GAO: $12.8B Navy Carrier Project Weighed Down With Problems

The U.S. Navy should delay the award of a multibillion-dollar contract to Huntington Ingalls Industries Inc. to build the second aircraft carrier in a new class as the first one faces failings from its radar to the gear that launches planes, congressional investigators said.

“Technical, design and construction challenges” with the first carrier, the USS Gerald R. Ford, have caused “significant cost increases and reduce the likelihood that a fully functional ship will be delivered on time,” the Government Accountability Office said in a draft report obtained by Bloomberg News.

The Ford, already the most expensive warship ever built, is projected to cost $12.8 billion, 22 percent more than estimated five years ago. The report raises questions about the future of U.S. seapower in a time of reduced defense budgets and about whether new carriers are affordable as they assume greater importance in the Pentagon’s strategy to project U.S. power in the Asia-Pacific region.

Delays and “reliability deficiencies” with the flattop’s new dual-mission radar, electromagnetic launch system and arresting gear for aircraft mean that the Ford “will likely face operational limitations that extend past commissioning” in March 2016 and “into initial deployments,” the agency said.

The GAO, the investigative arm of Congress, said that’s reason enough to delay the contract that’s scheduled to be issued this year for the second ship, the USS John F. Kennedy.

‘Repeating Mistakes’

“It will be important to avoid repeating mistakes” in the contract for the Kennedy, the GAO said. “Staying within budget” will require the Navy to reduce “significant risk mainly by completing land-based testing for critical technologies before negotiating a contract” with Newport News, Virginia-based Huntington Ingalls.

Beci Brenton, a company spokeswoman, said in a telephone interview that “it would not be appropriate to comment on a draft report.”

Naval Sea Systems Command spokeswoman Colleen O’Rourke said the command also wouldn’t comment.

“As the Navy is currently working with the GAO on this report, it would be inappropriate to comment on any draft findings at this time,” she said in an e-mail. “When the report is finalized, it will include Navy comments.”

Huntington Ingalls rose 2.4 percent to $56.64 in New York at 3:20 p.m. after rising 31 percent this year.

The Navy is grappling with how to pay for a shipbuilding plan that anticipates $43 billion for three carriers in the Ford class, as well as $34 billion for 52 Littoral Combat Ships and a 12-vessel nuclear submarine fleet to replace the Ohio-class submarine.

Estimate ‘Optimistic’

While the GAO said that the Navy and Huntington Ingalls are taking steps to control costs for the Ford, most increases occur after a vessel is 60 percent complete and key systems are installed and integrated. The Ford is now 56 percent complete.

Even the current $12.8 billion estimate is “optimistic because it assumes the shipbuilder will maintain its current level of performance throughout the remainder of construction,” the GAO said.

The Pentagon’s independent cost-estimating office, the Congressional Budget Office and a Navy-commissioned panel project final costs as high as $14.2 billion, the GAO said.

The draft report also raises questions about how many aircraft carriers the nation will have ready this decade. Congress has given the service temporary relief from the requirement to have 11 fully capable aircraft carriers. There are now 10 after deactivation of the USS Enterprise, and the Ford is supposed to bring that back to 11 by March 2016.

‘Reliability Shortfalls’

“As it now stands, the Navy will not be positioned to deliver a fully capable ship at the time,” the GAO said.

“Reliability shortfalls facing key Ford-class systems cloud the Navy’s ability to forecast when, or if” the carrier will meet the aircraft sortie rates and reduced manning requirements that distinguish it from the older Nimitz class, the GAO said.

O’Rourke, the Naval Sea Systems Command spokeswoman, wouldn’t comment on the specific value of the potential detailed design and construction contract to Huntington Ingalls for the Kennedy that the GAO said is due in September.

Cost Breakdown

The largest share of the cost increase for the Ford, 38 percent, stemmed from technologies delivered by the Navy, including the radar, launch system and arresting gear, according to the GAO.

