Foreign Shipbuilders

Yet another data point for those who believe that foreign shipbuilders produce better, faster, and cheaper ships.
 

Belgium’s long-running plan to replace its ageing M-class frigates has entered a new and potentially consequential phase. Defence Minister Theo Francken has publicly stated that the joint Dutch-Belgian frigate programme is moving “completely in the wrong direction” on both delivery dates and price …[1]
 
… following a previous extension, recent signals point to further delays of two to three years.[1]

To be clear, this program is in the design phase, not actual construction but design is part of the build and the design costs and schedule delays are real.
 
 
 
________________________________

 
[1]Naval News website, “Belgium Eyes ASWF Alternatives as Damen Timeline and Costs Soar”, Tayfun Ozberk, 21-Jul-2026,
https://www.navalnews.com/naval-news/2026/07/belgium-aswf-frigate-alternatives-damen-delays/

A Prototype, Subsidized, Convertible, Merchant Ship

Logistics will be a major issue in a war with China.  Of course, logistics are a major issue in any war so that wasn’t exactly the world’s most earth-shaking statement, was it?  Nevertheless, it’s true.  Now, what does the Navy/nation lack in regards to China war logistics?
 
Well, we lack a large, ready merchant fleet to carry supplies to Guam, Taiwan, Japan, etc.
 
Moving on to a seemingly unrelated topic (which you know we’re going to directly relate to shortly!), we’ve discussed ship prototypes and the Navy’s near total unwillingness to explore ship designs, tactics, and CONOPS via the use of prototypes (see, “Prototypes”).
 
So, to summarize … we lack a merchant logistics fleet and we don’t make use of prototypes.  Could those two things be related?  Of course they are!
 
One major advantage China has over us is that all their merchant ships are constructed with military adaptations built in.  In a war, China will have an easily convertible merchant fleet available for military use.
 
Here’s thought … why don’t we copy China for once and build a military-convertible merchant fleet?
 
Let’s start with a single prototype, funded by the government.  It would be a merchant ship that has military adaptations and ‘convertibility’ built in.  We could try it out by practicing rapidly converting it to military use (troop transport, military supply transport, military vehicle transport, oiler, or whatever other use we might need). 
 
Once we debug and prove out the concept, we can embark on a production program in which the government subsidizes (or totally pays to build) a convertible merchant ship and then loans/leases it to commercial shipping companies with the agreement that they maintain it to acceptable standards.  If war arises and we need it, we have a well maintained, readily convertible, military logistics fleet and if war does not occur during the ship’s lifespan, the commercial shipping company gets a nearly free ship to use.  Win, win.
 

Logistics Fleet in Waiting?

This potentially solves multiple problems. 

• We establish a well maintained, readily convertible logistics fleet.
• We strengthen our commercial shipping industry.
• We increase demand for new merchant ships and encourage the growth of our shipbuilding industry while possibly gaining new shipyards to meet the increased construction.
• The Navy/government gets a fleet of ready logistics ships while off-loading the yearly operating costs to the shipping industry.

Note:  I have no idea what the exact degree of subsidies or specific loan arrangements would be.  That would require an economic analysis that I lack the data to conduct.  Someone would have to work that through to see what makes sense.
 
Thus, for a minimal initial outlay (subsidy or total construction cost), the Navy gets a modern, ready, reserve fleet of logistic ships and our shipping and shipbuilding industries get a much needed boost.  Ideally, we’d simultaneously revamp our shipping-related laws and regulations to further encourage domestic shipping but that’s another topic.
 
Here’s some example merchant ship construction costs in FY22 dollars.
 
Dry bulk                        $49.6 million
General cargo               $17 million
Container                      $68.2 million
 
As you can see, these are almost free relative to typical Navy ship costs!  We could buy 71 container ships at $70M apiece for the cost of a single $4B Zumwalt.
 
The key to this concept is to build a single prototype and use it to learn how to best design a ship for rapid wartime conversion.  With that knowledge in hand we can then begin a production program that benefits both the military and the shipping industry.  That’s a lot of benefit for very little money!
 
