Background History and Purpose of the Naval Shipyards The naval shipyards were originally designed to build wind- and steam- powered ships and range in age from 111 years to 252 years old (see fig. 1). Over the years, the Navy has adapted them into highly industrialized, large-scale operations that are essential to national defense and fulfill the legal requirement for DOD to maintain a critical logistics capability that is government owned and operated to support an effective and timely response for mobilization, national defense contingency situations, and other emergency requirements. However, as we have reported, the shipyards’ age, residual configuration for the shipbuilding mission, and poor condition reduces their efficiency for their modern-day mission of repairing nuclear-powered ships and submarines. The naval shipyards perform depot-level maintenance, which involves the most comprehensive and time-consuming maintenance work, including ship overhauls, alterations, refits, restorations, nuclear refuelings, and inactivations—activities crucial to supporting Navy readiness. This maintenance is performed during periods designated in the Navy’s Optimized Fleet Response Plan, an operational schedule of maintenance, training, and deployment periods for the entire fleet. It is designed to maximize the fleet’s operational availability to combatant commanders while ensuring adequate time for the training of personnel and maintenance of ships. We reported in 2016 that successful implementation of the Optimized Fleet Response Plan depends, in part, on the shipyards completing maintenance on time and that maintenance delays reduce the time that ships are available for training and operations. As a result, successful implementation of the Optimized Fleet Response Plan is essential to the Navy’s ability to maintain readiness and support operational needs. The Navy’s Shipyard Infrastructure Optimization Plan The Navy developed the congressionally directed Shipyard Infrastructure Optimization Plan (the plan) to mitigate infrastructure deficiencies at the public shipyards. For some infrastructure, the Navy had preexisting planning that it used to outline specific mitigation projects that would address deficiencies. For other aspects of its infrastructure, the plan outlines the Navy’s strategy for developing a more detailed mitigation approach. The plan serves as the Navy’s engineering analysis and strategy for the optimal placement of facilities and major equipment at each public shipyard, including a 20-year investment plan for infrastructure investments needed to improve shipyard performance. The plan proposes mitigations to address limitations with three major facets of the public shipyards’ operations: their dry docks, facilities, and capital equipment (see fig. 2). Navy officials said they integrated previous studies in these three areas to create the plan. For example, Naval Sea Systems Command (NAVSEA)—which is responsible for program management of the shipyards—completed a dry dock study that identified gaps in capacity and configuration, which served as the basis for the dry dock portions of the plan. In addition, the Navy had previously developed capital investment strategies intended to help improve the state of the shipyards’ facilities and equipment, which were also included in the plan. The Navy estimates that the plan could eventually save 328,000 labor-days each year and recover most of the maintenance periods it currently cannot support. Capital Planning and Reliable Cost Estimates Capital planning is the process by which an organization prepares for the acquisition of capital assets such as the facilities and equipment in the Navy’s plan. Congress, the Office of Management and Budget, and we have identified the need for effective capital planning, which can help ensure that capital funds are spent productively. In the overall capital programming process, planning is the first phase, and it drives the remaining phases of budgeting, procurement, and management. For decision makers to conduct effective capital planning, they must have reliable cost estimates. A reliable cost estimate is critical to the success of any program. Such estimates provide the basis for informed investments, realistic budgets, meaningful measurement of progress, proactive course correction, and accountability for results. According to the Office of Management and Budget, cost estimates should be well-documented and updated on a regular basis. Estimates should also encompass life-cycle costs of the program. Without high-quality estimates, agencies are at risk of experiencing cost overruns, missed deadlines, and performance shortfalls. The GAO Cost Estimating and Assessment Guide has identified a number of best practices grouped into four “characteristics” that are the basis of effective program cost estimating and should result in reliable and valid cost estimates that management can use to make informed decisions, as shown in figure 3 and discussed below. Comprehensive: A comprehensive cost estimate includes all costs of the program over its complete life cycle, from the start of the program through design, development, deployment, operation and maintenance, and retirement. It also fully defines the program, reflects the current schedule, and is technically reasonable. Comprehensive cost estimates provide sufficient detail to ensure that cost elements are neither omitted nor double counted. Finally, where information is limited and judgments must be made, the comprehensive cost estimate documents all cost-influencing ground rules and assumptions. Well-documented: A well-documented cost estimate is supported by detailed documentation that describes how it was derived and how the funds will be spent in order to achieve a given objective. Therefore, the documentation includes such things as the source data used, the calculations performed and their results, and the estimating methodology. Moreover, this information is captured in such a way that the data used can be easily replicated and updated. The documentation also discusses the technical baseline and how the data were standardized. Finally, the documentation includes evidence that the cost estimate was reviewed and accepted by management. Accurate: An accurate cost estimate provides results that are unbiased, and is not overly conservative or optimistic. An estimate is accurate when it is based on an assessment of the most likely costs, adjusted properly for inflation, and contains few, if any, minor mistakes. In addition, an accurate cost estimate is updated regularly to reflect significant changes in the program—such as when schedules or other assumptions change—and actual costs, so that it always reflects the program’s current status. During the updating process, differences between planned and actual costs are documented, explained, and reviewed. Among other things, the estimate is grounded in a historical record of cost estimating and actual experiences on comparable programs. Credible: A credible cost estimate discusses any limitations of the analysis resulting from uncertainty or biases surrounding the data or assumptions. Major assumptions should be varied and other outcomes recomputed to determine how sensitive they are to changes in the assumptions. Risk and uncertainty analysis are performed to determine the level of confidence associated with the estimate. Finally, an independent cost estimate is developed by a group outside the organization to determine whether other estimating methods produce similar results. The Navy’s Plan Identifies Critical Shipyard Deficiencies, but Planning Has Not Been Completed, and Implementation Will Be Complex, Taking over 20 Years The Shipyard Infrastructure Optimization Plan has identified a number of infrastructure deficiencies at the Navy’s four public shipyards—including deficiencies in dry docks, facilities, and capital equipment—that negatively affect their ability to support the Navy’s current and future force structure. However, the extent to which the Navy’s plan addresses these deficiencies remains to be seen because facility planning has not been completed and the proposed actions are complex and years away from being implemented. The Plan Generally Addresses Dry Dock Deficiencies, but Planned Improvements Will Not Be Complete Until 2035 The Navy’s plan outlines steps that generally address the critical dry dock deficiencies the Navy has identified, although it does not anticipate completing these steps until 2035. Of the shipyards’ 18 dry docks, the plan states that eight require modernization and recapitalization projects to meet the Navy’s operational needs, including accommodating new classes of ships. If all of the projects are completed as planned, the Navy anticipates that it will be able to recover 67 of the 68 maintenance periods that it currently cannot support through fiscal year 2040. According to the Navy, without these planned dry dock investments, the Navy would lack sufficient capacity for about a third of its planned maintenance periods at the shipyards and would have to defer maintenance for some ships. This could result in ships being unavailable for use until a dry dock is available, effectively reducing the size of the fleet available for operational missions. However, the extent to which the plan’s actions will address the shipyards’ dry dock deficiencies remains to be seen because the initiation and completion of many of these projects is years away. Built in 1919, dry dock 3 is not certified to handle nuclear fuel, which means submarines must be defueled elsewhere before this dock can be used, according to Navy officials. Additionally, because of its shallow depth, the Navy can move Los Angeles–class submarines into or out of the dock only during high tides. Even then, the shipyard has to remove portions of the submarine to decrease weight and over-flood the dock to create enough clearance for the boat. Shipyard officials said dry dock 3 could be modified to create a new multimission dry dock (M2D2) that would provide an additional spot to dry dock an aircraft carrier on the West Coast. This would provide the redundancy necessary to allow the Navy to perform significant seismic upgrades to dry dock 6, which faces significant seismic risks and is the only dry dock on the West Coast capable of accommodating an aircraft carrier. Navy officials said the final decision regarding the location of the M2D2 is pending a formal Environmental Impact Study. insufficient capacity to support the longer Virginia-class submarines with the Virginia Payload Module (see fig. 4), lack of redundancy for a West Coast aircraft carrier, and various other capacity and capability deficiencies that hinder the maintenance process such as small dry docks that require time- consuming workarounds or an inability to handle nuclear fuel (see