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

Updated June 7, 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 (Gerald R. Ford) was procured in FY2008. The Navy’s proposed FY2020 budget
estimates the ship’s procurement cost at $13,084.0 million (i.e., about $13.1 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. The Navy is currently
working to complete construction, testing, and certification of the ship’s 11 weapons elevators.
CVN-79 (John F. Kennedy) was procured in FY2013. The Navy’s proposed FY2020 budget
estimates the ship’s procurement cost at $11,327.4 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 (Enterprise) and CVN-81 (not yet named) are being procured under a two-ship block
buy contract that was authorized by 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). The
provision permitted the Navy to add CVN-81 to the existing contract for building CVN-80 after
the Department of Defense (DOD) made certain certifications to Congress. DOD made the
certifications on December 31, 2018, and the Navy announced the award of the contract on
January 31, 2019. Compared to the estimated procurement costs for CVN-80 and CVN-81 in the
Navy’s FY2019 budget submission, the Navy estimates under its FY2020 budget submission that
the two-ship block buy contract will reduce the cost of CVN-80 by $246.6 million and the cost of
CVN-81 by $2,637.3 million, for a combined reduction of $2,883.9 million (i.e., about $2.9
billion). Using higher estimated baseline costs for CVN-80 and CVN-81 taken from a December
2017 Navy business case analysis, the Navy estimates under its FY2020 budget submission that
the two-ship contract will reduce the cost of CVN-80 by $770.9 million and the cost of CVN-81
by $3,086.3 million, for a combined reduction of $3,857.2 million (i.e., about $3.9 billion).
CVN-80 was procured in FY2018. The Navy’s proposed FY2020 budget estimates the ship’s
procurement cost at $12,335.1 million (i.e., about $12.3 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-FY2025 using incremental funding authorized by Section 121(c) of P.L. 115-232. The
Navy’s proposed FY2020 budget requests $1,062.0 million in procurement funding for the ship.
The ship is scheduled for delivery to the Navy in March 2028.
Prior to the awarding of the two-ship block buy contract, CVN-81 was scheduled to be procured
in FY2023. Following the awarding of the two-ship block buy contract, the Navy has chosen to
show CVN-81 in its FY2020 budget submission as a ship to be procured in FY2020 (as opposed
to a ship that was procured in FY2019). The Navy’s FY2020 budget submission estimates the
ship’s procurement cost at $12,450.7 million (i.e., about $12.5 billion) in then-year dollars. The
Navy plans to fully fund the ship beginning in FY2019 and extending beyond FY2026 using
incremental funding authorized by Section 121(c) of P.L. 115-232. The Navy’s proposed FY2020
budget requests $1,285.0 million in procurement funding for the ship. The ship is scheduled for
delivery to the Navy in February 2032.
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Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress

The Navy’s FY2020 budget submission proposed to not fund the mid-life nuclear refueling
overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier CVN-75
(Harry S. Truman), and to instead retire the ship around FY2024 and also deactivate one of the
Navy’s carrier air wings at about the same time. On April 30, 2019, however, the Administration
announced that it was effectively withdrawing this proposal from the Navy’s FY2020 budget
submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75
(and by implication its associated air wing) in service past FY2024.
Oversight issues for Congress for the CVN-78 program include the following:
 DOD’s decision to show CVN-81 in its FY2020 budget submission as a ship to
be procured in FY2020, instead of a ship that was procured in FY2019;
 the Navy’s decision, as part of its FY2020 budget submission, to not accelerate
the scheduled procurement of CVN-82 from FY2028 to an earlier fiscal year;
 whether to approve, reject, or modify the Navy’s FY2020 procurement funding
request for the CVN-78 program;
 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
weapons 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);
 additional CVN-78 program issues that were raised in a May 2019 Government
Accountability Office (GAO) report on DOD weapon systems;
 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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Contents
Introduction ..................................................................................................................................... 1
Background ..................................................................................................................................... 1

Current Navy Aircraft Carrier Force ......................................................................................... 1
Statutory Requirements for Numbers of Carriers and Carrier Air Wings ................................. 1

Requirement to Maintain Not Less Than 11 Carriers ......................................................... 1
Requirement to Maintain a Minimum of Nine Carrier Air Wings ...................................... 2
Navy Force-Level Goal of 12 Carriers ...................................................................................... 2
12-Carrier Goal Established December 2016 ..................................................................... 2
Planned and Potential Dates for Achieving 12-Carrier Force ............................................. 2

Incremental Funding Authority for Aircraft Carriers ................................................................ 3
Aircraft Carrier Construction Industrial Base ........................................................................... 4
Gerald R. Ford (CVN-78) Class Program ................................................................................ 4

Overview ............................................................................................................................. 4
CVN-78 (Gerald R. Ford) ................................................................................................... 4
CVN-79 (John F. Kennedy) ................................................................................................ 5
Two-Ship Block Buy Contract for CVN-80 and CVN-81 .................................................. 6
CVN-80 (Enterprise) ........................................................................................................... 6
CVN-81 (Not Yet Named) .................................................................................................. 7
Program Procurement Funding ........................................................................................... 7
Program Procurement Cost Cap .......................................................................................... 8
Changes in Estimated Unit Procurement Costs Since FY2008 Budget .............................. 9
Withdrawn Proposal to Not Fund CVN-75 RCOH .................................................................. 11
Issues for Congress for FY2020 ..................................................................................................... 11
Navy Decision to Show CVN-81 as a Ship to Be Procured in FY2020................................... 11
CVN-82 Not Accelerated from FY2028 to an Earlier Year .................................................... 13
FY2020 Funding Request ....................................................................................................... 14
Date for Achieving a 12-Carrier Force .................................................................................... 14
Cost Growth and Managing Costs within Program Cost Caps ............................................... 14

Overview ........................................................................................................................... 14
Recent Related Legislative Provisions .............................................................................. 15
Sources of Risk of Cost Growth and Navy Actions to Control Cost ................................ 17
CVN-78 Weapons Elevators ................................................................................................... 18
Issues Raised in December 2018 DOT&E Report .................................................................. 22
Issues Raised in May 2019 GAO Report ................................................................................ 25
Navy Study on Smaller Aircraft Carriers ................................................................................ 27
Overview ........................................................................................................................... 27
Navy Study Initiated in 2015 ............................................................................................ 27
Report Required by Section 128 of P.L. 114-92 ............................................................... 28
February 2019 Press Report .............................................................................................. 32
Shock Trial .............................................................................................................................. 32
Legislative Activity for FY2020 .................................................................................................... 32
Summary of Congressional Action on FY2020 Funding Request .......................................... 32
FY2020 DOD Appropriations Act (H.R. 2968) ...................................................................... 33
House ................................................................................................................................ 33

