SAN DIEGO, California—Deliver what we ask for on time. That’s the terse message two maritime service chiefs are sending to industry.
“What I need is: when I have a contract with you, you deliver it on time. That’s really what I need. I don’t know how to sugarcoat that. It’s impossible to sugarcoat that. I need my stuff on time,” Adm. Daryl Caudle, chief of naval operations, told attendees Wednesday at the annual WEST Conference. “We just have to be very transparent about that. So I’d rather, you know, go into that contracting strategy and negotiation with that in mind, and be very honest about that.”
Marine Corps Commandant Gen. Eric Smith agreed: “If it’s going to be delayed, well, that’s a you problem. That’s not a me problem, because I paid for something and I expect to get it.”
Smith, who shared the stage with Caudle, said the goal is to buy what Marines need at the “best cost.”
“I know what I need. I’m a recovering requirements officer. I need a missile that shoots [200] miles. If you have something that you can give me for the same cost and on the same performance, same schedule, but it goes 250 miles, then that’s great. I’ll take it,” Smith said, as an example.
The service chiefs acknowledged how erratic government funding and single-year appropriations affect private industry.
“We do owe industry a time horizon [where] they can stabilize their workforce,” Caudle said.
“I don’t know why I don’t have a five-year horizon with the shipyards that do my surface ship maintenance,” which could give companies the time to plan ahead.
Smith pushed the need for multi-year funding, suggesting the services and industry sync messaging to Capitol Hill to advocate for it.
Congress “can appropriate multi-year funding” but doesn’t like to, Smith said. The result is single-year funding that could mean “$100 million this year and it’s nothing the next year. And you can’t, you can’t operate that way. So I think we have to collaborate…on our messaging to the Hill that, ‘Hey, we need multi-year funding.”
‘Everything costs what it costs’
Keeping costs down without sacrificing quality or on-time delivery is a longstanding conundrum for military procurement. But while there’s general reticence towards higher costs, especially for large platforms like ships, it’s a reality the Navy must accept, Smith said.
“I don’t want to pay, you know, $4 billion for a ship. Neither does my shipmate [Adm.] Daryl Caudle, but that’s what it costs to have pipefitters, steamfitters, welders, electricians build the ship,” and have a livable wage, Smith said. “Everything costs what it costs.”
Smith’s comments come as shipbuilders look to boost wages—with some reports of success—as a way to attract and keep the workers essential to meeting maritime national security needs.
But simply increasing wages may not be enough, argued Ronald O’Rourke, a recently retired naval analyst and researcher for the Congressional Research Service. Those wages need to be at a level that distinguishes shipbuilding not only from competing sectors in a given region, but from other manufacturing jobs.
“It’s widely recognized that to attack this issue, wages and benefits need to be increased to help re-establish a larger wage differential between shipbuilding jobs and service sector jobs. Less widely recognized is that wages and benefits also need to be increased to help establish more of a wage differential between shipbuilding jobs and other manufacturing jobs. The government reported last year that there were about 400,000 manufacturing jobs that were unfilled,” O’Rourke said during a separate shipbuilding panel Wednesday.
Those same skilled workers may also be lured by the boom in AI data centers nationwide.
In a report to the White House in October, OpenAI claimed data centers and energy infrastructure would need about 20 percent of the nation’s existing skills trade workforce over the next five years.
“So people interested in going into manufacturing and construction work have a choice of jobs—and a lot of those jobs are done in settings that are more comfortable than shipbuilding,” O’Rourke said.
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