Ministry of Defence: Fleet Maintenance · 2018. 11. 15. · post refit problems of eight...

Report by the Comptroller and Auditor General

Ministry of Defence: Fleet Maintenance

Ordered by the House of Commons to be printed 28 February 1990

London: HMSO E6.00 net 249

MINISTRY OF DEFENCE: FLEET MAINTENANCE

This report has been prepared under Section 6 of the National Audit Act, 1983 for presentation to the House of Commons in accordance with Section 9 of the Act.

John Bourn Comptroller and Auditor General National Audit Office

28 February 1990

The Comptroller and Auditor General is the head of the National Audit Office employing some 900 staff. He, and the NAO, are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies use their resources.

lv”NISTRY OF DEFENCE: FLEET MAINTENANCE

Contents

Summary and conclusions

Part 1: Introduction and background

Part 2: Effectiveness of Fleet Maintenance

Part 3: Costs of Fleet Maintenance

Part 4: Fleet Maintenance Bases

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Appendices

1: Maintenance Management Systems for Surface Ships and Submarines 25

2: Engineering Information Systems 26

3: Fleet Maintenance Responsibilities of the Chief of Fleet Sup ort, the Controller of the Navy and the Commander in C R. lef (Fleet). 28

4: Ministry of Defence Organisation Relevant to Fleet Maintenance 29

5: Ministry of Defence Committees Relevant to Fleet Maintenance 33

6: Fleet Maintenance Bases: Planning, Control and Management of Workload 35

7: National Audit Office Questionnaire to other Navies on Fleet Maintenance Practices 38


Summary and conclusions

1. On 1 April 1989, the Naval Fleet comprised 173 vessels, with a current book value in excess of E7 billion, and a considerably higher replacement cost. Its repair and maintenance is carried out at various levels and costs nearly E900 million a year. Some ESOO million of this is spent on major work carried out by civilian organisations in the Royal Dockyards and elsewhere, including the Fleet Maintenance and Repair Organisation at Portsmouth; and El30 million in Royal Navy Fleet Maintenance Bases. The remaining work is carried out by ships’ crews.

2. This Report records the results of an examination by the National Audit Office of the management by the Ministry of Defence (the Department) of the resources invested in the maintenance of the Fleet. In the light of earlier National Audit Office examinations of work carried out in the Royal Dockyards and a current Departmental review of the Fleet Maintenance and Repair Organisation, this examination concentrated on the overall arrangements and work carried out in the Fleet Maintenance Bases. I intend to provide the Public Accounts Committee with further details to supplement this Report on a confidential basis.

3. The maintenance of the Fleet is a highly complex and demanding task requiring considerable engineering skills and judgment. The National Audit Office’s examination indicated that the Royal Navy’s fleet maintenance practices were similar to those adopted by other navies but that there was scope for improvement in certain areas. The main issues examined and the National Audit Office’s detailed findings and conclusions are summarised below.

Findings and conclusions

On whether the Department have: effective systems for determining the amount, type and location of maintenance activity; and management information to enable them to monitor and adjust the operation and effectiveness of fleet maintenance arrangements.

4. The Department’s maintenance policy is to achieve maximum availability of ships and submarines consistent with keeping support, and thus costs, to the essential minimum. The Department’s main methods of maintaining the Fleet, in descending order of emphasis, are preventive maintenance, condition-based maintenance and corrective maintenance (paragraphs 1.3, 1.8). The National Audit Office’s main findings and related conclusions were:

(a] Royal Navy ships are considered available for operations immediately or within a short period unless they are in refit or standby. The proportion of time ships spend in refit has been reduced considerably in recent years from 20-25 per cent to about 15 per cent of whole ship life. Additionally, al any one time, a number of ships will be undergoing initial acceptance or post refit trials, or maintenance. These activities account for up to a further 25 per cent

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of a ship’s life. In times of tension or war, special procedures would operate to bring such ships into service (paragraph 2.26).

(b) For management and engineering purposes the Department measures availability as a proportion of operational time where “operational” means in Fleet hands. Upkeep cycles determine that the maximum vessel availability in peacetime is about 80 per cent of operational time. The actual availability achieved is normally slightly lower (paragraphs 2.26, 2.30).

(c) The Department’s assessments of availability do not encompass vessels’ fighting capability, although the Department believe that they give the Royal Navy the ability to match the operational availability of ships to the operational task and that it would be difficult to devise a better definition of availability for day-to-day purposes. The National Audit Office suggested that improved arrangements for defining and reporting availability are needed to properly assess the effectiveness of fleet maintenance policy and that such definitions should encompass vessels’ fighting capability. The Department supported this in principle but pointed out that there were practical difficulties in assessing the fighting capability of a warship within their current system of monthly activity returns which reports the availability of ships (paragraphs 2.28-2.30).

(d) Ship refits include maintenance and updates to improve the ship’s capability. The latter can, however, lengthen considerably the time spent in refit, thus affecting availability in peacetime. Refit and post refit problems of eight destroyers/frigates in 1987 led to a loss of two and a half hull years of Fleet availability during operational time horn a force of about 50 ships (paragraphs 2.27 and 2.33).

(e) While maintenance management systems meet their purpose of providing the technical information required for preventive maintenance, their manual production and amendment and deficiencies in content currently limit their effectiveness (paragraph 2.3).

(fJ While the Department hope that condition-based maintenance

will bring significant and urgently needed benefits in cost and Fleet availability, they have adopted a cautious approach to its implementation because of the lack of a coordinated and comprehensive database of equipment performance (paragraphs 2.7-2.10).

(g) The National Audit Office suggested that the Department should consider whether there were further lessons to be learned from the experience of the commercial sector and the US Navy, who claim significant benefits from using condition-based maintenance, which might allow its quicker implementation in the Royal Navy. The Department informed the National Audit Office in October 1989 that they were keeping in touch with developments by foreign navies in this field and were conducting study visits (paragraphs 2.11-2.15).

(h) The Department have some detailed targets for the availability of equipments, and collect and analyse data on their operation and

maintenance, but the systems used to collect such data have developed piecemeal to meet the needs of different users and have limitations. The Department expect significant benefits from an increasing use of onboard information technology now being introduced for engineering administration. This is not planned to be installed on all major vessels until 1997 although it is hoped that this date might be advanced; the Department should monitor to ensure that the full benefits are realised (paragraphs 2.18, 2.19, 2.23-2.24, 2.29).

(i) The existence of various systems has inhibited the development of a single comprehensive maintenance-specific information system which could provide a basis for measuring the effectiveness of fleet maintenance as a whole. In view of the likely costs, such a system would have to be justified by investment appraisal (paragraphs 2.25, 3.8).

(j) Major refits and repairs have had cost budgets and separately priced contracts since the introduction of commercial management in the Royal Dockyards. The Department intend to use information being collected on shore support costs to set budgets for operational support. However, comprehensive data are not consistently available on the cost of maintenance, particularly at lower levels, or of maintaining equipments at particular levels. Thus the total cost of maintenance of individual ships is not recorded or monitored against budgets. The Department believe such information would be of limited value (paragraphs 3.3-3.4, 3.8).

(k) The current division of responsibilities for Fleet Maintenance between three senior naval officers (a fourth will be involved from 1 April 1990) provides considerable scope for overlap and duplication. The Department decided in 1987 not to amalgamate the Controller of the Navy and Chief of Fleet Support organisations as a merged organisation would be too large to manage effectively. Two further studies of the structure of these organisations are in hand and will, inter alia, consider the division of responsibilities for the engineering support of the Fleet. Meanwhile a large number of committees are involved in determining and overseeing policy (paragraph 3.17).

(1) The lack of a unified structure of responsibility and accountability for a project/ship Class from cradle to grave has inhibited development of satisfactory management and cost information systems. The Department believe that planned changes associated with the Department’s new management strategy will in fact provide clearer objectives, targets and performance indicators for the various budget holders with responsibilities for fleet maintenance (paragraphs 3.13-3.14, 3.17-3.19, 4.5).

(m) The Department recognise that there is a need for greater involvement of the Controller of the Navy, the design authority, in setting and implementing engineering support policies. The introduction of Integrated Logistic Support for Royal Navy projects will go some way towards providing a means of considering through-

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life support as an integral part of the design process. It is important that the Department continue to provide the resources necessary for development of life-cycle costing models in view of the potential for long-term savings [paragraphs 3.15, 3.19, 3.20).

On whether Fleet Maintenance Bases provide a cost-effective input to fleet maintenance and are adequately used.

5. Most second-level maintenance and repair, ie that beyond the capacity and/or capability of vessels’ crews but not requiring major docking or specialist assistance, is carried out by uniformed personnel in Fleet Maintenance Bases. The National Audit Office’s main findings and related conclusions were:

(a) Peacetime requirements determine the capacity of the Bases in terms of manpower and facilities. Although the Department continuously review these requirements the National Audit Office noted that there were limitations with the methods used. Almost one-third of the Bases’ outturn relates to non-ship work and capacity may be higher than necessary to maintain the Fleet in peacetime. Any assessments of the future workload and staffing of the Bases would have to take account of requirements arising from the Department’s current review of plans for the Bases in war (paragraphs 4.214.25, 4.32).

(b) The Bases are not subject to the same financial disciplines as the Dockyards and broad estimates produced by the National Audit Office suggested they are more expensive, although it is not possible to make an accurate comparison. The Department argued that it was not appropriate to compare the Dockyards with the Fleet Maintenance Bases because they performed quite different tasks and it was essential for the Bases to be manned by uniformed staff. The National Audit Office noted examples of work carried out by the Bases which were previously undertaken by the Royal Dockyards prior to the introduction of commercial management. The Department subsequently informed the National Audit Office that the overall level of shipwork in the Bases, as identified in their Executive Responsibility Budgets, had not increased significantly and pointed to the substantial proportion of sunk costs at the Bases (paragraphs 4.264.31).

(c) The Bases provide a valuable service in assisting Commander-in- Chief Fleet to meet operational requirements despite a shortfall against manpower complements. The introduction of Executive Responsibility Budgets at five of the Bases has increased the visibility of costs. However there is a clear need for more reliable cost and management information; and for better planning, monitoring and control of work as expected from the introduction of relevant information technology in the Bases and the move to single business units at each Naval Base in accordance with the new management strategy (paragraphs 4.5, 4.74.13).

(d) Current funding arrangements do not encourage sufficient flexibility between commercial work and in-house budgets to ensure

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General conclusions

that all work is carried out where it is most cost-effective to do so. However the proposed developments referred to at (c) above offer scope for greater budgetary flexibility (paragraphs 4.7, 4.26).

6. The Department have made considerable savings by recent changes to maintenance cycles; they have introduced greater cost disciplines into major repair and refit work and in other areas they are seeking to improve financial accountability and control through budgets and by changes in organisation. Some of these initiatives are linked with the introduction of the new management strategy, which aims to provide a more effective linkage of performance to the Department’s overall objectives. The National Audit Office’s examination confirmed that improvements are required in this respect. Until these are achieved it will not be possible to assess whether the Department’s policy objective of maximum availability of ships consistent with keeping costs to an essential minimum is being achieved.

