NAVAL SUBMARINE LEAGUE ANNUAL SYMPOSIUM REMARKS BY RONALD O’ROURKE JUNE 10, 2004

Mr. Rourke is a senior analyst with the Congressional Reference Service of the Library of Congress.

Thank you, Admiral, for the kind introduction. It’s an honor to be here. As always, I should point out that these views are my own and not necessarily those of CRS or the Library of Congress.

As you can see, I want to discuss six points. Since I have only 30 minutes, I’ll move through them fairly quickly.

My first point concerns the place of submarines in the planned size and structure of the Navy. Since early last year, we’ve been in a situation of uncertainty regarding the planned size and structure of the fleet. We don’t seem to be on the 310-ship plan anymore because the Navy and DoD have launched studies that call into question key aspects of that plan, and because the Navy wants to build a large class of Littoral Combat Ships not included in that plan.

At the same time, the Secretary of Defense has explicitly declined to endorse the Navy’s proposal for a 375-ship fleet-or any other new plan for the size and structure of the Navy. And the Navy itself is now hedging on the 375-ship figure, saying that it’s only an approximate number, that the numbers of ships making up the 375 is subject to change, and that the 375 figure reflects traditional crewing and deployment concepts, rather than newer concepts such as Sea Swap.

This uncertainty over the planned size and structure of the Navy is convenient to some degree for Navy and DoD officials, because it permits them to talk about Navy programs without having to be too specific about their details. At the same time, however, the Navy and DoD recognize that this uncertainty makes it difficult for industry officials to make investment decisions that might be in the Navy’s and DoD’s interest in terms of constraining future procurement costs. And at some point, this uncertainty will make it harder for the Navy and DoD to do their own budget planning. Consequently, there are indications that the Navy and DoD plan to resolve, at least partially, the uncertainty over the future size and structure of the Navy either later this year or early next year.

In settling on a more clearly defined plan for the size and structure of the fleet, Navy and DoD officials will be conscious of certain things. One of these is the federal budget situation. The budget deficits now being projected are large enough that they may dampen down the rate of real growth in defense spending.

A second factor will be the Navy’s current efficiency initiatives, which are intended to generate savings that can be applied to Navy investment programs. Although the services, as an incentive for generating savings, are supposed to be able to retain them for their own purposes, the potential need to fund increases in Anny end strength, plus the potential additional costs for implementing the Army’s new transformation plan, may result in pressure to effectively transfer some of the Navy’s savings to the Army.

A third factor will be potential costs for new acquisition programs. One of these is the DD(X), where there are reasons to be concerned that the unit procurement cost might tum out to be substantially higher than now estimated by the Navy. A second is the LCS program, whose total scope and cost at this point is still very open-ended. And a third are amphibious and maritime prepositioning ships for implementing the new sea basing concept. The potential costs of these ships, also, are unclear right now. Confronted with the uncertain costs of these programs, Navy and DoD officials may be hesitant to commit more than a certain amount of funding to other Navy programs, such as submarines.

And a fourth factor that Navy and DoD officials will be conscious of are new basing, crewing, and deployment concepts, like additional forward homeportingand Sea Swap, that can substantially reduce the amount of force structure needed to maintain a given number of ships in overseas operating areas.

These factors, taken together, suggest a potential for a new plan for the Navy that is perhaps not significantly larger than the old 310-ship plan, and possibly smaller than 300 ships. It has been reported, for example, that the Navy wants to reduce the number of ESGs from the current 12 down to as few as 8, that the DD(X) procurement run may be reduced from 24 down to as few as 9, and, as everyone in this room is probably well aware, that the attack submarine force-level goal might be reduced from the current 55 down to as few as 3 7. The potential reduction in the attack submarine number reportedly is based in part on shifting some submarine ISR missions to other platforms, and on forward homeporting up to 9 attack submarines at Guam.

At a recent conference in New Orleans, one shipbuilding industry official raised the possibility that the submarine number might wind up being somewhere in the range of 40 to 50. This official also mentioned a figure of 8 to 12 ESGs, and figure of 10 to 12 carrier strike groups.

All of this is to note that if the submarine number is reduced, it may be part of a new plan that reduces other parts of the Navy as well. The fact that other parts of the Navy are being reduced wouldn’t necessarily make a reduction in the submarine number any more or less correct, but it might make it more difficult for submarine supporters to convince others that submarines are being treated unfairly.

