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I've read the GAO report all the way through and also the Air Force replies on 
the matter. I think this issue has been over-blown by the media. They're 
quoting the first page summary of the report, and like most GAO reports, it's 
intentionally dire.

For marine navigation, the potential reduction in active GPS satellites is not 
likely to be noticeable. Marine users have the best conditions for GPS signal 
acquisition. From a boat at sea, a GPS receiver can generally "see" the whole 
sky and reduced numbers of satellites will rarely matter (unless there is a 
major program delay, see below, which would not have a practical impact until 
about 2014).

The one market that may be adversely affected, sooner rather than later, is 
"urban canyon" navigation since those users benefit most from the excess 
satellite capacity which currently exists (far from being in trouble, the US 
GPS constellation currently has EXCESS capacity). These are the car 
navigation and mobile phone location services, for example, which are 
becoming dramatically more popular with each passing year. Since these 
services are already impaired in environments like this where GPS signals 
propagate poorly, if at all, this report will probably encourage more rapid 
adoption of alternative location services like SkyHook (that's the one based 
on triangulation of home and business Wi-Fi signals). The challenge is to 
make the hand-off between GPS and other services seamless and invisible to 
the end-user.

There are two issues raised in later sections of the GAO report which are 
serious and more relevant than the supposed increased risk in 2010. The first 
of these is the potential decline in service that could result if there is a 
serious delay in the launches of the next series of satellites, the GPS-III 
satellites. If they're delayed by two years, then there could be a serious 
disruption in the US GPS signals starting around 2014 and lasting for as long 
as seven years. Have a look at figures 4 and 5 in the GAO report. Although 
GAO reports are intentionally pessimistic, I believe that the low probability 
of having a full GPS constellation around 2017 is realistic. That is, it's 
realistic IF there is a significant delay in the GPS-III program. But note 
that the EU's Galileo system as well as the Russian GLONASS systems are 
expected to be fully operational in this period. So this isn't an issue for 
global navigation directly; it's an issue for US-pre-eminence in the 
satellite navigation business, and it's an issue for the US military which 
would be loath to rely on a non-US position-finding system. Beyond the 
specifics of the GAO report, the US Air Force claims that they already have 
procedures lined up which would extend the lives of existing satellites 
(mainly by powering down other military hardware on the satellites) and so 
even this supposed gap could potentially be covered.

The second significant problem outlined in the GAO report applies only to the 
US military. They haven't funded receivers to take advantage of the new 
satellites' capabilities. There are details in the report.

To sum up, the "sky is falling" media reports are misleading. The GPS system 
is not on the verge of failure in 2010. However, it is on the verge of 
disappointing, to some extent, the rapidly growing commercial market for its 
services in urban areas because the current excess capacity is considered 
temporary, and there are some significant issues for the US military. So 
unless there is some major collapse in the system unrelated to the issues in 
the GAO report, there do not appear to be any significant issues for marine 
navigation with the single exception that marine users may need to upgrade to 
systems capable of picking up signale from multiple satellite constellations 
(GPS, GLONASS, Galileo, Beidou/Compass) at a somewhat earlier date (c.2014) 
if the worst predictions in the GAO report are borne out.

-FER
PS: There are a couple of distinct reports on GPS from the GAO. The longer of them is linked here.
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