Crafting Logistics Innovation for the US Navy: SEA 21 Shapes a New Approach to Modernization and Maintenance

A multi-national naval force, including the San Antonio class-amphibious transport dock ship USS Mesa Verde, USS Doyle, USCGC Mohawk, the Colombian navy frigate ARC Independiente, the Dutch navy auxiliary ship HMNLS Amsterdam, and the Uruguayan navy frigate General Artigas, underway in formation as part of FuerzasAliadas PANAMAX 2009. FA PANAMAX is an annual multi-national training exercise tailored to the defense of the Panama Canal.

A multi-national naval force, including the San Antonio class-amphibious transport dock ship USS Mesa Verde, USS Doyle, USCGC Mohawk, the Colombian navy frigate ARC Independiente, the Dutch navy auxiliary ship HMNLS Amsterdam, and the Uruguayan navy frigate General Artigas, underway in formation as part of FuerzasAliadas PANAMAX 2009. FA PANAMAX is an annual multi-national training exercise tailored to the defense of the Panama Canal.

In an interview with Rear Admiral James McManamon at his office at the Washington Navy Yard in February 2009, the Admiral outlined the Naval Sea Systems Command’s (NAVSEA’s) new approach to logistics modernization. The Admiral described himself as 100% Irish, and with Irish wit and passion the Admiral laid out the course that his organization is taking to get a new approach to logistics modernization on track.

McManamon is the Deputy Commander for Surface Warfare in SEA 21. He is a key player in what the USN calls Team Ships. Team Ships comprises the Surface Warfare Directorate (SEA 21) in the Naval Sea Systems Command and Program Executive (PEO) Office Ships in the office of the Assistant Secretary of the Navy for Research, Development and Acquisition. Before SEA 21 existed, PEO Ships would do the modernization of the fleet and the fleet commands would do the maintenance. Alignment would be provided at the federated level, namely at the waterfront.

Set in motion by organizational changes launched in June 2007, SEA 21 is described by the USN as “the focal point of the Surface Warfare Enterprise that ensures warfighting readiness while dealing with fiscal realities, managing to the right metrics and synchronizing lifetime support efforts for all in-service and decommissioned surface combatants, non-nuclear aircraft carriers, amphibious warships and command, mine and special mission craft.” SEA 21 is characterized as “a strategic bridge to the fleet” that connects the Navy headquarters, NAVSEA and Program Executive Officers to the waterfront and operating forces.

SEA 21’s span of work encompasses the introduction of surface ships delivered to the Fleet last week, modernizing and sustain ships delivered to the Fleet decades ago, and disposing of ships after the completion of their service lives. According to the USN, “To so effectively and efficiently, we have structure our operations in focused “product lines” that are managed by senior, highly experienced surface warfare officers and supported skill military, civilian and contractor teams.”

The re-organization is in its early phases, but what was clear throughout the interview was the Admiral’s commitment to shaping practical approaches to achieving a much closer alignment among acquisition, maintenance and modernization. The Admiral underscored the need to shape a course which created buy-in from the various stakeholders in logistics reform, including industry, the commanding officers of the diverse surface ship community, the acquisition community, and the homeport support elements.

The Admiral emphasized that by shaping a new approach, which would get a better handle on maintenance efforts, the USN would be in a better position to shape more effective acquisition as well. “Clearly the best place to influence total ownership cost is in early design efforts. But the reality is that 80% of our 313-ship navy already exists and will be around 30 years, so the question is how to sustain the current fleet without having been able to influence early design. And by shaping a more effective approach to ongoing sustainment, we are in a better position to shape new acquisition and modernization approaches.”

The Admiral noted that the priority of the new approach is to get a handle on fleet class issues, and not just focusing on ship-by-ship maintenance efforts. Many class-wide maintenance issues exist without coherent resolution strategies. The high operational tempo of the surface fleet puts pressure on the ship commanders to prioritize short-term fixes rather than long-term maintenance solutions. But the problem according to the Admiral was simply put: “I can pay now for the needed repairs or pay four times more in five years because I have delayed those repairs.” In many ways, the problem that the Admiral is seeking to address is to provide incentives for ship commanders to be able to do the repairs needed now rather than putting them off until they become critical mass.

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Such an evolution was initiated via the Class Squadrons (CLASRONS) organizational concept, which is based on the appointment of an officer in charge of collecting all the maintenance and requirements data relevant for a class of ships –– e.g., guided-missile cruisers — in its entirety across America and abroad.

