Study: Submarine Maintenance is Not More Expensive at Private Shipyards
By: Julia Bergman
April 25, 2019
An updated report comparing the cost of doing submarine maintenance at private versus public shipyards found the cost has been about the same between the two types of yards in recent years.
The Congressional Budget Office, which produced the report, said it received updated data from the Navy showing higher costs for recent submarine maintenance jobs at the two private shipyards, Electric Boat and Newport News Shipbuilding in Virginia, hence the change.
CBO's original report, released last fall, found that, on average, it cost 38 percent less to do the overhaul work at private yards compared to the public yards from 1993 to 2017. CBO specifically looked at extensive maintenance on Los Angeles-class attack submarines.
U.S. Rep. Joe Courtney, D-2nd District, said the updated findings still "debunk" the claim made by the Navy that it cost 20 percent less to do this work at the public yards, which the service owns and operates. The report says that "following discussions with CBO, the Navy changed its analytical approach and now finds that the costs of overhauls at public and private shipyards are nearly the same."
Courtney has pressed Navy officials to use the private yards more after several attack submarines were delayed in getting overhauled, resulting in missed or shortened deployments.
"With this analysis in hand, the Navy should have all the tools it needs to address the stubborn backlog of submarine maintenance work and delays by bringing both the public and private sectors fully to bear to get our submarines back out to sea," Courtney said.
The Navy has said it plans to award two upcoming maintenance jobs to the private yards, and Courtney is hoping Electric Boat will get at least one of them. Using the private shipyards will "help build an experienced maintenance workforce, reduce the learning curve for future availabilities and ultimately reduce costs," he said.
U.S. Sen. Chris Murphy, D-Conn., also called on the Navy to increase submarine maintenance work at the private yards following the release of the updated report.
"This CBO report confirms that doing so would efficiently address the costly backlog, while at the same time saving taxpayer dollars," Murphy said. "Electric Boat is the best in the nation, and the Navy should rely on these workers to address the backlog. The longer it takes to complete this maintenance work, the more we waste money and put our national security at risk."
The Navy recently awarded several submarine maintenance jobs to the private yards to help reduce the backlog. However, two submarines under repair at Newport News Shipbuilding in Virginia are 12 to 18 months behind schedule, according to a recent article in The Daily Press in Newport News. The Navy attributed the delays on the USS Helena and the USS Columbus to the workforce's inexperience in submarine maintenance, limited resources spread across three projects and hull-specific new work, the article says.
That's further delayed overhaul work on the USS Boise, frequently cited as the worst-case scenario when maintenance gets deferred. The Boise, which last deployed in January 2015, lost its dive certification in February 2017 while waiting for repairs at Naval Station Norfolk. Ultimately, the Navy chose to bid the work out to the two private yards, and Newport News won the contract in 2017, valued at up to $386 million. EB also bid on the job.
After finishing the largest submarine repair job in its history, EB is expected to deliver the USS Montpelier, an attack submarine of the Los Angeles-class, also known as the 688 class, to the Navy in about a week. The overhaul of the Montpelier initially was scheduled to be completed in February 2018. Courtney said officials at EB have told him that these submarines are being "run a lot harder" and that when the company began working on the submarine, it found the maintenance required was more extensive than it realized.
"We've learned a great deal about the complexity of maintenance of the 688 class. We have captured these learnings so that we are prepared for future potential repair work to help maintain the Navy's fleet," EB spokeswoman Liz Power said.
A June 2018 report from the U.S. Naval Institute 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.
EB is eager to get this work to help stabilize its workforce during peaks and valleys of production.