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Report warns of cost overruns on new U.S. aircraft carrier

WASHINGTON (Reuters) - The first Ford-class aircraft carrier being built by Huntington Ingalls Industries Inc may see further cost increases after it is commissioned, according to a congressional report that urged the U.S. Navy to delay a contract for a follow-on ship.

The report by the Government Accountability Office, the investigative arm of Congress, said the Navy should conduct a cost-benefit analysis and study the required capabilities of the second Ford-class carrier before beginning contract negotiations with Huntington Ingalls.

It said the $12.8 billion cost of the first ship, CVN 78, had increased by over 22 percent since construction began in 2008, and further increases were likely due to "uncertainties facing critical technology systems and shipbuilder underperformance."

It said there was a risk to the reliability of key systems that could limit the ship's effectiveness and increase costs to the government.

The GAO said it considered recommending a delay in the ship's November commissioning until after it completed initial operating tests, but decided not to include that recommendation after getting additional feedback from the Pentagon.

Navy spokeswoman Lieutenant Caroline Hutcheson said the Navy remained committed to the Ford-class aircraft carrier, which will provide 25 percent more combat capability than the previous Nimitz-class carriers, a longer service life and lower operating costs.

The Navy, in its response to the report, agreed on the need for some reforms but rejected a recommendation to hold off on a contract award for the aircraft carrier to be built by Huntington Ingalls, saying such a move would add cost.

GAO said the Navy had also argued against a delay in the ship's commissioning that was included in a draft report, noting that the ship would not be designated ready for operations until testing and trials were completed about 34 months after delivery.

One Navy official said the Ford-class carrier was a needed capability, and the Navy was working to incorporate lessons learned from work on the first ship in the class, along with new strategies for building the ship that would significantly reduce the cost of the next ship in the class, CVN 79.

(Reporting by Andrea Shalal-Esa; Editing by Stephen Coates)

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