GAO blames new frigate’s delay on Navy tampering with design, ‘botched metrics’

WASHINGTON — The Navy’s reliance on “botched metrics” and “inadequate” review practices are key reasons why its $22 billion next-generation frigate program is plagued with a potential three-year delay right out of the gate, according to government auditors.

The new report by the Government Accountability Office, which was requested by lawmakers, assessed the Constellation-class frigate’s design and technical uncertainties around its capabilities. Auditors, who are usually mild-mannered in their criticism of their government counterparts, were unsparing in laying the blame at the Navy’s feet for tinkering with the new ship’s design too much.

“Navy decisions to substantially modify the frigate design from the parent design have caused the two to now resemble nothing more than distant cousins,” the report concludes. “Further, inadequate functional design review practices and botched metrics that the frigate program continues to rely on obscured the program’s actual design progress and contributed to prematurely starting lead ship construction before the design was sufficiently stable to support that activity.”

Navy Secretary Carlos Del Toro previously confirmed the new frigate program was on track for a three-year delay — the lead ship was initially scheduled to deliver in 2026, but auditors say that goal is now virtually unachievable. However, Del Toro’s shipbuilding review did not provide in-depth details on the cause for the program’s problems.

While scattered reports from news outlets and independent analyses from places such as the Congressional Research Service have suggested the Navy could be going too far in its tampering of the ship’s design, the GAO report provides the most in-depth assessment of the vessel slated to replace the Littoral Combat Ship — a program with its own tortured history of schedule delays.

GAO writes that the issues stem from the service’s flawed methodology for tracking ship design progress.

“While the Navy tracks design progress, its process to calculate design stability hinges largely on the quantity — rather than the quality — of completed design documents,” according to the new report. “The focus on quantity obscures functional design progress and how much design work remains. Program challenges and delays have increased estimated contract costs; however, the Navy’s fixed-price incentive contract helps limit cost risks.”

Fixed-price incentive contracts essentially use a carrot and stick approach: If a contractor performs well and finishes the work early, they make a bigger profit. If they fall behind, they are liable to start footing bills associated with the delays.

The Navy has identified nearly $310 million in cost growth on the first four frigates and blamed that statistic on “inflation and economic factors affecting material and labor prices,” according to GAO.

“Now, over 18 months after lead ship construction start, the functional design remains unstable, which has undermined confidence in the accuracy and maturity of detail design products needed to construct grand modules — and construction progress has effectively stalled,” according to GAO.

Service officials in 2018 and 2019, just before awarding the frigate construction contract to Fincantieri Marinette Marine in 2020, repeatedly assured lawmakers that mandating its shipbuilder to use a parent design would significantly reduce the risk of cost overruns and schedule delays. (A parent design means that Fincantieri in its initial offering was required to derive its proposal off a ship that was already built and proven; Fincantieri chose the Italian FREMM as its parent design.)

A spokesperson for Fincantieri Marinette Marine declined to comment on GAO’s new report when reached by Breaking Defense.

That the Navy has found itself with a three-year program delay despite these assurances has aggravated lawmakers.

“Complete design was actually in the law back in 2020, and we’ve seen instances where … things have gotten sort of thrown off course because of the fact that there was just premature construction,” Rep. Joe Courtney, D-Conn., a senior member of the House Armed Services Committee, told a group of reporters last week.

RELATED: House poised to require ‘100 percent’ ship design from Navy prior to construction

House lawmakers recently passed out of committee the next annual defense policy bill which, among other things, would more explicitly mandate the Navy to avoid the very same mistake GAO says it has made on the frigate: Stop beginning construction until the design is “100 percent” complete.

“The real change in statute that was included in this measure was to try and just make sure that we’re not seeing these kinds of stop-start situations,” Courtney said of the policy change he spearheaded in this year’s bill.

GAO routinely makes recommendations to the federal agencies it audits and in turn allows the agency to respond.

GAO recommended the Navy restructure its design processes to focus on quality rather than quantity; make use of those processes to ensure the second frigate’s design is complete prior to starting construction; complete the detail design of “any given grand module” for follow-on ships; and have the service’s acquisition executive incorporate leading practices for product development prior to acquiring the 11th ship in the class.

The 11th frigate in the class is significant because while the service plans to buy 20 ships, the 2020 contract to Fincantieri only included the first ten. That means the Navy will have a veritable fresh start when it awards a new contract for the next ten.

Nickolas Guertin, the service’s acquisition executive, responding on behalf of the Navy concurred with those four recommendations.

Responding to a fifth recommendation to incorporate land-based testing for certain propulsion systems on the frigate, Guertin wrote the Navy would do so but does not intend on formally updating its master testing plan, as recommended by GAO.