Navy confirms cost overrun on CVN 78

Navy confirms cost overrun on CVN 78

Navy Secretary Ray Mabus confirmed Thursday that the cost overrun for the aircraft carrier USS Gerald R. Ford is projected to reach $1 billion, bringing the ship’s total cost to some $12 billion — but said it’s on track to be delivered on schedule.

The admission took place under questioning from Arizona Sen. John McCain, the ranking Republican on the Senate Armed Services Committee, who pointedly asked Mabus “what have you been doing on your watch” to control the costs on the new ship.

Mabus said the Navy’s deal with shipbuilder Huntington-Ingalls Industries is such that the government has “recovered its fee” for the project, and remainder of the money for the ship will only go to cover its costs. He also said the Navy expected to use the lessons learned on the first-in-class Ford to make sure the next ship, the USS John F. Kennedy, would not have the same types of cost problems.

Would the Navy need to ask Congress for permission to go above the cost cap on the ship? McCain asked. Not this year, Mabus said — but next year, the service will probably have to get special authorization to pay to continue building.

Navy officials had said before that their worst-case scenario for the Ford was a $1.1 billion cost overrun, and that’s what they had planned for internally. But they said they thought the previous public number, $800 million, was probably as bad as it would get, leaving some headroom in their plans for the medium term.

McCain told Mabus that he’d be “reluctant” to spend more money on the Ford class until the Navy and Huntington-Ingalls can show they’ve gotten the ships’ costs under control. But there doesn’t seem to be any serious threat to the future of the program — if the Pentagon wanted to save the money it must spend on carriers, it could have reduced its requirements in its new “strategy” But it didn’t.

What’s difficult to understand is just how the ship could continue to increase in cost even as it stays on schedule. Often, ship cost overruns take place because engineers need to go back and undo or redo earlier work, which adds delays, which add costs. It’s possible that H-I built enough of a cushion into the schedule for the Ford that the problems it has been having could just absorb more money without needing more time, but we’ve asked for more information to be sure.

And as embarrassing as it might be for the Navy to admit cost growth on top of cost growth, and need to come back to Congress cap in hand, this situation could be a lot worse: Skeptics feared for years that the Ford’s advanced new Electromagnetic Aircraft Launch System — which takes the place of the Nimitz class’ old fashion steam cats — might not work. That could have necessitated ripping the ship apart and installing a steam system, to the tune of new costs that could dwarf this one.

By all accounts, however, EMALS works and the Navy appears to expect it to work at sea. We’re a long way off from actual, underway proof of that —  first the Navy just has to get this ship built.

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A couple of way a ships cost can go up despite staying on schedule is:
A) if materials are more expensive
B) if in the course of maintaining schedules they’re running extra shifts or working overtime
C) if additional engineering was anticipated in the schedule but the cost of implementing the corrective action was not.

We’ve got to break this pattern of cost overruns. The more they happen, the more they are being tolerated as ‘business as usual’. they need a thorough independent audit, identify culpability, and fire someone in leadership if any unacceptable performance is found. If this is truly the result of circumstances out of control, then we will need to include that possibility of cost growth into future acquisitions.

I’d put my money on a combination of A & B. C is too hard to anticipate, and is really easy to just change order for.

you’re talking about the military industrial complex.… serious

Whatever we do, let’s never go back to having the Navy designing their own ships. No, paying a contractor a profit incentive to screw us is working out way too well. Yeah, let’s never go back to that nasty old way of doing things.

Agreed, but that doesn’t mean management can’t pass along the blame to somebody who probably didn’t deserve it.

The state of the economy also probably has a larger than average impact on a program this large.

That’s easy fine the company making them when they are late and cost go over the amount they said it cost the Government to make it. Some of these companies are to blame for cost over runs.

I am not sure I have the facts straight on this, but… Would a significant chunk of this increase in costs be attributable to L-Mart’s AN/SPY-4 S-band VSR portion of DBR? As I recall, Ford class (CVN-78) was supposed to get DBR after it had been developed for use on the Zumwalt class (DDG-1000). A Nunn-McCurdy breach (announced in June 2010) brought on a program restructuring that cancelled the SPY-4 portion of DBR for the Zumwalts, but I do not think they cancelled SPY-4 for Ford. I think Ford still gets DBR as planned, SPY-4 included, but now the cost of Ford’s DBR may be be loaded with L-Mart’s development of SPY-4. Just a guess, as I don’t have the facts.

