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Cost Disease
A 350 Ship Navy, But At What Price?

Writing in the Wall Street Journal last week, former Secretary of the Navy John Lehman notes the necessity of re-building the navy after years of decline and the difficulties of doing so. Lehman:

Although all branches of the military went through budget and personnel cuts under the Obama administration, the Navy fared the worst. Today the American fleet is less than half the size it was under President Reagan. [….]

During the 1960s the fleet numbered above 800. But after the Vietnam War, the U.S. sought a “peace dividend” and ordered the Navy to do more with less. Historically, a sailor’s maximum deployment was six months away from family in any 18-month period. Today deployments stretch to nine months or longer. Skilled sailors are being worn out, and many of the best are leaving. We have too few ships on too many crucial missions. Without the funding to keep them in repair, they deploy without being combat-ready and are eventually forced into early retirement. Many of the Navy’s combat aircraft are unable to fly without awaiting parts and repair.

Of note is that the costs of replacing, refitting, or rebuilding the fleet have skyrocketed compared with recent decades. Lehman provides two case studies for comparison:

Recall the development of the Polaris nuclear-missile system in the late 1950s. The whole package—a nuclear submarine, a solid-fuel missile, an underwater launch system, a nuclear warhead and a guidance system—went from the drawing board to deployment in four years (and using slide rules). Today, according to the Defense Business Board, the average development timeline for much less complex weapons is 22.5 years.

A case in point is the Ford-class aircraft carrier. The program is two years delayed and $2.4 billion over budget. The ship was designed to include 12 new technologies, such as electric instead of steam catapults that had not yet been developed. Many of these systems don’t work after 10 years of trying, and the ship will be delivered to the Navy without fully functional radar and unable to launch or recover aircraft. Yet the defense firms involved still profit under cost-plus contracts.

The whole thing is worth a read here.

Longtime readers will know that these problems are hardly new. Writing in The American Interest in 2007, Edward Luttwak described the procurement paradox, by which a shrinking military becomes more expensive as economies of scale in production decline and ever more technologies get slapped onto legacy platforms. The solutions proposed in the same issue by Bruce Berkowitz to break the bureaucratic sclerosis in the style of Polaris remain viable because the cost disease of procurement remains largely unchanged.

As Lehman’s essay notes, there is bipartisan agreement on the need to grow the navy, and if President Trump can pass his defense hikes and end sequestration he may be able to pull it off. But given the unimpressive procurement record of the F-35, the Ford class carriers and other multi-billion dollar debacles, the Trump Administration would be wise to consider whether there’s a better way to spend the money. Lehman’s proposals would be a good start.

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  • KremlinKryptonite

    It’s 355 ships. While 355 ships may seem huge in comparison to the battle force of 272 ships we have at the end of 2016; it actually represents the bare minimum that is actually required to maintain presence in the 18 maritime regions where the United States has critical national interests.
    355 ships, which means 47 more (about 15% more) than the 308 ship plan, is just an upgrade to the older plan. Cost can be managed in a multitude of ways, and the question really is “will it be managed?” rather than “can it be managed?” In fact, if Trump actually reforms taxes and corrects some of the large trade imbalances, then that extra money kept/brought home also justifies spending and that’s not to mention the jobs.
    Most importantly, the new goal entails 18 submarines as there is much need for hunter-killer subs, especially with the loss over the next decade of the conventional Ohio-class guided missile subs which pack more punch than any single virginia-class sub today. Then there’s an additional super-carrier, 16 more LSCs (cruisers and destroyers), 4 amphibious transports, and 8 others.

    • f1b0nacc1

      While I entirely agree with your comments, let me suggest that some understanding of what should be built is just as important as what is proposed.

      1) We should be eliminating the failed LCS purchases entirely, perhaps looking at the so-called “National Security Frigate” designs as an alternative

      2) You make an excellent point in your last paragraph about the need for more attack subs in light of the loss of the 4 Ohio-derived SSGNs. This would require four additional Block 5 Virginias (with the VPMs), for each SSGN retired. I suspect taht this might be a bit much to hope for.

      3) The Navy has to get its LSC construction plans in order. If we are looking at more Flight III (or later) Burkes, great, but lets stup pretending that the Zumwalts were anything other than an embarsassing failure, and move on.

