Competitive Intelligence https://amplioservices.com/ en Warship Size and Cost (Guest Blog) https://amplioservices.com/blog/warship-size-and-cost-guest-blog-0 <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--blog.html.twig x field--node--title.html.twig * field--node--blog.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/field/field--node--title.html.twig' --> <span>Warship Size and Cost (Guest Blog)</span> <!-- END OUTPUT from 'core/themes/stable/templates/field/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--uid--blog.html.twig x field--node--uid.html.twig * field--node--blog.html.twig * field--uid.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/field/field--node--uid.html.twig' --> <span> <!-- THEME DEBUG --> <!-- THEME HOOK: 'username' --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/user/username.html.twig' --> <span lang="" about="/user/1" typeof="schema:Person" property="schema:name" datatype="">admin</span> <!-- END OUTPUT from 'core/themes/stable/templates/user/username.html.twig' --> </span> <!-- END OUTPUT from 'core/themes/stable/templates/field/field--node--uid.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--blog.html.twig x field--node--created.html.twig * field--node--blog.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/field/field--node--created.html.twig' --> <span>Sat, 08/04/2018 - 19:23</span> <!-- END OUTPUT from 'core/themes/stable/templates/field/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'links__node' --> <!-- FILE NAME SUGGESTIONS: * links--node.html.twig x links.html.twig --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/navigation/links.html.twig' --> <!-- END OUTPUT from 'core/themes/stable/templates/navigation/links.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--blog.html.twig * field--node--body.html.twig * field--node--blog.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/amplio/templates/field/field.html.twig' --> <div><p><em>Thanks to Brian Tanner for this guest blog</em></p> <p>The influence of size/ spaciousness on the cost of ship construction and since parametrics are generally weight based how can an estimator allow for changes in ship density in the early design stages? ...</p> <p> </p> <p>In this month’s (May 2016) issue of ‘Warships International Fleet Review’ there is an article entitled ‘Why Size Matters’ which suggests that warship hulls should be built large enough to be capable of housing two generations of technology within its lifetime. This would be achieved by a mid-life upgrade without ship fitting difficulties.</p> <p>It goes on to say that a larger hull results in a more seaworthy ship and mentions the later batches of Type 42 destroyer and Type 22 frigates as examples stating “a few hundred thousand pounds worth of steel (in the Batch 1 ships) was all that was necessary to turn a poor sea boat into something better” with the added advantage of no redesign costs for later batches of the class. As regards the Type 42 there is an interesting letter in the May 2016 issue of ‘The Marine Professional’ referring to the design being cost constrained while estimated solely by weight based parametrics.</p> <p>And the point of this article: the influence of size/ spaciousness on the cost of ship construction and since parametrics are generally weight based how can an estimator allow for changes in ship density in the early design stages?</p> <p>The first question is undoubtedly “What evidence is there that a spacious design is more economical to build?”</p> <p>Firstly, at the ASNE Engineering the Total Ship (ETS) Symposium, Falls Church, VA, 24 September 2008 a paper titled “Damen Schelde Naval Shipbuilding, Damen’s philosophy: Standardized Patrol Boats and Naval Vessels” was presented by Jaap L. Gelling MSc., Damen Shipyards Gorinchem and Leon Goossens MSc., Damen Schelde Naval Shipbuilding. Reproduced below is one section of the paper dealing with the realised benefits of a spacious hull:</p> <p><strong>Oversized hulls</strong></p> <p>Of the Damen Stan Patrol range and the Damen Fast Crew Supplier range, a major part is of “Sea Axe” design (Axe Bow Concept) shown in Figure 1, and one ship is designed to the Enlarged Ship Concept (predecessor of the Sea Axe). These designs make use of an oversized slender hull to improve seakeeping characteristics.</p> <p><strong>Figure 1: Damen Stan Patrol 5009</strong></p> <p><strong><img alt="Damen Stan Patrol 5009" data-entity-type="file" data-entity-uuid="369b68e4-6d8e-43c0-8457-74816b3bd748" height="auto" src="/sites/default/files/inline-images/Damen%20Stan%20Patrol%205009.jpg" width="600" /></strong></p> <p>On first sight, the oversized hull might be considered a disadvantage, as it will be heavier and more expensive. The reality however is considerably different:</p> <ul> <li>The hull of a patrol boat represents only approx. 20% of the total building cost. An oversized hull of 20% in length, in principle will increase the total building cost only by approx. 