Various responses to this report have added valuable insights to specific issues. This feedback has been integrated into an updated version of the ‘Abandon Ships’ report. Most significantly, a revised Navy shipbuilding cost estimate for Fiscal Year 2009 illustrates the scope of the strategy-reality disconnect (see A Growing Congressional Backlash). Furthermore, recent developments in the Navy’s destroyer procurement policy warrant an extension of the respective section in this report (see DDG-1000 Guided Missile Destroyer).
The Navy’s procurement policy is in serious disarray. Unrealistic force plans, overoptimistic cost estimates, unrealistic projections of technical feasibility, and inadequate program management have created an unaffordable ship building program, led the Navy to phase out capable ships for new ships it cannot fund, and threaten the US Navy’s ability to implement an effective maritime strategy.
Key mission areas such as amphibious lift capability and the number of attack submarines are likely to be affected by funding shortfalls. To compensate for such gaps, the Navy relies on untested and unbudgeted assumptions about extended service life cycles for amphibious ships, cruisers, and destroyers.
The problem starts at a conceptual disconnect between strategy and reality. The Navy’s Cooperative Strategy for 21st Century Seapower is a set of concepts that was not linked to any clearly defined force plan, modernization plan, program, or budget. Navy shipbuilding plans are now shaped more as the result of budgetary constraints than as a response to strategic requirements. They seem to be an expression of wishful thinking rather than a realistic strategic guideline for naval procurement.
The Navy has revised its average annual cost estimates for the implementation of the 30-year shipbuilding plan by 44 percent from FY2008 to FY2009 and still falls 7 percent short of estimates by the Congressional Budget Office. These Navy estimates are a virtual confession of the disconnect between strategy and reality in shipbuilding and force planning. Cost overruns, such as estimated $1 billion for the CVN-78 aircraft carrier jeopardize the entire program. Overoptimistic cost estimates have led Navy officials to shift funding to the outyears. This will cause a temporary shortfall of carriers and a breach of US law.
Unrealistic cost estimates and doubts about requirements have led to the cancellation of the DDG-1000 guided missile destroyer project. After expenditures of over $10 billion, the program is abandoned at two ships, and the production line of the older Arleigh Burke-class destroyer will be reopened. A similar fate has struck the Littoral Combat Ship program, where a threefold cost increase and unrealistic schedules led to the cancellation of appropriations for the next two ships and to consequential rescheduling of the program. The discrepancy between plans, strategy, and reality will further produce a shortfall of nuclear submarines of up to seven boats over twelve years.
This reality-strategy disconnect in the entire shipbuilding program is a case study in failed leadership on the part of the most senior officers and civilians in the Navy. No reforms in procurement, changes in program management, cost analysis, and test and evaluation can begin to compensate for taking hard and realistic decisions at the top, and holding senior flag officers, senior civilians, and the Secretary of the Navy accountable. The Navy’s shipbuilding efforts are – to be charitable – a triumph of hope over experience. The consequence is a loss of credibility with lawmakers and appropriators and a fleet underequipped to meet the strategic requirements.
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