Latest GAO Report Criticizes Navy Management of CVN-78

GAO: Navy Carrier Will Be Incomplete, Cost More at Delivery | Military.com

Christening of USS Gerald R Ford

YOKOSUKA NAVAL BASE, Japan -- The Navy plans to meet the $12.9 billion cost cap for its new aircraft carrier by accepting the ship unfinished and spending more money afterward, according to a report by the government's watchdog agency.

The aircraft carrier Gerald R. Ford may be unable to demonstrate its promise to boost aircraft launch and recovery rates before it is delivered to the Navy, according to a
Government Accountability Office report released Thursday.

The ship may also require as much as $988 million more in spending after delivery, according to the GAO.

"In essence, the Navy will have a ship that is less complete than
initially planned at ship delivery, but at a greater cost," according to
the report.


The Gerald R. Ford is about 80 percent complete and is about to begin
shipboard testing, which the GAO considers the most challenging phase
of development.

Latest GAO Report

Navy is basically ignoring Congressional Cap on Carrier Cost and accepting an incomplete ship, letting shipbuilder off the hook. GAO suggests Congress consider adjusting requirements to match likely performance achievable.

U.S. GAO - Ford-Class Aircraft Carrier: Congress Should Consider Revising Cost Cap Legislation to Include All Construction Costs

GAO-15-22: Published: Nov 20, 2014. Publicly Released: Nov 20, 2014.

Testing milestones have repeatedly slipped multiple years

The extent to which the lead Ford-class ship, CVN 78, will be delivered by its current March 2016 delivery date and within the Navy's $12.9 billion estimate is dependent on the Navy's plan to defer work and costs to the post-delivery period.
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In response, the Navy is deferring some work until after ship delivery to create a funding
reserve to pay for any additional cost growth stemming from remaining construction risks. This strategy will result in the need for additional funding later, which the Navy plans to request through its post-delivery and outfitting budget account. However, this approach obscures visibility into the true cost of the ship and results in delivering a ship that is less complete than initially planned.

CVN 78 will deploy without demonstrating full operational capabilities because it cannot achieve certain key requirements according to its current test schedule. Key  requirements—such as increasing aircraft launch and recovery rates—will likely not be met before the ship is  deployment ready and could limit ship operations. Further, CVN 78 will not meet a requirement that allows for increases to the size of the crew over the service life of the ship. In fact, the ship may not even be able to accommodate the likely need for additional crew to operate the ship without operational tradeoffs. Since GAO's last report in September 2013, post-delivery plans to test CVN 78's capabilities have become more compressed, further increasing the likelihood that CVN 78 will not  deploy as scheduled or will deploy without fully tested systems.

AAG and EMALS Reliability falls far short of requirements

System reliability is critical to the carrier’s ability to meet the SGR requirement and is measured in terms of mean cycles between critical failures, or the average number of times each system launches or recovers aircraft before experiencing a failure. As shown in table 5, the most recent available metrics from January 2014 show that EMALS and AAG show such low reliability rates that it is unlikely that these systems will achieve reliability rates needed to support SGR requirements before the demonstration event in 2019 or for years after the ship is deployment ready.

GAO Told You this would happen

U.S. GAO - Defense Acquisitions: Navy Faces Challenges Constructing the Aircraft Carrier Gerald R. Ford within Budget

GAO-07-866: Published: Aug 23, 2007. Publicly Released: Sep 24, 2007.

The Navy is investing over $3 billion to develop technologies for a new type of aircraft carrier--the Ford class--and it expects to spend almost $11 billion to design and construct the USS Gerald R. Ford (CVN 78)--the lead ship of the class. New technologies are to improve the carrier's performance and reduce crew size. The Navy requested authorization of CVN 78 in its fiscal year 2008 budget. GAO was asked to assess the Navy's ability to meet its goals for developing the new carrier. Specifically, this report assesses

1. the extent to which technology development could affect the capability and construction of CVN 78, 
2. the status of efforts to achieve design stability, and 
3. the challenges to building CVN 78 within budget. 

To accomplish this, our work includes analysis of test reports, development schedules, and ship progress reviews; interviews with Navy and other officials; and examinations of cost estimates and our own past work.


Delays in technology development may lead to increases in CVN 78's planned construction costs and potential reductions in the ship's capability at delivery. :::

1. First, the Navy's cost estimate,  which underpins the budget, is optimistic. For example, the Navy assumes that CVN 78 will be built with fewer labor hours than were needed for  the previous two carriers.
2. Second, the Navy's target cost for ship construction may not be achievable. The shipbuilder's initial cost estimate for construction was 22 percent higher [closer to the actual cost achieved] than the Navy's cost target, which was based on the budget. Although the Navy and the shipbuilder are working on ways to reduce costs, the actual costs to build the ship will likely increase above the Navy's target.
3. Third, the Navy's ability to manage issues that affect cost suffers from insufficient cost surveillance. Without effective cost surveillance, the Navy will not be able to identify early signs of cost growth and take necessary corrective action.