Of course, none of this addresses the issue of manning those ships during war but, again, that’s a different topic.

US Commercial Ship Delivery Data

Here’s just a bit of data about commercial ship deliveries. 

 

For the six year period 2015-2020, inclusive, US shipbuilding delivered 30 large ships ranging from 26,410 to 53,400 DWT.[1]  Contract costs ranged from $125M - $255M.  The builders were:

 

• Keppel AmFELS, Brownsville, TX
• NASSCO, San Diego, CA
• Philly Shipyard, Philadelphia, PA
• VT Halter Marine, Pascagoula, Mississippi.
• Bay Shipbuilding, Sturgeon Bay, WI

 

 

Ship Deliveries 2015-2020
Container/RORO	10
Dry Bulk	1
Offshore Rig	1
Product/Chemical Carriers	18

 

NASSCO Orca Class Ro-Ro

 

 

I was slightly surprised to learn that some thirty to forty smaller craft, such as tugs, tows, barges, and the like are delivered each year from a multitude of shipyards.

 

 

 

________________________________

 

[1]http://shipbuildinghistory.com/statistics/currentcommercial.htm

Define Progress?

We all know what progress is, right?  It’s when we can do things better, faster, with fewer problems, and using less manpower, right? 

 

Well, consider this case of apparent progress in trying to build ships in the face of labor (skilled trades) shortages.

 

HII’s Newport News Shipbuilding officials say a technology transition, years in the making, is helping them fight back against a difficult labor market.[1]

 

The national labor shortage brought on by the coronavirus pandemic has been felt by most industries across the country, and shipbuilders are no exception. One of HII’s chief competitors in the world of US Navy shipbuilding, General Dynamics, told Breaking Defense in February that people were the company’s “biggest challenge” at its San Diego-based shipyard.[1]

 

So how is our shipbuilding industry dealing with labor shortages?  As one example, HII’s Newport News Shipbuilding claims that it is using computer technology to 3D design ships better, faster, with fewer problems, and using less manpower.  Of course, every ship and aircraft program for the last four decades has made that claim and yet each program has been over budget, delayed, and problem plagued, seemingly worse than the previous one, so where’s the actual progress?  In contrast, shipbuilding programs in the ‘40’s – ‘70’s had to crawl along without the benefit of computers and yet they were generally on time, on budget, and reasonably problem free.

 

So, what’s different about today’s Newport News Shipbuilding computer benefits claim?  Well, as they tell it,

 

When HII puts the latest USS Enterprise (CVN-80) in the water later this decade, it will be the “first time in our history, and I believe in the Navy’s history, that the ship isn’t just designed in a 3D [computer-aided design] tool, but now we’re taking that 3D information and putting it on to a digital device and allowing our shipbuilders to build with that,” said Brian Fields, NNS vice president for the aircraft carriers Enterprise and the next aircraft carrier to be built, the Doris Miller (CVN-81).

 

I think we’ve been doing exactly that for quite some time now and yet not only has nothing gotten better, our shipbuilding performance has gotten demonstrably worse. 

 

Setting the semantics, accuracy, and veracity of HII’s claim aside, what happens if we actually achieve our goal of being able to build ships with less people?  Has anyone thought that through?  What are the long term implications of adapting to, and even encouraging, smaller and smaller work forces?  What are the implications of that trend as it relates to war?

 

As we strive to build ships with greatly reduced labor pools, are we forgetting to ask ourselves what will happen when, after years of adapting to labor shortages and learning to build without people, we find ourselves in a war and suddenly need huge numbers of people to manually build and repair ships?

 

Repairing battle damaged ships is not something that can be done with computers and utilizing an automated, robotic assembly line.  Battle damage repair is mostly a manual exercise in demolition and creative, custom repair work.  It’s all about trying to figure out how to reach and cut out that damaged piece of equipment, remove it from the ship, and replace it.  It’s about trying to jury-rig a repair that was never part of the original design.  It’s about trying to route cabling and ducting around a damaged area.  None of that is in any computer program.  That’s on-the-spot creativity and manual labor that requires … bodies … lots of bodies … lots of skilled bodies.  It’s the exact opposite of trying to build ships with fewer people which is what we’re pushing for today.

