Three percent! That’s the premium the nation must pay to ensure that the ability to design, engineer, and build highly sophisticated nuclear powered submarines will be available at two nuclear shipbuilders in the future. And yet, judging from the row before Congress in the spring and early summer 1995, the Navy’s three percent solution will be a questionable expense at a time when extreme austerity is demanded as we struggle to rein in the federal deficit, redefine government, and ensure our economic competitiveness in the future. Or so it seems.
The President in February requested funds for the third Seawolf class attack submarine (SSN 23) and long-lead funding for the new attack submarine (NSSN), scheduled to begin construction in 1998. Long controversial in some circles, the Seawolf issue has now taken on an added drama, with industry and congressional proposals for killing the SSN 23 and opening up the NSSN program to competition much sooner than the Navy had planned. These pose significant implications for the Navy’s near term ability to meet operational requirements against an increasing-not decreasing-undersea threat, as Secretary of the Navy John Dalton acknowledged in late March. More troubling is the fact that these decisions will determine the future of the nation’s nuclear ship-building industrial base, and whether the U.S. submarine industrial base will continue to meet national policy objectives. Indeed, the two nuclear capable private shipyards, Electric Boat Division of General Dynamics and .the Newport News Shipbuilding and Drydock Company, are locked in an increasingly bloody political struggle for survival into the next century.
National Policy in Doubt?
U.S. policy for the nuclear shipbuilding industry was outlined in the Department of Defense’s 1993 Bottom Up Review. The BUR required that the U.S. maintain two nuclear capable shipyards to ensure the future health of the American nuclear ship-building industry. The Navy is also committed to regaining and sustaining U.S. undersea superiority to hedge against recent developments and future threats to U.S. and allied naval forces. To achieve both goals, the U.S. drew up a Solomon-like plan calling for a division of labor between Electric Boat which will build SSN 23 and the NSSN, and Newport News which will continue to be the sole source shipyard for nuclear aircraft carriers. This program was launched in 1994, when Newport News received the contract for the ninth Nimitz class nuclear powered carrier (CVN 76) and Electric Boat began the design of the NSSN.
The need for nuclear powered submarines (SSNs) has not diminished with the fall of the Berlin Wall, although many people in the Administration, Congress, and the public remain unconvinced about the real dimensions of the undersea threat to U.S. interests and forces. The unique capabilities of the SSN give it a pivotal role in U.S. military strategy, doctrine, and operations. The SSN’s stealth and multi-mission flexibility; its multi-warfare arsenal of weapons, including Tomahawk missiles, mines, and torpedoes; its ability to respond rapidly and covertly to crises without aggravating political situations; and its ability to remain on station in important world regions almost indefinitely, without logistics support, combine to give SSNs a versatility found in few other warships.
The SEA WOLF and NSSN were designed to ensure that the U.S. sustains the undersea superiority our Submarine Force has enjoyed since the 1950s-a superiority that we are in danger of losing. Russian submarine designers have stated that they have as their primary goal to design the practically invisible, undetectable submarine. This ambition is underscored by the fact that they have developed, tested, and deployed fourth generation quieting technology intended for this new design submarine, identified as the Severodvinsk class, which the U.S. intelligence community expects to join the fleet by 2000. New construction Akula SSNs have already taken this technology to sea, with six Russian SSNs demonstrating greater stealth-the critical factor in undersea warfare superiority-than the U.S. Navy’s improved Los Angeles (SSN 6881) submarines in many acoustic domains. Additionally, analysts expect that a fifth generation SSN is under development for the first decade of the 21st century and a new design Russian SSBN will begin construction by the year 2000. Finally, two new, advanced, conventionally propelled submarines are ready for building should customers materialize.
Russia, among others, is also selling submarines on the world market, offering to practically any country the means to counter U.S. from the sea strategies and operations directly. Indeed, the regional submarine threat to U.S. and friendly naval forces is expanding, with nearly 45 countries operating more than 600 submarines, while surface and airborne threats continue to evolve. Not all of these submarines constitute even a potential threat to U.S. military operations or commercial shipping for a variety of reasons: training and crew proficiency, material readiness, and basic system/platform capability. But some clearly do, while mines, torpedoes, precision-guided munitions, and cruise and tactical ballistic missile systems are increasingly available to friendly and not-so-friendly nations alike. Iran, for example, has reportedly acquired from China the EM-52 rocket-propelled, rising naval mine, patterned after the Soviet/Russian GRVM, that can be deployed from the two or three Kilo submarines (perhaps armed with wake homing torpedoes) it is acquiring from Russia. This development, coupled with an Iranian military buildup on several islands near the Strait of Hormuz, has exacerbated concerns about Iran’s threat to international shipping in the Arabian Gulf. Similar concerns are focused on other strategic waterways and regional naval arms buildups.
