As we know, the Navy’s ability to produce reasonably accurate cost estimates is on par with my ability to fly like a bird. Just for fun, let’s review the Navy’s cost estimating for the Ford. Below are the Navy’s cost estimate figures for the four Ford class aircraft carriers as they changed over the years.[1, adapted from Table 2., p.10]
These are bad and, what’s worse, they’re fake because the
Navy simply cut off the cost accounting when they reached the Congressionally
mandated cost cap limits. After that,
they kept racking up construction costs but buried the costs in other accounts
that are not publicly discernible.
For example, despite being delivered in May 2017 and
commissioned in Jul 2017, the Navy continued funding continuous weapons
elevator construction and repair until Dec 2021. Various reports suggested that as many as 200
contractors were working on the elevators at one time. None of that has been included in the ship’s
cost. Similar work took place – and is
still taking place! – on the EMALS catapult, Advanced Arresting Gear (AAG),
Dual Band Radar, and other systems.
The Navy may play word games with what they classify as
construction costs but the true construction costs continue to accumulate and are
no longer being recorded in any publicly visible accounting. The true construction cost is likely around
$16B+ to $18B+ range.
It is also instructive to examine the Congressionally
mandated cost cap limits.[1, p.8]
Look at the magnitude and frequency of those cost cap
changes. It’s not really a cost cap when
Congress increases the cap as the Navy exceeds the cap, is it?
FY07 “plus adjustments for inflation and other factors
FY14 “plus adjustments for inflation and other factors (including an additional factor not included in original cost cap)FY16 “plus adjustment for inflation and other factors, and with a new provision stating that, if during construction of CVN-79, the Chief of Naval Operations determines that measures required to complete the ship within the revised cost cap shall result in an unacceptable reduction to the ship’s operational capability, the Secretary of the Navy may increase the CVN-79 cost cap by up to $100 millionFY18 “The provision also amended the basis for adjusting the caps for inflation, and excluded certain costs from being counted against the capsFY20 “The provision directs the Navy to exclude from these figures costs for CVN–78 class battle spares, interim spares, and increases attributable to economic inflation after December 1, 2018.
Sigh .....
ReplyDeleteI really wish I'd been SecNav under Trump. Better yet, I wish that CNO had been SecNav under Trump. I've been thinking for awhile that we should have paused the Ford class until we got the problems resolved and gone back to building Nimitzes in the meantime. Yeah, they're not perfect, but they work and we can have enough faith in them to send them into combat.
This isn't even unprecedented. The original nuclear Enterprise was supposed to be the first of a whole class. But because of cost overruns we stopped the class at one and went back to building Kitty Hawk ships until we tried again with the Nimitz. And in those days we had a lot fewer constraints on defense spending than we have now.
All pretty much inevitable when you skip the prototype stages on new systems and replace them with half-understood business rhetoric. You end up with a ship with most of its parts OK, but vital systems that work so poorly the ship as a whole is unserviceable.
ReplyDeleteThe Navy hates testing, new catapults, existing missiles.
DeleteNobody wantw to hear bad news. Remember the USS Norton Sound ?, all sorts of thing were tried out her. Some systems met a well merited end, like Typhoon. Has anyone ever got a promotion because they killed a program ?
Interesting article in Warrior Maven, states; wargaming leads Navy to favor drones and smaller surface ships. Wonder what the cost overrun will be on all that.
ReplyDeletehttps://www.usni.org/magazines/proceedings/2020/june/navy-needs-course-correction-prototyping-purpose
ReplyDeleteBy senators Inhofe & Reed / June 2020
"Leaders in the Pentagon, Capitol Hill, and industry must recognize that speeding up innovative research and development, acquiring new capabilities faster, and transforming the way the U.S. military fights will actually require the disciplined demonstration of critical subsystems first. We look forward to working together toward this end. The stakes are real, and we have no time to waste. "
( My take : Also the navy needs to test ships & subsystems in prototype 1st of class vessels. Congress has required the navy to build the Constellation engineering plant on land for testing)
This article lists some of the debacles costing billions including the Ford class.
