GAO continues to believe
    that the primary focus should be on the continuing decline in the
    pool of experienced U.S.  mariners and having an adequate number
    available to crew RRF ships.  Although reemployment rights could be a
    positive influence, this incentive's impact cannot yet be determined.
    GAO believes that an annual assessment of the crewing issues could
    clearly identify specific actions needed to meet defense objectives.

    --------------------
    \1 Strategic Sealift:  Summary of Workshop on Crewing the Ready
    Reserve Force (NSIAD-94-177, June 6, 1994).

    \2 Management Reform:  GAO's Comments on the National Performance
    Review's Recommendations (GAO/OCG-94-1, Dec.  3, 1993).

    INTRODUCTION
    ============================================================ Chapter 1

    The Ready Reserve Force (RRF) is a government-owned, inactive fleet
    of former commercial ships of various configurations and capabilities
    that should be ready to sail within 4, 5, 10, or 20 days in response
    to national emergency sealift requirements.  The RRF was organized in
    1976 with
    30 ships drawn from the 360 ships in the National Defense Reserve
    Fleet, which was created in 1946 to be able to respond to national
    emergencies.\1 During fiscal year 1994, the RRF consisted of 108
    ships.  The fleet is expected to increase to 142 ships by 1999 in
    accordance with the Department of Defense's (DOD) Mobility
    Requirements Study and defense plans.

    --------------------
    \1 The RRF was initially called the Ready Reserve Fleet and was
    renamed the Ready Reserve Force in 1982.

       ORGANIZATION AND MANAGEMENT OF
       THE RRF
    ---------------------------------------------------------- Chapter 1:1

    The Department of Transportation, through the Maritime Administration
    (MarAd), manages and maintains RRF ships, and DOD directs and
    controls operations once the ships have been activated.  The Military
    Sealift Command, under the Transportation Command, carries out DOD's
    oversight and operational control responsibilities.

    RRF ships are berthed at Reserve Fleet sites located in James River,
    Virginia; Beaumont, Texas; Suisun Bay, California; and other
    locations in the United States and overseas.  MarAd contracts with
    ship managers, who are responsible for activating, maintaining,
    crewing, operating, and deactivating the ships as directed.  The
    American Bureau of Shipping and the U.S.  Coast Guard conduct
    periodic limited inspections of the ships for compliance with marine
    safety regulations.\2 The ship managers are required to ensure that
    the ships are fully operational once MarAd notifies them to activate
    the ships.  The Military Sealift Command designates a ship as being
    fully operational when, among other things, a complete crew has been
    provided, all required regulatory certificates have been obtained,
    and sea trials have been performed.

    --------------------
    \2 American Bureau of Shipping surveyors periodically inspect
    merchant vessels and certify that ships are structurally sound and
    mechanically fit.

       RRF USE DURING THE PERSIAN GULF
       WAR
    ---------------------------------------------------------- Chapter 1:2

    Of the 96 ships that were in the RRF in August 1990, 78 were called
    upon to support the Persian Gulf War.  This was the first large-scale
    activation and employment of the RRF since it was separated from the
    National Defense Reserve Fleet.  These ships transported nearly
    one-fifth of the dry cargo deployed.\3 However, ship activations were
    not as timely as planned--only 25 percent of the activated ships met
    their assigned readiness goals.  Although insufficient fiscal year
    1990 maintenance funding has been cited as a major reason for many
    late activations, a Department of Transportation Inspector General
    report attributed ships' mechanical and crewing problems as the
    primary reasons the RRF ships were not able to meet specified
    activation times.

    Mechanical problems were attributed to (1) the poor condition of the
    ships when they were purchased for the RRF, (2) the age of the ships'
    equipment, (3) improper steps taken to deactivate the ships, (4) the
    ships' lack of use, (5) shipyard repairs and upgrades not being
    tested upon completion, and (6) uncorrected deficiencies identified
    during the periodic Coast Guard inspections and during specified
    fleet maintenance procedures.  The Transportation Inspector General
    reported that 45 of the 79 ships activated for the Persian Gulf War
    had not been operated since their acquisition and acceptance into the
    RRF.

    The Transportation Inspector General also reported that mariners must
    be onboard the activating ships at specified times and should be
    knowledgeable of the ships and their operating systems.  They are
    responsible for testing and operating all components and systems
    required to make the ships operational.  Crewing problems during the
    war were caused by crew members that arrived late, lacked knowledge
    of the specific ship and operating systems, or had to be replaced
    because of crew turnover.

    --------------------
    \3 The remainder of U.S.  sealift was provided by DOD-controlled
    ships, including fast sealift ships, preposition force ships, and
    commercial U.S.-flag ships.

       OBJECTIVES, SCOPE, AND
       METHODOLOGY
    ---------------------------------------------------------- Chapter 1:3

    The Chairman, Subcommittee on Readiness, House Committee on Armed
    Services, asked us to evaluate whether RRF ships would be ready
    within specified time frames in the event of a large-scale
    contingency.  Specifically, we determined whether (1) the changes
    implemented to address problems encountered during war activations
    have improved the ships' overall readiness, (2) the readiness level
    of the highest priority ships exceeds that of other strategic
    mobility components, and (3) a further decline in the number of
    available U.S.  merchant mariners would have a long-term effect on
    crewing the force.

    To determine whether the overall readiness of the RRF had improved
    since the Persian Gulf War, we compared selected ships' 1990 and 1993
    activation performance.  The selected ships included those activated
    in 1993 for purposes other than testing post-war repairs.  We
    reviewed MarAd, Military Sealift Command, Coast Guard, and American
    Bureau of Shipping records, as well as related external studies, to
    determine the length of activation, significant machinery failures,
    and costs.

    We identified and reviewed program modifications initiated since the
    war.  We visited ships on the East, Gulf, and West Coasts;
    interviewed officials from the Military Sealift Command, the U.S.
    Coast Guard, the American Bureau of Shipping, MarAd, the Merchant
    Marine Academy, and unions, as well as RRF crew members and ship
    managers; and reviewed studies and documents to assess the relative
    benefits of these program changes.  We examined the status and effect
    of post-war repair expenditures, changes in MarAd's policies for
    maintaining and preserving the ships, changes to MarAd's contractual
    agreement with ship manager companies, and new automated maintenance
    management systems.  We also assessed MarAd's plans for maintaining
    the readiness of the RRF and the consequences of reduced funding.

    To determine the appropriate readiness status for the RRF, we
    obtained and analyzed data on several strategic mobility factors that
    may diminish the need for RRF ships to be maintained in a
    high-priority status.  We analyzed the Mobility Requirements Study's
    volume I and II reports, using the Middle East scenario, to determine
    the times specific types of ships first loaded, the ports that were
    assumed to be loading cargo within the first 30 days, and the
    locations and readiness goals set in the study.  We discussed our
    analysis with Joint Chiefs of Staff officials.

    We reviewed the Army's Strategic Mobility Program's Management Plan
    to identify funding and plans for improvement to the continental
    United States infrastructure that would increase the mobility of
    selected military units to their seaports of embarkation.  We
    discussed the status of these improvements with Army headquarters,
    Forces Command, Transportation Command, and Military Traffic
    Management Command officials.

