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Delay in JHSV Delivery Will Ripple Into 2017

Dec. 14, 2012 - 01:52PM   |  
By CHRISTOPHER P. CAVAS   |   Comments
The Spearhead ran initial sea trials in April, but work to fix a number of details continued into early December.
The Spearhead ran initial sea trials in April, but work to fix a number of details continued into early December. (Austal USA)
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The first Joint High Speed Vessel (JHSV) is now officially in U.S. Navy hands, having been delivered from shipbuilder Austal USA on Dec. 5.

And while the customer is expressing satisfaction at the condition of the new ship, the Navy and Austal are in negotiations over how to handle a cost overrun of more than $31 million on the Spearhead, according to the Naval Sea Systems Command (NAVSEA).

The Spearhead also was delivered eight months late, an event that will affect the rest of the nine ships still to be built for the JHSV program, which is structured to deliver a new ship six months from each preceding unit.

Construction on the second ship, the Choctaw County, is proceeding better at the company’s shipyard in Mobile, Ala., Capt. Henry Stevens, the Navy’s JHSV program manager, said Dec. 12.

But the Choctaw County also will need more money to finish, and the Navy is asking to reprogram $11 million to address cost growth on the ship.

The delivery schedule — tying each ship to the one in front of it, rather than each unit having its own specific schedule — is unusual in Navy shipbuilding contracts. The slip in the Spearhead’s delivery means the Choctaw County, rather than being handed over in January, now won’t be signed over until June, a shift that will ripple through the last ship, now to be delivered in mid-2017.

The Navy is not, however, urging Austal to make up the difference.

“If Austal can deliver early we’ll take a look at that,” Stevens said, “but there are no incentives to go early other than reduced overhead.”

Overall, however, the JHSV program remains on track, Stevens claimed.

“Within the construct of the overarching acquisition strategy, we’re on track, we’re meeting that operational target. The dates give the flexibility to make cost-conscious decisions. To not chase schedule, that was one of our mandates.”

The idea, Stevens explained, is that “we didn’t throw money to try and gain days. There were constant decisions over this fixed-price incentive contract to make the most cost-effective decisions.”

The Spearhead is a better ship because of the extra work done on it, Stevens said.

“Now, when I look at the ship, there are no significant items to complete. The crew is on board, they’re starting their training.”

The Spearhead was recently at sea, running up to 43 knots, Stevens said. A problem with the underwater paint coming off will be addressed in mid-December when the ship enters drydock to be repainted, work that is not expected to cause further delays.

The additional work needed on the Choctaw County, NAVSEA said in a statement, was due to material costs to meet American Bureau of Shipping standards, increased shipyard overhead rates, and 50 tons of structural material Austal chose to add to the ship.

Austal also made a leadership change shortly after the JHSV delivery. Craig Perciavalle, the shipbuilder’s senior vice president of operations, was named by Austal USA Chairman Dugan Shipway to take over as president.

Perciavalle replaces Joe Rella, who resigned in the spring.

In addition to the JHSVs, Austal USA is the prime contractor for the Independence-class Littoral Combat Ships (LCS), one of two LCS classes being bought for the U.S. Navy.

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