054/A FFG Thread II

[tphuang]

That is an understatement since everything we make in the US cost more, that's why we see so many products designed in the US and made oversea. We make some of the best hardware commercial and military, but if you want it don't ask for the price. It is like going to a 5 star restaurant ordering a bottle of Château le puy Rouge (2002), just enjoy and paid the bill.

there are just certain things that every companies in America whether operating in civilian or military field face, that including having to deal with all the gov't regulations, high corporate taxes, buying raw materials at spot prices (normally meaning higher), dealing with union workers and having to pay for their benefits and all that. When it comes to really complex technology like aerospace engine, airliners, advanced software systems, computer chips, the greater capital + knowledge base + skilled worker base still gives America an edge over other countries. But unfortunately, shipbuilding is not one of those areas.

I'm getting awfully off topic now. I will just stop here.

 

[tphuang]

pictures of the 3rd 054A from HD shipyard. Not much going on, looks like they still have a lot of work to do from all the scaffolding on there. there are more pictures than what I posted here, but this is a good subset.

 

[Ambivalent]

those are additional reasons why US naval ships cost so much more. If the shipyard workers hourly salary gets cut in half, because that's what the market is paying for, you don't think the ships will get built more cheaply in America? If the corporate taxes for manufacturing in America gets cut in half, you don't think the ships will get built more cheaply?

There are basic reasons regarding the production quality and efficiency of a shipyard. If your workers are not doing any work normally and you can't get the loans to buy all the machinery you need, the cost is going up regardless of how well the specs are defined and how well the projects are managed.

Shipyard labor is not a cost driver on these programs. Start reading GAO reports to learn the truth and disabuse yourself of rumor or preconception. Take the DDG-1000 for example. Over $13 billion dollars was expended before the first steel was cut in the shipyard. Clearly shipyard labor is not behind this, it is the cost to pay scientists, engineers and program management who developed and tested ( or not in some sad cases ) the many new technologies applied to these ships. An example, one hour of range time on a typical tactical range is over $200,000. That is just to man up the range facility. A tactical jet used to deliver a piece of test ordinance costs in the neighborhood of $50,000 per flight hour. Regarding the DDG-1000, there were live fire tests of the PVLS that included all up rounds in the PVLS tubes to verify the performance of the armor. This testing costs millions of dollars. Similarly there will need to be a very special, very expensive range booked to test the ship's radars. This won't be a one day deal, there will be multiple tests over a couple of years, with down time between tests for engineers to analyze the results and prepare for the nexxt test. More millions in costs. The program office must pay the range and the test and evaluation squadron these costs out of program funds. This is what people outside the industry don't know, but the military services charge real money to use their facilities. If a program wants to run a test at some military range, the program must pay the operator of the range for their services. For the range, this is their income, what they use to pay their people and keep the range running, otherwise the range is out of business. Likewise programs have to pay for wave tanks, gunnery tests of that new 155mm gun or the software support facility where the ship's software is modeled and tested. Don't ignore the cost per SLOC, Source Lines of Code, to write all the software that ship uses. These software people cost over $200/hour, that is their fully burdened labor rate. The software effort alone has taken many years of work and is not done yet. There are literally hundreds of programmers involved. Somewhere around 25% of the cost of that program will be software development. The F/A-18 program has a huge building that is one big electronics and software lab staffed full time by scores of scientists and engineers. They are able in this building to model the configuration of the aircraft's electronic systems without having to bend metal on an airframe or fly an airplane. Still, these labs cost big money to operate. There are lots of instances where just the software development cost drives a program from being ACAT II ( ACAT means Acquisition Category ) to an ACAT I MDAP, Major Defense Acquisition Program. Here is the most recent GAO report on the DDG-1000. Have a read. That ship's problems have zero to do with shipyard labor.

