Research for Cost Analysis

The Navy conducted an experiment to test a concept—called Sea Swap—that involves the rotation of crews on surface combatants. As part of that experiment, the Navy assessed cost savings; however, that assessment was preliminary, partial, and specific to the experiment. This study examined the broad cost implications of Sea Swap. Although we focused more on the framework for assessing costs than on estimating exact costs, we developed some estimates based on sample cases. We recognized that cost implications of Sea Swap would differ, depending on whether the program was mature (sunset) or new (sunrise). We found that significant cost savings or cost avoidance would result from implementing Sea Swap for both sunset and sunrise programs: a one-time savings of about $1.4 billion and $700 million in annual savings for a sunset program (DDG–51), and a one-time cost avoidance of roughly $14 billion and $500 million in annual cost avoidance for a sunrise program (Littoral Combat Ship (LCS)). Because the program of record for the LCS assumes Sea Swap and hence fewer ships than otherwise, the “savings” are from avoiding costs that the Navy could have incurred under traditional crewing.