COLORADO TORPEDO PROGRAM REALIZES COST SAVINGS

Since 06-07-05

Senders email: tmcs1959@yahoo.com

Message: COLORADO TORPEDO PROGRAM REALIZES COST SAVINGS -- (House of Representatives - May
26, 2005)

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The SPEAKER pro tempore. Under the Speaker's announced policy of January 4, 2005, the gentleman from Colorado (Mr. Beauprez) is recognized for 60 minutes.

Mr. BEAUPREZ. Mr. Speaker, I come to the floor tonight to speak to my colleagues and those watching these proceedings about something that is occurring in Colorado's
7th Congressional District which is directly benefiting the Department of the Navy and the U.S. taxpayer.

I am so honored to have met the great folks in Arvada, Colorado, my home State, who work for Barber-Nichols, Incorporated, and to hear their story about what they have been able to do so far for the Navy's Surface Ship Torpedo Defense, SSTD, program.

[Time: 18:00] This program uses a torpedo, or more particularly an anti-torpedo torpedo to protect our ships.

I know it sounds a bit off center, a landlocked State such as Colorado with such expertise in torpedo programs. In fact, Barber-Nichols possesses both advanced engineering and manufacturing prowess that are ideal for reducing the high cost of technology equipment such as the ATT, a very complicated weapon which has approximately 700 separate parts.

Barber-Nichols has used their expertise to help the Navy and the American taxpayer reduce the cost of the torpedo and provide tremendous cost savings in the program. To date, for every $1 we have spent on the ATT affordability program, the Navy has realized future production cost savings of $15. Barber-Nichols approached the Navy and their design agent, the Applied Research

[Page: H4135] GPO's PDF Laboratory, or ARL, at Penn State to discuss how to consider manufacturability and assemble ability concepts in the design today so that we can save money in the production tomorrow. As we have all witnessed, Mr. Speaker, developing and maintaining the best military in the world comes with a hefty price tag. In an extremely tight budget environment, it goes without saying that any program that can save money helps that service perform better.

With that said, let me tell you more about the ATT program and the affordability efforts that are ongoing in this program. The surface ship torpedo defense program and the anti-torpedo torpedo program were started by the United States Navy because our ships were, and remain, vulnerable to torpedo attack. Currently, there are several torpedoes available on the world market that we have little or no defense against. That is right, little to no defense against a torpedo attack.

The threat increases when we move our ships from the open ocean, where we can see for hundreds of miles, to coastal areas where threats can get closer to our ships and our reaction time is lessened. As we project our forces into the Third World areas, we operate in locations like the Persian Gulf where we are much more vulnerable.

Torpedoes can be bought on the black market by people and organizations who wish to do us harm. These torpedoes can be launched from the shoreline or small boats, threats that we were not too worried about until the USS Cole incident where 17 U.S. sailors made the ultimate sacrifice.

Because of this threat to our ships and sailors, Congress has weighed in heavily in support of torpedo defense, as was stated in a letter to the Secretary of the Navy back in 1997, signed by Chairman Duncan Hunter and other Members of this House, including Roscoe Bartlett, who is with us tonight, Bob Dornan, Duke Cunningham and Gene Taylor. I quote from their letter:

``We are especially concerned that our high-value ships that carry hundreds or even thousands of our young sailors and marines are very vulnerable to particular classes of torpedoes.''

Congress has also asked the Navy to study the vulnerability of our ships as evidenced in this quote:

``We therefore ask you to conduct an independent review of the SSTD program and provide us with your findings.'' That in a letter to the Under Secretary of the Navy , again from Congressman Hunter, Bartlett, Dornan and Cunningham.

And Congress has agreed with the independent studies that say we should move forward with torpedo defense as seen in this quote:

``I understand that the IDA study is completed and that the results strongly confirm that all ships need to be protected from torpedoes. I look forward to working with you to improve the capability of our ships to defend themselves against torpedo attack.'' That, in a letter to the Secretary of Defense from Chairman Duncan Hunter.

Congress since has provided multiple years of funding to allow the Navy to address the issue. The Navy agrees our sailors and high-value ships are worth protecting and that torpedo defense is an important capability to have.

Thus, the Navy has, first, teamed with our ally, Great Britain, to jointly develop elements of a surface ship torpedo defense system; secondly, made torpedo defense a requirement for new ship design efforts; third, identified the anti-torpedo torpedo as the solution for torpedo defense; and fourth, developed an anti-torpedo torpedo technology demonstrator that has included successful in-water testing.

In the FY 2006 budget, the Navy requested over $47 million for torpedo defense, so Congress is well aware of their interest in continuing this program into the future.

