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Marine Log

March 16, 2008

Navy shipbuilding hearing

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To a very large extent, Rep. Taylor's skepticism appears to be shared by the panel's ranking Republican, Rep. Roscoe Bartlett (D. Md.)

In his opening statement, Rep. Bartlett drew attention to the LPD-17 program, saying that "if we were to accept the budget request at face value, the LPD-17 production line would be shut down. This would mean that nearly 20 percent of the Marine Corps' requirement for amphibious lift would remain unfulfilled. As a nation, are we willing to accept that risk? Conversely, if we are forced to restart production after Fiscal Year 2009, it is patently obvious that the cost of the ship will increase. The cost will increase not only for the LPD-17 line, but for future platforms that could be constructed using the LPD-17 hull form. I, for one, do not want this committee to be complicit in intentionally increasing the cost of shipbuilding."

"The best news in the shipbuilding plan," said Bartlett, "is that the budget request moves up two per year construction of the VIRGINIA class submarine to Fiscal Year 2011—a year sooner than previously planned. Ironically, that's not even a Fiscal Year 2009 matter. I hope both panels of witnesses will discuss what options are available to Congress in Fiscal Year 2009 to enable a ramp in production even sooner than Fiscal Year 2011.

"Unfortunately," he said, "the rest of the news is rather bleak. From FY 2008 to 2009, the Navy has reduced the number of ships to be procured by approximately 25 percent--one quarter of the ships the Navy planned to build last year are gone. The long term shipbuilding plan still speaks to a 313-ship Navy, as does the Chief of Naval Operations, but it's time we started facing facts."

"The Navy will never get there without either top line relief or a significant change in the mix of platforms. The Navy's shipbuilding plan is based on the assumption that over the next thirty years the shipbuilding account will nearly triple in size. Do our witnesses really think this is realistic? How can you? If it's not--and I tell you it's not--then the only other alternative is to look at the mix of platforms."

"For example, is it wise to buy destroyers that at best will cost $3 billion a copy, and more likely $5 billion a piece if the Congressional Budget Office is right, while we shut down stable, more affordable production lines, such as the DDG-51 line? How much risk are you buying down with only seven DDG 1000s, at a cost of $21 - $35 billion, when you could likely have at least 14, upgraded DDG-51s for that same amount? And how much risk are we buying down if we procure two more Littoral Combat Ships, the year after we cancelled two, and the year in which the Navy plans to conduct an operational evaluation and possible downselect of LCS-1 and 2? Even if there is no downselect, the Navy has stated that there will be design changes made to the Flight One ships. So the two we buy now will be different than the remaining 50. Is that worth it, if those funds could keep a stable program like LPD-17 alive?"

You can read Rep. Bartlett's full statement here.

CBO testimony

Witnesses at the hearing included Dr. Eric Labs of the Congressional Budget Office

According to Dr. Labs's prepared statement:

  • The Congressional Budget Office's analysis of those programs, of the Navy's fiscal year 2009 shipbuilding plan, and of available information from the Navy about specific ship programs indicates the following:

  • Executing the Navy's most recent 30-year shipbuilding plan will cost an average of about $25 billion a year (in 2009 dollars), or double the $12.6 billion a year the Navy has spent, on average, since 2003.

  • The Navy appears to have substantially revised its estimate of the cost of implementing the 30-year shipbuilding plan, bringing its overall estimate into general alignment with CBO's estimates of the past three years.

  • CBO's estimates of the Navy's shipbuilding program through the 2009–2013 Future Years Defense Program (FYDP) are about 30 percent higher than the Navy's estimates. In particular, CBO estimates that the DDG-1000 guidedmissile destroyer and the CG(X) future cruiser would probably cost significantly more than the Navy currently estimates.

  • For the 2009–2020 period, which the Navy's plan describes as the "near term," CBO's estimates for new-ship construction alone are about 15 percent higher than the Navy's.

  • The Navy's cost estimates for the 2009 shipbuilding plan beyond 2020, which the Navy's plan describes as the "far term," appear higher than CBO's by about 20 percent. CBO cannot explain the difference between its estimates and the Navy's because detailed information from the Navy explaining the basis of its cost estimates is not yet available.

You can access the prepared statements of Dr. Labs and other witnesses at the these links:

Witnesses:

Panel 1:

The Honorable Allison Stiller (pdf)

Deputy Assistant Secretary of the Navy, Ship Programs

Vice Admiral Barry McCullough, USN (pdf)

Deputy Chief of Naval Operations, Resources and Requirements (N8)

Panel 2:

Dr. Eric Labs (pdf)

Senior Naval Analyst

Congressional Budget Office

Mr. Ronald O’Rourke (pdf)

Specialist in National Defense

Congressional Research Service

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