Navy CVN-77 and CVX Aircraft Carrier Programs: Background and Issues for Congress

Navy CVN-77 and CVX Aircraft Carrier Programs: Background and Issues for Congress

98-359 F
Updated July 21, 1998
CRS Report for Congress
Received through the CRS Web
Navy CVN-77 and CVX Aircraft Carrier
Programs: Background and Issues for Congress
Ronald O'Rourke
Specialist in National Defense
Foreign Affairs and National Defense Division
Summary
For FY1999, the Administration is requesting funding for both CVN-77, a
modified Nimitz (CVN-68) class nuclear-powered aircraft carrier to be procured in
FY2001, and the CVX, an aircraft carrier planned for procurement in FY2006 that will
be a further-evolved version of the Nimitz-class design. Issues for Congress to consider
include FY1999 research and development funding for the two ships and the merits of
the Navy's plan to incrementally evolve the Nimitz-class design.
Introduction
The issue. As part of its proposed FY1999 defense budget, the Administration is
requesting $38.5 million in research and development funding and $124.5 million in
advanced procurement funding for CVN-77, a modified Nimitz (CVN-68) class nuclear-
powered aircraft carrier to be procured in FY2001, as well as $190.1 million in research
and development funding for CVX, an aircraft carrier planned for procurement in FY2006
that will be a further-evolved version of the Nimitz-class design. CVN-77 and CVX
would replace two existing aircraft carriers, thereby maintaining the Navy's current
planned force of 12 carriers. The issue for Congress is whether to approve, modify, or
reject the Administration's funding requests and acquisition plans for CVN-77 and CVX.
Congress' decision on this issue could have a substantial effect on future Navy
capabilities, Navy funding requirements, and the U.S. shipbuilding industrial base.
CVN-77. If procured in FY2001, CVN-77 would be the Navy's tenth Nimitz-class
carrier and would enter service in 2008 as the replacement for the Kitty Hawk (CV-63),
which will then be 47 years old. The Administration estimates the procurement cost of
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CVN-77 at about $4.45 billion. The ship would be built by Newport News Shipbuilding
The
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previous 9 Nimitz-class carriers (CVN-68 through -76) were procured between FY1967 and
FY1995. CVN-68 through -74 are now in service. CVN-75, the Harry S. Truman, will enter
service later in 1998 as the replacement for the Independence (CV-62). CVN-76, the Ronald
Reagan, is scheduled to enter service in 2002 as the replacement for the Constellation (CV-64).
CV means conventionally powered aircraft carrier; CVN means nuclear-powered aircraft carrier.
Congressional Research Service ˜ The Library of Congress

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(NNS) of Newport News, VA, the builder of all 9 previous Nimitz-class carriers. The
Administration wants CVN-77 to incorporate a variety of new technologies, including
several that are intended to reduce the annual operating and support (O&S) cost of the
ship by 15% compared to other Nimitz-class ships. Where feasible, some of these new
technologies might be retrofitted onto the other 9 Nimitz-class carriers.
The Administration, as part of its proposed FY1998 defense budget submitted to
Congress in February 1997, planned to procure CVN-77 in FY2002, with initial advanced
procurement funding in FY2000. In response to this plan, NNS in March 1997 proposed
an alternative funding profile, which it called the "Smart Buy" proposal, that would
maintain FY2002 as the year of procurement and 2008 as the year that the ship would
enter service, but would accelerate the start of advanced procurement funding to FY1998
and increase the total amount of advanced procurement funding provided through
FY2001. NNS said that its proposal would close a gap in aircraft carrier construction
work projected to occur between the end of basic construction work on CVN-76 (funded
in FY1995) and the start of construction work on CVN-77 and thereby reduce the
procurement cost of CVN-77 by about $600 million (including about $150 million in
avoided inflation).2
The Senate recommended adding $345 million in FY1998 funding to begin
implementing NNS's "Smart Buy" proposal; the House recommended no funding. The
conference agreements on the FY1998 defense authorization and appropriation bills
provided $50 million. Although not enough to implement NNS's "Smart Buy" proposal,
this sum was viewed as an expression of Congressional support for eventually procuring
CVN-77 in some fashion. Section 122 of the FY1998 defense authorization act (P.L. 105-
85, H.R. 1119) authorized procurement of the ship, established a $4.6 billion procurement
cost cap for the ship, and directed the Defense Department to "make such plans for the
CVN-77 aircraft carrier program as are necessary to attain for the program the cost
savings that are contemplated" in NNS's proposal.3
The Administration in its FY1999 budget submission is proposing a funding profile
for CVN-77 that differs from both its own FY1998 plan and NNS's March 1997 proposal.
The Administration states that its new profile, which accelerates procurement of the ship
to FY2001 while maintaining 2008 as the year the ship enters service, would close some
of the projected gap in construction between CVN-76 and CVN-77 and would thereby
reduce the cost of CVN-77 by about $300 million (including about $100 million in
avoided inflation). In its FY1999 "wish list" — its list to Congress of items on which it
would prefer to spend any funding that Congress may add to the Navy's FY1999 budget
— the Navy included requests for an additional $33 million in research and development
funding and $100 million in advanced procurement funding for CVN-77.4
See
2
CRS Report 97-720 F, Navy Aircraft Carrier Procurement: CVN-77 "Smart Buy" Proposal,
by Ronald O'Rourke. Washington, 1997. (July 21, 1997) 6 p.
3 See H.Rept 105-340 of October 23, 1997 (the conference report on H.R. 1119), p. 23-24 and
563-564.
Schweizer,
4
Roman. Spares, Maintenance Top Navy's Unfunded Priority List for FY-99. Inside
the Navy, March 30, 1998: 1, 13-14.

