Draft legislation released today marks a major development toward maintaining the current two-boat-per-year production level of the peerless Virginia Class Submarines, which are critical to a national security strategy increasingly focused on the Asia-Pacific region. Announcement of the bill follows a comprehensive effort by Congressman Jim Langevin (D-RI) and key colleagues who serve with him on the House Armed Services Subcommittee on Seapower and Projection Forces. The Subcommittee included provisions in its portion of the Fiscal Year 2013 National Defense Authorization Act (NDAA) to prevent a Pentagon proposal to cut funding for the subs. The military's recently released Future Years Defense Plan (FYDP) called for purchasing only one of the submarines in Fiscal Year (FY) 2014, which could jeopardize the cost efficiencies gained at great effort over the past decade.
In his work on the NDAA, the annual bill covering defense spending and programs, Langevin has played a lead role in the recent increase of the procurement of Virginia Class Submarines from one to two per year, and in supporting the outstanding work done by Electric Boat to build the ships at the company's Quonset, Rhode Island, and Groton, Connecticut, facilities.
"This bill establishes a responsible way to preserve the best policy for our country in the short and long term and I want to particularly thank Congressman Joe Courtney for his tireless effort working with me to resolve this issue," said Langevin, who co-chairs the Congressional Submarine Caucus. "The two-boats-per-year model has produced huge efficiencies and cost savings for Electric Boat, which is not only good for jobs in Rhode Island, but also directly benefits our military and the taxpayer. Slowing down production would put these benefits at risk and is estimated to actually increase the cost of production for taxpayers by $600 million.
"We need to maintain this rate to support our national interests around the world, particularly in the Asia-Pacific where we face complex security challenges, including China's commitment to building up its naval capabilities. Additionally, delaying one boat from FY14 would add cost to later Virginia-class submarines. With today's announcement and the strong support we have received from senior military officials, I am cautiously optimistic that we can prevent any cuts."
The Subcommittee's legislation would permit production to continue with two submarines in 2014 despite current budget restrictions by including provisions that spread the costs over the multi-year process of building the boat. First, the Navy would receive more than $700 million in advance procurement funding in the Fiscal Year 2013 budget. Second, the bill allows for construction to be paid for using incremental funding, which gives the Navy the ability to pay in future years for parts not needed until after 2014. The bill adds the FY14 boat as a 10th ship in the block purchase, creating further efficiencies and creating more certainty for the submarine industrial base.
As one step to set the table for this legislation, Langevin worked with fellow Submarine Caucus Co-Chairs Congressmen Joe Courtney (D-CT), Randy Forbes (R-VA) and Rob Wittman (R-VA) to submit a request to the top Republican and Democrat on the House Appropriations Committee's Subcommittee on Defense on March 22, 2012, asking them to consider "alternative strategies that would sustain submarine construction at two a year in 2014 and through [the military's five year plan]."
Langevin also addressed the possibility of incremental funding with the Assistant Secretary of the Navy for Research, Development, and Acquisition, Sean Stackley, who first testified about using incremental funding in a March 29, 2012, hearing before the Seapower and Projection Forces Subcommittee. He would later echo this idea before members of the Senate Armed Services Committee.
Langevin questioned Stackley about alternative funding options the Navy has considered for procuring the FY14 boat. Stackley said the "full funding" method utilized by the Navy required too much up-front cost to purchase the second boat; however, he said it cost the Navy significant long-term savings from the efficiencies gained by maintaining production at two boats per year:
"So not only did we move the boat out and we moved the funding for that boat out, but we also lost the savings or the efficiencies that we would have been able to hold on to... In a full-funding policy where you put all the money upfront in the year of procurement, a lot of that money sits idle waiting for the expenditures in the course of building a submarine over five to six years... [With incremental funding] there's assets in the budget that we submitted for nine boats to fund that second boat in '14 on a cash flow basis, and then there are savings downstream that you get by adding that tenth boat that offsets the upfront cost that we would have incurred," replied Stackley in response to Langevin's question.
Additional Steps Taken to Protect VA Class Submarine Procurement Level:
In previous Armed Services Committee hearings, Langevin received backing for the boat from other top military brass, helping him and his colleagues make the case for its vital role in protecting our national security interests. As the Pentagon places greater strategic emphasis on the Asia/Pacific Region, the leader of the Navy's Pacific fleet, Admiral Robert Willard said, "The Virginia class submarine is our newest, most formidable and provides increased capacities in some cases that we very much need I would offer that the Virginia Class Subs are the best submarine the world has probably ever seen."
Also in response to Langevin's opposition to the cut, Secretary of Defense Leon Panetta told the Committee, " if there are cost efficiencies that can be achieved here that allow us to [purchase the FY14 submarine] with savings and in a more cost effective way, we're prepared to look at that."