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For CSC - Advanced Marine Center & Center for the Commercial Deployment of Transportation Technologies (CCDoTT)
Based on a concept design and costing input from Herbert Engineering Corp.
PERCEPTION is a registered trademark of SPAR Associates, Inc. ESTI-MATE, MAT-PAC, WORK-PAC, and PERT-PAC are trademarks of SPAR.
PERCEPTION Trade Secrets and Proprietary Properties Of SPAR Associates, Inc. Annapolis, MD 21401
3 Table of Contents 1.0 Introduction ................................................................................................................... 5 2.0 The Cost Estimates ..................................................................................................... 15 2.1 Cost Estimate Work Breakdown Structure ............................................................. 15 2.1.1 Non-Recurring Costs ....................................................................................... 15 2.1.2 Recurring Costs ................................................................................................ 18 2.1.3 Program Schedule ............................................................................................ 25 2.1.4 Series Construction Programs .......................................................................... 29 2.1.5 Management Costs & Fees .............................................................................. 31 2.1.6 Cost Risk .......................................................................................................... 32 2.1.7 Labor Rates ...................................................................................................... 35 2.1.8 Material Costs .................................................................................................. 35 2.1.9 Profit ................................................................................................................ 36 2.1.10 Transport Factors ........................................................................................... 36 2.1.12 National Defense Funding (NDF) .................................................................. 37 2.1.13 Extended Modularization Build Strategy Cost Benefits ................................ 39 2.1.14 Required Freight Rate .................................................................................... 43 3.0 Basis for the Cost Estimate ......................................................................................... 52 3.1 Cost Estimating Methodology ................................................................................ 53 3.2 Impact of Build Strategy on Cost............................................................................ 55 3.2.1 Modern Shipbuilding Build Strategy ............................................................... 56 3.2.2 Modular Construction ...................................................................................... 57 3.2.3 Outfitted Hull Block Construction ................................................................... 58 3.2.4 Extended Shipbuilding Modules ...................................................................... 60 3.3 Generic Shipyard Costs........................................................................................... 63 3.4 Shipyard Productivity Factors................................................................................. 64 3.4.1 Extended Modularized Equipment & Outfit Option ........................................ 69 3.5 Generic Material Costs ........................................................................................... 71 3.5.1 Adjusting Generic Material Costs for Type Contract ...................................... 71 3.5.2 Material Cost Escalation/De-Escalation .......................................................... 72 3.6 Cost Risk ................................................................................................................. 73 3.6.1 Cost Risk of the Production Estimate Data.......................................................... 74 3.6.2 Predicting Production Overlap Rework Costs ..................................................... 76 3.6.3 Estimating Cost Risk of Overlap Rework ............................................................ 78 3.6.4 Estimating Cost Risk of Shipbuilder Inexperience .............................................. 80 3.6.5 Estimating Cost Risk of Engineering Quality ...................................................... 83 3.6.6 Estimating Cost Risk Due to Tight Production Schedule .................................... 86 3.6.7 Cost Risk on Follow Ship Programs .................................................................... 87 3.6.8 Cost Risk versus Contingency ............................................................................. 87 4.0 Non-Recurring Detail Production Engineering and Planning .................................... 88 4.1 U.S. Navy Ships Non-Recurring Costs ................................................................. 88 4.2 Commercial Non-Recurring Costs .......................................................................... 89 5.0 Manpower Requirements ............................................................................................ 91 6.0 Follow Ship Cost Estimates ........................................................................................ 94 6.1 Labor Cost Learning ............................................................................................... 94
4 6.2 Material Cost Learning (Discounts)........................................................................ 95 7.0 Commercial Prime Contractor Management Plan ...................................................... 96 Appendix A: OUTLINE SPECIFICATION FOR HST-160x53 TRAILER SHIP ........... 98 Principal Dimensions: ................................................................................................... 98 Propulsion: .................................................................................................................... 98 Electrical Power: ........................................................................................................... 98 General Arrangement: ................................................................................................... 99 Hull Structure: ............................................................................................................... 99 Lightship Weight Estimate (metric tonnes): ................................................................. 99 Capacities: ................................................................................................................... 100
1.0 Introduction
The High-Speed Trimaran (HST) Trailer Ship study has been conducted under a Center for the Commercial Deployment of Transportation Technologies (CCDoTT) funding and High Speed Ship technology development program. The Navy Strategic Mobility & Combat Logistics Office (OPNAV N42) is the primary stakeholder of CCDoTT, and CSC-AMC is the prime contractor. The HST design team, which is led by CSC/Advanced Marine Center and Herbert Engineering Corp., has designed the ship to be able to serve in the American Marine Highway system to carry domestic trailer traffic between ports along the U.S. coast lines. This is a Dual-Use design that also addresses the Navys need for a troop, equipment and other logistics support transport ship to combat theatres around the world on an as needed basis. SPAR Associates, Inc. produced this report to estimate the design and construction costs for two trailer ship designs: a Pure Commercial HST140-53 design and a Dual-Use HST160-53 (Figures 1.0-1 through 1.0-5). The Dual-Use design is somewhat larger in size than the pure commercial ship to accommodate greater fuel capacities for transoceanic military service and higher-than-commercial speeds. The Dual-Use design has larger 53 foot trailer capacity of 160 versus 139 for the Pure commercial Design. The reason for estimating these two designs is to determine the ship construction costs of the Dual-Use ship to meet National Defense Funding (NDF) features required to support the Dual-Use use in Sealift transportation missions. Section 2.1.12 offers estimates in this regard. The estimates were all developed using SPARs ESTI-MATE cost model modified for trimarans. The estimates assume that design and detailed engineering will be performed by an expert naval architecture and marine engineering company. The construction is assumed to be performed by a commercially competitive mid-tiered or big six yard U.S. shipbuilder using modern hull block construction methods. A third estimate of the Dual-Use design also has been provided in Section 2.1.13 to simulate additional construction cost savings possible from the application of extended modular construction approach to ship equipment and outfit components. This approach expands upon hull block construction by outsourcing selected major hull blocks for manufacturing, assembly and outfitting. In addition, design and construction of equipment and various outfit components are outsourced for modular fabrication and assembly so that these modules can be readily installed later at the assembly yard on unit, on block and/or on board. Such an approach requires a carefully planned and executed engineering process in order for the modules to be quickly, easily installed and integrated with other ship systems and infrastructures. Further discussions of these methods are provided in Section 3.2.4. While some may argue that extended modularization is not currently possible due to virtually no vendor infrastructure and too few other series ship programs needed to support the added engineering efforts. Nevertheless, U.S.
6 shipbuilders need to at least begin pursuing this approach. It is being aggressively exploited by European shipbuilders with sizeable cost savings benefits resulting.
Figure 1.0-1: Dual-Use HST160-53 General Arrangement: Profile & Cargo Decks
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The cost model utilizes basic ship design characteristics of structures; propulsion systems; electrical generation and distribution systems; electronics and communications systems; auxiliary and outfit systems. Figure 1.0-6 presents principal characteristics of the Dual-Use HST160-53 used in the ESTI-MATE cost analysis. Final ship hull lengths and beams are slightly different based on the calculation refinements made in task 3. These refinements do not alter the cost estimates.
Main Hull: LOA, Length Overall LWL, Length Waterline Beam, Molded Depth, Molded Draft, Design Full Load, Molded Cubic Number (LWL x Beam x Depth) SVI, Ship Volume Indicator (LWL x Beam x Draft) Cb, Block Coefficient SDI, Ship Displacement Indicator (Cb x SVI) Total Full Load Displacement (Main Hull Only) Machinery Spaces: Volume of Machinery Space (Not incl. Uptakes) Super Structure: Super Structure Deck Area Volume of Super Structure (Incl. Storage Spaces Below) Cargo Areas: Number Decks Below Weather Deck Total Areas of Cargo Decks OMS Volume Cargo Decks OMS Average Deck Heights Side Hull: LOA, Length Overall LWL, Length Waterline Beam, Molded Depth, Molded Draft, Design Full Load, Molded Cubic Number (Depth) SVI, Ship Volume Indicator (LWL x Beam x Draft) Cb, Block Coefficient SDI, Ship Displacement Indicator (2 x Cb x SVI) Total Full Load Displacement (Both Side Hulls) M M M M M CUNO(M) CUM COEF CUM MTONs 101.00 92.92 5.30 21.00 7.50 10,342 3,694 0.486 3,588 3,944 SQM CUM M 2.00 8,550 29,925 5.00 SQM CUM 5,111 17,887 CUM 12,763 M M M M M CUNO(M) CUM COEF CUM MTONs 195.00 179.40 15.00 21.00 7.50 58,545 20,909 0.520 10,872 13,084
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Max Beam Overall at Deck: Equivalent Beam: Combined Total Cubic Number (Combined Total): Combined Cb, Block Coefficient: Combined Ship Displacement Indicator, SDI: ACCOMMODATIONS Ship's Crew Number (MSC) Commissioned Officers Non-Commissioned Officers Enlisted Troop Force Overnight Passengers PAX Daytrippers
M M CUNO(M) Cb
20 20
Figure 1.0-6: Dual-Use HST160-53-High-Speed Trimaran Trailer Ship Figure 1.0-7 presents weight and displacement characteristics of the Dual-Use HST16053.
Displacement: Total Displacement at Full Load Draft Total Displacement at Full Load Draft Light Ship Weight Light Ship Weight Fuel & Load Items Fuel & Load Items Total Payload Displacement Total Payload Displacement CARGO CAPACITY Designed Deck Space per MTON Cargo Designed Deck Space per MTON Cargo Required Cargo Deck Space Number of TEUs Number of Vehicles at Capacity Average Weight per Vehicle Average Deck Space per Vehicle Liquid Cargo Capacity SQFT/MTON SQM/MTON SQM TEU NO. MTON/EA SQM CUM 400 160 20.00 MTON CUM MTON CUM MTON CUM MTON CUM 17,011 16,593 10,599 10,338 3,520 3,433 2,892 2,821
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BBL -
Figure 1.0-7: Dual-Use HST160-53-High-Speed Trimaran Trailer Ship Weights & Displacements Figure 1.0-8 provides the Dual-Use HST160-53 light ship weights for each SWBS Group.
SWBS Group Weights 1 Hull 2 Propulsion 3 Electrical 4 Electronics & Navigation 5 Auxiliary Systems 6 Outfit & Furnishings 7 Armament MTONS MTONS MTONS MTONS MTONS MTONS MTONS Total: Computed 7,200 1508 493 35 698 334 10,,267 Includes all HVAC, piping, & deck machinery Includes all hull outfit items & paint Misc. armament foundations, small arms, etc. only Includes masts, foundations, stacks, ramps, etc. Includes all propulsions systems, shafting, gear boxes, thrusters, etc. Includes generators, transformers, batteries, panels, lighting, & distribution systems
Figure 1.0-8: Dual-Use HST160-53-High-Speed Trimaran Trailer Ship Light Ship Weights
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400,000
252,617
336,453
23,683 31,543
6,015 8,011
Figure 2.1-1: Estimated Non-Recurring Labor Hours Figures 2.1-2 presents the non-recurring cost estimates for each of the HST designs.