sidebar). Though the Navy intends to recover most of the missed maintenance periods with these projects, according to Navy officials, the plan was developed using then-current estimates of fleet size and shipbuilding schedules derived from the fiscal year 2017 force structure projection. The Navy has since revised that projection, and the fiscal year 2020 shipbuilding projection increases both the number and accelerates the build rate of the nuclear powered ships supported by the naval shipyards (see fig. 5). Program office representatives told us that the plan, if implemented, will support the higher numbers and accelerated schedule of the Navy’s 2020 shipbuilding plan. Officials also stated that they plan to stay aware of further changes to depot maintenance requirements by attending annual fleet scheduling conferences in the future. These conferences are intended to reach a Navy-wide consensus on, among other things, changes to shipbuilding plans and the schedules for various ships to undergo their dry dock maintenance. Program officials noted that their presence at the conference allows them to update the SIOP in the event that there are additional changes to the shipbuilding schedule in the future. We have previously recommended that the Navy assess the risks to implementing shipyard infrastructure improvements; changes to the shipbuilding schedule are one such risk. Because of our previous recommendation and the Navy’s process for reviewing changes, we are not making an additional recommendation on this matter. Planning to Fully Address Shipyard Facility Deficiencies Is Ongoing, with Improvements Expected to Take at Least 20 Years to Implement It is too soon to determine whether the Navy’s plan will fully address the shipyards’ facility deficiencies as the Navy has not yet completed the complex effort necessary to develop detailed facility optimization plans for each shipyard. Implementing the plan will be a complex, multiyear effort to redesign the workflows at each shipyard and will involve several steps (see fig. 6). As part of the facility optimization effort, the Navy will seek to address several critical facility deficiencies it has identified at the public shipyards that negatively affect the Navy’s ability to complete maintenance on time. These include the average age of shipyard production shop facilities is 76 years, exceeding DOD’s expected average service life of 67 years for facilities; the average condition rating of shipyard production shop facilities is 66, which is considered poor, falling below the Navy standard of 80; and inefficient facility layout at the shipyards that has not been optimized to support the maintenance, repair, and disposal of nuclear-powered Navy ships and submarines. According to the Navy, the shipyards were originally designed to support the construction of ships and submarines and not the maintenance mission for the nuclear fleet that they perform today. Because the shipyards were designed for a different mission, key facilities such as maintenance shops may be located at significant distances from where the majority of work is performed. As a result, it is not uncommon for workers to walk several miles each day because of the inefficient layout of the shipyards, according to shipyard officials. For example, building 155 at Pearl Harbor Naval Shipyard, which is actively involved in submarine maintenance, is about 1/3 mile away from the nearest dry dock. This distance creates additional travel time for both personnel and material, resulting in maintenance inefficiencies. We have noted previously that waterfront locations are often ideally located to support the shipyards’ maintenance mission, but that the challenges of dilapidated structures, historical designations, and other issues can make it difficult for the shipyards to make full use of the locations (see sidebar). Building 6 at Pearl Harbor Naval Shipyard is a former foundry that has not been used since the 1980s. The building’s distinctive 3-tier roof architectural style make it a historic facility and therefore difficult to restore and modernize, according to shipyard officials. Because of its size and close proximity to the waterfront, shipyard officials would like to use the facility to support the maintenance mission, rather than let it sit empty. However, the building has extensive health and safety issues and also requires environmental remediation. The Navy’s plan estimates that the implementation of facility optimization will take at least 20 years and require increased spending for facility construction and modernization over that time. In addition, this will be a highly complex effort to redesign four large operational industrial installations, and the time frame for its completion remains uncertain at this stage. The modeling and simulation of shipyard production facilities began in February 2019 and will not be completed until 2020. According to program office representatives, Pearl Harbor’s “current state” facility model is scheduled to be completed near the end of fiscal year 2019, and the optimal facility model is scheduled to be completed in the 2nd quarter of fiscal year 2020 (see fig. 7). Modeling and simulation at the Norfolk, Portsmouth, and Puget Sound shipyards are not scheduled to be completed until the end of fiscal year 2020. However, some shipyard officials have expressed doubt about this timeline, stating that the modeling and simulations may take more effort to complete. For example, officials from Puget Sound Naval Shipyard told us they have done some degree of industrial modeling and simulation since 2007, but never at this magnitude and with this many variables. Because the modeling and simulation effort is so complicated, officials said it may be necessary to use the model to optimize the most critical parts of the industrial process first before gradually adding others. Shipyard officials also said that running the models will require a highly skilled and interdisciplinary team due to the complexity of the effort. If the simulations are completed as planned, the Navy expects to use them to complete the shipyard Area Development Plans in fiscal year 2021 and a prioritized list of facility development projects by fiscal year 2022. Navy officials said the list would likely inform facility investments for the following 5 years. Navy officials told us that they are suspending work on many facilities’ projects in order to avoid funding projects that do not serve the larger optimization goal, although some critical projects have been allowed to continue because they provide improvements needed to meet immediate operational needs, such as dry dock improvements. However, according to Navy officials, some projects have been deferred until 2022 when the prioritized list of projects to support shipyard optimization is expected to be complete. In addition, specific actions to address other infrastructure deficiencies at the shipyards are not addressed in the current plan, adding additional uncertainty. Navy officials explained that the optimized layout of shipyard facilities, which is still in early development, will drive the future efforts that address deficiencies associated with roads, utilities, sidewalks, and information-technology systems, which are not addressed in the plan. These officials explained that it will likely be several years before they can incorporate specific actions into the plan to address these deficiencies. Planning to Fully Address Equipment Deficiencies Awaits Completion of Facility Optimization Effort, with Improvements Expected to Take at Least 20 Years The Navy plans to mitigate equipment deficiencies at the shipyards through increased funding to replace aged shipyard equipment. Specifically, the Navy’s plan states that funding levels for shipyard capital equipment will need to increase from historical levels to about $150 million annually and be sustained for at least 20 years to bring the average age of shipyard equipment to within industry standards. However, it is not clear whether this will fully address shipyard equipment deficiencies, because the Navy officials stated that they will not be able to create a more detailed goal until after the facility modeling and simulation effort is complete. The Navy’s plan states that most shipyard capital equipment is beyond its effective service life, obsolete, unsupported by the original manufacturers, or at risk of failure. According to the plan, the average age for industrial equipment in the private sector is 7 to 10 years, while the average age of equipment at the four shipyards is 24 years. According to the Navy’s plan, aged equipment can increase the costs of depot maintenance for submarines and aircraft carriers and place schedules at risk. Modernizing the capital equipment at naval shipyards is essential to improving their efficiency, reducing maintenance costs, and supporting fleet readiness, according to the plan. The capital equipment deficiencies identified by the Navy’s plan are consistent with our recent work, which found that the equipment at the shipyards was, on average, past its expected service life (see table 1). However, it is too early to determine whether the Navy’s plan to increase equipment funding will fully address the shipyards’ equipment deficiencies. Navy officials told us that they have not yet established a specific improvement goal for shipyard capital equipment, because developing this metric will not be possible until after the modeling and simulation phase to develop optimized facilities is complete. For example, during the modeling and simulation phase to optimize shipyard operations, the Navy will likely make decisions that will affect the amount and cost of capital equipment, such as concentrating some specialized equipment at certain yards, standardizing equipment items and purchasing them in bulk at lower cost, or purchasing more efficient items that may reduce the quantity needed. Officials stated that they developed a rough order-of-magnitude estimate of the cost to replace aging equipment. The Navy has, in the past, spent about $50 million to $60 million annually to invest in capital equipment at the shipyards. However, the Navy estimates that it will require average annual funding of $150 million over the course of 20 years at a total cost of $3 billion in order to modernize capital equipment to within private industry standards. If this effort is sustained over the 20 years identified in the plan, the capital equipment deficiencies at the shipyards will not be fully addressed until fiscal year 2040. However, this estimate is based off an earlier Navy study that identified a need for annual average funding of $150 million over a longer, 30-year period. According to this earlier equipment study, the 10 additional years of investment would total $1.5 billion. Navy officials have stated