    To determine the current and future availability of crews, we
    reviewed Persian Gulf War RRF activation data, RRF crewing
    requirements, and labor availability estimates.  We sponsored a
    workshop on April 5, 1994, to discuss the impact of the declining
    merchant marine pool on U.S.  sealift capability, identify
    impediments in crewing RRF ships, and reach consensus among the
    participants on how to address the issues discussed.  We issued a
    report,\4 that provided a summary of views expressed at the workshop.

    We have issued several other products on issues related to the RRF.
    In our testimony, \5 we discussed several issues related to U.S.
    mobility capabilities that need to be resolved, including the Army's
    current ability to get cargo to the ports.  In our letter to the
    Maritime Administrator (GAO/NSIAD-94-96R, Jan.  7, 1994), we provided
    information on the latest selection of 12 roll-on/roll-off ships for
    the RRF.\6

    We stated that these ships would provide 1.6 million square feet of
    additional deck space for surge requirements, thereby increasing the
    fleet's roll-on/roll-off cargo capacity by 40 percent.  Three of the
    ships have been upgraded to U.S.  specifications, and the other nine
    ships are expected to be completed by November 1994.  Two of these
    ships are serving as Army prepositioning ships.  A complete list of
    related GAO products appears on the last page of this report.

    We conducted our review between August 1993 and June 1994 in
    accordance with generally accepted government auditing standards.

    --------------------
    \4 Strategic Sealift:  Summary of Workshop on Crewing the Ready
    Reserve Force (GAO/NSIAD-94-177, June 6, 1994).

    \5 Strategic Mobility:  Serious Problems Remain in U.S.  Deployment
    Capabilities (GAO/T-NSIAD-94-165, Apr.  26, 1994).

    \6 Roll-on/roll-off ships are important to the RRF because they can
    quickly load and unload track and wheeled vehicles such as tanks and
    trucks.  The mobility study recommended that 19 more roll-on/roll-off
    ships be added to the RRF.

    RRF READINESS HAS IMPROVED SINCE
    THE PERSIAN GULF WAR
    ============================================================ Chapter 2

    MarAd has made significant progress in implementing changes to
    address problems encountered while activating RRF ships for the
    Persian Gulf War.  It identified and corrected equipment
    deficiencies, instituted more uniform and comprehensive
    specifications for the deactivation and preservation of RRF ships,
    strengthened ship manager controls by expanding and clarifying the
    manager's contractual responsibilities, and developed and implemented
    automated information systems for tracking maintenance repairs.
    MarAd also initiated programs, such as assigning permanent, nucleus
    crews onboard high-priority ships to help maintain the RRF's material
    condition achieved after the war and alleviate crewing concerns.
    Total RRF program expenditures between fiscal years 1990 and 1993
    were more than $1 billion when Persian Gulf War activation and
    deactivation costs are included.\1

    Recent activations of the RRF have demonstrated the ships' ability to
    meet readiness requirements and operate with fewer mechanical
    failures.  These successful activations resulted largely from
    maintenance and repairs made during and after the war.  In fact,
    activations without prior notice occurred an average of only 7 months
    after the ships had been deactivated from the war.  However,
    continuing the present high readiness status of the RRF ships depends
    on MarAd's future budgets and maintenance strategies.

    --------------------
    \1 This figure includes $139 million to activate and $296 million to
    deactivate the RRF during the war.  In addition, MarAd was funded
    $615 million during fiscal years 1990 through 1993 for RRF
    maintenance and operations.

       MARAD HAS ADDRESSED WARTIME
       PROBLEMS
    ---------------------------------------------------------- Chapter 2:1

    MarAd spent more than $1 billion to resolve mechanical, management,
    and crewing problems encountered during Persian Gulf War activations.
    Problems targeted were the poor condition of the ships upon entry to
    the force; improper deactivation, as well as insufficient
    preservation and maintenance techniques; insufficient monitoring of
    ship manager companies; unknown, deferred, or unreported equipment
    deficiencies; and inadequate crewing.  MarAd has made significant
    progress toward solving those problems.

          EQUIPMENT DEFICIENCIES WERE
          IDENTIFIED AND CORRECTED
    -------------------------------------------------------- Chapter 2:1.1

    The war experience enabled MarAd to identify and repair equipment
    deficiencies at an average cost of $5.5 million per ship.  These
    repairs had been deferred because many of the ships had been laid up
    since being acquired for the RRF.\2

    Many ships had been added to the RRF with many known and unknown
    machinery deficiencies, and MarAd lacked the funding at that time to
    activate, fully inspect, and repair many of the ships.  In fact,
    prior to the war, only 34 ships had been activated since entering the
    RRF.

    --------------------
    \2 Before the war, RRF ships were maintained in an inactive status
    (known as lay-up) with all systems down, ship openings sealed, and
    interiors dehumidified.  The ships received limited inspections and
    maintenance due to the inactive status of the machinery.

          PRESERVATION AND MAINTENANCE
          TECHNIQUES WERE IMPROVED
    -------------------------------------------------------- Chapter 2:1.2

    Improper deactivation and inconsistent preservation maintenance
    techniques for RRF ships contributed to mechanical problems
    encountered during war activations.  Inadequate lay-up and
    maintenance techniques contributed to boiler problems, clogged pipe
    systems, freeze damage, and impurities in lubrication systems.  After
    the war, MarAd instituted more uniform and comprehensive
    specifications for the deactivation and preservation of RRF ships.
    For example, to reduce corrosion in boiler tubes--a problem for
    steam-powered ships laid up in colder climates--some boiler panels
    are now left uncovered, and fans and heaters are installed to improve
    the circulation of dehumidified air to prevent freezing.  These new
    techniques, however, have raised the cost of standard maintenance
    procedures.

          SHIP MANAGER CONTROLS WERE
          STRENGTHENED
    -------------------------------------------------------- Chapter 2:1.3

    Some ship managers contributed to activation delays during the war
    because of their lack of capability.  For example, two ship managers
    were unable to activate their ships due to their lack of knowledge.
    (These managers' contracts were subsequently canceled.) As a result
    of this and other contract management difficulties during the war,
    MarAd expanded and clarified ship managers' contractual
    responsibilities at an estimated annual cost increase of $18,000 per
    ship.  The new contracts raise the standards of technical competence,
    increase the number of technical employees per ship, clarify
    penalties, and emphasize monitoring ship manager performance.

          AUTOMATED MAINTENANCE
          INFORMATION SYSTEMS WERE
          DEVELOPED
    -------------------------------------------------------- Chapter 2:1.4

    Before the war, RRF ship logs and machinery history records appear to
    have been randomly kept by the chief and port engineers.  For
    example, according to MarAd officials during the war activation, one
    of five similar ships had recently had an engine overhaul, but MarAd
    personnel and ship managers were unsure which ship had been repaired.
    Up-to-date inventories of vital components and spare parts were also
    not available for the aging machinery on the RRF ships, which caused
    activation delays while some parts had to be manufactured and shipped
    to the activation sites.