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Figures
Figure 1. USS Gerald R. Ford (CVN-78) ....................................................................................... 5

Tables
Table 1. Procurement Funding for CVNs 78, 79, 80, and 81 Through FY2026+ ........................... 8
Table 2. Changes in Estimated Procurement Costs of CVNs 78, 79, 80, and 81 .......................... 10
Table 3. Congressional Action on FY2020 Funding Request........................................................ 32

Table A-1. Funding for CVN-75 RCOH in FY2019 Budget Submission ..................................... 35

Appendixes
Appendix A. Withdrawn Proposal to Not Fund CVN-75 RCOH .................................................. 34
Appendix B. Background Information on Two-Ship Block Buy for CVN-80 and CVN-81 ........ 39
Appendix C. Cost Growth and Managing Costs Within Program Cost Caps ............................... 43
Appendix D. March 2013 Navy Report to Congress on Construction Plan for CVN-79 .............. 71
Appendix E. Shock Trial ............................................................................................................... 89

Contacts
Author Information ........................................................................................................................ 90

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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
requests a total of $2,347 million (i.e., about $2.3 billion) in procurement funding for the CVN-78
program. Congress’s decisions on the CVN-78 program could substantially affect Navy
capabilities and funding requirements and the shipbuilding industrial base.
The Navy’s FY2020 budget submission also proposed to not fund the mid-life nuclear refueling
overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier CVN-75
(Harry S. Truman), and to instead retire the ship around FY2024 and also deactivate one of the
Navy’s carrier air wings at about the same time. On April 30, 2019, however, the Administration
announced that it was effectively withdrawing this proposal from the Navy’s FY2020 budget
submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75
(and by implication its associated air wing) in service past FY2024. For additional discussion of
this withdrawn budget proposal, see Appendix A.
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,2 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, 2017.3
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.4 The requirement for the Navy to maintain not less than a certain number of operational

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 Navy’s last remaining conventionally powered carrier, Kitty Hawk (CV-63), was decommissioned on January 31,
2009.
3 The commissioning into service of CVN-78 on July 22, 2017, ended a period during which the carrier force had
declined to 10 ships—a period 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.
4 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,
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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).5
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.6
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 carriers7—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.8
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,

respectively.)
5 As mentioned in footnote 3, 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
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.
6 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.
7 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.
8 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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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
centers—unless the service lives of one or more existing carriers were
substantially extended.9
Under the Navy’s FY2020 30-year shipbuilding plan, as 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.
The projected size of the carrier force in the Navy’s FY2020 30-year (FY2020-FY2049)
shipbuilding plan reflected the Navy’s now-withdrawn FY2020 budget proposal to not fund the
RCOH for the aircraft carrier CVN-75 (Harry S. Truman), and to instead retire the ship around
FY2024. With the withdrawal of this budget proposal, the projected size of the carrier force is
now, for the period FY2022-FY2047, one ship higher than what is shown in the Navy’s FY2020
budget submission.
The newly adjusted force-level projection, reflecting the withdrawal of the proposal to retire
CVN-75 around FY2024, is as follows: The force is projected to include 11 ships in FY2020-
FY2021, 12 ships in FY2022-FY2024, 11 ships in FY2025-FY2026, 10 ships in FY2027, 11
ships in FY2028-FY2039, 10 ships in FY2040, 11 ships in FY2041, 10 ships in FY2042-FY2044,
11 ships in FY2045, 10 ships in FY2046-FY2047, 9 ships in FY2048, and 10 ships in FY2049.
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.

9 Source for 2063 date in relation to four-year centers: Congressional Budget Office (CBO), in a telephone consultation
with CRS on May 18, 2017.
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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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 the two-ship block
buy contract for the construction of CVN-80 and CVN-81. This provision does
not limit the total number of years across which incremental funding may be used
to procure either ship.
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 Gerald R. Ford in 2007,13 was procured in FY2008. The Navy’s
proposed FY2020 budget estimates the ship’s procurement cost at $13,084.0 million (i.e., about
$13.1 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

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

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. (This $1,394.9 million is included in the above-mentioned estimated procurement cost of
$13,084.0 million.) The ship was delivered to the Navy on May 31, 2017, and was commissioned
into service on July 22, 2017. The Navy is currently working to complete construction, testing,
and certification of the ship’s 11 weapons elevators.
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 John F. Kennedy on May 29, 2011,14 was procured in FY2013. The
Navy’s proposed FY2020 budget estimates the ship’s procurement cost at $11,327.4 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 being built with an improved shipyard fabrication and assembly process that
incorporates lessons learned from the construction of CVN-78. A key aim of this improved
process is to substantially reduce the real (i.e., inflation-adjusted) construction cost of CVN-79
compared to that of CVN-78. CVN-79 is scheduled for delivery to the Navy in September 2024.

14 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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Two-Ship Block Buy Contract for CVN-80 and CVN-81
CVN-80 (Enterprise) and CVN-81 (not yet named) are being procured under a two-ship block
buy contract that was authorized by 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). The
provision permitted the Navy to add CVN-81 to the existing contract for building CVN-80 after
the Department of Defense (DOD) made certain certifications to Congress. DOD made the
certifications on December 31, 2018, and the Navy announced the award of the contract on
January 31, 2019.
Compared to the estimated procurement costs for CVN-80 and CVN-81 in the Navy’s FY2019
budget submission, the Navy estimates under its FY2020 budget submission that the two-ship
block buy contract will reduce the cost of CVN-80 by $246.6 million and the cost of CVN-81 by
$2,637.3 million, for a combined reduction of $2,883.9 million (i.e., about $2.9 billion).15 (DOD
characterizes the combined reduction as “nearly $3 billion.”16) Using higher estimated baseline
costs for CVN-80 and CVN-81 taken from a December 2017 Navy business case analysis, the
Navy estimates under its FY2020 budget submission that the two-ship contract will reduce the
cost of CVN-80 by $770.9 million and the cost of CVN-81 by $3,086.3 million, for a combined
reduction of $3,857.2 million (i.e., about $3.9 billion).17 (DOD characterizes the combined
reduction as $4 billion.)18 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 $2.9 billion from the figures in the Navy’s
FY2019 budget submission and a savings of about $3.9 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].”19 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.
For additional background information on the two-ship block buy contract, see Appendix B.
CVN-80 (Enterprise)
CVN-80, which was named Enterprise on December 1, 2012,20 was procured in FY2018. The
Navy’s proposed FY2020 budget estimates the ship’s procurement cost at $12,335.1 million (i.e.,

