Navy Chief Pushes For Shipbuilding Overhaul

April 5th, 2007  
Team Infidel

Topic: Navy Chief Pushes For Shipbuilding Overhaul

Newport News Daily Press
April 4, 2007
Pg. C10

The secretary warns of fraying relations between the service and shipyards.
By David Lerman
WASHINGTON -- Navy Secretary Donald Winter urged an overhaul of Navy shipbuilding practices Tuesday, saying the current system "is simply not meeting our expectations."
After completing his first year as the Navy's civilian leader, Winter used an appearance before hundreds of contractors to press the case for reforms that he said would better control costs and rebuild a dwindling fleet.
"We have to be ready and willing to make some real significant changes," he told reporters at a later news conference.
For too long, he said, the Navy has routinely underestimated the costs of building ships while giving wide latitude to contractors -- who have little competition -- to control the design and construction process.
Among the needed reforms, Winter said, are independent cost estimates, more knowledgeable program oversight and a willingness by shipbuilders to invest in their yards for the long term.
But he conceded that his proposal was still a work in progress and that any changes would have to be tailored for each specific ship program.
The speech to the annual Navy League conference was similar to one that he delivered a year ago, when he warned relations between the Navy and industry were "beginning to fray."
Building on that theme, Winter faulted the Navy and shipbuilders for failing to adopt changes in how ships should be built.
"It's a mark of frustration that we're not getting as much as we could out of the industry," he said of his address.
Tensions between the Navy and industry have been evident in recent years as each side blamed the other for a dwindling fleet, which has shrunk from a Cold War high of nearly 600 ships to 276 today.
Navy leaders have complained that shipbuilders fail to rein in costs and often exceed their promised cost targets. Shipbuilders, in turn, said the Navy often changed the design requirements of ships, so costs must rise, and made business planning difficult because of constant revisions in Navy shipbuilding budget forecasts.
Winter conceded that point but noted the Navy had issued a new 30-year shipbuilding forecast designed to give the industry stability. For the first time in years, the plan was unchanged from last year's budget projection.
But Winter said shipbuilders must be willing to modernize their yards and make them more efficient. "The current level of investment in our shipyards is nowhere near adequate" to meet the needs of a future fleet and match the capabilities of foreign yards, he said.
At the same time, he said, the Navy must obtain independent cost estimates of new ships, instead of relying on contractors who frequently face no competition in ship construction work.
He said the Navy also must learn to resist underestimating the price of ships. Costs of new ships are too often low-balled, he suggested, to get them approved by Congress.
Industry leaders have said they could build ships more efficiently with higher rates of production and a stable shipbuilding plan.
The Navy's long-term plan calls for rebuilding the fleet to 313 ships.
But by the Navy's own forecast, even with all the additional money that it wants, it wouldn't reach that goal until 2016.

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