7. Management information systems do not provide all the information needed for effective monitoring and decision-making. Development of such systems is an important feature of the new management strategy but there will remain divided responsibilities for fleet maintenance. An integrated approach to setting objectives, budgets and performance indicators is therefore essential, with the aim of providing a better basis for achieving the most cost-effective distribution of maintenance tasks between different levels and methods, and assessing the costs and effectiveness of maintenance policy for individual ships and across the Fleet as a whole. The Department should consider the following points:

(a) Although they attain levels of availability for ships which are not far short of their overall target expressed as a percentage of operational time, establishing more precise targets for availability of ships and equipment, encompassing the vessels’ fighting capability, would provide a better basis for monitoring the effectiveness of maintenance policy. The National Audit Office acknowledge that there are practical difficulties to be overcome.

(b) The National Audit Office believe there is a need for more accurate information on the costs of maintenance of individual ships or Classes of ships, in total and at different levels, than is currently planned. Such information would provide a basis for judging the effectiveness of maintenance practices, for assessing where work can most cost-effectively be done, and for decisions on further investment, eg the cost-effectiveness of updating ships. The Department should continue to study cost and budgetary developments in the commercial sector to determine whether such developments would be practicable and cost-effective for the Royal Navy.

(c) After assessing the availability, cost and engineering etc information required to monitor performance against objectives and for decision-making, the Department should consider whether developments in information technology make it cost-effective to develop either integrated systems or a single comprehensive fleet maintenance information system.

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8. Decisions on where maintenance work should be undertaken must reflect a number of factors but should have particular regard to proper assessments and comparisons of the costs of undertaking work at the relevant Departmental establishments and commercial organisations. The Fleet Maintenance Bases are not subject to the same cost disciplines as the commercialised Royal Dockyards and, prima facie, are more expensive, although there are reasons for this. The Department believe that it is essential for the Bases to be manned by uniformed maintainers and that within their area of competence there is an advantage in making the best use of these “sunk costs” by loading the Bases to full capacity. It is important therefore that the Department complete their review of the Bases’ role and Service manpower requirements in war before deciding the optimum Service/civilian mix in peacetime. However, they also need to develop better cost and management information as a basis for decision- making and monitoring the efficiency of the Bases.

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Part 1: Introduction and background

1.1 On 1 April 1989 the Royal Naval Fleet comprised 173 vessels (excluding Royal Fleet Auxiliaries], including 31 submarines, 3 aircraft carriers, 2 assault ships, 47 destroyers and frigates, 40 Mine Counter Measure Vessels and 34 patrol craft. Its current book value is in excess of X7 billion, but its replacement cost would be considerably higher. Maintenance is therefore an important task. The National Audit Office estimate that the cost of repairing and maintaining the Fleet in 1988-89 was nearly E900 million. This comprised civilian repair and maintenance nearly E500 million, Royal Navy Fleet Maintenance Bases El30 million, and servicing and other work by ships’ staff over EZSO million.

1.2 The Government’s 1981 White Paper, “The United Kingdom Defence Programme: The Way Forward”, (Cmnd 8288) stated that the destroyer/ frigate force, the workhorses of the Fleet, would be reduced from 66 to about 50 ships. The reduction required was achieved by ordering fewer vessels and paying off ships earlier than planned. Table 1 shows that the average age of the contracting destroyer/ frigate force has fallen since 1984. However the House of Commons Defence Committee in its 6th Report of 1988-89 found average age not to be a very useful measure, as the retention of a few very old ships or the recent acceptance of a few very new ones can have a disproportionate effect on the statistics. It is more useful to look at Fleet age in proportionate terms. Table 1 shows that in 1988 43 per cent of destroyers and frigates were less than 10 years old. However the proportion of ships more than 20 years old had increased significantly, following a fall in the

Table 1

Changing age profile of Royal Navy Destroyer/ Frigate Force s,c ; 5’4 + ,e i ,,.a ,p; ;,,; .;: ;, i ; ,y ;: .:, ,;s ,, ., , < I, : ,, , .,,: . &%rqs’of>Ag,,w~~ ; 497$1974 %1980*~:1:$84 :,1988 .,i, % % % % % _,

Under 10 58 43 33 37 43

10-20 28 56 62 45 34

Over20 14 1 5 18 23

Average Age [years] 10.3 10.6 11.7 13.1 12.3

Number of Ships 78 68 66 55 49

I Source: Hansard 18/7/88

early 1970% from 1 per cent in 1974 to 23 per cent in 1988. During the same period the Ministry of Defence (the Department) have sought to reduce expenditure on fleet support activities as part of attempts to reduce overheads and there has been increasing Parliamentary concern about the ability of the Fleet to fulfil its peacetime role.

1.3 There are three main methods of maintaining the Fleet:

(a) Preventive maintenance, whereby equipment is serviced or replaced periodically on the basis of previous experience and engineering judgement as to when failure will OCCUT;

[b) Condition-based maintenance, whereby equipment is continuously or periodically monitored in its operating environment to diagnose and rectify faults before failure or breakdown. It is therefore an aid to preventive maintenance rather than an alternative to it;

[c) Corrective maintenance whereby equipment is repaired or replaced only when it breaks down or wears out.

1.4 Until the 1950s Naval maintenance was mainly corrective. Since then vessels and their equipments have become more sophisticated, resulting in a change to preventive maintenance as the primary maintenance method. Condition-based maintenance was incorporated into Naval maintenance policy in 1980. In addition, ships’ complements have reduced, leading to the development of shore-based, mainly uniformed, maintenance units known as Fleet Maintenance Bases.

1.5 Although differences exist between large and small vessels, the maintenance and repair work required is generally carried out at four levels, defined in this report as:

Level 1: self-maintenance and repair work within the capacity and capability of vessels’ crews - the day-to-day servicing either at sea or in port;

Level 2: maintenance and repair beyond the capacity and/or capability of vessels’ crews, generally carried out by Fleet Maintenance Bases;

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/

Level 3: overhauls and unplanned repairs requiring docking or involving specialist assistance:

Level 4: major repair and refitting.

Levels 3 and 4 maintenance and repair is carried out by the commercially-managed Royal Dockyards at Devonport and Rosyth, the mainly civilian-manned Fleet Maintenance and Repair Organisation at Portsmouth, or commercial ship repairers.

1.6 In broad terms a modem warship is a single weapon system comprising a hull in which marine engineering and weapon engineering equipments and systems are carried. The hull and all such systems and equipments contribute to the vessel’s ability to perform her operational role in the essentially hostile sea environment and they have widely differing maintenance requirements.

Objectives and scope of National Audit Office examination

1.7 The National Audit Office examined how the Department implement and measure the effects of their fleet maintenance policy. The examination focused on the following issues:

(a] whether the Department have:

(i] effective systems for determining the amount, type and location of maintenance activity, and

(ii] management information enabling them to monitor the operation and effectiveness of their fleet maintenance arrangements and adjust them in the light of experience [Parts 2 & 3);

(b) whether Fleet Maintenance Bases provide a cost-effective input to fleet maintenance and are adequately used (Part 4).

1.8 The Department’s fleet maintenance policy is to achieve maximum availability of ships and submarines consistent with keeping support, and thus costs, to the essential minimum. In considering the first issue listed above, the National Audit Office therefore examined whether and how the Department

achieved maximum availability [Part 2); and how they determined the minimum level of maintenance costs necessary to achieve value for money (Part 3), paying particular attention to the management information available as a basis for decisions.

1.9 Previous National Audit Office Reports in this area have concentrated on the work carried out by the Royal Dockyards. The most recent examined their transfer to Commercial Management (HC 359 of 1987-88). This Report examines the implementation of the overall policy and concentrates on maintenance carried out at levels 1 and 2 by mainly uniformed personnel. The National Audit Office did not carry out any detailed examination of the Fleet Maintenance and Repair Organisation since the Department were reviewing its future at the time the investigation started in 1988. The review is not yet complete.

1.10 The National Audit Office examination covered the maintenance of Royal Navy surface ships and submarines, except nuclear ballistic missile submarines. It also excluded vessels of the Royal Fleet Auxiliary [which are maintained to Department of Transport standards for merchant shipping], the Royal Naval Auxiliary Service, and the Royal Maritime Auxiliary Service.

1.11 The study involved examination of documents and enquiries at the Department’s headquarters and Royal Navy Fleet engineering branches, and visits to six Fleet Maintenance Bases in the UK. The National Audit Office also employed marine engineering consultants with experience in the Defence field to advise on best maintenance practices in the commercial sector, where maximising availability and usage is important in achieving profitability, and their relevance to the Royal Navy.

1.12 The National Audit Office also sought information from other navies on their maintenance policies, use of condition-based maintenance and measurement of maintenance performance. Six responded to the questionnaire [Appendix 7). In addition the National Audit Office visited the United States Navy to establish their fleet maintenance arranp3ments.

tvmaSTRY OF DEFENCE: FLEET MAINTENANCE

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MINISTRY OF DEFENCE: FLEET MAINTEN‘4NcE

Part 2: Effectiveness of Fleet Maintenance

2.1 The National Audit Office considered how and to what extent the Department achieved their objective of maximum operational availability of vessels, in particular their maintenance management arrangements; the adequacy and use of engineering information, for example on equipment failure rates, repair times and spares requirements; and the arrangements for measuring and monitoring availability achieved. The arrangements for identifying and minimising support costs are considered in Part 3.

(a) Maintenance management systems

2.2 The Department have established maintenance management systems for Surface Ships and Submarines which seek to achieve maximum Fleet availability by a cost-effective mix of preventive, condition-based and corrective maintenance (see Appendix 1).

2.3 The Department consider that the maintenance management systems meet their original purpose of providing specific technical information required for maintenance activities. The main shortcomings of the systems, which are recognised by the Department, are that:

(a] they provide insufficient information on mean times between failure, repair times and materials consumed; and

(b) while the Central Maintenance Management System record ashore is computerised, maintenance of the onboard paper-based system is a major and labour-intensive task. The National Audit Office noted that it had taken 30 Service staff four years to amend the documentation following a 1981 change in the maintenance cycles. Storage also presents difficulties: the documentation and publications relating to the onboard engineering task for an average destroyer/frigate weigh seven tons.

2.4 The Department informed the National Audit Office that the planned OASIS 5 system (paragraph 2.23) will allow extraction for analysis of actual times taken for each task completed and will incorporate most of the maintenance management system, thereby easing both access and amendment. In addition work is already in hand to reduce the amount of hard-copy documentation held by the use

of microfilms, and to examine the options for using optical/digital technology for storage and accessing of information.

