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Akin Opening Statement for Hearing on Cost Reduction Efforts for Naval Vessel Construction
Washington, D.C. – U.S. Rep. Todd Akin (R-MO), Ranking Member of the House Armed Services Subcommittee on Seapower and Expeditionary Forces, today released the following prepared remarks for the subcommittee’s hearing on the cost reduction efforts for naval vessel construction:
“Thank you, Mr. Chairman. Good afternoon, ladies and gentleman. It’s a pleasure to be here with you today to learn more about the Navy and industry’s efforts to control costs for naval vessel construction.
“In many respects, the keys to cost reduction are well understood, such as commonality of design at the component and system level, stability in the shipbuilding program, sufficient volume to optimize workloads, and shipyard facility modernization. I gather that these are the lessons the most competitive and efficient yards in the world, especially those in Europe and Asia, have long since embraced. Yet, despite our understanding of what it takes to control costs in naval shipbuilding, it is less clear what role Congress can play to facilitate the implementation of best practices in the U.S. What also remains unclear is the level of commitment within both the Navy and industry, to adhere to these principles.
“For example, how much effort has been made to date to increase commonality at the component and system levels? Similarly, has the Navy made a real commitment to stability within the shipbuilding program? Given the significant changes in the annual shipbuilding plans, it would appear not. Although we did not receive the required shipbuilding plan this year, the changes we do know about, such as the change to the aircraft carrier build cycle, do not provide reassurance to this committee that the fiscal year 2010 budget provides greater stability. Additionally, what are the shipyards doing about improving workforce skills and productivity? How much rework are we currently experiencing and what are the shipyards doing to recruit more people into these highly skilled trades?
“In spite of these questions and observations, I also acknowledge that the practices adopted by commercial yards cannot be fully transferred to naval ship construction yards. First and foremost, these yards benefit from economies of scale derived from large orders. We will never see this volume in military orders -- particularly with shrinking defense budgets. In addition, commercial yards create value by producing standardized offerings at low cost. But the Navy is not likely to need commoditized ships. Instead, our yards must strive to create value for the Navy and their stockholders through a balance of strategies, such as industrial efficiency, network services, and knowledge application. I would be interested to learn if there are opportunities to make our naval shipyards world experts in design services and customized ship construction. We might find that other nations and other customers would be interested in coming to U.S.’ yards for their most challenging, high performance ship needs – as they do for aircraft and other defense systems.
“I am hopeful that we’ll learn more about these various possibilities in today’s hearing. I’d like to conclude by thanking our witnesses, from both the Navy and industry, for their service to our nation and for being here with us today. I truly look forward to your testimony.”