Panel II of a Hearing of the Seapower and Expeitionary Forces Subcommittee of the House Armed Service Committee - Fiscal Year 2009 Defense Budget (Navy)
Panel II of a Hearing of the Seapower and Expeitionary Forces Subcommittee of the House Armed Service Committee - Fiscal Year 2009 Defense Budget (Navy)
REP. JOE COURTNEY (D-CT): Thank you, Mr. Chairman.
Dr. Labs, I think I counted the word "disconnect" in your testimony about a half dozen times. The -- you know, really, I'm looking at it from up above or 30,000 feet or whatever, your description describes a fairly, almost incoherent arrangement in terms of targets that people are trying to reach at. Is CBO going to -- I mean, do you look at the plan in terms of ships, and do your own sort of run as far as what you think it would cost to get there versus what was submitted to the Congress by the Navy?
DR. LABS: Yes, sir. We generate our own cost estimates for most of the ships in the ship building plant. There are a few small items that we may adopt the Navy estimates on, but all the major shipbuilding programs, we try to come up with an independent estimate.
REP. COURTNEY: And is that still -- are you still sort of crunching the numbers on that, or is that something you've already arrived at?
DR. LABS: Based on the available data that we have today, we've got an estimate that's in the prepared statement that is our current estimate. Now, depending on what kind of information -- you know, I was explaining to some of the staff, for example, that depending on what kind of detailed information we got back from the Navy on their individual ship costs, we might have to go back and kind of look at our assumptions and see if what we had done was reasonable, because at the time, it appeared to us that the Navy's unit costs for many of its ship programs were as high or higher than ours, at least in the outyears.
Now, having received this detailed information just last night at 6 PM, the unit costs that they are listing there -- that does not appear to be the case, and I'm not exactly sure why that is, and see if they've got some, you know -- I just don't quite understand what's going on in there, and we're going to try and figure out why that is. But overall, the estimates that I provide here, CBO estimates are generated by us in house.
REP. COURTNEY: Is it higher or lower?
MR. LABS: Well, as mentioned earlier, in the -- through the 2020 period, the ship unit cost estimates that CBO has are higher than the Navy's by varying amounts depending on the ship program. Beyond 2021, the total shipbuilding budget costs that were displayed in the plan, in the figure one in the Navy's shipbuilding plan, would imply that at least some of their unit cost estimates would have to be higher than CBO's, although that did not prove to be the case in the detailed information that we received. So again I'm not sure what is exactly going on there.
REP. COURTNEY: Okay.
MR. LABS: I hope that answers your question.
REP. COURTNEY: Sort of.
I mean and I guess, because really, you know, Mr. O'Rourke finished his testimony talking about the maritime challenge and trying to, you know, meet it with a fleet size that, I think, the admiral earlier described today as sort of the minimum risk level. I mean, it just seems that talk about a disconnect. I mean, there's obviously a problem that when you, I guess, put the two testimonies side by side.
Mr. O'Rourke, again you kind of answered a lot of my questions right off the bat, talking about the 212 sequence. But I wanted to at least get your comments on another approach which has been sort of talked about, which is using the advanced construction method, which I guess has been done in other ship programs as a way of, you know, sort of maybe getting to that same sort of smoother trend without necessarily going to 212. And I just wondered if you had any comments about how that could work or might work.
MR. O'ROURKE: As I understand it, there has been an idea put forward to put some advanced construction funding into this year's budget, as a plus-up, for the purpose of beginning work sooner, I take it, on the second FY '11 vote. The idea there would be to do some of the work on that boat a little bit earlier and to therefore permit the shipyard to better optimize its construction schedule for that ship.
This has been done, to one degree or another, with a few other ships in recent years. And the experience seems to be that, yes, doing that sort of thing can permit the ship to be built in less time and therefore make the ship less expensive.
So doing this would not add any extra submarines into the submarine force but it would permit that particular submarine to be built less expensively. And that could free up money to be used on other priorities.
REP. COURTNEY: Dr. Labs, in your comments regarding the attack submarine shortfall, I mean, one of the ways you sort of postulate that the Navy could address that is by, I guess, scheduling, that if you build submarines faster and get them operational faster, that kind of reduces that trough that's in the 2020 range. I mean, does that make sense?
MR. LABS: Yes, sir.
What I'm referring to there is that there is various initiatives that the Navy is looking at to try and mitigate that shortfall. And one of the ones that they, you know, are going to -- that they have stated that they are going to try to achieve is to actually build the submarines rather than, in six years, try to get that down to something less than that, even as little as five years.
And if you do that, you get -- I don't remember the numbers off the top of my head. But you get more submarines into the fleet a little bit faster. So therefore that shortfall, out in the 2020 periods, is less.
MR. O'ROURKE: It's a one-time benefit of two extra ships and it's already cranked into the Navy's shortfall mitigation plan.
MR. LABS: But this 2009 plan, as it stands, does not yet take credit for that.
They don't assume that yet because they haven't actually achieved that faster build rate so far, and that's something they're certainly going to try to do.
MR. O'ROURKE: The attack submarine shortfall has been something that I know in my own work I've been testifying and reporting on now for 13 years, and the Navy came forward with a shortfall mitigation plan and presented it to Eric and I a year or two ago. And part of it is to get the one-time benefit of the two extra boats by shortening the construction schedule, and there are other measures in that mitigation plan as well.
The Navy testified that that mitigation plan can close up the gap in terms of maintaining day-to-day forward deployments of attack submarines, but it could not fully close the gap in terms of your ability to surge submarines for wartime uses. And the gap there remained three surged boats, which would mean a gap in your total inventory of four surged boats.
So if you take that now as the key gap for which the Navy doesn't even have an identified mitigation strategy at this point, then of those four boats in that remaining gap, the Congress has now funded one of those four boats, which is now the second boat currently scheduled for FY '11, and that leaves three more to go.
And that's why, if the Congress were to decide to accelerate the FY '11 boat to an earlier year and then create that hole in FY '11 to put another boat in, you would actually be making, in percentage terms, a significant reduction on that remaining four-boat wartime shortfall that the Navy calculated it does not have a mitigation strategy for.
REP. COURTNEY: Well, as usual, you're giving us the spectrum of options, which is very helpful.
On the SSBN change that took place where it went from 14 to 12, I don't know if you have any comments you wanted to make as far as that particular --
MR. O'ROURKE: Only one comment, which is that that is consistent with the Navy's testimony before the Senate Appropriations Committee, I think it was, last year. They mentioned the same reason for planning 12 rather than 14, that they would be moving to a life-of- the-ship (core/corps ?) and you would not run into a situation halfway through the ship's life cycle of having to take two boats effectively out of service for the purpose of doing the midlife refuelings.
MR. LABS: The only thing I would add to that, because that was the same thing that we had understood last year as well, is that the plan's requirement is still, though, at 14; the actual production schedule is 12. It's not clear to me why, necessarily, that if they can achieve the same operational goal with 12 as they needed 14 in the past, why they wouldn't necessarily have revisited the question of the requirement.
REP. COURTNEY: Thank you, Mr. chairman.
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