Morning Briefing - April 09, 2019
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April 09, 2019

BWXT Blunder With Columbia Missile Tube Welds Chewed Two-Thirds of Program’s Margin

By ExchangeMonitor

BWX Technologies’ mistake last year welding ballistic-missile tubes for the first Columbia-class submarine consumed 15 of the 23 months of schedule cushion built into the Common Missile Compartment program, the Government Accountability Office (GAO) reported Monday.

The report marked the first time the Navy and Columbia prime General Dynamics Electric Boat publicly quantified the amount of margin consumed by BWX Technologies’ July 2018 slip-up, which Defense News first reported in August 2018.

The Navy and GD “are still determining the cost and schedule impacts of the weld defects,” the GAO said in the report, “Columbia Class Submarine Overly Optimistic Cost Estimate Will Likely Lead to Budget Increases.”

BWX Technologies said its Nuclear Operations Group took a $40 million revenue charge in the third quarter of 2018 after disclosing it had botched welding jobs on 12 of the tubes in July. The missile tubes are four stories tall and some of the problematic welds are more than 4 feet long, the company has said. Neither the Navy, the prime, nor BWX Technologies has described exactly what was wrong with the welds. The manufacturer has called them “complex and challenging.” 

“Navy program officials stated defects occurred because inexperienced welders performed the complex work and inspectors at the supplier’s facility subsequently failed to identify the defects,” according to the GAO report.

BWX Technologies is building missile tubes for General Dynamics Electric Boat under three subcontracts awarded in 2014, 2016, and 2017. The company discovered suspect welds on tubes produced under all three contracts. The Block II Common Missile Compartment tube assembly subcontract alone was worth $75 million and calls for the company to produce 26 tubes by 2021.

In 2017, BWX Technologies, of Lynchburg, Va., thought it would capture about 60 percent of the total available tube business. In March, BWXT Chief Financial Officer David Black said the company was weighing whether to bid at all on a new missile tube contract it expected to be issued this spring.

The missile tube work “has not been especially kind to us,” Black said in February during the company’s conference call on its 2018 earnings.

A spokesperson for General Dynamics Electric Boat did not immediately reply to a request for comment about the timing of the next tube contract.

A spokesperson for General Dynamics Electric Boat did not immediately reply to a request for comment about the timing of the next tube contract.

A BWX Technologies spokesperson said the company “provided a proposal to Electric Boat’s RFP for Continuous Production Missile Tubes in 2018.”