Costly Lesson on How Not to Build a Navy Ship
- From: Jack Linthicum <jacklinthicum@xxxxxxxxxxxxx>
- Date: Fri, 25 Apr 2008 03:20:45 -0700 (PDT)
It must be Lock-Mart's day, they were in a less editorial piece in my
local paper, the home of some of L-M's workforce. Speed as the primary
attribute seems a little strange for a ship intended for asymmetrical
warfare, like having police foot patrols in cars. It's all Donald
Rumsfeld's fault anyway, thank God we have him to blame for eight
years of monomania.
Sorry, Dr. Piergiorgio, but an Italian ferry as a warship design has a
certain Figaro quality to it.
"Even as spending on new projects has risen to its highest point since
the Reagan years, being over budget and behind schedule have become
the norm: a recent Government Accountability Office audit found that
95 projects — warships, helicopters and satellites — were delayed 21
months on average and cost 26 percent more than initially projected, a
bill of $295 billion."
April 25, 2008
Costly Lesson on How Not to Build a Navy Ship
By PHILIP TAUBMAN
With the crack of a Champagne bottle against its bow, the newly minted
Navy warship, bedecked with bunting, slid sideways into the Menominee
River in Wisconsin with a titanic splash.
Moments before the launching on Sept. 23, 2006, Adm. Mike Mullen, the
chief of naval operations, told the festive crowd of shipbuilders,
politicians and Navy brass assembled at the Marinette Marine shipyard,
“Just a little more than three years ago, she was just an idea; now
Freedom stands before us.”
Not quite. The ship — the first of a new class of versatile, high-
speed combat vessels designed to operate in coastal waters — was
indeed bobbing in the river, just four months after the promised
launching date. But it was far from finished. In fact, the ship floats
there still, work continuing day and night.
A project heralded as the dawning of an innovative, low-cost era in
Navy shipbuilding has turned into a case study of how not to build a
combat ship. The bill for the ship, being built by Lockheed Martin,
has soared to $531 million, more than double the original, and by some
calculations could be $100 million more. With an alternate General
Dynamics prototype similarly struggling at an Alabama shipyard, the
Navy last year temporarily suspended the entire program.
The program’s tribulations speak to what military experts say are
profound shortcomings in the Pentagon’s acquisitions system. Even as
spending on new projects has risen to its highest point since the
Reagan years, being over budget and behind schedule have become the
norm: a recent Government Accountability Office audit found that 95
projects — warships, helicopters and satellites — were delayed 21
months on average and cost 26 percent more than initially projected, a
bill of $295 billion.
In a narrow sense, the troubled birth of the coastal ships was rooted
in the Navy’s misbegotten faith in a feat of maritime alchemy:
building a hardened warship by adapting the design of a high-speed
commercial ferry. As Representative Gene Taylor, the Mississippi
Democrat who leads the House Armed Services Subcommittee on Seapower
and Expeditionary Forces, put it, “Thinking these ships could be built
to commercial specs was a dumb move.”
Behind the numbers in the Accountability Office study, experts say, is
a dynamic of mutually re-enforcing deficiencies: ever-changing
Pentagon design requirements; unrealistic cost estimates and
production schedules abetted by companies eager to win contracts, and
a fondness for commercial technologies that often, as with the ferry
concept, prove unsuitable for specialized military projects.
At the same time, a policy of letting contractors take the lead in
managing weapons programs has coincided with an acute shortage of
government engineers trained to oversee these increasingly complex
enterprises.
The coastal ships — called littoral combat ships — are especially
important to the Navy, which has struggled to retain a central role in
American military operations after the cold war. In part, they are a
response to the Navy’s own Sept. 11 moment, which came in October
2000, when two terrorists in a bomb-laden rubber dinghy rammed the
destroyer Cole, killing 17 sailors and wounding 39 more.
An examination of the littoral combat ships by The New York Times,
including interviews with many of the principal Navy and industry
officials involved, found that the project was hobbled from the outset
by the Navy’s zeal to build the ships as fast and inexpensively as
possible and the contractors’ desire — driven by competitive pressures
— to stay on schedule, even as the ferry designs proved impractical
and construction problems multiplied.
