Over the last decade the U.S. Navy has been pursuing a recapitalization policy of its main infrastructure components-ships and airplanes. This policy was not necessarily the wrong approach to maintaining current and future military capabilities; rather, the timing of its implementation was off-it happened too early.1 It has not significantly increased our military capabilities in the short term, but it has done serious harm to our ability to maintain those capabilities into the mid- and long-term future. In essence, we are doing to ourselves what we did to the Soviets to win the Cold War-we are outspending the enemy, and in this specific case, the enemy is us.
The early retirement of the S-3B Viking multimission aircraft and the current retirement of amphibious ships of the Austin (LPD-4) class offer compelling evidence that our present approach to maintaining sufficient numbers of aircraft and ships to meet the threat of today and tomorrow may be too risky to our naval superiority. As such, the current recapitalization process guiding Navy acquisition plans requires a fundamental review and possible course change, or we risk following the Royal Navy into a near-untenable position of too few technologically superior ships trying to cover too many missions, many of which do not require such a high level of technology.2
In September 2000 Chief of Naval Operations Admiral Vern Clark outlined to the Senate Armed Services Committee the dilemma facing the Navy after years of under-funded shipbuilding accounts: "Fewer assets mean more underway time per unit. Increased use results in additional wear and tear on our ships and aircraft, requiring more maintenance"3 Although the CNO did not explicitly state the basis for his causality determination, his remarks imply that any increase in utilization would necessarily result in higher costs of operations. Based on that assumption he pleaded for more maintenance money at the same time asking for more money to increase the size of the Fleet so that the wear-and-tear factor would be reduced.
What If?
The CNO's concerns seem logical until one challenges the underlying assumption that greater operational use automatically leads to higher maintenance costs. Certainly increases in use ultimately lead to reaching the mean-time-between-failures (MTBF) limit sooner; however, cycle times also lead to earlier MTBF. An asset that is cycled more often fails before a similar asset that runs at steady state for a time period exceeding the MTBF limit. For instance, a ship of the LPD-4 class that operates its boilers for six straight months has a lower MTBF rate than an LPD-4 that is constantly bringing its boilers up and down as it completes training exercises.4 Hence, more underway time-the entering quantity argument of the CNO's causality model-is misleading unless it is used within the qualitative context of how that asset is employed.5
During that same testimony, the CNO stated that "the steady erosion of the service life of our platforms and equipment and a lack of a viable recoup plan will eventually lead to a point where we will be unable to sustain our operational commitments."6 The CNO's solution, based on his interpretation of the results from his fewer assets-higher use-higher maintenance causality model, was "a recapitalization program that delivers the right number of technologically superior platforms and systems for the Fleet."7 Admiral Sir Jeremy Blackham of the Royal Navy and Professor Gwyn Prins label this version of recapitalization the Technological Fallacy approach. This version "asserts that the improved capability inherent in each modern unit renders obsolete the old-fashion view that numbers matter."8
This is where the U.S. Navy finds itself eight years later, trapped in a technological fallacy world in which we cannot afford the newer technology and we have decommissioned older but still viable assets in an attempt to save enough money to buy one more technological ship such as the DDG-1000. Perhaps we can salvage a superior Navy by realigning, or should we say re-timing, our recapitalization plan. Consider the current state of the amphibious capability of the U.S. Navy as a possible example course of action.
