Navy Ford (CVN-78) Class Aircraft Carrier
Program: Background and Issues for Congress
Updated March 14, 2019
Congressional Research Service
https://crsreports.congress.gov
RS20643

Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress

Summary
CVN-78, CVN-79, CVN-80, and CVN-81 are the first four ships in the Navy’s new Gerald R.
Ford (CVN-78) class of nuclear-powered aircraft carriers (CVNs).
CVN-78 (named for Gerald R. Ford) was procured in FY2008. The Navy’s proposed FY2019
budget estimates the ship’s procurement cost at $12,964.0 million (i.e., about $13.0 billion) in
then-year dollars. The ship received advance procurement (AP) funding in FY2001-FY2007 and
was fully funded in FY2008-FY2011 using congressionally authorized four-year incremental
funding. To help cover cost growth on the ship, the ship received an additional $1,394.9 million
in FY2014-FY2016 and FY2018 cost-to-complete procurement funding. The ship was delivered
to the Navy on May 31, 2017, and was commissioned into service on July 22, 2017.
CVN-79 (named for John F. Kennedy) was procured in FY2013. The Navy’s proposed FY2019
budget estimates the ship’s procurement cost at $11,341.4 million (i.e., about $11.3 billion) in
then-year dollars. The ship received AP funding in FY2007-FY2012, and was fully funded in
FY2013-FY2018 using congressionally authorized six-year incremental funding. The ship is
scheduled for delivery to the Navy in September 2024.
CVN-80 (named Enterprise) was procured in FY2018. The Navy’s proposed FY2019 budget
estimated the ship’s procurement cost at $12,601.7 million (i.e., about $12.6 billion) in then-year
dollars. The ship received AP funding in FY2016 and FY2017, and the Navy plans to fully fund
the ship in FY2018-FY2023 using congressionally authorized six-year incremental funding. The
Navy’s proposed FY2019 budget requested $1,598.2 million in procurement funding for the ship.
The ship is scheduled for delivery to the Navy in September 2027.
CVN-81 (not yet named) was scheduled to be procured in FY2023, but the Navy’s FY2020
budget submission changes the ship’s year of procurement to FY2020 as a consequence of the
two-ship procurement of CVN-80 and CVN-81 discussed in the next paragraph. The Navy’s
FY2019 budget submission, which predated the two-ship procurement for CVN-80 and CVN-81,
estimated the ship’s procurement cost at $15,088.0 million (i.e., about $15.1 billion) in then-year
dollars. Under the Navy’s FY2019 budget submission, the Navy planned to request AP funding
for CVN-81 in FY2021 and FY2022, and then fully fund the ship in FY2023-FY2028 using
congressionally authorized six-year incremental funding. Under the Navy’s FY2019 budget
submission, the ship was scheduled for delivery to the Navy in September 2032.
Section 121(a)(2) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019
(H.R. 5515/P.L. 115-232 of August 13, 2018) permits the Navy, after the Department of Defense
(DOD) makes certain certifications to Congress, to add CVN-81 to the existing contract for
building CVN-80. DOD provided the required certification on December 31, 2018. On January
31, 2019, the Navy announced that it had awarded a two-ship fixed-price contract for CVN-80
and CVN-81 to Huntington Ingalls Industries/Newport News Shipbuilding (HII/NNS), the
shipyard that builds the Navy’s aircraft carriers. This two-ship contract can be viewed as a two-
ship block buy contract.
Compared to the estimated procurement costs shown above, DOD estimates that the two-ship
contract will reduce the cost of CVN-80 by $399.7 million and the cost of CVN-81 by $2,637.0
million, for a combined reduction of $3,036.7 million (i.e., about $3.0 billion). Using higher
estimated baseline costs for CVN-80 and CVN-81 taken from a December 2017 Navy business
case analysis, DOD estimates that the two-ship contract will reduce the cost of CVN-80 by $924
million and the cost of CVN-81 by $3,086 million, for a combined reduction of $4,010 million
(i.e., about $4.0 billion).
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Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress

Oversight issues for Congress for the CVN-78 program for FY2019 include the following:
 whether to approve, reject, or modify the Navy’s FY2020 procurement funding
request for the CVN-78 program;
 the Navy’s proposal, as part of its FY2020 budget submission, to not fund the
mid-life nuclear refueling overhaul (called a Refueling Complex Overhaul, or
RCOH) for the aircraft carrier Harry S. Truman (CVN-75), and to instead retire
the ship around FY2024 and also deactivate one of the Navy’s carrier air wings at
about the same time;
 the date for achieving the Navy’s 12-ship force-level goal for aircraft carriers;
 cost growth in the CVN-78 program, Navy efforts to stem that growth, and Navy
efforts to manage costs so as to stay within the program’s cost caps;
 Navy efforts to complete the construction, testing, and certification of the weapon
elevators on CVN-78;
 additional CVN-78 program issues that were raised in a December 2018 report
from the Department of Defense’s (DOD’s) Director of Operational Test and
Evaluation (DOT&E);
 whether to conduct the shock trial for the CVN-78 class in the near term, on the
lead ship in the class, or years later, on the second ship in the class; and
 whether the Navy should shift at some point from procuring large-deck, nuclear-
powered carriers like the CVN-78 class to procuring smaller aircraft carriers.
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Introduction
This report provides background information and potential oversight issues for Congress on the
Gerald R. Ford (CVN-78) class aircraft carrier program. The Navy’s proposed FY2019 budget
requested a total of $1,598.2 million in procurement funding for the program. Congress’s
decisions on the CVN-78 program could substantially affect Navy capabilities and funding
requirements and the shipbuilding industrial base.
For an overview of the strategic and budgetary context in which the CVN-78 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 Ronald O'Rourke.1
Background
Current Navy Aircraft Carrier Force
The Navy’s current aircraft carrier force consists of 11 nuclear-powered ships, including 10
Nimitz-class ships (CVNs 68 through 77) that entered service between 1975 and 2009, and one
Gerald R. Ford (CVN-78) class ship that was commissioned into service on July 22, 2017.2
Statutory Requirements for Numbers of Carriers and Carrier Air
Wings
Requirement to Maintain Not Less Than 11 Carriers
10 U.S.C. 8062(b) requires the Navy to maintain a force of not less than 11 operational aircraft
carriers.3 The requirement for the Navy to maintain not less than a certain number of operational
aircraft carriers was established by Section 126 of the FY2006 National Defense Authorization
Act (H.R. 1815/P.L. 109-163 of January 6, 2006), which set the number at 12 carriers. The
requirement was changed from 12 carriers to 11 carriers by Section 1011(a) of the FY2007 John
Warner National Defense Authorization Act (H.R. 5122/P.L. 109-364 of October 17, 2006).4

1 See also CRS Report R43838, A Shift in the International Security Environment: Potential Implications for Defense—
Issues for Congress, by Ronald O'Rourke, and CRS Report R44891, U.S. Role in the World: Background and Issues for
Congress, by Ronald O'Rourke and Michael Moodie.
2 The George H. W. Bush (CVN-77), the final Nimitz-class ship, was procured in FY2001 and commissioned into
service on January 10, 2009. CVN-77 replaced Kitty Hawk (CV-63), which was the Navy’s last remaining
conventionally powered carrier. (The Kitty Hawk was decommissioned on January 31, 2009.) The commissioning into
service of CVN-78 ended a period during which the carrier force had declined to 10 ships that began on December 1,
2012, with the inactivation of the one-of-a-kind nuclear-powered aircraft carrier Enterprise (CVN-65), a ship that
entered service in 1961.
3 10 U.S.C. 8062 was previously numbered as 10 U.S.C. 5062. It was renumbered as 10 U.S.C. 8062 by Section 807 of
the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515/P.L. 115-232 of August 13,
2018), which directed a renumbering of sections and titles of Title 10 relating to the Navy and Marine Corps. (Sections
806 and 808 of P.L. 115-232 directed a similar renumbering of sections and titles relating to the Air Force and Army,
respectively.)
4 As mentioned in footnote 2, the carrier force dropped from 11 ships to 10 ships between December 1, 2017, when
Enterprise (CVN-65) was inactivated, and July 22, 2017, when CVN-78 was commissioned into service. Anticipating
the gap between the inactivation of CVN-65 and the commissioning of CVN-78, the Navy asked Congress for a
temporary waiver of 10 U.S.C. 8062(b) to accommodate the period between the two events. Section 1023 of the
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Requirement to Maintain a Minimum of Nine Carrier Air Wings
10 U.S.C. 8062(e), which was added by Section 1042 of the FY2017 National Defense
Authorization Act (S. 2943/P.L. 114-328 of December 23, 2016), requires the Navy to maintain a
minimum of nine carrier air wings.5
Navy Force-Level Goal of 12 Carriers
12-Carrier Goal Established December 2016
In December 2016, the Navy released a force-level goal for achieving and maintaining a fleet of
355 ships, including 12 aircraft carriers6—one more than the minimum of 11 carriers required by
10 U.S.C. 8062(b). This was the first Navy force-level goal to call for 12 (rather than 11) carriers
since a 2002-2004 Navy force-level goal for a fleet of 375 ships.7
Planned and Potential Dates for Achieving 12-Carrier Force
Given the time needed to build a carrier and the projected retirement dates of existing carriers,
increasing the carrier force from 11 ships to 12 ships on a sustained basis would take a number of
years:
 Procuring carriers on 3-year centers—that is, procuring one carrier every three
years—would achieve a 12-carrier force on a sustained basis by about 2030,
unless the service lives of one or more existing carriers were substantially
extended.
 Procuring carriers on 3.5-year centers (i.e., a combination of 3- and 4-year
centers) would achieve a 12-carrier force on a sustained basis no earlier than
about 2034, unless the service lives of one or more existing carriers were
substantially extended.
 Procuring carriers on 4-year centers would achieve a 12-carrier force on a
sustained basis by about 2063—almost 30 years later than under 3.5-year

FY2010 National Defense Authorization Act (H.R. 2647/P.L. 111-84 of October 28, 2009) authorized the waiver,
permitting the Navy to have 10 operational carriers between the inactivation of CVN-65 and the commissioning of
CVN-78.
5 10 U.S.C. 8062(e) states the following:
The Secretary of the Navy shall ensure that-
(1) the Navy maintains a minimum of 9 carrier air wings until the earlier of-
(A) the date on which additional operationally deployable aircraft carriers can fully support a 10th
carrier air wing; or
(B) October 1, 2025;
(2) after the earlier of the two dates referred to in subparagraphs (A) and (B) of paragraph (1), the
Navy maintains a minimum of 10 carrier air wings; and
(3) for each such carrier air wing, the Navy maintains a dedicated and fully staffed headquarters.
6 For more on the 355-ship force-level goal, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans:
Background and Issues for Congress, by Ronald O'Rourke.
7 See the appendix entitled “Earlier Navy Force-Structure Goals Dating Back to 2001” in CRS Report RL32665, Navy
Force Structure and Shipbuilding Plans: Background and Issues for Congress, by Ronald O'Rourke.
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centers—unless the service lives of one or more existing carriers were
substantially extended.8
The Navy’s FY2019 30-year (FY2019-FY2048) shipbuilding plan shifts aircraft carrier
procurement from 5-year centers to 4-year centers following the planned procurement of CVN-82
in FY2028 (i.e., the next carrier would be procured in FY2032, the one after that in FY2036, and
so on). Consistent with the final bullet point above, Navy officials state that under this plan, a 12-
carrier force would be achieved on a sustained basis in the 2060s, unless the service lives of one
or more existing carriers were substantially extended. More specifically, the Navy projects that
under the FY2019 30-year shipbuilding plan, the carrier force would reach 12 ships in FY2022-
FY2024, then drop back to 11 ships and remain there in subsequent years, except for FY2040,
FY2042-FY2044, and FY2046-FY2047, when it would drop to 10 carriers, and FY2048 (the final
year in the 30-year period), when it would drop to 9 carriers.9
Incremental Funding Authority for Aircraft Carriers
Under incremental funding, some of the funding needed to fully fund a ship is provided in one or
more years after the year in which the ship is procured. In recent years, Congress has authorized
DOD to use incremental funding for procuring certain Navy ships, most notably aircraft
carriers:10
 Section 121 of the FY2007 John Warner National Defense Authorization Act
(H.R. 5122/P.L. 109-364 of October 17, 2006) granted the Navy the authority to
use four-year incremental funding for CVNs 78, 79, and 80. Under this authority,
the Navy could fully fund each of these ships over a four-year period that
includes the ship’s year of procurement and three subsequent years.
 Section 124 of the FY2012 National Defense Authorization Act (H.R. 1540/P.L.
112-81 of December 31, 2011) amended Section 121 of P.L. 109-364 to grant the
Navy the authority to use five-year incremental funding for CVNs 78, 79, and 80.
Since CVN-78 was fully funded in FY2008-FY2011, the provision in practice
applied to CVNs 79 and 80.
 Section 121 of the FY2013 National Defense Authorization Act (H.R. 4310/P.L.
112-239 of January 2, 2013) amended Section 121 of P.L. 109-364 to grant the
Navy the authority to use six-year incremental funding for CVNs 78, 79, and 80.
Since CVN-78 was fully funded in FY2008-FY2011, the provision in practice
applies to CVNs 79 and 80.
 Section 121(c) of the John S. McCain National Defense Authorization Act for
Fiscal Year 2019 (H.R. 5515/ P.L. 115-232 of August 13, 2018) authorized
incremental funding to be used for making payments under a contract for the
construction of CVN-81.

8 Source for 2063 date in relation to four-year centers: Congressional Budget Office (CBO), in a telephone consultation
with CRS on May 18, 2017.
9 For a table showing projected navy force levels under the Navy’s 30-year shipbuilding plan, see CRS Report
RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by Ronald O'Rourke.
10 For more on full funding and incremental funding, see CRS Report RL31404, Defense Procurement: Full Funding
Policy—Background, Issues, and Options for Congress, by Ronald O'Rourke and Stephen Daggett, and CRS Report
RL32776, Navy Ship Procurement: Alternative Funding Approaches—Background and Options for Congress, by
Ronald O'Rourke.
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Aircraft Carrier Construction Industrial Base
All U.S. aircraft carriers procured since FY1958 have been built by Huntington Ingalls
Industries/Newport News Shipbuilding (HII/NNS), of Newport News, VA. HII/NNS is the only
U.S. shipyard that can build large-deck, nuclear-powered aircraft carriers. The aircraft carrier
construction industrial base also includes roughly 2,000 supplier firms in 46 states.11
Gerald R. Ford (CVN-78) Class Program
Overview
The Gerald R. Ford (CVN-78) class carrier design (Figure 1) is the successor to the Nimitz-class
carrier design.12 The Ford-class design uses the basic Nimitz-class hull form but incorporates
several improvements, including features permitting the ship to generate more aircraft sorties per
day, more electrical power for supporting ship systems, and features permitting the ship to be
operated by several hundred fewer sailors than a Nimitz-class ship, reducing 50-year life-cycle
operating and support (O&S) costs for each ship by about $4 billion compared to the Nimitz-class
design, the Navy estimates. Navy plans call for procuring at least four Ford-class carriers—CVN-
78, CVN-79, CVN-80, and CVN-81.
CVN-78 (Gerald R. Ford)
CVN-78, which was named for President Gerald R. Ford in 2007,13 was procured in FY2008. The
Navy’s proposed FY2019 budget estimates the ship’s procurement cost at $12,964.0 million (i.e.,
about $13.0 billion) in then-year dollars. The ship received advance procurement (AP) funding in
FY2001-FY2007 and was fully funded in FY2008-FY2011 using congressionally authorized
four-year incremental funding. To help cover cost growth on the ship, the ship received an
additional $1,394.9 million in FY2014-FY2016 and FY2018 cost-to-complete procurement
funding. The ship was delivered to the Navy on May 31, 2017, and was commissioned into
service on July 22, 2017.
In addition to the funding discussed in the previous paragraph, a DOD reprogramming request
dated July 11, 2018, requested that $62.7 million be reprogrammed to the CVN-78 program to
cover cost growth on CVN-78.14

11 Source for figures of 2,000 supplier firms in 46 states: Jennifer Boykin, president of HII/NNS, as quoted in Marcus
Weisgerber, “US Navy Places First 2-Carrier Order in Three Decades,” Defense One, January 31, 2019.
12 The CVN-78 class was earlier known as the CVN-21 class, which meant nuclear-powered aircraft carrier for the 21st
century.
13 §1012 of the FY2007 defense authorization act (H.R. 5122/P.L. 109-364 of October 17, 2006) expressed the sense of
Congress that CVN-78 should be named for President Gerald R. Ford. On January 16, 2007, the Navy announced that
CVN-78 would be so named. CVN-78 and other carriers built to the same design are consequently referred to as Ford
(CVN-78) class carriers. For more on Navy ship names, see CRS Report RS22478, Navy Ship Names: Background for
Congress, by Ronald O'Rourke.
14 The $62.7 million includes

$12.7 million for “re-baselining the Advanced Weapons Elevator program to address continuing technical
difficulties”;

$30.0 million for “engineering, tooling, and repair of Main Thrust Bearings” in the ship’s propulsion train;

$11.0 million for “emergent technical issues and correction of deficiencies identified during operational
testing and extension of the Post-Shakedown Availability [PSA] duration to accomplish required scope and
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Figure 1. USS Gerald R. Ford (CVN-78)

Source: Navy photograph dated April 8, 2017, accessed October 3, 2017, at http://www.navy.mil/
view_image.asp?id=234835.
CVN-79 (John F. Kennedy)
CVN-79, which was named for President John F. Kennedy on May 29, 2011,15 was procured in
FY2013. The Navy’s proposed FY2019 budget estimates the ship’s procurement cost at
$11,341.4 million (i.e., about $11.3 billion) in then-year dollars. The ship received AP funding in
FY2007-FY2012, and was fully funded in FY2013-FY2018 using congressionally authorized six-
year incremental funding. The ship is scheduled for delivery to the Navy in September 2024.

repair of the propulsion train components”; and

$9.0 million “to cover the increase cost of deferred work, labor and material.”
The $62.7 million would be reprogrammed from FY2011 procurement funding for the DDG-51 destroyer program.
(See page 85 of 85 [i.e., the final page] of the reprogramming request. The document was posted by InsideDefense.com
[subscription required] on July 16, 2018. See also David B. Larter, “US Navy Asks Congress to Shift Millions of
Dollars to Fix High-Tech Supercarrier,” Defense News, July 18, 2018; Jason Sherman, “Pentagon Seeks Additional
Funding for CVN-78, Breaching Current Statutory Cost Cap,” Inside Defense [Daily News], July 19, 2018.)
15 See “Navy Names Next Aircraft Carrier USS John F. Kennedy,” Navy News Service, May 29, 2011, accessed online
on June 1, 2011, at http://www.navy.mil/search/display.asp?story_id=60686. See also Peter Frost, “U.S. Navy’s Next
Aircraft Carrier Will Be Named After The Late John F. Kennedy,” Newport News Daily Press, May 30, 2011. CVN-79
is the second ship to be named for President John F. Kennedy. The first, CV-67, was the last conventionally powered
carrier procured for the Navy. CV-67 was procured in FY1963, entered service in 1968, and was decommissioned in
2007.
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CVN-80 (Enterprise)
CVN-80, which was named Enterprise on December 1, 2012,16 was procured in FY2018. The
Navy’s proposed FY2019 budget estimates the ship’s procurement cost at $12,601.7 million (i.e.,
about $12.6 billion) in then-year dollars.17 The ship received AP funding in FY2016 and FY2017,
and the Navy plans to fully fund the ship in FY2018-FY2023 using congressionally authorized
six-year incremental funding. The Navy’s proposed FY2019 budget requested $1,598.2 million in
procurement funding for the ship. The ship is scheduled for delivery to the Navy in September
2027.
CVN-81 (Not Yet Named)
CVN-81 (not yet named) was scheduled to be procured in FY2023, but the Navy’s FY2020
budget submission changes the ship’s year of procurement to FY2020 as a consequence of the
two-ship procurement of CVN-80 and CVN-81 discussed in the next section.18 The Navy’s
FY2019 budget submission, which predated the two-ship procurement for CVN-80 and CVN-81,
estimated the ship’s procurement cost at $15,088.0 million (i.e., about $15.1 billion) in then-year
dollars. Under the Navy’s FY2019 budget submission, the Navy planned to request AP funding
for CVN-81 in FY2021 and FY2022, and then fully fund the ship in FY2023-FY2028 using
congressionally authorized six-year incremental funding. Under the Navy’s FY2019 budget
submission, the ship was scheduled for delivery to the Navy in September 2032.
Two-Ship Contract for CVN-80 and CVN-81
Section 121(a)(2) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019
(H.R. 5515/ P.L. 115-232 of August 13, 2018) permits the Navy, after the Department of Defense
(DOD) makes certain certifications to Congress, to add CVN-81 to the existing contract for
building CVN-80. DOD provided the required certification on December 31, 2018. On January
31, 2019, the Navy announced that it had awarded a two-ship fixed-price incentive (firm target)
(FPIF) contract for CVN-80 and CVN-81 to Huntington Ingalls Industries/Newport News
Shipbuilding (HII/NNS), the shipyard that builds the Navy’s aircraft carriers.19

16 The Navy made the announcement of CVN-80’s name on the same day that it deactivated the 51-year-old aircraft
carrier CVN-65, also named Enterprise. (“Enterprise, Navy’s First Nuclear-Powered Aircraft Carrier, Inactivated,”
Navy News Service, December 1, 2012; Hugh Lessig, “Navy Retires One Enterprise, Will Welcome Another,” Newport
News Daily Press, December 2, 2012.) CVN-65 was the eighth Navy ship named Enterprise; CVN-80 is to be the
ninth.
17 The Department of the Navy states that “the Department of Navy’s PB 2019 SCN end cost position for CVN 80 is
$12,601.713M as explained on the P -40 SCN budget exhibit note in the description section. It stated: ‘CVN 80 end
cost to be reduced $300M with expected FY18 Congressional adjustment in enacted appropriations bill. End cost is
$12,601.713M after reduction.’” Source: Navy table of annual funding for CVNs 78 through 81 for FY2001-FY2023,
provided to CRS by Navy Office of Legislative Affairs, June 19, 2018.
18 As discussed in the next section, Congress granted the Navy authority for the two-ship procurement as part of the
John S. McCain National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515/P.L. 115-232 of August 13,
2018), and the Navy awarded the two-ship contract on January 31, 2019 (i.e., during FY2019). On this basis, DOD
arguably could have designated FY2019 as the year of procurement for CVN-81. DOD instead chose to designate
FY2020 as the ship’s year of procurement, perhaps because DOD’s FY2020 budget submission was the first DOD
budget submission to reflect the implementation of the two-ship procurement.
19 See Office of the Navy Chief of Information, “Navy Awards Contract for Construction of Two Carriers,” Navy News
Service, January 31, 2019; Megan Eckstein, “UPDATED: Navy Awards 2-Carrier Contract to Newport News
Shipbuilding,” USNI News, January 31, 2019; Marcus Weisgerber, “US Navy Places First 2-Carrier Order in Three
Decades,” Defense One, January 31, 2019; David B. Larter, “US Navy Signs Mammoth Contract with Huntington
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This two-ship contract can be viewed as a two-ship block buy contract, since CVN-80 was
procured in FY2018 and CVN-81 is recorded as a ship procured in FY2020.20 The option for
procuring two CVN-78 class carriers under a two-ship block buy contract has been discussed in
this CRS report since April 2012.21 The Navy’s previous two-ship aircraft carrier procurements
occurred in FY1983 (for CVN-72 and CVN-73) and FY1988 (for CVN-74 and CVN-75). In both
of those cases, however, the two ships were fully funded within a single fiscal year, making them
simple two-ship purchases (akin, for example, to procuring two Virginia-class attack submarines
or two DDG-51 class destroyers in a given fiscal year) rather than two-ship block buys (i.e.,
contracts spanning the procurement of end items procured across more than one fiscal year).
Compared to figures in the Navy’s FY2019 budget submission, DOD estimates that the two-ship
contract will reduce the cost of CVN-80 by $399.7 million and the cost of CVN-81 by $2,637.0
million, for a combined reduction of $3,036.7 million (i.e., about $3.0 billion).22 (DOD
characterizes the combined reduction as “nearly $3 billion.”23) Using higher estimated baseline
costs for CVN-80 and CVN-81 taken from a December 2017 Navy business case analysis, DOD
estimates that the two-ship contract will reduce the cost of CVN-80 by $924 million and the cost
of CVN-81 by $3,086 million, for a combined reduction of $4,010 million (i.e., about $4.0
billion).24 These figures are all expressed in then-year dollars, meaning dollars that are not
adjusted for inflation.
Regarding the difference between a savings of about $3.0 billion from the figures in the Navy’s
FY2019 budget submission and a savings of about $4.0 billion from the December 2017 Navy
business case analysis, a February 5, 2019, press report quoted a Navy spokesman as stating that
the Navy’s FY2019 budget submission “already accounted for at least $1B [$1 billion] of
potential savings, a two-CVN buy would save an additional $3B [$3 billion].”25 This suggests
that the Navy, in preparing its FY2019 budget submission, may have anticipated that it would
receive from Congress authority for implementing some kind of combined purchase (such as,
perhaps, a combined purchase of materials) for CVN-80 and CVN-81.
DOD further states that “the Department of Defense’s Office of Cost Assessment and Program
Evaluation (CAPE) developed an Independent Estimate of Savings for the two-ship procurement

Ingalls for Two Aircraft Carriers,” Defense News, January 31, 2019; Rich Abott, “Navy Awards HII $15 Billion In
Two Carrier Buy,” Defense Daily, February 1, 2019.
20 For more on 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.
21 See the section entitled “Potential Two-Ship Block Buy on CVN-79 and CVN-80” in the April 4, 2012, version of
CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress, by
Ronald O'Rourke. In more recent years, this section was modified to discuss the option in connection with CVN-80 and
CVN-81.
22 Source: CRS calculation based on costs for single-ship purchases as presented in Navy’s FY2019 budget submission
and costs for two-ship purchase as presented in Department of Defense, FORD Class Aircraft Carrier Certification,
CVN 80 and CVN 81 Two Ship Procurement Authority, as Required by Section 121(b) of the John S. McCain National
Defense Authorization Act for Fiscal Year 2019 (P.L. 115-232), November 2018, p. 4 (Table 1).
23 Department of Defense, FORD Class Aircraft Carrier Certification, CVN 80 and CVN 81 Two Ship Procurement
Authority, as Required by Section 121(b) of the John S. McCain National Defense Authorization Act for Fiscal Year
2019 (P.L. 115-232), November 2018, p. 4.
24 Department of Defense, FORD Class Aircraft Carrier Certification, CVN 80 and CVN 81 Two Ship Procurement
Authority, as Required by Section 121(b) of the John S. McCain National Defense Authorization Act for Fiscal Year
2019 (P.L. 115-232), November 2018, p. 4 (Table 1).
25 Justin Katz, “CAPE Estimates Navy’s Two-Ship Buy Will Save $3.1B--$900 Million Less Than Service
Projections,” InsideDefense.com, February 5, 2019 (subscription required).
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and forecast savings of $3.1 billion ([in] Then-Year [dollars]), or approximately 11 percent.... The
primary differences between [the] CAPE and Navy estimates of savings are in Government
Furnished Equipment26 and production change orders.”27 Within the total estimated combined
reduction in cost, HII/NNS reportedly expects to save up to $1.6 billion in contractor-furnished
equipment.28
A November 2018 report that was submitted as an attachment to DOD’s December 31, 2018,
certification stated the following regarding the sources of cost reduction for the two-ship contract:
The CVN 80 and CVN 81 two-ship buy expands and improves upon the affordability
initiatives identified in the Annual Report on Cost Reduction Efforts for JOHN F.
KENNEDY (CVN 79) and ENTERPRISE (CVN 80) as required by section 126(c) of the
National Defense Authorization Act for Fiscal Year 2017 (Public Law 114-328).
Production saving initiatives for single-ship buys included use of unit families in
construction, pre-outfitting and complex assemblies which move work to a more efficient
workspace environment, reduction in the number of superlifts,29 and facility investments
which improve the shipbuilder trade effectiveness. A two-ship buy assumes four years
between ship deliveries which allows more schedule overlap, and therefore more shop-
level and assembly-level production efficiencies than two single-ship buys.
Procuring two ships to a single technical baseline reduces the requirement for engineering
labor hours when compared to single-ship estimates. The ability to rollover production
support engineering and planning products maximizes savings while recognizing the
minimum amount of engineering labor necessary to address obsolescence and regulatory
changes on CVN 81. The two-ship agreement with the shipbuilder achieves a 55 percent
reduction in construction support engineering hours on CVN 81 and greater than 18 percent
reduction in production support and planning hours compared to single ship procurements.
The two-ship procurement strategy allows for serial production opportunities that promote
tangible learning and reduced shop and machine set-up times. It allows for efficient use of
production facilities, re-use of production jigs and fixtures, and level loading of key trades.
The continuity of work allows for reductions in supervision, services and support costs.
The result of these efficiencies is a production man-hours step down that is equivalent to
an 82 percent learning curve since CVN 79.
Key to achieving these production efficiencies is Integrated Digital Shipbuilding (iDS).
The Navy's Research, Development, Test, and Evaluation (RDT&E) and the shipbuilder's
investment in iDS, totaling $631 million, will reduce the amount of production effort
required to build FORD Class carriers. The two-ship buy will accelerate the benefits of this
approach. The ability to immediately use the capability on CVN 81 would lead to a further
reduction in touch labor and services in affected value streams. The two-ship agreement
with the shipbuilder represents a production man-hours reduction of over seven percent
based on iDS efficiencies. Contractual authority for two ships allows the shipbuilder to
maximize economic order quantity material procurement. This allows more efficient
ordering and scheduling of material deliveries and will promote efficiencies through earlier

26 Government-furnished equipment (GFE) is equipment that the government purchases from supplier firms and then
provides to the shipbuilder for incorporation into the ships.
27 Department of Defense, FORD Class Aircraft Carrier Certification, CVN 80 and CVN 81 Two Ship Procurement
Authority, as Required by Section 121(b) of the John S. McCain National Defense Authorization Act for Fiscal Year
2019 (P.L. 115-232), November 2018, pp. 8-9.
28 Rich Abott, “Navy Awards HII $15 Billion In Two Carrier Buy,” Defense Daily, February 1, 2019. Contractor-
furnished equipment (CFE) is equipment that the contractor (in this case, HII/NNS) purchases from supplier firms for
incorporation into the ships.
29 A superlift is the use of a crane to move a very large section of the ship from the land into its final position on the
ship.
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ordering, single negotiations, vendor quotes, and cross program purchase orders. These
efficiencies are expected to reduce material costs by about six percent more when
compared to single-ship estimates. Improved material management and flexibility will
prevent costly production delays. Furthermore, this provides stability within the nuclear
industrial base, de-risking the COLUMBIA and VIRGINIA Class programs. The two-ship
buy would provide economic stability to approximately 130,000 workers across 46 States
within the industrial base.
Change order requirements are likewise reduced as Government Furnished Equipment
(GFE) providers will employ planning and procurement strategies based on the common
technical baseline that minimize configuration changes that must be incorporated on the
follow ship. Change order budget allocations have been reduced over 25 percent based on
two-ship strategies.
In addition to the discrete savings achieved with the shipbuilder, the two-ship procurement
authority provides our partner GFE providers a similar opportunity to negotiate economic
order quantity savings and achieve cross program savings when compared to single-ship
estimates.30
For additional background information on options for two-ship or three-ship carrier block buys
that was presented in the main part of this CRS report prior to DOD’s December 31, 2018, two-
ship certification and the Navy’s January 31, 2019, two-ship contract award, see Appendix A.
Program Procurement Funding
Table 1 shows procurement funding for CVNs 78, 79, 80, and 81 through FY2023. This table
does not include the $62.7 million reprogramming request of July 11, 2018, discussed in the
above section on CVN-78.

