This html article is produced from an uncorrected text file through optical character recognition. Prior to 1940 articles all text has been corrected, but from 1940 to the present most still remain uncorrected. Artifacts of the scans are misspellings, out-of-context footnotes and sidebars, and other inconsistencies. Adjacent to each text file is a PDF of the article, which accurately and fully conveys the content as it appeared in the issue. The uncorrected text files have been included to enhance the searchability of our content, on our site and in search engines, for our membership, the research community and media organizations. We are working now to provide clean text files for the entire collection.
The U. S. Navy is in the midst of the long- anticipated epoch when many of our 20- to 30-year-old, World War II constructed ships are being decommissioned. Since the present-day process of ship acquisition takes approximately five years and the funding of shipbuilding hit a low point (approximately one billion dollars each year) in both 1968 and 1969 after a decade of very little new construction, the loss of these old ships will be history before increased ship acquisition can offset the sharp drop in force levels and sea control effectiveness.
Rebuilding the reduced Fleet in numbers will not be an easy task for the foreseeable future. In an atmosphere of anti-military feeling, typical after a long war, along with the traditional American feeling of "antibigness,” the large portion of the nation’s budget allocated to Department of Defense (DoD) will be subjected to ever closer scrutiny by Congress. A large monetary request for a package of 30 destroyers or the recently-approved request for a fourth nuclear carrier, will become more and more subjected to close examination. This attitude, coupled with very damaging publicity from cost overruns on some DoD contracts, makes prospects for future ship acquisition rather discouraging.
Soon after assuming office, Navy Secretary John H. Chafee made the need for increased ship acquisition very clear:
"I am convinced that the continued effectiveness of our Navy will require in the future annual amounts of 3.5 billion dollars or more for ship construction and conversion over the period of the next decade.”
Admiral Elmo R. Zumwalt, Jr., recently stated:
"If you look at the years 1962 through 1972, in its shipbuilding appropriations the Navy was down to less than a billion dollars per year at a time we should have been spending 3 billion dollars a year on new ships. . . . And, although there have been qualitative improvements as new ships have been built, the improved quality has not been adequate to make up for the reduction in numbers that we’ve lost.”
Probably the major reason for the decline in new ship acquisition by the Navy in the 1960s was the Vietnam war. Much of the money allocated for expenditure on equipment, ammunition, and other supplies, and personnel involved in the Vietnam war build-up and continuation would probably have gone to new Navy ship construction. As Admiral Zumwalt recently said, "The effect of the Vietnam war has been, in essence, to cost us the equivalent of about a generation of shipbuilding.”
However, there are many other reasons for the decline in Navy ship acquisition over the past decade, some of which had their effect long before the Navy’s involvement in the Vietnam war. During the early 1960s, when the pace of ship acquisition steadily decreased, the office of the Secretary of Defense (OSD) applied its new management concepts to the area of weapon system procurement. DoD directive 3200.9 contained these policies and procedures. Its application to ship systems procurement began in the 1960s, with the proviso by Secretary of Defense that the directive was to be applied "in substance” to shipbuilding. This qualification verified the fact that still remaining unresolved was the following issue between the Navy and OSD: Ship acquisition is a construction consideration and not a research and development procedure. One does not build a prototype ship, test and evaluate it, and then make the decision of further procurement. Thus, besides the expenditure of much of the Navy’s budget on the Vietnam War in the 1960s, the Navy’s
28 U. S. Naval Institute Proceeding*, November 1972
shipbuilding was also victim of the application of a management tool which applied to procurement of weapon systems (such as aircraft and missiles) and not to the construction of ships.
The influence of the systems analyst on weapon procurement reached its highest level in the 3200.9 directive. DoD applied its cost-effective tools to aid decision-making in selecting weapons systems for procurement. Indeed, many of these tools and policies persist today, and for the same reasons:
► The tremendous technical complexity of today’s weapons systems, their time-consuming development, and their great cost have placed new and unique premiums on the correct choices of weapon systems. Our country can no longer afford to produce weapon systems that fail to meet up to expectations or that cost excessive amounts beyond that anticipated.
► Many of our major military missions are jointly performed by two or more of the military services. The decision to procure a weapon system must reflect that which is required by the Defense Department as a whole. Weapon procurement decisions should not be based solely on what is required by an individual service to perform its portion of a particular military mission.
► In some cases, one weapon system may satisfy the needs of several of the services (the Phantom fighter). Or a weapon system may allow a particular service to perform its portion of the military mission, as well as some of the mission traditionally assigned to another service. (Polaris vis-^-vis the Minuteman and manned bomber.)
