Order Code RS20643
Updated February 19, 2002August 20, 2004
CRS Report for Congress
Received through the CRS Web
Navy CVNXCVN-21 Aircraft Carrier Program:
Background and Issues for Congress
Ronald O'’Rourke
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Summary
The Administration’s proposed FY2003 defense budget requests $243.7 million in
advanced procurement funding for CVNX-1, an aircraft carrier that the Navy plans to
procure in FY2007. The FY2003 budget request includes additional research and
development funding for the ship. The Navy plans to gradually evolve the design of its
aircraft carriers by introducing new technologies into CVN-77 (an aircraft carrier
procured in FY2001), CVNX-1, and CVNX-2 (a carrier planned for procurement around
FY2011). The Navy estimates that CVNX-1 will cost $2.54 billion to develop and $7.48
billion to procure, bringing its total acquisition (development plus procurement) cost to
$10.02 billion. The Navy estimates that CVNX-2 will cost $1.29 billion to develop and
$7.49 billion to procure, for a total acquisition cost of $8.78 billion. A Defense Science
Board task force is currently assessing how aircraft carriers should serve the nation’s
needs in the 21st century; it is to report its findings by the end of March 2002. This
report will be updated as events warrant.
Background
The Navy’s Current Carrier Force. The Navy currently has 12 aircraft carriers
and Defense Department plans call for maintaining the force at this level. Table 1 below
shows the 12 ships in the current carrier force. The Enterprise is a one-of-a-kind nuclearpowered carrier; all the other nuclear-powered carriers are of the Nimitz (CVN-68) class
(with some modifications). Two additional Nimitz-class carriers are under construction
– the Ronald Reagan (CVN-76), which was procured in FY1995 at a cost of $4.45 billion
and is scheduled to enter service in 2002 as the replacement for the Constellation, and the
as-yet-unnamed CVN-77, which was procured in FY2001 at a cost of $4.97 billion and
is Current Administration plans call for procuring the Navy’s next aircraft carrier,
called CVN-21, in FY2007. The Navy in early 2004 estimated that CVN-21 would cost
a total of about $3.1 billion develop and $8.6 billion to procure, for a total acquisition
cost of about $11.7 billion. Advance procurement “down payments” on this ship have
been approved by Congress each year since FY2001.
On August 19, 2004, the Department of Defense (DOD) reported that the estimated
development cost for a 3-ship carrier program (CVN-21 plus two sister ships to be
procured years after CVN-21) had increased by $728 million, to $4.33 billion. DOD
now estimates that the program would have a total acquisition cost of about $36.1
billion ($4.33 billion for development and $31.75 billion for procurement), or an
average of about $12 billion per ship. If much of the $728-million increase in the
estimated development cost is for the CVN-21 itself, then CVN-21’s estimated
acquisition cost may now be more than $12 billion.
In mid-August 2004, it was reported that the Navy’s draft FY2006-FY2011
shipbuilding plan would delay procurement of CVN-21 by one year, to FY2008. Based
on past data for carrier construction programs, such a delay might increase the
procurement cost of the ship by a few or several hundred million dollars, which could
increase its total acquisition cost to well over $12 billion, and possibly something closer
to $13 billion. This report will be updated as events warrant.
Background
The Navy’s Current Carrier Force. DOD plans currently call for maintaining
a Navy with 12 aircraft carriers. The current carrier force includes 2 conventionally
powered carriers (the Kitty Hawk [CV-63], and the John F. Kennedy [CV-67]) and 10
nuclear-powered carriers (the one-of-a-kind Enterprise [CVN-65]) and 9 Nimitz-class
ships [CVN-68 through -76]. The most recently commissioned carrier, the Ronald
Reagan (CVN-76), was procured in FY1995 at a cost of $4.45 billion and entered service
in July 2003 as the replacement for the Constellation (CV-64). The next carrier, the
Congressional Research Service ˜ The Library of Congress
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George H. W. Bush (CVN-77), was procured in FY2001 at a cost of $4.97 billion and is
scheduled to enter service in 2008 as the replacement for the Kitty Hawk.
