Unfortunately, the design trade-offs that have shaped the gross characteristics of the ship have cast doubt on the affordability of the program.
I ask that excerpts from the House and Senate Defense Appropriations reports be inserted in the Record at this point, so that I may comment on the language.
The material follows:
The budget request includes $508 million in fiscal year 1995 for development of the New Attack Submarine (NAS). The Department of the Navy has reported to the Congress that the total development cost of the NAS is expected to be $3.5 billion and procurement costs are expected to be $57.8 billion. The Committee believes that an investment of this scope must be very carefully reviewed to achieve the highest possible return in capability at the most realistic cost. The Committee further believes that a program of this magnitude deserves special attention early in its development phase to ensure that the Congress and the Department are fully aware of financial implications for the future, in particular the potential drain on budgetary resources available for other Navy shipbuilding programs as well as overall Department of Defense requirements.
Much of the testimony and correspondence received by the Committee this year has concentrated on preservation of the submarine industrial base. The Committee recognizes the importance of this aspect of the NAS program and also notes that the end of the Cold War has not resulted in an end to submarine mission requirements.
At this time the Committee is prepared to offer a limited endorsement of the role NAS plays in the Navy's overall plan for preservation of the submarine industrial base. However, the Committee is concerned that the current plan needs to be refined to control total program cost while keeping open the option for improvements to adequately address the threats of the future.
First and foremost, the Committee has added $100,000,000 to the fiscal year 1995 budget request for Advanced Submarine System Development (P.E. 0603561N). The funding is to be dedicated to improvements in `producibility' with the overall goals to be (1) a reduction in risk associated with the program, (2) a reduction in follow-ship procurement cost to no more than $1.2 billion versus the current estimate of $1.54 billion, and (3) allow for future insertion of new technology. Along these lines, the Committee directs the Navy to incorporate full modular reconfigurability into the design for NAS. Such reconfigurability at a minimum must allow for insertion of large-scale new technologies that become available or
adapt the design to shifts in mission focus or operating environment. Such modularity must also include the ability to accept replacement of machinery plant, entire propulsion plant (machinery and reactor), sail, and the forward end, as well as insertion of special mid-hull mission modules forward of the reactor plant.
Second, the Committee recommends a reduction of $137,322,000 for Ship Contract Design (P.E. 0604567N). This is the total amount specified in project F2199 for New Design SSN. The Committee has deferred embarking on the new design effort until completion of producibility studies to reduce future costs. The Committee further recommends a reduction of $62,678,000 for New Design SSN Development (P.E. 0604558N) for similar reasons. The Committee has recommended no reduction to the funding request of $82,412,000 for S9G nuclear propulsion plant development (P.E. 0603570N) since this effort is essentially in its sixth year of development and the Committee believes it is too late to re-think the size and power of the system. However, the Committee directs the Navy to use a portion of the funding requested to continue efforts to find better and cheaper ways to produce the propulsion plant.
The Committee advises the Department of Defense that future funding for NAS will be dependent upon the Secretary of Defense certifying that the follow-ship procurement cost goal of $1.2 billion in constant dollars will be met and that the Navy cost estimate has been verified by an independent Department of Defense cost estimate. In addition, the Committee directs the Secretary of Defense to submit detailed quarterly reports to the Congress on the efforts being undertaken to reduce the cost of the submarine. The first report is to be submitted on March 31, 1995.
Submarine plans--Over the next 5 years, in constant fiscal year 1995 dollars, the Navy plans to spend $7,690,000,000 to develop and produce the first new attack submarine and to complete payment on the SSN-23. Over 10 years, the costs would be $18,600,000,000. The Navy plans would develop the new attack submarine as a lower cost alternative to the seawolf program. The Navy argues, that production of one Seawolf every other year is adequate to sustain the nuclear submarine industrial base in the near term, but it must purchase the new attack submarine to lower total costs and, because continuing Seawolf production at this rate would be insufficient to sustain a force structure of between 40 and 55 attack submarines in the long term. Further it argues, that a new submarine design is needed to sustain the industrial base for submarine design capability.
Clearly the concerns expressed by the Navy while not inconsequential are based on costs and future force structure requirements. It appears, based on the 30-year life of the Navy's SSN-688 class submarines, that a shortfall will not begin until the middle of the second decade of the next century, raising questions about the need to finance a new low-cost alternative to the Seawolf during the current 5-year plan. The quandary is how can DOD best protect the industrial base at the lowest cost until it is time to purchase a relatively large number of SSN-688 replacements.
