North Island repair shop busts Navy's budget

A big backlog of unrepaired fighter jets has been growing at the Navy's Fleet Readiness Center Southwest on North Island, and the cost of fixing the issue is likely to be steep.

So shows a June 30 report by the U.S. Government Accountability Office regarding Navy aircraft repair operations in San Diego and two similar centers in Cherry Point, North Carolina, and Jacksonville, Florida.

The problem, the audit says, boils down to too much work for too few parts and staffers, and not enough budgeting.

"To the extent that the [centers] do not complete work ordered and funded by year-end, the work and related funding will be carried over into the next fiscal year," the report explains.

Auditors discovered that "actual adjusted carryover exceeded allowable carryover in 10 of 11 fiscal years reviewed because orders exceeded work performed by more than expected."

As a result, the total backlog at the three centers "grew to about $1 billion at the end of fiscal year 2014."

In October 2012, the report says, North Island, which bills itself as the birthplace of naval aviation maintenance, "accepted an order totaling $1.8 million to perform inspections and repairs on 5 high flight hour F/A-18 Hornet aircraft."

According to the audit, "This order was amended 14 times in fiscal year 2013 to increase the number of aircraft to 21 and increase funding to $8.0 million."

But the San Diego center "did not complete work on any aircraft on this order in fiscal year 2013" because it was "already working on other high flight hour aircraft from prior year orders."

As a result, the repair center "carried over $6.3 million on this order into fiscal year 2014."

Continues the audit, "In fiscal year 2014, the order was amended twice, the number of aircraft was reduced from 21 aircraft to 20 aircraft, and the funding was reduced to $7.6 million."

Progress was made, but barely.

"As of the end of fiscal year 2014, [North Island] carried over $3.7 million on this order into fiscal year 2015 and still needed to complete work on 18 of the 20 high flight hour aircraft.”

The first aircraft in the Navy's aging fleet of Hornets was "manufactured in the late 1970s and became operational in the early 1980s," the report notes, and thus the planes demand special handling.

"As an aircraft ages, it incurs additional inspections and structural repairs when required. One of those additional inspections occurs when an aircraft reaches 8,000 flight hours."

Says the report, "The high flight hour aircraft inspections and repairs contributed to carryover because (1) structural repairs generally require more time to complete than nonstructural repairs and (2) work on the high flight hour aircraft delayed work on other F/A-18 aircraft because there were not enough...engineers and artisans, support equipment, and facilities."

Fixing crashed planes added another wrinkle.

"These crash-damaged aircraft incurred damage from incidents that included midair collisions, fire/heat damage, combat damage, accidents causing wing and fuselage cracks, and arresting/landing gear mishaps," the document says.

"For crash-damaged aircraft, the requirements to repair the aircraft are largely unknown prior to inspection."

In addition, the planes "required nonstandard repairs that necessitated long lead time for parts to perform the work."

Making the problem yet more difficult to account for, the audit says, was the Navy's practice of obtaining waivers from the Pentagon regarding backlog growth.

"The amounts of carryover that exceeded the allowable amounts," from fiscal years 2004 through 2013, says the report, "ranged from less than $1 million in fiscal year 2005 to $121 million in fiscal year 2011."

Concluded the auditors, "Our analysis of total carryover (without adjustments) shows that the Navy [repair centers] total carryover gradually increased from $602 million in fiscal year 2004 to $1,008 million in fiscal year 2014—a $406 million increase."

Added the report, "Navy officials acknowledged that the [repair centers] had difficulty accurately budgeting for new orders."

The auditors' recommendation, that the Navy conduct "a trend analysis" of "actual order information that affects carryover and adjust budget estimates as necessary," was accepted by the Pentagon.

"Actions to improve the budgeting for and the management of carryover noted in the draft report are underway," wrote undersecretary of defense John P. Roth in a June 1 letter to the GAO.

But based on the audit's findings, there likely will be even more unspecified new costs.

North Island "identified a lack of artisans and engineers as the constraint and 43 as the optimum number of aircraft to be worked on at one time."

Officials there "informed us that it hired 5 engineers and 29 artisans in fiscal year 2014 and plans to hire 28 engineers and 66 artisans in fiscal year 2015," according to the audit.

"In addition, [North Island] is renovating a hangar to provide additional work space for the work flow of the F/A-18 Hornet."