Saturday, April 26, 2008

This Does Not Surprise Me

What happens when we pay an airplane maker to build a boat...for the first time? Massive cost overruns, unbelievable delays and a fabulous fightin' ferry boat. Yesterday's NY Times offers a Lesson On How Not To Build A Navy Ship:

A project heralded as the dawning of an innovative, low-cost era in Navy shipbuilding has turned into a case study of how not to build a combat ship. The bill for the ship, being built by Lockheed Martin, has soared to $531 million, more than double the original, and by some calculations could be $100 million more. With an alternate General Dynamics prototype similarly struggling at an Alabama shipyard, the Navy last year temporarily suspended the entire program.

The program’s tribulations speak to what military experts say are profound shortcomings in the Pentagon’s acquisitions system. Even as spending on new projects has risen to its highest point since the Reagan years, being over budget and behind schedule have become the norm: a recent Government Accountability Office audit found that 95 projects — warships, helicopters and satellites — were delayed 21 months on average and cost 26 percent more than initially projected, a bill of $295 billion.

In a narrow sense, the troubled birth of the coastal ships was rooted in the Navy’s misbegotten faith in a feat of maritime alchemy: building a hardened warship by adapting the design of a high-speed commercial ferry. As Representative Gene Taylor, the Mississippi Democrat who leads the House Armed Services Subcommittee on Seapower and Expeditionary Forces, put it, “Thinking these ships could be built to commercial specs was a dumb move.”

Behind the numbers in the Accountability Office study, experts say, is a dynamic of mutually re-enforcing deficiencies: ever-changing Pentagon design requirements; unrealistic cost estimates and production schedules abetted by companies eager to win contracts, and a fondness for commercial technologies that often, as with the ferry concept, prove unsuitable for specialized military projects.
A totally predictable outcome. Fer crissakes the Navy asked a new boat builder to build a new boat in a new way. Fast:
In their haste to get the ships into the water, the Navy and contractors redesigned and built them at the same time — akin to building an office tower while reworking the blueprints. To meet its deadline, Lockheed abandoned the normal sequence of shipbuilding steps: instead of largely finishing sections and then assembling the ship, much of the work was left to be done after the ship was welded together. That slowed construction and vastly drove up costs.

“It’s not good to be building as you’re designing,” said Vice Adm. Paul E. Sullivan, commander of the Navy branch that supervises shipbuilding.
No shit Admiral.
Despite the problems, the Navy secretary, Donald C. Winter, and other top Navy officials say they remain committed to building 55 of the ships, once a steady, fixed-price production run can be assured. Even at about $500 million apiece, Navy officials add, the coastal ships would be a bargain compared with most Navy combat vessels.
“Bargain” is such a relative concept. In this case it's like calling a $200 Neiman-Marcus hairbrush a bargain 'cuz everything else in the store is so damn expensive. Lockheed is a major military contractor so it should be a cinch for them to build a boat. Except:
Lockheed had virtually no shipbuilding experience. But in keeping with a Pentagon policy that called for letting big military contractors run complex projects with minimal government supervision, the Navy made the companies primarily responsible for all phases of development — from concept studies to detailed design and construction.

In theory, the contractors’ business and technological acumen would save taxpayer dollars. But the Navy agreed to reimburse the companies for cost overruns rather than setting a fixed price, leaving little incentive to hold down costs.
Fixed prices? Who needs fixed prices? It's no surprise how much military contractors love this type of deal. Since fixed prices emerged in the ‘70s, they’ve been whining how it doesn’t “work” for them. Here’s what we’re supposedly getting for our money:
The Lockheed proposal called for a steel single-hull ship 378 feet long and 57 feet wide. It would have a spacious flight deck and space for two helicopters, a stern ramp and side door near the waterline for launching and recovering small boats, and large interior compartments that could be quickly reconfigured for different weapons systems. But as Lockheed and the Navy were completing contract negotiations in 2004, the rules changed drastically. Commercial ferry standards, the Navy determined, would not do.

