Proceedings : What concerns you the most in the short term about the shipbuilding budget?
Stackley : Clearly in shipbuilding, more so than in other areas of defense procurement, we really have to take a long view. We strive to maintain consistency with the 30-year shipbuilding plan that we submit each year with the budget. In 2013 the plan laid out our force construct in terms of what we need not just to build, but the Fleet we need to support for the near-term, mid-term, and long-term requirements. It’s really stability in the total program that’s equally critical to ensure support for the right force structure and the right balance of forces to meet the Navy’s missions.
Proceedings : What are some particular areas of concern that you can be a little more specific about?
Stackley : Let me start with balanced force. The Navy’s force structure calls for a balance of carriers, surface combatants and amphibious ships, submarines, and auxiliaries. The build rate that we lay out first in the 30-year plan, then inside the Future Years Defense Plan, and then in the annual budget is all-critical to support the balanced force. We have to balance the force requirements with the budget. And we have to consider the industrial base in the shipbuilding plan.
We didn’t simply ask for two DDG-51s [ Arleigh Burke –class guided-missile destroyers] in 2013; we asked for the authority for a multi-year deal. One of the challenges was that, while we would like to sustain a build rate of two destroyers per year, balancing that program requirement with the budget resulted in a nine-ship request over a five-year period. Therefore, we’ve been working with Congress to leverage the program’s savings and stability to meet the ten-ship requirement.
In submarines, we have a similar scenario where our requirements would drive us to a two-submarine-per-year rate, but budget constraints in 2014 limit us to one submarine in that year but inside the construct of a multiyear. Once again, while our request was for a nine-boat multiyear, we have been working closely with Congress and have support from all four Defense committees to procure a ten-boat multiyear. These two programs, alongside the Littoral Combat Ship program, are good examples of leveraging stability to achieve affordability and best meet our requirements while sustaining our industrial base in a tough budget environment. We are more challenged, however, in our amphibious and auxiliary-ship programs due to low rates of production and associated impacts to the industrial base.
Proceedings : You’ve said in the past the Navy needs to seek “80 percent solutions,” for programs moving forward to cope with fiscal realities. Is that still the case?
Stackley : I would describe it as the standard way of doing business today.
You’re trying to manage a very complex matter between what was the original requirement and ultimately what you’re dealing with regarding cost and execution on the shipbuilding side.
Today we’ve moved to a process where affordability has been brought to the table as a requirement on the front end. We’re effectively, in the requirements-definition process, making the trades up front to ensure the program that follows is affordable and executable. Program by program we’re being very careful to bring the best information we have in terms in of cost vs. capability to the front end of the process to ensure affordability of the end item we’re procuring.
Proceedings : Can you define some examples of that thinking?
Stackley : The Mobile Landing Platform [MLP], which is being followed on with the Afloat Forward Staging Base [AFSB], is a great example. But other major shipbuilding programs are following suit. The Ohio Replacement Program [OR] is one that is of great interest. We spent a lot of time in drafting a capabilities document, understanding what the costs of the respective capabilities of that boat would be and making trades to ensure the affordability of the boat was within our reach.
The OR Analysis of Alternatives [AOA] looked at a number of variants to support the mission and priced those out. The results of the AOA were used in making initial requirements decisions. But subsequent trades in capabilities and requirements were necessary to bring the estimates for procurement of the OR within what we consider to be affordable.
Proceedings : How does affordability factor into the design of the OR?
Stackley : Let’s start by defining requirements for a strategic deterrent that will be in the Fleet potentially to a 2080 time frame. That right there is a challenge. You have to project what the threat will be and what the technology in the near- to mid-term will support to ensure the submarines built in the 2020s to the 2030s will remain effective until 2080. Concerns have been raised that the pursuit of affordability on OR comes at the expense of needed capability. To be clear, the capability of the OR will be far superior to the capability of the Ohio . That should never be misunderstood. We are reducing the number of missile tubes. That reduction was determined after significant analysis across Strategic Command, the Department of the Navy, and the DOD to determine what capacity that leg of the triad needs to deliver to meet the strategic requirement. Using the existing Trident D5, the number of missile tubes can be reduced. Consideration for increasing the size of the missile tubes for some potential future ballistic missile brought cost into the discussion. It was determined that it’s not necessary to increase the size of the missile tube to remain effective as a strategic-deterrent platform. Similarly, each characteristic of this major program has been scrutinized to ensure this critical asset is capable of its mission at the most affordable price.
Proceedings : Another important program is the DDG-51 Flight III. How is the design proceeding?
