Ford-Class Carrier Cost Overruns Appear Likely, GAO Says

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November 20, 2014

The lead ship in the Ford-class , the future USS Gerald R. Ford (CVN-78), was launched at Huntington Ingalls in November 2013. Photo by Chris Oxley

By David Lerman and Tony Capaccio

Nov. 20 (Bloomberg) — The cost of the U.S. Navy’s new aircraft carrier is likely to keep rising from the $12.9 billion now estimated, with the final price masked by deferring some work until after the ship is delivered, the Government Accountability Office said.

In the latest in a series of reports offering political ammunition to critics of the Navy’s most expensive warship, the GAO today reaffirmed its earlier concerns that the Ford-class carrier being built by Huntington Ingalls Industries Inc. will cost more and take longer to complete than advertised.

“With the shipbuilder embarking on one of the most complex phases of construction with the greatest likelihood for cost growth, cost increases beyond the current $12.9 billion cost cap appear likely,” the watchdog agency said.

To stay within the cost cap, the Navy is deferring some work, including installing satellite communications equipment and correcting defects, until after the ship is delivered in order to create a funding reserve, the report found.

“This approach obscures visibility into the true cost of the ship and results in delivering a ship that is less complete than initially planned,” the GAO said.

The report may serve as fodder for renewed attacks on the Navy’s construction plans from the Senate Armed Services Committee, whose incoming Republican chairman, Arizona Senator John McCain, has been a persistent critic of the carrier.

Improvements Cited

Huntington, the only U.S. builder of aircraft carriers, defended the progress of the Gerald R. Ford, which is the first major redesign of a carrier since the 1960’s-era Nimitz class.

The Ford is 83 percent complete and “we continue to see improvements on our performance on Ford and we continue to further increase efficiencies and to retire risk,” said Beci Brenton, a spokeswoman for the Newport News, Virginia-based shipbuilder.

The GAO, the investigative arm of Congress, urged lawmakers to consider revising legislation that set the cost cap on the ship “to improve accountability of Ford-class construction costs.”

The Pentagon rejected that advice, saying all needed funding is already included, according to a written response to the report by Katrina McFarland, assistant secretary of defense for acquisition.

The GAO also said the Ford will deploy “without demonstrating full operational capabilities” because some requirements, such as increasing aircraft launch rates, won’t be met in time and will limit the carrier’s operations.

Copyright 2014 Bloomberg.

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