Navy Ships: Concurrency Within the SSN-21 Program

Published by the Government Accountability Office on 1990-09-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                 Uni ted.'5tat( s Genieral Aco   t i   Off ice

   ~GAO                -Report              to Congressional Requesters

September 1990                   N V
          *NAVY                                    SHIPS.

                                 Concurren cy Within
                  5-             the SSN-2 1 Program

                                  United States
GAO                               General Accounting Office
                                  Washington, D.C. 20548

                                  National Security and
                                  International Affairs Division                    D T IC
                                  B-241186                                            -LECTE
                                                                                     OCT 2 41990
                                  September 28, 1990
                                                                            •               T
                                  The Honorable Sam Nunn
                                  Chairman, Committee on Armed Services         .
                                  United States Senate

                                  The Honorable Edward M. Kennedy
                                  Chairman, Subcommittee on Projection
                                    Forces and Regional Defense
                                  Committee on Armed Services
                                  United States Senate

                                  In response to your July 30, 1990, request, this report provides informa-
                                  tion on the extent to which development and production are concurrent
                                  in the Seawolf nuclear attack submarine (SSN-21)/program, the status of
                                  the AN/BSY-2 combat system and other SSN-21 subsystems, and our opinion
                                  on whether procurement of the SSN-21 should be approved in)fiscal year

Background                        The SSN-21 is intended to counter the Soviet Union's new generation of
                                  quieter, more capable submarines. Designed to be quieter, deeper diving,
                                  and tactically faster, the SSN-21 is to provide enhanced capabilities and
                                  carry more weapons than the Los Angeles nuclear attack submarines
                                  (SSN-688s) being built today. In addition, the new AN/BSY-2 combat system
                                  is expected to provide the SSN-21 with greater capability to detect, clas-
                                  sify, localize, and launch weapons against enemy targets.

                                  In 1987, the Navy awarded the Newport News Shipbuilding and Dry
                                  Dock Company and the Electric Boat Division of General Dynamics
                                  SSN-21 design contracts that will run until June 1995, although most of
                                  the design work is scheduled to be completed by November 1992. In Jan-
                                  uary 1989, the Navy awarded Electric Boat a fixed-price, incentive-fee
                                  contract to build the first SSN-2i. Construction began in October 1989,
                                  and delivery of the ship to the Navy ls scheduled for May 1995.

                                  Originally, the Navy planned to buy 29 SSN.21s between fiscal years 1989
                                  and 2000: 2 each in fiscal years 1991 and 1992 and 10 ships every 3
                                  years thereafter. In August 1990, as a result of a Department of Defense
                                  (DOD) major warship and threat review, DOD's planned SSN.2i procure-
                           DIT O Sment was reduced to 3 submarines every 2 years, for a total of 14 sub-
DI   IB   ON ST                   marines procured between fiscal years 1989 and 2000. Consequently,
             -- ,   teleas        DOD decreased its original 1991 defense budget request from two to one

                                   Page I                                  GAO/NSIAD-90-297 Navy SSN-21 Program

                                        SSN-21.    Although reducing the number of SSN-21s to be constructed is
                                        expected to increase the cost of future ships, the Navy has not estimated
                                        the potential cost increase. The Navy, in its fiscal year 1991 budget
                                        request, originally asked for $3.0 billion for the second and third SSN-21S.

Results in Brief                        The SSN-21 is being designed and constructed concurrently. The first
                                        SSN-21is under construction, and the Navy plans to award ship construc-
                                        tion contracts for follow-on SSN-21s in November 1990. Under the Navy's
                                        current plans, seven SSN-21 submarines could be under construction or
                                        contract before the first ship is delivered in May 1995.
                  ,     f
                        ,        )"In addition to the overall concurrency of the SSN-21 design and construc-
                            .'       tion program, we reviewed 10 of its subsystems and found that 6 sub-
                                     systems involve concurrency. Four of these subsystems, including the
                                     AN/BSY-2, are critical to the ship's achieving full performance. A
                                     1- or 2-year delay in contracting for the follow-on SSN-21, currently
                                     scheduled for November 1990, would allow for a longer period to
                                     develop the ship's and subsystems' design. Under current Navy plans,
                                    -                                        -not   be operationally tested before
                                        initial production. Problems encountered during testing may identify
                                        weaknesses that require potentially expensive ship and/or subsystem
                                        modifications and possible schedule delays.

