Tuesday, March 15, 2016

Ship Warranties - What's That?

ComNavOps has frequently documented the all too common occurrence of incomplete ships being delivered to, and accepted by, the Navy.  In addition, we’ve seen far too many examples of simply horrific levels of quality defects in the delivered ships.  The LPD-17 class was, probably, the poster child for manufacturing defects.

All of this is bad but even worse is that the Navy is paying to complete the ships and correct the defects.  If you buy a car you get a five year bumper to bumper warranty.  Shouldn’t we expect at least a minimal warranty on a ship?

The GAO looked at the cost of “warranty” work on Navy ships and had this to say (1),

“For five of the six Navy and Coast Guard ships GAO reviewed, guarantees did not help improve cost or quality outcomes. While the type and terms of each contract determine financial responsibility for correcting defects, the government, in most of the cases GAO examined, paid shipbuilders to repair defects. For the four ships with fixed-price incentive type contracts and guarantee clauses, the government paid the shipbuilder 89 percent of the cost—including profit—to correct these problems. This means the Navy and Coast Guard paid the shipbuilder to build the ship as part of the construction contract, and then paid the same shipbuilder again to repair the ship when defects were discovered after delivery—essentially rewarding the shipbuilder for delivering a ship that needed additional work.” [emphasis added]


We’re paying the shipbuilder twice!!!

Did you catch this part?  “…essentially rewarding the shipbuilder for delivering a ship that needed additional work …”  The shipbuilder has absolutely no incentive to deliver a complete and functioning ship – just the opposite, in fact.  Every defect or incompletion is an opportunity to get paid again!  This is beyond insane!

Aren’t warranties a standard part of shipbuilding contracts?  No, apparently not.

“Department of Defense guidance instruct[s] programs to, respectively, consider and document the use of a warranty, the use of warranties is not mandatory, and the Navy does not consider using them for ship contracts.”

You’re buying a multi-billion dollar product and you don’t want a warranty?  That seems insane especially given the recent slipshod performance history of shipbuilders.

The issue is even more basic than warranties.  The Navy is accepting incomplete and defective ships.  The shipbuilding contracts call for delivery of a complete ship and the various acceptance trials are supposed to ensure that happens.  But it’s not.  As GAO states,

“We found that some ship classes are routinely delivered with thousands of outstanding defects with the hull, mechanical, and electrical systems …”

A large part of the warranty issue can be bypassed by simply refusing to accept a ship until it’s actually completely built and trials prove that all the components work.  That has nothing to do with warranty – it’s just refusal to accept an incomplete product.  Failure to do so is gross negligence, incompetence, and a violation of the trust of the taxpayer. 

You might wonder what the magnitude of the warranty type issues is?  Obviously, the larger the ship, the more numerous and costly the warranty issues might be.  GAO offers this data point on the LCS warranty costs.

“For LCS 3 and LCS 4, the Navy spent $46 million and $77 million, respectively, under these post-delivery agreements to correct defects, complete ship construction, and assist with tests and trials, among other tasks.”

For a supposed $400M LCS shipbuilding contract (that figure is absolute garbage but we’ll use it for sake of this discussion) the warranty costs represent around 10%-20% of the original contract – that’s money being paid to do what was contracted to be done originally. 

None of us would do this in our personal lives.  We would consider it recklessly irresponsible and just plain stupid.  We’d find another supplier. 

The Navy doesn’t own the Navy, I the taxpayer do and I expect basic business principles, to say nothing of common sense, to be used in ship acquisition.  Every single Navy Admiral should be fired along with the entire NavSea leadership (NavSea is the organization responsible for the acceptance of incomplete and non-functional ships).


 ______________________ 

(1)Government Accounting Office, “Navy and Coast Guard Shipbuilding”, March 2016, GAO-16-71

30 comments:

  1. I suppose it really boils down to the monkeys accepting the ship after trials show faults.
    The types of contract offered, with/without warranty i assume will come down to a reported pricing (insert level of dishonesty here dependant on desperation to get a contract through). But, i dont think the type of contract is the heart of the issue. Coast Guard likely simply doesnt trust whoever the corrupt monkeys they've got doing their sea trials hence the warranty built into their contracts.
    The Navy apparently has more misplaced trust in its corrupt admirals that arbitrarily accept faulty ships as complete. The buck stops there.

