Navy furnished equipment refers to the costs for
technologies and equipment that the Navy purchases and has
installed. Such equipment typically accounts for about 30%
of the total budget for recent vessels. The growth of this
significant cost sector has remained relatively low at 5%
(Figure 4). The reasons for this is that the Navy benefits
from economies of scale due to the affordability through
commonality approach that it is beginning to use when
procuring equipment in bulk. The Navy is however still far
from creating an organized trans-vessel class commonality
approach to its equipment acquisitions.
3. Underbudaetina and Price Increases - - -
Underbudgeting and price increases have dramatically
increased the levels of material cost growth. For the San
Antonio, Nimitz, and Virginia class vessels, material cost
was the most significant component of cost growth (Figure
6). DDG 91 had $22 million in material cost savings due to
consolidation of Ingalls Shipyard with Avondale Shipyard
under Northrop Grumman. Therefore materials were purchased