The Aircraft Carrier Construction Industrial Base. All U.S. aircraft carriers
procured since FY1958 have been built by Northrop Grumman’s Newport News
Shipbuilding (NNSNGNN) of Newport
News, VA. NNS is the only shipyard in the country News, VA — the only U.S. shipyard that can build
large-deck, nuclearpowerednuclear-powered aircraft carriers. The aircraft carrier construction industrial
base also includes
hundreds of subcontractors and suppliers in dozens of states.
Congressional Research Service ˜ The Library of Congress
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Table 1. U.S. Navy aircraft carriers
Name
Hull
number
Propulsion
Length
(feet)
Full load
displacement (tons)
Year
procured
Year
entered
service
Kitty Hawk
CV-63
fossil fuel
1,046
84,000
FY1956
1961
Constellation
CV-64
fossil fuel
1,046
84,000
FY1957
1961
Enterprise
CVN-65
nuclear
1,102
94,000
FY1958
1961
John F. Kennedy
CV-67
fossil fuel
1,052
81,000
FY1963
1968
Nimitz
CVN-68
nuclear
1,092
92,000
FY1967
1975
Dwight D.
Eisenhower
CVN-69
nuclear
1,092
92,000
FY1970
1977
Carl Vinson
CVN-70
nuclear
1,092
92,000
FY1974
1982
Theodore
Roosevelt
CVN-71
nuclear
1,092
96,000
FY1980
1986
Abraham Lincoln
CVN-72
nuclear
1,092
102,000
FY1983
1989
George
Washington
CVN-73
nuclear
1,092
102,000
FY1983
1992
John C. Stennis
CVN-74
nuclear
1,092
102,000
FY1988
1995
Harry S Truman
CVN-75
nuclear
1,092
102,000
FY1988
1998
hundreds of subcontractors and suppliers in dozens of states.
Navy Aircraft Carrier Acquisition Programs. Navy aircraft carrier acquisition
programs currently revolve around three ships – CVN-77, CVNX-1, and CVNX-2.
CVN-77. As part of its action on the FY2001 defense budget, Congress in 2000
approved $4,053.7 million to complete procurement funding for CVN-77. CVN-77's total
procurement cost of $4,974.9 million includes $921.2 million that was provided prior to
FY2001. CVN-77 will incorporate a variety of new technologies, including several that
are intended to reduce the annual operating and support (O&S) cost of the ship compared
to other Nimitz-class ships. Where feasible, some of these new technologies might be
retrofitted onto the other 9 Nimitz-class carriers. CVN-77 will require 550 fewer sailors
to operate than previous Nimitz-class ships and will feature a new integrated combat
system to be made by an industry team led by Lockheed Martin.
CVNX-1. CVNX-1 is a further-evolved version of the Nimitz-class design that the
Navy plans to procure in FY2007 to replacement for the Enterprise (CVN-65) in 2014.
The Navy estimates that CVNX-1 will cost $2.54 billion to develop and $7.48 billion to
procure, bringing its total acquisition (development plus procurement) cost to $10.02
billion. Congress appropriated $138.9 million in advanced procurement funding for
CVNX-1 in the FY2002 defense budget. For FY2003, the Administration is requesting
$243.7 million in advanced procurement funding and additional funding for research and
development work on the ship.
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The table below shows actual (FY2001-FY2002), requested (FY2003), programmed
(FY2004-FY2007), and implied (FY2008) procurement funding for CVNX-1. The
FY2002 figure shown reflects an apparent DoD adjustment to the congressionally enacted
figure. The large advanced procurement funding figure in FY2004 will fund, among other
things, the ship’s long-lead-time nuclear-propulsion components. A total of $2,479.8
million, or about 33% of the ship’s total procurement cost, is to be provided prior to the
procurement year of FY2007.
