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Navy Virginia (SSN-774) Class Attack
Submarine Procurement: Background and
Issues for Congress
Ronald O'Rourke
Specialist in Naval Affairs
April 1, 2011
Congressional Research Service
7-5700
www.crs.gov
RL32418
CRS Report for Congress
P
repared for Members and Committees of Congress
c11173008
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Navy Virginia (SSN-774) Class Attack Submarine Procurement
Summary
The Navy has been procuring Virginia (SSN-774) class nuclear-powered attack submarines
(SSNs) since FY1998. Twelve were procured through FY2010, two more were requested for
FY2011, and another two are requested for FY2012. The eight boats to be procured in the five-
year period FY2009-FY2013 (boats 11 through 18, in annual quantities of 1-1-2-2-2) are being
procured under a multiyear procurement (MYP) arrangement.
The Navy’s proposed FY2012 budget requests $3,232.2 million in procurement funding to
complete the procurement cost of the 15th and 16th Virginia-class boats. The FY2012 budget
estimates the combined procurement cost of these two boats at $5,142.8 million, and under Navy
budget plans the boats are to receive a total of $1,910.5 million in prior-year advance
procurement (AP) and Economic Order Quantity (EOQ) funding. The Navy’s proposed FY2012
budget also requests $1,524.8 million in AP funding for Virginia-class boats to be procured in
future years.
Potential issues for Congress regarding the Virginia-class program include the following:
• the potential impact of a year-long continuing resolution (CR) for FY2011 at
FY2010 funding levels on the Navy’s ability to execute the planned procurement
of two Virginia-class boats in FY2011 under the terms of the FY2009-FY2013
Virginia-class MYP contract;
• the Virginia-class procurement rate in coming years, particularly in the context of
the larger debate over future U.S. defense strategy and defense spending;
• the Navy’s plans for inserting new technologies into the Virginia-class design;
and
• the reliability of in-service Virginia-class boats.
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Contents
Introduction ................................................................................................................................ 1
Background ................................................................................................................................ 1
U.S. Navy Submarines .......................................................................................................... 1
Attack Submarine Force-Level Goal ..................................................................................... 2
Attack Submarine Force Level .............................................................................................. 2
Los Angeles- and Seawolf-Class Boats.................................................................................. 2
Virginia (SSN-774) Class Program........................................................................................ 3
General ........................................................................................................................... 3
Past and Projected Procurement Rate .............................................................................. 4
Multiyear Procurement (MYP)........................................................................................ 4
Joint Production Arrangement ......................................................................................... 5
Cost-Reduction Effort ..................................................................................................... 5
Submarine Construction Industrial Base ................................................................................ 6
Projected SSN Shortfall ........................................................................................................ 7
Size and Timing of Shortfall............................................................................................ 7
Size of Shortfall Under FY2009 and FY2011 30-Year Shipbuilding Plans ....................... 7
2006 Navy Study on Options for Mitigating Projected Shortfall ...................................... 9
Issues for Congress ................................................................................................................... 11
Near-Term Issue: Potential Impact of Year-Long Continuing Resolution.............................. 11
Virginia-Class Procurement Rate......................................................................................... 13
Virginia-Class Technology Insertion.................................................................................... 14
Reliability of In-Service Virginia-Class Boats ..................................................................... 15
December 2010 DOT&E Report ................................................................................... 15
June 30, 2010, DOT&E Memorandum .......................................................................... 15
July 15, 2010, Navy Statement ...................................................................................... 16
January 21, 2011, Press Report...................................................................................... 17
March 2011 GAO Report .............................................................................................. 18
Legislative Activity for FY2012 ................................................................................................ 18
Figures
Figure 1. Virginia-Class Attack Submarine .................................................................................. 4
Tables
Table 1. Past and Programmed Virginia-Class Procurement ......................................................... 4
Table 2. SSN Force Level, 2011-2040 (Navy Projection)............................................................. 7
Table 3. SSNs in FY2009 and FY2011 30-Year Shipbuilding Plans ............................................. 8
Table 4. FY2010 and FY2011 Procurement and AP Funding...................................................... 12
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Appendixes
Appendix A. Legislative Activity for FY2011............................................................................ 19
Appendix B. Past SSN Force-Level Goals ................................................................................. 21
Appendix C. Options for Funding SSNs .................................................................................... 23
Contacts
Author Contact Information ...................................................................................................... 25
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Introduction
This report provides background information and oversight issues for Congress on the Virginia-
class nuclear-powered attack submarine (SSN) program. The Navy’s proposed FY2012 budget
requests procurement funding for the 15th and 16th Virginia-class boats, and advance procurement
(AP) funding for Virginia-class boats to be procured in future years. Decisions that Congress
makes on procurement of Virginia-class boats could substantially affect U.S. Navy capabilities
and funding requirements, and the U.S. shipbuilding industrial base.
The Navy’s SSBN(X) ballistic missile submarine program is discussed in another CRS report.1
Background
U.S. Navy Submarines2
The U.S. Navy operates three types of submarines—nuclear-powered ballistic missile submarines
(SSBNs),3 nuclear-powered cruise missile and special operations forces (SOF) submarines
(SSGNs),4 and nuclear-powered attack submarines (SSNs). The SSNs are general-purpose
submarines that perform a variety of peacetime and wartime missions, including the following:
• covert intelligence, surveillance, and reconnaissance (ISR), much of it done for
national-level (as opposed to purely Navy) purposes;
• covert insertion and recovery of SOF (on a smaller scale than possible with the
SSGNs);
• covert strikes against land targets with the Tomahawk cruise missiles (again on a
smaller scale than possible with the SSGNs);
1 See CRS Report R41129, Navy SSBN(X) Ballistic Missile Submarine Program: Background and Issues for Congress,
by Ronald O'Rourke.
2 In U.S. Navy submarine designations, SS stands for submarine, N stands for nuclear-powered, B stands for ballistic
missile, and G stands for guided missile (such as a cruise missile). Submarines can be powered by either nuclear
reactors or non-nuclear power sources such as diesel engines or fuel cells. All U.S. Navy submarines are nuclear-
powered. A submarine’s use of nuclear or non-nuclear power as its energy source is not an indication of whether it is
armed with nuclear weapons—a nuclear-powered submarine can lack nuclear weapons, and a non-nuclear-powered
submarine can be armed with nuclear weapons.
3 The SSBNs’ basic mission is to remain hidden at sea with their nuclear-armed submarine-launched ballistic missiles
(SLBMs) and thereby deter a strategic nuclear attack on the United States. The Navy’s SSBNs are discussed in CRS
Report R41129, Navy SSBN(X) Ballistic Missile Submarine Program: Background and Issues for Congress, by Ronald
O'Rourke, and CRS Report RL31623, U.S. Nuclear Weapons: Changes in Policy and Force Structure, by Amy F.
Woolf.
4 The Navy’s four SSGNs are former Trident SSBNs that have been converted (i.e., modified) to carry Tomahawk
cruise missiles and SOF rather than SLBMs. Although the SSGNs differ somewhat from SSNs in terms of mission
orientation (with the SSGNs being strongly oriented toward Tomahawk strikes and SOF support, while the SSNs are
more general-purpose in orientation), SSGNs can perform other submarine missions and are sometimes included in
counts of the projected total number of Navy attack submarines. The Navy’s SSGNs are discussed in CRS Report
RS21007, Navy Trident Submarine Conversion (SSGN) Program: Background and Issues for Congress, by Ronald
O’Rourke.
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• covert offensive and defensive mine warfare;
• anti-submarine warfare (ASW); and
• anti-surface ship warfare.
During the Cold War, ASW against the Soviet submarine force was the primary stated mission of
U.S. SSNs, although covert ISR and covert SOF insertion/recovery operations were reportedly
important on a day-to-day basis as well.5 In the post-Cold War era, although anti-submarine
warfare remains a mission, the SSN force has focused more on performing the other missions
noted on the list above.
Attack Submarine Force-Level Goal
In February 2006, the Navy proposed achieving and maintaining in coming years a fleet with a
total of 313 ships, including 48 SSNs (and 4 SSGNs). For a review of SSN force level goals since
the Reagan Administration, see Appendix B.