2.5 The National Audit Office’s consultants advised that planned maintenance is popular in the commercial sector, partly owing to the reductions in ships’ complements requiring more maintenance to be carried out while the ships are in port. However, it has not been adopted by all companies, and there is no single preventive maintenance strategy in use across the industry. There has, however, been rapid recent development in the use of computerised systems for recording and monitoring planned maintenance, and the consultants identified careful planning as one of the factors contributing to cost savings in the commercial sector in recent years.

2.6 The National Audit Office examined two measures by which the Department are seeking to reduce maintenance effort: increasing the use of condition-based maintenance for individual equipments; and changes to complete upkeep cycles extending the lives of ships and the periods between refit. In the longer term significant savings can be made by increasing the reliability and maintainability of the equipment involved; the National Audit Office examined this subject in their recent report on Reliability and Maintainability of Defence Equipment (HC 173 of 1988-89).

Condition-based maintenance

2.7 Condition-based maintenance relies on the direct monitoring of equipment condition to identify and diagnose faults before failure occurs. It reduces the over-insurance and extra cost inherent in a purely preventive maintenance system and is the method most closely aligned with the Department’s overall maintenance policy (paragraph 1.8). However, it is not suitable for all equipments; there is greater emphasis in its use on marine engineering equipments, where information and predictions on use and deterioration can be more readily determined, than on weapon equipments. The Department view condition-based maintenance not as a panacea but as one of a number of systems for achieving a sensible balance between under and over- maintaining equipments, and reducing the total maintenance load by avoiding nugatory opening and examination of equipments.

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MINlSTRY OF DEFENCE: FLEET MAINTENANCE

2.8 Condition-based maintenance methods were first introduced by the Royal Navy in the 1960s to replace destructive methods of assessing boiler life. Since then many sophisticated techniques have evolved, including vibration monitoring and spectrograph oil analysis, which have helped to extend significantly engine life in Royal Navy ships. The Department issued a policy instruction introducing condition- based maintenance in 1980 but progress in the wider introduction of the policy has been slow. In 1983, the Naval Equipment Condition Monitoring Committee was formed to give impetus to implementation. They quickly realised that the main obstacle to implementation was the lack of a coordinated and comprehensive database of equipment performance. They decided that until sufficient information existed to measure the cost-effectiveness of condition-based maintenance at an equipment level, a cautious approach should be taken to its implementation to guard against over-enthusiastic and ill-considered decisions, and to secure confidence in the reliability of condition monitoring sensors.

2.9 The Committee initiated condition-monitoring trials in 1985 to assess the ability of such techniques to predict failure of engineering systems and provide sufficient data to determine whether the Fleet-wide introduction of condition-based maintenance would be cost-effective. Although they proposed initial trials lasting three years, these have been slow to start. They now cover three surface ships and four submarines until 1991, when a policy paper will be prepared if the trials yield sufficient information. A final policy paper was due in 1995 but the Department now expect the 1991 paper to lead to the introduction of condition-based maintenance equipment by equipment.

2.10 The Department informed the National Audit Office that, while the 1980 policy was reasonably coherent, the main problem has been the lack of a suitable lead authority to carry condition-monitoring forward across all engineering disciplines. A November 1988 strategy paper expressed the hope that significant and urgently needed benefits would result from its widescale introduction. A cell dealing specifically with condition-based maintenance was established in the Department on 1 April 1989.

2.11 The National Audit Office compared the Royal Navy approach with that of other navies. The results

vessels and extend the periods between refits; and to repair items only when necessary and at the lowest possible maintenance level during programmed maintenance periods. To this end, the United States Navy establish failure modes and performance margins for each equipment in a ship Class. Specialist teams then collect data to predict when the equipment’s performance will fall below an acceptable level and calculate the level and timing of the maintenance required to achieve acceptable performance.

2.12 The data collected, together with computer simulated ship missions, are also used to identify the critical equipments which influence the maintenance requirements, resulting in significantly improved targetting of maintenance resources and vessel availability. In the submarine area the United States Navy claim benefits equivalent to the cost of keeping two additional submarines operational in a class of 30 over a 25-year life-cycle.

2.13 The National Audit Office noted that although the Department collect and analyse engineering data, their approach, in particular their use of models and computer simulations, is less structured and more fragmented than that of the United States Navy. This is due in part to the smaller equipment populations in the Royal Navy, as a result of which it takes longer to establish a data base which gives meaningful results. This reduces the returns available from investment in such systems.

2.14 The National Audit Office’s consultants advised that computerisation has aided the development of improved methods of condition monitoring in the commercial sector, the results of which have now been accepted by some statutory and insurance authorities as justification for extending intervals between inspections. Some companies for example now undertake dry-docking and survey twice over a five-year period rather than annually. This has been estimated to have reduced annual maintenance costs by between 11 per cent and 17 per cent. The consultants acknowledged the difficulty of drawing parallels between commercial and Royal Navy operations and did not have direct access to Royal Navy activity on condition monitoring. However, they suggested that increased use of these techniques was one area where the Royal Navy could apply merchant navy experience, and where worthwhile savings were thought to be achievable. The Department informed

tended to confirm that the Royal Navy are progressing the National Audit Office that, as part of the 1989 as fast if not faster than other navies, except the long-term costing exercise, the upkeep cycle of Royal United States Navy. The latter have developed Fleet Auxiliaries (whose operations more closely Surface Ship and Submarine Equipment Maintenance resemble those of the commercial sector) was Monitoring Programmes. These are designed to extended to encompass five-yearly cycles of surveys extend the operating cycles of designated ship Classes and dockings, resulting in expected savings of some without reducing availability; to increase the life of s32 million.

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2.15 The National Audit Office note that the United States Navy attributed a large part of their success in developing condition-based maintenance to a cautious approach and the Department are also being cautious. However, it seems likely, having regard to the experience of the United States Navy and the commercial sector, that the Royal Navy might achieve cost, manpower and ship availability benefits from fully implementing condition-based maintenance. The National Audit Office suggested that, although there were difficulties in data collection and the need to justify the investment involved, the Department should consider whether experience elsewhere provides a basis for quicker implementation. The Department informed the National Audit Office that they do keep in touch with other navies about their practices and, recognising that there are Condition- Based Maintenance Systems elsewhere which are more fully implemented than that of the Royal Navy, they began in 1989 a series of foreign visits to study the practices of other navies. The first visit was to the United States Navy.

Changes in upkeep cycles

2.16 The Department are fully aware of the potential benefits of increasing the life of vessels and extending the periods between refits. Between 1976 and 1986 the Department undertook 21 studies into the question of how to increase availability while reducing through-life support costs. The latest major review, finalised in May 1986, related to gas-turbine- driven ships (Type 42 destroyers and Type 22 frigates). It considered from an engineering standpoint the timing of the requirement for Dockyard work on the main hull, marine and weapons engineering systems thought to drive the upkeep cycle and the means by which ship life could be extended from 18 to 22 years. It recommended the introduction of repair periods every six years instead of more extensive restorative refits after nine years. The Department expect this to save 14 per cent over whole ship life in both the industrial man-week maintenance budget and the time spent in the Dockyards.

2.17 The National Audit Office noted that savings of El65 million over 10 years were claimed from this change. However, this figure related only to expenditure on refits where the change in upkeep cycles will reduce annual Dockyard maintenance input by 30 per cent, and assumed that there would be no significant downstream effect on corrective maintenance costs and no requirement for additional maintainers at sea. The National Audit Office also noted that an accurate assessment of the effects of the change in upkeep cycles would depend on historical information being available on the link between any

increase in corrective maintenance and reductions in Dockyard maintenance input. Such a linkage has not been monitored in the past but the Department told the National Audit Office that to provide measures of refit effectiveness, Commander-in-Chief, Fleet is now taking steps to collate information on external support provided to a ship during the first year of operation post refit. Fleet Maintenance Base support, operational defects and stores usage data will be collated and analysed.

(b) Engineering information

2.18 The Department collect and analyse information on the operation and maintenance of equipments in-Service with a view both to improving the performance of existing equipments by revising operating and maintenance procedures, and to securing greater availability, reliability and maintainability of future equipments by improved design. The Department’s main current and proposed systems are described in detail in Appendix 2. In broad terms, the systems are as follows:

(a] Stores usage, where information on engineering stores used on certain ships is analysed for indications of poor equipment reliability and maintainability.

(b) Vessel upkeep, a system for submarines which provides information on repair and maintenance of marine engineering equipments carried out by vessel and Fleet Maintenance Base staff.

(c) Defect reports, where information on certain defects goes to the Design and Support Authorities as necessary.

2.19 The National Audit Office found that these systems have been developed piecemeal to meet the needs of different users. For example, the stores usage system is used mainly by the Director General Supplies and Transport (Navy] for stores management purposes, and the vessel upkeep system mainly by the design authorities. Data on equipment availability, reliability and maintainability therefore come from various sources, mostly collected manually, and have limitations (Appendix 2). Data are not collected for all equipments and are concentrated on major marine engineering equipments and those with specific problems for which a period of special reporting is undertaken.

2.20 The Fleet Engineering Data Centre, which produces various analyses of maintenance data for a variety of purposes, consider that the data cannot in all cases be considered accurate, for example in

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quantifying Mean Time Between Failure and Mean Time To Repair. The Centre do not produce any specific analyses of poor maintainability highlighted in individual defect reports, but consider that the information available can be used to identify poor operational availability and reliability within identifiable weak areas.

2.21 The responses from other navies indicated that, except for the newest ships, their engineering data are collected manually, and that while the data are used extensively in planning and specifying refit and maintenance work packages, their use in improving the design of new vessels is much more limited.

Developments in Information Technology

2.22 The Department recognise the scope offered by recent improvements in information technology for reducing the clerical workload of vessels’ staff and improving engineering data collection capacity. In the short term, the evidence from a trial into the use of handheld computers to collect availability and reliability data on a limited number of equipments is being examined with a view to Fleetwide introduction by the end of 1990.

.z..z~ In the medium term, stage five of OASIS (the engineering administration application of the Onboard ADP Support in Ships System) will provide the main capability for engineering data collection in all ships of frigate size and above. The main aims are to improve equipment availability, reliability and maintainability by providing better data and analyses; to reduce repair times through easier access to standing technical information; and to reduce waiting times for spares by further rationalisation of onboard stores holdings. It will therefore improve the data collection capability and the specification of refits and other maintenance tasks, and help quantify the availability short-comings of ships and equipments. Ultimately, the Department expect this to lead to improvements in Fleet availability. In the long term, all main systems and equipments should include provision for automatic data recording.

2.24 The evaluation of OASIS 5 began in 1988-89. All new-build ships are being fitted with OASIS with effect from those completed in 1989. Installation in existing vessels is planned from late 1991 to 1997 at a cost of El7 million, though the Department hope to improve on this timescale. The full benefits of the system will only accrue when the system is fitted to a sufficiently large number of vessels to generate a high volume of engineering data. The National Audit OEice noted that the benefits of OASIS 5 are difficult to quantify at vessel level and installation in

individual vessels will have to compete for priority with other update work at a time when updating budgets are under pressure. There is a need therefore for careful monitoring by the Department to ensure that the improvements expected from OASIS 5 will be realised within the next eight years.

