FORD-CLASS 

AIRCRAFT CARRIER

Congress Should 

Consider Revising 

Cost Cap Legislation 

to Include All 

Construction Costs

Report to Congressional Committees

November 2014

GAO-15-22

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-15-22, a report to 

congressional committees

November 2014

FORD-CLASS AIRCRAFT CARRIER

Congress Should Consider Revising Cost Cap 

Legislation to Include All Construction Costs

Why GAO Did This Study

Ford-class aircraft carriers will feature 

new technologies designed to reduce 

life-cycle costs. The lead ship, CVN 78,

has been under construction since 

2008, and early construction on CVN 

79 is underway. In 2007 Congress 

established a cap for procurement 

costs—which has been adjusted over

time. In September 2013, GAO 

reported on a $2.3 billion increase in 

CVN 78 construction costs.

GAO was mandated to examine risks

in the CVN 78 program since its 

September 2013 report. This report

assesses (1) the extent to which CVN 

78 will be delivered within revised cost

and schedule goals; (2) if CVN 78 will 

demonstrate its required capabilities 

before ship deployment; and (3) the 

steps the Navy is taking to achieve 

CVN 79 cost goals. To perform this 

work, GAO analyzed Navy and 

contractor data, and scheduling best 

practices.

What GAO Recommends

Congress should consider revising the 

cost cap legislation to improve 

accountability of Ford-class 

construction costs, by requiring that all 

work included in the initial ship cost 

estimate is counted against the cost 

cap. If warranted, the Navy would be 

required to seek statutory authority to 

increase the cap. GAO is not making

new recommendations, but believes

previous recommendations, including a

re-examination of requirements and 

improvements to the test plan, remain 

valid. DOD agreed with much of the 

report, but disagreed with GAO’s 

position on the cost caps. GAO

believes that changes to the legislation 

are warranted to improve cost 

accountability.

What GAO Found

The extent to which the lead Ford-class ship, CVN 78, will be delivered by its 

current March 2016 delivery date and within the Navy’s $12.9 billion estimate is

dependent on the Navy’s plan to defer work and costs to the post-delivery period. 

Lagging construction progress as well as ongoing issues with key technologies

further exacerbate an already compressed schedule and create further cost and 

schedule risks. With the shipbuilder embarking on one of the most complex 

phases of construction with the greatest likelihood for cost growth, cost increases

beyond the current $12.9 billion cost cap appear likely. In response, the Navy is 

deferring some work until after ship delivery to create a funding reserve to pay for 

any additional cost growth stemming from remaining construction risks. This 

strategy will result in the need for additional funding later, which the Navy plans 

to request through its post-delivery and outfitting budget account. However, this 

approach obscures visibility into the true cost of the ship and results in delivering

a ship that is less complete than initially planned.

CVN 78 will deploy without demonstrating full operational capabilities because it 

cannot achieve certain key requirements according to its current test schedule. 

Key requirements—such as increasing aircraft launch and recovery rates—will 

likely not be met before the ship is deployment ready and could limit ship 

operations. Further, CVN 78 will not meet a requirement that allows for increases 

to the size of the crew over the service life of the ship. In fact, the ship may not 

even be able to accommodate the likely need for additional crew to operate the 

ship without operational tradeoffs. Since GAO’s last report in September 2013, 

post-delivery plans to test CVN 78’s capabilities have become more compressed, 

further increasing the likelihood that CVN 78 will not deploy as scheduled or will 

deploy without fully tested systems. 

The Navy is implementing steps to achieve the $11.5 billion congressional cost 

cap for the second ship, CVN 79, but these are largely based on ambitious 

efficiency gains and reducing a significant amount of construction, installation, 

and testing—work traditionally completed prior to ship delivery. Since GAO last 

reported in September 2013, the Navy extended CVN 79’s construction 

preparation contract to allow additional time for the shipbuilder to reduce cost 

risks and incorporate lessons learned from construction of CVN 78. At the same

time, the Navy continues to revise its acquisition strategy for CVN 79 in an effort 

to ensure that costs do not exceed the cost cap, by postponing installation of 

some systems until after ship delivery, and deferring an estimated $200 million -

$250 million in previously planned capability upgrades of the ship’s combat 

systems to be completed well after the ship is operational. Further, if CVN 79 

construction costs should grow above the legislated cost cap, the Navy may 

choose to use funding intended for work to complete the ship after delivery to 

cover construction cost increases. As with CVN 78, the Navy could choose to 

request additional funding through post-delivery budget accounts not included in 

calculating the ship’s end cost. Navy officials view this as an approach to 

managing the cost cap. However, doing so impairs accountability for actual ship 

costs. View GAO-15-22. For more information, 

contact Michele Mackin at (202) 512-4841 or 

mackinm@gao.gov.
Page i GAO-15-22 Ford Class Aircraft Carrier

Letter 1

Background 2

With Risks Remaining in CVN 78 Construction, the Navy Plans to 

Defer Work in an Effort to Meet Delivery Schedule and Cost 

Cap Goals 10

CVN 78 Will Not Demonstrate Key Capabilities Prior to 

Deployment and Faces Continued Post-Delivery Testing 

Challenges 21

Navy’s Ability to Meet CVN 79 Cost Cap Predicated on Ambitious 

Efficiency Gains and Deferring Work until after Ship Delivery 29

Conclusions 38

Matter for Congressional Consideration 39

Recommendations for Executive Action 39

Agency Comments and Our Evaluation 39

Appendix I Scope and Methodology 42

Appendix II New Technologies Introduced on Ford-Class Ships 45

Appendix III Comments from the Department of Defense 47

Appendix IV GAO Contact and Staff Acknowledgments 49

Tables

Table 1: Indicators of Lagging Construction Progress on CVN 78 12

Table 2: CVN 78 Planned Work Deferred to Post-Delivery to 

Create Funding Reserve 19

Table 3: CVN 78 Construction Contract Estimated Costs at Ship 

Completion 20

Table 4: Nimitz-Class and Ford-Class Sortie Generation Rates 22

Table 5: Current Reliability Rates for EMALS and AAG Systems 23

Table 6: Ship’s Manning Totals for Nimitz- and Ford-Class Aircraft 

Carriers as of September 2014 24

Table 7: CVN 78 Current Projected Manning and Available 

Accommodations 25

Contents
Page ii GAO-15-22 Ford Class Aircraft Carrier

Table 8: Number of Construction Labor Hours Required to Build 

Aircraft Carriers 33

Table 9: Scope of Advanced Construction Work under CVN 79 

Construction Preparation Contract Extension Strategy 34

Table 10: Planned CVN 79 System Upgrades and Modernizations 

Deferred Until Future Maintenance Periods 37

Table 11: New Technologies for the Ford-Class Aircraft Carrier 45

Figures

Figure 1: Cost Cap Increases During Acquisition of the Ford Class 8

Figure 2: System Developmental Testing Delays 14

Figure 3: Comparison of AAG Test Strategies 16

Figure 4: Changes to CVN 78 Post-Delivery Test Schedule Since 

2013 28

Figure 5: Comparison of the Planned and Actual Number of Labor 

Hours Required to Complete Advanced Construction 

Work for the First 205 Structural Units on CVN 79 31

Figure 6: Comparison of CVN 79’s September 2013 and October 

2014 Revised Acquisition Schedules 36

Figure 7: Critical Technologies on the Ford-Class Aircraft Carrier 46

Abbreviations

AAG advanced arresting gear

CP construction preparation

DOD Department of Defense

DOT&E Director for Operational Test and Evaluation

DT&E Developmental Test and Evaluation

DBR dual band radar

EMALS electromagnetic aircraft launch system

IOT&E initial operational test and evaluation

SGR sortie generation rate

TEMP test and evaluation master plan

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Page 1 GAO-15-22 Ford Class Aircraft Carrier

441 G St. N.W.

Washington, DC 20548

November 20, 2014

Congressional Committees

The Navy is developing the Ford-class nuclear-powered aircraft carrier to 

serve as the future centerpiece of the carrier strike group. The Ford class 

is the successor to the Nimitz-class aircraft carrier designed in the 1960s 

and is introducing a number of advanced technologies to the fleet in the 

areas of propulsion, aircraft launch and recovery, weapons handling, and 

survivability. These technologies are intended to create operational 

efficiencies while enabling a 25 percent increase in sortie rates 

(operational flights by aircraft) as compared to legacy Nimitz-class aircraft 

carriers. In addition, the Navy anticipates that these technologies will 

enable Ford-class carriers to operate with reduced manpower as 

compared to the legacy carriers. The Navy plans to invest over $43 billion 

to develop, design, construct, and test three Ford-class carriers. At 

present, the lead ship, Gerald R. Ford (CVN 78), is about 80 percent 

complete and early construction work is under way for the first follow-on 

ship, John F. Kennedy (CVN 79).

Since 2008, the Navy has increased its budget estimate for construction 

of the lead ship from $10.5 billion to $12.9 billion in then-year dollars—an 

increase of over 20 percent above initial estimates, and delayed delivery 

from September 2015 to March 2016. We found in September 2013 that 

continued cost growth has the potential to derail the Navy’s ability to 

deliver Ford-class aircraft carriers on its schedule with expected 

capabilities. In light of our September 2013 report, a Senate report

accompanying a bill for the National Defense Authorization Act for Fiscal 

Year 2014 mandated GAO to review the Navy’s acquisition of the Fordclass.1

 1 S. Rep. 113-44, at 21-22 (2013).

This report examines remaining risks in the CVN 78 program since 

September 2013 by assessing: (1) the extent to which CVN 78 will be 

delivered to the Navy within its revised cost and schedule goals; (2) if, 

after delivery, CVN 78 will demonstrate its required capabilities through 

testing before the ship is deployment ready; and (3) the steps the Navy is 

taking to achieve CVN 79 cost goals.
Page 2 GAO-15-22 Ford Class Aircraft Carrier

To identify challenges in delivering the lead ship within current budget 

and schedule estimates, we analyzed Navy budget submissions, contract 

performance reports, and briefings, and historical cost performance on 

previous carriers. To evaluate the Navy’s strategy to demonstrate CVN 

78’s capabilities, we met with system developers and analyzed the 

program’s test and evaluation master plan, as well as test plans, 

development schedules, and reliability data for key CVN 78 systems. To 

assess the steps the Navy is taking to achieve CVN 79 cost goals, we 

met with Navy and shipbuilder officials, analyzed CVN 79 construction 

preparation contract documents and scopes of work as well as the 

shipbuilder’s performance for related work activities. We also reviewed 

the shipbuilder’s plans for process improvements and labor hour 

reduction efforts and the associated cost savings, and analyzed 

construction schedules for CVN 78 and CVN 79 and compared them with 

scheduling best practices. Lastly, we evaluated the Navy’s revised build 

strategy for CVN 79 and compared it with the ship’s previous acquisition 

schedule. To corroborate information for each of these objectives, we 

interviewed DOD officials and the shipbuilder responsible for the Fordclass carrier requirements, development, acquisition, and testing. A more 

detailed description of our scope and methodology is presented in 

appendix I.

We conducted this performance audit from December 2013 to November 

2014 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

The Ford class features a number of improvements over existing aircraft 

carriers that the Navy believes will improve the combat capability of the 

carrier fleet while simultaneously reducing acquisition and life cycle costs. 

