Navy Virginia (SSN-774) Class Attack
Submarine Procurement: Background and
Issues for Congress

Ronald O'Rourke
Specialist in Naval Affairs
April 2, 2012
Congressional Research Service
7-5700
www.crs.gov
RL32418
CRS Report for Congress
Pr
epared for Members and Committees of Congress

Navy Virginia (SSN-774) Class Attack Submarine Procurement

Summary
The Navy’s proposed FY2013 budget requests $3,217.6 million in procurement funding to
complete the procurement cost of the 17th and 18th Virginia (SSN-774) class nuclear-powered
attack submarines. The FY2013 budget estimates the combined procurement cost of these two
boats at $5,107.9 million, and the ships have received a total of $1,890.3 million in prior-year
advance procurement (AP) and Economic Order Quantity (EOQ) funding. The Navy’s proposed
FY2013 budget also requests $874.9 million in AP funding for Virginia-class boats to be procured
in future years. The Navy’s proposed FY2013 budget defers the scheduled procurement of one
Virginia-class boat from FY2014 to FY2018.
The two Virginia-class boats requested for procurement in FY2013 are the final two in a group of
eight covered by a multiyear procurement (MYP) arrangement for the period FY2009-FY2013.
The Navy this year is requesting congressional approval for a new MYP arrangement that would
cover the next nine Virginia-class boats scheduled for procurement in FY2014-FY2018 (in annual
quantities of 1-2-2-2-2).
The Department of Defense (DOD) announced in January 2012 that it wants to build Virginia-
class boats procured in FY2019 and subsequent years with an additional mid-body section, called
the Virginia Payload Module (VPM), that contains four large-diameter, vertical launch tubes that
the boats would use to store and fire additional Tomahawk cruise missiles or other payloads, such
as large-diameter unmanned underwater vehicles (UUVs). Building Virginia-class boats with the
VPM might increase their unit procurement costs by about 15%-20%, and would increase the
total number of torpedo-sized weapons (such as Tomahawks) that they could carry by about 76%.
The Navy’s FY2013 30-year SSN procurement plan, if implemented, would not be sufficient to
maintain a force of 48 SSNs consistently over the long run. The Navy projects under that plan
that the SSN force would fall below 48 boats starting in FY2022, reach a minimum of 43 boats in
FY2028-FY2030, and remain below 48 boats through FY2034.
Potential issues for Congress regarding the Virginia-class program include the following:
• whether to approve the Navy’s request for a new MYP arrangement for the nine
Virginia-class boats scheduled for procurement in FY2014-FY2018;
• whether to restore procurement of a second Virginia-class boat in FY2014—an
issue that could have implications for Virginia-class AP funding in FY2013;
• the Virginia-class procurement rate more generally in coming years, particularly
in the context of the projected SSN shortfall and the larger debate over future
U.S. defense strategy and defense spending; and
• Virginia-class program issues raised in a December 2011 report from DOD’s
Director, Operational Test and Evaluation (DOT&E).
The Navy’s Ohio Replacement (SSBN[X]) ballistic missile submarine program is discussed in
CRS Report R41129, Navy Ohio Replacement (SSBN[X]) Ballistic Missile Submarine Program:
Background and Issues for Congress
, by Ronald O'Rourke.
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Navy Virginia (SSN-774) Class Attack Submarine Procurement

