Defense Acquisitions

The Navy is investing over $3 billion to develop technologies for a new type of aircraft carrier--the Ford class--and it expects to spend almost $11 billion to design and construct the USS Gerald R. Ford (CVN 78)--the lead ship of the class. New technologies are to improve the carrier's performance and reduce crew size. The Navy requested authorization of CVN 78 in its fiscal year 2008 budget. GAO was asked to assess the Navy's ability to meet its goals for developing the new carrier. Specifically, this report assesses (1) the extent to which technology development could affect the capability and construction of CVN 78, (2) the status of efforts to achieve design stability, and (3) the challenges to building CVN 78 within budget. To accomplish this, our work includes analysis of test reports, development schedules, and ship progress reviews; interviews with Navy and other officials; and examinations of cost estimates and our own past work.

Delays in technology development may lead to increases in CVN 78's planned construction costs and potential reductions in the ship's capability at delivery. CVN 78's success depends on on-time delivery and insertion of fully mature and operational technologies in order to manage construction costs and enhance ship capabilities. Technologies that are highly integrated into the construction sequence or provide vital capabilities for the ship to carry out its mission are the most critical in achieving this goal. While the Navy has mitigated the impact of some technologies, such as the nuclear propulsion and electric plant, three systems--the electromagnetic aircraft launch system (EMALS), the dual band radar, and the advanced arresting gear--have faced problems during development that may affect the ship's construction costs. The Navy has made significant progress in maturing the ship's design. With about 70 percent of the ship design complete, design appears on track to support the construction schedule. A structured design approach and a lengthy construction preparation contract have enabled the program to perform more work prior to construction than on previous carriers. The program, however, may face challenges completing more detailed phases of design because of the tight schedule remaining for development of the ship's critical technologies, which in turn could impede the design process--and construction--of CVN 78. Costs for CVN 78 will likely exceed the budget for several reasons. First, the Navy's cost estimate, which underpins the budget, is optimistic. For example, the Navy assumes that CVN 78 will be built with fewer labor hours than were needed for the previous two carriers. Second, the Navy's target cost for ship construction may not be achievable. The shipbuilder's initial cost estimate for construction was 22 percent higher than the Navy's cost target, which was based on the budget. Although the Navy and the shipbuilder are working on ways to reduce costs, the actual costs to build the ship will likely increase above the Navy's target. Third, the Navy's ability to manage issues that affect cost suffers from insufficient cost surveillance. Without effective cost surveillance, the Navy will not be able to identify early signs of cost growth and take necessary corrective action.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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