Brian Bradley
NS&D Monitor
1/9/2015
With the $100 billion Ohio-Class submarine replacement program threatening to disrupt the Navy’s goal of building up to a 300-ship fleet by 2019, the service’s top acquisition official on Jan. 6 underscored the need for Congress and the Navy to have a “very important discussion” on SSBN(X) funding. Speaking during an event at the Atlantic Council in Washington, Sean Stackley, Assistant Secretary of the Navy for Research, Development and Acquisition, said the Sea-Based Deterrence Fund that Congressional authorizers approved in the Fiscal Year 2015 National Defense Authorization Act is a “good first step,” but remains zero-sum without additional top-line funding to relieve the financial burden the Ohio Replacement Program is expected to place on the wider Navy shipbuilding budget.
Stackley urged Congressional authorizers to review in future budget deliberations the challenges surrounding funding for the U.S. at-sea nuclear deterrent, and invoked memories of the original procurement of current Ohio-class subs, which spiked the shipbuilding budget by an amount comparable to the additional $5-7 billion that the Ohio Replacement is expected to drive up the current shipbuilding budget every year through the end of the 2020s. “We’re facing the same challenge,” he said. “So the authorizers—we don’t have the solution today, but a step in the right direction is to acknowledge that we’ve got a challenge here. We’ve got to start to put the tools in place to deal with that challenge.” Echoing recent remarks by other Navy officials, Stackley said the service life of the current Ohio-class submarines could not be extended. “It’s been done, so we’re at the limits,” he said. “It poses a significant impact for our shipbuilding budget.”
Funding Sources for Deterrence Fund Remain Unclear
The Sea-Based Deterrence Fund authorizes up to $3.5 billion in unobligated balances from Fiscal Years 2014, 2015 and 2016 to shift into a standalone Ohio Replacement account, but future funding sources remain unclear. In a November interview with NS&D Monitor, Naval Sea Systems Command’s Jack Evans, Ohio Replacement Program Executive Officer, called the Sea-Based Deterrence Fund an “alternative resourcing strategy.” While the separate account protects the program from the regulations of the SCN [Shipbuilding and Conversion, Navy] budget through FY 2016, thereby allowing quantitative and organizational flexibility, the biggest funding need starts in 2017 when the program is slated to begin its detail and design phase.
Officials have indicated that funding increases would be key for program accomplishment, regardless of the existence of a Sea-Based Deterrence Fund. “Do I find a business case where I’m saying if I can group those orders in a more efficient order that doesn’t necessarily rigorously align to what my ship requirement is, then I’m going to propose that,” Evans said. “It’ll be up to [the Defense Department] and Congress whether or not they accept that proposal. So the sea-based fund could be a method by which we have that discussion and/or decision going forward. But … I could still do it within the current procurement systems and budget systems.”
In his remarks this week, Stackley expressed favor regarding the leeway that the Deterrent Fund has given the Navy thus far. “We’re at least years in front of [funding needs],” he said. “So, that’s not a fire on our doorstep when we have to deal with it and this year and again next year and the year after.”
Ohio Replacement Not ‘Far Down the Road’
Stackley highlighted the immediate need for the ongoing Ohio Replacement Program to be fully funded, emphasizing the fact that the program is outlined in the Future Years’ Defense Program (FYDP). “This isn’t something that’s far down the road,” he said. “It’s inside of our FYDP in terms of dealing with that cost, and its impact on shipbuilding.”
The Navy is set to eclipse 300 ships by 2019, up from its current number of 289. “And the reality is that we’ve got 44 ships under construction, we’ve got another dozen under contract, we’ll get another eight under contract here in 2015,” Stackley said. He added: “We’re going to fund the Ohio Replacement. That is not in the balance. The question is how do we maintain the balance of our shipbuilding program as we fund the Ohio Replacement?”