    After the war, MarAd implemented automated systems for tracking
    maintenance, repairs, and spare parts inventories.  A Maintenance and
    Repair Tracking System has been developed by MarAd officials and
    contractors, and all repair funding requests must now be supported by
    deficiencies recorded in this system.  Contractors have also
    developed an automated system for maintaining spare parts records and
    are completing inventories of shipboard spares to update the system's
    records.  As of April 1994, MarAd had invested $26 million in its new
    logistics program, and annual spare parts costs are estimated to be
    $70,000 to $80,000 per ship.

          SHIP OUTPORTING WAS IMPROVED
    -------------------------------------------------------- Chapter 2:1.5

    The location of the RRF ships at the time of the war degraded the
    ships' ability to be activated within planned time frames.  Every
    ship required some maintenance at a shipyard before reaching its
    designated loading seaport.  Although half the RRF ships were
    outported--berthed at locations other than the three MarAd reserve
    fleet sites--they were not necessarily located near a shipyard.
    During activation for the war, the number of ships requiring
    simultaneous activation in a given location sometimes exceeded the
    capacity of the local shipyards.  As a result, queuing occurred, and
    some ship activations were delayed.

    When reassigning ships to a particular location, MarAd officials
    considered factors such as towing time; likely congestion in
    shipyards; and, for high-priority ships, transit times to likely
    seaports of embarkation.  By fiscal year 1994, MarAd had reassigned
    most RRF ships accordingly.  For example, 5- and 10-day ships have
    been better distributed according to shipyard facilities for
    activation, and the high-priority 4-day ships have been positioned
    closer to their ports of embarkation because they do not require
    shipyard services to be activated.

          KEY PERSONNEL ARE BEING
          ASSIGNED TO SHIPS IN REDUCED
          OPERATING STATUS
    -------------------------------------------------------- Chapter 2:1.6

    To address the problems of identifying crews and transporting them to
    the ships in a timely manner, MarAd placed the highest priority ships
    in reduced operating status (ROS) with permanent, nucleus crews
    onboard.\3 These crews form the core of the required operating crew,
    which ensures that key personnel needed for swift activation are
    onboard ships.  According to MarAd, about 50 percent of the senior
    engineers and 34 percent of the junior engineers required by the RRF
    are already serving onboard ROS ships.

    The current crew structure on a ROS ship consists of a Chief
    Engineer; 1st, 2nd, and 3rd assistant engineers; a qualified member
    of the Engineering Department; an electrician; a chief mate; a bosun;
    a steward/cook; and a steward/utility.  The crew's familiarity with
    the ship's particular operating systems and characteristics can avoid
    costly and time-consuming activation delays.  For example, during the
    war, one newly assigned crew could not keep the steam propulsion
    system operating shortly after the ship had been loaded and left the
    port.  The ship had to be towed back to port, where shipyard
    personnel that assisted in the ship's activation restored the system
    within 30 minutes.  ROS crews could also help newly arriving crew
    members make the transition to a level of full competence on an
    unfamiliar ship.

    --------------------
    \3 The highest priority ships are roll-on/roll-off ships that are
    required to be ready to load military cargo at the seaport by day 4
    of an activation.

       RECENT ACTIVATIONS SHOW THAT
       RRF READINESS HAS IMPROVED
    ---------------------------------------------------------- Chapter 2:2

    Comparisons of recent activations to those during the war demonstrate
    that MarAd's efforts to improve readiness have been successful.
    Sixteen of the 20 ships we reviewed had been activated for the war
    and were an average of 11.6 days late.  In 1993, some of those 20 RRF
    ships were activated earlier than Military Sealift Command or MarAd
    criteria; they were activated more quickly with fewer, less
    significant equipment failures and at less cost.  Military Sealift
    Command, American Bureau of Shipping, and MarAd officials agree that
    the improved readiness of RRF ships is largely due to the extensive
    repairs made during and after the war.

    Six of the 20 ships were activated without prior notice to test their
    readiness and therefore the tests were the most realistic tests of
    the RRF's ability to meet defense requirements.  All six ships were
    activated on time or earlier than the time required, and the average
    cost to activate them was about $1 million less than during the war.
    The ships had been inactive between 6 and 9 months, or an average of
    7 months, before their unannounced activations.  Tables 2.1 and 2.2
    compare the time and cost for five of the ships activated without
    notice both in wartime and in 1993.\4

                              Table 2.1

                Comparison of the Persian Gulf War and
               1993 Activation Times for Selected Ships

                                       Time to           Time to
    Ship                      Status  activate  Status  activate
    ------------------------  ------  --------  ------  --------
    Cape Breton                5 day    5 days   5 day    4 days
    Cape Inscription           5 day    5 days   4 day    3 days
    Cape Isabel                5 day   11 days   4 day    3 days
    Comet                      5 day   15 days   4 day    3 days
    Meteor                     5 day   15 days   4 day    4 days
    ------------------------------------------------------------

                                        Table 2.2

                          Comparison of the Persian Gulf War and
                         1993 Activation Costs for Selected Ships

                                  (Dollars in millions)

                                               Number of
                Activation  Deactivation          months    Activation  Deactivation
    Ship              cost          cost     deactivated          cost          cost
    --------  ------------  ------------  --------------  ------------  ------------
    Cape             $0.70         $3.40               6         $0.44         $0.92
     Breton
    Cape              0.90          3.70               9          0.52          0.10
     Inscrip
     tion
    Cape              1.53          5.58               6          0.35          0.10
     Isabel
    Comet             2.47          5.57               7          0.26          0.46
    Meteor            2.00          4.01               7          0.48          0.35
    ================================================================================
    Total            $7.60        $22.26                         $2.05         $1.93
    Average          $1.52         $4.45               7         $0.41         $0.39
    --------------------------------------------------------------------------------
    For both the wartime and 1993 activations without prior notice, DOD
    reimbursed MarAd for activation and deactivation costs.  Specific
    data that compares two of the five ships' recent tests and wartime
    activations follow:

    The Cape Isabel, a steam-powered ship, was built in 1976, added to
    the RRF in 1986, and laid up until its activation for the war in
    August 1990.  During its wartime activation, the ship had many
    equipment failures in its boiler system, fuel system, evaporators,
    and service generator.  After the war, MarAd spent almost $5.6
    million improving the ship's habitability and overhauling its steam
    engine and other major equipment.  In 1993, the ship was activated
    without prior notice and, according to the after-action report,
    overall ship systems operated well during the activation and the sea
    trial.

    The Comet, a steam-powered ship built in 1958, was added to the RRF
    in 1985, and laid up until its wartime activation in August 1990.
    During this activation, the ship encountered numerous problems with
    its steam plant, ballast tank pumps and indicators, salt water
    service systems, electrical equipment, and service generator.  During
    postwar deactivations, MarAd spent almost $5.6 million overhauling
    the ship.  When the ship was activated without notice in 1993, no
    major deficiencies were reported during the activation or the sea
    trial.

    The remaining 14 ships we reviewed were activated on less demanding
    schedules for either sea trials or operations.  These activation
    costs were on average about $0.6 million less than during wartime
    activations.  Also, there were fewer and generally less critical
    equipment failures and fewer delays in making these repairs.

