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The Department of Defense (DoD) is developing the DoD Readiness Reporting System (DRRS) to improve on readiness reporting relative to what occurs under the older Status of Resources and Training System (SORTS). The additions and improvements to SORTS are substantial, including the ways in which commanders assess units readiness for individual missions, automation of resource and training calculations, and the enhanced ability of associated units to report their combined or separate readiness. DoD s current plans call for DRRS to be fully implemented by 2014. At present, very little of the improved readiness information contained in DRRS is carried over to the Quarterly Readiness Report to Congress a report that Congressional oversight committees rely on to assess the readiness of U.S. armed forces. CBO examined potential changes to the Quarterly Readiness Report, including displaying SORTS scores and mission assessments by unit type and deployment status, linking levels of readiness to the amount of available resources, creating readiness summaries for aircraft carrier strike groups, and improving the ways in which unit and personnel rotation are displayed.

In recent years, the Congress has shown interest in powering some of the Navy s future destroyers and amphibious warfare ships with nuclear rather than conventional (petroleum-based) fuel. At the request of the former Chairman of the Subcommittee on Seapower and Projection Forces of the House Committee on Armed Services, the Congressional Budget Office (CBO) has estimated the difference in life-cycle costs (the total costs incurred for a ship, from acquisition through operations to disposal) between powering those new surface ships with nuclear reactors and equipping them with conventional engines.

Contractors play a substantial role in supporting the United States' current military, reconstruction, and diplomatic operations in Iraq, accounting for a significant portion of the manpower and spending for those activities. The Congressional Budget Office (CBO), at the request of the Senate Committee on the Budget, has studied the use of contractors in the Iraq theater to support U.S. activities in Iraq. This paper, which covers the period from 2003 through 2007, provides an overview of the federal costs of employing contractors in Iraq and in nearby countries, the type of products and services they provide, the number of personnel working on those contracts, comparisons of past and present use of contractors during U.S. military operations, and the use of contractors to provide security. CBO also examined the command-and-control structure between the U.S. Government and contract employees and the legal issues surrounding contractor personnel in Iraq. For this study, the Congressional Budget Office considers the following countries to be part of the Iraq theater: Iraq, Bahrain, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates. CBO found that in-theater contracts to support operations in Iraq were almost entirely performed in those countries, all of which are located within the U.S. Central Command's area of operations.

The Navy owns and operates four shipyards: the Norfolk Naval Shipyard in Portsmouth, Virginia; Portsmouth Naval Shipyard in Kittery, Maine; Puget Sound Naval Shipyard in Bremerton, Washington; and Pearl Harbor Naval Shipyard in Pearl Harbor, Hawaii. These shipyards maintain, repair, overhaul, and upgrade surface ships and submarines -- a range of services that costs the Navy over $3 billion annually. In recent years, the Navy has changed the mechanism it uses to fund each of the shipyards, shifting from the Navy Working Capital Fund (NWCF) to direct appropriations. Previously, under the NWCF's revolving-fund approach, the shipyards set prices for maintenance and repair services that were intended to cover their full operating costs, and the Navy's Atlantic and Pacific Fleets as well as its other customers paid for those services out of their appropriated funds. Now, under the direct appropriations approach, the Navy uses a portion of the money appropriated to it by the Congress to fund the shipyards directly, a financing mechanism known as "mission funding." The Navy believes that the shift to mission funding gives it more flexibility in allocating its resources across regions and types of maintenance. But the change has generated some concern, both within the Department of Defense (DoD) and the Congress and among outside observers and organizations. Naval shipyards had been operating successfully under some form of revolving-fund financial system since the 1950s; as a result, some analysts have questioned the Navy's rationale for the change. This Congressional Budget Office (CBO) paper -- which was prepared at the request of the Readiness Subcommittee of the House Committee on Armed Services -- outlines the advantages and disadvantages of working-capital funding versus mission funding for financing naval shipyards' operations. It also provides an overview of naval ship maintenance and describes the shipyards' transition from working-capital to mission funding., The original document contains color images.

To improve shipyard reporting and address concerns about the decreased visibility of the operations and costs of mission-funded shipyards, the Congress asked the Navy to submit a report with proposed budget exhibits that address a number of specific topics. The Navy released its Report on Direct Funding for Puget Sound Naval Shipyard and Report on Proposed Congressional Budget Exhibits for Navy Mission-Funded Shipyards in March 2006. The exhibits in that report contain information about shipyards' funding, performance, workload, workforce, and infrastructure. The Congress also requested that the Director of the Congressional Budget Office (CBO) submit a review of the Navy's proposed budget exhibits. Generally speaking, the Navy's proposed budget exhibits for mission-funded shipyards address the matters specified in the Congressional request and are consistent with CBO s template for reporting. The exhibits improve on current reporting to the Congress by including: Information about all mission-funded shipyards; Separate information for each mission-funded shipyard; and Clearly defined sections and data covering all of the major aspects of operations at mission-funded shipyards. The Navy s proposed exhibits lack some useful information, however. For example, they show only one year of historical data. Including additional years would more clearly reveal any long-term patterns in shipyards operations and performance as well as any effects of the transition to mission funding. (CBO's template provided for five years of historical data.) The Navy s proposed exhibits also combine data for intermediate-level maintenance facilities and shipyards that were merged as a result of the Navy's Regional Maintenance Plan. Separating out data for the two types of facilities would make the performance of shipyards easier to identify, although it would add to the length and complexity of the report., CBO Report.