30 Department of Defense, FORD Class Aircraft Carrier Certification, CVN 80 and CVN 81 Two Ship Procurement
Authority, as Required by Section 121(b) of the John S. McCain National Defense Authorization Act for Fiscal Year
2019 (P.L. 115-232), November 2018, pp. 6-7.
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Table 1. Procurement Funding for CVNs 78, 79, 80, and 81 Through FY2023
(Millions of then-year dollars, rounded to nearest tenth)
FY
CVN-78
CVN-79
CVN-80
CVN-81
Total
FY01
21.7 (AP)
0
0
0
21.7
FY02
135.3 (AP)
0
0
0
135.3
FY03
395.5 (AP)
0
0
0
395.5
FY04
1,162.9 (AP)
0
0
0
1,162.9
FY05
623.1 (AP)
0
0
0
623.1
FY06
618.9 (AP)
0
0
0
618.9
FY07
735.8 (AP)
52.8 (AP)
0
0
788.6
FY08
2,685.0 (FF)
123.5 (AP)
0
0
2,808.5
FY09
2,684.6 (FF) 1,210.6 (AP)
0
0
3,895.2
FY10
794.0 (FF)
482.9 (AP)
0
0
1,276.9
FY11
1,712.5 (FF)
902.5 (AP)
0
0
2,615.0
FY12
0
554.8 (AP)
0
0
554.8
FY13
0
491.0 (FF)
0
0
491.0
FY14
588.1 (CC)
917.6 (FF)
0
0
1,505.7
FY15
663.0 (CC)
1,219.4 (FF)
0
0
1,882.4
FY16
123.8 (CC)
1,569.5 (FF)
862.4 (AP)
0
2,555.7
FY17
0
1,241.8 (FF) 1,370.8 (AP)
0
2,612.6
FY18
20.0 (CC)
2,561.1 (FF)
1,569.6 (FF)
0
4,150.7
FY19 (requested)
0
0
1,598.2 (FF)
0
1,598.2
FY20 (programmed)
0
0
2,146.5 (FF)
0
2,146.5
FY21 (programmed)
0
0
2,244.6 (FF)
995.0 (AP)
3,239.6
FY22 (programmed)
0
0
1,343.1(FF)
1,567.4 (AP)
2,910.5
FY23 (projected)
0
0
1,455.5 (FF)
1,922.9 (FF)
3,378.4
Total of above
12,964.0
11,327.4
12,590.6
4,485.3
41,367.7
Ship’s total
12,964.0
11,341.4
12,601.7
15,088.0
51,995.1
estimated cost in
FY2019 budget
Source: Table prepared by CRS based on information provided to CRS by Navy Office of Legislative Affairs,
June 19, 2018.
Notes: Figures may not add due to rounding. “AP” is advance procurement funding; “FF” is ful funding; “CC” is
cost to complete funding (i.e., funding to cover cost growth), which is sometimes abbreviated in Navy documents
as CTC. The Department of the Navy states that “the Department of Navy's PB 2019 SCN end cost position for
CVN 80 is $12,601.713M as explained on the P -40 SCN budget exhibit note in the description section. It stated:
‘CVN 80 end cost to be reduced $300M with expected FY18 Congressional adjustment in enacted
appropriations bil . End cost is $12,601.713M after reduction.’” Source: Navy table of annual funding for CVNs
78 through 81 for FY2001-FY2023, provided to CRS by Navy Office of Legislative Affairs, June 19, 2018.
Program Procurement Cost Cap
Congress has established procurement cost caps for CVN-78 class aircraft carriers:
 Section 122 of the FY2007 John Warner National Defense Authorization Act
(H.R. 5122/P.L. 109-364 of October 17, 2006) established a procurement cost cap
for CVN-78 of $10.5 billion, plus adjustments for inflation and other factors, and
a procurement cost cap for subsequent Ford-class carriers of $8.1 billion each,
plus adjustments for inflation and other factors. The conference report (H.Rept.
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109-702 of September 29, 2006) on P.L. 109-364 discusses Section 122 on pages
551-552.
 Section 121 of the FY2014 National Defense Authorization Act (H.R. 3304/P.L.
113-66 of December 26, 2013) amended the procurement cost cap for the CVN-
78 program to provide a revised cap of $12,887.0 million for CVN-78 and a
revised cap of $11,498.0 million for each follow-on ship in the program, plus
adjustments for inflation and other factors (including an additional factor not
included in original cost cap).
 Section 122 of the FY2016 National Defense Authorization Act (S. 1356/P.L.
114-92 of November 25, 2015) further amended the cost cap for the CVN-78
program to provide a revised cap of $11,398.0 million for each follow-on ship in
the program, plus adjustment for inflation and other factors, and with a new
provision stating that, if during construction of CVN-79, the Chief of Naval
Operations determines that measures required to complete the ship within the
revised cost cap shall result in an unacceptable reduction to the ship’s operational
capability, the Secretary of the Navy may increase the CVN-79 cost cap by up to
$100 million (i.e., to $11.498 billion). If such an action is taken, the Navy is to
adhere to the notification requirements specified in the cost cap legislation.
 Section 121(a) of the FY2018 National Defense Authorization Act (H.R.
2810/P.L. 115-91 of December 12, 2017) further amended the cost cap for the
CVN-78 program to provide a revised cap of $12,568.0 million for CVN-80 and
subsequent ships in the program, plus adjustment for inflation and other factors.
(The cap for CVN-79 was kept at $11,398.0 million, plus adjustment for inflation
and other factors.) The provision also amended the basis for adjusting the caps
for inflation, and excluded certain costs from being counted against the caps.
In an August 2, 2017, letter to the congressional defense committees, then-Acting Secretary of the
Navy Sean Stackley notified the committees that under subsection (b)(7) of Section 122 of P.L.
114-92 as amended by Section 121 of P.L. 113-66—a subsection allowing increases to the cost
cap for CVN-78 for “the amounts of increases or decreases in costs of that ship that are
attributable solely to an urgent and unforeseen requirement identified as a result of the shipboard
test program”—he had increased the cost cap for CVN-78 by $20 million, to $12,907.0 million.
In a May 8, 2018, letter to the congressional defense committees, Secretary of the Navy Richard
Spencer notified the committees that under subsections (b)(6) and (b)(7) of Section 122 of P.L.
114-92 as amended by Section 121 of P.L. 113-66—subsections allowing increases to the cost cap
for CVN-78 for “the amounts of increases or decreases to cost required to correct deficiencies
that may affect the safety of the ship and personnel or otherwise preclude the ship from safe
operation and crew certification” and for “the amounts of increases or decreases in costs of CVN
78 that are attributable solely to an urgent and unforeseen requirement identified as a result of the
shipboard test program,” respectively—he had increased the cost cap for CVN-78 by $120
million, to $13,027 million.31
Changes in Estimated Unit Procurement Costs Since FY2008 Budget
Table 2 shows changes in the estimated procurement costs of CVNs 78, 79, 80, and 81 since the
budget submission for FY2008—the year of procurement for CVN-78.

31 A copy of the May 8, 2018, letter was provided to CRS and CBO by the Navy Office of Legislative Affairs on July
19, 2018.
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Table 2. Changes in Estimated Procurement Costs of CVNs 78, 79, 80, and 81
(As shown in FY2008-FY2018 budgets, in millions of then-year dollars)
Budget
CVN-78
CVN-79
CVN-80
CVN-81
Est.
Est.
Est.
Schedule
Est.
proc.
Scheduled
proc.
Scheduled
proc.
d FY of
proc.
Scheduled

cost
FY of proc.
cost
FY of proc.
cost
proc.
cost
FY of proc.
FY08
10,488.9
FY08
9,192.0
FY12
10,716.8
FY16
n/a
FY21
FY09
10,457.9
FY08
9,191.6
FY12
10,716.8
FY16
n/a
FY21
FY10
10,845.8
FY08
n/a
FY13
n/a
FY18
n/a
FY23
FY11
11,531.0
FY08
10,413.1
FY13
13,577.0
FY18
n/a
FY23
FY12
11,531.0
FY08
10,253.0
FY13
13,494.9
FY18
n/a
FY23
FY13
12,323.2
FY08
11,411.0
FY13
13,874.2
FY18
n/a
FY23
FY14
12,829.3
FY08
11,338.4
FY13
13,874.2
FY18
n/a
FY23
FY15
12,887.2
FY08
11,498.0
FY13
13,874.2
FY18
n/a
FY23
FY16
12,887.0
FY08
11,347.6
FY13
13,472.0
FY18
n/a
FY23
FY17
12,887.0
FY08
11,398.0
FY13
12,900.0
FY18
n/a
FY23
FY18
12,907.0
FY08
11,377.4
FY13
12,997.6
FY18
n/a
FY23
FY19
12,964.0
FY08
11,341.4
FY13
12,601.7
FY18
15,088.0
FY23
Annual % change
FY08 to FY09
-0.3

0%

0%

n/a

FY09 to FY10
+3.7

n/a

n/a

n/a

FY10 to FY11
+6.3

n/a

n/a

n/a

FY11 to FY12
0%

-1.5%

-0.1%

n/a

FY12 to FY13
+6.9%

+11.3%

+2.8%

n/a

FY13 to FY14
+4.1%

-0.6%

0%

n/a

FY14 to FY15
+0.5%

+1.4%

0%

n/a

FY15 to FY16
0%

-1.3%

-2.9%

n/a

FY16 to FY17
0%

+0.4%

-4.2%

n/a

FY17 to FY18
+0.2%

-0.2%

+0.7%

n/a

FY18 to FY19
+0.4%

-0.3%

-3.0%

n/a

Cumulative % change through FY19
Since FY08
+23.6%

+23.4%

+17.6%

n/a

(CVN-78 year
of proc.)
Since FY13
+5.2%

-0.6%

-9.2%

n/a

(CVN-79 year
of proc.)
Since FY18
+0.4%

-0.3%

-3.0%

n/a

(CVN-80 year
of proc.)
Source: Table prepared by CRS based on FY2008-FY2018 Navy budget submissions. n/a means not available.
Notes: (1) The FY2010 budget submission did not show estimated procurement costs for CVNs 79 and 80. (2)
The FY2010 budget submission did not show scheduled years of procurement for CVNs 79 and 80; the dates
shown here for the FY2010 budget submission are inferred from the shift to five-year intervals for procuring
carriers that was announced by Secretary of Defense Gates in his April 6, 2009, news conference regarding
recommendations for the FY2010 defense budget. (3) Although the FY2013 budget did not change the scheduled
years of procurement for CVN-79 and CVN-80 compared to what they were under the FY2012 budget, it
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lengthened the construction period for each ship by two years (i.e., each ship was scheduled to be delivered two
years later than under the FY2012 budget). (4) The Department of the Navy states that “the Department of
Navy's PB 2019 SCN end cost position for CVN 80 is $12,601.713M as explained on the P -40 SCN budget
exhibit note in the description section. It stated: ‘CVN 80 end cost to be reduced $300M with expected FY18
Congressional adjustment in enacted appropriations bil . End cost is $12,601.713M after reduction.’” Source:
Navy table of annual funding for CVNs 78 through 81 for FY2001-FY2023, provided to CRS by Navy Office of
Legislative Affairs, June 19, 2018.
Issues for Congress for FY2020
FY2020 Funding Request
One issue for Congress for FY2020 is whether to approve, reject, or modify the Navy’s FY2020
procurement funding requests for CVN-78 program. In assessing this question, Congress could
consider various factors, including whether the Navy has accurately priced the work it is
proposing to do on the CVN-78 program in FY2020.
Reported FY2020 Proposal to Not Fund CVN-75 Refueling Complex
Overhaul (RCOH) and Deactivate a Carrier Air Wing
The Navy’s FY2020 budget submission proposes to not fund the mid-life nuclear refueling
overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier Harry S.
Truman (CVN-75), and to instead retire the ship around FY2024 and also deactivate one of the
Navy’s carrier air wings at about the same time.
Performing an RCOH on a carrier is needed for the carrier to be able to operate for the second
half of its intended 50-year service life.32 Not performing an RCOH on CVN-75 would mean that,
instead of remaining in service for the second half of its intended 50-year service life, the ship
would be decommissioned, permanently removed from service, and eventually dismantled. Other
things held equal, this would reduce the size of the carrier force by one ship for the following 20
to 25 years compared to what the size of the carrier force would have been had the ship received
an RCOH.
Under the Navy’s FY2019 budget submission, CVN-75’s RCOH was scheduled to start in
FY2024 and be completed in FY2028. Given the projected size of the carrier force under the
Navy’s FY2019 30-year (FY2019-FY2048) shipbuilding plan, not performing an RCOH on
CVN-75 would mean that for the period FY2024-FY2048, the carrier force would in most years
have 10 carriers rather than 11, and in most of those years consequently would not be in
compliance with the requirement under 10 U.S.C. 8062(b) for the Navy to maintain a force of not
less than 11 operational aircraft carriers.
As an associated action, the Navy’s FY2020 budget submission also proposes deactivating one of
the Navy’s carrier air wings around FY2024. This would reduce the number of carrier air wings
from nine to eight meaning that the Navy would no longer be in compliance with the requirement
under 10 U.S.C. 8062(e) to maintain a minimum of nine carrier air wings.

32 To operate for a full 50-year life, existing Nimitz (CVN-68) class nuclear-powered carriers are given a mid-life
nuclear refueling overhaul, called a refueling complex overhaul (RCOH), when they are 20 to 25 years old, which is
when their original nuclear fuel core has been exhausted. The RCOH gives the ship a new nuclear fuel core sufficient
to power the ship for the remainder of its 50-year life. The RCOH also involves a significant amount of other overhaul,
repair, and modernization work on the ship. An RCOH requires about 44 months from contract award to delivery.
RCOHs are funded through the Navy’s shipbuilding account.
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Table 3 shows funding for the CVN-75 RCOH in the Navy’s FY2019 budget submission. As
shown in the table, the estimated FY2019-FY2023 cost of the CVN-75 in the FY2019 budget
submission was about $5.6 billion. In addition to this cost, the Navy states that it has expended
$538 million in prior-year funding to procure the two nuclear fuel cores intended for the CVN-75
RCOH. (CVN-75, like all Nimitz-class carriers, has two nuclear reactors, each of which would
need a new fuel core. The Navy states that it procured one of the needed cores in FY2008 and the
other in FY2011.)33 Adding this $538 million cost would increase the total estimated cost of the
CVN-75 RCOH to about $6.1 billion. If CVN-75 does not receive an RCOH, these two fuel cores
could be used for the CVN-76 RCOH or the CVN-77 RCOH, or alternatively be kept in storage
as emergency replacement cores for a Nimitz-class carrier.34
Table 3. Funding for CVN-75 RCOH in FY2019 Budget Submission
Millions of dollars
To
FY2019
FY2020
FY2021
FY2022
FY2023
complete
Total
0
16.9
234.7
539.0
752.0
4,035.4
5,578.0
Source: Table prepared by CRS using data from Navy’s FY2019 budget submission.
If CVN-75 does not receive an RCOH and is instead decommissioned, the savings from not
funding the RCOH would be partially offset by the cost to deactivate and dismantle CVN-75. The
Navy estimates the cost to deactivate and dismantle CVN-75 at about $1.5 billion. The initial
increments of this approximate $1.5-billion cost would occur in FY2023 ($130.3 million) and
FY2024 ($247.2 million.)35 The estimated net savings from not funding the RCOH and instead
deactivating and dismantling the ship would thus be about $4.1 billion (i.e., about $5.6 billion
less about $1.5 billion). The Navy states that there would also be 20 to 25 years of additional
annual savings of about $1 billion per year in the form of avoided annual operation and support
(O&S) costs for CVN-75 and the deactivated carrier air wing.36
The reported FY2020 proposal to not fund CVN-75’s RCOH and to deactivate a carrier air wing
reportedly is a decision of the Office of the Secretary of Defense (OSD). Reportedly, OSD wants
to begin redirecting Navy investments to things other than aircraft carriers.37
RCOHs are done primarily at Huntington Ingalls Industries/Newport News Shipbuilding
(HII/NNS) in Newport News, VA, and form a significant part of HII/NNS’s business base, along
with construction of new nuclear-powered aircraft carriers and construction of new nuclear-
powered submarines. RCOHs in recent years have been scheduled in a more or less heel-to-toe
fashion at HII/NNS—when one RCOH is done, the next one is scheduled to begin soon
thereafter. RCOHs are done in a particular dry dock at HII/NNS, so a carrier undergoing an

33 Source: Remarks by Rear Admiral Randy Crites, Deputy Assistant Secretary of the Navy for Budget, at a DOD’s
press briefing on the Navy’s FY2020 budget submission, March 12, 2019, as shown in DOD’s transcript of the
briefing.
34 Source: Navy remarks at Navy briefing for congressional staff on the Navy’s FY2020 budget submission, March 14,
2019.
35 Source: Navy remarks at Navy briefing for congressional staff on the Navy’s FY2020 budget submission, March 14,
2019.
36 Source: Navy remarks at Navy briefing for congressional staff on the Navy’s FY2020 budget submission, March 14,
2019.
37 See the sources cited in footnote Error! Bookmark not defined..
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RCOH in that dry dock must be ready to depart the dry dock before the following carrier can be
moved into the dry dock for its RCOH.
A proposal in the Navy’s FY2020 budget submission to not fund CVN-75’s RCOH and instead
decommission the ship would raise a number of potential oversight issues for Congress, including
the following:
 The central purpose of 10 U.S.C. 8062(b) and 8062(e) are to act as mandates to
the executive branch to support a force of not less than 11 carriers and a
minimum of 9 carrier air wings in executive branch planning. It represents a
direction from Congress for the Navy to provide the funding needed to maintain
an 11-carrier, 9-carrier-air-wing force, regardless of limitations on the Navy’s
overall budget or other considerations. A proposed budget from the Navy that is
inconsistent with these provisions might thus be viewed as a challenge to
Congress’s Article 1 power to set policy and to determine the composition of
federal spending (i.e., Congress’s constitutional power of the purse). If DOD
were to treat the requirements in 10 U.S.C. 8062(b) and 8062(e) as optional
matters rather than mandates, would this create a precedent for the executive
branch to treat similar provisions in the U.S. Code as optional matters rather than
mandates? For example, would it create a precedent for DOD, if it so desired, to
begin treating as an optional matter the long-standing requirement in 10 U.S.C.
8063(a) that the Marine Corps “shall be so organized as to include not less than
three combat divisions and three air wings, and such other land combat, aviation,
and other services as may be organic therein?” If the executive branch were to
begin treating statutory provisions like 10 U.S.C. 8062(b) and 8062(e) as optional
matters rather than mandates, what implications might this have for policy and
program execution, for Congress’s power to legislatively establish policy and
program goals, and for Congress’s power of the purse?
 What would be the operational impact for the Navy of reducing the carrier force
and the number of carrier air wings by one ship and one air wing for a period of
20 to 25 years starting around FY2024? What impact would this have on the
Navy’s ability to fulfill its missions?
 If CVN-75’s RCOH were funded and the carrier air wing were not deactivated,
what other defense programs might have their funding reduced, and what would
be the impact of these funding reductions on DOD’s ability to fulfill its missions?
 The Navy’s 2016 Force Structure Assessment (FSA) led to a Navy force-level
requirement for a fleet of 355 ships that includes 12 aircraft carriers. OSD
allowed the Navy to present that FSA to the Congress, and to program
shipbuilding and other actions in support of achieving the 355-ship force-level
goal. OSD did not publicly object to the FSA’s 12-carrier requirement (or any
other part of the 355-ship force-level goal). What is the analytical basis for an
action that would reduce the size of the carrier from 11 to 10, instead of helping it
to eventually increase from 11 to 12?
 A proposal to not fund the CVN-75 RCOH and to deactivate a carrier air wing
represents a notable change from prior DOD force-structure planning and
budgeting. Is it appropriate for such a change to be proposed by DOD during a
time when DOD has an acting Secretary of Defense rather than a Senate-
confirmed Secretary of Defense?
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 What would be the impact on HII/NNS and the other parts of the aircraft carrier
industrial base if CVN-75 were inactivated rather than given an RCOH? What
impact, if any, would this have on the cost of other work performed at HII/NNS
during these years, and on the eventual cost of the CVN-76 RCOH?
The Navy’s FY2015 budget submission proposed not funding the RCOH for the aircraft carrier
George Washington (CVN-73). The proposal raised oversight issues for Congress broadly similar
to those listed above. Congress, in acting on the Navy’s proposed FY2015 budget, rejected the
proposal to not fund CVN-73’s RCOH.38 The RCOH was funded and is currently underway.
Date for Achieving a 12-Carrier Force
Another issue for Congress for FY2019 concerns the date for achieving the Navy’s 12-ship force-
level goal for aircraft carriers. As noted earlier, under the Navy’s FY2019 30-year shipbuilding
plan, carrier procurement would shift from 5-year centers to 4-year centers after the procurement
of CVN-82 in FY2028, and a 12-carrier force would be achieved on a sustained basis in the
2060s. As also noted earlier, shifting carrier procurement to 3- or 3.5-year centers could achieve a
12-carrier fleet as soon as the 2030s, unless the service lives of one or more existing carriers were
substantially extended. Other things held equal, procuring carriers on 3- or 3.5-year centers rather
than 4-year centers would increase Navy funding requirements during the period of the 30-year
shipbuilding plan for procuring aircraft carriers and for operating and supporting a 12-carrier
force rather than a force of 11 or fewer carriers.
Cost Growth and Managing Costs within Program Cost Caps
Overview
For the past several years, cost growth in the CVN-78 program, Navy efforts to stem that growth,
and Navy efforts to manage costs so as to stay within the program’s cost caps have been
continuing oversight issues for Congress on the CVN-78 program.39 As shown in Table 2, the

38 See Appendix B of the December 22, 2014, version of CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft
Carrier Program: Background and Issues for Congress, by Ronald O'Rourke.
39 The Congressional Budget office (CBO) in 2008 and GAO in 2007 questioned the accuracy of the Navy’s cost
estimate for CVN-78. CBO reported in June 2008 that it estimated that CVN-78 would cost $11.2 billion in constant
FY2009 dollars, or about $900 million more than the Navy’s estimate of $10.3 billion in constant FY2009 dollars, and
that if “CVN-78 experienced cost growth similar to that of other lead ships that the Navy has purchased in the past 10
years, costs could be much higher still.” CBO also reported that, although the Navy publicly expressed confidence in its
cost estimate for CVN-78, the Navy had assigned a confidence level of less than 50% to its estimate, meaning that the
Navy believed there was more than a 50% chance that the estimate would be exceeded. (Congressional Budget Office,
Resource Implications of the Navy’s Fiscal Year 2009 Shipbuilding Plan, June 9, 2008, p. 20.) GAO reported in
August 2007 that:
Costs for CVN 78 will likely exceed the budget for several reasons. First, the Navy’s cost estimate,
which underpins the budget, is optimistic. For example, the Navy assumes that CVN 78 will be
built with fewer labor hours than were needed for the previous two carriers. Second, the Navy’s
target cost for ship construction may not be achievable. The shipbuilder’s initial cost estimate for
construction was 22 percent higher than the Navy’s cost target, which was based on the budget.
Although the Navy and the shipbuilder are working on ways to reduce costs, the actual costs to
build the ship will likely increase above the Navy’s target. Third, the Navy’s ability to manage
issues that affect cost suffers from insufficient cost surveillance. Without effective cost
surveillance, the Navy will not be able to identify early signs of cost growth and take necessary
corrective action.
(Government Accountability Office, Defense Acquisitions[:] Navy Faces Challenges Constructing
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estimated procurement costs of CVN-78, CVN-79, and CVN-80 have grown 23.6%, 23.4%, and
17.6%, respectively, since the submission of the FY2008 budget. Cost growth on CVN-78
required the Navy to program $1,394.9 million in cost-to-complete procurement funding for the
ship in FY2014-FY2016 and FY2018 (see Table 1). As also shown in Table 2, however, cost
growth on CVN-78, CVN-79, and CVN-80 more or less stopped in FY2013 and FY2014:
 while the estimated cost of CVN-78 grew considerably between the FY2008
budget (the budget in which CVN-78 was procured) and the FY2014 budget,
since the FY2014 budget, it has grown by only a small amount (about 1%);
 while the estimated cost of CVN-79 grew considerably between the FY2008
budget and the FY2013 budget (in part because the procurement date for the ship
was deferred by one year in the FY2010 budget),40 since the FY2013 budget it
has declined by a small amount (less than 1%); and
 while the estimated cost of CVN-79 grew considerably between the FY2008
budget and the FY2013 budget (in part because the procurement date for the ship
was deferred by two years in the FY2010 budget),41 since the FY2013 budget it
has declined by about 9%.
Recent Related Legislative Provisions
Section 128 of the FY2016 National Defense Authorization Act (S. 1356/P.L. 114-92 of
November 25, 2015) states the following:
SEC. 128. Limitation on availability of funds for U.S.S. John F. Kennedy (CVN–79).
(a) Limitation.—Of the funds authorized to be appropriated by this Act or otherwise made
available for fiscal year 2016 for procurement for the U.S.S. John F. Kennedy (CVN–79),
$100,000,000 may not be obligated or expended until the date on which the Secretary of
the Navy submits to the congressional defense committees the certification under
subsection (b)(1) or the notification under paragraph (2) of such subsection, as the case
may be, and the reports under subsections (c) and (d)....
(c) Report on costs relating to CVN–79 and CVN–80.—
(1) IN GENERAL.—Not later than 90 days after the date of the enactment of this Act, the
Secretary of the Navy shall submit to the congressional defense committees a report that
evaluates cost issues related to the U.S.S. John F. Kennedy (CVN–79) and the U.S.S.
Enterprise (CVN–80).
(2) ELEMENTS.—The report under paragraph (1) shall include the following:
(A) Options to achieve ship end cost of no more than $10,000,000,000.

the Aircraft Carrier Gerald R. Ford within Budget, GAO-07-866, August 2007, summary page. See
also Government Accountability Office, Defense Acquisitions[:] Realistic Business Cases Needed
to Execute Navy Shipbuilding Programs, Statement of Paul L. Francis, Director, Acquisition and
Sourcing Management Team, Testimony Before the Subcommittee on Seapower and Expeditionary
Forces, Committee on Armed Services, House of Representatives, July 24, 2007 (GAO-07-943T),
p. 15.)
40 Deferring the ship’s procurement from FY2012 to FY2013 put another year of inflation into the ship’s estimated cost
in then-year dollars (which are the type of dollars shown in Table 2), and may have reduced production learning curve
benefits in shifting from production of CVN-78 to production of CVN-79.
41 Deferring the ship’s procurement from FY2016 to FY2018 put additional years of inflation into the ship’s estimated
cost in then-year dollars (which are the type of dollars shown in Table 2), and may have reduced production learning
curve benefits in shifting from production of CVN-79 to production of CVN-80.
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(B) Options to freeze the design of CVN–79 for CVN–80, with exceptions only for changes
due to full ship shock trials or other significant test and evaluation results.
(C) Options to reduce the plans cost for CVN–80 to less than 50 percent of the CVN–79
plans cost.
(D) Options to transition all non-nuclear Government-furnished equipment, including
launch and arresting equipment, to contractor-furnished equipment.
(E) Options to build the ships at the most economic pace, such as four years between ships.
(F) A business case analysis for the Enterprise Air Search Radar modification to CVN–79
and CVN–80.
(G) A business case analysis for the two-phase CVN–79 delivery proposal and impact on
fleet deployments.
Section 126 of the FY2017 National Defense Authorization Act (S. 2943/P.L. 114-328 of
December 23, 2016) states the following:
SEC. 126. Limitation on availability of funds for procurement of U.S.S. Enterprise (CVN–
80).
(a) Limitation.—Of the funds authorized to be appropriated by this Act or otherwise made
available for fiscal year 2017 for advance procurement or procurement for the U.S.S.
Enterprise (CVN–80), not more than 25 percent may be obligated or expended until the
date on which the Secretary of the Navy and the Chief of Naval Operations jointly submit
to the congressional defense committees the report under subsection (b).
(b) Initial report on CVN–79 and CVN–80.—Not later than December 1, 2016, the
Secretary of the Navy and the Chief of Naval Operations shall jointly submit to the
congressional defense committees a report that includes a description of actions that may
be carried out (including de-scoping requirements, if necessary) to achieve a ship end cost
of—
(1) not more than $12,000,000,000 for the CVN–80; and
(2) not more than $11,000,000,000 for the U.S.S. John F. Kennedy (CVN–79).
(c) Annual report on CVN–79 and CVN–80.—
(1) IN GENERAL.—Together with the budget of the President for each fiscal year through
fiscal year 2021 (as submitted to Congress under section 1105(a) of title 31, United States
Code) the Secretary of the Navy and the Chief of Naval Operations shall submit a report
on the efforts of the Navy to achieve the ship end costs described in subsection (b) for the
CVN–79 and CVN–80.
(2) ELEMENTS.—The report under paragraph (1) shall include, with respect to the
procurement of the CVN–79 and the CVN–80, the following:
(A) A description of the progress made toward achieving the ship end costs described in
subsection (b), including realized cost savings.
(B) A description of low value-added or unnecessary elements of program cost that have
been reduced or eliminated.
(C) Cost savings estimates for current and planned initiatives.
(D) A schedule that includes—
(i) a plan for spending with phasing of key obligations and outlays;
(ii) decision points describing when savings may be realized; and
(iii) key events that must occur to execute initiatives and achieve savings.
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(E) Instances of lower Government estimates used in contract negotiations.
(F) A description of risks that may result from achieving the procurement end costs
specified in subsection (b).
(G) A description of incentives or rewards provided or planned to be provided to prime
contractors for meeting the procurement end costs specified in subsection (b).
Section 121(b) of the FY2018 National Defense Authorization Act (H.R. 2810/P.L. 115-91 of
December 12, 2017) states the following:
SEC. 121. Aircraft carriers.
...
(b) Waiver on limitation of availability of funds for CVN–79.—The Secretary of Defense
may waive subsections (a) and (b) of section 128 of the National Defense Authorization
Act for Fiscal Year 2016 (Public Law 114–92; 129 Stat. 751) after a period of 60 days has
elapsed following the date on which the Secretary submits to the congressional defense
committees a written notification of the intent of the Secretary to issue such a waiver. The
Secretary shall include in any such notification the following:
(1) The rationale of the Secretary for issuing the waiver.
(2) The revised test and evaluation master plan that describes when full ship shock trials
will be held on Ford-class aircraft carriers.
(3) A certification that the Secretary has analyzed and accepted the operational risk of the
U.S.S. Gerald R. Ford deploying without having conducted full ship shock trials, and that
the Secretary has not delegated the decision to issue such waiver.
Sources of Risk of Cost Growth and Navy Actions to Control Cost
Sources of risk of cost growth on CVN-78 included, among other things, certain new systems to
be installed on CVN-78 whose development, if delayed, could delay the completion of the ship.
These systems included a new type of aircraft catapult called the Electromagnetic Launch System
(EMALS), a new aircraft arresting system called the Advanced Arresting Gear (AAG), and the
ship’s primary radar, called the Dual Band Radar (DBR). Congress has followed these and other
sources of risk of cost growth for years.
In July 2016, the DOD Inspector General issued a report critical of the Navy’s management of the
AAG development effort.42 In January 2017, it was reported that after conducting a review of
potential alternative systems, the Navy had decided to continue stay with its plan to install
EMALs and AAG on the first three Ford-class carriers.43 Section 125 of the FY2017 National
Defense Authorization Act (S. 2943/P.L. 114-328 of December 23, 2016) limited the availability
of funds for the AAG program until certain conditions are met.