The Marine Corps lift requirement, the fundamental driver of amphibious shipping capability, has been and remains the assault echelon of 3.0 Marine Expeditionary Brigade (MEB) equivalents. That includes the Marines, their equipment, vehicles, and 30 days' worth of ammunition and supplies. According to the 2001 Quadrennial Defense Review, lift was only available for 2.5 MEB equivalents and has been further reduced to 2.1. Navy and Marine leadership have acknowledged this deficit and stated: "[W]e must, therefore, continue to focus on the transformation of our amphibious warfare shipping-large-deck/aviation-capable amphibious assault ships, dock landing ships, landing platform dock ships-to a force that can affordably meet future needs."9
By the Numbers
Senior leadership in 2001 even warned of the consequences of transformation failure. "If we become frustrated in our goal for the LPD-17 program, our lift capability will atrophy to less than the current 2.1 MEB equivalents by the end of the decade."10 Since then, we have been frustrated in our LPD-17 program, and General James T. Conway, Commandant of the Marine Corps, confirmed such in his testimony to the House Armed Services Committee on 17 December 2007. "In the last several years we have accepted risk in our Nation's forcible entry capacity and reduced amphibious lift from 3.0 Marine Expeditionary Brigades (MEB) assault echelons to 2.0 MEB assault echelons."11 During the question-and-answer period General Conway reiterated the Marine Corps' requirement for 34 amphibious ships. The new Navy Operational Concept calls for 42 amphibious ships to support Global Fleet Station, four-ship Amphibious Ready Group, Special Forces, and mine countermeasures operations.12
The problem is, we have 33, not 34, operational amphibious ships. And two—LCC amphibious command ships—do not carry landing forces and one is manned in part by civilians. From a lift perspective, the U.S. Navy only has 31 amphibs and we cannot get to 42 using the current recapitalization strategy.
The LPD-4 ships are helping naval planners overcome the frustration of the LPD-17 procurement process by having their decommissioning dates slide to the right. It is reassuring to see that ships built 40 years ago for $240-380 million are still operating and doing so at a very high operational readiness level.
The USS Dubuque (LPD-8) completed a nine-month combat deployment 31 May 2007 and in less than nine months was a Warship Ready For Tasking. In fact, the Dubuque is the first West Coast conventionally steam-powered ship to certify her engineering plant under the Fast Track process, certifying in only 11 days of at-sea operations instead of the normal 21 steaming days. She returned on 4 November 2008 from a six-month Persian Gulf deployment and will redeploy in the summer of 2009 on a four-month humanitarian assistance operation before another Persian Gulf redeployment in 2010. All told, this 41-year-old ship will have been deployed five times in five years for five months or more (not including time spent at-sea for work-ups) yet her material condition is good and her maintenance costs are low (only $13 million for her current post-deployment maintenance availability).
And she is not alone in the Austin class. The USS Nashville (LPD-13) on the East Coast also certified her engineering department early, conducted a five-month 2008 deployment as an afloat staging base in the Persian Gulf, and is redeploying to SOUTHCOM for a four-month mission in 2009. Thus, it can be said that this class of ship remains not only operational, it remains so at a very high level and at a level higher than ships—LSDs—half their age.
Although it is counterintuitive, this operational capability does not come at a high cost in maintenance funds. For instance, the Dubuque underwent a $10.5 million Planned Maintenance Availability (PMA) after her 2006-7 deployment, a $1.2 million Continuous Maintenance Availability from December 2007-January 2008, a $0.4 million Window of Opportunity Availability in February 2008, and faces a $13 million 2009 PMA. Thus, for roughly $12-15 million per year, the Austin-class ship offers naval planners a platform that fills the high-intensity conflict mission of amphibious assault until the San Antonio-class ship comes fully online or can deploy in support of low-intensity operations such as afloat staging bases to support humanitarian assistance-disaster relief missions.13 More important, retaining the LPD-4s for another ten years reduces the utilization rate of the LPD-17s that worried previous CNOs and does so at a very attractive price.
Never Debated
Why is the Navy decommissioning a platform that costs the taxpayers only $15 million in maintenance per 18-month operational cycle at a time when its replacement platforms are "frustrated," at a time of increasing mission loads, when the missions are lower in intensity, and when we began already short of amphibious ships? The answer is the early recapitalization glideslope that previous decision-makers put the Navy on, which has not been adequately reviewed, challenged, or debated.