CLASSRON Homeports, 2009

Ingleside, Texas (moving to San Diego by 2010)
Avenger (MCM 1) mine countermeasures ships
Mayport, Florida
Oliver Hazard Perry (FFG 7) guided-missile frigates
Norfolk, Virginia
Arleigh Burke (DDG 51) Aegis guided-missile cruisers
Cyclone (PC 1) patrol coastal craft
Wasp (LHD 1), Tarawa (LHA 1) and Austin (LPD 4 amphibious ships
San Diego, California
Freedom (LCS 1) Littoral Combat Ships
Whidbey Island (LSD 41), Harper’s Ferry (LSD 49) and San Antonio (LPD 17)
Amphibious ships
Ticonderoga (CG 47)/Bunker Hill (CG 52) Aegis guided missile ships

According to the USN, “CLASSRONs coordinate in-service support by types of ships, wherever they are homeported, which enables SEA 21 to determine if a readiness issue is with just a single ship, a specific homeport or several homeports, or a class-wide concern. The CLASSRONs facilitate alignment and integration of manning, training, equipping, modernizing and sustaining surface warships from a ship-class perspective.”

One of the difficulties for SEA21 is precisely the fact that it has to deal with several different ship classes, compared to counterparts in the submarine and nuclear aircraft carrier communities, which focus on a much narrower group of ships. The Admiral’s task, as he describes it, is “to manage and balance a wide range of resources, maintenance being done in different homeports, by different contractors and different industries”.

He noted, “the submarine community ‘red-lines’ a number of critical maintenance tasks and has indeed adopted a Repair Before Operate (RBO) approach. If these tasks are not performed the sub cannot get under way. Because surface ships are more robust there is a tendency to respond to the drumbeat of operational demands, and to delay repairs until absolutely necessary to do them. And, of course, as the Admiral explains the failure of a “simple valve is not going to have the same effect in a submarine as on a surface ship, and therefore is not going to be dealt with in the same manner.”

The bias in the repair system for surface ships is towards the short term. The surface ship navy does not have strong ‘red-lines’. “The multi-mission redundancy built into our surface ships allows us to defer repairs. But over time this creates problems and the concern is that the notional life of the ship will be reduced by not doing the repairs needed for longevity,” the Admiral explained.

With the declining ship numbers facing the USN, ensuring full life for the surface fleet is imperative. As the Admiral put it, “sustainment is no longer an afterthought; it is now a strategic requirement, especially in a time of tighter budgets”

At the heart of the new approach is creating a knowledge-management capability to assess each ship class. Currently, the Admiral has 30 full-time equivalent staff working on numerous different ship classes to shape a prototype for each ship class of the metrics of life-cycle performance. Based on modeling the real state of each ship class, realistic maintenance and modernization schedules can be crafted to ensure more effective service life.

The American Bureau of Shipping (ABS) is also involved in the effort to assess each ship class with regard to expected service life. The challenge is with regard to expected service life to see how each it ship meets its expected service life and to obtain “a snapshot of the age of the ship”. Understanding the actual state of each member of a fleet class in terms of where they fell on the timeline of their real operational service life is becoming crucial to evaluating the real health of the fleet. “Is a 15 year destroyer in terms of chronological age in reality 10 years old or 20 years old in terms of operational service life?”

The government with strong contractor support leads the way. Team Ships is shaping the approach and ensuring that it is in charge of the conceptual understanding of the maintenance and modernization requirements for enhanced service life. The Admiral emphasized frequently throughout the interview that the critical alignment is between acquisition approaches and the twin tasks of maintenance and modernization. The USN will face trade offs between new ships and modernization of old ones and wants to be in a better position to understand whether modernization of a particular ship within a ship class is worth the cost or not.

An example of the type of relationship between maintenance and modernization, which the USN is trying to achieve, is the LSD 41/49 major upgrade program. In July 2008, the USN awarded contracts to modernize the USS Gunston Hall (LSD 44) at Metro Machine Corporation in Norfolk, Virginia and the USS Germantown (LSD 42) at General Dynamics/NASSCO in San Diego. Two ships will be modernized each year through 2013 with the last ship completed in 2014. The modernization encompasses major upgrades to the ship control system, local area network and machinery control system, as was a replacement of the ship’s boilers and evaporators with an all-electric services system. By so doing the latter the need for a costly maintenance support of legacy steam systems is eliminated.

The focus according to the Admiral is upon shaping a realistic and effective “engineered product” or “engineered work package” whereby a class maintenance plan would guide ship maintenance, rather than following a case-by-case approach. The task is to “provide an 80% solution to the 177 commanding officers rather than the current 20% solution.” By shaping a credible “engineered product”, buy-in is more likely from the ship commanders, on the one hand, and from the senior naval leadership, on the other hand, when addressing acquisition and modernization decisions.

As the new approach is put in place, a new relationship between industry and the USN is being shaped as well. The contract vehicle, which is being used to launch the new approach, is the multi-ship, multi-option (MSMO) maintenance-support contracts vehicle.