Mr. Speaker, I have talked a lot about the need and the desire to protect our ships and our sailors. I bet you would like to hear about how the Navy envisions the system will work. This chart to my left depicts the AN/WSQ-11, this surface ship torpedo defense system. In very simple terms, surface ship torpedo defense is accomplished by detecting a threat torpedo with a sensor towed behind the ship, launching the anti-torpedo torpedo against that threat, intercepting the threat torpedo with the ATT, and destroying it, obviously, before the threat can reach our ship.

Conceptually, it looks fairly simple. Practically, intercepting a torpedo under water is quite difficult. We have all seen the challenges played out in the newspapers regarding missile defense. This is essentially the same thing under water, albeit at far slower speeds. The good news is that the tests, to date, show that the technology works.

Mr. Speaker, we started this discussion tonight with an acknowledgment regarding the hefty price tag associated with developing and maintaining the best military in the world. However, as stewards of the public's money in this Chamber, we should be looking for ways to spend it wisely. The ATT affordability program is a prime example of fiscal responsibility in military spending.

The anti-torpedo torpedo affordability program was started to ensure we could afford the surface ship torpedo defense system when it goes to production. The ATT affordability program is very similar to the efforts commercial companies across our Nation practice on a daily basis.

Commercial product companies develop a new product with a final cost in mind. They eliminate features that are not cost effective, and they continually look for ways to reduce cost during that product design. Once the product is designed and developed, they work hard to manufacture the product in a cost-effective manner.

The important fact to realize is that 80 percent of the product cost is predetermined in the design process, not in the manufacturing process. Thus, addressing affordability must be done in that first design process.

In the ATT affordability program, my constituent Barber-Nichols, a commercial company again in Arvada, Colorado, is working with the Navy's design agent, ARL-Penn State, to simplify the product, reduce costs of manufacture and assembly and ensure affordability and cost reduction are considered in the design process.

Affordability is usually not addressed in government technology development programs until after a production program is awarded. Contractors can reduce cost with innovative manufacturing approaches, but the bulk of the potential cost savings will not ever be realized because they were not addressed in the product design. Incorporating commercial best practices like we have just discussed into government procurement practices could save us potentially a great deal of taxpayer money.

One aspect of affordability is design for manufacturability. In a simplistic way, this chart to my left depicts the major steps in the process. The way this is accomplished is that you first start with a baseline design, understand what each part of it costs to make, then look at the high-priced pieces to see if costs can be reduced. You then develop lower-cost alternative designs that are constructed and tested. If these alternative designs are successful, both technically and costwise, you can incorporate the alternative design into the baseline design.

This design for manufacturability method has been used on the anti-torpedo torpedo. First, a baseline design cost study was performed. From this study, the most expensive parts of the torpedo were found and it was determined that the engine was the most expensive subsystem of the product, as depicted in this new graph. This cost analysis helped in understanding what to focus

on first. Where is the biggest bang for the buck? From this analysis, the development moved into affordability projects.

One example of a high-priced component that was made into an ATT affordability project is the torpedo propulsor shown on this next chart. That is this machined part from the ATT depicted here. In the production quantities planned, the part was estimated to cost about $14,000 each. I have seen this part. It fits easily into the palm of my hand. Again, it was estimated initially to cost about $14,000 each.

The DFM process yielded a lower-cost design that was much easier to

[Page: H4136] GPO's PDF make. This low-cost design was manufactured and tested. The tests showed it performed as well as the expensive design. Thus, this low-cost design will now be incorporated into the government's baseline design. When this part goes into production, it will now cost a little over $2,000 each instead of the $14,000, resulting in production program savings of about 80 percent of the original cost estimate. Another example of an affordability project under way is the electronic card carrier set, one of which is shown here. The current design is a set of fully machined metal pieces that would cost approximately $4,000 a set if manufactured in production today as originally designed.

The low-cost alternative design uses die cast pieces with very little machining. If these are successfully fabricated and tested later this year, the Navy will achieve a very substantial cost savings with this part as well. The low-cost design is expected to cost approximately $200 per set and result is a cost savings of almost that full $4,000 of the original estimated cost, or about 95 percent.

In conclusion, Mr. Speaker, the ATT affordability program has been extremely successful and must stay the programmatic course in order to protect our sailors and ships when they are in harm's way. The projects completed in 2003 and 2004 are expected to save $31.2 million of taxpayer money when the ATT goes into production. More projects are planned in 2005 through 2007. We estimate the government will save $15 in production costs for every $1 spent in this affordability effort.

Developing and maintaining the best military in the world comes with a price. In an extremely tight budget environment, any program that can save money should be applauded and supported.

I congratulate Barber-Nichols, Inc., of Arvada, Colorado; ARL-Penn State, and certainly the Navy for their efforts with the ATT program and hope other such collaborative design projects will provide for our security, protect our troops and use taxpayer dollars as prudently as possible.