15 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 the Navy’s FY2020 budget submission.
16 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.
17 Source: CRS calculation based on costs for single-ship purchases 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), and costs for two-ship purchase as presented in the Navy’s FY2020 budget submission.
18 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. 9.
19 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).
20 The Navy made the announcement of CVN-80’s name on the same day that it deactivated the 51-year-old aircraft
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about $12.3 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-FY2025 using incremental funding
authorized by Section 121(c) of P.L. 115-232. The Navy’s proposed FY2020 budget requests
$1,062.0 million in procurement funding for the ship. The ship is scheduled for delivery to the
Navy in March 2028.
CVN-81 (Not Yet Named)
Prior to the awarding of the two-ship block buy contract, CVN-81, which has not yet been named,
was scheduled to be procured in FY2023. Following the awarding of the two-ship block buy
contract, the Navy has chosen to show CVN-81 in its FY2020 budget submission as a ship to be
procured in FY2020 (as opposed to a ship that was procured in FY2019). The Navy’s FY2020
budget submission estimates the ship’s procurement cost at $12,450.7 million (i.e., about $12.5
billion) in then-year dollars. The Navy plans to fully fund the ship beginning in FY2019 and
extending beyond FY2026 using incremental funding authorized by Section 121(c) of P.L. 115-
232. The Navy’s proposed FY2020 budget requests $1,285.0 million in procurement funding for
the ship. The ship is scheduled for delivery to the Navy in February 2032.
Program Procurement Funding
Table 1 shows procurement funding for CVNs 78, 79, 80, and 81 through FY2026+ (meaning
FY2026 and some number of years after FY2026).



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.
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Table 1. Procurement Funding for CVNs 78, 79, 80, and 81 Through FY2026+
(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
851.3 (FF)
482.9 (AP)
0
0
1,334.2
FY11
1,775.2 (FF)
902.5 (AP)
0
0
2,677.7
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
0
0
955.2 (FF)
618.0 (FF)
1,573.2
FY20 (requested)
0
0
1,062.0 (FF)
1,285.0 (FF)
2,347.0
FY21 (programmed)
0
0
1,079.7 (FF)
1,565.0 (FF)
2,644.7
FY22 (programmed)
0
0
1,016.6 (FF)
1,307.0 (FF)
2,323.6
FY23 (programmed)
0
0
1,169.0 (FF)
760.0 (FF)
1,929.0
FY24 (programmed)
0
0
1,051.0 (FF)
667.0 (FF)
1,718.0
FY25 (projected)
0
0
2,198.8 (FF)
696.0 (FF)
2,894.8
FY26+ (projected)
0
0
0
5,552.7 (FF)
5,552.7
Total
13,084.0
11,327.4
12,335.1
12,450.7
49,197.2
Source: Table prepared by CRS based on Navy’s FY2020 budget submission and (for CVN-78 funding figures
for FY2010 and FY2011) Navy Office of Legislative Affairs email to CRS dated March 20, 2019, regarding an
additional $120 mil ion in reprogrammed funding—$57.3 mil ion in FY2010 and $62.7 mil ion in FY2011—for
CVN-78.
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. FY2026+ means FY2026 and some number of years after FY2026.
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.21
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.

21 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-FY2020 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
FY2020
$13,084.0
FY08
11,327.4
FY13
12,335.1
FY18
12,450.7
FY20
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

FY19 to FY20
+0.9%

-0.1%

-2.1%

-17.5%

Cumulative % change through FY20
Since FY08
+24.7%

+23.2%

+15.1%

n/a

(CVN-78 year
of proc.)
Since FY13
+6.2%

-0.7%

-11.1%

n/a

(CVN-79 year
of proc.)
Since FY18
+1.4%

-0.4%

-3.0%

n/a

(CVN-80 year
of proc.)
Source: Table prepared by CRS based on FY2008-FY2020 Navy budget submissions. n/a means not available.
Notes: The FY2010 budget submission did not show estimated procurement costs or scheduled years of
procurement for CVNs 79 and 80. The scheduled years of procurement for CVNs 79 and 80 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.
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Withdrawn Proposal to Not Fund CVN-75 RCOH
The Navy’s FY2020 budget submission proposed to not fund the mid-life nuclear refueling
overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier CVN-75
(Harry S. Truman), and to instead retire the ship around FY2024 and also deactivate one of the
Navy’s carrier air wings at about the same time. On April 30, 2019, however, the Administration
announced that it was effectively withdrawing this proposal from the Navy’s FY2020 budget
submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75
(and by implication its associated air wing) in service past FY2024. For additional discussion of
this withdrawn budget proposal, see Appendix A.
Issues for Congress for FY2020
Navy Decision to Show CVN-81 as a Ship to Be Procured in FY2020
One issue for Congress concerns DOD’s decision to show CVN-81 in its FY2020 budget
submission as a ship to be procured in FY2020, instead of a ship that was procured in FY2019.
Grounds for showing CVN-81 as a ship that was procured in FY2019 would include the
following:
 Within Section 121 of the John S. McCain National Defense Authorization Act
for Fiscal Year 2019 (H.R. 5515/P.L. 115-232 of August 13, 2018)—the provision
that authorized the two-ship block buy contract for CVN-80 and CVN-81—
subsection (a)(1) specifically authorizes a contract for the procurement of CVN-
81 “beginning with the fiscal year 2019 program year.” The header for
subsection (a)(1) is “Procurement Authorized.”
 Consistent with Section 121(a)(1), the funding table for the Navy’s shipbuilding
account in the conference report (H.Rept. 115-874 of July 25, 2018) on H.R.
5515 shows a quantity of “1” in line 002 of the FY2019 SCN (Shipbuilding and
Conversion, Navy) appropriation account. Line 002 is the line item for
procurement (not advance procurement [AP]) funding for the CVN-78 program.
A notation in the table for line 002 states that the procurement funding authorized
for this line item is for “Authorize CVN81—One ship.”22 The funding table does
not authorize any funding for line 003 of the FY2019 SCN account—the line
item for AP funding for the CVN-78 program. (AP funding is funding for the
procurement of a ship to be procured in a future fiscal year.)
 Consistent with the two above points, the paragraph in the FY2019 DOD
appropriations act (Division A of H.R. 6157/P.L. 115-245 of September 28, 2018)
that makes appropriations for the SCN account makes procurement (not AP)
appropriations for the CVN-78 program. This paragraph also states 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.”
 Consistent with this bill language, the funding table for the SCN account in the
joint explanatory statement for H.R. 6157 shows that this funding was provided