Although CVNX-1 is to be procured in FY2007, Navy plans call for $2,354.8 million,
or about 31%, of the ship’s total procurement cost to be provided in FY2008. Dividing
the final portion of the ship’s procurement cost between FY2007 and FY2008 is called
“split funding” and is an apparent departure from the full funding provision – a defense
budgeting rule imposed by Congress on the Defense Department about 50 years ago that
requires the full procurement cost of any item procured through the procurement title of
the defense appropriations act (including Navy ships funded in the Shipbuilding and
Conversion, Navy [SCN] appropriation account) to be provided in the year in which the
item is procured. The Navy apparently split-funded CVNX-1 between FY2007 and
FY2008 to relieve financial pressure on the SCN account in FY2007.
Table 2. Procurement funding for CVNX-1
(millions of then-year dollars)
Fiscal Year
01
21.9
02
03
136.0
243.7
04
1,262.9
05
06
397.9
417.4
07
08
Total
2,645.4
2,354.8
7,480.0
The Navy originally wanted CVNX-1 to be a completely new, next-generation
aircraft carrier (hence the name CVNX-1, rather than CVN-78). In May 1998, however,
the Navy decided that it could not afford to develop an all-new design for the ship and
instead decided to continue to modify the Nimitz-class design with each new carrier that
is procured. Under this strategy, CVN-77 and CVNX-1 are to be, technologically, the
first and second ships in a series of transitional aircraft carrier designs. An all-new carrier
design (including a new hull design different from that of the Nimitz class) might
eventually emerge under this strategy, but this would not happen until CVNX-2 at the
earliest or, perhaps more likely, CVNX-3.
Compared to CVN-77, CVNX-1 would require at least 350 fewer sailors to operate
and would feature, among other things, an entirely new and less expensive nuclear reactor
plant, a new electrical distribution system, and an electromagnetic (as opposed to steampowered) aircraft catapult system.
CVNX-2. Under current Navy long-range plans, CVNX-2 would be procured in
FY2011 and enter service in 2018 as the replacement for the John F. Kennedy (CV-67),
which will then be 50 years old. The Navy estimates that CVNX-2 will cost $1.29 billion
to develop and $7.49 billion to procure, for a total acquisition cost of $8.78 billion.
Compared to CVNX-1, CVNX-2 would feature further reductions in crew size, a
significantly redesigned flight deck, an electromagnetic aircraft recovery system, and hulldesign improvements.
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Defense transformation and aircraft carriers. The Bush Administration has
expressed a strong interest in defense transformation, which can be defined as large-scale,
potentially discontinuous or disruptive change military technologies, concepts of
operations, and organization. For U.S. naval forces, transformation could involve making
changes that better prepare the fleet to contend with so-called maritime anti-access/areadenial capabilities – such as advanced diesel-electric submarines, anti-ship missiles, and
mines – that adversaries may deploy to defend their littoral (near-shore) waters against
large, capable navies like the U.S. Navy.1
Some advocates of defense transformation, including Andrew Marshall of the
Pentagon’s Office of Net Assessment, have raised questions about the future survivability
and cost-effectiveness of large aircraft carriers (and other surface ships) against adversaries
with capable anti-access/area-denial forces. They have also advocated increased spending
on unmanned air vehicles (UAVs) and unmanned combat air vehicles (UCAVs) to
accelerate the transformation of naval aviation.
Defense Science Board Task Force. On September 6, 2001, E.C. “Pete”
Aldridge, Jr, the Under Secretary of Defense (Acquisition, Technology and Logistics)
directed the Defense Science Board to establish a task force
to assess how aircraft carriers should service the nation’s defense needs in the 21st
century and beyond.... The Task Force should concentrate on the increased need to
fulfill the presence and warfighting mission that aircraft carriers perform. The carrier
battle group has been the mainstay of our combat-credible forward presence and the
Task Force should examine its applicability and potential for transformation in the
future.... The Task Force should explore the aircraft carrier’s contribution to joint
operations in the littoral.
While significant resources are being expended in the evolution of aircraft carriers to
improve performance and life cycle cost, it is not expected that there will be sufficient
funds to expand the carrier fleet significantly. The Task Force should examine
cost/capability tradeoffs in considering the design of carriers appropriate to the future
environments in which naval warfare may occur. In exploring all of these issues, the
Task Force should examine the broadest range of alternatives....2
The task force is to report its findings by the end of March 2002.
