On 9 November 2013 the nation’s newest aircraft carrier, the Gerald R. Ford, was christened and blessed at a time-honored ceremony in which the hull is first wetted by the special liquid of a bottle—now champagne—to give her good luck before launching her into the water. The Ford has been built at great expense, now estimated to be $12.9 billion inclusive of design costs. Some are surprised at the price tag and argue that it is unaffordable, and that the U.S. Navy and the shipbuilder must dramatically reduce this dollar amount if we are to continue to buy and build these ships. Now that we have christened the Ford and can see her, it is a good time to review why we built her, why three administrations—two Democrat (Clinton/Obama) and one Republican (Bush-43)—as well as seven Congresses (106th–112th) have initially approved not only the Gerald R. Ford (CVN-78), but also the John F. Kennedy (CVN-79), and the Enterprise (CVN-80).
Let us answer three questions. Why did we build her? How did we get here? Where should we go from here?
Why Did We Build Her?
The answer to this question can be traced back to World War II, if not earlier. The central role of carrier groups in the great battles of the Pacific—Coral Sea, Midway, and the Great Marianas Turkey Shoot—is well known even to those with only a casual knowledge of the war. Carriers decimated the Japanese fleet and provided the air and sea dominance for Admiral Chester Nimitz’s drive across the Central Pacific.
In the postwar period, carrier striking forces continue to play central roles. In Korea, Vietnam, Desert Shield/Desert Storm, Enduring Freedom, and Iraqi Freedom, carriers provided air and sea control and projected power ashore as part of a joint force. As President Bill Clinton noted when he spoke on board the USS Enterprise (CVN-65) in 1993, “When word of a crisis breaks out in Washington, it’s no accident that the first question that comes to everyone’s lips is: ‘Where’s the nearest carrier?’”
These simple examples help explain why we have a force of ten Nimitz-class carriers and why that force will remain important for many years to come. But why the Ford? Certainly Nimitz-class carriers remain very capable ships. Nevertheless, aspects of their 40-year-old basic design limit long-term growth capacity and add to life-cycle cost. For example, the naval architectural limits of their hulls are being approached, limiting the ability to add additional functions. Nor does the Nimitz class have sufficient electrical power to fully take advantage of certain exciting future capabilities. In addition, Nimitz carriers are manpower-intensive and expensive to operate and maintain, in part due to the nature of their steam and hydraulic systems. It was time for the Navy to develop a next-generation carrier with greatly enhanced growth potential, improved capabilities, and lower life-cycle cost. The result is the Gerald R. Ford, which has much greater electrical-generating capacity, new electrical-distribution architecture, a simpler and more efficient nuclear-power plant, a more efficient flight deck, plus modern electromagnetic systems in place of older steam and hydraulic systems, and increased naval-architectural margins.
How Did We Get Here?
The Ford design is the product of the Department of Defense’s formal, methodical acquisition process. The first step was the Joint Chiefs of Staff approving the need for a next-generation aircraft carrier with mission capabilities stipulated in a formal Mission Need Statement (MNS): Independent of land bases, the aircraft carrier must support an air wing that can simultaneously perform surveillance, battlespace dominance, and strike in sustained combat operations forward. As well as maintaining the core capabilities of naval aviation, the MNS further tasked the program to reduce life-cycle costs while improving flexibility, survivability, and interoperability. The signing of the MNS in 1996 started the Analysis of Alternatives (AOA), a formal planning study of the cost and effectiveness of alternative approaches to meeting the MNS.
