Home » Budget Industry » Navy Won’t Commit to Proposed Congressional Cost Cap for Second Ford-Class Carrier

Navy Won’t Commit to Proposed Congressional Cost Cap for Second Ford-Class Carrier

A unit for the future aircraft carrier John F. Kennedy (CVN-79) rests on the assembly platen at Newport News Shipbuilding on March 5, 2014. US Navy Photo

A unit for the future aircraft carrier John F. Kennedy (CVN-79) rests on the assembly platen at Newport News Shipbuilding on March 5, 2014. US Navy Photo

Lawmakers are considering lowering the congressional cost cap for the second Ford-class aircraft carrier, John F. Kennedy (CVN-79), to a dollar figure the Navy says it cannot commit to.

The Senate Armed Services Committee proposed lowering the cost cap by $100 million in its version of the National Defense Authorization Act for Fiscal Year 2016. The committee did so based on a new, lower “total ship estimate” the Navy submitted in its budget request documents in February – $11.348 billion, compared to the current congressional cost cap of $11.498 billion.

The Senate committee chose to lower its cost cap by $100 million rather than the full $150 million to hold the Navy accountable for some cost reduction while still leaving some margin for the second-in-class ship, USNI News understands.

The Navy, however, will only commit to meet the higher figure, not the lower estimate from February, Naval Sea Systems Command officials told USNI News.

The program office requested the full $11.498 billion in last year’s FY 2015 budget submission, NAVSEA spokeswoman Colleen O’Rourke said. This year, however, “the FY 2016 president’s budget request reflects $80.5 million in congressional reductions.

An additional $69.8 million reduction was made late in the budget process, bringing the total reduction to $150.3 million,” she said, though the program office did not confirm whether the $69.8 million reduction came from lawmakers, the Pentagon or the Navy.

“Due to the reductions to the CVN-79 budget outlined above, the budget controls established by the Department for the president’s budget Fiscal Year 2016 submission were required to be $11,348 million,” she said.

Despite the requirement to submit the lower figure, “the program manager’s estimate for the CVN-79 is $11,498 million,” O’Rourke said.
“The Navy is committed to maintaining the cost of CVN-79 within the congressional cost cap of $11,498 million.”

And yet, last week the House and Senate armed services committees began a conference committee to work out the differences between their two versions of the defense policy bill. The Senate’s version would lower the cost cap, and the House’s version was silent on the issue. If the final version of the bill contains this provision, the Navy would have to scramble to avoid breaching the cost cap.

On June 2, the White House wrote to the Senate Armed Services Committee with a list of concerns about its bill, including a paragraph on the CVN-79 cost cap.

“The Administration strongly objects to section 111, which would reduce the cost limitation baseline for CVN 79 and subsequent FORD-class carriers to $11.398 billion,” reads the Statement of Administration Policy.
“A $100 million reduction would degrade the capabilities of CVN 79 and follow-on ships or increase the risk of a breach of the cap. The current cost cap represents a significant reduction from CVN 78 and will be challenging to achieve. Further reductions may impact the delivery of integral warfighting capability. The Department has worked with the shipbuilder and other system providers to revamp the construction process for CVN 79 to avoid the cost increases experienced with construction of CVN 78.”

A composite photo illustration representing the Ford-class aircraft carrier, USS John F. Kennedy (CVN-79). US Navy Image

A composite photo illustration representing the Ford-class aircraft carrier, USS John F. Kennedy (CVN-79). US Navy Image

Program Executive Officer for Aircraft Carriers Rear Adm. Tom Moore told reporters at the Pentagon on June 15 that the recent construction contract for CVN-79 is “probably the best CVN fixed-price contract we’ve ever had with [Newport News Shipbuilding] in terms of the target fee in the contract, the steepness of the share lines, the ceiling price in the contract – all reflective of the fact that the shipbuilder and us have a very solid understanding of where we are in the ship and the cost we’re able to take out.”

Moore added that the Navy would save a billion dollars by reducing the man hours needed to build the ship to about 44 million – an 18-percent reduction compared to CVN-78. The Navy beginning in FY 2017 will also create a research and development fund to pursue cost-saving ideas at the shipyard.

It is unclear what number the program office will submit in the FY 2017 budget request, which is being worked on now. That “submission to Congress is dependent on decisions within the Department that are not yet final and on the outcome of the budget deliberation process for the FY 2016 request currently on the Hill,” O’Rourke added.

The cost of Kennedy has been a topic of conversation on the Hill recently. SASC chairman Sen. John McCain (R-Ariz.) expressed his concern after the Pentagon’s Cost Assessment and Program Evaluation (CAPE) office identified its estimate for the ship as $11.868 billion – $370 million above the congressional cost cap and $520 million above the estimate in the FY 2016 budget submission.

“Accountability must be restored to the Ford-class aircraft carrier program,” McCain said in a statement after Bloomberg News first reported on the CAPE estimate.
“Our nation simply cannot afford these kinds of cost overruns amid rising global threats and fiscal challenges. If this new cost estimate is accurate, I expect the Pentagon to promptly notify the Senate Armed Services Committee who is responsible for this cost overrun and what will be done to hold those individuals accountable.”

“I remain concerned that the USS Gerald R. Ford (CVN-78) design is still not stable given its dependence on completing design and development of major systems like the Advanced Arresting Gear,” he continued.
“Effectively, the Navy is concurrently refining CVN-78 design and constructing the ship while getting ready to award the contract for CVN-79. These issues with CVN-78 raise questions about whether now is the time to award this contract for CVN-79. This latest news report does not give me confidence that the Department of Defense understands the risk and cost of CVN-79, which they will be passing along to American taxpayers.”