 

If we can anticipate wartime scenarios where it will be critical to have lots of bodies, why are we trying to solve our shipbuilding challenges by adapting to smaller labor pools?  Shouldn’t our direction and focus, as a matter of national strategic imperative, be on significantly increasing the size of the work force in anticipation of wartime requirements instead of adapting to smaller labor pools?

 

I understand that, from the shipbuilder’s point of view, it makes total economic sense to adapt to smaller work forces.  Indeed, a smaller work force means larger profits for the builder.  However, as pointed out, that drive is at odds with the larger national strategic imperative.  This is a case where we need to recognize the requirement and demand – and, if necessary, subsidize – larger work forces as a matter of national security. 

 

Of course, larger work forces won’t happen overnight but, if we don’t make it a priority, it won’t happen at all.  Our society has so thoroughly indoctrinated high school students and educators with the belief that if the students don’t go to college then they’re failures, that our students can’t even conceive of a career in the trades.  As a society, we have ignored the reality that college is not appropriate for everyone and not everyone is suited for college.  We need to implement robust trades programs (they used to be called vocational education) in our high schools with direct feeds into our shipbuilding industry.

 

Taking the manpower issue further, what happens when our vaunted 3D computer design software and computer networks are cyber attacked and rendered useless (you don’t think China is going to sit back and let us build warships unhindered, do you?)?  We’ll be back to manual labor, lots of it, and we’ll be lacking the required labor pool because we spent the preceding years learning how to build ships with fewer and fewer people, not realizing that we were creating future problems by accepting and embracing a shrinking labor force.  Instead of accepting a shrinking labor force we should be actively and frantically working to enlarge it.  We’ve discussed ways to do that would be successful.  No, it won’t happen overnight but it must be done.

 

We’re proudly congratulating ourselves on our ability to adapt to ever smaller work forces and, indeed, companies are pushing in that direction because they see it as a way to reduce labor costs.  But is that wise?  There are times when near term efficiency becomes counterproductive in the long run and this is an example of that.

 

It’s analogous to the Navy’s push for minimal manning.  It sounds good from a business case perspective but it’s a horrible policy as regards combat since minimal crews have no ability to absorb attrition due to combat casualties and no ability to perform damage control which has led to the recent development of intentional one-hit-abandon-ship designs.  It also negatively impacts ship maintenance which is a poor business case result – no one factored that totally predictable result into the business case, did they?

 

The manpower issue is similar to the shipbuilding industry consolidation that occurred over the last several decades.  Yes, the surviving companies became more efficient, however, that consolidation drive led to long term shipbuilding capacity limitations and lack of competitiveness which, ultimately, drove up ship prices.  Our short term consolidation solution led to long term capacity and cost problems.  We are solving today’s short term labor shortage problems with solutions which will lead to long term problems in the future.

 

Is it really progress when your short term solution is creating larger problems for the future?

________________________________________

 

Yorktown Battle Damage Repair

 

The USS Yorktown was badly damaged at the battle of Coral Sea.  The repair time was estimated at 90 days.  However, Yorktown was desperately needed for the looming battle of Midway.  Yorktown sailed for Pearl Harbor where a repair crew of over 1400 workers swarmed the ship and completed repairs sufficient for combat in 3 days.  Yorktown immediately departed for Midway.

 

For an excellent write up, see [2].

 

Some of Yorktown's battle damage.

You can't repair this with a computer program.

