DDG-1000 Politics Favors Ingalls, Not BIW

It is pretty clear that Susan Collins has no desire at all to be re-elected, because if she had any intention to be re-elected she would have been the most skeptical person in the room on Tuesday regarding the DDG-1000. Somehow she believes that Northrop Grumman Ingalls Shipyard in Mississippi has absolutely no chance to build any DDG-1000s in a competition. If that is true, she is making promises to Bath Iron Works she has no power at all to follow through on. Check this out.

With the help of some cheerful coaxing from a Maine senator, top Navy officials reaffirmed support Tuesday for the increasingly expensive, next-generation destroyer known as the DDG-1000.

As costs have grown, the ship has come under fire from several prominent House members. They have suggested halting production of the two vessels already purchased and, instead, buying more of the existing DDG-51 destroyer model, which is cheaper.

I missed the hearing, but the article almost makes it sound like the Navy was reluctant to defend the DDG-1000. One could only hope, Vice Admiral Barry McCullough is too smart not to realize this ship is going to put a real bind on the surface combatant fleet in the future due to how few ships are being built for so much money. I'm predicting it here, if the Navy builds all 7 DDG-1000s, they will get 7 fewer CG(X)s. Congress will laugh last if this program doesn't go perfect, you can bank it.

Essentially, the DDG-51 has become the default alternative to Congress. In the real world, the proposal by the good Congressman from Mississippi (Gene Taylor) would be a big boom for Susan Collins, because building more DDG-51s would almost certainly land contracts for Bath Iron Works. However, it looks like the Senator from Maine is making a bet, and I think it is a bad one at best.

Given that Bath also builds the DDG-51, it was unclear why Collins backs the DDG-1000 so strongly. But last month, the Congressional Research Service reported that, according to Navy estimates, building a DDG-1000 would take about 2 and a HALF times more shipyard labor than building a DDG-51.

I would love to see that CRS report.

If the DDG-1000 takes "2 and a half" times more labor to build, one would think that is an enormous red flag for those concerned about cost overruns. That means any delays could potentially increase the labor costs 2 and a half times more than a typical delay would for a warship, and first in class warships are notorious for those types of problems. In the world of Senator Collins the politician, higher labor costs is a good thing, in the world of Senator Collins who is supposed to represent the best interests of the United States of America in making decisions for a constrained budget Navy, uh...

But since what is best for the next election (not what is best for the Navy) is what is driving the Maine mafia, lets take a hard look at the data here. There are 5 DDG-1000s still yet to build if the program continues beyond two ships. If we assume that BIW builds 3 of the remaining 5 DDG-1000s, and no sole source contracts are issued, the amount of work using this new "2 and a half" metric equals building 7 and a half DDG-51s for BIW. Unfortunately, the DDG-1000 program is budgeted for sole source, and if the DDG-1000 stays sole source, the only way for the Maine mafia to win is for BIW to get all 5 contracts for DDG-1000. Is that a safe bet? I'm sure Chairmen Taylor of Mississippi will let that happen to Ingalls Shipyard in Mississippi, because he is in the majority and all, and Democrats would much prefer to side with a Republican right? What logic did she use to calculate what is happening here. Will a sole source contract be awarded to BIW for the DDG-1000? Probably not.

BIW is in trouble. Not only does the politics not favor their position, but the best case scenario is unlikely, and the most likely scenario can only score what amounts to only 7 and a half more DDG-51s worth of surface combatants work before they have to compete again for the CG(X), potentially a nuclear ship of which they are not a nuclear yard. Instead of 5 DDG-1000s, how many DDG-51s can the Navy get? 8? 10? 12? If the number is 8 or 10 clearly Susan Collins is looking after BIW, but if the number is 12, she should be pushing for a build of 8 for BIW and 4 for Ingalls deal, because that is clearly a better deal for BIW than what the DDG-1000 offers. That also compromises with Gene Taylor, because 4 DDG-51s for Ingalls keeps them in the mix for the possibility of a DDG-51 based CGN. I don't find her position here very strong, or very smart, picking fights isn't how she is going to help BIW and quite frankly, she doesn't seem to understand she is no longer in the majority when her way was the first consideration.

I still don't think the DDG-1000 is going beyond 2 ships though, so a lot of this might be mute. The DDG-1000 does not fit into the maritime strategy, there is no role in the maritime strategy that calls for what the DDG-1000 is bringing to the fleet. The ship puts the entire surface combatant force out of balance, and that isn't even accounting for what a cost overrun issue would look like for the DDG-1000. Not a pretty picture.

The 313-ship plan doesn't change until the DDG-1000 is canceled, and the DDG-1000 will never be canceled by the Navy while the mastermind of the 313-ship plan is the CJCS. The best BIW can do under the current plan is "7 in a half" more DDG-51 equivalents by our count, and that isn't much work. However, with the DDG-1000 consuming so much of the shipbuilding budget, the Maine mafia is looking for their piece of the pie. So where is this heading? The long dark road to disaster, at the end of the day both the House and the Senate, not to mention the Industry, all need more options, because the current designs on the table either shift cost issues to the short term shipbuilding budget or the long term operating budget, and the Navy really can't afford either approach. Everyone is at fault here, someone should be asking for alternative designs. The industry should be supporting that call for alternative designs, particularly BIW who needs more options for work, why are they not pushing their representatives to ask the questions?

Think about what BIW is doing by not pushing their representatives to ask for more options. They have basically traded the construction of 24 Oliver Hazard Perry class ships for what amounts to the possibility of building a few LCS hulls and up to 3 more DDG-1000s. If there was a frigate alternative out there on the table, which shipyard do you think would be in the discussion for building it?

Without alternative designs, the Navy has less control over alternatives and no "Plan B" for cost overruns. No "Plan B" allows Congress to manipulate the message to their advantage for votes. No "Plan B" has the potential to squeeze out some yards leaving them no work, and BIW features predominately on that list. For all the talk of strategy for shipbuilding, anytime someone doesn't have a "Plan B", they don't have a strategy. For better or worse, the only person with a "Plan B" right now is Gene Taylor. The Navy and the Maine mafia needs to get to work on a "Plan B" of their own before his "Plan B" becomes the new "Plan A" for shipbuilding, unless of coarse that is what they both want and simply aren't saying it publicly. It's possible.