    --------------------
    \4 The sixth ship was not activated during the war.

       NEW STRATEGIES TO SUSTAIN
       READINESS DEPEND ON FUNDING
       AVAILABILITY
    ---------------------------------------------------------- Chapter 2:3

    MarAd has initiated RRF maintenance strategies that will sustain
    fleet readiness.  These strategies combine various actions taken
    after the Persian Gulf War to solve activation problems at an annual
    cost of $3 million for a 4- or 5-day ship compared with $800,000 for
    an average ship before the war.  MarAd believes that these strategies
    should provide reasonable assurance that MarAd can activate RRF ships
    within required time frames.  Table 2.3 identifies the major
    components of MarAd's current maintenance strategies.

                              Table 2.3

                Strategies for Maintaining Various RRF
                           Readiness Levels

    Major components          4 days        5 days       10 days
    ------------------  ------------  ------------  ------------
    Number of ships\a             36            27            39
    Annual cost per            $3.12         $3.09         $2.15
     ship (in
     millions)
    Deactivation                 ROS   Fully laid-   Fully laid-
     status                                     up            up
    Location               Outported     Outported     Mostly at
                                                         Reserve
                                                      Fleet site
    Crew size                     10             2             0
    Activation            Annual sea   Annual dock   Annual dock
     frequency                trials       and sea       and sea
                                            trials        trials
    Performance of      Continuously  Semiannually  Semiannually
     preventative        by the crew            by      by fleet
     maintenance                        industrial     personnel
                                       contractors
    ------------------------------------------------------------
    \a These numbers are based on DOD's Mobility Requirements Study.
    MarAd also plans to maintain 40 ships in a 20-day readiness status.

    The ROS concept and the annual test activations are significant
    changes to the RRF maintenance program.  MarAd cannot be certain that
    funding will be available in the future to continue all of its
    preferred maintenance strategies and has begun examining variations
    within its overall RRF maintenance program.  For example, MarAd
    assigned one 14-person crew onboard two roll-on/roll-off ships
    berthed together, and it is considering placing all 5-day ships in
    ROS with 9-person crews onboard.

    MarAd's fiscal year 1994 RRF budget request submitted to the Congress
    for maintenance and operations was $136 million, or approximately
    $221 million less than the $357 million identified in the Mobility
    Requirements Study.  To make up this difference, only 11 of the
    designated 22 4-day ships currently have permanent, nucleus crews.
    Also, the number of planned maintenance test activations was reduced
    from 93 in accordance with mobility study standards to 32.  MarAd
    officials concluded that reduced funding in fiscal year 1994 would
    not result in a great degradation of readiness.  Although budget
    constraints are expected to continue, MarAd's fiscal year 1995 budget
    request includes $246 million for maintenance and operations.

       CONCLUSIONS
    ---------------------------------------------------------- Chapter 2:4

    The readiness of the RRF has improved since the Persian Gulf War due
    to the $1 billion invested in the program.  Officials from the
    Military Sealift Command, American Bureau of Shipping, and MarAd
    agree that the satisfactory readiness of RRF ships is primarily due
    to the identification and repair of machinery deficiencies during and
    after the war.  Despite this investment, however, these officials
    could not say how long the ships will stay as ready.  They agree that
    continuing the present readiness status of RRF ships depends on
    MarAd's future budgets and maintenance strategies.

    RRF READINESS EXCEEDS OTHER
    DEPLOYMENT COMPONENTS AND IS NOT
    SUPPORTABLE
    ============================================================ Chapter 3

    On the basis of DOD's 1992 Mobility Requirements Study, MarAd plans
    to keep 63 RRF ships in a high state of readiness (i.e., ready to
    activate within 4 or 5 days) starting in fiscal year 1996.  However,
    this high state of readiness exceeds the Army's ability to transport
    heavy equipment, such as large vehicles, tanks, weapon systems, and
    helicopters, to seaports for initially deploying units.  Army
    deployment operations are hindered in the continental United States
    by deteriorating transportation-related facilities and overseas by
    its limited ability to unload ships in underdeveloped seaports.
    Moreover, DOD's mobility study's recommendation to keep
    63 RRF ships in a high readiness status is not justified by the
    detailed study analysis.

       DETERIORATED INFRASTRUCTURE
       CONSTRAINS ARMY OPERATIONS
    ---------------------------------------------------------- Chapter 3:1

    In the event of a large-scale contingency, the Army must be able to
    deploy heavy divisions rapidly from the continental United States.\1
    These divisions are located at Fort Stewart and Fort Benning,
    Georgia; Fort Campbell, Kentucky; and Fort Hood and Fort Bliss,
    Texas.  The movement of people, equipment, and supplies to ports of
    embarkation is the first stage of a major operation, called "fort to
    port" movement.  Figure 3.1 displays the fort to seaport movement for
    selected heavy divisions.

       Figure 3.1:  Key Fort to Port
       Movements

       (See figure in printed
       edition.)

       Source:  GAO.

       (See figure in printed
       edition.)

    We reported in 1992 that fort to port cargo movement during Operation
    Desert Shield was constrained by deteriorated rail facilities that
    could have threatened the Army's ability to move equipment to
    seaports rapidly.\2 Although the equipment reached the ports on time
    despite serious rail deficiencies, movement of equipment for Desert
    Shield was on a smaller scale and took a longer time than strategic
    mobility plans require today.  Current deployment plans call for
    moving the same amount of cargo in
    8 weeks that was moved during the first 6 months of the Persian Gulf
    War.

    The Army has a plan that identifies needed improvements to the
    transportation infrastructure in the continental United States to
    meet the cargo flows assumed in DOD's mobility study.  The Army's
    plan identifies improvement projects such as acquiring rail cars and
    upgrading or constructing facilities, highway, and rail networks and
    ports for receiving, storing, and loading Army equipment and
    supplies.  These improvements are projected to cost about $550
    million and be funded through fiscal year 2001.  As of August 1994,
    only $28 million had been spent on these projects.  At the Army's
    planned funding levels, some projects will take 15 to
    20 years to complete and, therefore, will not be in place by the 1999
    time frame assumed in the mobility study.

    Army officials acknowledged that many infrastructure conditions
    remain essentially the same since the war.  The deployment problems
    of three key contingency divisions and the improvements identified by
    the Army are discussed below.  (The Mobility Requirements Study
    assumes that these three divisions are a part of an early response.)

    The 101st Airborne Division (Air Assault) deploys from Fort Campbell,
    which is approximately 630 miles from its seaport of embarkation in
    Jacksonville, Florida.  The mobilization plan for this division
    relies heavily on the use of rail transportation.  However, this
    method of transportation could not be used during Desert Shield
    because of deteriorated conditions and limitations of the
    Hopkinsville, Kentucky, rail interchange.

