Replacing the Subs

[Fishbone Jones]

Not sure Colin. I do know who will be on the hook for it though.

 

[Good2Golf]

Not sure Colin. I do know who will be on the hook for it though.

Not the Canadian people. The Government will take on the costs so that we don’t have to.

 

[Underway]

So people are suprised that 8 years later the price has gone up? The inflation on military equipment even before the current inflationary pressues is 10-15% per year. Over 8 years that easily gets you past 100% inflation on the original contract.

 

[Czech_pivo]

I cannot speak to the cost increase yoy for 'military equipment, but what % of the total cost in building a warship is the actual 'military equipment'?

The GoC uses the 'all in' approach to budgeting the overall cost for the entire 30+yr lifespan of a warship. I'm going to assume that the 'daily cost to operate' a warship includes such things as 'wages', 'pensions', maintenance', 'fuel', 'use of the wharf', 'ammo', 'refurbishing/upgrading', 'depreciation', 'non-lethal equipment', 'lethal equipment', etc, etc.

Now the wages, pensions, fuel, use of wharf, depreciation, food factors are certainly not going up 10-15% yoy - even in this current environment of moderate inflation. The wages/total cost of labour for a crew of 200 over a 30yr time period might come in at around 1.5billion/ship (all in total wages might run about 18 million/yr in year 1 for a crew of 200).

If we go with the number for the 15 CSC's as being 85$ billion over 30yrs, that works out to be a cost of 5.6 billion a ship. If we go with the back of the napkin cost for total labour to crew the ship for 30yrs as being 1.5 billion, that works out to be a remaining amount of 3.9 billion/ship to design the ship, labour to build the ship, labour to refurbish the ship, labour to maintain the ship, fuel, ammo, cost to use a wharf, raw resources to create the ship, equip the ship with non-lethal equipment, equip the ship with lethal equipment, food, what else? That estimate of 1.5 billion for the total wages to crew the ship over 30yrs represents slightly over 25% (26.8%) of the total cost per ship over 30yrs. The remaining 74% of the total cost are all other costs over 30yrs.

The cost of the labour to build the ship, labour to refurbish the ship, labour to maintain the ship, the fuel and the food are not going up 10-15% yoy. I'd argue that the cost to design the ship are not going up 10-15% yoy as well - as the majority of those costs are related to labour costs.

So, is it that the cost for the non-lethal and lethal equipment are going up 15-20+% yoy? Because if the crewing costs and labour costs are only growing at around 3% yoy, food at say 5% yoy, fuel at 5-6% yoy, cost to use a wharf at 4-5% yoy, then all the remaining things

• raw resources to build the ship (steel, iron, copper, etc, etc)
• non-lethal equipment (pipes, lighting, bedding, wifi, paint, chairs, tables, generators, fuel pumps, computers, software) and
• lethal equipment (radars, torpedos, cannons, shells, missiles, etc, etc) all have to be going up by 15-20%+ yoy.

Is that really the case? Is the cost of raw resources, non-lethal equipment (tables, bedding, mattresses, computers, fuel pumps, generators) and lethal equipment (radar, missiles, torpedos, main gun, shells) really going up in costs 15-20%+ yoy?

 

[KevinB]

So people are suprised that 8 years later the price has gone up? The inflation on military equipment even before the current inflationary pressues is 10-15% per year. Over 8 years that easily gets you past 100% inflation on the original contract.

Any KO who signs on to a more than 5% increase / year on a FFP contract probably should be terminated.
Down here until FY22, 3-4% had been standard.
Also most contracts if extended won’t just accept a ‘let’s keep going up’ price from the previous contract end. I know several that went down, as in general the more you build gives an economy of scale and most companies are trying to trim fact in their productions.

I’m baffled at anyone that would no do a firm fixed price contract for munitions or weapons, I can understand it for larger systems, but a torpedo is simply a consumable munition.

 

[Eye In The Sky]

Not the Canadian people. The Government will take on the costs so that we don’t have to.

 

[Good2Golf]

Canada doesn’t even get to sit at the kids table and play with Lego…

Development of hypersonic weapons discussed at first Aukus meeting

Aukus is a defence pact between the three countries to help identify a nuclear-powered submarine for the Australian Navy,

www.forces.net

 

[Czech_pivo]

Any KO who signs on to a more than 5% increase / year on a FFP contract probably should be terminated.
Down here until FY22, 3-4% had been standard.
Also most contracts if extended won’t just accept a ‘let’s keep going up’ price from the previous contract end. I know several that went down, as in general the more you build gives an economy of scale and most companies are trying to trim fact in their productions.

