The Navy’s new multibillion-dollar aircraft carrier, already beset by delays and cost overruns, is likely going to be delivered incomplete and will require even more money to finish, according to a government watchdog report.
The spending on the Gerald R. Ford carrier after it is delivered could run nearly as high as $1 billion, according to the Government Accountability Office , and push the total cost well above the $12.9 billion cap set by Congress.
The additional money would “not [be] captured in the total end cost of the ship, thereby obscuring the true costs of the ship,” the report said.
The bottom line, the GAO said, is that “the Navy will have a ship that is less complete than initially planned at ship delivery, but at a greater cost.”
The Gerald R. Ford is one of three new nuclear-powered aircraft carriers that will serve as successors to the Nimitz-class carriers designed in the 1960s. The Navy plans to spend $43 billion developing and building the new ships, which are designed to be far superior. Built by Huntington Ingalls Industries, they’ll be able to increase the rate of aircraft taking off, require less manpower and have new technologies such as an electrically generated magnetic field to propel aircraft off the ship.
To keep the Navy on budget with such a massive project, Congress imposed a $10.5 billion cost cap in 2007 for the Gerald R. Ford, and a cap of $8.1 billion for subsequent carriers. Since then, the Navy sought, and was granted, adjustments that now cap the costs at $12.9 billion for the Ford and $11.5 billion for the additional carriers.
The Gerald R. Ford is currently scheduled to be delivered in March 2016. But the GAO says that some key requirements, including showing that it can increase the rate of aircraft launches, won’t be completed by that delivery date. The carrier also may not meet a requirement that would allow the Navy to increase the size of the crew over the ship’s life.
The increasing costs have drawn the ire of Sen. John McCain (R-Ariz.), whose already outsized influence on defense acquisition programs is about to become even larger when he takes over as chairman of the powerful Armed Services Committee in the next Congress.
McCain has shone a light on all sorts of programs that have run into trouble, from the Marine One helicopter to the F-35 Joint Strike Fighter. And he pledged to keep the carrier in his sights.
“It appears the Navy is trying to use post-delivery ship costs simply to avoid congressionally mandated cost caps for the Ford-class carrier,” he said in a statement. “The Armed Services Committee will be seeking further explanation from the Navy on this troubling report and will work to hold those responsible for these cost overruns accountable.”
Loren Thompson, a defense analysis and consultant, said that McCain’s leadership could force contractors and program managers to be more realistic with cost estimates.
“Program managers and contractors sometimes are excessively optimistic in projecting how quickly and inexpensively products can be delivered,” he said. “But knowing McCain is waiting to compare promises with reality could inject more discipline into the process.”
The GAO recommended in its report, released Thursday, that Congress revise the caps to include the post-delivery spending and accurately reflect the true cost of the ship. In response, the Pentagon said that a revision was unnecessary.
“The department acknowledges that remaining within the cost cap is challenging, but contends that it is achievable.”
Officials at Newport News-based Huntington Ingalls have not yet had a chance to review the GAO report, said Beci Brenton, a company spokeswoman. But she said in a statement that the Gerald R. Ford is “85 percent complete and we continue to achieve momentum in our performance. While this is a first of the class ship with the unique challenges that come with that, we are increasing efficiencies and leveraging lessons learned to retire risk.”
The company’s Web site says that the ship would save the Navy a projected $4 billion in maintenance costs over its 50-year life span.
The Navy has a $96 million reserve fund to cover additional unforeseen costs. But the GAO said “this cash reserve is unlikely to be adequate to cover the entire expected cost growth of the ship.”
The total cost to complete the aircraft carrier after it is delivered range from $780 million to $988 million, according to one government estimate.