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CVX.
If procured in FY2006, CVX-78 would enter service in 2013 as the
replacement for the Enterprise (CVN-65), which will then be 52 years old and almost out
of usable nuclear fuel.
The Navy originally wanted the CVX, also known as the CVX-78, to be a completely
new, next-generation aircraft carrier. Under this plan, the CVN-77 was to have been,
technologically, a transitional ship between the basic Nimitz-class design and the all-new
CVX design. In late May 1998, however, the Navy decided that it could not afford to
develop an all-new design for CVX-78, which reportedly would have required about $7
billion in research, development and design funding. Instead, the Navy will continue to
modify the Nimitz-class design with each new carrier that is procured. Under this
strategy, CVN-77 and CVX-78 would be, technologically, the first and second ships in
a series of transitional aircraft carrier designs.5 An all-new carrier design (including a new
hull design different from that of the Nimitz class) might eventually emerge under this
strategy, but this would not happen until CVX-79 at the earliest or, perhaps more likely,
CVX-80 or CVX-81 (which might be procured around FY2011 and FY2016,
respectively). Since CVX-78 would be a further-modified version of the basic Nimitz-
class design, NNS would generally considered to be the lead contender to build the ship.6
When the Navy was planning for CVX-78 to be a completely new-design ship, it
wanted the ship's total life-cycle cost (which includes procurement cost, 50 years of
annual operation and support [O&S] costs, and post-retirement disposal costs) to be at
least 20% less than that of the Nimitz-class design. To help achieve this, the Navy was
aiming to reduce the size of the CVX's crew to about 50% of the Nimitz-class figure. The
Navy also wanted CVX-78 to have less radar, infrared and acoustic detectability than the
Nimitz class design. It is not yet clear how these goals will change as a result of the
Navy's decision to procure CVX-78 as a further modification of the Nimitz-class design.
The Defense Acquisition Board (DAB) granted Milestone 0 approval (permission
to enter the conceptual studies phase) for a program to produce an all-new CVX design
on March 29, 1996, and the Defense Department is in the midst of a 3-part Analysis of
Alternatives (AOA) for such a design. The first part began in March 1996 and was
completed in October 1997. The second part began in November 1997 and was scheduled
to be completed by September 1998. This phase was to have determined several major
issues about the ship's design and cost, including its size and whether the ship should have
conventional or nuclear propulsion. (The Navy reportedly favored a large, nuclear-
powered design.) The third part of the AOA, which was to have confirmed and refined
many of the basic design decisions reached in the second part, was scheduled to begin in
October 1999 and be completed by April 2000.
5 Holzer, Robert. Navy Sinks Futuristic Carrier. Defense News, May 25-31, 1998: 4; Eisman,
Dale. Navy To Slow Down Or Scale Back Plans For The Next Generation of Carriers. Norfolk
Virginian-Pilot, May 27, 1998; Schafer, Susanne M. Navy Slowing Research on Futuristic
Carrier. Associated Press wire story,, May 28, 1998.
6 For short discussions of actual or potential carrier-construction capabilities at U.S. shipyards,
see CRS Report 96-785 F, Navy Major Shipbuilding Programs and Shipbuilders: Issues and
Options for Congress, by Ronald O'Rourke. Washington, DC, 1996. (September 24, 1996) p.
20-25 and 29-30.