3-4%. For naval vessels this difference is even smaller due to the costly military equipment and systems.</li> <li>As the oversized hull is relatively empty, the limited extra cost for the larger hull is easily recovered by significant savings on labour for installation of equipment. This was already confirmed during the outfitting of the first series of Stan Patrol 4207’s which took significantly less labour hours than expected.</li> </ul> <p> <strong>Figure 2: </strong><strong>HMNZS Wellington</strong><img alt="HMNZS Wellington.jpg" class="img-fluid" src="https://www.amplioservices.com/hubfs/Site_Pictures/Blog%20Pictures/Warship%20Size%20and%20Cost/HMNZS%20Wellington.jpg?t=1532871045838" /></p> <p>Secondly, VARD, previously STX Canada Marine, have designed a series of successful Offshore Patrol Vessels in their 07 series. <sup>1</sup> The series began with the PV75 ‘Vigilant’ for the Coast Guard of Mauritius built in Chile in 1994. <sup>2</sup> This vessel was based on the 72m Canadian Coast Guard vessel Leonard J Cowley. Subsequent vessels include the 80m Roisin class (2 off) and the 90m Samuel Beckett class <sup>3</sup> (3 off) for the Irish Naval Service together with the 85m Protector class <sup>4</sup><sup> </sup>(2 0ff) for the Royal New Zealand Navy shown in Figure 2. The VARD website claims the design philosophy to:</p> <ul> <li>Engineer greater seaworthiness at higher speeds in a slightly larger but easier to build vessel</li> <li>Design higher internal volume, easier to outfit spaces.</li> </ul> <p>Thirdly, Andrew Humphries in his April 1995 PhD thesis: ‘The Development and Application of Warship Cost Estimating Methods’ continued the Vosper Thorneycroft interest in outfit density <sup>5</sup> and at the RINA Warship 98 conference R.D. Mulligan and M D Courts of the company presented a paper ‘Corvette Design Considerations’ which included Figure 3, presumably based on Humphries research.</p> <p><strong>Figure 3: Effect of Outfit Density on Size and Cost</strong></p> <p><strong><img alt="Effect of Outfit Density on Size and Cost.jpg" class="img-fluid" src="https://www.amplioservices.com/hubfs/Site_Pictures/Blog%20Pictures/Warship%20Size%20and%20Cost/Effect%20of%20Outfit%20Density%20on%20Size%20and%20Cost.jpg?t=1532871045838" /></strong></p> <p>This demonstrates that some increase in ship size, while retaining the same equipment and systems, has a small but advantageous effect on ship costs. But there has to be a limit, but what is it? From work I did in CAAS in the early ‘noughties’ existing warships have a density variation of some ±15% and the overall effect on UPC would be ±1%.</p> <p>Fourthly, are there any other examples?</p> <p>In Denmark the Odense shipyard built the Absalon class of flexible support ships and in Janes Navy International of 1<sup>st</sup> July 2004 with delivery of the first ship imminent the company commented:</p> <p>“It has been an interesting experience and a challenge for us.” He adds “The equipment density is far greater than we are used to with commercial ships. Coordination and sequencing of outfitting has been more challenging than we originally anticipated, and we have exceeded our man-hours target on the first ship. However, we are improving productivity as we go up the learning curve and we are seeing benefits on the second ship.”</p> <p>An advertising pamphlet from Roxtec Seals states “The new Danish flexible support ships in the Absalon class start out as civilian ships at the Odense Steel Shipyard. They are then moved to the Korsoer and Frederikshavn Military Naval Bases for retrofit of military systems and equipment. This addition includes the routing of extensive amounts of new electrical cables and piping throughout different zones and hazardous areas onboard.”</p> <p>Therefore suggesting that the Odense shipyard statement does not scope the total activity for outfitting a naval vessel.</p> <p> A fifth but converse example is the US Navy DDG51 class which were reduced in size. The following is an extract from a January 2012 GAO report (GAO- 12 – 113) on the Arleigh Burke Destroyers (i.e. DDG51 class): </p> <p><strong>Figure 4: DDG 51 Flight 1</strong></p> <p><strong><img alt="DDG 51 Flight 1.gif" class="img-fluid" src="https://www.amplioservices.com/hubfs/Site_Pictures/Blog%20Pictures/Warship%20Size%20and%20Cost/DDG%2051%20Flight%201.gif?t=1532871045838" /></strong></p> <p>DDG 51 is already the most dense surface combatant class; density refers to the extent to which ships have equipment, piping, and other hardware tightly packed within the ship spaces. According to a 2005 DOD sponsored shipbuilding study, the DDG 51 design is about 50 percent more dense and complex than modern international destroyers.