    Having said that, i can only guess that theres some plausible reason why these sailors accept inferior products into the Navy, despite failing sea trials. its not like its hidden that they're accepted with faults.
    So, either, blatant obvious traceable corruption.
    Or, pressure from on high to accept ship x no matter what. In which case, still corruption but harder to trace.
    Or, desperation for hulls to accomplish missions that are un resourced so willing to accept anything. In which case, its a lack of judgement thats at fault.

    Not so cut and dried, still, horrendous waste.

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    1. I believe the answer is budget slice. The Navy is so desperate to maintain their budget slice of the pie that they simply want accepted hulls and as many as possible. Whether those hulls are useful or combat effective or even physically complete is irrelevant in their calculus. It's all about maintaining the budget slice.

      If problems were to crop up and be acknowledged, if ships were to be rejected, if shipbuilders were to be held accountable, Congress would begin to ask questions and the shipbuilding funds might be threatened. The current Navy leadership views its job as shipbuilding (which is the same thing as budget slice), not combat readiness. Anything that threatens shipbuilding must be eliminated or avoided. Hence, we accept incomplete ships and gladly pay twice to complete them. Hence, we build worthless ships like the LCS that contribute nothing to combat ops. Hence, we build bigger carriers even though our air wings are half the size and shrinking steadily.

      Take it for what it's worth.

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    2. Just as a refresher/reminder, the LPD-17 was delivered to the Navy with over a million man-hours of incomplete work!!!!

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  2. When I was reading the article, I was having a hard time understanding so thanks for breaking it down!!! It just seems really weird to me to accept such a big item without a warranty.

    Not that warranty means much, when I was in the Army, we got some brand new UH60s, they had like 20 hours on them (smelled just like the inside of a brand new car!) and we had to replace a couple of items which seemed really strange to me, found out that Sikorsky was ahead of schedule so was collecting a bonus from the US Army for being ahead of schedule but they didn't deliver them officially to the Army for 1 year to let the warranty expire...I got the info from the pilots!

    It would be interesting to know if these ship build issues were happening in the 70 and 80s also or if this is a more recent development? And why now? Is it corruption, just USN buying new hulls as fast as possible or the disappearance of knowledge inside the USN to catch the faults?

    One thing that really bugs me apart from the fact that we are paying an extra 10% to 20% for example on the LCS, is that I'm pretty sure none of the fan boys and trolls that support the LCS are going to ever want to ADD THAT TO THE FINAL PRICE TAG!!! It really should be added on there, same thing we are seeing with the F35, it's almost every week you can spot additional contracts for all kinds of things that just keep adding up and no one wants to admit that this stuff is PART OF THE PROGRAM!!!

    BTW, how come at this point in the LCS program, USN is still finding this many faults that need to be corrected?!?

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    1. "BTW, how come at this point in the LCS program, USN is still finding this many faults that need to be corrected?!?"

      As you just read, there is no incentive for the manufacturer to improve. In fact, the incentive is for the reverse. The worse the delivered product, the more money the manufacturer will make on fixes.

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  3. Let me explain something that most people don't understand about Gov't contracting, not just Navy contracting.

    The Gov't agency issues a contract. Often times it is issued without complete specifications, or without user input or without some other component it should have included for various reasons. The contract managers in the Gov't. aren't idiots. In fact they are quite intelligent. They know the deficiencies of their organizations, the quirks of their contracting rules, and the conflicts in the bureaucracy.

    They look at the conditions they are dealing with, in advance, and predict what will happen if a robust warranty clause is included in a contract and..... they conclude it won't work out well for them.

    Why you say ?

    Well let me explain.