These improvements include an increased rate of aircraft deploying from 

the carrier (sorties), reduced manning, significant growth in electrical 

generating capability, and larger service life margins for weight and 

stability to support future changes to the ship during its expected 50-year 

service life.

To meet its requirements, the Navy developed over a dozen new 

technologies for installation on Ford-class ships (see appendix II). For 

example, advanced weapons elevators, using an electromagnetic field to 

Background
Page 3 GAO-15-22 Ford Class Aircraft Carrier

transport weapons within the ship instead of cables, are expected to 

increase payload capacity by 229 percent as compared to Nimitz-class 

carriers, while also facilitating reduced manning and higher sortie 

generation rates. Other technologies allowed the Navy to implement 

favorable design features into the ship, including an enlarged flight deck, 

a smaller, aft-positioned island, and a flexible ship infrastructure to 

accommodate changes during the ship’s service life. As we have 

previously reported, of the critical technologies, three have presented 

some of the greatest challenge during development and construction:2

• Electromagnetic Aircraft Launch System (EMALS), which uses an 

electrically generated moving magnetic field to propel aircraft that 

places less physical stress on aircraft as compared to legacy steam 

catapult launchers on Nimitz-class carriers.

• Advanced Arresting Gear (AAG) is an electric motor based aircraft 

recovery system that rapidly decelerates an aircraft as it lands. AAG 

replaces legacy hydraulic arresting equipment currently in use on 

Nimitz-class carriers.

• Dual Band Radar (DBR) integrates two component radars—the 

multifunction radar and the volume search radar—to conduct air traffic 

control, ship self-defense, and other operations. The multifunction 

radar includes horizon search, surface search, navigation, and missile 

communications. The volume search radar includes long-range, 

above horizon surveillance and air traffic control capabilities.

As is typical in Navy shipbuilding, Ford-class carrier construction occurs 

in several phases and includes several key events, including the 

following:

• Pre-construction and planning: Long-lead time materials and 

equipment are procured and the shipbuilder plans for beginning ship 

construction.

• Block fabrication, outfitting, and erection: Metal plates are welded 

together to form blocks, which are the basic building components of 

 2

GAO, Ford-class Carriers: Lead Ship Testing and Reliability Shortfalls Will Limit Initial

Fleet Capabilities, GAO-13-396 (Washington, D.C.: Sept. 5, 2013; and Defense 

Acquisitions: Navy Faces Challenges Constructing the Aircraft Carrier Gerald R. Ford

within Budget, GAO-07-866 (Washington, D.C.: Aug. 23, 2007).

Shipbuilding Phases
Page 4 GAO-15-22 Ford Class Aircraft Carrier

the ship. The blocks are assembled and outfitted with pipes, brackets 

for machinery or cabling, ladders, and any other equipment that may 

be available for installation. Groupings of blocks form superlifts, which 

are then lifted by crane into dry dock and welded into the respective 

location of the ship.

• Launch: After the ship is watertight, it can be launched—floated in the 

water—then towed into a quay or dock area where remaining 

construction and outfitting of the ship occurs.

• Shipboard testing: Once construction and system installations are 

largely complete, the builder will test the ship’s hull, mechanical and 

electrical systems, and key technologies to demonstrate compliance 

with ship specifications and provide assurance that the items tested 

operate satisfactorily within permissible design parameters.

• Delivery: Once the Navy is satisfied that the ship is seaworthy and 

the shipbuilder has met requirements, the shipyard transfers custody 

of the ship to the Navy.3

• Post-delivery activities: After ship delivery, tests are conducted on 

the ship’s combat and mission-critical systems, the ship’s air wing—

consisting of the assigned fixed and rotary wing aircraft, pilots, 

support and maintenance personnel—is brought onto the ship, and 

the crew begins training and operating the ship while at sea. A period 

of planned maintenance, modernization, and correction of 

government-responsible deficiencies follows—referred to as Post 

Shakedown Availability.

• Deployment ready: The last stage of the ship acquisition process 

occurs when all crew and system operational tests, trainings, and 

certifications have been obtained and the ship has achieved the 

necessary level of readiness needed to embark on its first 

deployment.

 3

The process by which the Navy delivers an aircraft carrier differs slightly from a traditional 

Navy shipbuilding project. During construction of nuclear powered ships, including 

submarines and aircraft carriers, the Navy assumes custody of individual compartments 

upon completion by the shipbuilder and the ship’s crew subsequently begins boarding and 

training. In contrast, during a non-nuclear Navy shipbuilding project the shipbuilder 

maintains custody of the ship until the ship is delivered to the Navy, upon the signing of a 

Material Inspection and Receiving Report.
Page 5 GAO-15-22 Ford Class Aircraft Carrier

During and after construction, DOD acquisition policy requires major 

defense programs, including shipbuilding programs, to execute and 

complete several types of testing, while the ship progresses toward 

operational milestones including the point during the acquisition process 

when the fleet initially receives and maintains the ship:

• Developmental testing is intended to assist in the maturation of 

products, product elements, or manufacturing or support processes. 

For ship technologies, developmental testing typically includes landbased testing activities prior to introducing a new technology in a 

maritime environment and commencing with shipboard testing. 

Developmental testing does not include testing systems in concert 

with other systems.

• Integration testing is intended to assess, verify, and validate the 

performance of multiple systems operating together to achieve 

required ship capabilities. For example, integration testing would 

include among other things, testing the operability of the DBR in a 

realistic environment where multiple antennas and arrays are emitting 

and receiving transmissions and multiple loads are placed upon the 

ship’s power and cooling systems simultaneously.

• Initial Operational Test and Evaluation (IOT&E) is a major 

component of post-delivery testing intended to assess a weapon 

system’s capability in a realistic environment when maintained and 

operated by sailors, subjected to routine wear-and-tear, and employed 

in combat conditions against simulated enemies. During this test 

phase, the ship is exposed to as many actual operational scenarios as 

possible to reveal the weapon system’s capability under stress.

The Navy schedules and plans these test phases and milestones using a 

test and evaluation master plan (TEMP) that is approved by the Deputy 

Assistant Secretary of Defense for Developmental Test and Evaluation 

(DT&E) and the Director for Operational Test and Evaluation (DOT&E).

The Deputy Assistant Secretary of Defense for DT&E leads the 

organization within the Office of the Secretary of Defense that is 

responsible for providing developmental test and evaluation oversight and 

support to major acquisition programs. The Director, DOT&E leads the 

organization within the Office of the Secretary of Defense that is 

Test Events
Page 6 GAO-15-22 Ford Class Aircraft Carrier

responsible for providing operational test and evaluation oversight and 

support to major defense acquisition programs.4

Due to their vast size and complexity, aircraft carriers require funding for 

design, long-lead materials, and construction over many years. To 

accomplish these activities on the Ford class, the Navy has awarded 

contracts for two phases of construction—construction preparation and 

detail design and construction—which are preceded by the start of 

advance procurement funding. Since September 2008, Newport News 

Shipbuilding has been constructing CVN 78 under a cost-reimbursement 

contract for detail design and construction of CVN 78. This contract type 

places significant cost risk on the government, which may pay more than 

budgeted should costs be more than expected. The Navy now expects to 

largely repeat the lead ship design for CVN 79, with some modifications, 

and construct that ship under a fixed-price incentive contract, which 

generally places more risk on the contractor.

To ensure the Navy adheres to its cost estimates, Congress, in the 

National Defense Authorization Act for Fiscal Year 2007, established a 

$10.5 billion procurement cost cap for CVN 78, and an $8.1 billion cost 

cap for each subsequent carrier.5

• cost changes due to economic inflation;

If the Navy determines adjustments to 

the cost cap are necessary, it must first obtain statutory authority from 

Congress, which means it would be required to submit a proposal to 

Congress increasing the cost cap. The 2007 legislation also contains six 

provisions that allow the Navy to make adjustments to the cost cap 

(increasing or decreasing) without seeking statutory authority:

• costs attributable to shipbuilder compliance with changes in Federal, 

State, or local laws;

• outfitting and post-delivery costs;

• insertion of new technologies onto the ships;

 4

10 U.S.C. § 139 and DOD Directive 5141.02, Subject: Director of Operational Test and 

Evaluation, Feb. 2, 2009. 

5

Pub. L. No. 109-364, § 122(a)(1) and (a)(2) (2006). Dollars are then-year.

Ford-Class Contracts

Ford-Class Legislative 

Cost Caps
Page 7 GAO-15-22 Ford Class Aircraft Carrier

• cost changes due to nonrecurring design and engineering; and

• costs associated with correction of deficiencies that would otherwise 

preclude safe operation and crew certification.

The National Defense Authorization Act for Fiscal Year 2014 further 

expanded the list of allowable adjustments, solely for CVN 78, to include 

cost changes due to urgent and unforeseen requirements identified 

during shipboard testing.6

Since 2007, the Navy has sought and been granted adjustments to CVN 

78’s cost cap to the current amount of $12.9 billion, which were attributed 

to construction cost overruns and economic inflation. In 2013, the Navy 

increased CVN 79’s cost cap to $11.5 billion, citing inflation and additional 

non-recurring design and engineering work. Subsequently, the National 

Defense Authorization Act for Fiscal Year 2014 increased the legislated 

cost cap for any follow-on ship in the Ford-class to $11.5 billion. In 

addition, the Navy delayed CVN 79’s delivery by 6 months, from 

September 2022 to March 2023, to reflect changes in the ship’s budget.

Figure 1 outlines the Navy’s acquisition timeline for the Ford class, along 

with adjustments made to the legislated cost cap throughout the course of 

the shipbuilding program.

 6

Pub. L. No. 113-66, § 121 (2013).
Page 8 GAO-15-22 Ford Class Aircraft Carrier

Figure 1: Cost Cap Increases During Acquisition of the Ford Class
Page 9 GAO-15-22 Ford Class Aircraft Carrier

In August 2007 and September 2013, we reported on the programmatic 

challenges associated with technology development, design, 

construction, and testing of the lead ship (CVN 78). In our 2007 report, we 

noted that delays in Ford-class technology development and overly 

optimistic cost estimates would likely result in higher lead ship costs than 

what the Navy allotted in its budget. We recommended actions to improve 

the realism of the CVN 78 budget estimate and the Navy’s cost 

surveillance capacity, as well as develop carrier-specific tests of the DBR 

to ensure the radar meets carrier-specific requirements. The Navy 

addressed some, but not all, of our recommendations7

Our 2013 report found delays in technology development, material 

shortfalls, and construction inefficiencies were contributing to increased 

lead ship construction costs and potential delays to ship delivery. We also 

found the Navy’s ability to demonstrate CVN 78’s capabilities after 

delivery was hampered by test plan deficiencies, and reliability shortfalls 

of key technologies could lead to the ship deploying without those 

capabilities. Lastly, we concluded that ongoing uncertainty in CVN 78’s 

construction could undermine the Navy’s ability to realize additional cost 

savings during construction of CVN 79—the follow on ship. These 

findings led to several recommendations to DOD:

.

