US Military News, Reports, Data, etc.

Brumby

Major
Other nations are definitely not building their vessels to the high end military standards that US combat vessels, that are meant to go into high threat environments, are built to.

Also, the US has a significantly high labor cost, which has many regulations, union costs, etc. built in. All of this drives the cost up.

I read a report recently on the cost of 21st century ship building and essentially it was reported that systems related cost are the main cost driver of a military vessel as systems become increasingly more complex. A study of UK ship building suggest that systems account for 70 % of the cost and the hull the remainder. In contrast, commercial vessels had an inverse relationship with systems accounting for only 20 %.

I don't think the trend is sustainable for the US when every replacement vessel be it Ohio Class, Trico, et al where we are looking at billions per vessel. The US might be close to a tipping point (if not there) where it can no longer afford it or in the numbers that it want. Strategically, the cost structure places the US at a disadvantage viz a viz China unless something changes to equalize the situation. I think the issues are deeper than just high labor cost.
 
On Aerial Tankers:

Posted on InsideDefense.com: June 2, 2014

The Air Force projects Boeing could be liable for more than $1 billion in cost overruns on the KC-46A aerial refueling tanker program, about $250 million higher than previously estimated, according to an April report to Congress.

The revised overage stems from a risk assessment last year led by Maj. Gen. John Thompson, the KC-46 program manager, in collaboration with Boeing. The assessment projected the cost to execute the "fixed price incentive firm" engineering and manufacturing development contract for the new aircraft would most likely be $5.864 billion, up from a 2012 estimate of $5.615 million.

"This estimate incorporated an assessment of contract cost and schedule performance, as well as cost risks from the May 2013 Integrated Risk Assessment conducted between the KC-46 Division and Boeing," states the 53-page KC-46A Selected Acquisition Report, dated December 2013 and sent to Congress in April.

In February 2011, the Air Force awarded Boeing a $3.6 billion contract to begin the development of four KC-46A tanker prototypes. The contract set a $4.3 billion target price and included a provision stating that the government would pay 60 percent of any cost overruns up to a ceiling price of $4.831 billion, with Boeing to pay the rest. The Air Force's new $5.8 billion estimate would require Boeing to absorb more than $1 billion of cost overruns above the contract ceiling price.

Boeing, which is developing the new aerial-refueling tanker based on the company's 767 commercial airliner, estimates the cost to complete the contract will be $5.1 billion, a prediction the company advanced in 2011 and is sticking to, according to the Pentagon report.

The Air Force, however, for a third consecutive year is projecting that the total cost would be significantly higher. In 2011, the Air Force predicted the development contract would exceed the cost ceiling by $453 million; in 2012, the estimate grew to exceed $784 million. The new $1 billion estimate is twice the sum the Air Force originally tabulated.

At press time, a Boeing representative could not be reached for comment on the figures in the Pentagon report.

In 2011, Boeing was selected over EADS North America -- winner of the 2008 aerial refueling tanker competition that was later undone by federal auditors -- to build a 179-aircraft fleet to replace the aging Air Force's KC-135 tanker fleet.

After losing to Boeing, EADS North America executives accused Boeing of winning with an "extremely low-ball offer," a charge seconded by Sen. John McCain (R-AZ), who was frustrated that the government faced $600 million in cost overruns in the development contract (DefenseAlert, July 14, 2011).

The Air Force also projects possible schedule delays for two planned milestone events, according to the report to Congress. A "schedule risk assessment" conducted by the KC-46A program office, Boeing and the Defense Contract Management Agency in May 2013 projected a "2.6-month" delay for the first flight this summer and a nearly three-month delay of Boeing's March 30, 2017, goal for "required assets available" -- which are not contractually due until August 24, 2017. The analysis determined that Boeing had a "better than 90 percent chance" of meeting the August deadline, according to the report.
 