                                        Current data do not adequately quantify the benefits and consequences
                                        of not providing funds to contract for another SSN-21 in fiscal year 1991.
                                        Potential benefits include a ship design that is more complete, an addi-
                                        tional year to construct the first ship and develop the subsystems before
                                        contracts for subsequent ships are awarded, and an increased awareness
                                        of how rapidly changing world events will affect the Navy's require-
                                        ments. According to Navy and SSN-21 shipbuilding officials, potential
  1A , "' ".   J'J/t   j
                       |-               adverse consequences include higher unit costs and adverse effects on
                                  ----- the industrial base. We believe the changing world events, the need to
                                        respond to the U.S. budget deficit, and the benefits of a less concurrent
                                        program warrant a 1-year delay in the award of the next ssN-21 produc-
                                        tion contract.          .     .        ,,     ,-   ,,                    ,

                                        Page 2                                       GAO/NSIA).-90-297 Navy SSN-21 Program

Design and               Overall, the concurrent design and construction of the first SSN-21 is
                         about on schedule. As of August 1990, Newport News Shipbuilding and
Construction Status of   Electric Boat had collectively completed approximately 41 percent of
First SSN-21             the design work., Newport News Shipbuilding and Electric Boat officials
                         estimated that at least 81 percent of design work and the ship mock-up
                         will be completed by November 1991. Ninety-seven percent of design
                         drawings and the ship mock-up are scheduled to be completed by
                         November 1992.

                         Figure I illustrates the progress estimated for design work completion
                         during the next 2 years.

                                                                                 Acce, j() ,.

                                                                                 D 11("     fA H                0
                                                                                 OUIIK JAO                  0

                                                                                Distribution I

                                                                                       Availabilliy Codes

                                                                                           A, jil j!II(I / or
                                                                                Dist            SIeCla!

                         'Design work was calculated as the percentage of total required ship configuration drawings, ship
                         mock-up drawings, and ship sectional construction drawings completed as of August 1990.

                         Page 3                                                  GAO/NSIAD90-297 Navy SSN.21 Program

Figure 1: Current and Projected SSN-21
Design Status                            100   Percent Completed


                                          80                                          . :.:...       : :: :    :

                                          70                                                  .                " ..

                                                                          ....        .. ....


                                          30                                                                                                 .   ..   .


                                                                                                                         ~..   .. .. ... .


                                          Design Producis

                                                              Configuration Drawings
                                                -   -         Newport News Shipbuilding Mock-up
                                                              Electric Boat Reactor/Engine Room Mock-ups
                                                IInI          Construction Drawing3

                                                            SDesign progress if 1-year delay.
                                                            SAdditional design progress if 2-year delay.

                                          Source: Newport News Shipbuilding and Electric Boat

                                          As of July 1990, Electric Boat estimated that 3.1 percent of the labor,
                                          including support work and material procurement, had been completed
                                          for the first SSN-21. Electric Boat estimated that about 32 percent will be
                                          completed by November 1991 and about 55 percent by November 1992.
                                          According to Electric Boat and Navy officials, a delay of either 1 or 2
                                          years in follow-on ship awards could have a negative effect on SSN-21
                                          subcontractors and affect this projection. Figure 2 shows the estimated
                                          construction to be completed during the next 2 years. The curves reflect
                                          the number of work packages associated with sectional construction

                                          Page 4                                                           GAO/NSIAD-90-297 Navy SSN.21 Program

Figure 2: Current ard Projected SSN-21
Construction Status
                                         100     Percent Comple







                                             0             ~

                                                 -         Producion Starts Work Packages
                                                 ,,,,,,,   Production Completes Work Packages
                                                           Construction progress if 1-year delay.

                                                           ,Additional construction progress if 2-year delay.