Under the last two CNOs, the Navy undertook a policy of recapitalization of the Fleet that was invoked too soon for the S-3B aircraft and Austin-class ships. An asset's early recapitalization wastes useful life and results in inefficiencies such as rapid deployment of the replacement platform. Recapitalizing a fleet too late introduces strategic risk. It is not easy to determine the correct time to recapitalize given our political and military acquisition mechanisms; however, once we observe that we are recapitalizing too early or too late, we should act.
When is the correct time to recapitalize? For an automobile, the proper time is when the value of the car no longer exceeds the repair costs. Applying this analogy to ships, that time is when the value of the maintenance required exceeds the cost of the replacement.
Each new LPD-17 costs $1.4 billion to obtain; whereas, the cost of an LPD-4 is zero dollars because they were purchased 40 years ago (the accounting principle of sunk cost). Based on a figure of $15 million per year for maintenance costs per ship, it would take almost ten years before the Austin-class ship total costs equal those of buying one more LPD-17.14 Using that data, the Navy should plan to finish recapitalizing the LPD-4 class in ten years from the Post-Shakedown Availability completion date of the first LPD-17 (July 2008) and not now as is currently being done. To recapitalize early is a waste of taxpayer dollars and exposes the country to strategic risks it should not have to face.
Getting What They Paid For?
The implication is that the LPD-4s should be expected to serve for 50 years. If the Navy expects its aircraft carriers to last a half century, why shouldn't it expect the same of all of its ships?15 If ships cannot last that long, then we have either bought inferior products or been delinquent in our stewardship of those ships over the years. Either way, we have failed the taxpayers.
Critics would argue that the LPD-4 class is outdated and not as technologically capable as the LPD-17 class. That is partly true. We want our replacement ships to be more technologically advanced.16 The key question is: What level of technology is required in today's environment? To purchase more technology than is necessary wastes taxpayers' money and exacerbates the budget crunch our Navy will encounter when the Cost of War money is reduced as a result of the Iraq drawdown. Reductions in Navy budgets for the foreseeable future, which most experts believe will happen under the new administration, would lead to fewer and fewer ship purchases, especially if the cost per ship is too high. The resultant shrinking of the U.S. Navy could ultimately lead to our early demise as the undisputed master of the seas. The current Navy recapitalization strategy is eerily reminiscent of what happened to the Soviet Navy during the Reagan administration. Essentially, we outspent the Soviets (the 600-ship Navy strategy) to the point that they could not maintain their fleet.17 We are doing this to ourselves with the current early recapitalization policy and it is a strategy from which China could obtain a significant competitive advantage if we are not careful.
Another viewpoint with respect to technology is the all-the-eggs-in-one-basket theory. Do we want all of our ships to be cutting-edge technology when not all our missions require that level of sophistication? Vice Admiral Blackham, citing his theory of force planning, said the answer should be an emphatic "no." "This strategically illiterate opinion ignores the obvious fact that one ship, however capable, can only be in one place at one time; and the rising importance of presence missions demands many, many more hulls."18 Because war invokes principles of time (persistence/dwell), space (maneuver), and mass (massing fires), the side that has more assets-albeit comprised of a high-low technological mix-will most always, with all else being equal, defeat the side that has only a few highly technological ships.
High-Low Revisited
CNO Admiral Gary Roughead believes that the new Littoral Combat Ship is critical to the Navy's future.19 The unstated reason is that the Navy knows it needs numbers but cannot afford all high-end ships; thus, it is embarking on another era of a high-low Fleet mix much like it did when it bought the Oliver Hazard Perry-class frigates. Another way to achieve a high-low mix is to not recapitalize too early; therefore, as new high-technology class ships come on line, they do not immediately replace the low-technology class ships. In this manner the Fleet is re-balanced toward a better high-low ratio and the number of ships in the Fleet is increased for a very affordable cost.
General Conway acknowledged the position we find ourselves today when he testified "fiscal constraints have limited our assault lift capacity to less than the established 2.5 MEB goal."20 Those constraints are directly related to our drive to recapitalize our naval forces too early.