Potential Issues for Congress
Potential implications of UAVs and UCAVs. Congress has expressed an
interest in unmanned air vehicles (UAVs) and unmanned combat air vehicles (UCAVs) for
several years. Congress in 2000 underscored this interest in Section 220 of the FY2001
defense authorization act (H.R. 4205/P.L. 106-398), which states, “It shall be a goal of the
1
For more on defense transformation and how it relates to the Navy, see CRS Report RS20851,
Naval Transformation: Background and Issues for Congress, by Ronald O’Rourke. Washington,
2002. (Updated periodically) 6 p.
2
Memorandum dated September 6, 2001 from The Under Secretary of Defense (Acquisition,
technology, and Logistics) to the Chairman, Defense Science Board, on Terms of Reference –
Defense Science Board Task Force on Aircraft Carriers of the Future.
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Armed Forces to achieve the fielding of unmanned, remotely controlled technology such
that – (1) by 2010, one-third of the aircraft in the operational deep strike force aircraft
fleet are unmanned....” Many defense analysts believe the value and potential of UAVs
and UCAVs have been demonstrated by the war in Afghanistan, where they have been
used extensively.
One potential question for Congress is whether the Navy’s plans for incorporating
UAVs and UCAVs into naval aviation are sufficient in scope and urgency. As of last year,
the Navy planned on incorporating 6 UCAVs into each carrier air wing (or about 8 percent
of each air wing’s 75 aircraft) by 2017. This plan does not appear to keep pace with the
goal established in Section 220 of the FY2001 defense authorization act.
A second potential question for Congress is how UAVs and UCAVs might alter the
overall structure of naval aviation, including the carrier fleet. As a part of the Navy’s
Streetfighter project for generating new naval operational concepts and conceptual ship
designs for fighting in contested littoral areas,3 a class project at the Naval Postgraduate
School in Monterrey, CA, recently developed a design for a 13,000-ton UAV/UCAV
carrier called Sea Archer that would embark an air wing of 16 UAVs and UCAVs
weighing about 15,000 pounds each, plus two manned helicopters. The ship as designed
would have a maximum speed of 60 knots (compared with something more than 30 knots
for the Navy’s aircraft carriers) and an estimated procurement cost of about $1.5 billion.
The ship’s size and cost could be reduced by lowering its maximum speed to 45 or 50
knots and reducing the size of the UAVs and UCAVs to 10,000 to 12,000 pounds. The
ship might enter service as soon as 2020.4
Potential questions for Congress include: How many UAVs and UCAVs should be
incorporated into future carrier air wings, and how should the design of future aircraft
carriers be altered, if at all, to take into account the potential for air wings with various
mixes of manned and unmanned aircraft? Should the Navy develop and procure a
UAV/UCAV carrier? If so, how many UAVs and UCAVs, with what capabilities, should
it embark? How might a UAV/UCAV carrier be used, either independent of or in
conjunction with aircraft carriers embarking mostly manned aircraft, and how many
traditional aircraft carriers and UAV/UCAV carriers should the fleet have?
Other potential questions. Other potential questions for Congress concerning
carriers include the following:
!
3
4
Carrier survivability. How survivable will carriers be in the
future against adversary forces, and how might judgements on
prospective carrier survivability affect the size and composition of
the Navy’s future aircraft carrier force?
For more on the Streetfighter project, see CRS Report RS20851, op cit.
Woods, Randy. Students Design Small, Fast Carrier At Projected Cost of $1.5 Billion. Inside
the Navy, January 7, 2002; Woods, Randy. Students Envision Fast, Stealthy UAV TO
Accompany Small Carrier. Inside the Navy, October 15, 2001; Woods, Randy. As Crossbow
Design Takes Shape, Students Eye 2040 Readiness Date. Inside the Navy, September 10, 2001.
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5
!