                                         Source. Electric Boat

Current Development                      To meet the first ship's planned delivery date of May 1995, some sub-
                                         systems require concurrent development and production. We reviewed
and Production of                        10 selected subsystems, of which 6 involve the use of concurrency. 2
Selected SSN-21                          These six subsystems are the AN/BSY-2 combat system, the noise moni-
Subsystems                               toring system, the propulsor system, the ship control system, the
                                         weapons stowage and handling system, and the non-penetrating peri-
                                         scope. The most ambitious of these major system development efforts is
                                         the AN/BSY-2 combat system development program.

                                          The four selected subsystems that do not involve concurrency are the weapons launch system, the
                                         environmental system, the electronic support system, and the internal atmosphere control system.

                                         Page 5                                                       GAO/NSIAD-90-297 Navy SSN.21 Program

Concurrency of AN/BSY-2       In addition to the AN/BSY-2 system being developed and produced concur-
Subsystem and                 rently with the lead SSN-21 submarine, there is also concurrent develop-
                              ment and production of several new key components within the combat
Components                    system itself. These new components include a new enhanced modular
                              signal processor (EMSP), towed array, and a wide aperture array, which
                              represents significant advances in target detection and processing capa-
                              bilities. These components are needed collectively to gather data on
                              potential targets and to process and refine the data for use in making
                              combat decisions. All of these components are being developed concur-
                              rently with the combat system software.

                              Moreover, much of the AN/BSY-2 hardware, such as work station proces-
                              sors and computer displays, will be newly developed and dispersed
                              among several different vendors. Delays in development of hardware or
                              software components could affect the schedule for the entire combat
                              system. All AN/BSW-2 components, including those presently under devel-
                              opment, must be integrated and tested by November 1994 in order to
                              meet the delivery schedule for the first Seawolf submarine in 1995.

                              The first AN/BSW-2 system, which is planned for delivery to the Navy in
                              November 1993, will consist of all hardware and about 86 percent of the
                              software. At this time, it will lack about one-third of the sonar acoustics
                              software. It will also not have undergone total system design certifica-
                              tion testing. The remaining 14 percent of the system software is sched-
                              uled for delivery in November 1994. Installation of this software is
                              scheduled to begin in January 1995, 4 months before the first SSN-21 is
                              scheduled for delivery in May 1995.

                              If the AN/BSY-2 development and production schedules continue as
                              planned, two additional AN/BSY-2 systems will be in production before all
                              of the system components, such as EMSP, towed array, and the wide
                              aperture array, have been fully developed, integrated, and tested. Navy
                              plans call for using these two additional AN/BSY-2 systems to complete
                              development of remaining system parts and resolve deficiencies dis-
                              closed during testing.

Advances in AN/BSY-2          A 1-year delay-to November 1991-in procuring the second SSN-21
Development in 1 or 2 Years   could reduce the risks of potentially expensive modifications by
                              allowing more time to develop, test, and integrate the first AN/BSY.2
                              combat system. Production of the first AN/BSY-2 operational system is
                              planned to begin only 2 months later in January 1992.

                              Page 6                                    GAO/NSIAD-90-297 Navy SSN-21 Program

                       By November 1992, or after a 2-year delay in approving procurement of
                       additional SSN-21S, most of the components for the first AN/BSY-2 will be in
                       production, although development, testing, and integration are sched-
                       uled to continue through 1994. Final testing of the first AN/BSY-2 combat
                       system is scheduled for January 1995, and final integration is not
                       planned until the third combat system is in production.

                       Appendix I shows selected development and production milestones
                       scheduled during fiscal years 1990-93 for major AN/SY-2 components. It
                       also shows milestones that could be completed during a 1-year delay in
                       procuring the second SSN-21 (from November 1990 to November 1991)
                       and during a 2-year delay (from November 1990 to November 1992).
                       However, according to Navy officials, these development schedule
                       advances are unlikely to be fully realized if the 1- or 2-year delay in
                       procurement of the SSN-21 includes a delay in procurement of the second
                       and third AN/BSY-2 combat systems because of their plans to use these
                       systems to further develop and test the AN/BSY-2 software.

                       The Navy's concurrent approach is driving the need for three AN/BSW-2
                       systems to meet its planned delivery of the first SSN-21. Historically,
                       major weapon acquisitions have not met their planned schedules. In the
                       SSN-21 program, a slippage in the planned delivery of the first ship could
                       result in the Navy's not having to procure the third AN/BSY-2 combat
                       system during fiscal year 1991.