Attack Submarine Force Level
The SSN force included more than 90 boats during most of the 1980s, when plans called for
achieving a 600-ship Navy including 100 SSNs. The number of SSNs peaked at 98 boats at the
end of FY1987 has declined since then in a manner that has roughly paralleled the decline in the
total size of the Navy over the same time period. The 53 SSNs in service at the end of FY2010
included the following:
• 43 Los Angeles (SSN-688) class boats;
• 3 Seawolf (SSN-21) class boats; and
• 7 Virginia (SSN-774) class boats.
Los Angeles- and Seawolf-Class Boats
A total of 62 Los Angeles-class submarines, commonly called 688s, were procured between
FY1970 and FY1990 and entered service between 1976 and 1996. They are equipped with four
21-inch diameter torpedo tubes and can carry a total of 26 torpedoes or Tomahawk cruise missiles
in their torpedo tubes and internal magazines. The final 31 boats in the class (SSN-719 and
higher) are equipped with an additional 12 vertical launch system (VLS) tubes in their bows for
carrying and launching another 12 Tomahawk cruise missiles. The final 23 boats in the class
(SSN-751 and higher) incorporate further improvements and are referred to as Improved Los
Angeles class boats or 688Is. As of the end of FY2010, 19 of the 62 boats in the class had been
retired.
The Seawolf class was originally intended to include about 30 boats, but Seawolf-class
procurement was stopped after three boats as a result of the end of the Cold War and associated
5 For an account of certain U.S. submarine surveillance and intelligence-collection operations during the Cold War, see
Sherry Sontag and Christopher Drew with Annette Lawrence Drew, Blind Man’s Bluff (New York: Public Affairs,
1998).
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changes in military requirements. The three Seawolf-class submarines are the Seawolf (SSN-21),
the Connecticut (SSN-22), and the Jimmy Carter (SSN-23). SSN-21 and SSN-22 were procured
in FY1989 and FY1991 and entered service in 1997 and 1998, respectively. SSN-23 was
originally procured in FY1992. Its procurement was suspended in 1992 and then reinstated in
FY1996. It entered service in 2005. Seawolf-class submarines are larger than Los Angeles-class
boats or previous U.S. Navy SSNs.6 They are equipped with eight 30-inch-diameter torpedo tubes
and can carry a total of 50 torpedoes or cruise missiles. SSN-23 was built to a lengthened
configuration compared to the other two ships in the class.7
Virginia (SSN-774) Class Program
General
The Virginia-class attack submarine (see Figure 1) was designed to be less expensive and better
optimized for post-Cold War submarine missions than the Seawolf-class design. The Virginia-
class design is slightly larger than the Los Angeles-class design,8 but incorporates newer
technologies. Virginia-class boats currently cost about $2.6 billion each to procure. The first
Virginia-class boat entered service in October 2004.
6 Los Angeles-class boats have a beam (i.e., diameter) of 33 feet and a submerged displacement of about 7,150 tons.
Seawolf-class boats have a beam of 40 feet. SSN-21 and SSN-22 have a submerged displacement of about 9,150 tons.
7 SSN-23 is 100 feet longer than SSN-21 and SSN-22 and has a submerged displacement of 12,158 tons.
8 Virginia-class boats have a beam of 34 feet and a submerged displacement of 7,800 tons.
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Figure 1. Virginia-Class Attack Submarine
Source: U.S. Navy file photo accessed by CRS on January 11, 2011, at http://www.navy.mil/search/display.asp?
story_id=55715.
Past and Projected Procurement Rate
As shown in Table 1, 12 Virginia-class boats were procured through FY2010 at a rate of about
one boat per year, and the Navy’s proposed FY2011 budget increased the planned procurement
rate to two boats per year.
Table 1. Past and Programmed Virginia-Class Procurement
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06
1 1 0 1 1 1 1 1 1
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
1 1 1 1 2 2 2 2 2
Source: Prepared by CRS based on U.S. Navy data. The eight boats procured or to be procured in FY2009-
FY2013 are being procured under a multiyear procurement (MYP) arrangement.
Multiyear Procurement (MYP)
Under a multiyear procurement (MYP) arrangement requested by the Navy and approved by
Congress in FY2008 and FY2009,9 a total of eight Virginia-class boats (boats 11 through 18 in the
9 Section 8011 of the compromise version of the FY2009 defense appropriations act (Division C of H.R. 2638/P.L.
(continued...)
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program) are to be procured in the period FY2009-FY2013, in annual quantities of 1, 1, 2, 2, and
2, respectively.
The five Virginia-class boats procured in FY2004-FY2008 were also procured under a multiyear
procurement (MYP) arrangement. The four boats procured in FY1998-FY2002 were procured
under a somewhat similar arrangement called a block buy. The boat procured in FY2003 fell
between the FY1998-FY2002 block buy and the FY2004-FY2008 MYP, and was contracted for
separately.
Joint Production Arrangement
Virginia-class boats are built jointly by General Dynamics’ Electric Boat Division (GD/EB) of
Groton, CT, and Quonset Point, RI, and the Newport News, VA, shipyard that forms part of
Northrop Grumman Shipbuilding (NGSB).10 Under the arrangement, GD/EB builds certain parts
of each boat, Newport News builds certain other parts of each boat, and the yards take turns
building the reactor compartments and performing final assembly of the boats. GD/EB is building
the reactor compartments and performing final assembly on boats 1, 3, and so on, while Newport
News is doing so on boats 2, 4, and so on. The arrangement results in a roughly 50-50 division of
Virginia-class profits between the two yards and preserves both yards’ ability to build submarine
reactor compartments (a key capability for a submarine-construction yard) and perform
submarine final-assembly work.
The joint production arrangement is a departure from past U.S. submarine construction practices,
under which complete submarines were built in individual yards. The joint production
arrangement is the product of a debate over the Virginia-class acquisition strategy within
Congress, and between Congress and the Department of Defense (DOD), that occurred in 1995-
1997 (i.e., during the markup of the FY1996-FY1998 defense budgets). The goal of the
arrangement is to keep both GD/EB and Newport News involved in building nuclear-powered
submarines, and thereby maintain two U.S. shipyards capable of building nuclear-powered
submarines, while minimizing the cost penalties of using two yards rather than one to build a
submarine design that is being procured at a relatively low annual rate.
Cost-Reduction Effort
The Navy states that it has achieved a goal of reducing the procurement cost of Virginia-class
submarines so that two boats can be procured in FY2012 for combined cost of $4.0 billion in
constant FY2005 dollars—a goal referred to as “2 for 4 in 12.” Achieving this goal involved
(...continued)
110-329 of September 30, 2008) granted authority for using FY2009 funds for an MYP arrangement for the Virginia-
class program. Section 122 of the compromise version of the FY2009 defense authorization bill (S. 3001/P.L. 110-417
of October 14, 2008) modified the authority to use an MYP arrangement for Virginia-class boats to be procured in
FY2009-FY2013 that was granted to the Secretary of the Navy by Section 121 of FY2008 defense authorization act
(H.R. 4986/P.L. 110-181 of January 28, 2008). The modification additionally permits the Secretary to enter into one or
more contracts for advance procurement and advance construction of components for the boats procured under the
MYP arrangement.
10 GD/EB and the Newport News shipyard are the only two shipyards in the country capable of building nuclear-
powered ships. GD/EB builds submarines only, while the Newport News shipyard also builds nuclear-powered aircraft
carriers and is capable of building other types of surface ships.
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removing about $400 million (in constant FY2005 dollars) from the cost of each submarine. (The
Navy calculates that the unit target cost of $2.0 billion in constant FY2005 dollars for each
submarine translates into about $2.6 billion for a boat procured in FY2012.)
The Navy says that, in constant FY2005 dollars, about $200 million of the $400 million in the
sought-after cost reductions was accomplished simply through the improved economies of scale
(e.g., better spreading of shipyard fixed costs and improved learning rates) of producing two
submarines per year rather than one per year. The remaining $200 million in sought-after cost
reductions, the Navy says, was accomplished through changes in the ship’s design (which will
contribute roughly $100 million toward the cost-reduction goal) and changes in the shipyard
production process (which will contribute the remaining $100 million or so toward the goal).
Some of the design changes are being be introduced to Virginia-class boats procured prior to
FY2012, but the Navy says the full set of design changes will not be ready for implementation
until the FY2012 procurement.