    The contracting authority presses a warranty claim. The contractor then hauls out the volumes of changes, decision delays, unanswered RFIs, schedule disruptions etc etc etc caused by the Gov't during the project. In short it almost always becomes an embarrassment. (of course it does; on Friday night the gov't managers are doing whatever they do on their time off because it makes no difference to their income or reviews while the contractors project managers are in their offices running numbers and writing claims to compete for substantial salaries and bonuses)

    In short, the Gov't, in order to make a warranty claim must show that the defect was caused by a fault of execution and not by a fault of design or request.

    Well with the way gov't projects usually are executed that is a high barrier to cross ( it takes a near perfect Fosbury Flop)

    So the preemptive default is to not require robust warranties because they would almost never be enforceable. If a warranty is robust it is also almost never enforced for the same reasons.

    I would add that this phenomena is not some criminal oversight by gov't contact officers. We the people have approved this disfunction, by rubber stamping our Congress persons ability to bring home gov't contracts no matter how poor the contractors are.

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    1. You've missed three key points from the post.

      1. Acceptance - acceptance has nothing to do with warranties. The Navy conducts trials to verify that the ship meets the contract specs. Simple completion is the sum of the specs. If the ship isn't physically complete, it hasn't met its contract requirements. That's not warranty, that's contract completion. The Navy is failing to even insist that the contract be fully executed by the manufacturer.

      2. Warranty - we're not debating minutiae of complicated design considerations. The vast majority of the warranty issues are pretty blatant - equipment that simply doesn't work at all. Each piece of equipment has its own specs. If those specs are not met then it's a warranty issue.

      3. Reality - this blog is about the way things should be. I look at the way things are only to understand the scope and depth of the problems. If I simply accepted the way things are then there would never be any improvement, would there?

      Manufacturer's dispute warranties when they know they can. The auto industry went through this and over time had offer and honor fairly extensive warranties because customers sued them over and over and won. It became cheaper to build a better product and offer/honor the associated warranty than to try to fight losing battles. Competition also played a role as customers went with companies that offered better warranties. If the Navy would take legal action against the shipbuilders we would see better products and better warranties.

      If you were offering an explanation, that's fine. If you were attempting to defend the Navy's warranty position, shame on you!

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    2. Actually, he does have a point when it comes to warranties,

      You can't compare it to a car warranty. Or even one on your house.
      Ford, for example, designs and builds a new car, it then presents it to the market, as a complete package, you either buy it or leave it. Hence, Ford can offer you a warranty on the package they designed from the ground up and built in their own factory and then sold.

      Conversely, DOD will send in requests to design a new ship, over the 10 years of development, and build, initial requirements will have changed and been altered so many times, it's no where near the 'original ford F-150' that was on the original design board. It can be a nearly completely different design.

      I work in a project management firm, and , 10% of our staff at any time are busy on claims work. Requirements changes is the biggest get out of jail free card business's throw in each others faces. It was late, yes, you changed the specs, yes, you asked for more x, yes, you requested to add this, etc etc etc.

      Claims is always messy, and these are on 50-300 million dollar jobs.

      On a multi Billion dollar job, that has several different departments changing requirements all the time, i guess he's right, it'd never get through arbitration, and in court, Navy/DOD would never ever win, and if they did, it'd take 10 years. So, not worth it.


      Acceptance, thats the part i still dont understand.
      If what you're saying is right about maintaining the budget the NAVY gets, and that only happens by spending the money, OK, but, i dont see how accepting ships/boats that aren't finished goes to that. Surely, you can maintain budget spend, and still say, nope, didn't pass trials, x,y and z were all sh!t.

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    3. "Hence, Ford can offer you a warranty on the package they designed from the ground up and built in their own factory and then sold."

      The shipbuilder designs and builds the ship from the ground up in their own facility. The only complicating factor is concurrency and the associated design changes, however, those are paid as add-ons and the shipbuilder ought to assume the same warranty responsibility since it's the shipbuilder that will design in the requested change and build it. That a change was requested does not somehow negate a warranty.

      This also points out that the Navy's shipbuilding quality issues are not just related to a single reason. The Navy's ship acquisition policies fail for many reasons: missing warranty, concurrency, flawed acceptance, lack of oversight, lack of in-house expertise, loss of design control, contract structure, etc. All these things need to change in order to improve the overall process. Changing just one item won't help much.