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The Navy requested $90.2 million in FY1998 funding for research and development
on CVX technologies; Congress approved $12.2 million (later adjusted by the
Administration to $11.9 million). The significant reduction from the request appears to
reflect the view, set forth in the House National Security Committee's report on the
FY1998 defense authorization bill, that "it is neither fiscally nor technically prudent to
increase advanced carrier systems research and development for the CV(X) to the degree
sought by the Navy," and that increased emphasis should instead be placed on the research
and development program for CVN-77.
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FY1999 Congressional Action
Authorization. The House National Security Committee (HNSC) and the Senate
Armed Services Committee (SASC), in their reports (H.Rept. 105-532 of May 12, 1998
and S.Rept. 105-189 of May 11, 1998, respectively) on the FY1999 defense authorization
bill (H.R. 3616/S. 2057), approved the $124.5 million in advanced procurement funding
and $38.5 million in research and development funding requested for CVN-77. The
committees also approved the $190.1 million requested for research and development of
the CVX, but included similar provisions (Sec. 212 in both cases) that either make
available (the HNSC version) or reserve (the SASC version) $50 million of this funding
for research and development on technologies that can also be inserted into CVN-77.
Appropriation. The Senate Appropriation Committee, in its report (S.Rept. 105-
200 of June 4, 1998) on the FY1999 defense appropriation bill (S. 2132), approved the
$124.5 million in advanced procurement funding and $38.5 million in research and
development funding requested for CVN-77. The committee recommended a $130-
million reduction in the amount of funding requested for CVX research and development
under program element (PE) 0603512N, Carrier Systems Development (see table below).
Of this $130 million, the committee stated that $50 million should instead be used
"exclusively for CVN-77 development" (in addition to the $38.5 million in research and
development funding the Administration had requested for CVN-77). The committee also
recommended a $35.7-million reduction in the amount of funding requested for CVX
feasibility studies under PE 0603564N, Ship Preliminary Design and Feasibility Studies.
Finally, the committee recommended a $5-million increase to PE 0603564N
to establish a red team [i.e., an independent study team] to study a futuristic aircraft
carrier concept. Under this plan, the team should evaluate the merits of a carrier
designed for the JSF [Joint Strike Fighter] aircraft and assume other STOVL [short
take off, vertical landing] and rotary wing aircraft will perform support missions.
Furthermore, a primary goal of the program should be to reduce the crew requirements
by 50 percent, a trend increasingly common in commercial ships.
The committee has also been informed that as part of CVX restructuring, the
Navy plans to focus their initial research efforts on the development of the next
generation nuclear powerplant and electrical system in order to begin construction of
7 H.Rept. 105-132 of June 16, 1997, the committee's report on H.R. 1119 the FY1998 defense
authorization bill, p. 181-182. See also page 608 of H.Rept. 105-340 of October 23, 1997, the
conference report on H.R. 1119, and pages 117 and 120 of H.Rept. 105-265 of September 23,
1997, the conference report on H.R. 2266, the FY1998 defense appropriation bill.