</p> <p>Report Footnote: Measured in terms of pounds of weight per cubic foot (lbs/cf), the DDG 51 class has an outfit density of close to 8 lbs/cf which is more than the DDG 1000 and FFG 7 classes, which are approximately 7 lbs/cf, and the CG 47 class, which is approximately 7.5 lbs/cf. </p> <p><strong><strong>Figure 5: First Ship Engineering MH / LT vs. Outfit Density</strong></strong></p> <p><strong><strong><img alt="First Ship Engineering MH LT vs. Outfit Density.png" class="img-fluid" src="https://www.amplioservices.com/hubfs/Site_Pictures/Blog%20Pictures/Warship%20Size%20and%20Cost/First%20Ship%20Engineering%20MH%20LT%20vs.%20Outfit%20Density.png?t=1532871045838" /></strong></strong></p> <p>While the increase in density of some 7% to 14% - depending on the comparator - has an impact demonstrated by these slides from NAVSEA 05C, the Cost Engineering and Industrial Analysis Division of the USDoD NAVSEA organisation.</p> <p><strong>Figure 6: Ships Possessing Great Density Increase Production Cost</strong></p> <p><img alt="Ships Possessing Greater Density Increase Production Cost.png" class="img-fluid" src="https://www.amplioservices.com/hubfs/Site_Pictures/Blog%20Pictures/Warship%20Size%20and%20Cost/Ships%20Possessing%20Greater%20Density%20Increase%20Production%20Cost.png?t=1532871045838" /></p> <p>Japan and South Korea have built their own versions of the DDG 51, but with larger dimensions as tabled here:</p> <p><strong>Figure 7: DDG 51 variants and comparisons</strong></p> <table width="623"> <tbody> <tr> <td><strong>Ship</strong></td> <td><strong> DDG51 Flight 1</strong></td> <td><strong>JDS Kongo </strong></td> <td><strong>KDXIII </strong></td> </tr> <tr> <td> Length oa m</td> <td>152</td> <td>161</td> <td>166</td> </tr> <tr> <td>Length wl m </td> <td>142</td> <td> </td> <td> </td> </tr> <tr> <td>Beam max m </td> <td>20 </td> <td>21</td> <td>21</td> </tr> <tr> <td>Beam wl m </td> <td>18</td> <td> </td> <td> </td> </tr> <tr> <td>Depth m </td> <td>12.7 </td> <td> </td> <td> </td> </tr> <tr> <td>Volume m<sup>3 </sup></td> <td>32,461 </td> <td> </td> <td> </td> </tr> <tr> <td> Lightship Weight Te</td> <td>6,671 </td> <td> </td> <td> </td> </tr> <tr> <td>Standard Displacement Te</td> <td> </td> <td>7,500</td> <td>8,500</td> </tr> <tr> <td>Full Load Displacement Te</td> <td>8,362</td> <td>9,485</td> <td>11,000</td> </tr> </tbody> </table> <p> </p> <p>A June 2014 MIT paper titled ‘Improving the Parametric Method of Cost Estimating Relationships of Naval Ships’ by Ungtae Lee examined the parameters of ‘Electric Power Density’ (EPD) and ‘Outfit Density’. The EPD parameter was introduced by RAND in the 2006 report ‘Why Has the Cost of Naval Ships Risen?’ It is defined as:</p> <p>“Electrical power generation capacity in kW divided by Lightship Weight”</p> <p>While Outfit Density is defined as:</p> <p>Weight of all interior systems and equipments divided by ship volume</p> <p>Which can be determined by:</p> <p>Def Stan 02-163 Σ (Weight Groups 2 to 7) divided by ship volume.</p> <p>The data used to determine the new Cost Estimating Relationship was the Final “end unit cost” which includes all Government-Furnished Equipment and contractor furnished equipment. <sup>6</sup>In both reports the cost of a ninth ship is used <sup>7</sup><sup> </sup>and the comparable parametric equations are:</p> <p>MIT Paper:</p> <p>Ln(Cost)<sub>9 </sub>= 0.626*Ln(LSW) <sup>8</sup> + 1.05*Ln(EPD) + 1.129</p> <p>While RAND produced the relationship:</p> <p>Ln(Cost)<sub>9 </sub>= 0.947*Ln(LSW) <sup>9</sup> + 0.943*Ln(EPD) + 11.50 + Qualitative factors for auxiliary vessels or submarines.</p> <p>The 2014 MIT paper made no distinction between surface combatants and other very different vessels so the RAND relationship is preferred and demonstrates a near linear relationship with build weight and power density.</p> <p>The MIT paper includes the conclusion: ‘Additional variables such as outfit density and shaft horsepower did not statistically improve the CER.’ which is in keeping with other evidence. A typical breakdown of a surface combatant UPC is shown here and demonstrates that labour is just 15% of the UPC. Outfit Density is claimed to save on labour, the main benefit being in seakeeping and in-service support, the NAVSEA plots demonstrating a labour increase of 12% to 16% for DDG-51 leading to a 2½% increase in UPC in keeping with the VT estimate and probably less as the denser hull is slightly lighter. Looked at in reverse, a less dense but slightly larger vessel will be cheaper by a similar margin. </p> <p><strong>Figure 8: Unit Cost Breakdown</strong></p> <p><strong><img alt="Unit Cost Breakdown.png" class="img-fluid" src="https://www.amplioservices.com/hubfs/Site_Pictures/Blog%20Pictures/Warship%20Size%20and%20Cost/Unit%20Cost%20Breakdown.png?t=1532871045838" /></strong></p> <p>So, the answer to the first question has to be that favourable evidence does exist. That leads to a second question: Given that a parametric estimate will be based on existing vessels/ data, how does the estimator adjust an estimate for varied outfit density?</p> <p>A search of public domain information on the internet has not produced a definitive tool/ relationship.  