{"id":63594,"date":"2023-03-15T17:50:40","date_gmt":"2023-03-15T17:50:40","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2023\/03\/15\/naval-chief-says-rising-cost-cost-spurred-amphib-production-pause\/"},"modified":"2026-08-08T00:51:19","modified_gmt":"2026-08-08T00:51:19","slug":"naval-chief-says-rising-cost-cost-spurred-amphib-production-pause","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/naval\/2023\/03\/15\/naval-chief-says-rising-cost-cost-spurred-amphib-production-pause\/","title":{"rendered":"Naval chief says rising cost spurred amphib production pause"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><i>Editor\u2019s note: This story has been updated to include comments from the Marine Corps commandant at the same event, as well as a statement from Ingalls Shipbuilding.<\/i><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 The U.S. Navy says the<b> <\/b>rising cost of the San Antonio-class amphibious warship program is justifying the service\u2019s decision to indefinitely pause the program.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Chief of Naval Operations Adm. Mike Gilday said Wednesday the production line at HII\u2019s Ingalls Shipbuilding in Mississippi is running behind and the price tag is rising.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe cost of that ship has gone from $1.47 billion, to the second ship at $1.5 [billion]. The third one that we\u2019re contracting for right now is probably going to be between $1.9 and $2 billion \u2014 so that increase will be somewhere between 21[%] and 25%,\u201d Gilday said, referring to Flight II ships LPDs 30, 31 and 32.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Office of the Secretary of Defense a year ago directed the Navy to <a href=\"https:\/\/www.defensenews.com\/naval\/2022\/03\/28\/us-navy-seeks-to-end-san-antonio-class-ship-production-reducing-fleet-by-8-amphibious-hulls\/\" target=\"_blank\">pause and study the amphibious transport dock, or LPD<\/a>, to determine whether it wanted to continue with the existing Flight II design or move to a variant of that design.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Navy requested funding for LPD-32 in its fiscal 2023 budget last spring and announced it would then truncate the program after three ships, despite previous plans for 13. Lawmakers, unhappy with that move, added advanced procurement funds for an LPD-33. The Marine Corps endorsed an LPD-33 in its unfunded requirements document last spring, but the Navy has said it does not want to buy it yet.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Speaking at the McAleese Defense Programs Conference, Gilday said that unless that future ship is purchased through a multiship contract, it \u201cwould likely be at $2 billion or above, at least a 25% increase. We\u2019re moving in the wrong direction.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the commandant of the Marine Corps disputed those numbers and said the LPD line has made cost improvements, once inflation is considered.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Gen. David Berger told reporters the Flight I San Antonio ship cost $2 billion. but the cost dropped down to $1.66 billion and then $1.62 billion a copy when the Navy and Ingalls transitioned to the pared-down Flight II design.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Asked about Gilday\u2019s characterization of a spike in cost for LPD-32, which is still being negotiated, Berger told reporters Gilday \u201cbelieves it might be up to that amount, I don\u2019t know. But that\u2019s not a contracted ship yet.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The commandant said pausing the line, which is making cost-reduction improvements, and restarting it later would not make sense.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThey\u2019re right at the point in the curve that\u2019s the most efficient, and we\u2019re going to take a timeout. From my perspective, I can\u2019t accept that when the inventory, the capacity has to be no less than 31,\u201d he said, referring to the 31 amphibious ships in the fleet today. That figure is set to drop to 24 this decade if the Navy continues decommissioning ships early without buying replacements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Because San Antonio-class amphibs are built most efficiently when bought every other year, Gilday and Berger agree LPD-33 won\u2019t come before FY25.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe haven\u2019t put the [FY]23 ship on contract yet, the line is already running behind, so as a taxpayer, if you want to give the vendor money next year for a ship that they can\u2019t bend metal on?\u201d Gilday said. \u201cWe have time here to take a look.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIt goes back to the fact that we\u2019re not going to be swimming in money forever,\u201d he continued. \u201cWe\u2019ve got to start making some hard decisions.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ingalls spokeswoman Kimberly Aguillard told Defense News following the conference that the actual shipbuilder cost \u2014 the cost that Ingalls controls, not including government-furnished equipment the Navy buys separately and delivers to the yard for installation \u2014 had held steady despite the pandemic, supply chain issues and other recent challenges.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWhile Ingalls cannot comment on total price to the Navy, over the last five ships this partnership has enabled us to hold the line on shipbuilder cost. In 2016, LPD 28 was awarded for $1.47B (shipbuilder cost) and seven years later LPD 32 was negotiated with additional scope for $1.54B (shipbuilder cost), or within 5% of the LPD 28 award,\u201d she said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Noting the challenges the yard faced while building and delivering these recent ships, she added that \u201cshipbuilders finished and tested LPD 28 at the height of the pandemic and delivered the ship last year, while LPD 29 goes to sea trials and will be delivered this year. The hallmark of this program has been the Navy-industry-supplier partnership that has continued to maximize the efficiency, affordability and predictability of this production line.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">During a Monday briefing on the Navy\u2019s FY24 budget proposal, Under Secretary Erik Raven told reporters the Pentagon had initiated the pause in LPD buys, but an integrated team including the Navy, Marine Corps, the Office of the Secretary of Defense and the Cost Assessment and Program Evaluation office would choose the path forward.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Rear Adm. John Gumbleton, the deputy assistant secretary of the Navy for budget and director of the Navy\u2019s fiscal management division, said during the same briefing \u201cthe services are fundamentally aligned on this requirement.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cBoth service chiefs like 31 as the requirement, both service chiefs like multiyear procurements, both service chiefs want to buy in a predictable future,\u201d he continued. \u201cIf we can do a study and actually lower the cost of this, that\u2019s all to the good of the Department of the Navy and Marine Corps.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.defensenews.com\/naval\/2023\/02\/28\/us-navy-reviews-cost-saving-design-changes-before-resuming-amphib-buys\/\" target=\"_blank\">Defense officials are considering design changes<\/a> that would lower the cost, with Capt. Judd Krier, the amphibious warfare branch head in the expeditionary warfare directorate, saying at a conference last month \u201cwe are doing a capabilities-based assessment in fiscal year \u201823, really looking at the requirements for what the future amphibious force needs for presence, deterrence and crisis response.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Krier said this LPD review isn\u2019t \u201cnecessarily just to design a ship, although that is certainly possible and a potential outcome,\u201d but also to assess what the Navy needs for \u201cthe future amphibious force to maintain its lethality and survivability and sustainability in support of all the range of operations.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, Berger, who was part of the group nearly 10 years ago that pared down the Flight I design to create Flight II, was pessimistic about the effort.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cAll that took us to the final Navy decision to go with the Flight II, all that made perfect sense,\u201d he told Defense News. \u201cThere was a lot of headbutting on every little detail. So I don\u2019t know, doing that again with the same ship, I don\u2019t know what you\u2019d find out that we don\u2019t already know.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Commander of Naval Sea Systems Command Vice Adm. Bill Galinis said at the same McAleese event he couldn\u2019t discuss potential design changes, but his command is seeking to find cost savings in the manufacturing process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe\u2019re always looking at ways to drive cost out of the shipyards, and the shipbuilders are a key part of that \u2014 in fact, they bring probably some of the better ideas because they\u2019re building them,\u201d he told Defense News Wednesday after his remarks.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The CNO said Ingalls&#8217; LPD production line is running behind and growing in cost, making it an easier decision for the Pentagon to hit the pause 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