Congress Is Fixing The Navy’s Sinking $21 Billion Shipyard Rescue Plan:
The Navy’s massive $21 billion, twenty-year effort to modernize the sea service’s four public shipyards is already years behind schedule. Congress, eager to help, is advancing several legislative approaches aimed at fully funding the Navy’s entire Shipyard Infrastructure Optimization Plan. While Congress works to deliver the equivalent of almost two $13 billion Gerald R. Ford Class aircraft carriers in “no-strings-attached” public shipyard funding, congressional concerns have helped the Navy start a much-needed reboot of their wayward, 3-year old shipyard recapitalization effort.
With Congressional prodding, the Navy is now carrying out the tough organizational tasks required to ensure success. Navy leaders are narrowing the rescue plan’s immediate focus to a more manageable five-year timeframe, announcing yesterday that the service intends to spend over $4 billion on the public shipyards over the next five years. Naval leadership is also finally being forthright about setting public expectations, emphasizing that the Navy’s initial $21 billion request for the twenty-year shipyard recovery project was nothing more than a back-of-the-envelope, rough order of magnitude estimate. But there is much more Congress can do. With a little congressional encouragement, the Navy can install a dedicated and proven senior project leader with clear lines of authority, as well as issue a revised, publicly disclosed timeline to ensure project accountability.
Leadership is a priority. The $21 billion, twenty-year effort needs a responsible leader right now. The command-and-control structure is confusing and, in the “leadership by committee” atmosphere, nobody appears to be in charge of any of it. That shouldn’t be the case. In June 2018, Naval Sea Systems Command launched the Shipyard Infrastructure Optimization Plan (SIOP) Program Office, or PMS-555, to provide programmatic control. But the new Program Office’s authority was watered down to work “in concert with Commander, Navy Installations Command (CNIC) and Naval Facilities Engineering Command (NAVFAC) to recapitalize and modernize the infrastructure at the four public nuclear shipyards.” The traditional Naval Sea Systems Command bureaucracy may not be the right place to manage the shipyard repair work, as mid-level leaders there have more experience in writing reports than in providing ship repair and shipyard management. At present, the Naval Sea Systems Command staff in the Program Office seem to be busy marginalizing the Navy’s experienced shipyard leaders. That shouldn’t happen. Shipyard recapitalization work needs to be left to shipyard leaders and then reported up to an accountable, “Where The Buck Stops” type of leader somewhere outside the mid-level hurdy-gurdy of the Naval Sea Systems Command Headquarters staff.
Continued delays are unsustainable. Only three years old, the Shipyard Infrastructure Optimization Plan is already years behind schedule—further emphasizing the Program Office’s relative lack of shipyard knowledge. According to a 2019 report by the United States Government Accountability Office, Naval Sea Systems Command expected to complete a grand-scale modeling and simulation effort at the four shipyards by September 2020. The four models, or “digital twins”, would, according to advocates, allow shipyard stakeholders to model and simulate workflows, catching inefficiencies in future shipyard layouts. Meant to be sustained for years, the Program Office relished the idea of a bureaucratic, semi-robotic gatekeeper to justify new shipyard investments or future work.
But the dreams of a brave digital future have yet to materialize. By the end of 2020, only the Hawaii “digital twin” had been completed, and, according to a March article in National Defense magazine, the other digital twins are only going to be “up and running” sometime this year—at least a year late, despite the team reportedly not losing a day to COVID-19. Admiral William Lescher, the Vice-Chief of Naval Operations, reconfirmed this milestone in testimony before the House Armed Services Readiness Subcommittee, saying the digital twins would be running by October, the beginning of Fiscal Year 2022.
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The whole modeling plan is sprawling into an unaccountable science project. While Steve Lagana, the Naval Sea Systems Command Shipyard Infrastructure Optimization Plan Program Manager, proudly claims “there has never been a digital twin modeling-and-simulation effort of this size and scale ever in the world,” the effort does not appear to have been a massive technological efficiency-making game-changer.
Before the Congress grants the Navy $21 billion to spend in the four shipyards, it may be time for both Congress and the Navy to take stock of just what the Naval Sea Systems Command has discovered so far. The return on the Navy’s investment in a massive test of digital twin technology may simply be too low to justify all the time and expense required to do it. There is little sign that the Navy’s vast modeling and simulation project will offer much more efficiencies in return than what a seasoned public shipyard veteran or a shipyard boss well-versed in lean manufacturing techniques could have identified in just a few minutes.
If Naval Sea Systems Command expects to maintain the digital twin over the longer-term, it might also be prudent for Congress to ask a few questions about digital twin sustainment costs over the longer term. Maintaining the intrusive, data-heavy system is an expensive and often never completed endeavor. Rather than sustain a massive shipyard-wide modeling and simulation system, it may be better for the shipyards to manage their own smaller-scale but well-funded modeling efforts, only using Naval Sea Systems Command as some sort of “reach-back” validation and technical service provider.
The failure of Naval Sea Systems Command to get the digital twins done on schedule has real consequences. Some shipyards halted much-needed improvements in anticipation of a new redevelopment plan that now may not arrive for years. Had the 2019 timeline had been kept, all four public shipyards would, right now, be putting the final touches on their long-term development plans. By the time Congressional money started to flow, the yards would have had a good starting point for initial investments and a prioritized, “lean-and-mean” project list. The hard work would be done. But once billions of dollars start sloshing around in the shipyards, the pressure to prioritize will vanish, leaving a thousand stupid ideas to bloom, tended only by an unaccountable and weak Naval Sea Systems Command management organization.
The scheduling issues only presage bigger problems with the overall cost estimates. The Navy’s $21 billion estimate is, essentially, a wild guess. The General Accounting Office details four characteristics of a reliable cost estimate, and, in this project, the Navy has yet to meet any of them. Again, the digital twins were to serve as the foundation for a more comprehensive project estimate, but, again, the digital twins don’t exist yet. Despite repeated assurances, environmental remediation, historical preservation and other expensive and time-consuming issues have been ignored. Inflation, which could effectively rip the guts out of this recapitalization project before it really gets started, was dismissed. The five year plan the Navy is enacting has run straight into the estimating challenge, with a project bidder overrunning the Navy’s original cost estimates for critical work on a Portsmouth Navy Yard dry dock.
The Navy has only itself to blame for this predicament. Every shipyard had an opportunity to maintain continuously updated, “shovel-ready” capital improvement plans, detailing several resource-limited paths towards a ready shipyard. Rather than put all the Navy’s shipyard planning efforts on hold until a poorly conceived and overambitious science project eats up all the funding, the Navy should have immediately convened a “Team B” from the yards themselves to develop a potentially less quantitative—but likely more cost-effective and immediately useful plan to improve each public shipyard. The five-year plan Congress has forced the Navy to develop is a good first step in moving the planning effort from a theoretical construct to a real set of projects that the shipyards desperately require.
It makes certain sense for Congress to encourage stronger shipyard-focused leadership, pressing taxpayer funds towards the shipyards and away from Naval Sea Systems Command Headquarters. To survive, good shipyard bosses know their facilities and products backwards and forwards. The same is true of the Naval Sea Systems Command. But while the technicians at Naval Sea Systems Command work at Washington DC’s former naval shipyard, the only real thing the Washington Navy Yard builds these days is bureaucracy—stuff that won’t help America’s four taxpayer-owned naval shipyards get better anytime soon.