Concurrency of Other   Problems or delays during development and testing of the propulsor,
Selected Subsystems    noise monitoring, weapons stowage and handling, and ship control sub-
                       systems could delay ship construction and impair the ability of the first
                       SSN-21 to perform its mission. A fifth concurrent subsystem, the
                       non-penetrating periscope, was to be installed on the second and follow-
                       on SSN-21s. However, according to Navy officials, the Defense Advanced
                       Research Project Agency's design program has experienced problems
                       that have delayed prototype testing. Until such testing is completed and
                       the results are reported, the SSN-2: program office is not required to
                       establish program guidelines for the non-penetrating periscope and its
                       SSN-21 integration. SSN-21 program officials believe that work on inte-
                       grating the non-penetrating periscope into the SSN-21 design will begin in
                       fiscal year 1991.

                       Appendix II shows selected development and production milestones
                       scheduled during fiscal years 1990-93 for these subsystems. It also
                       shows milestones for these subsystems that could be completen during a

                       Page 7                                     GAO/NSIAD-90-297 Navy SSN.21 Program

                             1-year delay in procuring the second SSN-21 (from November 1990 to
                             November 1991) and during a 2-year delay (from November 1990 to
                             November 1992).

Advances in Other Selected   Four of these subsystems are in development and have not yet com-
Subsystems in 1 or 2 Years   pleted critical design reviews. By November 1991, however, develop-
                             ment of the noise monitoring, ship control, and weapons stowage and
                             handling systems will be close to completion. In addition, these subsys-
                             tems will have undergone further testing and review. By November
                             1991, the noise monitoring system is scheduled to have completed crit-
                             ical design review, design verification tests, and qualification tests; the
                             propulsor is scheduled to have completed initial operational testing; the
                             ship control system is scheduled to have completed preliminary and crit-
                             ical design reviews; the weapons stowage and handling system is sched-
                             uled to have completed software specification, preliminary design, and
                             critical design reviews and is scheduled to have started environmental
                             testing; and the non-penetrating periscope is scheduled to have begun
                             initial evaluations.

                             By November 1992, or after a 2-year procurement delay, the subsys-
                             tems' development is scheduled to have completed additional milestones.
                             The noise monitoring system is scheduled to have completed software
                             integration testing and begun production of the first operational system,
                             the ship control system is scheduled to have started software system
                             integration and testing and begun hardware production, the weapons
                             stowage and handling system is scheduled to have completed its test
                             readiness review, and the non-penetrating periscope is scheduled to
                             have completed evaluations and started full-scale development.

                             According to the SSN-21 program manager, significant problems or delays
                             during the remaining testing of the propulsor subsystem could result in
                             costly ship construction delays and could impair the first SSN-21's ability
                             to perform its mission. However, the official believed that significant
                             problems were unlikely because of the extensive testing already com-
                             pleted. He further stated that the ship construction program or the
                             ability of the SSN-21 to perform its mission would not be significantly
                             affected by problems or delays during the development and testing of
                             the noise monitoring, weapons stowage and handling, and ship control
                             subsystems. The scope of these subsystems is considered relatively
                             small when compared to the total ship. To date, the project office has
                             reported no significant problems or delays for these subsystems.

                             Page 8                                    GAO/NSIAD-90-297 Navy SSN.21 Program

Navy's Assessment of     According to SSN-21 program officials, a 1-year delay in the SSN-21 pro-
                         gram would result in a cost increase due to such things as inflation and
the Impact of Delaying   decreased economies of scale. These officials provided us with an esti-
Procurement of the       mate. However, because they said the estimate was judgmental and they
                         did not provide support for the estimate, we decided not to include it in
SSN-2                    this report. The Navy and the DOD Comptroller are having ongoing dis-
                         cussions on what the potential cost increase might be-the DOD Comp-
                         troller believes its estimate is lower than the Navy's estimate.

