SSN-774 Virginia-class Program
The Milestone I COEA examined twelve alternatives. The JROC reviewed and validated the key performance parameters (KPPs) for the selected new attack submarine design. The Milestone I DAB approved NSSN to enter Phase I in August 1994. The Milestone II DAB approved NSSN to enter the Demonstration and Validation Phase on June 30, 1995.
A number of systems that will be part of NSSN underwent testing in FY97. TB-29 towed array and the ADCAP Torpedo Block Upgrade III completed OPEVAL in September 1997. The Submarine Advanced Tomahawk Weapons Control System (Sub-ATWCS), Ring-laser Gyro Navigator and Doppler Sonar Velocity Log underwent operational testing as well. A scale model of the propulsor was tested. When USS SEAWOLF went to sea, the following equipment common or similar to NSSN were observed; propulsor, wide aperture array (WAA), impressed current cathodic protection system, and active shaft grounding system.
The January 1997 Operational Assessment [OA] report indicated high risk existed in several programmatic areas, since formal plans or funding didn't exist for the external communications system, the towed array, mines or ASUW missiles. As a result of DoD funding shortfalls, NSSN and supporting programs faced significant down-scoping which could reduce the effectiveness of the submarine. Technical risks were found in high data rate antennas and in other areas addressed in the classified version of this report. DOT&E concured with the OA report. Since then, funding has been obtained and a program started for an improved towed array. The Navy has identified and funded a number of technological improvements for insertion into different NSSN hulls as the improvements become available, and is studying others, which will be implemented if funding becomes available. In October 1997, DIA released a new STAR. The impact of this on NSSN performance margin will require additional assessment.
In 1997 GAO found that the NSSN program was not likely to meet the objective of producing a submarine that is significantly less costly than the Seawolf. Based on Navy estimates for a 30-ship, single shipbuilder program, the Seawolf's average acquisition cost was estimated to be about $1.85 billion compared to the NSSN's estimate of about $1.5 billion, and based on a 30-ship, two shipbuilder program, the Navy's current estimated acquisition cost for the fifth ship of the NSSN class had risen from about $1.5 billion to about $1.8 billion as of March 1996.
The fiscal year 1997 budget requested $296 million for the design and component construction of the first New Attack Submarine in fiscal year 1998. As allowed by the fiscal year 1996 Department of Defense Authorization Act, the funding required to finance construction of the fiscal years 1999 and 2001 submarines, which would include $504 million in fiscal year 1997, was not included in the President's FY97 Budget request. The Navy's budget request for fiscal year 1998 was premised upon having the two shipyards team to produce not only the first four NASs, beginning construction in fiscal years 1998, 1999, 2001 and 2002 respectively, but all NASs thereafter.
The FY 1999 budget request included $1.5 billion for the construction of the second of four New Attack Submarines plus $0.5B for advance procurement for the third ship, that are part of the unique single contract and construction teaming plan approved by Congress in 1997.
In January 2001 the Navy indicated that it would need an additional $419 million ($341 million for SSN 774, $78 million for SSN 775) to complete the first two Virginia class ships. This was in addition to the $3.1 billion received to date to design and build the Virginia and the $2.1 billion previously appropriated for the Texas. The design contract with General Dynamics' Electric Boat was expected to exceed the $1.4 billion target by up to 10 percent [$146 million]. The contract for C3I systems with Lockheed Martin Naval Electronics and Surveillance Systems-Undersea Systems of Manassas, VA had a target cost of $160 million, which appeared to have increased to $230 million [a 43% increase]. Construction of the Virginia was expected to cost $112 million over target [a 12% increase], and the Texas was epected to cost $168 million over target [a 17% increase].
In June 2001 it was reported that $1.2 billion in additional funding was required to design and build the first four Virginia class submarines. The planned budget of $9.5 billion between 1996 and 2008 would need to be increased to $10.7 billion, including an extra $300 million by FY2003. About a quarter of the $1.2 billion increase is due to prior budget cuts that need to be restored, nearly half is due to higher costs for components and rising labor costs, and nearly a third is due to other factors.
As of early 2001 existing DOD guidance called for a force of 50 attack submarines, although some studies have called for raising the number of subs to as many as 72. Existing plans are sufficient to meet the goal of 50 boats, although higher numbers would require modification to these plans. According to Navy secretary Richard Danzig, as of October 1999 the Joint Chiefs of Staff were studying options for increasing the size and capability of the submarine force. The three options under review include by converting older Ohio-class SSBN submarines to so-called SSGNs at a cost of $420 million; refueling and extending by 12 years the service life of perhaps eight Los Angeles-class (SSN 688) subs at a cost per copy of $200 million; or building new Virginia-class (SSN 774) subs at a rate of at least four over the next five years, at a cost of roughly $2 billion per boat. The FY2000 Defense Authorization bill requires the Navy to study converting four of the oldest Tridents to the new SSGN configuration.