Application of the 3200.9 directive to ship procurement just is not feasible, however. When the Navy seeks ratification by OSD of the "conditional approval” of a ship system, it is actually seeking a release-to- produce decision. For weapon systems, the decision to produce follows engineering development, which in turn is after "conditional approval.” In other words, not only does part of the intent of the directive not apply to ship acquisition (development and evaluation), but also the circumstance of ship acquisition is not covered in the directive. The misapplication of this research and development decision-making methodology led to delays in new ship acquisition as OSD and the Navy debated its applicability.
A second reason why ship procurement has suffered over the past decade has been the "predilection against” procurement by OSD, and the Navy’s failure to anticipate and prepare for such attitudes. Assumed, in the application of OSD’s decision-making machinery under 3200.9, was the concept that its people were not biased, but were completely objective and immune to their past experiences and present pressures. This was far
from accurate. An important criterion for a system’s approval was the degree of predilection that existed for or against the acquisition at OSD. Two famous anti excellent examples of this "predilection against” factor are the TFX Fighter (F-111) and the USS John F. Kenned) (CVA-67). These examples are cited only to demonstrate what OSD can do when it has previously made up its mind about a weapon system.
In the case of TFX, the Secretary of Defense insisted on an unprecedented four rounds of design competition, between the Boeing Company and General Dynamics Corporation for the fighter-bomber which was to be used by both the Navy and the Air Force. After each round, the military source selection board recommended that the contract be given to Boeing; the Secretary of Defense overruled the board after the fourth study and assigned the contract to General Dynamics. Subsequently, even after years of Congressional investigations, he never could satisfactorily explain the basis for his "predilection against” Boeing.
In the case of the CVA-67, the Secretary of Defense refused to approve its construction as a nuclear aircraft carrier, even though the USS Enterjnise (CVAN-65) had proven the tremendous effectiveness of a nuclear-powered ship. As revealed in testimony by Vice Admiral Hyman Rickover before the Congressional hearings on the matter, OSD sent the Navy on a never-ending study of various topics and challenging questions while delaying its decision on whether the 'J.F.K.” should be nuclear or conventionally powered. Questions were asked such as: What is the carrier striking force of the future? How many escort vessels of what type should be included? How is the replenishment of aviation fuel and ordnance to be accomplished? How should the Navy be deployed around the world? Each time a question was answered, another would be asked, finally, the Navy accepted the decision to make this ship conventionally powered to avoid further delay in her construction.
Turning to another reason for the decline in Navy ship acquisition, Navy personnel historically have viewed "the ship” as an aggregate of subsystems, each of which was to satisfy a mission requirement. The ship’s mission capabilities were implied by the sum of the individual capabilities of the systems contained within a ship. Furthermore, although a new ship represented the technology or "state of the art” at the instant of construction, that was only the initial version of mission capabilities; each ship was to be in continuous evolution as technology provided new "weapon systems,” which were to be introduced to the ship through modifications. Take, for example, the DD-963 class: she will have capped electrical and other conduits so that future modernization will be simplified; she will
(o<
C(0<
¥e , itS
,£<‘' p r
ftef
tl)e
tlif
be especially designed for future modernization and conversion to a missile ship, if needed. Specifically, the Navy concentrates its research and development at the functional systems level, instead of at the ship-system level, for lifetime ship-system improvement in effectiveness.
In the 1960s, when deciding on a ship’s acceptance, based on her ability to perform adequately mission requirements, OSD evaluated the ship’s capability in her instant, initial status; OSD did not evaluate the ship as a platform upon which mission capability could change in the future as needs required.
IP"
tbc
n*
I*"
.d>'
de
bt1
eff
¥
3d
:be
3
¥
.ip
¥
v)’
ve
cb
¥
<¥
¥
:C'
¥
</
u5
iP
¥
it-'
ill
Furthermore, OSD did not view each type ship’s mission capability as the sum of each "system” aboard; OSD felt that these missions were interrelated and that some missions are degraded by the presence of other "systems” to allow performance of other missions. OSD acquisition management felt that a ship full of complex weapon systems, many of which aspire to satisfy different missions, decreases the ship’s total effectiveness owing to incompatible system component interactions.