The Global Information Grid is the communications network that connects Department of Defense (DoD) facilities worldwide. Although it is in daily use, its content continues to evolve. The Defense Information Systems Agency (DISA) is implementing an initiative called the Global Information Grid Bandwidth Expansion (GIG-BE) to increase the bandwidth available to DoD users. The initiative is also intended to move DoD from a network backbone owned by a contractor to one owned by the government (the GIG-BE). In addition, the contract that had connected many remote DoD facilities those not on the backbone to the network expired in February, and DISA is in the process of replacing it and other, similar contracts with the Defense Information System Network Access Transport Services (or DATS) contract, which will connect remote defense installations in the continental United States to the GIG-BE. Under the DATS contract, DISA envisions using short-term leases (of three years, followed by seven one-year options) to obtain the circuits necessary to connect remote sites to the network. Alternatively, DISA could acquire those circuits by using indefeasible rights of use (IRUs). Leases require periodic payments for the right to use circuits that are provided by private companies. IRUs, by contrast, involve a one-time payment at the beginning of the term for unlimited use of a circuit. The most common term for IRUs is 20 years; because that is also the expected useful life of a circuit, IRUs are considered purchases. Members of Congress have expressed concern about DISA's approach to acquiring network access for remote DoD facilities through the DATS contract. The Congress directed the Congressional Budget Office (CBO) to review DISA's analysis of alternatives and its underlying assumptions., The original document contains color images.

The Navy currently owns and manages four shipyards: the Norfolk Naval Shipyard in Portsmouth, Virginia; the Portsmouth Naval Shipyard in Kittery, Maine; the Puget Sound Naval Shipyard in Bremerton, Washington; and the Pearl Harbor Naval Shipyard in Pearl Harbor, Hawaii. Each of those facilities operates under one of two distinct financial systems. The Norfolk and Portsmouth shipyards are financed through the Navy Working Capital Fund (NWCF), a revolving-fund mechanism under which Navy units pay for maintenance and repair services at a shipyard out of their appropriated funds, at prices that are intended to cover the shipyards full operating costs. The Puget Sound and Pearl Harbor shipyards, which had been under the NWCF, are now funded through direct appropriations, an approach known as mission funding. Naval shipyards have operated under some form of revolving-fund financial system for decades. As part of the Navys ongoing Regional Maintenance Plan, however, Pearl Harbor was shifted from working-capital funding to mission funding on October 1, 1998, and Puget Sound on October 1, 2003. The Navy intends to move the Norfolk and Portsmouth shipyards to mission funding at the earliest possible date. At the request of the House Committee on Armed Services, the Congressional Budget Office (CBO) is studying the advantages and disadvantages of working-capital funding and mission funding in general and as they apply to naval shipyards in particular. Critics have expressed concern that mission funding makes shipyards costs and operations less visible and reduces shipyards ability to obtain capital to replace equipment and make improvements. This document is an interim report on CBOs study. The Navy continues to respond to requests for information and data on the costs and operations of the shipyards. Once CBO has that information and data, it will be able to more fully address all of the issues associated with shipyard funding mechanisms, which will be incorporated into a fin

In a previous study, CNA analysts used data from past DoD A-76 competitions to construct a model of savings and projected the potential savings from additional DoD Commercial Activities (CA) competitions. In this paper, we use an alternative approach for estimating savings from future DoD CA competitions. We estimate two separate bidding equations - one for the in-house team bid and another for the minimum contractor bids, along with an equation for baseline cost. Based on these estimated equations, one could then indirectly project future savings in the A-76 inventory as the difference between predicted baseline cost and the predicted winning bid. Using the new approach, we project an annual savings of $6 billion if the entire 1995 DoD CA inventory were competed under A-76 rules.

The Director of Shore Installation Management (N46) sponsored CNA's participation in an Infrastructure Symposium with RAND from October 16 to 18, 1996 at the RAND Santa Monica facility. Both CNA and RAND have a long history of research in defense infrastructure. By working together, they can build upon each other's research and plan future research better than if they work in isolation. DoD continues to struggle with how to operate more effectively and fulfill its mission when resources are shrinking. In particular, DoD is looking to create a more efficient infrastructure to make funds available for recapitalization and modernization. The primary purpose of the symposium was to synthesize the results of previous and ongoing research projects and thereby identify the best areas and approaches for future research. This paper represents the views of the CNA participants. As many of the results reported were preliminary, we avoid detailing the findings.

In 1955, the Office of Management and Budget (0MB) implemented a policy known as the Commercial Activities (CA) Program. This program enables the private sector to compete with government organizations in providing goods and services when it is appropriate and economical to do so. The objective is to promote an efficient support structure through competition. This research memorandum is part of a CNA-initiated research effort examining the DoD Commercial Activities program. Most of our previous research has examined the Navy CA program. This paper presents the results of all completed DoD comprehensive A-76 competitions between 1978 and 1994.

In November 1994, the Secretary of the Navy asked the Assistant Secretary of the Navy (Research, Development and Acquisition) ASN(RD&A) to assess the minimum essential industrial base that the Department must sustain. The assessment was to become part of the FY97 Program Review (PR-97). In turn, ASN(RD&A) asked CNA to help support the assessment process. In addition to PR-97 support, the sponsor asked CNA to develop a framework for addressing industrial base questions because the Navy Department is required to perform many of these industrial base assessments. This paper proposes a CNA methodology for conducting industrial base studies. It is designed as an instructional document to guide analysts in capturing economic sources of industrial base risks. This framework helps to identify likely problems and then to tailor feasible solutions. The framework is general enough to be applied to a wide variety of industrial base items. The goal of this paper is to separate the important factors regarding the industrial base from the extraneous ones. By highlighting the key elements and economic dynamics, the methodology can support Navy and Marine Corps decisions on critical industrial base issues.