Contents
Introduction...................................................................................................................................... 1
Background...................................................................................................................................... 1
U.S. Navy Submarines .............................................................................................................. 1
Attack Submarine Force Levels ................................................................................................ 2
Force-Level Goal................................................................................................................. 2
Force Level at End of FY2011 ............................................................................................ 2
Los Angeles- and Seawolf-Class Boats ..................................................................................... 2
Virginia (SSN-774) Class Program ........................................................................................... 3
General ................................................................................................................................ 3
Past and Projected Annual Procurement Quantities ............................................................ 4
Multiyear Procurement (MYP) ........................................................................................... 4
Joint Production Arrangement............................................................................................. 5
Cost-Reduction Effort ......................................................................................................... 6
Virginia Payload Module (VPM) ........................................................................................ 7
FY2013 Funding Request.................................................................................................... 7
Submarine Construction Industrial Base ................................................................................... 8
Projected SSN Shortfall............................................................................................................. 8
Size and Timing of Shortfall ............................................................................................... 8
2006 Navy Study on Options for Mitigating Projected Shortfall...................................... 10
Issues for Congress ........................................................................................................................ 12
Multiyear Procurement Proposed for FY2014-FY2018 .......................................................... 12
Procuring a Second Virginia-Class Boat in FY2014 ............................................................... 12
Advance Procurement Funding in FY2013....................................................................... 13
Option of Incremental Funding ......................................................................................... 13
9 or 10 Boats in Proposed MYP........................................................................................ 13
Arguments of Supporters and Skeptics ............................................................................. 14
Virginia-Class Procurement Rate More Generally in Coming Years ...................................... 15
Mitigating Projected SSN Shortfall................................................................................... 15
Larger Debate on Defense Strategy and Defense Spending.............................................. 15
Program Issues Raised in December 2011 DOT&E Report.................................................... 16
Legislative Activity for FY2013.................................................................................................... 18
FY2013 Funding Request........................................................................................................ 18

Figures
Figure 1. Virginia-Class Attack Submarine ..................................................................................... 4

Tables
Table 1. Annual Numbers of Virginia-Class Boats Procured........................................................... 4
Table 2. Projected SSN Shortfall ..................................................................................................... 9

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Appendixes
Appendix A. Past SSN Force-Level Goals .................................................................................... 19
Appendix B. Options for Funding SSNs........................................................................................ 21

Contacts
Author Contact Information........................................................................................................... 23

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Navy Virginia (SSN-774) Class Attack Submarine Procurement

Introduction
This report provides background information and issues for Congress on the Virginia-class
nuclear-powered attack submarine (SSN) program. The Navy’s proposed FY2013 budget requests
$4,092.5 in procurement and advance procurement (AP) funding for the program. 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 Ohio Replacement (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 Ohio Replacement (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 Ohio Replacement (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 Levels
Force-Level Goal
The Navy wants to achieve and maintain a fleet in coming years of about 310-316 ships,
including about 48 SSNs (and 4 SSGNs).6 For a review of SSN force level goals since the Reagan
Administration, see Appendix A.
Force Level at End of FY2011
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 and 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 FY2011
included the following:
• 42 Los Angeles (SSN-688) class boats;
• 3 Seawolf (SSN-21) class boats; and
• 8 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

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).
6 For additional information on Navy force-level goals, see CRS Report RL32665, Navy Force Structure and
Shipbuilding Plans: Background and Issues for Congress
, by Ronald O'Rourke.
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Angeles class boats or 688Is. As of the end of FY2011, 20 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
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.7 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.8
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,9 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.

7 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.
8 SSN-23 is 100 feet longer than SSN-21 and SSN-22 and has a submerged displacement of 12,158 tons.
9 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 Annual Procurement Quantities
Table 1 shows annual numbers of Virginia-class boats procured from FY1998 (the lead boat)
through FY2012, and numbers scheduled for procurement under the FY2013-FY2017 Future
Years Defense Plan (FYDP).
Table 1. Annual Numbers of Virginia-Class Boats Procured
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
1 1 0 1 1 1 1 1 1 1
FY08 FY09 FY10 FY11 FY12 FY13
FY14
FY15
FY16
FY17
1 1 1 2 2 2
1
2
2
2
Source: Table prepared by CRS based on U.S. Navy data.
Multiyear Procurement (MYP)
The eight Virginia-class boats shown in Table 1 for the period FY2009-FY2013 are being
procured under a multiyear procurement (MYP) arrangement10 approved by Congress in FY2008