Decision makers must learn to ride in a worn out Ford Taurus station wagon for a little while longer instead of being the first in the neighborhood to buy the entire family new BMW X5 SUVs. The old station wagon still gets you from point A to B just like the new SUV. And that, my friends, is the enduring mission of amphibious shipping in a nutshell.
1. Recapitalization policy is just one segment of the overarching naval strategy that matches ends and means.
2. For a good discussion of the current British dilemma see "Storm Warning for the Royal Navy" by Vice Admiral Sir Jeremy Blackham, Royal Navy (Retired), and Gwyn Prins in U.S. Naval Institute Proceedings, October 2007, pp. 21-25.
3. Statement of Admiral Vern Clark, U.S. Navy, Chief of Naval Operations before the Senate Armed Services Committee on the Status of the Navy, 27 September 2000.
4. For example, an S-3B aircraft that completed three sorties without completely shutting down its avionics and engines during Operation Enduring Freedom had a lower MTBF rate than an S-3B that completely shut down between each of its three flights. That is how VS-29 flew on average 22 sorties a day with 8 aircraft for the first 71 days of the operation-the highest utilization rate ever achieved by the S-3 platform and one that was more than twice that of any other aircraft used by the Navy during the conflict. It did this with the second least expensive maintenance costs of any aircraft in the air wing.
5. Admiral Clark, in the same testimony, acknowledged, "our cost models do not accurately predict the true cost of operating our aviation assets." Thus, his conclusions that increased wear and tear "causes" higher operating costs cannot be supported and it was this unsupported argument that led to the decision to retire the S-3B 15 years prior to its useful end of life. In fact, at the time (the decision to begin retiring the S-3B) it was the second least expensive carrier aircraft to maintain.
6. Statement of Admiral Vern Clark, U.S. Navy, Chief of Naval Operations, before the Senate Armed Services Committee on the Status of the Navy, 27 September 2000.
7. Ibid.
8. Blackham and Prins, "Storm Warning," p. 24.
9. VISION-PRESENCE-POWER: A Program Guide to the U.S. Navy-2002 Edition. Chapter Two.
10. Ibid.
11. Statement of General James T. Conway, Commandant of the Marine Corps, before The House Armed Services Committee on A Cooperative Strategy for 21st Century Seapower, 13 December 2007.
12. "Navy Drafting Naval Operating Concept", Navy Times, 23 October 2008.
13. LPD-8 also skipped its 2003 PMA because of Operation Iraqi Freedom and despite missing out on $10 million in maintenance, there were no downstream cost increases. In fact, according to the ship's port engineer, the maintenance costs of LPD-8 over the last 5 years have been very consistent with $12 million per 18-month cycle (6-month deployment and 12-month turn-around in homeport). LPD costs outside of CNO availabilities average $3 million per year compared with $2 million per year for LSDs half their age.
14. This assumes equal manning costs, which are both realistic and achievable.
15. The oldest LPD-4, LPD-7, was commissioned in 1967 and the oldest nuclear carrier, CVN-65 was commissioned in 1960, suggesting that LPD-7 should last at least 7 years past the decommissioning date of the carrier, which is currently scheduled for 2013.
16. If acquisition programs are successful, technology improvements between classes of ships should follow a series of interlocking Gompertz curves (known as S-curves) with each curve representing a generational improvement.
17. Norman Friedman, "The Navy, The Cold War-And Now", U.S. Naval Institute Proceedings, October 2007, p. 62.
18. Blackham and Prins, "Storm Warning," p. 24.
19. U.S. Department of Defense News release found at http://www.defenselink.mil/releases/release.aspx?releaseid=11449
20. Statement of General James T. Conway, 13 December 2007.Captain Lindsey, a 1982 graduate of the U.S. Naval Academy, is the Prospective Commanding Officer of the USS Carl Vinson (CVN-70). A nuclear-trained aviator, he earned a Ph.D. in public policy from George Mason University, and is the recipient of the 2007 Admiral J. M. Boorda Award for Outstanding Integration of Analysis and Policy.