Accountability for Underperforming Shipbuilding Contractors: A Senate Hearing

Government Funding for Maritime Industrial Base

• 💰 The maritime industrial base program has received approximately $6.7 billion since 2018 for the "oneplus 2" mission and around $3.16 billion for submarine sustainment.
• 📈 Funding has focused on supply chain uplift, increasing parts output from 16% to over 40% of required levels between 2018 and 2022.
• ⏳ New projects, including 1,200 across workforce, supply chain, and advanced manufacturing, are in the pipeline, with results expected in 24-48 months.

Contractual Accountability and Repercussions

• ❓ Senator Scott questions why private companies can underdeliver on contracts and then receive additional government funding.
• ⚖️ Contract types, such as fixed-price contracts, place more accountability on the shipbuilder, incentivizing performance and schedule adherence.
• 📉 Accountability measures include impacting contractor profit and, in some cases, withholding payments.

Actions for Underperformance

• ⚠️ When vendors fail to perform, work can be moved to other vendors to maintain production.
• 🤝 The responsibility for increased costs when work is moved depends on the contract structure, with fixed-price contracts making the vendor fully responsible.
• ⚙️ In extreme cases, withholding payments is a tool used to ensure contractor performance.

Leveraging Competitive Forces

• 🎯 Investments in the submarine industrial base aim to leverage competitive forces to achieve better schedule and cost results.
• 🏗️ As the maritime industrial base is built up, there's a strategic positioning to better utilize these competitive dynamics.