Navy's $128 billion nuclear submarine project faces audit

The Pentagon's inspector general plans to audit how well the Navy is overseeing development of the propulsion and steering system for its new $128 billion Columbia class of nuclear-armed submarines.

An audit this early in the Navy's top-priority program — at least 17 months before construction is scheduled to start on the first of 12 vessels — signals concern about the potential risks in technology for the sub, which still is mostly in its design phase.

The review that's likely to begin by June will "determine whether the Navy is managing the development" of the system to "ensure that it meets performance requirements without cost increases or schedule overruns," the watchdog office said in its fiscal 2019 audit plan, which was released publicly last fall.

"There is a suggestion in this statement that the stern section may present some risk of cost growth or schedule delay," Ronald O'Rourke, naval systems analyst for the Congressional Research Service, said in an email. Until now, he said, concern about cost and delay "has focused on things other than the stern section."

The Navy disclosed last year, for example, that submarine builder Electric Boat identified weld defects in missile tubes from one of three tube suppliers.

The review concerns the propulsor, which drives a submarine through the water, and the coordinated stern, which allows it to maneuver. The submarines are being built by Electric Boat.

"We look forward to working with the DoD IG on any such effort," said William Couch, a spokesman for the Naval Sea Systems Command. The audit is likely to be complete next year, as Congress considers the fiscal 2021 defense budget. The Navy is expected to seek an increase in funds to start construction of the first vessel in October 2020.

The $128 billion estimate includes research and development with $115 billion for procurement. 

The Government Accountability Office said in a report released last week that the Navy’s procurement estimate is "not realistic because it is based on several overly optimistic assumptions, such as the amount of labor needed for construction."

U.S. Rep. Joe Courtney, D-2nd District, said in a phone interview with The Day last week that he "respectfully disagrees" with some of GAO’s conclusions in the report.

Courtney said his office is in regular contact with EB, the prime contractor for the Columbia program, and "they disagree."

"There’s risk there, I would concede that, but I think their conclusion is too premature," Courtney said.

EB did not immediately respond to requests for comment.

While it’s good to "have another set of eyes watching this," the GAO report "underplayed" the Navy’s acknowledgment that the program requires special attention, Courtney said. The Navy recently assigned an admiral to exclusively focus on the Columbia program.

As chair of the Seapower and Projection Forces Subcommittee of the House Armed Services Committee, Courtney will be in a good position to advocate for the program as funding requests continue to grow.

"Everybody knows this is a really big program, an expensive program. It’s doing some new things in terms of propulsion," Courtney said.

He also argued that the GAO report "discounts" the savings that could be achieved through the National Sea Based Deterrence Fund, which he championed as a way to pay for the costly program outside of the Navy's shipbuilding budget. An October 2015 report from the Congressional Budget Office estimated that the fund has the potential to save the Navy several hundred million dollars per submarine by authorizing the service to purchase components and materials for the submarines "in batches."

This story was written by Day Staff Writer Julia Bergman and Tony Capaccio of Bloomberg.

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