Lawmakers, Analysts Describe Fragility of Shipbuilding Industrial Base

Lee Hudson

September 20, 2013

A House lawmaker with influence over the Navy's shipbuilding program said last week he is worried about the number of sole-source vendors the service relies on to build and maintain its fleet, raising the question of how many of those companies will be in business in the future.

Rep. Randy Forbes (R-VA), the chairman of the House Armed Services seapower and projection forces subcommittee, made his remarks Sept. 18 at a Center for Strategic and Budgetary Assessments event that unveiled a new industrial base report titled "Sustaining The U.S. Defense Industrial Base As A Strategic Asset."

Forbes criticized House lawmakers for treating the defense industrial base like a running faucet -- believing that it can be turned on, turned off and turned it on again.

"You just can't do that. It just doesn't work that way," he said.

When it comes to shipbuilding, Forbes is concerned about the number of sole-source vendors. For example, the last aircraft carrier the Navy built, 40 percent of the vendors were sole source. The aircraft carrier the Navy is building now is using 60 percent sole-source vendors and the next carrier will use 80 percent sole source vendors, he stated.

"That is startling when you look around at our nation and you recognize that on many of our platforms now we're actually starting to worry not just if we have somebody else to provide for us the need to build that platform, but what about servicing that platform five years, 10 years down the road? Are they going to be there?" Forbes said.

Barry Watts, the author of the CSBA report, pointed out that the submarine industrial base has only one design house in the United States, located at General Dynamics Electric Boat.

In the report, Watts wrote the difficulty military-unique systems often have is that critical elements in the supply chains do not warrant special intervention or preferential funding to preserve them.

In March, Chief of Naval Operations Adm. Jonathan Greenert said he is concerned about the submarine industrial base because about 90 percent of nuclear components come from a single-source supplier.

If the Navy is forced to make across-the-board budget cuts under sequestration, it will be "extremely difficult" for the service to buy two Virginia-class submarines per year, as it now plans, while it builds an Ohio-class replacement ballistic missile submarine, Greenert said.

"We'd have to have a discussion because it would clobber [us] to sustain [two Virginia subs per year] as we build the SSBN(X) in the future," he said. "It would clobber the rest of the shipbuilding account."

Last week, during a House Armed Services Committee hearing Greenert said the Navy will not be able to use prior-year funds to mitigate sequestration cuts in its investment accounts as it in fiscal year 2013.

"So, without congressional action, we will lose at least a Virginia-class submarine, a Littoral Combat Ship and an Afloat Forward Staging Base," he said.

Furthermore, the Navy will delay the delivery of the next aircraft carrier and delay the midlife overhaul of the carrier the George Washington (CVN-73).