Captain Jabaley is the Virginia-class program manager.
Republished with permission from the June 2011 issue of PROCEEDINGS a monthly publication of the U.S. Naval Institute of Annapolis, M01yla11d 21402.
The “2 for 4 in ’12” cost-reduction effort Rear Admiral Butler discusses here reduced the unit acquisition cost of the Virginia- class submarines by almost 20 percent while ensuring operating and support (O&S) costs would remain at least constant. In 2008, as my predecessor, Rear Admiral Dave Johnson, handed over the program to me, the challenge became broader-to analyze total ownership cost (TOC) and determine how best to reduce it.
That year, it became increasingly evident that the Navy was experiencing a TOC increase chiefly because of cost increases in O&S. The Navy chartered a reduction of total ownership cost (RTOC) pilot program under the leadership of Admiral Patrick M. Walsh, the Vice Chief of Naval Operations, and the Assistant Secretary of the Navy for Research, Development, and Acquisition Sean J. Stackley, selecting four acquisition programs as pilots. As one that already had a proven framework for reducing acquisition cost, the Virginia program was a logical choice.
Since then, the program has expanded that framework to include all stakeholders in TOC, a much broader and more difficult endeavor than focusing solely on acquisition cost. Based on a validated analysis of the cost drivers, the program has settled on depot-level maintenance as the most significant contributor to O&S cost, and focused approximately 75 percent of the RTOC effort on reducing that maintenance.
This extended culture and unprecedented business model provide a broader perspective of maintenance drivers to ensure that select components and systems are redesigned with increased sensitivity to maintenance objectives. This effort also offers an opportunity to lay the groundwork for the next evolution in the Virginia-class lifecycle maintenance plan (LCMP).
By reducing the amount of depot-level maintenance, the Virginia program can return man-days to the Fleet while allowing for a re-prioritization of that capacity. In addition, even with the increased construction rate of Virginia-class submarines, the decommissioning rate of the Los Angeles class will result in a decrease in the number of SSNs below 48 in the 2020s, calling for an effort to improve operational availability to support the combatant commanders. A depot-level maintenance reduction will allow additional deployments, thereby diminishing the impact when the Navy falls below the 48-SSN requirement.
The Virginia-class RTOC project stood up in February 2009 and focuses on submarines procured in the Block IV contract (authorized in Fiscal Years 2014-18). The key to this project is a plan for how to transition the current LCMP from 72-month operating cycles with 4 major depot availabilities and 14 deployments over a 33-year ship life, to a Block IV and forward plan of 96-month operating cycles with 3 major depot availabilities and 15 deployments over the same ship life. Although this plan includes much more than just those goals, for simplicity it has been labeled 3: 15 to reflect the main targets of 3 depot-level availabilities and 15 deployments.
A submarine-class LCMP evolution is not new. For example, the Los Angeles-class plan has evolved three times from initial development in 1974, starting as a 24-month operating interval, 70-month operating cycle plan with 11 depot availabilities (8 minor and 3 major) and 12 deployments, to the new plan with a 72-month operating interval and 120-month operating cycle with 6 depot availabilities (4 minor and 2 major) and 15 deployments.
An operating cycle is the time between overhauls/major depot availabilities, while an operating interval is the time between any depot availabilities and is a specified period only for submarine life cycles that employ both minor and major depot availabilities, such as the Los Angeles class. With the exception of post-shakedown availabilities, all Virginiadass availabilities are major, and therefore operating intervals are not specified. A minor depot availability is less than six months; a major is greater than six months.
Each evolution was accomplished through analysis of maintenance documentation and performance histories to determine which inspections or preventive maintenance could be performed less frequently or eliminated, thus allowing for longer periods between depot availabilities and less maintenance. In each case data were already available on-the-shelf to support revisions.
How is the Virginia- class evolution different? First, it took the Los Angeles class 35 years to extend the LCMP operating interval to 72 months. The Virginia class achieved this benchmark in five years. The second key difference is that the project is not working from on-the-shelf data. Rather, the Virginia-class RTOC project will continue to take advantage of opportunities to accelerate the process. This will be done by employing the same analysis process used in previous LCMP evolutions, which will then identify systems or components that are not likely to perform as needed with a 96-month operating cycle and will use that information to develop near-term mitigation plans.
In addition, long-term events will be scheduled to review maintenance documentation and performance histories to ensure that the data support the extended operating cycle. Far from just-in-time, the analysis by the Virginia-class Block IV RTOC project can result in the new LCMP becoming effective on delivery of the first Block IV ship, the SSN-792, in 2019.
Acceleration of maintenance cannot be accomplished by sacrificing technical rigor. Specific studies are chartered either in delivered ships or in the laboratory to assess the ability to extend time between maintenance. As with the 2 for 4 in ’12 efforts, the Navy will make investments in system redesigns and lifecycle maintenance processes to reach 3: 15. But the return on this investment will be obvious.
In terms of cost, the value returned to the Fleet associated with eliminating one depot availability from the 12 remaining ships of the 30-ship Virginia class can be determined based on the cost of USS VIRGINIA (SSN-774) depot availability now in progress. That will cost just under $120 million, making the return on investment from one fewer availability for 12 ships roughly $1.4 billion in FY 10 dollars, equivalent to a 10 percent reduction of average annual O&S cost over the life of those 12 ships. A concurrent benefit results from improved operational availability.
Each of the 12 ships will be able to complete one additional deployment over the course of their 33-year lives. In effect, those 12 extra deployments provide the Navy with operational availability nearly equivalent to one additional SSN.
The Virginia class has become a model for program cost control and reduction. Vice Admiral Kevin McCoy, Commander, Naval Sea Systems Command, recently cited examples of cost-reduction efforts, summing up by saying, “Under every rock that gets turned over in these cost-reduction efforts there’s been money.” The Virginia-class program will continue to look under every rock.