HASC Seeks To Leverage Power Of Multiyear Procurements

This week, the House Armed Services Committee (HASC) continued its efforts to reverse planned defense cuts. In a series of sweeping moves, the committee blocked the Army’s efforts to temporarily end production of the M-1 Abrams tank and Bradley fighting vehicle, mandated that the Navy maintain at least 12 ballistic missile submarines (SSBNs) in perpetuity and ordered the Air Force to fly the 18 Block 30 Global Hawks that the service had already bought but planned to mothball. The HASC also gave the Air Force additional funds so it could operate the Block 30 Global Hawks and continue to fly the venerable U-2.

The HASC also made a smart decision by allowing — but not requiring — the Navy to enter into multiyear procurement contracts for up to ten each of the DDG-51 destroyer and Virginia-class attack submarine (SSN). Multiyear contracts allow for the most effective use of available resources. Subsystems and components can be purchased in larger quantities, thereby reducing the average price. Contractors are able to better plan their workforce utilization. The workers are able to improve their skills as they construct multiple versions of the same platform, reducing errors and improving overall performance. The use of multiyear procurement contracts and block buys in which the design of the ship is frozen permitted the Virginia SSN program to reduce costs to the point that it became possible to fund construction of two submarines a year instead of just one. Where ship designs are stable and future demand predictable, multiyear contracts make a lot of sense.

The HASC should consider multiyear funding for other classes of ships. Once the Navy works out the kinks in the new Ford-class nuclear-powered aircraft carrier, the CVN 78, it would seem to make sense to buy at least the next two under a multiyear procurement. When the time comes to put serious money on the table for the program to replace the Ohio-class SSBN, it would be worthwhile to consider the benefits of a multiyear approach, particularly if the new boats utilize systems and subsystems developed for the Virginia SSN. Finally, the up and down character of plans for construction of large deck amphibious warfare ships could really be tamed by the use of multiyear funding and a block buy strategy.