Planning for the Navy of the 1980s

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The new ships being built for the Navy, such as the guided missile frigate Flatley (FFG-21), are more capable than their predecessors. The problem is that there aren’t enough of them. There aren’t enough aircraft either. The result will be a steadily shrinking fleet unless the Navy receives substantially larger appropriations from Congress.

After 35 years of undisputed naval superiority, the United States faces a global naval challenge—and that says a great deal about the size and type of Navy we must have. Since World War II—the last time we fought (and won) a war at sea—the size of the fleet has declined from 5,718 active ships to 540. (See Figure 1.) In the meantime, the Soviet Union has built a fleet of 1,769 ships, at least 884 of which are comparable to those in our fleet; the remainder are more oriented to coastal defense operations in narrow seas. Our 540 ships include 462 in the active fleet, 53 in the Naval Reserve Force, and 25 in the civilian-manned Naval Fleet Auxiliary Force. There are nearly 5,400 active Navy aircraft.

As our fleet has shrunk over the past 15 years, the principal changes in its composition have been the following: a halving of the number of aircraft carriers and battle group-capable surface combatants; a halv­ing of the amphibious lift capability; and a dis­proportionate reduction in the numbers of auxiliary and support ships. Aircraft numbers and the compo­sition of the aviation force structure reductions have paralleled those of our ships. These reductions may mask unmistakable qualitative improvements in our capabilities, but they do drive home how thinly the U. S. fleet must be spread to carry out commitments which have changed very little during the same period.

The composition of the U. S. fleet isn’t going to change much over the next decade, or by the year 2000, for that matter. Consider Table 1, the list of ships authorized and appropriated for, but not yet delivered, which should enter and modernize the fleet during the next nine years. At least half of the U. S. naval force structure of the year 2000 is either on this list or in commission today.

If our objective were solely to maintain a fleet of 540 ships like the one we have today—replacing a destroyer with a destroyer and a submarine with a submarine, etc.—with nominal assumptions as to expected service life, we would have to build 17-18 new ships each year and procure some 330 aircraft. The aircraft problem is made more complex by the fact that upward of 100 aircraft are lost each year in peacetime operational accidents. We should be spending about $8 billion a year on shipbuilding and $5 billion for aircraft procurement on a steady-state basis. But we haven’t been doing nearly that well. In fact, over the past ten years, we’ve acquired only 15 ships a year (at an average annual investment of $5.8 billion) and only 247 aircraft a year (an investment of $2.6 billion annually). In both cases, the trends have been well below average for the past three or four years. We simply haven’t been buying enough ships and aircraft to maintain our present force structure into the future. That is the second fact of major sig­nificance which one must bear in mind regarding the Navy of the 1980s: our investment has been insuffi­cient to hold onto the force structure we have today.

BATH IRON WORKS

tained in budgeting, increasing costs of facilities, ^sll'ps, aircraft, and weapons in real terms, and the growing costs of ownership—these have been the factors affecting the resources available to the Navy.

In terms of funding levels with the effects of infla- ^tlon removed—what are referred to as “constant dollars”—the Department of the Navy has received ^essentially level funding during the past ten years or ^s° (see Figure 2). But serious deficiencies are masked

Whatever may be decided for the future, it is ^bundantly clear that recent building programs have ^eer> inadequate to maintain today’s force levels. One ^Can also see a clear shift from a cruiser and destroyer ^Surface combatant force to one oriented more around Agates. In large part, the reason we have empha- ^Sl2ed less capable and less costly ships and aircraft in ^recent years is affordability. As in many business op­^erations, the Navy has to live within the bounds of i'rnited resources and increasing demands on those ^sources. Fiscal constraints assigned by the office of Secretary of Defense, budget actions by the Con­fess, inflation which has been artificially con­

Table 1 Ships Under Construction or Authorized (As of January 1980)

in that simple line representing total obligational authority—a budget term—and these deserve to be explored. First, the fiscal year 1981 budget repre­sents only 1.3% real program growth for the Navy, relative to the fiscal year 1980 appropriations enacted by the Congress. But the current rate of inflation is significantly higher than the Department of Defense has been allowed to budget, which dictates caution in expecting even 1.3% real program growth.

