In 1973 and 1974 a bitter dispute raged behind the scenes in the Pentagon over a stupefyingly technical subject: the terms of a contract.
The contract was for the first Trident, a new submarine almost as long as two football fields. The Navy is buying eight, is authorized to buy a minth, and has a wish list for 15, possibly even 29.
Each would lurk in the oceans with probably 168 or 336 thermonuclear warheads, just one of them able to take out a city or, if the desired accuracy is achieved, a hardened missile silo with a blast four or five times greater than the one that leveled Hiroshima.
The contact dispute was fundamentally over the cost of the first hull. One faction saw no way to predict the cost, and wanted the contract to be open-ended to reflect this candidly.
The other faction was bent on sustaining the impression that the cost could be nailed down in advance, in just the amount, it happened, that Congress already had budgeted.
The second faction won. Its victory contributed to one of the largest overall cost overruns in Defense Department history.
The Navy, in 1972, was roughly figuring the cost of a Trident including its interim missiles at $1.35 billion. By 1977 the Navy, still lacking detailed estimates and constantly changing its definition of unit costs, acknowledged an increase of $650 million per ship, and the General Accounting Office rated even that calculation too low.
Last year the Carter administration figured $2.4 billion, a number omitting the missiles and some other costly items. Now the Reagan administration, computing costs the same way but claiming more optimism about inflation, says $2 billion.
How did this happen? This is an account of how politics on Capitol Hill and in the Navy, log-rolling at the White House and the Pentagon, massaged a new concept, envisioned as "rather austere," into an awesomely expensive weapons system, a submarine that dwarfed its original prospectus in size and complexity and, above all, cost.
What happened? The evidence, including many Pentagon documents never revealed previously, shows that the Navy rushed to Congress for construction funds before its designs were ready even before it was fully certain what the Trident should be like.
Then the Navy signed an ingenious rubber contract with the shipbuilder that would appease the congressional worries about costs but at the same time assure the contractor that the real price tag would be much higher.
This happened too: once the Trident construction was launched, Congress looked the other way, even though procurement experts warned repeatedly that the contract cost figures were a sham. Today, many years later, those experts have been proved correct.
The Navy, meanwhile, is continuing to obscure the true cost of the Trident. It is possible, unless Congress develops more zeal in the matter, that the American taxpayers won't know what these formidable boats have actually cost until 1986, long after many Tridents are cruising the seas with their thermonuclear warheads.
Sometime in the coming weeks at the Groton, Conn., yard of the Electric Boat Division of General Dynamics Corp., the first completed Trident, the Ohio , is expected to be delivered to the Navy. This will be almost four years after the first delivery date given to Congress, when speedy production was a winning argument on Capitol Hill.
Neither Congress nor the administration takes much interest in questions about Trident program mistakes these days. But the lessons may be relevant, as the governmen busies itself with plans for awesome new weapons, new concepts and new contracts that will stretch out over the coming decade, consuming hundreds of billions of dollars. Always a Next Step
Expensive ideas have complicated histories. The Navy first begun to build nuclear-powered submarines in the 1950s, then to convert some of them into underwater launching pads for ballistic missiles.
It eventually built 41 of these Polaris and Poseidon missile-launching subs. Together they had the theoretical capability to fire more than 5,300 thermonuclear warheads up to 2,500 miles, enough to reach any point in the Soviet Union from somewhere in the seas. Jimmy Carter observed in 1979 that just one Poseidon boat had the ability to "destroy every large- and medium-size city in the Soviet Union.
But weapons systems grow old and become outdated like everything else -- two Polaris subs already have been taken out of service -- and there is always a next step in weaponry.
In 1966 the Defense Department set up a panel of experts, called Strat X for Strategic Experimental, to assess more than 100 ideas for increasing U.S. ability to fire nuclear missiles into the Soviet Union if the Soviets were to develop an effective antiballistic-missile system.
Then, as now, a critical question was how to base whatever missiles were to be employed. One alternative the Strat X group finally endorsed was an underwater baing system: a new submarine to lurk in the depths.
