NAVY VIRGINIA (SSN-774) CLASS ATTACKS UBMARINE PROCUREMENT: BACKGROUND AND ISSUES FOR CONGRESS

CONGRESSIONAL RESEARCH SERVICE

Summary

The Navy has been procuring Virginia (SSN-774) class nu-clear-powered attack submarines since FY1998. The two Virginia-class boats requested for procurement in FY2015 are to be the 21st and 22nd boats in the class. The 10 Virginia-class boats programmed for procurement in FY2014-FY2018 (two per year for five years) are being procured under a multiyear-procurement (MYP) contract.

The Navy estimates the combined procurement cost of the two Virginia-class boats requested for procurement in FY2015 at $5,288.7 million or an average of $2,644.3 million each. The boat shave received a total of $1,577.0 million in prior-year advance procurement (AP) funding and $158.4 million in prior-year Economic Order Quantity (EOQ) funding. The Navy’s proposedFY2015 budget requests the remaining $3,553.3 million needed to complete the boats’ estimated combined procurement cost. The Navy’s proposed FY2015 budget also requests $1,649.5 in AP funding and $680.8 million in EOQ funding for Virginia-class boats to be procured in future fiscal years, bringing the total FY2015 funding request for the program (excluding outfitting and post-delivery costs) to $5,883.6 million. EOQ funding is a common feature in the initial years of an MYP contract.

The Navy’s proposed FY2015 budget also requests $132.6 million in research and development funding for the Virginia Payload Module (VPM). The funding is contained in Program Element (PE) 0604580N, entitled Virginia Payload Module (VPM), which is line 123 in the Navy’s FY2015 research and development account.

DOD and the Navy are considering whether to build Virginia-class boats procured in FY2019 and subsequent years with an additional mid-body section, called the Virginia Payload Module(VPM), that contains four large-diameter, vertical launch tubes that the boats would use to store and fire additional Tomahawk cruise missiles or other payloads, such as large-diameter unmanned underwater vehicles (UUVs). The Navy estimates that building Virginia-class boats with the VPM might increase their unit procurement costs by about 13%. It would increase the total number of torpedo-sized weapons (such as Tomahawks) that they could carry by about 76%.

The Navy’s FY2015 30-year SSN procurement plan, if implemented, would not be sufficient to maintain a force of 48 SSNs consistently over the long run. The Navy projects under that plan that the SSN force would fall below 48 boats starting in FY2025, reach a minimum of 41 boats in FY2028-FY2030, and remain below 48 boats through FY2034.

Potential issues for Congress regarding the Virginia-class program include the following:

– the Virginia-class procurement rate in coming years, particularly in the context of the SSN shortfall projected for FY2025-FY2034 and the larger debate over future U.S. defense strategy and defense spending; and
– Virginia-class program issues raised in a January 2014 report from DOD’s Director, Operational Test and Evaluation (DOT&E).

The Navy’s Ohio Replacement (SSBN[X]) ballistic missile submarine program is discussed in CRS Report R41129, Navy Ohio Replacement (SSBN[X]) Ballistic Missile Submarine Program.

Introduction

This report provides background information and issues for Congress on the Virginia-class nuclear-powered attack submarine (SSN) program. The Navy’s proposed FY2015 budget requests$5,883.6 million in procurement, advance procurement (AP), and Economic Order Quantity (EOQ) funding for the program. Decisions that Congress makes on procurement of Virginia-class boats could substantially affect U.S. Navy capabilities and funding requirements, and the U.S. shipbuilding industrial base.

The Navy’s Ohio Replacement (SSBN[X]) ballistic missile submarine program is discussed in another CRS report.

Background

U.S. Navy Submarines

The U.S. Navy operates three types of submarines—nuclear-powered ballistic missile submarines (SSBNs),3 nuclear-powered cruise missile and special operations forces (SOF) submarines(SSGNs),4 and nuclear-powered attack submarines (SSNs). The SSNs are general-purpose submarines that perform a variety of peacetime and wartime missions, including the following:

– covert intelligence, surveillance, and reconnaissance (ISR), much of it done for national-level (as opposed to purely Navy) purposes;
– covert insertion and recovery of SOF (on a smaller scale than possible with the SSGNs);
– covert strikes against land targets with the Tomahawk cruise missiles (again on a smaller scale than possible with the SSGNs);
– covert offensive and defensive mine warfare;
– anti-submarine warfare (ASW); and
– anti-surface ship warfare.

During the Cold War, ASW against the Soviet submarine force was the primary stated mission of U.S. SSNs, although covert ISR and covert SOF insertion/recovery operations were reportedly important on a day-to-day basis as well. In the post-Cold War era, although anti-submarine warfare remains a mission, the SSN force has focused more on performing the other missions noted on the list above.

Attack Submarine Force Levels

Force-Level Goal

The Navy wants to achieve and maintain a fleet in coming years of 306 ships, including 48 SSNs. For a review of SSN force level goals since the Reagan Administration, see Appendix A.

Force Level at End of FY2013

The SSN force included more than 90 boats during most of the 1980s, when plans called for achieving a 600-ship Navy including 100 SSNs. The number of SSNs peaked at 98 boats at the end of FY1987 and has declined since then in a manner that has roughly paralleled the decline in the total size of the Navy over the same time period. The 54 SSNs in service at the end of FY2013 included the following:

– 41 Los Angeles (SSN-688) class boats;
– 3 Seawolf (SSN-21) class boats; and
– 10 Virginia (SSN-774) class boats.

