Cost Overruns & Poor Planning Topple U.S. Navy’s Cruiser Modernisation Program: Reports

The U.S. Navy’s program to modernise its Ticonderoga-class guided missile cruisers has failed to meet its goals, according to a report released by the Government Accountability Office (GAO).

The program which began in 2015, was meant to extend the service life of 11 cruisers by five years and upgrade their combat capabilities. However, the outcomes have been disappointing with billions of taxpayers’ money wasted.

So far, the Navy has spent $3.7 billion to modernise seven cruisers. Despite these, only three will complete modernisation and none will gain the intended five-year service life extension.

$1.84 billion was wasted on four cruisers that were divested before they could be deployed. The GAO report pointed out several issues with the modernisation program.

One major problem was inadequate planning, which led to over 9,000 contract changes during the program. This caused major cost overruns and schedule delays.

Despite these issues, the Navy has yet to identify the root causes of unplanned work or develop strategies to avoid similar problems in future modernisation programs.

The modernisation effort originated in 2012 and 2013 when the Navy proposed retiring several cruisers due to budget constraints.

Congress rejected this proposal and instead allocated funding to modernise 11 cruisers. The Navy planned to use a phased modernisation approach, with all 11 cruisers expected to be completed by 2026.

After all this planning, the program has fallen far behind its goals. Contractor performance was also one of the main reasons behind the program’s failures.

For example, poor quality work on the USS Vicksburg’s sonar dome- a critical component for anti-submarine warfare- led to additional delays and costs.

Similar issues plagued other ships as well, which further complicated the modernisation effort. The Navy’s ability to hold contractors accountable was weakened during the program.

In 2018, maintenance officials were restricted from imposing monetary penalties on contractors without senior leadership approval. By 2020, inspection procedures were reduced by almost 50%, limiting oversight of ship repair work.

According to Navy officials, these changes were made to maintain good relationships with contractors, who are essential to the Navy’s fleet modernisation program.

The GAO made six recommendations to address these issues. These include analysing the root causes of unplanned work, developing mitigation strategies, and codifying these strategies in policy.

It also recommended reassessing the Navy’s quality assurance procedures to ensure better oversight and accountability in future projects.

The Navy agreed to all six recommendations. However, the failures in the cruiser modernisation program raise serious concerns about the Navy’s ability to execute other large-scale modernisation efforts.

The Navy has several modernisation projects lined up, including upgrades to 23 destroyers. These measures are essential to maintain a combat-ready fleet.

However, the GAO warned that unless the Navy addresses the systematic issues identified in the cruiser program, similar problems could occur in future projects as well.

The cruiser modernisation program was supposed to demonstrate the Navy’s capability to manage complex upgrades. Instead, it has exposed flaws in planning, contractor management and quality assurance.

If the Navy doesn’t introduce major changes to its modernisation program it risks wasting more taxpayers dollars and jeopardising the readiness of its fleet.

Reference: GAO

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