The Potomac Institute for Policy Studies has been asked by the Defense Advanced Research Projects Agency (DARPA) to perform an independent study of the MARITECH program, as it approachs its fifth year and is in the process of transferring to Navy management. Much is to be gained by taking a hard and independent look at this revolutionary program to understand how well it is accomplishing its objectives and what benefits are expected over the next few years. A good deal of this insight can be gained from examining those efforts managed by the shipyards.

The principal goals of the MARITECH Program Review are to:

• Provide an independent assessment of ongoing and completed shipyard-managed projects conducted under MARITECH
• Assess how well these projects are serving the objectives set by the MARITECH Program Office
• Collect and document stories to illustrate the benefits and the difficulties encountered in conducting a dual-use program with an emphasis on creating a commercial market
• Derive lessons learned that will help guide future efforts and provide insight into prioritization of goals and approaches

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MARITECH Program Background

New Challenges

The post-Cold War defense procurement posture has changed significantly. The Department of Defense (DoD) no longer projects the procurement of large numbers of new weapon systems. Particularly hard hit is U.S. Navy procurement of capital ships, which has declined steadily since 1991. Current strategy calls for the maintenance of a 300 ship Navy compared to the mid 1980’s goal of a 600 ship Navy. The effects of this vastly changed procurement posture on the U.S. shipbuilding industry were of great concern a half dozen years ago when the DoD budget began to fall. Our political leaders were particularly worried because the U.S. shipbuilding industry was almost totally devoted to building U.S. Navy ships and therefore had no other market to turn to.

The impact is beginning to be visited upon the Navy, which is finding costs and availability of shipbuilding technologies and facilities rising at an alarming rate. An effective way to counter this trend is to look to the commercial marketplace, as is being done in the various dual-use activities throughout the DoD. However, dual-use cannot be a solution where there is no commercial industry. Unfortunately, that is the case with the U.S. shipbuilding industry today, which for decades has neglected the building of commercial vessels. This neglect, coupled with the ever-diminishing demand for Navy ships, has resulted in an atrophy throughout the American shipbuilding industry which threatens to end not only our ability to ever compete in commercial shipbuilding again, but also in military shipbuilding.

Although a solution to the diminishment of Navy ship procurement may be for U.S. shipyards to become competitive in the global shipbuilding market, there has been little evidence that this can be done in the near future without an intense and collective effort by the shipyards, perhaps with government help. Recent experience is not encouraging. In the mid-70’s, U.S. shipbuilders built, on average, 20 large commercial ships per year. This production rate has steadily decreased, with fewer than 20 ships being built during the entire eleven-year period, from 1982 to 1993. [1]

MARITECH Program

In October 1993 President Clinton approved and signed a report to Congress titled, "Strengthening America’s Shipyards: A Plan for Competing in the International Market." This report described a program, MARITECH, that would share the costs of industry-initiated research and development projects to accelerate technology transfer and process change. MARITECH was to focus on manufacturing and information technologies needed by U.S. shipyards to become competitive in international shipbuilding commerce. The program is managed by the MARITECH Office, operating under the Defense Advanced Research Projects Agency (DARPA) with personnel support from the U.S. Navy and the Maritime Administration. The MARITECH Program began in FY93, principally to encourage the U.S. shipbuilding industry to expand into the commercial sector, thereby increasing its potential for staying in business and passing savings gained from commercial efficiencies and economies of scale to the Navy. The MARITECH Program has been funded at $30-50 million per year since FY94. The program receives its final year of funding in FY98 and will then transition to a U.S. Navy managed effort to carry on the goals of MARITECH.

MARITECH Objectives and Approach

Five objectives were adopted by MARITECH to facilitate pursuit of commercial competitiveness in the shipbuilding sector. These objectives were listed in the President’s Plan and the National Shipbuilding and Shipyard Conversion Act of 1993. They are to:

• Encourage and support proactive market analysis and product development
• Develop a portfolio of U.S. designs
• Develop innovative design and production processes and technology
• Facilitate government and industry technology transfer activities
• Encourage formation of consortia for short- and long-term technology investment strategies

The resulting MARITECH Program has sponsored projects in three areas:

The Near Term Approach is to apply technology for quick commercial market penetration. The stated goals of the near-term phase is to penetrate the global market in one-to-three years, and to change the U.S. shipbuilding culture to commercial practices. This is being accomplished through vertically oriented consortia or teams, market-oriented commercial ship designs, commercial shipbuilding strategies, and business plans.

The Long Term Approach is to develop advanced technology to achieve a self-sustaining shipbuilding mobilization base. The approach is to emphasize consortia or teams, to seek out and develop advanced technology and radical process and product improvements, and to facilitate culture changes toward commercialization.

In addition, MARITECH has initiated Nsnet, an electronic commerce and computer-integrated enterprise to bring information and electronic technology strengths of DARPA and the nation to the maritime industry. Results of working in this area will include: building an internet infrastructure in the maritime community and developing and deploying future technologies to enable the community to perform electronic commerce. Shipyard-Managed Projects

Many of the projects sponsored by MARITECH are managed by one of nineteen shipyards. They are especially focused on developing technology and infrastructure and pursuing a large commercial market in shipbuilding. The MARITECH Program Office perceives that these projects constitute a vital cross section of the total MARITECH Program, providing insight into the strengths, weaknesses and lessons to be learned from the program as a whole.

The MARITECH Program Review

As stated above, the basic purpose of the MARITECH Program is to improve the commercial competitiveness of the U.S. shipbuilding industry. Benefits to the Navy include improved availability of shipbuilding, more efficient (therefore faster and less expensive) shipbuilding processes, and a broader range of dual-use technologies and products. In order to optimize this process, it is important to understand its major efforts at each stage of progress. This will be accomplished through the Institute's MARITECH Program Review which will study each of the shipyard-managed MARITECH projects at fourteen yards.

[1] SCA, "International Shipbuilding Aid-Shipbuilding Aid Practices of the Top OECD subsidizing Nations and Their Impacts on U.S. Shipyards," Shipbuilders’ Council of America (SCA), Arlington, VA, 1993.