3,007 4,005
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Figure 2.1-2: Estimated Non-Recurring Costs for Conventional Hull Block Construction Build Strategy The non-recurring cost estimates are based on the assumption that the HST designs are relatively simple and straight forward. Outfitting is not expected to be exotic or complex with the exception of the propulsion systems. The commercial shipbuilder is expected to have a lower non-recurring cost compared to a military design and should follow closely commercial design and engineering practices. The cost model places costs for producing jigs and templates, etc. also under this NonRecurring Production Engineering and Detail Planning. The non-recurring cost estimates further assume that production engineering will be focused on ways to simplify the manufacturing and building processes. This engineering effort can capitalize on engineering and production standards in order to exploit the cost saving benefits of repeatable interim production products. For example, the side hulls are almost identical.
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18 The estimates also assume that detail production planning is of a high level that effectively schedules work at the earliest, most productive stages of construction (i.e., pre-outfitted hull blocks) consistent with available facilities, material and quality technical and engineering information. The scheduling will effectively coordinate all of resource requirements throughout the various stages of construction.
Figure 2.1-3: Recurring Cost Estimate Work Breakdown Structure SWBS 100: Normally, the cost model requires structural weights to be summarized by major structural components (i.e., production interim products): decks, double bottoms, side shells, frames, transverse and longitudinal bulkheads, superstructure, etc. Each of these components have different manufacturing and assembly characteristics (i.e., require different production processes), and therefore each can be assigned different cost estimating relationships (CERs). Material costs also will vary depending upon the materials used (mild steel, high strength steel aluminum, composites, etc.) As discussed in Section 3.4, Shipyard Productivity Factors, the structural CERs are modified with appropriate productivity factors developed for each type of ship builder. The CERs also will be modified for the overall size of the hull to account for the general
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19 tendency that larger hulls are less expensive to build on a structural weight basis (some measured economy of scale). The cost model places all structural work, including ramps, foundations, masts, and stacks under SWBS Group 100. Structural material costs are estimated on the basis of weight and type. The unit cost, however, is increased by 35% to account for material transportation (about 10%), scrap (typically 12%-16% to as much as 25% for structures with much shape and complexities), welding materials and gases (7%-8%), and classification society fees (about 1%). Figure 2.1-4 presents the steel prices and allowances used for the HST estimates.
Figure 2.1-4: Steel Prices & Allowances Used for HST Estimates SWBS 200: Somewhat divergent from the U.S. Navys SWBS, the cost model places all piping and ventilation systems under SWBS Group 500 (Auxiliary Systems). Therefore, Propulsion Support Systems (SWBS 250-259) & Fuel/Lube Support (SWBS 260-269) were moved to SWBS Group 500. SWBS 200 also includes primary costs for electric drive systems, if applicable, such as diesel generators, electric motors, pods, etc. In addition, costs for thrusters, if applicable, also are included under the cost models SWBS 200.
SWBS 300 carries all electric generation equipment for ship services (not for propulsion), as well as all electrical distributed systems, lighting, etc. The cost model estimates electrical costs based on the type of electrical generation system, including emergency generation, and the power output (kW). For combatant type ships, the cost model has options to reflect the assumption that the electrical distribution costs are considerably higher, by factors of about three-five times
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20 that for a commercial vessel. This assumption accommodates added costs for shock requirements and for power redundancy required for complex combatants.
SWBS 400: The cost model offers essentially two levels of electronics: standard electronics, communications and control systems for commercial ships and various elements of C4ISR for military ships.
SWBS 500: The cost model includes the following auxiliary systems plus others: Fans, duct work, & HVAC All piping systems, including piping support systems for main propulsion (lube oil, etc.) Anchor/mooring systems & deck machinery Cargo cranes
For combatant type ships, the cost model has options to reflect the assumption that piping systems costs are higher than for commercial vessels. This assumption accommodates added costs for shock requirements. SWBS 600: The cost model includes the following in SWBS Group 600, Outfit & Furnishings Systems plus other relevant outfit systems: Paint Hand rails, stanchions, & walkways Floors, ladders, grates Life boats, rafts Insulation Metal doors, sheathing & bulkheads Accommodations outfit & furnishings
The cost estimates do not include costs for load items, fuels, lubricating fluids, etc.
SWBS 700: CERs are available to a limited extent for weapons systems, mostly for their foundations. For the DUAL-USE HST160-53, the cost model has not estimated the costs for armaments.
SWBS 800: U.S. Navy contracts catalog both recurring and non-recurring technical costs together under SWBS 800. Therefore, the majority of engineering costs appear for the lead ship. The cost model, instead, catalogs only the recurring costs under SWBS 800
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21 and catalogs non-recurring costs under a separate project WBS. This separation allows the non-recurring costs to be easily allocated to all ships of a series program. Technical Services, includes only technical support for minor change orders and fine tuning of production engineering and planning after non-recurring activities are complete. For both HST160-53 designs, the assumed percentage of total production labor hours (SWBS Groups 100-700) for shipyard technical support services was set at 8%. SWBS 900: For shipyard production support services, a figure of 20% of production labor hours (SWBS Groups 100-700) was used for the estimate. This is a figure not atypical of North American commercial yard that employ reasonable control over this level of effort and follows a regimen that minimizes unnecessary costs. A major component of this cost lies in supervision and production control. For the conventional hull block construction scenario, no costs have been estimated for transportation of hull modules to a central erection site. However, for the extended modularization scenario, costs are estimated to load/barge/unload the side hulls and deckhouse structures at the final assembly yard. The estimates reflect a one-piece joining method for final hull block erection. Design and construction of special erection site equipment such as float barges, etc. are not included as it is assumed that the ship size is not so large as to present special erection and launching operations. For both scenarios, no costs are estimated for ultimate delivery to a location away from the shipyard. The cost model places costs for producing jigs and templates, etc. under the NonRecurring Detail Production Engineering and Planning described above. General support costs, a difficult source of cost to control because it is mostly level of effort, can be reduced. 1. Early stage outfitting (on unit and on block) eliminates considerable support costs required for on board outfit efforts. 2. Early stage outfitting minimizing or eliminating scaffolding and related support costs. 3. Improved material flow to work areas minimizes material transport costs. 4. Higher level of work skills and higher quality of production engineering reduces supervision and quality assurance costs. SWB 1000: The cost model uses an additional SWBS group outside normal U.S. Navy practice. The additional SWBS 1000 is used for costs outside those for production and technical/shipyard services (ABS, financing fees and MARAD title XI when applicable, etc.) and for various shipbuilding risk insurance costs, warranty bonds, etc. This SWBS group also includes a contingency cost item for change orders and for yet-undefined ship system requirements.
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22 Figures 2.1-5A and 2.1-5B summarize the lead ship cost estimates for the two HST designs.
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% % %
Trim aran Cost Model NON-RECURRING COSTS Ship Type: Dual-Use 160x53' HST Trailership Version: DUSE-1 Date: 20-May-09 Basic Research - Concept Design $ Prelim inary Design $ Functional Design $ Production Engineering & Constru $ Production Planning & Scheduling $ Purchase Specs & Support $ ILS, Spares & Load Item s $ Contract Engineering Managem ent $ Contingency Labor: $ Contract Detail Design Package $ Miscellaneous Material & Support:$ Jigs, Cradles, & Tem plates, Tools $ TOTAL NON-RECURRING COSTS: $ 287,934 4,400,815 40,855,760 3,029,464 769,388 384,694 1,335,889 1,906,845 4,465,059 5,273,483 62,760,741
% 10.00 %
Pricing: Technical Wage $/Mhr: $ 24.56 $ Production Wage $/Mhr: $ 20.47 $ % Overhead: 125.00 % % G&A Labor: % % G&A Material: 10.00 % % Profit: 12.00 % Navy C4ISR Jones Act Prem ium Material Factor: Current Year: Additional Material Escalation: Shipyard Material Cost Factor: Combi ned M ateri al Cost Factor: SWBS Group 1 2 3 4 5 6 7 8 9 10 No
Non-Recurri ng Engineeri ng & Production Pl anni ng Standard Work Week: Labor Rates: Senior Professional/Manager $ Engineer $ Designer/Draftsperson/Planner $ Clerical $ Contingency (w eighted average) $
40.00 hours/w eek 143.77 128.35 96.04 61.62 119.02 per per per per per hour hour hour hour hour
No 1.00 2009 Shipyard Tech Support Labor Factor: 1.00 1.000 = none Steel Productivity Factor: 1.00 MILSPEC Prem .=1.21 Outfit Productivity Factor: 1.00 On-Block Paint Factor: $ Labor 10,526,233 1,608,453 1,568,427 90,056 6,099,622 3,852,375 2,279,536 4,749,033 $ 30,773,735 $ 53,022,199 $ Costs $ Costs $ Costs $ Costs $ 169,856,871
Structures Propulsion Electrical Electronics & Navigation Auxiliary Systems Outfit & Furnishings Armament Technical Support Shipyard Services Margin, Bonds & Insurance Lead Ship Totals: Non-Recurri ng Costs:
Production Hrs/LSW:
Weight M -Hrs M odul ar Production M Tons Per M ton M -Hrs M -Hrs 7,200 71.43 514,298 1,508 52.11 78,587 493 155.44 76,631 35 125.71 4,400 698 426.96 298,019 334 563.54 188,222 9.04 92,813 8.0% 22.60 232,031 20.0% 10,268 144.62 1,485,001 % Total Lead Shi p G1-7 M an-Hours: 445,500 30% Techni cal Support: 3.40% Producti on Shipyard Servi ces: 11.35% Producti on Fees & Insurance: 21.21% Producti on Non-Recurri ng Costs: 41.38% Producti on Production Costs (1-7): 144.62
Shipyard Esti mated Schedules 1.1000 No Ext.Modules 1.5000 1.000 Est. Detail Engineering Tim e: 24.0000 Months 1.1000 1.000 Est. Construction Tim e: 30.0000 Months 0.9500 40 % Hours On Bl ock 6.0000 Months Overlap: RMS Men/Month: 322 0.11 Months $ $ G&A 2009 $ G&A $ Profit $ Labor Only $ M aterial M aterial Only Labor + Material Overhead Total 13,157,792 10,577,759 1,057,776 4,238,347 39,557,907 2,010,567 46,450,695 4,645,069 6,565,774 61,280,559 1,960,534 9,942,150 994,215 1,735,839 16,201,166 112,570 1,238,319 123,832 187,773 1,752,550 7,624,527 11,697,610 1,169,761 3,190,982 29,782,502 4,815,468 9,394,646 939,465 2,280,234 21,282,188 2,849,420 25,000 2,500 618,775 5,775,231 5,936,292 5,927,689 592,769 2,064,694 19,270,476 29,240,185 2,924,019 3,859,704 36,023,908 $ 38,467,169 $ $ 124,494,053 $ 12,449,405 24,742,123 $ 230,926,486 $ $ $ 9,738,542 $ 7,531,289 $ 70,292,029 Estim ated Cost for Prim e Contractor Managem ent Team : $ Over-All Program M anagement Fee: 0.0% $ Total Price w ith Prim e Contractor Managem ent: $ 301,218,515 Estimated Construction Ri sk: $ 26,103,333 73.6% GR 1-10 Esti mated Rework Ri sk: $ 664,524 0.49 Shipyard Experience Rating (0-1): $ 49,200,575 Engi neering Performance (0-1): $ 0.45 97,504,825 Production Schedul e Cost Ri sk: $ 1,431,563 Total Price with Ri sk: $ 476,123,334