      You're both missing how contract issuance and warranty work together. If a shipbuilder won't honor a warranty and fights every claim then the Navy should simply stop doing business with them and use a different shipbuilder that will honor their warranties. That's simple competition. Of course, the Navy has also painted themselves into a corner by gradually forcing shipbuilders out of business and reducing the number of builders and competition. The Navy needs to start building up lower tier shipbuilders into bigger builders. Companies like Bollinger and others can step up if given the chance. There are also good foreign shipbuilders available.

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    4. "There are also good foreign shipbuilders available."

      I'm always curious why we picked Austal for the LCS. Its a foreign yard. Based in the US, but foreign nonetheless. Why not go with another one with more experience?

      Also, as for the budget argument... why can't they keep the same budget by maintaining and upgrading the ships they have?

      In the historical stuff I've read about the Navy, it seems like BB's and CA's, etc. usually went in at some point for a long term dry-docking and modernization.

      We don't seem to do that anymore.

      One last thing... what makes the spec process so difficult? (Honest question, not being snarky).

      Other Navy's have things like ASW frigates. Other navy's have ships designed for Pacific operation.

      To be more like the model of a car from Ford, can't we just issue an RFP for a Pacific ASW frigate designed for blue water use, using current technology. Then let several shipyards come up with designs, build them, and then trial them for the Navy.

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    5. "I'm always curious why we picked Austal for the LCS."

      I don't know why they were picked. However, Austal was not without experience. They built high speed ferries and cruise ships of a similar design. They were not, however, warship builders. What we should have done, if we liked their design, was have them build one prototype, allow them to make mistakes and learn, wring out the design flaws, and then think about production. Instead, we took a novice warship builder and threw them into a situation they were not qualified for. No surprise that problems arose. This was the Navy's fault for mismanaging the program.

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    6. "You're both missing how contract issuance and warranty work together."

      With all due respect, since this is your blog space you so kindly maintain, please don't lecture me.

      I am not missing anything. I have lived the phenomena, been educated in its vagaries and made lots of $ for my employers by understanding it.

      The Navy is just another federal agency. It's total annual budget is about $700 billion, out of a 4 trillion fed budget. The ship building budget is less than $20 billion annually, all inclusive. That's 1/2 of 1% of federal expenditures.

      Much as some would like to imagine the Navy gets to manage that budget as it would like, it is not so. The Navy has to manage it much as every other gov't agency does with most of the same rules.

      Acceptance is affected by the same dynamics as warranties.

      Often times the gov't agency's administration runs far behind the projects demands. Change orders, clarifications, RFIs, not to mention actual contract modifications lag far behind or are improperly managed This occurs throughout the Fed gov't, it is not unique to the Navy.

      I'll give you an actual small example. The smallest and (should have been) the simplest gov't job I was ever involved with. It just happened to be for the US Navy. It was essentially a car wash. It was bid at @ $130,000. By the time it finished it was near $200,000.

      The plans and specs were issued incomplete, and at an arbitrary time. After the award the administration was awkward and inefficient.
      A valve was needed early in the job. It was GFE. Bought by the GSA. They had run out of them. A whole nother contract had to be issued for the valves. When it finally arrived it was months late. In the mean time I had suggested to the Navy's project manager that they issue a C.O. for the valve. His reply was he was 2 months from getting out of the Navy, that was not normal procedure and he was not going to risk a demerit. Contractor cost of the valve: $350. Final cost to the project: probably @ $10,000.

      Then the project followed the typical pattern. The administrators blamed the contractor while practically rubber stamping change orders to fix the problems. We (the contractor) laid down like and acted like whipped dogs while they shoved gold bones in our mouths.

      We bid the job not knowing if we would make any profit, just to keep some people busy at a slow time. We made near 30%. This is how many Fed govt projects go. They are bid at little profit and the margins are beat into the change orders.

      It's not uncommon to have a manager or administrator on a fed project who has built up vacay time leave for weeks at a critical time and everything sits frozen on his /her desk.

