Introduction
This report provides background information and issues for Congress on the Virginia-class nuclear-powered attack submarine (SSN) program. The Navy's proposed FY2017 budget requests $4,955.2 million 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
Strategic and Budgetary Context
For an overview of the strategic and budgetary context in which the Virginia-class program and other Navy shipbuilding programs may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by [author name scrubbed].
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 can (when appropriately equipped and armed) 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);
- covert offensive and defensive mine warfare;
- anti-submarine warfare (ASW); and
- anti-surface ship warfare.
During the Cold War, ASW against Soviet submarines 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 remained a mission, the SSN force focused more on performing the other missions noted on the list above. In light of the recent shift in the strategic environment from the post-Cold War era to a new situation featuring renewed great power competition that some observers conclude has occurred, ASW against Russian and Chinese submarines may once again become a more prominent mission for U.S. Navy SSNs.6
U.S. Attack Submarine Force Levels
Force-Level Goal
The Navy wants to achieve and maintain a fleet in coming years of 308 ships, including 48 SSNs.7 For a review of SSN force level goals since the Reagan Administration, see Appendix A.
Force Level at End of FY2014
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 55 SSNs in service at the end of FY2014 included the following:
- 41 Los Angeles (SSN-688) class boats;
- 3 Seawolf (SSN-21) class boats; and
- 11 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 FY2014, 21 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.8 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.9
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,10 but incorporates newer technologies. Virginia-class boats currently cost about $2.7 billion each to procure. The first Virginia-class boat entered service in October 2004.
Past and Projected Annual Procurement Quantities
Table 1 shows annual numbers of Virginia-class boats procured from FY1998 (the lead boat) through FY2016, and numbers scheduled for procurement under the FY2017-FY2021 Future Years Defense Plan (FYDP).
|
FY98 |
FY99 |
FY00 |
FY01 |
FY02 |
FY03 |
FY04 |
FY05 |
FY06 |
FY07 |
FY08 |
FY09 |
|
1 |
1 |
0 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
|
FY10 |
FY11 |
FY12 |
FY13 |
FY14 |
FY15 |
FY16 |
FY17 |
FY18 |
FY19 |
FY20 |
FY21 |
|
1 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
1 |
Source: Table prepared by CRS based on U.S. Navy data.
|
Source: U.S. Navy file photo accessed by CRS on January 11, 2011, at http://www.navy.mil/search/display.asp?story_id=55715. |
Multiyear Procurement (MYP)
The 10 Virginia-class boats shown in Table 1 for the period FY2014-FY2018 (referred to as the Block IV boats) are being procured under a multiyear procurement (MYP) contract11 that was approved by Congress as part of its action on the FY2013 budget, and awarded by the Navy on April 28, 2014. The eight Virginia-class boats procured in FY2009-FY2013 (the Block III boats) were procured under a previous MYP contract, and the five Virginia-class boats procured in FY2004-FY2008 (the Block II boats) were procured under a still-earlier MYP contract. The four boats procured in FY1998-FY2002 (the Block I boats) were procured under a block buy contract, which is an arrangement somewhat similar to an MYP 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.
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 Huntington Ingalls Industries' Newport News Shipbuilding (HII/NNS), of Newport News, VA. GD/EB and HII/NNS are the only two shipyards in the country capable of building nuclear-powered ships. GD/EB builds submarines only, while HII/NNS also builds nuclear-powered aircraft carriers and is capable of building other types of surface ships.
Under the arrangement for jointly building Virginia-class boats, GD/EB builds certain parts of each boat, HII/NNS 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 HII/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.13
Cost-Reduction Effort
The Navy states that it achieved a goal of reducing the procurement cost of Virginia-class submarines so that two boats could be procured in FY2012 for a 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 calculated that the unit target cost of $2.0 billion in constant FY2005 dollars for each submarine translated into about $2.6 billion for a boat procured in FY2012.)14
Virginia Payload Module (VPM)
The Navy plans to build one of the two Virginia-class boats procured in FY2019, and all Virginia-class boats procured in FY2020 and subsequent years, with an additional mid-body section, called the Virginia Payload Module (VPM). The VPM, reportedly about 70 feet in length15 (earlier design concepts for the VPM were reportedly about 94 feet in length),16 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).17
The four additional launch tubes in the VPM could carry a total of 28 additional Tomahawk cruise missiles (7 per tube),18 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%.19 The Navy wants to start building Virginia-class boats with the VPM in FY2019.
