MEKO A-200 Frigate Cost

Just a quick note ... For those of you who continue to believe that foreign shipbuilders can build naval vessels faster and cheaper than US builders, here’s a data point.  The newly specified MEKO A-200 frigates for the German navy will reportedly cost $1.9B(USD) each for four ships and you can bet your soul that cost will increase as work actually commences.  We’re looking at a $2 - $2.5B frigate!  Yikes!

Parent Design

What’s the Navy’s latest fad in shipbuilding?  Yeah … parent designs. 
 
The concept is that an existing, well established, “parent” design is used in a new shipbuilding program to avoid all the problems associated with new designs.  Being already in existence and thoroughly “wrung out”, the new shipbuilding program will have no problems since it will just use the parent design.  Sounds good.  Sounds logical.  Right?
 
The concept was the foundation of the successful disastrous FREMM/Constellation frigate program.  Of course, the Navy instantly abandoned the parent design as soon as the program became official and, in a shock to no one except the Navy, costs ballooned and schedules crashed.
 
The concept has also been applied to the Burke class although not by name.  When the Navy wanted the next generation surface combatant they didn’t even consider any option other than modifying the Burke parent design.  This eventually became the Burke Flt III despite the severe limitations the parent design imposed on the desired radar equipment and capabilities, stealth signature, weight margins, and so forth.
 
The concept is now being applied to the Constellation’s replacement, the National Security Cutter frigate (NSC-FF).  The new frigate is going to be based on the NSC parent design.  Of course, as we’ve seen, the Navy has already begun implementing fairly significant changes and the parent design is beginning to fade into the rear view mirror even as the program works to become official.
 
So, yes, the Navy has butchered the parent design concept in execution but what if they didn’t?  For the sake of discussion, let’s pretend that the Navy could flawlessly execute the parent design concept, meaning, no change orders, predictable costs, and schedules that can be met thanks to the absence of continuous change orders.  Would that produce a useful product?  Would the parent design result in an affordable, timely, combat-effective ship?
 
At first glance, how could a successful parent design approach not produce a successful, useful product?  By definition, the parent design exists and was, presumably, successful and useful so the “child” design has to be, as well, right?
 
Let’s take a look at some of the issues with a parent design approach.
 
Obsolescence – By definition, a parent design is obsolete.  Consider the timelines for the Navy’s parent design attempts.  The FREMM design dates back to somewhere around 2005 making the design 20 years old.  Would any sane ship designer really want to begin a new program with a 20 yr old design?  The Burke design dates back to the mid 1970’s, making it now a 55 yr old design.  The NSC design dates back to around 2000, making it a 25 yr old design. 
 
Do we really want to be basing our newest ship designs on 2-5 decade old designs?
 
While some characteristics and features can be updated from the parent, such as weapons, software, and sensors, others cannot, such as stealth.  For example, the Burke hull/superstructure stealth is obsolete and no longer effective but there is nothing that can be done about it.  The stealth signature is largely fixed by the hull/superstructure design.  Survivability is also largely fixed by the original design.  The FREMM, for example, was inherently unable to meet Navy survivability and damage control requirements, necessitating a major redesign resulting in the Constellation having less than 15% commonality with the parent design.  The Navy had to abandon the parent design in order to meet survivability standards.  Similarly, acoustic signatures, infrared signatures, etc. that are determined by the hull/superstructure shape, materials, and construction cannot be significantly altered or improved.  They are what they are.
 
Changed Requirements – Every ship design is determined by the operational and tactical requirements of its time and those change over time, especially over several decades.  The design, however, once established, is fixed and cannot be changed without abandoning the parent concept.  Thus, using a design that was intended to meet specific requirements that are decades old, and may no longer be valid, is unwise, to put it mildly.  The Burke, for example, was never designed for today’s electromagnetic environment and advanced stealth requirements and there is very little that can be done about it.
 
Design Limitations – Many design characteristics are inherent to the original design to a very large degree.  Things such as weight margins, stability, metacentric height, fuel capacity, structural strength, armor (or the complete absence thereof), speed, endurance, etc. are largely fixed by the original design barring a major redesign in which case it’s no longer the parent design.
 
 
Conclusion
 
The conclusion is painfully obvious.  The parent design concept has so many inherent flaws and limitations that it is simply not a valid, useful approach even if it were executed flawlessly.
 