      4) What are our long-term amphib requirements (other than satisfying the Marines latest mania for F-35Bs), and how are building more of the very expensive America-class LHAs contributing towards them?

      Just a few thoughts…obviously there is much more out there to discuss…

      • KremlinKryptonite

        You know I’m biased being a former submariner myself, but certainly there are very important roles for LCSs in ASW, BMD, and general AA operations. And you’re in luck! The cruiser modernization program is primarily focusing on the modernization of 11 of the 22 Aegis cruisers, and there’s a request for an additional $433 mil for another DDG-51 (it was already largely funded FY2016 and its item #2 on the Navy’s unfunded requirements list).
        What’s really interesting is looking at the FY 2017 requests, and then looking at the navy’s really deep, technical five and ten year plans.

        You can expect to see some of the smaller requests filled first (2017-2021). For 2017 in particular, buying another TAO-205 class oiler, a second TATS, another EPF, three more SSCs, another LCU 1700, funding for an expedited LX(R) before 2020 so as to reduce the gap in time between the end of LPD-17 production. Things like these.
        The additional submarine procurement will cover several more Virginia-class at a rate of two per year [hopefully], but of course the Ohio replacement program has to be considered more for the medium term, looking past 2021 you will see a lot more activity in that regard.

        I refuse to write off Zumwalt yet, however. It’s a new platform and they are asking a lot of any ship, let alone a new one. It was delivered less than a year ago and has been tested extensively and will continue to be. Driving, networking, weapons. All new and in a new configuration.
        Even if it ends up being fantastic, the Navy has admitted there’s no way it can focus on any large, new platforms. There would just be no way to achieve the 355 ship goal. And this is reflected in the five and 10 year plans-focusing on upgrading and maintaining existing platforms besides Ohio replacement.

        • f1b0nacc1

          (crap, disqus just flushed my brilliant reply!)….

          We are largely in agreement. I am pleased to see more Burkes (the Flight IIIs are quite impressive), happier still to see more support ships (I am fascinated by the EPFs, I think that they can be a real revolution), and of course pleased to see that more Virginias are on order (particularly the Block Vs with the VPM….this will become a very big deal over time, though I would be even happier if there was a realistic replacement for the Ohio SSGN mods that are going to be retired). I am interested to see how the Columbia shakes out, and encouraged that the Navy has decided to make extensive use of their Virginia experience to keep the program low-risk….

          I am afraid that we will have to disagree on the Zumwalt, however. The serious design flaws (yes, I know…they had major financial issues that forced this) cripple the ship, and the confused tactical concept (a 14,000 ton inshore bombardment platform…really?) just doesn’t cut it. This platform would have been idea as the core of an SAG, or a major antimissile escort, but as it stands, it is neither fish nor fowl, lacking effective antimissile capability, made massively more expensive by the Navy’s confused insistence on stealth (that is why they have subs!), and lacking any real tactical role that you cannot file with a smaller, less expensive vessel. Yes, the Navy could fix all of this, but it will take time and money that currently doesn’t (and isn’t likely to) exist in the future.

          • KremlinKryptonite

            We may very well end up in agreement on DDG-1000. I’m simply refraining from judgment at this point as I feel it is too early.
            Conceptually I have no problem with it, however. At the end of the day, there is still a need for LSCs for BMD, ASW, and AA. The concept of a stealth ship that improves its own survivability and means more of its missiles can be used protecting other assets is not a bad idea, but we will have to see how it shakes out.

          • f1b0nacc1

            I hope that you prove to be right with your reasonable caution on the Zumwalt (a great virtue for an intelligence analyst!) and I am mistaken, but I suspect that will not be the case. We absolutely agree on the need for LSCs to handle AA/BMD, and ASW, but I am less sure that a gun-armed stealth vessel makes much sense. There is no way to ‘stealth’ a cannon, which means arming a ship whose primary feature is its low-observables with one makes very little sense.