that they will attempt to address the shipyards’ equipment deficiencies over the 20-year time frame by taking advantage of different equipment purchasing strategies and gaining efficiencies from the facility optimization effort that will allow the Navy to recapitalize equipment more effectively than was possible with its previous strategies. However, the efficacy of these strategies cannot be assessed until the Navy completes its modeling and simulation phase in fiscal year 2020 and develops more detailed plans for recapitalizing its shipyard equipment. The Navy’s Initial Cost Estimate of $21 Billion to Implement Its Plan Is Preliminary and Does Not Identify All Required Resources The Navy estimates the Shipyard Infrastructure Optimization Plan will cost about $21 billion to implement; however, the estimate is preliminary and therefore is not complete or reliable. To develop the plan, the Navy first identified deficiencies in three major categories—dry docks, facilities, and equipment—and then developed a cost estimate to understand the resources it would need to mitigate those deficiencies. For the dry dock and equipment portions of the estimate, the Navy was able to build on previous cost estimates that had investigated additional investments in those areas. For the facilities portion of the estimate, the Navy assumed total reconstruction of most current facilities based on current processes, using notional square-footage facility requirements in the absence of a more detailed engineering assessment. The initial estimated cost to implement this plan over 20 years includes $4 billion for improvements to the dry docks, $14 billion for facilities, and $3 billion for capital equipment. Navy officials stated that they wanted to provide Navy leadership and congressional decision makers with a rough order-of-magnitude estimate, not a budget-ready cost estimate. That is why the estimate was released in its 2018 report to Congress, instead of after the Navy completes its shipyard modeling and simulation effort, which they believe will give them a more accurate picture of the necessary investments. For example, the Navy acknowledges that several expected costs are not included in its plan, such as those for utilities, roads, and environmental remediation. Officials with the Navy agree that including these will likely add hundreds of millions of dollars to the plan’s cost. However, they decided that it was not useful to calculate these costs before the facility optimization process was complete, since the facility layout is going to have an effect on the placement of roads and utilities, for example. Navy officials stated that the initial cost estimate was prepared using applicable Navy guidance and that they plan to develop a more detailed cost estimate after the Navy has finished creating digital models of the shipyards and they start prioritizing specific projects, which they estimate will be in fiscal year 2021. We found that the Navy’s initial cost estimate minimally met two characteristics of a reliable cost estimate, partially met one, and did not meet one, as shown in table 2. The GAO Cost Estimating and Assessment Guide identifies four “characteristics” of a reliable cost estimate as well as associated cost estimating best practices as previously discussed. Specifically, we found that the initial cost estimate was not reliable because it was not developed using the following best practices: Program Baseline: The Navy’s plan includes some pieces of a program baseline, such as a schedule and goals, but does not fully establish a common definition of the program from which all cost estimates could be derived. A program baseline for cost and schedule may be established prior to contract award or funding work and allows decision makers to track and report on cost and schedule deviations above certain thresholds from initial estimates throughout the life of the project, to facilitate oversight. Navy officials stated that the plan’s first phase is meant to serve as the program baseline, containing all relevant data to address systemic issues across all four shipyards. However, only the facilities estimate was developed specifically for the plan; the dry dock and equipment estimates came from previous Navy efforts, conducted under different conditions. Without a program baseline, a cost estimate will not be based on a complete program description and will lack specific information regarding technical and program risks. Work breakdown structure: The Navy’s plan includes a broad list of high-level goals, such as timelines for completing major lines of effort, but the estimate does not include a more detailed work breakdown structure. Including a work breakdown structure is an important part of a comprehensive plan. A work breakdown structure deconstructs a program’s end product into successive levels with smaller specific elements until the work is subdivided to a level suitable for management control. This allows program office and shipyard personnel to accurately track and closely monitor the progress of efforts to meet the SIOP’s goals. In addition, including this structure would ensure consistency across the various cost estimating contributors, the shipyards, and NAVSEA, and would ensure that there were no omissions from the analysis and that costs are not double counted. Navy personnel stated that a more detailed work breakdown structure would not be possible until after the modeling and simulation of the shipyards is complete, after fiscal year 2020. Methodology and key assumptions: The Navy’s plan describes assumptions, but not the methodology used to develop the initial cost estimate. For example, the plan states that the size and configuration of existing facilities make it difficult to increase capacity without a significant investment, but does not describe how the Navy intends to address the issue of a larger fleet. Cost estimates are often built around assumptions—such as the rate of inflation or material costs— because they are attempting to predict future costs. However, the plan must include a clearly identified methodology to be considered well- documented according to GAO best practices. Unless methodology and assumptions are clearly documented, it will be impossible to reproduce the estimate, and decision makers will lack information on which costs are concrete and which are best guesses. Inflation: The estimate did not account for inflation, which is an important component of an accurate cost estimate. If an estimate does not include adjustments for inflation, cost overruns can result. Inflation costs on a $21 billion program over 20 years could reach 45 percent or more. Applying inflation is an important step in cost estimating because, in the development of an estimate, cost data must be expressed in like terms. If a mistake is made or the inflation amount is not correct, cost overruns can result. Navy officials noted that they are currently evaluating the use of a covered dry dock model at the shipyards, which could result in significant maintenance efficiencies. A covered dry dock is a dry dock with an area built over it, which allows the shipyard to develop production space that can minimize personnel and materiel movement. However, the Navy is still investigating the cost benefit of the covered dry dock, which means that there could be additional costs or complications not included in the current plan. not include a cost risk or uncertainty analysis. A comprehensive analysis of risk and uncertainty in the estimate is an important component of an accurate cost estimate. Navy officials have identified a number of risks to implementing the plan, such as the costs of complying with historical preservation requirements, environmental remediation, and the acquisition or adaptation of alternative workspace for shipyards to use while facility upgrades are performed. Officials have stated that these factors could add hundreds of millions of dollars more to the total cost of the plan. For example, an official from Norfolk Naval Shipyard said that environmental remediation of certain sites at Norfolk alone could easily cost millions of dollars to execute. Furthermore, the plan excluded certain costs that the Navy will necessarily incur in implementing it, such as those related to utilities or roads. Because cost estimates predict future program costs—sometimes for projects that have never been built before— Navy officials always associate uncertainty with them (see sidebar). Lacking risk and uncertainty analysis, management cannot determine a defensible level of contingency reserves that is necessary to cover increased costs resulting from unexpected design complexity, incomplete requirements, technology uncertainty, and other uncertainties. While the Navy did not initially include mitigation strategies for these risks in the plan, Navy officials have stated that they are involved in a number of efforts to address them. Sensitivity: Our analysis showed that the Navy’s estimate does not include a sensitivity analysis, which evaluates the effect that individual elements or assumptions can have on the estimate. Without a sensitivity analysis, cost estimators and management will not have a full understanding of the implications that changes in ground rules and assumptions can have. Officials have stated that they plan to include a sensitivity analysis in their more detailed cost estimate in 2021. Independent Cost Estimate: Our analysis showed that the Navy’s plan does not include an independent cost estimate. An independent cost estimate provides an evaluation of the quality, accuracy, and reasonableness of a program’s cost estimate by a neutral third-party, with emphasis on specific cost and technical risks. It also helps to identify risks associated with budget shortfalls or excesses. Navy officials noted that an independent cost estimate was likely not feasible at this point, considering that the effort was still in its very early stages. However, the officials stated that given the size and projected cost of the plan, they anticipate they will likely seek out an independent cost estimate in the future. Navy officials said they plan to develop a more detailed cost estimate after the Navy has finished creating digital models of the naval shipyards and identifying their optimized layouts, which they estimate will be in fiscal year 2021. However, even in the context of a preliminary estimate, the best practices associated with the four characteristics are foundational and should be the building blocks upon which any sound program is based. The importance of best practices is only magnified by the size of the program, which means ignoring best practices can have meaningful effects. For example, as we noted previously, not adjusting for inflation is likely to underestimate the cost of the program. Navy officials have expressed