The US Navy (USN) has notified Congress of an increase in the programme acquisition unit cost and the average procurement unit cost for the Ship-to-Shore Connector (SSC) programme that exceeds the current baseline estimate, breaching the significant Nunn-McCurdy cost threshold, the service confirmed on 11 June.
The Nunn–McCurdy Amendment of the1982 Defense Authorization Act requires the services to notify Congress if the cost per unit goes more than 25% of the original estimate.
“The breach is attributed to first-in-class challenges that led to increased construction costs resulting from labour and material cost growth, and schedule-related issues on early craft,” the USN said in a statement.
“This is not a critical Nunn-McCurdy breach that would require recertification of the programme,” the USN noted, adding, “The SSC programme production is now stable as the first-in-class challenges have been resolved.”
However, in its annual report on major weapons systems, released on 8 June, the US Government Accountability Office (GAO) noted, “In part because of design and production challenges facing SSC – particularly the gearbox and propeller blades – the programme is in the process of updating its acquisition programme baseline.”
In a briefing to navy senior leadership, programme officials said they are considering reducing the total number of craft from 72 to 50, GAO reported.
“It is also considering updating the cost baseline,” GAO reported. “The programme is also considering delaying the initial capability by 11 months to December 2022. However, even with this delay, should the navy discover additional deficiencies during operational testing, the craft may not be fully capable by December 2022. Operational testing, to be completed in July 2022 under the new baseline, is the programme's first opportunity to verify in realistic operational conditions that it has fully addressed all known deficiencies before deployment.”
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