                         SSN-21 program officials also stated that a 2-year delay would cause a
                         crippling blow to many key vendors who are highly dependent on sSN-21
                         work for their economic survival and would bring into question the via-
                         bility of nuclear submarine construction. Appendix III provides a more
                         detailed narrative on these views. The effects on the industrial base,
                         while a valid concern, cannot be quickly analyzed. Furthermore, as a
                         result of the changing world environment, the industrial base would
                         likely have been affected anyway. We believe that Defense managers
                         must begin to manage this issue. At the request of the Chairman, Sub-
                         committee on Projection Forces and Regional Defense, Senate Committee
                         on Armed Services, and the Chairman, House Committee on Government
                         Operations, we have begun a review of this issue.

                         Finally, Navy, Electric Boat, and Newport News Shipbuilding officials
                         say that a 1- or 2-year delay would require overhead costs to be appor-
                         tioned over fewer projects and that, as a result, the lead SSN-21, the
                                the Trident, and the aircraft carrier construction contracts
                         would experience cost increases. Again, no specifics were provided.

The Changing Threat       rhe Navy vicws the Soviet Union's modern submarine force as the pri-
                         mary threat to the United States and its European interests and as the
                         justification for the SSN-21 program. The Soviet Union continues to mod-
                         ernize its force with smaller but more capable submarines. Accordingly,
                          in case of a crisis involving the Soviet Union, the Navy will need to
                          counter this threat.

                         Recent social, economic, and military events (i.e., arms and troop reduc-
                         tions and the Soviet Union's alliance with the world community against
                         hostile Iraqi actions), however, are changing the world's perception of
                         the Soviet bloc. Many analysts believe that a global war witb the Soviets
                         is more unlikely today than at any other period in recent history. The
                         reduced East-West tensions in conjunction with constrained defense
                         budgets are also affecting U.S. military forces. For example, decreased

                         Page 9                                     GAO/NSIAD-90-297 Navy SSN-21 Program

                  Soviet submarine patrols have prompted          DOD   to propose cuts in some
                  U.S. antisubmarine warfare operations.

                  As the threat of global war with the Soviet bloc wanes, the Navy points
                  to an emerging Third World diesel/electric submarine threat. However,
                  in a May 7, 1990, Congressional Research Service Issue Brief entitled
                  "Seawolf or SSN-21 Nuclear-Powered Attack Submarine," the following
                  points were made:

                  "Opponents of the SSN-21 acknowledge that other potentially hostile countries,
                  including China and a score of Third World countries, operate a collective total of
                  about 250 attack submarines. But only 5 or 6 of these submarines (4 or 5 of China's
                  and 1 of India's) are nuclear powered, and many of the others are older units of
                  limited capability and dubious operational status. Moreover, they argue, it is
                  unlikely that U.S. SSNs would ever be in hostilities with more than a small fraction
                  of these submarines at any one time. The capabilities of the improved SSN-688s,
                  they argue, will be more than sufficient to counter these potentially hostile non-
                  Soviet submarines."

Agency Comments   Due to the short time available to conduct this review, we did not obtain
                  written agency comments. However, we discussed the results of our
                  work with DOD and Navy officials and have incorporated their comments
                  where appropriate. According to the Navy, a 1- or 2-year delay in the
                  SSN-21 program will increase the cost of current shipbuilding contracts,
                  increase the cost of future SSN-21s, and further erode the shipbuilding
                  industrial base. In addition, the Navy says that the SSN-21 program has a
                  structured test program designed to begin subsystem testing early in
                  development. The Navy believes that this process will preclude signifi-
                  cant problems that would negatively affect design and construction of
                  the first SSN-21.

                  It is also the Navy's position that the capability of the U.S. submarine
                  force must be based on countering the capabilities of all our potential
                  adversaries. For example, Soviet Union construction of significantly
                  advanced classes of submarines is continuing. Although the majority of
                  the Third World diesel submarines are less capable than modern U.S.
                  nuclear submarines, the Navy's position is that they can be used effec-
                  tively for several mission areas. The Navy also pointed out that in the
                  last decade alone several countries have begun their own indigenous
                  submarine programs and have made significant advances in quieting
                  and air-independent propulsion technologies.

                  Page 10                                         GAO/NSIAD-90-297 Navy SSN.2 Drogram

We are sending copies of this report to the Chairmen, House Committee
on Armed Services, Senate Committee on Governmental Affairs, House
Committee on Government Operations, and Senate and House Commit-
tees on Appropriations; the Director, Office of Management and Budget;
and the Secretaries of Defense and the Navy. We will also make copies
available to others upon request.