openness to the best practices as they prepare the more detailed cost estimate. However, without incorporating these cost estimating best practices that inform Navy decision makers and Congress of the full costs of shipyard optimization, the Navy is at risk of not identifying the resources it needs to fully implement its optimization plan. In addition, without fully accounting for all costs, management will have difficulty successfully planning program resource requirements. The Navy Has Created a Management Structure to Oversee the Shipyard Optimization Effort, but Has Not Yet Identified Clear Roles and Responsibilities for Shipyards The Navy created a management structure—a program management office (referred to as PMS 555)—to oversee the estimated 20-year-long process of optimizing the shipyards in June 2018. Shortly thereafter, in September 2018, the Assistant Secretary of the Navy for Research, Development, and Acquisition stated that, though the shipyard optimization effort did not fit all the characteristics of a formal acquisition program, its size and importance required the Navy to treat it as one. As a result, the newly created program office was designated as the acquisition lead for all efforts related to shipyard optimization. The program office was also required to report on its progress quarterly to an executive oversight council consisting of leadership representatives from a number of Navy organizations. This program office includes representatives from Navy organizations that would necessarily be involved in shipyard construction, including Navy Installations Command and Naval Facilities Engineering Command. Navy officials explained that NAVSEA is managing the implementation of the plan through the program office; Navy Installations Command provides installation support through management of shipyard land and facilities; Naval Facilities Engineering Command provides acquisition and technical expertise for real estate, facilities, and related environmental studies; and the shipyards implement the plan’s activities (see fig. 8). In the year since its creation, the program office told us they have begun taking steps to prioritize shipyard projects and complete the modeling and simulation of the existing shipyards. The office has also developed its internal organizational structure, which includes describing its relationships to essential stakeholders such as Navy Installations Command and Naval Facilities Engineering Command. However, the program office has not yet formally clarified the extent to which it will interact with the shipyards or its expectations of support from the shipyards. For example, officials with the program office have stated that they plan to locate new staff both in Washington, D.C., and at field offices at each of the shipyards. However, neither the program office nor the shipyards yet know where the field offices will fall in the shipyards’ reporting structures—including the chain of command—or precisely what their roles will be. According to program office representatives, the Navy is in the process of developing documentation, including a memorandum of agreement, to formally codify roles and responsibilities for executing the plan among the program office and its field offices, the shipyards, and other Navy organizations to accomplish these tasks, but did not provide an estimated time frame for when these roles and responsibilities would be determined. Officials said their current plan is for field offices to serve as extensions of the program office and that they will help the shipyards to oversee the execution of the plan. Program office representatives intend for shipyard personnel to help define project requirements, collect data, provide input on the digital shipyard models, and communicate the plan among the entire shipyard workforce. However, the development of the memorandum of agreement has been extended. Standards for Internal Control in the Federal Government states that management should establish an organizational structure, assign responsibility, and delegate authority to achieve the entity’s objectives. Shipyard officials told us that the current lack of clarity has created concerns and confusion about what their roles should be during implementation. For example, shipyard officials were uncertain in what fiscal years certain positions would be needed for implementing the plan, and shipyard officials were not always involved with planning efforts. In addition, according to NAVSEA officials, the lack of clear roles and responsibilities has hampered several long-term planning efforts, including identifying and tracking performance metrics. According to Navy officials, the program office has since received funding that it intends to use to hire additional staff, and they intend to embed some of those staff members at the shipyards to coordinate with shipyard personnel. However, at present, shipyard personnel have stated that they are generally left to interpret and enact implementation activities, which could lead to inefficient or duplicative efforts. Given the time frames of the plan, even minor delays due to inefficiency could result in projects being postponed and critical ship maintenance being deferred. Establishing clear roles and responsibilities for the shipyards would better position the Navy to effectively implement the plan. Conclusions The Navy’s four public shipyards are critical for repairing and maintaining the Navy’s nuclear fleet, and the Navy spends millions of dollars annually on facilities and equipment in order to sustain shipyard performance. Inefficient shipyards can lead to longer maintenance times, increased costs, and reduced readiness. Lack of adequate capacity can also result in critical parts of the fleet sitting idle awaiting maintenance, incurring hundreds of millions of dollars in operating and support costs without providing any operational benefit. We note that the shipyards are struggling to meet the Navy’s current needs with inadequate facilities, aging equipment, poorly configured dry docks, and an ineffective management approach for addressing these issues. The Navy is attempting to address these concerns with its Shipyard Infrastructure Optimization Plan. However, the cost estimate for implementing this plan is preliminary and therefore likely under states the costs of what will be a decades-long effort. Because the Navy will be required to request funding from Congress over 20 years in order to implement this plan, the lack of a reliable cost estimate places the effort at risk. By developing a more complete cost estimate, the Navy could reduce the risk that it might request too little funding to achieve its desired outcome. Without high- quality estimates, agencies are at risk of experiencing cost overruns, missed deadlines, and performance shortfalls. In addition, determining the roles and responsibilities of the organizations involved in implementing the plan would enhance the Navy’s ability to successfully complete the effort by ensuring that all stakeholders clearly understand their roles and expectations. Recommendations for Executive Action We are making the following four recommendations to the Department of Defense: The Secretary of the Navy should ensure that the shipyard optimization program office (PMS 555) include all costs—such as costs for program office activities, utilities, roads, environmental remediation, historical preservation, and alternative workspace—when developing its second, more detailed, cost estimate. (Recommendation 1) The Secretary of the Navy should ensure that the shipyard optimization program office (PMS 555) use cost estimating best practices—as outlined in the GAO Cost Estimating and Assessment Guide—in developing its second cost estimate, including a program baseline, work breakdown structure, a description of the methodology and key assumptions, inflation, fully addressing risk and uncertainty, and a sensitivity analysis. (Recommendation 2) The Secretary of the Navy should ensure that the shipyard optimization program office (PMS 555) obtain an independent cost estimate of the program prior to the start of its project prioritization effort. (Recommendation 3) The Secretary of the Navy should ensure that the shipyard optimization program office (PMS 555), in coordination with relevant stakeholders, establish clear roles and responsibilities for the shipyards involved in the Shipyard Infrastructure Optimization Plan. (Recommendation 4) Agency Comments We provided a draft of this report to DOD for review and comment. In written comments provided by the Navy (reproduced in appendix III), DOD concurred with our recommendations. The Navy also provided technical comments, which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretary of Defense, the Secretary of the Navy, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have questions about this report, please contact me at maurerd@gao.gov or (202) 512-9627. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix IV. Appendix I: Status of Recommendations from Naval Shipyards: Actions Needed to Improve Poor Conditions that Affect Operations (GAO-17-548) as of August 2019 Appendix II: The Navy’s Workload Management Plan Identifies Efforts to Address Shipyard Capacity Issues, but Success Depends on Optimistic Assumptions The Navy’s Workload Management Plan Includes Efforts to Address Capacity Issues at the Public Shipyards That Have Contributed to Maintenance Delays and Lost Operational Days The Navy released a 5-year plan for depot maintenance on submarines in December 2018, for fiscal years 2020 through 2024. The workload plan identifies efforts to address shipyard capacity issues across the nuclear- maintenance enterprise. According to the workload plan, the root cause of submarine idle time and associated loss of operational availability is largely that public shipyard capacity is not keeping pace with growing maintenance requirements. As a result, the public shipyards have historically struggled to complete maintenance on time, as shown in table 4. As we have previously reported, maintenance on ships and submarines may be delayed as a result of a number of factors, such as workforce gaps and inexperience, the poor condition of facilities and equipment, parts shortages, changes in planned maintenance work, and weather. The Navy’s workload plan discusses several efforts to improve maintenance performance at the public shipyards. Increasing hiring for the public shipyards. The Navy hired over 20,600 workers during fiscal years 2013 through 2018. After accounting for attrition, these hires increased total end strength from 29,400 to 36,700. Accelerating training for new employees. The effect of significant attrition and hiring resulted in approximately 56 percent of the shipyard production workforce having fewer than 5 years’ experience. The