Los Angeles- and Seawolf-Class Boats

A total of 62 Los Angeles-class submarines, commonly called 688s, were procured between FY1970 and FY1990 and entered service between 1976 and 1996. They are equipped with four 21-inch diameter torpedo tubes and can carry a total of 26 torpedoes or Tomahawk cruise missiles in their torpedo tubes and internal magazines. The final 31 boats in the class (SSN-719 and higher) are equipped with an additional 12 vertical launch system (VLS) tubes in their bows for carrying and launching another 12 Tomahawk cruise missiles. The final 23 boats in the class (SSN-751 and higher) incorporate further improvements and are referred to as Improved Los Angeles class boats or 688Is. As of the end of FY2013, 21 of the 62 boats in the class had been retired.

The Seawolf class was originally intended to include about 30 boats, but Seawolf-class procurement was stopped after three boats as a result of the end of the Cold War and associated changes in military requirements. The three Seawolf-class submarines are the Seawolf (SSN-21), the Connecticut (SSN-22), and the Jimmy Carter (SSN-23). SSN-21 and SSN-22 were procured in FY1989 and FY1991 and entered service in 1997 and 1998, respectively. SSN-23 was originally procured in FY1992. Its procurement was suspended in 1992 and then reinstated inFY1996. It entered service in 2005. Seawolf-class submarines are larger than Los Angeles-class boats or previous U.S. Navy SSNs. They are equipped with eight 30-inch-diameter torpedo tubes and can carry a total of 50 torpedoes or cruise missiles. SSN-23 was built to a lengthened configuration compared to the other two ships in the class.

Virginia (SSN-774) Class Program

General

The Virginia-class attack submarine was designed to be less expensive and better optimized for post-Cold War submarine missions than the Seawolf-class design. The Virginia class design is slightly larger than the Los Angeles-class design, but incorporates newer technologies. Virginia-class boats currently cost about $2.8 billion each to procure. The first Virginia-class boat entered service in October 2004.

Past and Projected Annual Procurement Quantities

shows annual numbers of Virginia-class boats pro-cured from FY1998 (the lead boat) through FY2014, and numbers scheduled for procurement under the FY2015-FY2019 Future Years Defense Plan (FYDP).

Multiyear Procurement (MYP)

The 10 Virginia-class boats shown in Table 1 for the period FY2014-FY2018 (referred to as the Block IV boats) are being procured under a multiyear procurement (MYP) contract10 that was approved by Congress as part of its action on the FY2013 budget, and awarded by the Navy on April 28, 2014. The eight Virginia-class boats procured in FY2009-FY2013 (the Block III boats) were procured under a previous MYP contract, and the five Virginia-class boats procured in FY2004-FY2008 (the Block II boats) were procured under a still-earlier MYP contract. The four boats procured in FY1998-FY2002 (the Block I boats) were procured under a block buy contract, which is an arrangement somewhat similar to an MYP contract. The boat procured in FY2003 fell between the FY1998-FY2002 block buy contract and the FY2004-FY2008 MYP arrangement, and was contracted for separately.

Joint Production Arrangement

Virginia-class boats are built jointly by General Dynamics’ Electric Boat Division (GD/EB) of Groton, CT, and Quonset Point, RI, and Newport News Shipbuilding (NNS), of Newport News, VA, which forms part of Huntington Ingalls Industries (HII). Under the arrangement, GD/EB builds certain parts of each boat, NNS builds certain other parts of each boat, and the yards take turns building the reactor compartments and performing final assembly of the boats. GD/EB is building the reactor compartments and performing final assembly on boats 1, 3, and so on, while NNS is doing so on boats 2, 4, and so on. The arrangement results in a roughly 50-50 division of Virginia-class profits between the two yards and preserves both yards’ ability to build submarine reactor compartments (a key capability for a submarine-construction yard) and perform submarine final-assembly work.

Cost-Reduction Effort

The Navy states that it achieved a goal of reducing the pro curement cost of Virginia-class submarines so that two boats could be procured in FY2012 for combined cost of $4.0 billion inconstant FY2005 dollars—a goal referred to as “2 for 4 in 12.” Achieving this goal involved removing about $400 million (in constant FY2005 dollars) from the cost of each submarine. (The Navy calculates that the unit target cost of $2.0 billion in constant FY2005 dollars for each submarine translates into about $2.6 billion for a boat procured in FY2012.)

Virginia Payload Module (VPM)

DOD and the Navy are considering building Virginia-class boats procured in FY2019 and subsequent years (i.e., the anticipated Block V and beyond boats) with an additional mid-body section, called the Virginia Payload Module (VPM). The VPM, reportedly about 70 feet in length15 (earlier design concepts for the VPM were reportedly about 94 feet in length),16 contains four large-diameter, vertical launch tubes that would be used to store and fire additional Tomahawk cruise missiles or other payloads, such as large-diameter unmanned underwater vehicles (UUVs).

The four additional launch tubes in the VPM could carry a total of 28 additional Tomahawk cruise missiles (7 per tube),18which would increase the total number of torpedo-sized weapons (such as Tomahawks) carried by the Virginia class design from about 37 to about 65—an increase of about 76%.