$ $
230,926,486 301,218,515
Figure 2.1-5A: Cost Estimate for Conventional Hull Block Construction, Dual-Use HST160-53
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% % %
Trim aran Cost Model NON-RECURRING COSTS Ship Type: Pure Com m ercial 140x53' HST Trailership Version: PCOMM-1 Date: 14-May-09 Basic Research - Concept Design $ Prelim inary Design $ Functional Design $ Production Engineering & Constru $ Production Planning & Scheduling $ Purchase Specs & Support $ ILS, Spares & Load Item s $ Contract Engineering Managem ent $ Contingency Labor: $ Contract Detail Design Package $ Miscellaneous Material & Support:$ Jigs, Cradles, & Tem plates, Tools $ TOTAL NON-RECURRING COSTS: $ 216,188 3,304,240 30,675,512 2,274,596 577,675 288,838 1,003,018 1,431,706 2,959,701 3,765,217 46,535,292
% 10.00 %
Pricing: Technical Wage $/Mhr: $ 24.56 $ Production Wage $/Mhr: $ 20.47 $ % Overhead: 125.00 % % G&A Labor: % % G&A Material: 10.00 % % Profit: 12.00 % Navy C4ISR Jones Act Prem ium Material Factor: Current Year: Additional Material Escalation: Shipyard Material Cost Factor: Combi ned M ateri al Cost Factor: SWBS Group 1 2 3 4 5 6 7 8 9 10 No
Non-Recurri ng Engineeri ng & Production Pl anni ng Standard Work Week: Labor Rates: Senior Professional/Manager $ Engineer $ Designer/Draftsperson/Planner $ Clerical $ Contingency (w eighted average) $
40.00 hours/w eek 143.77 128.35 96.04 61.62 119.02 per per per per per hour hour hour hour hour
No 1.00 2009 Shipyard Tech Support Labor Factor: 1.00 1.000 = none Steel Productivity Factor: 1.00 MILSPEC Prem .=1.21 Outfit Productivity Factor: 1.00 On-Block Paint Factor: $ Labor 8,733,468 818,604 1,238,788 90,056 3,881,465 3,066,076 1,711,532 3,565,691 $ 23,105,679 $ 39,810,374 $ Costs $ Costs $ Costs $ Costs $ 117,854,739
Structures Propulsion Electrical Electronics & Navigation Auxiliary Systems Outfit & Furnishings Armament Technical Support Shipyard Services Margin, Bonds & Insurance Lead Ship Totals: Non-Recurri ng Costs:
Production Hrs/LSW:
Weight M -Hrs M odul ar Production M Tons Per M ton M -Hrs M -Hrs 5,232 81.56 426,706 820 48.78 39,996 270 224.17 60,526 35 125.71 4,400 495 383.12 189,643 297 504.39 149,804 9.75 69,686 8.0% 24.37 174,215 20.0% 7,149 155.96 1,114,975 % Total Lead Shi p G1-7 M an-Hours: 334,493 30% Techni cal Support: 3.69% Producti on Shipyard Servi ces: 12.31% Producti on Fees & Insurance: 21.74% Producti on Non-Recurri ng Costs: 44.22% Producti on Production Costs (1-7): 155.96
Shipyard Esti mated Schedules 1.1000 No Ext.Modules 1.1000 1.000 Est. Detail Engineering Tim e: 24.0000 Months 1.1000 1.000 Est. Construction Tim e: 30.0000 Months Overlap: 0.9500 40 % Hours On Bl ock 6.0000 Months RMS Men/Month: 243 0.11 Months $ $ G&A 2009 $ G&A $ Profit $ Overhead Labor Only $ M aterial M aterial Only Labor + Material Total 10,916,835 7,798,819 779,882 3,387,481 31,616,486 1,023,255 24,421,056 2,442,106 3,444,603 32,149,624 1,548,485 9,389,394 938,939 1,573,873 14,689,479 112,570 1,238,319 123,832 187,773 1,752,550 4,851,831 8,559,405 855,941 2,177,837 20,326,479 3,832,594 7,787,023 778,702 1,855,727 17,320,122 2,139,415 25,000 2,500 465,414 4,343,860 4,457,114 4,486,722 448,672 1,554,984 14,513,184 20,798,200 2,079,820 2,745,362 25,623,382 $ 28,882,099 $ $ 84,503,939 $ 8,450,394 17,393,053 $ 162,335,165 $ $ $ 6,724,918 $ 5,584,235 $ 52,119,527 Estim ated Cost for Prim e Contractor Managem ent Team : $ Over-All Program M anagement Fee: 0.0% $ Total Price w ith Prim e Contractor Managem ent: $ 214,454,692 Estimated Construction Ri sk: $ 18,099,049 72.6% GR 1-10 Esti mated Rework Ri sk: $ 484,922 0.49 Shipyard Experience Rating (0-1): $ 37,296,437 Engi neering Performance (0-1): $ 0.45 73,209,027 Production Schedul e Cost Ri sk: $ 612,746 Total Price with Ri sk: $ 344,156,873
$ $
162,335,165 214,454,692
Figure 2.1-5B: Cost Estimate for Conventional Hull Block Construction, Pure Commercial HST140-53
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For the extended modularization build strategy option, more advanced and complete detailed engineering will be required. The following Figure 2.1-6 presents the construction schedule for the Dual-Use HST16053. This particular build strategy allows for the outsourcing of several major hull blocks: bottom sections of the side hulls (complete with installations of diesel generators, motors shafting and props; and the outfitted deckhouse in perhaps multiple sections). This schedule provides for the barging of these blocks to the assembly yard. It has been assumed that erecting and launching trimarans of these sizes is not a particularly big problem for several of the U.S. mid-tiered commercial shipyards.
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A cross-check of whether or not this schedule is reasonable is reflected in the estimated manpower requirements (See Section 6). Figure 2.1-7a illustrates that these estimated manpower requirement figures are well within reasonable levels available for design and construction of a ship of this size. Figure 2.1-7b shows estimated production manpower requirements.
Figure 2.1-7a: Combined Non-Recurring and Lead Ship Recurring Manpower Requirements for Conventional Hull Block Construction of Dual-Use HST160-53
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Figure 2.1-7b: Estimated Lead Ship Production Manpower Requirements for Conventional Hull Block Construction of Dual-Use HST160-53
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Figure 2.1-8: Construction Costs for Series Ship Production, Dual-Use HT60-53
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30 Figure 2.1-9 provides averaged estimates that allocate non-recurring costs across the number of ships in a series. This chart shows both should costs and should cost plus estimated total risk cost. The should cost equates to the likely price bid by a skilled and experience engineering firm and a well organized shipbuilder experienced with successfully executing modern hull block construction methods. These are should prices applicable for what we should expect from U.S. companies. Should prices from foreign world class shipbuilders should be expected to be considerably lower due to their greater levels of productivity and their abilities to purchase equipment and materials at prices lower than what we typically expect here in the U.S. Another way of visualizing the should cost prices is to envision the price bid by a commercially competitive U.S. shipyard experienced in pre-outfitted hull block assembly design and construction methods. This bid price would consider a) The assumed need for the shipbuilding contract, b) Include allowances for controllable and carefully managed shipbuilding risks c) Assume a well managed yard building to a well engineered and comprehensive detail design. Section 2.1.6 describes in more detail a breakdown of cost risk. The primary elements of this total risk will depend upon the relative skills and experience of the engineering and of the shipbuilder. Recent examples of serious budget problems with both commercial and naval construction programs have, in large measure, been reflected in the estimates of the risk figures. The more skilled and experienced the contractor, the lower one would expect the actual risk to be. Each contractor will likely assess its own levels of risk and price its bid accordingly. Therefore, the illustrated range between should cost and what includes total risk is where bids are likely to fall.
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Figure 2.1-9: Average Design & Build Costs for Conventional Hull Block Construction of Dual-Use HST160-53 Details of cost risk are provided in Sections 2.1.6 and 3.6.
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$500
$2
Est. Engineering Performance Cost Risk
$300
$200
$233
Figure 2.1-10: Estimated Lead Ship Total Price with Cost Risk for Conventional Hull Block Construction Build Strategy for Dual-Use HT160-53
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33
Figure 2.1-11: Estimated Cost Risk for Conventional Hull Block Construction Build Strategy, Dual-Us HST160-53 With an estimated little overlap of engineering and production, the cost risk for rework due to an overlap should be relatively small. Also, the build schedule is not aggressive, so the cost risk due to cramped scheduling also should be minimal. Risk here defines a range of costs above the should cost to reflect what a shipbuilder may require in his bid to accommodate a number of adverse variables: Costs, such as those estimated for equipment and materials, may become greater due to economic uncertainties, currency fluctuations, etc. The shipbuilder may exact a high degree of rework due to having too much detail engineering not being complete in time to support an efficient production schedule The bidding yard may expect higher costs due to the fact that the yard may have little actual experience building a ship of this type. In addition, production may no longer enjoy having a highly skilled work force. A detail engineering effort that has not performed well often results in much higher production costs and schedule delays. If the production schedule is too short, requiring higher than normal levels of resources to manage can result in higher costs in production.
33
34
Details of the cost risk estimates are provided in Section 3.6. Figure 2.1-13 presents a range of potential lead ship costs (including non-recurring costs) for the Dual-Use HST160-53 design: Minimum costs that does not include any risk nor a 10% contingency for unknown ship systems, etc. Should costs that include the 10% contingency, but no risk. Estimated maximum cost that includes contingency plus 100% estimated risk. More likely maximum cost that included contingency plus 67% estimated risk.
The cost at 100% risk hopefully is not likely. According to generalized probability theory, 67% of the total risk can relate to an 80% probability. By identifying the major areas for cost risk, efforts should focus on working to eliminate them. Only then will a contract opportunity have more potential for success, and less potential for ultimate failure should the risks not be accommodated nor remediated.
Figure 2.1-13: Range of Potential Costs for Lead Ship, Dual-Use HST160-5
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35
Non-Recurring Engineering Labor Senior Professional/Manager Engineer Designer/Draftsperson/Planner Clerical Contingency (weighted average)
Commercial Ship Builder $ $ $ $ $ 143.77 128.35 96.04 61.62 119.02 Commercial Ship Builder $ $ 125% $ $ 55.26 46.05 24.56 20.47
Shipyard Recurring Labor Technical Wage/Hour Production Wage/Hour Overhead Technical Wage/Hour w/OH Production Wage/Hour w/OH
Figure 2.1-14: Applied 2009 US$ Labor & Overhead Rates The above labor rates do not include any profit which is added afterwards as described in Section 2.1.9.
35
36 A 10% mark-up (general and administrative costs) was applied to the material cost estimates. This mark-up includes any burden rate applied by the shipyard, but does not include any profit which is added afterwards as described in Section 2.1.9.
2.1.9 Profit
From 1999-2000, U.S. shipbuilders reported profits of over 11%. For the HST estimates, a profit rate of 12% was used. Profit is applied to all costs: labor, material, subcontracted services, overhead and material G&A costs.