2.25 While the stores usage, vessel upkeep and defect reporting systems may meet their individual users’ requirements, the existence of these separate systems inhibits the development of a single comprehensive maintenance-specific management information system. Such a system provided either as new, or by linking existing systems, would provide a basis for measurement of the effectiveness of fleet maintenance as a whole. Availability and engineering information might be linked with comprehensive cost information, including data on Service and civilian manpower, stores and overhead costs, and costed information could be produced by maintenance method or level, equipment, ship or Class. The Department pointed out that development and implementation of such a system would be costly and would involve considerable resource costs in the short-term, especially manpower, which was a particular problem. They also said that an earlier system to collect and analyse maintenance data had been abandoned in 1975 because of the high level of resources required to operate it. The National Audit Office accepted that any new system would have to be justified by investment appraisal but noted that with developments in information technology, there was now a greater chance that such a system would be cost-effective.

(c) Assessing availability achieved

2.26 In broad terms, Royal Navy ships are considered available for operations immediately or within a short period unless they are in refit or standby. The latter category cc~vers a small number of ships taken out of service and held in reserve. The proportion of time ships spend in refit has been reduced considerably in recent years, from 20-25 per cent of whole ship life in 1980 down to about 15 per cent in 1988-89. Additionally, at any one time, a number of ships will be undergoing initial acceptance or post-refit trials, or maintenance. These activities account for up to a further 25 per cent of a ship’s life. In times of tension or war, special procedures would operate to bring such ships into service. For management and engineering purposes however the Department measure availability only as a proportion of operational time where “operational” means in Fleet hands and so available for deployment on peacetime tasks (at sea, or in harbour for leave and programmed and unprogrammed maintenance).

12

2.27 A ship is deemed non-operational when it is being prepared for or undergoing refit or repair in the Dockyards or with a contractor, or is undergoing initial acceptance or post-refit trials (Figure 1). Under the above definition ships are non-operational on average for 26 per cent of the time; for some individual vessels this may rise to 33 per cent. Some of this time is spent on updating the capability of ships [not maintenance), which can have a significant impact on the time spent in refit. The Department consider there is little scope in the near future for significantly reducing non-operational time by further adjusting maintenance and refit cycles.

2.28 For reporting purposes the Department define peacetime vessel availability as “. when, during operational time, either she is at or can proceed to sea within 8 hours, with all essential ship characteristics operable. Her fighting capability may be restricted”. Each vessel completes a monthly activity return from which the Fleet Engineering Data Centre produce annual and ad hoc reports of availability and usage by ship Class.

Figure 1 Breakdown of Ship Life

2.29 Although they have some detailed targets for the availability of equipments, the Department’s objective of achieving maximum availability of warships is not broken down into detailed targets for availability of individual ships in war or peace. The National Audit Office found this was in line with the practice of most of the other navies consulted. The policies of two of the six respondents were framed in terms of achieving a maximum or specified level of ship availability, but in four cases the policy was expressed in less precise terms of maintaining reliability and efficiency in order to accomplish assigned tasks. The responses by other navies on methods of measuring effectiveness of maintenance performance varied. In general, like the Royal Navy, they measure effectiveness by analysis of availability, by the incidence and duration of breakdowns, and by annual reviews of operational availability and effectiveness.

2.30 Although no formal targets are set, the planned upkeep cycle, by specifying the level of maintenance required in operational time, determines that the maximum attainable vessel availability in peacetime

Whole Ship Life IS-25 Years D

Operational Time ++Non-Operational Time-)

OWits, reparations an trials) B

Available -Not Available-*j

; (programmed and i

/ : unprogmmmed i

*- ‘Usage’ e ‘Strategic Capacity’ j maintenance) ;

+f

*- In”sc cat sea) y

In “se -+!!Lea”e +i (in harbour) j

13

for destroyers and frigates is set at about 80 per cent of operational time. The actual availability achieved is normally slightly lower. The National Audit Office noted that defects which do not affect a vessel’s ability to carry out her current task may be disregarded in reporting her availability, for example a non-operational weapons system on a ship performing representational duties. The Department believe that although their assessments of availability do not encompass vessels’ fighting capability, they give the Royal Navy the ability to match the operational availability of ships to the operational task and that it would be difficult to devise a better definition of availability for day-to-day purposes. They pointed out that while it is easy to assess in their monthly activity returns (paragraph 2.27) whether a ship can float or move, it is much harder to assess fighting capability unless all the weapons systems can be tested.

2.31 Destroyer and frigate time at sea is less than the vessels’ stated availability. The difference represents a “strategic capacity” which can be taken up in times of war. Planned time at sea is restricted in peacetime to about 40 per cent for personnel management, retention and morale reasons. In these circumstances actions to increase availability through improved maintenance may simply increase strategic capacity. The Department have pointed out that, in time of war and transition to war, availability would be significantly increased by the use of emergency procedures and directing additional resources to tasks. For example, in 1982 during Operation Corporate the time-at-sea rate rose considerably.

2.32 A National Audit Office analysis of destroyer/ frigate activity reports indicated that their time spent alongside on self-maintenance periods varied from 56 to 99 per cent of the specified maintenance requirement, and on assisted maintenance periods between 90 and 101 per cent of the requirement. The Department subsequently informed the National Audit Office that action was in hand to reassess the requirements for different Classes of ships and to introduce a more disciplined approach to their planning and execution. They also pointed out that the shortfalls in time spent were caused by tight operational schedules and did not necessarily indicate undermaintenance. Such shortfalls result in an increase in availability.

2.33 While refits (level 4 maintenance and updates) are conducted outside operational time, their timely completion has a significant impact on the number of vessels available. Of the 55 projects in excess of go.5 million started and completed in the first two years of Dockyards’ commercial management, 39 were completed late. The Department have assessed that over 70 per cent of the total delay was for reasons outside the control of the Dockyard Contractors. These include: emergent work (55 per cent); the late supply of Ministry Supplied Material 19 per cent); and operational reasons such as late changes notified by the customer (5 per cent). Owing to the refit and post-refit problems of eight ships in 19%‘. Commander-in-Chief, Fleet identified a loss of 96 weeks of destroyer/frigate operational time, equivalent to two and a half “hull-years” of Fleet availability, a significant loss from a force of some 50 ships.

14


Part 3: Costs of Fleet Maintenance

3.1 This part of the Report considers how the Department seek to implement their maintenance policy at minimum cost, in particular what cost information is required and available and how this is affected by the organisation of fleet maintenance.

(a) Cost information required

3.2 Each method and level of maintenance has different costs and benefits. Identification of the optimum mix depends on the availability of the relevant cost information at an aggregate and individual equipment level needed to assess:

(i) the optimum level and frequency of preventive maintenance; beyond a certain point it is more expensive than corrective maintenance, and while associated costs can be reduced by extending the periods between preventive maintenance, this may increase the risk of breakdown and the need for corrective maintenance;

[ii) the most cost-effective level at which to undertake the work; while the Department’s policy is to maintain equipment at the lowest sensible level, this is a matter of judgement, involving variables such as the location of the vessel, available skills and costs where known.

(b) Cost information available

3.3 Information which exists centrally within the Department to meet Supply Vote accounting and cash control requirements has traditionally focused on the measure and control of inputs, i.e. men, equipment and assets. Information is not available in detail on a functional basis to enable the cost of maintenance at all the different levels to be identified. The manpower element of level 1 maintenance, i.e. on board ships, is treated as part of the sunk cost of operating a fighting ship and is not separately identified by the Department. Level 2 maintenance, i.e. Fleet Maintenance Bases, has been costed in aggregate since Executive Responsibility Budgets were introduced between 1986 and 1988. These remain deficient in several areas and reliable cost figures for individual jobs are not available (see Part 4 and Appendix 6).

3.4 Aggregate information is available for dockyard repair work [levels 3 and 4). The total cost of each refit is also known but not the cost of the individual

jobs relating to particular equipments. Most of the contracts with the commercially managed Royal Dockyards now include an incentive arrangement and in these circumstances the contractor is not required to provide a breakdown of the total cost to the Department of a refit against all the individual jobs or equipments. The National Audit Office could find no readily available and consistent aggregate figures for the annual costs of maintaining the whole Fleet or individual vessels across all levels. Table 2 shows the National Audit Office’s estimate of fleet maintenance costs, i.e. nearly s900 million.

3.5 In the recent report on Reliability and Maintainability of Defence Equipment (HC 173, paragraph 2.14(f)), the National Audit Office noted that a recurrent theme of Departmental reports has been that inadequate information was available on the unreliability of equipment in-Service and on the cost/ benefit of reducing it.

3.6 The National Audit Office’s consultants reported that while in the commercial sector overall performance can be readily measured against the yardstick of profit, large shipping companies usually include a maintenance budget, covering the costs of surveys, repairs, contractors’ fees, materials and spares, broken down on a time or ship basis, in their annual financial plan. Usually outturn is actively monitored against budget, with exception reporting to senior management in some instances.

3.7 The consultants regarded close monitoring of maintenance costs against budget and the preparation of comprehensive specifications to obtain fixed price contracts with selected and reliable ship repair yards as major factors in achieving savings. While it is not possible to attribute actual figures to individual measures, it is widely accepted by commercial shipping management that considerable benefits have been achieved in recent years, for example by reducing the effects of maintenance cost increases. In individual cases savings of up to 25 per cent of total maintenance costs are estimated to have been achieved by a combination of careful maintenance planning, fixed price contracts and budgeting with close monitoring.

3.8 The Department’s practice in respect of the Dockyards’ Level 3 and Level 4 work has been similar to that recommended by the consultants since the formation of the commercially-managed Dockyards.

15


Table 2

Estimated cost of Fleet Maintenance (1988-89) i;.; :, ,,, ~:, ., j: ,i -.,~,, ,I ; :_ ‘, ;, ;, _, ., I ,: ,; ,; : ,, > ,,,,, ,; > ,, /._ “~‘;‘.,,“.~I~~~-~~~~;‘~ +> “‘““*;, 5 ,, i ,;, ji :I ,/ :. ,,_ , ,, ,, ,; ,, ,, ,: ,, i ,<‘~/ s I

, .: ,, / / ,,, < cgvel. ) ,:, ,_ .’ anillion Approx@te Breakdown ‘; ;.’

In-house work Dockyard or : Commercial

work % %

1 Day-to-day maintenance by vessels’ staff 255(a) 100 - 2 Fleet Maintenance Bases 130(b) 80 20 314 Fleet Maintenance and Repair Organisation

Portsmouth 76(cl 95 5 4 Major repair or refit work requiring docking 420(d) - 100

881

Notes: (a) Estimated cost. (b) 1988-89 outturn figures. Includes the costs of the Fleet Maintenance Base within the Fleet Maintenance and Repair Organisation. (c] Includes level 4 work performed by the Fleet Maintenance and Repair Organisation which was valued at iF39 million. (d] Cost assessed from 1988-89 outturn figures.