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).20 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.
A November 18, 2015, press report states:
The Virginia-class submarine program is finalizing the Virginia Payload Module design and will start prototyping soon to reduce risk and cost as much as possible ahead of the 2019 construction start, according to a Navy report to Congress.
According to the "Virginia Class Submarine Cost Containment Strategy for Block V Virginia Payload Module Design" report, dated Aug. 31 but not received by the Senate until mid-October, the Navy says late Fiscal Year 2015 and early FY 2016 is a "critical" time period for the program....
The Naval Sea Systems Command's (NAVSEA) engineering directorate will update cost estimates soon based on the final concept design, but so far the program has been successful in sticking to its cost goals. The program had a threshold requirement of $994 million and an objective requirement of $931 million in non-recurring engineering costs, and as of January 2015 the program estimated it would end up spending $936 million. The first VPM module is required to cost $633 million with an objective cost of $567 million, and the most recent estimate puts the lead ship VPM at $563 million. Follow-on VPMs would be required to cost $567 million each with an objective cost of $527 million, and the January estimate puts them at an even lower $508 million.21
The joint explanatory statement for the FY2014 Department of Defense (DOD) Appropriations Act (Division C of H.R. 3547/P.L. 113-76 of January 17, 2014) requires the Navy to submit biannual reports to the congressional defense committees describing the actions the Navy is taking to minimize costs for the VPM.22 The first such report, dated July 2014, is reprinted in Appendix C.23
FY2017 Funding Request
The Navy estimates the combined procurement cost of the two Virginia-class boats requested for procurement in FY2017 at $5,408.9 million, or an average of $2,704.5 million each. The boats have received a total of $1,623.3 million in prior-year advance procurement (AP) funding and $597.6 million in prior-year Economic Order Quantity (EOQ) funding. The Navy's proposed FY2017 budget requests the remaining $3,188.0 million needed to complete the boats' estimated combined procurement cost. The Navy's proposed FY2017 budget also requests $1,767.2 million in AP funding for Virginia-class boats to be procured in future fiscal years, bringing the total FY2017 funding request for the program (excluding outfitting and post-delivery costs) to $4,955.2 million.
The Navy's proposed FY2017 budget also requests $97.9 million in research and development funding for the Virginia Payload Module (VPM). The funding is contained in Program Element (PE) 0604580N, entitled Virginia Payload Module (VPM), which is line 128 in the Navy's FY2017 research and development account.
Submarine Construction Industrial Base
In addition to GD/EB and HII/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.24 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 HII/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).25
Projected SSN Shortfall
Size and Timing of Shortfall
The Navy's FY2016 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 FY2025, reach a minimum of 41 boats in FY2029, and remain below 48 boats through FY2036. 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 was first identified by CRS in 1995 and has been discussed in CRS reports and testimony every year since then.
Table 2. Projected SSN Shortfall
As shown in Navy's FY2016 30-Year (FY2016-FY2045) Shipbuilding Plan
|
Fiscal year |
Annual procurement quantity |
Projected number of SSNs |
Shortfall relative to 48-boat goal |
|
|
Number of ships |
Percent |
|||
|
16 |
2 |
53 |
||
|
17 |
2 |
50 |
||
|
18 |
2 |
52 |
||
|
19 |
2 |
50 |
||
|
20 |
2 |
51 |
||
|
21 |
1 |
51 |
||
|
22 |
2 |
48 |
||
|
23 |
2 |
49 |
||
|
24 |
1 |
48 |
||
|
25 |
2 |
47 |
-1 |
-2% |
|
26 |
1 |
45 |
-3 |
-6% |
|
27 |
1 |
44 |
-4 |
-8% |
|
28 |
1 |
42 |
-6 |
-13% |
|
29 |
1 |
41 |
-7 |
-15% |
|
30 |
1 |
42 |
-6 |
-13% |
|
31 |
1 |
43 |
-5 |
-10% |
|
32 |
1 |
43 |
-5 |
-10% |
|
33 |
1 |
44 |
-4 |
-8% |
|
34 |
1 |
45 |
-3 |
-6% |
|
35 |
1 |
46 |
-2 |
-4% |
|
36 |
2 |
47 |
-1 |
-2% |
|
37 |
2 |
48 |
||
|
38 |
2 |
47 |
-1 |
-2% |
|
39 |
2 |
47 |
-1 |
-2% |
|
40 |
1 |
47 |
-1 |
-2% |
|
41 |
2 |
47 |
-1 |
-2% |
|
42 |
1 |
49 |
||
|
43 |
2 |
49 |
||
|
44 |
1 |
50 |
||
|
45 |
2 |
50 |
||
Source: Table prepared by CRS based on Navy's FY2016 30-year shipbuilding plan. Percent figures rounded to nearest percent.
