What GAO Found The Naval Sea Systems Command (NAVSEA) builds and supports the Navy’s fleet. Using its SeaPort contract, NAVSEA spent about $21 billion over 6 years to acquire professional support services, such as systems engineering. Consistent with Department of Defense (DOD) guidance, NAVSEA generally uses the “best value tradeoff” process for awarding task orders for professional support services. Using this process means that the Navy might pay more if additional benefits justify the higher cost. To actively manage labor costs for professional support services, NAVSEA developed a system to track labor costs after it awards the task order, and established enhanced oversight when the actual labor rate exceeds 15 percent above the estimated rate for the task order, referred to as a “tripwire.” GAO found that more than a quarter (106 of 389) of ongoing task orders for fiscal years 2019 through 2024 triggered the tripwire review. Percentage of Ongoing Naval Sea Systems Command Task Orders That Met Tripwire Threshold, Fiscal Years 2019–2024 Across the 10 task orders that GAO reviewed in detail, actual labor costs increased by $152 million as of April 2025. This is about a 60 percent increase from their estimates at the time of award.…
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Navy Contracting: Sea Systems Command Actively Manages Labor Cost Increases for Professional Support Services
Source: US GAO Reports — US Government, Public Domain