The MIT paper has the graph, shown in Figure 7, of cost per ton versus outfit density which seems to contradict the finding that outfit density had no effect on the CER. One explanation can be that the graph consists of two groups of dissimilar vessels so its use is questionable.</p> <p> <strong>Figure 9: Cost / Weight ($/Long Ton) vs. Outfit Density (lbs/ cu ft)</strong></p> <p><img alt="Cost Weight vs. Outfit Density.png" class="img-fluid" src="https://www.amplioservices.com/hubfs/Site_Pictures/Blog%20Pictures/Warship%20Size%20and%20Cost/Cost%20Weight%20vs.%20Outfit%20Density.png?t=1532871045838" /></p> <p>While a SPAR Associates paper EM-CM-001 ‘Estimating Design &amp; Construction’ January 2010 includes a graph where the density factor was calculated for a selection of ships, both commercial and naval the density being defined as:</p> <p>Density Factor = Σ(SWBS 200 – 700 MTON weights)/ Ship M<sup>3 </sup>Displacement  </p> <p><strong>Figure 10: Tracking Labour Hours per MTON vs. Density "1" Factor</strong></p> <p><img alt="SPAR Ssociates plot of Density Factor.png" class="img-fluid" src="https://www.amplioservices.com/hubfs/Site_Pictures/Blog%20Pictures/Warship%20Size%20and%20Cost/SPAR%20Ssociates%20plot%20of%20Density%20Factor.png?t=1532871045838" /></p> <p>Which is more a ratio of outfit to total weight and not relevant to the current consideration.</p> <p>So, while some evidence exists to demonstrate that a spacious ship will cost no more than, and perhaps a little less than, a cramped design there is no rigorous cost estimating relationship to modify an estimate based solely on weight parametrics that make no allowance for outfit density.</p> <p>The SDSR 2015 which reduced the number of Type 26 frigates from 13 to 8 also stated:</p> <p>“We will also launch a concept study and then design and build a new class of lighter, flexible general purpose frigates”.</p> <p>Hopefully, the experience of the Type 42 destroyer will not be repeated and that the ‘lighter’ warship will not be achieved by a dense equipment density that at the conclusion of construction will be found to have given no cost benefit and prove expensive and difficult to operate and maintain. One example of a larger hull with lower outfit density does exist, albeit for a different reason, and that is the South African Valour class frigate. It was initially described as a ‘Patrol Corvette’ which was a frigate hull for good seakeeping in the southern oceans with a corvette’s armament although significant upgrades were originally planned and have subsequently been achieved.</p> <p><sup>1</sup> Source: <a href="http://vardmarine.com/vessel-design-portfolio/offshore-patrol-vessels/">http://vardmarine.com/vessel-design-portfolio/offshore-patrol-vessels/</a> </p> <p><sup>2</sup> The vessel developed a serious problem on its port shaft in May 1997, a year after commissioning. The Naval Dockyard Mumbai brought it under tow to the yard for repair. The starboard shaft was also found to be weak and several other systems on-board sub-standard.</p> <p><sup>3</sup> These are 10m longer and 0.3m deeper than the Roisin class reportedly to improve seakeeping.</p> <p><sup>4</sup> Public domain information suggests that the ships suffer from a weight problem allegedly due to the introduction of an ice strengthened belt in the hull.</p> <p><sup>5</sup> RINA Paper ‘A Family of Warships’ by P.J. Usher OBE C.Eng. RCNC and A L Dorey C Eng. read on 29<sup>th</sup> April 1981</p> <p><sup>6</sup> Usually described at the Unit Production Cost (UPC).</p> <p><sup>7</sup> Presumably as the learning curve for labour will to all intents become level.</p> <p><sup>8</sup> LSW is Lightship Weight, i.e. Basic Weight or Build Weight</p> <p><sup>9</sup> LSW is Lightship Weight, i.e. Basic Weight or Build Weight</p> </div> <!-- END OUTPUT from 'themes/amplio/templates/field/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: x field--node--comment--blog.html.twig * field--node--comment.html.twig * field--node--blog.html.twig * field--comment.html.twig * field--comment.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/amplio/templates/field/field--node--comment--blog.html.twig' --> <section> <h2></h2> <drupal-render-placeholder callback="comment.lazy_builders:renderForm" arguments="0=node&amp;1=50&amp;2=comment&amp;3=comment" token="8WGO8ImBirMqhXncJ2JSiB-Mre32O1REXwH0equKyUQ"></drupal-render-placeholder> </section> <!-- END OUTPUT from 'themes/amplio/templates/field/field--node--comment--blog.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-category--blog.html.twig * field--node--field-category.html.twig * field--node--blog.html.twig * field--field-category.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/amplio/templates/field/field.html.twig' --> <div> <div>Category</div> <div> <div><a href="/taxonomy/term/10" hreflang="en">Competitive Intelligence</a></div> </div> </div> <!-- END OUTPUT from 'themes/amplio/templates/field/field.html.twig' --> Sat, 04 Aug 2018 13:53:35 +0000 admin 50 at https://amplioservices.com The Need for Informed Inferences (Guest Blog) https://amplioservices.com/blog/need-informed-inferences-guest-blog-0 <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--blog.html.twig x field--node--title.html.twig * field--node--blog.