The Navy’s planned $130 billion investment in a new class of submarines, which serve as a key part of the nation’s nuclear deterrence program, is behind schedule and over budget.
The Navy plans to invest almost $130 billion to research, develop, and buy 12 Columbia-class submarines to replace the existing fleet of 14 Ohio-class ballistic missile submarines. This is the sea-based leg of the nation’s strategic nuclear deterrence program. A U.S. Government Accountability Office report said the ships are behind schedule and could cost far more than planned.
“An estimated delay of more than a year in delivering the lead submarine and projected cost increases will be difficult for the Columbia class program to fully correct as it faces additional risks and issues late in construction,” according to the report. “Although Electric Boat and the program have ongoing efforts intended to help recover from persistent challenges, the lead submarine is entering a period of construction that involves additional risks that are likely to contribute to cost and schedule growth.”
The problem could get worse.
“The Columbia class program has experienced persistent design and construction challenges that have contributed to schedule delays and cost growth,” according to the report. “These delays and increases will likely worsen due to risks that are expected to be realized when completing complex tasks during final assembly and test. This could hinder the Navy’s ability to mitigate current delays and cost increases and its ability to stem future ones.”
Taxpayers will be on the hook as costs climb.
“Our independent analysis calculated likely cost overruns that are more than six times higher than Electric Boat’s estimates and almost five times more than the Navy’s,” according to the report. “As a result, the government could be responsible for hundreds of millions of dollars in additional construction costs for the lead submarine.”
The report notes that the stakes are high for the new ships.
“Delays to the delivery of Columbia class submarines will affect how the nation plans to meet its nuclear deterrence requirements, a national security imperative. In addition, cost growth on this priority program, absent additional funding, could force critical tradeoffs for the Navy’s planned fleet,” according to the report.
Two U.S. shipbuilders – General Dynamics Electric Boat and Huntington Ingalls Industries Newport News Shipbuilding – design and build the new class of nuclear submarines. Electric Boat is the prime contractor for both design and construction of the Columbia class program, with Newport News serving as a major subcontractor.
As Ohio class submarines begin to retire in 2027, the lead Columbia class submarine must be ready for its first patrol in fiscal year 2031 to avoid a gap in deterrence requirements, the Navy said. Late delivery of Columbia class submarines could jeopardize the start of this planned transition, according to the GAO report.
The shipbuilder’s construction of the first and second Columbia class submarines is being conducted under a cost-plus-incentive-fee contract, under which the government generally assumes the risk of a cost overrun. A cost-plus-incentive-fee contract is intended to motivate the builder to effectively manage costs by providing for an initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs.
