Order Code RS21059
Updated October 28, 2004
CRS Report for Congress
Received through the CRS Web
Navy DD(X) Destroyer Program: Background
and Issues for Congress
Ronald O’Rourke
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Summary
The DD(X) is a proposed new type of Navy destroyer. The Navy estimates that the
first DD(X) will cost about $2.8 billion to design and build, including about $1 billion
in detailed design and nonrecurring engineering costs for the class. The issue for
Congress is whether to approve, modify, or reject the Navy’s plan for the DD(X)
program. For a longer discussion of the DD(X), see CRS Report RL32109.1 This report
will be updated as events warrant.
Background
The DD(X) destroyer program was announced by the Navy in November 2001 as
part of a proposed new family of surface combatants that is also to include the small the
Littoral Combat Ship (LCS) and a future cruiser called the CG(X).2 The DD(X) replaced
an earlier destroyer called the DD-21. The DD(X), like the DD-21, is to be a
multimission destroyer with an emphasis on the land-attack mission. Each DD(X) is to
be equipped with two 155-mm (6.1-inch) Advanced Gun Systems (AGSs) for supporting
Marines ashore, not less than 600 shells for those guns, and 80 missile tubes for
Tomahawk cruise missiles and other weapons. The DD(X) is to have a crew of 125 to
175 persons, compared to more than 300 on current Navy destroyers and cruisers. In large
part due to its reduced crew size, the DD(X) is to cost substantially less to operate and
support than the Navy’s current cruisers and destroyers.
The Navy earlier indicated it was planning to procure 24 DD(X)s through FY2017
before shifting to procurement of CG(X)s in FY2018. Recently, however, the Navy
indicated it may accelerate the start of CG(X) procurement to FY2011 and procure no
more than 9 DD(X)s. The FY2005-FY2009 Future Years Defense Plan (FYDP) calls for
1 CRS Report RL32109, Navy DD(X) and LCS Ship Acquisition Programs: Oversight Issues and
Options for Congress, by Ronald O’Rourke.
2 For more on the LCS and CG(X), see CRS Report RL32109, op cit, and CRS Report RS21305,
Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress, by Ronald
O’Rourke.
Congressional Research Service ˜ The Library of Congress

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CRS-2
procuring the first DD(X) in FY2005, another two in FY2007, two more in FY2008, and
three more in FY2009.
The Navy estimates that the first DD(X) will cost about $2.8 billion to design and
build, including about $1.8 billion in hands-on construction costs for the ship and about
$1 billion in detailed design and nonrecurring engineering costs (DD/NRE) for the class.
The Navy proposed funding the first DD(X) through the Navy’s research and
development account rather than the Navy’s ship-procurement account (known formally
as the Shipbuilding and Conversion, Navy, or SCN, account), where Navy combat ships
traditionally have been procured, and have it enter service in FY2011. The Navy
estimates that the fifth and sixth DD(X)s will have an average unit procurement cost of
$1.2 billion to $1.4 billion in FY2002 dollars. The Congressional Budget Office (CBO)
estimates that a class of 24 DD(X)s built at a rate of 2 per year would have an average unit
procurement cost of $1.8 billion in FY2003 dollars. As shown in the table below, the
Navy’s estimated procurement cost equates to a cost per thousand tons (CPTT) of light-
ship displacement (i.e., the empty weight of the ship without fuel) that is 36% to 45% less
than that of today’s DDG-51 destroyers, while CBO’s estimate equates to a CPTT that is
18% less. If the DD(X) CPTT is set equal to that of the DDG-51, the DD(X) would cost
more than $2 billion.
Table 1. Cost Per Thousand Tons (CPTT)
Cost (when
Full load
Light-ship
DD(X) CPTT
Ship
procured at displacement displacement
CPTT
compared to
2 per year)
(tons)
(tons)
DDG-51
DDG-51
$1.25 bil.
~9,000
6,950
~$180 mil.
—
Estimates for DD(X)
Navy
$1.2-1.4 bil.
~14,000
12,135 $99-115 mil. -36% to -45%
CBO
$1.8 bil.
~14,000
12,135
$148 mil.
