CBO report finds submarine maintenance work less costly at private yards
It's less costly to repair submarines at private shipyards like Electric Boat than the Navy's public yards, according to a recent analysis by the Congressional Budget Office. And the Navy has said it prefers to go to public shipyards for its routine maintenance work because it costs less.
CBO, at the request of the U.S. House Armed Services Committee, analyzed 24 years of maintenance on Los Angeles-class attack submarines done by private and public yards, examining costs, days of labor and days in the shipyard. It found that, on average, it cost 38 percent less to do the overhaul work at private shipyards compared to the public yards.
The analysis includes a disclaimer about the findings — the average cost of an overhaul at a public shipyard was $26 million compared with an average cost of $21 million at a private shipyard — which is that the private shipyards performed more overhauls earlier on in the 24-year period, which covers 1993 to 2017, when the submarines were newer and not as expensive to service. Also, the public shipyard data does not include certain overhead costs because the Navy changed its accounting methods in 1999 and stopped reporting overhead costs.
The office said the findings, which were based on Navy data, were preliminary and intended to "stimulate" discussion and "critical comment" in Congress.
The issue came to the attention of federal lawmakers, including U.S. Rep. Joe Courtney, D-2nd District, a member of the House Armed Services Committee, after several attack submarines were delayed in getting overhauled, resulting in missed or shortened deployments.
Courtney and other members of Connecticut's congressional delegation have pushed the Navy to divert submarine maintenance work to the private yards Electric Boat, which is in his district, and Newport News in Virginia instead of adding to workloads at the Navy's public yards, which are backed up and prioritize ballistic missile submarines and aircraft carriers.
"The last four or five years, it's been clear that attack submarines have really been the poor cousins in these assignment of repairs at the public shipyards," Courtney said. "In the meantime, we were seeing these workforce drops cropping up in the private yards, and, at the same time, seeing that submarines were not available for commanders who were screaming at the top of their lungs that they needed submarines to accomplish missions."
The Government Accountability Office is doing its own, comprehensive analysis of submarine maintenance, which is expected to be released in the near future, according to Courtney.
The USS Boise, a Los Angeles-class attack submarine, frequently is cited by Courtney and other lawmakers as the worst-case scenario when maintenance gets deferred. The submarine sat pierside for at least a year and a half waiting for the public yards to open up. Ultimately, the Navy chose to bid the work out to the two private yards, and Newport News won the contract, valued at up to $386 million.
Several years ago, EB received a contract, valued at up to $259.6 million, for the overhaul of the USS Montpelier, the largest and most complex maintenance and modernization in the company's history.
A June 2018 report from the U.S. Naval Institute says that work on the Montpelier, and the attack submarine USS Helena, which is being serviced by Newport News, were running a few months behind. The report says the Navy hoped that using the private yards for this kind of maintenance more regularly would help them be reliable and stay on time, given there's a different skillset to building submarines versus repairing them.
Assistant Secretary of the Navy James Geurts is working on a 30-year ship repair plan, a first for the Navy. Courtney said he hopes the CBO report helps to inform that planning, something he'll push for in Congress.
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