The Department informed the National Audit Office that they were collecting information on shore support costs [i.e. Fleet Maintenance Base and Fleet Maintenance and Repair Organisation manpower, unprogrammed work and stores) and together with that available from the reports made at the end of assisted maintenance periods, this could eventually be used to set budgets for operational support. At present, however, the Department do not have comprehensive maintenance cost budgets covering all levels of maintenance nor do they record or monitor total maintenance costs for individual ships. The Department informed the National Audit Office that knowing the total maintenance cost of an individual ship was of limited value, since no two ships in the same Class batch were alike and it was often difficult to draw the line between updating and upkeep.

3.9 The commercial sector’s taut system of cost control and the economies sought during the recession of the early 1980s have enabled commercial ship owners to reduce their direct maintenance costs without reducing operational efficiency or the safety of their ships. Whilst acknowledging that there are differences between naval and commercial ships, the National Audit Office’s consultants stated that it would be reasonable to conclude that by imposing similar disciplines with regard to cost the Royal Navy should be able to make gains with regard to economy, efficiency and effectiveness similar to those achieved by the commercial shipping sector.

3.10 The economies sought by ship operators during the early 1980s have also led to design and

procedural improvements which would not have come about otherwise. For example, the engine rooms of most new vessels are now equipped for unmanned operation with long-term savings, and long-life, anti- fouling paints on hull bottoms have lengthened docking intervals.

3.11 The Department have pointed out that where possible the Royal Navy have introduced similar improvements by the use of more durable and less maintenance-intensive materials, e.g. long-life, anti- fouling paints have been used in over 50 Royal Navy hulls and will be applied to a further 40. However, the Royal Navy could not implement all such improvements because they must be able to continue to operate as a fighting unit in an emergency situation, a factor which the commercial sector do not have to consider. This results in a higher level uf manned machinery operation on Royal Navy than on commercial ships.

3.12 The National Audit Office’s survey of other navies indicated that they follow similar practices to the Royal Navy in that their measurement of maintenance costs is more common at higher refit levels, the main reasons being that more of this work is contractorised and civilianised and budgets are available against which expenditure can be monitored.

(c) Organisation

3.13 One of the factors which has inhibited the development of comprehensive cost information is the division of responsibilities for fleet maintenance

16


between the Controller of the Navy, Chief of Fleet Support, Commander-in-Chief, Fleet, and from 1 April 1990 Commander-in-Chief. Naval Home Command (see Appendices 3 and 4).

3.14 As regards expenditure, in broad terms the Controller of the Navy is responsible for procurement and initial support, and the Chief of Fleet Support for in-Service support. Expenditure on the latter extends over 20 years in the case of warships and can exceed the initial purchase cost by two to three times. Both have an input to the life-cycle costing cells set up under the Controller of the Navy’s Design for Through-Life Cost project to develop engineering and costing models to identify areas for cost-effective improvements in maintenance. The National Audit Office noted, however, that such improvements give rise to savings in in-Service costs in the long term, while the associated costs fall on the procurement budget in the short term.

3.15 The project, set up by the Controller of the Navy in 1978, has produced life-cycle cost models for weapon engineering and more recently marine engineering equipment systems. In addition a model of whole ship life costs is being developed. The House of Commons Defence Committee, in their 6th Report of 1987-88, considered that expenditure on the development of such techniques might produce disproportionately large savings, and that the Department must make faster progress to ensure that value for money decisions were better informed. The Department informed the National Audit Office that adequate funding has been made available for the development of specialised life-cycle costing models. The expanded effort now includes, with the help of consultants, attempts to extract/synthesise data from existing information such as the stores usage system.

3.16 The National Audit Office’s survey of other navies shows that they also experience difficulty in monitoring whole life costs, partly from a lack of costing information and hence output measurement at lower maintenance levels, although they claim to take account of whole life costs, in broad terms, in the decision process leading to new vessel procurement.

3.17 The Department have recognised that the division of responsibilities between the Controller of the Navy and the Chief of Fleet Support provides scope for overlap and duplication, and have conducted numerous studies of the problems. In October 1987, consultants concluded that a merger of the Controller of the Navy and Chief of Fleet Support organisations would result in a body too large to manage effectively. The Department told the National Audit Office in January 1990 that further studies were in hand into the structure of both the Controller of

the Navy and the Chief of Fleet Support organisations which would, inter alia, address the division of responsibilities in the engineering support of the Fleet. Meanwhile improved co-ordination is to be achieved through adequate representation on various committees. At the National Audit Office’s request, the Department had earlier provided a list of fourteen committees with an interest in fleet maintenance. The National Audit Office were unable to identify formal links between all the various committees and thus network their responsibilities; however links between nine have now been identified by the Department and are shown at Appendix 5. The Department informed the National Audit Office that a recent review of the engineering support committee structure had cocfirmed that Controller of the Navy and Chief of Fleet Support representation was adequate.

3.18 A February 1988 Departmental report on the interface between the two organisations commented that there was an inevitable tension between their initial procurement and through-life responsibilities. For example, the increased use of competitive tendering since 1981 has increased the variety of equipments serving identical functions within a Class of vessel and may therefore carry long-term penalties through increased support costs. These costs are difficult to quantify, but include increased spares inventories, training, documentation and test equipment. In 1988 the Department began a study to identify the cost penalties of re-tendering for equipments or the percentage initial savings required to outweigh higher through-life costs. The problem is being addressed in relation to future ship orders by including a requirement to achieve economy of support by maximising the use of equipments already in-Service.

3.19 A further problem identified by the interface report was the inadequate involvement of the design authority in setting and implementing engineering support policies. Considerable engineering input is required to support equipment in Service. This professional expertise resides in the Controller of the Navy’s departments and supporting industries. There has been a dilution and reduction of his support- orientated staff following the dispersal of dedicated specialist support cells. The interface report recommended that a further current review of working relationships, which is expected to lead to more staff savings, should examine the balance between the needs of procurement project staffing and the requirement for overall support policy direction. The interface report identified a need for more corporate direction on in-Service issues and also recommended that clear focal points should be established under the Controller of the Navy for

17


support policies and practices. Both recommendations have been accepted and implemented.

3.20 The concept of Integrated Logistic Support originated in the United States; it requires through- life support to be considered as an integral part of the design process. As part of their implementation of Integrated Logistic Support, the United States Navy have given through-life responsibility for both design

and logistics management to Ship Acquisition Programme Managers. This change began in 1980 with one Class of ship but is now applied to all fighting ships and submarines. In the United Kingdom both the Army and the Royal Air Force are implementing Integrated Logistic Support for their new equipments; in the Controller of the Navy area an Integrated Logistic Support manager has been appointed for the SSN 20 project.

18


Part 4: Fleet Maintenance Bases

4.1 This part of the Report considers whether Fleet Maintenance Bases provide a cost-effective input to fleet maintenance, by examining their organisation, management, output, performance, and commercial and international comparisons; and whether they are adequately used.

4.2 Second-level support for operational Royal Navy vessels in the United Kingdom is carried out by uniformed personnel at six Naval Bases at an annual cash cost of smne fl30 million, using assets with a book value of scana X90 million. All six are referred to in this Report as Fleet Maintenance Bases, although the Departmental nomenclature for them within the Naval Bases varies. Overseas, there are two small permanent maintenance units in Gibraltar and Hong Kong, while two naval engineering parties work on specialist forward-repair ships currently stationed in the Persian Gulf and the Falkland Islands. Staff of the United Kingdom Fleet Maintenance Bases also occasionally deploy overseas to undertake urgent repairs.

4.3 Unlike the other Fleet Maintenance Bases, that at Portsmouth is an integral part of the Fleet Maintenance and Repair Organisation, which was formed in 1984 on the closure of Portsmouth Dockyard. In August 1989 it comprised a civilian workforce of about 2,600 undertaking third and fourth-level repair, including a single refit stream for Type 42 destroyers, and the Service-manned Fleet Maintenance Base. Unlike the Bases, the Fleet Maintenance and Repair Organisation currently receives its funding from the Chief of Fleet Support and is tasked by both the Commander-in-Chief, Fleet and the Director General Ship Refitting. The Department in 1988 commissioned a review of the various tasks undertaken by the Organisation and the minimum level of resources required to achieve these tasks. The review, which is not yet complete, examined a range of costed options for different levels of repair activity.

(a) Cost-effectiveness of Fleet Maintenance Bases

Organisation and accountability

4.4 As illustrated in Figure 2, the Bases vary significantly in size and remit. There are also major differences in their internal organisation and lines of

accountability. At the time of the National Audit Office’s examination the head of each Base was supported by two separate staffs in his two distinct roles as the local representative of Chief Staff Officer [Engineering) under Commander-in-Chief, Fleet, acting as customer for the work required, and as Captain Fleet Maintenance under Chief of Fleet Support, acting as supplier of the Base repair and maintenance assistance required.

4.5 The Department expect to improve financial accountability and control during the second phase of their response to the Financial Management Initiative. The primary aim of their new management strategy is to secure better value for money from running cost expenditure in both operational and support areas by the closer alignment of financial accountability with line management responsibilities. Under these arrangements the Department plan to introduce, from April 1991, full-cost budgets which will not only provide funds for manpower and other running costs, but also progressively record the cost of supplies and services received from other budget holders, for example equipment spares. The management information systems associated with the new strategy will include objectives, targets and key performance indicators such as measures of effectiveness, availability and use of key equipments.

4.6 The need for a clearer customer-supplier relationship was one of the main reasons why the Department introduced commercial management into the Royal Dockyards. This was seen as a precondition for enhanced performance, with significant benefits expected from customer cost-consciousness and effective competition from the supplier.

4.7 The implementation of the new management strategy has already resulted in organisational changes in the Bases aimed at clarifying the split between the Fleet as customer for, and the Naval Bases as supplier of, Service-manned maintenance. From 1 April 1990 the Commander-in-Chief, Naval Home Command will assume responsibilities for the United Kingdom Naval Bases, so that Fleet Maintenance Base managers will be accountable to him rather than to the Commander-in-Chief. Fleet [Appendix 4(iv)]. Each United Kingdom Naval Base will operate as a single business unit covering most of its activities (including operational maintenance), and be managed by the Naval Base Commander who will

19

MINIS’IXY OF DEFENCE: FLEET MAINTENANCE

Figure 2 UK Fleet Maintenance Bases: Location, manpower complements & 1989-90 budgets

$g

Faslam Manpower 661

Maintenance and Docking facilities for Submarines

f31.7m running costs

ROSyth Manpower 358

Maintenance of Destroyers and Minesweepers

E28.Zm running cost!