The underlying principle behind the decision, Admiral Sullivan said, was that the new ships had to be able to “hang tough in a storm and take some battle damage and still survive long enough” for the crew to be rescued.
Dunno. Regardless of context the phrase “’still survive long enough’ for the crew to be rescued” doesn't exactly fill me with confidence. This should be of paramount importance to the Navy's central concept in building any ship let alone turning a high-speed civilian ferry into a warship. (Kinda reminds me of the ole SNL sketch: "New Shimmer is both a floor wax and a dessert topping!")

In a show of supreme stupidity, the Navy thought they'd somehow save money this way. It's equivalent to trying to turn a DC-10 into a warplane:
“They were eager to take advantage of commercial practices and the lower cost of buying off the shelf, but they did a lousy job of understanding the war-fighting requirements,” said the military expert, who asked not be named because he was involved with the program. “It was like, ‘You mean you want to put wheels on that car?’ ”
Ugh. More like do you wants wheels, seats, an engine and a roof with that car? How the hell could the Navy start building anything without "understanding the war-fighting requirements?" That is insane. They are the fucking Navy! It gets worse:
Ultimately, there were nearly 600 significant engineering changes affecting nearly all parts of the ship, according to the Navy.
600 goddamn major engineering changes = completely fucking different boat. While the Navy may have felt rushed, Lockheed was in an even bigger hurry to get this boat built:
At Lockheed, executives say they feared that slowing down construction would put them at a disadvantage in their battle to win the contract over General Dynamics.
Now we get to the crux of the problem. But surely the Navy’s own oversight could save the day, right? Wrong. So very, very wrong:
Yet if the project was troubled, the Navy’s oversight at Marinette was less than robust. Because of staffing reductions, the Navy office responsible for supervising shipbuilding initially dispatched no one full time to Wisconsin. Even after a team arrived, it failed to appreciate the severity of problems.

We had very junior people on site,” Admiral Sullivan said.
This project was a major priority for the Navy. When they eventually sent supervisory staff to the boatyard, for some reason the Navy chose “very junior people.” Heckuva job, Sully.

What could be worse than one plane builder working on their first boat? Two plane builders working on the same boat. Lockheed brought G .E. Aviation along for the ride with absolute disastrous results:
The most wrenching setback came in autumn 2005, when a key gear for the propulsion system was cut incorrectly, forcing a 27-week delay in ship construction. Rick Kennedy, a spokesman for G.E. Aviation, the General Electric division that produced the gear, said a machinist had misread a drawing; G.E. absorbed the additional cost.

Shipbuilders usually start with the engine space, which contains the most machinery, then build around it. Because of the gear problem, Mr. McCreary said, “We did just the opposite.”
A 27-week delay over one gear? You have to be fucking kidding me. Even I know that you measure twice and cut once. If my master shipbuilder great-uncle Warren was still alive, this would make his head explode. And still the program soldiers on.
Once the Navy evaluates the two prototypes, it can select one or order a mixed fleet. While it could opt for a different approach, military experts say that seems unlikely, given the need for the new ships and the money and effort already expended.
Yes, like a fool losing big on one slot machine, the Navy won’t change it’s game because it has already lost too much money on its current course. They're betting sooner or later it's gonna payoff. Sooner or later either Lockheed or General Dynamics will work it out:
The Navy recently restarted the program, inviting the two companies to submit fixed-price proposals for three additional ships. Lockheed, still hoping to win the entire prize, said the problems encountered with the Freedom would not be repeated, now that the company has a finished design.

“It will be great, the next time around,” said Mr. North, the program manager. “Lead ships are truly hard.”
I bet they are. Especially when you’re building a ship for the first fucking time. The problem with these DOD development projects is with the decade or so it takes to get it right, if they get it right, we may no longer need it. That's if we really needed it to begin with. Either way the end product is inevitably incredibly more expensive than ever anticipated.

If you can stomach it, read the full Times story here.

+Note: All emphasis in the Times article is mine.