10 For a discussion of MYP arrangements, see CRS Report R41909, Multiyear Procurement (MYP) and Block Buy
Contracting in Defense Acquisition: Background and Issues for Congress
, by Ronald O'Rourke and Moshe Schwartz.
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and FY2009.11 The five Virginia-class boats procured in FY2004-FY2008 were also procured
under an MYP arrangement. The four boats procured in FY1998-FY2002 were procured under a
somewhat similar arrangement called a block buy contract.12 The boat procured in FY2003 fell
between the FY1998-FY2002 block buy contract and the FY2004-FY2008 MYP arrangement,
and was contracted for separately.
The Navy this year is requesting congressional approval for a new MYP arrangement that would
cover the next nine Virginia-class boats scheduled for procurement in FY2014-FY2018 (in annual
quantities of 1-2-2-2-2). The Navy states that
The Future Years Defense Plan (FYDP) in the FY13 Authorization Act assumes enactment
of the FY14 Appropriations Act with MYP authority and includes a nine-ship, five-year
MYP strategy with a build profile of one ship in FY14 and two per year from FY15 through
FY18. Due to complexity of shipbuilding contracts, much of the proposal development, as
well as negotiations between the Department of the Navy (DON) and the shipbuilders, will
take place in FY2013. Receiving MYP authority in FY13 will help facilitate negotiation
efforts.13
The Navy estimates that procuring these nine boats under an MYP arrangement would reduce
their combined procurement cost by $4,487.6 million in then-year dollars, or about 14.4%,
compared to procuring these nine boats with separate annual contracts. The estimated savings
when calculated in real (i.e., inflation adjusted) terms are $3,819.6 million in constant FY2012
dollars, or about 13.8%. The estimated savings when calculated on a net present value (NPV)
basis are $3,333.3 million, or about 13.3%.14
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 Newport News Shipbuilding (NNS), of Newport News,
VA, which forms part of Huntington Ingalls Industries (HII).15 Under the arrangement, GD/EB
builds certain parts of each boat, NNS builds certain other parts of each boat, and the yards take

11 Section 8011 of the compromise version of the FY2009 defense appropriations act (Division C of H.R. 2638/P.L.
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.
12 For a discussion of block buy contracting, see CRS Report R41909, Multiyear Procurement (MYP) and Block Buy
Contracting in Defense Acquisition: Background and Issues for Congress
, by Ronald O'Rourke and Moshe Schwartz.
13 Department of the Navy, Department of the Navy Fiscal year (FY) 2013 Budget Estimates, Justification of Estimates,
Shipbuilding and Conversion, Navy
, February 2012, Exhibit MYP-1, Multiyear Procurement Criteria (MYP, Page 1 of
8), pdf page 62 of 246.
14 Department of the Navy, Department of the Navy Fiscal year (FY) 2013 Budget Estimates, Justification of Estimates,
Shipbuilding and Conversion, Navy
, February 2012, Exhibit MYP-1, Multiyear Procurement Criteria (MYP, Page 8 of
8), pdf page 69 of 246.
15 HII previously was part of Northrop Grumman, during which time it was known as Northrop Grumman Shipbuilding
(NGSB). GD/EB and NNS are the only two shipyards in the country capable of building nuclear-powered ships.
GD/EB builds submarines only, while NNS also builds nuclear-powered aircraft carriers and is capable of building
other types of surface ships.
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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
NNS 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 NNS 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 could 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
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 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.16

16 For detailed discussions 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; and John D.
Butler, “The Sweet Smell of Acquisition Success,” U.S. Naval Institute Proceedings, June 2011: 22-28.
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Virginia Payload Module (VPM)
DOD announced in January 2012 that it wants to build Virginia-class boats procured in FY2019
and subsequent years with an additional mid-body section, called the Virginia Payload Module
(VPM).17 The VPM, reportedly about 94 feet in length,18 contains four large-diameter, vertical
launch tubes that would be used to store and fire additional Tomahawk cruise missiles or other
payloads, such as large-diameter unmanned underwater vehicles (UUVs).19
The four additional launch tubes in the VPM could carry a total of 28 additional Tomahawk cruise
missiles (7 per tube),20 which would increase the total number of torpedo-sized weapons (such as
Tomahawks) carried by the Virginia class design from about 37 to about 65—an increase of about
76%.21
Building Virginia-class boats with the VPM would compensate for a sharp loss in submarine
force weapon-carrying capacity that will occur with the retirement in FY2026-FY2028 of the
Navy’s four Ohio-class cruise missile/special operations forces support submarines (SSGNs).22
Each SSGN is equipped with 24 large-diameter vertical launch tubes, of which 22 can be used to
carry up to 7 Tomahawks each, for a maximum of 154 vertically launched Tomahawks per boat,
or 616 vertically launched Tomahawks for the four boats. Twenty-two Virginia-class boats built
with VPMs could carry 616 Tomahawks in their VPMs.
The Navy estimates that adding the VPM would increase procurement cost of the Virginia-class
design by about 20%, according to a June 2011 press report,23 or by about 15% to 19%, according
to an October 2011 press report.24
FY2013 Funding Request
The Navy’s proposed FY2013 budget requests $3,217.6 million in procurement funding to
complete the procurement cost of the 17th and 18th Virginia (SSN-774) class nuclear-powered