According to the USN:

The highly flexible cost-plus/award fee contracts are being awarded to single MSMO prime contractors for ships in specific homeports for a class squadron or group of ships. In that way, SEA 21/contractor teams can generate the greatest potential for achieving learning-curve efficiencies.

(In these contracts), the prime contractor will have overall responsibility for:

  • Scheduled availability execution planning
  • Continuous and emergency maintenance
  • Carryout out scheduled availabilities
  • Non-hull-specific/to-be-determined contingencies.

The federated nature of maintenance – done at the homeports and yards – sees a key role in each area for a prime contractor in working with a set of industrial partners. The Admiral is not seeking to hand over the maintenance effort to a core prime in each port or yard; when a prime is given a lead role, industrial partnerships are crucial to shape a cost-effective and high-performance outcome. “What we are seeing is that even when a prime contract is given, the other industrial players are part of the team but do so by honing their specialized skills. The outcome is better performance for the government and a more cost-effective approach for the contractors. It is a ‘win-win’ situation.”

But change does not come without controversy. The Admiral noted that in the Norfolk area there have been challenges to implementing the MSMO approach. No less that four Government Accountability Office (GAO) protests are currently underway against MSMO contracts but, in spite of this, 19 contracts have been implemented. The Admiral noted that increased teaming within industry has resulted from the MSMO effort in the Norfolk area.

And the Admiral believes that the MSMO approach has already yielded results. “We believe that we have achieved a 30% increase in surface ship underway readiness with only a 10% increase in dollars allocated to maintenance. As a result, “better teaming and more specialization are already noticeable” whereby each player tends to realize that there exists a “business model where not everyone has to be the sole winner”. More expertise in turn tends to reflect itself in better cost-control and timeline delivery.

SEA 21 has been in existence only since mid-2007. The only new ship class being developed concurrent with the launching of SEA 21 is the littoral combat ship. Therefore, it is not surprising to learn that SEA 21 is heavily engaged in the effort to build in enhanced support capabilities from the outset of the design and launching of this new class of ships.

Several contractors have proposed to the USN contractor-led sustainment approaches for the LCS. However, the USN is seeking an alternative approach to launching from the outset a prime contractor-dominated sustainment program. SEA 21 will put in place a core team monitoring the first three years of performance of the initially commissioned LCS ships. During this period, the team will collect metrics and determine the real costs for maintenance of the first ships. Based on these data and evaluation efforts, the USN will then determine the right approach to sustainment for this class of ships. The government will issue a request for information (RFI) for future sustainment along the lines of the MSMO approach.

As the Admiral commented, “My program managers are engaged in working the collection program. They are leading the Integrated Product Team (IPT) which will determine the scope and nature of the RFI to be issued to shape the sustainment approach for the LCS.”

In addition, the new sustainment approach of the USN is to be aligned with its partners. An illustration of the USN thinking was the holding of a conference with international partners at Mayport Naval Station in Florida in May 12-15 2009 to share experiences on modernization and maintenance approaches to the FFG class of ships. The FFG-7 is the most common platform for the international fleet and a key component for supporting the USN global maritime strategy. The focus of the conference was upon approaches to modernization, ways to leverage cost savings, and approaches to reduce obsolescence. There are currently 30 USN FFG’s operating worldwide and 33 FFGs operated by allies via Foreign Military Sales programs. The conference provided a conduit for information sharing among member navies and will seek to find ways to drive down acquisition and life cycle support costs. And additional objective for the USN has been to develop a market for FFG removed equipment for FMS rather than via a disposal and destruction strategy.

Each partner has approached modernization differently. The Australians are currently in the process of modernizing their fleet of FFG’s in order to extend the life of the ship. According to the Admiral, “SEA 21 through PMS 326 (International Fleet Support Program Office) is using some of the lessons learned from the Australian Program to help modernize and extend the life of the FFG’s already operational in Turkey and is assisting in establishing a modernization program for the FFG’s in Taiwan. Sharing experiences at the Conference and discussing approaches can “lead to better outcomes.” “This will be the first time a coordinated ship class specific international symposium will ever be done”.

In short, the Admiral underscored that the effort to align acquisition, maintenance and modernization was in its early stages. But failure to align was not an option. The high tempo of operations coupled with the declining numbers of ships clearly means that logistics modernization is at the heart of the strategic realignment of the USN to meet the requirements of 21st century operations. And the Admiral underscored his passion for logistics in a simple phrase: “Logistics touches the sailor every day; and is at the heart of the operations of the Navy. We need to get this right.”

An earlier version of this article was published in Military Logistics International (January-February 2009) and written by Robbin Laird and Murielle Delaporte. An update on the conference is provided in http://www.navyenterprise.navy.mil/docs/pdf/CRO-13-09.pdf

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***Posted September 24th, 2009

"If everyone is thinking alike, someone isn’t thinking."

—General George Patton Jr.

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