McCain: Navy Shipbuilding Plan Is A ‘Fantasy’

The top Republican on the Senate Armed Service’s Seapower Subcommittee on Wednesday called the Navy’s shipbuilding plan a “fantasy” that is paralyzing the service’s and industry’s ability to conduct realistic long-term planning.

The Navy’s long-term plan to expand and modernize its fleet, which could be delivered to Capitol Hill this week, depends on investment levels that would be “very difficult to achieve,” Arizona Sen. John McCain argued at a hearing with senior Navy officials

Even so, the Navy still does not expect to meet its goal of a 306-ship fleet until 2037. “For another 23 years, we will assume significant risks in the ability of our Navy to protect U.S. interests around the world,” McCain said.

The Navy requested $10.9 billion for new ships in its fiscal 2014 budget request, which does not factor in budget caps that will remain law unless Congress and the White House can agree to another deficit-reduction agreement.

Despite budget pressures that are expected to plague the department over the next several years whether or not there is a deficit deal, service officials expect the annual shipbuilding budget to grow over the next five years, ultimately hitting $17 billion in fiscal 2018.

In total, the Defense Department’s $526.6 billion request for next year is $52 billion over the caps. If the caps remain in place, the Navy estimates it would have to trim more than $1 billion from its shipbuilding accounts if the cuts were made indiscriminately..

That cut would come on top of a $1.7 billion reduction to shipbuilding this year, although Navy officials told the panel they have been able to ameliorate some of the immediate effects of sequester by liquidating unused prior-years funding and deferring some work to the future.

But Sean J. Stackley, the Navy’s assistant secretary for research, development and acquisition, told the panel that the service used up much of its wiggle room to make up for the sequester cuts this year. If the lower budget levels continue into next year, they would directly affect the Navy’s shipbuilding rates, creating uncertainty in the shipyards and among vendors.

“Everything that we have been doing to reduce the cost of our shipbuilding program – whether its stabilizing requirements, whether its trying to get stable production rates that allow investment by the shipbuilders, trying to wrap in a multiyear [procurement contract] where we harvest significant savings, putting that inside of a fixed-price contract where we have confidence in savings – sequestration unravels that to an extent,” Stackley said.

McCain, however, argued that missteps on some Navy programs are only compounding the risk the service would assume though budget cuts. The beleaguered Littoral Combat Ship program, for instance, will comprise more than one-third of the service’s surface combatants by 2028 but has not demonstrated it can adequately perform its missions, McCain argued.

“We need to fix it or find something else right away,” he said.

Vice Admiral Allen G. Myers, deputy chief of naval operations for integration of capabilities and resources, said the Navy is confident in the LCS program and their ability to implement it into the fleet.

“We’re going to find issues, we’re going to have discovery, before it enters the fleet for operational capability,” Myers said.

In another hint of his priorities as the Senate panel moves toward its markup of the annual defense authorization bill, McCain also criticized cost overruns on the Navy’s next aircraft carrier, CVN-78, whose price tag has grown from $10.5 billion to $12.8 billion.

“Newport News is the only game in town. Nobody else builds aircraft carriers,” McCain said. “What can we do to prevent this kind of cost overrun, which I can tell you in the minds of my constituents is unacceptable when we have a terribly damaged economy?”

Stackley called the cost growth on the ship “unacceptable” and attributed it to the Navy taking too much risk on the design of the carrier, which is the first of its class. The Navy, Stackley said, is “rewriting the build plan” for the next carrier to make it more efficient and is taking other cost-reduction steps.