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CONSTRUCTION ESTIMATING NEWS (update by every month)

CVN construction cost-control actions detailed


Although a plan to control cost growth on its new aircraft carriers is already in place, the Navy is continuing to conduct "a line-by-line review . to identify further opportunity to reduce cost and to mitigate risk," the service told a key congressional critic.


Sen. John McCain, R-Ariz., charged earlier this month that the Navy was not effectively managing cost increases on the Gerald R. Ford (CVN 78) and John F. Kennedy (CVN 79), the first ships in a new class of nuclear-powered aircraft carriers built in Virginia at Newport News Shipbuilding.



McCain, in a March 21 letter to Navy Secretary Ray Mabus, said he was "underwhelmed" by Mabus' accounting of the program during a March 15 hearing of the Senate Armed Services Committee.


"Not only have your actions to date failed to control cost growth in this $40 billion program," McCain wrote, "it appears that you do not now have a plan to prevent future increases."


But in a letter sent Monday to McCain, Mabus provided a list of actions already taken to avoid further cost hikes on the carriers. Mabus repeated assertions that cost growth already experienced on the Ford "cannot be reversed," but he noted that problems with the supply chain were also a major factor, particularly during the ship's advance procurement period from 2002 to 2008.


"It is essential to improve upon material delivery to the shipyard," Mabus wrote, adding it is "equally important" to correct those issues for the Kennedy.


Mabus also reiterated that cost was a major issue on the carrier program before he took office in 2009.


"I have shared in the past my concern when I took office and learned the magnitude of new technologies and design change being brought to the Ford," he wrote.


Those new technologies included newly designed nuclear reactors, propulsion and power systems; aircraft launch and recovery systems; and a host of detailed technical improvements.


"Today we are confronting the cost impacts of these decisions made more than a decade ago," Mabus wrote to McCain.


The Ford, projected in 2007 to cost about $11 billion, now is expected to run more than $13 billion, a cost growth of 18 percent.


The Kennedy, expected in 2007 cost $8.6 billion, now projects to about $10.3 billion, a growth of about 20 percent.


Neither ship is close to the 25 percent marker that would trigger a Nunn-McCurdy breach, requiring the program to be revalidated.


A congressional analyst speaking on condition of anonymity after reading the letter to McCain thought the Navy was taking a number of appropriate moves to control the carrier program.


"They recognize the cost growth, but they're cleaning up some one else's mess," the analyst said. "From a management perspective, I can't think of anything they're not doing."





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