Changes in the shipyard production process are aimed in large part at reducing the total shipyard
construction time of a Virginia-class submarine from 72 months to 60 months. (If the ship spends
less total time in the shipyard being built, its construction cost will incorporate a smaller amount
of shipyard fixed overhead costs.) The principal change involved in reducing shipyard
construction time to 60 months involves increasing the size of the modules that form each
submarine, so that each submarine can be built out of a smaller number of modules.11
Submarine Construction Industrial Base
In addition to GD/EB and Newport News, the submarine construction industrial base includes
scores of supplier firms, as well as laboratories and research facilities, in numerous states. About
80% of the total material procured from supplier firms for the construction of submarines
(measured in dollar value) comes from single or sole source suppliers. Observers in recent years
have expressed concern for the continued survival of many of these firms. For nuclear-propulsion
component suppliers, an additional source of stabilizing work is the Navy’s nuclear-powered
aircraft carrier construction program.12 In terms of work provided to these firms, a carrier nuclear
propulsion plant is roughly equivalent to five submarine propulsion plants.
Much of the submarine design and engineering portion is resident at GD/EB. Smaller portions are
resident at Newport News and some of the component makers. Several years ago, some observers
expressed concern about the Navy’s plans for sustaining the design and engineering portion of the
submarine construction industrial base. These concerns appear to have receded, in large part
because of the Navy’s plan to design and procure a next-generation ballistic missile submarine
called the SSBN(X).13
11 For a detailed discussion of the Virginia-class cost-reduction effort, see David C. Johnson et al., “Managing Change
on Complex Programs: VIRGINIA Class Cost Reduction,” Naval Engineers Journal, No. 4, 2009: 79-94.
12 For more on this program, see CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program:
Background and Issues for Congress, by Ronald O’Rourke.
13 For more on the SBN(X) program, see CRS Report R41129, Navy SSBN(X) Ballistic Missile Submarine Program:
Background and Issues for Congress, by Ronald O'Rourke.
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Projected SSN Shortfall
Size and Timing of Shortfall
The Navy’s 30-year SSN procurement plan, if implemented, would not be sufficient to maintain a
force of 48 SSNs consistently over the long run. As shown in Table 2, the Navy projects that the
SSN force will fall below 48 boats starting in 2024, reach a minimum of 39 boats in 2030, and
remain below 48 boats through 2040. Since the Navy plans to retire the four SSGNs by 2028
without procuring any replacements for them, no SSGNs would be available in 2028 and
subsequent years to help compensate for a drop in SSN force level below 48 boats. The projected
SSN shortfall has been discussed in CRS reports and testimony since 1995.
Table 2. SSN Force Level, 2011-2040 (Navy Projection)
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
53 54 55 55 54 51 51 50 51 49 49 48 48 46 45
26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
44 43 41 40 39 41 41 42 43 44 45 46 45 45 45
Source: Report to Congress on Annual Long-Range Plan for Construction of Naval Vessels for FY 2011, p. 22.
Size of Shortfall Under FY2009 and FY2011 30-Year Shipbuilding Plans
Navy 30-year shipbuilding plans for FY2009 and prior years showed the SSN force recovering to
48 boats by the early 2030s. The Navy’s FY2011 30-year (FY2011-FY2040) plan shows the SSN
remaining below 48 boats through 2040. The change is due to a reduction in planned SSN
procurements. As can be seen in Table 3, the FY2009 plan included procurement of 53 SSNs
over 30 years, while the FY2011 plan includes procurement of 44 SSNs over 30 years. The
reduction in SSN procurements in the FY2011 plan may be due in large part to the planned
procurement of 12 next-generation SSBNs in FY2019-FY2033. The FY2009 plan did not account
for the cost of these 12 SSBNs, while the FY2011 does, apparently causing reductions in planned
procurement rates for SSNs and other types of ships during that period.
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Table 3. SSNs in FY2009 and FY2011 30-Year Shipbuilding Plans
Procurement in
Procurement in
Force level in
Force level in
FY
FY2009 plan
FY2011 plan
FY2009 plan
FY2011 plan
2009 1 n/a 53 n/a
2010 1 n/a 52 n/a
2011 2
2 52 53
2012 2
2 53 54
2013 2
2 54 55
2014 2
2 51 55
2015 2
2 51 54
2016 2
2 49 51
2017 2
2 50 51
2018 2
1 49 50
2019 2
2 50 51
2020 2
2 48 49
2021 2
2 48 49
2022 2
2 47 48
2023 2
1 47 48
2024 2
1 46 46
2025 2
1 45 45
2026 2
1 44 44
2027 2
1 43 43
2028 2
1 41 41
2029 1
1 41 40
2030 2
1 42 39
2031 1
1 44 41
2032 2
1 45 41
2033 1
1 47 42
2034 2
1 49 43
2035 1
2 50 44
2036 2
1 52 45
2037 1
2 53 46
2038 2
1 53 45
2039 n/a 2
n/a 45
2040 n/a 1
n/a 45
30-year total
53
44
n/a
n/a
Source: Prepared by CRS using data figures from Navy FY2009 and FY2011 30-year shipbuilding plans.
Note: n/a means not applicable.
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2006 Navy Study on Options for Mitigating Projected Shortfall
The Navy in 2006 initiated a study on options for mitigating the projected SSN shortfall. The
study was completed in early 2007 and briefed to CRS and the Congressional Budget Office
(CBO) on May 22, 2007.14 At the time of the study, the SSN force was projected to bottom out at
40 boats and then recover to 48 boats by the early 2030s. Principal points in the Navy study
(which cite SSN force-level projections as understood at that time) include the following:
• The day-to-day requirement for deployed SSNs is 10.0, meaning that, on
average, a total of 10 SSNs are to be deployed on a day-to-day basis.15
• The peak projected wartime demand is about 35 SSNs deployed within a certain
amount of time. This figure includes both the 10.0 SSNs that are to be deployed
on a day-to-day basis and 25 additional SSNs surged from the United States
within a certain amount of time.16
• Reducing Virginia-class shipyard construction time to 60 months—something
that the Navy already plans to do as part of its strategy for meeting the Virginia-
class cost-reduction goal (see earlier discussion on cost-reduction goal)—will
increase the size of the SSN force by two boats, so that the force would bottom
out at 42 boats rather than 40.17
• If, in addition to reducing Virginia-class shipyard construction time to 60 months,
the Navy also lengthens the service lives of 16 existing SSNs by periods ranging
from 3 months to 24 months (with many falling in the range of 9 to 15 months),
this would increase the size of the SSN force by another two boats, so that the
force would bottom out at 44 boats rather than 40 boats.18 The total cost of
extending the lives of the 16 boats would be roughly $500 million in constant
FY2005 dollars.19
14 Navy briefing entitled, “SSN Force Structure, 2020-2033,” presented to CRS and CBO on May 22, 2007.
15 The requirement for 10.0 deployed SSNs, the Navy stated in the briefing, was the current requirement at the time the
study was conducted.
16 The peak projected wartime demand of about 35 SSNs deployed within a certain amount of time, the Navy stated, is
an internal Navy figure that reflects several studies of potential wartime requirements for SSNs. The Navy stated that
these other studies calculated various figures for the number of SSNs that would be required, and that the figure of 35
SSNs deployed within a certain amount of time was chosen because it was representative of the results of these other
studies.
17 If shipyard construction time is reduced from 72 months to 60 months, the result would be a one-year acceleration in
the delivery of all boats procured on or after a certain date. In a program in which boats are being procured at a rate of
two per year, accelerating by one year the deliveries of all boats procured on or after a certain date will produce a one-
time benefit of a single year in which four boats will be delivered to the Navy, rather than two. In the case of the
Virginia-class program, this year might be around 2017. As mentioned earlier in the discussion of the Virginia-class
cost-reduction goal, the Navy believes that the goal of reducing Virginia-class shipyard construction time is a medium-
risk goal. If it turns out that shipyard construction time is reduced to 66 months rather than 60 months (i.e., is reduced
by 6 months rather than 12 months), the size of the SSN force would increase by one boat rather than two, and the force
would bottom out at 41 boats rather than 42.
18 The Navy study identified 19 existing SSNs whose service lives currently appear to be extendable by periods of 1 to
24 months. The previous option of reducing Virginia-class shipyard construction time to 60 months, the Navy
concluded, would make moot the option of extending the service lives of the three oldest boats in this group of 19,
leaving 16 whose service lives would be considered for extension.