-18%
CPTT = DDG-51
$2.18 bil.
~14,000
12,135
$180 mil.
equal
Two industry teams competed for the right to become the lead preliminary design
agent for the DD(X) — the “Blue” team, which included General Dynamics’ Bath Iron
Works (GD/BIW) as the shipbuilder, Lockheed Martin as the combat system designer and
integrator, and other companies; and the “Gold” team, which included Northrop
Grumman’s Ship Systems (NGSS) division as the shipbuilder, Raytheon Systems
Company as the combat system integrator, and other companies. On April 29, 2002, the
Navy announced it had selected the Gold team. The Gold team was subsequently
expanded into a DD(X) “national” team that also includes BIW, Lockheed Martin, and
Boeing. The Navy originally anticipated holding another competition for the next phase
in the program, which includes completing the ship’s design and building the first ship.
On March 3, 2004, however, the Navy stated that, to avoid delaying the program, it had
decided to award the contract for the next phase on a sole-source basis to NGSS. The
Navy has also stated that the ship construction contracts will be allocated equally between
NGSS and BIW for the first six ships.

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Table 2. Funding For DD(X) Program, FY2002-FY2009
(millions of then-year dollars)
2002
2003
2004
2005
2006
2007
2008
2009
Total
thru
FY2009
Research, Development, Test & Evaluation, Navy (RDTEN) account
Ship 1 construction
—
—
—
103
288
294
353
269
1307*
DD/NRE
—
—
—
118
349
252
127
87
933*
All other**
490
895
1059
1230
1097
791
439
259
6260*
Total RDTEN***
490
895
1059
1451
1734
1337
919
615
8500*
Shipbuilding and Conversion, Navy (SCN) account
Ship 2
—
—
—
—
49
2004
—
—
2053
Ship 3
—
—
—
—
49
1493
—
—
1542
Ship 4
—
—
—
—
—
49
1729
—
1778
Ship 5
—
—
—
—
—
49
1494
—
1543
Ship 6
—
—
—
—
—
—
49 1695
1744
Ship 7
—
—
—
—
—
—
49 1478
1527
Ship 8
—
—
—
—
—
—
— 1523
1523
Total SCN
0
0
0
0
98
3595
3321 4696
11710
TOTAL
490
895
1059
1451
1832
4932
4240 5311
20210
Source: Navy data provided to CRS by Navy Office of Legislative Affairs, February 20, 2004.
* Additional funding required in FY2010-FY2011 to complete construction of lead ship, and in years
after FY2009 for DD/NRE and all other RDT&E.
** Funding for all RDT&E for the DD(X) program other than DD/NRE.
*** Figures do not include a total of $1,111.4 million in research and development funding provided for
the DD-21/DD(X) program during the period FY1995-FY2001.
Issues for Congress
Procurement Cost and Program Affordability. One potential issue for
Congress concerns the potential procurement cost of follow-on DD(X)s and the resulting
affordability of the DD(X) program. Some observers are concerned about the Navy’s
ability to build DD(X)s at a cost of $1.2 billion to $1.4 billion for the following reasons:
! the Navy’s estimate includes a $200-million range of uncertainty,
suggesting the Navy has an incomplete understanding of potential DD(X)
costs.
! CBO’s estimate ($1.8 billion) is 29% to 50% higher than the Navy’s
estimate, suggesting that there are major analytical differences between
the Navy and CBO regarding the potential cost of the follow-on ships;
! the Navy has not explained in detail why it believes the DD(X) will be
any less expensive on a per-weight basis to build than the DDG-51; and
! the Navy has experienced substantial cost growth in other recent Navy
shipbuilding programs, such as the LPD-17 amphibious ship program and
the Virginia-class submarine program.