The AOA process examined 75 conceptual designs over a three-year period, including a variety of sizes, alternative propulsion concepts, and design concepts. A flag-level oversight group, which met quarterly during that period, guided the effort from the Navy and the Office of the Secretary of Defense. A variety of detailed issues were assessed during the AOA, but there were three main issues and conclusions:
1. Propulsion: The case for nuclear propulsion has grown even stronger. Nuclear power provides undeniable operational advantages—unlimited endurance, ability to sprint to emerging crises without worrying about refueling en route, more space for aviation fuel and ordnance, and others. But nuclear power has historically cost more than nonnuclear-propulsion options. Because of the higher cost, in the 1960s Secretary of Defense Robert McNamara initially canceled a nuclear-powered follow-on to the Enterprise. (Later he approved the Nimitz with her simplified, more efficient, and less costly reactor plant.) In light of the cost issue, the AOA did not assume that nuclear power would be the automatic answer. The cost and effectiveness of several propulsion options were reexamined in detail, including modern oil-fired steam, gas turbines, and diesel, as well as an improved nuclear plant.
The operational advantages of nuclear power were confirmed; the main differences from previous studies concerned the cost comparisons. The AOA found that the premium for nuclear power has declined because of further simplification of the new nuclear plant and the higher cost of oil. The two new-design reactors on the Ford have significantly fewer high-pressure valves and other expensive components than the A-4 plant on the Nimitz and require only half as many personnel to operate. While the reduced manning and simplified design have reduced the operating and maintenance costs for a new nuclear plant, the operating cost for nonnuclear plants has gone up due to rising oil prices—from less than $30 dollars per barrel at the time of the AOA to about $100 today. This adds roughly $1 billion to the lifetime fuel cost of a nonnuclear carrier. At current fuel prices, the AOA projected that Ford-class ships would cost less to operate than a comparable nonnuclear carrier.
In sum, the total cost premium (acquisition plus operating costs) for nuclear power has steadily declined—from nearly 50 percent for the USS Enterprise, the first nuclear carrier, to less than half that much for the Nimitz to about now even for the Ford—due to improved, simplified design of the nuclear plant and the increasing cost of oil. The AOA concluded that overall cost-effectiveness balance has shifted even more strongly in favor of nuclear power.
2. Airwing capacity: Large carriers are clearly more cost-effective. At the center of the carrier debates in the late 1970s were the issues of carrier size and cost. The AOA looked again at these issues in detail. The options ranged from the existing large-deck Nimitz-class carriers (100,000 tons with approximately 75 aircraft) to small carriers (40,000–45,000 tons with 35–40 aircraft) such as France’s Charles DeGaulle, with midsize carriers (70,000 tons with 55 aircraft) in between.
The results were clear-cut: A large deck is considerably more cost-effective in generating sorties for combat missions. For example, small carriers cost about ¾ as much to buy and operate as a comparable large carrier but carry ½ as many aircraft. A modern midsize carrier would cost about 90 percent as much to buy and operate as a comparable large carrier but carry only ¾ as many aircraft. Moreover, once aircraft are allocated to essential defense and overhead functions, a large-deck carrier can generate more than half again as many strike sorties as a midsize carrier. In other words, there is a clear case that large-deck carriers provide significantly more bang for the buck than comparable small or midsize carriers.
3. Acquisition strategy: a clean sheet or an evolutionary approach? The final phase of the AOA addressed alternative acquisition strategies for what would become the Ford program. It was clear that a next-generation ship entailed major research, development, testing, and design efforts—including a new electrical-distribution architecture, a new reactor, a new electrical-generation plant, a new flight-deck layout and composite island structure, a new combat system, and electromagnetic systems to replace existing steam catapults, hydraulic arresting gear and elevators, and other steam-driven auxiliary systems. Research-and-development costs were estimated to add at least $5 billion to the cost for the ship herself. Two basic approaches were considered: a clean-sheet design that made all of the changes in one ship, and an evolutionary approach that phased in changes over several ships. These approaches were fleshed out in greater detail by the program after completion of the AOA.
After the large-ship/propulsion-plant decision was made in 1998, the Future Carrier Program provided an estimate of a one-step “clean-sheet” design for a large, nuclear-powered aircraft carrier. For a ship starting construction in Fiscal Year 2006, the ship cost was estimated at $6.4 billion, and the R&D costs for its nonrecurring design and technology development was estimated at $7.1 billion.
