Home » Budget Industry » NAVSEA Commander: Trump Administration Demands Lower Shipbuilding Costs


NAVSEA Commander: Trump Administration Demands Lower Shipbuilding Costs

Then-Rear Adm. Thomas Moore, program executive officer of aircraft carriers, poses a question to representatives from Huntington Ingalls Newport News Shipbuilding during a tour of the aircraft carrier Pre-Commissioning Unit (PCU) Gerald R. Ford (CVN 78) in March 2014. US Navy photo.

Then-Rear Adm. Thomas Moore, program executive officer of aircraft carriers, poses a question to representatives from Huntington Ingalls Newport News Shipbuilding during a tour of the aircraft carrier Pre-Commissioning Unit (PCU) Gerald R. Ford (CVN 78) in March 2014. US Navy photo.

President-elect Donald Trump supports increasing the size of the Navy fleet but has also made clear that the Navy and industry will have to lower the cost per hull for new construction, the head of Naval Sea Systems Command told USNI News.

Vice Adm. Tom Moore has met with Trump and had ongoing conversations with his transition team, and he said the next commander-in-chief is approaching his new job from the perspective of a businessman.

“He was very interested in specific defense programs, but it was obvious that his overall thought process was, we want a bigger fleet – his administration is pretty clear on 350 ships, and that aligns nicely with where we are for the force structure assessment, so I think we’re aligned on what that goal is,” Moore told USNI News after moderating a panel at the Surface Navy Association’s 2017 conference.

However, he said, “industry and we on the Navy side have an obligation to also drive cost down, so I think that’s the message that [Trump] delivered pretty loud and clear, not only to industry but to us. We’re excited about the opportunity to grow the force, but we’ve got a lot of work to do going forward.”

During the conference panel, Moore described the cost savings Trump was looking for as “dramatic.” Moore’s panelists – including several program executive officers who oversee ship and shipboard weapon acquisition programs – discussed ways to take some cost out of programs, though many of their programs are in serial production and have already seen prices drop as procurement and construction has become more efficient.

Moore told USNI News afterwards that the Navy can “absolutely” achieve the cost savings Trump is seeking.

“I think he’s set some pretty clear expectations of what’s possible,” Moore said, without quantifying those goals.
“I think he’s shown through his business over the years that he has pretty high expectations, and I’m actually encouraged that he’s setting those expectations because I think it sends the message that industry and we on the acquisition side need to hear loud and clear, that if we want to grow … we’ve got a lot of work to do. I don’t think he’s telling us anything that’s out of the question, and I think he’s absolutely sending us the right message going forward.”

USS Arlington (LPD-24) under construction at Ingalls Shipbuilding. Huntington Ingalls Industries Photo

USS Arlington (LPD-24) under construction at Ingalls Shipbuilding. Huntington Ingalls Industries Photo

Rear Adm. Bill Galinis, the program executive officer for ships, said his programs are already driving out cost by leveraging mature designs as the starting point for new ship classes, such as using the proven San Antonio-class amphibious transport dock (LPD-17) as the basis for the LX(R) dock landing ship replacement design. Galinis added that commonality across ship classes in components and weapon systems can also help keep costs low during acquisition and sustainment.

Rear Adm. Michael Jabaley, the program executive officer for submarines who is in serial production of the Virginia-class attack submarine and at the beginning of detail design for the Columbia-class ballistic-missile submarine, said the Navy and industry would have to look at personnel and facility capacity carefully to increase the size of the fleet in a timely manner and for an affordable price.

