The December 2013 Pentagon Selected Acquisition Reports summary is now public, and budget pressures have taken their toll on a variety of defense programs, while the services seek to control costs on others. The SAR reports give an important peek at the Pentagon’s own insights into the performance of its programs. In this report, we take a look at how certain Navy programs have fared.
— The cost of the DDG-51 destroyer program jumped $2.8 billion, or about 3.1 percent, mostly due to an increase of three ships from 77 to 80 total. Considering the ship costs closer to $2 billion apiece, the Navy was able to get those destroyers on a big discount. Ultimately the three ships cost more than $5 billion once procurement and other costs were taken into account, but the multi-year procurement deal trimmed $942 million off the price tag, and sequestration and congressional reductions eliminated another $706 million. Read more DDG-51 analysis >>>
E-2D Advanced Hawkeye — The decision to delay 10 E-2D aircraft beyond the Future Years Defense Plan has had significant cost consequences for the program: the total price tag for the program jumped nearly 6 percent, or $1.2 billion, from $20.5 billion to $21.7 billion. The majority of that, $759.1 million, was due to the delay. However, there may be a major opportunity to drive some of that cost back out of the program, as the Navy and Northrop are close to an agreement on a multi-year deal for 25 aircraft over the next five years. The move would save the Navy an estimated $522.8 million. The SAR summary did not make any mention of the multi-year deal or say whether it factored into its estimates. Read more E-2D analysis >>>
G/ATOR — Fresh off of achieving Milestone C last month and moving toward low-rate initial production later this year, the G/ATOR program unfortunately has not been able to keep costs down — although the Pentagon says it’s mostly because of technicalities. Costs rose $504.1 million for the program, or nearly 21 percent, “due primarily to a revised estimating methodology for producibility enhanced initiatives.” The remaining cost increase came from revised estimates on testing and follow-on development and reliability growth. Read more G/ATOR analysis >>>
Littoral Combat Ship — So exactly how much will the Navy’s decision to cut 20 ships from the LCS program actually save the service? More than $11 billion, according to the Pentagon. Of course, a good chunk of that money may end up getting spent on whatever frigate-like vessel the Navy determines should replace those ships. In all, the move trims 33.4 percent of the total cost of the program, which was originally projected to cost the Navy $34 billion. Read more LCS analysis >>>
P-8A Poseidon — The Navy is not just shifting buys to the right for this aircraft: it will also cut eight from the program of record, dropping it from 117 to 109 aircraft. As a result, the program trimmed 5.4 percent in costs, or $1.87 billion. The reduction is due almost entirely to that reduction, as well as a change in methodology in estimating costs and adjustments to commercial pricing ($548 million). The savings easily dwarfed the penalties the Navy faces for delaying buys, which came out to an increase of $121.7 million. Read more P-8 analysis >>>
Tomahawk missile — The Pentagon’s move to close out the Tomahawk missile program has been met with more than its share of controversy, with the Heritage Foundation saying last month that the decision was “head-scratching” and leaves the service with capability gaps in critical areas. However, the Navy will save more than $1.8 billion by making the cut, which would be nearly 26 percent of the total cost of the program. Read more Tomahawk analysis >>>