This makes one wonder why the Navy even began attempting the parent approach?  Well, the answer is obvious.  The Navy has had so many failed, disastrous shipbuilding programs that the priority changed from a useful, lethal, modern combatant to simply getting hulls in the water without controversy and failure.  It no longer matters to the Navy whether the ship is useful.  They just desperately want a shipbuilding program to “succeed”, meaning, hulls in the water, on time and on budget … effectiveness be damned.
 
I completely understand the Navy’s mental state, at the moment.  They’re gun shy in the extreme and terrified of yet another failure.  Congress is incensed at their ineptitude and has begun inserting more and more restrictive oversight and conditions on budget allocations (as they should!) and the Navy is adamantly opposed to oversight.  The only way the Navy can get Congress off their back is to produce a “successful” program, no matter how ineffective it is.  The NSC-FF is barely one step beyond combat canoes but it serves the Navy’s purpose.
 
We should be producing beyond-Visby corvettes and, instead, we’re producing decades old NSC cutters as our “new” frigate.

Constellation Construction Progress

We’ll probably never know the real reason why the Navy decided to terminate the Constellation program but one of the factors certainly had to be the glacially slow pace of construction progress.
 
Constellation was laid down 12-Apr-2024 although, as with most modern ships, construction of subassemblies had already begun.  Now, Nov-2025, 19+ months later, the ship is reportedly 12% complete.[1]  That’s 12% in 19+ months.  That’s an average of 0.6% construction progress per month.  At that rate, it would require 167 months (13.9 years!) to complete the construction and even then, that would only be the basic hull.  Fitting out would require many more months.
 
Fourteen years to partially build a frigate?
 
If you were SecNav, would you have continued this program?

 

Constellation Under Construction?

 

 
________________________________

 
[1]USNI News website, “Navy Cancels Constellation-class Frigate Program, Considering New Small Surface Combatants”, Sam LaGrone, 25-Nov-2025,
https://news.usni.org/2025/11/25/navy-cancels-constellation-class-frigate-program-considering-new-small-surface-combatants

USS Constellation Update

The Navy’s new frigate, the USS Constellation, is now expected to deliver 3 years late, or more (spoiler alert!  It will be more!).  What’s going wrong?  Let’s get an update.
 
 
Design
 
The Constellation contract was awarded in April 2020 which means the design work began more than 5 years ago and is still nowhere near complete.  That’s astounding.  Over 5 years to generate a design and it still isn’t complete.
 

… the U.S. Navy had to significantly modify the design to meet U.S. survivability and growth margin standards.
 
Speaking at the Naval Institute’s Defense Forum Washington event, Fincantieri Marinette Marine CEO Mark Vandroff said the Navy and the shipyard underestimated the complexity of altering the design.[2]

The entire point of the so-called parent design approach was exactly to avoid significant design changes and yet the Navy ignored that philosophy and instituted extensive changes.
 
Concurrency and Schedule
 
As we’ve seen with every acquisition program in recent years, concurrency (simultaneous design and construction) always causes cost and schedule havoc.  Despite this repeated, soul-deep lesson, the Navy opted for concurrency, yet again, beginning construction with only partial design plans.  Predictably (well … predictable by everyone except the Navy), this has caused schedule problems among other issues, with the ship now scheduled to deliver more than three years late.
 

The Navy’s decision to commence construction before completing the design has led to significant schedule slippages.[1]

Cost
 
As always, the Navy’s cost estimates have proven fraudulently underestimated.
 

Initially, the estimated cost for the first ship was around $1.28 billion, with subsequent ships expected to cost approximately $1.05 billion each. However, these estimates have proven to be overly optimistic. The actual costs have increased significantly, with some estimates suggesting that the final cost per ship could be as high as $1.6 billion. This 40% increase in costs has raised concerns about the program’s affordability and sustainability.[1]

Actually, those costs aren’t even true.  The Congressional Research Service Feb 2021 report notes,
 

The Navy’s FY2021 budget submission estimated that subsequent ships in the class will cost roughly $940 million each in then-year dollars.[emphasis added][2]

Weight
 

The weight of the ships has increased by over 10% from the initial estimates. This weight growth is attributed to design decisions and the challenges of adapting a foreign design to meet U.S. Navy requirements.[1]

Unfortunately, the Navy is now looking at reducing or eliminating other capabilities in order to compensate for the weight increase.  It is almost certain that the range and speed requirements will be downgraded among other detrimental changes.
 