The overall strategy was to reduce components/systems but increase scale in the same way the Nimitz class reduced the number of propulsion-plant components as compared with the Enterprise. For instance, the Enterprise had 8 reactors, 32 steam generators, 16 electrical generators, and more than 5,000 main steam valves for four main engines and catapults. The Nimitz design reduced the number of reactors to two and reduced steam generators and electrical generators to 8, while cutting the number of main steam valves to much less than 1,500—more than a 3-to-1 reduction. While maintaining the same number of reactors, the Ford plant cut the steam and electrical generators in half to 4 each, and reduced the number of main steam valves to less than 300, in large part because of the change from steam to electromagnetic catapults.
Flight-Deck Upgrades and Radar Replacements
Further reductions in topside equipment were envisioned by leveraging the dual-band radar from the (at the time) 33-ship DD-1000 destroyer program, a move that could replace six radars—SPS-48, SPS-49, SPS-67, SPN-43, SPQ-9B, TAS Mk23—and four NATO Sea Sparrow Target Illuminators. On the flight deck, movement of the island aft was considered critical to incorporating Naval Air Systems Command’s vision of a redesigned flight deck with fewer aircraft elevators and new electromagnetic catapults and arresting gear, combined with refueling/rearming stations—“pit stops”—where aircraft can taxi and park under their own power, thereby reducing the number of aircraft tow-tractors and airmen needed to do so.
By reducing the number of components on the ship, substantial reductions in life-cycle costs for manpower and maintenance were achievable, and a $5 billion reduction in life-cycle costs per ship was estimated at Milestone A.
However, the Navy considered the total cost of $13.5 billion unaffordable, and the technology development plan for an FY 06 ship with just eight years of development time too short, and therefore too risky, for most of the technologies. Thus, the Program Office was directed to provide an evolutionary approach over several ships to include the USS George H. W. Bush (CVN-77), the last of the Nimitz class.
A three-ship plan was proposed and approved in 2000. The Bush, an FY 01 start, was to receive new dual-band phased-array radar from the DD-1000 program. CVNX1 (which would eventually become the Ford, CVN-78), the first of the new class of aircraft carrier, was to get the new nuclear-power plant and new zonal electrical-distribution system with the new electromagnetic catapults, and was to start construction in FY 06. The cost? $6.1 billion for the ship and $3.1 billion for the nonrecurring design; she would also receive the Bush’s radars and integrated-warfare system.
The third carrier, CVNX2 (eventually CVN-79, the John F. Kennedy, the planned second ship of the Ford class), was ostensibly slated for an FY 11 start that allowed enough time to receive the remaining technologies not yet ready for CVNX1. CVNX2 was planned to cost $6.9 billion for the ship and another $1.9 billion for nonrecurring design for a new flightdeck with new aircraft and weapons elevators, new advanced arresting gear, laser weapons, and other technologies not mature enough for CVN-78.
But no sooner had ink dried on the construction contract for the Bush in 2001, and the plan started to change. In 2002 the new radars were declared not ready for the Bush, and the DOD started to make changes. First, the Bush was made a modified-repeat Nimitz-class carrier, and the radars were slipped to CVNX1 (CVN-78), which was slipped one year into FY 07. This freed up $4 billion for other pressing shipbuilding concerns. CVNX1’s cost, increased by $400 million to cover the one-year slip, now stood at $7.3 billion.
Then Secretary of Defense Donald Rumsfeld mandated transformational plans in many major defense programs, including the aircraft carriers. This required “pulling forward” all the technologies identified in 1998 that were not ready to go on the CVNX1 by 2006 were now somehow ready to go on it by 2007 with four less years of development.
