Summary: The Navy's goal of producing a new attack submarine at significantly lower cost than that of the Seawolf is unlikely to be achieved. The Navy's cost estimate for the new submarine has already risen from $1.5 billion to $1.8 billion, and further cost increases may well occur because of various program risks. Recent legislation directed the Navy to accelerate construction of the first two submarines and to use two shipyards instead of one to build the first four vessels. According to the Navy, this change has boosted the cost of building 30 new attack submarines by $3 billion. The Defense Department contends that a $3.8-billion increase in budget authority will be needed to comply with the recent legislation. GAO believes that other cost increases are possible because of the following program risks: (1) Changes in the ship's design or the addition of new technologies are anticipated. (2) The new attack submarine's command, control, communication, and combat system development and integration program is highly complex and the schedule for its completion is optimistic. (3) Some prototype equipment is being developed concurrently with the ship's construction. (4) The cost of transferring the submarine's design from the first to the second shipbuilder is based on an optimistic estimate that is less than the actual cost of the last major design transfer.