public shipyards implemented new approaches for accelerating training to develop skills in a relatively inexperienced workforce. Accounting for new employees’ lower proficiency and productivity. Shipyard officials have noted that employees with less than 5 years’ experience are generally not as skilled or productive as more experienced personnel. The Navy has established more realistic maintenance planning parameters to account for the lower proficiency and productivity of recently hired, less experienced workers. Improving the definition of workload requirements. Naval Sea Systems Command (NAVSEA) evaluated technical and program maintenance requirements with stakeholders in the maintenance community to identify and address barriers to on-time completion. Among the areas evaluated were time and condition-based maintenance strategies; logistic strategies; work estimating processes; shipyard overtime levels; and technology strategies. Improving material reliability and availability. The Navy is taking actions such as updating class maintenance plans; identifying and tracking frequently needed parts to determine appropriate acquisition strategies; creating an improved material forecasting tool; and moving material closer to the user. Balancing the submarine maintenance workload across the public and private shipyards. The Navy identified two submarines for which maintenance could be outsourced to Electric Boat or Huntington Ingalls over the next 5 years, in addition to the four submarines for which maintenance is currently outsourced. The Success of the Navy’s Submarine Workload Management Plan Depends on Optimistic Assumptions The workload plan contains some optimistic assumptions which may jeopardize achieving the intended benefits. According to the Navy’s workload plan, the Navy’s efforts identified above are intended to eliminate all submarine idle time and fully address the submarine maintenance backlog by fiscal year 2023. However, success of the plan depends on the public and private shipyards and the Navy realizing improvements in their performance that they have not yet demonstrated. For example: On-time completion of submarine maintenance, at both the public and private shipyards. The workload plan states that on-time completion of submarine maintenance, at both the public and private shipyards, is critical to eliminating submarine idle time and the submarine maintenance backlog. However, this assumption may not be realistic in light of recent performance at public and private shipyards. As discussed above, on average the public shipyards have completed maintenance on time only about 26 percent of the time between fiscal years 2007 and 2017. Of the three submarine maintenance periods that were allocated to the private shipyards between fiscal years 2015 and 2018, all three are projected to be completed about a year late, according to Navy reports. Officials with both Electric Boat and Huntington Ingalls have acknowledged the delays, which they attribute to an inexperienced workforce, lack of capital investment, and the submarines being in worse condition than expected. These officials also stated that if the Navy were to provide them with regular submarine repair work, they would expect their repair times to improve as their planning process matures and their workforce gains experience. Timely implementation of the Navy’s Shipyard Infrastructure Optimization Plan. Dry dock projects outlined in the Shipyard Infrastructure Optimization Plan must be completed on schedule, or else the Navy will not have the capacity to conduct some of its anticipated maintenance. This would in turn result in additional idle time and backlog. Some projects, such as the multimission dry dock project in Portsmouth, require the completion of earlier projects in order to proceed. Anything that disrupts the schedule of the earlier project could also affect the schedule of the later project. Given that the Shipyard Infrastructure Optimization Plan describes a 20-year- long effort that, at present, does not have clear organizational roles and responsibilities or a complete accounting of all the costs, it is possible that the gains it is intended to produce will take longer than expected to materialize. Appendix III: Comments from the Department of Defense Appendix IV: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the individual named above, key contributors to this report are Suzanne Wren, (Assistant Director), James Lackey and Cody Raysinger (Analysts-in-Charge), A. Steven Bagley, Anna Irvine, Jennifer Leotta, Amie Lesser, Felicia Lopez, Carol Petersen, Michael Silver, and William Tedrick. Related GAO Products Military Depots: Actions Needed to Improve Poor Conditions of Facilities and Equipment That Affect Maintenance Timeliness and Efficiency. GAO-19-242. Washington, D.C.: April 29, 2019. DOD Depot Workforce: Services Need to Assess the Effectiveness of Their Initiatives to Maintain Critical Skills. GAO-19-51. Washington, D.C.: December 14, 2018. Navy and Marine Corps: Rebuilding Ship, Submarine, and Aviation Readiness Will Require Time and Sustained Management Attention. GAO-19-225T. Washington, D.C.: December 12, 2018. Navy Readiness: Actions Needed to Address Costly Maintenance Delays Facing the Attack Submarine Fleet. GAO-19-229. Washington, D.C.: November 19, 2018. Navy Shipbuilding: Past Performance Provides Valuable Lessons for Future Investments. GAO-18-238SP. Washington, D.C.: June 6, 2018. Navy Readiness: Actions Needed to Address Persistent Maintenance, Training, and Other Challenges Affecting the Fleet. GAO-17-809T. Washington, D.C.: September 19, 2017. Naval Shipyards: Actions Needed to Improve Poor Conditions that Affect Operations. GAO-17-548. Washington, D.C.: September 12, 2017. Navy Shipbuilding: Policy Changes Needed to Improve the Post-Delivery Process and Ship Quality. GAO-17-418. Washington, D.C.: July 13, 2017. Department of Defense: Actions Needed to Address Five Key Mission Challenges. GAO-17-369. Washington, D.C.: June 13, 2017. Military Readiness: DOD’s Readiness Rebuilding Efforts May Be at Risk without a Comprehensive Plan. GAO-16-841. Washington, D.C.: September 7, 2016. Defense Inventory: Further Analysis and Enhanced Metrics Could Improve Service Supply and Depot Operations. GAO-16-450. Washington, D.C.: June 9, 2016. Military Readiness: Progress and Challenges in Implementing the Navy’s Optimized Fleet Response Plan. GAO-16-466R. Washington, D.C.: May 2, 2016. Defense Inventory: Actions Needed to Improve the Defense Logistics Agency’s Inventory Management. GAO-14-495. Washington, D.C.: June 19, 2014. DOD’s 2010 Comprehensive Inventory Management Improvement Plan Addressed Statutory Requirements, But Faces Implementation Challenges. GAO-11-240R. Washington, D.C.: January 7, 2011.


Background History of Conflict in the DRC and the Region The DRC is a vast, mineral-rich nation with an estimated population of more than 85 million people and an area that is roughly one-quarter the size of the United States, according to the UN. Since gaining its independence from Belgium in 1960, the DRC has undergone political upheaval and armed conflict. From 1998 to 2003, the DRC and eight other African countries were involved in what has become known as “Africa’s World War,” which resulted in a death toll of an estimated 5 million people in the DRC, according to State. During that period, in 1999, the UN deployed a peacekeeping mission to the DRC, and since then the United States and the international community have sought to improve security in the DRC. However, eastern DRC continues to be plagued by violence—including numerous cases of sexual violence reported by the UN—often perpetrated against civilians by nonstate armed groups and some members of the Congolese national military. More recently, presidential elections were originally scheduled for 2016, when the president’s final term in office expired, but the government delayed elections until December 2018. During this time, the UN reported an increase in human rights violations. In 2018 and 2019, the UN reported that serious violations of human rights remain widespread in the DRC, including continued acts of sexual violence by government security forces as well as nonstate armed groups. In addition, the UN noted that criminal networks and armed groups, including members of the Congolese national military and police, continued to derive illegal revenues from smuggling and illicit taxation of minerals from eastern Congolese mines. Uses of Conflict Minerals Various industries, particularly manufacturing industries, use the four conflict minerals—tin, tungsten, tantalum, and gold—in a wide variety of products. For example, tin is used to solder metal pieces and is also found in food packaging, steel coatings on automobile parts, and some plastics. Tungsten is used in automobile manufacturing, drill bits, and cutting tools, and other industrial manufacturing tools and is the primary component of filaments in light bulbs. Most tantalum is used to manufacture capacitors that enable energy storage in electronic products, such as cell phones and computers, or to produce alloy additives used in turbines in jet engines. Gold is used as reserves and in jewelry and is also used by the electronics industry, including, for example, in cell phones and laptops. SEC Conflict Minerals Disclosure Rule In August 2012, SEC adopted its conflict minerals disclosure rule in response to Section 1502(b) of the Dodd-Frank Act. In the summary section of the adopting release for the rule, SEC noted that to accomplish the goal of helping to end the human rights abuses in the DRC caused by the conflict, Congress chose to use the Dodd-Frank Act’s disclosure requirements to bring greater public awareness of the sources of companies’ conflict minerals and to promote the exercise of due diligence on conflict mineral supply chains. The map in figure 1 shows the countries covered by the SEC disclosure rule, including the DRC and its 26 provinces. The SEC disclosure rule addresses the four conflict minerals named in the Dodd-Frank Act originating from the covered countries. The rule outlines a process for companies to follow, as applicable, to comply with the rule. (See app. II.) The process broadly requires a company to 1. determine whether it manufactures, or contracts to be manufactured, products with “necessary” conflict minerals; 2. conduct a reasonable country-of-origin inquiry concerning the origin of those conflict minerals; and 3. exercise due diligence, if appropriate, to determine the source and chain of custody of those conflict minerals, adhering to a nationally or internationally recognized due diligence framework, if such a framework is available for these necessary conflict minerals. If companies choose to disclose that their products are “DRC conflict free” in a conflict minerals report, the