The DOD gave the Navy 18 months to transform the plan to a single ship with a complete redesign to accommodate the new technologies. At Milestone B, the undertaking was renamed the CVN 21 Program, and CVNX1 (CVN-78) became CVN 21 lead ship; CVNX2 (CVN-79) became CVN 21 follow ship, and CVN-80 (the next Enterprise) was also authorized as the third ship in low-rate initial-production planning. After further adjustments, with a start in 2008, the CVN-78 procurement in 2005 was estimated at $10.5 billion, with $2.3 billion in R&D.1
But notice the R&D bill. It was estimated in 1998 at $7.1 billion for a 2006 start. Then in 2005 it was $4.8 billion less at $2.3 billion for a 2008 start. Had there been a $4.8 billion increase in R&D investment to mature these technologies during those four years? No. Indeed, the Navy recognized this risk when it negotiated the shipbuilding contract as a cost-plus with a 90/10-share line that pays 90 percent of added cost by the government.
So why are we surprised that significant cost growth has occurred in the program? The dual-band radar was four and a half years late, the advanced arresting gear was two and a half years late, and the electromagnetic aircraft-launch system was nearly three years late. All are government programs totaling over $800 million in cost growth.2 And while the shipbuilder has experienced not-unexpected lead-ship problems, estimated at $1.5 billion, the government, and not the shipbuilder, has caused most of the cost growth.
Where Should We Go from Here?
As the lead ship, the Ford has an ambitious testing schedule that will find more problems that no doubt will probably add more cost to her. Find out what’s wrong from the test program and fix the design so that the John F. Kennedy (CVN-79), and Enterprise (CVN-80), can be built with a stable design. With a stable design, Newport News Shipbuilding has shown that it can decrease the cost of the ship.
If the history of the Nimitz’s follow ships is examined—such as CVN-69 after CVN-68, or CVNs 72–75 after CVN-71, the shipbuilder demonstrated significant reductions. For example, CVN-69 was completed 29 months after the completion of CVN-68 and with a 23 percent decrease in construction and engineering man-hours.
Further, if the ships are purchased as two-ship buys with large bulk purchases of material and components (like the procurements for CVN-72/CVN-73 and CVN-74/CVN-75) while keeping the time between builds to less than 41 months, an 18 percent reduction in production effort can be achieved. By working out all the deficiencies of the design through a rigorous testing program on the Ford and stabilizing the design, the Navy should pursue a multiship procurement strategy for CVN-80 and beyond, if it is too late to do so with CVN-79. But to accomplish such a build strategy, the evidence from the Nimitz class suggests that the present five-year gaps between carrier builds are too far apart to expect significant cost reductions by the shipbuilder.
There are two reasons to stay with the Ford. The government, and not the shipbuilder, is responsible for the high initial cost of the Ford due to its decisions to slip the construction, and then to accelerate technology programs without enough development time. But the reductions of components and manpower on the Ford are real, making the $5 billion reduction per carrier in life-cycle costs real as well. The Fords will be a much more efficient class to operate and maintain.
The second and more fundamental reason is the long-term flexibility and growth potential of the Fords due to their much greater electrical-generation capacity, zonal distribution system, and the new electromagnetic subsystems. The Fords’ all-electric launch-and-recovery systems, the catapults and arresting gear, provide a key example. When large unmanned aircraft such as the X-47B are proven viable in the next decade, the real potential for unmanned aircraft at sea will come with smaller, lighter, but more numerous UAVs that can be launched and recovered by the Fords’ electrically controlled catapults and arresting gear. Imagine a deck full of Predator-type aircraft like the Reaper, 60 of them with a squadron of E-2 command/control aircraft and a squadron of tankers. Such a swarm of unmanned combat aircraft, capable of remaining airborne for days at a time, will greatly expand the capability of America’s naval aviation at sea. By the time the third Ford, the Enterprise, enters the Fleet, the UAV revolution at sea will be in full bloom.
No matter what, don’t give up the Fords!
2. Government Accounting Report, GAO-13-396, “Ford Class Carriers,” September 2013, 27.
Dr. Perin recently retired after a 37-year career at the Center for Naval Analyses. His work in Washington has included directing AOAs for the F/A-18E, CVNX, JCC(X), and LHA(R). He also served tours on the staffs of C2F, CFFC, JFCOM, COMSUBFOR, COMNAVCENT, and COMPACFLT.