Representative HOSMER. But you think our industrial capability is not going to be affected by this decision? Secretary MCNAMARA. I don't think we will be severely penalized. (See pp. 73-75, 82-85.) No. Representative HOSMER. Thank you, Mr. Chairman. Representative BATES. Mr. Chairman, we have a vote on the floor pretty soon. Chairman PASTORE. We are going to have one, too. COST ESTIMATE FOR NUCLEAR CARRIER Representative BATES. Mr. Secretary, I wonder if you can put in the record this breakdown of $160 million plus operating costs over the period of the lifetime of the ships so we can look at both the capital outlay and also the operating costs. That is the best comparison, I think, sir. Secretary MCNAMARA. Surely. ADDITIONAL COSTS JUSTIFIED FOR NUCLEAR POWER Representative BATES. Would you pay any premium at all, 5, 10, 3 percent, for a differential in nuclear costs? They were talking a few years ago if you get it down within 15 or 20 percent it might be worth it. Can you put your price tag roughly on that? Secretary MCNAMARA. When they were talking about 15 percent or something like that they were talking about ship costs not this 25-year-system cost, not including airplanes, which according to the Navy is 3 percent and I would find closer to 10. The specific question is what kind of premium would I pay for a nuclear-powered carrier. In the first place I would not want it to have another attack squadron on it. That is point No. 1. I would not pay anything for that. That cost in the CVAN-67 is fairly substantial. I don't know exactly what it is. But it is probably on the order of $30 million. It is probably more than that, maybe $30 to $40 million, taking into account deck space, size, and numbers of aircraft and additional training aircraft and so on. Í would not pay anything for that. (The following information was subsequently provided for the record by the Office of the Secretary of Defense:) NUCLEAR-POWERED CARRIER COST DIFFERENTIAL Apparently, the Joint Committee on Atomic Energy is familiar with a $126 million differential in initial cost between a conventional carrier, such as CVA-67, and a nuclear carrier, such as the proposed CVAN-67. The derivation of the $160 million figure mentioned by the Secretary of Defense is detailed below. Nuclear carriers, such as Enterprise and CVAN-67, carry one additional squadron of light attack aircraft, as has been brought out in the congressional testimony. Inclusion of the procurement cost of these additional aircraft is responsible for the difference between the two figures. CVAN-67 initial investment_ Initial nuclear cores.. Additional squadron, light attack aircraft.. Total. CVA-67 initial investment... Difference.. Millions $371. 0 32. 0 37. 4 440. 4 277. 2 163. 2 (In separate correspondence, the Office of the Secretary of Defense forwarded a comparison of the estimated lifetime investment and operating costs of the nuclear and conventional carriers which showed that the nuclear carrier was estimated to cost $480.5 million more than the conventional carrier over its lifetime. Of the total cost differential, $308.8 million was associated with the cost of procurement and operation of the extra squadron of aircraft.) 1 1 Representative BATES. A redesign could take care of that? (See pp. 104 and 107, for testimony that the Navy planned same number of aircraft for conventional and nuclear carriers.) Secretary MCNAMARA. Exactly, a redesign could take care of it. I don't know how much I would be willing to pay. I think something on the order of $25 to $50 million over the life of the carrier. Representative BATES. Including operating costs? Secretary MCNAMARA. Whatever differences in operating costs from the other there were. TOTAL WARSHIP REQUIREMENTS Representative BATES. On this overall problem I can't disagree with reference to numbers because I have been in this thing for quite a long while, too. I don't know what we are going to do. Maybe we don't need 870 ships we have had. Maybe we need 500. But the way we are going we will not have very many. You have used the word "tens." I thought probably by the end of this decade we would be putting out hundreds not tens of ships. Secretary MCNAMARA. I first said hundreds and then I said at least tens in the remaining part of the decade. I am talking about major large ships, 8,000 tons and over. I only used tens because that takes me up to 90 and I don't want to say between now and 1969 we will be proposing it. (See p. 26.) It is 1965, 1966, 1967, 1968, 1969-5 years. I don't know what the program will be. I am quite willing to say to you that our objective will be to preserve this 800-plus ship Navy in effective efficient form during that period. We have laid out a program to do that. It doesn't require the volume of ship construction that the Navy reviewed with the special committee that I think you were a member of. I think the Navy accepts this statement now. It does require a substantial volume of ship construction. As you know, we have increased the expenditures on this type of ship construction by 100 percent over the level of 1961. Representative BATES. But last year was less than the year before? Secretary MCNAMARA. It was still 100 percent of the 1961. 