FY 2009 Shipbuilding

The President signed the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (PDF) today. The following is the shipbuilding section.

The budget request contained $2.5 billion for the third DDG-1000 class destroyer, $103.2 million for close out costs associated with discontinuing the LPD-17 amphibious ship production line, and no funding for the DDG-51 class program which had ceased new production funding with the three ships bought in fiscal year 2005. Additionally, the budget request contained $920.0 million for two Littoral Combat Ships (LCS) and $348.3 million in the National Defense Sealift Fund (NDSF) designated for advance procurement for the first of a class of Maritime Preposition Force-Future (MPF(F)) aviation vessels.

The agreement would authorize full funding for the third DDG-1000 class destroyer without prejudice to any potential future Department of Defense decision to truncate the DDG-1000 class acquisition program in favor of a return to DDG-51 class destroyers.

However, the agreement would authorize $349.0 million for surface ship advance procurement which would permit the Navy to acquire major spares for DDG-51 destroyers or buy advance procurement should the Secretary of Defense determine that there is a validated requirement to produce more of these ships.

The agreement also would authorize $600.0 million in advance procurement to extend the LPD-17 amphibious acquisition program to a total of 11 ships. The Marine Corps considers the tenth and eleventh ships of this class to be vital to the future expeditionary force.

The agreement would authorize the budget request of $920.0 million for two LCS vessels. Elsewhere in the agreement, we recommend a provision that would delay implementation of the cost cap for the LCS program until fiscal year 2010. We note that the Navy has taken delivery of the first ship of this class and anticipates taking delivery of the second by the end of the calendar year. While these are significant milestones, we remain concerned that the Navy has not taken sufficient actions to control costs for followon vessels. Moreover, in repeated testimony before the Committees on Armed Services of the Senate and the House of Representatives, we have been told that a primary benefit of utilizing mid-tier shipyards is that such yards can easily balance commercial and government workload to ensure that the Navy does not have to pay overhead costs to maintain capability during periods of limited government funding. Nevertheless, the Navy has requested, for the second year in a row, an adjustment to the cost cap in order to preserve industrial capability because the Navy is unable to purchase a ship at or below its budgetary estimate and lacks a coherent acquisition strategy for the program. We strongly encourage the Navy to take steps to procure follow-on vessels with required warfighting capability, while prioritizing the aggressive management of cost and the most efficient utilization of the industrial base. Likewise, we direct the Secretary to develop and submit to the Congress a long-term acquisition strategy for LCS vessels with the submission of the fiscal year 2010 budget request.

Finally, consistent with a change in the definition of the vessels appropriately funded within the NDSF, the agreement would transfer $348.3 million from the NDSF to the Shipbuilding and Conversion, Navy (SCN) account to buy MPF(F) vessels which are non-combatant versions of assault echelon vessels of the Navy’s amphibious force.

I am still working through the bill, but for all the rhetoric all year, the ships authorized appear to match exactly what the President's budget authorized:

1 DDG-1000
1 SSN
2 LCS
1 JHSV
2 T-AKEs

This bill actually authorizes $1,324,104,000 more than the Presidents budget. Some of these increases are noted above, but I am yet to locate where the extra $26,804,000 unless this is inflation money for the LCS with the removal of the $460 million cost cap for FY09. I'm guessing there, don't know.

During the Clinton administration, the Navy built 40 ships. During the Bush administration, with these 7 ships, the Bush administration ends up building 47 ships for an average of 5.875 ships per year. By comparison, the Clinton administration averaged 5.0 per year. The really scary part looking forward, during the Bush administration the Navy has spent twice as much money for only 7 more ships. Over the last 16 years of Clinton and Bush, the Navy has build only 87 ships. Do the math, if ships last on average 30 years, we are on pace to build a fleet of between 150-177 ships. The life of the LCS is expected to only be 25 years.

The reality of the last 16 years loom large the challenge of the next four. As budget resources tighten, the necessity to reach the floor of 313 ships becomes a difficult task for leadership.