Noting that there was already going to be a shortage of submarines in the 2020s when the requirement was 48 SSNs, and now that a new Force Structure Assessment calls for 66 the service is already in a hole, he said “we have the capacity to increase (the fleet), but in order to do the type of shipbuilding that would be necessary to get to 66 attack submarines, I would say we have the potential. We’ve obviously done it before – we delivered as many as six Los Angeles-class submarines in one year in the 1980s at the same time we were building the Ohio class SSBN. So the potential is there, the question is at what point do you need to start building more facilities, hiring more people. We’re already in the middle of a facilities expansion and a significant employee ramp-up at our shipbuilders, just to handle the increased demand signal brought on by the Columbia SSBN. So now to figure out how to get the Navy to 66 attack submarines in the right amount of time without breaking the submarine construction enterprise, obviously additional employee ramp-up, additional facilities will be required, so we’re doing that hard work right now to figure out what the recommended posture is to get us to 66. It’s all very early, and yes the potential is there, but the capacity needs additional facilities and employees to do a shipbuilding program of that size and pace.”

Rear Adm. John Neagley also discussed the role industry capacity plays in keeping costs down. As the program executive officer for Littoral Combat Ships, Neagley currently works with two shipyards but under the direction of Defense Secretary Ash Carter is planning for a downselect to a single builder no later than Fiscal Year 2019. It remains to be seen what the incoming administration will direct PEO LCS to do, but Neagley commented that having two yards competing for multi-ship buys has been a cost-saver for that program.

USS Zumwalt (DDG-1000) steams in formation with USS Independence (LCS-2) and USS Bunker Hill (CG-52) on Dec. 8, 2016. US Navy Photo

USS Zumwalt (DDG-1000) steams in formation with USS Independence (LCS-2) and USS Bunker Hill (CG-52) on Dec. 8, 2016. US Navy Photo

“Leveraging a hot production line is kind of a key strategy for us. In terms of LCS, we have two production lines at two shipyards; taking advantage of that investment that already has occurred in the shipyards both from a people standpoint and infrastructure standpoint is important,” he said.
“As I talked about before, having these multi-ship strategies, a block buy … provides a lot of advantages, provides you a lot of stability, predictability.”

In addition to discussing shipbuilding with Trump and his transition team, Moore told USNI News he has also talked to the president-elect about ongoing operations and maintenance funding shortfalls.

“We’ve had many discussions with the transition team coming in about what we would do with FY ’17 supplemental money and the ’18 budget,” he said, in reference to additional funding Republicans in Congress have pushed for to support military operations around the globe.
“I don’t want to presuppose what the administration’s going to do, but clearly they’re going to focus on both the current readiness piece … and growing the size of the force. So discussions are happening right along those lines.”

  • The Plague

    If Trump really does come down on costs that hard, the Navy can expect some real hard run for its money by the Air Force : the AF will portray its bomber programs as delivering far more offensive punch at less cost than the Navy’s increasingly expensive vessels. Even at $500M a copy, the LRSB only costs a third of a DDG. I wouldn’t be surprised to see an institutional conflict like the one in the days of the B-36. Not that open maybe, and not that foul perhaps, but it could get tough for the USN.

    • John Locke

      That would require re-tasking of assets that have capabilities the LRSB doesn’t have. Also there would be the issue of on-station time which, in the long run, might not provide any advantage to the LRSB at all. Would be an interesting CBA.

    • publius_maximus_III

      The Navy’s advantage over the USAF is being able to remain on station for extended periods of time, a portable military base if you will. With the exception of drones, the USAF would not be able to linger around a trouble spot very long. Difficult to quantify in dollars and cents the real value of such intangibles as saber rattling and waving the flag in modifying actions of potential belligerents without any shots being fired. Hope that is not overlooked in the turf battles sure to come.

      • old guy

        He is already hitting F35.

        • Curtis Conway

          That will have the appropriate affect, and then he will get over it and love the aircraft once they are in the field in numbers.

        • Ed L

          President Elect Trump is after the builders of the F-35

    • Curtis Conway

      It real hard for an airborne asset to maintain presence. Out of sight, out of mind. Can’t ignore a Carrier Strike Group, but one can easily ignore a threat to fly bombers. No body chewing cigars around here!

