Order Code RL32109
Navy DDG-1000 (DD(X)) and
CG(X) Ship Acquisition Programs:
Oversight Issues and Options for Congress
Updated June 11, 2007
Ronald O’Rourke
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division

Navy DDG-1000 (DD(X)) and CG(X) Ship Acquisition
Programs: Oversight Issues and Options for Congress
Summary
The Navy is procuring a new kind of destroyer called the DDG-1000 (formerly
DD(X)), and wants to procure a new kind of cruiser called the CG(X). Navy plans
call for procuring 7 DDG-1000s and 19 CG(X)s between FY2007 and FY2023. The
first two DDG-1000s were procured in FY2007. The Navy wants to procure the first
CG(X) in FY2011 and the second in FY2013.
The Navy’s FY2008 budget requests $2,802 million in procurement funding to
complete the Navy’s estimated procurement cost for the first two DDG-1000s, which
are being split-funded (i.e., incrementally funded) across FY2007 and FY2008. The
Navy’s combined estimated procurement cost for the two ships is $6,370 million.
The two ships received $1,010 million in FY2005 and FY2006 advance procurement
funding, and $2,557 million in FY2007 procurement funding. The Navy’s FY2008
budget also requests $151 million in advance procurement funding for the third
DDG-1000, whose procurement cost the Navy estimates at $2,563 million.
The DDG-1000/CG(X) program raises several potential oversight issues for
Congress, including the accuracy of Navy cost estimates for the program, the
program’s affordability and cost effectiveness, the acquisition strategy for the third
and subsequent DDG-1000s, and the program’s potential implications for the
shipbuilding industrial base.
Potential options for Congress for the DDG-1000/CG(X) program include
supporting the Navy’s proposed plans or curtailing the DDG-1000 and/or CG(X)
programs and pursuing lower-cost alternatives to the DDG-1000 and/or CG(X)
designs.
The House Armed Services Committee, in its report (H.Rept. 110-146) on the
FY2008 defense authorization bill (H.R. 1585), recommended approval of the
Navy’s request for FY2008 procurement funding for the DDG-1000. The report
recommended increasing the Navy’s FY2008 request for research and development
funding for the DDG-1000 program by $9 million for work on permanent magnet
motor technology.
The Senate Armed Services Committee, in its report (S.Rept. 110-77 of June
5, 2007) on the FY2008 defense authorization bill (S. 1547), recommended approval
of the Navy’s request for FY2008 procurement funding for the DDG-1000. The
report recommended increasing the Navy’s FY2008 request for research and
development funding for the DDG-1000 program by $15 million, of which $9
million would be for work on a permanent magnet motor system and $6 million
would be for work on wireless encryption technology for use on Navy ships.
This report will be updated as events warrant.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Surface Combatants in the Navy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Surface Combatant Force-Structure Goal . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Surface Combatant Industrial Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Future Surface Combatant Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DDG-1000 (formerly DD(X)) Destroyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
CG(X) Cruiser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Oversight Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Accuracy of Navy Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Program Affordability and Cost Effectiveness . . . . . . . . . . . . . . . . . . . . . . 14
Mission Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Contract Strategy and System Integration . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Acquisition Strategy for Third and Subsequent Ships . . . . . . . . . . . . . . . . . 26
Potential Program Implications for Industrial Base . . . . . . . . . . . . . . . . . . . 26
Options for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
DDG-1000 Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
CG(X) Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
CSBA Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
FY2008 Legislative Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
FY2008 Defense Authorization Bill (H.R. 1585) . . . . . . . . . . . . . . . . . . . . 33
Appendix A. CSBA Report on Navy Surface Combatants . . . . . . . . . . . . . . . . . 35
List of Tables
Table 1. Planned DDG-1000 and CG(X) Procurement . . . . . . . . . . . . . . . . . . . . 6
Table 2. DDG-1000/CG(X) Program Funding, FY2002-FY2013 . . . . . . . . . . . . 8
Table 3. Projected Procurement of Cruisers and Destroyers . . . . . . . . . . . . . . . 12
Table 4. Estimated DDG-1000 Unit Procurement Costs . . . . . . . . . . . . . . . . . . 13
Table 5. Views on Maximum Affordable DDG-1000 Cost . . . . . . . . . . . . . . . . 14
Table 6. Follow-ship DDG-51 and DDG-1000 Costs . . . . . . . . . . . . . . . . . . . . . 16
Table 7. Alternative With LPD (AGS) and Smaller Cruiser-Destroyer . . . . . . . 32
Table 8. Alternative With Smaller Cruiser-Destroyer . . . . . . . . . . . . . . . . . . . . 32

Navy DDG-1000 (DD(X)) and
CG(X) Ship Acquisition Programs:
Oversight Issues and Options for Congress
Introduction
The Navy is procuring a new kind of destroyer called the DDG-1000 (formerly
DD(X)), and wants to procure a new kind of cruiser called the CG(X). Navy plans
call for procuring 7 DDG-1000s and 19 CG(X)s between FY2007 and FY2023. The
first two DDG-1000s were procured in FY2007. The Navy wants to procure the first
CG(X) in FY2011 and the second in FY2013.
The Navy’s FY2008 budget requests $2,802 million in procurement funding to
complete the Navy’s estimated procurement cost for the first two DDG-1000s, which
are being split-funded (i.e., incrementally funded) across FY2007 and FY2008. The
Navy’s combined estimated procurement cost for the two ships is $6,370 million.
The two ships received $1,010 million in FY2005 and FY2006 advance procurement
funding, and $2,557 million in FY2007 procurement funding. The Navy’s FY2008
budget also requests $151 million in advance procurement funding for the third
DDG-1000, whose procurement cost the Navy estimates at $2,563 million.
The issue for Congress is whether to approve, modify, or reject the Navy’s
proposals for the DDG-1000/CG(X) program. Decisions that Congress makes on
procurement of surface combatants will significantly affect future Navy capabilities,
Navy funding requirements, and the U.S. defense industrial base.
Background
Surface Combatants in the Navy
A Major Component of the Navy. Surface combatants are one of four
major types of Navy combat ships, along with aircraft carriers, submarines, and
amphibious ships.1 In descending order of size, surface combatants include
battleships, cruisers, destroyers, frigates, corvettes (also called light frigates) and
Littoral Combat Ships (LCSs), and patrol craft. The Navy no longer operates
battleships. The Navy’s surface combatant force in recent decades has consisted
largely of cruisers, destroyers, and frigates. The first LCS is scheduled to enter
service in 2007.
1 The Navy’s fleet also includes mine warfare and support ships.

CRS-2
In recent decades, surface combatants have accounted for 30% to 40% of the
Navy’s battle force ships. At the end of FY2006, they accounted for about 36% (101
of 281 battle force ships).
Roles, Missions, and Capabilities. From World War II until the 1980s,
surface combatants were viewed largely as defensive escorts for protecting other
Navy surface ships and commercial cargo ships. During this period, the primary
missions of surface combatants were anti-air warfare (AAW) and anti-submarine
warfare (ASW), and designs for Navy surface combatant classes were determined in
large part by decisions as to whether a given class should emphasize AAW, ASW,
or both. Additional but more secondary surface combatant missions during this
period included anti-surface warfare (ASuW) and attacking coastal land targets with
guns.
The role of Navy surface combatants changed in the 1980s with the advent of
three major new systems — the Tomahawk cruise missile, the vertical launch system
(VLS), and the Aegis ship combat system. In the eyes of many observers, these three
systems transformed surface combatants from defensive escorts back into significant
offensive combatants.2
The capabilities of Navy surface combatants are currently being enhanced by
new networking systems such as the Cooperative Engagement Capability (CEC) for
air-defense operations. Networking systems like these enable surface combatants,
other ships, and aircraft to share large amounts of targeting-quality data on a rapid
and continuous basis, permitting them to engage in what is called network-centric
warfare (NCW).3
In coming years, surface combatants are scheduled to take on a growing role as
platforms for conducting ballistic missile defense operations.4 The capabilities of
surface combatants will also be enhanced in coming years by increased application
of networking technology and by the addition of unmanned vehicles,5
electromagnetic rail guns, directed-energy weapons such as lasers, and improved
2 The Tomahawk gave surface combatants an ability to attack enemy targets at ranges
comparable to those achievable by carrier-based aircraft. The VLS, which is a battery of
vertical missile-launch tubes countersunk into the ship’s deck, permitted surface combatants
to carry and launch an increased number of Tomahawks (and other missiles). The Aegis
system — an integrated ship combat system that includes the sophisticated SPY-1
multifunction phased-array radar — significantly enhanced the AAW capability of surface
combatants, giving them more potential for conducting operations independent of aircraft
carriers.
3 For more on CEC and naval NCW in general, see CRS Report RS20557, Navy Network-
Centric Warfare Concept: Key Programs and Issues for Congress
, by Ronald O’Rourke.
4 For further discussion, see CRS Report RL33745, Sea-Based Ballistic Missile Defense —
Background and Issues for Congress
, by Ronald O’Rourke.
5 For further discussion, see CRS Report RS20557, Navy Network-Centric Warfare
Concept: Key Programs and Issues for Congress
, by Ronald O’Rourke, and CRS Report
RS21294, Unmanned Vehicles for U.S. Naval Forces: Background and Issues for Congress,
by Ronald O’Rourke.

CRS-3
equipment for detecting and countering mines. Some of these developments are to
be enabled by the application to surface combatants of integrated electric-drive
propulsion technology.6 As these developments unfold, surface combatants will
likely continue to play a significant role in defending both themselves and other
friendly surface ships against enemy submarines, surface ships, aircraft, and anti-ship
cruise missiles.
Service Lives. For planning purposes, the Navy credits its cruisers and
destroyers with 35-year expected service lives (ESLs), its frigates with 30-year ESLs,
and its patrol craft with 20-year ESLs. In practice, however, numerous surface
combatants in recent years have been decommissioned well before the end of their
ESLs for various reasons, including decisions (like the one following the end of the
Cold War) to reduce the size of the Navy, shifts in Navy mission requirements that
made ships with certain capabilities inappropriate, and high operation and support
(O&S) costs that made ships cost-ineffective compared to other approaches for
performing their missions. The Navy in recent years has decommissioned numerous
cruisers, destroyers, and frigates well before the end of their ESLs.
Current Surface Combatant Force. As of the end of FY2006, the Navy’s
force of larger surface combatants consisted of 99 ships in three classes:
! 22 Ticonderoga (CG-47) class cruisers;
! 49 Arleigh Burke (DDG-51) class destroyers; and
! 30 Oliver Hazard Perry (FFG-7) class frigates.
The Navy at the end of FY2006 also operated 8 Cyclone (PC-1) class patrol
craft.
The CG-47s, which have a full load displacement of about 9,500 tons,7 are
equipped with the Aegis system and are commonly referred to as Aegis cruisers. A
total of 27 were procured between FY1978 and FY1988 and entered service between
1983 and 1994. The first five were built to an earlier technical standard — they
lacked VLS, for example, and consequently could fire Tomahawks, while the final
22 are equipped with a 122-tube VLS. The Navy deemed the first five to be too
expensive to modernize and decommissioned in 2004-2005. The Navy plans to
modernize the remaining 22 and keep them in service to age 35.8
6 For more on electric-drive technology and its application to Navy ships, see CRS Report
RL30622, Electric-Drive Propulsion for U.S. Navy Ships: Background and Issues for
Congress
, by Ronald O’Rourke.
7 Full load displacement is the weight of the ship including loads such as fuels and water.
Another measure of ship size is light (i.e., empty) ship displacement, which excludes such
loads. Full load displacement is the more commonly used measure in general discussions
of Navy ships, but light displacement is generally more useful in estimating ship
construction costs.
8 For further discussion, see CRS Report RS22595, Navy Aegis Cruiser and Destroyer
Modernization: Background and Issues for Congress
, by Ronald O’Rourke.