My second point concerns the potential implications of a reduced attack submarine force-level goal on the downstream submarine procurement rate. As you can see on this slide, if the attack submarine force-level goal turns out to be 40, excluding SSGNs, then in the nearer term, the Navy might have the option of procuring 1 submarine, or none at all, in FY09, and of continuing to procure I per year through FYll or FY12. By the same token, however, even if the submarine goal is reduced to 40, the Navy would still need to procure an average of 2 submarines per year between about FY12 and about FY24. The bottom line, in other words, is that even though a force-level goal of 40 could permit the start of 2-per-year procurement to be deferred for a few years, it would still require procurement to be increased after that to an average rate of 2 per year for a period of about a dozen years. These numbers, moreover, assume that 688s remain in service for 33 years. If high optempo reduces service lives to less than 33 years, then procurement might need to be increased.

My third point concerns the ways in which ships are now being budgeted for acquisition. This slide lists the various kinds of ships being procured now, or scheduled for procurement later in the FYDP. What it shows is how budgeting for ship acquisition, which used to be fairly uniform, has now become more complex and varied from class to class.

The Virginia class is the first program listed, and as you can see in the first column, this program uses the traditional full funding approach, under which the entire procurement cost of the platform is to be funded in the shipbuilding account in the year of procurement. And as shown in the second column, in the case of the Virginia class, the procurement cost includes the cost of the ship’s fuel, which increases the procurement cost of the ship by something close to 7%. The combination of these two features-the use of full funding in the highly visible shipbuilding account, and the inclusion of fuel costs in the ship’s procurement cost-is true of no other kind of ship.

As you can see in the third column, a number of other programs are using formal or de facto incremental funding, or have the option of using it. As shown in the fourth column, the lead DD(X) and lead LCS are to be funded in the R&D account, making their total construction cost less visible. As shown in the fifth column, LCS payload modules, which form a major part of the total LCS program cost, are to be funded in the Other Procurement account, which shifts those costs to a less visible account. And as shown in the final column, 3 or 4 classes of auxiliary ships are to be funded in the National Defense Sealift Fund, making those costs less visible.

If spreading the procurement cost of a ship over several years, or transferring a ship’s procurement cost out of the highly visible shipbuilding account, make it easier to gain approval for procuring the ship, then submarine supporters have reason to be concerned that their platform is presented in a less advantageous way than several other kinds of ships.

Short of returning to a uniform policy of fully funding all ships in the shipbuilding account, one option for partly addressing this situation would be to shift nuclear fuel costs from the shipbuilding account to the Other Procurement account. That wouldn’t make a huge difference in the submarine’s procurement cost, but it would at least equalize the treatment of submarines and carriers compared to other ships in terms of whether fuel costs are included in the ship’s procurement cost as it appears in the shipbuilding account.

My fourth point concerns unmanned vehicles and the analysis of submarine missions. Navy officials, when asked about future requirements for submarines, have noted the potential for submarine-launched UUV s to perform JSR missions that are now done by attack submarines themselves. There has also been discussion in the press about shifting JSR missions from submarines to satellites.

There’s nothing wrong about exploring the potential for using UUV s or satellites to perform missions now performed by submarines. But if you’re going to do that, it would also appear prudent to do the obverse by exploring the potential for submarines equipped with UVs to perform missions that are now performed by other platforms.

One possible area to explore concerns the potential for submarines, if equipped with UA Vs, to perform overhead and deep-inland JSR missions now performed by satellites or by manned aircraft or U AV s that are based on land or surface ships. Submarines equipped with UA Vs might have certain advantages for performing such missions:

• Compared to satellites, a submarine-launched UAV offers greater persistence over the target and less predictability about when the observations will be made
• Compared to manned aircraft or UAVs that are launched from in-theater land bases, using a submarine-launched UAV avoids the problem of overseas base access and host-nation limits on use. It also reduces the risk that an enemy agent will observe the launch and warn the ISR target about the approaching aircraft
• Compared to UAVs launched from land bases in the United States, a submarine-launched UAV would have a shorter flight time to the ISR target area, which could be important for observing transitory ISR targets. It could also be smaller than a U.S.-based UAV, making it potentially less expensive and harder to detect and shoot down
• And compared to a UAV-equipped surface ship, a UAV-equipped submarine is less likely to be noticed in region, reducing the chance that the JSR target will anticipate a UAV mission and take steps to counter its effectiveness.