15.78
Dual-Use HST160- Dual-Use HST160- Pure Commercial 53 Conventional 53 Conventional HST140-53 Hull Block Hull Block Conventional Hull Construction - 26 Construction - 30 Block Construction KTS KTS - 26 KTS Figure 2.1-15: HST Transport Factors Figure 2.1-16 shows the average ship cost per transport factor, which decreases for larger ship construction programs. 36
37
Millions
$22 $18
$21 $17
$21 $17
$20 $16
$20 $16
$12
$11
$10
$10
$10
$10
$9
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38
$100
$89
$84
$75
$64 $74
$59 $68
$56 $65
$54 $62
$80
38
39
39
40
Figure 2.1-20 provides the cost estimate for the modularized Dual-Use H60-53. Sizeable cost savings are very possible over conventional outfitting. The estimate assumes maximum modularization, which at present is not possible. However, benefits should be recognized even if only selected modules are developed. It should be expected that lower costs would be realized by outsourcing modules to vendors that specialize in manufacturing and assembling selected equipment and components. Some cost reductions should also be realizable if the modules were developed by the shipbuilder using internal resources.
40
% % %
Trimaran Cost Model NON-RECURRING COSTS Ship Type: 160x53' HST Trailership (Dual-Use) w/Extended Modularization Version: D-Mod Date: 9-Jun-09 Basic Research - Concept Design $ Preliminary Design $ 357,550 Functional Design $ 5,464,839 Production Engineering & Construction $ Drawings 50,733,822 Production Planning & Scheduling $ 3,761,925 Purchase Specs & Support $ 955,409 ILS, Spares & Load Items $ 477,705 Contract Engineering Management $ 1,658,879 Contingency Labor: $ 2,367,880 Contract Detail Design Package $ Miscellaneous Material & Support: $ 4,560,351 Jigs, Cradles, & Templates, Tools & Instruments $ 5,273,483 TOTAL NON-RECURRING COSTS: $ 75,675,684
% 10.00 %
Pricing: Technical Wage $/Mhr: $ 24.56 $ Production Wage $/Mhr: $ 20.47 $ % Overhead: 125.00 % % G&A Labor: % % G&A Material: 10.00 % % Profit: 12.00 % Navy C4ISR Jones Act Premium Material Factor: Current Year: Additional Material Escalation: Shipyard Material Cost Factor: Combined Material Cost Factor: SWBS Group Structures Propulsion Electrical Electronics & Navigation Auxiliary Systems Outfit & Furnishings Armament Technical Support Shipyard Services Margin, Bonds & Insurance Lead Ship Totals: Non-Recurring Costs: 1 2 3 4 5 6 7 8 9 10 No
Non-Recurring Engineering & Production Planning Standard Work Week: Labor Rates: Senior Professional/Manager Engineer Designer/Draftsperson/Planner Clerical Contingency (weighted average)
40.00 hours/week $ $ $ $ $ 143.77 128.35 96.04 61.62 119.02 per hour per hour per hour per hour per hour
No 1.00 2009 Shipyard Tech Support Labor Factor: 1.00 1.000 = none Steel Productivity Factor: 1.00 MILSPEC Prem.=1.21 Outfit Productivity Factor: 1.00 On-Block Paint Factor: Weight MTons M-Hrs Per Mton Modular M-Hrs 7,902 45,009 23,256 1,020 82,441 30,451 Production M-Hrs $ Labor
6,942 69.68 1,152 6.82 726 15.54 16 41.56 841 53.14 921 96.69 8.0% 4.81 20.0% 12.03 10,599 76.97 % Total Lead Ship G1-7 Man-Hours: Technical Support: Shipyard Services: Fees & Insurance: Non-Recurring Costs: 94.90
483,761 9,901,229 7,859 160,845 11,289 231,055 660 13,508 44,703 914,943 89,043 1,822,469 50,985 1,252,229 127,463 2,608,810 190,079 815,763 $ 16,905,088 553,213 $ 65,841,850 55% 2.19% Production $ Costs 11.94% Production $ Costs 23.30% Production $ Costs 58.36% Production $ Costs Production Costs (1-7): $ 145,238,063
Production Hrs/LSW:
Shipyard Estimated Schedules 1.1000 1.5000 Est. Detail Engineering Time: 30.0000 Months 1.000 1.1000 1.000 Est. Construction Time: 30.0000 Months 0.9500 40 % Hours On Block Overlap: Months RMS Men/Month: 186 Months $ $ G&A 2009 $ G&A $ Profit $ Labor Only $ Material Material Only Overhead Labor + Material Total 12,376,537 10,577,759 1,057,776 4,069,596 37,982,897 201,057 46,814,559 4,681,456 6,222,950 58,080,867 288,818 11,353,567 1,135,357 1,561,056 14,569,853 16,885 1,238,319 123,832 167,105 1,559,651 1,143,679 11,758,200 1,175,820 1,799,117 16,791,759 2,278,086 9,464,623 946,462 1,741,397 16,253,037 1,565,286 25,000 2,500 341,402 3,186,416 3,261,012 8,743,352 874,335 1,858,501 17,346,011 27,467,563 2,746,756 3,625,718 33,840,038 $ 21,131,360 $ $ 127,442,943 $ 12,744,294 21,386,842 $ 199,610,528 $ $ $ 9,833,834 $ 9,081,082 $ 84,756,766 Estimated Cost for Prime Contractor Management Team: $ Over-All Program Management Fee: 0.0% $ 284,367,294 Total Price with Prime Contractor Management: $ Estimated Construction Risk: $ 20,309,115 72.8% GR 1-10 Estimated Rework Risk: $ Shipyard Experience Rating (0-1): $ 0.49 28,222,464 Engineering Performance (0-1): $ 0.45 82,842,943 Production Schedule Cost Risk: $ 263,379 Total Price with Risk: $ 416,005,195
$ $
199,610,528 284,367,294
w/o Profit w/o Profit w/o Profit w/o Profit w/o Profit w/o Profit
Figure 2.1-20: Cost Estimate for Extended Modularization Build Strategy for Dual-Use HST160-53
41
Figure 2.1-21 presents verged costs to build series ships of the Dual-Use design using the full extended modulizaion approach.
Millions
$361
$319
$297
$282
$271
$250
$230
$211
$205
$201
$219
$197
Figure 2.1-21: Averaged per Ship Costs for Dual-Use Design Using Maximum Extended Modularizing of Design and Construction
42
$257
$300
$264
43
Approximate calculation of costs to determine a required freight rate has been produced for operating in domestic markets along the U.S. East Coast, between Fall River, Massachusetts and Port Canaveral, Florida (Figure 2.1.22). Cargo availability is based on a Reeve & Associates study for Massachusetts and Global Insight study for DoT/MarAd. The ships can serve alternative U.S. Northeastern Atlantic ports like New Haven, Connecticut and shorter route Mid-Atlantic and Southern ports like Wilmington, Delaware and Savannah, Georgia. The ships also can be operated effectively in the California to Pacific Northwest coastwise trade.
Figure 2.1.22: East Coast Trade Routes HST 160-53 schedule has been carefully evaluated to provide daily service with four (4) ships (Figure 2.1.23).
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Voyage Segment Start Dock+Unload + Load+Undock at Fall River Fall River to Newport, RI Newport, RI to Sea Buoy Sea Buoy to Port Canaveral Port Canaveral sea buoy to terminal Dock+Unload + Load+Undock at Canaveral Port Canaveral terminal to sea buoy Port Canaveral to Newport, RI sea buoy Newport, RI to Sea Buoy Newport, RI to Fall River TOTALS
Distance in Nautical Miles Arrive at Fall River i.e. .5+3+3+.5 hrs = 16 5 905 16 i.e. .5+3+3+.5 hrs = 16 905 5 16
At Sea Speed
Time Interval
Time 8:00 AM
Day Monday
7.00 12.0 15.0 22.9 12.0 1.33 0.33 39.59 1.33 7.00 12.0 24.9 15.0 12.0 0.0 1.33 36.41 0.33 1.33 96.00
3:00 PM 4:20 PM 4:40 PM 8:15 AM 9:35 AM 4:35 PM 5:55 PM 6:20 AM 6:40 AM 8:00 AM Friday Wednesday Friday Monday Wednesday
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The Required Freight Rate (RFR) was developed under the following assumption:
Number of Ships Built: Total Price per Ship: $ Difference Dual-Use less Pure Commercial Designs $ Credits for 21 extra trailer capacity $ Net Owner's Asset Value $ Total Cost of Money per Ship: $ Sub-Total: $ Anticipated Life of Ship: Salvage/Sale Value at Life End: Average Annualized Capital Cost: $ $ 4 231,805,011 64,671,836 (8,488,178) 175,621,353 95,889,259 271,510,612 25 2,433,057 10,763,102 Years 1.05% Total Acq. Price $ $ $ $ Total NDF 56,183,657 7,024,854 per year 3,835,570 per year 10,860,424 per year Maximum of 8 for this analysis
Laydays & Repair Days per Annum Total Days per Round Trip Total Round Trips per Annum: Payload MTONs per Annum: Vehicles per Annum:
Figure 2.1-24: General Operating Scenario for Trade Route Financing arrangements have been developed under the following scenario:
MarAd required equity portion: Principle Equity Portion $ 21,952,669 175,621,353 % Interest 28.0% 5.2% 0.0% 0.0% 12.50% $ 21,952,669 Years 25 PMTS/Year 0 1 1 1 Tot. Int. $0 ($95,889,259) $0 $0 ($95,889,259)
Figure 2.1-25: Estimated Financing Arrangements Figures 2.1-26 and 2.1-27 summarize the estimated annual operating costs (90% round the clock servicing). Fuel cost applied is $485/mt.
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46
Freight Cost per Vehicle Mile Annual Cost Breakdown: Capital Cost Return on Equity Fuel Cost Crew Cost Port & Handling Costs Door-to-Dock Drayage Tranport Costs Insurance Maintenance & Repairs Management Costs Lubes, Oils & Stores Other NOTE: Habor Maint. Tax not included Total Annualized Costs $ 70,221,104 100.0% 30.29% $ 2.470 $ $ $ $ $ $ $ $ $ $ $ 10,763,102 6,146,747 23,035,693 4,500,000 10,661,179 7,689,600 600,000 1,000,000 1,738,538 1,854,440 2,231,805 % Exp. 15.3% 8.8% 32.8% 6.4% 15.2% 11.0% 0.9% 1.4% 2.5% 2.6% 3.2% % Build Cost 4.64% $ 2.65% $ 9.94% $ 1.94% $ 4.60% $ 3.32% $ 0.26% $ 0.43% $ 0.75% $ 0.80% $ 0.96% $ 0.38 0.22 0.81 0.16 0.38 0.27 0.02 0.04 0.06 0.07 0.08
Freight Cost per Vehicle $ $ $ $ $ $ $ $ $ $ $ $ 419.91 239.81 898.71 175.56 415.93 300.00 23.41 39.01 67.83 72.35 87.07 2,739.59 $ $ $ $ $ $ $ $ $ $ $ $
Freight Cost per MTON 21.00 11.99 44.94 8.78 20.80 15.00 1.17 1.95 3.39 3.62 4.35 136.98
Freight Cost
Freight Cost
per MTON-Stat.Mile per MTON-KM $ $ $ $ $ $ $ $ $ $ $ $ 0.01893 0.01081 0.04052 0.00792 0.01875 0.01353 0.00106 0.00176 0.00306 0.00326 0.00393 0.124 $ $ $ $ $ $ $ $ $ $ $ $ 0.03047 0.01740 0.06521 0.01274 0.03018 0.02177 0.00170 0.00283 0.00492 0.00525 0.00632 0.199
Millions
$80
Other Lubes, Oils & Stores $2 $2 $8 $11 $5 Management Costs Maintenance & Repairs Insurance Door-to-Dock Drayage Tranport Costs Port & Handling Costs Crew Cost Fuel Cost Return on Equity Capital Cost
$70
$60
$50
2009 US$
$40
$30
$23
46
47
Figure 2.1-28 breaks down the average required right rate per trailer for transit between Fall River, MA and Port Canaveral, FL.
