Improving Naval Ship Acquisition

Summary

This is a policy proposal written by Austin Vernon and myself for improving US naval shipbuilding. It was produced for Rebuilding.tech, a techno-industrial policy playbook curated by IFP, FAI, and American Compass.USS Iowa, one of the many WWII-era ships designed in-house by the Navy.US Naval vessels today regularly take far longer to build than scheduled, and greatly exceed their already-high cost estimates. A 2018 GAO report found that more than 80% of both lead ships (the first ship built of a series) and follow-on ships (subsequent ships of the series) were over budget, sometimes dramatically so. The first Zumwalt-class destroyer was over budget by 38%, and the first two Littoral Combat Ships were over budget by 150%.Similarly, of eight lead ships reviewed by the GAO, every one was delivered behind schedule, and five of the eight ships were delivered two years late or more. Delays and cost overruns are wasteful and hamper the effectiveness of the Navy: reducing them would mean getting more ships, faster.Delays and cost overruns are in part driven by the Navy’s ship design and acquisition process. Broadly speaking, the Navy creates high-level requirements for complex, multi-role ships, and then outsources the design of these ships to third-party contractors. Once a design is selected, it is turned into production drawings (so-called “detail designs”), which are used to produce the ships. In an effort to reduce the time it takes to deliver a ship, ship construction is often started before ship design is complete. However, this strategy frequently backfires: as design work is completed, changes to under-construction ships are often required, resulting in costly and time-consuming rework.We recommend several changes to this process to reduce cost and schedule growth, and to reliably deliver ships faster and for less cost.Instead of complex, multi-role ships which have expensive and often unnecessary features, the Navy should focus on simpler ships with narrower use ...