Navy Ships

Seawolf submarine detail design and SSN-21 construction continued to experience cost increases and schedule delays during 1993. The estimated total cost of detail design and lead ship construction rose about $17 million (2.5 percent) and $39 million (3.5 percent), respectively. Design cost increases were caused by rescheduling drawing issue dates to meet Electric Boat's requirements, design inefficiencies associated with that effort, and paying overtime. Factors contributing to construction cost increases included increases in direct labor, increases in overhead, and additional work. The detail design contract fell another 15,000 hours behind schedule because of delays in preparing design drawings and integrated logistics support data. SSN-21 construction fell four months behind the construction schedule, which was revised in March 1993. According to Electric Boat and Navy Seawolf program officials, late design data, an eroding industrial vendor base, and later material contributed to the delays. Although Electric Boat has begun corrective action aimed at recovering construction delays and meeting the SSN-21's revised May 1996 delivery schedule, the Supervisor of Shipbuilding at Electric Boat continues to be concerned about Electric Boat's ability to recover the construction delays.

GAO found that: (1) during 1993, Seawolf design costs increased by about $17 million, SSN-21 lead ship construction costs increased by about $39 million, and both programs continued to experience schedule delays; (2) the increases in detail design costs were attributable to contractor drawing delays, design inefficiencies, and overtime costs; (3) increases in lead ship construction costs were due to increases in direct labor, overhead, and workload; (4) the Seawolf detail design contract fell behind schedule by an additional 15,000 hours because of delays in preparing design drawings and integrated logistics support data; (5) SSN-21 construction fell 4 months behind schedule and needed to be revised in March 1993; (6) the contractor and Seawolf program officials believe that late design data, an eroding industrial vendor base, and late materials contributed to construction delays; and (7) although the Navy remains concerned about an insufficient SSN-21 construction workforce, defense officials believe that the contractor will eliminate construction delays and be able to meet the revised May 1996 delivery schedule.