Building Virginia-class boats with the VPM would compensate for a sharp loss in submarine force weapon-carrying capacity that will occur with the retirement in FY2026-FY2028 of the Navy’s four Ohio-class cruise missile/special operations forces support submarines (SSGNs).20 Each SSGN is equipped with 24 large-diameter vertical launch tubes, of which 22 can be used to carry up to 7 Tomahawks each, for a maximum of 154 vertically launched Tomahawks per boat, or 616 vertically launched Tomahawks for the four boats. Twenty-two Virginia-class boats built with VPMs could carry 616 Tomahawks in their VPMs. The Navy estimates that adding the VPM would increase the procurement cost of the Virginia class design by $350 million in current dollars, or by about 13%.

FY2015 Funding Request

The Navy estimates the combined procurement cost of the two Virginia-class boats requested for procurement in FY2015 at $5,288.7 million or an average of $2,644.3 million each. The boat shave received a total of $1,577.0 million in prior-year advance procurement (AP) funding and $158.4 million in prior-year Economic Order Quantity (EOQ) funding. The Navy’s proposedFY2015 budget requests the remaining $3,553.3 million needed to complete the boats’ estimated combined procurement cost. The Navy’s proposed FY2015 budget also requests $1,649.5 million in AP funding and $680.8 million in EOQ funding for Virginia-class boats to be procured in future fiscal years, bringing the total FY2015 funding request for the program (excluding outfitting and post-delivery costs) to $5,883.6 million. EOQ funding is a common feature in the initial years of an MYP contract.

Submarine Construction Industrial Base

In addition to GD/EB and NNS, the submarine construction industrial base includes scores of supplier firms, as well as laboratories and research facilities, in numerous states. Much of the total material procured from supplier firms for the construction of submarines comes from single or sole source suppliers. Observers in recent years have expressed concern for the continued survival of many of these firms. For nuclear-propulsion component suppliers, an additional source of stabilizing work is the Navy’s nuclear-powered aircraft carrier construction program.22 In terms of work provided to these firms, a carrier nuclear propulsion plant is roughly equivalent to five submarine propulsion plants.

Much of the design and engineering portion of the submarine construction industrial base is resident at GD/EB. Smaller portions are resident at NNS and some of the component makers.

Several years ago, some observers expressed concern about the Navy’s plans for sustaining the design and engineering portion of the submarine construction industrial base. These concernsappear to have receded, in large part because of the Navy’s plan to design and procure a next generation ballistic missile submarine called the Ohio Replacement Program or SSBN(X).

Projected SSN Shortfall

Size and Timing of Shortfall

The Navy’s FY2015 30-year SSN procurement plan, if im-plemented, would not be sufficient to maintain a force of 48 SSNs consistently over the long run. As shown in Table 2, the Navyprojects under the plan that the SSN force would fall below 48 boats starting in FY2025, reach a minimum of 41 boats in FY2028-FY2030, and remain below 48 boats through 2034. Since the Navy plans to retire the four SSGNs by 2028 without procuring any replacements for them, no SSGNs would be available in 2028 and subsequent years to help compensate for a drop in SSN force level below 48 boats.

The projected SSN shortfall has been discussed in CRS reports and testimony since 1995.

2006 Navy Study on Options for Mitigating Projected Shortfall

The Navy in 2006 initiated a study on options for mitigating the projected SSN shortfall. The study was completed in early 2007 and briefed to CRS and the Congressional Budget Office(CBO) on May 22, 2007. At the time of the study, the SSN force was projected to bottom out at 40 boats and then recover to 48 boats by the early 2030s. Principal points in the Navy study(which cite SSN force-level projections as understood at that time) include the following:

– The day-to-day requirement for deployed SSNs is 10.0, meaning that, on average, a total of 10 SSNs are to be de-ployed on a day-to-day basis.

– The peak projected wartime demand is about 35 SSNs deployed within a certain amount of time. This figure in-cludes both the 10.0 SSNs that are to be deployed on a day-to-day basis and 25 additional SSNs surged from the United States within a certain amount of time.

– Reducing Virginia-class shipyard construction time to 60 months—something that the Navy already plans to do as part of its strategy for meeting the Virginia class cost-reduction goal (see earlier discussion on cost-reduction goal)—will increase the size of the SSN force by two boats, so that the force would bottom out at 42 boats rather than 40.

– If, in addition to reducing Virginia-class shipyard construc-tion time to 60 months, the Navy also lengthens the service lives of 16 existing SSNs by periods ranging from 3 months to 24 months (with many falling in the range of 9 to 15 months), this would increase the size of the SSN force by another two boats, so that the force would bottom out at 44 boats rather than 40 boats.28 The total cost of extending the lives of the 16 boats would be roughly $500 million in con-stant FY2005 dollars.

– The resulting force that bottoms out at 44 boats could meet the 10.0 requirement for day-to-day deployed SSNs throughout the 2020-2033 period if, as an additional option, about 40 SSN deployments occurring in the eight-year pe-riod 2025-2032 were lengthened from six months to seven months. These 40 or so lengthened deployments would rep-resent about one-quarter of all the SSN deployments that would take place during the eight-year period.

