We’ve been looking a bit at repair and maintenance costs. Here’s an interesting one. Huntington Ingalls Inc. has received a $6.7M contract for repair of the number two ship’s service turbine generator on USS Nimitz (CVN 68). Work is expected to be completed by October 2015.
That seems like a lot of money for repair work on a single generator! I wonder what the cost of a new one is?
You know, we talk about preserving the industrial base as a national strategic priority. I wonder if we shouldn’t really be trying to expand the industrial base rather than preserve it. Preservation at the current levels leads to a lack of competition which leads to higher prices. Maybe we should be encouraging smaller companies to enter the defense industry with the idea of expanding the supplier base and promoting more competition as they grow.
Of course, we aren’t going to produce another nuclear carrier construction company overnight but there are lots of small companies that operate around the fringes of the defense industry and only need some financial encouragement to expand. Over time, we could see several new companies grow into the defense industry. We issue far too many sole source, non-compete contracts to be comfortable with the current situation.