    The Army has identified approximately $23 million in infrastructure
    improvements that are necessary to meet the requirements in DOD's
    mobility study.  Projects identified include rail upgrades,
    additional track (for a Hopkinsville bypass), and a pallet warehouse.
    In addition, 200 rail cars are to be acquired for Fort Campbell to
    execute the mobility plans.  At the time of

    The 1st Cavalry Division deploys out of Fort Hood, which is about
    320 miles from its seaport of embarkation in Beaumont, Texas.  The
    division's mobilization plan calls for the lead brigade to move to
    this seaport by rail.  However, the existing rail system at Fort Hood
    cannot support these deployment requirements, according to the
    Military Traffic Management Command's 1993 Engineering Study.

    Infrastructure improvements totaling $69 million have been
    identified.  Projects include rail upgrades, additional tracks for
    storing and switching rail cars, a warehouse, and airfield upgrades.
    In addition, 512 rail cars are needed for prepositioning at this
    installation, but only 14 percent had been delivered at the time of
    our review.

    The 24th Infantry Division (Mechanized), stationed at Fort Stewart is
    only 40 miles from its designated seaport of embarkation in Savannah,
    Georgia.  Fort Stewart was one of the first units during Desert
    Shield to transport large numbers of heavy tracked vehicles by rail.
    However, train speeds were restricted to 10 miles per hour or less,
    compared with 25 miles per hour under normal circumstances, because
    of deteriorated rail conditions.

    Fort Stewart needs $30 million in infrastructure upgrades and
    construction to meet deployment goals.  Projects identified include
    rail passing tracks, a container handling facility, and a cargo
    staging area.  Of the 220 rail cars needed to meet mobility
    requirements, 42 percent are currently located at the fort.

    The Army believes that many infrastructure improvements have been
    accomplished that are necessary to support the initial surge units,
    as demonstrated by readiness exercises.  The Army conducts these
    exercises to train heavy units in the continental United States on
    strategic deployment.  However, only a portion of a division takes
    part in the exercises.  For example, in September 1993, the Army
    conducted an exercise moving selected military equipment for a
    brigade task force of the 1st Cavalry Division from Fort Hood to
    Beaumont.  The equipment used for this exercise only accounted for
    474 of 1,975 pieces of the brigade task force.  In 1994, the Army
    conducted a similar exercise with 900 pieces of equipment.  Movement
    of an entire division has not yet been tested in the exercises to
    date.

    --------------------
    \1 Heavy divisions consist of the armored and mechanized units that
    are trained for mobile warfare and equipped with tanks and armored
    fighting vehicles.

    \2 Operation Desert Shield:  Problems in Deploying by Rail Need
    Attention (GAO/NSIAD-93-30, Nov.  13, 1992).

       ABILITY TO UNLOAD SHIPS IS
       LIMITED IN UNDERDEVELOPED
       OVERSEAS PORTS
    ---------------------------------------------------------- Chapter 3:2

    The Army's ability to meet its mobility requirements is also affected
    by its capability to deliver forces to underdeveloped or damaged
    overseas seaports.  The Joint Logistics Over the Shore is a system of
    floating causeways that the Army can use to unload ships when the
    ships cannot enter a foreign seaport.  As part of that concept,
    auxiliary crane ships will be used to unload RRF ships.  Overall, the
    auxiliary crane ships are not kept in as high a readiness status as
    the surge cargo ships.  Of the nine crane ships in the RRF, four are
    maintained in a 5-day status and five are maintained in a 10-day
    status.

    The Army plans to unload equipment and supplies from ships within
    48 hours of the ships reaching their overseas destination.  A recent
    DOD Inspector General report determined that the Army would not be
    able to meet its 48-hour requirement if all the factors--including
    the ships' distances from shore, the ocean conditions, the number of
    crane ships available, and the number of watercraft (small ships,
    tugboats, and floating causeways)--were not optimal.  Army officials
    are planning on improving the effectiveness of the Joint Logistics
    Over the Shore concept through training and additional acquisition.

       SURGE SEALIFT REQUIREMENTS ARE
       NOT SUPPORTABLE
    ---------------------------------------------------------- Chapter 3:3

    The mobility study examined a range of potential crises, including
    regional wars in Europe, the Middle East, and Korea, in the 1999 time
    frame.  The most logistically demanding scenario examined, because of
    the number of forces and the distances involved, was a major regional
    war in the Middle East.  DOD used a model's\3 results to support the
    study's recommendation that the RRF maintain 36 ships in 4-day status
    and 27 ships in 5-day readiness.

    Our analysis of DOD's model for the Middle East scenario does not
    support the study's recommendation.  The study's model assumed that 6
    RRF roll-on/roll-off ships, not 36, would be needed at the seaports
    of embarkation by day 4 and that 8 other RRF ships, not 27, would be
    needed at the seaports by day 5.  By the 10th day, the model assumed
    that only
    36 ships would have arrived at the seaports.  DOD officials could not
    explain the wide discrepancy between the model's data and the
    mobility study's recommendation; however, DOD officials confirmed
    that they believe this recommendation is still valid.

    DOD is conducting another review of its strategic mobility
    requirements.  This review will be based on the requirement from the
    October 1993 Bottom-Up Review to fight two regional conflicts nearly
    simultaneously.  DOD anticipates issuance of a report by January
    1995.

    In addition to DOD's ongoing mobility study, the Transportation
    Command is conducting an RRF modernization study.  The objectives of
    this study are to determine the optimum RRF size, composition, and
    readiness to meet surge sealift requirements.  The study's final
    recommendations will be submitted to DOD's Joint Staff/Transportation
    Command working group for inclusion in an update to the Bottom-Up
    Review report.

    --------------------
    \3 The model applied was the Model for Inter-theater Deployment by
    Air and Sea.

       CONCLUSIONS
    ---------------------------------------------------------- Chapter 3:4

    DOD's determination of the number of RRF ships it wants maintained at
    various readiness levels is overstated, given (1) the current ability
    of the Army to get from the forts to the ports and (2) the disparity
    between the output of the analytical model and the mobility study's
    recommendation.  The results of DOD's updated mobility study should
    guide future RRF ship readiness levels.

    Given these problems, we believe DOD needs to provide more realistic
    readiness requirements to MarAd.  We recognize one lesson of the
    Persian Gulf War--RRF ships need to be more ready than they were at
    that time--however, we also believe that the government should not
    pay to keep an excess number of ships in a high-priority status.

       RECOMMENDATION
    ---------------------------------------------------------- Chapter 3:5

    We recommend that the Secretary of Defense direct the Commander in
    Chief, Transportation Command, to annually review RRF ship readiness
    requirements provided to MarAd and ensure that they are in line with
    current military deployment capabilities.

       DOD COMMENTS AND OUR EVALUATION
    ---------------------------------------------------------- Chapter 3:6

    DOD generally agreed with our findings and concurred with our
    recommendation to the Secretary of Defense.  DOD stated that RRF
    readiness requirements are reviewed annually in cooperation with
    MarAd as part of budget reviews.  DOD also noted that RRF readiness
    levels are currently being examined as part of the Mobility
    Requirements Study Bottom-Up Review Update.

    DOD's comments are reproduced in appendix I.