On B-2, found here:
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"Northrop Grumman Systems Corp., Aerospace Systems, Palmdale, California, has been awarded a ceiling $9,900,000,000 indefinite-delivery/indefinite-quantity contract for B-2 modernization and sustainment. The Flexible Acquisition Sustainment Team (FAST) II contract requirements include B-2 enhancements, sustainment logistics elements including sustaining engineering, software maintenance and support equipment. Also included is programmed depot maintenance of the fleet and other interim contractor support. Work will be performed at Palmdale, California, with performance at other locations, namely Whiteman Air Force Base, Missouri; Tinker AFB, Oklahoma; Wright-Patterson AFB, Ohio; Edwards AFB, California, and Hill AFB, Utah, and the base period work is to be completed May 2, 2019. If the option is exercised, the work is to be completed May 2, 2024. This award is the result of a sole-source acquisition. Fiscal 2014 research, development, test and evaluation funds in the amount of $6,355,000 are being obligated at time of award on delivery order 0001 for Common Very Low Frequency Receiver Increment 1. The total price for delivery order 0001 is $26,584,648. Air Force Life Cycle Management Center, B-2 Division Contracting, Air Force Life Cycle Management Center/WWZK, Wright-Patterson AFB, Ohio is the contracting activity (FA8616-14-D-6060)."
 

Jeff Head

General
Registered Member
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Pacific Sentinel said:
WASHINGTON — As the Pentagon shifts its focus to the Asia-Pacific region, Northrop Grumman is expanding its footprint in Australia, which company officials want to make a hub for its logistics business.

Northrop purchased Qantas Defence Services in February. Through the purchase, the US-based company acquired the maintenance and logistics work already being done by Qantas, allowing it to diversify its program portfolio and expertise.

“There’s a couple of ways to survive in a global industry,” Steve Hogan, Northrop’s vice president and general manager for its Integrated Logistics and Modernization division, said May 28 at the National Press Club here. “You can try to bring a capability, one individual at a time. You can try to partner with a particular company or activity in a particular area of the country, or you can expand through acquiring capabilities in the areas you want to be in.”

Northrop inherited a Royal Australian Air Force contract to perform logistics work on Lockheed Martin C-130H transports, Airbus A330 tankers and Boeing 737 and Bombardier CL-604 VIP aircraft.

Moreover, Northrop is looking to expand its maintenance operations in Australia and throughout the region.
 

Equation

Lieutenant General
I read a report recently on the cost of 21st century ship building and essentially it was reported that systems related cost are the main cost driver of a military vessel as systems become increasingly more complex. A study of UK ship building suggest that systems account for 70 % of the cost and the hull the remainder. In contrast, commercial vessels had an inverse relationship with systems accounting for only 20 %.

I don't think the trend is sustainable for the US when every replacement vessel be it Ohio Class, Trico, et al where we are looking at billions per vessel. The US might be close to a tipping point (if not there) where it can no longer afford it or in the numbers that it want. Strategically, the cost structure places the US at a disadvantage viz a viz China unless something changes to equalize the situation. I think the issues are deeper than just high labor cost.

Perhaps, but for the US, advance 3D printing and the diminishing of union labors could lower the cost of ship and submarine building. A lot of the cost overruns is tied up to politics as well.
 

Jeff Head

General
Registered Member
A study of UK ship building suggest that systems account for 70 % of the cost and the hull the remainder.

I don't think the trend is sustainable for the US when every replacement vessel be it Ohio Class, Trico, et al where we are looking at billions per vessel. The US might be close to a tipping point (if not there) where it can no longer afford it or in the numbers that it want. Strategically, the cost structure places the US at a disadvantage viz a viz China unless something changes to equalize the situation. I think the issues are deeper than just high labor cost.
You actually make the case for me. The systems costs you are refering to involve a LOT of labor by some of the most exepensive people involved.

Higher labor costs (and to me that includes a lot of things) and higher regulatory costs do account for most of it.

You have to remember, that the higher labor costs for those systems engineers, programmers, etc. are all built into the systems costs you are talking about.

Is it sustainable? Well, it has been thuis far. When you build a lot of destroyers of the same class...or submarines of the same class...you lessen the cost of systems on a per ship basis because you spread out those costs over the long run of vessels.
 
On Air-Launched LRASM:

Posted on InsideDefense.com: June 4, 2014

A Senate panel has rejected the Pentagon's plan to field an urgently needed new air-launched, anti-ship cruise missile in the Pacific, proposing in its fiscal year 2015 defense authorization bill to derail a plan to make Lockheed Martin's Long-Range Anti-Ship Missile demonstration project a program of record.