Rear Adm. George H. Miller, retired head of the Navy's strategic systems office, who was the Navy's representative on Strat X, says that was first envisioned the ship was to be "rather austere," in part because it would not have to go fast and consequently wouldn't need a very large nuclear power plant.
The towering figure in all Navy nuclear matters is the powerful and cantankerous admiral known as the father of the nuclear Navy, Hyman G. Rickover, 81. Importantly, Congress looks on him as a guru in nuclear naval matters.
He wanted a huge reactor, with 60,000 horsepower, arguing on Capitol Hill that it would give Trident the high speeds it needed to escape if detected. Critics warned, however, that the noise accompanying such speeds would make the boat easy to detect and destroy. Rickover, as is his policy, declined to be interviewed for this article.
A larger reactor meant a larger and costlier sub, and less money for other new ships the navy wanted. "It was a very close choice," retired Adm. Elmo P. Zumwalt, who was the chief of naval operations, recalled in an interview. "The overriding thing was that you couldn't get Adm. Rickover's support without going along with the requirement for the reactor he wanted."
And why was Rickover's support so important?
"Because you couldn't get congressional support without it," Zumwalt said. "It was clear that we badly needed to get the Trident missile to sea. The only way we could do it was to buy Adm. Rickover's reactors. We had to do it. I considered the Russians a bigger problem than Rickover."
But Rickover was not the only one who had to be accommodated. Other strategists were concerned less with the size of the reactor than with the reach, and therefore the size, of the ultimate Trident 2 missile. It will weigh 63 tons and be 42 feet long and 7 feet in girth. "The missile sized the submarine," said retired Adm. Isaac C. Kidd Jr., former chief of the Navy Material Command.
In any case, the Trident came out about half the size of a World war II battleship. Its diameter is 42 feet. The length of a standard city bus is 40 feet. It is 560 feet long and displaces 18,750 tons. The Strat X sub was to be about 100 feet shorter, was to displace about 8,000 tons, and might have had external missile tubes.
Another decision was to carry 24 missiles inside each Trident, eight more than on a Poseidon boat. Why 24? Miller, the Strat X expert, said the decision was "arbitrarily make, just to make the expensive sub look more cost-effective."
According to new Pentagon timetables the Trident 2 will begin to be deployed much behind schedule, in 1989. It will replace the interim Trident 1, which is basically a Poseidon missile souped up with a third-stage rocket to extent its reach to 4,000 miles. The Strat X panel had urged a brand new, 6,000 missile, and contractors would have completed to build it. A 6,000-mile range is also the goal for Trident 2.
Then-defense secretary Melvin R. Laird and his deputy, David Packard, opted in 1791 for a transition with Trident 1, a missile that could be built only by the thenfinancially troubled Lockheed Corp., the Navy's exclusive missile supplier. The decision was tantamount to a huge noncompetitive award to Lockheed, which is now also the contractor for Trident 2. Hurry, Hurry, Hurry
Laird decided in December, 1971, to try to accelerate the Trident program. He approved a request to Congress for $900 million, partly for search and development, but also partly to start production.
The production request was made even though the Navy was nowhere close to a final Trident design. This was too much even for the usually supportive Senate Armed Services Committee, which rejected the $900 million item in an initial vote in April, 1972.
But even as the committee was voting, a wholly new and unrelated factor was coming into play. It was SALT, the strategic arms limitation treaty with the Soviet Union that Richard M. Nixon signed in May, 1972. To sell SALT in the Senate, Nixon wanted the support of the Joint Chiefs of Staff.
In return for their support, the chiefs wanted more arms commitments. What happened next was reported in an article written in 1795 by John Steinbrunner, a Brookings Institution military affairs expert, and Barry Carter, who worked on SALT as a National Security Council analyst under Henry A. Kissinger.
Adm. Thomas H. Moorer, then chairman of the joint chiefs, "made approval of strategic funding requests, including that for the accelerated Trident program," a condition for his support of the SALT agreements, Steinbrunner and Carter wrote.
The administration fulfilled its part of the bargain by redoubling its effects, asking Congress for $908 million in fiscal 1973 to speed up the Trident program. Appropriate that much, it told Congress, and the first ship can be at sea by 1978.