 

 

________________________________________

 

[1]Breaking Defense, “The labor shortage hit shipyards hard. Can technology help Newport News bounce back?”, Justin Katz, 31-Aug-2022,

https://breakingdefense.com/2022/08/the-labor-shortage-hit-shipyards-hard-can-technology-help-newport-news-bounce-back/

 

[2]https://www.defensemedianetwork.com/stories/youve-got-three-days-repairing-the-yorktown-after-coral-sea/

The 2020 National Defense Authorization - Senior Technical Authority

Today, we're going to look at a new, little noticed provision in the law that is a potential game changer impacting how the Navy conducts shipbuilding programs.  We previously noted that Congress has, at long last, begun to exercise its oversight responsibilities over the Navy (see, “Congress Is Doing Its Job – Why Isn’t The Navy?”).  Now, we’ll take a look at what Congress has enacted into law in an attempt to control the Navy’s repetitive shipbuilding fiascos.  Specifically, the 2020 National Defense Authorization (NDA) Act mandates that the Navy provide a ‘Senior Technical Authority’ (STA) for each new naval vessel class undergoing acquisition and prohibits the Navy from funding lead vessels until the class has been certified the by the STA as described in

“10 U.S. Code § 8669b - Senior Technical Authority for each naval vessel class”

New vessels includes both new classes and new ‘flights’ or blocks of existing classes as defined in definitions section of the Code 10/d/(1)/B: 

(i) a substantially new class of craft (including craft procured using “new start” procurement); and

(ii) a class of craft undergoing a significant incremental change in its existing class (such as a next “flight” of destroyers or next “block” of attack submarines).

The Code also notes that the definition applies to both manned and unmanned vessels.

Thus, Congress is looking to exercise oversight on all new or significantly altered ship construction.  The latter is important as it closes one of the Navy’s favorite loopholes for getting around already established oversight controls by claiming that essentially brand new ships are just modifications (flights or blocks) of existing ships.  The new Burkes (Flt III) and the new LX(R) amphibious ships (now LPD-17 Flt II) are examples of the Navy’s attempts at evading Congressional oversight.

This legal requirement is the result of the Navy’s cumulative and systematic naval vessel acquisition failures (Ford, LCS, LPD-17, Zumwalt, etc.) over the last few decades.  Congress’ intent is to force the Navy to exercise better program management.  The question is, what is a ‘Senior Technical Authority’ (STA) and what will they do?

The full text of the relevant U.S. Code can be found in reference 1.

The following are some passages from the Code to help us try to understand what the STA is, and will do.

Senior Technical Authority – As described in the Code text below, the key characteristic of the STA is that it is a person who is independent of the acquisition program chain-of-command.  The hope is that this will free the person from Navy pressure and allow the STA to make decisions free of command influence.  It is also worth noting that the person would be a Senior Executive Service member which is the civil equivalent to military flag rank.  Again, the hope is that this will allow the person to act independently and free of influence.

(2) Individuals eligible for designation.—Each individual designated as a Senior Technical Authority under paragraph (1) shall be an employee of the Navy in the Senior Executive Service in an organization of the Navy that—

(A) possesses the technical expertise required to carry out the responsibilities specified in subsection (b); and

(B) operates independently of chains-of-command for acquisition program management.

Responsibilities - STA shall establish, monitor, and approve standards for the vessel class.  Exactly what types of standards and what level of detail this refers to is not spelled out.

Each Senior Technical Authority shall be responsible for, and have the authority to, establish, monitor, and approve technical standards, tools, and processes for the class of naval vessels for which designated under this section in conformance with applicable laws and Department of Defense and Department of the Navy policies, requirements, architectures, and standards.

Standards aside, the main responsibility of the STA is to certify new construction as being ready for production.  The certification process and actions are described below.

• Description of engineering and technology risks
• Designation of critical technologies
• Test plan approval dates
• Technical objectives and demonstrated performance
• Determination that knowledge objectives are achievable prior to detail design and construction
• Certification that test plans are effective
• Other risk reduction efforts
• Certification that each critical system has been prototyped or proven via identical components
• Certification by SecNav that test plans are fully funded in future years
• STA will approve, in writing, ship specifications before Request For Proposals for detail design and construction.  This is an attempt to prevent concurrent development and production.
• Certification process must be complete 30 days prior to first funding of the lead vessel.

While some of the details, such as the exact type of standards that the STA will establish are not explicitly spelled out, the intent of the law seems quite clear.  Congress is attempting to prevent future concurrent development and production fiascos and intends to withhold funding until an independent overseer, the STA, certifies that the vessel is ready for production.

