I love it when uppity bloggers disprove their own point.
OK, let’s assume, for the purposes of discussion, that VADM Barry McCullough, who is the Deputy Chief of Naval Operations for Integration of Capabilities and Resources, is not an idiot, but has just been badly advised. He is quoted in Inside Defense as saying: “You don’t have a realistic view of what the cost will be, the recurring expense, until about the fifth ship of any type,” he said. “That doesn’t mean five LCS’s, that means five of each kind. And that’s pretty much where you figure out what the recurrent cost is going to be.”
Wrong. Any experienced and capable shipbuilder can estimate the cost of the ships it builds, including the shape of the “learning” curve, assuming that the design has been properly developed. If they couldn’t, they would never be able to bid for fixed-price contracts – e.g., all commercial work – and would be out of business. This includes all three LCS builders – Marinette, Bollinger and Austal – and Austal’s prime contractor, Bath Iron Works. (It doesn’t include Lockheed Martin, who got out of shipbuilding in the 1980s after realizing that it was altogether too difficult for them.) If you have been told otherwise, Admiral, you have been misinformed.
At this point, I would point out that the Navy has not shown a good history lately, with the exception of VIRGINIA, of having a properly developed design before launching into production. Add onto that the pesky little requirement of making sure your ships are capable of fighting the threats of the world as they are discovered. This also tends to preclude having solidified designs that are comparable to commercial shipbuilding industrial practices.
And finally, if “any experienced and capable ship builder can estimate the cost of the ship it builds” how come nobody has been able to stick to anything that slightly resembles their original estimate? I’d say all parties are at fault on this one. The Navy can’t decide what it wants (changes based on threats notwithstanding) but the shipyards have no clue on what it will take to build it either and, I would suggest, lowball the price estimate in order to get the contract knowing full well they intend to stick it to the Navy when they can’t meet their projections.
Just my hunch. But I digress…
Back to my original point, I would point these things out to Mr. Colton in an effort to delineate the folly of his logic, but it would be a waste of time because he does it himself.
There are two principal reasons that the LCS costs are still shrouded in confusion. First, the Navy is still making endless design changes – just ask Colonna’s, where LCS 1 has spent most of this year so far and where she will practically be living for the rest of the year: Admiral, you and the Navy’s acquisition executives need to stop all this messing around, freeze the designs and let the shipbuilders get on with building the ships. Second, the Navy (and the Congress) have unrealistic expectations regarding cost: if you want to come in under the cost cap, you need to eliminate some of the bells and whistles. Finally, if you could restructure these contracts so as to make the shipbuilders the prime contractors, so much the better.
Good grief, when Secretary Lehman said the other day that the Navy looks incompetent, he wasn’t kidding.
The only problem is that he doesn’t realize he gave the reasons for the issues in the first paragraph in his second.
I’m sure he’s not the type to let logic get in his way though. He probably makes a sweet buck as a consultant.*
* consultant being a gaelic word that means “has lots of opinions but shit for results”