The Senate Armed Services Committee's bill would strip all funding for the Offensive Anti-Surface Warfare (OASuW) capability -- $202.9 million -- and require the Navy to redirect previously appropriated funds for the project "to conduct more thorough analyses of alternatives for meeting combatant commander needs."

At issue are U.S. Pacific Command's desire for a new air-launched anti-ship cruise missile, a battle between missile-makers Raytheon and Lockheed over which product is best suited to the requirement, and a tug-of-war between the executive and legislative branches over how to select the best weapon. DOD wants LRASM operationally ready on Air Force B-1B bombers as soon as 2018 and on Navy F/A-18E/F fighters in 2019.

Last year, Pentagon leaders picked the Long-Range Anti-Ship Missile program -- a technology development project led by the Defense Advanced Research Projects Agency and the Office of Naval Research -- to meet PACOM's urgent request. LRASM is a modified Joint Air-to-Surface Standoff Missile Extended Range (JASSM-ER) that incorporates additional sensors and systems to create a stealthy, survivable subsonic cruise missile. The LRASM program was also slated by DOD leaders to satisfy the OASuW requirement, which the Navy had previously planned to pursue with a interim sole-source contract to Raytheon (DefenseAlert, Oct. 17, 2013).

Raytheon, which believed its Tomahawk cruise missile was best suited to the OASuW requirement, cried foul at the Defense Department's plan to install Lockheed as the OASuW supplier and accused Pentagon leaders of circumventing weapon system acquisition laws requiring competition (DefenseAlert, Nov. 22, 2013).

In March, DOD overhauled the OASuW acquisition strategy by splitting the program into two parts, retaining Lockheed Martin's LRASM to provide the air-launched OASuW increment and establishing a competition for a future OASuW increment. The revised approach followed a directive in the FY-14 defense authorization bill, enacted in December, requiring a more competitive OASuW approach than the LRASM-only plan.

Still, the Senate Armed Services Committee is not satisfied with the updated OASuW plan. The panel's report accompanying the FY-15 defense authorization bill recommends continuing "that same non-competitive approach, but would field only a limited number of the air-launched version of the missile."

The panel notes the FY-15 budget request and associated five-year plan "envision spending roughly $1.5 billion to acquire roughly 110 missiles," the report states. "The committee is concerned that this program was created to respond to an urgent combatant commander need, but was done so with insufficient analyses of other available alternatives, and with insufficient regard for the costs of locking in a long-term commitment under a non-competitive program."

The committee also challenges Navy plans to terminate Tomahawk production in FY-16 (DefenseAlert, March 21). Its bill would increase the Navy's proposed FY-15 request for the effort -- $194 million to buy 100 of the land-attack cruise missiles -- to $276 million, which would keep Tomahawk production at the minimum sustaining rate of 196 missiles a year.

"The committee is concerned about the Navy's abrupt decision to truncate production," the report states. "The Tomahawk is [a] combat-proven missile, having been used well over 2,000 times in the last two decades, and has a proven operational track record and capability. The Navy provided some limited information to support its proposal. However, the analysis supporting projected inventories and usage rates to be expected during the remainder of this decade was incomplete."

Raytheon Missile Systems is based in Tucson, AZ. Arizona is represented on the Senate Armed Services Committee by Sen. John McCain, the panel's senior Republican.

The committee directs the Navy to provide the analysis supporting the service's proposal to end Tomahawk production, "including an assessment of near-term and long-term threat analysis, impact on the industrial base and the needed timing of a mid-life certification/upgrade of the current Tomahawk inventory," the report states.

The House Armed Services Committee, in its FY-15 defense authorization bill agreed to by the full chamber on May 13, also raised concerns about plans to end Tomahawk production. That bill states the Navy secretary should provide a land-attack cruise missile roadmap; it also would authorize the DOD to enter into a five-year contract to extend Tomahawk production.

MY COMMENT/QUESTION: Note the "envision spending roughly $1.5 billion to acquire roughly 110 missiles," part ... this would mean almost 14m a piece; is this what the price of an LRASM is going to be?
 
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