• conduct a cost-benefit analysis on required CVN 78 capabilities, 

namely reduced manning and the increased sortie generation rate, in 

light of known and projected reliability shortfalls for critical systems;

• update the Ford-class program’s test and evaluation master plan to 

allot sufficient time after ship delivery to complete developmental test 

activities prior to beginning integration testing;

• adjust the planned post-delivery test schedule to ensure that system 

integration testing is completed before IOT&E;

• defer the CVN 79 detail design and construction contract award until 

land-based testing for critical systems is complete; and,

• update the CVN 79 cost estimate on the basis of actual costs and 

labor hours needed to construct CVN 78.

While DOD agreed with some of our recommendations, it did not agree 

with our recommendation to defer the award of CVN 79’s detail design 

 7 GAO-07-866.

Our Prior 

Recommendations
Page 10 GAO-15-22 Ford Class Aircraft Carrier

and construction contract until certain testing of critical technology 

systems were completed, noting that deferring contract award would lead 

to cost increases resulting from the required re-contracting effort, among 

other things. Shortly after we issued our report, however, the Navy 

postponed awarding the construction contract until the first quarter of 

fiscal year 2015, citing the need for additional time to negotiate more 

favorable pricing with the shipbuilder as well as for the shipbuilder to 

continue to implement and demonstrate cost savings.

The extent to which CVN 78 will be delivered within the Navy’s revised 

schedule and cost goals is dependent on deferring work and costs to the 

ship’s post-delivery period. Meeting CVN 78’s current schedule and cost 

goals will require the shipbuilder to overcome lags in the construction 

schedule. Successful tests of the equipment and systems now installed 

on the ship (referred to as shipboard testing) will also be necessary. 

However, challenges with certain key technologies are likely to further 

exacerbate an already compressed test schedule. With the shipbuilder 

embarking on one of the most complex phases of construction with the 

greatest likelihood for cost growth, cost increases beyond the current 

$12.9 billion cost cap appear likely. In response, the Navy is deferring 

work until after ship delivery to create a reserve to help ensure that funds 

are available to pay for any additional cost growth stemming from 

remaining construction risks. In essence, the Navy will have a ship that is 

less complete than initially planned at ship delivery, but at a greater cost. 

The strategy of deferring work will result in the need for additional funding 

later, which the Navy plans to request through its post-delivery and 

outfitting budget account—Navy officials view this plan as an approach to 

managing the cost cap. However, increases to the post-delivery and 

outfitting budget account are not captured in the total end cost of the ship, 

thereby obscuring the true costs of the ship.

The shipbuilder appears to have resolved many of the engineering and 

material challenges that we reported in September 2013. These 

challenges resulted in inefficient and out-of-sequence work that led to a 

revision of the construction and shipboard test schedules and contributed 

to an increase to the ship’s legislated cost cap from $10.5 billion to the 

With Risks Remaining 

in CVN 78 

Construction, the 

Navy Plans to Defer 

Work in an Effort to 

Meet Delivery 

Schedule and Cost 

Cap Goals

Lags in Construction 

Progress May Signal 

Slip in Delivery Date 

and Increased Costs
Page 11 GAO-15-22 Ford Class Aircraft Carrier

current $12.9 billion.8

As shown in table 1, the shipbuilder continues to face a backlog of 

construction activities, including

Nevertheless, with about 20 percent of work 

remaining to complete construction and the shipboard test program under 

way, the lagging effect of these issues is creating a backlog of 

construction activities that further threaten the ship’s revised delivery date 

and that may lead to further increased costs. As we have found in our 

previous work, additional cost increases are likely to occur because the 

remaining work on CVN 78 is generally more complex than much of the 

work occurring in the earlier stages of construction.

• completing work packages, which are sets of defined tasks and 

activities during ship construction and are how the shipbuilder 

manages and monitors construction progress through the construction 

master schedule;

• outfitting of individual compartments on the ship; and

• transferring custody of completed compartments and hull, mechanical, 

and electrical systems to the Navy, referred to as “compartment and 

system turnover.”

 8

Enacted in December 2013, Section 121 in the National Defense Authorization Act for 

Fiscal Year 2014 increased the cost cap for the lead ship (CVN 78) to $12.9 billion.
Page 12 GAO-15-22 Ford Class Aircraft Carrier

Table 1: Indicators of Lagging Construction Progress on CVN 78

Work package 

completion rates 

The shipbuilder has a backlog of over 5,300 delinquent work 

packages (approximately 10 percent of the total work 

packages scheduled).This is compounded by lagging 

performance of the ship assembly trades, such as the 

painting and sheet metal departments. According to the 

latest available data (August 2014), the shipbuilder was in 

the process of developing a plan on how to complete the 

delinquent work packages.

Compartment outfitting 

and completion

According to the latest available data (August 2014), the 

shipbuilder had completed construction on 73 percent of the 

777 compartments scheduled to be completed by that date. 

Late delivery of government furnished equipment has 

contributed to the delays. To meet the current schedule, the 

shipbuilder will need to complete construction of 2,608 

compartments by February 2016.

Compartment and system 

turnover to the Navy

According to the latest available data (August 2014), the 

shipbuilder was about 25 percent behind schedule in 

transferring custody of completed compartments and hull, 

mechanical, and electrical systems to the Navy, and is 

generally falling short of achieving the weekly scheduled 

turnovers. The Navy is piloting an approach that 

incorporates personnel from the ship’s crew to assist the 

Supervisor of Shipbuilding, Conversion and Repair (the 

Navy’s shipbuilding contract oversight and project 

management organization) with the turnover process.

Sources: GAO analysis based on Navy and shipbuilder data. | GAO-15-22

As the shipbuilder completes construction and compartment outfitting 

activities, the shipboard testing phase of the project commences. This 

testing is scheduled to be completed by early February 2016 on the ship’s 

hull, mechanical, and electrical systems, about 2 months before the 

anticipated end of March 2016 delivery date. The shipboard test program 

is meant to ensure correct installation and operation of the equipment and 

systems in a maritime environment. This is a complex and iterative 

process that requires sufficient time for discovering problems inherent 

with the start-up and initial operation of a system, performing corrective 

work, and retesting to ensure that the issues have been resolved. 

However, as a result of previous schedule delays, the shipbuilder 

compressed the shipboard test plan, resulting in a schedule that leaves 

insufficient time for discovery and correction should problems arise. 

Further, the construction delays discussed above directly affect the 

builder’s ability to test the ship’s hull, mechanical, and electrical systems, 

thus increasing the likelihood of additional testing delays. For example, 

testing of the ship’s fire sprinklers was delayed because construction of 

Delays in Shipboard 

Testing Likely Because of 

Issues Discovered During 

Land-Based Testing of 

Key Technologies
Page 13 GAO-15-22 Ford Class Aircraft Carrier

the sprinkling system was not completed on time. In other instances, 

delays stemming from construction can have a cascading effect on the 

test program. As another example, testing of the ship’s plumbing fixtures 

was delayed until testing of the potable water distribution system was 

completed and the system activated.

Another integral part of the shipboard test program is testing the ship’s 

key technologies, many of which are being operated for the first time in a 

maritime environment, and ensuring that these technologies function as 

intended. Four of these technologies are instrumental in executing CVN 

78’s mission—AAG, EMALS, DBR, and the advanced weapons elevators. 

Although these technologies are, for the most part, already installed on 

the ship, certain technologies are still undergoing developmental landbased testing. Except for the advanced weapons elevators, which are 

managed by the shipbuilder, the other technologies are being developed 

by separate contractors, with the government providing the completed 

system to the shipbuilder for installation and testing. The shipboard test 

programs for EMALS and the advanced weapons elevators are currently 

under way, while AAG and DBR testing is scheduled to commence in 

fiscal year 2015. However, developmental testing for AAG, EMALS, and 

DBR is taking place concurrently at separate land-based facilities (as well 

as aboard the ship). This situation presents the potential for modifications 

to be required for the shipboard systems that are already installed if landbased testing reveals problems. Three of the systems we reported on in 

our last report in September 2013—AAG, EMALS, and DBR—have since 

experienced additional developmental test delays (as shown in figure 2).
Page 14 GAO-15-22 Ford Class Aircraft Carrier

Figure 2: System Developmental Testing Delays

Following is more information on the status of testing of these key 

technologies.

Shipboard testing for AAG is scheduled to begin in March 2015, but 

according to the CVN 78 program office, the AAG contractor is 

redesigning equipment on the system’s hydraulic braking system by 

adding additional filtration and the shipbuilder is replacing associated

piping, which will likely delay the start of system testing. In addition, the 

AAG contractor has to complete over 50 modifications to the systems 

before shipboard testing can begin; these modifications are needed to 

address issues identified during developmental testing at the land-based 

AAG
Page 15 GAO-15-22 Ford Class Aircraft Carrier

test site. As we previously found, AAG experienced several failures 

during land-based testing, which led to redesign and modification of 

several subsystems, most notably the water twisters—a device used to 

absorb energy during an aircraft arrestment. CVN 78 program officials 

expressed concerns that the rework cannot be completed on time to 

support the current shipboard test schedule, and attribute the delays to 

the immaturity of AAG when it was installed on the ship.

The shipboard test program is further at risk because additional design 

changes and modifications to the shipboard AAG units remain likely. This 

is because the Navy will now be conducting land-based testing of AAG 

even as shipboard testing is under way. As a result of issues discussed 

above, the Navy further delayed the schedule for land-based testing (as 

shown in figure 2) and changed the test strategy to better ensure that it 

could meet the schedule for testing live aircraft aboard the ship. AAG’s 

previous land-based test plan was to sequentially test each aircraft type 

planned for CVN 78 as a simulated load on a jet car track.9

 9

The Navy plans for the carrier variant of the Joint Strike Fighter (F-35C) to become part 

of the Ford-class air wing; however, the aircraft is not included in the AAG land-based test 

schedule.

After 

completing jet car track testing for all aircraft types, the actual aircraft 

were to be tested with the AAG system on a runway. This strategy 

allowed for discovery of issues with each aircraft type prior to advancing 

to the next stage of testing. However, earlier this year the AAG program 

office changed its strategy so that each aircraft type will be tested 

sequentially at the jet car track and runway sites. Once an aircraft 

completes both types of testing, testers will re-configure the sites to test 

the next type of aircraft, according to AAG program officials. Figure 3 

shows the difference in AAG test strategies along with the overall ship 

test schedule. The program office plans to complete this revised testing 

approach with the F/A-18 E/F Super Hornet fighter first, as this aircraft will 

be most in use aboard the carrier.
Page 16 GAO-15-22 Ford Class Aircraft Carrier

Figure 3: Comparison of AAG Test Strategies

While the Navy stated that this change was necessary to ensure that at 

least one aircraft type would be available to certify the system for 

shipboard testing, it further increases the potential for discovering issues 

well past shipboard testing and even ship delivery.

The shipbuilder began EMALS activation and shipboard testing activities 

in August 2014, as planned. This is the first time EMALS is being 

operated and tested in a maritime environment, in a multiple catapult 

configuration, using a shared power source, with multiple electromagnetic 

fields. Any additional delays with the EMALS shipboard test schedule will 

directly affect CVN 78’s delivery date. Specifically, a key aspect of the 

test program is testing the system’s launch capabilities by using weighted 

loads that simulate an aircraft—referred to as dead-loads—off of the flight 

EMALS
Page 17 GAO-15-22 Ford Class Aircraft Carrier

deck of the carrier. This test must be completed by November 2015, the 

point at which the shipbuilder is scheduled to turn the front of the ship 

toward the dock to begin testing the ship’s propulsion system in 

preparation for subsequent sea trials. At the same time, land-based 

testing for EMALS is still on-going and the Navy now anticipates testing 

will be completed during the third quarter of fiscal year 2016.