Devonport Manpower 1,115

Maintenance of Frigates and Fleet Submarines

E51.2m running costs Portsmouth

Portland Manpower 139

Support for ships undergoin

7 operatmna sea training

f3.2m running costs

-I I Gosport

Manpower 240

Maintenance of Patrol Submarines

Manpower 370

Maintenance of Aircraft carriers, Destroyers and Frigates

E12.0m running cost:

Source: Minisby of Defence

20

MINISTRYOFDEFENCE:FLEETMAINTENANCE

have a budget for this purpose. The reorganisation of the Fleet Engineering Staff in February 1990, whereby the posts of local representative of the Chief Staff Officer (Engineering) and his staff are being abolished, will also help clarify this customer-supplier relationship.

Planning, monitoring and control of work

4.8 The Bases’ workload mainly comprises planned maintenance periods, unprogrammed repairs, work for Defence establishments and general Naval duties. Planned maintenance periods are programmed up to two years ahead and may be adjusted to take account of operational requirements. Overall progress is monitored against an outline of work notified by the vessel’s staff. However no overall time budget in manhours or cost is set for submarines or surface ships and no budgets are set for materials. Further details are at Appendix 6, paragraphs 1-3.

4.9 The National Audit Office consider that the present work planning procedures could be significantly improved. In particular:

(i] manpower and materials budgets should be prepared for each maintenance period and the outturn compared with the budget;

(ii) consideration should be given to small- scale computerisation of the detailed manual planning process to ease the planning load and to assist the preparation of a budget against which performance can be assessed;

[iii) the time taken for particular tasks should be fad back into the maintenance management system for surface ships as it is for submarines.

4.10 The Department informed the National Audit Office that proposals exist for providing the Bases with the information technology necessary both to plan and monitor maintenance support more efficiently, and to provide the management information necessary to assess its cost-effectiveness. Although funding exists for the systems development, the Department expect a lack of skilled information technology manpower resources to be a serious delaying factor.

Cost and management information systems

4.11 The Department introduced Executive Responsibility Budgets in five Bases between 1986 and 1988. The Department told the National Audit Office that the introduction of Executive Responsibility Budgets had moved them from a position where they had little, if any, visibility of the Bases’ costs to one where annual budgets and performance were regularly and formally reviewed.

4.12 The National Audit Office found that there were significant limitations with the budgets, which had not been operative for very long at the time of the examination. These included limitations in the data used, the absence of a budget for the submarine maintenance unit at Gosport, a lack of consistency between certain budgets and limited direct control of the majority of the resources included in the budgets. Further details are at Appendix 6, paragraphs 4-5.

4.13 The Department consider that the forthcoming reorganisation of Naval Bases (paragraph 4.7) and implementation of the new management strategy offer scope for increasing the resources directly controlled by the Bases. They hope to achieve greater consistency across all budgets and are to introduce a budget for the submarine maintenance unit at Gosport.

Manpower

4.14 In their recent Report on Ministry of Defence Manpower (HC 342 of 1988-89) the National Audit Office noted that Departmental studies in 1985 and 1986 estimated that more than 1,000 Royal Navy posts at Fleet Maintenance Bases might be civilianised, with significant cost-savings. At that time the Department had told the National Audit Office that the Royal Navy had deferred further review until the effects of the introduction of commercial management into the Royal Dockyards had been assessed. The Department have since informed the National Audit Office that they are continuing to examine the scope for further civilianisation but there are a number of factors to be taken into account in deciding whether civilianisation is practicable. The need to provide gainful and cost-effective employment for technicians and mechanics during their time ashore and to take account of the Royal Navy’s retention problems, has meant that the civilianisation of only a small number of posts has so far been agreed. Full implementation awaits the outcome of a policy review of Fleet Maintenance Base activity and manpower levels, and the finalisation of the uniformed resource requirements for the Bases in times of tension and war. Further details of manpower in the Bases are at Appendix 6, paragraphs 6-7.

4.15 In four of the countries who responded to the National Audit Office’s survey, Fleet Maintenance Base equivalents are exclusively Service-manned, with one country having a mixture of civilians and Servicemen and another civilians only. Other navies saw the benefits of Service rather than civilian manning as being the opportunity to provide a shore posting, the development of skills for later use onboard vessels, and the more assured availability of

21


Service personnel in times of tension. These factors were also cited by the Royal Navy. The main benefits of using civilians were seen to be their generally lower costs and greater continuity.

4.16 Since the basic systems for collecting manpower and other costs already exist. the National Audit Office consider that improved data reliability would result from increased computerisation of the planning and control of maintenance work packages, including more detailed labour budgeting (paragraph 4.9). The employment of civilians to collect the data would also provide an element of continuity and expertise, since under current arrangements the task is often undertaken by transient Naval personnel (Appendix 6, paragraph 6).

4.17 While the Department have arrangements for the external monitoring of work carried out during assisted maintenance periods (Appendix 6, paragraphs 8-91, the National Audit Office consider that effective internal and external monitoring of Fleet Maintenance Base performance requires the availability of reliable and consistent information on the actual use of labour and materials, and the introduction of cost budgets for defined tasks. Although the Executive Responsibility Budget and related manpower utilisation recording system have already improved the understanding of resource cost and usage, in the National Audit Office’s view they have not been developed to a point where the Bases are in a position to demonstrate that maintenance is carried out in the most cost-effective manner.

Commercial and international comparisons

4.18 The National Audit Office’s consultants concluded that private sector shipping companies do not generally maintain shore support units analogous to Fleet Maintenance Bases. Work which is beyond the capacity/capability of the ship’s crew is generally carried out alongside by shore personnel of major shipyards which, like the Bases, offer round-the-clock working. Owners sometimes use a shipyard team to carry out maintenance at sea. The consultants emphasised that such flying teams offered a cost- effective means of achieving high levels of availability. The National Audit Office note that Fleet Maintenance Base staff are similarly mobile: this is considered by the Royal Navy to be a key strength of the Service manning of the Bases.

4.19 All the foreign navies contacted by the National Audit Office have maintenance facilities equivalent to Fleet Maintenance Bases. Their vessels have planned periods of maintenance between refits conducted by ships’ staff augmented by Service or civilian support.

All navies have a forward support capability and four provide more skills at the Fleet Maintenance Base equivalent than exist on-board.

4.20 The Fleet Maintenance Base equivalent in the United States Navy visited by the National Audit Office was considerably larger and better equipped than any of the Fleet Maintenance Bases in the United Kingdom. The procedures for notifying the Base of the work required and for planning, monitoring and controlling the work were all fully computerised. Comprehensive data on performance were thus readily available.

(b) Fleet Maintenance Base capacity

4.21 The maintenance capacity of the Bases is directly influenced by the menpower available and the number of their berths, shore-based workshops, offices and servicing equipment. The National Audit Office therefore examined how the Department determine the capacity required and align this with their actual workload.

4.22 The Department produce an annual report which forecasts the peacetime maintenance support manpower required in each Base and provides the basis for staff complements. It reflects the number of vessels based at the port, the planned maintenance policy for each Class of vessel and the average number of staff required to complete planned maintenance work. The forecasts are incremental; in particular, the annual manpower requirements for submarine maintenance work are assessed by reference to the previous year’s workload per man complemented. Action is now in hand to zero-base the forecasts.

4.23 The Department’s annual long-term berthing report assesses over a ten-year period the total number of berths required in United Kingdom Naval Bases for all vessels, excluding those in refit, using the latest agreed Admiralty Board base-porting policy. Although there is no shortage of berths, National Audit Office enquiries at the Bases indicated that full maintenance facilities, particularly for weapon-tuning purposes, were not available at all maintenance berths. This results in the movement of vessels during maintenance periods, and hence reduced Base effectiveness. The Department have informed the National Audit Office that action is in hand to rectify these shortcomings. The Department undertake no specific annual review of the extensive shore-based servicing facilities available in the Bases but informed the National Audit Office that requirements are kept under continuous review through consultation with Base staff.

22

4.24 Figure 3 provides a breakdown of the 198748

workload of four of the Fleet Maintenance Bases for which comparable information is available. Although the information has been drawn from the Executive Responsibility Budgets and is not wholly reliable, the National Audit Office observed that while the manpower calculations (and hence Fleet Maintenance Base complements] relate solely to the expected planned shipwork load, only half of the Bases’ outturn reflects this activity. In addition, a significant proportion of the remainder of Base time is spent on non-ship work, mainly for other establishments.

4.25 Notwithstanding the uneven loading of work on the Bases these observations suggest that the size and complements of the Fleet Maintenance Bases may be greater than required for their level of shipwork in peacetime. A recent Departmental manpower audit of the Base at Portsmouth considered that the complement there could be reduced by 15 per cent.

Figure 3

(c) Relationship with the Royal Dockyards

4.26 The peaks and troughs in the workload of the Bases have traditionally been smoothed out by passing work at the margins to or from the Royal Dockyards. This flexibility is still available between the Fleet Maintenance Base and the Fleet Maintenance and Repair Organisation at Portsmouth and is considered locally to be a cost-effective use of their total resources. Three of the other Fleet Maintenance Bases now have an additional budget from Vote 5 to fund unprogrammed work in the commercial sector, including the Royal Dockyards, which is beyond the capacity or capability of the Fleet Maintenance Bases. However, as these Bases cannot reallocate these funds to work in the Bases without approval from higher authority there is a risk that decisions on whether unprogrammed work should be done by the Fleet Maintenance Base or commercially will be made primarily on the basis of what funds are available in each budget rather than

Workload of Four Fleet Maintenance Bases: 1987-88

n Programmed Shipwork

I

Productive Non- shipwork for other Naval/MOD establishments

9.8% ml Unprogrammed Shipwork

General Naval Duties - eg Training and Security

Source: Executive Responsibility Budgets

23

where it would be more sensible and cost-effective to do the work.

4.27 It is not possible, because of major differences between the ways in which commercial and Government rates are calculated, to produce an accurate comparison of the cost of work in the Bases and in the commercially-managed Royal Dockyards. However, broad estimates produced by the National Audit Office suggested that in 1987-88 the man-week costs in the Bases were at least 20 per cent higher than those in the Dockyards. The Department have questioned the validity of this comparison. They also believe that, for the most part, it is not appropriate to compare the Dockyards with the Fleet Maintenance Bases. They explained that the Dockyards perform long-term refits which are planned well in advance, against comprehensive specifications of the work required. By contrast, the Bases undertake some short periods of highly intensive maintenance work, the detail of which cannot be predicted very far in advance. The Department believe therefore that it is only at the margins that the respective tasks may be compared.

4.28 While the differences in costs quoted in paragraph 4.27 might suggest that substantial savings on the El30 million cost of running the Bases could be made, the following factors are also relevant:

Most Base staff have an essential war role (paragraph 4.32), the training for which is reflected in overheads; such training would be necessary even if work were passed to the Dockyards.

Service personnel can be employed more flexibly in terms of hours worked and breadth of employment without payment of additional allowances or overtime - the same flexibility does not apply to the civilian Dockyards.

The Bases provide shore postings for Royal Navy engineers, which is a significant factor in meeting the Department’s broad targets for sea- to-shore ratios. Such postings also provide essential hands-on experience and opportunities for Service maintainers either to improve or to retain their skills on a much wider range of problems and equipments.