Ship Acquisition: The Lost Generation 29
Given this consideration, there was a conflict between this approach toward consideration of ship systems and the desire of OSD to combine various related ship types (thus missions) into one all-inclusive ship
type. The reason for this was, and still is, to reduce ship types in order to increase the size of ship orders and to employ multiyear contracts. For example, the amphibious assault ship (I.HA) will incorporate the capability and missions of four previous classes of ships: rhe attack cargo ship (AKA), the helicopter assault ship (LPH), and the two basic personnel amphibious assault ships (LPD and LSD). The multimission approach to DoD acquisition of weapon systems resulted in the F-lli, an aircraft that was approved on the basis that it would be used by both the Navy and the Air
Force. The controversy created many years ago by that decision still continues.
In short, there appears to be a trend at OSD to approve fewer classes of ships, each with a greater number of missions, but with a subsequent limitation to perform adequately each mission owing to interferences and incompatibilities between weapon systems on board the ship. Subsequently, our recent classes of ships have assumed more missions, thus have become more complex, more expensive, and fewer in number. (Aware of this trend toward complex, expensive ships, the CNO has recently emphasized the need for a less capable, less expensive sea control aircraft carrier and patrol frigate.)
Acquisition of multimission ships was also delayed in the 1960s due to OSD’s struggle to develop a method to measure the cost effectiveness of this type ship. In 1969, the Assistant Secretary of the Navy for Research and Development stated the problem this way:
"A tremendous difficulty is generated by the fact that the costs and characteristics must be allocated to the appearance of the system in several different scenarios. . . . Solving it requires solving the systems problem for all the situations in which the multi
30 U.S. Naval Institute Proceedings, November 1972
purpose system appears, then doing all the (nonlinear) interaction cases. In addition, the cost allocation to the various uses must be attacked. There is simply no methodology available for really trying this and hence the problem is generally ignored.”
A final consideration in ship acquisition is economics. This area has contributed to the decline in the number of classes of ships over the past decade and is an important factor to consider in future proposals for ship construction.
In the past decade, six economic themes have become apparent in ship system acquisition:
► Series production (mass production method; modularization approach).
► Standardization to reduce both acquisition and operating costs.
► Design for minimum manning by automation.
► Production in modern shipyards.
► Design for cost breakthrough (i.c., allow builder to design by giving him general rather than detailed, specifications; and integrated design and production by contractor for cost minimization).
► Contractor responsibility by requiring guaranties and warranties of ultimate cost and performance.
The importance in the application of these points is obvious when one studies the three major ship system proposals in recent years: the fast deployment logistics ship (FDL), the amphibious-hclo assault ship (I.HA), and the general purpose destroyer (DD-963 class). Among the major considerations that influenced the approval of these three ship systems was the fact that they satisfied all of the above-listed economic factors. OSD approval of these ships may have been greatly biased toward approval because of emphasis on these economic objectives. In other words, these ship systems were "predilection for” cases that did not require the strategy for approval that a "predilection against” case would.
The above six economic factors arc certainly beneficial; there is no question of that. To appreciate them one needs only to look back over the period prior to their application and see that 13 different destroyer types were built in 12 separate contractor yards under 51 separate contracts. This "spread-the-wealth” practice was developed out of the desire to keep the private yards in business, under a national policy based on future defense needs in case of war, and on political considerations. Ultimately, over several decades, this approach assisted in the demise of U. S. shipbuilding efficiency and economies.
The importance of this new consideration toward ship acquisition was summed up by the CNO:
". . . By grouping our requirements into multiyear buys of the same ship types, rather than spreading individual ship buys over several years, economies of production will be possible . . . We give the shipbuilders necessary stability, which in turn gives them the confidence to build and modernize their physical plants. As more money is plowed back into these plants, they become more efficient. We benefit in the economies from that efficiency.”
OSD expects cost savings by emphasizing these sis economic points. Hopefully, many other beneficial aspects will appear as a consequence—advances in ship design, performance and cost effectiveness arising from industries’ new participation (by forcing them to form project management teams and augment them with consultants to provide expertise in operational analysis, systems analysis, design, ship management, production, weaponry, etc.); accelerated modernization and automation of civilian shipyards resulting from the magnitude of the contracts; economies in life-cycle ship costs accruing from systems’ investigations, mass production runs, and standardization attempts; and greater research and development in the technologically lagging shipbuilding industry.