There was still resistance. Led by Sen. Lloyd Bentsen (D-Tex.), many senators protested that the administration had made no "clear and compelling" case for freezing the design, let alone for starting production in what they portrayed as a violation of Packard's much-touted "fly-before-you-buy" policy. The record showed that concurrent development and production all but guarantees a cost overrun of about 25 percent, they warned.
And, they wondered, why the hurry for Trident when the probably invulnerable Polaris and Poseidon boats would be on station for 20 years to come? (A year later, the Pentagon would admit that not until the early 1980s would the Soviet acquire the capacity to threaten the Polaris/Poseidon deterrent. Even today, there is no evidence that the Soviets can detect and track those boats.)
They also were angered by the Pentagon's coziness about key data, such as whether the number of missile tubes was frozen at 24. At a so premely opportune moment, the Navy assured Sen. Henry M. Jackson (D-Wash.), a Rickover ally, that the number of tubes could be reduced as late as the fall of 1973.
Subsequently, the Navy made a suprise announcement: it would build a $550 million, job creating Trident base in Jackson's Washington state, not, as most everyone had been led to believe, on the Atlantic Coast.
On the Senate floor in 1972 Bentsen tried to knock out the production money, leaving only R&D funds of $400 million. He lost, 47 to 39.
The next year, the adminstration was back with a request for $1.5 billion more for Trident for fiscal 1974.Again there was a promise of a Trident at sea in 1978. Again there was high-powered lobbying, with leading roles being played by then-defense secretary James R. Schlesinger and Rickover and Zumwalt.
And again there was resistance. Pleading for a 1980 delivery date, then-senator Thomas J. McIntyre (D.N.H.) led a fight to cut the outlay to $642 million.He, too, was defeated, 49 to 47, in September, 1973. Congress had voted to proceed with the giant new submarine, full speed ahead, while the Navy rushed to complete the design. Which Cost Method?
There are two basic kinds of shipbuilding contract: fixed-price and the cost-plus-incentive fee which gears the amount of a builder's profit to his success in holding costs down.
It is basic Navy policy to use "cost type" for ships that are the first of a kind. Cost type is regarded as fairer to builders and more realistic, in that new ships almost always turn out to be more complicated and costlier to build than had been expected.
In the case of the first trident, however, there developed what retired Rear Adm. Kenneth L. Woodfin, then deputy chief for contracts in the Navy Sea Systems Command, remembers as "great pressure" to use "fixed-price."
This pressure came partly from Capitol Hill, where skeptical senators had been assured that Tridents could be built relatively swiftly, and for a very specific amount, $1.35 billion each.
It also came from within the Navy, where there were fears that Trident would drain off too large a share of the total constuction budget, and where fixed-price contracts were powerfully urged by the redoubtable Rickover.
All through the lengthy contract negotiations period admirals wrote memos reminding each other that a cost-type procurement would be right for the Ohio. At one point, Adm. Kidd, nominally Rickover's superior officer, wrote that his "convictions were reaffirmed that a cost-type contract is the responsible and proper instrument to build a first-of-class ship. The lead Trident is no exception."
Rickover, however, is known to have argued internally that Trident was nor really different from predessor submarines, just larger, that it was "bread-and-butter shipbuilding," and that a fixed-price contract was a necessary discipline on the constuction process.
And when the Navy, in May, 1973, asked two shipyards to submit bids to build the Ohio, it was on a fixed-price basis.
One of the shipbuilders, Newport News Shipbuilding and Drydock Co. of Virginia, refused. Instead, it offered to build the Ohio on a cost basis with delivery in May, 1981, more than three years after the delivery date the Navy had dangled temptingly before Congress.
Newport News Shipbuilding could afford to be this assertive in its response to the Navy: it is the only builder of nuclear-powered surface warships and submarines, as well as of conventional merchant ships, and so it did not need the business that badly.
By contract, the other shipbuilder, Electric Boat in Groton, builds only submarines. It is a company with one customer: the Navy.
At the outset, notable, even weaker Electric Boat refused to undertake the Ohio on a fixed-price basis. In a letter to the Navy in November, 1973, the company said there were too may "inherent cost uncertainties" to justify a fixed-price commitment.
