Defense Acquisitions Navy Faces Challenges Constructing The Aircraft Carrier Gerald R Ford Within Budget

The Navy is investing over $3 billion to develop technologies for a new type of aircraft carrier-the Ford class-and it expects to spend almost $11 billion to design and construct the USS Gerald R. Ford (CVN 78)-the lead ship of the class. New technologies are to improve the carrier's performance and reduce crew size. The Navy requested authorization of CVN 78 in its fiscal year 2008 budget. GAO was asked to assess the Navy's ability to meet its goals for developing the new carrier. Specifically, this report assesses (1) the extent to which technology development could affect the capability and construction of CVN 78, (2) the status of efforts to achieve design stability, and (3) the challenges to building CVN 78 within budget. To accomplish this, our work includes analysis of test reports, development schedules, and ship progress reviews; interviews with Navy and other officials; and examinations of cost estimates and our own past work.

The U.S. Navy is about to begin construction of the first Zumwalt-Class destroyer (DDG 1000) amid considerable uncertainties and a high likelihood of cost and schedule growth. Significant cost growth and schedule delays are persistent problems that continue to compromise the Navy¿s shipbuilding goals. This testimony focuses on: (1) the challenges faced by the DDG 1000 program; and (2) the strain such challenges portend for long term shipbuilding plans. Charts and tables.

CVN-78, CVN-79, CVN-80, and CVN-81 are the first four ships in the Navy's new Gerald R. Ford (CVN-78) class of nuclear-powered aircraft carriers (CVNs). CVN-78 (named for Gerald R. Ford) was procured in FY2008. The Navy's proposed FY2019 budget estimates the ship's procurement cost at $12,964.0 million (i.e., about $13.0 billion) in then-year dollars. The ship received advance procurement (AP) funding in FY2001-FY2007 and was fully funded in FY2008-FY2011 using congressionally authorized four-year incremental funding. To help cover cost growth on the ship, the ship received an additional $1,394.9 million in FY2014-FY2016 and FY2018 cost-to-complete procurement funding. The ship was delivered to the Navy on May 31, 2017, and was commissioned into service on July 22, 2017. CVN-79 (named for John F. Kennedy) was procured in FY2013. The Navy's proposed FY2019 budget estimates the ship's procurement cost at $11,341.4 million (i.e., about $11.3 billion) in then-year dollars. The ship received AP funding in FY2007-FY2012, and was fully funded in FY2013-FY2018 using congressionally authorized six-year incremental funding. The ship is scheduled for delivery to the Navy in September 2024. CVN-80 (named Enterprise) was procured in FY2018. The Navy's proposed FY2019 budget estimates the ship's procurement cost at $12,601.7 million (i.e., about $12.6 billion) in then-year dollars. The ship received AP funding in FY2016 and FY2017, and the Navy plans to fully fund the ship in FY2018-FY2023 using congressionally authorized six-year incremental funding. The Navy's proposed FY2019 budget requests $1,598.2 million in procurement funding for the ship. The ship is scheduled for delivery to the Navy in September 2027. CVN-81 (not yet named) is scheduled to be procured in FY2023. The Navy's proposed FY2019 budget estimates the ship's procurement cost at $15,088.0 million (i.e., about $15.1 billion) in then-year dollars. The Navy plans to request AP funding for the ship in FY2021 and FY2022, and then fully fund the ship in FY2023-FY2028 using congressionally authorized six-year incremental funding. The Navy's FY2019 budget submission programs the initial increment of AP funding for the ship in FY2021. The ship is scheduled for delivery to the Navy in September 2032. Oversight issues for Congress for the CVN-78 program for FY2019 include the following: whether to approve, reject, or modify the Navy's FY2019 procurement funding requests for the CVN-78 program; whether to accelerate the procurement of CVN-81 from FY2023 to an earlier year, or use a block buy contract to procure multiple aircraft carriers, or pursue a combined material buy for multiple aircraft carriers, or do some combination of these things; cost growth in the CVN-78 program, Navy efforts to stem that growth, and Navy efforts to manage costs so as to stay within the program's cost caps; whether to conduct the shock trial for the CVN-78 class in the near term, on the lead ship in the class, or years later, on the second ship in the class; CVN-78 program issues that were raised in a January 2018 report from the Department of Defense's (DOD's) Director of Operational Test and Evaluation (DOT&E); and whether the Navy should shift at some point from procuring large-deck, nuclear-powered carriers like the CVN-78 class to procuring smaller aircraft carriers.

