A New Carrier for a New Century

The next generation aircraft carrier has its share of detractors, but others believe the CVN-78 class will provide more bang for the buck than its predecessors.

Debates about aircraft carrier construction programs are often colored more by myths and half-truths than solid understanding of the issues at hand. Several misunderstandings have affected the debate over the CVN-21 program even as the first of the class-the Gerald R. Ford (CVN-78)-is funded in the Fiscal Year 2008 budget. (Truth in packaging: I work for Northrop Grumman, whose Newport News sector will be building CVN-78.)

Four key, interconnected misperceptions are at play:

* Some, arguing that the Nimitz-class aircraft carrier is the most powerful warship sailing the oceans today, incorrectly conclude that no need exists to pursue a new aircraft carrier.

* To reinforce the supposed folly of the new program, they falsely assert that continuing with the Nimitz class is a less expensive option.

* CVN-78 research and development costs are misstated, implying that these are out of line with requirements.

* And, finally, too many look at acquisition cost as the full cost to consider, rather than considering total ownership cost (life-cycle cost) and total ownership capability (what the system will provide through decades of service life).

It's time to provide a factual context, as to carrier costs and capability issues, for correcting these misunderstandings.

CVN-78 vs. Nimitz: Capabilities

When discussing aircraft carrier construction options, some suggest that similar capabilities could be attained through the acquisition of a "Nimitz-repeat." That is not the case.

Nimitz carriers are extremely capable but their design is now four decades old, developed before the All-Volunteer Force, when manpower was an available and relatively inexpensive commodity but information was expensive to collect, transmit, analyze, and store. Today, Sailors are the Navy's most valuable and expensive resource, while information is a less-expensive commodity with every passing day (and the ability to use this information in a sophisticated fashion is of always growing importance).

Nimitz-class systems, dating from decades ago, often require far more manpower to operate than do 21st century (Ford-class) options. For example, the CVN-78's reactor plant will generate two-and-a-half to three times the power, yet require half as many Sailors to run. Thus, the CVN-78 class exploits technological advances over the last 40 years to develop a ship that more judiciously uses manpower.

The Nimitz class was also developed in a different strategic era, with the threat of nuclear warfare driving design decisions and operational concepts. Its strike system has elements optimized for nuclear-weapons delivery, and these work against maximizing sortie generation. While Nimitz carriers generate large numbers of sorties, Ford-class carriers will have even greater sortie generation capability (by at least 20 percent), require fewer bomb handlers, and therefore threaten far more enemy targets than a Nimitz.1

As with most successful warship classes, the Nimitz design included a growth margin to accommodate future systems. With 40 years of technical advances, several new generations of aircraft and weapons to accommodate, and new warfighting concepts requiring new command spaces (such as for a joint force air component commander), that growth margin was filled long ago. Putting new capabilities in a Nimitz requires searching for things to take off the ship. The CVN-78 recaptures a significant growth margin and facilitates more efficient (and therefore less costly) insertion of future technologies (such as, potentially, directed energy weapons). Nimitz carriers will remain a cornerstone of national defense for decades to come, but they are manpower intensive and have run out of growth margin. The CVN-78 is capability intensive, designed to more judiciously employ each Sailor and provide the margin to incorporate tomorrow's technologies.

CVN-78 vs. Nimitz: Cost

When discussing CVN-78, some assert that "the previous nuclear-propelled carrier, the George H. W. Bush (CVN-77, the last of the Nimitz class), is costing about $7 billion" and imply that this would be the cost for building another Nimitz.2 In fact, this is a more expensive option for several reasons.

The Nimitz reactor plant heavy components have been out of production for over a decade. In many cases the facilities and tools no longer exist to manufacture Nimitz equipment, as the program's focus has been on improvements to manufacture the CVN-78's reactor equipment. Significant restart costs would be required for a Nimitz. As well, continuing investments in CVN-78 reactor technology would be lost in moving back the clock to a MVrafz-repeat.

The costs of the Bush do not reflect the full cost of an aircraft carrier. The Nimitz program maintained a spare ship set of reactor plant heavy components through the program. With the decision to move to a new, more powerful, and more efficient reactor plant, this spare set was no longer required. The Bush benefited in that it consumed this spare set of reactor components at no cost to the ship contract.

Finally, across the entire economy, labor costs almost always increase above the inflation rate with such things as the skyrocketing cost of providing medical coverage (whether to service personnel or to workers at a shipyard). Building U.S. Navy warships (especially nuclear-powered ships) requires high-quality-highly-trained and highly-skilled-labor. The CVN-78 program will cut into this cost growth by reducing labor hours in construction through, for example, greater modularity in the design, enabling more construction to occur in buildings rather than on board ship.

