At today's hearing, Senator Collins pointed out to Secretary England an inconsistency in the Navy's approach to ship procurement. She noted that in 2001 there were two producers of nuclear submarines, Electric Boat (owned by General Dynamics) and Newport News. General Dynamics attempted to purchase Newport News, an acquisition which would have led to sole source production for nuclear submarines. The Navy blocked the acquisition, citing the fact that the merger would have given General Dynamics a permanent monopoly in nuclear submarine production. Now, the Navy is proposing a sole source strategy for destroyer production. Senator Collins noted this inconsistency and elaborated on the hazards of the strategy. Senator Collins said:
"This acquisition would have ended competition in nuclear submarine construction. After reviewing the transaction, the Department of Defense opposed this acquisition, and along with the Department of Justice, blocked it. In explaining the decision, Charles James, the Assistant Attorney General in charge of antitrust said, ‘This merger would give General Dynamics a permanent monopoly in nuclear submarines and would substantially lessen competition in surface combatants.' Deputy Undersecretary of Defense Suzanne Patrick said in regards to this issue that ‘We really had to maintain competition. We could not afford to let the yard go to what would end up being a sole source for us of submarines.'"
"Mr. Secretary, the Department believed, very correctly, that our nation could not afford to have a sole source producer of submarines. Why is it that now the Department apparently believes that we should have a sole source for surface combatants?" said Senator Collins. "I fail to understand how this logic is not applicable today. The rationale taken to split production of the Virginia submarines seems to me to be as valid then as it is today – competition guarantees better costs, design and production."
Senator Collins stressed that it is vital to the future strength of the naval fleet that the military maintain a strong shipbuilding industrial base with skilled and experienced workers. She also stated the importance of constructing enough ships to meet the nation''s security requirements. The Navy's budget proposes that only five DD(X) be built over the next five years. Navy officials have previously admitted to Senator Collins that the fleet requires more ships, such as the twelve DD(X) destroyers proposed in last year's budget.
The Committee Chairman, Senator John Warner of Virginia, shared Senator Collins views, indicating his objections to changing the acquisition strategy to only one producer of major surface combatants.
Senator Collins, along with a number of Senate colleagues, wrote a letter to the President asking that he preserve two surface combatant shipyards for the construction of DD(X) destroyers for the naval fleet. The letter is in response to reports that the Department of Defense is considering revising its acquisition strategy for the DD(X) to conduct a winner-take-all competition in 2005, which would mean only one of the two shipyards would be awarded a Navy contract to design and construct the ships.