      I once worked on a USPS processing facility job. The USPS operates as independently as any gov't agency. But yet it still has to follow many of the same procedures. The project manager was hard ass. He beat the hell out of us on change orders. He even shoved the cost of an unforeseen condition down the architects throat, to the tune of 25% of the design fee. It was an "accelerated" project. Meaning it was needed now. 6 weeks before it was to open, when it was nearly done the USPS users walked in,

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    7. made an inspection and produced a list of all the stuff missing that was needed to run the equipment. (one of these pieces of equipment the USPS had been running in every processing facility since the 1940s. It was the size of a house. A really, really big Trump size house.) Suddenly every C.O. we submitted was approved, no questions asked. By the end I was throwing stuff in just to see if it would pass. They never talked to us again until the punchlist, they just sent out modifications The USPS managers had insisted that every one of the 5+ miles of conduit & pipe etc hanging from the structure and every square inch of steel framing was painted all the way around with 3 coats of industrial enamel. Suddenly bare pipe and conduit was great. They had sat in a meeting and argued with our fire protection contractor, moderated by us for 2 hours about requirements for sprinkler heads in a 30 foot corridor. But then it didn't matter. Wherever the sprinkler guy said a head had to be added they paid, whatever he submitted.

      As I've illustrated above, this is what happens during
      "acceptance":

      It gets to a point where the gov't (Navy) managers know they have to take it or if they don't the contractor will claim extended overhead. Sometimes demand pressure is such that they can just drag it along and issue C.O.s until its done (The carwash; in that case the only person riding it was a USMC Master Sgt who needed it to comply with motor pool requirements), sometimes they throw money at and hope it doesn't hit the fan (the USPS facility), but most of the time it goes like most ships: at some point they have to take it or risk eating claims for overhead in which case they just turn what would have been change orders into maintenance contracts.(probably at less cost , since there are no lawyer fees)

      Let me illustrate how this works in a way at applies to Navy ships as well as other gov't projects in regards to acceptance.

      The project is designed with an initial electrical load, specified by the user. During the build things are added to the load here and there. Eventually the contractor submits a C.O. for a bigger generator. The gov't administrators refuse it (who knows why) never respond, or most likely never approve it in time to be built in as required by the schedule. The project gets built with the original generator. It fails multiple times in use, until someone in gov't can slide it in to the maintenance budget.

      That's how it works, and it will not change until we the tax payers hold our congress persons accountable for results rather than how much money they land in their districts or what "political platform" they salute.

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    8. Well....

      that was depressing. I'm in IT. I do (albeit) much smaller projects. Everything you just described is a nightmare scenario for me. Even just one of them.

      I don't think that my industry is very efficient in particular. Its healthcare IT, so we do have some people pretty heavily motivated by patient care, so lots of people work extra hours to test etc. to make sure we don't accidently kill someone, but we have our own share of inefficiency in implementation.

      But what you just described makes us look like the freakin Blue Angels.

      It sounds almost like what you'd here from the old Soviet Union when they'd plan their economy.

      The biggest problem I see for resolution is just the money that is brought in. Bringing in efficiency, like for the post office project, runs the risk of cancelling projects badly out of control. The CongressCritters will never want to do that. The USPS office you worked on was in *someone's* district. And all the extra work were 'jobs' created there.

      *sigh*.

      But still... why is it so hard to start out with the basics in getting the requirements right? WE can't always have been this way. If it was, it would have taken us multiple decades to get Gemini off the ground, let alone Apollo.

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    9. "I have lived the phenomena, been educated in its vagaries and made lots of $ for my employers by understanding it."

      OK, I read your comment (longer than my post!) and I have no idea what you're arguing for or against, if anything. Are you arguing for status quo? Something else? Care to try again?

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    10. "...I have no idea what you're arguing for or against, if anything."

      I conclude my post with my argument: "..... it will not change until we the tax payers hold our congress persons accountable for results rather than how much money they land in their districts or what "political platform" they salute."

      Your entire post is about how the Navy could somehow simply fix all the quality problems in ship construction by itself through some simple acts.

      You miss that this is not a problem that originates in the Navy, it is a general problem of the US Gov't which derives from the essential structure of the Gov't and its relationship to its constituents. The Navy can't by itself on just 1/2 of 1% of the fed govt budget change the way govt contracts.