GAO reported in 2007 that: “Costs for CVN 78 will likely exceed the budget for several reasons. First, the Navy’s cost estimate, which underpins the budget, is optimistic. For example, the Navy assumes that CVN 78 will be built with fewer labor hours than were needed for the previous two carriers. Second, the Navy’s target cost for ship construction may not be achievable. The shipbuilder’s initial cost estimate for construction was 22 percent higher than the Navy’s cost target, which was based on the budget. Although the Navy and the shipbuilder are working on ways to reduce costs, the actual costs to build the ship will likely increase above the Navy’s target. Third, the Navy’s ability to manage issues that affect cost suffers from insufficient cost surveillance. Without effective cost surveillance, the Navy will not be able to identify early signs of cost growth and take necessary corrective action.” http://​www​.dtic​.mil/​c​g​i​-​b​i​n​/​G​e​t​T​R​D​o​c​?​A​D​=​A​D​A​4​7​9​373

GAO also reported in 2007 that: “Delays in technology development may lead to increases in CVN 78’s planned construction costs and potential reductions in the ship’s capability at delivery. While the Navy has mitigated the impact of some technologies, such as the nuclear propulsion and electric plant, three systems — the electromagnetic aircraft launch system (EMALS), the dual band radar, and the advanced arresting gear — have faced problems during development that may affect the ship’s construction costs.” http://​www​.dtic​.mil/​c​g​i​-​b​i​n​/​G​e​t​T​R​D​o​c​?​A​D​=​A​D​A​4​7​9​373

Will you then “fine” the government (congress) who pushes funding to outyears which by itself causes overruns of costs and schedules. Will you fine the NAVSEA or other government workers who change specs and requirements AFTER things are designed and then tell you that it MUST be part of what you’re building even though you’ve already bought/designed/built to what was originally called for. For a great example of this, consider that the the forward supestructure of Lockheed’s first LCS was already built and in place when the government decided that the bridge windows needed to be different in size and shape.

Oh, never mind, I forgot that whole bridge bulkhead replacement was because contractors are ripping off the government

If you want to see disasters look at the new classes of Littoral warships. A very under reported story.

What? They aren’t sure the launch system will work at sea, which might cause a very expensive rebuild? Why don’t they get in the proposal for builds the cost of the ship is the cost of the ship, delivered on time. Any delays, the payment to the builder is decreased. Any cost over-runs are absorbed by the builder. If I had a car built for me, I wouldn’t expect to pay extra if it was late…I’d expect to pay the same…or less.

Why are we still building Bird farms? They are an antiquated floating target.

People who think that the government just lets these companies slide are misinformed. I’ve worked with NAVFAC personnel, they are notoriously tight fisted and take their spending seriously. The cost overruns are most likely oversights by the contractor. Once the contract has begun, it is too expensive to dump the contractor and get a new one, you either pay or go without. “Not In Original Scope” always precedes a very large bill.

The LCS is the greatest example. The Navy wanted a light fast close to shore vessel to land troops quickly and cheeply. Someone in Congress decided they needed is to be a minesweeper too. Oh, and a destroyer, it needs to be a destroyer too. By next year they will require LCS to fly as well. Scope creep is the worst enemy of budgets and it takes years to design these large projects. In the mean time congressmen and the people in the Navy change, and new people add more changes.

A billion here, a billion there. Pretty soon you’re talking about some serious money!

$1.1 Billion over cost-that ain’t nothing. Heck you can even buy a Little Crappy Ship for that amount of money.

For that price they should be able to afford the ’12 model!


You’re joking, right? Between them and the Zumwalt they are pretty much the only shipbuilding stories you hear about. To an outsider it would seem like the Navy is doomed by incompetence and we should just disband them and give up on having a global military. Remember, if it bleeds it leads.

We can not build anymore of these because we’ve run out of good Presidents to name them after.

