SAS12: Multi-year contract could yield 10th destroyer
The Navy must work to find cost savings and keep programs on schedule if it hopes to deliver a fleet that measures up with the new defense strategy that emphasizes the Navy and Marine Corps’ influence in the Pacific, the Navy’s top buyer said Wednesday.
Sean Stackley, Navy assistant secretary for Research, Development & Acquisition, told a breakfast crowd at the Navy League’s Sea-Air-Space Exposition the service must continue to invest in multi-year contracts to find those savings.
The Navy has requested a multi-year contract from 2013 to 2017 to buy nine Arleigh Burke class destroyers. Stackley said the multi-year contract would save an estimated $1.5 billion. Saving money means the Navy could build more ships.
“In addition to these savings, our ability to leverage programs … gives us a reasonable expectation that a tenth destroyer, a tenth destroyer, will be within reach,” Stackley said. “Congress is working closely with us to meet this objective. This would be a huge win for the Navy and industry.”
Stackley said 2014 will be an especially challenging year for ship building. The Budget Control Act has restricted the Navy to building one submarine and one destroyer that year.
The Navy wants to boost that number to two submarines and two destroyers in 2012, but it is imperative the service lock down a multi-year contract for the Virginia class submarine to provide that cost stability. Stackley, however, has received resistance from Congress when requesting additional funding for the Virginia class submarine.
Navy leaders chose to delay development of the Ohio class submarine, deferring $8.5 billion in funding. Stackley said it was important for the Navy to direct that $8.5 billion to other Navy ship building needs because of the budget cuts dictated in the Budget Control Act.
If the Navy wants to avoid losing funding for the next generation John F. Kennedy aircraft carrier, it must learn from the mistakes it made in building the Gerald R. Ford aircraft carrier.
“The cost of building CVN 78 is unacceptably high,” Stackley said.
He cautioned that the Navy will not “charge into” production of CVN-79, but instead take lessons learned from CVN-78 and make sure the building experience is not repeated with the John F. Kennedy carrier.
“We are convinced she will deliver on schedule,” Stackley said. “We can afford no other outcome.”
Congressmen Joe Courtney and Rob Wittman, members of the House Armed Services Subcommittee on Seapower and Projection Forces, introduced Stackley before his speech. With other Congressional staff members in attendance, the potential $1 trillion sequestration cuts hung over the discussion.
Courtney quipped that he had never seen such a breakfast crowd for an acquisition speech saying that the defense cuts and Budget Control Act passed by Congress might have something to do with it.
Those cuts have placed incredible pressure on the Pentagon to deliver Joint Strike Fighter, Stackley said.
“This year our formidable challenge of matching schedule and cost growth associated with next generation capabilities provided by the Joint Strike Fighter has been compounded by our fiscal realities,” Stackley said.