Its plea was unavailing. The Sea Systems Command told Electric Boat to resubmit its proposal in fixed-price form. Company counsel William Gorvine was asked in an interview earlier this year why the Navy was so insistent. "My more-than-belief is that it was Adm. Rickover," he replied.
In the close-order contract negotiations that followed, the Navy and Electric Boat each had rules of thumb for extrapolating costs. Essentially, these derived from standard calculations, the man-hours required to build, say, a piping system, and from experience.
Electric Boat had built its first submarine in 1900 and, at peak production in World War II, produced one every two weeks. The company also had done some of the preliminary research and development work on Trident and a full-size wooden mock-up.
Yet judgments and guesses were unavoidable. For one thing, Govine said, the Navy was able to provide few detailed drawings, leaving Electric Boat with "very little information" on which to base cost estimates.
Also, the company would rely on two new and untested major production resouces: a $150 million land-level submarine construction facility, the world's first, and a "revolutionary" plant at Quonset, R.I., for automated prefabrication of 42-foot-diameter hull sections.
Predictably, the company and the Navy each came to the negotiating table with estimates favoring its own side. In March, 1974, the direct costs of materials were figured by the company at $64.6 million and by the Navy at $53.3 million; of manufacturing labor, $98.6 million as against $68.7 million, and of overhead, $74.4 million against $53.2 million. The company total for hull construction was $308.9 million, including a 14.2 percent profit.
It was striking that the Navy total, $244.7 million, coincided with the amount budgeted by the Sea Systems Command. Just such practices in the Pentagon had riled Jerome H. Stolarow, once the General Accounting Office's senior procurement analyst.
"I think the planning estimates are not honest," he told a House Government Operations subcommittee in 1979. The subcommittee found that, over the 1970, every major weapons system had come in over the planning estimate, and the average final cost had turned out to be more than double the initial figure.
In the Trident case, there were similar internal objections, voiced at the time. One came from Navy financial specialist P.W. Peterson.
"A more realistic target price," one allowing adequately for expected additional costs of $34.9 million and for a profit of $31.1 million, was $310.7 million, he wrote in an internal paper when the Navy was shooting at $244.7 million. The lead ship, he said bluntly, was $66 million short of being "fully funded."
The negotiations bogged down. Kidd then revealed his worries about the basic course the Navy was steering, writing a March 18, 1974, memo "about the probability of (1) budget figures driving the pricing of the ship contract, (2) budget figures dictating the use of an inappropriate type of contract and (3) and unreasonable delivery date December, 1977."
Kidd sent the memo to Robert C. Gooding, the vice admiral (three stars) who headed the Sea Systems Command in which Rickover (four stars) was, on the organization chart, a subordinate.
A decision was finally made to go back to the bargaining table for another 60 days. Those 60 days produced a contract, a marvelously inventive rubber document that both was and was not for the fixed price the Navy wanted.
It was, as the now-retired Gooding observed in an interview, a fixed-price contract with "rather liberal provision." At the top levels of the Pentagon, Rear Adm. Woodfin wrote in a memo, the contract "was epitomized as in reality a 'cost-type with a ceiling.'" He underlined the word "reality."
As noted, this contract was only for the hull, including installation of government-furnished equipment. The administration's current $2 billion estimate includes some of that gear, R&D and a share of the base at Bangor, Wash.
But it excludes a pro-rated share of tens of billions of dollars to be spent for both interim and final missiles, nuclear reactor cores and fuel, a projected East Coast base and support costs over the system's life cycle.
The joker in the Electric Boat contract was that the difference between "target cost" and "ceiling price" was the greatest in Navy history. These were its terms:
* It set the "target cost" of the Ohio hull at $253 million, and provided a profit (or "incentive") of an aditional $32.4 million. But target plus incentive were not all the Navy would pay. The contract also held out what were called "share lines" to Electric Boat. These were provisions for sharing costs in excess of the target figure.
* Of the first $26.6 million in such costs, the Navy promised to pay 95 percent. Electric Boat attorney Gorvine acknowledged in the interview that this was a roundabout way of writing into the contract the target figure "we really believed in," meaning $279.6 million. Yet it left the Navy able to say on Capitol Hill that it was staying within its $253 million authorized budget and cash reserves.
