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VIRGINIA-Class Submarine: Two for Four i...

Cross, Tom, Pottin...

Case

VIRGINIA-Class Submarine: Two for Four in 2012 (B)

Cross, Tom; Pottinger, Jeff

OM-1385 | Published September 1, 2009 | 9 pages Case

Collection: Darden School of Business

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The VIRGINIA-class submarine was one of the largest naval-acquisition projects in history, involving the construction of 30 submarines at an acquisition cost of $93 billion. By FY05, the VIRGINIA-class program was in its 10th year. Construction had begun on seven submarines. Unit costs were running 41% over the base-line budget, and production goals were not being met. Ship construction budget limits necessitated a 20% unit-cost reduction, an unprecedented task on a ship already in serial production. How would the program office achieve that goal and prevent the program from being truncated, the fate of its predecessor the SEAWOLF-class?

1. Examine issues that have plagued major acquisitions and how to overcome them. 2. Estimate risk for various sourcing options, mitigate risks, and estimate probability of success for a sourcing strategy. 3. Develop and communicate a comprehensive sourcing strategy. 4. Lead a long-term, major acquisition program to meet aggressive goals. 5. Examine the processes, structure, and metrics needed to ensure success. 6. Examine strategic sourcing principles, processes, structure, and metrics for major acquisitions based on industry best practices and recent lessons learned. 7. Provide available tools to reduce costs and improve production time. 8. Support the importance and mechanics of teaming with the shipbuilders and other stakeholders to get their commitment to cost reduction initiatives.