From the U.S. Government Accountability Office, www.gao.gov Transcript for: Columbia Class Submarines Description: The Navy is scheduled to begin construction on the first Columbia class submarine in 2020. We take a look at how the Navy’s handling cost estimates for the program in these early days. Related GAO Work: GAO-19-497: Columbia Class Submarine: Overly Optimistic Cost Estimate Will Likely Lead to Budget Increases Released: April 2019 [ Background Music ] [ Shelby Oakley: ] Congress and the Navy are going to pay what it takes to get the Columbia-class program built, those 12 submarines built. [ Matt Oldham: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. I'm Matt Oldham. The Navy's top acquisition priority is the Columbia-class submarines. After planned construction begins in 2020 and at a cost of more than $100 billion, they're slated to replace the Ohio-class submarines by 2031. I'm with Shelby Oakley, a Contracting and National Security Acquisitions director at GAO. And she led a report looking into the status of the Columbia-class Program in these early days. Shelby, is it too early to ask how it's looking for the Columbia-class? Are they poised to be read on time and on budget? [ Shelby Oakley: ] It's actually a great time to ask about the status of the program because Congress is going to be asked, requested in 2020, to approve funds for construction of the lead submarine of Columbia-class. So it's at this point in time where they still have the opportunity, both Congress and the Navy to make some changes—make some decisions about the program to ensure that it gets off on the right foot. What I would say is, is that with a program this size and complexity it would be unrealistic to assume that there's not going to be challenges along the way and that they're going to hit a few bumps. And in fact the Navy hit a significant bump this year on the program when it discovered manufacturing defects with some of its missile tubes. This issue, while it was discovered early and allowed the Navy to address it, is indicative of the kinds of challenges that are going to continue to surface on this program as it goes forward just giving it’s size and complexity. [ Matt Oldham: ] So how do you accurately project costs for a program this large? [ Shelby Oakley: ] At a pretty basic level, you look at prior programs. You take a look at how much it cost to build, for example, the Ohio-class submarines, or the Virginia-class submarines, and then make adjustments for differences. So let me give you a quick illustrative example. Labor hours are a key input into the cost estimate for ship building programs. The Virginia-class is much smaller. The current Virginia-class that they're building is much smaller than the Columbia-class. So it would be safe to assume that it's going to require more labor hours to build the Columbia-class submarine than it did the Virginia class. Also, conversely, there have been a lot of construction efficiencies since the Ohio-class were built many, many years ago. And it would be pretty safe to assume that the Columbia-class might require less labor hours than the Ohio-class. So at a very basic level the aim of cost estimates is to really quantify, account, and address for risks on the program. And that's really where we identified concerns with the Navy's estimate for the Columbia-class program. [ Matt Oldham: ] So then I guess the next question is, why is the Navy building a new class of submarine? [ Shelby Oakley: ] The Navy is building the Columbia-class submarines to replace the existing class of ballistic missile submarines, the Ohio-class. The Ohio-class are aging and when they are retired, when the Columbia-class comes online, they will be in operation over 40 years. That's longer than any submarine class in history. The construction of ballistic missile submarine is really a key element of the nation's nuclear deterrent. The submarines are considered the most survivable leg of the nuclear triad. So as you mentioned in your intro, this is the Navy's number one acquisition priority. [ Background Music ] [ Matt Oldham: ] So it sounds like as the Navy prepares budgets for building the Columbia-class, they may be underestimating some areas like labor costs while over estimating cost savings in other areas. So Shelby, what recommendations did your team have? [ Shelby Oakley: ] Congress has really already authorized billions of dollars for the program. But the aim of our recommendations is to provide Congress with updated and more accurate information about the cost of the program prior to being asked to authorize funds for construction of the lead submarine. [ Matt Oldham: ] So finally, what do you believe is the bottom line of this report? [ Shelby Oakley: ] As it's the Navy's number one acquisition priority, Congress and the Navy are going to pay what it takes to get the Columbia-class program built, those 12 submarines built. And even a small amount of cost growth on the Columbia-class program, with its price tag of $128 billion could have pretty significant effects on other Navy acquisition priorities such as its efforts to build a new class of frigates, and a new class of large-surface combatants. Based on our work, the likelihood of this scenario is pretty high. [ Matt Oldham: ] Shelby Oakley is a Contracting and National Security Acquisitions director at GAO and we were talking about her report on how the Navy is estimating costs for building the new Columbia-class submarine. Thank you for your time, Shelby. [ Shelby Oakley: ] Thank you. [ Background Music ] [ Matt Oldham: ] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts. 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