Submarine Program Besieged By Overruns
The Navy says it needs an additional $301 million over the next three years for the Virginia-class program.

The budget President Bush submitted to Congress this week estimates the Navy will need $301 million over the next three years to cover projected cost increases and overruns in the Virginia class submarine program.

The Navy says it needs $109 million in the current budget cycle - fiscal year 2008 - to cover cost growth, Navy documents show. The Navy projects it will need $83.4 million in fiscal 2009, and another $108.5 million in the year after that.

Some of the funding for the three-year stretch - or about $66 million - was anticipated a year ago when the Navy submitted a previous multi-year funding plan under a line item called "completion of prior year shipbuilding programs." But the rest of this week's request - or about $235 million - is to cover new cost increases in the sub building program, a joint building partnership between Northrop Grumman Newport News and General Dynamics Electric Boat of Groton, Conn.

The new figures show actual costs in the class of nuclear-powered submersibles are still not coming in at their initial cost targets - though they're closer than previous ships of the group.

The yards have been under heavy pressure to contain costs and are trying to do so to help convince the Navy to double submarine purchases to two a year.

"Funds are required to complete the Virginia-class submarine design, construction cost growth, higher than expected costs for special hull treatment, and higher than expected costs for electronic, propulsor and special operating forces components," a note in the Navy budget request said.

That's the same wording submitted in last year's request, so it was unclear Tuesday exactly what spurred the projections to move up yet again this year. The Navy did not give a specific reason as of press time Tuesday evening.

In the submarine building partnership, each shipyard specializes in building parts of the boats and takes turns on final assembly and delivery. Major parts are shuttled between the yards by ocean barge.

The estimated price tag on the New Hampshire - now being assembled at Electric Boat and to be delivered in 2009 - has grown to $2.24 billion. That's up $72 million, or 3.3 percent, over last year's estimate, on top of another $22 million spent to cover previous increases.

The cost of the following ship, the New Mexico, to be assembled at Newport News and delivered in 2010, was estimated this week at $2.26 billion. That's up $111 million, or 5.2 percent, over last year's projection.

And the price of the still-unnamed SSN-780, to be assembled at Electric Boat and delivered in 2011, grew by $52 million, or 2.3 percent over last year's estimate.

The rest of the $66 million of the $301 million for cost growth in the Virginia-class submarine program is expected to go to the North Carolina, a ship now being assembled at Newport News and to be christened this year.

Still, those price hikes were anticipated a year ago. The sub's estimated price tag held firm this time around, at $2.33 billion.

The Virginia-class program has struggled with costs, with the first four ships in the class having finished or are expected to finish well above initial cost projections. For example, the USS Texas, the second ship in the class, came in a year late and 24 percent over its initial budget target.