* But the contract also contained the further promise that the Navy would pay 85 percent of costs from $279.6 million to $385.4 million, the "ceiling price." This ceiling was 152 percent of the target price. Only beyond that point would the company become fully liable for costs.
* Finally, all these arrangments were independent of inflation. The Navy agreed to pay 100 percent of cost overruns attributable to inflation, no matter how late delivery might be, and no matter who would be at fault for late delivery.
In a touch of pure showbiz, the Navy extracted from Electric Boat a penalty-free, non-binding pledge to make its "best efforts" to deliver the Ohio in december, 1977. It did this even though a separate contract set a mid-1978 date for IBM to deliver the command control system, so that an Ohio delivered in December, 1977, would have been inoperable.
There was also a "guarantee" of delivery by April, 1979, but once again no penalty for being late.
The Ohio contract also spoke of work on three more Tridents. At one point Electric Boat had wanted to be guranteed contracts for these "follow" or "option" vessels. The Navy had balked, because Congress had not funded them. But it did the next best thing: it spelled out how much it would pay Electric Boat if the company did get the contracts.
At the time, reliable cost data even for the Ohio were relatively scanty. Yet the Navy somehow divined precise target costs and ceiling prices for each of the three option subs, boats that had yet to be purchased and that would not be delivered for several years. The putative combined ceiling price for all four hulls set at $1.2 billion: 147 percent of the combined target costs.
Adm. Kidd, with the candor that is his hallmark, now says, "Obviously, in retrospect, there were a lot of rash promises made, and bad guesses." He had resisted the Ohio contract, then went along.
"In retrospect, I was wrong," he now says. "In retrospect, it's probable, one can never be absolutely sure, that we would have been better off if I had stuck by my guns."
Another memo Kidd wrote at the time suggests under what pressure he, the other flag officers and the Navy generally were.
"Keep in mind," he said, "that the Navy and the United States can only stand to lose if we fail to come up with a reasonable and practicable solution devoid of the guesswork and optimism which has characterized so many of our past shipbuilding contracts."
The Navy's top procurement specialist, however, did not acquiese in the contract. He is Gordon W. Rule, praised by Kidd as "one of the finest, if not the finest, contracting gentleman I've been privileged to be associated with."
Rule was honored by the Navy with its highest civilian award for distinguished service. A famously outspoken civil servant, now retired, he was then head of the Navy's Procurement Control and Clearance Division, which reviews the business aspects of major contracts before they are let.
Asked to clear the Ohio contract, Rule refused.
It has a "built-in overrun" and was "the most flagrant and unforgiveable example of the Navy knowingly insisting upon the wrong kind of contract," he said in an interview.
Partly because Rule refused to back off, the Navy procurement brass bucked the contract up to then-deputy defense secretary Bill Clements, now the Republican governor of Texas, who asked an aide, Vice Adm. Eli T. Reich, to analyze it.
The award of a lead ship "under other than a cost-type contract appears to run counter to the stated Navy policy," the now-retired officer told Clements in a memo.
But both the contracting officer and the project manager seemed "sanguine that the contract can be brought in successfully under the FPI [fixed-price-incentive] arrangment," he wrote. "We are constrained to agree with them even though we do not share their extreme optimism." He advised Clements personally to seek "a concurrence by the top management" of General Dynamics that it takes "satisfaction" in the contract.
Reich said he believes Clements did this. The company's response could not have been a surprise: it was delighted to get a sole-source, risk-free contract that would keep its threatened shipyard busy for its only customer for years to come and could bring in more than $1 billion in the first, four-boat phase of what could be a 15-boat or even larger program.
The contract was signed July 25, 1974. An Epic Event
In the tight world of defense procurement, Rule's refusal to sign off on the Trident contract was an epic event. Word of it quickly seeped out to Rep. Les Aspin (D-Wis.), a member of the House Armed Services Committee and frequent critic of the Pentagon, where he once worked in systems analysis under Robert S. McNamara.