CRS-4
The DDG-51s, which displace about 9,200 tons,9 are equipped with the Aegis
system and are sometimes referred to as Aegis destroyers. They are also equipped
with a 90- or 96-tube VLS. The first ship was procured in FY1985, and 62 were
procured through FY2005. By the end of FY2006, 49 had entered service (the first
in 1991) and the remainder were in various stages of construction. The Navy plans
to give these ships a mid-life modernization and operate them to age 35.10
The FFG-7s, which displace about 4,000 tons, were designed as lower-cost,
lower-capability surface combatants for use in lower-threat environments. They lack
both the Aegis system and VLS. A total of 51 were procured between FY1973 and
FY1984 and entered service between 1977 and 1989. Twenty-one were
decommissioned by the end of FY2006. The Navy plans to decommission several
more over the next decade. Of the 30 FFG-7s in service at the end of FY2006, 9
were operated as Naval Reserve Force (NRF) ships with crews consisting partly of
Navy reservists.
All of these ships have landing pads for operating helicopters, and all but the
first 28 DDG-51s have hangars for embarking and supporting 2 helicopters.
The PC-1s, which displace about 330 tons, are high-speed craft that were built
to support special operations forces. They have also been used by the Navy and
Coast Guard for port-security operations. A total of 13 PC-1s were procured between
FY1990 and FY1996 for the Navy and entered service with the Navy between 1993
and 2000. The lead ship, PC-1, was donated to the Philippine Navy and
commissioned into service with that navy in March 2004. Four other ships in the
class have been loaned to the U.S. Coast Guard. PC-1s in service with the U.S. Navy
are classified as local defense and miscellaneous support forces and consequently are
not included in the total number of battle force ships in the Navy.
Surface Combatant Force-Structure Goal
The Navy in coming years is proposing to maintain a fleet of 313 ships,
including 88 cruisers and destroyers — 7 DDG-1000s, 19 CG(X)s, and 62 DDG-51s
— and 55 LCSs.11 Under this proposal, surface combatants would account for about
46% of the total number of ships in the Navy.
9 This is the figure for the 29th and following ships in the class, which are referred to as the
Flight IIA ships. The first 28 ships in the class, which are referred to as the Flight I and II
ships, were built to a different design that lacked a helicopter hangar and have a full load
displacements of about 8,900 tons. Flight IIA ships have a light ship displacement of about
6,950 tons.
10 For further discussion, see CRS Report RS22595, Navy Aegis Cruiser and Destroyer
Modernization: Background and Issues for Congress
, by Ronald O’Rourke.
11 For more on the proposed 313-ship fleet, see CRS Report RL32665, Navy Force Structure
and Shipbuilding Plans: Background and Issues for Congress
, by Ronald O’Rourke.

CRS-5
Surface Combatant Industrial Base
Construction Yards. All cruisers, destroyers, and frigates procured since
FY1985 have been built at two shipyards — General Dynamics’ Bath Iron Works
(GD/BIW) in Bath, ME, and the Ingalls shipyard in Pascagoula, MS, that forms part
of Northrop Grumman Ship Systems (NGSS).12 Both yards have long histories of
building larger surface combatants. Construction of Navy surface combatants in
recent years has accounted for virtually all of GD/BIW’s ship-construction work and
for a significant share of Ingalls’ ship-construction work.
Overhaul and Repair Yards. Navy surface combatants are overhauled,
repaired, and modernized at GD/BIW, Northrop/Ingalls, other private-sector U.S.
shipyards, and government-operated naval shipyards (NSYs).
System Integrators and Supplier Firms. Lockheed Martin and Raytheon
are generally considered the two leading Navy surface ship radar makers and combat
system integrators. Boeing is another system integrator and maker of Navy surface
ship weapons and equipment. The surface combatant industrial and technological
base also includes hundreds of additional firms that supply materials and
components. The financial health of the supplier firms has been a matter of concern
in recent years, particularly since some of them are the sole sources for what they
make for Navy surface combatants.13
Future Surface Combatant Program
On November 1, 2001, the Navy announced that it was replacing a destroyer-
development effort called the DD-21 program, which it had initiated in 1994-1995,
with a new Future Surface Combatant Program aimed at developing and acquiring
a family of three new classes of surface combatants:
! a destroyer called DD(X) for the precision long-range strike and
naval gunfire mission,
! a cruiser called CG(X) for the missile and air defense mission, and
! a smaller combatant called the Littoral Combat Ship (LCS) to
counter submarines, small surface attack craft (also called “swarm
boats”) and mines in heavily contested littoral (near-shore) areas.
12 NGSS also includes the Avondale shipyard near New Orleans and a third facility at
Gulfport, MS, form Northrop Grumman’s Ship Systems (NGSS) division. The Navy has
not procured any frigates since FY1984, when the last FFG-7 was procured.
13 The surface combatant industrial base also includes naval architects and engineers who
work for shipyards, systems integrators, supplier firms, and independent naval architectural
engineering firms, as well as research and development organizations and laboratories in the
Navy and at shipyards, system integrators, supplier firms, Federally Funded Research and
Development Centers (FFRDCs), and universities and colleges.

CRS-6
On April 7, 2006, the Navy announced that it had redesignated the DD(X)
program as the DDG-1000 program.14
Table 1 shows planned procurement of DDG-1000s and CG(X)s through the
end of the FY2008-FY2013 Future Years Defense Plan (FYDP).
Table 1. Planned DDG-1000 and CG(X) Procurement
FY07
FY08
FY09
FY10
FY11
FY12
FY13
DDG-1000
2a
0a
1
1
1
1
1
CG(X)
1
1
Source: FY2008-FY2013 Future Years Defense Plan (FYDP).
a. Two DDG-1000s procured in FY2007 using split funding across FY2007 and FY2008.
DDG-1000 (formerly DD(X)) Destroyer
The first two DDG-1000s were procured in FY2007. The Navy’s FY2008
budget requests $2,802 million in procurement funding to complete the Navy’s
estimated procurement cost for the first two DDG-1000s, which are being split-
funded (i.e., incrementally funded) across FY2007 and FY2008. The Navy’s
combined estimated procurement cost for the two ships is $6,370 million. The two
ships received $1,010 million in FY2005 and FY2006 advance procurement funding,
and $2,557 million in FY2007 procurement funding. The Navy’s FY2008 budget
also requests $151 million in advance procurement funding for the third DDG-1000,
whose procurement cost the Navy estimates at $2,563 million. Section 123 of the
conference report on the FY2006 defense authorization bill (H.R. 1815/P.L. 109-
163), limits the cost of the fifth DDG-1000 to $2.3 billion, plus adjustments for
inflation and other factors.
The DDG-1000 destroyer is effectively the successor to the Navy’s previously
planned DD-21 destroyer and will resemble the DD-21 in terms of mission
orientation and ship design. The DDG-1000 would be a multimission ship with an
emphasis on land-attack operations that reflects a desire to replace the large-caliber
naval gunfire support capability that the Navy lost in 1990-1992, when it removed
its four reactivated Iowa-class battleships from service.
The DDG-1000 would have a reduced-size crew (compared to the Navy’s
current destroyers and cruisers) of about 142 sailors so as to permit reduced operating
and support (O&S) costs. The ship would incorporate a significant number of new
technologies, including a wave-piercing, tumblehome hull design for reduced
14 The Navy also confirmed in the April 7, 2006, announcement that the first ship in the
class, DDG-1000, is to be named the Zumwalt, in honor of Admiral Elmo R. Zumwalt, the
Chief of Naval operations from 1970 to 1974. The decision to name the first ship after
Zumwalt was made by the Clinton Administration in July 2000, when the program was still
called the DD-21 program. For more on Navy ship names, see CRS Report RS22478, Navy
Ship Names: Background For Congress
, by Ronald O’Rourke.

CRS-7
signatures, a superstructure made partly of large sections of composite materials
rather than steel or aluminum, an integrated electric-drive propulsion system, a total-
ship computing system for moving information about the ship, automation
technologies for the reduced-sized crew, a dual-band radar, a new kind of VLS, and
two copies of a 155mm gun called the Advanced Gun System (AGS).
With a full load displacement of 14,564 tons, the DDG-1000 would be roughly
50% larger than the Navy’s current 9,500-ton Aegis cruisers and destroyers, and
larger than any Navy destroyer or cruiser since the nuclear-powered cruiser Long
Beach (CGN-9), which was procured in FY1957.
The Navy originally envisaged procuring a total of 16 to 24 DDG-1000s. Navy
officials subsequently testified in February and March 2005 that they had a
requirement for 8 to 12. The Navy’s reported new 313-ship plan calls for a total of
seven.
Table 2 shows DDG-1000 (and CG(X)) funding through FY2013.
Since September 30, 2005, the Navy has managed the DDG-1000 program
through a series of separate contracts with major DDG-1000 contractors, including
NGSS, GD/BIW, Raytheon, and BAE Systems (the maker of the AGS). Under this
arrangement, the Navy in effect is acting in at least some respects as the overall
system integrator for the program.
Under an earlier DDG-1000 acquisition strategy approved by the Under
Secretary of Defense for Acquisition, Technology, and Logistics (USD AT&L) on
February 24, 2004, the first DDG-1000 would be built by NGSS, the second would
be built GD/BIW, and contracts for building the first six would be equally divided
between NGSS and GD/BIW.
In February 2005, Navy officials announced that they would seek approval from
USD AT&L to instead hold a one-time, winner-take-all competition between NGSS
and GD/BIW to build all DDG-1000s. On April 20, 2005, the USD AT&L issued
a decision memorandum stating that “at this time, I consider it premature to change
the shipbuilder portion of the acquisition strategy which I approved on February 24,
2004.” The memorandum agreed to a Navy proposal to separate the system-
development and software-development contracts for the DDG-1000 from the
detailed-design effort for the DDG-1000. The memorandum said this change “is
projected to result in savings to the Department [of Defense], and helps to ensure that
all shipbuilder acquisition strategy options are preserved.”
Several Members of Congress expressed opposition to Navy’s proposal for a
winner-take-all competition. Congress included a provision (Section 1019) in the
Emergency Supplemental Appropriations Act for 2005 (H.R. 1268/P.L. 109-13 of
May 11, 2005) prohibiting a winner-take-all competition. The provision effectively
required the participation of at least one additional shipyard in the program but did
not specify the share of the program that is to go to the additional shipyard.

CRS-8
Table 2. DDG-1000/CG(X) Program Funding, FY2002-FY2013
(millions of then-year dollars, rounded to nearest million)
02
03
04
05
06
07
08
09
10
11
12
13
Total
thru
FY13
Research, Development, Test and Evaluation, Navy (RDTEN) account
DDG-1000a
490
895 1002 1120 1041
788
503
426
500
555
320
174
7814
CG(X)b
0
0
0
0
48
15
118
233
380
450
519
529
2292
Subtotal RDTEN
490
895 1002 1120 1089
803
621
659
880
1005
839
703
10106
Shipbuilding and Conversion, Navy (SCN) account
DDG-1000
0
0
0
220
285 1285
1401
0
0
0
0
0
3191


Construction
0
0
0
0
8
825
1401
0
0
0
0
0
2234
DD/NREd
0
0
0
220
277
460
0
0
0
0
0
0
957
DDG-1001
0
0
0
84
421 1272
1401
0
0
0
0
0
3179
Construction
0
0
0
0
8c
839
1401
0
0
0
0
0
2248
DD/NREd
0
0
0
84
413
433
0
0
0
0
0
0
930
DDG-1002
0
0
0
0
0
0
151
2412
0
0
0
0
2563
Construction
0
0
0
0
0
0
151e
2338
0
0
0
0
2489


Plans
0
0
0
0
0
0
0
74
0
0
0
0
74
DDG-1003
0
0
0
0
0
0
0
51
2450
0
0
0
2501
DDG-1004
0
0
0
0
0
0
0
0
51
2215
0
0
2266
DDG-1005
0
0
0
0
0
0
0
0
0
50
2320
0
2370
DDG-1006
0
0
0
0
0
0
0
0
0
0
50
2065
2115
C
G(X) 1
0
0
0
0
0
0
0
0
0
3235
0
0
3235
C
G(X) 2
0
0
0
0
0
0
0
0
0
0
0
3064
3064
Subtotal SCN
0
0
0
0
706 2557
2954
2463
2501
5500
2370
5129
24484
TOTAL
490
0 1002
304 1795 3360
3575
3122
3381
6505
3209
5832
34590
Source: Navy office of Legislative Affairs, March 28, 2007.
a. Figures do not include $1,111.4 million in RDT&E funding provided for DD-21/DD(X) program
in FY1995-FY2001. Figures also do not include funding for Congressional adds in PE 0604300N.
Additional funding required after FY2013.
b. Does not include RDTEN funding for CG(X) radar in PE 0604501N. FY2006 funding includes
$30 million Congressional add.
c. Funding for procurement of long lead time materials (forgings) for AGS.
d. Detail design and non-recurring engineering costs for the class, including NRE costs for mission
systems.
e. Funding for procurement of long lead time materials for AGS, external communications, and land-
based testing.
f. CG(X) Analysis of Alternatives (AOA) is in progress; AOA report expected late in FY2007.
On May 25, 2005, the Navy announced that, in light of Section 1019 of P.L.
109-13, it wanted to shift to the current “dual-lead-ship” acquisition strategy, under
which two DDG-1000s were procured in FY2007, with one to be designed and built
by NGSS and the other by GD/BIW. (As mentioned earlier, each ship is being split-
funded (i.e., incrementally funded) in FY2007 and FY2008.)
Section 125 of the FY2006 defense authorization act (H.R. 1815/P.L. 109-163)
again prohibited the Navy from using a winner-take-all acquisition strategy for
procuring its next-generation destroyer. The provision effectively requires the
participation of at least one additional shipyard in the program but does not specify
the share of the program that is to go to the additional shipyard.