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    11. "I conclude my post with my argument: "..... it will not change until we the tax payers hold our congress persons accountable for results rather than how much money they land in their districts or what "political platform" they salute."

      Your entire post is about how the Navy could somehow simply fix all the quality problems in ship construction by itself through some simple acts."

      I could not agree more with your first statement.

      As far as your second statement, good grief, where did I say that all the shipbuilding problems can be magically fixed with a few simple acts? I didn't! Please discuss what I write not what you think I write.

      I do two things with my posts: I point out problems (acceptance of incomplete ships and lack of warranties, for example) and, two, I offer partial solutions. Some solutions would have more impact than others - none are a complete, magic, one step, total solution.

      What I said, stands, and stands well. If the Navy would insist on actual physical completion of a ship before acceptance, it would go a long way towards improving quality. That has nothing to do with warranties or contract structure. It's simple insistence on fulfillment of the contract. If the Navy would insist on warranties (make it part of the RFP) and begin not using shipyards that won't offer and honor warranties, it would also help improve shipbuilding quality. There is nothing in any government guidelines or standards that prohibits warranties. There are many other factors that need to be addressed to implement a complete, total solution. This is a blog - I've got a few paragraphs to make my points. I'm not writing a book on naval procurement reform.

      Nothing you're saying contradicts or invalidates my post points. You seem to be amplifying and expanding on my points. That's great.

      You seem to want to make an argument where none exists.

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    12. "If the Navy would insist on actual physical completion of a ship before acceptance, it would go a long way towards improving quality. That has nothing to do with warranties or contract structure."

      Of course it does. If the Navy has delayed aspects of a ship by changes or failure to properly manage administrative decisions or procedures to where it impacts completion, then it refuses to accept the ship, then the ship sits in the shipyard until it is fixed, that means the shipyard loses the income from the next ship that can fill the space. That loss of income will be recovered either through claims or by increasing the initial price to cover the projected loss. There are no free rides, the more you burden the contractors the more their prices will increase. If they have to warranty ships that have been poorly coordinated because the gov't couldn't administer the contract in a timely fashion then that will be seen as a risk and it will be priced. If it is too risky they may not bid at all.

      The first step is not to "insist on actual physical completion of a ship before acceptance" the first step is to improve the dissfunction that puts contract administrators in the difficult position of either accepting an incomplete ship or paying for all the administrative screw ups that happen all along the way, most likely in court.

      "It's simple insistence on fulfillment of the contract"

      Again the idea that such a thing is just a "simple" fix.

      There is no "simple" insistence on fulfilling a contract that is so poorly and/or extensively modified or administered that its enforceability is suspect. In some cases they are so incoherently modified that its not even clear what the contractor is actually responsible for.

      In the example of the car wash I gave, what do you think would have happened if the Navy had insisted that we "fulfill the contract" The answer is 1) lawsuit 2) we never bid again 3) a useless car wash because the original contract was impossible to fulfill.


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    13. I'm still not sure what you're arguing for or against. You seem to want to disagree with me just for the sake of disagreeing. Alternatively, you seem to be arguing for status quo of a badly broken system.

      You seem to be suggesting that asking a complete product be delivered is somehow "burdening the contractor". That's absurd! The shipbuilder signed a contract to deliver a complete and functional ship. It's not a burden to insist that the shipbuilder comply with the contract they freely signed.

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    14. You don't seem to understand gov't contracting or contracting at a basic level.

      "The shipbuilder signed a contract to deliver a complete and functional ship."

      No he didn't. He signed a contract to meet a set of specifications and requirements. Those specs and requirements could equal a complete and functional ship or it might not. Furthermore, usually, even before the contract is executed the buyer has already planned modifications to the contract. The contract usually prohibits the contractor from refusing to execute those modifications. They can be disputed, their price can be negotiated, etc. But if the gov't modifies the contract such that part A will never work with part B, then the contractor has to build the ship that way. Furthermore contractors are not stupid, they are very aware of what could be a liability, they frequently inform the contracting authority of potential problems and suggest fixes. It is not uncommon for their suggestions to be rejected.