"Congress has required the navy to build the Constellation engineering plant on land for testing"
DeleteNot quite or, at least, not the effect you're hoping to see. The actual ship is already under construction (started Aug 2022) and will likely be complete before the land site is functional. That defeats the purpose of a land test site, doesn't it?
The test site is being built CONCURRENT with the actual ship. We've seen the maladies of concurrency many times and the Navy is repeating it again, now. The only thing the test site will do is allow the Navy to figure out what went wrong, after the fact.
An actual prototype (or land based test site) should be completed and thoroughly tested BEFORE the intended production item construction begins. At this point, there is no ability to change direction on the engineering plant of the actual ships. Long lead items have already been ordered and construction is underway.
The land based site is undergoing demolition in preparation for eventual construction, as I understand it.
CNO, You have dug a bit deeper into this. Looks like the navy skirted around the intent of congress.
DeleteI did this same little table exercise with DDG-1000. A little different story there as they cut the number of ships, but it doesn't matter. Costs go up each year and we don't have a ship that can go on deployment.
DeleteRE:Constellation land based test site.
DeleteI thought the whole reason the Navy demanded that the new frigate be a modification of an existing, in production ship was to minimize technical, cost, and schedule risk. In my own naive, non-naval mindset, it seems like replacing a critical system like the whole engineering plant, such that a land based test capability is needed, kinda defeats the whole purpose of that. What gives?
Whole process designed to fool Congress and the U.S> taxpayer. Plus, remember, the selection had at least as much to do with Wisconsin being a 2020 swing state per the President's own words at the time.
DeleteSo much for the MBAs that moswt Admirals and wanna be admirals get. Can we clawback the cost of tuition and salary for that wasted time? Or did they go the Jack Welch school of misleading managers?
ReplyDeleteThe Navy figures for Ford costs as you say are pure fiction, they broke the build costs into Phase 1 (included the AWEs which you mention and the last one was not finally installed until Dec.'21) and Phase 2 (mission equipment which Navy excluded from their reported costs as saying the equipment might change) and only reported the Phase 1 costs in nominal dollars which the CBO 2020 "An Analysis of the Navy’s Fiscal Year 2020 Shipbuilding Plan" used the Navy’s inflation index for naval shipbuilding to convert the $13.1 billion to $16.2 billion in 2019 dollars and it excluded the development costs which GAO Weapon Systems Annual Assessment report June 2023 quoted as $7.1 billion.
ReplyDeleteSo would be not surprised total including R&D, Phase 2 and other hidden costs $25 billion.
PS The Constellation Land-Based Test Program for Engineering Plant funded from the SCN Constellation build procurement budget, not from R&D.
Quick Question: Does the Navy own the rights to the Nimitz and Midway classes still, and if so, could they order those into production again? I know contractors would no doubt scream that the don't have the tooling still, etc. but just in general principle could they?
ReplyDeleteThis is unreal!! Its incredible to think that the lust for "new, shiny!" is so strong that it overcomes all common sense. If the cost is that high, why wouldnt Admirals say "Id rather have two old Nimitzes to play with than one Ford!", and act accordingly?? I mean, they have to know that all the sortie rate PR is nonsense, and that in reality, there arent any real combat capability improvements over a Nimitz. So...WHY??? Even if its bragging rights to have the "most technilogically advanced ship afloat", the PR for that is totally outweighed by the negative press from cost overruns. Even a non-navalist who doesn't do any research coupd tell you the Fords are massively (over)expensive... So why keep running with it??? I just cant understand the mentality here...
ReplyDeleteOn top of what you stated, is the cost of trying fix technological issues instead of prototyping before installation.
Delete"So why keep running with it?"
DeleteWhy keep going with the LCS even after it was long clear that it was a flawed design and concept? We were building new LCS AS WE WERE RETIRING PREVIOUS ONES!!!!