17 A document released by DOD on January 26, 2012, that outlines selected program actions incorporated into DOD’s
FY2013 budget and future DOD budgets stated that DOD “increased or protected investment in capabilities that
preserve the U.S. military’s ability to project power in contested areas and strike quickly from over the horizon,
including ... [d]esign changes to increase [the] cruise missile capacity of future Virginia-class submarines.”
(Department of Defense, Defense Budget Priorities and Choices, January 2012, p. 5.)
18 Christopher P. Cavas, “Innovations, No-Shows At Sea-Air-Space Exhibition,” Defense News, April 18, 2011: 4. For
additional press articles discussing the VPM, see Christopher P. Cavas, “U.S. Navy Eyes Dual-Mission Sub,” Defense
News
, October 17, 2011; and Lee Hudson, “New Virginia-Class Payload Module May Replace SSGN Capability,”
Inside the Navy, October 24, 2011.
19 For an illustration of the VPM, see http://www.gdeb.com/news/advertising/images/VPM_ad/VPM.pdf, which was
accessed by CRS on March 1, 2012.
20 Michael J. Conner, “Investing in the Undersea Future,” U.S. Naval Institute Proceedings, June 2011: 16-20.
21 A Virginia-class SSN can carry about 25 Tomahawks or other torpedo-sized weapons in its four horizontal torpedo
tubes and associated torpedo room, and an additional 12 Tomahawk cruise missiles in its bow-mounted vertical lunch
tubes, for a total of about 37 torpedo-sized weapons. Another 28 Tomahawks in four mid-body vertical tubes would
increase that total by about 76%.
22 Michael J. Conner, “Investing in the Undersea Future,” U.S. Naval Institute Proceedings, June 2011: 16-20.
23 Michael J. Conner, “Investing in the Undersea Future,” U.S. Naval Institute Proceedings, June 2011: 16-20.
24 Christopher P. Cavas, “U.S. Navy Eyes Dual-Mission Sub,” Defense News, October 17, 2011. The article quotes
Navy officials as estimating that adding the mid-body section would add $400 million to $500 million to the roughly
$2.6 billion procurement cost of a Virginia-class submarine.
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attack submarines. The FY2013 budget estimates the combined procurement cost of these two
boats at $5,107.9 million, and the ships have received a total of $1,890.3 million in prior-year
advance procurement (AP) and Economic Order Quantity (EOQ) funding. The Navy’s proposed
FY2013 budget also requests $874.9 million in AP funding for Virginia-class boats to be procured
in future years.
Submarine Construction Industrial Base
In addition to GD/EB and NNS, the submarine construction industrial base includes scores of
supplier firms, as well as laboratories and research facilities, in numerous states. Much of the total
material procured from supplier firms for the construction of submarines 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.25 In terms of
work provided to these firms, a carrier nuclear propulsion plant is roughly equivalent to five
submarine propulsion plants.
Much of the design and engineering portion of the submarine construction industrial base is
resident at GD/EB. Smaller portions are resident at NNS 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 Ohio Replacement Program or SSBN(X).26
Projected SSN Shortfall
Size and Timing of Shortfall
The Navy’s FY2013 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 under the plan that the SSN force would fall below 48 boats starting in FY2022, reach a
minimum of 43 boats in FY2028-FY2030, and remain below 48 boats through 2034. 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 is not as large under the FY2013 30-year shipbuilding plan as it was
under the FY2012 30-year shipbuilding plan. Under the FY2012 30-year shipbuilding plan, the
SSN force was projected to fall below 48 boats starting in FY2024, reach a minimum of 39 boats
in FY2030, and remain below 48 boats through at least FY2041. The SSN shortfall is projected to
be smaller under the FY2013 plan than under the FY2012 30-year plan in part because the
FY2013 plan includes the procurement of 46 attack submarines compared to 44 attack
submarines under the FY2012 plan.

