A qualitative study of affordability: Virginia and San Antonio class programs

Abstract

During the mid-1990s, the U.S. Navy initiated a wide-ranging series of Department of Defense (DOD) acquisition reforms. Amid this environment of DOD acquisition reform, the U.S. Navy started the Virginia-class submarine program and San Antonio-class amphibious transport dock ship program. Both of these programs sought to reduce ownership costs of these new vessels. This study compares the Virginia-class submarine and San Antonio-class ship across platforms and across time in order to find those factors that appear to affect cost. This study isolates those key metrics and relationships that demonstrate an apparently significant impact on affordability. The purpose of this study is to find the programmatic decisions, environmental circumstances or managerial tools that benefit or jeopardize affordability in a consistent manner, and recommend further study in those areas most likely to promote the development of better practices for affordability throughout a program’s life cycle. The results of this study indicated that the interpretation of affordability changes across the life cycle phases of an acquisition program; however, the factors that affected cost between the Virginia-class submarine and the San Antonio-class ship were comparable across time. The overall findings of affordability across time and between these two acquisition programs were mixed. During the pre-acquisition stage, key elements, which accept a high degree of cost-growth risk, do not appear to be sufficiently responsive to cost-growth mitigation initiatives. The findings suggest that, in the acquisition stage, it is possible to reverse cost-growth by setting a non-negotiable cost target and establishing all other factors as flexible. For the sustainment stage, analysis of the cost effectiveness of an acquisition system’s design is limited by the degree of consistency between operational events and program assumptions and the percentage of life-cycle completion that are supported by actual cost. The sustainment costs to date reflect a successful reduction of total ownership costs for the Virginia-class submarine, and inconclusive findings of cost effectiveness for the San Antonio-class ship.