      This for example was apparently the root cause of LCS-2 corrosion around its water jets. Austal with its years of experience in aluminum ship construction suggested galvanic protection be added, (which was not part of the original specs, since the Navy has little experience in aluminum ships and waterjets) their suggestion was rejected with the Navy basically saying "we'll see" Corrosion happened, the Navy paid to fix it. Why?: BECAUSE THE CONTRACT DID NOT SPECIFY AND PAY FOR THE COMPONENTS TO MAKE A "complete and functional ship"

      I'm not her to argue with you, I'm commenting on this because you represent a common but distorted view of how the system works and how to fix it.

      If you and others choose not to listen then we will just continue to see contractors make piles of money on gov't screw ups.

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  4. *sigh*. Wow. The last few posts have caused me to almost want to throw in the towel and just defund the military.

    We're spending Bentley money to get half completed K-cars (LCS) or Tesla's (Zumwalt) that no one is really sure will work.

    On top of that... the build quality stinks?

    The post that mentioned that a good chunk of this is due to change orders, etc. does have some validity to my understanding. The Japanese always limited options packages in order to increase quality in their factories early on, and it worked quite well. And it does stand into contrast with how (I understand) things like the Sherman got built. Get a design that's good enough, and then run with it. Changes are minimal.

    Maybe we don't have to go to quite that extreme, but the idea that we are 15 years into the LCS program and *still* getting build defects is atrocious.

    The idea that the military accepts this, and may accept it because A) They just want to keep their budget slice and B) they can't settle down on what they want in the first place, so keep changing things, is a disaster *and* a national security issue.

    Hell, the DDG 51 line that got restarted is fine... as far as it goes... but do these have build defects? I'd like to know now. And it just seems like such a failure. 'We can't figure out *what* to do with the future, nor execute any kind of design. So we are going to punt and go back to the 80's...'

    So... let me sum this up. In the future the Navy is going to have:

    * LSC, a platform with no working mission modules and for which we are still developing a mission. But its in serial production, but we are still seeing significant build issues.

    * Ford.... I can't even go there. 13 billion that from an operational perspective might as well have gone down a black hole.

    * F-35. The plan that might (MIGHT) just get to the fleet, and be able to fire *some* weapons, in another 4-5 years or so. After more than a decade of development.

    * 3 DDG 1000's that were truncated in design and build. Lots of electrical power. What role do they fill?

    * tons of old DDG 51's in varying states of upgrade and repair.

    * a bunch of SuperHornets that have had their wings flown off, but for which replacements have been choked off due to political pressure by the F-35.

    * Viriginia class. Far and away the most successful compared to the above acquisition programs. But how would it compare to a fully run out SSN-21 class?

    * V-22... a program that is showing tons issues, while in production. Oh, and its going to be our new carrier logistics craft.

    And the Admirals are doing... what?

    As a taxpayer... what are we getting for this $$$?

    I read everywhere 'Budget pressures will continue to mount on the Navy...'. Here's a thought. STOP THROWING AWAY MONEY.

    With this track record, for the Navy to continue to ask for money is like a drug addicted relative asking for a loan.

    And this doesn't even touch on the Air Force, Marines, or Army.

    Sorry if this is too acerbic.

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    1. I am as strong a supporter of the Navy and defense as there is but I am also death on stupidity and waste. Navy leadership needs to be fired, top to bottom, and start over. Will that happen? Of course not but I am not going to stop pointing out the stupidity in Navy leadership. Only by doing so can there be any hope whatsoever of change. To quietly accept the magnitude of stupidity being display by Navy leaders is to condone it and I will not do that. It's my country and my tax dollars that they're endangering and wasting.

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  5. I hope you don't think I'm suggesting we quietly accept this?

    You're right. The light has to keep being shined on the issues.

