New Ford Class Flattop Construction Costs Still Climbing

Back in April 2009, when Defense Secretary Robert Gates upended the program of record, he announced that construction of the new Ford (CVN-78) class carriers would be slowed to one carrier every five years. His reasoning: it would put carrier construction on “a more fiscally sustainable path.”

Naval analyst extraordinaire Ron O’Rourke explains how it was supposed to work:

“As a simplified notional example, if carriers are assumed to cost $10 billion each, then shifting from a four-year interval to a five-year interval would reduce the average amount of carrier procurement funding needed each year from $2.5 billion to $2.0 billion, a reduction of $500 million per year.”

That is not what’s happening. O’Rourke crunched the latest figures on the first three ships in the Ford class and they don’t look good. The estimated costs for CVNs 78, 79, and 80 in the proposed 2011 budget are 10.3%, 13.3% and 26.7% higher than the same estimates in the 2009 budget. In the 2009 budget, CVN-80 was projected to cost $10.7 billion; now its projected cost is $13.5 billion.

He surmises that increasing the build interval may reduce “learning-curve benefits” from one carrier to the next and may reduce the spreading of fixed overhead and material costs by the shipyards. The five year interval might also have a ripple effect on other ship builds, including mid-life reactor refueling on the Nimitz class carriers and the Virginia class submarines.

More squeeze on an already tight shipbuilding budget.

-- Greg Grant

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