19 The Navy stated that the rough, order-of-magnitude (ROM) cost of extending the lives of 19 SSNs would be $595
million in constant FY2005 dollars, and that the cost of extending the lives of 16 SSNs would be roughly proportional.
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• The resulting force that bottoms out at 44 boats could meet the 10.0 requirement
for day-to-day deployed SSNs throughout the 2020-2033 period if, as an
additional option, about 40 SSN deployments occurring in the eight-year period
2025-2032 were lengthened from six months to seven months. These 40 or so
lengthened deployments would represent about one-quarter of all the SSN
deployments that would take place during the eight-year period.
• The resulting force that bottoms out at 44 boats could not meet the peak projected
wartime demand of about 35 SSNs deployed within a certain amount of time.
The force could generate a total deployment of 32 SSNs within the time in
question—three boats (or about 8.6%) less than the 35-boat figure. Lengthening
SSN deployments from six months to seven months would not improve the
force’s ability to meet the peak projected wartime demand of about 35 SSNs
deployed within a certain amount of time.
• To meet the 35-boat figure, an additional four SSNs beyond those planned by the
Navy would need to be procured. Procuring four additional SSNs would permit
the resulting 48-boat force to surge an additional three SSNs within the time in
question, so that the force could meet the peak projected wartime demand of
about 35 SSNs deployed within a certain amount of time.
• Procuring one to four additional SSNs could also reduce the number of seven-
month deployments that would be required to meet the 10.0 requirement for day-
to-day deployed SSNs during the period 2025-2032. Procuring one additional
SSN would reduce the number of 7-month deployments during this period to
about 29; procuring two additional SSNs would reduce it to about 17, procuring
three additional SSNs would reduce it to about 7, and procuring four additional
SSNs would reduce it to 2.
The Navy added a number of caveats to these results, including but not limited to the following:
• The requirement for 10.0 SSNs deployed on a day-to-day basis is a current
requirement that could change in the future.
• The peak projected wartime demand of about 35 SSNs deployed within a certain
amount of time is an internal Navy figure that reflects recent analyses of potential
future wartime requirements for SSNs. Subsequent analyses of this issue could
result in a different figure.
• The identification of 19 SSNs as candidates for service life extension reflects
current evaluations of the material condition of these boats and projected use
rates for their nuclear fuel cores. If the material condition of these boats years
from now turns out to be worse than the Navy currently projects, some of them
might no longer be suitable for service life extension. In addition, if world
conditions over the next several years require these submarines to use up their
nuclear fuel cores more quickly than the Navy now projects, then the amounts of
time that their service lives might be extended could be reduced partially, to zero,
or to less than zero (i.e., the service lives of the boats, rather than being extended,
might need to be shortened).
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• The analysis does not take into account potential rare events, such as accidents,
that might force the removal an SSN from service before the end of its expected
service live.20
• Seven-month deployments might affect retention rates for submarine personnel.
Issues for Congress
Potential issues for Congress regarding the Virginia-class program include the following:
• the potential impact of a year-long continuing resolution (CR) for FY2011 at
FY2010 funding levels on the Navy’s ability to execute the planned procurement
of two Virginia-class boats in FY2011 under the terms of the FY2009-FY2013
Virginia-class MYP contract;
• the Virginia-class procurement rate in coming years, particularly in the context of
the larger debate over future U.S. defense strategy and defense spending;
• the Navy’s plans for inserting new technologies into the Virginia-class design;
and
• the reliability of in-service Virginia-class boats.
Near-Term Issue: Potential Impact of Year-Long Continuing
Resolution
A near-term oversight issue for Congress the potential impact of a year-long continuing resolution
(CR) for FY2011 at FY2010 funding levels on the Navy’s ability to execute the planned
procurement of two Virginia-class boats in FY2011 under the terms of the FY2009-FY2013
Virginia-class MYP contract. The FY2010 budget procured one Virginia-class boat, while the
FY2011 budget requested funding for the procurement of two Virginia-class boats. Table 4 shows
procurement and advance procurement funding for the Virginia-class program in the FY2010 and
FY2011 budgets.
20 In January 2005, the Los Angeles-class SSN San Francisco (SSN-711) was significantly damaged in a collision with
an undersea mountain near Guam. The ship was repaired in part by transplanting onto it the bow section of the
deactivated sister ship Honolulu (SSN-718). (See, for example, Associated Press, “Damaged Submarine To Get Nose
Transplant,” Seattle Post-Intelligencer, June 26, 2006.) Prior to the decision to repair the San Francisco, the Navy
considered the option of removing it from service. (See, for example, William H. McMichael, “Sub May Not Be Worth
Saving, Analyst Says,” Navy Times, February 28, 2005; Gene Park, “Sub Repair Bill: $11M,” Pacific Sunday News
(Guam), May 8, 2005.)
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Table 4. FY2010 and FY2011 Procurement and AP Funding
Figures in millions, rounded to nearest million, figures may not add due to rounding
FY2010
FY2011 funding
Difference (with FY2011 funding
funding level
level (requested)
shortfall shown as a negative)
Procurement
2.004
3,441
-1,438
Advance procurement (AP)
1,954
1,691
262
Source: U.S. Navy data provided to House Armed Services Committee (HASC) and used here with HASC
permission.
Since procurement funding for Navy ships is generally appropriated (and therefore managed by
the Navy) at the line-item level (including separate lines item for AP funding), the Navy has little
flexibility in how it can apply FY2010 levels of shipbuilding procurement and AP funding to
meet FY2011 shipbuilding program needs.21 As can be seen in Table 4, under a year-long CR at
FY2010 funding levels, the Navy would face a shortfall in the Virginia-class program of about
$1.4 billion in procurement funding. This shortfall, if not addressed, would likely prevent the
Navy from procuring a second Virginia-class boat in FY2010, as called for under the FY2009-
FY2013 MYP contract. This would likely require the Navy to renegotiate the contract, which
could cause an increase in Virginia-class procurement costs, reducing the savings in Virginia-class
procurement costs that were to have been generated as a result of the contract.22
Under the FY2009-FY2013 MYP contract, the Navy was to have provided the contractor with
full funding for both of the FY2011 boats by January 31, 2011. The Navy and the contractor on
January 26 agreed to extend this deadline to March 21, 2011, and on March 17 agreed to extend it
again, to April 21.
The Navy provided the following statement to CRS regarding the extension of the deadline to
March 21:
On Jan. 26, 2011, the Department of the Navy executed a contract modification to the
VIRGINIA Class Block III construction contract (N00024-09-C-2104) with General
Dynamics Electric Boat that was originally awarded on Dec. 22, 2008. This contract
modification fully funds SSN 786; extends the contractual deadline for full funding of SSN
787 from Jan. 31, 2011 to March 21, 2011; obligates $120 million for advanced procurement
(AP) for SSN 787; and obligates the required AP and economic order quantity (EOQ)
funding for SSNs 788-791.
Enactment of either an appropriations act for the remainder of Fiscal Year 2011, or another
CR that includes specific anomaly language for the VIRGINIA Class program, is required to
fully fund SSN 787 in FY 2011 and keep this submarine on track for a construction start in
the fall of 2011 and in accordance with the multiyear contract which includes the two FY
2011 submarines.
Details follow:
21 For additional discussion, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and
Issues for Congress, by Ronald O'Rourke.
22 For a press report discussing this issue, see Jason Sherman, “Continuing Resolution Complicates Navy’s Plan To
Boost Sub Production,” Inside the Navy, January 17, 2011. See also Cid Standifer, “Stackley: Continuing Resolution
Throws Sand In Navy, DOD Budget Gears,” Inside the Navy, January 10, 2011; Cid Standifer and Dan Taylor, “Navy
Looks At Reprogramming Options Under Continuing Resolution,” Inside the Navy, January 17, 2011.
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• The contract modification provides $120 million of AP (as opposed to the required full
funding of $1,361.2M) to allow progress on the SSN 787 to continue through the current
CR, and it obligates required AP and EOQ funding for SSNs 788-791.
