PANAMA CITY, Fla. — The Navy’s numbers are sinking, and there is not much that the Obama administration or Congress can do in the near term to reverse the tide.
A fleet of 278 ships today — less than half of what it was two decades ago — is likely to continue to shrink unless the Navy can contain the soaring costs of building new ships, analysts have said. While Navy officials in recent years have acknowledged that they should do a better job overseeing shipbuilding programs, the service has yet to regain lost credibility on Capitol Hill and it could take years before troubled programs get back on course. That could spell doom for the Navy’s plan to expand the fleet to 313 ships within the next decade.
Budget experts repeatedly have dismissed the Navy’s long-term shipbuilding plans as unrealistic. The service claimed it would take about $15.6 billion per year to execute its shipbuilding plan, but the Congressional Budget Office told Congress that the Navy would actually need $21 billion annually — nearly double the $12.6 billion average the Navy has been spending each year since 2003.
The vast disparity between the Navy’s claims and those of outside experts has baffled analysts. It exemplifies the Navy’s “head in the sand” management approach, said Thomas Christie, former director of test and evaluation at the Defense Department and a military analyst at the Center for Defense Information.
Among the toughest problems that the Navy faces today are the cost overruns and schedule delays that threaten the DDG-1000 destroyer and the smaller Littoral Combat Ship (LCS). “These two classes of ships were to be the workhorse surface combatants designed to protect aircraft carriers, patrol sea-lanes and project U.S. power in areas around the world where a carrier might not be available,” Christie wrote in a CDI report titled “America’s Defense Meltdown.”
The Navy now expects to build a maximum of three DDG-1000s, compared to an initial projection of 32. Higher than estimated costs for the LCS now also call into question the Navy’s planned buy of 55 LCSs. The Navy originally estimated the first two lead ships would cost about $500 million each with subsequent ships costing approximately $220 million. CBO projected the first two LCSs could end up costing about $700 million each.
”Affordability is our greatest challenge,” said Art Divens, the Navy’s executive director for amphibious and auxiliary ships. “We’re not building enough ships to get the costs down,” he said at an industry conference. “We’ve gotten ourselves into a situation where ships are costing too much, so we’re buying fewer of them.”
Shipbuilders blame LCS cost increases on design changes that were required late in the engineering cycle. “Once you’ve started the fabrication, changes and sequence changes start to get expensive really quickly and cause a lot of problems,” said Michael Toner, who was executive vice president for marine systems at General Dynamics before he retired in December. General Dynamics is building the trimaran USS Independence, known as LCS 2. A monohull version made by Lockheed Martin Corp. — the USS Freedom, or LCS 1 — was commissioned in November.
The Navy needs to understand the implications of late design changes, shipbuilding officials said.
Having most of the design work finished before cutting steel reduces the number of hours and the cost that it takes to build a ship, said Mike Petters, corporate vice president and president of Northrop Grumman Shipbuilding.
On the Seawolf-class submarine, for example, only about 6 percent of the design was complete before construction began in the late 1980s, said Toner. About 68,000 changes were made on the ship as it went through the construction process. When the company later set out to build the Virginia-class submarine, its engineers had completed about 50 percent of the design before bending steel. That ship experienced 12,000 changes.
“This is a very complex problem,” said Rob Glasier, executive vice president at Houston-based Aveva, a supplier of software that is used to design ships. He believes that if the Navy had better design tools, it could make changes to its digital ship mockups without incurring major cost overruns. The Navy’s yards, he said, could benefit from modern software that gives engineers more flexibility and the ability to catch mistakes before the designs are completed and approved.
“If you wait for the design to finish, you’re never going to get anything done,” he told National Defense.
The design tools that most shipbuilders are using were created for a production process in which a ship first is designed and then is prototyped. They are not optimal for a process in which ships are partially designed before going into actual production, Glasier explained.
“There’s tension between how to make these ships as producible as we possibly can, and how to make them as capable as we possibly can. Those two things tend to push against each other,” said Petters. “If you make things as producible as you can, you have to lock things down as early as you can. If you want to make it as capable as you can, you have to lock it down as late as possible.”
The Navy also should increase the use of common parts and common hull forms to reduce developmental costs, said experts.
”That’s one way you can add stability — through commonality,” noted Petters. There are lots of opportunities for components to be common across multiple ships. For example, a deck edge elevator found on both aircraft carriers and amphibious assault ships, could be one and the same. But they currently are not built the same way, nor are they designed to be interchangeable.
“There’s no rocket science here. We know these lessons,” said Petters.
The design for a new amphibious command-and-control ship, for example, could be derived from an existing amphibious transport dock ship hull or a dry cargo/ammunition ship hull. Some shipbuilders support the use of commercial ship designs for vessels such as the amphibious command ship replacement, the joint high speed vessel and maritime prepositioning force ships.
But even before a design gets underway, the Navy and shipbuilders need to do a better job at price estimation, said Petters. The Navy often puts out one figure, and congressional watchdogs routinely say that the cost is billions of dollars higher.
“My view is, the difference between those two numbers is risk,” he said. “We ought to be talking about how do you go and identify that risk, how do you mitigate that risk by putting them into planning to take that risk out … I think we need to continue to work and find ways to articulate how we’re going to talk about risk.”
The Navy, meanwhile, would be wise to consider cutting or delaying ship programs until it can put its finances in order, said CBO in a recent report.
It suggests that the Navy may have to end the DDG-1000 destroyer program after the first two ships and delay the acquisition of the new CG(X) cruiser for 10 years.
The Navy also should study the possibility of purchasing just one version of the LCS, instead of two. It may also need to cancel the future maritime prepositioning ship and rely on the current fleet, as well as reduce the number of aircraft carriers in the fleet from 11 to 10 by deferring refueling overhauls of existing carriers. Other cost-saving measures would be to retain existing command ships rather than purchase new ones and cut the number of strategic submarines from 14 to 10.