Access to sophisticated airborne and space based sensors, once the province of a few technologically advanced countries, will ensure that more regional powers will have the capability to detect and target surface ships, almost at will. If you can be seen (or heard), you can be targeted, and in many cases, attacked. This is a troubling aspect, or what some in the U.S. defense community are calling the Revolution in Military Affairs (RMA). Although the RMA is usually described as the panacea for many U.S. operational shortcomings, advanced technology may cut in ways we cannot predict, and not always to our advantage, as Rear Admiral Dennis Jones, Director Undersea Warfare (N87) acknowledged at the June 6 session of the Naval Submarine League’s Annual Symposium.
The U.S. naval intelligence community has thus concluded that Russia has retained its ability to build and operate technologically advanced submarines, some of which are aggressively marketed for foreign sales. Furthermore, regional navies continue to enhance their own largely sea-denial naval capabilities that could challenge U.S. naval strategies. For these reasons, Secretary Dalton, in a May 4, 1994 letter to Senator Sam Nunn, then-Chairman of the Senate Armed Services Committee, concluded that the Navy’s submarine programs, especially SSN 23, were well grounded.
“The third Seawolf … provides significant military capability. It will support littoral operations [in] regional conflicts, including covert delivery of Special Forces, as well as sustain undersea battlespace superiority and joint-integrated regional dominance. Seawolf’s inherent stealth, large payload and advanced combat system provide a necessary hedge against the Russian threat and capability… (The Seawolf fulfills a valid military requirement that by the end of the next decade we must have 10-12 submarines with Seawolf stealth (quieting).”
Thus, the U.S. must continue to maintain a modern, advanced Submarine Force, as well as other elements of 21st century naval force, to counter these and other growing threats.
An Atrophying Industry
This Submarine Force cannot be supported without an equally modern and sophisticated industrial base. The threat to U.S. undersea superiority is accompanied by another challenge, one that could have equally severe implications: the threat that America’s submarine industrial base could vanish. The national objective to preserve a robust nuclear shipbuilding industry will not be met without procurement of SSN 23 in 1996 as a bridge to production of the NSSN in 1998. Nearly 40 nuclear submarines were approved during the 1980s. The Navy authorized only two submarines in 1991 and one since then. Without SSN 23 there will be a seven year drought in submarine authorizations which could have a devastating effect on the whole range of suppliers and producers who support our submarine programs.
Certain components are unique to nuclear submarines and have only one market-the U.S. Navy. More than 600 major equipment vendors and 3000 other companies in 43 states contribute to the U.S. submarine industrial base. Some of these are large and divers firms; many others are more highly focused and specialize in submarine work. For example, there are only a few firms in the nuclear propulsion business, and the Navy’s nuclear propelled ship programs are currently the only nuclear new construction projects underway in the country. Moreover, the knowledge and skills required for submarine design and construction are unique and perishable. Without exercising these skills through actual shipbuilding, they will rapidly erode as trained workers find jobs in other fields and are not replaced by a new generation. Given the degree of specialization involved in submarine construction, the submarine industrial base would be extremely difficult to reconstitute in the event of a shutdown.
The Navy’s decision to build submarines at Electric Boat and aircraft carriers at Newport News will preserve the critical design and production components of the total nuclear shipbuilding industrial base in the most efficient and effective manner. Although Newport News and Electric Boat will specialize in different types of ships, they will share a basic nuclear engineering capability that will provide a hedge in the event of disasters, natural or otherwise-witness the 1993 World Trade Center and 1995 Oklahoma City bombings-that could render one of the shipyards incapable of carrying out work. Retaining two nuclear shipyards is needed if we are to retain the ability to increase submarine production in response to future threats and developments that can be discerned only dimly, if at all, in 1995. It also is the most practical means to ensure healthy and fair competition for future nuclear submarine construction.
Procuring the NSSN through a single source contact will not lead to decreases in production efficiency or significant price increases due to the lack of competition. Electric Boat has instituted a comprehensive program for rationalizing its facilities and enhancing the flexibility of its workforce to meet the anticipated future low rate production workload and will reduce its workforce by 70 percent from 1993 to 1998. The Navy has embraced the numerous lessons learned from the Sea wolf program and designed and structured the NSSN program to be a partner-ship between the Navy, Electric Boat, and key subcontractors throughout the U.S. The close working relationship has already reduced disruptions common at the start of such a complex program and will help ensure affordability cross the board. Through a Revolution in Manufacturing Approaches-integrated design/production teams and the use of highly sophisticated electronic visualization design tools-to match what the Defense Department i·s calling the RAM, the design of the NSSN is specifically tailored to the design, engineering, business, and construction practices at Electric Boat. Electric Boat has unrivalled expertise in structure acoustics, propulsors, and other critical areas of submarine design. Like Newport News for nuclear carriers, Electric Boat is a national asset that must be preserved for future generations of nuclear propelled submarines. And, as Navy leaders have acknowledged recently, a close reading of the BUR admitted the likelihood that submarine construction would be opened up for competition, when it made sense to do so.