    FUTURE AVAILABILITY OF MERCHANT
    MARINERS REMAINS A CONCERN
    ============================================================ Chapter 4

    MarAd and DOD agree that a viable U.S.  merchant marine industry is
    the best source for mariners to crew the RRF in an emergency.
    However, future declines in the pool of U.S.  mariners seem likely
    and would affect MarAd's ability to adequately crew these ships.  The
    Department of Transportation has proposed legislation designed to
    help support the U.S.  merchant marine industry.  If, however, this
    legislation is not implemented or does not adequately support a
    mariner labor pool capable of providing enough mariners for the RRF,
    other measures will need to be taken.  Both DOD and MarAd have
    studied the idea of a merchant marine reserve program to either
    supply or augment the required crew.  Maritime labor unions, who are
    opposed to reserve programs, have proposed other alternatives, such
    as chartering commercially useful RRF ships to U.S.  operators.  DOD
    is also examining a proposal that has the potential of eventually
    increasing the available U.S.  merchant marine labor pool.

       RRF CREWING REQUIREMENTS
    ---------------------------------------------------------- Chapter 4:1

    The RRF currently requires around 3,700 mariners for 108 ships.  To
    meet DOD's Mobility Requirements Study, the RRF will require
    approximately 4,800 mariners, as shown in table 4.1.  DOD is
    currently reevaluating the size and composition of the RRF in an
    update of the Mobility Requirements Study.  Once DOD determines the
    number and type of ships in the RRF, crewing levels in accordance
    with Coast Guard regulations and MarAd recommendations can be
    reestablished.

                              Table 4.1

               Estimates of RRF Crewing Requirements to
                      Meet DOD's Mobility Study
                           Recommendations

                                 No.         MarAd
                                  of   recommended    Total crew
    Ship type                  ships     crew size   requirement
    ------------------------  ------  ------------  ------------
    Auxiliary crane               10            39           390
    Breakbulk                     48            34         1,632
    Heavy lift                     7            37           259
    Roll-on/Roll-off              36            33         1,188
    Troop                          2            70           140
    Tankers                       36            33         1,188
    ============================================================
    Total                        139                       4,797
    ------------------------------------------------------------
    Source:  DOD.

    According to DOD, if the RRF crewing requirements remain about 4,800,
    and the U.S.  merchant marine labor pool continues to decline, steps
    must be taken to ensure that an adequate pool of qualified mariners
    is in place.

       U.S.  MERCHANT MARINE POOL IS
       DECLINING
    ---------------------------------------------------------- Chapter 4:2

    Crews for the RRF come from the labor pool that exists to operate
    ships in the active U.S.  commercial fleet.  Each merchant mariner
    job supports about two mariners in the labor pool to allow for
    training, vacations, and job rotations.  The U.S.  commercial
    ocean-going labor pool, from which crew members are drawn, currently
    consists of about 21,000 mariners competing for about 9,300 shipboard
    jobs.  Therefore, MarAd should not have a labor supply problem for
    crewing RRF ships in the near term.

    Events in the maritime industry have had a direct impact on the
    potential crewing of RRF ships.  During the 1960s, commercial ships
    registered in the United States typically went to sea with crews of
    more than
    40 persons.  The average crew size has since declined in response to
    labor-saving technology and automation.  For example, the
    introduction of automated boiler controls during the mid-1960s and
    diesel-powered ships during the 1970s reduced crew size.  As a
    result, the number of shipboard jobs decreased.  For example, in
    1970, the 843 ships in the U.S.-registered, ocean-going fleet
    provided around 40,000 jobs.  By 1993, the number of ships had
    declined to 350, and only about 9,300 jobs were available.  The
    gradual decline in the pool of qualified and available mariners
    needed for the RRF is shown in figure 4.1.

       Figure 4.1:  Decline in U.S.
       Merchant Mariners and Seafaring
       Employment for the Years 1960
       Through 1990

       (See figure in printed
       edition.)

    Source:  GAO.

       RESOLVING FUTURE CREWING
       CONCERNS
    ---------------------------------------------------------- Chapter 4:3

    The Department of Transportation and DOD have conducted numerous
    studies that address the continued decline in the merchant marine
    industry.  General and specific proposals have been suggested to aid
    the industry.  Thus far, Transportation, DOD, and others involved,
    such as unions and ship operators, have been unable to reach
    consensus on specific programs or crewing alternatives.  Therefore,
    action has not occurred.

          1994 MARITIME SECURITY
          PROGRAM
    -------------------------------------------------------- Chapter 4:3.1

    Transportation has proposed legislation--the Maritime Security
    Program (H.R.  4003 and S.  1945)--to the 103rd Congress to help
    revitalize the U.S.  Merchant Marine.  The $1 billion, 10-year
    program proposes subsidizing up to 52 U.S.-registered liner ships.
    One of the program's goals is to provide additional sealift capacity
    for national emergencies.  Therefore, this program would help
    maintain an active pool of U.S.  mariners that can provide the
    necessary crews to operate RRF ships during an emergency.  However,
    the specific number of mariners the program may ultimately provide to
    RRF vessels is not known.

          EXPANSION OF NAVAL MERCHANT
          MARINE RESERVE
    -------------------------------------------------------- Chapter 4:3.2

    In 1986, the Navy examined crewing alternatives for the RRF and DOD
    sealift ships.  One alternative was to expand the existing Merchant
    Marine Reserve component of the U.S.  Naval Reserve.  At that time,
    the Merchant Marine Reserve's purpose was to maintain an organization
    of merchant marine officers who were trained to operate merchant
    ships and a shoreside cadre assigned to naval activities supporting
    strategic sealift.  The expanded program would include inactive,
    qualified mariners.  The cost to implement this alternative was
    estimated to be $10 million annually.  The Congress directed
    Transportation to explore establishing a civilian reserve program.

          CREATION OF A CIVILIAN
          RESERVE
    -------------------------------------------------------- Chapter 4:3.3

    In 1987, MarAd examined the concept of creating a civilian merchant
    marine reserve program.\1 Qualified mariners who were not actively
    sailing but were willing to commit themselves under contract for
    service when needed would form the base for this program.  MarAd
    envisioned that the program would be comprised of 6,480 mariners and
    estimated its cost to be $46 million a year.  By 1991, MarAd had
    completed another study that included the concept of a civilian
    merchant marine reserve.  MarAd studied four options that could
    increase mariner availability.  These options ranged from a program
    with 500 members costing between approximately $3 million and $6
    million annually to a program with over 2,000 mariners costing about
    $19 million annually.

    Studies completed after the Persian Gulf War also called for the need
    to consider a civilian reserve.  For example, a 1991 Department of
    Transportation Inspector General report recommended that a civilian
    reserve program based on MarAd's 1991 study be implemented.  In
    addition, a 1991 DOD and Transportation RRF working group report
    recommended that the agencies jointly pursue efforts to formulate a
    civilian merchant marine reserve program.

    --------------------
    \1 The Secretary of Transportation has the authority to establish and
    maintain a voluntary organization for the training of U.S.  citizens
    to serve on U.S.  merchant ships (46 App.  U.S.C.  1295e).

