Over the
years of this blog, we’ve noted the rise in accounting games that the Navy has
been playing to hide the true costs of weapon systems and the failures of
quality and scheduling. This trend has
been accelerating with the Navy coming up with more and more schemes as
Congress has attempted to exercise oversight.
One of the
most egregious is the recent practice of accepting – and commissioning! –
incomplete ships.
The ship is
contracted, delivery is made with substantial incomplete compartments, weapon
systems, sensors, etc. and then the ship is completed during post-delivery
availabilities. Thus, the original
construction contract only actually covered a partial ship. Some or all of the additional funding needed
to complete the ship comes from various non-construction account lines and,
therefore, does not show up in the final ship cost. This leads Congress and observers to believe
that the ship is cheaper than it really is.
For
example, the USS San Antonio (LPD-17), was delivered substantially incomplete.
The Navy accepted delivery of LPD-17
with about 1.1 million hours of construction work remaining to be done on the
ship. This equated to about 8.7% of the total hours needed to build the ship,
and (with material costs included) about 7% of the total cost to build the
ship. (3)
Lest you
think this was just a first of class issue,
The Navy accepted delivery of LPD-18
with about 400,000 hours of construction work remaining to be done on the ship.
(3)
The carrier
Ford was delivered with 367 unfinished compartments, among many other
deficiencies. (5)
LCSes have
routinely been delivered incomplete (see, “LCS Waiver Trials”).
This
partial delivery practice started as a means to cover up delivery schedule
failures and was used as needed. However,
the practice has proven so effective in misleading observers that the Navy has
now formalized it as “phased delivery”.
The first
phase is the initial delivery of the incomplete ship. The Navy has taken to referring to this as
the Hull , Mechanical, and Electrical
(HM&E) delivery. That partial
delivery is accompanied, in short order, by “hugely successful trials” (how can
a trial be successful when the ship isn’t complete?) and then commissioning
(how can a ship be commissioned when it is incomplete?).
The second
phase consists of one or more post-delivery / post-commissioning availabilities
where the weapons, sensors, combat system, and whatnot are added and incomplete
compartments are finished (well, some of them – there are reports that LHD-17,
LCS, and Ford ships still have unfinished compartments).
For
example, the Navy accepted delivery of the Zumwalt (DDG-1000) in May 2016 and commissioned
the ship in Oct 2016. Zumwalt was then transferred
to San
Diego for completion. Among other work
needing to be completed, BAE Systems received a contract to install Mk 57
peripheral launch cells (VLS), “combat systems”, sensors, combat system
programming, and perform post-construction hull, mechanical, and electrical
enhancements. (1,2)
Zumwalt - Good Enough, Call It Delivered - We'll Finish It Later |
This
practice has not gone unnoticed by Congress and they are not very happy with
it. Congress included language in the Fiscal
Year 2019 National Defense Authorization Act which prevents the Navy from
claiming delivery of incomplete ships as battle force ships in the Naval Vessel
Register. Thus, the first two Zumwalts
which the Navy has claimed count towards the battle force numbers have now been
removed from the count.
The 2019 defense authorization bill
clarifies what lawmakers tried to do two years ago related to Navy
ship-counting, making clear that a ship cannot be included in the Naval Vessel
Register’s list of battle force ships until it has been fully delivered to the
Navy – and in the case of ships with a phased delivery, where the Navy takes
custody of the hull but adds in the combat system or electronics later, that
means the final delivery date.
So, upon passage of the bill,
Zumwalt-class destroyers USS Zumwalt (DDG-1000) and yet-to-be
commissioned Michael Monsoor (DDG-1001) were taken off the battle
force ship count and will not be added back on until they complete a combat
system activation in San Diego . (4)
Congress
had earlier attempted to put an end to the practice of counting incomplete
ships from partial deliveries.
In the FY 2017 NDAA, lawmakers
stated that the Navy should “deem ship delivery to occur at the completion of
the final phase of construction,” and that all materials submitted to
congressional committees should use that format, rather than including an
earlier partial-delivery date. (4)
That should
have ended the practice but, in typical fashion, the Navy ignored Congress’
wishes.
