Navy Confronts $80 Billion Cost Of New Ballistic Missile Submarines

By / December 7, 2009

The Navy is preparing to tell Congress the $80 billion cost of building new ballistic missile submarines in the coming years could force big shipbuilding cuts and trigger industry consolidation unless the service receives additional funding for the project, sister publication Inside the Pentagon has learned.

The 12 new SSBN(X) subs are considered critical for U.S. national security. They would replace 14 Ohio-class subs that carry nuclear ballistic missiles and are deemed by the Navy the most survivable leg of the U.S. strategic arsenal.

In the previous 30-year shipbuilding plan sent to Congress in February 2008, the Navy did not account for the cost of the SSBN(X) project -- an omission the service never fully explained. The Navy is now confronting the grim reality that it cannot afford the new subs without curtailing or giving up other shipbuilding projects, according to Pentagon and naval sources and internal documents reviewed by ITP.

The decision to fund the new subs from within the Navy's anticipated budget marks the "single most significant change" since the previous plan, according to a draft of the new 30-year report due to be released to Congress in two months. The report has not been finalized and remains subject to change.

The plan says it might be helpful if Congress lets the Navy split the cost of each SSBN(X) over multiple years, but argues big cuts are likely unless additional funding is provided.

"Unfortunately," ship cuts in the new plan "will likely cause some consolidation in the U.S. shipbuilding industrial base," according to the document, which also notes the Navy will balance warfighting needs with the limitations of the U.S. economic base. The Navy is seeking to minimize the costly SSBN(X) program's impact on the shipbuilding industrial base and on the overall force structure. But in the years when new subs are bought, the procurement of other ship types will be "dramatically reduced resulting in both force level and industrial impact," the draft warns.

A Pentagon source said the need to buy the new subs poses a "big problem" for the Navy because the project is expected to consume much of the shipbuilding account for years.

Funding SSBN(X) within the Navy's shipbuilding budget will "greatly impact the Navy shipbuilding plan and will likely jeopardize that portion of the shipbuilding industrial base not directly involved in submarine production," the draft plan contends. Northrop Grumman's shipyard in Newport News, VA, and General Dynamics' Electric Boat shipyard in Connecticut build subs for the Navy.

The report notes that plans to limit production of surface combatants to fewer than two ships per year for most of the period of SSBN(X) procurement will likely hurt shipbuilders. GD's Bath Iron Works shipyard in Maine and Northrop's Ingalls shipyard in Mississippi build surface combatants. Ingalls also builds amphibious ships. Bath is also part of GD's effort to win the Littoral Combat Ship competition. Lockheed Martin leads the other LCS team.

The Ohio-class subs are due to start retiring in fiscal year 2027. SSBN(X) procurement must get under way by FY-19 to ensure operational subs will be available to replace the vital Ohio-class subs as they leave operational service, the Navy maintains. Research and development costs for the new program are starting to accrue today; detailed design is slated to start in FY-15.

The Navy plans to buy the first sub in FY-19, the second in FY-22 and one annually from FY-24 to FY-33. Any delay in construction will hurt the Navy's ability to meet the sea-based strategic deterrent operational requirements established by U.S. Strategic Command, the service maintains. The new subs must be mission capable starting in FY-29 before the inventory of Ohio-class subs can drop below 12, according to the draft plan.

"There is no leeway in this plan to allow a later start or any delay in the procurement plan," the Navy writes.

The SSBN(X) procurements will be concurrent with the wholesale end-of-service-life retirements of Los Angeles-class attack subs, Ticonderoga-class cruisers, Arleigh Burke-class destroyers and LSD-41/49 dock landing ships. As the Navy buys the new subs, only four or five other major ships could be built per year, according to the draft plan, which notes this slowdown in procurement will occur when the Navy needs to be buying at least nine to 10 ships annually to maintain its force level.

The Navy anticipates the slowdown will shrink the size of its fleet. The large surface combatant force will drop to 43 ships fewer than the 96-ship target force level, while the attack sub inventory will drop to a low of 38 boats and the amphibious force will drop to 26 ships -- seven fewer than the 33 required, according to the draft.

By FY-40, the battleforce inventory will drop to 237 ships, 87 vessels short of the draft plan's stated goal of 324 ships. And considering the change in force composition with 20 percent of these numbers being Littoral Combat Ships and Joint High Speed Vessels, the fleet of FY-40 will have "less warfighting capability," the service writes. It will take decades to reach the 324-ship level, the Navy maintains.

"The effect on the industrial base will likely be the loss of certain shipbuilders, combat system companies and suppliers," the draft states. Procurement schedules for guided missile destroyers, attack submarines, amphibious ships and other combatants will be disrupted with reduced procurements and years of production gaps that will hurt the shipbuilding and combat systems industrial bases, the Navy warns.

During the years of SSBN(X) procurement, attack submarine and guided missile destroyer procurements will decrease to one per year and numerous other ship classes -- including new maritime prepositioning ships, new command vessels and submarine tenders -- will not be built or recapitalized. This is primarily in a period from FY-19 to FY-33.

But the plan holds out the possibility Washington might ultimately provide the Navy additional funding for the program, reducing the impact on industry and boosting the FY-40 fleet size. If the Navy were to receive an extra $80 billion to cover the cost of the subs over the period in question, the service could buy 44 additional ships over the 30-year plan, according to the draft: 19 DDG-51 destroyers, 15 Littoral Combat Ships, four attack subs, two LPD-17 amphibious ships, one LH(X) amphibious ship, seven T-AO oilers, two sub tenders and six Joint High Speed Vessels. This would boost the FY-40 fleet size to 279 ships, with "fewer shortfalls in critical areas," the Navy maintains.

The Navy previously called for 14 new ballistic missile subs but now says only 12 are needed. The cost estimate of approximately $80 billion assumes the SSBN(X) unit cost to be roughly $6 billion to $7 billion, consistent with the cost of an Ohio-class sub escalated to FY-09 dollars, the report states. Hence, the SSBN(X) project could cost at least $72 billion to $84 billion, according to the draft.

The previous report predicted a fleet of over 300 ships from FY-17 onward, with 322 in FY-38. But the new plan would sustain a fleet of 279 on average, rather than the new goal of 324. (The previous goal was 313.) It says the fleet will have 284 ships in FY-11, rise to 312 in FY-21 and drop to 237 by FY-40. -- Christopher J. Castelli

Editor's Note: For charts from the draft Navy shipbuilding plan,click here.