• The Navy reached a mutually-agreeable interim solution which depends on subsequent
appropriations laws or CR to ultimately determine the affect - if any - on the Block III
ships. Subject to funding provided by Congress by March 21, 2011, the current
multiyear contract remains in effect.
• No extra cost is incurred by the Navy because of the modification. The funding for the
contract modification came from available Fiscal Year 2011 Shipbuilding and
Conversion, Navy funding available under the existing CR. While no other program was
cut to finance this requirement, the Navy is continuously managing priorities under
existing funding during the CR across the spectrum of shipbuilding programs.
• With construction start planned for fall 2011, long lead items for the second FY 2011
submarine (SSN 787) are part of the Navy/contractor plan for the VIRGINIA Class
program, and the Navy anticipates the second boat will stay on schedule - provided full
funding for both boats is appropriated in FY 2011
• The existing construction contract pricing is contingent upon the Navy’s fully funding
the two FY11 boats no later than March 21, 2011. If full funding and authority are not
received for SSN 787 by the contractual deadline, and the Navy is unable to meet its
contractual obligations, then there will be negative cost, schedule and fleet availability
impacts for the VIRGINIA Class submarines under construction.23
The Navy provided the following statement to CRS regarding the extension of the deadline to
April 21:
On March 17, the Navy executed a second Contract Modification on the VIRGINIA Class
Block III construction contract. Under this agreement, the Navy provided its prime
contractor General Dynamics Electric Boat with an additional $30 million in Advanced
Procurement (AP) funding and extended the date for full funding of the second Fiscal Year
2011 submarine, SSN 787, to April 21.24
Virginia-Class Procurement Rate
Another oversight issue for Congress concerns the Virginia-class procurement rate in coming
years, particularly in the context of the larger debate over future U.S. defense strategy and
defense spending. Some observers—particularly those who propose reducing U.S. defense
spending as part of an effort to reduce the federal budget deficit—have recommended that the
SSN force-level goal be reduced to something less than 48 boats, and/or that Virginia-class
procurement be reduced. A June 2010 report from a group called the Sustainable Defense Task
23 Source: E-mail from Navy Office of Legislative Affairs to CRS, February 3, 2011. For a press report, see Jason
Sherman and Cid Standifer, “Navy, GD Modify Sub Contract To Keep Plan For Two FY-11 Boats Viable,” Inside the
Navy, February 7, 2011.
24 Source: Undated Navy information paper provided to CRS by Navy Office of Legislative Affairs on March 31, 2011.
See also Dan Taylor, “GD Exec: CR Could Jeopardize Virginia-Class Cost Reduction, Erode Support,” Inside the
Pentagon, March 10, 2011.
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Force recommends a Navy of 230 ships, including 37 SSNs,25 and a September 2010 report from
the Cato Institute recommends a Navy of 241 ships, including 40 SSNs.26 Both reports
recommend limiting Virginia-class procurement to one boat per year, as does a September 2010
report from the Center for American Progress.27 A November 2010 report from a group called the
Debt Reduction Task Force recommends “deferring” Virginia-class procurement.28 The
November 2010 draft recommendations of the co-chairs of the Fiscal Commission include
recommendations for reducing procurement of certain weapon systems; the Virginia-class
program is not among them.
Other observers have recommended that the SSN force-level goal should be increased to
something higher than 48 boats, particularly in light of Chinese naval modernization.29 For
example, the July 2010 report of an independent panel that assessed the 2010 Quadrennial
Defense Review (QDR—an assessment that is required by the law governing QDRs (10 U.S.C.
118)—recommends a Navy of 346 ships, including 55 SSNs.30
Factors to consider in assessing whether to maintain, increase, or reduce the SSN force-level goal
and/or planned Virginia-class procurement include but are not limited to the federal budget and
debt situation, the value SSNs in defending U.S. interests and implementing U.S. national
security strategy, and potential effects on the submarine industrial base.
As discussed earlier (see “Multiyear Procurement (MYP)” in “Background”), Virginia-class boats
scheduled for procurement in FY2011-FY2013 are covered under a multiyear procurement
(MYP) contract for the five-year period FY2009-FY2013. This MYP contract calls for procuring
two Virginia-class boats per year in FY2011-FY2013. If fewer than two boats per year were
funded in any one of those years, the contractor would be permitted to renegotiate the cost of the
boats.
Virginia-Class Technology Insertion
Another oversight issue for Congress concerns Navy plans for inserting new technology into the
Virginia-class design. A March 2011 Government Accountability Office (GAO) report stated:
The Navy has decided not to pursue two planned technology insertions for the Virginia class,
but it is still developing advanced electromagnetic signature reduction (AESR) technology
that will be introduced onto existing and new submarines. The Navy plans to install AESR—
software that monitors and optimizes the submarine’s signature—on ships starting with SSN
25 Debt, Deficits, and Defense, A Way Forward[:] Report of the Sustainable Defense Task Force, June 11, 2010, pp.
19-20, 31.
26 Benjamin H. Friedman and Christopher Preble, Budgetary Savings from Military Restraint, Washington, Cato
Institute, September 23, 2010 (Policy Analysis No. 667), pp. 9.
27 Lawrence J. Korb and Laura Conley, Strong and Sustainable[:] How to Reduce Military Spending While Keeping
Our Nation Safe, Center for American Progress, September 2010, p. 19-20.
28 Debt Reduction Task Force, Restoring America’s Future[:] Reviving the Economy, Cutting Spending and Debt, and
Creating a Simple, Pro-Growth Tax System, November 2010, p. 103.
29 For further discussion of China’s naval modernization effort, see CRS Report RL33153, China Naval
Modernization: Implications for U.S. Navy Capabilities—Background and Issues for Congress, by Ronald O'Rourke.
30 Stephen J. Hadley and William J. Perry, co-chairmen, et al., The QDR in Perspective: Meeting America’s National
Security Needs In the 21st Century, The Final Report of the Quadrennial Defense Review Independent Panel,
Washington, 2010, Figure 3-2 on page 58.
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782. The software will be installed on earlier ships over time. According to the Navy, AESR
prototype testing slipped by more than a year due to non-AESR-related schedule delays, and
is scheduled to begin on SSN 778 in September 2011. The Navy decided not to incorporate a
conformal acoustic velocity sensor wide aperture array on the ship after it found it would
significantly increase, not decrease, life-cycle costs and complicate maintenance. The Navy
is still evaluating more affordable sail designs, but according to officials, the larger, flexible
payload sail is no longer being considered because the communications requirements that
drove the need for more space have been eliminated.31
Reliability of In-Service Virginia-Class Boats
December 2010 DOT&E Report
Another oversight issue for Congress concerns the reliability of in-service Virginia-class boats. A
December 2010 report on various DOD acquisition programs from DOD’s Director, Operational
Test and Evaluation (DOT&E)—DOT&E’s annual report for FY2010—stated, in its entry on the
Virginia class program, that
The reliability of several key [Virginia-class] engineering components, NPES [non-
propulsion electronics systems] equipment, Government Furnished Equipment, and the
Photonics Mast need improvement….
Virginia’s mission performance is significantly dependent on supporting acquisition
programs that make up the Virginia combat and weapon systems. The performance
requirements or demonstrated performance of some NPES components do not support
meeting Virginia’s requirements. The A-RCI [acoustic rapid COTS (commercial off the
shelf) insertion] Sonar AN/BQQ-10, the TB-29 series towed [sonar] array, the AN/BLQ-10
Electronics Support Measures [system] and the Mk 48 Advanced Capability torpedo are
examples of systems with known performance limitations or reliability programs that
affected Virginia’s performance during IOT&E [initial operational test and evaluation].32
June 30, 2010, DOT&E Memorandum
A June 30, 2010, memorandum from J. Michael Gilmore, the Director, Operational Test and
Evaluation, discussed reliability issues concerning in-service DOD weapon systems, including
Virginia-class submarines. The memorandum stated the following of Virginia-class boats:
An OSD [Office of the Secretary of Defense] Program Support Review (Nov 2009) found:
• Multiple “fail to sail” issues, and test aborts associated with low reliability;
• No enterprise wide reliability measurement or growth program;
• Multiple subsystem failures associated with low reliability AN/TB-29 Towed [sonar]
Array, Imaging / photonics mast, AN/BPS-16 radar, AN/WLY-l sensors, Total Ship
Monitoring System, Vertical Launch System tubes;
31 Government Accountability Office, Defense Acquisitions[:] Assessments of Selected Weapon Programs, GAO-11-
233SP, March 2011, p. 126.