In summary: the incorrect application of research and development decision-making methodology to ship construction led to delays in decisions concerning new ship acquisition; the Navy’s failure*to prepare for and anticipate a "predilection against” attitude by OSD on a ship acquisition resulted in disapproval of some Navy proposals; the delay in decision-making created because of attempts by OSD to measure the cost- effectiveness of the multimission ship system and related disagreements between Navy and OSD on multimission ships led to delays in ship acquisition; and finally the trend to fewer classes of more complex ships, in part to take advantage of the six economic themes, led to more expensive ships, and thus fewer ships were constructed. All of these factors combined in the decade of the 1960s with the Navy’s expenditure of effort and money in Southeast Asia to result in a very low amount of Navy ship construction. The Navy must develop policies and procedures to prevent recurrence of such minimal ship acquisition as experienced in the 1960s.
Ship Acquisition Strategy. The strategy for gaining approval of a ship acquisition involves satisfying the requirements of the following four objectives. These objectives assume a "predilection against” attitude by OSD or Congress, and they should be attained prior to completion of formulation and submission of the ship acquisition proposal to OSD.
(1) The ship to be proposed should be identified as to which one of the following categories she falls
Ship Acquisition: The Lost Generation 31
into: multimission warship, single mission warship, or auxiliary/support ship. The category will predetermine the technical, economic and mission criteria, and the tools and methods to be used in preparing the proposal.
The first of two challenges in the multimission warship category is the development and production of various mission hardware systems and getting these systems on board ship in timely fashion. The Navy has been a proponent of Government Furnished Equipment (GFE), while OSD favors Contractor Furnished Equipment (CFE). In utilizing GFE, the Navy has not done well, especially in overcoming the cost growth resultant from late or nondelivery of one of the many complex subsystems. The OSD approach strongly indicates a move to the CFE method of shipbuilding, with the contractor (shipyard) awarding various subsystems to subcontractors. In short, the Navy needs to continue its recent change to CFE contracting for the acquisition of multimission ships.
The other challenging problem to gaining approval for a multimission warship is measuring the total effectiveness of this type ship in all her mission areas. As previously pointed out, the multimission warship does not lend herself to a closed set of analytical solutions. Fortunately OSD now acknowledges this, and is, m fact, continuously working on improved analytical approaches to evaluating multimission ships. Ship acquisition recommendations in this category, however, must be subjected to a stringent attempt by the Navy to reduce mission-oriented performance, mission analysis, and costs to an analytical basis. From this effort OSD will, at least, be aware that the Navy is trying to develop a method to evaluate this category of ship.
The second category in ship acquisition is the single-purpose ship. In this situation, the Navy is not "selling” a ship to OSD and Congress, but instead a complete weapon system of which the ship happens to be a subsystem. An example is the Polaris program. The ship design is part of the development of the pay load. The point is: if the pay load is approved, the ship is approved along with it; as a result there is no ship system acquisition problem. It is feasible that some day floating ASW or A AW platforms will be categorized the same way.
The final category consists of support ships and auxiliaries. In this area there is need for a complete change in the Navy’s approach. These ships must be supported in mission-oriented performance terms, and the Navy must get out of the design and detailed specifications business. The Navy does not really need to specify in detail how these ships are to support. It is necessary that the interface be compatible with operating forces and that the ships are efficient and economic. The most effective argument for an auxil-
iary/supply category type ship acquisition ever presented to OSD by the Navy was the primary "spec” for the FDL:
speed X payload life cycle cost
In other words, the Navy requested a ship in ton- miles/dollars rather than in length, width, draft, number of shafts, etc. Now the Navy has a textbook case to use for submission of future requests for acquisitions of ships in this category.
(2) The second objective in our ship acquisition strategy concerns the credibility of the Navy’s study and decision-making before submitting a ship proposal. This credibility will become increasingly dependent on how thoroughly the Navy develops each case in terms of explicit missions, cost, and effectiveness. The credibility will depend on evidence that each type of ship is subject to detailed mission analysis and mission- oriented performance measures. The more thorough and effective the Navy becomes at this, the greater its success will be in achieving OSD approval. It is important to remember, however, that the key to approval is whether the ship system is the most cost-effective solution to mission requirements; it should not be an exercise in academics of analysis which will elicit "fool-proof” proof only on paper.
(3) What is known about OSD’s and Congress predilection concerning the acquisition? The Navy should ascertain this during the stages of proposal formulation and then, like a good diplomat, affect liaison to achieve a workable solution. In other words, the Navy must find a way to work out disagreements before public commitments are made and stands are taken.
The key to this frequently may be a determination of whether parties involved can emerge with their images intact without having lost vital interests; in other words, the Navy must avoid a "showdown” between military judgment and civilian authority. The negotiations to resolve "predilection against” cases must be completed prior to the final stages of proposal formulation, because at this time OSD makes public its stand on the issue; after that it is too late to do any "negotiating.”
