The cost estimate of the Navy’s second Ford-class aircraft carrier has already jumped by $370 million even though Navy leaders have promised the service has learned from its mistakes that led to $2 billion in cost overruns for the USS Ford.
The Pentagon’s Cost Assessment and Program Evaluation office, or CAPE, has estimated that the USS Kennedy construction costs have increased by $370 million, according to a Bloomberg news report. The USS Kennedy, or CVN 79, is now being built by Huntington Ingalls Industries in Newport News, Va. and is slated to enter service in 2023.
Upon hearing the new estimate, Sen. John McCain, chairman of the Senate Armed Services Committee, said he was upset and warned further cost overruns could put the program in jeopardy.
“Accountability must be restored to the Ford-class aircraft carrier program,” McCain said in a statement. “Our nation simply cannot afford these kinds of cost overruns amid rising global threats and fiscal challenges.”
McCain said Navy leaders had said earlier this year that the service could deliver the aircraft carrier for $150 million below the original budget meaning the “CVN 79 is now $520 million over the Navy’s estimate,” McCain said in a statement.
In the past, cost estimates by CAPE officials have been challenged by the respective services who may use a different methodology for estimating costs. However, McCain said he expects to “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” if the estimate is accurate.
McCain cited the billions in cost overruns for the first Ford-class carrier, the USS Ford. The USS Ford, scheduled for official delivery to the Navy next year, was widely criticized by lawmakers and analysts for cost overruns of more than $2 billion bringing the platform’s price tag up to $12.8 billion.
The Navy is testing and further developing the USS Ford to enter service while concurrently making early progress building the USS Kennedy.
Senior Navy leaders and Huntington Ingalls Industries executives have made numerous public statements that lessons from the construction of the USS Ford were being harnessed and applied to the Kennedy’s development as a way to control costs.
Navy leaders said new construction methods would save billions in non-recurring engineering costs because the designs were completed before construction had begun.
However, following the new cost estimates, Navy officials are not commenting on the reported cost growth for the ship.
“We do not discuss pending legislation, however controlling and improving CVN 79's cost is of highest priority to the Navy. The Navy is committed to maintaining the cost of CVN 79 within the Congressional cost cap of $11.498 billion,” Navy leaders said in a statement.
Ford-class Carriers
The Ford-class ships are engineered with slightly larger deck space than the Nimitz-class to allow for a greater sortie rate, more computer automation to reduce the need for manpower and an electromagnetic catapult to propel jets off the deck an into the sky over the ocean.
The new electromagnetic catapult system and new advanced arresting gear are designed for smoother, safer and more efficient take-offs and landings compared to the steam catapults now used on today’s Nimitz-class carriers.
Also, the Ford-class carriers are being built with three times the electrical power generating capacity compared to Nimitz-class carriers, Moore said. The USS Ford will have four 26-megawatt generators bringing a total of 104 megawatts to the ship
Regarding the USS Ford, a ship which is still integrating a handful of these new technologies prior to delivery, McCain added that he did not think the design was stable enough.
“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.”
The new issues of cost growth for the Kennedy are taking place within a broader context of criticism and concerns from lawmakers about costs for the Ford-class carriers in general.
Senate Oversight
The Senate Armed Services Committee is now proposing a series of new measures in the 2016 defense bill designed to control costs and provide oversight to the carrier program.
The new provisions direct a Comptroller General review of Ford-class carrier cost estimates and also limit some procurement funds for the Kennedy and its planned successor, the USS Enterprise.
Advance procurement funds for the USS Enterprise, or CVN-80, will be limited by $191.4 million until the Navy provides a justification of the costs and certifies that the design will repeat CVN-79.
The Senate committee also directed the Navy to complete two specific reports -- one of them on cost control options for CVN-79 and anotherexploring potential future platforms designed to supplement or replace the Ford-class carrier.
Earlier this year, the Navy began a formal study to assess ways to lower the costs of aircraft carriers, explore alternatives to the big-deck platforms for the long-term future and increase competition among vendors.
The study, expected to last about a year, will examine technologies and acquisition strategies for the long-term future of Navy big-deck aviation in light of a fast-changing global threat environment, service officials said.
Configurations and acquisition plans for the next three Ford-class carriers, the USS Ford, USS Kennedy and USS Enterprise are not expected to change – however the study could possibly impact longer-term Navy plans for carrier designs and platforms beyond those three, Navy leaders said.
SASC lawmakers also reduced the Congressionally-mandated cost cap for CVN-79 and subsequent carriers by $100 million.
Finally, the SASC provisions direct the Secretary of the Navy and the Chief of Naval Operations to personally sign off on any new design changes to the Ford-class carriers that exceed $5 million.
-- Kris Osborn can be reached at Kris.Osborn@military.com