Workforce
 

The shipyard is reportedly a “few hundred” workers short, which has contributed to delays in the construction schedule.[1]

Come on, now.  It’s not as if the builder didn’t know how many workers they had when the bid the project.  If they’re short of workers now, they certainly knew they were short of workers when they bid.  This is, again, fraud on the part of the builder and willful complicity on the part of the Navy who also knew the builder’s workforce compared to the project requirements.
 
Risks
 

The Navy has yet to demonstrate the full capabilities of the propulsion and machinery control systems … [1]
 
The Navy is considering additional land-based testing to mitigate these risks and ensure the reliability of the systems before the ships are deployed.[1]

When have we ever seen ‘risks’ not become problems?  The point of land based testing is to find problems and solutions before beginning construction.
 
Second Yard
 
Given the inability of Fincantieri to meet the contracted schedule, the Navy has begun looking at a second source shipyard.  Possibilities include:
 

… specifically mentioned Austal USA, Bollinger, HII’s Ingalls Shipbuilding and General Dynamics Bath Iron Works as potential second yards.[2]

 
Conclusion
 
The Navy’s absolute refusal to design and build a ship the proper way (complete the design and then begin construction) is, after so many demonstrated failures using this approach, a near criminal act of fraud and negligence perpetrated against the American taxpayer.
 
As we all knew, with 100% certainty, concurrency has, once again, caused schedule slippage and cost overruns.
 
The Constellation class is now in the process of having its requirements downgraded to compensate for weight increases.  So much for the supposed benefits of a parent design.  The Navy never had any intention of building the parent design.  That was just a ploy to evade additional Congressional oversight.
 
It bears noting that the yard’s manpower shortages are not exactly a new problem that suddenly reared its head.  Both the yard and the Navy knew they couldn’t build the ship in the required time frame with the workforce they had.  Essentially, the yard and the Navy conspired to hide the inability to meet the contract.
 
Worse than all the listed problems is the fact that even if there were no problems, it would only produce an obsolete design unsuited for modern combat.
 
There is no other way to describe this program than as a massive fraud and failure. 
 
 
 
____________________________

[1]1945 website, “The U.S. Navy’s New Constellation-Class Frigate Is In Big Trouble”, Isaac Seitz, 25-Feb-2025,
https://www.19fortyfive.com/2025/02/the-u-s-navys-new-constellation-class-frigate-is-in-big-trouble/
 
[2]USNI News website, “Navy: Constellation Frigate Design Will be Ready in May, Second Yard Could Come in FY 2027”, Mallory Shelbourne & Sam LaGrone, 13-Dec-2024,
https://news.usni.org/2024/12/13/navy-constellation-frigate-design-will-be-ready-in-may-second-yard-could-come-in-fy-2027

Efficiency and Competition

In WWII, a dozen or more shipyards built Fletcher class destroyers.  The yards were given a set of blueprints and contracted to build the ships according to the plans.  It didn’t matter which yard built any given destroyer, they were all the same.  This worked because the Navy designed the ship and generated the blueprints.  Once that was accomplished, any yard could build the ship.  It was just a matter of following the plans.
 
In contrast, because the Navy no longer designs ships, generates blueprints, or even requires complete designs and blueprints prior to the start of construction, only the contracted yard can build a given ship.  The LCS is the standout example of this badly flawed approach.  Lacking any guidance or blueprints, both Lockheed and Austal generated their own LCS designs, spec’ed their own equipment and combat systems, and no one else could build them.  Thus, we wound up with two LCS classes that had almost nothing in common;  the epitome of inefficiency.
 
What should have happened is that the Navy should have generated a complete design concept – and locked it down instead of continuously changing it! – followed by a complete set of construction blueprints.  They could have then shopped around for the best manufacturing deal and, if necessary, utilized multiple shipyards to in competition to ensure that costs and quality were well controlled.
 
 Our ship design and contracting approach is badly broken and yet the Navy is not only embracing it but doubling down on it.  Ignoring common sense, best practices, and all previous experience, the Navy began the Constellation class frigate construction without a complete design or complete set of construction blueprints (see, “Lesson Learned?”).
 
