Procurement: Why Shoddy Shipbuilders Survive


May 31, 2011:  The U.S. Navy continues to have serious problems with shoddy shipbuilders. The latest incident involved a support ship, the 12,000 ton, 172 meter (534 foot) long radar ship, the Howard O. Lorenzen. The ship recently failed its acceptance tests. The Lorenzen was built to carry a special, billion dollar, radar used to track ICBM tests. This tracking activity also supports verification of missile and nuclear weapons treaty compliance. The Lorenzen replaces a similar ship that is over 30 years old. The acceptance tests found serious problems with the steering, electrical system, damage control, anchor control, and aviation (helicopter) facilities. The yard that built the Lorenzen, VT Halter Marine, builds military and civilian ships, and has had problems with some of the other military ships it has built recently. Like the Lorenzen, the other ships were late, over budget and suffered quality control problems.

The navy has also had schedule, budget and quality problems with submarines and aircraft carriers. But the worst problems were with the new LPD 17 (San Antonio) class amphibious ships. Most of these have been late, over budget and rife with systems that didn't work, or work for very long.

While the admirals are correct in blaming the shipyards for many of the problems, the navy shares a lot of the blame as well. It is, after all, the navy that draws up the contracts, and supplies inspectors during construction. However, inspectors are regularly deceived and lied to (about the quality of work and supervision and known defects being fixed). While Congressional interference can be blamed as well, in the end, it's the navy that has the most to say, and do, about how the ships are built. The problem is, admirals who stand up and take on the contractors and politicians put their careers on the line. The ship builder deploys a large number of lobbyists and has many key politicians as allies.

The builder (Northrop Grumman) of the LPD 17s did try to fix things, but the Avondale shipyard (in Louisiana), where the LPD 17s are built, seemed cursed as well. Nothing Northrop Grumman did (in terms of changing management) seemed to work. So Northrop Grumman is shutting down Avondale (once the largest employer in the state) and shifting all LPD 17 work to their Pascagoula (Mississippi) yards by 2013. It's not certain that will fix the problems, which many admirals believe resides with the senior management of Northrop Grumman. The one LPD 17 in service that was not built at Avondale, USS Mesa Verde, has had a lot fewer problems.

The problems with nuclear subs and carriers were minor compared to the LPD 17 travails. Still, the sheer extent of the problems, across so many ships, is very disturbing. This may be why a growing number of admirals are willing to take career risks, and try for some fundamental reform, and finally fix the "system" that turns out more problems than warships. Victory is not assured. The shipyards and their suppliers have powerful allies in Congress. All that money translates into votes that gets incumbent politicians reelected. Congress is not inclined to attack this kind of patronage and pork, since nearly all members of Congress depend on it. The admirals can openly complain, but offended legislators can quietly cripple the careers of those critics. The smart money is betting against the good guys here. So far, the smart money is right. But the bad builder mess is so vast, expensive and messy that even many politicians are calling for some fundamental changes.




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