          NEW NAVAL RESERVE UNITS
    -------------------------------------------------------- Chapter 4:3.4

    In 1986, the Navy examined an alternative establishing specific new
    Naval Reserve units dedicated to manning all defense sealift ships.
    These units would be comprised of about 9,000 personnel who are
    members of existing naval reserve programs and naval retirees.  The
    cost of this alternative was estimated to be $46 million annually.

    In 1988 and 1989, the Navy told the Congress a number of its concerns
    about the use of naval reservists for crewing RRF ships.  The Navy
    stated that (1) naval reservists would not be available until DOD
    mobilization, even though RRF ships would most likely be requested to
    be activated before that time; (2) civilian mariners, not Navy
    reservists, have the expertise in operating RRF ships; (3) no
    training capability is currently available in the armed forces for
    training personnel to operate civilian ships; and (4) crewing RRF
    ships with naval reservists would change their noncombatant status
    under international law.

          MARITIME LABOR UNION VIEWS
    -------------------------------------------------------- Chapter 4:3.5

    Maritime labor unions have opposed government efforts to establish
    any merchant marine reserve.  They believe that a government reserve
    program would limit potential future jobs.  They also believe that
    the potential implementation of any merchant marine reserve program
    shows a lack of support for the U.S.  commercial merchant marine
    industry and that government funds should be directed toward aiding
    the maritime industry.

    Maritime labor unions have proposed that commercially useful ships in
    the RRF be chartered to U.S.  operators.  This proposal would help
    maintain a trained and experienced crew available at no cost to the
    government.  The chartered rate would be set at the market rate and
    would be reduced if there were no U.S.-flag competitors.  The terms
    of the charter would include a guarantee that an operational ship
    would be made available to DOD when needed.  However, because these
    ships would be engaged in active shipping, some ships would have to
    first unload cargo and then return to the United States when notified
    and, therefore, might not be available to help meet DOD's surge
    shipping requirements.

    Another maritime labor union proposal is to develop a designated
    cadre of volunteers from within the ranks of the unions to be trained
    and available for surge call-up.  This cadre would consist of three
    times the number of crew members required for RRF ships to account
    for mariners currently at sea and others not immediately available.
    DOD would set the standards for training, and mariners would receive
    2 weeks paid training aboard RRF ships.  The cost of training,
    mariner wages, subsistence, transportation, and ship activity would
    be provided by DOD, according to this proposal.  The cost for this
    proposal was not provided.

          OTHER RECENT PROPOSALS
    -------------------------------------------------------- Chapter 4:3.6

    At the RRF crewing workshop we sponsored in April 1994, MarAd
    presented an emergency crewing concept that would allow the unions
    time to assemble regular crews from the commercial sector.  Under the
    proposal, teams of 10 to 15 inactive mariners would assist ships'
    managers to activate RRF ships.  The activation teams would then step
    aside once union crews reported to the ships.  If some mariners were
    not available from a union, then team members could be tasked to fill
    those slots.  MarAd stated that 2,000 mariners would be needed for
    this program.  MarAd estimated that the initial cost would be $2.2
    million and that the program would eventually cost around $11 million
    annually.  However, funding to develop this program was not approved
    in MarAd's fiscal year 1995 budget.

    DOD is currently considering a concept to move Navy ships, such as
    oilers, combat stores ships, and salvage ships, into the Military
    Sealift Command.  Civilian mariners could crew these ships, which is
    a practice the Military Sealift Command currently uses for crewing
    its fast sealift ships.  This concept could result in an increase in
    the size of active mariner pool and therefore the number of mariners
    available to the RRF.  The number of mariners that could become part
    of the active pool would depend upon the mariner-to-billet ratio used
    by the Military Sealift Command.  This concept may also result in
    substantial Navy cost savings because civilian crews aboard Sealift
    Command auxiliary ships are generally smaller than Navy crews aboard
    ships assigned to Navy battle forces.

       CONCLUSIONS
    ---------------------------------------------------------- Chapter 4:4

    In 1986, the Chairman of the House Committee on Merchant Marine and
    Fisheries recognized the warning signs of a declining pool of
    mariners when he said that "inadequate manning is the Achilles heel
    of emergency sealift." The Persian Gulf War clearly demonstrated how
    vulnerable the RRF could be if sufficient numbers of properly skilled
    mariners are not available to sail when the ships are ready.
    However, since the war, little has been done to improve the
    likelihood that RRF ships will be adequately crewed in the future.
    Neither DOD nor MarAd has proposed alternatives that seem to garner
    universal consensus--including from the Congress, the Coast Guard,
    maritime unions, and ship operators.  Our workshop was the first time
    many of these players were together discussing this issue.

    Crewing the RRF will become a major problem as the pool of available
    mariners declines and the requirements remain stable or grow.

       RECOMMENDATION
    ---------------------------------------------------------- Chapter 4:5

    We recommend that the Secretary of Transportation direct the Maritime
    Administrator to annually assess whether an adequate number of
    experienced U.S.  merchant mariners would be available to crew RRF
    ships within DOD's specified time frames.  If these assessments
    indicate that the number of qualified mariners may not be sufficient,
    the Secretary should propose a specific merchant marine crewing
    alternative to the Congress.

       TRANSPORTATION COMMENTS AND OUR
       EVALUATION
    ---------------------------------------------------------- Chapter 4:6

    Transportation partially concurred with our recommendation to
    annually assess the number of qualified U.S.  mariners available to
    crew RRF ships and, if necessary, report crewing options.
    Transportation said it maintains maritime workforce statistics on the
    size and the composition of U.S.  merchant mariners and that the
    Coast Guard is making progress toward improving the accuracy
    regarding availability of mariners.  However, this information is not
    reported to the Congress in conjunction with defense requirements.
    We believe that MarAd's assessment would be an appropriate first step
    to define the effect that the declining U.S.  merchant marine pool
    might have on national security.

    Transportation said that the recommendation should focus on the need
    for reemployment rights legislation for U.S.  merchant mariners if
    called upon to serve during a war or national emergency.  It pointed
    out that reemployment rights were discussed in our workshop report.
    While Transportation acknowledged that consensus has not been
    achieved on certain proposals--such as a civilian merchant marine
    reserve or expansion of the naval merchant marine reserve--it
    believes that identified crewing proposals have the potential to
    achieve consensus.  Transportation stated that our workshop was
    particularly beneficial toward providing a forum to meet this end.
    Transportation also noted that it is hopeful that its Maritime
    Security Program, designed to strengthen the U.S.  merchant marine,
    will pass the Congress this fall.

    We do believe that reemployment rights for U.S.  mariners equivalent
    to the rights and benefits provided any member of a reserve component
    of the Armed Forces would be fair and equitable.  However, the number
    of mariners who would be influenced to serve on RRF ships by this
    incentive is unknown and, therefore, the impact of such a program
    cannot be determined.  In view of the continuing decline in the pool
    of U.S.  mariners, we believe the central issue of how to crew RRF
    ships in the future has not been adequately addressed.  Therefore, we
    believe that an annual assessment of the crewing issue could clearly
    identify specific actions needed to meet defense objectives related
    to sealift requirements.  Further, the Congress has considered
    legislation for reemployment rights three times, and has not approved
    it twice, and at the time of issuance of this report, passage was
    still uncertain as was Maritime Security Reform passage.