32 Director, Operational Test and Evaluation, FY 2010 Annual Report, December 2010, p. 170.
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• Additional subsystems require reliability improvements (Active Shaft Grounding
System, Circuit D, Ship Service Turbine Generator magnetic levitation bearings /
throttle control system, etc.);
• Special Hull Treatment continues to debond from VIRGINIA Class submarines during
underway periods, often in large sections up to hundreds of square feet.33
July 15, 2010, Navy Statement
On July 15, 2010, the Navy issued a statement to a news organization defending the reliability of
in-service Virginia-class boats. The Navy document states:
The Program Support Review [PSR] final report, referenced in the June 30 letter, was issued
in November 2009 and stated “the design and reliability deficiencies identified during the
PSR have mitigation plans and do not preclude the program from moving forward,” and
recommended the program proceed to the Milestone III / Full Rate Production review. On 23
June 2009 COMOPTEVFOR [Commander, Operational and Test and Evaluation Force]
deemed the VIRGINIA Class “operationally effective” and “operationally suitable.” On 12
November 2009, the Director, Operational Test and Evaluation deemed the VIRGINIA Class
an “operationally effective, suitable and survivable replacement for the LOS ANGELES
Class submarine.”
It is inaccurate to say the VIRGINIA Class has a reliability problem. The [Virginia-class]
Program ensures reliability by finding and correcting defects during the design, construction
and post delivery periods. One of the last and most important reliability checks before a ship
becomes fully operational is the shakedown and maintenance availability period between the
submarine’s delivery from construction and the beginning of full fleet operations. Most of
the issues and fail-to-sail events in the program have occurred and were corrected during this
period. There have been comparatively few fail to sail events on ships that have completed
PSA [post-shakedown availability].34 While this shows the effectiveness of the Program’s
approach to improving the platform reliability, the Navy continues to monitor the success of
the reliability improvement efforts in progress.
The proof of the reliability of a weapons system is in its intended use in its intended
environment. For a US Navy Submarine in peacetime, this event occurs during a full six-
month deployment. USS VIRGINIA (SSN 774) recently completed a highly successful full-
length deployment including operations in the United States European Command (EUCOM)
and United States African Command (AFRICOM) Area of Responsibility (AORs), with the
highest Operational Tempo (OPTEMPO) (84.6%) of any deployed unit during that time
period. Her deployment included several lengthy uninterrupted at-sea periods, including one
of 75 days, during which she conducted highly classified missions of vital importance to the
nation’s security. At no time during these missions, or her entire deployment, was she unable
to accomplish her tasking due to material failure.
33 Attachment entitled “Examples of Specific System Reliability Problems; Reliability Problems are Pervasive Across
all Services and All Types of Systems,” to memorandum dated June 30, 2010, from J. Michael Gilmore, Director,
Operational Test and Evaluation, to Principal Deputy Under Secretary of Defense (Acquisition, Technology and
Logisitcs), on State of Reliability, posted on InsideDefense.com (subscription required) on July 7, 2010.
34 At this point in the statement, there is a footnote that states: “20 total Fail-to-Sail events over the program to date, 5
on ships that have completed PSA.” A PSA is an availability (i.e., a period of time when the ship is in a shipyard,
available for maintenance work to be performed on it) that follows a ship’s shakedown cruise (i.e., a cruise on a newly
built ship that is intended in part to uncover defects in the ship’s construction).
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The VIRGINIA program measures System Reliability using Under Secretary of Defense for
Acquisition, Technology and Logistics Life Cycle Sustainment metrics and is currently
scored at 97.7%, comparable to or higher than other classes of submarines. This level of
reliability was achieved by invoking reliability, maintainability, and availability
requirements during design development.
Subsystem reliability issues are managed by the respective Participating Managers
(PARMs), which are separate program offices that supply capability to all classes of
submarines in accordance with the Team Submarine business practice. In many cases the
specific issues noted by the report have already been corrected. Subsystem reliability also
performed at a high level during USS VIRGINIA’s deployment and is included in the
statistics above.
Mold-in-Place Special Hull Treatment (MIP/SHT) debonding has not caused any fail-to-sail
events over the life of the program. The debonding issue has been aggressively pursued since
its recognition in 2006. The problem was largely due to immature application processes,
which have been corrected on later ships. Because of the parallel construction process,
MIP/SHT was applied to several ships before the first at-sea testing of USS VIRGINIA. The
Program Office continues to monitor the performance on all ships and pursue
improvement.35
January 21, 2011, Press Report
A January 21, 2011, press article stated:
The sharkskin-like coating that peeled off early Virginia Class submarines in large swatches
appears to be adhering better to newer boats, a top Navy procurement official said.
After the Navy found that the specialized, sonar-absorbing coating had sloughed off three of
the first four subs in the class, they initiated an investigation to determine the cause of the
problem and how to fix it.
“Clearly we had problems on the early ships,” said Vice Adm. Kevin M. McCoy,
commander of Naval Sea Systems Command, the Navy’s ship-buying and maintenance arm.
“We think, for the most part, those issues are behind us.”
The loss of the specialized hull coating—designed to be “anechoic,” or able to absorb waves
of active sonar so it does not bounce back to the ship or sub emitting the signal—could
imperil underway submarines by making them easier to detect.
Despite those problems, McCoy insisted that the hull-coating failures have not contributed to
operational issues for the submarines, saying “It’s not been a real big deal for us.”
McCoy said the Navy’s investigation revealed “no single smoking gun,” and that he’s “very
confident going forward” that the Navy’s fast-attack submarines will retain the thick black
coating that helps keep them silent and stealthy.
Affected submarines are being fixed during their normal dry-dock maintenance periods….
35 July 15, 2010, Navy statement to Inside the Navy (Dan Taylor), entitled “Media Request from Dan Taylor,” provided
to CRS by Navy Office of Legislative Affairs on July 26, 2010. See also Dan Taylor, “VA-Class Program: Depictions
Of Sub As Unreliable Are ‘Inaccurate,’” Inside the Navy, July 26, 2010; Peter Frost, “Peeling Submarine Skin Prompts
Navy Inquiry,” Newport News Daily Press, September 19, 2010.
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Although Northrop and Electric Boat apply the hull coatings, the Navy specifies the process
of application.
The sea service has said it started making procedural changes in how the coating was applied
immediately after the first problems surfaced in 2007 on the Virginia, the first sub of the
class and the one with the most acute debonding problem to date.
While McCoy declined to reveal the specific of how the process has changed, he said it “has
gotten much better improved in terms of temperature controls, humidity controls and
adhesion.”36
March 2011 GAO Report
A March 2011 GAO report stated:
The Navy is working to address quality control and reliability concerns. In November 2009,
the Director, Defense Research and Engineering (DDR&E), highlighted several design and
reliability-related deficiencies the program needed to address, but concluded they did not
preclude the program from moving forward into full-rate production. These deficiencies,
which included multiple subsystem failures, multiple “fail to sail” issues, and test aborts,
were also cited by the Director, Operational Test and Evaluation, as examples of the
pervasive reliability problems that affect DOD systems. DDR&E also noted that the program
did not have a reliability measurement or growth program—a best practice. Navy officials
told us that plans are in place to mitigate each of these issues. For example, according to the
Navy, subsystem problems are being addressed with the vendors and shipyards through
changes to installation techniques, engineering changes or redesigns, and evaluations of
alternative technologies. Navy officials also told us fail to sail events are not unexpected
early in a program and that the Virginia class submarine has not experienced any fail to sail
events while deployed. According to Navy and DDR&E officials, problems with a special
hull treatment separating from the hull have also been mitigated by changing surface
preparation techniques and redesigning coating molds. Delivered hulls will have the coating
restored as needed, and more significant restoration can occur during scheduled dry-
dockings. According to Navy officials, this issue is not unique to the Virginia class and has
not resulted in any operational deficiencies. Navy officials said the shipbuilder has also
addressed the torpedo-room manufacturing quality issues that were identified in 2009.37
Legislative Activity for FY2012
The Navy’s proposed FY2012 budget requests $3,232.2 million in procurement funding to
complete the procurement cost of the 15th and 16th Virginia-class boats. The FY2012 budget
estimates the combined procurement cost of these two boats at $5,142.8 million, and under Navy
budget plans the boats are to receive a total of $1,910.5 million in prior-year advance
procurement (AP) and Economic Order Quantity (EOQ) funding. The Navy’s proposed FY2012
budget also requests $1,524.8 million in AP funding for Virginia-class boats to be procured in
future years.