Aspin wrote Rep. Charles E. Bennett (D-Fla.), chairman of the Armed Services seapower subcommittee, urging an investigation. He had heard that the contract might be headed for "a classic screw-up," Aspin said.
Bennett's response was unenthusiastic. Like many other senior members of the military committees on Capital Hill, he does not claim to be a zealous overseer of the armed services. "The main function of Congress is to get whatever national defense is needed," he said. "Oversight is not a major function."
The chairman did not feel that he could ignore Aspin's request entirely, however. So he asked for "input" from Rule and the GAO.
Rule's 19-page response was so blistering that Adm. Kidd forwarded it only with some anguish, saying in a covering letter defending the contract that he felt Rule had "transgressed the bounds of propriety."
Among many other things, Rule said the Navy had simply caved in to what he called the "dictates" of Adm. Rickover in drafting the contract; that as a result the contract carried the label "fixed price;" but that in fact there was "an obvious . . . overrun of target cost built in."
He also said the contract was reallfy for four ships, not one; that its provisions as to three option ships after the first were part of a "quid pro quo " for Electric Boat's acceptance of a fixed-price arrangment, and that its price limitations were meant to guarantee that Newport News Shipbuilding would never invest the $50 million needed to get started as a competitor to Electric Boat in the Trident business.
The GAO came to almost the same conclusions. Its heretofore undisclosed draft report, completed in February, 1975, said that, because of "considerable risks" and "uncertainties -- in design, in achieving performance goals, in obtaining required material and labor over a long performance period, and in completing expanded facilities," a fixed-price contract "does not seem appropriate" for the Ohio . The word "not" was underlined. "Solely on the basis of the size and complexity of the Trident as compared with other previous submarines, a cost-type contract would have been more appropriate," the report continued.
It also said that:
* With only 15 percent of the drawings complete for the Ohio , and with a large share of the cost estimates for materials unsupported by quotations from suppliers, the Navy lacked a "realistic" or "valid" basis for cost projections. Consequently, "We do not know whether the target cost . . . is underestimated or overestimated."
* "We do not believe that the Trident contract should be characterized as a competitive procurement."
* The commitment to specific prices for the option ships was made "too early."
* The experience gained by Electric Boat in building the first four Tridents will leave Newport News unable to complete on price.
* The Navy's insistence on delivery of the option ships no later than December, 1980, made it unrealistic for Newport News to seek to complete, it having set May, 1981, as the earliest delivery date for the lead boat.
* On the other hand, although it is "evident' that the contractor will build the three option ships, "we find no evidence that Electric Boat agreed to accept [a fixed-price contract] because the Navy gave it a four-ship contract."
Three GAO officials came to Bennett's office to present him with these findings on Feb. 12, 1975. They were not received in friendly fashion by Bennett and two aides. Flanking them were two admirals and a lieutenant commander who had key roles in pushing the contract through and who had close ties to Richover. Not invited was Rule.
One participant wrote in a memo at the time that Bennett, becoming more and more agitated as the GAO officials described the contract's faults, accused the congressional watchdog agency of "supplying ammunition to the country's enemies."
In their presence, Bennett then dictated a letter to Elmer B. Staats, then comptroller general and head of the GAO, saying that as drafted the GAO report would "not be helpful to Congress, or to the country, in deciding on the propriety of the contract" but would "only confuse and mislead."
All he really wanted, Bennett wrote, was " a simple, preferably one-sentence opinion as to whether this is the wrong kind of contract."
Perhaps disarmingly, he added: "Do not let any of my opinions as expressed in this letter influence your substantive judgment one way or the other."
Staats respounded in a letter in which he first accurately summed up the report, then pulled some of its sharpest teeth by saying, "We do not believe the Navy's choice of a contract was wrong," and by rating its criticisms of the Navy's handling of the contract "minor." GAO critics have complained for years that it tends to find what Congress wants it to find.
A week after he received Staats' letter, Bennett exploited it by issuing a news release with an exultant headline: "GAO Finds Trident Contract Charges Generally Unfounded."
Shortly afterward, Rule, mentioned several times in the news release, became the rare civil servant who excoriates a member of Congress.
