Navy: Carrier cost overruns may hit $1.1 billion

Pilot Online ^ | 01-02-2012 | Tony Capaccio

[em2vn]

The Navy has estimated a worst-case cost overrun of as much as $1.1 billion for the aircraft carrier Gerald R. Ford, the service's most expensive warship.

The carrier is being built in Newport News by Huntington Ingalls Industries under a cost-plus, incentive-fee contract in which the Navy pays for most of the overruns. Even so, the service's efforts to control expenses may put the company's $579.2 million profit at risk, according to the Navy.

[em2vn]

Cost plus? No wonder my old man loved cost plus when he was a building contractor.

[hosepipe]

As the fed prints more fiat money the value of the dollar goes down and down..
And union wages go up and up...

Morphing this republic into a democracy is very very expensive..
Any democracy is loaded with hungry economic Vampires..

[central_va]

$1.1B is about 6 hours in FedGov™ deficit spending.

[Vroomfondel]

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[MarkL]

I just saw a show about the Gerald R. Ford. It's going to be the first US carrier to use electromagnetic catapults for aircraft launches. Unfortunately it's at least 7 months behind schedule (at the time of the filming), and if things don't work out, there's really no way to retrofit the ship with steam powered catapults.

On the good side, though, they did have successful test launches of an F-18 from the test facility.

Mark

[edpc]

On the bright side, the carrier will never allow Soviet domination of Eastern Europe.

[norton]

This is a government systems contract, not construction.

Odds are that most of the overrun is due to government interpreting it's original specifications as calling for more than was bid and accepted. It's an incentive fee so the feds can play games with "cooperation", "innovation", "quality" and just about any other subjective measure they can dream up. You lose profits if they deem it to be so.

So; want some extra stuff?
Willing to pay added costs if they are properly accounted for?
Going to judge me on my behavior?
Youbetcha sailor, it's coming right up!

[sam_paine]

a cost-plus, incentive-fee contract in which the Navy pays for most of the overruns. Even so, the service's efforts to control expenses may put the company's $579.2 million profit at risk, according to the Navy

This excerpt rings with everything I'd expect from the government.

The only reason to award cost-plus is if the plans are not clear enough to bid the contract for a fixed price. Sure enough, now there are cost+plus "expenses" due to what? Poor workmanship...or Navy bureaucrats bickering over the plans and components? I can guess the latter.

So next we see what is also to be expected...complaints that there are overruns...likely due to changes requested by the Navy. And if not, then why should the Navy pay?

So NOW I'll take off my blindfold and read the article in the spirit of Lazamataz!!!! =)

[sam_paine]

That’s along the lines of what I was thinking in 8.

[norton]

(PS) Note: it is true that the first of a series costs more than later editions but cost estimates are usually made on a slope with the target cost in the middle between high and low.
That's just about always an issue in any cost based contract but it's virtually invisible in a fixed price contract unless and until the total procured quantity is reduced and overall costs are skewed toward the higher number. That is why so many large procurements are more economical if left to completion than having the Quantity cut to "save costs". (Reduction is a contract change and any change opens the door to renegotiation.)

[elpadre]

and just how do the contractors justify such massive overruns???

any dollars going to fund political campaigns??

unions jumping up payrolls??

all change orders as significant as this need to be made public!!

[bonfire]

I dunno but they are building two more in this class. Hopefully by the time the third one comes along, which is scheduled for 2024, they will have a better handle on what it takes to build this new class of carrier.

[FlyVet]

Cost plus. During my last 5 years of service, I was housed in a converted hangar. Our roof was probably about acre-sized, and it had been re-done under a $200,000 "cost plus" contract. Leaked like a sieve, every time it rained, and never was fixed right. I said, give me 20 grand and a few dozen buckets of roof sealant, and I'll fix it by myself. Probably would have taken me less than a week. But we were not allowed to touch it self-help. Contract, you know.

That was ten years ago, and it's probably still leaking. Worthless idiots.

[exit82]

On the bright side, the carrier will never allow Soviet domination of Eastern Europe.

Bonus points for obscure referenece to 1976 Presidential campaign debate involving one Gerald R. Ford.

[Drew68]

On the good side, though, they did have successful test launches of an F-18 from the test facility.

I'll be happy if the toilets work.

[central_va]

Class and type:	Gerald R. Ford-class aircraft carrier
Displacement:	appx. 100,000 tons
Length:	1,092 ft (333 m)
Beam:	134 ft (41 m)
Propulsion:	2 × A1B reactor
Speed:	30+ knots
Range:	Unlimited distance; 20-25 years
Complement:	4,660
Armament:	Evolved Sea Sparrow Missile
Rolling Airframe Missile
Close-in weapons system (CIWS)
Aircraft carried:	More than 75

[delapaz]

Three elevators and they moved the mast way to the back.

So it’s a whole new class then. Ugh... “a Ford class carrier”.

Should have saved the Reagan name for this one.

[John S Mosby]

Leads me to wonder- is there a back up to steam catapults? Can’t have electro anything if there is a system failure, and it presumes no power generation problems, conventional or otherwise.

Principle is like the rail gun for the electro mag cat shots.

[RBW in PA]

Defense Acquisition University graduates at their best…

[TexasTransplant]

A Billion here a Billion there ... before you know it...

it’s almost an 0bama Vacation

TT