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/field/field--node--title.html.twig' --> <span>The Need for Informed Inferences (Guest Blog)</span> <!-- END OUTPUT from 'core/themes/stable/templates/field/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--uid--blog.html.twig x field--node--uid.html.twig * field--node--blog.html.twig * field--uid.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/field/field--node--uid.html.twig' --> <span> <!-- THEME DEBUG --> <!-- THEME HOOK: 'username' --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/user/username.html.twig' --> <span lang="" about="/user/1" typeof="schema:Person" property="schema:name" datatype="">admin</span> <!-- END OUTPUT from 'core/themes/stable/templates/user/username.html.twig' --> </span> <!-- END OUTPUT from 'core/themes/stable/templates/field/field--node--uid.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--blog.html.twig x field--node--created.html.twig * field--node--blog.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/field/field--node--created.html.twig' --> <span>Sat, 08/04/2018 - 19:20</span> <!-- END OUTPUT from 'core/themes/stable/templates/field/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'links__node' --> <!-- FILE NAME SUGGESTIONS: * links--node.html.twig x links.html.twig --> <!-- BEGIN OUTPUT from 'core/themes/stable/templates/navigation/links.html.twig' --> <!-- END OUTPUT from 'core/themes/stable/templates/navigation/links.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--blog.html.twig * field--node--body.html.twig * field--node--blog.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/amplio/templates/field/field.html.twig' --> <div><div class="section post-body"> <p><em>Thanks to Brian Tanner for this guest blog</em></p> <div> <p>A Historical Trend Analysis is, by definition, the use of historical data the understanding of which can be limited without knowledge, that is, data, be that written records or the musings of people who knew the equipment projects in their much younger days.</p> <p>One simple example comes from Hansard entries: Auxiliary Oiler Replenishment Vessels...</p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><!--more--></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong>Auxiliary Oiler Replenishment Vessels</strong></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><em>HC Deb 19 January 1995 vol 252 c686W</em></span></p> <ul style="list-style-type: square;"> <li><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><em>Mr. Nicholas Brown</em>: To ask the Secretary of State for Defence what was the total cost to the Exchequer including subsidy and post-acceptance refit costs, of (a) AOR1 and (b) AOR2.</span></li> <li><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><em>Mr. Freeman</em>: The total cost to the end of December 1994 to my Department, including post-acceptance rectification work, is £131.1m and £159.4m (actual prices) for AOR 01 and AOR 02 respectively. Final costs for both vessels have still to be agreed. An independent assessment of Harland and Wolff s bid for AOR 01 concluded that the bid contained no element of subsidy. Neither was there any element of subsidy in Swan Hunter's bid for AOR 02. The Northern Ireland Department of Economic Development made payments of £53m to Harland and Wolff as part of the yard's privatisation. These payments were tied to progress in completing AOR 01.</span></li> </ul> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><em>HC Deb 23 May 1995 vol 260 c502W</em></span></p> <ul style="list-style-type: square;"> <li><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><em><u>Mr. Fatchett</u></em></span></li> </ul> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">To ask the Secretary of State for Defence if he is now in a position to announce the agreed final costs for AORO1 and AORO2; and if he will make a statement.</span></p> <ul style="list-style-type: square;"> <li><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><em><u>Mr. Freeman</u></em></span></li> </ul> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">The total cost to the end of April 1995 to my Department is £154.8m and £204.7m, actual prices, for AORO1 and AORO2 respectively. Final costs for both vessels have still to be agreed.</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">So in the space of four months Parliament is told figures which differ by some 20% and 30% respectively.  With some ‘insider’ knowledge, and as given in the text, the first figures are the price in the fixed price contracts while the second set of costs is most probably the total cost of each contract to the MoD, that is, inclusive of inflation payments.</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Such variations, if not understood, can lead to incorrect inferences being drawn.