42 Inspector General, U.S. Department of Defense, Advanced Arresting Gear Program Exceeded Cost and Schedule
Baselines, Report No DODIG-2016-107, July 5, 2016, 29 pp. For press reports about the DOD IG report, see Justin
Doubleday, “DOD IG: Navy Mismanaged Development, Testing of Advanced Arresting Gear,” Inside the Navy, July
11, 2016; Christopher P. Cavas, “Pentagon Finds Navy Mismanaged Arresting Gear Program,” Defense News, July 11,
2016.
43 Sydney J. Freedberg Jr., “Navy Commits To High-Tech Catapults, Arresting Gear For All 3 Ford Carriers,” Breaking
Defense, January 17, 2017. See also David B. Larter, “Advanced Arresting Gear Is Coming Along,” Defense News,
June 25, 2018; Paul McLeary, “Navy’s troubled Ford Carrier Makes Modest Progress,” Breaking Defense, June 25,
2018.
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Navy officials have stated that they are working to control the cost of CVN-79 by equipping the
ship with a less expensive primary radar,44 by turning down opportunities to add features to the
ship that would have made the ship more capable than CVN-78 but would also have increased
CVN-79’s cost, and by using a build strategy for the ship that incorporates improvements over the
build strategy that was used for CVN-78. These build-strategy improvements, Navy officials have
said, include the following items, among others:
 achieving a higher percentage of outfitting of ship modules before modules are
stacked together to form the ship;
 achieving “learning inside the ship,” which means producing similar-looking ship
modules in an assembly line-like series, so as to achieve improved production
learning curve benefits in the production of these modules; and
 more economical ordering of parts and materials including greater use of batch
ordering of parts and materials, as opposed to ordering parts and materials on an
individual basis as each is needed.
For additional background information on cost growth in the CVN-78 program, Navy efforts to
stem that growth, and Navy efforts to manage costs so as to stay within the program’s cost caps,
see Appendix B and Appendix C.
CVN-78 Weapons Elevators
Another oversight issue for Congress concerns Navy efforts to complete the construction, testing,
and certification of the weapons elevators on CVN-78. (The ship’s weapons elevators transport
missiles and bombs from the ship’s weapon magazines to the ship’s flight deck, so that they can
be loaded onto aircraft that are getting ready to take off from the ship.) A November 2, 2018,
press report states the following:
The $13 billion Gerald R. Ford aircraft carrier, the U.S. Navy’s costliest warship, was
delivered last year without elevators needed to lift bombs from below deck magazines for
loading on fighter jets.
Previously undisclosed problems with the 11 elevators for the ship built by Huntington
Ingalls Industries Inc. add to long-standing reliability and technical problems with two
other core systems -- the electromagnetic system to launch planes and the arresting gear to
catch them when they land.
The Advanced Weapons Elevators, which are moved by magnets rather than cables, were
supposed to be installed by the vessel’s original delivery date in May 2017. Instead, final
installation was delayed by problems including four instances of unsafe “uncommanded
movements” since 2015, according to the Navy.
While progress was being made on the carrier’s other flawed systems, the elevator is “our
Achilles heel,” Navy Secretary Richard Spencer told reporters in August without providing
details....
The Navy says that the first carrier will be fully combat-capable, including the elevators,
by July -- the end of its current 12-month pier-side shakedown period in Virginia.

44 See, for example, Megan Eckstein, “PEO Carriers: CVN-79 Will Have a New Radar, Save $180M Compared to
[CVN-78’s] Dual Band Radar,” USNI News, March 17, 2015; Christopher P. Cavas, “Dual Band Radar Swapped Out
In New Carriers,” Defense News, March 17, 2015; Christopher P. Cavas, “New US Carrier Radar Enters the Picture,”
Defense News, March 23, 2015.
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Navy weapons buyer James Geurts cited what he called “considerable progress” on the
Ford, including on the elevators, in a July 6 memo to Pentagon acquisition head Ellen Lord.
The Navy in May requested permission from Congress in May to increase the Ford’s cost
cap by $120 million, partly to fix elevator issues “to preclude any effect on the safety of
the ship and personnel.” The safety issues related to the uncommanded movements, the
Navy said in an email....
Beci Brenton, a spokeswoman for Newport News, Virginia-based Huntington Ingalls, said
“all the elevators are installed.” She said the weapons elevator is among “the most
advanced technologies being incorporated into” the carrier and “its completion has been
delayed due to a number of first-in-class issues,” Brenton said.
“We are committed to working through the remaining technical challenges,” she said.
William Couch, a spokesman for the Naval Sea Systems Command, said the elevators are
“in varying levels of construction and testing.”
Six are far enough along to be operated by the shipbuilder, and testing has started on two
of those, he said. All 11 “should have been completed and delivered with the ship delivery,”
according to Couch.
He said the contractor has corrected “all issues,” including the “four uncommanded
movements over the last three years that were discovered during the building, operational
grooming, or testing phases.”...
A November 2010 program on PBS’s “Nova” science series extolled the “Elevator of
Tomorrow” being developed by Federal Equipment Co., a Cincinnati-based subcontractor
to Huntington Ingalls.
Doug Ridenour, president of Federal Equipment Co., said the elevator’s key technologies
“have been consistently demonstrated for years” in a test unit in the company’s plant and
any programming or software-related issues have been fixed.
But “shipboard integration involves many other technology insertions not controlled by”
his company, he said.45
At a November 27, 2018, hearing on Navy shipbuilding programs before the Seapower
subcommittee of the Senate Armed Services Committee, the following exchange occurred:
SENATOR TIM KAINE (continuing):
There have been challenges with the advanced weapons elevators on the CVN, some of the
technical difficult[ies] seem similar to those that were experienced earlier on both the
[aircraft] launch and arresting systems. I think that the Navy put together independent
review teams to tackle those issues and provide solutions. Are we at a point where that may
be needed on the weapons elevators or are we in a position where we think the progress on
the weapons elevators is satisfactory?
JAMES F. GEURTS, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH,
DEVELOPMENT AND ACQUISITION:
Yes, sir. So there are 11 weapons elevators [and] each one of them we have to produce,
test and then certify. The first two of those have been produced, the first one’s been through
test and certification. The second one is about 94 percent through test. We are making
progress to get through all of the elevators during this availability.
I am likely to do an independent review team not on the immediate construction for CVN-
78 but looking at the longer-term sustainability, resilience, reliability to make sure we are

45 Anthony Capaccio, “U.S. Navy’s Costliest Carrier Was Delivered Without Elevators to Lift Bombs,” Bloomberg,
November 2, 2018.
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in a position to support those elevators for the long term, that we’ve got all of the training
and all of the reliability built into those. We’ve done so many independent reviews for the
[CVN-]78 elevator design as they are so we won’t do one on the current efforts on [CVN-
]78. We've got a dedicated team working our way through those issues.
KAINE:
And is your timing on that testing and certification on [CVN-]78—you have this 12-month
period where you are testing—[do] you think you will get through the testing and
certification of all of the 11 elevators in that year one?
GEURTS:
My current assessment is we will get through all of the production and much of the testing.
We may have some of the certification issues to go. I am watching it very closely and we
will keep you and your staff informed on progress there.46
A December 5, 2018, press report stated the following:
The Navy plans to complete installation and testing of the 11 elevators before the Ford
completes its post-delivery shakedown phase in July, Captain Danny Hernandez, a Navy
spokesman, said in an email. Six will also be certified for use by then, but five won’t be
completed until after July, he said. “A dedicated team is engaged on these efforts and will
accelerate this certification work and schedule where feasible,” he said.
Huntington spokeswoman Beci Brenton said via email that company officials had a “very
productive meeting” with Inhofe that included both the elevators and benefits of a two-
carrier contract.
The elevator’s completion “has been delayed due to a number of first-in-class issues
associated with the first-time installation, integration and test of this new technology,” she
said. “However, we are making substantial substantial progress in resolving the remaining
technical challenges.”
A January 6, 2019, press report stated the following:
The Navy Secretary has committed that the service and its industry partners will have
working weapons elevators on aircraft carrier USS Gerald R. Ford (CVN-78) by the end
of the summer--and the secretary’s job is now on the line over that issue.
The Navy accepted delivery of the first-in-class carrier and commissioned it into the fleet
without any functioning weapons elevators. The carrier is now in its post-shakedown
availability at builder Newport News Shipbuilding, after spending a year at sea running the
ship to discover any potential flaws.
Though the Navy already said the elevators would be addressed during this PSA period,
the stakes are now higher: Navy Secretary Richard V. Spencer told President Donald
Trump that the elevators would be installed and working by the time the carrier returns to
sea, or else the president can use his famous “you’re fired” line on the service secretary.
Spencer said this morning at an event hosted by the Center for a New American Security
that he spoke to Trump at length last month at the Army-Navy football game in
Philadelphia.
“I asked him to stick his hand out; he stuck his hand out. I said, let’s do this like corporate
America. I shook his hand and said, the elevators will be ready to go when she pulls out or
you can fire me,” Spencer said, adding that someone had to take accountability over the
ongoing elevator challenges.

46 Source: CQ.com transcript of hearing.
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“We’re going to get it done. I know I’m going to get it done. I haven’t been fired yet by
anyone; being fired by the president really isn’t on the top of my list.”...
The elevator issue has plagued the carrier for years, even if it garnered less attention than
other high-profile new technologies on the carrier, such as the new Electromagnetic
Aircraft Launch System (EMALS) and the Advanced Arresting Gear, both of which had
their own fair share of technical problems.
In 2016, the late Sen. John McCain (R-Ariz.), who then chaired the Senate Armed Services
Committee, railed against the Ford-class program, noting that Ford was already overdue to
be delivered to the Navy and still was facing ongoing technical difficulties.
“The Navy’s announcement of another two-month delay in the delivery of CVN-78 further
demonstrates that key systems still have not demonstrated expected performance. The
advanced arresting gear (AAG) cannot recover airplanes. Advanced weapons elevators
cannot lift munitions. The dual-band radar cannot integrate two radar bands. Even if
everything goes according to the Navy’s plan, CVN-78 will be delivered with multiple
systems unproven,” McCain said in a July 2016 hearing.
A month later the Pentagon announced a 60-day review of the Ford program, with a specific
focus on five technology areas, including the elevators.
Ford ultimately delivered to the Navy in June 2017 and commissioned a month later, still
without working weapons elevators.
In July 2018, when Ford entered PSA, the Navy said the maintenance availability had been
extended from a planned eight months to a full year, to accommodate both the typical work
that arises in PSA but also deferred work such as the construction and installation of
weapons elevators and an upgrade to the AAG, whose technical challenges greatly
contributed to the delayed delivery and commissioning of the ship.47
A January 16, 2019, press report stated the following:
The Navy’s newest aircraft carrier, USS Gerald R. Ford (CVN 78), closed out 2018 on a
high note with the acceptance of the ship’s first advanced weapons elevator (AWE), setting
the tone for more positive developments in the year ahead.
AWE Upper Stage #1 was turned over to the ship on Dec. 21, following testing and
certification by engineers at Huntington Ingalls Industries-Newport News Shipbuilding,
where the ship is currently working through its post-shakedown availability (PSA). The
acceptance marks a major milestone for the ship and the Ford-class of aircraft carriers to
follow....
Though the first elevator has been accepted, work still remains on the remaining 10.
Currently, all shipboard installation and testing activities of the AWEs are due to be
completed prior to the end of Ford’s PSA, scheduled for July. However, some remaining
certification documentation will be performed for five of the 11 elevators after PSA
completion.48
A March 6, 2019, press report stated the following:

47 Megan Eckstein, “SECNAV to Trump: Ford Carrier Weapons Elevators Will Be Fixed by Summer, or ‘Fire Me,’”
USNI News, January 8, 2019.
48 USS Gerald R. Ford Public Affairs, “USS Gerald R. Ford Accepts First Advanced Weapons Elevator,” Navy News
Service, January 16, 2019. See also Christopher Woody, “The Navy’s Newest Aircraft Carrier Got a Long-Missing
Piece of Gear in December, Helping to Solve a Problem the Navy Secretary Has Bet His Job on Fixing,” Business
Insider, January 20, 2019; Richard Sisk, “Navy Finally Has One Weapons Elevator Working on Its Newest Carrier,”
Military.com, January 22, 2019; Mark D. Faram, “Once Beleaguered by Critics, the Ford Gets a Lift,” Navy Times,
January 23, 2019.
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Nearly one month following the acceptance of its first advanced weapons elevator (AWE),
the Navy’s newest aircraft carrier, USS Gerald R. Ford (CVN 78), has accepted its second.
AWE Upper Stage #3 was turned over to the ship February 14, following testing and
certification by engineers at Huntington Ingalls Industries-Newport News Shipbuilding
(NNS), where the ship is currently working through its post-shakedown availability (PSA).
According to Ford’s Weapons Officer, Cmdr. Joe Thompson, acceptance of the second
AWE offers an opportunity for Ford Sailors to become acquainted with the equipment
during the PSA.
“This gives us more time to learn and become subject matter experts,” explained
Thompson. “All of us are learning on brand new systems and brand new concepts. This
acceptance gives us the opportunity to have that ‘run time’ on the physical aspects of the
elevator, but also in evaluating the technical manuals, and learning the maintenance
required to keep them operational.”
With two elevators in hand, Thompson explained that Sailors training on these new systems
will be able to apply the lessons learned from the first elevator, Upper Stage #1, and apply
them to Upper Stage #3, thereby streamlining the learning process and lessening the
learning curve.
“This is going to allow us to progress faster,” he explained. “As we get smarter on one, we
move on to the next and apply the lessons learned not only with regard to elevator
operation, but also in the testing and certification, and maintenance processes.”…
Acceptance of the elevator was accelerated due to a merging of the test programs between
NNS and the Naval Surface Warfare Center (NSWC), which removed redundant steps and
moved certification up by 10 days. The team has identified other areas where redundancy
can be removed to make the acceptance timelines more efficient.49
Issues Raised in December 2018 DOT&E Report
Another oversight issue for Congress concerns CVN-78 program issues raised in a December
2018 report from DOD’s Director, Operational Test and Evaluation (DOT&E)—DOT&E’s
annual report for FY2018. Regarding the CVN-78 program, the report stated the following in
part:
Assessment
• The delays in the ship development and initial trials pushed both phases of initial
operational testing until FY21 and FY22. The delay in the ship’s delivery and development
added approximately 2 years to the timeline. As noted in previous annual reports, the CVN
78 test schedule has been aggressive, and the development of EMALS [Electromagnetic
Aircraft Launch System], AAG [Advanced Arresting gear], AWE [Advanced Weapons
Elevator], DBR [Dual Band Radar], and the Integrated Warfare System delayed the ship’s
first deployment to FY22.
Reliability
• Four of CVN 78’s new systems stand out as being critical to flight operations: EMALS,
AAG, DBR, and AWEs. Overall, the poor reliability demonstrated by AAG and EMALS
and the uncertain reliability of DBR and AWEs could delay CVN 78 IOT&E [Initial
Operational Test and Evaluation]. The Navy continues to test all four of these systems in
their shipboard configurations aboard CVN 78. Reliability estimates derived from test data

49 USS Gerald R. Ford (CVN 78) Public Affairs, “USS Gerald R. Ford Accepts Second Advanced Weapons Elevator,”
Navy News Service, March 6, 2019. See also Rich Abott, “Navy To Build Land-Based Carrier Elevator Test Site,”
Defense Daily, February 21, 2019.
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for EMALS and AAG are discussed in following subsections. For DBR and AWE, only
engineering reliability estimates have been provided.
EMALS
• Testing to date involved 747 shipboard launches and demonstrated EMALS capability to
launch aircraft planned for the CVN 78 Air Wing.
• Through the first 747 shipboard launches, EMALS suffered 10 critical failures. This is
well below the requirement of 4,166 Mean Cycles Between Critical Failures, where a cycle
represents the launch of one aircraft.
• The reliability concerns are exacerbated by the fact that the crew cannot readily
electrically isolate EMALS components during flight operations due to the shared nature
of the Energy Storage Groups and Power Conversion Subsystem inverters onboard CVN
78. The process for electrically isolating equipment is time-consuming; spinning down the
EMALS motor/generators takes 1.5 hours by itself. The inability to readily electrically
isolate equipment precludes EMALS maintenance during flight operations.
AAG
• Testing to date included 763 attempted shipboard landings and demonstrated AAG
capability to recover aircraft planned for the CVN 78 air wing.
• The Program Office redesigned major components that did not meet system specifications
during land-based testing. Through the first 763 attempted shipboard landings, AAG
suffered 10 operational mission failures (which includes one failure of the barricade
system). This reliability estimate falls well below the re-baselined reliability growth curve
and well below the requirement of 16,500 Mean Cycles Between Operational Mission
Failures, where a cycle represents the recovery of one aircraft.
• The reliability concerns are magnified by the current AAG design that does not allow
electrical isolation of the Power Conditioning Subsystem equipment from high power
buses, limiting corrective maintenance on below-deck equipment during flight operations.
Combat System
• Results of SBDT [sea-based developmental testing] events indicate good SSDS [ship self-
defense system] performance in scheduling and launching simulated RAMs [Rolling
Airframe Missiles] and ESSMs [Evolved Sea Sparrow Missiles], as well as scheduling
DBR directives for ESSM acquisition and target illumination. Insufficient interoperability
testing with a CEC [Cooperative Engagement Capability] network and Link 16 prevents
an estimate of performance in this area. It is unknown if the integration problems between
SSDS and Surface Electronic Warfare Improvement Program (SEWIP) Block 2 identified
during engineering testing at Wallops Island have been resolved because SEWIP Block 2
was not installed on the ship during these SBDT events.
• CVN 78’s combat system testing on the SDTS [self-defense test ship] is at risk due to
schedule constraints, lack of funding, and insufficient planned developmental testing.
DBR
• Throughout the five CVN 78 SBDTs, DBR was plagued by extraneous false and close-
in dual tracks adversely affecting its performance.
• Integration of the DBR electronic protection capabilities remains incomplete and
unfunded. With modern threats, a lack of electronic protection places the ship in a high-
risk scenario if deployed to combat.
• The Navy analysis noted that DBR performance needs to be improved to support carrier
air traffic control center certification.
Sortie Generation Rate
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• CVN 78 is unlikely to achieve its SGR [sortie generation rate] requirement. The target
threshold is based on unrealistic assumptions including fair weather and unlimited
visibility, and that aircraft emergencies, failures of shipboard equipment, ship maneuvers,
and manning shortfalls will not affect flight operations. During the 2013 operational
assessment, DOT&E conducted an analysis of past aircraft carrier operations in major
conflicts. The analysis concludes that the CVN 78 SGR requirement is well above
historical levels.
• DOT&E plans to assess CVN 78 performance during IOT&E by comparing it to the SGR
requirement as well as to the demonstrated performance of the Nimitz-class carriers.
• Poor reliability of key systems that support sortie generation on CVN 78 could cause a
cascading series of delays during flight operations that would affect CVN 78’s ability to
generate sorties. The poor or unknown reliability of these critical subsystems represents
the most risk to the successful completion of CVN 78 IOT&E.
Manning
• Based on current expected manning, the berthing capacity for officers and enlisted will
be exceeded by approximately 100 personnel with some variability in the estimates. This
also leaves no room for extra personnel during inspections, exercises, or routine face-to-
face turnovers.
• Planned ship manning requires filling 100 percent of the billets. This is not the Navy’s
standard practice on other ships, and the personnel and training systems may not be able to
support 100 percent manning. Additionally, workload estimates for the many new
technologies such as catapults, arresting gear, radar, and weapons and aircraft elevators are
not yet well understood.
Electromagnetic Compatibility
• Developmental testing identified significant EMI [electromagnetic interference] and
radiation hazard problems. The Navy continues to characterize and develop mitigation
plans for the problems, but some operational limitations and restrictions are expected to
persist into IOT&E and deployment. The Navy will need to develop capability assessments
at differring levels of system utilization in order for commanders to make informed
decisions on system employment.
Live Fire Test & Evaluation
• The vulnerability of CVN 78’s many new critical systems to underwater threat-induced
shock is unknown. The program plans to complete shock testing on EMALS, AAG, and
the AWE components during CY19, but because of a scarcity of systems, shock testing of
DBR components lags and will likely not be completed before the FSSTs [full ship shock
trials].
• The Vulnerability Assessment Report provides an assessment of the ship’s survivability
to air-delivered threat engagements. The classified findings in the report identify the
specific equipment that most frequently would lead to mission capability loss. In FY19,
the Navy is scheduled to deliver additional report volumes that will assess vulnerability to
underwater threats and compliance with Operational Requirements Document survivability
criteria.
Recommendations
The Navy should:
1. Provide schedule, funding, and an execution strategy for assessing SGR. This strategy
should specify which testing will be accomplished live, a process for accrediting the
Seabasing/Seastrike Aviation Model for operational testing, and a method for comparing
CVN 78 performance with that of the Nimitz class.
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2. Continue to characterize the electromagnetic environment onboard CVN 78 and develop
operating procedures to maximize system effectiveness and maintain safety. As applicable,
the Navy should utilize the lessons learned from CVN 78 to inform design modifications
for CVN 79 and future carriers.
3. Develop and implement DBR electronic protection to enhance ship survivability against
modern threats.
4. Submit an updated TEMP.50
Shock Trial
Another issue for Congress is whether to conduct the shock trial for the CVN-78 class in the near
term, on the lead ship in the class, or years later, on the second ship in the class.
A shock trial, known formally as a full ship shock trial (FSST) and sometimes called a shock test,
is a test of the combat survivability of the design of a new class of ships. A shock trial involves
setting off one or more controlled underwater charges near the ship being tested, and then
measuring the ship’s response to the underwater shock caused by the explosions. The test is
intended to verify the ability of the ship’s structure and internal systems to withstand shocks
caused by enemy weapons, and to reveal any changes that need to be made to the design of the
ship’s structure or its internal systems to meet the ship’s intended survivability standard. Shock
trials are nominally to be performed on the lead ship in a new class of ships, but there have also
been cases where the shock trial for a new class was done on one of the subsequent ships in the
class.
The question of whether to conduct the shock trial for the CVN-78 class in the near term, on the
lead ship in the class, or years later, on the second ship in the class, has been a matter of
disagreement at times between the Navy and the office of the Secretary of Defense (OSD). The
Navy has wanted to perform the shock trial on the second ship in the class, because performing it
on the lead ship in the class, the Navy has argued, will cause a significant delay in the first
deployment of the lead ship, effectively delaying the return of the carrier force to an 11-ship force
level and increasing the operational strain on the other 10 carriers. The Navy has argued that the
risks of delaying the shock trial on the CVN-78 to the second ship in the class are acceptable,
because the CVN-78 class hull design is based on the Nimitz (CVN-68) class aircraft carrier hull
design, whose survivability against shocks is understood, because systems incorporated into the
CVN-78 design have been shock tested at the individual component level, and because computer
modeling can simulate how the CVN-78 design as a whole will respond to shocks.
OSD has argued that the risks of delaying the CVN-78 class shock trial to the second ship in the
class are not acceptable, because the CVN-78 design is the first new U.S. aircraft carrier design in
four decades; because the CVN-78 design has many internal design differences compared to the
CVN-68 design, including new systems not present in the CVN-68 class design; and because
computer modeling can only do so much to confirm how a complex new platform, such as an
aircraft carrier and all its internal systems, will respond to shocks. The risk of delaying the shock
trial, OSD has argued, outweighs the desire to avoid a delay in the first deployment of the lead
ship in the class. OSD in 2015 directed the Navy to plan for conducting a shock trial on the lead
ship. The Navy complied with this direction but has also sought to revisit the issue with OSD.
The issue of the shock trial for the CVN-78 class has been a matter of legislative activity—see the
provisions shown earlier in “Recent Related Legislative Provisions,” particularly the most recent

50 Department of Defense, Director, Operational Test & Evaluation, FY2018 Annual Report, December 2018, pp. 133-
134.
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such provision, Section 121(b) of the FY2018 National Defense Authorization Act (H.R.
2810/P.L. 115-91 of December 12, 2017).
An April 5, 2018, press report states the following:
The Pentagon’s No. 2 civilian has said the Navy should perform shock-testing soon to
determine how well its new $12.9 billion aircraft carrier—the costliest warship ever—
could withstand an attack, affirming the service’s recent decision to back down from a plan
for delay.
“We agree with your view that a test in normal sequence is more prudent and pragmatic,”
Deputy Defense Secretary Patrick Shanahan said in a newly released March 26 letter to
Senate Armed Services Committee Chairman John McCain. The Arizona Republican and
Senator Jack Reed, the panel’s top Democrat, pressed for the shock-testing to go ahead as
originally planned.
James Guerts, the Navy’s chiefs weapons buyer, told reporters last month that the Navy
was acquiescing to the testing after initially asking Defense Secretary James Mattis to delay
it for at least six years. In its push to maintain an 11-carrier fleet, the Navy wanted to wait
and perform the test on a second carrier in the class rather than on the USS Gerald Ford.51
Navy Study on Smaller Aircraft Carriers
Overview
Another oversight issue for Congress is whether the Navy should shift at some point from
procuring large-deck, nuclear-powered carriers like the CVN-78 class to procuring smaller
aircraft carriers. The issue has been studied periodically by the Navy and other observers over the
years. To cite one example, the Navy studied the question in deciding on the aircraft carrier
design that would follow the Nimitz (CVN-68) class.
Advocates of smaller carriers argue that they are individually less expensive to procure, that the
Navy might be able to employ competition between shipyards in their procurement (something
that the Navy cannot do with large-deck, nuclear-powered carriers like the CVN-78 class, because
only one U.S. shipyard, HII/NNS, can build aircraft carriers of that size), and that today’s aircraft
carriers concentrate much of the Navy’s striking power into a relatively small number of
expensive platforms that adversaries could focus on attacking in time of war.
Supporters of large-deck, nuclear-powered carriers argue that smaller carriers, though
individually less expensive to procure, are less cost-effective in terms of dollars spent per aircraft
embarked or aircraft sorties that can be generated, that it might be possible to use competition in
procuring certain materials and components for large-deck, nuclear-powered aircraft carriers, and
that smaller carriers, though perhaps affordable in larger numbers, would be individually less
survivable in time of war than large-deck, nuclear-powered carriers.

