CBO: Fleet plan has fatal flaws

Solid story from NavyTimes by Christopher P. Cavas (subscription required). The Congressional Budget Office has crunched the numbers - no shock to my regular readers - the rest of you have been reading too many "happy Sailor" stories:

The Navy’s plan for a 313-ship fleet is unaffordable and unrealistic, a new report issued May 31 by the Congressional Budget Office says.

The report shows that “the Navy’s plan based on recent historical spending programs and costs is not affordable,” said a congressional naval analyst familiar with the report.

The fat created by others that lesser men have been living off of hoping to get through the next set of orders is coming to an end. This is what happens when people go with the "happy Sailor" option on briefing the boss - or are ordered to.

The Navy has acknowledged problems in the 30-year, 313-ship plan, which was presented to Congress in February after being ordered last summer by Chief of Naval Operations Adm. Mike Mullen.

The service, which already receives about $10 billion annually for new ships, says it needs about $14.4 billion per year to buy the new fleet.

But Eric Labs, the CBO analyst who wrote the report, has testified to Congress that the average annual shipbuilding budget required by the Navy’s plan is more likely to be $19.5 billion — or even $21.6 billion annually if other costs associated with ship construction, such as the purchase of mission modules for new Littoral Combat Ships, refueling of nuclear-powered aircraft carriers and submarines, and the modernization of cruisers and destroyers, are factored in.

A decade of low-balled costs, adding pet projects to ship programs, and wishing for others to fix in the "out years" is blowing up in our face.

The 30-year Navy plan would see the fleet grow from today’s 282 ships to 330 ships in 2019. But the CBO report notes that even if the service gets the money to buy its new fleet, the number will decline to 294 ships in 2035.

“The fleet would not be close to 313 ships at any point after 2025,” the report says.

“It’s really not hard to maintain the fleet until 2020,” the congressional naval analyst said. “The problems come after that, when the submarines and destroyers in particular need replacing. Hence lies the fundamental flaw of the Navy’s plan.”

... and how is our leadership going to try to save money? Admit failure and build some license built European ships until we get our house in order? Oh, no....

The Navy has said it will reduce costs by shrinking the number of sailors needed to operate its ships, then plow the savings back into shipbuilding. The CBO report acknowledges that crew sizes are going down and that the 55 planned new Littoral Combat Ships will be cheaper to operate than submarines and amphibious ships that would be cut under the Navy’s plan. But the report notes that the $14 billion per year the Navy now spends for direct fleet operation and support costs would shrink to $13.1 billion by 2035.

Put your slide-rule away you old fart... that is only $900 million in savings, or 6.5%. Less Damage Control, .....

The 30-year Navy plan would see the fleet grow from today’s 282 ships to 330 ships in 2019. But the CBO report notes that even if the service gets the money to buy its new fleet, the number will decline to 294 ships in 2035.

“The fleet would not be close to 313 ships at any point after 2025,” the report says.

“It’s really not hard to maintain the fleet until 2020,” the congressional naval analyst said. “The problems come after that, when the submarines and destroyers in particular need replacing. Hence lies the fundamental flaw of the Navy’s plan.”

Hmmmm, and what happens around 2020?

Moreover, China plans to improve and expand its capabilities for assault landing and joint logistical support, both of which used to be weak points. This will provide China with necessary capabilities to invade, should China’s rulers wish, Japan’s most remote islands, including the disputed Senkaku Islands, as well as Taiwan. If China’s naval growth continues at its current pace, it may have the world’s largest naval force by 2020.

...and here we are, in a bed we made.

“Saving money on the battle force required buying fewer ships and thus having less capability,” the report says. “Unless the Navy can provide the level of resources necessary to implement the 2006 shipbuilding plan, it will have to make different choices about how to structure its forces in the future.”

The report shows that “there just are no easy answers,” said Bob Work, a naval analyst with the Center for Strategic and Budgetary analysis who reviewed the CBO report before it was published.

“Eric Labs is one of the best in the business as far as trying to ascertain if the Navy’s plan is fiscally executable,” Work said.

The new report “helps people understand the enormous fiscal pressures and the problems facing the Navy in terms of its choices,” he added.

And those plans are below. Pick your flavor - and next time ask harder questions. Higher res here.

If you are a primary source type of guy, you can get the Executive Summary from the CBO here, or I recommend the whole CBO report here. And yes, you see a "7" for DDG-1000. Seven ships. Max. All that....and we have a new "DDG(x)" out there. Another chance to get it right. I hope they do.

Oh, the answer. Build less expensive ships. Stop doing stuff like this:

The Zumwalt program has had a troubled history. Its first incarnation was as the DD-21 land attack destroyer during the Clinton Administration. At that time, the Navy’s goal was to buy the first ship in 2004 and to bring the cost of the destroyer down to $1.1 billion apiece (in 2007 dollars) by the fifth ship. In 2001, the Bush Administration canceled the DD-21 and immediately reconstituted it as the DD(X) program. For several years, the Navy anticipated that the first DD(X) would be purchased in 2004 and that the ships would cost $1.2 billion to $1.4 billion each. Under the 2006 shipbuilding plan, the Navy now envisions buying a total of seven Zumwalt destroyers, at an average cost of $2.8 billion. In contrast, CBO estimates that the average cost of the seven ships will be $3.8 billion each (see Table 2-2). The Navy plans to order the first two Zumwalts in 2007.