The most preferred method of preventing the "predilection against” situation, but a method that requires a great deal of time, is to prepare the American people, the Congress, and OSD as to the need of a particular ship. An excellent example of this is the recent effort by Admiral Zumwalt to point out the need and advantages of the sea control ships—the patrol frigate and the sea control aircraft carrier.
(4) Finally, the Navy should begin a program on the economies of ship acquisition. This program should
32 U.S. Naval Institute Proceedings, November 1972
study possible cost reduction of developing and acquiring a ship, as well as study means to reduce ship life-cycle costs. Of primary importance, studies need to be done in order to arrive at methods and systems for reducing manpower requirements on board our future ships.
A new and prevalent economic tool used by OSD is life-cycle costing. It requires assessment of various cost factors: manning and training, operations, total logistics (including shore support), maintenance, and overhaul over the lifetime of the system. Life-cycle costing reveals in every ship system case that the costs which are a function of the number of personnel aboard, dominate all other costs. The "handwriting is on the wall.” The Navy must take decisive action to decrease the number of shipboard personnel, either arbitrarily or through automation, if it expects to maintain any sizeable fleet.
In the late 1960s, the Assistant Secretary for Defense for Systems Analysis devoted much time to studying a new ship propulsion system which would decrease the number of engineering personnel on board ship. The result contributed in part to the approval of a modified aircraft jet engine for propulsion of the 963-class destroyer, which will substantially reduce on-board engineering personnel.
This program on the economies of ship acquisition will not only have the obvious benefit of savings, but it will also show OSD that the Navy is making a concerned effort to cut costs. A program such as this would make the Navy’s requests for ship acquisition more tractable at OSD. It would close the ship system’s cost reduction credibility gap, such as it is, between the Navy and OSD.
For Fiscal Year 1972, and it would appear for Fiscal Year 1973, the Navy’s ship acquisition has increased dramatically to the three-billion-dollar level. This has been due, in part, from attention to these four objectives. However, approval of the Navy’s recent ship acquisition proposals have benefitted primarily from three external factors:
► The growth of the Soviet Navy and the active publicity given this fact (as well as the age of our Fleet)
by Navy, government, and congressional leaders.
► The development of sea-based mobility to support the Nixon Doctrine, a doctrine that reflects the disaffection with things military on the part of the American population accompanied by a shift of some emphasis away from the world beyond our shores and increased concentration on problems closer to home.
► Emphasis on inter-continental ballistic missile-firing submarines, not only for their mobility advantage, but also because an effort by our enemies to reduce our strategic deterrence would require their destroying submarines at sea, and not firing at land-based missile silos, and consequently the American population.
Our ship acquisition is presently on the upswing and Navy leaders must not lose sight of the fact that it is these external factors from which we now benefit In time the importance of these external factors will lose their impact. Navy leaders must be aware of this, and continue to place emphasis on achieving the four strategy objectives discussed. Their impact on ship acquisition decision-making will always be present, and their importance will change in relation to external factors.
In conclusion, ship acquisition is part of the proper allocation of resources available to the national defense. The four strategy objectives are not recommended as all inclusive goals that Navy leaders must reach. Rather they are intended to indicate a direction needed in the Navy’s management philosophy of ship acquisition if the Navy is to continue to rebuild Fleet numbers and sea control effectiveness in the decades to come, and avoid the loss of a generation of ships such as occurred in the 1960s.
A graduate of the University of California in 1962, Lieutenant Con[1][2] mandcr Johnson is presently the public affairs and information officer fa Commander Cruiser-Destroyer Force, U.S. Atlantic Fleet. His Fleet assignments have included the USS Frank H. Evans (DD-754), USS Enhann (MSO-437), and USS Brumby (DE-1044). He is a graduate of the Naval Destroyer School, and recently received a master of science degree in ftfl** agement from the Naval Postgraduate School at Monterey. Lieutenant Commander Johnson is responsible for the production of Cruise Dtstroyerman, the magazine that won the Thomas Jefferson Award as the best military magazine produced by all of the military services for 19?1
His and Hers
Several years ago when the "in” thing for teenage girls was to wear CPO shirts, I thought
[2] would buy my boss one for a Christmas gift. 1 mentioned this at the dinner table one evening, and got the following scornful remark from my 14-ycar-old daughter:
"Dad, what would a man want with a CPO shirt?”
—Contributed by Commander C. M. Quinn, SC, U. S. Navy (Ret.) (The U. S. Naval Institute will pay $10.00 for each anecdote published in the Proceedings.)