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Readiness of New Technologies. Navy officials argue that they have taken
steps to ensure that the several new technologies scheduled for the DD(X) would be ready
for the lead DD(X), including the use of land-based engineering design models (EDMs)
for verifying new technologies and increased levels of development funding. Skeptics are
concerned that in spite of these steps, one or more critical technologies may not be ready
for the lead DD(X). A September 2004 GAO report on the DD(X) program states:
To reduce program risk, the Navy plans to build and test 10 developmental
subsystems, or engineering development models, that comprise DD(X)’s critical
technologies. While using these models represents a structured and disciplined
approach, the program’s schedule does not provide for the engineering development
models to generate sufficient knowledge before key decisions are made. None of the
technologies in the 10 engineering development models was proven to be mature
when system design began, as best practices advocates. Moreover, the Navy does not
plan to demonstrate DD(X) technology maturity and design stability until after the
decision to authorize construction of the lead ship, creating risk that cost, schedule,
and performance objectives will not be met. With many of the tests to demonstrate
technology maturity occurring around the time of critical design review in late fiscal
year 2005, there is the risk that additional time and money will be needed to address
issues discovered in testing.
Some of the technologies are progressing according to the Navy’s plans, while
others have experienced challenges. Four of the 10 engineering development
models... are progressing as planned toward demonstrating complete subsystems.
However, four other models... have encountered some problems. At this point, the
most serious appear to be the schedule delay in the dual band radar resulting from the
Navy’s decision to change one radar type and the additional weight of the integrated
power system. The two remaining engineering development models — the integrated
undersea warfare system and the advanced gun system — are progressing as planned,
but will not culminate in the demonstration of complete subsystems before being
installed on the first ship. While the Navy has fallback technologies for the hull form
and the integrated power system, it does not have such plans for the other eight
engineering development models.3
Naval Surface Fire Support Mission. The size and cost of the DD(X) reflects
in part the presence on the ship of the two AGSs, which in turn reflects a Navy desire to
close a shortfall in naval surface fire support (NSFS) capability that was created in the
early 1990s when the Navy retired its reactivated Iowa-class battleships. DD(X)
supporters could argue that the requirement for additional NSFS capability has been
periodically reviewed and revalidated in recent years, and that the geography of places
like the Korean Peninsula, as well as the ability of Navy ships to remain on station for
months at a time without interruption, are reasons for maintaining a robust Navy NSFS
capability. DD(X) skeptics can argue that NSFS did not play a major role in U.S.
military operations in Kosovo, Afghanistan, and Iraq, and that Afghanistan and Iraq
highlighted new concepts for ground operations using smaller-sized ground units
3 U.S. Government Accountability Office, DEFENSE ACQUISITIONS: Challenges Facing the
DD(X) Destroyer Program, GAO-04-973, Sep. 2004. See also U.S. General Accounting Office,
DEFENSE ACQUISITIONS: Assessments of Major Weapon Programs, GAO-04-248, Mar. 2004,
pp. 45-46.

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supported by aircraft armed with relatively inexpensive, all-weather precision-guided
munitions, raising questions about the priority of NSFS compared to other investments.
Funding Strategy for First Ship. The Navy argues that funding the lead DD(X)
in the Navy’s research and development account will permit the Navy to mitigate
technical risk by permitting the ship’s new technologies to be developed in a more R&D-
like managerial environment, and encourage program managers to allocate funds to
improved production technologies that will help reduce the recurring production costs of
the class. Skeptics could argue the Navy’s plan could permit the Navy to blend
construction funding with traditional research and development funding, obscuring the
construction cost of the lead ship, and also permit the Navy to fund the construction cost
of the ship incrementally, rather than all at once (as normally required by the full funding
policy for defense procurement),4 further obscuring the total construction cost of the ship.
Both these things, skeptics could argue, could weaken congressional oversight of the
program, which depends making total ship construction costs clear and fully visible.