Shipboard testing is scheduled to begin in January 2015, but according to 

the CVN 78 program office, the DBR contractor must first make 5 

modifications to the installed radar system prior to its initial activation. In 

particular, the power regulating system needs to be modified, which 

requires removal, modification, and re-installation of certain power control 

modules. Shipbuilder officials told us that any delay to the installation of 

these items will likely affect the DBR shipboard test schedule, but 

according to the DBR program office, software and hardware 

modifications to correct this issue are complete and the ship-set units are 

in production.

Program officials do not anticipate additional changes to the system’s 

hardware prior to commencing shipboard testing, but they do expect 

further software modifications as land-based development testing 

progresses. As a result, there is the risk that additional modifications to 

the shipboard DBR system will be required. In addition, land-based 

testing of the DBR is based on a conglomeration of engineering design 

models that is not representative of the version of the radar installed on 

the ship, which further increases the likelihood that shipboard testing will 

require more time and resources than planned.

Shipboard testing of components to the advanced weapons elevators 

began in February 2012, but testing has not proceeded as planned. As of 

August 2014, the shipbuilder had operated 4 of the ship’s 11 weapons 

elevators, but testing delays have occurred due to faulty components and 

software integration challenges, and premature corrosion of electrical 

parts. The shipbuilder has increased the amount of construction labor 

allocated to the weapons elevators in an effort to recover from these 

schedule delays.

CVN 78’s schedule has limited ability to absorb the additional delays that 

appear likely, given the remaining construction and testing risks. A delay 

in the ship’s planned March 2016 delivery could result in a breach of 

DOD’s acquisition policy. Among other things, a breach would require the 

CVN 78 program manager to seek approval from the Navy and DOD to 

further revise the schedule. Shipbuilder officials maintain that they can 

DBR

Advanced Weapons Elevators
Page 18 GAO-15-22 Ford Class Aircraft Carrier

meet the ship’s revised delivery date, but acknowledge that the revised 

shipboard test plan is proving challenging because of delays associated 

with construction and concurrent developmental testing of key 

technologies discussed above. To regain lost schedule, the shipbuilder 

may choose to expend additional labor hours by paying workers overtime 

or hiring subcontracted labor; however, these actions would result in 

additional and unanticipated costs.

The CVN 78 program’s costs are approaching the legislative cost cap 

budget of $12.9 billion, but further cost growth is likely based on 

performance to date as well as ongoing construction, shipboard testing 

and technology development risks. To improve the likelihood of meeting 

the March 2016 delivery date and to compensate for potential cost 

growth, the Navy is (1) removing work from the scope of the construction 

contract and (2) deferring purchase and installation of some missionrelated systems provided by the government to the shipbuilder until after 

ship delivery. Consequently, completion of CVN 78 may not occur until 

years later than initially planned.

According to the CVN 78 program office, this approach creates a funding 

reserve to cover cost growth due to unknowns in the shipboard test 

program, particularly given that many of the ship’s systems are being 

operated and tested for the first time in a maritime environment. However, 

the value of the deferred work may not be adequate to fully fund all 

remaining costs needed to produce an operational ship. Table 2 shows 

the type of work being deferred from the current plan to post-delivery, and 

the program office’s estimated value of the work. As of September 2014, 

program officials said they are still negotiating with the shipbuilder on the 

dollar value of construction labor that it plans to descope from CVN 78’s 

construction contract.

Navy Deferring Work to 

Post-Delivery, but Funding 

Not Sufficient to Cover All 

Likely Cost Growth
Page 19 GAO-15-22 Ford Class Aircraft Carrier

Table 2: CVN 78 Planned Work Deferred to Post-Delivery to Create Funding Reserve 

Types of deferrals Status Estimated value

Deferred ship construction scope 367 compartments were removed from the 

scope of the construction contract, such as 

air wing habitability compartments. Deferred 

scope of work consists of deck coverings, 

final paint, hardware and furniture 

installation, and some electrical work. 

$36 million

Deferred correction of deficiencies Correction of certain defects, such as repairs 

to the magazine sprinkling system. 

$32 million

Deferred installation of mission-related 

systems

Installation of certain systems, including 

some shipboard network equipment and a 

next generation maritime military satellite 

communications terminal.

Approximately $28 million for the hull, 

mechanical, and electrical and aviation 

items

Total estimated value of deferred work Approximately $96 million

Source: U.S. Navy. | GAO-15-22

The program office plans to use this approximately $96 million reserve in 

the likely event there is additional cost growth above the $12.9 billion 

budgeted cost cap. However, given the on-going construction and testing 

risks previously discussed, this cash reserve is unlikely to be adequate to 

cover the entire expected cost growth of the ship. As shown in Table 3, 

the shipbuilder, CVN 78 program office, and the Naval Sea Systems 

Command Cost Engineering Office (the Navy’s cost estimators), are all 

forecasting a cost overrun at ship completion ranging from $780 million to 

$988 million. According to shipbuilder and CVN 78 program office 

estimates, the program will meet the $12.9 billion legislated cost cap and 

has sufficient funds to cover the anticipated cost overruns. If, however, 

costs increase according to the Naval Sea Systems Command Cost 

Engineering Office’s estimate or higher, additional funding will be needed 

above the cash reserve amount.
Page 20 GAO-15-22 Ford Class Aircraft Carrier

Table 3: CVN 78 Construction Contract Estimated Costs at Ship Completion

Dollars (in millions)

CVN 78 

shipbuilder 

estimate

(April 2014)

CVN 78 

program 

office estimate

(June 2014)

Naval Sea 

Systems Command 

Cost Engineering 

office estimate

(March 2014)

Current construction labor cost estimate at 

ship completion 

$4,537 $4,641 $4,745

Estimated construction labor cost overrun at 

ship completion

$780 $884 $988

Estimated CVN 78 end cost including 

estimated cost overruns

$12,783 a $12,887 $12,991

Estimated CVN 78 end cost less the 

estimated value of deferred work ($96 million)

$12,687 $12,791 $12,895

Sources: GAO analysis based on Navy and Shipbuilder data. | GAO-15-22

Note: The current legislative cost cap is $12.9 billion.

a

The estimates provided take into account only the effects of estimated cost overruns of construction 

labor and does not include other programmatic and construction costs included in the ship’s end cost. 

End cost refers to the appropriated funds that are available for the construction of the ship.

Further, cost and analyses offices within the Office of the Secretary of 

Defense have tracked the ship’s costs for several years and report that 

without significant improvements in the program’s overall cost 

performance, CVN 78’s total costs will likely exceed the program’s $12.9 

billion cost cap by approximately $300 million to $800 million.10

To fund work deferred to the post-delivery period in the event of 

unbudgeted cost growth, the CVN 78 program office is considering using 

If costs 

fall within this range, the Navy will need to either defer additional work to 

post-delivery or request funding under the ship’s procurement budget line 

above the $12.9 billion cap. Under the cost cap legislation, such an action 

would require prior congressional approval.

 10The range of cost growth is a compilation of estimates by various offices within the 

Office of the Secretary of Defense, including (1) Office of the Secretary of Defense, Office 

of Performance Assessments and Root Cause Analyses, CVN 78 earned value 

management assessment (June 2014); (2) Office of the Secretary of Defense, Defense 

Acquisition Executive Summary Program, CVN 78 cost assessment (2013); and (3) Office 

of the Secretary of Defense, Director of Cost Assessment & Program Evaluation, CVN 78 

cost assessment (2011).
Page 21 GAO-15-22 Ford Class Aircraft Carrier

funding from the Outfitting and Post-Delivery budget account. Program 

officials noted that other Navy shipbuilding programs have also used 

funds from the outfitting and post-delivery accounts to complete deferred 

construction work. Navy officials view this as an approach to managing 

the cost cap. At the same time, however, because the Navy considers 

post-delivery and outfitting activities as “non end-cost” items—meaning 

that funds from this account are not included when calculating the total 

construction cost of the ship—visibility into the ship’s true construction 

cost is obscured.11

CVN 78 will not demonstrate its required capabilities prior to deployment

because it cannot achieve certain key requirements according to its 

current test schedule. Specifically, the ship will not have demonstrated its 

increased sortie generation rate (SGR), due to low reliability levels of key 

aircraft launch and recovery systems, and required reductions in 

personnel remain at risk. The Navy expected both of these requirements 

to contribute to greater capability and lower costs than Nimitz-class 

carriers. Further, the ship is likely to face operational shortfalls resulting 

from a ship design that restricts accommodations. Finally, tight time 

frames for post-delivery testing of key systems due to aforementioned 

technology development delays could result in the ship deploying without 

fully tested systems if deployment dates remain unchanged.

The Navy’s business case for acquiring the Ford-class depended on 

significantly improved capabilities over legacy Nimitz-class carriers, 

specifically an increased SGR and reduced manning profile. The Navy 

anticipated that these capabilities would reduce total ownership costs for 

the ship. Our September 2013 report found several shortfalls in the 

Navy’s projections for meeting the SGR and reduced manning 

requirements, and our current work found continuing problems in these 

areas.

The Navy used the SGR requirement to help guide ship design, but CVN 

78 will not be able to fully demonstrate this capability before the ship is 

 11 In the Fiscal Year 2015 President’s Budget submission, the Navy did not include 

funding for outfitting and post delivery activities in the CVN 78 end cost estimate. CVN 

78’s current cost cap is set to the ship’s end cost estimate.

CVN 78 Will Not 

Demonstrate Key

Capabilities Prior to 

Deployment and 

Faces Continued 

Post-Delivery Testing 

Challenges

CVN 78 Will Not

Demonstrate all Key 

Capabilities Prior to 

Deployment

Sortie Generation Rate
Page 22 GAO-15-22 Ford Class Aircraft Carrier

deployment ready. As shown in table 4, CVN 78’s SGR requirements are 

higher than the demonstrated performance of the Nimitz-class.

Table 4: Nimitz-Class and Ford-Class Sortie Generation Rates

Nimitz-class demonstrated SGR Ford-class required SGR a

Sustained 120 b 160

Surge 240 c 270 d

Sources: DOT&E and U.S. Navy. | GAO-15-22

Notes:

a

The Nimitz-class shipbuilding program did not have a sortie generation requirement, but DOT&E 

identified its SGR capability.

b

The Ford-class sustained sortie rate requirement is an average sortie rate achieved during 12 hours 

of launching per day sustained over 30 days (26 flying and 4 non-flying days).

c

The Ford-class surge requirement is an average sortie rate achieved during 24-hour operations over 

4 continuous days.

d

The Nimitz class was not required to demonstrate surge capabilities.

The increased SGR requirement for the Ford-class reflected earlier DOD 

operational plans to mount campaigns in two theaters simultaneously. 

Under this scenario, a high SGR was essential to quickly achieving 

warfighting objectives, but according to Navy officials, this requirement is 

no longer reflective of current operational plans.

