In Case You Missed It: GAO Questions Costs on CGX ...

Government report Challenges US Navy Analysis of Cost Savings...

The General Accounting Office (GAO) recently released a report on questioning the US Navy¹s math on cost efficiencies.

Here is an excerpt from the story ...

'U.S. Navy: Nuclear Cruiser Could Be Cheaper Than Non-Nukes'
By CHRISTOPHER P. CAVAS Published: 7 Aug 2009 18:11


A U.S. Navy draft study has concluded that operating a nuclear-powered cruiser could be cheaper than operating a non-nuclear ship, but the Government Accountability Office (GAO) is disputing that assessment.

THE U.S. NAVY is mulling a new cruiser propelled by nuclear power, as was the USS South Carolina. (U.S. Navy / PH1 Gregory Pinkley) In an Aug. 7 letter sent to Sens. Ted Kennedy, D-Mass., and Mel Martinez, R-Fla., GAO analyst Paul Francis said a yet-to-be-approved Navy draft cost analysis showed that nuclear cruisers would be cheaper if oil-price patterns of the past 35 years continue to hold.

But Francis wrote that the Navy didn't include several factors in its calculations - factors that would change the results to show that non-nuclear ships would be cheaper. They include "present value analysis," a way to calculate the future value of money; alternative scenarios for the future price of oil; and an examination of how a less efficient conventional propulsion system would affect cost estimates. By including those factors in its calculations and coming up with a different result, Francis wrote, his analysis "demonstrates the sensitivity of the cost estimates to different assumptions, underscoring the need for more rigorous analysis before reaching conclusions." Francis wrote that although the Navy disagreed with several of GAO's underlying analyses, it agreed with the need to include the new factors in its calculations. The Navy is considering nuclear power for the new CGX cruiser, which it could buy in 2017. Congress has directed that the ships be nuclear-propelled, but a 2007 Navy analysis reported a nuclear cruiser would cost $600 million to $800 million more than a non-nuke. The Navy has not commissioned a nuclear-powered warship other than an aircraft carrier or submarine since 1980, and all its nuclear cruisers were taken out of service in the 1990s. The GAO letter also provided rare confirmation of some of the broad details of the never-released Analysis of Alternatives (AoA) report for the CGX cruiser. The report, begun in 2005, was to have been completed in late 2007, but has been withheld for a variety of reasons as the Navy reviewed its plans for the ship.

For full story, go to: http://www.defensenews.com/story.php?i=4226195 

Navy Times

Same story appeared 8/10. 'Navy: Nuclear cruiser could be cost-effective' By Christopher P. Cavas - Staff writer

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