22 H.Rept. 115-874, p. 1164.
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for line 2 of the FY2019 SCN account (CVN-78 program procurement funding),
not line 3 of the FY2019 SCN account (CVN-78 program AP funding).23
 Consistent with all of the above points (and as reflected in Table 1 of this CRS
report), the Navy’s FY2020 budget submission shows the $618 million in
FY2019 funding for CVN-81 as full funding (meaning funding for a procured
ship), rather than AP funding (meaning funding for a ship to be procured in a
future fiscal year).24
DOD’s decision to show CVN-81 in its FY2020 budget submission as a ship to be procured in
FY2020, instead of a ship that was procured in FY2019, affects the comparison of numbers of
ships procured in FY2019 and FY2020. If DOD had decided to show CVN-81 in its FY2020
budget submission as a ship that was procured in FY2019, then the total number of ships
procured in FY2019 would be 14, and the total number requested for FY2020 would be 11—3
ships, or 21%, fewer than the FY2019 total of 14. Showing CVN-81 in the FY2020 budget
submission as an FY2020 ship changes the FY2019 and FY2020 totals to 13 ships and 12 ships,
respectively, making number FY2020 closer to the FY2019 number.
DOD’s decision to show CVN-81 in its FY2020 budget submission as a ship to be procured in
FY2020, instead of a ship that was procured in FY2019, also affects the aircraft carrier
procurement profile shown in the Navy’s FY2020 30-year (FY2020-FY2049) 30-year
shipbuilding plan. If DOD had decided to show CVN-81 in its FY2020 budget submission as a
ship that was procured in FY2019, the ship-procurement table in the 30-year plan would show the
procurement of no carriers for the first eight years (FY2020-FY2027) of the 30-year period.
Showing CVN-81 in the FY2020 budget submission as an FY2020 ship changes the presentation
to show the procurement of an aircraft carrier in the first year of the 30-year period.
Potential oversight questions for Congress include the following:
Compliance with congressional intent. Is DOD’s decision to show CVN-81 as
a ship to be procured in FY2020, rather than as a ship that was procured in
FY2019, consistent with congressional intent as shown in bill and report
language for P.L. 115-232 and P.L. 115-245? Can DOD’s decision be viewed as a
challenge to Congress’s Article 1 power to authorize and appropriate funds for
the construction of Navy ships? If DOD’s decision regarding the year of
procurement for CVN-81 is accepted, would this set a precedent for the executive
branch regarding its future compliance with Congressional decisions for
authorizing and funding of other federal programs?
Executability of FY2019 procurement funds for CVN-81. FY2019 SCN-
account funding for the CVN-78 program was appropriated by Congress, and
shows in the Navy’s FY2020 budget-justification books, as procurement funding
(meaning funding for one or more procured ships) rather than AP funding
(meaning funding for one or more ships to be procured in a future fiscal year). If
CVN-81 is accepted as a ship to be procured in FY2020, what implications, if
any, might that have for the executability of the $618 million in FY2019
procurement (as opposed to AP) funds for CVN-81 shown in the Navy’s FY2020
budget submission (as reflected in Table 1 of this CRS report)?

23 Joint explanatory statement for H.R. 6157, PDF pages 174 and 176 of 559.
24 Department of Defense, Fiscal Year (FY) 2020 President’s Budget Estimate Submission, Navy, Justification Book
Volume 1 of 1, Shipbuilding and Conversion, Navy
, March 2019, p. 15 (PDF page 51 of 356).
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Executability of CVN-81 during portion of FY2020 under a CR. Navy
officials have testified that if the Navy operates under a continuing resolution
(CR) for some part of FY2020, then absent a special legislative provision in the
CR known as an anomaly, the Navy during that period likely would not be able to
proceed with CVN-81, because CRs typically prevent year-to-year quantity
increases in procurement programs, and treating CVN-81 as a ship to be procured
in FY2020 would mean that the CVN-78 program would have a year-to-year
quantity increase of zero ships in FY2019 followed by one ship in FY2020.25 If
work on CVN-81 were to not proceed for some part of FY2020 because the Navy
during that period were to operate under a CR, what impact would that have on
the implementation and status of the two-ship contract for building CVN-80 and
CVN-81?
FY2019 and FY2020 numbers of ships procured and 30-year shipbuilding
plan. What effect, if any, did considerations regarding the comparison of
numbers of ships procured in FY2019 and FY2020 and the aircraft carrier
procurement profile during the initial years of the 30-year shipbuilding plan have
on DOD’s decision to show CVN-81 in its FY2020 budget submission as a ship
to be procured in FY2020, instead of a ship that was procured in FY2019?
Treatment in FY2020 legislation. Since P.L. 115-232 shows CVN-81 as
authorized in FY2019, how should the House and Senate Armed Services
committees act on the request in the Navy’s FY2020 budget submission to
authorize an aircraft carrier in FY2020? If the FY2020 national defense
authorization act authorizes the procurement of an aircraft carrier in FY2020, and
the authorization for the procurement of an aircraft carrier in FY2019 were not
rescinded, would that create confusion as to whether the ship being authorized in
FY2020 was CVN-81 or CVN-82, the latter being a ship currently planned for
procurement in FY2028? If the FY2019 authorization for CVN-81 were
rescinded, what implications, if any, would that have for the implementation of
Section 121 of P.L. 115-232, including the award of the two-carrier contract on
January 31, 2019 (i.e., during FY2019)?
CVN-82 Not Accelerated from FY2028 to an Earlier Year
Another issue for Congress concerns the Navy’s decision, as part of its FY2020 budget
submission, to not accelerate the scheduled procurement of CVN-82 from FY2028 to an earlier
fiscal year. The Navy’s FY2020 budget submission shows that, as a result of the two-carrier
contract, the scheduled delivery date for CVN-81 has been accelerated by seven months, to
February 2032, compared to September 2032 in the Navy’s FY2019 budget submission. The
scheduled year of procurement for CVN-82 has not been changed—in the Navy’s FY2020 budget
submission, it shows as a ship to be procured in FY2028, as it did in the Navy’s FY2019 budget
submission. The accelerated delivery date for CVN-81, combined with the unchanged year of
procurement for CVN-82, suggests that the interval between the construction of CVN-81 and
construction of CVN-82 has been increased by something like seven months.
Other things held equal, this increased interval could result in increased loss of learning in
shifting from construction of CVN-81 to construction of CVN-82, and possibly in reduced
spreading of shipyard fixed overhead costs during the construction of CVN-82. Both of these

