Trident Submarine Case Study
In the fall of 1971, as President Nixon was attempting to convince The Soviet Union to include submarines and ballistic missiles in the Strategic Arms Limitation Talks (SALT), the US Navy was planning on introducing a new class of submarines called the Trident. The Trident submarines were to succeed the Polaris submarines, which was developed in the 1950s. The Trident submarines were not only physically larger than the Polaris submarines, they also possessed revolutionary propulsion components and weaponry. If the US could successfully launch the Trident program, Nixon felt it would generate progress in SALT by demonstrating the United States’ commitment to strategic submarines and missiles. However, if the Trident program was unable to deliver, Nixon would consider revamping the Polaris class, which could halt the Trident program indefinitely.
In response to Nixon’s focus on the United States’ submarine capabilities, the Navy declared that they could assemble a Trident submarine just as quickly as building a Polaris. These bold claims introduced additional pressure on the people behind the Trident program, as the estimated build time had now been reduced. The updated time frame also shifted the discussion to the type of contract the Navy would use when dealing with contractors on the Trident. Instead of designing the contract to distribute risk equally and promote easy management, the Navy now needed a contract that would guarantee delivery of the first submarine within six years and would include strict controls over the project. The contract discussion quickly turned into a debate between the supporters for cost-reimbursement and fixed price contracts.
A fixed price contract holds the contractor responsible for delivering a product that meets all of the performance specifications for an agreed price. A cost-reimbursement contract means that a contractor attempts to meet the customer’s performance, time, and cost requirements and will be reimbursed for
In response to Nixon’s focus on the United States’ submarine capabilities, the Navy declared that they could assemble a Trident submarine just as quickly as building a Polaris. These bold claims introduced additional pressure on the people behind the Trident program, as the estimated build time had now been reduced. The updated time frame also shifted the discussion to the type of contract the Navy would use when dealing with contractors on the Trident. Instead of designing the contract to distribute risk equally and promote easy management, the Navy now needed a contract that would guarantee delivery of the first submarine within six years and would include strict controls over the project. The contract discussion quickly turned into a debate between the supporters for cost-reimbursement and fixed price contracts.
A fixed price contract holds the contractor responsible for delivering a product that meets all of the performance specifications for an agreed price. A cost-reimbursement contract means that a contractor attempts to meet the customer’s performance, time, and cost requirements and will be reimbursed for