CRS-9
A Defense Acquisition Board (DAB) meeting scheduled for April 29, 2005, to
grant the DDG-1000 “Milestone B” approval to proceed was postponed, reportedly
because of disagreement between the Navy and CAIG over estimated DDG-1000
procurement costs. The meeting was convened on November 10, 2005, but the DAB
did not reach a decision at the meeting. The DAB instead requested more
information about the program.
On November 23, 2005, Kenneth Krieg, the USD AT&L, granted Milestone B
approval for the DDG-1000, permitting the program to enter the System
Development and Demonstration (SDD) phase. Krieg also approved a low rate
initial production quantity of eight ships. (The Navy now wants to build seven.)
Krieg approved the Navy’s proposed dual-lead-ship acquisition strategy. The
November 23, 2005, memorandum from Krieg about his decision states:
On November 10, 2005, I chaired a Defense Acquisition Board (DAB)
review of the Navy’s request for Milestone B approval for the DD(X) program.
Based on that meeting and subsequent discussions held on November 22, 2005,
I approve Milestone B for DD(X) and authorize the program’s entry into the
System Development and Demonstration phase of the acquisition process....
I have also separately approved the DD(X) Acquisition Program Baseline
and Acquisition Strategy Report (ASR). While there are differences between the
OSD Cost Analysis Improvement Group’s cost estimate and the Navy’s cost
estimate, I understand the differences and direct the Navy to fund the program
to its cost estimate. I direct the Navy to submit, for my approval, an
implementation plan for management controls to monitor the major cost estimate
differences by January 31, 2006.
The Navy will return for a DAB Program Review before the Navy exercises
the contract options for construction of the two lead ships. The Navy will
provide an updated ASR and an updated cost assessment prior to this review.
The Navy in 2006 said it planned to review the acquisition strategy for the third
and following ships in the program in late-2006. The Navy has not ruled out the
possibility of using competition to determine who will build these ships.
CG(X) Cruiser
The CG(X) is the Navy’s planned replacement for the CG-47s. The Navy wants
to procure the first CG(X) in FY2011 and the second in FY2013.15 The Navy’s
planned 313-ship fleet calls for a total of 19 CG(X)s. The Navy’s FY2008 30-year
shipbuilding plan calls for procuring the third CG(X) in FY2014, two per year from
FY2015 through FY2021, and the final two CG(X)s in FY2022 and FY2023 (see
Table 3). Table 2 shows CG(X) (and DDG-1000) funding through FY2013.
15 A 30-year shipbuilding plan that the Navy submitted to Congress in May 2003 called for
the first CG(X) to be procured in FY2018. The FY2006-FY2011 FYDP submitted to
Congress in February 2005 accelerated the planned procurement of the lead CG(X) to
FY2011.

CRS-10
The CG-47s are multimission ships with an emphasis on air defense. The Navy
wants the CG(X) to be a multimission ship with an emphasis on air defense and
ballistic missile defense (BMD).16 The Navy plans to equip the CG(X) with a
powerful new radar capable of supporting BMD operations, perhaps more missile-
launch tubes than are on the DDG-1000, and perhaps one 155mm Advanced Gun
System (AGS), or none, as opposed to two AGSs on the DDG-1000.
The Navy is currently assessing CG(X) design options in a study called the
CG(X) Analysis of Alternatives (AOA), known more formally as the Maritime Air
and Missile Defense of Joint Forces (MAMDJF) AOA. The Navy initiated this AOA
in the second quarter of FY2006 and plans to complete it by mid-September 2007.
Navy plans call for Milestone A review of the CG(X) program in the first quarter of
FY2008, preliminary design review (PDR) in the third quarter of FY2010, critical
design review (CDR) in the third quarter of FY2011, and Milestone B review in the
fourth quarter of FY2011.
Although the CG(X) AOA may be examining a wide range of design options for
the CG(X), the Navy has publicly stated that it prefers a CG(X) design based on the
design of its new 14,500-ton DDG-1000 destroyer. The potential for using the
DDG-1000 design for the CG(X) was one of the Navy’s arguments for moving ahead
with the DDG-1000 program. At an April 5, 2006, hearing, a Navy admiral in charge
of shipbuilding programs, when asked what percentage of the CG(X) design would
be common to that of the DDG-1000 (previously called the DD(X)), stated the
following:
[W]e haven’t defined CG(X) in a way to give you a crisp answer to that
question, because there are variations in weapons systems and sensors to go with
that. But we’re operating under the belief that the hull will fundamentally be —
the hull mechanical and electrical piece of CG(X) will be the same, identical as
DD(X). So the infrastructure that supports radar and communications gear into
the integrated deckhouse would be the same fundamental structure and layout.
I believe to accommodate the kinds of technologies CG(X) is thinking about
arraying, you’d probably get 60 to 70 percent of the DD(X) hull and integrated
(inaudible) common between DD(X) and CG(X), with the variation being in that
last 35 percent for weapons and that sort of [thing]....
The big difference [between CG(X) and DDG-1000] will likely [be] the
size of the arrays for the radars; the numbers of communication apertures in the
integrated deckhouse; a little bit of variation in the CIC [Combat Information
Center — in other words, the] command and control center; [and] likely some
variation in how many launchers of missiles you have versus the guns.17
16 For more on the Navy’s role in ballistic missile defense, see CRS Report RL33745,
Sea-Based Ballistic Missile Defense — Background and Issues for Congress, by Ronald
O’Rourke.
17 Source: Transcript of spoken testimony of Rear Admiral Charles Hamilton II, Program
Executive Officer For Ships, Naval Sea Systems Command, before the Projection Forces
Subcommittee of House Armed Services Committee, April 5, 2006. The inaudible comment
may have been a reference to the DDG-1000’s integrated electric-drive propulsion system.
Between the two paragraphs quoted above, the questioner (Representative Gene Taylor)
(continued...)

CRS-11
Depending on its exact features, a CG(X) based on the DDG-1000 hull design
might have a procurement cost roughly equal to that of the DDG-1000, or perhaps
somewhat higher. The procurement cost shown in the FY2007-FY2011 FYDP for
the lead CG(X) (see Table 2) appears consistent with a design that is roughly equal
in cost to, or perhaps somewhat more expensive than, the DDG-1000.
For additional discussion of CG(X) design options, see CRS Report RS22559,
Navy CG(X) Cruiser Design Options: Background and Oversight Issues For
Congress
, by Ronald O’Rourke.
Table 3 shows projected procurement of DDG-1000s, CG(X)s, and DDG(X)s
as shown in the Navy’s FY2008 30-year shipbuilding plan. The DDG(X), not to be
confused with DD(X) (the former name of the DDG-1000), is the Navy’s long-term
notional projected replacement for today’s DDG-51 Aegis destroyers.
17 (...continued)
asked: “So the big difference [between CG(X) and DDG-1000] will be what?”

CRS-12
Table 3. Projected Procurement of Cruisers and Destroyers
FY
DDG-1000
CG(X)
DDG(X)b
07
2a
08
0a
09
1
10
1
11
1
1
12
1
13
1
1
14
1
15
2
16
2
17
2
18
2
19
2
20
2
21
2
22
1
1
23
1
24
2
25
3
26
3
27
3
28
3
29
3
30
3
31
3
32
3
33
3
34
3
35
3
36
3
37
3
Source: U.S. Department of the Navy, Draft Report to Congress on Annual Long-Range Plan for
Construction of Naval Vessels for FY 2008
.
a. Each of the two DDG-1000s procured in FY2007 is being split-funded (i.e., incrementally funded)
across FY2007 and FY2008.
b. The DDG(X), not to be confused with DD(X) (the former name of the DDG-1000), is the Navy’s
projected long-term notional replacement for the Navy’s existing DDG-51s.

CRS-13
Oversight Issues for Congress
Accuracy of Navy Cost Estimates
Although the Navy substantially increased estimated DDG-1000 procurement
costs between 2004 and 2005, some observers believe the Navy’s estimates are still
too low. The Cost Analysis Improvement Group (CAIG) within the Office of the
Secretary of Defense (OSD) reportedly believed in 2005 that DDG-1000 procurement
costs may be 20% to 33% higher than the Navy’s estimates.18 A Congressional
Budget Office (CBO) official stated in 2005 that the CAIG’s estimate for the lead
ship might be $4.1 billion, while its estimate for the fifth ship might be $3.0 billion.19
CBO itself estimated in 2005 that the lead ship may cost as much as $4.7 billion, and
that the fifth ship may cost $3.4 billion.20 Table 4 summarizes these estimates.
Table 4. Estimated DDG-1000 Unit Procurement Costs
(billions of dollars)
Navy estimate
Reported CAIG
CBO estimate in
estimate in 2005
2005
Lead ship
$3.2
$4.1
$4.7
Fifth ship
$2.3
$3.0
$3.4
Source: U.S. Navy data and July 20, 2005 CBO testimony before Projection Forces Subcommittee
of House Armed Services Committee. The CAIG figures shown are from the CBO testimony, which
CBO stated are according to an unconfirmed report about the CAIG estimates.
CBO has also questioned the accuracy of the Navy’s estimate of the annual
operating and support (O&S) cost of a DDG-1000 compared to that of a DDG-51.
The Navy estimates that over a 35-year life cycle, a DDG-1000 would cost an
average of about $12 million or $13 million less per year to operate and support than
a DDG-51. CBO estimated in 2005 that the reduction in O&S costs for a DDG-1000
relative to a DDG-51 might range from zero to $10 million per year.21
18 Tony Capaccio, “Destroyer May Cost 33% More Than Navy Budgeted, Pentagon Says,”
Bloomberg.net, May 4, 2005; Christopher P. Cavas, “Rising Costs of DD(X) Threaten U.S.
Fleet Plans,” DefenseNews.com, May 2, 2005; Christopher J. Castelli, “Pentagon Postpones
DD(X) DAB Meeting To Resolve Cost Estimates,” Inside the Navy, May 2, 2005.
19 Spoken testimony (transcript of hearing) of J. Michael Gilmore, Assistant Director for
National Security, Congressional Budget Office, at a July 20, 2005, hearing on the DDG-
1000 program before the Projection Forces Subcommittee of the Hose Armed Services
Committee. Gilmore said these figures are from an unconfirmed report about the CAIG
estimates.
20 Ibid.
21 Statement of J. Michael Gilmore, Assistant Director for National Security, Congressional
Budget Office, [on] The Navy’s DD(X) Destroyer Program, in U.S. Congress, House
Committee on Armed Services, Subcommittee on Projection Forces, July 19, 2005, p. 5.