    The full text of Transportation's comments is reproduced in appendix
    II.

    (See figure in printed edition.)Appendix I
    COMMENTS FROM THE DEPARTMENT OF
    DEFENSE
    ============================================================ Chapter 4

    (See figure in printed edition.)

    (See figure in printed edition.)

    Now on pp.  10 and 11.

    (See figure in printed edition.)

    Now on pp.  14-20.

    (See figure in printed edition.)

    (See figure in printed edition.)

    Now on pp.  21-24.

    See comment 1.

    (See figure in printed edition.)

    Now on pp.  24 and 25.

    See comment 2.

    (See figure in printed edition.)

    Now on pp.  25 and 26.

    See comment 3.

    (See figure in printed edition.)

    Now on pp.  27-32.

    (See figure in printed edition.)

    Now on pp.  30-32.

    Now on pp.  5 and 26.

    (See figure in printed edition.)

    Now on pp.  5 and 32-33.

    The following are GAO's comments on the Department of Defense's (DOD)
    letter dated October 3, 1994.

       GAO COMMENTS
    ---------------------------------------------------------- Chapter 4:7

    1.  Our report acknowledges that the Army's strategic mobility
    program identified infrastructure improvement projects necessary to
    meet the cargo flow time frames required in DOD's mobility study.
    However, our main point is that the Army lacks the capability today
    to transport cargo from the fort to the port in sync with the RRF
    ship readiness.  Further, our report notes given current funding
    levels, most infrastructure improvement projects will not be
    completed by the Mobility Requirements Study goal of fiscal year
    1999.  The additional concerns DOD expressed concerning readiness
    status are addressed in comment three.

    2.  Our report focuses on the Army's current ability to unload cargo
    at underdeveloped seaports rather than on the Army's intention to
    improve future capabilities.

    3.  After evaluating DOD's comments, we revised our caption for this
    section to more accurately reflect the narrative presented.  DOD did
    not provide any additional data to explain the large disparity
    between our data analysis and the recommendation.  DOD also stated
    that military judgment had been a factor in establishing the RRF
    readiness requirements but the ongoing strategic mobility review
    suggests that lower levels of readiness would provide a "more exact
    match to port loading capability." We agree.

    (See figure in printed edition.)Appendix II
    COMMENTS FROM THE DEPARTMENT OF
    TRANSPORTATION
    ============================================================ Chapter 4

    (See figure in printed edition.)

    (See figure in printed edition.)

    See comment 1.

    Now on p.  2.

    (See figure in printed edition.)

    See comment 2.

    See comment 2.

    See comment 2.

    See comment 2.

    Now on p.  10.
    See comment 2.

    (See figure in printed edition.)

    See comment 2.

    Now on p.  11.
    See comment 2.

    Now on p.  11.
    See comment 2.

    See comment 1.

    See comment 2.

    See comment 1.

    Now on p.  14.
    See comment 1.

    (See figure in printed edition.)

    Now on p.  14.
    See comment 2.

    Now on p.  14.
    See comment 2.

    Now on p.  14.
    See comment 2.

    Now on p.  15.
    See comment 2.

    See comment 1.

    Now on p.  16.
    See comment 2.

    (See figure in printed edition.)

    Now on p.  19.
    See comment 2.

    Now on p.  20.
    See comment 1.

    Now on p.  27.
    See comment 3.

    (See figure in printed edition.)

    Now on p.  29.
    See comment 3.

    Now on p.  29.
    See comment 3.

    (See figure in printed edition.)

    Now on p.  32.
    See comment 3.

    Now on p.32.
    See comment 3.

    (See figure in printed edition.)

    The following are GAO's comments on the Department of
    Transportation's letter dated September 29, 1994.

       GAO COMMENTS
    ---------------------------------------------------------- Chapter 4:8

    1.  Our final report has been modified to reflect Transportation's
    specific and technical suggestions.

    2.  After evaluating Transportation's comments and verifying our
    sources, we believe the facts are accurately presented.  We did not
    change our final report.

    3.  Our commentary concerning the reemployment rights issue are found
    on pages 33 and 34.  .

    MAJOR CONTRIBUTORS TO THIS REPORT
    ========================================================= Appendix III

       NATIONAL SECURITY AND
       INTERNATIONAL AFFAIRS DIVISION,
       WASHINGTON, D.C.
    ------------------------------------------------------- Appendix III:1

    Norman Rabkin, Associate Director
    Bob Eurich, Assistant Director
    Brenda Farrell, Evaluator-in-Charge
    Penny Berrier, Evaluator
    Colin Chambers, Evaluator
    Karen Blum, Communications Analyst

       NORFOLK REGIONAL OFFICE
    ------------------------------------------------------- Appendix III:2

    Lawrence Dixon, Senior Evaluator
    Carolyn McClary, Evaluator

    RELATED GAO PRODUCTS
    ============================================================ Chapter 1

    The National Defense Reserve Fleet--Can It Respond to Future
    Contingencies?  (GAO/LCD-76-226, Oct.  6, 1976).

    A Time to Consider Alternative Sources of Quick-Response Sealift
    Capability (GAO/LCD-78-244, Feb.  7, 1979).

    Navy Sealift:  Observations on the Navy's Ready Reserve Force
    (GAO/NSIAD-86-168, Aug.  18, 1986).

    Army Deployment:  Better Transportation Planning Is Needed
    (GAO/NSIAD-87-138, June 18, 1987).

    Industry Concerns Regarding the Policies and Procedures of the
    Military Sealift Command (GAO/T-NSIAD-88-40, Aug.  8, 1988).

    Part of the National Defense Reserve Fleet Is No Longer Needed
    (GAO/T-NSIAD-91-44, July 11, 1991).

    Strategic Sealift:  Part of the National Defense Reserve Fleet Is No
    Longer Needed (GAO/NSIAD-92-3, Oct.  7, 1991).

    Desert Shield/Storm:  U.S.  Transportation Command's Support of
    Operation (GAO/NSIAD-92-54, Jan.  9, 1992).

    Shipbuilding:  Navy's Plan to Acquire Additional Strategic Sealift
    (GAO/NSIAD-92-224, July 30, 1992).

    Operation Desert Shield:  Problems in Deploying by Rail Need
    Attention (GAO/NSIAD-93-30, Nov.  13, 1992).

    DOD's Mobility Requirements:  Alternative Assumptions Could Affect
    Recommended Acquisition Plan (GAO/NSIAD-93-103, Apr.  22, 1993).

    Management Reform:  GAO's Comments on the National Performance
    Review's Recommendations (GAO/OGC-94-1, Dec.  3, 1993).

    Letter to the Maritime Administrator (GAO/NSIAD-94-96R, Jan.  7,
    1994).

    Strategic Mobility:  Serious Problems Remain in U.S.  Deployment
    Capabilities (GAO/T-NSIAD-94-165, Apr.  26, 1994).

    Strategic Sealift:  Summary of Workshop on Crewing the Ready Reserve
    Force (GAO/NSIAD-94-177, June 6, 1994).