    Its not going to be easy though. This sort of thing started a long time ago:

    from:
    https://en.wikipedia.org/wiki/Hyman_G._Rickover#Forced_retirement

    "In the early 1980s, structural welding flaws — whose nature and existence had been covered up by falsified inspection records — led to significant delays and expenses in the delivery of several submarines being built at the General Dynamics Electric Boat Division shipyard. In some cases, the repairs resulted in practically dismantling and then rebuilding what had been a nearly completed submarine. The yard tried to pass the vast cost overruns directly on to the Navy, while Rickover fought Electric Boat's general manager P. Takis Veliotis tooth and nail at every possible turn, demanding that the yard make good on its shoddy workmanship."

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  6. The taxpayers bear the risks in this scenario and the corporations all of the rewards.

    It is a rather perverse incentive. The incentive is to deliver a ship that requires further work, as there are no penalties and lots of potential for more work.

    I think that the reason is corruption. Crony capitalism. The other is that there isn't the level of competition that we see in most civilian industries.

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    1. "The other is that there isn't the level of competition that we see in most civilian industries."

      I think this is key. By building ever fewer ships and performing less maintenance and fewer upgrades, the Navy has slowly reduced the number of viable shipyards in the US. They've created a situation where they have nowhere else to turn (no competition). We need to begin building up some of the lower tier shipyards and begin using foreign shipyards to create competition.

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    2. There has to be a mulit level approach.

      The Admirals need moving on. And while we are at it, we need to look at why we have more admirals now.

      WE do need something like BuShips. But, we also need some guidelines that prevent things like the LCS from going into production. Expirimental ships are fine. Making a class of them is idiocy.

      People need to take more responsibility for their Congresscritters. Senator Smith may be one hell of a guy bringing home the bacon; but if that bacon means that he's encouraging the above behavior, he has to be called on it and it has to be made an election issue. (This is the hardest thing, as it requires a change in the electorate behavior).

      Navy culture needs to be changed. They don't act as stewards of the equipment we give them. They need to come up with an overall mission, then designs that slot into that mission. I never want to hear again how 'we need to get this ship into the fleet to find out how the captains use it'.

      The Marines just let their F-18's rot. The Navy the Avengers. And with INSURV classified who knows what the overall state of the 'Burkes are.

      Concurrency should be made illegal.

      The guys who write supplier contracts for Toyota or Ford should be part of the teams writing the contracts for new ships for the Navy.

      Bottomless trough contracts are insane.

      Contractors should be given some protection from change orders.

      And yes, we should start either making government shipyards, or developing new commercial ship yards.

      The mergers and contraction of the defense industry is killing us.


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    3. So, what do you want to do AFTER lunch? :)

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    4. Well, there's still the Army, Air Force... but that's beyond the scope of this blog... ;-)

      To be honest, my view is pretty grim. Change requires pain to those that are benefiting right now. Those with the power to change things, Congress and the Admirals, don't have any incentive to change the status quo.

      Its my opinion Congress *likes* the F-35 the way it is, with all of its production spread through the lower 48.

      Sure, its inefficient. Sure, it takes a long time. But come election day its a feather in their cap. 'I'm improving defense by not only supporting the Whiz Bang X-wing-35, but also by bringing some of its high tech jobs TO YOU MY VOTERS!'

      They could rein in the Admirals. But the Admirals are just helping to keep the money troughs going, and provide them some cover.

      I forget which debate now, but it was in a previous election. The statement was 'Well, the Admirals haven't told me anything is wrong... I take advice from them...'.

      I can't see any Admiral saying to Congress or the President 'This program stinks and is way over priced and too inefficient. Mr. President, you have to make more room in the budget for a follow on replacement. Mr. Congressman, we have to cancel this, and that means the factory in your district will close.'.

      The transformationalists are in there as well. But I generally give them more of a benefit of the doubt as to their intentions. I just thing them wrong headed.

      In short, its a positive feedback loop.

      The only thing we can do is what you, and folks like CDR Salamander are doing.

      Maybe, over time, it will make a difference.

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  7. I have put penalty clauses in DoD Contracts and gotten goods (harder to get cash) in return for delays or failures.

    It just takes someone that knows the acquisition process AND a chain of Command that is willing to hold the Contractors accountable.

    It is the people running the zoo that are to blame for the condition of the creatures living in it.

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