In their haste to get the ships into the water, the Navy and
contractors redesigned and built them at the same time — akin to
building an office tower while reworking the blueprints. To meet its
deadline, Lockheed abandoned the normal sequence of shipbuilding
steps: instead of largely finishing sections and then assembling the
ship, much of the work was left to be done after the ship was welded
together. That slowed construction and vastly drove up costs.
“It’s not good to be building as you’re designing,” said Vice Adm.
Paul E. Sullivan, commander of the Navy branch that supervises
shipbuilding.
A Lockheed executive vice president, Christopher E. Kubasik, said, “We
have acknowledged all along our shared responsibility for challenges
encountered in the design and construction of the littoral combat
ship, which are similar to those typically experienced with first-in-
class vessels, including the competing LCS design.” Mr. Kubasik said
the company was working toward “realistic cost goals for subsequent
ships.” General Dynamics declined to comment.
Despite the problems, the Navy secretary, Donald C. Winter, and other
top Navy officials say they remain committed to building 55 of the
ships, once a steady, fixed-price production run can be assured. Even
at about $500 million apiece, Navy officials add, the coastal ships
would be a bargain compared with most Navy combat vessels.
Still, throughout the military-industrial world, the program is seen
as a cautionary tale, especially for a Navy whose 30-year shipbuilding
strategy calls for building scores of warships — including aircraft
carriers, destroyers and submarines — to bolster an aging fleet.
“The littoral combat ship is an imaginative answer to emerging
military requirements, but it has the most fouled-up acquisition
strategy I have ever seen in a major military program,” said Loren
Thompson, a military analyst at the Lexington Institute, a policy
research center.
A New Mantra
Traditionally the Navy had disdained small combat ships as a major
component of the fleet. But strategists came to fear that the “David
and Goliath” phenomenon underlined by the attack on the Cole, what
they call asymmetric warfare, would only grow in the years ahead.
“We needed to figure out how to asymmetric the asymmetric guys,”
recalled Adm. Vern Clark, who championed the ships as chief of naval
operations from 2000 to 2005.
To Navy planners, a ship designed for coastal combat could neutralize
hostile submarines, surface warships, mines and terrorist speedboats,
clearing the way for other combat ships to operate in offshore waters
and support combat ashore. The Navy first publicly declared its
intention to build the ship on Nov. 1, 2001. In those days, the
Pentagon’s defining procurement mantra was “Faster, Better, Cheaper.”
From the first, the coastal ships’ defining characteristic was speed.
The first model was to be delivered no more than six years after
conceptual planning began, half the normal time. Construction was to
take two years, instead of the usual four or five.
The Navy also wanted ships that could travel fast, better than 40
knots. And they needed to be easily outfitted with different weapons
and surveillance systems. A removable package of mine-sweeping
equipment, for instance, could be replaced with a package of special-
operations gear used by a Seal team.
Each ship would carry an uncommonly small crew, about 40 sailors.
Compared with a $2 billion destroyer or a $7 billion to $9 billion
aircraft carrier, the new ships would be produced at the cut rate of
$220 million apiece, not including weapons packages.
In short, the accelerated, cost-conscious acquisition plan — promoted
as a new shipbuilding paradigm to help the Navy rebuild the fleet —
appeared to be exactly the kind of transformational thinking that
Defense Secretary Donald H. Rumsfeld and his top civilian aides
favored as they moved into the Pentagon in 2001. It was quickly
approved.
A Plan, Then It Changes
Another idea that had taken hold was that the Pentagon should break
free from cumbersome, gold-plated acquisition programs by taking
advantage of commercially available technologies.
With that in mind, Lockheed and General Dynamics proposed different
high-speed ferry models as the template, and in 2004, the Navy
selected the two companies to compete for the business. The model for
the Freedom was a ferry built in Italy. An Australian ferry was the
model for the General Dynamics prototype, named Independence.
Lockheed had virtually no shipbuilding experience. But in keeping with
a Pentagon policy that called for letting big military contractors run
complex projects with minimal government supervision, the Navy made
the companies primarily responsible for all phases of development —
from concept studies to detailed design and construction.
