Updated March 26 at 7:54am
defense industry

Navy said to seek funding increase for Virginia-class submarines


WASHINGTON - The U.S. Navy will propose increased submarine and aircraft carrier funding in its budget request for the fiscal year beginning Oct. 1, while sticking to its plan for the troubled Littoral Combat Ship, according to internal figures obtained by Bloomberg News.

The budget seeks $5.41 billion for the Virginia-class submarine made jointly by Huntington Ingalls Industries Inc. and General Dynamics Corp., a 27 percent increase from $4.25 billion this year. The request would pay for two vessels in fiscal 2014 and includes a $1.6 billion down payment Congress has approved for two additional submarines in fiscal 2015.

The Navy’s request is to be released Wednesday as part of the Pentagon’s $526.6 billion budget plan.

It includes $1.68 billion for continued development and construction on the CVN-21 Gerald R. Ford-class aircraft carrier program, more than doubling this year’s $781.7 million request. Of that, $945 million would bankroll continued detailed design and construction of the CVN-79 John F. Kennedy, the second Ford- class carrier.

Huntington Ingalls and General Dynamics also benefit from $1.7 billion in the 2014 budget plan for one DDG-51 destroyer Congress added last month as part of final negotiations on this year’s funding request.

Holding steady

The Navy is requesting $1.8 billion for continued procurement of the next four Littoral Combat Ships built by Lockheed Martin Corp. and Austal Ltd teams. The request is consistent with last year’s plan in the $37 billion program managed by Bethesda, Md-based Lockheed Martin and Henderson, Australia-based Austal.

The ship, intended to be a small and speedy vessel for use in shallow waters close to shore, has been beset by troubles, including cracks and corrosion. Its price has doubled since 2005, to $440 million per vessel, and a decision to simultaneously build two versions will add to long-term operating costs.

Vice Admiral Tom Copeman, commander of naval surface forces, prepared a memo late last year calling on the Navy to consider a ship with more offensive capability after the first 24 Littoral Combat Ships are built.

The increased submarine and destroyer funding in the 2014 plan underscores the importance of a spending plan funding the government through Sept. 30, which was passed by Congress last month and signed by President Barack Obama. Before that, the Pentagon was operating under a continuing resolution that didn’t contain added submarine or destroyer dollars.

Submarine contract

“The Navy’s inclusion of a second Virginia-class submarine in fiscal 2014 follows through on Congress’ action,” Ronald O’Rourke, naval analyst for the nonpartisan Congressional Research Service, said in an e-mail statement.

The Navy’s request will seek authority to enter into another multiyear contract for as many as 10 additional submarines. The current contract expires this year. Babcock & Wilcox Co., based in Charlotte, N.C., makes the submarine nuclear reactors.

Still, Pentagon funding may face additional across-the- board reductions if automatic cuts known as sequestration stay in place throughout fiscal 2014.

Debate about the CVN-21 aircraft carrier, built by Newport News, Va.-based Huntington Ingalls, will intensify this year because the Navy will ask Congress to increase a cost ceiling imposed on the first carrier in the fiscal 2007 defense authorization bill. The ceiling, which allowed for increases to keep up with inflation, is now $11.8 billion.

Cost cap

“We expect to spend $12.3 billion and, if I am capped at $11.8 billion, that would obviously cause us some challenges,” Rear Admiral Thomas Moore, the Navy’s program executive office for aircraft carriers, told Bloomberg News in November.

“We are going to put a proposal before Congress,” Moore said. “We can’t spend more than $11.8 billion on the ship right now.”

Arizona Senator John McCain, the senior Republican on the Senate Armed Services Committee’s seapower subcommittee, last year asked the U.S. Government Accountability Office to review the Ford-class program’s cost, schedule and performance status.

The GAO review will probably be completed by the time the Senate takes up consideration of the Navy’s request to raise the cost cap.

Lieutenant Courtney Hillson, a Navy spokeswoman, declined to comment on details of the spending plan.

“Until the fiscal 2014 president’s budget request is submitted to Congress later this week, and becomes part of public record, all decisions are pre-decisional and it would be inappropriate to discuss specific details,” Hillson said.

The Navy is “committed to working more efficiently and cost-effectively in this resource-constrained environment,” she said.


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