  • RobM1981

    It has been a very long time since the USN has faced someone like Trump.

    The contractors haven’t had a serious competition in anyone’s real memory. There are so few shipyards left, it’s not like it used to be. With Lobbyists, etc., the whole concept of “competition” appears to be more kabuki than real.

    Plus, with respect, the Admirals and other navy brass who are involved… well, they’ve never spent a day in the business world, either, have they? They have never had to truly negotiate for maximum capabilities at lowest costs. This is something that happens in the business world all of the time, and the stakes are real and clear: optimize or lose, and if you lose often enough your company goes out of business.

    That’s anathema to an Admiral, and probably just as foreign to the bureaucrat they are working with.

    Trump might turn out to be terrible in a lot of ways, but in this one area he has a view of the world that is completely alien to the government that he now leads.

    How far can he push such a Leviathan? Hard to say… but he’s certainly going to try.

    It would be nice to see more innovation, lower costs, faster builds, etc. We all know that after decades of non-competition, all of these things can be improved.

    We’ll see.

  • redduke

    If the pentagon wants to reduce costs, then it should show leadership and start by implementing the recommendations of the Defense Business Board to save $125 Billion in their January 2015 report “Transforming DoD’s Business Process for Revolutionary change”

    It should then correct the 125% over-capacity at U.S. bases.

    Contractors have been under pressure to reduce costs and have responded in many cases.

  • old guy

    This could be the end of the SWIPE program, at last. The yards will have to get out of the welfare mentality and adopt a bit of an efficient operation HALLELUJAH!!!

  • Lazarus

    It will be a challenging prospect to substantially reduce warship costs. What shipyards remain in the US have little or no civilian business upon which to fall back while waiting for the Navy (and USCG) to determine warship requirements. Its costs a great deal to stand up a warship production line (all trades and associated needs.) Shipbuilders cannot create prototypes as can the aviation or defense vehicle industry, and then calmly sit back while the “fly before you buy” process plays out. Shipbuilders (and their Defense Corp owners) lose millions of dollars each month a building line sits idle. The reason one seas block buys (in such programs as LCS) is that the shipbuilder would go out of business waiting for the US govt. to make a decision. While corporate welfare is not a good idea, these companies exist largely to supply US defense needs and the govt. has an obligation to not drive them out of business and cause the loss of thousands of jobs.

    One hopes that GEN Mattis and the next SECNAV will have support to re-make the 1950’s era acquisition system and its attendant 1980’s era test and evaluation system into something befitting 21st century technologies and needs. Fixed price contracts are a start, and the govt needs to avoid making radical changes in platforms that change contracts and drive up costs.

    • Aubrey

      What you cite is the strongest argument for re-opening a Navy owned and run shipyard. Or, at the very least, a public-private partnership.

      I’m a libertarian / conservative at heart, but even I can get on-board with that type of government involvement in the name of stronger and more effective shipbuilding.

      • Lazarus

        I agree that Naval shipyards could be useful, perhaps in turning out first in the class units for test/evaluation that could then be built in numbers by private yards.

        • leesea

          Disagree the Naval Shipyards should become SME on repairing warships and installing new mods

          • Secundius

            US Naval Ships, DON’T come with a Maintenance and Repair Warranty…

          • leesea

            But they do come with warranties when built. And after those expire, a shipyard private or public has to fix things. It depends on the type vessel and contract what k ind a work should or could be done in a publc naval yard?

          • Secundius

            Up until the Ship is “Actually” Turned over to the US Navy ONLY after the Completion of a Successful Sea Trial. The US Navy “Assumes” ALL Maintenance and Repair Costs.

            Just look at the USS Gerald R. Ford class Aircraft Carrier. It HASN’T “Successfully” met the General Acceptance of a “Successful” Sea Trial Yet. And General Atomics (Generally Atonic) has to FIX ALL Problems until the Ship is Actually Successfully Sea Trial Tests has been Passed…

          • leesea

            no the way the system works is Deficiency Cards are prepared before & during acceptance trials. Those DC are given to the builder, or sub or the Navy based on who is responsible party. The deficiencies are corrected during fitting out and the PSA. It is not so much based on a point in time as the Contract which trumps all tests (to include INSURV).