Okay, that’s clear enough.  What remains to be seen is how the Navy will respond.  We’ve seen a consistent pattern of the Navy ignoring or working around Congressional intent for the last few decades (recall that Congressionally mandated shipbuilding plan that is now long overdue and the Navy continues to ignore the law?) so it is unlikely that the Navy is going to meekly accept Congressional oversight.  Instead, the Navy will find workarounds, loopholes or, failing that, will simply ignore the law.  In fact, we can already see the Navy trying to find loopholes and ways around the law.

… last year lawmakers mandated more careful ship design reviews in the Fiscal Year 2020 National Defense Authorization Act. Lloyd [Rear Adm. Jason Lloyd, the Navy’s chief engineer and the Naval Sea Systems Command (NAVSEA) deputy commander for ship design, integration and engineering] said the Navy is still working its way through that language, which requires that each class of naval vessel have a senior technical authority who is outside the chain of command – and therefore independent from influence for cost or schedule reasons, for example – who would be responsible for signing off on ship designs before they can move into the construction phase, among the senior technical authority’s responsibilities.

“We’re trying to work through that now, what that really means. That was kind of put in because there’s concerns with the fact that we may have built some ships before they were ready to be built. And we’re starting to see some of those issues come up as cost,” Lloyd said. (2)

Consider the Admiral’s statement, “We’re trying to work through that now, what that really means.”  The meaning is plain – it’s only the Navy’s plan to work around it that’s unclear, as yet.  The Admiral’s statement makes it clear that the Navy has no intention of being bound by any authority that isn’t under its direct control.  I have no doubt that an entire Navy legal task force is hard at work crafting workarounds and identifying loopholes with the objective of ignoring the legal mandate.

Do you, perhaps, think that I’m overstating the degree of the Navy’s willingness and intent to ignore the law?  Well, overwhelming precedent exists for my belief that the Navy will do everything it can to subvert Congress’ intent and the law.  Here's a few examples to jog your memory.

Ticonderoga Retirements – The Navy tried to early retire the Ticonderoga class and Congress intervened and instructed the Navy not to.  Despite Congress’ clear intent that the ships not be early retired, the Navy persisted in their attempts and eventually concocted the fraudulent ‘modernization’ scheme that had the effect of idling and early retiring half the Ticonderoga fleet (see, “Ticonderoga Class Modernization” and “Still Trying To RetireCruisers”).

Cost Caps – Congress imposed construction cost caps on the Ford and LCS.  Of course, the Navy simply ignored the caps, blew right through them, and then went to Congress after the fact and got the caps increased (see, “LCSCost Cap”).  When Congress ran out of patience and refused to further increase the caps after multiple increases, the Navy came up with the practice of partial deliveries of incomplete ships to meet the caps, followed by additional ‘second phase’ construction which did not count against the caps.

Carrier Numbers – The carrier fleet is legally mandated at 11 carriers.  The Navy simply ignored the law and reduced the carrier fleet below the legal limit when the Enterprise was retired, knowing full well that the Ford would not be ready for many years.  Further, the Navy has dropped the number of air wings to 9 which means we only have, at most, 9 active carriers.

Give the Navy's blatant disregard for the law, we see, then, that we have two considerations regarding this law:

1. What the legal statements dictate.

2. What the Navy thinks the legal statements allow them to get away with and to what degree the Navy will simply ignore the law.

The Navy has been operating above and beyond the law for many years and it is long past time for Congress to exercise their Constitutional oversight responsibility.  However, Congress needs to be prepared for a long battle since the Navy will not willingly accept oversight.  This law is an excellent start but I can’t help but wish that Congress had included criminal penalties in the law for SecNav and CNO failure to comply.

If the Navy would put the same energy, effort, and creativity into training and maintenance that they put into evading the law, we wouldn’t have any problems.

____________________________________

(1)https://www.law.cornell.edu/uscode/text/10/8669b

(2)USNI News website, “Columbia SSBN Program Doing Land-Based Testing to Avoid Past Shipbuilding Mistakes”, Megan Eckstein, 5-Aug-2020,

https://news.usni.org/2020/08/05/columbia-ssbn-program-doing-land-based-testing-to-avoid-past-shipbuilding-mistakes

Partial Delivery - Total Obfuscation

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. 