4.29 Until Vesting Day in April 1987, Dockyard refit and repair work was capacity-determined, i.e. the work placed there was related more to capacity than to cost. Since then a clear customer-supplier relationship has been established together with strict budgetary control by Director General Ship Refitting on a project basis. The move to stricter project- funding has meant that each refit work package is

considered against the background of its costs. Work which is not accommodated within the refit programme is not done unless it is within the capability and resources available from the vessels’ or Fleet Maintenance Base staff. As a result some work previously undertaken in the Dockyards is now done by Fleet Maintenance Bases.

4.30 The National Audit Office noted at Rosyth that because of a reduction in Dockyard work packages, minor war vessels have received a maintenance period immediately before or after a refit. Fleet Maintenance Base staff have also been used to supplement the effort available from ship’s staff to support refits. Assistance from the Fleet Maintenance Base during the refit of HMS CLEOPATRA at Devonport in 1987-88 amounted to at least 800 man-hours. The Department, while pointing out that assisted maintenance periods have never been the responsibility of the Dockyards, have confirmed that they are frequently carried out either concurrently with or shortly after a refit or a docking to repair essential defects.

4.31 Areas where additional work falls on uniformed staff include overseeing and accepting contract work: and the work of the small predominantly uniformed contract cells established in three Fleet Maintenance Bases to undertake the technical and administrative tasks associated with the management of unprogrammed work contracts.

(d) The role of the Fleet Maintenance Bases in times of war

4.32 In general the Royal Navy will continue to rely heavily on the Fleet Maintenance Base organisation for repair and maintenance in times of tension and war, although there would be a shift of emphasis from planned to corrective maintenance. The Department recognise that their maintenance facilities are located in the main away from the areas where the Fleet would be deployed. Detailed consideration is therefore being given to the forward deployment of certain maintenance staff. At the time of the National Audit Off&x’s examination only limited plans had been developed to provide the maintenance facilities required at such forward operating locations. The Department informed the National Audit Office that the policy for repair and maintenance in times of tension and war was being developed. The National Audit Office welcome this since they recognise that any consideration of the Bases’ capacity, workload and staffing in peace on the lines suggested in this Report must have regard to the Services’ requirements in a period of tension or war and the need to employ fully in peacetime the Service personnel required in war.

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Appendix 1

Maintenance Management Systems for Surface Ships and Submarines

1. The primary documents are the Ship/Submarine Equipment List, compiled from the original specification of the vessel as it enters service, and the Planned Maintenance Schedule which shows for each item of equipment what work must be done, how often and at what level.

2. The Planned Maintenance Schedules are based on the manufacturer’s maintenance recommendations, amended to take account of the Navy’s past experience of maintaining similar equipment. They reflect an engineering view of when and where best to maintain a particular item, taking into account other factors such as the number of engineers on board vessels and the Department’s further policy of conducting maintenance work at the lowest sensible level.

3. In general, scheduled maintenance tasks of less than four-monthly frequency are performed by the vessel’s staff. Tasks with a periodicity of four months or more and tasks which are beyond the capability of the vessel’s resources are carried out with varying degrees of shore assistance [levels 2-4) during assisted maintenance periods alongside or in dry dock. The length and frequency of assisted maintenance periods are calculated by the Department and vary between ship Classes because of differing equipment fits and self-maintenance capabilities. For example, destroyers and frigates have a significant self-maintenance capability and receive an assisted maintenance period of four weeks every six months from a Fleet Maintenance Base. Patrol vessels, which have a very limited self- maintenance capability, receive two weeks Fleet Maintenance Base assistance every three months.

4. In large surface ships all maintenance documentation is held on board and the planning and progressing of maintenance is the responsibility of the ship’s Engineer Officers. In most submarines, although job instructions are held onboard, the shore-based Maintenance Analysis Reporting System generates for each operating cycle a complete list of planned maintenance work to be carried out. The submarines’ engineers plan and monitor progress against this list.

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Appendix 2

Engineering Information Systems

1. The Department currently has three main engineering information systems.

Stores usage

2. Stores usage is a prime indicator of equipment reliability and availability. The Department’s Equipment Related Stores Usage Information System collects data on engineering stores used in most major surface ships, Mine Counter Measure Vessels and two nuclear submarines. Engineering stores requisitions identify the equipment and the reasons for requisition, e.g. corrective or preventive maintenance. The requisitions are computer-analysed and the spares used costed. While the data are useful in identifying the reasons for high stores usage, the National Audit Office found that they cannot be used to their full potential because the system covars only those stores used in operational time and has not been extended to all submarines because of a lack of computing capacity. The Department subsequently informed the National Audit Office that stage five of OASIS (para 2.23) will be used to collect data for this system and that the system will be expanded to cover all submarines within three years.

Vessel upkeep

3. The Submarine Upkeep Data System, which is operated by a private contractor, provides information on repairs and maintenance of submarine marine engineering equipments carried out by vessel staff and Fleet Maintenance Bases, equipment running times and defect reports. It provides lists of “Top 20” defects on a regular basis, and ad hoc reports on request. There is no equivalent to this system for submarine weapon equipments or surface ships. However, data recorded under OASIS 5 (paragraphs 2.23-2.24) will facilitate similar analyses in the future.

Defect reports

4. Information on equipment failure rates is vital to engineers in determining the success or otherwise of maintenance decisions. With the exception of a few equipments with special reporting requirements, details of submarine defects requiring more than 15 minutes work to rectify are returned onshore for analysis. On surface ships they are recorded onboard, but landed only when considered appropriate, eg when corrective design work or specific support action is required. The lack of full reporting, together with the small populations involved (dozens at most), means it is not always possible to build up accurate equipment behaviour patterns.

5. There are different defect report forms for surface ships and submarines and different methods of processing and prioritising marine and weapon engineering reports ashore. Surface ship mechanical equipment defects in particular are not prioritised when passed to the design authorities although the forms are usually forwarded under a covering letter where the degree of urgency is stated. A Departmental study of the defect reporting system in 1980 called for a further review to examine the streamlining of the reporting procedure and the improvement of data capture. This was not pursued because of lack of resources.

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A further report in 1984 made similar recommendations. It concluded that compared with surface ships, submarine defect reports and the system for dealing with them provided clearer prioritisation, more regular monitoring by Fleet Engineering Staff, more feedback to vessels’ staff, a better focus for the design action needed, and greater encouragement to vessels’ staff to produce defect reports.

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Appendix 3

Fleet Maintenance Responsibilities and Financial Accountability

Resmnsibilities

1. Controller of the Navy is the design authority for the Navy’s vessels from cradle to grave. His broad responsibilities are to manage the design and procurement of new vessels: to produce the original Planned Maintenance requirements for vessel systems and equipments; to control throughout the vessel’s life the maintenance of important items of equipment; to provide technical advice to the Fleet Engineering Staff and input to the planning and specification of refit work packages, including the design of the system and installation requirements of new or improved equipments; to sponsor the development of new equipments (including those for incorporation during refits], with particular regard to achieving improvements in availability, reliability and maintainability: and to develop engineering standards and programmes on specific topics.

2. Chief of Fleet Support commands two officers with separate fleet maintenance responsibilities. The Director General Fleet Support Policy and Services is responsible for the Fleet’s engineering support policies: the length and frequency of maintenance periods for each Class of vessel; and the manpower, assets and berthing requirements of the Fleet Maintenance Bases (paragraphs 4.22-23). The Director General Ship Refitting is responsible for managing the term contracts let to the commercially-managed Royal Dockyards; and for planning, specifying, managing and overseeing all shipwork contracts and ensuring their completion to time and cost.

3. Commander-in-Chief, Fleet commands the Fleet Engineering Staff, who advise him on engineering support policy matters; provide and amend all upkeep and engineering administration documentation; plan programmed ship upkeep, in conjunction with operations staff, and facilitate unprogrammed ship repairs; and collect and analyse engineering and vessel activity data and provide feedback to the design authority through the Fleet Engineering Data Centre.

Financial Accountability

4. Fleet maintenance is financed from four separate Votes, each with a different accounting officer. Vote 1 (Permanent Under Secretary) funds the Department’s manpower costs, which are mainly incurred at levels 1, 2 and 3, i.e. vessel staff and at Fleet Maintenance Bases and the Fleet Maintenance and Repair Organisation; Vote z (Chief of Defence Procurement) funds equipment, spares and materials used at all levels; Vote 4 (Property Services Agency) funds works expenditure, some on a repayment basis from Vote 5; while Vote 5 (Chief of Fleet Support) funds contracts for refit work, including unprogrammed work, at levels 3 and 4.

5. As from I April 1990 the Department will assume responsibility for Vote 4 works expenditure through a new Defence Works Organisation. This, together with the Naval Base re-organisation and the new management strategy (paragraphs 4.5, 4.7) is expected to simplify the financial arrangements described above.

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Appendix 4

(i) Navy Department organisation relevant to Fleet Maintenance

CHIEF OF NAVAL STAFF 1st SEA LORD

ASSISTANT CHIEF OF NAVAL STAFF

CHIEF OF FLEET SUPPORT

DGFSP&S DGSR DGST (N)

DNOT DES (N)

DGFSP&S Director General Fleet Support (Policy & Services)

DGSR Director General Ship Refitting

DGST(N) Director General Stores & Transport (Navy)

DES(N) Director of Engineering Support (Naval]

DNOT Director Naval Operations and Trade

29

(iii) Royal Navy organisation relevant to Fleet Maintenance (from 1.4.90)

31

ivIINISTRY OF DEFENCE: FLEET MAINTENANCE

s ----- a .3 i m \

rn: $1

d

-sl z9

-------

z 2 2

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Appendix 5

Committees relevant to Fleet Maintenance

1. Principal Committees are listed below together with the authorities to which each reports.

Title Naval Engineering Support Policy Group (NESPG)

ReDlarkS Discussion of joint Chief of Fleet Support [CFS)/Controller of the Navy [CofN) naval engineering and materiel support matters. Reports to both CFS and CofN.

Naval Availability Committee (NAC) Promotion of cost-effectiveness in availability, reliability and maintainability of Naval materiel. Reports to NESPG through Director of Engineering Support (Naval) P=W’Jl1.

Ship and Weapon Equipment Support Committee (SWESC)

Discussion of all aspects of support of equipments sponsored by the Sea systems Controllerate not specifically covered by other committees. Reports to NESPG through Director General of Supplies and Transport (Naval) (DGST(N)).

Marine Engineering Advisory Panel WQ.Pl

Discussion of matters of professional interest to Royal Navy Marine Engineering Branch. Liaison group having functional link with NESPG concerning Marine Engineering maintained equipment.

Weapon Engineering Advisory Panel (mAPI

Discussion of matters of professional interest to Royal Navy Weapons Engineering Branch. Liaison group having functional link with NESPG concerning Weapons Engineering maintained equipment.

