Saturday, May 23, 2015

AZ Senator John McCain Takes On The Pentagon contracting rules

STATEMENT BY SASC CHAIRMAN JOHN McCAIN ON NEW COST OVERRUNS FOR FORD-CLASS AIRCRAFT CARRIER PROGRAM
USS Gerald R. Ford Aircraft Carrier
Press Release
Washington, D.C. ­– U.S. Senator John McCain (R-AZ) today released the following statement on Bloomberg News’ report showing that the Pentagon’s Cost Assessment and Program Evaluation office has identified $370 million in new cost growth for the USS John F. Kennedy (CVN-79), the second ship in the Ford-class aircraft carrier program that has experienced significant cost overruns:
“Earlier today, Bloomberg News reported the Pentagon’s Cost Assessment and Program Evaluation office has identified $370 million in new cost growth for the USS John F. Kennedy (CVN-79), the second ship in the Ford-class aircraft carrier program. Earlier this year, the Navy estimated it could build CVN-79 for $11.348 billion. If this new cost estimate is true, CVN-79 is now $520 million over the Navy’s estimate.
“Accountability must be restored to the Ford-class aircraft carrier program. Our nation simply cannot afford these kinds of cost overruns amid rising global threats and fiscal challenges. If this new cost estimate is accurate, I expect the Pentagon to promptly notify the Senate Armed Services Committee who is responsible for this cost overrun and what will be done to hold those individuals accountable.
“I remain concerned that the USS Gerald R. Ford (CVN-78) design is still not stable given its dependence on completing design and development of major systems like the Advanced Arresting Gear. Effectively, the Navy is concurrently refining CVN-78 design and constructing the ship while getting ready to award the contract for CVN-79. These issues with CVN-78 raise questions about whether now is the time to award this contract for CVN-79. This latest news report does not give me confidence that the Department of Defense understands the risk and cost of CVN-79, which they will be passing along to American taxpayers.”
Note: The Senate Armed Services Committee is proposing a series of measures in the National Defense Authorization Act for Fiscal Year 2016 that provide rigorous oversight of the aircraft carrier program, which this latest alarming report demonstrates are so critical, including:
  • Limiting $100.0 million in procurement funds for CVN-79 until the Secretary of the Navy certifies that the Navy will conduct full ship shock trials on CVN-78 no later than September 30, 2017 and submits two reports: one on cost control options for CVN-79 and USS Enterprise (CVN-80), and another on potential requirements, capabilities, and alternatives for future development of aircraft carriers that would replace or supplement the Ford-class carrier.
  • Limiting $191.4 million in advance procurement funds for CVN-80 until the Secretary of the Navy certifies the CVN-80 design will repeat the CVN-79 design and provides a detailed justification of the CVN-80 plans costs.
  • Directing the Secretary of the Navy and Chief of Naval Operations to personally sign off on new design and engineering changes to Ford-class aircraft carriers that exceed $5.0 million.
  • Reducing the Congressionally-mandated procurement cost cap for CVN-79 and subsequent aircraft carriers by $100.0 million to $11.398 billion, plus adjustments for inflation and other factors.
  • Directing a Comptroller General review of Ford-class cost estimates and cost estimating practices, effectiveness of current cost accounting and cost surveillance, and cost reporting.

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