51 Anthony Capaccio, “Pentagon Endorses Shock-Testing Carrier After Navy Backs Down,” Bloomberg, April 5, 2018.
See also Jason Sherman and Lee Hudson, “Navy to Conduct Full Ship Shock Trials of CVN-78 in ’19 or ’20,” Inside
the Navy, March 26, 2018; Anthony Capaccio, “Navy Presses Mattis to Delay ‘Shock Testing’ Costliest Carrier,”
Bloomberg, February 7, 2018; Jason Sherman, “Lawmakers Rraise Ford-Class Carrier Cost Cap, Grant Navy Wiggle
Room to Avoid Shock Testing,” Inside the Navy, November 13, 2017.
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Navy Study Initiated in 2015
At a March 18, 2015, hearing on Navy shipbuilding programs before the Seapower subcommittee
of the Senate Armed Services Committee, the Navy testified that it had initiated a new study on
the question. At the hearing, the following exchange occurred:
SENATOR JOHN MCCAIN, CHAIRMAN, SENATE ARMED SERVICES
COMMITTEE, ATTENDING EX OFFICIO:
And you are looking at additional options to the large aircraft carrier as we know it.
SEAN STACKLEY, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH,
DEVELOPMENT,AND ACQUISITION:
We’ve initiated a study and I think you’ve discussed this with the CNO [Chief of Naval
Operations] and that’s with the frontend of that study. Yes, sir.52
Later in the hearing, the following exchange occurred:
SENATOR ROGER WICKER, CHAIRMAN, SEAPOWER SUBCOMMITTEE:
Well, Senator McCain expressed concern about competition [in Navy shipbuilding
programs]. And I think that was with, in regard to aircraft carriers.
SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH,
DEVELOPMENT,AND ACQUISITION:
Yes, Sir.
WICKER:
Would you care to respond to that?
STACKLEY:
He made a generic comment that we need competition to help control cost in our programs
and we are absolutely in agreement there. With specific regards to the aircraft carrier, we
have been asked and we are following suit to conduct a study to look at alternatives to the
Nimitz and Ford class size and type of aircraft carriers, to see if it make sense.
We've done this in the past. We're not going to simply break out prior studies, dust them
off and resubmit it. We're taking a hard look to see is there—is there a sweet spot,
something different other than today's 100,000 ton carrier that would make sense to provide
the power projection that we need, that we get today from our aircraft carriers, but at the
same time put us in a more affordable position for providing that capability.
WICKER:
OK. But right now, he's—he's made a correct factual statement with regard to the lack of
competition.
STACKLEY:
Yes, Sir. There is—yes, there is no other shipyard in the world that has the ability to
construct a Ford or a Nimitz nuclear aircraft carrier other than what we have in Newport
News and the capital investment to do that is prohibitive to set up a second source, so
obviously we are—we are content, not with the lack of competition, but we are content
with knowing that we're only going to have one builder for our aircraft carriers.53
On March 20, 2015, the Navy provided the following additional statement to the press:

52 Source: Transcript of hearing.
53 Transcript of hearing.
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As indicated in testimony, the Navy has an ongoing study to explore the possible
composition of our future large deck aviation ship force, including carriers. There is a
historical precedent for these type[s] of exploratory studies as we look for efficiencies and
ways to improve our war fighting capabilities. This study will reflect our continued
commitment to reducing costs across all platforms by matching capabilities to projected
threats and Also [sic] seeks to identify acquisition strategies that promote competition in
naval ship construction. While I can’t comment on an ongoing study, what I can tell you is
that the results will be used to inform future shipbuilding budget submissions and efforts,
beyond what is currently planned.54
Report Required by Section 128 of P.L. 114-92
Section 128 of the FY2016 National Defense Authorization Act (S. 1356/P.L. 114-92 of
November 25, 2015) states the following:
SEC. 128. Limitation on availability of funds for U.S.S. John F. Kennedy (CVN–79).
(a) Limitation.—Of the funds authorized to be appropriated by this Act or otherwise made
available for fiscal year 2016 for procurement for the U.S.S. John F. Kennedy (CVN–79),
$100,000,000 may not be obligated or expended until the date on which the Secretary of
the Navy submits to the congressional defense committees the certification under
subsection (b)(1) or the notification under paragraph (2) of such subsection, as the case
may be, and the reports under subsections (c) and (d)....
(d) Report on future development.—
(1) IN GENERAL.—Not later than April 1, 2016, the Secretary of the Navy shall submit
to the congressional defense committees a report on potential requirements, capabilities,
and alternatives for the future development of aircraft carriers that would replace or
supplement the CVN–78 class aircraft carrier.
(2) ELEMENTS.—The report under paragraph (1) shall include the following:
(A) A description of fleet, sea-based tactical aviation capability requirements for a range
of operational scenarios beginning in the 2025 timeframe.
(B) A description of alternative aircraft carrier designs that meet the requirements
described under subparagraph (A).
(C) A description of nuclear and non-nuclear propulsion options.
(D) A description of tonnage options ranging from less than 20,000 tons to greater than
100,000 tons.
(E) Requirements for unmanned systems integration from inception.
(F) Developmental, procurement, and lifecycle cost assessment of alternatives.
(G) A notional acquisition strategy for the development and construction of alternatives.
(H) A description of shipbuilding industrial base considerations and a plan to ensure
opportunity for competition among alternatives.
(I) A description of funding and timing considerations related to developing the Annual
Long-Range Plan for Construction of Naval Vessels required under section 231 of title 10,
United States Code.
The report required by Section 128(d) of P.L. 114-92, which was conducted for the Navy by the
RAND Corporation, was delivered to the congressional defense committees in classified form in

54 As printed in Sam LaGrone, “Navy Conducting Alternative Carrier Study,” USNI News, March 23, 2015.
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July 2016. An unclassified version of the report was then prepared and issued in 2017 as a
publicly released RAND report. The executive summary of that report states the following
(emphasis as in original):
We analyzed the feasibility of adopting four aircraft carrier concept variants as follow-ons
to the Ford-class carrier following USS Enterprise (CVN 80) or the as-yet-unnamed CVN
81. Among these options are two large-deck carrier platforms that would retain the
capability to launch and recover fixed-wing aircraft using an on-deck catapult and arresting
gear system and two smaller carrier platforms capable of supporting only short takeoff and
vertical landing (STVOL) aircraft. Specifically, the four concept variants are as follows:
• a follow-on variant continuing the current 100,000-ton Ford-class carrier but with two
life-of-the-ship reactors and other equipment and system changes to reduce cost (we refer
to this design concept as CVN 8X)
• a 70,000-ton USS Forrestal–size carrier with an updated flight deck and hybrid nuclear-
powered integrated propulsion plant with capability to embark the current large integrated
air wing but with reduced sortie generation capability, survivability, and endurance
compared with the Ford class (we refer to this design concept as CVN LX)
• a 43,000-ton variant of the USS America–class, fossil fuel–powered and arranged to
support only STOVL operations but at a higher tempo than the current LHA 6 (USS
America) (we refer to this design concept as CV LX). This variant would incorporate the
larger ship’s beam excursion the Navy examined in the LHA 8–class flight 1 studies.
• a 20,000-ton variant that will resemble escort carriers that some allied navies currently
operate (we refer to this design concept as CV EX). Similar to the 43,000-ton variant, it
will be conventionally powered and will operate STOVL aircraft....
Our analyses of the carrier variants illuminated capability shortfalls in some instances. Our
overall findings are as follows:
• The CVN 8X, the descoped Ford-class carrier, offers similar warfighting capability to
that of the Ford-class carrier today. There might be opportunities to reduce costs by
eliminating costly features that only marginally improve capability, but similar tradeoffs
are likely to be made in the current program as well.
• The CVN LX concept variant offers an integrated, current air wing with capabilities near
current levels but with less organic mission endurance for weapons and aviation fuel. It
will not generate the same SGR as the Ford-class carrier, but this is not a significant
limitation for stressing warfighting scenarios. It will be less survivable in some
environments and have less redundancy than the Ford program-of-record ship, and these
factors might drive different operation concepts. Although we do not characterize the
impact of decreased survivability, this is an important limitation that will have to be
weighed against the potential cost savings. The major means of reducing cost is through
engineering redundancy, speed, and air wing fuel capacity, and these could affect mobility
and theater closure.
• The concept variant CV LX, which is a version of the LHA 6 platforms, might be a low-
risk, alternative pathway for the Navy to reduce carrier costs if such a variant were procured
in greater numbers than the current carrier shipbuilding plan; our analysis suggests a two-
to-one replacement. Over the long term, however, as the current carrier force is retired, the
CV LX would not be a viable option for the eventual carrier force unless displaced
capabilities were reassigned to new aircraft or platforms in the joint force, which would be
costly. This platform would be feasible for a subset of carrier missions but, even for those
missions, could require an increase in the number of platforms. This concept variant might,
if procured in sufficient numbers, eventually enable the Navy to reduce the number of Ford-
class carriers in the overall force structure, but more-extensive analysis of missions,
operations, and basing of such a variant and the supported air combat element is required.
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• The smallest concept variants reviewed, the CV EX 20,000-ton sea-based platforms, do
not provide either a significant capacity or an integrated air wing and, thus, force reliance
on other legacy platforms or land-based assets to provide key elements of capability—in
particular, AEW. As a result, this concept variant is not really a replacement for current
aircraft carrier capability and would require other platforms, aircraft, weapons, and
capabilities in the joint force. These platforms would be a viable pathway only in broad
fleet architecture transformation providing a narrow mission set, perhaps regionally, and
would require extensive analysis. Given that such a concept variant is not a viable
replacement for an aircraft carrier, such analysis would be required to see whether any
adjustment on the current aircraft carrier program would be feasible....
The overall results of our cost comparison are as follows:
• The descoped Ford-class carrier, the CVN 8X, might generate fewer sorties than the
current key performance parameter values for the Ford class and might have only
incremental reduction in overall platform cost. The analysis examining cost reduction with
transition to a life-of-the-ship reactor, such that being done on submarine programs, does
not appear to be cost effective. Between the developmental costs and a reduced service life,
there is little cost advantage in this variant.
• The CVN LX concept would allow considerable savings across the ship’s service life and
appears to be a viable alternative to consider for further concept exploration. Construction
costs would be lower; design changes and life-cycle costs would reflect the lessons already
applied in the Ford class. The reliance on hybrid drive with fewer mechanical parts than
legacy platforms is likely to further reduce maintenance cost. However, CVN LX would
be a new design that would require a significant investment in nonrecurring engineering in
the near term to allow timely delivery in the 2030s.
• CV LX, although it requires a larger force structure to maintain air capabilities, might
still reduce overall construction costs if large carrier numbers were reduced. But, as
described in the report, reducing carrier numbers with the resulting loss of capability
should not be pursued without extensive further analysis for all displaced missions in the
joint force execution of warfighting scenarios and, potentially, regional basing and
narrowly focused missions for these platforms. Any cost savings would likely be offset to
an unknown degree by requirements for additional systems to mitigate loss of capability
associated with this variant.
• CV EX, the smallest variant, is not a practical variant at all without considerable revision
of the Navy warfighting concept of operations. Although the same is to a degree true with
CV LX, the impact of an even larger number of low-sortie ships with small and limited air
wings is even more pronounced with this variant. CV EX has all of the shortfalls of CV
LX and will pose even greater issues of mutual support and logistics sustainment....
Conclusions
Our analysis points to potential options for replacing the Nimitz-class carrier as these ships
reach expected service life that have lower procurement costs than the Ford-class carriers.
However, most of these options come with reduced capability that might require changes
in the concept of operations to deliver sea-based aircraft capability comparable to that of
carriers in the fleet today. If a new platform is introduced in the mid-2030s, the Navy’s
force structure will still contain a large legacy force of Nimitz- and Ford-class carriers, at
least until the mid-2050 time frame, which might lower the risks of introducing a new
carrier for some period of time. But, ultimately, if a new carrier variant is selected, it will
define the carrier force and constitute the supported capability available to the Navy.
Capability shortfalls can be mitigated, to some degree, with changes in operational
concepts or by adding additional platforms to the force structure—which introduces
additional cost that might offset anticipated cost savings. In addition, if the Navy stops
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procuring large-deck nuclear carriers, the ability to reconstitute the industrial base at some
time in the future comes with substantial risk.
Although SGR [sortie generation rate] was a central variable in comparing the carrier
variants, our analysis suggests that there is room to make trade-offs in aircraft sortie rate
capacity between the Ford-class carrier and a lower-cost platform. However, it is important
to consider that, whatever threats complicate carrier operations, they might even more
significantly affect land-based tactical air operations. Carriers can move; have defensive
support from escorts; can readily replenish; and might, in fact, be more survivable than
their land-based counterparts. This is an important factor for Congress and the Department
of Defense to consider before a trade-off is made to give up the supported air wing sortie
generation capacity in the overall sea-based force.55
The question of whether to shift to smaller aircraft carriers was also addressed in three studies on
future fleet architecture that were required by Section 1067 of the FY2016 National Defense
Authorization Act (S. 1356/P.L. 114-92 of November 25, 2015). These three studies are discussed
in more detail in another CRS report.56
February 2019 Press Report
A February 15, 2019, press report stated the following:
Under Secretary of the Navy Thomas Modly said now that the Navy found a way to build
two new Gerald R. Ford-class aircraft carriers while saving money it is starting to look at
future carrier procurement, which might be very different.…
Modly said Secretary of the Navy Richard Spencer sees $13 billion carriers as not
sustainable going forward and the service will be looking at ways to further reduce costs
or keep the carrier capabilities more affordable in future ship procurements.
“There was general conclusion that those two for sure would be built” and once that was
determined “that was going to happen,” Modly said during the AFCEA West 2019
conference here [in San Diego].…
After the CVN-80 and -81 [procurement] decision was made, “I think a lot of derivative
decisions still need to be made. So the secretary [Spencer] would like to take a look at
‘O.K. now that we made that decision, and that second one that comes will be in quite a
few years from now, we need to start thinking now about what’s the next one look like.’”
Modly told reporters they are asking questions like “Is it going to be advanced as this one?
Or is it going to be smaller or are we going to buy two smaller ones or maybe shift air
power to other forms of delivery. And we don’t know the answers of that but we’re looking
at this.”57
Legislative Activity for FY2019
July 11, 2018, Reprogramming Request
In addition to congressional action on the FY2019 funding request for the CVN-78 program
discussed below, a DOD reprogramming request dated July 11, 2018, requested that $62.7 million

55 Bradley Martin and Michael McMahon, Future Aircraft Carrier Options, Santa Monica, CA, RAND Corporation,
2017, pp. xi-xviii. The report was provided by Navy Office of Legislative Affairs to CRS and CBO on October 2, 2017.
56 See CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by
Ronald O'Rourke.
57 Rich Abott, “Navy Starts Looking At Carriers After CVN-81,” Defense Daily, February 15, 2019.
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be reprogrammed to the CVN-78 program to cover cost growth on CVN-78. The $62.7 million
includes
 $12.7 million for “re-baselining the Advanced Weapons Elevator program to
address continuing technical difficulties”;
 $30.0 million for “engineering, tooling, and repair of Main Thrust Bearings” in
the ship’s propulsion train;
 $11.0 million for “emergent technical issues and correction of deficiencies
identified during operational testing and extension of the Post-Shakedown
Availability [PSA] duration to accomplish required scope and repair of the
propulsion train components”; and
 $9.0 million “to cover the increase cost of deferred work, labor and material.”
The $62.7 million would be reprogrammed from FY2011 procurement funding for the DDG-51
destroyer program.58
Summary of Congressional Action on FY2019 Funding Request
Table 4 summarizes congressional action on the FY2019 procurement and advance procurement
funding request for the CVN-78 program.
Table 4. Congressional Action on FY2019 Funding Request
Millions of dollars, rounded to nearest tenth.
Authorization
Appropriation

Request
HASC
SASC
Conf.
HAC
SAC
Conf.
Procurement
1,598.2
1,549.1
1,598.2
1,598.2
1,598.2
1,573.2
1,573.2
Source: Table prepared by CRS based on Navy’s FY2019 budget submission, committee and conference
reports, and explanatory statements on FY2018 National Defense Authorization Act and FY2019 DOD
Appropriations Act.
Notes: HASC is House Armed Services Committee; SASC is Senate Armed Services Committee; HAC is
House Appropriations Committee; SAC is Senate Appropriations Committee; Conf. is conference agreement.
National Defense Authorization Act for Fiscal Year 2019/John S.
McCain National Defense Authorization Act for Fiscal Year 2019
(H.R. 5515/S. 2987/P.L. 115-232)
House Committee Report
The House Armed Services Committee, in its report (H.Rept. 115-676 of May 15, 2018) on H.R.
5515, recommended the funding level for the CVN-78 program shown in the HASC column of

58 See page 85 of 85 (i.e., the final page) of the reprogramming request. The document was posted by
InsideDefense.com (subscription required) on July 16, 2018. See also David B. Larter, “US Navy Asks Congress to
Shift Millions of Dollars to Fix High-Tech Supercarrier,” Defense News, July 18, 2018; Jason Sherman, “Pentagon
Seeks Additional Funding for CVN-78, Breaching Current Statutory Cost Cap,” Inside Defense (Daily News), July 19,
2018.
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Table 4. The recommended reduction of $49.1 million is for “Excess change order rate.” (Page
344)
Section 121 of H.R. 5515 as reported by the committee states the following:
SEC. 121. Increase in number of operational aircraft carriers of the Navy.
(a) Findings.—Congress finds the following:
(1) The aircraft carrier can fulfill the Navy’s core missions of forward presence, sea control,
ensuring safe sea lanes, and power projection as well as providing flexibility and versatility
to execute a wide range of additional missions.
(2) Forward airpower is integral to the security and joint forces operations of the United
States. Carriers play a central role in delivering forward airpower from sovereign territory
of the United States in both permissive and nonpermissive environments.
(3) Aircraft carriers provide our Nation the ability to rapidly and decisively respond to
national threats, as well as conducting worldwide, on-station diplomacy and providing
deterrence against threats to the United States allies, partners, and friends.
(4) Since the end of the cold war, aircraft carrier deployments have increased while the
aircraft carrier force structure has declined.
(5) Considering the increased array of complex threats across the globe, the Navy aircraft
carrier is operating at maximum capacity, increasing deployment lengths and decreasing
maintenance periods in order to meet operational requirements.
(6) To meet global peacetime and wartime requirements, the Navy has indicated a
requirement to maintain two aircraft carriers deployed overseas and have three additional
aircraft carriers capable of deploying within 90 days. However, the Navy has indicated that
the existing aircraft carrier force structure cannot support these military requirements.
(7) Despite the requirement to maintain an aircraft carrier strike group in both the United
States Central Command and the United States Pacific Command, the Navy has been
unable to generate sufficient capacity to support combatant commanders and has developed
significant carrier gaps in these critical areas.
(8) Because of the continuing use of a diminished aircraft carrier force structure, extensive
maintenance availabilities result which typically exceed program costs and increase time
in shipyards. These expansive maintenance availabilities exacerbate existing carrier gaps.
(9) Developing an alternative design to the Ford-class aircraft carrier is not cost beneficial.
A smaller design is projected to incur significant design and engineering cost while
significantly reducing magazine size, carrier air wing size, sortie rate, and on-station
effectiveness, among other vital factors, as compared to the Ford-class. Furthermore, a new
design will delay the introduction of future aircraft carriers, exacerbating existing carrier
gaps and threatening the national security of the United States.
(10) The 2016 Navy Force Structure Assessment states “A minimum of 12 aircraft carriers
are required to meet the increased warfighting response requirements of the Defense
Planning Guidance Defeat/Deny force sizing direction.”.
(b) Sense of congress.—It is the sense of Congress that—
(1) the United States should expedite delivery of 12 aircraft carriers; and
(2) an aircraft carrier should be authorized every three years.
(c) Increase in number of operational aircraft carriers of the navy.—
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(1) INCREASE.—Section 5062(b) of title 10, United States Code,59 is amended by striking
“11 operational aircraft carriers” and inserting “12 operational aircraft carriers”.
(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall take effect on
September 30, 2022.
Section 122 of H.R. 5515 as reported by the committee states the following:
SEC. 122. Procurement authority for Ford class aircraft carrier program.
(a) Contract authority.—
(1) PROCUREMENT AUTHORIZED.—The Secretary of the Navy may enter into one or
more contracts, beginning with the fiscal year 2019 program year, for the procurement of
one Ford class aircraft carrier to be designated CVN–81.
(2) PROCUREMENT IN CONJUNCTION WITH CVN–80.—The aircraft carrier
authorized to be procured under subsection (a) may be procured as an addition to the
contract covering the Ford class aircraft carrier designated CVN–80 that is authorized to
be constructed under section 121 of the John Warner National Defense Authorization Act
for Fiscal Year 2007 (Public Law 109–364; 120 Stat. 2104).
(b) Use of incremental funding.—With respect to a contract entered into under subsection
(a), the Secretary of the Navy may use incremental funding to make payments under the
contract.
(c) Liability.—A contract entered into under subsection (a) shall provide that the total
liability to the Government for termination of the contract entered into shall be limited to
the total amount of funding obligated at the time of termination.
(d) Condition for out-year contract payments.—A contract entered into under subsection
(a) shall provide that any obligation of the United States to make a payment under the
contract for a fiscal year is subject to the availability of appropriations for that purpose for
such fiscal year.
Section 123 of H.R. 5515 as reported by the committee states the following:
SEC. 123. Full ship shock trial for Ford class aircraft carrier.
The Secretary of the Navy shall ensure that full ship shock trials results are incorporated
into the construction of the Ford class aircraft carrier designated CVN–81.
Section 220 of H.R. 5515 as reported by the committee states the following:
SEC. 220. Modification of CVN–73 to support fielding of MQ–25 unmanned aerial
vehicle.
The Secretary of the Navy shall ensure that the aircraft carrier designated CVN–73 is
modified to support the fielding of the MQ–25 unmanned aerial vehicle before the date on
which the refueling and complex overhaul of the aircraft carrier is completed.
Section 1024(c)(2) of H.R. 5515 as reported by the committee states the following:
(2) MODIFICATION OF ADVANCE PROCUREMENT FUNDING.—Section 124 of the
National Defense Authorization Act for Fiscal Year 2010 (Public Law 111–84; 123 Stat.
2214; 10 U.S.C. 7291 note) is amended—

59 As noted earlier, 10 U.S.C. 5062 was renumbered as 10 U.S.C. 8062 by Section 807 of the John S. McCain National
Defense Authorization Act for Fiscal Year 2019 (H.R. 5515/P.L. 115-232 of August 13, 2018), which directed a
renumbering of sections and titles of Title 10 relating to the Navy and Marine Corps. (Sections 806 and 808 of P.L.
115-232 directed a similar renumbering of sections and titles relating to the Air Force and Army, respectively.)
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(A) by striking subsection (a); and
(B) by redesignating subsections (b) and (c) as subsections (a) and (b), respectively.60
H.Rept. 115-676 states the following:
Nimitz-class aircraft carrier service life extension
In December 2016, the Secretary of the Navy determined that a 355-ship Navy is required
to support force structure demands. A part of this force structure requirement is a power
projection requirement of 12 aircraft carriers. With the delivery of the USS John F.
Kennedy (CVN 79) in 2023, the Navy will reach their 12 aircraft carrier goal but will
quickly lose this overall capacity with the programmed retirement of USS Nimitz (CVN
68) in fiscal year 2023.
The committee believes that there are several options to retain required aircraft carrier force
structure to include accelerating construction of the Ford-class carriers. Additionally, the
committee believes that service life extension options may be available for USS Nimitz.
Therefore, the committee directs the Secretary of the Navy to provide a briefing to the
House Committee on Armed Services by March 1, 2019, on options that exist to extend
the service life of USS Nimitz, to include the extension of major components. Additionally,
such a briefing should include cost estimates and major modernization components. (Pages
17-18)
H.Rept. 115-676 also states the following:
Carrier Presence in the Middle East
The committee recognizes the importance of maintaining an aircraft carrier strike group in
the U.S. Central Command (CENTCOM) area of operations to deter the Islamic Republic
of Iran, support ongoing missions in the Republic of Iraq, the Syrian Arab Republic, and
the Islamic Republic of Afghanistan, provide assurance to regional partners, and maintain
the capacity to flexibly respond to a variety of crises across the volatile region. The Navy
currently struggles to meet combatant commander presence requirements in CENTCOM
and a recent gap in carrier presence there temporarily limited CENTCOM’s capacity to
address these security challenges. In an effort to more quickly reach the requirement for 12

60 Section 124 of the FY2010 National Defense Authorization Act (H.R. 2647/P.L. 111-84 of October 28, 2009) states
the following:
SEC. 124. ADVANCE PROCUREMENT FUNDING.
(a) Advance Procurement.--With respect to a naval vessel for which amounts are authorized to be
appropriated or otherwise made available for fiscal year 2010 or any fiscal year thereafter for
advance procurement in shipbuilding and conversion, Navy, the Secretary of the Navy may enter
into a contract, in advance of a contract for construction of any vessel, for any of the following:
(1) Components, parts, or materiel.
(2) Production planning and other related support services that reduce the overall procurement lead
time of such vessel.
(b) Aircraft Carrier Designated CVN-79.--With respect to components of the aircraft carrier
designated CVN-79 for which amounts are authorized to be appropriated or otherwise made
available for fiscal year 2010 or any fiscal year thereafter for advance procurement in shipbuilding
and conversion, Navy, the Secretary of the Navy may enter into a contract for the advance
construction of such components if the Secretary determines that cost savings, construction
efficiencies, or workforce stability may be achieved for such aircraft carrier through the use of such
contract.
(c) Condition of Out-year Contract Payments.--A contract entered into under subsection (b) shall
provide that any obligation of the United States to make a payment under such contract for any
fiscal year after fiscal year 2010 is subject to the availability of appropriations for that purpose for
such fiscal year.
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aircraft carriers identified in the most recent Force Structure Assessment and to achieve
greater cost savings, the committee authorized an acceleration of the next Ford-class
aircraft carrier designated CVN–81 in fiscal year 2019. The committee also recommends
that the Navy assess options to extend the service life of USS Nimitz (CVN 68) to mitigate
potential gaps, which could affect CENTCOM’s regional force presence. (Pages 194-195)
A May 22, 2018, statement of Administration policy on H.R. 5515 states the following:
The Administration appreciates the Committee’s support for increasing the size of the fleet
and shares the Committee’s desire to increase our submarine and carrier force. However,
the Administration objects to specific provisions which may inadvertently restrict the
ability to invest in our fleet in a responsible and sustainable manner. For instance.... section
122(b) provides incremental funding authority over an indefinite period for CVN-81 as
well as CVN-80, which is inconsistent with acquisition best practices. Additionally, section
121 increases the requirement for operational aircraft carriers from 11 to 12, which may
not be sustainable within the Navy’s current topline. The Administration looks forward to
working with Congress to determine the most cost-effective and fiscally responsible path
forward to deliver the Navy the Nation needs.61
House Floor Action
On May 24, 2018, as part of its consideration of H.R. 5515, the House agreed to by voice vote
H.Amdt. 659, an en bloc amendment that included, inter alia, amendment number 156 as printed
in H.Rept. 115-702 of May 22, 2018, on H.Res. 908, providing for the further consideration of
H.R. 5515. Amendment number 156 added the following section to H.R. 5515:
SEC. 338. Report on relocation of steam turbine production from Nimitz-class and Ford-
class aircraft carriers, and Virginia-class and Columbia-class submarines.
Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense,
in consultation with the Under Secretary of Defense for Acquisition, Technology, and
Logistics, and Assistant Secretary of the Navy for Research, Development and Acquisition,
shall develop and submit to Congress a report describing the potential impacts on national
defense and the manufacturing base resulting from contractors or subcontracts relocating
steam turbine production for Nimitz-class and Ford-class aircraft carriers, and Virginia-
class and Columbia-class submarines. Such report shall address each of the following:
(1) The overall risk of moving production on our national security including likelihood of
production delay or reduction in quality of steam turbines.
(2) The impact on natural security from a delay in production of aircraft carriers and
submarines.
(3) The impacts on regional suppliers the current production of steam turbines draw on and
their ability to perform other contracts should a relocation happen.
(4) The impact on the national industrial and manufacturing base and loss of a critically
skilled workforce resulting from a relocation of production.
(5) The risk of moving production on total cost of the acquisition.