CRS-14
Program Affordability and Cost Effectiveness
Procurement Cost Affordability. At the end of a July 19, 2005, hearing on
the DDG-1000 program before the Projection Forces Subcommittee of the House
Armed Services Committee, DOD and Navy witnesses were asked to provide the
subcommittee with their own individual views on the procurement cost figures at
which the lead DDG-1000 and a follow-on DDG-1000 (defined as the fifth ship)
would become unaffordable. At the beginning of part two of the hearing, which was
held on July 20, the chairman of the subcommittee, Representative Roscoe Bartlett,
stated that the figures provided by the witnesses ranged from $4 billion to $4.5
billion for the lead ship and $2.5 billion to $2.9 billion for the fifth ship. As shown
in Table 5, the 2005 CAIG and CBO estimates discussed earlier are at or above these
figures.
Table 5. Views on Maximum Affordable DDG-1000 Cost
(billions of dollars)
DOD/Navy 2005
views on
Reported CAIG CBO estimate in
Navy estimate
maximum
estimate in 2005
2005
affordable cost
Lead ship
$3.2
$4.0-$4.5
$4.1
$4.7
Fifth ship
$2.3
$2.5-$2.9
$3.0
$3.4
Source: U.S. Navy data and transcript of July 20, 2005, hearing before Projection Forces
Subcommittee of House Armed Services Committee. See also the source note for the previous table.
The Navy argues that the DDG-1000 is affordable in terms of procurement cost
because it is confident in its DDG-1000 procurement cost estimates, which are much
less than the maximum-affordable procurement cost figures in Table 5. Skeptics
could argue that the DDG-1000 is not affordable in terms of procurement cost
because the 2005 CAIG and CBO procurement cost estimates for the ship are at or
above the maximum-affordable figures in Table 5. They could also argue that the
Navy’s decision to reduce the planned DDG-1000 procurement from an originally
envisaged total of 16 to 24 ships to the currently planned total of 7 ships, and the
projected long-term shortfall in cruisers and destroyers (see discussion below), are
evidence that, in terms of procurement cost, the DDG-1000 is not affordable in the
numbers the Navy needs.
Total Life-Cycle Cost Affordability. The Navy argues that, in terms of total
life-cycle cost (i.e., procurement plus lifetime O&S cost), the DDG-1000 is more
affordable than might appear from looking only at procurement cost, because the ship
will have lower lifetime O&S costs than existing Navy cruisers and destroyers. As
mentioned above, the Navy estimates that over a 35-year life cycle, a DDG-1000
would cost an average of about $12 million or $13 million less per year to operate
and support than a DDG-51. Over a 35-year life, this equates to a savings of $420
million to $455 million in O&S costs relative to a DDG-51. On this basis, the Navy
argues that a force of 10 DDG-51s would have a total 35-year O&S cost $4.2 billion
to $4.5 billion less than that of force of 10 DDG-51s.

CRS-15
Skeptics could argue that reducing a ship’s future O&S costs, though desirable,
does not make that ship any more affordable to procure in the budget that funds its
procurement. Skeptics could also argue that, in terms of total life-cycle cost, the
DDG-1000 is not as affordable as the Navy argues, for the following reasons:
! The Navy’s estimated 35-year O&S savings of $420 million to $450
million only partially offsets difference between the DDG-1000’s
higher procurement cost and the procurement cost of a DDG-51
when DDG-51s are procured at a rate of two per year.
! Office of Management and Budget (OMB) Circular A-9422 and
standard business procedures call for future funding flows to be
calculated on a present-value basis so as to capture the investment
value of money over time. When calculated on this basis, the single-
ship 35-year savings figure is reduced by about 46%, to $226 million
to $242 million, and the 10-ship 35-year savings figure of $4.5 billion
(assuming procurement of one ship per year) is reduced by about 53%,
to about $2.1 billion.23
! The above calculations accept the Navy’s estimate that a DDG-1000
would, on a 35-year basis, have an annual O&S cost $12 million to
$13 million less than that of a DDG-51. As mentioned above, CBO
has questioned the accuracy of the Navy’s estimate of relative DDG-
1000 and DDG-51 O&S costs, and has estimated that the difference
might range from zero to $10 million per year.
Table 6 compares follow-ship DDG-51 and DDG-1000 total procurement and
life-cycle O&S costs using figures from the discussion above. The table uses
constant FY2007 dollars, which results in some adjustments to the above figures. As
can be seen in the table, on a present-value basis, the combined procurement and 35-
year life-cycle O&S cost of the follow-on DDG-1000 is 16% greater than that of the
DDG-51 using the Navy’s estimates, or 91% to 101% greater using CBO’s estimates.
22 U.S. Office of Management and Budget, Circular A-94, Guidelines And Discount Rates
For Benefit-Cost Analysis of Federal Programs
, available at [http://www.whitehouse.
gov/omb/circulars/a094/a094.pdf].
23 CRS calculations using the 3.1% real discount rate set forth in Appendix C (Revised
January 2005) for discounting constant-dollar flows of 30 years or more.

CRS-16
Table 6. Follow-ship DDG-51 and DDG-1000 Costs
(millions of constant FY2007 dollars)
Constant FY2007 dollars
Present-value calculation
35-year
35-year
Procure-
lifecycle
Procure-
lifecycle
ment cost O&S cost Total
ment cost
O&S cost
Total
Navy Estimate
Follow-on DDG-51
1,393
2,115
3,508
1,393
1,133
2,526
Follow-on DDG-1000
2,058
1,627
3,685
2,058
871
2,929
DDG-1000 less DDG
665
(488)
177
665
(262)
403
DDG-1000 as %
148%
77%
105%
148%
77%
116%
DDG-51
CBO Estimate (with $10-million annual DDG-1000 O&S cost savings vs. DDG-51)
Follow-on DDG-51
1,393
1,120
2,513
1,393
600
1,993
Follow-on DDG-1000
3,400
770
4,170
3,400
412
3,812
DDG-1000 less DDG
2,007
(350)
1,657
2,007
(188)
1,819
DDG-1000 as %
244%
69%
166%
244%
69%
191%
DDG-51
CBO Estimate (with zero annual DDG-1000 O&S cost savings vs. DDG-51)
Follow-on DDG-51
1,393
1,120
2,513
1,393
600
1,993
Follow-on DDG-1000
3,400
1,120
4,520
3,400
600
4,000
DDG-1000 less DDG
2,007
0
2,007
2,007
0
2,007
DDG-1000 as %
244%
100%
180%
244%
100%
201%
DDG-51
Source: CRS calculations based on Navy and CBO DDG-1000 and DDG-51 cost data and a 3.1%
real discount rate, as specified in Appendix C to OMB Circular A-94 for discounting constant-dollar
flows of 30 years or more. DDG-51 procurement cost is an average unit cost based on a two-per-year
procurement. (For a three-per-year procurement rate, the average unit procurement cost would be
$1,251 million.)
Cost Effectiveness. The Navy argues that the DDG-1000 would be cost
effective because the higher procurement cost of the DDG-1000 compared to
previous Navy surface combatants would be more than offset by the DDG-1000’s
numerous and significant improved capabilities.24 Skeptics could argue that these
24 The Navy states that, compared to the DDG-51, these capability improvements include,
among other things:
— three-fold improvement in capability against anti-ship cruise missiles, including
significantly better radar performance in situations involving near-land radar clutter;
— a 10-fold improvement in overall battle force defense capability, in part because
of a 5-fold improvement in networking bandwidth capacity;
— 15% more capability to defend against group attacks by enemy surface craft (i.e.,
“swarm boats”);

a 50-fold improvement (i.e., reduction) in radar cross-section, which dramatically
enhances survivability and reduces by half the total number of missiles that need to be fired
in an intercept engagement;
— a 10-fold increase in operating area against mines in shallow-water regions;
(continued...)

CRS-17
capability improvements, though significant, are not worth the ship’s cost,
particularly if that cost is closer to the CAIG or CBO estimates than to the Navy’s
estimates, and that if the DDG-1000’s most-needed contribution to fleet capabilities
is the naval surface fire support capability provided by the ship’s two AGSs, then the
DDG-1000 represents a very expensive way to add this capability to the fleet.
Mission Requirements
The DDG-1000’s size and procurement cost do not appear to have been driven
by any one technology or payload element, but rather by the ship’s total collection of
payload elements, which reflect requirements to perform various missions. These
payload elements include, among other things:
! more gunfire capability than any cruiser the Navy has built since
World War II;
! a vertical launch system (VLS) whose weapon storage volume and
weapon weight capacity are between that of the DDG-51 and Aegis
cruiser designs;25
24 (...continued)
— 3 times as much naval surface fire support capability, including an ability to
answer 90% of Marine Corps calls for fire within 5 minutes, permitting the ship to meet
stated Marine Corps firepower requirements — a capability otherwise unavailable in the
surface fleet — giving the ship a capability roughly equivalent to one-half of an artillery
battalion, and permitting a 65% reduction in Marine Corps artillery;
— a ship design that allows underway replenishment of gun shells, creating the
equivalent of an almost-infinite ammunition magazine and permitting nearly continuous fire
support;
— about 10 times as much electrical capacity available for ship equipment, giving
the ship an ability to support future electromagnetic rail guns and high-energy laser
weapons; and
— features such as an automated fire-suppression system, peripheral vertical launch
system, and integrated fight-through-damage power system that significantly increase ship
survivability.
(Source: Points taken from Statement of Admiral Vern Clark, U.S. Navy, Chief
of Naval Operations, Before The House Armed Services Committee Projection
Forces Subcommittee, July 19th, 2005, and Statement of The Honorable John J.
Young, Jr., Assistant Secretary of the Navy (Research, Development and
Acquisition), and RADM Charles S. Hamilton, II, Program Executive Officer For
Ships, Before the Projection Forces Subcommittee of the House Armed Services
Committee on DD(X) Shipbuilding Program, July 19, 2005.)
25 Although the DDG-1000 has 80 VLS cells, compared to 96 on the DDG-51 and 122 on
the Aegis cruiser, the DDG-1000’s VLS cells are larger. The Mk 41 VLS cells on DDG-51s
and Aegis cruisers can fire a missile up to 21 inches in diameter, 21 feet in length, and about
3,000 pounds in weight. The Advanced VLS (AVLS) cells on the DDG-1000 can fire a
missile up to 24 inches in diameter, 22 feet in length, and about 4,000 pounds in weight.

CRS-18
! an area-defense anti-air warfare (AAW) capability that in some
respects is greater than that of the DDG-51;26
! sonars and other antisubmarine warfare (ASW) systems that are
roughly equivalent to that of the DDG-51;27
! command facilities for a flag-level officer and his command staff
— a feature that previously has been installed on cruisers but not
destroyers;
! a large helicopter flight deck and a hangar and maintenance facilities
for two helicopters or one helicopter and three UAVs;
! additional berthing, equipment-stowage space, and mission-planning
space for a platoon of 20 special operations forces (SOF) personnel;
and
! facilities for embarking and operating two 11-meter boats and four
rubber raiding craft (as opposed to two 7-meter boats on the DDG-
51).
The payload elements of the DDG-1000 design reflect an Operational
Requirements Document (ORD) for the DDG-1000 that was approved by the Joint
Staff of DOD in February 2004. Key performance parameters included in this
document include having two AGSs that can each fire 10 rounds per minute, for a
total of 20 rounds per minute.28 DOD states that
During the restructuring of the DD-21 program into the DD(X) program, the
Navy re-evaluated each DD-21 Key Performance Parameter (KPP) to determine
the potential for minimizing the size of the ship and ultimately the cost. The
Navy made many adjustments and the resulting DD(X) KPPs represent the
Navy’s minimum requirements. No other known alternative meets all of the
26 The Navy states that radars on the DDG-1000 and DDG-51 are roughly equivalent in
terms of dB gain (sensitivity) and target resolution, that the firm track range of the DDG-
1000’s dual-band radar — the range at which it can maintain firm tracks on targets — is
25% greater for most target types than the firm track range of the DDG-51’s SPY-1 radar,
that the DDG-1000’s radar has much more capability for resisting enemy electronic
countermeasures and for detecting targets amidst littoral clutter, that the DDG-1000’s AAW
combat system would be able to maintain 10 times as many tracks as the DDG-51’s Aegis
system, and that the two ships can support roughly equal numbers of simultaneous AAW
engagements. Given the features of the DDG-1000’s AAW system, plus its much-greater
C4I/networking bandwidth, the Navy has stated that replacing a DDG-51 with a DDG-1000
in a carrier strike group would increase the strike group’s AAW capability by about 20%.
27 The Navy states that due to differences in their sonar designs, the DDG-1000 would have
more littoral-water ASW capability, while the DDG-51 would have more blue-water ASW
capability.
28 Statement by The Honorable Kenneth J. Krieg, Under Secretary of Defense (Acquisition,
Technology and Logistics), Before the Subcommittee on Projection Forces, House Armed
Services Committee, United States House of Representatives, July, 19, 2005, p. 2.

