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Friday, November 24, 2017

US Navy Warns Congress that Piecemeal Cruiser Upgrades Costly

April 30, 2015

U.S. Navy Secretary Ray Mabus on Thursday warned that congressional plans for a piecemeal modernization of 11 cruisers would cost billions of dollars more than the Navy's original plan and meant the warships would have to be retired earlier.
 
Mabus acknowledged concerns voiced by some lawmakers that the Navy secretly planned to decommission 11 cruisers instead of modernizing them, but said "not one of those things is correct."
 
"They will still be under the command of the CNO (Chief of Naval Operations). They will never go out of commission," he told reporters after a speech at the National Press Club.
 
Mabus said the Navy remained in dialogue with Congress about the issue, and would gladly accept congressional language aimed at ensuring modernization was actually completed.
 
For instance, he said Congress could impose financial penalties if the Navy reneged on the plan, or require it to sign contracts with U.S. shipyards for upgrade work.
 
The alternative, included in the House Armed Services Committee's proposed 2016 defense authorization bill, would cost more, he said, and would also reduce the Navy's flexibility, and meant some ships would ultimately be retired earlier.
 
"If we do it piecemeal, we're not going to have enough money to do all the modernization," Mabus said.
 
Chief of Naval Operations Admiral Jonathan Greenert told the chairman of the House committee in a letter this week that the plan included in the markup would eliminate $4.5 billion in savings projected from fiscal 2015 to 2026, and would lead to retirement of the Ticonderoga class of cruisers by 2035, instead of allowing their continued use into the 2040s.
 
Congress rejected the Navy's broader plan in adopting the fiscal 2015 budget, opting for the so-called 2-4-6 plan, which would put two cruisers a year into shipyards for modernization, with work to last no longer than four years and no more than six ships to be in work at any time.
 
In his letter, Greenert said that plan would cut the expected savings to $300 million to $400 million, but the new House language, which cuts modernization time for each ship to two years, would eliminate all savings since it would not allow the Navy to reduce crews on the ships.
 
Huntington Ingalls Industries Inc, General Dynamics Corp and other companies are watching the debate between Congress and the Navy given their interest in bidding for the modernization work.
 
 
(By Andrea Shalal; Reporting by Andrea Shalal; Editing by David Gregorio)
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