Other
$87.07 $67.83 $300.00
$2,500
$2,000
$415.93
Insurance
$175.56 $1,500
$1,000
Crew Cost
$239.81 $419.91
$500
$1
Figure 2.1-28: Required Freight Rate per Trailer Figures 2.1-29 and 2.1-30 break down the required freight rate on a basis of an equivalent cost per statute mile.
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48
$2.50
Other Lubes, Oils & Stores Management Costs Maintenance & Repairs Insurance Door-to-Dock Drayage Tranport Costs Port & Handling Costs Crew Cost
$2.00
$1.50
$0.16
$1.00
$0.81
$0.50
$0.22 $0.38
$1
48
49
Capital Cost
1% 1% 11% 15% 33% 3% 3% 3% 15% 9%
Return on Equity Fuel Cost Crew Cost Port & Handling Costs Door-to-Dock Drayage Tranport Costs
6%
Insurance Maintenance & Repairs Management Costs Lubes, Oils & Stores Other
Figure 2.1-30: Required Freight Rate per Statute Mile The figures above all are based on 100% full load of 160 trailers and a fuel cost of $400 per metric ton. Figures 2.1-31 and 2.1-32 illustrate the effect of fuel cost and percentage of full load on required freight rates.
49
50
$3,400
$3,200
$3,000
$2,800 y = 2.085x + 2,033.167 R = 1.000 y = 1.855x + 1,839.833 R = 1.000 y = 1.665x + 1,688.167 R = 1.000
$2,600
$2,400
$2,200
$2,000 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750
Figure 2.1-31: Fuel Cost versus Required Freight Rate per Trailer Haul
$3.00
$2.50
Estimated 2009 US$/Statute Mile
$2.00
$1.50
$1.00
$0.50
$0.00 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750
Figure 2.1-32: Fuel Cost versus Required Freight Rate per Statute Mile
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51
Figure 2.1-33 presents the worksheet used to determine port costs. It is based on published rates from Port of Canaveral, FL. Costs to load and unload trailers were estimated at a labor rate of $48/hour and applied to the number of trailers loaded/unloaded over the seven hour time period. This figure is probably on the high side as not all trucks would be required to wait the full amount of time to load/unload. These same costs were applied to the Fall River, MA port, for which rates were not imminently available.
Metric TEU
Trailers
US 0 144 3,175 640 0 24.6063 1,111 89.00 7 trailers stons ft stons ft trips/annum Hours
Trailers Wt Ship LOA Take-On Water Ship's Draft Est. GRT = payload m3/2.83m3 No. Trips to Port Port Time
Port Canaveral, FL
Mooring Fee Harbor Master Cargo Warfage - Trailers Cago Warfage - TEUs Dockage Loading/Unloading Costs - Trailers Loading/Unloading Costs - TEUs Tolls Pilotage based on LOA Pilotage based on GRT Tugs Agency Fees Homeland Security Fees Outside Storage Trailers (2 days) Outside Storage TEUs (2 days) Sanitary Waste Removal Oil Waste Removal Stevedoing Services Fresh Water Fresh Water Hookup Other Port Expenses Total Port Costs: $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ -
Port Rates $ 186 $ 7,873 $ 4,875 4,875 $ 48,384 $ 48,384 $ 186 7,873 308
Port Rate $ 185.66 $ 2.48 $ 23.20 $ 4,874.54 vessels > 2000 GRT ston minimum $ 28.98 per ft LOA 450 LOA ft per 24 hrs see eqn graph $48 per hour x trailers x port time
$ $ 23 $
70
308 $ 12.50 per ft draft minimum 70 $ 0.0280 per GRT minimum 23 $ 2,025 Annual fee
12 ft 2500 GRT
885 -
$ $ 13 $ 13 $ 19 $ $ $ -
885 13 13 19 -
$ $ $ $ $ $ $
per 15 days full Annual fee apportioned per port visit Annual fee apportioned per port visit Annual fee apportioned per port visit ston
62,647
Figure 2.1-33: Estimated Port Costs Drayage costs to truck trailers to/from the port to local destination (assumed 50 miles each way) was based on a trucking freight rate of $3.00 per mile.
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53 of commercial shipbuilding contracts (these costs are not included in the estimates for the Dual-Use and combatant shipbuilders. Finally, the estimates are based upon typical contract cost and schedule performance for the three types of shipbuilders for both non-recurring engineering and production.
SPARs cost models, on the other hand, are based mostly on ship characteristics and various system components that make up the ship design. There are components that are equally applicable for almost any ship type but will vary for size and capacity. Examples are major equipment modules (propulsion, electric generation, etc.). Other examples of common components can be seen in certain functional areas like berthing, galley and mess. Some of SPARs Cost Estimating Relationships (CERs) are based on weight, such as the ships structural components. For most estimating applications, the hull and superstructure weight is broken down by type hull block such as decks, transverse and longitudinal bulkheads, superstructure, double bottoms, side shells, bulwarks, etc., Each 53
54 block type carries a different CER, mostly for labor, since each requires a different set of manufacturing and assembly Processes; therefore each type has its own cost on a per ton basis. However, structural materials also can vary from component to component, such as high strength steel for high stress areas or armor protection, light aluminum or composite materials for superstructures, etc. and the CERs address these differing requirements. For estimating applications where the structural definition is less detailed, the cost models use more global CERs based mostly on similar hull forms, such as typical monohulls, high-speed catamarans, etc. However, SPAR cost estimators also can apply their own judgment factors to these CERs in order to address non-typical differences that might be apparent in the specific design at hand. The structural CERs that SPAR has developed over the years were derived from data collected and analyzed by SPARs shipyard planning and resource management system called PERCEPTION2. PERCEPTION enables the shipyard to catalog each structural component by block type and the CERs are generated automatically. The system reports accommodate not only steel structures, but other materials as well. Other CERs are based not on equipment specifications or weight, but other design characteristics, for example: Deck Area: paint, deck covering, fire main, etc. Compartment Volume: cable, hangers, lighting in accommodations areas Cubic Number (LOA x Breadth x Depth): general electrical cable, general paint, non-accommodations lighting, selected engine room pumps & equipment, anchor & mooring gear, etc. Power Requirements (kW): fuel, lube oil, seawater cooling, engine room ventilation, etc. Crew size & Type: berthing, galley & mess, accommodations metal sheathing, doors, etc. Other Number Counts: life rafts, vehicle tie-downs, TEU cell-guides, etc. Production Labor Hours: production support services, technical support, etc.
When used during the shipbuilding Process, PERCEPTION provides return cost details and summaries for these other CERs. The CERs have been sanitized as best that can be done so that they are not contaminated by added costs of rework and change orders. SPARs production system, PERCEPTION, breaks out all rework and change order costs from costs regarded as normal for the assigned budget. PERCEPTION also manages purchase orders and material control functions, with reports at all levels of detail.
PERCEPTION has been installed at a number of different shipyards, all commercial, in the U.S. and Canada since the late 1970s through to today.
2
54
55
PERCEPTION, however, is not the exclusive source of cost model CERs, among them are direct price quotations from vendors. SPARs cost libraries are maintained (expanded and updated) on a regular basis.
55
56 methods can lead to less productive build strategies. For example, requiring a milestone payment based upon completion of hull blocks erected may force the shipyard to minimize cost savings from on-block outfit as a sacrifice to expedite the schedule for erection work and ensuring an earlier milestone payment.
56
57 f. Automated data collection systems g. Contract payments supporting advanced building methods & efficiencies h. Streamlined government contract oversight requirements i. Streamlined contract change management j. 4. Improved ship designs & engineering a. Integrated design & engineering systems b. Standardized (repeatable) components & interim products c. Simplified ship & ship systems designs These are the hot issues that shipyards around the world have been focusing on as an industry, some shipyards more than others. While there are distinct differences in the business processes for building naval3 vessels versus commercial ships, there are very similar issues that can benefit military programs.
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This build strategy culminates in exploiting the cost-savings benefits of modular construction techniques. Modules can be developed in a wide variety of ways: outfit and equipment modules, hull assembly blocks, and outfitted hull blocks. Outfit and equipment systems can be designed and assembled as a complete module that then can be installed either on hull blocks prior to erection or installed later on-board. Such modules are called outfit-on-units. Hull block assembly is the process of building the hull structure in modular form of building blocks. This assembly method replaces older methods that built structures on the building ways from the inside out (traditional stick building). Hull block construction saves time because it can be performed much more easily and with less expensive material handling and worker access costs. By outfitting hull block assemblies, productivity can be enhanced even further. On-block work can be 30%-50% less expensive in labor costs than equivalent work done on-board ship.
59
A successful hull block construction program can be made even more successful with the application of group technology manufacturing, zone outfit work organization, and the principles of lean design. Group technology manufacturing is the organizing of similar work so that it can be processed together to gain the cost savings potential of batch manufacturing. Group technology manufacturing can be applied not only to parts fabrication, but also to assembly and installation processes. Zone outfitting, a variation of group technology manufacturing, is the method of organizing work within specific physical spaces by work type to achieve the cost and time savings potential. An example of zone outfit work organization is the installation of piping systems in a specified area prior to the installation of other outfit systems (such as electrical trays, HVAC duct, etc.) that might conflict or interfere with overall work progress. Hull block construction is typically planned and managed not only by individual blocks, but also by the manufacturing processes of the interim stages of construction: steel preparation (wheelabrate, prime, trim), fabrication (NC parts, end cuts, bending, rolling, etc.), sub-assembly, assembly, erection, and on-ship weld-out. Obviously different blocks will have a different costs depending upon the manufacturing processes required for its fabrication and construction. Blocks generally can be categorized by block type. This means blocks that go through the same set of manufacturing and assembly processes can be identified as belonging to the same block type. Each block type will have a different unit cost compared to other block types. Flat panels, for example, can be processed on automated panel lines and are less expensive ton for ton than 3D curved blocks that require more time and effort and cannot be manufactured using the same degree of automation. A ship is composed of a variety of blocks and block types, depending upon the size and type of ship being built. A ship having little hull shape should be expected to cost less per ton than a ship of the same size with considerable hull shape. Flat-sided parallel mid-bodies are easier to build than ships with finer hull forms and shape. Lean Ship Design is a design philosophy that focuses on making the ship design as simple and as easy to build without compromising upon design function and possibly enhancing design performance. Lean design, as espoused by many other industries, attempts to eliminate as many different components, parts, and complexities as can be done. Lean design also attempts to capitalize on the use of repeatable interim products, within any ship design, and reduce costs accordingly.
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61 an almost entirely equipped engine room in the assembly halls and then transport and install it in the ship hull. It is co common mmon practice that modules are made by specialized producers outside the shipyard. Some modules, like fuel booster blocks for the engine room, are purchased ready-made made for installation at the shipyard. This expands the level of cooperation between the shipyard and the cooperating firms as the latter make more and more ship parts. These relationships no doubt benefit the shipbuilder with reduced costs and reduced product delivery schedules. By outsourcing to specialized module manufacturers, the supply chain obtains more opportunities for business and is more likely to invest in improving their own levels of productivity, lower their costs and advance their technologies for better product quality and capability.