25 Source: Spoken remarks by Navy officials at an April 9, 2019, hearing before the Senate Armed Services Committee
on the Department of the Navy’s proposed FY2020 budget.
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effects could increase the procurement cost of CVN-82. Potential oversight questions for
Congress include the following:
 What impact, if any, will the accelerated delivery of CVN-81 under the two-
carrier contract, combined with the unchanged year of procurement for CVN-82,
have on the procurement cost of CVN-82?
 How might the procurement cost of CVN-82 change in real (i.e., inflation-
adjusted) terms if its year of procurement were accelerated to an earlier year,
such as FY2027?
FY2020 Funding Request
Another issue for Congress 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 properly scheduled and accurately
priced the work it is proposing to do on the CVN-78 program in FY2020, particularly in the
context of implementing the two-carrier contract for CVN-80 and CVN-81.
Date for Achieving a 12-Carrier Force
Another issue for Congress concerns the date for achieving the Navy’s 12-ship force-level goal
for aircraft carriers. As noted earlier, under the Navy’s FY2020 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.26 As shown in Table 2, the

26 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
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estimated procurement costs of CVN-78, CVN-79, and CVN-80 have grown 24.7%, 23.2%, and
15.1%, 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 2%);
 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),27 since the FY2013 budget it
has declined by a small amount (less than 1%); and
 while the estimated cost of CVN-80 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),28 since the FY2013 budget it
has declined by about 11%.
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.—

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
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.)
27 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.
28 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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(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.
(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.
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(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.
(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.29 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

29 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.
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EMALs and AAG on the first three Ford-class carriers.30 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.
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,31 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 C and Appendix D.
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.

30 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.
31 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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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.
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.32
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:

32 Anthony Capaccio, “U.S. Navy’s Costliest Carrier Was Delivered Without Elevators to Lift Bombs,” Bloomberg,
November 2, 2018.
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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
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.33
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.

33 Source: CQ.com transcript of hearing.
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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.
“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.34
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

34 Megan Eckstein, “SECNAV to Trump: Ford Carrier Weapons Elevators Will Be Fixed by Summer, or ‘Fire Me,’”
USNI News, January 8, 2019.
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certification documentation will be performed for five of the 11 elevators after PSA
completion.35
A March 6, 2019, press report stated the following:
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.36
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

35 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.
36 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 Mark D. Faram, “Why the Once-Maligned Flattop Ford Is Finally Getting
a Lift (or 11),” Navy Times, March 7, 2019; Rich Abott, “Carrier Elevator Test Site Will Procure New Elevator, Ford
Accepts Second Elevator,” Defense Daily, March 7, 2019; Rich Abott, “Navy To Build Land-Based Carrier Elevator
Test Site,” Defense Daily, February 21, 2019.
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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
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.
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• 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
• 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].
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• 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.
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.37
Issues Raised in May 2019 GAO Report
Another oversight issue for Congress concerns CVN-78 program issues raised in the 2019 edition
of the Government Accountability Office’s (GAO’s) annual report surveying selected DOD
weapon acquisition programs. Some of these issues raised by GAO overlap with issues discussed
in previous sections of this CRS report. Regarding the CVN-78 program, the report stated the
following:
Technology Maturity, Design Stability, and Production Readiness
The Navy accepted delivery of the lead ship, CVN 78, in May 2017 despite challenges
related to immature technologies and struggles to demonstrate the reliability of mature
systems. The Navy reports that 10 of the Ford Class’s 12 critical technologies are fully
mature—the advanced arresting gear (AAG) and one of the ship’s missile systems are not
yet mature. The advanced weapons elevators are among the systems deemed mature by the
Navy; however, according to Navy officials, only 2 of the 11 elevators installed on the ship
can bring munitions to the flight deck—a key element of operational flights. The
shipbuilder is working to correct the system during its first post-delivery maintenance
period, now scheduled to end in October 2019, and the Navy plans to create a land-based
site to test the elevators, which will come at an additional cost.
Shipboard testing is ongoing for several critical systems and could delay future operational
testing. Those systems include the electromagnetic aircraft launch system (EMALS),
AAG, and dual band radar (DBR). Although the Navy is testing EMALS and AAG on the
ship with aircraft, the reliability of those systems remains a concern. If these systems
cannot function safely, CVN 78 will not demonstrate it can rapidly deploy aircraft—a key
requirement for these carriers. Recent shipboard testing revealed that the Navy is struggling
to get DBR to operate as planned. Moreover, DBR poses a greater radiation hazard to

37 Department of Defense, Director, Operational Test & Evaluation, FY2018 Annual Report, December 2018, pp. 133-
134.
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personnel and systems on an aircraft carrier than the Navy anticipated, which could restrict
certain types of flight operations.
The remaining challenges the Navy faces in maturing CVN 78’s critical technologies could
lead to their redesign or replacement on later ships. This would include CVN 79, which is
currently 55 percent complete, as well as the third and fourth ships, CVNs 80 and 81. CVN
79 repeats the CVN 78 design with some modifications and replaces DBR with the
Enterprise Air Surveillance Radar (EASR), which is in development. The Navy does not
identify this new system as a critical technology in the Ford Class program because it
derives from the pre-existing Air and Missile Defense Radar (AMDR) program. However,
EASR is a different size and performs a different mission than the AMDR systems, which
are designed for destroyers. Therefore, EASR may still require design and development
efforts to function on the carrier. 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. CVNs 80
and 81 will repeat the design of CVN 79.
Other Program Issues
CVN 78’s procurement costs increased by 23 percent over its initial cost cap and as a result
of continuing technical deficiencies, the Navy may still require more funding to complete
this ship. The Navy increased the current $12.9 billion cost cap for CVN 78 by $120 million
in May 2018 to account for additional post-delivery work, but added work and cost changes
may result in an additional cost increase.
Costs for CVN 79 are also likely to increase as a result of optimistic cost and labor targets,
putting the ship at risk of exceeding its $11.4 billion cost cap. The CVN 79 cost estimate
assumes unprecedented construction efficiency—labor hours will be 18 percent lower than
CVN 78. However, our analysis shows the shipbuilder is not meeting this goal and is
unlikely to improve performance enough to meet cost and labor targets.
Congress raised the cost cap for CVN 80 and later ships to $12.6 billion and approved the
Navy’s plans to buy two carriers—CVNs 80 and 81—at the same time, based on the
shipbuilder’s estimate that this strategy will save the Navy over $2 billion. However, it is
unclear whether the Navy can meet this cost cap, even with the estimated savings from a
two-ship buy, because it assumes further reductions in subsystem costs, construction
change orders, and labor hours. The Navy projects a further reduction in labor hours
compared to CVN 79—about 25 percent fewer labor hours than CVN 78—will contribute
to cost savings for these ships.
The program office indicated that it does not separately track or report information on
software development to integrate the various subsystems of the ship. These subsystems
include CVN 78’s combat control systems, which rely on integrating systems through
software intensive development.
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.
The program office stated that, in July 2018, CVN 78 entered a year-long maintenance
period. It also said that, as of February 2019, two advanced weapons elevators are
operating, and it continues to improve developmental system reliability.
The program also stated that, with CVN 79 construction 55 percent complete, shipbuilder
cost performance remains stable, but slightly below the level needed to achieve production
labor hour reduction targets. The program stated that the shipbuilder continues to work
through the effects of material shortfalls that disrupted performance. The program said that
the Navy plans to deliver a complete, deployable ship as scheduled and within the cost cap
to maintain an 11-carrier fleet.
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The program office also stated that the Navy awarded the CVN 80/81 procurement contract
in January 2019 and expects to save $4 billion, compared to if it had purchased each ship
individually. According to the program, the contract limits the Navy’s liability and
incentivizes the shipyard’s best performance.38
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.
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.39
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.