In theory, the contractors’ business and technological acumen would
save taxpayer dollars. But the Navy agreed to reimburse the companies
for cost overruns rather than setting a fixed price, leaving little
incentive to hold down costs.
To compensate for its lack of experience, Lockheed joined with the
naval architecture firm of Gibbs & Cox and two shipyards, Marinette
Marine, and Bollinger in Louisiana.
The Lockheed proposal called for a steel single-hull ship 378 feet
long and 57 feet wide. It would have a spacious flight deck and space
for two helicopters, a stern ramp and side door near the waterline for
launching and recovering small boats, and large interior compartments
that could be quickly reconfigured for different weapons systems. But
as Lockheed and the Navy were completing contract negotiations in
2004, the rules changed drastically. Commercial ferry standards, the
Navy determined, would not do.
The underlying principle behind the decision, Admiral Sullivan said,
was that the new ships had to be able to “hang tough in a storm and
take some battle damage and still survive long enough” for the crew to
be rescued.
A military expert said the Navy had badly miscalculated.
“They were eager to take advantage of commercial practices and the
lower cost of buying off the shelf, but they did a lousy job of
understanding the war-fighting requirements,” said the military
expert, who asked not be named because he was involved with the
program. “It was like, ‘You mean you want to put wheels on that car?’
”
Adm. Gary Roughead, the current chief of naval operations, said: “We
had thought that the commercial variant would not be that far away
from what we needed. I’ll tell you, that was underestimated.”
At the same time, the Navy realized the time had come to modernize its
shipbuilding code. The resulting Naval Vessel Rules in many ways
trumped the idea that the new ships could draw extensively on
commercial ferry designs.
The new rules called for a water-mist fire extinguishing system
instead of the commercial sprinkler system normally found on a ferry,
forcing the shipyard to order new pipes, high-pressure nozzles and
other equipment. Other revised requirements included heavy-duty power
cables and reinforced crew compartments.
Ultimately, there were nearly 600 significant engineering changes
affecting nearly all parts of the ship, according to the Navy.
The Navy and Lockheed agree that the Navy described the new rules as
they were being developed, and that it increased the budget to
accommodate some design changes. Even so, both parties acknowledge
they badly underestimated the consequences.
“Once the rules were issued, it took us a year to fully understand how
they would impact the project,” said Craig R. Quigley, a Lockheed
spokesman.
By then, early 2005, the ship was already under construction at
Marinette.
The Setbacks Begin
Building a ship requires precision sequencing, as sections are built
and outfitted in large manufacturing halls, then moved to a towering
building where they are welded together to create a ship.
This system allows workers ample space, light and access to heavy
construction tools as they build each section, called a ship module,
and outfit it with pipes, cables, insulation and other equipment, and
apply coats of paint.
Getting the modules as complete as possible before assembly is
critical because it becomes far more difficult to work in the cramped
quarters of a ship. Marinette’s general manager, Richard T. McCreary,
said it costs roughly six times more to outfit a module aboard a ship
than standing free.
Normally, the Marinette yard prefers to get modules 85 percent to 90
percent completed before they are transported to the ship erection
building. In the case of the Freedom, with its repeated design
alterations, better than half of the 39 sections fell well short of
that goal.
The risks seemed obvious, yet neither the Navy nor the shipyard was
willing to reconsider the timetable.
Rear Adm. Charles S. Hamilton II, one of the Navy officers with lead
responsibility for the project, said he had given Navy officials
several opportunities to slow down the project.
“The clear signal from all quarters was, ‘Hamilton, I want that ship
in the water, and I want it out there now,’ ” he recalled in an
interview.
Admiral Hamilton left the Navy last year. He now works at Booz Allen
Hamilton, the consulting firm.
At Lockheed, executives say they feared that slowing down construction
would put them at a disadvantage in their battle to win the contract
over General Dynamics.
Yet if the project was troubled, the Navy’s oversight at Marinette was
less than robust. Because of staffing reductions, the Navy office
responsible for supervising shipbuilding initially dispatched no one
full time to Wisconsin. Even after a team arrived, it failed to
appreciate the severity of problems.
