1 Why do you think it is common for defense contractors to a

1) Why do you think it is common for defense contractors to add new features and modifications to current programs and if you were an advisor brought in by the Spanish government- what advice would you offer them in managing their defense projects?

CASE STUDY 7.2 The Spanish Navy Pays Nearly $3 Billion for a Submarine That Will Sink Like a Stone In 2003, shipbuilders at Navantia, Spain\'s state- reactor is also underperforming. A Strategic Studies owner shipyard, welcomed a contract from their Group spokesperson said that the AIP system has navy to construct four state-of-the-art submarines. been designed to enable the submarine to operate The S-80 class was going to be an engineering mar- underway for 28 days but is currently able to man- vel, filled with the latest and most cutting-edge age only one week. The Group\'s memo suggests, technology, including a diesel-electric propulsion \"The buoyancy problem alone could cost up to half system that would be 20% lighter than other ships, a billion euros to cover redesign and extra construc- while delivering 50% more power. As the list of up- tion, without considering the propulsion problem.\" grades and new technical gadgetry grew, the deliv- The submarine setback couldn\'t have come ery date for the Isaac Peral—the lead ship in the S-80 at a worse time for Prime Minister Mariano Rajoy, class-continued to ship further behind schedule. who was already caught up in a corruption scan- Nevertheless, it wasn\'t the continuous upgrading dal and saw his approval rating hit a record low in and addition of new equipment that finally slammed 2013. Because of the poor shape of Spain\'s economy, the brakes on the project; it was the startling warning Rajoy\'s austerity cuts trimmed the Spanish military from Navantia\'s engineers that the Isaac Peral was budget by 30 percent in 2012, leaving much less not seaworthy. The submarine, named in honor of the room for added ballast. With reports that the S-80 Spanish man credited by some as the inventor of the program will be delayed an estimated two years underwater vessel, was 75-100 tons overweight, an and another general election looming in 2015, Rajoy excess that could make it difficult or impossible for likely will not see the submarines through to suc- the submarine to surface after submerging. As a re- cessful launch. sult, the Spanish navy was faced with the challenge How did such an expensive project get funded at of fixing a submarine that ran the risk of disaster a time when the Spanish military\'s entire special weap- whenever it decided to submerge! ons program received a 98% cut? Sheer pride seems to Navantia admitted the existence of \"devia- have been a factor: Spain hoped the S-80 class would tions related to the balance of weight\" in the vessel be a new homegrown breakthrough achieved with- and estimated it would take up to two years more out foreign help. Now that Navantia has entered into to correct the problem, pushing the new delivery a $15 million contract with the Electric Boat Division date to late 2018. The firm\'s engineers are trying to of America\'s General Dynamics to help with the rede- determine their best options at this point. It appears sign, that dream seems dead in the water.\" that two choices are most likely: Find a way to trim the design of the overall ship, which would be very difficult at this stage in construction, or lengthen Questions the hull of the already 233-foot submarine to com- 1. Google \"Spain\'s S-80 class submarine\" and read pensate for the extra weight. The problem with this some of the articles posted. In your opinion, how option is that designers have estimated that for every does technical risk cause problems with major meter the hull is lengthened, it will end up costing defense projects? nearly 10 million additional euros (about $14 million 2. Why do you think it is common for defense con- dollars). Unfortunately for the Spaniards, indepen- tractors to add new features and modifications dent agencies report that they have already sunk the to current programs? In other words, why do equivalent of $680 million into the Isaac Peral, and a defense agencies contract for one project, only total of $3 billion into the entire quartet of S-80 class to see it often evolve into something new by the submarines. time it is launched? The buoyancy problem is not the only difficulty 3. If you were an advisor brought in by the Spanish facing the program; an analyst said that that sub- government, what advice would you offer them marine\'s air-independent propulsion (AIP) system in managing their defense projects?

Solution

According to the case study, its always observed that lots of money were invested in adding or modifying the equipments because for the defense sector, navy gets the enough money to invest the submarinesas well as the current programs as they also gets the permissions too. They invested around $3 billion for a submarin, which will sink like a stone in the year of 2003.

If I were the advisor brought in by the Spanish goverment I would have offered the advice to not invest much in always changing in the current programs infact would have suggested a complete research and analysis on the submarines and other necessities, if there is need of modifications to be done in the program then only deal with the contractors otherwise not. This will decrease in the investment of money as well as the unnecessary changes leading no upgradation due to unecessary investment for the changes in programs.