After the 2017 language became
law, the Navy was required to use the full delivery date when reporting to
Congress, but it was still entering ships –
namely Zumwalt and Michael Monsoor – into the Naval Vessel
Register upon HM&E delivery rather than final delivery. (4)
Hopefully,
Congress has now gotten the message across to a Navy that believes itself above
and beyond Congressional oversight and legislative authority.
Why does
partial delivery and battle force counting matter to Congress?
The committee is concerned the
variance in the Navy’s definition of ship delivery may obscure oversight of the
program’s schedule, including whether or not a project has breached its
threshold delivery date. … CVN-79 and the Zumwalt-class programs illustrate
this practice. (4)
For lawmakers, the need to use a
final delivery date instead of a partial delivery date also contributes to
program oversight and accountability. (4)
The
difference in time frame between the Navy’s attempt to include partial delivery
ships in the battle force count and the final delivery is substantial. For example, Zumwalt was accepted by the Navy
in May 2016 and is not yet complete, 2 yrs and 3 months later and counting.
The Navy
cites construction costs for the Zumwalt but those are only partial costs. Over two years after delivery and
commissioning, the Zumwalt’s construction costs continue to mount up but we’ll
never see those costs cited.
Let’s be
crystal clear about the practice of partial delivery. It’s all about hiding costs from Congress,
hiding schedule delays, hiding inept program management, and keeping funding
flowing.
_________________________________________
(3)Congressional
Research Service, “Navy LPD-17 Amphibious Ship Procurement:
Background,
Issues, and Options for Congress”, Ronald O'Rourke, March
16, 2011 ,
RL34476,
(4)USNI
News website, “Navy Battle Force Tally Dips By 2, After New Ship-Counting Rules
Postpone Zumwalt Destroyers”, Megan Eckstein, 21-Aug-2018 ,
(5)Government
Accounting Office, “Navy Shipbuilding”, July 2017, GAO-17-418, p.22
Just goes to prove that the only purpose of a PMO is to keep the money flowing to the Contractors.
ReplyDeleteReally Disgusting. Maybe Lodestar will fix it?
Congress can get mad, but why don't heads roll at the USN/Pentagon for this behavior? I worked in IT 20 years this level ass covering would have got me fired in a day. And it can't just be a government thing. My spouse is a scientist for the USDA. You can't release a new seed variety to plant breeders and than say well really it will done in 2 years but just wait and grow it anyway - that would get you fired for cause.
ReplyDeleteThe culture in the US military/pentagon seems to a swerved very far from reality. Be it the F-35, the LCS (not stress tested even at it minimal lowered standards) were is the accountability. When did we stop caring about that.
It could also be partially the influence of scaled agile delivery framework that is all the rage (and works very well in software delivery).
ReplyDeleteAgile methodology emphasises a series of releases of a product,veaxh time refining the product based on customer feedback. It's great for commercial product delivery. I know for a fact that it has been taught to the US military for years now.
Obviously it's a problem if they are trying to follow the same principals while commissioning warships.
"Obviously it's a problem if they are trying to follow the same principals while commissioning warships."
DeleteWarships.... this is the key to this. You can't count a warship until it is ready for war. It may well be developed further and enhanced, but it must be ready to go to get counted.
If this principle was applied there may well end up being a significant difference between the number of commissioned ships, and the actual count of ships ready for war. At least then there would be a real understanding of the capability that is available.
In Australia we have 6 commissioned Collins class submarines, but it is stated we will have 2 available for tasking all the time, and 3 available 90% of the time. Boats don't count unless they are ready to go. I know this is a small example, but the point is that a ship of war doesn't count as a capability unless it is capable of fulfilling a tasking
I've seen this done in the past but not to this level. For example, the Enterprise was completed in 1961 but without the planned Terrier missile armament installed. This was explained at the beginning though, and the rest of the ship was delivered on time. What we are seeing now is just fraud.
ReplyDelete