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May 14, 2009

Navy budget faces rough ride

The process of getting the Navy's FY2010 shipbuilding request through Congress has gotten underway. And early signs are that it is in for a rough ride. Not helping the Navy is a GAO report published yesterday entitled Best Practices: High Levels of Knowledge at Key Points Differentiate Commercial Shipbuilding from Navy Shipbuilding.

Essentially, GAO studied best practices at leading commercial shipbuilders worldwide and then assessed the extent to which Navy shipbuilding programs employ these practices. The short answer is that they don't.

You can access the GAO report HERE

Today, Rep. Ike Skelton, Chairman of the House Armed Services Committee, told Navy witnesses at a hearing on the FY 2010 budget request: "the Navy must, I repeat, must come to terms with the number of ships they need to construct, develop a reasonable plan to construct them, and then execute the plan. And this plan must be affordable. You must build your ships more efficiently."

The FY 2010 budget funds eight ships: the 12th Virginia class submarine, three Littoral Combat Ships (LCS), two T-AKE Dry Cargo and Ammunition Ships, a second Joint High Speed Vessel (JHSV) for the Navy, and an advanced Arleigh Burke Class Destroyer that will restart the DDG 51 program. The budget also funds the balance of LPD 26 and DDG 1002 construction, and provides third-year funding for CVN 78.

Testimony today from Defense Secretary Robert Gates and CNO Admiral Gary Roughead gave some insights into the thinking behind the numbers.

"We must examine our blue-water fleet and the overall strategy behind the kinds of ships we are buying," Secretary Gates told the Senate Armed Services Committee. "We cannot allow more ships to go the way of the DDG-1000: since its inception the projected buy has dwindled from 32 to three as costs per ship have more than doubled."

Secretary Gates said that the margin of dominance at sea provided by America's existing battle fleet "makes it possible and prudent to slow production of several shipbuilding programs."

According to Gates the budget will:

Shift the Navy Aircraft Carrier program to a five-year build cycle, placing it on a more fiscally sustainable path. This will result in a fleet of 10 carriers after 2040;

Delay the Navy CG-X next generation cruiser program to revisit both the requirements and acquisition strategy; and

Delay amphibious ship and sea-basing programs such as the 11th Landing Platform Dock (LPD) ship and the Mobile Landing Platform (MLP) ship to FY11 in order to assess costs and analyze the amount of these capabilities the nation needs.

The Department will continue to invest in areas where the need and capability are proven by:

Accelerating the buy of the Littoral Combat Ship, which, despite its development problems, is a versatile ship that can be produced in quantity and go to places that are either too shallow or too dangerous for the Navy's big, blue-water surface combatants;

Adding $200 million to fund conversion of six additional Aegis ships to provide ballistic missile defense capabilities;

Beginning the replacement program for the Ohio class ballistic missile submarine; and

Using FY10 funds to complete the third DDG-1000 Destroyer and build one DDG-51 Destroyer. The three DDG-1000 class ships will be built at Bath Iron Works in Maine and the DDG-51 Aegis Destroyer program will be restarted at Northrop Grumman's Ingalls shipyard in Mississippi.

HOUSE HEARING

In testimony before the House Armed Services Committee, CNO Admiral Gary Roughead provided another perspective on the shipbuilding budget request.

On the LCS program, for example, he said that fixed price, incentive fee contracts had been awarded for the third and fourth LCS ships and that "We are aggressively working to ensure LCS is a successful and affordable program." But later in his testimony he noted that while he was committed to procuring 55 LCS, "legislative relief may be required regarding the LCS cost-cap until manufacturing efficiencies can be achieved."

And while Secretary Gates simply said in his Senate testimony today that the aircraft carrier fleet would drop to 10 ships after 2030, the CNO, declared: "I remain committed to a carrier force of 11 for the next three decades." The other shoe dropped later in his testimony, when he again asked for "legislative relief."

"During the period between the planned 2012 inactivation of USS ENTERPRISE (CVN 65) and the 2015 delivery of GERALD R. FORD (CVN 78)," he said, "legislative relief is needed to temporarily reduce the operational carrier force to 10. Extending ENTERPRISE beyond 2012 involves significant technical risk, challenges manpower and the industrial base, and requires expenditures in excess of $2.8B with a minimal operational return on this significant investment. Extending ENTERPRISE would result in only a minor gain in carrier operational availability and adversely impact carrier maintenance periods and operational availability of the force in the future. The temporary reduction to 10 carriers can be mitigated by adjustments to deployments and maintenance availabilities."

Temporary can be a long time in Washington.

Dealing with the issue of the DDG 1000, the CNO said that "the world has changed significantly since we began the march to DDG 1000 in the early 1990's.",/p>

"Today, Combatant Commander demands are for Ballistic Missile Defense, Integrated Air and Missile Defense, and Anti-Submarine Warfare. To align our surface combatant investment strategy to meet these demands, we are truncating the DDG 1000 program at three ships and appropriately restarting the DDG 51 production line. The technologies resident in the DDG 51 provide extended range air defense now, and when coupled with open architecture initiatives, will best bridge the transition to the enhanced ballistic missile defense and integrated air and missile defense capability envisioned in the next generation cruiser."

Admiral Roughead said that research, development, test and evaluation efforts for the DDG 1000 program will continue, in order to deliver the necessary technology to complete the DDG 1000 class ships and support the CVN 78 Class.

On the SSBN program, he said that the 14 Ohio Class ballistic missile submarines, originally designed for a 30-year service life, would start retiring in 2027 after over 40 years of service life. The FY 2010 budget requests research and development funds for the Ohio Class Replacement, to enable the start of construction of the first ship in FY 2019.

"The United States will achieve significant program benefits by aligning our efforts with those of the United Kingdom's Vanguard SSBN replacement program." he said. "The U.S. and U.K. are finalizing a cost sharing agreement."

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