61 Executive Office of the President, Statement of Administration Policy, H.R. 5515—National Defense Authorization
Act for Fiscal Year 2019, May 22, 2018, p. 3.
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Senate
The Senate Armed Services Committee, in its report (S.Rept. 115-262 of June 5, 2018) on S.
2987, recommended the funding level for the CVN-78 program shown in the SASC column of
Table 4.
Section 127 of S. 2987 as reported states the following:
SEC. 127. Nuclear refueling of aircraft carriers.
(a) Authorization To procure nuclear refueling materials.—Pursuant to section 7314a of
title 10, United States Code, as added by section 1014 of this Act, the Secretary of the Navy
may procure naval nuclear reactor power units and associated reactor components for the
following aircraft carriers:
(1) U.S.S. John C. Stennis (CVN–74).
(2) U.S.S. Harry S. Truman (CVN–75).
(3) U.S.S. Ronald Reagan (CVN–76).
(4) U.S.S. George H.W. Bush (CVN–77).
(b) Condition for out-year payments.—Any contract entered into under subsection (a) shall
provide that any obligation of the United States to make a payment under the contract for
a fiscal year after fiscal year 2019 is subject to availability of appropriations for that
purpose for that later fiscal year.
Regarding Section 127, S.Rept. 115-262 states the following:
Nuclear refueling of aircraft carriers (sec. 127)
The committee recommends a provision that would authorize the procurement of naval
nuclear reactor power units and associated reactor components for the nuclear refueling of
the following aircraft carriers: USS John C. Stennis (CVN–74), USS Harry S. Truman
(CVN–75), USS Ronald Reagan (CVN–76), and USS George H.W. Bush (CVN–77).
The committee notes that the procurement lead time for some nuclear components required
to conduct a nuclear refueling precedes the authorization for the associated aircraft carrier
refueling by several years.
Accordingly, pursuant to section 7314a of title 10, United States Code, as added by section
1014 of this Act [see discussion below], in order to maintain appropriate oversight of
program execution of the nuclear refueling of aircraft carriers, the committee recommends
the authorizations contained in this provision. (Page 10)
Section 1014 of S. 2987 as reported states the following:
SEC. 1014. Specific authorization requirement for nuclear refueling of aircraft carriers.
(a) In general.—Chapter 633 of title 10, United States Code, is amended by inserting after
section 7314 the following new section:
“§ 7314a. Nuclear refueling of aircraft carriers: specific authorization required
“Funds may not be obligated or expended for the procurement of a naval nuclear reactor
power unit or associated reactor components for the nuclear refueling of an aircraft carrier
unless such refueling is specifically authorized, by ship name and hull number, by statute.”.
(b) Clerical amendment.—The table of sections at the beginning of chapter 633 of such
title is amended by inserting after the item relating to section 7314 the following new item:
“7314a. Nuclear refueling of aircraft carriers: specific authorization required.”.
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Regarding Section 1014, S.Rept. 115-262 states the following:
Specific authorization requirement for nuclear refueling of aircraft carriers (sec.
1014)
The committee recommends a provision that would require a specific authorization by
statute before funds may be obligated or expended for the procurement of a naval nuclear
reactor power unit or associated reactor components for the nuclear refueling of an aircraft
carrier.
The committee notes that the procurement lead time for some nuclear components required
to conduct a nuclear refueling precedes the authorization for the associated aircraft carrier
refueling by several years.
Accordingly, in order to maintain appropriate oversight of program execution, the
committee believes that the Department of Defense should obtain a specific authorization
for such nuclear components. (Page 261)
Section 1015 of S. 2987 as reported states the following:
SEC. 1015. Dismantlement and disposal of nuclear-powered aircraft carriers.
(a) In general.—Chapter 633 of title 10, United States Code, is amended by adding at the
end the following new section:
“§ 7320. Nuclear-powered aircraft carriers: dismantlement and disposal
“(a) In general.—Not less than 90 days before the award of a contract for the dismantlement
and disposal of a nuclear-powered aircraft carrier, or the provision of funds to a naval
shipyard for the dismantlement and disposal of a nuclear-powered aircraft carrier, the
Secretary of the Navy shall submit to the congressional defense committees a report setting
forth the following:
“(1) A cost and schedule baseline for the dismantlement and disposal approved by the
service acquisition executive of the Department of the Navy and the Chief of Naval
Operations.
“(2) An independent cost estimate of the dismantlement and disposal prepared by the
Office of Cost Analysis and Program Evaluation.
“(3) A description of the regulatory framework applicable to the management of
radioactive materials in connection with the dismantlement and disposal, including, in
cases in which the Navy intends to have another government entity serve as the regulatory
enforcement authority—
“(A) a certification from that entity of its agreement to serve as the regulatory enforcement
authority; and
“(B) a description of the legal basis for the authority of that entity to serve as the regulatory
enforcement authority.
“(b) Supplemental information with budgets.—In the materials submitted to Congress by
the Secretary of Defense in support of the budget of the President for a fiscal year (as
submitted to Congress under section 1105(a) of title 31), the Secretary of the Navy shall
include information on each dismantlement and disposal of a nuclear-powered aircraft
carrier occurring or planned to occur during the period of the future-years defense program
submitted to Congress with that budget. Such information shall include, by ship concerned,
the following:
“(1) A summary of activities and significant developments in connection with such
dismantlement and disposal.
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“(2) If applicable, a detailed description of cost and schedule performance against the
baseline for such dismantlement and disposal established pursuant to subsection (a),
including a description of and explanation for any variance from such baseline.
“(3) A description of the amounts requested, or intended or estimated to be requested, for
such dismantlement and disposal for each of the following:
“(A) Each fiscal year covered by the future-years defense program.
“(B) Any fiscal years before the fiscal years covered by the future-years defense program.
“(C) Any fiscal years after the end of the period of the future-years defense program.
“(c) Future-years defense program defined.—In this section, the term ‘future-years defense
program’ means the future-years defense program required by section 221 of this title.”.
(b) Clerical amendment.—The table of sections at the beginning of chapter 633 of such
title is amended by adding at the end the following new item:
“7320. Nuclear-powered aircraft carriers; dismantlement and disposal.”.
Regarding Section 1015, S.Rept. 115-262 states the following:
Dismantlement and disposal of nuclear-powered aircraft carriers (sec. 1015)
The committee recommends a provision that would require a report be submitted to the
congressional defense committees prior to awarding a contract for dismantlement and
disposal of a nuclear-powered aircraft carrier or providing funding to a naval shipyard for
dismantlement and disposal of a nuclear-powered aircraft carrier.
The provision would also require additional information be provided on the dismantlement
and disposal of nuclear-powered aircraft carriers with the materials submitted to the
Congress by the Secretary of Defense in support of the budget of the President for each
fiscal year.
The committee notes that in response to the Senate report accompanying S. 1519 (S. Rept.
115–125) of the National Defense Authorization Act for Fiscal Year 2018 (Public Law
115–91) the U.S. Government Accountability Office (GAO) has briefed the committee on
the Navy’s considerations for the dismantlement and disposal of the ex-USS Enterprise
nuclear-powered aircraft carrier.
The committee further notes GAO’s preliminary analysis indicates that the anticipated cost
and schedule for dismantlement and disposal of the Navy’s nuclear-powered aircraft
carriers are comparable to large Department of Defense (DOD) acquisition programs,
which have structured oversight to support transparency and accountability; however, ship
dismantlement and disposal has no specific reporting requirements under DOD or Navy
policy.
The committee believes information provided on dismantlement and disposal as part of
annual budget requests currently lacks sufficient detail to inform oversight of ship-specific
activities. As the Navy has yet to dismantle and dispose of a nuclear-powered aircraft
carrier, the committee further believes establishing formal requirements will set a
precedent to enable sufficient oversight for these large-scale dismantlement and disposal
efforts. (Pages 261-262)
S.Rept. 115-262 also states the following:
Aircraft carrier acquisition
The Department of Defense has been able to achieve program efficiencies and cost-savings
by using multiyear and block buy contracting with many weapons programs, to include
shipbuilding. Section 2306b of title 10, United States Code, sets forth criteria for requesting
and evaluating multiyear contracting proposals. Although similar criteria for block buy
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authorities are not codified, the committee expects the Department to conduct rigorous
analysis of proposals and provide that analysis to the Congress, and that the Department’s
analysis will show a sound business case with substantial savings from committing the
government to a longer term contract.
Earlier this year, the Navy issued a request for proposal soliciting information on a potential
block buy to acquire two Ford-class aircraft carriers (CVN–80 and CVN–81). The
committee will review any information that the Navy provides related to such an approach
as consideration of the National Defense Authorization Act for Fiscal Year 2019 continues.
(Pages 39-40)
S.Rept. 115-262 also states the following:
Ford-class sustainment and product support
The committee notes that with the delivery of the USS Gerald R. Ford (CVN–78) in May
2017, sustainment and product support of this new class of aircraft carriers will be critical
to mission effectiveness and operational availability. As the Ford-class program continues
with testing and delivery of additional aircraft carriers, the committee believes life cycle
sustainment planning must be properly funded to maintain hull, mechanical, electrical, and
combat systems to the class’ 50-year service life.
Accordingly, the committee is concerned that the budget request included no funding for
maintaining Electromagnetic Aircraft Launch System software. The committee urges the
Navy to plan for and appropriately fund sustainment and product support for Ford-class
aircraft carriers, particularly systems critical to mission accomplishment. (Page 44)
S.Rept. 115-262 also states the following:
Nimitz-class aircraft carrier service life assessment
The committee notes that the first Nimitz-class aircraft carrier, USS Nimitz (CVN–68) is
planned to decommission in fiscal year 2025 at its expected service life of 50 years of
service. The committee further notes that the Navy has extended the service lives of many
ship classes, including Ohio-class nuclear-powered ballistic missile submarines from 30
years to 42 years. Recognizing the policy of the United States to achieve a 355-ship Navy
includes 12 aircraft carriers, the committee is interested in better understanding the
technical and engineering feasibility of extending Nimitz-class aircraft carriers beyond the
class’ 50-year planned service life.
Therefore, the committee directs the Secretary of the Navy to submit a report to the
congressional defense committees not later than January 1, 2019, on the options to extend
the service lives of Nimitz-class aircraft carriers. This report shall include each of the
following: (1) The technical and engineering feasibility of extending the service life of
each Nimitz-class aircraft carrier; (2) The duration of such service life extensions; (3)
Notional cost and schedule estimates for Nimitz-class aircraft carrier service life
extensions; (4) Public or private shipyard availability to accomplish such service life
extensions; and (5) An assessment by the Secretary on the merits of implementing such
options. (Page 277)
Conference
The conference report (H.Rept. 115-874 of July 25, 2018) on H.R. 5515/P.L. 115-232 of August
13, 2018, recommended the funding level for the CVN-78 program in the authorization
conference column of Table 4.
Section 121 of H.R. 5515 states the following:
SEC. 121. PROCUREMENT AUTHORITY FOR FORD CLASS AIRCRAFT CARRIER
PROGRAM.
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(a) CONTRACT AUTHORITY.—
(1) PROCUREMENT AUTHORIZED.—The Secretary of the Navy may enter into one or
more contracts, beginning with the fiscal year 2019 program year, for the procurement of
one Ford class aircraft carrier to be designated CVN–81.
(2) PROCUREMENT IN CONJUNCTION WITH CVN–80.—The aircraft carrier
authorized to be procured under paragraph (1) may be procured as an addition to the
contract covering the Ford class aircraft carrier designated CVN–80 that is authorized to
be constructed under section 121 of the John Warner National Defense Authorization Act
for Fiscal Year 2007 (Public Law 109–364; 120 Stat. 2104).
(b) CERTIFICATION REQUIRED.—A contract may not be entered into under subsection
(a) unless the Secretary of Defense certifies to the congressional defense committees, in
writing, not later than 30 days before entry into the contract, each of the following, which
shall be prepared by the milestone decision authority for the Ford class aircraft carrier
program:
(1) The use of such a contract will result in significant savings compared to the total
anticipated costs of carrying out the program through annual contracts. In certifying cost
savings under the preceding sentence, the Secretary shall include a written explanation
of—
(A) the estimated obligations and expenditures by fiscal year for CVN–80 and CVN–81,
by hull, without the authority provided in subsection (a);
(B) the estimated obligations and expenditures by fiscal year for CVN–80 and CVN–81,
by hull, with the authority provided in subsection (a);
(C) the estimated cost savings or increase by fiscal year for CVN–80 and CVN–81, by hull,
with the authority provided in subsection (a);
(D) the discrete actions that will accomplish such cost savings or avoidance; and
(E) the contractual actions that will ensure the estimated cost savings are realized.
(2) There is a reasonable expectation that throughout the contemplated contract period the
Secretary of Defense will request funding for the contract at the level required to avoid
contract cancellation.
(3) There is a stable design for the property to be acquired and that the technical risks
associated with such property are not excessive.
(4) The estimates of both the cost of the contract and the anticipated cost avoidance through
the use of a contract authorized under subsection (a) are realistic.
(5) The use of such a contract will promote the national security of the United States.
(6) During the fiscal year in which such contract is to be awarded, sufficient funds will be
available to perform the contract in such fiscal year, and the future-years defense program
(as defined under section 221 of title 10, United States Code) for such fiscal year will
include the funding required to execute the program without cancellation.
(7) The contract will be a fixed price type contract.
(c) USE OF INCREMENTAL FUNDING.—With respect to a contract entered into under
subsection (a), the Secretary of the Navy may use incremental funding to make payments
under the contract. No such payments may be obligated after the date that is 11 months
after the date on which the fitting out of the aircraft carrier associated with the contract is
completed.
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(d) LIABILITY.—A contract entered into under subsection (a) shall provide that the total
liability to the Government for termination of the contract entered into shall be limited to
the total amount of funding obligated at the time of termination.
(e) CONDITION FOR OUT-YEAR CONTRACT PAYMENTS.—A contract entered into
under subsection (a) shall provide that any obligation of the United States to make a
payment under the contract for a fiscal year is subject to the availability of appropriations
for that purpose for such fiscal year.
(f) MILESTONE DECISION AUTHORITY DEFINED.—In this section, the term
‘‘milestone decision authority’’ has the meaning given that term in section 2366a(d) of title
10, United States Code.
Regarding Section 121, H.Rept. 115-874 states the following:
Procurement authority for Ford-class aircraft carrier program (sec. 121)
The House bill contained a provision (sec. 122) that would authorize the construction of
one Ford-class aircraft carrier designated CVN–81.
The Senate amendment contained no similar provision.
The Senate recedes with an amendment that would require a certification prior to awarding
a contract authorized by this provision. The conferees note that the Department of Defense
has been able to achieve program efficiencies and cost savings by using multiyear and
block buy contracting with many weapons programs, to include shipbuilding. If the
Department of the Navy intends to pursue a two-ship procurement of CVN–80 and CVN–
81 outside the title 10, United States Code, parameters for a multiyear contract, the
conferees expect that entering into such contract would be based on rigorous analysis with
a sound business case and substantial savings.
Earlier this year, the Navy issued a request for proposal soliciting information on a potential
contract to acquire two Ford-class aircraft carriers (CVN–80 and CVN–81). The conferees
are disappointed that no related information was provided to the congressional defense
committees to enable fulsome consideration of the associated required legislative
authorities during the development of the National Defense Authorization Act for Fiscal
Year 2019.
Nonetheless, the conferees believe a two-ship procurement of CVN–80 and CVN–81 could
result in significant cost savings. Accordingly, this provision would provide the necessary
authorities for implementing such an approach, if the Secretary of Defense certifies
supporting analysis prepared and provided by the milestone decision authority for the
carrier replacement program, which is the Department of the Navy Service Acquisition
Executive.
It is the conferees’ intent that the Secretary of Defense review such analysis and, if the
Secretary deems it appropriate, make the certification without performing any separate cost
assessments or analyses. The conferees view such a process as consistent with ongoing
efforts to reduce the time associated with acquisition decisions, push acquisition authorities
and accountability to the Services, and ensure that the Secretary of Defense retains
visibility and ultimate authority over acquisition matters in the Department. (Page 800)
Section 122 of H.R. 5515 states the following:
SEC. 122. FULL SHIP SHOCK TRIAL FOR FORD CLASS AIRCRAFT CARRIER.
The Secretary of the Navy shall ensure that full ship shock trials results are incorporated
into the construction of the Ford class aircraft carrier designated CVN–81.
Section 123 of H.R. 5515 states the following:
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SEC. 123. SENSE OF CONGRESS ON ACCELERATED PRODUCTION OF
AIRCRAFT CARRIERS.
It is the sense of Congress that the United States should accelerate the production of aircraft
carriers to rapidly achieve the Navy’s goal of having 12 operational aircraft carriers.
Section 219 of H.R. 5515 states the following:
SEC. 219. MODIFICATION OF CVN–73 TO SUPPORT FIELDING OF MQ–25
UNMANNED AERIAL VEHICLE.
The Secretary of the Navy shall—
(1) modify the compartments and infrastructure of the aircraft carrier designated CVN–73
to support the fielding of the MQ–25 unmanned aerial vehicle before the date on which the
refueling and complex overhaul of the aircraft carrier is completed; and
(2) ensure such modification is sufficient to complete the full installation of MQ–25 in no
more than a single maintenance period after such overhaul.
Regarding Section 219, H.Rept. 115-874 states the following:
Modification of CVN–73 to support fielding of MQ–25 unmanned aerial vehicle (sec. 219)
The House bill contained a provision (sec. 220) that would require the Navy to modify
CVN–73 during its Refueling and Complex Overhaul (RCOH) to support the fielding of
the MQ–25 unmanned aerial vehicle.
The Senate amendment contained no similar provision.
The Senate recedes with an amendment that would require the Navy to complete the
necessary modifications to CVN–73’s compartments and infrastructure for MQ–25
alterations during the ship’s RCOH in order to allow completion of MQ–25 modifications
and receipt of MQ–25 equipment in a single follow-on ship maintenance period.
The conferees believe that once fielded, the Navy should prioritize deploying the MQ–25
to the Pacific area of operations. In order to enable such deployments, the conferees believe
that it is imperative that CVN–73, as the potential next forward deployed aircraft carrier,
undergo the necessary modifications and alterations during its RCOH to enable MQ–25
operations as soon as practicable. However, the conferees are aware that completing all of
the necessary modifications during the RCOH might put its timely completion at risk.
Therefore, the conferees direct the Navy to complete the necessary MQ–25 modifications
during CVN–73’s RCOH that would enable the completion of modifications and receipt of
equipment during a single follow-on maintenance availability. Nothing in this language
should be interpreted as prohibiting the full installation of MQ–25 alterations and
equipment during RCOH should developments allow it.
Additionally, the conferees expect future Navy budgets will support this plan. (Page 811)
Section 338 of H.R. 5515 states the following:
SEC. 338. REPORT ON RELOCATION OF STEAM TURBINE PRODUCTION FROM
NIMITZ-CLASS AND FORD-CLASS AIRCRAFT CARRIERS AND VIRGINIA-
CLASS AND COLUMBIA-CLASS SUBMARINES.
Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense,
in consultation with the Under Secretary of Defense for Acquisition, Technology, and
Logistics and the Assistant Secretary of the Navy for Research, Development, and
Acquisition, shall develop and submit to Congress a report describing the potential impacts
on national defense and the manufacturing base resulting from contractors or
subcontractors relocating steam turbine production for Nimitz-class and Ford-class aircraft
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carriers and Virginia-class and Columbia-class submarines. Such report shall address each
of the following:
(1) The overall risk of moving production on the national security of the United States,
including the likelihood of production delay or reduction in quality of steam turbines.
(2) The impact on national security from a delay in production of aircraft carriers and
submarines.
Section 1016 of H.R. 5515 states the following:
SEC. 1016. DISMANTLEMENT AND DISPOSAL OF NUCLEAR-POWERED
AIRCRAFT CARRIERS.
(a) IN GENERAL.—Chapter 633 of title 10, United States Code, as amended by section
323, is further amended by adding after section 7320, as added by such section 323, the
following new section:
‘‘§ 7321. Nuclear-powered aircraft carriers: dismantlement and disposal
‘‘(a) IN GENERAL.—Not less than 90 days before the award of a contract for the
dismantlement and disposal of a nuclear-powered aircraft carrier, or the provision of funds
to a naval shipyard for the dismantlement and disposal of a nuclear-powered aircraft
carrier, the Secretary of the Navy shall submit to the congressional defense committees a
report setting forth the following:
‘‘(1) A cost and schedule baseline for the dismantlement and disposal approved by the
service acquisition executive of the Department of the Navy and the Chief of Naval
Operations.
‘‘(2) A description of the regulatory framework applicable to the management of
radioactive materials in connection with the dismantlement and disposal, including, in
cases in which the Navy intends to have another government entity serve as the regulatory
enforcement authority—
‘‘(A) a certification from that entity of its agreement to serve as the regulatory enforcement
authority; and
‘‘(B) a description of the legal basis for the authority of that entity to serve as the regulatory
enforcement authority.
‘‘(b) SUPPLEMENTAL INFORMATION WITH BUDGETS.—In the materials
submitted to Congress by the Secretary of Defense in support of the budget of the President
for a fiscal year (as submitted to Congress under section 1105(a) of title 31), the Secretary
of the Navy shall include information on each dismantlement and disposal of a nuclear-
powered aircraft carrier occurring or planned to occur during the period of the future-years
defense program submitted to Congress with that budget. Such information shall include,
by ship concerned, the following:
‘‘(1) A summary of activities and significant developments in connection with such
dismantlement and disposal.
‘‘(2) If applicable, a detailed description of cost and schedule performance against the
baseline for such dismantlement and disposal established pursuant to subsection (a),
including a description of and explanation for any variance from such baseline.
‘‘(3) A description of the amounts requested, or intended or estimated to be requested, for
such dismantlement and disposal for each of the following:
‘‘(A) Each fiscal year covered by the future-years defense program.
‘‘(B) Any fiscal years before the fiscal years covered by the future-years defense program.
‘‘(C) Any fiscal years after the end of the period of the future-years defense program.
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‘‘(c) FUTURE-YEARS DEFENSE PROGRAM DEFINED.—In this section, the term
‘future-years defense program’ means the future-years defense program required by
section 221 of this title.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 633
of such title, as amended by section 323, is further amended by adding at the end the
following new item:
‘‘7321. Nuclear-powered aircraft carriers: dismantlement and disposal.’’.
Section 1018 of H.R. 5515 states the following:
SEC. 1018. INCLUSION OF AIRCRAFT CARRIER REFUELING OVERHAUL
BUDGET REQUEST IN ANNUAL BUDGET JUSTIFICATION MATERIALS.
The Secretary of Defense shall include in the budget justification materials submitted to
Congress by the Secretary in support of the budget of the President for fiscal year 2020 and
each subsequent fiscal year, as part of the budget request for Shipbuilding and Conversion,
Navy, a detailed aircraft carrier refueling overhaul budget request, by hull number,
including all funding requested for reactor power units and reactor components.
Regarding Section 1018, H.Rept. 115-874 states the following:
Inclusion of aircraft carrier refueling overhaul budget request in annual budget
justification materials (sec. 1018)
The Senate amendment contained a provision (sec. 1014) that would require a specific
authorization by statute before funds may be obligated or expended for the procurement of
a naval nuclear reactor power unit or associated reactor components for the nuclear
refueling of an aircraft carrier.
The House bill contained no similar provision.
The House recedes with an amendment that would require the Secretary of Defense to
include, as part of the budget request for Shipbuilding and Conversion, Navy, a detailed
aircraft carrier refueling overhaul request, by hull number, including all funding requested
for reactor power units and reactor components.
The conferees intent is the procurement of nuclear reactor power units and associated
reactor components necessary for the nuclear refueling of each aircraft carrier be requested
in the Shipbuilding and Conversion, Navy account, instead of the Other Procurement, Navy
account. (Pages 940-941)
FY2019 DOD Appropriations Act (H.R. 6157/S. 3159/Division A of
H.R. 6157/P.L. 115-245)
House Committee Report
The House Appropriations Committee, in its report (H.Rept. 115-769 of June 20, 2018) on H.R.
6157, recommended the funding level for the CVN-78 program shown in the HAC column of
Table 4.
H.Rept. 115-769 states the following:
STEAM TURBINE PRODUCTION
The Committee understands that the production of steam turbines is vital for the Navy’s
30-year shipbuilding plan and has concerns that any disruption to this production could
have major ramifications. The Committee directs the Secretary of the Navy to provide a
report to the congressional defense committees not later than 180 days after the enactment
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of this Act that describes the current industrial base for steam turbines for Navy ships, how
a temporary halt in production would impact shipbuilding, and any steps the Navy is taking
to increase the domestic steam turbine industrial base. (Page 162)
House Floor Action
On June 27, 2018, as part of its consideration H.R. 6157, the House agreed to by voice vote
H.Amdt. 839, which was amendment number 26 as printed in H.Rept. 115-785 of June 26, 2018,
on H.Res. 964, providing for the further consideration of H.R. 6157. H.Amdt. 839 struck “(CVN
80)” from the line in the bill as reported that provides procurement funding for the CVN-78 class
program. The line read: “Carrier Replacement Program (CVN 80), $1,598,181,000,” meaning
that the funding is made available specifically for CVN-80, and for no other carriers in the CVN-
78 program. Striking “(CVN 80)” from the line permits the funding to be used for the CVN-78
class program in general, permitting the Navy, for example, to use the funding in part for CVN-
81, as part of a two-carrier block buy contract for CVN-80 and CVN-81.
Senate
The Senate Appropriations Committee, in its report (S.Rept. 115-290 of June 28, 2018) on S.
3159, recommended the funding level for the CVN-78 program shown in the SAC column of
Table 4. The recommended reduction of $25.0 million is for “Transfer funding to RDN, line 84:
CVN 78 Full Ship Shock Trial.” (Page 105)62 In connection with this recommended transfer,
S.Rept. 115-290 states the following:
CVN 78 Full Ship Shock Trials.—The fiscal year 2019 President’s budget request includes
no funds to conduct Full Ship Shock Trials [FSST] on CVN 78. The Committee notes that
full-scale ship shock trials on CVN 78 were included in the original CVN 78 test plans and
that the need for FSST was subsequently reaffirmed by the Director, Operational Test and
Evaluation, the then-Under Secretary of Defense (Acquisition, Technology and Logistics)
and Congress. The Committee notes that subsequent to the fiscal year 2019 President’s
budget submission, the Secretary of Defense denied a request by the Navy to waive CVN
78 FSST in accordance with section 121(b) of the Fiscal Year 2018 National Defense
Authorization Act, and that the Navy now plans to conduct FSST on CVN 78, as directed.
The Committee understands that this requires $25,000,000 in fiscal year 2019 and
recommends transferring those funds from other CVN programs, as delineated in the tables
for Committee Recommended Adjustments for the Research, Development, Test and
Evaluation, Navy and Shipbuilding and Conversion, Navy accounts. The Committee
further understands that the Navy will fully budget for additional CVN 78 FSST
requirements in the fiscal year 2020 President’s budget request. (Page 174)
S.Rept. 115-290 also states the following:
CVN 80.—The fiscal year 2019 President’s budget request includes $1,598,181,000 for the
Aircraft Carrier Replacement Program. The Committee supports the funding requested to
maintain the aircraft carrier fleet consistent with the Navy’s 30 year shipbuilding plan.
However, the Committee understands that the Navy may pursue block buy authority for a
two-ship-buy, to include CVN 81, and notes that the construction award for CVN 80 has
slipped from March 2018 to December 2018 while negotiations between the Navy and the
shipbuilder are ongoing. To date, the Committee has not received any documentation
related to a block buy proposal. The Committee notes that an accurate independent cost

62 “RDN, line 84” is a reference to line 84 in the Navy’s research and development account, known more formally as
the Research, Development, Test, and Evaluation, Navy (RDT&EN) account. Line 84 in this account funds RDT&E
work for the CVN-78 program. The recommended transfer of the $25.0 million into line 84 is also noted on page 169
of S.Rept. 115-290.
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estimate and Navy budget profile are required for the congressional defense committees to
make an informed decision on the proposal. Therefore, the Committee designates the
funding appropriated for the Carrier Replacement Program funding line be applied only to
CVN 80 and directs that no funds provided in fiscal year 2019 be applied to the
procurement of CVN 81 components. (Pages 105-106)
S.Rept. 115-290 also states the following:
CVN 78 Sortie Generation Rate.—The Committee notes that the sortie generation rate
[SGR] is a significant driver of the CVN 78 design. The Committee understands that the
reliability of key systems may impact SGR and that the SGR demonstration schedule and
execution are under review. The Program Executive Officer, Aircraft Carriers, in
coordination with the Director, Operational Test and Evaluation is directed to provide, with
the fiscal year 2020 President’s budget request, to the congressional defense committees
an updated plan for the SGR demonstration schedule and test requirements. The Assistant
Secretary of the Navy (Financial Management and Comptroller) is directed to certify SGR
demonstration full funding with the fiscal year 2020 President’s budget request. (Pages
174-175)
Conference
In final action, the FY2019 DOD Appropriations Act became Division A of the Department of
Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019, and
Continuing Appropriations Act, 2019 (H.R. 6157/P.L. 115-245 of September 28, 2018).
The joint explanatory statement for H.R. 6157/P.L. 115-245 specified the funding levels shown in
the appropriations conference column of Table 4. The reduction of $25.0 million is for “CVN-78
full ship shock trial – transfer to RDT&E,N [the research, development, test and evaluation, Navy
appropriation account] line 84.” (PDF page 176 of 559)
The paragraph in Division A of H.R. 6157/P.L. 115-245 that makes appropriations for the Navy’s
shipbuilding account (the Shipbuilding and Conversion, Navy, or SCN, appropriation account)
includes the following proviso:
... Provided further, That the funds made available by this Act for the Carrier Replacement
Program (CVN–80) may be available to modify or enter into a new contract for the
procurement of a Ford-class aircraft carrier designated CVN–81 pursuant to section 121 of
the John S. McCain National Defense Authorization Act for Fiscal Year 2019.
The joint explanatory statement for H.R. 6157/P.L. 115-245 states the following:
FORD CLASS AIRCRAFT CARRIER PROCUREMENT
The conferees include a proviso consistent with section 121 of the John S. McCain National
Defense Authorization Act for Fiscal Year 2019, which allows the Secretary of the Navy
to potentially use fiscal year 2019 funds to enter into a contract for an aircraft carrier
designated CVN-81 if certain requirements are met by the Secretary of Defense.
However, the conferees note that the congressional defense committees have not received
information justifying the validity of a proposed "two carrier block buy," including an
Independent Cost Estimate, an analysis of the impact on other Navy shipbuilding programs,
an updated future years defense program, or an extended planning range budget.
This language replaces the language under the heading "CVN 80" in S.Rept. 115-290. (PDF
page 178 of 559)
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Appendix A. Background Information on Two-Ship
and Three-Ship Block Buys
This appendix presents background information on options for two-ship or three-ship carrier
block buys that was presented in the main part of this CRS report prior to DOD’s December 31,
2018, two-ship certification and the Navy’s January 31, 2019, two-ship contract award.
Accelerated Procurement of CVN-81, Block Buy, or Combined
Material Buy
Overview
One potential issue for Congress for FY2019 was whether to accelerate the procurement of CVN-
81 from FY2023 to an earlier year, or use a block buy contract to procure multiple aircraft
carriers, or pursue a combined material buy for multiple aircraft carriers, or do some combination
of these things. In general, supporters of these options could argue that they could help accelerate
the attainment of a 12-carrier force and reduce aircraft carrier unit procurement costs, while
opponents could argue that they would increase near-term aircraft carrier procurement funding
requirements and reduce congressional flexibility for changing aircraft carrier procurement plans
in coming years in response to changing strategic or budgetary circumstances.
Accelerating Procurement of CVN-81
Accelerating procurement of CVN-81 from FY2023 to an earlier year such as FY2021 or FY2022
could make a start toward accelerating the attainment of a 12-carrier force. It could also reduce
the procurement cost of CVN-81 in real (inflation-adjusted) terms by improving shipyard
production learning curve benefits in shifting from production of CVN-80 to production of CVN-
81, and by improving spreading of shipyard and supplier-firm fixed overhead costs. Accelerating
procurement of CVN-81, however, would also increase near-term aircraft carrier procurement
funding requirements. Accelerating the procurement of CVN-81 could be done while maintaining
the current plan to contract separately for the procurement of CVN-80 and CVN-81, or could be
done as part of a new plan to procure CVN-80 with a block-buy contract covering one or two
additional carriers (see next section).
Delaying the procurement of CVN-80 one year, to FY2019, and accelerating the procurement of
CVN-81 to FY2019 could permit both ships to be procured in the same year. This would permit
the Navy to procure the two ships as a simple two-ship buy—an approach that would achieve
savings similar to those achievable under a block buy contract without requiring the use of a
block buy contract. (A block buy contract is necessary if the ships are procured in separate fiscal
years.) The Navy made two-ship carrier buys in FY1983 (CVN-72 and CVN-73) and again in
FY1988 (CVN-74 and CVN-75).63

63 When the FY1983 two-carrier buy was proposed, the Navy estimated that the block buy would reduce the combined
cost of CVN-72 and CVN-73 by 5.6% in real terms. (See General Accounting Office, Request to Fully Fund Two
Nuclear Aircraft Carriers in Fiscal Year 1983, MASAD-82-87 (B-206847), March 26, 1982, 10 pp. The figure of 5.6%
was derived by dividing $450 million in non-inflation cost avoidance shown on page 5 of the Government
Accountability Office (GAO) report by the combined estimated cost of the two ships (absent a block buy) of $8,024
million shown on page 4.)
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Block Buy Contract for Multiple Carriers
Overview
Using a single block buy contract64 to procure multiple carriers procured in separate fiscal years
would do the following:
 reduce the unit procurement costs of the carriers covered by the contract through
the use of Economic Order Quantity (EOQ) purchases (i.e., up-front batch
orders) of materials and components for the ships, and by giving the shipyard and
supplier firms the confidence they need about future aircraft carrier construction
to invest in optimizing their workforces and capital plants for a multiple-ship
production run; and
 increase near-term aircraft carrier procurement funding requirements and reduce
congressional flexibility for changing aircraft carrier procurement plans in
coming years in response to changing strategic or budgetary circumstances.
Congress would need to approve the use of a block buy contract through a legislative provision,
and making EOQ purchases under the contract could not occur unless the legislative provision
granting authority for the block buy contract explicitly included authority for making EOQ
purchases. A block buy contract could be done either without accelerating procurement of CVN-
81 from FY2023 to an earlier year, or in combination with accelerating CVN-81’s procurement to
an earlier year.

The Navy proposed the procurement of CVN-74 and CVN-75 in the FY1988 budget submission as a block buy that
would involve procuring CVN-74 in FY1990 and CVN-75 in FY1993. Congress, in acting on the FY1988 budget,
decided to accelerate the procurement of both CVN-74 and CVN-75 to FY1988. (See CRS Issue Brief IB87043,
Aircraft Carriers (Weapons Facts), 13 pp., updated February 10, 1988, and archived March 24, 1988, by Ronald
O’Rourke. The report is out of print and available to congressional clients directly from the author.)
When the FY1988 block buy was proposed, the Navy estimated that the block buy would reduce the combined cost of
CVN-74 and CVN-75 by a considerably larger percentage than the 5.6% the Navy estimated for the FY1983 two-ship
buy. GAO stated that the savings would be considerably less than the Navy estimated, but agreed that a two-ship
acquisition strategy is less expensive than a single-ship acquisition strategy, and that some savings would occur in a
two-ship strategy for CVN-74 and CVN-75. (See General Accounting Office, Procurement Strategy For Acquiring
Two Nuclear Aircraft Carriers, Statement of Frank Conahan, Assistant Comptroller General, National Security and
International Affairs Division, Before the Conventional Forces and Alliance Defense Subcommittee and Projection
Forces and Regional Defense Subcommittee of the Senate Armed Services Committee, April 7, 1987, T-NSIAD-87-28,
5 pp. The testimony states on page 2 that “A single ship acquisition strategy is more expensive because materials are
bought separately for each ship rather than being combined into economic order quantity buys under a multi-ship
procurement.” The report discounted the Navy’s estimated savings of $1,100 million based on this effect on the
grounds that if CVN-74 and CVN-75 were not procured in the proposed two-ship block buy, with CVN-74 procured in
FY1990 and CVN-75 procured FY1993, it was likely that CVN-74 and CVN-75 would subsequently be procured in a
two-ship block buy, with CVN-74 procured in FY1994 and CVN-75 procured in FY1996. For the discussion here,
however, the comparison is between the Navy’s current plan to procure CVN-80 and CVN-81 separately and the
potential alternative of procuring them together in a block buy. The GAO report commented on an additional $700
million in savings that the Navy estimated would be derived from improving production continuity between CVN-73,
CVN-74, and CVN-75 by stating on page 3 that “It is logical to assume that savings are possible through production
continuity but the precise magnitude of such savings is difficult to calculate because of the many variables that affect
the outcome.”)
64 For more on block buy contracts, which the Navy has used in other shipbuilding programs, 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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Two-Ship Block Buy
The option of using a block buy contract for procuring two carriers has been discussed over the
years in this CRS report. In earlier years, the discussion focused on the option of using a block
buy contract for procuring CVN-79 and CVN-80. In more recent years, interest among
policymakers has focused on the option of using a block buy contract for procuring CVN-80 and
CVN-81.
Three-Ship Block Buy
Discussions of the option of using a block buy contract have focused on using it to procure two
carriers in part because carriers have been procured on 5-year centers, meaning that two carriers
could be included in a block-buy contract spanning 6 years—the same number of years originally
planned for the two block buy contracts that were used to procure most of the Navy’s Littoral
Combat Ships.65
It can be noted, however, that there is no statutory limit on the number of years that a block buy
contract can cover, and that the LCS block buy contracts were subsequently amended to cover
LCSs procured in a seventh year. This, and the possibility of procuring carriers on 3- or 3.5-year
centers, raises the possibility of using a block buy contract to procure three aircraft carriers: For
example, if procurement of aircraft carriers were shifted to 3- or 3.5-year centers, a block buy
contract for procuring CVN-80, CVN-81, and CVN-82 could span seven years (with the three
ships being procured in FY2018, FY2021, and FY2024) or eight years (with the three ships being
procured in FY2018, FY2021 or FY2022, and FY2025, respectively).
The percentage cost reduction possible under a three-ship block buy contract would likely be
greater than that possible under a two-ship block buy contract, but the offsetting issue of reducing
congressional flexibility for changing aircraft carrier procurement plans in coming years in
response to changing strategic or budgetary circumstances would also be greater.
Combined Materials Purchase
Another option for Congress would be to approve a combined materials purchase for two or more
carriers, so as to improve production economies of scale for those materials and thereby reduce
their procurement cost. This option might be viewed as a mini or partial block buy—a block buy
for the purchased materials, but not for the ships as a whole. The savings under this approach
would be less than those under a block buy contract covering whole ships, particularly since
much of the material for CVN-80 has already been purchased, but the offsetting issue of reducing
congressional flexibility for changing aircraft carrier procurement plans in coming years in
response to changing strategic or budgetary circumstances would also be reduced.
Resulting Options for Congress
Based on the above discussion, resulting options available to Congress include (but are not
necessarily limited to) the following:
 Accelerate CVN-81; no block buy. Accelerate procurement of CVN-81 from
FY2023 to an earlier year, such as FY2021 or FY2022, but contract for it
separately from CVN-80, as currently planned.