CRS-19
DD(X) KPPs and provide the sustained, precision, long-range naval surface fire
support that the United States Marine Corps requires.29
Skeptics could argue that, notwithstanding the February 2004 DDG-1000 ORD,
at least some requirements for the DDG-1000 are not clear. A November 2006 GAO
reported states:
In December 2005, more than a decade after the Navy and Marine Corps began
to formulate requirements, agreement was reached on the capabilities needed for
naval surface fire support. However, quantifiable measures are still lacking for
volume of fire — the delivery of a large quantity of munitions simultaneously or
over a period of time to suppress or destroy a target. Until further quantifiable
requirements are set for volume of fire, it is difficult to assess whether additional
investment is necessary or the form it should take.30
Skeptics could argue that with estimated DDG-1000 procurement costs now
much higher than they were in February 2004, and in light of the effect that increased
cost appears to have had in reducing planned DDG-1000 procurement, the February
2004 ORD might not reflect a sufficiently up-to-date consideration of how increasing
DDG-1000 capability (and therefore cost) might reduce DDG-1000 numbers and
therefore reduce the collective capability of the total DDG-1000 force. In light of the
reduction in planned DDG-1000 procurement, skeptics could argue, certain
capabilities that might have been viewed as desirable in February 2004 might now
be viewed as less desirable because of their role in increasing DDG-1000 unit cost
and thereby reducing planned DDG-1000 procurement.
Some observers speculate that the Navy and DOD established requirements for
the DDG-1000 without a full appreciation of how large and expensive a ship design
the requirements would generate. Naval analyst Norman Friedman, the author of
numerous books on U.S. warship designs, states in a 2004 book on U.S. destroyer
designs that
In past [Navy ship design] practice, the naval policymakers in OpNav [the
Office of the Chief of Naval Operations] would write a draft set of [ship]
characteristics.... The Preliminary Design branch of BuShips [the Bureau of
Ships] or NAVSEA [the Naval Sea Systems Command] would develop sketch
designs to meet the requirements. Often the OpNav policymakers would find the
results outrageous — for example, exorbitantly expensive. Such results would
force them to decide just how important their various requests had been.
Eventually Preliminary Design would produce something OpNav found
acceptable, but that might not actually be built....
In contrast to past practice, no preliminary design [for the DDG-1000] was drawn
up to test the cost of various requirements. Each requirement was justified in
operational terms, (e.g., a level of stealth that would reduce detectability by some
percentage); but those sponsoring the ship had no way of knowing the impact
that a particular combination of such requirements would have. Normally
29 Ibid, pp. 6-7.
30 Government Accountability Office, Defense Acquisitions[:] Challenges Remain in
Developing Capabilities for Naval Surface Fire Support
, GAO-07-115, November 30, 2006.

CRS-20
NAVSEA would have created a series of sketch designs for exactly that
purpose.31
An August 2005 trade press article suggests that growth in DD-21/DDG-1000
requirements (and cost) over time may have been related to the disestablishment of
a Navy ship-design board called the Ship Characteristics Improvement Board (SCIB)
— an entity that the new Chief of Naval Operations, Admiral Michael Mullen, who
became CNO on July 22, 2005, has reestablished under a new name:
Adm. Michael Mullen, the chief of naval operations, has directed the Navy
to re-establish a high-level panel to closely monitor and control the requirements
and configurations of new ships in a bid to rein in the skyrocketing cost of new
vessel procurement.
Adm. Robert Willard, vice chief of naval operations, is leading the effort
as part of a larger undertaking to draw up alternative options for the Navy’s
current shipbuilding program....
In essence, sources said, Mullen is looking to reconstitute the Ship
Characteristics Improvement Board, which eventually became inactive in 2002.
For more than 100 years, the Navy has maintained a high-level group of officials
to advise service leaders on ship design and configuration. This group,
established in 1900 as the General Board has gone through many name changes,
including the Ship Characteristics and Improvement Board in the early 1980s
and, until 2002, the Ship Characteristics and Improvement Panel.
Navy officials say that the panel’s oversight began to wane in the late
1990s, just as the DD-21 program — originally envisioned as a $750 million
replacement for Spruance-class destroyers — took off, before becoming
officially inactive in 2002. Requirements during this time were added to the new
destroyer program, some of which raised eyebrows in the Navy, such as the need
for a flag officer quarters. No other ship in that class has accommodations for
an admiral. Still, the DDG-1000 has come to be regarded as a technology carrier
for future surface ships and the price tag has ballooned to $3 billion a copy.
Mullen’s goal, spelled out in a July 25 memo to Willard and provided to
InsideDefense.com, is to put in place a “process that adequately defines warship
requirements and manages changes to those requirements (e.g. Ship
Characteristics Improvement Board) in a disciplined manner, with cost and
configuration control as the paramount considerations.”...
A recent RAND study conducted at the request of Mullen’s predecessor,
retired Adm. Vern Clark, concluded that a key cause for climbing ship costs is
the number of requirements tacked on to a program, according to a consultant
familiar with the findings of the study, which has not been made public.
“So, what I think Mullen has in the back of his head is, ‘I’ve got to get the
requirements process for ships back under control or we’re always going to end
31 Norman Friedman, U.S. Destroyers, An Illustrated Design History, Revised Edition.
Annapolis, Naval Institute Press, 2004, pp. 437 and 447-448. Punctuation as in the original.

CRS-21
up, every time we talk about a new destroyer, with a $3 billion ship,’” said a
former senior Navy official.
This senior official, who was in a key Pentagon position as the DD-21
program commenced, said that without a panel overseeing the ship’s
configuration and true requirements the new destroyer program became weighed
down with capabilities that carried a high price tag.
“In hindsight, we realized that we had put requirements on the ship that no
one had really vetted for its cost impact on the ship. For example, it was to
operate acoustically silent and risk free in minefields,” said the official. “If the
SCIB had existed, this probably would not have happened.”32
A March 2007 report from the Center for Strategic and Budgetary Assessments
(CSBA) makes a similar point:
For nearly a century, the Navy’s SCIB — a group of high-ranking DoN
{department of the Navy] officials — worked to balance desired warship
warfighting requirements against their impact on a ship’s final design and
production costs. The primary reason why the Navy lost cost control over the
DD-21/DD(X)/DDG-1000 was that just as the ship entered its design definition
phase, the power of the Navy’s SCIB was waning, replaced by a Joint
requirements definition process with no fiscal checks and balances.33
Some observers, such as Norman Friedman, have raised questions about the
Navy’s decision to use a tumblehome (i.e., inward-sloping) hull for the DDG-1000.
A 2006 magazine article by Friedman, for example,
! raises questions about the implications of a tumblehome hull for the
ship’s ability to deal with underwater damage;34
! asks whether the Navy knew at the outset of the DDG-1000 design
process how much a decision to incorporate a tumblehome hull (and
other survivability features) would increase the size of the ship; and
! questions whether the reduced visibility of the tumblehome hull to
certain types of radars — the central reason for using a tumblehome
hull — will be negated by its visibility to high-frequency (HF)
surface wave radars that are now for sale on the international market.
The article, which refers to the DDG-1000 by the previous designation DD(X), states:
32 Jason Sherman, “Mullen To Bring Back Panel To Control Ship Configuration, Cost,”
Inside the Navy, August 8, 2005.
33 Robert Work, Know When To Hold ‘Em, Know When To Fold ‘Em: Thinking About Navy
Plans For The Future Surface Battle Line
, Washington, Center For Strategic and Budgetary
Assessments, 2007. p. 6. (CSBA Backgrounder, March 7, 2007).
34 Other observers have also expressed concerns about the stability of the DDG-1000’s
tumblehome hull in certain see conditions. For a discussion, see Christopher P. Cavas, “Is
New U.S. Destroyer Unstable?,” DefenseNews.com, April 2, 2007.

CRS-22
In the case of the DD(X), the overriding requirement [in determining the
hull design] was to minimise radar cross section — stealth. Much of the hull
design was dictated by the attempt to reflect radar pulses away from the radar
emitting them, so that radar returns would be minimised. By now the main
technique is well known: slope all flat surfaces and eliminate the corner reflector
created by the juncture of the hull and water....
If the ship could be stabilized sufficiently [against rolling from side to side], then
she would never (or almost never) present any vertical surfaces [to a radar]. In
the case of DD(X), stabilization is apparently achieved using ballast tanks. Such
tanks in turn demand internal volume deep in the ship. Overall, stealth demands
that as much as possible of the overall volume of the ship be buried in her hull,
where the shape of the ship can minimise radar returns. That is why,
paradoxically, a carefully-designed stealthy ship will be considerably larger —
for more internal volume — than a less stealthy and more conventional
equivalent. In the case of DD(X), there were also demands for improved
survivability. The demand for stealth implied that anti-ship missiles were the
most important envisaged threat. They hit above water, so an important
survivability feature would be to put as much of the ship’s vitals as possible
below water — which meant greater demands for underwater volume....
Once the tumblehome hull had been chosen, [the ship’s designers] were
apparently also constrained to slope the bow back [creating a surface-piercing or
ram bow] instead of, as is usual, forward....
There were numerous reasons why [past] naval architects abandoned
tumblehome hulls and ram bows. Tumblehome reduces a ship’s ability to deal
with underwater damage. When a conventional flared (outward-sloping) hull
sinks deeper in the water, its waterplane area [the cross-section of the ship where
it intersects the plane of the water] increases. It becomes somewhat more stable,
and it takes more water to sink it deeper into the water. Because the waterplane
area of a tumblehome ship decreases as it draws more water, such a ship is easier
to sink deeper. Tumblehome also apparently makes a ship less stable, and hence
less capable of resisting extreme weather conditions. The larger the ship, the
more extreme the weather has to be to make that critical. Critics of DD(X) have
concentrated on the danger; defenders have concentrated on how extreme the
critical weather condition would be.
In the end, whether the DD(X) hull form is attractive depends on an
evaluation of anti-radar stealth as a design driver. About a decade ago, the
DD(X) design concept was sold on the basis of a lengthy (and, incidentally,
unclassified) analysis, the gist of which was that a heavily-armed surface
combatant could play a decisive role in a Korean scenario...
The key analytic point... was that it would be very important for the ship to
come reasonably close to enemy shores unobserved. That in turn meant anti-
radar stealth. However, it soon came to mean a particular kind of anti-radar
performance, against centimetric-wave radars [radars with wavelengths on the
order of centimeters] of the sort used by patrol aircraft (the ship would fire [its
weapons] from beyond the usual horizons of shore-based radars). As it happens,
anti-ship missiles use much the same kinds of radars as patrolling aircraft, so it
could be argued that the same anti-radar techniques would be effective in the
end-game in which missiles would approach the ship....

