Shipbuilding Crisis Continues
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Shipbuilding Crisis Continues


Shipbuilding Crisis Continues

Despite positive steps taken by the US Chief of Naval Operations (CNO), shipbuilding remains in a critical state. By fencing the Ship Construction Navy (SCN) budget and laying out a 30-year ship construction blueprint, the CNO has taken two dramatic steps essential to stability and efficiency for both the Department of the Navy and the industrial base. However, there are serious problems in the execution of this plan. If these problems are not recognized and resolved soon, shipbuilding will slide back into a morass of unrealistic expectations and budget overruns that will lead to inadequate force structure.

The 30-year plan is not constructed with a view toward shipbuilding efficiency. Advice from industry was not sought in constructing the plan. The significant advantages of batch procurement (buying several ships in the same budget year rather than spreading them out over several years, a lesson from the 1980s) have not been incorporated. The Department of the Navy could get more ships for less money. Even with a redesigned plan, there are funding shortfalls if the goal of 313 ships is to be achieved.

The move toward over-reliance on contracting on a “cost plus” basis is fraught with peril. For the Navy customer, it seriously reduces internal discipline in introducing new requirements, confounds accurate budget planning, and circumvents the necessity of careful packaging of preplanned improvements in the construction process. It also encourages laxity on the part of contractors in properly managing costs. These are more lessons from the DDG, CVN, LHD, and SSN programs of the 1980s. Cost-plus contracting might be appropriate for new combat systems, but ships are multi-year construction projects that are not amenable to the use of this contracting method in other than “medium- to high-risk” endeavors such as the lead ship of a multi-year program.

It has been suggested to form an industrial advisory team and rework the 30-year shipbuilding plan addressing the following:

  • Re-examine actual funding requirements and campaign for SCN funds to meet those requirements. Lobby for a realistic funding profile significantly greater than current projections. This will require building consensus that naval forces will play a major role in future overseas presence and crisis control.
  • Begin, and then maintain, a modernization and service life extension program for select surface combatants.
  • While improvements to current contracting policies might be appropriate, review the painful lessons of the past before committing to over-reliance on “cost-plus” contracting for ship construction.
  • Draw on the lessons from the 1980s in contracting for multi-year ship production and instilling discipline as new requirements and improvements are added.
  • Take a hard look at actual Marine Corps forcible-entry requirements and develop a practical mix of black and grey hulls.  

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