65 For more on the LCS block buy contracts, see CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program:
Background and Issues for Congress, by Ronald O'Rourke.
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 Two-ship block buy; no acceleration of CVN-81. Use a block buy contract for
procuring CVN-80 and CVN-81, but maintain the current plan to procure CVN-
81 in FY2023.
 Accelerate CVN-81 and two-ship block buy. Accelerate the procurement of
CVN-81 from FY2023 to an earlier year, such as FY2021 or FY2022, and also
use a block buy contract for procuring both CVN-80 and CVN-81.
 Accelerate CVN-81 and CVN-82 and three-ship block buy. Accelerate the
procurement of CVN-81 to FY2021 or FY2022, and the procurement of CVN-82
(currently planned for FY2028) to FY2024 or FY2025, and use a three-ship
block buy contract for procuring CVN-80, CVN-81, and CVN-82.
 Two-ship buy for CVN-80 and CVN-81. Defer procurement of CVN-80 to
FY2019, accelerate procurement of CVN-81 to FY2019, and procure both ships
under a single FY2019 contract as a simple two-ship buy, without need for a
block-buy contract.
 Combined material purchase; no acceleration of CVN-81. Pursue a combined
material purchase for CVN-80 and CVN-81, but maintain the current plan to
procure CVN-81 in FY2023.
 Combined material purchase; accelerate CVN-81. Pursue a combined material
purchase for CVN-80 and CVN-81, and accelerate procurement of CVN-81 from
FY2023 to an earlier year, such as FY2021 or FY2022.
Potential Savings
The potential savings from the above options would vary from option to option, and the savings
for any given option could vary depending on the particulars of how it was implemented. In
general, the potential savings of the above options might be said to range from a few percent to
perhaps something in the range of 10%. A figure of about 10% has sometimes been mentioned in
discussions of a two-ship buy, and might be viewed as a preliminary rough estimate of the
combined savings from accelerating the procurement of CVN-81 and using a block buy contract
to procure both CVN-80 and CVN-81 (i.e., of using the third option above).
An April 16, 2018, press report stated the following:
If the Navy decides to buy aircraft carriers CVN-80 and 81 together, Newport News
Shipbuilding will be able to maintain a steady workload that supports between 23,000 and
25,000 workers at the Virginia yard for the next decade or so, the shipyard president told
reporters last week.
Part of the appeal of buying the two carriers together is that the Navy would also buy them
a bit closer together: the ships would be centered about three-and-a-half or four years apart,
instead of the five-year centers for recent carrier acquisition, Newport News Shipbuilding
President Jennifer Boykin told reporters.
Boykin said the closer ship construction centers would allow her to avoid a “labor valley”
where the workforce levels would dip down after one ship and then have to come back up,
which is disruptive for employees and costly for the company.
If this two-carrier buy goes through, the company would avoid the labor valley altogether
and ensure stability in its workforce, Boykin said in a company media briefing at the Navy
League’s Sea Air Space 2018 symposium. That workforce stability contributes to an
expected $1.6 billion in savings on the two-carrier buy from Newport News Shipbuilding’s
portion of the work alone, not including government-furnished equipment....
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Boykin said four main things contribute to the expected $1.6 billion in savings from the
two-carrier buy. First, “if you don’t have the workforce valley, there’s a labor efficiency
that represents savings.”
Second, “if you buy two at once, my engineering team doesn’t have to produce two
technical baselines, two sets of technical products; they only have to produce one, and the
applicability is to both, so there’s savings there. When we come through the planning, the
build plan of how we plan to build the ship, the planning organization only has to put out
one plan and the applicability is to both, so there’s savings there.”
The third savings is a value of money over time issue, she said, and fourth is economic
order quantity savings throughout the entire supply chain.66
Navy Interest and RFP
Navy officials in 2017 and 2018 have expressed interest in somehow combining the procurement
of CVN-80 with that of CVN-81 so as to reduce carrier procurement costs, and have stated that
they have been exploring options for doing this. On March 19, 2018, the Navy released a request
for Proposal (RFP) to HII/NNS regarding a two-ship buy of some kind for CVN-80 and CVN-81.
A March 20, 2018, Navy News Service report stated the following:
The Navy released a CVN 80/81 two-ship buy Request for Proposal (RFP) to Huntington
Ingalls Industries—Newport News Shipbuilding (HII-NNS) March 19 to further define the
cost savings achievable with a two-ship buy.
With lethality and affordability a top priority, the Navy has been working with HII-NNS
over the last several months to estimate the total savings associated with procuring CVN
80 and CVN 81 as a two-ship buy.
"In keeping with the National Defense Strategy, the Navy developed an acquisition strategy
to combine the CVN 80 and CVN 81 procurements to better achieve the Department's
objectives of building a more lethal force with greater performance and affordability," said
James F. Geurts, Assistant Secretary of the Navy, Research Development and Acquisition.
"This opportunity for a two-ship contract is dependent on significant savings that the
shipbuilding industry and government must demonstrate. The Navy is requesting a
proposal from HII-NNS in order to evaluate whether we can achieve significant savings."
The two-ship buy is a contracting strategy the Navy has effectively used in the 1980s to
procure Nimitz-class aircraft carriers and achieved significant acquisition cost savings
compared to contracting for the ships individually. While the CVN 80/81 two-ship buy
negotiations transpire, the Navy is pursuing contracting actions necessary to continue CVN
80 fabrication in fiscal year (FY) 2018 and preserve the current schedule. The Navy plans
to award the CVN 80 construction contract in early FY 2019 as a two-ship buy pending
Congressional approval and achieving significant savings.67
October 2018 Press Report
An October 19, 2018, press report states the following:

66 Megan Eckstein, “Newport News Would Save $1.6 Billion, Maintain Stable Workforce of 25,000 Under 2 Proposed
Carrier Buy,” USNI News, April 16, 2018. See also Rich Abott, “HII Sees Two Carrier Buy Saving $1.6 Billion Before
GFE,” Defense Daily, April 11, 2018: 10-11.
67 Naval Sea Systems Command Public Affairs, “Navy Seeks Savings, Releases Two-Carrier RFP,” Navy News, March
20, 2018. See also Megan Eckstein, “UPDATED: Navy, Newport News Taking Steps Towards Two-Carrier Buy,”
USNI News, March 19, 2018.
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The Pentagon’s No. 2 civilian is reviewing a Navy proposal to buy the third and fourth
vessels in the Gerald R. Ford aircraft carrier program under one contract to assess whether
the arrangement will save money as the service claims.
“We are conducting an evaluation to ensure we have the warfighting capabilities to
compete and win,” Deputy Defense Secretary Pat Shanahan said in a statement to
Bloomberg News. “Any decision will factor in strengthening the industrial base and
delivering best value for taxpayers.”
Navy Secretary Richard Spencer told reporters in August that the Navy’s preliminary
estimate is that a two-vessel contracting purchase could save the service $2.5 billion, and
“we are trying to get it higher.” Captain Danny Hernandez, a Navy spokesman, said in an
email that the proposal is still under review and “we expect to have a decision in mid-fall.”
Beci Brenton, a spokeswoman for Newport News, Virginia-based Huntington Ingalls, said
in an email that “we are still negotiating” with the Navy.68

68 Anthony Capaccio, “Navy Proposal to Buy Two Carriers Draws Scrutiny From Pentagon,” Bloomberg, October 19,
2018. See also Justin Katz, “Spencer: Two-Ship Buy Analysis May Be Sent to Congress by ‘Mid-Fall,’” Inside the
Navy, August 10, 2018.
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Appendix B. Cost Growth and Managing Costs
Within Program Cost Caps
This appendix presents additional background information on cost growth in the CVN-78
program, Navy efforts to stem that growth, and Navy efforts to manage costs so as to stay within
the program’s cost caps.
October 2018 CBO Report
An October 2018 CBO report on the potential cost of the Navy’s 30-year shipbuilding plan states
the following regarding the CVN-78 program:
The Navy’s current estimate of the total cost of the Gerald R. Ford, the lead ship of the
CVN-78 class, is $13.0 billion in nominal dollars appropriated over the period from 2001
to 2018, an amount that is equal to the cost cap set in law. CBO used the Navy’s inflation
index for naval shipbuilding to convert that figure to $15.5 billion in 2018 dollars, or 23
percent more than the corresponding estimate when the ship was first authorized in 2008.
Neither the Navy’s nor CBO’s estimate includes the $5 billion in research and development
costs that apply to the entire class.
Because construction of the lead ship is finished, CBO used the Navy’s estimate for that
ship to estimate the cost of successive ships in the class. But not all of the cost risk has
been eliminated; in particular, the ship’s power systems and advanced arresting gear (the
system used to recover fixed-wing aircraft landing on the ship) are not yet working
properly. It is not clear how much those problems will cost to fix, but current Navy
estimates suggest that it will be several tens of millions of dollars or more. CBO does not
have enough information to estimate those final repair costs.
The next carrier after the CVN-78 will be the CVN-79, the John F. Kennedy. Funding for
that ship began in 2007, the Congress officially authorized its construction in 2013, and the
planned appropriations for it were completed in 2018. The shipbuilder expects to complete
construction of the CVN-79 in 2024 and deploy it for the first time in 2026. The Navy
estimates that the ship will cost $11.3 billion in nominal dollars (or $11.6 billion in 2018
dollars). The Navy’s selected acquisition report on the CVN-79 states that “the Navy and
shipbuilder have made fundamental changes in the manner in which the CVN 79 will be
built to incorporate lessons learned from CVN 78 and eliminate the key contributors to cost
performance challenges realized in the construction of CVN 78.” Nevertheless, the Navy
informed CBO that there is a greater than 60 percent chance that the ship’s final cost will
be more than the current estimate. Although CBO expects the Navy to achieve a
considerable cost reduction in the CVN-79 compared with the CVN-78, as is typical with
the second ship of a class, CBO’s estimate is higher than the Navy’s. Specifically, CBO
estimates that the ship will cost $11.7 billion in nominal dollars (or $12.0 billion in 2018
dollars), about 4 percent more than the Navy’s estimate.
In 2018, the Congress authorized the third carrier of the class, the Enterprise (CVN-80).
Appropriations for that ship began in 2016 and are expected to be complete by 2023. The
Navy estimates that the ship will cost $12.6 billion in nominal dollars (or $11.5 billion in
2018 dollars). However, as with CVN-79, the Navy told CBO that there is a greater than
60 percent chance that the ship’s final cost will be more than the current estimate. CBO
estimates that the ship will cost $13.0 billion in nominal dollars (or $11.8 billion in 2018
dollars), about 3 percent more than the Navy’s estimate.
The Navy estimates an average cost of $12.4 billion (in 2018 dollars) for the 7 carriers
(CVN-81 through CVN-87) in the 2019 shipbuilding plan. CBO’s estimate is $12.8 billion
per ship.... The gap between the estimates has narrowed since the 2017 plan: The Navy’s
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has increased by $500 million per ship, and CBO’s has dropped by $200 million per ship.
It is not clear why the Navy’s estimates increased, but CBO’s estimates fell mainly because
the agency projects somewhat less growth in real costs of the shipbuilding industry in
future years.69
August 2018 Press Report
An August 17, 2018, press report states the following:
Huntington Ingalls Industries Inc., the sole U.S. builder of aircraft carriers, continues to
fall short of the Navy’s demand to cut labor expenses to stay within an $11.39 billion cost
cap mandated by Congress on the second in a new class of warships.
With about 47 percent of construction complete on the USS John F. Kennedy, Navy figures
show the contractor isn’t yet meeting the goal it negotiated with the service: reducing labor
hours by 18 percent from the first carrier, the USS Gerald Ford....
It took about 49 million hours of labor to build the Ford, according to the U.S. Government
Accountability Office. The Navy’s goal for the Kennedy is to reduce that to about 40
million hours.
Huntington Ingalls’s performance “remains stable at approximately 16 percent” less,
William Couch, spokesman for the Naval Sea Systems Command, said in an email. He said
“key production milestones and the ship’s preliminary acceptance date remain on track”
and there are “ample opportunities” for improvement “with nearly four years until contract
delivery and over 70 percent of assembly work” remaining on the vessel’s superstructure.
But the Pentagon’s naval warfare division, which reports to Ellen Lord, the Defense
Department’s chief weapons buyer, is less sanguine. It said in a July assessment that
Huntington Ingalls “is unlikely to fully recover the needed 18 percent” reduction....
On the effort to meet the 18 percent labor-hour reduction for the Kennedy, the Navy’s
program manager “assesses that although difficult, the shipbuilder can still attain” it, Couch
said.
Beci Brenton, a spokeswoman for Newport News, Virginia-based Huntington Ingalls, said
“we are seeing the benefits associated with significant build strategy changes and
incorporation of lessons learned” from the first vessel.
Brenton said “the current production performance” is 16 percent less than the Ford’s
estimate at the time of contract award for the second vessel but the reduction is 17 percent
when compared with the first vessel’s current cost....
But Shelby Oakley, a director with the GAO who monitors Navy shipbuilding, said “with
so much of the program underway, it is unlikely that the Navy will regain efficiency.” In
later phases of a shipbuilding contract, she said, “performance typically degrades, not
improves.”
It’s also “unclear how the lessons learned” from the first ship “could help regain efficiency
when they are already baked in to the Navy’s overly optimistic estimate for the program,”
she said.70

69 Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2019 Shipbuilding Plan, October 2018, pp. 17-
18.
70 Anthony Capaccio, “Navy’s Troubled $11 Billion Carrier Falters on Another Milestone,” Bloomberg, August 17,
2018.
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June 2018 Press Report
A June 19, 2018, press report stated the following:
Huntington Ingalls Industries Inc. is asking General Electric Co. to compensate it for
damage caused by flawed workmanship during installation of propulsion system
components on the U.S. Navy’s $13 billion aircraft carrier Gerald R. Ford.
The problem, which forced the most expensive U.S. warship back to port in January, has
yet to be fully resolved although the carrier is once again at sea....
Huntington Ingalls, a shipbuilder based in Newport News, Virginia, “has notified the
original manufacturer of the shipyard’s intent to seek compensation,” Naval Sea Systems
Command spokesman William Couch said in an email. Beci Brenton, a spokeswoman for
Huntington said, “We continue to work with appropriate stakeholders to support resolution
of this situation.”
Perry Bradley, a spokesman for Boston-based GE, said “we’re not going to comment on
specifics other than to say” that “GE is working closely with” Huntington’s Newport News
Shipyard unit and “the U.S. Navy to resolve the issue.”...
The episode in January was the second failure in less than a year with a “main thrust
bearing” that’s part of the carrier’s propulsion system. The first occurred in April 2017,
during sea trials a month before the vessel’s delivery. The ship has been sailing in a
shakedown period to test systems and work out bugs. It’s now scheduled to be ready for
initial combat duty in 2022.
The Navy’s carrier program office said in an assessment that an inspection of the carrier’s
four main thrust bearings after the January failure revealed “machining errors” by GE
workers at a Lynn, Massachusetts, facility during the original manufacturing as “the actual
root cause.”
The bearing overheated, the Navy said in a March 8 memo to Congress, and “after securing
the equipment to prevent damage, the ship safely returned to port." A failure review board
is identifying “modifications required to preclude recurrence,” it said. The bearing is one
of four that transfers thrust from the ship’s four propeller shafts.
“The costs associated with repairing” the thrust bearings “are currently being assessed” and
“this will include recovery of costs from the manufacturer of the Main Reduction Gear,
General Electric (Lynn), as appropriate,” the Navy said in the memo.
Couch said the Navy doesn’t expect similar propulsion problems with the next vessel in
the class, the John F. Kennedy, because a different manufacturer made that carrier’s
propulsion train components.
“Any propulsion train deficiencies identified” with the Ford “will be corrected and
implemented” in “future ships of the class as necessary,” he said.71
May 2018 Press Report
A May 11, 2018, press report stated the following:
The Navy’s costliest vessel ever just got pricer, breaching a $12.9 billion cap set by
Congress by $120 million, the service told lawmakers this week.
The extra money for the U.S.S. Gerald R. Ford built by Huntington Ingalls Industries Inc.
is needed to replace faulty propulsion components damaged in a January failure, extend
the vessel’s post-delivery repair phase to 12 months from the original eight months and

71 Anthony Capaccio, “Huntington Ingalls Asks General Electric to Pay for Carrie Flaw,” Bloomberg, June 19, 2018.
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correct deficiencies with the “Advanced Weapons Elevators” used to move munitions from
deep in the ship to the deck.
The elevators on the ship, designated CVN 78, need to be fixed “to preclude any effect on
the safety of the ship and personnel,” the Naval Sea Systems Command said in a statement
to Bloomberg News on Friday. “Once the adjustment is executed, the cost for CVN 78 will
stand at $13.027” billion, the Navy said.
In addition to informing Congress that the spending lid has been breached, the Navy will
have to let lawmakers know how it will shift funds to make up the difference.
Navy officials didn’t disclose the propulsion failure or elevator problems during budget
hearings before Congress in recent weeks, and House and Senate lawmakers didn’t ask
about it....
The Ford’s propulsion system and elevator flaws are separate from reliability issues on its
troubled aircraft launch and recovery systems.
After its delivery last May, the ship operated for 70 days and completed 747 shipboard
aircraft launches and recoveries, exceeding the goal of about 400, the Navy said.
None of the 11 weapons elevators are operational but at least two are being used for testing
“to identify many of the remaining developmental issues for this first-of-class system,” the
Navy has said. The command said all 11 elevators “should have been complete and
delivered with the ship delivery” in May 2017.72
April 2018 Press Report
An April 16, 2018, press report stated the following:
Huntington Ingalls Industries’ Newport News Shipbuilding President Jennifer Boykin
provided an update on the various stages of construction on several major Navy
shipbuilding programs during the Navy League’s Sea Air Space Expo last week.
The future USS John F. Kennedy (CVN-79) is about 43 percent complete, with launch
planned for the fourth quarter of 2019 and delivery set for 2022. Boykin said the company
has achieved about 75 percent of the ship erected and they are on track for an 18 percent
man-hour budget reduction.
Boykin provided these updates during a press briefing at the conference.
Boykin revealed that undocking of CVN-79 in the fourth quarter of 2019 will occur three
months earlier than originally planned.73
April 2018 GAO Report
An April 2018 Government Accountability Office (GAO) report assessing major DOD weapon
acquisition programs stated the following regarding the status of the CVN-78 program:
Technology, Design, and Production Maturity

72 Anthony Capaccio, “U.S. Navy’s Costliest Vessel Just Got Even Pricier,” Bloomberg, May 11, 2018. See also Mark
D. Faram, “Why the Navy’s Newest Aircraft Carrier Was Forced Back into Port,” Navy Times, May 23, 2018;
Anthony Capaccio, “U.S. Navy’s Costliest Warship Suffers New Failure at Sea,” Bloomberg, May 8, 2018. The May
23, 2018, article includes quotes from Colleen O’Rourke, a spokeswoman for the Navy Sea Systems Command.
Colleen O’Rourke is no relation to Ronald O’Rourke.
73 Rich Abott, “Huntington Ingalls Updates Ships Statuses, Reactivates Ingalls East Bank,” Defense Daily, April 16,
2018: 16-17.
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In May 2017, the Navy accepted delivery of the lead ship in the Ford class (CVN 78),
despite the carrier’s reliance on immature technologies and struggle to demonstrate the
reliability of mature systems. CVN 78 began construction with immature technologies and
an incomplete design, leading to cost and schedule growth. The ship delivered 20 months
later than the Navy planned, with construction-related work still remaining and over 40
serious deficiencies that could impact ship operation or safety. As of January 2018, the
Navy reported 11 of the program’s 13 critical technologies are mature. Shipboard testing
continues for several critical systems, including the advanced weapons elevators,
electromagnetic aircraft launch system (EMALS), advanced arresting gear (AAG), and
dual band radar (DBR). The elevators, AAG, and DBR are struggling to meet reliability
targets the Navy uses in assessing ship performance. If these systems cannot show
reliability, CVN 78 may not demonstrate it can rapidly launch and recover aircraft—a key
requirement for the new class of carriers. The Navy reported EMALS is now meeting
reliability targets; however, the Director, Operational Test and Evaluation, raised concerns
because the Navy lowered the EMALS reliability target. This lower target will also prevent
the ship from meeting the program’s aircraft launch and recovery requirement.
Until the Navy fully matures the CVN 78 class critical technologies, the form of these
technologies and how they fit on the ship could evolve. Such changes, which are typical
outcomes of technology development, could introduce the need for additional design
changes to CVN 78 class ships. Despite this, construction continues on the second ship,
CVN 79, which is 34 percent complete and the Navy will soon review proposals for the
third ship, CVN 80. CVN 79 uses the CVN 78 design with some modifications—that the
Navy considers complete—most notably, replacement of DBR with the Enterprise Air
Surveillance Radar (EASR), which is still in development and completed its critical design
review in August 2017. The Navy does not identify this new system as a critical technology
in the Ford Class because it derives from the pre-existing Air and Missile Defense Radar.
The Navy plans to procure two EASR units for CVNs 79 and 80 and install the CVN 79
unit during that ship’s second phase of delivery. The Navy expects to receive and review
shipbuilder proposals for CVN 80 in early 2018. The shipbuilder is already procuring
materials for the third ship under the advance procurement contract the Navy reported it
awarded in May 2016.
Other Program Issues
In 2007, Congress established a procurement cost cap of $10.5 billion for CVN 78, but lead
ship procurement costs have since increased by 23 percent to the current cost cap of $12.9
billion. The National Defense Authorization Act (NDAA) for Fiscal Year 2016 reduced
the cap for follow-on ships, including CVN 79 to $11.4 billion, although costs for this ship
may also increase. In a prior report, we found that the funds the Navy budgeted for CVN
79 are likely to be insufficient to complete ship construction. Previously, the Navy
expressed confidence that CVN 79 would deliver within its cost cap, which assumes
unprecedented construction efficiency—namely that CVN 79 production hours will be
over 18 percent lower than CVN 78. However, recent construction performance reporting
shows the shipbuilder is not meeting this goal. If the shipbuilder cannot achieve its
predicted efficiency gain, CVN 79 is at risk of exceeding its current $11.4 billion cost cap.
The NDAA for Fiscal Year 2018 raises the cost cap for ships that follow CVN 79 to $12.6
billion.
The NDAA for Fiscal Year 2018 also provides the Secretary of Defense with another way
to waive a fiscal year 2016 NDAA limitation on funding for CVN 79 that would not require
a certification that the full ship shock trial be completed on CVN 78. The Navy originally
planned to defer this test until after CVN 78’s initial deployment. In a prior report, we
raised concerns about the Navy’s plan to delay this trial because such tests can identify
potential mission-critical failures before the ship is in an active combat environment. In
2015, the Deputy Secretary of Defense for Acquisition ordered the Navy to conduct the
trial before the first deployment.
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Program Office Comments
We provided a draft of this assessment to the program office for review and comment. The
program office provided technical comments, which we incorporated where appropriate.
In addition, the program office stated that CVN 78 delivered in late May 2017, though with
deficiencies, after completing trials. According to the program office, correction of these
deficiencies is ahead of schedule. The ship has performed well at sea through January 2018,
according the the program, completing hundreds of aircraft launches and recoveries using
EMALS and AAG, supported by DBR. This activity contributes to required reliability
metrics for these systems.
The program office also stated that CVN 79 construction cost performance remains below
the level needed to achieve the planned reduction in production hours from CVN 78, but
is improving. The program expects shipbuilder performance to remain stable as it continues
to work through the residual effects of shortages in some construction materials, which
contributed to its earlier cost performance issues. According to the program office, the
Navy plans to deliver a complete and deployable ship on schedule in September 2024,
within its cost cap and on a timeline that maintains an 11-carrier force structure.74
September 2017 Press Report
A September 26, 2017, press report states the following:
Huntington Ingalls Industries Inc. is falling short of a U.S. Navy goal to reduce hours of
labor on the second ship in the new Ford class of aircraft carriers in a drive to reduce costs,
according to service documents.
With 34 percent of construction complete on the USS John F. Kennedy, Huntington Ingalls
estimates it will be able to reduce labor hours by 16 percent from the hours needed to
construct the first vessel, the Gerald R. Ford. That’s less than the 17 percent reduction
reported at the end of last year and the 18 percent goal the Navy negotiated in the primary
construction contract for the carrier.
The “recent degradation in cost performance stems largely from the delayed availability of
certain categories of material,” such as pipe fittings, controllers, actuators and valves,
according to the Navy’s annual report on the program and updated figures obtained by
Bloomberg News....
“We acknowledge that the cost reduction target for CVN-79,” relative to the first carrier,
“is challenging,” Huntington Ingalls spokeswoman Beci Brenton said in an email, referring
to the Kennedy by its Navy designation. “While it is still early in the ship’s schedule, we
are seeing positive results from” new initiatives to keep costs in check, she said....
Navy Secretary Richard Spencer told reporters last week that he will stay involved in
monitoring the CVN-79’s construction trends. “This is my personal approach—the CEO
has to be involved.”
A close watch is required “because there are so many moving parts and so many
opportunities to do things in a more efficient manner,” Spencer said.
The Navy has been working with the contractors “to mitigate technical risks and impacts
of late material,” Navy spokesman Victor Chen in an email. “The overall volume of late
material items and associated impact to construction performance is declining. The Navy
has hired third-party experts who are working collaboratively with the shipbuilder to

74 Government Accountability Office, Weapon Systems Annual Assessment[:] Knowledge Gaps Pose Risks to
Sustaining Recent Positive Trends, GAO-17-360SP, April 2018, p. 85.
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identify manufacturing opportunities for efficiency gains” and to assist in implementing
improvements....
The 18 percent reduction in labor hours was “quite optimistic” from the start, Michele
Mackin, a Government Accountability Office director who oversees its shipbuilding
assessments, said in an email. “Even based on that assumption, the $11.4 billion cost cap
was unlikely to be met,” she said. “If those labor-hour efficiencies are in fact not
materializing, costs will go higher.
Also, “with the ship being over 30 percent complete, it’s unlikely the shipbuilder can get
back enough efficiencies to further reduce labor hours—the more complicated work is yet
to come,” she said.75
June 2017 Navy Testimony
At a June 15, 2017, hearing before the Senate Armed Services Committee on the Department of
the Navy’s proposed FY2018 budget, the following exchange occurred:
SENATOR JOHN MCCAIN (CHAIRMAN) (continuing):
Secretary Stackley, the Navy broached a cost cap for CVN-78. Do you believe that it has?
SEAN STACKLEY, ACTING SECRETARY OF THE NAVY:
Sir, right now our estimate for CVN-78, we're trying to hold it within the $12.887 billion
number that was established several years ago. We have included a $20 million
[procurement funding] request in this budget pending our determination regarding repairs
that required for the...
MCCAIN:
Is that a breach of Nunn-McCurdy?76
STACKLEY:
Not at this point in time, sir, we're continuing to evaluate whether that additional funding
will be required. We're doing everything we can to stay within the existing cap and we'll
keep Congress informed as we complete our post-delivery assessment.
MCCAIN:
Problem is we haven't been informed. So either you bust the cap and breach Nunn-
McCurdy—Nunn-McCurdy or you notify us. You haven't done either one.
STACKLEY:
Sir, we've been submitting monthly reports regarding the carrier, we've alerted the concern
regarding the repairs that are being required for the motor turbine generator set and we've
acknowledged the risk associated with those repairs. However, what we’re trying to do is
not incur those costs, avoid cost by other means, and as of right now we're not ready to trip
that cost cap.
MCCAIN:

75 Anthony Capaccio, “U.S. Aircraft Carrier’s Labor Costs Missing Navy’s Savings Goal,” Bloomberg, September 26,
2017. See also Lee Hudson, “NNS Slightly Lagging Expected Efficiencies with CVN-79 30 Percent Constructed,”
Inside the Navy, July 24, 2017.
76 This is a reference to the Nunn-McCurdy provision, a statute relating to cost growth in DOD acquisition programs.
For more on the Nunn-McCurdy provision, see CRS Report R41293, The Nunn-McCurdy Act: Background, Analysis,
and Issues for Congress, by Moshe Schwartz and Charles V. O'Connor.
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Well, it's either not allowable or it's allowable. It's not allowable, then you take a certain
course of action. If it's allowable then you're required to notify Congress. You have done
neither.
STACKLEY:
If we need to incur those costs, they will be allowable costs. We're trying to avoid that at
this stage of time, sir.
MCCAIN:
I agree, but we were supposed to be notified—OK. I can tell you that you are either in
violation of Nunn-McCurdy or you are in violation of the requirement that we be notified.
You have done neither. There's two scenarios.
STACKLEY:
Sir, we have not broached the cost cap. If it becomes apparent that we'll need to go above
the cost cap, we will notify Congress within—within the terms that you all have
established.
MCCAIN:
OK. Well, I'll get it to you in writing but you still haven't answered the question because
when there's a $20 million cost overrun, it's either allowable and then we have to be notified
in one way. If it's not allowable, Nunn-McCurdy is—is reached. But anyway, maybe you
can give us a more satisfactory explanation in writing, Mr. Secretary.77
June 2017 GAO Report
A June 2017 GAO report states the following:
The cost estimate for the second Ford-Class aircraft carrier, CVN 79, is not reliable and
does not address lessons learned from the performance of the lead ship, CVN 78. As a
result, the estimate does not demonstrate that the program can meet its $11.4 billion cost
cap. Cost growth for the lead ship was driven by challenges with technology development,
design, and construction, compounded by an optimistic budget estimate. Instead of learning
from the mistakes of CVN 78, the Navy developed an estimate for CVN 79 that assumes a
reduction in labor hours needed to construct the ship that is unprecedented in the past 50
years of aircraft carrier construction....
After developing the program estimate, the Navy negotiated 18 percent fewer labor hours
for CVN 79 than were required for CVN 78. CVN 79’s estimate is optimistic compared to
the labor hour reductions calculated in independent cost reviews conducted in 2015 by the
Naval Center for Cost Analysis and the Office of Cost Assessment and Program
Evaluation. Navy analysis shows that the CVN 79 cost estimate may not sufficiently
account for program risks, with the current budget likely insufficient to complete ship
construction.
The Navy’s current reporting mechanisms, such as budget requests and annual acquisition
reports to Congress, provide limited insight into the overall Ford Class program and
individual ship costs. For example, the program requests funding for each ship before that
ship obtains an independent cost estimate. During an 11-year period prior to 2015, no
independent cost estimate was conducted for any of the Ford class ships; however, the
program received over $15 billion in funding. In addition, the program’s Selected
Acquisition Reports (SAR)—annual cost, status, and performance reports to Congress—

77 Transcript of hearing as posted at CQ.com.
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provide only aggregate program cost for all three ships currently in the class, a practice that
limits transparency into individual ship costs. As a result, Congress has diminished ability
to oversee one of the most expensive programs in the defense portfolio.78
February 2016 Navy Testimony
The Navy testified in 2016 that
The Navy is committed to delivering the lead ship of the class, Gerald R Ford (CVN 78)
within the $12.887 billion congressional cost cap. Sustained efforts to identify cost
reductions and drive improved cost and schedule performance on this first-of-class aircraft
carrier have resulted in highly stable cost performance since 2011. Based on lessons
learned on CVN 78, the approach to carrier construction has undergone an extensive
affordability review and the Navy and the shipbuilder have made significant changes on
CVN 79 to reduce the cost to build the ship. The benefits of these changes in build strategy
and resolution of first-of-class impacts experienced on CVN 78 are evident in early
production labor metrics on CVN 79. These efforts are ongoing and additional process
improvements continue to be identified.
Alongside the Navy’s efforts to reduce the cost to build CVN 79, the FY 2016 National
Defense Authorization Act reduced the cost cap for follow ships in the CVN 78 class from
$11,498 million to $11,398 million. To this end, the Navy has further emphasized stability
in requirements, design, schedule, and budget, in order to drive further improvement to
CVN 79 cost. The FY 2017 President’s Budget requests funding for the most efficient build
strategy for this ship and we look for Congress’ full support of this request to enable CVN
79 procurement at the lowest possible cost....
... The Navy will deliver the CVN 79 within the cost cap using a two-phased strategy
wherein select ship systems and compartments that are more efficiently completed at a later
stage of construction - to avoid obsolescence or to leverage competition or the use of
experienced installation teams - will be scheduled for completion in the ship’s second phase
of production and test. Enterprise (CVN 80) began construction planning and long lead
time material procurement in January 2016 and construction is scheduled to begin in 2018.
The FY 2017 President’s Budget request re-phases CVN 80 funding to support a more
efficient production profile, critical to performance, below the cost cap. CVN 80 planning
and construction will continue to leverage class lessons learned to achieve cost and risk
reduction, including efforts to accelerate production work to earlier phases of construction,
where work is more cost efficient.79
October 2015 Senate Armed Services Committee Hearing
Cost growth and other issues in the CVN-78 program were reviewed at an October 1, 2015,
hearing before the Senate Armed Services Committee. Below are excerpts from the prepared
statements of the witnesses at the hearing.

