The following was the testimony in front of the House Seapower and Expeditionary Forces Subcommittee hearing on Thursday July 31, 2024 by Paul Francis, Director, Acquisition and Sourcing Management, Government Accountability Office.Thank you, Mr. Chairman, Mr. Bartlett, members of the subcommittee. I appreciate being invited here today to participate in the discussion of surface combatants. I'll ask for my written statement (PDF) to be submitted for the record.
Much of what I'm going to talk about today comes from a report we issued this morning (PDF) on the DDG 1000. At GAO, we have not analyzed the comparison between continued construction of the DDG 51 and the DDG 1000.
However, much of what I'm going to say today is going to address the likelihood and, rather, I would say, the unlikelihood that the Navy would have been able to execute the DDG 1000 program within its current budgets in terms of time and money.
Let me start off by saying that I think the Navy has done some really good things to manage the DDG 1000 program. I think their approach to technology development has been sound. I think their software development program has had a very good approach. And I believe their design process, which they modeled after the Virginia class submarine, has been much better than prior classes. But even with these best efforts, as the Navy stands to begin construction of the first DDG 1000, the cost and the design and the construction schedule are under strain. And let me give you some detail on that.
In the recent schedule for the program, they've extended the delivery of the ship by about one year, which I think is a good thing. But within that schedule, some key events have been pushed out two to three years. The net effect has been a lot of the margin in the construction schedule to adjust for likely problems has already been taken out.
For example, light off of the ship is a key event, and that's when you turn on all of your key ship systems; hull, mechanical and electrical; and all of your mission systems, combat systems, like your radars and the gun system and sonar. Originally on the DDG 1000, they were all going to be lit off in 2011. Now that's been split into two. Now the ship will be lit off in 2011 but the combat systems will be lit off in 2013, two years later. The significance of that is it's just before sea trials begin, so the margin between turning on the combat systems and beginning sea trials has been compressed. The integrated power system that provides the electricity and the propulsion for the ship. Originally, the plan was to test that on land in '08, install it on the ship in '09, and then have that ready two years in advance of lighting the ship off.
The current plan now is to install on the ship in '09 but not complete the testing until 2011. So the test of the integrated power system will follow installation by two years, so that problems discovered will have to be retrofitted onto the ship. And again, when they have those test results it'll be just when they're ready to light off.
Regarding Dual-band radar: the original plan on that was to have both a multifunction radar and the volume search radar tested and installed on the deckhouse before the deckhouse was shipped from Gulfport to either one of the yards. Now the current plan is only to put the multifunction radar in the deckhouse first. The volume search radar has slipped from 2010 to 2013. They won't put the volume search radar on the ship until it's already afloat. And again, that'll be just before light off.
And finally, software has also slipped three years. So originally we were going to have the software in 2010. Now it'll be 2013. Again, the significance of that is the software, the volume search radar and the light off are all going to occur in 2013. So there really is no margin for error in the schedule.
Now, I look at these as practical, sensible decisions the program office has to make because the combat systems have been delayed. They're not going to be there. But I think the question for oversight is as, just before we've begun construction, it seems like we've executed all the workarounds that you would normally execute during construction. And so the question is where does that leave us when we do run into problems in construction. And I think they will result in needing more time and money.
In the area of money, the ship construction budget is $6.3 billion for both ships. I think that's unlikely to be enough to pay for the ships. Our historical analysis of lead ships is they overrun by about 27 percent. Most of that cost growth occurs in the second half of construction. Even the Pentagon's independent cost estimates say those two ships are going to cost almost $900 million more than the Navy estimates. Being a little bit more specific, the Navy has about $363 million left in unobligated money. That's money that's not under contract. Yet a couple big things are not under contract yet, including the volume search radar and some of the combat systems. The cost estimates for those are ranging between $340 million and $852 million. So the Navy has just enough money now to cover the low end of those systems not under contract, assuming no cost growth.
That's part of the reason why we question whether it was prudent to go forward with the contracting for the third ship in January '09. Our sense was there would not be enough construction experience to validate the cost estimates and get good track record on the first two ships before getting a good contract for the third ship and, of course, setting the prices for the remaining four. Besides that, the Navy was not going to be able to begin construction of the third ship until July 2010 under the best of circumstances, so that ship could be deferred, in our view, without a major impact on the industrial base.
Let me just wrap up by making a few comments on the Navy's proposed decision to truncate the program. In my view, it seems like it's a painful decision, one that is borne out of maybe fiscal and changing requirements necessity. But the decision is a poor reflection, I think, on the requirements, acquisition and budgeting processes that develop the business cases for these ships.
I don't think it's a case of poor execution, that the program office couldn't execute the program well, but rather, a business case that wasn't executable. And it's not isolated. It's the last in a series of business cases that we couldn't execute for the time and money set aside. So I think we really have to ask ourselves, why is this? Why do ship systems get approved and presented for budget that can't be executed for the amounts that are estimated? And I think one of the reasons is too many demands are made on the ship programs.
I think that what ends up happening is we get unrealistic compromises to try to meet everyone's demands. And I'll say on the DDG 1000, sort of a micro example, where the scope of the ship was set around mission requirements. Then the desire to reduce manning increased the complexity of the ship further. But the budget for the ship, the cost estimate was constrained by the budget and the schedule was constrained by the shipyards' workloads. So you ended up with something that you couldn't execute.
So in closing, I was very much struck by Admiral McCullough's comment that current fire support capabilities were sufficient to meet the need, yet three years ago that didn't appear to be the case, and that was the basis for the ship. So we have to ask questions. What is it about these processes that aren't giving us the right answers at the right time?
Thank you, Mr. Chairman.
Congress is facing difficult decisions with the DDG-1000 program. This testimony by Paul Francis highlights how the first DDG-1000s, which have already paid for, best represents the strategic considerations, the cost considerations, and industrial considerations in the decision process Congress must work through. We will break down this testimony in later discussion, but it deserved being posted in full.
There is a lesson here. When you speak clearly, everyone understands what is being said.
No comments:
Post a Comment