_________________________________________ 

(1)https://www.baesystems.com/en-us/article/u-s--navy-awards-bae-systems--192-million-contract-for-work-on-new-ddg-1000-ships

(2)http://usszumwalt.org/author/zumwalt1000/

(3)Congressional Research Service, “Navy LPD-17 Amphibious Ship Procurement:

Background, Issues, and Options for Congress”, Ronald O'Rourke, March 16, 2011, RL34476,

https://fas.org/sgp/crs/weapons/RL34476.pdf

(4)USNI News website, “Navy Battle Force Tally Dips By 2, After New Ship-Counting Rules Postpone Zumwalt Destroyers”, Megan Eckstein, 21-Aug-2018,

https://news.usni.org/2018/08/21/navy-battle-force-tally-dips-2-new-ship-counting-rules-postpone-zumwalt-destroyers

(5)Government Accounting Office, “Navy Shipbuilding”, July 2017, GAO-17-418, p.22

https://www.gao.gov/assets/690/685799.pdf

Defective F125 Frigate Returned To Builder

We complain about the incomplete and, in some cases, damaged ships that the Navy accepts from the builders and we wonder why they don’t enforce any warranty repair actions (turns out that most shipbuilding contracts don’t have any warranties!).  We also wonder why every other country’s ships are better built than ours.

Well, the better built part is easy to explain – they aren’t!  We just are more aware of our ship’s problems because we have much more open information sources for our ships.  Other countries have the same problems but they just aren’t publicized.

Anyway, here’s a bit of news that addresses both the warranty and the quality of build issues.  Germany has just returned the lead F125 frigate to the builder, after delivery, for repair of defects found during trials – and there’s a lot of defects and they appear to be pretty serious.

Here’s some of the problems as reported by Naval Today website. (1)

• software and hardware issues
• problems with the frigate’s operations room
• listing problem - they list 1.3 degrees to starboard
• overweight

Here’s an amusing bit of related information.

“According to the German Navy, the new frigates will require only half the crew necessary to operate the Bremen-class frigates. They will be able to stay at sea for up to 24 months and thereby reduce the transit times for the crews. The crews will swap in regular intervals directly in the areas of operations which means that the ships will have to make fewer port visits.” (1)

Does that sound like the failed LCS program?  I anticipate that the German Navy will find the same thing we did – that minimally manned crews can’t perform well, will be overworked and undertrained, and ship maintenance will suffer.  Well, good luck to them.

F125 Frigate

Back to the main point …    Hats off to the Germans for sending a defective ship back to the builder.  Maybe their example will inspire the U.S. Navy to do the same.

It is also worth noting that this disposes of the myth that other countries build better ships than we do.  A lot of observers want the U.S. to buy and/or build foreign ships and use foreign shipyards.  I have no problem with that, in concept, but the reality is that no one is building problem-free ships.  We just document and hear about our problems more than other country’s.

________________________________

(1)Naval Today website, “Germany returns lead F125 frigate to builder, report”, 22-Dec-2017,

https://navaltoday.com/2017/12/22/germany-returns-lead-f125-frigate-to-builder-report/

Burke Class Cost Breakdown

Here’s an informational post on ship construction costs as typified by the Burke class.  Data is taken from the Navy’s Shipbuilding and Conversion budget submission for 2017 (1).

Burke Class Cost Breakdown

Planning                        $40M   2%

Basic Construction             $739M  44%

Change Orders                  $114M   7%

Electronics                    $173M  10%

Hull, Mechanical, Electrical    $81M   5%

Ordnance                       $508M  30%

Other                           $40M   2%

Total                         $1697M

From the detailed cost category breakdowns in the document, here are examples of the kinds of items included in each broad category.

