Methodology Used to Calculate Naval Compensated Gross Tonnage Factors

Abstract

Internationally accepted compensation factors exist for the main commercial ship types, but as yet there are no reliable factors for some unusual ship types or naval vessels. There have been at least two attempts to develop factors for U.S. naval vessels, but at present there is no agreement regarding the validity of the proposed factors. The aim of this paper is to outline the methodology developed to determine compensated gross tonnage (CGT) factors for U.K. naval vessels. This ongoing area of work, instigated and funded by the U.K. Ministry of Defence (MoD) and carried out by First Marine International, has been undertaken in partnership with leading U.K. and European shipbuilders. Three different methods have been used to calculate factors for a Type 23 frigate and an auxiliary oiler replenishment vessel. There was a good correlation between the factors derived by each method, giving the researchers a high degree of confidence in the principal weight-based methodology. The derivation of naval CGT factors and the subsequent analysis will assist MoD to estimate construction budgets, improve acquisition strategies, and quickly assess the implications of changes on unit procurement costs. U.K. naval shipbuilders will benefit from the ability to benchmark themselves against other naval and commercial shipbuilders and assess opportunities for performance improvement. The paper also discusses disparities in productivity between naval and commercial shipbuilders. It puts forward the view that fundamental differences between the two sectors will mean naval shipbuilders will inherently exhibit a lower level of productivity than commercial yards of similar technology.