</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">While searching the internet for some information on the real cost growth of defence equipment, the following report resulted:</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">DEFENCE ECONOMIC RESEARCH PAPER - INTERGENERATIONAL EQUIPMENT COST ESCALATION <span style="background-color: transparent;">by N. Davies, A. Eager, M. Maier and L. Penfold</span></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">The writings of Philip Pugh and David Kirkpatrick on the subject of Real Cost Growth are well known, so this report was perused with interest, particularly the section relating to frigates and destroyers.</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">The first half of the following table is a direct copy of Table 1 in the report; the second half is the first half repeated with data from established sources.</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Firstly, where did the base data come from? Prior to 1982 all shipbuilding contract costs were reported in the Navy/ Supply Estimates. And what is the price level of those costs? Again with some insider knowledge, comparing Type 22 costs with known contract prices suggests the published figures are outturn. If one were to ask what costs are available in MoD they will be either the contract cost available from contracts department or the total cost paid by the MoD available from the finance department, that is contract price plus payments for inflation</span></p> <p style="text-align: center;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong style="background-color: transparent;"><span style="background-color: transparent;">Figure 1: Shipbuilding Contract Real Cost Growth, Reported</span></strong></span></p> <table style="height: 249px;" width="627"> <tbody> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong>Earliest In-Service Date</strong></span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong>Frigate Class</strong></span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong>Displacement (Tons)</strong></span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong>Unit Cost <span style="background-color: transparent; font-size: 12px;">('09 ECs) </span></strong></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1956</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Type 14</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1,456</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£33m</span></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1957</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Type 12</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">2,150</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£62m</span></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1957</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Type 12M</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">2,150</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£71m</span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1959</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Type 81</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">2,300</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£94m</span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1961</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Leander</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">2,500</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£81m</span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1972</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Type 21</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">2,750</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£192m</span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1976</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Type 22</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">4,400</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£413m</span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1989</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Type 23</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">4,800</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£183m</span></td> </tr> </tbody> </table> <p style="text-align: center;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""> </span></p> <p style="text-align: center;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong><span style="background-color: transparent;">Figure 2: <strong style="background-color: transparent;"><span style="background-color: transparent;">Shipbuilding <strong style="background-color: transparent;"><span style="background-color: transparent;">Contract Real Cost Growth, Alternative</span></strong></span></strong></span></strong></span></p> <table style="height: 249px;" width="627"> <tbody> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong>Delivery Date</strong></span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span style="font-size: 16px;"><strong>Ship