Report Urges Defense Dept. To Keep Eye On Carrier Costs

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Norfolk Virginian-Pilot
September 25, 2007 By Jon W. Glass, The Virginian-Pilot
A federal report released Monday urges the Defense Department to step up efforts to contain costs on the Navy's next-generation aircraft carrier, being designed and assembled by shipbuilder Northrop Grumman Newport News.
Without better controls, the first-in-class carrier Gerald R. Ford could cost taxpayers more than budgeted and be less capable than planned, the Government Accountability Office said. The Virginian-Pilot reported some of GAO's findings Saturday.
While the Navy and the shipyard have made "significant progress" in maturing the ship's computer-aided design, "substantial risk remains," the congressional watchdog agency said. "The budget is optimistic, with a target cost for construction that the Navy will in all likelihood exceed."
The Ford already is the Navy's most expensive lead ship, with a total cost estimated at $13.9 billion. That covers $10.5 billion for design and construction and $3.4 billion in research and development for a range of high-tech improvements for the new carrier class.
Some of those key technologies now risk busting the Navy's budget because of technical problems and testing delays. They include an electromagnetic aircraft launching system that will replace steam-driven catapults and a new software-run arresting gear to land fighter jets. Both are being built by San Diego-based General Atomics, which has never produced a shipboard system, the GAO said.
A dual band radar being developed by Raytheon Co. - critical because it provides the ship's surveillance and air-traffic control capabilities - also has faced development problems. For one, it can't interface with the electronic warfare system now used on carriers, and the Navy still is drafting a plan to fully integrate the radar on the Ford.
Besides that, the electromagnetic field created by the aircraft launching system could disrupt the ship's radar and electronic systems, risking flight-deck accidents during aircraft landings, the GAO said.
Besides technology issues, the GAO said the Navy lacks effective programs to monitor performance at the Newport News shipyard and to "recognize and mitigate risks that could increase costs."
While the Navy said it plans to step up oversight of the shipyard in 2008, after a construction contract is awarded, the GAO said the shipbuilder is performing work equal to 30 percent of the ship's total cost.
"The Navy is missing an important opportunity to gain knowledge regarding shipbuilder performance" before awarding the contract, the GAO said.
In responses attached to the report, the Defense Department concurred with most of the recommendations GAO issued to monitor costs. The Navy, for instance, has authorized adding 80 people - including 30 more next year - to its shipbuilding office in Newport News to provide independent oversight of Northrop Grumman's performance.
The Navy also plans to require contractors working on the carrier program to provide monthly reports that detail changes in cost or schedule.
Navy Capt. Michael Schwartz, program manager for the Ford class of carriers, said that the service "is actively managing the risks associated with the cost, capability and schedule" of the Ford.
To cut costs, the Navy has eliminated several capabilities considered non critical, including a dynamic armor protection system.
 
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