CRS-23
Without access to files of the time, it is impossible to say whether those
approving the [DDG-1000] project realised that its stealth and survivability
characteristics would produce a 14,000 to 17,000 ton destroyer. About the same
time that DD(X) characteristics (requirements) were being approved, the decision
was taken at [the] Defense Department (not Navy) level that there would be no
internal feasibility design. In the past, the feasibility stage had the very useful
role of showing those setting requirements what their implications would be. At
the very least, the Navy’s senior leadership would have been given warning that
they would have to justify a drastic jump in destroyer size when they wanted to
build DD(X). That jump might well have been considered justified, but on the
other hand the leadership might also have asked whether a somewhat less
dramatic approach would have been acceptable.
About a decade after the requirements were chosen, with DD(X) well
advanced, the situation with regard to stealth may be changing. Shaping is
relevant only at relatively short [radar] wavelengths. For about a quarter-century,
there has been talk of HF surface wave radars, which operate at wavelengths of
about 10 to 200 meters — i.e. at wavelengths the size of a ship. Canada currently
operates this type of radar, made by Raytheon, for surveillance of the Grand
Banks; another is being tested in the Caribbean. Australia has bought this kind
of radar to fill gaps in over-the-horizon radar coverage. Turkey is buying such
radars for sale for some years. In 2005 it was reported unofficially that China
had bought [a] Russian HF surface wave radar the previous year.
It seems almost certain that HF surface wave radar can defeat any kind of
stealth shaping designed primarily to deal with shorter-wave[length] radars.
Moreover, [HF surface wave] radars have an inherent maximum range (due to the
way they operate) of about 180nm.... At long range [the radar’s beam] is not
nearly accurate enough to aim a missile. However, we can easily imagine a
netted system which would use the long-range [HF surface wave] radar to define
a small box within which the target ship would be. A missile with GPS [Global
Positioning System] guidance could be flown to that box, ordered to search it....
If the argument given here is realistic, then the considerable sacrifices inherent
in the DD(X) design no longer seem nearly as attractive. It can still be argued
that a design like the DD(X) is attractive well out to sea, beyond the reach of
coastal radars. In that case, however, there may be other signatures which can
be exploited. For example, ships proceeding at any speed create massive
wakes.... it is clear that the wake produces a radar return very visible from an
airplane or, probably, from a space-based radar....
In the end, then, how much is stealth worth? As a way of avoiding
detection altogether, probably less than imagined. That leaves the rather
important end-game, the hope being that decoys of some sort greatly exceed
actual ship radar cross-section. That is probably not a foolish hope, but it does
not require the sort of treatment reflected in [the] DD(X).
Now, it may be that the Untied States typically faces countries which have
not had the sense to buy anti-stealth radars (though we would hate to bet on that).

CRS-24
In that case, DD(X) may well be effectively invisible to them. So will a lot of
less thoroughly stealthy ships.35
Potential oversight questions for Congress include the following:
! SCIB and DDG-1000 requirements. Are the DDG-1000’s
requirements partly a result of inadequate discipline, following the
disestablishment of the SCIB, in the Navy’s process for setting
requirements for new ships? If the SCIB had remained in existence
during the DD-21/DDG-1000 design process, which of the DDG-
1000’s current requirements would have been reduced or
eliminated?
! Tumblehome hull. How much did the decision to use a
tumblehome hull (and other survivability features) increase the size
and cost of the DDG-1000? In the mid-1990s, when design work
began on the ship now known as DDG-1000, how well did the Navy
understand the relationship between using a tumblehome hull and
ship size and cost? What effect does the tumblehome hull have on
the DDG-1000’s ability to deal with underwater damage? To what
degree will HF surface wave radars negate the stealth characteristics
of the DDG-1000 design?
! AGSs. Since the DDG-1000 is the only ship planned to carry AGSs,
and since AGSs are viewed by the Marine Corps as necessary to
meet Marine Corps requirements for naval surface fire support
capability, should the AGSs be considered the most-critical payload
element on the DDG-1000, and certain other payload elements,
though desirable, as possibly less critical by comparison?
! Hangar. In light of the 167 current or planned helicopter hangar
spaces on other Navy surface combatants (2 spaces on each of 22
Aegis cruisers and the final 34 DDG-51s, and at least 1 space on
each of 55 LCSs), and the relatively limited number of Navy
helicopters available for filling those spaces, how critical is it for the
DDG-1000 to have a hangar with spaces for two helicopters?
Would it be acceptable for the DDG-1000 instead to have only a
helicopter landing platform and an ability to refuel and rearm
helicopters, like the first 28 DDG-51s?
! VLS tubes. In light of the 8,468 vertical launch system (VLS)
missile tubes on the Navy’s planned force of 84 VLS-equipped
Aegis ships (22 cruisers with 122 tubes each, 28 earlier DDG-51s
with 90 tubes each, and 34 later DDG-51s with 96 tubes each), the
ability of VLS tubes to store and fire either one 21-inch diameter
35 Norman Friedman, “The New Shape of Ships,” Naval Forces, No. II, 2006: 56-58, 60, 62-
63. Italics as in the original. Friedman makes somewhat similar comments in chapter 17
(pages 431-450) of U.S. Destroyers, An Illustrated Design History, Revised Edition, op cit.

CRS-25
missile or four smaller-diameter Evolved Sea Sparrow Missiles
(ESSMs), the ability in a networked force for a ship to control a
missile fired by another ship, and the DDG-1000’s key role in
providing naval gunfire support with its two AGSs, how critical is
it for the DDG-1000 to have 80 enlarged VLS tubes as opposed to
a smaller number, such as 64, 48, or 32?
! Command facilities. In light of the flag-level command facilities
on the 19 Aegis cruisers, as well as additional command facilities on
aircraft carriers and planned amphibious assault ships, how critical
is it for the DDG-1000 to have flag-level command facilities?
! SOF support facilities. In light of SOF support facilities on the
Navy’s planned force of four converted Trident submarines, or
SSGNs (66 or more SOF personnel for each ship),36 support
facilities for smaller numbers of SOF on Navy attack submarines
(SSNs), and the secondary SOF support role for the Navy’s planned
force of 55 LCSs, how critical is it for the DDG-1000 to have SOF
support facilities?
! AAW system. In light of the Aegis area-defense AAW systems on
the Navy’s planned force of 84 Aegis ships — which, though not as
capable in some respects as the DDG-1000’s AAW system in littoral
operating environments, would still be quite capable, particularly
when numbers of Aegis ships are taken into account — how critical
is it for the DDG-1000 to have an area-defense-capable AAW
system, as opposed to a more modest point-defense AAW system
capable of defending only the DDG-1000 itself (which might be
closer to the more modest AAW system that was originally
envisaged for the DD-21, the precursor to the DDG-1000)?37
36 For more on the SSGN program, see CRS Report RS21007, Navy Trident Submarine
Conversion (SSGN) Program: Background and Issues for Congress
, by Ronald O’Rourke.
37 Earlier editions of this report also asked the following question:
Gun shell capacity. In light of the DDG-1000 design feature that allows
underway replenishment of gun shells, creating the equivalent of an
almost-infinite ammunition magazine and permitting nearly continuous fire
support, how critical is it for the DDG-1000 to have a total gun shell capacity of
920 shells, as opposed to a smaller number, such as 600?
A December 2005 press stated that, as part of an effort to reduce the cost of the DDG-1000, the
Navy had reduced the magazine capacity of the design from 920 shells to 600. (Christopher P.
Cavas, “U.S. Ship Plan To Cost 20% More,” Defense News, December 5, 2005: 1, 8.)

CRS-26
Contract Strategy and System Integration
As mentioned in the Background section, the Navy since September 30, 2005,
has managed the DDG-1000 program through a series of separate contracts with
major DDG-1000 program contractors, and consequently is acting in at least some
respects as the overall system integrator for the program. This approach represents,
to some degree, a turn away from the trend in recent years under which the services
have transferred the overall system-integrator role to industry, and a return, to some
degree, to an earlier acquisition approach under which the services acted as the
overall system integrators. The Navy’s decision to manage the DDG-1000 program
this way follows actions begun in the 1990s, consistent with the strategy at the time
of shifting the system-integrator role to industry, to reduce the number of people in
the Navy’s acquisition commands. Potential oversight questions for Congress
include the following:
! Does the Navy retain sufficient in-house acquisition and technical
expertise to perform the system-integration functions that the Navy
is to perform under its DDG-1000 contracting strategy?
! Does the Navy’s contracting strategy for the DDG-1000 program
have any implications for how other defense acquisition programs
should be pursued?
Acquisition Strategy for Third and Subsequent Ships
As mentioned in the Background section, the Navy’s intended acquisition
strategy for the third and subsequent DDG-1000s is unclear. The Navy stated in
2006 that it intended to review the issue in late-2006. The issue has potentially
significant implications for the industrial-base effects of the DDG-1000 program (see
discussion below).
Potential Program Implications for Industrial Base
The Navy’s 30-year shipbuilding plan (see Table 3) calls for procuring an
average of about 1.5 DDG-1000s/CG(X)s over the next 17 years. The light-ship
displacement of the DDG-1000 (about 12,435 tons) is about 79% greater than that
of the DDG-51 Flight IIA design (about 6,950 tons). If shipyard construction work
for these two ship classes is roughly proportional to their light-ship displacements,
and if the CG(X) is about the same size as the DDG-1000, then procuring an average
of 1.5 DDG-1000s/CG(X)s per year might provide an amount of shipyard work
equivalent to procuring about 2.7 DDG-51s per year. Splitting this work evenly
between GD/BIW and the Ingalls shipyard that forms parts of NGSS might thus
provide each yard with the work equivalent of about 1.35 DDG-51s per year.
Supporters of these two yards argued in the 1990s that a total of 3 DDG-51s per
year (i.e., an average of 1.5 DDG-51s per year for each yard), in conjunction with
other work being performed at the two yards (particularly Ingalls), was the minimum

CRS-27
rate needed to maintain the financial health of the two yards.38 Navy officials in
recent years have questioned whether this figure is still valid. Building the
equivalent of about 2.7 DDG-51s per year equates to about 90% of this rate.
If GD/BIW were to build the second and fourth DDG-1000s, then the rather
lengthy interval between GD/BIW’s first ship (to be procured in FY2007) and its
second ship (to be procured in FY2010) could reduce GD/BIW’s ability to efficiently
shift production from one ship to the next.
If affordability considerations limit DDG-1000/CG(X) procurement to one ship
per year in FY2011 and subsequent years, the workload for the cruiser-destroyer
industrial base in those years would be reduced substantially from levels that would
be achieved under the Navy’s 30-year plan. Procuring one DDG-1000/CG(X) per
year might provide an amount of shipyard work equivalent to procuring about 1.8
DDG-51s per year, and splitting this work evenly between GD/BIW and Ingalls
might provide each yard with the work equivalent of about 0.9 DDG-51s per year,
which would be equivalent to 60% of the rate cited in the 1990s by supporters of the
two shipyards as the minimum needed to maintain the financial health of the two
yards.
If the Navy at some point holds a competition between the two yards for the
right to build all remaining DDG-1000s, the yard that loses could experience a
significant reduction in workloads, revenues, and employment levels.
Options for Congress
DDG-1000 Program
Potential options for Congress for the DDG-1000 program, some of which could
be combined, and some of which overlap with options for the CG(X) program (see
next section), include the following:
! approve the seven-ship DDG-1000 program as proposed by the
Navy;
! use a block-buy contract for DDG-1000s procured during the five-
year period FY2007-FY2011 or the five-year period FY2009-
FY2013;
! as an annual affordability measure, limit DDG-1000/CG(X)
procurement to a combined total of no more than one ship per year;
38 See, for example, CRS Report 94-343, Navy DDG-51 Destroyer Procurement Rate: Issues
and Options for Congress
, by Ronald O’Rourke (out of print, available from author).

