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NavWeek: Sequestration Part Two


U.S. Navy Takes the High And Low Roads

As we recently reported in the Aviation Week Intelligence Network (AWIN), recent U.S. Navy contract and contract modification expenses show the service’s increasing investment interest in smaller vessels – like the Littoral Combat Ship (LCS) – and the LCS-1 USS Freedom’s March 1 deployment to Singapore on the very day the Sequestration Era begins underscores that support.

Click here to see a Navy video on the Freedom's departure.

But other recent moves by the Navy and Obama Administration also show the service remains equally committed to its aircraft carrier program, with the Navy squeezing out more money to prep the CVN-72 USS Abraham Lincoln for its planned midlife overhaul just days before advent of the big “S.”

What the moves show is the anchoring of a high-low mix the Navy is putting together for its future fleet that could prove potentially and especially useful in the Pacific realm with carriers waving the big flag at sea and smaller ships like the LCS hoisting a red, white and blue pennant close to the coast.

Many detractors note the LCS offers very little real firepower. True as that may be, this is a region where any U.S. presence could be noteworthy.

Combat ships – like the LCS – and landing vessels contract and contract modifications tallied about $1.9 billion in 2011, ranking those costs 36th among all non-construction-related Pentagon expenses and second for Navy surface-ship programs after destroyer programs, which racked up about $4.8 billion for the year – but ahead of $1.6 billion for amphibious-ship transactions and $1.5 billion spent on aircraft carrier deals, the AWIN analysis shows.

By way of comparison, “combat” ship-related expenses did not even crack the annual top 50 for Navy-related expenses over the previous decade and failed to rank in the top 100 of all Navy expenses between 1999 and 2009, according to the AWIN analysis of contracting data aggregated by the National Institute for Computer-Assisted Reporting.

A caveat here – Navy shipbuilding expenses are cyclical by nature. A big carrier or submarine contract would jump such an expense to the top of the Pentagon chart in any given year.

Indeed, submarine deals ranked first among Navy shipbuilding expenses with about $16.5 billion between 1999 and 2009, the AWIN analysis shows, and carriers ranked second with about $15.9 billion.

Carriers still rank at the top of list of Navy current priorities, says Michael Petters, CEO of Huntington Ingalls Industries, which builds the ships and is the nation’s leading Navy shipbuilder.

Any doubts about that contention were erased in the week leading up to the sequestration deadline when President Obama visited Newport News Shipbuilding, the HII unit that builds the carriers in the Tidewater region of Virginia and then the Navy awarded an estimated $40 million contract modification Feb. 27 to HII for additional advance planning efforts to prepare and make ready for the Lincoln’s refueling complex overhaul (RCOH).

Funds being used for this extension, a Navy official says, are from an Above Threshold Reprogramming (ATR) approved in September 2012 by Congress.

Funny how folks can find money when they really need it.

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