– The resulting force that bottoms out at 44 boats could not meet the peak projected wartime demand of about 35 SSNs deployed within a certain amount of time. The force could generate a total deployment of 32 SSNs within the time in question—3 boats (or about 8.6%) less than the 35-boat fig-ure. Lengthening SSN deployments from six months to seven months would not improve the force’s ability to meet the peak projected wartime demand of about 35 SSNs de-ployed within a certain amount of time.

– To meet the 35-boat figure, an additional four SSNs beyond those planned by the Navy would need to be procured. Pro-curing four additional SSNs would permit the resulting 48-boat force to surge an additional three SSNs within the time in question, so that the force could meet the peak projected wartime demand of about 35 SSNs deployed within a cer-tain amount of time.

– Procuring one to four additional SSNs could also reduce the number of seven-month deployments that would be required to meet the 10.0 requirement for day-to-day deployed SSNs during the period 2025-2032. Procuring one additional SSN would reduce the number of seven-month deployments dur-ing this period to about 29; procuring two additional SSNs would reduce it to about 17, procuring three additional SSNs would reduce it to about 7, and procuring four addi-tional SSNs would reduce it to 2.

The Navy added a number of caveats to these results, including but not limited to the following:

– The requirement for 10.0 SSNs deployed on a day-to-day basis is a current requirement that could change in the future.
– The peak projected wartime demand of about 35 SSNs deployed within a certain amount of time is an internal Navy figure that reflects recent analyses of potential future wartime requirements for SSNs. Subsequent analyses of this issue could result in a different figure.
– The identification of 19 SSNs as candidates for service life extension reflects current evaluations of the material condi-tion of these boats and projected use rates for their nuclear fuel cores. If the material condition of these boats yearsfrom now turns out to be worse than the Navy currently projects, some of them might no longer be suitable for service life extension. In addition, if world conditions over the next several years require these submarines to use up their nu-clear fuel cores more quickly than the Navy now projects, then the amounts of time that their service lives might be extended could be reduced partially, to zero, or to less than zero (i.e., the service lives of the boats, rather than being extended, might need to be shortened).
– The analysis does not take into account potential rare events, such as accidents, that might force the removal of an SSN from service before the end of its expected service life.
– Seven-month deployments might affect retention rates for submarine personnel.

Issues for Congress

Virginia-Class Procurement Rate More Generally in Coming Years

One potential issue for Congress concerns the Virginia-class procurement rate in coming years, particularly in the context of the SSN shortfall projected for FY2025-FY2034 shown in Table 2 and the larger debate over future U.S. defense strategy and defense spending.

Mitigating Projected SSN Shortfall

In addition to lengthening SSN deployments to 7 months and extending the service lives of existing SSNs by periods ranging from 3 months to 24 months (see “2006 Navy Study on Optionsfor Mitigating Projected Shortfall” above), options for more fully mitigating the projected SSN shortfall include:

refueling a small number of (perhaps one to five) existing SSNs and extending their service lives by 10 years or more, and
putting additional Virginia-class boats into the 30-year shipbuilding plan.

It is not clear whether it would be feasible or cost-effective to refuel existing SSNs and extend their service lives by 10 or more years, given factors such as limits on submarine pressure hull life.

Larger Debate on Defense Strategy and Defense Spending

Some observers—particularly those who propose reducing U.S. defense spending as part of an effort to reduce the federal budget deficit—have recommended that the SSN force-level goal be reduced to something less than 48 boats, and/or that Virginia-class procurement be reduced. A June 2010 report from a group called the Sustainable Defense Task Force recommends a Navy of 230 ships, including 37 SSNs,31 and a September 2010 report from the Cato Institute recommends a Navy of 241 ships, including 40 SSNs. Both reports recommend limiting Virginia-classprocurement to one boat per year, as does a September 2010 report from the Center for American Progress. A November 2010 report from a group called the Debt Reduction Task Forcerecommends “deferring” Virginia-class procurement.34The November 2010 draft recommendations of the co-chairs of the Fiscal Commission include recommendations for reducing procurement of certain weapon systems; the Virginia-class program is not among them.

Other observers have recommended that the SSN force-level goal should be increased to something higher than 48 boats, particularly in light of Chinese naval modernization. The July 2010 report of an independent panel that assessed the 2010 Quadrennial Defense Review (QDR)—an assessment that is required by the law governing QDRs (10 U.S.C. 118)—recommends a Navy of 346 ships, including 55 SSNs. An April 2010 report from the Heritage Foundation recommends a Navy of 309 ships, including 55 SSNs.

Factors to consider in assessing whether to maintain, increase, or reduce the SSN force-level goal and/or planned Virginia-class procurement include but are not limited to the federal budget anddebt situation, the value of SSNs in defending U.S. interests and implementing U.S. national security strategy, and potential effects on the submarine industrial base.

As discussed earlier, Virginia-class boats scheduled for procurement in FY2014 are covered under an MYP contract for the period FY2014-FY2018. This MYP contract includes the procurement of two Virginia-class boats in FY2015. If fewer than two boats were procured in FY2015, the Navy might need to terminate the MYP contract and pay a cancellation penalty to the contractor.

