By Emelie Rutherford
The Navy’s decision to negotiate a firm-fixed-price contract with the builder of a new and closely watched aircraft-carrier catapult system reflects the company’s confidence in the product amid the service’s concerns about further cost growth, a service official said.
Navy acquisition chief Sean Stackley said making the production contract for the Electromagnetic Aircraft Launch System (EMALS) a fixed-price deal–instead of a cost-plus contract, as previously planned–was a starting point in ongoing negotiations with General Atomics.
“Our concern (was) we saw continued cost growth (with EMALS’ development), and so we turned to the company, we said. ‘We have concern that this isn’t the end of the story,'” Stackley told reporters last Friday on Capitol Hill. “They’re confident, they’ve demonstrated why they’re confident. And then we say, ‘OK, that being the case, we’re ready to go to fixed price.'”
The sea service last month reaffirmed its decision to use the electromagnetic system on the forthcoming Northrop Grumman [NOC]-built USS Gerald R. Ford (CVN-78), instead of reverting to a traditional steam-catapult setup, as concerns rose about cost growth and schedule slips with EMALS development. The Navy announced at the time it would negotiate the fixed-price production contract with General Atomics for the EMALS production effort (Defense Daily, April 17).
General Atomics “had some difficulty transitioning from development to production,” Stackley acknowledged.
Yet, on the positive side, he said, EMALS technologies have performed in demonstrations during the “robust” development effort, component costs are known, and officials are “over that hump in terms of understanding production costs.”
“So (General Atomics’) confidence, our confidence leads to a fixed-price contract for production,” Stackley added. ” Our confidence (is) in performance in what we demonstrated so far. They’re willing to agree to take any changes that come out of development inside of that fixed-price contract.”
A Navy review earlier this year determined sticking with EMALS would not alter the Ford‘s delivery schedule, while dropping the electromagnetic-launch program for the carrier and instead using a steam setup would delay the ship’s delivery by 12 to 18 months, he said.
“EMALS has increased cost; however, going back to steam, cost increases associated with that schedule delay wash it out, if you will,” Stackley said. Thus, the Navy will manage the electromagnetic-launch system’s risk in return for its greater capability, he said.
Stackley declined to say how much EMALS’ development costs have increased, citing ongoing negotiations with General Atomics for the production contract.
That early-2009 review, Stackley added, “wasn’t’ a question of sticking with EMALS or canceling EMALS.”
“It was a question of, let’s take a look at, are we on the right path in terms of development, do we have adequate management in place,” he said, also noting the analysis of reverting to a steam system.
The Navy last year determined additional EMALS management was needed in several areas. Now new government and industry management teams are overseeing the effort, Stackley said, adding there is “significant oversight of General Atomics’ performance.”
“What we’re working on right now is not so much the oversight of General Atomics but the integration of General Atomics with Northrop Grumman Shipbuilding for delivery of EMALS to the ship,” he said.
Earlier on Friday, Seapower subcommittee Chairman Gene Taylor (D-Miss.) said he will recommend adding to the defense authorization bill a mandate for the Navy to appoint one officer to be in charge of EMALS until the prototype is accepted by the Navy, and another officer to steer the effort until the Ford is delivered to the service.
Stackley told Taylor he has already determined the Navy’s EMALS program manager–whom Stackley called one of the service’s “superstars”–needs to remain on the job until the System Development and Demonstration phase is complete.