In Press: Discussing BIW’s Production Delay

by Craig Hooper on August 31, 2020

I had the opportunity to exchange a few emails with the Times Record’s indefatigable BIW scribe, Kathleen O’Brien, last week on a story “Strike, Pandemic Further Delay Production at Bath Shipyard“. In light of the strike and COVID-19, Bath is more than a year behind schedule. The locals, of course, are concerned about the implications of the delay.

While delay is bad, I was somewhat sanguine about the situation:

Navy analysts agreed a delay of any caliber isn’t good, but Craig Hooper, a national security consultant who writes about Naval affairs, said BIW has trudged through more daunting schedule delays. For example, BIW’s first Zumwalt-class destroyer was delivered in 2016, a full two years after its original expected delivery date. Because of this, he said he doesn’t think “a yearlong delay is a dire threat to the future of the yard.”

That isn’t an argument to let the Yard get away with delay. BIW and their workforce will need to come together to find creative solutions as they work to recover schedule on their multi-year production backlog. And I presume that Bath, being a responsible shipyard operator, accounted for such contingencies in their contract, and that the contract they signed for the work protects the shipyard–and the shipyard workers–as much as possible during a delay. But, that said,

“BIW and their workforce will need to come together to find creative solutions as they work to recover the schedule on their multi-year production backlog,” said Hooper. “It will be up to the workers and management to figure out a way to make lemonade out of lemons here.”

The state could also help by helping helping build-out a trades-oriented training system–like Alabama and Mississippi did for their shipbuilding community. But…given Maine’s response to date, I just don’t think shipbuilding is a real priority for the cash-strapped state.

I doubt the delay–or a ponying up for a re-baselining of existing contracts–is a catastrophe. In fact, if production is not too far along with Bath’s Flight III destroyer, a delay might be really helpful for both Bath and the Navy to reduce risk around their Flight III destroyer contracts. Let Huntington Ingalls–the builder of the first Flight III–absorb the risk and get a better sense of whatever lessons-learned the Navy obtains in the year-long delay.

But, ultimately, for General Dynamics, destroyer production is a sideshow. Right now, the only thing that matters to the company is the Columbia class ballistic missile submarine program.

That is both a risk and an opportunity for BIW’s workers and management.

If Bath’s problems rise to a level where those problems put General Dynamics’ sub business at risk, the yard will either be sold or spun off. But, if the yard gets back on a positive trajectory and keeps the Navy happy, General Dynamics corporate may give the yard a little more leeway in the yard’s bottom line or in funding requests for capital investment than the company might if the Columbia class was not underway.

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What Does A $362 Million Hospital Ship Look Like?

by Craig Hooper on August 1, 2020

My hospital ship piece in Forbes.com last week has led to quite a bit of discussion on my suggestion that, at the $362 million price point, the NSMV would be a good hull for a dedicated medical vessel. For a piece that didn’t get a lot of eyeballs/clicks at Forbes, it certainly has sparked a big reaction offline.

My sense is that the NSMV hull-form is a solid basis for some handy auxiliary ship roles (i.e. the Common Hull Auxiliary Multi-Mission Platform (CHAMP) mission-set of command, hospital, tender, aviation support, etc.). I also think, that, on the part of Philly Shipyard–the NSMV builder–it is smart to move quickly and push ahead–whenever and wherever possible–with other ideas that would extend the production run. Getting a 4-ship hospital ship plus-up via some sort of election-year chicanery would make the NSMV hull the base CHAMP design by fait accompli–and that really should be Philly’s goal right now.

(And yeah, the process would be a little un-natural, but there is no shame in exploiting an Administration’s anxiety to get such a nationally beneficial project underway. We all know that, right now, procedural norms are decidedly un-trendy in this Administration! And who knows–maybe the Navy would learn a thing or two if it was forced to move super-fast on this kind of an acquisition. But, regardless of political affiliation, it is time we all realized that Great Power Competition won’t wait for leisurely contract ruminations by hordes of cubicle-bound and fractious NAVSEA GS-9s and various Warrant holders. We need to learn to move fast, and if norms need to be broken, so be it.)

Time is of the essence. If Philly Shipyard waits for the CHAMP competition to occur, quietly sitting in a corner, timorously staying off the playing field until the rest of the proposed NSMV buy is filled, then, well, not only will the production run effectively be at an end when CHAMP comes around, but the shipyard will have to compete with NASSCO, Bollinger and VT Halter on design and requirements, and then, probably, Philly will need to fight off every other “Lowest Price Technically Acceptable” mom-and-pop shipyard out there for the production run. If, as a second-tier shipbuilder, you don’t exploit your advantages when you have them, you’ll never win. It’s how caution kills the ‘ole profit margin–but heck, don’t listen to me, I’m just a blogger, right?

But, commentary aside, plotting out a single shipyard’s capture strategy isn’t the point of the post. This post is to re-emphasize that, at the $362 million price point, the NSMV is not the sole option out there. Let’s look at it.

What Are The Options?

Before we examine the second viable alternative to the NSMV, let’s take a second to look at what this proposed ship is NOT. What a $362 million price-point ship is NOT is a modified hospital-oriented EPF catamaran. Once the Navy starts looking at a $300 million dollar price-point and beyond, the Navy suddenly has a lot more room to look at options beyond a T-EPF. Above about a $250 million price-point, the T-EPF hospital ship concept runs into a competitive buzzsaw.