Program Issues Raised in January 2014 DOT&E Report

Another oversight issue for Congress concerns Virginia-class program issues raised in a January 2014 report from the DOD’s Director, Operational Test and Evaluation (DOT&E)—DOT&E’sannual report for FY2013. Regarding the Virginia-class program, the report stated:

Assessment

The October 2013 DOT&E classified report details Vir-ginia’s ability to host NSW [Naval Special Warfare] mis-sions from a DDS [Dry Deck Shelter] and concluded the following:
Virginia class submarines are capable of hosting the DDS system.
Virginia class submarines can remain covert during NSW missions in some environments against some threat forces. Testing was not sufficient to fully evaluate the covertness of the class during DDS operations against expected threats. DOT&E’s report provided estimates for probability to re-main covert based on the data available. Furthermore, the Navy’s primary metric for assessing success in these mis-sions is a binary probability, which is infeasible to measure.
Operational testing was adequate for an assessment of the Virginia class submarine’s effectiveness and suitability for NSW missions using a DDS only against a low-end threat.
The Navy’s Commander, Operational Test and Evaluation Force (COTF) did not conduct test execution in accordance with the DOT&E-approved test plan. Specifically, COTF failed to collect positional data from the assigned simulated opposing forces, which limited the ability to assess covert-ness during these operations. Additionally, the testing did not provide data to address acoustic vulnerabilities during NSW operations using a DDS.

– The Virginia class submarine is suitable for NSW operations using a DDS; however, the Navy identified shortcomings in the Virginia class in testing.

Space limitations onboard the submarines restrict movement to and from the control room, which potentially impedes the ship’s ability to execute damage control procedures in the event a casualty occurs during NSW operations using a DDS.
During conditions of low visibility, including nighttime operations, Special Operations Force (SOF) members on the surface may have difficulty seeing the photonics mast of asubmerged submarine, which is used to guide the movement of the SOF as they return to the submarine.
The Navy made modifications to the SEAL Delivery Vehicle (SDV) Auxiliary Life Support System (ALSS) used in some DDS operations. These modifications allow for in-creased air pressure and as a result, more available man-hours to support missions. The Virginia class air supply sys-tem to pressurize the ALSS does not support operating at the higher pressures.
The May 2013 DOT&E report on Virginia’s operational capabilities in the Arctic and the Virginia’s susceptibility to low-frequency passive acoustic detection concluded that:
Testing was adequate for an assessment of effectiveness and suitability to support general Arctic operations and of the susceptibility of the submarine to detection by passive acoustic sensors. The Navy conducted the testing in accor-dance with the DOT&E-approved Test and Evaluation Master Plan and test plan but data were not available to conduct the desired quantitative assessment because the Navy did not retain the data following the testing.
Virginia class submarines are effective at supporting general operations in the Arctic but remain ineffective at ASW against some targets, which is unchanged from previ-ous testing reported on by DOT&E. During testing, the Vir-ginia class submarine was hampered with a failure of its sonar system’s TB-29 towed array. The failure of the towed-array affected the submarine’s performance because it provided the longest-range detections of acoustic contacts. However, these arrays are known to be fragile and do fre-quently fail during operations.
As part of the operational testing, an evaluation of the Depth-Encoded Ice-Keel Avoidance (IKA) mode of the Acoustic Rapid Commercial Off-the-Shelf Insertion (A-RCI) sonar system was included. Ice-keels extend down from the ice canopy above the submarine when operating in regions of the Arctic covered by ice. This Depth-Encoded IKA mode uses active sonar with the intention of providing operators with location, size, and depth of ice-keels so that the submarine can avoid colliding with them. The testing showed that the Depth-Encoded IKA is fundamentally limited by the precision to which a submarine can know the propagation path of the active sonar and as a result, the Depth-Encoded IKA is unable to achieve the threshold for accuracy established by the Navy.
Virginia class submarines are difficult to detect with low-frequency passive acoustic sensors. Like all other classes of U.S. submarines, when operating at high speeds Virginiaclass submarines become more susceptible to detection by passive acoustic sensors.
Virginia class submarines provide less Arctic capability than the Seawolf and improved Los Angeles class subma-rines. Some regions of the Arctic are characterized by tight vertical clearances between the shallow ocean floor below and the thick ice canopy above. Virginia lacks a hardened sail, and is therefore limited in the thickness of ice through which the submarine can safely surface.
The Virginia class submarine is operationally suitable for supporting general Arctic operations but suffers from some reliability shortcomings:
The IKA modes of the A-RCI sonar system reliability require improvement to support extended periods of chal-lenging under-ice operations. After a decade of develop-ment and fielding, no hardware or software variant of A-RCI has come close to the Navy’s reliability requirement, which is based on an operational need. More reliable sonar processing hardware is typically brought onboard because of the poor A-RCI reliability.
The common methods of removing carbon dioxide and hydrogen waste gas consistently failed during operations in the cold Arctic environment.

– The handling system for the Virginia class submarine’s Buoyant Cable Antenna, used for communications during operations under the ice canopy, is susceptible to freezing, preventing subsequent deployment or retrieval.

– The Virginia class submarine suffers from excessive con-densation in the cold Arctic environment. In general, this is an insulation problem since water vapor will condense onany surface with a temperature below the local dew point. Excessive condensation has the potential to cause problems with electronic systems.