Construction

• Basic hull and superstructure construction

Electronics

• SQQ-89 ASW
• SLQ-32 SEWIP
• IFF/TACAN
• CEC
• Navigation
• SLQ-25 Nixie
• Exterior Communication Systems
• Internal Networks

Hull, Mechanical, Electrical

• STC 3 IVCS
• Main Reduction Gear
• Machinery Control System
• Integrated Bridge Navigation System

Ordnance

• Aegis
• SPY-6 AMDR
• Mk 41 VLS
• Mk 45 5” Gun
• Mk 37 Tomahawk Control System
• CIWS
• SPQ-9B
• Mk 32 Torpedo
• EO System
• Mk 160 Gun Fire Control System

We see that the major cost, by far, is the basic physical construction of the shell of the ship, meaning the hull and superstructure.  This makes up 44% of the total shipbuilding cost.  This also gives lie to the oft repeated “truism” that “steel is cheap and air is free”.  In fact, it’s clear that steel is not cheap and air is not free – not even remotely.  All the people who casually call for a little bigger ship because the added steel is cheap, are wrong.  We’ve already discussed this topic (see, “Steel Is Cheap and Air Is Free”) and disproved it and this data simply adds more support to the recognition that steel is not cheap and air is not free.  Another “truism” dies!

Hand in hand with the claim that steel is cheap and air is free, is the claim that electronics make up the major cost of a ship.  As we see, electronics accounts for only 10% of the ship cost.  Aegis, oddly, is grouped under ordnance and costs around $220M.  That's around 13% of the ship's cost - not an insignificant amount but nowhere near the major portion of a ship's cost.  Another “truism” dies!

As a sidelight, from the same document, here are the Burke class unit costs for the last several years.  It is interesting to see the very wide variation in unit cost.  There is a very loose relationship between quantity and cost but I emphasize loose.  For example, the highest cost is not associated with the lowest quantity.  Of course, over that time frame the Navy has been tinkering around with the Flt III modifications so some variation could be due to that.  There were also restarts and partial technology insertions.  My tentative conclusion is that there likely is a quantity-cost relationship but that other factors outweigh and obscure the quantity effect.  The Navy’s recent practice of deferring major portions of construction until after delivery also obscure the true construction costs.

Year    Qty.  Unit Cost

2010  1  $2.133B

2011  2  $1.561B

2012  1  $1.904B

2013  3  $1.437B

2014  1  $1.731B

2015  2  $1.497B

2016  2  $2.253B

2017  2  $1.697B

As I said, this is just an informational post that sheds a bit of light on the cost contributors to the construction of a ship.

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(1) Dept of Defense 2017 SCN Budget, Exhibit P-5c, 2017 DDG-51, FY2017 data column

Ship Warranties

Apparently, Congress is just as sick of brand new ships breaking down and having no warranty to show for a billion-plus dollar investment as the rest of us are.  Congress has now inserted language in the 2017 National Defense Authorization Act requiring ship warranties.  Here’s the language.

Chapter 633 of title 10, United States Code, is amended by adding at the end the following new section:

Sec. 7318. 

Warranty requirements for shipbuilding contracts

(a) Requirement

A contracting officer for a contract for new construction for which funds are expended from the Shipbuilding and Conversion, Navy account shall require, as a condition of the contract, that the work performed under the contract is covered by a warranty for a period of at least one year.

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Update:

Reader Eric's comment below has prompted me to add the following.

No amount of warranty can compensate for the failure of responsibility by the Navy in accepting incomplete ships.  In fact, if the Navy (NAVSEA) were doing their job correctly and actually insisting that the ships be delivered in a complete and tested condition, a warranty wouldn't even be all that necessary!  

Shipbuilding Buying Power

I’ve long had the sense that carriers and ships, in general, are becoming more expensive on a relative basis and, if true, I can’t explain why.  The basic modern carrier hasn’t changed much since the Nimitz was built.  Yes, the design is continually being tweaked with rearrangements of gear and whatnot but that would have no major impact on the cost of a ship.  So, is the carrier more expensive today, on an inflation adjusted basis, than it used to be?  Here’s some data.

Carrier             Cost    Year          Inflation Adj.