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[tphuang]

Shipyard labor is not a cost driver on these programs. Start reading GAO reports to learn the truth and disabuse yourself of rumor or preconception. Take the DDG-1000 for example. Over $13 billion dollars was expended before the first steel was cut in the shipyard. Clearly shipyard labor is not behind this, it is the cost to pay scientists, engineers and program management who developed and tested ( or not in some sad cases ) the many new technologies applied to these ships. An example, one hour of range time on a typical tactical range is over $200,000. That is just to man up the range facility. A tactical jet used to deliver a piece of test ordinance costs in the neighborhood of $50,000 per flight hour. Regarding the DDG-1000, there were live fire tests of the PVLS that included all up rounds in the PVLS tubes to verify the performance of the armor. This testing costs millions of dollars. Similarly there will need to be a very special, very expensive range booked to test the ship's radars. This won't be a one day deal, there will be multiple tests over a couple of years, with down time between tests for engineers to analyze the results and prepare for the nexxt test. More millions in costs. The program office must pay the range and the test and evaluation squadron these costs out of program funds. This is what people outside the industry don't know, but the military services charge real money to use their facilities. If a program wants to run a test at some military range, the program must pay the operator of the range for their services. For the range, this is their income, what they use to pay their people and keep the range running, otherwise the range is out of business. Likewise programs have to pay for wave tanks, gunnery tests of that new 155mm gun or the software support facility where the ship's software is modeled and tested. Don't ignore the cost per SLOC, Source Lines of Code, to write all the software that ship uses. These software people cost over $200/hour, that is their fully burdened labor rate. The software effort alone has taken many years of work and is not done yet. There are literally hundreds of programmers involved. Somewhere around 25% of the cost of that program will be software development. The F/A-18 program has a huge building that is one big electronics and software lab staffed full time by scores of scientists and engineers. They are able in this building to model the configuration of the aircraft's electronic systems without having to bend metal on an airframe or fly an airplane. Still, these labs cost big money to operate. There are lots of instances where just the software development cost drives a program from being ACAT II ( ACAT means Acquisition Category ) to an ACAT I MDAP, Major Defense Acquisition Program. Here is the most recent GAO report on the DDG-1000. Have a read. That ship's problems have zero to do with shipyard labor.

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All that says is that the weapon systems for the new ships cost a lot of money to develop. But if you building many ships afterward, the cost is spread out, so the main cost is still the shipbuilding costs. And if you think that cutting corporate tax America in half is not going to help the shipbuilding costs, you are delusional.

As for software developers, I know how much they get paid, I'm one of them. I've talked to people that work for E-2D project. Even with software development, you can get the same work done for cheaper in other countries. I'm not even referring to just China and India. The cost of development in Waterloo Canada is 1/4 of that of Silicon Valley. It just shows what labour cost, benefit package, regulations and corporate tax in America does to the cost of development.

 

[Ambivalent]

All that says is that the weapon systems for the new ships cost a lot of money to develop. But if you building many ships afterward, the cost is spread out, so the main cost is still the shipbuilding costs. And if you think that cutting corporate tax America in half is not going to help the shipbuilding costs, you are delusional.

As for software developers, I know how much they get paid, I'm one of them. I've talked to people that work for E-2D project. Even with software development, you can get the same work done for cheaper in other countries. I'm not even referring to just China and India. The cost of development in Waterloo Canada is 1/4 of that of Silicon Valley. It just shows what labour cost, benefit package, regulations and corporate tax in America does to the cost of development.

Uh, did you even read the GAO report, or do facts confuse you? The problem with that ship is poor management decisions in the program office, in particular a too aggressive schedule and overly optimistic cost estimate. If you read the report you know the superstructure is supposed to be built as a complete unit with the radar installed and set on the hull, but so far the manufacturer hasn't been able to build the superstructure. We may see a complete hull with no superstructure. The delay will result in a cost and schedule slip. The radar is supposed to be installed in the superstructure before the superstructure is installed on the ship. Now, the radar won't be ready until years after the ship is in the water and will therefore have to be installed with the complete ship at a pier. This will cost a lot more to do than it would if the original plan could be adhered too.
Start reading GAO reports. You can learn quite a bit. I work in this business. Program offices are convinced their projects can be built for half of what they really can be built for, and then cry like babies when your cost estimate is twice what they expected it to be. I have one right now where a program office thinks they can get logistics support for a UAV from a major defense contractor for somewhere in the neighborhood of three man years of labor cost. They are dreaming, it will cost many millions of bucks each year based on historical data from other analogous efforts. I can't tell the program office what to do, I can only give a cost estimate that is as honest as I know how and let them make their decisions. This program office thinks they will save money hiring out the work now done in house by our people. I think they will more than double costs. It is lousy management decisions like these that drive up costs.
What should we do? Number one, never commit a program to production until at least one example in it's final configuration is demonstrated in an operational environment, all drawings are complete ( right now we commit programs to production and the drawings are not even 90% complete, study the E-2D program you referenced which has had a 25% growth in the number of drawings after the design was supposedly finalized! ) then freeze the design. If a modification is necessary or a new threat emerges, address that capability in the follow on spiral, but do not make changes to the product that is being produced, this is a huge source of cost over runs. I also strongly recommend buying more than one product for a mission. Compete two fighters or two of whatever you are buying. Re-compete the contracts every couple of years so the manufacturers have an incentive to keep costs down. As it is now, once a contractor is chosen, they know they won't have any competition in that area for decades. Follow on contracts are therefore guaranteed, and they price like monopolists afterward. If these companies knew they would loose our business if they got too greedy they would have to keep their costs in line.