The cost of the Seawolf, at approximately $2,500,000,000, is expensive. However, the first new attack submarine will cost more than $3,100,000,000 to produce, in 1995 constant dollars. This is about 25 percent more than the SSN-23 is expected to cost. Furthermore, in conjunction with ordering the first NAS, the Congress will need to provide an additional $2,068,000,000 to complete development of this alternative submarine. Recently, Deputy Secretary Deutch instructed the Navy to reduce its NAS spending by $1,000,000,000 over the 5-year plan. One alternative would be to delay the NAS. The Committee finds that the NAS program could be delayed 8 years and still satisfy the requirement to maintain an acceptable attack submarine force structure. However, this alone will not sustain the submarine industrial base.
If an alternative submarine construction program continued during this 8-year period, the industrial base could be sustained. The Committee notes, for example, that purchasing one Seawolf every other year through 2004 while delaying continued NAS development until 2003 would cost approximately $4,700,000,000 over the 5-year plan, and $14,400,000,000 over the next 10 years. This amounts to a savings of nearly $3,000,000,000 over the next 5 years and nearly $5,000,000,000 over the 10-year period compared to the current plan. Such an approach would minimize the financial burdens facing the Navy and the Defense Department over this period, and could allow for the much needed recapitalization in other areas, such as Marine Corps amphibious ships.
The Committee shares the Navy's concern that the submarine design base would not be entirely safeguarded by this type of approach. The Committee believes continuation of a technology demonstration program studying advanced submarine concepts, especially with the objective of reducing the costs of the new attack submarine would be a useful and cost-effective method for sustaining these design skills. A $1,000,000,000 program over the 8-year period could offset this need. Together, this approach would still save the Navy nearly $2,400,000,000 over the next 5 years, including more than $900,000,000 next year alone.
The Committee directs the Navy to consider an alternative to the new attack submarine program before going forward to milestone III. The Committee expects this review to be completed before the Navy will need to obligate more than 50 percent of the fiscal year 1995 development funding associated with the new attack submarine. It therefore, directs the Navy to withhold from obligating 50 percent of the fiscal year 1995 new attack submarine funds until the review has been completed and a report on the review has been submitted to the congressional Defense committees.
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New attack submarine combat system: The Committee supports the Navy's stated goal of employing an open hardware and software architecture to connect and operate the 15 command and surveillance subsystems comprising the combat system for the new attack submarine. This goal also attempts to maximize affordability, flexibility, and performance of the combat system. The Committee further believes that an open competition for the combat system should ensure the greatest possible use of open system interfaces and commercial electronics.
The Committee has been informed that the Navy is reconsidering the strategy for developing this combat system. Previous Navy plans to use only current combat systems as the baseline for the new submarine's system were criticized convincingly by an independent panel (the Reynolds panel) chartered by the service. The Committee believes that competition for the new attack submarine combat system at the system level must be pursued to optimize private sector expertise to develop and integrate an affordable, open system architecture using advanced technology. Therefore, the Committee prohibits the use of any fiscal year 1995 funds to develop, modify, or otherwise evolve the current Navy submarine combat systems as candidate systems for the new submarine, except as part of a fully competitive process.
The Committee further directs that no fiscal year 1995 funds shall be obligated for design, development, or integration of a combat system for the new attack submarine until the Assistant Secretary of the Navy (research, development, and acquisition) reports to the congressional defense committees on the service's revised strategy for a competition for a combat system integrator. This report, which shall be submitted no later than December 31, 1994, also shall describe how the service is responding to the specific recommendations and conclusions of the independent panel with respect to development of the combat system.
Mr. D'AMATO. Ultimately, the Centurion debate will turn on the definition of affordability. The Navy defines an affordable Centurion as anything less expensive than the Seawolf. Congress defines an affordable Centurion as a submarine that will fit within the shipbuilding and conversion budgets of the future, both the Congressional Research Service and the Pentagon's Cost Analysis Improvement Group have raised this issue. I believe ours is the proper perspective.
If we want to avoid a repeat of the Seawolf debacle, we must impose budget discipline now. With the release of fiscal year 1995 funds, and the onset of detailed design, Congress will cede control of the cost and character of the Centurion to the Naval Sea Systems Command. Unless we tie the release of fiscal year 1995 funds to specific cost caps, we are likely to find ourselves anguishing over the termination of yet another unaffordable submarine in the not too distant future.