78 Government Accountability Office, Ford-Class Aircraft Carrier[:] Follow-On Ships Need More Frequent and
Accurate Cost Estimates to Avoid Pitfalls of Lead Ship, GAO-17-575, June 2017, summary page. See also Jason
Sherman, “DOD Plans Independent Cost Estimates for All Follow-On Ford Class Ships,” Inside the Navy, June 19,
2017.
79 Statement of the Honorable Sean J. Stackley, Assistant Secretary of the Navy (Research, Development and
Acquisition), and Vice Admiral Joseph P. Mulloy, Deputy Chief of Naval Operations for Integration of Capabilities
and Resources, and Lieutenant General Robert S. Walsh, Deputy Commandant, Combat Development and Integration
& Commanding General, Marine Corps Combat Development Command, before the Subcommittee on Seapower and
Projection Forces of the House Armed Services Committee on Department of the Navy Seapower and Projection
Forces Capabilities, February 25, 2016, pp. 8-9.
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OSD ASD Testimony
The prepared statement of the Assistant Secretary of Defense (Acquisition) within the Office of
the Secretary of Defense (OSD) states the following in part:
By 2000, the CVN(X) Acquisition Strategy that had been proposed by the Navy was an
evolutionary, three-step development of the capabilities planned for the CVN. This
evolutionary strategy intending to mature technology and align risk with affordability
originally involved using the last ship of the CVN 68 NIMITZ Class, USS GEORGE H.
W. BUSH (CVN 77), as the starting point for insertion of some near term technology
improvements including information network technology and the new Dual Band Radar
(DBR) system from the DD(X) (now DDG 1000) program, to create an integrated warfare
system that combined the ship’s combat system and air wing mission planning functions.
However, the then incoming Secretary of Defense Donald Rumsfeld in 2002 directed re-
examination of the CVN program, among others, to reduce the overall spend of the
department and increase the speed of delivery to the warfighters. As a result of the
SECDEF’s direction, the Navy proposed to remove the evolutionary approach and included
a new and enlarged flight deck, an increased allowance for future technologies (including
electric weapons), and an additional manpower reduction of 500 to 800 fewer sailors to
operate. On December 12, 2002, a Program Decision Memorandum approved by then
Deputy Secretary of Defense Paul Wolfowitz codified this Navy proposal and gave this
direction back to the DOD enterprise. The ship was renamed the CVN-21 to highlight these
changes. By Milestone B in April 2004, the Navy had evaluated the technologies intended
for three ships, removed some of them, and consolidated the remaining ones into a single
step of capability improvement on the lead ship. The new plan acknowledged
technological, cost, and schedule challenges were being put on a single ship, but assessed
this was achievable. The Acting USD AT&L (Michael Wynne) at that milestone also
directed the Navy to use a hybrid of the Service Cost Position and Independent Cost
Estimate (ICE) to baseline the program funding in lieu of the ICE, (although one can easily
argue even the ICE was optimistic given these imposed circumstances).
By 2004, DOD and Congressional leadership had lost confidence in the acquisition system,
and Deputy Secretary of Defense Gordon England established the Defense Acquisition
Performance Assessment (DAPA) panel to conduct a sweeping and integrated assessment
of “every aspect” of acquisition. The result was the discovery that the Industrial Base had
consolidated, that excessive oversight and complex acquisition processes were cost and
schedule drivers, and a focus on requirements stability was key to containing costs. From
this, a review of the requirements of the CVN resulted in a revised and solidified “single
ship” Operational Requirements Document (ORD) for the FORD Class as defined today,
with the CVN 78 as lead ship.
On the heels of a delay because of the budgetary constraints in 2006, the start of the
construction of CVN 78 was delayed until 2008, but the schedule for delivery was held
constant, further compounding risks and costs. The Navy’s testimony covers these
technical and schedule risks and concurrency challenges well.
By 2009, this Committee had issued a floor statement in support of the Weapon Systems
Acquisition Reform Act (WSARA). Congress was now united in its pursuit of acquisition
reform and, in concert, USD AT&L re-issued and updated the Department of Defense’s
acquisition instruction (DoDI 5000.2) in 2008. WSARA included strengthening of the
‘Nunn-McCurdy” process with requires DOD to report to Congress when cost growth on
a major program breaches a critical cost growth threshold. This legislation required a root-
cause assessment of the program and assumed program termination within 60 days of
notification unless DOD certified in writing that the program remained essential to national
security.
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WSARA had real impact on the CVN 78, as by 2008 and 2009 the results of all the previous
decisions were instantiated in growth of cost and schedule. Then USD AT&L John Young
required the Navy to provide a list of descoping efforts and directed the Navy to have an
off-ramp back to steam catapults if the Electromagnetic Aircraft Launching System
(EMALS) remained a problem for the program. He also directed an independent review of
all of the CVN 78 technologies by a Defense Support Team (DST). Prior to the DST, the
Navy had chartered a Program Assessment Review (PAR) with USD (AT&L) participation
of EMALS/Advanced Arresting Gear (AAG) versus steam. One of the key PAR findings
was converting the EMALS and AAG production contracts to firm, fixed price contracts
to cap cost growth and imposed negative incentives for late delivery.
The Dual Band Radar (DBR) cost and risk growth was a decision by-product of the DDG
1000 program Nunn-McCurdy critical unit cost breach in 2010. Faced with a need to reduce
cost on the DDG 1000 program and the resultant curtailment of the program, the
expectation of development costs being borne by the DDG 1000 program was no longer
the case and all of the costs associated with the S-band element development and a higher
share of the X-band element then had to be supported by the CVN 78 program.
The design problems encountered with AAG development have had the most deleterious
effects on CVN 78 construction of any of the three major advanced technologies including
EMALS and DBR. Our view of AAG is that these engineering design problems are now
in the past and although delivery of several critical components have been delayed, the
system will achieve its needed capabilities before undergoing final operational testing prior
to deployment of the ship. Again, reliability growth is a concern, but this cannot be
improved until a fully functional system is installed and operating at the Lakehurst, New
Jersey land based test site, and on board CVN 78.
With the 2010 introduction by then USD AT&L Ashton Carter (now in its third iteration
by under USD AT&L Frank Kendall) of the continuous process improvement initiative
that was founded in best business practices and WSARA called “Better Buying Power,”
the CVN underwent affordability, “Should Cost,” and requirements assessment. Navy’s
use of the “Gate” process has stabilized the cost growth and reset good business practices.
However, there is still much to do. We are in the testing phase of program execution prior
to deployment and we had been concerned about the timing of the Full Ship Shock Trial
(FSST). After balancing the operational and technical risks, the Department decided to
execute FSST on CVN 78 prior to deployment.
EMALS and AAG are also a concern with regard to final operational testing stemming
from the development difficulties that each experienced. The Navy still needs to complete
a significant amount of land-based testing to enable certification of the systems to launch
and recover the full range of aircraft that it is required to operate under both normal and
emergency conditions. This land-based testing is planned to complete before the final at-
sea operational testing for these systems begins....
USD AT&L continues to work with Navy to tailor the program and ensure appropriate
oversight at both the Navy Staff level as well as OSD. Our review of the Navy’s plan for
maintaining control of the cost for CVN 79 included an understanding of the application
of lessons learned from the construction of CVN 78 along with the application of a more
efficient construction plan for the ship including introduction of competition where
possible. We have established an excellent relationship with the Navy to work together to
change process and policies that have impacted the ability of the program to succeed, to
include revitalizing the acquisition workforce and their skills.
We are confident in the Navy’s plan for CVN 79 and CVN 80 and, as such, Under Secretary
Kendall recently authorized the Navy to enter into the detail design and construction phase
for CVN 79 and to enter into advanced procurement for long lead time materials for CVN
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80 construction. OSD and the Navy are committed to delivering CVN 79 within the limits
of the cost cap legislated for this ship.80
OSD DOT&E Testimony
The prepared statement of the Director, Operational Test & Evaluation (DOT&E), within OSD
states the following in part:
The Navy intends to deliver CVN 78 early in calendar year 2016, and to begin initial
operational test and evaluation (IOT&E) in late calendar year 2017. However, the Navy is
in the process of developing a new schedule, so some dates may change. Based on the
current schedule, between now and the beginning of IOT&E, the CVN 78 program is
proceeding on an aggressive schedule to finish development, testing, troubleshooting, and
correction of deficiencies for a number of new, complex systems critical to the warfighting
capabilities of the ship. Low or unknown reliability and performance of the Advanced
Arresting Gear (AAG), the Electromagnetic Aircraft Launch System (EMALS), the Dual
Band Radar (DBR), and the Advanced Weapons Elevators (AWE) are significant risks to
a successful IOT&E and first deployment, as well as to achieving the life-cycle cost
reductions the Navy has estimated will accrue for the Ford-class carriers. The maturity of
these systems is generally not at the level that would be desired at this stage in the program;
for example, the CVN 78 test program is revealing problems with the DBR typical of
discoveries in early developmental testing. Nonetheless, AAG, EMALS, DBR, and AWE
equipment is being installed on CVN 78, and in some cases, is undergoing shipboard
checkout. Consequently, any significant issues that testing discovers before CVN 78’s
schedule-driven IOT&E and deployment will be difficult, or perhaps impossible, to
address.
Resolving the uncertainties in the reliability and performance of these systems is critical to
CVN 78’s primary function of conducting combat operations. CVN 78 has design features
intended to enhance its ability to launch, recover, and service aircraft. EMALS and AAG
are key systems planned to provide new capabilities for launching and recovering aircraft
that are heavier and lighter than typically operated on Nimitz-class carriers. DBR is
intended to enhance radar coverage on CVN 78 in support of air traffic control and ship
self-defense. DBR is planned to reduce some of the known sensor limitations on Nimitz-
class carriers that utilize legacy radars. The data currently available to my office indicate
EMALS is unlikely to achieve the Navy’s reliability requirements. (The Navy indicates
EMALS reliability is above its current growth curve, which is true; however, that growth
curve was revised in 2013, based on poor demonstrated performance, to achieve EMALS
reliability on CVN 78 a factor of 15 below the Navy’s goal.) I have no current data
regarding DBR or AWE reliability, and data regarding the reliability of the re-designed
AAG are also not available. (Poor AAG reliability in developmental testing led to the need
to re-design components of that system.) In addition, performance problems with these
systems are continuing to be discovered. If the current schedule for conducting the ship’s
IOT&E and first deployment remain unchanged, reliability and performance shortfalls
could degrade CVN 78’s ability to conduct flight operations.
Due to known problems with current aircraft carrier combat systems, there is significant
risk CVN 78 will not achieve its self-defense requirements. Although the CVN 78 design
incorporates several combat system improvements relative to the Nimitz-class, these
improvements (if achieved) are unlikely to correct all of the known shortfalls. Testing on
other ships with similar combat systems has highlighted deficiencies in weapon
employment timelines, sensor coverage, system track management, and deficiencies with

80 Statement of Hon Katharina McFarland, Assistant Secretary of Defense (Acquisition), Before the Senate Armed
Services Committee on Procurement, Acquisition, Testing and Oversight of the Navy’s Gerald R. Ford Class Aircraft
Carrier Program, October 1, 2015, 5 pp.
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the recommended engagement tactics. Most of these limitations are likely to affect CVN
78 and I continue to view this as a significant risk to the CVN 78’s ability to defend itself
against attacks by the challenging anti-ship cruise missile and other threats proliferating
worldwide.
The Navy’s previous decision to renege on its original commitment to conduct the Full
Ship Shock Trial (FSST) on CVN 78 before her first deployment would have put CVN 78
at risk in combat operations. This decision was reversed in August 2015 by the Deputy
Secretary of Defense. Historically, FSSTs for new ship classes have identified for the first
time numerous mission-critical failures the Navy had to address to ensure the new ships
were survivable in combat. We can expect that CVN 78’s FSST results will have significant
and substantial implications on future carriers in the Ford-class and any subsequent new
class of carriers.
I also have concerns with manning and berthing on CVN 78. The Navy designed CVN 78
to have reduced manning to reduce life-cycle costs, but Navy analyses of manning on CVN
78 have identified problems in manning and berthing. These problems are similar to those
seen on other recent ship classes such as DDG 1000 and the Littoral Combat Ship (LCS)....
There are significant risks to the successful completion of the CVN 78 IOT&E and the
ship’s subsequent deployment due to known performance problems and the low or
unknown reliability of key systems. For AAG, EMALS, AWE and DBR, systems that are
essential to the primary missions of the ship, these problems, if uncorrected, are likely to
affect CVN 78’s ability to conduct effective flight operations and to defend itself in combat.
The CVN 78 test schedule leaves little or no time to fix problems discovered in
developmental testing before IOT&E begins that could cause program delays. In the
current program schedule, major developmental test events overlap IOT&E. This overlap
increases the likelihood problems will be discovered during CVN 78’s IOT&E, with the
attendant risk to the successful completion of that testing and to the ship’s first deployment.
The inevitable lessons we will learn from the CVN 78 FSST will have significant
implications for CVN 78 combat operations, as well as for the construction of future
carriers incorporating the ship’s advanced systems; therefore, the FSST should be
conducted on CVN 78 as soon as it is feasible to do so.81
Navy Testimony
The prepared statement of the Navy witnesses at the hearing states the following in part:
In June 2000, the Department of Defense (DOD) approved a three-ship evolutionary
acquisition approach starting with the last NIMITZ Class carrier (CVN 77) and the next
two carriers CVNX1 (later CVN 78) and CVNX2 (later CVN 79). This approach
recognized the significant risk of concurrently developing and integrating new
technologies into a new ship design incrementally as follows:
• The design focus for the evolutionary CVN 77 was to combine information network
technology with a new suite of multifunction radars from the DDG 1000 program to
transform the ship’s combat systems and the air wing’s mission planning process into an
integrated warfare system.
• The design focus for the evolutionary CVNX1 (future CVN 78) was a new Hull,
Mechanical and Electrical (HM&E) architecture within a NIMITZ Class hull that included
a new reactor plant design, increased electrical generating capacity, new zonal electrical
distribution, and new electrical systems to replace steam auxiliaries under a redesigned
flight deck employing new Electromagnetic Aircraft Launch System (EMALS) catapults

81 Statement by J. Michael Gilmore, Director, Operational Test and Evaluation, Office of the Secretary of Defense,
Before the Senate Armed Services Committee, [October 1, 2015], 19 pp.
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together with aircraft ordnance and fueling “pit-stops”. Design goals for achieving reduced
manning and improved maintainability were also defined.
• The design focus for the evolutionary CVNX2 (future CVN 79) was a potential “clean-
sheet” design to “open the aperture” for capturing new but immature technologies such as
the Advanced Arresting Gear (AAG) and Advanced Weapons Elevators (AWE) that would
be ready in time for the third ship in the series; and thereby permit the experience gained
from design and construction of the first two ships (CVN 77 and CVN 78) to be applied to
the third ship (CVN 79).
Early in the last decade, however, a significant push was made within DOD for a more
transformational approach to delivering warfighting capability. As a result, in 2002, DOD
altered the program acquisition strategy by transitioning to the new aircraft carrier class in
a single transformational leap vice an incremental three ship strategy. Under the revised
strategy, CVN 77 reverted back to a “modified-repeat” NIMITZ Class design to minimize
risk and construction costs, while delaying the integrated warfare system to CVN 78.
Further, due to budget constraints, CVN 78 would start construction a year later (in 2007)
with a NIMITZ Class hull form but would entail a major re-design to accommodate all the
new technologies from the three ship evolutionary technology insertion plan.
This leap ahead in a single ship was captured in a revised Operational Requirements
Document (ORD) in 2004, which defined a new baseline that is the FORD Class today,
with CVN 78 as the lead ship. The program entered system development and
demonstration, containing the shift to a single ship acquisition strategy. The start of CVN
78 construction was then delayed by an additional year until 2008 due to budget constraints.
As a result, the traditional serial evolution of technology development, ship concept design,
detail design, and construction – including a total of 23 developmental systems
incorporating new technologies originally planned across CVN 77, CVNX1, CVNX2 -
were compressed and overlapped within the program baseline for the CVN 78. Today, the
Navy is confronting the impacts of this compression and concurrency, as well as changes
to assumptions made in the program planning more than a decade ago....
Given the lengthy design, development, and build span associated with major warships,
there is a certain amount of overlap or concurrency that occurs between the development
of new systems to be delivered with the first ship, the design information for those new
systems, and actual construction. Since this overlap poses cost and schedule risk for the
lead ship of the class, program management activities are directed at mitigating this overlap
to the maximum extent practicable.
In the case of the FORD Class, the incorporation of 23 developmental systems at various
levels of technical maturity (including EMALS, AAG, DBR, AWE, new propulsion plant,
integrated control systems) significantly compounded the inherent challenges associated
with accomplishing the first new aircraft carrier design in 40-years. The cumulative impact
of this high degree of concurrency significantly exceeded the risk attributed to any single
new system or risk issue and ultimately manifested itself in terms of delay and cost growth
in each element of program execution; development, design, material procurement
(government and contractor), and construction....
Shipbuilder actions to resolve first-of-class issues retired much of the schedule risks to
launch, but at an unstable cost. First-of-class construction and material delays led the Navy
to revise the launch date in March 2013 from July 2013 to November 2013. Nevertheless,
the four-month delay in launch allowed increased outfitting and ship construction that were
most economically done prior to ship launch, such as completion of blasting and coating
operations for all tanks and voids, installation of the six DBR arrays, and increased
installations of cable piping, ventilation, electrical boxes, bulkheads and equipment
foundations. As a result, CVN 78 launched at 70 percent complete and 77,000 tons
displacement – the highest levels yet achieved in aircraft carrier construction. This high
state of completion at launch enabled improved outfitting, compartment completion, an
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efficient transition into the shipboard test program, and the on-time completion of key
milestones such as crew move aboard.
With the advent of the shipboard test program, first time energization and grooming of new
systems have required more time than originally planned. As a result, the Navy expects the
sea trial schedule to be delayed about six to eight weeks. The exact impact on ship delivery
will be determined based on the results of these trials. The Navy expects no schedule delays
to CVN 78 operational testing and deployability due to the sea trials delay and is managing
schedule delays within the $12.887 billion cost cap.
Additionally, at delivery, AAG will not have completed its shipboard test program. The
program has not been able to fully mitigate the effect of a two-year delay in AAG
equipment deliveries to the ship. All AAG equipment has been delivered to the ship and
will be fully installed on CVN 78 at delivery. The AAG shipboard test and certification
program will complete in time to support aircraft launch and recovery operations in
summer 2016....
The Navy, in coordination with the shipbuilder and major component providers,
implemented a series of actions and initiatives in the management and oversight of CVN
78 that crossed the full span of contracting, design, material procurement, GFE, production
planning, production management and oversight. The Secretary of the Navy directed a
detailed review of the CVN 78 program build plan to improve end-to-end aircraft carrier
design, material procurement, production planning, build and test, the results of which are
providing benefit across all carriers. These corrective measures include:
• CVN 78 design was converted from a ‘level of effort, fixed fee’ contract to a completion
contract with a firm target and incentive fee. Shipbuilder cost performance has been on-
target or better since this contract change.
• CVN 78 construction fee was reduced, consistent with contract provisions. However, the
shipbuilder remains incentivized by the contract shareline to improve upon current cost
performance.
• Contract design changes are under strict control; authorized only for safety, damage
control, and mission-degrading deficiencies.
• Following a detailed “Nunn-McCurdy-like” review in 2008-2009, the Navy converted
the EMALS and AAG production contract to a firm, fixed price contract, capping cost
growth to each system.
• In 2011, Naval Sea Systems Command completed a review of carrier specifications with
the shipbuilder, removing or improving upon overly burdensome or unneeded
specifications that impose unnecessary cost on the program. Periodic reviews continue.
Much of the impact to cost performance was attributable to shipbuilder and government
material cost overruns. The Navy and shipbuilder have made significant improvements
upon material ordering and delivery to the shipyard to mitigate the significant impact of
material delays on production performance.
These actions include:
• The Navy and shipbuilder instituted optimal material procurement strategies and best
practices (structuring procurements to achieve quantity discounts, dual-sourcing to
improve schedule performance and leveraging competitive opportunities) from outside
supply chain management experts.
• The shipbuilder assigned engineering and material sourcing personnel to each of their key
vendors to expedite component qualifications and delivery to the shipyard.
• The shipbuilder inventoried all excess material procured on CVN 78 for transfer to CVN
79.
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• The Program Executive Officer (Carriers) has conducted quarterly Flag-level GFE
summits to drive cost reduction opportunities and ensure on-time delivery of required
equipment and design information to the shipbuilder.
The CVN 78 build plan, consistent with the NIMITZ Class, had focused foremost on
completion of structural and critical path work to support launching the ship on-schedule.
Achieving the program’s cost improvement targets required that CVN 78 increase its level
of completion at launch, from 60 percent to 70 percent. To achieve this and drive greater
focus on system completion:
• The Navy fostered a collaborative build process review by the shipbuilder with other Tier
1 private shipyards in order to benchmark its performance and identify fundamental
changes that are yielding marked improvement.
• The shipbuilder established specific launch metrics by system and increased staffing for
waterfront engineering and material expediters to support meeting those metrics. This
ultimately delayed launch, but drove up pre-outfitting to the highest levels for CVN new
construction which has helped stabilize cost and improve test program and compartment
completion performance relative to CVN 77.
• The shipbuilder linked all of these processes within a detailed integrated master schedule
that has provided greater visibility to performance and greater ability to control cost and
schedule performance across the shipbuilding disciplines.
These initiatives, which summarize a more detailed list of actions being implemented and
tracked as a result of the end-to-end review, were accompanied by important management
changes.
• In 2011, the Navy assigned a second tour Flag Officer with considerable carrier
operations, construction, and program management experience as the new Program
Executive Officer (PEO).
• The new PEO established a separate Program Office, PMS 379, to focus exclusively on
CVN 79 and CVN 80, which enables the lead ship Program Office, PMS 378, to focus on
cost control, schedule performance and the delivery of CVN 78.
• In 2012, the shipbuilder assigned a new Vice President in charge of CVN 78, a new Vice
President in charge of material management and purchasing, and a number of new general
ship foremen to strengthen CVN 78 performance.
• The new PEO and shipyard president began conducting bi-weekly launch readiness
reviews focused on cost performance, critical path issues and accomplishment of the targets
for launch completion. These bi-weekly reviews will continue through delivery.
• Assistant Secretary of the Navy (Research, Development, and Acquisition) (ASN
(RD&A)) conducts quarterly reviews of program progress and performance with the PEO
and shipbuilder to ensure that all that can be done to improve on cost performance is being
done.
The series of actions taken by the Navy and the shipbuilder are achieving the desired effect
of arresting cost growth, establishing stability, and have resulted in no changes in the
Government’s estimate at completion over the past four years. The Department of the Navy
is continuing efforts to identify cost reductions, drive improved cost and schedule
performance, and manage change. The Navy has established a rigorous process with the
shipbuilder that analyzes each contract change request to approve only those change
categories allowed within the 2010 ASN(RD&A) change order management guidance.
This guidance only allows changes for safety, contractual defects, testing and trial
deficiencies, statutory and regulatory changes that are accompanied by funding and value
engineering change proposals with instant contract savings. While the historical average
for contractual change level is approximately 10 percent of the construction cost for the
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lead ship of a new class, CVN 78 has maintained a change order budget of less than four
percent to date despite the high degree of concurrent design and development.
Finally, the Navy has identified certain areas of the ship whose completion is not required
for delivery, such as berthing spaces for the aviation detachment, and has removed this
work from the shipbuilder’s contract. This deferred work will be completed within the
ship’s budgeted end cost and is included within the $12,887 million cost estimate. By
performing this deferred work in the post-delivery period using CVN 78 end cost funding,
it can be competed and accomplished at lower cost and risk to the overall ship delivery
schedule....
The CVN 79 cost cap was established in 2006 and adjusted by the Secretary of the Navy
in 2013, primarily to address inflation between 2006 and 2013 plus $325 million of the
allowed increase for non-recurring engineering to incorporate design improvements for the
CVN 78 Class construction.
The Navy and the shipbuilder conducted an extensive affordability review of carrier
construction and made significant changes to deliver CVN 79 at the lowest possible cost.
These changes are focused on eliminating the largest impacts to cost performance
identified during the construction of CVN 78 as well as furthering improvements in future
carrier construction. The Navy outlined cost savings initiatives in its Report to Congress in
May, 2013, and is executing according to plan.
Stability in requirements, design, schedule, and budget, are essential to controlling and
improving CVN 79 cost, and therefore is of highest priority for the program. Requirements
for CVN 79 were “locked down” prior to the commencement of CVN 79 construction. The
technical baseline and allocated budget for these requirements were agreed to by the Chief
of Naval Operations and ASN(RD&A) and further changes to the baseline require their
approval, which ensures design stability and increases effectiveness during production. At
the time of construction contract award, CVN 79 has 100 percent of the design product
model complete (compared to 65 percent for CVN 78) and 80 percent of initial drawings
released. Further, CVN 79 construction benefits from the maturation of virtually all new
technologies inserted on CVN 78. In the case of EMALS and AAG, the system design and
procurement costs are understood, and CVN 79 leverages CVN 78 lessons learned....
A completed FORD Class design enabled the shipbuilder to fully understand the “whole
ship” bill of materials for CVN 79 construction and to more effectively manage the
procurement of those materials with the knowledge of material lead times and qualified
sources accrued from CVN 78 construction. The shipbuilder is able to order ship-set
quantities of material, with attendant cost benefits, and to ensure CVN 79 material will
arrive on time to support construction need. Extensive improvements have been put in
place for CVN 79 material procurement to drive both cost reductions associated with more
efficient procurement strategies and production labor improvements associated with
improved material availability. Improved material availability is also a critical enabler to
many construction efficiency improvements in CVN 79.
The shipbuilder has developed an entirely new material procurement and management
strategy for CVN 79. This new strategy consists of eight separate initiatives....
The shipbuilder and the Navy have performed a comprehensive review of the build strategy
and processes used in construction of CVN 78 Class aircraft carriers as well as consulted
with other Navy shipbuilders on best practices. As a result, the shipbuilder has identified
and implemented a number of changes in the way they build aircraft carriers, with a
dedicated focus on executing construction activities where they can most efficiently be
performed. The CVN 79 build sequence installs 20 percent more parts in shop, and 30
percent more parts on the final assembly platen, as compared to CVN 78. This work will
result in an increase in pre-outfitting and work being pulled to earlier stages in the
construction process where it is most efficiently accomplished....
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In conjunction with the Navy and the shipbuilder’s comprehensive review of the build
strategy and processes used in construction of CVN 78 Class aircraft carriers, a number of
design changes were identified that would result in more affordable construction. Some of
these design changes were derived from lessons learned in the construction of CVN 78 and
others seek to further simplify the construction process and drive cost down....
In addition to the major focus discussed above, the shipbuilder continues to implement
capital improvements to facilities that serve to reduce risk and improve productivity....
To enhance CVN 79 build efficiency and affordability, the Navy is implementing a two-
phase delivery plan. The two-phase strategy will allow the basic ship to be constructed and
tested in the most efficient manner by the shipbuilder (Phase I) while enabling select ship
systems and compartments to be completed in Phase II, where the work can be completed
more affordably through competition or the use of skilled installation teams....
The CVN 80 planning and construction will continue to leverage class lessons learned in
the effort to achieve cost and risk reduction for remaining FORD Class ships. The CVN 80
strategy seeks to improve on CVN 79 efforts to frontload as much work as possible to the
earliest phases of construction, where work is both predictable and more cost efficient....
While delivery of the first-of-class FORD has involved challenges, those challenges are
being addressed and this aircraft carrier class will provide great value to our Nation with
unprecedented and greatly needed warfighting capability at overall lower total ownership
cost than a NIMITZ Class CVN. The Navy has taken major steps to stem the tide of
increasing costs and drive affordability into carrier acquisition.82
GAO Testimony
The prepared statement of the GAO witness at the hearing states the following in part:
The Ford-class aircraft carrier’s lead ship began construction with an unrealistic business
case. A sound business case balances the necessary resources and knowledge needed to
transform a chosen concept into a product. Yet in 2007, GAO found that CVN 78 costs
were underestimated and critical technologies were immature—key risks that would impair
delivering CVN 78 at cost, on-time, and with its planned capabilities. The ship and its
business case were nonetheless approved. Over the past 8 years, the business case has
predictably decayed in the form of cost growth, testing delays, and reduced capability—in
essence, getting less for more. Today, CVN 78 is more than $2 billion over its initial
budget. Land-based tests of key technologies have been deferred by years while the ship's
construction schedule has largely held fast. The CVN 78 is unlikely to achieve promised
aircraft launch and recovery rates as key systems are unreliable. The ship must complete
its final, more complex, construction phase concurrent with key test events. While
problems are likely to be encountered, there is no margin for the unexpected. Additional
costs are likely.
Similarly, the business case for CVN 79 is not realistic. The Navy recently awarded a
construction contract for CVN 79 which it believes will allow the program to achieve the
current $11.5 billion legislative cost cap. Clearly, CVN 79 should cost less than CVN 78,
as it will incorporate lessons learned on construction sequencing and other efficiencies.
While it may cost less than its predecessor, CVN 79 is likely to cost more than estimated.
As GAO found in November 2014, the Navy’s strategy to achieve the cost cap relies on

82 Statement of The Honorable Sean J. Stackley, Assistant Secretary of the Navy (Research, Development and
Acquisition), Rear Admiral Donald E. Gaddis, Program Executive Officer, Tactical Aircraft, Department of the Navy,
Rear Admiral Thomas J. Moore, Program Executive Officer, Aircraft Carriers, Department of the Navy, Rear Admiral
Michael C. Manazir, Director, Air Warfare (OPNAV), Before the Senate Armed Services Committee on Procurement,
Acquisition, Testing, and Oversight of the Navy’s Gerald R. Ford Class Aircraft Carrier Program, October 1, 2015, 22
pp.
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optimistic assumptions of construction efficiencies and cost savings—including
unprecedented reductions in labor hours, shifting work until after ship delivery, and
delivering the ship with the same baseline capability as CVN 78 by postponing planned
mission system upgrades and modernizations until future maintenance periods.
Today, with CVN 78 over 92 percent complete as it reaches delivery in May 2016, and the
CVN 79 on contract, the ability to exercise oversight and make course corrections is
limited. Yet, it is not too late to examine the carrier’s acquisition history to illustrate the
dynamics of shipbuilding—and weapon system—acquisition and the challenges they pose
to acquisition reform. The carrier’s problems are by no means unique; rather, they are quite
typical of weapon systems. Such outcomes persist despite acquisition reforms the
Department of Defense and Congress have put forward—such as realistic estimating and
“fly before buy.” Competition with other programs for funding creates pressures to
overpromise performance at unrealistic costs and schedules. These incentives are more
powerful than policies to follow best acquisition practices and oversight tools. Moreover,
the budget process provides incentives for programs to be funded before sufficient
knowledge is available to make key decisions. Complementing these incentives is a
marketplace characterized by a single buyer, low volume, and limited number of major
sources. The decades-old culture of undue optimism when starting programs is not the
consequence of a broken process, but rather of a process in equilibrium that rewards
unrealistic business cases and, thus, devalues sound practices.83
July 2015 Press Report
A July 2, 2015, press report states the following:
The Navy plans to spend $25 million per year beginning in 2017 as a way to invest in
lowering the cost of building the services’ new Ford-class aircraft carriers, service officials
said.
“We will use this design for affordability to make new improvements in cost cutting
technologies that will go into our ships,” said Rear Adm. Michael Manazir, Director, Air
Warfare....
“We just awarded a contract to buy long lead item materials [for CVN-79] and lay out an
allocated budget for each of the components of that ship. We want to build the ship in the
most efficient manner possible,” Rear Adm. Thomas Moore, Program Executive Officer,
Carriers, said.
Navy leaders say the service is making positive strides regarding the cost of construction
for the USS Kennedy and plans to stay within the congressional cost cap of $11.498
billion....
The $25 million design for affordability initiative is aimed at helping to uncover innovative
shipbuilding techniques and strategies that will accomplish this and lower costs.
Moore said the goal of the program is to, among other things, remove $500 million from
the cost of the third Ford-class carrier, the USS Enterprise, CVN 80.
“It is finding a million here and a million there and eventually that is how you get a billion
dollars out of the ship from (CVN) 78 to (CVN) 79. The goal is to get another $500 million
out of CVN 80. The $25 million dollars is a pretty prudent investment if we can continue
to drive the cost of this class of ship down,” Moore told reporters recently.

