Navy struggling to contain costs for Columbia-class sub program, says GAO

WASHINGTON — A new independent audit of the Columbia-class submarine program shows the Navy is struggling to contain the price of the shipbuilding program with cost overruns reaching “six times higher than” the prime contractor’s estimates and “five times more than the Navy’s.”

“As a result, the government could be responsible for hundreds of millions in additional construction costs for the lead submarine,” according to a Government Accountability Report published today.

The Columbia-class submarine program, the Navy’s No. 1 acquisition priority and one leg of the Pentagon’s nuclear triad, has long been a target of GAO, which has reported on the program’s deficiencies and potential future obstacles for the past seven years. The watchdog’s latest report stems from a provision in the 2018 defense policy bill mandating GAO assess the extent the program is on track to meet its cost and schedule targets as well as the efficacy of the Navy and its shipbuilders’ actions to do as much.

The result of GAO’s analysis is that from January 2022 through May 2023, the “cost and schedule performance for lead submarine construction has consistently fallen short of targets.”

“Through early 2024, those trends had not improved, and future risks will likely add to current cost and schedule growth,” the report said. “The program has reported that the shipbuilder needs to take swift and significant actions to address the causes of poor construction performance. However, as GAO has previously reported, the program has tried to mitigate some of these causes — such as late materials and detailed design products — for years.”

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In its report, GAO acknowledges the billions in funding the Navy has distributed to its suppliers since 2018 to strengthen the industrial base, but auditors said the service has failed to ensure the investments “support construction goals or that outsourced work meets quality expectations.”

Increased investment in the submarine industrial base has been a focus for the Navy’s annual budget requests since the inception of the AUKUS security pact in 2021. The service just recently awarded a $950 million contract to Texas-based, non-profit BlueForge Alliance to continue doing as much.

As of December 2023, GAO said the Columbia-class program reported distributing funds to 193 suppliers. The amount of funding Congress provides to the Navy for industrial base development can be tracked through the annual appropriations process. But, where that funding goes and how it’s used is not publicly available. Lawmakers, such as Rep. Joe Courtney, D-Conn., have said even Congress only sees a “basic pie chart” outlining broad categories of how the funds are being used.

As a routine part of producing its reports about the Pentagon, GAO seeks and incorporates feedback from the Defense Department on its criticisms and recommendations.

In this report, the watchdog recommended the Navy direct its prime contractor General Dynamics Electric Boat to revise its cost estimates as well as work to identify what information is needed to determine whether its SIB investments are effectively supporting the Columbia-class program, among other things.

Responding for the Defense Department, Gary Ashworth, a senior civilian overseeing Pentagon acquisitions, concurred with all of GAO’s recommendations.