SEC disclosure rule requires companies to obtain an independent private-sector audit. Following an appellate court decision that a portion of the disclosure required by the SEC disclosure rule violated the First Amendment, SEC staff issued guidance on April 29, 2014, indicating that, pending further action by the SEC or a court, companies required to file a conflict minerals report would not have to identify their products as “DRC conflict undeterminable,” “not found to be ‘DRC conflict free,’” or “DRC conflict free.” In April 2017, following the entry of the final judgment in the case, the SEC’s Division of Corporation Finance issued revised guidance, indicating that, in light of the uncertainty regarding how the commission would resolve those issues and related issues raised by commenters, the Division of Corporation Finance had determined that it would not recommend enforcement action to the commission if companies did not report on specified due diligence disclosure requirements. However, the SEC staff told us that the guidance is not binding on the commission and that the commission could still initiate enforcement action if companies did not report on their due diligence in accordance with the rule. According to SEC staff, the 2017 guidance, while temporary, is still in effect, pending review of the rule by the commission. As of June 2019, the rule was on the SEC’s long-term regulatory agenda, which means— according to SEC staff—that any action would likely not take place until after March 2020. Conflict Minerals Disclosures Filed in 2018 Were Similar in Number and Content to Those Filed in Prior Years Almost as Many Companies Filed Conflict Minerals Disclosures in 2018 as in Each of the Past 2 Years In 2018, 1,117 companies filed conflict minerals disclosures—slightly fewer than the number of companies that filed in 2017 and 2016 (1,165 and 1,230, respectively). Our analysis of a generalizable sample of the 1,117 filings found that an estimated 85 percent of the companies filed as domestic, while the remaining 15 percent filed as foreign. This domestic- to-foreign ratio is similar to the ratio in 2017 and 2016. Overall, when reporting on the conflict minerals used in their products, an estimated 62 percent reported using tantalum; 63 percent, tungsten; and 66 percent, gold—percentages similar to those reported in 2017 and 2016. An estimated 76 percent reported using tin, which was similar to the 69 percent reported in 2017 and significantly higher than the 61 percent in 2016. An estimated 24 percent did not specify the minerals they used. A Similar Percentage of Companies Conducted Country of Origin Inquiries as in the Past 2 Years; the Percentage of Companies Reporting a Determination Has Increased since 2014 Our analysis of our generalizable sample found that, as in 2017 and 2016, almost all companies that filed conflict minerals disclosures indicated that they had conducted country-of-origin inquiries. Specifically, an estimated 100 percent of companies that filed reported that they had conducted such an inquiry, similar to the percentages that reported doing so in the prior 2 years. As a result of the inquiries they conducted, an estimated 56 percent of companies that filed reported whether the conflict minerals in their products came from covered countries—similar to the estimated 53 percent in 2017 and 49 percent in 2016. The percentage of companies able to make such a determination significantly increased between 2014 and 2015, and has since leveled off. (See figure 2.) Some Companies Filing in 2018 Reported Taking Actions to Improve Supply Chain Data, Though Many Continue to Report Difficulties in Determining Country of Origin As in past years, our review of our generalizable sample of filings found that some of the companies in our generalizable sample reported taking the same actions to improve supply chain data collection that they had taken in past years, including using standardized tools and conducting surveys. Those companies that conducted surveys reported doing further investigation into the source of minerals, for example, by following up with suppliers to improve the specificity and completeness of their survey responses. Other actions companies reported taking to improve supply chain data collection included educating suppliers about conflict-free sourcing and creating and publicizing conflict minerals policies. In interviews, representatives of selected companies and other industry participants also noted, as they had in prior years, that awareness among suppliers about the use of conflict minerals continued to increase. However, many companies reported difficulties in determining the country of origin of conflict minerals, in part as a result of lack of access to suppliers and complex supply chains involving many suppliers and processing facilities. Specifically, some companies reported that some suppliers did not respond to requests for information, or that supplier and smelter information was incomplete or contained errors. Some companies also reported, among other factors, confusion among suppliers about the requirements of the SEC disclosure rule, and gaps in supplier education and knowledge. Almost All Companies Required to Conduct Due Diligence Reported Conducting It in Their 2018 Filings Our review of our generalizable sample found that 94 percent of the companies that were required to conduct due diligence, as a result of their country-of-origin inquiries, reported conducting it. This percentage is similar to those in prior years: 96 percent in both 2017 and 2016. An estimated 89 percent of the companies that were required to conduct due diligence reported using a due diligence framework prescribed by the Organisation for Economic Co-operation and Development (OECD) guidance to conduct due diligence on the source and chain of custody of the conflict minerals in their products. This percentage is comparable to the 87 percent in 2017 and 92 percent in 2016. The remainder of the companies reported using non-OECD guidance or did not specify the guidance they used, if any. Of all the companies that conducted due diligence (a subset of the companies that conducted country-of-origin inquiries shown in figure 2 above), an estimated 35 percent reported that they were able to determine that their conflict minerals came from covered countries or from scrap or recycled sources, compared with 37 percent in 2017 and 39 percent in 2016. However, an estimated 61 percent of the companies reported in 2018 that they could not definitively confirm the source of the conflict minerals in their products, compared with 47 percent in 2017 and 55 percent in 2016. As in prior years, almost all of the companies that conducted due diligence reported that they could not determine whether the conflict minerals in their products had financed or benefited armed groups. Three companies in our generalizable sample determined that the minerals in at least some of their products had not financed or benefited armed groups in covered countries. None of these three companies declared their products “DRC conflict free,” which would trigger the requirement to file an independent private-sector audit report. However, one of the three companies did include one such audit report. Overall, SEC officials approximated that a total of 14 companies filed independent private-sector audit reports in 2018, compared with 16 in 2017 and 19 in 2016. Some Companies Noted That SEC Staff Guidance Regarding Due Diligence Reporting Requirements Had Caused Confusion, but Most Companies’ Filings Were Similar to Those Submitted in Each of the Prior 2 Years Some companies and industry representatives told us—as they did last year—that even though the revised guidance and other statements made by SEC staff had raised some uncertainty about the filing process, companies generally planned to continue to report conflict minerals disclosure information. As noted earlier, the SEC’s Division of Corporation Finance issued revised guidance in April 2017 indicating that it would not recommend enforcement action to the commission if companies did not report on specified due diligence disclosure requirements. Some companies and industry participants told us that the SEC staff’s revised guidance had caused confusion among some suppliers and stakeholders about reporting requirements, sometimes leading suppliers to be reluctant or slow to share information required by companies for their due diligence reporting. In addition, some companies had changed their approach to filing as a result of the guidance. Specifically, one company in our generalizable sample of SEC filings for 2018 cited the SEC staff’s revised guidance recommending no enforcement action as the reason for its decision not to report on due diligence efforts, despite noting it had determined there was reason to believe that minerals in its products may have come from covered countries. Another company we interviewed cited the same SEC staff guidance as one of the reasons the company chose not to file an independent private-sector audit. However, representatives of other companies we interviewed told us that, generally, their companies planned to continue to report conflict minerals disclosure information, including information from their due diligence efforts. In addition, as noted above, our review of a generalizable sample of SEC filings from 2018 found that the filings were similar in number and content to those filed in 2017. Some companies told us that they would continue to file, and even expand their due diligence, in response to the conflict minerals disclosure rule and other incentives for filing—such as consumer pressure and European Union reporting requirements scheduled to take effect in 2021. Furthermore, State reported they had begun to take actions related to the revised guidance. Specifically, State officials told us that they had conducted public outreach, such as attending industry events to remind stakeholders that the conflict minerals disclosure rule was still in effect, provide an overview of the rules and requirements, and answer questions. In addition, as of June 2019, the SEC’s long-term regulatory agenda included an item indicating that the SEC Division of Corporation Finance is considering recommendations for the commission to address the effect of litigation over the conflict minerals rule. According to SEC staff, these recommendations may affect the 2017 guidance pertaining to the conflict minerals rule. No New Information on Rates of Sexual Violence in Eastern DRC and Adjoining Countries Has Been Published; Case-File and Other Information on the DRC and Burundi Is Available We did not identify any new information on the rate of sexual violence in eastern DRC, Burundi, Rwanda, or Uganda since we last reported in June 2018; we did identify new case-file information and