I’m baffled at anyone that would no do a firm fixed price contract for munitions or weapons, I can understand it for larger systems, but a torpedo is simply a consumable munition.

Frankly it comes across as a concerted effort to sink the entire project. I question the entire approach. I'd love to have the bobble heads who keep revising these costs ever upwards to sit down with some private sector accountants/auditors and defend their numbers - in an open forum for the public to see, no closed doors, no redacted documents.

 

[Spencer100]

Frankly it comes across as a concerted effort to sink the entire project. I question the entire approach. I'd love to have the bobble heads who keep revising these costs ever upwards to sit down with some private sector accountants/auditors and defend their numbers - in an open forum for the public to see, no closed doors, no redacted documents.

Of course it's a effort to sink the program. There is a very strong element in Ottawa and Canada that would nothing better to see the country disarmed. And others who would like to see different outcomes.

 

[OldSolduer]

Canada doesn’t even get to sit at the kids table and play with Lego…

Development of hypersonic weapons discussed at first Aukus meeting

Aukus is a defence pact between the three countries to help identify a nuclear-powered submarine for the Australian Navy,

www.forces.net

Dey don’t need no Cadillac submarines….

Or any at all - oh and the F35 thing? How’s that going?

 

[dimsum]

Or any at all - oh and the F35 thing? How’s that going?

It's still going. Projects don't generally put out public info unless something has changed (positively or negatively).

 

[calculus]

It's still going. Projects don't generally put out public info unless something has changed (positively or negatively).

Wasn't the F35 contract with LM supposed to be wrapped up by the end of 2022?

 

[Good2Golf]

Update from 3EYs:

AUKUS Defense Ministerial Joint Statement

Secretary of Defense Lloyd J. Austin III hosted the Honourable Richard Marles MP, Deputy Prime Minister and Minister for Defense, Australia, and the Right Honourable Ben Wallace, Secretary of State

www.defense.gov

 

[YZT580]

Update from 3EYs:

AUKUS Defense Ministerial Joint Statement

Secretary of Defense Lloyd J. Austin III hosted the Honourable Richard Marles MP, Deputy Prime Minister and Minister for Defense, Australia, and the Right Honourable Ben Wallace, Secretary of State

www.defense.gov

all very interesting but both the American and the British yards have a full schedule supplying boats for their own countries and building subs is a specialist task. So where does an Australian build fit in over the next dozen years, before the current fleet times out

 

[RDBZ]

Subs have been built in Australia before, and interestingly enough the only fabrication defects encountered in the program were in early sections built overseas.

Since then, the combat management system was updated (changed over) to the USN's AN/BYG-1, with integration and installation work being completed locally. The upcoming Collins mid life upgrade program will also be substantial.

 

[Good2Golf]

all very interesting but both the American and the British yards have a full schedule supplying boats for their own countries and building subs is a specialist task. So where does an Australian build fit in over the next dozen years, before the current fleet times out

I’m thinking that once 2EYs expanded to 3EYs, they resolved to figure that out.

Want to take a long term bet that they figure it out?

 

[RDBZ]

The only section that definitely won't / can't be built in Aus is that containing the reactor.

 

[CBH99]

Subs have been built in Australia before, and interestingly enough the only fabrication defects encountered in the program were in early sections built overseas.

Since then, the combat management system was updated (changed over) to the USN's AN/BYG-1, with integration and installation work being completed locally. The upcoming Collins mid life upgrade program will also be substantial.

So Australian yards updated the CMS, doing both the installation & integration work.

And the upcoming midlife refit will be substantial & done locally with Australian yards. B


Compare that to Canadian yards and there contribution to our own submarine fleet upgrading the CMS — did our yards do anything similar?


(With the extensive work just to get the submarines initially operational, and all of the upgrade/repair/refit work since then - I’d think our own yards have a decent amount of experience doing deep upkeep on submarines?)

(I’m not in any way advocating for the sub replacements to be built here btw. Hell no.)

 

[CBH99]

Wasn't the F35 contract with LM supposed to be wrapped up by the end of 2022?

Replacing the CF-18 was an ‘urgent priority’ when JT first got into office.

When was that again?

 

[Good2Golf]

Replacing the CF-18 was an ‘urgent priority’ when JT first got into office.

When was that again?

Political maskirovka…