DOT&E’s classified report on Virginia’s modernization FOT&E, issued in November 2012, concluded the following:
Virginia’s operational effectiveness is dependent on the mission conducted. The modernization of the sonar and fire control systems (A-RCI and AN/BYG-1) with the APB 09 software did not change (improve or degrade) the performance of the Virginia class for the missions tested. DOT&E’s assessment of mission effectiveness remains the same for ASW; Intelligence, Surveillance, and Reconnaissance; High-Density Contact Management; sit uational awareness; and Mine Avoidance. DOT&E’s overall assessment of Information Assurance remains unchanged from IOT&E, although the new software represents an im-provement in Information Assurance over previous systems.
Although Virginia was not effective for some of the missions tested, it remains an effective replacement for the Los Angeles class submarine, providing similar mission per-formance and improved covertness.
Testing to examine ASW-attack and situational awareness in high-density environments was adequate for the system software that was tested but not adequate for the softwareversion that the Navy fielded. After completion of operational testing, the Navy issued software changes intended to address the severe performance problems observed with the Wide Aperture Array. The Navy has not completed op-erational testing on the new software, which is fielded on deployed submarines. DOT&E assesses that the late fix of the array’s deficiencies is a result of the Navy’s schedule-driven development processes, which fields new increments without completing adequate developmental testing.
The Navy collected adequate data to assess the suitability of the sonar and fire control systems. Insufficient data were collected to reassess the suitability of Virginia’s hull, mechanical, electrical, or electronic systems; however, these data were not expected to demonstrate significantly different reliability compared to what was observed in IOT&E. Of note, the installation of the new APB 09 on Virginia’s A-RCI sonar system will degrade the reliability of the so-nar system on these submarines relative to what was demonstrated in the IOT&E.

Recommendations

Status of Previous Recommendations.

– The Navy has made progress in addressing 23 of the 30 recommendations contained in the November 2009 classified FOT&E report. Of the seven outstanding recommendations, thesignificant unclassified recommendations are:

1. Test against a diesel submarine threat surrogate in order to evaluate Virginia’s capability, detectability, and survivability against modern diesel-electric submarines.

2. Conduct an FOT&E to examine Virginia’s susceptibility to airborne ASW threats such as Maritime Patrol Aircraft and helicopters.

– The following recommendations from the FY12 Annual Report remain open and the Navy should work to address them in the upcoming fiscal year:

3. Coordinate the Virginia, A-RCI, and AN/BYG-1 Test and Evaluation Master Plans and utilize Undersea Enterprise Capstone documents to facilitate testing efficiencies.

4. Complete the verification, validation, and accreditation of the TSA method used for Virginia class Block III items.

5. Repeat the FOT&E event to determine Virginia’s susceptibility to low-frequency active sonar and the submarine’s ability to conduct Anti-Surface Warfare in a low-frequency activeenvironment. This testing should include a Los Angeles class submarine operating in the same environment to enable compari-son with the Virginia class.

• FY13 Recommendations. The Virginia DDS and Arctic reports generated 16 recommendations. The following are unclassified recommendations listed in the October 2013 FOT&E report. The Navy should:

1.Reconsider the metrics used to assess Virginia class subma-rine’s ability to covertly conduct mass swimmer lockout operations using the DDS.
2.Evaluate the possible acoustic vulnerabilities associated with SDV employment.
3.Seek additional evaluations of Virginia class operations with a DDS to improve understanding of deployment time for opera-tions and operationally evaluate covertness.
4.Confirm that the access to and from the Control Room during DDS operations meet the requirements of the Submarine Safety Program for accessibility and are sufficient to provide for adequate damage control in the event of casualties.
5.The Navy should investigate and implement methods to aid the SOF in identifying the submarine during operations in condi-tions of low visibility.
6.Investigate modifying the reducer in the air charging system to allow higher air pressure for the SDV Auxiliary Life Support System in order to provide increased flexibility for SDVmissions that can be hosted from Virginia class submarines.
7.Re-evaluate the accuracy requirements for the IKA sonar modes and investigate the calibration of those modes.
8.Continue the reliability improvement program for the TB-29 towed-array or pursue the development of a new array.
9.Improve the reliability of the A-RCI IKA sonar modes.
10. Modify atmosphere control subsystems to operate properly in the freezing waters of the Arctic Ocean.
11. Modify the handling system of the Buoyant Antenna Cable to prevent its freezing in the cold Arctic environment.
12. Continue to collect data on the susceptibility of the Virginia class to low-frequency passive systems and conduct a more quantitative assessment (e.g., determine detection ranges for different ship postures).

Delay in Commissioning of North Dakota (SSN-784)

Another oversight issue for Congress concerns a delay in the commissioning of the North Dakota (SSN-784), the first Block III Virginia-class boat, which the Navy announced on April 16, 2014.In announcing the delay, the Navy stated that This decision is based on the need for additional design and certification work required on the submarine’s redesigned bow and material issues with vendor-assembled and delivered components. As the Navy works with all vested parties to certify the quality and safety of the submarine and toward taking delivery of the boat, it will determine a new commissioning date.

The Navy is committed to ensuring the safety of its crews and ships. High quality standards for submarine components are an important part of the overall effort to ensure safety.The lessons learned from North Dakota are already being applied to all Block III submarines.

