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Navy Shipbuilding — Update (continued from page 19) savings of $73 million could be ex- pected in this program. Congress reduced the authorized amount to reflect these savings. The ship is to be configured to carry the D-5 version of the Trident Missile. SSN-688—Nuclear Attack Sub- marine Three SSN's have been author- ized for FY 1984. Advance pro- curement of $336 million has been authorized for later ships. MCM-I—Mine Countermea- sures Ship Three MCM's were authorized for FY 1984, a reduction of one from Navy's request. The MCM design has experi- enced weight problems due to need for nonmagnetic, highly shock re- sistant equipment. MCM-I's hull design has been lengthened to ac- commodate increased weight. Also, Navy has reopened competitive procurement of diesel engines for the ship's propulsion. TAO—Fleet Oiler Authorization of $365.4 million eliminated one of the three ships requested by Navy. The reduction was made due to budget con- straints. No significant problems have developed in the construction program. LCAC—Landing Craft Air Cushion $131.6 million was authorized for procurement of six LCAC's. Another $29.5 million was author- ized for advance procurement. Strategic Sealift $31 million was authorized for purchase of U.S. flag ships from the commercial fleet for use in the Ready Reserve Fleet. Notice of proposed purchases under this au- thorization are subject to Navy's notification of Congress before a 30-day continuous session of Congress. Restrictions Placed on Long- Term Leases for Ships The MSC's Build/Convert and Charter Program came under de- tailed scrutiny in Congress last Spring. The T-AKX and T-5 tanker programs, totalling ten new con- structions and eight conversions, have been the focus of concern over the use of operation and maintenance funds for acquisition of ships. As a result Congress es- tablished the following guidelines for future programs of this nature: (1) Whenever a request is sub- mitted to Congress for the author- ization of the lease of an aircraft or naval vessel, the Secretary of Defense shall submit with that re- quest an analysis of the cost to the United States (including lost tax revenues) of any such lease ar- rangement compared with the cost to the United States of direct pro- curement of the aircraft or naval vessel by the United States. Any such analysis shall be re- viewed and evaluated by the Di- rector of the Office of Management and Budget and the Secretary of the Treasury within 30 days after the date on which the request and analysis are submitted to Con- gress. The Director and Secretary shall conduct such review and evaluation on the basis of the guidelines issued pursuant to this Act and shall report to the Con- gress in writing on the results of their review and evaluation at the earliest practicable date, but in no event more than 45 days after the date on which the request and analysis are submitted to the Congress. (2) Whenever a request is sub- mitted to Congress for the author- ization for funds for the Depart- ment of Defense for the long-term lease of aircraft or naval vessels authorized under this section, the Secretary of Defense—(A) shall in- dicate in the request what portion of the requested funds is attribut- able to capital-hire; and (B) shall reflect such portion in the appro- priate procurement account in the request. (3) The Director of the Office of Management and Budget and the Secretary of the Treasury shall is- sue jointly guidelines for deter- mining under what circumstances the Department of Defense may use lease arrangements for air- craft and naval vessels rather than directly procuring such aircraft and vessels. (4) Funds appropriated pursuant to an authorization contained in this Act may not be used to indem- nify any person under the terms of a contract entered into with the United States for a lease that is authorized under this section—(A) for any amount paid or due by any person to the United States for any liability arising under the in- ternal Revenue Code of 1954; or (B) to pay any attorney fees in connection with such contract. (5) At the same time that the President submits the budget re- quest for the Department of De- fense to Congress for fiscal year 1985, the Secretary of Defense shall submit a written report to the Committees on Armed Serv- ices and on Appropriations of the Senate and House of Representa- tives concerning leases. (6) During fiscal year 1984 obli- gation of funds for a lease author- ized under this section that in- cludes a termination liability in excess of 50 percent of the original purchase value of