Appendix IV describes our objectives, scope, and methodology. Major
contributors to this report are listed in appendix V. If you or your staff
have any questions on this report, please call me on (202) 275-6504.

Martin M Ferber
Director, Navy Issues

Page 11                                   GAO/NSIAD-90-297 Navy SSN.21 Program

Appendix I                                                                                     14
Components: Selected
Development and
Production Milestones
Fiscal Years 1990-
Appendix II                                                                                    15
Other Concurrent
Subsystems: Selected
Development and
Production Milestones
Fiscal Years 1990-
Appendix III                                                                                   16
Navy's Assessment of     Impact of Delaying Program on Vendor Base                             16
the Impact of Delaying
Procurement of the
Appendix IV                                                                                    18
Objectives, Scope, and   Navy Ships Sail the Seas                                              18
Appendix V                                                                                     20
Major Contributors to
This Report

                         Page 12                              GAO/NSIAD-90-297 Navy SSN.21 Program

Figures   F:Igure I:Current and Projected SSN-21 Design Status                    4
          Figare 2-Current and Projected SSN-21 Construction                      5

          AN/3-2    SSN-21 combat system
          DOD       Department of Defense
          EMSP      enhanced modular signal processor
          SSN-2 1   Seawoif nuclear attack submarine
          IM        wide aperture array
          SSN-688   Los Angeles nuclear attack submarine

          Page 13                                GAO/NSAD-90.297 Navy SSN-21 Program
Appendix I

AN/BSY-2 Components: Selected Development
arnd Production Milestones Fiscal Years 1990-
  AN/B SY-2 Components

  Combat System:
    Software                                                 C       ~        .-------

    Hardware                                                 c       ~            ---                                                                                                          D

  Related Components:/
    WAA                                                      C   _        _        _           _      ~~................
                                                                                          h~~       ~ ~~ ..... .... .                            N    S   g    ...        -   -

      SEM-E3                  _________                    -D

               Ara   To e                                              ....
                                                                 .B......                                               ..           .......

                                                                                          ..        .   ........
                                                                                                         .      .   .        .   .   .    ........

                                                             StatusB                                    'i~"'.....
                MFA2     an
                                                                                                                I--IN                                     .D

                                01         02        03     04       01         02             03          04           01           02          03       04         01           02      03   04
                                                FY90                                    FY91                                              FY92                                         FY93
                                      -         Development timelino
                                      --        Produciiontimeline
                                                 Progress if 1-year deiay.

                                                 Additional progress if 2-year delay

                                                 EMSP = Enhancod Modular Signal Processor
                                                 LFBA = Low Frequency Bow Array
                                                 LSA   = Large Spherical Array
                                                 MFA   =Medium Frequency Active Array
                                                 SEM-B -EMSP version for first three submarines
                                                 SEM-E    EMSP version for remaining submarines
                                                 WAA   =Wide Aperture Array passive acoustics sensors
                                                 P =Completion of Preliminary Design Review
                                                 C = Completion of Critical Design Review
                                                 DV = Completion of component development
                                                 BP = Begin production of first operation system
                                                 DL = First delivery
                                                 'Software production consists of downloading or copying the software to the new
                                                 production hardware.
                                                  According to the Navy SSN-21 program office, the SSN-21 program is responsible
                                                 for hydrophones only.

                                                 Page 14                                                                                        GAO/NSIAD.90.297 Navy &8N.21 Program
Appendix II

Other Concurrent Subsystems: Selected
Development and Production Milestones .Fiscal
Years 1990-1993
  Other Concurrent Subsystems
  Noise Monitoring System                                                                                                                             V..:
                                                                                                                    ':.:.:         .                 ... ........
                                                                                                                                                                             .....                  DL
  Propulsor--                                DV/BP            --                      "
                                                                                                                               -        ...... ........                      DL
  Ship Control System                                                       .         .
     Hardware                                                      •                                                     ,'.                                                 .       -      . DL

     Software                                                                                      ,,                                                                                    -ET
                                                                                     ? ...                                                                                   ,       -      TD
  Weapons Stowage and                                                                                                                                                    '
    Handling Control System                                   BP                                                                                                         ....--,.,-,.,.--      DL
  Non-penetrating                                                      ;...<.:.:;
    Perisocope.                                                                                .