Name</strong></span></span></td> <td style="width: 153px;"> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong><span style="background-color: transparent;">Navy / Supply Estimates: Shipbuilding Costs</span></strong></span></p> </td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong>Shipbuilding  Costs <span style="background-color: transparent; font-size: 12px;">('09 ECs) </span></strong></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1955</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Hardy</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£1.4m</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£30.4m</span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1956</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Torquay</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£2.7m</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£59.5m</span></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1960</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Yarmouth</span></td> <td style="width: 153px;"> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£3.5<span style="background-color: transparent;">m</span></span></p> </td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£61.8m</span></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1961</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Ashanti</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£5.3m</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£91.9m</span></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1963</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Leander</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£4.6m</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£78.0m</span></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1974</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Amazon</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£16.8m</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£180.0m</span></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1979</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Boadsword</span></td> <td style="width: 153px;"> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£31.3m <span style="font-size: 10px;"><sup>1</sup></span></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£68.6m<span style="font-size: 10px;"> <sup>2</sup></span></span></p> </td> <td style="width: 156px;"> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£261.4m</span></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£392.5m</span></span></p> </td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">1989</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Norfolk</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£66.8m <span style="font-size: 10px;"><sup>3</sup></span></span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£174.2m</span></span></td> </tr> <tr> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">2001</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">HMS Portland</span></td> <td style="width: 153px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">£85.0m</span></td> <td style="width: 156px;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span>£122.9m</span></span></td> </tr> </tbody> </table> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""> </span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span style="background-color: transparent;">For the second half of the table, the costs were normalised to the 2009 price level using the GDP deflator, the index for the original costs being taken as the average over the construction period for each ship. The Type 22 entries demonstrate how informed inferences are essential for the use of historical data.</span></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Over the sample period between Type 14 First of Class <span>(FOC) </span>HMS Hardy and Type 23 First of Class HMS Norfolk the unit cost escalation is 5.3% per annum; on a specific cost basis the cost escalation is 1.87% per annum.</span></p> <p style="text-align: left;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Over the period in which later Type 22s and Type 23 frigates were under construction there was significant change in contract conditions and manufacturing processes. One can assume that, to a first degree of accuracy, the costs for HMS Portland can be a proxy for the first of class built at the end of these conditions. That would result in performances of 3.9% and 0.5% per annum, that is, changes in the shipbuilding industry have countered the increase in ship complexity although this does exclude the inevitable cost growth that will have occurred in the GFE weapon systems.