other information from UN reports for the DRC and Burundi. Since 2011, we have reported annually on rates of sexual violence derived from population-based surveys, as well as on case-file data as applicable, for eastern DRC (which consists of the provinces of Ituri, Maniema, North Kivu, and South Kivu) and three countries that adjoin that region: Burundi, Rwanda, and Uganda. See appendix III for population-based surveys containing sexual violence rates published since 2007. As explained in the sidebar, case-file information is unsuitable for estimating rates of sexual violence. international entities, law enforcement agencies, or medical service providers on sexual violence victims Data from population-based surveys provide a more appropriate basis for deriving a rate of sexual violence because such surveys are conducted using random sampling techniques and their results are generalizable to the target population from which a representative sample was surveyed. As we have previously reported, several factors make case-file information unsuitable for estimating rates of sexual violence. For example: Case-file data are not based on a random sample of a population, and therefore the results of analyzing these data are not generalizable. Case-file data are not aggregated across However, case-file data can provide indicators that sexual assaults are occurring in certain locations and can help service providers respond to the needs of victims. We did not identify any new population-based surveys providing rates of sexual violence in eastern DRC, Burundi, Rwanda, or Uganda published since our June 2018 report. The most recent information for eastern DRC and Rwanda dates from 2016, and for Burundi and Uganda, from 2018. New Case-File Information about Sexual Violence in the DRC and Burundi Is Available UN entities, State, USAID, and a USAID-funded program have produced additional case-file information reported in 2018 and 2019 about instances of sexual violence in the DRC and Burundi that occurred in 2017 and 2018. While State’s annual country report on human rights practices for Uganda noted that rape remained a common problem in the country in 2018, we did not identify new case-file information for the country, nor did we find new case-file information regarding Rwanda. Periodic Reporting of Case-File Information on Sexual Violence in the DRC and Adjoining Countries United Nations (UN) entities and the U.S. Department of State (State) report periodically on case-file information, while the U.S. Agency for International Development (USAID) periodically receives such information from an implementing partner, as follows: Rights Office in the Democratic Republic of the Congo reports annually on human rights violations in the Democratic Republic of the Congo (DRC), including sexual violence. Representative of the Secretary- General on Sexual Violence in Conflict reports annually on cases of conflict- related sexual violence in several countries, including the DRC, using information from the United Nations Stabilization Mission in the Democratic Republic of the Congo and the United Nations Population Fund, among others. reports containing case-file information from a 5-year program that began in 2017 to counter gender-based violence in parts of eastern DRC’s North and South Kivu provinces. UN entities, State, USAID, and a USAID-funded 5-year program located in North and South Kivu provinces have produced new case-file information pertaining to sexual violence in the DRC. UN entities reported the following case-file information pertaining to sexual violence in the DRC for calendar year 2018: United Nations Joint Human Rights Office in the Democratic Republic of the Congo (UNJHRO) confirmed and documented at least 939 sexual violence victims (657 women, 279 children, and three men). According to UNJHRO, this sexual violence was perpetrated by DRC armed forces and police in many instances. Specifically, Armed Forces of the Democratic Republic of the Congo (FARDC) soldiers were responsible for 218 of these victims, 195 of whom were located in conflict-affected provinces of the DRC. Members of the Congolese National Police were responsible for 100 victims of sexual violence, 60 of whom were in conflict-affected provinces of the DRC. United Nations Stabilization Mission in the Democratic Republic of the Congo (MONUSCO) documented and verified 1,049 cases of conflict-related sexual violence against 605 women, 436 girls, four men, and four boys. According to MONUSCO, 741 of those cases were perpetrated by combatants of nonstate armed groups and armed militiamen, with the remaining 308 perpetrated by FARDC soldiers and Congolese National Police. United Nations Population Fund (UNFPA) reported 32,342 incidents of sexual violence in conflict-affected provinces between January 2018 and September 2018. UN agencies also reported in 2018 that they had provided medical assistance to over 5,200 survivors of sexual violence, and MONUSCO reported that it had supported legal clinics that provided counseling and referrals to 2,243 civilian survivors of sexual violence for calendar year 2017. State noted two instances of armed groups in eastern DRC perpetrating sexual violence reported by UN entities in calendar years 2017 and 2018. Specifically, the Bana Mura, an armed group with ties to local government, kidnapped 66 people (64 of them children) in Kasai province and used them as sexual slaves, and members of Raia Mutomboki, a rebel armed group, perpetrated sexual violence, including gang rape, against at least 66 women and girls in South Kivu province. In 2018, USAID reported that it had provided medical, legal, and other services to 7,755 survivors of sexual and gender-based violence, and had also worked with local organizations to strengthen their ability to respond to and prevent such violence, during calendar year 2017. USAID also reported that it had collaborated with the Ministry of Education to develop a curriculum focused on preventing such violence, and had worked with gender-based violence monitoring committees in 618 schools. One of USAID’s implementing partners addresses sexual and gender-based violence as part of a 5-year program. This implementing partner reported reaching 3,135 victims of gender-based violence (including 2,559 adults and 576 children) in North and South Kivu provinces, providing those victims with health, legal, and psychosocial support services during fiscal year 2018. The implementing partner also reported providing services to 1,150 victims (including 953 adults and 197 children) during the first quarter of fiscal year 2019. New Information on Burundi State’s annual human rights report for 2018, as well as UNFPA, provided some case-file information on sexual violence in Burundi. State’s annual human rights report for 2018 noted that the government-operated Humura Center had recorded 627 cases of sexual and gender-based violence in Burundi, including domestic violence, from January 2018 to early September 2018. This organization provides survivors of sexual and domestic violence with legal, medical, and psychosocial services. UNFPA reported in 2018 that it had recorded 10,592 cases of gender- based violence in 2017 and noted that the Burundian government had decided to close the local UN Office of the High Commissioner for Human Rights in December 2018, reducing the access of survivors of sexual violence to legal services. UN Reports Some Steps Taken to Address Sexual Violence in the DRC and None Taken in Burundi UN entities noted that the government of the DRC had taken steps to address sexual violence in the DRC since 2013, but identified an increase in the number of incidents reported beginning in 2017. The reports also noted continued difficulties providing services to victims of sexual violence and combating a climate in which perpetrators act with impunity. According to the 2018 annual UN report on conflict-related sexual violence and UN officials we interviewed in 2019, the government of the DRC has continued to take steps to address sexual violence by, for example, holding awareness-raising campaigns and establishing a nationwide victim helpline. The UN Special Representative of the Secretary-General on Sexual Violence in Conflict cited other examples, including the prosecution of military and police officials, as well as leaders of nonstate armed groups, for conflict-related sexual violence. Specifically, the UN reported in 2018 that 59 members of the Congolese National Police and the FARDC were convicted of rape in 2017. Among those convicted was a FARDC colonel sentenced for failing to prevent subordinates from committing rape. The UN also noted that the DRC had successfully prosecuted a commander of the armed group Democratic Forces for the Liberation of Rwanda for sexual violence as a war crime, and a South Kivu provincial lawmaker and his militia for crimes against humanity for the abduction and rape of 39 children. In 2019, an armed group leader—and former FARDC colonel—was convicted of war crimes, including rape. As mentioned earlier, armed conflict and political upheaval within the DRC and particularly in eastern DRC have long created an environment of persistent human rights abuses, including sexual violence, according to UN reports. The UN reported this environment worsened during the lead- up to the presidential elections between 2016 and 2018. Case-file information the UN collected on sexual violence for 2017 and 2018 indicated an upward trend in incidents in the DRC, according to UN reports. A UN report cited an increase in documented cases of sexual violence, linking it to two factors: (1) nonstate armed groups’ use of sexual violence to enforce control over illicit exploitation of natural resources, such as gold, and (2) FARDC military operations responding to the activities of these nonstate armed groups. In addition to these recent developments, UN officials we interviewed cited longstanding difficulties such as a significant shortage of response services in the DRC; common instances of retaliation against survivors who reported abuse; and, as mentioned above, a climate in which perpetrators act with impunity. The UN Commission of Inquiry on Burundi did not identify any steps taken by the government of Burundi to address the country’s human rights issues, including sexual violence, in 2017 or 2018. The Commission of Inquiry—which, according to State, was denied access to the country by the government of Burundi but conducted interviews with more than 400 witnesses living in exile—reported that serious human rights violations, including acts of sexual violence, persisted in 2017 and 2018. For example, the commission reported that the National Intelligence Service, police, and the youth wing of the ruling political party used sexual violence to target supporters of the political opposition or their