Legislative Activity for FY2015

FY2015 Funding Request

The Navy estimates the combined procurement cost of the two Virginia-class boats requested for procurement in FY2015 at $5,288.7 million or an average of $2,644.3 million each. The boat shave received a total of $1,577.0 million in prior-year advance procurement (AP) funding and $158.4 million in prior-year Economic Order Quantity (EOQ) funding. The Navy’s proposed FY2015 budget requests the remaining $3,553.3 million needed to complete the boats’ estimated combined procurement cost. The Navy’s proposed FY2015 budget also requests $1,649.5 in AP funding and $680.8 million in EOQ funding for Virginia-class boats to be procured in future fiscal years, bringing the total FY2015 procurement funding request for the program (excluding out fitting and post-delivery costs) to $5,883.6 million. (EOQ funding is a common feature in the initial years of an MYP contract.)

FY2015 National Defense Authorization Act (H.R. 4435/S. 2410) House

The House Armed Services Committee, in its report (H.Rept. 113-446 of May 13, 2014) on H.R. 4435, recommends approving the Navy’s request for FY2015 procurement and advance procurement (AP) funding for the Virginia-class program (page 395, line 002 and 003), and the Navy’s request for FY2015 research and development funding for the Virginia Payload Module (VPM) (page 429, line 123). H.Rept. 113-446 states:

Virginia Payload Module program

The budget request contained $132.6 million in PE 64580N for development of the Virginia Payload Module (VPM) program.The committee believes that undersea strike capability will be a critical capability for the U.S. military in the future, as U.S. forces begin to operate in increasingly contested environments. In addition, the committee notes that with the pending retirement of the four guided-missile nuclear submarines (SSGN), the U.S. military will lose a significant portion of its undersea strike capability. The committee believes that the VPM program is the lowest risk, lowest cost, and best path for maintaining, and eventually expanding, critical undersea strike capabilities. The committee also notes that by integrating the new strike capability into Block V Virginia-class submarines, the Navy is avoiding having to start an entirely new program that could take decades to come to fruition, whereas in contrast, the VPM program could provide this new capability to the fleet in time to partially compensate for the retirement of the SSGNs. Therefore the committee continues to support the VPM program.

The committee recommends $132.6 million, the full amount requested, in PE 64580N for development of the VPM program. (Page 67)

Senate

The Senate Armed Services Committee, in its report (S.Rept. 113-176 of June 2, 2014) on S. 2410, recommends approving the Navy’s request for FY2015 procurement and advance procurement (AP) funding for the Virginia-class program (page 323, line 002 and 003), and the Navy’s request for FY2015 research and development funding for the Virginia Payload Module (VPM) (page 359, line 123).

FY2015 DOD Appropriations Act (H.R. 4870)

House

The House Appropriations Committee, in its report (H.Rept. 113-473 of June 13, 2014) on H.R.4870, recommends

reducing by $46.079 million the Navy’s request for FY2015 procurement funding for the Virginia-class program, with the reduction being for “Propulsion equipment cost growth” ($42.7 million) and “GFE [government-furnished equipment] savings” ($3.379 million) (page 163, line 2, and page 164, line 2);
reducing by $28.5 million the Navy’s request for FY2015 advance procurement (AP) funding for the Virginia-class program, with the reduction being for “Propulsion equipment cost growth” (page 163, line 3, and page 164, line 3); and
approving the Navy’s request for FY2015 research and development funding for the Virginia Payload Module (VPM) (page 231, line 123).

Senate

The Senate Appropriations Committee, in its report (S.Rept. 113-211 of July 17, 2014) on H.R. 4870, recommends approving the Navy’s request for FY2015 procurement and advance procurement (AP) funding for the Virginia-class program (page 138, lines 2 and 3), and reducing by $20 million the Navy’s request for FY2015 research and development funding for the Virginia Payload Module (VPM) (page 203, line 123), with the reduction being for “Restoring acquisition accountability: Program execution” (page 208, line 123).

Appendix A. Past SSN Force-Level Goals

This appendix summarizes attack submarine force-level goals since the Reagan Administration (1981-1989).

The Reagan-era plan for a 600-ship Navy included an objective of achieving and maintaining a force of 100 SSNs.

The George H. W. Bush Administration’s proposed Base Force plan of 1991-1992 originally called for a Navy of more than 400 ships, including 80 SSNs. In 1992, however, the SSN goal was reduced to about 55 boats as a result of a 1992 Joint Staff force-level requirement study (updated in 1993) that called for a force of 51 to 67 SSNs, including 10 to 12 with Seawolf-level acoustic quieting, by the year 2012.

The Clinton Administration, as part of its 1993 Bottom-Up Review (BUR) of U.S. defense policy, established a goal of maintaining a Navy of about 346 ships, including 45 to 55 SSNs. The Clinton Administration’s 1997 QDR supported a requirement for a Navy of about 305 ships and established a tentative SSN force-level goal of 50 boats, “contingent on a reevaluation of peace time operational requirements.” The Clinton Administration later amended the SSN figure to 55 boats (and therefore a total of about 310 ships).

The reevaluation called for in the 1997 QDR was carried out as part of a Joint Chiefs of Staff (JCS) study on future requirements for SSNs that was completed in December 1999. The study had three main conclusions:

• “that a force structure below 55 SSNs in the 2015 [time frame] and 62 [SSNs] in the 2025 time frame would leave the CINC’s [the regional military commanders-in-chief] with insufficient capability to respond to urgent crucial demands without gapping other requirements of higher national interest. Additionally, this force structure [55 SSNs in 2015 and 62 in 2025] would be sufficient to meet the modeled war fighting requirements”;

• “that to counter the technologically pacing threat would require 18 Virginia class SSNs in the 2015 time frame”; and

• “that 68 SSNs in the 2015 [time frame] and 76 [SSNs] in the 2025 time frame would meet all of the CINCs’ and national intelligence community’s highest operational and collection requirements.”

