Ran across a statement in gCaptain that the 378s had cost $15M each (haven’t been able to find it again). I went looking for confirmation and found another source that listed the cost as $16-20M. In any case, comparing that range, with the range of costs for the National Security Cutters suggests that the price for these admittedly nicer ships is 30 times that of the ships they are replacing.
I bought my first new car in 1971, about the same time the Coast Guard was buying 378s. It cost me $2004 for a Datsun 510, a then technically advanced, but small economy car. (Upper middle-class performance cars like the GTO were going for about $3,500) Cars in the same economy car market segment now cost seven to ten times what my ’71 cost. In fact if you look hard you can find cars (base models of the Nissan Versa or Hundai Accent) that are better in every way and only cost five times as much.
Using this inflation calculator, inflation based on the CPI from January 1971 to January 2010 was 444.44% meaning, costs are about five and a half times what they were in 1971.
Yes the NSC is better equipped and larger than the 378s, but cars in the same market segments today are also about 25-50% larger, faster, safer, have more gadgets, and even get better gas mileage. My Datsun had bias ply tires, a four speed manual transmission,rubber floor mats instead of carpeting, no power windows, no air conditioning, an AM radio, the glass was not tinted, seat covering material was a sticky vinyl, and not even a rear window defogger.
Cars and ships are not exactly analogous, but it is hard to see how the price has gone up 30 times. The high prices for the NSC are not just a Coast Guard problem. In fact, on a cost per ton basis, the price for the forth NSC, $480M, is lower than that for the Littoral Combat Ships in the recent 20 ship buy that seems to have been viewed as a shewd deal.
Looks like there is plenty of room for efficiency improvements in the shipbuilding industry.
All the fault may not be with the ship builders. The Coast Guard has been working with interested builders in preparation for the Offshore Patrol Cutter project. Hopefully they are talking about how to work the price down to something more reasonable.
Chuck Hill's CG Blog 
Cars are sold in a free market. Customers set the price (to some degree) through their buying activity. Except during bubble periods, Customers tend to not buy when the price clearly exceeds value. These customers also tend to use their own funds to acquire. This is called rational. 🙂
NSCs are sold by a small monopoly to a monopsony making choices based on politics not value and using funds of others. This is called irrational. 🙂
National security is therefore too important to be left in the hands of a rational market.
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On the other hand, the same irrational market applied when we were buying 378s.
I respectfully beg to differ. When the 378s were in acquisition the ship builders, ship building commodity supplier base and the subsystems technology markets had not started the slide into post Cold War consolidation started by Augustine as CEO at Lockheed.
And the third tier vendors hadn’t been driven from the market with the massive government reporting overhead costs that used to only exist at the tier one and two level.
Today’s competitions are more about the fair share allocation of of program scarcity than they are about true competition for best value. The industry has consolidated to the point competition has become impossible — consider the Air Force’s tanker program as a Poster Child.
Take a look at GAO Report B-114851, August 12, 1970. “Opportunity For Coast Guard to Reduce Cost of Vessel Construction.” It gives some numbers. Also a look at the 1966 Cutter Plan.
Also another report 089275, “Utilization of the United States Coast Guard High Endurance Cutter Fleet,” Nov. 20, 1970. Speaks of 30% augmentation of crewing on the 378s.
From the latter report,
“In a December 23, 1969, report to the Secretary of Transportation entitled “Need for Improvements in the Financial Management System of the U.S. Coast Guard (B-115336), we pointed out several weaknesses in the Coast Guard’s financial management system.”
Some things just never change.
I can’t seem to find the reference either but wanted to share an excellent source for shipbuilding stats, Tim Colton’s website: http://shipbuildinghistory.com
In comparison a state of the art drilling rig built in Korea, one like the Deepwater Horizon, costs approximately $600 million (down from about $750M two years ago). Then again Shell inked an initial agreement to build the world’s new largest ships in Samsung’s Korean yard for approx. $5 Billion each! They will be LNG FPSOs.
Thanks, that source does list the 378s as costing $15M each, the 210s as only $3M each and the 270s as ranging from $32.5M to $37.7M. It also has prices listed for the NSCs, but I know those listed for the first three are incorrect–too low.
The same source appears to indicate that the Navy contemporaries of the 378s were notably cheaper in spite of being larger (all the 1052 class DEs listing between 10.7 and $12M). Comparing the FFGs with the 270s they weren’t a whole lot more expensive considering they were much larger and more capable ships, the largest group listed as $49M each.
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