relatives. The commission also recommended that the government of Burundi establish investigative bodies to look into human rights violations and take measures to ensure that victims of sexual violence have access to appropriate care, including sexual health services and psychological support. Agency Comments We provided a draft of this report to the SEC, State, and USAID for comment. USAID provided written comments describing some of their related activities in the DRC, which we have reprinted in appendix IV. All three agencies provided technical comments, which we have incorporated as appropriate. We are sending copies of this report to appropriate congressional committees and to the Chairman of the Securities and Exchange Commission, the Secretary of State, and the Administrator of the U.S. Agency for International Development. The report is also available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-8612 or gianopoulosk@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology In this report, we (1) examine how companies responded to the U.S. Securities and Exchange Commission (SEC) conflict minerals disclosure rule when filing in 2018 and (2) provide recent information on the rate of sexual violence in eastern Democratic Republic of the Congo (DRC) and adjoining countries that was published in 2018 and early 2019. To address our first objective, we downloaded the specialized disclosure reports (Form SD) from the SEC’s publically available Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database in September 2018. We downloaded 1,117 Form SD filings and any associated conflict minerals reports included in EDGAR. Companies filed these Forms SD, along with related conflict minerals reports in some instances, to provide information in response to the SEC disclosure rule. To review the completeness and accuracy of the EDGAR database, we reviewed relevant documentation, interviewed knowledgeable SEC officials, and reviewed our prior reports on internal controls related to the SEC’s financial systems. We determined that the EDGAR database was sufficiently reliable for identifying the universe of Form SD filings. We reviewed the conflict minerals section of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the requirements of the SEC disclosure rule to develop a data collection instrument that guided our analysis of a generalizable sample of Forms SD and conflict minerals reports. Our data collection instrument was not a compliance review of the Forms SD and conflict minerals reports. The questions were written in both yes–no and multiple-choice formats. An analyst reviewed the Forms SD and conflict minerals reports and recorded responses to the data collection instrument for all of the companies in the sample. A second analyst also reviewed the Forms SD and conflict minerals reports and verified the responses recorded by the first analyst. Analysts met to discuss and resolve any discrepancies. We randomly sampled 100 Forms SD from a population of 1,117 to create estimates generalizable to the population of all companies that filed. We selected this sample size to achieve a margin of error of no more than plus or minus 10 percentage points or less at the 95-percent confidence level, which applies to all our estimates except where noted. Because we followed a probability procedure based on random selections, our sample is only one of a large number of samples that we might have drawn. Since each sample could have generated different estimates, we express our confidence in the precision of our particular sample’s results as a 95-percent confidence interval. This is the interval that would contain the actual population value for 95 percent of the samples we could have drawn. After using the data collection instrument to analyze the sample of filings submitted in 2018, we compared the resulting estimates with our estimates regarding filings submitted in prior years to determine whether there had been any statistically significant changes. We also attended an industry conference on conflict minerals and spoke with company representatives and industry representatives to gain additional context and perspectives. To address our second objective, we identified and assessed any information on sexual violence in eastern DRC and the three adjoining countries—Burundi, Rwanda, and Uganda—that had been published or otherwise had become available in 2018 and early 2019 and therefore would not have been included in our most recent report on the topic. We discussed the collection of sexual violence–related data in the DRC and adjoining countries, including population-based survey data and case-file data, with Department of State and U.S. Agency for International Development officials and with representatives of nongovernmental organizations and researchers. We also interviewed officials from the United Nations (UN) Children’s Fund, the UN Special Representative of the Secretary-General on Sexual Violence in Conflict, and the UN Statistics Division, and we obtained information from the UN Population Fund and UN Organization Stabilization Mission in the Democratic Republic of the Congo. In addition, we searched research databases, including MEDLINE and Scopus, to identify new academic articles containing any additional information on sexual violence published in 2018 and early 2019. Through these searches, we identified an initial list of 164 articles, which we then narrowed down to a priority list of studies by considering a variety of factors pertaining to the studies’ relevance to our second objective. These factors included (1) whether the study included rates, particularly related to the nation-wide rate of sexual violence in the DRC and region-wide rate in eastern DRC; (2) whether the study included case-file information; (3) whether the study contained data from 2011 or later; (4) whether the study focused on a subset of a broader population; (5) the geographic scope of the study; and (6) whether the study included original research. We reviewed the priority list of 16 articles and determined that none of them met our criteria for inclusion. We conducted this performance audit from September 2018 to September 2019 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Appendix II: Summary of the U.S. Securities and Exchange Commission’s Conflict Minerals Rule Disclosure Process The U.S. Securities and Exchange Commission (SEC) conflict minerals disclosure rule requires certain companies to file a specialized disclosure report (Form SD), if the company manufactures, or contracts to have manufactured, a product or products containing conflict minerals that are necessary to the functionality or the production of those products. The rule also requires each company, as applicable, to conduct a Reasonable County of Origin Inquiry to determine whether it knows, or has reason to believe, that its conflict minerals may have originated in the covered countries or that the conflict minerals may not be from scrap or recycled sources. If the company’s inquiry shows both conditions to be true of its conflict minerals, the company must exercise due diligence and provide a description of the measures it took to exercise due diligence in determining the source and chain of custody of the conflict minerals, the facilities used to process the conflict minerals, their country of origin, and of the efforts it made to determine the mine or location of origin with the greatest possible specificity. The Form SD provides general instructions for filing conflict minerals disclosures and specifies the information that companies must provide. Companies were required to file under the rule for the first time by June 2, 2014, and annually thereafter on May 31. Figure 3 shows the flowchart included in the SEC’s adopting release for the rule, which summarized the conflict minerals disclosure rule at the time it was adopted. Appendix III: Population-Based Surveys on Sexual Violence Rates Since 2007 Since 2011, we have reported on population-based surveys containing sexual violence rates in eastern Democratic Republic of the Congo (DRC) and three adjoining countries: Burundi, Rwanda, and Uganda. Figure 4 shows the publication dates for these surveys, starting with surveys published in 2007. Appendix IV: Comments from the U.S. Agency for International Development Appendix V: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the individual named above, Godwin Agbara (Assistant Director), Katherine Forsyth (Analyst-in-Charge), Debbie Chung, Justin Fisher, Jieun Chang, Christopher Keblitis, Grace Lui, Nisha Rai, John Villecco, and Timothy Young made key contributions to this report. Diana Blumenfeld, Julia Jebo Grant, Farahnaaz Khakoo-Mausel, and Michael McAtee provided additional assistance. Related GAO Products Conflict Minerals: Company Reports on Mineral Sources in 2017 Are Similar to Prior Years and New Data on Sexual Violence Are Available. GAO-18-457. Washington, D.C.: June 28, 2018. Conflict Minerals: Information on Artisanal Mined Gold and Efforts to Encourage Responsible Sourcing in the Democratic Republic of the Congo. GAO-17-733. Washington, D.C.: August 23, 2017. SEC Conflict Minerals Rule: 2017 Review of Company Disclosures in Response to the U.S. Securities and Exchange Commission Rule. GAO-17-517R. Washington, D.C.: April 26, 2017. Conflict Minerals: Insights from Company Disclosures and Agency Actions. GAO-17-544T. Washington, D.C.: April 5, 2017. SEC Conflict Minerals Rule: Companies Face Continuing Challenges in Determining Whether Their Conflict Minerals Benefit Armed Groups. GAO-16-805. Washington, D.C.: August 25, 2016. SEC Conflict Minerals Rule: Insights from Companies’ Initial Disclosures and State and USAID Actions in the Democratic Republic of the Congo Region. GAO-16-200T. Washington, D.C.: November 17, 2015. SEC Conflict Minerals Rule: Initial Disclosures Indicate Most Companies Were Unable to Determine the Source of Their Conflict Minerals. GAO-15-561. Washington, D.C.: August 18, 2015. Conflict Minerals: Stakeholder Options for Responsible Sourcing Are Expanding, but More Information on Smelters Is Needed. GAO-14-575. Washington, D.C.: June 26, 2014. SEC Conflict Minerals Rule: Information on Responsible Sourcing and Companies Affected. GAO-13-689. Washington D.C.: July 18, 2013. Conflict Minerals Disclosure Rule: SEC’s Actions and Stakeholder- Developed Initiatives. GAO-12-763. Washington, D.C.: July 16, 2012. The Democratic Republic of the Congo: Information on the Rate of Sexual Violence in War-Torn Eastern DRC and Adjoining Countries. GAO-11-702. Washington, D.C.: July 13, 2011. The Democratic Republic of the Congo: U.S. Agencies Should Take Further Actions to Contribute to the Effective Regulation and Control of the Minerals Trade in Eastern Democratic Republic of the Congo. GAO-10-1030. Washington, D.C.: September 30, 2010.