A member of the House Subcommittee on National Security, the Border, and Foreign Affairs said President Joe Biden’s administration should investigate a U.S. Navy vendor with alleged ties to a Chinese company.
“What I want to know is, are the Chinese weakening our Navy and Coast Guard from within?” Rep. Neal Dunn (R-Fla.) asked during a subcommittee hearing on May 11.
Dunn questioned Rear Adm. Thomas J. Anderson of the U.S. Navy’s Program Executive Office for Ships and Rear Adm. Casey Moton of the Program Executive Office, Unmanned and Small Combatants.
He said that the Mobile, Alabama-based Austal USA had taken a contract from a company in his district even though three of its executives have been indicted by the Department of Justice for fraud and its Australian parent company had close ties with a Chinese shipbuilder.
Dunn has been critical of the company since June 2022, when the U.S. Coast Guard awarded Austal the second phase of a $3 billion contract. The first phase had been completed by Eastern Shipbuilding Group in Panama City, Florida, Dunn said.
According to Dunn, Austal USA had done shoddy work on a contract to build Littoral Combat Ships for the Navy. These are vessels designed to operate in relatively shallow water close to shore.
Then, last March, the Department of Justice announced that three company officers in Mobile had been indicted for defrauding investors. It is not clear if the men are still associated with the company, but their names are not found on the Austal USA website.
Dunn was incredulous that the company had also been awarded a $50 million contract to build command control units for American nuclear submarines even though its parent company, Austal Limited of Australia, had partnered with a Chinese shipbuilder from 2016 to 2021.
“It should alarm everyone that a company like Austal that has won multiple Defense and Homeland Security contracts has such close ties to the CCP. This is a deeply troubling national security threat,” Dunn said.
An Austal USA spokesperson did not return a call seeking comment.
The Navy officers told the subcommittee that the United States needs to bolster its maritime industrial base if it hopes to keep pace with China’s fleet.
“One of the challenges we face in this country is the availability of blue-collar labor,” Anderson said.
According to the admirals, the United States has 296 ships to China’s 390. They said the main reason for the disparity is China’s strong emphasis on commercial shipbuilding. Anderson pointed out that China builds 47 percent of the commercial ships produced yearly. The United States builds just 1 percent.
Rep. Clay Higgins (R-La.) took issue with Anderson’s comparison. He pointed out that China benefits from “slave labor.”
“What exactly do you mean, you wish we had the industrial base in America that they have in China?” Higgins asked. “I believe shipbuilding in America is the strongest in the world.”
Anderson agreed that China did benefit from forced labor. Anderson said his point was that other countries emphasize building their industrial base and have a stronger industrial workforce. He said a more accurate comparison would be South Korea.
“I would point out that America made South Korea,” Higgins responded.
Anderson said the United States has seven major shipyards that focus on shipbuilding. Two of those shipyards, one in Groton, Connecticut, the other in Portsmouth, Virginia, specialize in nuclear ships and submarines. He said the edge America has over other countries is the quality of its ships and the men and women who sail them.
Some committee members said the Navy could benefit from better financial accountability and more efficient operations.
Rep. Paul Gosar (R-Ariz.) said the Navy had failed five consecutive financial audits, more than other offices in the Department of Defense. He said there are 17 priority recommendations from the Government Accountability Office because of those audits that the Navy has yet to address. Gosar said Congress couldn’t help the Navy if the Navy isn’t accountable.
“We can’t do our job without you doing your job,” Gosar said.
As an example, committee members brought up the history of the Zumwalt-class destroyer, DDG 1000.
In 2001, the Zumwalt class was introduced as the next generation of Naval destroyers. It was to be bigger, faster, and more versatile than other ships boasting the latest high-tech weapons and systems. This included a distinctly futuristic hull design. The Navy initially ordered 32 of the ships.
Over the years, the project encountered various problems, including serious cost overruns, Anderson said. He told the committee that the project had to be scaled back because the Navy had tried to cram too much new technology into the ship. The Navy has three Zumwalt-class destroyers with no plans to build more.
“We’ve been very careful to take the lessons from the DDG 1000,” Anderson said.