            If the DDG-1000 had been built with stealth and a deep arsenal of VLS tubes, i would be all onboard with the system, but that didn’t turn out to be the case. As it is, it has barely enough missiles to protect itself, and given its sensor and comm layout, it really doesn’t work and play well with others, so it doesn’t make a useful addition to a CVBG or even an SAG. I suspect that we have pretty much the same vision of what the ship should have been, but that certainly isn’t what it is right now.

            Perhaps the Navy will come to its senses, and rebuild the Zumwalt, as well as its two sister ships, later on in its lifespan. This has happened before, though I don’t see very much hope for that given the current budgetary restrictions…

  • D4x

    Another good place to start would be to learn from former Rep. Gene Taylor, MS, who, as I recall, brought sanity to Coast Guard ship development, certainly a most knowledgeable fiscal conservative who can cut through the lobbyists: “Feb 5, 2009 Gene Taylor sets out Navy shipbuilding plan: Rep. Gene Taylor (D-MS), Chairman of the Seapower and Expeditionary Forces Subcommittee of the House Armed Services Committee released the following statement on the future of Navy shipbuilding. …”

    Yes, I might be wrong. Every time I read about DoD weapons development issues, I think of Taylor wrestling through the muck before 2009, when everything changed.

  • Andrew Allison

    Three quick suggestions to pay for the 355-ship navy: require defense contracts to be fixed price (the contractor eats the overruns) with penalties for late delivery, kill the F-35, and bring all non-essential personnel home from Europe.

    • Fat_Man

      How about firing everyone who was involved with the F35, the Zumwalt class destroyer fiasco, that the Lehman article mentions, and the Ford Class carriers.

      I think Trump understands the idea of firing people.

      • Andrew Allison

        The whole DoD procurement rat’s nest is a disgraceful manifestation of Ike’s warning.

      • f1b0nacc1

        The Fords aren’t entirely useless, but I am with you on the first two. How about we add the LCS to that list though….easily a bigger debacle (for the Navy) than any of the others.

        • Fat_Man

          I was just going by what the linked article said. The author was Sec. Navy. The LSC (Littoral Combat Ship) is the answer to a question no one was asking about re-fighting the Vietnam War. I will lead the anti-war demonstration at the White House Fence if any future administration proposes to use the US Navy anywhere except Blue Water. And I do not think of the Baltic nor the Black Seas as Blue Water.

          • f1b0nacc1

            I am not entirely sure I agree with you there. There is a good argument for some littoral capability (a tactical, not a strategic or operational use, mind you), but even if you accept that, the LCS is not the right tool for the job. It is far too big at 3000 tons, far too expensive, and FAR too lightly armed, for starters.

            However, we are largely in agreement…

          • Fat_Man

            Bring back the battleships. We should never do anything at close range. Bombard them with 2,700 lbs. shells from 10 mi offshore.

          • f1b0nacc1

            Interesting you should suggest that. I was a hugely aggressive advocate of reactivating the New Jersey back in the 80s, and regretted that the USN (facing a big personnel crunch at the end of the Cold War) had to give up on the battlewagons. One of the reasons why I was so utterly disgusted with the Zumwalts is that the took the worthwhile idea of a large surface combatant and so thoroughly hashed up the execution.

          • Fat_Man

            We probably ought to be thinking in terms of UAVs and missiles.

          • f1b0nacc1

            I don’t disagree, but UAVs and missiles have to be based upon something…and those platforms will have to be able to operate without direct shore support if you want to be able to deploy them remotely.

          • D4x

            Doesn’t Littoral mean close to the shoreline? As for the USN LCS consept, what about the Caribbean, or the Mediterranean, or, where the USA permanently bases part of the fleet, Bahrain on the Persian Gulf, and Yokusaka, Japan (which is on the Pacific side, but rather useless if you restrict to Blue Water) ?

            Do not mean to argue, just the reality of what is Blue Water when freedom of navigation is the mission.

          • Fat_Man

            The Caribbean is our lake, and we must control it. The Mediterranean is a slum.

          • f1b0nacc1

            Freedom of navigation isn’t always the mission (see Fat_Man’s reply, below), and the while the LCS can be used the way you describe it, its weapons and sensors are woefully inadequate. Its manifold mechanical problems (both versions!) make it the nautical equivalent of a ‘hanger queen’, and its cost is outrageous for the mission.