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New Construction Benefits from Extended Modularization: 1. Shorten ship construction time with modules built in parallel. 2. Shortened time saves cost with lower overhead, less impact of inflati inflation on 3. Mass production of modules saves cost from learning effects. Additional efficiencies gained if modules are standardized and applicable to multiple ship types and classes. 4. Modules can be built by a competitive industry that does not rely on the fully integrated tegrated shipyard that is less productive more opportunities for smaller business. This can lead to greater participation of supplier base that can assume more development responsibilities to improve quality and reduce costs further. 5. Lead ship costs should ld be lower because modular approach is less inter-dependent inter of other systems subject to change orders. 6. Lower cost means more products can be built for available funds. 7. Eventually, standardized modules can lead to lower costs for non non-recurring recurring design and engineering.
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Ship Maintenance Benefits from Extended Modularization 1. 2. 3. 4. 5. 6. Modules can be easily removed from onboard and repaired in shop Maintenance of modules on-shore less costly than on-board Faster turn-around time to repair/replace modules Even faster turn-around with Swap-out/Swap-in scenario of selected modules Increase fleet operation time Decrease time in shipyard for repairs and overahauls
Other industries have long exploited the benefits of modular construction: 1. Aircraft F4 began modularization; F35 extensive use of modules 2. Cars parts and components, often interchangeable between different models 3. Home appliances parts and components There are precautions that must be taken in order to minimize failures in applying modular construction techniques: 1. Requires better than normal engineering 2. Requires better than normal quality assurance 3. Requires higher level of design standards to minimize interferences and disconnects.
63
64 Hull block shot blast and painting facilities Steel manufacturing capacity of approximately 20,000 MTONs (steel or equivalent) per annum.
These characteristics apply generally to mid-tiered U.S. commercial shipbuilders. The cost estimates assume that the construction will be performed using hull block construction techniques. Some outfitting of hull blocks prior to erection is expected, particularly with regard to major piping systems. The cost estimate assumes cost savings are obtained by painting hull blocks prior to erection, after which remaining painting (60% of the total) is performed on board. Other equipment and multi-systems outfit modules may be included in the building plan, but they are not expected to be exploited extensively for the lead ship. Learning curves are used for follow ship estimates and assume that additional engineering will result in increasingly more outfitting of hull blocks prior to erection and more applications of outfit modules.
64
65
1. 2. 3. 4. 5. 6. 7.
Available & capable facilities Experienced & skillful work force Good planning & early stage outfit scheduling Experienced and competent management Efficient business practices Quality design and engineering Minimum change orders
It is assumed that rework is not included in a cost estimate except as a consideration for cost risk. Owner changes can impact costs too, but they should be covered with a set aside budget or decided later as a subsequent renegotiation of the scope of work. All of the above issues influence the relative level of productivity for the shipbuilder working on a given contract. The cost models provide for several types of productivity factors. 1. 2. 3. 4. For technical support For structural manufacturing and assembly work For outfit manufacturing and assembly work For material costs
Therefore, the acquisition costs will be influenced by where the ship is to be built and to specific contractual requirements. The cost model provides indications of cost differences between shipyards of various sizes and the impact upon higher costs expected from shipyards building naval ships. For the notional shipyard, each of the above productivity factors equal 1.00. For a less productive shipyard, the factors increase greater than 1.00. For more productive shipyards, the factors are less than 1.00. As prime contractor for the U.S. Navys Product Oriented Design and Construction (PODAC) Cost Model in the late 1990s, SPAR researched relative productivities of a number of U.S. shipyards. Its findings are summarized in Figures 3.4-1 and 3.4-2. The study also compared data SPAR had obtained from various commercial shipyards (SPAR shipyard clients) and from data collected from several projects involving Northern European shipyards. Additional productivity factors were compiled and reported by P.C. Koenig, H. Narita, and K. Baba for East Asia5.
Shipbuilding Productivity Rates of Change in East Asia, SNAME Journal of Ship Production, February 2003.
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5.00 5.0
4.0
2.0
1.0
0.90
Combatants (Very Large) Combatants (Large) Dual-Use Noncombatants (Large) Dual-Use Noncombatants (Mid-Size) US Modern Commercial (Large) US Modern Commercial (Mid-Size) Northern European (Large) Korean (Large)
0.28
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Other organizations have attempted to measure relative shipbuilding productivity using an approach called compensated gross tons, or CGT. Adopted in the 1960s by the Organization for Economic Cooperation and Development (OECD), CGT is a normalized measure that allows the work content (per unit of volume) of different types of ships to be compared on the same basis. CGT-based calculations can be used to make high-level cost estimates, to compare shipyard performance (even though they may be building different types and sizes of ships, and to set targets for shipyard performance. NOTE: CGT is not an exact science, and its ability to compare cost performance across different sizes and types of ships must be regarded as very approximate. The approach considers all costs, labor and material lumped together. It should be recognized that productivity of U.S. shipyards building Navy ships has proved to be much more than a 37% premium over equivalent commercial practices. The methods for developing CGT for warships is still not fully understood, while the PODAC results are based on more in-depth analysis of actual shipyard return costs. Figure 3.4-3 provides a spectrum of productivity factors from various studies using the CGT approach.
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SPAR Productivity Factor - Relative to U.S. Mid-Size Commercial (Lower the Factor, the Greater the Productivity) 0.20 0.2042 0.3960 0.1573 0.3583 0.2427 0.3831 0.3563 0.2672 0.3678 0.4344 0.2986 0.4431 Productivity Factors 0.9564 0.4259 1.1294 0.4431 0.8449 0.4104 0.4290 0.3013 0.5315 0.6020 1.6465 1.5664 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 -
0.9992 1.3755
SPARs cost model also takes into account the overall size of the ship, as larger ships are typically less expensive due to economies of scale to build on a structural cost per ton basis than smaller ships of the same hull form and relative complexity.
The factors presented in Figure 3.4-5 are stored in the cost model Module Factors worksheet and can be modified to suit the users own preferences.
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70 productivity factor for modular work. The estimates assume that on-unit factors apply for manufacturing most modules.
Work Type Piping - OMS HVAC - Rectangual Duct HVAC - Spiral Duct HVAC - Fans HVAC - Air Handlers HVAC - Spools HVAC - Fire Dampers Electric Cable (Local) Auxiliaries - IMS Piping - IMS Cable Trays - IMS Staging - IMS Exhaust Casing - IMS Casing Vent Trunk Foundations Seats - IMS Paint - Excluding Block Paint Paint - Block Paint Paint - Unit Paint Propulsion Machinery Outfit Machinery Electronics Outfit Equipment Armament Structures Cable, Machinery Spaces Cable, Accommodations Spaces Cable, Superstructure Cable, Exterior Decks % Total Modularized 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00% 95.00% 95.00% 100.00% 100.00% 85.00% 40.00% 20.00% 90.0% 90.0% 85.00% 85.00% 85.00% 85.00% 80.00% 80.00% 80.00% 50.00% Onboard Factor 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 On Block Factor 0.530 0.800 0.650 0.650 0.800 0.650 0.750 0.500 0.650 0.800 0.800 0.800 0.500 0.500 0.830 0.750 0.690 0.800 0.700 0.500 On Unit Factor 0.280 0.400 0.325 0.325 0.400 0.325 0.375 0.200 0.325 0.400 0.400 0.400 0.500 0.500 0.390 0.375 0.170 0.500 0.250 0.300 0.300 0.300
variable
Figure 3.4-5: Selected Productivity Factors Used for On-Block and On-Unit Work % Total Modularization = Estimated Maximum Percentage of Work that can be Modularized beyond conventional methods. Onboard Factor = Maximum Labor Cost at Onboard Stage of Construction On Block Factor = Percentage Labor Cost for On-Block Work Relative to Onboard Cost On Unit Factor = Percentage Labor Cost for On-Unit Work Relative to Onboard Cost
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3.5000
3.0000
2.5000
Cost Factor
2.0000
US$/Euro
1.5000
1.0000
0.5000
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
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74 Ineffective quality controls Ineffective management of plans, costs and schedules Inability of management to solve problems quickly and effectively.
One area of risk that always must be addressed is whether or not the shipyard will be able to fully exploit the cost savings potential of performing work at the most efficient stages of construction. If quality and complete technical information or necessary outfit materials cannot be made available at the time of pre-outfitting on unit or on block, there will always be a cost penalty paid to perform the work later on board. The cost models break out cost risk into five primary categories: 1. The production cost risk for labor and material. While all material costs have been escalated to a common base year, there is room for error in these cost adjustments. Also, there may be discrepancies in the labor hour estimates. These potential errors and discrepancies are covered in this particular cost risk category. 2. Cost risk of rework due to immature engineering. Working with incomplete and/or erroneous technical information significantly increases the potential for rework. Rework can consume both labor and material resources as well as set back planned schedules. 3. The inexperience cost risk that may be associated with a shipyard that has not built this type of ship before. This cost risk is assumed to end after the lead ship under the assumption that there is on board a good management team that learns quickly and takes the right steps to minimize cost risks for the remaining ships. 4. There is an inherent cost risk when detail design, engineering and planning cannot complete quality work in time to meet production schedules. There are ample examples where technical requirements fail to meet their own budgets and schedules and greatly impact the cost and schedule of production. 5. When production schedules are so short that excessive manpower must be applied to meet a planned delivery, the risk of cost increases has been readily proven time and again.
75 Shepherd, PMP, Acquisition Review, Spring 2003, The Journal of the Defense Acquisition University. Intermediate risk levels are categories of risk that the user may identify with the estimated cost. Where there is considerable cost history behind the estimate, one would expect that there would be little risk that the estimate will result in a higher actual cost. However, where there is little cost history to support the estimate, the risk of higher actual cost may be expected to be higher. Factors that may influence higher risk are the following: New technology that has no direct cost history External economic factors, such as inflation & currency fluctuations as they may affect the estimated costs Processes that may be performed by organizations without sufficient prior experience. Changes in organizations that have not yet proven an ability to perform to the standards assumed by the cost estimate.
The cost model allows the estimator to provide risk values at each of the SWBS Group levels, one for labor and one for material costs. However, if these values are not provided, the cost model will use those values provided in more detail in each of the SWBS Group worksheets. The values for risk can be categorized as described in the following Figure 3.6-1.
Description
In your career, you have never seen this before It has happened on occasion Sometimes it happens & sometimes not Most of the time, this event will occur It has happened on many projects, and you think it almost always will, but there is a chance it will not.
Value
5% Range 1-9%
Risk
95% 75% 50% 25% 5%
25% Range 10-29% 50% Range 30-69% 75% Range 70-89% 95% Range 90-99%
Figure 3.6-1: Cost Risk Value Ranges The level of cost risk, however, is not evenly applied across the construction program. Figures 3.6-2 and 3.6-3 provide breakdowns of the levels of cost risk, based on SPARs experience, used in the cost model. The user, however, may modify these levels of risk within the cost model.
