The Secretary of the Navy and Chief of Naval Operations (CNO) told appropriators this week that the service is trying to build more margin in the Columbia-class ballistic missile submarine program and also provided Congress with updates on the future Large Surface Combatant (LSC).
Appropriators raised concerns about the Columbia program’s cost and schedule margin given a tight timeline, especially following a Government Accountability Office (GAO) report that said the submarine’s procurement cost was overly optimistic about labor hour assumptions (Defense Daily, April 8).
Navy officials continued to label the Columbia as the Navy’s top acquisition program.
Prompted by a question from House Appropriations Defense Subcommittee Ranking Member Ken Calvert (R-Calif.), Navy Secretary Richard Spencer said the service recognizes these issues and is going to meet with top officials from shipbuilders Huntington Ingalls Industries [HII] and General Dynamics’ [GD] Boat.
“We do have concern, I would be remiss if I didn’t say that. We’re sitting down with industry to look at the supply chain, to look at both primes that are involved, to ensure that we can manage the risk, that we can build in some margin where we can, that we can sweep risk on a continual basis,” Spencer told the subcommittee on Tuesday.
“If we do not do this in lockstep with industry, it will run off the rails, I guarantee you that. We are focused on this from the executive level on down,” he added.
Spencer underscored his perspective is to work with prime suppliers “in the most partnership manner that we can” which translates into “shared risks, shared responsibility, shared benefit. They are with us side by side on this program.”
On Wednesday, Spencer reiterated this point to the Senate Appropriations Defense Subcommittee. In response to a question from Sen. Jack Reed (D-R.I.) on if the Navy needs additional funds authorized in FY 2021, Spencer said “we’re set on our budget requirements as we need them right now, and authorities.”
Spencer repeated he is meeting with industry and said “in the next two weeks we are sitting down to do a finite drill-down of not only the program itself but the underlying supply chain that’s involved with both of those programs, to ensure that we do have a handle on this. And we are extracting margin when we can, and performance where we can.”
The secretary acknowledged the GAO report is correct, “we do not have a lot of margin, and this is right in front of us, right now. But we plan to manage this through appropriately.”
Reed asked if the National Sea-Based Deterrence Fund, which aims to help create efficiencies and effectiveness in the program, can help keep the submarine in schedule, if not to accelerate as originally intended.
Spencer admitted it is a “great tool that has allowed us flexibility to be where we are and we hope to use it to actually create some margins where we can.”
Reed also inquired why the Navy is requesting three Virginia-class attack submarines in the FY ’20 budget request, but only two will include the newer model Virginia Payload Module (VPM).
“Why go ahead to complicate an already complicated program by doing two steps forward and one step to the back, in a sense?”
CNO Adm. John Richardson said the submarine industrial base is “operating pretty close to its limits” so this is “a matter of making sure that the capacity is matching the program” so that translates into adding in the VPM one boat slower.
Reed commented that since the Virginia and Columbia-class submarines are linked at the hip through producers and the industrial base, he thinks leaving one new Virginia boat without the new VPM “adds more uncertainty not just to the Virginia program but also to the Columbia program, potentially. So I would leave that for their consideration.”
Separately, on Wednesday Sen. Susan Collins (R-Me.) asked why the Navy is moving forward with a new hull for the LSC by FY ’25, rather than requesting another multi-year contract for DDG-51 Flight IIIs, particularly given the challenges in lead ships and the past experience of the Zumwalt-class DDG-1000s.
“I do want to express some concerns about starting down the path to a new hull until the requirements have been thoroughly identified and validated and industry has had the opportunity to help the Navy determine what truly is achievable,” Collins said.
Spencer responded that “I think one of the things, and we’ve been talking about it, is the stability of the industrial base. I want to say that certainly does not mean the coffers of the Navy are wide open just for that purpose – we’re going to make sure were getting the best value for our dollar, but we must weigh the stability of the industrial base at all times, and its health.”
He pointed out an example of a new industrial cooperation process with the new guided-missile frigate, FFG(X), as an intermediate step where the Navy is looking at proven hull designs and is working with industry to find out what they have that can be adapted with minimal cycles of change. The frigate competition has five competitors and in April Spencer told the House Armed Services Committee he is “pretty confident” it will stay at the current estimated cost of $950 million for the initial vessel and about $800 million for each follow-on ship (Defense Daily, April 10).
“What we learn from that, I think, is also going to transition to the Large Surface Combatant and we’re going to do this on a budgeting manner that will take into account the health of the industry to make sure that we don’t find ourselves in a gapping mode,” Spencer said.
Richardson agreed, noting the Navy is acting differently with the LSC, similarly to how the Navy operated with both the FFG(X) and the MQ-25 unmanned carrier tanker aircraft requirements.
The service is working “to bring industry into the discussion of the requirements. So that we’re not coming off with something that will just be impossible to invent and then build and then integrate,” Richardson said.