Shipwork Review Group (SRG) Endorses ship upkeep cycles. Reports to CFS through Director General Ship Refitting (DGSR).

Standing Committee on Refit and Endorses upkeep cycles. Reports to Repair of Surface Ships (SCORR(SS)) SRG.

Standing Committee on Refit and Endorses upkeep cycles for Repair of Submarines (SCORR(SM)) Submarines. Reports to SRG.

Naval Equipment and Stores Supply of Stores and Spares. Reports Committee (NESC) to CFS through DGST(N).

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The hierarchy of these Groups, Committees and Panels is as follows:

CFS COfN

/ESCINESPG-----..;.

, ‘r , , 1 “[lx_;p

SCORR [SS) SCORR (SM) NAC SWESC

Denotes hierarchical link ---- Denotes functional link explained above

2. Committees and Working Parties which have no direct or functional authority through the above hierarchy are:

Naval Base Development Co-ordinating Committee

General policy on development of Naval Bases. Reports to CFS; will report to Commander-in-Chief Naval Home Command f?om 1 April 1990.

Forward Support Unit and Main Base Working Party

Determines forward Support Unit requirements and control programme. Reports to Commander- in-Chief Naval Home Command from 1 April 1990.

Facilities at Fleet Maintenance Bases to support submarines

Monitors submarine support aspects within the Fleet Maintenance Bases. Reported to Commander-in-Chief Fleet. Now disbanded.

Policy Committee for Alterations and Additions

Oversees the translation of Defence Staff’s policy for changes to warships to meet Class Policy Document requirement and associated Staff Requirements. Reports to Assistant Chief of the Defence Staff Operational Requirements [Sea].

Weapon Upkeep Management Discussion of all weapon upkeep Committee aspects. Reports to CofN.

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Appendix 6

Fleet Maintenance Bases: Planning, control and management of workload

(a) Planning, monitoring and control of work

1. The Bases’ workload comprises:

(i) Planned maintenance periods, where the Base undertakes preventive and corrective work beyond the capacity and/or capability of vessels’ staff;

(ii) unprogrammed repairs or higher priority work on other ships;

[iii] work for Defence establishments and repayment work for foreign governments;

[iv] general naval duties, e.g. training, sentry duty.

2. Planned maintenance periods are programmed by central Fleet Engineering Staff for up to two years ahead and adjusted to take account of operational requirements. The timing and duration vary between surface ships and submarines as do the procedures for notifying the Bases of the work required. Broadly, vessel staff notify the work on which they require assistance 3-6 weeks in advance of the maintenance period. This is reviewed and amended to reflect the Base and commercial contractor assistance available.

3. Overall progress is monitored against the plan by a Ship manager for submarines or through regular progress meetings for surface ships. For submarines, the requisition work forms from vessels’ staff contain an indicative time budget and the time taken to complete the work is reported for use in the submarine maintenance management system. However, no overall time budget in man-hours or cost is set for submarines or surface ships and no budgets are set for materials. Detailed allocation of work to staff, progress-chasing and monitoring of time spent is usually the responsibility of a senior petty officer who keeps unofficial records of the time jobs take. Unprogrammed repairs are similarly processed but to a much tighter timescale.

(b) Cost and management information systems

4. The Department introduced Executive Responsibility Budgets in five Fleet Maintenance Bases between 1986 and 1988. The aim was to provide a more effective definition of responsibility and improved control over costs by establishing a sound financial basis for planning, monitoring and accounting for support activities.

5. The National Audit Office found that there were significant limitations with the Budgets, which had not been operative for very long at the time of the examination:

(i] Data limitations. Data capture was neither complete nor completely accurate. Information was not readily available on the cost of materials, and

35


Service manpower costs had not always been completely reliable. While steps were being taken to identify the actual costs of some utilities, many overhead costs in the Budget statements were apportioned and depended on the timely provision of accurate information from third parties which was often not available.

(ii) Coverage. No budget had been introduced for the submarine maintenance unit at Gosport, which is an integral part of an operational rather than a support unit. Information on the full costs and achievement of second-level maintenance was therefore incomplete.

(iii) Lack of consistency. The high-level budget setter in all cases was an Assistant Under Secretary reporting to the Chief of Fleet Support. In Bases other than Portsmouth there was a reasonably consistent approach, since the budget was controlled by the Chief Staff Officer (Engineering] to Commander-in-Chief, Fleet, and the budget holder was the local Captain Fleet Maintenance. But the budget for the Fleet Maintenance Base at Portsmouth was controlled and held by the Head of the Fleet Maintenance and Repair Organisation and formed part of a wider budget covering the total activities of the Fleet Maintenance and Repair Organisation. The budget provided a detailed allocation of costs between tasks [including those of the Fleet Maintenance Base) but used a different system for the collection and analysis of manpower costs and produced different performance indicators. This inhibited direct comparison of the performance of all Bases (for example on workload, paragraph 4.24).

(iv) Use. Budgets had increased the cost-awareness of Base management and some Bases had direct control of contract repair money (13 per cent of the Bases’ budget, excluding Portsmouth). However, the control which budget managers had over the use of other resources was limited to peripheral areas, e.g. travel costs.

(c) Manpower

6. Permanent Naval personnel in post at some Bases are up to 25 per cant below complement, partly because of the priority given to filling sea posts. The shortages are partly filled by Service super-numeraries or “transients”. These are Naval personnel who are unavailable for other duties for medical or personal reasons or are between Service drafts. They pose problems for the Bases because they often lack suitable skills and the length of their attachment is uncertain. The National Audit Office noted at Faslane that the average length of stay of a transient Junior Rate was less than six weeks.

7. Manpower is the main Base resource but reliable manpower data are not always available. Man hours data can be analysed by vessel and work centre, but it generally cannot be broken down to specific jobs. The task of inputting and analysing data is often delegated to “transients” (paragraph 4.X), who may have neither the background nor the commitment to ensure full and accurate data capture and analysis.

(d) External monitoring of performance

8. Vessels’ Engineer Officers provide some external monitoring of Fleet Maintenance Base standard performance through standard reports on the material state of a ship at the and of each assisted maintenance period. The Department

36

MlNISTRY OF DEFENCE: FLEET MAINTENANCE

have recently revised this report form because the previous form’s design did not ensure its consistent completion, and it gave no indication of how the Bases had performed in relation to what had been requested of them.

9. The new report provides for:

(i) an assessment of the assistance requested by vessels and that provided by both Bases (in man-hours) and contractors (in cost). Assessments should be possible of any relationship between the resourcing of Bases and outstanding work; and the extent to which peaks in workload have been resolved by passing work to the commercial sector (paragraph 4.26);

(ii) comments by Captain Fleet Maintenance on the performance of the maintenance period;

[iii] all outstanding operational defects to be listed. This should enable Fleet Engineering Staff to more accurately assess vessels’ material state.

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Appendix 7

Background information and summary of responses to the National Audit Office questionnaire to other Navies regarding their Fleet Maintenance practices

p::~: ; ,, ; i ii .~,~,. i*:- ,) *x *,i 1 i i_ ,.,,. ii,. ,, i:, i _, s ..\ * ‘,‘,.’ ~‘~xmhst:~i;,~,,~,:~~~*‘~~a4“?,“I i x’-: ‘Z” ,; ,..,_, g::.:,:,:,, _ DetidfK” :,.%., ,,,,. :,rl,r.

,, ,, ;,,&: .~, ,; ,,,, ,: ‘:“&hti-$p ** B”e,g~ti\~*..i * TTr&hh~y ” y “,ry~g+g ” :: : $$!;;L;:” :

GklYllCXll~‘

Composition of the Fleet: 1. Number of surface ships

frigate size and above. 16 6 2 22 3 16

2. Number of surface ships smaller than frigate size. 38 39 62 60 78 143

3. Number of submarines. 6 0 4 10 12 24

Personnel: 4. Approximate number of

uniformed personnel. 15,600 3,200 6,300 50,000 5,000 38,400

5. Proportion of uniformed personnel, excluding conscripts, who are specialist engineers. 14% 32% 17% 18% 20% 35%

(Officers)

Question 1. Please provide a statement of your Navy’s overall maintenance policy and objectives.

Summary response The policies of two respondents were in terms of achieving a maximum or specified level of ship availability while the other four were in less precise terms of maintaining performance requirements of platforms, systems and equipments in order to accomplish assigned tasks.

Specific examples: One country specified maintaining the fleet “at lowest cost” Another emphasised the need to keep the planned maintenance workload constant.

2. What is the frequency of vessel refits?

3. Are refits carried out in government-owned or private sector shipyards, or both?

Frequency varies between vessel types, but for those comparable with the Royal Navy’s destroyers and frigates, oscillation is around a six year average.

Generally both, but reasons vary, e.g. one respondent stated that the choice between the two was made on the basis of achieving full loading of government dockyards, another that private dockyards worked on large ships while government dockyards worked on smaller ones.

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4. Who carries out periods of planned maintenance between refits, and where are these carried out?

5. Does the Navy have shore bases providing a first line of assistance to ships staff? (e.g. specialist engineering facilities at ships’ home port).

6. Are the Bases Service 01‘ civilian manned?

7. Do the skills of the Bases and the resources available to them exceed those on board ships?

8. Is a forward support capability provided, through for example, mobile units?

9. What are considered to be the benefits of Service or civilian manning of shore based maintenance units?

10. Are budgets set for maintenance tasks, and are actual costs monitored against these budgets?

11. How is output and performance of maintenance and maintainers measured?

12. What procedures exist for measuring the whole life cost of maintaining vessels, and are these costs taken into account during the procurement of new vessels?

1% To what extent and how are data on equipment performance collected on board ships?

In five countries, ships’ crews carry out the work, variously augmented by Service or civilian shore support from specialist maintenance bases/tenders or dockyards. Work is carried out in harbour/ alongside.

Yes.

Four of the six respondents employ a mix of personnel; one is wholly Service manned, the other wholly civilian.

Yes in the case of four of the respondents; in particular there are facilities ashore which enable more complex tasks to be carried out.

Yes, provided either from the shore Bases or by tender.

Service manning is more expensive but provides shore postings for Service engineers, allows development of skills for use at sea and is operationally more effective in times of tension and war. Civilian manning has lower training and running costs and provides more permanent manning.

Most respondents set budgets in terms of manhours or cost. Monitoring of outturn is done more for civilian than Service work, because fully costed budgets are more likely to be available against which expenditure can be monitored.

By comparison of outturn with budget where relevant information is available (see response to Question lo]. Otherwise by monitoring of availability, defects reported in the period following maintenance and by annual reviews of operational availability and effectiveness.

More accurate costing information and output measurement is available for higher level, civilian maintenance. However, where relevant costs are available, they are taken into during the procurement of account in broad terms in life cycle castings for new procurement.

Data are collected to monitor running times, failure rates etc. Most, except on the newest ships, are collected manually. This is labour intensive and not wholly reliable.

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