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Calculated Labor Hour Risk % Calculated Material Risk %
SWBS Group
Structures - Steel & Aluminum Propulsion Electrical Electronics & Navigation Auxiliary Systems Outfit & Furnishings Armament Technical Support Shipyard Services Contingencies, Fees & Insurance
1 2 3 4 5 6 7 8 9 10
10.0% 10.0% 10.0% 20.0% 10.0% 10.0% 10.0% 10.0% 10.0% 0.0%
10.0% 10.0% 10.0% 20.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
Figure 3.6-2: Risk Factors Applied to a Sample Steel or Aluminum Hull Structure
SWBS Group
Structures - Composite Propulsion Electrical Electronics & Navigation Auxiliary Systems Outfit & Furnishings Armament Technical Support Shipyard Services Contingencies, Fees & Insurance
1 2 3 4 5 6 7 8 9 10
50.0% 10.0% 10.0% 20.0% 10.0% 10.0% 10.0% 10.0% 10.0% 0.0%
20.0% 10.0% 10.0% 20.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
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77 failures in detail engineering that caused North American shipbuilders to be seriously uncompetitive compared with foreign world class shipbuilders. They document that Bunch (1987) identified that design-engineering-planning-mold loft was the poorest performer when compared to its Japanese counterpart. This difference was attributed to the Japanese yards having developed concepts of standardization and modularization that permit a large portion of the design and engineering activities to be essentially retrieval of the documentation from files. Moyst and Das discuss various factors affecting design and construction from the perspective of the overlapping strategy many shipbuilders use to reduce lead time. What are likely to result are considerable added costs due to rework caused by poor integration of detailed engineering with the production processes. In addition to large cost increases, production schedules also suffer seriously. At the heart of these issues are design changes, which may involve additional work, elimination of work, demolition and rework, changes in specification requirements, or some combination of these. The timing of these changes directly influence the impact of the changes to overall costs and schedules. The most serious impacts occur when such changes are made as production processes are underway. As construction programs compress schedules by overlapping engineering with production (concurrent engineering), the risk of added production costs and schedule delays increases. As documented by Moyst and Das, the Canadian Maritime Coastal Defence Vessel Program suffered enormously from such a schedule compression decision. The strategy was to overlap engineering with production 100% for the lead ship. This lead ship overran its budget by 40%. Ships 2, 3, and 4 also overlapped engineering, but in lesser degrees. Ship number 4 overlapped by 30%. These follow ships also overran their budgets, approximately 25%, 20%, and 10% respectively. The actual production schedule of the lead ship was 1.54 times longer than the actual schedule for ship number 4. The labor hours for the lead ship were 1.49 times greater than for ship number 4. Ship number 5 had no overlap with engineering and its labor hours were 67% of the lead ship. The U.S. General Accounting Office (GAO) report, GAO-05-183, entitled "Defense Acquisitions: Improved Management Practices Could Help Minimize Cost Growth in Navy Shipbuilding Programs," was released on March 10, 2005. The following quotes from this report and its appendix provides details of the cost growth assessments across several major Navy acquisition programs. The lack of design and technology maturity led to rework, increasing the number of labor hours for most of the case study ships. For example, the design of LPD 17 continued to evolve even as construction proceeded. When construction began on DDG 91 and DDG 92--the first ships to incorporate the remote mine hunting system--the technology was still being developed. As a result, workers were required to rebuild completed areas of the ship to accommodate design changes. Most of the shipbuilders cited a lack of skilled workers as a driver behind labor
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78 hour cost growth. According to the shipbuilders we interviewed, many of the tasks needed to build ships are complex and require experienced journeymen to efficiently carry them out. Yet, the majority of the shipbuilders noted that the shipyards have lost a significant portion of their highly skilled and experienced workers. Delays in delivery of materials also resulted in increased labor hours. The following table, Figure 3.6-4, presents the GAOs cost growth for the most recent large U.S. Navy acquisition programs. These cost increases can be accounted for largely from lack of design maturity and many change orders that resulted therein.
Contract DDG91 DDG92 CVN76 CVN 77 LPD17 LPD18 SSN774 SSN775 % Increased Labor Cost 105% 66% 35% 42% 33% 48% 55% 42% % Increased Material Cost 13% 20% 43% 13% 103% 39% 43% 56% % Increased Target Cost 10% 20% 14% 13% 139% 95% 27% 37%
Figure 3.6-4: Cost Growth for Recent U.S. Navy Acquisition Programs This provides some idea of the overall effect that overlapping of engineering has upon the cost of rework. Breaking this down by SWBS Group (Figure 3.6-5) requires some subjective assessments of where rework is mostly likely to be incurred (these are indeed the rework risk factors used in the cost models). If there is considerable overlapping, then structural work being the first work effort in the build sequence is likely to suffer in a major way from change orders and/or lack of quality technical information. Too early production of electrical systems can suffer from high degrees of rework, with auxiliary systems following not far behind. Technical services and shipyard support, being directly linked more or less to production costs, will likely reflect an increase in their costs as well.
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79 completed prior to the start of production. It also assumes that maximum rework will occur when there is a 100% overlap of engineering and production. The cost model allows the estimator to define the maximum percentage potential for rework across each major grouping of the Ship Work Breakdown Structure (SWBS). Figure 3.6-5 illustrates such a breakdown.
Maximum % Rework 50% 30% 65% 7.5% 45% 35% 10% 75% 90%
SWBS 100 200 300 400 500 600 700 800 900
Structural Work Propulsion Systems Electrical Generation & Distributed Systems Electronics & Navigation Systems Auxiliary Systems Outfit Systems Armament Systems Technical Services Shipyard Support Services
Figure 3.6-5: Allocating Maximum Rework The cost model does not exclude from any applied rework risk allocation the direct costs of primary machinery: propulsion and electric generation. The model assumes that even at very early stages of design, these elements often may not be adequately developed and therefore can impact the cost of a premature production schedule. Figure 3.6-6 provides rework cost risk allocation relationships between various degrees of a maximum rework potential and a percentage of schedule overlap of engineering to production. NOTE: The rework cost risk described above assumes that the risk is due only to insufficient schedule for technical information to be properly developed to meet planned production schedules. This particular rework does not include rework due to inexperience of the shipbuilder nor due to poor engineering. The cost risk for these two additional cases is described in the following Sections 3.6.4 and 3.6.3.6.
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Figure 3.6-6: Modeling Rework Cost Risk with Degree of Engineering/Production Overlapping Schedules
SPAR has worked with a wide variety of shipyards since 1972. There have been a number of occasions where start-up companies have done poorly on their initial shipbuilding efforts. Similar cost problems also have been recorded for shipbuilders that have been awarded contracts to build ship types that are dissimilar to their more traditional product line. While the cost over-runs from these efforts range widely, a figure of 100% is perhaps as good an average as one might expect to measure the effect of inexperience.
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Shipbuilding Experience Labor Cost Risk 120% Percent Total Labor Cost Risk 100% 80% 60% 40% 20% 0% -20% 0.20 0.40 0.60 0.80 1.00
Experience Rating (0 - 1)
Figure 3.6-7: Estimating Percentage of Labor Cost at Risk from Shipbuilders Inexperience The cost model applies the experience labor cost risk in different degrees down through the SWBS work breakdown structure. NOTE: The cost risk due to the shipbuilders inexperience is independent of the productivity factors used in the cost model and as described above in Section 3.4. If the shipbuilder is expected to exhibit generally good levels of productivity, the cost risk due to inexperience will apply only to the lead ship of a series. What results can be a more aggressive learning curve for the follow ships as discussed in Section 6. In order to help develop an experience rating, the cost model provides a means to develop a performance raring by evaluating the following five (5) basic. These five categories can be weighted equally for a composite measure of cost risk: Prior Experience Emphasis on whether the contractor has sufficient experience to easily address work requirements and execute the work successfully. Technical Performance Quality and accuracy of deliverables as well as services provided. Ability to provide services commensurate with the work requirements.
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82 Cost Control Emphasis will be placed on the contractors ability to estimate correctly the first time and maintain initial budgets. Ability to control cost and avoid unnecessary cost increases. Ability to make cost effective decisions with respect to technical requirements, schedule and quality control. Early identification of cost and schedule problems. The timely and accurate submission of cost performance data. Schedule Performance Ability to perform or adhere to the scheduled delivery dates and technical instructions. Ability to make decisions with respect to required schedule adjustments without effecting cost or quality. Early identification of schedule problems to include self-correcting. Timeliness of deliverables and provided services. Management Performance Ability to manage contractor and subcontractor efforts efficiently and effectively with transparent performance within the team. Emphasis will be placed on the contractor's ability to staff positions with appropriate personnel who have the necessary skills and requisite technical capability and experience to effectively perform the work. For each of these cost risk categories, levels of risk can be assigned: For each of these performance categories, the estimator can assigned an anticipated evaluation: Unsatisfactory Does not meet minimum acceptable standards in one or more areas; Reportable deficiencies with remedial action required in one or more areas which adversely affect overall performance. Satisfactory Meets the minimum acceptable standards; Adequate results; Reportable weaknesses with identifiable, but not substantial effects on overall performance. No deficiencies in any area. Good Effective performance; Fully responsive to contract requirements; Reportable weaknesses, but with little identifiable effect on overall performance.
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83
Excellent Very effective performance, fully responsive to contract; Contract requirements accomplished in a timely, efficient and economical manner for the most part; Only minor weaknesses. No deficiencies in any area. Outstanding Of exceptional merit; Exemplary performance in a timely, efficient and economical manner; Very minor (if any) weaknesses with no adverse effect on overall performance. No deficiencies in any area. Each of the levels of risk has been assigned a numeric value as shown in the following figure.
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84 result in much greater non-recurring costs, but it directly impacts production costs too. Despite the advent of advanced computer design and engineering systems, non-recurring costs have been escalating, both for commercial and for government ship designs. American engineering has taken many steps backwards in its ability to deliver wellengineered ships within a reasonable period of time and cost. The industry is rife with many examples of large-scale added costs and schedule delays due to many late, incomplete, and unavailable drawings as well as countless revisions that directly impact production costs and schedules. As discussed in Sections 3.6.2 and 3.6.3, the relative extent of schedule overlap of engineering with production increases the cost risk of production with rework due to unavailable technical data when production gets under way. That means fewer opportunities for exploiting cost savings from early stage construction methods. However, in addition to this is the relative quality of the engineering effort that needs to be considered as further influencing cost risk. Poor engineering leads to other rework from engineering mistakes, unintended system interferences, etc. A badly layout design usually means higher production costs as there may be insufficient rhyme or reason to what and where systems need to be installed. This can result in effectively making certain ship space effectively denser than it should and that carries a higher production price. A poorly engineered ship also can impact both operational and maintenance costs. The cost model estimates cost risk due to potential engineering problems which do not lend themselves for design to production engineering objectives. Figure 3.6-9 illustrates a relationship between a defined engineering performance rating index (from zero to 1.0). The higher the index, the better the engineering organization manages its quality, costs and schedules and the lower is the expected cost risk to both non-recurring and recurring labor costs.