CRS-28
! as total-program affordability measure, limit DDG-1000/CG(X)
procurement to a combined total of 12 ships (one for each of 12
planned carrier strike groups (CSGs));39
! procure no more than two DDG-1000s for use as technology
demonstrators for future, less-expensive surface combatants, and
supplement the industrial base with other work; and
! start design work now on a lower-cost naval gunfire support ship
and/or a lower-cost cruiser-destroyer, and start procuring these ships,
rather than additional DDG-1000s or CG(X)s, when these new
designs are ready for procurement.
Supporters of the second option could argue that it could reduce the total cost
of the DDG-1000s procured by a few percent. Opponents could argue that it would
reduce DOD’s flexibility for making adjustments in the shipbuilding plan, and
similarly tie the hands of future Congresses — something that Congress traditionally
tries to avoid in decisions on discretionary spending — by creating a commitment to
procure a certain number DDG-1000s through FY2011 or FY2013.
The third option might be considered as a response to limits on Navy resources
and desires for funding other Navy programs. This option would release DDG-
1000/CG(X) procurement funding programmed for FY2011 and future years for
application to other Navy programs. It would also increase DDG-1000/CG(X) unit
procurement costs due to reduced economies of scale in production, and deepen the
projected long-term cruiser-destroyer shortfall.
The fourth option, like the third option, might be considered as a response to
limits on Navy resources and desires for funding other Navy programs. It could
provide a limited number of DDG-1000s and CG(X)s for the fleet, while permitting
procurement to shift to a follow-on design (such as the DDG(X), the Navy’s planned
replacement for the DDG-51s) sooner than under the Navy’s current plan. This
option would increase average DDG-1000/CG(X) unit acquisition costs due to the
elimination from the program of ships that would have been further down the
learning curve, as well as reduced amortization of up-front DDG-1000/CG(X)
development and design costs.
The fifth option, might be consistent with a view that the DDG-1000 is not
affordable or not cost effective. This option could release DDG-1000 procurement
funding for application to other Navy programs. It could also have implications for
the shipbuilding industrial base, particularly if the industrial base receives a smaller
amount of other work in lieu of additional DDG-1000s.
The sixth option could reduce the average unit procurement cost of planned
cruisers and destroyers, permitting a larger number of cruisers and destroyers to be
procured for a given amount of funding. It would also likely reduce the average unit
39 Carrier strike group (CSG) is the Navy’s term for what used to be called carrier battle
group (CVBG).

CRS-29
capability of the future cruisers and destroyers. Below are discussions of two
possibilities for lower-cost ships — a lower-cost naval gunfire support ship, and a
lower-cost cruiser-destroyer.
Lower-Cost Gunfire Support Ship. CBO and Robert Work of the Center
for Strategic and Budgetary Assessments (CSBA) have both suggested, as a lower-
cost naval gunfire support ship, an AGS-equipped version of the basic hull design of
the San Antonio (LPD-17) class amphibious landing ship. Such a ship might begin
procurement in FY2009, following procurement of a final “regular” LPD-17
amphibious landing ship in FY2008. CBO estimates that an initial AGS-armed LPD-
17 might cost about $1.9 billion, including $400 million detailed design and
nonrecurring engineering costs, and that subsequent ships might cost about $1.5
billion each.40
Lower-Cost Cruiser-Destroyer. A new-design, lower-cost cruiser-
destroyer might:
! start procurement as soon as FY2011, if design work were started
right away;
! incorporate many of the same technologies now being developed for
the DDG-1000 and CG(X);
! employ a modular, “plug-and-fight” approach to some of its weapon
systems, like the LCS;
! be similar to the DDG-1000 and CG(X) in terms of using a reduced-
size crew reduce annual operation and support costs;
! use a second-generation surface combatant integrated electric-drive
propulsion system that is smaller and lighter than the first-generation
system to be installed in the first DDG-1000s;41
! carry a payload — a combination of sensors, weapon launchers,
weapons, and aircraft — that is smaller than that of the DDG-1000
or CG(X), but still sizeable; and
! be built in one or two variants — an air- and missile-defense version
to replace the CG(X), which would preserve CG(X) radar
capabilities while reducing other payload elements, and possibly also
40 See Congressional Budget Office, Options for the Navy’s Future Fleet, May 2006, pp. 56-
57 (Box 3-1).
41 The integrated electric-drive system to be installed in the first DDG-1000s uses advanced
induction motors. A second-generation system could use smaller and lighter motors and
generators that employ permanent magnet or high-temperature superconducting technology.
Both of these technologies are currently being developed. For more on these technologies,
see CRS Report RL30622, Electric-Drive Propulsion for U.S. Navy Ships: Background and
Issues for Congress
, by Ronald O’Rourke. (July 31, 2000)

CRS-30
a surface fire support version to supplement the DDG-1000, which
would preserve the DDG-1000’s two AGSs while reducing other
payload elements.
Notional options for a lower-cost cruiser-destroyer include, but are not limited
to, the following:
! a ship displacing about 9,000 tons — about the same size as the
DDG-51; or
! a ship displacing about 11,000 tons — about 25% less than the
DDG-1000’s displacement of about 14,500 tons, about the same size
as the nuclear-powered cruisers procured for the Navy in the 1960s
and 1970s, and about 1,800 tons larger than the DDG-51.
Such a ship might be based on either the DDG-51 hull design, which is a
conventional flared hull that slopes outward as it rises up from the waterline, 42 or a
new flared hull design, or a reduced-sized version of the DDG-1000’s tumblehome
(inwardly sloping) hull design.
The Navy in 2002 identified the following ship-design characteristics as items
that, if varied, would lead to DDG-1000 concept designs of varying sizes,
capabilities, and procurement costs:
! cruising range,
! maximum sustained speed,
! number of Advanced Gun Systems (AGSs) and AGS shells,
! hangar space for helicopters and UAVs,
! undersea warfare systems (i.e., sonars and mine countermeasures
systems), and
! numbers and types of boats for special operations forces.
Using these variables, the Navy in 2002 developed notional DDG-1000 concept
designs with estimated full load displacements ranging from 12,200 tons to about
16,900 tons. One of the concept designs, with an estimated full load displacement
of about 12,700 tons, included 32 Advanced Vertical Launch System (AVLS) cells
(rather than the DDG-1000’s 80), two AGSs (like the DDG-1000), 600 AGS shells
(like the DDG-1000), a maximum sustained speed a few knots lower than the DDG-
1000’s, and a helicopter flight deck smaller than the DDG-1000’s. Another concept
design, with an estimated full load displacement of about 12,200 tons, included 64
AVLS cells, 1 AGS, 450 AGS rounds, a maximum sustained speed a few knots lower
than the DDG-1000’s, and helicopter flight deck smaller than the DDG-1000’s.
The Navy in 2003 developed another set of notional DDG-1000 concept designs
with estimated full load displacements ranging from 11,400 tons to 17,500 tons. One
42 Using the DDG-51 hull in its current dimensions might produce a ship of about 9,000
tons; lengthening the DDG-51 hull with a mid-hull plug might produce a ship of about
11,000 tons.

CRS-31
of the concept designs, with an estimated full load displacement of 13,400 tons,
included 64 AVLS cells, 1 AGS, and 450 AGS rounds. Another concept design, with
an estimated full load displacement of 11,400 tons, included 32 AVLS cells, 1 AGS,
and 300 AGS rounds.
The 2002 and 2003 notional DDG-1000 concept designs with displacements of
less than 14,000 tons appear to have preserved other DDG-1000 features, such as the
wave-piercing, tumblehome hull, the integrated electric drive system (though with
reduced total power in at least some cases), the total ship computing environment,
the autonomic fire-suppression system and other features permitting a reduced-sized
crew, the DDG-1000 radar suite, the hull and towed-array sonars, medium-caliber
guns for use against surface targets, and a helicopter hangar (though not necessarily
as large a hangar as on the DDG-1000).
Reducing payload features a bit more than under the smallest of the 2002 and
2003 notional concept designs might lead to a design with a displacement of about
9,000 to 11,000 tons. The Navy has viewed designs of less than 14,000 tons as
unsatisfactory because of their reduced individual capabilities. It is not clear,
however, to what degree the Navy’s assessment of such designs also takes into
account the difference that size (and thus unit procurement cost) can have on the total
number of ships that might be procured within available resources, and consequently
on future cruiser-destroyer force levels. Total cruiser-destroyer force capability is
dependent on both cruiser-destroyer unit capability and the total number of cruisers
and destroyers.
For additional discussion of CG(X) design options, see CRS Report RS22559,
Navy CG(X) Cruiser Design Options: Background and Oversight Issues For
Congress
, by Ronald O’Rourke.
Notional Procurement Profiles With Lower-Cost Ships. Table 7 and
Table 8 show notional procurement profiles incorporating the ships described above.
In Table 7, an AGS-equipped version of the basic LPD-17 hull design is procured
to supplement the Navy’s DDG-1000s, and an air- and missile-defense version of the
smaller cruiser-destroyer is procured starting in FY2011 in lieu of the CG(X). In
Table 8, a smaller cruiser-destroyer in two versions — an AGS-equipped version to
supplement the Navy’s DDG-1000s, and air- and missile-defense version in lieu of
the CG(X) — is procured starting in FY2011.

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Table 7. Alternative With LPD (AGS)
and Smaller Cruiser-Destroyer
(annual quantities procured, FY2007-FY2021)
07
08
09
10
11
12
13-21
Total
DDG-1000
2a
0a
1
1
4
LPD (AGS)b
1
1
1
2
5
SCDc
1
2/year
19
Source: Prepared by CRS.
a. Each of the two ships to be procured in FY2007 is to be split-funded across FY2007 and FY2008.
b. Basic LPD-17 hull equipped with 2 Advanced Gun Systems (AGSs).
c. Air- and missile-defense version of smaller cruiser-destroyer (SCD), in lieu of CG(X).
Table 8. Alternative With Smaller Cruiser-Destroyer
(annual quantities procured, FY2007-FY2022)
07
08
09
10
11
12
13-22
Total
DDG-1000
2a
0a
1
1
1
5
SCDb
1
2/year
21b
Source: Prepared by CRS.
a. Each of the two ships to be procured in FY2007 is to be split-funded across FY2007 and FY2008.
b. Includes 2 AGS-equipped versions of smaller cruiser-destroyer (SCD), for a total (along with 5
DDG-1000s) of 7 AGS-equipped ships, and 19 air- and missile-defense versions, in lieu of
CG(X).
CG(X) Program
Potential options for Congress for the CG(X) program, some of which could be
combined, and some of which overlap with options for the DDG-1000 program (see
the previous section), include the following:
! approve the CG(X) program as proposed by the Navy;
! use a block-buy contract or multiyear procurement for CG(X)s
procured in future years;
! procure the CG(X) as a nuclear-powered ship (rather than as a
conventionally powered ship, as planned by the Navy);
! defer procurement of the first CG(X) beyond FY2011 to permit
additional procurement of DDG-1000s prior to commencement of
CG(X) procurement;
! as an annual affordability measure, limit DDG-1000/CG(X)
procurement to a combined total of no more than one ship per year;
! as total-program affordability measure, limit DDG-1000/CG(X)
procurement to a combined total of nine ships (one for each of nine

CRS-33
planned expeditionary strike groups (ESGs)) or 11 ships (one for
each of 11 planned carrier strike groups (CSGs));
! start design work now on a lower-cost cruiser based on a hull design
smaller than the DDG-1000 hull, and start procuring this design,
rather than a DDG-1000-based CG(X) design, when this smaller
design is ready for procurement.
Points of discussion for some of these options are similar to points presented for
analogous options in the previous section on options for the DDG-1000 program.
Regarding the third option, a nuclear-powered CG(X) would be more capable
than a conventionally powered version because of the mobility advantages of nuclear
propulsion, which include, for example, the ability to make long-distance transits at
high speeds in response to distant contingencies without need for refueling. The
Navy estimates that procuring the CG(X) as a nuclear-powered ship would likely
increase its unit procurement cost by $600 million to $700 million dollars. If oil
prices in coming years are high, much of the increase in unit procurement cost could
be offset over the ship’s service life by avoided fossil-fuel costs. Procuring the
CG(X) as a nuclear-powered ship might result in at least part of the ship being built
at one or both of the country’s two nuclear-certified ship construction yards —
Northrop Grumman Newport News (NGNN) of Newport, News, VA, and General
Dynamics’ Electric Boat Division (GD/EB) of Groton, CT, and Quonset, Point, RI.
For additional discussion of the option of procuring the CG(X) as a nuclear-
powered ship, see CRS Report RL33946, Navy Nuclear-Powered Surface Ships:
Background, Issues, and Options for Congress
, by Ronald O’Rourke.
For further discussion of the seventh option, see CRS Report RS22559, Navy
CG(X) Cruiser Design Options: Background and Oversight Issues For Congress, by
Ronald O’Rourke.
CSBA Report
A March 2007 report from the Center for Strategic and Budgetary Assessments
(CSBA) on the Navy’s surface combatant force makes a number of recommendations
regarding existing and future surface combatants. Appendix A of this CRS report
reprints these recommendations.
FY2008 Legislative Activity
FY2008 Defense Authorization Bill (H.R. 1585)
House. The House Armed Services Committee, in its report (H.Rept. 110-146)
on the FY2008 defense authorization bill (H.R. 1585), recommended approval of the
Navy’s request for FY2008 procurement funding for the DDG-1000. The report
recommended increasing the Navy’s FY2008 request for research and development