Another area to examine concerns using submarine-launched UUVs for littoral missions now allocated to other platforms. Submarine-launched UUV scan be used for detecting and countering mines and enemy submarines in littoral waters, and in some ways might be able to do so better than surface ships or unmanned vehicles launched from surface ships

The LCS has been allocated certain missions, including littoral MCM and ASW, but the Navy has acknowledged that, prior to announcing the start of the LCS program, it did not perform a formal analysis of multiple concepts to show that a ship like the LCS would be the best way to perform these missions. The Navy argued recently that the LCS reflects 14 years of operational lessons learned from naval deployments to the Persian Gulf since the time of Desert Storm, and that such lessons can provide “a clarity that might be even better than a study we can conduct here in Washington, DC.

Lessons from past operations are certainly important. They can certainly demonstrate a need for having additional capability for performing certain missions. But in a time of transformation, with the Navy incorporating new technologies, including unmanned vehicles, as well as new operational concepts, whether the past operations of a pre-transformation fleet can form a conclusive basis for intuitively knowing how to best provide that additional capability in a transformational future is another issue. You can’t have it both ways: You can’t argue, on the one hand, that the Navy is transforming, and that the LCS is transformational, and at the same time argue that the correctness of the LCS as the best possible approach is validated by the technologies and operational concepts of the old, pre-transformation fleet.

As for views regarding the value of doing fonnal studies here in Washington, the current situation reminds me of the famous line from the 1948 movie, The Treasure of the Sierra Madre.

Where you see the word badges, substitute the tenn formal studies.

The Navy has long been proud of its role in establishing the field of operations research in this country around 60 years ago, during a period of profound wartime urgency. Consequently, for the Navy to argue today that studies are perhaps not so important to the acquisi-tion process, and that there isn’t enough time to do one before embarking on a program costing billions of dollars, is rather extraordinary. I suppose one could say it’s an example of transfor mation.

As a counter example, you might recall it was only 4 or 5 years ago when senior Navy officials, citing decades of operational experience, argued that the range at Vieques was a critical, unique, and irreplaceable asset for training deploying battle groups, and that closing Vieques would therefore have significant consequences for Navy readiness. That argument was made repeatedly.

And then a funny thing happened: The Secretary of the Navy directed the Center for Naval Analyses, which is based in the Washington area, to do a formal study on potential alternatives to Vieques-altematives that had been dismissed repeatedly in the debate up to that point. And guess what? The study identified an alternative approach that would rely on using multiple sites rather than a single site. The Navy has now adopted this general approach, and Navy officials are expressing satisfaction with it, arguing that the training it is providing is as good as, and in some respects even better than, the training that was provided at Vieques. So studies done here in Washington can in fact sometimes overturn deeply held views based on operational experience going back many years.

It has been argued, correctly, that paper analyses by themselves cannot prove that a proposed platform or weapon is the right way to go. But they can test key assumptions behind proposed programs, and force advocates of those programs to confront potentially inconvenient questions they might have been inclined to skip over, or perhaps weren’t even aware of.

I want to be clear: I’m not saying that LCS isn’t the best way to perform these missions, or isn’t a good program to pursue. It very well might be. But taxpayers could have more confidence in that if the LCS were assigned its missions following a competitive analysis conducted by a neutral party in which advocates of alternative approaches for performing these missions, including submarines, have a chance make their best case.

The point is that, when it comes to the effect that unmanned vehicles can have on submarine roles and missions, things can cut both ways. If the focus in a submarine mission analysis is primarily on how submarine-launched UUVs can reduce requirements for submarines, and less on how submarine launched unmanned vehicles could in other ways increase requirements for submarines, then submarine supporters have grounds for arguing that the study in question is not so much an analysis of attack submarine requirements as it is an exercise directed at knocking down the attack submarine force-level goal.

My fifth topic is submarine R&D, and here I want to make two points. The first, which grows out of what I just said, is that a potential key focus for submarine R&D in future years might be developing submarine-launched UAVs for carrying out overhead and deep-inland ISR missions.