Design evolution. Does the Navy’s plan for evolving the design
of its carriers through CVN-77, CVNX-1,and CVNX-2 introduce
new technologies and design features at the right pace? Should
policymakers reconsider the 1998 to abandon the notion of
developing a clean-sheet carrier design? At this juncture, what are
the merits of the clean-sheet and evolutionary approaches?
!
Construction process. Is the process for building aircraft carriers
sufficiently modern and efficient? Have the Navy and Newport
News Shipbuilding taken adequate advantage of computer-aideddesign technology and modular design and manufacturing
techniques to modernize the process for building carriers? How
much have these steps reduced the prospective procurement cost
of CVNX-1?
!
Cost growth. The Navy recently has experienced cost growth in
its aircraft carrier construction programs. What were the causes of
this cost growth, and what steps have the Navy and Newport News
Shipbuilding taken to prevent future cost growth?
!
Stationkeeping multiplier. The stationkeeping multipliers for
aircraft carriers – i.e., the number of carriers that must be in
inventory to keep one carrier continuously on station in various
overseas operating areas – are higher than the multipliers for other
kinds of Navy ships. About 6 U.S.-homeported carriers are
required to keep one on station in the Mediterranean, and 7 or
more U.S.-homeported carriers are required to keep one on station
in the Northern Arabian Sea or Persian Gulf. What is the potential
for reducing carrier stationkeeping multipliers through measures
such as higher transit speeds to and from the operating areas,
greater use of land-based simulators (so as to reduce time at sea
spent in non-deployed training operations), double- or multiplecrewing of carriers, or long-duration forward deployments of
carriers with rotation of crews that are flown to and from the ship?
!
Electric drive. The Navy in 1999 issued a report to Congress on
electric-drive propulsion technology for Navy ships concluding that
the technology would be cost-effective for most kinds of Navy
ships, but not for carriers. Have developments in electric-drive
technology since 1999 affected this conclusion in any way?5
See CRS Report RL30622, Electric-Drive Propulsion for U.S. Navy Ships: Background and
Issues for Congress, by Ronald O’Rourke. Washington, 2000. (July 31, 2000) 65 p.efforts currently revolve around CVN-77 and the CVN-21 program. Each of these is
discussed below.
CVN-77. Congress approved $4,053.7 million in FY2001 procurement funding to
complete CVN-77’s total procurement cost of $4,974.9 million. The ship, which was
named in honor of former president George H. W. Bush on December 9, 2002, was
originally to include new-design radars and a new-design combat system known as the
Integrated Warfare System (IWS) to be made by an industry team led by Lockheed
Martin. During 2002, however, the Navy backed away from this plan and announced that
the ship would instead be equipped with older-design radars and a combat system similar
to those used by previous Nimitz-class carriers. The conference report (H.Rept. 107-732
of October 9, 2002) on the FY2003 defense appropriations bill (H.R. 5010/P.L. 107-248)
provided an additional $90 million for CVN-77 for IWS and contained language directing
the Navy to build the ship with an advanced combat system (page 185).
CVN-21 Program. In August 2004, DOD began describing the CVN-21 program
as a 3-ship program encompassing CVN-21 and two sister ships to be procured years after
CVN-21. (CVN-21 simply means aircraft carrier for the 21st Century.) On August 19,
2004, the Department of Defense (DOD) reported that the estimated development cost for
the 3-ship program had increased by $728 million, to $4.33 billion. DOD now estimates
that the 3-ship program would have a total acquisition cost of about $36.1 billion ($4.33
billion for development and $31.75 billion for procurement), or an average of about $12
billion per ship.
CVN-21 (also called CVN-78). The Navy wants to procure CVN-21 (also known
as CVN-78) in FY2007 and commission it into service in 2014 as the replacement for the
Enterprise (CVN-65), which would then be 53 years old. The Navy in early 2004
estimated that CVN-21 would cost about $3.1 billion to develop and $8.6 billion to
procure, for a total acquisition cost of about $11.7 billion. The $3.1 billion in estimated
development costs for the CVN-21 represented most of the previously reported estimated
development cost for the 3-ship program. In light of this, much of the $728-million
increase in the total development cost for the 3-ship program might be due to an increase
in the estimated development cost for CVN-21 itself. If so, then CVN-21’s estimated
acquisition cost may now be more than $12 billion.