Why keep going with the Zumwalt even after it became clear that the gun system couldn't work? AND THEN WE BUILT TWO MORE!!!!!
The degree of institutional stupidity exhibited by the Navy is breathtaking in scope and magnitude.
It beyond the pale to say that instead of institutional or individual stupidity, this is just plain old corruption?
DeleteCongress originally established the Navy to defend our interests, and pays companies to build ships to the Navy's requirements.
What happens now is that companies pay Congress and exiting members of the Navy to develop requirements that fund companies to build ships. Building the ships is pretty secondary to funding the companies.
The whole affair is hopelessly perverted. It was a naval analyst (Norman Friedman?), wasn't it, who coined the term "self-licking ice cream cone"?
Saying "the system is broken" underestimates the problem. What's required isn't just picking up the pieces and putting it to rights. To me, the question is how to dismantle a system that doesn't work but does exist (and exists to perpetuate itself). That's going to get a lot of pushback from the system when you try to fix it.
Short of satisfying but unlikely answers, how? Outside of a more generic "break up the defense industry and require competition at every level" I don't know.
Remember the smae Admirals/Sec Navs go to work for Defense contractors. The self licking ice cream cone!
Delete"The degree of institutional stupidity exhibited by the Navy is breathtaking in scope and magnitude"
ReplyDeleteOh no doubts. But usually human nature is predictable...ie; self serving.... So whats the actual motive behind not doing the right thing and cutting bait?? Is it just trying to look like you made a mistake?? Or just believing your own PR about a program?? Why wouldnt any Admiral or PEO not look at the problems and overruns and say " holy hell!! This is isnt working as planned. Im gonna end ______ right now!!"???
Is it that the penalties for ending a contract are so high?? Is "upsetting the industrial base" a big enough deal that we dont dare shut down a line and retool for somthing else???
DeleteI think there are a lot of motives that all conspire to push individuals to not do the right thing. Probably they vary a lot based on particular cases but the answer is probably "all of the above". Think about it like this. Suppose you're the CNO and you think the next Ford is a money pit you want to get out of. You say you're going to cancel it and damn the consequences.
Delete1. An immediate consequence for you is you don't get to go work for any defense companies or get a golden parachute from them indirectly as a consultant, board member, or "senior fellow" at a think tank that turns out to be 99% funded by the company.
2. You have internal politics to contend with, because even though you're certain the Ford sucks, you have a lot of people within your organization who are wedded to it, and who possibly even think it's a good idea or at least worth saving.
3. You have external politics. What happens when all those guys building CVN-81 get laid off? They call their congressman, who gets together with the rest of Congress and tells you how much they really want you to build that ship.
4. A. You have the practical consideration that it's still closer to done than not. If you've already dropped $10B into an incomplete ship, does it make sense to start over, or do you just drag it across the finish line?
4. B. And tactically, if you don't get that ship, can you keep another one going for an extra 5-7 years? Probably, but it has to be worked through and that, itself has costs. Or are you just one carrier shorter than you thought you'd be (which is already short).
5. You have a four year term (if you're not forced out sooner). How do you cement your decisions against all these forces that can, potentially, just wait you out and then go back to doing what they were doing? As was pointed out above with the Constellation engineering example, various plans are in place to positively evade lawful requirements, and it may be in some cases that actually complying with some requirements would require breaking others.
I don't think this is in any way an exhaustive list, but they're issues. And if they're not accounted for, then you cancelling the Ford won't actually end up with you cancelling the Ford. It will just be another cost cap that gets worked around.
I just don't understand the need for the Ford.
ReplyDeleteThese things are just floating freaking airports, at some point the 'improvements' just aren't that important.
What IS important are the aircraft and the quality of the pilots and the thoroughness of their training.
Lutefisk
The public might not realize it, but the Fords represent a major breakthrough in pork technology, and we all know that's very important to the military.
DeleteAnd that's not something that should be overlooked.
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