  • Dave_TX

    Get rid of cost plus contracts while at the same time not banning mission specification creep? Selling the use of your name on a building financed with other people’s money is orders of magnitude simpler than building a warship. Costs come down on series production. Congress needs to get real about financing weapon systems so that the development is faster. Instead, Congress starves budgets to make the numbers look good in a given year while stretching the development cycle and wildly increasing costs.

    • leesea

      The two LCS contracts are fixed-price now.

  • PolicyWonk

    “In terms of LCS, we have two production lines at two shipyards; taking
    advantage of that investment that already has occurred in the shipyards
    both from a people standpoint and infrastructure standpoint is
    important,” he said.”
    ================================================
    The two production lines at two shipyards, both delivering deeply flawed designs, should be shut down. Given that neither class (according to former CNO Greenert) was ever intended to “venture into the littorals to engage in combat”, especially when given the staggering costs associated with them, one has to wonder why these would be used as a way to gain more sea-frames when they clearly cannot deliver anywhere the value that was promised?

    The best option, is to leverage the FF4923 design from HII, that is already building on the slipways (but notably, wasn’t mentioned in this article). A vastly better and more useful design, proven seaworthy, with lots of room for growth and long legs.

    The other two shipyards (Austal and LockMart) could build FF4923’s under license, but they would then be constructing useful assets, instead of the corporate welfare programs they currently produce.

    The reality, is that for the long run, this nation (and its national security) could benefit greatly from putting the entire DoD acquisition system under receivership. The current one is rife with waste, redundancy, failure after failure, and easily garners the taxpayer with the lousiest deal for defense dollar spent in the western world.

    • publius_maximus_III

      More frigates, more frigates, more baby destroyer frigates.

    • Lazarus

      Neither LCS design is “flawed.” You may disagree on the speed and modularity verses range and armament, but that does not suggest a flaw. LCS casualties have been over-reported as opposed to other classes which make it appear that LCS is not as reliable.

      ADM Greenert was only discussing one aspect of the LCS mission when he said the class would not engage in littoral combat. What he was stating was that LCS would not actively hunt other ships as targets in the littorals. That mission is better served by aircraft/helicopters and now UAV’s rather than surface ships. “Littoral combat” hasn’t really been a surface warfare mission in high threat littorals since WW2. While Korea and especially Vietnam featured littoral combat, the threat from cruise missiles in those environments was limited or non-existent. Just because one CNO suggested something does not mean a ship’s mission will remain unchanged.

      A modified USCG national security cutter (NSC) will likely be a billion dollar plus “frigate” if so designed. The NSC already costs over $700m a copy and would require substantial modification (with extra costs) to make it a frigate. It has seen its own laundry list of problems. Look up the latest Congressional Research Service (CRS) report on the NSC’s testing process. It too had cracking issues, engine problems, jamming issues with its 57mm gun and other weapon/sensor troubles. Such a ship would not represent any leap in capability beyond the FFG 7 class, especially in that it has substantially smaller aviation facilities than both LCS designs. The small surface combatant task force considered a modified NSC design as a potential frigate, but rejected it; likely for issues of cost, diminished aviation facilities, and lack of any modular space for surface/subsurface unmanned vehicles. While the USN needs small surface combatants in support of their larger sisters like the DDG 51, it does not need another “heavy frigate/light destroyer” such as the FFG 7; a ship whose capabilities exceeded that of most of the world’s destroyers (such as the British Type 42 class) when first commissioned. European “frigates” are often now destroyers or even cruisers in disguise with the “frigate” designation to allay the fears of leftist parliaments fearful that their ships will serve in offensive roles. These ships fit into those nations’ order of battle in the same category as the US DDG 51 rather than as a low end warship.