38 Government Accountability Office, Weapon Systems Annual Assessment[:] Limited Use of Knowledge-Based
Practices Continues to Undercut DOD’s Investments
, GAO-19-336SP, May 2019, p. 104.
39 Source: Transcript of hearing.
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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.40
On March 20, 2015, the Navy provided the following additional statement to the press:
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.41
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

40 Transcript of hearing.
41 As printed in Sam LaGrone, “Navy Conducting Alternative Carrier Study,” USNI News, March 23, 2015.
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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
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.
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• 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.
• 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
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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
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.42
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.43

42 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.
43 See CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, by
Ronald O'Rourke.
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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.”44
Shock Trial
An earlier oversight issue for Congress for the CVN-78 program was 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. For background information on that issue, see Appendix E.
Legislative Activity for FY2020
Summary of Congressional Action on FY2020 Funding Request
Table 3
summarizes congressional action on the FY2020 procurement funding request for the
CVN-78 program. As shown in Table 1, of the $2,347.0 million requested for FY2020, $1,062
million is for CVN-80 and $1,285 million is for CVN-81.
Table 3. Congressional Action on FY2020 Funding Request
Millions of dollars, rounded to nearest tenth.
Authorization
Appropriation

Request
HASC
SASC
Conf.
HAC
SAC
Conf.
Procurement
2,347.0



2,066.0


Source: Table prepared by CRS based on Navy’s FY2020 budget submission, committee and conference
reports, and explanatory statements on FY2020 National Defense Authorization Act and FY2020 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.

44 Rich Abott, “Navy Starts Looking At Carriers After CVN-81,” Defense Daily, February 15, 2019.
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FY2020 DOD Appropriations Act (H.R. 2968)
House
The House Appropriations Committee, in its report (H.Rept. 116-84 of May 23, 2019) on H.R.
2968, recommended the funding level shown in the HAC column of Table 3. The recommended
reduction of $281.0 million is for “Basic construction excess to need” ($20.0 million) and
“Propulsion equipment excess to need” ($261.0 million). (Page 175)

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Appendix A. Withdrawn Proposal to Not Fund
CVN-75 RCOH
The Navy’s FY2020 budget submission proposed to not fund the mid-life nuclear refueling
overhaul (called a Refueling Complex Overhaul, or RCOH) for the aircraft carrier CVN-75
(Harry S. Truman), and to instead retire the ship around FY2024 and also deactivate one of the
Navy’s carrier air wings at about the same time. On April 30, 2019, however, the Administration
announced that it was effectively withdrawing this proposal from the Navy’s FY2020 budget
submission. The Administration now supports funding the CVN-75 RCOH and keeping CVN-75
(and by implication its associated air wing) in service past FY2024.45 This appendix presents, for
reference purposes, additional background information on this withdrawn budget proposal.
Following the Administration’s April 30 withdrawal of its proposal to not fund the CVN-75
RCOH, the Navy states that the CVN-75 RCOH can no longer begin in FY2024, as planned prior
to the Navy’s FY2020 budget submission, because the Navy spent the months prior to April 30
planning for the ship’s deactivation rather than for giving it an RCOH. As a result, the Navy
states, the CVN-75 will now begin a year later, in FY2025. As a consequence of this one-year
shift in the schedule for the RCOH, the Navy states, the funding stream for the CVN-75 shown in
Table A-1 will also now shift one year to the right, and the CVN-75 RCOH can be reinstated
without any funding in FY2020, because FY2020 is now effectively the same as FY2019 in
Table A-1.46
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.47 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.
(CVN-75 was commissioned into service on July 25, 1998, and will be 26 years old in 2024.) The
Navy’s FY2020 budget submission shows that, for the period FY2022-FY2047, this would have
reduced the size of the carrier force by one ship compared to what it would otherwise be.
More specifically, the Navy’s FY2020 30-year (FY2020-FY2049) shipbuilding plan, reflecting
the proposal to not fund the CVN-75 RCOH, projected that the carrier force would remain at 11
ships through FY2024, decline to 10 ships in FY2025, and remain at 10 ships for the remainder of
the 30-year period, except for a few years (FY2027, FY2040, FY2042-FY2044, and FY2046-
FY2048) when it would temporarily decline to 9 ships. Consequently, beginning in FY2025 and
extending through the end of the 30-year period, the carrier force would not be in compliance