1 The Joint Committee report on "Nuclear Propulsion for Naval Surface Vessels" states the following on p. 12: "The Secretary of Defense told the committee that he would have to ask Congress for $163 million in order to change the new carrier to nuclear power. The Secretary testified that the additional $37 million above the Navy's estimate of $126 million would be needed to buy an extra squadon of aircraft for the nuclear carrier. In correspondence subsequently submitted to the committee by the Office of the Secretary of Defense, it was stated that the procurement and operating expense associated with this additional squadron over the life of the aircraft carrier is estimated to be $308 million. The cost estimated for this additional squadron is nearly two-thirds of the extra cost the Department of Defense attributes to the nuclear carrier over its lifetime. Obviously, aircraft costs are not related to nuclear propulsion and can be eliminated by not supplying the additional squadron of aircraft. Actually, Navy witnesses testified that the number of aircraft planned for the air group for the nuclear carrier proposed by the Navy is the same as the number of aircraft planned for the conventional carrier that the Secretary of Defense has decided to build. Therefore, in order to change the new carrier to nuclear propulsion it would not be necessary to spend the extra $308 million that the Secre tary of Defense apparently thinks is necessary. Representative BATES. And about one-half of what our committee should have had. In other words, 37 ships versus 70 ships. Secretary MCNAMARA. The Congress cut some out, I might add. Representative BATES. That is right, in the appropriations bill. Secretary MCNAMARA. Anyhow I think we can keep a modern Navy. I think we must. That is certainly my objective and as I know it is yours. I think this problem of numbers and cost is so vital here. Representative BATES. It is. Secretary MCNAMARA. You know from your past reviews of all this that we just cannot build an 800-ship Navy if it is going to include $199 million DLGN's and $126 million DDGN's. It just can't be done and it should not be done. Representative BATES. It would be $25 billion worth of ships? Secretary MCNAMARA. That is right. It is just wrong to do that. There are better ways to defend this country than that. Representative BATES. The thing I am more concerned about is after the 1970 period. That is where I get into trouble. That is where we phase out the World War II ships and the ones that come shortly after that. That is the thing I am really concerned about. Secretary MCNAMARA. We must develop a ship program and I think we have. We will review it with your committee next January. We must develop a ship program that will do that. I think the Navy will be in very close agreement with what that program is. NUCLEAR VERSUS CONVENTIONAL PREFERANCE Representative BATES. You indicated a while ago that you would prefer six conventional to five nuclear? Secretary MCNAMARA. I would. Representative BATES. You indicated that the Navy also felt that way? Secretary MCNAMARA. Well, I do think that they feel that way to be quite frank with you; yes. There are some pieces of paper that would tend to give the opposite impression.1 Representative BATES. I tried to find it in the testimony. I asked that question of either Admiral McDonald or Connally and they preferred the five. Mr. CONWAY. Admiral McDonald was very explicit that he would prefer five nuclear to six conventional. Secretary MCNAMARA. Read the paragraph. I read it this morning. Read the exchange of testimony. It doesn't come through that clearly. It is in your transcript of October 31 or October 30. Chairman PASTORE. That is all right, it is in there. (See p. 44.) Secretary MCNAMARA. The points I read from Admiral Griffin, Í think, indicate the importance of numbers. There is some other place in the testimony of the 30th and 31st that indicates Admiral McDonald also puts great weight on numbers as do most naval officers. 