Columbia-Class Submarine Program Passes Milestone B Decision, Can Begin Detail Design April 25, 2016

The Columbia-class ballistic missile submarine program passed its Milestone B decision review and can move into detail design, an official told USNI News.

These SSBNs should cost about $8 billion apiece, Rep. Joe Courtney (D-Conn.), whose district includes the prime contractor, told USNI News today after reading the acquisition review documents. That figure that is higher than the Navy’s previously cost estimate but is calculated differently. Most recently the Navy said it expected the lead ship to cost $10.4 billion – including $4.2 billion in detail design and non-recurring engineering work, as well as $6.2 billion for ship construction – and follow-on ships to cost $5.2 billion, all in 2010 dollars. The $8 billion per boat figure spreads the design and engineering cost evenly across the 12 boats in the class instead of consolidating it in the cost of the lead ship, and it is also calculated in 2017 dollars, which complicates the comparison.

Additional details about the Columbia class’s cost and schedule are documented in the program’s acquisition decision memorandum (ADM) but have not yet been made public.

A defense official told USNI News that Pentagon acquisition chief Frank Kendall signed the ADM today and approved the program for Milestone B, as well as designated it a major defense acquisition program.

The submarine program, formerly called the Ohio Replacement Program, was set for a Milestone B review in August, at which time the Navy would present an updated cost estimate for the subs. But Navy and Pentagon officials decided to delay meeting with the Defense Acquisition Board for the review until they could schedule a one-day deep-dive at the General Dynamics Electric Boat shipyard in Groton, Conn., to work out some final details on cost, design, production readiness and more. A shipyard visit was held in early October and the Navy was eyeing a meeting with the DAB in the first week of November. However, Kendall visited Electric Boat again in early November for a final visit and today signed off on the program.

“This is not just checking a box, this is setting a roadmap for the program for years to come,” Rep. Courtney told USNI News of the milestone’s importance.

The Columbia-class program is finally poised to move forward, after waiting for four action items from the Pentagon and Congress. The program was awaiting the Fiscal Year 2017 budget, which not only included the funds to get started on detail design but also the legal mechanism that moves the program from the research and development budget to the shipbuilding budget. With Congress passing a continuing resolution instead of an actual appropriations bill, there were concerns that the program would not be able to advance into the Navy shipbuilding budget on time, but when lawmakers extended the CR last month they included an “anomaly” that allowed the Columbia-class program to stay on track.

“On Monday the Treasury deposited the anomaly funds that were in the CR, the $773 million, into the NSBDF, the National Sea Based Deterrence Fund – so that (fund) has now been activated officially with real deposits and withdrawals,” Courtney said. The NSBDF was set up in 2014 despite opposition from some lawmakers, and while more and more cost-saving authorities have been added to the fund, it hasn’t actually had any money put into it until tis week.

“There’s been some skeptics about whether or not that was just going to be an empty vessel forever, but the statute on the books, which mandates that funding for the Columbia class ‘shall’ be paid through NSBDF, obviously made its way up the food chain to the Treasury,” Courtney continued.
“The deposit, which occurred this week, is going to move quickly. Once the Milestone B is released today, those funds are pretty much going to go out immediately, tomorrow or the next day, to EB and some of the other vendors. And I think that’s another significant event because, A, its goal of trying to take pressure off the shipbuilding account is now really happening, and B, looking at the milestone B cost estimates, the authorities granted in the NSBDF – the incremental funding, multiyear procurement, economic order quantity provisions and then this year’s continuous production language – CBO and CRS have told us that those are great opportunities to gain even more savings than I think is even projected in Milestone B. So as I said, the deposit in that account is, I think, a really important event that shows the positive effects of the NSBDF are going to really unfold.”

With the dollars in place and the legal ability to spend shipbuilding money instead of research and development money secured, the Columbia-class program just needed the Milestone B decision to be finalized, which happened today, and the actual award of the detail design contract to Electric Boat. The Navy could not immediately provide comment on when the contract might be awarded.

Electric Boat has taken steps to prepare itself to stay on track during Columbia-class construction. Working with local, state and federal government entities, the shipyard secured a manufacturing pipeline grant about a year and a half ago to fund training in advanced manufacturing and other required fields at technical high schools and community colleges. Courtney said that about a month ago Electric Boat revived an apprenticeship program that had been inactive for years, in advance of a hiring surge at the yard in the coming years.

Courtney said the collaboration between the shipyard, local unions and others is aimed at “trying to get kids started as early as high school with joint programs with community colleges, to get them a running head start in terms of advance manufacturing. It’s getting picked up in the tech schools themselves, which are the high school-aged kids. And they also started programs for older workers, they call it the Outside Machinists program,” which is a six- to eight-week course that takes adults from other professions and gives them the skills they’ll need to succeed in a shipyard apprenticeship program.

“It’s an all-hands-on-deck approach that is reaching back as far as high school and junior high school even to get kids thinking about this as a really positive occupation that you can support yourself and a family,” Courtney said.