Navy’s shipyard revamp strategy evolves amid obstacles, years into $20B effort

WASHINGTON — When then-Navy Secretary Richard Spencer initially proposed a massive revamp of the service’s public shipyards in 2018, he characterized it as vital to providing the global combatant commanders with ready forces — particularly, submarines.

“The fact of the matter is, until we get our shipyards — specifically for our underwater fleet, our public shipyards, primarily — increased flow and increased efficiencies for throughput, we are hurting ourselves,” Spencer told Congress in a December 2018 hearing, later adding, “The science of industrial flow has progressed tremendously since we have last touched these shipyards. We are going to modernize them.”

Lawmakers were frequently hammering Navy officials publicly about systemic issues leading to massive maintenance backlogs for the submarine fleet. Spencer’s original proposal, dubbed the Shipyard Infrastructure Optimization Plan (SIOP), entailed investing $20 billion over more than two decades to upgrade and redesign the four public shipyards across the country.

Now, a third of the way into the SIOP’s 21-year revamp, the two senior Navy officials tasked with managing the effort are acknowledging that Spencer’s initial price and timeline estimates are no longer viable, and that the Navy is working on developing new cost estimates and timelines for the realities of the task ahead.

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But, the two insist that the Navy will be better off after the program’s completion, regardless of delays. In fact, they argue, the service is already reaping the benefits of SIOP and, one day, they hope to return submarines and carriers back to the fleet up to three months faster than the shipyards do today.

“That boat can be in the second island chain 90 more days than it could now,” Mark Edelson, SIOP’s program executive officer, told Breaking Defense in an exclusive interview at Navy Yard in Washington, DC, referring to a strategically significant location in the Indo-Pacific.

Spencer’s original SIOP hinged on three prongs: recapitalize the aging dry docks at each shipyard, reconfigure the layout of the yards to better facilitate the workflow for maintaining nuclear ships, and upgrade the tools and machinery being used on a day-to-day basis. That scheme, the officials said, has largely remained the same.

“The intent is still the same. We are still focused on delivering shipyards that can meet these class maintenance plans and do it in an efficient and optimized manner,” Capt. Luke Greene, the program manager, said during the same interview. “Our understanding of how we deliver that has evolved.”

By The Numbers

On average, the Navy has been seeking $2.7 billion per year through the president’s budget request to invest in SIOP, including this year. The funding currently supports work being done by 10 prime contractors and 2,000 onsite workers spread across the four shipyards, according to a Navy spokesman.

However, that figure may have to climb in the future, given the acknowledgement from Greene and Edelson that Spencer’s “$20 billion over 21 years” estimate is no longer reliable.

The two did not provide a new timeline or cost estimate during an interview, only noting that their office is working to define a new overall set of figures. However, they did give an explanation of what has changed.

“One of our biggest cost driver is escalation,” Greene said. “Escalation” is similar to consumer inflation, but Greene and Edelson said that in the construction industry, escalation usually occurs closer to 6 percent annually, relative to the 2 percent inflation the country experiences.

That escalation in price was also driven by the coronavirus pandemic, which Greene said “radically changed” the program office’s estimates for future pricing. Breaking Defense has previously reported that COVID-19 had a significant impact on both shipbuilding and ship maintenance industries, from closures of critical suppliers to delays in materials needed for time-sensitive construction schedules.

“It’s been an absolute learning point and adjustment to the way we do business, and for a program like this that’s looking out over an extended period of time, it’s critical for us, as we understand, the full scale of the program to account for those economic factors,” he said

To date, SIOP has delivered 45 facilities projects worth more than $1.2 billion dollars, with $6 billion invested in 47 more initiatives underway. Tying them all together is that they each take place at one of the four public shipyards in Virginia, Hawaii, Maine or Washington, and they all relate to the maintenance of nuclear-powered aircraft carriers or submarines. (The Navy has a handful of facilities that support nuclear-powered vessels, such as Naval Submarine Base Kings Bay in Georgia, but those locations are outside the scope of the SIOP.)

And the long-term benefits mean the program is absolutely worth continuing, Greene argued.

He projects that when SIOP is completed, the overall flow of aircraft carrier maintenance will improve by 10 percent and submarines by 15 percent. Put into layman’s terms, the average submarine maintenance availability is slated to last between 25 and 36 months, according to a Navy spokesman. A 15 percent reduction would translate to maintenance availabilities being completed roughly three months faster, said Greene.

Different Shipyards, Same Problems

While looking back at the Navy’s historical documents, Edelson said he had seen some records that resembled an effort like SIOP, but for the most part, the shipyards have “developed organically” over time.

“The story you’ll hear is we’re replacing the 1917 or the 1942 fill-in-the-blank building or dry dock,” he said, noting the dates’ alignment with the United States participation in World Wars I and II. It’s a pattern Edelson and Greene have found as they go from project to project: The last time any given piece of infrastructure was upgraded or changed coincided with a historically significant moment for the Navy.

For example, the first nuclear-powered submarine, USS Nautilus (SSN-571), “was launched in [1961]. … That was the last time that there was any concerted effort to do something to the shipyards,” said Edelson.

All the dry docks at the four shipyards are close to or now exceed 100 years old, with the newest being Hawaii’s Pearl Harbor where the age of the dry docks averages out to 89 years and the oldest in Norfolk, Virg., at an average age of 123 years, according to the service. (While the dry docks are decades old, each shipyard has incrementally repaired and improved their facilities on a case-by-case basis.)

As the program has advanced, both men said their understanding of the facilities and the issues they’re working with has changed. For example, how the dry docks are, or are not, equipped to cope with earthquakes, as the Navy learned from a worrying study in 2023.

“If you go back [to] the 2018 report to Congress, and we talk about seismic [activity] there. We didn’t understand the magnitude of that challenge,” Greene said. “As we get in and learn more about the seismic requirements … our understanding of the need for that has evolved.”

Edelson said another realization was how parts flow through the shipyard. He said initial plans envisioned a single, large maintenance facility next to a waterfront to reduce travel time for workers between any given machine and the carrier or sub in question. But what program officials have found over time is that specific parts will be removed from a ship and not be returned to the vessel for months.

“That doesn’t need to take up valuable waterfront real estate … Let’s put those shops in the back,” he said. “The intent is the same — optimize workflow — because the main thing is to get the boats out faster. That doesn’t require everything to be right at the front.”

Other changes, Edelson said, are more basic and vital than improving workflow efficiency.

“The last dry dock was built for the Forrestal class of aircraft carriers,” he said, referring to a conventional-powered carrier the Navy built in the 1950s. “The Ford [class] … doesn’t fit in the parking spot anymore. Is that an efficiency gain? Or that’s just, you can [now] do maintenance on it.”

Looking forward, both Greene and Edelson expressed optimism about the program’s ability to produce benefits for the Navy long before all of the upgrades and design work is complete.

Greene said he has had one area development plan — the individual roadmaps guiding various facilities upgrades — approved by Navy leadership, with three more scheduled to be considered in the near-term. He also said he has established offices at all the shipyards and that Naval Facilities Engineering Systems Command, the service’s agency with jurisdiction over SIOP, will install additional personnel to help manage new work over the coming year.

“We were describing the problem. It’s old. It’s tired. It’s not built for the current [fleet],” Edelson said of SIOP’s early days. “It’s no longer, ‘Let us describe how we’re organizing ourselves.’ [Now] it’s, ‘Let me tell you the projects we’ve finished and the projects we’re building now.’”