How do we expect the shipbuilder to accurately bid on the construction without a locked in design and a complete set of blueprints?  They can’t!  And yet we turn around and try to blame the manufacturer when costs inevitably balloon out of control.
 
The Navy absolutely must regain control over the ship design and construction process.  We must reinstitute the General Board (design) and BuShips (blueprints).  Without those capabilities, the Navy is just going to continue producing failure after failure.

Same As Us

There is a large segment of naval observers and commentators who believe that all of our shipbuilding woes could be solved by contracting our construction to foreign shipyards.  The claim, with almost no supporting evidence, is that foreign builders build ships faster, better, and cheaper.  ComNavOps has refuted that belief, repeatedly, and pointed out that when all the ‘tricks’ of production and accounting are considered, foreign ships are not cheaper, have similar quality issues, and are not more likely to be on time.  The Belgian-Dutch new mine countermeasures ship program (see, “Dutch-Belgian MCMMothership”) provides yet another example.
 

At the request of Belgium Naval & Robotics, a Naval Group-Exail consortium, the delivery schedule of the first four of the twelve ships acquired in 2019 has been updated. The lead ship, BNS Oostende (M940), was originally expected on December 23, 2024. The Belgian Navy will have to wait eight more months.[1]

The delay is not just for the first ship of the class.  The next three will also be delayed.
 

The Dutch Navy’s first ship, the BNS Vlissingen (M840), was to be delivered in June 2025. Dutch sailors will to wait five to six more months. The BNS Tournai (M941) and BNS Scheveningen (M841) will arrive respectively one and two months late.[1]

So, a simple MCM vessel will be delayed nearly a year (and you know it will be later than that!).  Perhaps foreign shipyards/builders are not the miracle workers so many of us want to believe?  Perhaps they’re not really any different or better than we are?  Perhaps they do some things a bit better and some things a bit worse but, overall, they’re no different from us?
 

Dutch-Belgian MCM Mothership

Every time I’ve looked into foreign shipyards and builders in any detail, they come up no better than us.  You might recall a recent post citing many examples of foreign shipyard failures similar to ours (see, “Foreign Ships AreMagnificent”).
 
I have nothing against using a foreign shipyard under certain, limited circumstances but I doubt it will produce any real improvement in quality, faster builds, or cheaper costs.  On the plus side, it would add an element of competition which is conspicuously absent and that alone might spur some small degree of improvement.
 
 
_____________________________

 
[1]Naval News, “Belgian-Dutch RMCM Mine Warfare Program Facing Delays”, Nathan Gain, 13-May-2024,
https://www.navalnews.com/naval-news/2024/05/belgian-dutch-rmcm-mine-warfare-program-facing-delays/

Constellation Fraud

The Navy assured us that the Constellation class frigate would be a zero risk, on-time, on-cost, romp through the park to build since it was, essentially, a copy of an existing Fincantieri FREMM design.  There would be only minor, inconsequential changes – the color of the paint, perhaps, or an extra bulkhead or two for greater compartmentalization – that would have no impact on the design or production of the ship.
 
Of course, when the concept drawings were released, it turned out that the ship had been heavily modified and actually bore little resemblance to the parent FREMM design.  The Navy had lied to Congress and the public by presenting the frigate as a minor variation of an existing design when, in reality, it was a nearly brand new design with little in common with the so-called parent.  I won’t bother reciting the litany of changes from the parent design as those are readily available on line.
 
So, how’s all that working out?
 
USNI News website reports that the ship construction and delivery is going to be delayed at least a year.[1]  Construction began in Aug 2022 and the Navy is now hoping for delivery in 2027.  Far more likely is a 2028-9 delivery.  That’s a five to seven year delivery for what the Navy claims is a minor tweak of an existing design!
 
This babbling, incoherent, pointless statement from Andy Bosak (deputy manager for the frigate program) tells you everything you need to know about the state of the program.  The Navy has no idea what’s happening, no idea how to fix it, and no idea when the ship will be delivered. 