It isn’t just the military industrial comples. The city of Dallas just built a totally unnecessary buridge that was supposed to cost in the double digit millions and ended up costing in the triple digit millions. If you look across the Nation at what governments (local, state, Federal) are eventually paying for their contracts all are over ran because the contractors know they can get the money. Private contracts are on time because the contractors know that the private individual only has the cash they bid for…the PROBLEM IS TOO MUCH GOVENRMENT and their belief that it isn’t their money we can spend all we want.

The problem is greed, corruption and unethical behavior in the private sector. Especially with respect to government contracts. I would say stop government contracts entirely and if the government needs something done, do it without the private sector. If government (read: WE) can’t then we don’t need it.

When the ship yard was Newport News I bet this would not have happened. Only one yard can build Carriers so it is either pay the fiddler or no music.

Old Navy

First of its class ships always cost more.. The technology bringing developed will go a long way and ensure our techological curve is till ahead in the world.

he does have a good point Rabbit, look how much we’re paying for the Little Crappy Ship, a cool $1.8B EACH! And what do we get for that $1.8B, a aluminum foiled, gas guzzler, do nothing, pea shooter of a jet ski. You can’t even qualify the LCS as a warship. Maybe a coast guard patrol boat, but I know the Coasties would take insult.

the value of the dollar is dropping like a brick, costs of steel is up through the roof, and most of it comes from China now, inflation is eating away at everything now. It’s not surprising costs have come up.

It IS Newport News. Same engineers and managers and more importantly, same unions and tradesmen. New company name twice over

By law, US warships are built using US steel. I leave it to the boards to say whether that’s a cost upper or not, but you can’t beat the quality of Milspec metals

that’s great SMSgt I didn’t know that.

Did you hear that most of the new SF Bay bridge is being built in China with Chinese steel? I couldn’t believe that when I heard it.

At least our warship are still 100% born in the USA. :-)

Hey Nimitz, dazzle us with your brilliance, don’t baffle us with your bullshit

The LCS is a total waste of taxpayer $. The per unit cost, though, has inflated to about $400M not $1.8B.

Your illusory “technological curve” and pricey Milspec steel isn’t gonna save your bazillion dollar floaty thing when the other folks’ technological curves show up in the form of high-speed torpedoes, stealth mines, and ASBMs .

Carriers are fine for bullying second-rate adversaries around, but if you ever get in a shooting match with a top-rate opponent, you’ll either have to keep’em close to home like they did with the WWI dreadnought fleets, or make sure the surrounding ships in the battle group have lots of extra bunks to spare…

Hey Aaron check this out

“Littoral Combat Ship (LCS)
$2,168.5 million requested for four vessels
$1,866.3 million– per unit cost”

here’s the source http://​costofwar​.com/​e​n​/​p​u​b​l​i​c​a​t​i​o​n​s​/​2​0​1​1​/​a​n​a​l​ysi

Because there’s no corruption in the government/public sector? Right…

Though I wish I got their pay and benefits. So actually, sign me up.

@ JRL: ever see Tom Clancy’s movie, The Sum Of All Fears ? Very realistic scene onboard CVN-74 USS STENNIS inside their “CIC” as the watch team begins (too slowly) to realize they might actually have some real world, live, enemy Hostile missiles very rapidly homing on their giant CVN. Watch it sometime, and you will see very accurately just how vulnerable are our nation’s 100,000 ton CVN HIgh VAlue Targets (HVT’s). Ownship Evolved Nato Sea Sparrow, RAM, and CIWS will not stop all the ASCM and some will leak thru. Part 1 from Retired Now comment.

Hey Guest, it obvious you didn’t serve during the Cold war when the Navy had to deal with the threat of swarms of Backfire bombers doing mass saturation raids against the battle group with Mach 4 speed AS-4 missiles.

We were able to deal with the threat back then-20 yrs ago and you saying NOW we can’t handle a much lesser threat from China or someone else???

“Retired Now” from what?

Correct me if I’m wrong, Rick, but isn’t it even more obvious that USN carriers were never actually attacked by those “swarms of Backfire bombers doing mass saturation raids against the battle group with Mach 4 speed AS-4 missiles”, were they?