25 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.
26 For more on the SBN(X) program, see CRS Report R41129, Navy Ohio Replacement (SSBN[X]) Ballistic Missile
Submarine Program: Background and Issues for Congress
, by Ronald O'Rourke.
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The projected SSN shortfall has been discussed in CRS reports and testimony since 1995.
Table 2. Projected SSN Shortfall
As shown in Navy’s FY2013 30-Year (FY2013-FY2042) Shipbuilding Plan
Annual
Shortfall relative to 48-boat goal
procurement
Projected
Fiscal year
quantity
number of SSNs
Number of ships
Percent
13 2
55


14 1
55


15 2
54


16 2
53


17 2
50


18 2
51


19 2
51


20 3
48


21 2
48


22 3
47
-1
-2%
23 2
47
-1
-2%
24 1
46
-2
-4%
25 2
45
-3
-6%
26 1
45
-3
-6%
27 1
44
-4
-8%
28 1
43
-5 -10%
29 1
43
-5 -10%
30 1
43
-5 -10%
31 1
45
-3
-6%
32 1
45
-3
-6%
33 1
46
-2
-4%
34 1
47
-1
-2%
35 1
48


36 1
49


37 1
50


38 2
48


39 1
49


40 2
49


41 1
48


42 2
49


Source: Table prepared by CRS based on Navy’s FY2013 30-year shipbuilding plan. Percent figures rounded to
nearest percent.
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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, 2007.27 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.28
• 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.29
• 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 40.30
• 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.31 The total cost of
extending the lives of the 16 boats would be roughly $500 million in constant
FY2005 dollars.32

27 Navy briefing entitled, “SSN Force Structure, 2020-2033,” presented to CRS and CBO on May 22, 2007.
28 The requirement for 10.0 deployed SSNs, the Navy stated in the briefing, was the current requirement at the time the
study was conducted.
29 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.
30 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.
31 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.
32 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—3 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 seven-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 life.33
• Seven-month deployments might affect retention rates for submarine personnel.
Issues for Congress
Multiyear Procurement Proposed for FY2014-FY2018
One issue for Congress for FY2013 is whether to approve the Navy’s request this year for a new
MYP arrangement for the nine Virginia-class boats scheduled for procurement in FY2014-
FY2018.
Supporters could argue that procuring these nine Virginia-class submarines under an MYP
arrangement would substantially reduce their combined procurement cost, that the Virginia-class
program meets the other statutory requirements to qualify for an MYP, and that the Virginia-class
program has been granted MYP authority on two previous occasions (for FY2004-FY2008, and
for FY2009-FY2013).
Skeptics could argue that in light of current uncertainty over future levels of defense spending, it
would be risky to enter into a commitment to procure a certain minimum number of Virginia-
class submarines over the next five years, and that using annual contracting, although more
expensive than using an MYP arrangement, would give policymakers more flexibility for making
changes in Virginia-class procurement rates in response to potential future reductions in defense
spending.
Procuring a Second Virginia-Class Boat in FY2014
Another issue for Congress for FY2013 is whether to restore procurement of a second Virginia-
class boat in FY2014. Navy officials have testified this year that the second Virginia-class boat
that had been programmed for FY2014 was deferred to FY2018 in this year’s budget submission
for fiscal reasons—because FY2014 has become a tight budget year for the Navy—and that the
Navy is interested in finding a way, if possible, to restore the procurement of a second Virginia-
class boat to FY2014.34

