This all started March 23 when a press release announced that, since early 1981, the Navy had taken delivery of 15 new ships manufactured under cost and ahead of schedule at a savings of $91 million. That's nice, we said when we called the Navy, but how many ships during that period came in behind schedule and over budget? Three months later, the Navy provided the official answer on a typewritten sheet of paper: eight ships were delivered either behind schedule or cost more than originally planned.
The only significant overrun was $144.7 million for four hydrofoils, a figure "impacted," the Navy said, "by the management decision to reduce the number of ships built from 28 to five." Missing from this list of underachievement is the submarine program because, Navy spokesmen explained, contracts for both Trident and SSN attack submarines had been renegotiated so they were no longer overdue or over cost.
The General Accounting Office, after a recent check with the Electric Boat Division of General Dynamics, estimated that total "cost growth" for 28 Trident or SSN submarines as of June, 1981, was $233 million. "Cost growth," the GAO said, "will likely continue . . . because Electric Boat consistently understates the single largest cost element in submarine construction--direct labor." The Navy, the GAO went on, "has known this but has used Electric Boat's unrealistically low estimates to establish original and updated contract costs.