We are doing our analysis, as the Navy does, of doing deep dives of causes and effects and various different levers of which we can pull within that shipyard,” he added. “And we need to, as a program, work with our leadership, kind of figure out what we want to do. And from that, we will make that assessment as to what the actual schedule impact is of where we are. And that effort is ongoing.[1]

The builder, Fincantieri, blames much of the delay on labor shortages, welders, in particular.  No doubt this is a factor but I suspect there are other, far more impactful problems.  For example, 

… Fincantieri … wrestled with Americanizing the FREMM design for two and half years before it hit the 80 percent design completion and could begin fabrication on Constellation in 2022.  The modification of the design altered almost every drawing of the FREMM and required review from NAVSEA … [1]

The labor situation was well known before Fincantieri submitted a bid and the before the Navy awarded them a contract so that should have already been factored into the schedule.  What wasn’t factored in was the extent to which the Navy would modify the design.  The modifications sent ripple waves of disruption spreading throughout the program, culminating in the major schedule slippage we learn about now.  Undoubtedly, the schedule will slip even further.  We’re likely looking at closer to a two year schedule delay for a ship that was supposedly a knock off of an existing design.
 
The Navy knew all this and understood what deviating from the parent design would mean. 

"[The Navy] and the shipbuilder agreed that design maturity was probably the single biggest factor we could do to reduce the risk of production,” former program executive officer for unmanned and small combatants Rear Adm. Casey Moton said in August of 2022.[1]

So, knowing full well what a modified (immature) design would do to the production schedule, the Navy went ahead and completely redesigned the ship anyway.  Not only is the Navy complicit in the current problems, they are the proximate cause of the problems!
 
Here’s yet another example of the ‘minor, insignificant’ changes the Navy made: 

… testing at Naval Surface Warfare Center, Carderock found that the modified design did not meet service standards for operating in heavy seas, necessitating design changes that ate into the schedule margin … [1]
 
“We were already into the functional and detail design when that report came from Carderock – something of a surprise because the parent design didn’t really have that,” Vandroff (Mark Vandroff, Fincantieri Marinette Marine’s chief executive officer) said.[1]

That was a surprise to you, Mr. Vandroff?  Seriously?  You completely changed the design to the point that it is a brand new, never before produced design and were surprised to find that created new problems?  You’re not an engineer, I’m assuming?
 

 
Conclusion
 
This program has been nothing but fraud and deception piled on fraud and deception from the very beginning and now it’s coming home to roost.  The Navy tried to hide a completely new ship inside the shadow – and lies – of an existing ship and now they’re acting surprised that the fraud is impacting the production schedule.
 
We need to also keep cost in mind.  Schedule slippages of this magnitude don’t come free.  The cost is going to skyrocket and the Navy will, again, act surprised and attempt to blame the builder.
 
By the way, do you recall that the Navy claimed that the follow on ships (2-20) would cost less than $800M?  Yeah, they said that.  Here’s the quote from RAdm. John Neagley:
 
“The follow-on objective cost for FFG(X) is $800 million. We think we can get below that.”[2]
 
The Congressional Budget Office (CBO), on the other hand, estimated an average cost of $1.2B per ship.[3]
 
As it turns out, the actual budgeted costs are around $1.1B-$1.2B, and that’s before the inevitable cost overruns, costs associated with schedule slippages, deferred completion costs for incomplete delivery, etc.  The true cost will be somewhere in the $1.5B+ range.
 

 
 
______________________________

 
[1]USNI News website, “First Constellation Frigate Delayed At Least a Year, Schedule Assessment ‘Ongoing’”, Mallory Shelbourne and Sam LaGrone, 11-Jan-2024,
https://news.usni.org/2024/01/11/first-constellation-frigate-delayed-at-least-a-year-schedule-assessment-ongoing#:~:text=The%20service%20has%20briefed%20Congress%20that%20the%20future,legislative%20source%20confirmed%20to%20USNI%20News%20this%20week.
 
[2]Breaking Defense website, “Navy Says It Can Buy Frigate For Under $800M: Acquisition Reform Testbed”, Sydney J. Freedberg Jr., 12-Jan-2018,
https://breakingdefense.com/2018/01/navy-says-it-can-buy-frigate-for-under-800m-acquisition-reform-testbed/
 
[3]CBO website, “The Cost of the Navy’s New Frigate”, Oct-2020,
https://www.cbo.gov/publication/56675

Lesson Learned?

