By Geoff Fein
The Navy is taking a more aggressive approach to making sure it can afford the fleet of the future as well as ensuring current platforms reach their expected service lives, according to a top Navy official.
Senior Navy leadership is very serious about total ownership cost (TOC) and the culture of affordability, Rear Adm. Kathleen Dussault, director, supply ordnance and logistics operations division (OPNAV N41), told attendees yesterday at an American Society of Naval Engineers symposium in Arlington, Va.
Some of the primary challenges in trying to bring TOC down include lifecycle costs, which are set very early in the acquisition process, and the lifecycle costs of the next generation systems, Dussault said.
“We have to really embrace the culture of affordability,” she said. “Understanding and influencing cost drivers is essential.”
Military personnel, and operations and maintenance are the real bow waves of TOC, Dussault said. Those two cost drivers can account for upward of 70 to 80 percent of the total lifecycle cost of a program and they are sometimes skirted over, she added.
Dussault said efforts are being made to more closely keep an eye on TOC drivers in acquisition programs. For example, the Secretary of the Navy’s 5000.2E instructions were recently revised, she said.
The rewrite put in place the gate review process. “There are now over 10 gates that look at critical decisions that we make at each node and [it] provides an opportunity to determine whether we are looking at all of the current data [that impacts sustainability],” Dussault added.
Brain Persons, executive director Naval Sea Systems Command (NAVSEA) told the audience the question comes down to “how do you make TOC real?”
First, the Navy needs to declare that TOC is important. “We need to invest in it, train our people in it, and everyday we will live and breathe what TOC is,” he said.
At NAVSEA, for example, the Navy needs to integrate TOC into every employee’s job objectives, Persons added.
“You have to breakdown the barriers between the various stovepipes inside the organization,” he noted. “You can’t have an engineering organization that does only acquisition or only lifecycle management. You have to start to blend those two together.”
The same goes for program management, Persons added. “We tend to want to draw big bold lines between [them].”
The Navy also has to understand the support infrastructure too, he said.
“A lot of times we will make decisions about acquisition programs without understanding just what the infrastructure is that is going to be required to support it,” Persons added.
Among the initiatives NAVSEA is implementing are rewarding employees who bring great ideas forward, Persons said.
NAVSEA is also putting together what Persons called a “TOC manifesto.”
For fiscal year 2010, NAVSEA received funding from the Navy for nine efforts that will result in a total lifecycle cost savings/avoidance of $6.29 billion, Persons said.
Those efforts include:
- Electronic technical work document (eTWID) capability, which will save $3.9 billion;
- Main propulsion diesel engine training improvements, which will save $369.7 million;
- LSD 41/49 condition based maintenance support, which will save $146.7 million;
- Littoral Combat Ship water jet tunnel corrosion prevention, which will result in a savings of $58.8 million;
- Compressed air systems energy optimization, which will save $680.8 million; and
- Revising Virginia-class drawing, which will save $555.7 million.