So how can you be so sure that the Navy would have been able to deal with such attacks? Did you see their defensive tactics ‘proven’ on one of them big, fancy board games the admirals used to like playing with, or what ?

Unfortunately, the cost everything will continue, making difficult to bean-counters to justifiy these ships costs. CVNs are powerful asset, but you if you want smaller ones, means smaller aircraft. Personally don’t like UCAVs, but if way world is being driven too. It would result in smaller carriers, but if their cheaper…i don’ think they will be. When basic costs for just metal alone is going up, no matter how small you build them, costs will keep going up as long their strong demand for base components never mind near exotic sensors and computer systems.

I remember two British people talking on TV about the Queen Elizabeth carrier and one of them said a joke that went something like this: “As of right now the Royal Navy can afford to have either the carriers or the aircraft and not both.”

The US Navy isn’t in the same position, but it looks like we need to make sure that are looking for more cost effective solutions to our problems.

No nothing like that JRL, I was never that privy :-) I just read a lot.

One way to look at it JRL is that the Soviets never tried it for real, even though they practiced it a lot.
Knowing the enemy is key to winning any battle and perhaps the Soviets knew how good we were too well. At least if I was in charge in the Soviet Union at the time, I would’ve said that the price of a successful attack on a CBG would have been very high for them. As in all war, you only attack when you chances of success are high not when they are low or medium.

Now let’s discuss the threat we’re actually facing facing today. China does have weapons and platforms but they are no Soviet Union. China currently does not have a way to reach out and touch the fleet like the Soviet Union could. The Soviet Union had a huge fleet of Backfire bombers, they had recon and targeting assets and they had a killer anti-ship missile. You can’t say the same about China right now. Maybe in 10 years but not now. Of course we could talk about the mythical ship killer ballistic missile China supposedly has, but so far the facts don’t show any operational capability. Any ballistic missile launched can easily be interpreted as a nuclear missile and the results wouldn’t be good for China. So if you were in charge of the military in China, would you launch a ballistic anti-ship missile at a US CBG, not very likely as it would be interpreted as the start of a nuclear war.

Two more points. Our defenses and capabilities have only gotten better over the last twenty years
Now we have SM-3, SM-6, all flavor or SM-2, RAM, better CIWS, better electronic, much better counter measures, and much better radars and such.

Last point. Carrier may be big targets but that is an advantage. It would take a lot to actually sink a carrier or to put it out of commission for a long period of time. As you can see from our own sinkex it takes a whole heck of a lot of abuse to sink a carrier-as these were the older ones. Much like a big heavy weight boxer that can take a lot of hits and keep fighting, its the same with CVN. Of course one could say that we’d be better off with smaller carriers or Amphib sized fleet but the problem there is that you still have to protect them and smaller carriers could be taken out of action with a single missile hit.

One of the big items being overlooked is this ship was designed by computer. Very little shipchecking was accomplished, but when it was changes had to be made. Costly changes. As was previously stated they have the monoply on building nuclear carriers, therefore we will pay the price. I would like to see the enormous list that makes up the cost overruns. But that too will never happen. Where were the government watchdogs while al this was going on. ???

You could not build a ship this complex without computer aided design. Every component on this ship was fitted and checked with every surrounding component. Your observation has no merit.

?? $2,168.5 million divided by 4 ships is $542,125,000 per ship. Regardless of your info source I have no idea how you came up with a $1.866 Billion dollars per LCS.

Why is Kennedy getting another ship in his name? He has had 2. What about other presidents like: Zachary Taylor, Calvin Coolidge,Uleysses Grant, Adams, jefferson, and many more. Kennedy got the 2 because he was wounded in war. He was a so so president, but nothing to deserve a third ship. As far as cost overruns, this is the 1st design and building of that class. So it will have problems. After this, they can build the next one with the Ford’s final building plans.

The shipbuilder didn’t choose the “unproven launch system” (magnetic catapults), they were chosen by the Navy and are supposed to be provided to the shipyard as a government furnished equipment. So now that the catapults are running late and having problems the shipyard has to sit on its hands instead of installing the catapults which are built in throughout the building process.
Naturally, if the lack of catapults causes the shipyard to be late or over budget, they must be a lying cheat of a company that is trying to cheat the Navy and if only the Navy built the ship, it would all be magically OK.