Stackley : Let me start with radar. We’re in a competitive down-select for the radar. One thing we have learned in the decision to go toward Air and Missile Defense Radar [AMDR] was that it is the exact right decision with regard to capability and the maturity of the technology. We have extremely high confidence regarding the performance of the radar and the schedule that it’s on to support Flight III introduction with the 2016 ships. The risk associated with that integration is limited to the AMDR aspects of the ship’s design and we have over the past several years been looking at different approaches in supporting the AMDR on the Flight III. We have arrived at what I believe to be the right balanced design to address the space, weight, and cooling requirements of the AMDR while delivering the significant capability that radar promises and doing this at a level of risk and cost that fits our means.
An upgrade to the power-distribution system will be needed to support the AMDR, but that fits within the footprint of the current system of the DDG-51 Flight IIA. A weight penalty comes with that much added radar topside. It’s offset some by the nature of the radar’s design, but that becomes a limiting a factor in how much radar we can add to the Flight III ship. So when we look at the capability we can deliver in Flight III, it will meet the established requirements. We are effectively going to be top-end, limited in terms of future growth to the radar.
When you look at the long-range shipbuilding plan, you start to see reference to a Flight IV destroyer out in the 2020s. While AMDR will be critical to meeting the near- to mid-term requirements, we look forward in the longer term to a Flight IV destroyer to pace the threat.
Proceedings : The shipbuilding industry struggled through the 1990s and the early part of the 2000s. Now four years after you’ve taken over your role as the assistant secretary for RDA, how to you perceive the health of industry?
Stackley : We have to be careful that we don’t break or harm the industrial base that we rely on for the long term. In our shipbuilding plan, the Navy has made a very concerted effort to stabilize requirements, drive affordability, and also balance consideration of our industrial base.Whether you’re looking at the 30-year plan or the FYDP, a couple of things become clear.
The nation has one shipbuilder for aircraft carriers, Newport News Shipbuilding. Our plan is to build carriers at a five-year center. In terms of Newport News and carrier construction, today the CVN-78 dominates production at that shipyard. That’s the first of the Gerald R. Ford class and it brings with it all the challenges associated with a first-in-class ship. While we complete that lead ship and basically march it toward its delivery to replace the Enterprise , which we recently decommissioned, we are also building the construction plan for CVN-79, and a focus of that plan is on affordability. It’s capturing the lessons learned not only from the first in class but also from the best practices in shipbuilding to drive the cost of the follow-on ships down to a more affordable level. That means commitment by the shipbuilder toward every step of the process. Planning, design, material procurement: We’ve been working very collaboratively with what forms a major piece of the Newport News business base for the immediate future.
Between Newport News and Electric Boat, our submarine program has effectively ramped up to two boats per year. Both of those builders are at an efficient production level for submarine construction. In the long-term plan there are a couple of years where we drop down to one boat a year and we have a period of one boat per year in the mid-term when the OR is being built. In total, submarine construction is at a very healthy level for the near and long term.
When you shift to surface combatants, we have two builders, Bath Iron Works and Ingalls Shipbuilding. Our challenge is to sustain a minimum of a two-destroyer-per-year build rate to ensure efficient production levels out of our surface-combatant builders.
Amphibious and auxiliary construction is probably our greatest challenge in terms of industrial base. Today, in terms of amphibs, we have 30 across the big decks, LSDs and LPDs currently in the Fleet. Amphibious-ship construction is at a low level, and that’s a fairly critical concern for Ingalls shipbuilding. NASSCO [National Steel and Shipbuilding Company] is our lone shipbuilder of auxiliary ships and is building the MLP and the AFSB. The next auxiliary shipbuilding program, the T-AO(X) [next-generation oiler] is in the 2016 timeframe. We’re working closely with Congress to get the AFSB authorized and appropriated, which will provide stability for NASSCO until competition for the T-AO(X) opens. NASSCO is also a shipbuilder competitive in the commercial shipbuilding environment and has recently secured commercial shipbuilding construction that intermixes with its naval shipbuilding, helping the company shore up its business base.
Proceedings : How is shipbuilding quality in your view?
Stackley : In certain shipbuilding programs, quality has not been a problem whatsoever. I would tell you across the board the shipbuilders are meeting the requirements as they relate to quality. Yes, there were challenges in the recent past, but the measures that have been taken by the shipbuilding industry have raised the bar in terms of quality and completion of the delivered ships. We’re satisfied in that regard. In certain shipbuilding programs quality has not been a problem whatsoever. When we saw lapses in quality, the shipbuilders have addressed issues, and now the focus is on driving down the cost of delivering that quality. Across the board in shipbuilding, our priority is the affordable solution, and the key to affordability is stability—in requirements, build rates, quality, and wholeness for our Fleet at sea through modernization and maintenance.