                                                                                          . ... .......:............:.
                                                               SCrt :...:.....

                                01           02       03     04        01             02     03                      04                01          02    03         04       Q1          02    03   04
                                                  FY90                                  FY91                                                         FY92                                  FY93
                                     -             Development timeline
                                         -         Production timelne
                                                   Progress if 1-year delay.

                                                   Additional progress if 2-year delay.

                                              F        =   Beginning of full scale development
                                              P        =   Completion of Preliminary Design Review
                                              C        =   Completion of Critical Design Review
                                              ST       =   Start system integration and testing
                                              DV       =   Completion of component development
                                              ET       =   End system integration and testing
                                              BP       =   Begin production of first operational system
                                                  DL = First delivery
                                                  'Schedule not required as of September 1990.

                                              Page 15                                                                                                     GAO/NSIAD-90-297 Navy SSN-21 Program
Appendix III

Navy's Assessment of the Impact of Delaying
Procurement of the SSN-21

                     According to the Navy, delaying procurement of the SSN-21 would nega-
                     tively affect the existing supplier base. The U.S. shipbuilding industry is
                     currently dependent o-n Navy work due to a loss in commercial ship con-
                     struction work in the last decade. Despite the expansion of Navy ship
                     programs during the mid-1980s, over the past 10 years, the industry has
                     lost more than 40,000 people from the shipbuilding and repair programs
                     and more than 100,000 people from industries supporting such

Impact of Delaying   A Newport News Shipbuilding official stated that there has been a sig-
                     nificant reduction in the number of vendors supplying key commodi-
Program on Vendor    ties-steel, pipe, and valves-on existing construction contracts.
Base                 Electric Boat has had similar experiences with vendors that provide
                     commodities such as forgings, copper tubes, and structural steel. These
                     officials have concluded that delaying future SSN-21 procurement would
                     cause additional suppliers to leave the marketplace, resulting in higher
                     overall product cost, longer lead times for materials, and reduced flexi-
                     bility for the Navy and the shipbuilder. As mentioned earlier, we are
                     beginning a review of the industrial base issue. At this time, we cannot
                     comment on the impacts cited by the Navy and shipbuilding officials.

                     According to the Navy, since 1980, the number of U.S. suppliers pro-
                     viding key ship system components declined from 100 to about 77, or
                     more than 20 percent. The Navy projects a further reduction of 17 sup-
                     pliers by the year 2000. The number of suppliers providing key combat
                     system components, however, has increased from 39 to 55, or 41 per-
                     cent, during the last decade, but by the year 2000, a decline to 40 ven-
                     dors is expected.

                     According to the Navy, decreased shipbuilding will further reduce com-
                     petition and dual sourcing, which they say increased the number of
                     combat system vendors during the 1980s. In addition, lower acquisition
                     rates or the procurement of different types of ships could also adversely
                     affect many essential vendors that are dependent on a single-ship class.

                     Because of the loss of commercial construction, changes in the mix of
                     Navy ships, and a decline in U.S. vendors/suppliers, some equipment,
                     such as air circuit breakers and large diesel engines, is supplied by only
                     one domestic vendor. In addition, some equipment, such as crankshafts
                     and turbochargers, for large diesels is available only from foreign
                     sources. Electric Boat officials further stated that the submarine mate-
                     rial supplier base is highly specialized. Previous declines ini submarine
                     construction activity have reduced the number of committed suppliers

                     Page 16                                   GAO/NSIAD-90-297 Navy SSN.21 Program
Appendix Ell
Nevy's Assessment of the Impact of Delaying
Procurement of the SSN-21

to the minimum levels. The remaining supplier base has undergone
numerous consolidations, divestitures, and buyouts as these suppliers
reexamine their viability in the face of further cutbacks. According to
these officials the preservation of the remaining supplier base is critical
to the support of the existing submari.ne fleet as well as to the Seawolf

Electric Boat officials stated that a delay i, awarding future SSN-21S will
not only have an immediate impact on the vendor base for future SSN-21S
but also could have an immediate negative effect on the first ship, which
is currently under construction. If the remaining supplier base realizes
insufficient near-term or future work in its product line, it will not make
the requisite capital investments and required tooling and therefore will
not bid on the first ship. These officials said that this could negatively
affect the cost and performance of the first ship.