In a six-page letter, he accused Bennett of an attempted "cover-up," of a "disservice," of helping "to perpetuate the horrible track record we have in buying ships in recent years," and of an effort to browbeat Staats into providing "a watered-down version [of the GAO staff report] to better suit your purpose."
Rule also called the news release, "misleading and inaccurate," and said it "fails utterly to reflect' the GAO's "fair and factual" and "unlaundered" findings and was as effort to bury them.
Recalling the meeting with the GAO investigators, rule told bennett that "You . . . obviously did not like what you heard or perhaps did not understand it." he enclosed a copy of the draft report so "that you may read it someday and learn exactly what the GAO said."
Bennett's response was gentle: "I certainly hold you no ill will; and frankly, I was surprised that your letter to me indiccated grat senitivity that I felt had no foundation in anything that I had done or thought." The letter was closed, "with kindest regards." Meanwhile, in 1981
Over the years, long after Congress lost interest, it developed that Rule and the other critics were right. On several occasions, the Trident contract produced public embarrassment for the navy. One was a November, 1977, news conference called after reports appeared in the press that the Trident was far over budget.
Confirming a $400.8 million overrun on the Ohio , the Navy accounted for it with confusing, inconsistent and wrong numbers it kept changing on the spot and later.
In its final breakdown of the $400.8 million, given to the GAO months afterward for an April, 1978, report, the Navy listed overruns of $114.4 million on the Electric Boat contract, $80 million on design changes, $73.2 million on government-furnished gear and $133.2 million for inflation.
Those who had favored a fixed-price contract had argued internally that the Trident was just like any other submarine, no special case. Now the Navy reversedd itself in public.
"I'd like to emphasize that this ship is over twice as large as any submarine we've ever built before," rear adm. donald p. hall, a trident program director, told the news conference. "The technology is extremely advanced. . . ."
So did Edward A. Hidalgo, secretary of the Navy in the Carter administration. When asked if Trident was a new class of ship, Hidalgo said: "God knows Trident is. Notoriously."
Again this year the Trident contract came to the surface, this time mainly over questions of quality of workmanship and delay. The new sub is not ready, even as the old Polaris subs have to be taken out of the water.
An indignant Navy has left no doubt whom it holds responsible for the gap between promises and performance, Electric Boat, as though the Navy had had no role in the broken promises. "Pure flimflam," says Rule.
And how much is the Navy going to end up paying Electric Boat for the ohio ? In 1978 that question was asked at a Senate Armed Services Committee hearing.
The Navy's answer was that it could not say. There was no way of separating out the first Trident from the three follow ships for which Electric Boat had been granted the contracts in due course.
Why was there no way? Because, at Eletric Boat's instigation 2 1/2 years earlier, the Navy, telling no one, not even its own contract-clearance shop, had consolidated the contracts into a single group.
"Contractual arrangements are such that target and ceiling are only applicable for each group of ships, not each ship," Vice Adm. C.R. Bryan, then head of Sea Systems, told the committee.
After the Navy failed to respond to repeated Washington Post inquiries about the consolidation and related matters, Rep. Bennett volunteered to relay them directly to Navy Secretary John F. Lehman Jr.
Two months later, prodded also by Freedom of Information Act requests, the Navy did produce some figures. The ohio hull, it said, will exceed its $285.4 million "target price," made up to the target cost and agreed-upon profit, by $100.3 million, or 35 percent, not counting the costs of inflation and late delivery. The first three follow ships also will exceed their combined target prices of $699.4 million by $124.8 million.
These figures came over the signature of acting Navy Secretary Robert J. Murray. "No attempts to conceal 'overruns'" have been made, he wrote. Inflation aside, he said "there is no projected overrun" on the four hulls.
That meant no overrun of the combined ceiling price, the price that's 147 perccent of the combined target cost, the price tag sold to Congress a decade ago.
The Navy has since expanded the first group of ships to seven. Not until all seven are completed, perhaps in 1986, will their final costs "be releaseable to the public," the Defense Contract Audit Agency said in respons to an inquiry.
If that is so, the taxpayers will not learn the final cost of the Ohio until five years after it is commissioned and 15 years after Congress first ordered an impressive new weapon system called Trident.