CVN-69 (Eisenhower) $679M (FY1970) (4) /  $4.2B (FY2016)

CVN-72 (Lincoln)    $4.7B (FY2010) (5) /  $5.2B (FY2016)

CVN-76 (Reagan)     $4.4B (FY1995) (2) /  $7.0B (FY2016)

CVN-77 (Bush)       $6.0B (FY2006) (2) /  $7.2B (FY2016)

CVN-78 (Ford)      $12.9B (FY2016) (3) / $12.9B (FY2016)

Note: Costs adjusted to FY2016 dollars using CPI Inflation Calculator

http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=6&year1=2006&year2=2016

Note:  Solid data is hard to come by for individual carriers.  Many sources cite a single, averaged price for the entire Nimitz class which is obviously not true for any individual member of the class.  My references for each cost cited are listed so you can check for yourself.

We see that the inflation adjusted cost of a carrier has risen steadily since 1970.  Given that the basic carrier hasn’t changed, the cost ought to have remained steady or even dropped due to the oft claimed, but almost never realized, serial production savings.  In reality, however, the costs have increased.  Why?  I have no good answer for that.

Here’s another way to look at it.  Below is the Navy’s annual shipbuilding budget (SCN) for 1986 and 2015 and their inflation adjusted 2016 equivalents along with the quantity of ships built under that budget.  You’ll instantly note the huge difference in quantity between the 23 ships that were built under the 1986 budget and the meager 9 ships built under the 2015 budget. 

On an average cost basis in 1986, we built 23 ships for $21.8B (infl. adj.) which is an average of $0.95B per ship.  Compare that to the 9 ships built under the 2015 $16.2B (infl. adj.) budget which is an average of $1.8B per ship.

Year  Qty            SCN             Inflation Adj. SCN

1986   23    $ 9.9B (FY1986) (1)  /  $21.8B  (FY2016)

2015    9    $15.9B (FY2015) (6)  /  $16.2B  (FY2016)

So, our shipbuilding buying power has decreased markedly.  The average ship used to cost $0.95B but now costs $1.8B.  That’s a doubling in inflation adjusted costs!!!!  Our buying power is vanishing!

Here’s yet another way of looking at it.  Interpolating the data, a single carrier in 1986 would have cost around $6B from an annual shipbuilding budget of $9.9B in 1986 dollars.  Thus, the carrier consumed 61% of a single year’s shipbuilding budget back then.  Today, a carrier costs $12.9B from an annual shipbuilding budget of $16.2B, consuming 80% of the budget.  Our aircraft carrier buying power has decreased.  It takes more of the budget to buy a carrier – 80% now, versus 61% then. 

Yes, the Ford is a departure, to an extent from the Nimitz and, therefore, costs more, you say.  While that’s true, we haven’t actually gained anything from the greater expense.  The Ford offers no improvements.  We’ve debunked the increased sortie myth.  The Dual Band Radar has been abandoned and offered no tactically useful benefit, anyway.  The EMALS catapult, if it works, offers no actual advantage and is an unshielded electromagnetic beacon which is a significant liability.  The AAG arresting gear also offers no advantage.  In terms of buying power, we’ve spent enormously greater money on the Ford for little or no gain.  That’s a huge loss in buying power.

This post is not just about the Ford.  The trend in decreasing buying power for both ships, in general, and carriers, in particular, was evident before the Ford.  This general loss of buying power is the point of the post. 

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(1)CBO, Future Budget Requirements For The 600-Ship Navy: Preliminary Analysis, Staff Working Paper, April 1985

(2)Congressional Research Service, “Navy CVN-21 Aircraft Carrier Program:

Background and Issues for Congress”, Ronald O’Rourke, 17-Jan-2007

(3)Congressional Research Service, “Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress”, Ronald O'Rourke, May 27, 2016

(4)Wikipedia, retrieved 25-Oct-2016,

https://en.wikipedia.org/wiki/USS_Dwight_D._Eisenhower

(5)Wikipedia, retrieved 25-Oct-2016,

https://en.wikipedia.org/wiki/USS_Abraham_Lincoln_(CVN-72)

(6)http://www.secnav.navy.mil/fmc/fmb/Documents/16pres/SCN_Book.pdf