The Advanced SEAL Delivery System based in Hawai'i was supposed to be the first in a fleet of high-tech minisubs that were to cost $80 million apiece, ride attached to a larger attack submarine, and deliver commandos undetected into harbors.

Instead, the Northrop Grumman effort spiraled to more than $885 million, with only one sub built. A November 2008 fire as a minisub's batteries were recharging provided the death knell to the troubled program.

But where others saw embarrassing failure, Brett Phaneuf saw commercial opportunity.

Phaneuf's company, Submergence Group LLC, which builds experimental submarines, thought it could build a better mousetrap, or at least a more economical minisub for Navy use.

"We were told that it couldn't be done and it would cost hundreds of millions of dollars and we thought, 'Well, how hard can it be?' " he said. "So we decided to take a shot at it with our own money to try to see if we could crack it."

Development took two years. The Navy liked what it saw, according to Phaneuf, president of Submergence Group, based in Chester, Conn.

His 25-foot-long S301 mini-sub was moved last fall to Navy SEAL Delivery Vehicle Team One's facility on the Pearl City Peninsula, where the hulk of the much costlier Advanced SEAL Delivery System sub still resides.

Development and production of the S301, capable of transporting two pilots and six divers, cost less than $10 million, Phaneuf said. He emphasized that the minisub is no replacement for the much larger and more complex ASDS, but it shows what's possible.

"Essentially, what it is, is a technology demonstrator, to show that a small submarine could be built ... that would fit inside a dry deck shelter on a host submarine," Phaneuf said.

SHIFTING TO HAWAI'I

The minisub arrived as a demonstration project, but a federal notice posted Feb. 9 signaled the Navy's intent to lease the S301 for use in Hawai'i for up to a year longer.

In the meantime, Submergence Group said that in several weeks it will move another of its subs, a 30-footer called the S201 that can dive to 1,000 feet, to Pearl City.

Enough of Submergence Group's efforts are now being devoted to Hawai'i that Phaneuf closed its operations center in Virginia City, Va., and moved some of the staff to Pearl City Peninsula and will be hiring a few more.

U.S. Special Operations Command at MacDill Air Force Base in Florida said in an e-mail that "knowledge gained from this lease will lower overall risk and program costs of future undersea mobility acquisition programs. Additionally, the S301 is a civilian submersible whose performance will be evaluated in order to determine the most economic and operationally sound way ahead for Naval Special Warfare short-range submersibles."

In the wake of the ASDS problems, Special Operations Command is pursuing development of a Shallow Water Combat Submersible, a SEAL transport vehicle that would be launched from dry deck shelters mounted on larger attack submarines and require the use of scuba gear.

Dry deck shelters are 38-foot removable compartments that allow SEALs access to the watertight module from a submarine via a hatch. Once SEALs are in the vehicle, the shelter is flooded and a hatch is opened, allowing the vehicle to exit while underwater.

One of the reasons for the development of the ASDS minisub was to keep SEALs in a dry environment prior to a mission rather than expose them to the energy-sapping ocean cold for long periods in the SEAL Delivery Vehicle.

BASE AT PEARL

A 2009 federal notice for the development of the replacement Shallow Water Combat Submersible said the vehicle must be capable of transporting SEALs for up to 12 hours while they breathe from scuba gear.

Naval analyst and author Norman Polmar said he thinks the Navy eventually has to again go the minisub route for SEAL insertion.

"I would say yes, because you really want a system that you can put on a submarine, take 2,000 miles, and have it clandestinely launch from the submarine and take four or six guys into a harbor or somewhere," Polmar said.

A new $47 million compound for SEAL Delivery Vehicle Team One was completed in 2004 at Pearl City Peninsula with facilities for the 65-foot-long ASDS sub.

At the time, the facility housed five Mark 8 Mod 1 SEAL Delivery Vehicles and three dry deck shelters, the Navy said.

The Navy has two SEAL Delivery Vehicle teams. Special Operations Command said the Hawai'i unit has about 300 officers, enlisted members and civilians who are a mix of SEALs, combat support sailors and technicians.

Phaneuf said the S301 minisub was built to civilian American Bureau of Shipping standards and not Navy requirements because a civilian research use might be found in the future.

The 13-ton minisub can operate at greater than 600 feet, according to the company, and "lock out," or allow divers to enter the sea while submerged. It is powered by lithium ion batteries.

Because the minisub is made to civilian standards, Submergence Group employees and not Navy divers operate it in tests in Pearl Harbor, Phaneuf said.

The sub also is not used for testing in dry deck shelters on attack submarines, but Phaneuf said the S301 would fit inside, and he's having a dry deck shelter simulator fabricated to do underwater testing with the minisub.

Phaneuf said the S301 testing is an opportunity for the Navy to learn how the commercial sector builds submarines.

"It's a really good partnership because the government didn't have to spend a nickel to get this thing built," he said.