Secondly, over the full five years of the current plan the Navy is expected to realize about 4% aver­age real program growth, essentially equal to that of the Department of Defense as a whole. On the sur­face of it, that is an improvement over the situation in which the Navy found itself last year and the year before. But even 4% is no “magic number,” guaran­teeing a healthy, adequate Navy. Nor can we take great comfort in growth promised a year or two or three beyond the budget year, unless commitment to the plan is certain. Talking with confidence of “real growth” at a time of rampant inflation is, in short, highly optimistic. The 4% we’ve been discussing will melt away under inflationary pressures, in all likelihood. If real growth actually comes about, there may be an opportunity to rectify some, but certainly not all, of the problems and deficiencies in the Navy’s posture. I refer to the need to improve mili­tary pay, ship and aircraft procurement rates, filling ordnance inventory objectives, for example.

The problem of inflation is even worse than it ap­pears at first glance. Whereas the wholesale price in­dex, a general indicator of inflation, has doubled in the past ten years, the indices for shipbuilding and aircraft manufacturing industries have more than doubled.

A third factor of affordability results from the need for product improvement. Such improvement results in cost increases in real terms. Consider the Forrest Sherman (DD-93l)-class destroyers, built in the 1950s, as an example of an “original type” and the Spruance (DD-963) class, built in the 1970s, as a “replacement type.” It has been estimated that modernization of an original type at intervals throughout its useful life has run about 3% per year. For a ship, such im­provement is accomplished normally during regular overhauls and involves subsystem replacement and modernization to keep her more or less abreast of the threat. Aircraft and weapons, likewise, undergo product improvement during their service lives. At the point when an original system is replaced by an entirely new system, research and development costs, as well as a host of other costs, have caused a real cost growth in the replacement type which averages 6% per year. We couldn’t get by with a new ship that is a carbon copy of the Forrest Sherman. We must have one that is substantially better in order to deal with tomorrow’s threat.

The fourth factor affecting affordability is what the Navy calls “ownership costs.” Any automobile owner can appreciate the fact that it costs more than ever to own a car today . . . gas, repairs, insurance, park­ing, and so forth. In the same sense, military and civilian personnel costs, operating and support costs

°f ships and aircraft, real property maintenance costs, ^etc;> aggregate to what it costs the Navy to “own” ^maJor investment items such as ships, aircraft, and ^weapon systems. Despite declining force levels, costs ownership have continued to absorb an increasing Proportion of Navy budgets. The explanation lies partly in the fact that we expect our systems to do naore from year to year. (That is also what causes the /o ar»nual investment cost growth discussed earlier.) owever, certain aspects of ownership are controlla- ^e (that is, funding responsibilities not mandated by Congress or other external agencies as is Workmen’s Compensation, social security taxes, etc.) and the Navy i_s scrutinizing these ownership costs closely to ^eterrnine where it is possible to reduce them. Nevertheless, ownership will continue to pose affor­dability problems.

Now, let us turn to a closer examination of how n^ajor investments have supported and will support • S. naval force structure.

A review of the actual number of aircraft procured *ⁿ the most recent ten budgets underscores the prob- ^ern the Navy has had maintaining necessary aircraft ^0rce levels. During the period 1961-1970 more than ⁷ >000 aircraft were procured, an average of about ⁷20 per year, to support 15 attack carrier air wings ^and 8 antisubmarine carrier air wings. We bought a of aircraft and we suffered significant wartime losses and attrition during that period. But for most of the past decade, we have had but 12 carrier air wings and only peacetime attrition to contend with. As earlier noted, on a steady basis we should be buy­ing about 330 aircraft per year to maintain the pres­ent force structure of 5,400 active aircraft. We have been falling far short of that number. The annual average during 1970-1980 was 233 aircraft, and the 1976-1980 annual average was 183 aircraft. The 1981 budget requests procurement of 104 aircraft, hardly enough to offset projected attrition. That situation has prevailed for the past two years.

Aircraft procurement over the next five years, re­flecting the long-range plan which accompanies the fiscal year 1981 budget, is expected to total 1,212 units. It is important to note that more than half of these acquisitions would occur in 1984-1985. The plan is dominated by 656 of the new F/A-18 Hornets. Other major aircraft procurements include 204 SH-60B LAMPS Mark III helicopters, 66 F-14A Tomcat fighters, 50-odd P-3C Orion antisubmarine aircraft, and a new tactical tanker.

Table 2 Shipbuilding Plan 1981-1985

FY80                                                                  Fiscal Years

By the end of the five-year period, if there is commitment to the plan, we should have achieved a force-sustaining procurement rate. In the meantime, we will have procured fewer aircraft than are required to modernize the force, offset attrition, and arrest aging of the inventory. This deficiency is clearly a $l-$2 billion per year problem.