A cursory recall of the Navy’s recent failed surface ship programs includes the LCS, Zumwalt, Ford, MLP, etc.  That’s a lot of data and opportunities for lessons learned, right?  The Navy, through trial and [mostly] error should be getting pretty good at managing ship acquisition programs by now, right?
 
One of the major lessons learned has to have been that concurrency (simultaneous design and construction) never works.
 
I wonder how the new Constellation class frigate program is doing?
 
The GAO annual report has this to say, 

Program officials stated that over 90 percent of the FFG 62 functional design and 80 percent of the detail design—which adds 3D modeling to show the configuration of equipment on the ship—were completed when construction began on the lead ship in August 2022. They noted that these results align with the Navy’s general expectations for design maturity needed before construction begins. However, beginning construction with an incomplete functional design is inconsistent with leading practices and increases the risk of costly design changes and rework.[1][emphasis added]

So, defying all logic, common sense, and bitter, costly experience, the Navy began construction of the Constellation before the design was complete.  Way to learn a lesson, Navy.
 

Constellation - Which will be finished first, the ship or the design?

___________________________________

 
[1]U.S. Government Accountability Office, “Weapon Systems Annual Assessment”, Jun 2023, GAO-23-106059, p.148

Single Hits

During WWII, Guadalcanal witnessed some of the most brutal and devastating naval battles in history.  Ironbottom Sound acquired its nickname for good reason.  Allied battleships, cruisers, and destroyers absorbed many dozens of torpedo and shell hits.  Despite this onslaught, all the ships remained combat effective right until they either sank or the battle ended.  These were unbelievably tough ships.
 
In contrast, we’ve long noted that modern naval vessels are no longer WARships but glorified cruise ships.  They’re thinly and weakly built with no significant armor and small crews for damage control.  They lack separation and redundancy among other survivability flaws. 
 
Let’s just verify that our belief is correct (or not?) by examining the modern record of naval ships that have taken hits of various types.  The table below lists the ship, the number of hits, and the result.

The obvious observation that jumps out is that only one ship was able to continue its mission and the bomb that hit that ship failed to explode.  Note, also, the very small number of hits that were required to achieve a sinking or mission kill.  Contrast this with the WWII examples where the ships around Guadalcanal sustained many dozens of torpedo and shell hits and continued fighting.
 
For example, at Savo Island the USS Astoria received 65 shell hits, the majority being 8”, and continued to fight though the end of the battle (no mission kill !) before, eventually sinking the following day (see, “Battle Damage – Savo Island”).
 
Another interesting observation is that ship size (displacement) seems to offer no enhanced survivability or resilience, contrary to what one might expect.  This is likely a massive condemnation of the thinness and weakness of modern ship construction materials and design.
 
Also note the large number of bombs and missiles that failed to explode.  This should serve as an eye opener for those who believe, against all of history, that modern weapons are unerring, infallible, certain-kill, wonder weapons.  The reality is that most modern weapons will perform surprisingly (surprising only to those who do not follow this blog) poorly.
 
I had intended to include some examples of ships that took a hit and continued to function but I was unable to come up with any.
 
 
Conclusion
 
It seems obvious that, just as we believed, modern ships are weak and unable to sustain even the slightest degree of damage without being sunk or immediately rendered a mission kill.  Modern navies have completely forgotten how to design WARships.  The US is not alone in this ill-considered trend.  This is a perfect example of the entire world agreeing about how to build a modern navy ship and the entire world being wrong (similar to the pre-WWII battleship debate – everyone agreed and everyone was wrong).
 
 
Note:  It is likely that I’ve inadvertently omitted some examples.  Feel free to offer them in the comments.

Amphibious Construction Battalion 2 Eliminated

The Navy is deactivating Amphibious Construction Battalion 2 (ACB).[1]  The ACB was tasked with supporting amphibious landings by providing engineering support for causeways, cranes, and ferries among other duties.  ACB 1 is still being maintained although, apparently, at greatly reduced manning levels.[1]
 

The Navy decided in July to deactivate the battalion after the elevated causeway system — a modular pier stretching up to 3,000 feet to provide logistic support to Marine Corps and Joint Expeditionary Forces — was removed from the command’s Table of Allowance.[1]

Elevated Causeway System

  

I don’t necessarily have a problem with deactivating the unit as I see very little realistic need for amphibious landings in the foreseeable future.  However, the move does raise a few questions. 