      The US acquisition system is indeed in need of significant modification and overhaul for 21st century work, but the dollars poorly spent are wasted in excess bureaucracy rather than in poor products. Warships are not cheap, and other systems where they appear such are due to socialism and unique public/private partnerships that are not duplicable in the free enterprise US system. A return of some Navy yards would be useful in building one off ships for test/trial, but excessive US bureaucracy would limit the usefulness of such facilities to limited production.

      • leesea

        Lax you need to deal in numbers when describing ship types not subjective adjectives.

      • PolicyWonk

        A reasonable response. Except:

        The LCS-based variant of any frigate will cost a billion anyway – simply based on the very high costs of both LCS classes we have today.

        Adm. Greenert was quite succinct w/r/t his opinion of what LCS was intended for: so succinct, that Breaking Defense commissioned a naval weapons expert to investigate the possibilities/options for up-gunning/up-arming LCS – and published the results. You might want to read that article if you haven’t.

        The littoral mission might be more efficient with an UAV – but a UAV cannot loiter like a ship can. And a chopper is very easy to shoot down and/or detect. A shoot-down of an LCS’s chopper would render it all but blind.

        The promise of LCS simply never materialized – and that’s even agreed to (implicitly) by the USN. Neither the crewing plan or mission module plan has worked out – and these ships are VERY expensive given the ROI – let alone the current crewing scenarios.

        And while like any new ship, the NSC had its teething problems – few ships have had the continuous teething problems of the magnitude that LCS has – especially given how long they’ve been around.

        • leesea

          The next-gen FFG based on LCS will cost more because the Navy wants a bigger ship and lots more to be built into it. I would estimate something more like $750 Mil ROM.
          a UAV or RPV extends the LCS horizon over the littoral area which is good.

      • Curtis Conway

        Your whole argument is based upon a concept that precludes a surface combatant (a term that loosely describes an LCS or frigate version based upon survivability alone) being asked to do what all surface combatants end up doing in time of war. THAT is a mistake.

        Wisdom is ‘Plan for the worse and hope for the best’.

    • leesea

      sounds like you work PR for HII. While their Patrol Frigate was a nice concept, it will cost more than LCS. Ok.
      Since Austal is an all AL yard, it cannot adapt to a vastly different hull form. MMC could INSTEAD build one of the good frigate, cutter or OPV designs already in the Fincantieri design portfolio.

      • PolicyWonk

        Heh –

        Well, I don’t work for HII.

        However, the NSC has the qualities that make for a fine patrol frigate – and the navalized variant design is all but completed.

        Additional bonus: parity with the USCG.

        • leesea

          Agree but it might need some more space and weight reservations to hold all the Navy can dream up later on?
          I (OTOH) would like to see a true dual-service ship where HM&E are standard while the topside gear, weapons and sensors vary.

        • leesea

          BTW I don’t know of any navalized version on the NSC, being built. Can you point to that?

          • PolicyWonk

            Look up FF4923: these aren’t being built – but they are mostly designed. The Legend-class NSC has a lot of power, and a lot of available space (i.e. room for growth), and has the added advantage of a hot production line.

            So – there is an entirely viable alternative to the ill-conceived LCS classes, which despite their designation leaves the USN without a littoral combat platform.

          • leesea

            That design was a company proposal. I doubt it ever got off the drawing board, much less actual detail designs which the Navy would have to review before acceptance. That process can take as much as two years (not that it should~).

            With all the warship projects being “sent” to Ingalls I doubt they have the production capacity? Would be much better if next-gen frigate as built somewhere else and in multiple yards as well for industry support.

