CNO Richardson: Budget Uncertainty Limits Ability to Project Shipbuilding Costs

By Vivienne Machi
The USS Detroit littoral combat ship conducts acceptance trials.

Photo: Navy

The U.S. Navy's highest-ranking official sidestepped queries about a recent study that projected eye-popping construction costs to build a fleet of 355 ships.

The Congressional Budget Office April 24 released a report estimating that, over the next 30 years, meeting the 355-ship objective would cost the Navy an average of more than $26 billion in 2017 dollars annually for ship construction, "more than 60 percent above the average amount the Congress has appropriated for that purpose over the past 30 years and 40 percent more than the amount appropriated for 2016."

The lack of stable funding in a time of strained defense budgets "takes a tremendous toll" on the service's ability to execute programs, Chief of Naval Operations Admiral John Richardson said April 27 at the Brookings Institution in Washington, D.C.

In order to properly assess any budgetary report, "it has got to be resource-based if it's going to be legitimate," Richardson said. He said he had not had a chance to analyze the study's numbers in detail.

The Navy last December released a force structure assessment that called for a fleet of 355 ships, significantly more than the service's current roster of 275 ships, and more than the previously announced shipbuilding program of record for 308 ships. CBO estimated that the earliest the Navy could achieve its goal would be in about 2035, provided the service received sufficient funding.

The Government Accountability Office recently released another shipbuilding report that recommended Congress delay the Navy's planned future frigate acquisitions until 2019 "until more information is known about the frigate's cost, design and capabilities." The service requested funding for a block buy of 12 frigates in fiscal year 2018, and plans to continue with that procurement despite the GAO's recommendations, according to the report.

Richardson said there is "almost a unanimous consensus that the future security environment is going to demand … a bigger Navy." But the service also needs funding to develop technologies that could allow it to harness data analysis, boost cybersecurity and modernize its missile arsenal, he noted. 

"We've got to innovate; it's absolutely essential that we do so, otherwise we will have an irrelevant Navy out there that will not be competitive in the future," he said.

The service has to modernize to ensure it is ready and capable of meeting the increased demands set by the "exponential nature" of global competition, data production and technology distribution, Richardson said. 

State actors including China and Russia have significantly boosted their naval investments over the past decade, and escalating tensions with North Korea and non-state actors, including the Islamic State, mean that the Navy needs to "capture a sense of urgency to maintain our place in the world," he added.

There has been a great discussion of late across the service and by lawmakers about what the future of the Navy might look like, but it has lacked "a strong U.S. Navy voice," Richardson said. The service plans to release an "article" in the next few weeks that would "describe our vision of the future," discussing the equivalent capabilities available for the 355-ship fleet, as well as what new technologies might be around the corner to allow the service to meet its readiness goals in a globally competitive environment.

The service is also working to speed up an acquisition process that currently "places very little value on outcome," and is "fundamentally not built on competition," he noted. 

"Today's environment demands that we compete in time, so within the Navy, we're trying to drive agility into that, [and] put together an accelerated acquisition program," he said, adding that "it just takes too long to do stuff."

"Why does it take us so long to design a ship these days? Why does it take us so long to build that ship once it's designed? … We're working very hard with industry right now to really do a full-court press on those assumptions and get things done faster," he said, noting that such a task requires "stable and predictable funding." 

Autonomous systems and artificial intelligence could help the Navy sift through data to gather more intelligence, Richardson added, saying that analytic power is "the new competitive space" to gain an advantage over global challengers.

"There is no shortage of… sensor data anymore, and there's really no shortage of payload options, kinetic and non-kinetic," he said. Artificial intelligence could help the service "make sense" of all the data and ultimately make operational decisions, he added.

Undersea warfare, missile defense, space systems and cyber technologies remain at the forefront of the Navy's technology needs, Richardson said, noting that the service was currently on "the wrong side of the cost curve" on missiles and maintains an undersea advantage that is "fleeting" as competitors ramp up their submarine fleets. 

Topics: DOD Budget, Maritime Security, Navy News

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