In wake of BIW president's exit, watchdog criticizes Navy oversight of shipyards

Courtesy / General Dynamics Corp. Two destroyers built at Bath Iron Works, the USS Michael Monsoor, left, and USS Thomas Hudner, were included in a federal audit of Navy ship contracting.

Write a Comment

By William Hall

A federal watchdog report, published Tuesday, criticizes the Navy’s oversight of shipbuilders including Bath Iron Works — whose president, Dirk Lesko, abruptly resigned six days ago.

Lesko’s departure came without public explanation and less than two weeks after the Navy installed a new overseer at BIW, from the very branch criticized yesterday by the U.S. Government Accountability Office.

The 66-page GAO report finds fault with the Navy’s onsite organization — the Supervisors of Shipbuilding, Conversion, and Repair — that's responsible for overseeing construction and managing shipbuilding contracts. Bath is one of four “SUPSHIP” sites in the country, and where Capt. David Hart took command on March 25.

The supervisory offices lack enough power to effectively manage private yards like BIW, contributing to ship construction delays and cost overruns, the report claims. It cites 2018 research by the GAO showing ship costs exceeded estimates by more than $11 billion over the previous decade.

“Despite the efforts of the SUPSHIPs and others to assure construction quality and contract execution, Navy shipbuilding results have regularly fallen short of program expectations,” the report reads. “These results have raised questions about the Navy’s ability to effectively oversee shipbuilder performance throughout the construction of new ships.”

In response to a Senate request in 2020, the GAO spent over a year examining the role of the supervisors, a spokesman told Mainebiz. The findings and a set of recommendations were shown in February to the Assistant Secretary of the Navy's office, which agreed with them in a letter dated March 25 — coincidentally, Hart’s first official day at BIW.

While the GAO spreads criticism across the Navy and its shipbuilding oversight in general, the report calls some attention to BIW’s building of the USS Michael Monsoor, a Zumwalt-class destroyer launched in 2018.

The GAO’s audit included reviewing construction over the past five years of the Monsoor and 11 other Navy ships, roughly a third of the vessels commissioned during that time. Among the dozen projects, the GAO found 109 cases of construction deficiency that were waived by the Navy’s highest-ranking officer, the chief of naval operations.

BIW’s construction of the Monsoor accounted for 47 of the waivers.

Among the dozen ships, only one, the aircraft carrier USS Gerald R. Ford, required more waivers, a total of 51 granted either before at-sea “builder's trials” or before the ship was delivered to the Navy. Seven ships required no waivers at all.

Although sometimes in the best interest of the Navy, at least over the short term, the GAO wrote, "The use of waivers can create challenges." They include "the potential to mask construction problems with longer-term quality and performance consequences that can limit ship operations for the fleet forces."

Courtesy / General Dynamics Bath Iron Works

Dirk Lesko, shown here discussing the pandemic in a 2020 YouTube video, resigned from BIW is April and will become head of a Canadian shipbuilder in September.

Prior to their most recent duties, both Hart and Lesko both held positions managing the construction of BIW’s Zumwalt-class ships.

Hart's previous posts, according to his LinkedIn profile, include serving onsite at BIW from 2013 to 2017 as a Navy program managers representative, supervising construction of the Zumwalt destroyers in Bath.

Lesko held multiple roles at BIW, including program manager for those warships, before he was promoted to president in November 2016. In 2008, he signed BIW's initial $1.4 billion contract to build USS Zumwalt, the first of the three guided-missile "stealth" ships in the class.

At roughly $4.2 billion apiece, the 600-foot Zumwalt destroyers are more than twice the cost of the Navy’s slightly smaller Arleigh Burke-class destroyers, which have been the staple of BIW’s shipbuilding since the 1980s.

In 2018, Mainebiz cited reports that the Zumwalt program had been plagued by cost overruns and production delays that had driven its overall cost, including research and development, to $24 billion.

A spokesman for BIW, David Hench, declined to comment on the GAO report.

Bath Iron Works is owned by Reston, Va.-based General Dynamics (NYSE: GD), one of the largest defense contractors in the world. In 2021, the company reported $38.5 billion in revenue.