The submarine community has experimented with UAVs as far back as ’96, and initial concepts have been drawn up for submarine-launched UAVs, but it’s not clear that there has been much focused work in this area beyond this. Developing such a capability could be important not only in terms of maximizing the potential cost effectiveness of submarines, but in terms of optimizing investments in the overall constellation of U.S. JSR assets.

The second point concerns general approaches for funding submarine R&D. One approach, articulated in the 90s, is to maintain a certain minimum level of funding for submarine R&D each year. This steady-funding approach was advocated in reaction to an earlier period of intermittent funding for submarine R&D that reflected periodic efforts to design new submarine classes.

Given the increasing interval between submarine classes, observers believed this approach, if continued, would produce an insufficiently stocked cupboard for supporting future submarine design efforts when they did arise. The rationale for the steady-funding approach was to make sure that, when policymakers opened up the submarine technology cupboard in search of solutions to an emergent problem, the cupboard would not be bare, but instead would offer a selection of potentially useful ideas ready for rapid implementation.

When asked about the steady-funding approach earlier this year, the CNO responded rather unenthusiastically, and outlined an alternative approach under which annual funding for submarine R&D instead is an outcome of specific tasks to be done that year for specific purposes.

This raises the following questions: If the logic of maintaining a certain minimum annual level of funding made sense to policymakers a few years ago, why does it not make sense now? Similarly, if a task-oriented funding approach was viewed a few years ago as one that would produce an insufficiently stocked technology cupboard, why is it not viewed that way today? And with the new focus on capabilities-based planning, spiral development, and reducing acquisition cycle time, has maintaining a sufficiently stocked technology cupboard between class design efforts become less important, or more?

The aircraft and missile sectors are now grappling with chal-lenges that can arise when older engineers-who have many development projects under their belts, and consequently a lot of unwritten wisdom in their heads-retire and are replaced by younger engineers who have worked on many fewer projects and conse-quently may have accumulated less of that wisdom. If submarine R&D is funded under the task-oriented approach in coming years, will a similar problem arise in the submarine community when the older submarine designers and engineers retire?

It’s not that the steady-funding approach is right and the task-oriented approach is wrong. Both approaches have merits, and the task-oriented approach has particular merits in a time of constrained funding. But funding was also constrained in the 90s, when the steady-funding approach was articulated. If the pendulum now swings back too far toward the task-oriented approach, is there going to be a hearing years from now in which the problems of that approach are once again lamented?

My last point is to outline some of the elements that might be included in an integrated approach to the situation regarding submarines. The slide shows those elements. This is by no means everything that would be included in such an approach. It’s simply a partial list that mostly picks up on the points I’ve been making. As you can see, there are items here for both submarine supporters and for those who have to concern themselves with other platfonns. For submarine supporters, things to consider include:

• first, the potential for satellites and submarine-launched UUVs to reduce requirements for submarines to per-fonn certain ISR missions,
• second, the potential for additional forward homeporti-ng at Guam to reduce requirements for submarines,
• third, the potential for multiple crewing, as suggested by CBO a couple of years ago, to reduce requirements for submarines,
• and fourth, the potential feasibility of extending the service life of Virginia-class boats to about 40 years, which might well require returning to the concept of mid-life refueling, but which could also permit a given procurement rate to maintain a higher force level over the long run.

And for those who have to concern themselves with other platforms, and with limits on total funding, things to consider include the following:

• first, the potential for submarine-launched UAVs to increase requirements for submarines by having them perform some overhead and deep-inland ISR missions now done by satellites and aircraft,
• second, the potential for submarine-launched UUV s to increase requirements for attack submarines by having them perform some littoral ASW and MCM missions now allocated to surface ships,
• third, the potential need for funding the development of submarine-launched UA Vs, and for making sure that the submarine technology cupboard is sufficiently stocked,
• and fourth, a procurement rate that is consistent with the force-level goal. As I mentioned earlier, even if the force-level goal is reduced to 40, an average rate of 2 boats per year will at some point need to be maintained for a number of years, assuming a 33-year life for the 688s.

An integrated approach that includes elements like these might make for an efficient and effective way ahead. I offer it as an option to consider. Thank you.