36 Peter Frost, “Hull Coating Failures On Virginia Class Submarines ‘Are Behind Us,’ Navy Says,” Newport News
Daily Press, January 21, 2011.
37 Government Accountability Office, Defense Acquisitions[:] Assessments of Selected Weapon Programs, GAO-11-
233SP, March 2011, p. 126.
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Appendix A. Legislative Activity for FY2011
This appendix presents legislative activity for FY2011 other than continuing resolutions.
FY2011 Funding Request
The Navy’s proposed FY2011 budget requested $3,441.5 million in procurement funding to
complete the procurement cost of the 13th and 14th Virginia-class boats. The FY2011 budget
estimated the combined procurement cost of these two boats at $5,344.4 million, and the boats
through FY2010 had received a total of $1,903.0 million in prior-year advance procurement (AP)
and Economic Order Quantity (EOQ) funding. The Navy’s proposed FY2011 budget also
requested $1,436.8 million in AP funding for Virginia-class boats to be procured in future years,
and $254.4 million in Economic Order Quantity (EOQ) purchases of long-leadtime items for
Virginia-class boats to be procured under the FY2009-FY2013 MYP arrangement.
FY2011 Defense Authorization Act (H.R. 6523/P.L. 111-383)
House (H.R. 5136)
The House Armed Services Committee, in its report (H.Rept. 111-491 of May 21, 2010) on the
FY2011 defense authorization bill (H.R. 5136), recommends approval of the Navy’s FY2011
request for procurement and advance procurement funding for the Virginia-class program (page
73). The report states the following in the section discussing the Navy’s FY2011 funding request
for its research and development account:
Development of hybrid multi-functional composites for submarine structures
The budget request contained $608.6 million in PE 63561N38 for advanced submarine
systems development, but contained no funding for the development of hybrid multi-
functional composites for submarine structures.
The committee notes the excellent results of the Virginia-class submarine program of
composite technology in the areas of the wide aperture array and main ballast tank vent
gratings. The committee understands the use of composites is beneficial in life-cycle
maintenance costs, as well as weight savings, which are always a key element of submarine
design. The committee understands that emerging technologies using hybrid composite
structures have the potential to continue to reduce weight with increased strength for many
submarine applications.
The committee recommends an increase of $4.0 million in PE 63561N for continued
development of hybrid multi-functional composite technology. (Page 157)
38 Line items in DOD research and development accounts are called program elements (PEs).
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Senate (S. 3454)
The FY2011 defense authorization bill (S. 3454), as reported by the Senate Armed Services
Committee (S.Rept. 111-201 of June 4, 2010), recommends approval of the Navy’s request for
FY2011 procurement and advance procurement funding for the Virginia-class program (see page
677 of the printed bill).
Final Version (H.R. 6523/P.L. 111-383)
Section 102(a)(3) of H.R. 6523/P.L. 111-383 of January 7, 2011, authorizes FY2011 funding for
the Navy’s entire shipbuilding account at the requested amount. The act contains no provisions
relating specifically to procurement of Virginia-class submarines. The joint explanatory statement
of the House and Senate Armed Services Committees on H.R. 6523 does not discuss procurement
of Virginia-class submarines.
FY2011 DOD Appropriations Bill (S. 3800)
Senate
The Senate Appropriations Committee, in its report (S.Rept. 111-295 of September 16, 2010) on
S. 3800, recommends approval of the Navy’s FY2011 request for procurement and advance
procurement funding for the Virginia-class program (page 86).
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Appendix B. Past SSN Force-Level Goals
This appendix summarizes attack submarine force-level goals since the Reagan Administration
(1981-1989).
The Reagan-era plan for a 600-ship Navy included an objective of achieving and maintaining a
force of 100 SSNs.
The George H. W. Bush Administration’s proposed Base Force plan of 1991-1992 originally
called for a Navy of more than 400 ships, including 80 SSNs.39 In 1992, however, the SSN goal
was reduced to about 55 boats as a result of a 1992 Joint Staff force-level requirement study
(updated in 1993) that called for a force of 51 to 67 SSNs, including 10 to 12 with Seawolf-level
acoustic quieting, by the year 2012.40
The Clinton Administration, as part of its 1993 Bottom-Up Review (BUR) of U.S. defense policy,
established a goal of maintaining a Navy of about 346 ships, including 45 to 55 SSNs.41 The
Clinton Administration’s 1997 QDR supported a requirement for a Navy of about 305 ships and
established a tentative SSN force-level goal of 50 boats, “contingent on a reevaluation of
peacetime operational requirements.”42 The Clinton Administration later amended the SSN figure
to 55 boats (and therefore a total of about 310 ships).
The reevaluation called for in the 1997 QDR was carried out as part of a Joint Chiefs of Staff
(JCS) study on future requirements for SSNs that was completed in December 1999. The study
had three main conclusions:
• “that a force structure below 55 SSNs in the 2015 [time frame] and 62 [SSNs] in
the 2025 time frame would leave the CINC’s [the regional military commanders-
in-chief] with insufficient capability to respond to urgent crucial demands
without gapping other requirements of higher national interest. Additionally, this
force structure [55 SSNs in 2015 and 62 in 2025] would be sufficient to meet the
modeled war fighting requirements;”
• “that to counter the technologically pacing threat would require 18 Virginia class
SSNs in the 2015 time frame;” and
39 For the 80-SSN figure, see Statement of Vice Admiral Roger F. Bacon, U.S. Navy, Assistant Chief of Naval
Operations (Undersea Warfare) in U.S. Congress, House Armed Services Committee, Subcommittee on Seapower and
Strategic and Critical Materials, Submarine Programs, March 20, 1991, pp. 10-11, or Statement of Rear Admiral
Raymond G. Jones, Jr., U.S. Navy, Deputy Assistant Chief of Naval Operations (Undersea Warfare), in U.S. Congress,
Senate Armed Services Committee, Subcommittee on Projection Forces and Regional Defense, Submarine Programs,
June 7, 1991, pp. 10-11.
40 See Richard W. Mies, “Remarks to the NSL Annual Symposium,” Submarine Review, July 1997, p. 35; “Navy Sub
Community Pushes for More Subs than Bottom-Up Review Allowed,” Inside the Navy, November 7, 1994, pp. 1, 8-9;
Attack Submarines in the Post-Cold War Era: The Issues Facing Policymakers, op. cit., p. 14; Robert Holzer, “Pentagon
Urges Navy to Reduce Attack Sub Fleet to 50,” Defense News, March 15-21, 1993, p. 10; Barbara Nagy, “ Size of Sub
Force Next Policy Battle,” New London Day, July 20, 1992, pp. A1, A8.
41 Secretary of Defense Les Aspin, U.S. Department of Defense, Report on the Bottom-Up Review, October 1993, pp.
55-57.
42 Secretary of Defense William S. Cohen, U.S. Department of Defense, Report of the Quadrennial Defense Review,
May 1997, pp. 29, 30, 47.
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• “that 68 SSNs in the 2015 [time frame] and 76 [SSNs] in the 2025 time frame
would meet all of the CINCs’ and national intelligence community’s highest
operational and collection requirements.”43
The conclusions of the 1999 JCS study were mentioned in discussions of required SSN force
levels, but the figures of 68 and 76 submarines were not translated into official Department of
Defense (DOD) force-level goals.
