HII's Petters: Real question facing Ohio-class Replacement is funding

The real question facing the next-generation ballistic submarine program is how to pay for the program because all of the mechanisms inside the Pentagon are in place, according to Mike Petters, chief executive of Huntington Ingalls.

During an earnings conference call this morning, Petters recapped how the business arrangement between HII and General Dynamics Electric Boat is decided and the path ahead is known. However, he called sequestration a "wet blanket" on the Navy's plans.

"If you try to fund ORP out of the Navy shipbuilding account, it's going to squeeze programs down and delay them, which will have [an] effect on our shipbuilding business," Petters said. "We think that's an industry-wide problem, it's not just an HII problem, but I think it's the No. 1 issue facing the Navy shipbuilding account and it's a subset of the major issue of what the heck are we doing about sequestration because we've got to get that fixed."

The Congressional Research Service in its latest updated report on the Ohio-Class Replacement Submarine program notes an issue for Congress is whether to authorize and appropriate in fiscal year 2017 advance procurement funding for the program in the Navy's shipbuilding account or in the National Sea-Based Deterrence Fund.

Inside the Navy recently reported the Defense Acquisition Board will meet Nov. 4 to make a milestone B decision on the program.

The milestone B decision was originally slated for August but slipped. The meeting will green light the program from technology maturation and risk reduction into engineering and manufacturing development.

Shortly after the DAB meeting, the Navy will award a contract to General Dynamics Electric Boat to begin detailed design and construction.