The Navy initiated its Fleet Response Plan (FRP) in March 2003 to meet the new demands of the 21st cent. security environ. FRP is intended to more rapidly prepare & then sustain readiness in ships & squadrons. This new readiness approach will enable its forces to provide engagement in forward areas, as well as surge a greater number of ships on short notice. This goal can be achieved without increasing its operations & maint. budget of $40 billion for each of the next 5 years. But, the Navy had not incorp. a mgmt. approach to guide & assess implementation of FRP, This report examines the extent to which the Navy has: made progress in implementing a sound mgmt. approach for FRP; & evaluated the long-term risks & tradeoffs of FRP-related changes.