The George W. Bush Administration’s report on the 2001 QDR revalidated the amended
requirement from the 1997 QDR for a fleet of about 310 ships, including 55 SSNs. In revalidating
this and other U.S. military force-structure goals, the report cautioned that as DOD’s
“transformation effort matures—and as it produces significantly higher output of military value
from each element of the force—DOD will explore additional opportunities to restructure and
reorganize the Armed Forces.”44
DOD and the Navy conducted studies on undersea warfare requirements in 2003-2004. One of
the Navy studies—an internal Navy study done in 2004—reportedly recommended reducing the
attack submarine force level requirement to as few as 37 boats. The study reportedly
recommended homeporting a total of nine attack submarines at Guam and using satellites and
unmanned underwater vehicles (UUVs) to perform ISR missions now performed by attack
submarines.45
In March 2005, the Navy submitted to Congress a report projecting Navy force levels out to
FY2035. The report presented two alternatives for FY2035—a 260-ship fleet including 37 SSNs
and 4 SSGNs, and a 325-ship fleet including 41 SSNs and 4 SSGNs.46
In May 2005, it was reported that a newly completed DOD study on attack submarine
requirements called for maintaining a force of 45 to 50 boats.47
In February 2006, the Navy proposed to maintain in coming years a fleet of 313 ships, including
48 SSNs.
43 Department of Navy point paper dated February 7, 2000. Reprinted in Inside the Navy, February 14, 2000, p. 5.
44 U.S. Department of Defense, Quadrennial Defense Review, September 2001, p. 23.
45 Bryan Bender, “Navy Eyes Cutting Submarine Force,” Boston Globe, May 12, 2004, p. 1; Lolita C. Baldor, “Study
Recommends Cutting Submarine Fleet,” NavyTimes.com, May 13, 2004.
46 U.S. Department of the Navy, An Interim Report to Congress on Annual Long-Range Plan for the Construction of
Naval Vessels for FY 2006. The report was delivered to the House and Senate Armed Services and Appropriations
Committees on March 23, 2005.
47 Robert A. Hamilton, “Delegation Calls Report on Sub Needs Encouraging,” The Day (New London, CT), May 27,
2005; Jesse Hamilton, “Delegation to Get Details on Sub Report,” Hartford (CT) Courant, May 26, 2005.
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Appendix C. Options for Funding SSNs
This appendix presents information on some alternatives for funding SSNs that was originally
incorporated into this report during discussions in earlier years on potential options for Virginia-
class procurement.
Alternative Funding Methods
Alternative methods of funding the procurement of SSNs include but are not necessarily limited
to the following:
• two years of advance procurement funding followed by full funding—the
traditional approach, under which there are two years of advance procurement
funding for the SSN’s long-leadtime components, followed by the remainder of
the boat’s procurement funding in the year of procurement;
• one year of advance procurement funding followed by full funding—one year
of advance procurement funding for the SSN’s long-leadtime components,
followed by the remainder of the boat’s procurement funding in the year of
procurement;
• full funding with no advance procurement funding (single-year full
funding)—full funding of the SSN in the year of procurement, with no advance
procurement funding in prior years;
• incremental funding—partial funding of the SSN in the year of procurement,
followed by one or more years of additional funding increments needed to
complete the procurement cost of the ship; and
• advance appropriations—a form of full funding that can be viewed as a
legislatively locked in form of incremental funding.48
Navy testimony to Congress in early 2007, when Congress was considering the FY2008 budget,
suggested that two years of advance procurement funding are required to fund the procurement of
an SSN, and consequently that additional SSNs could not be procured until FY2010 at the
earliest.49 This testimony understated Congress’s options regarding the procurement of additional
SSNs in the near term. Although SSNs are normally procured with two years of advance
procurement funding (which is used primarily for financing long-leadtime nuclear propulsion
components), Congress can procure an SSN without prior-year advance procurement funding, or
48 For additional discussion of these funding approaches, see CRS Report RL32776, Navy Ship Procurement:
Alternative Funding Approaches—Background and Options for Congress, by Ronald O’Rourke.
49 For example, at a March 1, 2007, hearing before the House Armed Services Committee on the FY2008 Department
of the Navy budget request, Representative Taylor asked which additional ships the Navy might want to procure in
FY2008, should additional funding be made available for that purpose. In response, Secretary of the Navy Donald
Winter stated in part: “The Virginia-class submarines require us to start with a two-year advanced procurement, to be
able to provide for the nuclear power plant that supports them. So we would need to start two years in advance. What
that says is, if we were able to start in ‘08 with advanced procurement, we could accelerate, potentially, the two a year
to 2010.” (Source: Transcript of hearing.) Navy officials made similar statements before the same subcommittee on
March 8, 2007, and before the Senate Armed Services Committee on March 29, 2007.
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with only one year of advance procurement funding. Consequently, Congress at that time had
option of procuring an additional SSN in FY2009 and/or FY2010.
Single-year full funding has been used in the past by Congress to procure nuclear-powered ships
for which no prior-year advance procurement funding had been provided. Specifically, Congress
used single-year full funding in FY1980 to procure the nuclear-powered aircraft carrier CVN-71,
and again in FY1988 to procure the CVNs 74 and 75. In the case of the FY1988 procurement,
under the Administration’s proposed FY1988 budget, CVNs 74 and 75 were to be procured in
FY1990 and FY1993, respectively, and the FY1988 budget was to make the initial advance
procurement payment for CVN-74. Congress, in acting on the FY1988 budget, decided to
accelerate the procurement of both ships to FY1988, and fully funded the two ships that year at a
combined cost of $6.325 billion. The ships entered service in 1995 and 1998, respectively.50
The existence in both FY1980 and FY1988 of a spare set of Nimitz-class reactor components was
not what made it possible for Congress to fund CVNs 71, 74, and 75 with single-year full
funding; it simply permitted the ships to be built more quickly. What made it possible for
Congress to fund the carriers with single-year full funding was Congress’s constitutional authority
to appropriate funding for that purpose.
Procuring an SSN with one year of advance procurement funding or no advance procurement
funding would not materially change the way the SSN would be built—the process would still
encompass about two years of advance work on long-leadtime components, and an additional six
years or so of construction work on the ship itself. The outlay rate for the SSN could be slower, as
outlays for construction of the ship itself would begin one or two years later than normal.
Congress in the past has procured certain ships in the knowledge that those ships would not begin
construction for some time and consequently would take longer to enter service than a ship of that
kind would normally require. When Congress procured two nuclear-powered aircraft carriers
(CVNs 72 and 73) in FY1983, and another two (CVNs 74 and 75) in FY1988, it did so in both
cases in the knowledge that the second ship in each case would not begin construction until some
time after the first.
Procuring SSNs in a 2-1-2 Pattern
Some potential approaches for procuring additional boats in FY2009-FY2011 that were discussed
in earlier years could have resulted in a pattern of procuring two boats in a given year, followed
by one boat the following year, and two boats the year after that—a 2-1-2 pattern. Navy
testimony to Congress in early 2007 and early 2008 suggested that if the procurement rate were
increased in a given year to two boats, it would not be best, from an industrial-base point of view,
to decrease the rate to a single boat the following year, and then increase it again to two boats the
next year, because of the workforce fluctuations such a profile would produce.51
50 In both FY1988 and FY1980, the Navy had a spare set of Nimitz (CVN-68) class nuclear propulsion components in
inventory. The existence of a spare set of components permitted the carriers to be built more quickly than would have
otherwise been the case, but it is not what made the single-year full funding of these carriers possible. What made it
possible was Congress’ authority to appropriate funds for the purpose.
51 See, for example, the spoken remarks of Secretary of the Navy Donald Winter at hearings before the House Armed
Services Committee on March 1, 2007, and March 6, 2008, and spoken remarks by other Navy officials at a March 29,
2007, hearing before the Senate Armed Services Committee and at a March 14, 2008, hearing before the Seapower and
(continued...)
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This statement may overstate the production-efficiency disadvantages of a 2-1-2 pattern. If two
boats were procured in a given year, followed by one boat the next year—a total of three boats in
24 months—the schedule for producing the three boats could be phased so that, for a given stage
in the production process, the production rate would be one boat every eight months. A
production rate of one boat every 8 months might actually help the industrial base make the
transition from the current schedule of one boat every 12 months (one boat per year) to one boat
every 6 months (two boats per year). Viewed this way, a 2-1-2 pattern might actually lead to some
benefits in production efficiency on the way to a steady rate of two boats per year. The Navy’s
own 30-year (FY2009-FY2038) SSN procurement plan calls for procuring SSNs in a 1-2-1-2
pattern in FY2029-FY2038.
Author Contact Information
Ronald O'Rourke
Specialist in Naval Affairs
rorourke@crs.loc.gov, 7-7610
(...continued)
Expeditionary Forces subcommittee of the House Armed Services Committee.
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