The electromagentic launch system made by San Diego-based General Atomics has increased to $742.6 million, up 134 percent since 2008, the GAO said. The cost of arresting gear also made by the company increased 125 percent to $169 million.

Raytheon Co.’s dual-band radar has increased 140 percent to $484 million, according to data cited by the GAO. Twenty-seven percent of the cost growth was pegged to shipbuilder design issues and another 27 percent to construction, both attributed to Huntington Ingalls.

Huntington Ingalls is building the Ford under a $4.9 billion detailed design contract that covers the shipbuilder’s portion of constructing the vessel. It doesn’t cover other costs, such as the nuclear reactor to power the ship and other government-furnished equipment.

The GAO said its analysis indicates that Huntington Ingalls “was forecasting an overrun at contract completion of over $913 million” that it said stemmed from “the shipbuilder not accomplishing work as planned.”

Huntington’s Brenton said in an e-mail in May that, “as the first new design carrier beginning construction in more than 40 years,” the Ford “is designed to provide increased capability and reduced total ownership cost by about $4 billion compared to Nimitz-class carriers.”

“For this first-of-class ship, construction commenced in parallel with design completion based on earlier decisions at Department of Defense,” she said. “Ongoing design during the construction process caused delay and inefficiencies in procurement, manufacturing, and assembly.”

Pentagon chief heads to Egypt in Mideast tour

US Defense Secretary Chuck Hagel travels to Egypt Wednesday as part of a Middle East tour designed to bolster America's alliances amid growing concern over the fallout from Syria's roiling civil war. 

In his first trip to the Middle East as Pentagon chief, Hagel is promoting longstanding US military ties with traditional allies — including Israel and Saudi Arabia — as a way of countering Iran and deterring Islamist militants.

Hagel, who was in Riyadh on Tuesday evening to finalize a major arms sale to Saudi Arabia, was scheduled to fly to Cairo to meet his counterpart, General Abdel Fattah al-Sissi, and later hold discussions with President Mohamed Morsy.

For years Egypt was at the center of America's strategic influence in the region but since the 2011 ouster of then-President Hosni Mubarak, the United States has had to contend with new political realities and an independent-minded government in Cairo.

US officials, however, say security ties cultivated over decades between the two countries have survived the revolution and that America's military leaders still have a direct channel to Egypt's powerful top brass.

"We can pick up the phone, the secretary of defense, and have his counterpart who we can talk to at any time," a senior defense official told reporters last week before Hagel's trip.

"Despite changes in the Egyptian military and political system, that's been constant."

 In the post-Mubarak era, the United States still provides more than a billion dollars in annual military aid to Egypt. The huge funding package has always been seen as a way of ensuring Cairo abides by the 1979 peace accords with Israel.

Hagel and his counterparts are expected to discuss relations with Israel, deteriorating security in the Sinai Peninsula and Egypt's domestic politics, officials said.

Tensions rose after two rockets were fired from the Sinai at the Israeli Red Sea resort of Eilat last week, with a Salafi jihadi group claiming responsibility for the attack.

Israel has complained to Egypt over the incident and threatened to take military action if the attacks continue.

Hagel's visit coincides with political crises and power struggles in Egypt, including a hemorrhaging economy and threats by the opposition to boycott parliamentary elections.

"He'll have an opportunity to talk directly with Egyptian officials about the difficult times they're in," said the defense official.

Hagel's trip will mark the first meeting between US and Egyptian defense chiefs since former defense secretary Leon Panetta paid a visit last August.

The new Pentagon chief, who took office two months ago, came to the Middle East touting an elaborate arms deal with Israel, Saudi Arabia and the United Arab Emirates, designed to bolster America's partners as a counterweight to Iran.

But Syria's raging civil war has topped the agenda through much of Hagel's trip, amid renewed fears Syrian President Bashar al-Assad's regime has turned to deadly chemical weapons in its fight with rebel forces.

An Israeli general in military intelligence said Tuesday that the Damascus regime had employed chemical agents, most likely sarin, more than once in battles in recent months.