Now, the conventional wisdom out there is that Senator Richard Shelby and happy gang of hometown appropriators threw a big $1.4 billion dollar gift out for his home-state shipyard, the aluminum ship manufacturer Austal. I don’t think that is the case–the per-ship pricing is high enough to be little more than a poisoned chalice, where Austal has to say “thank you,” and then, in the procurement process, the company will get blitzed by the competition. Shelby can safely walk away from the wreckage, ruefully saying, “well, I tried my best.”

On this hospital ship project, Austal can only win if they game the requirements–which they can’t do very well–or, alternatively, they can try to win on price. But they can only win on price if they keep the proposed hospital ship price-point so low it keeps everybody else from bidding. With Shelby’s priced-out proposal out there, it may be too late, but…that’s the route to a win here. If the hospital-optimized T-EPF route is the goal, a savvy business person should be out there every darn day agitating for the Navy to keep buying base T-EPF models forever (and why not–they’re a bargain!) and then let the Service contract out any post-delivery modifications needed for the hospital/ambulance mission. That’s a far safer–and far more realistic–play than to try and make a dedicated medical T-EPF for $360 million apiece. And the longer Austal waits, the faster aluminum ship rivals like MetalShark will spin up to eat Austal’s lunch in the large aluminum craft sector (MetalShark is already building catamaran ferries, so Austal’s safe monopoly on big aluminum is rapidly dwindling away).

But, getting back to the $360 million price-point, the other interesting option besides the NSMV would be to modify a basic U.S- built Con-Ro or Ro-Ro. VT Halter, NASSCO and Philly Shipyard all have viable designs, and those platforms can easily be modified to support hospital ship duties or other projects. The pricing would work–$250 million would probably get a good domestically-produced base-model Con-Ro built and then $75 million in modifications would get the Navy a really neat and versatile platform. Heck, on such a platform, the hospital mission could simply be an ancillary one–if we employ the old MV Cragside modification model using a basic Flensburger ro-ro (photo is above) that I wrote about back in 2014–these ships could be out there doing a whole lot of other necessary stuff when the hospital mission is not needed.

Either way, both the the NSMV hull or the MV Cragside-like con-ro/ro-ro modification routes offer the Navy a handy, much-needed asset. Either will be enormously useful for afloat surface ship officer training (which is an enormous need right now) or any of the other auxiliary roles currently held by aged Navy vessels.

Embrace Senator Shelby’s gift for what it is, recognize what it is not, and get about urging the Administration to make it happen.

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VT Halter Seeks Pricing/Estimating Help

July 28, 2020

So, a few weeks after detailing my concerns that VT Halter’s impressive book of business might have been caught by over-aggressive pricing over at Forbes.com, the new VT Halter President/CEO Bob Merchent is seeking a Senior Vice President of Contracts and Pricing. I like VT Halter–it’s a scrappy and hungry yard, but it has a […]

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SECNAV Meets With Jim Webb

October 28, 2019

So, today, news broke that SECNAV Spencer–who is in a full retreat from his bombastic attack upon the Navy’s friends in Congress–spent some time this weekend with Jim Webb, the only SECNAV who quit the job. Maybe Spencer got some pointers. If you are in the reading mood, I was over at Forbes.com last night […]

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Secretary Spencer Needs To Stop His Business Analogies

October 23, 2019

I don’t know where Secretary Spencer gets his business analogies for his “set” stump speeches, but he tells one about the Truman CVN that…is just wrong. And he tells it a lot, too. Somebody do the Secretary a favor and cut the story out of his speeches. I’ve heard it several times; he’ll start talking […]

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A Few Updates…

October 23, 2019

Hey, I’m over on Forbes.com, talking about the need to secure the Alaskan EEZ and what may be another Navy attempt to avoid shock testing the USS Ford. Let me know what you think! I am also wondering if the SECNAV is going to say anything interesting when he speaks–and takes moderated questions–from the safe […]

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US Navy Declines To Party With PLA(N)

April 19, 2019

The old movie Wargames reminds us that, sometimes, “the only winning move is not to play.” It looks like the U.S. Navy is doing just that with China’s massive naval review this month, refusing to send ships to celebrate the 70th anniversary of China’s Navy beyond the local attache. From the Japan Times: The United […]

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In Forbes: Build A USN Training Fleet

April 5, 2019

I have been remiss, but I have a few posts up at Forbes that may be worth your time. One of them deals with training ships. Go read it! Now, I am convinced that training ships–if they are taken seriously–do work, and I am particularly impressed at how Japan has converted their BIG training fleet […]

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In Press: The New Naval Race To Look Good

March 15, 2019

I have a post up at Forbes.com, discussing how emerging/re-emerging navies are exploiting the U.S. Navy’s increasingly shabby visage. I urge you all to take a look, here. There are a few other ancillary items that didn’t make the piece, but they were interesting enough to merit additional discussion. Item 1: Image Does Matter: Many […]

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In Press: No Reserve Ships On The Road To 355

March 7, 2019

Glad to see the Navy finally, irrevocably, kill off the pipe-dream of resurrecting the FFG-7s. As I said about two years ago, when I first panned the fever-dreams of the “Reactivate the FFG-7” crowd, “America need FFGs less than a policy and strategy to guide the graceful transition of combatants from front line duties, through […]

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