33 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.)
34 See, for example, the spoke testimony of Secretary of the Navy Ray Mabus to the House Armed Services Committee
on February 16, 2012.
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Advance Procurement Funding in FY2013
The question of whether to procure a second boat in FY2014 is an issue for FY2013 because
procuring a second boat in FY2014 could involve adding advance procurement funding for that
boat in FY2013. A comparison between the Navy’s FY2012 and FY2013 budget submissions
suggests that the amount of advance procurement funding in FY2013 could be as much as $700
million to $800 million. Providing advance procurement funding for the boat in FY2013 would
permit the boat to be constructed on a schedule that is more-or-less consistent with what one
might expect for a boat procured in FY2014.
Adding advance procurement funding in FY2013, however, is not absolutely required to procure
a second boat in FY2014—the boat can be procured in FY2014 without any advance procurement
funding in FY2013. Doing so might result in the boat being built on a schedule closer to what one
might expect for a boat procured in FY2015, but the boat would still enter service years earlier
than it would if it is procured in FY2018.35
Option of Incremental Funding
Finding a way to procure a second Virginia-class boat in FY2014 could involve the use of
incremental funding (as opposed to full funding) in the Virginia-class program, at least for the
second boat in FY2014, if not also for one or more other Virginia-class boats. Incrementally
funding a second boat in FY2014 would involve providing some of the boat’s procurement cost in
FY2014 and deferring the remainder to one or more subsequent years.
Incremental funding is normally used only for procuring aircraft carriers and LHD/LHA-type
amphibious assault ships,36 but there have been rare cases when individual ships of other types
have, for various reasons, been procured with incremental funding. Examples include the third
and final Seawolf (SSN-21) class attack submarine, whose procurement was reinstated in
FY1996, and each of the three Zumwalt (DDG-1000) class destroyers that were procured in
FY2007-FY2009.37
9 or 10 Boats in Proposed MYP
If the Virginia-class boat that was deferred to FY2018 in this year’s budget submission was
moved back to FY2014, the total number of boats in the proposed FY2014-FY2018 Virginia-class
MYP arrangement would remain unchanged at nine. (The annual quantities would now be 2-2-2-
2-1 instead of the currently planned 1-2-2-2-2.) If a second Virginia-class boat were added to
FY2014 while leaving unchanged planned procurement quantities in FY2015-FY2018, the total
number of boats in the proposed MYP arrangement would be increased to 10 (in annual quantities
of 2-2-2-2-2).

35 For a broader discussion of options for funding the procurement of submarines, see Appendix B.
36 Incremental funding is allowed for procuring aircraft carriers and LHD/LHA-type amphibious assault ships because
using full funding to procure these ships—which are very expensive and which are procured once every several
years—can cause a one-year “spike” in Navy shipbuilding funding requirements that can be disruptive to other
acquisition programs.
37 The first two DDG-1000s were procured in FY2007 and split-funded (i.e., funded with two-year incremental
funding) in FY2007-FY2008. The third DDG-1000 was procured in FY2009 and split-funded in FY2009-FY2010.
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The Navy estimates that adding a second Virginia-class boat to FY2014 and increasing to 10 the
number of boats in the proposed MYP arrangement would reduce by roughly $700 million the
total cost of the other 9 boats in the arrangement.38 The reduction in cost would come from
maintaining a smooth, two-per-year production rate at the GD/EB and NNS, from increased
spreading of fixed overhead costs at the shipyards, and from reduced costs for components
procured from suppliers in batches of 10 rather than batches of 9. Since the figure of roughly
$700 million is roughly equivalent to one-quarter the cost of a Virginia-class submarine, the
Navy, in effect, is estimating that adding a second Virginia-class boat to FY2014 and increasing
to 10 the number of boats in the proposed MYP arrangement would be roughly 25% self-
financing.
Arguments of Supporters and Skeptics
Adding Second Boat to FY2014; 10 Boats in MYP
Supporters of adding a second Virginia-class boat to FY2014 and increasing to 10 the number of
boats in the proposed MYP arrangement could argue that it would be roughly 25% self-financing
due to the effect it would have on reducing costs for the other 9 boats in the MYP arrangement,
that it would further mitigate the projected SSN shortfall, and that Congress in the past has on
occasion used incremental funding for procuring ships other than aircraft carriers and LHD/LHA-
type amphibious assault ships.
Skeptics of adding a second Virginia-class boat to FY2014 and increasing to 10 the number of
boats in the proposed MYP arrangement could argue that although the idea might be roughly 25%
self-financing, finding the other 75% of the required funding could require offsetting near-term
reductions in other defense programs that would create their own problems, and that the use of
incremental funding should be avoided for the procurement of ships other than aircraft carriers
and LHD/LHA-type amphibious assault ships.
Moving Second Boat from FY2018 Back to FY2014; 9 Boats in MYP
Supporters of moving the second boat in FY2018 back to FY2014 and leaving the number of
boats in the proposed MYP arrangement unchanged at nine could argue that it would permit that
boat to enter service up to four years sooner, and that it would create an option for eventually
adding a second boat in FY2018, which could further mitigate the projected SSN shortfall.
Skeptics of moving the second boat in FY2018 back to FY2014 and leaving the number of boats
in the proposed MYP arrangement unchanged at nine could argue that finding the necessary
funding could require offsetting near-term reductions in other defense programs that would create
their own problems, and that having the boat enter service four years earlier, while helpful, is not
critical, because a second boat procured in FY2018 would enter service in FY2023 or FY2024, in
time to mitigate all but the first year or two of the projected SSN shortfall.