“We had very junior people on site,” Admiral Sullivan said.
Construction was also hampered by steel shortages: the lower levels of
the hull required the same low-alloy steel the Pentagon was buying to
strengthen the armor on Humvees in Iraq.
The most wrenching setback came in autumn 2005, when a key gear for
the propulsion system was cut incorrectly, forcing a 27-week delay in
ship construction. Rick Kennedy, a spokesman for G.E. Aviation, the
General Electric division that produced the gear, said a machinist had
misread a drawing; G.E. absorbed the additional cost.
Shipbuilders usually start with the engine space, which contains the
most machinery, then build around it. Because of the gear problem, Mr.
McCreary said, “We did just the opposite.”
Joe North, who manages the project for Lockheed, said in an interview
at the shipyard that he initially thought the yard could work around
the problems, that design work would eventually catch up with
construction.
Looking back, Mr. North said, “it was death by a thousand cuts.”
‘It Got Oversold’
With work nearly finished and the Menominee River ice gone, Lockheed
plans to take the Freedom to sea trials in Lake Michigan this spring
and hopes to deliver it to the Navy late this year.
The competing General Dynamics ship, an aluminum trimaran considerably
bigger than the Lockheed model, is to be launched on Saturday in
Alabama. Even though General Dynamics had more time to digest the
Navy’s design changes before starting construction, its ship ran into
many of the same problems and delays as Lockheed’s. The price tag also
more than doubled.
Last year, the Navy temporarily put the entire program on hold when it
terminated contracts for more ships because it could not reach
agreement with the two companies on a fixed price.
While the financial gap was not great, Navy and industry officials
said, the Navy, hammered by Congress for its handling of the project,
wanted to demonstrate its determination to hold down the price for
future ships. Congress has set a spending cap of $460 million per
ship, excluding weapons packages.
Once the Navy evaluates the two prototypes, it can select one or order
a mixed fleet. While it could opt for a different approach, military
experts say that seems unlikely, given the need for the new ships and
the money and effort already expended.
The Navy recently restarted the program, inviting the two companies to
submit fixed-price proposals for three additional ships. Lockheed,
still hoping to win the entire prize, said the problems encountered
with the Freedom would not be repeated, now that the company has a
finished design.
“It will be great, the next time around,” said Mr. North, the program
manager. “Lead ships are truly hard.”
Navy and industry officials say blame for the program’s rocky early
history has to be shared.
“It’s easy to lay all the blame at the foot of the government, and the
Navy was naïve, but the companies bear some of the responsibility,”
said a senior industry official who asked not to be identified because
of his involvement in the project. “They were playing the game to get
the contract, not owning up about all the issues until well into the
game, hoping to make some recovery downstream.”
Mr. McCreary, the Marinette general manager, said that while the
shipyard might not have fully mastered the Navy’s accounting system,
it had given the Navy frequent progress reports showing problems
mounting.
Mr. Winter, the Navy secretary, complained that the Navy bureaucracy
had failed to alert him to rising costs. The Pentagon, he said, was
bedazzled by the idea of saving money and time with commercial
technologies.
“It got oversold,” he said. “The concept was just abused.”
He lamented the Pentagon’s eroding expertise in systems engineering —
managing complex new projects to ensure that goals are achievable and
affordable — and faulted the notion that industry could best manage
ambitious development projects.
“Quite frankly, industry is not good at doing this,” he said.
Recently, Mr. Winter said, he instituted new procedures to ensure
tighter supervision of all shipbuilding projects. He says he is
confident that the coastal-ships program will produce a fleet of fine,
affordable vessels. But as he contemplates the Navy’s long-range
rebuilding plans, he says he stands behind a scorching critique that
he delivered at a convention in Washington last year:
“If we do not figure out how to establish credibility in our
shipbuilding programs and plans, and restore confidence in our ability
to deliver on our commitments, we cannot expect Congress or the nation
to provide us with the resources we so urgently need.”
http://www.nytimes.com/2008/04/25/us/25ship.html?hp
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