The Navy has identified the Ohio replacement program, also known as the SSBN(X) program, as the Navy’s top priority program. The Navy wants to procure the first Ohio replacement boat in FY2021, and the $773.1 million in AP funding requested for FY2017 represents the initial procurement funding for that boat.
A March 2015 GAO report assessing selected major DOD weapon acquisition programs states that the estimated total acquisition cost of the Ohio replacement program is about $95.8 billion in constant FY2015 dollars, including about $11.8 billion in research and development costs and about $84.0 billion in procurement costs.
The Navy as of February 2015 estimated the procurement cost of the lead boat in the program at $14.5 billion in then-year dollars, including $5.7 billion in detailed design and nonrecurring engineering (DD/NRE) costs for the entire class, and $8.8 billion in construction costs for the ship itself. (It is a traditional budgeting practice for Navy shipbuilding programs to attach the DD/NRE costs for a new class of ships to the procurement cost of the lead ship in the class.)
In constant FY2010 dollars, these figures become $10.4 billion, including $4.2 billion in DD/NRE costs and $6.2 billion in construction costs for the ship itself.
The Navy in January 2015 estimated the average procurement cost of boats 2 through 12 in the Ohio replacement program at about $5.2 billion each in FY2010 dollars, and is working to reduce that figure to a target of $4.9 billion each in FY2010 dollars. Even with this cost-reduction effort, observers are concerned about the impact the Ohio replacement program will have on the Navy’s ability to procure other types of ships at desired rates in the 2020s and early 2030s.
Potential issues for Congress for the Ohio replacement program include the following:
-- whether to approve, reject, or modify the Navy’s FY2017 funding request for the program;
-- whether to authorize and appropriate FY2017 advance procurement (AP) funding for the program in the Navy’s shipbuilding account or the National Sea-Based Deterrence Fund (NSBDF);
-- whether to approve, reject, or modify the Navy’s proposed strategy for building Ohio replacement boats at the country’s two submarine-construction shipyards;
-- the likelihood that the Navy will be able to reduce the estimated average procurement cost of boats 2 through 12 in the program to the target figure of $4.9 billion each in FY2010 dollars;
-- the accuracy of the Navy’s estimate of the procurement cost of each SSBN(X); and
-- the prospective affordability of the Ohio replacement program and its potential impact on funding available for other Navy shipbuilding programs.
This report focuses on the Ohio replacement program as a Navy shipbuilding program. CRS Report RL33640, U.S. Strategic Nuclear Forces: Background, Developments, and Issues, by Amy F. Woolf, discusses the SSBN(X) as an element of future U.S. strategic nuclear forces in the context of strategic nuclear arms control agreements.
Click here for the full report (45 PDF pages) hosted on the website of the Federation of American Scientists.