Virginia class still 'disciplined program' |
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From The Naval Submarine League |
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By Robert A. Hamilton - New London Day Although the Navy has allocated $9.5 billion for building the
first four submarines of the Virginia class, the bill is now expected to
reach about $10.7 billion. Yet there has been no congressional outcry. Pentagon reports still laud the program - it was the only Navy
program singled out in a Department of Defense report on transforming
the military as examples of weapons systems designed for the 21st
century - and senior Navy officers continue to support the Virginia program as a
model for procurement. "This program has been described as the most disciplined
in the Pentagon, and we aim to keep it that way," said Adm. Frank
L. "Skip" Bowman, head of the Naval Reactors program. Bowman noted that the tentative schedule for filling the
reactor plant with water was December 2000; over more than five years,
there was less than two months
delay from that original plan, he said. "It is happening, and it is
on schedule." Rear Adm. John P. "Phil" Davis, who just finished a
tour as program executive officer for submarines at the Naval Sea
Systems Command (NOTE: This is erroneous. RADM Davis remains the PEO),
said about 50 percent of the drawings
of the Virginia class were done by the time construction started,
compared with 1.6 percent of drawings for the Ohio and 5.6 percent for
Seawolf. That means there are fewer expensive change orders required
once construction begins. In addition, Electric Boat in Groton, which designed the
submarine, has come up with a number of innovations that will make the
process more efficient. For instance, the combat control suite has been designed as a
module that can be tested electronically, then installed as a single
piece. In previous classes, the combat system was assembled in a room,
tested, then dismantled
and reassembled in a submarine, where it had to be re-tested to make
sure there were no problems. "This
combat system module is working now, three years before delivery,"
Davis said. "We're ready to go to two or three (Virginia-class
submarines) a year,or whatever the nation wants us to do." Rear
Adm.-select Paul Sullivan, who succeeded Davis as program executive
officer for submarines, (NOTE: This is erroneous. RDML(Sel)
Sullivan remains the Virginia Class Program Manager) said Virginia will
also be the easiest submarine to build, operate and eventually to
decommission, because for the first time engineers sat down with the
shipyard workers and sailors to discuss the design before it was
committed to the computerized drafting program. Previously
engineers came up with a design and gave it to the builders, and the operators had to live with the results. "We
learned in the past how inefficient that process was," Sullivan
said. "We said, 'Everyone is going to be at the same table the
same day on theVirginia,'... and the process really works." Why
such praise for a program that, on paper at least, is 12 percent over
budget? Backers of the Virginia class say the difference in what
the program has, and what it needs, is due in large part to factors that
were beyond the control of the submarine program office. Inflation The
largest piece driving the budget shortfall, about $600 million, was due to inflation. The Navy was only allowed to use a 2-percent
inflation estimate for the project, which it knew from the start was
going to be low, according to Bowman. In
fact, inflation has been higher even than what the Navy estimated. Due
to a good economy,shipyard payrolls have had to increase to match
wages in other sectors. Material
and equipment costs have also gone up much more rapidly than
expected because of the inefficiencies of low-rate production -
if you're only buying four reactors over five years, for instance, the
cost is considerably higher than buying two a year. Sullivan
said another problem is that many Seawolf suppliers quoted prices
for quieted, shock-hardened components that were based on the
expectation that 29 ships would be built. Instead,
the Navy cancelled the program after three. "We're
not going to get a price break on Virginia until we start building
more than one a year," Sullivan said. "The inflation
rate in this industry is killing us." He
estimated that in some areas inflation is running 7 percent a year. And
because it will be 12 years from the time the Navy orders the
first Virginia until it takes delivery of the fourth ship, that gives a long
time for those inflationary
pressures to increase. Other shortfalls Another big piece of the deficit is money that was taken
"off the top" of the Virginia program to cover shortfalls in
other Department of Defense programs, which amounted to about $339
million, Bowman said. Because
the last dollar for the Virginia program won't have to be put up
until 2008, he noted, there has been no hurry to put it back, but
he said he is confident that it will be restored. Sullivan
also said that some of the increases need to be put into historic
context. The cost of the design contract, for instance, made up
$1.45 billion of the original $9.5 billion estimate. That will be over
budget by about $188 million. "That's
the best we've ever done; Seawolf went over by 100 percent, for
various reasons," Sullivan said. "But it's a small
percentage of a big number, so it's still a big number." Another
change came in the way the Navy procurement system works.
Previously, many of the engineering services provided by the
Naval Sea Systems Command
did not come out of the submarine budget. Because
of an accounting change, those services are now billed to the
submarine program. There has been no change in the price to
taxpayers, Sullivan said,
just in the way the cost is allotted. But the result is, the
Virginia tab took a $155 million jump. There
have been several smaller increases as well. The
Navy learned from the Seawolf program that applying a new, quieter hull
coating is more difficult than expected. That raised the price by
about$65 million. Changes
in the ship design and in crew berthing requirements raised the
price another $26 million, or about one-third of 1 percent. "I think that number shows that when it came to new
requirements, we didn't go adding a lot," Sullivan said. Sullivan
also noted that there has been a lot of attention paid to overruns in the combat system on the Virginia. The
original contract called for the development to cost about $156 million,
and it went about $80 million over that, but it will be spread over an
estimated 30 ships. The Navy spent almost $1.5 billion developing the combat
control system on the Seawolf, and those costs will be amortized over
three ships. "Even
with the overrun, it's a tremendous increase in capability at a fraction
of the cost," Sullivan said. "Nobody is happy about a
shortfall of funds when you have to dig deep into your pockets to cover
it. But everyone seems to understand." The best in design Sullivan
said based on some rough numbers that came out of his office, if
the Navy were to restart production of the Los Angeles class -
the last one was completed in 1996 at a cost of more than $1.2 billion - it
might save 5 to 10 percent over the cost of building the Virginia class. "You'd
get a ship that doesn't even come close to how quiet the Virginia is, that can't match it for speed or capability," Sullivan
said. And, he said, there would be a very large one-time cost to
redesign the Los Angeles for modern technology. Sullivan
noted that he has been involved in the development of the Los
Angeles, Ohio, and Seawolf classes, before his experience with
Virginia. "I'd have to say this is by far the best in design and
construction," Sullivan said. "And the best way I know to
solve these problems is to put more ships in the budget. If we could get
out of low-rate production, a lot of these issues would work themselves
out." |