Our political system is so messed up naming warships after Democrats or Republicans has becoming political bargaining.

Really.…..Gerald Ford.….he is deserving?

I suggest that we adopt a new policy on new carriers.Cut the size in half boys.Personnaly i would rather have 2 of these than 1 of the big ones.When we get tangled up with some real adversarys my point will be instantly clear.I wonder what these planners are thinking.You can’t protect these floating cities
from the technology out there now.History of naval warfare in the Pacific during WW2 ‚particularly the battle of Midway, comes to mind.

@Big-Rick… Last Friday (the day you posted?) the Navy ordered LCS-10 and LCS-12 from Austal (trimaran variant) for $345.5M each. Also last Friday the Navy ordered LCS-9 and LCS-11 from L-Mart (monohull variant) for $357.5M each.

Hopefully, the extra CVN cost is for new technology to better defend & fight this ship (and other future ships). Can EMALS rapidly launch shells? Aegis radar that won’t fit well on old DDGs? More missile defense & offense like VLS? Unmanned technology? BAMS link with nuclear subs, so no need for oil dependent, range limited, unstealthy surface escorts? Laser? More automated technology to reduce crew size? Would such new technology be worth the extra cost, or would carriers still be too vulnerable (or ineffective due to range of planes vs missiles)?

Corporate welfare. And The GOP say “government doesn’t create jobs”! Still living in that make-believe bubble, those GOP’ers. But, it does indeed sound like their policies — promise you one thing and the ‘worst case scenario’ appears instead.

why is this still the problem with building anything,is it the unions!!! ‚is it the company they pick!!!,or we can not do anything any more and we have to out source all our work for now on???

Study after study has been done on the issue of carrier size and the smaller carrier has not shown to be an advantage. First of all, “cut the size in half” is misleading as if you cut the length in half, the ship would not be a functioning aircraft carrier. Gennerally, when someone says cut the carrier in half, they are talking about tonnage. Reducing the tonnage by half would save some of the cost but not nearly half. At the most, maybe a quarter because the ship would still need catapults, nuclear reactors, electornics, etc. Maybe 3 catapults instead of 4 and maybe 3 arresting wires instead of 4 but you really can’t cut it much more without seriously affecting its ability to do the aircraft carrier mission.

As a Government contractor cost overruns are not always “my” fault. Most are related to the customer (The Government in this case) asking me to add this or change that to…, after I had already planned or proposed certain things, This is called “Requirements Creep” where the customer asks for more that was originally planned and accounted for in cost. These additions and changes may or may not add schedule, especially if I am a seasoned contractor I know you’re going to add stuff so I put that in my schedule, but since I don’t know what you are going to ad I cannot put that in the cost. And since I don’t do anything for free I charge you for the changes you ask for. Hence cost goes up but schedule stays the same.

This is the big contractor lie, most of the added cost is due to poor design and rework not changed specifications.

When the specs are changed If anything the specs are reduced because the contractors can’t meet them.

What was the other ship besides the Aircraft Carrier, JFK?
I hope you don’t mean the destroyer named after his older brother Joseph P. Kennedy.

I have to agree with OldRedSWO here Blackjack, he’s right, the current size is optimal, you don’t gain anything by going smaller and in fact you lose a lot of operational capability; sortie rates, endurance (amt of bomb and fuel you can carry), size of the air wing, endurance of the air wing, endurance of the crew, not to mention protection. Large carriers are harder to take out of action verses small ones. As you can see from our sinkex’s large carriers are very very tough. A small carrier, like the Brits have would be taken out by one luck missile strike whereas the large carriers have the huge advantage of gross tonnage, it might take several missiles to take one out of action

I’m quoting what it says, I can’t prove it either way Phil, check out the site and let me know what you think.

One theory may be that the 1.8B is the total cost (with Navy supplied equipment) whereas the smaller number is simply the build costs (shipyard). The ship hulls and weapons systems are typically two different budgets.

Cost overruns would not be so much if DOD didn’t have to pay politicians and their friends graft money.