38 Source: Navy briefing to CRS and Congressional Budget Office (CBO), March 16, 2012.
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Virginia-Class Procurement Rate More Generally in Coming Years
Another issue for Congress concerns the Virginia-class procurement rate more generally in
coming years, particularly in the context of the projected SSN shortfall shown in Table 2 and the
larger debate over future U.S. defense strategy and defense spending.
Mitigating Projected SSN Shortfall
In addition to lengthening SSN deployments to 7 months and extending the service lives of
existing SSNs by periods ranging from 3 months to 24 months (see “2006 Navy Study on Options
for Mitigating Projected Shortfall” above), options for more fully mitigating the projected SSN
shortfall include
• refueling a small number of (perhaps one to five) existing SSNs and extending
their service lives by 10 years or more, and
• putting additional Virginia-class boats into the 30-year shipbuilding plan.
It is not clear whether it would be feasible or cost-effective to refuel existing SSNs and extend
their service lives by 10 or more years, given factors such as limits on submarine pressure hull
life.
Larger Debate on 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 Force recommends a Navy of
230 ships, including 37 SSNs,39 and a September 2010 report from the Cato Institute recommends
a Navy of 241 ships, including 40 SSNs.40 Both reports recommend limiting Virginia-class
procurement to one boat per year, as does a September 2010 report from the Center for American
Progress.41 A November 2010 report from a group called the Debt Reduction Task Force
recommends “deferring” Virginia-class procurement.42 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.43 The July
2010 report of an independent panel that assessed the 2010 Quadrennial Defense Review

39 Debt, Deficits, and Defense, A Way Forward[:] Report of the Sustainable Defense Task Force, June 11, 2010, pp.
19-20, 31.
40 Benjamin H. Friedman and Christopher Preble, Budgetary Savings from Military Restraint, Washington, Cato
Institute, September 23, 2010 (Policy Analysis No. 667), pp. 9.
41 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.
42 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.
43 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.
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(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.44 An April 2010 report from the Heritage
Foundation recommends a Navy of 309 ships, including 55 SSNs.45
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 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 in FY2013. If fewer than two boats per year were funded in FY2013, the
contractor would be permitted to renegotiate its costs.
Program Issues Raised in December 2011 DOT&E Report
Another oversight issue for Congress concerns Virginia-class program issues raised in a
December 2011 report from the DOD’s Director, Operational Test and Evaluation (DOT&E)—
DOT&E’s annual report for FY2011. Regarding the Virginia-class program, the report stated:
Assessment
The Navy achieved testing efficiencies by combining operational testing of several programs
into coordinated test events. Since testing is interdependent, the consolidation of the
Virginia, A-RCI [Acoustic Rapid COTS Insertion Program], acoustic arrays, other sensors,
and AN/BYG-1 [Combat Control System] TEMPs [Test and Evaluation Master Plans] into
an Undersea Enterprise Capstone document would increase testing efficiency and enable a
full end-to-end evaluation of submarine capability in the applicable mission areas.
An FOT&E [Follow-On Test and Evaluation] event was conducted at the end of FY10 to
examine Virginia’s susceptibility to low-frequency active sonar and the ship’s ability to
conduct ASUW [anti-surface warfare] in a low-frequency active environment. This test event
was not adequate due to last minute changes in the Fleet Exercise that prevented Virginia
from conducting any ASUW operations. Additionally, differences in the transmit power of
the low-frequency active source precluded an accurate comparison of susceptibility between
the Los Angeles class and the Virginia class submarines present. Additional testing will be
required to complete the FOT&E requirements in this area.
The FOT&E event in the Arctic was adequate. DOT&E’s assessment of Virginia’s
effectiveness in the Arctic environment and Virginia’s susceptibility to low-frequency fixed
passive sonar arrays will be contained in a classified report, expected to be issued in early
FY12.

