The SSBN(X) is part of the Pentagon's nuclear modernization plan, which, as Tarini reminds us, has been called a '"modernization mountain"' according to "one former Pentagon official." It is most definitely a mountain of Everest proportion as well as risk, and it's definitely a long fall.
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Fact Sheet: The Ohio-Class
Replacement Ballistic Submarine Program
by Gabrielle Tarini, Center for Arms Control and Nonproliferation
June 16, 2014
Background
The Ohio-Class Replacement program, also known as the SSBN(X), is a program to design and build a new class of 12 ballistic missile submarines to replace the U.S. Navy’s current force of 14 Ohio-class ballistic missile submarines.
Ballistic missile submarines (SSBNs) form “the most survivable leg” of the U.S. nuclear triad, and are armed with Trident II D-5 submarine-launched ballistic missiles (SLBMs).
The first of the 14 Ohio-class SSBNs will reach the end of its 42-year service life in 2027. The remaining 13 boats will reach the end of their service lives at a rate of about one ship per year thereafter.
Only 12 rather than 14 SSBN(X)s will be needed to fulfill the Navy’s current strategic nuclear deterrent requirement of 10 operational (i.e. not undergoing maintenance activities) boats at sea at any given time because the SSBN(X) will be built with a life-of-the-ship nuclear reactor core. Thus, only 2 SSBN(X)s will be unavailable for service at any given moment.
The first Ohio-class replacement boat was scheduled to be procured in FY2019, but the Navy’s FY2013 budget deferred its procurement by two years to FY2021, largely due to fiscal constraints in the wake of the passage of the 2011 Budget Control Act. As a result of the deferment, the Navy will be left with only 10 total boats during the 2030s.
Financial Costs
The Navy’s FY2014 30-year shipbuilding plan estimated that the lead boat in the program will cost $12 billion. The cost of boats 2-12 was initially estimated by the Navy at $6 billion to $7 billion; however, the Department of Defense established that the target average cost per submarine should be $4.9 billion. The Navy has since undertaken cost cutting measures, but as of April 2014, it had only reduced the average unit cost to $5.36 billion. The Navy estimates the total 50-year lifecycle cost at $347 billion.
Some independent estimates of the cost to build the SSBN(X) are higher than the Navy’s estimate of approximately $77 billion (not including research and development). For example, an October 2013 report by the Congressional Budget Office (CBO) put the procurement cost at $87 billion and the total development cost (including research and development) at over $100 billion.
The Modernization Mountain
The SSBN(X) is part of a larger effort to rebuild the U.S. nuclear triad and its associated warheads over the next 25-30 years. The procurement of the SSBN(X) will overlap in the 2020s with the Pentagon’s plan to spend an estimated $81 billion on a new generation of long-range strike bombers, some or all of which will be nuclear capable, and additional tens of billions of dollars on a new nuclear cruise missile and a new ICBM or life extension of the existing Minuteman III ICBM.
This ambitious nuclear modernization plan will create what one former Pentagon official has called a “modernization mountain” in the budget in the mid part of the next decade.
Many current and former government and military officials believe that it will be unaffordable to rebuild all three legs of the nuclear triad at the same time.
Opportunity Costs
Even with the Navy’s current effort to reduce the estimated unit cost of the SSBN(X) toward the $4.9 billion DOD target figure, there is concern that the program could crowd out funding for other Navy shipbuilding programs in the 2020s and early 2030s.
According to Navy officials, if the Navy were to fund the Ohio-Class Replacement program from its current shipbuilding budget, it would consume a third to half of the money in the budget and force the Navy to forgo the acquisition of up to 32 naval vessels.
Vice Admiral William Burke, Deputy Chief of Naval Operations for Warfare Systems, stated that if the Navy bought the 12 planned SSBN(X)s with its own funds, the resulting battle force would be unable meet the current requirements to field a 306-ship fleet.
Possible Solutions
There have been several solutions proposed to lower the cost of the Ohio-Class Replacement program and its impact on funding available for other Navy shipbuilding programs:
1. Use a single block buy contract to consolidate the Ohio-class replacement boats and Virginia-class boats when their production synchronizes during the mid-2020s:
- A block buy contract could offer savings that would not be realized using separate contracts for the two submarine programs.
- If the Navy decides to propose such a contract it would develop a legislative proposal in 2017.
- This option would not reduce the program’s total cost, but rather could reduce the impact of the program on the amount of funding available for other ships in certain years.
- However, this option could result in a loss of learning at the ship yard in moving from the one SSBN(X) to the next and create additional costs.
- This option would preserve Navy shipbuilding funds for other Navy shipbuilding programs.
- There is precedent for such an arrangement—most spending for missile defense (which is viewed as national program spending) is not funded through the individual military services.
- Supporters of this option also argue that strategic nuclear deterrence is a national mission, and thus the burden of the cost of the program should not fall on the Navy.
- Critics of this option argue that a special fund discourages hard choices and is unrealistic because the Pentagon must still find extra money for the program. It could also prompt the Army and Air Force to lobby for special treatment for some of their big-ticket procurement programs as well.
- A 2011 report published by the Office of Management and Budget (OMB) suggested that the Navy reduce the number of SSBN(X)s in the fleet to 10, but increase the number of launch tubes on each submarine to 20; this could save the Navy $7 billion over the life of the fleet.
- A 2013 report by the Stimson Center also suggests cutting the planned buy of SSBN(X)s from 12 to 10, with 16 launch tubes on each submarine. This recommendation would save $1 billion in the near term and an additional $10 billion in the 2020s.
- A 2013 report by the CBO on options for reducing the federal budget deficit analyzed the option of reducing the SSBN(X) force to 8 boats. The savings under this option would total $15.7 billion from 2015-2023. During the 2030s, this option could save an additional $30 billion by avoiding the purchase of 4 more replacement submarines. An 8 boat force would still provide a robust deterrent, and the Navy could still deploy the maximum number of warheads at sea consistent with New START.
- The Navy initially planned to purchase 24 Ohio-class boats; however, in 1991 Congress directed the termination of the program with the 18th boat, citing anticipated force limits under START-1. Not long after, 4 boats were converted into a conventional only role, bringing the number of nuclear submarines down to 14.
Congress appropriated $1.1 billion in FY2014 for the Ohio-Class Replacement program.
The FY2015 budget request of $1.29 billion for the program is $190 million above the FY2014 appropriation.
The House and Senate Armed Services committees included provisions in their respective version of the FY 2015 National Defense Authorization Act that would create a special National Sea-Based Deterrence Fund to cover the cost of the Ohio-class submarine replacement outside of the Navy budget. Lawmakers hope that the bill would eliminate the competition for funding between the SSBN(X) and other shipbuilding projects—at least directly. As noted above, critics of the fund contend that the money for the SSBN(X) would simply be paid out of someone else’s (i.e. the Army or Air Force’s) budget, and argue that giving the Navy a pass on tough budget choices by the creation of a special fund would not solve the problem.
Gabrielle Tarini is a Summer 2014 intern at the Center for Arms Control and Nonproliferation
Link to original article: http://armscontrolcenter.org/publications/factsheets/fact_sheet_the_ohio-class_replacement_ballistic_submarine_program/
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