45 See, for example, David B. Larter, “Trump Administration Reverses Course on Decision to Decommission Carrier
Truman,” Defense News, April 30, 2019; Courtney Mabeus and Brock Vergakis, “USS Harry S. Truman Will Not Be
Retired Ahead of Schedule, Pence Says,” Virginia Pilot, April 30, 2019; Ben Werner, “Pence: No Early Retirement for
USS Harry S. Truman,” USNI News, April 30, 2019; Rich Abott, “Pence: Administration Will Not Retire USS Truman
Early,” Defense Daily, May 1, 2019; Joe Gould, “Trump Reverses His Own Aircraft Carrier Policy, Takes a Victory
Lap,” Defense News, May 1, 2019; Paul McLeary, “Pentagon, Navy In Dark About Trump’s USS Truman Decision,”
Breaking Defense, May 1, 2019.
46 Source: Navy briefing on in-service aircraft carrier programs for CRS and CBO, May 8, 2019.
47 To operate for a full 50-year life, existing Nimitz (CVN-68) class nuclear-powered carriers are given an 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 primarily through the Navy’s shipbuilding account; the
nuclear fuel cores installed as part of the RCOH are funded through the Other Procurement, Navy (OPN) appropriation
account.
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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 proposed 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 beginning around FY2024 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.
Table A-1 shows funding for the CVN-75 RCOH in the Navy’s FY2019 budget submission. As
shown in the table, the estimated total cost of the CVN-75 RCOH in the FY2019 budget
submission was $5,578 million (i.e., about $5.6 billion).
Table A-1. Funding for CVN-75 RCOH in FY2019 Budget Submission
Millions of dollars
To
FY2019
FY020
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.
Note: Fol owing the Administration’s April 30 withdrawal of its proposal to not fund the CVN-75 RCOH, the
Navy states that the CVN-75 RCOH can no longer begin in FY2024, as planned prior to the Navy’s FY2020
budget submission, because the Navy spent the months prior to April 30 planning for the ship’s deactivation
rather than for giving it an RCOH. As a result, the Navy states, the CVN-75 wil now begin a year later, in
FY2025. As a consequence of this one-year shift in the schedule for the RCOH, the Navy states, the funding
stream for the CVN-75 shown in the table wil also now shift one year to the right, and the CVN-75 RCOH can
be reinstated without any funding in FY2020, because FY2020 is now effectively the same as FY2019 in the table.
(Source: Navy briefing on in-service aircraft carrier programs for CRS and CBO, May 8, 2019.)
The figure of about $5.6 billion shown in Table A-1 does not include the cost of the two nuclear
fuel cores that would be installed as part of the RCOH. (CVN-75, like all Nimitz-class carriers,
has two nuclear reactors, each of which would receive a new fuel core as part of an RCOH.) Fuel
cores for aircraft carrier RCOHs are procured through the Other Procurement, Navy (OPN)
appropriation account. The Navy states that it procured the cores for the CVN-75 RCOH—one of
them in FY2008 and the other in FY2011—for a total cost of about $538 million.48 Adding this
$538 million cost to the total cost shown in Table A-1 would increase the total estimated cost of
the CVN-75 RCOH to about $6.1 billion.
The fuel cores for the planned future RCOHs for CVN-76 and CVN-77 (the final two Nimitz-
class carriers) have also been procured—the CVN-76 RCOH cores were funded in FY2012 and
FY2013, and the CVN-77 RCOH cores were funded in FY2015 and FY2019. Thus, if CVN-75
were to not receive an RCOH, and if it were not possible or cost effective to rescind the funding
for the core funded in FY2019,49 then two of the six Nimitz-class fuel cores that have been
procured since FY2008 for anticipated use in RCOHs would not in the end be used in an RCOH
and would in effect become surplus to the RCOH effort. The Navy indicated that if that were to
occur, these two cores would be placed in storage for potential future use as emergency

48 Source: Remarks by Rear Admiral Randy Crites, Deputy Assistant Secretary of the Navy for Budget, at a DOD press
briefing on the Navy’s FY2020 budget submission, March 12, 2019, as shown in DOD’s transcript of the briefing.
49 As of March 2019, the FY2019 funding for this core had been obligated, but only a fraction of it had been expended.
Rescinding the funding, if possible, would impact revenues and workloads at the firms involved in producing the
nuclear fuel cores, which could produce collateral cost or other effects on other work done for the Navy by these firms.
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replacement cores for a Nimitz-class ship until all Nimitz-class ships complete their service
lives.50
If CVN-75 were to not receive an RCOH and is instead be decommissioned, the savings from not
funding the RCOH would be partially offset by the cost to deactivate and dismantle CVN-75. The
Navy estimated the cost to deactivate and dismantle CVN-75 at about $1.5 billion.51 The initial
increments of this approximate $1.5-billion cost would have occurred in FY2023 ($130.3 million)
and FY2024 ($247.2 million).52 The estimated net savings from not funding the RCOH and
instead deactivating and dismantling the ship would thus have been about $4.1 billion (i.e., about
$5.6 billion less about $1.5 billion). The Navy stated 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.53 DOD officials reportedly
wanted to redirect the estimated net RCOH-related savings of about $4.1 billion and the estimated
recurring savings of about $1 billion per year to Navy investments for technologies that will add
to future Navy capabilities.54
RCOHs are done primarily by 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
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.
Until it was withdrawn, the proposal in the Navy’s FY2020 budget submission to not fund CVN-
75’s RCOH and instead decommission the ship (and a carrier air wing) raised a number of
potential oversight issues for Congress, including the following:
Compliance with congressional direction. The central purposes 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. They represent directions 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)

50 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.
51 Source: Navy remarks at Navy briefing for congressional staff on the Navy’s FY2020 budget submission, March 14,
2019.
52 Source: Navy remarks at Navy briefing for congressional staff on the Navy’s FY2020 budget submission, March 14,
2019.
53 Source: Navy remarks at Navy briefing for congressional staff on the Navy’s FY2020 budget submission, March 14,
2019.
54 See for example, Sydney J. Freedberg Jr., “Pentagon To Retire USS Truman Early, Shrinking Carrier Fleet To 10,”
Breaking Defense, February 27, 2019; Sam LaGrone, “Pentagon Plan to Sideline Carrier Truman Will Net Just $17M
in FY 2020,” USNI News, February 28, 2019; Lara Seligman, “Nothing Projects Power Like an Aircraft Carrier. Does
the Pentagon Think Otherwise?” Foreign Policy, March 1, 2019.
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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?
Alternative capabilities to be funded; net impact on Navy capabilities. What
were OSD’s plans for redirecting the savings associated with deactivating CVN-
75 and a carrier air wing around FY2024? What types of capabilities would have
been created or maintained by these redirected funds? How would these
capabilities compare in nature and timing to the capabilities that are to be
provided by the continued operation of CVN-75 and the carrier air wing? Taking
these factors into account, what would have been the net operational impact for
the Navy of deactivating CVN-75 and a carrier air wing around FY2024 and
redirecting the resulting savings toward these other investments?
Requirement for 12-carrier force. 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 was 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?
Next Force Structure Assessment (FSA). The Navy states that it is currently
conducting a new FSA as the successor to the 2016 FSA, and that this new FSA
is to be completed by the end of 2019. This new FSA could change the 355-ship
figure, the planned mix of ships, or both. Did the Navy’s proposal to not fund the
CVN-75 RCOH, and thereby reduce the carrier force from 11 ships to 10 ships,
prejudge the outcome of the new FSA? Would the new FSA be tainted by the
knowledge that the Navy had already proposed reducing the carrier force to 10
ships? How well could the analysts performing the new FSA have avoided being
influenced by the Navy’s proposed action? Was the Navy prepared to go ahead
with the CVN-75 RCOH if the new FSA concludes that there is a requirement for
11 or more carriers?
Likelihood of need for emergency replacement cores. How likely was it that
the Nimitz-class program would need to use an emergency replacement set of
fuel cores during the remainder of the Nimitz-class life cycle? What set of
circumstances might lead to a need for an emergency replacement set of fuel
cores? How often have such circumstances previously arisen for a nuclear-
powered U.S. Navy ship whose fuel cores are intended to be sufficient for
powering the ship for at least one-half of its expected service life? Given the
assessed likelihood of the Nimitz-class program needing to use an emergency
replacement set of fuel cores during the remainder of the Nimitz-class life cycle,
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what would have been the government’s resulting return on investment of the
several hundred million dollars used to procure the two fuel cores that would be
placed in storage?
Acting Secretary of Defense. The proposal to not fund the CVN-75 RCOH and
to deactivate a carrier air wing represented a notable change from prior DOD
force-structure planning and budgeting. Was 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 Secretary who was confirmed specifically for that position?
Impact on industrial base and cost of other work. What would have been 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 had on the cost of other work performed at HII/NNS and other
parts of the aircraft carrier industrial base during these years, and on the eventual
cost of the CVN-76 RCOH?
For further reference, it can be noted that the Navy’s FY2015 budget submission proposed not
funding the RCOH for the aircraft carrier CVN-73 (George Washington). 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.55 The
RCOH was funded and is currently underway.


