The U.S. Seventh Fleet consisted of about 160 ships during peak operations in Southeast Asia. Today the fleet consists of about 50 ships. In spite of this reduction, the Navy continues to maintain an extensive shore establishment to provide the reduced fleet logistics support. The fleet reduction has led to idle capacities and has increased costs at the ship repair facilities. Positive action has been taken, however, to reduce overhead costs as much as possible. But Navy officials believe the primary contributors to increased costs are worldwide inflation and a reduction in the value of the U.S. dollar. GAO believes these developments provide even more reasons why the Navy should review its ship maintenance practices to assure that key economical approaches have been considered. Department of Defense (DOD) officials stated that the primary justification for retaining the depot maintenance capacity is that it meets contingency requirements. Although the Navy had computed wartime requirements for these activities, their determinations were not current, nor were they systematically developed. Possible contingencies in the Pacific and Indian Ocean could include a worldwide war with the Soviets, a conflict in Korea, or a smaller brush fire conflict. According to the Congressional Budget Office, Navy forces currently deployed in the Pacific appear to exceed the requirements of either a conflict in Korea or the threat from the Soviet Pacific Fleet. GAO is concerned with the level of U.S. Navy forces because it is the primary factor in determining wartime ship maintenance requirements. The size of the Pacific Theater Navy deployment for these scenarios has been questioned. Since the definition of peacetime ship maintenance support requirements should include consideration of wartime deployment requirements, the level of ship maintenance resources also needs to be questioned. The Navy believes that its forces must be as self-sufficient as possible. However, the self-sufficiency concept can duplicate support activities, increase costs, and cause inadequate consideration of alternatives. The Navy has planned for an increase in activity and staffing at the Western Pacific ship repair activities during war. However, this increase in activity has not been systematically developed from a detailed analysis of the probable workload from modern war conditions.