All Navy Programs ‘On the Table’
Although the Navy does not have the equivalent of a “Comanche”
on the horizon, all programs are under review in preparation for the fiscal
year 2006 budget submission, said the chief of naval operations.
The Navy is embarking on a new strategy that requires reassessing every program,
said Adm. Vernon Clark. A case in point is the current requirement for 55 attack
submarines. “That will be a major issue we are examining in the POM ‘06,”
Clark told reporters. The POM is the program objective memorandum that sets
priorities for the 2006-2011 budget.
The naval aviation requirement is likely to remain at 10 carrier air wings,
but there will be fewer airplanes in the fleet overall, and aviators will get
fewer flying hours in training. The message is that the Navy plans to get “more
utility” out of a smaller force, Clark said. “We are creating a
new Navy ... with more capability, but fewer people.”
As the Navy gears up to build new classes of surface combatants—the DDX
destroyer, the CGX cruiser and the Littoral Combat Ship—experts question
whether the service will have no choice but to downsize the aviation and the
submarine forces to pay for the new ships.
According to Clark, there are no fixed “shares” of resources within
the Navy for each warfare community. Decisions will be based on what the nation
needs, he said.
The carrier-based version of the Joint Strike Fighter is one program that remains
full of uncertainty. The Navy is pleased by the performance of the F/A-18 E/F
Super Hornet, and does not yet intend to commit procurement dollars to JSF,
said Clark. “I want the JSF capabilities,” he said. But he is not
yet ready to nail down a procurement plan until the development of the aircraft
is completed.
Cost of Littoral Combat Ship Questioned
With a month to go before the Navy selects a Littoral Combat Ship hull design,
questions remain about the potential cost of the program. Of specific concern
to lawmakers and budget experts is the cost of the mission equipment. The Navy
is requesting $352 million in 2005 for LCS development and initial procurement.
The mission modules are critical to the success of LCS. The initial phase of
the program focuses on three key mission profiles: anti-submarine warfare, mine
warfare and maritime interdiction operations. The mission modules are the sensors,
weapons and off-board platforms required to execute these missions.
Some experts estimate the modules could cost between $100 million and $180
million apiece. A Congressional Budget Office report from March 2003 stated
that the Navy would need to purchase 70 mission modules for the 56 planned LCS
hulls. An additional 14 modules (above the required 56) would cost about $2.5
billion in all, or about $50 million per LCS.
“These ships could cost well in excess of $500 million,” said Robert
O. Work, of the Center for Strategic and Budgetary Assessments. “The only
thing we know is one component: the sea frame.”
The Navy is asking for $2.76 billion during the next five years to develop
and procure modular mission packages for LCS and other ships. Service officials,
however, say that a number of factors prevent them from discussing the total
cost of the LCS modules. “It’s hard to define that piece right now,”
Rear Adm. Raymond Spicer, Navy deputy director for surface ships, said at a
Capitol Hill briefing on the LCS.
Spicer noted that the Navy has not decided yet the required number of mission
modules for the force. “That’s where the challenge lies,”
he said.
The CBO estimated that the full cost for the initial LCS—including hull
and modules—could be as high as $700 million. But that the succeeding
55 LCS would drop to an average of $350 million per ship.
The cost for the modules could drop if the Navy were to order additional packages,
said Spicer. Consolidating equipment also could drive down the cost. For example,
the anti-submarine and mine warfare mission modules may be able to share key
components, he said.
Under the current plan, the Navy expects that the mission modules could be
swapped ashore.
The Navy plans to build the first LCS in 2005 and another in 2006 before ramping
up production to three in 2008. Production will increase to four per year from
2009 to 2020. With the final three ships to be built in 2021, for a total fleet
size of 56.
Pentagon to Collect Unpaid Taxes
The Department of Defense is moving forward on several proposals to collect
unpaid federal taxes owed by more than 27,000 defense contractors, said Larry
J. Lanzillotta, principal deputy under secretary of defense (comptroller) and
deputy under secretary of defense for management reform.
Delinquent defense contractors listed in the Defense Department’s Central
Contractor Registration system owe nearly $3 billion in unpaid federal taxes
as of September 30, 2002, according to a General Accounting Office study.
Many of the companies owing back taxes still continue to be paid for contracts.
Although the government does have a mechanism for withholding a portion of a
contractor’s payment, it has, in many cases, failed to do so, according
to the report.
Testifying before the Senate Committee on Government Affairs, Lanzillotta said
the Pentagon would begin refining procedures for federal levies. “The
primary challenge is to better identify, through automation, those DoD contractors
whose payments should be offset because of their federal debts.”
The Pentagon’s central point of contact for executing levies is the Defense
Finance and Accounting Service. “This will enable a single office to handle
levies for all Defense Department commercial pay systems,” he said.
The Pentagon will also conduct more frequent Treasury Offset Program checks
and provide the information to the Financial Management Services more than once
a week.
In the long-term, the Pentagon is expanding its automated levy process to all
19 of its commercial pay systems. This effort should be completed by March 2005.