The Navy plans to demonstrate CVN 78’s SGR requirement using a 

modeling and simulation program in 2019, near the end of CVN 78’s 

IOT&E period. As the modeling and simulation program continues to 

mature and develop, the Navy, according to the TEMP, plans to collect 

data from a sustained and surge flight operation and then incorporate 

these data into the model. Once this is completed and the model is 

accredited, the Navy will subsequently run a simulation of the full SGR 

mission.

Current runs of the model indicate the ship can meet the required 

sustained and surge sortie rates, which Navy and shipbuilding officials 

involved with the modeling and simulation effort explained is primarily due 

to flight deck redesign and not the ship’s new aircraft launch and recovery 

technologies. However, ongoing issues with the development of EMALS 

and AAG are resulting in low levels of system reliability that will be a 

barrier to achieving required SGR rates once the model is populated with 

actual data from these technologies. System reliability is critical to the

carrier’s ability to meet the SGR requirement and is measured in terms of 
Page 23 GAO-15-22 Ford Class Aircraft Carrier

mean cycles between critical failures, or the average number of times 

each system launches or recovers aircraft before experiencing a failure.12

Table 5: Current Reliability Rates for EMALS and AAG Systems

As shown in table 5, the most recent available metrics from January 2014 

show that EMALS and AAG show such low reliability rates that it is 

unlikely that these systems will achieve reliability rates needed to support 

SGR requirements before the demonstration event in 2019 or for years 

after the ship is deployment ready.

System Required reliability a Current reliability b Current reliability percentage

EMALS – 4 of 4 catapults operating 1,800 cycles not available not available

EMALS – 3 of 4 catapults operating 4,166 cycles 240 cycles 5.8

AAG 16,500 cycles 20 cycles 0.01 

Source: GAO analysis of DOT&E and U.S. Navy data. | GAO-15-22

Notes:

a

EMALS has two reliability metrics, depending on the number of the system’s catapults that are 

operating.

b

The Navy measures reliability in terms of mean cycles between critical failures.

As a result of these systems’ low reliability, we questioned the Navy’s 

sortie generation requirement in our September 2013 report and 

recommended that the Navy re-examine whether it should maintain this 

requirement or modify it—seeking requirements relief from the Joint 

Requirements Oversight Council if the Navy found it was not operationally 

necessary. DOT&E has also raised questions about the need for 

increased sortie generation. DOT&E analyzed past aircraft carrier 

operations in major conflicts and reported that the CVN 78 SGR 

requirement is well above historical levels. In its January 2014 annual 

report, DOT&E cited the poor reliability of critical systems, such as 

EMALS and AAG, noting that performance of these systems could cause 

a series of delays during flight operations that could make the ship more 

vulnerable to attack. DOT&E plans to assess CVN 78 performance during 

IOT&E by comparing its demonstrated SGR to the demonstrated 

performance of the Nimitz-class carriers. Although the carrier would not 

 12Different types of “failure” count against systems’ reliability growth, including errors in 

software, hardware problems, and any other issue that causes EMALS or AAG to fail to 

launch or arrest a real or simulated aircraft.
Page 24 GAO-15-22 Ford Class Aircraft Carrier

meet its required capability, DOT&E stated that a demonstrated SGR less 

than the CVN 78 requirement, but equal to or greater than the 

performance of the Nimitz-class, could potentially be acceptable. 

However, the Navy would still be required to obtain approval from the 

Joint Requirements Oversight Council to lower the requirement.

Another CVN 78 key performance requirement is a reduced ship’s force, 

relative to the Nimitz-class, with the goal of lowering total operational 

costs. “Ship’s force” refers to all personnel aboard a carrier except those 

designated as part of the air wing and in certain support or other assigned

roles. The Navy’s reduced manning requirement for CVN 78 is a ship’s 

force that has 500 to 900 fewer personnel than Nimitz-class carriers. 

Table 6 compares manning totals for the Nimitz class with Ford-class 

manning projections.

Table 6: Ship’s Manning Totals for Nimitz- and Ford-Class Aircraft Carriers as of 

September 2014

Nimitz-class

(actual)

Ford-class required 

reduction range

CVN 78 projected 

manning

Ship’s force 3,291 2,391-2,791 2,628

Source: U.S. Navy. | GAO-15-22

Note: While ship’s force is the number set forth in the carrier requirements, the number of CVN 78 air 

wing and other embarked personnel is also projected to be lower for the Ford class.

As of September 2014, the Navy projects a 663-sailor reduction in the 

ship’s force, which represents a 163-person margin over the minimum 

required reduction of 500 personnel. But our analysis found that the 

carrier is not likely to achieve this level of reduction and still meet its 

intended capabilities. Key factors contributing to the difficulties in meeting 

the reduced manning requirement include the following:

• Poor reliability of key systems—including EMALS and AAG—and 

sailors’ limited experience in operating these systems in a maritime 

environment, which may require additional personnel. For example, 

AAG will require additional maintenance than planned due to changes 

to the system’s hydraulic braking system, according to Navy officials.

• Additional ship’s force personnel will be needed to meet the surge 

SGR of 270 sorties per day, based on the Navy’s most recent 

operational test and evaluation force assessment.

Reduced Manning and 

Habitability Requirements
Page 25 GAO-15-22 Ford Class Aircraft Carrier

• Additional operational personnel, particularly in the supply 

department, will likely be needed on the ship, according to the CVN 

78 pre-commissioning unit—the crew assigned to the ship while it is 

under construction.13

These factors are likely to increase the total number of personnel on CVN 

78.

As a reflection of the Navy’s confidence in reducing manning on the Ford 

class, the ships were designed with significantly fewer berths (4,660) as 

compared to the Nimitz class to accommodate the ship’s force, air wing, 

and all other embarked personnel. However, now the number of berthings 

is fixed and the ship cannot accommodate additional manpower without 

significant design changes. Further, the Navy requires new ship designs, 

including CVN 78, to provide a habitability margin—a percentage of extra 

berths above the projected ship’s force to accommodate potential 

personnel growth throughout the service life of the ship. This margin 

includes berths as well as support services for personnel aboard the ship, 

such as food and sanitation facilities. Given current manning projections 

and available accommodations, as shown in table 7, the Navy recognizes 

that CVN 78 falls well short of meeting its required habitability margin. 

This required margin is equivalent to 10 percent of the ship’s force or 263 

berths. As a result, the CVN 78 program office plans to request a waiver 

for this requirement from the Chief of Naval Operations.

Table 7: CVN 78 Current Projected Manning and Available Accommodations

Personnel on board

Available 

accommodations Remaining berths Required margin

CVN 78 projected total force 4,533 4,660 a 127

Estimated personnel temporarily on 263

board CVN 78

63-122 127 b 5-64

Source: U.S. Navy, Commander, Operational Test and Evaluation Force. | GAO-15-22

Notes:

a

 13The CNV 78 pre-commissioning unit, Naval Air Systems Command, and the Navy’s 

Manpower Analysis Center have all identified changes to the ship’s manning profile, 

according to Navy officials. Such proposals are directed to the CVN 78 program office for 

review and approval.

Total projected force on CVN 78 equals the ship’s force (2,628) plus the air wing and other 

embarked personnel (1,905).
Page 26 GAO-15-22 Ford Class Aircraft Carrier

b

The number of personnel temporarily on board the ship varies but will remain within a minimum 

estimated range. Such personnel may consist of temporary detachments, distinguished visitors, and 

trainers.

In fact, the carrier currently has so few extra berths that it can only 

accommodate a slight increase in personnel. And the Navy’s estimated 

accommodation needs do not take into account the likelihood that 

additional personnel will be needed above and beyond the Navy’s current 

projected ship’s force (2,628 sailors). In addition, spare berthing is also 

used for personnel temporarily assigned to the ship, such as inspectors, 

trainers, or visitors. If CVN 78 must enlarge its ship’s force as well as 

accommodate personnel temporarily assigned to the ship, it is likely that 

no actual accommodations would be available. Consequently, CVN 78 

must be “manning neutral,” so that personnel coming aboard must be 

matched by personnel debarking, in accordance with the ship’s 

operational needs and personnel specialties.

This situation is further exacerbated because the Navy will need to 

operate CVN 78 with a greater percentage of its crew than the Nimitz 

class. According to the Navy’s most recent (2011) analysis of manning 

options for CVN 78, staffing the ship at less than 100 percent; that is, with 

fewer personnel than the current projected total force of 4,533, had an 

adverse effect on quality of life at sea because the crew had to perform 

additional duties or remain on duty for longer periods. This manning 

analysis also found that reducing staffing to 85 percent—which is typical 

for a Nimitz-class ship—compromised ship operations. The analysis 

concluded that careful management of personnel specializations will be 

needed and recommended cross-training personnel in key departments 

to minimize the risk to ship operations. Future costs for the ship could 

also increase if the Navy must eventually convert spaces to 

accommodate additional berthing.

The Navy has further compressed post-delivery plans to test CVN 78’s 

capabilities and increased concurrency between test phases since our 

last report in September 2013. This means that there will be less time for 

operational testing, which is the Navy’s opportunity to test and evaluate 

the ship against realistic conditions before its first deployment.

Changes to Post-Delivery 

Test Plans Coupled with 

Key Systems’

Developmental Delays 

Could Result in CVN 78 

Deploying Without 

FullyTested Systems
Page 27 GAO-15-22 Ford Class Aircraft Carrier

As we reported in September 2013, the Navy added in 2012 an additional 

integration test period to the CVN 78 TEMP as recommended by the 

Deputy Assistant Secretary of Defense for DT&E and the Director, 

DOT&E. This integration testing is important because it allows ship 

systems still in development—such as EMALS and AAG—to be tested 

together in their shipboard configuration. In our report, we recommended 

that the Navy adjust its planned post-delivery test schedule to complete 

this integration testing before commencing IOT&E.14

Since our last report, the Navy doubled the length of the new integration 

testing period, but clarified that this testing also includes ongoing 

developmental testing of key systems, assessment of prior test results, 

and repairs or changes to fix deficiencies identified in earlier test periods. 

In fact, the Navy plans to conduct well over a dozen certifications and 

major ship test events during this period. For example, it plans to conduct 

a total ship survivability trial—testing CVN 78’s capability to recover from 

a casualty situation and the extent of mission degradation in a realistic 

operational combat environment. If the Navy discovers significant issues 

during testing, or events cause additional delays to testing, it will have to 

choose whether deploy a ship without having fully tested systems or 

delay deployment until testing is complete.

The Navy did not 

agree and overlap between integration testing and IOT&E remains and is 

now longer. This situation constrains the Navy’s ability to discover and 

resolve problems during the integration testing phase and before 

beginning IOT&E, which further limits opportunities for the Navy to 

resolve problems discovered during testing and risks additional discovery 

during IOT&E. In addition, the Navy and DOD still have not resolved 

whether CVN 78 will be required to conduct the Full Ship Shock Trial for 

the Ford-class. As we reported last year, the program office deferred this 

testing to the follow-on ship, CVN 79; a strategy that did not receive 

DOT&E approval. According to program officials, final determination of 

whether the trial will be conducted on CVN 78 or CVN 79 will be made by 

the Under Secretary of Defense for Acquisition, Technology, and 

Logistics near the end of 2014.

To help manage this risk, the Navy plans to divide operational testing into 

two phases. According to program officials, this approach will allow 

developmental testing, deficiency correction, and integration testing to 

 14GAO-13-396.