 

[lilzz]

$250 million is good price for the 054A.
China plans to build 12 of the 054A total cost is only 3 billion. With that money US only can make 3 frigates.

for the same amount of money
12 versus 3. now that's efficient.

 

[Wolverine]

$250 million is good price for the 054A.
China plans to build 12 of the 054A total cost is only 3 billion. With that money US only can make 3 frigates.

for the same amount of money
12 versus 3. now that's efficient.

That's a slight exaggeration. The LCS-1 cost $631 million to build. The LCS-2 cost $677 million. Congress has just imposed a price cap of $460 million per additional ship, so either Lockheed Martin and General Dynamics start making LCS ships that cost this much, or the entire program gets canceled.

 

[Infra_Man99]

Research and development cost is expensive, and so is production cost.
Good military weapons are just really expensive anyway you put it.

According to the GAO and Pentagon, the F-22's R&D is nowhere as much as the production cost. The F-22 is a typical program in that the R&D is more than the production cost: surface ships, subs, missiles, aircraft, electronics, small arms, food, training systems, etc. There are probably exceptions, but production costs seem to always be a lot more expensive than R&D costs.

Check out GAO report: Defense Acquisitions: Assessments of Selected Major Weapons (

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), and various Pentagon reports about the F-22.

The sources say F-22 R&D cost is a lot less than the production cost, but multiple sources vary on the cost of R&D compared to the cost of production.The difference is between half as much to many times less. From reading about various military programs around the US, Europe, Russia, and China, it seems that usually R&D $$$ << production $$$.

The Gerald Ford is unique 'cuz only a few are being built (10 ships vs hundreds of aircraft), but each super carrier is obviously a lot more expensive than any single aircraft (to the best of my knowledge!). Even then, the Ford's production cost is estimated to be higher than its R&D cost. Usually, when you only produce one or few things, the R&D $$$ is more than then production $$$, which is benefit of mass production.

America spends lots of money on its weapons, but America does have superb weapons, although I think the F-22 may not be as invincible as advertised. The Eurofighter seems formidable against the F-22 in its own way. The US Navy's combo of ships and aircraft also seems formidable in its own way. They all have their strengths and weaknesses, and they are all expensive to research and develop, and even more to produce.

 

[Infra_Man99]

Sorry for the double post, but I was just reading about R&D and production costs. The initially produced thing/weapon usually involves R&D, and upgraded things/weapons also have R&D. Even then, production costs seem to cost a lot more than R&D costs.

 

[Jeff Head]

That's a slight exaggeration. The LCS-1 cost $631 million to build. The LCS-2 cost $677 million. Congress has just imposed a price cap of $460 million per additional ship, so either Lockheed Martin and General Dynamics start making LCS ships that cost this much, or the entire program gets canceled.

I believe that if either (or both) get contracts for 20 or more, that they will be able to come very close to those figures in terms of an overall, per unit cost...starting out higher and trending lower.

So, if they could get it down to near $500 million per vessel, then they would get 6 for $3 billion.

Same has been true of the Arleigh Burke class DDGs in principle. Overall product costs spread out over 60+ vessels will end up being well under $1 billion per. Maybe s low as $850 million.