$1-2 billion $1-2 billion $1-2 billion $ 1-2 billion

The five-year shipbuilding plan now before Con­gress contains a total of 97 ships, an average con­struction rate of 19 ships per year (See Table 2). This number is somewhat inflated by the inclusion of 14 maritime prepositioning ships (T-AKX). These ships involve a new capability which had not even entered into our calculations of requirements before last fall. Setting these T-AKXs aside, we would be only a ship or two short of the number described earlier as neces­sary to sustain a force level of 540 ships. Another $ l-$2 billion would be required each year to procure sufficient numbers of ships with the requisite combat capabilities to perpetuate a fleet of the kind we have today. Let us examine the plan in more detail:

►   The building rate for fleet ballistic missile (Tri­dent) submarines is one per year until 1985, when two are programmed. That will allow orderly re­placement of aging Polaris submarines and increase the overall quality of the force.

►   The plan proposes 11 attack submarines, 7 of which appear in the final two program years. This would fall slightly short of sustaining the widely ac­cepted force level goal of 90, a force responsive to the projected threat and U. S. strategy. Under the plan, a new fleet attack submarine—presumably affordable in larger numbers—would start in fiscal year 1983-

►   Procurement of Aegis cruisers, the Ticonderoga (CG-47) class, would total 16 ships. Here, again, the latter two years—fiscal 1984 and 1985—contain the lion’s share of these ships, four being planned for each year. Note, too, the DDGX—a new class of de­stroyer, still in the “pencil drawing” stage—would begin construction in fiscal year 1985, to forestall a precepitous decline in force levels.

y Building of antisubmarine warfare frigates would proceed at the smooth rate of four per year through­out the plan. One FFX (another “drawn-in-pencil” ship) would start in fiscal year 1983 as the FFG-7 program winds down. The FFX could well be the first ship ever built to be placed immediately into the Naval Reserve Force.

►   The odd-numbered years of this shipbuilding plan include one dock landing ship (LSD-41 class) each, for a total of three. This is the much-needed replacement for the Thomaston (LSD-28) class, although not on a one-for-one basis, as the latter are retired.

y An important initiative in this plan is the con­struction of nine of a new class of mine countermea­sures ships.

y The planned purchase of two fleet oilers in fiscal year 1983 and two more in 1984 will meet the grow­ing requirement to replace our underway replenish­ment and support ships, about half of which are more than 25 years old.

►   Surveillance towed array sensor system (SURTASS) ships, designated T-AGOS, would be contracted for at the rate of five and four in the first two years of the plan, respectively. This would result in a total force of 12 of these small ships; we expect them to have an impact on U. S. antisubmarine warfare capabilities out of all proportion to the ships’ size.

►   Four salvage ships, which are a repeat of the suc­cessful Bolster (ARS-38) class with improved habitabil­ity and environmental protection systems, are to be built. These ships are programmed for fiscal year 1981, 1982 (two), and 1983.

►   Finally the plan includes a total of 14 maritime pre-positioning ships (T-AKX), to be used in support of the Rapid Deployment Force by strategically posi­tioning Marine Corps combat unit equipment in forward geographic areas. They would be purchased at the rate of two in fiscal year 1981 and three each year after.

Overall, this 97-ship five year plan represents a significant improvement over the fiscal year 1980 shipbuilding'plan. If there is commitment to it, the result will be ships with the right mix of capabilities to make an important, favorable impact on the aver­age age of the fleet and on its overall posture.

There are actually three major categories of things—ships, aircraft, and weapons—we need to keep track of in assessing the Navy’s investment pos­ture. Discussion about weapon inventories is also in order. The Navy’s capacity to surge into and sustain combat is being closely examined. In many crucial areas, we are far short of the spare parts and muni­tions we would require to sustain intensive combat, particularly where newer weapons are concerned: air- to-air missiles, torpedoes, mines, standoff weapons, sonobuoys, and the like.

We have become accustomed to setting procure­ment objectives which are well below the agreed in­ventory objectives, simply because we have been un­able to afford buying what we need. And, worse than that, oiir asset position consistently trails that some­what reduced procurement objective. In effect, we program on the assumption that there will not be a war in the next few years ... or that we will have

Table 3 Annual Nary Shortages

Shipbuilding Aircraft procurement Ordnance People

$4-8 billion