Revised Test Plan Provides 

Less Time for Operational 

Testing
Page 28 GAO-15-22 Ford Class Aircraft Carrier

continue on the mission-related systems installed after ship delivery and 

on those systems that are not required to support the first phase of 

operational testing. The first phase of operational testing will focus on 

testing the ship’s ability to accomplish basic tasks by stressing the ship’s 

crew, aviation facilities, and the combat and mission-related systems 

installed prior to delivery under realistic peacetime operating conditions. 

The second phase of operational testing incorporates embarked strike 

groups and other detachments that support operations and tests CVN 

78’s ability to conduct major combat operations, particularly the tactical 

employment of the air wing in simulated joint, allied, coalition, and strike 

group environments. The goal is to stress CVN 78’s aviation, combat and

mission-related systems, particularly those systems installed after ship 

delivery. Figure 4 shows these changes to the CVN 78 post-delivery test 

schedule.

Figure 4: Changes to CVN 78 Post-Delivery Test Schedule Since 2013
Page 29 GAO-15-22 Ford Class Aircraft Carrier

The current test schedule is optimistic, with little room for delays that may 

occur as a result of issues identified during the integration and operational 

test phases. Even if the Navy meets the current schedule, it will not 

complete all necessary testing in the time remaining before the ship is 

deployment ready. This issue will be further exacerbated if land-based or 

shipboard testing discussed earlier reveals significant problems with the 

ship’s systems, as the time needed to address such issues may interfere 

with the ship’s integration and operational test phases. Navy officials 

responsible for operational testing stated that they will only conduct 

operational testing when shipboard systems are deemed ready. However, 

neither the CVN 78 program office nor the Navy’s operational test 

personnel know how often system testing can be deferred before 

affecting the schedule for operational testing on other systems, 

particularly given the interoperation of systems on a carrier. For example, 

the DBR supports ship combat systems and simultaneously conducts air 

traffic control. If it is not ready to support flight operations in the first 

segment of IOT&E, combat operations in the second segment that also 

rely on the radar are likely to be affected.

To meet the $11.5 billion legislative cost cap for CVN 79, the Navy is 

assuming the shipbuilder will make efficiency gains in construction that 

are unprecedented for aircraft carriers and has proposed a revised 

acquisition strategy for the ship. With shipbuilder prices for CVN 79 

growing beyond the Navy’s expectations, the Navy extended the 

construction preparation (CP) contract to allow additional time for the 

shipbuilder to reduce cost risks prior to awarding a construction contract. 

In addition, the Navy’s proposed revision to the ship’s acquisition strategy 

would reduce a significant amount of work needed to make the ship fully 

operational until after ship delivery. While this strategy may enable the 

Navy to initially achieve the cost cap and is allowed under the cost cap 

provision without the need for congressional approval, it also results in 

transferring the costs of planned capability upgrades—previously included 

in the CVN 79 baseline—to future maintenance periods to be paid 

through other (non-CVN 79 shipbuilding) accounts.

Navy’s Ability to Meet 

CVN 79 Cost Cap 

Predicated on 

Ambitious Efficiency 

Gains and Deferring 

Work until after Ship 

Delivery
Page 30 GAO-15-22 Ford Class Aircraft Carrier

The Navy’s $11.5 billion cost estimate for CVN 79 is underpinned by the 

assumption that the shipbuilder will significantly lower construction costs 

through realizing efficiency gains. While performance to date has been 

better than that of CVN 78, early indicators suggest that the Navy is 

unlikely to realize anticipated efficiencies at the level necessary to meet 

cost and labor hour reduction goals. In its May 2013 report to Congress 

on CVN 79 program management and cost control measures, the Navy 

stated that 15-25 percent fewer labor hours (about 7 million to 12 million 

hours) will be needed to construct CVN 79 as compared to CVN 78. 

Although the Navy and shipbuilder continue to look for labor hour 

reduction opportunities, thus far, shipbuilder representatives have 

identified improvements that they stated will save about 800,000 labor 

hours. As we identified in September 2013, many of the proposed labor 

hour reductions are attributed to lessons learned during construction of 

CVN 78 and revising CVN 79’s build plan to perform pre-outfitting work 

earlier in the build process. This is because work completed earlier in the 

build process, such as in a shop environment, is more efficient and less 

costly than work done later on the ship where spaces are more difficult to 

maneuver within.15

Construction of CVN 79 is still in the initial stages, and most of the 

projected cost savings and labor hour reduction opportunities are in 

structural units and parts of the ship that are not yet under construction. 

However, there are indications that achieving the anticipated 7 million to 

12 million hour reduction goal will be challenging. As of the end of March 

2014, the shipbuilder had completed fabrication of 205 structural units—

about 18 percent of the ship’s total—with over a hundred more in various 

stages of fabrication. Although the ship is still in the early stages of 

construction, the cumulative labor hour reductions for the completed units 

fell short of the Navy and shipbuilder’s expected reduction by about 3.5 

percent, as shown in figure 5. Program officials stated that while the 

cumulative reduction has not yielded the expected results, a number of 

the structural units were completed prior to the shipbuilder’s 

In addition, the shipbuilder’s revised build plan 

consolidates and increases the size of superlifts—fabricated units and 

block assemblies that are grouped together and lifted into the dry dock—

to form larger sections of the ship. Other notable labor hour savings 

initiatives involve increased use of new welding technologies and 

improved cable installation techniques.

 15We discuss this issue further in GAO-13-396.

Current and Historical

Performance Suggests 

Shipbuilder Is Unlikely

to Achieve Efficiency 

Gains Needed to 

Realize Cost Goals
Page 31 GAO-15-22 Ford Class Aircraft Carrier

implementation of labor saving initiatives. They further added that 

completed units, more representative of remaining work, have yielded 

approximately a 16 percent reduction in labor hours for fitters and 

welders.

Figure 5: Comparison of the Planned and Actual Number of Labor Hours Required 

to Complete Advanced Construction Work for the First 205 Structural Units on CVN 

79

Note: The data above represents approximately 18 percent of the ship’s 1,128 structural units.

In addition, the shipbuilder’s scheduling processes may further limit 

insight into the effectiveness of these initiatives. We evaluated the 

shipbuilder’s processes and tools used to plan and schedule work against 

GAO’s best practices in scheduling.16

 16GAO, GAO Schedule Assessment Guide: Best Practices for Project Schedules, 

We identified scheduling practices 

that may interfere with the shipbuilder’s and Navy’s ability to accurately 

manage and monitor the construction schedule and the way in which the 

shipbuilder allocates labor, equipment, and material resources. In 

particular, the shipbuilder’s enterprise resource management system 

(which tracks use of labor and materials) and master construction 

schedule (which tracks the time required to complete work packages) are 

stand-alone, independent systems, which means that changes in one 

system are not automatically updated in the other. Consequently, the 

shipbuilder—and subsequently the government—lacks real time insight in 

to whether resources are being used according to schedule. This lack of 

GAO-12-120G (Washington, D.C.: May 2012). 
Page 32 GAO-15-22 Ford Class Aircraft Carrier

insight limits management’s ability to effectively respond to delays, thus 

driving inefficiencies into the build process, and also limits the 

shipbuilder’s ability to take advantage of opportunities when work is 

completed ahead of schedule. Although the shipyard is transitioning to a 

new scheduling software program, the shipbuilder does not plan to revise 

its existing scheduling and resource management process to enable 

better insight for CVN 79. The legacy scheduling system the shipbuilder 

employed did not allow for data to be exported to the government. The 

new scheduling system has the ability to allow for increased Navy 

oversight since the data are exportable, thus allowing, among other 

things, the ability to independently examine the effects of schedule 

slippage or realism of the shipbuilder’s estimated labor needs. According 

to program officials, the Navy intends to incorporate this data as a 

deliverable item in the CVN 79 construction contract.

Even with the shipbuilder’s improvements, reducing construction of CVN 

79 by approximately 7 million to 12 million labor hours as compared to 

CVN 78 would be unprecedented in aircraft carrier construction. As 

shown in table 8, with each successive aircraft carrier build, the number 

of labor hours needed to complete construction has, at most, decreased 

by 9.3 percent as compared to the previous ship (with CVN 69 compared 

to CVN 68 accounting for the largest percentage decrease). Although 

CVN 78 and CVN 79 are similar to CVN 68 and CVN 69 in that there is a 

first-to-second ship of a class transition, in most instances sizeable labor 

hour reductions only occurred as a result of constructing two aircraft 

carriers though a single contract, rather than acquiring the ships 

individually through separate construction contracts as is the case with 

the Ford class.
Page 33 GAO-15-22 Ford Class Aircraft Carrier

Table 8: Number of Construction Labor Hours Required to Build Aircraft Carriers 

Hull

Total labor 

hours (m)

Labor hour 

change (m)

Percent 

change

Type of 

ship buy

Construction 

contract award date

CVN 68 (Nimitz-class) 34.4 0 0 Single March 1967

CVN 69 31.2 -3.2 -9.30 Single June 1970

CVN 70 33.7 2.5 8.01 Single April 1974

CVN 71 40.3 6.6 19.58 Single September 1980

CVN 72 38.0 -2.3 -5.71 Two December 1982

CVN 73 36.2 -1.8 -4.74 Two December 1982

CVN 74 33.2 -3.0 -8.29 Two July 1988

CVN 75 34.4 1.2 3.61 Two July 1988

CVN 76 39.2 4.8 13.95 Single December 1994

CVN 77 45.5 6.3 16.07 Single January 2001

CVN 78

(Ford class)

a 48.5 0 0 Single September 2008

CVN 79 41.2 to 36.4 b -7.3 to -12.1 -15 to - 25 (target) Single December 2014 

(anticipated)

Source: GAO analysis of U.S. Navy data. | GAO-15-22

a

CVN 78 labor hours are based on the program office’s estimated construction labor hours at 

completion and do not include non-recurring labor hours, such as design engineering.

b

Total hours for CVN 79 and the labor hour change is stated as a range of labor hours based on a 15-

25 percent reduction from the program office’s estimated construction labor hours at ship completion.

The Navy planned to award the CVN 79 detail design and construction 

contract in late fiscal year 2013, but subsequently delayed the award and 

extended the construction preparation contract because negotiations with 

the shipbuilder were taking longer than the Navy anticipated. As a result, 

the Navy now intends to award the detail and design contract at the end 

of the first quarter of fiscal year 2015, which program officials stated 

allows sufficient time to negotiate prices and demonstrate cost reductions 

and process improvements that will lead to lowering CVN 79’s 

construction costs. In the meantime, more work is now being completed 

under the construction preparation contract, with almost 60 percent of the 

ship’s total structural units under the CP contract, as shown in table 9 

below. According to program officials, this work accounts for about 20 

percent of the ship’s overall construction effort.

