Navy’s Gilday: ‘Cost’ was the driving factor in amphib pause

Chief of Naval Operations Adm. Michael M. Gilday speaks at a Pentagon press briefing, Washington, D.C., April 2, 2020. (DoD photo by Lisa Ferdinando)

WASHINGTON — The Navy’s top admiral today said a key reason why the Pentagon chose to pause its amphibious warship buys came down to the price tag, especially the projected increases between the first, second and third vessels in the second flight of the class.

“The driving issue here that drove that decision had to do with cost,” Adm. Michael Gilday, chief of naval operations, told attendees at the McAleese Defense Programs conference in Washington, DC.

To the vocal dismay of the Marine Corps, the new fiscal 2024 budget takes a strategic pause in buying amphibious ships, potentially truncating the buy for the San Antonio-class amphibious transport docks — if Congress allows it. This week, multiple Pentagon leaders, including Gilday today, said the decision was made chiefly by the Office of the Secretary of Defense, rather than the Navy or Marine Corps.

“The cost of that ship has gone from $1.47 billion [for the first ship] to the second ship at $1.5 [billion]. The third one that we’re contracting for right now is probably going to be between $1.9 and $2 billion,” Gilday said, referring to second flight of the San Antonio-class. “So that increase will be somewhere between 21 and 25 percent… We’re moving in the wrong direction.”

Gilday is the latest senior Navy official to address the decision. Marine Corps Commandant Gen. David Berger publicly declined to explain the decision last week, deferring to Navy Secretary Carlos Del Toro. Navy Undersecretary Erik Raven largely declined to answer questions about the pause in a roundtable with reporters, except to thank Congress for their support. And this week, a Marine Corps spokesman told Breaking Defense the pause threatens to shutdown the production line.

Gilday argued the Navy’s decision was ultimately about protecting taxpayer dollars, including amid construction delays.

“I just mentioned we haven’t put the [third] ship on contract yet. The line is already running behind,” Gilday said.

“So, as a taxpayer, if you want to give the vendor money next year for a ship that they can’t bend metal on,” he continued, cutting himself short before finishing the thought.

HII is the primary contractor for the San Antonio-class. In a statement to Breaking Defense following the fiscal 2024 budget’s release, it said “any disruption in the production line could have a significant impact on the defense industrial base.” The company did not immediately respond to Gilday’s remarks today.

The CNO finished his remarks about the San Antonio-class today by saying the price needs to be “competitive.”

“Actually, with that production line [and] that ship, it’s not competitive when one company builds it,” he added.