The United States has said any use or transfer of chemical weapons would cross a "red line" and possibly trigger military action. But Hagel's spokesman said the US government was still not convinced chemical agents had been employed and that the claims were being reviewed.

Hagel began his tour with a three-day visit to Israel and he stopped in Jordan before flying to Riyadh on Tuesday.

After discussions in Egypt, Hagel will head to the United Arab Emirates, which has signed up to buy nearly $5 billion worth of American-made F-16 fighter jets as well as sophisticated missiles that can hit targets at a long-range.

Pentagon holds event to recognize gay troops

In the course of a year, Marine Capt. M. Matthew Phelps says he went from being a gay man “in the closet,” afraid of being discharged, to invitee at the White House gay pride reception, drinking champagne with his commander in chief.

Phelps told his story Tuesday at the Pentagon’s first-ever event to recognize the service of gay and lesbian troops. The historic event came nine months after repeal of the 18-year-old “don’t ask don’t tell” policy that had prohibited gay troops from serving openly and forced more than 13,500 service members out of the armed forces.

“Last June ... I was at a point in my career that if anyone had found out that I was gay ... I could have lost my job,” Phelps told some 400 uniformed and civilian Defense Department employees packed into a Pentagon auditorium.

“A year later ... I, Capt. Matthew Phelps, was invited to attend this pride reception at the White House,” Phelps said of the June 15 reception hosted by President Obama. “And I thought how amazing is it over the course of a year, I could go from being fired for being who I am, to having champagne with the commander in chief — on cocktail napkins with the presidential seal on it.”

Phelps appeared on a panel of current and former service members, some of whom told of their experiences before the repeal of “don’t ask don’t tell” and how life is different now. The audience filled the seats and dozens more stood along the walls, roughly 1 in 5 were in uniform and the rest civilians who had not been subject to the old policy.

“For those service members who are gay and lesbian, we lifted a real and personal burden from their shoulders,” top Pentagon lawyer Jeh Johnson said in a speech opening the event that lasted about an hour and a half. “They no longer have to live a lie in the military” or “teach a child to lie to protect her father’s career.”

Before the repeal, gay troops could serve but could be discharged if they revealed their sexual orientation. At the same time, a commanding officer was prohibited from asking a service member whether he or she was gay.

“For all of us, we should honor the professional and near-flawless manner in which our entire U.S. military implemented and adapted to this change,” Johnson said of the months since repeal.

Although some had feared repeal would cause problems in the ranks, officials and gay advocacy groups say there have been a few isolated incidents but no big issues — aside from what advocacy groups criticize as slow implementation of some changes, such as benefit entitlements to troops in same-sex marriages.

Defense Secretary Leon Panetta said last month that military leaders had concluded that repeal had not affected morale or readiness. A report to Panetta with assessments from the individual military service branches said that as of May 1 they had seen no ill effects.

An argument against open service for years had been that acknowledging the presence of gays would hurt unit cohesion, which is military talk for the sense of being part of a team that works well together.

Phelps argued Tuesday that repeal did just the opposite — improved unit cohesion. He said that hit home for him during a 2007 deployment to Iraq.

“Every Saturday night, the officers used to get together and smoke cigars and watch movies,” he said. “Of course, their thoughts would all drift to home and everyone would talk about their families and their wives and the letters that they got from their kids — and I sat in the back of the room not talking to anybody.

“Not only was it so hard to have left somebody at home ... but when everybody was getting together and growing closer as a unit, by virtue of the fact that I wasn’t allowed to say anything, I was actually growing more distant from my unit,” said Phelps, who now serves at the Marine Corps Recruit Depot, San Diego.

After repeal, he said, unit cohesion improved.

Phelps drew long laughter when he told of the day “don’t ask don’t tell” ended last fall.

“I went to work on the 20th of September, thinking my life was going to change. I sat down at my desk and I kind of braced myself on the desk, waiting for everyone to come and ask me if I was gay,” he said. “And believe it or not, nobody did.”