NavWeek: Model Ships

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MOBILE, ALA. – The Joint High Speed Vessel (JHSV), which already has garnered attention for its operational promise, is now getting rave reviews for, shall we say, its programmatic prowess.

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Indeed, in many ways the JHSV provides a clear snapshot of how the Navy can structure a program to build its ships efficiently and cost effectively. But it also provides a glimpse of why the Navy can never build its ships with the same crisp balance sheet that commercial yards build private vessels.

GAO report released earlier this month strongly suggests Navy shipbuilding programs should more closely mirror those in commercial yards. The report notes that, among other things, the Navy has a history of accepting ships with far more “deficiencies” than private companies do from commercial yards.

In some cases the “starred” – or worse – deficiencies have run into the thousands. They are marked by what the Navy calls star cards.

Rear Adm. Dave Lewis, Navy program executive officer for carriers, disagrees with the GOA implication that the Navy routinely accepts incomplete ships – and he points out that the service holds on to significant final payments until yards take care of deficiencies.

“All contracts have a warranty clause,” he says. “At delivery, we’re making a value judgment. We provide a dollar amount to every card and we total that up and keep the money back from the shipbuilder. They don’t get paid for work they haven’t done yet. I would drive into the schedule when it would get fixed.”

That last point is a significant one. When scheduling for the accepted delivery of a ship, the Navy has to make sure the crew is ready to go aboard for the work of making it a fleet-ready vessel. Keeping those ships in limbo while deficiencies are addressed can prove expensive. “Sailors cost $200 a day,” Lewis says.

The GAO report is more than 100 pp. long and I could easily take up the same amount of space doing point-counterpoint between the government auditors and Navy officials.

But let’s zero in on what they agree on – the successful turnaround of the JHSV program.

“With the JHSV, we had a couple of systems that were not performing well,” Lewis says. “We had some issues.”

Actually, he says, some systems were not performing like they were meant to. The Navy wasn’t prepared to accept the ship in that condition.

“We slipped the schedule,” Lewis says. ”The JHSV wound up being a year late. But everything worked. JHSV-2 and -3 are doing much better. They are on schedule. This is an example of the government driving performance by slipping schedule. Austal did a very good job.”

Even a cursory tour through the Austal shipyard in Alabama shows how efficient it has become in building JHSVs. The production line there for the ship echoes that of a top-notch aircraft or automobile plant. The Austal folks say they have it right now.

GAO would seem to agree. “Uncorrected deficiencies were also kept to a minimum on the recently delivered Joint High Speed Vessel … based on commercial designs and operated by the Military Sealift Command,” GAO says. “The first Joint High Speed Vessel, an intratheater troop and cargo transport ship, was delivered in December

2012 with only 54 uncorrected deficiencies, of which 6 were categorized as Part I (major) deficiencies.”

The number of outstanding deficiencies on the Joint High Speed Vessel was comparable to those found on commercial ships, GAO says.  And that’s what GAO wants to see – the Navy getting to a level similar to that of commercial ship shipbuilding when it comes to construction deficiencies. And the service is doing that, the auditors say, with such measures as its “Back to Basics” shipbuilding program.

“While the recent deliveries of the first Joint High Speed Vessel and Mobile Landing Platform represent marked improvements over previous lead ships,” GAO says, “continued emphasis on quality and maintaining the momentum created by the Back to Basics initiative is warranted, given that other recently delivered ships had numerous deficiencies.”

“The GAO report validates that we’re doing it right,” Lewis says. “That we’re working toward that.”

But here’s the thing. While commercial shipbuilding may do it better – by the metrics analyzed by GAO in this report – there is simply no way the U.S. Navy can reach that level with its shipbuilding program. Let me explain why.

Previously, I wrote extensively about commercial shipbuilding. The main “mission” set for those ships has not changed since the days of bark canoes. Those ships are meant to carry some type of cargo, either products or people. Find a better way to do that and chances are you’ll win shipbuilding contracts.

With that relatively simple planning concept in mind, those yards can make major capital investments and devote squads of engineers with laser-like focus, knowing that, again, if they design and build that better mousetrap, they stand a very good chance of getting the work. It can evolve into a decades-long process.

Also, in the commercial world, relationships can be developed and nurtured over decades, developing an understanding that can yield major results throughout the years. That’s often not the case with Navy programs, whose program officers change regularly as their careers advance. Worse, there are “organizational” changes at the very top, as the U.S. elects new presidents who appoint new defense secretaries and chiefs of naval operations.

And with those organizational changes come shipbuilding shifts. Missions change, requirements morph and needs reshuffle. Just take a look at the Navy’s destroyer program. The DDG-51 Arleigh Burkes were going to be replaced by a whole new fleet of DDG-1000 Zumwalts. Now the Burkes are back in production and the nation’s set to get only three of the Zumwalts.

Even on something like JHSV, now a recognized success story, changes may be coming, as special forces and Marines eye the ship for a new set of missions – missions that may require modifications, and, yes, greater costs, adding to the potential for “deficiencies” as the first of those modified vessels are delivered.

Navy shipbuilders cannot plan for the long term the way their commercial counterparts do. When building ships for the Navy, companies can rarely plan and design more than a few years or models ahead. They have to be adaptable and flexible. That’s just a reality, and it comes at a cost premium. That reality is not reflected in the GAO report.

It is something the Navy recognizes, though.

“Every ship has different standards,” Lewis says. “Every ship is different. Every contract is different. Every shipbuilder is different. Not everyone has the same problem. Not every yard has the same issues. I don’t need more policy or oversight. I need more insight.”

The Navy definitely does need more insight. Because, despite the service’s continued improvement in shipbuilding oversight, there are still too many problems with the ships at delivery, even taking into account the challenges of constructing military ships.

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