            They are a bad idea, they don’t work, and better alternatives exist. A lot like an old girlfriend of mine….

          • D4x

            TY for the insight on the USNavy LCS.

            No images available for this comment…

          • f1b0nacc1

            The pleasure is mine….and I will look forward to the next image! (grin)….

          • D4x

            How does “Don’t cry for me, Argentina” sound?

            FLOTUS’ suit is from Altuzarra, and a diplomatic departure in NOT wearing a color of the visitors flag. This choice might have been a pre-emptive strike against the Met Gala on May 1, too late for anyone to change their Altuzarra gown, or for Altuzarra to claim he would never dress Melania.

            Yes, pythons were killed to make those shoes. No PETA protest.

            My image pipeline a bit dry due to ongoing cultureWar against FLOTUS, in high alert since her poll numbers jumped to 52% approval. This was from UK’s Daily Mail.

          • f1b0nacc1

            “Don’t cry for me Argentina”….

            Wrong verb

          • Unelected Leader

            LSC and LCS are two different things. Just sayin. LSC is Large Surface Combatant. Like the Aegis ships Kremlin Kryptonite and f1b0nacc1 were talking about above.

    • D4x

      Ask, and ye shall receive?: “… Lockheed Martin’s F-35C currently costs about $122 million. That’s about $43 million more than the $79 million Boeing says it would charge for an Advanced Super Hornet. Thus, by switching out 200 purchases of F-35s for 200 purchases of Advanced Super Hornets, Boeing says the Navy could save about $8.6 billion. What’s more, Boeing also says its Advanced Super Hornet would be easier to maintain. Factoring savings from operations and maintenance costs into the equation adds up to “about $30 billion” saved over 20 years.

      That’s enough to buy the Navy two brand-new Ford-class supercarriers with the savings — which is a proposition attractive enough that it might persuade the Navy to give Boeing’s proposal a listen. …” May 1, 2017 at 11:13AM

      • f1b0nacc1

        Killing the F-35C completely and proceeding ahead with a SuperSuper Hornet (which is the logical extension of what Boeing is saying) would be an outstanding idea. The USN has been positive and realistic about the use of UCAVs for strike operations as well, which means that we could easily see some real progress on maintaining and strengthening our naval strike options going forward.

  • Che Guevara

    The Navy will be of little use to the U.S. in a confrontation with Russia or China. Russia and China taken together don’t have to rely on maritime shipping to sustain their economies. China can obtain most of its resources from Russia, and transport goods to Europe via the New Silk railroad through Russia. So the U.S. will end up parading its expensive ships over the open oceans without affecting Russia or China.
    The reality is that the U.S. ability to affect events on the Eurasian continent is declining, and supporting an expensive Navy won’t change that.

    • f1b0nacc1

      You obviously have very little understanding of trade flows (with that handle, it really isn’t too surprising), if you believe that the Chinese are going to be able to obtain a significant fraction of their resource needs from Russia alone, or that they can do this without a very large amount of merchant shipping. Clearly the Chinese (who are building their navy, merchant fleet and its supporting ports at a rate of expenditure several times that of what they are spending on the largely propagandistic ‘New Silk Road’) don’t agree with you, nor should they, as their own trade flows through the Indian Ocean and through the South and East China seas. The idea of a Eurasian autarky went out of style over 100 years ago, though it does seem to retain an appeal to those with a sense of history more facile than substantive.

  • Jeff77450

    I’m retired army and I freely admit that I don’t know a lot about naval operations. I now work in defense-contracting. What follows is going to be bare-bones so as not to write “War and Peace,” so please spare me all the “…but what about…” I’m admitting in advance that this is “broad strokes” and simplistic.

    What a lot of layman don’t realize is that U.S. forces are designed on the principle of “thirds.” One-third of forces deployed, another third returning from deployment and the troops getting some well-deserved time off and another third training-up for their next deployment. That’s why aircraft-carrier groups need to be in multiples of three, like twelve. At their peak U.S. troop levels in Iraq & Afghanistan, from both the army and the USMC, were about one-third of active-duty strength. So ~355 ships is really more like ~118 deployed.

    Yes, of course, emergencies happen and we temporarily “surge” our forces with more than one-third deployed.

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