In mid-August 2004, it was reported that the Navy’s draft FY2006-FY2011
shipbuilding plan would delay procurement of CVN-21 by one year, to FY2008. Based
on past data for carrier construction programs, such a delay might increase the
procurement cost of the ship by a few or several hundred million dollars, which could
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increase its total acquisition cost to well over $12 billion, and possibly something closer
to $13 billion.
Through FY2004, Congress approved $1,729.7 million in advanced procurement
funding and $1,142.3 million in development funding for CVN-21. The Administration’s
proposed FY2005 defense budget requested $626.1 million in procurement funding and
$327.3 million in development funding for the ship.
The Navy originally wanted the carrier after CVN-77 to be a completely new-design
aircraft carrier (hence its initial name of CVNX-1, rather than CVN-78). In May 1998,
however, the Navy announced that it could not afford to develop an all-new design for the
ship and would instead continue to modify the Nimitz-class design with each new carrier
that is procured. Under this strategy, CVN-77 and CVNX-1 were to be, technologically,
the first and second ships in an evolutionary series of carrier designs.
Compared to the baseline Nimitz-class design, CVNX-1 was to require 300 to 500
fewer sailors to operate and would feature an entirely new and less expensive nuclear
reactor plant, a new electrical distribution system, and an electromagnetic (as opposed to
steam-powered) aircraft catapult system. In large part because of the reduction in crew
size, CVNX-1 was projected to have a lower life-cycle operation and support (O&S) cost
than the baseline Nimitz-class design. CVNX-1 was to cost $2.54 billion to develop and
$7.48 billion to procure, giving it a total acquisition cost of $10.02 billion.
In May 2002, Secretary of Defense Donald Rumsfeld directed DOD offices to
reexamine the need for 5 major defense acquisition programs, including CVNX-1. In
response, the Office of the Secretary of Defense (OSD) began studying several
alternatives to the Navy’s carrier acquisition plan, including procuring smaller
conventional carriers instead of large nuclear-powered carriers; procuring a repeat version
of CVN-77 in FY2007 instead of CVNX-1; and skipping procurement of CVNX-1.
In November and December 2002, after reviewing these alternatives, OSD decided
to alter the design of CVNX-1 to incorporate additional advanced features originally
intended for CVNX-2 (the name at the time for the next carrier after CVNX-1). These
changes included a new and enlarged flight deck, an increased allowance for future
technologies (including electric weapons), and additional manpower reductions.
Compared to the baseline Nimitz-class design, the ship would now require at least 500
fewer sailors to operate. To signify these changes, the ship’s name was changed from
CVNX-1 to CVN-21. Incorporating the changes increased the ship’s development cost
by about $600 million and its procurement cost by about $700 million. OSD reportedly
did not consider CVNX-1 sufficiently transformational; the CVN-21 proposal appears
intended to increase the transformational content of the ship.1
The Navy in the latter months of 2002 proposed to fund the procurement of CVNX1/CVN-21 starting in FY2004 through the Navy’s research and development account
rather than the Navy’s ship-procurement account, known formally as the Shipbuilding and
Conversion, Navy (SCN) account. In December 2002, however, it was reported that the
1
For more on naval transformation, see CRS Report RS20851, Naval Transformation,
Background and Issues for Congress, by Ronald O’Rourke.
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Office of Management and Budget (OMB) objected to this proposal. As a result, the
Pentagon is proposing to fund the procurement of CVN-21 through the SCN account.2
CVN-79. Navy plans have called for procuring CVN-79 (previously called the
CVN-21 Follow-On and, before that, CVNX-2) in FY2011 and commission it into service
in 2018 as the replacement for the John F. Kennedy, which will then be 50 years old.
Initial advance procurement funding for CVN-79 is currently programmed for FY2007.