Navy’s Revised Acquisition 

Strategy May Create 

Near-Term Cost Savings 

but Leads to Uncertainties 

in Final Ship Costs
Page 34 GAO-15-22 Ford Class Aircraft Carrier

Table 9: Scope of Advanced Construction Work under CVN 79 Construction Preparation Contract Extension Strategy

Planned detail design 

and construction 

contract award date

Overall construction 

preparation contract value

Number of structural 

units under contract 

Percent of total 

structural units

Acquisition strategy (as 

of September 2013)

September 2013 $2 billion 311 28

Revised acquisition 

strategy (March 2014)

December 2014 $3.3 billion 654 58

Source: U.S. Navy data. | GAO-15-22

By extending the CP contract, the program office expects that it will 

reduce material costs by 10-20 percent from CVN 78 and prevent late 

deliveries of items, such as valves, that led to significant material 

shortfalls and out-of-sequence construction work and contributed to that 

ship’s cost growth, as we noted in our September 2013 report. Under the 

Navy’s material procurement strategy, approximately 95 percent of CVN 

79’s material to be procured by the shipbuilder was under contract as of 

September 2014.

In addition, the Navy recently completed an affordability and capability 

review of CVN 79 in an effort to further reduce construction costs and 

shipbuilding requirements to ensure that it could meet the $11.5 billion 

cost cap—which Navy officials stated was otherwise unachievable. In 

response, the Navy plans to (1) institute cost savings measures by 

reducing some work and equipment; (2) revise the acquisition strategy to 

shift more work to post-delivery—including installation of mission 

systems—while still meeting statutory requirements for deploying CVN 

79; and (3) deliver the ship with the same baseline capability as CVN 

78—postponing a number of planned mission system upgrades and 

modernizations until future maintenance periods. Program officials told us 

they plan to seek approval to initiate these changes at CVN 79’s 

upcoming program review with the Office of the Secretary of Defense,

which is now scheduled for December 2014, in advance of the detail 

design and construction contract award.

Most notably, the Navy plans to depart from its planned installation of 

DBR on CVN 79, in favor of an alternative radar system, which it expects 

to provide a better technological solution at a lower cost. By seeking 
Page 35 GAO-15-22 Ford Class Aircraft Carrier

competitively awarded offers, Navy officials anticipate realizing savings of 

about $180 million for CVN 79.17

Other cost savings measures are wide ranging and include

Final determination of CVN 79’s radar 

solution is not scheduled to occur until after March 2015, at least 3 

months after the estimated detail design and construction contract award. 

It is around this time that the program office anticipates it will solicit 

proposals from prospective bidders. Program officials told us that they 

intend to work within the current design parameters of the ship’s island, 

which they say would limit extensive redesign and reconfiguration work to 

accommodate the new radar. While the extent of redesign work is 

unknown, such a change will still result in additional ship construction 

costs, which could offset the Navy’s estimate of DBR savings.

• eliminating one of the four AAG units planned for the ship (Nimitzclass carriers have 3 operational arresting units);

• eliminating redundant equipment requirements such as the ship’s 

emergency power unit for the steering gear and spare low pressure 

air compressors; and

• modifying test requirements for certain mechanical systems.

In addition to these cost savings measures, the CVN 79 program office is 

proposing a two-phased approach for ship construction and delivery. 

Although the details of the Navy’s revised acquisition strategy continue to 

evolve, the basic premise is that delivery by the shipbuilder will consist of 

only the hull, mechanical and electrical aspects of the ship (referred to as 

phase I), followed by completion of remaining construction work and 

installation of the warfare and communications systems during the postdelivery period (referred to as phase II). At ship delivery, CVN 79 will 

have its full propulsion capability, as well as the core systems for safe 

navigation and crew safety; and necessary equipment to demonstrate 

flight deck operations, such as EMALS and AAG. All remaining 

construction work, primarily consisting of the procurement and installation 

of several warfare and communications systems, will be completed post-

 17The CVN 78 program acquired two volume search radars—one initially intended for 

installation on DDG 1000—after the DDG 1000 program experienced a unit cost breach

and removed the volume search radar from the baseline design to save costs that it 

planned to install on CVN 78 and CVN 79. The Navy had planned to purchase the 

multifunction radar for CVN 79 and eventually another shipset for CVN 80.
Page 36 GAO-15-22 Ford Class Aircraft Carrier

delivery. The program office currently plans to maintain the ship’s 2023 

delivery date, but as shown in figure 6, the revised strategy extends the 

acquisition schedule and the ship’s deployment ready date by about 15 

months. Program officials stated that despite this delay in the schedule it 

would still meet the statutorily required minimum number of operational 

aircraft carriers because CVN 79 would still be deployment ready shortly 

after USS Nimitz (CVN 68) is currently slated to retire in fiscal year 2025.

Figure 6: Comparison of CVN 79’s September 2013 and October 2014 Revised Acquisition Schedules

As currently planned, the revised strategy, by design, will result in a less 

capable and less complete ship at delivery. According to CVN 79 program 

officials, reducing the shipbuilder’s scope of work, along with a reduction 

in some construction requirements, will lead to negotiating more favorable 

pricing of the detail design and construction contract. In addition, they 

noted that maintaining the current delivery schedule will deliberately allow 

for a slower pace of construction, thus potentially requiring less use of 

overtime or leased labor. Further, program officials state that delaying 

installation of warfare and communications systems—such as those 
Page 37 GAO-15-22 Ford Class Aircraft Carrier

systems with high obsolescence risk—can potentially limit procuring 

equipment that has been surpassed by technology advances by the time 

the ship begins phase II of the Navy’s revised strategy. Finally, Navy 

officials believe that adopting this approach will enable the program to 

reduce costs by introducing additional competition for the ship’s systems 

and installation work after delivery.

While the two-phased strategy may enable the program to initially stay 

within the legislated cost cap, it will transfer the costs of a number of 

known capability upgrades previously included in the CVN 79 baseline to 

other (non-CVN 79 shipbuilding) accounts.18

Table 10: Planned CVN 79 System Upgrades and Modernizations Deferred Until 

Future Maintenance Periods

As shown in table 10, the 

program office plans to defer installation of a number of systems to future 

maintenance periods.

MK 53 Decoy Launching System

Surface Ship Torpedo Defense System

Surface Electronic Warfare Improvement Program 3

Joint Strike Fighter-related modifications including Joint Precision Approach and Landing 

System and Autonomic Logistics Information System

MK 38 Machine Gun System

Source: U.S. Navy data. | GAO-15-22

Based on current estimates, the value of the deferred systems is about 

$200 million - $250 million. Moreover, this strategy will result in deferring 

installation of systems and equipment needed to accommodate the 

carrier variant of the Joint Strike Fighter aircraft (F-35C) until fiscal year 

2027 at the earliest.

Further, should construction costs grow above estimates, the Navy may 

subsequently choose to use funding intended for phase II work to pay for 

construction cost increases without increasing the cost cap. The Navy 

would have this option because additional funding through post delivery 

 18 For shipbuilding programs, construction is generally funded through the Shipbuilding 

and Conversion, Navy budget account. The Navy intends on funding CVN 79’s capability 

upgrades through the Other Procurement, Navy budget account.
Page 38 GAO-15-22 Ford Class Aircraft Carrier

budget accounts are not included in calculating the ship’s end cost, 

similar to the aforementioned situation with CVN 78. According to Navy 

officials, this approach allows the program to manage the cost cap 

without seeking statutory authority.

Constructing and delivering an aircraft carrier is a complex undertaking. 

The Ford-class program, in particular, has faced a steep challenge due to 

the development, installation and integration of numerous technologies—

coupled with optimistic budget and schedule. The Ford class is intended 

to provide significant operational advantages over the Nimitz class. 

However, with about 80 percent of the lead ship constructed, the program 

continues to struggle with construction inefficiencies, development issues, 

testing delays, and reliability shortfalls. These are issues that have been 

mounting for a number of years. Now, as the program embarks on its 

most challenging phase—shipboard testing—additional cost increases in 

excess of the $2.3 billion since 2009 appear likely. To manage this risk, 

the Navy is creating a cost buffer by deferring construction work and 

installation of mission-related systems to the post-delivery period. This 

strategy may provide a funding cushion in the near term, but it may not be 

sufficient to cover all potential cost increases. After raising the cost cap 

several times, the Navy is now managing the cost cap by reducing the 

scope of the delivered ship and is considering paying for the deferred 

scope through a budget account normally used for post-delivery activities. 

This contradicts the purpose of the congressional cost cap, which is to 

hold the Navy accountable for the total cost estimate for buying a 

deployable ship.

Further, after an investment of at least $12.9 billion, CVN 78 may not 

achieve improved operational performance over the Nimitz class of 

aircraft carriers as promised for some time to come. Reliability shortfalls 

and development uncertainties in key Ford-class systems will prevent the 

ship from demonstrating its required sortie generation rate before initial 

deployments. Personnel accommodation restrictions resulting from the 

ship’s design has the potential of causing operational limitations that the 

Navy will have to manage closely—a constraint that does not exist in the 

Nimitz class. We previously recommended re-assessing these 

requirements; the Navy agreed that such an analysis is appropriate, but 

one that it would not pursue until the conclusion of operational testing. As 

we previously concluded, waiting until this point would be too late to make 

effective tradeoffs among cost, schedule, and performance for follow-on 

ships.

Conclusions
Page 39 GAO-15-22 Ford Class Aircraft Carrier

As the Navy prepares to award the detail design and construction 

contract for the next Ford-class ship, CVN 79, it is clear that achieving the

cost cap will be challenging. While the Navy and the shipbuilder are 

working to reduce costs, the Navy’s ability to achieve the congressional 

cost cap relies, in part, on deferring planned capability improvements until 

later maintenance periods. From an accountability and oversight 

standpoint, it would be preferable to keep the scope of the delivered ship 

constant—an essential component of a baseline—and raise the cost cap 

accordingly.

The legislated cost cap for Ford-class aircraft carrier construction 

provides a limit on procurement funds. However, the legislation also 

provides for adjustments to the cost cap. To understand the true cost of 

each Ford-class ship, Congress should consider revising the cost cap 

legislation to ensure that all work included in the initial ship cost estimate 

that is deferred to post-delivery and outfitting account is counted against 

the cost cap. If warranted, the Navy would be required to seek statutory 

authority to increase the cap.

We are not making any new recommendations, but our recommendations 

from our September 2013 report remain valid.

We provided a draft of this report to DOD for comment. In its written 

comments, which are reprinted in appendix III, DOD agreed with much of 

the report but disagreed with our position on cost cap compliance. In 

particular, DOD disagreed that a change in cost cap legislation is 

necessary because it believes all procurement funds are counted toward 

the cost cap. While it is true that the current cost cap legislation does 

require the inclusion of all procurement funds, up to this point the Navy 

has not included funding for outfitting and post delivery costs in its end 

cost estimates. Further, the current legislation allows the Navy to make 

changes to the ships’ outfitting and post-delivery budget accounts without 

first seeking statutory authority. In the event that costs increase above the 

Navy’s current estimates, the Navy is considering deferring work until the 

post-delivery period and funding it through the outfitting and post delivery 

accounts, which would limit visibility into the ship’s true end cost. Our 

intention is not necessarily, as DOD states, to keep the post-delivery and 

procurement accounts separate, but rather to create a stable cost 

baseline for accountability and oversight purposes. 

Matter for 

Congressional 

Consideration

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
Page 40 GAO-15-22 Ford Class Aircraft Carrier

DOD also disagreed with our conclusion that constructing CVN 79 within 

the current cost cap might not be achievable, but agreed that it will be 

challenging. DOD stated that the cost cap for CVN 79 is achievable 

largely due to the Navy’s two-phased acquisition approach, which is now 

intended to deliver the next carrier with the same capabilities as CVN 78. 

