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Navy should reconsider how to parcel out submarine maintenance work

September 24, 2018

A recent report does not conclusively demonstrate that the Navy would be better off getting attack submarines prepared at private shipyards, such as Electric Boat, but it certainly suggests the proposal deserves further examination.

At the very least, the Congressional Budget Office analysis shows that there is no reason for repairs to submarines to await long delays simply to assure that work is done in one of the Navy’s public yards.

Navy brass has long operated under the assumption that it could get repair and maintenance work done more economically at public yards rather than in private shipyards, where charges have to include factoring in profit.

But the analysis by the Congressional Budget Office did not show that to be the case. Looking at 24 years of maintenance and repair records, the CBO found that on average it cost 38 percent less to do such overhaul work in private shipyards compared to public yards. The private yards appear to more than make up in efficiency what is lost in factoring in a profit.

Testing assumptions is something Congress needs to do more. In this case the CBO acted at the behest of the U.S. House Armed Services Committee, which has been concerned about costs and delays. U.S. Rep. Joe Courtney, D-2nd District, a member of the committee, was among those seeking answers.

More study is necessary to reach definitive conclusions. The CBO reports found that maintenance and repairs done by the private shipyards of EB in Groton and Newport News in Virginia trended toward newer submarines, which would be expected to have lower upkeep costs. The analysis also notes that Navy accounting methods changed in 1999, adding to the challenge of making fair comparisons.

A pending and separate analysis of submarine maintenance by the Government Accountability Office could well provide more clarity.

But it is worth noting that nothing the CBO discovered would suggest any great savings by holding up work so that it can be done in a public yard, rather than at EB or Newport News. And that is what has been happening.

For example, the USS Boise, a Los Angeles-class attack submarine, sat docked and unused for about a year and a half awaiting an opening in one of the public yards. The Navy finally came to its senses and sought private bids for the job, a competition won by Newport News, which signed a contract with the Navy valued at up to $386 million.

Allowing such a delay never made sense and it is even more unpalatable given the CBO analysis suggesting that the private shipyards can probably do the work at less cost.

Attack submarines receive a lower priority for Navy yard work than does aircraft carrier maintenance. The larger ballistic-missile carrying Ohio-class submarines are also ahead of attack submarines in the waiting line. That reality suggests that in its future planning, the Navy should consider making the private shipyards at EB and Newport News the go-to option for attack submarine maintenance work.

Courtney should lead the rest of the Connecticut delegation in working to make sure the Navy learns the lessons of the CBO and subsequent studies and implements them in practice.

 

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