83 Government Accountability Office, Ford Class Aircraft Carrier[:] Poor Outcomes Are the Predictable
Consequences of the Prevalent Acquisition Culture, GAO-16-84T, October 1, 2015, summary page. (Testimony Before
the Committee on Armed Services, U.S. Senate, Statement of Paul L. Francis, Managing Director Acquisition and
Sourcing Management.)
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Moore explained that part of the goal is to get to the point where a Ford-class carrier can
be built for the same amount of man-hours it took to build their predecessor ships, the
Nimitz-class carriers.
“We want to get back to the goal of being able to build it for historical Nimitz class levels
in terms of man hours for a ship that is significantly more capable and more complex to
build,” Moore added.
The money will invest in new approaches and explore the processes that a shipyard can use
to build the ship, Moore added.
“They’ve made a significant investment in these new welding machines. These new
welding machines allow the welder to use different configurations. This has significantly
improved the throughput that the shipyard has,” Moore said, citing an example of the kind
of thing the funds would be used for.
The funds will also look into whether new coatings for the ship or welding techniques can
be used and whether millions of feet of electrical cabling can be installed in a more efficient
manner, Moore added.
Other cost saving efforts assisted by the funding include the increased use of complex
assemblies, common integrated work packages, automated plate marking, weapons
elevator door re-design and vertical build strategies, Navy officials said.
Shipbuilders could also use a new strategy of having work crews stay on the same kind of
work for several weeks at a time in order to increase efficiency, Moore said. Also, some of
the construction work done on the USS Ford while it was in dry dock is now being done in
workshops and other areas to improve the building process, he added.84
June 2015 Press Reports
A June 29, 2015, press report states the following:
Newport News Shipbuilding will see cost reduction on the order of 18 percent fewer man
hours overall from the first Ford-class aircraft carrier to the second, according to a company
representative.
Ken Mahler, Newport News vice president of Navy programs, touted the shipyard's cost
savings on the John F. Kennedy (CVN-79) during a June 15 interview with Inside the Navy.
This reduction was facilitated by the investments the shipyard is making in carrier
construction, as well as lessons learned from the first ship, the Gerald R. Ford (CVN-78),
which will deliver next year.85
A June 23, 2015, press report states the following:
The Pentagon’s cost-assessment office now says the Navy’s second aircraft carrier in a
new class will exceed a congressionally mandated cost cap by $235 million.
That’s down from an April estimate that the USS John F. Kennedy, the second warship in
the new Ford class, would bust a $11.498 billion cap set by lawmakers by $370 million.86
The Navy maintains that it can deliver the ship within the congressional limit.

84 Kris Osborn, “Navy Launches New Affordability Plan for Ford-Class Carriers,” DOD Buzz, July 2, 2015.
85 Lara Seligman, “Newport News See 18 Percent Fewer Man Hours On Second Ford Carrier,” Inside the Navy, June
29, 2015.
86 See Anthony Capaccio, “Aircraft Carrier $370 Million Over Congressional Cost Cap,” Bloomberg News, May 19,
2015.
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“The original figure was a draft based on preliminary information,” Navy Commander Bill
Urban, a spokesman for the Pentagon’s Cost Assessment and Program Evaluation office,
said in an e-mail. As better information, such as updated labor rates, became available, the
office “revised its estimate to a more accurate number,” he said.87
A June 15, 2015, press report states the following:
[Rear Admiral Tom] Moore [program executive officer for aircraft carriers]. said the
program would save a billion dollars by decreasing the man hours needed to construct the
ship by 18 percent from CVN-78 to 79—down to about 44 million manhours. He said this
reduction is only a first step in taking cost ouot of the carrier program. The future Enterprise
(CVN-80) will take about 4 million manhours out, or another 10 percent reduction, for a
savings of about $500 million.
But beyond seeking ways to take cost out, the contract itself reduces the risk to the
government, Moore said.
“The main construction of the ship is now in a fixed price environment, so that switchover
really limits the government’s liability,” he said.
Without getting into specific dollar amounts due to business sensitivities, Moore explained
that “this is the lowest target fee we’ve ever had on any CVN new construction. Look at
tghe shape of the share [government-contractor cost] share lines, because the share lines at
the end of the day are a measure of risk. So where we’d like to get quickly to [a] 50/50
[share line], in past carrier contracts we’ve been out at 85/15, 90/10—which basically
means for every dollar over [the target cost figure, up to the ceiling cost figure], the
government picks up 85 cents on the dollar. And this contract very quickly gets to 50/50.
The other thing is ceiling price—on a fixed-price contract, the ceiling price is the
government’s maximum liability. And on this particular contract, again, it is the lowest
ceiling price we’ve ever had [for a CVN].”88
February 2015 Navy Testimony
At a February 25, 2015, hearing on Department of the Navy acquisition programs, Department of
the Navy officials testified the following:
The Navy is committed to delivering CVN 78 within the $12.887 billion Congressional
cost cap. Sustained efforts to identify cost reductions and drive improved cost and schedule
on this first-of-class aircraft carrier have resulted in highly stable performance since 2011.
Parallel efforts by the Navy and shipbuilder are driving down and stabilizing aircraft carrier
construction costs for the future John F Kennedy (CVN 79) and estimates for the future
Enterprise (CVN 80). As a result of the lessons learned on CVN 78, the approach to carrier
construction has undergone an extensive affordability review. The Navy and the
shipbuilder have made significant changes on CVN 79 to reduce the cost to build the ship
as detailed in the 2013 CVN 79 report to Congress. The benefits of these changes in build
strategy and resolution of first-of-class impacts on CVN 79 are evident in metrics showing
significantly reduced man-hours for completed work from CVN 78. These efforts are
ongoing and additional process improvements continue to be identified.
The Navy extended the CVN 79 construction preparation contract into 2015 to enable
continuation of ongoing planning, construction, and material procurement while capturing
lessons learned associated with lead ship construction and early test results. The continued

87 Anthony Capaccio, “Second New Carrier Now Seen Busting a Cost Cap by $235 Million,” Bloomberg News, June
23, 2015.
88 Megan Eckstein, “Navy: CVN-79 Contract Has Lowest Ceiling Price Ever; R&D Investment Will Take Out Further
Cost,” USNI News, June 15, 2015.
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negotiations of the detail design and construction (DD&C) contract afford an opportunity
to incorporate further construction process improvements and cost reduction efforts.
Award of the DD&C contract is expected in third quarter FY 2015. This will be a fixed
price-type contract.
Additionally, the Navy will deliver the CVN 79 using a two-phased strategy. This enables
select ship systems and compartments to be completed in a second phase, wherein the work
can be completed more efficiently through competition or the use of skilled installation
teams responsible for these activities. This approach, key to delivering CVN 79 at the
lowest cost, also enables the Navy to procure and install shipboard electronic systems at
the latest date possible.
The FY 2014 NDAA adjusted the CVN 79 and follow ships cost cap to $11,498 million to
account for economic inflation and non-recurring engineering for incorporation of lead
ship lessons learned and design changes to improve affordability. In transitioning from
first-of-class to first follow ships, the Navy has maintained Ford class requirements and the
design is highly stable. Similarly, we have imposed strict interval controls to drive changes
to the way we do business in order to ensure CVN 79 is delivered below the cost cap. To
this same end, the FY 2016 President’s Budget request aligns funding to the most efficient
build strategy for this ship and we look for Congress’ full support of this request to enable
CVN 79 to be procured at the lowest possible cost.
Enterprise (CVN 80) will begin long lead time material procurement in FY 2016. The FY
2016 request re-phases CVN 80 closer to the optimal profile, therefore reducing the overall
ship cost. The Navy will continue to investigate and will incorporate further cost reduction
initiatives, engineering efficiencies, and lessons learned from CVN 78 and CVN 79. Future
cost estimates for CVN 80 will be updated for these future efficiencies as they are
identified.89
May 2013 Navy Testimony
In its prepared statement for a May 8, 2013, hearing on Navy shipbuilding programs before the
Seapower subcommittee of the Senate Armed Services Committee, the Navy stated that
In 2011, the Navy identified spiraling cost growth [on CVN-78] associated with first of
class non-recurring design, contractor and government furnished equipment, and ship
production issues on the lead ship. The Navy completed an end-to-end review of CVN 78
construction in December 2011 and, with the shipbuilder, implemented a series of
corrective actions to stem, and to the extent possible, reverse these trends. While cost
performance has stabilized, incurred cost growth is irreversible....
As a result of lessons learned on CVN 78, the approach to carrier construction has
undergone an extensive affordability review; and the Navy and the shipbuilder have made
significant changes on CVN 79 that will reduce the cost to build the ship. CVN 79
construction will start with a complete design, firm requirements, and material
economically procured and on hand in support of production need. The ship’s build
schedule also provides for increased completion levels at each stage of construction with
resulting improved production efficiencies....
Inarguably, this new class of aircraft carrier brings forward tremendous capability and life-
cycle cost advantages compared to the NIMITZ-class it will replace. However, the design,

89 Statement of the Honorable Sean J. Stackley, Assistant Secretary of the Navy (Research, Development and
Acquisition) and Vice Admiral Joseph P. Mulloy, Deputy Chief of Naval Operations for Integration of Capabilities and
Resources and Lieutenant General Kenneth J. Glueck, Jr., Deputy Commandant, Combat Development and Integration
& Commanding General, Marine Corps Combat Development Command, Before the Subcommittee on Seapower and
Projection Forces of the House Armed Services Committee on Department of the Navy Seapower and Projection
Forces Capabilities, February 25, 2015, pp. 5-6.
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development and construction efforts required to overcome the technical challenges
inherent to these advanced capabilities have significantly impacted cost performance on
the lead ship. The Navy continues implementing actions from the 2012 detailed review of
the FORD-Class build plan to control cost and improve performance across lead and follow
ship contracts. This effort, taken in conjunction with a series of corrective actions with the
shipbuilder on the lead ship, will not recover costs to original targets for GERALD R.
FORD [CVN-78], but should improve performance on the lead ship while fully benefitting
CVN 79 and following ships of the class.90
In the discussion portion of the hearing, Sean Stackley, the Assistant Secretary of the Navy for
Research, Development and Acquisition (i.e., the Navy’s acquisition executive), testified that
First, the cost growth on the CVN-78 is unacceptable. The cost growth dates back in time
to the very basic concepts that went into take in the Nimitz-class and doing a total redesign
of the Nimitz class to get to a level of capability and to reduce operating and support cost
for the future carrier. Far too much risk was carried into the design of the first of the Ford-
class.
Cost growth stems to the design was moving at the time production started. The vendor
base that was responsible for delivering new components and material to support the ship
production was (inaudible) with new developments in the vendor base and production plan
do not account for the material ordering difficulties, the material delivery difficulties and
some of the challenges associated with building a whole new design compared to the
Nimitz....
Sir, for CVN-79, we have—we have held up the expenditures on CVN-79 as we go through
the details of—one, ensuring that the design of the 78 is complete and repeated for the 79s
[sic] that we start with a clean design.
Two, we're going through the material procurement. We brought a third party into
assessment material-buying practices at Newport News to bring down the cost of material.
And we're metering out the dollars for buying material until it hits the objectives that we're
setting for CVN-79 through rewriting the build plan on CVN-79.
If you take a look at how the 78 is being constructed, far too much work is being
accomplished late in the build cycle. So we are rewriting the build plan for CVN-79, do
more work in the shops where it’s more efficient, more work in the buildings where it’s
more efficient, less work in the dry dock, less work on the water. And then we're going
after the rates—the labor rates and the investments needed by the shipbuilder to achieve
these efficiencies.91
Later in the hearing, Stackley testified that
the history in shipbuilding is since you don't have a prototype for a new ship, the first of
class referred to as the lead ship is your prototype. And so you carry a lot of risk into the
construction of that first of class.
Also, given the nature that there’s a lengthy design development and build span associated
with ships, so there is a certain amount of overlap or concurrency that occurs between the
development of new systems that need to be delivered with the first ship, the incorporation

90 Statement of The Honorable Sean J. Stackley, Assistant Secretary of the Navy (Research, Development and
Acquisition) and Vice Admiral Allen G. Myers, Deputy Chief of Naval Operations for Integration of Capabilities and
Resources and Vice Admiral Kevin M. McCoy, Commander, Naval Sea Systems Command, Before the Subcommittee
on Seapower of the Senate Armed Services Committee on Department of the Navy Shipbuilding Programs, May 8,
2013, p. 8.
91 Transcript of hearing.
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of the design of those new systems and the actual construction. And so to the extent that
there is change in a new ship class then the risk goes up accordingly.
In the case of the CVN-78, the degree of change compared to the Nimitz was fairly
extraordinary all for good reasons, good intentions, increased capability, increased
survivability, significant reduction in operating and support costs. So there was a
determination that will take on this risk in order to get those benefits, and the case of the
CVN-78, those risks are driving a lot of the cost growth on the lead ship.
When you think about the follow ships, now you've got a stable design, now your vendor
base has got a production line going to support the production. Now you've got a build plan
and a workforce that has climbed up on the learning curve to drive cost down. So you can
look at—you can look at virtually every shipbuilding program and you'll see a significant
drop-off in cost from that first of class to the follow ships.
And then you look for a stable learning curve to take over in the longer term production of
a ship class.
Carriers are unique for a number of reasons, one of which we don't have an annual
procurement of carriers. They're spread out over a five and, in fact, in the case of 78 as
much as seven-year period. So in order to achieve that learning, there are additional
challenges associated with achieving that learning. And so we're going at it very
deliberately on the CVN-79 through the build plan with the shipbuilder to hit the line that
we've got to have—the cost reductions that we've got to have on the follow ships of the
class.92
March 2013 Navy Report
A March 2013 report to Congress on the Navy’s plan for building CVN-79 that was released to
the public on May 16, 2013, states the following in its executive summary:
As a result of the lessons learned on CVN 78, the approach to carrier construction has
undergone an extensive affordability review and the Navy and the shipbuilder have made
significant changes on CVN 79 that will significantly reduce the cost to build the ship.
These include four key construction areas:
— CVN 79 construction will start with a complete design and a complete bill of material
— CVN 79 construction will start with a firm set of stable requirements
— CVN 79 construction will start with the development complete on a host of new
technologies inserted on CVN 78 ranging from the Electromagnetic Aircraft Launch
System (EMALS), the Dual Band Radar, and the reactor plant, to key valves in systems
throughout the ship
— CVN 79 construction will start with an ‘optimal build’ plan that emphasizes the
completion of work and ship outfitting as early as possible in the construction process to
optimize cost and ultimately schedule performance.
In addition to these fundamentals, the Navy and the shipbuilder are tackling cost through a
series of other changes that when taken over the entire carrier will have a significant impact
on construction costs. The Navy has also imposed cost targets and is aggressively pursuing
cost reduction initiatives in its government furnished systems. A detailed accounting of
these actions is included in this report.

92 Transcript of hearing.
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The actions discussed in this report are expected to reduce the material cost of CVN 79 by
10-20% in real terms from CVN 78, to reduce the number of man-hours required to build
the CVN 79 by 15-25% from CVN 78, and to reduce the cost of government furnished
systems by 5-10% in real terms from CVN 78.93
For the full text of the Navy’s report, see the Appendix C.
March 2012 Navy Letter to Senator McCain
Secretary of the Navy Ray Mabus, in a letter with attachment sent in late March 2012 to Senator
John McCain on controlling cost growth in CVN-78, stated the following:
Dear Senator McCain:
Thank you for your letter of March 21, 2012, regarding the first-of-class aircraft carrier,
GERALD R. FORD (CVN 78). Few major programs carry greater importance or greater
impact on national security, and no other major program comprises greater scale and
complexity than the Navy’s nuclear aircraft carrier program. Accordingly, successful
execution of this program carries the highest priority within the Department of the Navy.
I have shared in the past my concern when I took office and learned the full magnitude of
new technologies and design change being brought to the FORD. Requirements drawn up
more than a decade prior for this capital ship drove development of a new reactor plant,
propulsion system, electric plant and power distribution system, first of kind
electromagnetic aircraft launching system, advanced arresting gear, integrated warfare
system including a new radar and communications suite, air conditioning plant, weapons
elevators, topside design, survivability improvements, and all new interior arrangements.
CVN 78 is a near-total redesign of the NIMITZ Class she replaces. Further, these major
developments, which were to be incrementally introduced in the program, were directed in
2002 to be integrated into CVN 78 in a single step. Today we are confronting the cost
impacts of these decisions made more than a decade ago.
In my August 29, 2011 letter, I provided details regarding these cost impacts. At that time,
I reported the current estimate for the Navy’s share of the shipbuilder’s construction
overrun, $690 million, and described that I had directed an end-to-end review to identify
the changes necessary to improve cost for carrier design, material procurement, planning,
build and test. The attached white paper provides the findings of that review and the steps
we are taking to drive affordability into the remaining CVN 78 construction effort. Pending
the results of these efforts, the Navy has included the ‘fact of life’ portion of the stated
overrun in the Fiscal Year 2013 President’s Budget request. The review also highlighted
the compounding effects of applying traditional carrier build planning to a radically new
design; the challenges inherent to low-rate, sole-source carrier procurement; and the impact
of external economic factors accrued over 15 years of CVN 78 procurement—all within
the framework of cost-plus contracts. The outlined approach for ensuring CVN 79 and
follow ship affordability focuses equally upon tackling these issues while applying the
many lessons learned in the course of CVN 78 procurement.
As always, if I may be of further assistance, please let me know.
Sincerely, [signed] Ray Mabus
Attachment: As stated

93 Aircraft Carrier Construction, John F Kennedy (CVN 79), Report to Congress, March 2013, p. 3. An annotation on
the report’s cover page indicates that the report was authorized for public release on May 16, 2013. The report was
posted at InsideDefense.com (subscription required) on June 21, 2013. See also Megan Eckstein, “Navy Plan To
Congress Outlines New Strategies To Save On CVN-79,” Inside the Navy, June 24, 2013.
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Copy to: The Honorable Carl Levin, Chairman
[Attachment]
Improving Cost Performance on CVN 78
CVN 78 is nearing 40 percent completion. Cost growth to-date is attributable to increases
in design, contractor furnished material, government furnished material (notably, the
Electromagnetic Aircraft Launching System (EMALS), Advanced Arresting Gear (AAG),
and the Dual Band Radar (DBR)), and production labor performance. To achieve the best
case outcome, the program must execute with zero additional cost growth in design and
material procurement, and must improve production performance. The Navy and the
shipbuilder have implemented a series of actions and initiatives in the management and
oversight of CVN 78 that cross the full span of contracting, design, material procurement,
government furnished equipment, production planning, production, management and
oversight.
CVN 78 is being procured within a framework of cost-plus contracts. Within this
framework, however, the recent series of action taken by the Navy to improve contract
effectiveness are achieving the desired effect of incentivizing improved cost performance
and reducing government exposure to further cost growth.
 CVN 78 design has been converted from a ‘level of effort, fixed fee’ contract to a
completion contract with a firm target and incentive fee. Shipbuilder cost performance
has been on-target or better since this contract was changed.
 CVN 78 construction fee has been retracted, consistent with contract performance.
However, the shipbuilder is incentivized by the contract shareline to improve upon
current performance to meet agreed-to cost goals.
 Contract design changes are under strict control; authorized only for safety, damage
control, mission-degrading deficiencies, or similar. Adjudicated changes have been
contained to less than 1 percent of contract target price.
 The Navy converted the EMALS and AAG production contract to a firm, fixed price
contract, capping cost growth to that system and imposing negative incentives for late
delivery.
 Naval Sea Systems Command is performing a review of carrier specifications with the
shipbuilder, removing or improving upon overly burdensome or unneeded
specifications that impose unnecessary cost on the program.
The single largest impact to cost performance to-date has been contractor and government
material cost overruns. These issues trace to lead ship complexity and CVN 78
concurrency, but they also point to inadequate accountability for carrier material
procurement, primarily during the ship’s advance procurement period (2002-2008).
These effects cannot be reversed on CVN 78, but it is essential to improve upon material
delivery to the shipyard to mitigate the significant impact of material delays on production
performance. Equally important, the systemic material procurement deficiencies must be
corrected for CVN 79. To this end, the Navy and shipbuilder have taken the following
actions.
 The Navy has employed outside supply chain management experts to develop optimal
material procurement strategies. The Navy and the shipbuilder are reviewing
remaining material requirements to employ these best practices (structuring
procurements to achieve quantity discounts, dual-sourcing to improve schedule
performance and leverage competitive opportunities, etc.).
 The shipbuilder has assigned engineering and material sourcing personnel to each of
their key vendors to expedite component qualifications and delivery to the shipyard.
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 The shipbuilder is inventorying all excess material procured on CVN 78 for transfer
to CVN 79 (cost reduction to CVN 78), as applicable.
 The Program Executive Officer (Carriers) is conducting quarterly flag-level
government furnished equipment summits to drive cost reduction opportunities and
ensure on-time delivery of required equipment and design information to the
shipbuilder.
The most important finding regarding CVN 78 remaining cost is that the CVN 78 build
plan, consistent with the NIMITZ class, focuses foremost on completion of structural and
critical path work to support launching the ship on-schedule. This emphasis on structure
comes at the expense of completing ship systems, outfitting, and furnishing early in the
build process and results in costly, labor-intensive system completion activity during later;
more costly stages of production. Achieving the program’s cost improvement targets will
require that CVN 78 increase its level of completion at launch, from current estimate of 60
percent to no less than 65 percent. To achieve this goal and drive greater focus on system
completion:
 the Navy fostered a collaborative build process review by the shipbuilder with other
Tier 1 private shipyards in order to benchmark its performance arid identify
fundamental changes that would yield marked improvement;
 the shipbuilder has established specific launch metrics by system (foundations,
machinery, piping, power panels, vent duct, lighting, etc.) and increased staffing for
waterfront engineering and material expediters to support meeting these metrics;
 the shipbuilder has linked all of these processes within a detailed integrated master
schedule, providing greater visibility to current performance and greater ability to
control future cost and schedule performance across the shipbuilding disciplines;
 the Navy and shipbuilder are conducting Unit Readiness Reviews of CVN 78 erection
units to ensure that the outfitted condition of each hull unit being lifted into the dry-
dock contains the proper level of outfitting.
These initiatives, which summarize a more detailed list of actions being implemented and
tracked as result of the end-to-end review, are accompanied by important management
changes.
 The shipbuilder has assigned a new Vice President in charge of CVN 78, a new Vice
President in charge of material management and purchasing, and a number of new
general shop foreman to strengthen CVN 78 performance.
 The Navy has assigned a second tour Flag Officer with considerable carrier operations,
construction, and program management experience as the new Program-Executive
Officer (PEO).
 The PEO and shipyard president conduct bi-weekly launch readiness reviews focusing
on cost performance, critical path issues and accomplishment of the target for launch
completion.
 The Assistant Secretary of the Navy (Research, Development, and Acquisition)
conducts a monthly review of program progress and performance with the PEO and
shipbuilder, bringing to bear the full weight of the Department, as needed, to ensure
that all that can be done to improve on cost performance is being done.
Early production performance improvements can be traced directly to these actions,
however, significant further improvement is required. To this end, the Navy is conducting
a line-by-line review of all ‘cost to-go’ on CVN 78 to identify further opportunity to reduce
cost and to mitigate risk.
Improving Cost Performance on CVN 79
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CVN 79 Advance Procurement commenced in 2007 with early construction activities
following in 2011. Authorization for CVN 79 procurement is requested in Fiscal Year 2013
President’s Budget request with the first year of incremental funding. Two years have been
added to the CVN 79 production schedule in this budget request, afforded by the fact that
CVN 79 will replace CVN 68 when she inactivates. To improve affordability for CVN 79,
the Navy plans to leverage this added time by introducing a fundamental change to the
carrier procurement approach and a corresponding shift to the carrier build plan, while
incorporating CVN 78 lessons learned.
The two principal ‘documents’ which the Navy and shipbuilder must ensure are correct
and complete at the outset of CVN 79 procurement are the design and the build plan.
Design is governed by rules in place that no changes will be considered for the follow ship
except changes necessary to correct design deficiencies on the lead ship, fact of life changes
to correct obsolescence issues, or changes that will result in reduced cost for the follow
ship. Exceptions to these rules must be approved by the JROC, or designee. Accordingly,
the Navy is requesting procurement authority for CVN 79 with the Design Product Model
complete and construction drawings approximately 95 percent complete (compared to
approximately 30 percent complete at time of lead ship authorization).
As well, first article testing and certification will be complete for virtually all major new
equipments introduced in the FORD Class. At this point in time, the shipbuilder has
developed a complete bill of material for CVN 79. The Navy is working with the
shipbuilder to ensure that the contractor’s material estimates are in-line with Navy ‘should
cost’ estimates; eliminating non-recurring costs embedded in lead ship material, validating
quantities, validating escalation indices, incorporating lead ship lessons learned. The Navy
has increased its oversight of contractor furnished material procurement, ensuring that
material procurement is competed (where competition is available); that it is fixed priced;
that commodities are bundled to leverage economic order quantity opportunities; and that
the vendor base capacity and schedule for receipt supports the optimal build plan being
developed for production.
In total, the high level of design maturity and material certification provides a stable
technical baseline for material procurement cost and schedule performance, which are
critical to developing and executing an improved, reliable build plan.
In order to significantly improve production labor performance, based on timely receipt of
design and material, the Navy and shipbuilder are reviewing and implementing changes to
the CVN 79 build plan and affected facilities. The guiding principles are:
 maximize planned work in the shops and early stages of construction;
 revise sequence of structural unit construction to maximize learning curve
performance through ‘families of units’ and work cells;
 incorporate design changes to improve FORD Class producibility;
 increase the size of erection units to eliminate disruptive unit breaks and improve unit
alignment and fairness;
 increase outfitting levels for assembled units prior to erection in the dry-dock;
 increase overall ship completion levels at each key event.
The shipbuilder is working on detailed plans for facility improvements that will improve
productivity, and the Navy will consider incentives for capital improvements that would
provide targeted return on investment, such as:
 increasing the amount of temporary and permanent covered work areas;
 adding ramps and service towers for improved access to work sites and the dry-dock;
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 increasing lift capacity to enable construction of larger, more fully outfitted super-lifts:
An incremental improvement to carrier construction cost will fall short of the improvement
necessary to ensure affordability for CVN 79 and follow ships. Accordingly, the
shipbuilder has established aggressive targets for CVN 79 to drive the game-changing
improvements needed for carrier construction. These targets include:
 75 percent Complete at Launch (15 percent> [i.e., 15 percent greater than] FORD);
 85-90 percent of cable pulled prior to Launch (25-30 percent> FORD);
 30 percent increase in front-end shop work (piping details, foundations, etc);
 All structural unit hot work complete prior to blast and paint;
 25 percent increase to work package throughput;
 100 percent of material available for all work packages in accordance with the
integrated master schedule;
 zero delinquent engineering and planning products;
 resolution of engineering problems in < 8 [i.e., less than 8] hours.
In parallel with efforts to improve shipbuilder costs, the PEO is establishing equally
aggressive targets to reduce the cost of government furnished equipment for CVN 79;
working equipment item by equipment item with an objective to reduce overall GFE costs
by ~$500 million. Likewise, the Naval Sea Systems Command is committed to continuing
its ongoing effort to identify specification changes that could significantly reduce cost
without compromising safety and technical rigor.
The output of these efforts comprises the optimal build plan for CVN 79 and follow, and
will be incorporated in the detail design and construction baseline for CVN 79. CVN 79
will be procured using a fixed price incentive contract.94

94 Letter and attachment from Secretary of the Navy Ray Mabus to Senator John McCain, undated but posted at
InsideDefnse.com (subscription required) on March 27, 2012. InsideDefense.com’s description of the letter states that it
is dated March 26, 2012.
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Appendix C. March 2013 Navy Report to Congress
on Construction Plan for CVN-79
This appendix reprints a March 2013 Navy report to Congress on the Navy’s construction plan
for CVN-79.95

95 Aircraft Carrier Construction, John F Kennedy (CVN 79), Report to Congress, March 2013, 17 pp. An annotation on
the report’s cover page indicates that the report was authorized for public release on May 16, 2013. The report was
posted at InsideDefense.com (subscription required) on June 21, 2013. See also Megan Eckstein, “Navy Plan To
Congress Outlines New Strategies To Save On CVN-79,” Inside the Navy, June 24, 2013.
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Author Information

Ronald O'Rourke

Specialist in Naval Affairs

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