55 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.
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Appendix B. Background Information on Two-Ship
Block Buy for CVN-80 and CVN-81
This appendix presents additional background information on the two-ship block buy contract for
CVN-80 and CVN-81.
The option for procuring two CVN-78 class carriers under a two-ship block buy contract had
been discussed in this CRS report since April 2012.56 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 focused on the option of using a block buy contract for
procuring CVN-80 and CVN-81.
On March 19, 2018, the Navy released a request for proposal (RFP) to Huntington Ingalls
Industries/Newport News Shipbuilding (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.57
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) permitted the Navy, after the Department of
Defense (DOD) made 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

56 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.
57 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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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 HII/NNS.58
The two-ship contract for CVN-80 and CVN-81 can be viewed as a block buy contract because
the two ships are being procured in different fiscal years (CVN-80 was procured in FY2018 and
CVN-81 is shown in the Navy’s FY2020 budget submission as a ship procured in FY2020).59 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 each of those two earlier cases, however,
the two ships were fully funded within a single fiscal year, making each of these cases a simple
two-ship purchase (akin, for example, to procuring two Virginia-class attack submarines or two
DDG-51 class destroyers in a given fiscal year) rather than a two-ship block buy (i.e., a contract
spanning the procurement of end items procured across more than one fiscal year).
Compared to DOD’s estimate that the two-ship block buy contract for CVN-80 and CVN-81
would produce savings of $3.9 billion (as measured from estimated costs for the two ships in the
December 2017 Navy business case analysis), DOD 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 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 Equipment60 and production change orders.”61
Within the total estimated combined reduction in cost, HII/NNS reportedly expects to save up to
$1.6 billion in contractor-furnished equipment.62
A November 2018 DOD report to Congress 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 (P.L. 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,63 and facility investments which
improve the shipbuilder trade effectiveness. A two-ship buy assumes four years between

58 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
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.
59 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.
60 Government-furnished equipment (GFE) is equipment that the government purchases from supplier firms and then
provides to the shipbuilder for incorporation into the ships.
61 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.
62 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.
63 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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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
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.64
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.

64 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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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....
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.65
Discussions of the option of using a block buy contract for procuring carriers have focused on
using it to procure two carriers in part because carriers have been procured on five-year centers,
meaning that two carriers could be included in a block-buy contract spanning six years—the same
number of years originally planned for the two block buy contracts that were used to procure
mnay of the Navy’s Littoral Combat Ships.66
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 first ship
procured in FY2018, and the third ship procured in FY2024) or eight years (with the first ship
procured in FY2018 and the third ship procured in FY2025).
The percentage cost reduction possible under a three-ship block buy contract could 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 could also be greater.


65 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.
66 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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Appendix C. 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.67
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.68


67 Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2019 Shipbuilding Plan, October 2018, pp. 17-
18.
68 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.69
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

69 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 2017.70
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.71
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.

70 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.
71 Rich Abott, “Huntington Ingalls Updates Ships Statuses, Reactivates Ingalls East Bank,” Defense Daily, April 16,
2018: 16-17.
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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
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.72
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

72 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.
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[procurement funding] request in this budget pending our determination regarding repairs
that required for the...
MCCAIN:
Is that a breach of Nunn-McCurdy?73
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:
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.74

73 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.
74 Transcript of hearing as posted at CQ.com.
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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—
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.75
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

75 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.
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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.76
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.
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

76 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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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.
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
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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
80 construction. OSD and the Navy are committed to delivering CVN 79 within the limits
of the cost cap legislated for this ship.77
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

77 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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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
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.
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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.78
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
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

78 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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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
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.
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• 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.
• 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.
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• 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
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
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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....
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
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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.79
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
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

79 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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consequence of a broken process, but rather of a process in equilibrium that rewards
unrealistic business cases and, thus, devalues sound practices.80
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.
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.

80 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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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.81
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.82
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.83
The Navy maintains that it can deliver the ship within the congressional limit.
“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.84
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.

81 Kris Osborn, “Navy Launches New Affordability Plan for Ford-Class Carriers,” DOD Buzz, July 2, 2015.
82 Lara Seligman, “Newport News See 18 Percent Fewer Man Hours On Second Ford Carrier,” Inside the Navy, June
29, 2015.
83 See Anthony Capaccio, “Aircraft Carrier $370 Million Over Congressional Cost Cap,” Bloomberg News, May 19,
2015.
84 Anthony Capaccio, “Second New Carrier Now Seen Busting a Cost Cap by $235 Million,” Bloomberg News, June
23, 2015.
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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].”85
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
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

85 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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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.86
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,
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.87
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

86 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.
87 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.
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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.88
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
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

88 Transcript of hearing.
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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.89
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.
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 78.90
For the full text of the Navy’s report, see the Appendix D.
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.

89 Transcript of hearing.
90 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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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
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.
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 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.
 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;
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 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
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).
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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;
 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;
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 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.91


91 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 D. 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-79.92



92 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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link to page 20 Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress

Appendix E. Shock Trial
An earlier oversight issue for Congress for the CVN-78 program was 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. This appendix presents background information on that issue.
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
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
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Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress

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.93


Author Information

Ronald O'Rourke

Specialist in Naval Affairs



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93 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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