The Definition of Insanity?

Over the years, we’ve seen that the Navy’s ability to estimate costs is laughable, at best.  Given that history, you’d think the Navy would have learned to bump up their estimates.  That makes the latest procurement program, the LX(R) replacement for the LSD-41/49 class another sad affair in the making.

The LX(R) is going to be a modified LPD-17.  So, with nothing more than that statement, what would you, the reader, estimate the cost of the LX(R) to be?  Probably the cost of the last LPD built ($2.1B) with some minor adjustments for specific equipment removed and specific equipment added plus the inevitable cost increases that just plain seem to accrue to shipbuilding, right?  Same ship, same cost.  Seems reasonable.  So, what does the Navy think?

From a USNI News website article comes the Navy’s view of the cost (1).

“The Navy and Marine Corps were able to design an LX(R) dock landing ship replacement with greater capability for less money by starting with the higher-end San Antonio-class LPD-17 design, stripping away unneeded features and adding back in desired ones, service officials said last week.”

The same ship, with greater capability, for less money.  Does that sound reasonable?

“Johnson [Capt. Bryon Johnson, OPNAV N953] said the program had to stay within a cost cap but said he was confident the first ship would stay within the cost cap and deliver on time.”

Consider the Navy’s track record of meeting first ship cost and schedule goals.  Would you think it’s more or less likely that the first LX(R) will be delivered on time and one budget?

“Lt. Gen. Robert Walsh, who served as director of expeditionary warfare (OPNAV N95) until July, said at a Marine Corps Association event last month that, in fact, the Navy and Marine Corps had far surpassed cost-reduction goals while descoping the LPD design.

‘We drove that to a cost cap that was given to us by [the chief of naval operations], and we, with our industry partners, with [Naval Sea Systems Command], drove in the right requirements. And we got the most we could possibly get out of that ship, and it almost looks like an LPD-17, and we got it well under the cost cap,’ he said.”

An even more optimistic view, huh?  Costs will be well under the cost cap.  I don’t know what the cost cap is.  I think they’re referring to an internal target cost rather than a Congressionally mandated cost cap and I think the internal target is $1.6B per ship.

“Current N95 Maj. Gen. Chris Owens said the approach is ‘attractive to [the Office of the Secretary of Defense] and it’s attractive on Capitol Hill’ due to its efficiency. Ultimately, he said, it will ‘give us a bigger ship, greater capability, not only in size and capacity but also in things like aviation capability, the medical capability and perhaps most importantly in this day and age of split and disaggregated operations the command and control capability that the LSDs lack.’ ”

There it is again – a bigger ship with greater capability for less money.  Does that seem believable?  The Navy will take the exact same ship they just built for $2.1B and make it bigger, with more capability and they believe it will be cheaper?  Isn’t that the definition of insanity - doing essentially the same thing and expecting a different outcome?  They're going to build essentially the same ship and expect it will cost significantly less - insanity.

LX(R) - Insanity?

Someday we will be discussing the LX(R) cost overruns and debating why they happened.  Well, the starting point is right here, right now, with the Navy’s typical wildly underestimated costs. 

What will the LX(R) really cost?  As I said, it will be the cost of the last LPD built ($2.1B), less removed equipment, plus added equipment, plus inflation, and plus that inevitable cost creep that seems to affect Navy ships.  The removed and added equipment will probably be a wash and cancel out so that leaves us with $2.1B plus the inevitable creep so let’s call it $2.5B.  There you have it.  With no specifications to look at, a reasonable cost estimate would be $2.5B.  Ask yourself, who is more likely to be right about the LX(R) costs, ComNavOps or the Navy?

The Navy’s inability to learn lessons is legendary and this is the start of yet another example.

(1)USNI, “Navy: LX(R) Will Be Cheaper, More Capable Thanks To Using San Antonio LPD Design As Starting Point”, Megan Eckstein, November 5, 2015,

http://news.usni.org/2015/11/05/navy-lxr-will-be-cheaper-more-capable-thanks-to-using-san-antonio-lpd-design-as-starting-point