The Navy only “thinks” it has a delivery schedule for new submarines

Tom Temin And this is indeed one of the central programs of the Ministry of Defense, one might say, this new class of nuclear submarines. It’s compatible with the Virginia, but it’s a new type of vessel, right?

Shelby Oakley This is our replacement for the maritime branch of the nuclear triad. This is a key aspect of our nuclear deterrence policy within the United States. And this is the number one priority for the Navy.

Tom Temin And you found that the way the Navy ran it was missing key program best practices?

Shelby Oakley Yeah, I mean, I think one of the things that we’ve been saying about this program for a long time is that it’s so big and so complex and so important to implement in a timely manner that having the types of analyzes that help you understand what are your risks and what are the problems that you may face and what is the cause of some of the problems that you face, which will allow you to make better decisions, reduce risk and take action to solve these problems before they become serious. problems. And we just discovered that the Navy didn’t do that with respect to its schedule.

Tom Temin And what has already caused some delays? I mean nothing ever gets delivered on time. And this is an extremely complex vessel. And what has been the problem so far?

Shelby Oakley That designing the ship was not an easy task. So, being able to pump out design products and being able to deliver documentation to the team of people who are building these things, to be able to have paper on hand, to be able to say, here are the steps I need to take to make building this thing less efficient, than they expected. Another problem that the program continues to face is that, due to the lack of a supply base, the industrial base of submarines and shipbuilding in general has really atrophied over the last 20-plus years. And the Navy is focusing on building a backup of that supply base so it can meet demand. And I think the Columbia class program is one of those that has run into some of those same problems with single source or sole source suppliers, people who would normally do the kinds of work that they need, so that those subcontractors just aren’t there anymore was nearby. And so you have to really focus on that. And there are also problems with personnel. When you’re expanding this giant new Columbia-class program and at the same time trying to build Virginia-class submarines, as you mentioned, that requires a pretty significant workforce. And this simply does not exist now. Thus, Navy construction workers had to focus on building a workforce to be able to meet the needs of these programs. And this is a continuous process.

Tom Temin And who is Columbia’s general contractor?

Shelby Oakley Electric Boat is the prime contractor for the Columbia class program, and they are partnering with Newport News in Virginia to be able to deliver key aspects of the submarine to Electric Boat.

Tom Temin So in that sense, we have the only source of nuclear submarines in the United States.

Shelby Oakley Two builders, two builders of nuclear submarines, nuclear ships in general. So I think that’s another key thing, right, is that it’s the only game in town. And so the Navy really needs to work with them to ensure their success. And that’s what they do. They’ve been trying to build up this expertise, experience, capabilities and capabilities and work with these companies to be able to do that so that we can get the submarines we need when we need them.

Tom Temin Right. And the backdrop to all of this is that the Navy needs such capabilities. The United States needs this capability because, as you say, it is one of the triads of deterrence. In fact, despite some talk in Congress and some criticism in the background, it may not even be a triad, but rather a dyad. And so submarines will definitely be part of it, no matter what else they cancel at some point, if they do.

Shelby Oakley We are really feeling the effects of the delay in making decisions on the recapitalization of the nuclear triad, which has taken place over a number of years. So you mentioned the Sentinel program, which itself is facing a lot of problems right now, but we’re also building new bombers. And with the help of this program, all three areas are recapitalized simultaneously. And that’s a huge cost, and it’s a huge risk for us if we can’t achieve it. Hopefully we can overcome many of these challenges and get these programs up and running.

Tom Temin We speak with Shelby Oakley. She is the Director of National Security Contracting and Acquisitions at GAO. What would you recommend the Navy do to make this program more predictable?