1. If the elevated causeway system has been eliminated, how will supplies get from ship to shore?  We seem to be early retiring the MLP/AFSB so one has to wonder how sustainment materiel will get to shore.  Have we pigeon-holed ourselves into only fighting/sustaining from secure ports?  In today’s world of multi-thousand mile missiles, there are no secure ports!
   
   
2. This is yet another indication that the Marines, the Navy, and the military are out of the amphibious assault business.  If that’s the case, why are we still building multi-billion dollar amphibious ships?
   
   
3. If ACB 2 serves no purpose, why maintain ACB 1?

More generally, the Marines – and the military, in general - are eliminating lots of units and capabilities and I don’t see any corresponding establishment of new combat capabilities to replace them other than the completely unproven and, thus far, demonstrably combat-incapable unmanned fad.
 
I’ve long stated that the Marine’s core mission should be port seizure and this is yet more proof of that need.
 
 
 
____________________________

 
[1]Stars and Stripes website, “Navy Seabee battalion honored in decommissioning ceremony after 80 years of building and fighting”, Caitlyn Burchett, 3-Mar-2023,
https://www.stripes.com/branches/navy/2023-03-03/gator-bees-decommissioning-9334218.html

Impact of Overhead on Shipbuilding Cost

Shipbuilding costs have skyrocketed, generally exceeding the rate of inflation, exceeding all reasonable expectations, and blowing away all historical precedents.  The reasons for this cost explosion are many and not always obvious.  Unfortunately, the lack of obvious reasons leads to simplistic, sensationalistic explanations among naval observers and, disappointingly, they are largely wrong. 

 

One of the most common complaints/explanations is that the shipbuilding industry, in cahoots with government and corrupt admirals, is rife with fraud and if we could just eliminate the fraud, shipbuilding costs would drop precipitously.  While this explanation makes for a compelling and, in a sense, satisfying (because we have an identifiable ‘villain’) story, it is unsupported by any significant body of evidence and fails to stand up to analysis.  This is not to say that a degree of corruption and fraud does not exist but it is not responsible for the magnitude of the cost increases we see on every new shipbuilding project.

 

A far more significant explanation for runaway costs is simple overhead.  We’ve previously covered this in depth (see, “Shipbuilding Costs – Impact of Low Volume”) but it warrants some follow up.  For those who may not be familiar with the basics of accounting and cost allocation, the following is a brief and grossly simplified explanation of overhead.

 

A product’s cost is the sum of two components:  direct costs and overhead costs.

 

cost = direct + overhead

 

Overhead is the cost of business not specifically and directly related to producing a product. 

 

For example, regulatory compliance costs (diversity, gender, environmental, maternity leave, etc.) are necessary costs (are they really?) but they are not directly related to the cost of production.  A department of lawyers or accountants provide no direct contribution to production but their cost is indirectly included.  Taxes must be paid on land and facilities but they have no direct relation to production.  And so on.

 

Direct costs, on the other hand, include raw materials, cranes, assembly facilities, and labor.

 

So, again, a product’s cost is the sum of direct costs plus overhead. 

 

cost = direct + overhead

 

Seems simple enough, right?

 

The thing is, direct costs are fixed whereas overhead is variable.  I know, you think overhead is also fixed but we’re going to demonstrate that it’s not and we’re going to demonstrate how/why that variation impacts shipbuilding cost.

 

As an illustrative example, let’s pretend there’s an item that has $100 of direct costs to produce, regardless of the time required.  Let’s further assume that the overhead costs are $100/yr.

 

If that item takes us one year to produce then the total cost is

 

cost = direct + overhead

cost = $100 + ($100 * 1 yr)

cost = $100 + $100

cost = $200

 

Now, let’s suppose that item takes us two years to produce.  The total cost becomes

 

Cost = direct + overhead

Cost = $100 + ($100 * 2 yr)

Cost = $100 + $200

Cost = $300

 

Now, let’s suppose that item takes us five years to produce.  The total cost becomes

 

Cost = direct + overhead

Cost = $100 + ($100 * 5 yr)

Cost = $100 + $500

Cost = $600

 

Wait a minute, how can the costs vary widely if it’s the exact same item with the exact same direct cost?  It’s the overhead, of course.  More specifically, it’s the time required to complete the item;  the longer the time, the more overhead that has to be applied to the item’s final cost.