If, however, procurement of CVN-21 is delayed a year, to FY2008, then it is possible that
procurement of CVN-79 could also be delayed by a year, to FY2012, which could delay
initial advance procurement funding a year, to FY2008. Compared to CVN-21, CVN-79
would feature a more significantly redesigned flight deck, an electromagnetic arresting
gear, and possibly hull-design improvements, including reactive armor protection.
CVN-80. This is the third ship in the 3-ship CVN-21 program. It nominally would
be procured a few years after procurement of CVN-79.
Table 1 on the next page shows procurement and development funding for CVN-21
and CVN-79 through FY2009.
Potential Issues for Congress
Affordability, Cost Effectiveness, and Potential Alternatives. With an
estimated average acquisition cost of about $12 billion per ship, would the 3 carriers in
the CVN-21 program be affordable and cost effective? Supporters could argue that in
spite of their cost, carriers are flexible platforms that in recent years have proven
themselves highly valuable in various U.S. military operations, particularly where U.S.
access to overseas bases has been absent or constrained. Carriers, they could argue, have
been useful not only not only for operating strike fighters and other tactical aircraft, but
also for embarking Army forces (as during the 1994 Haiti crisis) and special operations
forces (as in the 2001-2002 war in Afghanistan). Supporters could also argue that
Congress is already heavily committed to procuring CVN-21, having approved more than
$3.8 billion of the ship’s total acquisition cost from FY2001 to FY2005.
2
The Navy reportedly wanted to start funding the procurement of CVNX-1/CVN-21 through the
Navy’s research and development account in part because the new technologies to be
incorporated into CVNX-1/CVN-21 give it somewhat the character of a research and
development activity as opposed to a straight procurement action. The Navy reportedly believed
that funding procurement of the ship through the research and development account would permit
the Navy to better manage the technical and cost risks involved in developing and building the
ship. Items acquired through research and development accounts are not subject to the full
funding policy as traditionally applied to DOD weapon procurement programs. If procured
through the research and development account, the Navy would be able, for example, to fund the
procurement of CVN-21 using a stream of annual funding increments — a funding strategy that,
when used in funding items procured through DOD procurement accounts, is called incremental
funding. Such a strategy would reduce the financial strain that procurement of CVN-21 would
place on the Navy budget in any single year. Congress, however, imposed the full funding policy
on DOD in the 1950s in part to end the use of incremental funding in defense procurement,
because it was viewed as having disadvantages in terms of reducing DOD budgeting discipline
and making the total costs of weapons less visible. For a discussion, see CRS Report RL31404,
Defense Procurement: Full Funding Policy — Background, Issues, and Options for Congress,
by Ronald O’Rourke and Stephen Daggett.
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Table 1. Procurement and Development Funding for
CVN-21 and CVN-79, FY2001-FY2009
2001
2002
2003
2004
2005
2006
2007
2008
2009
Total
thru 2009
Procurement (Shipbuilding and Conversion, Navy [SCN] account)
21
21.7
135.3
395.5
1177.2
626.1
611.9
2806.8
79
0
0
0
0
0
0
2830.1
0
8604.6
162.1
420.8 1568.6
2151.5*
232.9
210.1
152.5
2363.8*
79
0
5.0
0
0
0
0
0
191.6 315.8
Source: Data provided to CRS by Navy Office of Legislative Affairs, February 17, 2004.
* Additional funding to be provided in FY2009 and future years.
21= CVN-21; 79 = CVN-79
512.4*
Development (Navy research and development account)
21
230.5
276.5
318.5
316.8
327.3
298.7
Skeptics, while acknowledging the operational value of large carriers, could question
whether, in light of their cost, there might be more cost effective alternatives. Potential
alternatives include, among other things, smaller carriers about the size of today’s Wasp
(LHD-1) class amphibious assault ships, which might cost roughly $3 billion to procure;
UAV/UCAV carriers (which would be designed to embark air wings composed mostly
of unmanned air vehicles [UAVs] and unmanned combat air vehicles [UCAVs]); and very
small carriers, such as high-speed ships large enough to embark roughly half a dozen
manned tactical aircraft each. Skeptics could argue that, even though substantial funds
have already been appropriated for CVN-21, not all of these funds have been expended,
and that, if large carriers are not cost effective compared to alternatives, Congress should
not “throw good money after bad” by continuing to fund CVN-21.
