NATIONAL HARBOR, Md. — The Navy is evaluating the supply chain supporting construction of the USS Gerald R. Ford
(CVN-78) in an effort to rein in ballooning costs on the first ship in the next class of aircraft carriers, Vice Adm. Kevin McCoy, the commander of Naval Sea Systems Command (NAVSEA), said yesterday.
“The biggest area right now in terms of where we are seeing cost overruns is in government furnished material and contractor furnished material,” McCoy told an audience at the Navy League’s Sea Air Space Exposition just outside Washington.
The Navy and contractor Huntington Ingalls Industries [HII] have both brought in experts in supply chain management to expedite the process and reduce costs, McCoy said. He said the Navy is also looking at contract actions to keep costs under control, as well as build sequences and design specifications that could be applied to improve the process for the second carrier in the CVN-78 class, the John F. Kennedy (CVN-79).
The Ford is on pace to exceed $12 billion in costs, or at least $1 billion more than had been projected. In addition to cost growth in the supply chain, the Navy has attributed the overruns to a decision made under the Bush administration to try to cram in as many new technologies as possible into the ship, rather than spreading them out over the production of new ships. Navy Secretary Ray Mabus said earlier this year that strategy was a mistake.
Sean Stackley, the Navy’s assistant secretary for research, development and acquisition, told the House Armed Services Committee’s seapower subpanel March 29 that the Navy will focus on stabilizing the cost of the Ford at HII’s Newport News Shipbuilding facility in Virginia before exploring the possibility of a partial block buy on the subsequent two ships.
“Our first focus right now is to stabilize the first ship, get cost under control,” Stackley said. The Navy plans to procure the CVN-79 John F. Kennedy in fiscal 2013.
Stackley said the Navy is evaluating the lessons learned during the construction of CVN-78 to come up with an “optimal” build plan for the CVN-79 and will “take a hard look” at what opportunities there are across CVN-79 and CVN-80 to save money.