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, 2007.26 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.27
- 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.28
- 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 40.29
- 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.30 The total cost of extending the lives of the 16 boats would be roughly $500 million in constant FY2005 dollars.31
- 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).
- 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.32
- Seven-month deployments might affect retention rates for submarine personnel.
March 2016 Press Report on Options for Mitigating Projected Shortfall
A March 8, 2016, press report discussed options the Navy is currently considering for mitigating the projected SSN shortfall, including the option of finding a way to procure a second Virginia-class boat in FY2021. The press report stated:
A spike in demand for the Navy's attacks submarines, just ahead of a spate of decommissionings and a dip in new SSN construction, is leading the Navy to look at some previously unthinkable measures to mitigate the upcoming shortfall in the fleet.
Those measures include extending the life of some legacy boats and increasing submarine production despite the cost and workforce strain the Ohio Replacement Program will put on the Navy and industry....
Even though the Navy's Fiscal Year 2017 budget request released in early February called for just one attack submarine to be built in 2021 – a deviation from the current two-a-year build rate to accommodate the construction of the first Ohio Replacement Program ballistic missile submarine – just two weeks later officials floated the idea of trying to find money to buy back that second attack sub....
Seeing this situation approaching, the Navy devised a three-pronged approach in the mid-2000s to try to mitigate the upcoming strain on the attack sub fleet.
First, the Navy would consider extending the life of the Los Angeles-class boats – something almost unheard of with the carefully managed nuclear-powered subs. Schedules, and therefore nuclear fuel consumption, for these boats are rigidly managed throughout the life of the sub, and conventional wisdom dictates that a sub's service life cannot be lengthened.
However, Jabaley said, the Navy has found some exceptions to the rule. A couple years before each Los Angeles-class sub hits the end of its life, the Navy has begun an engineering analysis process. First, will there be enough nuclear fuel to support a six-month deployment tacked on to the end of the boat's life? If yes, proceed to the next question: will the submarine still be structurally sound enough to support submerging and operating for an additional six months? Jabaley said the Navy would not pay for additional work to extend the life of the boats, but if the answer to both questions happens to be yes then the Navy will deploy the Los-Angeles class boat once more, providing a bit of extra overseas presence to fill combatant commander needs, before retiring the boat.
Second, Jabaley said the Navy began lengthening some Los Angeles-class deployments – also considered taboo.
"By deploying for eight months instead of six, you're using incrementally more fuel than you would otherwise in a normal operating cycle, so that can actually be counterproductive to the ability to extend that same submarine when you get to the end of life," Jabaley said, explaining that submarines consume nuclear fuel more rapidly during overseas deployments than during in-port training or maintenance availabilities.
"It requires a very close management of fuel usage so we're sure that the submarine has the ability to operate to the end of its life, and if you have more fuel remaining then you can consider the extension."
Despite the complications it presented, Jabaley said the lengthened deployments were worth the extra overseas presence they provided as well.
Third in the mitigation strategy, the Navy would try to build the new Virginia-class submarines faster. Whereas the first Virginia-class boats took about 84 months to build, General Dynamics Electric Boat and Newport News Shipbuilding now can deliver a sub to the fleet in about 61 months.
"We have a goal to get down to 55 months, the shipbuilders have a plan they call 'Drive for 55,'" Jabaley said. That plan revolves around "productivity improvements, changes to the manufacturing and assembly plan to be able to deliver a submarine in as short a time as 55 months." The faster the industrial base can deliver each submarine, the faster those boats can get through training and get out to sea.