There is usually some discrepancy between CAPE estimates and the figures coming out of the program office. The Congressional Budget Office estimates the ship will cost about 8 percent more than the Navy’s estimate.

The program office’s estimate for CVN-79 has changed dramatically over time. In FY 2008 the program said it could build the ship for $9.191 billion. In FY 2014 it submitted a $11.338-billion figure, followed by the $11.498-billion estimate in FY 2015 and then this year’s $11.348-billion figure, according to a Congressional Research Service report.

  • Dave_TX

    Fiscal accountability is all well and good, but Congress has a way of making projects much more expensive by playing accounting games to make the budget look better in a given year.

    • Curtis Conway

      It’s obvious that diverse and multiple platform capability is not in the equation. At some point in the not to distant future the US Navy will not be able to fund the operation of multiple CSGs at sea at one time. with regional and more SOF-centric GWOT threats, the Light Carrier time has come, and is the obvious choise. Newport News can build them too.

      • sferrin

        “It’s obvious that diverse and multiple platform capability is not in the equation.”

        Diversity for diversity’s sake might work in the work place (not really, but the damage can be mitigated at least), less so when it comes to ships. Diversity has it’s place – capital ships isn’t one of them.

        • Curtis Conway

          I admit that I am very biased in this conclusion. Built two cruisers and steamed with a fleet where everybody could do everything to some extent, so we could plug a hole in a formation with anyone, and the job got done at some level. Today . . . everybody’s got a specialty, and this is in an environment where we cannot afford to build a ship that does only a couple of things. I sincerely hope you never go into a dynamic and challenging battlespace with THAT mentality and equipment set, because this Eagle Scout was taught to “Be Prepared”, and do not ever “Plan To Loose”. To do anything less is breaking the faith with or Sailors, and placing them in Harm’s War without the tools with which to deal with the problem.

  • vincedc

    All the Navy has to do is name CVN-80 the USS John McCain, and they can do what they need to do on carriers. His micromanaging of DoD procurement is getting tedious. Changing the budget from year to year is a time honored congressional tradition, but industries are wasting a lot of resources trying to keep up with these moving targets.

    • Curtis Conway

      Star Trek fans will hate you.

      • sferrin

        So will USN fans. “Enterprise” wasn’t invented by Star Trek you know.

  • Curtis Conway

    You know my attitude. We can buy multiple (more than twice as many) USS America (LHA-6) Class Light Carriers for the same cost of two Fords, and they would be able to be in more places at once. The Carrier Strike Groups will always be their to augment if necessary, but the smaller, lighter, more cost effective CVL will provide presence and capability at a much lower cost. The capabilities of the F-35B Combat System is the compelling factor. All we need is an EV-22 Osprey AEW&C (EV-22 Osprey AEW&C facebook page) to round out the package.

    • Rob C.

      That would require a good effective fighter to launch from that vessel.
      F-35 is not a dog fighter, it’s not interceptor, it’s a attack plane. It can’t fit normal load that carrier launch variant can. Suggesting the America Class being the replacement for the Ford is foolish. Get better plane replace the 35B then it’s possible.

      • Curtis Conway

        The F-35 any version is not a good dog fighter. That is not what the aircraft was made for. The CVNs bring that capability to the table. However, most of the time an ARG or Expeditionary Strike Group is just as likely to be present. The title Marines brings its own intimidation factor, plus the formation is less expensive to deploy. Beyond Visual Range combat and greater situational awareness over the battle space is what we are looking for. Now if we can just keep the politicians from killing our crews with lousy Rules of Engagement, things would not be so bad.

        • sferrin

          “The F-35 any version is not a good dog fighter.”

          Says who? (Yes, I’m aware of David Axe’s mangled hit piece.)

          • Curtis Conway

            Read the PIREP from the F-35A driver, and no, that ‘hit piece’ does not constitute the entire body of evidence. Once ADVENT is installed, perhaps a dog-fighter, and that has yet to be seen. The strength of the F-35 is the capabilities of its combat system. The idea is to Kill The Enemy, not let him get close enough to see the “whites of his eyes” like ROE usually requires. One cannot sneak up on an F-35 any flavor. Remember, I’m and F-35 fan, but I do not ignore reality. I am particularly fond of the F-35B and its drivers(Marines mostly)! That aircraft has the potential to change Naval Aviation HiStory. However, there are a plethora of Gen 4, and Gen 4.5 Fighters that can outperform in a dogfight at present.

    • sferrin

      Yeah that’s an idea that’s been falling on it’s face for nearly half a century. 2 LHAs do not equal 1 CVN in capability.

      • Curtis Conway

        Never said it did. In fact I have gone out of my way to make sure not to ever formalize that specific conclusion. However, most of the presence requiring TACAIR does not need the full power of a Carrier Strike Group, and its associated costs. We have two potential adversaries we may need that kind of response for, and a plethora of other areas and missions that require aviation presence and TACAIR, not a full CSG. Why do you think that we track CSGs and Expeditionary Strike Groups at the same time? THAT is what the Light Carrier is for . . . GWOT on steroids, and other things, particularly presence in a venue like the MED, West Philippine Sea, South Korea’s West Sea, etc.

      • Curtis Conway

        AND the F-35B was not available until today!

  • Mark Gallup

    We should not even HAVE a “FORD CLASS”. Naming an entire CVN Class after an
    UNELECTED President. UNBELIEVABLE!!! How about “HALSEY” Class? Fletcher?
    Mitscher? Spruance? Fitch?

    • Curtis Conway

      It has troubled me ever since Capital Ships started being named after living individuals. It introduces the potential to influence the process in an untoward way. What ever happended to USN HiStory, culture, ethics, and Tradition, that has served us so long, so well?