 

Now, suppose that the item is a US Navy aircraft carrier that has $10B of direct cost to produce and the shipyard has an additional $1B of overhead per year.

 

If the yard could build the carrier in one year, the total cost would be

 

Cost = direct + overhead

Cost = $10B + ($1B * 1 yr)

Cost = $10B + $1B

Cost = $11B

 

In reality, we have historically produced a carrier in four to five years (we’ll call it five) which makes the total cost

 

Cost = direct + overhead

Cost = $10B + ($1B * 5 yr)

Cost = $10B + $5B

Cost = $15B

 

However, the Navy sometimes stretches out the build times to around seven years which makes the total cost

 

Cost = direct + overhead

Cost = $10B + ($1B * 7 yr)

Cost = $10B + $7B

Cost = $17B

 

We see, then, that the carrier could cost anywhere from $13B (3 yr build time) to $17B (7 yr build time), depending on the build time and the number of years of overhead that have to be applied.

 

Why does overhead have to be applied?  A company does not produce products for free.  It has to pass on all its costs to the buyer.  Therefore, the overhead accumulates, year after year, for every year that it takes to build the carrier and, at the end, the total accumulated overhead gets dumped on the carrier and the Navy/taxpayer pays the cost.

 

Now, let’s take a look at the actual build times for Navy aircraft carriers, as shown in the table below. 

 

 

Carrier Build Time, yrs Laid to Commissioning
CV-63 Kitty Hawk	5
CV-64 Constellation	4
CVN-65 Enterprise	3
CV-66 America	4
CV-67 Kennedy	4
CVN-68 Nimitz	7
CVN-69 Eisenhower	7
CVN-70 Vinson	7
CVN-71 Roosevelt	5
CVN-72 Lincoln	5
CVN-73 Washington	6
CVN-74 Stennis	4
CVN-75 Truman	5
CVN-76 Reagan	5
CVN-77 Bush	6
CVN-78 Ford	8

 

 

We see that build times went from 3-5 years, pre-Nimitz, to 5-8 years.  That means that recent carriers are being hit with 2-5 years of added shipyard overhead.  Of course the total cost is going to increase and increase substantially! 

 

Someone with too much time on their hands is going to point out that the shipyard likely has other work and 100% of the yard’s overhead isn’t dumped on a single carrier.  That is true, of course, however, for our simplified discussion, the concept is valid and substantially correct.

 

While it may be satisfying and cathartic to blame all our shipbuilding cost problems on fraud and corruption, the reality is that those are minor factors.  Overhead is a much larger factor and may well be the main culprit.  Of course, without an itemized breakdown of the production costs, I can’t say for sure.

Battleship Delivery

Here’s a quick, fun item …

 

How many battleships did the US build during WWII?  Several, maybe a dozen?  This may shock you but the answer is zero.  We didn’t produce a single battleship during WWII.

 

What???  That can’t be true!  We built the North Carolina, South Dakota, and Iowa classes, right?  Wrong!  Only 8 battleships were commissioned during WWII and all of them began building (laid down) before the war started.  In other words, we were unable to start and finish a single battleship during the war.

 

Following is a list of the BBs commissioned during the war.  Note that they were all laid down pre-war.

 

 

	Laid Down	Commissioned
South Dakota	5-Jul-1939	20-Mar-1942
Indiana	20-Sep-1939	30-Apr-1942
Massachusetts	20-Jul-1939	12-May-1942
Alabama	1-Feb-1940	16-Aug-1942
Iowa	27-Jun-1940	22-Feb-1943
New Jersey	16-Sep-1940	23-May-1943
Missouri	6-Jan-1941	11-Jun-1944
Wisconsin	25-Jan-1941	16-Apr-1944

 

 

 

We only started (laid down) 2 battleships (Illinois and Kentucky) during the war.  Neither was finished and both wound up being scrapped prior to completion when the war ended.

 

In contrast, 19 fleet carriers commissioned during WWII and 16 of those were laid down during the war.

 

No particular point to this post, just a fun fact!