The JCS Submarine Force Structure Study, completed in November 1999, concluded that the optimal force structure would be 68 attack submarines by 2015 and 76 by 2025, with the minimum being at least 55 by 2015 and 62 by 2025. The report called for at least 18 Virginia-class submarines by 2015. The current Navy acquisition plan calls for ordering one per year through 2006, and two a year after that. The proposal in the Force Structure Study called for the Navy to go to two a year in 2004, two years early, and to buy three in 2008. To meet the goal for 18 Virginia class boats by 2015 and to meet the minimum goal of 62 boats by 2025 would require construction of roughly three subs a year. This would require an additional $4 billion a year for perhaps 14 years -- $56 billion more than the planned construction rate.
The FY 2001 budget request included $1.7 billion for full funding of the third ship and advance procurement for the fourth and fifth ships of the VIRGINIA Class. The third and fourth ships are part of the unique single contract and construction-teaming plan approved by Congress in 1998. Teaming has already achieved significant cost savings for the first four submarines when compared to a typical four-ship allocation plan. The FYDP included level-loading of one ship each year for FY 2001-2005 providing a cost effective steady production rate that helps both shipbuilders achieve level manning and more economic material buys.
As of mid-2000 the acquisition and construction strategies for the procurement of the first four Virginia -class submarines appeared to be yielding positive results. However, the two shipbuilders had not yet completed the critical test of joining sections constructed in two separate shipbuilder facilities. In addition, the subsystems being developed by a number of subcontractors required continued oversight regarding cost and schedule excursions.
The Senate Armed Services committee recommended in July 2000 a provision that would authorize the Secretary of the Navy to enter into a contract for up to a total of five Virginia -class submarines between fiscal year 2003 and fiscal year 2006. The provision would authorize the Secretary to continue the shipbuilder teaming arrangement authorized in the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85). The Committedd required the Secretary of Defense to submit a report to the congressional defense committees with submission of the fiscal year 2002 President's budget to include a plan for maintaining at least 55 attack submarines through 2015, and a plan for achieving a force of 18 Virginia -class submarines by 2015; and assessments of savings to the program of production rates of two submarines per year, if that rate were to begin in fiscal year 2004 and construction were to continue at that rate in fiscal year 2006 and thereafter.
At a procurement rate of 1 boat per year, Virginia-class SSNs cost about $1.9 billion to $2.0 billion per boat to procure. This cost might decline to about $1.8 billion per boat at a procurement rate of 2 boats per year or $1.6-$1.7 billion per boat at a procurement rate of 3 or 4 boats per year. In 1997, the Navy estimated that for the low SSN procurement rates then contemplated, the teamed- production arrangement would be about $100 million per boat more expensive than a single-yard production strategy at EB, but roughly $150 million per boat less expensive than a two-yard, separate-production strategy at the two yards.
In August 2003 the Navy's newest and most advanced submarine, Virginia (SSN 774), was moved outdoors for the first time, and being prepared for her Aug. 16 christening. Virginia is the first US submarine to be designed for battlespace dominance across a broad spectrum of regional and littoral missions as well as open-ocean, "blue water" missions. The Virginia-class achieves a balance of core military capabilities and affordability.
The Electric Boat Quonset Point facility is relatively stable at one ship per year because they are building modules for ships being delivered to both Groton and Newport News. Unfortunately, on the Groton waterfront and and Newport News, delivery of only one ship every other year results in a cyclical workload, which is not the way they want to manage the business. That's why it's so important to get to two submarines per year as soon as possible. The Navy's 2006 plan would begin that rate of production in 2012. The contractors are working with the Navy and Congressional delegation to accelerate that schedule to 2010 or 2011.
Central to the increased build rate of two submarines per year is the VIRGINIA Class cost reduction investment contained in the FY 2008 budget request. As detailed in the 2007 Report to Congress on VIRGINIA Class Cost Reduction, the Navy planned to achieve its cost goal for the program through construction performance improvements, design changes that reduce cost, and by increasing the procurement rate under a MYP contract with EOQ authority. The cost reduction investment funds are vital to implementing the needed construction performance improvements and design changes. The Navy estimated that approximately 14 percent savings can be achieved on an additional $470.0 million investment in advance procurement.
In June 2007 the Senate Armed Services Committee recommended an increase of $470.0 million for Virginia class advance procurement, which would support building two submarines in fiscal year 2010. The Senate amendment contained a provision (sec. 133) that would authorize $400.0 million for procurement of a second ship set of reactor components, and $70.0 million for advance procurement of non-nuclear long lead time material in order to support a reduced construction span time for the boats in the next multiyear procurement program. The House bill contained no similar provision. The Senate receded in the National Defense Authorization Act For Fiscal Year 2008. The House bill contained a provision (sec. 122) that would authorize the Secretary of the Navy to enter into a multiyear contract for procuring Virginia-class submarines. The Senate amendment contained a similar provision (sec. 131) that would authorize the Secretary of the Navy to enter into more than one contract for the same purpose. The House receded with a clarifying amendment.
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