Shelby Oakley Therefore, we made a number of recommendations to the Navy. Well, first of all, we’ve been doing this work for six-plus years, and over those years we’ve made a lot of recommendations to the Navy related to the Columbia-class program. So, a couple of things that we focused on this year was by looking at the costs, the costs of the program and asking the program to revise their cost estimate so that it actually included the risks that were identified, like things that they know are already on the list of likely… to happen. And then really reflect in the cost estimate where we saw historical performance trends. So don’t think that suddenly everything will become super efficient and we will overcome everything. They actually reflect reality. So we definitely have that. We want them to look at the root causes of the cost and schedule impacts that have occurred so far. This is an analysis that the Navy did not conduct. And so we want them to understand what those root causes are so that they can then take corrective action. There’s a lot of money – we haven’t talked about it – but the Navy and the Department of Defense are spending a lot of money to strengthen the supplier base for the Columbia-class program. This leaves Electric Boat with a tidy sum of money to hand out to suppliers to help them improve their operations and make the necessary investments. But what we found is that they don’t really track or have a mechanism to say, “Is what we’re investing in actually leading to improved production efficiency?” And so we really want them to understand the return on investment that we get from this investment, which is quite significant. Finally, one way that contractors try to overcome some of their productivity problems is by outsourcing more of the work that they would normally do in-house. This means handing it over to another contractor. The problem is that the Navy’s quality control is really focused on the prime contractor and the work they do. And so, as all of this critical, high-risk work is outsourced to a prime contractor, we want the Navy to think about its quality assurance people (as it’s called a “spy ship”), whether they have the necessary resources and whether Do they have the supervision necessary to oversee work performed outside the general contractor? Therefore, we have given some recommendations related to this.

Tom Temin Yeah. Sounds almost like a Boeing 737 where they outsourced the entire plane to almost someone else and then ended up buying out that supplier. Crazy stuff. And expensive. Does it make sense for the Navy to have those areas that are most critical from the point of view of the lack of a supply base? I mean, where is it? Is it a matter of propulsion, nuclear purpose? Is it the shooting, is it the missiles, or what?

Shelby Oakley That’s all. I mean, it’s basic stuff, like forgings. The many capabilities needed to build large structures and the like are some of the things that present a challenge. You might think that all this complicated stuff is super technical. But no, these are like the basic things that are needed to build a significant ship. And these are just some of the things they have invested in.

Tom Temin And it looks like this could affect the life cycle cost of the entire program, because with all this it’s like improvising to build one, and two, three and four could be very different from number one, which means training, replacement costs and support grow over the life cycle because number three is nothing like number one when you take the panels off.

Shelby Oakley Well, let’s hope that’s not the case. I mean, I hope the design will be fairly stable as we move forward. I think this is the problem, but I have two comments about it. Due to the lack of analysis they are doing, our own analysis suggests that the cost of building the lead submarine – namely the cost of building the lead submarine – will be almost five times greater than what the Navy says, and six times more than what Electric Boat says. And so when you think about predicting the outcome of the program, we expect it to get a lot worse. And now they haven’t even started the most difficult stage of building the lead ship. I think the Navy should be able to think about how they can address issues like this in future construction of these submarines.

Tom Temin So you’re saying that instead of just throwing out a $1 billion figure, it would be $5 or $6 billion per copy or perhaps a multiple of that figure, but that’s the ratio you’re talking about.

Shelby Oakley Conditionally. The Navy considered the exact numbers confidential information. That’s why we kind of stick with five or six times that. But in the report, we’re talking about hundreds of millions of additional dollars to build a guideline that will be the taxpayer’s responsibility.

Tom Temin In short, what is the status of ship number one? Can this be identified? I mean, could you walk by and say it’s a submarine? Or is it just a collection of pieces at this point?

Shelby Oakley At the moment, the facility is about 60% complete. And so you can definitely see things and see things coming together. But I think that’s why we think it’s so important for them to have this analysis because they’re entering the most difficult phase, the final assembly and testing phase, where they’re going to take these large super module segments of the submarine and start putting them together, testing and making sure they kind of work together. And I think this is where you’ll end up running into some problems that you’ll need to solve at this point. And while we hope – and I think the other thing I would say to kind of hammer this home is that in order to be able to adapt to some of the problems that they’re already facing, they do things that less than optimal. If you have something late, you think, “We are expecting it this year, but it hasn’t arrived.” Now we need to move it here. It will be difficult because we will have parallelism. We have other things we are working on. And so I think the Navy is really at that point and Electric Boat is really at the point where it’s not the most efficient approach to construction that they had in mind.

Tom Temin And they have to hope that the bolts will line up with the holes when they put it all together.

Shelby Oakley True.

Tom Temin Basic, but you can’t count on it.

Shelby Oakley Yes, exactly.