Page 17                                       GAO/NSIADI90-297 Navy SSN.21 Program
Appendix IV

Objectives, Scope, and Methodology

                  The Chairmen, Senate Committee on Armed Services and its Subcom-
                  mittee on Projection Forces and Regional Defense, asked us to (1) deter-
                  mine the level of concurrency within the SSN-21 program, with particular
                  attention to the AN/BSY-2 combat system, and (2) provide our opinion on
                  whether the Congress should approve procurement of the SSN-21 in fiscal
                  year 1991.

                  We interviewed officials and reviewed relevant documents at the fol-
                  lowing locations:

              *   SSN-21 Program Office and AN/BSY-2 Combat System Program Office,
                Naval Sea Systems Command, Washington, D.C.
              * Electric Boat Division of General Dynamics, Groton, Connecticut
              " Newport News Shipbuilding and Dry Dock Company, Newport News,
              • Navy Supervisor of Shipbuilding, Conversion, and Repair at Groton,
                Connecticut, and Newport News, Virginia

                  Due to the time constraints of this assignment, this report is based on
                  our prior work, recent interviews with shipyard and Navy officials, and
                  our analysis of program planning documents. We did not validate data
                  or Navy or shipyard officials' statements.

                  To determine the level of concurrency within the SSN-21 program, we
                  examined the status of the ship design, first-ship construction, and
                  selected subsystems, including their development milestones. To deter-
                  mine the status of ship design, we interviewed shipyard and Navy
                  Supervisor of Shipbuilding officials to determine the extent to which the
                  design was on schedule. We also obtained data from each shipyard on
                  how many drawings had been completed to date and how many were
                  scheduled to be completed during the next 2 years.

                  To determine the first ship's construction status, we interviewed Elec-
                  tric Boat and Supervisor of Shipbuilding officials and obtained data pre-
                  pared by Electric Boat regarding construction completed and
                  construction scheduled to be completed during the next 2 years.

                  To determine the status of selected SSN.21 subsystems, we interviewed
                  Naval Sea Systems Command officials and reviewed SSN.21 program
                  office documents. We selected the 10 subsystems listed in this report
                  based on historical congressional interest, their criticality to mission

                  Page 18                                   GAO/NSIAD- 0-297 Navy SSN.21 Program
Appendix IV
Objectives, Scope, and Methodology

performance, and suggestions by the program office. The Naval Sea Sys-
tems Command provided data on the subsystems' status and their devel-
opment milestones scheduled during the next 2 years. Newport News
Shipbuilding officials provided us with information on the status of and
the scheduled milestones for the subsystems they are designing.

To determine the impact of delaying procurement of the 2nd and 3rd
SSN-21s by 1 or 2 years, we (1) identified planned design, construction,
testing, and subsystem development events scheduled during the next 2
years and (2) obtained opinions of Electric Boat and Newport News
Shipbuilding officials. Shipyard officials' opinions were made based on
the assumption that, after a 1- or 2- year delay, the SSN-21 program
would continue as originally planned, that is, 3 boats purchased every
other year for a total of 29 boats.

We conducted this review in August and September 1990 in accordance
with generally accepted government auditing standards.

Page 19                                 GAO/NSIADOO-297 Navy SSN-21 Programn
Appendix V

Major Contributors to This Report

                         Frederick A. Bigden, Assistant Director
National Security and    Sarah J. Brady, Evaluator
International Affairs    Rose Marie Ham, Evaluator
Division, Washington,
Information              Andrew Patchan Jr., Evaluator
   nrm t n d             Heather A. Winand, Evaluator
Management and
Technology Division,
Washington, D.C.
Boston Regional Office   Ralph L. Tavares, Evaluator-in-Charge

                         Mary R. Offerdahl, Evaluator

Norfolk Regional         Brenda M.Waterfield, Evaluator

                         Rebecca S. Beale, Evaluator

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