Funding Profile and Full Funding Policy. The Navy in its current budget has
divided the final portion of CVN-21’s procurement cost between FY2007 and FY2008.
The Navy apparently adopted this approach, which is called split funding, in part to
reduce financial strain on the FY2007 budget. Split funding is a departure from the full
funding policy — a defense budgeting rule that requires the full procurement cost of any
item procured through the procurement title of the defense appropriations act to be
provided in the year in which the item is procured.3 Potential questions to consider
include Should CVN-21 be procured with split funding? Would this set a precedent for
using split funding to procure other DOD weapons? What effect would split funding or
a large amount of advance procurement funding for CVN-21 have on adherence to the full
funding policy? What would be the impact on the procurement schedules and costs of
other Navy procurement programs if split funding were not used?
3
For a discussion of these issues, see CRS Report RL31404, op cit.
CRS-6
Legislative Activity For FY2005
FY2005 Defense Authorization Bill (H.R. 4200/S. 2400). The House Armed
Services Committee, in its report (H.Rept 108-491 of May 14, 2004), on H.R. 4200,
recommended approval of the FY2005 funding R&D and procurement funding requests
for the CVN-21 program. The committee also recommended a $10-million increase in
program element (PE) 0603512N (Carrier Systems Development) within the Navy’s
research and development account for the Aviation Ship Integration Center. (Page 171;
see also page 158.)
The Senate Armed Services Committee, in its report (S.Rept. 108-260 of May 11, 2004)
on S. 2400, recommended approval of the FY2005 funding R&D and procurement
funding requests for the CVN-21 program. The committee also recommended a $9million increase in PE 0603512N (Carrier Systems Development) within the Navy’s
research and development account for the Aviation Ship Integration Center. (Page 185;
see also page 169.) The report also recommended a $15-million increase in the Navy’s
shipbuilding account for the power unit assembly facility (PUAF). (Page 82.)
FY2005 Defense Appropriations Bill (H.R. 4613/S. 2559). The House
Appropriations Committee, in its report (H.Rept. 108-553 of June 18, 2004) on H.R.
4613, recommended approval of the FY2005 R&D and procurement funding requests for
the CVN-21 program. The committee also recommended a $7.5-million increase in PE
0603512N (Carrier Systems Development) within the Navy’s research and development
account for the Sentinel Net anti-terrorism and force-protection system ($1.5 million),
surface ship composite moisture separators ($4 million, to be used only for design,
development, testing, and manufacture of composite radar absorbing moisture separators),
and the Aviation Ship Integration Center ($2 million). (Page 273). The committee also
recommended $2 million to begin a program to replace eroded propellers on existing
carriers with new-design propellers rather than refurbished propellers of the existing
design. (Page 172).
The Senate Appropriations Committee, in its report (S.Rept. 108-284 of June 24,
2004) on S. 2559, recommended a $140.9-million reduction in the FY2005 procurement
funding request for CVN-21 on the grounds that this portion of the request was premature
(page 83; see also page 82). The committee also recommended a $5-million increase in
PE 0603512N (Carrier Systems Development) within the Navy’s research and
development account for the Aviation Ship Integration Center. (Page 153; see also page
148.)
The conference report (H.Rept. 108-622) on H.R. 4613 recommended approval of
the FY2005 procurement funding request for the CVN-21 program. (Page 185). The
report also recommended a $7.2-million increase in PE 0603512N (Carrier Systems
Development) within the Navy’s research and development account for the Sentinel Net
anti-terrorism and force-protection system ($1.1 million), surface ship composite moisture
separators ($2.4 million, to be used only for design, development, testing, and
manufacture of composite radar absorbing moisture separators), and the Aviation Ship
Integration Center ($3.7 million). (Page 295; see also page 276.)