We agree that reducing the scope of CVN 79 prior to ship delivery should 

also reduce the cost estimate in the near term. As we noted in our report, 

however, the Navy initially included planned capability improvements in 

CVN 79’s baseline estimate. These improvements will now occur during a 

later maintenance period, the costs of which are to be shifted to other 

(non-CVN 79 shipbuilding) accounts at a later date. While the Navy’s 

approach to CVN 79’s cost estimate may initially appear to meet the cost 

cap, it serves to obscure the ship’s true cost. As we concluded in the 

report, from an accountability standpoint, it would be preferable to keep 

the scope of CVN 79 constant and raise the cost cap accordingly, if 

needed. 

In addition, DOD provided technical comments that were incorporated as 

appropriate. These comments included, among others, additional 

information on CVN 78’s shipboard test program and the Navy’s twophased approach to constructing and delivering CVN 79.

We are sending copies of this report to interested congressional 

committees, the Secretary of Defense, and the Secretary of the Navy. In 

addition, the report is available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-4841 or mackinm@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix IV.

Michele Mackin

Director

Acquisition and Sourcing Management
Page 41 GAO-15-22 Ford Class Aircraft Carrier

List of Committees

The Honorable Carl Levin

Chairman

The Honorable James M. Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Howard P. “Buck” McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Richard J. Durbin

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Rodney Frelinghuysen 

Chairman

The Honorable Pete Visclosky

Ranking Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Appendix I: Scope and Methodology

Page 42 GAO-15-22 Ford Class Aircraft Carrier

This report examines remaining risks in the CVN 78 program since 

September 2013 by assessing: (1) the extent to which CVN 78 will be 

delivered to the Navy within its revised cost and schedule goals; (2) if, 

after delivery, CVN 78 will demonstrate its required capabilities through 

testing before the ship is deployment ready; and (3) the steps the Navy is 

taking to achieve CVN 79 cost goals.

To identify challenges in delivering the lead ship within current budget 

and schedule estimates, we reviewed Department of Defense (DOD) and 

contractor documents that address technology development efforts 

including test reports and program schedules and briefings. We also 

visited the lead ship of the Ford-class carriers, USS Gerald R. Ford (CVN 

78), to observe construction progress and improve our understanding of 

the installation progress of the critical technologies aboard CVN 78. We 

evaluated Navy and contractor documents outlining cost and schedule 

parameters for CVN 78 Navy budget submissions, contract performance 

reports, quarterly performance reports, and program schedules and 

briefings. In addition, we reviewed the shipbuilder’s Earned Value 

Management data and developed our own cost and labor hour estimates 

at ship completion and compared this with data provided by the Navy and 

shipbuilder. We also relied on our prior work evaluating the Ford-class 

program and shipbuilding best practices to supplement the above 

analyses.1

 1

To further corroborate documentary evidence and gather 

additional information in support of our review, we conducted interviews 

with relevant Navy and contractor officials responsible for managing the 

technology development and construction of CVN 78, such as the 

Program Executive Office, Aircraft Carriers; CVN 78 program office; 

Newport News Shipbuilding (a division of Huntington Ingalls Industries); 

Supervisor of Shipbuilding, Conversion, and Repair Newport News 

Command; Aircraft Launch and Recovery program office; and the 

Program Executive Office, Integrated Warfare Systems. We also held 

discussions with the Naval Sea Systems Command’s Cost Engineering 

and Industrial Analysis Division; the Defense Contract Management 

Agency; and the Defense Contract Audit Agency.

GAO-07-866; Best Practices: High Levels of Knowledge at Key Points Differentiate 

Commercial Shipbuilding from Navy Shipbuilding, GAO-09-322 (Washington, D.C.: May 

13, 2009); GAO-13-396; and Navy Shipbuilding: Opportunities Exist to Improve Practices 

Affecting Quality, GAO-14-122 (Washington, D.C.: Nov. 19, 2013).

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 43 GAO-15-22 Ford Class Aircraft Carrier

To evaluate whether CVN 78 will demonstrate its required capabilities, we 

identified requirements criteria in the Future Aircraft Carrier Operational 

Requirements Document and compared requirements with reliability data 

and reliability growth projections for key systems. We also examined the 

CVN 78 preliminary ship’s manning document and wargame analysis of 

planned manning, as well as the Commander, Operational Test and 

Evaluation Force’s most recent operational assessment for the ship to 

identify potential manpower shortfalls. To evaluate whether the Navy’s 

post-delivery test and evaluation strategy will provide timely 

demonstration of required capabilities, we analyzed (1) development 

schedules and test reports for CVN 78 critical technologies; (2) testing 

reports and operational assessments for CVN 78; and (3) the Navy’s 

November 2013 revised test and evaluation master plan to identify 

concurrency among development, integration, and operational test plans. 

We corroborated documentary evidence by meeting with Navy and 

contractor officials responsible for developing key systems, managing 

ship testing, and conducting operational testing, including the Program 

Executive Office-Aircraft Carriers, the CVN 78 program office, Newport 

News Shipbuilding, the Aircraft Launch and Recovery program office, the 

Navy’s land-based test site for EMALS and AAG in Lakehurst, N.J., the 

Program Executive Office for Integrated Warfare Systems, Office of the 

Director, Operational Test and Evaluation, Office of the Deputy Assistant 

Secretary of Defense for Developmental Test and Evaluation, the Office 

of the Commander, Navy Operational Test and Evaluation Force, and the 

Office of the Chief of Naval Operations Air Warfare.

To assess the steps the Navy is taking to achieve CVN 79 cost goals, we 

reviewed our prior work on Ford-class carriers2

; shipbuilder data 

identifying cost savings and labor hour reduction opportunities as well as 

lessons learned from constructing CVN 78; CVN 79 construction 

preparation contract and contract extensions; CVN 78 and CVN 79 labor 

hour data for completing advanced construction work; as well as, CVN 79 

construction plans and reports, program briefings, and Navy budget 

submissions. We also conducted an analysis of the shipbuilder’s 

scheduling systems and processes that are used for constructing CVN 78 

and assessed this against GAO’s scheduling best practices.3

 2

We 

attempted to conduct a similar analysis of CVN 79’s schedule. However, 

GAO-13-396, GAO-07-866. 

3

GAO-12-120G. 
Appendix I: Scope and Methodology

Page 44 GAO-15-22 Ford Class Aircraft Carrier

the integrated master schedule used for construction—that is maintained 

by the shipbuilder—was not up to date and did not reflect the status of 

advanced construction work at the time of our analysis. As a result, we 

only reviewed the scheduling processes that the shipbuilder plans to use 

for CVN 79. To supplement our analysis and gain additional visibility into 

the Navy’s actions for ensuring CVN 79 is built within the constraints of 

the cost cap legislation, we reviewed several years of defense 

authorization acts and interviewed officials from the Program Executive 

Office-Aircraft Carriers, CVN 78 program office, CVN 79 and CVN 80 

program office; Huntington Ingalls Industries, Newport News Shipbuilding; 

Supervisor of Shipbuilding, Conversion, and Repair Newport News 

Command; Program Executive Office, Integrated Warfare Systems; the 

Office of the Chief of Naval Operations Air Warfare Division; and, Naval 

Sea Systems Command’s Cost Engineering and Industrial Analysis 

Division.

We conducted this performance audit from December 2013 to November 

2014 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: New Technologies Introduced on 

Ford-Class Ships

Page 45 GAO-15-22 Ford Class Aircraft Carrier

A number of new technologies are being installed on Ford-class aircraft 

carriers that are designed to increase the ship’s capability and lower life 

cycle costs. Below is an overview of these key technologies along with 

the approximate placement on the ship.

Table 11: New Technologies for the Ford-Class Aircraft Carrier

Technology Description and Capability Improvement 

Dual Band Radar (DBR) Two systems comprise the DBR: (1) Volume search radar includes long-range, abovehorizon, surveillance, and air traffic control capabilities. (2) Multifunction radar includes 

horizon search, surface search and navigation, and missile communications. The DBR 

permits reduced manning and higher sortie generation rates aboard CVN 78 via 

anticipated operational availability increases and size reductions to the ship’s island.

Advanced Arresting Gear (AAG) AAG recovers current and future aircraft and contributes to reduced manning.

Electromagnetic Aircraft Launch System 

(EMALS)

EMALS uses an electrically generated moving magnetic field to propel aircraft, which 

places less physical stress on aircraft as compared to steam catapult launchers. The 

system is a contributor to CVN 78’s reduced manning, in part because of Navy 

expectations about EMALS’s increased operational availability.

Advanced Weapons Elevators These elevators rely on electromagnetic fields to move instead of cables. Capability 

improvements include an expected 200 percent greater load capability than legacy 

carrier elevators. Advanced weapons elevators facilitate reduced manning and enable 

higher sortie generation rates.

Evolved Sea Sparrow Missile Joint 

Universal Weapons Link

This system supports anti-air warfare. The system provides the capability to defeat highdensity raids

Heavy Underway Replenishment Receiving 

Station

.

This system provides quicker shipboard replenishment (supply) than legacy underway 

replenishment systems. The system may facilitate F-35C power module replacement 

and higher sortie generation rates for the Ford-class.

Plasma Arc Waste Destruction System 

(PAWDS)

PAWDS uses extreme temperatures to convert 6,800 pounds per day of plastic and 

other waste into gaseous emissions. It may facilitate reduced manning aboard the ship.

Nuclear propulsion/electric plant The system converts energy into electricity, providing a nearly threefold increase in 

power generation over the Nimitz-class plant. The plant design also facilitates manning 

reductions and supports weight and stability service life allowances.

Reverse Osmosis Desalinization System This system desalinates water without a steam distribution system, facilitating reduced 

manning and improved weight and stability for the ship.

High Strength Toughness Steel (HSLA 

115)

HSLA 115 is stronger and lighter than legacy ship steel types and comprises the CVN 78 

flight deck. HSLA 115 improves weight and stability for the ship.

High Strength Low Alloy Steel (HSLA 65) HSLA is stronger and lighter than legacy ship steel types and is used in bulkheads as 

well as deck constructions. HSLA 65 improves weight and stability for the ship.

Source: Navy and contractor documentation. | GAO-15-22

Appendix II: New Technologies Introduced 

on Ford-Class Ships
Appendix II: New Technologies Introduced on 

Ford-Class Ships

Page 46 GAO-15-22 Ford Class Aircraft Carrier

Figure 7: Critical Technologies on the Ford-Class Aircraft Carrier
Appendix III: Comments from the

Department of Defense

Page 47 GAO-15-22 Ford Class Aircraft Carrier

Appendix III: Comments from the

Department of Defense
Appendix III: Comments from the

Department of Defense

Page 48 GAO-15-22 Ford Class Aircraft Carrier
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 49 GAO-15-22 Ford Class Aircraft Carrier

Michele Mackin, (202) 512-4841 or mackinm@gao.gov

In addition to the contact named above, key contributors to this report 

were Diana Moldafsky, Assistant Director; Christopher E. Kunitz; Brian P. 

Bothwell, Juana S. Collymore, Burns C. Eckert; Laura Greifner; John A. 

Krump; Jean L. McSween; Karen Richey; Jenny Shinn; and Oziel 

Trevino.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(121183)
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