CVN-78, CVN-79, CVN-80, and CVN-81 are the first four ships in the Navy's new Gerald R. Ford (CVN-78) class of nuclear-powered aircraft carriers (CVNs). CVN-78 was fully funded in prior fiscal years. The Navy's proposed FY2016 budget requests procurement for CVN-79 and advance procurement (AP) funding for CVN-80. CVN-78 was procured in FY2008. The Navy's proposed FY2017 budget estimates the ship's procurement cost at $12,887.0 million (i.e., about $12.9 billion) in then-year dollars. The ship received advance procurement funding in FY2001-FY2007 and was fully funded in FY2008-FY2011 using congressionally authorized four-year incremental funding. To help cover cost growth on the ship, the ship received an additional $1,374.9 million in FY2014-FY2016 in FY2015 in so-called cost-to-complete procurement funding. The Navy's proposed FY2017 budget does not request any additional funding for the ship. The Navy has postponed the ship's delivery date repeatedly to accommodate delays in its construction and testing process. As of January 2017, the ship was scheduled to be delivered to the Navy in April 2017. CVN-79 was procured in FY2013. The Navy's proposed FY2017 budget estimates the ship's procurement cost at $11,398.0 million (i.e., about $11.4 billion) in then-year dollars. The ship received advance procurement funding in FY2007-FY2012, and the Navy plans to fully fund the ship in FY2013-FY2018 using congressionally authorized six-year incremental funding. The Navy's proposed FY2017 budget requests $1,291.8 million in procurement funding for the ship. The ship is scheduled for delivery to the Navy in June 2022. CVN-80 is scheduled to be procured in FY2018. The Navy's proposed FY2017 budget estimates the ship's procurement cost at $12,900.0 million (i.e., $12.9 billion) in then-year dollars. The Navy wants to use AP funding for the ship in FY2016 and FY2017, and then fully fund the ship in FY2018-FY2023 using congressionally authorized six-year incremental funding. The Navy's proposed FY2017 budget requests $1,370.8 million in AP funding for the ship. CVN-81 is scheduled to be procured in FY2023. Under current plans, the Navy would use AP funding for the ship in FY2021 and FY2022, and then fully fund the ship in FY2023-FY2028 using congressionally authorized six-year incremental funding. The Navy's FY2017 budget submission programs the initial increment of AP funding for the ship in FY2021. Oversight issues for Congress for the CVN-78 program (and other carrier-related issues) include the following: whether to approve, reject, or modify the Navy's FY2017 procurement and advance procurement (AP) funding requests for the CVN-78 program; whether to provide advance procurement (AP) funding in FY2017 for the purchase of materials for CVN-81, so as to enable a combined purchase of materials for CVN-80 and CVN-81 (the Navy's proposed FY2017 budget does not request any AP funding for the procurement of materials for CVN-81); whether to approve, reject, or modify the Navy's proposal in its FY2017 budget submission to deactivate one of the Navy's carrier air wings; cost growth in the CVN-78 program, Navy efforts to stem that growth, and Navy efforts to manage costs so as to stay within the program's cost caps; CVN-78 program issues that were raised in a January 2016 report from the Department of Defense's (DOD's) Director of Operational Test and Evaluation (DOT&E); and whether the Navy should shift at some point from procuring large-deck, nuclear-powered carriers like the CVN-78 class to procuring smaller aircraft carriers.