the vessel, air- craft or vehicle is prohibited un- less Congress has specifically pro- vided budget authority for the obligation of 10 percent of such termination liability. (7) Nothing in this section shall impede or affect the ability of the Secretary of the Navy to proceed to acquire the use of thirteen T- AKX class Maritime Preposition- ing Ships and the use of five new T-5 tankers in accordance with the long term charter arrangements negotiated by the Navy before the date of enactment of this Act. The conferees direct the Secre- tary of Defense to promptly report to the Committees on Armed Serv- ices of the Senate and House of Representatives any contract to lease of such contract: (A) is en- tered into between June 14, 1983, and the effective date of this sec- tion; and (B) would provide for in- demnification of Federal tax liabil- ity of any person or would provide for indemnification of attorney's fees. In effect, Congress permitted the Navy to proceed with the T- AKX and T-5 contracts. But Navy was told not to do it again—with- our prior Congressional approval. 1985 Defense Spending Program Defense Program Decision Memoranda (PDM) issued August 22 mark the end of the POM pro- cess. These memoranda state the Deputy Secretary of Defense deci- sion on size and composition of program funding for FY 1985. As a result of the DoD review process, Navy is required to res- tructure $800 million of planned spending in 1985. This action was imposed by the Deputy Secretary of Defense to reflect more realistic cost estimates and inflation adjustments. Navy is instructed to start pre- liminary alternative designs of a new nuclear attack submarine. Several small ship programs pro- posed by Navy for FY 1985 have been deleted or deferred. Navy is ordered to deploy a fourth aircraft carrier abroad, reflecting the con- tinued importance of the carrier task force in Navy planning. In re- cent past, Navy has had three car- riers deployed—one each in the Pacific, Mediterranean and Indian Ocean. These actions are forming the basis for the budget submission to Congress next January. Congress, of course, can impose changes. 2. DEVELOPMENTS IN SHIPBUILDING PROGRAMS Since June, the hospital ship (T- AH) has been contracted, several program changes have been an- nounced, and four new programs have surfaced. T-AH—Hospital Ship (Conver- sion) NAVSEA awarded initial con- tract for the T-AH to NASSCO in late June. The $186 million con- tract calls for conversion of a San Clemente design tanker. NASSCO has chosen 92,000 DWT tanker, ROSE CITY, delivered in 1976, for conversion. Subcontracting is now underway. Delivery is scheduled for October 1986. NASSCO's contract includes op- tion for second conversion to be ex- ercised in January 1984. Congress has authorized $260 million for the second conversion, but funds are not yet appropriated. MSH—Mine Sweeper Hunter This program has advanced through the first competitive de- sign phase. Initial designs were submitted by four shipyards on August 15. The second round of competitive design will begin with award of detailed design contracts to two shipyards this fall. Congress has authorized, but not yet funded, MSH lead ship award in FY 1984. DDG-51—Arleigh Burke Class Guided Missile Destroyer Head of PMS 400, the office re- sponsible for the CG-47 and DDG- 51 programs, is now RAdm. D. Roane. He recently replaced RAdm. Wayne Meyer, who moved to NAVSEA 06 as Deputy Com- mander, Combat Systems Direc- torate. The DDG-51 is currently in con- tract design stage. NAVSEA has organized a design team which in- cludes numerous firms performing naval architecture, program sup- port and systems design/modifica- tion. The three shipyards partici- pating in this design effort are Bath, Ingalls, and Todd-L.A. Award of lead ship contract is scheduled for early FY 1985. The RFP for lead ship contract is scheduled for release in Spring 1984. Construction awards sched- uled for the first 29 ships through 1992 is shown in Table I. DDG-51 design incorporates ma- chinery, weapons, and a combat system similar to the CG-47 class cruiser. These systems are to be improved through design modifi- cations. Phased introduction of up- graded systems into DDG-51 is scheduled for each of three flights over the next eight years. Several major system upgrades are currently in design stage. They will also be incorporated into later ships of the CG-47 Aegis cruiser class. Upgrade 1, to be installed on the first flight of DDG-51 and the CG-62, includes a new digital con- trol system and high power den- sity reduction gear: • design of the digital control 20 Maritime Reporter/Engineering News