Native son,
You are dumber than dirt to blame the GOP. The DNC has much more talent in ripping off taxpayers so don’t just believe what the koolaid drinkers tell you to believe, THINK for yourself.

Political decisions are certainly a large part of the cost overruns. For example, thr USS Ford could have planned installation of the steam catapult piping and infrastructure from the nuclear reactors to the flight deck (same as Nimitz class and already on ship construction drawings) in case EMALS development failed. If so, it would be relatively cheap to revert to the steam catapult design on the USS Ford. However, if the shipbuilder recommends and pushes for eliminating the steam piping infrastructure from the initial USS Ford construction they know they will get big bucks to convert the ship to steam catapults later. This type of cost overrun example could potentially apply to thousands of similar decisions during the complex construction of an aircraft carrier. Its no surprise USS Ford cost overruns are $1.1 billion even without converting to steam catapults.

“They are an antiquated floating target.” ? When was the last time a “carrier” was successfully targeted?

The same reason the Navy kept building battleships after Billy Mitchell proved that they were antiquated floating targets. It took the sinking of the Bismark, the sinking of the Prince of Wales and the Repulse, and Pearl Harbor for the US Navy to finally realize that the age of the big gun battleship as queen of the fleet was over.

They CVNs will be the queen of the fleet until one gets sent to the bottom.

THIS IS NOT A COST OVER RUN! The Navy knew at contract signing the cost was low, but demanded the cost be reduced because it did not have the budget. The Navy received the true cost on the first estimate submitted by NNS and was forewarned that was what it would cost.

The Navy wanted a ground up, new design ship, with the latest technology of which three major GFE technologies had failed testing at the time of contract signing (EMALS, arresting gear, and one I can’t mention).

The Navy wanted a new Bentley for the price of a old Cadillac.

The ship construction contract excluding GFE was $5.1 billion and not $13 billion which includes the Navy GFE material and one time engineering and design costs.

The ship construction contract cost was $5.1 billion of the $13 billion. The Navy knew that was $800M to $1B low as they were given the true cost on the first estimate submittal, but said they did not have the money.

CVN78 was an exercise in cutting costs to meet the Navy’s limited budget. It has one less aircraft elevator than a Nimitz Class solely due to “lets cut it out to reduce costs” and not for any operational improvements.

These so called cost over runs are Navy driven. Did you know the Navy provided EMALs were a complete land based failure at the time the construction contract was signed? The catapults that launched the planes did not work! Also, the Navy provided arresting gear also failed? Also a secret system failed and now the is a huge chunk of concrete onboard to balance out the ship?

The Navy knowingly signed a contract for an aircraft carrier that could NOT launch or land planes but told the builder to build it anyway!

The navy was told the true full cost on the first contract submitted (Yes, it was about $1B as I was on that estimating team), but the navy demanded the price be lowered to meet their limited budget, now they whine about cost over runs.

The Navy wanted CVN78 to be cheaper than CVN77. CVN78 ship construction price is $5.1 billion and is not much more than CVN77. The other $7.9 billion is for Navy provided equipment and material, many being newly designed equipment.

You assume the overruns are the contractor fault as the Navy could never drag its feet and only approve 40% of the ship’s final design at contract signing? No way! That doesn’t add cost to make changes after you sign the contract.

Try getting a cost for a house telling the builder 40% of what you want and hinting at the other 60%. See how close the final cost comes when you tell him the rest after you signed the contract.

You mean watchdogs like the Navy, DCAA, SupShip, NAVSEA, and a hired cost analyst firm who all were provided the total ship cost estimate every 6 months for 4 years as the design progressed showing the true cost (yes it was ~$800 million higher), but the Navy said we don’t have that budget so cut it we are the customer.

You do know only $5.1 of that $13 billion is shipbuilder cost, the rest is GFE.

What you should really be pissed about is the aircraft carrier has new electric catapults (EMALS) that failed their only land based testing while the contract was being signed and the Secretary of the Navy was pissed. They have never been tested at sea on a trial ship, but will be installed on CVN78. This system if it doesn’t work will turn that aircraft carrier a nuclear barge as it’s only mission is to launch and land plans.


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