January 30, 2017

PROCUREMENT: Trump calls for more submarines — for less money.

EB and Newport News Shipbuilding build two Virginia-class attack submarines a year. Former Secretary of the Navy Ray Mabus, in one of his last visits to EB, handed out mock punch cards that said “Buy 9 subs, get the 10th one free!” referencing the $2 billion in savings achieved through a $17.6 billion contract, the largest in Navy shipbuilding history, awarded to EB in April 2014.

When negotiating that contract, certain initiatives were implemented to reduce design costs, the most significant of which was a redesigned bow that included a new sonar array and two larger payload tubes instead of 12 individual, vertical-launch missile tubes. Twenty percent of the ship’s design was changed to save about $100 million per submarine. Other cost-saving measures include the ability to buy materials far in advance.

“Those of us who have worked with EB over the years know that affordability is a factor in their business model,” said Bob Ross, executive director of the state’s Office of Military Affairs.
The company is “well aware” of how “incredibly expensive” it is to build submarines, and works “very hard to be as efficient and affordable as they can,” Ross said.

But he noted that a high price tag is inevitable, given the advanced technology being built.
“There’s more technology in the Virginia-class submarines than in the space shuttle program. It’s never going to be a low number,” he said.

The Virginia-class attack subs have been a rare post-Cold War procurement success for the Navy, with boats coming in ahead of schedule and under budget. I’m not sure how much more in savings Electric Boat can wring out of the program, particularly Congress approves an increased production rate and the increased facility investments that would be required.

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