NAVY SHIPBUILDING

THE NUMBERS GAME

It could change when the next Quadrennial Defense Review comes out, but meantime the magic number most often quoted for desired Navy sizeis a 375-ship fleet by 2022. Accomplishing this would hinge on the projected retirement rates and building 207 ships. With a closer look at the numbers and budget figures, says Cebrowski "we find that 71 percent of the ship construction account is meant to buy only 41 percent of the fleet." And that's not the large decks, "that's destroyers and submarines, meant to be the close-in fighters of the fleet [that] are taking a disproportionate share of the force."

In contrast, an LCS program of 56 ships priced at $14 billion to $16 billion, in terms of number of ships, "buys 15 percent of the fleet at only 6 percent of the construction account," according to Cebrowski. And compared with other ships, the modular-based LCS "actually is going to be more capable than any of them, because LCS is based on growth."

In fact, it is starting to look as though the Navy may soon downsize its goal for the future fleet to a number somewhat below the magic 375.

Admiral Vern Clark, Chief of Naval Operations, in testmony before the Senate Armed Services Committee on Feb. 10, 2005, said that "just as the number of people is no longer the primary yardstick by which we measure the strength or productivity of an organization in an age of increasing capital-for-labor substitutions, the number of ships is no longer adequate to gauge the health or combat capability of the Navy. The capabilities posture of the Fleet is what is most important. In fact, your Navy can deliver much more combat power, more quickly now than we could 20 years ago when we had twice as many ships and half again as many people."

One of the techniques the Navy has been using to get more productivity out of its people--and its ships-—is crew rotation, or to use the Navy phrase "Sea Swap." What this boils down to, essentially, is that you don't bring the ship off mission and back to base simply to change crews. This will hardly seem a revolutionary or innovative concept

According to Clark's testimony, the Navy currently has 290 ships and the current projection for ships required to fully meet Global War on Terror is 375.

However, he also showed a projection that provides the same combat capability but fully leverages technological advances with maximum use of Sea Swap. This indicated that "transformational new technologies coupled with new manning concepts will enable us to attain the desired future combat capability with a force posture between 260 and 325 ships."

Turning to Shipbuilding Priorities, Clark told the Senators that the Navy seeks "a level-loaded shipbuilding investment stream" and needs to partner with Congress and industry "to regain our buying power."

"In no other area of our Armed Forces," noted Clark, "do we make such large capital investments that, in turn, impact important technological and industrial sectors of our economy. In making these investments, we would appreciate legislative relief with more flexible funding mechanisms to support shipbuilding—such as funding CVN21 and LHA(R) over two years—as we fight a global war while transforming to meet the demands of the changed strategic landscape."

"Among the greatest risks we face," said Clark, " is the spiraling cost of procurement for modern military systems, and shipbuilding is no exception."

"Shipbuilding cost increases have grown beyond our ability to control as compared to decades prior," he said. "As we seek greater combat capability and greater operational efficiencies through upgraded power, propulsion, and computing technologies, we find a ratio of cost growth beyond our seeming control, which may not be fully explainable solely by reduced economies of scale."

Clark said that while the FY06 budget request calls for four new construction ships, the investment plan across the future years' defense program (FYDP) calls for 49 new construction ships, including DD(X), LHA(R) Flight 0, MPF(F), CVN-21, and SSN 774s. The dip in the build rate to four ships in this budget year, he said, "is a reflection of a shift in focus to the next generation surface combatants and sea basing capabilities." ML