Thus, a "Mimitz-repeat" would cost significantly more than is commonly understood. In fact, in terms of procurement (Ship Construction, Navy, or SCN) dollars, a "Nimitz-repeat" would almost certainly cost more than the CVN-78 and others of the class to build.3

And, for that price, the "repeat" would not include any significant capability improvements (such as improved ammunition handling, sortie generation, survivability, command and control, habitability for the crew, and greatly increased power generation and distribution) nor would it capture the advances that would significantly lower life-cycle costs (such as reduced manning) and increase operational availability (through reduced requirements for major maintenance).4 Although unlikely, even if this lesser capability platform might cost somewhat less for initial procurement, it would cost roughly 20 percent more through its operational life.

No Sticker Shock

Since former Secretary of Defense Donald Rumsfeld's 2002 decision to move to the CVN-78 program, there have been misperceptions about its cost. The best public estimate to date is that the program-research, development, and SCN costs-will total roughly $13.7 billion to deliver the first carrier in the class.5 Some people incorrectly assert that each vessel will cost this much, but in fact this amount includes significant research, development, and other non-recurring costs.6

While $13.7 billion is a substantial sum, this figure is somewhat misleading. Unlike aircraft, the initial ship in a class carries the entire burden of its class' development costs. If aviation were to follow the same system, the first F/A-22 to enter the U.S. Air Force would cost somewhere in the range of $30 billion, an obviously absurd figure. The plan is for the CVN-78 class to number 12 nuclear-powered aircraft carriers. The $13.7 billion includes approximately $3.2 billion of research and development costs. If ship R&D costs were allocated across the class, similar to aircraft costs, the first ship's cost would fall by more than $2.85 billion to about $10.8 billion-$300 million R&D, the rest SCN.

The CVN-78 will require approximately $10.5 billion in SCN funding for FY 03 through FY 09 (the last year of SCN funding). Of that $10.5 billion, about $2.4 billion is for non-recurring costs for ship design and to establish the program's industrial infrastructure. This $2.4 billion thus will not show up in future ships' construction costs. This funding will deliver an extremely capable class of warship, with significant transformational advances, in comparison with the Nimitz-class but with a much lower life-cycle cost. In fact, each Ford-class ship will have a life-cycle cost at least $5-$6 billion lower than a Nimitz-class aircraft carrier.

A significant portion of the cost savings will come from reduced manpower requirements. The CVN-78 will require between 15 and 25 percent fewer Sailors-500-900 bodies-to operate than a Nimitz-class carrier. In FY 03, it cost the nation approximately $87,000 to put a Sailor to sea and $159,000 for the average officer in a carrier crew. If we average that at a conservative $100,000 per person, then the annual savings would be $50-$90 million in manpower costs alone. That equals $2.5-$4.5 billion over the expected 50-year operating life of the CVN-78 just attributable to reduced manning.

Thus, the Ford class represents a less-expensive option for the Navy and the nation-less expensive both to build and to operate. The most important factor is the significant improvements CVN-78 will bring to naval aviation. If cost is used as the only benchmark for valuation, then insufficient consideration is being given to the warfighting capabilities required and planned for this large-deck nuclear aircraft carrier.

The realistic and achievable objective of CVN-78 is investing up front in higher-quality construction to achieve greater operational capabilities at lower life-cycle cost. When capabilities are matched to cost, the Ford class represents the most cost-effective carrier option.

Mutual Reinforcement

While seemingly contradictory, the dual objectives of improving capabilities while reducing life-cycle costs often reinforce each other. Removing the auxiliary steam system from the ship will reduce maintenance costs, as well as improve system reliability, safety, and operational effectiveness. For example, electro-magnetic catapults will be more finely adjustable, thus supporting a broader range of aircraft. Removing steam from the carrier requires a new electrical distribution system, which facilitates the introduction of future technologies such as directed-energy weapons.

Also reducing maintenance costs will be the flat-panel radar arrays, which will increase reliability and operational effectiveness, including reduction of the carrier's radar cross section. Changing construction materials will lower maintenance requirements, lead to greater operational availability, and improve survivability. Better paints, for example, will mean fewer Sailor hours chipping paint. The realistic and achievable objective: investing up front in higher-quality construction leading to greater warfighting capability with a lower life-cycle cost.

Contrary to the impression fostered through common misunderstandings, the first Ford-class carrier will achieve well over a $5 billion life-cycle cost savings (FY 03 dollars) when compared with a Nimitz repeat. Reduced manning, increased operating cycle, and lowered maintenance requirements yield cost savings while delivering a more capable platform and a more effective sea-strike system. In other words, compared to a Nimitz option, the Ford class represents lower cost and enhanced capabilities for the future Navy.