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DoD Estimates the Annual Cost of Corrosion for Navy Ships

Latest Report Employs Data from Fiscal Years 2008-2010

LMI Government Consulting was asked by the DoD Corrosion Prevention and Control Integrated Product Team (CPC IPT) in May 2011 to measure the cost of corrosion on U.S. Navy ships. This review is part of a multi-year plan to measure the effects of corrosion on DoD weapon systems. Table 1 lists past and current Navy corrosion studies. (The study period is one calendar year.)

The most recent report, Estimate of the Annual Cost of Corrosion for Navy Ships: FY 2008-2010 Update, was published in September 2012. The report provides an update of previous studies on corrosion-related costs for Navy ships. It also is the first study to include an analysis of the effect of corrosion on availability for Navy ships.

Table 1. Navy Cost-of-Corrosion Studies

Using fiscal year (FY) 20101 as a measurement baseline, we estimated the annual corrosion-related cost for Navy ships to be $3.15 billion, or 18.7 percent of the total maintenance cost for all Navy ships, $16.6 billion.2

The increase in corrosion-related costs between FY2008 and FY2010 was the result of both an increase in maintenance labor costs3 and an increase in corrosion-related costs attributable to commercial depot maintenance.

1LMI based the Navy's corrosion-related costs on FY2010 data, the most recent year for which study data was available.
2We calculated the total Navy ships maintenance cost by aggregating depot and field-level maintenance and select costs outside normal maintenance reporting.
3The FY2010 labor rates were 5.7 percent and 7.7 percent higher than the FY2008 labor rates for military and civilian maintenance technicians, respectively.

We segregated the corrosion-related costs using three schemas: 1) depot or field-level maintenance (DM or FLM) costs, as well as costs outside normal maintenance reporting (ONR); 2) corrective versus preventive maintenance costs; and 3) costs related to structure or parts.

Table 2 shows both the costs and percentages within each schema for FY2010.

Table 2. Nature of Corrosion-Related Costs for Navy Ships (FY2010)

The Navy incurs the highest corrosion-related costs during depot maintenance ($1.52 billion), which represents a little less than half of the total corrosion-related costs for Navy ships. Also of note is the percentage of corrosion-related DM costs compared to the total DM costs (roughly 20 percent of $7.61 billion) and corrosion-related FLM costs compared to the total FLM costs for ships (roughly 16 percent of $6.52 billion). The corrosion-related ONR cost ($619 million) for Navy ships is relatively high in relation to other military services. This is due to the large population of shipboard personnel who perform corrosion-related maintenance, even though their skill specialty is not associated with maintenance. The amount of corrosion-related maintenance performed by non-maintenance shipboard personnel has increased significantly since the initial FY2004 study, when it was $314 million.

Table 3 shows the corrective and preventive corrosion-related costs over the years (FY2004 and FY2008—10).

Table 3. Navy Ships Corrective and Preventive Corrosion-Related Cost by Study Year

Costs incurred to prevent corrosion (e.g., painting, inspection, coating, and quality assurance) increased by more than $360 million from FY2004 to FY2010. Corrosion-related corrective costs decreased slightly during the same period.

We also segregated corrosion-related costs according to ship category. Table 4 presents a summary of these costs. We accounted for a total of 237 ships across all ship categories and all three fiscal years. The corrosion-related costs for surface warfare ships and carriers increased between FY2008 and FY2010, while the per-ship average for amphibious ships and submarines remained fairly stable.

Table 4. Corrosion-Related Maintenance Cost by Ship Category (in millions)

Table 5 and Table 6 show the top five corrosion-related costs by work breakdown structure for ships and submarines, respectively. The work breakdown structure (WBS) allows us to determine the major systems and subsystems incurring maintenance. The two highest corrosion-related WBS cost categories for surface ships and submarines are the same: 1) trunks and enclosures and 2) painting. The corrosion-related costs for submarines are more concentrated by WBS than the corrosion-related costs for surface ships. (Note: Percentages are not exact due to rounding. ESWBS = expanded ships work breakdown structure. This is the work breakdown structure schema used for Navy surface ships.)

Table 5. Navy Surface Ships Corrosion-Related Cost Ranking by ESWBS for FY2010

Table 6. Navy Submarines Corrosion-Related Cost Ranking by SWLIN for FY2010

Navy ships are nearly always able to put out to sea when required. What non-availability that does occur happens during the performance of depot maintenance at a Navy (organic) or commercially operated shipyard.

We determined that corrosion-related work accounts for an average of 25 percent of the total DM dry-dock work performed during dry-dock periods. Although not a precise correlation, if the average DM period is 155 days, we can infer that corrosion-related work contributes to about 38 days of the non-availability for each Navy ship in depot maintenance during a dry-dock period.

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