Under Attack
However, the nations plan has come under attack, with some, like Senator John McCain (R-Az) and, not surprisingly, Senator John Warner (R-Va), calling for the NSSN program to be opened to competition between the two nuclear yards. In Congressional testimony in March and May 1995, Newport News told Congress that between $SB and $1OB could be saved by killing the SSN 23 and, through a competitive procurement, building the lead and all follow-on NSSN at Newport News. Such claims apparently energized Representative Duncan Hunter (R-Ca), who called for killing the SSN 23, providing additional funds to modify the SSN 22, already about 40 percent complete, for special operations tasks, providing funds to Newport News to enable the firm to participate in the design of the NSSN, undertaking additional submarine R&D to ensure the NSSN ultimately incorporates the best available technologies, and open up the NSSN program to competition. The proposed House Defense Authorization Bill, H.R. 1530, specifically directs the Secretary of the Navy to “to select on a competitive basis the shipyard for construction of each vessel for the next generation attack submarine program”.
The Navy has responded that such proposals, while intriguing on the surface, have several serious flaws that, rather than saving billions, could produce significant long term costs for the U.S. That was the essence of then-Assistant Secretary of the Navy (RD&A) Nora Slatkin’s testimony of May 16 before the Seapower Subcommittee of the Senate Armed Services Committee. (Others appearing at the hearing acknowledged that some savings were possible, but not to the extent claimed by Newport News. The General Accounting Office, for example, stated that Newport News’ claims could not be validated and concluded that “several questionable assumptions and computational errors” could have resulted in higher estimates of efficiency savings than were really likely.) Representative Hunter’s proposal would put submarine suppliers at significant risk by killing near-term construction and delaying-although that is not intended, of coursel-the start of the NSSN. We would end up getting one fewer submarine than currently planned, without saving significant resources in the process, as the proposals promise.
Introducing competition at this time would be different. There is simply too low a rate of production to sustain work at two yards simultaneously, at least in the short run. The lead NSSN will be requested in fiscal year 1998 and the second in fiscal 2000. Low rate production of two submarines per year will begin, under current planning assumptions, in fiscal 2002, and that may be optimistic! At that time competition would make sense, but only then. Competing the lead ship would jeopardize the survival of Electric Boat, and put the national policy at risk. Second, the proposal is also contingent upon a minimum commitment to Newport News of five NSSNs, a commitment that the Navy is unable to make at this time, or ever, as the history of the Seawolf program bears out. Originally 29 Seawolf SSNs were to be acquired. Now, at most only three will be built. Despite planning factors that show 30 NSSNs, no one truly knows how many are in the offing.
Furthermore, the Navy believes that the competition proposal entails hidden costs for the nation. It ignores the costs the Navy would incur if Electric Boat were to close, costs which, in the short term, would include a serious disruption in the NSSN design/build process, unbudgeted design rework and transfer costs, and paying for environmental clean up. In the longer term, by allowing Electric Boat to close the Navy would be foregoing any possibility of future competition. The Navy would have no alternative source should Newport News fail to meet cost, schedule, and performance specifications; in essence it would be held lwstage to a single supplier for a critically important element of U.S. military power.
The proposals are also based on assumptions about significant cost savings from killing the SSN 23. This would ignore the compelling near term requirements for advanced nuclear submarines in the fleet. But, more importantly, it would impose severe cost penalties and the loss of nearly $18 in prior year investment, in addition to other costs, including additional funding to modify the SSN 22 and to bring Newport News up-to-speed on the NSSN design process.
The Three Percent Solution
Maintaining the vital U.S. nuclear industrial base should not require such a draconian choice. Both Electric Boat and Newport News offer strong capabilities and are critical to the future of the nuclear shipbuilding industrial base. According to Navy data released by former Assistant Secretary Slatkin, the premium for keeping both yards in business amounts to about three percent of the Navy’s nuclear shipbuilding programs.
Nuclear powered attack submarines are at the heart of U.S. military power. The third Seawolf, SSN 23, and the NSSN will provide the U.S. with the necessary capabilities to ensure our Navy’s historical dominance under the seas is continued. Retaining two nuclear capable shipyards by building new submarines at Electric Boat and nuclear carriers at Newport News will protect the industrial base needed to construct these ships while also providing the nation with the highly capable, modem submarines needed to counter the enhanced abilities and the proliferation of submarines throughout the world.
The Navy’s strategy will ensure that the nation will maintain the submarines industrial base that can meet our force level and operational requirements at an affordable price. And it will ensure that U.S. excellence and superiority in undersea warfare can be preserved to meet future operational needs. As the Defense Department looks to garner about three percent of the nation’s gross national product for military requirements in the 2000, the three percent solution for nuclear shipbuilding industry, an insurance premium as a hedge against bald uncertainty, looks to be an attractive bet.