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CVX in 2006. The Committee expects the Navy to use the remaining CVX funding
to begin development of this next generation nuclear powerplant. (page 110-111)
The House Appropriation Committee, in its report (H.Rept. 105-591 of June 22,
1998) on the FY1999 defense appropriations bill (H.R. 4103), approved the $124.5
million in advanced procurement funding and $38.5 million in research and development
funding requested for CVN-77. The committee recommended a $90-million reduction in
the amount of funding requested for CVX research and development under program
element (PE) 0603512N, Carrier Systems Development (see table below) and
recommended a total of $100 million for CVX research and development. The
committee's report (H.Rept. 105-000) states:
The Committee supports a robust aircraft [carrier] technology development program,
but given the uncertainty of the Navy's direction, recommends $100,000,000 to
continue technology development. The Committee notes that many of the areas for
technology development contained in the carrier systems development budget might
no longer be pursued under the Navy's new approach [for CVX], which is evolving
and has not yet been approved by the Secretary of Defense. The Committee questions
the wisdom of narrowly focusing all future carrier component technology
development beyond CVN-77 on a limited number of propulsion and power
technologies at the expense of all others.... The Committee directs that of the amount
provided in this bill for aircraft carrier technology development, $10,000,000 is only
for engineering manufacturing development of infrared search and track. The
Committee recommends bill language that precludes obligation of more than
$50,000,000 of the funds provided in the bill for aircraft carrier technology
development until the Secretary of the Navy certifies in writing to the congressional
defense committees that the Navy has a fully-funded program for development and
installation of an infrared search and track device on CVN-77 prior to its acceptance
by the Navy from the shipbuilder.
Issues for Congress
CVN-77 as transitional ship. What new technologies should be incorporated into
CVN-77? Are they adequately funded in the budget? What effect will they have on the
capabilities, cost, and technical risk of CVN-77? Which might be suitable for retrofitting
onto older Nimitz-class carriers? What would be the cost to retrofit them, and what effect
would they have on the capabilities and remaining life-cycle costs of these ships? How
is this issue affected by the Navy's decision to have CVX-78 be a further-evolved version
of the Nimitz-class design rather than an all-new design?
CVX acquisition strategy and funding. Should CVX-78 be a completely new-
design ship, as originally planned by the Navy, or an evolved version of the Nimitz-class
design, as now planned by the Navy? How do these two options compare in terms of
research and development cost (particularly for FY1999), procurement cost, total ship
life-cycle cost, technical and schedule risk, and ship capabilities? Given that sums of
several billion dollars have been or will be spent to develop new submarine and tactical
aircraft designs, why was a similar sum deemed unaffordable to develop a new aircraft
carrier design? Given the Navy's decision last year to cancel the Maritime Fire Support

CRS-6
Demonstrator (Arsenal Ship) program, what, if anything does the Navy's recent decision
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to not have CVX-78 be an all-new design say about the Navy's ability or willingness to
generate and implement new ship-design concepts?
Table 1. Funding for CVN-77 and CVX, FY1998-FY2003
(millions of then-year dollars, round to the nearest million or tenth of a million)
FY98
FY99
FY00
FY01
FY02
FY03
Total
CVN-77 procurement funding
FY98 Admin. budget (2/97)
0
0
695.4
0
4,484.7
0
5,180.1
NNS "Smart Buy" (3/97)
345
170
875
135
3,075
0
4,600
FY98 Congressional action
50
FY99 Admin. Budget (2/98)
48.7
124.5
763.3
3,511.1
0
0
4,447.7
CVN-77 research and development funding (FY99 Admin. budget, Feb. 98)
Funding in PE 0604567Na
33.8
38.5
35.5
40.3
27.0
10.3
185.4
CVX research and development funding (FY99 Admin. budget, Feb. 98)
Total, including funding in:
45.7
190.1
198.2
159.9
184.3
257.2
1,035.4
PE 0604567Na
0
0
15.1
24.0
34.1
39.2
112.4
PE 0603564Nb
33.8
40.6
15.4
0
0
0
89.8
PE 0603512Nc
11.9
149.5
167.7
135.9
150.2
218.0
833.2
Sources: CRS Report 97-720 F, Navy Aircraft Carrier Procurement: CVN-77 "Smart Buy" Proposal, by
Ronald O'Rourke. Washington, 1997. (July 21, 1997) p. 2, and information paper provided to CRS by
U.S. Navy Office of Legislative Affairs, April 7, 1998. This table shows the Navy's original (February
1998) budget submission for FY1999, under which CVX would be an all-new design. Given the Navy's
late-May 1998 decision to instead procure CVX-78 as a further-evolved version of the Nimitz-class design,
some of these figures may be revised.
aShip Contract Design/Live Fire Test & Evaluation. PE means program element (i.e., line item).
bShip Preliminary Design & Feasibility Studies. Includes $6 million in FY1998 funding to evaluate
conventional and nuclear propulsion alternatives for the originally planned all-new CVX design.
cCarrier Systems Development. Includes $6 million in FY1998 funding and $55 million in FY1999
funding ($20 million conventional and $35 million nuclear) to evaluate conventional and nuclear
propulsion alternatives for the originally planned all-new CVX design. Additional costs for developing
a new reactor plant for CVX-78 would likely be funded with both Department of Defense funding (most
likely in PE 0603570N, Advanced Nuclear Power Systems) and Department of Energy funding.
See
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CRS Report 97-1044 F, Navy/DARPA Maritime Fire Support Demonstrator (Arsenal Ship)
Program: Issues Arising From Its Termination, by Ronald O'Rourke. Washington, 1997.
(December 10, 1997) 6 p.