1 See p. 105, for memorandum from the Secretary of the Navy to the Secretary of Defense, dated Sept. 26, 1963, which states that theSecretary of the Navy and the Chief of Naval Operations consider: "***, that five new nuclear-powered task groups with carriers of the proposed CVA (N)-67 design will give the carrier strike force the combat effectiveness of six new conventional task groups with carriers of the CVA-67 design. " *6* * five new nuclear powered task groups, besides having greater combat effectiveness, will on an annual basis cost between $200 and $250 million less than six new conventional task groups.' (See also app. 8. p. 245, and testimony on pp. 44, 78, and 103-129.) The fact of the matter is that in antisubmarine warfare operations, it is the numbers of escorts and antisubmarine vessels that are absolutely essential. Representative BATES. That is right. I wrote to you about a year ago. I didn't recommend all nuclear. I recommended a task force of nuclear power. Secretary MCNAMARA. I agree. I proposed this nuclear frigate at a cost of $170 million in the fiscal 1963 budget in order to round out one nuclear task force. I made this recommendation myself to the Congress and there was considerable opposition to it, particularly in the Senate Armed Services Committee. COSTS OF NUCLEAR POWER Representative BATES. A year ago I wrote to you on this very point because I could not see all nuclear with the kind of bill we have coming up. Secretary MCNAMARA. This is the problem. I can't either. Representative BATES. Unless we could have narrowed the cost. Secretary MCNAMARA. I can't either with the kind of bill. Therefore I think we have to get the bill down while still striving for nuclear power as a foundation for large surface ships. But we will never get it at today's prices. (See footnote, p. 192.) Representative BATES. That is all I have, Mr. Chairman. Representative MORRIS. Mr. Secretary, there seems to be one overriding problem in this whole discussion, and that is the cost of a nuclear carrier or the cost of a nuclear task force versus a conventional task force. I think we can all agree, at least from what you have said and what the other people who have testified have said Chairman PASTORE. May I interrupt you for just a minute? How long do you expect to be? Representative MORRIS. Not very long. I will be through just in a few minutes. What can be done to bring the cost down? Does the Department of Defense have any suggestions or any studies going on? Secretary MCNAMARA. Yes. Representative MORRIS. What can we do, if we agree that nuclear propulsion has some advantages over conventional propulsion? What can we do to bring this cost down? Do we have any studies going on? Secretary MCNAMARA. Yes. We are approaching it from the point of view of total ships system cost because it doesn't make any difference to us whether we spend a dollar on a Typhon missile system or a nuclear powerplant. It adds to the ship cost. If we can get the total ship cost we can justify that ship cost out there, assuming it has a certain acceptable effectiveness ratio. We are working very hard on reducing the cost of a lot of the electronic and missile systems which have so added to the cost of these ships. SIZE AND WEIGHT OF NUCLEAR PROPULSION We understand that the AEC, and they can speak to it better than I can, is working on reducing the size and the weight as well as the cost associated with the nuclear power systems. It is even more important to us that the size and the weight be reduced than it is that the specific cost of the system be reduced because the size and weight of the powerplant, and so on, add tremendously to the size and weight of the ship beyond the cost of the nuclear system itself.1 Mr. RAMEY. We can reduce them by building some. 63, 73-75, 82-85, app. 2, p. 201.) (See pp. Secretary MCNAMARA. That is a fallacy. You don't have to build powerplants in order to reduce the size and weight of them. This $50 million you will spend will not require that we build a ship in order that you make some advances in development. Mr. RAMEY. But it does help to build more reactors. Every reactor you build Secretary MCNAMARA. I will pay for building a reactor for a destroyer on land. But I don't have to build a $138 million DDGN in order to learn whether or not we can get a smaller reactor. This is our problem. We are quite willing to contribute. As a matter of fact, we ought to be contributing to the AEC expenditures on this. Representative MORRIS. If you build a reactor, this is not the system. It is the tactics that you may be able to develop with the nuclear task force that may be important. Secretary MCNAMARA. We will have this nuclear task force operating so we can develop the tactics with that force. This is the task force that Mr. Bates was talking about. 