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Shipbuilding Engineering Cost Risk 120% Percent Total Labor Cost Risk 100% 80% 60% 40% 20% 0% -20% 0.20 0.40 0.60 0.80 1.00
Figure 3.6-9: Engineering Performance Rating Affecting Cost Risk A performance rating of 1 would equate the engineering quality and schedule performance one would expect from a world class engineering organization. Such an organization would have only a very limited number of drawing revisions; they would be expected to do it right the first time. Further, the detail engineering would be characterized as production friendly, focusing on simplicity and ease of manufacturing and assembly. In addition, the engineering would ensure that the ship systems support concepts of minimum maintenance access and repair. Finally, the engineering schedule management would be carefully linked to production schedules to ensure that the required production work would have all the technical information needed to do the work at the earliest stage of construction, when there is much more likelihood that the work can be performed most efficiently. A performance rating of less than 1 bears significant cost problems, both for the engineering effort and for production. For example, an engineering performance rating of 0.8, or 20% less than world class, would be expected to cause an increase in engineering and production labor costs of 36%. Making evaluations of engineering performance can follow the same process as described above in Section 3.6.4 for the shipbuilder.
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Typically, U.S. Navy contracts catalog both recurring and non-recurring technical costs together under SWBS 800. Therefore, the majority of engineering costs appear for the lead ship. The cost model, instead, catalogs only the recurring technical costs under SWBS 800 and catalogs non-recurring costs under a separate project WBS. This separation allows the non-recurring costs to be easily allocated to all ships of a series program.
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89
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90 The lack of U.S. engineers and designers with modern commercial ship design experience can be addressed by carefully selecting both individuals and well managed ship design organizations to be subcontractors which should provide the close management oversight of these engineering efforts. The use of such an expert team could be a great opportunity to move off in a new and better direction. Ultimately, that would be good for the industry, for the Navy and for the U.S. taxpayer.
90
91
20%
40%
60%
80%
100%
S80/20 S90/10
Figure 5-1: Modeled Manpower Distribution Profiles For example, profile number 10/90 accomplishes only 10% of its work at the 50% schedule point in time, with 90% of the remaining work performed in the last 50% of the time period. Based on actual shipyard construction experience, the cost model distributes the various work efforts according to the following manpower loading profiles (Figure 5-2):
Schedule Distribution 80/20 20/80 30/70 10/90 40/60 50/50 70/30 Level 60/40 Construction Structures Machinery Electrical Electronics Auxiliary Systems Outfit Systems Recurring Technical Services Shipyard Production Support Services Non-Recurring Detail Design, Engineering & Production Planning
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92 Figures 5-3 provides a sample estimated total shipyard production manpower requirements for lead ship construction.
Production Manpower Distribution Over Construction Period (Not Including Non-Recurring Costs) 1,600
1,400
1,200 Manpower Requirements Services 1,000 Technical Outfit 800 Aux.Syst. Electronics Electrical 600 Machinery Structures 400
200
10 6 11 5 18 2 10 86 96 16 3 17 3 77 19 29 38 48 58 67 19 2 12 5 13 4 14 4 15 4
Construction Weeks
Figure 5-3: Commercial Shipbuilder Total Estimated Lead Ship Manpower over Construction Schedule Figure 5-4 presents a sample estimated lead ship production manpower requirements.
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Production Manpower Requirements Over Construction Period (Not Including non-Recurring Costs) 700
600
500 Manpower Requirements Aux.Syst. Electrical 400 Structures Services Machinery 300 Electronics Outfit Technical 200
100
10 6 14 4 16 3 17 3 11 5 12 5 15 4 18 2 10 19 29 38 48 58 13 4 67 77 19 2 86 96 -
Construction Weeks
Figure 5-4: Commercial Shipbuilder - Estimated Lead Ship Manpower over Construction Schedule
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Reference "Past and Present Concepts of Learning: Implications for U.S. Shipbuilders", Mark Spicknall, UMTRI, presented to SNAME Ship Production Symposium, January 1995
94
95 The better the technical data and the organizing of production, the quicker the costs can be reduced. A well organized start-up for the lead ship production often results in a flatter learning curve. On the other hand, a poorly executed lead ship program can give the impression that significant learning has been achieved, when, in fact, most of the cost reductions can be attributed to simply overcoming cost over-runs and poor budget performance. The cost model assumes that the shipbuilder is competent and reasonably well organized in both technical and production capabilities. The cost estimate reflects what would be expected to be a realistic appraisal of its performance for the lead ship.
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2 3 4 5 6 7
No overall program reponibility; that is in the yard's bid No outsourcing/subcontracting responsibilities No overall ship planning No engineering considerations for shipyard facilities/capacities, etc. No production oversight No overall production QA No financial/contract administraion responsibilities
The final cost estimate figure developed for the Expert Technical Team is linked to the option for Use of Program Manager offered on the Rates & Factors worksheet. The Expert Technical Team worksheet provides for input of labor rates and other multiplier factors affecting anticipated scope of work.
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2009
Factor
2009 US$/Year $ 360,000 $ 280,000 $ 250,000 $ 250,000 $ 250,000 $ 180,000 $ 220,000 $ 180,000 $ 220,000 $ 220,000 $ 180,000 $ 250,000 $ 120,000
Com m ercial Qty ManYear Basis 1.00 2.00 3.00 3.00 3.00 4.00 5.00 4.00 1.00 1.00 4.00 1.00 5.00
Military
Total
2009 Total US$ 1,440,000 2,240,000 2,250,000 2,250,000 2,250,000 720,000 4,400,000 1,440,000 880,000 880,000 2,160,000 1,000,000 2,400,000 24,310,000 4,862,000 29,172,000 13.60%
Follow Ship Factor 0.50 0.50 0.15 0.15 0.15 0.50 0.15 0.15 0.15
Follow Ship US$ 720,000 1,120,000 337,500 660,000 216,000 440,000 132,000 150,000 360,000 4,135,500 4,135,500
Factor Man-Years 4.00 1.00 8.00 1.00 9.00 1.00 9.00 1.00 9.00 1.00 4.00 1.00 20.00 1.00 8.00 1.00 4.00 1.00 4.00 1.00 12.00 1.00 4.00 1.00 20.00 1.00 115.00 ODC:
$ $ $ $ $ $ $ $ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
4.00 Years
$ 20% $
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30 April 2009
The above depth is to the Strength Deck. The Weather Deck (2nd Deck) is 16.000m ABL and the Freeboard (Bulkhead) Deck (3rd Deck) is 13.000m ABL. Center hull maximum beam is 15m. Each side hull has a maximum waterline beam of 3.75m, a maximum beam of 5.3m, and a LOA of about 101m.
Propulsion:
Power is provided through 4 Fixed-Pitch NiAlBrz propellers: 1. A 4.8m diameter propeller developing 19MW at 140 RPM, driven through a horizontallyoffset reduction gear by a MAN 16V48/60CR diesel engine rated 19.2MW at 514 or 500 RPM. 2. A 14MW AziPod. 3. A 3m diameter propeller in each side hull, each developing 12MW at 160 RPM, driven through a planetary reduction gear by a 14MW electric motor operating at about 500 RPM, similar to ABB model AMZ 1250WV12LSB.
Electric Power:
Electrical power is provided by 7 Diesel-Generator Sets (including one spare), MAN type 14V32/44CR or equal, rated 7.84MW engine MCR at 720RPM. One DG set is located next to the main engine, while the other 6 are in 3 separate engine rooms separated by NT bulkheads above the engine (workshop and Control Room level) and by WT bulkheads below the Freeboard Deck. A 200KW Emergency Generator will be located at the aft end on one accommodation deck. The spare DG set may be reduced to about 500 KW for use while moored or anchored, subject to further load analysis. For estimating purposes, these two items are considered to balance out, and should NOT be included in any cost estimates.
30 April 2009
General Arrangement:
General Arrangement, Typical Sections, Typical Transverse Web Frame and Machinery Arrangement are shown on the attached Drawings. These Drawings are still under development and may show conflicting information reflecting more than one possible structural configuration. The ship is constructed of a mix of mild steel (ABS Grade A) and higher strength (AH-36) steel, and will be classed with ABS. Up to 4% of the total steel weight may be thick enough to require grade DH-36 plate, all located in the lower shell and innerbottom. The amount of this steel required will be determined when the longitudinal strength analysis is completed. For commercial operation on the US East Coast, crew size is 20 persons, including 8 officers (2 senior & 6 junior) and 8 crew in single cabins, and one stateroom for a 4-man maintenance crew. No passenger accommodations are included. As an NDF feature, space and weight is provided for plug-in support services (water, sewage and electricity) for portable troop/passenger accommodation modules at the forward end of the upper deck vehicle space (not defined or included in base price).
*Group 5 Includes an allowance for enlarged water & sewage plugins for Troops as a National Defense Feature. The capacity required has not yet been determined. Total molded displacement in Salt Water is 17033t at a molded draft of 7.5m.
30 April 2009
Capacities:
Vehicles Area, m2 Main Deck 4,360m2 Second Deck 4,195m2 Total 8,555m2
Machinery Space Volumes Space Fwd D.G. Mid D.G. Aft D.G. MnEngRm Void ERDB SideHullMR Aux Mchy AziPod Uptakes & Vents
Frames 33-39 27-33 21-27 15-21 15-21 15-21 9-15 0-9 18-27 Total
Frames 39-42 39-42 33-39 33-39 27-34 27-33 24-34 9-24 9-15 9-15 Total
Frames 53-67 46-53 39-46 33-39 33-43 27-33 27-33 21-27 21-27 9-15 9-15 0-9 Total
Capacity m3 ea 1,824 1,831 1,831 3,404 603 806 1,047 1,214 2,446
Total Capacity Number m3 1 1,824 1 1,831 1 1,831 1 3,404 1 603 2 1,612 1 1,047 1 1,214 1 2,446 15,812
LCG m-AP 101.985F 83.999F 66.000F 48.002F 48.050F 48.139F 30.035F 7.256F 61.500F
VCG m-BL 12.467 12.463 12.463 9.485 1.69 7.228 11.003 11.055 14.5
Fuel Tank Volumes Space F.O. Tk 1P F.O. Tk 1S F.O. Tk 2P F.O. Tk 2S F.O. Tk 3P F.O. Tk 3S F.O. Tk 4P F.O. Tk 4S F.O. Tk 5P F.O. Tk 5S
Capacity m3 ea 282 282 558 558 579 579 285 285 527 527
Total Capacity Number m3 1 282 1 282 1 558 1 558 1 579 1 579 1 285 1 285 1 527 1 527 4,462
Total Capacity Number 1 1 1 1 2 1 2 1 2 1 2 1 m3 988 1,421 1,598 937 1,212 946 1,890 1,573 1,938 828 1,058 1,015 15,404
LCG m-AP 115.472F 115.472F 101.865F 101.865F 83.979F 83.979F 70.615F 70.615F 30.000F 30.000F 3,743t
LCG m-AP 162.473F 141.351F 123.045F 101.945F 100.770F 83.991F 83.842F 64.251F 65.999F 31.269F 32.424F 12.493F
VCG SlackF.S. m-BL m4 5.962 118 5.962 118 5.783 275 5.783 275 5.78 301 5.78 301 5.83 151 5.83 151 6.131 291 6.131 291 at S.G.= 0.8389
VCG m-BL 7.64 5.247 4.674 3.449 6.251 3.325 6.219 4.351 6.211 4.123 6.453 6.828 SlackF.S. m4 329 1877 3649 3337 75 3672 216 4073 231 3276 71 3454
Ballast Tank Volumes Space FP Tk SWB 1C SWB 2C SWB 3P+S SWB 3WS SWB 4P+S SWB 4WS SWB 5P+S SWB 5WS SWB 6P+S SWB 6WS AftPkTk
Capacity m3 ea 988 1,421 1,598 937 606 946 945 1,573 969 828 529 1,015