CRS-34
funding for the DDG-1000 program by $9 million for work on permanent magnet
motor technology. The report states:
The budget request contained $503.4 million in PE [program element] 64300N
for DDG 1000 total ships systems engineering, but contained no funds for
continued development of the permanent magnet motor. The committee
understands that the permanent magnet motor technology will save weight and
increase fuel efficiency in the next generation of surface combatants, including
the DDG 1000. The committee recommends an increase of $9.0 million in PE
64300N to complete design of the motor and motor control electronics. (Page
187)
Senate. The Senate Armed Services Committee, in its report (S.Rept. 110-77
of June 5, 2007) on the FY2008 defense authorization bill (S. 1547), recommended
approval of the Navy’s request for FY2008 procurement funding for the DDG-1000.
The report recommended increasing the Navy’s FY2008 request for research and
development funding for the DDG-1000 program by $15 million, of which $9
million wold be for work on a permanent magnet motor system and $6 million would
be for work on wireless encryption technology for use on Navy ships. The report
states:
Permanent magnet motor
The budget request included $621.5 million in PE 64300N for [DDG-1000]
destroyer total ship systems engineering. The budget request included no funding
for completing the development and testing of the permanent magnet motor
(PMM).
Present Navy and Marine Corps electric propulsion and power generation
systems are several times larger and heavier than mechanical drive equivalents,
limited by very heavy generation equipment and propulsion motors. The PMM
was developed to resolve this. Congress provided funding in fiscal year 2006
which the Navy and the contractor team used to complete factory testing, ship the
PMM engineering development model to the Navy’s land based test site, and
begin testing.
Because of the promise of this technology for future ship applications, the
committee recommends an increase of $9.0 million to incorporate changes
resulting from land based testing, repackage PMM design to reflect evolving
DDG-1000 requirements, and perform shock analysis.
Wireless encryption technology
The budget request included $621.5 million in PE 64300N for [DDG-1000]
destroyer total ship systems engineering, but included no funding to develop
wireless encryption technology. With the reduced manning planned on the DDG-
1000 and other vessels, the Navy will have to place greater reliance on
automation and having the crews stay connected to the ships’ computing
environment. Absent better wireless encryption technology, the goal of being
connected to all information systems will be problematic for very sensitive
information. The committee recommends an increase of $6.0 million to develop
better wireless encryption technology for use aboard Navy vessels. (Pages 203-
204)

CRS-35
Appendix A. CSBA Report on Navy Surface
Combatants
A March 2007 report from the Center for Strategic and Budgetary Assessments
(CSBA) discusses existing and future Navy surface combatants and makes the
following recommendations (emphasis as in the original):
— First, “fold” the CG-21 hand: cancel all planned new CG-21s [i.e., DDG-
1000s and CG(X)s] beyond the two DDG-1000s already authorized.
43 A
variation of this plan would be to build just one ship. By building two (or one)
operational test beds/technology demonstrators, the Navy can recoup most of the
previous “bets” made on the CG-21s. Having one or two test ships would allow
further testing and refinement of the SPY-3 multifunction radar, which is to be
installed on future aircraft carriers regardless of what happens with the
DDG-1000, and perhaps on other ships. Over time, the ships could be modified
to test other future surface combatant combat systems such as underwater combat
systems or electronic warfare systems. Regardless of configuration, the ships
would provide the battle fleet with a test article for new integrated power system
components as well as electrically-powered weapons. In this role, the less
capable advanced induction motor to be installed on the first two DDG-1000s
ships will be as effective as the permanent magnet motor — the Navy’s desired
electric motor. The ships’ larger VLS cells would allow the Navy to test larger
diameter guided missiles. In fleet exercises, the ships would help to identify the
true operational payoffs of ship stealth within the context of distributed naval
battle networks. Finally, these large ships with small crews would help the Navy
to refine the maintenance concepts for future optimally manned fleet combatants
(i.e., warships with reduced crews).
— Second, “hold” the Aegis/VLS fleet: design a comprehensive, Aegis/VLS
Battle Network Reliability and Maintenance (BNRAM) program, with the
goal of producing the maximum number of interchangeable, Interim Large
Battle Network Combatants. (I-LBNCs).
The Navy’s ultimate goal is to shift
to a new Large Battle Network Combatant, or LBNC — a far better description
of future Total Force Battle Network [TFBN] ships-of-the-line than the
multimission guided-missile “cruisers” and “destroyers” or general-purpose
“destroyers” associated with today’s legacy Total Ship Battle Force. Until they
can be designed, betting an additional $10-15 billion on five or six additional
DDG-1000s would appear to provide far less of a TFBN payoff than making a
similar sized or even smaller bet on a well-thought-out and executed BNRAM
program to convert the 84 programmed Aegis/VLS warships into more powerful
I-LBNCs. This conversion program would be patterned after earlier
modernization and conversion efforts, like the Fleet Reliability and Maintenance
(FRAM) program, which converted many of the large legacy fleet of World War
II destroyers into effective Cold War ASW escorts. The BNRAM would include
a thorough mid-life upgrade to the ships’ hull, machinery and electrical (HM&E)
systems; a combat systems upgrade to allow the ships to counter emerging
threats; and a battle network upgrade to allow the ships to operate as part of a
coherent naval battle network. Consistent with battle network precepts, the intent
of the BNRAM would be to bring as many ships as possible to a common
43 The CSBA report uses the term CG-21s to refer collectively to DDG-1000s and CG(X)s.

CRS-36
I-LBNC combat system baseline. The BNRAM would also aim to lower
substantially the operations and maintenance costs (O&M) costs necessary to
operate the legacy Aegis/VLS fleet, in order to save money in the near term, and
to offset to some degree the added costs necessary to keep older ships in service
over the longer term. A key part of this effort centers on reducing the crew size
needed to operate, maintain, and fight the ships. Importantly, because this effort
can justifiably be seen as converting legacy Aegis/VLS ships into more capable
I-LBNCs, the BNRAM should be funded out of more stable Ship Construction
Navy (SCN) funds rather than the more volatile O&M accounts.
— Third, immediately kick-start a clean-sheet competition to develop and
design a family of next-generation Large Battle Network Combatants, with
close oversight by the newly reconstituted Ship Characteristics
Improvement Board (SCIB).
For nearly a century, the Navy’s SCIB — a group
of high-ranking DoN [Department of the Navy] officials — worked to balance
desired warship warfighting requirements against their impact on a ship’s final
design and production costs. The primary reason why the Navy lost cost control
over the DD-21/DD(X)/DDG-1000 was that just as the ship entered its design
definition phase, the power of the Navy’s SCIB was waning, replaced by a Joint
requirements definition process with no fiscal checks and balances. One of the
first things Admiral Mike Mullen, the current Chief of Naval Operations, did
upon assuming his office was to reconstitute the Navy’s SCIB. With a chance to
start from a clean sheet of paper, naval design architects could leverage an
additional decade of experience in the post-Cold War era to design an entirely
new family of next-generation LBNCs, under the close oversight of the newly
reconstituted SCIB. These new warships would have a common gas turbine or
perhaps even a nuclear power plant that supplies enormous shipboard electrical
generating capacity; common electric propulsion motors; common integrated
power systems that distribute electric power to the ships’ electric motors, combat
systems, and weapons, as needed; and advanced automation to enable them to
operate with relatively small crews. Their single common hulls, or network
frames, should be large and easily produced, based on the best ideas of naval
engineers, with an affordable degree of stealth. The network frames would be
able to accept a range of open architecture battle network mission modules
consisting of sensors and onboard and offboard weapons designed explicitly to
support a battle network rapid capability improvement strategy. The
cost-constrained goal for the combination of network frames and network
mission modules would be to build new LBNCs at a rate of five every two years,
allowing the complete transition from 84 Aegis/VLS I-LBNCs to 88
next-generation LBNCs in 35 years. The ships would be built under a
profits-related-to-offer arrangement. While each of the two remaining surface
combatant shipyards could count on building one LBNC per year, they would
compete for an extra ship every other year. The yard with the lowest bid would
be able to claim higher profit margins on the two LBNCs it would build until the
next bi-annual competition. In this way, in addition to the natural cost savings
due to learning curve efficiencies, the Navy would be able to spark continuous
competition between the two building yards.
— Starting in FY 2008, build a minimum of seven additional [Arleigh]
Burke-class DDGs [i.e., DDG-51s] to help sustain the industrial base until
the new LBNC is ready for production.
In effect, building one modified Burke
each year between FYs 2008 and 2014 would replace the seven DDG-1000s in
the current plan. For reasons that are detailed in the forthcoming report, the first
four modified Burkes would be configured with the same Area Air Defense

CRS-37
Command Capability System (AADCCS) found on the Ticonderoga-class CGs.
In addition, all seven ships would serve as active test beds for DDG
improvements identified as possible candidates for further BNRAM backfits, or
to test next-generation LBNC technologies. As such, the ships would serve much
the same purpose as both the Forrest Sherman-class destroyers — which helped
to bridge the shipbuilding gap between World War II combatants and Cold War
combatants designed to battle jets, missiles, and high-speed submarines — and
modified legacy combatants like the USS Gyatt, DDG-1, which helped to
illuminate the way forward toward a new generation of BFC combatants.
Provided all went as planned, Congress would authorize two of the
next-generation LBNCs in FY 2015, split funded as in the current arrangement
for the DDG-1000, giving each of the two remaining surface combatant
construction yards one ship. The general fleet-wide transition from Aegis/VLS
I-LBNCs to the new LBNC design would then begin in FY 2017, with three ships
authorized after a bidding competition. Of course, if the design was not ready for
production, additional Burkes could be built until it was.
— Task each of the planning yards for CG and DDG modernization to
design and implement a comprehensive follow-on maintenance regime to
ensure all Aegis/VLS combatants are able to serve out the remainder of
their 35-year service lives effectively.
The Navy’s plan counts on every one of
the 84 programmed Aegis/VLS combatants of completing 35 years of
commissioned service. Yet, since the end of World War II, few surface
combatants remain in commission beyond 25-30 years of service — even after
receiving mid-life upgrades. Unless the BNRAM program includes a sustained
maintenance regime beyond its mid-life HM&E, combat systems, and battle
network upgrades and crew reduction measures, it is unlikely the ships will see
their 35th year. The building shipyards might be the logical organizations to
implement this new maintenance regime on the Navy’s behalf. By establishing
financial incentives that provide the yards with bonuses for every year a ship
stays in service beyond 25 years, the Navy will maximize the probability that the
ships will remain in service. As part of their efforts, the yards and the Navy
should also solicit ideas for further ship improvements from vendors, and
complete the trade studies for an expanded service life extension program
(SLEP) of the existing ships, with a goal of extending their expected service lives
to 40 years. This would provide a hedge should design work on the next-
generation LBNC be delayed for any reason, or if a future maritime challenge
spurs the need to rapidly expand the number of large combatants beyond the 88
included in the 313-ship Navy.44
44 Robert Work, Know When To Hold ‘Em, Know When To Fold ‘Em: Thinking About Navy
Plans For The Future Surface Battle Line
, Washington, Center For Strategic and Budgetary
Assessments, 2007. pp. 5-8. (CSBA Backgrounder, March 7, 2007).