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It’s becoming increasingly clear the U.S. Navy is serious about saving as much money as it can in designing and building its Ohio-class ballistic submarine (SSBN) replacement fleet. As service officials realize, successfully navigating this program will depend a lot on dollars and cents – as well as common sense.

The Navy has even developed some unique contracting procedures to help keep the program financially stable.

Rear Adm. David Johnson, the Navy program executive officer for submarines, has underscored the importance of controlling costs, even at the earliest stages of program development, and remarks he made earlier this year are included in the recent Naval Submarine League Submarine Review.

His comments are worth repeating.

“As we move through the Technology Development Phase we are looking at ways to control costs,” he says. “While this part of the program accounts for only about 6% of the Oho Replacement’s total program costs, it can have lasting effects on the ship’s total cost. Investing now will allow us to save over the life of the program. So, for this 6% investment, we will design an SSBN with SSN (attack sub)-like stealth at SSBN speeds, produceability and affordability, [restart] the missile tube industrial base, [establish] three major test facilities, and [build] a class that provides 124 strategic deterrence patrols [on] an SSBN operational cycle with SSN technology.”

He goes on to say, “The research and development contract we signed last December is truly a unique agreement in that we are incentivizing General Dynamics Electric Boat, which is the prime on the contract, to lower costs across all three phases of the Ohio Replacement—design, construction, and operations and sustainment. Whereas the Virginia-class (SSN) conducted successful acquisition and life cycle cost reductions during production, the Ohio Replacement is baking this into the program from the very beginning. This will maximize our savings while also ensuring that the boat we design and deliver has the requisite capabilities to successfully operate into the 2080s.”

The contract, and really the program as a whole, he says, is “embracing” the Pentagon’s Better Buying Power initiatives by targeting affordability and reducing cost growth.

“This is a unique research and development contract in that it purchases both level of effort and specific deliverables in a cost-plus fixed-fee incentivized contract,” he contends. “This is the first time that I can remember a research and design contract being incentivized to reduce total program costs starting with the non-recurring engineering work, to construction, and operating and support. By starting to look at how to make the Ohio replacement as affordable as possible now, we have the ability to really reduce the program’s entire life-cycle cost.”

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