1 See app. 2, p. 201, for a memorandum from the Secretary of the Navy to the Deputy Secretary of Defense dated Mar. 30, 1962, which encloses a review of the Navy's nuclear propulsion development program with particular emphasis on the prospects for and significance of achieving low weight and compact nuclear propulsion plants. The memorandum states in part: "There is now available a family of nuclear propulsion plants*** capable of powering every type of combatant ship, both submarine and surface, designed to carry the latest antiair or antisubmarine weapon systems. "In addition to work on reactor plant cycles, extensive effort has been devoted to various propulsion plant concepts in the attempt to achieve improved characteristics including lighter weight, compactness, and lower cost for naval nuclear propulsion plants. The nonreactor plant portions of these installations comprise almost one-half of the total volume and weight of these nuclear propulsion plants. These efforts have indicated that novel propulsion plant concepts, such as those based on aircraft technology, have not yet shown sufficient promise for conventional naval installations to warrant their serious consideration in coujunction with the more difficult nuclear plants. "In response to the Navy's requirements, considerable effort has gone into minimizing the size and weight of all of our naval nuclear propulsion plants. Detailed mockups have been built for each plant in order to optimize arrangements for minimum space and weight. In addition, extensive engineering testing including intensive operation of full-scale land prototypes has resulted in minimum size and weight of components for the greatly extended endurance of nuclear propulsion plants. There appears to be no prospect of significantly decreasing size or weight of nuclear propulsion plants for the foreseeable future without unduly and unwisely sacrificing essential requirements. * "Modern military needs have generated added requirements for increased shockproofness, larger sonar, higher powered electronics and other weaponry for both submarines and surface ships, together with greater operating depth and quietness for submarines. All of these new characteristics require increased weight and space. For example, the displacement of attack submarines which use the S-5W reactor plant has increased from 3,500 tons in Skipjack to about 4,300 tons for the latest attack submarine designs. This 800ton (23 percent) increase has been due principally to * *the operating depth, sound mounting propulsion plant components, and greatly improved sonar capability. The reactor plant weight has remained substantially unchanged. Thus, factors other than nuclear plant design criteria have had a significant effect on the growth in size of our nuclear submarines. These same general growth trends have been experienced in our surface ships. It is significant that experience with designing the Navy's modern frigates, cruisers, and carriers has shown that there is no major difference in size and displacement of ships, with similar military characteristics, whether they are conventionally or nuclear powered. "It is difficult to assess the effect a successful development of a low specific weight nuclear powerplant might have on the Navy's future shipbuilding program without knowing the cost of the successfully developed plant. Cost has been the major factor affecting the number of ships in all shipbuilding programs. It is doubtful that a low specific weight nuclear powerplant inherently means lower cost; the cost would probably be higher. "The AEC and Navy program to design, develop, and utilize a family of nuclear propulsion plants for the Navy has been most successful. This program has bridged the gap from laboratory to large-scale production and operation in a remarkably short time and in a most economical manner. It is evident that the Navy's research and development program is not only sound but has the best prospects for the foreseeable future for producing nuclear powerplants to meet the Navy's requirements for nuclear ships and submarines. "In view of the recognized advantages, Navy policy calls positively for movement in the direction of nuclear propulsion. The major factor in determining whether these nuclear-powered ships will be built as has been proposed will be their increased cost as compared with their conventional counterparts. Decrease in cost of our nuclear propulsion plants has resulted in part from improved technology, but mostly from multiple competitive production of these proven plants. Thus, for the foreseeable future, the best means at our disposal to reduce costs of these nuclear-powered ships is to expand the nuclear shipbuilding effort." |