Ship maintenance

Navy vessel maintenance budget would increase by 3% with additional funds

The US Navy’s vessel maintenance budget now includes two sources of funding: traditional operations and maintenance funding; and a new procurement fund item added by Congress last year and re-requested by the administration for 2021.

In total, the total budget of $ 13.5 billion for fiscal year 2021 represents an increase of 3.1%.

The Navy’s proposed O&M funding of $ 12.2 billion for FY2021 for vessel maintenance would increase by just 1% from the level adopted for FY2020. has more to the story: The Navy followed up on a billion dollar congressional initiative for fiscal 2020 and requested nearly $ 1.3 billion in procurement funding to increase the traditional O&M budget . The use of two pots of money represents a change for the program in response to past deficits and headaches being planned.

The private sector does not perform all vessel maintenance, as noted in a previous Bloomberg government analysis. Some of the work is done at large government facilities by officials, including shipyards in Norfolk, Pearl Harbor, Portsmouth and Puget Sound. .

So while not all of these budgets are allocated to entrepreneurs, the increased budget is good news for companies like BAE Systems Plc, General Dynamics Corp. and Huntington Ingalls Industries Inc., the leading contractors in a market that surpassed $ 4.6 billion in fiscal 2018. Contractual vessel maintenance spending hit a 10-year high in the last year. year 2018, but then fell to $ 4.0 billion in fiscal 2019. The peak in 2018 was due in part to one-time costs of repairing two ships damaged in collisions.

Pilot program

Supply finance is a pilot program. In FY2020, it was used to fund 16 privately contracted vessel maintenance “cash” – tight deadlines for working on vessels – for the Pacific fleet. Availability is scheduled for the time needed for overhaul or repairs, and planned well in advance. If a ship arrives late due to a longer than planned deployment, it disrupts the program.

In fiscal 2021, the plan is to use the $ 1.3 billion for private contract cash from 26 Pacific fleets. Part of the rationale for adding procurement funding to the mix is ​​that O&M funding is available for obligation for only one year; supply finance is available for the three bond. This change is designed to help shipyards more effectively manage the complexities of funding vessel maintenance, which is especially important given the schedule disruptions in recent years.

Planning challenges

The Navy says the vessel maintenance budget request will cover 98% of the total needs that can be addressed given the limitations of the current capacity of the shipyard. The overall budget increase should help the Navy meet some major challenges.

Operational requirements have led to longer-than-expected ship deployments in recent years. This leads to increased wear. It also disrupts the very complex schedule of shipyard availability. When a ship is late to enter a yard, it affects all ships scheduled to follow it. In addition, not all shipyards can work on all types of vessels.

It is clear that both administration and Congress consider vessel maintenance a priority; the challenge is how to maintain strong funding, from operations and maintenance and / or procurement, given the tight 2021 overall budget demand for the navy, which would actually decrease by 1% if she was adopted. The final level of appropriations for FY2021 for any discretionary program is uncertain at this early stage in the process, and Congress and administration are unlikely to come to an agreement on appropriations before the November election.

Interested observers will monitor the Armed Services Committees of the House and Senate as well as the Appropriation Committees for signals regarding vessel maintenance budgets. Despite its high priority, vessel maintenance can be pressured as a “bill payer” to increase funding for the construction of new vessels; the demand would reduce the shipbuilding budget by 16.8%.

To contact the analyst: Cameron Leuthy in Washington, DC at [email protected]

To contact the editors responsible for this story: Daniel Snyder To [email protected]; Jodie morris To [email protected]


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *