The Navy had to secure $397 million to help NASSCO complete the first wave of ships and is now seeking another $250 million, hoping to reduce big delays in the delivery of ships, the report says.
The cost overruns and delays are very similar to ones that CRS and other agencies have found over the years involving littoral combat ships, cruisers and a new class of frigate.
According to the new report, the problems at NASSCO affecting the oilers included the accidental flooding of a dry dock in 2018, labor shortages, difficulty getting parts, the impact of the coronavirus pandemic and failures with robotic steel cutting and welding equipment.
Costs also rose due to changes the Navy wanted to make in the ship’s cybersecurity system and the addition of unspecified equipment, the report says.
Included in the CRS report is the Navy’s admission in 2021 that the first ship of the new Lewis-class of vessels was delivered almost two years late, and that the delivery dates of ships 2 through 6 would be delayed 12 to 15 months.
But the new report goes beyond that period, saying the delivery dates of some ships NASSCO will build in the future could be delayed by between seven and 20 months, too.
The problem has led NASSCO to reset its delivery schedule table.
Navy Secretary Carlos del Toro addressed the situation with both praise and criticism in September during the launch of the Lewis-class oiler USNS Lucy Stone, saying he wanted to thank NASSCO “for delivering these ships and closing the scheduling gaps that have existed.
“When we first built the first one, we were probably two years behind schedule for multiple different reasons. And about two ships ago, we were about six months behind schedule. Today we’re just nine weeks behind schedule,” he said at the time. “That’s the kind of progress that NASSCO shipyard workers have to be proud of in closing that gap and delivering these timed ships.”
NASSCO has $12.2 billion in contracts to build 17 of the oilers. It has completed and delivered four and is already working on another four.
Most of the company’s 3,300 employees are working on the program, which could take another decade to complete.
“NASSCO is proud that the T-AO Fleet Oiler program is executing to schedule after regaining lost production days imparted during the pandemic,” it told The San Diego Union-Tribune in a statement this week. “The Navy’s own 2024 shipbuilding review reported the Fleet Oiler program is successfully tracking to Navy estimates.”
The CRS report acknowledges the job of fleet oilers “might not be considered as glamorous as that of other Navy ships,” but calls them “critical to the Navy’s ability to operate in forward-deployed areas around the world on a sustained basis.”
The oilers are particularly needed in the Indo-Pacific and Persian Gulf — areas regularly patrolled by warships based in San Diego, Hawaii, Washington state and sites in Japan.
Over the past decade, reports by CRS, the U.S. General Accountability Office and other agencies have cast Navy shipbuilding in a highly unfavorable light.
In 2022, for example, the GAO said last year that the first in a new class of Constellations would be delayed by at least three years, partly because the Navy started building the ship before it had finished the design plans.
The problems have alarmed Congress, which notes that the Navy fleet also has generally been shrinking while China’s navy rapidly expands. Last month, President Donald Trump said he had created an office in the White House meant to revitalize commercial and Navy shipbuilding.