The conclusions of the 1999 JCS study were mentioned in discussions of required SSN force levels, but the figures of 68 and 76 submarines were not translated into official Department of Defense (DOD) force-level goals.

The George W. Bush Administration’s report on the 2001 QDR revalidated the amended requirement from the 1997 QDR for a fleet of about 310 ships, including 55 SSNs. In revalidating this and other U.S. military force-structure goals, the report cautioned that as DOD’s “transformation effort matures—and as it produces significantly higher output of military value from each element of the force—DOD will explore additional opportunities to restructure and reorganize the Armed Forces.”

DOD and the Navy conducted studies on undersea warfare requirements in 2003-2004. One of the Navy studies—an internal Navy study done in 2004—reportedly recommended reducing the attack submarine force level requirement to as few as 37 boats. The study reportedly recommended home porting a total of nine attack submarines at Guam and using satellites and unmanned underwater vehicles (UUVs) to perform ISR missions now performed by attack submarines.

In March 2005, the Navy submitted to Congress a report projecting Navy force levels out to FY2035. The report presented two alternatives for FY2035—a 260-ship fleet including 37 SSNs and 4 SSGNs, and a 325-ship fleet including 41 SSNs and 4 SSGNs.

In May 2005, it was reported that a newly completed DOD study on attack submarine requirements called for maintaining a force of 45 to 50 boats.

In February 2006, the Navy proposed to maintain in coming years a fleet of 313 ships, including 48 SSNs. Some of the Navy’s ship force-level goals have changed since 2006, and the goals now add up to a desired fleet of 328 ships. The figure of 48 SSNs, however, remains unchanged from 2006.

Appendix B. Options for Funding SSNs

This appendix presents information on some alternatives for funding SSNs that was originally incorporated into this report during discussions in earlier years on potential options for Virginia class procurement.

Alternative methods of funding the procurement of SSNs include but are not necessarily limited to the following:

two years of advance procurement funding followed by full funding—the traditional approach, under which there are two years of advance procurement funding for the SSN’s long-lead time components, followed by the remainder of the boat’s procurement funding in the year of procurement;
one year of advance procurement funding followed by full funding—one year of advance procurement funding for the SSN’s long-lead time components, followed by the remainder of the boat’s procurement funding in the year of procurement;
full funding with no advance procurement funding (single-year full funding)—full funding of the SSN in the year of procurement, with no advance procurement funding in prior years;
incremental funding—partial funding of the SSN in the year of procurement, followed by one or more years of additional funding increments needed to complete the procurement cost of the ship; and
advance appropriations—a form of full funding that can be viewed as a legislatively locked in form of incremental funding.

Navy testimony to Congress in early 2007, when Congress was considering the FY2008 budget, suggested that two years of advance procurement funding are required to fund the procurement of an SSN, and consequently that additional SSNs could not be procured until FY2010 at the earliest.50 This testimony understated Congress’s options regarding the procurement of additional SSNs in the near term. Although SSNs are normally procured with two years of advance procurement funding (which is used primarily for financing long-lead time nuclear propulsion components), Congress can procure an SSN without prior-year advance procurement funding, or with only one year of advance procurement funding. Consequently, Congress at that time had option of procuring an additional SSN in FY2009 and/or FY2010.

Single-year full funding has been used in the past by Congress to procure nuclear-powered ships for which no prior-year advance procurement funding had been provided. Specifically, Congress used single-year full funding in FY1980 to procure the nuclear-powered aircraft carrier CVN-71, and again in FY1988 to procure the CVNs 74 and 75. In the case of the FY1988 procurement,under the Administration’s proposed FY1988 budget, CVNs 74and 75 were to be procured in FY1990 and FY1993, respectively, and the FY1988 budget was to make the initial advance procurement payment for CVN-74. Congress, in acting on the FY1988 budget, decided to accelerate the procurement of both ships to FY1988, and fully funded the two ships that year at a combined cost of $6.325 billion. The ships entered service in 1995 and 1998, respectively.

The existence in both FY1980 and FY1988 of a spare set of Nimitz-class reactor components was not what made it possible for Congress to fund CVNs 71, 74, and 75 with single-year full funding; it simply permitted the ships to be built more quickly. What made it possible for Congress to fund the carriers with single-year full funding was Congress’s constitutional authority to appropriate funding for that purpose.

Procuring an SSN with one year of advance procurement funding or no advance procurement funding would not materially change the way the SSN would be built—the process would still encompass about two years of advance work on long-lead time components, and an additional six years or so of construction work on the ship itself. The outlay rate for the SSN could be slower, asoutlays for construction of the ship itself would begin one or two years later than normal.

Congress in the past has procured certain ships in the knowledge that those ships would not begin construction for some time and consequently would take longer to enter service than a ship of that kind would normally require. When Congress procured two nuclear-powered aircraft carriers (CVNs 72 and 73) in FY1983, and another two (CVNs 74 and 75) in FY1988, it did so in both cases in the knowledge that the second ship in each case would not begin construction until some time after the first.