CVN 78-USS Gerald R. Ford

Ford Carrier Costs Rise

 The overall CVN-78 Gerald R. Ford-class aircraft carrier program price tag is increasing roughly $2.2 billion -- or about 5.5% -- to $42.5 billion, the Pentagon estimates in its recent Selected Acquisition Report (SAR).

The increase includes an additional $951 million for the application of revised escalation indices and another $811 million for revised estimates on non-recurring engineering, Dual-Band Radar (DBR), and construction performance variance for the Ford carrier, the SAR states.
The increase also includes about $1.2 billion for higher estimates for non-recurring engineering, basic construction and Government Furnished Equipment, overhead and industrial base impacts, and inflation for the follow-on carrier in the class, the CVN-79 John F. Kennedy.
The increase was partially offset by a revised estimate to reflect the application of new outyear escalation indices, which resulted in a decrease of about $710.5 million.
The Pentagon's Director of Operational Test and Evaluation had been warning in recent reports about possible carrier cost increases due to DBR, because testing for the new radar suite had been suspended at the Wallops Island (Va.) testing facility for the DDG-1000 Zumwalt-class destroyer, which had initially been scheduled for that radar suite.
The Zumwalt is now set to receive a different, scaled-down radar package, and Navy officials have downplayed the effect on the carrier program, which was slated to leverage DDG-1000 radar development to keep a lid on carrier radar costs.
Growing carrier costs on the Ford program have come under increasing scrutiny by Pentagon officials and lawmakers. Many analysts had predicted the program would be whittled down in the proposed fiscal 2013 spending plan.
Instead, the U.S. Navy's proposed fiscal 2013 budget request anchors the aircraft carrier for the coming year and across the proposed Future Years Defense Program (FYDP).
The budget proposal adds $811 million to the CVN-78 Gerard. R. Ford budget across the FYDP.
The Navy is requesting $608 million in fiscal 2013 to initiate the detail design and construction contract for CVN-79 John F. Kennedy with the intention of incrementally funding the ship over six years.
"The next-generation carrier," the service states in budget documents, "will be the future centerpiece of the carrier strike group and a major contributor to the future expeditionary strike force."

Northrop Grumman Concept

Navy confirms cost overrun on CVN 78

Navy Secretary Ray Mabus confirmed Thursday that the cost overrun for the aircraft carrier USS Gerald R. Ford is projected to reach $1 billion, bringing the ship’s total cost to some $12 billion — but said it’s on track to be delivered on schedule.
The admission took place under questioning from Arizona Sen. John McCain, the ranking Republican on the Senate Armed Services Committee, who pointedly asked Mabus “what have you been doing on your watch” to control the costs on the new ship.
Mabus said the Navy’s deal with shipbuilder Huntington-Ingalls Industries is such that the government has “recovered its fee” for the project, and remainder of the money for the ship will only go to cover its costs. He also said the Navy expected to use the lessons learned on the first-in-class Ford to make sure the next ship, the USS John F. Kennedy, would not have the same types of cost problems.

Would the Navy need to ask Congress for permission to go above the cost cap on the ship? McCain asked. Not this year, Mabus said — but next year, the service will probably have to get special authorization to pay to continue building.
Navy officials had said before that their worst-case scenario for the Ford was a $1.1 billion cost overrun, and that’s what they had planned for internally. But they said they thought the previous public number, $800 million, was probably as bad as it would get, leaving some headroom in their plans for the medium term.
McCain told Mabus that he’d be “reluctant” to spend more money on the Ford class until the Navy and Huntington-Ingalls can show they’ve gotten the ships’ costs under control. But there doesn’t seem to be any serious threat to the future of the program — if the Pentagon wanted to save the money it must spend on carriers, it could have reduced its requirements in its new “strategy” But it didn’t.
What’s difficult to understand is just how the ship could continue to increase in cost even as it stays on schedule. Often, ship cost overruns take place because engineers need to go back and undo or redo earlier work, which adds delays, which add costs. It’s possible that H-I built enough of a cushion into the schedule for the Ford that the problems it has been having could just absorb more money without needing more time, but we’ve asked for more information to be sure.
And as embarrassing as it might be for the Navy to admit cost growth on top of cost growth, and need to come back to Congress cap in hand, this situation could be a lot worse: Skeptics feared for years that the Ford’s advanced new Electromagnetic Aircraft Launch System — which takes the place of the Nimitz class’ old fashion steam cats — might not work. That could have necessitated ripping the ship apart and installing a steam system, to the tune of new costs that could dwarf this one.
By all accounts, however, EMALS works and the Navy appears to expect it to work at sea. We’re a long way off from actual, underway proof of that —  first the Navy just has to get this ship built.
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