44 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.
45 A Strong National Defense[:] The Armed Forces America Needs and What They Will Cost, Heritage Foundation,
April 5, 2011, pp. 25-26.
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The FOT&E event that examined the modernization of the Virginia class submarine’s NPES
[Non-Propulsion Electronics Systems] were adequate with one exception. Testing to
examine Virginia’s susceptibility to some mine types must be repeated.
Since Virginia’s mission performance is significantly dependent on supporting acquisition
programs that make up the Virginia combat and weapons systems, Virginia inherits the
performance capabilities of these systems. The A-RCI sonar, the AN/BYG-1 Combat
Control System, and the Mk 48 ADCAP [Advanced Capability] torpedo are examples of
systems with known performance limitations or reliability problems that affected Virginia’s
performance during FOT&E.
Recommendations
Status of Previous Recommendations. The Navy has made progress in addressing 17 of the
33 recommendations contained in the November 2009 classified BLRIP [Beyond Low-Rate
Initial Production] report. Eight of the outstanding recommendations are classified. Of the
remaining eight unclassified comments, the key recommendations are:
1. Test against an SSK threat [a diesel-electric submarine] surrogate in order to evaluate
Virginia’s capability, detectability, and survivability against modern diesel-electric
submarines.
2. Conduct ASW [antisubmarine warfare]-search testing to assess Virginia’s capability with
other towed [sonar] arrays (i.e., TB-16 and TB-23).
3. Complete ASUW testing and investigate alternatives to the Atlantic Undersea Test
Evaluation Center for ASW and ASUW testing.
4. Measure the ISR [intelligence, surveillance, and reconnaissance]-intercept metrics with a
deployment‑outfitted Virginia class submarine and with realistic threat signals.
5. Conduct FOT&E to examine Virginia’s susceptibility to airborne ASW threats such as
Maritime Patrol Aircraft and helicopters.
FY11 Recommendations. The Navy should:
1. Consolidate the Virginia, A-RCI, and AN/BYG-1 TEMPs into an Undersea Enterprise
Capstone document.
2. Complete the verification, validation, and accreditation of the Transient Shock Analysis
method used for Virginia Class Block III items.
3. Repeat the FOT&E event to determine Virginia’s susceptibility to low-frequency active
sonar and Virginia’s ability to conduct ASUW in a low-frequency active environment. This
testing should include a Los Angeles class submarine operating in the same environment to
enable comparison with the Virginia class.46

46 Department of Defense, Director, Operational Test and Evaluation, FY2011 Annual Report, December 2011, pp.
176-177.
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Legislative Activity for FY2013
FY2013 Funding Request
The Navy’s proposed FY2013 budget requests $3,217.6 million in procurement funding to
complete the procurement cost of the 17th and 18th Virginia (SSN-774) class nuclear-powered
attack submarines. The FY2013 budget estimates the combined procurement cost of these two
boats at $5,107.9 million, and the ships have received a total of $1,890.3 million in prior-year
advance procurement (AP) and Economic Order Quantity (EOQ) funding. The Navy’s proposed
FY2013 budget also requests $874.9 million in AP funding for Virginia-class boats to be procured
in future years.

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Appendix A. 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.47 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 2012.48
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.49 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.”50 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

47 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.
48 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.
49 Secretary of Defense Les Aspin, U.S. Department of Defense, Report on the Bottom-Up Review, October 1993, pp.
55-57.
50 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.”51
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.”52
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.53
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.54
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.55
In February 2006, the Navy proposed to maintain in coming years a fleet of 313 ships, including
48 SSNs. Some of the Navy’s ship force-level goals have changed since 2006, and the goals now
add up to a desired fleet of 328 ships. The figure of 48 SSNs, however, remains unchanged from
2006.

51 Department of Navy point paper dated February 7, 2000. Reprinted in Inside the Navy, February 14, 2000, p. 5.
52 U.S. Department of Defense, Quadrennial Defense Review, September 2001, p. 23.
53 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.
54 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.
55 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 B. 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.56
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.57 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

56 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.
57 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.58
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.59

58 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.
59 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 FY2009 30-year (FY2009-FY2038) SSN procurement plan called 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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