  • Curtis Conway

    “…many of their programs are in serial production and have already seen prices drop as procurement and construction has become more efficient.” EXACTLY! Like the National Security Cutter that is an all-ocean, multi-warfare capable platform with excess tonnage and growth space for current and future improvement, and with a steaming record for years without problems.
    As the AMDR matures in its testing and acceptance, and provides a capability that should be on every surface combatant, perhaps planning for mass production can be planned for now, to increase availability of the product, and minimize costs for greater number of units than currently planned.
    Standard missiles in all models will fall in this category and should receive similar consideration, perhaps necessitating co-production licensing with Allies like South Korea and Japan to increase inventories.

  • Secundius

    Hey, I DEMAND Lower Hotel Stay Cost at Trump Hotels! But TRUMP going to Give It…

    • Donald Carey

      You don’t need him to, if he charges too much you have lots of other hotels to choose from – with naval ship building, there is no real competition.

      • Secundius

        CEO of Lockheed-Martin, has been CEO of Lockmart since 2013. Ample Time to “De Fray” the Cost of the “JSF” Program, Yet Hasn’t. And TRUMP expect HER to Come-Down in the Unit Price of the Aircraft, “Dream On”. If you DON’T “Wash” My Back, why would TRUMP Assume that Lockmart is going to Lower Their Prices. People Who did it for TRUMP when HE was STILL a CEO for Trump Enterprises, STILL Got “Screwed” by TRUMP in the End…

        • Aubrey

          Dude…the caps lock key is not your friend…

          • Secundius

            Why do you care about my writing style? There are those Writing in “Leet” and in Emoji’s, and there Not Even Languages…

  • Ed L

    How long can an LCS stay at sea? 21 days? what happen to resupply at sea? maybe the resupply ship can anchor or laid too while doing the resupply if an UNREP can’t be done. I was on an AOE we did 139 days in the Arabian Sea without hitting a liberty port (at anchor every 2 weeks Muscat didn’t count). My Uncle’s Tin Can in WW2 went Months (the longest time my Uncle said was 14 months) without a liberty. Unless you count Guam in June of 1945. My Dad was a supply SGT at a Army Hospital there and was surprise when my Uncle Showed up at his office. My Dad try to join in January of 42 but his bad ear kept him. Later on, Dad got a medical wavier since he could type, keep records, The company he worked for before the war built the Pentagon.

    • Secundius

      If the Speed is Limited to 14kts, then Unsupported Endurance is ~10.4-days for the “Indy” and ~8-days for the Freedom…

  • old guy

    When my team did a preliminary design for DDX a “Captains board”
    immediately added so much stuff it would have made it the size of a Battleship. We had to start again as DDM. After much wrangling we finally built it. Still, the add-ons fequired us to build the first flight
    without A/C handling, later added. Configuration control is essential to cost control.

  • leesea

    PEO Ships says he is driving down costs by leveraging current production lines, then WHY did the last (additional) LPD17 cost more? And why is the LXR expected to cost even more? And why are we even buying Billion Dollar Amphib warships?
    The LCS numbers are misleading. While the Hull costs are trending down by fixed-price contracts, most post-delivery costs are going up. Not to mention the mission package costs are added on and not doing well in development (RMMS cancelled).

    A basic fact of life in shipbuilding that PEO Ships seems to overlook is:
    ALL changes no matter When cost more money. Whether for re-design, revised engineering, or simply production changes.

  • Donald E. Szulist

    The Zumwalt does not steam through the water, It’s shocking it way along.

  • Secundius

    Patrol Frigate “Possible” Concept’s for the 2019 Frigate Design Competition.

    1. http:// i333. photobucket. com/ albums/ m390/ pjillytightfists/ USNFrigateEvo. png

    2. http:// dmn. wpengine. netdnd- cdn. com/ wp-content/ uploads/ 2012/ 04/ PF-4921. jpg

    3. https:// www. reddit. com/ r/ worldpowers/ comments/ 2ls33r/ event_awww_shit_its_the_pennsylvania_shop/

    4. http:// forummarine. forumactif. com/ t834p50- programme- du- lcs