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REPORT Shared Modular Build of Warships How a Shared Build Can Support Future Shipbuilding Laurence Smallman • Hanlin Tang • John F. Schank • Stephanie Pezard Prepared for the United States Navy Approved for public release; distribution unlimited NATIONAL DEFENSE RESEARCH INSTITUTE The research described in this report was prepared for the United States Navy. The research was conducted within the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community under Contract W74V8H-06-C-0002. Library of Congress Control Number: 2011924089 ISBN: 978-0-8330-5148-6 The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. R® is a registered trademark. Cover photo by DCNS: The bow section of the Mistral is brought into position with the stern section in Brest, France, July 2004. © Copyright 2011 RAND Corporation Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND documents to a non-RAND website is prohibited. RAND documents are protected under copyright law. For information on reprint and linking permissions, please visit the RAND permissions page (http://www.rand.org/publications/ permissions.html). Published 2011 by the RAND Corporation 1776 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138 1200 South Hayes Street, Arlington, VA 22202-5050 4570 Fifth Avenue, Suite 600, Pittsburgh, PA 15213-2665 RAND URL: http://www.rand.org To order RAND documents or to obtain additional information, contact Distribution Services: Telephone: (310) 451-7002; Fax: (310) 451-6915; Email: [email protected] Preface Some recent shipbuilding programs in the United States and Europe have involved multi- ple shipyards constructing major modules of each ship for final integration and test at one shipyard. This approach, a shared build of a warship, might be adopted for many reasons. It requires close coordination and planning among shipyards to identify and manage risks. Recognizing that shared build might be an option for future shipbuilding programs, the U.S. Navy Program Office for the Future Cruiser (CG[X]) asked the RAND Corporation to examine several recent shared-build programs in the United States and Europe and identify the key decisions, advantages, and disadvantages associated with them. This document sum- marizes our work. It should be of interest to policymakers and others concerned about ship construction and the maritime industrial base. This research was sponsored by the U.S. Navy Program Office for CG(X) and con- ducted within the Acquisition and Technology Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community. For more information on the RAND Acquisition and Technology Policy Center, see http://www.rand.org/nsrd/about/atp.html or contact the director (contact information is pro- vided on the web page). iii Contents Preface ........................................................................................................... iii Figures ...........................................................................................................vii Tables ............................................................................................................ ix Summary ........................................................................................................ xi Acknowledgments ........................................................................................... xvii Abbreviations .................................................................................................. xix CHAPTER ONE Introduction ..................................................................................................... 1 Approach .......................................................................................................... 1 Structure of This Report ........................................................................................ 2 CHAPTER TWO Choosing Shared Build ........................................................................................ 3 Specifying Shared Build ......................................................................................... 3 CHAPTER THREE Workload-Allocation Strategies .............................................................................. 7 CHAPTER FOUR Contractual Arrangements...................................................................................11 Alliance Structure ...............................................................................................11 Prime and Subcontractor Structures ..........................................................................11 Government-to-Contractor-Only Structure .................................................................12 CHAPTER FIVE Design Software and Information Technology Systems ...............................................15 CHAPTER SIX Cost Implications ..............................................................................................17 Learning-Curve Effects .........................................................................................17 CHAPTER SEVEN Shipyard Collaboration During Shared Build .......................................................... 23 v vi Shared Modular Build of Warships: How a Shared Build Can Support Future Shipbuilding CHAPTER EIGHT Comments ...................................................................................................... 27 Risks to Shared-Build Programs ..............................................................................29 Motivating Cooperation .....................................................................................29 Design Completion ...........................................................................................29 Design and Design-to-Production Organization .........................................................29 Aligning Production Practices and Schedules ............................................................ 30 Costs of Shared-Build Programs ............................................................................. 30 APPENDICES A. DDG-51 Deckhouse Case Study .......................................................................33 B. DDG-1000 Case Study ..................................................................................37 C. LPD-17 Case Study ...................................................................................... 43 D. Virginia Case Study ......................................................................................49 E. UK Type 45 Destroyer Case Study ....................................................................55 F. UK Future Carrier Case Study .........................................................................65 G. LHD Mistral and Tonnerre .............................................................................73 Bibliography ....................................................................................................79 Figures 6.1. Learning-Curve