"That was all well and good in 2006: we had a problem, we knew we were facing it," Jabaley said.
"But things have changed since then. In particular, the resurgence of Russia and the ascendance of China, both of which are producing numerous submarines, and in particular in Russia's part, extremely capable submarines. So we're facing challenges of both quantity and quality from our competitors....
Though attack submarine requirements can be hard to talk about publicly due to classification, the combatant commanders have, as Jabaley said, "started to proclaim quite clearly that they are not getting enough submarines on deployment." During FY 2017 budget hearings, both U.S. Pacific Command commander Adm. Harry Harris and U.S. European Command commander Gen. Philip Breedlove made clear to lawmakers they are only getting about 60 percent of the submarines they request, and they need more to keep up with evolving Russian and Chinese threats.
"All of that put together has made the urgency even greater," Jabaley said....
or Navy acquisition chief Sean Stackley, the entire situation presents challenges and opportunities. The challenge is maintaining the efficient two-a-year Virginia construction rate, while also moving into the larger Block V configuration in 2019 which includes a Virginia Payload Module section, while also keeping the Ohio Replacement Program on track – while grappling with other Navy shipbuilding needs, and while adhering to spending caps from Congress.
The opportunity, he explained March 3 at the American Society of Naval Engineers' annual ASNE Day, is leveraging authorities given by Congress in the 2015 and 2016 National Defense Authorization Act to get creative. Not only did Congress give incremental funding and advanced construction authority for the Ohio Replacement Program to help keep costs down, lawmakers also passed a key provision "that allows us to look across programs, across years in terms of procuring material to buy it as efficiently as possible and drive cost down," Stackley said.
"Quietly in the background we've been working with industry to figure out, given this significant amount of submarine workload coming, how can we best accomplish it in terms of not just efficiency but looking at facility investments that have to be made at our two boatyards, EB and Newport News," Stackley said.
"We laid that all out, and in doing that we identified where we have risk and also where we have opportunity – opportunity in terms of capacity and also opportunity in terms of driving down cost."
"What we see is opportunity, and if we don't nail that opportunity down, if we let 2021 pass, we are not going to get that boat back in the future and it just deepens the valley we're looking at," he concluded.
Jabaley explained that the 2021 submarine is the most important for shaping the submarine shortfall. The shortfall would begin in 2025 or 2026, depending on the success of the effort to extend the life of the Los Angeles boats. A Virginia-class boat procured in 2021 would deliver in 2026, possibly staving off the start of the shortfall another year. Then, that boat would decrease the depth of the shortfall each year, slightly decreasing the impact felt by the fleet. And it would negate the one-sub shortfall expected in the last year of the trough, in 2036, and from 2038 to 2041.
Put another way, Jabaley said there is currently a 51 SSN-year shortfall over 17 years. The addition of the second 2021 boat — and its subsequent effects — could reduce the attack boat shortfall to 35.
Stackley tasked Jabaley and the rest of PEO Subs with making it happen, and he made clear last week how serious he was about buying back the second boat in 2021.
"That's frankly our requirement this year inside our shipbuilding program to figure out how to get there because that is our asymmetrical advantage: we own the undersea domain, we cannot give it up and 2021 is our next big opportunity to deepen, frankly, deepen our hold on that," Stackley said....
The first thing to figure out was if industry could handle the workload, and Jabaley said "we are convinced that it can."...
With industry on board and ready for the workload, the next question is how to pay for the second 2021 attack sub.
First, "there are some savings just by adding it in," Jabaley said, due to the savings that buying more units creates throughout the supply chain.
Second, as the Navy analyzes the Block V contract – it owes the Secretary of Defense a cost estimate for the addition of the Virginia Payload Module – "we're aggressively looking for ways we can reduce cost, so the Virginia program has their work to do in lowering cost."
And lastly, as Stackley alluded to in his comments about the contracting authorities provided in the NDAA, there are savings to be had if the Navy can find creative ways to move away from stovepiped contracting for each ship class and look more holistically at its overall shipbuilding needs.
"I need to bring [the Virginia class and Ohio Replacement Program] together, and I need to employ innovative contracting and acquisition strategies to find synergy and cost savings," Jabaley said."33
Issues for Congress
Funding an Additional Virginia-Class Boat in FY2021
As discussed in the previous section (see "March 2016 Press Report on Options for Mitigating Projected Shortfall"), the Navy wants to find a way to procure a second Virginia-class boat in FY2021 as a way to help mitigate the projected SSN shortfall. The issue for Congress is whether to support this effort, and if so, whether to provide any advance procurement (AP) funding in FY2017 to begin paying for that boat. In assessing this question, Congress may consider various factors, including the amount of funding that would be needed to procure the boat, the operational value the boat would have, and the potential impact, in a situation of constrained defense funding, on other Navy or DOD programs of funding the additional boat.
Navy Plans for Building VPM-Equipped Virginia-Class Boats
As discussed earlier (see "Virginia Payload Module (VPM)"), the Navy plans to build one of the two Virginia-class boats procured in FY2019, and all Virginia-class boats procured in FY2020 and subsequent years, with the Virginia Payload Module (VPM). An issue for Congress is whether to approve, modify, or reject the Navy's plans for building VPM-equipped Virginia-class boats. In assessing this question, Congress may consider various factors, including the cost and operational value of the VPM, the impact on the submarine construction industrial base and the Virginia-class construction effort of building Virginia-class boats with VPMs, and the potential impact, in a situation of constrained defense funding, on other Navy or DOD programs of funding VPMs for Virginia-class boats.
Virginia-Class Procurement Rate More Generally in Coming Years
Another potential issue for Congress concerns the Virginia-class procurement rate more generally in coming years (i.e., beyond the question of whether to procure an additional boat in FY2021), particularly in the context of the SSN shortfall projected for FY2025-FY2036 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,34 and a September 2010 report from the Cato Institute recommends a Navy of 241 ships, including 40 SSNs.35 Both reports recommend limiting Virginia-class procurement to one boat per year, as does a September 2010 report from the Center for American Progress.36 A November 2010 report from a group called the Debt Reduction Task Force recommends "deferring" Virginia-class procurement.37 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.38 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.39 An April 2010 report from the Heritage Foundation recommends a Navy of 309 ships, including 55 SSNs.40
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 of SSNs in defending U.S. interests and implementing U.S. national security strategy, and potential effects on the submarine industrial base.
As discussed earlier, Virginia-class boats scheduled for procurement in FY2014 are covered under an MYP contract for the period FY2014-FY2018. This MYP contract includes the procurement of two Virginia-class boats in FY2017. If fewer than two boats were procured in FY2017, the Navy might need to terminate the MYP contract and pay a cancellation penalty to the contractor.
Legislative Activity for FY2017
Congressional Action on FY2017 Funding Request
Table 3 summarizes congressional action on the Navy's FY2017 funding request for the Virginia-class program.
|
Request |
Authorization |
Appropriation |
|||||
|
HASC |
SASC |
Conf. |
HAC |
SAC |
Conf. |
||
|
Virginia class procurement |
3,188.0 |
||||||
|
Virginia class advance procurement (AP) |
1,767.2 |
||||||
|
Virginia Payload Module (VPM) research and development (PE 0604580N, line 128) |
97.9 |
||||||
Source: Table prepared by CRS based on Navy's FY2017 budget submission.
Notes: HASC is House Armed Services Committee; SASC is Senate Armed Services Committee, SAC is Senate Appropriations Committee, HAC is House Appropriations Committee, Conf. is conference agreement.
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.41 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 2012.42
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.43 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."44 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
- "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."45
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 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."46
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.47
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.48
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.49
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 308 ships. The figure of 48 SSNs, however, remains unchanged from 2006.
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 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.50
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.51 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 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.52
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.
Appendix C. July 2014 Navy Report to Congress on Virginia Payload Module (VPM)
The joint explanatory statement for the FY2014 DOD Appropriations Act (Division C of H.R. 3547/P.L. 113-76 of January 17, 2014) requires the Navy to submit biannual reports to the congressional defense committees describing the actions the Navy is taking to minimize costs for the VPM.53 This appendix reprints the first of these reports, which is dated July 2014.54