A recent Congressional Research Service (CRS) report update lays out how the COVID-19 pandemic could impact the Navy’s shipbuilding programs and noted what action Congress has taken in the past to mitigate other events.
The report, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, was last updated March 27. It notes COVID-19 will not uniquely affect Navy shipbuilding, but it could impact shipyards that build, overhaul, repair, and maintain ships as well as their associated supplier firms and employees.
The Congressional Research Service noted shipyards and supplier firms could be affected if employees remain at home because they are ill from COVID-19, to maintain social distancing, taking care of children due to school closures, or taking care of family ill from the virus.
“Impacts on operations at shipbuilding supplier firms could affect operations at the shipyards, even if staffing at the shipyards themselves is not substantially affected, due to reduced or delayed deliveries to the shipyards of supplier-provided components and materials,” the report says.
Moreover, delays to ship construction and fabrication of their components, CRS said, “could put shipyards and supplier firms at risk of not being able to meet their contractual obligations, which in turn could affect their financial situations.”
The report pays special attention to what the Navy’s calls its highest priority program, the Columbia-class ballistic missile submarine (SSBN).
The Navy plans to acquire 12 nuclear-armed Columbia-class submarines to replace the current fleet of Ohio-class ballistic missile submarines.
The Columbia-class has a special susceptibility due its priority, according to CRS, and “the program’s tight schedule for designing and building the lead boat in time for the boat to be ready to conduct its scheduled first strategic nuclear deterrent patrol in 2031, and the potential consequences for the nation’s strategic nuclear deterrent posture if the lead boat is not ready in time to conduct that patrol.”
In 2019, the manager for the Columbia-class program said the Navy has little margin for the new submarine since the service already extended the service life of existing Ohio-class SSBNs to 42 years. Last week, Assistant Secretary for Research, Development and Acquisition James Geurts told reporters the Navy is watching Columbia work closely due to its importance.
“And that may be an area where, if there’s resource contention or whatnot that we’re going to have to ensure that we prioritize that work. Have not seen any major impacts to that work yet, but we are tracking it very closely,” Geurts said.
The Congressional Research Service listed three examples of the government taking extraordinary measures for shipyards after unforeseen crises affected the country.
In 2005, after Hurricane Katrina hit the U.S, Congress provided $1.7 billion in reallocated emergency supplemental appropriations to pay estimated higher shipbuilding costs for 11 ships under construction at Huntington Ingalls Industries’ [HII] Ingalls Shipbuilding yard in Pascagoula, Miss., and the Avondale shipyard.
Then, the 2009 American Recovery and Reinvestment Act responding to the 2008-2009 financial crisis and recession appropriated $100 million for Maritime Administration to be used for making supplemental grants to small shipyards as authorized under the fiscal year 2009 defense authorization law.
CRS’s last example noted after Hurricane Michael caused damage in 2018 the Department of Homeland Security (DHS) granted extraordinary contractual relief to Eastern Shipbuilding Group, the builder of the Coast Guard’s new Offshore Patrol Cutters.
Homeland Security was acting on legislation authorizing certain agencies to “provide certain types of extraordinary relief to contractors who are encountering difficulties in the performance of federal contracts or subcontracts relating to national defense,” the CRS report says.
Geurts also told reporters the Navy is trying to help mitigate financial issues with the shipbuilders by accelerating contract awards. Last week, acting Secretary of the Navy Thomas Modly said no shipyard delays had yet been identified from COVID-19, but the service expects issues to crop up.
“To date we haven’t seen any sort of perturbations in that right now, but we are anticipating that there will be, and we’re looking at what that might cost with respect to helping the shipyards maintain their viability if they have to slow down and miss certain production milestones,” Modly said during a March 24 press conference.
This story first appeared in Nuclear Security & Deterrence Monitor affiliate publication, Defense Daily.