</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">The analysis of real cost growth is usually done assuming a geometric relationship. If such a relationship is applied to all First of Class frigates since World War II, the specific cost is found to increase at 1.95% per annum. If qualitative factors are introduced to represent more rigorous contract conditions and improved production facilities, and Type 45 specific cost used to represent the most recent class of DD/FF, the underlying real cost growth is 3.6% per annum. Here is the graphic:</span></p> <p style="text-align: center;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><strong style="background-color: transparent;"><span style="background-color: transparent;">Figure 3: Cost per Tonne Trend Line FOC Ships</span></strong></span></p> <p style="text-align: center;"><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><img alt="Cost Per Tonne Trend Line FOC Ships.png" data-entity-type="file" data-entity-uuid="c1ab8d83-ad86-4533-8a0b-d924ca03f598" src="/sites/default/files/inline-images/Cost%20per%20Tonne%20Trend%20Line%20FOC%20Ships.png" width="500" /></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">For Type 26 Global Combat Ship the regression lines suggest a Cost per Tonne of £105,000 to £110,000 per tonne. From a size trend line the Full Load Displacement (FLD) of the Type 26 Global Combat Ship will be some 6,250 Tonnes. Using typical Lightship to FLD ratios this suggests a shipbuilding cost of £490m - £515m at 2009 Prices. £530m - £560m at 2013 prices. How close to the truth the estimate is only time will tell, but a rigorous application of regression theory would produce a wide prediction interval due to the small data set.</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Referring back to the table there are some observations to be made:</span></p> <ol> <li><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Where the costs in the report are similar to those of this paper the differences are probably due to the assumption of the original price levels and the normalisation tables used.</span></li> <li><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">After the cessation of reporting shipbuilding costs in the Navy/ Supply Estimates, the provision of information in response to parliamentary questions may have had a different scope, i.e. unit costs rather than platform costs;</span></li> <li><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">During the middle of the 1970s when Type 21 and Type 22 frigates were under construction inflation was very high, exceeding 25% in one year. Taking average inflation across any one build period to normalise the costs can be expected to introduce errors.</span></li> </ol> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style="">Perhaps the most important observation is that without good historical data any trend analysis will be subject to uncertainty. Given the frequency of defence equipment deliveries, data collection to the level required for trend analysis should not be an onerous task.</span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span><span><span style="font-size: 10px;"><sup>1</sup></span><span> </span></span><span style="font-size: 10px;">Final Contract Price – probably excluding Long Lead Items – from old SPS (CAAS) database</span></span></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span><span style="font-size: 10px;"><sup>2</sup> <span style="font-size: 10px;">Supply Estimate Outturn – probably including Long Lead Items</span></span></span></span></p> <p><span class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text" data-hs-cos-general-type="meta_field" data-hs-cos-type="rich_text" id="hs_cos_wrapper_post_body" style=""><span><span style="font-size: 10px;"><span style="font-size: 10px;"><sup>3</sup> <span style="font-size: 10px;">Type 23 data from CAAS data sheet.</span></span></span></span></span></p> </div> </div> </div> <!-- END OUTPUT from 'themes/amplio/templates/field/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: x field--node--comment--blog.html.twig * field--node--comment.html.twig * field--node--blog.html.twig * field--comment.html.twig * field--comment.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/amplio/templates/field/field--node--comment--blog.html.twig' --> <section> <h2></h2> <drupal-render-placeholder callback="comment.lazy_builders:renderForm" arguments="0=node&amp;1=49&amp;2=comment&amp;3=comment" token="EYSBuqNkTPlaRK1NSYbtsloNkP_0gUfu3_ifJvB-TkQ"></drupal-render-placeholder> </section> <!-- END OUTPUT from 'themes/amplio/templates/field/field--node--comment--blog.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-category--blog.html.twig * field--node--field-category.html.twig * field--node--blog.html.twig * field--field-category.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/amplio/templates/field/field.html.twig' --> <div> <div>Category</div> <div> <div><a href="/taxonomy/term/10" hreflang="en">Competitive Intelligence</a></div> <div><a href="/taxonomy/term/1" hreflang="en">Guest Blog</a></div> </div> </div> <!-- END OUTPUT from 'themes/amplio/templates/field/field.html.twig' --> Sat, 04 Aug 2018 13:50:15 +0000 admin 49 at https://amplioservices.com https://amplioservices.com/blog/need-informed-inferences-guest-blog-0#comments