Shipbuilding industrial base. Some observers, particularly those connected
with the surface combatant industrial base, are concerned that the Navy’s plan for
transitioning from DDG-51 procurement to DD(X) procurement will not provide
sufficient work for the industrial base over the next few years, and particularly in FY2006,
when the FYDP provides for the procurement of no large surface combatants. Options
for providing additional work for the industrial base include procuring additional DDG-51
destroyers, accelerating procurement of amphibious ships, and expanding and accelerating
the procurement of new cutters under the Coast Guard’s Deepwater acquisition program.5
Potential Options For Congress. Potential options for Congress for the DD(X)
program, some of which can be combined, include the following:
! approve the DD(X) program as proposed by the Navy;
! shift procurement of the lead DD(X) to the SCN account;
! defer procurement of the lead DD(X) to FY2006 or a later year;
! procure 3 DD(X)s per year to reduce DD(X) unit procurement costs;
! procure DD(X)s at a rate of 1 or 1½ per year to reduce total annual
DD(X) procurement costs, and supplement the industrial base, if needed,
with additional Deepwater cutters;
! procure one or a few DD(X)s as a bridge to an accelerated CG(X), and
supplement the industrial base, if needed, with additional Deepwater
cutters;
! terminate the DD(X) program and instead procure (a) an entirely new
low-cost NSFS ship built strictly around 2 AGSs as a focused means of
providing additional NSFS capability at lower unit procurement cost, or
(b) a new-design frigate designed to capture the DD(X)’s mission
capabilities other than NSFS, or (c) both; and
4 For more on the full funding policy, see CRS Report RL31404, Defense Procurement: Full
Funding Policy — Background, Issues, and Options for Congress, by Ronald O’Rourke.
5 For more on the Deepwater program, see CRS Report RS21019, Coast Guard Deepwater
Program: Background and Issues for Congress, by Ronald O’Rourke.

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! terminate the DD(X) program, procure no larger Navy surface combatant
until the CG(X), and supplement the industrial base with additional
Deepwater cutters.6
Legislative Activity For FY2005
For information on the DD(X) in the FY2005 defense authorization bill (H.R.
4200/S. 2400), see the Legislative Activity section of CRS Report RL32109. The
conference report (H.Rept. 108-622 of July 20, 2004) on the FY2005 defense
appropriations bill (H.R. 4613) provides $350.5 million in advance procurement (AP)
funding in the SCN account for the DD(X) program — $221.1 million for the lead DD(X)
(transferred from the Navy’s research and development account), and $84.4 million for
the second DD(X). The report stated:
The conferees agree to provide a total of $305,516,000 for advance procurement
for the DD(X) class of ships instead of $320,516,000 as proposed by the Senate and
no appropriation as proposed by the House. The conferees direct the Navy to include
future funding requests for the DD(X) in the Shipbuilding and Conversion, Navy
appropriation. Within the funds provided, $221,116,000 is only for design and
advance procurement requirements associated with the first ship of the DD(X) class
and $84,400,000 is only for design and advance procurement requirements associated
with construction of the second ship at an alternative second source shipyard. The
conferees direct that no funds shall be available for the procurement of long lead time
material for items that are dependent upon delivery of a DD(X) key technology unless
that technology has undergone testing, thereby reducing risk to overall program costs.
The conferees direct that full funding of the remaining financial requirement for these
ships, not including traditional advance procurement requirements, shall be included
in a future budget request. (Page 188; see also pages 185 and 187.)
The conference report also provides $1,176.5 million in research and development
funding for the DD(X) program. Accounting for the $221.1 million transferred to the
SCN account, this equates to a $34-million reduction from the request. The report stated:
The conferees agree to provide $1,176,469,000 for the DD(X) program instead
of $1,182,785,000 as proposed by the House and $1,210,469,000 as proposed by the
Senate. The conferees agree that prior to the completion of the Critical Design
Review (CDR), the Navy should complete land-based testing of the Advanced Gun
System (AGS) and the Integrated Power System (IPS). The conferees believe it is not
advisable to complete CDR prior to ensuring that at least two of the 12 key
technologies have completed testing due to historical trends of ship cost growth based
on re-design to accommodate changes in technological requirements. The conferees
direct the Navy to submit a report to the congressional defense committees that
addresses the Navy’s plan to transition DD(X) key technologies through development,
testing, acquisition, and installation. This report should also address “back up”
technologies that could be inserted into the DD(X) program should the maturity of the
planned technology not materialize within a timeline necessary to meet the stated
DD(X) schedule. (Page 310; see also pages 278 and 300)
6 For more on the option of procuring a new-design frigate, see U.S. Congressional Budget
Office, Transforming the Navy’s Surface Combatant Force, Mar. 2003, pp. 27-28, 63.

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